Novar plc Annual Report and Accounts 2002
Annual report and accounts 2002
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
7632_Covers_SP_21_03  24/03/2003  3:35 pm  Page 1 Contents
1 Highlights
2 Chairman’s statement
4 Group Chief Executive’s review
6 Intelligent Building Systems
8 Indalex Aluminum Solutions
10 Security Printing Services
12 Operating review
15 Financial review
18 The Board
19 Report of the Directors
22 Corporate Social Responsibility
23 Report to shareholders 
on Directors’ remuneration
27 Independent auditors’ report
28 2002 results
46 Notice of Annual General Meeting
47 Notice of Class Meeting
48 Shareholder information
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7632_Covers_SP_21_03  24/03/2003  3:35 pm  Page 2 01 Novar annual report 2002
Highlights
Intelligent Building Systems
Indalex Aluminum Solutions
Security Printing Services
Solid profit and cash performance
• Market share gains in all three sectors
• Headline pre tax profits recovered to £94m
• Headline EPS increased from 3.4p to 11.6p
• Full year dividend maintained
• Group free cash flow again strong at £55m,
covering dividend 1.4 times
See notes at foot of page 
Notes:
1. Headline pre tax profit referred to above is calculated from Group profit before tax of £72.7m adjusted for
exceptional items of £2.2m profit and goodwill amortisation of £23.1m.
2. Headline EPS is earnings per share before goodwill amortisation and post tax exceptional items.
3. Free cash flow is defined as operating cash flow of £119.6m less capital expenditure of £41.7m, net interest
of £16.4m, taxation of £15.4m and preference dividends of £10.6m, plus dividend received from associated
undertaking of £1.6m and proceeds of fixed asset disposals of £17.8m.
North America’ s second largest supplier of extruded aluminum components and services. The company
serves the building and construction, information technology, machinery and equipment, consumer durables,
transportation, electrical, automotive and other industry sectors.
Clarke American provides cheques and cheque-related products, contact centre services and direct
employee response marketing solutions to more than 4,000 U.S. financial institutions.
Supplier of products and services to the world-wide construction industry. The strength of the business lies
in its global reach and its comprehensive product portfolio of electrical and data management solutions. 02 Novar annual report 2002
Chairman’s statement Novar’ s results in 2002 support the decisive action taken
since the significant downturn of some of our markets last
year . The Group not only undertook a major restructuring
programme over the last 18 months, but also raised
investment in new products and commercial initiatives.
As a result, good operating progress was made across the
Group. Market share increases compensated for lower
markets overall, sustaining turnover , improving operating
profit, and producing a welcome recovery of headline 
pre-tax profits and earnings per share. And another year
of excellent cash generation, underpins our proposal to
maintain Novar’ s dividend.
Group turnover was stable at £1,448m in difficult markets,
while operating profit before restructuring at £117m was
up 2% on a like for like basis. Headline earnings per share
increased to 11.6p. The balance sheet has been further
strengthened with net debt reducing from £273m to £219m,
year end gearing of 46% and interest costs covered 10 times.
The development of the Group has continued in 2002.
Investment in new products and marketing initiatives
reached new highs. In Intelligent Building Systems we
strengthened the technology base in CCTV , and dedicated
resources to take on large projects that span multiple
businesses. We expect this to continue to drive our market
shares in the years ahead.
The acquisition of Alerton, announced separately on
26 February 2003, will further expand our portfolio of
Building Control brands, provide valuable technology , and
expand our routes to market in North America. It is a quality
business that offers excellent returns and future prospects.
In some of the toughest markets seen for many years, Novar
is performing well. That we have delivered the results we
have, owes much to the efforts of our employees, who
remain committed to the Group’ s continued progress.
I thank them on behalf of my colleagues.
The Board is recommending an unchanged final dividend
of 6.6p per Ordinary share, payable on 6 June 2003 to all
shareholders on the register at the close of business on
2 May 2003. 
Sir Graham Hearne
Chairman
03 Novar annual report 2002
The development of the 
Group has continued in 2002.
Investment in new products and
marketing initiatives reached
new highs. We expect this to
continue to drive our market
shares in the years ahead. 04 Novar annual report 2002
Group Chief Executive‘s review
Our businesses continue to recover in response to the
actions we have been taking. New products and
commercial initiatives are improving our share in markets
that remain generally soft. Costs are coming down, but we
continue to invest to enhance our competitiveness when
market demand returns to more normal levels.
Our Intelligent Building Systems (IBS) businesses have been
able to compensate for the contraction we have seen in all
but one of our markets. Our Security and Controls business
introduced new products and launched new initiatives in
our market channels, building further market share on the
strength of these actions. Electrical Accessories had a strong
year with the introduction of a new range of DIY security
products. Datacoms markets continue to be depressed and
are at their lowest levels for many years. In response, we
have adjusted our cost base to these market demand levels.
Our capability in IBS has been strengthened with the
acquisition of VisiOprime providing state of the art digital
CCTV technology . T ogether with our existing access control
product suite, this CCTV capability allows us to provide
enhanced security solutions to our customers. All IBS
products can now also be offered through Novar Projects,
launched this year in several markets, to enable us to meet
the wider needs of larger projects. This allows us to
leverage the strengths of our existing customer and installer
relationships across the sector . 
Indalex (IAS) began to recover in 2002. Volumes grew 9%
in flat markets. The business continued to invest in safety
across the plant network as well as improving the quality ,
cost and delivery of our products. Indalex has started to
benefit from North American sales of product sourced from
Asia Aluminum, our strategic partner and leader in the
buoyant Chinese extrusions market. In 2002 we received
our first dividend from this investment. We also supported
Asia Aluminum in the acquisition of two plants in China. 
Security Printing Services (SPS) produced another solid
performance. Owing to the now discontinued disposal
process, a number of restructuring actions were delayed.
They are now well under way , but the timing of this action
impacted second half profits, which were also affected by
set up costs for new business wins, along with increased
investment in new plant and call centre capacity . We
continue to invest in improving the SPS cost base, opening
two new high capacity plants, closing two smaller plants in
2002, with a further four plants to close in 2003. SPS has
continued to generate significant cash flows for the Group.
Across the Group, our concentration on cash generation
has again produced free cash flows above £50m. Our
balance sheet remains sound.
Our businesses continue to
recover in response to the 
actions we have been taking.
Costs are coming down, but 
we continue to invest to 
enhance our competitiveness. 05 Novar annual report 2002
Outlook
Novar is, of course, affected by what happens to the
economies in which we trade. Current uncertainties make
forecasting even more difficult than usual. We are also
facing the prospect of continued weakness in the US
dollar impacting reported results and further increases
in pension costs.
Our response will be to drive for increased market shares
in all three sectors and to continue our cost cutting
programme. This, when taken together with the
improvement already achieved should allow us to
compensate for any adverse pension and currency effects.
We will also continue to invest in new product and
commercial initiatives, and position Novar for strong growth
when economic activity returns to more normal levels.
Jurgen Hintz
Group Chief Executive 06 Novar annual report 2002
Intelligent Building Systems
Hong Kong covered
  
Whether it’s a complex hazard warning system or building
management controller, Novar Intelligent Business Systems
connects Hong Kong’s commercial hub. The financial district
includes some of the world’s most awe-inspiring buildings, 
in one of the world’s most memorable skylines.
Cheung Kong Center
  Bank of China
   Citibank Plaza
   Hutchison
House
  Bank of America
T ower
   HSBC 
Headquarters
 Standard Chartered
Bank Headquarters
  Mandarin Oriental 
Hotel
 Nine 
Queens Road
 Jardine
House
   From the Bank of America Tower
to The Center, Novar brands –
MK Electric, Ackermann, Ega,
Trend and Brand-Rex – work
together to supply and maintain
Hong Kong’s finest buildings.
MK Electric supplied and installed
circuit protection, wiring devices,
cable management and datacoms
to the The Bank of China, while
other Novar brands have also
been active in this major project.
For example, Brand-Rex installed
the building’s cabling solution
and Ackermann provided office
power and data distribution. 
For The Landmark building,
cross-project solutions involved
MK Electric, Ackermann and
Trend Controls Systems whose
input included providing controls
to monitor heating, ventilation
and other building services. 
With these and other projects,
Novar has Hong Kong covered.  07 Novar annual report 2002
The Landmark
   International Finance Center
  
Exchange Square
   Hang Seng Bank
Headquarters
   The Center
  The product portfolio includes electrical devices, data
systems, structured cabling solutions, as well as high
technology solutions for fire detection and alarm, access
control, energy management and environmental controls,
building management controls and CCTV offerings.
Customer focus, range, reach and innovation are the
hallmarks of the Intelligent Building Systems business.
Intelligent Building Systems
Novar’ s Intelligent Building Systems companies supply
products and services to the world-wide construction industry .
Employing some 6,000 people, this sector has outlets for
sales and added value services in over 30 countries from 
North America through Europe and the Middle East to
India, S.E. Asia and China. In many of these countries
Novar has plants and/or development centres driving
for innovation and customer satisfaction. 
The strength of the business lies both in its global reach
and also in its range of solutions for diverse customers
including building contractors, private finance initiatives,
owner/occupiers of commercial, public, retail and
industrial premises, commercial landlords and facilities
management companies. 08 Novar annual report 2002
Indalex Aluminum Solutions
Indalex Aluminum Solutions
Indalex Aluminum Solutions is North America’ s second
largest supplier of extruded aluminum components and
services. The company serves the building and construction,
information technology, machinery and equipment,
consumer durables, transportation, electrical, automotive
and other industry sectors.
The company has almost four million square feet of
manufacturing space at 16 extrusion plants in the United
States of America and Canada. It offers customers more
than 40 extrusion presses in a wide range of sizes, a variety
of fabrication capabilities, 11 electrostatic paint lines and
five anodizing lines including some of the largest
capabilities in North America.
Indalex International focuses on developing import and
export opportunities and coordinates international supply
arrangements with Asia Aluminum Group, Indalex’ s
associate in The People’ s Republic of China. Indalex Metals
operates Indalloy aluminum casting plants in the United
States and Canada.
John Daly had an idea for a redesigned gravity rung lock. A
matter of hours later Indalex's design engineering team at their
T oronto, Ontario plant had his new part designed right before
his eyes... and with his active participation...
visualising virtually 09 Novar annual report 2002
John Daly (one of Indalex’s
customers) had an idea for a
redesigned gravity rung lock.
A matter of hours later Indalex’s
design engineering team at their
T oronto, Ontario plant had his new
part designed right before his
eyes... and with his active
participation…
John Daly had never met the
Indalex design engineer. He
didn’t have to travel the 510 miles
that separate his New Haven
plant and the Indalex facility. He
didn’t have to deal with time-
consuming back and forth design
changes. He simply turned on his
computer , accessed his Internet
connection, dialled the Indalex
telephone number and watched
as the idea in his head was
transformed into a precisely
designed rung lock that would
become a common part for his
company’s aluminum and
fibreglass extension ladders.  10 Novar annual report 2002
fast track cheques
Security Printing Services
Headquartered in San Antonio, T exas, USA, Clarke
American provides cheques and cheque-related products,
contact centre services and direct response marketing
solutions to more than 4,000 U.S. financial institutions. The
company operates a national network of 12 electronically
linked production facilities and 5 customer service centres
throughout the United States enabling partners and
customers to place orders any time using various channels
such as Internet, telephone, and fax. Direct Response
Marketing capabilities add value to the chequing
programme by offering unique ways for financial
institutions to market directly to the customer based on
their specific product needs. Clarke American’ s investment
in technology has led to significant reductions in cycle
time, error and waste reduction, quality enhancements,
and increased customer satisfaction.
Clarke American’ s performance is based on its investment
in technology, customer-focused business strategy, and
commitment to continuous process improvement. Clarke
American is a recipient of the 2001 Malcolm Baldrige
National Quality Award given by the U.S. Department
of Commerce.
Clarke American’s new Internet solution, ConnectionPoint
TM
,
offers their financial institution partners a dynamic, simplified
cheque ordering application that enables convenient online
ordering for cheques and cheque-related products within
the financial institution branches.
Security Printing Services 11 Novar annual report 2002
ConnectionPoint
™
, one of Clarke
American’s newest advancements
in technology, enables branch
associates to enter product
orders while using an interactive
catalogue and viewing the
account holder’s cheque image as
it is being created. The innovative
branch ordering solution uses
online technology to offer point-
and-click navigation, drop-down
menus, user help features, price
display, and more. Clarke
American partners also have
the opportunity to co-brand the
online ordering site with their
own company logo and colours.
Charles Korbell, President and
CEO, Security Printing Services
says, “This is a great example of
Clarke American’s commitment
to our partners by providing
innovative products and services.
Our goal is continually to delight
our partners and their account
holders by simplifying the
ordering experience with
enhanced online solutions.” 12 Novar annual report 2002
Group Results – continuing operations
2002 vs 2001
1998 1999 2000 2001 £ millions 2002 Reported
2
Like for Like
1
4 yr CAGR
738 914 1,408 1,469 Sales 1,448 -1% -1% +18%
Operating
96 118 162 118 117 -1% +2% +5%
Profit
128 155 210 174 EBITDA 173 -1% +3% +8%
(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 2001 and 2002 acquisitions, at constant exchange rates.
(2) Group operating profit and EBITDA are before exceptional operating costs of £2m
(2001: £nil), restructuring charges of £18m (2001: £48m) and goodwill amortisation 
of £22m (2001: £21m).
Group Sales from continuing operations of £1,448m were 
1% below last year. They include an incremental £34m from
2001 and 2002 acquisitions and a £40m adverse impact from
currency translation movements. Excluding these items, like
for like sales fell by 1% across the Group with weak volumes in
datacoms markets offsetting stronger volumes elsewhere in
Intelligent Building Systems and by volume growth in Indalex.
Group Operating Profit for continuing operations was £117m,
1% lower than the prior year. This includes a £4m adverse
currency translation movement. The incremental impact of 2001
and 2002 acquisitions was not material. Like for like, profits rose
by 2% principally reflecting the beginnings of solid recovery at
Indalex through volume improvement and a reduced cost base
and second half growth in IBS helping to offset reductions in SPS. 
These results are after a £6m increase in pension charges 
for the year under SSAP 24. T otal pension costs charged in 
the year for both defined benefit and defined contribution
schemes, amounted to £13m (2001: £7m), of which £4m 
(2001: £nil) related to UK defined benefit schemes. T otal cash
contributions for all schemes in the year were £9m (2001: £8m).
Under FRS17 the Group deficit on all defined benefit plans at
the balance sheet date was £188m (2001: £33m) after set off 
of deferred taxation. This deficit is primarily due to the decrease
in asset values over 2002 and has no immediate impact on 
the funding requirements of the Group schemes, which will 
be determined for UK schemes at the next triennial valuation
at March 2003 and for other schemes at their annual valuation.
