One company, one year, one objective... Topps Tiles Plc Annual Report and Financial Statements 2005 growth! Stuart Williams President and Co-Founder CONTENTS 01 FINANCIAL HIGHLIGHTS 03 CHAIRMAN’S STATEMENT 05 STRATEGY STATEMENT 07 CHIEF EXECUTIVE’S STATEMENT 11 OPERATING AND FINANCIAL REVIEW 17 CORPORATE AND SOCIAL RESPONSIBILITY 20 EXECUTIVE DIRECTORS 21 NON-EXECUTIVE DIRECTORS 22 OPERATIONAL DIRECTORS 24 DIRECTORS AND ADVISORS 26 DIRECTORS’ REPORT 29 CORPORATE GOVERNANCE STATEMENTS 31 REMUNERATION REPORT 36 INDEPENDENT AUDITORS’ REPORT 38 CONSOLIDATED PROFIT AND LOSS ACCOUNT 39 BALANCE SHEETS 40 CONSOLIDATED CASH FLOW STATEMENT 41 NOTES TO THE FINANCIAL STATEMENTS 60 FIVE YEAR RECORD 61 NOTICE OF ANNUAL GENERAL MEETING 64 EXPLANATORY NOTES TO THE NOTICE OF ANNUAL GENERAL MEETING 66 FINANCIAL CALENDAR 67 THE TEAM 72 STORE LOCATIONS THE TOPPS TILES GROUP IS BRITAIN’S BIGGEST TILE AND WOOD FLOORING SPECIALIST WITH 244 STORES THROUGHOUT THE UK, AND WITH A CONTROLLED OPENING PROGRAMME OF 24 NEW STORES PER ANNUM, THE UK STORE TARGET OF 350 STORES IS WELL WITHIN REACH. TOPPS’ RECORD SINCE FLOTATION IN 1997 IS CONSISTENTLY EXCELLENT WITH BASIC EARNINGS PER SHARE SHOWING OVER 40% AVERAGE ANNUAL COMPOUND GROWTH OVER THE PAST EIGHT YEARS AND WITH OUR DOMINANT MARKET POSITION, MORE NEW STORES AND A GROWING MARKET, THE BOARD EXPECTS A CONTINUED BUILD IN SHAREHOLDER VALUE. FINANCIAL HIGHLIGHTS 52 WEEKS RESULTS TO 1 OCTOBER 2005 +10.0% +16.1% Group turnover increased by 10.0% to £173.3 million (2004: £157.6m for 53 weeks) Profit Before Tax increased by 16.1% to £39.2 million (2004: £33.8m for 53 weeks) +18.1% +18.8% Basic earnings per share increased to 13.34p (2004: 11.30p) Dividend per share increased to 9.50p (2004: 8.00p) > Group gross margin increased to 61.3% > Dividend policy maintained at 1.41 times cover (2004: 60.5%) > Group like-for-like turnover increased by > A final net dividend of 6.00 pence per share to 3.4% be paid on 31 January 2006 > Operating costs increased to 40.0% > Net cash position of £21.8m (2004: 39.9%) > Profit before tax margin increased to 22.6% > A net 24 new stores opened in the UK in this (2004: 21.4%) financial period > Profit before tax margin, excluding > 13 stores now trading in Holland (2004: 11 exceptional profit on capital items, increased to 21.7% (2004: 21.1%) stores) 01 TOPPS TILES PLC Annual Report and Financial Statements 2005 15 stores refurbished during the last financial period, as part of our commitment to infrastructure investment 244 stores trading across the UK with a further 13 in Holland 24 new stores (net) opened in the last 12 months Turnover (£m) 200 150 100 50 0 173.3 157.6 118.9 95.7 74.6 2002 2003 2004 2005 2001 Source : see page 13 02 TOPPS TILES PLC Annual Report and Financial Statements 2005 CHAIRMAN’S STATEMENT 244 stores - one focus The key to our continued success is our commitment to the highest levels of customer service and both the range and quality of products that we offer. Barry Bester Chairman I am pleased to report another strong performance by the Group with record profits and increased UK market share. We have consolidated our position as the leading UK ceramic tile and wood flooring specialist, backed by what is now a truly national brand. The new Topps Distribution and Marketing Centre is fully integrated with the capacity to support our UK store target of a minimum of 350 stores. The period has seen a particularly weak UK consumer environment, however I am pleased to report the resilience of our business model has enabled us to continue to deliver record results and to outperform the market. Since flotation in 1997 total shareholder return has grown by over 2,000% and we have consistently been a top performing company in the FTSE Index. Financial Results Group turnover has increase by 10.0% over the period to £173.3 million, with profit before tax increasing by 16.1% to £39.2 million. Gross margins have improved to 61.3% compared to 60.5% in 2004. 2004 was an exceptional year in respect of trading and if you look at the trend over the last two years like-for-like sales have improved 24.9% Our business continues to be highly cash generative and at the year end we had net cash balances of £21.8 million. Board Changes As announced at the Annual General Meeting on 11 January 2005, Stuart Williams, my co-founder of Topps, stepped down as Co-Chairman and Board Director on 31 March 2005. I am delighted however that Stuart has taken on the newly created non Board advisory role of President and continues to offer his expertise and guidance to the business. Dividend The Board continues to be committed to a progressive dividend policy and is recommending a final dividend of 6.00 pence per share. Together with the interim dividend of 3.50p per share the total dividend for the period will be 9.50 pence per share, an increase of 18.8%. The dividend will be paid on 31 January 2006 to all shareholders on the register as at 13 January 2006. People Our staff are fundamental to the success of the business and I would like to take this opportunity to thank all our employees for their inspiring contributions and continued commitment during the period. We have created another 174 jobs as a direct result of our expansion programme. Outlook Although the current UK trading environment continues to be volatile, I remain confident that the strength of our business model and the expertise of the strong management team will enable us to continue to grow the business and ensure the delivery of sustainable growth for shareholders. Set against extremely strong comparatives last year and the tough UK trading, growth in like-for-like sales for the period was 3.4%, with overall sales growth of 10.0%. Barry Bester Chairman 03 TOPPS TILES PLC Annual Report and Financial Statements 2005 Customer service > Store locations > Our success is built on four key cornerstones: > > Store layout Stock availability 04 TOPPS TILES PLC Annual Report and Financial Statements 2005 STRATEGY STATEMENT 4 key cornerstones - one strategy We always aim to provide high levels of customer service across both our brands 1. Customer service 3. Store layout We continually strive to provide and maintain high levels of customer service and regard it as fundamental to the ongoing success of Topps. The quality and performance of our staff at every level is key and we train all our staff at our own national and regional training centres and through our e-learning tile training college. Customer service remains our number one priority and it is our policy to be honest, helpful and knowledgeable but never pushy. We complement the advice that our staff can give in store with a range of services offering practical support to customers which include Loan-a-Tile, free “How to” video or DVD, tile cutting service and our buy-back service which allows undamaged stock tiles to be returned within 28 days for a full refund. Our average store size is just over 6,300 square feet and can accommodate our in-house formats including Floor Store and Stone Works, which usually have their own individually branded section of the store. All our stores have a similar layout, are clearly branded and designed to be customer-friendly with product and pricing clearly displayed on colourful and informative point-of-sale displays. The stores are mini-warehouse style, which is ideal to display our extensive product ranges as well as ensuring they are easy to navigate with trolleys, prams and pushchairs. 2. Store locations 4. Stock availability Topps stores are purposely located in highly visible destinations, on or close to busy roads and always with parking facilities. Our stores in the main are not located on high streets or large retail parks. Our controlled expansion programme is taking us across the UK and a full list of stores can be found at the end of this report or on our website at www.toppstiles.co.uk. Our stores trade seven days a week on Monday to Saturday opening from 8.00am to 6.00pm and on Sundays either 10.00am to 4.00pm or 11.00am to 5.00pm, with a number of larger stores opening until 8.00pm during the week. 05 TOPPS TILES PLC Annual Report and Financial Statements 2005 Topps Tiles and Tile Clearing House offer a huge choice of product, with the best the world has to offer in wall and floor tiles, natural stone, laminate and real wood flooring. Our extensive in-store product offering is supported by on-site stock facilities. The combination of choice of product with the availability of stock is unrivaled in the UK. Our new marketing and distribution centre ensures that all our stores receive at least two deliveries a week to ensure stock levels are maintained at every store. +26% projected market growth over the next five years 6,307 sq.ft is the average size of our mini-warehouse style stores Continued TV sponsorships Voted Company of the Year for the second consecutive year at Price Waterhouse Coopers PLC Awards Overall sales and like-for-like sales growth (%) 40 30 20 10 0 32.5 21.5 28.3 11.3 24.2 15.2 19.2 5.3 10.0 3.4 2002 2003 2004 2005 2001 Source : see page 13 06 TOPPS TILES PLC Annual Report and Financial Statements 2005 CHIEF EXECUTIVE’S STATEMENT 2 core brands - one objective Driving the business forward stock range of laminate and real wood flooring. The average square footage of our stores has increased gradually and is now over 6,300 square feet. Our Stoneworks concept has continued to be popular, as consumers’ appetite for natural product grows. We now have 19 stores open with a full Stoneworks offering and we also offer a selected range of these products in all our other stores. Holland We now have a total of 13 stores trading in Holland under our 50/50 joint venture including two new stores opened in the period. It is our intention to open a minimum two stores in the next financial period. Marketing, advertising and sponsorship As part of our strategy to be “the brand” of choice in the UK we have again continued our nationwide marketing and advertising programme. Our approach is two fold: using national television advertising both digital and terrestrial coupled with print and radio advertising on a regional basis. This is not only an effective strategy in respect of maximising our reach UK wide but is also a cost effective approach, spreading costs across each store in concentrated areas such as central London, for example, the Carlton Weather sponsorship. Nicholas Ounstead Chief Executive Officer This year, in a turbulent UK trading environment, we have again demonstrated the fundamental strength of our business through the continued delivery of improved profits. Store Development and Expansion Our national store opening programme continues apace with a net 24 new stores (20 Topps and 4 Tile Clearing House) opened in this financial year. We now have a total of 244 trading stores (207 Topps and 37 Tile Clearing House) and are firmly on our way to achieving our stated target of a minimum of 350 UK outlets. We continue to enjoy a good pipeline of suitable sites for occupation or development. In line with our policy of continued store development and refurbishment, 3 stores were closed or relocated, 15 re-fitted and a net 24 new stores opened in the period. We have a total of 64 stores offering our tile studio concept of extra choice of up-market tiles, available on a special order basis and 17 floorstores with an enhanced 07 TOPPS TILES PLC Annual Report and Financial Statements 2005 61.3% Gross margin +16.1% Increase in profit before tax 250 200 150 100 50 0 Number of stores at the financial period end 244 220 196 171 147 2002 2003 2004 2005 2001 Source : see page 13 08 TOPPS TILES PLC Annual Report and Financial Statements 2005 CHIEF EXECUTIVE’S STATEMENT continued Topps Tiles is one of Britain's biggest supporters of youth football. Topps stores currently sponsor 225 teams nationwide and our yellow kit is arguably the most famous in the beautiful game. More specifically, in 2004 the UK ceramic tile market grew 12% to 77.2 million square metres, an increase of 49% compared with 2000. At manufacturers selling prices the market was worth close to £400 million in 2004 (source MBD). Staff Development and Customer Service Our vision is of high-performing, motivated and well-trained people who can make a difference to our customers, shareholders, the business and themselves. We live by our values of friendly, helpful and expert advice. The quality of leadership in the company is key to the successful delivery of our strategy for growth and our commitment to training, development and career progression is demonstrated through our in-house training school, incentive schemes, bonus system, share save schemes and other incentives including the ‘Home Computing Initiative’ and the ‘Cycle to Work’ schemes. We have recently introduced a comprehensive employee benefits scheme which includes a whole range of internal and external company benefits from discounts on holidays to an employee helpline service. We understand the true value of all our employees and actively encourage the recruitment of staff from all age groups. We have a policy of internal promotion, encouraging employees to advance their careers both in the stores and the Head Office functions. The market Despite a widely reported slow down in spending, we believe that in the mid-longer term DIY retail remains a relatively stable sector. There are a number of factors underpinning the future of the retail DIY market. The UK population is growing steadily, particularly in the 35- 64 key age band for DIY; and household numbers are growing faster than the population up from 22.4 million in 1991 to 24.5 million in 2003; and owner occupancy is also on the rise and with an ageing UK housing stock that requires constant repair and maintenance. 