Annual Report and Accounts 2003
Innovative solutions for 
a safer world
www.firsttech.co.uk
First Tech r/a 2003 a/w  7/24/03  11:01 AM  Page 3 First Technology 2003
First Technology’s mission is to utilise today’s most advanced
technologies to create and deliver high quality products and solutions
which play a vital role in the safety, comfort and protection of people
around the globe and in monitoring the quality of their environment.
Contents
Section One
01 Financial Highlights 
02 Chairman’s Statement 
04 Chief Executive’s Review 
14 Financial Review 
18 Directors and Advisers 
Section Two
20 Index to Section Two 
21 Directors’ Report 
23 Corporate Governance Report 
25 Social, Ethical and 
Environmental Report 
27 Remuneration Report 
31 Independent Auditors’ Report 
32 Group Profit and Loss Account 
33 Balance Sheets 
34 Group Cash Flow Statement 
35 Principal Accounting Policies 
37 Notes to the Accounts 
56 Composition of the Group 
57 Notice of Meeting 
59 Five Year Financial Summary 
60 Group Addresses 
61 Financial Calendar 
First Tech r/a 2003 a/w  7/24/03  11:01 AM  Page 4 Gas Sensing
An international market leader offering the broadest gas sensor
technology range within the industry. Products are primarily
installed as part of Original Equipment Manufacturers’ (OEM’s)
gas detection instruments. The Gas Sensing Division’s
technologies include:
Electrochemical (oxygen & toxic) Sensors
Catalytic Bead Pellistors
Infrared Sensors
Mixed Metal Oxide Semiconductor (MMOS) Gas Sensors
Automotive & Special Products
Design, development and manufacture of automotive sensors and
electronics, control devices and precision ceramic components. 
Products include:
Accelerometers
Battery Cutoff Sensors
Supplemental Vehicle Heaters
Absolute Position Sensors
Bend Sensors
Crash Sensors
Electromechanical Circuit Breakers
Thermal Protectors
Solar Sensors
Twilight Sensors
Tunnel Sensors
Fuel System Components
Fuel Cutoff Sensors
Fog Sensors
Seating Sensors
Angle Torque Sensors
Electronic Ceramics
Safety & Analysis
Design and manufacture of sophisticated crash test dummies;
provision of associated laboratory services and the design and
supply of finite element crash test dummy models for
computerised crash simulations. Product range includes:
Frontal, Side & Rear Impact Anthropomorphic Test Devices (ATDs)
Children ATDs
Aerospace & Military ATDs
Speciality ATDs
Sensors & Instrumentation
Data Acquisition Hardware
Calibration Equipment
Load Cells & Torque Transducers
First Technology 2003
Our goal is to build a global, world-class sensor-based business,
which serves the needs of our customers to the highest possible
standards, delivers consistently high returns for our shareholders and
provides a challenging and rewarding place to work for our staff.
First Tech r/a 2003 a/w  7/24/03  11:01 AM  Page 5 Typical Product Applications
Safety
Petrochemical, chemical, mining,
telecoms, industrial, gas & water utilities,
power generation, marine, aerospace
Emissions
Environmental, industrial, gas utilities, 
power generation
Medical
Anaesthesia, respiratory, incubators, 
critical care
Automotive
Vehicle exhaust testing, cabin air quality
Domestic
HVAC, domestic appliances, CO Safety
Opportunities
An established market leader in safety, emissions
and medical gas applications, the Gas Sensing
Division is growing fast to become a major force
within the automotive and domestic application
areas. New key products such as the family of
IRidium
®
Infrared Gas Benches and the solid
state sensors for boiler flue safety are developing
new, large and very important business
opportunities. Concern over the extensive
pollution problems in China and the Far East
continues to increase and we anticipate above
average growth for our products in this area in
the next few years.
Typical Product Applications
Automotive
Occupant Safety
Occupant Comfort
Protection
Special Products
Electromechanical Circuit Breakers
Electromechanical Thermal Protectors
Opportunities
OEM pressure to deliver enhanced quality
solutions at an ever lower cost means we
continue to focus effort on the supply of multi-
function sensor modules. Our goal is to add
value for our customers by minimising vehicle
cost and complexity, while maximising
performance. In collaboration with UK research
organisation, QinetiQ, we have developed jointly
a thermal camera for occupant sensing, which
has received encouraging feedback from the
automotive OEM’s. In response to heightened
interest in hybrid vehicles with higher powered
electrical systems, we have developed a specific
safety component, the Battery Cutoff Device. 
Typical Product Applications
Real and Computer-simulated Crash
Testing
Automotive and other vehicle OEM’s,
governments, insurance and other safety
institutes, aerospace organisations and the
military
Test Lab Repair & Overhaul Services
Automotive OEM’s
Strain Gauge Measurement and
Sensor Installations
Industry OEM’s: packaging, aerospace,
computer manufacture, medical, tool
calibration, gas turbine testing – aircraft
& land based
Opportunities
The division’s market-leading position,
experience and established links with industry
regulators mean we are well placed to respond
quickly to increasingly stringent legislated safety
regulations. Current areas of concern in the US
include side impact safety with larger vehicles,
such as sports utility vehicles or trucks, striking
cars, side impact small female and children
dummies, new frontal tests for children and child
restraints, whiplash protection and rollover
protection. In Europe, EuroNCAP plans to
extend test subjects to include the study of 
child dummies.
The Group’s core divisions – Gas Sensing,
Automotive & Special Products and Safety
& Analysis – operate from facilities in
Europe, USA, Asia and the Caribbean.
First Tech r/a 2003 a/w  7/24/03  11:01 AM  Page 6 First Technology 2003
Robust performance in a difficult year
Against the backdrop of continued global economic and political
uncertainty, the Group has produced a robust performance in a difficult year
Final dividend increased to 6.1p per share (2002: 5.8p per share) making a
total dividend for the year of 9.5p per share (2002: 9.0p per share), up 5.6%
Total Group turnover was £127.6 million (2002: £137.0 million)
Strong cash generation with net cash of £0.1 million at the year end (2002:
net debt of £12.3 million)
Gross margin improved to 40.8% (2002: 39.9%) and operating margin*
maintained above 20%
Profit before tax* was £25.5 million (2002: £28.7 million)
Adverse currency movements on translation reduced turnover by £4.1
million and operating profit by £1.1 million
*Before exceptional reorganisation and integration costs and goodwill items
Turnover (£’m) Profit before tax,
exceptional reorganisation
and integration costs and
goodwill items (£’m)
Headline earnings per
share (pence)
Dividends per share
(pence)
60.8
116.8
145.1
137.0
127.6
99 00 01 02 03 99 00 01 02 03 99 00 01 02 03 99 00 01 02 03
14.2
20.9
29.1
28.7
25.5
18.8
23.9
29.8 30.0
27.2
5.7
7.2
8.6
9.0
9.5
Financial Highlights 01
First Tech r/a 2003 a/w  7/24/03  11:01 AM  Page 7 First Technology 2003
My interim statement was made against a
backdrop of global economic and political
uncertainty. However, I did allude to the
comforting facts that a significant proportion 
of our products are sold into legislated markets
and that we enjoy strong international market
positions in the increasingly important sectors of
safety and the environment. I am pleased to say
that such factors, along with strong management
control, have resulted in a robust performance in
a difficult year. It is particularly pleasing to note
that, once again, our operating margin in relation
to on-going items was above 20% and we ended
the year debt free. Profit before tax on the same
basis was £25.5 million (2002: £28.7 million)
and headline earnings per share were 27.2 pence
per share (2002: 30.0 pence). I do not include in
“on-going items” the exceptional reorganisation
and integration costs or goodwill items.
Approximately half of our sales are in the US,
where the sluggishness of that market linked to 
a significant weakening of the US dollar during
the year, had a negative effect on our overall
performance. The effect of adverse currency
movements on the translation of the results of
our overseas operations was to reduce the
turnover figure by £4.1 million and to lower the
operating profit figure by £1.1 million. Added to
which, the lead up to the Iraqi war and the war
itself, coming as they did in our normally strong
last quarter, had a dampening effect on demand. 
Cash Flow
Once again, the business proved to be resilient,
especially in its cash generating abilities. After
capital expenditure and acquisition payments of
£6.8 million and the payment of £6.9 million in
dividends, the Group had net cash of £0.1 million
at the year end compared with a net debt figure
of £12.3 million at the previous year end. 
Dividends
Given the continuing strong cash generation 
of the business, your Board has decided to
recommend an increase in the final dividend to
6.1 pence per share (2002: 5.8 pence), bringing
the total dividend for the year to 9.5 pence per
share (2002: 9.0 pence), an increase of 5.6%,
which is covered 2.8 times by headline earnings
(i.e. profit after tax excluding exceptional
reorganisation and integration costs and
goodwill items).
If approved, the final dividend will be paid on the
7th October 2003 to shareholders on the register
at close of business on 5th September 2003.
Board Changes
On 10th March 2003, John Shepherd joined the
Board as Chief Executive having previously been
with Smiths Group plc, where his last position
was as Managing Director Smith Detection.
John brings considerable experience in the
building and management of profitable
international technology based businesses. I have
no doubt our business will gain considerably
from his leadership. For more information on
John and his appointment and my own position
going forward I would refer you to our company
announcement of 18th February 2003, a copy
of which is posted on our website.
Dr Fred J Westlake
Chairman
Chairman’s Statement 02
First Tech r/a 2003 a/w  7/24/03  11:01 AM  Page 8 First Technology 2003
Corporate Governance
First Technology has always been committed 
to high ethical standards and takes pride in its
open dialogue with investors, employees and
customers. The Board accepts the principles
embodied in the Combined Code introduced in
June 1998 and makes every effort to apply them,
taking into account the size of the business.
Your Board has discussed the recent draft
recommendations of the Higgs and Smith
reports. Whilst we are committed to proper
corporate governance, we are concerned that
some of the recommendations may be
inappropriate for smaller companies such as
ours, leading to excessive added costs without
providing any substantive improvements in
corporate governance. Modifications have been
mooted and it is to be hoped that the final
document meets the concerns that many
companies have expressed.
We have always linked the remuneration of our
Executives to the profitability of the business.
Consequently no bonuses are being paid to my
Executive Director colleagues or myself in
respect of the year being reported.
Environmental Management
In my last interim statement, I spoke of 
the strong belief of the Board that sound
environmental policy contributes to our
competitive strength and is to the benefit of 
all stakeholders. At that time, five of our eight
major operating sites had achieved certification
of the internationally recognised environmental
management standard, ISO 14001. I am now
pleased to report that the remaining three sites
also achieved certification in the second half of
the year.
Outlook
We remain firmly committed to our strategy of
creating and supporting innovative products and
services in our chosen global markets of safety
and the environment.
Our never-ending effort to reduce costs led 
to increased production in the Dominican
Republic and component sourcing in the Far
East. These are trends which will continue.
All the signs are that the various factors which
are currently having an adverse effect on global
economic activity will be with us for some time
to come. This makes it difficult to forecast
revenue and profitability in the near term.
Compared to our peer group, we continue 
to enjoy healthy profit margins, strong cash
generation and a high return on capital
employed. Our search for suitable acquisitions,
for which we are well placed, continues.
Your Board believes that our clear focus,
established strategy and new product pipeline
mean we are well positioned to benefit when our
markets improve.
Fred Westlake
Chairman
03
Compared to our peer group, we continue to enjoy
healthy profit margins, strong cash generation and a
high return on capital employed.
First Tech r/a 2003 a/w  7/24/03  11:01 AM  Page 9 Since joining the Company on 10th March, 
I have been very positively impressed by the
strategy, operations, people and products of
First Technology. I am confident that the
inherent strengths of our technology base,
manufacturing process knowledge and
workforce commitment give us the ability to
build on the resilience of the business and
resume profit growth.
MARKETS
The automotive market worldwide has gone
through another difficult period in the last
twelve months. In North America, the major 
US manufacturers influenced the market with a
series of customer incentives which helped to
increase vehicle production by 2.1% from fiscal
year 2002 and thereby had a positive influence
on our shipments. Similar incentives have not
been evident in Europe where car production
decreased 0.3% from last year. Despite the
incentives, North American inventories at Ford,
GM and Daimler Chrysler increased to a level
of over 70 days - up from about 60 days a year
ago. Intense price pressures from customers and
the trend to further integration of sensor
functions continue.
The Gas Sensing market continues to grow 
and demand for our products remains strong,
especially in the petrochemicals, automotive
emissions and mining segments. We are also
capitalising on some opportunities to sell our
products into adjacent markets such as domestic
boiler flue gas monitoring. We have made
significant further inroads into the fast growing
Chinese market.
The automotive Safety and Analysis market has
also been buoyant this year. All three of the
major markets (Japan, Europe and the US) have
seen year-on-year growth. The drivers were
increases in Side Impact Dummy (SID) crash
testing, consumer vehicle rating programmes
and further regulatory standard upgrades.
NEW TECHNOLOGY
One of the hallmarks of First Technology is our
track record of successful investment in new
technologies which result in the innovative new
products demanded by our customers. Over the
last year we have continued to invest significant
resources in new technology development to a
value of £8 million or more than 6% of
turnover. In addition, our search for the best
available technologies has led us to collaborate
with QinetiQ in the UK - the science and
technology powerhouse recently formed from
the British Government defence research
establishments.
In automotive, this continued collaboration 
has led to the joint development of a Passive
Occupant Sensing Infrared Camera (POSIC),
which has been very positively received by
customers as a potential low cost solution to the
regulated requirement in the US scheduled for
implementation in 2006 for detecting the size
and position of passengers. Encouraging feedback
has been received from Original Equipment
Manufacturers (OEM’s) and in-car trials are
planned in collaboration with customers later
this year. This patented technology still requires
further development and field-testing, but it is
one we are becoming increasingly optimistic
about in regard to future potential.
Another co-development effort with QinetiQ
involves a very low cost battery-less in-tyre air
pressure sensor. Although this market is already
crowded with a number of players and
technologies, we are investigating supplying a low
cost component to an existing system supplier in
a partnership arrangement. This route to market
would provide a quicker, simpler method that
should allow us to evaluate the potential of this
technology with a small investment.
In our optical encoder group, we have been
disappointed in the last year or two with some
delays of promised programmes as sophisticated
steering systems get pushed out by cost sensitive
OEM’s and delays in 42V architecture. However,
we have continued to work on refinements and
validations of our steering sensors and are now
seeing renewed activity as the benefits of the
more advanced steering systems seem to be
getting the attention of the OEM’s.
First Technology 2003
One of the hallmarks of First Technology is our track
record of successful investment in new technologies
which result in the innovative new products 
demanded by our customers.
Chief Executive’s Review 04
John Shepherd
Chief Executive, appointed to the Board in 
March 2003.
First Tech r/a 2003 a/w  7/24/03  11:01 AM  Page 10 First Technology 2003
We have recently invested in upgrading the
technology used in our condensation sensor to
sense rain as well. We are now developing a
multi-function sensor with the condensation and
rain features combined with our well recognised
solar/twilight/tunnel sensing abilities to provide
the market with a sensor that should provide a
very cost effective product to the OEM’s.
During the period, we have also continued 
our collaboration with the Swatch Group in
Switzerland on the development of a gyroscope
for inclusion in advanced vehicle dynamic
sensing systems and we plan to demonstrate this
to customers shortly.
The investment in gas sensing continues to 
pay dividends, with 24% of 2002/3 sales
coming from products launched in the last 
two years. Key new products include the new
MICROceL
™
range of small sensors. The first 
of these postage stamp-sized sensors, the
MICROpeL
™
catalytic bead device, was
launched in May 2003. A number of industrial
safety instrumentation manufacturers are
currently designing this sensor and its family
members into new instruments for launch in
2003 and 2004, to exploit the reduced size and
weight offered by this family of devices.
Other new sensors entering the market place
include a module for insertion into boiler flues
to detect abnormal and unsafe carbon monoxide
levels, using our exclusive solid state sensing
technology. The US alone manufactures about
3.3 million domestic boilers per year and
detecting toxic carbon monoxide leakage at its
source is important when many of these systems
heat and circulate air from the boiler around the
house. A leading US boiler manufacturing
partner is currently evaluating the device and we
hope to see the first significant sales for this
application in 2004.
We are also investing in the development 
of biosensors to detect hazardous airborne
substances in industrial environments. Areas of
opportunity include industrial processes using
potentially harmful enzymes, such as in the
baking industry and the manufacture of washing
powders, as well as industrial airborne products
from mould in air ducts and concealed in
structural panelling (an increasingly common
problem in buildings, especially in North
America). We have teamed up with and taken
an equity stake in a UK based biotechnology
company to develop and evolve their established
technology into sensors specifically for industrial
applications. The first product for launch in
2004 will be a sensor for subtilisin, an enzyme
which is hazardous to workers engaged in the
manufacture of ‘biological’ detergents.
In Safety and Analysis, new product
development remains an important focus in
order to keep pace with constantly changing
crash environment methods and procedures.
Key developments in the last year include the
iDummy
™
which redefines the concept of a
dummy. iDummy
™
changes the product to an
integrated, intelligent dummy with in-dummy
data acquisition, sensors and network cabling,
with no umbilical cord and no additional mass.
WorldSID (a side impact dummy) is the first
dummy to include the iDummy
™
capabilities.
Demand for new dummy sensors is increasing
and to meet this demand we are actively
developing several new products. 
Protection of people and their environment is key to 
our philosophy: for example, we are investing in the
development of biosensors to detect hazardous airborne
substances in industrial environments.
05
We have established complex production
operations in low cost labour markets
without compromising product quality or
our commitments to our customers. This
helps us to maintain our operating margins
in challenging times whilst offering our
customers more cost effective solutions.
Left: City Technology’s new MICROpeL
™
catalytic bead sensing device.
Right: The revolutionary iDummy
™ 
developed
by our Safety & Analysis team.
First Tech r/a 2003 a/w  7/24/03  11:01 AM  Page 11 Developing new products
Despite testing times in the commercial world,
our commitment to research and development
remains high. It is vital for the future of the
Group that we sustain the new product pipeline.
To this end, on average, the Group invests 6%
of annual sales in the creation of new products
keeping us at the forefront of our chosen fields
of safety and comfort. In 2003, some 23% of
the Group’s turnover was generated by new
products.
Forging technical partnerships
The recent collaboration between our Automotive
& Special Products Division and UK research
organisation QinetiQ leverages our strengths to
launch new products to market more quickly
and economically. Together, we have developed
an ultra-low cost thermal camera for vehicle
occupant position sensing. The sensor will meet
future Smart airbag regulations, which will
require the sensor to determine occupant size
and position for more sophisticated airbag
deployment.
