LAYING THE
FOUNDATIONS
FOR GROWTH
ANNUAL REPORT & ACCOUNTS
YEAR ENDED 26 SEPTEMBER 2004   2
FINANCIAL HIGHLIGHTS:
CONTENTS
Financial Highlights 2
Financial Calendar 3 
Chairman’s Statement 4
Chief Executive’s Strategy Review 6 
Operating Review 10
Financial Review 15
Board of Directors 18
Report of the Directors 20
Statement on Corporate and Social 
Responsibility 21
Corporate Governance 23
Report on Directors’ Remuneration 26
Statement of Directors’ Responsibility 30
Independent Auditors’ Report 31
Accounting Policies 32
Consolidated Proﬁt and Loss Account 34
Balance Sheets 35
Consolidated Cash Flow Statement 36
Other Statements 37
Notes to the Accounts 38
Shareholder Information 61
Advisers to De Vere Group Plc 62
Property Locations 63
 Turnover Operating Profit* ROCE*
 
 2004 2003 % 2004 2003 % 2004 2003 %pts
 £m £m change £m £m change % % change
 188.0 183.2 +2.6 36.9 34.9 +5.8 6.9 6.3 +0.6
 Turnover Operating Profit* ROCE*
 
 2004 2003 % 2004 2003 % 2004 2003 %pts
 £m £m change £m £m change % % change
 73.8 71.8 +2.9 15.8 15.6 +1.2 8.0 8.4 –0.4
 Turnover Operating Profit* ROCE*
 
 2004 2003 % 2004 2003 % 2004 2003 %pts
 £m £m change £m £m change % % change
 31.2 30.3 +3.0 3.5 2.3 +49.2 5.8 3.8 +2.0
 Turnover Operating Profit* ROCE*
 
 2004 2003 % 2004 2003 % 2004 2003 %pts
 £m £m change £m £m change % % change
 28.8 26.9 +6.9 1.5 1.9 –22.6 25.8 56.3 –30.5
* Excluding exceptional items
I DE VERE GROUP PLC I FINANCIAL HIGHLIGHTS
Return On Capital Employed (ROCE) 3
FINANCIAL CALENDAR 
 
Annual General Meeting 25 February 2005
Payment of Final Dividend 4 March 2005
Announcement of Interim Results  May 2005
Payment of Interim Dividend June 2005
Preliminary Announcement of Annual Results  November 2005
      2004 2003 
      £m £m % change
Turnover     321.8 312.2 +3.1
EBITDA*     81.2 78.2 +3.8
Operating profit*    57.6 54.7 +5.4
Return on capital employed (%)*  7.2 6.8 0.4pts
Profit before tax*    45.6 39.7 +14.7
Profit before tax    41.6 30.8 +35.1
Basic EPS* (pence)    27.98 24.50 +14.2
Total dividend per share (pence)  13.10 11.70 +12.0
* Excluding exceptional items
 FINANCIAL HIGHLIGHTS I ANNUAL REPORT & ACCOUNTS 2004 I The hotel market in the UK has 
strengthened compared to the previous 
ﬁnancial year. This has been particularly 
noticeable in the London market and in 
improved provincial demand from corporate 
single sleepers. Recovery in the conference 
market tends to lag behind these indicators. 
The leisure market remained buoyant 
throughout the period.
Group turnover for the year increased 
by 3.1% to £321.8m (2003: £312.2m) 
and operating proﬁt on a pre-exceptional 
basis was up by 5.4% to £57.6m (2003: 
£54.7m). Return On Capital Employed 
(ROCE) increased by 0.4%pts to 7.2% on 
a pre-exceptional basis. Proﬁt before tax, 
excluding exceptional items, was up by 
14.7% to £45.6m (2003: £39.7m). 
Dividend
The Board is recommending a ﬁnal dividend 
of 8.82 pence per Ordinary share. The ﬁnal 
dividend together with the interim dividend, 
of 4.28 pence per Ordinary share, makes a 
total of 13.10 pence (2003: 11.70 pence) 
an increase of 12%.
People
Signiﬁcant progress has been made 
during the year to enhance development 
programmes for all our employees as it is 
their contribution that drives the success 
of our business. New performance review 
programmes are now in place to assist in 
each staff member’s ongoing development 
and the teamwork structure has also been 
enhanced to support the achievement of 
both personal and Company objectives. On 
behalf of the Board, I would like to thank 
all our staff for their contribution to the 
businesses.
 4 I DE VERE GROUP PLC I CHAIRMAN’S STATEMENT
CHAIRMAN’S STATEMENT:
TURNOVER CAPITAL INVESTMENT 2004
The Board is delighted with the progress that has been made since the 
appointment of Carl Leaver a year ago, particularly on the development and 
implementation of the Group’s new strategy. This has been achieved against a 
backdrop of defending an unwelcome partial offer from GPG earlier this year, 
which was expensive both ﬁnancially and in terms of management time.
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Current trading and outlook
During the ﬁrst nine weeks of the new 
ﬁnancial year total Group turnover has 
increased by 1.6% on the same period in 
2003/04.
Like-for-like turnover at De Vere excluding 
De Vere Resort Ownership (DVRO) 
increased by 4.7%. RevPAR on the same 
basis grew 4.0%, with the De Vere 
Cavendish (now like-for-like) achieving 89% 
occupancy and beginning to beneﬁt from 
the implementation of our new approach 
to pricing.
In DVRO, advance sales at The Carrick 
continue to give great cause for optimism 
and now stand at £4.2 million. New 
lodges are also being built at De Vere 
Slaley Hall and De Vere Belton Woods. 
All lodges currently under construction 
will be completed by Spring 2005 so that 
all advance sales will ﬂow into this year’s 
results.
Excluding advance sales at DVRO total 
turnover for De Vere was 0.1% down 
on prior year, also impacted by the 
completion of the sale of the Bellhouse 
on 1 November 2004 and continued 
challenging trading at the Dormy ahead 
of its closure later this month.
Like-for-like sales at Village were ahead by 
7.8% with RevPAR up by 5.5%, driven by 
increased average room rates.
Like-for-like leisure membership was up 
strongly in both Village and Greens by 
7.7% and 9.2% respectively, with Greens 
turning in a very respectable like-for-like 
sales growth of 5.4%.
Total turnover for Village was ahead 8.9%, 
with early trading at Village Maidstone 
more than offsetting the loss of Swindon 
and Prestwich.
Improved trading and management 
action to improve efﬁciency are having a 
beneﬁcial impact on like-for-like margins in 
both hotel brands. We expect to maintain 
progress, notwithstanding signiﬁcant 
increases in energy costs and, potentially, 
property tax following the rating re-
valuation later in the year.
We continue to see improvements in 
corporate demand, although, as yet, 
recovery in the conference market is 
proving elusive. The leisure market remains 
robust. Encouraged by current trading 
and our strategic progress we believe the 
prospects for the year to be good.
THE LORD DARESBURY
Non-executive Chairman
 CHAIRMAN’S STATEMENT I ANNUAL REPORT & ACCOUNTS 2004 I
TOTAL SALES TOTAL LEISURE MEMBERSHIP
The foundations are now being built to 
push forward our growth aspirations, whilst 
ensuring that our assets, systems and 
procedures are enhanced to deliver the 
highest possible return for our shareholders.
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���� ���� ���� ���� ���� I DE VERE GROUP PLC I CHIEF EXECUTIVE’S STRATEGY REVIEW
CHIEF EXECUTIVE’S
STRATEGY REVIEW: 
It is now more than a year since I joined  
De Vere, and six months since I 
presented the Group’s new strategy. We 
have achieved a lot in this time, laying 
the foundations that will underpin the 
achievement of our clear ﬁnancial target of 
a 10% return on capital employed by the 
end of the 2006/07 ﬁnancial year. Delivery 
of this target will be driven by the four key 
strands of our strategy: Leveraging our 
strong brands, implementing operational 
excellence, accelerating Village growth and 
improving De Vere returns.
•  Strengthening our brands to drive customer 
loyalty and extend operating premium over 
peers.
•   Developing our CRM capability to reach 
speciﬁc customer segments and drive higher 
response rates from marketing spend.
•  Investing in leading-edge reservation and revenue 
management systems to maximise our global 
distribution.
•  Driving best practice across our brands to 
increase efﬁciencies and reduce costs.
BRANDS OPERATIONAL EXCELLENCE
 6  CHIEF EXECUTIVE’S STRATEGY REVIEW I ANNUAL REPORT & ACCOUNTS 2004 I
Leveraging our strong brands
We are now taking a far more scientiﬁc 
approach to brand strategy and customer 
relationship management (CRM). We 
have conducted in-depth research into 
the factors driving customer preference 
and have analysed the brand attributes 
that drive higher returns. The result of 
this is a clear understanding of what 
differentiates our brands from competitors, 
allowing us to put customers at the heart 
of our decision making and to channel 
investment and effort into higher yielding 
initiatives.
An early result of this analysis has been 
a shift in De Vere’s advertising strategy 
away from brand awareness campaigns, 
the precise beneﬁts of which are difﬁcult 
to quantify, towards more targeted and 
highly measurable ‘call to action’ CRM 
marketing. We have segmented our two 
million strong customer database to drive 
progressively higher response rates with  
the aim of ensuring that we maximise the 
return from our marketing spend.
At Village our enhanced insight into the 
brand has already led to a re-evaluation 
of the Village site design, allowing us 
to save over £2 million on current build 
cost whilst at the same time improving 
the unique customer experience. This 
has enabled the Group to pursue a more 
aggressive roll-out strategy.
Implementing operational excellence
Several initiatives are being implemented 
to improve operational performance and 
efﬁciencies across the Group. These will 
have increasing importance and add real 
competitive advantage as we implement 
our aggressive growth plans.
More than £2 million is being invested 
in 2004/05 in a leading edge reservation 
system. This will provide the Group with a 
system delivering real time availability and 
price parity across all booking channels, 
whether direct to hotel or via central 
reservations, the internet or third parties. 
This means that more people will be 
able to book more of our hotels in more 
ways, maximising booking opportunities 
by giving access to multiple channels. In 
addition, increased efﬁciency and reduced 
transaction costs will build to a saving 
of £0.75 million per annum by 2006/07. 
Village and the De Vere Cavendish St. 
James’s will go live on this system in 
December 2004, with the rest of De Vere 
Hotels following in March 2005.
We have appointed a talented new team 
to develop our revenue management 
capability and will be piloting a new IT 
system early in 2005, with full roll-out 
across De Vere Hotels and Village targeted 
by the end of the calendar year. We believe 
that this has the potential to increase 
RevPAR by 3-4% by 2006/07.
•  Accelerating the Village roll-out to four or ﬁve new 
sites per annum from 2006/07.
•    Increasing room stock at existing sites where 
demand is sufﬁcient to drive high returns.
•  Developing existing hotels where high returns 
are achievable through bedroom extensions, 
additional facilities and De Vere Resort Ownership.
•  Growing the brand primarily through low-capital 
intensive routes, such as management contracts. 
•  Disposing of hotels where acceptable returns 
cannot be achieved.
VILLAGE GROWTH DE VERE RETURNS
7
TARGETING 10% 
RETURNS BY 2006/07  8
We have also completed the roll-out of 
Delphi MPE, the leading conference and 
events booking system. At present De Vere 
has a signiﬁcant level of frustrated demand 
and this system will enable us to refer 
bookings across the Group, so capturing 
business that has previously been lost.
We are beginning to drive measurable 
synergy beneﬁts across the business by 
sharing best practice and leveraging our 
scale. We are targeting annual savings of 
£3 million by the end of 2006/07 through 
improved purchasing, enhanced food 
and beverage margins, increased utility 
efﬁciency and reduced labour and other 
expenses. Additionally, about £0.75 million 
of incremental proﬁt is expected annually 
through better management of the Group’s 
golf operations, including the attraction of 
additional corporate spend and increased 
asset and purchasing efﬁciency. We have 
also consolidated the best aspects of the 
health & ﬁtness membership sales processes 
from Greens and Village. This resulted 
in a 16% increase in like-for-like new 
membership sales in the second half of the 
year, with both brands starting the new 
ﬁnancial year ahead of expectations.
Accelerating Village growth
The Group’s most exciting growth 
opportunity within the existing business is 
Village, where we see potential to increase 
the estate from its existing 13 sites to more 
than 50 across the UK. Development of the 
new build model has identiﬁed substantial 
savings which will compensate for inﬂation 
in construction industry costs over recent 
years, thereby giving us conﬁdence that 
these growth targets can be achieved.
There are four new Village hotels 
scheduled to open by March 2006, which 
will bring the total number of Villages 
to 17. Three further sites are in various 
stages of negotiation. It is our intention to 
accelerate the roll-out of Village to four or 
ﬁve new sites per annum from 2006/07 at 
returns signiﬁcantly ahead of our weighted 
average cost of capital.
Aside from new openings, with occupancy 
of around 80%, there is signiﬁcant scope 
to expand the bedroom count of the 
existing estate by approximately 20% (260 
bedrooms) through extensions to seven 
Villages. Construction of a 48 bedroom 
extension at Coventry was completed in 
August 2004 and planning permission has 
been received for extensions at Cardiff (32 
bedrooms) and Bury (28 bedrooms), both of 
which have started on site. Design schemes 
are in preparation at four additional hotels 
to deliver more than 150 further rooms. The 
average targeted third year EBIT return of 
these projects is over 24%.
CHIEF EXECUTIVE’S
STRATEGY REVIEW:
CONTINUED
I DE VERE GROUP PLC I CHIEF EXECUTIVE’S STRATEGY REVIEW Improving De Vere returns
We believe that the performance of  
De Vere Hotels will beneﬁt not only from 
better brand management and operational 
excellence, but also from a general market 
recovery and speciﬁc strategic actions to 
improve returns.
Major developments at eight De Vere 
Hotels have been identiﬁed and are being 
actively pursued. These developments 
include over 170 additional bedrooms, 
three new golf courses and three new spas. 
Construction of the new golf course at  
De Vere Cameron House has commenced 
and planning consent has been received 
for the spa, which will start on site over the 
next few months. A planning application 
has also been submitted for a 35 bedroom 
extension at De Vere Cameron House, a 
30 bedroom extension at De Vere Dunston 
Hall and a 32 bedroom extension at  
De Vere University Arms.
There are also signiﬁcant opportunities 
in our timeshare business, De Vere Resort 
Ownership (DVRO). Advance sales at  
The Carrick, our new resort adjacent to  
De Vere Cameron House, now total  
£4.2 million. Most of these sales have 
been made to existing DVRO customers 
at almost nil marketing cost, providing 
clear evidence of the strength of the brand 
and the appeal of the timeshare format. 
Construction of lodges at The Carrick has 
started in earnest and we are investigating 
the possibility of other resorts within the 
existing De Vere Hotels portfolio.
The Group also aims to expand the  
De Vere brand, primarily through low capital 
intensive routes such as management 
contracts. We are currently in advanced 
discussions on a number of sites in the 
UK and Europe, where there is further 
opportunity to leverage the strength of  
the brand within the golf resort market.
As previously stated, where returns ahead 
of our weighted average cost of capital 
cannot be reasonably achieved on existing 
assets we will dispose of these assets. This 
was demonstrated by the sale this year of 
the De Vere Bellhouse and the marketing 
for sale of the De Vere Dormy.
 CHIEF EXECUTIVE’S STRATEGY REVIEW I ANNUAL REPORT & ACCOUNTS 2004 I 9
CARL LEAVER
Chief Executive De Vere Hotels
Turnover at De Vere Hotels rose 2.6% to 
£187.9 million (2003: £183.2 million). 
Excluding De Vere Resort Ownership 
(DVRO), sales increased by 3.6%, 3.0% 
on a like-for-like* basis. EBITDA, before 
exceptional items, increased by 6.3% to 
£50.5 million (2003: £47.5 million) with 
EBITDA margin increasing by 0.9%pts to 
26.9% as a result of increased efﬁciencies 
in food and beverage operations and 
tighter cost control. Operating proﬁt on 
the same basis increased by 5.8% to  
£36.9 million (2003: £34.8 million).  
Return on capital employed increased by 
0.6%pts to 6.9%.
Like-for-like* RevPAR rose 2.4% in line with 
the growth seen in the rest of the upper 
provincial market with occupancy on a like-
for-like* basis increasing by 0.3%pts  
to reach 74.8%.
Average room rate at like-for-like* hotels 
rose by 2.0% to £84.81, with an effective 
summer marketing campaign countering 
the effects of poor weather. The corporate 
segment also performed well and volumes 
in the conference market held ﬁrm, despite 
the impact of Euro 2004 and major works 
at The De Vere Grand, Brighton. Occupancy 
at the De Vere Cavendish, London 
exceeded 80% for the year, putting it in a 
strong position to increase room rates as 
the market continues to improve.
Sales at DVRO were down year-on-year 
by £1.6m, reﬂecting the timing of lodge 
construction. New lodges at De Vere Belton 
Woods and De Vere Slaley Hall will be 
completed by Spring 2005. Building has 
also commenced at our new timeshare 
resort adjacent to De Vere Cameron House, 
The Carrick.
OPERATING REVIEW:
SALES PER AVAILABLE ROOM ACCOMMODATION STATISTICS
•  Like-for-like* RevPAR 
up 2.4% at £63.40, 
beneﬁting from a 
successful marketing 
campaign in the  
second half.
• 1 disposal achieved.
 