09 TOPPS TILES PLC Annual Report and Financial Statements 2005 The UK still has a very low consumption rate compared to its European counterparts with only 1.1% of world consumption in 2004 compared with, for example Spain at 5.9% (Source: Ceramic World Review). Consumption continues to increase driven by issues such as health and hygiene, an increase in second bathrooms, shower rooms, conservatories and utility rooms and an increase in the use of underfloor heating systems. UK Retail sales of ceramic tiles are expected to increase by 26% by 2010 (source: MBD) and we are confident therefore of the continued growth in the ceramic tile market. Current trading In the first seven weeks of the new financial period we have recorded a like-for-like sales decrease of 4.7%, however, the two year like-for-like sales shows an increase of 14.1%. Overall sales have increased by 1.2% over last year and 24.8% over two years. We have opened stores in Hayes, Lewes and Pentonville Road already this new financial year with our target roll-out of 24 new stores for 2005/06. There is no doubt that we, along with the rest of the UK retail sector, are experiencing a very tough trading environment. However, given the strength of these results we believe we have the right business model and the best people to continue to gain market share and we are well placed to maintain our goal of providing sustainable returns for shareholders. Nicholas Ounstead Chief Executive Officer +18.1% Basic earnings per share increase £8.8m Total capital expenditure during the financial period 10 TOPPS TILES PLC Annual Report and Financial Statements 2005 65 60 55 50 45 40 Gross margin (%) 61.3 60.5 57.5 55.0 56.0 2001 2002 2003 2004 2005 Source : see page 13 OPERATING AND FINANCIAL REVIEW Several business goals - one target Meeting our operational and financial objectives Nicholas Ounstead Chief Executive Officer Andrew Liggett Finance Director This does not represent a statutory Operating and Financial Review as set out in the Companies Act 1985 (Schedule 72A) and in RS1. Nature, Objectives and Strategies of the business Topps Tiles Plc is Britain's biggest tile and wood flooring specialist group with over 244 stores throughout the UK. We have an opening programme of 24 stores per financial year and a long term target of a minimum of 350 stores UK wide. Our founders, Stuart Williams and Barry Bester, whose vision and enterprise built up the business from just a few shops, are still major shareholders. Topps first specialist tile centre opened in Manchester in 1963. It was a pioneering concept offering customers quality tiles at bargain prices, sold by friendly, helpful people. This policy has never changed. We operate two brands in the market, Topps Tiles and Tile Clearing House. Topps is Britain’s biggest tile and wood flooring specialist group with the largest choice in the UK to suit all tastes and budgets. Tile Clearing House is a true “cash and carry” tile store selling end of lines, job lots and seconds, appealing to small builders, local contractors and bulk purchasers. Today at Topps you will find the best the world can offer in wall and floor tiles, natural stone, laminate and solid wood flooring. Underfloor heating, tools, adhesives, grouts, accessories and cleaning products are also on hand for the perfect finish to any job. Most of the tiles commissioned for Topps go straight to our central warehouse and distribution centre near Leicester. From here, all Topps stores receive at least two bulk deliveries a week, so stock is constantly flowing to keep pace with demand. The business is built on four cornerstones that underpin our success: customer service, store locations, store layout and stock availability. Our aim is to increase shareholder value through the delivery of sustainable earnings growth. Operating Environment Historically, the Group’s business has proven to be resilient in the face of economic downturn. The business has traded through a number of recessions and whilst sales continued to grow we did experience some pressure on margins. However, the business has changed over the years and we are confident that our current business model places us well to continue to deliver future shareholder value. 11 TOPPS TILES PLC Annual Report and Financial Statements 2005 £21.8m Net funds position as at 1 October 2005 40 30 20 10 0 Profit before tax (£m) 39.2 33.8 18.9 13.2 9.4 2002 2003 2004 2005 2001 Source : see page 13 12 TOPPS TILES PLC Annual Report and Financial Statements 2005 +18.8% Increase in dividend payout OPERATING AND FINANCIAL REVIEW continued Operating Environment (continued) Topps is the market leading brand in the UK, enjoying an estimated 20% market share by value. Estimated market shares are based on external research by MBD. In terms of competitive positioning Topps sits between the DIY chains and the independent tile retailers. In the UK there is one other significant chain, Tiles R Us but they also sell bathrooms and kitchens. Key Performance Indicators The directors monitor a number of financial metrics and key performance indicators (KPIs) for the group and by store, including: (cid:1) Like for like Sales (cid:1) Sales value per transaction (cid:1) Gross Profit The directors receive daily information on these and other metrics and KPIs for the Group as a whole. In addition, the directors receive information on non financial metrics such as customer satisfaction questionnaires and Mystery Shopper surveys. Key Strengths and Resources Customer satisfaction is Topps No.1 priority. We are committed to the highest levels of customer service, it is our policy to be honest, helpful and knowledgeable. In addition, we provide a range of services offering practical support at every stage of the job including Loan-a-Tile, free 'How to' video or DVD, tile cutting and Topps buy-back service for unused tiles. The quality and range of products offered is the widest in the market with over 17,000 separate product lines. Risks and Uncertainties Risks to the business include its relationship with key suppliers, the potential threat of competitors, the risk that key information technology or EPOS systems could fail; the loss of key personnel; the risk of a prolonged economic recession and development of substitute products. The directors routinely monitor all these risks and uncertainties and appropriate actions are taken to mitigate the risks or their potential outcomes. 13 TOPPS TILES PLC Annual Report and Financial Statements 2005 Financial review Profit and Loss Account Turnover During the period Group turnover increased by 10.0% to £173.3 million from £157.6 million last year. Like-for-like sales increased by 3.4%, with new store openings contributing a further 8.7% increase, with the difference of 2.1% being due to the 53 week comparison in the prior period. Gross margin Overall gross margin was 61.3% compared to 60.5% last year. At the interim point of this period gross margin was 61.9%. The second half of the period has shown a gross margin of 60.7% which reflects the tougher trading conditions in this period. Operating expenses Overall costs have increased from £62.8 million to £69.3 million which is an increase of 10.4%. New stores accounted for 6.9% with the remaining 3.5% due to like for like increases. Costs as a percentage of sales were 40.0% compared to 39.9% last year. Profit before tax We have achieved an overall increase in profit before tax of 16.1% to £39.2 million compared to a profit before tax of £33.8 million last year. This period’s profit before tax includes £1.7 million of exceptional profit, compared to £542,000 last year, following the sale and leaseback of four freehold properties. Profit before tax margin Group profit before tax margin has increased to 22.6% from 21.4% last year. This increase of 1.2 percentage points has been achieved primarily by an increase in gross margin of 0.8 percentage points less a slight increase in operating costs of 0.1 percentage points with the remainder being reflected in the exceptional profit on disposal of fixed assets and interest receivable. Taxation The effective rate of Corporation Tax was 23.1% (53 weeks ended 2 October 2004: 24.1%) and we have continued to fully provide for deferred taxation in line with FRS19. The effective rates of tax for both financial periods have been favourably affected by statutory deductions for share options exercised and intra-Group restructuring benefits. Charts Financial information in the charts displayed on pages 2,6,8,10,12,14, 16 and 18 is based on the Annual Report and Financial Statements for the 52 week periods ending 2 June 2001, 1 June 2002, and 1 October 2005, the proforma unaudited statements for the 52 week period ended 27 September 2003, and the 53 week period ended 2 October 2004 . 40.0% Costs as a percentage of sales Basic earnings per share (pence) 15 12 9 6 3 0 13.3 11.3 5.8* 3.0* 3.6* 2002 2003 2004 2005 2001 Source : see page 13 14 TOPPS TILES PLC Annual Report and Financial Statements 2005 £27.8m Cash reserves position as at 1 October 2005 OPERATING AND FINANCIAL REVIEW continued Earnings per share Basic earnings per share has grown to 13.34 pence compared to 11.30 pence last year, an increase of 18.1%. Diluted earnings per share were 13.24 pence compared to 11.12 pence last year, an increase of 19.1%. Dividend and dividend policy The Board is recommending a final dividend of 6.00 pence per share, which will give a total dividend for the period of 9.50 pence compared to 8.00 pence last year an increase of 18.8%. This maintains our dividend cover at 1.41 times. Balance Sheet Capital expenditure Capital expenditure in the period amounted to £8.8 million. This includes the cost of acquiring two freehold sites for £3.6 million and development stores site costs of £0.1 million. We have also opened 27 new stores and undertaken preparatory work on a further two stores at a cost of £3.0 million and undertaken major refurbishment of a further 15 stores at a cost of £0.7 million and other re-fit costs of £0.8 million. We continue to update and expand our IT systems within the business and this coupled with some motor vehicle renewals accounted for £0.6 million. At the period end the Group owned six freehold sites, two development sites and both the Topps and Tile Clearing House distribution and marketing centres, which have a total net book value of £12.0 million. Stock Stock at the period end represents 137 days turnover compared to 143 days for the same period last year. Capital structure Cash reserves at the period end were £27.8 million and borrowings were £6.0 million, the latter being to help fund the cost of the new Topps distribution and marketing centre which was opened in April 2004. This gives the Group a net funds position of £21.8 million compared to £23.1 million as at 2 October 2004. The highly cash generative nature of our business means that the Group has always been able to fund its new store expansion programme from its own resources and to purchase freehold sites as suitable opportunities arise. The Group expects that the business will continue to be cash generative and may look to repay part or all of the £6.0 million borrowings in 2006. Cash flow Net cash inflow from operating activities was £35.8 million, £2 million below last year. Higher trading profit for the Group was offset by higher cash outflows on working capital. This is due primarily to a decrease in Creditors as the Group now pays its employee bonuses on a quarterly basis rather than on an annual basis. Share buy-backs In the financial period the Group has bought back 1,722,115 Ordinary Shares at a cost of £3.77 million. This primarily is to stop any dilution occurring as employee share options are exercised and sold. However the Group has also, on occasion, acquired shares when the Board considers there is an opportunity to do so in the market. All of the shares acquired have now been cancelled. Joint venture in Holland The joint venture in Holland continues to develop with two new stores opened in the period to bring the total to 13 stores. The Group owns 50% in the joint venture with the other 50% owned by the Dutch management team. The Group’s Profit and Loss Account shows turnover of £2.3 million (2004 : £1.8 million) and operating profit before tax of £56,000 (2004 : £39,000) from the venture which reflects the Group’s 50% holding. Change in accounting policies During the financial period there have been no changes to the accounting policies of a material nature compared to the previous financial period. International Financial Reporting Standards (IFRS) The Group is working closely with its auditors to implement these changes. The Group is required to adopt IFRS for the financial period commencing 2 October 2005. However, the Group intends to make an announcement in January 2006 to show the impact of the changes. Post balance sheet events The Board confirms that there have been no events after the Balance sheet date requiring adjustment or disclosure in the financial state- ments for the period ended 1 October 2005. Annual General Meeting The Annual General Meeting for the period to 1 October 2005 will be held on 10 January 2006 at 10.30am at Topps Tiles Plc, Thorpe Way, Grove Park, Enderby, Leicestershire LE19 1SU, which is our Topps distri- bution and marketing centre. Nicholas Ounstead Chief Executive Officer Andrew Liggett Finance Director 15 TOPPS TILES PLC Annual Report and Financial Statements 2005 225 youth teams wear kit and play with equipment provided by our sports sponsorship scheme 9.50 8.00 Dividend level (pence) 10 8 6 4 2 0 3.48 1.00 1.43 Dividend cover (times) Asthma UK 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. 3.0 2.5 2.0 1.5 1.0 0.5 0 2.9 2.5 1.67 1.41 1.41 2002 2003 2004 2005 2001 Source : see page 13 16 TOPPS TILES PLC Annual Report and Financial Statements 2005 CORPORATE AND SOCIAL RESPONSIBILITY (CSR) Many responsibilities - one response Making a positive contribution to the communities where we do business and to the environment as a whole. Introduction Corporate Social Responsibility is not new to Topps Tiles. We know that a reputation for acting responsibly helps build our business through customer recommendation. This is why we pride ourselves on our commitment to product quality, customer service excellence, good environmental management and to making a positive contribution to the communities where we do business. In 2004, we set up a social and environmental responsibility working group chaired by a Board director. The purpose of this group was to review how we were doing and to look for opportunities for improvement. Much has been achieved. For example, we have set up a new way of including corporate social responsibility as part of our risk assessment. Our Website demonstrates progress we have made on Corporate Social Responsibility an extension of the way we have done and will continue to do our business. In it we describe our approach towards: (cid:1) Community relations (cid:1) Environment (cid:1) Workplace (cid:1) Supply Chain Our Approach Andrew Liggett, the Finance Director for Topps Tiles Plc is the Chairman and the Board director responsible for the Social and Environmental policy. Topps has established a social and environmental responsibility working group to further our consideration of corporate responsibility issues generally, but with a specific focus on environmental management. The members of the working group are the Group Finance Director, the Head of Human Resources, the Buying Director and the Internal Audit Manager. We are supported in these initial stages of establishing our environmental management systems by the use of a specialist environmental consultancy. Together, the members of the working group are accountable for developing and improving our environmental management practice. Each member of the working group is responsible for implementing those elements of the environmental policy relevant to their functions. Topps Tiles believe that environmental responsibility should be an integral part of how we manage our business. This is why we have established such a senior working group to oversee our progress in this area. Community relations Topps is one of the biggest supporters of youth football in the UK, providing new kits and equipment to junior teams local to our stores. 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 an outlet. This has made Topps one of the biggest supporters of youth football in Britain and we now have over 225 teams playing regularly in our colours. 17 TOPPS TILES PLC Annual Report and Financial Statements 2005 2,000 1,500 1,000 500 0 Average number of employees (The Team) during the financial periods 1,513 1,327 1,176 1,070 941 2002 2003 2004 2005 2001 Source : see page 13 20+ schools have benefited from our ‘computers for schools’ scheme Strong culture of internal promotion Case Study Len Denton (right) from Topps Tiles Southend has painted many valued murals at the local hospital and plans are underway in 2005 for a giant mosaic using 12,000 individual pieces of broken tiles. 