syltone plc 
 
report and accounts 2003  contents
page
financial highlights 1
chairman’s statement 2
chief executive’s statement 4
financial review 9
board of directors 13
officers and advisers 14
group structure 15
directors’ report 16
remuneration report 18
statement of corporate governance 22
statement of directors’ responsibilities
in relation to the accounts 24
report of the independent auditors to the members
of syltone plc 24
consolidated profit and loss account 25
consolidated balance sheet 26
consolidated cash flow statement 27
statement of consolidated total recognised
gains and losses 28
reconciliation of movements in consolidated
shareholders’ funds 28
company balance sheet 29
notes to the accounts 30
historical summary 50
group five year record 51
notice of meeting 52
financial calendar
annual general meeting 4th september 2003
final dividend payable 3rd october 2003
interim results announcement 20th november 2003
interim dividend payable february 2004
end of financial year 31st march 2004 2003 2002
£’000 £’000 increase
turnover 78798 75464 44
profit before tax and exceptional items 4803 4148 158
profit before tax 4803 3508 369
profit after tax 3022 2014 500
net assets 20510 19985
net borrowings 10965 14456
profit before tax to turnover 61 46
profit before tax to net assets employed 234 176
gearing net borrowings to net assets 535 723
interest cover times 57 40
earnings per ordinary share 1210p 799p
diluted earnings per ordinary share 1206p 796p
dividends per ordinary share 735p 735p
dividend cover times 165 109
average number of people employed 840 875
annual report 2003 1
financial highlights at the interim stage the board expressed confidence that the second half of the year would be substantially
more profitable than the first and i am pleased to report that such a view was well founded  profit before tax for
the year has increased by 369 from the previous year to a total of £4803000 2002 £3508000  earnings
per share have risen to 1210 pence 2002 799 pence an increase of 514 over the prior year with a much
reduced tax charge of 371 2002 426  increased profitability together with a continued focus on working
capital management has generated improved operating cash flow of £326 million up 524 compared to the
year before  reduced interest and tax payments together with a lack of major capital expenditure
requirements following the completion of the new group erp system have significantly improved the groups
net free cash flow before disposal proceeds and financing by £521 million over the previous year  as a
consequence group net borrowings have fallen appreciably to £1097 million at 31 march 2003 2002 £1446
million with year end gearing reduced to 535 2002 723
dividend
the board has decided that the final dividend should remain unchanged at 510 pence per ordinary share
2002 510 pence per ordinary share giving a total payment for the year of 735 pence per ordinary share
2002 735 pence per ordinary share  at this level the dividend is covered 165 times 2002 109 times which
is just below our target range of 18 to 22 times
operational review
it is pleasing to be able to report an improved operating performance for syltone during 200203 despite the
difficult market conditions which the main businesses of the group have been experiencing  on slightly
increased sales the company has again achieved a healthy improvement in operating margin up to 74
200262 and reached its best ever profit per employee figure  international sales of commercial vehicles
which is the key factor in demand for syltone transportation equipment have at best been flat during the year
whilst some markets have shown a significant decline  the final actions of the groups reorganisation were
completed during the year and the results have benefited considerably this year from having a more stable
committed management at all levels throughout the business
transportation division
the general purpose operation has shown improved results and has been buoyed in particular by the
increasing market acceptance of its new blower products the xk range  the highways and utilities business in
the uk has had a quieter year but airdrive products have been introduced into australia to positive effect
priestman access platforms has had an excellent year with order intake reaching higher levels than ever before
and webster drives has achieved great success in winning major orders the fruits of which will be seen in the
years to come  oil has been somewhat subdued with better business flows from france offsetting a shortage
of major opportunities elsewhere
fluid transfer division
our german manufacturing facility has been at full capacity this year as significant orders have been won in the
eastern parts of europe and central asia  operating performance has benefited accordingly and the division
has shown a much improved result compared to previous years  the new distribution arrangements in north
america for chemical loading arms now have had a full year of trading and have enhanced operating
performance considerably although less than anticipated at the start of the year because of slowness in us
markets
annual report 2003 2
chairman’s statement europe
despite the flat conditions in transportation markets across europe results have improved considerably as
general purpose products have found increasing acceptability and access platforms have done well in a
buoyant uk market  in addition to the excellent returns from the german fluid transfer operations activity in
syltones french operations has been at an extremely high level with good performances from all business
segments
americas
transportation businesses in the usa have continued to suffer from a declining market for new trucks which
has shown a further reduction on the low levels of activity experienced in the previous year    sales of fluid
transfer equipment increased substantially over levels in prior years as a consequence of the new distributor
agreement for chemical loading arms but the market itself was subdued resulting in lower growth than planned
operations in canada were at a slightly lower level than in the previous year primarily as a consequence of
softness in the market for bus fuelling systems throughout north america
rest of the world
activity in australia improved somewhat over the low levels of the previous year  encouragingly the new xk
blower range was launched in australia during the year with good market acceptance and new products and
systems to serve the vehicle onboard power market in australia were demonstrated and initial orders were
won  syltones company in malaysia made a positive contribution to the group result in a quiet market but the
small brazilian business suffered with the erratic exchange rate and a generally difficult business environment
acquisitions
since the end of the year we have been pleased to announce three small additions to our business in the usa
the first of these was the acquisition of the 5 of syltone industries llc that syltone plc did not previously own
for a consideration of 709000 in cash  the second and third were the acquisition of certain assets of ce
loading systems inc and aarig terminal systems inc for a combined net cash consideration of 1110000
which is subject to adjustment depending on inventory levels at close  both are leading companies in the
provision of new loading arms and aftermarket services for the marine loading arm market in north america
this step will considerably enhance the groups presence in this niche market in particular for the provision of
aftermarket services
the search for selective opportunities to acquire businesses that will reinforce the groups position within its
current market sectors will continue
prospects
syltone has entered the new financial year with a stronger order book than that of twelve months ago  this
should help in the achievement of a better balance between this years six monthly trading periods as a
stronger first half performance is expected over that of last year  even though it is unlikely that in the short term
there will be an upturn in market conditions management is confident that there is still more potential to
enhance operating returns from the core business  efforts will be intensified in the building of profitable market
share and when there is a stimulus to demand the board is confident that syltone is well positioned to take
advantage of it
peter andrews
chairman 24th june 2003
annual report 2003 3
chairman’s statement 4 annual report 2003
chief executive’s statement
operational review
a large proportion of syltone’s business depends on international commercial vehicle markets and in most
major economies served by syltone purchases of these vehicles declined again last year  therefore it is most
encouraging to have achieved a significant improvement in the performance of the group   group turnover
rose 44 to £788 million and operating margins to 74 from 62 the year before  the value of orders won
during the year increased by 65 and the order book at 31 march 2003 was 19 higher than at the previous
year end
transportation division
our main transportationrelated manufacturing businesses are located in the uk france and the usa with
vehicle fitting operations and sales organisations in many other countries throughout europe and the rest of the
world  they are focused on the design and
manufacture of equipment for handling bulk
product on commercial vehicles in either dry or
liquid form the provision of onboard power
the design and manufacture of access
platforms and the design and manufacture of
power takeoffs “pto’s” axles and
gearboxes for demanding applications both
commercial and military
in europe the transportation division has
shown an improved performance compared to
the recent past  the management has now
settled down well after a period of
restructuring and has focused on building
upon the group’s marketleading position
our sales operations in france have had an
outstanding year with activity in the oil sector
in particular continuing to be very buoyant  since the restructuring carried out two years ago many of the
groupbuilt products supplied into this market are manufactured in the emco wheaton factory in margate and
the success of this operational change had a considerable impact on the performance of syltone in the year
elsewhere in the oil sector activity was at a lower level than the year before in particular there was no benefit
from major international opportunities during the course of the year the margate factory is highly automated
and is able to respond rapidly to the reequipping of major road tanker fleets when for example a major
national programme of conversion to bottom loading of petroleum tank trucks takes place our small
electronics business in denmark sam system
improved its throughput and profitability by a modest
amount in the year
operations in northern europe  the netherlands
germany belgium and poland  succeeded in
growing volume and market share in a flat or declining
market  these businesses have benefited particularly
from the increased market acceptance of the new xk
range of blowers introduced shortly before the start of
the financial year  this growth has in its turn had a
highly significant impact on our main manufacturing
operations in bradford where activity levels rose 
d9000 compressor and hydraulic drive system on daf vehicle
api valves fitted complete with guard bar and product return
system 5 annual report 2003
chief executive’s statement
sharply in the second half of the financial year and have remained at a high level since
activity levels in southern europe have shown an upturn  the operation in spain based in madrid and with
fitting shops both in madrid and in tarragona near barcelona has been revitalised during the course of the year
and has made excellent progress in addressing the market in spain for blowers and hydraulic drives  our
business in italy has also improved considerably following the introduction of new management and offers great
potential for the development of sales within a large market
unlike many of its competitors the xk range was produced specifically for the dry bulk road tanker market and
was designed to show superior product delivery capability with high
reliability low power consumption and low noise characteristics this
development has proved to be most successful and its success has
made a major contribution to the encouraging results achieved by our
springmill street factory in bradford
considerable effort has also been made by this sector of our business
to improve factory operating efficiencies to lower cost and to reduce
inventory  consequently focus has been given to the worldwide
search for more economical sources of supply  both improved
profitability and reduced capital employed in the business have been a
positive outcome of this approach
perolo our french manufacturing business had an eventful year
having experienced a disruptive fire at the end of september 2002
it is pleasing to report that the employees at perolo took this event in their stride and were quickly back in
production  perolo now has new senior management in place and continues to address the isotank container
business which remains depressed
our highways and utilities and priestman
access platform businesses are centred
on the cross lane facility in bradford in
the uk although the year saw the
substantial completion of the major
programmes for transco and bt  it also saw
the launch of the first reliable system for the
provision of onboard power for frontwheel
drive vehicles and achieved major
successes for fleet deliveries for the aa
the priestman business has had an
extremely strong year and has provided
considerable encouragement both by its success in the market place and by the ability of our factory personnel
to find better and more efficient means of assembling the machine and sourcing the parts  output grew by over
50 compared to the previous year and significant cost reductions were achieved  the most significant order
secured during the year was that from the irish utility eircom whose order for 76 115 metre elevating platforms
was the largest order for access platforms ever won for priestman products under syltone’s ownership
webster drives has had a good year although with profitability just below the level of the year before  progress
has been made with market penetration of the company’s range of clutch pto’s but the operating highlight of
the year has been the success of the company in winning an order for the manufacture of axles for a major
defencerelated application which will commence in the second half of the 200304 financial year  it is
expected that this new opportunity will have a considerable impact on the activity level and profitability of
webster drives in future years
last year’s annual report made mention of the increasing focus syltone intended to give to its aftermarket
activities  the operations are based at cross lane at bradford and were carefully restructured a year ago to
xk 18 compressor
xk 18 application in australia annual report 2003 6
chief executive’s statement
form teams dedicated to customer support and care customer service has improved dramatically and the
consequence to syltone can clearly be seen in increased aftermarket activity enhanced contribution and
significantly improved opportunities for the future
in north america syltone’s transportation business is centred on the manufacturing plant in louisville
kentucky where a range of blowers and hydraulic drive equipment is manufactured  it is from the louisville
offices that the group’s north american distribution network is managed and through which the group’s
products manufactured both locally and in europe are distributed into north america  activity last year in the
north american transportation business was disappointing  commercial vehicle sales were at a significantly
lower level than even the depressed levels of the year before and syltone’s sales were correspondingly reduced
intense competitive pressure continues and the decline in the value of the us dollar relative to sterling has
caused a squeeze on the margins of this business
fluid transfer division
the fluid transfer division is involved with the design and manufacture of equipment for loading and offloading
liquids from ships railcars and road vehicles and the design and manufacture of drybreak couplings  
our european facilities for the manufacture of loading arms of all types are located at kirchhain in germany  in
north america loading arms for use with railcars and road vehicles are manufactured in louisville kentucky
and since our new acquisitions were announced in may 2003 we manufacture marine loading arms in
houston texas  in canada our company specialising in the manufacture of drybreak couplings is located in
toronto  distribution of fluid transfer products is also carried out through major group operations in france and
australia
the performance of the division has been encouraging  volumes grew substantially throughout the year in each
of our major markets  the focus by our german operation on developing markets in russia and adjacent
countries both in central asia and in the baltic states has proved to be most rewarding during the year with
major contracts having been won and delivered  projects still in the order book at the year end included the
prestigious wysotsk project for lukoil the russian oil major which is the largest ever loading arm project won
by syltone
in the usa activity level increased following the addition of a major new distributor for chemical loading arms
early in 2002  this relationship has proved very fruitful although tempered by the subdued us economy but
bottom loading arm rack annual report 2003 7
chief executive’s statement
we are confident now that our loading arm division is very well positioned for the future
one of the most positive aspects of the fluid transfer operation was in our business based in france where
developments both in that country itself and in french influenced regions of north africa provided strong growth
for our activities
emco wheaton corporation our canadian dry break coupling business continued to grow its strong position
in the supply of devices to the bus and utility vehicle market throughout north america  business was quieter
during the year as spending by american public authorities remained at lacklustre levels  nevertheless the
company achieved a creditable result albeit somewhat below the level of the previous year
strategic review
syltone’s strategy is to focus on products and services embraced within the two main business segments of
equipment for the transportation market and for loading and offloading liquids from one mode of transportation
onto another or into store  the group is constantly developing and researching additional products or services