 *  Excludes De Vere Cavendish St. James’s  
and disposal hotels.
 
†
 Source: Tri Hospitality
I DE VERE GROUP PLC I OPERATING REVIEW
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At the year-end there were 21 De Vere 
hotels with 3,318 rooms (2003: 3,310 
rooms). During the period contracts were 
exchanged for the sale of the De Vere 
Bellhouse for gross proceeds of £14.4 
million, £1.3 million below book value, 
with completion in November 2004. 
However the De Vere Dormy, which closes 
in December 2004, is being marketed for 
residential development and together the 
two disposals are expected to be in line 
with book value. EBITDA contribution for 
the two hotels was £2.8 million (2003: 
£3.2 million).
1. De Vere Cameron House
†
 
 Loch Lomond
2. De Vere Slaley Hall
†
 
 Nr. Newcastle Upon Tyne
3. De Vere Oulton Hall 
 Leeds
4. De Vere Herons’ Reach 
 Blackpool
5. De Vere Whites 
  Bolton, Greater Manchester
6. De Vere Daresbury Park 
 Warrington, Cheshire
7. De Vere Mottram Hall 
 Prestbury, Manchester
8. De Vere St. David’s Park 
 Ewloe, Nr. Chester
9. De Vere Carden Park 
 Nr. Chester
10. The De Vere Belfry 
 North Warwickshire
11. De Vere Belton Woods
†
 
 Grantham, Lincolnshire
12. De Vere Dunston Hall 
 Norwich
13. De Vere University Arms 
 Cambridge
14. De Vere Swindon
15. De Vere Cavendish  
 St. James’s London
16. The De Vere Grand, 
Brighton
17. De Vere Grand Harbour 
 Southampton
18. De Vere Royal Bath 
 Bournemouth
19. De Vere Grand, Jersey 
 St. Helier
† 
Resort ownership 
lodges also available.
1
19
DE VERE HOTELS LOCATIONS >
 OPERATING REVIEW I ANNUAL REPORT & ACCOUNTS 2004 I 11  12
 
†
 Source: Tri Hospitality
Village Hotels & Leisure Clubs
Turnover at Village rose 2.9% to £73.8 
million (2003: £71.8 million). On a like-
for-like* basis, sales grew by 3.8%. Before 
exceptional items, EBITDA grew by 0.2% 
to £21.3 million (2003: £21.2 million) 
and operating proﬁt increased by 1.2% to 
£15.8 million (2003: £15.6 million). Like-
for-like* EBITDA margin rose by 0.3%pts to 
30.8%. However, due to the impact of the 
hotel disposals and the opening of Village 
Maidstone, overall Village EBITDA margin 
fell by 0.8%pts to 28.8%.
Occupancy grew strongly on a like-for-like* 
basis, reaching over 80% against a mid-
market occupancy rate of 67.8%. RevPAR 
increased on a like-for-like* basis by 7.2%, 
driven by effective revenue management 
and a more buoyant corporate sector. 
Average room rate rose by 5.1% to £55.10. 
On a like-for-like* basis, health & ﬁtness 
membership grew to 56,400 members 
(2003: 53,800), beneﬁting from the 
implementation of ‘best practice’ sales 
processes from Greens.
At the year-end there were 13 Village 
Hotels & Leisure Clubs with 1,313 rooms 
(2003: 1,245). Village Maidstone opened 
in June 2004 and is trading in line with 
expectations. The development pipeline 
for the ﬁnancial year 2005 continues 
with the opening of Village Walsall in 
SALES PER AVAILABLE ROOM ACCOMMODATION STATISTICS
OPERATING REVIEW:
CONTINUED
•       Occupancy levels over 
80% with 7.2% increase 
in like-for-like* RevPAR 
driven by effective 
revenue management 
and a more buoyant 
corporate sector.
•       Village Maidstone 
opened in June 2004 
and is trading in line with 
expectations.
•       2 disposals achieved.
 
