Novar plc
Novar House
24 Queens Road
Weybridge
Surrey KT13 9UX
England
Telephone: +44 (0) 1932 850 850
Fax: +44 (0) 1932 823 328
Website: www.novar.com
Annual report 
and accounts 2003
Novar plc Annual Report and Accounts 2003
969_FC_BC  18/3/04  3:48 pm  Page 1  Intelligent Building Systems
Contents
01 Highlights
02 Chairman’s statement
04 Group Chief Executive’s review
06 Intelligent Building Systems
08 Indalex Aluminum Solutions
10 Security Printing Services
12 Operating review
15 Financial review
18 The Board
Register online
You can receive our Annual Report online
by email. Register through
www.novar.com, select the 
‘Investors’ section, click on 
‘Electronic Communications’ 
and then follow the instructions.
North America’ s second
largest supplier of 
extruded aluminium
components and
services. The company
serves many industry
sectors including 
building and
construction, consumer
durables, electrical 
and cable, machinery
and equipment, 
transportation and
distribution, and
automotive.
Clarke American 
and Direct Marketing
Solutions provide
cheques and 
cheque-related
products, contact 
centre services 
and direct response
marketing solutions 
to more than 4,000 US
financial institutions.
Supplier of products
and services to 
the construction
industry and building
operators worldwide.
The strength of 
the business lies 
in its global reach, 
and its leading 
and comprehensive 
product portfolio 
of building
management, control
and electrical and 
data solutions.
19 Report of the Directors
23 Corporate Social Responsibility
24 Report to shareholders 
on Directors’ remuneration
28 Independent auditors’ report
29 2003 results
47 Notice of Annual General Meeting
48 Notice of Class Meeting
49 Shareholder information
                                                          Novar at a glance
Novar’ s global presence
 Indalex Aluminum Solutions  Security Printing Services
      49
Novar annual report 2003
Shareholder information
Shareholder information
Dividends 
Ordinary shares
Final (if approved) payment date 4 June 2004 
Interim announcement 27 July 2004 
Cumulative Preference shares
Payment dates 1 June 2004 and 
1 December 2004 
“B” shares
Payment dates 20 May 2004 and 
22 November 2004 
Novar Nominee Service
This service is available to shareholders who wish to hold and deal
in Novar Ordinary shares through the CREST settlement system.
For details shareholders should contact the Registrars.
Dividend Reinvestment Plan
A dividend reinvestment plan is available to Ordinary shareholders
which allows their cash dividend to be reinvested in the Company’ s
shares. Details of the Plan are available from the Registrars.
Low Cost Dealing Facility
A low cost dealing facility in the Company’s Ordinary shares is
available for all shareholders from the Company’s stockbrokers,
Cazenove & Co. Ltd., telephone 020 7588 2828.
Electronic shareholder communication
All shareholders can now receive future shareholder communi-
cations (e.g. Annual Report, Notice of AGM and forms of Proxy) via
the Internet. Shareholders wishing to register for this service should
log on to the company website, www.novar.com, select the
“Investors” section, click on “Electronic Communications” and then
follow the instruction for registration of their details. Shareholders
will also need their shareholder reference number which can be
found on the dividend counterfoil or share certificate.
By registering for the online service shareholders will be able to:
• access information on their shareholdings (shares held, recent
share transactions, dividends etc.);
• appoint a proxy to vote on their behalf by following details on
the forms of proxy in respect of each general meeting; and
• obtain a valuation of their shareholdings and a range of other
related information.
UK Tax on Capital Gains
For Capital Gains T ax purposes, the market prices of Novar shares
on 19 May 1997, the first day of dealing following the capital
reorganisation in May 1997, were as follows:
Ordinary shares of 27
7
⁄9p 217.5 pence per share
“B” shares of £1 97.5 pence per share
Preference shares of 16
2
⁄3p 113.5 pence per share
Registered Office
Novar House
24 Queens Road
Weybridge
Surrey KT13 9UX
Registered in England
Company number 2262172
Registrars
Computershare Investor Services PLC
PO Box 82
The Pavilions
Bridgwater Road
Bristol
BS99 7NH
Advisers
Auditors
Deloitte & T ouche LLP
London 
Solicitors
Freshfields Bruckhaus Deringer
65 Fleet Street
London EC4Y 1HS 
Stockbrokers
Cazenove & Co. Ltd.
20 Moorgate
London EC2R 6DA
Analyses of ordinary shareholdings
Shareholders Shares
at 31 December 2003 Number % Number (m) %
By range of holdings:
1 – 2,000 10,963 72.7 7.6 1.8
2,001 – 4,000 2,106 14.0 6.0 1.4
4,001 – 20,000 1,547 10.2 11.7 2.7
20,001 – 40,000 141 0.9 4.1 0.9
40,001 – 100,000 121 0.8 7.6 1.8
100,001 – 200,000 53 0.4 7.6 1.8
200,001 – 400,000 42 0.3 12.4 2.9
400,001 – 1,000,000 47 0.3 28.8 6.7
1,000,001 – 2,000,000 30 0.2 43.3 10.0
2,000,001 and above 36 0.2 301.9 70.0
15,086 100.0 431.0 100.0
By category:
Private Individuals 13,253 87.9 23.2 5.4
Investment and Pension Trusts 34 0.2 1.1 0.3
Pension Funds, Investment 
Banks and Nominees 1,635 10.8 397.9 92.3
Insurance Companies 15 0.1 3.9 0.9
Other Corporate Bodies 149 1.0 4.9 1.1
15,086 100.0 431.0 100.0
969_IFC_IBC  18/3/04  2:30 pm  Page 1 01
• Share gains in all sectors, with markets down.
• Reported sales of £1,431m grew 2% in constant
currencies and after contribution from acquisitions 
of £21m
1
.
• Adjusted Group Operating Profits
2
of £106m made
progress before increased pension charges of £13m, 
and negative currency impact of £4m. Acquisitions
contributed £3m.
• Headline earnings per share
3
of 11.2p grew 16% 
before adverse pension and currency impacts of 2.6p.
• A £93m non cash goodwill impairment charge leads 
to reported statutory Group Operating Loss of £30m,
and reported statutory loss per share of 17.9p.
• Cash inflow from operating activities grew 9% to £131m. 
• Proposed full year dividend maintained at 9.5p.
Notes
1 The stated incremental impact of acquisitions relates to businesses acquired in 2003 and 2002.
2 Adjusted Group Operating Profit is calculated from statutory Group Operating Loss of £30m 
adjusted for an exceptional goodwill impairment charge of £93m, goodwill amortisation of £24m 
and restructuring of £19m.
3 Headline earnings per share are defined as statutory reported loss per share adjusted for exceptional 
items and goodwill impairment and amortisation. 
Highlights
Novar annual report 2003
Highlights
969_01-05  18/3/04  12:52 pm  Page 01 Novar annual report 2003
Chairman’ s statement 02
“Our continued investment in
new products and marketing
initiatives, as well as the
ongoing restructuring
programme, have been
important factors in achieving
this resilient performance.”
In markets that proved to be difficult, Novar has
achieved a solid operating performance in spite
of the adverse impacts of a weak US dollar and
higher pension charges. Operating Cash Flow,
which remains a key performance indicator, has
remained strong.
Reported sales were broadly unchanged at
£1,431m, although this represented a 2%
improvement at constant currencies and including
acquisitions. Adjusted Group Operating Profits at
£106m (2002: £118m) were some 10% below 2002,
but grew 2% before absorbing £13m of additional
pension charges, £4m of adverse currency effects
and a £3m contribution from acquisitions. 
Our continued investment in new products and
marketing initiatives, as well as the ongoing
restructuring programme, have been important
factors in achieving this resilient performance.
The 2003 acquisition of Alerton building controls
in the US has performed well, and ahead of plan,
growing market share and margin. Alerton
contributed sales of £13m and operating profits
of £4m. The enhanced product and technology
offering which this acquisition has brought to our
customers in the US augurs well for the future.
In many of our markets we continue to face
challenging conditions. In particular the T elecoms
and Datacoms markets of Intelligent Building
Systems have been hard pressed, and, whilst
some recovery is expected, we have concluded it
would be prudent to write off £75m of goodwill
associated with this part of the business.
Furthermore, with vacant office space reaching
record levels in Germany last year, there appears
to be no likelihood of an early recovery in German
commercial office construction, the key demand
driver for our underfloor cable management
systems. We therefore consider it prudent to write
off £18m of goodwill in this business, even though
it remains in a strong, leading position in its market. 
2003 has also seen a number of changes to your
Board. I am delighted to welcome Daniel Dayan,
who, as Chief Executive of Intelligent Building
Systems, will continue to lead this business
forward. Charles Korbell has, at his request,
stepped down from the Board to spend more
time on the Security Printing business. We shall
miss having him as a fellow Director, though we
welcome his continued high commitment to the
Security Printing business, which has grown over
50% in the last ten years under his leadership.
I am very pleased that Hans Nilsson, Chief
Executive of Spectris plc, has agreed to join the
Board as an independent non-executive director.
His experience, particularly within the electronic
and controls industries, will be of great value to
Novar in continuing its strategic focus on strong
businesses in growth markets.
Gerry Murphy , after six years service, much of that
time as a highly effective Chairman of the Audit
Committee, has left the Board. He has been an
invaluable colleague; we thank him for all his
efforts on behalf of Novar and wish him every
success in the future. We are pleased that Oliver
Stocken, formerly Finance Director of Barclays
PLC, has agreed to take on the Chairmanship of
the Audit Committee.
In spite of the difficulties, Novar has made, and
continues to make, good progress in all three
operating divisions. This owes much to the efforts
of our employees, who remain committed to the
success of the business. I thank them on behalf of
my colleagues.
The Board is recommending an unchanged final
dividend of 6.6p per Ordinary share, payable on
4 June 2004 to all shareholders on the register at
the close of business on 30 April 2004.
Sir Graham Hearne
Chairman
Chairman’ s
statement
969_01-05  18/3/04  12:52 pm  Page 02 03
Novar annual report 2003
Chairman’ s statement continued
Novar has achieved a solid
operating performance in spite 
of the adverse impacts of a weak
dollar and higher pension charges.
We continue to make good
progress in all three operating
divisions. This owes much to 
the efforts of our employees, 
who remain committed to the
success of the business.
Key messages
969_01-05  18/3/04  12:52 pm  Page 03 Novar annual report 2003
Group Chief Executive’ s review 04
“Our businesses continue to
outperform their markets. 
We continue to invest to
enhance our competitiveness
and to accelerate our growth
once economic activity returns
to more normal levels.”
Our businesses continue to outperform their
markets. Our investments in new products and
commercial and market initiatives are driving our
share in markets that were generally down on
2002. Costs are coming down. We continue to
invest to enhance our competitiveness and to
accelerate our growth once economic activity
returns to more normal levels.
Intelligent Building Systems (IBS)
The reorganisation of the IBS sector into an
integrated global structure has created new
opportunities, by allowing us to promote the full
range of IBS solutions to our customers worldwide.
T o integrate delivery, a major restructuring of our
UK, US and German logistics operations has now
completed phase one, resulting in improved
delivery and cost performance.
In 2003, Novar Projects, established in the UK and
Germany, began to contribute substantial new
business. In the UK, we won the Fire Detection
and Building Control contracts at London
Heathrow’s new Terminal 5, worth more than
£40m to be delivered over the next several years.
We see further opportunities in the worldwide
airports market, as we are bringing on stream
exciting new products for these customers.
Overall, IBS trading performance reflects the
continued weakness in new commercial
construction in the UK, US and Germany, where
key markets were down 6% to 10%. Against this,
we achieved solid growth in the US, including
Alerton, and further growth in the Middle East
and Southern and Eastern Europe. Progress in
the UK was driven by a strong performance in Fire
Detection and Wiring Devices.
Indalex Aluminum Solutions
The North American soft alloy extrusions markets
saw some recovery in the final quarter of the year.
Over the full year the markets were down 1%,
while Indalex grew volumes 2%, outperforming 
in the key residential construction and
transportation markets.
Our partnership with Asia Aluminum Group
continues to prosper. Volumes sourced from 
Asia are up over 35% this year. Our continuing
investment in 25% of the Asia Aluminum Group
has recorded associated earnings of £6m 
(2002: £4m) and we have received a dividend 
of £1.9m (2002: £1.6m).
Security Printing Services
Security Printing had another strong year,
achieving record sales and operating profits in US
dollars. Margins improved as business grew in
the higher value added contact centre and
Internet order channels, and production costs
were cut. A major restructuring programme,
closing four printing plants and one older contact
centre, was completed in the year.
As announced at the interim results, Clarke
American’s contract with its largest partner bank
was renewed for another seven years and
extended to cover the provision of all of its
cheque related product and service
requirements. The new business was successfully
introduced at the end of the third quarter and will
contribute fully to earnings from 2004.
Current trading and outlook
Intelligent Building Systems markets remain
weak, with soft underlying demand for
commercial building construction everywhere.
Group Chief
Executive’ s
review
969_01-05  18/3/04  12:52 pm  Page 04 05
Novar annual report 2003
Group Chief Executive’ s review continued
Our investments in new products
and commercial and market
initiatives are driving our market
share gains.
The Fire Detection and Building
Control contracts at London
Heathrow’s new T erminal 5 
are worth more than £40m.
Indalex grew volumes 2%,
outperforming in the key
residential construction and
transportation markets.
Security Printing had another
strong year, achieving record sales
and operating profits in US dollars.
Key messages
We have important new products and project
activity coming on stream to drive market share.
Recently we have seen patchy improvement in
North American aluminium extrusions demand.
With pressure on pricing unabated, it is difficult 
to project this market for 2004. Indalex Aluminum
Solutions expects to continue to grow its 
market share and will also benefit from further
reductions in its fixed cost base.
The outlook for the US cheque market is slightly
down. Clarke American’s continuing success in
developing its contact centre and online
business, which enhances revenue per order,
should continue to support solid revenue and
profit performance of our Security Printing
business at constant currencies.
Restructuring costs are likely to be similar to
those in 2003, but more significantly weighted 
to the first half of the year. Importantly, the
continuing weakness and uncertain level of 
the US dollar will impact the reported results 
of our US based businesses, particularly in the
first half of 2004.
Despite the uncertain trends in demand, we
expect to make further underlying progress at
constant currencies as our investments in
markets, new products and cost productivity
continue to drive sales and margins.
Jurgen Hintz
Group Chief Executive
969_01-05  18/3/04  12:52 pm  Page 05 Novar annual report 2003
Intelligent Building Systems 06
IBS lands T erminal 5 
BAA has awarded 
a five year contract 
to Novar Projects for
the design, supply 
and installation of the
fire detection, voice
alarm and building
management systems
at T erminal 5, Heathrow .
6,500 employees
serving the worldwide construction industry
Operating in over 30 countries 
from North America through Europe, the Middle East and Asia
Comprehensive portfolio
including fire detection and alarm, energy management and environmental control,
access control and intruder alarm, CCTV , and data and cable management systems
Intelligent Building
Systems
969_06-11  18/3/04  12:52 pm  Page 06 07
Novar annual report 2003
Intelligent Building Systems continued
Novar Intelligent Building Systems is a global business
supplying electrical, electronic and control products
and services to building operators, contractors and
developers worldwide. With operations in over 30
countries in North America, Europe, the Middle East,
India, South East Asia and China, Novar’s intelligent
building systems include a wide range of high 
quality, innovative offerings for fire detection and 
alarm, energy management and environmental 
control, access control and intruder alarm, CCTV and
electrical and data connectivity.
Novar has a proven track record of bringing innovative
solutions, processes and products to the construction
industry. Today’s buildings are sophisticated
environments; they have complex requirements for
safety, comfort and effective business operations, in
other words, high intelligence, high capacity systems.
Novar Intelligent Building Systems works with customers,
installers, value added resellers, distributors, specifiers
and end-users. Our experience in delivering large scale
projects worldwide, across a broad scope of different
applications, is illustrated by the success we have had
with the Heathrow T5 project.
In 2003 BAA awarded Novar contracts worth more than
£40 million to supply the life-safety and building
management systems for Heathrow Terminal 5, one of
Europe’s largest and most sophisticated construction
projects. Comprising a Gent fire detection, voice alarm
and public address system and a Trend system to
control and monitor all heating, ventilation and air
conditioning plant serving the T5 campus, the Novar
package will be the largest of its type ever to be
installed in the UK. The systems’ use of innovative
technology, some of it being specially developed for
the project, will have significant whole-life cost benefits
for the new terminal. Novar’s use of advanced design,
testing and manufacturing techniques will play a crucial
part in ensuring successful completion of the contract.
The proven ability of its supply chain to achieve 
industry leading order turnaround times, while virtually
eliminating defects, will be especially important.
The systems at Terminal 5 will together establish new
benchmarks for the design, delivery, integration and
operation of life-safety and building services control
equipment, not just in airports but in commercial
buildings generally. Indeed Novar’s project
management skills and experience already extend well
beyond its established businesses in the UK, Germany
and North America.
The International Markets division of Intelligent Building
Systems is involved in a wide range of projects around
the world, with Novar products installed in many
landmark buildings including commercial office and
retail complexes, theatres, art galleries, hotels, hospitals
and major public infrastructure works.
In Spain, Esser’ s early warning fire detection system has
been installed in the financial “city” of the Banco de
Santander Central Hispano in Madrid. The complex 
of four buildings and some 35,000 square metres of
office space will house more than 25,000 Esser fire
detectors, monitored by Novar’s market leading
centralised management software system.
In Dubai, the Madinat Jumeirah resort complex,
designed to be one of the most luxurious resort
complexes in the world, will include MK’ s Insignia range
of wiring devices and Gent’s fire detection systems,
building on Novar’s success in supplying fire detection
and safety equipment at the neighbouring Jumeirah
Beach Hotel, featured below.
In Singapore, Novar is involved with several prestigious
building projects including the Stock Exchange
Building, the new Supreme Court, and Capital Tower,
with Gent, MK and Ega products all supplied and
installed. The Common Services Tunnel (Stage 1),
comprising some 1.4 kilometres of linked tunnels, will
accommodate a series of underground utilities such as
water pipes and power and telecommunications cables,
and is being designed to service the new downtown
financial and business hub development in Marina
South. In addition to T rend’ s building controls, there are
opportunities for electrical trunking and cabling and
wiring devices. Finally, Novar has recently been
awarded the contract to supply fire detection and 
life-safety systems at a large new terminal building 
at Changi Airport, building on its success at Heathrow.
A Gent integrated fire and voice alarm system is installed at the
600 room Jumeirah Beach Hotel in Dubai.
969_06-11  18/3/04  12:53 pm  Page 07 Novar annual report 2003
Indalex Aluminum Solutions 08
4 million square feet
of manufacturing space
16 extrusion plants 
in the USA and Canada
11 electrostatic paint lines 
and five anodising lines including some of the largest
capabilities in North America
Indalex Aluminum
Solutions
Light Transport Options
Indalex Aluminum Solutions
has teamed up with
transportation and
automotive suppliers 
such as Raufoss of 
Norway to supply lighter
aluminium components.
969_06-11  18/3/04  12:53 pm  Page 08 09
Novar annual report 2003
Indalex Aluminum Solutions continued
Indalex and Raufoss are set to grow their partnership in the 
tier one North American automotive suppliers market, with
lightweight aluminium suspension control arms.
Indalex is one of the world’ s largest aluminium extrusion
companies with a comprehensive network of plants
across North America and a strategic partnership
providing substantial additional offshore manufacturing
capacity. It is the largest independent buyer of
aluminium billet in the world. Indalex works closely 
with its customers to develop innovative technical
solutions specific to their needs. This includes both
design and engineering services, as well as fabrication
and finishing, and provides resources which are
dedicated to support their growth. The industries it
services are building and construction (both residential
and commercial), consumer durables, electrical and
cable, machinery and equipment, transportation and
distribution, and automotive.
The fastest growing segment of the North American
market for extruded aluminium components is
transportation. Of this, the truck trailer segment grew 
by 30% in 2003.
The use of extruded aluminium for commercial 
and recreational vehicles is expanding significantly 
as a result of growing demand and increasing
substitution of lighter weight aluminium instead of 
steel. From side panels and other components used 
in the growing truck trailer segment to everything 
from suspension systems to interior components 
in automobiles, the inherent characteristics of
aluminium are helping vehicle manufacturers to meet
federally mandated standards for fuel economy and
market demand for larger vehicles. This is being
achieved without sacrificing safety, or cargo and
passenger space.
Indalex is a key strategic supply partner with major 
truck trailer and specialised vehicle manufacturers in 
the United States. The company’s ability to deliver
shorter lead times and higher quality is supporting
increased sales to these high volume businesses. The
company’s strong and coordinated manufacturing
network in the US Midwest has also made it a major
supplier to the recreational vehicle market, as most
manufacturers are based in this geographic region
close to Indalex facilities.
In the automotive segment, Indalex has partnered with
Raufoss, a Norwegian tier one supplier to European
manufacturers such as Volvo, Audi and Saab, which is
making major inroads into the North American market.
Raufoss now supplies an aluminium-intensive
suspension system for General Motors’ new Epsilon
platform, and Indalex is the key long term supplier of
aluminium components for this programme. Production
of the first vehicle built on the Epsilon platform – the
2003 Chevrolet Malibu – was launched in the fourth
quarter of 2003. At full production, the Epsilon platform
will be featured on 400,000 to 600,000 vehicles across
several models. Additional applications for General
Motors, Ford, Volvo and other manufacturers include
everything from structural and interior components to
door hinges and headlight fixtures.
The combination of aluminium’s inherent advantages –
lightweight, strong and durable, corrosion resistant –
and a focused strategy well executed by the Indalex
team, is resulting in significant market share gains and
opening further growth opportunities for the future.
In order to support this expanding market, Indalex is
one of the first North American manufacturers to earn
the new ISO TS – 16949 certification for automotive
quality management systems. This will be mandated 
by global automobile manufacturers by 2006 and 
will replace the current QS: 9000: Third Edition
automotive quality standard (which will become
obsolete), and aligns existing US and European
automotive quality system standards. The new standard
specifies quality system requirements from design 
and development to production, installation and
servicing of automotive-related products, and focuses
on adding value, achieving customer satisfaction and
creating measurable continuous improvement.
Early achievement of this new global automotive
standard provides another key competitive advantage
for Indalex as it focuses on its partnership with the
leading automotive manufacturers in North America.
969_06-11  18/3/04  12:53 pm  Page 09 Novar annual report 2003
Security Printing Services 10
Clarke American delivers
Expert Solutions 
The Expert
®
Solutions
Program helps Clarke
American’s financial
institution partners to
meet the cheque ordering
and related service 
needs of the flourishing
small business market.
Security Printing 
Services
4,000 US financial institutions
use our cheque ordering solutions
12 electronically linked 
digital printing facilities produce world-class results
4 customer service centres
strategically located throughout the USA
deliver round the clock customer care
969_06-11  18/3/04  12:53 pm  Page 10 Novar annual report 2003
Security Printing Services continued 11
Clarke American produces more than 55 million cheque
orders a year and handles more than 17 million customer
and partner contacts annually on behalf of financial
institution partners, 24 hours a day, seven days a week.
The company utilises a fully integrated, electronically
linked network of world-class manufacturing facilities
and customer service centres, and serves more than
4,000 banking, credit union, and other financial
institution partners nationwide. The company has 3,200
employees (termed “associates”) and was honoured by
the US Department of Commerce as a recipient of the
2001 Malcolm Baldrige National Quality Award. 
Clarke American incorporates smart technology and
exceptional service to provide quality driven, customer
focused results for each market it serves. 
Engaging account holders in the ordering channel of
their choice enables the company to promote a wide
range of ancillary products and services which, in turn,
helps partners to develop and expand their own
customer relationships and grow their business. In
addition to selling cheque products and services, Clarke
American also offers Customer Marketing Solutions
which promote and provide information on the
products and services of each financial institution
directly to the account holder.
Direct Marketing Solutions comprises Checks In The
Mail and B
2
Direct. Checks In The Mail sells bank
cheques and accessories directly to consumers and
small business owners through free-standing inserts in
newspapers and direct mail placements. B
2
Direct
operates two business divisions, National Accounts and
TranSource. These divisions provide quality products
and services to a number of business segments
throughout the USA. Direct Marketing Solutions serves
3.8 million customers annually and employs over 500
associates in three locations.