18 TOPPS TILES PLC Annual Report and Financial Statements 2005 CORPORATE AND SOCIAL RESPONSIBILITY (CSR) continued We also take great pride in our fund raising achievements for our adopted charity Asthma UK. This is our fifth year of support for the charity which aims to conquer this respiratory disorder which affects over one million children in the UK. Asthma UK 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. Our staff contributed greatly to the fundraising by holding sponsored events and in total with our Company donation of £10,000 we raised over £75,000 for this worthy cause. As well as sport there is also education, where via our product catalogue schools can win valuable computer equipment. Since the scheme started, over 20 schools have benefited nationwide. Environment Respect for the environment is an accepted part of modern day business management. At Topps, we recognise that our day-to-day activities impact on the environment and aim to minimise the harmful effects whenever we can. This year, we began a company-wide programme to improve our environmental performance, to review our policies, to put in place management systems to monitor and measure our performance and to set targets for improvement. Much has been achieved but there is more to do. We have: (cid:1) assigned board responsibility for environmental management (cid:1) established our approach to environmental management (cid:1) updated our environmental policy (cid:1) identified our most important environmental impacts (cid:1) put in place systems to collect data to measure our performance and set targets for improvement. Market place The Group works closely with key suppliers to source and distribute products that contribute positively to environmental performance. The Group has developed an environmental policy on timber products and has adopted the principles and criteria of the Forest Stewardship Council as its benchmark. 19 TOPPS TILES PLC Annual Report and Financial Statements 2005 Workplace Topps’ businesses comply with current employment legislation and work with employees and local management of each branch to create a positive and equitable working environment. There is a strong culture of internal promotion and regular dialogue on job and career development. Topps is committed to promoting equal opportunities for all, and we believe that we have the right policies in place to meet this objective. The Group also operates an employee suggestion scheme which is overseen by the Chairman, Barry Bester, which allows all employees to give suggestions which can help improve the business whether it be operational, environmental or social. An in-house magazine is produced six times a year and sent to all employees as a further way of keeping everybody informed of the developments within the business. Health and safety The Group has a well documented and clear policy that is implemented rigorously throughout the business. We operate a Health and Safety Committee which meets on a regular basis and it’s members are representative of all areas of the business and is chaired by our Chief Executive. Supply Chain Topps Tiles purchases around £70m of goods each year. The majority of our purchases are ceramic tiles and we also purchase stone, wood and laminate and adhesives. We source our products from around the World. Labour Standards and Environmental Responsibility are issues of growing importance. Topps Tiles has reviewed how it considers these issues with regard to its supplier relationships and has adopted: (cid:1) A policy on Labour Standards and Human Rights (cid:1) A standard clause on environmental protection which will be introduced into all new contracts and existing contacts on renewal. Our buyers also have a regular programme to visit our suppliers, to discuss these issues. Our full policy and established targets can be viewed on our website at www.toppstiles.co.uk and can be found in the Investors section under Corporate Responsibility. EXECUTIVE DIRECTORS Barry Bester Executive Chairman (aged 48) Nicholas Ounstead Chief Executive Officer (aged 45) Andrew Liggett Finance Director (aged 44) Member of Nomination Committee Health and Safety Committee Chairman Company Secretary Secretary of Nomination Committee Social and Environmental Responsibility Chairman Barry was a founder shareholder and Director of Topps Nicholas joined Topps Tiles in April 1997. Prior to this Andrew joined Topps Tiles in 1995 as Finance Director. Tiles in 1984. His principal responsibilities are those of he was Marketing Director at Bellegrove Ceramics Plc Prior to joining the Group, he worked for Gold Crown Group Strategy along with overseeing development of which is a major supplier to DIY chains and Group Limited where he was employed for ten years, the joint venture in Holland. independent retailers. In September 2001 he was initially as Management Accountant and then as appointed Chief Operating Officer and promoted to Finance Director. He is responsible for the accounting, He is also responsible for the Company’s employee Chief Executive Officer in October 2002. Nicholas is financial control, treasury, administration and Group suggestion scheme. also Chairman of the Health and Safety Committee secretarial matters. and has overall responsibility for the day-to-day operations of the business. 20 TOPPS TILES PLC Annual Report and Financial Statements 2005 NON-EXECUTIVE DIRECTORS Alan Mclntosh CA Senior Non-Executive Director (aged 37) Victor Watson CBE Non-Executive Director (aged 77) Rt. Hon Michael Jack Privy Councillor MP Non-Executive Director (aged 59) Chairman of Audit Committee Member of Audit Committee Member of Audit Committee Member of Nomination Committee Chairman of Nomination Committee Member of Nomination Committee Alan qualified as a Chartered Accountant with Deloitte. Victor was formerly Chairman of Waddington Plc. Michael’s business career has seen him in He was one of the founders and the former Group He joined the Board of Topps Tiles in 1997. management capacities with Proctor & Gamble and Finance Director of Punch Group Ltd. He joined the Board of Topps Tiles in 1997. 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. He joined the Board of Topps Tiles in 1999. 21 TOPPS TILES PLC Annual Report and Financial Statements 2005 OPERATIONAL DIRECTORS Matt Williams Ray Tricker Adrian McCourt Chief Operating Officer Northern Operations Director Southern Operations Director (aged 31) (aged 49) (aged 47) Martin Shenton Midlands and South West Operations Director (aged 50) Matt joined the Company in 1998 after Ray joined the Company in 2002 and Adrian joined the business in 1998 Martin joined the Company in 1978 completing his Chartered Surveyors has over 30 years of sales experience having spent his entire working life in and has worked in many different exams and took up a role in the including eight years with Wickes. sales, including time in the USA with positions in his time with the business. property department. In 2004 he was promoted to Chief Operating Officer. JC Penney. 22 TOPPS TILES PLC Annual Report and Financial Statements 2005 Alan Saunders Marketing Director (aged 42) Colin Hampson IT Director (aged 33) John Reilly Buying Director (aged 44) Alan joined the Company in 1984 as Colin joined the business in 1995 and John joined the Company in 1998 after Store Manager and progressed to Area has played a key role in implementing twelve years in the tile business, Manager before taking up his current and developing our store Epos systems. including three years with Great Mills role in 2002. DIY. 23 TOPPS TILES PLC Annual Report and Financial Statements 2005 DIRECTORS AND ADVISORS Directors B.F.J. Bester Executive Chairman N.D. Ounstead Chief Executive Officer A. Liggett FCMA Finance Director W.A. McIntosh CA Senior Non-Executive Director V.H. Watson CBE Non-Executive Director The RT. Hon. J.M. Jack, Privy Counsellor, MP Non-Executive Director Secretary A. Liggett FCMA Registered Number 3213782 Registered Office Rushworth House Wilmslow Road Handforth Wilmslow Cheshire SK9 3HJ 24 TOPPS TILES PLC Annual Report and Financial Statements 2005 Advisors President S.K.M. Williams FCA President (from 1 April 2005) Auditors Deloitte & Touche LLP 201 Deansgate Manchester M60 2AT Bankers HSBC Bank Plc 56 Queen Street Cardiff CF10 2PX Registrars Capita IRG Plc Bourne House 34 Beckenham Road Beckenham Kent BR3 4TU Solicitors TLT Solicitors 1 Redcliff Street Bristol BS99 7JZ Sinclair Abson Smith Lawyers 19 Market Place Stockport SK1 1HA Beachcroft Wansbroughs Solicitors St. Ann’s House St. Ann Street Manchester M2 7LP Stockbrokers KBC Peel Hunt Limited 111 Old Broad Street London EC2N 1PH FINANCIAL STATEMENTS CONTENTS 26 DIRECTORS’ REPORT 29 CORPORATE GOVERNANCE STATEMENTS 31 REMUNERATION REPORT 36 INDEPENDENT AUDITORS’ REPORT 38 CONSOLIDATED PROFIT AND LOSS ACCOUNT 39 BALANCE SHEETS 40 CONSOLIDATED CASH FLOW STATEMENT 41 NOTES TO THE FINANCIAL STATEMENTS 60 FIVE YEAR RECORD 61 NOTICE OF ANNUAL GENERAL MEETING 64 EXPLANATORY NOTES TO THE NOTICE OF ANNUAL GENERAL MEETING 66 FINANCIAL CALENDAR 67 THE TEAM 72 STORE LOCATIONS 25 TOPPS TILES PLC Annual Report and Financial Statements 2005 DIRECTORS’ REPORT For the 52 week period ended 1 October 2005 The directors present their report on the affairs of the Group, together with the financial statements and auditors’ report, for the 52 week period ended 1 October 2005. 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’s performance during the period and expected future developments are contained in the Chairman’s Statement and Chief Executive’s and Financial reviews on pages 3 to 15 of the report and financial statements. Results and dividends The audited financial statements for the 52 week period ended 1 October 2005 are set out on pages 38 to 59. The Group’s profit for the period, after taxation, was £30,189,000 (53 weeks ended 2 October 2004 - £25,648,000). An interim dividend of 3.50 pence per share, £7,983,000, was paid on 30 June 2005. The directors recommend a final dividend of 6.00 pence per share, £13,576,000, making a total of 9.5 pence per share, £21,559,000 (2004 – total dividend 8.00p per share, £18,195,000). Subject to approval by the shareholders at the Annual General Meeting, to be held on 10 January 2006, the final dividend will be paid on 31 January 2006, to shareholders on the register at the close of business on 13 January 2006. Directors The directors who have served during the financial period were as follows: S.K.M. Williams B.F.J. Bester N.D. Ounstead A. Liggett W.A. McIntosh V.H. Watson J.M. Jack President (Stepped down as Co-Chairman and Director 31 March 2005) Executive Chairman (Co-Chairman to 31 March 2005) Chief Executive Officer Finance Director Senior Non-Executive Director Non-Executive Director Non-Executive Director Stuart Williams stepped down from his position as Director and Co-Chairman on 31 March 2005 and took up the new position of President. The directors’ interests in the shares of the Company are set out on page 35. Share capital Details of the Company’s authorised and issued share capital are shown in note 19 to the financial statements. Supplier payment policy The Group’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’s negotiated payment policy is that trade creditors at the period end represented 44 days purchases (2004 - 49 days). 26 TOPPS TILES PLC Annual Report and Financial Statements 2005 Charitable and political contributions During the period the Group made charitable donations of £10,000 to the ‘Tsunami Appeal’ and £10,000 to Asthma UK. The Group made no political contributions. Substantial shareholdings In addition to the directors’ shareholdings noted on page 35, on 3 November 2005 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. HSBC Global Custody Nominee (UK) Limited Chase Nominees Limited S.K.M. Williams State Street Nominees Limited BNY (OCS) Nominees Limited Vidacoss Nominees Limited BBHISL Nominees Limited Bank of New York (Nominees) Limited Number 39,977,000 35,738,000 23,808,600 16,847,000 9,754,000 9,626,000 8,210,000 7,467,000 % held 17.7% 15.8% 10.5% 7.4% 4.3% 4.3% 3.6% 3.3% 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. The total of options held by employees, excluding directors, is 1,858,455. The directors will continue to incentivise employees through additional employee share option schemes in the forthcoming financial period. 27 TOPPS TILES PLC Annual Report and Financial Statements 2005 DIRECTORS’ REPORT continued Auditors A resolution to re-appoint Deloitte & Touche LLP as the Company’s auditor will be proposed at the forthcoming Annual General Meeting. Statement of Directors’ Responsibilities United Kingdom 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 Group as at the end of the financial period and of the profit of the Group for that period. In preparing those Financial Statements, the directors are required to: (cid:1) select suitable accounting policies and then apply them consistently; (cid:1) make judgements and estimates that are reasonable and prudent; and (cid:1) state whether applicable accounting standards have been followed. Going concern After making appropriate enquiries, the directors have a reasonable expectation that the Group has 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 Group accounts. The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. On behalf of the Board A Liggett Director and Company Secretary 29 November 2005 28 TOPPS TILES PLC Annual Report and Financial Statements 2005 CORPORATE GOVERNANCE STATEMENTS 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’ 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 the provisions of A6.1. In this regard to A6.1 the Board does not currently undertake formal appraisal of its own performance and that of its committees but is currently in the process of completing such an appraisal. 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. Attendance at Board/Committee meetings The following table shows the number of Board and Committee meetings held during the 52 week period ended 1 October 2005 and the attendance record of the individual directors. Number of meetings B.F.J. Bester N.D. Ounstead A. Liggett W.A. McIntosh V.H. Watson J.M. Jack S.K.M. Williams (Stepped down on 31/03/2005) Board Of directors Audit committee Remuneration committee Nomination committee 8 8 8 8 7 8 8 4 2 2 2 2 2 2 2 2 2 2 N/A N/A 2 2 2 N/A 1 1 N/A 1 1 1 1 N/A 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’ remuneration is set out in the Remuneration Report. Audit Committee The Audit Committee is chaired by Alan McIntosh and is authorised by the Board to liaise with the external auditors on the nature and scope of the audits, review the Audit Report and it’s findings and to ensure the Company’s internal control systems are adequate via liaison with the Internal Audit department. 29 TOPPS TILES PLC Annual Report and Financial Statements 2005 CORPORATE GOVERNANCE STATEMENTS continued Nomination Committee The Nomination Committee is chaired by Victor Watson CBE and is authorised by the Board to maintain an ongoing review with the purpose of making recommendations for Board appointments. 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. The Company also posts financial information on its website www.toppstiles.co.uk. 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’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’s system of internal control. The Board’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. 