Directors Report 1

DIRECTORS' REPORT FOR THE YEAR ENDED 31 MARCH 2003

The directors present their report and financial statements for the year ended 31 March 2003.
Principal activities and review of the business The principal activity of the company continued to be that of building services and maintenance to both the public and private sectors.
In June there was change of ownership in the business, the new management team have brought improvements and synergies which they are confident will improve results going forward.
Results and dividends The results for the year are set out on page 4.
The directors do not recommend the payment of a final dividend (2002: EMI).
Directors The following directors have held office since 1 April 2002:
A D Southon I M Brett R Spear G Spear M Rebbeck S Cavanagh (Appointed 20 June 2002)
(Resigned 20 June 2002) (Resigned 20 June 2002) (Resigned 13 September 2002) (Appointed 1 September 2002) Directors' interests The directors' interests in the shares of the company were as stated below: Ordinary shares of ? 1 each 31 March 2003 1 April 2002 A D Southon I M Brett S Cavanagh
A D Southon and I M Brett are also directors of the parent company. Therefore they are not required to disclose their shareholding in the parent company to this company.
Charitable donations 2003 2002

During the year the company made the following payments: Charitable donations 4,490

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SPEAR AND KING LIMITED
DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2003

Directors' responsibilities Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing those financial statements, the directors are required to: - select suitable accounting policies and then apply them consistently; - make judgements and estimates that are reasonable and prudent; - prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the company and to 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 D Southon Dire to 1.2.1r3

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SPEAR AND KING LIMITED
INDEPENDENT AUDITORS REPORT TO THE SHAREHOLDERS OF SPEAR AND KING LIMITED

We have audited the financial statements of Spear and King Limited on pages 4 to 14 for the year ended 31 March 2003. These financial statements have been prepared under the historical cost convention and the accounting policies set out therein.
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 auditor's 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 the directors and auditors As described in the statement of directors' responsibilities on page 2 the company's directors are responsible for the preparation of the financial statements in accordance with applicable law and United Kingdom Accounting Standards.
Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and United Kingdom Auditing Standards.
We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the Companies Act 1985. We also report to you if, in our opinion, the directors' 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 is not disclosed.
We read the directors' report and consider the implications for our report if we become aware of any apparent misstatements within it.
Basis of audit opinion We conducted our audit in accordance with United Kingdom Auditing Standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the company's circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.

Opinion In our opinion the financial statements give a true and fair view of the state of the company's affairs as at 31 March 2003 and of its loss for the year then ended and have been properly prepared in accordance with the mpanies Act 1985.
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