 *  Excludes Village Maidstone and  
disposal hotels.
I DE VERE GROUP PLC I OPERATING REVIEW
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December 2004. This will be followed by 
three more openings before mid 2006 at 
Bournemouth, Hull and Swansea, where 
contracts were exchanged in November 
2004 conditional on planning consent. 
The pipeline for further expansion is 
progressing well.
Two Village hotels in Prestwich and 
Swindon, which fell far short of brand 
criteria, were sold for a total of  
£6.3 million, resulting in a loss on disposal 
of £3.5 million, of which £2.8 million 
was provided for at the half-year. The two 
hotels contributed EBITDA of £0.2 million 
(2003: £0.8 million).
1
OPERATING REVIEW:
CONTINUED
VILLAGE LOCATIONS >
1. Village Leeds
2. Village Bury
3. Village East Manchester
4. Village Cheadle
5. Village Warrington
6. Village Wirral
7. Village Liverpool
8. Village Nottingham
9. Village Dudley
10. Village Coventry
11. Village Cardiff
12. Village Newcastle
13. Village Maidstone
14. Village Walsall
15. Village Bournemouth
†
16. Village Hull
†
17. Village Swansea
†
† 
Opening before mid 2006.
17
 OPERATING REVIEW I ANNUAL REPORT & ACCOUNTS 2004 I  14
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OPERATING REVIEW:
CONTINUED
GREENS – TOTAL SALES
I DE VERE GROUP PLC I OPERATING REVIEW
1
1. Greens Cambridge
2. Greens Croydon
3. Greens Birmingham
4. Greens Wakeﬁeld
5. Greens Shefﬁeld
6. Greens Stoke-on-Trent
7. Greens Liverpool
8. Greens Norwich
9. Greens Glasgow
10. Greens Edinburgh 
11. Greens Chingford
12. Greens Gosforth
13. Greens Shipley
14. Greens Leicester
15. Greens Glasgow 
Giffnock
15
GREENS LOCATIONS >
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Greens
Following a challenging ﬁrst quarter  
for membership sales at Greens, a  
new promotional strategy delivered  
strong results in the remainder of the  
year, with new joiners in like-for-like clubs 
ahead by 18% over the last nine months. 
At the year-end membership was 68,400 
(2003: 64,000). Turnover increased by 
3.0% to £31.2 million (2003: £30.3 
million). EBITDA increased to £7.2 million 
(2003: £6.9 million) and operating proﬁt 
was £3.5 million (2003: £2.3 million).
The focus for Greens remains on increasing 
proﬁtability in all areas of the business  
and generating improved returns.
G&J Greenall 
Turnover increased by 6.9% to £28.8 
million (2003: £26.9 million). With effect 
from April 2004 the Group entered into a 
new contract with Bacardi which runs to 
2012, albeit at tighter margins. The adverse 
proﬁt impact for the part year amounted 
to £0.5 million, equivalent to £0.8 million 
on an annualised basis. EBITDA in the year 
was £2.2 million (2003: £2.6 million).
Growth in Greenall’s Original London 
Dry Gin has successfully made the brand 
the number four gin in UK supermarkets 
and the fastest growing gin brand in its 
category. FINANCIAL REVIEW:
 FINANCIAL REVIEW I ANNUAL REPORT & ACCOUNTS 2004 I 15
The Group has again achieved good results, 
with turnover up by 3.1% to £321.8 million 
(2003: £312.2 million) and operating proﬁt 
excluding exceptional items increasing by 5.4% 
to £57.6 million (2003: £54.7 million).
Exceptional items
On 23 March 2004, Guinness Peat Group 
(GPG) made a partial offer for 25% of 
the issued share capital of the Company, 
to take its enlarged shareholding to 
approximately 35%. GPG’s strategy 
was to sell the entire De Vere Hotels 
portfolio with a view to returning net 
proceeds to shareholders. This partial 
offer was comprehensively rejected by the 
shareholders, but costs of £1.0 million 
were incurred in the process and charged 
against operating proﬁt.
During the year the Group participated 
in the competitive process to acquire the 
Premier Lodge chain of budget hotels. The 
Group’s withdrawal, as the price escalated, 
demonstrated its strong ﬁnancial discipline 
and determination not to overpay. Costs of 
£0.3 million were incurred and have been 
charged to operating proﬁt.
The sale of Village hotels at Swindon and 
Prestwich were completed in the year at a 
combined loss of £3.5 million. At the year-
end contracts had been exchanged for the 
sale of De Vere Bellhouse at a loss of £1.5 
million including disposal costs. Proﬁts on 
the sale of other properties amounted to 
£0.3 million.
A surplus provision from the withdrawal 
of the Tavern wholesaling business of 
£2.1 million was released and reﬂects 
the Group’s success in resolving historic 
property issues.
Interest
Net interest charges for the year of  
£12.0 million (2003: £17.2 million) 
include a £1.1 million interest receipt on 
a Corporation Tax refund (2003: includes 
a £2.3 million exceptional interest 
charge in respect of VAT on the golf and 
leisure subscription income). Excluding 
all exceptional items, net interest was 
covered 4.8 times by operating proﬁt 
(2003: 3.7 times).
Taxation
Excluding all exceptional items, the Group 
tax charge in the proﬁt and loss account 
represents 29.8% of proﬁt before taxation 
(2003: 30.7%).
The actual Corporation Tax payable is 
substantially lower than the proﬁt and 
loss charge as a result of the availability of 
brought forward tax losses and accelerated 
capital allowances on our capital 
expenditure programme. Cash flow
The principal cash movements during the 
period were an operating cash ﬂow of 
£78.1 million (2003: £77.1 million) before 
exceptional outﬂows of £12.0 million 
(2003: £10.1 million). The exceptional cash 
outﬂows relate to the settlement of the 
historic golf and leisure VAT liability of  
£9.5 million and special pension 
contributions of £2.5 million. During the 
year there was a Corporation Tax refund of 
£9.4 million (2003: £nil).
Capital expenditure was £41.9 million 
(2003: £38.2 million) and disposal 
proceeds, primarily relating to the sale of 
the two Village hotels, totalled £7.9 million.
Treasury
Group treasury operations are managed 
centrally and operate within a formal 
treasury policy approved by the Treasury 
Committee. This Committee has formal 
terms of reference from the Board and is 
responsible for the development and review 
of treasury policy, procedures and reporting.
The primary objectives of treasury policy are 
to ensure that adequate and cost-effective 
funding arrangements are maintained 
to ﬁnance current and planned future 
activities and that exposure to ﬁnancial 
risk is minimised. It is not the policy of the 
Group to trade in or enter into speculative 
transactions.
Gearing
Net borrowings as at 26 September 2004 
amounted to £202.7 million (2003: £222.5 
million), a reduction of £19.8 million. 
Gearing was 33.9% (2003: 38.3%).
Funding arrangements
At the year-end, committed funding of 
£294.2 million (2003: £294.6 million) was 
in place from both bank and debt market 
sources. Of these facilities £88.0 million 
was undrawn as at 26 September 2004 
(2003: £75.0 million).
Further details of the Group’s borrowings 
at the ﬁnancial year-end are disclosed in 
Note 17 to the Accounts. 
Financial risk management
It is the Group’s policy to ﬁx interest 
rates on approximately 50-60% of its 
borrowings. At the year-end 61% of 
borrowings were at ﬁxed rates of interest. 
An analysis of ﬁxed rate borrowings is 
provided in Note 17 to the Accounts. In 
February 2004, as part of this policy, the 
Group entered into a £20 million interest 
rate swap contract to ﬁx rates at 5.06%. 
Taking into account the Group’s ﬁxed  
rate borrowings, it is estimated that a  
one percentage point change in interest 
rates would affect interest payable during 
the next ﬁnancial year by approximately 
£1.0 million.
Aside from the US $100 million 
Guaranteed senior loan notes, for which  
all cash ﬂows are fully hedged, transactions 
conducted in foreign currencies are not 
signiﬁcant in the context of the Group’s 
overall business.
Shareholders’ returns
Basic earnings per share, excluding 
exceptional items, increased by 14.2% to 
27.98 pence (2003: 24.50 pence).
The Board is recommending a ﬁnal 
dividend of 8.82 pence per Ordinary share. 
Ordinary dividends for the year of 13.10 
pence per share are covered 2.1 times by 
earnings before exceptional items (2003: 
11.70 pence covered 2.1 times).
Pensions
The ﬁnancial statements comply with the 
transitional disclosure requirements of  
FRS 17 – Retirement Beneﬁts. Note 20 to 
the Accounts discloses the funding position 
of the Greenalls Group Pension & Life 
Assurance scheme.
The actuarial valuation of the Greenalls 
Group Pension and Life Assurance Scheme 
(The Scheme) as at 5 April 2003 has now 
been ﬁnalised. The deﬁcit at that date 
amounted to £40.4 million; the scheme has 
been closed to new members since 2001. 
Due to the maturity of the scheme as at the 
year-end, 60% of the scheme’s assets were 
invested in ﬁxed interest securities.
FINANCIAL REVIEW:
CONTINUED
I DE VERE GROUP PLC I FINANCIAL REVIEW 16 Since 5 April 2003 the Company has 
paid a further £7.5 million of previously 
agreed special contributions, of which the 
last instalment of £2.5 million was paid 
on 1 November 2003. Going forward it 
has been agreed that the Company will 
pay £2.8 million per annum, in quarterly 
instalments, increasing annually in line with 
increases in average pensionable salaries. 
The rate of contribution will be reviewed 
again in three years time following the 
April 2006 valuation.
The SSAP 24 charge, using the best 
estimate basis of valuation, is £2.2 million 
per annum from 1 October 2003.
International Financial Reporting 
Standards (“IFRS”)
The Group will produce its ﬁrst ﬁnancial 
statements in accordance with IFRS for the 
year ending 24 September 2006. This will 
require an opening balance sheet to be 
prepared under IFRS as at 26 September 
2004 and a full proﬁt and loss account, 
balance sheet and cash ﬂow statement for 
the year to 25 September 2005.
Throughout the ﬁnancial year work has 
been ongoing to assess the impact of 
IFRS. We have worked with our auditors 
and also participated in a Hotel & Leisure 
IFRS forum to address industry speciﬁc 
accounting issues.
On the basis of work performed to date 
the most signiﬁcant impacts are expected 
to be in accounting for:
•  Fixed assets – in particular the annual 
assessment of residual values which 
could affect the level of the future 
depreciation charges. In addition the 
land element of the hotel ﬁnance 
leases will need to be accounted for as 
operating leases; the current carrying 
value of this land is not more than  
£20 million.
•  Deferred Tax – will need to be provided 
on the assumption that the assets are 
sold at book value. An indication of the 
implications of this adjustment can be 
found in Note 7.
•  Pensions – in the opening balance sheet 
the pension scheme deﬁcit will need to 
be fully provided for. Note 20 provides 
an indication of the extent of the 
provision that would be required under 
FRS 17, although the calculation differs 
to that applicable under IFRS.
•  Share based payments – a charge to the 
proﬁt and loss account will be made 
under IFRS 2 in respect of options issued 
since 7 November 2002 that have not 
vested prior to 26 September 2004. The 
number of such options falling into this 
category and the weighted average share 
price is disclosed in Note 22. The Group 
is working with its ﬁnancial advisers to 
ﬁnalise the quantiﬁcation of the impact 
on the opening balance sheet.
•  Derivatives – IAS 39 Financial 
Instruments will not be applied to 
the opening IFRS balance sheet in 
accordance with transitional provisions. 
However Note 18 on page 51 discloses 
the fair value of the Group’s interest 
rate swap contracts at the year-end in 
accordance with UK GAAP .
•  Dividends – under IFRS the closing 
dividend is not deemed to be a liability 
as at the year-end date. The transitional 
balance sheet as at 26 September 2004 
will not contain the accrual for the ﬁnal 
dividend.
The Group has assigned resources and 
has a plan in place to ﬁnalise its opening 
IFRS balance sheet position during the 
forthcoming ﬁnancial year.
Future developments
The Group is in a strong ﬁnancial position 
to progress the development plans for both 
hotel brands and to react quickly to any 
future acquisition opportunities.
 FINANCIAL REVIEW I ANNUAL REPORT & ACCOUNTS 2004 I 17
ROGER STUBBS
Group Finance Director BOARD OF DIRECTORS:
ALAN JACKSON 
a,r,n
Senior Independent 
Non-executive Director
ROGER STUBBS
Group Finance Director
THE LORD DARESBURY , DL
Non-executive Chairman
BOARD COMMITTEES:
(a) Audit Committee 
(r) Remuneration Committee 
(n) Nomination Committee
Alan Jackson was appointed as 
an independent Non-executive 
Director in 1993 and senior 
Non-executive Director in 
2002. He is Chairman of the 
Nomination Committee and 
a member of the Audit and 
Remuneration Committees. 
He is Executive Chairman of 
The Restaurant Group Plc and 
Non-executive Chairman of 
Charles Wells Limited. Age 61.
Roger Stubbs was appointed 
Group Finance Director in 
December 1999. He joined the 
Company in 1979 as Financial 
Controller of the Off Licence 
Division subsequently becoming 
its Finance Director. In 1991 
he became Finance Director of 
Premier House and in 1997 was 
appointed Finance Director of 
the Hotels & Leisure Division. 
He is a fellow of the Institute 
of Chartered Accountants 
and a member of the British 
Association of Hospitality 
Accountants. Age 53.
Lord Daresbury was appointed 
a Director in 1984. He ﬁrst 
joined the Company in 1977 
and became Chief Executive in 
February 1997. Following the 
sale of the Pubs & Restaurants 
business he was appointed 
Non-executive Chairman. He is 
Chairman of Aintree Racecourse 
Company Limited and was 
formerly a Non-executive 
Director of First Leisure Plc.  
Age 51.
I DE VERE GROUP PLC I BOARD OF DIRECTORS 18 CARL LEAVER
Chief Executive
STEVE MORGAN, OBE
Non-executive Director
DEBBIE HEWITT 
a,r,n
Independent  
Non-executive Director
NIGEL WALMSLEY 
a,r,n
Independent  
Non-executive Director
Carl Leaver was appointed Chief 
Executive on 1 September 2003. 
He was previously Managing 
Director of Travel Inn, a division 
of Whitbread Hotel Company. 
Prior to that he held several 
positions within Whitbread PLC. 
He has also worked for Forte Plc 
and Nomura International Plc. 
Age 36.
Steve Morgan was appointed 
as a Non-executive Director in 
March 2000. He is the former 
Chairman and founder of 
Redrow Group Plc and of 
St David’s Hotels Limited prior 
to its acquisition by De Vere 
Group Plc. He is also a Director 
of several privately owned 
businesses. Age 51.
Debbie Hewitt was appointed as 
an independent Non-executive 
Director in May 2002. She chairs 
the Remuneration Committee 
and is a member of the Audit 
and Nomination Committees. 
She is the Managing Director of 
RAC Roadside Services and sits 
on the Ofﬁce of Government 
Commerce Board. Age 41.
Nigel Walmsley was appointed 
as an independent Non-
executive Director in May 2001. 
He is Chairman of the Audit 
Committee and a member 
of the Remuneration and 
Nomination Committees. He 
is a Council Member of the 
Advertising Standards Authority 
and Chairman of Broadcasters 
Audio Research Board Limited 
where he also chairs the Finance 
Committee. He was formerly 
Chairman of Carlton Television 
and Managing Director of 
Capital Radio Plc. Age 62.
 BOARD OF DIRECTORS I ANNUAL REPORT & ACCOUNTS 2004 I 19 The Directors have pleasure in submitting 
their Report and the Accounts for the year 
ended 26 September 2004.
Business review
A review of the Group’s activities, 
performance during the year and an 
indication of likely future developments are 
set out on pages 6 to 14.
An analysis of the operating profit by class 
of business is shown in Note 1 to the 
Accounts on page 38.
Dividends
The Board is recommending a final dividend 
of 8.82 pence per Ordinary share to be paid 
on 4 March 2005 to shareholders registered 
in the register of members of the Company 
at the close of business on 4 February 2005. 
The final dividend together with the interim 
dividend of 4.28 pence per Ordinary share, 
and subject to shareholders’ approval, makes 
a total for the year ended 26 September 
2004 of 13.10 pence, compared with 11.70 
pence per Ordinary share for the year ended 
28 September 2003.
Share capital
Details of changes in share capital during 
the year are given in Note 22 on page 56. 
Since the year-end 41,763 Ordinary shares 
of 22 
2
/
9
 pence each have been issued under 
the Executive Share Option Scheme and the 
Sharesave Scheme.
The Company did not purchase any of 
its Ordinary shares during the year. The 
existing authority granted by shareholders 
for the Company to purchase its own shares 
remains in force until the AGM on 25 
February 2005.
Substantial interests as at  
1 December 2004
The Company has been notified of the 
following interests pursuant to section 198 
of the Companies Act 1985:
 
 %
Bridgemere Securities Ltd 13.51
Fidelity International Ltd 10.05
Guinness Peat Group Plc 9.94
Legal & General Investment  
Management 5.01
JP Morgan Fleming Mercantile  
Investment Trust Plc 3.22
Steve Morgan, a Non-executive Director of 
the Company, is the controlling shareholder 
of Bridgemere Securities Limited.
In addition to the substantial interests 
referred to above, Lord Daresbury, Non-
executive Chairman, has beneficial interests 
in the Ordinary shares of the Company, 
together with other members of his family, 
amounting to 4.62%. 
Directors
The names and brief biographical details of 
the Directors who have held office are set 
out on pages 18 and 19. The Lord Daresbury 
and Steve Morgan retire by rotation and, 
being eligible, offer themselves for re-
election. In line with best practice, Alan 
Jackson, who has been a Non-executive 
Director for over nine years, also offers 
himself for re-election as a Director until 
the next AGM. As explained on page 23 the 
Board has been through a formal evaluation 
process and the Directors are satisfied that 
it is appropriate to recommend them for re-
election. The performance of each Director 
continues to be effective and they have 
demonstrated commitment to the role.
The interests of the Directors in the Ordinary 
shares of the Company, details of the 
Directors’ service contracts and other details 
of their remuneration are set out in the 
Report on Directors’ Remuneration on pages 
26 to 30.
Auditors
Ernst & Young LLP have expressed 
their willingness to continue in office 
in accordance with section 385 of the 
Companies Act 1985. A resolution re-
appointing them as auditors for the ensuing 
year will be proposed at the Company’s 
Annual General Meeting.
Special business of Annual  
General Meeting
The Annual General Meeting is to be held  
at 11.30am on 25 February 2005 at  
The De Vere Grand, Brighton, King’s Road, 
Brighton, East Sussex, BN1 2FW. The Notice 
of Meeting, Agenda and Explanations of 
any Special Business of the Annual General 
Meeting are sent to shareholders separately.
By Order of the Board,
David Edwards 
Company Secretary
1 December 2004
 
