Annual Report and Accounts
Project3  1/7/05  11:35  Page 1 Annual Report and Accounts
Highlights 1
Board of Directors 2
Chairman’s Statement 4
Chief Executive’s Overview 6
Chief Operating and Financial Officer’s Review 8
Review of the Marketing Sciences Group 10
Review of CML 12
Review of The Real Adventure 14
Review of the EMO Group 16
Review of Nelson Bostock Communications 18
Review of Delaney Lund Knox Warren 20
Report of the Directors 22
Corporate Governance Report 25
Directors’ Remuneration Report 30
Report of the Independent Auditors 36
Consolidated Profit and Loss Account 38
Balance Sheets 39
Consolidated Cash Flow Statement 40
Notes to the Financial Statements 41
Five Year Summary 58
Long Term Incentive Plan 59
Notice of Annual General Meeting 61
Creston Plc
Project3  1/7/05  11:36  Page 2 Gross profit increased to £16.2 million +46
(2004: £11.1 million)
Operating profit increased to £3.7 million +56
(2004: £2.4 million)
Profit before taxation increased to £3.5 million +68
(2004: £2.1 million)
Organic agency profit before interest and tax growth +15
Operating margin increased to 23% +9
(2004: 21%)
Basic earnings per share increased to 10.72 pence +19
(2004: 9.03 pence)
Diluted earnings per share increased to 10.56 pence +25
(2004: 8.47 pence)
Full year dividend per share increased to 2.15 pence +19
(2004: 1.8 pence)
Latest acquisition further diversifies Group’s offer 
and minimises risk
The Group now has brought together a highly skilled 
and well-motivated team of 467 people
Annual Report and Accounts 
Highlights
These record results for Creston’s fourth full year as a
marketing services group demonstrate the strength of
the Group’s strategy. Creston has outperformed the UK
marketing communications sector and exceeded its
operational and financial targets to deliver a fourth
consecutive set of record results.
01
Creston Plc
0
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6,000
7,000
8,000
9,000
10,000
H1 03 H2 03 H1 04 H2 04 H1 05 H2 05
£000
Gross Profit Group PBIT
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70472 Creston RAccs Pt1  1/7/05  11:33  Page 1 02
Board of Directors
04 05 03
01 02
“The Board believes that Creston 
has established a robust business 
model and is confident of the Group’s
future prospects.”
David Marshall, Chairman
Creston Plc
Annual Report and Accounts 2005
70472 Creston RAccs Pt1  1/7/05  11:33  Page 2 Barrie Brien (38)
Chief Operating & Financial Officer
Barrie Brien was appointed to 
the Board on 13 September
2004. He previously worked at
Lowe and Draft Worldwide, part 
of the Interpublic Group, where he
was Chief Financial Officer and
Chief Operations Officer for
Europe, the Middle East and
Africa. Prior to joining Lowe and
Partners in 1998 as the UK Lowe
Finance Director, he spent five
years at Saatchi & Saatchi where
he held senior finance positions in
London and New York having
previously spent four years at the
GGT Group. He sits on the IPA 
Council, the advertising and
communications industry 
trade body. 
Don Elgie (59)
Chief Executive
Don Elgie was appointed Chief
Executive on 29 January 2001
having created the concept of
Creston as a marketing services
group. He has over thirty years’
experience in marketing services,
including developing companies
organically and by mergers and
acquisitions. He was a founder
of the Grandfield Rork Collins
Communications Group, which
was acquired by Saatchi &
Saatchi, where he went on to
become UK and Europe
Operations Director. 
He is a member of the
Nominations Committee 
and the Operating Board.
01 02
03
Non-Executive Directors
David Hangar (59)
David Hanger was appointed to
the Board on 26 March 2001. 
He is a former board director and
Publisher of The Economist
Group. He is a fellow of CAM,
Vice President of the International
Advertising Association, a Board
Director of the Advertising
Standards Board of Finance and a
Freeman of the City of London.
He is also a non-executive
director of Sitel Corporation. 
He is a member of the Audit
Committee, the Nominations
Committee and the Remuneration
Committee and is the senior
independent non-executive
director.
Peter Cunard (59) 
Peter Cunard was appointed 
to the Board on 27 November
2001. He has been in the
communications industry 
for over thirty years. He founded
what was to become one 
of the fastest growing UK
consultancies, Granard
Communications, which was
acquired by Saatchi & Saatchi in
1986. He became Chief
Executive of their enlarged PR
group, The Rowland Company. He
represented the PR industry
during this period when he joined
the Board of the PRCA, the
industry’s trade body. He is a
member of the Audit Committee,
the Nominations Committee and
the Remuneration Committee.
Executive Directors
David Marshall (60)
Chairman
Appointed to the Board 
in 1973, David Marshall became
Non-Executive Chairman in
November 1999 having previously
acted as Chairman from 1984
until 1993. He is Chairman of
London Finance & Investment
Group P.L.C. and Western
Selection P.L.C., which is a
substantial shareholder in the
Company. David Marshall 
has been Chairman of the 
Audit Committee, Nominations
Committee and Remuneration
Committee since 30 April 2000. 
04 03 05
Annual Report and Accounts 2005
Creston Plc
70472 Creston RAccs Pt1  1/7/05  11:33  Page 3 Over the last four years, 
Creston has built a highly
successful business model.
Unashamedly, our strategy
remains unaltered, that of 
growing both organically and
through selective acquisitions 
to become a substantial,
diversified, international 
marketing services group. 
This strategy will continue 
to be achieved by acquiring
companies with a record of 
strong organic growth and
management who are committed 
to further growth as part of the
Creston group of companies. 
The Board believes that an
important part of this strategy 
is to avoid over-concentration 
in any one part of the marketing
services sector, thereby
minimising risk. 
Creston will consider acquisitions
across the marketing services
disciplines including market
research, direct marketing,
customer relationship marketing
and digital marketing. We will 
also consider companies that 
have strong track records within 
more cyclical sectors but only where
they meet our strict acquisitions
criteria, which have been the key to
our success. This allowed us to
acquire DLKW, one of Britain’s
leading advertising agencies. 
Our outstanding performance 
has been recognised in two
independent surveys. The 
‘Hot 100 for 2005’ survey
prepared from Companies 
House data by Real Business
Magazine and in association 
with Lloyds Development Capital
features Creston as the third
fastest growing Main List public
company in the UK and the
fastest growing marketing services
public company. Creston achieved
13th place in 2004 Europe 500
listing, the only independent
pan-European listing of high
growth job creating companies. 
Chairman’s Statement
“I’m delighted to report the
fourth year of record results.
Unashamedly, our strategy
remains unaltered, that of
growing both organically and
through selective acquisitions
to become a substantial,
diversified, international
marketing services group.”
David Marshall, Chairman    04
Creston Plc
Annual Report and Accounts 2005
70472 Creston RAccs Pt1  1/7/05  11:33  Page 4 Our robust business model is very
different to that of the large trade
groups and is the key to Creston’s
ability to continue to outperform 
the market.
Creston’s acquisition criteria are:
Growth companies
Creston buys established
businesses with proven 
growth histories and credible
business plans. 
Committed vendors
Creston will not consider
companies where the vendors
want an immediate exit, although
it is sensitive to life stage issues. 
The Board prefers to harness the
entrepreneurial skills of vendors 
to work together to grow Creston. 
Creston equity – An important
part of retaining vendor loyalty 
Creston equity forms a meaningful
part of the consideration and 
helps bind vendors’ and Creston’s
ambitions together. 
Creston Operating Board
Creston harnesses the
entrepreneurial talents of the
acquired company management
through representation on the
Operating Board. This reviews
overall strategy, performances and
synergy opportunities and reports
to the Creston Plc Board. 
Overview of Financial Results
Turnover grew by 22 per cent. 
to £35.9m (2004: £29.5m).
Operating profit grew by 56 per
cent. to £3.7m (2004: £2.4m),
and profit before tax grew by 68
per cent. to £3.5m (2004: £2.1m).
Operating margins grew by 9 per
cent. to 23 per cent. 
Basic earnings per share were 
10.72 pence (2004: 9.03 pence), 
an increase of 19 per cent., 
and diluted earnings per share
increased by 25 per cent. to
10.56 pence (2004: 8.47 pence).
Detailed information on the
Group’s financial performance 
is set out in the Chief Operating
and Financial Officer’s Review. 
Dividend
In line with the strategy of
pursuing a progressive dividend
policy, the Board recommends 
for payment a final dividend 
for this year of 1.45 pence per
share in addition to the interim 
of 0.7 pence per share paid in
November 2004, making a total
dividend for the year of 2.15
pence per share (2004: 1.80
pence per share). The dividend
will be paid on 1 August 2005
subject to shareholder approval at
the forthcoming AGM of the
Company, to shareholders on the
register at the close of business
on 1 July 2005. 
The Board intends to maintain
its progressive dividend policy,
recognising the importance to
shareholders of dividends and it 
is the intention of the Board to
continue to pay interim dividends
in future, subject to satisfactory
financial performance and
prudent cash management. This
year’s dividend represents a 19
per cent. increase on last year
reflecting this policy. 
Staff
The Group now has 467
employees, compared to 269 
last year, in 10 locations in the
United Kingdom – Bath, Bristol,
London (five), Swindon,
Westerham and Winchester. 
I would like to welcome the staff
of CML who joined the Group in
September 2004 and DLKW who
joined in March of this year. 
I would also like to congratulate
the directors and staff across the
Group who have been responsible
for such excellent results,
particularly when set against 
the market and our competitors. 
In order to maintain the enthusiasm
of the staff, shareholders approved 
a Sharesave Scheme and 
an Enterprise Management 
Incentive Scheme at the 2004 AGM. 
I am very pleased to report that
the take up of the Sharesave
Scheme, which is entirely
voluntary, was very high at 42 
per cent. of all staff – a sign, I
believe, of the commitment and
confidence the staff as a whole
have towards Creston’s future. 
It is intended to make a further
offering under the Sharesave
Scheme to enable our new
employees to participate in 
the future. 
Senior management motivation 
is clearly vital and a Long Term
Incentive Plan, the details of
which are contained in the
Remuneration Report, will be 
put to the AGM for approval. 
Outlook
The Board believes that Creston
has established a robust business
model and is confident of the
Group’s future prospects. I am
confident that the coming year 
will again deliver a further year of
strong growth, both organically
and by acquisition. 
D C Marshall
Chairman
21 June 2005
05
Annual Report and Accounts 2005
Creston Plc
70472 Creston RAccs Pt1  1/7/05  11:33  Page 5 Over the year under review, 
organic performance at the
operating agency level was very
strong with an increase of 15 per
cent. in PBIT on a like for like basis.
This performance has to be reviewed
against the less than 5 per cent.
growth reported for most marketing
service sectors. 
CML, one of Britain’s leading
qualitative research companies was
acquired on 3 September 2004 and
its acquisition further extends our
research capabilities. DLKW, one 
of Britain’s leading advertising and
integrated agency groups, was
acquired on 9 March 2005, and
marked an excellent finish to the
year. Its acquisition was funded 
by a Placing and Open Offer of
shares which raised £9.8 million 
for the Group. 
Creston now has a broad range 
of marketing service businesses 
with a strong balance sheet and
cash flows. 
Insight Division
Creston’s Insight Division had a
strong year delivering a 25 per cent.
increase in PBIT (the British Market
Research Association’s reported 4
per cent. growth in turnover for
2004). This was underpinned by
strong higher margin UK work
compared to international work and
effective cost control. 
Over two thirds of MSL’s business is
generated by repeat business from
its clients such as Tesco, Unilever
and Kimberly Clark. Key new clients
won in the year for MSL include
Drambuie, Boots Healthcare
International and Lafarge. 
MSTS, the sensory research
subsidiary of MSL, had a succession
of new business wins such as
Premier Foods, General Mills and
RHM, plus a growing relationship
with Heinz. 
CML was only acquired in
September 2004 but already
include the new win of Toyota
Europe and being added to the COI
Communications roster. CML’s other
clients include Vodafone, Halifax
and Audi.
Chief Executive’s Overview
“Operating companies produced
a strong performance of 15% 
growth in PBIT on a like for 
like basis.”
Don Elgie, Chief Executive   06
Creston Plc
Annual Report and Accounts 2005
70472 Creston RAccs Pt1  1/7/05  11:33  Page 6 We look forward to CML
contributing to Creston group
performance. 
Marketing 
Communications Division
Creston’s Marketing
Communications division grew 
by 18 per cent. PBIT over the
2004 year. The marketing
communications sector is not
reported on as a single unit, but we
have used the Keynote 2005 report
on Direct Marketing as a guide.
This shows an estimated growth of
5 per cent. in turnover for the
industry in 2004 on 2003. 
TRA had strong organic growth
from clients such as Pfizer and
Cow & Gate and excellent new
business wins. PepsiCo’s Tropicana
was an important win for TRA and
has been further strengthened by
the win of a further Tropicana
brand, PJ Smoothies; together with
HPI, the vehicle tracking subsidiary
of Norwich Union. 
EMO enjoyed increased
expenditure by BMW, George
Wimpey, Bang & Olufsen 
and Honda. 
Whilst only being part of Creston
since 9 March 2005, Dialogue 
and TCR had demonstrated strong
performance, most noticeably for
Dialogue with the integrated win for
the AA, breakdown and roadside
assistance. 
Public Relations Division
Creston acquired NBC in October
2003 and therefore a full year like
for like is not possible, however, on
an annualised basis, the company
has achieved substantial growth.
Canon, Toshiba and NTL remain
important clients. New wins in this
year include Bollinger, The Post
Office Residential Phone Services,
Vonage, the US market leader for
telephony services over broadband
and Warner Home Video.
Advertising Division 
DLKW was acquired on 9 March
2005 and therefore there are only
three weeks figures consolidated
into the Group. 
As well as major clients like HBOS,
Vauxhall, COI Communications,
e-Bay, W H Smith, new wins this
calendar year include the AA,
Diageo’s Bulliet Bourbon, General
Motors Vectra across Europe and
SCA’s Tena brand across Europe. 
The advertising industry showed
real growth in 2004 with an
estimated increase of 5 per cent.
in revenue over 2003 according 
to the Advertising Association and
growth for 2005 is predicted at 4.5
per cent.
Synergy
It has been a successful year for
incremental synergy income and the
synergy opportunities are increasing
as the Group grows.
Examples include Tropicana
research projects, the PR launch 
of the BMW Series 1 and London
Dungeons have appointed Nelson
Bostock on a retained basis for PR. 
In total, thirteen clients now work
with more than one agency within
the Group, including: Campbells,
Tropicana, Premier Foods, Nutricia,
London Dungeons, Bacardi, Arla
Foods, Scottish Courage, COI
Communications, Danone, Pfizer,
Unilever, BMW.
We are committed to increasing
these synergy opportunities, as 
they represent a key area of future
organic growth. To this end, we 
are near to employing a Synergy
New Business Director to 
leverage further the cross selling
opportunities across the Group. 
Forward Plans 
We have built a strong domestic
diversified marketing services group
in four years and aim to continue to
add in the UK with complementary
business in healthcare, digital and
other growth niche marketing
service areas. 
International 
It is our stated intention to become
an international marketing group in
order to better serve clients. We
hope to make progress in this goal
during the new financial year,
particularly in the US, which offers
a large and relatively buoyant
economy and further growth
opportunities for the Group. 
Outlook
I am pleased to report that the
current financial year has started
well with performance ahead of 
the Board’s expectations. Business
prospects are strong reflecting the
aforementioned recent client wins,
such as the AA, Diageo, SCA,
General Motors Vectra, Tropicana
brands and this new business
record should help continue the
Group’s impressive organic growth 
into 2006. 
Don Elgie 
Chief Executive 
21 June 2005 
07
Insight Division 
Marketing Sciences Ltd (“MSL”)
qualitative and quantitative 
market research
MSTS Ltd (“MSTS”)
sensory and consumer research 
CML Research Ltd (“CML”) 
qualitative market research 
Marketing Communications Division
The Real Adventure Marketing
Communications Ltd (“TRA”)
direct marketing and customer
relationship marketing
EMO Group Ltd (“EMO Group”)
marketing communications 
and channel marketing
Dialogue DLKW Ltd (“Dialogue”) 
the integrated communication 
agency of DLKW
The Composing Room Ltd (“TCR”)
the production and pre-press 
agency of DLKW
Public Relations Division 
Nelson Bostock 
Communications Ltd (“NBC”) 
public relations
Advertising Division 
Delaney Lund Knox Warren 
& Partners Ltd (“DLKW”) 
advertising and integrated
communications
Review of Operations The Group’s range of diversified marketing 
services companies currently comprises:
Annual Report and Accounts 2005
Creston Plc
70472 Creston RAccs Pt1  1/7/05  11:33  Page 7 The Group has continued to 
exceed its financial and operational
objectives of driving acquisitive 
and organic growth, strengthening
its Balance Sheet and delivering
significant growth in EPS. All this
has been achieved, while improving
already above market operating
margins and completing the
acquisitions of CML in September
2004 and DLKW in March 2005.
Operating Profit and Margin 
Gross profit increased by 46 per
cent. over last year reflecting the
acquisition of CML and DLKW, a
full year of results from NBC and
strong organic growth across the
Group. Due to the acquisitions, plus
a high level of new business wins
and tight cost control, operating
profits increased by 56 per cent. 
to £3.7 million (2004: £2.4
million) and operating margins to
23 per cent. from 21 per cent. 