We anticipate these valuations will increase charges under
SSAP24 by potentially as much as £18m and that further
funding contributions will be likely from the second half of
2003. The Group does not currently intend to adopt FRS17
ahead of mandatory implementation.
The Group continued to invest in its businesses over the period.
£42m (2001: £65m) was invested in capital, plant and equipment
in the year. It is the aim of the Group that capex will be
equivalent to depreciation over the medium term. Restructuring
charge at £18m (2001: £48m) returned to the more normal levels
of 1% to 1.5% of turnover , reflecting the continued commitment
to a reduced cost base and enhanced competitiveness.
Net trading cash flow from continuing operations (before cash
restructuring costs of £24.5m (2001: £26.9m)) was £102m 
(2001: £118m), representing a cash conversion of 87%. 
Net debt reduced by £54m over 2001 to £219m. Interest 
costs were covered by Operating Profits 10.4 times, net debt
to EBITDA was 1.4 times and Group gearing was 46%.
Intelligent Building Systems
2002 vs 2001
1998 1999 2000 2001 £ millions 2002 Reported Like for Like 4 yr CAGR
294 314 465 576 Sales 568 -2% -8% +18%
Operating
34 42 62 48 37 -23% -22% +2%
Profit
51 59 81 70 EBITDA 58 -17% -17% +3%
Note: Reported sales and profits exclude results for activities that were discontinued in
2001.
Throughout the year, the markets for Intelligent Building
Systems (IBS) have remained soft. In this environment, IBS
continued to focus on gaining market share, delivering the
anticipated restructuring benefits and generating cash. The
business grew or held share in key markets through continued
investment in new products and commercial capability. 
Across IBS there was intense activity to deliver restructuring
programmes providing an enhanced competitive cost base 
as we move into 2003. T wo UK Datacoms factories were
closed in the year and total net headcount was reduced by
approximately 640 or 9%. This activity has supported the
progressive improvement in sector profitability through the year .
Operating review 13 Novar annual report 2002
IBS – Security and Control Systems*
2002 vs 2001
1998 1999 2000 2001 £ millions 2002 Reported Like for Like 4 yr CAGR
143 164 214 253 Sales 262 +3% +1% +16%
Operating
20 23 35 40 35 -11% -10% +15%
Profit
25 29 41 46 EBITDA 42 -9% -9% +13%
* Indicative analysis
Faced with a downturn in the German construction market
and delays in US national retail store opening programmes,
Security and Controls Systems was able to deliver sales 
growth of 1%. This growth was achieved through gains in
market share and sales of new and enhanced products. 
In Germany volumes in fire grew with the market while
intruder alarm volumes declined less than the market. The UK
fire business was strongly ahead gaining further market share
in relatively flat markets. 
Control Systems revenues declined slightly, but stayed 
ahead of the market, gaining share. They were impacted by 
a number of project deferrals in the UK and delays to US 
retail chains retrofit programmes and new store openings.
Successes in US national accounts, and international markets
together with increased sales of controls peripherals helped
to offset some of the shortfall. 
Operating profit declined as we chose to invest in new product
development and new commercial capability. The setting 
up of Novar Projects in the UK and Germany, the launching 
of new products and the investment in new systems will all
provide a stronger platform for this business going forward.
The expansion of the low cost Romanian manufacturing
operation was largely complete by mid year with benefits
progressively coming through in the second half. 
IBS – Datacoms & Electrical Accessories*
2002 vs 2001
1998 1999 2000 2001 £ millions 2002 Reported Like for Like 4 yr CAGR
151 150 251 323 Sales 306 -6% -14% +19%
Operating
14 19 27 8 2 -80% -81% -41%
Profit
26 30 40 24 EBITDA 16 -33% -32% -11%
* Indicative analysis
Within this segment, the improving performance of Electrical
Accessories has been overshadowed by declining revenues 
in Datacoms. Full year reported profits have been adversely
impacted by £4.5m of additional pension charges.
In the UK during 2002, Electrical Accessories realigned price
structures for a broadly neutral effect and broadened the
product portfolio, both of which contributed to volume and
market share gains. The business has continued to aggressively
move the sourcing of key products to lower cost regions. 
The combination of these actions has strengthened our
competitive position in key market channels. Strengthened
distribution relationships, secured in 2001, allowed us to grow
sales through the retail and wholesale channels, increasing
access to key customers and markets and providing future
opportunities for profitable growth. In Germany, Electrical
Accessories volumes declined in line with the markets, 
while restructuring actions at Ackermann delivered planned
headcount reductions of nearly one third by the year-end.
Datacoms markets deteriorated further during the year, 
with the UK and German markets hardest hit. Some lack of
product availability during plant restructuring contributed 
to the volume decline. Despite these difficult conditions, 
the business continued to focus on completion of the
restructuring programme progressively delivering a significantly
reduced cost base and headcount. T wo Datacoms factories
have now been closed in the UK. In addition, supply
arrangements have been concluded to assure that current
and future demand can be met from flexible and competitive
sources beyond our own manufacturing base. The business 
is now right sized for the current levels of activity. 
Datacoms and Electrical Accessories have demonstrated
progressive recovery in 2002 with solid operating profit 
growth in the second half of the period compared to the 
prior year and the first half of 2002.  Operating review continued
14 Novar annual report 2002
Indalex Aluminum Solutions
2002 vs 2001
1998 1999 2000 2001 £ millions 2002 Reported Like for Like 4 yr CAGR
196 313 594 521 Sales 515 -1% +4% +27%
Operating
18 27 40 1 17 NM* NM* -2%
Profit
23 34 56 21 EBITDA 36 +73% +93% +13%
* Not meaningful
The soft alloy aluminum market in North America stabilised 
in 2002. After some restocking in the first quarter, there 
was further progress in quarter two after which market
demand flattened.
In these market conditions, Indalex showed a strong 
recovery with volumes up 9% and market share gains across
all segments. On a like-for-like basis, local currency sales
increased by 4% as volume gains were partly offset by reduced
base aluminum prices, down 7% on average.
Reported profits grew from £1m to £17m with increased
volumes and enhanced operational efficiency from our 
early restructuring activity, driving this improvement. We have
made considerable improvement on health and safety and
the environment allowing us to release £2.5m from provisions
in the year. 
Plant rationalisation and investment in new presses completed
in 2001 delivered their anticipated benefits in 2002. The drive
to enhance efficiency continued with further administrative
headcount reductions during the year. Whilst overall
headcount has declined, we have reinvested some of 
the administrative cost savings into sales and marketing
capability, helping to drive an improvement in market share. 
Business sourced from Asia Aluminum Group, in which we
have a 25% associate investment, increased in 2002 and there
are further opportunities to capture. Investment was made in
the management and logistics infrastructure needed to fulfil
the potential of this alliance. During the year we supported
the expansion of Asia Aluminum Group as they made a further
acquisition of two plants in China. This was financed by 
an increase in capital in the operating company, our share 
of which was £3.4m. We received our first dividend from this
investment in quarter four.
The smaller related engineering businesses reported in this
sector saw a small year on year fall in profits as new contract
signings were delayed.
Security Printing Services
2002 vs 2001
1998 1999 2000 2001 £ millions 2002 Reported Like for Like 4 yr CAGR
248 287 349 372 Sales 365 -2% +3% +10%
Operating
44 49 60 69 63 -9% -5% +10%
Profit
54 62 73 83 EBITDA 78 -6% -2% +10%
Cheque market volumes in the USA are estimated to have
declined in the year by around 3% primarily due to the 
soft economy. There was a fall in volume in the high value
securities market segment as fewer new brokerage accounts
were opened. Against this background the business grew
market share with net new business wins in a competitive
market, enhanced revenue through the call centre and
Internet channels and further uplift from the release of new
cheque products.
Local currency revenues increased by 3% in the year, but
reported revenue was impacted by the weakness of the US
dollar through the second half of the year.
The business continued to grow the level of orders received
through call centre and Internet channels, providing enhanced
revenue opportunities. Business generated through these
combined channels increased to over 50% of 2002 revenue.
T o support the continued shift to these channels, a new
customer contact centre was opened in San Antonio, T exas
and two further centres saw their capacity increased.
Profits declined by 5% before the currency impact as a result
of additional investment in contact centre and Internet
capabilities, an increase in new business set up costs, lower
average sales prices and less favourable business mix. The
now discontinued divestment of the business also delayed a
number of restructuring actions that are now well under way.
At Clarke American, as the market has become more
competitive, so we have extended our commitment to invest
in reducing our unit cost per transaction. During the year 
two new high capacity plants were opened in Phoenix,
Arizona and Des Moines, Iowa. Late in the year, two older, 
less efficient plants were closed. A further four plant closures
were announced in early 2003. Investment in high capacity,
low labour cost, automated packaging systems continued
with 75% of all production capacity now benefiting from 
this programme. 
The direct-to-consumer businesses contributed to the sector
performance with further revenue growth over prior year driven
by increased volume and positive price movement, combined
with significant improvement in advertising spend yield. 
Profit was ahead slightly as a result of the increased revenue
combined with cost control and productivity improvements. 15 Novar annual report 2002
Financial review
This review gives additional information on significant
financial and accounting matters.
Restructuring
Restructuring charges of £18.4m in 2002 (2001: £48.1m)
comprise £13.6m for Intelligent Building Systems, £2.2m for
Indalex Aluminum Solutions and £2.6m for Security Printing
Services. Of the total charge, £9.2m relates to cash spend 
in 2002, £7.6m to cash spend anticipated for 2003 and the
balance to non-cash items (principally asset write downs).
In the Intelligent Building Systems sector, restructuring
programmes have focused on the integration of recent
acquisitions, reorganisation of our commercial operations
and on providing an enhanced competitive cost base across
the sector.
In the Indalex Aluminum Solutions sector , the drive to enhance
plant efficiency started last year has been supported by 2002
restructuring aimed primarily at administration and overhead
cost reduction.
In the Security Printing Services sector, costs relate both to
overhead reduction and to the closure of two small plants, 
as a part of our strategy of channelling production through
large scale plants supported by investment in high capacity
efficient packaging systems.
Exceptional Items
Exceptional items comprised £1.5m exceptional operating
costs incurred in connection with the previously proposed
sale of the Security Printing Services business, profit on
disposal of fixed assets of £5.3m, and loss on the disposal of
minor businesses of £1.6m.
Interest
The net interest expense of £10.0m for the year compares to
£16.5m in 2001. The decrease reflects significantly lower
floating interest rates in the USA. 
Taxation
The tax charge before exceptional items is £34.6m reflecting
an effective tax rate of 37.0% 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 2002 sterling strengthened against two of the three
main functional currencies of the Group, being the US 
and Canadian dollars. This movement resulted in an 
adverse translation impact, decreasing reported turnover 
for continuing operations by £40m and operating profits
before restructuring by approximately £4m.
Dividends
The Directors recommend that the final dividend be maintained,
leaving the total dividend for the year unchanged at 9.50p
net per Ordinary share. Excluding goodwill amortisation and
exceptional items, the dividend covered is 1.2 times (2001:
0.4 times as restated) by headline earnings per share, and 
1.4 times (2001: 1.4 times) by free cash flow. The final dividend
will be paid in June 2003.
Cash flow
2002 2001
£m £m
Continuing operations:
Group operating profit – before
restructuring and goodwill amortisation 116.6 117.8
Depreciation 56.6 56.6
EBITDA – before restructuring
and exceptional operating costs 173.2 174.4
Restructuring (18.4) (48.1)
Exceptional operating costs (1.5) –
Working capital and other movements (33.7) 30.2
Net cash inflow from operating activities 119.6 156.5
Purchase of tangible fixed assets (41.7) (64.7)
Net trading cash inflow 77.9 91.8
Disposal of tangible fixed assets 17.8 23.0
Interest (16.4) (17.6)
Tax (15.4) (29.9)
Preference dividends (10.6) (10.6)
Other 1.6 0.4
54.9 57.1
Discontinued operations – (3.6)
Free cash flow – before equity dividends 54.9 53.5
Equity dividends (39.1) (41.9)
Free cash flow – after equity dividends 15.8 11.6
Net trading cash inflow decreased by £13.9m to £77.9m. The
main driver behind this movement was working capital
increases associated with reassessed stock levels and new
business wins. 
Excluding the impact of restructuring (per note 18) net
trading cash inflow decreased by £16.3m to £102.4m.
Capital expenditure was £41.7m (2001: £64.7m). The Group’ s
long term intention is that capital expenditure is broadly in
line with depreciation. 
Free cash flow before equity dividends increased by £1.4m 
to £54.9m. Financial review continued
16 Novar annual report 2002
Movement in net debt
Net debt at 31 December 2002 of £218.5m represented
gearing of 46%, and a reduction of £54.1m over the year. The
principal elements of the movement are set out below: 
£m
Net debt at 31 December 2001 (272.6)
Free cash flow 15.8
Acquisitions (21.0)
Disposals (net of costs) 0.3
ESOP trust purchases (net) and share issues (2.7)
Redemption of own shares (0.1)
Proceeds from close out of swaps 23.0
Dividends paid to minorities (0.1)
Exchange, including returns on forwards 38.9
Net debt at 31 December 2002 (218.5)
Acquisition expenditure comprised £12.6m (including loans
advanced) on joint ventures and associated undertakings,
and £8.4m on subsidiary undertakings (including net debt
acquired). £23.0m was realised from the close out of a number
of cross currency and interest rate swaps. The Group’ s policy
is to hedge its principal overseas assets with local currency
borrowings and financial instruments. 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.
Invested capital
The Group’ s invested capital, defined as net assets excluding
debt, adding back goodwill amortised and goodwill written
off to reserves is £1,153.5m.
2002
2002 2002 Net
Net T otal invested
assets
(1)
goodwill
(2)
capital
£m £m £m
IBS 159.2 463.8 623.0
IAS 194.2 169.1 363.3
SPS 74.1 245.2 319.3
427.5 878.1 1,305.6
T ax, dividends and 
other corporate items
(3)
(152.1) – (152.1)
275.4 878.1 1,153.5
2001 (restated for FRS 19) 328.6 875.2 1,203.8
(1) Before net debt, excluding capitalised goodwill and discontinued operations.
(2) T otal goodwill includes goodwill written off to reserves of £437.2m together with
capitalised goodwill before amortisation of £440.9m.
(3) Excludes investment in ESOP .
New accounting standards
The Group adopted Financial Reporting Standard 19 Deferred
T ax (“FRS 19”) in these accounts for the first time. Under 
FRS 19, deferred tax is accounted for on a full provision rather
than a partial provision basis. This change in accounting
policy contributed to the increase in the effective tax rate for
the Group to 37.0%.