which will add to its business portfolio or competence or which will add geographical reach to the group’s
product offerings
key assets for syltone are its wellknown brands including airdrive webster drum emco wheaton perolo and
priestman for transportation equipment and emco wheaton and now augmented by syltone marine aarig and
celsi for fluid transfer equipment  these names are deemed to be critical to the continuing success of the
business  in addition to the sale of products under the group’s owned brand names the sale of other
complementary high quality products also features prominently in the group’s strategy to enable full benefit to
be taken from the group’s welldeveloped international distribution network underpinned by the nine key
engineering and manufacturing centres the leveraging of this international distribution network provides the
platform for the furtherance of the group’s objective of profitable growth  
a brief overview of the strategic strengths and objectives of our two divisions is set out below
transportation division
our key operating strategy is to focus firmly on the needs of the
end user of our equipment and to develop our selling resource
accordingly  frequently syltone’s sales are actually made to a
tank builder or intermediary but despite this it is to the end
user that the benefits of the equipment and its support services
are primarily sold  this enables us not only to differentiate
clearly our products’ unique capabilities in relation to those of
our competition but also to extend our sale to incorporate
where possible a complete system of products to meet the
customer’s requirements more exactly  it also permits syltone
to make use of another of its key competitive strengths its
aftermarket support programme which provides service
contracts and extended product support to users of syltone
equipment
to further syltone’s close contact with endusers company
owned fitting shops are located in ten key sites throughout
western and central europe to provide each customer with the
option to have equipment supplied by syltone to be fitted exactly in accordance with the manufacturer’s best
practices  such close contact to the enduser provides operating experience to syltone which is unique in the
industry
da 115 metres access platform key action plans for the coming year are set out below
• increase the rate at which new products are released into the market by reducing the time between product
conception and launch
• develop the already successful aftermarket programme with new
product offerings and into new regions
• extend the range of offerings of airdrive and priestmanbranded
products into new geographical areas
fluid transfer division
focus on the enduser is every bit as important to our fluid transfer
division as it is to transportation  in this division there is less likelihood
of there being an intermediary in the sale process but the paramount
importance of product excellence and product differentiation remains
the same
the smaller distribution loading arms for road vehicle and railcar
applications are manufactured in both europe and north america since
reduced manufacturing lead times have become increasingly important and intercontinental transportation
would be prohibitively expensive  the larger marine loading arms have hitherto been manufactured only in
germany leaving a strategic gap in serving key markets in north america for both new product and importantly
aftermarket services
this strategic gap was filled in may 2003 by the establishment of our own company in north america founded
on the assets and brand names of an existing wellknown competitor and the former emco wheaton licensee
we believe this will enable syltone to draw as close to its prospective customer base in the new world as it
currently does in the old
key action plans for the coming year are set out below
• develop the new north american capability for manufacture and support of marine loading arms into a
major competitor throughout north america
• extend the existing european aftermarket programme into new regions
• continue the internationalisation of the divisions product offerings to ensure that the division retains its
position as a leading supplier of marine and distribution loading arms worldwide
trevor murch
chief executive 24th june 2003
annual report 2003 8
chief executive’s statement
hydrapak – oil cooler
marine loading arms annual report 2003 9
financial review
operating results
the highlights of the operating results for 200203 are shown on page 1  the full profit and loss account
balance sheet and cash flow statement and associated notes are shown on pages 25 to 49
turnover is 44 ahead of that reported last year  in like for like currency terms translating at the respective
31st march closing rates which have seen the us dollar depreciate 11 whilst the euro has appreciated by
11 over the year turnover is up 12 on the previous year
sales into europe appreciated in real terms by 115 france saw real terms growth of 15 on the back of a
strong demand for oil products and germany a more modest rise of 45  the other european countries most
notably netherlands spain and italy improved by 12 over the previous year very much as a result of sales of
the new xk blowers  uk sales fell £265m from last years level primarily due to the completion of the highways
 utilities divisions major contracts for transco and bt this aggregate uk fall hides a 10 improvement in uk
sales at webster drives in bolton
sales into north america improved 11 in real terms primarily as a result of increased fluid transfer sales
deriving from the addition of a major new chemical loading arm distributor  this masked a disappointing year for
transportation sales where market conditions remain depressed
turnover in the rest of the world was 8 down in real terms on last year as oil market sales from the uk and usa
were lower and currency devaluation in brazil increased the cost of sales into that country  strong growth was
however recorded in australia and sales of perolo fluid transfer equipment into north africa and fluid transfer
loading arms generally were both well ahead of last year
the full translation impact of the movement on turnover by geographic destination is illustrated by the table
below  the middle column shows this years turnover at last years exchange rates
2003 2003 2002
at actual at 2002 at actual
exchange rate exchange rate exchange rate
£’000 £’000 £’000
uk 21556 21556 24207
france 10777 9573 8305
germany 6773 6011 5756
other european 13362 12082 10753
north america 15340 16579 14952
other 10990 10604 11491
total 78798 76405 75464
turnover for the second half was £417m 2002 £397m which as last year represents close to 53 of the
turnover for the full year  as in previous years whilst turnover is apparently only marginally biased in favour of the
second half the operational gearing of the business provides a much heavier bias on operating profit towards
the second half  this year this effect was further enhanced by margin improvements achieved by the increasing
focus applied to aftermarket activities particularly in the uk and the success of a number of buying initiatives
and the consequent resourcing of the supply of certain raw materials and components  the operating margin
for the second half was 95 2002 71 leaving an operating margin for the full year of 74 2002 62
uk pension cost
as reported last year the employers contribution on the larger of the groups two uk defined benefit pension
schemes has increased to 20  payments at this level which are designed to recover the past service deficit
as well as fund current service are significantly in excess of the uk pension cost charged to the profit and loss
account  the charge to the profit and loss account in respect of the two uk defined benefit pension schemes
as calculated under ssap24 was £854000 2002 £995000 an amount which is £493000 2002 £835000
less than the employers cash contributions paid into the schemes  had the profit and loss account charge
been calculated under the rules of the new accounting standard frs17 it would have been £48000 lower than
the calculation made under ssap24
the groups pension commitments are fully disclosed in notes 26 and 27 and the funding position of the two
closed uk defined benefit schemes is further analysed later in this report
interest
strong cash flow benefiting from increased operating cash flow and lower capital expenditure and tax payments
has reduced net borrowings through the year  as a consequence net interest payable has reduced by
£166000 or 14  interest payable was covered 57 times 2002 40 times profit before tax
profit before tax is £4803000 2002 £3508000  last years profit before tax before exceptional restructuring
costs was £4148000 and therefore this years performance represents a 16 increase on that figure following
on from a 10 increase achieved in the previous year
taxation
the tax charge for the year is £1781000 2002 £1494000 an effective rate of 371 2002 426  last
years tax charge included full provision for unrelieved act of £105000 which if not made would have left a tax
charge of 395 for that year  the reduced tax charge for this year is due in part to the groups restructuring
and also to the improved profitability providing for the utilisation of tax losses being carried forward
earnings per share
earnings per share have increased by 51 in the year to 1210p per ordinary share 2002 799p per ordinary
share
dividend
it has been board policy to maintain the dividend during the group restructuring that has been carried out over
the last two years  the proposal is that the current dividend is maintained this year  the improved profitability
achieved this year now has the dividend covered 165 times 2002 109 times but still a little short of the
groups desired target range of 18 to 22 times
cash flow
cash flow from operating activities is £9475000 2002 £6217000 an increase of 52  this has been
achieved not only by the improved profitability but also by the major drive to reduce working capital particularly
stocks which have fallen during the year in like for like currency terms by £1669000  one of the core objectives
of the simplification of the group structure was to reduce stock holding  the success of this action since the
reorganisation was announced in july 2000 whereby stock has reduced by nearly 15th is shown below
year ended 31st march
2003 2002 2001 2000
£’m £’m £’m £’m
turnover 788 755 757 774
stocks 115 129 132 142
the operating cash flow includes payments into the main uk pension scheme that were £05m 2002 £08m
greater than the profit and loss account charge  these excess payments are being made to fund the past
service deficit and are considered in more detail later in this review
interest payments have reduced as borrowings have been repaid  taxation payments have fallen primarily due
to taxable profits being relieved against tax losses being carried forward in certain fiscal jurisdictions
capital expenditure in the year at £1271000 2002 £2329000 was low by recent standards  this however
reflects the completion of a number of major projects rather than any constraint of necessary spending  recent
years have included capital expenditure in relation to the merger of the usa operations the new drum
international factory millennium it expenditure and most recently the new group erp system  as a
consequence of the high level of capital expenditure in previous years the groups core facilities and systems
are now of such quality that capital expenditure looking forward over the medium term should remain less than
depreciation
the strong operating cash flow together with the reduced interest taxation and capital expenditure payments
described above have produced a net cash inflow before financing and subsidiary disposal proceeds of
£4374000 2002 £837000 effectively a free cash flow before financing and disposal proceeds £5211000
better than last year
as a consequence in aggregate the groups net borrowings have reduced by £3491000 during the year to
stand at 31st march 2003 at £10965000 2002 £14456000  gearing at 31st march 2003 was 535
2002 723
since the year end the group has acquired for cash the minority interest in syltone industries llc based in
louisville kentucky for 709000 and the business and assets of two leading manufacturers of marine loading
arms in houston texas and gulfport mississippi for a combined net cash consideration of 1110000  had
these acquisitions taken place at 31st march 2003 then group net borrowings would have been £12116000
and gearing 591
annual report 2003 10
financial review annual report 2003 11
treasury
the group is financed through a mixture of retained profits and medium term bank borrowings  the groups
treasury strategy is to reduce exposure to significant movements in foreign exchange and interest rates as far as
commercially possible and to ensure an appropriate age profile of borrowings
the group enters into derivative transactions to manage the interest rate and currency risks arising from the
group operations and sources of finance  the derivatives used throughout the period under review have been
exclusively interest rate swaps and forward foreign exchange contracts it is group policy only to use these
derivatives to cover underlying exposures that arise in the normal course of the groups stated commercial
activities  no purely speculative trading in these financial instruments is undertaken
interest rate risk
the group borrows to finance its activities  bank loans are taken out at fixed and floating rates and bank
overdrafts are by their nature subject to floating rates  the group takes out interest rate swaps to provide the
desired interest rate profile  it is group policy to have approximately 50 of bank loans subject to fixed rate
cover  additional fixed rate cover above this level may be taken if the rates applicable to the relevant period and
currency interest rate swaps are considered to be commercially sound for the group at that time  as overdrafts
provide short term flexibility to the groups liquidity fixed rate cover is rarely taken out on overdraft balances  at
the year end 60 of the groups borrowings were at fixed rates of interest
liquidity risk
the groups principal borrowings were last renegotiated at 1st april 2002  broadly half the facility matures in
three years from that date with the other half being repaid in equal installments over the 5 years following that
date  other longer term borrowings have been taken typically to finance long term property assets
foreign currency risk
the group faces currency exposure on
i translation of profits earned in overseas subsidiaries
ii translation of intragroup lending almost exclusively from the uk holding company to overseas
subsidiaries
iii translation of net investments in overseas subsidiaries
iv trading transactions undertaken by subsidiaries in currencies foreign to their functional currency
the group does not normally hedge its exposure to the translation of overseas profits as these are an
accounting rather than a cash exposure  however in respect of intragroup dividends if there is a material time
lag between declaration and payment then cover by way of forward exchange contract may be taken
the uk holding company aims to cover as close to 100 as possible of the exposure on intragroup lending to
overseas subsidiaries  this cover is achieved by taking on borrowings in the exposed currency either in
overdraft or loan form depending on the period of the intragroup funding  achievement of the 100 cover
objective is denied only by no borrowing market being available in certain currencies
the groups policy is to arrange its borrowing currency profile as far as practical to hedge the translation
exposure on its net investments in overseas subsidiaries and also to hedge the majority of budgeted transaction
exchange risks forward with the use of forward exchange contracts  forward exchange contracts are only
taken out when the timing of the cash flows can be predicted with reasonable certainty and it is commercially
sensible to do so  in addition the groups structure with principal manufacturing facilities in usa france and
germany as well as the uk allows an element of natural hedging of some cash flows  at the year end the
principal transactional exposures covered by forward contracts were usa purchases from the uk the net
transactional receipt of euros into the uk and australian purchases from the usa  all principal transactional
exposures continue to be monitored and short term contracts are taken when exchange rates are perceived to
have moved in our favour
pensions
the groups pension commitments are set out in notes 26 and 27  the majority of the groups pension
arrangements are defined contribution schemes however in the uk and germany the group operates defined
benefit schemes  all these defined benefit schemes are closed to new members
the german scheme is partially funded the full net liability being held on the subsidiary company emco
wheaton gmbhs balance sheet  the remaining active members are either under 30 years of age or over 55
years of age  at 30 the younger members transfer to the new defined contribution scheme whilst the over 55s
continue until retirement
the group operates two uk defined benefit pension schemes the larger syltone scheme and the smaller
emco wheaton scheme  the syltone scheme is underfunded and the emco wheaton scheme is overfunded
the exact level of under and over funding depends on which valuation basis is applied  no single valuation
financial review basis can adequately summarise the complexity of even a small pension scheme however those required to be
disclosed are fully described in notes 26 and 27  the benefits provided by the two schemes are different and in
order to provide common benefits across the uk workforce the benefits provided under the emco wheaton
scheme are being upgraded to the syltone scheme level as part of a merger of the two schemes  part of the
surplus on the emco wheaton scheme is being applied for this purpose  the two schemes will merge with
effect at 30th june 2003 being the year end of the larger syltone scheme
upon the merger the pension contribution holiday enjoyed by the group on the emco wheaton scheme since
the acquisition in 1995 will end and employers contributions will commence at the same rate as for the syltone
scheme  it is projected that this action will increase the cash amount paid into the uk pension schemes by the
group by £250000 on an annual basis
the group continues to account for defined benefit pension schemes in accordance with ssap24 although full
disclosure is made in note 27 of the accounting entries that would be required by frs17  the profit and loss
account charge under both bases for the two uk schemes for the year to 31st march 2003 is not materially