The inclusion of CML and DLKW
has raised gross margins to 45 per
cent. from 38 per cent. Total staff
numbers increased from 269 to
467 on a full time equivalent 
basis. Key performance indicators
are regularly reviewed across the
Group and efficiency continued to
improve indicated by a rise in gross
profit and operating profit per head
of 12 per cent. and 20 per cent.
respectively. 
Organic Growth
At both the operating company 
and Group level, Creston has
demonstrated outstanding organic
growth. Turnover, gross profit and
PBIT for the operating companies’
increased by 2, 6 and 15 per cent.
respectively. This result shows a very
high profit conversion (80 per cent.)
on the organic gross profit and the
continued move to higher value
added services, as demonstrated by
high gross profit growth compared to
small turnover growth.
In 2005 Creston continued 
to invest in its head office
infrastructure to support the future
growth of the Group. Even when
including this investment, the
Creston group managed organic 
(or like for like) growth in PBIT 
of 8 per cent.
Chief Operating and Financial Officer’s Review
“The Group achieved another
excellent set of financial 
results and EPS growth, while
continuing to strengthen its
Balance Sheet” 
Barrie Brien, Chief Operating and Financial Officer    08
Creston Plc
Annual Report and Accounts 2005
70472 Creston RAccs Pt1  1/7/05  11:33  Page 8 Interest
The net interest charge was £0.2
million (2004: £0.2 million)
reflecting the increased term loan
offset by improved cash balances
and treasury management
throughout the Group. Interest 
was well covered by profit before
interest and tax at 21 times 
(2004: 10 times). 
Creston introduced an interest rate
hedging strategy on approximately
half of its new medium term loan
and accordingly entered into an
interest rate collar provided by
Barclays Bank. 
Effective Tax Rate 
The Group’s effective underlying tax
rate has remained at the 30 per
cent. standard rate. In 2005, the
Group’s results benefited from
favourable tax treatments in certain
areas, for example, a tax benefit on
the goodwill of CML as it was a
trade and asset purchase, which
reduced the tax charge by £0.2
million to give a net effective tax
rate of 25 per cent.
Earnings per Share 
Basic earnings per share rose 19
per cent. to 10.72 pence (2004:
9.03 pence) and diluted earnings
per share rose 25 per cent. to
10.56 pence (2004: 8.47 pence).
This is the fourth successive year of
significant growth in these key
financial ratios reflecting the
Group’s success in delivering
enhanced value and returns to
shareholders. 
Acquisitions
On 3 September 2004, Creston
bought CML for an initial
investment of £5.1 million,
including costs and maximum
further deferred consideration 
of £2.3 million. On 9 March 
2005, Creston bought Face
Communications Ltd (main 
trading name DLKW & Partners) 
for an initial investment of £19.9
million, including costs and
maximum further deferred
consideration of £19.3 million. 
The Group will continue to pursue
acquisition targets that fit in with
its stated strategy. We are currently
assessing a number of other
opportunities, with particular focus
on expanding into the USA and
Europe. It is our policy that all
future acquisitions are made on a
financially prudent basis and are
earnings enhancing. 
Capital Expenditure
The total capital expenditure for
2005 was £0.6 million (2004:
£0.4 million). The main categories
of investment being leasehold
refurbishment, computer systems,
software and some motor cars. At
the year end the Group had a
commitment to complete
refurbishment work on one of its
London offices at an estimated cost
of £0.4 million.
Cash Flow and Net Debt
The cash generated by operating
profit continues to be very strong.
Net cash inflow from operating
activities rose to £4.9 million
(2004: £3.1 million), and the cash
conversion rate from operating
profit was 134 per cent. (2004:
130 per cent.). 
The high operational cash flow was
used to finance transaction costs,
tax and deferred consideration. 
A key cash movement in the year
was the net cash outflow on the
DLKW and CML acquisitions of
£16.2 million, which was funded
by the proceeds from share issues
raising £10.9 million net of costs
and net new bank loans of £5.1
million. These factors resulted in
the Group having net debt of £3.3
million at 31 March 2005 (2004:
net funds of £0.4 million). At the
time of the DLKW acquisition,
Creston agreed with Barclays Bank
a new Senior Debt structure. This
comprises an £8.3 million medium
term loan (fully drawn) and a £5
million revolving credit facility
(which remains undrawn). It is
intended to utilise the revolving
credit facility to manage working
capital requirements. 
Balance Sheet and Gearing 
Shareholders’ funds rose by
£27.1 million in the year to
£52.3 million. Earnings contributed
£2.0 million to their growth and
new share capital issued was
£18.1 million (including the
Placing and Open Offer which
raised £9.8 million net of costs 
in February 2005 and the
acquisitions of DLKW and CML). 
In addition, £11.0 million of
deferred consideration is included
as shares to be issued, an increase
of £7.0 million in the year. 
The amount of the deferred
consideration (settled by a
combination of cash, loan notes
and shares) is amended in each
year to the current expected amount
payable. As a result, Creston’s
gearing (net debt over equity) is 6
per cent. and the net debt for the
Group at 31 March 2005 was
£3.3 million compared to net 
funds of £0.4 million at 31 March
2004. After including deferred
consideration and loan notes of
£9.4 million (2004: £2.4 million)
the Group’s total debt has increased
to £12.7 million (2004: £2.0
million). Based on total debt, the
Group’s gearing has increased to 24
per cent. from 8 per cent. reflecting
the increased indebtedness arising
principally from the acquisition 
of DLKW.
The Group will continue to 
maintain its policy of managing 
and controlling the net debt and
gearing to prudent levels in order to
preserve its financial stability, whilst
seeking to use low interest rates to
enhance shareholder returns. 
Barrie Brien 
Chief Operating and 
Financial Officer
21 June 2005 
09
Annual Report and Accounts 2005
Creston Plc
70472 Creston RAccs Pt1  1/7/05  11:33  Page 9 Marketing Sciences Limited (MSL)
is a full service international
market research agency, based in
Winchester, Hampshire. 
Clients are predominantly blue 
chip international companies with
several having been retained over
many years. 
The client base operates across a
broad range of business and
product sectors, with particular
emphasis upon fast-moving
consumer goods (“FMCG”),
durables, financial, retail, 
social and IT.
An extensive nationwide 
field force of experienced
interviewers is managed from
MSL’s Head Office. 
An in-house team of multi-media
designers assist in the creation of
leading edge approaches to
research solutions, including on-
line studies, virtual shopping 
and other computer aided
interviewing methods. 
In addition, a 40-station 
telephone interviewing unit 
can operate seven days a week,
covering both business and
consumer audiences. 
MSL also operates Panelwizard, 
a panel-based omnibus service,
which can be accessed online or 
by telephone.
Services include both qualitative
and quantitative approaches, 
with all stages being handled 
by the company’s own resources. 
A list of specialist services 
is provided on the right.
Keith Bates (Managing Director),
supported by his three fellow
directors, maintains a policy of
providing high quality research 
to UK and international clients. 
The needs of the latter are met by
The Research Alliance, a
worldwide network of medium-
sized agencies founded by MSL 
in 1992.
Recent growth has stemmed from
increased spend by existing clients
as well as from around 15 new
client companies across a range of
business sectors.
Services
Packmaster 
International quantitative pack testing
Pricemaster
Pricing research techniques
Brandmaster
Price-branding relationship
Spacemaster
Advanced fixtures/layout modelling 
for sales effectiveness
CADI
Interactive design solution 
development
Promomaster
Below the line activity 
effectiveness evaluation
Strategist
Market studies with advanced modelling
Countdown
Early stage volume estimation
Catmaster
Category definition and segmentation
Storemaster
In-store observation and interviewing
Visualiser
Virtual store testing
MSTS 
In addition to MSL, there is a
specialist subsidiary, MSTS, based
in Westerham, Kent.
MSTS offers clients a 
complete product development
service, combining sensory 
profiling and consumer testing.
Comprehensive statistical analysis 
of the resulting data provides
clients with clear guidance for
both the development of new
products and the improvement of
existing products. MSTS has its
own in-house facility for sensory
testing, using the skills of a highly
trained panel of 100 experts.
MSTS, under its Managing Director
Jerry Thomas, intends to maintain
the steady growth achieved in
recent years by adding further to
the impressive list of blue chip
clients. Recent new clients include
companies such as Danone and
Burger King.
10 Rachel Christofoli, Keith Bates, Jane Ruding, Sheila Sweeney
Insight Division
Marketing Sciences Group
Creston Plc
Annual Report and Accounts 2005
“Recent growth has stemmed from
increased spend by existing clients, 
as well as from over 15 new clients
across a range of sectors”
70472 Creston RAccs Pt1  1/7/05  11:33  Page 10 “Clients are predominately blue-chip 
international Companies”
MSL
MSTS
* The Nestlé name and logo is reproduced with the kind permission of Société des Produits Nestlé §
* 
11
Annual Report and Accounts 2005
Creston Plc
70472 Creston RAccs Pt1  1/7/05  11:33  Page 11 CML is a specialist qualitative
market research agency based 
in Central London. It was founded
in 1988 and over the years has
grown to become one of the 
UK’s leading qualitative agencies.
It is run by Jeremy Martin (who
founded the company) and Grant
Litchfield (who joined from
advertising in 2000).
The agency specialises in
communications development,
new product/concept development
and brand development research.
Projects are undertaken both in
the UK and internationally.
CML’s point of difference in the
market is that it only employs
senior researchers (a team of nine)
all at Director or Associate
Director level. These experienced
senior staff allow CML to turn
around projects extremely quickly
for clients while maintaining the
highest quality in analysis and
solution provision.
CML works for an impressive
stable of blue-chip clients and
household names, with high levels
of repeat business. Research
covers a wide range of sectors
from food to utilities to social
research. Core clients include
Vodafone, COI Communications,
VW/Audi, Clarks, British Gas 
and Muller.
Over the past year the company
has undertaken numerous repeat
business projects for existing
clients as well as achieving some
significant new business wins
including a place on the COI
Communications roster. 
COI Communications is the
communication agency of HM
government and the biggest 
single research buyer in the UK.
12 Jeremy Martin, Grant Litchfield
Insight Division
CML
Creston Plc
Annual Report and Accounts 2005
“CML’s point of difference in the 
market is that it only employs senior
researchers (a team of nine) all at
Director or Associate Director level”
70472 Creston RAccs Pt1  1/7/05  11:33  Page 12 “CML works for an impressive stable of blue-chip
clients and household names, with high levels of
repeat business”
13
Annual Report and Accounts 2005
Creston Plc
70472 Creston RAccs Pt1  1/7/05  11:33  Page 13 As a Direct Communications
agency, TRA is only too aware
of the importance and power
of identifying and leveraging
Consumer Insights. A good
insight (delivered in an
impactful way) not only cuts
through but ‘connects’ with
an individual, unlocking their
value as a customer. 
The Consumer Insight upon
which TRA is founded is 
that no one is happy to 
invest in something without
either the promise of a return
or any tangible measure
against which to judge the
success (or otherwise) of 
the investment. 
Defining the key performance
indicators (which may be as
diverse as financial return,
redemption, web traffic,
purchase/repeat purchase 
or emotional shifts) then
subsequently analysing and
evaluating the results, plays
as important a role within the
overall process as does the
development of the Consumer
Insight and Idea. 
This holistic approach is
reflected in the agency’s
raison d’être: to invest Client
budgets as efficiently and
effectively as possible in
order to increase Customer
Value in the short, medium or
long term. Most important is
the fact that it’s an approach
that has attracted a blue-chip
client base across a wide
range of markets including
FMCG, financial services,
leisure, pharmaceuticals 
and the motor industry.
Servicing this Return on
Investment (“ROI”) focused
proposition means that TRA
has an unusual make-up. 
Strong Creative and Planning
Departments are balanced
and complemented by strong
teams in IT and Analysis/
Modelling. Importantly, this
balance of skill-sets also
means that the agency is 
well placed to identify and
exploit opportunities in the
area of the web and new
technologies, thereby,
ensuring that clients 
are well placed to take
advantage of new develop-
ments in arguably the fastest
developing and most dynamic
of channels.
Increasingly, as clients
begin to adopt a media
neutral planning approach in
order to develop an integrated
communications strategy 
TRA finds itself working
alongside other strategic
communications partners –
advertising agencies, PR
companies, media specialists
– in Brand Teams. One of the
results of this is that 
the agency has reinforced 
its position with existing
clients and has benefited
from significant incremental
business.
Whilst the previous 12
months have seen significant
wins from existing clients,
TRA has also won business
from new clients: PepsiCo
(Tropicana and Copella) and
Norwich Union (HPI – vehicle
history check). Over the next
12 months the objective is to
consolidate and capitalise,
using outstanding ROI case
studies from clients, to grow
the business to the next stage
in its development.
14 Jonathan Legge, Ben Cook, Matt Hardy, Graham Monk
Marketing Communications Division
The Real Adventure
Creston Plc
Annual Report and Accounts 2005
“To invest client budgets as efficiently and
effectively as possible in order to increase
Customer Value in the short, medium 
or long term”
70472 Creston RAccs Pt1  1/7/05  11:33  Page 14 15
Annual Report and Accounts 2005
Creston Plc
“The agency is based on the principles of ‘accountable
marketing’ where the return on marketing investment
can be clearly measured and demonstrated”
70472 Creston RAccs Pt1  1/7/05  11:33  Page 15 EMO is a marketing communi-
cations group specialising in
channel marketing. The company
grew during the late 1980s and
early 1990s pursuing a doctrine 
of integrated marketing communi-
cations, ensuring seamless
presentation of major brands
through a variety of different
marketing communications
channels. Its Managing Director,
Glenn Orr, was one of the 
original founders. 
The Group now includes two
subsidiary companies, CTC and Sky
Rock Communications, based in
shared premises in Bristol. CTC is 
a brand positioning (advertising)
agency, concentrating on brand
building activities for medium 
sized companies in the UK market. 
Sky Rock Communications is a
new media, creative and technical
consultancy working in all areas 
of new electronic customer
communication.
There are presently 69 employees
across the three companies, with
46 based in the head office at
Highworth just outside Swindon,
and 23 employed between CTC
and Sky Rock in Bristol. 
Whilst each company has
established a slightly different
market position, there are many
complementary and overlapping
areas. Major client companies
continue to consolidate and
rationalise their brand comm-
unications, requiring greater
consistency and integration across
all aspects of customer contact. 
EMO, CTC and Sky Rock have
key roles to play in assisting their
clients’ objectives, particularly
throughout the sales channels
used by their clients’ customers. 
Key clients include BMW (GB)
Limited for whom EMO manages
all the UK dealer and sales
channel marketing programmes. 
These include work for both the
MINI brand and Rolls-Royce, 
and cover all areas of automotive
marketing including new cars,
used cars, after sales parts and
finance. EMO has also enjoyed
substantial growth in its 
Bang & Olufsen business for
international markets and now
runs all marketing communication
campaigns for two George Wimpey
companies in the South-West and
South Wales.
CTC works extensively for Andreas
Stihl Limited, the leading
professional and domestic
gardening and building equipment
company. Stihl, the inventor of the
chain saw, embarked upon an
ambitious strategy to both expand
brand awareness and increase
sales over the next five years. CTC
has played a crucial role in
helping Stihl to beat its sales
targets in the UK in each of the
last three financial years. CTC also
works extensively for Honda Motor
Europe-UK in corporate sales and
after sales marketing. 
Sky Rock Communications works
closely with both its sister
companies, often providing the
creative and technical support to
electronic communications
programmes on behalf of both
EMO and CTC. In addition, Sky
Rock has great expertise in the
media and music industries,
having successfully built and
launched the Robbie Williams
website in addition to supporting
leading brands such as Zoggs. 
EMO has ambitious plans to use
its channel-based expertise in
other key market sectors that are
included to pursue the integrated
marketing communications ethos
in all customer facing materials. 
16 Glenn Orr, Martin Newnham, Claire Mabbett, Stuart Slocombe
Marketing Communications Division
The EMO Group
Creston Plc
Annual Report and Accounts 2005
“Major client companies continue to consolidate
and rationalise their brand communications,
requiring greater consistency and integration
across all aspects of customer contact”
70472 Creston RAccs Pt1  1/7/05  11:34  Page 16 17
Annual Report and Accounts 2005
Creston Plc
“EMO, CTC and Sky Rock have a key role to play 
in assisting their clients’ objectives, particularly
throughout the sales channels used by their 
clients’ customers”
70472 Creston RAccs Pt1  1/7/05  11:34  Page 17 Nelson Bostock Communications
(NBC) is one of the UK's leading
PR agencies, with a headcount of
55 and a portfolio of clients
ranging from brand-leading
multinationals to innovative 
start-ups. 
The agency was established by
Martin Bostock and Roger Nelson
in 1987 and has grown to rank
among the top 20 agencies in PR
Week’s Top 150 league table. In
the technology sector, NBC grew
significantly last year - to seize
the number five position in the
magazine’s IT agency league table. 
Based in Bayswater, London, the
agency runs award-winning
campaigns for consumer and B2B
clients. In 2004, NBC won six
PRCA Frontline awards - more
than any other agency - for its
work with Canon, Swatch,
Freeview and Napster. 
NBC’s pan-European brand
campaign for Canon was also 
a finalist in the UK’s National
Business Awards sponsored 
by Orange.
Plaudits also come from within the
agency: NBC was ranked second in
the Holmes Report’s ‘best agencies
to work for’ league table. 
