Topps Tiles Plc Annual Report and Financial Statements 2002 W e (cid:213) r e w i t h y o u e v e r y s t e p y o u t a k e . . . We(cid:213)re wit h you... At Topps Tiles we believe that our commitment to our customers, staff and shareholders is second to none. It is our policy to provide customer service that is honest, helpful, knowledgeable, but never pushy. We pride ourselves on the warm welcome we extend to anyone who enters one of our many stores. Our staff are on hand to help our customers plan their projects, however large or small, and will advise on all aspects to help them achieve their goals. If they have any queries when they return home and start their job, we do our best to answer them. We sponsor over 150 local football teams around the country and provide computer equipment to a number of schools as part of our initiative to build local brand awareness. We value all of our friendly, hardworking employees and have set up incentive and profit-sharing schemes as a way of recognising the invaluable contribution they have made to our success story. It is our intention to increase shareholder value through a combination of continuing strong financial performance and our ability to grow market share in an expanding market. OUR STAFF CAN ADVISE ON ALL ASPECTS OF PREPARATION TO HELP OUR CUSTOMERS ACHIEVE THE PERFECT RESULT ...e ver y s t ep you OUR COMBINATION OF BUYING POWER, KEEN PRICING AND LOW OVERHEADS MEANS WE CAN SQUEEZE EVERY LAST DROP OF PROFITABILITY FROM OUR OPERATIONS t ake... WE ARE DELIGHTED to report another year of significant growth, the fifth since flotation. The Group continues to grow strongly and enjoys a dominant position in an expanding market sector. More new stores, a growing brand awareness and a strong performance by staff have combined to drive the business forward. INTRODUCTION IFC SUMMARY OF RESULTS AND FINANCIAL HIGHLIGHTS 1 2 THE GROUP AT A GLANCE JOINT STATEMENT BY THE CHAIRMAN AND CHIEF EXECUTIVE 4 6 OPERATIONS REVIEW 8 FINANCIAL REVIEW 10 GROUP STRATEGY 12 BRAND DEVELOPMENTS 14 COMMUNITY RELATIONS 16 BUSINESS OPPORTUNITIES 18 QUESTION TIME 20 BOARD OF DIRECTORS 22 DIRECTORS AND ADVISORS 23 DIRECTORS(cid:213) REPORT 25 CORPORATE GOVERNANCE STATEMENT 26 REMUNERATION REPORT 27 DIRECTORS(cid:213) RESPONSIBILITIES 28 INDEPENDENT AUDITORS(cid:213) REPORT 29 CONSOLIDATED PROFIT AND LOSS ACCOUNT 30 BALANCE SHEETS 31 CONSOLIDATED CASH FLOW STATEMENT 32 NOTES TO THE FINANCIAL STATEMENTS 52 FIVE YEAR RECORD NOTICE OF ANNUAL GENERAL MEETING 53 EXPLANATORY NOTES TO THE NOTICE OF ANNUAL GENERAL MEETING THE TEAM STORE LOCATIONS 56 58 64 SUMMARY OF RESULTS AND FINANCIAL HIGHLIGHTS Turnover £m Gross profit £m 91.0 +22% 74.6 51.0 +24% 41.1 62.6 34.2 43.0 31.3 23.9 16.4 1998 1999 2000 2001 2002 1998 1999 2000 2001 2002 Profit before tax £m Basic earnings per share pence 11.5 +22% 9.4 17.9 +21% 14.8 8.0 13.1 5.8 4.1 9.9 7.1 1998 1999 2000 2001 2002 1998 1999 2000 2001 2002 Topps Tiles Plc 1 t he Group TOPPS TILES Topps Tiles sells ceramic wall and floor tiles and laminate and wood flooring for domestic and business use. Operating from 139 stores nationwide Topps Tiles is by far the UK(cid:213)s biggest specialist ceramic tile group. With our dedication to offering excellent value for money and customer service we believe we can continue to grow our dominance in the UK market. TILE CLEARING HOUSE (TCH) Tile Clearing House has become a tile brand in its own right, targeted at a different sector of the market to Topps. Its customers in the main are jobbing builders, small contractors and bulk purchasers. It offers a smaller separate product range including end of line, discontinued and job lots, but with greater stock levels. Tile Clearing House stores operate from less prominent locations than Topps, mainly in trade areas, but where the two brands trade next to each other, both perform well. In 2002, the number of stores increased from 26 to 32. 2 Topps Tiles Plc OUR TWO BRANDS ARE DISTINCTLY DIFFERENT BUT FIT PERFECTLY TO PROVIDE A SEAMLESS SERVICE a t a g l a n c e . . . THE GROUP AT A GLANCE Service has always been our top priority at Topps Tiles Plc - we(cid:213)re here to help our customers at every stage, the loyal staff who help make us the UK(cid:213)s largest ceramic tile retailer, the communities around our many stores, and the shareholders who invest in us. SERVING OUR CUSTOMERS Across both brands it is our policy to provide customer service that is honest, helpful, knowledgeable, but never pushy. We pride ourselves on the warm welcome we extend to all customers who enter our many stores. SERVING OUR STAFF We now employ over 1,100 staff across the Group. We encourage participation in the Group(cid:213)s success through employee share option schemes. We also incentivise staff through store bonus schemes, which this period has generated over £2.8 million in profit sharing for staff. SERVING OUR SHAREHOLDERS Since the Group was listed on the London Stock Exchange in 1997, Earnings per share has consistently grown from 4.2p in 1997 to 17.9p in 2002. Topps Tiles Plc 3 JOINT STATEMENT BY THE CHAIRMAN AND CHIEF EXECUTIVE We continue to build on the proven appeal of the (cid:212)Topps Tiles(cid:213) and (cid:212)Tile Clearing House(cid:213) formats which provide a secure foundation for the successful future expansion of the Company. We are delighted to report another excellent period of trading for Topps Tiles Plc. Profit before tax was £11.516 million (2001 - £9.414 million) from a turnover of £91.026 million (2001 - £74.642 million). The Company has now achieved double digit growth in both sales and pre tax profits every period since its public listing in June 1997. A growth of 11.3% in like for like sales was recorded for the 52 week period, demonstrating the underlying strength of the ceramic tile market and the enduring appeal to consumers of our product and service offer. Our balance sheet remains robust with no net borrowings at the period end and cash balances of £5.142 million (2001 - £2.206 million). The Company continues to be cash generative even with significant investment in new stores and refurbishment of older stores. The board is committed to maintaining an efficient capital structure, and therefore, at the next Annual General Meeting we shall seek shareholder approval for authority to increase the authorised share capital and to buy back a proportion of our shares if appropriate. OUR THOROUGH PLANNING AND RESEARCH HELPS ENSURE CONSISTENT PROGRESS AND GOOD RESULTS 4 Topps Tiles Plc Dividend The board is recommending a final dividend of 5.80 pence per share, which together with the interim dividend of 1.35 pence per share, brings the total dividend for the period to 7.15 pence, an increase of 43.0% over the previous period. The dividend will be paid on 1 November 2002 to all shareholders on the register as at 4 October 2002. Outlook We continue to build on the proven appeal of the (cid:212)Topps Tiles(cid:213) and (cid:212)Tile Clearing House(cid:213) formats which provide a secure foundation for the successful future expansion of the Company. We are confident, given the growth opportunities in our market, that we can continue to produce the strong financial performances of the past and grow our market share. The Board We announced in September that Nicholas Ounstead was appointed Chief Operating Officer. Nicholas has made a smooth transition to this role whilst continuing to oversee customer services and marketing functions. We are confident that we have in place a strong and experienced management team to drive the business forward. Barry Bester, Chief Executive Stuart Williams, Chairman Topps Tiles Plc 5 OPERATIONS REVIEW This period has seen continued improvements to our core operations and new initiatives are developing well. We started the period with 147 stores (121 Topps and 26 Tile Clearing House) trading and ended with 171 (139 Topps and 32 Tile Clearing House) a net increase of 24. During the period we actually opened 26 new outlets comprising, 19 Topps Tiles and 7 Tile Clearing Houses, refitted 23 stores including our Floorstore concept and closed 2 older stores. Whilst early sales figures within the MFI stores were encouraging, the venture did not perform to our expectations. We therefore withdrew our presence in November 2001. The trading losses and exit costs which were all incurred in the first half of the period totalled £0.156 million. During the year we opened a concession store within the Harris Carpet chain which has performed well, we will continue to explore similar opportunities in the forthcoming period. Gross margin continued to improve and was up a full one percentage point on last period and has increased more than seven percentage points over the last five periods. With an increasing mix of products being supplied through our own warehouse, margin should continue to improve. New suppliers have been enlisted from lower cost sources outside of the EU to ensure a continued competitive supply. The Tile Clearing House brand performed well, taking advantage of sites that are not suitable for the Topps Tiles brand. Its customers, in the main, are jobbing builders, small contractors and bulk purchasers and its product offer, which includes end of lines, discontinued tiles and job lots, is distinctive and does not overlap with that of the Topps Tiles stores. It acts as a complement to the Topps Tiles brand and appeals to a different sector of customers. 6 Topps Tiles Plc The Group recently entered a 50/50 joint venture with a Dutch Group. The venture comprises five well established laminate and wood flooring stores plus our pilot store. We plan to introduce laminate and wood flooring to the Sliedreicht store and ceramic tiles to the five laminate and wood flooring stores. The management of the joint venture resides with our Dutch co-investor. The long experience of our Dutch co-investor in the laminate and wood market will enable us to benefit from buying synergies for these products in our UK operation. Stock days have continued to fall as we roll out our new core range into the business and now stands at 175, compared with 187 last year. This reduction has been achieved through greater focus on the product range assisted by the new I.T. systems which are now fully operational. The Market Our market in the UK for tiles continues to grow and is estimated to increase in volume in 2002 to 30.1 million square metres*. This growth is forecast to continue, reaching 34.8 million by 2006*. The reason for the sustained growth can be attributed to the increased awareness of tiles as a major part of home decoration, not only as a functional product used in traditional wet areas such as kitchens and bathrooms, but also for their aesthetic value throughout the home. The areas where ceramic tiles are now used in increasing numbers has expanded to include conservatories, hallways and cloakrooms and has benefited from consumers extending their homes to have bigger kitchens as well as second bathrooms and shower-rooms. It is also being driven by the introduction of under floor heating systems which are more commonplace in other EU countries where use of ceramic floor tiles is up to six times greater than the UK. Consumer interest is fuelled by the extensive media coverage of home improvement television programmes and by increased tourism to countries which have greater tile usage. Current trading and prospects Total sales in the first six weeks of 2002/2003 increased by 18.2%, compared with the corresponding period last year with like for like sales increasing by 8.1%. The outlook for the ceramic tiles and laminate and wood flooring market remains positive and is forecast to grow steadily over the next four years. We are now well on the way with our expansion plans for 2002/2003 with 24 new stores, planned advancing us towards our target of 350 stores across the UK. Nicholas Ounstead Chief Operating Officer *source MSI ceramic tiles UK, June 2002 Topps Tiles Plc 7 FINANCIAL REVIEW The core of the business has shown even stronger growth... ................................. an increase of 31.0%. PROFIT AND LOSS ACCOUNT Turnover During the period, overall turnover increased by 22.0% to £91.026 million from £74.642 million last period. Like for like sales increased by 11.3%, with new stores contributing a further 10.7% increase. Gross Margin Overall gross margin was 56.0% compared to 55.0% last period and an interim figure of 55.6%. In the second half of the period gross margin increased to 56.5%, resulting in an increase of 1.0% for the full period. Operating Expenses Costs as a percentage of sales were 43.2% compared to 42.1% last period. However this period has included the pilot scheme costs for both MFI and Holland which represented £0.524 million (2001 - £Nil) whilst last period(cid:213)s costs were net of profits on disposal of fixed assets of £0.344 million. Taking these elements into account gives 2002 figures of 42.6% compared to 42.6% in 2001. Profit Before Tax We have achieved an overall increase of 22.3% to £11.516 million compared to a profit before tax of £9.414 million last period. The core of the business actually demonstrated even stronger growth after taking into account pilot schemes at MFI and Holland which showed a total loss of £0.369 million. Therefore, the comparable operating core business showed £11.885 million compared to £9.070 million (excluding profit on disposal of fixed assets of £0.344 million) last period, an increase of 31.0%. Taxation We continue to fully provide for deferred taxation in line with FRS19. The effective rate of corporation tax is 30.2% (2001 - 30.5%). Earnings and Dividends Our Earnings per share has grown to 17.9 pence compared to 14.8 pence last period, an increase of 20.9%. The board is recommending a final dividend of 5.80 pence per share which will give a total dividend for the period of 7.15 pence compared to 5.00 pence last period, an increase of 43.0%. This gives a dividend cover of 2.5 times compared to 2.9 times in 2001. We are confident in reducing the cover, as the business has demonstrated over a number of periods its ability to generate cash and it has now matured to a stage where the board considers the change to be appropriate. BALANCE SHEET Fixed Assets Capital expenditure in the period amounted to £3.9 million. This reflects the cost of acquiring two freehold/development sites for £0.6 million, the opening of 26 new stores costing £1.7 million and the refurbishment of a further 23 stores at a cost of £0.9 million. We have also continued to update our Electronic Point of 8 Topps Tiles Plc Sale system at a cost of £0.4 million and during the period five freehold properties were sold which resulted in gross proceeds of £2.8 million. The Group currently has seven freehold and two development sites with a net book value of £2.1 million. 