30 TOPPS TILES PLC Annual Report and Financial Statements 2005 REMUNERATION REPORT Introduction This report has been prepared in accordance with the Directors’ Remuneration Report Regulations 2002 which introduced new statutory requirements for the disclosure of directors’ remuneration in respect of periods ending on or after 31 December 2002. The report also meets the relevant requirements of the Listing Rules of the Financial Services Authority and describes how the Board has applied the Principles of Good Governance relating to directors’ remuneration. As required by the Regulations, a resolution to approve the report will be proposed at the Annual General Meeting of the Company at which the financial statements will be approved. The Regulations require the auditors to report to the Company’s members on the “auditable part” of the Directors’ remuneration report and to state whether in their opinion that part of the report has been properly prepared in accordance with the Companies Act 1985 (as amended by the Regulations). The report has therefore been divided into separate sections for audited and unaudited information. Unaudited information Remuneration committee The Company has established a Remuneration Committee, which is constituted in accordance with the recommendations of the Combined Code. The members of the committee are Mr. McIntosh, Mr. Watson and The RT. Hon. Mr. Jack who are all independent non-executive directors, with the committee chaired by Mr. McIntosh. None of the Committee has any personal financial interest (other than as shareholders), conflicts of interests arising from cross-directorships or day-to-day involvement in running the business. The Committee makes recommendations to the Board. No director plays a part in any discussion about his own remuneration. Remuneration policy Executive remuneration packages are prudently designed to attract, motivate and retain directors of the high calibre needed to maintain the Group’s position as a market leader and to reward them for enhancing value to shareholders. The performance measurement of the executive directors and key members of senior management and the determination of their annual remuneration package are undertaken by the Committee. The remuneration of the non-executive directors is determined by the Board within limits set out in the Articles of Association. There are four main elements of the remuneration package for executive directors and senior management: (cid:1) basic annual salary (including directors’ fees) and benefits; (cid:1) long-term incentive plan; (cid:1) annual bonus payments; (cid:1) pension arrangements. 31 TOPPS TILES PLC Annual Report and Financial Statements 2005 REMUNERATION REPORT continued Basic salary An executive director’s basic salary is determined by the Committee prior to the beginning of each year and when an individual changes position or responsibility. In deciding appropriate levels, the Committee considers the Group as a whole and relies on objective research which gives up-to-date information on a comparator group of companies. Basic salaries were reviewed in September 2005 with increases taking effect from 1 October 2005. Executive director’s contracts of service which include details of remuneration will be available for inspection at the Annual General Meeting. In addition to basic salary, the executive directors receive certain benefits-in-kind, principally a car and private medical insurance. Long-term incentive Plan (L–TIP) The Topps Tiles Plc 2003 Executive L–TIP is a three year plan which is due to mature at the financial period ending 30 September 2006. The L–TIP is a cash based plan with performance targets based on the Group profitability over the three year period. It is discretionary and will be operated by the Board acting through the Remuneration Committee. The maximum total amount potentially payable to participants under the plan if performance criteria are met is £4,000,000. N.D. Ounstead and A. Liggett each have been granted a 25% interest in the L–TIP. The payment of the individual awards under the scheme is dependent on the participant remaining in employment with the Group and the Group achieving a cumulative total of at least £80,000,000 pre-tax profits (before any accrual for the L–TIP) over the three year period and the diluted earnings per share as shown in the Group’s annual accounts must increase by an average of 15% per annum (compounded annually) over the same period. In the event of a take-over, reconstruction or winding up of the Group, a proportion of awards will vest having regard to the number of months of the performance period that have elapsed and any other relevant factors. Annual bonus payments A discretionary annual cash bonus scheme represents the short term incentive element of the overall remuneration package for Mr. Liggett and Mr. Ounstead. The committee establishes the objectives that must be met in the financial period if a cash bonus is to be paid. The maximum bonus achievable in the period was £nil and for the period ending 30 September 2006 will be a total of £520,000 which is 100% of basic salaries. Pension arrangements Mr. Bester, Mr. Ounstead and Mr. Liggett received contributions into their own personal pension schemes. Directors’ contracts Executive directors It is the company’s policy that executive directors enter into a contract with a 12 month term providing for a maximum of six months notice. Mr. Bester, Mr. Ounstead and Mr. Liggett have entered into new service contracts on 1 October 2005 in accordance with the above policy. In the event of early termination, the directors’ contracts provide for compensation up to a maximum of six months basic salary for the notice period. 32 TOPPS TILES PLC Annual Report and Financial Statements 2005 Directors’ contracts (continued) Non-executive directors All non-executive directors have specific terms of engagement and their remuneration is determined by the Board within the limits set by the Articles of Association and based on independent surveys of fees paid to non-executive directors of similar companies. The basic fee paid to each non-executive director in the period was £20,000. It is the Company’s policy that non-executive directors should have contracts with an indefinite term providing for a maximum of six months notice. Non-executive directors cannot participate in any of the Company’s share option schemes and are not eligible to join the Company’s pension scheme. The details of the non-executive directors’ contracts are summarised in the table below: Name of director W.A. McIntosh V.H. Watson J.M. Jack Date of contract or letter of appointment Unexpired term 27 May 1997 27 May 1997 26 January 1999 N/A N/A N/A Notice period 6 months 6 months 6 months Performance graph The following graph shows the company’s performance, measured by total shareholder return (“TSR”), compared with the performance of the FTSE Index also measured by TSR. The index chosen for the comparison demonstrates the Group’s TSR in comparison to the average for FTSE 250 companies. Graph showing TSR performance of Topps Tiles Plc against FTSE Mid 250 Index (Excluding Investment Trusts) for the period 3 June 2000 to 1 October 2005 Topps Tiles Plc FTSE Mid 250 Excluding Investment Trusts 600 500 400 300 200 100 0 ) 0 0 1 o t d e s a b e R ( R S T 3 June 2000 2 June 2001 1 June 2002 27 Sept 2003 2 Oct 2004 1 Oct 2005 33 TOPPS TILES PLC Annual Report and Financial Statements 2005 REMUNERATION REPORT continued Audited information Aggregate directors’ remuneration The total amounts for directors’ remuneration were as follows: Emoluments Money purchase pension contributions Directors’ emoluments Name of director Executive directors B.F.J. Bester S.K.M. Williams (Stepped down as Co-Chairman 31 March 2005) N.D. Ounstead A. Liggett Non executive directors W.A. McIntosh V.H. Watson J.M. Jack Fees £’000 Basic salary £’000 Vehicle allowance £’000 Benefits in kind £’000 Money purchase pension contributions £’000 – – – – 20 20 – 40 182 91 234 234 – – 20 761 – – 24 – – – – 24 22 13 5 23 – – – 63 6 – 10 10 – – – 26 52 weeks ended 1 October 2005 £’000 902 26 928 52 weeks ended 1 October 2005 £’000 210 104 273 267 20 20 20 914 53 weeks ended 2 October 2004 £’000 959 24 983 53 weeks ended 2 October 2004 £’000 204 198 262 259 20 20 20 983 Directors’ share options There were no options outstanding, granted to or exercised by directors during the period and therefore no gains were made by the directors. The market price of the ordinary shares at 1 October 2005 was 172 pence and the range during the year was 159 pence to 270 pence. 34 TOPPS TILES PLC Annual Report and Financial Statements 2005 Directors interests The directors had the following interest in the shares of the Company (all interests relate solely to Ordinary Shares). B.F.J. Bester N.D. Ounstead A. Liggett W.A. McIntosh V.H. Watson J.M. Jack Approval This report was approved by the Board of directors on 29 November 2005 and signed on its behalf by: Alan McIntosh Chairman of Remuneration Committee 29 November 2005 1 October 2005 ordinary shares of 2.5p each 18,541,600 493,500 2,001,500 1,585,000 180,000 15,000 2 October 2004 ordinary shares of 2.5p each 18,541,600 493,500 2,001,500 1,585,000 185,000 15,000 35 TOPPS TILES PLC Annual Report and Financial Statements 2005 INDEPENDENT AUDITORS’ REPORT To the members of Topps Tiles Plc We have audited the financial statements of Topps Tiles Plc for the 52 week period ended 1 October 2005 which comprise the consolidated profit and loss account, the statement of total recognised gains and losses, the balance sheets, the consolidated cash flow statement and the related notes 1 to 23. These financial statements have been prepared under the accounting policies set out therein. We have also audited the information in the part of the directors’ remuneration report that is described as having been audited. This report is made solely to the Company’s members, as a body, in accordance with section 235 of the Companies Act 1985. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of directors and auditors As described in the statement of directors’ responsibilities, the Company’s directors are responsible for the preparation of the financial statements in accordance with applicable United Kingdom law and accounting standards. They are also responsible for the preparation of the other information contained in the annual report, including the directors’ remuneration report. Our responsibility is to audit the financial statements and the part of the directors’ remuneration report described as having been audited in accordance with relevant United Kingdom legal and regulatory requirements and auditing standards. We report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements and the part of the directors’ remuneration report described as having been audited have been properly prepared in accordance with the Companies Act 1985. We also report to you if, in our opinion, the directors’ report is not consistent with the financial statements, if the Company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding directors’ remuneration and transactions with the Company and other members of the Group is not disclosed. We review whether the corporate governance statement reflects the Company's compliance with the seven provisions of the Combined Code specified for our review by the Listing Rules of the Financial Services Authority, and we report if it does not. We are not required to consider whether the Board's statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the Group's corporate governance procedures or its risk and control procedures. We read the directors’ report and the other information contained in the annual report for the above period as described in the contents section, including the unaudited part of the directors’ remuneration report, and consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. 36 TOPPS TILES PLC Annual Report and Financial Statements 2005 Basis of audit opinion We conducted our audit in accordance with United Kingdom auditing standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements and the part of the directors’ remuneration report described as having been audited. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements and of whether the accounting policies are appropriate to the circumstances of the Company and the Group, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements and the part of the directors’ remuneration report described as having been audited are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion, we also evaluated the overall adequacy of the presentation of information in the financial statements and the part of the directors’ remuneration report described as having been audited. Opinion In our opinion: (cid:1) the financial statements give a true and fair view of the state of affairs of the Company and the Group as at 1 October 2005 and of the profit of the Group for the 52 week period then ended; and (cid:1) the financial statements and part of the directors’ remuneration report described as having been audited have been properly prepared in accordance with the Companies Act 1985. Deloitte & Touche LLP Chartered Accountants and Registered Auditors Manchester 29 November 2005 37 TOPPS TILES PLC Annual Report and Financial Statements 2005 CONSOLIDATED PROFIT AND LOSS ACCOUNT For the 52 week period ended 1 October 2005 Turnover, group and share of joint venture Less: share of joint venture turnover Group turnover Cost of sales Gross profit Operating expenses - employee profit sharing - other operating expenses Group operating profit Share of operating profit in joint venture Group and share of joint venture’s operating profit Exceptional profit on disposal of fixed assets Profit on ordinary activities before finance income Finance income (net) Profit on ordinary activities before taxation Tax on profit on ordinary activities Profit on ordinary activities after taxation Dividends paid and proposed Retained profit for the year transferred to reserves Earnings per ordinary share - basic - diluted 52 weeks ended 1 October 2005 Audited £’000 175,640 (2,314) 173,326 (67,146) 53 weeks ended 2 October 2004 Audited £’000 159,430 (1,818) 157,612 (62,282) 106,180 95,330 (7,502) (61,844) (7,853) (54,968) 36,834 56 36,890 1,700 38,590 642 39,232 (9,043) 30,189 (21,492) 32,509 39 32,548 542 33,090 704 33,794 (8,146) 25,648 (18,155) 8,697 7,493 13.34p 13.24p 11.30p 11.12p Notes 2 3 5 6 7 8 9 20 10 10 All activity has arisen from continuing operations. There are no recognised gains or losses in the period (53 weeks ended 2 October 2004 – £9,000 foreign exchange gain). A statement of movements on reserves is given in note 20. The accompanying notes are an integral part of this consolidated profit and loss account. 38 TOPPS TILES PLC Annual Report and Financial Statements 2005 BALANCE SHEETS As at 1 October 2005 Fixed assets Goodwill Tangible assets Investments Joint venture undertaking - share of assets - share of liabilities Current assets Stocks Debtors within one year Debtors after one year Cash at bank and in hand Creditors: Amounts falling due within one year Net current assets Total assets less current liabilities Creditors: Amounts falling due after more than one year Provisions for liabilities and charges Net assets Capital and reserves Called-up share capital Share premium Merger reserve Special reserve Treasury Shares Capital redemption reserve Other reserve Profit and loss account Equity shareholders’ funds Group Company 1 October 2005 £’000 2 October 2004 £’000 1 October 2005 £’000 2 October 2004 £’000 Notes 11 12 13 13 14 14 17 15 16 18 19 20 20 20 20 20 20 20 21 517 32,072 – 1,196 (971) 32,814 25,338 4,071 115 27,829 57,353 (39,775) 17,578 50,392 (9,394) (2,345) 38,653 5,655 5,575 (399) – – 190 – 27,632 38,653 551 29,236 – 1,059 (866) 29,980 24,373 3,809 110 29,624 57,916 (45,452) 12,464 42,444 (7,571) (1,864) 33,009 5,673 4,889 (399) – (733) 137 – 23,442 33,009 – – 15,122 – – 15,122 – 76,209 6,200 – 82,409 (44,214) 38,195 53,317 (3,394) – 49,923 5,655 5,575 – 14,917 – 190 6,200 17,386 49,923 – – 15,122 – – 15,122 – 40,103 6,200 – 46,303 (19,195) 27,108 42,230 – – 42,230 5,673 4,889 – 14,917 (733) 137 6,200 11,147 42,230 The accompanying notes are an integral part of these balance sheets. The financial statements on pages 38 to 59 were approved by the Board of directors on 29 November 2005 and signed on its behalf by: ND Ounstead Director A Liggett Director 39 TOPPS TILES PLC Annual Report and Financial Statements 2005 CONSOLIDATED CASH FLOW STATEMENT For the 52 week period ended 1 October 2005 Net cash inflow from operating activities Returns on investments and servicing of finance Taxation Capital expenditure and financial investment Equity dividends Cash inflow before financing Financing (Decrease)/increase in cash in the period The accompanying notes are an integral part of this Consolidated Cash Flow Statement. 