The agency has an unusually 
strong record in maintaining long
relationships with major clients,
having been retained by Bacardi-
Martini for 6 years, NTL for 10
years and Toshiba for 17 years.
Sectors specialisations:
• Consumer technology
• Lifestyle brands
• Food and drink
• Digital communications (fixed
and wireless) 
• CRM and ecommerce 
• IT and office automation 
• Broadcast 
Among services offered are:
Strategic consultancy 
• Strategic planning 
and messaging
• Issues analysis and 
media tracking
• Media training; crisis 
and issues management
• Media monitoring 
and evaluation
Tactical delivery of media relations
and marcoms programmes 
• Media relations 
• Analyst relations
• Media promotions, 
competitions and advertorials 
• Copywriting
• Product review programmes
Some 80 per cent. of the agency’s
work is undertaken on a continuing,
retained consultancy basis, with 
the remaining work being
commissioned by new and 
existing clients on a project basis. 
While most of the agency’s work is
UK-based, NBC operates on an
international basis through a
network of affiliate agencies
covering all key markets in Western
and Central Europe, the US and
Asia. Recent international
assignments have included
corporate, B2B and consumer
projects for British, American and
global brands. 
Over the past year, the agency has
grown through a combination of
new business and organic growth.
Major clients include Canon, NEC,
NTL and Toshiba for whom NBC is
working widened remits. 
New clients acquired in the past
year include Warner Home Video,
Bollinger, the Post Office and
Vonage, America’s leading provider
of voice-over–internet telephony.  
Group synergies continue to work
in both directions. NBC has won
work through client introductions
by other Creston agencies,
including continuing business
from The London Dungeon and
the launch of the BMW 1 Series.
Some NBC clients have
commissioned work from Creston
companies. NBC is pleased to
have been able to help other
Creston agencies add PR content
to their presentations for existing
clients and new business pitches.
18 Roger Nelson, Paul Hildrew, Martin Bostock, Philippe Bobroff
PR Division
Nelson Bostock Communications
Creston Plc
Annual Report and Accounts 2005
“NBC grew significantly last year – to
seize the number five position in the PR
Week IT agency league table”
70472 Creston RAccs Pt1  1/7/05  11:34  Page 18 19
Annual Report and Accounts 2005
Creston Plc
“The agency has an unusually strong record in
maintaining long relationships with major clients”
70472 Creston RAccs Pt1  1/7/05  11:34  Page 19 DLKW is one of the UK’s
fastest growing advertising and
communications agencies,
handling a wide variety of blue
chip clients. Through its
Dialogue agency it handles
direct marketing and digital
communications as well as
sales promotion.
Founded in 2000 DLKW has
doubled in size in the past
three years, consistently
heading the industry’s New
Business leagues. 
Based in Covent Garden in
London, DLKW now employs
around 180 people across
three companies; advertising
agency, DLKW & Partners; a
Digital, Direct and Promotional
Marketing agency, Dialogue
DLKW and a pre press print
production company, The
Composing Room. 
The Group also holds a 
stake in a media planning 
and buying company, 
BJK&E Media.
The business is based on the
philosophy of being creative,
collaborative and commercial,
fuelled by the founders’ belief
that only by helping clients’
businesses thrive would their
own prosper. 
This philosophy has proved
attractive to large blue chip
clients and the business’
success has been built on
organic growth powered by a
series of powerful, household
brands. These include Halifax,
General Motors (Vauxhall and
Opel), Burger King, the AA,
Esso, eBay, WH Smith,
Batchelors, Diageo and COI
Communications. 
Such has been the consistency
of this organic growth that
DLKW is the only agency 
to feature in Campaign
magazine’s Business Growth
Top 20 in each of the past five
years – every year it has been
in existence.
In the past year the agency has
concentrated on not only
building core advertising
business with wins from clients
like WH Smith, RAF and the
AA but also greatly expanding
its capabilities in direct, 
digital and promotional
communications. This has seen
the Dialogue DLKW division
grow from 15 to 35 people in
the past twelve months. DLKW
and Dialogue DLKW now work
together on seven of the top
eight group clients.
In addition, DLKW has also
started to make significant
inroads into handling European
business with appointments by
Exxon Mobil, Opel and SCA to
create and distribute pan
European communications.
These developments have seen
significant top line income
growth with a strengthening 
of profit margin.
During DLKW’s first few
months as a member of
Creston, growth has progressed
very strongly with
appointments by the AA,
Diageo, Opel and SCA. In
addition, the process of
marketing the agency through
its specialised department
continues and the pipeline of
credentials and pitches
remains encouragingly full.
“DLKW has doubled in size in the past
three years, consistently heading the
industry’s New Business leagues”
20 Greg Delaney, Tom Knox, Mark Lund, Malcolm Green, Gary Betts, Richard Warren
Advertising Division
Delaney Lund Knox Warren
Creston Plc
Annual Report and Accounts 2005
70472 Creston RAccs Pt1  1/7/05  11:34  Page 20 21
Annual Report and Accounts 2005
Creston Plc
70472 Creston RAccs Pt1  1/7/05  11:34  Page 21 The Directors present their report together with the audited financial statements
for the year ended 31 March 2005.
Principal Activity
The Group is principally engaged in marketing services, as described in the
Chairman’s Statement, the Chief Executive’s Overview and the Chief Operating
and Financial Officer’s Review.
Results and Dividends
The Group made a profit for the year after taxation of £2,640,000 (2004:
£1,449,000). An interim dividend of £176,000, equal to 0.7 pence per share
(2004: 0.6 pence per share), was paid on 5 January 2005. The Directors
recommend the payment of a final dividend of £508,000, which is equal to
1.45 pence per share (2004: 1.2 pence per share) giving a total for the year of
2.15 pence per share (2004: 1.8 pence per share).
Share Capital
The Company issued 12,865,780 new Ordinary Shares during the year (2004:
10,849,774). Details are given in note 22.
Directors and their Interests
The Company’s Directors are detailed on pages 2 and 3 together with brief
biographies.
Mr P J Cunard retires in accordance with the Articles of Association and being
eligible offers himself for re-election. Mr B C Brien having been appointed since
the last AGM and being eligible offers himself for election. The Board has
considered paragraph A7.2 of the Combined Code 2003 and believes that the
members of the Board continue to be effective and to demonstrate commitment
to their roles, the Board and the Group. They therefore have no hesitation in
recommending both of the above Directors for re-election and election at the
forthcoming Annual General Meeting.
The beneficial interests of the Directors and their families on 1 April 2004 and 31
March 2005 in the share capital of the Company and in the Warrants issued
pursuant to the Circular of 4 January 2001 were as follows:
Since 1 April 2005 and the date of this report there have been no changes in the
Directors’ shareholdings. Details of the Directors’ interests in transactions are set
out in note 30. Mr D C Marshall is a director of Western Selection P.L.C which
holds 2,873,998 Ordinary Shares. Mr B C Brien held no shares in the Company
on the date of his appointment.
The Company maintains directors’ and officers’ liability insurance.
Ordinary Shares Warrants
2005 2004 2005 2004
Mr D C Marshall – 3,250 – 520
Mr D H Elgie 997,801 867,174 – 48,955
Mr B C Brien (appointed 9 September 2004) 11,625 – – –
Mr P J Cunard 15,000 15,000 – –
Mr D J Hanger 24,800 22,045 – –
Annual Report and Accounts 2005
22
Creston Plc
Report of the Directors 
70472 Creston RAccs Pt2  1/7/05  11:42  Page 22 Annual Report and Accounts 2005
23
Creston Plc
Substantial Interests
At 20 June 2005, the Company was aware of the following interests, which
represented 3 per cent. or more of the Company’s ordinary issued share capital:
Special Business at the Annual General Meeting
Shareholders will note from the Notice of Annual General Meeting on pages 61
and 62 that they are asked to consider and, if thought fit, pass a number of
resolutions as special business. Three of these resolutions are routine business at
the annual general meetings of a number of public companies and relate to:
 the renewal of the authority for the directors to allot relevant securities
(Resolution 8);
 the renewal of the powers for the directors to allot equity securities as if the
statutory pre-emption rights did not apply (Resolution 9); and
 the authority to make market purchases of the Company’s own shares
(Resolution 10).
A resolution authorising the Company to make market purchases of its own
shares has not been proposed at the Company’s annual general meeting for some
years. However, your Board has decided that the Company should have the
authority to make such purchases of its own shares to enable the Company to
efficiently manage its capital base. The resolution follows the requirements of
section 166 of the Companies Act 1985 and the rules of the UK Listing Authority.
Recent legislation has enabled companies to hold shares purchased from the
market in treasury with a view to possible re-issue at a future date as an
alternative to cancellation. If the Company were to purchase any of its own shares
under the authority conferred by this resolution it would consider holding them as
treasury shares provided that the number of treasury shares does not at any time
exceed 10 per cent. of the Company’s issued share capital. The Directors will only
purchase the Company’s shares in the market, if they believe that it is in the best
interests of its shareholders.
Following a review of remuneration and corporate governance two further
resolutions have been proposed as follows:
1 to approve a long term incentive plan. Further details of the plan are set out in
the summary of the Creston plc Long Term Incentive Plan on pages 59 to 60
and to authorise the Directors to establish an employee benefit trust
(Resolution 7).
2 to adopt new Articles of Association (Resolution 11). The current Articles of
Association of the Company were adopted on 28 June 1993 and the board
proposes to adopt more up-to-date Articles of Association. The principal
differences between the current Articles of Association and the new Articles of
Association that are proposed to be adopted pursuant to this resolution are:
(i) to expressly authorise the Company to hold treasury shares;
(ii) to increase the maximum number of Directors from 7 to 16; and
(iii) to increase the maximum aggregate amount of non-executive directors’
remuneration from £50,000 per annum to £200,000 per annum.
Number of Shares Percentage of Capital
Western Selection P.L.C. 2,873,998 8.2
Rathbone Investment Management 1,709,235 4.9
BriTel Fund Trustees Limited 1,635,312 4.7
Framlington Investment Management 1,225,067 3.5
Royal Mail Pension Trustees Limited 1,111,532 3.2
70472 Creston RAccs Pt2  1/7/05  11:42  Page 23 The new Articles of Association also take into account recent statutory
changes, including giving the Company the ability to communicate with
shareholders by electronic communications in the future should it choose to
do so and to give the Company the power to grant the Directors indemnities in
respect of certain liabilities to third parties.
Supplier Payment Policy
It is the Group’s intention to settle supplier invoices in line within their terms of
business and in any case within a period of 60 days of their receipt. The number
of creditor days outstanding at 31 March 2005 was 22 days (2004: 29 days).
Charitable Contributions
Charitable contributions for the year amounted to £8,608 (2004: £4,868).
Directors’ Responsibilities
United Kingdom 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 Group and the Company at the end of the financial year and of the
profit or loss of the Group for that period. In preparing those accounts, the
Directors are required to:
 select suitable accounting policies and then apply them consistently;
 make judgements and estimates that are reasonable and prudent; and
 state whether applicable accounting standards have been followed, subject to
any material departures disclosed and explained in the financial statements.
The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
Company and the Group to enable them to ensure the accounts comply with the
Companies Act 1985. They have a general responsibility for taking such steps as
are reasonably open to them to safeguard the assets of the Group and the
Company and to prevent and detect fraud and other irregularities.
International Financial Reporting Standards (“IFRS”)
In accordance with EU legislation and the continuing obligations of the London
Stock Exchange, the Group is required to prepare all future public financial
information using IFRS rather than the current UK accounting standards. This will
affect the presentation of the financial results as the format and layout of the
financial statements will significantly change. In addition, it will affect the reported
profitability of the Group.
At this stage the Group has completed an evaluation of the areas affected and
has agreed these with the Group’s external auditors. A preliminary restatement of
prior year figures has been produced and will be audited by the external auditors
prior to its publication as part of the Group’s 2006 interim results.
Auditors
On 1 July 2004, the Grant Thornton partnership converted to a limited liability
partnership called Grant Thornton UK LLP. Under section 26(5) of the Companies
Act 1989, the directors consented to extend the audit appointment to Grant
Thornton UK LLP from 1 July 2004. Grant Thornton UK LLP offer themselves as
auditors in accordance with section 385 of the Companies Act 1985.
By Order of the Board
City Group P.L.C.
Secretary
21 June 2005
Annual Report and Accounts 2005
24
Creston Plc
Report of the Directors continued
70472 Creston RAccs Pt2  1/7/05  11:42  Page 24 The Board is committed to high standards of corporate governance and supports
the Combined Code on Corporate Governance issued by the Financial Services
Authority (“the Combined Code”). The Board sets out its report below on how the
Group has applied the principles and complied with the Combined Code during
the year ended 31 March 2005.
Compliance Statement
Throughout the year ended 31 March 2005 the Group has complied with all the
provisions of Section 1 of the Combined Code.
The Board of Directors
During the year the Board comprised a Chairman, who is Non-Executive, two
Executive Directors (albeit that Mr T Alderson resigned on 15 September 2004
and Mr B C Brien was appointed on 9 September 2004) and two Non-Executive
Directors. All the Non-Executive Directors are considered by the Board to be
independent. Mr D J Hanger is the senior independent Non-Executive Director.
Notwithstanding the fact that the Chairman has been a Director for more than 10
years, the Board consider his involvement to start from January 2001 when
Creston re-listed as a marketing services company. Through the Chairman’s
directorship of Western Selection P.L.C., a significant shareholder of Creston, the
Chairman has an interest in Creston similar to that of a shareholder. Therefore his
interests are aligned with those of other shareholders and are viewed by the
Board as allowing the Chairman to act independently of management.
The Board met on six occasions during the year following a formal agenda. It met
a further two times for ad-hoc reasons i.e. acquisitions and allotment of shares,
(see below for attendance). The Board is provided with monthly management
account packs and other relevant information in a timely manner and in a form
and quality that it considers appropriate to enable it to discharge its duties.
The Board is responsible for the leadership of the Company and the Group, and
in discharging that responsibility it makes decisions objectively and in the best
interests of the Group. The Board sets the vision, values and standards for the
Group. The Board delegates day-to-day responsibility to the executive
management. It determines their duties and reviews performance against agreed
budgets and against the Group’s objectives, values and standards, including
employment, environmental and health and safety policies as set out in the Group
policies and procedures.
The balance of the Board, together with the advice sought from the Operating
Board and the Company’s external advisors, ensures that no one individual has
unfettered powers of decision.
The separation of the Chairman’s role from the discharging of executive
responsibilities has been clearly defined throughout the year. The Chairman is
responsible for the effective performance of the Board through a schedule of
matters reserved for approval by the Board (comprising of issues considered most
significant to the Group in terms of financial impact and risk) and control of the
Board agenda. The Chairman conducts Board and shareholder meetings and
ensures that all Directors are properly briefed. The Chief Executive, supported by
the Chief Operating and Financial Officer, is responsible to the Board for running
the business and implementing Group strategy.
No. of
meetings
in year DCM DHE BCB TBA DJH PJC
Board (scheduled) 6663366
Board (ad hoc) 2 – 2 2 – 2 1
Audit Committee 2 2 – – – 2 2
Remuneration Committee 5 5 – – – 5 5
Nominations Committee 2 2 2 – – 2 2
Annual Report and Accounts 2005
25
Creston Plc
Corporate Governance Report
70472 Creston RAccs Pt2  1/7/05  11:42  Page 25 All Directors have access to advice from the Company Secretary and
independent professionals at the Company’s expense. Training is available for
Directors as necessary. New Directors will receive an induction programme
and all the Directors are encouraged to continue professional education
programmes. The Company has arranged appropriate insurance cover in
respect of legal action against its directors.
Committee meetings are held independently of Board meetings and invitations
to attend are extended by the Committee Chairman to other Directors, the
Group’s advisors and management as appropriate.
A representative of the Company Secretary attends all Board meetings to
record proceedings and is available to advise on any corporate governance
issues that may arise. The Company Secretary assists the Chairman in his
duties of ensuring efficient communication between all Directors, the
Committees and senior management as well as the professional development
of Directors. The terms of reference of the Audit Committee, the Nominations
Committee and the Remuneration Committee including their roles and the
authority delegated to it by the Board are available on request and on the
investor relations section of the Group’s website (www.creston.com).
Audit Committee
The Audit Committee comprised Mr D C Marshall (Chairman), Mr D J Hanger
and Mr P J Cunard throughout the year ended 31 March 2005. The auditors
have direct access to the Audit Committee and are invited to attend the two
formal meetings to review the interim and full-year results. The Audit
Committee also meets to address specific issues as appropriate. It deals with
the annual accounts and important audit, accounting and taxation matters as
well as compliance with legal requirements and it monitors the adequacy of
the Group’s internal controls and accounting policies. The Board consider the
members of the Audit Committee have recent and relevant financial
experience sufficient to perform their duties and responsibilities.
The Audit Committee also considers the continuing appointment of the
auditors and their fees. It ensures the independence and objectivity of the
external auditors through a careful review of their terms of engagement and
scope of work. This includes reviewing the nature and extent of non-audit
services supplied by the external auditors to the Group, seeking to balance
objectivity and value for money.
The external auditors are excluded from providing services where the threat to
their independence is considered to be too great (for example systems design
and implementation, management functions or human resources).