First Technology 2003
Understanding the needs of our customers 
and responding with technical innovations that 
provide them with high quality cost effective solutions 
is fundamental to our success and future growth
Right
Join the MICRO revolution: pellistor
production at our Portsmouth facility for City
Technology’s new catalytic bead sensor for
combustible gas detection, the MICROpeL
™
Introducing the next generation
Customers in the industrial safety market
challenged City Technology to develop sensors
to enable them to produce smaller portable gas
detectors, integrate gas detection into other safety
equipment, such as helmets and goggles, and, 
at the same time, be more cost efficient. City’s
solution is the new MICROceL
™
range of small,
flat sensors. The first product in the range,
introduced in May 2003, is the MICROpeL
™
combustible gas sensor, which is an impressive 75%
smaller and 95% lighter than existing sensors.
Chief Executive’s Review 06
First Tech r/a 2003 a/w  7/24/03  11:01 AM  Page 12 First Technology 2003
Below
The more accurate the occupant position sensing,
the more effective the deployment of airbags on
impact and the lower the risk to human life.
Encouraging OEM feedback on the Passive
Occupant Sensing Infrared Camera (POSIC),
the thermal camera being developed jointly by
First Technology & QinetiQ, means in-car
trials are planned in collaboration with
customers later this year.
07
R&D Investment (£’m)
% of Sales
Spend
2.2
5.4
7.7
8.2
8.0
99 00 01 02 03
3.6%
4.6%
5.3%
6.0%
6.3%
First Tech r/a 2003 a/w  7/24/03  11:01 AM  Page 13 First Technology 2003
OPERATIONS
GAS SENSING
The Gas Sensing division had another strong
year, with sales increasing by 5% year-on-year to
£25.5 million. During 2002/03 the US Dollar
weakened significantly and, as approximately
half of the sales are in that currency, there was
significant erosion of the Sterling value of sales.
At comparable exchange rates, total sales grew
by 7%.
The growth was helped by a very strong
performance from the sale of sensors for
industrial safety applications, with these sales
increasing by 11% during the year. This increase
arose from internal organic growth in the
regulated and legislated industrial safety markets,
combined with taking market share from direct
and vertically-integrated competitors. Demand
from the major markets in this segment remained
strong throughout the year, particularly from the
petrochemical, mining and municipal areas, and
sales of catalytic bead combustible gas sensors
(pellistors) increased by 31%.
Rapidly growing sales of our IRidium
®
infrared
sensor module family also helped sustain growth.
Over 2,000 modules were sold to a number of
vehicle exhaust gas analyser manufacturers in
2002/03. The portable analyser incorporating
IRidium
®
100 manufactured by OTC, a
subsidiary of the US SPX Corporation, has been
particularly successful. During the year, several
other analyser manufacturers in the US, Europe
and the Far East completed the design of the
unit into their new products. Thus, sales of this
sensor module are expected to continue growing
as these new analysers are launched. Sales of the
nitric oxide automotive exhaust gas sensor for
the US regulated market continued to dominate
this small, but significant, niche in 2002/03. 
China continues to be an exciting area of growth
for our safety, flue-gas emissions and automotive
sensors. Total sales to the Far East in 2002/03
increased by 44%. The lower-specification
IRidium
®
50 infrared sensor module was
launched successfully at a major trade show in
China and achieved its first sales there during
the year. There is now a number of very
promising prospects currently sampling the
device for incorporation into locally
manufactured analysers. Many Chinese cities
have extensive pollution problems, exacerbated
by the growing number of cars used as the
middle-class becomes more prosperous and the
Chinese authorities seem determined to reduce
city pollution by 2008 (when they host the
Olympic Games). Much of the enforcement of
the existing emissions regulations is done by
local police forces, equipped with portable
exhaust analysers, and the IRidium
®
50 will
serve this market very well.
We are continuing to focus significant sales and
marketing resources on China and the Far East
and anticipate sustained strong growth in
2003/04 and beyond.
China continues to be an exciting area of
growth for our safety, flue-gas emissions and
automotive sensors as the Chinese authorities
push to reduce pollution ahead of hosting the
Olympic Games in 2008. We anticipate
sustained growth in 2003/04 and beyond.
Sales Analysis - by product
Gas Sensors 20%
Safety & Analysis 17%
Circuit Breakers 16%
Optical Sensors 14%
Fuel Cut Off 13%
Other Auto 12%
Component Distribution 6%
Ceramics 2%
Chief Executive’s Review 08
China is an exciting area of growth for our
safety, flue-gas emissions and automotive sensors.
Total sales to the Far East increased by 44% in
2002/03.
First Tech r/a 2003 a/w  7/24/03  11:01 AM  Page 14 First Technology 2003
OTHER MANUFACTURING
Automotive and Special Products
In Automotive and Special Products we made
some significant gains in key product areas. 
In US Dollar terms, the solar/twilight sensor
business at Ford was up by 30%, tunnel/twilight
sensor business was up 70% overall and our 
4-Zone solar sensor business increased 35% at
Daimler Chrysler. These gains have been offset
somewhat by continued intense price pressure.
We have continued to make significant
investments in new product development in
order to offset the reducing sales of one of our
original and most profitable products - the Fuel
Cut Off (FCO) switch. The rate of reduction in
FCO sales is partly dependent on how quickly
the function is taken up by the airbag sensors
and is, therefore, difficult to forecast. 
Excluding last year’s one-off cooling fan project
for Ford, overall electromechanical product sales
increased by 10% in US Dollar terms, with sales
of our circuit protection devices for domestic
heating systems performing particularly well,
showing a 32% increase overall from last year.
The market for our communications ceramic
products continues to be depressed and any turn
around from this three year decline is difficult to
predict. However, there was a small increase in
sales over prior year in the second half. The
other ceramic based products - Supplemental
Vehicle Heaters - have fared much better with
shipments more than doubling from the prior
year. Prospects for this product range are good.
We have added further impetus to reducing our
cost of operations during the year and have
focussed on three primary tasks:
•Further reduction of FCO costs
•Improvement of margins and cash flow
•Speeding up introduction of new products
During the year we implemented the difficult
decision of discontinuing manufacturing at our
Farnborough UK facility. This will result in net
annual savings of £0.9 million.
Despite the tough market conditions and the
resultant intense price pressure we have managed
to hold, and in many cases increase, the operating
margins of our automotive products. We have
achieved this through further intensification of
our Lean Manufacturing initiatives by dedicating
more resources to the never-ending task of
eliminating waste and improving the flow in 
our processes. We have continued to increase
production in our Dominican Republic facility
which we have recently expanded for the second
time in three years.
In response to the current US trend of cutting
costs and features from vehicles, we continue to
aim for the development of products which will
be either required on future vehicles or bring
additional value for OEM’s by combining
functionality. Overall, in this division, we
dedicate more than 6% of revenue to new
product development in order to fuel the growth
of the business.
New products and applications introduced in
the last year include:
•Battery Cut Off devices for a dual voltage
North American vehicle.
•Twilight (Headlight Control) sensor for a US
produced Japanese vehicle.
•Combination Solar (Climate Control) and
Twilight sensor for a US produced Japanese
vehicle.
• Combined Tunnel and Twilight sensor on
Audi A8.
• The first Air Quality Sensor commitment
from Ferrari who will also take the First
Technology Solar/Twilight and Condensation
sensors.
•A Dual Zone Solar sensor for multiple
European customers.
•A combined Solar/Twilight sensor for Volvo.
All of these products have either recently started
shipment or will start in the next eighteen
months.
Our Automotive & Special Products Division
continues to focus on the development of multi
feature sensors in response to the continued
pressure from OEM’s to maximise functionality
at minimum cost.
09
North American Automotive Market
Big 3 Production FT Fiscal YoY 
(%)
Fiscal 1st 2nd Month
Year Half Half of April
2003 Year Year 2003
GM 4.6 8.0 1.1 -19.9
Ford 1.2 9.4 -6.9 -11.9
Daimler - Chrysler -1.3 5.1 -8.3 -11.0
Total NA Car & Truck 2.1 7.8 -3.7 -14.1
European Production -0.3 0.4 -0.5 -0.5
Our Automotive & Special Products Division 
continues to focus on the development of multi-feature
sensors in response to the continued pressure from
OEM’s to maximise functionality at minimum cost.
Source: Automotive News
First Tech r/a 2003 a/w  7/24/03  11:01 AM  Page 15 First Technology 2003
Our specialist in-house resources and experience
enable us to engineer our ideas and licensed technology
into effective designs, capable of volume manufacture,
to solve the challenges given to us by our customers.
Right
Technology helps lessen the burden on vehicle
manufacturers created by ever increasing
legislated test requirements. First Technology’s
virtual dummy family is valued by OEM’s as a
key tool when it comes to designing crash-
worthiness into their vehicles.
Building customer relations
It is vital that we nurture strong relationships
with both new and existing customers. We are
proud to provide our customers with ongoing
technical support and innovative response to
their feedback. We offer novel, high
performance products designed to answer the
needs of our customers. We believe in solutions
designed for high volume production to
promote efficiencies and lower costs.
Creating the virtual dummy
Vehicle design is an expensive process and since the
early 1980s, OEM’s have been using computer
simulation of crashes in order to minimise the
number of real vehicle crash impact tests. Original
dummy models were relatively unsophisticated,
limited both by the level of computer power and
the software technology. In the mid 1990s, our
Safety & Analysis Division initiated the
development of a complete line of finite element
dummy models. The goal was to create highly
accurate, detailed and robust models specifically
designed for the end user application - safer vehicles.
Maintaining the dummy family
We are continually improving and expanding
the finite element family. The dummy library
now includes 10 separate dummies, the latest
addition being the SID-IIs, a side impact
dummy representing a small adult female. The
SID-IIs is specified by the Insurance Institute
for Highway Safety (IIHS) in a brand new side
impact procedure. Demand for this model is
high as OEM’s use simulation to understand
this new test quickly and cost-effectively.
Chief Executive’s Review 10
First Tech r/a 2003 a/w  7/24/03  11:01 AM  Page 16 First Technology 2003
Above
Simulations that needed a multi-million dollar
super-computer in 1995 can now be
accomplished on a cluster of PCs costing just
$20,000. This drives the need for more detail
and accuracy in the models which are now
going through their third round of complete
upgrades.
11
First Tech r/a 2003 a/w  7/24/03  11:01 AM  Page 17 Safety and Analysis
This division had a record year with sales up
24% in US Dollar terms. All three of the major
markets (Japan, Europe and the US) enjoyed
year-on-year increases in shipments despite 
the fact that the overall automotive market
remained difficult. 
Consumer vehicle ratings and safety awareness
remain the drivers for this business. Key items
which have continued to drive the business
forward include EuroNCAP adopting the ES-2
(mid-size male) dummy to rate vehicles in side
impact crash tests, the US Insurance Institute
for Highway Safety (IIHS) adopting the SIDIIs
(small female) to rate vehicles in side impact
crash tests and also adopting a new test that
represents a sports utility vehicle or truck,
because of the growing number of truck to car
side impact crashes in the US.
In the US the government announced plans 
to upgrade the current side impact standard
following the lead of the consumer test
programmes. The new ES-2 and SIDIIs
dummies are proposed candidates to be used in
tests mandated by this standard. The proposed
rule will address new injury areas including the
head and abdomen. In Europe, regulators are
considering upgrading the European side impact
standard using our ES-2 dummy. These pending
US and European rule changes are positive
developments for future sales.
During the last year, the WorldSID programme
came to fruition with the shipment of 7 pre-
production dummies. These dummies represent
the second version of this new product and were
shipped to most of the world’s OEM’s. The
prototypes will be tested and evaluated during the
next several years, after which consumer tests or
legislation will drive the extent of additional sales.
Sales of the First Technology Safety Systems
(FTSS) virtual dummy software, known as the
Finite Element Models (FEM’s), continued to
grow for the fourth straight year, improving
40% on top of last year’s 50% increase in local
currency terms. The FEM’s are the standard test
device to optimise restraint systems in pre-
production simulations. Virtual crash tests
provide additional test data to evaluate new
regulations and restraint designs. Our customers
are demanding more complex models which
require upgrades to earlier FEM’s developed five
First Technology 2003
years ago. This range of products provides a
useful aftersales income stream.
Another key driver for growth is our continuing
push to provide local technical support near our
customers in the US, Far East and Europe.
Service Centres in Liberty, Ohio; Nagoya, Japan;
Heidelberg, Germany and Delft, Netherlands
continue to expand our ability to provide full
service and repair facilities to meet customer
demands. Recent awards to these service centres
include a new contract at Honda America,
located in Ohio. This multi-year contract is the
first OEM customer and it is worth $1 million
over three years. Toyota awarded FTSS Japan a
calibration contract to service dummies and
instrumentation, which is worth $300,000.
Toyota suppliers are expected to follow Toyota’s
lead. Renault selected FTSS Germany to service
FTSS dummies in a contract also worth
$300,000.
Within our instrumentation company (HITEC)
we have recently secured a large order to supply
instrumentation for a torque sensitive, power-
assisted wheelchair, which will enter the market
this year. This and other medical applications
will provide this business with good growth
opportunities.
COMPONENT DISTRIBUTION (RDI)
Trading throughout the period was exceptionally
difficult. In common with many other European
distribution companies, RDI’s business was
adversely affected by the downturn in the IT,
electronics and telecoms sectors, whilst sales to
automotive customers were affected by pricing
pressures. Last autumn a reorganisation of the
Group’s automotive and distribution activities
took place, which transferred those activities not
related to third party component distribution to
other parts of the Group and focussed RDI on
its core activity. RDI has been slimmed down to
43 staff and is now positioned to benefit from
the upturn in the market whilst minimising its
cash exposure in the interim.
Consumer vehicle ratings and safety awareness 
remain the drivers for our Safety & Analysis business.
The Division had a record year with US Dollar sales 
up 24%.
Chief Executive’s Review 12
Our chosen operating fields of safety and the
environment and our technology base of
sensing are recognised as long term growth
areas. We enjoy market leading positions in
niche areas, with much of our business
underpinned by our presence in regulated
and legislated markets. These factors,
combined with our intellectual property
portfolio, manufacturing process knowledge,
strategic partnerships and a management
philosophy of cost control, ensure we
maintain healthy margins and strong cash
generation. The Group is well placed to take
advantage of acquisition opportunities that
fit with its established strategy, as we continue
to build a world-class sensing business.
First Tech r/a 2003 a/w  7/24/03  11:01 AM  Page 18 First Technology 2003
IN CONCLUSION
I am pleased to join First Technology at this
stage of the Company’s evolution. Fred Westlake
has led the Company for almost 20 years of
profitable growth and I take this opportunity to
thank him on behalf of the shareholders and
employees for making the Company what it is
today and on behalf of Fred, I thank them for
the support they have given him and their
continued commitment. It is my intention to
continue to build on this legacy through
strategic investment in quality acquisitions and
advanced technologies to create the high quality
products our customers demand. This is still the
key to delivering consistently high returns to our
shareholders and fuelling the future growth of
the Group.
John Shepherd
Chief Executive 
We take pride in our standards of quality
control and product inspection: an employee
at FTSS’ Plymouth, Michigan facility reviews
the checklist on a Hybrid III 5th (percentile)
female dummy prior to final assembly and
shipment to the customer.
13
First Tech r/a 2003 a/w  7/24/03  11:02 AM  Page 19 First Technology 2003
Group Performance
Total Group turnover of £127.6 million was 
7% lower than the prior year figure of £137.0
million. Of this £9.4 million decline, £4.1
million is due to adverse currency translation.
Gas Sensing turnover grew by 5% but, because
almost half of this segment’s revenues is made in
US Dollars, the Sterling value of these revenues
was adversely affected by the weakness in the US
Dollar relative to Sterling. Within Other
Manufacturing, sales of crash dummies and
related products grew strongly in local currency,
especially in the second half of the year.
However, last year’s turnover for Other
Manufacturing included £5.5 million of
turnover for two product lines that have been
discontinued during the year and for which sales
of only £0.9 million were recorded in the
current year. Sales of the mature fuel cut off
product also fell by £2.7 million, in line with
expectations. Component Distribution turnover
fell by 16% (22% in local currency), which
reflects the very poor trading conditions in the
telecom and electronics sectors in France.
Gross profit fell by £2.6 million to £52.1
million, although the gross margin grew to
40.8% of turnover (2002: 39.9%). Operating
expenses before goodwill and exceptional costs
increased by 4% to £25.6 million (2002: £24.6
million). Within operating expenses, gains from
foreign exchange transactions were £0.7 million
lower in the period compared to last year, whilst
the Group benefited from a number of small
non-recurring items in the prior year which
reduced 2002 costs. Despite the difficult trading
environment in which we are currently
operating, the Board believes that it is vital to
continue to invest in new product development.
We have therefore continued to spend over 6%
of turnover on R&D activities and a number of
the current projects are discussed further in the
Chief Executive’s Review.
During the first half year, the Group announced
that it was ceasing manufacturing activities at
the Farnborough site and reorganising the
operations of RDI in Paris. This has involved
the transfer of all European logistics for the
Automotive and Special Products division from
Paris to Farnborough. These actions were
successfully completed during the second half
year. Due to the continuing poor trading of 
the Component Distribution business it was
decided to make further cost reductions in Paris
in the second half. The total exceptional charge
for all of these actions was £1.5 million before
tax. The Group expects to achieve annualised
savings of at least this amount in future years. 
Excluding the exceptional costs and goodwill
items, the Group operating profit fell by 12% to
£26.5 million (2002: £30.1 million). Of this
£3.6 million decline, £1.1 million is due to
adverse currency translation and a further £0.7
million was due to lower gains on foreign
exchange transactions. The operating margin
was 20.8% (2002: 22.0%).
Financial Review 14
Oliver Burns
Finance Director
Operating margin* 
%
99 00 01 02 03
22.3
19.4
22.2 22.0
20.8
*Before exceptional
reorganisation and
integration costs and
goodwill items.
First Tech r/a 2003 a/w  7/24/03  11:02 AM  Page 20 First Technology 2003
Profit before tax (PBT) fell to £10.4 million
(2002: £19.7million), due to lower turnover,
increased exceptional items of £1.5 million
(2002: £0.3 million) and the goodwill
impairment charge of £4.9 million (2002: £nil).