52 weeks ended 1 October 2005 £’000 35,766 634 (8,864) (4,272) (21,489) 1,775 (3,570) 53 weeks ended 2 October 2004 £’000 37,770 530 (5,236) (8,266) (11,534) 13,264 (2,220) (1,795) 11,044 Notes 21(a) 21(b) 21(c) 21(d) 21(e) 40 TOPPS TILES PLC Annual Report and Financial Statements 2005 NOTES TO THE FINANCIAL STATEMENTS For the 52 week period ended 1 October 2005 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 United Kingdom accounting standards. b) Basis of consolidation The statutory Group profit and loss account and balance sheet consolidate the financial statements of Topps Tiles Plc and its subsidiary undertakings made up to 1 October 2005. 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 and incorporate the results of the Group’s joint venture undertaking. The Group accounts for its own share of assets, liabilities and cash flows associated with this joint venture. 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’s profit after tax for the period, determined in accordance with the Act, was £38,738,000 (2 October 2004 - £36,035,000). c) Financial period The accounting period ends on the Saturday which falls closest to 30 September, 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 of £ 15,080,000 arising on acquisitions in the period ended 30 May 1998 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 retail sales less goods returned during the period from third parties and excludes value added tax. 41 TOPPS TILES PLC Annual Report and Financial Statements 2005 NOTES TO THE FINANCIAL STATEMENTS continued For the 52 week period ended 1 October 2005 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 on a straight-line basis 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 Freehold land is not depreciated. 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 substantively 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'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 substantively 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. The results of overseas operations are translated at the average rates of exchange during the period and their balance sheets at the rates ruling at the balance sheet date. Exchange differences arising on translation of the opening net assets and results of overseas operations are reported in the statement of total recognised gains and losses. All other exchange differences are included in the profit and loss account. 42 TOPPS TILES PLC Annual Report and Financial Statements 2005 1 Accounting policies (continued) k) 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. l) Investments Fixed asset investments are shown at cost less provision for impairment. m) 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. n) 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’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’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. o) 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. 43 TOPPS TILES PLC Annual Report and Financial Statements 2005 NOTES TO THE FINANCIAL STATEMENTS continued For the 52 week period ended 1 October 2005 2 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 arise within the UK and Europe. By Geographical origin United Kingdom Mainland Europe Bank loans and overdraft Finance income (net) Turnover Profit before tax Net assets 52 weeks ended 1 October 2005 £’000 173,326 2,314 175,640 53 weeks ended 2 October 2004 £’000 157,612 1,818 159,430 52 weeks ended 1 October 2005 £’000 38,534 56 38,590 N/A 642 53 weeks ended 2 October 2004 £’000 33,051 39 33,090 N/A 704 52 weeks ended 1 October 2005 £’000 44,428 225 44,653 53 weeks ended 2 October 2004 £’000 39,333 193 39,526 (6,000) N/A (6,517) N/A Profit on ordinary activities before taxation 39,232 33,794 N/A N/A Total net assets N/A N/A 38,653 33,009 Turnover by destination is not materially different to that by geographical origin. 3 Operating expenses Distribution costs Administrative expenses; Other Employee profit sharing 44 TOPPS TILES PLC Annual Report and Financial Statements 2005 52 weeks ended 1 October 2005 £’000 46,348 15,496 7,502 69,346 53 weeks ended 2 October 2004 £’000 41,176 13,792 7,853 62,821 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)) Details of director’s emoluments are disclosed on page 34. 52 weeks ended 1 October 2005 Number employed 1,356 157 1,513 52 weeks ended 1 October 2005 £’000 26,477 2,984 216 29,677 53 weeks ended 2 October 2004 Number employed 1,181 146 1,327 53 weeks ended 2 October 2004 £’000 25,354 2,936 175 28,465 5 Exceptional profit on disposal of fixed assets The profit on disposal of fixed assets increased the tax charge by £510,000 (53 weeks ended 2nd October 2004: £130,622). 45 TOPPS TILES PLC Annual Report and Financial Statements 2005 NOTES TO THE FINANCIAL STATEMENTS continued For the 52 week period ended 1 October 2005 6 Finance income (net) Investment income Interest receivable and similar income Interest payable and similar charges Bank loans and overdrafts Interest on VAT payments Joint venture interest Interest costs capitalised Net finance charges Net finance income 52 weeks ended 1 October 2005 £’000 1,076 (372) (64) (27) 29 (434) 642 53 weeks ended 2 October 2004 £’000 930 (373) – (27) 174 (226) 704 Finance costs have been capitalised based on a capitalisation rate of 4.5%, which is the weighted average of rates applicable to the Group’s general borrowings outstanding during the period. 7 Profit on ordinary activities before taxation a) Profit on ordinary activities before tax is stated after charging/(crediting): Depreciation and amounts written off tangible fixed assets Amortisation of goodwill Joint venture goodwill Loss on disposal of tangible fixed assets Exceptional profit on disposal of fixed assets Operating lease rentals - plant and machinery - other Remuneration to auditors - audit - other 46 TOPPS TILES PLC Annual Report and Financial Statements 2005 52 weeks ended 1 October 2005 £’000 3,363 16 18 – (1,700) 746 13,047 70 47 53 weeks ended 2 October 2004 £’000 2,729 17 18 269 (542) 563 11,652 54 181 7 Profit on ordinary activities before taxation (continued) b) Exceptional operating items that have been charged in the period are as follows: Impairment of display stands 8 Tax on profit on ordinary activities The tax charge comprises: Current tax UK corporation tax Share of current tax paid by joint venture Adjustments in respect of prior years - UK corporation tax Total current tax Deferred tax - Origination and reversal of timing differences (note 18) Total tax on profit on ordinary activities 52 weeks ended 1 October 2005 £’000 – – 53 weeks ended 2 October 2004 £’000 344 344 52 weeks ended 1 October 2005 £’000 53 weeks ended 2 October 2004 £’000 8,688 16 (142) 8,562 481 9,043 7,573 19 39 7,631 515 8,146 47 TOPPS TILES PLC Annual Report and Financial Statements 2005 NOTES TO THE FINANCIAL STATEMENTS continued For the 52 week period ended 1 October 2005 8 Tax on profit on ordinary activities (continued) The differences between the total current tax shown above and the amount calculated by applying the standard rate of UK corporation tax to the profit before tax is as follows: Profit on ordinary activities before tax Tax on profit on ordinary activities at standard UK corporation tax rate of 30% Effects of: Intra-Group restructuring Net income not chargeable for tax purposes Capital allowances in excess of depreciation Depreciation on tangible fixed assets which do not qualify for capital allowances Savings from Share Symmetry on options exercised Accounting profit in excess of chargeable gains on sale of freehold property Higher tax rate on overseas earnings Adjustments to tax charge in respect of prior periods Current tax charge for period 9 Dividends Interim paid 3.50p (2004 – 2.00p) per ordinary share Final proposed 6.00p (2004 – 6.00p) per ordinary share Over provision in respect of the prior period final dividend 52 weeks ended 1 October 2005 £’000 39,232 11,770 (540) (1,590) (297) 128 (729) (38) – (142) 8,562 52 weeks ended 1 October 2005 £’000 7,983 13,576 (67) 53 weeks ended 2 October 2004 £’000 33,794 10,139 – (869) (475) 196 (1,408) – 9 39 7,631 53 weeks ended 2 October 2004 £’000 4,602 13,593 (40) Total 9.50p (2004 – 8.00p) per ordinary share 21,492 18,155 48 TOPPS TILES PLC Annual Report and Financial Statements 2005 10 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: 52 weeks ended 1 October 2005 Number of shares 53 weeks ended 2 October 2004 Number of shares 226,351,825 1,678,222 226,881,069 3,868,815 228,030,047 230,749,884 Total £’000 693 142 34 176 517 551 Weighted average number of shares For basic earnings per share Weighted average of shares under option For diluted earnings per share 11 Goodwill Cost At 3 October 2004 and 1 October 2005 Amortisation At 3 October 2004 Charge for the period At 1 October 2005 Net book value At 1 October 2005 At 2 October 2004 49 TOPPS TILES PLC Annual Report and Financial Statements 2005 NOTES TO THE FINANCIAL STATEMENTS continued For the 52 week period ended 1 October 2005 12 Tangible fixed assets Group Cost At 3 October 2004 Additions Disposals At 1 October 2005 Depreciation At 3 October 2004 Charge Disposals At 1 October 2005 Net book value At 1 October 2005 At 2 October 2004 Land and buildings Freehold £’000 Short leasehold £’000 11,204 3,548 (2,342) 12,410 278 203 (57) 424 11,986 10,926 1,293 88 – 1,381 700 81 – 781 600 593 Fixtures and fittings £’000 25,548 5,067 (117) 30,498 8,127 3,015 32 11,174 19,324 17,421 Motor vehicles £’000 346 88 (185) 249 50 64 (27) 87 162 296 Total £’000 38,391 8,791 (2,644) 44,538 9,155 3,363 (52) 12,466 32,072 29,236 Freehold land and buildings include £372,466 (2004 - £406,535) of assets under construction and £2,160,000 of land (2004 - £2,160,000) on which no depreciation has been charged in the current period. Cumulative finance costs capitalised included in the cost of tangible fixed assets amount to £370,000 (2004 - £341,000) for the Group. 50 TOPPS TILES PLC Annual Report and Financial Statements 2005 13 Fixed asset investments Cost Subsidiary undertakings Joint venture Company 1 October 2005 £’000 14,640 482 15,122 2 October 2004 £’000 14,640 482 15,122 The Company and the Group have investments in the following subsidiary undertakings and joint ventures which principally affected the profit or net assets of the Group. To avoid a statement of excessive length, details of investments which are not significant have been omitted. % of issued shares held Principal activity Subsidiary undertaking Topalpha Limited* Multi Tile Limited Topps Tiles (UK) Limited Topps Tiles Distribution Ltd Joint venture undertaking Topps Tiles Holdings BV* 100% 100% 100% 100% Property management and investment Retail and wholesale of ceramic tiles, wood flooring and related products Retail and wholesale of ceramic tiles, wood flooring and related products Wholesale and distribution of ceramic tiles, wood flooring and related products. 50% Retail and wholesale of ceramic tiles, wood flooring and related products *held directly by Topps Tiles Plc The investments are represented by ordinary shares. All undertakings are incorporated in Great Britain and are registered and operate in England and Wales except for Topps Tiles (Holland) BV which is registered and incorporated in the Netherlands. Joint venture Group Share of gross assets Share of gross liabilities Share of net assets 51 TOPPS TILES PLC Annual Report and Financial Statements 2005 1 October 2005 £’000 2 October 2004 £’000 1,196 (971) 225 1,059 (866) 193 NOTES TO THE FINANCIAL STATEMENTS continued For the 52 week period ended 1 October 2005 14 Debtors Amounts falling due within one year: Trade debtors Loan to joint venture Amounts owed by subsidiary undertaking Other debtors Prepayments and accrued income Amounts falling due after one year: Loan to joint venture Amounts owed by subsidiary undertaking 15 Creditors: Amounts falling due within one year Bank loans and overdrafts (note 17) Trade creditors Other creditors Corporation tax Proposed dividend Accruals and deferred income 16 Creditors: Amounts falling due after more than one year Bank loan (note 17) Accruals and deferred income 52 TOPPS TILES PLC Annual Report and Financial Statements 2005 Group Company 1 October 2005 £’000 2 October 2004 £’000 1 October 2005 £’000 2 October 2004 £’000 238 – – 523 3,310 4,071 115 – 115 1 October 2005 £’000 – 14,389 4,114 3,640 13,576 4,056 39,775 1 October 2005 £’000 6,000 3,394 9,394 635 – – 651 2,523 3,809 110 – 110 – – 76,209 – – 76,209 – 6,200 6,200 Group Company 2 October 2004 £’000 517 14,649 4,109 3,942 13,593 8,642 45,452 1 October 2005 £’000 30,097 9 151 – 13,576 381 44,214 – – 40,103 – – 40,103 – 6,200 6,200 2 October 2004 £’000 2,615 3 215 15 13,593 2,754 19,195 Group Company 2 October 2004 £’000 6,000 1,571 7,571 1 October 2005 £’000 – 3,394 3,394 2 October 2004 £’000 – – – 17 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’s operations are liquidity risk, interest rate risk and currency risk. Liquidity risk The Group’s objective is to maintain continuity of funding through the use of retained profits and medium to long-term borrowings. The maturity profiles of the Group’s borrowings are detailed in section (c) of this note. Interest rate risk The Group’s objective is to manage the exposure to interest rate fluctuations whilst trying to minimise the cost of capital of the Group. 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’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. a) Interest rate profile The currency profile of the Group’s financial assets is as follows: Sterling Euro Dollar 1 October 2005 £’000 27,940 164 (275) 27,829 Group 2 October 2004 £’000 29,719 (33) (62) 29,624 Financial assets (liabilities) comprise short term cash deposits with major United Kingdom clearing banks (with associated right of off-set) and deposits placed on money markets at call. The financial assets (liabilities) earn floating rates of interest based upon bank base rates. 