Nominations Committee
The Nominations Committee comprised Mr D C Marshall (Chairman), Mr D H
Elgie, Mr D J Hanger and Mr P J Cunard (appointed 3 June 2004). The
appointment of Directors is a formal process involving proposal by the
Nominations Committee and the approval of the whole Board. The
Nominations Committee will undertake whatever process is most appropriate
for the identification of suitable candidates and their assessment, taking into
account any other commitments that they have. Appointments are made on
merit and are considered against objective criteria.
During the year the Committee met twice to approve its terms of reference
and to discuss the appointment of Mr B C Brien and the resignation of 
Mr T B Alderson.
All Directors appointed by the Board in the year are required to retire at the
next annual general meeting and may offer themselves for re-election. All
Directors are required to retire every three years and may offer themselves for
re-election, which is not automatic. As a long-term growth company it is
Annual Report and Accounts 2005
26
Creston Plc
Corporate Governance Report continued
70472 Creston RAccs Pt2  1/7/05  11:42  Page 26 appropriate for Directors to serve on the Board for more than a single term,
subject to continuing satisfactory performance. Given its small size, changes to
the composition of the Board are infrequent, however progressive refreshing of
the Board may occur through further appointments, which will be made
commensurate with the growth of the Company.
Directors Performance Evaluation
The Board undertakes a formal and rigorous evaluation of its own performance
and that of its committees and individual directors. Individual evaluation aims
to show whether each Director continues to contribute effectively and to
demonstrate commitment to the role (including commitment of time for Board
and Committee meetings and other duties). The Chairman acts on the results
of the performance evaluation by recognising the strengths and addressing the
weaknesses of the Board and, where appropriate, proposing new members be
appointed to the Board or seeking the resignation of Directors.
The Chairman is responsible for the annual evaluation process and acts on its
outcome. Each Director submits a self-appraisal to the Chairman in respect of
their individual performance, in respect of the performance of the Board and
in respect of each Board committee of which they are a member. The self
appraisal is discussed by the Chairman with the Director.
For the Board and its committees, the appraisal considers actual performance
against performance objectives, terms of reference, communication,
effectiveness, flexibility and contribution to risk management.
Creston Operating Board
Creston has an Operating Board, which reports to the Board on a monthly
basis. This is the key forum for the operational management of the Group and
the Board believes that it is a vital element in harnessing the entrepreneurial
talent of the subsidiary managements’ expertise and experience. The role of
the Operating Board is to:
 debate and agree the strategic development of the Group;
 evaluate the performance of the Group companies;
 evaluate and agree on acquisition opportunities; and
 identify synergy and cross selling opportunities for shared business.
The current members of the Operating Board are:
Don Elgie Chief Executive and Chairman of 
the Operating Board
Barrie Brien Chief Operating and Financial Officer
Keith Bates Managing Director of MSL
Graham Monk Managing Director of TRA
Glenn Orr Chairman of the EMO group
Jeremy Martin
Grant Litchfield
(in rotation) Joint Managing Directors of CML
Roger Nelson 
Martin Bostock
(in rotation) Co-Managing Directors of NBC
Greg Delaney Chairman of DLKW group
Mark Lund Chief Executive of the DLKW group
Relations with Shareholders
The Company encourages meaningful dialogue with all shareholders.
Shareholder communication centres primarily on the publication of Annual and
Interim Accounts and periodic press releases and trading updates. The
Chairman and Executive Directors are available for discussions with
shareholders throughout the year and particularly at the time of results
announcements. The senior independent Non-Executive Director is also always
available should any shareholder wish to draw any matters to his attention. The
Directors are available for comment throughout the year and at all general
}
}
Annual Report and Accounts 2005
27
Creston Plc
70472 Creston RAccs Pt2  1/7/05  11:42  Page 27 meetings of the Company. Creston values the views of its shareholders and
recognises their interest in the Company’s strategy and performance, Board
membership and quality of management. It therefore has an active programme
to meet and make presentations to its current and potential shareholders to
discuss objectives. The Company aims to provide existing and potential
investors with the means of developing an understanding of the Group and
raising any issues they may have.
The AGM is used to communicate with private investors and they are
encouraged to participate. Shareholders are encouraged to attend the AGM
and to participate in proceedings by asking questions during the formal part of
the meeting, voting on the resolutions put to the meeting and providing Board
members with their views in informal discussions after the meeting. The
Chairman of the Audit, Remuneration and Nomination Committees is available
to answer questions. Separate resolutions are proposed on each issue so that
they can be given proper consideration and there is a resolution to approve the
Annual Report and Accounts. The Company counts all proxy votes and
indicates the level of proxies lodged on each resolution, after it has been dealt
with by a show of hands.
All shareholders can gain access to the Annual and Interim Reports, the terms
of reference for the Audit, Nominations and Remuneration Committees, press
articles and other information about the Company through the Company’s
website: www.creston.com.
Financial Reporting
The Board presents a balanced and understandable assessment of the 
Group’s position and prospects in all price-sensitive public reports and
reports to regulators as well as in the information required to be presented 
by statutory requirements.
Internal Control and Risk Management
The Board has overall responsibility for the Group’s system of internal 
control to safeguard company assets and shareholders’ investments. The risk
management process and systems of internal control are designed to manage
rather than eliminate the risk of failure to achieve the Group’s objectives. 
It should be recognised that such systems can only provide reasonable but 
not absolute assurance against material misstatement or loss.
The Board has reviewed the effectiveness of the system of internal control for
the year to 31 March 2005 and up to the date of the signing of this Annual
Report. Group Control Policies and Procedures covering all major areas of
corporate control have been developed and issued throughout the subsidiaries,
including specific levels of delegated authority. The Board will continue to
develop and implement control procedures using the guidance set out in
Internal Control Guidance for directors on the Combined Code (the Turnbull
Guidance), appropriate for its nature and scale throughout the Group and in
any future acquisitions.
Annual Report and Accounts 2005
28
Creston Plc
Corporate Governance Report continued
70472 Creston RAccs Pt2  1/7/05  11:42  Page 28 The key features of the Group’s system of internal control are as follows:
 clearly defined organisational responsibilities and limits of authority,
including a formal schedule of matters specifically reserved for decision by
the Board;
 financial controls and review procedures;
 a comprehensive system for reporting financial and non-financial
information to the Board including:
 preparation and approval of a three-year business plan;
 preparation and approval of the annual budget; and
 detailed monthly Group management accounts and commentary
including projected business and any new risks.
 a formal business acquisition investment appraisal process designed to
monitor and control growth initiatives;
 insurance and risk management policies including a formal annual risk
review report to the Board; and
 non-financial policies and procedures including Health & Safety, HR and
information systems.
During the year the Group appointed a Chief Risk Officer who is responsible
for reviewing the Group’s system of internal control procedures. The Board
believes that these internal controls are adequate for its current size and does
not feel that a separate Internal Audit function is currently required. This
situation is kept under regular review.
Going Concern
The accounts have been prepared on the going concern basis as the Board,
having considered the Group’s financial projections, borrowing facilities and
other relevant financial matters, is satisfied that on the date of approving the
accounts the Group has a reasonable expectation that it has the resources to
continue in business for the foreseeable future.
Annual Report and Accounts 2005
29
Creston Plc
70472 Creston RAccs Pt2  1/7/05  11:42  Page 29 The Board recognises that Directors’ remuneration is of interest to shareholders
and is committed to following appropriate best practice for a company of its size.
The Group operates within a competitive environment that is subject to rapid
commercial change. Its performance depends on the individual contributions of
the Directors and employees and it believes in rewarding them appropriately for
their role and incentivising them to achieve exceptional results.
In accordance with Section 241A of the Companies Act 1985, the Board presents
the Directors’ Remuneration Report for shareholder approval. The following report
is unaudited except where specified.
Renumeration Committee
The Remuneration Committee (the Committee) comprised Mr D C Marshall
(Chairman), Mr D J Hanger and Mr P J Cunard throughout the year ended 31
March 2005. All members are Non-Executive Directors and the Board consider them
to be independent. None of them have any personal financial interest in the matters
to be decided (other than as shareholders), or any potential conflicts of interest
arising from cross-directorships, or any day-to-day involvement in running the
business. A member of the Committee will attend the Annual General Meeting and
will be available to answer shareholders’ questions about Directors’ remuneration.
The Remuneration Committee meets as often as is appropriate (at least once a
year), and is responsible for making recommendations to the Board on the general
policy on remuneration of Executive Directors. The entire Board, on the advice of
the Committee, determines the terms of service contracts, salaries, bonus payments
and pension and decides on the grant of shares and share options. The Committee
also advises the Nominations Committee when considering recruitment and
termination packages. It carries out the policy on behalf of the Board.
As well as considering conditions in the Group as a whole, the Committee takes
into account the position of the Company relative to other comparable companies
and is aware of what these companies are paying, though comparisons are
treated with caution so as to avoid an upward ratchet in remuneration. The
Committee consults the Chief Executive, has access to advice within the Company
and obtains its own independent professional advice from outside the Company.
Where non-Committee members are involved in advising or supporting the
Remuneration Committee, care is taken to ensure potential conflicts in interest do
not arise. The consultants appointed by the Committee during the previous year
were PricewaterhouseCoopers and they were asked to provide information from
specified comparator companies to the Committee in respect of packages of the
Chief Executive. PricewaterhouseCoopers were also used to provide advice on
employee share plans.
Annual Report and Accounts 2005
30
Creston Plc
Directors’ Remuneration Report
70472 Creston RAccs Pt2  1/7/05  11:42  Page 30 Creston Total Shareholder Return v FTSE All Share Media & Entertainment Index
The above graph shows Creston Plc’s Total Shareholder Return (“TSR”)
performance compared to the TSR of the FTSE All Share Media and Entertainment
index over the past five years. Creston was re-listed as a marketing services
company on 29 January 2001, having previously been a property company, and
the Board therefore believes that the comparator index is only of significance after
this date. The Company believes this to be the most appropriate index, as it
includes all smaller companies in the Media sector including Creston itself.
TSR is defined as the percentage change over the period in market price
assuming the reinvestment of income and funding of liabilities of the theoretical
holding. TSR has been calculated on a one-month averaging basis in order to
reduce the volatility associated with spot prices.
Renumeration Policy
The Committee seeks to ensure that the total remuneration received by Executive
Directors is competitive and will motivate them to perform at the highest level. For
this reason the remuneration package of the Executive Directors contains, in
addition to the salary, a performance related bonus.
The remuneration of the non-executive directors is currently determined by the
Board within the £50,000 limit set by the Company’s current Articles of
Association. The proposed Articles of Association increase this limit to £200,000.
Basic Salary and Benefits
The Committee reviews the basic salary and benefits packages of the Executive
Directors annually, and will obtain the assistance of independent advisors such 
as PricewaterhouseCoopers as appropriate. In deciding upon appropriate levels 
of remuneration the Committee believes that the Company should offer levels 
of base pay reflecting individual responsibilities compared to similar jobs in
comparable companies. The base pay comprises a total salary package, 
allowing the Executives to spend it as they choose rather than as determined 
by Company schemes. No pension contributions are paid other than by way of
salary sacrifice and no pension benefits are accrued in respect of Directors under
present arrangements.
21/6/05
2000 2001 2002 2003 2004 2005
20
40
60
80
100
120
140
160
180
200
220
CRESTON - TOT RETURN IND
FTSE A/S MEDIA & ENTERTAIN. - TOT RETURN IND Source: Datastream
Annual Report and Accounts 2005
31
Creston Plc
Relisting as marketing
services company
70472 Creston RAccs Pt2  1/7/05  11:42  Page 31 Annual Bonus Payments
The Committee establishes performance targets that are relevant and challenging,
that increase the value of the Group, and which must be met for an annual bonus
to be paid. Performance-related award schemes have been established, which
recognise the duties of the recipients. For the Executive Directors this is based on
the average diluted EPS growth of the Company. The bonuses rise with
performance and the maximum related bonus that can be paid is 100 per cent.
of basic annual salary for the Chief Executive and 50 per cent. for the Chief
Financial and Operating Officer. The annual bonus payments are not pensionable
other than by way of salary sacrifice.
Share Options
From time to time the Committee recommends to the Board that options should
be granted under the Creston Share Option Scheme. The Group’s policy on
granting options is to grant them to Executive Directors and other employees
whose performance and potential contribution is judged to be important to the
operations of the Group. This policy was extended following the approval of the
Enterprise Management Incentive Scheme and the Sharesave Scheme. Share
options totalling 283,818 and 368,163 were issued under these schemes to over
110 employees.
Proposed New Bonus and Long Term Incentive Plans
In order to ensure that the key management and staff of the Group are appropriately
incentivised, motivated and retained to achieve outstanding levels of performance
over the long term, the Remuneration Committee has approved the adoption of a
new annual bonus and long term incentive plan. The details of the shares part of
the Long Term Incentive Plan are outlined on pages 59 to 60 and will be put
forward for Shareholders’ approval at the AGM. The incentive plans have been
structured with the help of remuneration experts from PricewaterhouseCoopers
and meet the Company’s stated corporate objectives of aligning the interests of
senior management and shareholders, as well as incorporating ABI guidelines.
The annual bonus scheme for the Executive Directors remains unchanged but a
Management Incentive Compensation Plan (“MICP”) is proposed to reward the
senior management of an operating company for growing its operating profit. A
MICP pool for each operating company is to be based on its profit growth in
excess of 5 per cent. but capped at 25 per cent. and this pool will be distributed
to the management up to a cap fixed as a percentage of salary.
Long Term Incentive Plan (“LTIP”) – will provide longer term incentives to the
key senior management of the Group, will be measured over a three year period
and is made up of a mixture of cash and shares. The LTIP will also operate in
conjunction with the MICP.
For Executive Directors of the Company, the grant of the LTIP will be as the
current scheme but the performance criteria have been slightly amended to a
vesting schedule based on relative performance rather than all or nothing and the
performance criteria are more demanding with an increased positive EPS growth
for 100 per cent. award. The LTIP is paid on the performance of the Group
achieving average growth in diluted earnings per share for three consecutive
years in excess of the industry average.
For the operating companies, long term incentive arrangements are proposed for
the first time and will be for the key drivers of each agency. The LTIP
arrangements will be awarded based on two different performance criteria:
i. a cash award will be paid based on the growth performance of the agency over
a three year period. The incentive will be paid on a sliding scale basis for
average operating profit growth of between 5 per cent. and 20 per cent.; and
ii. the share LTIP as described above will be awarded as a percentage of salary
and subject to the same restrictions and Group’s diluted earnings per share
performance targets as the Executive LTIP scheme.
Annual Report and Accounts 2005
32
Creston Plc
Directors’ Remuneration Report continued
70472 Creston RAccs Pt2  1/7/05  11:42  Page 32 The Remuneration Committee is confident that the above schemes incorporate
the right level of challenging targets and incentive limits to align the interests
and goals of the senior executives and employees of the Company with those 
of the shareholders.
The Impact of International Financial Reporting Standards (“IFRS”)
For the accounting year ending 31 March 2006 the Group’s accounts will be
compiled using IFRS. It is widely expected that the financial results of many
companies (including Creston) will change significantly as a direct result of this.
In turn, this may have a significant impact on the profit based incentives
discussed above. The Remuneration Committee (in conjunction with the Audit
Committee) will identify an appropriate solution for the Group when the impact of
IFRS on the Creston accounts is understood in more detail.
Service Contracts
The service contracts with the Executive Directors are for indefinite periods and
they provide for a notice period not exceeding one year, in keeping with current
practice. The policy of the Company is that termination payments should not
exceed more than twelve months’ basic salary.
Executive Directors Date of contract Notice period
Mr D H Elgie 29 January 2001 12 months
Mr B C Brien 9 September 2004 9 months
Non-Executive Directors Date of Appointment
Mr D C Marshall (as Chairman) 26 November 1999
Mr P J Cunard 27 November 2001
Mr D J Hanger 26 March 2001
Non-Executive Directors
The remuneration of the Non-Executive Directors is determined annually with
advice from PricewaterhouseCoopers as independent advisors and set within the
limits specified in the Articles of Association. The remuneration is in no way
related to performance. Non-Executive Directors cannot participate in any of the
Company’s share schemes, nor are they provided with any pension.
AUDITED INFORMATION
Directors’ Remuneration
The remuneration of the Executive Directors comprised:
Mr D H Elgie has a service contract that can be terminated on twelve months
notice by the Company or by the Director. Mr B C Brien has a service contract
that can be terminated on nine months’ notice by the Company or by the Director.
The terms of the service contracts do not allow the Executive Directors to engage
in any other business outside the Company without prior written consent from the
Committee and no such consent has been sought.
Performance
related
Salary bonus Benefits Total Total
2005 2005 2005 2005 2004
£££££
Mr D H Elgie 228,546 221,424 10,311 460,281 428,976
Mr B C Brien
(appointed 9 September 2004) 109,847 54,924 1,841 166,612 –
Mr T B Alderson
(resigned 15 September 2004) 60,072 42,310 591 102,973 176,653
Annual Report and Accounts 2005
33
Creston Plc
70472 Creston RAccs Pt2  1/7/05  11:42  Page 33 Mr T B Alderson resigned as a Director on 15 September 2004 and remained
employed by Creston until 9 March 2005. A payment of £30,000 was made to Mr
T B Alderson as compensation for the loss of his employment. In addition to the
amounts disclosed above, a further £63,547 was paid to Mr T B Alderson for his
employment from 15 September 2004 to 9 March 2005.