REPORT OF THE DIRECTORS
 20 I DE VERE GROUP PLC I REPORT OF THE DIRECTORS STATEMENT ON CORPORATE AND SOCIAL RESPONSIBILITY
 STATEMENT ON CORPORATE AND SOCIAL RESPONSIBILITY I ANNUAL REPORT & ACCOUNTS 2004 I 21
The Board takes account of the importance 
of social, ethical and environmental 
matters to the business as part of the risk 
management process. In particular, the 
Board identifies and assesses whether there 
are any significant risks to the Group’s short 
and long-term value arising from social, 
environmental and ethical matters as well as 
opportunities to enhance value.
The workplace
Group policies and practices are focussed 
on creating a culture throughout the 
organisation where personal performance 
matters and employees are encouraged 
to develop and reach their full potential. 
As a means of motivating employees and 
recognising successful performance, the 
Group has clear organisational values which 
are reinforced by leadership skills that build 
teams of capable and energetic people. 
Part of the human resource strategy is to 
be the leading employer in the hospitality 
sector so that the Group continues to attract 
employees of the highest calibre.
For the business to perform successfully, 
employees need to understand strategic 
plans and commit to making De Vere a place 
where their input matters. An employee 
opinion survey is used to obtain feedback 
and measure employee engagement. This 
year over 80% of our employees expressed 
their views and the results benchmarked 
very favourably against the sector. Regular 
communication with employees at every 
level of the organisation, through team 
briefings and staff forums, provides updates 
on business developments.
This year a new performance management 
process has been introduced throughout all 
the hotels and leisure clubs. All employees 
now have a “Performance Contract” which 
outlines their personal objectives and aligns 
their development and training needs 
to corporate goals. The “Performance 
Contracts” are designed to review what 
future role employees aspire to and help 
them achieve their career aspirations.
A range of management development 
initiatives was launched this year to ensure 
that managers can act as role models to 
their teams. These programmes will be 
extended to include additional leadership 
programmes for more senior managers. 
The “Excellerate” induction programme 
launched last year is now firmly embedded 
into management practices. Corporate and 
local human resource plans both detail the 
actions required to further develop the culture 
and organisation to meet business needs. 
A balanced scorecard charts the delivery of 
profit, sales growth, customer satisfaction, 
employee retention and engagement and also 
the profit performance against competitors. 
These measures are then used to reward 
managers, linking into their bonus plans.
Employees’ interests have been further 
aligned with shareholders by changes to 
the Executive Share Option Scheme during 
the year. The refinements include a revision 
of the comparator group of companies 
and the introduction of a sliding scale 
for performance. Grants are based on 
the executive’s personal performance and 
contribution. Employees are also invited 
to share in the Company’s success by 
participating in the SAYE schemes. An 
Employee Co-investment Plan enables certain 
employees to invest a proportion of their 
bonus in De Vere shares with the Company 
matching their investment, providing 
performance criteria are met.
The Group offers pension provisions for all 
employees, through both stakeholder and 
defined contribution schemes. In addition, 
a number of longstanding employees are 
members of a final salary scheme.
The Group is a strong supporter of equal 
opportunities in all aspects of employment, 
including recruitment and encouragement 
of employees to develop their full potential 
regardless of gender, marital status, social 
class, age, colour, national or ethnic origin, 
religious belief, sexual orientation or 
disability. If an employee were to become 
disabled whilst an employee, and as a 
result were unable to pursue his or her 
existing duties, every effort would be made 
to offer suitable alternative employment 
and assistance with re-training. In 
addition the De Vere Group Plc continues 
to be accredited Investors in People.
Health & Safety
Ensuring the health, safety and welfare of 
guests, employees and visitors continues to 
be of paramount importance to the Group, 
and is central to each working day. 
During the year the Group reviewed its risk 
management systems, in line with the Health 
& Safety Commission’s Health & Safety 
strategy, and continues to work closely with 
insurers and others to invest in reducing risks.
Additionally, an improved safety 
management system was launched on the 
Company intranet. This has helped provide 
tools for senior managers to better manage 
safety within their respective units, and to 
promote the involvement of employees at 
every level.
Health & Safety audits are conducted at each 
hotel by an external consultant to monitor 
the status of safety performance across the 
Group. Their reports enable us to capture 
opportunities for improvement and to raise 
health and safety standards further.
The community
Community involvement is an important 
component in the Group’s value creation 
process as the concept of a socially 
responsible company is recognised as a 
key factor for success. Hotel managers 
encourage staff to nominate 2 charities each 
year, which will receive support at a local 
level and benefit from events sponsored 
by individual hotels and their employees. 
Beneficiaries this year have ranged from 
local charities, such as the Tullochan Trust 
and the Yorkhill Hospital for Sick Kids, to 
national charities including Cancer Research, 
Macmillan Appeal, First Steps Appeal, CALM 
and the Born Free Foundation.
In addition to the nominated charities, hotels 
have provided facilities for local communities 
to organise fund raising events and 
employees can be found across the Group 
supporting the community in a variety of 
ways. Employee activity ranges from school 
governors, chairpersons of PTAs, church 
conservationists, PR Officer for Friends of 
Stanley Park and Special Constables for 
Lancashire Constabulary. Some hotels run 
schemes to allow qualifying staff paid time 
off to support chosen charities.
De Vere and Village hotels are also keen 
supporters of young people and provide 
training and work experience under a 
number of recognised schemes. Employees 
have been singled out for recognition at a 
House of Lords ceremony for work with the 
Shaw Trust and close liaisons have been set 
up with many local schools. These schemes 
provide children with experience in work, 
environmental activities and some activity 
that gives “an opportunity to lift themselves 
from their circumstances and reach to 
otherwise unimaginable goals” as made 
possible through the Tullochan Trust. Sporting activities are also close to the heart 
of De Vere’s employees and customers, 
who are often found running youth clubs, 
pier runs, charitable bike rides, leisure club 
rowing events and junior football teams. 
The enthusiasm shown for community 
involvement is in plentiful evidence and our 
employees’ determination is embodied in 
the stamina shown by the many who have 
completed charity marathon runs and even 
the occasional fire-walking event.
Charitable donations totalled £50,000 (2003: 
£77,100) during the year. No donation was 
made to any political organisation, nor was 
any political expenditure incurred.
The environment
The Group recognises the responsibility its 
businesses have towards the environment 
and is committed to good environmental 
management of our hotels and clubs with 
extensive flora and fauna. De Vere and 
Village hotels are pleased to have qualified 
for the Kempen/SNS Smaller Europe SRI 
Index for successive years. Inclusion in this 
index demonstrates the Group’s commitment 
to its social responsibilities towards the 
community, the environment, employees 
and ultimately the shareholders returns. 
The Group is also proud to be included 
in the FTSE4good index and has many 
activities designed to enhance its corporate 
responsibility to the environment.
Energy and waste
The Group aims to reduce energy 
consumption in our business and water 
usage is also being monitored. Our hotels 
and clubs have been issued with clear 
efficiency guidelines, and help and advice 
has been provided. Arrangements are in 
place with various partners, which allow 
waste streams to be monitored with the 
objective of continually decreasing the 
amount of packaging in our business and 
improving recycling targets on the waste 
that is produced.
An energy team has been brought together 
and policy and procedures have been 
incorporated into an Energy Operations 
Manual. The manual identifies practices that 
must be followed and others, which are best 
practice recommendations. For example, any 
low cost, short payback practices (low energy 
light bulbs) are mandatory wherever feasible. 
Each hotel or club monitors consumption on 
a monthly basis and the data is consolidated 
centrally. Targeted energy usage reduction 
of 2% per annum is monitored and reported 
on in monthly Board reports. The team 
will undertake feasibility studies in the 
forthcoming year on higher cost areas such 
as combined heat and power plants and 
swimming pool covers.
The reduction in energy use is directly related 
to reduced CO
2
 emissions. These will be 
calculated and reported against.
Management of waste in the Group has 
been outsourced to a third party specialist. 
The objectives for the coming year are 
to ensure the Group minimises waste to 
landfill by recycling wherever possible. 
Glass, cardboard and waste oil are already 
segregated in most of our hotels and 
fluorescent tubes will be segregated going 
forward to comply with new Hazardous 
Waste Regulations. The feasibility of recycling 
plastics and other materials will also be 
reviewed. The Group will reduce the cost 
of landfilling whatever is left, by ensuring 
haulage is kept to a minimum.
The De Vere Belfry continues to participate 
in the “Committed to Green” initiative, 
the long-term European Environmental 
Management Programme that is designed to 
mitigate the impact of our activities on the 
environment.
The Carrick development
The Carrick development covers a 300-acre 
estate of which one third is being designated 
as a nature reserve. An environmentally 
responsible management programme has 
been established for the golf course, which 
will preserve trees and minimise the use of 
chemicals. This programme goes as far as 
banning the use of air spraying pesticides, 
permitting only hand spraying methods 
for limited periods of the year to prevent 
pollution of Loch Lomond.
At The Carrick, the flooded gravel pits have 
become a deep-water lagoon providing a 
habitat for the rich diversity of flora and 
fauna which will be preserved in their natural 
state. A bird and mammal survey has been 
carried out to establish the specific breeding 
sites on the nature reserve to ensure they 
remain undisturbed. Many species of birds 
including kingfishers, dippers and warblers 
frequent the area and a footpath has been 
established on the fringe of the nature 
reserve as a means of observing the wildlife. 
Plans are also being developed with the 
Scottish National Heritage, the National 
Park Authority and the RSPB who will all be 
involved with the management of the site.
The marketplace
Placing consumer insight at the very heart 
of the Group’s cultural values and operating 
procedures is a key part of the business plan.
Changes have been made in the year 
to customer satisfaction measuring 
systems to include a new in-room survey 
and e-mail based surveys designed to 
focus on targeted customer opinion.
New KPIs have been introduced to monitor 
overall satisfaction and response targets 
set to increase in critical market sectors. 
Customers can now complete surveys 
online and General Managers can access 
results to proactively respond to customer 
comments. This new process is both lower 
in cost and provides a higher response rate 
than the previous monitoring systems.
The Group purchasing policy highlights 
the commercial objectives and also 
specifies our promise to administer the 
purchasing function in a professional 
and ethical manner, to tender business 
on an ethical basis with no bias or 
conflict of interest and to treat all 
suppliers fairly and without prejudice.
The Group negotiates payment arrangements 
and other terms and conditions with all 
its principal suppliers. Payments to these 
suppliers, other than in the case of a 
dispute, are made in accordance with 
such negotiated arrangements, which are 
set out in contracts where appropriate.
The number of days purchases outstanding 
to creditors at 26 September 2004 
was 47 (2003: 46) for the Group and 
45 (2003: 56) for the Company.
STATEMENT ON CORPORATE AND SOCIAL RESPONSIBILITY
continued
I DE VERE GROUP PLC I STATEMENT ON CORPORATE AND SOCIAL RESPONSIBILITY 22 The Company recognises the importance 
of, and is committed to, high standards 
of corporate governance. In June 1998 
the Combined Code was published which 
embraces the work of the earlier Cadbury, 
Greenbury and Hampel Committees. This 
statement, together with the Directors’ 
Remuneration Report set out on pages 26 
to 30, describes how the Company has 
applied the principles of good governance 
as set out in the Combined Code. A 
revised version of the Combined Code (the 
“Revised Code”) was published in July 2003 
following the Higgs report and applies 
to the Company for the financial year 
commencing 27 September 2004.
The Company is not required to report 
compliance with the Revised Code until the 
publication of the Annual Report for the 
financial year ending 25 September 2005. 
However, the Board believes that, without 
ignoring the existing code, it will be more 
helpful to focus in this Annual Report on 
the extent of the Company’s current level of 
compliance with the more stringent Revised 
Code. This section of the Annual Report 
therefore provides disclosures in accordance 
with and discusses in detail the extent of 
compliance against the Revised Code.
Board structure and processes
The Board currently consists of a Non-
executive Chairman, Chief Executive, 
Finance Director and four Non-executive 
Directors, with Alan Jackson as the senior 
Non-executive Director. Biographies of 
all the Directors, together with details of 
their committee memberships, are set out 
on pages 18 and 19. All members of the 
Board submit themselves for re-election at 
least every three years. Lord Daresbury and 
Steve Morgan retire by rotation and submit 
themselves for re-election this year. Alan 
Jackson has served for more than nine years 
as a Non-executive Director and therefore 
also submits himself for re-election.
The roles of the Chairman and Chief 
Executive are separate. The Non-executive 
Chairman is responsible for the effective 
operation of the Board. The Chief Executive 
has overall responsibility for managing 
the Company, which includes strategy and 
operations. During the year, the Board 
updated and clearly documented the 
division of the roles between the Chairman 
and Chief Executive.
The Board has a schedule of matters reserved 
for its decision which has been reviewed and 
updated during the year. Matters reserved to 
the Board for decision include:
• strategy and objectives;
• annual budgets;
• dividends;
• acquisitions and disposal of businesses;
• expenditure over certain defined limits;
• financial results;
• appointments to the Board.
The Board is collectively responsible for 
the success of the Company and normally 
meets at least every two months with 
further meetings arranged as necessary. The 
attendance record of individual directors at 
Board meetings is detailed below.
No. of meetings in the year 13
Lord Daresbury  13
Carl Leaver 13
Debbie Hewitt 12
Alan Jackson 12
Steve Morgan 11
Roger Stubbs 13
Nigel Walmsley 13
Paul Dermody
1
  –
1
 Retired 13 October 2003
During the year there were four meetings 
of the Audit Committee. Alan Jackson and 
Nigel Walmsley attended all of the meetings 
and Debbie Hewitt attended three of the 
meetings. All members of the Remuneration 
Committee attended the two Remuneration 
Committee meetings. There were no 
meetings of the Nomination Committee.
In advance of each meeting all Directors 
are provided with and have full and timely 
access to information in relation to the 
matters to be discussed. The Directors are 
therefore able to make informed decisions 
on corporate and business issues under 
consideration.
During the year the Board undertook an 
evaluation of its performance (including 
that of its committees). This evaluation 
considered the operation of the Board 
and its committees, compliance with its 
corporate governance obligations and the 
operation and content of its meetings. 
The Chairman individually consulted with 
each member of the Board and the Board 
committee chairmen consulted with each 
of the committee members. Feedback was 
reviewed at a meeting of the full Board. 
The Chairman also led a review of the 
individual performance of each of the 
directors other than himself. The review 
covered the effectiveness of each director’s 
contribution and commitment to the 
Company. Feedback was provided to 
individual directors and action points 
addressed. Alan Jackson, the senior 
independent Non-executive Director, 
undertook a performance evaluation of the 
Chairman taking into account the views of 
the Executive and Non-executive Directors.
The Company Secretary is responsible 
for ensuring that Board processes and 
procedures are appropriately followed 
and support effective decision making. 
All Directors have access to the Company 
Secretary’s advice and services and there 
is also a formal procedure for Directors to 
obtain independent professional advice 
in the course of their duties, if necessary, 
at the Company’s expense. An induction 
programme is arranged for all new Directors. 
This covers the major trading activities 
of the Company as well as the roles and 
responsibilities of Directors generally. 
Any additional training requirements are 
identified as part of the Board’s annual 
evaluation of performance and training is 
arranged as required.
The Non-executive Chairman and Steve 
Morgan both have interests in substantial 
share holdings in the Company (4.62% and 
13.52% respectively at 26 September 2004).
With the exception of Alan Jackson and 
Lord Daresbury all of the Non-executive 
Directors have been appointed since March 
2000. Alan Jackson has been a Director 
of the company since 1993 and Lord 
Daresbury since 1984. The Non-executive 
Directors come from diverse business 
backgrounds and each has unique expertise 
covering property, communications, human 
resources, finance and the leisure industry. 
This combination of skills and expertise 
significantly enhances the judgement and 
overall performance of the Board.
The Board requires that all Non-executive 
Directors be free from any relationship with 
the executive management that could be 
considered to hinder their independent 
judgement. In the Board’s view all Non-
executive Directors meet this requirement.
CORPORATE GOVERNANCE
 CORPORATE GOVERNANCE I ANNUAL REPORT & ACCOUNTS 2004 I 23 Alan Jackson has been a Director of the 
Company since 1993 and, in accordance 
with best practice, the Board has reviewed 
whether, in its opinion, he remains 
independent. As part of the Board’s 
evaluation of its effectiveness, it also 
reviewed whether Alan Jackson should, on 
the grounds of the length of his service, 
be replaced. The Board has concluded that 
his industry experience, understanding of 
the business and the level of commitment 
displayed to the Board are such that he 
provides just the sort of challenge expected 
of an independent Non-executive Director. 
The Board therefore considers Alan Jackson 
to be an independent Non-executive Director 
and this view was endorsed by shareholders 