PBT, excluding exceptional costs and goodwill
items, fell by 11% to £25.5 million (2002:
£28.7 million). Interest expenses of £1.0 million
(2002: £1.4 million) arose primarily on the
balance of borrowings made to finance
acquisitions in previous years. Interest expenses
include the amortisation of up-front facility fees,
commitment fees on the undrawn portion of the
bank facilities and a charge for the fair valuation
of an interest rate swap. The interest charge was
covered more than 11 times or, excluding non-
cash goodwill items, more than 25 times.
Tax
The tax charge for the year was 19.5% of profit
before tax and goodwill items (2002: 21.1%).
No tax relief is available on the amortisation of
goodwill. The current year charge includes a
credit of £0.4 million (2002: £1.0 million)
related to prior year items. The underlying tax
rate (i.e. excluding the prior year credit) has
been reduced to 21.2% (2002: 24.6%). The
Group continues to benefit from its operations
in lower tax environments and an efficient
corporate structure. 
Earnings Per Share (EPS) and Dividends
Basic EPS for the year were 7.6p per share
(2002: 18.2p). The basic EPS figure includes
non-cash losses of 11.5p per share (2002: 11.5p)
related to goodwill amortisation, 6.5p per share
(2002: nil) related to goodwill impairment and a
loss of 1.6p per share (2001: 0.3p) related to
exceptional costs, net of tax credit. Our preferred
measure of ‘Headline EPS’ (i.e. excluding goodwill
items and exceptional costs, net of tax credit) fell
by 9.3% to 27.2p per share (2002: 30.0p). 
The Board is recommending a final dividend 
of 6.1p per share (2002: 5.8p), an increase of
5% which, together with the interim dividend
already paid of 3.4p per share (2002: 3.2p), will
make a total dividend for the year of 9.5p per
share (2002: 9.0p), if approved. The dividend is
covered 2.8 times by headline earnings (2002:
3.3 times). 
Goodwill Impairment
In accordance with UK Accounting Standard
FRS 11, Impairment of Fixed Assets and
Goodwill, the directors have reviewed the
carrying value of goodwill on the consolidated
balance sheet.
Given the operating performance of the
Component Distribution business in the current
year and that the directors do not consider it
likely that this business will show any significant
improvement within the medium term, it 
has been decided to write down fully the
unamortised goodwill attributed to this business
on acquisition, totalling £0.9 million.
The directors have also reviewed the solid state
gas sensor products acquired with the purchase
of Capteur Sensors and Analysers Ltd., three
years ago. The development of the market for
this product range has taken longer than
expected. The directors believe that there are
good prospects for solid state products in the
future. However, the volumes and timing of
these revenues are less predictable in current
circumstances and, therefore, the value of the
unamortised portion of goodwill that arose on
the acquisition has been reduced by 50%
(equivalent to £4 million).
A final dividend of 6.1p per share brings the total dividend for the year
to 9.5p per share – up 5.6% on last year and equal to a yield of 4.3%
based on the share price as at the year end.
15
Turnover by destination
North America - 49%
Europe - 41%
Other - 10%
Turnover by origin
Europe - 50%
North America - 46%
Japan - 4%
First Tech r/a 2003 a/w  7/24/03  11:02 AM  Page 21 First Technology 2003
Balance Sheet
Net assets fell by £2.7 million to £160.7 million
(2002: £163.4 million), including goodwill of
£138.3 million (2002: £151.9 million). The
effect of translation rates on net assets was
negligible because foreign currency borrowings
effectively hedged overseas net assets. Working
capital, (excluding corporate income taxes and
items related to deferred consideration), was
reduced by more than £2 million to £17.5
million and the ratio of working capital to
annualised turnover improved to 13.7% from
14.4%. Overall return on capital employed 
(as measured by PBT before goodwill and
exceptional items as a percentage of net tangible
assets) exceeded 100%. At the balance sheet
date, the Group had net cash of £0.1 million
(2002 net debt: £12.3 million).
Pension Accounting
The Group adopted FRS 17 last year. The
decline in market values of equities and falling
investment returns over the recent past have
resulted in deficits arising on both of the
Group’s defined benefit schemes, but the
movement in the deficit arising from actuarial
losses is now reflected in the Statement of Total
Recognised Gains and Losses, rather than
distorting the underlying operating performance
of the Group. The deficit on the value of the
defined benefit schemes’ assets compared to
their liabilities has increased during the year by
£1.0 million to a figure of £2.9 million, before
the associated deferred tax credit.
Cash Flow
The Group generated £29.8 million (2002:
£34.6 million) of net cash inflow from operating
activities. Capital investment, excluding the cost
of acquisitions, was £5.1 million (2002: £4.1
million). The current year figure includes a trade
investment of £0.5 million. Cash outflows on
acquisitions totalled £1.7 million (2001: £4.0
million), all of which comprised deferred
payments related to previous years’ acquisitions.
Other cash demands included dividends of £6.9
million (2002: £6.5 million) and corporate taxes
of £4.3 million (2002: £3.3 million).
Management of Financial Risk
Funding, interest rate, foreign currency and
credit risks are the financial risks faced by the
Group. The Group operates a central Treasury
activity, responsible for all debt and liquidity
management, interest rate and foreign exchange
requirements. Treasury activity is the
responsibility of the Finance Director. Treasury
is not a profit-centre and does not undertake
speculative financial transactions or utilise off
balance sheet financing vehicles. The Group
enters into derivative transactions, primarily
forward foreign exchange contracts. The purpose
of these is to manage the currency risk as
described below. The use of derivative financial
instruments other than forward foreign
exchange contracts is prohibited without the
prior approval of the Group Finance Director.
Funding Risk
The Group’s financial instruments, other than
derivatives, comprise cash, revolving bank lines
and some uncommitted short term overdraft
facilities, as well as various items such as trade
debtors and trade creditors that arise directly
from its operations. The bank facilities available
to the Group at 30th April 2003 comprise a $59
million multi-currency revolving credit facility,
which is unsecured and repayable on 30th April
2004. At 30th April 2003, the Group had
undrawn committed multi-currency facilities of
£33.3 million (2002: £31.5 million).
Capital expenditure
(£’m)
Financial Review 16
2.2
4.3
4.8
4.1
5.1
99 00 01 02 03
Working Capital /
Annualised Sales
WC/Sales %
Working 
Capital £’m
20.3
21.0
19.8
17.5
00 01 02 03
14.8%
12.5
99
11.9%
14.3% 14.4%
13.7%
Cash inflow from
operating activities
(£’m)
16.5
20.3
36.9
34.6
29.8
99 00 01 02 03
First Tech r/a 2003 a/w  7/24/03  11:02 AM  Page 22 37.1
28.3
12.3
-0.1
00 01 02 03
25.8%
16.5
99
22.0%
17.8%
7.5%
First Technology 2003
Interest Rate Risk
The Group uses interest rate swaps to hedge its
exposure to borrowings at variable rates. A rise
in interest rates of 1% would reduce the Group’s
profit before tax by approximately £0.1 million
or 1%. The currency and interest rate profile of
the Group’s financial assets and liabilities,
excluding short term debtors and creditors, at
30th April 2003 are shown in note 24 to the
financial statements. 
Foreign Currency Risk
The Group’s foreign currency exposure
management policy requires subsidiaries to
hedge transactional currency exposures back into
the currency in which their results are measured.
Forward foreign exchange contracts are used to
hedge selected future exposures which may
either be contracted or uncontracted. Gains or
losses on these contracts are deferred until
recognition of the transaction concerned.
The Group’s accounting policy is to translate
profits of overseas operations using average
exchange rates. It is the Group’s policy not to
hedge these exposures arising on translation.
Net assets are held in a number of currencies and
are translated at year end rates. The resulting
exposures are mitigated by currency borrowings.
The Group’s currency exposures (i.e. those
transactional exposures that give rise to net
currency gains and losses recognised in the profit
and loss account) are shown in note 24 to the
financial statements. Such exposures comprise
the monetary assets and liabilities of the Group
that are not denominated in the functional
currency of the operating unit involved, other
than certain non-sterling borrowings treated as
hedges of net investments in overseas operations.
Fair Values of Financial Assets and Liabilities
There is no material difference between the fair
value and book value of the Group’s financial
assets and liabilities.
Summary
Over the past few years, First Technology has
considerably broadened its product offerings
through investment in both organic growth and
carefully targeted acquisitions. As a result, the
Group has been able to withstand the current
period of economic uncertainty and the
maturing of some of our older products. The
Group has been a consistent generator of cash;
over the past three years, the Group has invested
£24 million in R&D for its product range as
well as paying over £19 million to shareholders
in the form of dividends. Over the same period,
net debt of £37 million has been extinguished.
Consequently, First Technology has a firm
financial basis on which to face future challenges
and to deliver growth in shareholder value. 
Oliver Burns 
Finance Director
Another year of strong cash generation has allowed 
the Group to eliminate net debt brought forward of
£12.3 million and to end the year net cash positive.
17
Dividends paid and
proposed (£’m)
3.2
5.0
6.5
6.8
7.2
99 00 01 02 03
Net Debt/Gearing
(£’m)
Foreign exchange/Sterling exchange rates
Average rates Closing rates
FY03 FY02 FY03 FY02
US $ 1.55 1.43 1.60 1.46
Jap Yen 188 181 191 187
Euro 1.54 1.63 1.43 1.62
Gearing %
Net Debt/
Cash £’m
First Tech r/a 2003 a/w  7/24/03  11:02 AM  Page 23 Directors and Advisers 18
Chairman
Frederick J Westlake (60)
Appointed Chairman in March 2003, 
Dr. Westlake had previously been Executive
Chairman of the Group since its flotation in
1985. His career has spanned industry and
academia, including spells with the British Steel
Corporation, Thorne EMI and NASA. He is
Chairman of the Nominations Committee.
Executive Directors
John Shepherd (49)
Chief Executive of the Group, appointed to 
the Board on 10th March 2003. An electronic
engineering graduate, he joined First Technology
from Smiths Group plc, where he held a number
of senior management posts. Prior to joining
Smiths, he worked for British Aerospace from
1975 to 1990.
Kevin D Breen (48)
Chief Executive of Gas Sensing and appointed to
the Board in April 2000. A physics graduate with
a subsequent MBA, he joined City Technology as
its Chief Executive in 1997 from Halma Group,
where he held a number of senior management
positions.
Oliver G Burns (47)
Finance Director, appointed to the Board in
November 1997. Prior to his appointment, 
Mr Burns held senior financial positions with
Bunzl plc and BET plc.
Jeff G Wood (47)
Chief Operating Officer since May 2002, having
previously been President of Automotive and
Special Products. Appointed to the Board in
September 2000. He joined the Group when
CDI was acquired by First Technology in 1999,
after 18 years of service at CDI and its
predecessor GTE Sylvania. 
Non-Executive Directors
Bruce D Atkinson (62)
Appointed to the Board in July 1999, he was
Group Chief Operating Officer until his
retirement from executive duties on 7th May
2002. Previously President of CDI, a company
which he served for over 40 years. He is a
member of the Remuneration Committee.
Patrick Burgess (58)
Appointed in May 1997. Currently he is a senior
partner of the London firm of solicitors, Jones
Day Gouldens, and is also a non-executive
director of London Forfaiting plc and Liberty
International plc. He is the senior Non-Executive
Director, Chairman of the Audit, Remuneration
and Risk Committees and a member of the
Nominations Committee.
John J Salmon (66)
Appointed in January 2002. Joint founder of
Druck Holdings PLC, Chairman and Chief
Executive from 1982 to 2002, Mr Salmon has
many years of experience in the field of sensor
technology. He is a member of the Audit,
Nominations, Remuneration and Risk
Committees. 
Ralph R Whitney Jr. (68)
Appointed in July 1999, previously Chairman 
of CDI. Currently Chairman of Hammond,
Kennedy, Whitney and Company Inc. a private
equity capital firm headquartered in New York,
he is also a director of other US public
corporations. He is a member of the Audit,
Nominations, Remuneration and Risk
Committees. 
Advisers
Auditors
Deloitte & Touche
Bankers
HSBC Plc
Bank One, NA
Royal Bank of Scotland Plc
Registrars and transfer office
Lloyds TSB Registrars
The Causeway
Worthing
West Sussex
BN99 6DA
Solicitors
Nabarro Nathanson
Stockbrokers and financial advisers
UBS Investment Bank
Secretary
N W H Clayton
Registered office
2 Columbus Drive
Summit Avenue
Southwood
Farnborough
Hampshire
GU14 0NZ
Registered number
1882393
Website
www.firsttech.co.uk
First Technology 2003
First Tech r/a 2003 a/w  7/24/03  11:02 AM  Page 24 First Technology 2003
19 Board of Directors
Frederick J Westlake
Chairman
John Shepherd
Chief Executive 
Bruce D Atkinson
Non-Executive Director
Jeff G Wood
Chief Operating Officer 
Patrick Burgess
Senior Non-Executive Director
Oliver G Burns
Finance Director
John J Salmon
Non-Executive Director
Kevin D Breen
Chief Executive of Gas Sensing
Ralph R Whitney Jr.
Non-Executive Director
First Tech r/a 2003 a/w  7/24/03  11:02 AM  Page 25 20
First Technology 2003
Index to Section Two
Contents
21 Directors’ Report 
23 Corporate Governance Report
25 Social, Ethical and Environmental Report
27 Remuneration Report 
31 Independent Auditors’ Report 
32 Group Profit and Loss Account 
33 Balance Sheets 
34 Group Cash Flow Statement 
35 Principal Accounting Policies 
37 Notes to the Accounts 
56 Composition of the Group 
57 Notice of Meeting 
59 Five Year Financial Summary 
60 Group Addresses 
61 Financial Calendar 
First Tech a/c 2003 a/w  7/24/03  10:48 AM  Page 20 First Technology 2003
21
The directors have pleasure in submitting their report together with the
financial statements of the Company and the Group for the year ended
30th April 2003.
Principal activities and business review
The Group is a global multi-technology sensing and analysis business with
strong roots in personal safety and comfort. The subsidiary undertakings
principally affecting the profits or net assets of the Group in the year are
detailed on page 56.  
A review of operations during the year and of likely future developments in
the principal trading operations of the Group is given in the Chairman’s
Statement on pages 2 to 3 and in the Chief Executive’s Review on pages 4
to 13. A Financial Review is given on pages 14 to 17. 
Results for the year and dividends
The consolidated profit and loss account for the year ended 30th April
2003 is set out on page 32. The Group’s profit on ordinary activities for
the year before taxation amounted to £10.4m (2002: £19.7m).
The directors recommend a final dividend of 6.1p per share (2002: 5.8p)
making a total for the year of 9.5p per share (2002: 9.0p). The dividend is
payable on 7th October 2003 to shareholders on the register on 5th
September 2003 subject to shareholder approval at the Annual General
Meeting.
Directors
The directors who held office during the year were as follows:
B D Atkinson
K D Breen
D P H Burgess 
O G Burns
J J Salmon
J Shepherd (appointed 10th March 2003)
Dr F J Westlake
R R Whitney Jr.
J G Wood
Biographical details of all directors are set out on page 18.
Election of directors
In accordance with the Articles of Association, K D Breen and 
D P H Burgess, who are subject to retirement by rotation, retire at 
the Annual General Meeting and, being eligible, offer themselves for 
re-election. J Shepherd, having been appointed during the year, retires at
this year’s Annual General Meeting and offers himself for election in
accordance with the Articles of Association.
K D Breen has a service contract with the Company, which includes a
twelve month notice period. J Shepherd’s service contract with the
Company includes a twelve month notice period and also a change of
control clause. In the event of a change of control of the Company, 
J Shepherd is entitled to receive a lump sum payment equivalent to two
times his basic gross annual salary, reducing to one and a half times on
10th March 2004. There is no change of control provision after 10th
March 2005. D P H Burgess does not have a service contract with the
Company or any of its subsidiaries; as a Non-Executive Director, he has a
letter of appointment from the Company.
Directors’ interests
The directors’ interests in the ordinary shares of the Company were as
follows:
30th April 30th April
2003 2002
Number Number
Beneficial
B D Atkinson 122,073 122,073
O G Burns 3,100 3,100
J J Salmon 5,000 –
Dr F J Westlake 90,891 75,891
R R Whitney Jr. 121,877 121,877
J G Wood 87,715 77,715
On 27th June 2003 D P H Burgess purchased 7,500 ordinary shares.
There were no other changes in directors’ interests between 1st May 2003
and 11th July 2003. Details of directors’ share options are shown on 
page 30.
None of the directors had any interest in the shares of any other Group
company at any time during the year.
No director had a beneficial interest in any contract, other than service
contracts or letters of appointment, to which the Company or any of its
subsidiaries were party during the year.
Substantial shareholdings
On 11th July 2003, the Company had been notified, in accordance with
sections 198 to 208 of the Companies Act 1985, of the following interests
in its issued ordinary share capital:
Number % Holding
Fidelity International Limited 6,094,978 8.1%
Aviva plc 5,841,881 7.8%
Threadneedle Asset Management Limited 2,833,763 3.8%
Legal and General Group Plc 2,727,036 3.6%
Prudential plc 2,373,562 3.2%
Save for these interests, the directors have not been notified that any
person is directly or indirectly interested in 3% or more of the issued
ordinary share capital of the Company.
Employees
The Group places considerable value on the awareness and involvement 
of its employees in the Group’s performance. Within the bounds of
commercial confidentiality, information is disseminated to all levels of staff
about matters that affect the progress of the Group and are of interest and
concern to them as employees.  
The Save As You Earn Scheme is open to all UK employees of the Group
following a qualifying period and has been operating since 1994.
Directors’ Report
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First Technology 2003
The Group is committed to an active Equal Opportunities Policy.  It is our
policy to promote an environment free from discrimination, harassment
and victimisation, where everyone will receive equal treatment regardless of
gender, colour, ethnic or national origin, disability, age, marital status,
sexual orientation or religion. We apply employment practices which are
fair, equitable and consistent with the skills and abilities of our employees
and the needs of the business.
It is the Group’s policy to employ disabled persons wherever practicable
and to provide equal opportunity for training, career development and
promotion. The Group endeavours to offer suitable alternative
employment to any employee who, because of disablement, is unable to
carry on his or her present work. For further information on the Group’s
social and ethical policies, refer to the Social, Ethical and Environmental
Report on pages 25 to 26.