Small businesses are big business in today’s economy.
Business cheque products and services represent a
substantial growth area for Clarke American’s financial
institution partners. 
Small businesses account for a majority of the private
US payroll, and are the source of more than 60% of new
jobs in America annually. In addition, the small business
market is one of the few showing signs of real economic
recovery, with an expected 4% annual growth rate
through to 2006. The fastest growing product line
among this small business segment is computer laser
cheques. These make bill paying quick and easy for
business owners and represent a significant market
opportunity . 
In order to assist partners with meeting the demands of
this thriving sector, Clarke American developed the
Expert Solutions Program. Expert Solutions is designed
specifically for business account holders and offers
direct contact with Clarke American customer service
consultants. The turnkey programme provides financial
institutions with everything they need to service
business account holders, from marketing kits and full
colour catalogues to branch training and telephone and
Internet ordering options. Expert Solutions saves time,
improves order accuracy and enhances revenue.
Business account holders can reach Clarke American
product experts via a toll-free telephone number or the
Internet, and have the option of placing their order from
the financial institution branch, or their own office, or
from home. The Expert Solutions ordering process is
thereby made simple and convenient, providing
products and services such as labels, security bags and
envelopes, in addition to the cheques themselves. 
Assisting financial institutions in growing and
deepening small business relationships is an example of
how Clarke American is accelerating its vision to be the
premier resource for partners in the delivery of
passionate customer care.
Clarke American’s associates strive to provide passionate
customer care, a goal that extends well beyond the Expert
Solutions Program.
969_06-11  18/3/04  12:54 pm  Page 11 Novar annual report 2003
Operating review 12
Operating review
Over the year, the markets served by Intelligent Building Systems
(IBS) have remained soft and below last year in aggregate. The
business has also faced increased pension charges of £10m, which
directly impact operating profit.
Against this background the business has recorded flat like for like
sales but delivered improved underlying profits, before
acquisitions, currencies and pension charges. Acquisitions in 
the year, principally Alerton, have made their planned positive
contribution to both sales and operating profits.
In these challenging markets, the business has continued to focus
on improving market shares in key markets; introducing and
developing new products; investing in new commercial initiatives
and delivering the anticipated benefits of restructuring and cost
reduction programmes.
New products introduced during 2003 represented 6% of total
sales. It is anticipated that the percentage of sales from new
products will grow rapidly as increased investment in research and
development of £4m (19%) results in more new product launches
over the next year to eighteen months.
Investments in new commercial initiatives include: the further
development of Novar Projects in the UK, which won significant
new business on Terminal 5 and other projects at London’s
Heathrow airport; strong growth in the UK retail channel, and
significant investment in strengthening our presence in the
growing markets of the Middle East and Latin America. We have
also consolidated 28 commercial offices across the world into 
13 enhanced premises, several with expanded customer training
facilities. These are providing our customers with improved 
access to the wide range of products and services offered by
Intelligent Building Systems.
The continuing investment in restructuring across the business 
now means that over 15% of output is sourced from low cost
countries. During the year, more production of electronic systems
and components was transferred to our low cost production facility
in Romania and one Electrical Accessories plant in the UK was
closed. The first phase of a warehouse and logistics consolidation
in the UK was also completed with six locations now consolidated
into two. The objectives of these projects are to improve customer
service, reduce working capital and lower operating costs.
Notes
See page 14
Group sales from continuing operations of £1,431m were 1% below
last year. They include an incremental £21m from 2002 and 2003
acquisitions and a £43m adverse impact from currency translation
movements. Excluding these items, like for like sales were flat
across the Group with Intelligent Building Systems sales
unchanged and the sales increase in Security Printing Services
offset by the lower sales in Indalex.
Adjusted Group operating profit for continuing operations was
£106m, 10% lower than the prior year. This includes a £4m adverse
currency translation movement, incremental profits of £3m from
2002 and 2003 acquisitions and an increased pension charge of
£13m. Like for like, and before the impact of the increased pension
charge, underlying profits rose by 2%.
As indicated, Adjusted Group operating profit of £106m is after a
£13m increase in pension charges for the year (£10m in IBS) under
SSAP 24. Total pension costs charged in the period for both
defined benefit and defined contribution schemes, amounted to
£26m (2002: £13m), of which £14m (2002: £4m) related to UK
defined benefit schemes. Total cash contributions for all schemes
in the year were £19m (2002: £9m). For 2004, the SSAP 24 pension
charge is anticipated to increase a further £6m and cash
contributions by £15m.
Under FRS 17, the Group deficit on all defined benefit plans at 
the balance sheet date was £273m (2002: £204m) before set off 
of deferred taxation. Whilst asset values have risen, they have 
been more than offset by the increase in the schemes’ liabilities.
This liability increase is due to updated actuarial assumptions
made following the UK schemes’ triennial valuations in March 2003.
These changed actuarial assumptions mainly concerned 
increased inflation rates and extended life expectancy in the
mortality assumptions.
The Group continued to invest in its businesses. In the year, £41m
(2002: £42m) was invested in capital, plant and equipment. It is the
aim of the Group that capital expenditure will broadly equate to
depreciation over the medium term. A restructuring charge of
£20m (2002: £18m), at around 1% to 1.5% of turnover, reflects the
Group’ s continued focus on reducing its underlying cost base and
enhancing its competitiveness.
Net trading cash flow
5
from continuing operations was £114m
(2002: £102m), representing a cash conversion of 107% (2002: 87%).
Net debt increased by £35m over 2002 to £254m after £47m
invested in acquisitions and £21m in the purchase and cancellation
of 19.4 million convertible preference shares. Interest costs were
covered by Adjusted Group operating profits over 11 times, net
debt to EBITDA was 1.6 times.
Group Results – continuing operations 
2003 vs 2002
2002 £ millions 2003 Reported Like for Like
1, 3
1,448 Sales 1,431 –1% nil
131 Operating profit before pension costs 132 +1% +2%
(13) Pensions (26)
118 Adjusted Group Operating Profit
2
106 –10% –9%
174 EBITDA 160 –8% –7%
95 Headline Profit
4
86 –9%
Intelligent Building Systems
2003 vs 2002
2002 £ millions 2003 Reported Like for Like
568 Sales 604 +6% nil
45 Operating profit before pensions 53 +19% +11%
(7) Pensions (17)
38 Adjusted Operating Profit
6
36 –4% –15%
58 EBITDA 56 –4% –12%
969_12-16  18/3/04  12:57 pm  Page 12 Novar annual report 2003
Operating review continued 13
Security and Control Systems delivered 6% like for like sales 
growth in markets lower than last year. Fire Detection sales in our
two principal markets of the UK and Germany grew ahead of the
market. Fire Detection sales also grew strongly in the Middle East,
Eastern and Southern Europe, gaining share in these markets,
while sales in Asia-Pacific declined. In Security, German Intruder
Alarms sales declined in line with a weak market, but grew in
Southern Europe. Price erosion squeezed margins in Fire and
Security in many markets. Nurse Call products declined in
Germany as new hospital building programmes were cut back 
or delayed.
Control Systems grew revenues in mixed markets. In the USA,
organic revenues grew in high single digits as further market share
gains were made in the retail sector. Alerton contributed strongly,
growing their year on year sales in high single digits. There was 
also encouraging and significant growth in markets where we have
been investing in additional commercial resources. Latin America
doubled sales, while there were double-digit increases in Central,
Southern and Eastern Europe, Scandinavia, Asia Pacific and the
Middle East. The UK saw a small reduction in sales as the
commercial office new build market declined.
Adjusted operating profit declined by £2m in the year. Higher
pension charges of £4m together with increased investment 
of £4m in research and development, and new commercial
initiatives of £7m, offset the benefits from higher sales and the 
£3m profit contribution from acquisitions, principally Alerton.
These investments underpin our prospects for the future in these
markets and we will benefit from a full year’s contribution from
Alerton in 2004 compared to the ten month contribution in 2003.
Electrical Accessories made progress and grew market share in 
the UK and the Middle East. The Wiring Devices business in the 
UK performed particularly well, up over 15%, in markets that 
have declined in the year. The introduction of new products, 
the acquisition of Novar Ireland (in late 2002) and a series 
of commercial successes in the retail market all contributed to 
this performance.
In Germany , new commercial office building projects were cut back
as tenant vacancy rates reached a new high of around 10%. As a
result, sales of new build fitted under floor Cable Management
products declined sharply. The fall in this segment of the market,
has led us to re-examine near term prospects and we have
determined that market vacancy rates will take some time to
recover. We have therefore concluded that we should adjust the
level of goodwill carried for this new build fitted under floor Cable
Management business in Germany and have taken an exceptional
operating charge of £18m. We retain a strong market position in
this segment and our extensive product range will allow us to
benefit as markets recover.
We have seen unprecedented falls in the Telecom and Datacom
markets since 2001 and the near term market prospects are
uncertain, despite our own success in growing market share. 
We have therefore concluded that the £75m goodwill associated
with this part of the business should be written off. We have made
considerable strides in reorganising this business to reflect the new
market realities and now have the cost base and structure to
progress in this difficult market.
European Datacoms markets were below prior year and overall
sales fell in line with the market. Progress was made in the UK, with
sales up 15% despite market decline. Y ear on year sales growth was
also achieved in Eastern and parts of Southern Europe as well as
the Middle East. In Germany, sales declined in a falling market.
Adjusted operating profit was stable, but this is after an increase in
pension charges of £6m. This pension increase masks the
significant cost reductions that have been achieved in the Datacom
business following the completion of the restructuring actions
started in late 2001. In this business, headcount has been reduced
and productivity substantially improved. Both businesses in this
segment have moved forward in their drive to increase the
proportion of their output that is supplied from low cost countries,
further enhancing their competitiveness.
Notes
See page 14
IBS – Security and Control Systems*
2003 vs 2002
2002 £ millions 2003 Reported Like for Like
262 Sales 305 +16% +6%
38 Operating profit before pensions 40 +8% – 4%
(2) Pensions (6)
36 Adjusted Operating Profit
6
34 –3% –16%
42 EBITDA 41 –2% –14%
*Indicative analysis
IBS – Datacoms & Electrical Accessories*
2003 vs 2002
2002 £ millions 2003 Reported Like for Like
306 Sales 299 –2% –5%
7 Operating profit before pensions 13 +81% +421%
(5) Pensions (11)
2 Adjusted Operating Profit
6
2 –16% +7%
16 EBITDA 15 –7% –5%
*Indicative analysis
969_12-16  18/3/04  12:57 pm  Page 13 Novar annual report 2003
Operating review continued 14
The North American soft alloy extrusion market presented a
number of challenges during the year. Market volumes in the first
quarter declined over the prior year by 1% and by 7% year on year
in the second quarter , leaving first half volumes down 4%. The third
quarter saw some market stability return with volumes flat over
prior year, while progress was seen in the final quarter, up an
estimated 6% over the prior year . This fluctuating market presented
increased competitive pressures and market pricing remained a
challenge throughout the year.
Against this background, Indalex gained market share, with
particular success in residential building and construction,
transportation and distribution sectors. Total full year Indalex
volumes increased by 2%, against an overall market decline of 1%.
Further progress has been made in strengthening Indalex’s
commercial and marketing resources. The sales force has been re-
organised to serve better our customer needs. This reorganisation,
around regional geographic markets, is supported by additional
resources for selected key accounts and vertical market sectors. 
In addition, 2003 saw the launch of Indalex T echnical Services (ITS),
a specialist team dedicated to the creation and delivery of
customer specific extrusion solutions across our markets. These
commercial investments have helped drive the market share gains
achieved in the year.
Like for like Adjusted operating profits, before pensions, declined
46% year on year, but with profitability improving through the year
as volumes increased. Average selling prices fell some 3% and
utilities costs increased. These were partially offset by improved
volumes and lower fixed costs. Prior year operating profits included
a one off release of £2.5m from environmental reserves. The
benefits from restructuring initiatives undertaken in earlier years are
now being felt in terms of reduced operating costs. These have
been further supplemented by additional overhead reductions
completed during the year.
The strategic and commercial alliance with Asia Aluminum Group
(AAG) continued to strengthen during the period. This alliance
offers a low cost overseas sourced supply alternative to our North
American customers and for Indalex, exposure to the high growth
China market. Over the period, Asia sourced volumes sold to North
American Indalex customers grew by over 35%. These volumes are
expected to increase significantly over the coming years.
The Group’ s share of associate profits of AAG in 2003 includes the
recognition of £2m of additional profit relating to last year.
The smaller related engineering businesses reported in this sector
saw a small fall in profits in the year due to some project delays.
Security Printing Services had another successful year with record
sales, profit and cash flow in constant currency terms. This is against
the background of an estimated decline of 4% in US cheque
market volumes and increased competition across all segments of
the business.
Clarke American achieved record sales driven by net new business
wins, improved product mix and further growth in business
transacted through the higher value added contact centre and
internet channels. Revenue through these preferred order
channels increased by 15% over 2002. Development of our small
business solutions increased revenues from this segment by 5%.
Continued innovation by Clarke American has brought a number
of exciting new commercial and marketing services to the market.
These new services enhance the value offered to financial
institution partners and their customers and will support further
development of the business over the coming years.
Clarke American renewed and extended several large partner
contracts during 2003. The contract with our largest partner was
extended and now covers all of the Bank’ s cheque-related product
and service requirements. The new business was successfully
brought on stream at the end of the third quarter and will
contribute fully to earnings in 2004 and beyond.
Adjusted operating profits at Clarke American have grown by 8%,
like for like, on higher sales, lower material costs and record levels of
productivity. Four plants and one older contact centre were closed
in the year . The increasing levels of business generated through the
contact centres is enhancing customer service levels and
productivity . Average headcount was down 200 or 6% year on year .
The direct to consumer business faced a number of challenges as
market volumes declined, particularly in the first half. In these
circumstances, sales have held at similar levels to 2002, while profits
were behind. Average headcount reduced by 2% over the year.
New products and services have been launched, while a new 
e-commerce platform came on line in the second half. These
actions are enhancing the offering to our customers and are
supporting future business prospects.
Notes
1 All comments within this operating review refer to the performance of businesses
on a “like for like” basis unless otherwise stated. The term “like for like” means after
adjusting for the impact of the 2002 and 2003 acquisitions, at constant exchange rates.
2 Adjusted Group operating profit and EBITDA within this operating review are
defined as before exceptional operating costs of £93m (2002: £2m), restructuring
charges of £19m (2002: £18m) and goodwill amortisation (excluding associate
amortisation) of £24m (2002: £22m).
3 Like for like before pension costs further adjusts “like for like” performance for
the increase in the total Group SSAP 24 pension cost in 2003 over 2002 of £13m.
4 Headline Profit is calculated as loss before tax of £34m (2002: £74m profit) adjusted
for exceptional operating costs of £93m (2002: £2m), goodwill amortisation of £25m
(2002: £23m) and other exceptional losses of £2m (2002: £4m profit).
5 Net trading cash flow is defined as cash inflow from operating activities of £131m
(2002: £120m) less capital expenditure of £41m (2002: £42m) adjusted for cash
restructuring spend of £24m (2002: £24m).
6 Adjusted operating profits refer to the segment operating profits before
restructuring, goodwill amortisation and exceptional operating costs.
Indalex Aluminum Solutions
2003 vs 2002
2002 £ millions 2003 Reported Like for Like
515 Sales 480 –7% –2%
21 Operating profit before pensions 14 –37% –46%
(4) Pensions (6)
17 Adjusted Operating Profit
6
8 –56% –57%
38 EBITDA 27 –28% –26%
Security Printing Services
2003 vs 2002
2002 £ millions 2003 Reported Like for Like
365 Sales 347 –5% +4%
65 Operating profit before pensions 65 nil +9%
(2) Pensions (3)
63 Adjusted Operating Profit
6
62 –1% +8%
78 EBITDA 77 –2% +7%
969_12-16  18/3/04  12:57 pm  Page 14 Novar annual report 2003
Financial review 15
Financial review
This review gives additional information on significant financial and
accounting matters.
Restructuring
Restructuring charges of £19.6m in 2003 (2002: £18.4m) comprised
£13.4m for Intelligent Building Systems, £1.6m for Indalex Aluminum
Solutions and £4.6m for Security Printing Services.
In the Intelligent Building Systems sector , restructuring programmes
have focused on the integration of recent acquisitions,
reorganisation of our commercial operations and a warehouse and
logistics consolidation in the UK.
In the Indalex Aluminum Solutions sector , the drive to enhance plant
efficiency has continued into 2003 with further restructuring initiatives.
In the Security Printing Services sector , the restructuring activities have
related to the closure of four plants and one older contact centre.
Exceptional items
Exceptional items comprised £93.0m of exceptional non cash
operating costs and a £2.0m loss on the disposal of fixed assets.
The exceptional operating costs relate to a goodwill impairment
charge following a review of the carrying value of the Group’s
subsidiary undertakings compared to their recoverable amounts 
as required by FRS 11 (Impairment of fixed assets and goodwill).
The goodwill impairment relates primarily to businesses operating
in the telecommunications and data communications markets.
Interest
The net interest expense of £8.2m for the year compared to £10.0m
in 2002. The decrease is principally due to the depreciation of the
US dollar.
T axation
The tax charge before exceptional items is £29.2m reflecting an
effective tax rate of 34.0% on profits before goodwill amortisation
and exceptional items. This rate reflects the mix of the Group’s
businesses in the various overseas tax jurisdictions in which it
operates. A reconciliation of the tax charge from the UK rate of 30%
is provided in note 6 to the accounts.
Exchange rate impact
During 2003, Sterling strengthened against the US dollar, and
whilst there was some weakening against the Group’s other
principal functional currencies of the Euro and Canadian dollar,
there was an overall adverse translation impact of £43m on reported
turnover and £4m on operating profits before restructuring and
exceptional items.
Dividends
The Directors recommend that the final dividend be maintained,
leaving the total dividend for the year unchanged at 9.5p net per
Ordinary share. Excluding goodwill amortisation and exceptional
items, the dividend is covered 1.2 times (2002: 1.3 times as restated)
by headline earnings per share, and 1.2 times (2002: 1.4 times) by
free cash flow. The final dividend will be paid on 4 June 2004.
Cash flow
2002
As 
2003 restated
£m £m
Continuing operations:
Group operating profit – before
restructuring, goodwill amortisation 
and exceptional items 106.1 117.7
Depreciation 53.9 56.6
EBITDA – before restructuring
and exceptional operating costs 160.0 174.3
Restructuring (19.6) (18.4)
Exceptional operating costs – (1.5)
Working capital and other movements (9.5) (34.8)
Net cash inflow from operating activities 130.9 119.6
Purchase of tangible fixed assets (40.8) (41.7)
Net trading cash inflow 90.1 77.9
Disposal of tangible fixed assets 1.8 17.8
Interest (18.0) (16.4)
Tax (20.2) (15.4)
Preference dividends (9.8) (10.6)
Dividends from associates 1.9 1.6
Free cash flow – before equity dividends 45.8 54.9
Equity dividends (38.9) (39.1)
Free cash flow – after equity dividends 6.9 15.8
In spite of reduced operating profits and increased restructuring
costs, reduced working capital outflow has resulted in an increase
in net trading cash inflow of £12.2m to £90.1m.
Capital expenditure at £40.8m (2002: £41.7m) has remained at prior
year levels. The Group’ s aim is that capital expenditure will broadly
equate to depreciation over the medium term.
Free cash flow before equity dividends decreased £9.1m to £45.8m.
Movement in net debt
Net debt at 31 December 2003 of £253.7m represented gearing of
82%, and an increase of £35.2m over the year. The principal
elements of the movement are set out below:
£m
Net debt at 31 December 2002 (218.5)
Free cash flow 6.9
Acquisitions (47.1)
ESOP trust and share issues 2.0
Purchase and redemption of own shares (20.5)
Exchange, including returns on forwards 23.5
Net debt at 31 December 2003 (253.7)
Acquisition expenditure comprised £6.3m (including loans
advanced) on joint ventures and associated undertakings, and
£40.8m on subsidiary undertakings (net of cash acquired).
The Group’s policy is to hedge its principal overseas assets with
local currency borrowings and financial instruments to approved
levels. During the year exchange gains as shown above were made
on these borrowings and financial instruments due principally to
the depreciation of the US dollar relative to Sterling.
969_12-16  18/3/04  12:57 pm  Page 15 Novar annual report 2003
Financial review continued 16
Currently the Group accounts for pension costs in accordance with
SSAP 24 under which the charge is calculated from funding and
actuarial valuations carried out from time to time in accordance
with local legal requirements. The total charge across the Group for
the provision of post retirement benefits increased in 2003 to
£25.7m (2002: £13.3m). This was due mainly to poor investment
performance in recent years.
International Financial Reporting Standards (‘IFRS’)
Based on the current timetable for implementation, the Group 
will be required to report under IFRS for the first time for the 
2005 interim accounts. The Group has commenced its work to
move to IFRS compliant accounts by this date, and is in line to
meet this timetable.
Treasury policies and risk management
Treasury operations:
The Group continues to operate a centralised treasury function,
which acts within clearly defined policies approved by the Board.
These policies are designed to reduce the financial risks faced 
by the Group relating to funding and liquidity, interest rate and
exchange rate exposure. No speculative transactions are entered
into by the treasury function, which does not operate as 
a profit centre.
All transactions in financial derivatives (principally forward contracts
and swaps) are entered into to manage the risk arising from
underlying business activities. Further details of derivative financial
instruments are provided in note 18 to the accounts.
Funding:
The Group is financed by a combination of retained earnings and
fixed and floating rate foreign currency and sterling borrowings.
During the year the Group raised a further $55m from a private
placement of senior loan notes in the US market. These notes are
repayable in three tranches from 2011 to 2015. When combined with
the senior loan notes issued in 2000, which are repayable in three
tranches from 2007 to 2010, the Group has a total of $390m senior
loan notes currently outstanding. Further information is set out in
note 18 to these accounts.
The Group’s undrawn committed facilities at 31 December 2003
are detailed in note 18f.
The Group is in compliance with the financial covenants contained
within its committed debt agreements.
Interest rate risk:
The Group borrows at either fixed or floating interest rates and
uses financial instruments to manage its exposure to interest rate
risks. The Group treasury function actively monitors the Group’s
exposure to interest rate risk.
Commodity risk:
The Group has certain exposures to metal commodity prices as a
result of its business operations. The Group manages the risk
associated with these exposures by using derivative and supply
contracts to hedge metal price fluctuations.
Invested capital
The Group’ s invested capital, defined as net assets excluding debt,
adding back goodwill amortised or impaired and goodwill written
off to reserves, was £1,173.4m.
2003
2003 2003 Net
Net T otal invested
assets
1
goodwill
2
capital
£m £m £m
IBS 160.8 509.0 669.8
IAS 177.5 154.1 331.6
SPS 62.1 245.2 307.3
400.4 908.3 1,308.7
T ax, dividends and
other corporate items (135.3) – (135.3)
265.1 908.3 1,173.4
2002 (as restated
3
) 279.5 878.1 1,157.6
Notes
1 Before net debt and excluding capitalised goodwill.
2 T otal goodwill includes goodwill written off to reserves of £437.2m together with
capitalised goodwill before amortisation and impairment of £471.1m.
3 2002 comparatives restated for UITF 38 and UITF 17 (revised).
New accounting standards
The Group has adopted UITF 38 and UITF 17 (revised) in these
accounts for the first time. Under UITF 38 the Company’s
investment in its own shares held in an ESOP trust is deducted in
arriving at shareholders’ funds (whereas under previous standards
the shares were recognised as a fixed asset investment). UITF 17
(revised) requires that the cost of employee share awards is based
on the difference between the fair value of the shares at the date
of the award and the amount which an employee may be required
to pay for the shares (under previous standards the charge 
was based on the difference between the cost of the shares held 
in the ESOP trust to satisfy the awards and the amount the
employee may be required to pay for the shares). Further detail 
is provided in note 9.