who re-elected him at the Annual General 
Meeting this year.
The Board is seeking to appoint another 
independent Non-executive Director to 
strengthen its independence. A number of 
candidates have so far been considered and 
an appointment will be made in due course.
Save as previously mentioned, the Non-
executive Directors have no material or 
business relationships with the Company and 
each of the other Non-executive Directors are 
regarded as independent.
The Board has directed that the Group’s 
code of conduct should be made available 
to all employees on joining the Company. 
The code of conduct includes details of the 
Group’s whistle blowing procedure and this 
has been reviewed in the light of the Revised 
Combined Code.
Audit Committee
The Company has an Audit Committee 
consisting of Non-executive Directors under 
the chairmanship of Nigel Walmsley. The 
members of the Audit Committee are 
as disclosed on pages 18 and 19. The 
Committee meets at least three times a 
year and its terms of reference have been 
reviewed and follow those recommended 
by the Revised Code. Its decisions and 
proceedings are reported to the Board. 
During the year the Committee undertook an 
evaluation of its performance including the 
operation and content of its meetings.
The external Auditors are invited to attend all 
the Audit Committee meetings together with 
other Board members. Part of each meeting 
of the Audit Committee is held between the 
Non-executive Directors and the external 
Auditors in private.
The Audit Committee reviews the annual 
financial statements of the Company 
together with its accounting systems and 
internal controls (including the effectiveness 
of its internal audit function). The individuals 
responsible for the Company’s internal 
audit function have direct access to the 
Chairman of the Audit Committee. The 
Committee also reviews the appointment 
and terms of reference of the external 
Auditors and monitors the level of non-
audit services provided by the Auditors. As 
part of the review it considers factors which 
could impact upon their independence and 
objectivity and has sought to minimise the 
amount of non-audit work undertaken by 
the Auditors. A breakdown of non-audit fees 
is provided in Note 2. The scope of non-
audit work undertaken by the Company’s 
Auditors covered preparation of the Interim 
Statement, a review of the Executive 
Directors’ and senior managers’ expenses, 
assistance with the defence to the partial 
takeover bid made by Guinness Peat Group 
PLC and due diligence work on the aborted 
Premier Lodge acquisition. The Company 
Secretary acts as secretary to the Audit 
Committee.
Remuneration Committee
The Company has a Remuneration 
Committee under the chairmanship of 
Debbie Hewitt, which meets at least once 
a year. During the year the Committee 
undertook an evaluation of its performance 
including the operation and content of its 
meetings. Details of the members of the 
Committee and its remit are disclosed in 
the Report on Directors’ Remuneration on 
page 26 and are entered on the Company’s 
website.
Nomination Committee
The Company has a Nomination Committee 
under the chairmanship of Alan Jackson. 
The members of the Nomination Committee 
are disclosed on pages 18 and 19. This 
Committee recommends to the Board 
the appointment of all Executive and 
Non-executive Directors. The Committee 
determines the terms of reference for new 
appointments and uses external advisers 
to identify suitable candidates for any 
vacant directorships; each candidate is 
then interviewed by all members of the 
Committee. A shortlist is then prepared 
and further interviews then take place as 
appropriate. The terms of reference for the 
Nomination Committee have been reviewed 
in the light of the Revised Code and are 
available on the Company’s website.
Newly appointed Directors are subject to 
election by shareholders at the Annual 
General Meeting following appointment. 
Under the Company’s Articles of Association 
all Directors must submit themselves for re-
election at least every three years.
Relations with shareholders
Communications with shareholders are given 
high priority. The Chairman’s Statement, Chief 
Executive’s Strategy Review, Operating and 
Financial Reviews on pages 4 to 17 include 
a detailed review of the business and future 
developments of the Group. There is regular 
dialogue with institutional shareholders, 
including presentations after the Company’s 
announcement of the half-year and year-
end results, and following any strategic 
activity. Following such meetings, minutes are 
prepared and circulated to the whole Board 
so that they are aware of shareholders’ views.
The Board uses the Annual General Meeting 
as an important means of communication 
with private and institutional investors and 
encourages their participation. The Chairman 
aims to ensure that the Chairmen of the 
Audit, Remuneration and Nomination 
Committees are available at Annual General 
Meetings to answer questions. Details of 
resolutions to be proposed at the Annual 
General Meeting on 25 February 2005 can 
be found in the Notice of Meeting.
To further improve communications with 
shareholders, the Group has a website 
(www.deveregroupplc.co.uk) dedicated to 
the communication of corporate information 
such as: current and historical financial 
reports, presentations and press releases, 
together with a link to the current share 
price. The Group also offers its shareholders 
the option of receiving electronic versions 
of shareholder communications, including 
the annual and interim reports, terms of 
reference for the Audit, Remuneration 
and Nomination Committees. Information 
regarding this service can be downloaded 
directly from the corporate website.
Internal control
The Board is responsible for the Group’s 
system of internal control and for reviewing 
its effectiveness. The system of internal 
control is designed to safeguard shareholders’ 
investment and the Company’s assets by 
managing the risks of not meeting business 
objectives and is intended to provide 
reasonable and not absolute assurance 
against material misstatement or loss.
CORPORATE GOVERNANCE
continued
I DE VERE GROUP PLC I CORPORATE GOVERNANCE 24 The principal elements of the Group’s system 
of internal control and risk management, 
that comply with the internal control 
guidance on the combined code and which 
were in place throughout the year under 
review and up to the date of approval of the 
Accounts, are as follows:
•  A strategic plan is prepared annually and 
approved by the Board; the plan covers the 
period until 2010.
•  Following the approval of the strategic 
plan, a detailed budget is prepared for the 
following financial year and is approved by 
the Board.
•  Actual results are reported monthly and 
compared to both budget, prior year and 
forecast results. Operational performance 
of the hotels is reviewed against external 
industry benchmarks.
•  All major risks identified and recorded in 
a risk management report are assessed 
and allocated to specific individuals as 
appropriate. This report summarises all 
foreseen strategic, operational, financial, 
technical, social, ethical and environmental 
risks that could prevent the achievement 
of business objectives. Action plans to 
mitigate the identified risks are in place. 
The report is reviewed at each meeting of 
the Board of Directors.
•  A formal appraisal and approval process 
is operated for all items of capital 
expenditure. Projects are required to 
demonstrate achievement of appropriate 
operational and financial criteria. Projects 
in excess of £500,000 are referred to the 
Board for approval.
•  Key systems and controls are documented 
and, on a monthly basis, self-certification 
reports are signed off by heads of finance 
functions across the Group.
•  Internal audits are conducted in 
accordance with a rolling programme. 
Each hotel or business unit is audited at 
least once each year, with further audits 
being conducted in accordance with 
perceived risk. The Audit Committee 
regularly reviews the major findings from 
both internal and external audits.
•  The Group has a clearly defined 
organisational structure which allows 
appropriate segregation of duty. Employees 
have prescribed authority levels.
The effectiveness of internal control systems 
are considered and monitored regularly 
(and at least once a year) by the Board of 
Directors and the Audit Committee. The 
Directors confirm that they have reviewed 
the effectiveness of the internal control 
system in accordance with the above 
procedures.
Going concern
The Directors consider, after making 
enquiries, that the Company has adequate 
resources to continue in operational 
existence for the foreseeable future and, 
accordingly, that it is appropriate to adopt 
the going concern basis in the preparation of 
the Accounts.
CORPORATE GOVERNANCE
continued
 CORPORATE GOVERNANCE I ANNUAL REPORT & ACCOUNTS 2004 I 25 This Report has been prepared in accordance 
with the Combined Code and Schedule 7A 
of the Companies Act 1985. The Report has 
been approved by both the Remuneration 
Committee and the Board and will be subject 
to an advisory vote at the Company’s AGM.
As required by The Directors’ Remuneration 
Report Regulations 2002 (the Regulations), 
the following sections of this report have 
been audited by Ernst & Young LLP:
• Directors’ emoluments
• Directors’ pensions details
• Directors’ interests in share capital.
Remuneration policy
The Company’s policy on Executive Director’s 
remuneration for the year ended 26 
September 2004 and subsequent financial 
years is that the overall remuneration package 
should be sufficiently competitive to attract, 
retain and motivate high quality executives 
capable of achieving the Company’s objectives 
and thereby enhancing shareholder value. 
A proportion of the Executive Directors’ 
remuneration is structured so as to link 
rewards to the Group’s performance. The 
details of the application of this policy are 
explained below.
The Company’s policy on Non-executive 
Directors’ remuneration is to provide levels 
of remuneration which reflect the duties, 
responsibilities and time commitment of each 
of the Non-executive Directors, and which are 
sufficient to attract and retain their services 
and are in line with market rates.
Remuneration Committee
The Remuneration Committee is responsible 
for determining the emoluments of the 
Chairman, Executive Directors and for the 
overall reward policy for Senior Executives. 
The Committee’s decisions are ratified only 
by the members of the Board who have 
no personal interest in the outcome. The 
Committee is chaired by Debbie Hewitt 
and its other members are Alan Jackson 
and Nigel Walmsley, all of whom are 
Independent Non-executive Directors
The Remuneration Committee consults 
the Chairman about its proposals for the 
remuneration of the Executive Directors.
The Remuneration Committee has been 
advised and assisted by New Bridge Street 
Consultants LLP , in relation to Directors’ 
remuneration and long-term incentives, 
Watson & Wyatt the Company’s Actuaries 
(pension advice) and the Company Secretary. 
Other members of the Board may, by 
invitation, attend committee meetings except 
where their own remuneration is being 
discussed.
Executive Directors’ remuneration
Base salary
Individual base salaries are reviewed annually 
by the Remuneration Committee and take 
into account individual performance and 
any changes of responsibilities. Pay awards 
throughout the Company generally, and 
specifically within the market place, are 
taken into account by the Remuneration 
Committee in determining the level of pay 
increase awarded to the Executive Directors.
Pension provision
Executive Directors are members of the 
Company Pension Scheme. They accrue 
pension rights at the rate of one-thirtieth of 
basic salary per annum subject only to Inland 
Revenue limits up to normal retirement age 
of 60 years. The Directors are not required to 
contribute to this arrangement. For Executive 
Directors who entered service after 31 May 
1989 the benefits which can be provided 
from the Company Pension Scheme are 
restricted by the operation of the Inland 
Revenue earnings cap.
Annual performance bonus
Executive Directors are eligible for an annual 
bonus of up to 60% of base salary, which 
is consistent with the level of bonus paid 
by other FTSE 250 companies. The level of 
bonus received will depend upon the extent 
to which performance targets set by the 
Remuneration Committee at the start of the 
year have been met.
In the year ending 26 September 2004 
performance targets were set in respect 
of both profitability and other operational 
measures which included independent surveys 
of guest satisfaction, leisure membership 
retention, employee satisfaction, labour 
turnover and performance versus competitors. 
These targets were selected with the objective 
of improving shareholder returns.
If a minimum profitability target of 96% 
of budget is not met, no bonus at all is 
payable. On attaining 96% of budget, a 
bonus is awarded on achievement of the 
profitability target rising to a maximum of 
45% to reflect overachievement and a bonus 
of up to 15% is awarded based on the five 
quantified operational measures. Achieving 
100% of budgeted profitability would earn a 
bonus of 20% of salary.
Other Benefits
Executive Directors are entitled to other 
benefits such as the provision of a company 
car and healthcare insurance consistent with 
our industry norms.
Long-term incentives
Executive Share Option Scheme
Executive Directors may participate in the 
Company’s Executive Share Option Scheme. 
Executive directors participate in both the 
1995 and 2001 Executive Share Option 
Schemes. The 1995 Scheme was closed in 
2001 and, although no further options can 
be granted, options under it may still be 
exercised for a period of ten years from the 
original date of grant. Options under the 
2001 Scheme are granted at the market 
price at the date of grant. Options will not 
normally be exercisable for a period of three 
years from the date of grant. During the year 
the Company reviewed and changed the 
basis on which future options granted under 
the 2001 Executive Share Option Scheme 
become exercisable. As a consequence 
the Company has selected a group of 20 
companies from the Hotel and Leisure sector 
against which to measure performance.
The companies were selected to represent 
a cross section of the FTSE leisure and 
hotels sector, including all UK quoted 
hotel companies and supplemented with a 
number of European hotel companies.  
They are as follows:
Accor 
Arena Leisure  
First Choice Holidays  
Greene King  
Hilton Group  
Holidaybreak  
InterContinental Hotels Group 
Jurys Doyle Hotel Group 
LA Fitness  
Luminar  
Millennium & Copthorne
Mitchells & Butlers
NHH Hotels
Peel Hotels
Punch Taverns
Sol Melia
Stanley Leisure
Wetherspoon (JD) Hotels
Whitbread
Wolverhampton & Dudley Breweries
REPORT ON DIRECTORS’ REMUNERATION
I DE VERE GROUP PLC I REPORT ON DIRECTORS’ REMUNERATION 26 Options will become exercisable as follows:
Rank of Company’s Percentage of Option 
total Shareholder that is exercisable 
Return within the 
Comparator Group
Upper quartile 100%
Second quartile 50%-100% pro rata
Third quartile 0%
Total shareholder return is calculated as 
the growth in value of a share over the 
three year period (taking into account 
reinvested dividends) which is calculated 
by the Company using publicly available 
information.
The comparator group was selected to 
reflect the type of business and size of the 
company.
The Scheme rules were also changed to 
reflect the fact that performance conditions 
are not re-tested and options will lapse if the 
performance conditions are not achieved. 
Maximum awards for Executive Directors are 
usually 150% of salary.
Employee Co-investment Plan (ECIP)
Executive Directors, in common with other 
senior executives, may invest up to half 
of any bonus payable in the Company’s 
shares and, provided a Director remains 
with the Company for a further three years, 
additional matched shares may be granted 
to him depending upon the satisfaction of 
a performance test. The performance test 
is that the right to receive matching shares 
does not vest unless the Company’s ranking 
(based on total shareholder return) at the 
closing month (for awards made in January 
2003 – September 2006) in a comparator 
group, comprising the constituents of the 
Leisure Entertainment and Hotel sector of 
the FTSE Small Cap Index, is at or above 
the middle ranking position. Provided the 
performance test is met participants in 
the ECIP are entitled to receive an award 
of shares equal in number to the amount 
originally deposited together with sufficient 
additional shares to satisfy the tax liability in 
respect of the award.
Savings-related share option schemes
The Company has established savings-
related share option schemes which provide 
a savings and investment opportunity for 
all employees including Executive Directors. 
Share options may normally be exercised 
after three or five years at a price equivalent 
to not less than 80% of the market value of 
the shares at the time of grant.
Performance graph
The graph below shows the total shareholder 
return (with dividends reinvested) for each of 
the last five financial years (beginning  
1 October 1999 and ending 26 September 
2004) of a holding in the Company’s shares 
against the corresponding total return of a 
hypothetical holding of shares by reference 
to which the FTSE Leisure and Hotels Sector 
Index is calculated. 
The FTSE Leisure and Hotels Sector Index 
was selected because it represents a broad 
equity market index of which the Company 
is a member.
Non-executive Directors’ remuneration
Non-executive Directors are awarded fees 
which reflect each of their duties and 
responsibilities and are set at a level in line 
with market rates. The level of their fees 
is determined by the Executive Directors. 
Non-executive Directors are not eligible to 
participate in any long-term incentive plans.
Service contracts
Executive Directors
Each of the Executive Directors have 
rolling service contracts. Notice periods for 
termination by the Company contained 
in the service contracts of all continuing 
Executive Directors are set at one year.
The service contract for Carl Leaver, dated  
25 July 2003, is terminable on six months 
notice by him and contains no provisions for 
pre-determined compensation in the event 
of early termination.
The service contract for Roger Stubbs, 
dated 4 February 2000, is terminable by 
him on 12 months’ notice and provides for 
pre-determined compensation to be paid 
in the event of early termination. This is 
equal to approximately 87.5% of one year’s 
salary, other benefits, pension benefits and 
estimated bonus.
Non-executive Directors
Non-executive Directors are appointed 
initially for three years and annually 
thereafter. Each of the Non-executive 
Directors who served during the year has 
a letter of appointment, which does not 
provide for any notice period, dated as 
follows:
Director Date of Appointment
Lord Daresbury 17 February 2000
Debbie Hewitt 25 February 2002
Alan Jackson 5 April 1993
Steve Morgan 23 March 2000
Nigel Walmsley 20 April 2001
External non-executive directorships
The Company considers that appointments 
as non-executive directors of other 
companies broadens the experience and 
knowledge of the Executive Directors to the 
benefit of the business. Accordingly, such 
an appointment is permitted but it is limited 
to one such appointment for each Executive 
Director at any point in time. Executive 
Directors are allowed to retain the fees paid. 
Executive Directors are required to inform the 
Company if they accept any non-executive 
directorships.
REPORT ON DIRECTORS’ REMUNERATION
continued
 REPORT ON DIRECTORS’ REMUNERATION I ANNUAL REPORT & ACCOUNTS 2004 I
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27 REPORT ON DIRECTORS’ REMUNERATION
continued
Directors’ emoluments
Directors’ emoluments are summarised as follows:
    2004   2003
    