different with ssap24 giving a marginally higher cost
ssap24 frs17
basis basis
£’000 £’000
service cost 926 930
interestnet return 72 99
p  l charge for the year 854 831
frs17 goes further than ssap24 and attempts to quantify the actuarial surplus or deficit of a scheme  this is
done by taking an actuarial calculation of scheme liabilities and discounting them to provide a present value and
then comparing this to a market value snapshot of the investments  both these numbers are potentially subject
to great volatility  assets values are subject to short term market movements whilst liabilities depend on the
choice of a discount factor  the actuarial deficit reported by frs17 on the groups defined benefit pension
schemes has increased significantly from last year
31st march 2003 31st march 2002
£’000 £’000
market value of scheme assets 24976 28321
discounted value of scheme actuarial liabilities 39595 33408
scheme deficit 14619 5087
related deferred tax asset 4451 1591
net pension liability 10168 3496
liabilities have increased by £6187000 but of this increase only £937000 relates to the current years service
cost  £4274000 relates to changes in assumptions most notably the discount factor  the scheme actuary
has a range of acceptable discount factors for the board to select from for the year ended 31st march 2003
a 025 variance in the discount factor selected increases or decreases the reported liabilities of the syltone
scheme by £13m
the market value of the scheme assets has fallen by £3345000 despite the group contributing £1657000
during the year  market movements can be extremely volatile and by way of example of the assets valued at
31st march 2003 at £24976000 £17840000 are under management by schroders and in the thirty days
immediately after the year end the market value of these investments increased by £1480000
accordingly had a discount factor 025 greater been selected and the market value of the investments been
as at 30th april 2003 rather than 31st march 2003 then the frs17 reported scheme deficit would have been at
least £2780000 19 smaller  in the context of this potential short term volatility it should always be
remembered that the pension scheme liabilities concerned crystallise in the course of the next 60 years or so
andrew hartley
finance director 24th june 2003
annual report 2003 12
financial review annual report 2003 13
peter andrews aged
56 has been chief
executive of a number
of international
engineering companies
both in europe and the
us most recently he
has been chairman of
sterling fluid systems
a large multinational
engineering group

trevor murch aged 53
was previously chief
executive of hadleigh
plc and before that
managing director of
major subsidiaries of
rolls royce plc and
howden group plc
andrew hartley aged
47 qualified as a
chartered accountant
with kpmg prior to
joining syltone as
group financial
controller in 1992 he
was finance director
of encon rgs
insulation ltd he
joined the board as
finance director in
1997
member of the nominations committee
member of the remuneration committee
member of the audit committee
richard templeton
aged 58 senior non
executive director
retired as a director of
robert fleming  co
ltd in april 2000 after
29 years’ service
primarily in corporate
finance he is
chairman of the west
of england trust ltd



john barnsley aged
54 was uk managing
partner of
pricewaterhouse
coopers and until his
recent retirement
global leader of
business process
outsourcing he is
currently also a director
of grainger trust plc
and northern investors
company plc



david speirs aged 58
is an experienced
international executive
with a wealth of
relevant industrial
experience former
automotive group
chief executive of
btr plc chairman
and chief executive of
dynacast international
ltd and main board
director of coats
viyella plc



peter j andrews ma
chairman
richard templeton
john c barnsley llb f ca
david l speirs bschons
phd ceng mim
trevor j murch ma mba
acma
chief executive
andrew hartley bahons
aca
finance director and  secretary
executive directors nonexecutive directors
board of directors annual report 2003 14
secretary a hartley bahons aca
registered office springmill street
bradford
west yorkshire
bd5 7hw
registered  number 736644
auditors kpmg audit plc
1 the embankment
neville street
leeds ls1 4dw
advisers ing barings investment bank
60 london wall
london
ec2m 5tq
brokers williams de broë plc
6 broadgate
london
ec2m 2rp
registrars northern registrars ltd
northern house
woodsome park
fenay bridge
huddersfield hd8 0la
solicitors addleshaw goddard
sovereign house
sovereign street
leeds ls1 1hq
gordon cranswick
14 piccadilly
bradford
bd1 3lx
officers and advisers annual report 2003 15
parent company
syltone plc coordinates and controls the activities of the syltone group
country of  of equity 
incorporation owned by group
intermediate holding companies
 syltone industries plc england 1000
syltone industries gmbh germany 1000
syltone industries sa france 1000
principal subsidiary companies
manufacture of components and systems for truck loading and discharge
drum international ltd england 1000
emco wheaton corp canada 1000
emco wheaton gmbh germany 1000
emco wheaton uk ltd england 1000
perolo sa france 1000
sam system as denmark 1000
syltone industries llc usa 1000
syltone marine inc usa 1000
webster drives ltd england 1000
sale and installation of systems for truck loading and discharge
syltone australia pty ltd australia 1000
syltone belgium nv belgium 1000
syltone deutschland gmbh germany 1000
syltone do brasil ltda brazil 1000
syltone france sa france 1000
syltone industria iberica sa spain 1000
syltone italia srl italy 1000
syltone malaysia sdn bhd malaysia 0300
syltone nederland bv netherlands 1000
syltone polska spz oo poland 1000
syltone uk ltd england 1000
although syltone is not able to fully own syltone malaysia sdn bhd under malaysian law it controls the
management of the company and its results have therefore been wholly consolidated in accordance with the
requirements of financial reporting standard no 2
a full list of the group companies will be included in the company’s annual return
 denotes company held by parent company itself
group structure 16 annual report 2003
directors’ report
the directors have pleasure in submitting their report and the audited accounts for the year ended 31st march
2003
results and dividends
the directors recommend a final dividend of 510p 2002 510p per share which together with the interim
dividend of 225p 2002 225p per share already declared makes a total of 735p 2002 735p per share
subject to approval at the annual general meeting the final dividend will be paid on 3rd october 2003 to
shareholders appearing on the register of members at the close of business on 5th september 2003
the interim and final dividends for 2003 have been waived by the holders of 541591 shares
principal activities of the group
syltone is a holding company whose subsidiaries concentrate on the design manufacture sales and service of
specialist equipment for the international transportation and fluid transfer industries
operating and financial review and developments
a review of the development of the business of the group for the year together with views as to likely future
developments is contained in the chairman’s statement on pages 2 and 3 the chief executive’s statement on
pages 4 to 8 and the financial review on pages 9 to 12
post balance sheet events
the post balance sheet events are contained in the chairman’ s statement and chief executive’ s statement
land and buildings
in the opinion of the directors the aggregate market value of the group’s land and buildings is not significantly
different from the book value
directors
the directors who held office during the year are listed on page 13 
in accordance with the company’ s articles of association dr d l speirs and mr r t empleton retire by rotation
and being eligible offer themselves for reelection
directors’ interests
details of the interests of directors in the share capital of the company are given in the remuneration report on
pages 18 to 21
share capital
there have been no changes in the authorised share capital note 20 on page 42 gives details of the authorised
and issued share capital in tabular form
resolutions authorising the directors to allot share capital will be proposed at the forthcoming annual general
meeting details of these are set out in the notes to the notice of the annual general meeting
substantial shareholdings
at 8th june 2003 certain shareholders other than the directors had notified an interest in the ordinary issued
share capital of the company under section 198 companies act 1985 as follows
shares  held
mr j a clegg 3150102 1235
eaglet investment trust plc 2778416 1089
rights and issues investment trust plc 1650000 647
j p morgan asset management 1373543 538
mrs s clegg and others 1351755 530
acorn income fund limited 1262480 495
mrs s clegg 1060616 416
3i group 1001000 392
charles stanley  co 881928 319 17 annual report 2003
directors’ report
creditor payments
typically the terms of payment by group operating companies including syltone plc to their principal suppliers
are negotiated as part of the continuing trading relationships with those suppliers once negotiated it is group
policy to follow those agreements in the absence of specific agreement the uk operating companies’ standard
policy is to settle undisputed amounts due on 60 day terms overseas operating companies’ policies generally
mirror this pattern although in certain countries where business traditions embody longer payment periods
the group’s companies follow those traditions
at 31st march 2003 the number of days’ purchases outstanding for the group was 62 2002 61 and for
syltone plc was 50 2002 50
research and development
research and development continues to be directed towards the development of new and existing products
amounts expended are shown in note 6 and capitalised in note 11 to the accounts
charitable and political donations
during the year the group made charitable donations of £219 2002 £1049 the group did not make any
political donations 2002 £nil
employee involvement
it has always been the company’s aim to promote good relations with all employees and to keep them informed
of the progress of the business and of matters directly affecting them consultative meetings are held with the
management of each site allowing information to be passed to employees communication with employees
individually on specific issues is achieved through the periodic circulation of notices to individual employees in
addition employees are encouraged to become involved in their company’s performance by participating in
profit related incentive bonus and share schemes
the group gives full and fair consideration to applications for employment made by disabled persons the
disabled persons employed have all received the necessary job training and will undergo further training when
necessary to enable them to meet the needs of new technology they are eligible to apply for promotion and
within the limits of their disabilities are given equal consideration with other applicants
special attention would be given to the needs of any employee who became temporarily or permanently
disabled whilst in employment
corporate governance and going concern
a report on the directors’ review of corporate governance compliance the going concern basis of accounting
and their statement concerning the financial aspects of corporate governance is set out on pages 22 to 23
auditors
pursuant to section 384 companies act 1985 a resolution for the reappointment of kpmg audit plc as
auditors to the company will be proposed at the forthcoming annual general meeting
on behalf of the board
andrew hartley
company secretary 24th june 2003 18 annual report 2003
remuneration report
the remuneration committee is responsible for recommending the companys framework of
executive remuneration packages determining the remuneration and benefits of all executive
directors and for all executive share option and long term share incentive plan grants  mr j c
barnsley dr d l speirs and mr r templeton are the members of the committee
as stated in the statement on corporate governance dr d l speirs is not considered to be independent
whilst neither the company chairman nor the chief executive are members of the committee they both may
attend meetings by invitation but are not allowed to be present when their personal remuneration is
discussed
the remuneration policy is set by the board and is described below  individual remuneration packages are
determined by the remuneration committee within the framework of the policy
the remuneration committee has access to independent advice where it considers it appropriate   in the
past year it has taken professional advice from remuneration consultants at addleshaw goddard which also
acts as the companys legal advisers the committee is also provided with data from national and where
appropriate international surveys on executive pay bonuses and longterm incentives
remuneration policy
the companys policy is that total remuneration packages should be competitive and at a sufficient level to attract
retain and motivate management of the highest calibre  in forming this policy the committee has given full
consideration to the provisions of the combined code which it has followed closely
remuneration packages for executives comprise
a basic salary and benefits
basic salary is determined after taking account of a directors responsibilities and seniority and of the market
salary levels for similar jobs in comparable companies based on independent surveys  basic salaries are
reviewed annually with effect from 1st april taking account of both group and individual performance
benefits in kind provided to executive directors and senior managers comprise company car benefits or an
equivalent cash allowance and private medical insurance for the employee and their immediate family
b annual bonus
the annual bonus is performance related and payments are determined in accordance with the rules of the
bonus scheme which is open to all head office employees  the scheme provides for the calculation of a profit
share based on the growth in profit before taxation  executives can be awarded an annual bonus of up to
50 of base salary there is a threshold performance level below which no bonus is paid
bonuses and incentives are designed to align the interests of the executives and shareholders and to reward
only when justified by performance
c longer term incentives
longer term incentives include share options schemes and ltips and are performance related  details of
performance requirements for these schemes are outline below
performance conditions
i share options
the exercise of options under the 1994 executive scheme and approved share option plan and unapproved
option plan 2002 executive scheme are conditional upon the achievement of performance criteria
performance is measured by the growth in diluted earnings per share over any three year period commencing
no earlier than 1st april preceding the date of grant ‘ ‘deps growth’ ’ compared to the growth in the retail
price index ‘ ‘the rpi growth’ ’ over the same period
the rules of the scheme allow for the following possibilities for an option granted under the schemes to be
exercisable
if deps growth is then of the shares covered by the option
equal to rpi growth plus 2 pa but less than onethird can be exercised and the other
rpi growth plus 4 pa twothirds lapse
equal to rpi growth plus 4 pa but less than twothirds can be exercised and the other
rpi growth plus 6 pa onethird lapse
equal to or more than rpi growth plus 6 pa all can be exercised
i long term share incentive plan ltip
the key performance criteria for the ltip are an overall requirement that there has been an improvement in the
underlying financial performance of the company and significant real growth in the return to shareholders
relative to other industrial companies over the three year period the growth in return to shareholders will be
measured by reference to the change in total shareholder return tsr of the company relative to the change in
the financial times tsr index of industrial companies over the same period 19 annual report 2003
remuneration report
if the percentage growth in the companys tsr over the period is less than or equal to that of other industrial
companies no matching shares will be awarded  if the percentage growth in the companys tsr over the
period exceeds that of industrial companies by 100 or more the maximum of five times the relevant
contributory shares will be awarded
at intermediate levels of performance a pro rata number of matching shares will be awarded on the straight
line basis
these performance conditions were considered appropriate and were chosen because they directly align the
interests of senior executives with those of shareholders and are entirely objective in assessing whether the
performance conditions have been met 
service contracts
the company has service contracts with its executive directors  it is company policy that such contracts
should contain notice periods of not more than 12 months  provisions for compensation for loss of office are
not included in the contracts  the companys policy on compensation for loss of office is that such
compensation would be subject to the maximum terms of the contract which is 12 months
mr p j andrews mr a hartley and mr t j murch have service contracts which are terminable on 12 months
notice from the company or the director
total shareholder return
the following graph charts the total cumulative shareholder return of the company since 30th june 1998
the total cumulative shareholder return has been compared to the total cumulative return on the financial
times tsr index of industrial companies as it was considered to represent the benchmark performance
against which syltone plc would be seeking to compare itself  the index is also the performance comparitor
in the ltip as outlined above 20 annual report 2003
the auditors are required to report on the information contained in this section of the report
remuneration of directors
the remuneration of directors who have served during the year is set out below
performance compensation
salary related for loss 2003 2002
and fees bonus of office benefits total total
££££ £ £
p j andrews 105000 105000 100000
t j murch 114330 32590 7019 153939 —
a hartley 97022 29361 10993 137376 98642
d l speirs 62500 9079 71579 102903
r templeton 21166 21166 15000
j c barnsley 20415 20415
420433 71030 18012 509475 316545
benefits comprise car and health care
pensions
mr t j murch is a member of the defined contribution scheme which he joined on 24 december 2002  the
company contributes a total of 15 of gross salary per annum to the scheme on his behalf  contributions of