Executive Directors are entitled to an annual bonus dependent on the Group’s
average growth in diluted earnings per share over the previous three years limited
to 100 per cent. of salary for Mr D H Elgie, 50 per cent. for Mr B C Brien and 40
per cent. for Mr T B Alderson. Up to 20 per cent. of the bonus of Mr D H Elgie
may be paid in the form of shares, however the amount payable in shares is
reduced by the amount of any shares bought personally by him in the year. Upon
his resignation Mr T B Alderson’s performance related bonus for 2005 was agreed
at a fixed amount of £42,310.
The remuneration of Non-Executive Directors comprised fees and remuneration
as follows:
The total Directors’ emoluments are £767,866 (2004 £644,429) plus
compensation for loss of office of £30,000.
The fees for Mr D C Marshall were paid to City Group P.L.C.
Share Options
The Company has a number of share option schemes. Options granted to the
Executive Directors under these schemes are as follows:
Mr D H Elgie
Under a letter dated 29 January 2001, Mr D H Elgie is to be granted options to
subscribe for a number of new Ordinary Shares equal to 5 per cent. of any new
Ordinary Shares issued by the Company, up to a maximum of 1,180,000 new
Ordinary Shares. The entitlement to these options is divided equally into time-
based options and performance options. The time based options were agreed in
2001 in recognition of him bringing the concept of a ’buy and build’ to Creston
Plc. It is not intended to issue any further time based options once the current
scheme expires. By 31 March 2005 options issued under this arrangement
totalled 1,135,691 as detailed above.
In addition to the above options Mr D H Elgie participates in the Creston Plc
Sharesave Scheme under which he has 6,930 options at an exercise price of 136
pence. These options may be exercised from 8 September 2007.
Date from
At start Number of options At end Exercise which Expiry
of year Granted Repriced Exercised of year price exercisable date
Mr D H Elgie 605,060––– 605,060 95p 29.01.2004 29.01.2011
Mr D H Elgie 382,380––– 382,380 110p 16.10.2006 16.10.2013
Mr D H Elgie 60,657––– 60,657 114p 17.10.2006 17.10.2013
Mr D H Elgie 91,145––– 91,145 113p 03.11.2006 03.11.2013
Mr D H Elgie – 46,752 – – 46,752 139p 05.07.2007 05.07.2014
Mr D H Elgie – 67,477 – – 67,477 142p 30.09.2007 30.09.2014
Mr D H Elgie – 487,280 – – 487,280 155p 31.03.2008 31.03.2015
Mr B C Brien – 145,422 – – 145,422 142p 30.09.2007 30.09.2014
Mr B C Brien – 70,000 – – 70,000 142p 31.03.2008 30.09.2014
Mr T B Alderson 213,788––– 213,788 95p 29.01.2004 29.01.2011
2005 2004
££
Mr D C Marshall 16,000 16,000
Mr P J Cunard 11,000 11,800
Mr D J Hanger 11,000 11,000
______ ______
38,000 38,800
______ ______
Annual Report and Accounts 2005
34
Creston Plc
Directors’ Remuneration Report continued
70472 Creston RAccs Pt2  1/7/05  11:42  Page 34 Mr B C Brien
Under the terms of his service agreement Mr B C Brien was granted options to
subscribe for 145,422 new Ordinary Shares under the unapproved share option
scheme. In line with other senior members of the Group Mr B C Brien received
options to subscribe for 70,000 new Ordinary Shares under the Creston plc EMI
Scheme. The time based options were agreed as part of Mr B C Brien’s service
agreement and were in compensation of restricted stock and options given up to
join the Company. It is not intended to issue any further time based options once
the current scheme expires.
Mr T B Alderson
No further options were awarded to Mr T B Alderson in the period. In addition to
the above options, 6,930 options awarded to Mr T B Alderson in the Creston Plc
Sharesave Scheme lapsed upon his resignation.
Share price
The mid-market price of the Ordinary Shares was 151.0 pence on 1 April 2004
and 154.5 pence on 31 March 2005, the first and last trading days of the
Creston financial year. During the year the share price ranged from 125.0
pence to 163.5 pence.
Pensions
There are no Company pension contributions payable on behalf of the Executive
Directors, other than by way of salary sacrifice.
David Marshall
On behalf of the Board
Chairman of the Remuneration Committee
21 June 2005
Annual Report and Accounts 2005
35
Creston Plc
70472 Creston RAccs Pt2  1/7/05  11:42  Page 35 Report of the Independent Auditors
to the Members of Creston Plc
We have audited the financial statements of Creston Plc for the year ended 31
March 2005 which comprise the consolidated profit and loss account, the
balance sheets, the consolidated cash flow statement and notes 1 to 30 to the
financial statements. These financial statements have been prepared under the
accounting policies set out therein. We have also audited the information in the
Directors’ Remuneration Report that has been 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
The Directors’ responsibilities for preparing the annual report, the Directors’
Remuneration Report and the financial statements in accordance with United
Kingdom law and accounting standards are set out in the statement of Directors’
responsibilities in the Report of the Directors.
Our responsibility is to audit the financial statements and the part of the Directors’
Remuneration Report to be audited 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 whether the financial statements and the part of the Directors’
Remuneration Report to be 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 Group is not
disclosed.
We review whether the corporate governance statement reflects the Company’s
compliance with the nine 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 other information contained in the Annual Report, and consider whether
it is consistent with the audited financial statements. This other information
comprises only the Directors’ Biographies, the Chairman’s Statement, the Chief
Executive’s Overview, the Chief Operating and Financial Officer’s Review, the
reviews of the Group companies, the Report of the Directors, the Corporate
Governance Report, the unaudited part of the Directors’ Remuneration Report
and the Five Year Summary. We consider the implications for our report if we
become aware of any apparent misstatements or material inconsistencies with the
financial statements. Our responsibilities do not extend to any other information.
Basis of 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 to be 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 Group’s circumstances, consistently
applied and adequately disclosed.
Annual Report and Accounts 2005
36
Creston Plc
70472 Creston RAccs Pt2  1/7/05  11:42  Page 36 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 to be 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 to be audited.
Opinion
In our opinion:
 the financial statements give a true and fair view of the state of affairs of the
Company and the Group at 31 March 2005 and of the profit of the Group for
the year then ended; and
 the financial statements and the part of the Directors’ Remuneration Report to
be audited have been properly prepared in accordance with the Companies
Act 1985.
Grant Thornton UK LLP
Registered Auditors
Chartered Accountants
Oxford
21 June 2005
The maintenance and integrity of the Creston Plc website is the responsibility of
the Directors. The work carried out by the auditors does not involve consideration
of these matters and, accordingly, the auditors accept no responsibility for any
changes that may have occurred to the financial statements since they were
initially presented on the website. Legislation in the United Kingdom governing the
preparation and dissemination of the financial statements may differ from
legislation in other jurisdictions.
Annual Report and Accounts 2005
37
Creston Plc
70472 Creston RAccs Pt2  1/7/05  11:42  Page 37 Annual Report and Accounts 2005
38
Creston Plc
Consolidated Profit and Loss Account
for the year ended 31 March 2005
Continuing
Note Operations Aquisitions
2005 2004
£’000 £’000 £’000 £’000
Turnover 2 33,069 2,801 35,870 29,453
Cost of sales (19,001) (649) (19,650) (18,326)
Gross profit 14,068 2,152 16,220 11,127
Administrative expenses (10,961) (1,579) (12,540) (8,770)
Operating profit 3,107 573 3,680 2,357
Share of operating loss in joint venture – (34)
Profit on ordinary activities before interest 3,680 2,323
Net interest payable 5 (176) (235)
Profit on ordinary activities before taxation 2/3 3,504 2,088
Tax on profit on ordinary activities 6 (864) (639)
Profit for the financial year 2,640 1,449
Dividends 8 (684) (332)
Retained profit for the financial year 23 1,956 1,117
Earnings per share 7 10.72p 9.03p
Diluted earnings per share 7 10.56p 8.47p
The Group has no recognised gains or losses other than the results for the year as set out above.
The accompanying notes form an integral part of these financial statements.
70472 Creston RAccs Pt3  1/7/05  11:43  Page 38 Balance Sheets
as at 31 March 2005
39
Note Group Company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Fixed assets
Intangible assets 9 64,212 25,820 – –
Tangible assets 10 1,740 775 13 31
Investments 11 15 – 73,163 31,396
65,967 26,595 73,176 31,427
Current assets
Stocks and work in progress 13 1,810 777 – –
Debtors 14 14,821 6,213 2,256 76
Cash at bank and in hand 15 5,419 4,160 – 1,232
22,050 11,150 2,256 1,308
Creditors: amounts falling due within one year 16 (19,480) (8,980) (6,346) (3,182)
Net current assets/(liabilities) 2,570 2,170 (4,090) (1,874)
Total assets less current liabilities 68,537 28,765 69,086 29,553
Creditors: amounts falling due after 
more than one year 17 (16,196) (3,511) (16,090) (3,507)
Net assets 52,341 25,254 52,996 26,046
Capital and reserves
Called up share capital 22 3,493 2,207 3,493 2,207
Share premium account 23 19,168 9,083 19,168 9,083
Special reserve 23 2,385 2,385 2,385 2,385
Other reserve 23 12,442 5,719 12,442 5,719
Capital redemption reserve 23 72 72 72 72
Shares to be issued 24 11,016 3,979 11,016 3,979
Profit and loss account 23 3,765 1,809 4,420 2,601
Total equity shareholders’ funds 25 52,341 25,254 52,996 26,046
The accounts were approved by the Board of Directors on 21 June 2005
Barrie Brien
Chief Operating and Financial Officer
21 June 2005
The accompanying notes form an integral part of these financial statements.
Annual Report and Accounts 2005
Creston Plc
70472 Creston RAccs Pt3  1/7/05  11:43  Page 39 Annual Report and Accounts 2005
40
Creston Plc
Consolidated Cash Flow Statement
for the year ended 31 March 2005
Note
2005 2004
£’000 £’000
Net cash inflow from operating activities 26 4,930 3,057
Returns on investments and servicing of finance
Bank interest received 162 101
Bank and other loan interest paid (331) (378)
Finance lease interest paid (7) (13)
Net cash outflow from returns on investments and servicing of finance (176) (290)
Taxation (887) (677)
Capital expenditure and financial investment
Purchase of tangible fixed assets (549) (240)
Proceeds on sale of tangible fixed assets 25 24
Decrease/(increase) in restricted cash deposits 240 (191)
Net cash outflow from capital expenditure and financial investment (284) (407)
Acquisitions and disposals
Purchase of subsidiary undertakings (20,413) (4,588)
Net cash acquired with subsidiaries 4,233 1,795
Net cash outflow from acquisitions and disposals (16,180) (2,793)
Equity dividends paid (441) (224)
Net cash outflow before financing (13,038) (1,334)
Financing
Issue of share capital for cash consideration 11,290 4,751
Expenses paid in connection with share issues (416) (293)
Receipt of bank loan 11,284 –
Repayment of bank loan (6,198) (916)
Repayment of loan notes (1,295) (528)
Capital element of finance lease payments (124) (112)
Net cash inflow from financing 14,541 2,902
Increase in cash 27 1,503 1,568
The accompanying notes form an integral part of these financial statements.
70472 Creston RAccs Pt3  1/7/05  11:43  Page 40 41
1. ACCOUNTING POLICIES
Basis of preparation
The accounts have been prepared under the historical cost convention and in accordance with United Kingdom
applicable accounting standards. The true and fair override provisions of the Companies Act 1985 have been
invoked with regard to goodwill as detailed below. The principal accounting policies of the Group have remained
unchanged from the previous year and are set out below.
Basis of consolidation
The Group financial statements consolidate those of the Company and of its subsidiaries up to 31 March 2005.
The results of subsidiaries acquired during the year are included from the effective date of acquisition. Profits
and losses on intra-group transactions are eliminated in full. On acquisition of a subsidiary, all the subsidiary’s
assets and liabilities that exist at the date of acquisition are recorded at their fair values reflecting their condition
at that date.
Turnover
Turnover comprises the gross amounts billed to clients in respect of the provision of marketing services to include
retainer fees, media placements and production of marketing materials together with fees and disbursements for
market research and other services performed subject to specific contract. Revenue is recognised when the
service is performed, in accordance with the terms of the contractual agreement and the stage of completion of
the work. Turnover is stated after deduction of trade discounts and excluding value added tax or similar sales taxes
outside the United Kingdom.
Goodwill
Goodwill arising from the acquisition of subsidiary undertakings, representing the difference between the purchase
consideration and fair value of net assets acquired, has been capitalised in accordance with the requirements of
FRS 10. Future anticipated payments to vendors in respect of earn-outs are based on the Directors’ best estimates
of these obligations. Earn-outs are dependent on the future performance of the relevant business and are regularly
reviewed. The goodwill arising on the relevant acquisition is adjusted to these revised estimates throughout the
earn-out period.
The Directors have considered the appropriate method of accounting for goodwill. They are of the opinion that
reviewing goodwill on an annual basis is a more suitable method than writing it off over a specific number of years.
An impairment review is carried out every six months based on projected future cash flows discounted at an
appropriate discount rate based on the Group’s weighted average cost of capital. In accordance with FRS 10 and
11, the carrying value of intangible assets will continue to be reviewed for impairment on the basis stipulated in
FRS 11 and adjusted should this be required. The individual circumstances of each future acquisition will be
assessed to determine the appropriate treatment of any related goodwill.
The financial statements depart from the requirement of companies’ legislation to amortise goodwill over a 
finite period in order to give a true and fair view, for the reasons outlined above. If the goodwill arising on all
acquisitions had been amortised over a period of twenty years, operating profit would have decreased by
£1,513,000 (2004: £1,163,000).
Deferred consideration
The terms of an acquisition may provide that the value of the purchase consideration, which may be payable in
cash, shares or other securities at a future date, depends on uncertain future events such as the future
performance of the acquired company. Where it is not possible to estimate the amounts payable with any degree
of certainty, the amounts recognised in the financial statements represent a reasonable estimate at the balance
sheet date of the amounts expected to be paid. The deferred consideration is estimated. The maximum amount of
the deferred consideration that is payable in shares at the Company’s option is accounted for as shares to be
issued. The remainder of the deferred consideration is treated as a liability.
Tangible fixed assets and depreciation
Depreciation is provided on all tangible fixed assets at rates calculated to write off the cost, less estimated residual
value based on prices prevailing at the date of acquisition, of each asset evenly over its expected useful economic
life, as follows:
Leasehold property Period of the lease
Motor vehicles 25% per annum
Fixtures, fittings and equipment 10-33% per annum
Notes to the Financial Statements
for the year ended 31 March 2005
Annual Report and Accounts 2005
Creston Plc
70472 Creston RAccs Pt3  1/7/05  11:43  Page 41 Annual Report and Accounts 2005
42
Creston Plc
Notes to the Financial Statements continued
for the year ended 31 March 2005
Stocks
Stocks are stated at the lower of cost and net realisable value. The cost of work in progress includes the costs of
direct materials and purchases, and the costs of direct labour plus attributable overheads based on normal levels
of activity.
Where projects have the characteristics of long-term contracts, attributable profit is only recognised once their
outcome can be assessed with reasonable certainty. Such profit reflects the proportion of work on the project
completed to date. Amounts recoverable on such projects are included within debtors after provision for any
foreseeable losses and the deduction of applicable payments on account. Full provision is made for any losses on
projects in the year in which the loss is first foreseen.
Deferred taxation
Deferred tax is recognised on all timing differences where the transactions or events that give the Group an
obligation to pay more tax in the future, or a right to pay less tax in the future, have occurred by the balance sheet
date. Deferred tax assets are recognised when it is more likely than not that they will be recovered. Deferred tax is
measured using rates of tax that have been enacted or substantively enacted by the balance sheet date.
Lease and hire purchase commitments
Assets held under finance leases and hire purchase contracts are included in the balance sheet as tangible fixed
assets and depreciated similarly to other assets. The interest elements of the rental obligations are charged in the
profit and loss account over the periods of the leases and hire purchase contracts and represent a constant
proportion of the balance of capital repayments outstanding. Rental costs under operating leases are charged
against profits as incurred.
Pension costs
Retirement benefits to employees are provided by defined contribution schemes that are funded by the Group and
employees. Payments are made to pension trusts that are financially separate from the Group. These costs are
charged against profits as incurred.
Foreign currencies
Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction.
Monetary assets and liabilities in foreign currencies are translated at the rates of exchange ruling at the balance
sheet date.
Financial instruments
Financial assets are recognised in the balance sheet at the lower of cost and net realisable value. Provision is
made for diminution in value where appropriate.
Income and expenditure arising on financial instruments is recognised on the accruals basis, and credited or
charged to the profit and loss account in the financial period to which it relates.
2 SEGMENTAL ANALYSIS
Turnover, gross profit, profit before tax and net assets attributable to Creston activities are shown below.
Turnover Gross profit
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Marketing Communications 17,876 17,330 6,754 5,727
Insight 9,917 9,360 4,228 3,613
Public Relations 6,851 2,763 4,371 1,787
Advertising 1,226 – 867 –
35,870 29,453 16,220 11,127
All of the Group’s current activities are marketing services activities and are based primarily in the United
Kingdom. The operations of the joint venture ended during 2004. Turnover from CML Research and the DLKW
group relates only to the period since acquisition being seven months and three weeks respectively.