53 TOPPS TILES PLC Annual Report and Financial Statements 2005 NOTES TO THE FINANCIAL STATEMENTS continued For the 52 week period ended 1 October 2005 17 Derivatives and other financial instruments (continued) The interest rate profile of the Group’s financial liabilities is as follows: Sterling – Borrowings Loan 1 Loan 2 Total 1 October 2005 2 October 2004 £’000 % £’000 % Floating rate – 6,000 6,000 1.00 0.75 517 6,000 6,517 1.00 0.75 The interest rate on floating rate financial liabilities indicates the excess over bank base rate. Loan 2 has an offset facility whereby if the cash deposit is equivalent to the loan value the Company only pays 0.75% on loan value. b) Currency exposures The amounts shown in the table below show the effect of forward contracts entered into to manage foreign currency exposure as at 2 October 2004 and 1 October 2005. Contract delivery 1 Nov 2004 1 Dec 2004 Currency Euro Euro 1 October 2005 Contract delivery Initial contract value £’000 Currency 2 October 2004 Initial contract value £’000 – – 650 250 650 650 650 650 650 650 650 650 650 6,750 3 Oct 2005 3 Oct 2005 1 Nov 2005 1 Nov 2005 1 Dec 2005 1 Dec 2005 3 Jan 2006 1 Feb 2006 1 Mar 2006 4 Apr 2006 2 May 2006 Euro USD Euro Euro Euro Euro Euro Euro Euro Euro Euro 500 500 – – – – – – – – – – – 1,000 Contract 1 Contract 2 Contract 3 Contract 4 Contract 5 Contract 6 Contract 7 Contract 8 Contract 9 Contract 10 Contract 11 Contract 12 Contract 13 54 TOPPS TILES PLC Annual Report and Financial Statements 2005 17 Derivatives and other financial instruments (continued) c) Maturity of financial liabilities The maturity profile of the Group’s financial liabilities was as follows: In one year or less In more than two years but not more than five years Total 1 October 2005 £’000 – 6,000 6,000 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 1 October 2005 £’000 2,000 2,500 4,500 e) Fair values There is no material difference between the fair value and book value of the Group’s financial assets and liabilities at the end of either period. 18 Provisions for liabilities and charges At 3 October 2004 Charged to profit and loss account At 1 October 2005 Deferred tax is provided as follows: Accelerated capital allowances 55 TOPPS TILES PLC Annual Report and Financial Statements 2005 1 October 2005 £’000 2,345 2 October 2004 £’000 517 6,000 6,517 2 October 2004 £’000 2,000 1,983 3,983 Deferred taxation £’000 1,864 481 2,345 2 October 2004 £’000 1,864 NOTES TO THE FINANCIAL STATEMENTS continued For the 52 week period ended 1 October 2005 19 Called-up share capital Ordinary shares of 2.5p each Authorised Beginning and end of period Allotted, called-up and fully-paid At beginning of period Issued in period Treasury Shares cancellation At end of period 1 October 2005 Number of shares £’000 320,000,000 8,000 226,952,805 1,413,585 (2,129,915) 226,236,475 5,673 35 (53) 5,655 During the period the Company allotted 1,413,585 (2004 – 6,055,380) ordinary shares with a nominal value of £35,000 (2004 – £151,000) under share option schemes for an aggregate cash consideration of £721,000 (2004 – £3,325,000). 20 Reserves Group At 3 October 2004 Premium on issue of new shares Treasury Shares purchased Treasury Shares cancellation Retained profit for the period At 1 October 2005 Company At 3 October 2004 Premium on issue of new shares Treasury Shares purchased Treasury Shares cancellation Retained profit for the period At 1 October 2005 Share premium £’000 4,889 686 – – – 5,575 Special reserve £’000 14,917 – – – – 14,917 Merger reserve £’000 (399) – – – – (399) Treasury shares £’000 (733) – (3,774) 4,507 – – Treasury shares £’000 (733) – (3,774) 4,507 – – Capital redemption reserve £’000 137 – – 53 – 190 Capital redemption reserve £’000 Profit and loss account £’000 137 – – 53 – 190 23,442 – – (4,507) 8,697 27,632 Other reserves £’000 Profit and loss account £’000 6,200 – – – – 6,200 11,147 – – (4,507) 10,746 17,386 Share premium £’000 4,889 686 – – – 5,575 The Directors consider the balances on the Company profit and loss account and special reserves to be distributable. The other reserve comprises an unrealised gain arising on the disposal of certain trademarks to a subsidiary company. 56 TOPPS TILES PLC Annual Report and Financial Statements 2005 21 Reconciliation of movements in Group equity shareholders’ funds Profit for the period Dividends paid and proposed Consideration for purchase of Treasury Shares Exchange differences Issue of shares (net of expenses) Net additions to shareholders’ funds Opening equity shareholders’ funds Closing equity shareholders’ funds 21a) Reconciliation of operating profit to operating cash flows Operating profit Depreciation Loss on disposal of fixed assets Goodwill amortisation Increase in stocks (Increase)/decrease in debtors (Decrease)/increase in creditors Net cash inflow from operating activities 21b) Returns on investments and servicing of finance Interest received Interest paid Net cash inflow from returns on investments and servicing of finance 57 TOPPS TILES PLC Annual Report and Financial Statements 2005 52 weeks ended 1 October 2005 £’000 30,189 (21,492) (3,774) – 721 5,644 33,009 38,653 52 weeks ended 1 October 2005 £’000 36,834 3,363 – 34 (965) (267) (3,233) 35,766 52 weeks ended 1 October 2005 £’000 942 (308) 634 53 weeks ended 2 October 2004 £’000 25,648 (18,155) (8,640) 9 3,325 2,187 30,822 33,009 53 weeks ended 2 October 2004 £’000 32,509 2,729 269 35 (4,660) 793 6,095 37,770 53 weeks ended 2 October 2004 £’000 930 (400) 530 NOTES TO THE FINANCIAL STATEMENTS continued For the 52 week period ended 1 October 2005 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 New loans Purchase of Treasury Shares Repayment of loans Net cash outflow from financing 21e) Analysis and reconciliation of net funds Cash at bank and in hand Debt due within 1 year Due debt after 1 year Net funds 58 TOPPS TILES PLC Annual Report and Financial Statements 2005 52 weeks ended 1 October 2005 £’000 (8,564) 4,292 (4,272) 52 weeks ended 1 October 2005 £’000 721 – (3,774) (517) (3,570) Cash flow £’000 (1,795) 517 – (1,278) 53 weeks ended 2 October 2004 £’000 (11,491) 3,225 (8,266) 53 weeks ended 2 October 2004 £’000 3,325 3,095 (8,640) – (2,220) At 1 October 2005 £’000 27,829 – (6,000) 21,829 At 2 October 2004 £’000 29,624 (517) (6,000) 23,107 21e) Analysis and reconciliation of net funds (continued) (Decrease)/increase in cash in the period Cash inflow (outflow) from increase/(decrease) in debt and finance leasing Movements in net funds in the period Net funds at start of period Net funds at end of period 22 Financial commitments a) Capital commitments At the end of the period there were no capital commitments contracted (2004 - £nil). 52 weeks ended 1 October 2005 £’000 (1,795) 517 (1,278) 23,107 21,829 53 weeks ended 1 October 2004 £’000 11,044 (3,095) 7,949 15,158 23,107 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 £216,000 (2004 - £175,000). c) Lease commitments The Group has entered into non-cancellable operating leases in respect of motor vehicles, equipment and land and buildings. The annual rentals under the foregoing leases are as follows: Operating leases which expire: - within 1 year - within 2 - 5 years - after 5 years 1 October 2005 2 October 2004 Land and buildings £’000 1,030 2,521 9,688 13,239 Other £’000 92 623 30 745 Land and buildings £’000 1,255 2,052 8,777 12,084 Other £’000 56 516 11 583 23 Related parties At 1 October 2005 S.K.M. Williams was the landlord of two properties leased to Multi Tile Limited, a trading subsidiary of Topps Tiles Plc, for £66,000 (2004 - £66,000). No amounts were outstanding at 1 October 2005 (2004 - £nil). The lease agreements on both properties are operated on commercial arms length terms. 59 TOPPS TILES PLC Annual Report and Financial Statements 2005 FIVE YEAR RECORD 52 weeks ended 2 June 2001 £’000 52 weeks ended 1 June 2002 £’000 Proforma 52 weeks ended 27 September 2003 Unaudited £’000 53 weeks ended 2 October 2004 £’000 52 weeks ended 1 October 2005 £’000 Turnover, including joint ventures 74,642 91,026 120,032 159,430 175,640 Operating profit Profit before taxation Shareholders’ funds Basic earnings per share1 Dividend per share1 Dividend cover Average number of employees Share price (period end)1 1adjusted for share sub-division of 5:1 in May 2004. 9,637 9,414 18,669 2.96p 1.00p 2.9 941 66.0p 11,660 11,516 23,824 3.58p 1.43p 2.5 1,070 54.8p 18,569 18,888 30,822 5.82p 3.48p 1.67 1,176 85.4p 32,548 33,794 33,009 11.30p 8.00p 1.41 1,327 36,890 39,232 38,653 13.34p 9.50p 1.41 1,513 178.9p 172.0p 60 TOPPS TILES PLC Annual Report and Financial Statements 2005 NOTICE OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that the Annual General Meeting of Topps Tiles Plc (the “Company”) will be held at Topps Tiles Plc, Thorpe Way, Grove Park, Enderby, Leicestershire, LE19 1SU on Tuesday 10 January 2006 at 10.30 a.m. for the following purposes: Ordinary business 1 To receive and adopt the Company’s Annual Report and Financial Statement for the financial period ended 1 October 2005 together with the last Directors’ Report, the last Directors’ Remuneration Report and the Auditors’ Report on those accounts and the auditable part of the Directors’ Remuneration Report. 2 To declare a final dividend of 6.00 pence per Ordinary Share on the Ordinary Shares for the period. 3 To re-elect Barry Bester as a Director of the Company. 4 To re-elect Andrew Liggett as a Director of the Company. 5 To re-elect the Rt. Hon. Michael Jack as a Director of the Company. 6 To re-elect Victor Watson who reached the age of 77 years on 26 September 2005, as a Director of the Company. 7 To re-appoint Deloitte & Touche LLP as Auditors to hold office from the conclusion of the meeting to the conclusion of the next meeting at which the Annual Report and Financial Statements are laid before the Company at a remuneration to be determined by the Directors. 8 To approve the Directors’ Remuneration Report for the financial period ended 1 October 2005 as set out in the Annual Report and Financial Statements for that period. Special business To consider and, if thought fit, to pass the resolutions set out below which, in the case of Resolution 9 will be proposed as an Ordinary Resolution and, in the case of Resolutions 10 and 11 will be proposed as Special Resolutions. 9 THAT the Directors of the Company 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 £1,885,303 (in substitution for/to any existing authorities under the Act) to such persons at such times and upon such terms and conditions as they may determine (subject always to the articles of association of the Company) provided that this authority shall (unless previously revoked, varied or extended by the Company in general meeting) expire at the conclusion of the next Annual General Meeting or 15 months from the date of the passing of this resolution, if earlier save that the Company may, before such expiry, make an offer, agreement or arrangement which would or might require relevant securities to be allotted after the expiry of such period and the Directors may then allot relevant securities pursuant to any such offer, agreement or arrangement as if the authority or power conferred hereby had not expired. 61 TOPPS TILES PLC Annual Report and Financial Statements 2005 NOTICE OF ANNUAL GENERAL MEETING continued Special business (continued) 10 THAT subject to and conditional on the passing of Resolution 9 set out above, the Directors of the Company be and they are authorised and 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 general authority and power 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 authority and power shall unless renewed, varied or revoked, expire at the conclusion of the next Annual General Meeting of the Company or 15 months from the date of the passing of this resolution, if earlier and provided further that this authority and power shall be limited to: (a) the allotment of equity securities pursuant to a rights issue or similar offer to Ordinary Shareholders where the equity securities respectively attributable to the interests of all Ordinary Shareholders are proportionate or as nearly as practical (and taking into account any prohibitions against or difficulties concerning the making of an offer of allotment to shareholders whose registered address or place of residence is overseas and subject to such exclusions as the Directors of the Company may deem necessary or expedient to deal with fractional entitlement or record dates) to the respective numbers of Ordinary Shares held by them; and (b) the allotment (otherwise than pursuant to paragraph (a) above) of equity securities up to an aggregate nominal amount of the greater of £282,795 or 5% of the issued share capital of the Company. 11 THAT the Company be generally and unconditionally authorised for the purposes of Section 166 of the Act to make market Purchases (within the meaning of Section 163(3) of the Act) of Ordinary Shares of 2.5p each in the capital of the Company (“Ordinary Shares”) provided that: (a) the maximum number of Ordinary Shares hereby authorised to be purchased is 33,709,234 (representing 14.9% of the Company’s issued Ordinary Share capital); (b) the minimum price, exclusive of any expenses, which may be paid for an Ordinary Share is 2.5p; (c) the maximum price, exclusive of any expenses, which may be paid for an Ordinary Share is an amount equal to 105% 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; (d) unless previously renewed, varied or revoked, the authority conferred shall expire at the close of the next Annual General Meeting of the Company or twelve months from the date of this resolution, if earlier; and (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. 62 TOPPS TILES PLC Annual Report and Financial Statements 2005 Notes 1 This notice has been sent to all Ordinary Shareholders who are entitled to attend or be represented at the meeting. 2 A member entitled to attend and vote at the Annual General Meeting 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’s Registrars, Capita Registrars (Proxies), PO Box 25, Beckenham, Kent BR3 4BR, no later than 48 hours before the time appointed for the holding of the Annual General Meeting. 3 A proxy is not entitled to speak at the meeting except to demand a poll, and may vote only when a poll is taken. 4 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. 5 As permitted by Regulation 41 of the Uncertified Securities Regulations 2001, only those shareholders who are registered on the Company’s share register at 8.00am on 9 January 2006 (or if the meeting is adjourned, shareholders entered on the Company’s register of members not later than 48 hours before the time fixed for the adjourned meeting) shall be entitled to attend the Annual General Meeting 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 9 January 2006 (or, if the meeting is adjourned after 48 hours before the time fixed for the adjourned meeting) shall be disregarded in determining the rights of any person to attend and/or vote at the Annual General Meeting. 6 CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment service may do so for the Annual General Meeting and any adjournment(s) thereof by utilising the procedures described in the CREST Manual. CREST Personal Members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf. In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a “CREST”Proxy Instruction”) must be properly authenticated in accordance with CRESTCo’s specifications and must contain the information required for such instructions, as described in the CREST Manual. The message must be transmitted so as to be received by the issuer’s agent (ID : RA10) by the latest time(s) for receipt of proxy appointments specified in the notice of meeting. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means. CREST members and, where applicable, their CREST sponsors or voting service providers should note that CRESTCo does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001. 