Financial Reporting Standard 17 Retirement Benefits (“FRS 17”)
was issued in November 2000. The transitional period 
for implementation was extended during 2002 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 21. Under FRS 17, the difference between the
market value of the assets and liabilities (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 2002 there was a net
deficit of £188.0m after deferred tax set-off, calculated in
accordance with the FRS 17 prescribed method. This
compared to a deficit of £32.8m at 31 December 2001. The
increased deficit is due primarily to the decrease in the asset
values, reflecting the downward trend in markets experienced
in 2002. The FRS 17 deficit has no impact on the funding
requirements of the Group’ s schemes for 2002, which are
determined from regular funding valuations and reviews,
details of which are set out in note 21a. 
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
in 2002 increased to £13.3m (2001: £7.6m). The Group’ s most
significant defined benefit pension schemes are based in 
the UK, where the next triennial valuation will take place in
March 2003. Given the continued recent decrease in asset
values, it is likely that the Group’ s pension costs charged to
the P&L in accordance with SSAP 24 will increase significantly
in 2003. Cash contributions are also likely to be resumed on
all schemes from the second half of 2003.
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 currency 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 17 to
the accounts. 17 Novar annual report 2002
Funding:
The Group is financed by a combination of retained earnings
and fixed and floating rate foreign currency and sterling
borrowings.
In 2000, the Group raised $335m from a private placement of
senior loan notes in the US market. These notes are repayable
in three tranches from 2007 to 2010. Initially interest rate
swaps and currency swaps were used to convert this fixed
rate debt into predominantly floating rate debt. During 2002
the Group closed out the majority of these swaps for £23.0m.
Further information is set out in note 17 to these accounts. 
In addition to the private placement, the Group has available
committed bank borrowing facilities of £240m. Of these
borrowing facilities, £195m expire at the end of 2003. The
renewal or replacement of a proportion of these expiring
facilities is expected during 2003. 
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 interest rate 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’ s
policy is to manage the risk associated with these exposures
by using derivative and supply contracts to hedge metal
price fluctuations.
Foreign exchange risk:
Group policy is to use 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. Group policy is not to hedge 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 2002 is set out in note 17e. 
Going concern
After having made appropriate enquiries including a review
of the Group’ s budget for 2003 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. Therefore,
they continue to adopt the going concern basis in preparing
these accounts. The Board
18 Novar annual report 2002
Charles Korbell (53)
Executive Director since March 1997.
He is the Chief Executive of the
Security Printing Services sector and
has been with the Group since 1971.
Stephen Howard (49)*
Non-executive Director. Appointed
to the Board in June 2000. He is the
Group Chief Executive of Cookson
Group plc and is a non-executive
Director of Slough Estates plc.
Sir Geoffrey Whalen CBE (67)*
Non-executive Director since
January 1996. He is Chairman of
Coventry Building Society and a
non-executive Director of Peugeot
Motor Company plc and Federal
Mogul Corporation.
Jurgen Hintz (60)
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 (65)*
Non-executive Chairman. Appointed
to the Board in July 1999. Chairman
of Catlin Westgen Group Ltd and
Deputy Chairman of the Gallaher
Group plc. He is also a non-
executive Director of NM Rothschild
& Sons Ltd and Braemar Seascope
Group plc. His previous appointments
include Group Managing Director
of Carless, Capel and Leonard plc,
Finance Director of Courtaulds plc
and Chief Executive and then
Chairman of Enterprise Oil Plc. Mike McKeon (46)
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.
Dr. Gerry Murphy (47)*
Non-executive Director since
September 1997. He is the Chief
Executive Officer of Kingfisher plc
and was previously Chief Executive
Officer of Carlton Communications
Plc and Exel plc.
Oliver Stocken (61)*
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.
Group Company Secretary
Karen Richardson
*Members of the Nomination
Committee, Remuneration
Committee and Audit Committee. 19 Novar annual report 2002
Report of the Directors
The Directors present their annual report to shareholders, together
with the audited accounts for the year ended 31 December 2002.
Activities
The Company’ s businesses 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, mainly in the UK, continental Europe and
North America.
The main business of the Indalex Aluminum Solutions companies
is the extrusion and supply of engineered aluminium components
in North America for diverse markets including information
technology, customer durables, electrical, building and construction
and transportation.
In North America the Security Printing Services sector’ s activities
include the production of cheques and other financial business forms
and the provision of specialised services to the financial institutions.
Accounts
Group Results
Group profit for the year after taxation and minority interests
amounted to £37.2m. It is recommended that this amount be dealt
with as follows:
£m
Ordinary Dividends
– interim paid 11.9
– final proposed 27.0
Preference and “B” Dividends
– paid and accrued 10.6
Retained loss (12.3)
T otal 37.2
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) (2001: 2.9p (net)) per Ordinary share
of 27
7
/ 9p was paid on 26 October 2002. The Directors recommend
the payment of a final dividend of 6.6p (net) (2001: 6.6p (net)) to bring
the total dividend for 2002 to 9.5p (2001: 9.5p). The 2002 final
dividend will be payable on 6 June 2003 to Ordinary shareholders
registered on 2 May 2003.
Preference Shares
The next dividend on the 7.25p Preference shares will be paid on
1 June 2003 to Preference shareholders registered on 2 May 2003.
“B” Shares
The next dividend will be paid on 20 May 2003 to holders of “B”
shares registered on 11 April 2003.
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 19 to the accounts on pages 39 to 40.
As at 26 February 2003, 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 72,028,859 16.73
Fidelity Investments 44,185,694 10.26
Mourant & Co Trustees 22,085,786 5.13
Clerical Medical 14,031,626 3.26
Standard Life 12,991,780 3.02
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 Plan offers Ordinary shareholders the opportunity to invest their
cash dividends into Novar shares, which are bought in the market at
the prevailing market price. 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.
Annual General Meeting
Authority to allot shares and waiver of pre-emption rights
The Companies Act 1985 contains provisions making it necessary
for Directors to obtain authority from the shareholders for, first, the
allotment of unissued shares or convertible securities (except under
employee share schemes) and, secondly, the issue of 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 the employee share schemes, allotment to those
converting convertible securities, or any other obligations or
potential obligations to allot, they believe that it is in the interests
of the Company for these authorities to be given to the Board.
Resolution No. 6 will be proposed as an Ordinary Resolution to
renew the authority granted to the Board at last year’ s Annual
General Meeting for a further five year period to allot unissued
share capital up to a maximum of £39,862,000 in nominal value,
representing approximately 33% of the number of Ordinary shares
in issue. It is the intention of your Board to continue the practice
of renewing this authority annually.
At last year’ s Annual General Meeting the Directors were
empowered until the conclusion of the 2003 Annual General
Meeting to make issues of Ordinary shares or convertible securities
for cash, other than to existing shareholders pro rata to their
holdings. The Directors believe that, in the interest of flexibility,
the power should be continued. Accordingly, Special Resolution
No. 7 will be proposed to give the Directors authority to waive 
pre-emption rights over up to £5,979,000 representing approximately
5% in nominal value of Ordinary shares for a further period until the
end of the Annual General Meeting in the year 2004. The proposal
conforms with the pre-emption guidelines issued by the investment
protection bodies to ensure that existing shareholders’ interests
are safeguarded. 20 Novar annual report 2002
Report of the Directors continued
Purchase of own shares
Last year, shareholders approved the purchase by the Company of 
its own Ordinary and Preference shares. In the event the Company
did not buy back any shares during the year.
The Directors consider it desirable that the Company should again
seek authority from shareholders to have the flexibility to make
market purchases of its own Ordinary and/or Preference shares up 
to specified limits. Special Resolutions No. 8 and 9 to this effect will
therefore be proposed at the Annual General Meeting. 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 seek to renew it each year.
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.
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 2002, the Company’ s
trade creditors represented 62 days (2001: 46 days) of annual purchases.
Corporate Governance
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 the Principles of Good Governance
and Code of Best Practice (the Combined Code) and whether the
Company has complied throughout the accounting period. This
report describes how the principles of governance set out in the
Code are applied in relation to Directors, Directors’ Remuneration
(separately on pages 23 to 26), Financial Reporting and Internal
Controls, and the Audit Committee.
The Board considers that the Company has complied with the
Combined Code provisions throughout the year under review.
The Board consists of three executive Directors and five independent
non-executive Directors as described on page 18. The Board meets
at least eight times during the year to deal with matters which are
material to the Group which it has reserved for its own decision.
The Board operates through four main committees. 
The Nomination Committee consists of all the non-executive
Directors with Sir Graham Hearne as the chairman. It deals with
Board appointments and departures.
The Remuneration Committee consists of all the non-executive
Directors with Sir Geoffrey Whalen as the chairman.
The Audit Committee comprises all the non-executive Directors with
Dr Murphy as the chairman. The responsibility of this committee is 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 also considers and
resolves any matters raised by the external auditors and brought to
the attention of the Board on any aspect of the accounts or the
Group’ s control and audit procedures. 
The Audit Committee is conscious of the need to ensure that the
objectivity and independence of the external auditors is maintained,
and keeps under review the nature, extent and fees paid in respect
of the non-audit services provided by them.
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.
Sir Geoffrey Whalen has been appointed the senior non-executive
Director .
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.
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 22, which
among other things includes statements on employment policies,
health and safety, the environment and charitable donations. 21 Novar annual report 2002
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;
• 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.
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.
Auditors
Deloitte & T ouche have indicated their willingness to continue as
auditors. Resolution No. 5 to reappoint them under the provisions 
of Section 385 of the Companies Act 1985 will be proposed at the
Annual General Meeting.
Directors
The names of the present Directors of the Company are shown on
page 18, and all were Directors of the Company throughout the year.
Mr I G Ashby resigned as a Director on 15 October 2002. 
Sir Graham Hearne and Mr M J E McKeon retire by rotation
under Article 95. Each of them, being eligible, offers himself for
reappointment as a Director. Details of the notice period contained
in the contract of service of Mr McKeon are included in the Report
to shareholders on Directors’ remuneration on pages 23 to 26.
Sir Graham Hearne, being a non-executive Director, does not have
a service contract with the Company. A brief biography of each of
the Directors is included on page 18.
During 2002, 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
(a) 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 2002
and at 1 January 2002, including the beneficial interests of their
families, are set out in the table below.
1 January 2002
(or date of
31 December 2002 appointment)
Ordinary shares Ordinary shares
Directors of 27
7
/ 9p of 27
7
/ 9p
Sir Graham Hearne 12,253 11,435
B J Hintz 1,822,600 1,517,860
S L Howard 13,158 13,158
C L Korbell 70,318 67,318
M J E McKeon 21,868 21,868
Dr G M Murphy 20,378 20,378
O H J Stocken 58,445 26,547
Sir Geoffrey Whalen 20,000 20,000
Notes:
(i) During the year holdings of Ordinary shares of Sir Graham Hearne, Mr B J Hintz, 
Mr C L Korbell and Mr O H J Stocken increased by 818; 304,740; 3,000 and 31,898
respectively within a price range of 102.0p to 154.0p per share.
(ii) Mr I G Ashby who was a Director during the year bought 3,000 Ordinary shares 
at a price of 148.0p per share
(iii) The executive Directors of the Company are deemed to have an interest in the 
20,552,316 and 1,533,470 Ordinary shares held by the Novar Employee Trust and 
Novar Performance Partnership Plan Share Trust respectively.
(iv) None of the Directors held any interest in the 7.25p Convertible Preference shares 
or “B” shares of the Company.
(v) None of the Directors held any non-beneficial interest in any of the shares of the
Company .
(vi) None of the Directors held interests in the shares or loans of the Company’ s
subsidiaries at any time during the year.
(vii) No other changes occurred in any of these interests between 31 December 2002 
and 26 February 2003.
(b) Directors’ share options
Details of Directors’ share options are disclosed in the Report to
shareholders on Directors’ remuneration on pages 23 to 26.
By order of the Board
K Richardson
Group Company Secretary
26 February 2003 Corporate Social Responsibility
22 Novar annual report 2002
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, the first we have prepared,
describes the progress we have made in 2002 in establishing a
framework for the Group and outlines how this is applied across
the Group’ s businesses.
During 2002 the Group introduced a Code of Conduct, a copy of
which is available on the Novar website. This outlines our conduct
across a range of social, ethical and environmental areas which
are core to the effective and efficient functioning of our business.
A separate code of conduct has been introduced in North America
and an Integrity policy operates for Indalex Aluminum Solutions.
These include areas such as anti-trust and trade regulation laws, and
employee rights and anti-discrimination legislation.
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,
Europe, North America, 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, with
designated specialist managers. External audit of these has resulted
in a number of awards being achieved by Group businesses, both in
the UK and in North America.
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 by managers with specific skills
and training. Most European sites are accredited to the
environmental management standard ISO14001 or EMAS, and
programmes are currently under way to achieve further
accreditations during 2003. Environmental management systems
audits have been carried out in most operations.  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 so far has focused
on the environmental performance of suppliers and their working
practice standards, supported by appropriate audit processes.
Improved co-ordination of logistics has focused on reducing
transportation, and improving fuel management awareness. 
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 2002, donations to charitable organisations within the
UK amounted to £24,725 (2001: £29,975). 23 Novar annual report 2002
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 27: 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 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 is determined by the
Board of Directors. No Director is involved in deciding his own
remuneration.
The Committee’ s T erms 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), Sir Graham Hearne, Mr S L Howard, Dr G
Murphy and Mr O H J Stocken.
The Committee consults with the Group Chief Executive, the
Group Director of Human Resources and the Group Company
Secretary (who normally attend Committee meetings) and has
access to independent professional advice and market data which
is provided to the Company by its external consultants. Of these,
Hay Group provided advice and services which materially assisted
the Committee in its deliberations during the year under review.
Hay also provide advice to the Company on the Group’ s executive
grading structure.
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.
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.
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. (On a change of control of the
Company, Mr Hintz would be entitled to 24 months’ notice and
would receive as compensation liquidated damages equivalent to
18 months’ salary and benefits in the event of termination). 
Mr M J E McKeon has a service agreement dated 25 April 2000
which can be terminated by the Company on 12 months’ notice. 
Mr C L Korbell, a US citizen, has a service agreement with Clarke
American Checks, Inc. (“Clarke”) dated 19 September 1995 which is
automatically extended each year on 31 December for an additional
one year period, unless at any time Clarke gives 60 days’ prior notice
of termination. In the event of termination, Mr Korbell would receive
two years’ salary and other benefits payable over the following two
years. (On a change of control of Clarke, Mr Korbell would be entitled
to receive one year’ s salary as a lump sum, and on termination of the
employment by either party (other than for cause) at any time
thereafter, two years’ salary and bonus (less the compensation of one
year’ s salary already paid)).