30 September. This change will take effect in the accounting period 2002/03 and therefore this period will report 16 months trading resulting in interim announcements to 30 November 2002 (6 months), 29 March 2003 (4 months) and the period end of 27 September 2003. Stock Stock days have reduced to 175 days compared to 187 days last period. At the interim announcement stock days were 177 days and the trend of improvement reflects the continued efforts to achieve efficiencies in our stock management which is now benefiting from the investment in the I.T. systems. Gearing Cash reserves at the period end were £5.142 million and borrowings were £0.746 million giving the Group a net funds position at the period end of £4.396 million. OTHER MATTERS Joint venture in Holland On the 10 June 2002 the Group entered a joint venture with a Dutch Flooring Company. The joint venture comprises five well established laminate and wood flooring stores and our pilot store. The Group owns 50% in the joint venture with the remaining 50% held by the Dutch Management team. Accounting period end date change The Group intends to change its accounting period end date, from the nearest Saturday to 31 May, to the nearest Saturday to Annual General Meeting The A.G.M. for the period to 1 June 2002 will be held on 8 October 2002. This is a month later than last period(cid:213)s A.G.M. due to the proposed period end date change to 30 September. The next A.G.M. will then be held in early January 2004, 15 months after this period(cid:213)s A.G.M. Change of Auditors In the UK, an agreement for the partners and personnel of Arthur Andersen to join Deloitte & Touche has recently been concluded. As a consequence of this, the board has concluded that it is now appropriate to propose a resolution at the Annual General Meeting to appoint Deloitte & Touche as auditors to the Group for the ensuing period. Andrew Liggett Finance Director Topps Tiles Plc 9 GROUP STRATEGY Our success has been founded on four crucial cornerstones: CUSTOMER SERVICE STORE LOCATIONS STOCK AVAILABILITY STORE LAYOUT 10 Topps Tiles Plc 1. CUSTOMER SERVICE Customer service is a subject we take very seriously. All staff attend an induction course at our own training centre where they learn our friendly and helpful approach to customer service, along with product range and technical knowledge. Being able to offer correct advice and assistance is crucial to gaining customer confidence. In-store, we have a wide range of services to help customers choose the right product and achieve the best results. For our customers(cid:213) convenience, most of our stores trade 7 days- a-week from 8.00am to 6.00pm with a number of larger stores open until 8.00pm. 2. STORE LOCATIONS Our stores in the main are not located on traditional high streets or retail parks, but in less expensive yet highly visible locations on or close to busy roads. Our average store size is around 6,500 square feet and virtually all have on-site parking areas. 3. STOCK AVAILABILITY Each store has a huge number of lines in stock, with replenishments arriving twice a week from our central warehouses. 80% of our products are imported directly from factories in Spain, Italy, Portugal and other countries around the world. Long-standing relationships with our suppliers, ensure we maintain excellent stock availability. 4. STORE LAYOUT All stores are clearly identified with bright, eye-catching exterior signage bearing the Topps Tiles or Tile Clearing House branding. Store interiors are laid out in a mini-warehouse style with a huge choice of products merchandised with colourful displays and informative point-of-sale. The stores are customer-friendly with product and pricing information clearly displayed. 97.9% OF CUSTOMERS SURVEYED EXPRESSED OVERALL LEVELS OF SATISFACTION AS BEING GOOD TO EXCELLENT Topps Tiles Plc 11 BRAND DEVELOPMENTS Our two complementary brands have reported strong performances both in terms of increased turnover and market share. The Group continues to grow its market share and is now estimated to have over 15% of the UK non-contract market for ceramic tiles. Consumers appetite for ceramic tiles has grown steadily over the past 20 years and is forecast to grow by a further 15% over the next four years*. The demand for laminate and wood flooring is growing quickly as consumer tastes change to reflect that of our European neighbours preference for hard floor surfaces. We believe that the health and hygiene characteristics of these products will have a direct benefit to future growth in sales and to take advantage of this move we have opened seven Floorstores using space already in the business. These stores have a separate entrance and are in effect a specialist mini warehouse offering a much larger range of laminate and wood flooring products than a standard Topps store, initial results are encouraging. The Group is well placed to take advantage of this growing market with many initiatives to improve merchandising and marketing activities. We are also piloting a Tile Studio concept within several Topps stores offering an extended up market range of tiles and natural stone to service this sector of the market. 12 Topps Tiles Plc *source MSI ceramic tiles UK, June 2002 Topps Tiles Plc 13 COMMUNITY RELATIONS We have a policy of building local brand awareness of Topps Tiles and Tile Clearing House through involvement with young people. Probably our most well-known community project is our youth sports sponsorship, providing new kits and equipment to juniors in each town where we have a presence. This has made Topps Tiles one of the biggest supporters of youth football in Britain. As well as sport, there(cid:213)s education, via our product catalogue, schools can win valuable computer equipment. Since the scheme started, a number of schools have benefited nationwide. Another worthy cause is the National Asthma Campaign (NAC). This is our third year of support for the charity, which aims to conquer this respiratory disorder affecting over one million children in the UK. The NAC was the natural choice of charity for Topps to adopt, as our products help to reduce the levels of house dust mites which are one of the triggers of asthma attacks. In addition to a cheque for £16,000 donated by Topps, our staff contributed greatly to the cause this year by holding sponsored events which raised a considerable sum. 14 Topps Tiles Plc TOPPS TILES CONTRIBUTES EQUIPMENT TO LOCAL SCHOOLS THROUGH COMPETITIONS IN OUR PRODUCT CATALOGUE TOP LEFT: Topps Tiles is one of the biggest supporters of youth football in Britain, providing new kits and equipment to junior teams local to every one of our stores. TOP RIGHT: Topps Tiles supports the National Asthma Campaign, a natural choice, as our products help to reduce levels of dust mites, one of the triggers of asthma attacks. BOTTOM LEFT: Area manager Neil Curtis, presenting a new computer to Annie Walton and her Head teacher, Tony Gill at Hadrian Primary School, South Shields. Topps Tiles Plc 15 BUSINESS OPPORTUNITIES We are constantly looking for new ways to develop the business, without compromising on our principles of tight cost management and the ability to maintain strong margins. The non contract ceramic tile market remains buoyant and is forecast to increase 15% to 34.8 million square metres in the next four years*. Home improvements are more popular than ever before with DIY forecast to be one of the fastest growing retail sectors. Adding a second WC has become more popular for many homeowners, along with shower rooms and conservatories. This offers real opportunities to increase tile sales while demand for wood flooring is also flourishing. The number of rooms where tiles are usually found has expanded from traditional (cid:212)wet(cid:213) areas such as bathrooms and kitchens and now includes hallways, cloakrooms and dining rooms. Fashionable, with a long design life, low maintenance and more hygienic than traditional floor coverings, ceramic tiles and wood flooring adds value to homes. As the demand for them grows, the Group is well placed to take advantage of this increased demand. *source MSI ceramic tiles UK, June 2002 16 Topps Tiles Plc Topps Tiles Plc 17 QUESTION TIME This year we have decided to conclude our business review by answering some questions frequently put to us by analysts and shareholders regarding the Group(cid:213)s business, financial position and strategy. What would be the effect of a downturn in the housing market? We have always maintained that the business is not directly linked to the (cid:212)ups(cid:213) and (cid:212)downs(cid:213) of the housing market. We are more the replacement market. Although people will decide not to move home they may instead improve their existing home and that is why historically the Company has not seen sharp increases in sales when the housing market is booming and vice versa. How difficult is it to find suitable store locations? Our ideal store location is on a busy main road with some parking available or a first generation retail park. Our store (cid:212)model(cid:213) is flexible enough to accommodate anything from a 4,000sq ft unit to a 15,000sq ft unit. This flexibility coupled with the location requirement means that we are finding plenty of suitable sites at acceptable rent levels. We are planning to open a further 24 stores in 2002/2003. How many stores can the business have in the UK? Our previously stated objective was to have 250 stores in the UK. However we have seen two changes that have influenced our thinking. The first being the success of our second brand Tile Clearing House which can trade very well alongside Topps Tiles stores and secondly the success of our trials of Topps Tiles stores in smaller population areas. These two changes mean that we are restating our store target for the UK to over 350 stores, of which, 100 will be Tile Clearing House. 18 Topps Tiles Plc Why does the business carry so much stock? We believe one of our key strengths and a barrier to entry of our business is stock availability. When customers order from our stores they are usually looking for a (cid:212)cash and carry(cid:213) service as they will already have planned the (cid:212)project(cid:213) before buying the tiles. To be told that they may take six weeks to arrive can be very disappointing. We therefore set out to provide a (cid:212)cash and carry(cid:213) service and if this is not achievable we carry stocks at our central warehouse which means we can usually fulfil the order within days. How sensitive is the business to currency changes? 80% of our product range is imported, therefore we are exposed to currency fluctuations. Our main currency requirement is the Euro, although by far the majority of our payments are actually made in Sterling. In order to manage this exposure we have adopted a policy of buying currency forward on a rolling 6 to 12 months, monthly contract basis which therefore gives us a known cost base for setting retail prices. Will Earnings per share (EPS) continue to grow? We have seen EPS grow from 4.2p per share in 1997 (when the business floated) to 17.9p per share this year; by any standards this is tremendous growth. However we do believe that the business can continue to develop and grow substantially from its current position and although nothing in business can be taken for granted, our continuous strive for improvement coupled with the future growth potential should see the business achieve its objectives. Is the business cash generative? 99% of our sales are for cash or cash equivalents. With the business on such a fast growth rate it demands plenty of resources to maintain the momentum, from capital expenditure on new stores, existing stores and freehold purchases (this totalled £3.9 million in 2001/2002) to stock requirements for new stores (they have around £0.1 million of stock per store). In addition to this we have maintained our strong dividend policy. All of this is funded out of our cash generation from operating activities. The business is highly cash generative! Topps Tiles Plc 19 BOARD OF DIRECTORS 20 Topps Tiles Plc 1 2 5 3 6 4 7 DIRECTORS(cid:213) PROFILES EXECUTIVE DIRECTORS NON-EXECUTIVE DIRECTORS 1. Stuart Williams F.C.A. Chairman (aged 58) 5. Alan Mclntosh C.A. Secretary of Audit Committee Stuart Williams, a Chartered Accountant, was a founder shareholder and Director of Topps Tiles in 1984. He became Executive Deputy Chairman and shareholder of Multi-Tile in 1987 with responsibility for restructuring the Group and introducing turnover and profit-related incentive schemes. His principal responsibilities are those of Group Strategy, property and legal matters. In addition, he is editor of the Company(cid:213)s in-house magazine and is responsible for the suggestion scheme. Senior Non-Executive Director (aged 34) Chairman of Audit Committee Alan Mclntosh qualified as a Chartered Accountant with Deloitte & Touche and subsequently joined the corporate finance department of Hill Samuel. He is currently the Finance Director of Punch Group Ltd, the largest independent pub company in the UK. He is also a Director of Wellington Pub Company Plc and Chairman of the technology group, Capital Management and Investment Plc. He joined the board of Topps Tiles in 1997. 