7 The following documents are available for inspection by members at the registered office of the Company (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’ interests required to be kept under Section 325 of the Act; and (b) copies of the Directors’ service contracts. A. Liggett Company Secretary 29 November 2005 63 TOPPS TILES PLC Annual Report and Financial Statements 2005 Registered Office: Registered No: Rushworth House Wilmslow Road Handforth,Wilmslow Cheshire SK9 3HJ 3213782 EXPLANATORY NOTES TO THE NOTICE OF ANNUAL GENERAL MEETING THE ANNUAL GENERAL MEETING of the Company will be held at the Company’s premises at Thorpe Way, Grove Park, Enderby, Leicestershire LE19 1SU on 10 January 2006 at 10.30a.m. Three of the resolutions are to be taken at this year’s Annual General Meeting as special business. By way of explanation of these and certain other resolutions: Ordinary Business Resolution 2 Final dividend A final dividend of 6.00 pence 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 13 January 2006. Subject to approval by the Ordinary Shareholders at the Annual General Meeting, the dividend will be paid on 31 January 2006. An interim dividend of 3.50 pence per Ordinary Share was paid on 30 June 2005. This gives a total dividend level of 9.50 pence per Ordinary Share for the 52 week period to 1 October 2005. Resolutions 3, 4, 5 and 6 Re-election of directors B. Bester, A. Liggett, M. Jack and V.H. 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 three years with the exception of VH Watson who at the age of 77 retires and offers himself for re-election annually. Brief biographical details about the Directors standing for re-election appear on pages 20 and 21 of the Annual Report and Financial Statements. Special notice of the Intention to propose the resolution to re-elect Victor Watson has been duly given as required by sections 379 and 293(5) of the Companies Act 1985. Special Business Resolutions 9 and 10 Appointment of authority to issue shares and the disapplication of statutory rights of pre-emption Resolution 9: 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 (“the Act”), Resolution 9 will be put to members as special business to authorise the Directors to allot Ordinary Shares with a nominal value of £1,885,303 out of the Company’s unissued share capital representing approximately 33.3% of the Company’s current issued share capital (excluding shares held in treasury). The Company currently holds Nil Ordinary Shares in treasury. The Directors have no current intention of exercising the authority to allot further shares. The authority shall expire immediately following the Annual General Meeting next following the resolution or, if earlier, 15 months following the resolution being passed. 64 TOPPS TILES PLC Annual Report and Financial Statements 2005 Special Business (continued) Resolution 10: This proposed resolution seeks to obtain power under Section 95 of the Act to enable the Directors to allot, for cash, shares with an aggregate nominal value of £282,795 equal to approximately 5% of the Company’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’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 Annual General Meeting next following the resolution or, if earlier, 15 months following the resolution being passed. Resolution 11 Authority to purchase Ordinary Shares At the Annual General Meeting, 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 the conclusion of the Annual General Meeting to be held in 2007 or twelve months from the date of this resolution, if earlier. This authority will be limited to the purchase of not more than 14.9% of the Ordinary Shares currently in issue. This represents the maximum amount of Ordinary Share capital in issue which is permitted before tender or partial offer to all shareholders is require 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 2.5p per Ordinary Share. 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. The Directors’ current intention is that the authority sought by Resolution 11 shall be utilised in respect of employee share options as they are exercised. As at 29 November 2005, there were options to subscribe for 1,858,455 equity shares outstanding under various schemes representing approximately 0.82% 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 0.97% of the issued share capital following the repurchase of shares. 65 TOPPS TILES PLC Annual Report and Financial Statements 2005 FINANCIAL CALENDAR Key dates Annual General Meeting and first quarter trading update 10 January 2006 Final dividend payable 31 January 2006 2005/06 interim results announcement 2005/06 interim dividend payable Third quarter trading update May 2006 June 2006 July 2006 2005/06 full year results announcement November 2006 66 TOPPS TILES PLC Annual Report and Financial Statements 2005 THE TEAM 1,672 people - one team A Aaron Brand Aaron Cook Aaron Frogley Aaron Hodgkinson Abdulkadir Kulmie Adam Boshir Adam Charles Adam Coates Adam Gale Adam Harris Adam Howie Adam Hughes Adam Laidlaw Adam Lucas Adam Mundy Adam Stopford Adam Walker Adrian Earley Adrian McCorkell Adrian McCourt Adrian Partridge Adrian Pickup Adrian Rimmington Ahmar Nadeem Aidan Ward Aileen Crossley Akommil Ali Akushu Mulenga Alan Cordery Alan Faulkner Alan Grady Alan Harding Alan Hartley Alan Hemsley Alan Jones Alan Logan Alan Mcdonald Alan McIntosh Alan Monk Alan Parker Alan Rogers Alan Rolf Alan Saunders Alan Sinclair Alan Smalley Alan Sproston Alasdair Higgins Alec Dakin Alex Bott Alex Long Alex Padgham Alex Paterson Alexander Mcaleese Alexander Onions Alexandria Murphy Ali Sadique Ali Syed Alistair Fleming Alistair Payne Allan Duffy Allan Gill Allan Harper Alvin Chinyanga Alvin Lapao Amadou Janneh Amanda Green Amanda Hullett Amar Mohammed Amardeep Flora Amin Ladhu Andrea Hallifield Andrew Armstrong Andrew Bailey Andrew Baillie Andrew Carlisle Andrew Clay Andrew Collins Andrew Curr Andrew Curtis Andrew French Andrew Green Andrew Hanson Andrew Hastings Andrew Hill Andrew Jones Andrew Liggett Andrew Lindley Andrew Macdonald Andrew Merz Andrew Middleton Andrew Moore Andrew Murphy Andrew Parnell Andrew Smith Andrew Snary Andrew Ward Andrew Warwick Andrew Waterfield Andrew Wathan Andrew Wheat Andrew Whiteley Andrew Williams Andrew Wood Andrew Woolley Andrew Young Andy Bird Andy Dawson Andy Playfoot Andy Shaw Andy Thomas Angela Harrison Angela Tremelling Anil Sehdev Anna Chang Pin Tive Anna Timney Anne Lloyd Anne Mccabe Anne-Marie Carpenter Annette Harris Annmarie Malone Anthony Bradford Anthony Christopher Anthony Cope Anthony Cox Anthony Dent Anthony Dightam Anthony Dwyer Anthony Fincher Anthony Fleming Anthony Fusco Anthony Gilbert Anthony Linsell Anthony Molyneux Anthony Oleru Anthony Telfer Anthony Wychwood Antony Beazer Antony Parker Antony Plant Arnold Harrison Ashaheed Khan Ashley Jordan Astone Davids Audley Hall B Balvinder Singh Barbara Edge Barbara Horn Barbara Scales Barclay Pope Barnaby Chambers Barrie Palmer Barry Bester Barry Gales Barry Hodges Barry Shane Barry Squires Barry Taylor Barry Webber Bas Snellenburg Belinda Davis Ben Armitage Ben Brink Ben Colliss Ben Davis Ben Garrett Ben Holder Ben Lee Ben Smee Ben Wood Ben Wood Ben Woollins Benjamin Finn Benjamin Marland Benjamin Naughton Benjamin Rich Benjamin Whittingham Benoni Akuetteh Bernadette Crawford-King Bernard Cope Bert Van Houten Bertil Boyles Beverley Bond Beverly Butler Blake Heys Blodwyn Hopkins Bob Heuerman Bob Snellenburg Bobby Park Brad Crosthwaite Bradley Cooper Bradley Cromwell Brandon Abels Brant Wells Brendan Munsamy Brendon Roberts Brett Goulden Brian Adams Brian Allchin Brian Dicks Brian Fisher Brian Kirwin Brian Nelson Brian Richards Brian Simpson Bridget Anderson Bruce Fielding Bruno Alves Bryan Hartley Burzes Batliwalla C Cade Somerville Calbert Hall Campbell Marr Carl Bradbury Carl Brown Carl Cumberbatch Carl Dyke Carl Fraser Carl Johnson Carl Sheppard Carl Taylor Carl Whatley Carol Lakin Carol Livingstone Caroline Bennett Caroline Crofts Caroline Head Caroline May Cassandra Huitson Catherine Harvey Catherine Platt Catherine Waldron Chad Thompson Chan Gokani Chantelle Fallows Charles Dougherty Charles Quaintence Charles Tetley Charlotte Highley Chetan Patel Chioma Onyeakazi Chirag Patel Chris Bain Chris Cameron-Waller Chris Cartey Chris Davies Chris Dixon Chris Edwards Chris Evans Chris Forbes Chris Gough Chris Heyes Chris Ireland Chris Jelley Chris Kantelberg Chris Newell Chris Riddick Chris Semple Chris Shute Chris Willshaw Christian Scannell Christina Langridge Christina Xavier Christine Earl Christine Hendry Christine Jones Christine Rea Christine Wadsworth Christine Whiteman Christopher Bowles Christopher Brown Christopher Chapman Christopher Cooper Christopher Cowap Christopher Haslam Christopher Hunter Christopher Newman Christopher Nicholls Christopher Ongaro Christopher Smith Christopher Turley Christopher Tyler Christopher Wright Christy Kolesniak Claire Loney Clare Barden Clare Hogg Clare Webster Claude Naidoo Cole Blackman Colin Clark Colin Hampson Colin Hoban Colin Markham Colin Rymer Colin Taylor Colin Vowles Colin Winterburn Conrad Harrup Cornelius Fru Ndi Corrine Marshall Craig Conway 67 TOPPS TILES PLC Annual Report and Financial Statements 2005 THE TEAM continued Craig Cooper Craig Gardener Craig Hill Craig Ollard Craig Palethorpe Craig Pike Craig Sims Craig Stewart Craig Tetlow Craig White Craig Woodward Crescent Baron Cyril Mitson D Daan Rubens Dale Hoy Dale Pugh Dale Robinson Damian Porter Damien Cramp Dan Hall Dan Lyle Dan Radford Daniel Banyard Daniel Britt Daniel Brooks Daniel Cross Daniel Davey Daniel Egan Daniel Fallows Daniel Fennings Daniel Findlay Daniel France Daniel Gibbs Daniel Greenley Daniel Hall Daniel Johnson Daniel Jones Daniel Jones Daniel Little Daniel Mann Daniel Musguin Daniel Nield Daniel Roberts Daniel Rosenthall Daniel Rowson Daniel Rudd Daniel Scott Francis Daniel Skinner Daniel Stiven Daniel Taylor Danielle Smythe Danielle Spencer Danielle Ten Hoven Danny Kok Danny Manning Danny Slater Danny Weatherley Danny Wratten Darone Dubois-Gayere Darran Wood Darren Bebbington Darren Connor Darren Doherty Darren Ferguson Darren Goode Darren Harper Darren Kemp Darren Mitchell Darren Morgan Darren Palmer Darren Pickering Darren Square Darren Taylor Darren Walker Dave Berry Dave Fitzgerald Dave Lalley Dave St John Dave Taylor David Asquith David Atherton David Ayling David Bailey David Biggs David Blades David Burnikell David Caldwell David Carpenter David Carr David Critchlow David Daulton David Dawson David Dorney David Dyason David Evans David Finnie David Fletcher David Gibson David Gridley David Harper David Hatton David Hayers David Henderson David Hirst David Houghton David Hulme David Hulse David Kershaw David Kettlewell David Kirkpatrick David Linsdell David Lott David Macartney David Madera David Mallyon David Marshall David Oliver David Palmer David Parr David Reid David Savage David Stanley David Steel David Stott David Strain David Sutcliffe David Sykes David Theobald David Thomasson David Townsley David Turner David Whitelaw David Willcox David Williams David Williams David Worrall Dawn Marsh Dean Belton Dean Brown Dean Bull Dean Hyde Dean Marshall Dean Purtill Dean Robertson Dean Smith Dean Titchen Dean Tricker Dean Woolley Debbie Burns Deborah White Debra Davies Delia Muwalo Denise Hughes Dennis Cragen Dennis Jepson Dennis Rawding Denzil Johns Derek Lambourn Derek Parsons Derek Robertson Derek Sim Derek Smith Devindren Govender Diane Shatford - Butcher Dilawar Ali Dinkar Ratna Dishon Meade Donal Higgins Donna Cox Donna Harvey Donna Paterson Donna Shirley Doreen Hyatt Duane Carey Dwayne Howard Dwayne Munroe Dylan Roberts E Eamonn Clancy Edmund Smith Edward Collop Edward Derbyshire Edward Dove Edward Gardiner Edward Moore Edward Murphy Elaine Miller Elizabeth Bott Elizabeth Kelly Elizabeth Mccourt Elizabeth Smith Emily Lenton Emin Demirkaya Emma Brookes Emma Kenney Emma Lane Emma Whatson Emma-Louise Rowlands Enid Lamb Eric Byarugaba Erik Rubens Ernest Johnson Esther Ten Hoven Euan Grieve F Fabian Bhundia Farzana Latif Fern Marshall Finbarr Mcquaid Fiona Shaw Flora Tuitt Folkert Hildama Fran Graysmark Frances Aylward Francis Donnelly Francis Shyngle Francis Slater Francis Tully Frank Hibbert Frans Levoleger Fuzile Mayo G Gail Clifton Gareth Henry Gareth Sutton Gareth Veck Gareth Ward Gareth Wright Garry Hardy Gary Ashdown Gary Asher Gary Bloomfield Gary Burns Gary Cerrone Gary Chapman Gary Curtis Gary Jennings Gary Marshall Gary Neale Gary Walmsley Gavin Bennett Gavin Buisst Gavin Carter Gavin Daubney Gavin Dwyer Gavin Mitchell Gavin Ramsey Gavin Smith Gayle Anderson Geerish Ramsaha Gemma Stephens Geoff Sutters George Lathan George Wilson Georgina Burgess Geraldine Plumtree Gerard Mallon Gianfranco Zanolini Gillian Archer Gillian Grace Gillian Gray Gina Regan Glaucia Lima Glen Holloway Glendale Canoville Glenn Claridge Glenn Fordyce Glyn Rogers Gordon Irvine Graham Brophy Graham Buckley Graham Chapman Graham Davies Graham Jones Graham White Gregory Barwick Gregory Carolina Gursharn Ladhar Guy Ferguson Guy Wakefield H Hans Ebbelink Harlukbir Sangha Harpreet Hansra Harry Biggs Harvinder Bunger Hayley Bover Helen Bosworth Helen Gosling Henri Khoury Heran Thakore Herman Kreikamp Hitesh Hirani Holly Bradbury Howard Farmer Hugh Selley Husna Iqbal I Iain Jackson Iain Philip Ian Bloomfield Ian Dodds Ian Fairfield Ian Hobson Ian Jones Ian Kirwin Ian Lightowlers Ian Mcalinden Ian Mcilvaney Ian Mcinteer Ian Mcnamara Ian Noon Ian Paterson Ian Pennington Ian Picken Ian Reavey Ian Sykes Ian Tebbutt Ian. Marshall Ilker Camur Imran Ashraf Imran Yousaf Ivan Frampton J Jack Carslake Jack Driscoll-Slack Jacob Bos Jacqueline Byrne Jacqueline Twidle Jacques Human Jajwinder Harar James Aspey James Baker James Bott James Cameron James Cernuschi James Coles James Dennett James Di Leva James Eastham James Edge James Hollingshead James Hudson James Kelly James Koroma James Lamkin James Lane James Martin James Mcgoldrick James Mcguigan James Mcmillan James Mercer 68 TOPPS TILES PLC Annual Report and Financial Statements 2005 James Metcalf James Mitchell James Morgan James Myatt James Pateman James Paterson James Patston James Pilfold James Repp James Robertson James Rollisson James Sinnott James Stark James Taylor Jamie Bannister Jamie Evans Jamie Gaynor Jamie Gorham Jamie Haisell Jamie Morgan Jamie Muir Jamie Parkes Jamie Wenborn Jamie White Jan Nijhof Jan Piwowar Jan Reddi Jan Sloterwijk Jane Graham Jane Horsford Janet Burgess Janet Lockyer Janet Riley Janice Millett Jasbinder Pal Jason Duller Jason Ealden Jason Forsyth Jason Johnstone Jason Meadows Jason Pratt Javeed Parkar Jayandrie Chetty Jayantilal Patel Jayaprakash Paragjee Jayawthe Weerasinge Jayson Vann Jean Smith Jeannette Hastie Jeffrey Armstrong Jemma Roberts Jenette Graham Jenna Faulkner Jennifer Donlan Jennifer Duckworth Jennifer Royce Jenny Seabrook Jeremy Apelgren Jeremy Harris Jermayne Stanley Jeroen Ligtelijn Jeroen Van Loveren Jessica Birchnall Jigyasu Yadav Jill Cox Jim Carpenter Jim Tuvey Jimmy Vander Plank Joan Hicks Joanna Kidner Joanne Mepham Joanne Stuart Jodie Baigrie Joe Blackwood Joe Cox Joe Hardwick Joe Parsons Joel Grace Johanna Asher John Chinn John Coles John Davidson John Davies John Davies John Ellis John Forden John Foster John Gardner John Harris John Harrison John Hickey John Johnston John Jones John Keouski John Lamb John Mcbride John Moat John Page John Rayner John Reilly John Riggs John Smith John Smith John Summers John Sutton John Thompson John Underwood John Vaughan John Wade John Whelan John Willis John Wright Johnathon Cox Johnny Elenbaas Jon Oliver Jon Potts Jonathan Bean Jonathan Benn Jonathan Coombs Jonathan Goddard Jonathan Hargreaves Jonathan Haycock Jonathan Morgan Jonathan Whitehead Jonathon Hall Jonathon Parker Jonathon Perkins Jonathon Sheerin Jon-Paul Hughes Jorris Maätita Jos Kantelberg Jos Verlaat Joseph Bentley Joseph Ellis Josephine Hilldrup Josh Wyatt Joshua Groener Joyce Davies Judith Sprules Juginder Gill Julian Lloyd Julie Ayrton Julie Blake Julie Cox Julie Fewings Julie Horsford Julie Jordan Juliet Wilford Julios Billones Justin Bradley Justin Clifford Justin Edmondson Justin