ricardo plc
annual report  accounts 2002 ricardo plc annual report  accounts 2002  1
contents
2 financial highlights
3 corporate profile
4 recent key projects
14 board members
15 chairman’s statement
16 chief executive’s review
18 finance director’s review
20 directors’ report
24 remuneration committee report
30 corporate governance
32 statement of directors’ responsibilities
33 independent auditors’ report
34 consolidated profit and loss account
35 consolidated  and company balance sheets
36 statement of total recognised gains and losses
36 reconciliation of movements in total
shareholders’ funds
37 consolidated cash flow statement
38 notes to the financial statements
60 notice of meeting
64 secretary and advisers financial highlights
2 ricardo plc annual report  accounts 2002
five year performance record
1998 1999 2000 2001 2002
£’000 £’000 £’000 £’000 £’000
turnover 82368 95489 121107 139911 143178
turnover from continuing operations 78509 91003 117376 138370 143178
profit before taxation 8012 10425 12800 15107 16659
profit for the financial year 5362 7219 8923 10643 12061
total shareholders’ funds 26807 31378 37932 48131 55908
basic earnings per ordinary share 118p 155p 189p 222p 249p
dividends per ordinary share 66p 70p 74p 78p 86p
 the five year performance record has not been restated for the three years ended 30 june 2000 following the
adoption of frs19deferred tax
0
20
40
60
80
100
120
140
160
1998 1999 2001
785
910
1384
1432
0
2
4
6
8
10
12
14
16
18
80
104
128
151
167
249
0
5
10
15
20
25
118
155
189
2000
1174
2002 1998 1999 2001 2000 2002 1998 1999 2001 2000 2002
222
t urnover from continuing
operations £m
profit before taxation £m basic earnings per
ordinary share p


Summary:
 review of the year
during the past year despite the problems of the world economy and the reaction to and aftermath from 11 september
your company has continued to develop its position as one of the leading players in the international automotive
industry our commitment to the provision of the highest quality consultancy services to this industry has enabled us to
achieve record profits for the fifth consecutive year
all divisions have contributed to this success in particular the transmissions business ricardo driveline and
transmission systems rdts had an outstanding year despite the fact that a part of this business was transferred to
ricardo vehicle engineering rve when that division was formed in 2001 its response has been to grow its core
transmissions business to more than offset the transfer rdts once again supported the audi team at le mans where
those cars fitted with ricardo transmissions won first and second place for the third year running shortly after the end
of the year we acquired the business and assets of gemini transmissions limited a specialist transmissions company
located not far from leamington which is equipped with many of the machine tools we require for the support of our
consultancy services and development of motor sport interests
despite the pressures evident in the market place rve made a promising start achieving an encouraging turnover and
profit in its first year of autonomy
both ricardo consulting engineers rce at shoreham and ricardo north america rinc conducted their businesses in
markets where pressure on margins was significant this was promptly tackled by reducing costs and continually
improving our own internal efficiencies we remain confident about the long term opportunities in both these
subsidiaries and in september of 2001 authorised the landlord to build an extension to our facilities in detroit to more
efficiently respond to those demands in the future
annual results and dividend
profit before tax was £167m compared with £151m last year turnover increased to £1432m from £1399m earnings per
share increased by 122 to 249p from 222p continued application of good cash management practices produced a
net cash inflow of £168m which translates into net cash balances of £199m at the end of the year your board is
recommending an increase in total dividend to 86p per share compared with 78p last year this dividend is covered 29
times compared to 28 times in 2001
strategy
whilst adhering to the strategy of providing engineering consultancy services to the automotive industry which has
served us well in recent years we have decided to extend the consultancy service we offer to our clients to encompass
several of the strategic issues which our customers encounter we have recruited stephen parker a senior well
respected individual from the industry and given him a remit to develop a capacity to provide strategic consulting
alongside the company’s existing technology based activity he joined the board on 1 august 2002
alongside our core consultancy business we have continued to benefit from the policy which i mentioned last year of
exploiting some of the intellectual property we have developed in recent years
people
the death of john needham was a great loss to ricardo john spent his entire career with us and made a significant
contribution to our success and he is sadly missed
our business is a people business and the company is fortunate to have such a competent and committed staff once
again i thank them all for the contribution they have made
prospects
in the current financial year we are making a significant investment in setting up a strategic consulting business and
integrating gemini whilst our cost base is directly impacted by an increased pension charge our business continues to
grow and we face the future with confidence
sir noel davies
23 september 2002
ricardo plc annual report  accounts 2002  15
chairman’s statement