Suppliers
The Company’s policy is to pay suppliers in accordance with terms agreed
with them. Where no specific terms have been agreed, the Group’s policy is
to pay suppliers generally at the end of the month following that in which
the supplier’s invoice is received. This policy is made known to the staff,
who handle payments to suppliers and is made known to suppliers on
request. For the Group, trade creditors at 30th April 2003 represent 47
days’ purchases (2002: 43 days’ purchases). The Company itself does not
trade and hence no calculation is possible.
Donations
The Group made charitable donations of £19,600 (2002: £13,000) during
the year. No political donations were made (2002: £nil).
Annual General Meeting
The notice of meeting for the 2003 Annual General Meeting is set out on
pages 57 and 58.
Renewal of authority to allot shares: At the Annual General Meeting an
ordinary resolution (Resolution 9) will be proposed to renew the directors’
authority to allot relevant securities up to an aggregate nominal amount of
£2,511,659 (representing approximately 33% of the present issued share
capital), which authority will expire on 17th September 2008. A special
resolution (Resolution 10) will be proposed to renew the directors’
authority to allot shares in connection with a rights issue or in connection
with an issue for cash up to an aggregate nominal amount of £376,748
(being approximately 5% of the present issued share capital). There are no
present plans to allot shares other than in connection with the Group’s
employee share schemes.
Authority to make market purchases of its own ordinary shares: At the
Annual General Meeting a special resolution (Resolution 11) will be
proposed to renew the directors’ authority to make market purchases of up
to 10% of the Company’s present issued share capital. The authority is
exercisable with a minimum price of 10p per share and a maximum price
which will not be more than 105% of the average middle market
quotation for an ordinary share as derived from the London Stock
Exchange Daily Official List for the five business days preceding the day of
purchase. The directors have no present plans to use this power, but would
exercise the power if they were satisfied that it was in the best interests of
shareholders generally to do so, and that any purchase would be likely to
result in an increase in earnings per share.
Auditors
Deloitte & Touche have expressed their willingness to continue in office as
auditors of the Company.  On 1st August 2003 Deloitte & Touche will
transfer their entire business to Deloitte & Touche LLP , a limited liability
partnership formed pursuant to the Limited Liability Partnerships Act
2000. The Company has given its consent to treating the appointment of
Deloitte & Touche as extending to Deloitte & Touche LLP with effect
from 1st August 2003. Accordingly, although the accounts were signed in
the name of Deloitte & Touche, in accordance with Section 385 of the
Companies Act 1985, a resolution to reappoint Deloitte & Touche LLP
and to authorise the directors to fix their remuneration will be proposed at
the Annual General Meeting.
This report was approved by the Board on 22nd July 2003.
NWH Clayton
Secretary
Directors’ Report
First Tech a/c 2003 a/w  7/24/03  10:48 AM  Page 22 23
First Technology 2003
The Company recognises the importance of, and is committed to, high
standards of Corporate Governance. This statement explains how the
Company has applied the Principles of Good Governance set out in
Section 1 of the Combined Code and complies with the Code of Best
Practice.
The Board
During the year the Board was chaired by Dr Fred Westlake as Chairman,
with Jeff Wood as Chief Operating Officer, Oliver Burns as Group Finance
Director and Kevin Breen as Chief Executive of City Technology. John
Shepherd joined the Group on 10th March 2003 as Chief Executive
Officer (CEO). 
There are three independent non-executive directors: Patrick Burgess, 
John Salmon and Ralph R Whitney Jr. On the basis of criteria currently
being applied, Bruce Atkinson is not considered by the Board to be an
independent non-executive director. All the non-executive directors make 
a significant contribution to the functioning of the Board and its
committees, and no one individual or group dominates the Board’s
decision-making process. Patrick Burgess is recognised as the senior
independent non-executive director to whom any concerns can be
conveyed. 
All directors are required to submit themselves for re-election at least every
three years. The names of those directors standing for re-election to the
Board this year are set out in the Notice of the forthcoming Annual
General Meeting on pages 57 and 58. Biographical details of all directors
are set out on page 18.
The Board’s focus is on the formulation of business strategy and policy,
and on control. The Board has adopted a formal schedule of matters which
are required to be brought to it for decision, review and follow-up, thus
ensuring that it maintains full and effective control over appropriate
strategic, financial, organisational and compliance issues. In addition,
detailed reports are provided to the Board by each of the executive
directors on a monthly basis to enable the Board to discharge its duties.
The Chairman is primarily responsible for the working of the Board, and
the CEO for the running of the business and implementation of Board
strategy and policy. The Board meets formally eight times a year with other
meetings as necessary. All directors have access to the advice and services of
the Company Secretary, and there is a procedure whereby directors,
wishing to do so in the furtherance of their duties, may take independent
professional advice and training at the Company’s expense.
Principal Board Committees
The Board has established several Committees, each with specific terms of
reference. The principal ones are:
•Audit Committee 
Comprises the three independent non-executive directors. It met three
times during the year. The Group Finance Director and external audit
partner attended all meetings. The duties of the Audit Committee
include the review of the half year and annual financial statements
before submission to the Board. It also considers the scope and results
of the external audit and its cost effectiveness, and the independence
and objectivity of the external auditors. The Committee annually
reviews and reports to the Board on whether an Internal Audit
department is required having regard to the size and nature of the
Group. 
• Risk Committee 
The role of the Committee is to review and monitor the systems of
internal control, health & safety, insurance and risk management. It
comprises the three independent non-executive directors. The non-
executive directors in turn liaise with the members of the executive
team to ensure they have a full understanding of the issues. The
Committee’s role is to promote and to embed the culture of risk
management into existing management processes. The non-executive
directors review all Group risks and assess the adequacy of insurance
cover accordingly. The Committee meets at least twice a year.
•Remuneration Committee
Comprises all non-executive directors and, from 10th March 2003, the
Chairman. The CEO attends the Remuneration Committee meetings.
The Chairman and CEO are not present when their own
remuneration is being considered. The Committee meets at least three
times a year and is responsible for reviewing and recommending all
elements of executive directors’ remuneration.
Full details of directors’ remuneration and a statement of the
Company’s policy on executive directors’ remuneration are set out in
the Remuneration Report on pages 27 to 30.
•Nominations Committee
During the year a separate Nominations Committee was established.
The role of the Committee is to identify, evaluate and recommend
candidates for appointment and reappointment to the Board. The
Committee is also responsible for reviewing and evaluating the
performance of the executive directors. The Committee comprises the
Chairman and the three independent non-executive directors.
Patrick Burgess is Chairman of the Audit, Risk and Remuneration
Committees and Dr Fred Westlake chairs the Nominations Committee.
The Committee Chairmen report to the Board after each meeting. The
remits of each Committee are reconsidered annually by the relevant
Committee and the Board.
Corporate Governance Report
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First Technology 2003
Relations with shareholders
The Company values its dialogue with both institutional and private
investors. Two-way communication with institutional investors, analysts
and private investors is actively pursued, and a series of presentations and
meetings are held throughout the year and following the announcement of
interim and preliminary results. All announcements can be accessed from
the Company’s website as soon as practical after they have been released to
the London Stock Exchange, to ensure information is available to all
shareholders.
This year’s Annual General Meeting will be held on the 18th September
2003 at which time the Chairmen of the principal Board committees will
be available to answer shareholders’ questions. The Company will continue
its practice of proposing individual resolutions, including a separate
resolution relating to the directors’ report and financial statements. This
year, the directors will also propose a separate resolution relating to the
remuneration report. Proxy votes will be displayed at the Annual General
Meeting after each vote on a show of hands.
Statement of directors’ responsibilities
United Kingdom company law requires the directors to prepare financial
statements for each financial year which give a true and fair view of the
state of affairs of the Company and the Group and of the profit of the
Group for that year.
After making due enquiries, the directors are satisfied that the Company
and the Group have adequate resources to continue in business for the
foreseeable future. For this reason, they continue to adopt the going
concern basis in preparing the financial statements.
In preparing the financial statements, the directors are required to: 
• select suitable accounting policies and then apply them consistently; 
• make judgements and estimates that are reasonable and prudent; 
• state whether applicable accounting standards have been followed,
subject to any material departures disclosed and explained in the
financial statements. 
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Company and the Group and enable them to ensure that the financial
statements comply with the Companies Act 1985. They are also
responsible for safeguarding the assets of the Company and the Group and
for taking reasonable steps for the prevention and detection of fraud and
other irregularities.
The Board of directors has overall responsibility for ensuring that the
Group maintains a system of internal control to provide it with reasonable
assurance regarding effective and efficient operations, internal financial
control and compliance with laws and regulations. There are inherent
limitations in any system of internal control and, accordingly, even the
most effective system can provide only reasonable, and not absolute,
assurance against material misstatement or loss.
The key features of the internal control system that operated throughout
the year covered by the financial statements are described under the
following headings:
Control environment
The Board has in place an organisational structure with clearly defined and
understood lines of responsibility and delegation of authority from the
Board to operating units. A formal manual of Group Policies and
Procedures is in place and is reviewed and updated (via the Risk
Committee) at least annually.
Identification and evaluation of business risks and control procedures
The Board has the primary responsibility for identifying the major business
risks facing the company and developing the appropriate policies to
manage those risks. The Company operates a business risk management
process to enable the Board to identify and evaluate key business risks. The
Board continues to formulate policies to address those risks. 
Financial control and information systems
The Group operates a planning and budgeting system with an annual
budget approved by the Board. There is a financial reporting system which
compares results with the budget, the previous year and an 18 month
forecast on a monthly basis so as to identify any variances from approved
plans. Financial reviews of the major operating units are undertaken
regularly. Revised forecasts for the year are formally prepared twice a year.
In addition, there are defined procedures for seeking and obtaining
approval for major contracts, capital expenditure and organisational
changes, as well as regular reviews of the major business risks.
Monitoring
The Board has delegated to executive management implementation of the
system of internal control procedures. Executive management is responsible
for a system of self certification to identify, track and report on all key
business risks. The operation of internal controls is monitored by the Risk
Committee, which reports to the Board. Internal reviews take place to
ensure that the group policies and procedures are adhered to and to review
the effectiveness of controls in place. The results of these reviews are
reported to the Risk Committee. 
The process for identifying, evaluating and managing the significant risks
faced by the Group has been in place for the year under review and up to
the date of approval of the Annual Report and Accounts and has been
regularly reviewed by the Board and accords with the Turnbull Guidance.
In accordance with the Smith Report, the Board has also reviewed the
requirement for a formal internal audit function. This review concluded
that there was no requirement for a formal internal audit function.
The Board has reviewed the effectiveness of the Group’s systems of internal
control during the year.
Compliance with the Combined Code
Throughout the year ended 30th April 2003, the Company was in
compliance with the Code provisions set out in Section 1 of the Combined
Code on Corporate Governance issued by the Financial Services Authority,
except that the Remuneration Committee did not consist exclusively of
independent non-executives as required by provision B2.2 of the Code.
Bruce Atkinson, who is not considered by the Board to be independent, is
a member of the Remuneration Committee in view of his knowledge of
the Group’s senior operational management.
Corporate Governance Report
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First Technology 2003
Social, Ethical and Environmental Report
Responsibility for developing overall policy on social, ethical and
environmental matters and for reviewing its effectiveness lies with the
Board. It is then the responsibility of the operating units, through the
Chief Operating Officer, to communicate and apply that policy within
their particular business, taking account of local legislation and regulations,
and to maintain, review and refine procedures accordingly. The Risk
Committee monitors the position regularly.
Each business unit is required to confirm annually, in writing, its
compliance with group policy. There is, in addition, an ongoing process for
identifying, evaluating and managing any significant risks, including those
arising from social, ethical and environmental matters. This process forms
part of the Group’s system of internal controls and is carried out within
each operating business with regular review by the divisional directors as
well as by the Risk Committee and the Audit Committee. The executive
directors report to the Board on any changes in the business and external
environment which present significant risk.
First Technology PLC was designated a member of the FTSE4Good UK
Index of socially responsible companies when the FTSE4Good Index Series
was established in July 2001.
Environment
It is the Group’s policy to be an industry leader in environmental
protection. We believe that sound environmental policy contributes to our
competitive strength and benefits our customers, shareholders, and
employees by contributing to our overall well-being and economic health.
We are committed to being responsible citizens in the communities in
which we operate, and intend to work closely with regulators and
community based environmental groups.
We will:
• strive to ensure compliance with environmental laws and regulations
which apply to the Company and its subsidiaries; 
• work continually to improve the effectiveness of our environmental
management;
• seek to prevent pollution before it is produced and to reduce the
amount of waste at our facilities;
• seek to minimise the environmental impact of our products during use
and disposal;
•provide appropriate environmental training and educate employees to
be environmentally responsible;
•provide employee and community protection through industrial
hygiene and facility emission surveillance;
• ensure chemicals and processes used or proposed for use within our
operations comply with environmental regulations;
•re-use and re-cycle whenever possible;
• communicate this policy to all employees;
• monitor our environmental performance regularly through the setting
and reviewing of environmental objectives and targets.
Most of our products do not require capital-intensive manufacturing
processes and their manufacture generally has a low overall environmental
impact. However, the Group is committed to improving its environmental
performance and any commercially viable actions to minimise the impact
on the environment are taken.
The Company has specified recycled paper for the production of this
Annual Report. Section One of the report is printed on Mega Matt which
is made from 50% recycled and 50% chlorine-free pulp. Section Two is
printed on Arcoprint which is acid-free, low in chlorine content,
completely bio-degradable and recyclable.
During the year, seven of our major operating sites obtained ISO 14001
certification for Environmental Management Systems. All of the Group’s
principal operating sites now carry this accreditation.
Heath and Safety
The Group’s policy ensures that, so far as is reasonably practicable, every
step is taken to ensure the health and safety at work of all group
employees. Operating management is required to do everything reasonably
practicable to provide and maintain plant and equipment and a working
environment which are safe and minimise the risk to health. There is a
similar responsibility insofar as the use and transport of articles and
substances is concerned.
The Group’s Health and Safety policy requires that:
• all information, instruction, training and supervision necessary to
ensure the health and safety at work of all employees is provided;
• the necessary organisation and line of responsibility for health and
safety is established and maintained;
• the necessary safety devices and protective clothing are available;
• the co-operation of all employees is encouraged by discussions and
consultation with them and their representatives with a view to
promoting and developing measures to ensure health and safety at
work;
• the effectiveness of such measures is checked on a regular basis.
All companies within the Group (and where appropriate, each location)
issue and bring to the notice of their employees a written statement of
their policy with respect to health and safety at work. Audits of health and
safety policies and procedures are undertaken at all major locations by
external or internal assessors on a periodic basis.
The Company expects that in those countries where lower standards are
generally enforced, officers and employees will nevertheless observe and
comply with the high standards set by the Company.
First Tech a/c 2003 a/w  7/24/03  10:48 AM  Page 25 26
First Technology 2003
Social, Ethical and Environmental Report
Social and Ethical Policy
Our businesses operate mainly in Western Europe, the US and the
Dominican Republic. We have contractual relationships with suppliers and
customers in many other parts of the world as well.  Inevitably, different
social and employment conditions exist in different operations, but First
Technology places the highest priority on compliance with legislative and
ethical requirements within all jurisdictions in which business is
conducted. The responsibility for implementing the policy is delegated to
individual business units, with operational policies tailored to suit local
needs.  
The Group’s policy requires all operating companies to conform to the
following requirements:
• adherence to all legislation relating to employment rights and equal
opportunities, with particular reference to ethnic origin, religion,
gender, age, disability, sexual orientation and harassment;
•a Code of Conduct which sets out the framework within which
employees are expected to observe high standards of business ethics in
dealings with the company, its customers, its suppliers, and other
business and personal contacts; 
• purchase of legal title or licence to all software in use;
• compliance with all export control regulations.
In addition, the Group has specific policies relating to child labour which
prevent workers under the school-leaving age of the country of
employment from being employed in First Technology operations. Other
policies exist in relation to working time regulations and data protection.
The Group recognises the value of consultation with employees and Works
Councils represent employees in those areas where these are applicable.
The Group monitors compliance with the policy through various
processes.
The Group recognises the importance of attracting, motivating and
retaining personnel of the highest calibre across all levels. Remuneration
policies are designed to reward achievement and the Group is committed
to providing appropriate employee training and development. Local
policies, based on overall Group guidelines, are set by individual
managements according to the needs of their business and local conditions.
First Technology operating companies worldwide support and participate
in various local community activities. Charitable donations in 2003
totalled £19,600 (£3,000 in the UK). No political donations were made.
Monitoring targets
Given that the Group is now ISO 14001 compliant in all major locations,
Group companies will be required to report performance against certain
targets twice a year at both the interim and full year end. Performance
trends against the following targets will be monitored to ensure standards
are at least maintained, and wherever practical, improved:
• energy consumption - electric (measured in KwH) and gas (measured
in BTUs)
• water consumption - measured in Imperial Gallons (1 US gallon = 0.8
Imperial gallon)
First Tech a/c 2003 a/w  7/24/03  10:48 AM  Page 26 27
First Technology 2003
Executive remuneration packages are prudently designed to be appropriate
to the role, responsibility and performance of the director and to attract,
motivate and retain individuals of the necessary calibre. The underlying
philosophy of the Committee is to provide basic salaries at the upper
median levels by comparison to survey data of comparable publicly quoted
companies. This is aimed at maintaining good management, while still
providing potential for upper quartile earnings when corporate and
individual performances justify it.
Executive directors are entitled to accept appointments outside the
Company with the Chairman’s permission. 
Elements of remuneration
Executive directors’ total remuneration consists of: 
• long term performance-related components – share incentives
• short term performance-related components – annual bonus plan 
• fixed components – basic annual salary, benefits and pension
Share incentives
The Committee believes that share incentives should represent a significant
element of the Company’s remuneration policy. The Company’s schemes
have been developed to provide long term management focus and
motivation with the flexibility necessary to allow them to respond to
changes in market practice and different geographic norms. In the US in
particular, there are fewer restrictions on the number of options that may
be granted, performance criteria are uncommon and vesting periods are
often shorter.  
The Committee operates the following share incentive schemes:
• Long Term Incentive Plan (LTIP): the LTIP was approved by
shareholders in 1998. No awards have been made under this plan.
• 1994 Executive Share Option Scheme (1994 ESOS): the 1994 ESOS
was approved by shareholders in 1994 and its rules reflect market
practice at that time. Subsisting options vest if the growth in headline
earnings per share over three consecutive years exceeds the growth in
the RPI by at least 2% per annum. No further grants will be made to
executive directors under this scheme.