Mr I G Ashby’ s service agreement (which was effective from 24
September 2001, and which provided for 12 months’ notice from the
Company) terminated on 31 October 2002 when he left the Company .
The unexpired term of the service contracts is therefore 12 months
for Mr Hintz and Mr McKeon, and 60 days for Mr Korbell.
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 16 June 2003
Dr G Murphy 3 September 2003
Mr O H J Stocken 16 June 2003
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 £11,500 in recognition of their
membership of certain committees. Committee chairmen each
received an additional fee of £3,500. The non-executive Chairman
of the Company received a fee of £155,000 for the year under review.
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.
Annual Bonus 
The executive Directors participate in an annual bonus plan related
primarily to growth in the Company’ s earnings per share and, in the
case of Sector Chief Executives, to operational performance. In 2002
they were each awarded a bonus amounting to 6% of salary. The
bonuses received by the Directors are included in the table of
Directors’ emoluments. Report to shareholders on Directors’ remuneration continued
24 Novar annual report 2002
Share Option Schemes
The Company currently operates the following share option schemes:
(i) Novar plc Executive Share Option Scheme (last options granted
in 1996)
Mr Korbell is the only Director who holds 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.
(ii) Novar plc 1996 Executive Share Option Scheme
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. 
Annual option grants have been made since 1997 and are subject
to performance targets linked to business performance on the same
basis as the 1996 grants described in (i) above.
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
Performance Partnership Plan
Directors’ Interests
Conditional Date of
matching Market vesting of
Date of awards of Price of matching Shares
Director award shares awards award purchased
B J Hintz 26 May 2000 153,755 161p March 2003 106,946
3 April 2001 203,289 152p March 2004 109,154
C L Korbell 26 May 2000 24,256 161p March 2003 19,797
3 April 2001 29,937 152p March 2004 18,485
M J E McKeon 3 April 2001 34,210 152p March 2004 18,368
Directors’ emoluments
T otal emoluments
excluding pensions
Salary and Fees Benefits Bonus Other 2002 2001
Year to 31 December 2002 £000 £000 £000 £000 £000 £000
Sir Graham Hearne 155––– 155 155
B J Hintz 572 36 34 – 642 579
I G Ashby 
(1)
198 14 12 256 480 66
S L Howard 32––– 32 32
C L Korbell
(2)
347 19 49 – 415 447
M J E McKeon 241 22 14 – 277 287
Dr G Murphy 35––– 35 35
O H J Stocken 32––– 32 32
Sir Geoffrey Whalen 35––– 35 35
T otal 1,647 91 109 256 2,103 1,668
Notes:
1. Mr Ashby left the Company in October 2002. He received £255,828 as compensation for termination of his employment in accordance with the terms of his service agreement.
His bonus payment was prorated for his service during the year.
2. Mr Korbell received an additional bonus payment of £28,048 related to the performance of the Security Printing Services sector in the first four months of the year. In accordance with
normal US practice, his bonuses were pensionable.
Performance Partnership Plan
Mr Hintz, Mr Korbell and Mr McKeon all participate in the Novar plc
Performance Partnership Plan. Under the Plan, 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
3 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
earnings per share over a period of three consecutive financial years
commencing with the year of grant 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 3 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 below are details of the conditional matching
awards of shares made to each Director under the Plan, and the
shares purchased by them. No awards were made to any of the
Directors in 2002 as no bonuses were payable. All the shares
purchased by the Directors under the Plan are also included in
the table of Directors’ interests on page 21. 25 Novar annual report 2002
upon individuals having a minimum personal holding of shares in the
Company until exercise. In addition to the earnings per share target
described above, a second performance target linked to increases
in T otal Shareholder Return must be satisfied before options will be
exercisable. For the 1998 grant, the Company’ s T otal 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 T otal 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 T otal Shareholder
Return in relation to other sector companies, and the range of
increase in the Company’ s T otal 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 T otal 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. 
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. 
(iii) 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 most recent offer, in March 2002, was at a
discount of 20% to the market value of the Company’ s shares on the
day before the invitation date to participate. 
Mr Hintz holds an option granted in 2000 under this scheme over
9,765 Ordinary shares at an exercise price of 99.2p. This option is
exercisable during a six month period from its maturity on 30 June 2003.
Share Options 
Executive Share Options Options at Granted Options at
Date of Exercise Exercise 1 January during 31 December
Directors grant price (pence) period 2002 2002 2002
B J Hintz 182.0 2000-2007 989,011
(3)(5)
989,011
208.0-222.0 2001-2005 947,368
(4)
947,368
136.0 2002-2009 485,294
(3)
485,294
183.0-200.0 2002-2006 481,050
(4)
481,050
124.0 2003-2010 553,763
(3)
553,763
167.0 2004-2011 411,178
(3)
411,178
13 March 2002 151.0 2005-2012 490,066
(3)
490,066
I G Ashby
(8)
131.5 2003 349,809
(3)
349,809
13 March 2002 151.0 2003 203,091
(3)
203,091
C L Korbell 341.0 1997-2004 59,228
(1)
59,228
256.3 1998-2005 79,039
(1)
79,039
221.3 1999-2006 101,878
(2)
101,878
249.0 2000-2007 128,051
(3)
128,051
208.0-222.0 2001-2005 387,032
(4)
387,032
136.0 2002-2009 279,682
(3)
279,682
183.0-200.0 2002-2006 286,626
(4)
286,626
124.0 2003-2010 329,301
(3)
329,301
167.0 2004-2011 266,134
(3)
266,134
13 March 2002 151.0 2005-2012 316,253
(3)
316,253
M J E McKeon 155.5 2003-2010 257,234
(3)
257,234
167.0 2004-2011 159,681
(3)
159,681
13 March 2002 151.0 2005-2012 203,091
(3)
203,091
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 earnings per share.
3. Options granted under the Novar plc 1996 Executive Share Option Scheme with performance conditions linked to increases in earnings per share.
4. Options granted under the Novar plc 1996 Executive Share Option Scheme with performance conditions linked to increases in 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 2002 was 108.5p and the range during the year was 98p to 158.5p.
7. None of the above Directors exercised any options during the year and none lapsed.
8. Options held by Mr I G Ashby lapse on 31 December 2003 if unexercised by that date.  1998
NOVAR FTSE 250
1999 2000 2001 2002
Source: DATASTREAM
0
25
50
75
100
125
150
Report to shareholders on Directors’ remuneration continued
26 Novar annual report 2002
were £47,483 and £72,451 respectively. The increase in the transfer
value over the year, less contributions made by the director during
the year, amounts to £19,163. The transfer value of the increase in
accrued pension (excluding inflation) as at 31 December 2002, less
directors’ contributions, was £21,421.
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 £1,662 (including inflation) and £2,060
(excluding inflation). The total accrued pension at the end of the
year was £14,908. The transfer values of the accrued pension as at
31 December 2001 and 31 December 2002 were £48,987 and £50,175
respectively . The increase in the transfer value over the year was
£1,188. The transfer value of the change in the accrued pension
(excluding inflation) as at 31 December 2002 was negative £6,933.
Clarke American Checks, Inc. – Supplemental Executive
Retirement Plan
The increase in accrued pension over the year was US$14,666
(including inflation) and US$6,587 (excluding inflation) while the
sterling value fell by £14,207 (including inflation) and £19,786
(excluding inflation). The total accrued pension at the end of the year
was £218,233. 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 2001 and 31
December 2002 were £974,159 and £1,078,336 respectively. The
increase in the transfer value over the year was £104,177. The transfer
value of the change in the accrued pension (excluding inflation) as
at 31 December 2002 was negative £97,767. The Plan is unfunded. 
Approved by the Board of Directors 
Sir Geoffrey Whalen CBE
Chairman of the Remuneration Committee
Graph of Total Shareholder Return
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 2002, this amount was £285,750. Mr Hintz has an
overseas pension plan established under trust.
Mr McKeon has both money purchase and defined benefit
arrangements. The Company makes annual discretionary
contributions to and in respect of the Novar Funded Unapproved
Retirement Benefit Scheme (FURBS). In 2002, these amounted to
£30,285 for Mr McKeon (and £19,629 for Mr Ashby who left the
Company in October 2002).
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 T rust 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 2002, this totalled £13,331.
Defined benefit schemes
Details of the value of individual pension entitlements and information
relating to defined benefits available to Messrs Ashby and McKeon
under the Novar Executive Pension Scheme are shown below.
Mr Ashby paid contributions of £4,833 during the year. The increase
in accrued pension over the year was £1,985 (including inflation) and
£1,975 (excluding inflation) and the total accrued pension at the end
of the year was £2,559. The transfer values of the accrued pension
as at 31 December 2001 and 31 December 2002 were £3,923 and
£16,372 respectively. The increase in the transfer value over the year,
less contributions made by the director during the year, amounts
to £7,616. The transfer value of the increase in accrued pension
(excluding inflation) as at 31 December 2002, less directors’
contributions, was £7,803.
Under the terms of his settlement agreement with the Company
Mr Ashby will receive a pension at his normal retirement age based
on his pensionable service with the Company until his termination
date, calculated in accordance with the scheme rules. 
Mr McKeon paid contributions of £5,805 during the year . The increase
in accrued pension over the year was £3,340 (including inflation) and
£3,250 (excluding inflation) and the total accrued pension at the end
of the year was £8,640. The transfer values of the accrued pension
(excluding inflation) as at 31 December 2001 and 31 December 2002 
The graph shows the total shareholder return on a holding of Novar plc Ordinary shares over the last five financial years ended 31 December 2002,
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. 27 Novar annual report 2002
Independent auditors’ report to the members of Novar plc
We have audited the financial statements of Novar plc for the year
ended 31 December 2002 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 2002
and of the profit 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 & T ouche
Chartered Accountants and Registered Auditors
London
26 February 2003 28 Novar annual report 2002
Consolidated profit and loss account
2002
Before
goodwill
amortisation 2002 2002 2001
and exceptional Goodwill Exceptional 2002 As restated
items amortisation items T otal (note 6)
for the year ended 31 December 2002 Note £m £m £m £m £m
Turnover 1a
Continuing operations 1,448.2 – – 1,448.2 1,469.4
Discontinued operations –––– 12.7
1,448.2 – – 1,448.2 1,482.1
Group operating profit 1b
Continuing operations 3a 98.2 (22.1) (1.5) 74.6 48.5
Discontinued operations –––– (6.6)
98.2 (22.1) (1.5) 74.6 41.9
Group operating profit before restructuring, 
goodwill amortisation and exceptional items
– Continuing operations 116.6 – – 116.6 117.8
– Discontinued operations –––– (6.0)
116.6 – – 116.6 111.8
Restructuring (18.4) – – (18.4) (48.1)
Goodwill amortisation – (22.1) – (22.1) (21.8)
Exceptional items – – (1.5) (1.5) –
Group operating profit 98.2 (22.1) (1.5) 74.6 41.9
Share of operating profits of joint ventures and associated undertakings 5.4 (1.0) – 4.4 3.8
Total operating profit 103.6 (23.1) (1.5) 79.0 45.7
Disposal of fixed assets – continuing operations – – 5.3 5.3 0.7
Disposal and closure of businesses – continuing operations 3b – – (1.6) (1.6) (2.7)
Disposal and closure of businesses – discontinued operations 3c –––– (33.1)
Profit on ordinary activities before interest 103.6 (23.1) 2.2 82.7 10.6
Net interest 5 (10.0) – – (10.0) (16.5)
Profit/(loss) on ordinary activities before taxation 93.6 (23.1) 2.2 72.7 (5.9)
Profit before goodwill amortisation and exceptional items 93.6 – – 93.6 51.5
Goodwill amortisation – (23.1) – (23.1) (22.3)
Profit before exceptional items 93.6 (23.1) – 70.5 29.2
Exceptional items – – 2.2 2.2 (35.1)
Profit/(loss) on ordinary activities before taxation 93.6 (23.1) 2.2 72.7 (5.9)
T axation on profit/(loss) on ordinary activities 6 (34.9) (25.6)
Profit/(loss) on ordinary activities after taxation 37.8 (31.5)
Minority interests (equity) (0.6) (0.1)
Profit/(loss) for the financial year 37.2 (31.6)
Dividends – equity shares (Ordinary) 8 (38.9) (39.4)
Dividends – non equity shares (Preference and ‘B’) 8 (10.6) (10.6)
Retained loss 20 (12.3) (81.6)
Earnings per Ordinary share 7
Basic 6.5p (9.8)p
Diluted 6.5p (9.8)p
Basic before goodwill amortisation and exceptional items 11.6p 3.4p
Dividend per Ordinary share 8 9.5p 9.5p 29 Novar annual report 2002
Consolidated statement of total recognised gains and losses
2001
Group
2002 As restated
Group (note 6)
for the year ended 31 December 2002 Note £m £m
Profit/(loss) for the financial year 37.2 (31.6)
Currency translation differences on foreign currency investments (31.0) 5.7
Currency translation differences on foreign currency borrowings 17.3 (6.0)
Gain on currency forward hedging contracts 10.5 9.5
T axation on currency translation differences on foreign currency borrowings and forward contracts (1.3) (3.7)
Loss on deemed disposal of interest in associated undertaking (0.5) –
Total recognised gains and losses relating to the year 32.2 (26.1)
Prior year adjustment 6 (15.5)
Total gains and losses recognised since last annual report 16.7
The reported profit for the year is not materially different from the profit on an unmodified historical cost basis.