£5600 were made during the year  the company also provides a lump sum death in service benefit of four
times salary
mr a hartley is a member of the syltone defined benefit scheme  pension rights for mr a hartley a full time
executive director during the year include a pension of up to two thirds of final pensionable earnings at age 63
plus dependents pension and a lump sum payment equivalent to four times pensionable earnings in the event
of death in service  under the rules of the pension scheme from 30th june 2002 performance related bonuses
will not be pensionable
the total pension accruing to mr a hartley at 31st march 2003 is given below
increase increase transfer transfer transfer
in accrued in accrued value of value of value of increase in
accrued benefits benefits a less accrued accrued transfer value
benefit at excluding including directors’ benefits at benefits at less directors’
31st march inflation a inflation contributions 31st march 31st march contributions
2003 2002 2003
£’000 £’000 £’000 £’000 £’000 £’000 £’000
a hartley age 47 15 1 123 2 93 118 20
the increase in transfer value represents a liability to the pension scheme not a sum paid to mr hartley
the total accrued pension is the amount that would be paid annually on retirement based on service to 31st
march 2003
under the rules of the scheme each director has a normal retirement age of 63 years but may retire on or after
the age of 60 years with the boards permission with no reduction to accrued pension  on leaving service the
majority of the accrued pension is revalued to age 63 years at 5 per annum or the annual increase in the
retail price index if less
pensions in payment increase at the rate of 5 per annum  the increase is applied to the pension before
being reduced for cash commutation  on death before retirement after leaving service the spouses pension
is 50 of the members pension and for dependent children 25 of the members pension  such pensions
are revalued at the lower of 5 per annum or the annual increase in the retail price index up to the date of
death  in addition a return of the members contributions is payable  on death in the first five years of
retirement the value of the balance of the first five years pension payments is also payable  no allowance is
made for any discretionary benefits in the calculation of transfer values
directors’ interests
the directors interests in the ordinary share capital of the company at 31st march 2003 and at the beginning
of the financial year or later date of appointment were
31st march 2003 31st march 2002
or later date of appointment
beneficially as beneficially as
owned trustee options owned trustee options
p j andrews 17928 462427 12928 462427
t j murch 10000 291667
a hartley 32690 170000 32690 25000
j c barnsley 164820
d l speirs 20254 12254
r templeton 10428 6000
these holdings include shares held under the long t erm share incentive plan details of which are given below
there have been no changes in directors interests between the balance sheet and date of approval of the
accounts
remuneration report share options
the executive directors have been granted options under the 1994 executive share option scheme 
options have also been granted under an approved share option plan and an unapproved share option plan
which were adopted on 5th september 2002 to replace the 1994 executive share option plan
the performance criteria of these options are detailed above in the remuneration policy
directors’ share options
number of
balance at options balance at exercise cost of date
1st april granted in 31st march option options first expiry
2002 year 2003 price £k exercisable date
p j andrews
executive 1994 462427 462427 8650p 400 010403 310310
t j murch
executive 1994 291667 291667 9600p 280 100705 090712
a hartley
executive 1994 25000 25000 16700p 42 180199 170106
executive 2002 145000 145000 9450p 137 270905 260912
options held by mr p j andrews were granted under an option agreement dated 8th september 1999  an
extraordinary general meeting held on 7th july 2000 varied the option price on mr p j andrews options to
865p and increased the number of shares under the option to 462427 shares  the conditions for exercise of
the options are referred to earlier in the remuneration policy
during the year no directors made any gains on the exercise of options 2002none
at 31st march 2003 the companys shares were quoted on the london stock exchange at 96p per share and
during the year had been quoted in the range of 735p to 1245p per share
ltip
a long term incentive share plan ltip was introduced in 1998 following approval by shareholders whereby
directors and senior executives are able to invest a proportion of the posttax annual cash bonus awarded to
them in respect of the previous financial year or other of their financial assets if they so wish in shares
contributory shares of the company up to a maximum amount in any one year of the greater of the annual
bonus net of tax or 20 of salary 
the trustees of the ltip hold 21886 contributory shares for the benefit of mr a hartley
shares are normally held in trust for three years after which they will be registered in the name of the beneficiary
at that time dependent on the performance of the company compared to the performance criteria set out in
the rules of the plan the beneficiary will receive additional free shares matching shares up to a maximum of
five times the number of contributory shares
details of the performance criteria of these options are given above in the remuneration policy
the performance conditions described in this report were subject to review during the year and are considered
to be appropriate
the ltip was originally adopted by shareholders in 1998 for a period of five years this period expires in
september 2003 the committee has reviewed the requirements of the remuneration package to reward
executives over the medium to longterm and it is of the opinion that the ltip has provided a useful element in
your companys senior executive remuneration strategy it therefore wishes to renew shareholder approval to
the ltip for a period of a further ten years a resolution to renew the ltip for this period and to make minor
amendments to its rules to bring it into line with changes in legislation and good practice is to be put at the
annual general meeting further details are to found in the separate letter from your chairman
no matching shares have been awarded in respect of contributory shares purchased in 1998 and 1999 an
award of five times the number of contributory shares is expected to be made to participants who purchased
contributory shares in 2000 as we are pleased to report the tsr of your company was more than twice as
great as that of the financial times tsr index of industrial companies over the three years to march 2003
the remuneration report has been prepared by the board and is signed on its behalf by
richard templeton
chairman of remuneration committee 24th june 2003
21
remuneration report
annual report 2003 22 annual report 2003
board structure
the company’s board is made up of a balance of executive and nonexecutive directors it currently comprises
a parttime executive chairman two other executive directors and three nonexecutive directors who have the
responsibility for ensuring that the affairs of the company and its subsidiaries are managed competently and
with integrity the chairman is mr p j andrews the chief executive is mr t j murch and the senior non
executive director is mr r templeton
the nonexecutive directors provide a diversity of business perspective and objectivity that complements the
expertise of the executive directors all the nonexecutive directors with the exception of dr d l speirs are
regarded as independent of management and free from business or other relationships that could interfere with
the exercise of their independent judgement dr d l speirs is not regarded as independent as he undertook a
temporary executive role as chief executive following the retirement of mr m clewes on 19th july 2001 until the
appointment of mr t j murch on 24th june 2002 all the nonexecutive directors play a full part as members of
the board and share responsibility for board decisions
the composition of the board is kept under review with the aim of ensuring that the board collectively
possesses the necessary skill and experience for the proper direction of the group’s business activities new
directors are appointed at general meeting or submit themselves for election by shareholders at the first
opportunity and at threeyearly intervals thereafter
the board meets at least eight times a year and directors are supplied with all relevant information to assist them
in the discharge of their duties the board focuses on considering longerterm strategic issues as well as
reviewing and monitoring the management and financial performance of the company
the board has established three committees with specified terms of reference which assist the full board in the
exercise of its responsibilities these are 
nomination committee this committee recommends new appointments to the board and reviews re
appointments when they become due it has formal terms of reference and its current membership comprises
mr j c barnsley mr p j andrews dr d l speirs and mr r templeton
remuneration committee the remuneration committee determines the remuneration and contractual
arrangements of individual executive directors of syltone plc and their direct reports the aim of the committee
is to ensure that executive directors receive a competitive remuneration package that both attracts and retains
management of a high quality and provides motivation for those executives to perform in the best interests of
the company its shareholders employees and customers
the members of the committee are mr r templeton chairman dr d l speirs and mr j c barnsley
the board’s report on remuneration appears on pages 18 to 21
audit committee the audit committee comprises mr j c barnsley chairman dr d l speirs and mr r
t empleton its duties cover the areas of internal control liaison with external auditors and formulating and
implementing policy on granting of nonaudit services meetings of the committee are normally attended by the
external auditors the finance director and chief executive also attend when requested to do so
the committee is responsible for reviewing the effectiveness of the group’s systems of internal control and the
monitoring of compliance with regulatory requirements the committee approves the internal audit plan which
is based on risk assessment and reviews all internal audit reports
on behalf of the board the committee reviews the annual report and accounts and the interim report in
undertaking this work the committee considers the accounting policies of the group major areas of judgement
and estimates and compliance with accounting principles and regulatory requirements
relations with shareholders
the company seeks to maintain good communications with shareholders and welcomes communication with its
institutional shareholders through meetings and results briefings the company also appreciates that the annual
general meeting and the annual report sent to the shareholders before the meeting provide an opportunity to
communicate with private investors the chairman of the audit committee and of the remuneration committee
will be available at the annual general meeting to answer any questions from the shareholders
information about the company is available on the company’s website and all announcements made to the
london stock exchange are now posted to it the website address is wwwsyltonecouk
internal control
the board is ultimately responsible for the group’s system of internal control and for reviewing its
effectiveness however such a system is designed to manage rather than eliminate the risk of failure to
achieve business objectives and can provide only reasonable and not absolute assurance against material
misstatement or loss
following publication of guidance for directors on internal control internal control guidance for directors on
the combined code the turnbull guidance the board confirm that there is a continuing process for
identifying evaluating and managing the significant risks faced by the group that has been in place for the
year under review and up to the date of approval of the annual report and accounts and that this process is
regularly reviewed by the board and accords with the guidance
the board have reviewed the effectiveness of the system of internal control in particular it has reviewed and
updated the process for identifying and evaluating the significant risks affecting the business and the policies
and procedures by which these risks are managed
statement on corporate governance 23 annual report 2003
the key elements of the group’s system of internal controls are as follows
control environment the group is committed to the highest standards of business conduct and seeks to
maintain these standards across all of its operations throughout the world the group has adopted a written
code of business ethics and practices including supporting group policies and procedures which provides
practical guidance for all staff 
the board is supported by two divisional executive committees which consist of fulltime senior managers of
syltone who each have a functional responsibilitythe executive committees operate a system of review of
divisional regional and individual subsidiaries’ performance against budget and report appropriately to the
board
the group has an appropriate organisational structure for planning executing controlling and monitoring
business operations in order to achieve group objectives 
risk identification a risk committee exists with the remit to ensure that key risks applicable to the business
are identified by group management and that such risks are properly evaluated the board considers significant
risk areas including those arising from the development of new activities or changes in external risk factors
the key risks affecting the business have been identified the risk committee is responsible for the regular
reassessment of these risks and reports directly to the audit committee
the risks considered are associated with both internal and external sources including control breakdown
disruption in information systems competition natural catastrophe and regulatory requirements
information and communication group divisions and regions prepare fiveyear strategic plans which are
revised annually and include consideration of long term financial projections and the evaluation of strengths
weaknesses opportunities and threats in relation to the business annual budgets are also prepared and
performance against plans and budgets is actively monitored results against budgets are consolidated and
presented to the board at routine board meetings the board reports to shareholders half yearly the interim
results and announces other major events as they occur
through these mechanisms group performance is continually monitored risks identified in a timely manner
their financial implications assessed control procedures reevaluated and corrective actions agreed and
implemented
control procedures the group and its operating units have implemented control procedures designed to
ensure complete and accurate accounting for financial transactions and to limit the potential exposure to loss of
assets or fraud measures taken include physical controls segregation of duties and reviews by management
there is a programme of internal audits carried out by the group internal audit personnel with the objective of
auditing each trading subsidiary at least once every eighteen months in addition reviews are carried out by
external auditors covering financial matters iso 9000 certification health and safety and various insured risks to
the extent necessary to arrive at their audit opinion
monitoring and corrective action there are clear and consistent procedures in place for monitoring the
system of internal controls the audit committee which meets at least twice a year receives reports from the
internal audit function the risk committee and management within its remit the audit committee reviews the
effectiveness of the group’s system of internal controls any corrective action which may be necessary is agreed
and implemented
compliance statement
the board of directors has complied throughout the year with the combined code provisions apart from the
matters noted below
a s22 of the combined code requires the remuneration committee to consist exclusively of independent
nonexecutive directors following the retirement of mr m clewes as director and chief executive of the
company on 19th july 2001 he was replaced on a temporary basis as chief executive by dr d l speirs
despite his executive role dr d l speirs continued as a member of the audit committee dr d l speirs also
continued to be a member of the remuneration committee but played no role in deciding his own
remuneration for the period in which he was chief executive mr t j murch was appointed as the new chief
executive on 24th june 2002 following which dr d l speirs reverted to being a nonexecutive director
b the board has reviewed its policy of not providing fixed term contracts for nonexecutive directors and
considers that this is still appropriate for the company under its present circumstances the appointment of
nonexecutive directors is supervised by the nomination committee
c all directors have independent access to the company’s professional advisers at the company’s expense
but this is not the subject of a written practice statement
the board is responsible for the group’s system of internal controls and for reviewing the effectiveness of that
control and has done so for the year ended 31st march 2003
going concern
the directors confirm that they are satisfied that the group has 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
statement on corporate governance 24 annual report 2003
we have audited the accounts on pages 25 to 49 we have also audited the information in the directors
remuneration report that is described as having been audited
this report is made solely to the companys members as a body in accordance with section 235 of the companies
act 1985  our audit work has been undertaken so that we might state to the companys members those matters
we are required to state to them in an auditors report and for no other purpose  to the fullest extent permitted by
law we do not accept or assume responsibility to anyone other than the company and the companys members as
a body for our audit work for this report or for the opinions we have formed
respective responsibilities of directors and auditors
the directors are responsible for preparing the directors report and as described above the accounts in