70472 Creston RAccs Pt3  1/7/05  11:43  Page 42 43
Profit before tax
Profit
2005 2004
£’000 £’000
Marketing Communications 2,298 1,955
Insight 1,594 1,271
Public Relations 1,297 417
Advertising 164 –
Agency total 5,353 3,643
Head office (1,673) (1,286)
Operating profit 3,680 2,357
Share of operating loss in joint ventures – (34)
Net interest payable (176) (235)
Profit before tax 3,504 2,088
Net assets
2005 2004
£’000 £’000
Marketing Communications 22,139 11,219
Insight 12,961 8,576
Public Relations 7,700 7,537
Advertising 23,684 –
Agency total 66,484 27,332
Non operating
Net bank (debt)/funds (2,864) 551
Head office (1,439) (341)
Dividends payable (508) (265)
Deferred consideration (9,332) (2,023)
Net assets 52,341 25,254
Turnover, gross profit and profit before interest and tax may also be split between organic activities (a like for like
comparison of results for operations reflecting their period of ownership by Creston) and acquisitions. The
acquisitions figures include the results of acquisitions in the current period (which are disclosed on the face of the
profit and loss account) as well as the full year impact of acquisitions completed in 2004 (turnover: £2,894,000,
gross profit: £2,252,000 and profit before interest and tax: £588,000).
Agency Head
Organic Acquisitions Total office Total
£’000 £’000 £’000 £’000 £’000
Turnover 30,175 5,695 35,870 – 35,870
Gross profit 11,816 4,404 16,220 – 16,220
Profit before interest and tax 4,192 1,161 5,353 (1,673) 3,680
The organic results for 2005 compare to 2004 as follows:
2005 2004 Change
£’000 £’000 %
Turnover 30,175 29,453 +2
Gross profit 11,816 11,127 +6
Profit before interest and tax – agency total 4,192 3,643 +15
– total 2,519 2,323 +8
Annual Report and Accounts 2005
Creston Plc
70472 Creston RAccs Pt3  1/7/05  11:43  Page 43 Annual Report and Accounts 2005
44
Creston Plc
Notes to the Financial Statements continued
for the year ended 31 March 2005
3 PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
The profit on ordinary activities before taxation is stated after:
2005 2004
£’000 £’000
Auditors’ remuneration 153 95
Profit on sale of fixed assets (6) (2)
Depreciation
Tangible fixed assets, owned 373 286
Tangible fixed assets, held under hire purchase contracts 115 98
Operating lease rentals – land and buildings 683 519
Operating lease rentals – plant and equipment 118 127
Auditors remuneration may be analysed as flows:
2005 2004
£’000 £’000
Audit services
Statutory audit 113 70
Tax services
Compliance services 25 15
Advisory services 4 3
Other services
Accounting advice 8 7
Information technology 3 –
153 95
Accounting advice refers to the work undertaken on new accounting standards, review of the Group’s Interim
Results and in 2005 a preliminary review of the impact of IFRS on the Group. In addition, auditors’ remuneration
for non-audit services of £146,000 (2004: £73,000) in relation to assurance services on acquisitions has been
capitalised within goodwill during the year.
4 EMPLOYEES
2005 2004
£’000 £’000
Wages and salaries 10,135 7,108
Social security costs 1,095 760
Pension costs 174 166
11,404 8,034
The average number of employees of the Group during the year was:
2005 2004
Number Number
Directors 5 5
Marketing services 308 236
313 241
The average number of employees of CML and the DLKW Group during the period since acquisition was 7 and 13
respectively, which is included in the above note. The number of employees of the Group at the year-end was 467
(2004: 269).
The aggregate Directors emoluments are £767,866 (2004: £644,429).
70472 Creston RAccs Pt3  1/7/05  11:43  Page 44 45
5 NET INTEREST PAYABLE
2005 2004
£’000 £’000
Interest receivable on bank deposits 162 95
Interest payable on bank overdrafts and loans (317) (225)
Interest payable on finance leases (7) (13)
Interest payable on other loans (14) (92)
(176) (235)
6 TAX ON PROFIT ON ORDINARY ACTIVITIES
2005 2004
£’000 £’000
The tax charge comprises:
Current tax:
Corporation tax at 30% (2004: 30%) 907 618
Overprovision of corporation tax in previous year (8) (2)
899 616
Deferred tax:
Origination and reversal of timing differences (note 21) (35) 23
Tax charge on profit on ordinary activities 864 639
The tax rate for the year is different from the standard rate of corporation tax in the UK (30 per cent.). The
differences are explained below:
2005 2004
£’000 £’000
Profit on ordinary activities before tax 3,504 2,088
Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 30% 1,051 626
Effects of:
Expenses not deductible for tax purposes 24 31
Capital allowances for year in excess of depreciation 36 (3)
Other items (204) (36)
Adjustments to tax charge in respect of previous periods (8) (2)
Current tax charge for year 899 616
Other items include the impact of favourable treatments relating to the taxation of goodwill acquired as part of the
CML acquisition and share awards to TRA employees.
7 EARNINGS PER SHARE
Earnings per share
2005 2004
Profit for Weighted Profit for Weighted
the average Pence the average Pence
financial number of per financial number of per
year shares share year shares share
£’000 £’000
Basic earnings per share
Earnings attributable to 
ordinary shareholders 2,640 24,617,806 10.72 1,449 16,045,576 9.03
Dilutive effect of securities:
Warrants – 33,562 (0.01) – 15,275 (0.01)
Options – 339,245 (0.15) – 70,179 (0.03)
Contingent shares ––– – 985,033 (0.52)
Diluted earnings per share 2,640 24,990,613 10.56 1,449 17,116,063 8.47
Annual Report and Accounts 2005
Creston Plc
70472 Creston RAccs Pt3  1/7/05  11:43  Page 45 Annual Report and Accounts 2005
46
Creston Plc
Notes to the Financial Statements continued
for the year ended 31 March 2005
8 DIVIDENDS
2005 2004
£’000 £’000
Interim dividend of 0.7p per share (2004: 0.6p per share) 176 67
Proposed final equity dividend of 1.45p per share (2004: 1.2p final per share) 508 265
684 332
The proposed final dividend will be paid on 1 August 2005 to shareholders on the register at 1 July 2005.
9 INTANGIBLE ASSETS
Purchased Goodwill on
Group goodwill consolidation Total
£’000 £’000 £’000
Cost
At 1 April 2004 – 25,820 25,820
Additions 7,125 30,671 37,796
Adjustments to consideration and net assets (2,340) 2,936 596
A At t  3 31 1  M Ma ar rc ch h  2 20 00 05 5 4 4, ,7 78 85 5 5 59 9, ,4 42 27 7 6 64 4, ,2 21 12 2
N Ne et t  b bo oo ok k  a am mo ou un nt t  a at t  3 31 1  M Ma ar rc ch h  2 20 00 05 5 4 4, ,7 78 85 5 5 59 9, ,4 42 27 7 6 64 4, ,2 21 12 2
Net book amount at 31 March 2004 – 25,820 25,820
As explained in note 1, goodwill on consolidation and purchased goodwill have not been amortised as the directors
are of the opinion that it has an indefinite economic life.
The adjustments to consideration relate to a change in the estimated deferred consideration for acquired agencies
in the earn-out period under the terms of the relevant sale and purchase agreements.
10 TANGIBLE ASSETS
Group Company
Fixtures, Fixtures,
Leasehold Motor fittings & fittings &
property vehicles equipment Total equipment
£’000 £’000 £’000 £’000 £’000
Cost
At 1 April 2004 52 251 2,601 2,904 118
Additions 1 62 552 615 6
Disposals – (51) (69) (120) (26)
On acquisition of subsidiary undertakings 461 – 395 856 –
At 31 March 2005 514 262 3,479 4,255 98
Depreciation
At 1 April 2004 22 87 2,020 2,129 87
Charge for the year 5 62 421 488 24
Disposals – (34) (68) (102) (26)
At 31 March 2005 27 115 2,373 2,515 85
Net book amount at 31 March 2005 487 147 1,106 1,740 13
Net book amount at 31 March 2004 30 164 581 775 31
The net book amount includes £586,000 (2004: £238,000) in respect of assets held under finance leases and
similar hire purchase contracts. The amount of depreciation in respect of such assets amounted to £115,000
(2004: £98,000) for the year.
70472 Creston RAccs Pt3  1/7/05  11:43  Page 46 47
11 INVESTMENTS
Group
2005 2004
£’000 £’000
Investment in shares in BJK&E Holdings Limited 15 –
The investment is held by DLKW Holdings Limited and represents 15% of the share capital of BJK&E Holdings
Limited.
Company
Shares in 
subsidiary
undertakings
£’000
Cost
At 1 April 2004 31,396
Additions 41,171
Net adjustments to consideration and net assets (note 9) 596
A At t  3 31 1  M Ma ar rc ch h  2 20 00 05 5 7 73 3, ,1 16 63 3
N Ne et t  b bo oo ok k  a am mo ou un nt t  a at t  3 31 1  M Ma ar rc ch h  2 20 00 05 5 7 73 3, ,1 16 63 3
Net book amount at 31 March 2004 31,396
The adjustment to consideration relates to a change in the deferred consideration of completed acquisitions under
the terms of the Sale and Purchase Agreement.
The principal Group companies at 31 March 2005 are set out below:
Proportion of the Ordinary Shares
Principal activity and voting rights held by:
Subsidiary in the year Company Subsidiaries
Marketing Sciences Limited Market Research 100%
Mobile Sensory Testing 
Services Limited Market Research 100%
The Real Adventure Marketing 
Communications Limited Marketing Communications 100%
EMO Group Limited Marketing Communications 100%
Emery McLaven Orr Limited Marketing Communications 100%
John Bowler Associates Limited Marketing Communications 100%
Sky Rock 
Communications Limited Digital Marketing 100%
Nelson Bostock  
Communications Limited Public Relations 100%
CML Research Limited Qualitative Research 100%
Face Communications Limited Intermediate Holding Company 100%
DLKW Holdings Limited Intermediate Holding Company 100%
DLKW & Partners Limited Advertising Agency 100%
Dialogue DLKW Limited Digital and Promotional Marketing 100%
The Composing Room Limited Pre-press Print Production 100%
The above list excludes details of non-trading dormant subsidiaries, although all subsidiary undertakings have
been included in the consolidated accounts. All of the subsidiary undertakings are incorporated and operate in the
United Kingdom.
Annual Report and Accounts 2005
Creston Plc
70472 Creston RAccs Pt3  1/7/05  11:43  Page 47 Annual Report and Accounts 2005
48
Creston Plc
12 ACQUISITIONS
CML Research Ltd (“CML”)
On 3 September 2004, the Company acquired the trade and assets of the CML Research partnership. Prior
to its acquisition the trade and assets were sold by the CML Research partnership into a dormant company, CML.
The Company acquired the whole of the issued share capital of CML for consideration (including deferred
consideration) as set out below. This purchase has been accounted for by the acquisition method of accounting.
The unaudited profit attributable to the partners (before partners drawings and salaries) for the year ended 30
April 2004 was £1.1 million. The unaudited turnover and profit before tax of the CML Research partnership from 1
May 2004 to 2 September 2004 were £667,000 and £147,000 respectively. The assets and liabilities of CML at 3
September 2004 were as follows:
Accounting
policy
Book value adjustments Fair value
£’000 £’000 £’000
Fixed assets
Intangible assets 7,125 – 7,125
Tangible assets 29 – 29
7,154 – 7,154
Current assets
Debtors 493 – 493
Creditors amounts falling due within one year (222) – (222)
Net current assets 271 271
Net assets 7,425 – 7,425
Satisfied by: £’000
Cash 2,959
Shares issued 1,806
Deferred/contingent consideration (note 17) 2,340
Acquisition costs 320
7,425
The amount of deferred/contingent consideration payable is dependent upon the level of profit before taxation
achieved by CML in the period from 3 September 2004 to 31 March 2008. At the date of acquisition the Directors
recognised the maximum deferred consideration of £2.3 million. The Directors consider the most reasonable
estimate of the current amounts payable is £nil. This deferred consideration is to be settled by 30 per cent. in
guaranteed loan notes 2008 and 70 per cent. in unsecured loan notes 2008 or shares (at the Company’s
discretion). In addition, should average profits for the period to 31 March 2008 fall below certain levels then the
Company has the ability to claw back the initial consideration to a maximum of £1.8 million.
Notes to the Financial Statements continued
for the year ended 31 March 2005
70472 Creston RAccs Pt3  1/7/05  11:43  Page 48 49
Face Communications Ltd and its subsidiaries (“DLKW group”)
On 9 March 2005, the Company acquired the whole of the issued share capital of the DLKW group for
consideration (including deferred consideration) as set out below. This purchase has been accounted for by the
acquisition method of accounting. The profit after taxation of DLKW group for the year ended 31 December 2004
was £1.9 million. The unaudited turnover and profit before tax of the DLKW group from 1 January 2004 to 8
March 2005 were £39.1 million and £3.3 million respectively. The assets and liabilities of the DLKW group at 9
March 2005 were as follows:
Accounting
policy
Book value adjustments Fair value
£’000 £’000 £’000
Fixed assets
Intangible assets 921 – 921
Tangible assets 856 – 856
Investments 15 – 15
1,792 – 1,792
Current assets
Work in progress 1,297 – 1,297
Debtors 7,271 – 7,271
Bank and cash 4,351 – 4,351
12,919 – 12,919
Creditors amounts falling due within one year (10,564) – (10,564)
Net current assets 2,355 – 2,355
Total assets less current liabilities 4,147 – 4,147
Creditors amounts falling due after more than one year (155) – (155)
Net assets 3,992 – 3,992
Goodwill 29,750
33,742
Satisfied by: £’000
Cash 14,969
Shares issued 4,003
Deferred/contingent consideration (note 17) 13,856
Acquisition costs 914
33,742
Creditors due within one year include amounts due to the vendors of £1,251,000 which were paid prior to 31
March 2005.
The amount of deferred consideration payable is dependent upon:
i the level of profit before taxation for the year ending 31 March 2006 exceeding the level for the year ended
31 December 2004 in which case estimated interim consideration of £4,888,000 will be payable. The
Directors consider this to be the most reasonable estimate that can be made.
ii the level of profit before taxation achieved by the DLKW group in the period from 9 March 2005 to 31 March
2008. The Directors have recognised the estimated £8,968,000 of deferred consideration at this time.
At the date of acquisition, the Directors considered the combined additional consideration of £13,856,000 to be
the most reasonable estimate that could be made on the information available. Since the completion of the
acquisition, the agency has secured a significant number of new clients. Based on these new client gains further
consideration of £2,280,000 will fall to be payable.
The total goodwill arising on the acquisition of the DLKW group is £30,671,000 (including the existing intangible
asset of £921,000).
Annual Report and Accounts 2005
Creston Plc
70472 Creston RAccs Pt3  1/7/05  11:43  Page 49 Annual Report and Accounts 2005
50
Creston Plc
Notes to the Financial Statements continued
for the year ended 31 March 2005
Cash flow
The subsidiary undertakings acquired during the year made the following contributions to, and utilisations of
Group cash flow:
£’000
Operating profit 573
Depreciation 29
Decrease in stock and work in progress 280
Decrease in debtors (124)
Decrease in creditors (972)
Net cash outflow from operating activities (214)
Capital expenditure and financial investment (1,251)
(1,465)
Analysis of net outflow of cash in respect of the purchase of the subsidiary undertakings:
£’000
Cash at bank and in hand acquired 4,233
Cash consideration paid (17,928)
Acquisition costs paid (1,234)
Net cash outflow (14,929)
13 STOCKS AND WORK IN PROGRESS
Group
2005 2004
£’000 £’000
Work in progress 1,732 763
Stocks 78 14
1,810 777
14 DEBTORS: AMOUNTS RECEIVABLE WITHIN ONE YEAR
Group Company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Trade debtors 12,156 5,586 24 2
Other debtors 378 125 – 29
Amounts due from group undertakings – – 2,173 –
Prepayments and accrued income 2,104 437 47 37
Deferred tax asset (note 21) 183 65 12 8
14,821 6,213 2,256 76
15 CASH AT BANK AND IN HAND
Cash of £62,000 (2004: £302,000) is maintained in a designated account (the escrow account) as security for the
loan notes issued on the acquisition of MSL and is therefore not freely available to the Group.
70472 Creston RAccs Pt3  1/7/05  11:43  Page 50 51
16 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Group Company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Acquisition deferred consideration – 955 – 955
Acquisition loan notes 27 346 27 346
Bank loan 1,660 916 1,660 916
Bank overdraft – 4 2,428 –
Amounts due under finance leases 216 103 – –
Trade creditors 4,587 1,686 337 73
Other creditors 976 248 58 58
Corporation tax 668 765 2 7
Social security and other taxes 2,766 809 348 15
Accruals and deferred income 7,405 2,339 978 547
Payments on account 667 544 – –
Proposed dividend 508 265 508 265
19,480 8,980 6,346 3,182
17 CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
Group Company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Acquisition loan notes 35 56 35 56
Bank loan 6,624 2,283 6,623 2,283
Acquisition deferred consideration 9,332 1,068 9,332 1,068
Deferred taxation – 3 – –
Amounts due to Group undertakings – – 100 100
Amounts due under finance leases 205 101 – –
16,196 3,511 16,090 3,507
Acquisition loan notes
Pursuant to the acquisition of MSL loan notes were issued. These are repayable according to the agreed schedule
with the final payment in 2008. The loan notes accrue interest at 6 per cent. per annum.