Financial Reporting Standard 17 Retirement Benefits (‘FRS 17’) 
was issued in November 2000. The transitional period for
implementation was extended following the decision to put back
the date for mandatory full implementation. In the transitional
period certain disclosures are required in the notes to the accounts,
and these are set out in note 22. Under FRS 17, the difference
between the market value of the assets and the liabilities (which are
determined using actuarial assumptions) of the Group’s pension
schemes at a particular point in time is recorded as a net surplus or
deficit on the balance sheet. At 31 December 2003 there was a net
deficit of £261.8m after deferred tax set-off, calculated in
accordance with the FRS 17 prescribed method. This compared to
a deficit of £188.0m at 31 December 2002. The movement in the
deficit has occurred principally in the UK schemes, and is due to
increased liabilities which have more than offset the rise in asset
values. This liability increase was due to updated actuarial
assumptions following the UK schemes’ triennial valuations in
March 2003. The most significant changes were increased inflation
rates and extended life expectancy in the mortality assumptions.
The FRS 17 deficit has no direct impact on the funding
requirements of the Group’s schemes for 2003, which are
determined from regular funding valuations and reviews, details of
which are set out in note 22a.
969_12-16  18/3/04  12:57 pm  Page 16 Novar annual report 2003
Financial review continued 17
Foreign exchange risk:
The Group uses foreign currency borrowings and financial
instruments to manage the impact on the Group balance sheet 
of exchange rate movements.
The balance sheets of overseas subsidiaries are translated into
sterling at year end exchange rates. Gains and losses arising on
their retranslation are recorded in reserves where they are matched
with gains and losses on borrowings and financial instruments
taken out in the same currency to hedge the net assets of the
overseas subsidiaries.
Profits of overseas subsidiaries are translated at average rates. The
Group does not hedge the translation of foreign currency
denominated profits.
The Group has transactional foreign currency exposures arising
from purchases and sales denominated in currencies other than
the functional currencies of the operating companies. Significant
exposures are managed through a combination of currency
borrowings and financial instruments.
Liquidity risk:
The Group’ s exposure to liquidity risk is managed by maintaining a
diversity of funding sources and a spread of debt maturities. The
maturity of the Group’s borrowings as at 31 December 2003 is set
out in note 18e.
Going concern
After having made appropriate enquiries, including a review of the
Group’ s budget for 2004 and its medium term plans, the Directors
have a reasonable expectation that the Group and Company have
adequate resources to continue in operational existence for the
foreseeable future. They therefore continue to adopt the going
concern basis in preparing these accounts.
969_17  18/3/04  12:58 pm  Page 1 Novar annual report 2003
The Board 18
The Board
Daniel Dayan (40)
Executive Director. Appointed
to the Board in January 2004.
He is the Chief Executive of the
Intelligent Building Systems
Sector and has been with the
Group since 1994. A mechanical
engineer, his earlier career was
with ICI and Arthur D Little.
Hans Nilsson (48)**
Non-executive Director.
Appointed to the Board in
January 2004. He is the Chief
Executive of Spectris plc and
was previously the European
managing director of Flextronics.
Before that he held positions at
Hewlett Packard and ABB.
Sir Geoffrey Whalen CBE (68)**
Non-executive Director since
January 1996. He is the Senior
Independent Director. He is
Chairman of Coventry Building
Society and a non-executive
Director of Federal Mogul
Corporation. He is a former
managing director of Peugeot
Motor Company PLC.
Jurgen Hintz (61)
Group Chief Executive and
executive Director since 
November 1997. He was
formerly President and Chief
Executive of CarnaudMetalbox
S.A., before which he was
Executive Vice-President and 
a main Board Director of the
Procter & Gamble Company.
Sir Graham Hearne CBE (66)*
Non-executive Chairman.
Appointed to the Board in July
1999. He is Chairman of Catlin
Group Ltd and Braemar
Seascope Group plc, and
Deputy Chairman of Gallaher
Group plc. He is also a non-
executive Director of NM
Rothschild & Sons Ltd. His most
recent previous appointment
was Chief Executive and then
Chairman of Enterprise Oil plc.
Mike McKeon (47)
Appointed to the Board in April
2000 as Group Finance Director
and executive Director. He was
previously Finance Director 
of the aerospace activities of
Rolls-Royce Plc and of the
beverage packing sector of
CarnaudMetalbox S.A. Before
that he spent some years at
PricewaterhouseCoopers.
Stephen Howard (50)**
Non-executive Director.
Appointed to the Board in June
2000. He is the Group Chief
Executive of Cookson Group plc
and a non-executive Director of
Slough Estates plc.
Oliver Stocken (62)**
Non-executive Director.
Appointed to the Board in June
2000. He is Deputy Chairman of
3i Group plc and a non-executive
Director of Pilkington plc, The
Rank Group plc, Rutland Trust
PLC, Stanhope plc and GUS
PLC. He was previously Finance
Director of Barclays PLC.
* Member of the Nomination
Committee only.
**Member of the Nomination,
Remuneration and 
Audit Committees.
Group Company Secretary
Karen Richardson
969_18-23  18/3/04  12:59 pm  Page 18 Novar annual report 2003
Report of the Directors 19
The Directors present their annual report to shareholders, together
with the audited accounts for the year ended 31 December 2003.
Activities
The Company’s business activities are divided into three business
sectors – Intelligent Building Systems, Indalex Aluminum Solutions
and Security Printing Services.
In the Intelligent Building Systems sector, the Company’ s activities
include the manufacture and supply of a wide range of electrical,
electronic and control products for industrial, commercial and
residential requirements, principally in the UK, continental Europe
and North America, as well as the Middle East and Asia.
The main business activity of the Indalex Aluminum Solutions
companies is the extrusion and supply of engineered aluminium
components for diverse markets in North America including
building and construction, consumer durables, electrical and cable,
machinery and equipment and automotive and transportation.
The Security Printing Services sector’s activities, which are also
based in North America, include the production of cheques and
other financial business forms and the provision of specialised
services to financial institutions.
Group Results
The Group loss for the year after taxation and minority interests
amounted to £62.4m. It is recommended that this amount be dealt
with as follows:
£m
Ordinary Dividends
– interim paid 11.9
– final proposed 27.2
Preference and “B” Dividends
– paid and accrued 9.7
Finance cost on redemption of non equity shares 1.0
Retained loss (112.2)
T otal (62.4)
Further details of Group trading and the financial position at the
end of the year can be found within the Operating review and
Financial review on pages 12 to 17.
Dividends
Ordinary Shares
An interim dividend of 2.9p (net) (2002: 2.9p (net)) per Ordinary
share was paid on 27 October 2003. The Directors recommend the
payment of a final dividend of 6.6p (net) (2002: 6.6p (net)) to bring
the total dividend for 2003 to 9.5p (2002: 9.5p). The 2003 final
dividend will be payable on 4 June 2004 to Ordinary shareholders
registered on 30 April 2004.
Preference Shares
The next dividend on the 7.25p Preference shares will be paid on
1 June 2004 to Preference shareholders registered on 30 April 2004.
“B” Shares
The next dividend on the “B” shares will be paid on 20 May 2004
to holders of “B” shares registered on 16 April 2004.
Share Capital
Particulars of the share capital issued by the Company during the
year and options held under the Company’ s share option schemes
are reported in note 20 to the accounts on pages 40 and 41.
Purchase of own shares
In 2003, shareholders approved the purchase by the Company of
its own shares, up to a maximum of 43,050,000 Ordinary shares 
and 21,600,000 Preference shares, representing approximately 
10% and 14.9% of the respective number of shares in issue. 
During the year the Company purchased 19,414,600 Preference
shares representing 13.3% of the issued Preference shares, for 
an aggregate consideration of £20.4m and these shares were
cancelled. The Company did not buy back any Ordinary shares
during the year.
Substantial Interests
As at 25 February 2004, the Company’s register of substantial
interests in shares showed that the Company had been notified of
the following interests, being 3% or more of its issued Ordinary
share capital.
Percentage
Number of holding
Ordinary at date of
Name shares notification 
Active Value Fund Managers Ltd 72,028,859 16.71
Mourant & Co Trustees Ltd 20,672,980 4.80
F & C Management Ltd 18,556,631 4.31
Morley Fund Management Ltd 16,647,728 3.86
Legal & General Investment
Management Ltd 15,316,495 3.55
Lazard Asset Management Ltd 14,787,670 3.43
Company Nominee Service
A Company Nominee Service is available to private shareholders
which allows them to hold their shares in uncertificated form in
CREST, the London Stock Exchange share settlement system.
Shareholders wishing to join this service should contact the
Registrars.
Dividend Reinvestment Plan
The Dividend Reinvestment Plan offers Ordinary shareholders the
opportunity to invest their cash dividends in Novar shares, which
are bought on the London Stock Exchange at the prevailing market
price at the time each dividend is paid. Once shareholders have
decided to participate in the Plan, their future dividends will
continue to be invested on a regular basis in Novar shares until
they decide to withdraw from the Plan, or the Plan is terminated. At
present some 20% of shareholders participate in the Plan. 
For further details shareholders should contact the Registrars.
Policy on payment of creditors
Operating businesses are responsible for agreeing the terms and
conditions under which business transactions with suppliers are
conducted. Payments to suppliers are made in accordance with
these terms, provided that the supplier is also complying with all
the relevant terms and conditions. At 31 December 2003, the
Company’s trade creditors represented 57 days (2002: 62 days) of
annual purchases.
Research and development
The Group’s businesses commit resources to research and
development to assist them in securing their competitive positions
in their chosen markets.
Corporate Governance
The new Combined Code was published in July 2003. Although 
it comes into effect for reporting years beginning on or after 
1 November 2003, this report has been prepared, where practicable,
on the basis of the new Code. The Listing Rules of the Financial
Services Authority require the Company to include in its annual
report and accounts a statement of how the Company has applied
Report of the Directors
969_18-23  18/3/04  12:59 pm  Page 19 Novar annual report 2003
Report of the Directors continued 20
the Code (now including Main and Supporting Principles of Good
Governance), and whether the Company has complied throughout
the reporting period with the Code’s Provisions. This report
describes how the principles of governance set out in the Code are
applied in relation to Directors, Directors’ Remuneration (separately
on pages 24 to 27), Financial Reporting, Internal Controls, the Audit
Committee and Auditors, and Relations with Shareholders.
The Board considers that the Company has complied with the
Combined Code provisions which were applicable for this
reporting period throughout the year under review. Where new
provisions have been introduced in the revised Code, the Board is
taking steps to implement these.
The Board of Directors meets at least eight times during the year
and consists of three executive Directors, four non-executive
Directors, all of whom the Board considers to be independent, plus
the non-executive Chairman, as described on page 18. The Board
is responsible for the overall direction, current performance, and
long-term prosperity of the Company. It exercises control by
determining matters specifically reserved to it in a formal schedule
of Powers Reserved which only the Board may change: these
include major capital expenditure; major treasury and financial
decisions; internal controls; acquisitions or divestments of
businesses; and communications with shareholders.
The attendance of individual Directors at Board and Committee
Meetings during 2003 is set out in the table below.
Board Committee 
Meetings Meetings
Attended Attended
Directors (T otal 9 meetings) (T otal 10 meetings)
Sir Graham Hearne 9 9 
Mr S L Howard 9 10 
Dr G M Murphy 9 10 
Mr O H J Stocken 9 9 
Sir Geoffrey Whalen 7 8 
Mr B J Hintz 9 – 
Mr C L Korbell 7 –
Mr M J E McKeon 9 –
The Board has delegated to the Group Chief Executive wide
powers for the day-to-day management of the Company , including
the approval of financial commitments below the levels requiring
Board approval. It has also delegated to Committees of the Board
responsibility for making recommendations to the full Board 
or otherwise acting on its behalf in specialised areas: these are 
the Nomination Committee, the Remuneration Committee, the
Audit Committee and the Group Operating Committee. The
Terms of Reference of the Nomination, Remuneration and Audit
Committees, including an explanation of their roles and the
authority delegated to them by the Board, are available on the
Company’s website. Further details of these Committees are set
out below.
The Chairman of the Board ensures the effectiveness of the Board
in all aspects of its role and is responsible for setting the Board
agenda. He also ensures that the Board is provided with detailed
and timely information on matters to be considered at its meetings
and that the independent non-executive Directors have ready
access to the executive Directors. A procedure is in place for the
executive and non-executive Directors to take, at the Company’s
expense, independent professional advice in the furtherance of
their duties. All the Directors have access to the assistance and
advice of the Company Secretary.
Arrangements are in place for all Directors to receive appropriate
training on their appointment, and periodically thereafter, as
necessary. Site visits are arranged for the Board during which time
briefings are arranged, and the Board is able to discuss aspects 
of the business with employees at all levels.
The Board has undertaken a formal evaluation of its performance
during the year, which was conducted by external consultants. 
The results of the evaluation were reported back to the Board. 
It is proposed to evaluate the individual Directors and the Board’s
committees in 2004, and continue with a programme of annual
evaluations thereafter.
The Board receives regular updates on the views of the Company’ s
major shareholders, with the object of it having a balanced
understanding of issues and concerns affecting them. Regular
contact and dialogue with major shareholders is maintained by the
Directors through meetings and presentations.
Sir Geoffrey Whalen is the Senior Independent Director. The
Chairman and non-executive Directors meet periodically without
the executive Directors present. The non-executive Directors have
met during the year without the Chairman present.
The Nomination Committee consists of all the independent 
non-executive Directors with Sir Graham Hearne as the chairman,
and meets at least twice a year. The Group Chief Executive attends
meetings of the Committee by invitation. The role and responsibilities
of the Committee provide for it to review regularly the Board
structure, size and composition and to make recommendations 
to the full Board in relation to: executive and non-executive 
Board appointments and resignations (including the re-election 
of Directors at the Company’s Annual General Meeting); any
extensions to Directors’ service periods; and the approval of
outside appointments or directorships for executive Directors.
In relation to the new Board appointments of Mr D A Dayan and
Mr H D Nilsson, the Committee evaluated the balance of skills,
knowledge and experience on the Board and the role and
capabilities required. An external search consultancy was
appointed to assist the Board with the search and selection
process for Mr Nilsson.
The Remuneration Committee consists of all the independent
non-executive Directors with Sir Geoffrey Whalen as the chairman,
and meets at least four times a year. A description of the work
carried out by the Committee is set out in the Report 
to shareholders on Directors’ remuneration on pages 24 to 27.
The Audit Committee comprises all the independent non-
executive Directors with Mr O H J Stocken as the chairman, and
meets at least three times a year. The Chairman, the Group Chief
Executive, the Group Finance Director and representatives of the
external auditors are normally invited to attend meetings of the
Committee. The Corporate Audit Manager may also be invited 
to attend meetings, as appropriate.
The role and responsibilities of the Committee require it to satisfy
itself that the Company’s annual and interim accounts and other
major financial statements issued by the Board follow generally
accepted accounting principles and give a fair and meaningful
account of the Group’ s affairs. The Committee is also required to:
• monitor the effectiveness of the Group’ s systems of internal
financial control;
• monitor and review the effectiveness of the Company’ s
internal audit function;
969_18-23  18/3/04  12:59 pm  Page 20 Novar annual report 2003
Report of the Directors continued 21
• examine the scope of the external audit to ensure an effective
service and review the results of the audit;
• review all arrangements relating to the engagement of the
external auditor and monitor their objectivity and
independence; and 
• develop and implement policy on the engagement of the
external auditor to supply non-audit services.
In order to ensure that the objectivity and independence of the
external auditors is maintained, the Committee keeps under
review the nature, extent and fees paid in respect of the non-audit
services provided by them and has set policies and procedures
relating to the provision by other firms of non-audit services to the
Group. The Committee is also required to report to the Board any
matters in respect of which it considers action or improvement is
needed and to make recommendations as to the steps to be
taken. Arrangements for the Committee to receive reports of fraud
or other financial improprieties from employees of the Company
have been established through the Group’s Fraud and Unethical
Business Conduct Escalation Policy, a copy of which is on the
Company’ s website.
The Group Operating Committee includes the executive Directors
and heads of business sectors as well as several functional heads,
with Mr Hintz as the chairman. It acts as a general management
committee for running all the major business affairs of the Company .
Internal Control Statement
The Directors are responsible for the Group’s system of internal
control, including financial, operational and compliance controls
and risk management, and for reviewing its effectiveness. It is
designed to manage rather than eliminate risk and can provide
only reasonable and not absolute assurance against material
misstatement or loss.
The Board has adopted a Risk Management Policy and Group Risk
Framework which establish a process for identifying, evaluating
and managing the significant risks faced by the Group. This process
has been in place for the year under review and up to and including
the date of approval of the annual report and accounts. The
process is reviewed annually by the Board and accords with the
guidance set out in Internal Control: Guidance for Directors on the
Combined Code.
The Board has charged the Group Chief Executive, through the
Group Operating Committee, with responsibility for implementing
policies on internal control.
Sector Chief Executives are responsible for risk management within
their sectors, including embedding the risk process in newly
acquired businesses, and for notifying the Board, via the Group
Operating Committee, where exposure to risks is of a material
nature. Information on these significant risks, together with the
relevant control and monitoring procedures, is reviewed for
completeness and accuracy by the Group Operating Committee.
This information is presented to the Board for the Directors to
assess the effectiveness of the system of internal control. In addition,
the Group Operating Committee monitors the Group’s significant
risks on an ongoing basis. The Board receives and reviews minutes
of the meetings of the Group Operating Committee, in addition to
oral reports from the respective heads of business sectors and
functional heads as required.
Internal and external audit, and other related providers of
assurance, perform reviews of control activities and provide regular
written and oral reports to the Board via the Audit Committee.
The Board has assessed the significant risks and opportunities to
the commercial success of the business from social, environmental
and ethical issues as part of its regular risk management reporting
and review process.
Statement of Directors’ Responsibilities
The Directors are required by UK company law to prepare financial
statements for each financial year which give a true and fair view of
the state of affairs of the Company and Group as at the end of the
financial year and of the profit or loss of the Group for that year. In
preparing those financial statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable and
prudent; and
• 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 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 Group and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
Corporate Social Responsibility
The Group is committed to developing policies and achieving high
standards in all facets of Corporate Social Responsibility. 
A separate report on Corporate Social Responsibility appears 
on page 23, which among other things includes statements on
employment policies, health and safety, the environment and
charitable donations.
Directors
The names of the present Directors of the Company are shown on
page 18. Dr G M Murphy resigned as a Director on 31 December
2003. Mr C L Korbell also resigned as a Director on 31 December
2003, although he continues in his role as President and Chief
Executive Officer of the Security Printing Services sector. Mr D A
Dayan and Mr H D Nilsson were appointed to the Board on 
1 January 2004 as an executive Director, and an independent 
non-executive Director, respectively. The other Directors whose
names appear on page 18 were Directors of the Company
throughout the year.
Mr D A Dayan and Mr H D Nilsson, having been appointed to 
the Board since the last Annual General Meeting, retire under
Article 93 of the Company’s Articles of Association. Mr B J Hintz, 
Mr S L Howard, Mr O H J Stocken and Sir Geoffrey Whalen 
retire by rotation under Article 95, and in accordance with the
Combined Code, each of them having been last re-elected in
2001. Each of them, being eligible, offers himself for re-election 
as a Director. The notice period contained in the contracts of
service of Mr Hintz and Mr Dayan is included in the Report to
shareholders on Directors’ remuneration on pages 24 to 27. 
Mr Howard, Mr Nilsson, Mr Stocken and Sir Geoffrey Whalen,
being non-executive Directors, do not have service contracts 
with the Company. A summary of the terms of service for each 
non-executive Director is also included in the Report to
shareholders on Directors’ remuneration. A brief biography of each
of the Directors is included on page 18. The Board believes 
that each non-executive Director seeking re-election has the
necessary skills and experience for the role, and that the
performance of those Directors retiring by rotation continues to be
effective and to demonstrate commitment to the role.
969_18-23  18/3/04  12:59 pm  Page 21 Novar annual report 2003
Report of the Directors continued 22
During 2003, no Director had a material interest in any contract 
of significance with the Company as defined in The Listing Rules
published by the Financial Services Authority.
Directors’ Interests
Directors’ Interests in shares
The beneficial interests of the Directors in office at the end of the
financial year in the shares of the Company at 31 December 2003
and at 1 January 2003, including the beneficial interests of their
families, are set out in the table below.
31 December 2003 1 January 2003
Number of Number of
Directors Ordinary shares Ordinary shares
Sir Graham Hearne 13,113 12,253
B J Hintz 1,851,802 1,822,600
S L Howard 13,158 13,158
C L Korbell 78,007 70,318
M J E McKeon 25,150 21,868
Dr G M Murphy 20,378 20,378
O H J Stocken 61,146 58,445
Sir Geoffrey Whalen 20,000 20,000
Notes
1 During the year the holdings of Sir Graham Hearne, Mr B J Hintz, Mr C L Korbell, 
Mr M J E McKeon and Mr O H J Stocken increased by 860; 29,202; 7,689; 3,282
and 2,701 Ordinary shares respectively, having been purchased within a price
range of 99.2p to 140p per share.
2 The executive Directors of the Company are deemed to have an interest in the
19,156,963 and 1,533,470 Ordinary shares held by the Novar Employee Trust and
Novar Performance Partnership Plan Share Trust respectively.
3 None of the Directors held any interest in the 7.25p Convertible Preference shares
or “B” shares of the Company.
4 None of the Directors held any non-beneficial interest in any of the shares of 
the Company.
5 None of the Directors held interests in the shares or loans of the Company’s
subsidiaries at any time during the year.
6 No changes occurred in any of these interests between 31 December 2003 and
25 February 2004 other than a reduction of 17,453 Ordinary shares held by the
Novar Employee Trust.
Directors’ share options
Details of Directors’ share options are disclosed in the Report to
shareholders on Directors’ remuneration on pages 24 to 27.
Auditors
On 1 August 2003, Deloitte & Touche, the Company’s auditors,
transferred their business to Deloitte & Touche LLP, a limited
liability partnership incorporated under the Limited Liability
Partnerships Act 2000. The Company’s consent has been given to
treating the appointment of Deloitte &Touche as extending to
Deloitte & Touche LLP with effect from 1 August 2003 under the
provisions of section 26(5) of the Companies Act 1989. Resolution
No. 5 to re-appoint Deloitte & Touche LLPas the Company’s
auditors will be proposed at the Annual General Meeting.
Annual General Meeting Special Business
Authority to allot shares and waiver of pre-emption rights
The Companies Act 1985 requires the Directors to obtain authority
from shareholders to allot unissued Ordinary shares or convertible
securities of the Company (except under employee share
schemes), and to issue Ordinary shares or convertible securities for
cash (other than by way of rights to existing shareholders or under
employee share schemes). Although the Directors have no plans at
present to issue new shares apart from those required for
converting convertible securities, or employee share schemes, or
any other obligations or potential obligations to allot, they believe
that it is in the interests of the Company for these authorities to
continue to be given to the Board.
Resolution No. 6, which will be proposed as an Ordinary
Resolution, renews the Directors’ authority granted at last year’s
Annual General Meeting for a further five year period to allot
unissued share capital up to a maximum of £39,505,270 in nominal
value, representing approximately 33% of the number of Ordinary
shares in issue. It is the intention of the Board to continue the
practice of requesting this authority annually.
Resolution No. 7, which will be proposed as a Special Resolution,
renews the Directors’ authority until the end of the Annual General
Meeting in the year 2005 to make issues of Ordinary shares or
convertible securities for cash, other than to existing shareholders
pro rata to their holdings, up to £5,985,645 in nominal value,
representing approximately 5% of the number of Ordinary shares
in issue. The proposal conforms with the pre-emption guidelines
issued by the investment protection bodies to ensure that existing
shareholders’ interests are safeguarded. It is also the Board’s
intention to request this authority annually.
Purchase of own shares
Special Resolutions Nos. 8 and 9 request authority for the Directors
to make market purchases of the Company’s Ordinary and
Preference shares up to a maximum of 10% and 14.9% respectively
of the number of shares in issue. The Directors consider it desirable
that they should continue to have the flexibility to do this. The
Directors would plan to use this authority if and when they
considered it to be in the best interests of the Company and the
intention is to continue to request it annually.
The consent of holders of the 7.25p Preference shares to the
passing of these resolutions will be sought at a separate Class
Meeting following the Annual General Meeting.
By order of the Board
K Richardson
Group Company Secretary
25 February 2004
969_18-23  18/3/04  12:59 pm  Page 22 Novar annual report 2003
Corporate Social Responsibility 23
Corporate Social Responsibility (CSR) is an essential element of
modern business practice. The Board of Novar plc recognises its
responsibilities to develop and promote policies and management
systems to enhance the Group’s performance in the key impact
areas, and to maintain the highest standards of ethical and social
behaviour in all business dealings. This report describes the
framework for the Group and outlines how this is applied across
the Group’ s businesses.