Reconciliation of movements in shareholders’ funds
2001
Group
2002 As restated
Group (note 6)
for the year ended 31 December 2002 Note £m £m
Total recognised gains and losses 32.2 (26.1)
Dividends (49.5) (50.0)
(17.3) (76.1)
Goodwill written back – 2.4
Issue of new Ordinary shares 0.4 1.5
Redemption of ‘B’ shares (0.1) (0.3)
Purchase of own shares – (54.1)
Net reduction to shareholders’ funds (17.0) (126.6)
Opening shareholders’ funds as previously reported 509.4 627.7
Prior year adjustment 6 (15.5) (7.2)
Opening shareholders’ funds as restated 493.9 620.5
Closing shareholders’ funds 476.9 493.9
The notes on pages 32 to 44 form part of these financial statements. 30 Novar annual report 2002
Balance sheets
2001
Group
2002 As restated 2002 2001
Group (note 6) Company Company
at 31 December 2002 Note £m £m £m £m
Fixed assets
Intangible assets 9 382.9 400.9 – –
T angible assets 10 258.4 302.7 0.6 0.7
Investments 11 92.6 86.3 2,126.3 2,048.6
733.9 789.9 2,126.9 2,049.3
Current assets
Stocks 12 94.3 94.2 – –
Debtors – amounts falling due within one year 13 232.8 215.9 21.6 39.8
Debtors – amounts falling due after more than one year 13 18.2 22.0 3.5 3.0
Cash at bank and in hand 14 41.8 48.4 – –
387.1 380.5 25.1 42.8
Creditors – amounts falling due within one year
Borrowings 15 (46.8) (4.1) (144.2) (92.9)
Other creditors 15 (256.8) (244.3) (51.7) (47.4)
(303.6) (248.4) (195.9) (140.3)
Net current assets/(liabilities) 83.5 132.1 (170.8) (97.5)
Total assets less current liabilities 817.4 922.0 1,956.1 1,951.8
Creditors – amounts falling due after more than one year
Borrowings 16 (213.5) (316.9) – (79.0)
Other creditors 16 (24.4) (5.7) (1,164.9) (1,021.8)
(237.9) (322.6) (1,164.9) (1,100.8)
Provisions for liabilities and charges 18 (101.2) (105.3) (0.8) –
Net assets 478.3 494.1 790.4 851.0
Capital and reserves
Called up share capital
– Equity shares (Ordinary) 19 119.6 119.5 119.6 119.5
– Non equity shares (Preference and ‘B’) 19 24.7 24.8 24.7 24.8
Share premium account 20 12.0 11.6 12.0 11.6
Capital redemption reserve 20 26.6 26.5 26.6 26.5
Revaluation reserve 20 2.3 2.3 – –
Other reserves 20 – – 178.5 178.5
Profit and loss account 20 291.7 309.2 429.0 490.1
Shareholders’ funds (including non equity interests) 476.9 493.9 790.4 851.0
Minority interests (equity) 1.4 0.2 – –
Total capital employed 478.3 494.1 790.4 851.0
Equity shareholders’ funds 329.9 346.4 643.4 703.5
Non equity shareholders’ funds 147.0 147.5 147.0 147.5
Approved by Board of Directors
Sir Graham Hearne,
Director
B J Hintz,
Director
26 February 2003
The notes on pages 32 to 44 form part of these financial statements. 31 Novar annual report 2002
Consolidated cash flow statement
2002 2001
for the year ended 31 December 2002 Note £m £m
Net cash inflow from continuing activities 119.6 156.5
Net cash outflow from discontinued activities – (2.2)
Net cash inflow from operating activities 24a 119.6 154.3
Dividends from associated undertakings 1.6 0.4
Returns on investments and servicing of finance 24b 18.7 (27.6)
Taxation (15.4) (29.9)
Capital expenditure and financial investment
Purchase of tangible fixed assets (41.7) (66.1)
Fixed asset investment (3.1) 1.7
Sale of tangible fixed assets 17.8 23.0
Loans advanced to joint ventures 11 (1.3) –
(28.3) (41.4)
Acquisitions and disposals
Purchase of businesses 25 (7.4) (70.0)
Investments in associated undertakings and joint ventures 11 (11.3) (41.9)
Cash acquired with businesses 25 0.2 2.6
Gross proceeds from disposal of businesses 0.3 2.7
Cash sold and transaction costs of disposals – (3.4)
(18.2) (110.0)
Equity dividends paid (39.1) (41.9)
Cash inflow/(outflow) before management of liquid resources and financing 38.9 (96.1)
Management of liquid resources
Decrease in term deposits – 43.0
Net cash inflow/(outflow) before financing 38.9 (53.1)
Financing
Issue of new Ordinary shares 0.4 1.5
Redemption of ‘B’ shares (0.1) (0.3)
Purchase of own shares – (54.1)
Net (decrease)/increase in debt 24c (46.5) 77.6
(46.2) 24.7
Decrease in cash in the year (7.3) (28.4)
Reconciliation of net cash flow to movement in net debt
Decrease in cash in the year (7.3) (28.4)
Net decrease/(increase) in debt 46.5 (77.6)
Decrease in liquid resources – (43.0)
Decrease/(increase) in net debt resulting from cash flows 39.2 (149.0)
Loan notes issued on purchase of businesses – (2.2)
Loans acquired with businesses 25 (1.2) (5.4)
Effect of foreign exchange rate changes 16.1 (6.8)
Decrease/(increase) in debt in the year 54.1 (163.4)
Opening net debt (272.6) (109.2)
Closing net debt 24d (218.5) (272.6) 32 Novar annual report 2002
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 2002. 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 and 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.
T ermination 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 33 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 instalment over the expected useful life of
the related asset on a basis consistent with the depreciation policy.
Following the implementation of FRS 15 (‘T angible 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 period 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 21.
Turnover
Turnover represents the invoiced value of sales excluding Value Added T ax
and similar sales related taxes.
Investments
Fixed asset investments other than associates and joint ventures are shown at
cost less provisions for impairment. 33 Novar annual report 2002
Notes to the accounts
1 Segmental analysis
2002 2001
a) Turnover £m £m
By class of business
Continuing operations
– Intelligent Building Systems 567.5 576.7
– Indalex Aluminum Solutions 515.0 520.9
– Security Printing Services 365.7 371.8
1,448.2 1,469.4
Discontinued operations – 12.7
1,448.2 1,482.1
By geographical origin
Continuing operations
– UK 282.3 314.4
– North America 930.6 946.6
– Continental Europe 204.7 177.8
– Rest of the World 30.6 30.6
1,448.2 1,469.4
Discontinued operations – 12.7
1,448.2 1,482.1
The geographical analysis of turnover by destination is not materially different
from turnover by origin.
b) Operating profit
By class of business
Continuing operations
Before restructuring, goodwill amortisation 
and exceptional operating costs
– Intelligent Building Systems 37.1 48.0
– Indalex Aluminum Solutions 16.7 1.0
– Security Printing Services 62.8 68.8
116.6 117.8
Restructuring (18.4) (48.1)
Goodwill amortisation (22.1) (21.2)
Exceptional operating costs (1.5) –
74.6 48.5
Discontinued operations
Before goodwill amortisation – (6.0)
Goodwill amortisation – (0.6)
– (6.6)
74.6 41.9
By geographical origin
Continuing operations
Before restructuring, goodwill amortisation 
and exceptional operating costs
– UK 7.2 14.4
– North America 86.7 79.3
– Continental Europe 21.4 22.5
– Rest of the World 1.3 1.6
116.6 117.8
Restructuring (18.4) (48.1)
Goodwill amortisation (22.1) (21.2)
Exceptional operating costs (1.5) –
74.6 48.5
Discontinued operations – (6.6)
74.6 41.9
After restructuring costs, goodwill amortisation and exceptional operating
costs the operating results of continuing businesses by class of business were:
Intelligent Building Systems £9.4m profit (2001: £1.1m profit), Indalex
Aluminum Solutions £6.5m profit (2001: £20.2m loss) and Security Printing
Services £58.7m profit (2001: £67.6m profit). The operating results of
continuing businesses by geographical origin after restructuring costs,
goodwill amortisation and exceptional operating costs were: UK £6.6m loss
(2001: £15.0m loss), North America £71.6m profit (2001: £55.6m profit),
Continental Europe £8.4m profit (2001: £6.4m profit) and Rest of the World
£1.2m profit (2001: £1.5m profit). 
1 Segmental analysis continued
2001
As 
2002 restated
c) Net assets £m £m
By class of business
– Intelligent Building Systems 159.2 150.1
– Indalex Aluminum Solutions 194.2 201.9
– Security Printing Services 74.1 77.8
Continuing operations including acquisitions 427.5 429.8
Discontinued operations (0.5) 1.0
Net operating assets 427.0 430.8
Goodwill 382.9 400.9
T ax, dividends and other corporate items (152.1) (101.2)
Investment in ESOP 39.0 36.2
Net debt (218.5) (272.6)
Net assets 478.3 494.1
By geographical location
– UK 94.6 94.7
– North America 284.0 292.5
– Continental Europe 37.9 29.4
– Rest of the World 11.0 13.2
Continuing operations including acquisitions 427.5 429.8
Discontinued operations (0.5) 1.0
Net operating assets 427.0 430.8
2 Operating costs
2002 2001 2001
Con- Con- Discon-
tinuing tinuing tinued
£m £m £m
Changes in stocks of finished 
goods and work in progress 15.2 9.9 8.7
Own work capitalised (0.4) (0.9) –
Other operating income (3.9) (10.0) –
Raw materials and consumables 546.6 576.1 0.1
Other external charges (including exceptional 
costs of £1.5m – note 3a) 330.8 363.2 5.5
Staff costs (note 4c) 406.8 395.0 3.1
Depreciation and impairment of owned assets 56.4 66.4 1.3
Goodwill amortisation 22.1 21.2 0.6
1,373.6 1,420.9 19.3
Discontinued operations – 19.3
1,373.6 1,440.2
2002 2001
Operating profit is stated after charging the following: £m £m
Payments under operating leases
– Hire of plant and machinery 13.4 10.6
– Other 14.1 11.0
Research and development expenditure 25.9 27.0
Restructuring costs 18.4 48.1
Fees paid to the Group’ s auditors were
– Audit fees and expenses 0.6 0.6
– T ax fees and expenses 0.4 0.3
– Other fees and expenses 0.7 0.9
1.7 1.8
Fees paid to other accountants 0.1 0.1
1.8 1.9
The audit fee for the Company was £0.1m (2001: £0.1m). Also paid to the
Group’ s auditors was £0.2m (2001: £0.6m) which is related to business
acquisitions and divestments. Where appropriate, project work is put out 
to tender. 34 Novar annual report 2002
Notes to the accounts continued
3 Exceptional items
a) Exceptional items – operating costs
The exceptional costs of £1.5m charged in arriving at operating profit for
the financial year relate to the costs incurred in connection with the previously
proposed sale of the Security Printing Services business. After full
consideration of the proposals received, the Group announced its decision
to withdraw the business from sale on 8 July 2002.
b) Disposal and closures of businesses – 2002 2001
continuing operations £m £m
Loss on the disposal and closure of subsidiary businesses (0.2) (2.2)
Loss on the disposal of interest in associated undertakings
and other investments (1.4) (0.5)
(1.6) (2.7)
c) Disposal and closure of businesses – discontinued operations
The loss on disposal and closure of businesses in 2001 comprised £30.6m
in respect of the disposal and closure of the Australasia business of
Intelligent Building Systems, and £2.5m for the loss on exit from the ISDN
telecommunications business.
4 Employees
2002 2001
a) Average weekly number of employees Number Number
By class of business
– Intelligent Building Systems 6,578 6,767
– Indalex Aluminum Solutions 3,596 3,989
– Security Printing Services 3,785 3,702
Continuing operations 13,959 14,458
Discontinued operations 9 275
13,968 14,733
2002 2001
b) Year end number of employees Number Number
By class of business
– Intelligent Building Systems 6,360 6,998
– Indalex Aluminum Solutions 3,359 3,371
– Security Printing Services 3,750 3,691
Continuing operations 13,469 14,060
Discontinued operations 2 245
13,471 14,305
Employee numbers are stated on a full time equivalent basis.
2002 2001
c) Staff costs (including Directors’ emoluments) £m £m
Wages and salaries 356.5 355.1
Social security costs 37.0 35.4
Pensions costs 13.3 7.6
406.8 398.1
2002 2001
d) Emoluments of Directors £’000 £’000
Emoluments of the Directors of the Company
– Fees 289 289
– Other emoluments and benefits 1,705 1,307
– Performance related bonuses 109 72
Aggregate emoluments 2,103 1,668
– Pension contributions to money purchase schemes 338 319
2,441 1,987
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 24 and 25
and the paragraphs referring to pensions benefits on page 26 within the
Report to shareholders on Directors’ remuneration, and form part of these
audited financial statements.
5 Net interest
2002 2001
£m £m
Interest payable:
Bank loans, overdrafts and other loans wholly repayable 
within five years (5.7) (5.4)
Other loans wholly repayable after five years (10.5) (14.5)
(16.2) (19.9)
Interest receivable 7.3 3.9
(8.9) (16.0)
Share of interest of associated undertakings (1.1) (0.5)
(10.0) (16.5)
Repayment terms and interest rates are shown in note 17.
6 Taxation on profit/(loss) on ordinary activities
2001
As 
2002 restated
£m £m
Current taxation
– UK corporation tax based on profit/(loss) 
for the year at 30.0% (2001: 30.0%) (1.3) (4.1)
– UK corporation tax for prior year (2.0) (0.4)
– Overseas taxation for current year 32.0 26.8
– Overseas taxation for prior year (0.7) (1.6)
28.0 20.7
Deferred taxation
– UK origination and reversal of timing differences – 0.5
– UK under/(over) provision in prior years 1.9 (0.7)
– Overseas origination and reversal of timing differences 4.0 3.6
– Overseas (over)/under provision in prior years (0.9) 0.9
33.0 25.0
Share of associated undertakings’ taxation 1.6 1.2
34.6 26.2
T ax charge/(credit) arising on exceptional items 0.3 (0.6)
34.9 25.6
Reconciliation of the taxation charge:
2001
As
2002 restated
£m £m
Profit/(loss) before taxation 72.7 (5.9)
T axation at 30% (2001: 30%) 21.8 (1.8)
Effect of:
– (non-taxable income)/non-deductible expenses (1.4) 15.6
– accelerated capital allowances (2.7) (2.5)
– other timing differences 5.3 (3.5)
– losses 0.3 8.6
– higher overseas taxation rates 9.0 5.8
– ACT written off – 1.1
– adjustments in respect of prior years (2.7) (2.0)
Current taxation charge for the year 29.6 21.3
Deferred taxation before exceptional items 5.0 4.3
Deferred taxation on exceptional items 0.3 –
T otal taxation charge for the year 34.9 25.6
Financial Reporting Standard 19 Deferred T ax (“FRS 19”) has been adopted
for the first time in these accounts. FRS 19 requires that deferred tax be
recognised in respect of all timing differences that have originated but not
reversed by the balance sheet date. The Group’ s previous policy was to
recognise deferred tax to the extent that a deferred tax liability was expected
to arise in the foreseeable future. This change has been accounted for as a
prior year adjustment and previously reported figures have been restated
accordingly .