    Other
 Salary Fees Bonus Benefits Total Total
  £000 £000 £000 £000 £000 £000
Chairman:        
Lord Daresbury  – 96 – – 96 96
Executive Directors:        
Carl Leaver*  290 – 134 209 633 106
Roger Stubbs  181 – 82 23 286 209
Paul Dermody**  – – – – – 535
Non-executive Directors:       
Debbie Hewitt  – 33 – – 33 30
Alan Jackson  – 41 – – 41 40
Steve Morgan***  – – – – – –
Nigel Walmsley  – 33 – – 33 30
 
Total  471 203 216 232 1,122 1,046
         
*   Carl Leaver’s other benefits include relocation costs of £148,300 and a supplement of £37,900 to compensate him for the effect of the Inland Revenue earnings cap 
for pension contributions.
** Paul Dermody’s emoluments for 2003 included his salary until the date of his resignation on 13 October 2003 and use of his company car until 25 March 2004.
***  Steve Morgan has waived his director’s fees of £30,750 (2003: £30,000). The Company has agreed to pay an equivalent amount to that of the fees to a charitable 
trust of its choice.
The emoluments of the highest paid director in 2004, Carl Leaver, amounted to £633,000 (2003: Paul Dermody £535,000).
Directors’ pension details
Additional disclosures in respect of Directors’ pensions are as follows:
       
      Transfer value 
      of increase in 
    Accumulated  Increase net of accrued pension 
   Accrued benefits Increase in inflation* in (net of 
   26 September accrued benefits accrued benefits inflation)
   2004 during the year during the year during the year
    £000 £000 £000 £000
Carl Leaver    3.7 3.4 3.4 15 
Roger Stubbs    124 7 3.4 37
* Inflation for the year to 26 September 2004 is assumed to be 3.1%.
Carl Leaver’s pension is subject to an Inland Revenue imposed earnings cap of £102,000 for the tax year 2004/5 and £99,000 for the 2003/4 tax 
year. To compensate him for the effect of this, he receives a salary supplement equal to 20% of salary above the earnings cap. This supplement is 
not included in the calculation of salary reviews, bonus payments, share options or any other salary related benefits.
The pension entitlement shown is that which would be granted at age 60 on leaving service at the end of the year.
I DE VERE GROUP PLC I REPORT ON DIRECTORS’ REMUNERATION 28 REPORT ON DIRECTORS’ REMUNERATION
continued
The transfer value of the accrued benefits for the Executive Directors were as follows:
    Transfer Transfer   
    value as at value as at Movements, 
     26 September  28 September less Directors’ 
     2004  2003 contributions  
     £000 £000 £000
      
Carl Leaver     16 1 15 
Roger Stubbs     1,389 1,181 208
      
The Directors did not contribute to the pension arrangements in either the current or the prior year.
Carl Leaver, who is the highest paid Director, held an accrued annual pension entitlement at 26 September 2004 of £3,700 (2003: £300).
Directors’ interests in share capital
Directors’ beneficial interest in Ordinary shares of the Company as at 26 September 2004 and 28 September 2003 or at date of appointment if 
later were as follows:
      2004 2003
     
Lord Daresbury      5,321,603 5,936,761
Carl Leaver      4,699 4,699
Roger Stubbs
†
      50,479 42,247
Debbie Hewitt      3,663 3,663
Alan Jackson      4,166 401
Steve Morgan      15,559,422 15,559,422
Nigel Walmsley      2,000 2,000
     
†
 2004 shareholding includes 7,383 shares acquired under the Employee Co-investment Plan (2003: 4,692).
Share Options
As at 26 September 2004 and 28 September 2003 the following options over the Company’s shares had been granted or held under the 
Executive Share Option Schemes and Savings Related Share Option Schemes.
     Options held at  Number  Options held at 
    28 September Number granted exercised or 26 September  
   Exercise Price (£) 2003 during the year lapsed 2004
     
Carl Leaver  (a) 3.80 – 145,000 – 145,000
   (e) 4.26 – 107,394 – 107,394
     
    
†
4.00 – 252,394 – 252,394
         
Roger Stubbs  (b) 3.20 42,187 – – 42,187
   (c) 2.99 80,006 – – 80,006 
   (d) 2.85 80,607 – – 80,607
   (e) 4.26 – 65,140 – 65,140
   (f) 2.55 6,617 – (6,617) –
     