The Group’ s Code of Conduct, a copy of which is available on the
Novar website, outlines our conduct across a range of social,
ethical and environmental areas which are core to the effective and
efficient functioning of our business.
Accountability for managing CSR issues in the business sectors
rests with the Sector Chief Executives, who report to the Group
Operating Committee and the Board of Directors.
Employees
The Directors recognise that the Group’s goals and vision can be
achieved only through the efforts of its employees. The Board
remains committed to ensuring that all Group employees are
treated with dignity and respect, and that the working environment
is one where each employee’s contribution is recognised and
valued. All employment-related issues are judged on the basis of
individual ability and performance without regard to race, colour,
nationality , culture, ethnic origin, religion, sex, sexual orientation, age
or disability. Discrimination and harassment are not tolerated, and
basic human rights are upheld wherever the Company operates.
With some 14,000 employees spread across operations in the 
UK, North America, Europe, the Middle East and Asia, the Group
has a diverse and multi-cultural workforce. Novar has policies 
on compensation, benefits and ethics which are designed to 
reflect national differences, for example in compensation
philosophies and labour relations. Wage levels are designed to 
be competitive in the local market and are tested using a number
of independent sources.
The Company believes in taking prime responsibility for
communications with its employees in order to keep them fully
informed on matters which affect them, and to enable them 
to identify with the competitiveness and success of their 
enterprise. The Company operates an Inland Revenue approved
savings-related share option scheme in the UK, providing
employees with the opportunity to own shares in the Company.
Proper consideration is given to applications for employment
made by disabled people, and for training and personal and career
development as appropriate for disabled employees. In the event
of an employee becoming disabled whilst working for the Company ,
efforts would be made to continue their employment and suitable
arrangements made for retraining as necessary.
Health & Safety
The Directors believe that the health, safety and welfare of the
Group’s employees should be an integral part of the overall
business strategy.
The Board’ s commitment is set out in the Group’ s Health & Safety
Policy Statement, a copy of which is available on the Novar
website. Below Board and Chief Executive level, Sector Chief
Executives and business unit managing directors are responsible
for developing health and safety policies which are specific to their
operations, and the associated organisation and arrangements
necessary to secure the achievement of the Group policy. Each
sector has formal management systems and programmes in place
in relation to health and safety for their businesses.
Environment
The Group is committed to developing and promoting products
and processes that reduce waste and negative environmental
impacts. This includes both the efficient use of materials and
energy in designs and product development, and an awareness 
of the effect on the environment of manufacturing processes. The
Group’s environmental policy, a copy of which is available on the
Novar website, sets out five key principles as a framework for each
Novar business to develop and implement policies and
procedures which are relevant and appropriate to their operations.
Each of the sectors has its own environmental programmes which
are carried through at the local level. Most European sites are
accredited to the environmental management standard ISO14001
or EMAS, and programmes are currently under way to achieve
further accreditations during 2004. All companies have sought to
optimise recycling of packaging and other materials and waste
where financially and economically viable. 
The Supply Chain
The Group is developing policies to take account of socially
responsible practices in the supply chain. Activity is focused on the
environmental performance of suppliers and their working practice
standards, supported by appropriate audit processes.
Community Support and Charitable Donations
The Board receives an annual report on charitable payments 
across the Group. The Group focuses on providing support for
organisations which are local to, or linked commercially with,
Novar’s business units. Community involvement is organised at 
a local level within the sectors. The Group has for many years
supported CRASH, the UK construction and property industry
charity for the homeless (as a founder member). In North America,
both Clarke American and Indalex have well-established
programmes to support the United Way. In 2003, donations 
to charitable organisations within the UK amounted to £14,870
(2002: £24,725).
Corporate Social Responsibility
969_18-23  18/3/04  12:59 pm  Page 23 Novar annual report 2003
Report to shareholders on Directors’ remuneration 24
Report to shareholders on 
Directors’ remuneration
The Directors present their report to shareholders on Directors’
remuneration, which has been prepared in accordance with the
requirements of the Listing Rules of the Financial Services Authority,
the Combined Code, and the Directors’ Remuneration Report
Regulations 2002 (the “Regulations”). A resolution to approve the
report will be proposed at the Annual General Meeting.
The Regulations require certain information shown in this report to
be subject to audit. Accordingly, the following sections of the
report have been audited, as referred to in the Independent
auditors’ report on page 28: the table of Directors’ emoluments
and compensation, the tables of share options and Performance
Partnership Plan entitlements and the summaries of the
performance criteria upon which the share options and awards are
conditional, and the pension benefits.
The pay and benefits of each executive Director , and the Chairman,
are determined by the Remuneration Committee. The Group
Chief Executive attends Committee meetings and is consulted on
proposals relating to the remuneration of other executive Directors
(but not his own). The remuneration of the non-executive Directors
(other than the Chairman) is determined by the Board of Directors.
No Director is involved in deciding his own remuneration. The
Committee also monitors the level and structure of remuneration
for senior management below Board level.
The Committee’s Terms of Reference and responsibilities are
determined by the Board of Directors, in accordance with the
Company’s Articles of Association. The Committee is composed
wholly of independent non-executive Directors: Sir Geoffrey
Whalen (Chairman), Mr S L Howard, Mr H D Nilsson (who has
replaced Dr G M Murphy) and Mr O H J Stocken.
The Committee consults with the Chairman, the Group Chief
Executive, the Group Director of Human Resources and the Group
Company Secretary (who normally attend Committee meetings).
Hay Group and Towers Perrin provided advice and services which
materially assisted the Committee in its deliberations during the
year under review. Hay Group also provided advice to the
Company separately on the Group’s executive grading structure.
Where appropriate the Committee can take independent advice
from consultants retained separately by them.
Policy on Remuneration of Executive Directors and 
Senior Executives 
The remuneration policy now and for the future is designed to
facilitate the employment, retention and motivation of executive
Directors and other senior executives of suitable calibre and
experience, and to incentivise them to meet the financial and
strategic objectives set by the Company. The packages are
designed to be broadly comparable with those offered by 
other similar international businesses; the arrangements relating 
to North America reflect local competitive practices. In setting
remuneration levels for executive Directors, the Committee also
takes account of pay and employment conditions elsewhere in 
the Group.
The remuneration packages combine short and long term rewards,
and an appropriate balance of fixed and performance related
elements. The fixed elements comprise base salary, and pension
and life assurance, company car, and health care benefits. The
performance related elements comprise an annual cash bonus 
and related deferred bonus plan, and executive share options. 
The Company also operates a UK all-employee savings-related
share option scheme. The Committee considers that the targets
set for the different elements of performance related
remuneration, which are mostly based on growth in the Company’ s
earnings per share as described below, are appropriate and
demanding in the context of the Company’s trading environment
and the business challenges it faces.
Contracts of Service
The Board has a general policy of one year notice periods for
executive Directors. In the absence of specific provisions for 
the payment of liquidated damages on termination of employment
by the Company, legally appropriate mitigation factors will
normally be considered in determining any compensation that
may be payable. 
Current Directors
Mr B J Hintz, a US citizen, has a service agreement with the
Company’s US subsidiary, Novar USA Inc. Under a separate
agreement between Novar USA Inc. and the Company , Novar USA
Inc. seconds Mr Hintz to the Company. Both agreements are
effective from 14 November 1997. Mr Hintz’s service agreement
can be terminated on 12 months’ notice. 
Mr D A Dayan has a service agreement dated 1 January 2004 which
can be terminated by the Company on 12 months’ notice. 
Mr M J E McKeon has a service agreement dated 25 April 2000
which can be terminated by the Company on 12 months’ notice. 
The unexpired term of the service contracts is therefore 12 months
for Mr Hintz, Mr Dayan and Mr McKeon. 
Former Director 
Mr C L Korbell, a US citizen, resigned as a Director on 31 December
2003, but retains his role as President and Chief Executive Officer
of the Security Printing Services sector . He has a service agreement
with Clarke American Checks, Inc. (“Clarke”) dated 19 September
1995 which is automatically extended each year unless Clarke gives
notice of termination, in the event of which Mr Korbell would
receive two years’ salary and benefits. (On a change of control Mr
Korbell would receive one year’s salary, and on termination of the
employment by either party a further one year’ s salary and benefits).
Policy on Remuneration of Non-executive Directors
Non-executive Directors are appointed initially for a three year
period, which is then reviewed and extended for further three year
periods as appropriate. There are no provisions for notice periods
or compensation in the event of termination. The current expiry
dates of the service periods of the non-executive Directors are: 
Sir Graham Hearne 30 July 2005
Mr S L Howard 1 June 2006
Mr H D Nilsson 1 January 2007
Mr O H J Stocken 1 June 2006
Sir Geoffrey Whalen 9 January 2005
The non-executive Directors do not participate in any of the
Company’s incentive or benefit schemes. The remuneration of
non-executive Directors during the year under review was made 
up of a basic fee of £20,000 and an additional fee of £13,000 
in recognition of their membership of certain committees.
Committee chairmen each received an additional fee of £7,000.
The non-executive Chairman of the Company received a fee of
£170,000 for the year under review. The remuneration of each 
non-executive Director reflects the time commitments and
responsibilities required for the role.
Base Salary
The Committee sets base salaries to reflect responsibilities and
experience; these are reviewed annually, having regard to both the
individual’ s and the Company’ s performance, pay and employment
conditions elsewhere in the Group, and competitive market salaries.
969_24-28  18/3/04  1:00 pm  Page 24 Novar annual report 2003
Report to shareholders on Directors’ remuneration continued 25
Annual Bonus 
Each of the executive Directors participates in an annual bonus plan
related primarily to growth in the Company’ s headline earnings per
share and, in the case of Sector Chief Executives, to operational
performance, up to a maximum of 75% of salary. In 2003, Mr Hintz
and Mr McKeon were each awarded a bonus amounting to 7.5% 
of salary. Mr Korbell received a bonus representing 43% of his 
salary based on the performance of the Security Printing Services
sector . In accordance with normal US practice, this was pensionable.
The bonuses received by the Directors are included in the table 
of Directors’ emoluments.
Performance Partnership Plan
Mr Hintz, Mr Korbell and Mr McKeon all participated in the Novar
plc Performance Partnership Plan in 2003. Under the Plan, executive
Directors and senior executives are invited to defer a proportion
(between 20% and 100%) of the after-tax amount of any annual
bonus they receive by investing it in the Company’s shares, and
receive a matching award of shares, based on the pre-tax value of
the invested bonus, at the end of a three year period commencing 
on the date the shares were purchased. This is subject to the
achievement of a performance target which requires that the
percentage growth in the Company’ s annualised headline earnings
per share over a period of three consecutive financial years
commencing with the year in which the award was made must
exceed the percentage growth in the Retail Prices Index over the
same period by an average of at least 4% per annum. If, at the end
of the three year performance period, the growth target has not
been achieved, the matching awards lapse. 
In addition to the achievement of the performance target,
participants must remain employed by the Group until the date of
vesting of the matching awards, and hold the shares purchased
throughout this period.
In order to avoid dilution of shareholders’ equity , any awards made
under the Plan will be sourced from existing shares held by the
Novar Performance Partnership Plan Share Trust. 
Set out in the table above are details of the conditional matching
awards of shares made to each Director under the Plan, including
those made in 2003, and the shares purchased by them. All the
shares purchased by the Directors under the Plan are also included
in the table of Directors’ interests on page 22.
Conditional matching awards of shares which were made to
Mr Hintz (of 153,755 shares) and to Mr Korbell (of 24,256 shares) 
on 26 May 2000, with a market value of 161p, lapsed during the
year as the required performance target was not achieved.
Share Option Schemes
The Company currently operates the share option schemes
described below.
Novar plc Executive Share Option Scheme 
(last options granted in 1996)
Mr Korbell was the only Director in 2003 who held options granted
under this scheme, along with other senior executives. All options
were granted at market value and are normally exercisable only
after they have been held for at least three years. No performance
criteria attached to options granted up to and including 1995, in
line with market practice at that time, but options granted in 1996
are exercisable only if the percentage growth in the Company’ s
annualised headline earnings per share over any period of three
consecutive financial years prior to exercise exceeds the
percentage growth in the Retail Prices Index over the same period
by an average of at least 2% per annum.
Novar plc 1996 Executive Share Option Scheme
(options granted since 1997)
All the executive Directors, along with other senior executives, hold
options granted under this scheme. Option grants to executive
Directors are normally made on an annual basis, up to a maximum
entitlement of one and a third times salary. All options are granted
at not less than market value and are normally exercisable only
after they have been held for at least three years. 
Performance Partnership Plan
Directors’ Interests
Date of
Date of vesting of
conditional Market conditional Number
matching Number price matching of shares
Directors award of shares Pence award purchased
B J Hintz 3 April 2001 203,289 152 March 2004 109,154
24 March 2003 32,657 105 March 2006 19,437
C L Korbell 3 April 2001 29,937 152 March 2004 18,485 
24 March 2003 3,748 105 March 2006 2,689
M J E McKeon 3 April 2001 34,210 152 March 2004 18,368 
24 March 2003 5,514 105 March 2006 3,282
Directors’ emoluments
Year to 31 December T otal emoluments
excluding pensions
Salary and fees Benefits Bonus 2003 2002
Directors £000 £000 £000 £000 £000
Sir Graham Hearne 170 –– 170 155
B J Hintz 599 35 45 679 642 
S L Howard 33 –– 33 32 
C L Korbell 333 22 144 499 415 
M J E McKeon 260 19 20 299 277 
Dr G M Murphy 40 –– 40 35
O H J Stocken 33 –– 33 32
Sir Geoffrey Whalen 40 –– 40 35
T otal 1,508 76 209 1,793 1,623
Mr I G Ashby, who left the Company in October 2002, received total remuneration, including compensation for termination of his employment, of £480,000 in 2002.
969_24-28  18/3/04  1:00 pm  Page 25 Novar annual report 2003
Report to shareholders on Directors’ remuneration continued 26
Annual option grants have been made since 1997 and are subject
to performance targets linked to headline earnings per share
growth on the same basis as the 1996 grants described above.
However, in order to make the performance target more
challenging, options granted in 2004 and thereafter will be
exercisable only if the percentage growth in the Company’ s
annualised headline earnings per share over a single period of
three consecutive financial years commencing with the year of
grant exceeds the percentage growth in the Retail Prices Index
over the same period by an average of at least 4% per annum. If,
at the end of the three year performance period, the growth target
has not been achieved, the options will lapse.
The calculations relating to the achievement of the performance
targets are reviewed by the Company’ s auditors.
In 1998 and 1999, enhanced grants of options, worth up to three
times individuals’ normal entitlement, were made to the then
executive Directors and certain of the Group’s most senior
executives. The options are subject to stringent performance
conditions designed to promote superior improvement in the
underlying financial performance of the Group, and are conditional
upon individuals having a minimum personal holding of shares in
the Company until exercise. In addition to the headline earnings
per share target described above, a second performance target
linked to increases in Total Shareholder Return must be satisfied
before options will be exercisable. For the 1998 grant, the
Company’s Total Shareholder Return is required to increase by at
least 33% by the third anniversary of the grant date, or be at least
equal to the median of the combined indices of the Building and
Construction and the Building Materials and Merchants Sectors in
the FTSE Actuaries All-Share Index (which has since been merged into
a single index, the FTSE Construction and Building Materials Index),
in which case 50% of the options become exercisable. This
percentage increases proportionately on a straight line scale up to
100% if the Total Shareholder Return reaches 110%, or is at or
above the upper quartile of the combined indices at the third
anniversary. For the 1999 grant, similar conditions apply although
there is no comparative measure of Total Shareholder Return in
relation to other sector companies, and the range of increase in the
Company’s Total Shareholder Return required for vesting at the
third anniversary starts at 50% (for 50% of the options to be
exercisable), rising to 110% (for 100% to be exercisable).
The options are normally exercisable between the third and
seventh anniversary of the grant date and the increases in 
Total Shareholder Return required for exercise increase
proportionately through this period. The exercise price also
increases through this period to reflect the cost to the Company of
providing the option. In 1998, the grant was in place of the normal
annual grant made under the scheme for the executive Directors
and the other recipients. In 1999, the grant was made following the
release of the Company’s interim results in August and was in
recognition of the substantial improvement in the financial
performance of the Group at the half year. This was in addition to
a normal grant which had been made earlier in the year under the
scheme, with the aggregate value of the two grants capped at three
times salary .
Share Options
Executive Share Options
Directors’ Interests Exercise Options at Granted Options at
Date of price Exercise 1 January 2003 during 2003 31 December 2003
Directors grant Pence period Number of shares Number of shares Number of shares
B J Hintz 14 November 1997 182.0 2000-2007 989,011 989,011
15 April 1998 212.0-222.0 2001-2005 947,368 947,368
16 March 1999 136.0 2002-2009 485,294 485,294 
10 August 1999 187.0-200.0 2002-2006 481,050 481,050 
14 March 2000 124.0 2003-2010 553,763 553,763
16 March 2001 167.0 2004-2011 411,178 411,178
13 March 2002 151.0 2005-2012 490,066 490,066
12 March 2003 101.0 2006-2013 – 761,716
3
761,716
C L Korbell 6 May 1994 341.0 1997-2004 59,228 59,228
19 April 1995 256.3 1998-2005 79,039 79,039
15 April 1996 221.3 1999-2006 101,878 101,878
15 April 1997 249.0 2000-2007 128,051 128,051
15 April 1998 212.0-222.0 2001-2005 387,032 387,032
16 March 1999 136.0 2002-2009 279,682 279,682
10 August 1999 187.0-200.0 2002-2006 286,626 286,626
14 March 2000 124.0 2003-2010 329,301 329,301
16 March 2001 167.0 2004-2011 266,134 266,134
13 March 2002 151.0 2005-2012 316,253 316,253
12 March 2003 101.0 2006-2013 – 436,081
3
436,081
M J E McKeon 17 May 2000 155.5 2003-2010 257,234 257,234
16 March 2001 167.0 2004-2011 159,681 159,681
13 March 2002 151.0 2005-2012 203,091 203,091
12 March 2003 101.0 2006-2013 – 323,432
3
323,432 
Notes
1 Options granted under the Novar plc Executive Share Option Scheme with no performance conditions.
2 Options granted under the Novar plc Executive Share Option Scheme with performance conditions linked to increases in headline earnings per share.
3 Options granted under the Novar plc 1996 Executive Share Option Scheme with performance conditions linked to increases in headline earnings per share.
4 Options granted under the Novar plc 1996 Executive Share Option Scheme with performance conditions linked to increases in headline earnings per share and 
total shareholder return. The exercise price shown increases between the third and seventh anniversary of the date of grant.
5 247,252 of the shares comprising this option are subject to the additional performance conditions and other requirements described under Note 4 above. 
The grant formed part of the remuneration package negotiated to secure Mr Hintz’ s employment.
6 The market price of Ordinary shares at 31 December 2003 was 138p and the range during the year was 100p to 141.5p.
7 None of the above Directors exercised any Executive share options during the year and none lapsed.
8 On 3 October 2003, Mr I G Ashby, a former director whose service agreement terminated on 31 October 2002, exercised an option over 349,809 Ordinary shares
granted on 24 September 2001 at an exercise price of 131.5p. The market price of the shares at the time of exercise was 138p. Mr Ashby’ s remaining options over
203,091 Ordinary shares granted on 13 March 2002 at 151p lapsed on 31 December 2003.
3,5
4
3
4
3
3
3
1
1
2
3
4
3
4
3
3
3
3
3
3
969_24-28  18/3/04  1:00 pm  Page 26 Novar annual report 2003
Report to shareholders on Directors’ remuneration continued 27
Defined benefit schemes
Details of the value of individual pension entitlements and
information relating to defined benefits available to Mr McKeon
under the Novar Executive Pension Scheme are shown below.
Mr McKeon paid contributions of £5,913 during the year. The
increase in accrued pension over the year was £3,460 (including
inflation) and £3,313 (excluding inflation) and the total accrued
pension at the end of the year was £12,100. The transfer values of
the accrued pension (excluding inflation) at 31 December 2002 and
31 December 2003 were £72,451 and £117,215 respectively. The
increase in the transfer value over the year , less contributions made
by the director during the year, amounted to £38,851. The transfer
value of the increase in accrued pension (excluding inflation) as 
at 31 December 2003, less director contributions, was £26,182.
Details of the value of individual pension entitlements and
information relating to defined benefits available to Mr Korbell are
shown below.
Clarke American Checks, Inc. – Deferred Compensation Agreement
Mr Korbell made no contributions during the year. There was 
no increase in the US dollar value of his accrued pension over 
the year while the sterling value fell by £1,501 (including inflation)
and £1,784 (excluding inflation). The total accrued pension at the
end of the year was £13,407. The transfer values of the accrued
pension as at 31 December 2002 and 31 December 2003 were
£50,175 and £50,620 respectively . The increase in the transfer value
over the year was £445. The transfer value of the change in the
accrued pension (excluding inflation) as at 31 December 2003 was 
negative £6,735.
Clarke American Checks, Inc. – Supplemental Executive
Retirement Plan
The increase in accrued pension over the year was US$15,333
(including inflation) and US$8,568 (excluding inflation) while the
sterling value fell by £13,403 (including inflation) and £17,549
(excluding inflation). The total accrued pension at the end of the
year was £204,830. All figures are inclusive of half of the benefits
payable under the money purchase and all of the benefits payable
under the deferred compensation arrangements described above.
The transfer values of the accrued pension as at 31 December 2002
and 31 December 2003 were £1,078,336 and £1,241,983 respectively .
The increase in the transfer value over the year was £163,647. 
The transfer value of the change in the accrued pension 
(excluding inflation) as at 31 December 2003 was negative £106,409.
The Plan is unfunded. 
Approved by the Board of Directors 
Sir Geoffrey Whalen CBE
Chairman of the Remuneration Committee
In order to avoid dilution of shareholders’ equity, any options
exercised under the scheme will be sourced from existing shares
through the Novar Employee Trust. 
Novar plc 1999 Savings Related Share Option Scheme
Under this scheme, options over shares are offered annually 
to all permanent UK employees (both full-time and part-time) with
a minimum of one year’s service. The offer in March 2003 was at a
discount of 20% to the market value of the Company’ s shares on the
day before the invitation date to participate. 
On 8 April 2003 Mr McKeon was granted an option under the
scheme over 6,686 Ordinary shares at an exercise price of 84.8p.
The option will become exercisable during a six month period from
its maturity on 1 July 2006.
On 14 October 2003, following the maturity of an option granted in
2000 under the scheme, Mr Hintz exercised an option over 9,765
Ordinary shares at an exercise price of 99.2p. The market price of
the shares at the time of exercise was 136.5p.
Graph of total shareholder return
The graph below shows the total shareholder return on a holding
of Novar plc Ordinary shares over the last five financial years ended
31 December 2003, and on an equivalent holding of shares
comprising the FTSE 250 Actuaries Share Index over the same
period. This Index has been chosen as the Directors consider that
this is the most appropriate broad equity market index.
Pension Benefits
Money purchase arrangements
Mr Hintz has money purchase arrangements only. The Company
has agreed to pay an amount equal to 50% of base salary each year
towards the provision of pension, death in service, and disability
benefits. In 2003, this amount was £299,375. Mr Hintz has an
overseas pension plan established under trust.
Mr McKeon has both money purchase and defined benefit
arrangements. The Company makes an annual discretionary
contribution to and in respect of the Novar Funded Unapproved
Retirement Benefit Scheme (FURBS). In 2003, this amounted to
£37,755 for Mr McKeon. 
Mr Korbell has both money purchase and defined benefit
arrangements. Clarke American Checks, Inc. makes an annual
discretionary contribution to the Clarke American Profit Sharing
Retirement Trust and related Benefit Equalisation Plan for the
benefit of Mr Korbell of an amount approximately equal to 
4% of his annual compensation, including bonus. In 2003, this 
totalled £14,069.