The impact of adopting the new policy on the results for the year ended
31 December 2002 is to reduce profit after tax by £3.3m (2001: £8.2m reduction).
The cumulative effect on reserves at 1 January 2001 is a reduction of £7.2m
which has been accounted for as a prior year adjustment (31 December 2001:
£15.5m reduction). 35 Novar annual report 2002
7 Earnings per Ordinary share
2001
As 
2002 restated
£m £m
Earnings
Profit/(loss) for the financial year 37.2 (31.6)
Dividends – non equity shares (10.6) (10.6)
Earnings after goodwill amortisation and exceptional items 26.6 (42.2)
Goodwill amortisation 23.1 22.3
Exceptional items (post tax) (1.9) 34.5
Earnings before goodwill amortisation and post tax
exceptional items 47.8 14.6
Number Number
Weighted average number of Ordinary shares in issue
Basic 411.4m 431.3m
Equivalent number of potential dilutive shares 
at full consideration 0.4m –
Adjusted number of Ordinary shares (diluted) 411.8m 431.3m
2001
As
2002 restated
Earnings per Ordinary share (basic) Pence Pence
Before goodwill amortisation and post tax exceptional items 11.6 3.4
Goodwill amortisation (5.6) (5.2)
Exceptional items (post tax) 0.5 (8.0)
After goodwill amortisation and exceptional items 6.5 (9.8)
Earnings per Ordinary share (diluted)
After goodwill amortisation and exceptional items 6.5 (9.8)
The 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 T rust and the Novar Performance Partnership
Plan Share T rust. Earnings are the same in the calculation of the basic and
diluted earnings per share.
8 Dividends
2002 2001
£m £m
Equity shares
– Interim Ordinary dividend of 2.90p paid (2001: 2.90p) 11.9 12.5 
– Final Ordinary dividend of 6.60p proposed (2001: 6.60p) 27.0 26.9
38.9 39.4
Non equity shares
– Convertible Preference dividend paid and accrued
of 7.25p (2001: 7.25p) 10.6 10.6
– ‘B’ share dividend paid and accrued of 3.22p (2001: 4.36p) – –
49.5 50.0
9 Intangible fixed assets
Goodwill 
£m 
Cost:
At 1 January 2002 438.0
Currency translation (5.5)
Acquisitions 8.4
At 31 December 2002 440.9
Amortisation:
At 1 January 2002 37.1
Currency translation (1.2)
Provided during the year 22.1
At 31 December 2002 58.0
Net book value
At 31 December 2002 382.9
At 1 January 2002 400.9
10 Tangible fixed assets
Land and buildings Plant
Short mach-
Long lease- Motor Fixtures inery Group
Freehold lease hold vehicles & fittings & tools total
£m £m £m £m £m £m £m
Cost or valuation:
At 1 January 2002 90.0 13.4 11.0 7.7 47.7 466.6 636.4
Currency translation (6.5) – (0.8) (0.2) (1.8) (26.3) (35.6)
Additions 1.1 – 2.7 0.2 6.8 30.6 41.4
Disposals (12.7) – (0.4) (2.4) (2.1) (6.9) (24.5)
Acquisitions
of businesses – – – – 0.2 1.4 1.6
At 31 December 2002 71.9 13.4 12.5 5.3 50.8 465.4 619.3
Depreciation:
At 1 January 2002 8.2 7.0 5.8 6.4 43.5 262.8 333.7
Currency translation (0.6) – (0.5) (0.2) (1.2) (14.8) (17.3)
Charge for the year 2.8 0.2 1.0 0.7 7.8 44.1 56.6
Impairments charged/
(reversed) in the year – – – – 0.1 (0.3) (0.2)
Disposals (1.3) – (0.4) (2.1) (1.8) (6.3) (11.9)
At 31 December 2002 9.1 7.2 5.9 4.8 48.4 285.5 360.9
Net book value
At 31 December 2002 62.8 6.2 6.6 0.5 2.4 179.9 258.4
At 1 January 2002 81.8 6.4 5.2 1.3 4.2 203.8 302.7
The net book value at historical cost of freehold and long leasehold land and
buildings was £66.7m (2001: £85.9m). On a historic cost basis the accumulated
depreciation thereon would have been £80.0m (2001: £78.9m). 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 (2001: £nil).
The net credit of £0.2m in respect of impairment of fixed assets is made up of
charges of £1.6m less a £1.8m reversal of charges made in the prior year arising
from changes in the planned use of the fixed assets.
The fixed assets of the Company, which are predominantly fixtures and fittings,
at cost and valuation of £4.4m (2001: £4.4m) and aggregate depreciation of
£3.8m (2001: £3.7m) are included above. During the year additions at cost
totalled £0.2m, depreciation of £0.3m was charged and the net book value of
disposals was £nil.
At 31 December 2002 the Group had outstanding capital commitments
contracted but not provided for of £1.4m (2001: £15.4m). The Company had no
outstanding capital commitments at 31 December 2002 (2001: £nil). 
11 Investments
2002 2001
Group: investment in joint venture £m £m
At 1 January 1.0 –
Share of joint venture’ s loss before taxation (1.2) (0.6)
Acquisitions 4.0 1.6
Loans advanced 1.3 –
Currency translation (0.3) –
At 31 December 4.8 1.0
Group: investment in associated undertakings
At 1 January 49.1 1.7
Share of associates’ profit before taxation 5.5 4.4
Share of associates’ taxation (1.6) (1.2)
Share of associates’ minority interest (0.1) –
Goodwill amortisation (1.0) (0.5)
Acquisitions 7.3 45.3
Divestment (1.9) (0.2)
Deemed disposal (0.5) –
Dividend received (1.6) (0.4)
Currency translation (6.4) –
At 31 December 48.8 49.1
Investment in joint venture and associated undertakings 53.6 50.1
Group: investment in Employee Share 
Ownership Plan (ESOP) 39.0 36.2
92.6 86.3 36 Novar annual report 2002
Notes to the accounts continued
11 Investments continued
Group: investment in joint venture and associated undertakings
Investment in joint venture
During the year £5.3m of further investment was made in respect of existing
joint venture interests, of which £4.0m was by way of equity share subscription
and £1.3m by way of loans advanced.
The carrying value of investments in joint venture at 31 December 2002 of
£4.8m included share of gross assets of £1.7m (2001: £0.3m), share of gross
liabilities of £1.5m (2001: £0.3m), loans of £1.3m (2001: £nil) and equity
advances of £3.3m (2001: £1.0m).
Investment in associated undertakings
On 1 August 2002 the Group acquired a 25% interest in the equity of the
German company ZN T echnologies AG. The total cash consideration,
including costs, was £3.9m. The provisional capitalised goodwill on this
investment is £3.9m and this is being amortised in the profit and loss account
over 20 years. During the year ended 31 December 2002 the Group’ s share of
operating losses before goodwill amortisation from this acquisition was £0.2m.
During the year £3.4m of further equity investment was made in respect of
existing associated undertakings.
The carrying value of investments in associated undertakings at 31 December
2002 of £48.8m included a net book value of capitalised goodwill of £20.6m
(2001: £20.2m), share of net assets £28.2m (2001: £28.3m) and loans of £nil
(2001: £0.6m).
Group: investment in Employee Share Ownership Plan (ESOP)
This investment represents 22,085,786 Ordinary shares of the Company and
comprise 20,552,316 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 Performance Partnership Plan
respectively. The dividend rights in respect of these shares have been waived.
The costs of the Trusts are charged to the profit and loss account as they
accrue. The market value of the shares at 31 December 2002 was £24.0m
(2001: £24.2m).
Subsidiary 
undertakings
Company: investment in subsidiary ESOP Shares Loans T otal
undertakings and ESOP £m £m £m £m
At 1 January 2002 36.2 793.8 1,218.6 2,048.6
Additions 3.8 – 80.3 84.1
Disposals (1.0) – – (1.0)
Currency translation – (7.5) 2.1 (5.4)
At 31 December 2002 39.0 786.31,301.02,126.3
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.
12 Stocks
2002 2001
Group Group
£m £m
Raw materials and consumables 36.1 34.6
Work in progress 12.7 15.1
Finished goods 45.5 44.5
94.3 94.2
The replacement cost of stock is not materially different from its book value.
The Company held no stocks at 31 December 2002 (2001: £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 £3.3m (2001: £15.3m).
13 Debtors
2001
Group 2002 2001
2002 As Com- Com-
Group restated pany pany
£m £m £m £m
Amounts falling due within one year:
Trade debtors 171.2 162.5 0.3 0.3
Amounts owed by subsidiary undertakings – – 2.4 29.5
Amounts owed by associated undertakings 0.5 0.4 – –
Other debtors 37.5 24.8 15.5 2.6
Prepayments and accrued income 23.4 26.0 0.7 4.4
Corporation tax – – 2.7 3.0
Deferred tax asset 0.2 2.2––
232.8 215.9 21.6 39.8
Amounts falling due after more than one year:
Other debtors 9.7 11.7 3.5 3.0
Prepayments and accrued income 8.5 10.3 – –
18.2 22.0 3.5 3.0
The movement in the year in respect of the deferred tax asset is entirely due
to a charge to the profit and loss account.
14 Cash at bank and in hand
At 31 December 2002, the Group held cash balances of £41.8m (2001: £48.4m)
all of which was held in current accounts. The interest and currency profile of
these balances are set out in note 17.
15 Creditors – amounts falling due within one year
2002 2001
2002 2001 Com- Com-
Group Group pany pany
a) Borrowings £m £m £m £m
Bank borrowings and overdrafts 46.2 2.4 144.2 92.9
Loan notes 0.3 1.7 – –
Other loans 0.3 – – –
46.8 4.1 144.2 92.9
The interest rate, currency and maturity profiles of borrowings are set out in
note 17.
2002 2001
2002 2001 Com- Com-
Group Group pany pany
b) Other creditors £m £m £m £m
Trade creditors 87.8 95.6 2.5 1.1
Amounts due to subsidiary undertakings – – 4.8 4.3
Amounts due to associated undertakings 0.6 0.3 – –
Other creditors 55.9 52.3 5.7 5.1
Accruals and deferred income 31.8 23.8 10.2 3.1
Interest payable 4.7 5.6 0.1 5.6
Corporation tax 41.6 28.9 – –
Valued added tax, payroll tax and 
social security 6.6 9.8 0.6 0.2
Dividends proposed and accrued 27.8 28.0 27.8 28.0
256.8 244.3 51.7 47.4
16 Creditors – amounts falling due after more than one year
2002 2001
2002 2001 Com- Com-
Group Group pany pany
a) Borrowings £m £m £m £m
Bank borrowings 1.4 81.0 – 79.0
Loan notes 208.4 231.8 – –
Other loans repayable after five years 
– other than by instalments 3.7 4.1 – –
213.5 316.9 – 79.0
The interest rate, currency and maturity profiles of borrowings are set out in
note 17. 37 Novar annual report 2002
16 Creditors – amounts falling due after more than one year continued
2002 2001
2002 2001 Com- Com-
Group Group pany pany
b) Other creditors £m £m £m £m
Amounts due to subsidiary undertakings – – 1,152.7 1,021.8
Other creditors 5.0 4.6 – –
Accruals and deferred income 19.4 1.1 12.2 –
24.4 5.7 1,164.9 1,021.8
17 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, 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. The Group uses
derivatives to manage commodity price risk. Such derivatives are excluded from the disclosures set out below to the extent that they are settled by cash.
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:
2002 2001
Group Group
Currency profile: £m £m
US dollars 4.1 25.0
Euro 21.6 13.5
Sterling 1.4 2.5
Other 14.7 7.4
41.8 48.4
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 2002 was:
Forward Analysed as:
Floating Fixed foreign Effective Floating Fixed 2002 2001
rate rate exchange currency rate rate Non equity Group Group
borrowings borrowings contracts borrowings borrowings borrowings shares T otal T otal
£m £m £m £m £m £m £m £m £m
US dollars 3.7 208.1 140.1 351.9 165.5 186.4 – 351.9 413.7
Canadian dollars 3.4 – 44.0 47.4 47.4 – – 47.4 49.7
Euro 41.8 2.4 161.2 205.4 203.0 2.4 – 205.4 190.9
Sterling 0.6 – (345.3) (344.7) (344.7) – 147.0 (197.7) (185.8)
Other – 0.3 – 0.3 – 0.3 – 0.3 –
49.5 210.8 – 260.3 71.2 189.1 147.0 407.3
2001 82.7 238.3 – 321.0 314.0 7.0 147.5 468.5
The Group’ s borrowings at 31 December 2002 were principally US$ fixed rate liabilities, which were converted as shown above through interest rate and
currency swaps, and Euro floating rate liabilities. The fixed rate borrowings had a weighted average interest rate of 8.3%.
c) Currency risk profile
The currency profile of the Group’ s net assets as at 31 December 2002 was:
Operating T ax, dividends Forward 2001
assets by and other foreign 2002 Net
currency of corporate Intangible exchange Net assets
operations items assets Net debt contracts assets As restated
£m £m £m £m £m £m £m
US dollars 233.6 (14.3) 129.3 (207.7) (140.1) 0.8 (11.2)
Canadian dollars 50.4 (8.1) 0.3 (3.4) (44.0) (4.8) (4.6)
Euro 28.6 (2.2) 159.9 (22.6) (161.2) 2.5 0.6
Sterling 94.6 (88.0) 93.4 0.8 345.3 446.1 481.0
Other 19.8 (0.5) – 14.4 – 33.7 28.3
427.0 (113.1) 382.9 (218.5) – 478.3
2001 (as restated) 430.8 (65.0) 400.9 (272.6) – 494.1
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 gains or losses that would be recognised in the profit and loss account. 38 Novar annual report 2002
Notes to the accounts continued
17 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 2002 were:
Gains Losses T otal
£m £m £m
Gains and losses arising in previous years, 
recognised in 2002 0.3 – 0.3
Gains and losses unrecognised at 31 December 2002 – (1.1) (1.1)
of which:
Gains and losses expected to be recognised in the 
profit and loss account in 2003 – (1.1) (1.1)
The gains and losses on forward metal contracts used for hedging metals
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 2002 were as follows:
Gains Losses T otal
£m £m £m
Gains and losses arising in previous years, 
recognised in 2002 0.3 (1.9) (1.6)
Gains and losses unrecognised at 31 December 2002 0.5 (1.3) (0.8)
of which:
Gains and losses expected to be recognised in 
the profit and loss account in 2003 0.5 (1.3) (0.8)
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 2002 was as follows:
Bank
US$ loans Other Non- 2002 2001
senior & over- borro- equity Group Group
notes drafts wings shares T otal T otal
£m £m £m £m £m £m
Less than one year – 46.2 0.6 – 46.8 4.1
Between one and two years – 1.0 0.3 – 1.3 81.5
Between two and five years 83.9 0.4 – 147.0 231.3 147.5
After five years 124.2 – 3.7 – 127.9 235.4
208.1 47.6 4.6 147.0 407.3
2001 231.3 83.4 6.3 147.5 468.5
The $335m senior notes issued in July 2000 are divided into three tranches
of $135m, $85m and $115m. 