• City Technology Holdings plc Executive Share Option Scheme (City
ESOS): as a result of the acquisition of City Technology Holdings plc
in April 2000, the City ESOS has granted replacement options over
shares in First Technology PLC. These options have no further
performance criteria attached. No further grants will be made under
this scheme.
• US Stock Option Plan (US SOP): this plan was approved by
shareholders in 1999. Options granted prior to 11th July 2001 are
governed by the same performance criteria as the 1994 ESOS above.
Grants after that date are subject to the performance criteria below.
• 2001 Share Option Scheme (2001 SOS): the 2001 SOS was approved
by shareholders in 2001. The 2001 SOS is subject to an overall limit
of 10% of issued share capital in any ten year period (including
options granted under other share incentive schemes). The 2001 SOS
embodies the principle of annual grants of options and the Committee
will apply appropriate flow rate policies to ensure adequate headroom
remains in later years.
Introduction
This report outlines the Company’s policy on directors’ remuneration and
gives details of the executive directors’ salaries, annual bonuses, long term
incentives and pensions, and of the fees for non-executive directors. It has
been prepared in accordance with the Directors’ Remuneration Report
Regulations 2002. The report also meets the relevant requirements of the
Listing Rules of the Financial Services Authority and describes how the
Board has applied the Principles of Good Governance relating to directors’
remuneration as set out in the Combined Code. As required by the
Regulations, a resolution to approve the report will be proposed at the
Annual General Meeting.
The Regulations require the auditors to report to the Company’s members
on the “auditable part” of the directors’ remuneration report and to state
whether in their opinion that part of the report has been properly prepared
in accordance with the Companies Act 1985 (as amended by the
Regulations). The report has therefore been divided into separate sections
for unaudited and audited information.
UNAUDITED INFORMATION
The Committee
The Company has established a Remuneration Committee, which is
constituted in accordance with the recommendations of the Combined
Code. The Committee decides the remuneration policy and makes
recommendations to the Board regarding the remuneration of executive
directors as well as recommending all grants of share options and awards
under the Long Term Incentive Plan.  Its remit also includes determining
the principal terms and conditions of executive contracts.
Its members comprise the non-executive directors, Bruce Atkinson, John
Salmon, Ralph R Whitney Jr. and its chairman Patrick Burgess. Members
of the Committee do not have any personal financial interest (other than as
shareholders, where that is the case) in matters decided by the Committee,
nor do they have any potential conflict of interest arising from cross-
directorships or day-to-day involvement in running the Group’s business.
The Committee met four times during the year. While the Chairman of
the Company, Dr Fred Westlake, and the CEO, John Shepherd, are not
members of the Committee, they normally attend meetings except when
the Committee is considering matters concerning themselves. The Board
has accepted all the recommendations made by the Committee during 
the year.
The Committee has access to professional advice inside and outside 
the Company. During the year, the Committee used the services of
PricewaterhouseCoopers to review the annual bonus arrangements for the
executive directors. No other services were provided to the Group by
PricewaterhouseCoopers. 
Remuneration policy
The Committee’s policy is to ensure that that the Company’s executive
directors and senior executives are fairly rewarded for their contribution to
the Group’s operating and financial performance having due regard to the
interests of the shareholders and to the financial and commercial health of
the Group. The Committee believes that share incentives are an important
element of executive remuneration in order to align directors’ interests with
the interests of shareholders.
Remuneration Report
First Tech a/c 2003 a/w  7/24/03  10:48 AM  Page 27 28
First Technology 2003
Performance criteria
The Committee has set the minimum performance criteria for future
awards under all share incentive schemes with regard to balancing the need
to offer internationally competitive remuneration packages, with the
overriding principle that large awards should only be made on condition of
meeting demanding performance criteria. The Committee reviews
performance criteria annually. After careful consideration, the Committee
determined that the growth in headline earnings per share was the most
appropriate criterion as it is readily understood both by employees and
shareholders and makes comparative judgements simpler and more
transparent.
The minimum performance criterion, approved by shareholders in 2001,
requires a sustained and significant improvement in the Group’s financial
performance over a minimum holding period of at least three years. The
performance test for awards over shares with a value up to 50% of basic
salary is that the growth in the Group’s headline earnings per share for
three consecutive financial years (commencing with the year current at the
date of grant) exceeds the growth in the UK Retail Price Index (RPI) by an
average of at least 3% per annum. The test for awards over shares with a
value in excess of 50% of basic salary will take the form of a sliding scale,
whereby the maximum vesting of an award will occur only if the growth in
the Group’s headline earnings per share for three consecutive financial years
(commencing with the year current at the date of grant) exceeds the
growth in the RPI by an average of at least 13% per annum. In the event
that the performance criteria are not met at the end of the initial three year
period, the relevant options will lapse.
Performance graph
The total shareholder return (“TSR”) on a holding of shares in the
Company over the last five years is set out below and shown against a
comparator index (FTSE All Share) chosen on the basis that those UK
quoted businesses that the Board considers to be most comparable are
themselves constituents of several sectors.
Annual bonus plan
The shorter term performance-related component of executive directors’
remuneration consists of an annual bonus. The Committee reviews and
establishes the objectives that must be met and sets bonus targets annually.
The maximum entitlement, currently 50% of basic salary (60% in the case
of the CEO), is reviewed from time to time and is set in line with survey
data of comparable publicly quoted companies. No transaction bonuses
have been awarded or promised.
For the year ended 30th April 2004, the targets comprise a mix of
demanding operational and financial targets based on both the financial
performance of the Group as a whole (as reflected in earnings per share
after certain specified adjustments and in return on capital) and specific
areas of responsibility. In the year ended 30th April 2003, the bonus plan
targets were not met and no bonuses are payable to executive directors.
Fixed components 
The fixed components of executive remuneration are:
•Basic salary: The Committee reviews basic salaries annually on 1st May
in the light of individual and Group performance and also when an
individual changes position or responsibility. In deciding appropriate
levels, the Committee has due regard to survey data of comparable
publicly quoted companies and the general movement of basic salaries
within the Group.
•Benefits: Executive directors are entitled to a company car or car
allowance, health, life and disability insurance. Benefits are not
pensionable.
•Pensions: Executive directors participate in appropriate Group or
personal pension arrangements. 
Service contracts
It is the Company’s policy that executive directors should have contracts
with an indefinite term providing for a maximum of one year’s notice. The
details of the executive directors’ contracts are summarised in the table
below:
Date of contract Notice period
K D Breen 21st July 1997 1 year
O G Burns 1st May 1998 1 year
J Shepherd 10th March 2003 1 year
Dr F J Westlake 23rd November 2002 1 year
J G Wood 23rd February 1999 1 year
In the event of early termination, the directors’ contracts provide for
compensation up to a maximum of basic salary and other financial
contractual entitlements for the period of notice. The notice period in
respect of Dr F J Westlake will reduce to six months from 10th September
2003 and to nil from 10th March 2004.
Dr F J Westlake’s contract includes a change of control clause, which, in
the event of a change of control of the Company, entitles him to receive a
lump sum payment equivalent to two times his then current basic annual
gross salary, reducing to one and a half times on 10th September 2003. No
change of control provision will operate after 10th March 2004. 
The Company recognises that in order to attract individuals of the
necessary calibre, it may be necessary to offer a longer initial notice period
reducing to one year at the earliest opportunity. In this respect, J Shepherd’s
contract includes a change of control clause, which, in the event of a
change of control of the Company, entitles him to receive a lump sum
payment equivalent to two times basic annual gross salary, reducing to one
and a half times on 10th March 2004 and to nil from 10th March 2005.
Non-executive directors have letters of appointment with no notice
periods. 
All directors are subject to re-election in accordance with the Company’s
Articles of Association. 
Non-executive remuneration 
The remuneration of non-executive directors is determined by the Board.
Their remuneration is not pensionable and they are not eligible for
performance-related remuneration.
Remuneration Report
4/30/99 4/30/00 4/30/01 4/30/02 4/30/03 4/30/98
200.0
180.0
160.0
140.0
120.0
100.0
80.0
60.0
40.0
20.0
First Technology FTSE All Share
Return index (rebased to 100)
First Tech a/c 2003 a/w  7/24/03  10:48 AM  Page 28 29
First Technology 2003
AUDITED INFORMATION 
Directors’ emoluments
Full details of each director’s individual remuneration is set out below:
Salary Annual 2003 2002
or fees Benefits bonus Total Total
£’000 £’000 £’000 £’000 £’000
Executive Directors
Dr F J Westlake (Chairman) 315 26 – 341 337
J Shepherd (appointed 10th March 2003) 38 2 – 40 –
B D Atkinson* 9 – – 9 172
K D Breen 157 15 – 172 206
O G Burns 210 19 – 229 214
J G Wood 190 10 – 200 198
919 72 – 991 1,127
Non-Executive Directors
B D Atkinson* 26 5 – 31 –
W J Borda (resigned 31st July 2001) – – – – 6
D P H Burgess 32 – – 32 29
J H Feltham (retired 13th September 2001) – – – – 11
J J Salmon (appointed 2nd January 2002) 26 – – 26 8
R R Whitney Jr. 26 – – 26 24
1,029 77 – 1,106 1,205
*Bruce Atkinson retired from executive duties on 7th May 2002.
Directors’ pensions
The executive directors participate in the following pension arrangements:
Dr F J Westlake is a member of the First Technology PLC Retirement Benefits Scheme which is an Inland Revenue approved defined benefit
scheme. On 22nd November 2002, at his normal retirement date, Dr F J Westlake was eligible to receive a maximum pension of two-thirds his
final pensionable salary and a dependant’s benefit of two-thirds pension: he elected to receive the maximum lump sum entitlement and a
reduced pension of £189,000 per annum.  
Transfer value
Accrued Accrued of increase after
pension pension Increase indexation
30th April 22nd Nov after less director’s
2002 2002 Increase indexation contributions
£’000 £’000 £’000 £’000 £’000
Dr F J Westlake 231 239 8 8 139
The transfer value of the accrued pension entitlement at 22nd November 2002 was £4,585,000 (30th April 2002: £3,878,000). These figures
represent liabilities of the scheme, not sums paid or due to the individual.
K D Breen, O G Burns and J Shepherd receive contributions to their personal money purchase pension schemes. J G Wood receives
contributions to a 401k Plan and in addition is a member of the First Technology Supplemental Executive Retirement Plan. All contributions
are based on basic salary. Contributions accrued during the year as follows:
2003 2002
£’000 £’000
B D Atkinson – 7
K D Breen 18 17
O G Burns 39 38
J Shepherd 7 –
J G Wood 33 33
97 95
Company contribution rates are determined by the schemes’ actuaries.
First Tech a/c 2003 a/w  7/24/03  10:48 AM  Page 29 30
First Technology 2003
Directors’ share options
Details of directors’ shareholdings are disclosed in the directors’ report on page 21 and details of each director’s share options are set out below: 
Date from
At 1st Number of options At 30th Exercise which Expiry
May 2002 Granted Exercised April 2003 price exercisable date
K D Breen
Executive options (1) 20,500 – – 20,500 426.8p 01.11.00 31.10.07
Executive options (1) 41,000 – – 41,000 423.9p 29.09.02 28.09.09
Executive options (2) 25,000 – – 25,000 442p 11.07.04 10.07.11
Executive options (3) – 46,000 – 46,000 339p 30.07.05 29.07.12
SAYE options 831 – – 831 466p 01.10.03 01.04.04
SAYE options 1,088 – – 1,088 356p 01.10.04 01.04.05
O G Burns
Executive options (2) 62,276 – – 62,276 334p 24.02.01 23.02.08
Executive options (2) 45,000 – – 45,000 497p 29.10.02 28.10.09
Executive options (2) 30,000 – – 30,000 497p 29.10.03 28.10.09
Executive options (2) 25,000 – – 25,000 442p 11.07.04 10.07.11
Executive options (3) – 46,000 – 46,000 339p 30.07.05 29.07.12
SAYE options 831 – – 831 466p 01.10.03 01.04.04
SAYE options 948 – – 948 356p 01.10.04 01.04.05
J Shepherd
Executive options (3) – 70,000 – 70,000 175p 28.03.06 27.03.13
Dr F J Westlake
Executive options (2) 101,796 – – 101,796 334p 24.02.01 23.02.08
Executive options (2) 60,000 – – 60,000 497p 29.10.02 28.10.09
Executive options (2) 40,000 – – 40,000 497p 29.10.03 28.10.09
J G Wood
US Stock Options 61,500 – – 61,500 $9.20 10.08.03 09.08.10
US Stock Options 25,000 – – 25,000 $6.26 11.07.04 10.07.11
US Stock Options – 46,000 – 46,000 $5.29 30.07.05 29.07.12
Note: (1) Options granted under the City Technology Holdings plc Executive Share Option Scheme.
(2) Options granted under the First Technology PLC 1994 Executive Share Option Scheme.
(3) Options granted under the First Technology PLC 2001 Executive Share Option Scheme.
There have been no variations to the terms and conditions or performance criteria for share options during the financial year. The performance
criteria relevant to the share options are explained above in the unaudited section of this report.
The market price of the ordinary shares at 30th April 2003 was £2.23 and the range during the year was £4.79 to £1.63.
Approval
This report was approved by the Board on 22nd July 2003 and signed on its behalf by:
N W H Clayton
Secretary
Remuneration Report
First Tech a/c 2003 a/w  7/24/03  10:48 AM  Page 30 31
First Technology 2003
Independent Auditors’ Report to the members of First Technology PLC
We have audited the financial statements of First Technology PLC for the
year ended 30th April 2003 which comprise the group profit and loss
account, the balance sheets, the group cash flow statement, the group
statement of total recognised gains and losses, the statement of principal
accounting policies and the related notes 1 to 25, together with the
reconciliation of operating profit to net cash inflow from operating
activities. These financial statements have been prepared under the
accounting policies set out therein. We have also audited the information
in the part of the directors’ remuneration report that is described as having
been audited.
This report is made solely to the company’s members, as a body, in
accordance with section 235 of the Companies Act 1985. Our audit work
has been undertaken so that we might state to the company’s members
those matters we are required to state to them in an 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
company’s members as a body, for our audit work, for this report, or for
the opinions we have formed.
Respective responsibilities of directors and auditors
As described in the statement of directors’ responsibilities, the company’s
directors are responsible for the preparation of the financial statements in
accordance with applicable United Kingdom law and accounting
standards. They are also responsible for the preparation of the other
information contained in the annual report including the directors’
remuneration report. Our responsibility is to audit the financial statements
and the part of the directors’ remuneration report described as having been
audited in accordance with relevant United Kingdom legal and regulatory
requirements and auditing standards.
We report to you our opinion as to whether the financial statements give a
true and fair view and whether the financial statements and the part of the
directors’ remuneration report described as having been audited have been
properly prepared in accordance with the Companies Act 1985. We also
report to you if, in our opinion, the directors’ report is not consistent with
the financial statements, if the company has not kept proper accounting
records, if we have not received all the information and explanations we
require for our audit, or if information specified by law regarding directors’
remuneration and transactions with the company and other members of
the group is not disclosed.
We review whether the corporate governance statement reflects the
company’s compliance with the seven provisions of the Combined Code
specified for our review by the Listing Rules of the Financial Services
Authority and we report if it does not. We are not required to consider
whether the board’s statements on internal control cover all risks and
controls, or form an opinion on the effectiveness of the group’s corporate
governance procedures or its risk and control procedures.
We read the directors’ report and the other information contained in the
annual report for the above year as described in the contents section
including the unaudited part of the directors’ remuneration report and
consider the implications for our report if we become aware of any
apparent misstatements or material inconsistencies with the financial
statements.
Basis of audit opinion
We conducted our audit in accordance with United Kingdom auditing
standards issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts and
disclosures in the financial statements and the part of the directors’
remuneration report described as having been audited. It also includes an
assessment of the significant estimates and judgements made by the
directors in the preparation of the financial statements and of whether the
accounting policies are appropriate to the circumstances of the company,
consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information
and explanations which we considered necessary in order to provide us
with sufficient evidence to give reasonable assurance that the financial
statements are free from material misstatement, whether caused by fraud or
other irregularity or error. In forming our opinion, we also evaluated the
overall adequacy of the presentation of information in the financial
statements and the part of the directors’ remuneration report described as
having been audited.
Opinion 
In our opinion:
• the financial statements give a true and fair view of the state of affairs
of the company and the group as at 30th April 2003 and of the profit
of the group for the year then ended; and 
• the financial statements and the part of the directors’ remuneration
report described as having been audited have been properly prepared in
accordance with the Companies Act 1985.
Deloitte & Touche
Chartered Accountants and Registered Auditors
Reading
22nd July 2003
Independent Auditors’ Report
First Tech a/c 2003 a/w  7/24/03  10:48 AM  Page 31 32
First Technology 2003
2003 2002
Note £’m £’m
Turnover 1 127.6 137.0
Cost of sales (75.5) (82.3)
Gross profit 52.1 54.7
Operating costs
Integration costs 2 – (0.3)
Reorganisation costs 2 (1.5) –
Goodwill amortisation:
– amortisation 9 (8.7) (8.7)
– impairment losses 9 (4.9) –
Other operating costs 2 (25.6) (24.6)
Total operating costs 2 (40.7) (33.6)
Operating profit 3 11.4 21.1
Finance charges (net) 5 (1.0) (1.4)
Profit on ordinary activities before taxation 10.4 19.7
Tax on profit on ordinary activities 6 (4.7) (6.0)
Profit for the financial year 5.7 13.7
Dividends paid and proposed 7 (7.2) (6.8)
Retained (loss)/profit for the financial year (1.5) 6.9
Headline earnings per share 8 27.2p 30.0p
Basic earnings per share 8 7.6p 18.2p
Diluted earnings per share 8 7.6p 18.2p
Dividends per share 7 9.5p 9.0p
Profit on ordinary activities before taxation, goodwill items, reorganisation and integration costs £25.5m £28.7m
All results are derived from continuing operations.