240
220
200
180
160
140
120
100
80
969_24-28  18/3/04  1:00 pm  Page 27 Novar annual report 2003
Independent auditors’ report to the members of Novar plc 28
Independent auditors’ report 
to the members of Novar plc
We have audited the financial statements of Novar plc for the year
ended 31 December 2003 which comprise the consolidated profit
and loss account, the consolidated statement of total recognised
gains and losses, the reconciliation of movements in shareholders’
funds, the balance sheets, the consolidated cash flow statement,
the principal accounting policies and the related notes 1 to 29.
These financial statements, have been prepared under the
accounting policies set out therein. We have also audited the
information in the part of the Report to shareholders on Directors’
remuneration 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. T o 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 Report to shareholders on Directors’
remuneration. Our responsibility is to audit the financial statements
and the part of the Report to shareholders on Directors’
remuneration 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 Report to shareholders on Directors’
remuneration 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 Report of the Directors
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 Report of the Directors 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 Report to
shareholders on Directors’ remuneration 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 Report to shareholders on Directors’ remuneration 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 and
the Group, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the
information and explanations which we considered necessary
in order to provide us with sufficient evidence to give reasonable
assurance that the financial statements and the part of the Report
to shareholders on Directors’ remuneration described as having
been audited 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 Report
to shareholders on Directors’ remuneration 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 31 December 2003
and of the loss of the Group for the year then ended; and
• the financial statements and part of the Report to shareholders
on Directors’ remuneration described as having been audited
have been properly prepared in accordance with the
Companies Act 1985.
Deloitte & Touche LLP
Chartered Accountants and Registered Auditors
London
25 February 2004
969_24-28  18/3/04  1:00 pm  Page 28 29
Novar annual report 2003
Consolidated profit and loss account
Consolidated profit and loss account
2003 2003
Before Goodwill
goodwill amortisation
amortisation and 2002
and exceptional exceptional 2003 As restated
items items T otal (note 9)
for the year ended 31 December 2003 Note £m £m £m £m
Turnover 1a
Existing operations 1,418.1 – 1,418.1 1,448.2
Acquisitions 12.5 – 12.5 –
Continuing operations 1,430.6 – 1,430.6 1,448.2
Group operating (loss)/profit 1b
Existing operations 3 83.0 (115.5) (32.5) 75.7
Acquisitions 3.5 (1.4) 2.1 –
Continuing operations 86.5 (116.9) (30.4) 75.7
Group operating profit before restructuring, 
goodwill amortisation and exceptional items
Continuing operations 106.1 – 106.1 117.7
Restructuring (19.6) – (19.6) (18.4)
Goodwill amortisation – (23.9) (23.9) (22.1)
Exceptional items
– goodwill impairment – (93.0) (93.0) –
– other ––– (1.5)
Group operating (loss)/profit 86.5 (116.9) (30.4) 75.7
Share of operating profits of joint ventures and associated undertakings 7.7 (1.1) 6.6 4.4
Total operating (loss)/profit 94.2 (118.0) (23.8) 80.1
Disposal of fixed assets – continuing operations – (2.0) (2.0) 5.3
Disposal and closure of businesses – continuing operations ––– (1.6)
(Loss)/profit on ordinary activities before interest 94.2 (120.0) (25.8) 83.8
Net interest 5 (8.2) – (8.2) (10.0)
(Loss)/profit on ordinary activities before taxation 86.0 (120.0) (34.0) 73.8
Profit before goodwill amortisation and exceptional items 86.0 – 86.0 94.7
Goodwill amortisation – (25.0) (25.0) (23.1)
Profit before exceptional items 86.0 (25.0) 61.0 71.6
Exceptional items – (95.0) (95.0) 2.2
(Loss)/profit on ordinary activities before taxation 86.0 (120.0) (34.0) 73.8
T axation on (loss)/profit on ordinary activities 6 (28.0) (34.9)
(Loss)/profit on ordinary activities after taxation (62.0) 38.9
Minority interests (equity) (0.4) (0.6)
(Loss)/profit for the financial year (62.4) 38.3
Dividends – equity shares (Ordinary) 8 (39.1) (38.9)
Dividends – non equity shares (Preference and “B”)8 (9.7) (10.6)
Finance cost on redemption of non equity shares (1.0) –
Retained loss 21 (112.2) (11.2)
(Loss)/earnings per Ordinary share 7
Basic (17.9)p 6.7p
Diluted (17.9)p 6.7p
Basic before goodwill amortisation and exceptional items 11.2p 11.9p
Dividend per Ordinary share 8 9.5p 9.5p
969_29-33  18/3/04  1:00 pm  Page 29 30
Novar annual report 2003
Consolidated statement of total recognised gains and losses 
Consolidated statement of total 
recognised gains and losses
2002
Group
2003 As restated
Group (note 9)
for the year ended 31 December 2003 Note £m £m
(Loss)/profit for the financial year (62.4) 38.3
Currency translation differences on foreign currency investments (21.4) (31.0)
Currency translation differences on foreign currency borrowings 17.9 17.3
Gain on currency forward hedging contracts 0.8 10.5
T axation on currency translation differences on foreign currency borrowings and forward currency contracts – (1.3)
Loss on deemed disposal of interest in associated undertaking – (0.5)
Total recognised gains and losses relating to the year (65.1) 33.3
Prior year adjustment 9 4.1
Total gains and losses recognised since last annual report (61.0)
The reported loss for the year is not materially different from the profit on an unmodified historical cost basis.
Reconciliation of movements 
in shareholders’ funds
2002
Group
2003 As restated
Group (note 9)
for the year ended 31 December 2003 Note £m £m
Total recognised gains and losses relating to the year (65.1) 33.3
Dividends (48.8) (49.5)
Finance cost on redemption of non equity shares (1.0) –
(114.9) (16.2)
Issue of new Ordinary shares 0.4 0.4
Redemption of “B” shares (0.1) (0.1)
Purchase of own non equity shares (19.4) –
Purchase of own equity shares into ESOP reserve – (3.8)
Issue of own equity shares from ESOP reserve 1.6 0.7
(Decrease)/increase of charge for cost of employee share awards (1.8) 0.3
Net reduction to shareholders’ funds (134.2) (18.7)
Opening shareholders’ funds as previously reported 476.9 493.9
Prior year adjustment 9 (34.9) (33.2)
Opening shareholders’ funds as restated 442.0 460.7
Closing shareholders’ funds 307.8 442.0
The notes on pages 33 to 45 form part of these financial statements.
969_29-33  18/3/04  1:00 pm  Page 30 31
Novar annual report 2003
Balance sheets
Balance sheets
2002 2002
Group Company
2003 As restated 2003 As restated
Group (note 9) Company (note 9)
at 31 December 2003 Note £m £m £m £m
Fixed asset
Intangible assets 10 297.4 382.9 – –
T angible assets 11 232.4 258.4 2.2 0.6
Investments 12 52.6 53.6 2,062.4 2,087.3
582.4 694.9 2,064.6 2,087.9
Current assets
Stocks 13 106.8 94.3 – –
Debtors – amounts falling due within one year 14 244.2 232.8 20.5 21.1
Debtors – amounts falling due after more than one year 14 21.0 18.2 5.2 3.5
Cash at bank and in hand 15 59.7 41.8 – –
431.7 387.1 25.7 24.6
Creditors – amounts falling due within one year
Borrowings 16a (7.9) (46.8) (64.7) (144.2)
Other creditors 16b (278.6) (257.3) (51.5) (51.7)
(286.5) (304.1) (116.2) (195.9)
Net current assets/(liabilities) 145.2 83.0 (90.5) (171.3)
Total assets less current liabilities 727.6 777.9 1,974.1 1,916.6
Creditors – amounts falling due after more than one year
Borrowings 17a (305.5) (213.5) (83.6) –
Other creditors 17b (19.8) (24.4) (1,189.9) (1,164.9)
(325.3) (237.9) (1,273.5) (1,164.9)
Provisions for liabilities and charges 19 (93.5) (96.6) (0.4) (0.8)
Net assets 308.8 443.4 700.2 750.9
Capital and reserves
Called up share capital
– Equity shares (Ordinary) 20 119.7 119.6 119.7 119.6
– Non equity shares (Preference and “B”)20 21.3 24.7 21.3 24.7
Share premium account 21 12.3 12.0 12.3 12.0
Equity shares held in treasury – ESOP reserve 21 (36.5) (39.0) (36.5) (39.0)
Capital redemption reserve 21 30.0 26.6 30.0 26.6
Revaluation reserve 21 2.2 2.3 – –
Other reserves 21 – – 178.5 178.5
Profit and loss account 21 158.8 295.8 374.9 428.5
Shareholders’ funds (including non equity interests) 307.8 442.0 700.2 750.9
Minority interests (equity) 1.0 1.4 – –
Total capital employed 308.8 443.4 700.2 750.9
Equity shareholders’ funds 180.5 295.0 572.9 603.9
Non equity shareholders’ funds 127.3 147.0 127.3 147.0
Approved by the Board of Directors
Sir Graham Hearne,
Director
B J Hintz,
Director
25 February 2004
The notes on pages 33 to 45 form part of these financial statements.
969_29-33  18/3/04  1:00 pm  Page 31 32
Novar annual report 2003
Consolidated cash flow statement
Consolidated cash flow statement
2002
2003 As restated
for the year ended 31 December 2003 Note £m £m
Net cash inflow from operating activities – continuing operations 25a 130.9 119.6
Dividends from associated undertakings 1.9 1.6
Returns on investments and servicing of finance 25b (20.9) 18.7
Taxation (20.2) (15.4)
Capital expenditure and financial investment
Purchase of tangible fixed assets (40.8) (41.7)
Sale of tangible fixed assets 1.8 17.8
Loans advanced to joint ventures 12 (2.1) (1.3)
(41.1) (25.2)
Acquisitions and disposals
Purchase of businesses 26 (42.3) (7.4)
Investments in associated undertakings and joint ventures 12 (4.2) (11.3)
Cash acquired with businesses 26 1.5 0.2
Gross proceeds from disposal of businesses – 0.3
(45.0) (18.2)
Equity dividends paid (38.9) (39.1)
Cash (outflow)/inflow before financing (33.3) 42.0
Financing
Issue of new Ordinary shares 0.4 0.4
Redemption of “B” shares (0.1) (0.1)
Purchase of own non equity shares (20.4) –
Purchase of own equity shares into ESOP reserve – (3.8)
Issue of own equity shares from ESOP reserve 1.6 0.7
Net increase/(decrease) in debt 25c 74.4 (46.5)
55.9 (49.3)
Increase/(decrease) in cash in the year 22.6 (7.3)
Reconciliation of net cash flow to movement in net debt
Increase/(decrease) in cash in the year 22.6 (7.3)
Net (increase)/decrease in debt (74.4) 46.5
(Increase)/decrease in net debt resulting from cash flows (51.8) 39.2
Loans acquired with businesses – (1.2)
Effect of foreign exchange rate changes 16.6 16.1
(Increase)/decrease in debt in the year (35.2) 54.1
Opening net debt (218.5) (272.6)
Closing net debt 25d (253.7) (218.5)
969_29-33  18/3/04  1:00 pm  Page 32 Novar annual report 2003
Principal accounting policies 33
Principal accounting policies
Basis of accounting
The accounts have been prepared under the historical cost convention, as
modified by the revaluation of certain fixed assets, and in accordance with
applicable United Kingdom accounting standards.
Basis of consolidation
The consolidated accounts comprise the accounts of the Company and all
of its subsidiary undertakings at 31 December 2003. The results of
subsidiary undertakings are included in the profit and loss account using
the acquisition method as from the effective date of acquisition or in the
case of disposals up to the effective date at which the investment is sold.
Goodwill
Purchased goodwill arising prior to 1 January 1998 was written off directly
to reserves and remains eliminated against reserves. This is charged to the
profit and loss account on the disposal or termination of the related
businesses. Subsequent to that date, and in accordance with FRS 10, where
businesses are acquired, any difference between the cost of acquisition and
the fair value of the net assets acquired is capitalised as goodwill and
written off on a straight line basis over the estimated useful economic life
of up to 20 years. Provision is made for any impairments.
Associated undertakings and joint ventures
Associated undertakings and joint ventures are defined as investments in
which the Group has a long-term interest and is in a position to exercise
significant influence over the company in which the investment is made.
The Group’ s share of the profits less losses of associated undertakings and
joint ventures is included in the consolidated profit and loss account. Its
interest in the net assets of associated undertakings and joint ventures is
included as an investment in the consolidated balance sheet at the Group’ s
share of net assets at acquisition plus the Group’ s share of retained profits.
Foreign currencies
Transactions in foreign currencies are recorded at the rates of exchange at
the dates of the transactions or, if hedged, at the forward currency rate.
Balance sheet items in foreign currencies are translated into sterling at 
mid-market rates of exchange at the balance sheet date. Profit and loss
accounts of overseas subsidiary undertakings are translated into sterling at
average rates of exchange for the relevant accounting period.
Exchange differences arising from the retranslation at year end rates of the
net investment in foreign undertakings, less exchange differences on
foreign currency borrowings and any linked foreign exchange contracts
which relate to investments in overseas assets and any tax arising on 
these exchange differences are dealt with as reserve movements. These
exchange differences are reported in the statement of total recognised
gains and losses. All other exchange differences are taken to the profit and
loss account. 
Derivative financial instruments
The derivative financial instruments used by the Group to manage its
currency risks are principally forward foreign currency contracts, foreign
exchange swaps and interest rate swaps.
The Group does not enter into speculative contracts and all derivative
transactions are entered into to manage the risks arising from underlying
business activities.
Interest payments or receipts arising from derivative financial instruments
are recognised within interest payable or receivable as appropriate. Any
premiums or discounts arising are amortised over the life of the instrument.
Termination payments made or received are spread over the life of the
underlying exposure in cases where the underlying exposure continues 
to exist. In other cases termination payments are taken to the profit and 
loss account.
Leases
Assets acquired under finance leases are included under the relevant
category of tangible fixed assets and depreciated accordingly. The capital
element of the future lease rentals payable is included as appropriate under
creditors due within or after one year. The interest element of lease rentals
is charged to the profit and loss account. Rentals under operating leases
are charged to profit, as incurred, over the terms of the lease.
Tangible fixed assets
T angible fixed assets, except freehold land, are written off on a straight line
basis over the estimated useful lives which, for the major categories, are:
Freehold buildings –  10 to 50 years
Fixtures and fittings –  2 to 20 years
Leasehold land and buildings –  50 years or term of lease if less
Plant, machinery and tools –  2 to 25 years
Motor vehicles –  3 to 6 years
Long leaseholds are land and buildings held on leases which expire 50 or
more years after the year end. Short term leaseholds are land and buildings
held on leases which expire within 50 years of the year end. Amounts
receivable under capital grants are treated as deferred income and credited
to the profit and loss account by installment over the expected useful life of
the related asset on a basis consistent with the depreciation policy.
Following the implementation of FRS 15 (‘Tangible Fixed Assets’) the
Group has adopted a policy of not revaluing fixed assets. The carrying
amount of tangible fixed assets previously revalued has been retained at
their book amount in accordance with the transitional provisions of FRS 15.
Research and development
All expenditure on research and development is written off in the year in
which it is incurred.
Stocks
Stocks and work in progress are valued at the lower of cost and estimated
net realisable value. The cost of work in progress and finished goods
comprises materials, labour and attributable overheads.
Deferred taxation
Deferred taxation is provided in full on timing differences that 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 crystallise based
on current tax rates and law. Timing differences arise from the inclusion of
items of income and expenditure in taxation computations in periods
different from those in which they are included in financial statements.
Deferred tax is not provided on timing differences arising from the
revaluation of fixed assets where there is no binding contract to dispose of
these assets nor on unremitted earnings where there is no binding
commitment to remit these earnings. 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.
Retirement benefits
The retirement benefit obligations of the Company and its UK subsidiary
undertakings are financed by contributions to separate funds, which are
subject to actuarial valuations every three years. Pension costs in respect of
employees who are members of these pension schemes are charged to the
profit and loss account so as to spread the cost of pensions over the
average service lives of employees in the schemes.
Certain foreign subsidiary undertakings operate defined contribution and
defined benefit pension schemes. Pension costs in respect of the defined
contribution pension schemes are charged to the profit and loss account in
accordance with the contributions paid. Pension costs in respect of
employees who are members of overseas defined benefit pension schemes
are charged to the profit and loss account so as to spread the cost of
pensions over the average service lives of employees in the schemes.
The Group’s post-retirement benefit schemes other than pensions are
accounted for so as to spread the costs over the average service lives of
employees in the schemes. In accordance with FRS 17, additional
disclosures relating to the Group’ s pension schemes are given in note 22.
Turnover
Turnover represents the invoiced value of sales excluding Value Added T ax
and similar sales related taxes.
Investment in own shares
The Company’s investment in its own shares is deducted in arriving at
shareholders’ funds.
969_29-33  18/3/04  1:00 pm  Page 33 Novar annual report 2003
Notes to the accounts 34
1 Segmental analysis
2002
As 
restated
2003 (note 9)
a) Turnover £m £m
By class of business
Continuing operations
– Intelligent Building Systems 603.9 567.5
– Indalex Aluminum Solutions 479.3 515.0
– Security Printing Services 347.4 365.7
1,430.6 1 ,448.2
By geographical origin
Continuing operations
– UK 271.9 282.3
– North America 889.0 930.6
– Continental Europe 228.5 204.7
– Rest of the World 41.2 30.6
1,430.6 1,448.2
The geographical analysis of turnover by destination is not materially
different from turnover by origin.
b) Group operating (loss)/profit
By class of business
Continuing operations
Before restructuring, goodwill amortisation 
and exceptional operating costs
– Intelligent Building Systems 36.1 37.5
– Indalex Aluminum Solutions 7.6 17.1
– Security Printing Services 62.4 63.1
106.1 117.7
Restructuring (19.6) (18.4)
Goodwill amortisation (23.9) (22.1)
Exceptional operating costs (93.0) (1.5)
(30.4) 75.7
By geographical origin
Continuing operations
Before restructuring, goodwill amortisation 
and exceptional operating costs
– UK 4.8 8.3
– North America 80.8 86.7
– Continental Europe 21.7 21.4
– Rest of the World (1.2) 1.3
106.1 117.7
Restructuring (19.6) (18.4)
Goodwill amortisation (23.9) (22.1)
Exceptional operating costs (93.0) (1.5)
(30.4) 75.7
After restructuring costs, goodwill amortisation and exceptional operating
costs the operating results of continuing businesses by class of business
were: Intelligent Building Systems £86.8m loss (2002 as restated: £9.8m profit),
Indalex Aluminum Solutions £1.4m loss (2002 as restated: £6.9m profit) and
Security Printing Services £57.8m profit (2002 as restated: £59.0m profit).
The operating results of continuing businesses by geographical origin after
restructuring costs, goodwill amortisation and exceptional operating costs
were: UK £69.5m loss (2002 as restated: £5.5m loss), North America £64.7m
profit (2002: £71.6m profit), Continental Europe £24.1m loss (2002: £8.4m
profit) and Rest of the World £1.5m loss (2002: £1.2m profit).
1 Segmental analysis continued
2002
As 
restated
2003 (note 9)
c) Net assets £m £m
By class of business
– Intelligent Building Systems 160.8 159.2
– Indalex Aluminum Solutions 177.5 194.2
– Security Printing Services 62.1 74.1
Continuing operations including acquisitions 400.4 427.5
Discontinued operations – (0.5)
Net operating assets 400.4 427.0
Goodwill 297.4 382.9
T ax, dividends and other corporate items (135.3) (148.0)
Net debt (253.7) (218.5)
Net assets 308.8 443.4
By geographical location
– UK 95.4 94.6
– North America 256.9 284.0
– Continental Europe 39.2 37.9
– Rest of the World 8.9 11.0
Continuing operations including acquisitions 400.4 427.5
Discontinued operations – (0.5)
Net operating assets 400.4 427.0
2 Operating costs
2002
As
restated
2003 (note 9)
£m £m
Changes in stocks of finished 
goods and work in progress 11.4 15.2
Own work capitalised (0.1) (0.4)
Other operating income (6.2) (3.9)
Raw materials and consumables 534.6 546.6
Other external charges (including exceptional 
costs of £93.0m – note 3 (2002: £1.5m)) 437.4 329.7
Staff costs (note 4c) 405.6 406.8
Depreciation and impairment of owned assets 54.4 56.4
Goodwill amortisation 23.9 22.1
1,461.0 1,372.5
Operating profit is stated after
2003 2002
charging the following: £m £m
Payments under operating leases
– Hire of plant and machinery 12.6 13.4
– Other 14.7 14.1
Research and development expenditure 29.9 25.9
Restructuring costs 19.6 18.4
Fees paid to the Group’ s auditors were
– Audit fees and expenses 0.7 0.6
– T ax fees and expenses 0.4 0.4
– Other fees and expenses 0.4 0.7
1.5 1.7
Fees paid to other accountants 0.1 0.1
1.6 1.8
The audit fee for the Company was £0.1m (2002: £0.1m). Also paid to 
the Group’s auditors was £0.1m (2002: £0.2m) which is related to business
acquisitions and divestments. Where appropriate, project work is put out 
to tender.
Notes to the accounts
969_34-45  18/3/04  1:01 pm  Page 34 35
Novar annual report 2003
Notes to the accounts continued
3 Exceptional items – operating costs
In accordance with FRS 11 (Impairment of fixed assets and goodwill) the
carrying value of the Group’s subsidiary undertakings has been compared
to their recoverable amounts, represented by their value in use to the
Group. The review has resulted in an exceptional charge of £93.0m for
goodwill impairment, primarily in respect of businesses operating in the
telecommunications and data communications markets. The pre-tax
discount rate used in the calculation to arrive at the valuations was 10%.
4 Employees
2003 2002
a) Average weekly number of employees Number Number
By class of business
– Intelligent Building Systems 6,490 6,578
– Indalex Aluminum Solutions 3,397 3,596
– Security Printing Services 3,584 3,785
Continuing operations 13,471 13,959
Discontinued operations 1 9
13,472 13,968
2003 2002
b) Year end number of employees Number Number
By class of business
– Intelligent Building Systems 6,611 6,360
– Indalex Aluminum Solutions 3,389 3,359
– Security Printing Services 3,672 3,750
Continuing operations 13,672 13,469
Discontinued operations 1 2
13,673 13,471
Employee numbers are stated on a full time equivalent basis.
2003 2002
c) Staff costs (including Directors’ emoluments) £m £m
Wages and salaries 342.2 356.5
Social security costs 37.7 37.0
Pensions costs 25.7 13.3
405.6 406.8
2003 2002
d) Emoluments of Directors £’000 £’000
Emoluments of the Directors of the Company
– Fees 316 289
– Other emoluments and benefits 1,268 1,705
– Performance related bonuses 209 109
Aggregate emoluments 1,793 2,103
– Pension contributions to money purchase schemes 338 338
2,131 2,441
Disclosures on Directors’ remuneration, share options, long–term incentive
schemes, pension contributions and pension entitlements required by the
Companies Act 1985 and those specified for audit by the Listing Rules of
the Financial Services Authority, are contained in the tables on pages 25
and 26 and the paragraphs referring to pensions benefits on page 27 within
the Report to shareholders on Directors’ remuneration, and form part of
these audited financial statements.
5 Net interest
2003 2002
£m £m
Interest payable:
Bank loans, overdrafts and other loans 
wholly repayable within five years (7.4) (5.7)
Other loans wholly repayable after five years (6.1) (10.5)
(13.5) (16.2)
Interest receivable 6.0 7.3
(7.5) (8.9)
Share of interest of associated undertakings (0.7) (1.1)
(8.2) (10.0)
Repayment terms and interest rates are shown in note 18.