accordance with applicable united kingdom law and accounting standards  our responsibilities as independent
auditors are established in the united kingdom by statute the auditing practices board and by our professions
ethical guidance
we report to you our opinion as to whether the accounts give a true and fair view and are 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 accounts if the company has not kept proper accounting records if we have not received all the
information and explanations we require for our audit or if information specified by law regarding directors
remuneration and transactions with the company is not disclosed
we review whether the statement on page 22 and 23 reflects the companys compliance with the seven provisions
of the combined code specified for our review by the listing rules and we report if it does not  we are not required
to consider whether the boards statements on internal control cover all risks and controls or form an opinion on the
effectiveness of the groups corporate governance procedures or its risk and control procedures
we read the other information contained in the annual report including the corporate governance statement and
the unaudited part of the directors remuneration report and consider whether it is consistent with the audited
accounts  we consider the implications for our report if we become aware of any apparent misstatements or
material inconsistencies with the accounts
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 accounts  it also
includes an assessment of the significant estimates and judgements made by the directors in the preparation of the
accounts 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 accounts 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 accounts
opinion
in our opinion
• the accounts give a true and fair view of the state of affairs of the company and the group as at 31 march 2003
and of the profit of the group for the year then ended and
• the accounts and the part of the directors remuneration report to be audited have been properly prepared in
accordance with the companies act 1985
kpmg audit plc
chartered accountants 24th june 2003
registered auditor
the directors are required by company law to prepare accounts that give a true and fair view of the state of
affairs of the company and the group and of the profit or loss for the period in preparing these accounts the
directors are required to
a select and consistently apply appropriate accounting policies
b make reasonable and prudent estimates and judgements
c state whether applicable accounting standards have been followed subject to any material departures
disclosed and explained in the accounts
d prepare the accounts on a going concern basis unless it is inappropriate to presume that the group will
continue in business
the directors are responsible for keeping proper accounting records which disclose with reasonable accuracy
at any time the financial position of the company and to enable them to ensure that the accounts comply with
the companies act 1985 they have general responsibility for taking such steps as are reasonably open to
them to safeguard the assets of the group and to prevent and detect fraud and other irregularities
statement of directors’ responsibilities in relation to the accounts
report of the independent auditors to the members of syltone plc 25
for the year ended 31st march 2003
2003 2002
note £’000 £’000 £’000
turnover 2 78798 75464
operating costs 3 72982 70777
operating profit before exceptional items 6 5816 5327
reorganisation costs — 640
profit on ordinary activities before interest
and taxation 5816 4687
net interest payable and other similar charges 7 1013 1179
profit on ordinary activities before taxation 4803 3508
taxation 8 1781 1494
profit on ordinary activities after taxation 3022 2014
minority interests – equity — 19
profit attributable to ordinary shareholders 3022 1995
ordinary dividends 9 1835 1835
retained profit for the year 23 1187 160
earnings per share 10 1210p 799p
diluted earnings per share 10 1206p 796p
dividends per share 9 735p 735p
the accounts are prepared on an unmodified historic cost basis
the notes referred to form part of these accounts and appear on pages 30 to 49
consolidated profit and loss account
annual report 2003 26
as at 31st march 2003
consolidated balance sheet
2003 2002
note £’000 £’000
fixed assets
intangible assets 11 2587 2753
tangible assets 12 17259 18080
investments 13 604 606
20450 21439
current assets
stocks 14 11509 12851
debtors 15 19281 18698
cash at bank and in hand 4434 2487
35224 34036
creditors
amounts falling due within one year
borrowings 16 2409 3027
other creditors 18 17921 16975
20330 20002
net current assets 14894 14034
total assets less current liabilities 35344 35473
creditors
amounts falling due after more than one year
borrowings 16 12990 13916
other creditors 18 321 541
13311 14457
provisions for liabilities and charges 19 1522 1015
deferred income capital expenditure grants 1 16
net assets 20510 19985
capital and reserves
called up equity share capital 20 6378 6378
share premium account 21 9275 9275
merger reserve 22 1197 1197
profit and loss account 23 3374 2817
shareholders’ funds – equity 20224 19667
minority interests – equity 286 318
20510 19985
the notes referred to form part of these accounts and appear on pages 30 to 49
these accounts were approved by the board of directors on 24th june 2003 and signed on its behalf by
p j andrews
a hartley
directors

annual report 2003 27 annual report 2003
for the year ended 31st march 2003
consolidated cash flow statement
2003 2002
note £’000 £’000 £’000 £’000
cash inflow from operating activities 24 9475 6217
returns on investments and servicing of
finance
bank interest paid 1069 1564
bank interest received 193 406
finance lease interest paid 27 25
903 1183
taxation
united kingdom corporation tax paid 391 478
overseas taxes paid 791 1100
1182 1578
capital expenditure and financial investments
purchase of tangible assets 1271 2329
purchase of intangible assets 117 336
sale of fixed asset investment 2 —
sale of tangible assets 205 207
1181 2458
acquisitions and disposals
sale of subsidiary undertakings 24 115 2886
acquisition of minority holdings in subsidiaries — 7
115 2879
equity dividends paid
dividends paid to shareholders 1835 1835
cash inflow before financing 4489 2042
financing
repayments of medium and long term loans 1405 1583
finance lease capital repayments 228 222
1633 1805
increase in cash in the year 2856 237
additional cash flow information is given in note 24
the notes referred to form part of these accounts and appear on pages 30 to 49 28 annual report 2003
2003 2002
£’000 £’000
profit attributable to ordinary shareholders 3022 1995
currency translation differences on foreign currency net investments 630 84
total recognised gains and losses relating to the year 2392 2079
for the year ended 31st march 2003
2003 2002
£’000 £’000
profit attributable to ordinary shareholders 3022 1995
dividends 1835 1835
retained profit for the year 1187 160
other recognised gains and losses as shown above 630 84
net addition to shareholders’ funds 557 244
opening shareholders’ funds 19667 19423
closing shareholders’ funds 20224 19667
for the year ended 31st march 2003
consolidated statement of total recognised gains and losses
reconciliation of movements in consolidated shareholders’ funds 29
as at 31st march 2003
2003 2002
note £’000 £’000
fixed assets
tangible assets 12 1808 1845
investments 13 9895 9897
11703 11742
current assets
debtors 15 28435 28835
cash at bank and in hand 3314 4203
31749 33038
creditors
amounts falling due within one year
borrowings 16 5195 6370
other creditors 18 2651 1409
7846 7779
net current assets 23903 25259
total assets less current liabilities 35606 37001
creditors
amounts falling due after more than one year
borrowings 16 12572 13473
other creditors 18 — 270
12572 13743
provisions for liabilities and charges 19 569 373
deferred income capital expenditure grants — 11
net assets 22465 22874
capital and reserves
called up equity share capital 20 6378 6378
share premium account 21 9275 9275
merger reserve 22 1197 1197
profit and loss account 23 5615 6024
shareholders’ funds – equity 22465 22874
the notes referred to form part of these accounts and appear on pages 30 to 49
these accounts were approved by the board of directors on 24th june 2003 and signed on its
behalf by
p j andrews
a hartley
directors

company balance sheet
annual report 2003 notes to the accounts
30 annual report 2003
1 accounting policies
basis of accounts
the accounts are prepared under the historical cost convention in accordance with applicable accounting
standards the following principal accounting policies have been applied consistently in dealing with items
which are considered material in relation to the group’s accounts the group has adopted frs 18 ‘accounting
policies’ in these accounts
basis of consolidation
the consolidated profit and loss account includes the results of undertakings acquired or disposed of during the
year from the date of their acquisition or up to the date of their disposal the consolidated balance sheet
includes the assets and liabilities of the company and its subsidiaries at the end of the financial year
in accordance with the requirements of financial reporting standard no 2 accounting for subsidiary
undertakings the accounts of companies which due to local restrictions cannot be owned by syltone but are
nevertheless subject entirely to syltone’s control are consolidated as if those companies are legally owned by
syltone
under section 2304 of the companies act 1985 the company is exempt from the requirement to present its
own profit and loss account
foreign currency
transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction or if
hedged forward at the rate of exchange under the related forward currency contract
assets liabilities and trading results of overseas operations are translated into sterling at the rates of exchange
ruling at the balance sheet date differences arising on the translation of the group’s net investment in overseas
operations are dealt with as movements in reserves net of differences on related currency borrowings all other
differences are taken to the profit and loss account
financial instruments
the group uses derivative financial instruments to manage its exposures to fluctuations in interest and foreign
currency exchange rates receipts and payments on interest rate instruments are recognised on an accruals
basis over the life of the instrument gains and losses on transactional foreign currency hedges are recognised
in the profit and loss account on the maturity of the underlying transaction gains and losses on translational
hedges of foreign currency denominated net investments are taken to reserves gains and losses on hedging
instruments that are cancelled due to the termination of the underlying exposure are recognised in the profit and
loss account at the time of termination
goodwill and intangible fixed assets
purchased goodwill representing the excess of the fair value of the consideration given and associated costs
over the fair value of the separable net assets acquired arising on consolidation in respect of acquisitions before
1st april 1998 when financial reporting standard no 10 was adopted was written off to reserves in the year
of acquisition when a subsequent disposal occurs any related goodwill previously written off or credited to
reserves is written back through the profit and loss account as part of the profit or loss on disposal
purchased goodwill arising on consolidation in respect of acquisitions since 1st april 1998 is capitalised in the
year of acquisition and amortised on a systematic basis over its estimated useful economic life up to a maximum
of 20 years the carrying value of goodwill is reviewed as necessary for impairment and written down if
impairment is identified
on the subsequent disposal of a business acquired since 1st april 1998 the profit or loss on disposal is
calculated after charging the unamortised amount of any related goodwill
intellectual property rights and patents are valued at cost on acquisition and are amortised in equal annual
amounts over their estimated useful economic lives
the accounting policy for research and development is set out on the opposite page 31
notes to the accounts
annual report 2003
1 accounting policies continued
depreciation
except for freehold land depreciation is provided on a straight line basis at rates which are calculated to write off
the cost of each asset over its useful life in equal annual instalments
the useful lives of assets are
freehold and long leasehold buildings up to 50 years
short leasehold buildings over the residue of the lease
plant and equipment 4 to 10 years
computers 3 to 7 years
motor vehicles 4 years
leased assets
rentals payable under operating leases are charged to the profit and loss account as incurred assets obtained
under finance leases are included in fixed assets and the related obligations to pay future rentals are included in
creditors interest on finance leases is charged to the profit and loss account over the period of the lease
stocks
stocks are valued at the lower of cost and net realisable value cost includes an appropriate allocation of
production overheads
long term contracts
the amount of profit attributable to the stage of completion of a long term contract is recognised when the
outcome of the contract can be foreseen with reasonable certainty turnover for such contracts is stated at the
cost appropriate to their stage of completion plus attributable profits less amounts recognised in previous
years provision is made for any losses as soon as they are foreseen
contract work in progress is stated at costs incurred less those transferred to the profit and loss account after
deducting foreseeable losses and payments on account not matched with turnover
amounts recoverable on contracts are included in debtors and represent turnover recognised in excess of
payments on account
development grants
grants relating to fixed assets are treated as deferred credits and are transferred to revenue in equal amounts
over the useful life of the asset grants relating to revenue costs are credited to the profit and loss account in the
period in which costs are incurred
research and development
development costs are capitalised when a clear commercially viable future for that development is confirmed
and are amortised over the first three years following their commercial launch
all other expenditure on research and development is written off as incurred
turnover
turnover represents the amounts excluding value added tax derived from the provision of goods and services
to customers turnover is recognised at the point of despatch of goods the only exception is emco wheaton
gmbh where on certain major contracts turnover is recognised at the point of signing off completion
certificates this company also has long term contracts which follow the accounting policy outlined above
revenue from service contracts is recognised on an accruals basis
rental income
rental income receivable is recognised on an accruals basis
deferred taxation
the charge for taxation is based on the profit for the year and takes into account taxation deferred because of
timing differences between the treatment of certain items for taxation and accounting purposes in accordance
with financial reporting standard no19 deferred tax is provided without discounting in full full recognition is
made of the deferred tax arising on any pension cost provision and asset made in accordance with statement of
standard accounting practice no 24 1 accounting policies continued
pension costs
the expected cost of pensions in respect of the group’s defined benefit pension schemes is charged to the
profit and loss account so as to spread the cost of pensions over the service lives of employees variations from
the regular cost are spread over the expected service lives of current employees in the schemes differences
between the amounts charged in the profit and loss account and payments made to the schemes are carried
forward as assets or liabilities in the balance sheet pension costs are assessed in accordance with the advice of
independent and qualified actuaries
regarding the group’s uk defined contribution pension scheme the amount charged to the profit and loss
account represents the contributions payable to the scheme in respect of the accounting period the assets of
the scheme are held separately from those of the group in an independently administered fund
2 turnover and trading profit
turnover arises wholly from the principal activities of the group and is analysed by geographical destination as
2003 2002
£’000 £’000
united kingdom 21556 24207
france 10777 8305
germany 6773 5756
other european countries 13362 10753
north america 15340 14952
other 10990 11491
78798 75464
the profit of the group arises wholly from the principal activities of the constituent companies
in the opinion of the directors disclosure in further detail of the analysis of turnover profit and net assets would
be seriously prejudicial to the interests of the group
3 operating costs
2003 2002
note £’000 £’000
raw materials and consumables 31829 32242
change in stocks of finished
goods and work in progress 1476 9
other external charges 10923 10965
staff costs 4  5 26201 24946
depreciation and other amounts written off
tangible and intangible fixed assets 11  12 2605 2710
trading costs 73034 70854
other operating income 52 77
operating costs 6 72982 70777
4 directors’ remuneration
full details of the emoluments of the directors including those of the chairman and highest paid director are
given in the remuneration report on pages 18 to 21
notes to the accounts
32 annual report 2003 33
notes to the accounts
annual report 2003
5 staff costs 2003 2002
£’000 £’000
aggregate employment costs
wages and salaries 21630 20594
social security costs 3206 2927
other pension costs see also note 26 1365 1425
26201 24946
average numbers employed geographically number number
united kingdom 377 392
france 102 124
germany 160 149
other european countries 72 78
north america 97 99
other 32 33
840 875
6 operating profit 2003 2002
£’000 £’000
operating profit is stated after chargingcrediting
research and development expenditure 1786 1565
payments under operating leases
plant and equipment 349 136
other leases 746 882
auditors’ and their associates’ remuneration – audit services 203 204
– further assurance services 35 86
– tax advisory services 109 95
property rentals receivable 52 66
asset disposal gains 55 66
reorganisation costs — 640
the reorganisation costs incurred in the comparative period relate to the exceptional costs incurred in
restructuring the group following the july 2000 strategic review and primarily comprise redundancy and early