2. Barry Bester Chief Executive (aged 45) 6. Victor Watson C.B.E. Barry Bester was a founder shareholder and Director of Topps Tiles in 1984. As Chief Executive he has overall responsibility for the day-to-day operations of the business, with particular emphasis on sales and store management. He is also responsible for new business development. Non-Executive Director (aged 73) Member of Audit Committee Victor Watson is Chairman of Black i Limited and Chairman of Business Link Leeds Ltd. He is also the former Chairman of Waddington Plc. He joined the board of Topps Tiles in 1997. 3. Nicholas Ounstead Chief Operating Officer (aged 41) 7. Rt. Hon Michael Jack Privy Councillor, MP Nicholas Ounstead joined Topps Tiles in April 1997. Prior to this he was Marketing Director at Bellegrove Ceramics Plc which is a major supplier to DIY chains and independent retailers. In September 2001 he was appointed Chief Operating Officer whilst continuing to oversee customer services and marketing. Nicholas is also Chairman of the Health and Safety Committee. 4. Andrew Liggett F.C.M.A. Finance Director (aged 40) Andrew Liggett joined Topps Tiles in 1995 as Finance Director. Prior to joining the Group, he worked for Gold Crown Group Limited where he was employed for 10 years, initially as management accountant and then as Finance Director. He is responsible for the accounting, financial control, company secretarial matters, treasury and administration. Non-Executive Director (aged 56) Member of Audit Committee Michael Jack(cid:213)s business career has seen him in management capacities with Proctor & Gamble and Marks & Spencer. In 1987 he became MP for Fylde and by 1990 had begun a ministerial career that saw him serve in the DSS, Home Office, MAFF and finally the Treasury as Financial Secretary. Since that time he has maintained strong business links via his consultancy work. He joined the board of Topps Tiles in 1999. Topps Tiles Plc 21 DIRECTORS & ADVISORS DIRECTORS S.K.M. Williams F.C.A. B.F.J. Bester A. Liggett F.C.M.A. N.D. Ounstead W.A. McIntosh C.A. V.H. Watson C.B.E. The RT. Hon. J.M. Jack, Privy Counsellor, MP Chairman Chief Executive Finance Director Chief Operating Officer Senior Non-Executive Director Non-Executive Director Non-Executive Director SECRETARY A. Liggett F.C.M.A. REGISTERED NUMBER 3213782 REGISTERED OFFICE Rushworth House Wilmslow Road Handforth Wilmslow Cheshire SK9 3HJ 22 Topps Tiles Plc AUDITORS Arthur Andersen Bank House 9 Charlotte Street Manchester M1 4EU BANKERS HSBC Bank Plc 56 Queen Street Cardiff CF10 2PX REGISTRARS Capita IRG Plc Balfour House 390 - 398 High Road Ilford Essex IG1 1BR SOLICITORS TLT Solicitors Bush House 72 Prince Street Bristol BS99 7JZ Sinclair Abson Smith 30 Greek Street Bank House Stockport SK3 8AD STOCKBROKERS HSBC Investment Bank Plc St Vintners Place 68 Upper Thames Street London EC4 3BJ DIRECTORS(cid:213) REPORT for the period ended 1 June 2002 The directors present their report on the affairs of the Group, together with the financial statements and auditors(cid:213) report for the period ended 1 June 2002. SHARE CAPITAL Details of the Company(cid:213)s authorised and issued share capital are shown in note 18 to the financial statements. PRINCIPAL ACTIVITY AND BUSINESS REVIEW The principal activity of the Group comprises the retail and wholesale distribution of ceramic tiles, wood flooring and related products. Details of the Group(cid:213)s performance during the period and expected future developments are contained in the Joint Statement by the Chairman and Chief Executive and the Operations and Financial Reviews on pages 4 to 9 of the report and financial statements. SUPPLIER PAYMENT POLICY The Group(cid:213)s policy is to settle terms of payment with suppliers when agreeing the terms of each transaction, ensuring that suppliers are made aware of the terms of payment and that both parties abide by those terms. The effect of the Group(cid:213)s negotiated payment policy is that trade creditors at the period end represented 50 days purchases (2001 - 66 days). RESULTS AND DIVIDENDS The audited financial statements for the period ended 1 June 2002 are set out on pages 29 to 51. The Group(cid:213)s profit for the period, after taxation was £8,039,000 (2001 - £6,547,000). An interim dividend of 1.35p per share, £606,000, was paid on 28 February 2002. The directors recommend a final dividend of 5.80p per share, £2,609,000 making a total of 7.15p per share, £3,215,000 (2001 - total dividend 5.0p per share, £2,240,000). Subject to approval by the shareholders at the Annual General Meeting, to be held on 8 October 2002, the final dividend will be paid on 1 November 2002, to shareholders on the register at the close of business on 4 October 2002. DIRECTORS The directors of the Company are as follows: S.K.M. Williams B.F.J. Bester A. Liggett N.D. Ounstead W.A. Mclntosh V.H. Watson J.M. Jack Chairman Chief Executive Finance Director Chief Operating Officer Senior Non-Executive Director Non-Executive Director Non-Executive Director Their interests in the shares of the Company are set out in note 4(c) to the financial statements. CHARITABLE AND POLITICAL CONTRIBUTIONS During the period the Group made charitable donations of £16,000 to (cid:210)The National Asthma Campaign(cid:211). The Group made no political contributions. SUBSTANTIAL SHAREHOLDINGS In addition to the directors(cid:213) shareholdings noted on page 36, on 1 June 2002 the Company had been notified, in accordance with sections 198 to 208 of the Companies Act 1985, of the following interests in 3% or more of its issued share capital. Littledown Nominees Limited HSBC Global Custody Nominee (UK) Limited Chase Nominees Limited Stanlife Nominees Limited Arnold and S. Bleichroeder Inc. Vidacos Nominees Limited Number 5,046,400 4,417,441 4,164,433 3,012,964 1,991,443 1,774,349 % held 11.2% 9.8% 9.3% 6.7% 4.4% 3.9% Topps Tiles Plc 23 The directors will continue to incentivise employees through additional employee share option schemes in the forthcoming financial period. AUDITORS The directors will place a resolution before the Annual General Meeting to appoint Deloitte & Touche as auditors for the ensuing period. Rushworth House Wilmslow Road Handforth Wilmslow Cheshire SK9 3HJ By order of the Board, Secretary 22 July 2002 A. Liggett DIRECTORS(cid:213) REPORT CONTINUED DISABLED EMPLOYEES Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled every effort is made to ensure that their employment with the Group continues and that appropriate training is arranged. It is the policy of the Group that the training, career development and promotion of disabled persons should, as far as possible, be identical with that of other employees. EMPLOYEE CONSULTATION The Group places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting them as employees and on the various factors affecting the performance of the Group. This is achieved through formal and informal meetings and the Company magazine. Employee representatives are consulted regularly on a wide range of matters affecting their current and future interests. SHARE OPTION SCHEMES The directors recognise the importance of motivating employees and believe that one of the most effective incentives is increased employee participation in the Company through share ownership. This has been achieved through the introduction of a number of employee sharesave, share bonus, approved and unapproved share option schemes, since the flotation in 1997. During the year the Company issued 275,000 options to employees via further sharesave, share bonus, approved and unapproved share option schemes, bringing the total of options held by employees, excluding directors, to 1,625,000 (2001 - 1,526,000). 24 Topps Tiles Plc In June 1998 the Hampel Committee and the London Stock Exchange published the Combined Code on corporate governance. This combines the Cadbury Code on corporate governance, the Greenbury Code on directors(cid:213) remuneration and new requirements arising from the findings of the Hampel Committee. STATEMENT OF COMPLIANCE WITH THE CODE OF BEST PRACTICE The Company has complied throughout the period with the Provisions of the Code of Best Practice set out in section 1 of the Combined Code except for code provisions A1.2, A1.3, A5.1 and A6.1. The board considers this non-compliance with the Combined Code to be justified in view of the size of the Group and in this respect supports the recommendations of the City Group for Smaller Companies. The Company complies with all other provisions of the code. Code provision D.3.1 requires the members of the audit committee to be named in the report and financial statements. Mr. W.A. McIntosh (Chairman), Mr. V.H. Watson and Mr. J.M. Jack have served on the committee throughout the period. STATEMENT ABOUT APPLYING THE PRINCIPLES OF GOOD GOVERNANCE The Company has applied the Principles of Good Governance set out in section 1 of the Combined Code by complying with the Code of Best Practice as reported above. Further explanation of how the Principles have been applied in connection with directors(cid:213) remuneration is set out in the Remuneration Report. DIALOGUE WITH INSTITUTIONAL SHAREHOLDERS The directors seek to build on a mutual understanding of objectives between the Company and its institutional shareholders by making annual presentations and communicating regularly throughout the year. CORPORATE GOVERNANCE STATEMENT MAINTENANCE OF A SOUND SYSTEM OF INTERNAL CONTROL The board has applied principle D.2 of the Combined Code by establishing a continuous process for identifying, evaluating and managing the significant risks the Group faces. The board regularly reviews the process, which has been put in place from the start of the period to the date of the approval of this report and which is in accordance with Internal Control: Guidance for Directors on the Combined Code published in September 1999. The board is responsible for the Group(cid:213)s system of internal control and for reviewing its effectiveness. Such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss. In compliance with provision D.2.1 of the Combined Code, the board continuously reviews the effectiveness of the Group(cid:213)s system of internal control. The board(cid:213)s monitoring covers all controls, including financial, operational and compliance controls and risk management. It is based principally on reviewing reports from management to consider whether significant risks are identified, evaluated, managed and controlled and whether any significant weaknesses are promptly remedied and indicate a need for more extensive monitoring. The board has also performed a specific assessment for the purposes of this annual report. This assessment considers all significant aspects of internal control arising during the period covered by the report including the work of internal audit. The audit committee assists the board in discharging its review responsibilities. Topps Tiles Plc 25 REMUNERATION REPORT for the period ended 1 June 2002 As well as complying with the provisions of the Code as disclosed in the Company(cid:213)s corporate governance statement, the Company has applied the Principles of Good Governance relating to directors(cid:213) remuneration as described below. Service contracts New service contracts have been entered into by the executive directors on 1 June 2002 for a period of 16 months which will bring the contracts in line with the extended accounting period in 2003. REMUNERATION COMMITTEE The remuneration committee is comprised solely of the three non-executive directors. STATEMENT OF REMUNERATION POLICY AND DETAILS OF REMUNERATION The Company(cid:213)s policy on executive director remuneration is as follows: The remuneration of executive directors is determined by the remuneration committee, whose aim is to reward executive directors competitively. The emoluments of directors comprise a basic salary, executive share options and normal employment benefits including corporate contributions towards a pension entitlement. The remuneration of non-executive directors is determined by the board as a whole, based on outside advice and review of current practices in other companies. Pensions The details of the corporate pension arrangements are explained in note 22(b). Share incentives The share option scheme comprises two parts, the Topps Tiles Plc approved Executive Share Option Scheme and the Topps Tiles Plc unapproved Executive Share Option Scheme. The scheme is administered and the grant of options supervised by the remuneration committee. The exercise of options will normally be conditional on the achievement of a specified performance target determined by the remuneration committee, who will have regard to guidelines on share option schemes issued by institutional investors. Options may normally only be granted within 42 days of the announcement by the Company of its interim or final results each period, with the exercise price being not less than the middle market quotation averaged over the three dealing days immediately preceding the date of the grant. Full details of the remuneration packages of individual directors and information on share options are set out in notes 4(b) and 4(c) to the financial statements. 