Bank loan
The bank loan is secured by a fixed and floating charge over the assets of all the Group companies. The loan is
repayable in equal annual instalments of £1,660,000. The bank loan accrues interest at 2.06 per cent. above
LIBOR.
Acquisition deferred consideration
The Directors’ best estimate of future earn-out obligations is set out below:
Loan notes Shares to
to be issued be issued Total
£’000 £’000 £’000
Between one and two years 2,962 3,653 6,615
Between two and three years 745 1,738 2,483
Between three and four years 5,625 5,625 11,250
9,332 11,016 20,348
The loan notes that will be issued to settle the above liabilities will be unsecured and will bear interest at various rates.
The shares to be issued may be settled by either new Ordinary Shares or loan notes (at Creston’s discretion).
Annual Report and Accounts 2005
Creston Plc
70472 Creston RAccs Pt3  1/7/05  11:43  Page 51 Annual Report and Accounts 2005
52
Creston Plc
Notes to the Financial Statements continued
for the year ended 31 March 2005
18 COMMITMENTS UNDER FINANCE LEASES AND HIRE PURCHASE AGREEMENTS
Commitments under finance leases and hire purchase agreements are as follows:
Group
2005 2004
£’000 £’000
In one year or less 216 103
Between one and five years 195 79
In five years or more 10 22
421 204
19 FINANCIAL ASSETS AND LIABILITIES
The Group’s financial instruments comprise of borrowings and cash. As permitted by FRS13, short-term debtors
and creditors have been excluded except for currency disclosures. The financial assets are required for day-to-day
working capital of the Group. The financial liabilities were used as part of the funding for past acquisitions. The
objective is to achieve the best interest rates available whilst maintaining acceptable flexibility and minimal risk.
The principal currency of the Group’s financial assets and liabilities is sterling. There is a minimal amount of cash
held in US Dollar and Euro accounts. The Group has no material exposure to foreign currency risk and therefore
does not use financial instruments for hedging purposes.
The Group has committed and undrawn facilities relating to the revolving credit facility of £5,000,000 at 31 March
2005 (2004: £nil).
The main risks arising from the Group’s financial instruments are interest rate risk and liquidity risk.
Interest Rate Risk
The Group’s operations are cash generative and it funds acquisitions through a combination of retained profits and
borrowings. In order to manage the Group’s exposure to interest rate risk, borrowings comprise of a mixture of
fixed and floating rate instruments. Effective from 9 March 2005 the Group has an interest rate collar over
£4,000,000 of borrowings (reducing in equal semi-annual instalments over a three year period to nil) with a cap
linked to LIBOR at 6.0 per cent. and a floor at 4.86 per cent.
Liquidity Risk
The Group maintains a mixture of short and long-term borrowings to manage this risk. Furthermore, the Group’s
cash deposits are highly liquid. The Group seeks to ensure sufficient liquidity is available to meet foreseeable
needs and to invest cash assets safely and profitably.
a) Financial assets
2005 2004
£’000 £’000
Cash at bank and in hand maturing in one year or less, or on demand 5,419 4,160
Weighted average interest rate 4.19% 3.25%
b) Financial liabilities
2005 2004
£’000 £’000
Subject to floating rates:
Bank loan 8,284 3,199
70472 Creston RAccs Pt3  1/7/05  11:43  Page 52 53
The bank loan interest rate is fixed every six months and accordingly does not meet the FRS13 definition of fixed
rate financial liabilities. The floating rate borrowings bear interest at 2.06 per cent. over LIBOR. The interest borne
under this loan is partially hedged by the interest rate collar which permits £4,000,000 of the loan to float between
a floor of 4.86 per cent. and a ceiling of 6.0 per cent. compared to LIBOR.
2005 2004
£’000 £’000
At fixed interest rates:
Overdraft – 4
Acquisition loan notes 62 402
Finance leases 421 204
Fixed interest rate financial liabilities: 483 610
Weighted average period for which rate is fixed – months 20.9 7.95
Weighted average interest rate 6.87% 4.12%
2005 2004
£’000 £’000
Repayable in:
One year or less, or on demand 1,948 1,369
More than one year but not more than two years 1,848 1,018
Between two and five years 4,971 1,422
8,767 3,809
c) Fair values of financial assets and liabilities
Book value Fair value
Group 2005 2004 2005 2004
£’000 £’000 £’000 £’000
Cash at bank and in hand (net of overdraft) 5,419 4,156 5,419 4,156
Acquisition loan notes (62) (402) (62) (402)
Bank loan (8,284) (3,199) (8,284) (3,199)
Finance leases (421) (204) (421) (204)
(3,348) 351 (3,348) 351
The fair values of the financial assets and liabilities are estimated to be equal to their book values.
20 OPERATING LEASE COMMITMENTS
As at 31 March the Group had annual commitments under non-cancellable operating leases as follows:
2005 2004
Land and Land and
buildings Other buildings Other
£’000 £’000 £’000 £’000
In one year or less 76 37 44 21
Between one and five years 802 138 353 99
In five years or more 198 – 154 –
1,076 175 551 120
Annual Report and Accounts 2005
Creston Plc
70472 Creston RAccs Pt3  1/7/05  11:43  Page 53 Annual Report and Accounts 2005
54
Creston Plc
Notes to the Financial Statements continued
for the year ended 31 March 2005
21 DEFERRED TAXATION
The deferred taxation asset of £183,000 (2004: £65,000) and liability of £nil (2004: £3,000) recognised in the
financial statements is set out below:
Group Company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Accelerated capital allowances 147 57 5 5
Other timing differences 36 8 7 3
183 65 12 8
The movement in the year is analysed as follows:
2005 2004
£’000 £’000
As at 1 April 65 88
Profit and loss account 35 (23)
On acquisition 83 (3)
As at 31 March 183 62
22 SHARE CAPITAL
Group and Company 2005 2004
£’000 £’000
Authorised:
70,000,000 Ordinary Shares of 10p each
(2004: 70,000,000 Ordinary Shares of 10p each) 7,000 7,000
Called up, allotted, and fully paid:
34,930,918 Ordinary Shares of 10p each
(2004: 22,065,138 Ordinary Shares of 10p each) 3,493 2,207
Shares
On 9 July 2004, 935,030 Ordinary Shares of 10p each for a total nominal value of £93,503 were issued to the
vendors of TRA at a value of 151p each for a total consideration of £1,412,000 as part of the deferred
consideration settlement.
On 26 July 2004, 765,598 warrants were exercised over an equivalent number of new Ordinary Shares of 10p
each for a total nominal value of £76,560. They were issued at a value of 131p each for a total consideration of
£1,003,000.
On 3 September 2004, 1,349,549 Ordinary Shares of 10p each for a total nominal value of £134,955 were issued
to the vendors of CML Research at a value of 138p each for a total consideration of £1,806,000 as part of the
consideration for the acquisition.
On 30 September 2004, 70,000 warrants were exercised over an equivalent number of new Ordinary Shares of
10p each for a total nominal value of £7,000. They were issued at a value of 95p each for a total consideration of
£66,500.
On 9 March 2005, 2,697,439 Ordinary Shares of 10p each for a total nominal value of £269,743 were issued to
the vendors of the DLKW group at a value of 148.4p each for a total consideration of £4,003,000 as part of the
consideration for the acquisition.
On 9 March 2005, 7,048,164 Ordinary Shares of 10p each for a total nominal value of £704,816 were issued 
at a value of 145p each for a total consideration of £10,220,000 under the Placing and Open Offer of 
7 February 2005.
70472 Creston RAccs Pt3  1/7/05  11:43  Page 54 55
Options and warrants
The Group has the following warrants and options in issue:
Number of options
At start At end
of year Granted Lapsed Exercised of year
Sharesave Scheme – 368,163 (10,394) – 357,769
EMI Scheme – 283,818 – – 283,818
Other 1,479,593 795,902 – (70,000) 2,205,495
1,479,593 1,447,883 (10,394) (70,000) 2,847,082
Sharesave Scheme
At the Company’s AGM on 29 July 2004, the shareholders approved and adopted the Creston plc Sharesave
Scheme (“Sharesave Scheme”). This scheme permits any employee of the Company or its subsidiaries (who is
resident in the UK) to enter into a savings contract which will mature in a specified period of time (being three
years for the current scheme) at which date the employee can use the funds to exercise options granted to them
under this scheme. The purpose of this scheme was to ensure that all employees were given the opportunity to
participate in the future of the Group.
Pursuant to this scheme an offer to employees was made and on 8 September 2004 options over a total of
368,163 ordinary shares at 136 pence per share were issued to 112 employees representing 42 per cent. of all
employees entitled to participate (including 6,930 each to Mr D H Elgie and Mr T B Alderson). These options are
exercisable from 8 September 2007. Since they were issued some employees have left the Group causing 10,394
options to lapse (including Mr T B Alderson).
It is proposed that following the AGM a further offer to employees will be made under this scheme.
EMI Scheme
At the Company’s AGM on 29 July 2004, the shareholders approved and adopted the Creston plc Enterprise
Management Incentive Scheme. The purpose of this scheme was to incentivise certain key employees.
Consequently these options are linked to performance targets for both the Group and the individual. The following
awards were made under the terms of this scheme:
Number of options Exercise price Exercise period
Mr B C Brien 70,422 142p 30.09.2007 30.09.2014
Other staff 213,396 150p 30.11.2007 30.11.2014
283,818
The Company has agreed to issue a further 223,000 options to key employees following the release of the 2005
results.
Other options and warrants
Additional options over 1,740,751 Ordinary Shares have been granted to Mr D H Elgie and over 150,000 Ordinary
Shares to Mr B C Brien. Details of these option arrangements are given in the Directors’ Remuneration Report.
On 29 January 2001 the Company issued warrants to Kerburn Rose. By 31 March 2004, 157,826 of these
warrants were outstanding giving Kerburn Rose the ability to subscribe for an equivalent number of new Ordinary
Shares at a price of 96 pence per share. During the year 70,000 of these warrants were exercised leaving 87,826
warrants outstanding at 31 March 2005. Since that date the remaining warrants have been exercised.
New incentive schemes
The Company proposes new long term incentive schemes for consideration by shareholders at the AGM. The
terms of these proposals are discussed in the Directors’ Remuneration Report.
Annual Report and Accounts 2005
Creston Plc
70472 Creston RAccs Pt3  1/7/05  11:43  Page 55 Annual Report and Accounts 2005
56
Creston Plc
23 RESERVES
Group
Share premium Other Profit and
account reserves loss account
£’000 £’000 £’000
At 1 April 2004 9,083 8,176 1,809
Issue of Ordinary Shares on deferred consideration of TRA – 1,319 –
Issue of Ordinary Shares on acquisition of CML Research – 1,671 –
Issue of Ordinary Shares on acquisition of the DLKW Group – 3,733 –
Issue of Ordinary Shares on Placing and Open Offer 9,515 – –
Issue of Ordinary Shares on exercise of warrants 986 – –
Costs of share issues (416) – –
Retained profit for the financial year – – 1,956
A At t  3 31 1  M Ma ar rc ch h  2 20 00 05 5 1 19 9, ,1 16 68 8 1 14 4, ,8 89 99 9 3 3, ,7 76 65 5
Company
At 1 April 2004 9,083 8,176 2,601
Issue of Ordinary Shares on deferred consideration of TRA – 1,319 –
Issue of Ordinary Shares on acquisition of CML Research – 1,671 –
Issue of Ordinary Shares on acquisition of the DLKW Group – 3,733 –
Issue of Ordinary Shares on Placing and Open Offer 9,515 – –
Issue of Ordinary Shares on exercise of warrants 986 – –
Costs of share issues (416) – –
Retained profit for the financial year – – 1,819
A At t  3 31 1  M Ma ar rc ch h  2 20 00 05 5 1 19 9, ,1 16 68 8 1 14 4, ,8 89 99 9 4 4, ,4 42 20 0
As permitted by Section 230 of the Companies Act 1985, the Company has not presented its own profit and loss
account. The profit for the financial year relating to the parent Company amounted to £2,503,000 (2004:
£2,036,000).
Other reserves are made up of Special reserve £2,385,000, Other reserve £12,442,000 and Capital Redemption
reserve £72,000.
24 SHARES TO BE ISSUED
Group and Company
2005
£’000
At 1 April 2004 3,979
Accrued for acquisitions 7,037
A At t  3 31 1  M Ma ar rc ch h  2 20 00 05 5 1 11 1, ,0 01 16 6
The shares to be issued mature in respect of the results of companies acquired during their earn-out period. They
are due for issue on the maturity dates shown in note 17.
25 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS’ FUNDS
Group
2005 2004
£’000 £’000
At 1 April 25,254 10,536
Profit for the year 2,640 1,449
Dividend (684) (332)
27,210 11,653
Shares issued on acquisitions 7,220 2,250
Shares issued for cash considerations 10,220 4,561
Shares issued on conversion of loan notes – 2,915
Shares issued on exercise of warrants 1,070 189
Share issue costs (416) (293)
Shares to be issued on acquisitions 7,037 3,979
At 31 March 2005 52,341 25,254
Notes to the Financial Statements continued
for the year ended 31 March 2005
Creston Plc
70472 Creston RAccs Pt3  1/7/05  11:43  Page 56 57
26 RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES
Group
2005 2004
£’000 £’000
Operating profit 3,680 2,357
Depreciation 488 384
Profit on disposal of plant, vehicles and equipment (6) (2)
Decrease/(increase) in stock and work in progress 264 (126)
(Increase)/decrease in debtors (832) 223
Increase in creditors 1,336 221
Net cash inflow from operating activities 4,930 3,057
27 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET (DEBT)/FUNDS
2005 2004
£’000 £’000
Increase in cash in the year 1,503 1,568
Cash outflow from reduction in debt 6,663 1,556
Cash inflow from increase in debt (11,284) –
Movement in (net debt)/funds in the year resulting from cash flows (3,118) 3,124
New finance leases (341) (153)
Reduction of loan stock – 2,915
Issue of acquisition loan notes – (319)
Net funds/(debt) at 1 April 2004 49 (5,518)
Net (debt)/funds at 31 March 2005 (3,410) 49
28 ANALYSIS OF NET (DEBT)/FUNDS
At At
1 April Non-cash 31 March
2004 Cash flow Acquisitions items 2005
£’000 £’000 £’000 £’000 £’000
Cash at bank and in hand 3,858 1,499 – – 5,357
Overdrafts (4) 4 – – –
3,854 1,503 – – 5,357
Acquisition loan notes (402) 340 – – (62)
Bank loans (3,199) (5,085) – – (8,284)
Finance leases (204) 124 (304) (37) (421)
Net (debt)/funds 49 (3,118) (304) (37) (3,410)
Restricted cash deposits (note 15) 302 (240) – – 62
Net (debt)/funds including restricted cash deposits 351 (3,358) (304) (37) (3,348)
Short term bank deposits of less than one month are classified as liquid resources.
29 CAPITAL COMMITMENTS
There were no capital commitments at 31 March 2005 (2004: £Nil).
30 DIRECTORS’ INTERESTS IN TRANSACTIONS AND SHARES
Mr D C Marshall is a director of City Group P.L.C. and Western Selection P.L.C. which held 2,873,998 Ordinary
Shares on 31 March 2005. During the year total fees of £36,360 (2004: £38,599) were paid to City Group P.L.C.,
£20,360 (2004: £22,599) for the provision of secretarial services and assistance on the acquisitions and £16,000
(2004: £16,000) for the services of Mr D C Marshall.
Annual Report and Accounts 2005
Creston Plc
70472 Creston RAccs Pt3  1/7/05  11:43  Page 57 Annual Report and Accounts 2005
58
Creston Plc
Year ended 31 March
2005 2004 2003 2002
(1)
2001
£’000 £’000 £’000 £’000 £’000
Group profit and loss account
Turnover from continuing activities (marketing) 35,870 29,453 18,636 9,810 1,168
Turnover from discontinued activities (property) – – – – 1,454
Profit on ordinary activities before taxation 3,504 2,088 912 207 1
Tax on profit on ordinary activities (864) (639) (197) (69) 59
Profit for the financial period 2,640 1,449 715 138 60
Basic earnings per share (pence) 10.72 9.03 6.38 1.23 0.61
Basic earnings per share prior to 
exceptional items (pence) 10.72 9.03 6.38 1.23 0.10
Dividends per share (pence) 2.15 1.80 1.40 0.70 –
Group balance sheet
Fixed assets 65,967 26,595 19,671 16,539 10,158
Net current assets 2,570 2,170 2,268 1,689 6,358
Total assets less current liabilities 68,537 28,765 21,939 18,228 16,516
Amounts falling due after more than one year (16,196) (3,511) (11,403) (8,250) (6,599)
Net assets and total equity shareholders’ funds 52,341 25,254 10,536 9,978 9,917
Note 1: The accounts for the year ended 31 March 2002 were restated to reflect the adoption of a new accounting policy in respect of deferred taxation
as required by FRS 19.
Five Y ear Summary
70472 Creston RAccs Pt3  1/7/05  11:43  Page 58 59
Annual Report and Accounts 2005
Creston Plc Creston Plc
Long Term Incentive Plan (“LTIP”)
LONG TERM INCENTIVE PLAN (“LTIP”)
Structure of award
Participants will be awarded a contingent right to receive ordinary shares in the Company subject to certain
restrictions set out in the rules of the LTIP. On vesting, shares will be transferred to participants by the Trustee of the
Trust (described below).