retirement costs
7 net interest payable and other similar charges 2003 2002
£’000 £’000
on bank loans and overdrafts 1164 1567
on finance leases 27 25
1191 1592
interest receivable 178 413
1013 1179 notes to the accounts
34 annual report 2003
8 taxation on profit on ordinary activities 2003 2002
£’000 £’000
current tax
corporation tax on profits of the period
uk 403 509
overseas 737 587
adjustments in respect of previous periods
uk 33 37
overseas 29 99
unrelieved act — 105
double tax relief — 134
total current tax 1144 931
deferred tax
origination and reversal of timing differences
prior year 53 24
current year 584 587
total deferred tax 637 563
tax on profit on ordinary activities 1781 1494
factors affecting the current tax charge for the period 2003 2002
£’000 £’000
profit on ordinary activities before tax 4803 3508
profit on ordinary activities multiplied by
standard rate of corporation tax 30 1441 1052
effects of
expenses not deductible for tax purposes 47 95
losses not recognised 72 204
deferred tax movement 584 587
adjustment to tax charge in respect of previous periods 16 136
overseas tax rates in excess of uk 152 198
unrelieved act — 105
current tax charge for the period 1144 931
a narrative in respect of the effective rate of tax is included within the financial review on pages 9 to 12 35
notes to the accounts
annual report 2003
9 ordinary dividends 2003 2002
£’000 £’000
interim paid for 2003 – 225p per share 562 562
final proposed for 2003 – 510p per share 1273 1273
1835 1835
10 earnings per share
the calculation of earnings per share is based on the profit attributable to ordinary shareholders of £3022000
2002 £1995000 and on 24969464 2002 24969464 shares of 25p each being the weighted average
number of ordinary shares in issue during the year ended 31st march 2003 excluding those shares held in the
employee benefit trust upon which all dividend rights have been waived see note 28
the diluted earnings per share is based on the same profit attributable to ordinary shareholders and on
25065343 2002 25068140 shares of 25p each of the 1332250 2002 1056642 weighted average
number of options outstanding under the various option schemes 669138 2002 229783 are dilutive
resulting in 95879 2002 98676 shares of 25p each deemed issued for nil consideration
11 intangible fixed assets
goodwill on intellectual development
acquisition property rights patents costs total
group £’000 £’000 £’000 £’000 £’000
cost
at start of year 2554 338 44 336 3272
additions — — — 117 117
exchange adjustments — — 1 4 3
at end of year 2554 338 43 457 3392
amortisation
at start of year 330 138 3 48 519
charge for year 128 15 2 140 285
exchange adjustments — — — 1 1
at end of year 458 153 5 189 805
net book value
at 31st march 2003 2096 185 38 268 2587
at 31st march 2002 2224 200 41 288 2753 notes to the accounts
36 annual report 2003
12 tangible fixed assets short
long leasehold plant
freehold leasehold property equipment
property property alterations  vehicles total
group £’000 £’000 £’000 £’000 £’000
cost
at start of year 11285 339 1376 26964 39964
additions 44 50 6 1270 1370
disposals 5 — 4 1792 1801
exchange adjustments 399 — 3 398 800
at end of year 11723 389 1381 26840 40333
depreciation
at start of year 1867 120 235 19662 21884
charge for year 211 9 62 2038 2320
disposals — — 4 1635 1639
exchange adjustments 157 — 3 349 509
at end of year 2235 129 296 20414 23074
net book value
at 31st march 2003 9488 260 1085 6426 17259
at 31st march 2002 9418 219 1141 7302 18080
company
cost
at start of year 87 140 — 2115 2342
additions — 50 — 284 334
disposals — — — 110 110
at end of year 87 190 — 2289 2566
depreciation
at start of year — 69 — 428 497
charge for year — 5 — 329 334
disposals — — — 73 73
at end of year — 74 — 684 758
net book value
at 31st march 2003 87 116 — 1605 1808
at 31st march 2002 87 71 — 1687 1845 37
notes to the accounts
annual report 2003
12 tangible fixed assets continued
at 31st march 2003 and 2002 no group freehold property was rented to third parties
plant equipment and vehicles include assets which are the subject of finance leases and are analysed as
group company
2003 2002 2003 2002
£’000 £’000 £’000 £’000
cost 510 487 453 453
accumulated depreciation 33 26 29 5
net book value 477 461 424 448
depreciation in year 27 14 24 5
capital expenditure commitments at the year end were
group company
2003 2002 2003 2002
£’000 £’000 £’000 £’000
contracted for but not provided 242 24 — —
13 investments own shares
investments in held in
subsidiary employee other
undertakings benefit trust investments total
£’000 £’000 £’000 £’000
group
at start of year — 604 2 606
disposals — — 2 2
at end of year — 604 — 604
company
at start of year 9291 604 2 9897
disposals — — 2 2
at end of year 9291 604 — 9895
investments are stated at cost investments in subsidiary undertakings are shown after deduction of provisions
amounting to £68000 2002 £68000
details of shareholdings in subsidiary undertakings are shown on page 15
ordinary shares in syltone plc held in the employee benefit trust have been included in the group consolidated
balance sheet as investments as required by urgent issues task force no 13 see note 28 notes to the accounts
38 annual report 2003
14 stocks group company
2003 2002 2003 2002
£’000 £’000 £’000 £’000
raw materials and consumables 3205 3398 — —
work in progress 1415 1742 — —
finished goods for resale 6889 7711 — —
11509 12851 — —
15 debtors
amounts falling due within one year
trade debtors 15905 15871 69 88
other debtors 308 446 67 145
taxation recoverable 430 405 4 272
prepayments and accrued income 1260 1063 334 406
amounts owed by subsidiary undertakings — — 26399 26840
17903 17785 26873 27751
amounts falling due after one year
other debtors 35 56 34 49
deferred tax asset note 19 — 7 — —
pension prepayment note 19 1343 850 1528 1035
1378 913 1562 1084
19281 18698 28435 28835
16 borrowings
the maturity profiles of the group’s financial liabilities are detailed below
due on demand or within one year
bank overdrafts and loans – secured 2165 2796 4970 6145
finance leases – secured 244 231 225 225
2409 3027 5195 6370
due after one year
bank overdrafts and loans – secured 12957 13691 12572 13248
finance leases – secured 33 225 — 225
12990 13916 12572 13473
amounts due after one year are repayable
between one and two years 1710 1811 1593 1720
between two and five years 11163 11950 10979 11753
more than five years 117 155 — —
12990 13916 12572 13473 39
notes to the accounts
annual report 2003
16 borrowings continued group company
2003 2002 2003 2002
£’000 £’000 £’000 £’000
the principal bank loans included above are
currency amount note
us dollar 118556 i 75 126 — —
2919000 ii 1847 2050 1847 2050
2481830 iii 1570 2050 1564 2050
5519386 3492 4226 3411 4100
euro — 78 — —
340335 iv 235 229 — —
234060 v 162 169 — —
— 22 — —
4099125 vi 2830 2954 2830 2954
3432938 vi 2370 2474 2370 2474
4018750 vii 2774 2462 2774 2462
1615500 vii 1115 991 1115 991
2412000 vii 1665 1477 1665 1477
16152708 viii 11151 10856 10754 10358
total 14643 15082 14165 14458
note
i repayable in equal monthly instalments to 2005 interest is fixed at 200
ii repayable 310305 with a fixed interest rate of 318 plus margin
iii repayable in equal quarterly instalments to 310307 with a fixed interest rate of 348 plus margin
iv repayable in equal quarterly instalments to 2013 interest is fixed at 625 to 010106
v repayable in equal monthly instalments to february 2008 interest is fixed at 427
vi repayable in equal quarterly instalments to 310307
vii repayable 310305
viii included within the euro loan total is €7089000 amortising quarterly with a fixed interest rate at 4075 plus
margin to 310307 with the balance at euro libor
securities comprise a pledge over the company’s shareholding in syltone industries plc and fixed and floating
charges over certain of the group’s overseas assets together with certain intragroup guarantees
the undrawn committed borrowing facilities available to the group in respect of which all conditions precedent
had been met were
2003 2002
£’000 £’000
expiring in one year or less 7260 5965
expiring in more than one year but not more than five years 500 500
7760 6465 notes to the accounts
40 annual report 2003
17 interest rate risk profile
the following interest rate and currency profiles of the group’s financial liabilitiesassets are after taking into
account interest rate swaps entered into by the group
weighted
average
weighted period for
floating fixed average which the
total rate rate interest rate rate is fixed
£’000 £’000 £’000  years
2003
financial liabilities
sterling 225 — 225 412 100
us dollar 3492 6 3486 335 289
euro currencies 11547 6031 5516 417 378
japanese yen —————
other 135 135 — — —
15399 6172 9227 386 338
financial assets
sterling 3726 3726———
us dollar 1470 1470 — — —
euro currencies 1243 1243———
japanese yen 371 371 — — —
other 1306 1306———
4434 4434———
net financial liabilities 10965 1738 9227 386 338
2002
financial liabilities
sterling 2549 2999 450 412 200
us dollar 4730 2557 2173 519 082
euro currencies 14979 10538 4441 485 092
japanese yen 375 817 442 170 056
other 158 158 — — —
16943 9437 7506 472 094
financial assets
sterling 11 11———
us dollar 291 291———
euro currencies 1554 1554———
japanese yen 65 65———
other 566 566———
2487 2487———
net financial liabilities 14456 6950 7506 472 094
the floating rate financial liabilities include bank loans typically based on the relevant currency 3 month libor
and overdrafts typically based on the relevant currency central bank base rates a full table and narrative of the
group’s bank borrowing terms is given in note 16
the financial assets disclosure includes overdrafts which are part of a group cash offset facility 41
notes to the accounts
annual report 2003
17 interest rate risk profile continued
a narrative description of the group’s treasury risk management policy is given in the financial review on pages
9 to 12 and details of currency exposure and financial instruments in note 25
as permitted by financial reporting standard no 13 short term debtors and creditors have been excluded from
the disclosures other than the currency exposure given in note 25
18 other creditors group company
2003 2002 2003 2002
£’000 £’000 £’000 £’000
amounts falling due within one year
trade creditors 7974 8260 267 443
taxation 351 297 35 —
social security 646 556 236 233
accruals 3520 3083 648 566
other creditors 3582 3506 656 73
payments on account 575 — — —
proposed dividend 1273 1273 809 94
17921 16975 2651 1409
amounts falling due after one year
accruals 53 301 — 247
other creditors 268 240 — 23
321 541 — 270
19 provisions for liabilities and charges
group company
deferred deferred
pension tax total pension tax total
£’000 £’000 £’000 £’000 £’000 £’000
at start of year 165 7 158 1035 373 662
payments 500 — 500 189 — 189
exchange adjustments 129 62 67———
chargedcredited in year 183 637 454 304 196 108
at end of year 389 568 179 1528 569 959
analysed as
debtors falling due after one year
note 15 1343 — 1343 1528 — 1528
provisions for liabilities and charges 954 568 1522 — 569 569
389 568 179 1528 569 959
the pension asset of £389000 relates primarily to the prepayment on the two uk defined benefit pension
schemes less the fully provided cost as calculated under statement of standard accounting practice no 24 of
the unfunded element of the emco wheaton gmbh scheme see also note 26
the deferred tax liabilityasset comprises
group company
2003 2002 2003 2002
£’000 £’000 £’000 £’000
accelerated capital allowances 794 757 96 40
pension costs 368 219 473 333
other timing differences 594 983 — —
568 7 569 373 notes to the accounts
42 annual report 2003
20 equity share capital
2002 2003 2003 2002
number number ordinary shares of 25p each £’000 £’000
32000000 32000000 authorised 8000 8000
allotted called up and fully paid
25511055 25511055 at start of year and end of year 6378 6378
share options 2003 2002
executive share option and employee saye schemes number number
at start of year 515051 606430
adjustment to opening balance 23072 63921
new uncovered options granted in year 806667 —
uncovered options lapsed in year 175517 155300
at end of year 1123129 515051
options granted under these schemes are exercisable at various dates up to 26th september 2012 at prices
ranging from 8650p to 16700p per share
options granted under the employee saye scheme are included in the above figures where not covered by
shares held in the employee benefit trust see note 28
21 share premium account group company
2003 2003
£’000 £’000
at start and end of year 9275 9275
22 merger reserve group company
2003 2003
£’000 £’000
at start and end of year 1197 1197
the merger reserve arose as a result of the issue of shares to fund the 100 acquisition of equity in priestman
equipment limited at 31st july 1999
23 profit and loss account group company
2003 2003
£’000 £’000
at start of year 2817 6024
retained profitloss for the year 1187 409
exchange movements 630 —
at end of year 3374 5615
included in group reserves are nondistributable legal and capital reserves in certain overseas subsidiaries
amounting to £172000 2002 £153000
as permitted by section 230 companies act 1985 the profit and loss account of the company is not produced
herein of the consolidated profit attributable to ordinary shareholders for the financial year £1422000
2002 £605000 has been dealt with in the accounts of the parent company
at 31st march 2003 the cumulative goodwill written off to reserves on acquisitions made prior to 1st april 1998
amounted to £12248000 2002 £12248000 43
notes to the accounts
annual report 2003
24 consolidated cash flow statement
reconciliation of operating profit to cash flow 2003 2002
from operating activities £’000 £’000
operating profit 5816 4687
depreciation and amortisation charges 2605 2710
provisions decreaseincrease 183 158
stock decrease 1589 131
debtors decrease 560 991
creditors decrease 165 1331
capital grants amortised 16 9
exchange gainslosses 176 31
asset disposal gains 55 66
pension payments 500 1085
net cash inflow from operating activities 9475 6217
acquisitions and disposals
the proceeds on the sale of subsidiary undertakings relate to the sale of subsidiary undertakings which were
completed in the year ended 31st march 2001
reconciliation of net cash flow to movement in net borrowings
increase in cash in year 2856 237
cash outflow from net decrease in borrowings
and repayment of finance leases 1633 1805
change in net borrowings resulting from cash flows 4489 2042
new finance leases 56 656
termination of finance leases 9 —
exchange adjustments 951 150
movement in net borrowings in year 3491 1536
net borrowings at start of year 14456 15992
net borrowings at end of year 10965 14456
analysis of net borrowings
balance at other balance
start exchange cash noncash at end
of year movement flow changes of year
£’000 £’000 £’000 £’000 £’000
cash at bank and in hand 2487 146 1801 — 4434
overdrafts 1484 51 1055 — 480
borrowings due within one year 1311 1009 1405 770 1685
borrowings due after one year 13691 36 — 770 12957
finance leases due within one year 232 1 228 239 244
finance leases due after one year 225 — — 192 33
14456 951 4489 47 10965 notes to the accounts
44 annual report 2003
25 financial instruments
currency exposure
shown below are the group’s currency exposures these exposures comprise the monetary assets and
monetary liabilities of the group that are not denominated in the functional currency of the subsidiary company
or operating unit concerned it is these exposures which fluctuate throughout the year that give rise to the net
currency gains and losses recognised in the profit and loss account the amounts shown take into account the
effect of hedging instruments used to manage these exposures
net foreign currency monetary assetsliabilities
euro
functional currency of subsidiary or sterling us dollar currencies other total
operating unit £’000 £’000 £’000 £’000 £’000
2003
sterling — 139 397 152 106
us dollar — — 162 — 162
euro currencies 474 27 — — 501
other 204 94 113 25 22
total 678 72 348 177 579
2002
sterling — 4103 3414 1756 5761
us dollar — — 245 — 245
euro currencies 777 83 — 37 657
other 581 298 34 6 851
total 1358 4318 3625 1787 7514
fair values of financial assets and financial liabilities
set out below is a comparison by category of book and fair values of the group’s financial assets and liabilities
as at the year end
2003 2002
book value fair value book value fair value
£’000 £’000 £’000 £’000
primary financial instruments held or issued 
to finance the group’s operations
short term financial liabilities and current
portion of medium term borrowings 2409 2409 3027 3027
medium term borrowings 12990 12990 13916 13916
financial assets 4434 4434 2487 2487
derivative financial instruments held to manage
the interest rate and currency profile
interest rate swaps — 294 — 157
forward foreign currency contracts — 210 —12
the fair values of the primary financial instruments have been taken as the book values
the fair values of the interest rate swaps have been determined by discounting the forecast future cash flows to
net present values
the fair values of the forward foreign currency contracts have been taken from the spot rate of exchange at the year end
it should be remembered in the context of the above disclosures and calculations of “fair value” that as stated in
the financial review it is group policy only to use derivative financial instruments to cover underlying exposures
that arise in the normal course of the group’s stated commercial activities accordingly such instruments are
held to maturity and no purely speculative trading is undertaken
a narrative description of the group’s treasury risk management policy is given in the financial review on pages
9 to 12 and details of the interest rate risk profile of financial liabilities in note 17 45
notes to the accounts
annual report 2003
25 financial instruments continued
gains and losses on hedges
unrecognised gainslosses on instruments used for hedging and the movements therein are as follows
total net
gains losses gainslosses
£’000 £’000 £’000
unrecognised gains and losses on hedges
at 1st april 2002 12 — 12
gains and losses arising in previous years that
were recognised in the year 12 — 12
gains and losses arising before 1st april 2002
that were not recognised in the year — — —
gains and losses arising in the year that
were not recognised in the year 6 216 210
unrecognised gains and losses on hedges
at 31st march 2003 6 216 210
of which
gains and losses expected to be recognised
in the next financial year 6 216 210
gains and losses expected to be recognised
after the next financial year — — —
as permitted by financial reporting standard no 13 short term debtors and creditors have been excluded from
the disclosures other than the currency exposure given above
26 commitments