26 Topps Tiles Plc DIRECTORS(cid:213) RESPONSIBILITIES OTHER MATTERS The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements comply with the Companies Act 1985. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. FINANCIAL STATEMENTS, INCLUDING ADOPTION OF GOING CONCERN BASIS Company law requires the directors to prepare financial statements for each financial period which give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that period. After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the financial statements. In preparing the financial statements the directors are required to select suitable accounting policies and then apply them consistently; make judgements and estimates that are reasonable and prudent; and state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements. Topps Tiles Plc 27 INDEPENDENT AUDITORS(cid:213) REPORT TO THE SHAREHOLDERS OF TOPPS TILES PLC We have audited the financial statements of Topps Tiles Plc for the period ended 1 June 2002 which comprise the Profit and loss account, Balance sheets, Cash flow statement and the related notes numbered 1 to 23. These financial statements have been prepared under the accounting policies set out therein. RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS The directors(cid:213) responsibilities for preparing the annual report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards are set out in the Statement of Directors(cid:213) Responsibilities. Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements, United Kingdom Auditing Standards and the Listing Rules of the Financial Services Authority. We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the Companies Act 1985. We also report to you if, in our opinion, the Directors(cid:213) Report is not consistent with the financial statements, if the Company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law or the Listing Rules regarding directors(cid:213) 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(cid:213)s compliance with the seven provisions of the Combined Code specified for our review by the Listing Rules, and we report if they do not. We are not required to consider whether the board(cid:213)s statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the Group(cid:213)s corporate governance procedures or its risk and control procedures. We read the other information contained in the annual report, and consider whether it is consistent with the audited financial statements. This other information comprises only the Joint Statement by the Chairman and the Chief Executive, Operations and Financial Reviews, Directors(cid:213) Report, Corporate Governance Statement, Remuneration Report, Statement of Directors(cid:213) Responsibilities and Five Year Record. We consider the 28 Topps Tiles Plc implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information. 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. 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 of 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 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. OPINION In our opinion the financial statements give a true and fair view of the state of affairs of the Company and of the Group at 1 June 2002 and of the Group(cid:213)s profit for the period then ended and have been properly prepared in accordance with the Companies Act 1985. Arthur Andersen Chartered Accountants and Registered Auditors Bank House 9 Charlotte Street Manchester M1 4EU 22 July 2002 Turnover Cost of sales Gross profit Operating expenses - employee profit sharing - other operating expenses Operating profit Finance charges (net) Profit on ordinary activities before taxation Tax on profit on ordinary activities Profit on ordinary activities after taxation Dividends Retained profit for the financial period Earnings per ordinary share - basic - diluted CONSOLIDATED PROFIT & LOSS ACCOUNT for the period ended 1 June 2002 Notes 2 3 5 6 7 8 19 9 9 2002 £(cid:213)000 91,026 (40,029) 50,997 (2,859) (36,478) 11,660 (144) 11,516 (3,477) 8,039 (3,208) 4,831 17.9p 17.8p 2001 £(cid:213)000 74,642 (33,552) 41,090 (2,266) (29,187) 9,637 (223) 9,414 (2,867) 6,547 (2,245) 4,302 14.8p 14.6p All activity has arisen from continuing operations. There are no recognised gains or losses in either period other than the profit for the financial period. A statement of movements on reserves is given in note 19. The accompanying notes are an integral part of this consolidated profit and loss account. Topps Tiles Plc 29 BALANCE SHEETS 1 June 2002 Fixed assets Goodwill Tangible assets Investments Current assets Stocks Debtors Cash at bank and in hand Creditors: Amounts falling due within one year Net current assets Total assets less current liabilities Notes 10 11 12 13 14 2002 £(cid:213)000 285 15,044 - 15,329 19,019 3,802 5,142 27,963 (17,935) 10,028 25,357 Creditors: Amounts falling due after more than one year 15 (526) Provisions for liabilities and charges 17 (1,007) Net assets Capital and reserves Called-up share capital Share premium account Merger reserve Special reserve Profit and loss account Equity shareholders(cid:213) funds 23,824 5,623 1,307 (399) - 17,293 23,824 18 19 19 19 19 Group Company 2001 £(cid:213)000 302 16,236 - 16,538 17,293 4,678 2,206 24,177 (18,707) 5,470 22,008 (2,446) (893) 18,669 5,601 1,005 (399) - 12,462 18,669 2002 £(cid:213)000 - - 14,640 14,640 - 10,801 462 11,263 (2,777) 8,486 23,126 - - 2001 £(cid:213)000 - - 14,652 14,652 - 6,613 5,382 11,995 (3,858) 8,137 22,789 - - 23,126 22,789 5,623 1,307 - 14,917 1,279 23,126 5,601 1,005 - 14,917 1,266 22,789 The financial statements on pages 29 to 51 were approved by the board of directors on 22 July 2002 and signed on its behalf by: S.K.M Williams B.F.J. Bester Directors 22 July 2002 The accompanying notes are an integral part of these balance sheets. 30 Topps Tiles Plc CONSOLIDATED CASH FLOW STATEMENT for the period ended 1 June 2002 Notes 21(a) 21(b) 21(c) 21(d) 21(e) 2002 £(cid:213)000 10,426 (163) (3,005) (163) (2,323) 4,772 (1,836) 2,936 2001 £(cid:213)000 11,019 (245) (2,849) (4,820) (1,934) 1,171 600 1,771 Net cash inflow from operating activities Returns on investments and servicing of finance Taxation Capital expenditure and financial investment Equity dividends paid Cash inflow before financing Financing Increase in cash in the period The accompanying notes are an integral part of this consolidated cash flow statement. Topps Tiles Plc 31 NOTES TO THE FINANCIAL STATEMENTS 1 June 2002 1 Accounting policies The principal accounting policies are summarised below. They have all been applied consistently throughout the period and the preceding period: a) Basis of accounting The financial statements have been prepared under the historical cost convention and in accordance with applicable accounting standards. b) Basis of consolidation The Group financial statements consolidate the financial statements of Topps Tiles Plc and its subsidiary undertakings made up to 1 June 2002. The financial statements of Topalpha Limited have been consolidated using merger accounting principles. In all other cases, subsidiary undertakings have been accounted for using acquisition accounting principles. The results of subsidiaries acquired or sold are consolidated for the periods from or to the date on which control passed. No profit and loss account is presented for Topps Tiles Plc, as permitted by s230 of the Companies Act 1985. The Company(cid:213)s profit after tax for the period, determined in accordance with the Act, was £3,221,000 (2001 - £3,194,000). c) Financial period The accounting period ends on the Saturday which falls closest to 31 May, resulting in financial periods of either 52 or 53 weeks. d) Goodwill Goodwill arising on the acquisition of subsidiary undertakings and businesses, representing any excess of the fair value of the consideration given over the fair value of the identifiable assets and liabilities acquired, is capitalised and written off on a straight line basis over its useful economic life, which is twenty years. Provision is made for any impairment. Goodwill arising on acquisitions in the period ended 30 May 1998 and earlier periods was written off to reserves in accordance with the accounting standard then in force. As permitted by the current accounting standard the goodwill previously written off to reserves has not been reinstated on the balance sheet. On disposal or closure of a previously acquired business, the attributable amount of goodwill previously written off to reserves is included in determining the profit or loss on disposal. e) Turnover Turnover comprises the net amount receivable in respect of sales during the period to third parties and excludes value added tax. 32 Topps Tiles Plc NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 1 June 2002 1 Accounting policies (continued) f) Tangible fixed assets Tangible fixed assets are stated at cost, net of depreciation and any provision for impairment. Costs are only those costs that are directly attributable to bringing the asset into working condition for its intended use. Depreciation is provided to write off the cost of tangible assets, less estimated residual value, over their estimated useful lives as follows: Freehold buildings Short leasehold land and buildings Fixtures and fittings Motor vehicles - - - - 2% per annum on cost over the period of the lease, up to 25 years over 10 years or at 25% per annum on reducing balance basis as appropriate 25% per annum on reducing balance Residual value is calculated on prices prevailing at the date of acquisition. g) Stocks Stocks are stated at the lower of cost and net realisable value. Cost includes materials and an attributable proportion of distribution overheads based on normal levels of activity. Net realisable value is based on estimated selling price, less further costs expected to be incurred to completion and disposal. h) Taxation UK corporation tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantially enacted by the balance sheet date. Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between the Group(cid:213)s taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements. Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantially enacted by the balance sheet date. Deferred tax is measured on a non-discounted basis. i) Foreign currency Transactions in foreign currencies are recorded at the rate of exchange at the date of the transaction, or if hedged, at the forward contract rate. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are reported at the rates of exchange prevailing at that date, or if appropriate at the forward contract rate. Any gain or loss arising from a change in exchange rates subsequent to the date of the transaction is included as an exchange gain or loss in the profit and loss account. Topps Tiles Plc 33 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 1 June 2002 1 Accounting policies (continued) j) Leases Assets held under finance leases and hire purchase contracts, which confer rights and obligations similar to those attached to owned assets, are capitalised as tangible fixed assets and are depreciated over the shorter of the lease terms and their useful lives. The capital elements of future obligations are recorded as liabilities, while the interest elements are charged to the profit and loss account over the period of the leases to produce a constant rate of charge on the balance of capital repayments outstanding. Hire purchase transactions are dealt with similarly, except that assets are depreciated over their useful lives. Rentals under operating leases are charged on a straight line basis over the lease term, even if the payments are not made on such a basis. Benefits received and receivable as an incentive to sign an operating lease are similarly spread on a straight line basis over the lease term, except where the period to the review date on which the rent is first expected to be adjusted to the prevailing market rate is shorter than the full lease term, in which case the shorter period is used. k) Investments Fixed asset investments are shown at cost less provision for impairment. l) Pension costs For defined contribution schemes, the amount charged to the profit and loss account in respect of pension costs is the contributions payable in the year. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the balance sheet. m) Derivative financial instruments The Group uses derivative financial instruments to reduce exposure to foreign exchange risk. The Group does not hold or issue derivative financial instruments for speculative purposes. For a forward foreign exchange contract to be treated as a hedge, the instrument must be related to actual foreign currency assets or liabilities or to a probable commitment. It must involve the same currency or similar currencies as the hedged item and must also reduce the risk of foreign currency exchange movements on the Group(cid:213)s operations. Gains and losses arising on these contracts are deferred and recognised in the profit and loss account, only when the hedged transaction has itself been reflected in the Group(cid:213)s financial statements. If an instrument ceases to be accounted for as a hedge, for example, because the underlying hedged position is eliminated, the instrument is marked to market and any resulting profit or loss recognised at that time. 34 Topps Tiles Plc NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 1 June 2002 1 2 Accounting policies (continued) n) Finance costs Finance costs of debt are recognised in the profit and loss account over the term of the debt at a constant rate on the carrying amount. Finance costs which are directly attributable to the construction of tangible fixed assets are capitalised as part of the cost of those assets. The commencement of capitalisation begins when both finance costs and expenditures for the asset are being incurred and activities that are necessary to get the asset ready for use are in progress. Capitalisation ceases when substantially all the activities that are necessary to get the asset ready for use are complete. Turnover Turnover and profit before taxation are attributable to one activity, the retail and wholesale distribution of ceramic tiles, wood flooring and related products, and arises predominantly within the UK. 3 Operating expenses Distribution costs Administrative expenses Employee profit sharing 4 Staff costs a) Staff costs The average monthly number of employees (including executive directors) was: Selling Administration Their aggregate remuneration comprised: Wages and salaries Social security costs Other pension costs (note 22(b)) 2002 £(cid:213)000 28,808 7,670 2,859 39,337 2002 Number 936 134 1,070 2002 £(cid:213)000 17,304 1,323 169 18,796 2001 £(cid:213)000 23,545 5,642 2,266 31,453 2001 Number 800 141 941 2001 £(cid:213)000 12,741 1,169 129 14,039 Topps Tiles Plc 35 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 1 June 2002 4 Staff costs (continued) b) Directors(cid:213) emoluments The emoluments of the directors of the Company are as follows: Fees £(cid:213)000 Basic salary £(cid:213)000 Taxable benefits £(cid:213)000 Money purchase pension contributions £(cid:213)000 - - - - 15 15 - 30 150 150 150 140 - - 15 605 15 9 14 12 - - - 50 - 6 5 4 - - - 15 2002 Total £(cid:213)000 165 165 169 156 15 15 15 700 2001 Total £(cid:213)000 138 159 138 104 15 15 15 584 Executive S.K.M. Williams B.F.J. Bester A. Liggett N.D. Ounstead Non-executive W.A. McIntosh V.H. Watson J.M. Jack Aggregate emoluments c) Directors(cid:213) interests The directors had the following interests in the shares of the Company: 1 June 2002 Ordinary shares of 12.5p each 5,775,720 5,757,720 500,300 98,700 467,000 37,200 3,000 2 June 2001 Ordinary shares of 12.5p each Share options: Ordinary shares of 12.5p each, start and end of period 5,827,720 5,757,720 500,300 98,700 467,000 37,200 3,000 - - 300,000 225,000 - - - S.K.M. Williams B.F.J. Bester A. Liggett N.D. Ounstead W.A. McIntosh V.H. Watson J.M. Jack 36 Topps Tiles Plc NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 1 June 2002 4 Staff costs (continued) c) Directors(cid:213) interests (continued) Unexercised options have an exercise price of 301p, are exercisable from 6 September 2003 and expire on 5 September 2007. The market price of the Company(cid:213)s shares at the end of the period was 274.0p per share and ranged during the period from 178.5p to 328.5p per share. There have been no changes in the directors(cid:213) interests in share options subsequent to the end of the period. 5 Finance charges (net) Investment income Interest receivable and similar income Interest payable and similar charges Bank loans and overdrafts Hire purchase contracts Less interest costs capitalised Finance charges (net) 2002 £(cid:213)000 57 2001 £(cid:213)000 84 213 7 (19) 201 144 307 14 (14) 307 223 Finance costs have been capitalised based on a capitalisation rate of 5.5% which is the weighted average of rates applicable to the Group(cid:213)s general borrowings outstanding during the period. Topps Tiles Plc 37 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 1 June 2002 6 Profit on ordinary activities before taxation Profit on ordinary activities before taxation is stated after charging (crediting): Depreciation and amounts written off tangible fixed assets - owned - held under finance leases and hire purchase contracts Amortisation of goodwill Profit on disposal of tangible fixed assets Operating lease rentals - plant and machinery - other Remuneration to auditors - audit - other 2002 £(cid:213)000 1,826 86 17 - 366 7,862 40 24 2001 £(cid:213)000 1,435 39 18 (344) 391 6,657 35 20 38 Topps Tiles Plc NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 1 June 2002 7 Tax on profit on ordinary activities The tax charge comprises: Current tax UK corporation tax Adjustments in respect of prior periods Total current tax Deferred tax - Origination and reversal of timing differences (note 17) Total tax on profit on ordinary activities 2002 £(cid:213)000 3,396 (33) 3,363 114 3,477 The differences between the total current tax shown above and the amount calculated by applying the standard rate of UK corporation tax to the profit before tax is as follows: Profit on ordinary activities before tax Tax on profit on ordinary activities at standard UK corporation tax rate of 30% (2001 - 30%) Effects of: Expenses not deductible for tax purposes Capital allowances in excess of depreciation Depreciation on tangible fixed assets which do not qualify for capital allowances Accounting profit in excess of chargeable gains on sale of freehold property Adjustments to tax charge in respect of prior periods 2002 £(cid:213)000 11,516 3,455 (85) (114) 149 (9) (33) 2001 £(cid:213)000 2,639 - 2,639 228 2,867 2001 £(cid:213)000 9,414 2,824 (77) (228) 130 (10) - Current tax charge for period 3,363 2,639 The Group earns its profits primarily in the UK, therefore the tax rate used on the profit on ordinary activities is the standard rate for UK corporation tax, currently 30%. Topps Tiles Plc 39 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 1 June 2002 8 Dividends (Over) under provision in respect of prior period final dividend Interim paid of 1.35p (2001 - 1.15p) per ordinary share Final proposed of 5.80p (2001 - 3.85p) per ordinary share Total 7.15p (2001 - 5.00p) per ordinary share 2002 £(cid:213)000 (7) 606 2,609 3,208 2001 £(cid:213)000 5 515 1,725 2,245 9 Earnings per share The calculation of earnings per share is based on the earnings for the financial period attributable to equity shareholders and the weighted average number of ordinary shares as follows: Weighted average number of shares: For basic earnings per share Weighted average number of shares under option Number of shares that would have been issued at fair value For diluted earnings per share 10 Goodwill Group Cost Beginning and end of period Amortisation Beginning of period Charge for the period End of period Net book value Beginning of period End of period 40 Topps Tiles Plc 2002 Number of shares 2001 Number of shares 44,865,992 691,761 (466,524) 44,218,175 2,802,600 (2,219,604) 45,091,229 44,801,171 Total £(cid:213)000 338 36 17 53 302 285 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 1 June 2002 11 Tangible fixed assets Group Land and buildings Cost Beginning of period Additions Disposals End of period Depreciation Beginning of period Charge for the period Disposals End of period Net book value Beginning of period End of period Freehold £(cid:213)000 4,402 578 (2,801) 2,179 121 59 (83) 97 4,281 2,082 Short leasehold £(cid:213)000 1,093 5 - 1,098 339 140 - 479 754 619 Fixtures and fittings £(cid:213)000 13,462 3,031 (370) 16,123 2,565 1,628 (26) 4,167 10,897 11,956 Motor vehicles £(cid:213)000 317 359 (281) 395 13 85 (90) 8 304 387 Total £(cid:213)000 19,274 3,973 (3,452) 19,795 3,038 1,912 (199) 4,751 16,236 15,044 The net book value of tangible fixed assets includes £Nil (2001 - £505,000) in respect of fixtures and fittings held under hire purchase contracts. Cumulative finance costs capitalised included in the cost of tangible fixed assets amount to £19,000 (2001 - £85,000) for the Group. Topps Tiles Plc 41 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 1 June 2002 12 Fixed asset investments Cost Beginning and end of period Amounts written off Beginning of period Written off End of period Net book value Beginning of period End of period Company £(cid:213)000 14,652 - 12 12 14,652 14,640 The Company and the Group have investments in the following subsidiary undertakings, which principally affected the profits or net assets of the Group. To avoid a statement of excessive length, details of investments which are not significant have been omitted. Topalpha Limited Multi-Tile Limited % of issued ordinary shares held Principal activity 100% 100% Property management and investment Retail and wholesale distribution of ceramic tiles, wood flooring and related products All subsidiary undertakings are incorporated in Great Britain and are registered and operate in England and Wales. 13 Debtors Amounts falling due within one year: Trade debtors Amounts owed by subsidiary undertakings Other debtors Prepayments and accrued income 42 Topps Tiles Plc Group Company 2002 £(cid:213)000 773 - 1,515 1,514 3,802 2001 £(cid:213)000 619 - 2,473 1,586 4,678 2002 £(cid:213)000 - 10,542 244 15 10,801 2001 £(cid:213)000 - 6,586 12 15 6,613 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 1 June 2002 14 Creditors: Amounts falling due within one year Group Company Obligations under hire purchase contracts Bank loans (note 16(c)) Trade creditors Other creditors Corporation tax Proposed dividend Accruals and deferred income 15 Creditors: Amounts falling due after more than one year Obligations under hire purchase contracts Bank loans (note 16(c)) 2002 £(cid:213)000 - 220 9,912 1,555 1,847 2,609 1,792 17,935 2001 £(cid:213)000 175 285 10,799 3,235 1,488 1,725 1,000 18,707 2002 £(cid:213)000 - - 25 6 6 2,609 131 2,777 2002 £(cid:213)000 - 526 526 2001 £(cid:213)000 - - 19 2,083 7 1,725 24 3,858 2001 £(cid:213)000 9 2,437 2,446 Group Topps Tiles Plc 43 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 1 June 2002 16 Derivatives and other financial instruments The Group holds financial instruments to finance its operations, and to manage interest rate and currency risks arising from its operations. Consequently the main risks arising from the Group(cid:213)s operations are liquidity risk, interest rate risk and currency risk. Liquidity risk The Group(cid:213)s objective is to maintain continuity of funding through the use of retained profits and medium to long term borrowings. The maturity profile of the Group(cid:213)s borrowings are detailed in section (c) of this note. Interest rate risk The Group(cid:213)s objective is to manage the exposure to interest rate fluctuations whilst trying to minimise the cost of capital of the Group. Given the recent underlying downward trend in long term interest rates, the board has chosen not to adopt any fixed rates, as it believes that interest rates will continue to fall in the foreseeable future. Currency risk The Group has transactional currency exposures which arise from purchases by subsidiary undertakings in currencies other than the functional currency of the Group. The Group(cid:213)s policy is to periodically use forward contracts to hedge those transactions to eliminate any significant currency exposure. The frequency and amount hedged is decided by the board and depends upon the magnitude of the exposure and volatility of the currency involved. The numerical disclosures in this note deal with financial assets and financial liabilities as defined in Financial Reporting Standard 13 (cid:210)Derivatives and other financial instruments: Disclosures(cid:211) (FRS 13). Certain financial assets such as investments in subsidiary and associated companies are excluded from the scope of these disclosures. As permitted by FRS 13, short term debtors and creditors have been excluded from the disclosures, other than the currency disclosures. a) Interest rate profile The Group has no financial assets other than sterling cash deposits of £5,142,000 (2001 - £2,206,000) which are part of the financing arrangements of the Group. The sterling cash deposits comprise deposits placed on money market at call. 44 Topps Tiles Plc 16 Derivatives and other financial instruments (continued) a) Interest rate profile (continued) The interest rate profile of the Group(cid:213)s financial liabilities is as follows: Sterling - Borrowings Loan 1 Loan 2 Loan 3 Total NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 1 June 2002 2002 £(cid:213)000 488 258 - 746 Floating rate 2001 % 1.0 1.0 - £(cid:213)000 627 324 1,771 2,722 % 1.0 1.0 1.5 The interest rate on floating rate financial liabilities indicates the excess over bank base rate. Loans 1 and 2 are secured by fixed charges over the Group(cid:213)s freehold property and by floating charges over all other assets of the Group. b) Currency exposures The table below shows the Group(cid:213)s currency exposures; in other words, those transactional exposures that give rise to the net currency gains and losses recognised in the profit and loss account. Such exposures comprise monetary liabilities of the Group that are not denominated in the functional currency of the Group. As at 1 June 2002 these exposures were as follows: Functional currency of the Group: Sterling Net foreign currency monetary liabilities 2002 Euro £’000 - 2001 Euro £’000 104 The amounts shown in the tables above take into account the effect of forward contracts entered into to manage these currency exposures. Topps Tiles Plc 45 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 1 June 2002 16 Derivatives and other financial instruments (continued) c) Maturity of financial liabilities The maturity profile of the Group(cid:213)s financial liabilities was as follows: In one year or less In more than one year but not more than two years In more than two years but not more than five years In more than five years Total Hire purchase contracts 2001 £(cid:213)000 175 9 - - 184 Loans 2002 £(cid:213)000 220 220 306 - 746 Loans 2001 £(cid:213)000 285 292 849 1,296 2,722 Total 2001 £(cid:213)000 460 301 849 1,296 2,906 d) Borrowing facilities The Group had undrawn committed borrowing facilities, in respect of which all conditions precedent had been met, as follows: Expiring in one year or less Expiring in more than two years End of period 2002 £(cid:213)000 2,000 7,100 9,100 2001 £(cid:213)000 2,000 8,061 10,061 e) Fair values There is no material difference between the fair value and book value of the Group(cid:213)s financial assets and liabilities at either period end. 17 Provisions for liabilities and charges Deferred taxation Beginning of period Charged to profit and loss account End of period Group 2001 £(cid:213)000 665 228 893 2002 £(cid:213)000 893 114 1,007 The deferred taxation represents a full provision for the excess of capital allowances over book depreciation of fixed assets. 