Eligibility
Participation in the LTIP will be at the discretion of the Remuneration Committee. Only employees and full-time
directors of group companies may participate in the LTIP. It is intended that the initial participants will be the
Company’s Chief Executive Officer (“CEO”) and Chief Operating and Financial Officer (“CFO/COO”) and senior
employees in the Company’s operating subsidiaries.
The Awards
Awards may be granted at any time when doing so would not be in breach of the Model Code or any other relevant
statute or regulation. In particular, it is intended that awards will be made to the CEO, COO/CFO on the announcement
of the acquisition of a company or business. It is intended that the value of awards made to the CEO, CFO/COO will be
equal to a percentage of the value of the consideration paid on the acquisitions referred to above. The value of the
awards will be 1.35 per cent. for the CEO and 0.65 per cent. for the COO/CFO. The COO/CFO will not receive awards
in respect of transactions prior to his appointment.
Shares transferred to participants will rank equally with other ordinary shares and will be admitted to the Official List.
Participants will not be entitled to receive dividends prior to the vesting of their awards, however, they will receive a
cash payment equal to the dividend they would have received had they been entitled to receive the dividend.
No awards may be made more than 10 years after the LTIP is approved.
Awards vest and shares will be transferred to participants three years after their grant, provided and to the extent that
the performance targets have been achieved.
Performance Targets
The performance targets will be set by the Remuneration Committee. Initially the performance target will be based on
the Company achieving average growth in diluted earnings per share (“EPS”) for three consecutive financial years in
excess of the industry average. The industry average will be the average diluted EPS of a group of comparator
companies chosen by the Remuneration Committee (having taken appropriate advice). The Remuneration Committee
considers the following targets to be challenging and demanding:
The first financial year of a performance period will be the financial year in which the award is granted.
To the extent that the performance targets are not met, awards will lapse and the relevant number of shares will not
be transferred to the participant. There is no re-testing of the performance criteria, except in respect of the impact of
IFRS on historical reported diluted EPS.
Cessation of Employment
In normal circumstances, awards will lapse if a participant ceases to be employed within the Group. However, in
certain “good leaver” situations (such as illness, disability, redundancy, retirement etc), or in other exceptional
circumstances, the Remuneration Committee will have a discretion to determine whether and to what extent awards
vest, taking into account the performance of the Company up to the date of cessation.
The average growth in diluted EPS for 3 consecutive
finanancial years has exceeded industry average by: % of awarded shares vesting:
Below 5% 0
5% or greater but less than 6% 30%
6% or greater but less than 7% 40%
7% or greater but less than 8% 55%
8% or greater but less than 9% 65%
9% or greater but less than 10% 75%
10% or greater but less than 11% 80%
11% or greater but less than 12% 90%
12% and above 100%
70472 Creston RAccs Pt4  1/7/05  11:44  Page 59 60
Creston Plc
Annual Report and Accounts 2005
LTIP Limits
The number of newly issued shares that may be allocated under the LTIP (and any other employees’ share scheme
adopted by the Company) will be limited to 10 per cent. of the issued share capital in a ten year period (excluding any
shares so allocated prior to the Company’s move from property to marketing services, in January 2001). Shares
purchased in the market, rather than issued, will not count towards these limits. The value of shares which are made
the subject of awards made to the CEO, COO/CFO must not exceed 4.2 (CEO) and 3 (COO/CFO) times their respective
base salaries in any three year period. In all other cases, awards over shares worth no more than 1 x base salary may
be made each year to a participant.
Change of control
It is proposed that on a change of control of the Company the awards will vest, subject to the extent to which the
Remuneration Committee considers the performance targets have been satisfied up to the change of control and the
awards will be time apportioned for the period between date of grant and change of control.
Amendments to the LTIP
The Remuneration Committee may at any time amend the LTIP in any respect providing that any amendment to the
rules dealing with who is eligible to participate, individual or LTIP limits cannot be altered to the advantage of
participants unless approved by the Company in general meeting (except for minor amendments to benefit the
administration of the LTIP or to take account of changes in legislation or to obtain or maintain favourable taxation,
exchange control or regulatory treatment for the Company, the Group or for a participant).
Overseas LTIP
The LTIP provides that additional sections of the rules may be adopted for participants outside of the UK. Awards
granted under such additional sections may be granted subject to different terms and conditions in order to take
account of local laws. However, additional sections must conform to the basic principles of the LTIP and must not
increase the limits set out in the LTIP.
Pension
Awards under the LTIP are not pensionable.
The Trust
The Trust will be established by a trust deed entered into between the Company and an independent trustee resident
in the Channel Islands (the “Trustee”). The Trust will be a discretionary trust for the benefit of employees and former
employees (and their dependants) of the Group (“Beneficiaries”). The Company has the power to appoint and remove
the Trustee.
The Trustee will be entitled to subscribe for or otherwise acquire shares for the benefit of Beneficiaries and will be
able to distribute these shares under the terms of Trust either directly or in accordance with the rules of any
employees’ share schemes established by the Company. It is currently intended that the Trustee will satisfy awards
under the LTIP and will not be able to vote those shares held in the Trust.
It is intended that the Trust may be funded by any company including the Company or any Group Company by means
of gift, loan or otherwise.
If the Trustee subscribes for shares on the vesting of awards, the limits on the number of shares which can be
subscribed for by the Trustee will be that set out in the rules of the LTIP. The Trustee will not be entitled to hold more
than 5 per cent. of the issued share capital of the Company in the trust fund.
It is intended that the terms of the Trust will be amended at the discretion of the Trustee and with the consent of the
Company. The Company will not be entitled to consent to any amendment to the advantage of Beneficiaries without
the prior approval of the Company in general meeting unless the amendment is minor to benefit the administration of
the Trust, to take account of any changes in legislation or to obtain or to maintain favourable taxation, exchange
control or regulatory treatment for any Beneficiary or the Company or any of its subsidiaries.
Long Term Incentive Plan (“LTIP”) continued
70472 Creston RAccs Pt4  1/7/05  11:44  Page 60 61
Annual Report and Accounts 2005
Creston Plc
NOTICE IS HEREBY GIVEN that the seventy-seventh annual general meeting of Creston Plc (the “Company”) will be
held at The Sofitel St James Hotel, 6 Waterloo Place, London SW1Y 4AN on Thursday, 28 July 2005 commencing at
12 noon for the following purposes.
Ordinary business
To consider the following, which will be proposed as Ordinary Resolutions:
1. To receive, approve and adopt the Company’s Annual accounts for the financial year ended 31 March 2005,
together with the Directors’ report and auditor’s report on those accounts.
2. To declare a final dividend of 1.45 pence per Ordinary Share for the year.
3. To receive the Directors’ Remuneration Report for the financial year ended 31 March 2005.
4. To elect Mr B C Brien as a Director
5. To re-elect Mr P J Cunard as a Director
6. To reappoint the auditors Grant Thornton UK LLP.
Special business
To consider and, if thought fit, pass the following resolutions, of which resolutions 7 and 8 will be proposed as
ordinary resolutions and resolutions 9, 10 and 11 will be proposed as special resolutions:
7. THAT:
7.1 the Creston Plc Long Term Incentive Plan which is summarised on pages 59 to 60 of the annual report
and accounts of the Company for the year ended 31 March 2005 and is now produced to the Meeting be
and is hereby approved and that the directors be and are hereby authorised to take all steps which they
consider necessary or expedient to establish and carry the Creston Plc Long Term Incentive Plan into
effect; and
7.2 the Creston Plc Employee Benefit Trust which is summarised on pages page 60 of the annual report and
accounts of the Company for the year ended 31 March 2005 be and is hereby approved and that the
directors be and are hereby authorised to take all steps which they consider necessary or expedient to
establish and carry the Employee Benefit Trust into effect.
8. THAT:
8.1 the Directors be generally and unconditionally authorised under section 80 of the Companies Act 1985
(the “Act”) to exercise all the powers of the Company to allot relevant securities (as defined in that
section) up to an aggregate nominal amount of £2,333,000;
8.2 this authority shall expire (unless previously revoked by the Company) at the conclusion of the annual
general meeting of the Company to be held in 2006, or, if earlier, 15 months after the date on which this
resolution is passed;
8.3 the Company may make an offer or agreement before this authority expires which would or might require
relevant securities to be allotted after it has expired and may allot relevant securities under any such offer
or agreement notwithstanding that this authority has expired; and
8.4 all previous authorities to allot relevant securities, to the extent unused, be revoked.
9. THAT:
9.1 subject to the passing of resolution 8, the Directors shall have the power under section 95 of the
Companies Act 1985 (the “Act”) to allot equity securities (as defined in section 94 of the Act) for cash
under the authority conferred by resolution 8 as if section 89(1) of the Act did not apply to the allotment;
9.2 this power shall be limited to:
9.2.1 the allotment of equity securities in connection with an offer or issue of such securities to holders of
Ordinary Shares on the register on a date fixed by the Directors, whether by way of rights issue,
open offer or otherwise, in proportion (as nearly as practicable) to their respective holdings on that
date or in accordance with the rights attached to them but subject to such exclusions and other
arrangements as the Directors may consider appropriate in relation to fractional entitlements or any
legal or practical problems under the laws of any territory, or the requirements of any regulatory
body or stock exchange; and
Notice of Annual General Meeting
70472 Creston RAccs Pt4  1/7/05  11:44  Page 61 62
Creston Plc
Annual Report and Accounts 2005
9.2.2 the allotment (other than under paragraph 9.2.1 above) of equity securities having, in the case of
relevant shares (as defined for the purposes of section 89 of the Act), a nominal amount or, in the
case of other equity securities, giving the right to subscribe for or convert into relevant shares having
a nominal amount, not exceeding in aggregate £174,654;
9.3 this power shall expire with the authority given by resolution 8;
9.4 the Company may make an offer or agreement before this authority expires which would or might require
equity securities to be allotted after it expires and the directors may allot equity securities under that offer
or agreement notwithstanding that the authority has expired; and
9.5 this power applies in relation to a sale of shares which is an allotment of equity securities by virtue of
section 94(3A) of the Act as if in paragraph 9.1 the words “under the authority conferred by resolution 8”
were omitted.
10. THAT the Company is hereby generally and unconditionally authorised to make one or more market purchases
(within the meaning of section 163(3) of the Companies Act 1985) of Ordinary Shares of 10 pence each of the
Company provided that:
10.1 the maximum aggregate number of Ordinary Shares which may be purchased under this authority is
3,493,091 (representing 10 per cent. of the Company’s issued Ordinary Share capital);
10.2 the minimum price which may be paid for each Ordinary Share is 10 pence per share;
10.3 the maximum price (exclusive of expenses) which may be paid for an Ordinary Share is an amount equal
to 105 per cent. of the average of the middle market quotations for the Company’s Ordinary Shares as
derived from the London Stock Exchange Daily Official List for the five business days immediately
preceding the day on which such Ordinary Share is purchased;
10.4 this authority shall expire at the conclusion of the annual general meeting of the Company to be held in
2006, or, if earlier, 15 months after the date on which this resolution is passed; and
10.5 the Company may make a contract or contracts to purchase Ordinary Shares under this authority prior to
the expiry of such authority which will or may be executed wholly or partly after the expiry of such
authority and may make a purchase of Ordinary Shares in pursuance of any such contract or contracts.
11. THAT the draft Articles of Association in the form produced to the meeting and signed for identification purposes
only by the Chairman be adopted as the articles of association of the Company in substitution for all existing
articles of association of the Company.
By order of the Board Registered Office
City Group P.L.C. 25 City Road
Secretary London
21 June 2005 EC1Y 1BQ
Notes:
1. A member entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend and, on a poll, to vote in his or her stead.
A proxy need not be a member of the Company. A form of Proxy is enclosed with this Notice for use at the meeting.
2. To be valid, the instrument appointing the proxy (together with the Power of Attorney or other authority, if any, under which it is signed or a
notarially certified copy of such Power or authority) must be deposited at or posted to the Company’s registrars, Capita Registrars, Proxy
Department, PO Box 25, Beckenham, Kent BR3 4BR to be received not later than 48 hours before the time fixed for the meeting. Completion and
return of the Form of Proxy will not preclude shareholders from attending or voting at the meeting in person.
3. Copies of the following documents will be available for inspection during normal business hours on any weekday (Saturdays and public holidays
excepted) at the Company’s registered office 25 City Road, London EC1Y 1BQ from the date of this Notice up to and including 28 July 2005 and,
at the place of the meeting, 15 minutes prior to and during the annual general meeting:
(i) The Memorandum and Articles of Association of the Company;
(ii) The Register of Directors’ Interests in the shares of the Company kept in accordance with Section 325 of the Companies Act 1985;
(iii) The Directors’ service contracts, and the Non-Executive Director’s terms and conditions of appointment;
(iv) The draft Articles of Association proposed to be adopted pursuant to resolution 11; and
(v) The draft rules of the Creston plc Long Term Incentive Plan.
The Board of Directors of the Company reserves the right to make amendments to the draft rules of the Creston plc Long Term Incentive Plan at
any time prior to the meeting as it considers appropriate provided that such amendments do not conflict in any material respect with the summary
of the rules of the Creston plc Long Term Incentive Plan set out on pages 59 to 60 of the Annual Report and accounts of the Company for the
year ended 31 March 2005.
Notice of Annual General Meeting continued
!
70472 Creston RAccs Pt4  1/7/05  11:44  Page 62 Creston Plc
Creston Plc
We ___________________________________________________________________________________________
of ____________________________________________________________________________________________
______________________________________________________________________________________________
being (a) member(s) of the above named company hereby appoint the Chairman of the Meeting, failing whom
______________________________________________________________________________________________
as my/our proxy to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held on
28 July 2005 and at any adjournment thereof.
I/We hereby authorise and instruct my/our said proxy to vote as indicted below on the resolutions to be proposed
at such meeting. Unless otherwise directed the proxy will vote or abstain from voting as he/she thinks fit.
Date ___________________________________2005 Signature_________________________________________
Notes
1) To be valid the instrument appointing the proxy (together with the Power of Attorney or other authority, if any, under which it is signed or a notarially
certified copy of such Power of authority) must be deposited at or posted to the Company’s registrars, Capita Registrars, Proxy Department, PO
Box 25, Beckenham, Kent BR3 4BR to be received not later than 48 hours before the time fixed for the meeting. Completion and return of the
Form of Proxy will not preclude shareholders from attending and voting at the meeting in person.
2) In the case of a Corporation, this proxy should be given either under its common seal or, if none, should be signed by an attorney or officer duly
authorised.
3) In the case of joint holders the vote of the senior who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the votes
of the other joint holders. For this purpose seniority is determined by the order in which the names stand in the Register of shareholders in respect
of the joint holding.
4) If it is desired to appoint as proxy any person other than the Chairman of the meeting, the name and address of such person should be inserted
in the relevant place, reference to the Chairman deleted and the alteration initialled.
5) A proxy need not be a shareholder.
Resolutions For Against
Ordinary Business
Ordinary Resolutions
1. To receive the Directors’ Report and Accounts
2. To declare a final dividend of 1.45p for the year
3. To receive the Directors’ Remuneration Report
4. To elect Mr B C Brien as a Director
5. To re-elect Mr P J Cunard as a Director
6. To re-appoint Grant Thornton as auditors
Special Business
Ordinary Resolutions
7. To approve the Creston Plc Long Term Incentive Plan and authorise 
the Directors to establish the Creston Plc Employee Benefit Trust
8. To authorise the Directors to allot securities (within the meaning of Section 80 of 
the Companies Act 1985) up to an aggregate nominal amount of £2,310,000
Special Resolutions
9. To authorise the Directors to allot securities (subject to limitations) as if the 
pre-emption rights did not apply up to an aggregate nominal value of £174,654
10. To authorise the Company to make market purchases of its own shares
11. To adopt the new Articles of Association of the Company in substitution for all 
existing Articles of Association
Proxy Form
!
Annual Report and Accounts 2005
70472 Creston RAccs Pt4  1/7/05  11:44  Page 63 Second Fold
Third Fold (Tuck-in)
Capita Registrars
Proxy Department
PO Box 25
Beckenham
Kent
BR3 4BR
First Fold
BUSINESS REPLY SERVICE
License No. MB122
1 1
70472 Creston RAccs Pt4  1/7/05  11:44  Page 64 Head office:
30-35 Pall Mall
London
SW1Y 5LP
Tel: 020 7930 9757
Fax: 020 7930 8727
Secretary and Registered office:
City Group P.L.C.
25 City Road
London
EC1Y 1BQ
Bankers:
Barclays Bank Plc
27 Soho Square
London
W1A 4WA
Auditors:
GrantˇThornton UK LLP
1 Westminster Way
Oxford
OX2 0PZ
Stockbrokers:
Charles Stanley & Co. Limited
25 Luke Street
London
EC2A 4AR
Registrars:
Capita Registrars
Northern House
Woodsome Park
Fenay Bridge
Huddersfield
HD8 0LA
Tel: 0870 162 3131
Fax: 01484 600912
Company registration number: 210505
Annual Report and Accounts 2005
Creston Plc
Project3  1/7/05  11:36  Page 3 Creston plc
30-35 Pall Mall
London
SW1Y 5LP
T: +44 (0) 20 7930 9757
F: +44 (0) 20 7930 8727
www.creston.com
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