6 Taxation on (loss)/profit on ordinary activities
2003 2002
£m £m
Current taxation
– UK corporation tax based on (loss)/profit 
for the year at 30.0% (2002: 30.0%) – (1.3)
– UK corporation tax for prior year (1.4) (2.0)
– Overseas taxation for current year 26.2 32.0
– Overseas taxation for prior year (1.5) (0.7)
23.3 28.0
Deferred taxation
– UK under provision in prior years – 1.9
– Overseas origination and reversal of timing differences 1.8 4.0
– Overseas under/(over) provision in prior years 2.2 (0.9)
27.3 33.0
Share of associated undertakings’ taxation 1.9 1.6
29.2 34.6
T ax (credit)/charge arising on exceptional items (1.2) 0.3
28.0 34.9
Reconciliation of the taxation charge:
2002
As
restated
2003 (note 9)
£m £m
(Loss)/profit before taxation (34.0) 73.8
T axation at 30% (2002: 30%) (10.2) 22.1
Effect of:
– non-deductible expenses/(non-taxable income) 28.3 (1.4)
– accelerated capital allowances (0.3) (2.7)
– other timing differences (0.8) 5.3
– losses 6.3 –
– higher overseas taxation rates 3.6 9.0
– adjustments in respect of prior years (2.9) (2.7)
Current taxation charge for the year 24.0 29.6
Deferred taxation before exceptional items 4.0 5.0
Deferred taxation on exceptional items – 0.3
T otal taxation charge for the year 28.0 34.9
7 (Loss)/earnings per Ordinary share
2002
As
restated
2003 (note 9)
£m £m
(Loss)/earnings
(Loss)/profit for the financial year (62.4) 38.3
Dividends – non equity shares (9.7) (10.6)
Finance cost on redemption of non equity shares (1.0) –
(Loss)/earnings after goodwill amortisation and 
exceptional items (73.1) 27.7
Goodwill amortisation 25.0 23.1
Exceptional items (post tax) 93.8 (1.9)
Earnings before goodwill amortisation and post tax
exceptional items 45.7 48.9
Number Number
Weighted average number of Ordinary shares in issue
Basic 409.1m 41 1.4m
Equivalent number of potential dilutive shares 
at full consideration – 0.4m
Adjusted number of Ordinary shares (diluted) 409.1m 41 1.8m
969_34-45  18/3/04  1:01 pm  Page 35 Novar annual report 2003
Notes to the accounts continued 36
7 (Loss)/earnings per Ordinary share continued
2002
As
restated
2003 (note 9)
(Loss)/earnings per Ordinary share (basic) Pence Pence
Before goodwill amortisation and 
post tax exceptional items 11.2 11.9
Goodwill amortisation (6.1) (5.6)
Exceptional items (post tax) (23.0) 0.4
After goodwill amortisation and exceptional items (17.9) 6.7
(Loss)/earnings per Ordinary share (diluted)
After goodwill amortisation and exceptional items (17.9) 6.7
The (loss)/earnings per Ordinary share are shown before and after goodwill
amortisation and post tax exceptional items to show the underlying financial
performance on a basis comparable with many other groups. The weighted
average number of Ordinary shares in issue used above excludes the shares
held by the Novar Employee Trust and the Novar Performance Partnership
Plan Share T rust. (Loss)/earnings are the same in the calculation of the basic
and diluted earnings per share.
8 Dividends
2003 2002
£m £m
Equity shares
– Interim Ordinary dividend of 2.90p paid (2002: 2.90p) 11.9 11.9 
– Final Ordinary dividend of 6.60p proposed 
(2002: 6.60p) 27.2 27.0
39.1 38.9
Non equity shares
– Convertible Preference dividend paid and accrued
of 7.25p (2002: 7.25p) 9.7 10.6
– “B” share dividend paid and accrued of 2.93p
(2002: 3.22p) – –
48.8 49.5
9 Prior year adjustment
UITF 38 and UITF 17 (revised) have been adopted for the first time in the
Group accounts for the year ended 31 December 2003. UITF 38 requires
that the Company’ s own shares held in an ESOP trust should be deducted
in arriving at shareholders’ funds. The Group’s previous policy was to
recognise the shares as a fixed asset investment. UITF 17 (revised) requires
that the cost of employee share awards is based on the difference between
the fair value of the shares at the date of the award and the amount that an
employee may be required to pay for the shares. The Group’ s previous policy
was to base the charge on the difference between the cost of the shares
held in the ESOP trust to satisfy the awards and the amount the employee
may be required to pay for the shares. These changes have been
accounted for as a prior year adjustment and previously reported figures
have been restated accordingly.
The impact of adopting the new policies on the results for the year ended
31 December 2003 is to increase profit after tax by £0.4m (2002:£1.1m
increase). The cumulative effect on reserves at 1 January 2002 is a net
reduction of £33.2m, comprising a £36.2m reduction arising from the
creation of the ESOP reserve, and a £3.0m increase to the profit and loss
account reserve, which has been accounted for as a prior year adjustment
(31 December 2002: £34.9m reduction, comprising a £39.0m reduction
arising from the creation of the ESOP reserve through the reclassification 
of the fixed asset investment, and a £4.1m increase in the profit and 
loss account reserve).
10 Intangible fixed assets
Goodwill 
£m 
Cost:
At 1 January 2003 440.9
Currency translation (5.2)
Acquisitions 35.4
At 31 December 2003 471.1
Amortisation:
At 1 January 2003 58.0
Currency translation (1.2)
Provided during the year 23.9
Provision for impairment 93.0
At 31 December 2003 173.7
Net book value
At 31 December 2003 297.4
At 1 January 2003 382.9
11 Tangible fixed assets
Land and buildings
Plant
Short Fixtures mach-
Long lease- Motor & inery & Group
Freehold lease hold vehicles fittings tools total
£m £m £m £m £m £m £m
Cost or valuation:
At 1 January 2003 71.9 13.4 12.5 5.3 50.8 465.4 619.3
Currency translation (2.2) – (0.8) 0.2 (0.2) (17.0) (20.0)
Additions 0.9 0.1 0.3 0.3 9.1 30.8 41.5
Disposals (2.6) (0.1) (0.5) (1.1) (3.6) (28.5) (36.4)
Acquisitions
of businesses 1.2 – – 0.1 0.1 – 1.4
At 31 December 2003 69.2 13.4 11.5 4.8 56.2 450.7 605.8
Depreciation:
At 1 January 2003 9.1 7.2 5.9 4.8 48.4 285.5 360.9
Currency translation (0.2) – (0.5) 0.1 (0.2) (9.2) (10.0)
Charge for the year 2.5 0.1 1.0 0.5 7.5 42.3 53.9
Provision for 
impairments 0.1 0.1––– 0.3 0.5
Disposals (0.1) (0.1) (0.4) (0.9) (3.4) (27.0) (31.9)
At 31 December 2003 11.4 7.3 6.0 4.5 52.3 291.9 373.4
Net book value
At 31 December 2003 57.8 6.1 5.5 0.3 3.9 158.8 232.4
At 1 January 2003 62.8 6.2 6.6 0.5 2.4 179.9 258.4
The net book value at historical cost of freehold and long leasehold land
and buildings was £61.7m (2002: £66.7m). On a historic cost basis the
accumulated depreciation thereon would have been £82.3m (2002:
£80.0m). The Group’ s freehold and long leasehold land and buildings held
at valuation are on the basis of a valuation at Open Market Value carried out
as at 31 December 1997 by Healey & Baker, International Surveyors. There
were no assets held under finance leases (2002: £nil).
The fixed assets of the Company, which are predominantly fixtures and
fittings, at cost of £6.5m (2002: £4.4m) and aggregate depreciation of £4.3m
(2002: £3.8m) are included above. During the year additions at cost totalled
£2.1m, depreciation of £0.5m was charged and the net book value of
disposals was £nil.
At 31 December 2003 the Group had outstanding capital commitments
contracted but not provided for of £1.6m (2002: £1.4m). The Company 
had no outstanding capital commitments at 31 December 2003 (2002: £nil). 
969_34-45  18/3/04  1:01 pm  Page 36 37
Novar annual report 2003
Notes to the accounts continued
12 Investments
2002
As
restated
2003 (note 9)
Group: investment in joint venture £m £m
At 1 January 2003 4.8 1.0
Share of joint venture’ s loss before taxation (0.7) (1.2)
Acquisitions – 4.0
Loans advanced 2.1 1.3
Currency translation (0.5) (0.3)
At 31 December 2003 5.7 4.8
Group: investment in associated undertakings
At 1 January 2003 48.8 49.1
Share of associates’ profit before taxation 7.7 5.5
Share of associates’ taxation (1.9) (1.6)
Share of associates’ minority interest – (0.1)
Goodwill amortisation (1.1) (1.0)
Acquisitions – 7.3
Divestment – (1.9)
Deemed disposal – (0.5)
Dividend received (1.9) (1.6)
Currency translation (4.7) (6.4)
At 31 December 2003 46.9 48.8
Investment in joint venture and associated undertakings 52.6 53.6
Group: investment in joint venture and associated undertakings
Investment in joint venture
During the year £2.1m (2002: £1.3m) of further investment was made in
respect of an existing joint venture interest, by way of loans advanced.
The carrying value of investments in joint venture at 31 December 2003 of
£5.7m (2002: £4.8m) included share of gross assets of £2.3m (2002: £1.7m),
share of gross liabilities of £2.7m (2002: £1.5m), loans of £3.2m (2002: £1.3m)
and equity advances of £2.9m (2002: £3.3m).
Investment in associated undertakings
During the year expenditure of £4.2m was made in respect of deferred
consideration payable on the acquisition of an interest in an associated
undertaking in a previous year and for which provision was made in prior
years’ financial statements.
The carrying value of investments in associated undertakings at 
31 December 2003 of £46.9m (2002: £48.8m) included a net book 
value of capitalised goodwill of £18.0m (2002: £20.6m) and a share of net
assets of £28.9m (2002: £28.2m).
The Group’ s principal associate undertaking is Asia Aluminum Group Limited,
a company incorporated in the British Virgin Islands, and in which the Group
has a 25% interest.
In the prior year, investments included the Group’s investment in its own
shares held in an ESOP Trust. As explained in note 9, under UITF 38 this
investment is now deducted in arriving at shareholders’ funds, and prior
year comparatives restated accordingly.
Subsidiary 
undertakings
Company: investment in subsidiary ESOP Shares Loans T otal
undertakings and ESOP £m £m £m £m
At 1 January 2003 
(as previously reported) 39.0 786.3 1,301.0 2,126.3
Prior year adjustment (note 9) (39.0) – – (39.0)
At 1 January 2003 (as restated) – 786.3 1,301.0 2,087.3
Additions – 64.2 301.5 365.7
Disposals – (302.4) – (302.4)
Provided for – – (75.0) (75.0)
Currency translation – (2.6) (10.6) (13.2)
At 31 December 2003 – 545.5 1,516.9 2,062.4
Refer to note 29 for details of subsidiary undertakings.
The Directors’ valuation of the investments of the Company and the Group
is not less than their carrying value.
13 Stocks
2003 2002
Group Group
£m £m
Raw materials and consumables 42.8 36.1
Work in progress 13.7 12.7
Finished goods 50.3 45.5
106.8 94.3
The replacement cost of stock is not materially different from its book value.
The Company held no stocks at 31 December 2003 (2002: £nil). Certain
subsidiary undertakings have consignment stock and other similar
arrangements with suppliers in the ordinary course of business. Inventory
drawn from consignment stock is generally invoiced to the companies
concerned at the price ruling at the date of drawdown. The value of such stock
at cost, which has been excluded from the balance sheet in accordance with
the application notes included in FRS 5, amounted to £nil (2002: £3.3m).
14 Debtors
2002
Com-
pany
2003 As
2003 2002 Com- restated
Group Group pany (note 9)
£m £m £m £m
Amounts falling due within one year:
Trade debtors 185.4 171.2 – 0.3
Amounts owed by subsidiary undertakings – – 6.4 2.4
Amounts owed by associated undertakings – 0.5 – –
Other debtors 44.5 37.5 11.3 15.5
Prepayments and accrued income 14.1 23.4 0.8 0.7
Corporation tax – – 2.0 2.2
Deferred tax asset (note 19) 0.2 0.2 – –
244.2 232.8 20.5 21.1
Amounts falling due after more than one year:
Other debtors 12.0 9.7 5.2 3.5
Prepayments and accrued income 9.0 8.5 – –
21.0 18.2 5.2 3.5
15 Cash at bank and in hand
At 31 December 2003, the Group held cash balances of £59.7m (2002: £41.8m)
all of which were held in current accounts. The interest and currency profile
of these balances is set out in note 18.
16 Creditors – amounts falling due within one year
2003 2002
2003 2002 Com- Com-
Group Group pany pany
a) Borrowings £m £m £m £m
Bank borrowings and overdrafts 7.5 46.2 64.7 144.2
Loan notes 0.3 0.3 – –
Other loans 0.1 0.3 – –
7.9 46.8 64.7 144.2
The interest rate, currency and maturity profiles of borrowings are set out in
note 18.
2002
Group
As 2003 2002
2003 restated Com- Com-
Group (note 9) pany pany
b) Other creditors £m £m £m £m
Trade creditors 101.9 87.8 2.9 2.5
Amounts due to subsidiary undertakings – – 4.1 4.8
Amounts due to associated undertakings 0.8 0.6 – –
Interest payable 7.2 4.7 – 0.1
Corporation tax 43.6 42.1 – –
Other taxation and social security 6.4 6.6 1.0 0.6
Other creditors 61.3 55.9 4.2 5.7
Accruals and deferred income 29.5 31.8 11.4 10.2
Dividends proposed and accrued 27.9 27.8 27.9 27.8
278.6 257.3 51.5 51.7
969_34-45  18/3/04  1:01 pm  Page 37 Novar annual report 2003
Notes to the accounts continued 38
17 Creditors – amounts falling due after more than one year
2003 2002
2003 2002 Com- Com-
Group Group pany pany
a) Borrowings £m £m £m £m
Bank borrowings 84.0 1.4 83.6 –
Loan notes 217.9 208.4 – –
Other loans 0.2 – – –
Other loans repayable after five years 
– other than by installments 3.4 3.7 – –
305.5 213.5 83.6 –
The interest rate, currency and maturity profiles of borrowings are set out in
note 18.
2003 2002
2003 2002 Com- Com-
Group Group pany pany
b) Other creditors £m £m £m £m
Amounts due to subsidiary undertakings – – 1,173.6 1,152.7
Other creditors 6.8 5.0 3.5 –
Accruals and deferred income 13.0 19.4 12.8 12.2
19.8 24.4 1,189.9 1,164.9
18 Financial Instruments
A discussion of the Group’s objectives, policies and strategies with regard
to derivatives and other financial instruments can be found in the
paragraphs on Treasury policies and risk management in the Financial
review on pages 16 and 17. Except where noted, the disclosures below
include cash and deposits, borrowings and forward exchange contracts
entered into to hedge the net assets of foreign subsidiary undertakings
(“hedges”). The disclosures exclude other debtors and creditors as such
disclosures for short–term items are not required to be given by FRS 13 
and other items are not significant.
a) Interest rate and currency profile of financial assets
Included in the analysis below are cash balances held in current accounts
and term deposits and hedges. There are no fixed rate financial assets,
term deposits or hedges.
The currency profile of the Group’ s financial assets as at 31 December was:
2003 2002
Group Group
Currency profile: £m £m
US dollars 8.2 4.1
Canadian dollars 4.4 –
Euro 21.4 21.6
Sterling 9.7 1.4
Other 16.0 14.7
59.7 41.8
18 Financial Instruments continued
b) Interest rate and currency profile of financial liabilities
The currency and interest rate profile of the Group’ s financial liabilities as at 31 December 2003 was:
Forward Analysed as:
Floating Fixed foreign Effective Floating Fixed 2003 2002
rate rate exchange currency rate rate Non equity Group Group
borrowings borrowings contracts liabilities liabilities liabilities shares T otal T otal
£m £m £m £m £m £m £m £m £m
US dollars 3.4 217.9 105.3 326.6 159.0 167.6 – 326.6 351.9
Canadian dollars – – 48.8 48.8 48.8 – – 48.8 47.4
Euro 76.3 1.4 138.9 216.6 215.2 1.4 – 216.6 205.4
Sterling 14.1 – (293.0) (278.9) (278.9) – 127.3 (151.6) (197.7)
Other – 0.3 – 0.3 – 0.3 – 0.3 0.3
93.8 219.6 – 313.4 144.1 169.3 127.3 440.7
2002 49.5 210.8 – 260.3 71.2 189.1 147.0 407.3
The Group’ s borrowings at 31 December 2003 were principally US$ fixed rate liabilities, which were converted as shown above through interest rate and
currency swaps, and Euro and US$ floating rate liabilities. The fixed rate borrowings had a weighted average interest rate of 7.9% (2002: 8.3%).
c) Currency risk profile
The currency profile of the Group’ s net assets as at 31 December 2003 was:
2002
Operating T ax, dividends Forward Net
assets by and other foreign 2003 assets
currency of corporate Intangible exchange Net As restated
operations items assets Net debt contracts assets (note 9)
£m £m £m £m £m £m £m
US dollars 206.6 (27.5) 138.5 (213.1) (105.3) (0.8) 0.8
Canadian dollars 50.3 (5.1) 0.3 4.4 (48.8) 1.1 (4.8)
Euro 35.7 (6.1) 130.3 (56.3) (138.9) (35.3) 2.5
Sterling 95.4 (97.8) 28.3 (4.4) 293.0 314.5 411.2
Other 12.4 1.2 – 15.7 – 29.3 33.7
400.4 (135.3) 297.4 (253.7) – 308.8
2002 (as restated) 427.0 (148.0) 382.9 (218.5) – 443.4
The above borrowings and forward foreign exchange contracts hedge the appropriate overseas investments and, as permitted under SSAP 20, exchange
differences arising on revaluation to the balance sheet exchange rates are taken to reserves.
The Group has no significant currency exposures generating foreign exchange gains or losses that would be recognised in the profit and loss account.
969_34-45  18/3/04  1:01 pm  Page 38 39
Novar annual report 2003
Notes to the accounts continued
18 Financial Instruments continued
d) Transactional hedge accounting
The gains and losses on forward foreign exchange contracts used for
hedging transactional currency exposures are not recognised until the
exposure that is being hedged is itself recognised. The Group’s
unrecognised gains and losses and deferred gains and losses on financial
instruments used for transactional hedging at 31 December 2003 were:
Gains Losses T otal
£m £m £m
Gains and losses arising in previous years, 
recognised in 2003 – (1.1) (1.1)
Gains and losses unrecognised 
at 31 December 2003 0.2 (3.2) (3.0)
of which:
Gains and losses expected to be recognised 
in the profit and loss account in 2004 0.2 (3.2) (3.0)
The gains and losses on forward metal contracts used for hedging metal
stock holdings are not recognised until the exposure that is being hedged
is itself recognised. The Group’s unrecognised gains and losses and
deferred gains and losses on financial instruments used for metals hedging
at 31 December 2003 were as follows:
Gains Losses T otal
£m £m £m
Gains and losses arising in previous years, 
recognised in 2003 0.5 (1.3) (0.8)
Gains and losses unrecognised 
at 31 December 2003 1.8 (0.2) 1.6
of which:
Gains and losses expected to be recognised 
in the profit and loss account in 2004 1.8 (0.2) 1.6
e) Maturity of financial liabilities
The maturity profile of the Group’s financial liabilities (excluding short term
creditors other than bank loans) at 31 December 2003 was as follows:
Bank
US$ loans Other Non- 2003 2002
senior & over- borro- equity Group Group
notes drafts wings shares T otal T otal
£m £m £m £m £m £m
Less than one year – 7.5 0.4 – 7.9 46.8
Between one 
and two years – 0.4 0.1 127.3 127.8 1.3
Between two 
and five years 122.9 83.6 0.1 – 206.6 231.3
After five years 95.0 – 3.4 – 98.4 127.9
217.9 91.5 4.0 127.3 440.7
2002 208.1 47.6 4.6 147.0 407.3
The $335m senior notes issued in July 2000 are divided into three tranches
of $135m, $85m and $115m. The tranches bear interest at fixed rates of 8.23%,
8.28% and 8.35% and are repayable in 2007, 2008 and 2010 respectively.
The $55m senior notes issued in September 2003 are divided into three
tranches of $25m, $26m and $4m. The tranches bear interest at fixed rates of
5.58%, 5.90% and 6.05% and are repayable in 2011, 2013 and 2015 respectively .
The weighted average maturity of the senior notes is 5.5 years.
f) Borrowing facilities
At 31 December 2003 the Group had undrawn committed borrowing
facilities available to it, in respect of which all conditions precedent had
been met, as follows:
2003 2002
£m £m
Expiring within one year – 153.2
Expiring between one and two years – 15.0
Expiring between two and five years 106.4 30.0
106.4 198.2
18 Financial Instruments continued
g) Fair value of financial instruments
Fair value is defined as the amount at which a financial instrument could be
exchanged in an arm’s length transaction between informed and willing
parties and is calculated by reference to prevailing market rates. 
As at 31 December 2003 the only financial instruments where there 
were significant differences between the book value and the fair value
comprised currency and interest rate contracts, fixed rate senior notes and
non equity shares. The fair value of these financial instruments compared to
their book value is set out below.
The senior notes are not publicly traded. The fair value attributed to them
below is an estimate of their value assuming a private transaction between
willing parties at a date close to 31 December 2003.
2003 2002 2003 2002
Book Book Fair Fair
value value value value
£m £m £m £m
Foreign currency swaps and forward 
contracts held to manage interest 
rate and currency risk 3.0 5.4 3.4 6.6
Commodity contracts – – 1.6 (0.8)
Foreign currency forward contracts 
held to hedge transactional 
currency exposure – – (2.6) (1.1)
Non equity shares (127.3) (147.0) (131.3) (142.6)
US$ senior notes (217.9) (208.1) (246.3) (236.1)
19 Provisions for liabilities and charges
Defer-
Pensions red Defer-
and similar consid- Restruc- red Prop-
Group obligations eration turing tax erty Other T otal
(as restated) £m £m £m £m £m £m £m
At 1 January 2003 (as 
previously reported) 45.4 7.5 9.6 18.0 2.0 18.7 101.2
Prior year adjustment 
(note 9) ––––– (4.6) (4.6)
At 1 January 2003 
(as restated) 45.4 7.5 9.6 18.0 2.0 14.1 96.6
Reclassification (0.1) – – – 0.4 (0.9) (0.6)
Currency translation 1.9 (0.8) (0.1) (1.5) – 0.5 –
Acquisitions – deferred 
consideration (net) – (0.6) –––– (0.6)
Acquisitions – other ––––– 0.1 0.1
Charge to profit and 
loss account 17.3 – 19.6 4.0 0.5 1.6 43.0
Released to profit and 
loss account ––––– (1.0) (1.0)
Utilised in year: cash (8.4) (4.5) (23.9) – (0.1) (5.4) (42.3)
Non cash movements – – (1.2) – – (0.5) (1.7)
At 31 December 2003 56.1 1.6 4.0 20.5 2.8 8.5 93.5
Pensions and similar obligations largely represent SSAP 24 accruals in
respect of funded pension schemes in the United Kingdom, unfunded
liabilities on pension schemes in Europe and post retirement benefits in
respect of US based retirement schemes. The Group’ s pension arrangements
are fully described in note 22.
Deferred consideration payable as at 31 December 2003 has arisen on
acquisitions made in 2003, and represents the estimate of the future
consideration payable should certain performance targets be met. The
provision at 31 December 2003 is expected to be utilised by the end of 2005.
Restructuring provisions relate to committed costs in respect of the Group’ s
restructuring projects, and the provision at 31 December 2003 is expected
to be utilised by the end of 2004.
969_34-45  18/3/04  1:01 pm  Page 39 Novar annual report 2003
Notes to the accounts continued 40
19 Provisions for liabilities and charges continued
The elements of the provided deferred tax assets (included within debtors)
and the deferred tax liability shown above, are set out below:
2003 2002
Deferred tax £m £m
Deferred tax asset
– Accelerated capital allowances (0.4) 1.0
– Other timing differences 0.2 (1.2)
(0.2) (0.2)
Deferred tax liability
– Accelerated capital allowances 16.4 17.5
– Other timing differences 4.1 0.5
20.5 18.0
No provision has been made for deferred tax in respect of any future
disposals of upward revalued properties as the Directors do not envisage
a significant crystallisation of any such liability in the foreseeable future.
Deferred tax has not been provided in respect of the earnings retained
overseas by subsidiary undertakings because it is not currently intended to
make a distribution which will give rise to a tax charge.
The Group provides for deferred tax assets if it is more likely than not that
they will reverse in the future.
Some of the Group’s operations have generated tax losses in 2003 and
earlier periods. A deferred tax asset has not been recognised in respect of
losses where their future utilisation in the short term is uncertain. The value
of the deferred tax asset not recognised is £42.1m (2002: £31.3m).