46 Topps Tiles Plc 18 Called-up share capital Ordinary shares of 12.5p each: Authorised Beginning and end of period Allotted, called-up and fully-paid Beginning of period Issued in the period End of period NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 1 June 2002 Number of shares 2002 £(cid:213)000 Number of Shares 2001 £(cid:213)000 56,600,000 7,075 56,600,000 7,075 44,805,018 175,747 5,601 22 42,476,258 2,328,760 44,980,765 5,623 44,805,018 5,309 292 5,601 During the period, the Company allotted 175,747 (2001 - 2,328,760) ordinary shares with a nominal value of £22,000 (2001 - £292,000) under share option schemes for an aggregate cash consideration of £324,000 (2001 - £1,196,000). 19 Reserves Group Beginning of period Premium on issue of new shares Retained profit for the period End of period Company Beginning of period Premium on issue of new shares Retained profit for the period End of period Merger reserve £(cid:213)000 (399) - - (399) Special reserve £(cid:213)000 14,917 - - 14,917 Share premium account £(cid:213)000 1,005 302 - 1,307 Share premium account £(cid:213)000 1,005 302 - 1,307 Profit and loss account £(cid:213)000 12,462 - 4,831 17,293 Profit and loss account £(cid:213)000 1,266 - 13 1,279 Topps Tiles Plc 47 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 1 June 2002 20 Reconciliation of movements in Group equity shareholders(cid:213) funds Profit for the period Dividends paid and proposed Issue of shares (net of expenses) Net additions to shareholders(cid:213) funds Opening equity shareholders(cid:213) funds Closing equity shareholders(cid:213) funds 21a)Reconciliation of operating profit to operating cash flows Operating profit Depreciation Profit on disposal of fixed assets Goodwill amortisation Increase in stocks Decrease (increase) in debtors (Decrease) increase in creditors 2002 £(cid:213)000 8,039 (3,208) 324 5,155 18,669 23,824 2002 £(cid:213)000 11,660 1,912 - 17 (1,726) 338 (1,775) 2001 £(cid:213)000 6,547 (2,245) 1,185 5,487 13,182 18,669 2001 £(cid:213)000 9,637 1,474 (344) 18 (1,345) (1,113) 2,692 Net cash inflow from operating activities 10,426 11,019 21b)Returns on investments and servicing of finance Interest received Interest paid Interest element of hire purchase rentals Net cash outflow from returns on investments and servicing of finance 2002 £(cid:213)000 57 (213) (7) (163) 2001 £(cid:213)000 84 (315) (14) (245) 48 Topps Tiles Plc 21c) Capital expenditure and financial investment Purchase of tangible fixed assets Sale proceeds of tangible fixed assets Net cash outflow from capital expenditure and financial investment 21d) Financing Proceeds from issue of ordinary share capital Expenses in connection with issue of share capital New loans Repayment of loans Capital element of hire purchase rentals Net cash (outflow) inflow from financing NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 1 June 2002 2002 £(cid:213)000 (3,954) 3,791 (163) 2002 £(cid:213)000 324 - - (1,976) (184) (1,836) 2001 £(cid:213)000 (5,143) 323 (4,820) 2001 £(cid:213)000 1,196 (11) 603 (863) (325) 600 Topps Tiles Plc 49 NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 1 June 2002 21e) Analysis and reconciliation of net funds Cash at bank and in hand Debt due within one year Debt due after one year Obligations under hire purchase contracts Net (debt) funds Increase in cash in the period Cash outflow from decrease in debt and hire purchase contracts Change in net funds from cash flows New hire purchase contracts Movement in net funds in the period Net debt start of period Net funds (debt) end of period 2001 £(cid:213)000 2,206 (285) (2,437) (184) (700) Cashflow £(cid:213)000 2,936 65 1,911 184 5,096 2002 £(cid:213)000 2,936 2,160 5,096 - 5,096 (700) 4,396 2002 £(cid:213)000 5,142 (220) (526) - 4,396 2001 £(cid:213)000 1,771 585 2,356 ( 234) 2,122 (2,822) (700) 50 Topps Tiles Plc NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) 1 June 2002 22 Financial commitments a) Capital commitments At the end of the period there were no capital commitments contracted but not provided for (2001 - £Nil). b) Pension arrangements The Group operates separate defined contribution pension schemes for employees and directors. The assets of the schemes are held separately from those of the Group in independently administered funds. The pension cost charge represents contributions payable by the Group to the funds and amounted to £169,000 (2001 - £129,000). c) Lease commitments Annual commitments under non-cancellable operating leases are as follows: Group 2002 2001 Operating leases which expire: - within one year - between two and five years - after five years Land and buildings £(cid:213)000 837 1,389 5,913 8,139 Other £(cid:213)000 103 287 22 412 Land and buildings £(cid:213)000 779 1,478 4,599 6,856 Other £(cid:213)000 92 303 16 411 23 Post balance sheet events On 10 June 2002 the Company acquired 50% of the ordinary shares in Topps Holding BV for a cash consideration of £493,000. Topps Tiles Plc 51 FIVE YEAR RECORD 1 June 2002 Turnover Operating profit Profit before taxation Shareholders(cid:213) funds Basic earnings per share1 Dividend per share1 Dividend cover Average number of employees Share price (period end)1 Notes 1. Adjusted for subdivision of share capital. 1998 £(cid:213)000 31,274 4,282 4,127 4,166 7.1p 2.40p 3.0 397 193p 1999 £(cid:213)000 42,996 6,091 5,828 9,338 9.9p 3.20p 3.0 585 212p 2000 £(cid:213)000 62,614 8,249 8,018 13,182 13.1p 4.30p 3.0 779 271p 2001 £(cid:213)000 74,642 9,637 9,414 18,669 14.8p 5.00p 2.9 941 330p 2002 £(cid:213)000 91,026 11,660 11,516 23,824 17.9p 7.15p 2.5 1,070 274p 52 Topps Tiles Plc NOTICE OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that the Annual General Meeting of Topps Tiles Plc (the (cid:210)Company(cid:211)) will be held at Unit D, Mortimer Road Industrial Estate, Narborough, Leicester, LE9 5GA on 8 October 2002 at 10.30am for the following purposes: Ordinary Business 1. to receive and adopt the report of the directors and the financial statements for the period ended 1 June 2002 and the report of the auditors thereon; 2. 3. 4. 5. 6. 7. to declare a final dividend of 5.80 pence per ordinary share on the ordinary shares for the period; to re-elect Barry Bester as a director of the Company; to re-elect Andrew Liggett as a director of the Company; to re-elect Rt. Hon Michael Jack as a director of the Company; to re-elect Victor Watson as a director of the Company; to appoint Deloitte & Touche as auditors and to authorise the directors to fix their remuneration; Special Business To consider and, if thought fit, pass the resolutions set out below which, in the case of Resolutions 8 and 9 will be proposed as Ordinary Resolutions and, in the case of Resolutions 10 and 11, will be proposed as Special Resolutions: 8. 9. THAT the authorised share capital of the Company be increased from £7,075,000 to £8,000,000 by the creation of 7,400,000 new ordinary shares of 12.5 pence each, such shares having the rights and privileges and being subject to the restrictions as set out in the Articles of Association of the Company. THAT the directors be and they are generally and unconditionally authorised for the purposes of and pursuant to section 80(1) of the Companies Act 1985 (the "Act") to exercise all the powers of the Company to allot relevant securities (as defined in section 80(2) of the Act) up to an aggregate nominal amount of £1,874,198.50 provided that this authority shall expire 5 years from the date of the passing of this resolution (unless previously revoked, varied or extended by the Company in general meeting) save that the Company may, before such expiry, make an offer or agreement which would or might require relevant securities to be allotted after such expiry and the directors may allot relevant securities pursuant to any such offer or agreement as if the authority conferred hereby had not expired and so that this authority shall be in substitution for all previous authorities conferred upon the directors pursuant to section 80 of the Act but without prejudice to the allotment of any relevant securities already made or to be made pursuant to such authorities. Topps Tiles Plc 53 NOTICE OF ANNUAL GENERAL MEETING (CONTINUED) 10. THAT subject to and conditional on the passing of Resolution 9 set out above, the directors be and they are empowered, pursuant to Section 95 of the Act, to allot equity securities (as defined in section 94 of the Act) for cash pursuant to the authority conferred by Resolution 9 above (as varied from time to time by the Company in general meeting) as if section 89(1) of the Act did not apply to any such allotment provided that this power shall be limited to: a) the allotment of equity securities in connection with a rights issue; and b) the allotment (otherwise pursuant to sub-paragraph (a) above) of equity securities up to an aggregate nominal amount of £281,130, and shall expire on the earlier of the conclusion of the next Annual General Meeting of the Company and the date falling 15 months after the date of the passing of this resolution (unless previously revoked, varied or extended by the Company in general meeting), except that the Company may before the expiry of any power contained in this resolution make an offer or agreement which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities in pursuance of such offer or agreement as if the power conferred by this Resolution had not expired. In this resolution 9 (a) (cid:210)rights issue(cid:211) means an offer of equity securities open for acceptance for a period fixed by the directors to holders of ordinary shares on the register on a fixed record date in proportion to their respective holdings of such shares or in accordance with the rights attached to them (but subject to such exclusions or other arrangements as the directors may deem necessary or expedient in relation to fractional entitlements or in relation to legal or practical problems under the laws of, or the requirements of any regulatory body or any stock exchange in any territory); (b) the nominal amount of any securities should be taken to be, in the case of a right to subscribe for or convert any securities into shares of the Company, the nominal amount of the shares which may be allotted pursuant to such right; and (c) words of expressions defined in or for the purposes of sections 89-96 inclusive of the Act shall bear the same meanings. 