Roberts K Kalpesh Limbochia Kalpesh Patel Kamlesh Shah Kandasamypillai Sureskumar Kara Robinson Karen Brook Karen Lakin Karen Sutcliffe Karim Tiller Karina-Jade Tubb Karl Austin Karl Bezemer Karl Brooks Karl Grayson Karl Jackson Karl Madge Karl Rowley Karl Stephens Karl Walker Kathryn Robinson Kawsor Ahmed Keiron Birch Keith Ambrose Keith Carr Keith Hughes Keith Pugh Keith Rudkin Keith Storrier Kelly Adams Kelly Ellison Kelly Whyte Kelly Wrenn Kelvin Hughes Kelvin Walley Ken Saunders Kenneth Frankland Kenneth Mckay Kenneth Owen Kenneth Pettengale Kenneth Turner Keri Stevenson Kerri Wood Kerry Atkinson Kerry Hume Kerry Millington Kerry Saunders Kerry-Ann Richardson Kevan Richardson Kevin Avins Kevin Bailey Kevin Baker Kevin Bennett Kevin Bowtle Kevin Brophy Kevin Crompton Kevin Dean Kevin Gallagher Kevin Hayes Kevin Nelson Kevin Reading Kevin Robbins Kevin Thorne Kevin Tulley Kevin Young Kieran Barnes-Warden Kieron Clarke Kim Kuijs Kim Liddle Kimberley Box Kimberly Cooper Kirsty Bover Kirsty Rhodes Kofi Danso Kris Bailey Kris Woakes Kriss Hutcheon Kristen Page Kristy Sadler Kuttapanicker Monilal Kyle Odgers L Lakhbir Kaur Lance Cale Larissa Gurney Laura Cowper Laura Doyle Laura Edwards Laura Johnson Laura Kershaw Laura Price Laura Shelley Laura Sherwood Laurence Clark Laurence Davies Laurence Loxam Leah Norris Leanne Foweather Leanne Kirk Leanne Langran Leanne Marshall Leanne Miles Leanne Murphy Lee Baxter Lee Carroll Lee Carver Lee Chapman Lee Culley Lee Davis Lee Dover Lee Durrant Lee Fisher Lee Fitzpatrick Lee Ford Lee Galloway Lee Harris Lee Hodgson Lee Jacovou Lee Johnstone Lee Kear Lee Kilcoyne Lee Morris Lee Payne Lee Shillibeer Lee Street Lee Tapp Lee West Lee Wilkinson Lee Williams Lee Winter Leigh Davies Leigh Holden Leigh Nielsen Leigh Russell Leigh Taylor Leon Fraser Leonard Denton Leonard Finch Leonard Wilson Leonie Van Der Valk Lesley Hawkes Leslie Maher Lewis Jordan Lewis Smith 69 TOPPS TILES PLC Annual Report and Financial Statements 2005 Lewis Yates Liam Hunt Liam Kemp Lianne Harrison-Allcock Lino Santiso Lindsey Baird Linsey Wilson Lisa Barrow Lisa Bell Lisa Heys Lisa Kousourou Lisa Norwood Lisa Sheppard Lisa Walker Lisa Wright Loretta Daley Lorna Ballantyne Louie Jago Louise Hannam Lucy Cartey Lucy Dacosta Lucy Henshall Luke Abbs Luke Nutting Luke Turner Lynette Grimes Lynn Pearson M Magnus White Majid Shafiq Malcolm Baker Mandeep Birak Mandeep Flora Mandy Aidney Manjeet Thathal Marc Andrisani Marc Breeze Marc Burton Marc Middleton Marc Why Marc Winter Marco Knip Margaret Lawrie Mario Van Der Valk Mark Allen Mark Arthur Mark Betts Mark Bianchi Mark Bober Mark Bourner Mark Bradbury Mark Briers Mark Brownset-Joyce Mark Cowley Mark Curwen Mark Discombe Mark Frisby Mark Garrity Mark Gasson THE TEAM continued Mark Geary Mark Hilton Mark Hirst Mark Hodgkinson Mark Hunter Mark Jepson Mark Johnson Mark Jones Mark Lever Mark Maciver Mark Meakin Mark Moore Mark Mottershead Mark Nicholls Mark Rigley Mark Samuels Mark Stephenson Mark Strong Mark Tennant Mark Thompson Mark Traynor Mark Waldock Mark Waller Mark Williams Mark Williams Mark Woodcock Martin Baker Martin Brophy Martin Clare Martin Curry Martin De Bruijn Martin Derricott Martin Horton Martin Jackson Martin Morris Martin Pryce Martin Shenton Martin Siggers Martin Sinnott Martin Smyth Martin Watt Martin Winterburn Martin Yardley Martyn Gilbert Marvin Daniels Mary Dodman Mary Lane Mary Smith Mary Stonard Mathew Mereweather Matthew Allson Matthew Beal Matthew Bond Matthew Broughton Matthew Connor Matthew Dunne Matthew Foster Matthew Foulger Matthew Hawley Matthew Jenner Matthew Johnson Matthew Lorenz Matthew Mckune Matthew Meigh Matthew Moore Matthew Rayner Matthew Riddell Matthew Robinson Matthew Savill Matthew Sigley Matthew Williams Matthew Winstone Matthew Wright Matthew Wyatt Maxine Barry Mehmet Asdoyuran Melanie Hall Melissa Isaac Melton Thompson Merlin Hassoldt Micha Stiphout Michael Bamborough Michael Blinkhorne Michael Boughton Michael Collins Michael Cosgrove Michael Cotter Michael Coward Michael Curtis Michael Dorman Michael Earls Michael Finn Michael Gay Michael Hall Michael Harrison Michael Holland Michael Hughes Michael Ingham Michael Jack Michael Jenks Michael Lemaitre Michael Litster Michael Mcvey Michael Revill Michael Rothengatter Michael Rout Michael Simmons Michael Skinner Michael Thacker Michael Whatley Michael Willis-Thompson Micheal Gallagher Michele Bloomfield Michele Poxon Michelle Forsyth Michelle Hands Michelle Kempson Michelle Lawson Michelle Mannion Mike Butler Mike Easton Mike King Mike Lee Mike Lock Mikeal Worship Milly Van Der Linden Mitchell Sole Mohamed Patel Mohammed Azhar Mohammed Jamil Mohammed Parvaz Mumtaz Khamisa Murray Mcpherson N Nadine Foster Nancy Beaver Narinder Chatha Natalie Hogg Nathan Austin Nathan Broughton Nathan Collins Nathan Coulthard Nathan Gourlay Nathan Seigneur Neil Bartholomeusz Neil Brownley Neil Carr Neil Clarke Neil Curtis Neil Hendy Neil Homan Neil Ketnor Neil Shephard Neil Thakore Neil Turner Neil Worthington Ngadhnjim Spahiu Nicholas Bradshaw Nicholas Clifford Nicholas Davies Nicholas Griffiths Nicholas Kyriacou Nicholas Lawrence Nicholas Leach Nicholas Ounstead Nicholas Payne Nicholas Salisbury-Jones Nicholas Stones Nicholas Thornton Nicholas Withers Nick Elmore Nick Hielckert Nick Wardman Nicky Dalley Nicola Acres Nicola Dearden Nicola Lewis Nicola Slater Nicola West Nicolas Wassell Nigel Brooks Nigel Fleming Nigel Parkinson Nigel Slaughter Nigel Wood Nikita Groener Nikola Sutton Nikolai Nikoloff Noel Hackett O Olaoye Ogunloye Oliver Knight Oliver Sawyer Osemar Masaya P Pamela Davie Parminder Nijur Pasquale Santaniello Patience Bender Patricia Campbell Patricia Squires Patrick Mcgee Patrique Janssen Paul Bainbridge Paul Barnard Paul Baxter Paul Burkett Paul Burrow Paul Carter Paul Castleton Paul Chalmers Paul Chapman Paul Clark Paul Cull Paul Day Paul Edwards Paul Galvin Paul Glynn Paul Goodson Paul Huxtable Paul Irving Paul Jones Paul Kelly Paul Lathrope Paul Laverty Paul Liggett Paul Mackin Paul Martindale Paul Mayfield Paul Mcculloch Paul Miller Paul Mills Paul Noyes Paul Oldroyd Paul Peacock Paul Price Paul Redfern 70 TOPPS TILES PLC Annual Report and Financial Statements 2005 Paul Rockett Paul Ruddle Paul Ryan Paul Saunders Paul Semple Paul Sluiter Paul Smith Paul Smith Paul Smith Paul Smith Paul Smitheringale Paul Southern Paul Starkey Paul Stuart Paul Sutton Paul Thorneycroft Paul Tomlin Paul Wheeler Paul Williams Paul Wixen Paula Budsworth Pauline Grenfell Pauline Harrison Pawel Warych Peter Charters Peter Davey Peter Davidson Peter Deegan Peter Gosling Peter Gyeantey Peter Hogg Peter Johnson Peter Jones Peter Kitchen Peter Lea Peter Lynn Peter Mcgowan Peter Robertson Peter Robinson Peter Samways Peter Smith Peter Tassenaar Peter Tilling Peter White Phil Kelly Philip Aird Philip Dunn Philip English Philip Glasgow Philip Gostick Philip Hawkeswood Philip Kelly Philip Lonsdale Philip Mccarney Philip Meakin Philip Tomlin Philip Tovey Phillip Downing Phillip Godden Phillip Hillier Phillip Hunt Phillip Lewis Phillip Walters Phillipa Hewitt Pius Chibwe Pravesh Ramsaha Q Quasim Bashir Quintin Palliam R Rabindranath Jewbali Rachel Siu Rahul Goel Raj Surani Rajan Mehta Rajbinder Dhanoya Rajiv Vadgama Ranjit Grewal Ravi Sudera Raymond Tricker Rebecca Crawshaw Rebecca Derricott Rebecca Ellis Rebecca Halliday Rebecca Heather Rebecca Oblein Rebecca Plant Recep Tarim Reedwan Desai Reg Anderton Rhonda Partridge Rhys Kelland Ria Croft Ricardo Malcolm Richard Bickers Richard Brookfield Richard Carter Richard Clark Richard Davies Richard Deavall Richard Dempsey Richard Fairley Richard Gallagher Richard Grove Richard Hamilton Richard Harris Richard Homan Richard Hopkin Richard Hutcheson Richard Jackson Richard Lewington Richard Mais Richard Oldale Richard Paine Richard Scott Richard Smallman Richard Spencer Smith Richard Tucker Warren Bester Warren Smith Wayne Bowditch Wayne Coleman Wayne Farini Wayne Hughes Wayne Quaintance Wayne Randell Wayne Tearle Wayne Van Der Merwe Wendy Altimas Wesley Neukermans Willam Owhor William Bailey William Brownsell William Gunshon William Hodgkinson William Lount William Ryves Wilmot Williams Wim Baggerman Wim Strik Wim Van Staden Y Yolandé Knight Yun Zang Yvonne Archer Yvonne Burgess Z Ziaur Rahman Richard Whitmore Richard Young Ricki Beagrie Ricky Holloway Ricky Loomes Ricky Ludlam Rob Mcguinness Rob Owen Robert Adams Robert Adkins Robert Avery Robert Bellamy Robert Brewin Robert Chawner Robert Clarke Robert Cole Robert Curd Robert Docker Robert Donnelly Robert Exley Robert Hall Robert Hodgson Robert Howker Robert Maples Robert Marcellin Robert Moss Robert Myers Robert Ramsay Robert Rayner Robert Reynolds Robert Taylor Robert Trigg Robert Watts Robert Wright Roberto Di-Leva Roberto Xavier Robin Pinhorn Rodger Mitchell Rodney Meyer Rodney Sanders Roger Bailey Roger Buckley Roger Channell Roger Gridley Romaldo Rodrigues Ronald Emmanuel Ronald Perrott Ronald Van Veenen Ronnie Webster Rosina Taylor Roslyn Naylor Ross Ashbrook Ross Malley Ross Mcnair Roy Haddon Roy Peasland Rudy Messiahs Russell Adgey Russell Thornton Ryan Busby Ryan Curd Ryan Milligan Ryan Morris S Sadaqat Basharat Sadia Ahmed Sagren Naidoo Sally Green Salvatore Andreozzi Sam Gobey Sam Nortey Sam Shepherd Samantha Barrett Samantha Perry Samantha Sayer Samantha Williams Samuel Geddam Sarah Crane Sarah Dallow Sarah Dobson Sarah Earthey Sarah Mccabe Sarah Pimm Sarah Whitehead Satyan Meisuria Scott Allaway Scott Ambrose Scott Coles Scott Davis Scott Frankland Scott Heritage Scott Mccluskey Scott Meadows Scott Smith Scott Williams Sean Cahill Sean Coleman Sean De'Oliveira Sean Howard Sean Kerry Sean Nunan Sean Wixen Shabeena Bibi Shane Malone Shane Moorhouse Shane Watson Shannon Woods Shanoor Ali Sharmake Abdulllahi Sharon Diffin Sharon Homer Sharon Mcclung Sharon Muir Sharon Pearce Sharron Bruce Shaun Douglas Shaun Hayes Shaun Mayes Shaun Scott Shawanna Hafiz Sheila Robertson Shelley Rutter Sherry Bell Sherry Conlay Silvonne Mclean Simon Atkinson Simon Brookfield Simon Brown Simon Casey Simon Chappell Simon Eldridge Simon Farr Simon Frew Simon Gill Simon Goodwin Simon Green Simon Henderson Simon Jones Simon Lasham Simon Morgan Simon Pitt Simon Rayner Simon Ricketts Simon Roberts Simon Taylor Simon Tuckley Simon Witham Siobhan Waters Sion Jackson Sophie Macdonald Stanley Crowther Stephan Linay Stephan Whitby Stephanie Hamer Stephanie Nevett Stephen Ainsworth Stephen Bloomfield Stephen Brighton Stephen Clark Stephen Collins Stephen Crane Stephen Davey Stephen Hosken Stephen Hunter Stephen Lewis Stephen Marshall Stephen Mcgowan Stephen Mcleod Stephen Mcveigh Stephen Nunn Stephen Seymour Stephen Sherwin Stephen Unsworth Stephen Williams Steve Claridge Steve Gaylor Steve Ho Steve Pratt Steve Whitehead Steve Wormald Steven Burke Steven Clark Steven Edwards Steven Godwin Steven Jenkins Steven Lockley Steven Lynn Steven Macarthur Steven Maggs Steven Morries Steven Nelson Steven Saunders Steven Tinkler Steven Walker Steven White Steven Whitehead Steven Whittle Stevie Parish Stuart Baigent Stuart Cooper Stuart Davey Stuart Hill Stuart Hillman Stuart Marcella Stuart Pemberton Stuart Rees Stuart Ross Stuart Whitby Stuart Williams Sudarshan Naidoo Sukhbinder Verdding Susan Attwell Susan Groombridge Susan Henshall Susan Hulme Susan Hunt Susan Wilcockson Susan Wright T Tahir Nazif Temiloluwa Longe Terance Langford Terance Palmer Terence Dooley Terence Marshall Terence White Terry Olivo Terry Wade Terry Webb Theo Buijs Theresa Murray Thierry Dellys Thomas Agate Thomas Cloete Thomas Cunningham Thomas Fry Thomas Girvan Thomas Hodgson Thomas Horsfield Thomas Lewis Thomas Mallion Thomas Pressley Thomas Roberts Thomas Ryan Thomas Steel Thomas Wade Thomas Woollard Tim Randall Tim Tatlock Timothy Boardman Timothy Harris Timothy Noble Timothy O'Sullivan Timothy Tuff Tina Munkley Toby Bateson Toby Collins Tom Evans Toni Thompson Tony Alliband Tony Haines Tony Martin Tony Milligan Tony Nunn Tony Simoes Tony Watson Tracey Gallagher Tracy Hudson Tracy Powell Trac Ryan Trac Stevens Tracy Wickenden Trevor Griffin Trevor Thomas Trevor Willers U Umar Ullah Upali Herath V Veronica Brownlie Vicky Dickinson Vicky Roberts Vicky Wilkinson Victor Watson Victoria Bachell Victoria Edge Victoria Mills Vilius Meilus Vincent Carroll Vinod Joshi Vipesh Kerai Vivienne Johns W Wade Cummings Walkey Hilarie 71 TOPPS TILES PLC Annual Report and Financial Statements 2005 STORE LOCATIONS TOPPS TILES TILE CLEARING HOUSE Central Region Aston Banbury Bedford Binley Boston Burton Bury St Edmunds Cambridge Cannock Clacton-on-Sea (cid:1) Colchester Coventry Derby Derby 2 Erdington Grantham (cid:1) Great Yarmouth Grove Park Hereford Ipswich Kidderminster Kings Heath Kings Lynn Leicester Lincoln Luton Mansfield Martlesham Milton Keynes Newcastle-U-Lyme Newark Northampton Norwich Nottingham Oldbury Peterborough Sheldon Shrewsbury Solihull Stafford Stamford (cid:1) Stoke on Trent Stratford-upon-Avon Tamworth Telford Wellingborough West Bromwich Wolverhampton Worcester Worksop (cid:1) London and Thames South Basildon Beckton Bexhill Braintree Brentwood Brighton Broadstairs Camberley (cid:1) Canterbury Catford Charlton Cheam Chelmsford Chichester (cid:1) Chingford Colindale Crayford Croydon Dagenham Eastbourne Edmonton Eltham Erith (cid:1) Farnborough Farnham Folkestone (cid:1) Fulham Gatwick Grays (cid:1) Gunnersbury Guildford Harlow Hedgend Highgate (cid:1) Horsham (cid:1) Ilford Isle of Wight Maidstone Mitcham New Southgate Newbury Newhaven (cid:1) Old Kent Road Orpington Penge Portsmouth Raynes Park Rayleigh Reading Richmond Romford Sittingbourne Slough Southall 72 TOPPS TILES PLC Annual Report and Financial Statements 2005 Southampton Southend Stamford Hill Sudbury Swindon Tonbridge Tunbridge Wells Twickenham Uckfield (cid:1) Uxbridge Vauxhall Waltham Cross Wandsworth (cid:1) Watford Wembley West Wickham North West Aintree Blackburn Blackpool Bolton Cheadle Chester Chester 2 Chorley Cleveleys Crewe Failsworth Flint Liverpool Macclesfield Morecambe Nantwich (cid:1) Northwich Oldham Ormskirk Preston Rhyl Sale Salford Snipe (Audenshaw) St Helens Stockport Stockport 2 (cid:1) Warrington Widnes Wigan Wrexham North Barnsley (cid:1) Barrow-in-Furness Birstall (cid:1) Carlisle Chesterfield Durham Harrogate Huddersfield Dewsbury Leeds Hull Sheffield Stockton Sunderland Tyneside Wakefield York Scotland Aberdeen Dundee Edinburgh Falkirk Glasgow Greenock Hillington Inverness Linwood Perth Rutherglen Sighthill (cid:1) Wishaw South West Barnstaple Basingstoke Bournemouth Bridgend Bridgewater Bristol Cardiff Cheltenham Christchurch Cribbs Causeway Exeter Frome (cid:1) Gloucester Hengrove Launceston Merthyr Tydfil Newport Plymouth Poole Salisbury Swansea Taunton Torquay Weston-Super-Mare Winchester Yeovil Central Region Aylesbury Fenton Great Barr Leicester Northampton Nottingham Peterborough Shrewsbury (cid:1) Stoke-on-Trent London and Thames South Barking Beckenham Charlton Eastbourne (cid:1) Harlow New Southgate Orpington Southampton (cid:1) Swindon Wembley North West Bolton Cheadle Crosby Maghull Oldham Preston Stockport Wigan North Bradford Darlington Doncaster Hull Sheffield Scotland Aberdeen Edinburgh (cid:1) South West Bournemouth Exeter Salisbury (cid:1) TOTAL 244 STORES (cid:1) New store 2004/05 London Stores Stores at beginning of period New stores opened Sub-Total Closures Total 187 20 207 – 207 Stores at beginning of period New stores opened Sub-Total Closures Total 33 5 38 (1) 37 73 TOPPS TILES PLC Annual Report and Financial Statements 2005 Topps Tiles Plc Rushworth House Wilmslow Road Handforth Wilmslow Cheshire SK9 3HJ T 01625 446700 F 01625 446800 www.toppstiles.co.uk