    
†
3.29 209,417 65,140 (6,617) 267,940
†
 Weighted average exercise price of options as at 26 September 2004.
(a) Options are exercisable from 4 October 2006 to 3 October 2013. 
(b) Options are exercisable from 8 June 2003 to 7 June 2010. 
(c) Options are exercisable from 16 March 2004 to 15 March 2011. 
(d) Options are exercisable from 9 December 2005 to 8 December 2012. 
(e) Options are exercisable from 10 September 2007 to 9 September 2014. 
(f) Options issued under the Sharesave Scheme exercised on 3 August 2004.
 REPORT ON DIRECTORS’ REMUNERATION I ANNUAL REPORT & ACCOUNTS 2004 I 29 At the year-end all options held by Carl Leaver and Roger Stubbs were “in the money” at weighted average option prices of 400 pence and  
329 pence respectively. On 3 August 2004 Roger Stubbs exercised options over 6,617 shares at 255 pence under the Sharesave Scheme, the 
market price on the day was 414 pence. The gain on exercising these options totalled £10,521. No Directors exercised any share options during 
the prior year.
The market price of the Company’s shares at 26 September 2004 was 437 pence (2003: 377 pence) with a quoted range during the year of  
370 pence to 467.75 pence (2003: quote range 257 pence to 417 pence).
Full details of Directors’ share options are available in the Register of Directors’ Interests.
Employee Co-investment Plan (ECIP)
As at 26 September 2004 no matching shares had been vested with any of the Executive Directors. During the year Roger Stubbs acquired a 
further 2,691 shares under the ECIP .
Approved by the Board of Directors on 1 December 2004 and signed on their behalf by:
Debbie Hewitt
Chairman of the Remuneration Committee
REPORT ON DIRECTORS’ REMUNERATION
continued
STATEMENT OF DIRECTORS’ RESPONSIBILITY
The following statement, which should be 
read in conjunction with the Independent 
Auditor’s Report set out on page 31, is 
made with a view to distinguishing for 
shareholders the respective responsibilities of 
the Directors and of the Auditors in relation 
to the Accounts.
In accordance with the Companies Act 1985, 
the Directors are required to prepare the 
Accounts for each financial year which give 
a true and fair view of the state of affairs of 
the Company and the Group at the end of 
the financial year and of the profit or loss for 
that period. The Directors consider that, in 
preparing the Accounts, the Group has used 
appropriate accounting policies, consistently 
applied and supported by reasonable and 
prudent judgements and estimates, and that 
all accounting standards which they consider 
to be applicable, have been followed.
The Directors have responsibility for ensuring 
that the Group keeps accounting records 
which disclose with reasonable accuracy the 
financial position of the Group, enabling 
them to ensure that the Accounts comply 
with the Companies Act 1985. The Directors 
have a general responsibility to take 
reasonable steps to safeguard the assets of 
the Group and to prevent and detect fraud 
and other irregularities.
I DE VERE GROUP PLC I REPORT ON DIRECTORS’ REMUNERATION 30 INDEPENDENT AUDITORS’ REPORT
to the members of De Vere Group Plc
We have audited the Group’s Accounts for 
the year ended 26 September 2004 which 
comprise the Consolidated Profit and Loss 
Account, Group and Company Balance 
Sheets, Consolidated Cash Flow Statement, 
Group Statement of Total Recognised Gains 
and Losses, Reconciliation of Movement in 
Shareholders’ Funds and the related Notes 1 
to 30. These Accounts have been prepared 
on the basis of the accounting policies 
set out therein. We have also audited the 
information in the Report on Directors’ 
Remuneration that is described as having 
been audited.
This report is made solely to the Company’s 
members, as a body, in accordance with 
Section 235 of the Companies Act 1985. 
Our audit work has been undertaken so 
that we might state to the Company’s 
members those matters we are required 
to state to them in an auditors’ report and 
for no other purpose. 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 are responsible for preparing 
the Annual Report, including the Accounts 
which are required to be prepared in 
accordance with applicable United Kingdom 
law and accounting standards as set out in 
the Statement of Directors’ Responsibilities in 
relation to the Accounts.
Our responsibility is to audit the Accounts 
and the part of the Report on Directors’ 
Remuneration to be audited in accordance 
with relevant legal and regulatory 
requirements, United Kingdom Auditing 
Standards and the Listing Rules of the 
Financial Services Authority.
We report to you our opinion as to whether 
the Accounts give a true and fair view and 
whether the Accounts and the part of the 
Report on Directors’ Remuneration to be 
audited have been properly prepared in 
accordance with the Companies Act 1985. 
We also report to you if, in our opinion, 
the Report of the Directors is not consistent 
with the Accounts, if the company has 
not kept proper accounting records, if we 
have not received all the information and 
explanations we require for our audit, or if 
information specified by law or the Listing 
Rules regarding Directors’ remuneration and 
transactions with the Group is not disclosed.
We review whether the Corporate 
Governance Statement reflects the 
Company’s compliance with the seven 
provisions of the Combined Code specified 
for our review by the Listing Rules, 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 to 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 Accounts. This 
other information comprises the Chairman’s 
Statement, Chief Executive’s Strategy Review, 
Operating Review, Financial Review, Report 
of the Directors, Statement on Corporate 
and Social Responsibility, statement on 
Corporate Governance and Report on 
Directors’ Remuneration. We consider the 
implications for our report if we become 
aware of any apparent misstatements or 
material inconsistencies with the Accounts. 
Our responsibilities do not extend to any 
other information.
Basis of audit opinion
We conducted our audit in accordance 
with United Kingdom Auditing Standards 
issued by the Auditing Practices Board. An 
audit includes examination, on a test basis, 
of evidence relevant to the amounts and 
disclosures in the Accounts and the part of 
the Report on Directors’ Remuneration to be 
audited. It also includes an assessment of the 
significant estimates and judgements made 
by the Directors in the preparation of the 
Accounts, and of whether the accounting 
policies are appropriate to the Group’s 
circumstances, consistently applied and 
adequately disclosed.
We planned and performed our audit 
so as to obtain all the information and 
explanations which we considered necessary 
in order to provide us with sufficient 
evidence to give reasonable assurance that 
the Accounts and the part of the Report on 
Directors’ Remuneration 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 Accounts and the part of 
the Report on Directors’ Remuneration to be 
audited.
Opinion
In our opinion:
•  The Accounts give a true and fair view of 
the state of affairs of the Company and of 
the Group as at 26 September 2004 and 
of the profit of the Group for the year then 
ended; and
•  The Accounts and the part of the Report 
on Directors’ Remuneration to be audited 
have been properly prepared in accordance 
with the Companies Act 1985.
Ernst & Young LLP
Registered Auditor
Manchester
1 December 2004
 INDEPENDENT AUDITORS’ REPORT I ANNUAL REPORT & ACCOUNTS 2004 I 31 Basis of Accounts
The Accounts have been prepared in 
accordance with applicable United Kingdom 
accounting standards under the historical 
cost convention with the exception of hotel 
and health & fitness properties which, 
under the transitional provisions of FRS 15 
– Tangible Fixed Assets, are included at their 
1999 valuations. Since 1999 it has been 
Group policy not to revalue fixed assets.
Basis of consolidation
The consolidated profit and loss account and 
balance sheet combine the Accounts of the 
Company and its subsidiary undertakings 
which are prepared up to 26 September 
2004 and represent the operations of 
the Group for a period of 52 weeks. 
In accordance with Section 230 of the 
Companies Act 1985, no separate profit and 
loss account is presented for the Company.
Results of subsidiary undertakings and 
businesses acquired or sold during the year 
are included from or up to their respective 
dates of acquisition or disposal.
Entities which are jointly controlled by the 
Group and one or more other ventures 
under a contractual arrangement are treated 
as joint ventures. In the Group accounts, 
joint ventures are accounted for using the 
gross equity method.
For acquisitions prior to September 1998, 
the difference between the purchase 
consideration and the fair value of 
identifiable net assets at the date of 
acquisition was dealt with as a movement 
on reserves. On subsequent disposal of 
such businesses such goodwill is taken into 
account in determining the profit or loss on 
sale or closure.
Tangible fixed assets and depreciation
The cost of tangible fixed assets represents 
the actual purchase price paid. Cost 
includes gross interest on capital invested 
in major property development and directly 
attributable costs up to the date of opening 
for trade.
Fixtures and fittings also contain items of 
plant, machinery and equipment including 
computers.
Depreciation is not provided on freehold 
land.
Depreciation is provided to write-off the cost 
or valuation of all other fixed assets over 
their useful lives to their estimated residual 
values and is calculated by the straight-line 
method at the following rates:
  Per annum
Hotels and health &  
fitness buildings 2%
Other properties  2%
Production plant 5% - 20%
Motor vehicles 10% - 50%
Fixtures and fittings 5% - 20%
Leasehold properties are depreciated over 
the shorter of 50 years or their remaining 
useful lives.
The carrying values of tangible fixed assets 
are reviewed for impairment in periods 
if events or changes in circumstances 
indicate that the carrying value may not be 
recoverable.
Assets under construction are not 
depreciated until they are ready for use.
When an asset is fully depreciated and no 
longer in use both the gross amount and the 
aggregate depreciation are eliminated from 
the Accounts.
Stocks
Stocks are valued at the lower of cost 
and net realisable value. Cost comprises 
expenditure directly incurred in purchasing 
or manufacturing stock and includes an 
appropriate amount of overhead.
The value attributed to timeshare stock is the 
cost of building the lodges apportioned to 
each week on the basis of the selling price 
for that week. The selling price for each 
week is dependent upon seasonality.
Certain operating supplies are treated as a 
base stock and renewals and replacements 
of such stock are written-off to the profit 
and loss account as incurred.
Deferred taxation
Full provision is made for deferred tax assets 
and liabilities arising from timing differences, 
between the recognition of gains and 
losses in the financial statements and their 
recognition in tax computations, with the 
exception of timing differences arising from 
the revaluation of, or gains rolled over into 
fixed assets for which there is no binding 
agreement to sell or on the undistributed 
profits of overseas subsidiaries. Deferred 
tax is calculated at the rates at which it is 
estimated the tax will arise. The deferred tax 
provision has not been discounted to net 
present values.
Deferred tax assets are recognised only to 
the extent that the Directors consider that 
it is more likely than not that there will be 
suitable taxable profits from which the future 
reversal of the underlying timing differences 
can be deducted.
Turnover
Turnover is the value of goods and services 
sold to third parties after deducting 
discounts and sales based taxes.
Joining fees in respect of health & fitness 
memberships are accounted for when 
received on the basis that they are not 
refundable. All other fees and subscriptions 
are recognised over the membership period.
Sales of timeshares are recognised at the 
later of the time of sale or the date building 
work on the lodge is complete.
Pensions
Pension costs relating to the Group defined 
benefit scheme are charged to the profit and 
loss account in accordance with the advice 
of independent qualified actuaries based on 
an assessment of the current and expected 
future pensionable payroll.
Actuarial valuations of the pension scheme 
are carried out every three years and surpluses 
or deficiencies calculated on a best estimate 
basis are amortised over the remaining 
service lives of the members, except where 
there is a significant reduction in the number 
of employees in the scheme. Differences 
between the amount charged in the profit 
and loss account and the payments made 
to the schemes are treated as provisions or 
prepayments in the balance sheet.
Payments to money purchase pensions 
schemes are charged as incurred.
ACCOUNTING POLICIES 
which form an integral part of the Accounts
I DE VERE GROUP PLC I ACCOUNTING POLICIES 32 Leases
Assets which are subject to finance leases 
are capitalised and the related depreciation 
charged to the profit and loss account. Lease 
payments are treated as consisting of interest 
and capital, interest being charged to the 
profit and loss account over the term of the 
lease on an actuarial basis. Rental payments 
in respect of operating leases are charged 
to the profit and loss account on a straight-
line basis. Provision has been established for 
future anticipated costs related to leased 
premises no longer occupied by the Group.
Derivatives
The Group uses forward foreign currency 
contracts to reduce exposure to foreign 
exchange rates. The Group also uses interest 
rate swaps to adjust interest rate exposures.
The Group considers its derivative 
instruments qualify for hedge accounting 
when certain criteria are met.
Forward foreign currency contracts
The criteria for forward foreign currency 
contracts are:
•  the instrument must be related to a firm 
foreign currency commitment;
•  it must involve the same currency as the 
hedged item; and
•  it must reduce the risk of foreign currency 
exchange movements on the Group’s 
operations.
The rates under such contracts are used to 
record the hedged item. As a result, gains 
and losses are offset against the foreign 
exchange gains and losses on the related 
financial assets and liabilities, or where the 
instrument is used to hedge a committed 
future transaction, are not recognised until 
the transaction occurs.
Interest rate swaps
The Group’s criteria for interest rate swaps 
are:
•  the instrument must be related to an asset 
or a liability; and 
•  it must change the character of the 
interest rate by converting a variable rate 
to a fixed rate or vice versa.
Interest differentials are recognised by 
accruing with net interest payable. Interest 
rate swaps are not revalued to fair value 
or shown on the Group balance sheet at 
the year-end. If they are terminated early, 
any gain/loss is spread over the remaining 
maturity of the original instrument.
ACCOUNTING POLICIES 
which form an integral part of the Accounts – continued
 ACCOUNTING POLICIES I ANNUAL REPORT & ACCOUNTS 2004 I 33 CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 26 September 2004
   Before
   Exceptional Exceptional Total Total
   items items 2004 2003
   Notes £000 £000 £000 £000
     
Turnover   1 321,778 – 321,778 312,231
         
Cost of sales   2 (184,630) – (184,630) (180,374)
Gross profit    137,148 – 137,148 131,857
Other operating expenses (net)  2/3/4 (79,555) (1,343) (80,898) (84,459)
         
Operating profit/(loss)   57,593 (1,343) 56,250 47,398
         
Continuing operations   1 57,593 – 57,593 54,666
Exceptional items   4 – (1,343) (1,343) (7,268)
         
(Deficit)/surplus on disposal of properties  4 – (4,709) (4,709) 606
Release of surplus provision relating to disposal/ 
 closure of operations   4 – 2,100 2,100 –
         
     57,593 (3,952) 53,641 48,004
Investment income   5 1,214 – 1,214 49
Interest payable   4/6 (13,226) – (13,226) (17,234)
         
Profit/(loss) on ordinary activities before taxation  45,581 (3,952) 41,629 30,819
Taxation on profit on ordinary activities  7 (13,566) 287 (13,279) (5,141)
         
Profit/(loss) on ordinary activities after taxation   32,015 (3,665) 28,350 25,678
Ordinary dividends   8   (15,110) (13,251)
         
Retained profit for the year  23   13,240 12,427
         
Earnings per share   9     
Basic      24.78p 22.84p
Diluted      24.48p 22.77p
Earnings per share excluding exceptional items  9     
Basic      27.98p 24.50p
Diluted      27.64p 24.13p
I DE VERE GROUP PLC I CONSOLIDATED PROFIT AND LOSS ACCOUNT 34 BALANCE SHEETS
at 26 September 2004
   Group Company
   
   2004 2003 2004 2003
  Notes £000 £000 £000 £000
     restated*
     
Fixed assets 
Tangible assets   10 837,841 859,114 10,648 11,298
Investments   11 10,155 10,100 222,399 358,786
   
     847,996 869,214 233,047 370,084
         
Current assets        
Assets held for disposal  12 14,049 – – –
Stocks   13 12,850 14,296 3,359 3,358
Debtors – amounts falling due:       
 within one year   14 55,360 48,037 20,434 49,673
 after more than one year (including deferred tax asset) 14 8,592 9,143 1,107,395 968,165
Cash at bank and in hand   5,284 1,387 2,698 256
         
     96,135 72,863 1,133,886 1,021,452
Creditors: amounts falling due within one year  15 (90,958) (104,883) (29,680) (44,836)
         
Net current assets/(liabilities)   5,177 (32,020) 1,104,206 976,616
         
Total assets less current liabilities   853,173 837,194 1,337,253 1,346,700
         
Creditors: amounts falling due after more than one year 16 (201,220) (213,860) (871,592) (884,544)
         
Provisions for liabilities and charges  19 (54,172) (42,897) (4,145) (4,331)
         
Net assets    597,781 580,437 461,516 457,825
         
Capital reserves        
Called up share capital   22 25,579 25,272 25,579 25,272
Share premium   23 11,185 7,388 11,185 7,388
Revaluation reserve   23 95,867 99,371 – –
Other reserves   23 271,133 271,133 272,633 272,633
Profit and loss account   23 194,017 177,273 152,119 152,532
         
Equity shareholders’ funds   597,781 580,437 461,516 457,825
          
*  Deposits and payments in advance in the amount of £5,408,000 previously held in debtors (amounts falling due within one year) have now been included  
in creditors (amounts falling due within one year).
Approved by the Board of Directors on 1 December 2004 and signed on their behalf by: 
Carl Leaver Director
Roger Stubbs Director
 BALANCE SHEETS I ANNUAL REPORT & ACCOUNTS 2004 I 35 CONSOLIDATED CASH FLOW STATEMENT
for the year ended 26 September 2004
   2004 2003
   Notes £000 £000 £000 £000
Net cash inflow from operating activities
 before reorganisation costs  27  78,062  77,111
Net cash outflow in respect of reorganisation costs    (12,023)  (10,134)
         
Net cash inflow from operating activities    66,039  66,977
         
Returns on investments and servicing of finance      
Interest received    1,214  49 
Interest paid    (10,014)  (11,242)  
Interest element of finance lease rental payments   (2,752)  (3,024) 
        
Net cash outflow from returns on investments 
 and servicing of finance    (11,552)  (14,217)
         
Tax recovered/(paid)     9,152  (473)
         
Capital expenditure and financial investment       
Purchase of tangible fixed assets   (41,898)  (38,191) 
Purchase of investments   –  (2,718) 
Sale of tangible fixed assets   7,901  1,853
         
Net cash outflow from capital expenditure 
 and financial investment    (33,997)  (39,056)
         
Dividends paid     (13,707)  (12,739)
         
Net cash inflow before financing    15,935  492
         
Financing        
Issues of Ordinary share capital (net of costs)   4,104  5,405  
Issue of US $100m Guaranteed senior loan notes  17/28 –  63,331  
Repayment of 7% Convertible subordinated bonds  28 –  (109,673)  
(Decrease)/increase in other amounts borrowed  28 (13,517)  34,211 
 
Net cash outflow from financing    (9,413)  (6,726)
         
Increase/(decrease) in cash  28  6,522  (6,234)
         
 
 
I DE VERE GROUP PLC I CONSOLIDATED CASH FLOW STATEMENT 36 OTHER STATEMENTS
for the year ended 26 September 2004
Statement of total recognised gains and losses
     2004 2003
      £000 £000
    
Total recognised gains and losses since the last annual accounts    28,350 25,678
    