No provision has been made for deferred tax assets of £1.3m (2002: £2.0m)
in respect of accelerated capital allowances and £20.8m (2002: £9.3m) in
respect of other short term timing differences as recoverability in the short
term in the relevant jurisdiction is uncertain.
Property provisions principally relate to lease rentals in respect of vacant
property .
Other provisions principally relate to warranties, legal claims, environmental
liabilities and other onerous contracts; the expected timing of the use of
these provisions is currently uncertain.
Company
The provision for liabilities and charges is in respect of restructuring. During
the year restructuring costs amounted to £1.8m and cash costs of £2.2m
were incurred against the provision.
There is no provided deferred taxation in respect of the Company (2002: £nil).
20 Share Capital
2003 2002
Allotted, Allotted,
called up called up
2003 and fully 2002 and fully
a) Nominal 
Authorised paid Authorised paid
value of shares ££ ££
Equity shares – 
Ordinary shares 
of 27
7
⁄9p each 217,000,000 119,709,713 217,000,000 119,588,944
Non equity shares – 
7.25p Convertible 
Cumulative Redeemable
Preference shares of 
16
2
⁄3p each 27,000,000 21,044,596 27,000,000 24,285,852
Non equity shares – 
“B” shares of 
£1 each 180,000,000 297,506 180,000,000 387,319
20 Share Capital continued
Rights of 7.25p Convertible Cumulative Redeemable Preference shares
(“Preference shares”)
Each holder of the Preference shares is entitled to convert into Novar plc
Ordinary shares of 27
7
⁄9 p each at the rate of 42.553 Ordinary shares for every
100 Preference shares (and a conversion price of 235p per Ordinary share)
in June in any year to 2005, or otherwise to redeem the Preference shares
in 2005 at the price of £1 per share. 
No voting rights attach to these shares unless at the date of a general
meeting the dividend thereon is six months or more in arrears, or the
business of that meeting includes a resolution for the winding up of the
Company, the appointment of an administrator, approval of a voluntary
arrangement, capital reduction or the purchase of any Ordinary shares or
any resolution directly or indirectly adversely affecting the rights or
privileges attached to those shares. The holders of these shares have the
right to be paid a fixed cumulative preference dividend at the rate of 7.25p
net per share per annum on a half-yearly basis in equal amounts.
The Preference shareholders have no further rights to participate in the
profits of the Company except that in the case of a winding up the
Company’s surplus assets, after payment of its liabilities, shall be applied,
firstly, to pay Preference shareholders any arrears of dividend; secondly, to
repay to the Preference shareholders the capital and a premium amounting
to a total of £1 per share; thirdly, to repay the capital paid up on Ordinary
shares; and fourthly, to distribute rateably amongst Preference and
Ordinary shareholders (each Preference share being treated as if converted
into fully paid Ordinary shares for this purpose). The Company shall redeem
all outstanding Preference shares on 31 August 2005 and the amount
payable shall be £1 per share, together with any arrears of dividend. The
above is a summary of the Preference shareholders’ rights. The full details
are contained in the Company’ s Articles of Association.
Rights of “B” shares
No voting rights attach to “B” shares of £1 each unless the business of the
meeting includes the consideration of a resolution for the winding up of the
Company. On a return of capital on a winding up the holders of “B” shares
shall be entitled, subject to the preferential rights of the Preference shares
of 16
2
⁄3p, but in priority to any payment to holders of any other class of
shares, to the repayment of the nominal capital paid up on the “B” shares.
Unless redeemed earlier , outstanding “B” shares may be redeemed by the
Company at their nominal value of £1 each on 20 May 2027. The Company
may at any time declare a Redemption Period. Under certain circumstances
the “B” shares may be converted into Ordinary shares of the Company . The
above is a summary of the rights of “B” shares. The full details are
contained in the Company’ s Articles of Association.
Ordinary Preference
shares of shares of “B” shares
b) Securities issued 27
7
/ 9p each 16
2
/ 3p each of £1 each
during the year Number Number Number
At 1 January 2003 430,520,199 145,714,131 387,319
Exercise of savings 
related share options 421,170 – –
Conversion of Preference Shares 13,597 (31,954) –
Purchase of Preference Shares – (19,414,600) –
Redemption of “B” Shares – – (89,813)
At 31 December 2003 430,954,966 126,267,577 297,506
969_34-45  18/3/04  1:01 pm  Page 40 41
Novar annual report 2003
Notes to the accounts continued
20 Share Capital continued
c) Executive Share Option Schemes
At 31 December 2003, 36,296,277 Ordinary shares, being part of the
authorised share capital, were subject to options under the Novar plc
Executive Share Option Scheme and the Novar plc 1996 Executive Share
Option Scheme, as follows:
Exercise
Number price
Date of grant of shares Pence
6 May 1994 159,853 341.0
30 September 1994 118,323 280.0
19 April 1995 410,869 256.3
15 April 1996 592,102 221.3
15 April 1997 693,153 249.0
14 November 1997 989,011 182.0
15 April 1998 521,176 190.0
15 April 1998 2,546,847 212.0–222.0
16 March 1999 2,854,618 136.0
10 August 1999 2,368,244 187.0–200.0
6 December 1999 144,606 187.0–200.0
14 March 2000 3,615,700 124.0
11 April 2000 94,037 143.0
17 May 2000 257,234 155.5
4 September 2000 157,657 178.0
16 March 2001 4,217,604 167.0
11 September 2001 73,176 143.0
13 March 2002 5,878,520 151.0
12 March 2003 10,429,698 101.0
9 September 2003 173,849 129.0
Shares vesting under options granted since 15 April 1997 are to be sourced
out of the Novar Employee T rust. At 31 December 2003 the T rust held a total
of 19,156,963 shares. 
The options are normally exercisable between three and ten years after 
the options were granted. The weighted average exercise price is 147.4p.
d) Savings Related Share Option Schemes
At 31 December 2003, 4,307,070 Ordinary shares, being part of the
authorised share capital, were subject to options under the Novar plc
Savings Related Share Option Scheme and the Novar plc 1999 Savings
Related Share Option Scheme, as follows:
Exercise
Number price
Date of grant of shares Pence
12 May 1997 5,062 246.5
13 May 1998 48,666 151.6
18 June 1999 512,459 108.8
12 April 2000 708,346 99.2
11 April 2001 443,787 136.4
9 April 2002 422,324 124.8
8 April 2003 2,166,426 84.8
The options are normally exercisable up to six months after maturity of the
three, five or seven-year SAYE contracts.
The weighted average exercise price is 100.2p.
21 Reserves
Equity Profit
shares and loss
held in Capital account T otal
Share treasury redem- Reval- As As
premium – ESOP ption uation restated restated
account reserve reserve reserve (note 9) (note 9)
a) Group £m £m £m £m £m £m
At 1 January 2003 
(as previously reported) 12.0 – 26.6 2.3 291.7 332.6
Prior year adjustment 
(note 9) – (39.0) – – 4.1 (34.9)
At 1 January 2003 
(as restated) 12.0 (39.0) 26.6 2.3 295.8 297.7
Net currency translation –––– (2.7) (2.7)
Share issues 0.3 2.5 – – (0.9) 1.9
Redemption of “B” shares – – 0.1 – (0.1) –
Purchase of own 
non equity shares – – 3.3 – (19.4) (16.1)
Decrease of charge for cost 
of employee share awards–––– (1.8) (1.8)
T ransfer – – – (0.1) 0.1 –
Retained loss for the year –––– (112.2) (112.2)
At 31 December 2003 12.3 (36.5) 30.0 2.2 158.8 166.8
The ESOP reserve represents 20,690,433 Ordinary shares of the Company
and comprises 19,156,963 shares held by the Novar Employee Trust and
1,533,470 shares held by the Novar Performance Partnership Plan Share
Trust for the benefit of the Company and its subsidiaries, under the Novar
plc 1996 Executive Share Option Scheme and the Novar plc Performance
Partnership Plan respectively. The dividend rights in respect of these shares
have been waived. The costs of the T rusts are charged to the profit and loss
account as they accrue. The market value of the shares at 31 December
2003 was £28.6m (2002: £24.0m).
At 31 December 2003, the cumulative amount of goodwill written off to
reserves amounted to £437.2m (2002: £437.2m).
Equity Profit
shares and loss
held in Capital account T otal
Share treasury redem- As As
premium – ESOP ption Other restated restated
account reserve reserve reserves (note 9) (note 9)
b) Company £m £m £m £m £m £m
At 1 January 2003 
(as previously reported) 12.0 – 26.6 178.5 429.0 646.1
Prior year adjustment 
(note 9) – (39.0) – – (0.5) (39.5)
At 1 January 2003
(as restated) 12.0 (39.0) 26.6 178.5 428.5 606.6
Share issues 0.3 2.5 – – (0.9) 1.9
Redemption of “B” shares – – 0.1 – (0.1) –
Purchase of own 
non equity shares – – 3.3 – (19.4) (16.1)
Retained loss for the year –––– (33.2) (33.2)
At 31 December 2003 12.3 (36.5) 30.0 178.5 374.9 559.2
A separate profit and loss account for the Company has not been presented
as permitted by Section 230 of the Companies Act 1985. The Company’s
loss for the financial year before dividends receivable and payable was
£117.6m (2002: £34.3m loss).
969_34-45  18/3/04  1:01 pm  Page 41 Novar annual report 2003
Notes to the accounts continued 42
22 Retirement benefits
a) SSAP 24
In the UK, the Group participates in a number of defined benefit pension
plans. The assets are held in separate trustee administered funds. Overseas
subsidiary undertakings participate in a variety of defined benefit and
defined contribution pension plans.
The total pension and other post-retirement benefit costs charged in 
the year ended 31 December 2003 were £25.7m (2002: £13.3m). The charge
in the UK was £14.9m (2002: £4.1m), and the balance was in respect of
overseas arrangements.
As at 31 December 2003 the Group held the following assets and liabilities
in respect of pensions and other post-retirement benefits:
2003 2002
£m £m
Debtors – amounts falling due after more 
than one year 10.7 8.7
Creditors – amounts falling due within one year (1.5) (1.8)
Provisions for liabilities and charges (56.1) (45.4)
(46.9) (38.5)
The Group’s pension cost for 2003 has been based on updated actuarial
advice based on the position as at 31 December 2002. The most significant
actuarial assumptions used for the principal UK and overseas pension plans
were as follows:
UK USA Canada Europe
%pa %pa %pa %pa
Long-term investment return
– pre-retirement 6.50 6.75 6.75 5.76
– post-retirement 5.50 6.75 6.75 5.76
Increase in pensionable pay 3.25 4.67 5.00 3.01
Increase in pensions in payment 2.25 – – 2.01
United Kingdom
The UK pension costs relating to defined benefit pension plans has been
determined in accordance with the advice of professionally qualified
independent consulting actuaries using the projected unit method. The
assets and liabilities of the pension plans are reviewed on a triennial basis
by the actuaries for funding purposes. The principal UK actuarial valuations
were carried out as at 31 March 2003. At 31 March 2003, the combined
market value of the UK pension plan assets was £351.8m. The actuarially
smoothed value of assets was £457m. The value of the smoothed assets
represented approximately 82% of the value of the benefits that had
accrued to pensioners, deferred pensioners and members based on past
service and allowing for future increases in earnings where appropriate. 
The increase in the deficit in the UK pension plans since the last valuation
is due to recent investment performance being lower than expected, and
a significant increase in liabilities driven by changes in actuarial assumptions.
The market values as at 31 December 2003 of the assets of the UK pension
plans are set out in the FRS 17 disclosures below.
The total charge for the UK defined benefit pension plans for 2003 was
£14.3m (2002: £3.7m).
The Group has a number of other minor post-retirement benefit
obligations in the UK, and the charge for the year in respect of these
obligations was £0.6m (2002: £0.4m).
Overseas
Overseas, the Group operates pension plans in several countries, 
with the most significant being in the USA, Canada and Germany.
The Group has defined benefit and defined contribution plans in the USA
and Canada. Defined benefit pension and other post-retirement obligations
are valued by independent actuaries using the projected unit method.
The latest actuarial reviews of the USA defined benefit pension plans 
were carried out for the purpose of calculating pension costs in 2003. 
The results of those valuations showed that the combined market value 
of the US defined benefit pension plan assets was approximately £34m at 
22 Retirement benefits continued
31 December 2002. This represents approximately 54% of the value of
benefits that had accrued to pensioners, deferred pensioners and active
members based on past service and allowing for future increases in
earnings where appropriate. The total charge for the US defined benefit
pension plans for 2003 was £1.4m (2002: £1.5m). The market values as at 
31 December 2003 of the assets of the US defined benefit plans are set 
out in the FRS 17 disclosures below.
In Canada, the Group has defined benefit pension plans. The latest
actuarial reviews were carried out for the purpose of calculating pension
costs in 2003. The results of those valuations showed that the combined
market value of the Canadian defined benefit pension plan assets was
£14m at 31 December 2002. This represents approximately 80% of the
value of benefits that had accrued to pensioners, deferred pensioners and
active members based on past service and allowing for future increases in
earnings where appropriate. The total charge for the Canadian pension
plans for 2003 was £0.9m (2002: £0.1m credit). The market values as at 
31 December 2003 of the assets of the Canadian defined benefit plans 
are set out in the FRS 17 disclosures below.
The Group operates a number of defined contribution plans in North
America. Members of these plans can make voluntary contributions which
are matched or partially matched by the Group. The Group does not have
the ability to recover the assets held by the plans, nor can it be required to
make additional payments to the plans over and above the contributions
referred to above. Custodial responsibility for the assets rests with
independent investment managers. The charge for these plans for 2003
was £5.1m (2002: £4.7m).
The Group also has exposure to a post-retirement benefit plan in the USA.
The charge for this arrangement in the year was £0.4m (2002: £0.3m).
The most significant defined benefit pension plan in Europe is in respect of
Ackermann. Ackermann operates a now closed unfunded defined benefit
plan, the pension obligations of which have been valued by independent
actuaries using the projected unit method. The latest actuarial review of 
the plan was carried out as at 31 December 2002 for the purpose of
estimating the pension cost in 2003. The results of this valuation showed
the value of benefits accrued to pensioners, deferred pensioners and active
members based on past service and allowing for future increases in earnings
to be approximately £26.5m. The charge in the year was £2.3m (2002: £2.2m).
In addition to those described above the Group operated a number of
other pension schemes. The total net charge for these schemes in the year
was £0.7m (2002: £0.6m). 
Given recent investment performance, it is likely that the Group’s pension
costs charged to the profit and loss account in accordance with SSAP 24 will
increase in 2004.
b) FRS 17 disclosures
In November 2000 the Accounting Standards Board issued FRS 17
‘Retirement benefits’. Under FRS 17, certain disclosures in respect of
defined benefit schemes are required in the transition period, before it is
fully effective, and these further disclosures are included below.
The valuation used for FRS 17 disclosures has been based on the most
recent actuarial valuations performed by qualified independent actuaries.
These were carried out as at 31 March 2003 and have been updated to 
take account of the requirements of FRS 17 in order to assess the liabilities
of the schemes at 31 December 2003.
969_34-45  18/3/04  1:01 pm  Page 42 43
Novar annual report 2003
Notes to the accounts continued
22 Retirement benefits continued
The major assumptions used in determining the FRS 17 disclosures are as
follows:
Current year: 2003
2003 North 2003
UK America Europe
Valuation method Pro- Pro- Pro-
jected jected jected
Unit Unit Unit
%pa %pa %pa
Discount rate 5.40 6.06 5.28
Inflation rate 2.80 2.50 1.78
Increase to deferred 
benefits during deferment 2.80 – –
Increase in pensions in payment 2.70 3.11 1.78
Salary increases 3.80 1.07 2.77
Prior years: 2002 2001
2002 North 2002 2001 North 2001
UK America Europe UK America Europe
Valuation method Pro- Pro- Pro- Pro- Pro- Pro-
jected jected jected jected jected jected
Unit Unit Unit Unit Unit Unit
%pa %pa %pa %pa %pa %pa
Discount rate 5.50 6.75 5.75 5.80 7.40 6.00
Inflation rate 2.25 3.10 2.00 2.50 4.40 2.25
Increase to deferred 
benefits during deferment 2.25 – – 2.50 – –
Increase in pensions in 
payment 2.25 – 2.00 2.50 – 2.25
Salary increases 3.25 4.94 3.00 4.00 4.80 3.00
On full compliance with FRS 17, on the basis of the above assumptions, the
amounts that would have been charged to the consolidated profit and loss
account and consolidated statement of total recognised gains and losses
for the year ended 31 December 2003 are set out below:
North 2003 2002
Total charge to operating UK America Europe Group Group
(loss)/profit £m £m £m £m £m
Current service cost (7.9) (1.4) (0.8) (10.1) (11.8)
Past service cost – (0.1) – (0.1) (0.8)
Curtailment gain – 6.2 – 6.2 –
T otal (charge)/credit 
to operating (loss)/profit (7.9) 4.7 (0.8) (4.0) (12.6)
Net interest
Expected return on scheme assets 24.9 3.4 0.1 28.4 37.6
Interest on plan liabilities (29.2) (5.8) (1.7) (36.7) (34.2)
Net (charge)/credit to net interest (4.3) (2.4) (1.6) (8.3) 3.4
(Charge)/credit before taxation (12.2) 2.3 (2.4) (12.3) (9.2)
Consolidated statement of total recognised gains and losses
Actual return less expected 
return on scheme assets 42.4 7.7 – 50.1 (150.5)
Experience gains and losses 
arising on the scheme liabilities (32.9) (1.1) 0.2 (33.8) 2.5
Changes in assumptions 
underlying the present value of 
the scheme liabilities (78.1) (6.1) (1.2) (85.4) (10.2)
Actuarial (loss)/gain recognisable 
in consolidated statement of 
total recognised gains and losses (68.6) 0.5 (1.0) (69.1) (158.2)
22 Retirement benefits continued
North 2003 2002
UK America Europe Group Group
%%%%%
Difference between the expected 
and actual return on scheme assets 
expressed as a percentage of the 
scheme assets 10.5 13.9 – 10.9 (35.9)
Experience gains and losses on 
scheme liabilities expressed as a 
percentage of the 
scheme liabilities (5.3) (1.3) 0.6 (4.6) 0.4
T otal amount recognised in 
statement of total recognised 
gains and losses expressed as 
a percentage of the 
scheme liabilities (11.1) 0.6 (3.1) (9.4) (25.4)
The assets in the schemes and the expected rates of return at 31 December
2003 were:
Long term rate of return Market value of scheme assets
North North 2003
UK America Europe UK America Europe Group
%pa %pa %pa £m £m £m £m
Equities 7.8 7.9 – 334.7 43.6 – 378.3
Bonds 4.8 5.9 – 64.0 9.9 – 73.9
Other 4.3 4.0 7.0 6.1 1.9 1.2 9.2
T otal schemes 404.8 55.4 1.2 461.4
Present value of scheme liabilities (615.5) (86.0) (32.5) (734.0)
FRS 17 net pension liability (210.7) (30.6) (31.3) (272.6)
Related deferred tax asset – 10.7 0.1 10.8
Net pension liability after 
related deferred tax asset (210.7) (19.9) (31.2) (261.8)
The assets in the schemes and the expected rates of return at 31 December
2002 were:
Long term rate of return Market value of scheme assets
North North 2002
UK America Europe UK America Europe Group
%pa %pa %pa £m £m £m £m
Equities 7.5 9.1 n/a 303.2 36.7 n/a 339.9
Bonds 4.5 5.0 n/a 63.6 10.0 n/a 73.6
Other 4.0 3.1 n/a 4.0 1.7 n/a 5.7
T otal schemes 370.8 48.4 n/a 419.2
Present value of scheme liabilities (509.1) (87.5) (26.5) (623.1)
FRS 17 net pension liability (138.3) (39.1) (26.5) (203.9)
Related deferred tax asset – 13.3 2.6 15.9
Net pension liability after 
related deferred tax asset (138.3) (25.8) (23.9) (188.0)
969_34-45  18/3/04  1:01 pm  Page 43 Novar annual report 2003
Notes to the accounts continued 44
22 Retirement benefits continued
The assets in the schemes and the expected rates of return at 31 December
2001 were:
Long term rate of return Market value of scheme assets
North North 2001
UK America Europe UK America Europe Group
%pa %pa %pa £m £m £m £m
Equities 7.3 10.1 n/a 384.1 51.7 n/a 435.8
Bonds 5.5 6.5 n/a 54.2 9.6 n/a 63.8
Other 4.0 4.0 n/a 13.6 7.0 n/a 20.6
T otal schemes 451.9 68.3 n/a 520.2
Present value of scheme liabilities (456.9) (80.8) (23.9) (561.6)
Deficit in the schemes (5.0) (12.5) (23.9) (41.4)
Unrecoverable surplus (0.4) – – (0.4)
FRS 17 net pension liability (5.4) (12.5) (23.9) (41.8)
Related deferred tax asset 1.7 4.6 2.7 9.0
Net pension liability after 
related deferred tax asset (3.7) (7.9) (21.2) (32.8)
The movement in the FRS 17 deficit since 1 January 2002 is as follows:
North
UK America Europe T otal
£m £m £m £m
Deficit in schemes at 1 January 2002 (5.0) (12.5) (23.9) (41.4)
Current service cost (8.1) (3.0) (0.7) (11.8)
Past service cost – (0.8) – (0.8)
Cash contributions 1.9 0.5 0.8 3.2
Other finance income/(expense) 5.0 (0.1) (1.5) 3.4
Actuarial (loss)/gain (132.1) (26.6) 0.5 (158.2)
Exchange adjustments – 3.4 (1.7) 1.7
Deficit in schemes at 31 December 2002 (138.3) (39.1) (26.5) (203.9)
Current service cost (7.9) (1.4) (0.8) (10.1)
Past service cost – (0.1) – (0.1)
Curtailment gain – 6.2 – 6.2
Cash contributions 8.4 3.0 1.1 12.5
Other finance expense (4.3) (2.4) (1.6) (8.3)
Actuarial (loss)/gain (68.6) 0.5 (1.0) (69.1)
Exchange adjustments – 2.7 (2.5) 0.2
Deficit in schemes at 31 December 2003 (210.7) (30.6) (31.3) (272.6)
The movement in the FRS 17 deficit in 2003 is principally due to the actuarial
loss, the elements of which are detailed in the Consolidated statement of
total recognised gains and losses table on page 43. This shows that whilst
asset returns have exceeded the expected return in the year, this has been
more than offset by the increase in the scheme liabilities. The liability increase
is due to updated actuarial assumptions mainly concerning increased
inflation rates and extended life expectancy in the mortality assumptions.
2002
As
2003 restated
Net assets £m £m
Net assets 308.8 443.4
Exclude existing SSAP 24 pension liability 
(net of deferred tax) 46.5 35.0
355.3 478.4
FRS 17 net pension liability (net of deferred tax) (261.8) (188.0)
Net assets including FRS 17 
pension liability (net of deferred tax) 93.5 290.4
2002
As
2003 restated
Reserves £m £m
Shareholders’ funds 307.8 442.0
Exclude existing SSAP 24 pension liability 
(net of deferred tax) 46.5 35.0
354.3 477.0
FRS 17 net pension liability (net of deferred tax) (261.8) (188.0)
Shareholders’ funds including FRS 17 
pension liability (net of deferred tax) 92.5 289.0
23 Contingent liabilities
2003 2002
2003 2002 Com- Com-
Group Group pany pany
£m £m £m £m
Guarantees 7.7 3.5 – –
There are a small number of legal claims that are outstanding against the
Group in its ordinary course of business. Where appropriate, provisions
have been made in the accounts in respect of these claims. None of these
claims is expected to result in a significant impact on the Group.