The tranches bear interest at fixed rates of 8.23%, 8.28% and 8.35% and are
repayable in 2007, 2008 and 2010 respectively. The weighted average maturity
of the senior notes is 5.8 years.
f) Borrowing facilities
At 31 December 2002 the Group had undrawn committed borrowing facilities
available to it, in respect of which all conditions precedent had been met,
as follows:
2002 2001
£m £m
Expiring within one year 153.2 150.0
Expiring between one and two years 15.0 141.0
Expiring between two and five years 30.0 30.0
198.2 321.0
g) Fair value of financial instruments
Fair value is defined as the amount at which a financial instrument could be
exchanged in an arm’ s length transaction between informed and willing parties
and is calculated by reference to prevailing market rates. As at 31 December
2002 the only financial instruments where there were significant differences
between the book value and the fair value comprised currency and interest
rate contracts, fixed rate senior notes and non equity shares. The fair value of
these financial instruments compared to their book value is set out below.
17 Financial Instruments continued
The senior notes are not publicly traded. The fair value attributed to them
below is an estimate of their value assuming a private transaction between
willing parties at a date close to 31 December 2002.
2002 2001 2002 2001
Book Book Fair Fair
value value value value
£m £m £m £m
Foreign currency swap and forward contracts 
held to manage interest rate and currency risk 5.4 5.5 6.6 24.5
Commodity contracts – – (0.8) (1.6)
Foreign currency forward contracts held to 
hedge transactional currency exposure – – (1.1) 0.3
Non equity shares (147.0) (147.5) (142.6) (151.1)
US$ senior notes (208.1) (231.3) (236.1) (248.8)
18 Provisions for liabilities and charges
Pensions Deferred
and similar consider- Restruct- Deferred
Group obligations ation uring tax Property Other T otal
(as restated) £m £m £m £m £m £m £m
At 1 January 2002 42.0 6.5 17.3 16.6 2.4 20.5 105.3
Reclassification (1.7) –––– 2.2 0.5
Currency translation 1.0 (0.5) – (1.9) – (0.4) (1.8)
Acquisitions – 
deferred consideration – 2.5–––– 2.5
Charge to profit & 
loss account: 6.8 – 18.4 3.3 – 5.0 33.5
Released to profit & 
loss account – – – – – (2.5) (2.5)
Utilised in the year: 
cash (2.6) (1.0) (24.5) – (0.4) (6.1) (34.6)
Non cash movements (0.1) – (1.6) – – – (1.7)
At 31 December 2002 45.4 7.5 9.6 18.0 2.0 18.7 101.2
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 medical schemes. The Group’ s pension arrangements are
fully described in note 21.
Deferred consideration has arisen on acquisitions made in 2001 and 2002,
and represents the estimate of the future consideration payable should
certain performance targets be met. The provision at 31 December 2002 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 2002 is expected to
be utilised by the end of 2004.
The elements of the provided deferred tax assets (included within debtors) and
the deferred tax liability shown above, are set out below:
2001
As
2002 restated
Deferred tax £m £m
Deferred tax asset
– Accelerated capital allowances 1.0 0.2
– Other timing differences (1.2) (2.4)
(0.2) (2.2)
Deferred tax liability
– Accelerated capital allowances 17.5 16.6
– Other timing differences 0.5 –
18.0 16.6
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. 39 Novar annual report 2002
18 Provisions for liabilities and charges continued
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 they will
reverse in the future.
Some of the Group’ s operations have generated tax losses in 2002 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 £31.3m.
No provision has been made for deferred tax assets of £2.0m in respect
of accelerated capital allowances and £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. There is
no provided deferred taxation in respect of the Company (2001: £nil).
19 Share Capital
2002 2001
Allotted, Allotted,
2002 called up 2001 called up
Auth- and fully Auth- and fully
a) Nominal value orised paid orised paid
of shares ££ ££
Equity shares – Ordinary shares of 27
7
⁄9p each:
217,000,000 119,588,944 217,000,000 119,470,198
Non equity shares – 7.25p Convertible Cumulative Redeemable 
Preference shares of 16
2
⁄3p each:
27,000,000 24,285,852 27,000,000 24,291,714
Non equity shares – ‘B’ shares of £1 each:
180,000,000 387,319 180,000,000 512,882
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 from 2003 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, subject to the requirements of
the Companies Act, redeem on 31 August 2005 all outstanding Preference
shares 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.
19 Share Capital continued
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 at 
any time may 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 2002 430,092,713 145,749,301 512,882
Exercise of savings related 
share options 412,521 – –
Conversion of Convertible 
Cumulative Redeemable 
Preference Shares 14,965 (35,170) –
Redemption of ‘B’ Shares – – (125,563)
At 31 December 2002 430,520,199 145,714,131 387,319
c) Executive Share Option Schemes
At 31 December 2002, 33,557,818 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:
Number Exercise
Date of grant of shares price pence
6 May 1994 187,104 341.0
30 September 1994 118,323 280.0
19 April 1995 479,318 256.3
15 April 1996 697,242 221.3
15 April 1997 807,078 249.0
14 November 1997 989,011 182.0
15 April 1998 643,018 190.0
15 April 1998 2,743,900 208.0–222.0
16 March 1999 3,292,053 136.0
10 August 1999 5,077,594 183.0–200.0
6 December 1999 144,606 183.0–200.0
14 March 2000 4,383,996 124.0
11 April 2000 94,037 143.0
17 May 2000 257,234 155.5
4 September 2000 157,657 178.0
16 March 2001 4,969,048 167.0
11 September 2001 321,419 143.0
24 September 2001 349,809 131.5
13 March 2002 7,691,761 151.0
10 September 2002 153,610 115.5
Shares vesting under options granted since 15 April 1997 are to be sourced 
out of the Novar Employee Trust. At 31 December 2002 the Trust held a total 
of 20,552,316 shares.
The options are normally exercisable between three and ten years after the
options were granted. The weighted average exercise price is 165.7p. 40 Novar annual report 2002
Notes to the accounts continued
19 Share Capital continued
d) Savings Related Share Option Schemes
At 31 December 2002, 3,564,801 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:
Number Exercise
Date of grant of shares price pence
24 May 1995 65,050 203.2
24 May 1996 6,360 196.0
12 May 1997 21,457 246.5
13 May 1998 167,449 151.6
18 June 1999 742,522 108.8
12 April 2000 1,227,103 99.2
11 April 2001 592,539 136.4
9 April 2002 742,321 124.8
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 118.1p.
20 Reserves
Profit
Capital and loss
Share redem- Reval- account T otal
premium ption uation As As
account reserve reserve restated restated
a) Group £m £m £m £m £m
At 1 January 2002 (as previously 
reported) 11.6 26.5 2.3 324.7 365.1
Prior year adjustment (note 6) – – – (15.5) (15.5)
At 1 January 2002 (as restated) 11.6 26.5 2.3 309.2 349.6
Net currency translation (net of tax) – – – (4.5) (4.5)
Share issues 0.4 – – (0.1) 0.3
Redemption of share capital – 0.1 – (0.1) –
Loss on deemed disposal – – – (0.5) (0.5)
Retained loss for the year – – – (12.3) (12.3)
At 31 December 2002 12.0 26.6 2.3 291.7 332.6
The movement on the profit and loss account arising from share issues
represents the difference between the market value and the exercise price 
of shares issued during the year to the Novar Qualifying Employee Share
Ownership Trust to satisfy the exercise of savings related share options.
At 31 December 2002, the cumulative amount of goodwill written off to 
reserves amounted to £437.2m (2001: £437.2m).
Capital
Share redem- Profit
premium ption Other and loss
account reserve reserves account T otal
b) Company £m £m £m £m £m
At 1 January 2002 11.6 26.5 178.5 490.1 706.7
Share issues 0.4––– 0.4
Redemption of share capital – 0.1 – (0.1) –
Retained loss for the year – – – (61.0) (61.0)
At 31 December 2002 12.0 26.6 178.5 429.0 646.1
A separate profit and loss account for the Company has not been presented 
as permitted by Section 230 of the Companies Act 1985. The amount of the
consolidated profit for the financial year dealt with in the accounts of the
Company is a loss of £34.3m (2001: profit of £64.6m) before deducting dividends.
21 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.
21 Retirement benefits continued
The total pension and other post-retirement benefit costs charged in the year
ended 31 December 2002 were £13.3m (2001: £7.6m). The charge in the UK was
£4.1m (2001: £0.3m), and the balance was in respect of overseas arrangements.
As at 31 December 2002 the Group held the following assets and liabilities in
respect of pensions and other post-retirement benefits:
2002 2001
£m £m
Debtors – amounts falling due after more than one year 8.7 9.3
Creditors – amounts falling due within one year (1.8) –
Provisions for liabilities and charges (45.4) (42.0)
(38.5) (32.7)
The Group’ s pension cost for 2002 has been based on updated actuarial
advice based on the position as at 31 December 2001. 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 7.00 7.50 7.00 6.00
– post-retirement 6.00 7.50 7.00 6.00
Increase in pensionable pay 3.50 4.50 3.50 3.00
Increase in pensions in payment 2.50 – – 2.25
United Kingdom
The UK pension costs relating to defined benefit pension plans have been
determined in accordance with the advice of professionally qualified
independent consulting actuaries using the projected unit method. The costs
for 2002 have been calculated based on updated valuations as at 31
December 2001. The results of those valuations showed that the combined
market value of the UK pension plan assets was £451.9m. The market value of
those assets represented approximately 114% 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 market values as at 31 December 2002 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 2002 was £3.7m
(2001: £nil).
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
£0.4m (2001: £0.3m).
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 2002. The results
of those valuations showed that the combined market value of the US
defined benefit pension plan assets was approximately £49m at 31 December
2001. This represents approximately 82% 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 2002 was £1.5m
(2001: £0.3m). The market values as at 31 December 2002 of the assets of the
US defined benefit plans are set out in the FRS 17 disclosures below. 41 Novar annual report 2002
21 Retirement benefits continued
In Canada, the Group has defined benefit pension plans. The latest actuarial
reviews were carried out for the purpose of calculating pension costs in 2002.
The results of those valuations showed that the combined market value of the
Canadian defined benefit pension plan assets was £19m at 31 December
2001. This represents approximately 126% 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 credit for the Canadian pension plans for 2002 was £0.1m (2001:
charge of £0.1m). The market values as at 31 December 2002 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 2002 was £4.7m (2001: £5.2m).
The Group also has exposure to a post-retirement benefit plan in the USA. 
The charge for this arrangement in the year was £0.3m (2001: £0.4m).
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 2001 for the purpose of
estimating the pension cost in 2002. 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 £23.9m. The charge in the year was £2.2m (2001: £1.4m).
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
£0.6m (2001: credit of £0.1m). 
Given the recent continued decrease in asset values, it is likely that the
Group’ s pension costs charged to the profit and loss account in accordance
with SSAP 24 will increase in 2003.
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 December 2001 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 2002.
The major assumptions used in determining the FRS 17 disclosures are as follows:
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
21 Retirement benefits continued
On full compliance with FRS17, 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 2002 are set out below:
North
UK America Europe Group
Total charge to operating profit £m £m £m £m
Current service cost (8.1) (3.0) (0.7) (11.8)
Past service cost – (0.8) – (0.8)
T otal charge to operating profit (8.1) (3.8) (0.7) (12.6)
Finance income/(expense)
Expected return on scheme assets 31.8 5.8 – 37.6
Interest on plan liabilities (26.8) (5.9) (1.5) (34.2)
Net credit/(charge) to finance income 5.0 (0.1) (1.5) 3.4
Charge before taxation (3.1) (3.9) (2.2) (9.2)
Consolidated statement of total recognised gains and losses
Actual return less expected return on
scheme assets (135.2) (15.3) – (150.5)
Experience gains and losses arising on the
scheme liabilities 3.4 (1.8) 0.9 2.5
Changes in assumptions underlying the 
present value of the scheme liabilities (0.3) (9.5) (0.4) (10.2)
Actuarial (loss)/gain recognisable in
consolidated statement of total
recognised gains and losses (132.1) (26.6) 0.5 (158.2)
%%%%
Difference between the expected and 
actual return on scheme assets expressed 
as a percentage of the scheme assets: (36.5) (31.6) n/a (35.9)
Experience gains and losses on scheme
liabilities expressed as a percentage of the
scheme liabilities: 0.7 (2.1) 3.4 0.4
T otal amount recognised in statement of total
recognised gains and losses expressed as a
percentage of the scheme liabilities: (25.9) (30.4) 1.9 (25.4)
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) 42 Novar annual report 2002
Notes to the accounts continued
21 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 during the year is as follows:
North
UK America Europe T otal
£m £m £m £m
Deficit in the schemes at beginning of the year (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 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 end of the year (138.3) (39.1) (26.5) (203.9)
2001
As
2002 restated
Net assets £m £m
Net assets 478.3 494.1
Exclude existing SSAP 24 pension liability (net of deferred tax) 35.0 28.5
513.3 522.6
FRS 17 net pension liability (net of deferred tax) (188.0) (32.8)
Net assets including FRS 17 
pension liability (net of deferred tax) 325.3 489.8
2001
As
2002 restated
Reserves £m £m
Shareholders’ funds 476.9 493.9
Exclude existing SSAP 24 pension liability (net of deferred tax) 35.0 28.5
511.9 522.4
FRS 17 net pension liability (net of deferred tax) (188.0) (32.8)
Shareholders’ funds including FRS 17 
pension liability (net of deferred tax) 323.9 489.6
22 Contingent liabilities
2002 2001
2002 2001 Com- Com-
Group Group pany pany
£m £m £m £m
Guarantees 3.5 5.7 – –
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.
23 Annual commitments under operating leases
2002 2002 2001 2001
Plant & Land & Plant & Land & 
mach- build- mach- build-
inery ings inery ings
Group £m £m £m £m
Leases expiring
– Within one year 1.6 1.9 1.6 2.3
– Between one and five years 9.3 4.2 7.7 4.2
– After more than five years 2.6 5.0 2.4 5.8
13.5 11.1 11.7 12.3
24 Consolidated cash flow statement
2002 2001 2001
Cont- Cont- Discont-
inuing inuing inued
a) Reconciliation of operating profit/(loss) activities activities activities
to operating cash flow £m £m £m
Operating profit/(loss) 74.6 48.5 (6.6)
Depreciation of fixed assets 56.6 56.6 1.3
Amortisation of goodwill 22.1 21.2 0.6
153.3 126.3 (4.7)
Decrease in stocks 1.5 17.3 0.9
(Increase)/decrease in debtors (16.9) 31.5 1.7
Decrease in creditors (18.1) (27.9) (0.1)
Other movements (0.2) 9.3 –
Net cash inflow/(outflow) from operating activities 119.6 156.5 (2.2)
2002 2001
b) Returns on investments and servicing of finance £m £m
Non equity dividends (10.6) (10.6)
Interest received 0.6 2.4
Interest paid (17.0) (20.0)
Returns on forward foreign exchange contracts 22.8 0.6
Dividends paid to minority interests (0.1) –
Proceeds from close out of currency and interest rate swaps 23.0 –
18.7 (27.6)
During the year the Group closed out a number of interest rate and currency 
swaps, realising £23.0m of cash. The deferred income arising is being spread
over the remaining life of the swaps to which they related. 