2003 2002
Note £’m £’m
Profit for the financial year 5.7 13.7
Foreign currency translation (0.1) (0.6)
Actuarial losses recognised in the pension schemes 17 (1.6) (2.7)
Deferred tax thereon 0.5 0.8
Total recognised gains and losses relating to the year 4.5 11.2
Group Profit and Loss Account
for the year ended 30th April 2003
Statement of Total Recognised Gains and Losses
for the year ended 30th April 2003
First Tech a/c 2003 a/w  7/24/03  10:48 AM  Page 32 33
First Technology 2003
Group Group Company Company
2003 2002 2003 2002
Note £'m £'m £'m £'m
Fixed assets
Goodwill 9 138.3 151.9 – –
Other intangible fixed assets 9 – – 8.5 6.5
Tangible assets 10 16.8 17.8 – –
Investments 11 0.5 – 225.6 224.1
155.6 169.7 234.1 230.6
Current assets
Stocks 12 13.9 11.8 – –
Debtors 13 24.8 28.9 9.7 12.2
Cash at bank and in hand 3.8 3.2 – –
42.5 43.9 9.7 12.2
Creditors:
amounts falling due within one year 14 (34.9) (39.3) (102.9) (95.0)
Net current assets/(liabilities) 7.6 4.6 (93.2) (82.8)
Total assets less current liabilities 163.2 174.3 140.9 147.8
Creditors:
amounts falling due after more than one year 15 (0.5) (9.6) (80.2) (88.6)
Net assets excluding pension liability 162.7 164.7 60.7 59.2
Pension liability 17 (2.0) (1.3) – –
Net assets including pension liability 160.7 163.4 60.7 59.2
Capital and reserves
Called up share capital 18 7.5 7.5 7.5 7.5 
Share premium account 19 48.7 48.7 48.7 48.7 
Merger reserve 19 69.6 69.6 – – 
Profit and loss account 19 34.9 37.6 4.5 3.0
Equity shareholders’ funds 160.7 163.4 60.7 59.2
The financial statements on pages 32 to 56 were approved by the Board on 22nd July 2003.
J Shepherd
Director
O G Burns
Director
Balance Sheets
as at 30th April 2003
First Tech a/c 2003 a/w  7/24/03  10:48 AM  Page 33 34
First Technology 2003
2003 2002
Note £’m £’m
Net cash inflow from operating activities 29.8 34.6
Returns on investments and servicing of finance 21 (0.7) (1.3)
Taxation 21 (4.3) (3.3)
Capital expenditure and financial investment 21 (5.1) (4.1)
Acquisitions and disposals 21 (1.7) (4.0)
Equity dividends paid (6.9) (6.5)
Net cash inflow before financing 11.1 15.4
Financing 21 (10.6) (17.2)
Increase/(decrease) in cash in the year 0.5 (1.8)
Reconciliation of operating profit to net cash inflow from operating activities
2003 2002
£’m £’m
Operating profit 11.4 21.1
Depreciation and amortisation charges 18.4 14.1
(Increase)/decrease in stocks (2.5) 1.7
Decrease in debtors 3.1 1.4
Increase/(decrease) in creditors 1.0 (3.1)
Loss on disposal of fixed assets – 0.2
Adjustment for pension funding (0.6) (0.6)
Exchange differences (1.0) (0.2)
Net cash inflow from operating activities 29.8 34.6
Group Cash Flow Statement
for the year ended 30th April 2003
First Tech a/c 2003 a/w  7/24/03  10:48 AM  Page 34 35
First Technology 2003
Basis of preparation
The financial statements have been prepared under the historical cost
convention and in accordance with applicable United Kingdom 
accounting standards.
Basis of consolidation
The consolidated financial statements incorporate the accounts of First
Technology PLC and all its subsidiaries for the year ended 30th April
2003. The results of subsidiaries acquired or sold are included from the
date of acquisition or to the date of disposal.
Turnover
Turnover represents amounts receivable for goods and services provided in
the normal course of business, net of trade discounts, VAT and other sales
related taxes.
Taxation
Corporation tax is provided at amounts expected to be paid or received
using the current tax rates and law.
Deferred tax is provided in full on timing differences which result in an
obligation at the balance sheet date to pay more tax, or a right to pay less
tax, at a future date, at rates expected to apply when they crystalise based
on current tax rates and law. Deferred tax assets are recognised to the
extent that it is regarded as more likely than not that they will be
recovered. Deferred tax assets and liabilities are not discounted.
Foreign currency
Transactions denominated in foreign currencies are recorded at the rate
ruling on the date of the transaction, or if hedged, at the forward contract
rate. Monetary assets and liabilities denominated in foreign currencies are
translated into sterling at the exchange rate ruling at the balance sheet date
unless matching forward foreign exchange contracts have been entered
into, in which case the rate specified in the relevant contract is used. The
trading results of the overseas subsidiaries are translated into sterling at the
average rate for the year. Translation differences arising on the restatement
of the net investment in these companies, their results and related hedging
instruments are dealt with as adjustments to reserves. All other differences
are taken to the profit and loss account.
Research and development
Development expenditure relating to specific projects intended for
commercial exploitation is written off to the profit and loss account in the
year in which it is incurred, other than that which is considered fully
recoverable over the periods expected to benefit from the project. Such
expenditure is carried forward and amortised over the periods expected to
benefit from it, commencing with the period in which related sales are first
made. Expenditure on research is written off to the profit and loss account
as incurred.
Goodwill and other intangible fixed assets
Goodwill arising on acquisitions of subsidiaries since 1st May 1998 is
capitalised and represents the excess consideration over the fair value of the
assets acquired. Goodwill arising on acquisitions prior to that date was
written off to reserves as a matter of accounting policy and as permitted
under the transition arrangements of FRS 10 and amounts to £9.6 million
(2002: £9.6 million). This goodwill will be charged to the profit and loss
account on the subsequent disposal of the subsidiary undertakings to
which this goodwill relates. Payments made to acquire intellectual property
rights are stated at cost. Provision is made for any impairment. Goodwill
and other intangible fixed assets are written off over their expected useful
lives at the following rates per annum on a straight line basis.
Goodwill 5%
Intellectual property rights 10% to 33%
Tangible fixed assets
Tangible fixed assets are stated at cost less depreciation and provision for
impairment. Depreciation is charged at annual rates calculated to write
down assets to their residual values over their expected useful lives at the
following rates per annum:
Freehold buildings 2%
Short leaseholds Over the term of the lease
Plant, computers and fixtures 10% to 33%
Motor vehicles 25% to 33%
Freehold land is not depreciated.
Leased assets
Fixed assets held under finance leases are capitalised and depreciated over
their expected useful economic lives. The finance charge is allocated to the
profit and loss account over the primary period of the lease in proportion
to the capital element outstanding.
Operating lease rentals are charged to the profit and loss account on a
straight line basis.
Principal Accounting Policies
First Tech a/c 2003 a/w  7/24/03  10:48 AM  Page 35 36
First Technology 2003
Fixed asset investments
Investments held as fixed assets are included at cost less provision for any
impairment in value.
Stocks
Stocks and work in progress are valued at the lower of cost and net
realisable value. Work in progress and finished goods include an
appropriate proportion of attributable production overheads.
Pensions
The Group adopted FRS 17, Retirement Benefits, in full in the year ended
30th April 2002.
The Group operates two defined benefit schemes in the UK. The schemes
are administered by trustees and are independent of the group finances.
Triennial valuations are performed by qualified independent actuaries and
the results updated to 30th April each year. Pension scheme assets are
measured using market value. Pension scheme liabilities are measured using
the projected unit method and discounted at the redemption yield on AA
rated corporate bonds. Contributions are paid to the schemes in
accordance with their recommendations.
The current service cost is charged to operating profit so as to reflect the
increase in the present value of the scheme liabilities expected to arise from
employee service over the current period. The expected return on the
schemes’ assets net of the interest costs on the schemes’ liabilities is
included in other finance income. Actuarial losses and gains are recognised
in the Statement of Total Recognised Gains and Losses. The pension
schemes’ deficits and surpluses are recognised in full and presented on the
face of the balance sheet net of the related deferred tax. Pension assets and
liabilities in the different defined benefit schemes are not offset.
For defined contribution pension arrangements the amounts charged to
the profit and loss account are the contributions payable in the year.
Derivative financial instruments
Derivative instruments utilised by the Group are interest rate swaps and
forward foreign exchange contracts. The Group does not enter into
speculative derivative contracts. All such instruments are used for hedging
purposes to alter the risk profile of an existing underlying exposure of the
Group in line with the Group’s risk management policies.
Amounts payable or receivable in respect of interest rate swaps are
recognised as adjustments to interest expense over the period of the
contract. Gains and losses on forward foreign exchange contracts are
recognised in the profit and loss account only when the hedged transaction
has itself been recognised in the profit and loss account.
Debt
Bank loans are stated net of the costs of raising debt which are amortised
over the life of the facility.
Principal Accounting Policies
First Tech a/c 2003 a/w  7/24/03  10:48 AM  Page 36 37
First Technology 2003
1. Segmental analysis
(a)Turnover by origin:
2003 2002
£’m £’m
UK 43.7 37.7
Rest of Europe 19.7 24.8
North America 58.5 68.9
Japan 5.7 5.6
127.6 137.0
(b)Turnover by activity:
Restated*
2003 2002
£’m £’m
Gas sensing 25.5 24.3
Other manufacturing 93.7 102.7
Component distribution 8.4 10.0
127.6 137.0
(c) Turnover by destination:
2003 2002
£’m £’m
UK 7.4 7.0
Rest of Europe 45.0 44.2
North America 62.0 73.2
Asia 11.2 9.6
South America 0.9 1.6
Other 1.1 1.4
127.6 137.0
(d)Profit by origin:
Year ended 30th April 2003 Operating profit
before goodwill and Reorganisation Goodwill Goodwill Operating
exceptional items costs amortisation impairment profit
£m £m £m £m £m
UK 11.4 (0.8) (4.9) (4.0) 1.7
Rest of Europe 0.9 (0.6) (0.2) (0.9) (0.8)
North America 13.1 (0.1) (3.6) – 9.4
Japan 1.1 – – – 1.1
Total 26.5 (1.5) (8.7) (4.9) 11.4
Finance charges (net) (1.0)
Profit on ordinary activities before tax 10.4
Notes to the Accounts
for the year ended 30th April 2003
First Tech a/c 2003 a/w  7/24/03  10:48 AM  Page 37 38
First Technology 2003
1. Segmental analysis continued
(d)Profit by origin: continued
Year ended 30th April 2002 Operating profit
before goodwill and Integration Goodwill Operating
exceptional items costs amortisation profit
£’m £’m £’m £’m
UK 12.7 (0.3) (4.9) 7.5
Rest of Europe 1.3 – (0.2) 1.1
North America 15.0 – (3.6) 11.4
Japan 1.1 – – 1.1
Total 30.1 (0.3) (8.7) 21.1
Finance charges (net) (1.4)
Profit on ordinary activities before tax 19.7
(e) Profit by activity:
Year ended 30th April 2003 Operating profit
before goodwill and Reorganisation Goodwill Goodwill Operating
exceptional items costs amortisation impairment profit
£’m £’m £’m £’m £’m
Gas sensing 8.5 – (4.9) (4.0) (0.4)
Other manufacturing 18.0 (0.8) (3.7) – 13.5
Component distribution – (0.7) (0.1) (0.9) (1.7)
Total 26.5 (1.5) (8.7) (4.9) 11.4
Finance charges (net) (1.0)
Profit on ordinary activities before tax 10.4
Year ended 30th April 2002 Operating profit Restated*
before goodwill and Integration Goodwill Operating
exceptional items costs amortisation profit
£’m £’m £’m £’m
Gas sensing 9.4 (0.3) (4.9) 4.2
Other manufacturing 20.0 – (3.7) 16.3
Component distribution 0.7 – (0.1) 0.6
Total 30.1 (0.3) (8.7) 21.1
Finance charges (net) (1.4)
Profit on ordinary activities before tax 19.7
Notes to the Accounts
for the year ended 30th April 2003
First Tech a/c 2003 a/w  7/24/03  10:48 AM  Page 38 39
First Technology 2003
1. Segmental analysis continued
(f) Net assets by origin:
Year ended 30th April 2003 Net operating
assets excluding
goodwill Goodwill Net assets
£’m £’m £’m
UK 11.6 78.4 90.0
Rest of Europe 3.7 2.9 6.6
North America 17.7 57.0 74.7
Japan 0.6 – 0.6
Total 33.6 138.3 171.9
Net cash 0.1
Taxation (4.7)
Dividends (4.6)
Pension scheme liability (2.0)
Net assets 160.7
Year ended 30th April 2002 Net operating
assets excluding
goodwill Goodwill Net assets
£’m £’m £’m
UK 9.1 87.3 96.4
Rest of Europe 4.0 4.0 8.0
North America 20.2 60.6 80.8
Japan 1.1 – 1.1
Total 34.4 151.9 186.3
Net debt (12.3)
Taxation (4.9)
Dividends (4.4)
Pension scheme liability (1.3)
Net assets 163.4
(g)Net assets by activity:
Year ended 30th April 2003 Net operating
assets excluding
goodwill Goodwill Net assets
£’m £’m £’m
Gas sensing 8.7 78.4 87.1
Other manufacturing 22.9 59.9 82.8
Component distribution 2.0 – 2.0
Total 33.6 138.3 171.9
Net cash 0.1
Taxation (4.7)
Dividends (4.6)
Pension scheme liability (2.0)
Net assets 160.7
First Tech a/c 2003 a/w  7/24/03  10:48 AM  Page 39 40
First Technology 2003
1. Segmental analysis continued
(g)Net assets by activity: continued
Year ended 30th April 2002 Net operating
assets excluding Restated*
goodwill Goodwill Net assets
£’m £’m £’m
Gas sensing 8.8 87.3 96.1
Other manufacturing 22.6 63.6 86.2
Component distribution 3.0 1.0 4.0
Total 34.4 151.9 186.3
Net debt (12.3)
Taxation (4.9)
Dividends (4.4)
Pension scheme liability (1.3)
Net assets 163.4
*During the year, the Group’s third party component distribution business was separated from the distribution of own-manufactured products.
At the same time, it was considered helpful to identify separately the turnover, operating profit and net assets for the Group’s gas sensing activity,
which was previously included within Other Manufacturing for segmental analysis. Accordingly, comparative figures have been re-presented.
2. Operating costs
Restated*
2003 2002
£’m £’m
Distribution costs 5.6 6.1
Administrative expenses:
– other administration costs 20.0 18.5
– reorganisation and integration costs 1.5 0.3
– goodwill items 13.6 8.7
Total administrative expenses 35.1 27.5
Total operating costs 40.7 33.6
*In prior years, all overheads have been classified as administrative. To accord with the requirements of the Companies Act, we have separately
analysed those costs related to the distribution of our products in the year under review and comparative figures have been re-presented
accordingly.
2003 costs of £1.5 million relate to the restructuring of First Technology Automotive in the UK and the Group’s distribution business,
Réalisations et Diffusion pour l’Industrie (RDI) in France. First Technology Automotive ceased manufacture in the UK from Spring 2003,
although it continues to perform R&D engineering activities together with the European logistics function, which was transferred from RDI.
Prior year costs of £0.3 million relate to additional costs incurred in completing the integration of Capteur Sensors and Analysers Limited
(Capteur), acquired in 2001, with City Technology Limited.
Notes to the Accounts
for the year ended 30th April 2003
First Tech a/c 2003 a/w  7/24/03  10:48 AM  Page 40 41
First Technology 2003
3. Operating profit
Operating profit is stated after charging:
2003 2002
£’m £’m
Operating lease charges – plant and machinery 0.2 0.3
– other 1.4 1.2
Auditors’ remuneration – Group audit fees 0.2 0.2
– other UK services 0.3 0.3
Depreciation of tangible fixed assets 4.8 5.4
Amortisation of goodwill 8.7 8.7
Impairment of goodwill 4.9 –
Research and development 8.0 8.2
Auditors’ remuneration in respect of the Company was £nil (2002: £nil).
A more detailed analysis of auditors’ remuneration on a worldwide basis is provided below:
2003 2002
£’m £’m
Services as auditors 0.2 0.2
Percentage 33.4% 33.4%
Further assurance services
– Tax compliance 0.2 0.2
Percentage 33.3% 33.3%
Tax advisory services 0.2 0.2
Percentage 33.3% 33.3%
Total 0.6 0.6
Percentage 100.0% 100.0%
Significant non-audit services require pre-approval by the Audit Committee.
4. Staff costs
(a)Staff costs (including directors):
2003 2002
£’m £’m
Salaries 28.2 26.9
Social security costs 2.6 2.6
Other pension costs 1.3 1.5
32.1 31.0
Salaries include £0.7 million (2002: £0.2 million) in respect of redundancy costs related to the restructuring of operations during the year.
(b)The average monthly number of employees (including executive directors) during the year was:
2003 2002
Number Number
Production 1,406 1,443
Engineering 125 122
Office and managerial 111 110
Sales 80 87
1,722 1,762
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First Technology 2003
4. Staff costs continued
(c) Directors’ aggregate remuneration:
2003 2002
£’m £’m
Emoluments 1.1 1.2
Contributions to money purchase schemes 0.1 0.1
1.2 1.3
Full details of directors’ remuneration is given in the Remuneration Report on pages 27 to 30.
5. Finance charges (net)
2003 2002
£’m £’m
Interest payable on bank loans and overdrafts (1.0) (1.6)
Interest receivable – 0.1
Other finance income (see note 17e) – 0.1
(1.0) (1.4)
Included within interest payable is an amount of £0.1 million (2002: £0.1 million) relating to the amortisation of facility fees and £0.1 million
(2002: £nil) in respect of the fair value of an interest rate swap (see note 15).
Other finance income comprises the net of the expected return on the pension scheme assets and the interest cost on the pension scheme
liabilities.
6. Tax on profit on ordinary activities
2003 2002
£’m £’m
Current tax
UK corporation tax 2.2 3.0
Foreign tax 2.1 4.4
4.3 7.4
Adjustments in respect of prior years:
UK corporation tax (0.6) (1.2)
Foreign tax 0.3 (0.7)
Total current tax 4.0 5.5
Deferred tax
Origination and reversal of timing differences – current year 0.8 (0.4)
– prior year (0.1) 0.9
Total deferred tax 0.7 0.5
Total tax on profit on ordinary activities 4.7 6.0
Notes to the Accounts
for the year ended 30th April 2003
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First Technology 2003
6. Tax on profit on ordinary activities continued
The differences between the total current tax shown above and the amount calculated by applying the standard rate of UK corporation tax to
the profit before tax is as follows:
2003 2002
£’m £’m
Group profit on ordinary activities before tax 10.4 19.7
Tax on Group activities at standard UK corporation tax rate of 30% 3.1 5.9
Effects of:
Expenses not deductible for tax purposes (including amortisation of goodwill) 4.3 2.7
Lower tax rates on overseas earnings (1.9) (1.6)
Depreciation in excess of capital allowances 0.2 0.1
Utilisation of tax losses (0.4) –
Expenses deductible in later periods for tax purposes (1.0) 0.3
Adjustments to charge in respect of previous periods (0.3) (1.9)
Group current tax charge for the year 4.0 5.5
The tax charge in future periods may be affected by the mix of profits from various countries within which First Technology operates, since the
tax rates vary significantly between these jurisdictions.