11. THAT the Company be generally and unconditionally authorised to make market purchases (within the meaning of section 163(3) of the Act) of its own ordinary shares of 12.5p each in the capital of the Company ((cid:210)ordinary shares(cid:211)) provided that: (a) the maximum number of ordinary shares hereby authorised to be purchased is 4,947,884; (b) the minimum price, exclusive of any expenses, which may be paid for an ordinary share is 12.5p; (c) the maximum price, exclusive of any expenses, which may be paid for an ordinary share is an amount equal to 105 per cent of the average of the middle market quotations for an ordinary share derived from the London Stock Exchange Daily Official List for the five business days immediately preceding the date on which such ordinary share is contracted to be purchased; 54 Topps Tiles Plc (d) the authority hereby conferred shall expire on the earlier of 7 April 2004 and the close of the next Annual General Meeting of the Company; (e) the Company may make a contract for the purchase of ordinary shares under this authority before the expiry of this authority which would or might require to be executed wholly or partly after the expiry of such authority, and may make purchases of ordinary shares in pursuance of such a contract as if such authority had not expired. Notes (i) This notice has been sent to all ordinary shareholders who are entitled to attend or be represented at the meeting. (ii) A member entitled to attend and vote at the AGM may appoint a proxy or proxies to attend on a poll vote and, on a poll, vote on his or her behalf. A proxy need not be a member of the Company. To be valid, a form of proxy and any power or authority under which it is signed, must be lodged with the Company(cid:213)s Registrars, Capita IRG Plc, Balfour House, 390/398 High Road, Ilford, Essex, IG1 1BR, no later than 48 hours before the time of the AGM. (iii) A proxy is not entitled to speak at the meeting except to demand a poll, and may vote only when a poll is taken. (iv) A form of proxy is enclosed and instructions for use are shown on the form. The fact that shareholders may have completed forms of proxy will not prevent them from attending and voting in person should they afterwards decide to do so. (v) As permitted by Regulation 41 of the Uncertified Securities Regulations 2001, only those shareholders who are registered on the Company(cid:213)s share register at 8.00am on 7 October 2002 shall be entitled to attend the AGM and to vote in respect of the number of shares registered in their names at that time. Changes to entries on the share register after 8.00am on 7 October 2002 shall be disregarded in determining the rights of any person to attend and/or vote at the AGM. (vi) The following documents are available for inspection by members of the registered office of the Company on weekdays (except Bank Holidays) during the normal business hours and at the place of the meeting but not less than 15 minutes prior to and during the meeting:- (a) the register of directors(cid:213) interests required to be kept under section 325 of the Act; and (b) copies of the directors(cid:213) service contracts. Andrew Liggett Secretary 22 July 2002 Registered Office: Rushworth House Wilmslow Road Handforth Wilmslow Cheshire SK9 3HJ Registered No. 3213782 Topps Tiles Plc 55 EXPLANATORY NOTES TO THE NOTICE OF ANNUAL GENERAL MEETING The Annual General Meeting of the Company this year will be held at the Company(cid:213)s premises at Unit D, Mortimer Road Industrial Estate, Narborough, Leicester, LE9 5GA, on 8 October 2002 at 10.30am. Four of the resolutions are to be taken at this year(cid:213)s AGM as special business. By way of explanation of these and certain of the other resolutions:- Resolution 2 — Final Dividend A final dividend of 5.80p per ordinary share is recommended by the directors for payment to shareholders on the register of members of the Company at the close of business on 4 October 2002. Subject to approval by the ordinary shareholders at the AGM, the dividend will be paid on 1st November 2002. An interim dividend of 1.35p per ordinary share was paid on 28th February 2002. Resolutions 3, 4, 5 and 6 — Re-election of Directors Barry Bester, Andrew Liggett, Rt. Hon Michael Jack and Victor Watson are the directors retiring by rotation this year and they offer themselves for re-election. All members of the board of directors submit themselves for re-election at least every 3 years with the exception of Victor Watson who at the age of 73 retires and offers himself for re-election annually. Brief biographical details about the directors standing for re-election appear on page 21 of the annual report and financial statements. Resolution 7 — Appointment of Auditors In the UK, an agreement for the partners and personnel of the Company(cid:213)s existing auditor, Arthur Andersen, to join Deloitte & Touche has recently been concluded. As a consequence of this, the board has concluded that it is now appropriate to propose a resolution at the AGM to appoint Deloitte & Touche as auditors to the Group for the ensuing year in place of Arthur Andersen and to authorise the directors to fix their remuneration. Resolutions 8, 9 and 10 — Increase of Authorised Share Capital, Appointment of Authority to Issue Shares and the Dis-application of Statutory Rights of Pre-emption In order to ensure that the authorised share capital of the Company is sufficient to cover the number of shares it is proposed by resolution 9 to authorise the directors to allot, it will be necessary to increase the current authorised share capital of £7,075,000 to £8,000,000 by the creation of 7,400,000 new ordinary shares. The increase in authorised share capital of the Company proposed by Resolution 8 presents an increase of just over 13%. The right of the directors to allot further shares in the capital of the Company requires in most cases the prior authorisation of the shareholders in general meeting under section 80 of the Companies Act 1985 ((cid:210)the Act(cid:211)). Resolution 9 will be put to members as special business to authorise the directors to allot ordinary shares with a nominal value of £1,874,198.50 out of the Company(cid:213)s unissued share capital representing approximately 33.3% of the Company(cid:213)s current issued share capital. The current issued share capital of the Company, is 44,980,765 ordinary shares which differs from that set out in the Annual Report for 2001 by the amount of 175,747 ordinary shares. This is a result of the issue of shares pursuant to options exercised under the Company(cid:213)s share option schemes during the course of the year. The authority shall expire five years from the date of passing this resolution. 56 Topps Tiles Plc Resolution 10 will seek to obtain power under section 95 of the Act to enable the directors to allot, for cash, shares with an aggregate nominal value of £281,130 equal to approximately 5% of the Company(cid:213)s current issued share capital without being required first to offer such securities to existing shareholders. The Company will thereby be given greater flexibility when considering future opportunities but the interests of existing shareholders will be protected as, except in the case of a rights issue or the allotment of shares under the Company(cid:213)s share option schemes, the proportionate interests of shareholders cannot, without their consent, be reduced by the issue for cash of new shares representing more than 5% of the current issued share capital. Save for the issue of shares pursuant to options granted under the Company(cid:213)s share option schemes, the directors have no present intention to allot any part of the unissued share capital of the Company or, without the prior approval of the Company in general meeting, to make any issue which would effectively alter the control of the Company or the nature of its business. This authority will expire immediately following the AGM next following the resolution or, if earlier, 15 months following the resolution being passed. Resolution 11 — Authority to Purchase Ordinary Shares At the AGM, ordinary shareholders are being invited under resolution 11 to grant authority to the Company to make market purchases of its ordinary shares. It is proposed such authority shall expire on 7 April 2004 or if earlier the conclusion of the AGM to be held in 2004. This authority will be limited to the purchase of not more than 11% of the ordinary shares currently in issue. This is less than the maximum of 14.9% of the ordinary share capital currently in issue which is permitted before a tender or partial offer to all shareholders is required to be made to perform any share buy-back. The maximum price payable under this authority will be 105% of the average of the middle market quotations of an ordinary share for the five business days before the relevant purchase and the minimum price will be 12.5p per ordinary share. The directors have no current intention of exercising the authority to purchase the Company(cid:213)s own shares. In considering whether or not to purchase ordinary shares under the market purchase authority, the directors will take into account cash resources, the effect on gearing and other investment opportunities before exercising the authority. In addition, the Company will only exercise the authority to make such a purchase in the market when the directors consider it is in the best interests of the shareholders generally to do so and it should result in an increase in earnings per ordinary share. As at 22 July 2002, there were options to subscribe for 2,150,228 equity shares outstanding under various schemes representing approximately 4.78% of the current issued share capital of the Company. If the authority sought by resolution 11 was exercised in full, the number of outstanding options would represent approximately 5.37% of the issued share capital following the repurchase of shares. Topps Tiles Plc 57 THE TEAM AAMER HAMEED Alan Donaghy Alan Faulkner Alan Feighan Alan Harding Alan McIntosh Alan Metcalfe Alan Monk Alan Parker Alan Saunders Alan Seall Alan Sproston Albert Neil Alex Bott Alex Large Alex Paterson Alexander Pearl Alfred Asare Alistair Fleming Allan Chigariro Allan Harper Alpesh Patel Alun Jones Amanda Green Amanda Hardy Amanda Hullett Amanda Tucker Amin Ladhu Amrish Bhimjiyani Amy Howard Amy Gray Andreas Moustakas Aamer Hameed Aaron Bloomfield Abdulkadir Kulmie Adam Coates Adam Elden Adam Hughes Adam Laidlaw Adam Lucas Adam McVinnie Adam Mills Adam Osborn Adam Shewan Adam Taylor Adam Thompson Adrian McCourt Adrian McGothigan Adrian Munday Adrian Pickup Adrian Wild Aidan Ward Aileen Crossley Ajit Ashani Akommil Ali Alan Abbott Alan Allsopp Alan Clark 58 Topps Tiles Plc People are our business... Our aim is to achieve consistent high levels of customer service and this is reflected by the commitment shown by all our employees. Andrew Anthony Andrew Bosley Andrew Bradshaw Andrew Carlisle Andrew Clay Andrew Collins Andrew Curtis Andrew Endersby Andrew Faulkner Andrew Hampshire-Bird Andrew Hanson Andrew Hill Andrew Jones Andrew Keirle Andrew Liggett Andrew McLaurin Andrew Monks Andrew Moore Andrew Moore Andrew Parnell Andrew Press Andrew Smith Andrew Thomas Andrew Ward Andrew Waterfield Andrew Williams Andrew Willis Andrew Withers Angela Harrison Angela Tremelling Anita Parsfield Ankur Jindal Anna Timney Anne Day Anne Lloyd Anne McCabe Anne Stevens Annette Harris Anthony Christopher Anthony Cottrell Anthony Cox Anthony Eaton Anthony Gilbert Anthony Grimshaw Anthony Houghton Anthony Kerr Anthony Linsell Anthony Matthews Anthony Molyneux Anthony Moulds Anthony Warner Antony Beazer Antony Plant Antony Zawadski Arnold Harrison Ashley Flint Ashley Jordan Ashley O’Loughlin Asvin Shah Augustus Slater Barbara Dormer Barbara Edge Barrie Taylor Barry Bester Barry Price Barry Squires Ben Armitage Ben English Ben Fielding Ben Fitzgerald Ben Henfrey Ben Whiting Ben Woollins Benjamin Andrews Benjamin Cripps Benjamin Hammond Benjamin Marland Benjamin Mills Benjamin Rowlands Bernard Cope Bertil Boyles Brad Crosthwaite Brant Wells Brenda Bowles Brendan Lumb Brendan Roberts Brendon Williams Brett Hall Brian Adams Brian Dewey Brian Fisher Brian Glover Brian Henderson Brian Richards Brian Young Bruce Fielding Bryan Hartley Byron Coles Carina Lowe Carl Bebbington Carl Bradbury Carl Dicks Carl Dyke Carl Fraser Carl Kerr Carl Sheppard Carl Towey Carol Lakin Carol Sudlow Caroline Bennett Caroline Gordon Caroline May Cassandra Huitson Catherine Grobler Catherine Hinde Catherine Simmons Chan Gokani Charlene Saunders Charles Williams Cheryl Holmes Chetna Shah Chris Bain Chris Cartey Chris Crulkshank Chris Evans Chris McGill Chris Rumble Chris Tupper Christina Langridge Christine Glover Christine Hendry Christine Pyne Christine Rea Christine Wadsworth Christine Whiteman Christopher Cooper Christopher Davis Christopher French Christopher Goodwin Christopher Hunter Christopher Lount Christopher Metcalf Christopher Newman Christopher Read Christopher Turley Christopher Warner Christopher Wenlock Cindy Dickens Claire Sutcliffe Clinton Quinn Colin Butler Colin Dixon Colin Hampson Colin Hoban Colin Markham Colin Probert Colin Rymer Colin Watkins Constantinos Pedhiou Craig Neilson Craig Ollard Craig Tetlow Craig Thornton Craig White Crescent Baron Dale Hoy Damian Hassall Damien Cramp Dan Fawcitt Daniel Beaven Daniel Brooks Daniel Carroll Daniel Cole Daniel Endsor Daniel Fallows Daniel France Daniel Gibbs Daniel Jones Daniel Little Daniel McAllister Daniel Moores Daniel Musguin Daniel Platt Daniel Saunders Daniel Savva Daniel Scott Francis Daniel Smith Daniel Whitehand Danielle Smythe Danny Campling Danny Eastwood Danny Taylor Darran Wood Darrel Bester Darrel Driver Darrell Morgan Darren Cawkwell Darren Connor Darren Cooper Darren Doherty Darren Hall Darren Palmer Darren Ryn Darren Saker Darren Simm Darryl Ashbolt Darryn Walker Dave Hampson David Asquith David Bailey David Bourne David Broadbent David Canning David Carpenter David Chapman David Colwell David Daulton David Dewey David Edwards David Evans David Fitzgerald David French David Gridley David Harper David Hatton David Henderson David Hirst David Hulme David Kilgour David Lalley David Linwood David Lott David Macartney David Mallyon David Marshall David Mitchell David Needham David Nelson David Oliver David Parr David Price David Rogers David Ruddick David Savage David Steel David Stott David Stoughton David Strain David Thomasson David Turner David Walker David Warrilow David Williams David Williams Dean Bennett Dean Brown Dean Holder Dean Johnson Dean Marshall Debbie Hynd Deborah White Deborah Williams Debra Davies Denis O’Brien Denise Nash Dennis Cragen Derek Browne Derek Lambourn Derek Parsons Derek Reynolds Derek Sim Derek Smith Diane Shatford - Butcher Dilawar Ali Dinesh Hirani Dion Van Der Murwe Dolores O’Malley Donna Shirley Donna Spence Dorren Hyatt Duncan Bull Dwayne Howard Dylan Lloyd-Hughes Dylan Roberts Edmund Smith Edward Derbyshire Edward Dove Edward Sellors Edward Walker Elaine Aitken Elizabeth Donovan Elizabeth Narciso Elizabeth Stonard Ella Horswell Elton Thomas Emily Borderick Emin Demirkaya Emma Brookes Emma Casey Emma Cunliffe Emma Jarram Emma Parker Emma Whatson Enid Lamb Enrico Grimm Ewan McNicholl Farooq Younis Filip Taelman Flora Tuitt Frances Stevens Francis McMillan Gareth Ward Gareth Wilson Gary Asher Gary Curtis Gary Firth Gary Gaughan Gary Glasgow Gary Grier Gary Procter Gary Watson Gary Wilcox Gavin Dwyer Gavin Bennett Gavin Greeno Gavin McGregor Gavin Mitchell Gavin Ramsey Gay Stephens Geoff Sutters Geoffrey Gordon Topps Tiles