pensions
the group operates a number of pension plans throughout the world devised in accordance with local
conditions and practices materially however the group operates three principal defined benefit schemes two
funded pension schemes in the uk provide benefits based on final pensionable earnings with the assets of the
schemes held in separate trustee administered funds and a further partially funded pension scheme in germany
the full ssap24 liability for which is held on the balance sheet of the subsidiary company emco wheaton gmbh
over recent years separate payments have been made as described below to fully fund part of this scheme
with the consequent reduction in the provision on the balance sheet to the level required to cover the remaining
unfunded element
contributions to the schemes are charged to the profit and loss account so as to spread the cost of pensions
over employees’ working lives with the group the contributions are determined by independent qualified
actuaries on the basis of triennial valuations for the two uk schemes and of an annual valuation for the german
scheme
the two uk defined benefit schemes were both closed to new members with effect from 1st january 2002
after this date new uk employees become eligible to join a new defined contribution pension scheme the
group’s contributions to which are charged to the profit and loss account as they are incurred 26 commitments continued
pensions continued
the syltone group retirement benefits scheme
the latest actuarial valuation of the scheme took place as at 30th june 2001 the projected unit method of
funding was adopted for the purposes of these accounts the funding position was assessed as at 31st march
2001 the start of the financial year preceding the valuation the main assumptions adopted in this assessment
were that longterm investment returns would exceed pensionable earnings increases by 335 per annum
compound it was assumed that pensions in payment would increase at a rate of 24 per annum compound
as at 31st march 2001 the market value of the assets of the scheme was £21328000 which was sufficient to
cover approximately 81 of the benefits that have accrued to members after allowing for expected future
increases in pensionable earnings
as at 30th june 2001 there was a deficiency of £1354000 relative to accrued benefits with statutory
revaluation when measured using the prescribed method and assumptions under the minimum funding
requirement mfr part of this deficiency £139400 was made good on 9th april 2002 under the debt on
employer legislation the remainder will be made good by 5th june 2013 as part of the continuing contribution
rate reflected by the schedule of contributions certified by the scheme actuary on 6th june 2003
during the financial year contributions made by the group to this scheme amounted to £1347000
2002 £1830000
emco wheaton uk limited 1976 pension scheme
the latest actuarial assessment of the scheme took place as at 1st october 2000 the method of valuation and
actuarial basis were broadly as for the syltone scheme described above at 1st october 2000 the value of the
assets of the scheme was sufficient to cover approximately 175 of the benefits that had accrued to members
after allowing for expected future increases in pensionable earnings the emco wheaton uk limited 1976
pension scheme has enjoyed a contribution holiday throughout the financial year
emco wheaton gmbh pension scheme
an actuarial valuation of the scheme took place as at 31st march 2003 using the same method of valuation as
for the syltone and emco wheaton uk schemes above the main assumptions adopted differed slightly being
in the actuary’s opinion more in line with the german economic environment assumptions used were interest
returns of 55 per annum pensionable earnings to increase by 25 per annum and pensions in payment to
increase at 15 per annum compound on this basis the full ssap24 liability for this scheme was provided in
the accounts of emco wheaton gmbh
a new pension scheme has been agreed with the works council at emco wheaton gmbh this scheme like
the uk schemes will be fully funded with the assets held in a separate fund by 31st march 2002 payments had
been made into the new scheme to transfer all pensioners and active members between the ages of 30 and 55
it is planned that the remaining active members under 30 will be transferred once they reach 30 and are elegible
for the new scheme  as a consequence of german pension legislation active members over 55 years of age and
deferred members must remain in the old scheme until retirement when the last of the personnel satisfying this
criterion retires the old unfunded scheme will be extinguished it is planned that this gradual shift of the members
from the old to the new scheme will enable emco wheaton gmbh’s pension costs to remain constant
the group pensions charge for the period in respect of these schemes and retirement indemnities in france
was £975000 2002 £1064000 this is inclusive of £141000 2002 £136000 in respect of the amortisation
of experience surpluses that are being recognised over 15 years the average expected remaining service
lifetime of the active members a prepayment of £1343000 2002 £850000 is included in the consolidated
balance sheet this being the excess of the actual contributions paid over the accumulated pension cost of the
two uk defined benefit pension schemes in respect of group pension commitments outside the uk a provision
of £954471 2002 £1015198 is included in the consolidated balance sheet this being the excess of the
accumulated pension cost over the actual contributions paid of this amount €1288607 £889553
2002€1570232 £961975 relates to the remaining unfunded element of the emco wheaton gmbh
pension scheme
notes to the accounts
46 annual report 2003 47
notes to the accounts
annual report 2003
26 commitments continued
in respect of the group’s defined contribution pension scheme the pension cost charge for the period
represents contributions payable by the group to the scheme and amounted to £8000 2002 £nil there were
no outstanding or prepaid contributions at either the beginning or end of the financial year
group company
2003 2002 2003 2002
other commitments £’000 £’000 £’000 £’000
operating lease payments for the year
ending 31st march 2003
property leases terminating
within one year 219 159 42 22
in two to five years 210 319 — 49
in more than five years 297 273 — —
726 751 42 71
equipment rentals on leases terminating
within one year 54 39 — —
in two to five years 353 157 81 65
in more than five years 14 12 — —
421 208 81 65
guarantees and contingent liabilities
the company guarantees certain subsidiary company borrowings which at 31st march 2003 amounted to
£167000 2002 £357000
certain subsidiary companies have entered into various contractual performance bonds and associated
guarantees which at 31st march 2003 amounted to £1120000 2002 £1012000
the company has a contingent liability under a value added tax group election for the value added tax
liabilities of certain uk subsidiary companies which at 31st march 2003 amounted to £268000
2002 £514000
27 pension cost frs 17 disclosure note
whilst the group continues to account for pension costs in accordance with ssap 24 under the new pension
accounting standard frs 17 the following second year transitional disclosures are required
as detailed in note 26 above the group operates three principal defined benefit schemes the valuation of
liabilities for the two uk schemes included below have been derived by projecting forward the position from the
latest valuation to 31st march 2003 the latest valuation of the german scheme is at 31st march 2003 the
assumptions used by the actuaries are the best estimates chosen from a range of possible actuarial
assumptions which due to the timescales covered may not necessarily be borne out in practice the major
assumptions used by the actuaries were
2003 2002
rate of increase in pensionable earnings 350 375
rate of increase of pensions in payment 250 275
rate of increase in deferred pensions 250 275
discount rate 540 625
inflation assumption 250 275 27 pension cost frs 17 disclosure note continued
the frs 17 fair value of the schemes’ assets is their market value at 31st march 2003 as the assets are not
intended to be realised in the short term this fair value may be subject to significant change before they are
realised the frs 17 present value of the schemes’ actuarial liabilities is derived from discounting cash flow
projections over very long periods and is thus inherently uncertain
the assets in the scheme and the expected rate of return and the actuarial valuation of the schemes’ liabilities
were
at 31st march 2003 at 31st march 2002
£’000 £’000
equities 760 13121 825 17447
gilts and bonds 470 4754 550 5129
with profits and insurance policies — 7101 — 5745
fair value of the schemes’ assets 24976 28321
present value of the schemes’ actuarial liabilities 39595 33408
net deficit in the schemes 14619 5087
related deferred tax asset 4451 1591
net pension liability 10168 3496
if frs17 had been fully adopted in the financial statements the pension costs for the defined benefit schemes
would have been
analysis of the amount charged to operating profit
2003
£’000
service cost 937
total operating charge 937
analysis of net return on pension scheme
2003
£’000
expected return on pension scheme assets 2104
interest on pension liabilities 2093
net return 11
analysis of amount recognised in statement of total recognised gains and losses strgl
2003
£’000
actual return less expected return on assets 5960
experience gains and losses on liabilities 136
changes in assumptions 4274
net loss recognised 10098
notes to the accounts
48 annual report 2003 27 pension cost frs 17 disclosure note continued
movement in deficit during the year
2003
£’000
deficit in scheme at beginning of year 5087
movement in year
exchange adjustments 165
current service cost 937
contributions 1657
net interest cost 11
actuarial loss 10098
deficit in scheme at end of year 14619
history of experience gains and losses
2003
£’000
difference between expected and actual return on scheme assets
amount 5960
percentage of scheme assets 24
experience gains and losses on scheme liabilities
amount 136
percentage of scheme liabilities 0
total amount recognised in statement of total recognised gains and losses
amount 10098
percentage of scheme liabilities 26
28 employee benefit trust and long term share incentive plan trust
during the year the company contributed £8100 2002 £8100 towards the operating costs of the employee
benefit trust the trust has waived all rights to participate by way of its holding in the ordinary shares of syltone
plc in any dividend that may be declared by the company the dividend waived in the current year amounts to
£40000 2002 £40000
during 1999 and 2000 shares in respect of the long term share incentive plan ltip were transferred to the
trustees of the plan dividends are paid to the beneficial owners of those shares
the outstanding options to purchase shares from the trustees of the employee benefit trust and the maximum
number of shares which can be awarded under the ltip are
2003 2002
maximum maximum
number of number of number of number of
employees shares employees shares
fourth grant – february 1997 at
15917p per share —— 55 62440
fifth grant – february 1998 at
12550p per share 56 73915 58 75453
1999 ltip —— 3 151650
2000 ltip 5 232550 7 413610
total outstanding at 31st march 2003 306465 703153
at 31st march 2003 the trustees of the employee benefit trust held 541591 2002 541591 ordinary shares in
syltone plc as required by urgent issue t ask force no 13 these shares are included as investments in the group
consolidated balance sheet as at 31st march 2003 at a cost of £604000 2002 604000 and the trust’ s
borrowings which are guaranteed by the company of £nil 2002 £nil and cash in hand £nil 2002 £nil have
been included in the group’ s borrowings due within one year and cash at bank and in hand respectively
49
notes to the accounts
annual report 2003 50 annual report 2003
historical summary 51 annual report 2003
group five year record
1999 2000 2001 2002 2003
£’000 £’000 £’000 £’000 £’000
summarised trading results
turnover 93750 85687 82594 75464 78798
operating profit before
exceptional items 8011 6725 5126 5327 5816
profit on ordinary activities
before taxation 6159 4521 1751 3508 4803
profit after taxation 3636 2756 707 2014 3022
dividends 1750 1840 1831 1835 1835
retained profitloss for the year 1851 975 1203 160 1187
summarised balance sheet
fixed assets 21657 22730 20910 21439 20450
current assets excluding cash 35514 35515 35416 31549 30790
creditors 21010 19254 19477 17516 18242
net borrowings 16387 16804 15992 14456 10965
provisions and deferred income 1514 1660 1135 1031 1523
net assets 18260 20527 19722 19985 20510
other information
earnings per share 1510p 1141p 251p 799p 1210p
diluted earnings per share
see note 10 1506p 1138p 250p 796p 1206p
dividend per ordinary share 735p 735p 735p 735p 735p
dividend cover times 206 153 034 109 165
gearing 897 819 811 723 535
interest cover times 556 454 228 397 574
pretax profit to turnover 66 53 21 46 61
pretax profit to net assets
employed 337 220 89 176 234
average number employed 1136 1098 1037 875 840 52 annual report 2003
notice of meeting
notice is hereby given that the fortyfirst annual general meeting of syltone plc will be held at the premises
of the brewery chiswell street london ec1y 4dd on 4th september 2003 at 1130 am for the following
purposes
1 to receive and adopt the audited accounts for the year ended 31st march 2003 together with the directors’
report thereon
2 to declare a final dividend of 510p per share for the year ended 31st march 2003
3 to reelect dr d l speirs as a director of the company
4 to reelect mr r templeton as a director of the company
5 to consider and if thought fit pass the following ordinary resolution
that
the directors remuneration report contained within the 2003 annual report and accounts be approved
6 to reappoint kpmg audit plc as auditors of the company and authorise the directors to determine their
remuneration
7 to consider and if thought fit pass the following ordinary resolution
that the directors be and they are hereby generally and unconditionally authorised in accordance with
section 80 companies act 1985 to exercise all the powers of the company to allot relevant securities within
the meaning of said section 80 up to an aggregate nominal amount of £1622236 during the period
commencing on the date of the passing of this resolution and expiring at the end of the annual general
meeting of the company to be held in 2004 but so that this authority shall allow the company to make
before the expiry of this authority offers or agreements which would or might require relevant securities to be
allotted after such expiry and notwithstanding such expiry the directors may allot relevant securities in
pursuance of such offers or agreements
8 to consider and if thought fit pass the following ordinary resolution
that
the amended version of the syltone plc share incentive plan “the plan” described in the circular to
shareholders dated 24th june 2003 and constituted by a deed entered into by the company the “trust
deed” and a set of rules both the trust deed and the amended rules being substantially in the form
produced in draft to this meeting and for the purpose of identification initialled by the chairman of the
meeting be adopted subject to such further amendments thereto as the directors of the company
consider necessary or desirable to obtain or maintain the approval of the inland revenue thereto and the
directors be and are hereby authorised to make such amendments and do all such things as are necessary
or desirable to obtain or maintain the approval of the inland revenue thereto and to carry the plan into
effect
9 to consider and if thought fit pass the following ordinary resolution
that
the amendments to the syltone plc longterm share incentive plan “the ltip” which are described in the
circular to shareholders dated 24th june 2003 and to be constituted by the amended rules substantially in the
form produced in draft to this meeting and for the purpose of identification initialled by the chairman of the
meeting be adopted and the directors be and are hereby authorised to do all such things as are necessary or
desirable to carry the ltip as so amended into effect
10 to consider and if thought fit to pass the following special resolution
that
a the directors be and they are hereby empowered pursuant to section 95 companies act 1985
“ca 1985” to allot any equity securities within the meaning of section 94 ca 1985 as if section 891
ca 1985 did not apply to any such allotment provided that this power shall be limited to the allotment
of equity securities 53 annual report 2003
notice of meeting
i in connection with or the subject of an offer or invitation open for acceptance for a period fixed
by the directors to holders of ordinary shares and such other equity securities of the company
as the directors may determine on the register on a fixed record date in proportion as nearly as
may be to their respective holdings of such securities or in accordance with the rights attached
thereto including equity securities which in connection with such offer or invitation are the
subject of such exclusions or other arrangements as the directors may deem necessary or
expedient to deal with fractional entitlements that would otherwise arise or with legal or practical
problems under the laws of or the requirements of any recognised regulatory body or any stock
exchange in any territory and
ii otherwise than pursuant to subparagraph i above up to an aggregate nominal amount of
£318888 and shall expire on 4th december 2004 or if earlier at the conclusion of the annual
general meeting of the company in 2004 except that the company may before such expiry
make offers or agreements which would or might require equity securities to be allotted after
such expiry and notwithstanding such expiry the directors may allot equity securities in
pursuance of such offers or agreements and
b all authorities previously conferred under section 95 ca 1985 be and they are hereby revoked
provided that such revocation shall not have retrospective effect
9 to consider and if thought fit to pass the following special resolution
that
the directors of the company be and they are hereby empowered to exercise all powers of the company to
make market purchases as defined in section 1633 of the companies act 1985 of its ordinary shares of
25p each provided that
i the maximum number of ordinary shares which may be acquired is 1275552
ii the minimum price which may be paid for any such ordinary shares is 25p and
iii the maximum price which may be paid for any such ordinary shares is an amount equal to 105 of the