The Group has brought forward losses of approximately £9.1 million, which will be carried forward to later periods. A deferred tax asset has not
been recognised in respect of timing differences relating to these losses as there is insufficient evidence that the asset will be recovered. The
amount of the asset not recognised is approximately £2.7 million. The asset will be recoverable to the extent that profits suitable for offset by the
brought forward losses are made by the relevant entities in the future.
7. Dividends
2003 2002
£’m £’m
Interim dividend – paid 3.4p per share (2002: 3.2p) 2.6 2.4
Final dividend – proposed 6.1p per share (2002: 5.8p) 4.6 4.4
7.2 6.8
The final dividend is payable on 7th October 2003 to shareholders on the register on 5th September 2003.
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First Technology 2003
8. Earnings per share
The weighted average number of shares used to calculate the basic, headline and diluted earnings per share is as follows:
2003 2002
Number Number
Weighted average number of shares in issue for basic and headline earnings per share 75,346,990 75,218,455
Dilutive effect of share options 33,340 71,627
Weighted average number of shares in issue for diluted earnings per share 75,380,330 75,290,082
The earnings used to calculate the basic, diluted and headline earnings per share are as follows:
2003 2003 2003 2002 2002 2002
Basic Diluted Basic Diluted
£’m pence pence £’m pence pence
Profit for the financial year 5.7 7.6 7.6 13.7 18.2 18.2
Add back: goodwill items 13.6 18.0 18.0 8.7 11.5 11.5
Add back: exceptional reorganisation and
integration costs, net of tax credit 1.2 1.6 1.6 0.2 0.3 0.3
Headline earnings 20.5 27.2 27.2 22.6 30.0 30.0
Headline earnings per share of 27.2p (2002: 30.0p) is considered by the directors to be a more meaningful measurement of financial
performance than basic earnings per share, as it excludes goodwill amortisation and exceptional items.
9. Intangible fixed assets
Group Goodwill
£’m
Cost
1st May 2002 and 30th April 2003 173.4
Amortisation
1st May 2002 21.5
Charge for the year 8.7
Impairment losses 4.9
30th April 2003 35.1
Net book value
30th April 2003 138.3
30th April 2002 151.9
Goodwill is being amortised over 20 years. Goodwill of £9.6m remains written off against reserves.
In accordance with FRS 11 ‘Impairment of fixed assets and goodwill’, the Group regularly monitors the carrying values of its fixed assets. The
review performed during the year ended 30th April 2003 resulted in an impairment loss of £0.9 million in relation to RDI’s passive electronic
component distribution business in France and £4 million in relation to the solid state gas sensing products acquired with Capteur. The
discount rate used to evaluate future cash flows from Capteur’s activities was 11.5%.
Notes to the Accounts
for the year ended 30th April 2003
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First Technology 2003
9. Intangible fixed assets continued
Company Intellectual
property
rights
£’m
Cost
1st May 2002 7.3
Additions 3.3
30th April 2003 10.6
Amortisation
1st May 2002 0.8
Charge for the year 1.3
30th April 2003 2.1
Net book value
30th April 2003 8.5
30th April 2002 6.5
During the year, the Company acquired certain intellectual property rights owned by City Technology Limited.
10. Tangible fixed assets
Group Freehold Plant,
land and Short computers Motor
buildings leaseholds and fixtures vehicles Total
£’m £’m £’m £’m £’m
Cost
1st May 2002 6.3 3.0 42.3 0.6 52.2
Additions – 0.2 4.2 0.2 4.6
Disposals – – (0.1) (0.2) (0.3)
Exchange differences (0.3) (0.1) (2.2) – (2.6)
30th April 2003 6.0 3.1 44.2 0.6 53.9
Depreciation
1st May 2002 2.2 0.9 30.9 0.4 34.4
Charge for the year 0.2 0.2 4.3 0.1 4.8
Disposals – – (0.1) (0.1) (0.2)
Exchange differences (0.1) (0.1) (1.7) – (1.9)
30th April 2003 2.3 1.0 33.4 0.4 37.1
Net book value
30th April 2003 3.7 2.1 10.8 0.2 16.8
30th April 2002 4.1 2.1 11.4 0.2 17.8
Freehold land and buildings include land at a cost of £0.5 million (2002: £0.5 million) which is not subject to depreciation. The cost of
freehold land and buildings includes capitalised interest of £0.1 million (2002: £0.1 million).
Capital expenditure contracted for at the 30th April 2003 was £nil (2002: £0.4 million).
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First Technology 2003
11. Fixed asset investments
Group Group Company Company
2003 2002 2003 2002
£’m £’m £’m £’m
Subsidiary undertakings – – 157.7 157.7
Other investments and loans 0.5 – 67.9 66.4
0.5 – 225.6 224.1
Group Total
£’m
Cost and net book value
1st May 2002 –
Additions 0.5
30th April 2003 0.5
Company Shares in Loans to
subsidiaries subsidiaries Total
£’m £’m £’m
Cost and net book value
1st May 2002 157.7 66.4 224.1
Additions – 12.9 12.9
Disposals – (7.9) (7.9)
Exchange differences – (3.5) (3.5)
30th April 2003 157.7 67.9 225.6
Details of the Company’s principal subsidiaries are given on page 56.
12. Stocks
Group Group
2003 2002
£’m £’m
Raw materials 4.2 4.2
Work in progress 2.0 1.5
Finished goods 7.7 6.1
13.9 11.8
The Company does not trade and therefore stock at 30th April 2003 was £nil (2002: £nil).
Notes to the Accounts
for the year ended 30th April 2003
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First Technology 2003
13. Debtors
Group Group Company Company
2003 2002 2003 2002
£’m £’m £’m £’m
Amounts falling due within one year:
Trade debtors 20.9 24.8 – –
Amounts owed by subsidiaries – – 9.7 11.8
Other debtors 1.6 1.1 – –
Deferred tax (note 16) 1.8 2.6 – 0.4
Prepayments and accrued income 0.5 0.4 – –
24.8 28.9 9.7 12.2
14. Creditors: amounts falling due within one year
Group Group Company Company
2003 2002 2003 2002
£’m £’m £’m £’m
Bank loans and overdrafts (note 15) 3.7 6.7 86.5 78.9
Trade creditors 9.9 9.8 – –
Amounts owed to subsidiaries – – 11.2 10.2
Corporation tax 6.5 7.5 – –
Other taxes and social security 0.5 0.3 – –
Other creditors 1.5 3.5 0.4 1.5
Accruals and deferred income 8.2 7.2 0.2 0.1
Proposed dividend 4.6 4.3 4.6 4.3
34.9 39.3 102.9 95.0
Other creditors of the Group include deferred consideration of £nil (2002: £1.3 million) in respect of the acquisition of TNO Crash Dummies
BV and Ogle TNO Safety Products Limited (together FTSS Europe) which was paid in September 2002. Of the amount payable as at 30th
April 2002, £1 million was within other creditors of the Company.
15. Creditors: amounts falling due after more than one year
Group Group Company Company
2003 2002 2003 2002
£’m £’m £’m £’m
Bank loans – 8.8 – 8.8
Other creditors 0.2 0.3 – –
Pension obligations 0.3 0.5 – –
Amounts owed to subsidiaries – – 80.2 79.8
0.5 9.6 80.2 88.6
Bank loans and overdrafts repayable:
Within one year 3.7 6.7 86.5 78.9
Between one and two years – 8.8 – 8.8
3.7 15.5 86.5 87.7
At 30th April 2003 the Group had an unsecured multi-currency revolving credit facility of US $59 million. On 25th June 2002 the term loan
facility of US $18 million existing as at 30th April 2002 was converted into an amortising revolving credit facility. All facilities are repayable on
30th April 2004. As at the year end US $3 million and sterling £1.8 million were drawn down. The facilities carry interest at 1.1% above LIBOR.
In October 2001, the Group entered into an interest rate swap to fix the interest rates on approximately half the then estimated drawings under
its bank facilities. As a result of the accelerated repayment of debt, the fair valuation of the obligations under the swap was charged to interest
payable in the year ended 30th April 2003 (see note 5).
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First Technology 2003
16. Deferred tax
Group Company
£’m £’m
1st May 2002 2.6 0.4
Charged to profit and loss account (0.7) (0.4)
Exchange difference (0.1) –
30th April 2003 1.8 –
The analysis of the deferred tax asset included in debtors is as follows:
Group Group Company Company
2003 2002 2003 2002
£’m £’m £’m £’m
Accelerated capital allowances 0.2 – – –
Other short term timing differences 1.6 2.6 – 0.4
1.8 2.6 – 0.4
17. Pension arrangements
The Group operates various pension arrangements according to local conditions and practices of each country. The total pension costs charged
for the year were as follows:
2003 2002
£’m £’m
Defined benefit schemes 0.6 0.8
Defined contribution schemes 0.7 0.7
1.3 1.5
There are two defined benefit schemes in the UK, the First Technology Scheme and the City Technology Scheme, both of which are closed to
new members. The assets of each scheme are held separately from those of the Group, being held in trustee administered funds.
Full actuarial valuations are performed triennially by independent qualified actuaries and the results are then reviewed and updated for the 30th
April year ends. The last full actuarial valuation was carried out on 5th April 2003 in respect of the First Technology Scheme and 1st January
2001 in respect of the City Technology Scheme.
The following disclosures have been made in accordance with FRS 17 – Retirement Benefits, which has been adopted in full.
(a)The major actuarial assumptions used to calculate the schemes’ assets, liabilities and contribution rates as a range for the two schemes were:
At At At
30th April 30th April 30th April
2003 2002 2001
% %%
Rate of increase in salaries 3.5 – 4.0 3.8 – 4.9 3.6 – 4.7
Rate of increase in pensions in payment 2.5 – 3.3 2.8 – 3.0 2.6 – 3.0
Discount rate 5.1 – 5.5 5.7 – 6.0 6.0 – 6.5
Inflation assumption 2.5 2.8 – 2.9 2.6 – 2.7
Notes to the Accounts
for the year ended 30th April 2003
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First Technology 2003
17. Pension arrangements continued
(b) Analysis of the value of the schemes’ assets and liabilities:
Expected Expected Expected
rate of Fair value rate of Fair value rate of Fair value
return at at return at at return at at
30th April 30th April 30th April 30th April 30th April 30th April 
2003 2003 2002 2002 2001 2001
£’m £’m £’m
Equities 7.9 – 8.7% 5.3 7.6 – 7.9% 6.4 7.8 – 7.9% 6.2
Bonds 5.1 – 5.5% 3.6 5.2 – 6.0% 3.4 5.4 – 6.5% 3.2
Other assets 4.5 – 4.6% 5.4 5.2 – 5.3% 4.5 5.2 – 5.3% 3.9
Total fair value of schemes’ assets 14.3 14.3 13.3
Present value of schemes’ liabilities (17.2) (16.2) (13.2)
(Deficit)/surplus in the schemes (2.9) (1.9) 0.1
Related deferred tax 0.9 0.6 –
Net pension (liability)/asset (2.0) (1.3) 0.1
(c) Analysis of the movement in the schemes’ (deficit)/surplus during the year 
2003 2002
£’m £’m
Net opening (deficit)/surplus in the schemes (1.9) 0.1
Current service cost (0.6) (0.8)
Contributions 1.2 1.4
Other finance income – 0.1
Actuarial losses (1.6) (2.7)
Closing deficit in the schemes (2.9) (1.9)
(d) Analysis of the amount charged to operating profit
2003 2002
£’m £’m
Current service costs 0.6 0.8
Contributions are determined by the schemes’ actuaries. The contribution rate for the current year was 90.2% of pensionable earnings for the
First Technology Scheme, reducing to 21.5% from November 2002. In respect of the City Technology Scheme the contribution rate for the
current year, and through to the next valuation at 1st January 2004, was 11.7% of pensionable earnings.
Following the valuation of the First Technology Scheme at 5th April 2003, contributions in respect of future service have been set at 16.7% of
pensionable earnings. Additional contributions of £0.4 million per annum are being made to amortise the deficit over three years.
As both schemes are closed to new members, the current service cost is expected to increase as members approach retirement.
(e) Analysis of the amount credited/(charged) to other finance costs
2003 2002
£’m £’m
Expected return on the schemes’ assets 1.0 1.0
Interest on the schemes’ liabilities (1.0) (0.9)
Net finance return – 0.1
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First Technology 2003
17. Pension arrangements continued
(f) Analysis of amount recognised in the statement of total recognised gains and losses (STRGL)
2003 2002 2001
£’m £’m £’m
Actual return less expected return on pension scheme assets (1.1) (1.0) (1.3)
Percentage of scheme assets (7.5%) (7.0)% (9.8%)
Experience gains and losses on scheme liabilities 0.7 (0.1) 0.2
Percentage of the present value of the scheme liabilities (3.7%) 0.6% (1.5%)
Changes in assumptions underlying the present value of scheme liabilities (1.2) (1.6) (0.2)
Percentage of the present value of the scheme liabilities 6.8% 9.9% 1.5%
Total actuarial losses recognised in the STRGL (1.6) (2.7) (1.3)
Percentage of the present value of the scheme liabilities 9.4% 16.7% 9.8%
18. Called up share capital
2003 2002
Number Number
of shares £’m of shares £’m
Authorised:
Ordinary shares of 10p 106,500,000 10.7 106,500,000 10.7
Allotted called up and fully paid:
Ordinary shares of 10p 75,349,781 7.5 75,342,292 7.5
During the year, under the First Technology PLC Employee, 1994 Executive and 1994 Savings Related Share Option Schemes, the Company
issued 7,489 ordinary shares of 10p each credited as fully paid with a nominal value of £749 and exercise value of £20,093 between 129p and
334p per share. 
The following outstanding options have been granted to the directors and employees of the Group under the First Technology PLC 1994 and
2001 Executive Share Option Schemes and the First Technology PLC US Stock Option Plan, all of which are normally exercisable between 3 and
10 years from the date of grant.
Last date when exercisable Number of shares Exercise price
19th January 2006 21,420 150p
24th February 2008 306,577 334p
28th October 2009 702,500 $8.11/497p
15th December 2009 8,000 $8.24/512p
27th April 2010 28,736 435p
31st July 2010 110,329* 611.5p
9th August 2010 294,000* $9.20/612p
23rd May 2011 92,000* $6.71/454p
10th July 2011 398,500* $6.26/442p
29th July 2012 81,991** $5.29/339p
29th July 2012 56,009*** $5.29/339p
27th March 2013 646,200** 175p
These options will only vest if the growth in headline earnings per share over three consecutive years exceeds the growth in the Retail Price Index
as indicated. 
*** by an average of at least 2%
*** by an average of at least 3%
*** by an average of at between 3% and 13% on a sliding scale
The performance criteria, where applicable, in respect of all other subsisting options have been met.
In the event that the performance criteria for the options denoted by ** or *** are not met at the end of the initial three year period, the relevant
options will lapse.
Notes to the Accounts
for the year ended 30th April 2003
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First Technology 2003
18. Called up share capital continued
Following the acquisition of City, the City Technology Holdings plc Executive Share Option Scheme has granted the following replacement
options over shares in First Technology PLC.
Last date when exercisable Number of shares Exercise price
18th June 2006 18,739 426.8p
31st October 2007 20,500 426.8p
28th September 2009 41,000 423.9p
12th December 2009 11,537 341.5p
No further performance criteria apply to these replacement options.
The following outstanding options have been granted to the directors and employees of the Group under the First Technology PLC 1994
Savings Related Share Options Scheme. Options are normally exercisable after 3 and 5 years from the date of grant and at six monthly intervals
thereafter and there are no performance conditions.
Date of grant Number of shares Exercise price
14th August 1997 3,911 194p
24th August 1998 2,461 296p
5th January 1999 521 259p
9th August 2000 31,499 466p
7th August 2001 121,470 356p
The share price at 30th April 2003 was 223.0p (2002: 451.5p) and the highest and lowest share prices during the year were 478.5p and 162.5p
respectively (2002: highest and lowest 483.5p and 297.5p respectively).
19. Movements on reserves
Group Share Profit and
premium Merger loss
account reserve account
£’m £’m £’m 
1st May 2002 48.7 69.6 37.6
Retained loss for the year –– (1.5)
Foreign currency translation –– (0.1)
Actuarial losses recognised –– (1.6)
Deferred tax on actuarial losses –– 0.5
30th April 2003 48.7 69.6 34.9
Included within the profit and loss account reserve is £(2.0) million (2002: £(1.3) million) relating to the pension liability net of deferred tax. 
Foreign currency translation is stated after a related tax credit of £0.4 million (2002: charge £0.3 million), after offsetting a £3.6 million gain on
translation of foreign currency borrowings (2002: £1.0 million).
Company Share Profit and
premium loss
account account
£’m £’m 
1st May 2002 48.7 3.0
Retained profit for the year – 1.5
30th April 2003 48.7 4.5
The profit after tax of the Company was £8.7 million (2002: £4.2 million). As permitted by section 230 of the Companies Act 1985, the profit
and loss account of the Company is not presented as part of these financial statements.
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First Technology 2003
20. Reconciliation of movements in equity shareholders’ funds
2003 2002
£’m £’m
Profit attributable to shareholders 5.7 13.7
Other recognised losses relating to the year (net) (1.2) (2.5)
4.5 11.2
Dividends paid and proposed (7.2) (6.8)
Issue of ordinary shares, net of expenses – 0.5
Net (reduction in)/addition to shareholders’ funds (2.7) 4.9
Opening shareholders’ funds 163.4 158.5
Closing shareholders’ funds 160.7 163.4
21. Analysis of cash flows
2003 2002
£’m £’m
Returns on investments and servicing of finance
Interest paid (0.7) (1.4)
Interest received – 0.1
Net cash outflow from returns on investments and servicing of finance (0.7) (1.3)
Taxation
UK corporation tax paid (2.4) (0.1)
Overseas tax paid (1.9) (3.2)
Taxation paid (4.3) (3.3)
Capital expenditure and financial investment
Purchase of tangible fixed assets (4.6) (4.1)
Purchase of trade investments (0.5) –
Net cash outflow from capital expenditure and financial investment (5.1) (4.1)
Acquisitions and disposals
Acquisition of businesses (see below) (1.7) (4.0)
Net cash outflow from acquisitions and disposals (1.7) (4.0)
Financing
Issue of ordinary shares (net of costs paid) – 0.6
Drawdown/(repayment) of revolving credit facility 1.0 (11.5)
Repayment of term loans (11.6) (6.3)
Net cash outflow from financing (10.6) (17.2)
The cash outflow in the year in respect of the acquisition of businesses relates primarily to deferred consideration due to the vendors of FTSS
Europe, acquired in September 1999. The cash outflow for the acquisition of businesses in the previous year relates to deferred consideration of
which the majority was due to the vendors of Capteur.