24 Annual commitments under operating leases
2003 2003 2002 2002
Plant & Land & Plant & Land & 
mach- build- mach- build-
inery ings inery ings
Group £m £m £m £m
Leases expiring
– Within one year 3.9 2.0 1.6 1.9
– Between one and five years 6.2 4.2 9.3 4.2
– After more than five years 0.2 4.7 2.6 5.0
10.3 10.9 13.5 11.1
25 Consolidated cash flow statement
2002
As
a) Reconciliation of operating 2003 restated
(loss)/profit to operating cash flow £m £m
Operating (loss)/profit (30.4) 75.7
Depreciation of fixed assets 53.9 56.6
Amortisation and impairment of goodwill 116.9 22.1
140.4 154.4
(Increase)/decrease in stocks (13.0) 1.5
Increase in debtors (19.0) (16.9)
Increase/(decrease) in creditors 23.3 (19.5)
Other movements (0.8) 0.1
Net cash inflow from operating activities
– continuing operations 130.9 119.6
2003 2002
b) Returns on investments and servicing of finance £m £m
Non equity dividends (9.8) (10.6)
Interest received 0.9 0.6
Interest paid (18.9) (17.0)
Settlement of forward foreign exchange contracts 6.9 22.8
Dividends paid to minority interests – (0.1)
Proceeds from close out of currency and interest 
rate swaps – 23.0
(20.9) 18.7
2003 2002
c) Net increase/(decrease) in debt £m £m
Debt due within one year (39.3) 39.5
Debt due after more than one year 113.7 (86.0)
74.4 (46.5)
Move-
ment Ex- At
At in cash change 31 Dec-
1 January and move- ember
2003 debt ment 2003
d) Analysis of net debt £m £m £m £m
Cash at bank and in hand 41.8 19.2 (1.3) 59.7
Overdrafts (3.4) 3.4 – –
38.4 22.6 (1.3) 59.7
Debt due within one year (43.4) 39.3 (3.8) (7.9)
Debt due after one year (213.5) (113.7) 21.7 (305.5)
(256.9) (74.4) 17.9 (313.4)
Net debt (218.5) (51.8) 16.6 (253.7)
969_34-45  18/3/04  1:01 pm  Page 44 45
Novar annual report 2003
Notes to the accounts continued
26 Acquisitions
Fair value of
Consideration (assets)/liabilities
and costs acquired Goodwill
£m £m £m
Acquisitions in the year 43.4 (5.5) 37.9
Adjustments to prior year 
acquisitions (2.0) (0.5) (2.5)
T otal 41.4 (6.0) 35.4
Of the consideration and costs of £43.4m in respect of current year
acquisitions, £1.6m is deferred and payable in future periods. In addition to
the consideration above, expenditure of £0.3m was made in the year in
respect of acquisitions made in earlier years and for which provision was
made in prior years’ financial statements.
During the year ended 31 December 2003 the acquisitions contributed
turnover of £12.5m and operating profit of £2.1m, which included goodwill
amortisation of £1.4m, to Intelligent Building Systems. The contribution to
cash flow from operating activities was a £5.4m inflow, and capital expenditure
was £0.1m. The impact on other cash flow headings was not material.
The adjustments to prior year acquisitions represents £0.2m in respect of
additional costs, £2.2m in respect of a downward revision to the estimated
deferred consideration payable and a £0.5m increase in the fair value of net
assets acquired.
Acquisitions in the year
On 3 March 2003 the Group completed the acquisition of the business and
assets of the USbased Alerton Technologies Inc. for an initial cash
consideration, including costs, of £39.0m with a further £0.6m of deferred
consideration. In addition cash acquired was £1.5m. The provisional
capitalised goodwill on this acquisition is £34.5m and this is being
amortised in the profit and loss account over 20 years.
26 Acquisitions continued
On 14 January 2003, as permitted under the original purchase agreement,
the Group purchased the remaining 49% of the share capital of the German
company Novar Projects GmbH (formerly Jans Sicherheitssysteme GmbH)
for an initial cash consideration, including costs, of £2.0m with up to a
further £1.0m of deferred consideration. The provisional capitalised
goodwill on this acquisition is £2.6m and this is being amortised in the profit
and loss account over 20 years.
Expenditure on other acquisitions in the year amounted to £0.8m.
The total book value of the net assets of the acquisitions in the year which
included £1.5m of cash, amounted to £5.6m. After downward fair value
adjustments of £0.1m in respect of accounting policy alignments, the
provisional fair value to the Group of the acquired assets was £5.5m.
27 Foreign currencies
2003 2002
Profit 2003 Profit 2002
and loss Balance and loss Balance
account Sheet account Sheet
Average Closing Average Closing 
rates rates rates rates
US dollar 1.64 1.79 1.50 1.61
Canadian dollar 2.30 2.31 2.36 2.54
Euro 1.45 1.42 1.59 1.53
28 Related party transactions
During the year the Group made purchases of £5.8m (2002: £4.5m) from
its associated undertaking, Asia Aluminum Group. The amount due to Asia
Aluminum Group at 31 December 2003 was £0.8m (2002: £0.6m).
The amount due from other associated undertakings was £nil (2002: £0.5m).
29 Principal subsidiary undertakings
The following is a list of the principal subsidiary undertakings in the Group each of which is wholly owned. None of the investments were held directly by
the Company. All subsidiary undertakings listed are included in the Group accounts.
Country of
incorporation
Name Activity and operation
Intelligent Building Systems
Manufacturing and sourcing of: 
Novar ED&S Limited (formerly MK Electric Limited) Electric and electronic connection equipment systems England
Friedland Limited Door entry sound signalling equipment, timers and lighting controls England
Novar GmbH (formerly Esser-effeff alarm GmbH) Fire detection, fire alarm and intruder alarm equipment Germany
Gent Limited Fire detection, fire alarm and emergency lighting equipment England
Novar Projects Limited Project consultancy and management services England
Eltek Fire and Safety AS Emergency lighting and fire alarms Norway
Trend Control Systems Limited Building controls systems England
Novar Controls Corporation
††
Building management systems USA
Alerton Inc.
††
Building controls systems USA
Brand–Rex Limited Data cable and accessories England
Indalex Aluminum Solutions
Indalex*/** Extrusion, finishing and fabrication of aluminium products USA/Canada
Mideast Aluminum* Extrusion, finishing and fabrication of aluminium products USA
Indal T echnologies Inc.
†
Manufacture of precision engineering parts and systems Canada
Indalloy** Aluminium recycling and billet casting Canada
Security Printing Services
Clarke American Checks, Inc.
††
Cheque printing and other financial services USA
Checks in the Mail, Inc.
††
Cheque printing and other financial services USA
* division of Indalex America Inc. and subsidiary of Novar Holdco Inc. (the principal US holding company)
** division of Indalex Limited and subsidiary of Indalex Limited (Canada), (the principal Canadian holding company and formerly named Novar Investments (Canada) Inc.)
† subsidiary of Indalex Limited (Canada), (the principal Canadian holding company and formerly named Novar Investments (Canada) Inc.)
†† subsidiary of Novar Holdco Inc. (the principal US holding company)
969_34-45  18/3/04  1:01 pm  Page 45 Novar annual report 2003
Financial summary 46
Financial summary
Profit and loss accounts
2002 2001 2000 1999
2003 As restated As restated As restated As restated
for the year ended 31 December £m £m £m £m £m
Turnover
Continuing operations 1,430.6 1,448.2 1,469.4 1,408.4 914.2
Discontinued operations – – 12.7 336.1 518.4
1,430.6 1,448.2 1,482.1 1,744.5 1,432.6
Group operating profit before goodwill amortisation and exceptional items
Continuing operations
– before restructuring and goodwill amortisation 106.1 117.7 118.8 163.9 118.7
– restructuring (19.6) (18.4) (48.1) (20.7) (7.7)
86.5 99.3 70.7 143.2 111.0
Share of operating profits of joint ventures and associated undertakings 
before goodwill amortisation 7.7 5.4 4.3 0.8 1.2
T otal operating profit before goodwill amortisation and exceptional items
– continuing operations 94.2 104.7 75.0 144.0 112.2
Net interest (8.2) (10.0) (16.5) (26.0) (7.8)
86.0 94.7 58.5 118.0 104.4
T otal operating profit before goodwill amortisation and exceptional items 
– discontinued operations – – (6.0) 36.5 29.4
Profit before goodwill amortisation and exceptional items 86.0 94.7 52.5 154.5 133.8
Goodwill amortisation (25.0) (23.1) (22.3) (15.9) (2.4)
Profit before exceptional items 61.0 71.6 30.2 138.6 131.4
Exceptional items (95.0) 2.2 (35.1) 48.9 (104.8)
(Loss)/profit on ordinary activities before taxation (34.0) 73.8 (4.9) 187.5 26.6
T axation on (loss)/profit on ordinary activities (29.2) (34.6) (26.2) (53.5) (46.8)
T axation on exceptional items 1.2 (0.3) 0.6 – 7.3
(Loss)/profit on ordinary activities after taxation (62.0) 38.9 (30.5) 134.0 (12.9)
(Loss)/earnings per Ordinary share (basic)
Before goodwill amortisation and exceptional items 11.2 p 11.9p 3.6 p 20.3p 17.0p
After goodwill amortisation and exceptional items (17.9)p 6.7p (9.6)p 27.7p (5.3)p
Balance sheets
2002 2001 2000 1999
2003 As restated As restated As restated As restated
at 31 December £m £m £m £m £m
Intangible assets 297.4 382.9 400.9 362.9 117.3
T angible assets 232.4 258.4 302.7 318.8 351.7
Investments 52.6 53.6 50.1 1.7 2.5
Working capital 93.4 88.0 87.3 72.7 47.4
Net cash/(debt) 51.8 (5.0) 44.3 119.1 (19.3)
T otal assets less current liabilities 727.6 777.9 885.3 875.2 499.6
Creditors due after more than one year
– Bank and other loans (305.5) (213.5) (316.9) (228.3) (70.1)
– Other creditors (19.8) (24.4) (5.7) (2.5) (3.8)
– Provision for liabilities and charges (93.5) (96.6) (101.8) (58.3) (58.2)
Net assets 308.8 443.4 460.9 586.1 367.5
Goodwill written off 437.2 437.2 437.2 439.6 571.0
Note
The prior year comparatives have been restated for UITF 38 and UITF 17 (revised).
969_46-48  18/3/04  1:02 pm  Page 46 47
Novar annual report 2003
Notice of Annual General Meeting
Notice of Annual General Meeting
The Annual General Meeting of Novar plc will be held at The
Conference Centre, Church House, Dean's Yard, Westminster,
London SW1P 3NZ on Tuesday, 18 May 2004 at 12.00 noon for the
following purposes:
1. T o receive the Report of the Directors and the audited accounts
for the year ended 31 December 2003.
2. To approve the Report to shareholders on Directors’
Remuneration for the year ended 31 December 2003.
3. To declare a final dividend for the year ended 31 December
2003 to be paid on 4 June 2004.
4. T o reappoint as Directors:
(i) Mr D A Dayan (iv) Mr S L Howard
(ii) Mr H D Nilsson (v) Mr O H J Stocken
(iii) Mr B J Hintz (vi) Sir Geoffrey Whalen
5. To reappoint Deloitte & Touche LLP as auditors of the
Company to hold office until the conclusion of the next
General Meeting at which accounts are laid before the
Company and to authorise the Directors to determine the
remuneration of the auditors.
As special business, to consider and, if thought fit, pass the
following resolutions:
6. As an Ordinary Resolution
THA T , subject to and in accordance with Article 19 of the Company’ s
Articles of Association, the Directors be generally and unconditionally
authorised pursuant to Section 80 of the Companies Act 1985 to
allot relevant securities up to an aggregate nominal amount of
£39,505,270 and that all previous authorities conferred upon the
Directors to allot relevant securities of the Company are hereby
revoked and shall henceforth cease to have effect.
7. As a Special Resolution
THAT, subject to and in accordance with Article 20 of the
Company’ s Articles of Association, the Directors be empowered to
allot equity securities (within the meaning of the Companies Act
1985) for cash as if Section 89(1) of the Companies Act 1985 did not
apply to such allotment and that for the purposes of the limitation
of the said power referred to in paragraph (d) of Article 20 the
nominal amount therein mentioned shall be £5,985,645 provided
that this power shall expire at the conclusion of the next Annual
General Meeting of the Company and shall take effect in
substitution for and to the exclusion of all such existing authorities.
8. As a Special Resolution
THAT, subject to the approval at the Class Meeting of the holders
of the 7.25p Convertible Cumulative Redeemable Preference
shares of 16
2
⁄3p each in the Company to be held on 18 May 2004 
(or at any adjournment thereof) of the Extraordinary Resolution 
No. 1 set out in the notice of that meeting dated 25 March 2004,
the Company be and is hereby generally and unconditionally
authorised to make market purchases (within the meaning of
Section 163(3) of the Companies Act 1985) of Ordinary shares of
27
7
⁄9p each (“Ordinary shares”), provided that:
(i) the maximum number of Ordinary shares hereby authorised to
be acquired is 43,096,650, having an aggregate nominal value
of £11,971,290 and representing approximately 10% of the
Company’ s issued Ordinary share capital as at 25 February 2004;
(ii) the maximum price which may be paid for any Ordinary share
is an amount equal to 105% of the average of the middle
market quotations for such an Ordinary share as derived from
the London Stock Exchange’s Daily Official list for the five
business days immediately preceding the day on which the
share is contracted to be purchased and the minimum price
which may be paid for any such Ordinary share is the nominal
value of that share; and
(iii) the authority hereby conferred shall expire at the conclusion of
the Company’ s next Annual General Meeting, but a contract of
purchase may be made before such expiry which will or may be
executed wholly or partly thereafter, and a purchase of shares
may be made in pursuance of any such contract.
9. As a Special Resolution
THAT, subject to the approval at the Class Meeting of the holders
of the 7.25p Convertible Cumulative Redeemable Preference
shares of 16
2
⁄3p each in the Company to be held on 18 May 2004 (or
at any adjournment thereof) of the Extraordinary Resolution No. 2
set out in the notice of that meeting dated 25 March 2004, the
Company be and is hereby generally and unconditionally
authorised to make market purchases (within the meaning of
Section 163(3) of the Companies Act 1985) of Preference shares
provided that:
(i) the maximum number of Preference shares hereby authorised
to be acquired is 18,825,000, having an aggregate nominal value
of £3,137,500 and representing approximately 14.9% of the
Company’ s issued Preference share capital as at 25 February 2004;
(ii) the maximum price which may be paid for any Preference share
is an amount equal to 105% of the average of the middle
market quotations for such a Preference share as derived from
the London Stock Exchange’s Daily Official list for the ten
business days immediately preceding the day on which the
share is contracted to be purchased and the minimum price
which may be paid for any such Preference share is the nominal
value of that share; and
(iii) the authority hereby conferred shall expire at the conclusion of
the Company’ s next Annual General Meeting, but a contract of
purchase may be made before such expiry which will or may be
executed wholly or partly thereafter, and a purchase of shares
may be made in pursuance of any such contract.
By order of the Board Registered Office:
K Richardson Novar House
Group Company Secretary 24 Queens Road
25 March 2004 Weybridge
Surrey KT13 9UX
Notes
1 Copies of the Directors’ service contracts (other than those expiring within one year
or determinable within one year without payment of compensation) with the
Company and copies of the Company’s Articles of Association will be available for
inspection from the date of this notice until 18 May 2004 at the Company’ s registered
office and at the Annual General Meeting from 11.45am until the conclusion of the
meeting.
2 Copies of the terms and conditions of appointment of the non-executive Directors
are available for inspection during normal business hours at the Company’s
registered office and at the Annual General Meeting from 11.45 a.m. until the
conclusion of the meeting.
3 A member entitled to attend and vote at the meeting may appoint one or more
proxies to attend and, on a poll, to vote in his/her place. A proxy need not be a
member of the Company. A proxy form is enclosed. Instructions for use are shown
on the form. To be effective, proxy forms must be returned to the Company’s
Registrars, Computershare Investor Services PLC, PO Box 82, The Pavilions,
Bridgwater Road, Bristol, BS99 7NH not less than 48 hours before the time for
holding the meeting.
4 Holders of 7.25p Convertible Cumulative Redeemable Preference shares are
welcome to attend the Annual General Meeting but are reminded that under the
Articles of Association of the Company they are not entitled to vote at the meeting
in relation to any item other than Resolution No. 8.
5 Shareholders (and any proxies or representatives they appoint) agree, by attending
the meeting, that they are expressly requesting and that they are willing to receive
any communications (including communications relating to the Company’s
securities) made at the meeting.
969_46-48  18/3/04  1:02 pm  Page 47 Novar annual report 2003
Notice of Class Meeting 48
Notice of Class Meeting
Notice of Class Meeting
Notice is hereby given that a separate Meeting of the holders of
7.25p Convertible Cumulative Redeemable Preference shares of
16
2
⁄3p each in the Company will be held on Tuesday, 18 May 2004
at The Conference Centre, Church House, Dean's Y ard, Westminster ,
London SW1P 3NZ at 12.15pm, or as soon thereafter as the Annual
General Meeting of the Company convened for the same place to
commence at 12.00 noon on the same day shall have been
concluded or adjourned, to consider and, if thought fit, pass the
following resolutions as Extraordinary Resolutions:
Extraordinary Resolution No. 1
THAT, in accordance with Article 10 of the Company’s Articles of
Association, the holders of 7.25p Convertible Cumulative
Redeemable Preference shares of 16
2
⁄3p each in the Company 
(the “Preference Shares”) consent to the passing of the Special
Resolution numbered 8 set out in the Notice of Annual General
Meeting of the Company dated 25 March 2004 (a copy of which is
produced to this meeting and has, for the purpose of
identification, been initialled by the Chairman) and to every
modification and/or abrogation of, affecting or dealing with the
rights and privileges attached to the Preference Shares as is or may
be involved therein or effected thereby or by any of the
transactions contemplated thereby.
Extraordinary Resolution No. 2
THAT, in accordance with Article 10 of the Company’s Articles of
Association, the holders of 7.25p Convertible Cumulative
Redeemable Preference shares of 16
2
⁄3p each in the Company 
(the “Preference Shares”) consent to the passing of the Special
Resolution numbered 9 set out in the Notice of Annual General
Meeting of the Company dated 25 March 2004 (a copy of which is
produced to this meeting and has, for the purpose of
identification, been initialled by the Chairman) and to every
modification and/or abrogation of, affecting or dealing with the
rights and privileges attached to the Preference Shares as is or may
be involved therein or effected thereby or by any of the
transactions contemplated thereby.
By order of the Board Registered Office:
K Richardson Novar House
Group Company Secretary 24 Queens Road
25 March 2004 Weybridge
Surrey KT13 9UX
Notes
1 A member entitled to attend and vote at the meeting may appoint one or more
proxies to attend and, on a poll, vote in his/her place. A proxy need not be a
member of the Company. A proxy form is enclosed. Instructions for use are
shown on the form. To be effective, proxy forms must be returned to the
Company’s Registrars, Computershare Investor Services PLC, PO Box 82, The
Pavilions, Bridgwater Road, Bristol BS99 7NH not less than 48 hours before the
time for holding the meeting.
2 Shareholders (and any proxies or representatives they appoint) agree, by
attending the meeting, that they are expressly requesting and that they are
willing to receive any communications (including communications relating to the
Company’ s securities) made at the meeting.
Venue of Annual General Meeting and Class Meeting
969_46-48  18/3/04  1:02 pm  Page 48  Intelligent Building Systems
Contents
01 Highlights
02 Chairman’s statement
04 Group Chief Executive’s review
06 Intelligent Building Systems
08 Indalex Aluminum Solutions
10 Security Printing Services
12 Operating review
15 Financial review
18 The Board
Register online
You can receive our Annual Report online
by email. Register through
www.novar.com, select the 
‘Investors’ section, click on 
‘Electronic Communications’ 
and then follow the instructions.
North America’ s second
largest supplier of 
extruded aluminium
components and
services. The company
serves many industry
sectors including 
building and
construction, consumer
durables, electrical 
and cable, machinery
and equipment, 
transportation and
distribution, and
automotive.
Clarke American 
and Direct Marketing
Solutions provide
cheques and 
cheque-related
products, contact 
centre services 
and direct response
marketing solutions 
to more than 4,000 US
financial institutions.
Supplier of products
and services to 
the construction
industry and building
operators worldwide.
The strength of 
the business lies 
in its global reach, 
and its leading 
and comprehensive 
product portfolio 
of building
management, control
and electrical and 
data solutions.
19 Report of the Directors
23 Corporate Social Responsibility
24 Report to shareholders 
on Directors’ remuneration
28 Independent auditors’ report
29 2003 results
47 Notice of Annual General Meeting
48 Notice of Class Meeting
49 Shareholder information
                                                          Novar at a glance
Novar’ s global presence
 Indalex Aluminum Solutions  Security Printing Services
      49
Novar annual report 2003
Shareholder information
Shareholder information
Dividends 
Ordinary shares
Final (if approved) payment date 4 June 2004 
Interim announcement 27 July 2004 
Cumulative Preference shares
Payment dates 1 June 2004 and 
1 December 2004 
“B” shares
Payment dates 20 May 2004 and 
22 November 2004 
Novar Nominee Service
This service is available to shareholders who wish to hold and deal
in Novar Ordinary shares through the CREST settlement system.
For details shareholders should contact the Registrars.
Dividend Reinvestment Plan
A dividend reinvestment plan is available to Ordinary shareholders
which allows their cash dividend to be reinvested in the Company’ s
shares. Details of the Plan are available from the Registrars.
Low Cost Dealing Facility
A low cost dealing facility in the Company’s Ordinary shares is
available for all shareholders from the Company’s stockbrokers,
Cazenove & Co. Ltd., telephone 020 7588 2828.
Electronic shareholder communication
All shareholders can now receive future shareholder communi-
cations (e.g. Annual Report, Notice of AGM and forms of Proxy) via
the Internet. Shareholders wishing to register for this service should
log on to the company website, www.novar.com, select the
“Investors” section, click on “Electronic Communications” and then
follow the instruction for registration of their details. Shareholders
will also need their shareholder reference number which can be
found on the dividend counterfoil or share certificate.
By registering for the online service shareholders will be able to:
• access information on their shareholdings (shares held, recent
share transactions, dividends etc.);
• appoint a proxy to vote on their behalf by following details on
the forms of proxy in respect of each general meeting; and
• obtain a valuation of their shareholdings and a range of other
related information.
UK Tax on Capital Gains
For Capital Gains T ax purposes, the market prices of Novar shares
on 19 May 1997, the first day of dealing following the capital
reorganisation in May 1997, were as follows:
Ordinary shares of 27
7
⁄9p 217.5 pence per share
“B” shares of £1 97.5 pence per share
Preference shares of 16
2
⁄3p 113.5 pence per share
Registered Office
Novar House
24 Queens Road
Weybridge
Surrey KT13 9UX
Registered in England
Company number 2262172
Registrars
Computershare Investor Services PLC
PO Box 82
The Pavilions
Bridgwater Road
Bristol
BS99 7NH
Advisers
Auditors
Deloitte & T ouche LLP
London 
Solicitors
Freshfields Bruckhaus Deringer
65 Fleet Street
London EC4Y 1HS 
Stockbrokers
Cazenove & Co. Ltd.
20 Moorgate
London EC2R 6DA
Analyses of ordinary shareholdings
Shareholders Shares
at 31 December 2003 Number % Number (m) %
By range of holdings:
1 – 2,000 10,963 72.7 7.6 1.8
2,001 – 4,000 2,106 14.0 6.0 1.4
4,001 – 20,000 1,547 10.2 11.7 2.7
20,001 – 40,000 141 0.9 4.1 0.9
40,001 – 100,000 121 0.8 7.6 1.8
100,001 – 200,000 53 0.4 7.6 1.8
200,001 – 400,000 42 0.3 12.4 2.9
400,001 – 1,000,000 47 0.3 28.8 6.7
1,000,001 – 2,000,000 30 0.2 43.3 10.0
2,000,001 and above 36 0.2 301.9 70.0
15,086 100.0 431.0 100.0
By category:
Private Individuals 13,253 87.9 23.2 5.4
Investment and Pension Trusts 34 0.2 1.1 0.3
Pension Funds, Investment 
Banks and Nominees 1,635 10.8 397.9 92.3
Insurance Companies 15 0.1 3.9 0.9
Other Corporate Bodies 149 1.0 4.9 1.1
15,086 100.0 431.0 100.0
969_IFC_IBC  18/3/04  2:30 pm  Page 1 Novar plc
Novar House
24 Queens Road
Weybridge
Surrey KT13 9UX
England
Telephone: +44 (0) 1932 850 850
Fax: +44 (0) 1932 823 328
Website: www.novar.com
Annual report 
and accounts 2003
Novar plc Annual Report and Accounts 2003
969_FC_BC  18/3/04  3:48 pm  Page 1