average of the middle market quotation for an ordinary shares according to the london stock
exchange daily official list for the five business days immediately preceding the day on which the
purchase is contracted to take place
and shall expire at the conclusion of the annual general meeting of the company in 2004 after the passing of
this resolution or if earlier 12 months from the date of passing this resolution but a contract of purchase
may be made before such expiry which will or may the executed wholly or partly thereafter and a purchase of
shares may be made in pursuance of any such contract
10 to transact any other business of an annual general meeting
by order of the board
andrew hartley
company secretary 24th june 2003
registered office
springmill street
bradford
west yorkshire
bd5 7hw notes
1 the directors are seeking authority under section 80 companies act 1985 to allot relevant securities up to an aggregate
nominal amount of £1622236 in the terms set out in resolution 7 this represented 2544 of the existing issued share
capital of the company on 24th june 2003
2 the directors are seeking authority under section 95 companies act 1985 to disapply the preemption rights under
section 89 companies act 1985 in respect of equity securities by way of rights and otherwise up to an aggregate nominal
amount of £318888 in the terms set out in resolution 10 this represented 5 of the existing issued share capital of the
company on 24th june 2003
3 the following documents will be available for inspection at the registered office from the date of this notice until the day
of the meeting
a copies of any relevant contracts of service or memoranda of terms of appointment of the directors of the
company
b register of directors’ share interests
these documents will also be available for inspection for at least fifteen minutes before the meeting and during the
meeting
4 a member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and vote in his or
her stead a proxy need not be a member of the company
5 in accordance with regulation 34 of the uncertificated securities regulations 1995 the company specifies that only
those shareholders registered in the register of members of the company as at 1130 am on 4th september 2003 or in
case of an adjournment as at 48 hours before the time of the adjourned meeting shall be entitled to attend or vote at the
above general meeting and that the number of votes which any shareholder may cast on a poll will be determined by
reference to the number of shares registered in such shareholders’ name at that time changes to entries on the register
after that time will be disregarded in determining the rights of any person to attend or vote at the meeting
6 a form of proxy for the use of shareholders is enclosed with the report forms of proxy must reach the office of the
registrars not less than 48 hours before the time appointed for holding the meeting
coffee and biscuits will be served from 1100 am the location of the brewery is given on page 55
notice of meeting
54 annual report 2003 printed by polestar corporate print limited bradford and london
notice of meeting
the brewery is in the city next to the barbican centre and within half a 
mile from st paul’ s cathedral the lloyd’ s building and the bank of
england it is easy to reach by road underground or rail
road – there is a space immediately outside the gates for cars taxis and
coaches to drop off passengers several buses also run nearby
parking – convenient multistorey ncp car parks located at
beech street 8ammidnight everyday finsbury square 24hrs monsat
london wall 24hrs monsat aldersgate street 24hrs open everyday
underground and rail –
moorgate 5 minutes walk circle metropolitan hammersmith 
city northern british rail and
thameslink
barbican 5 minutes walk circle metropolitan hammersmith 
city and thameslink
bank station 15 minutes walk circle northern and waterloo  city
liverpool street station circle metropolitan hammersmith 
20 minutes walk city central and british rail
annual report 2003


Summary:
 4 annual report 2003
chief executive’s statement
operational review
a large proportion of syltone’s business depends on international commercial vehicle markets and in most
major economies served by syltone purchases of these vehicles declined again last year  therefore it is most
encouraging to have achieved a significant improvement in the performance of the group   group turnover
rose 44 to £788 million and operating margins to 74 from 62 the year before  the value of orders won
during the year increased by 65 and the order book at 31 march 2003 was 19 higher than at the previous
year end
transportation division
our main transportationrelated manufacturing businesses are located in the uk france and the usa with
vehicle fitting operations and sales organisations in many other countries throughout europe and the rest of the
world  they are focused on the design and
manufacture of equipment for handling bulk
product on commercial vehicles in either dry or
liquid form the provision of onboard power
the design and manufacture of access
platforms and the design and manufacture of
power takeoffs “pto’s” axles and
gearboxes for demanding applications both
commercial and military
in europe the transportation division has
shown an improved performance compared to
the recent past  the management has now
settled down well after a period of
restructuring and has focused on building
upon the group’s marketleading position
our sales operations in france have had an
outstanding year with activity in the oil sector
in particular continuing to be very buoyant  since the restructuring carried out two years ago many of the
groupbuilt products supplied into this market are manufactured in the emco wheaton factory in margate and
the success of this operational change had a considerable impact on the performance of syltone in the year
elsewhere in the oil sector activity was at a lower level than the year before in particular there was no benefit
from major international opportunities during the course of the year the margate factory is highly automated
and is able to respond rapidly to the reequipping of major road tanker fleets when for example a major
national programme of conversion to bottom loading of petroleum tank trucks takes place our small
electronics business in denmark sam system
improved its throughput and profitability by a modest
amount in the year
operations in northern europe  the netherlands
germany belgium and poland  succeeded in
growing volume and market share in a flat or declining
market  these businesses have benefited particularly
from the increased market acceptance of the new xk
range of blowers introduced shortly before the start of
the financial year  this growth has in its turn had a
highly significant impact on our main manufacturing
operations in bradford where activity levels rose 
d9000 compressor and hydraulic drive system on daf vehicle
api valves fitted complete with guard bar and product return
system 5 annual report 2003
chief executive’s statement
sharply in the second half of the financial year and have remained at a high level since
activity levels in southern europe have shown an upturn  the operation in spain based in madrid and with
fitting shops both in madrid and in tarragona near barcelona has been revitalised during the course of the year
and has made excellent progress in addressing the market in spain for blowers and hydraulic drives  our
business in italy has also improved considerably following the introduction of new management and offers great
potential for the development of sales within a large market
unlike many of its competitors the xk range was produced specifically for the dry bulk road tanker market and
was designed to show superior product delivery capability with high
reliability low power consumption and low noise characteristics this
development has proved to be most successful and its success has
made a major contribution to the encouraging results achieved by our
springmill street factory in bradford
considerable effort has also been made by this sector of our business
to improve factory operating efficiencies to lower cost and to reduce
inventory  consequently focus has been given to the worldwide
search for more economical sources of supply  both improved
profitability and reduced capital employed in the business have been a
positive outcome of this approach
perolo our french manufacturing business had an eventful year
having experienced a disruptive fire at the end of september 2002
it is pleasing to report that the employees at perolo took this event in their stride and were quickly back in
production  perolo now has new senior management in place and continues to address the isotank container
business which remains depressed
our highways and utilities and priestman
access platform businesses are centred
on the cross lane facility in bradford in
the uk although the year saw the
substantial completion of the major
programmes for transco and bt  it also saw
the launch of the first reliable system for the
provision of onboard power for frontwheel
drive vehicles and achieved major
successes for fleet deliveries for the aa
the priestman business has had an
extremely strong year and has provided
considerable encouragement both by its success in the market place and by the ability of our factory personnel
to find better and more efficient means of assembling the machine and sourcing the parts  output grew by over
50 compared to the previous year and significant cost reductions were achieved  the most significant order
secured during the year was that from the irish utility eircom whose order for 76 115 metre elevating platforms
was the largest order for access platforms ever won for priestman products under syltone’s ownership
webster drives has had a good year although with profitability just below the level of the year before  progress
has been made with market penetration of the company’s range of clutch pto’s but the operating highlight of
the year has been the success of the company in winning an order for the manufacture of axles for a major
defencerelated application which will commence in the second half of the 200304 financial year  it is
expected that this new opportunity will have a considerable impact on the activity level and profitability of
webster drives in future years
last year’s annual report made mention of the increasing focus syltone intended to give to its aftermarket
activities  the operations are based at cross lane at bradford and were carefully restructured a year ago to
xk 18 compressor
xk 18 application in australia annual report 2003 6
chief executive’s statement
form teams dedicated to customer support and care customer service has improved dramatically and the
consequence to syltone can clearly be seen in increased aftermarket activity enhanced contribution and
significantly improved opportunities for the future
in north america syltone’s transportation business is centred on the manufacturing plant in louisville
kentucky where a range of blowers and hydraulic drive equipment is manufactured  it is from the louisville
offices that the group’s north american distribution network is managed and through which the group’s
products manufactured both locally and in europe are distributed into north america  activity last year in the
north american transportation business was disappointing  commercial vehicle sales were at a significantly
lower level than even the depressed levels of the year before and syltone’s sales were correspondingly reduced
intense competitive pressure continues and the decline in the value of the us dollar relative to sterling has
caused a squeeze on the margins of this business
fluid transfer division
the fluid transfer division is involved with the design and manufacture of equipment for loading and offloading
liquids from ships railcars and road vehicles and the design and manufacture of drybreak couplings  
our european facilities for the manufacture of loading arms of all types are located at kirchhain in germany  in
north america loading arms for use with railcars and road vehicles are manufactured in louisville kentucky
and since our new acquisitions were announced in may 2003 we manufacture marine loading arms in
houston texas  in canada our company specialising in the manufacture of drybreak couplings is located in
toronto  distribution of fluid transfer products is also carried out through major group operations in france and
australia
the performance of the division has been encouraging  volumes grew substantially throughout the year in each
of our major markets  the focus by our german operation on developing markets in russia and adjacent
countries both in central asia and in the baltic states has proved to be most rewarding during the year with
major contracts having been won and delivered  projects still in the order book at the year end included the
prestigious wysotsk project for lukoil the russian oil major which is the largest ever loading arm project won
by syltone
in the usa activity level increased following the addition of a major new distributor for chemical loading arms
early in 2002  this relationship has proved very fruitful although tempered by the subdued us economy but
bottom loading arm rack annual report 2003 7
chief executive’s statement
we are confident now that our loading arm division is very well positioned for the future
one of the most positive aspects of the fluid transfer operation was in our business based in france where
developments both in that country itself and in french influenced regions of north africa provided strong growth
for our activities
emco wheaton corporation our canadian dry break coupling business continued to grow its strong position
in the supply of devices to the bus and utility vehicle market throughout north america  business was quieter
during the year as spending by american public authorities remained at lacklustre levels  nevertheless the
company achieved a creditable result albeit somewhat below the level of the previous year
strategic review
syltone’s strategy is to focus on products and services embraced within the two main business segments of
equipment for the transportation market and for loading and offloading liquids from one mode of transportation
onto another or into store  the group is constantly developing and researching additional products or services
which will add to its business portfolio or competence or which will add geographical reach to the group’s
product offerings
key assets for syltone are its wellknown brands including airdrive webster drum emco wheaton perolo and
priestman for transportation equipment and emco wheaton and now augmented by syltone marine aarig and
celsi for fluid transfer equipment  these names are deemed to be critical to the continuing success of the
business  in addition to the sale of products under the group’s owned brand names the sale of other
complementary high quality products also features prominently in the group’s strategy to enable full benefit to
be taken from the group’s welldeveloped international distribution network underpinned by the nine key
engineering and manufacturing centres the leveraging of this international distribution network provides the
platform for the furtherance of the group’s objective of profitable growth  
a brief overview of the strategic strengths and objectives of our two divisions is set out below
transportation division
our key operating strategy is to focus firmly on the needs of the
end user of our equipment and to develop our selling resource
accordingly  frequently syltone’s sales are actually made to a
tank builder or intermediary but despite this it is to the end
user that the benefits of the equipment and its support services
are primarily sold  this enables us not only to differentiate
clearly our products’ unique capabilities in relation to those of
our competition but also to extend our sale to incorporate
where possible a complete system of products to meet the
customer’s requirements more exactly  it also permits syltone
to make use of another of its key competitive strengths its
aftermarket support programme which provides service
contracts and extended product support to users of syltone
equipment
to further syltone’s close contact with endusers company
owned fitting shops are located in ten key sites throughout
western and central europe to provide each customer with the
option to have equipment supplied by syltone to be fitted exactly in accordance with the manufacturer’s best
practices  such close contact to the enduser provides operating experience to syltone which is unique in the
industry
da 115 metres access platform key action plans for the coming year are set out below
• increase the rate at which new products are released into the market by reducing the time between product
conception and launch
• develop the already successful aftermarket programme with new
product offerings and into new regions
• extend the range of offerings of airdrive and priestmanbranded
products into new geographical areas
fluid transfer division
focus on the enduser is every bit as important to our fluid transfer
division as it is to transportation  in this division there is less likelihood
of there being an intermediary in the sale process but the paramount
importance of product excellence and product differentiation remains
the same
the smaller distribution loading arms for road vehicle and railcar
applications are manufactured in both europe and north america since
reduced manufacturing lead times have become increasingly important and intercontinental transportation
would be prohibitively expensive  the larger marine loading arms have hitherto been manufactured only in
germany leaving a strategic gap in serving key markets in north america for both new product and importantly
aftermarket services
this strategic gap was filled in may 2003 by the establishment of our own company in north america founded
on the assets and brand names of an existing wellknown competitor and the former emco wheaton licensee
we believe this will enable syltone to draw as close to its prospective customer base in the new world as it
currently does in the old
key action plans for the coming year are set out below
• develop the new north american capability for manufacture and support of marine loading arms into a
major competitor throughout north america
• extend the existing european aftermarket programme into new regions
• continue the internationalisation of the divisions product offerings to ensure that the division retains its
position as a leading supplier of marine and distribution loading arms worldwide
trevor murch
chief executive 24th june 2003
annual report 2003 8
chief executive’s statement
hydrapak – oil cooler
marine loading arms