Notes to the Accounts
for the year ended 30th April 2003
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First Technology 2003
22. Analysis and reconciliation of net (debt)/cash
1st May Cash Non-Cash Exchange 30th April
2002 flow movement movement 2003
£’m £’m £’m £’m £’m
Cash at bank and in hand 3.2 0.1 – 0.5 3.8
Overdrafts (0.7) 0.4 – 0.1 (0.2)
2.5 0.5 – 0.6 3.6
Debt due within 1 year (6.0) 3.8 (1.9) 0.6 (3.5)
Debt due after 1 year (8.8) 6.8 1.8 0.2 –
Net (debt)/cash (12.3) 11.1 (0.1) 1.4 0.1
2003 2002
£’m £’m
Increase/(decrease) in cash in the year 0.5 (1.8)
Cash outflow from decrease in debt 10.6 17.8
Decrease in net debt relating from cashflows 11.1 16.0
Amortisation of facility fees (0.1) (0.1)
Translation differences 1.4 0.1
Decrease in net debt in the year 12.4 16.0
Net debt at 1st May (12.3) (28.3)
Net cash/(debt) at 30th April 0.1 (12.3)
23. Lease commitments
At 30th April the Group was committed to making the following payments during the next year in respect of operating leases:
2003 2002
£’m £’m
Land and buildings:
Expiring within 1 year 0.1 0.1
Expiring in years 2 to 5 0.5 0.5
Expiring thereafter 0.7 0.7
1.3 1.3
Other assets:
Expiring within 1 year 0.1 0.1
Expiring in years 2 to 5 0.1 0.1
0.2 0.2
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First Technology 2003
24. Derivatives and financial instruments
The Financial Review on pages 14 to 17 provides an explanation of the role that financial instruments have had during the period in creating or
changing the risks the Group faces in its activities.
Short term debtors and creditors have been excluded from the disclosures, other than the currency disclosures.
For the maturity profile of the Group’s financial liabilities refer to note 15.
Currency profile
The table below shows the Group’s currency exposures; in other words, those transactional exposures that give rise to the net currency gains and
losses recognised in the profit and loss account. Such exposures comprise the monetary assets and liabilities of the Group that are not
denominated in the functional currency of the operating unit involved, other than certain non-sterling borrowings treated as hedges of net
investments in overseas operations. At 30th April 2003, these exposures were as follows:
Functional currency of Group operation Net foreign currency monetary assets
US$ Euro Total
£’m £’m £’m
At 30th April 2003
Sterling 0.4 – 0.4
Euro 0.4 – 0.4
0.8 – 0.8
At 30th April 2002
Sterling 2.2 1.6 3.8
US Dollar – 0.8 0.8
2.2 2.4 4.6
Interest rate profile
The Group has no financial assets other than cash, all of which are at floating market rates. At the year end the underlying currencies of the
Group’s cash deposits were as follows:
2003 2002
Currency £’m £’m
Sterling – 0.3
US Dollars 1.9 0.7
Euro zone 2.2 1.2
Yen 1.6 1.0
5.7 3.2
The Group has net cash deposits at 30th April 2003 of £3.8 million (2002: £3.2 million) after setting off an overdraft of £1.9 million (2002:
£nil).
Notes to the Accounts
for the year ended 30th April 2003
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First Technology 2003
24. Derivatives and financial instruments continued
The £1.9 million overdraft is included within £3.6 million Sterling financial liabilities in the following analysis of the aggregate carrying amount
of the Group’s financial liabilities by principal currency:
Non interest Variable Fixed
bearing interest rate interest rate Total
£’m £’m £’m £’m
At 30th April 2003
Sterling – 3.6 – 3.6
US Dollar – 2.1 – 2.1
Euro 0.3 – – 0.3
0.3 5.7 – 6.0
At 30th April 2002
US Dollar – 3.5 12.3 15.8
Euro 0.2 – – 0.2
0.2 3.5 12.3 16.0
The non-interest bearing financial liabilities have a maturity profile of 2 to 5 years. The average variable rate is at 1.1% over LIBOR and all
mature within one year.
Fair values of financial assets and liabilities
There is no material difference between the fair value and book value of the Group’s financial assets and liabilities.
The value of forward foreign exchange contracts is the amount the Group would expect to pay or receive on the termination of the contracts,
taking into account current exchange rates. At 30th April 2003 the value of open forward foreign exchange contracts was a loss of £0.3 million
(2002: loss of £0.1 million).
The fair value of the interest rate swap as at 30th April 2003 was a loss of £0.1 million (2002: loss of £0.1 million), which has been charged to
finance costs in the year following early repayment of debt.
25. Contingent liabilities
Company
The Company has guaranteed the property lease commitments of certain subsidiaries with annual rentals amounting to £0.7 million (2002:
£0.7 million).
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First Technology 2003
First Technology PLC, which is registered in England and Wales, has the following principal operating subsidiaries all of which are wholly but 
indirectly owned:
Subsidiary Nature of business
These companies are registered in
England and Wales and operate in the UK:
City Technology Limited Designs, manufactures and supplies gas sensors.
First Inertia Switch Limited Designs, manufactures and supplies sensors and electronic modules.
First Technology Safety Systems (UK) Limited Designs and manufactures crash test dummy components.
These companies are incorporated
and operate in the USA:
Control Devices Inc. Designs, manufactures and supplies sensors and electronic ceramic components.
First Inertia Switch Limited Designs, manufactures and supplies sensors and electronic modules.
First Technology Safety Systems Inc. Designs, manufactures and supplies crash test dummies and related
equipment, services and analytical products primarily for automotive applications.
HITEC Corporation Designs, manufactures and supplies strain gauges, ancillary sensors, load cells
and torque transducers and associated services.
This company is incorporated in
the Dominican Republic:
First Technology Dominicana S.A. Manufactures circuit breakers, electronic and electromechanical sensors,
and crash test dummy components.
This company is incorporated
and operates in the Netherlands:
First Technology Safety Systems (Europe) B.V. Designs, manufactures and supplies crash test dummies and related equipment.
These companies are incorporated
and operate in France:
Réalisations et Diffusion pour I’Industrie S.A.S. Distributes electronics and other products in Europe.
First Technology Europe S.A.S. Provides marketing and support services in Europe for the Automotive and Special 
Products Division.
This company is incorporated
and operates in Japan:
K.K. First Technology Safety Systems Supplies and services automotive crash test dummies and related safety equipment.
Composition of the Group
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First Technology 2003
NOTICE IS HEREBY GIVEN that the Eighteenth Annual General Meeting of First Technology PLC will be held at the offices of Nabarro Nathanson,
Lacon House, Theobald’s Road, London WC1X 8RW, on 18th September 2003 at 11.00 am for the following purposes.
1. To receive and adopt the directors’ Report and Accounts for the year ended 30th April 2003.
2. To declare a final dividend for the year ended 30th April 2003 of 6.1p per share.
3. To re-elect Mr K D Breen as a director.
4. To re-elect Mr D P H Burgess as a director.
5. To elect Mr J Shepherd as a director.
6. To approve the directors’ remuneration report for the year ended 30th April 2003.
7. To appoint Deloitte & Touche LLP as Auditors.
8. To authorise the directors to agree the auditors’ remuneration.
To transact any other ordinary business and as special business to consider, and if thought fit, to pass, the following resolutions; Resolution Number 9
being proposed as an Ordinary Resolution and Resolutions Number 10 and 11 as Special Resolutions namely:
9. THAT, for the purposes of Section 80 of the Companies Act 1985, the directors be and they are hereby generally and unconditionally authorised to
exercise all the powers of the Company to allot relevant securities (within the meaning of the said Section 80) up to an aggregate nominal amount of
£2,511,659 (representing approximately 33% of the present issued share capital) provided that this authority shall expire on 17th September 2008
except that the Company may before the expiry of such period make an offer or agreement which would or might require relevant securities to be
allotted after the expiry of such offer or agreement as if the authority conferred hereby had not expired, this authority to replace any existing like
authority which is hereby revoked with immediate effect.
10. THAT, subject to the passing of Resolution Number 9, the directors be and they are hereby empowered pursuant to Section 95 of the Companies Act
1985 to allot equity securities (as defined in Section 94 of the said Act) for cash pursuant to the authority conferred upon them by Resolution
Number 9 as if Section 89(1) of the said Act did not apply to any such allotment provided that the power conferred by this Resolution shall be
limited:
(a) to the allotment of equity securities in connection with a rights issue or any other pre-emptive offer in favour of the holders of equity securities
where the equity securities respectively attributable to the interests of all such holders are proportionate (as nearly as may be) to the respective
numbers of equity securities held by them subject only to such exclusions or other arrangements as the directors may consider appropriate to deal
with fractional entitlements or legal and practical difficulties under the laws of, or the requirements of any recognised regulatory body in, any
territory or otherwise; and
(b) to the allotment (otherwise than pursuant to sub-paragraph (a) above) of equity securities up to an aggregate nominal amount of £376,748
(representing approximately 5% of the present issued share capital)
and shall expire on 17th September 2008 unless renewed or extended prior to or at such meeting except that the Company may, before the 
expiry of any power contained in this Resolution, make an offer or agreement which would or might require equity securities to be allotted after 
such expiry and the directors may allot equity securities in pursuance of such offer or agreement as if the power conferred hereby had not expired.
Notice of Meeting
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First Technology 2003
11. THAT, the Company is hereby generally and unconditionally authorised to make market purchases (within the meaning of Section 163 of the
Companies Act 1985) of ordinary shares of 10p each (“ordinary shares”) in the capital of the Company provided that:
(a) the maximum number of ordinary shares hereby authorised to be purchased shall be 7,534,978 (being approximately 10% of the present issued
share capital);
(b) the minimum price (exclusive of expenses) which may be paid for each ordinary share shall not be less than the nominal value thereof; 
(c) the maximum price (exclusive of expenses) which may be paid for each ordinary share shall not exceed 105% of the average middle market
quotation for an ordinary share as derived from the London Stock Exchange Daily Official List for the five business days preceding the day of
purchase;
(d) the authority hereby conferred shall expire on whichever is the earlier of the conclusion of the next Annual General Meeting of the Company and
the date falling 15 months from the date of the passing of this Resolution unless renewed or extended prior to or at such meeting except that the
Company may, before the expiry of any power contained in this Resolution, make a contract to purchase ordinary shares prior to the expiry of
such authority which will or may be executed wholly or partly after the expiry of such authority and may make purchases of ordinary shares in
pursuance of that authority.
By Order of the Board
N W H Clayton
Secretary
Registered Office
2 Columbus Drive
Summit Avenue
Southwood
Farnborough
Hampshire
GU14 0NZ
22nd July 2003
NOTES
A member entitled to attend and vote at the meeting may appoint one or more proxies to attend and, on a poll, to vote on his behalf. A proxy need not be a member of the Company.
Forms of proxy to be valid should be completed and returned (together with the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of such power or
authority) so as to reach the office of the Company’s Registrars not less than 48 hours before the time fixed for the meeting. Completion of a form of proxy does not preclude a member from
subsequently attending and voting in person.
The Company, pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, specifies that only those shareholders, registered on the Register of Members as at 11am on 16th
September 2003, shall be entitled to attend and vote at the meeting in respect of shares registered in their name at the time. Changes to entries on the relevant Register of Members after 11am on
16th September 2003 shall be disregarded in determining the rights of any person to attend or vote at the meeting.
Notice of Meeting
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First Technology 2003
Note 2003 2002 2001 2000 1999
£’m £’m £’m £’m £’m
T urnover 127.6 137.0 145.1 116.8 60.8
Operating profit before exceptional reorganisation
and integration costs and goodwill items 26.5 30.1 32.2 22.7 13.6
Reorganisation and integration costs (1.5) (0.3) (1.7) (1.7) –
Goodwill:
– amortisation (8.7) (8.7) (8.5) (4.0) (0.3)
– impairment (4.9) ––––
Operating profit 2 11.4 21.1 22.0 17.0 13.3
Profit before tax on ordinary activities 2 10.4 19.7 18.9 15.2 13.9
Headline earnings per share 1,2,3 27.2p 30.0p 29.8p 23.9p 18.8p
Dividends per share 3 9.5p 9.0p 8.6p 7.2p 5.7p
Shareholders’ funds 2 160.7 163.4 158.5 143.5 74.8
Net cash/(debt) 4 0.1 (12.3) (28.3) (37.1) (16.5)
Notes
1. Headline earnings are calculated on the profits attributable to shareholders after taxation excluding integration and reorganisation costs and
goodwill items.
2. Results for the year ended 30th April 2001 have been restated to reflect the adoption of FRS 17 – Retirement Benefits.
3. Earnings and dividends per share have been adjusted for the bonus element of the rights issue on 6th April 1999.
4. Net cash/(debt) comprise cash less bank borrowings.
Five Year Financial Summary
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First Technology 2003
United Kingdom
First Technology PLC First Technology Automotive City Technology Ltd First Technology
9 High Street 2 Columbus Drive City Technology Centre Safety Systems (UK) Ltd
Egham Summit Avenue Walton Road Birds Hill
Surrey Southwood Portsmouth Letchworth Garden City
TW20 9EA Farnborough Hampshire Hertfordshire
Tel +44 (0) 1784 221500 Hampshire PO6 1SZ SG6 1JA
Fax +44 (0) 1784 221525 GU14 0NZ Tel +44 (0) 23 9232 5511 Tel +44 (0) 1462 687800
www.firsttech.co.uk Tel +44 (0) 1252 375875 Fax +44 (0) 23 9238 6611 Fax +44 (0) 1462 473072
Fax +44 (0) 1252 375825 www.citytech.com www.ftss.com
www.1firsttech.com
France
First Technology Réalisations et Diffusion
Europe S.A.S. pour I’Industrie S.A.
5–7 allée Louis Bréguet 5–7 allée Louis Bréguet
93421 Villepinte 93421 Villepinte
Tel +33 (0) 1 49 63 56 25 Tel +33 (0) 1 49 63 12 72
Fax +33 (0) 1 49 63 56 55 Fax +33 (0) 1 49 63 56 66
www.1firsttech.com www.rdi.fr
Netherlands Luxembourg Germany
First Technology First Technology S.à.r.l First Technology
Safety Systems Europe BV 26 Boulevard Royal Safety Systems Germany GmbH
Schoemakerstraat 97 L-2449 Luxembourg Im Neuenheimer Feld 584
PO Box 6045 Tel +352 22 99 99 52 06 D - 69120 Heidelberg
2600 JA Delft Fax +352 22 99 99 54 99 Tel +49 (0) 6221 65 40 74
Tel +31 (0) 15 269 7271 www.ftss.com
Fax +31 (0) 15 269 7106
www.ftss.com
North America
First Technology Automotive First Technology Automotive First Technology Automotive First Technology Dominicana SA
and Special Products G-10386 North Holly Road and Special Products Box 2775
228 Northeast Road PO Box 480 60 Access Highway Parque Industrial
Standish Grand Blanc Caribou ITABO Santo Domingo
Maine 04084-6919 Michigan 48439 Maine 04736 Dominican Republic
Tel +1 (207) 642 4535 Tel +1 (810) 695 8333 Tel +1 (207) 498 3164 RNC 1-22-00906-1
Fax +1 (207) 642 0198 Fax +1 (810) 695 0589 Fax +1 (207) 498 6137 Tel +1 (809) 546 4836
www.1firsttech.com www.1firsttech.com www.1firsttech.com Fax +1 (809) 547 4847
North American Sales Office First Technology HITEC Corporation
28411 Northwestern Highway Safety Systems Inc. 65 Power Road
Southfield 47460 Galleon Drive Westford
Michigan 48034 Plymouth Massachusetts 01886-4199
Tel +1 (248) 353 6200 Michigan 48170 Tel +1 (978) 692 4793
Fax +1 (248) 353 8333 Tel +1 (734) 451 7878 Fax +1 (978) 692 5078
www.1firsttech.com Fax +1 (734) 451 9549 www.hitecorp.com
www.ftss.com
Japan
K K First Technology First Technology
Safety Systems (Japan) Safety Systems Technical Center
Monzennakacho Building 9th Floor 93 Motomachi, Terano
1-2 - 13 Etchujima, Koto-Ku Nishi-Kasugai-Gun
Tokyo 135 Aichi 452-0908
Tel +81 (0) 3 5245 6091 Tel +81 (0) 5 2401 7501
Fax +81 (0) 3 5245 6092 Fax +81 (0) 5 2401 7502
Group Addresses
First Tech a/c 2003 a/w  7/24/03  10:48 AM  Page 60 61
First Technology 2003
Design Carr Kamasa Design  Print management Anderson Gibb Associates Limited
18th September 2003
Annual General Meeting
11.00am at Nabarro Nathanson
Lacon House,
Theobald’s Road,
London, WC1X 8RW
7th October 2003
Payment of final ordinary dividend
December 2003
Announcement of half-year results
March 2004
Payment of interim ordinary dividend
June 2004
Preliminary announcement of full-year results
Shareholder Information
Company announcements, press releases, up to date share price
information and further information on Group Companies can be
obtained on our web site at www.firsttech.co.uk.
Lloyds TSB Registrars are offering a range of shareholder information on
line, you can check your holding and find practical help on transferring
shares or updating your details at www.shareview.co.uk.
The Company has specified recycled paper for the production of this Annual Report.
Section One of the report is printed on Mega Matt which is made from 50% recycled
and 50% chlorine-free pulp. Section Two is printed on Arcoprint which is acid-free, low
in chlorine content, completely bio-degradable and recyclable.
The photograph on the cover showing a vehicle in a crash impact test is reproduced
courtesy of TNO Crash Safety.
Financial Calendar
FTSE4Good Index Series
First Tech a/c 2003 a/w  7/24/03  10:48 AM  Page 61 9 High Street
Egham, Surrey TW20 9EA
www.firsttech.co.uk
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