2002 2001
c) Net (decrease)/increase in debt £m £m
Debt due within one year 39.5 (1.3)
Debt due after more than one year (86.0) 78.9
(46.5) 77.6
Move-
ment Ex- At
At in cash change 31 Dec-
1 January and Acquisi- move- ember
2002 debt tions ment 2002
d) Analysis of net debt £m £m £m £m £m
Cash at bank and in hand 48.4 (5.3) (1.3) 41.8
Overdrafts (1.5) (2.0) 0.1 (3.4)
46.9 (7.3) (1.2) 38.4
Debt due within one year (2.6) (39.5) (1.2) (0.1) (43.4)
Debt due after one year (316.9) 86.0 – 17.4 (213.5)
(319.5) 46.5 (1.2) 17.3 (256.9)
Net debt (272.6) 39.2 (1.2) 16.1 (218.5) 43 Novar annual report 2002
25 Acquisitions
Fair value of
Consideration (assets)/liabilities
and costs acquired Goodwill
£m £m £m
Acquisitions in the year 8.4 (0.6) 7.8
Adjustments to prior year acquisitions 0.5 0.1 0.6
T otal 8.9 (0.5) 8.4
Of the total consideration and costs of £8.9m, £2.5m is deferred. In addition
to the consideration above, expenditure of £1.0m was made in the year in
respect of acquisitions made in earlier years and for which provision was
made in the prior years’ financial statements.
During the year ended 31 December 2002 the acquisitions contributed
turnover of £7.9m and operating profit of £0.9m, which included goodwill
amortisation of £0.1m, to Intelligent Building Systems. The contribution to cash
flow from operating activities was a £0.1m outflow, and capital expenditure
was £0.3m. The impact on other cash flow headings was not material.
The adjustments to prior year acquisitions represents £0.5m in respect of
additional costs, and a £0.1m decrease in the fair value of net current
assets acquired.
Acquisitions in the year
On 1 April 2002 the Group acquired 51% of the share capital of the German
company Jans Sicherheitssysteme GmbH for a total cash consideration,
including costs, of £1.3m. In addition, overdrafts assumed were £0.2m. The
provisional capitalised goodwill on this acquisition is £1.1m and this is being
amortised in the profit and loss account over 20 years. Subsequent to the
year end, as permitted under the original purchase agreement, the Group
purchased the remaining 49% of the share capital for an initial cash
consideration of £1.9m with up to a further £1.0m of deferred consideration.
On 16 August 2002 the Group acquired 100% of the share capital of the UK
company visiOprime Limited for a total cash consideration, including costs, of
£4.8m, which included £2.2m of deferred consideration. The provisional
capitalised goodwill on this acquisition is £4.9m and this is being amortised in
the profit and loss account over 20 years.
On 4 December 2002 the Group acquired 100% of the share capital of the
Eire company Calvari Limited for a total cash consideration, including costs, of
£1.8m. In addition, overdrafts assumed were £0.2m. The provisional
capitalised goodwill on this acquisition is £1.4m and this is being amortised in
the profit and loss account over 20 years.
An acquisition of the remaining minority interest of a prior year acquisition
was made during the year for a total consideration, including costs, of £0.5m,
which included £0.3m of deferred consideration. The provisional capitalised
goodwill on this acquisition is £0.4m and this is being amortised in the profit
and loss account of over 20 years.
The total book value of the net assets of the acquisitions in the year which
included £1.2m of loans, amounted to £1.0m. After downward fair value
adjustments of £0.4m mainly in respect of accounting policy alignments, the
provisional fair value to the Group of the acquired assets was £0.6m.
In addition to the acquisitions in the year above, from the beginning of the
year, a 51% equity interest in Saudi Ega Limited which had previously been
accounted for as an associated undertaking was accounted for as a subsidiary
undertaking as dominant control had been achieved. The net assets brought
into the Group’ s consolidated balance sheet were £0.9m, which comprised
fixed assets of £0.8m, £0.6m of cash in hand, £0.3m of other net current assets
less £0.8m of minority interests.
26 Post balance sheet events
On 26 February 2003 the Group announced its acquisition of the US based
Alerton T echnologies Inc. for cash consideration of £38m.
27 Foreign currencies
2002 2001
Profit 2002 Profit 2001
and loss Balance and loss Balance
account Sheet account Sheet
Average Closing Average Closing 
rates rates rates rates
US dollar 1.50 1.61 1.44 1.45
Canadian dollar 2.36 2.54 2.23 2.31
Euro 1.59 1.53 1.61 1.64
28 Related party transactions
During the year the Group made purchases of £4.5m (2001: £2.5m) from
its associated undertaking, Asia Aluminum Group. The amount due to Asia
Aluminum Group at 31 December 2002 was £0.6m (2001: £0.2m). 
The amount due from other associated undertakings was £0.5m (2001: £0.4m). 44 Novar annual report 2002
Notes to the accounts continued
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
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
Innovex Controls Inc.
††
Intelligent electronic controls USA
Brand–Rex Limited Data cable and accessories England
Albert Ackermann GmbH & Co. KG Cable management and data communications products Germany
Indalex Aluminum Solutions
Indalex*/** Extrusion, finishing and fabrication of aluminum products USA/Canada
Mideast Aluminum* Extrusion, finishing and fabrication of aluminum products USA
Indal T echnologies Inc.
†
Manufacture of precision engineering parts and systems Canada
Indalloy** Aluminum recycling and billet casting Canada
Brampton Foundries Limited
†
Manufacture of aluminum castings 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 Novar Investments (Canada) Inc. (the principal Canadian holding company)
†
subsidiary of Novar Investments (Canada) Inc (the principal Canadian holding company)
††
subsidiary of Novar Holdco Inc (the principal US holding company) 45 Novar annual report 2002
Financial summary
Profit and loss accounts
2001
2002 As restated 2000 1999 1998
for the year ended 31 December £m £m £m £m £m
Turnover
Continuing operations 1,448.2 1,469.4 1,408.4 914.2 738.3
Discontinued operations – 12.7 336.1 518.4 840.7
1,448.2 1,482.1 1,744.5 1,432.6 1,579.0
Group operating profit before goodwill amortisation and exceptional items
Continuing operations
– before restructuring and goodwill amortisation 116.6 117.8 162.0 117.7 96.0
– restructuring (18.4) (48.1) (20.7) (7.7) (12.1)
98.2 69.7 141.3 110.0 83.9
Share of operating profits of joint ventures and associated undertakings 
before goodwill amortisation 5.4 4.3 0.8 1.2 1.2
T otal operating profit before goodwill amortisation and exceptional items
– continuing operations 103.6 74.0 142.1 111.2 85.1
Net interest (10.0) (16.5) (26.0) (7.8) (5.4)
93.6 57.5 116.1 103.4 79.7
T otal operating profit before goodwill amortisation and exceptional items 
– discontinued operations – (6.0) 36.5 29.4 35.5
Profit before goodwill amortisation and exceptional items 93.6 51.5 152.6 132.8 115.2
Goodwill amortisation (23.1) (22.3) (15.9) (2.4) (0.1)
Profit before exceptional items 70.5 29.2 136.7 130.4 115.1
Exceptional items 2.2 (35.1) 48.9 (104.8) (249.2) 
Profit/(loss) on ordinary activities before taxation 72.7 (5.9) 185.6 25.6 (134.1)
T axation on profit/(loss) on ordinary activities (34.6) (26.2) (53.0) (46.8) (43.0)
T axation on exceptional items (0.3) 0.6 – 7.3 (3.5)
Profit/(loss) after taxation 37.8 (31.5) 132.6 (13.9) (180.6)
Earnings per Ordinary share (basic)
Before goodwill amortisation and exceptional items 11.6p 3.4p 20.0p 16.8p 12.2p
After goodwill amortisation and exceptional items 6.5p (9.8)p 27.4p (5.5)p (39.1)p
Balance sheets
2001 2000
2002 As restated As restated 1999 1998
at 31 December £m £m £m £m £m
Intangible assets 382.9 400.9 362.9 117.3 4.2
T angible assets 258.4 302.7 318.8 351.7 461.5
Investments 92.6 86.3 38.3 42.5 34.9
Working capital 88.5 87.8 73.2 47.4 56.8
Net (debt)/cash (5.0) 44.3 119.1 (19.3) 63.9
T otal assets less current liabilities 817.4 922.0 912.3 539.6 621.3
Creditors due after more than one year
– Bank and other loans (213.5) (316.9) (228.3) (70.1) (170.0)
– Other creditors (24.4) (5.7) (2.5) (3.8) (4.0)
– Provision for liabilities and charges (101.2) (105.3) (60.9) (59.2) (69.1)
Net assets 478.3 494.1 620.6 406.5 378.2
Goodwill written off 437.2 437.2 439.6 571.0 671.1
Note:
The 2001 Profit and Loss account and 2001 and 2000 Balance sheets only have been restated for FRS 19 Deferred T ax. 46 Novar annual report 2002
Notice of Annual General Meeting
The Annual General Meeting of Novar plc will be held at the Conference 
and Banqueting Centre, Church House, Dean's Yard, Westminster, London
SW1P 3NZ on Thursday, 22 May 2003 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 2002.
2. T o approve the Report on Directors’ Remuneration for the year ended
31 December 2002.
3. T o declare a final dividend for the year ended 31 December 2002 to be
paid on 6 June 2003.
4. T o reappoint as Directors:
(i) Sir Graham Hearne
(ii) Mr M J E McKeon
5. T o reappoint Deloitte & T ouche 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:
THAT , 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 £39,862,000 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 £5,979,000
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 22 May 2003 (or at any adjournment thereof)
of the Extraordinary Resolution No. 1 set out in the notice of that meeting
dated 8 April 2003, 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 43,050,000, having an aggregate nominal value of £11,958,300
and representing approximately 10% of the Company’ s issued Ordinary
share capital as at 26 March 2003;
(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 22 May 2003 (or at any adjournment thereof) of
the Extraordinary Resolution No. 2 set out in the notice of that meeting dated
8 April 2003, 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 21,600,000, having an aggregate nominal value of
£3,599,986 and representing approximately 14.9% of the Company’ s
issued Preference share capital as at 26 March 2003;
(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
8 April 2003 Weybridge
Surrey KT13 9UX
Notes
a. 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 22 May 2003 at the Company’ s
registered office and at the Annual General Meeting from 11.45am until the
conclusion of the Meeting. 
b. 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 form of proxy is enclosed. Instructions for use are
shown on the form. T o 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.
c. 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 8.
d. 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.
e. Between 26 February 2003 and 8 March 2003 (being one month prior to the date 
of the Notice), no changes occurred to any of the information provided in the Report
of the Directors save that a notification was received from Legal & General Investment
Management in which they advised that they had an interest in 13,043,435 shares,
being 3.02% of the issued Ordinary share capital of the Company. This information
is provided in accordance with the disclosure requirements of the Financial Services
Authority .
f. Deloitte & T ouche announced on 24 March 2003 its intention to transfer its entire
business to Deloitte & T ouche LLP , a limited liability partnership formed pursuant to
the Limited Liability Partnership Act 2000. The Company will be asked in due course to
give its consent, under the provisions of Section 26(5) of the Companies Act 1989, to
treat the appointment of Deloitte & T ouche as extending to Deloitte & T ouche LLP . 47 Novar annual report 2002
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 Thursday, 22 May 2003 at the Conference and
Banqueting Centre, Church House, Dean's Yard, 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 8 April 2003 (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 8 April 2003 (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
8 April 2003 Weybridge
Surrey KT13 9UX
Notes:
a. 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.  T o 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.
b. 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 Shareholder information
Dividends 
Ordinary shares
Final (if approved) payment date 6 June 2003
Interim announcement 29 July 2003
Cumulative Preference shares
Payment dates 2 June 2003 and
1 December 2003
“B” shares
Payment dates 20 May 2003 and 
20 November 2003
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, 
12 T okenhouse Yard, London, EC2R 7AN. T elephone 020 7588 2828.
Electronic shareholder communication
All shareholders can now receive future shareholder communications 
(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;
• 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
Advisers
Auditors
Deloitte & T ouche
180 Strand
London WC2R 1BL
Registrars
Computershare Investor Services PLC
PO Box 82
The Pavilions
Bridgwater Road
Bristol
BS99 7NH
Solicitors
Freshfields Brackhaus Deringer
65 Fleet Street
London EC4Y 1HS 
Stockbrokers
Cazenove
12 T okenhouse Yard
London EC2R 7AN
Analyses of ordinary shareholding
Shareholders Shares
at 31 December 2002 Number % Number (m) %
By range of holdings:
1 – 2,000 11,299 73.0 7.9 1.8
2,001 – 4,000 2,193 14.2 6.3 1.4
4,001 – 20,000 1,533 9.9 11.5 2.7
20,001 – 40,000 141 0.9 4.1 0.9
40,001 – 100,000 107 0.7 6.8 1.6
100,001 – 200,000 61 0.4 9.0 2.1
200,001 – 400,000 48 0.3 13.3 3.1
400,001 – 1,000,000 44 0.3 29.1 6.8
1,000,001 – 2,000,000 24 0.1 32.2 7.5
2,000,001 and above 35 0.2 310.3 72.1
15,485 100.0 430.5 100.0
By category:
Private Individuals 13,625 87.9 23.2 5.4
Investment and Pension Trusts 36 0.2 1.3 0.3
Pension Funds, Investment Banks 
and Nominees 1,658 10.8 397.8 92.4
Insurance Companies 16 0.1 3.9 0.9
Other Corporate Bodies 150 1.0 4.3 1.0
15,485 100.0 430.5 100.0
48 Novar annual report 2002 Contents
1 Highlights
2 Chairman’s statement
4 Group Chief Executive’s review
6 Intelligent Building Systems
8 Indalex Aluminum Solutions
10 Security Printing Services
12 Operating review
15 Financial review
18 The Board
19 Report of the Directors
22 Corporate Social Responsibility
23 Report to shareholders 
on Directors’ remuneration
27 Independent auditors’ report
28 2002 results
46 Notice of Annual General Meeting
47 Notice of Class Meeting
48 Shareholder information
Y ou 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.
Designed by Addison Corporate Marketing Limited
7632_Covers_SP_21_03  24/03/2003  3:35 pm  Page 2 Novar plc Annual Report and Accounts 2002
Annual report and accounts 2002
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
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