Plc 59 THE TEAM (CONTINUED) Geoffrey Toms Geoffrey Webster George Wilson Geraldine Plumtree Gerard Duffy Gerard Mallon Gerry Lazaro Gerry West Gillian Grace Gillian Gray Glen Claridge Glenis Shirley Glenn Fordyce Glenn Jessop Glenn Madgin Glenys Ogden Glyn Draycott Glyn Rogers Gordon Dwyer Gordon Kerr Graham Brophy Graham Chapman Graham White Gregg Wall Gurjinder Rai Harry Broadbent Harry Morris Hayley Doughty Hayley Reeves Heath Maryson Heather Blore Heather Holmes Helen Greatbatch Helen McDermott Heriberto Quintero Howard Farmer Huw Owens 60 Topps Tiles Plc Ian Bloomfield Ian Chance Ian Fairfield Ian Hobson Ian Jones Ian Jones Ian Lightowlers Ian Marshall Ian Mathers Ian McInteer Ian McLean Ian McNamara Ian Mathers Ian McInteer Ian McLean Ian McNamara Ian Pennington Ian Reavely Ian Smith Ian Wintertburn Imran Ashraf Imran Khan Inderjeet Jutlay Irfan Razaq Ivan Frampton Ivar Jensen Jacqueline Byrne Jacqueline MacGillivrah Jagdesh Varsani Jaimie Evans James Allington James Bott James Carpenter James Coles James Eastham James Edge James Edwards James Gaving James Gentleman James Hardy James Hazeltine James Koroma James Maggs James Manders James McGuigan James Mercer James Metcalf James Moores James Myatt James Paterson James Patston James Phipps James Richards James Robertson James Ryder James Sawyer Jamie Bannister Jamie Brewer Jamie Turner Jamie Wilkie Jane Ladlow Janet Burgess Janet Lockyer Janet Riley Janice Millett Jasbinder Pal Jason Collins Jason Doe Jason Evans Jason Hewan Jason Marlow Jason Martin Jason Meadows Jason Moore Jason Morley Jason Pratt Jason Schofeild Jason Smith Javeed Parkar Jawed Iqbal Jayantilal Patel Jayawthe Weerasinge Jayesh Dhokia Jayesh Kalidas Jayson Warden Jennifer Donlan Jenny Seabrook Jeremy Harris Jessica Merryweather Jeten Varsani Jethu Miah Jitinder Bhatowa Joanne Smith Jodie Robb Jody Donald Joe Cox Joe Lucas Johanna Asher John Anderson John Coles John Collier John Darcey John Daulton John Davidson John Davies John Doodson John Douglas John Forden John Gallagher John Herr John Hickey John Kelleher John Kent John Killicoat John MacRae John McKenna John Moat John Reilly John Russell John Smith John Smith John Stanton John Sutton John Thompson John Tyrrell Johnathon Cox Jon Oliver Jon Potts Jon Utah Jonathan Coombs Jonathan Hargreaves Jonathan Kirtley Jonathan Pilling Jonathan Whitehead Jonathon Clapton Jonathon Parmenter Jonathon Perkins Jonathon Sheerin Joseph Bentley Joseph Quinn Josephine Hilldrup Joyce Davies Judy Prescott Juginder Gill Juile Moorhead Julian Lloyd Julian Tulk Julie Cox Julieanne Addinall Justin Roberts Kalpesh Shah Karen Lakin Karen March Karen Nicholson Karen Pritchard Karen Ross Karen Sutcliffe Karl Brooks Karl Creese Karl Cumberbatch Karl Jackson Karl Madge Karl Robbins-Sones Karl Sisson Karl Vallance Karl Winship Kate Harvey Kathryn Bell Kathryn Robinson Kathryn Rowley Katie Howe Katrina Pennington Keiron Birch Keith Dooley Keith Earl Keith Rudkin Kelly Ellison Kelly Evans Kelly Thompson Kelly Whyte Kelly Wrenn Kelvin Britton - Miles Ken Bragger Kenneth Frankland Kenneth Oldham Kenneth Owen Kenneth Timms Kenneth Turner Kerri Bester Kerri Wood Kerry Atkinson Kerry Blatch Kerry Hume Kerry McAulay Kevan Richardson Kevin Bowtle Kevin Croft Kevin Dodson Kevin Dowling Kevin Gallagher Kevin Hayes Kevin Mottram Kevin Nelson Kevin Sherriff Kevin Williams Kieran Barnes Warden Kieran Park Kievin Bennett Kimberley Haines Kris Kingsley Kulwinder Kaur Kwame Yamoa Larissa Gurney Laura Johnson Laura Kershaw Laura Shephard Laurence Davies Laurence Loxam Lee Bowdery Lee Brockwell Lee Brougham Lee Cotterill Lee Culley Lee Dover Lee Galloway Lee Harris Lee Harrison Lee Johnston Lee Langmaid Lee Markwell Lee Marron Lee Maxey Lee Morris Lee Payne Lee Pinder Lee Reeves Lee Riches Lee Street Lee Wright Lee Yerex Leigh Holden Leigh Morris Leighton Townsend Leo O’Doherty Leonard Denton Leonard Sheldrick Leonard Wilson Leslie Baker Leslie Maher Leslie Thomson Lewis Kerton Lewis Welsh Liam Hollinrake Liam Johnson Liam Taylor Linda Hadley Lisa Kourousou Lisa Sheppard Lisa Walker Llewellyn Gordon Loretta Daley Lorna Ballantyne Lorraine Gibbons Louis McEvilly Louise Ashley Louise McGough Luke Jones Luke Robinson Lynda Prescott Lyndsey Martin Lynette Grimes Lynn Davey Lynn Domsalla Magnus White Mandy Aidney Manjeet Thathal Manoj Patel Marc Bartlett Marc Moules Margaret Clapham Margaret Lawrie Margaret Rayner Margaret Seaton Marianne Pettengell Marianne Stevens Mark Allen Mark Balcombe Mark Bentley Mark Bradbury Mark Cash Mark Curwen Mark Dawson Mark Farquhar Mark Garrity Mark Gasson Mark Hadfield Mark Hawney Mark Hilton Mark Hirst Mark Hodgkinson Mark Holman Mark Jepson Mark Johnson Mark Jones Mark Lever Mark Moore Mark Mottershead Mark Pearce Mark Riley Mark Roberts Mark Robinson Mark Stephenson Mark Strong Mark Thompson Mark Tokley Mark Traynor Mark Walmsley Martin Baker Martin Ball Martin Derricott Martin Flynn Martin Pye Martin Ridgway Martin Shenton Martin Sinnott Martin Van Der Werf Martin Winterburn Marvin Cyrus Mathew Dunn Mathew Howell Mathew Merrick Mathew Penny Matthew Askew Matthew Ball Matthew Beddow Matthew Dobson Matthew Foster Matthew Hawley Matthew Kelher Matthew McGarry Matthew McKune Matthew Pickley Matthew Williams Mehmet Asdoyuran Melanie Gardiner Melton Thompson Melvin Young Michael Bateman Michael Bolden Michael Boughton Michael Bridgwater Michael Coward Michael Cumberbatch Michael Dunn Michael Earls Michael Finn Michael Foster Michael Gay Michael Griffiths Michael Hickson Michael Holland Michael Humpage Michael Jack Michael Kench Michael Litster Michael Lock Michael O’Gorman Michael Passmore Michael Pow Michael Roddy Michael Skinner Michael Stephenson Michael Williams Micheal Harrison Micheal Millin Michele Calver Michelle Bovey Michelle Doran Michelle Kempson Michelle Sutherland Mike Booth Mitul Amin Mohamed Iqbal Mohamed Patel Mohammad Waheed Mohammed Amreaz Mohammed Parvaz Monica Corley Naomi Cullen Naomi Mildenhall Nasser Mpoza Natasha Maganlal Nathan Collins Nathan Jander Nathan Seigneur Nathan Westland Nazia Bibi Neil Cattroll Topps Tiles Plc 61 THE TEAM (CONTINUED) Neil Curtis Neil Hendy Neil Homan Neil Kelly Neil Ketnor Neil McQuire Neil Potkin Neil Worthington Neville Howgate Nicholas Bradshaw Nicholas Carter Nicholas Deary Nicholas Lawrence Nicholas Ounstead Nicholas Salisbury-Jones Nicholas Withers Nicola Acres Nicola Dearden Nicola West Nicolas Wassell Nigel Barugh Nigel Bayliss Nigel Fleming Nigel Slaughter Nikki Brown Nikolai Nikoloff Nilesh Dahya Nina Abbotts Nita Blackwell Nitesh Dhokia Okan Ozgu Owen Rawlinson Pamela Brydon Patricia Croft Patricia Squires 62 Topps Tiles Plc Patricia Walker Patrick McLaughlin Paul Anderson Paul Bainbridge Paul Bourne Paul Burkett Paul Carter Paul Chapman Paul Coffey Paul Collins Paul Copeland Paul Cunliffe Paul Danbury Paul Daubney Paul Davies Paul Davis Paul Ferguson Paul Gatehouse Paul Gill Paul Glover Paul Griffiths Paul Groombridge Paul Halliwell Paul Hammond Paul Irving Paul Kemp Paul Lathrope Paul Laverty Paul Leaford Paul Liggett Paul Marlow Paul Martin Paul McCullock Paul Nicholls Paul Peacock Paul Pratley Paul Revell Paul Robinson Paul Ruddle Paul Savage Paul Sutton Paul Thornecroft Paul Williams Paul Williams Paul Woolnough Paul Wright Paula Budsworth Pauline Grenfell Penny Hook Peter Byrne Peter Charters Peter Davey Peter Davidson Peter Fallows Peter Johnson Peter Manning Peter Smith Peter Sumner Peter Wright Phil Peacock Philip Hawkeswood Philip Kelly Philip Maher Philip McCarney Philip Meakin Philip Tomlin Phillip Dunn Phillip Fitzgibbons Phillip Hunt Phillip Johnstone Pratik Narayan Pratik Parekh Pritum Assani Raj Surani Rajan Mehta Rajiv Vadgama Rebecca Bailey Rebecca Jacques Rebecca Oblein Reedwan Desai Rex Ogden Rhonda Partridge Richard Ball Richard Barnes Richard Beckham Richard Bickers Richard Brookfield Richard Carter Richard Clark Richard Diedrick Richard Gallagher Richard Hamblen Richard Harris Richard Homan Richard Hutcheson Richard Lee Richard Mauto Richard Scott Richard Smallman Richard Smith Richard Whitmore Ricky Ship Ricky Stevens Robert Bellenie Robert Cairns Robert Carvey Robert Cruickshank Robert Davis Robert Docker Robert Exley Robert Hadley Robert Hodgson Robert Moss Robert Myers Robert Rayner Robert Tenn Robert Trigg Robert Waldon Robert Wright Roberto Di-Leva Robin Holt Rodney Sanders Roger Bailey Ronald Daniels Ronald Emmanuel Ronald George Ronald Perrott Rory McGoldrick Rosina Taylor Roy Haddon Roy Harlow Roy Peasland Russell Adgey Ryan Mark Ryan Mason Sagren Naidoo Sam Jandu Samantha Cato Samantha Sayer Samuel Wray Sandra Lloyd - Hughes Sandra Robinson Sanel Sahbaz Sarah Earthey Sarah Jones Sarah Pimm Sarah Ratcliffe Satyan Meisuria Schumone Groener Scott Arundell Scott Cockle Scott Hickman Scott Humpston Scott Meadows Scott Picken Scott Porter Scott Slaughter Scott Smith Scott Walker Scott Williams Sean McClafferty Sean Wixen Sebasteon Fender Shahid Mahmood Shane Billson Shane Malone Shane Wood Shanor Ali Sharon Muir Shaun Butcher Shaun Hayes Sheila Robertson Sheila Whetton Sherief Madkour Aly Shirley Girdler Simon Benn Simon Dover Simon Farr Simon Fullaway Simon Green Simon Jones Simon Powell Simon Rayner Simon Reed Simon Tunnicliffe Simon Walker Sion Jackson Socrates Pantelides Sophia Tourache Stacey Hemington Stacey Wilson Stanley Crowther Stephanie Nevett Stephen Ainsworth Stephen Clarke Stephen Collins Stephen Dempster Stephen Grange Stephen Hunter Stephen Jones Stephen Lewis Stephen May Stephen McLeod Stephen Melia Stephen Nunn Stephen O’Callaghan Stephen Parry Stephen Price Stephen Reed Stephen Ridout Stephen Smith Stephen Unsworth Stephen Unuth Stephen Wilson Stephenie Bispham Steve Budd Steve Gaylor Steve Ho Steve Nicholson Steven Bowden Steven Coombs Steven Firth Steven Godwin Steven Gregory Steven Jacobs Steven Kaye Steven Long Steven Nelson Steven Powner Steven Pratt Steven Rimes Steven Tinkler Steven Whittle Steven Wright Stewart Solomons Stewart Trace Stuart Argyle Stuart Clark Stuart Fox Stuart Goodbun Stuart Hood Stuart Hopwood Stuart Kitching Stuart Leatherland Stuart Massey Stuart Pemberton Stuart Perrins Stuart Rixon Stuart Thompson Stuart Williams Suriya Stone Susan Attwell Susan Fairweather Susan Henshall Susan Hunt Susan Wright Suzanne Buckley Terence Dooley Terence Melia Teresa McDonald Terry Harrod Thamir Abdul Hameed Theresa Baker Thomas Cunningham Thomas Fry Thomas Jones Thomas Lewis Thomas Porter Tim Coleman Timothy Boardman Toby Bateson Tom Cook Tom Mallion Toni Dowley Tony Alliband Tony Bennington Tony Chapman Tony Davies Tony Watson Tracey Gallagher Tracey Kenny Tracey Kenrick Tracy Ryan Tracy Stevens Trevor Discombe Trevor Muckett Usman Anwar Valerie McKenna Valerie Vernon Vicky Edge Vicky Evans Victor Watson Victoria Bachell Victoria Bryant Victoria Tarn Vikram Talati Vinesh Jilka Vivienne Johns Warren Bull Warren Smith Wayne Bennett Wayne Farini Wayne Hardy Wayne Hughes Wayne Quaintance Wayne Randell Wayne Sponneck Wendy Altimas Wesley Atack Wetengere Kitojo William Bailey William Bowers William Gunshon William Harvey William Russon William Watkins Wyn Hopkins Yvonne Archer Yvonne Burgess Zafer Cetinel Zaid Tufail Zoe Buckley Zoe Capener Zoe Cope Zoe Langridge ZOE LANGRIDGE Topps Tiles Plc 63 STORE LOCATIONS CENTRAL REGION Aston Banbury Bedford Burton Bury St Edmunds* Cannock* Colchester* Coventry Derby Derby Floor Store* Great Yarmouth Hereford* Ipswich Kidderminster Kings Heath Kings Lynn Leicester Lincoln Luton Milton Keynes Narborough Newcastle-U-Lyne Northampton Norwich Nottingham Oldbury Peterborough Sheldon Shrewsbury Solihull Stafford Stoke on Trent Tamworth West Bromwich* Wolverhampton LONDON AND THAMES SOUTH Basildon Beckton Brighton Broadstairs Canterbury* Catford Charlton Chingford Colindale Crayford 64 Topps Tiles Plc Croydon Dagenham Edmonton Fulham* Gatwick Gunnersbury Harlow Ilford Maidstone Mitcham New Southgate Newbury Old Kent Road Orpington* Penge Raynes Park Reading Romford Southall Southampton Southend Stamford Hill Swindon Tonbridge Tunbridge Wells Twickenham* Uxbridge Vauxhall Watford Wembley NORTH WEST Aintree Blackburn Blackpool Bolton Cheadle Chester Chester 2 Cleveleys Crewe Failsworth Liverpool* Macclesfield Morecambe Oldham Preston Sale Salford Snipe (Audenshaw) St Helens Stockport Warrington Widnes Wigan NORTH Barrow in Furness Carlisle Chesterfield Durham* Gateshead Harrogate Huddersfield Leeds Stockton Sunderland Tyneside Wakefield York SCOTLAND Aberdeen Edinburgh Falkirk* Greenock Hillington Inverness Linwood Perth Rutherglen Wishaw SOUTH WEST Barnstaple Basingstoke* Bristol Cardiff Cheltenham Christchurch Cribbs Causeway* Exeter Gloucester Newport Plymouth* Poole Swansea TOTAL 139 STORES Greater London 26 Stores Holland 1 Store Taunton Weston Super Mare Winchester* Yeovil* OVERSEAS Holland* Stores at beginning of period New stores Total Closures Stores at end of period *New store 2001/2002 121 19 140 (1) 139 TOTAL 32 STORES NORTH Darlington Doncaster Hull Leeds Sheffield SOUTH WEST Bournmouth* Bridgend Exeter SCOTLAND Aberdeen* CENTRAL REGION Cambridge Coventry Fenton Great Barr Leicester Milton Keynes* Nottingham Peterborough Stoke on Trent Worcester LONDON AND THAMES SOUTH Charlton Farnborough* New Southgate Orpington Swindon Waltham Cross* Wembley NORTH WEST Bolton* Crosby Oldham Preston Stockport Wigan* Stores at beginning of period New stores Total Closures Stores at end of period *New store 2001/2002 26 7 33 (1) 32 9 1 1 1 4 4 4 1 2 1 0 d e t i m i L s n o i t a c i n u m m o C X H B y b d e c u d o r P Topps Tiles Plc Rushworth House, Wilmslow Road, Handforth, Wilmslow, Cheshire SK9 3HJ T 01625 446 700 F 01625 446 800 www.ToppsTiles.co.uk