Note of historical cost profits and losses
     2004 2003
      £000 £000
    
Reported profit on ordinary activities before taxation     41,629 30,819
Difference between a historical cost depreciation charge and the actual depreciation
 charge calculated on the revalued amount     240 240
Revaluation surplus realised on disposal of assets     3,264 –
        
Historical cost profit on ordinary activities before taxation    45,133 31,059
    
Historical cost profit for the year retained after taxation and dividends    16,744 12,667
    
Reconciliation of movements in shareholders’ funds
     2004 2003
      £000 £000
    
Profit attributable to Ordinary shareholders of the Company    28,350 25,678
Ordinary dividends      (15,110) (13,251)
    
       13,240 12,427
Shares issued (net of costs)     4,104 5,405
    
Net movement in shareholders’ funds     17,344 17,832
Opening shareholders’ funds     580,437 562,605
    
Closing shareholders’ funds     597,781 580,437
    
 
 OTHER STATEMENTS I ANNUAL REPORT & ACCOUNTS 2004 I 37 NOTES TO THE ACCOUNTS
1. Segmental analysis
All of the Group’s business activities, as described in the Operating Review on pages 10 to 14 and related net assets are situated in the UK and 
all sales and profits are earned from business conducted in the UK that are continuing operations.
   2004   2003
  Operating   Operating
Analysis of turnover, profit and  Turnover profit Net assets Turnover profit Net assets
net assets by class of business £000 £000 £000 £000 £000 £000
         
De Vere pre-exceptional  36,862   34,835  
Exceptional items (Note 4)  –   *(2,423)  
De Vere  187,890 36,862 537,539 183,218 32,412 550,944
         
Village pre-exceptional   15,818   15,636  
Exceptional items (Note 4)  –   *(4,845)  
Village  73,846 15,818 198,002 71,758 10,791 186,957
         
Greens  31,234 3,462 59,307 30,313 2,321 61,688
G&J Greenall  28,808 1,451 5,627 26,942 1,874 3,329
Continuing businesses  321,778 57,593 800,475 312,231 47,398 802,918
Bid defence costs, etc (Note 4) – (1,343) – – – –
Net borrowings  – – (202,694) – – (222,481)
   
   321,778 56,250 597,781 312,231 47,398 580,437
*  The 2003 exceptional items of £2,423,000 in De Vere and £4,845,000 in Village relate to the settlement of the golf and leisure subscription VAT appeal.  
Further details are disclosed in Note 4.
Reconciliation of EBITDA to operating profit
    2004
  
     Bid defence   
 De Vere Village Greens G&J Greenall costs etc Total 2004
  £000 £000 £000 £000 £000 £000
         
EBITDA  50,490 21,284 7,190 2,208 – 81,172
Depreciation  (13,628) (5,466) (3,728) (757) – (23,579)
Operating profit before exceptional  
 items  36,862 15,818 3,462 1,451 – 57,593
Exceptional items charged against  
 operating profit  – – – – (1,343) (1,343)
Operating profit  36,862 15,818 3,462 1,451 (1,343) 56,250
         
  
    2003
  
  De Vere Village Greens G&J Greenall Total 2003
   £000 £000 £000 £000 £000
         
EBITDA   47,513 21,239    6,908 2,567 78,227
Depreciation   (12,678) (5,603) (4,587) (693) (23,561)
Operating profit before exceptional items  34,835 15,636 2,321 1,874 54,666
Exceptional items charged against operating profit  (2,423) (4,845) – – (7,268)
Operating profit   32,412 10,791 2,321 1,874 47,398
        
I DE VERE GROUP PLC I NOTES TO THE ACCOUNTS 38 NOTES TO THE ACCOUNTS
continued
2. Cost of sales and other operating expenses
  
     2004 2003
      £000 £000
    
Cost of sales      184,630 180,374
    
Other operating expenses:    
Distribution costs      850 861
Administration costs      80,048 83,598
    
Total other operating expenses     80,898 84,459
    
Administration and other costs include exceptional costs of £1,343,000 (2003: exceptional costs of £7,268,000) – see Note 4.
  
     2004 2003
      £000 £000
    
Cost and expenses include the following:    
Depreciation of owned tangible fixed assets     23,552 23,523
Depreciation of leased tangible fixed assets     27 38
Repairs and maintenance     6,988 6,351
Operating leases – plant and machinery     1,072 1,301
  – land and buildings     5,812 5,647
    
Fees payable to the Group’s Auditor, Ernst & Young, are analysed as follows:
Statutory audit      90 86
Audit-related reporting      10 9
    
Audit Fees      100 95
    
Further assurance services:    
Convertible bond review     – 14
Combined code review      – 5
Working capital review – aborted acquisition of Premier Lodge    29 –
Review and opinion on GPG bid defence documents     26 –
Review of directors’ and senior managers’ expenses claims and procedures   7 –
    
       62 19
Tax services:    
HMCE Duty Case      – 35
    
Non-audit fees      62 54
    
Both the audit fees and non-audit fees payable to Ernst & Young are reviewed by the Audit Committee to ensure they are cost-effective and 
that the auditors’ independence is maintained. It has been beneficial to the Group to use Ernst & Young for due diligence work relating to 
acquisitions and bid defence due to their expertise and knowledge of De Vere Group.
Fees to other major firms of accountants for non-audit services amounted to £40,000 (2003: £530,000).
  
 NOTES TO THE ACCOUNTS I ANNUAL REPORT & ACCOUNTS 2004 I 39 NOTES TO THE ACCOUNTS
continued
3. Employee costs
  
     2004 2003
Particulars of employee costs including those of Directors:    £000 £000
    
Wages and salaries      94,547 89,929
Social security costs      7,536 6,763
Pension costs – Group Pension Scheme     2,212 1,012
   – Money Purchase Scheme     841 762
        
       105,136 98,466
    
Details of Directors’ emoluments are included in the Report on Directors’ Remuneration on pages 26 to 30.
The average number of persons  
employed by the Group was as follows:     2004 2003
De Vere      4,173 4,049
Village Leisure      2,046 2,040
Greens      700 731
G&J Greenall      95 92
        
       7,014 6,912
         
 
4. Exceptional items
  
     2004 2003
      £000 £000
    
Operating exceptional items:    
Aborted Premier Lodge acquisition costs     (385) –
Bid defence costs      (958) –
De Vere Hotels and Leisure  – VAT on golf and leisure and income (1997-1999)   – (7,268)
     
       (1,343) (7,268)
    
Non-operating exceptional items:    
(Deficit)/surplus on disposal of properties     (4,709) 606
Release of surplus provision relating to the disposal/closure of Tavern    2,100 –
     
       (2,609) 606
    
Exceptional interest charge:    
Interest on golf and leisure VAT assessment     – (2,255)
    
Exceptional costs were incurred on the aborted acquisition of Premier Lodge and in defence of the Guinness Peat Group’s partial offer for a 
further 25% of the Ordinary share capital of the Group.
The 2003 exceptional items relate to VAT and costs of £7,268,000 and interest of £2,255,000 in respect of a De Vere Group subsidiary company 
treating its golf and leisure subscription revenues from April 1997 to December 1999 as exempt from VAT.
The release of surplus provision of £2,100,000 relates to the disposal/closure of the drinks wholesaling business Tavern in 2001 and reflects the 
Group’s success in resolving a number of historical property issues.
Of the current year operating exceptional items £1,343,000 was paid in the year (2003: £nil).
I DE VERE GROUP PLC I NOTES TO THE ACCOUNTS 40 NOTES TO THE ACCOUNTS
continued
5. Investment income
  
     2004 2003
      £000 £000
    
Bank and other interest*     1,214 49
    
* Includes a £1,100,000 interest receipt on a Corporation Tax refund (2003: £28,000).
    
6. Interest payable
  
     2004 2003
      £000 £000
    
Bank overdrafts and loans     167 72
Bonds and other loans      10,438 11,826
Finance lease charges      2,752 3,024
Amortisation of debt issue costs     252 246
Interest capitalised at 5.1% (2003: 4.8%)     (383) (189)
    
       13,226 14,979
Interest on exceptional items relating to the golf and leisure VAT assessment   – 2,255
    
       13,226 17,234
    
7. Taxation on profit on ordinary activities
  
     2004 2003
(i) Analysis of tax charge/(credit)     £000 £000
UK Corporation Tax:    
 – adjustments in respect of prior years     209 (12,229)
 – ACT previously written-off     – (5,060)
    
       209 (17,289)
Overseas tax      409 335
    
Total current tax      618 (16,954)
Total deferred tax* – see Note 21     12,661 22,095
    
       13,279 5,141
    
*  The 2004 deferred tax charge includes a credit of £287,000 relating to the exceptional charge for bid defence costs (2003: charge includes a £1,998,000 credit in 
respect of the exceptional charges relating to the golf and leisure VAT appeal and a prior year adjustment of £12,516,000).
 NOTES TO THE ACCOUNTS I ANNUAL REPORT & ACCOUNTS 2004 I 41 NOTES TO THE ACCOUNTS
continued
7. Taxation on profit on ordinary activities (continued)
  
     2004 2003
(ii) Reconciliation of current tax charge     £000 £000
Profit on ordinary activities before taxation     41,629 30,819
    
Notional tax charge at UK Corporation Tax rate of 30% (2003: 30%)    12,489 9,246
Expenses not deductible for tax purposes     357 818
Deduction for items charged in prior years     (1,908) (3,573)
Capital allowances in excess of depreciation     (6,450) (6,985)
Differences in overseas tax rates     (301) (327)
(Utilisation)/increase of tax losses     (4,854) 1,360
Capital losses/(gains) not attracting tax     1,076 (191)
Adjustment to the tax charge in respect of previous periods    209 (12,229)
Recovery of Advance Corporation Tax previously written-off    – (5,060)
Other items      – (13)
    
       618 (16,954)
    
Deferred tax is calculated at the rates at which it is estimated the tax will arise. The deferred tax provision has not been discounted.
(iii) Factors that may affect future tax charges
As a result of deferred and overseas tax, the Group expects its tax charge for the foreseeable future to remain at an effective rate close to the UK 
Corporation Tax rate of 30%.
Deferred tax assets have not been recognised where the likelihood of realisation fails to meet the ‘more likely than not’ criterion. No provision 
has been made for deferred tax on gains recognised on revaluing property or on the sale of properties where potentially taxable gains have been 
rolled over into replacement assets. At the year-end the total unprovided deferred tax on assets if sold at book value, including the impact of 
gains rolled over against these assets, would be £91 million (2003: £58 million). Such tax would only become payable if the properties were sold 
without it being possible to claim rollover relief and if expenditure on replacement assets were less than anticipated. However, it is not expected 
that any capital gain will be crystallised in the foreseeable future.
 
8. Dividends
  
     2004 2003
      £000 £000
    
Ordinary shares:    
Interim paid on 18 June 2004 at 4.28 pence (2003: 4.0 pence) per share   4,945 4,489
Final proposed to be paid on 4 March 2005 to members on the Register on 4 February 2005
  at 8.82 pence (2003: 7.70 pence) per share     10,165 8,762
    
       15,110 13,251
    
The provisional ex-dividend date for the Ordinary shares is 2 February 2005.
I DE VERE GROUP PLC I NOTES TO THE ACCOUNTS 42 NOTES TO THE ACCOUNTS
continued
9. Earnings per share
Basic earnings per share is calculated with reference to the earnings attributable to Ordinary shareholders of £28,350,000 (2003: £25,678,000) 
and the weighted average number of Ordinary shares in issue during the year of 114,418,000 (2003: 112,402,000).
Diluted earnings per share is basic earnings per share adjusted for all dilutive share options and the effect of the conversion into fully paid 
Ordinary shares of all Convertible subordinated bonds for 2003. Diluted earnings for the year were £28,350,000 (2003: £31,038,000) and the 
weighted average number of Ordinary shares was 115,832,000 (2003: 136,333,000).
Adjusted earnings per share figures are disclosed based on the elimination from earnings of exceptional items.
  
     2004 2003
Earnings per share     Notes pence pence
Basic:    
Earnings per Ordinary share of 22 
2
/
9
 pence     24.78 22.84
Exceptional items net of taxation    4/7 3.20 1.66
    
Adjusted basic earnings per share     27.98 24.50
    
Fully diluted:    
Earnings per Ordinary share of 22 
2
/
9
 pence     24.48 22.77
Exceptional items net of taxation    4/7 3.16 1.36
    
Adjusted diluted earnings per share     27.64 24.13
    
10. Tangible fixed assets
  
     2004 2003
Group      £000 £000
    
Properties:    
Hotels and health & fitness properties     705,931 716,784
Other properties      7,221 7,385
    
       713,152 724,169
Comprising:    
Freehold      552,462 565,961
Long leasehold      108,287 107,543
Short leasehold      52,403 50,665
       
Fixtures and fittings      124,689 134,945
    
Net book values      837,841 859,114
    
Historical cost of properties    
Cost      629,051 634,004
Depreciation based on cost     (10,737) (8,246)
    
Historical net book amounts     618,314 625,758
    
 NOTES TO THE ACCOUNTS I ANNUAL REPORT & ACCOUNTS 2004 I 43 NOTES TO THE ACCOUNTS
continued
10. Tangible fixed assets (continued)
   Hotels and 
   health & fitness Other Fixtures  
   properties properties and fittings Total
Group    £000 £000 £000 £000
Gross amounts        
At 28 September 2003    725,177 8,198 191,354 924,729
Additions during year    26,798 – 16,279 43,077
Fully depreciated assets   – – (14,574) (14,574)
Disposals    (22,700) (135) (7,472) (30,307)
Transfer to current assets   (12,420) – (3,093) (15,513)
         
At 26 September 2004    716,855 8,063 182,494 907,412
         
At cost    234,448 8,063 182,494 425,005
At valuation 1999    482,407 – – 482,407
         
     716,855 8,063 182,494 907,412
         
Aggregate depreciation       
At 28 September 2003    8,393 813 56,409 65,615
Charge for the year    2,942 29 20,608 23,579
Fully depreciated assets   – – (14,574) (14,574)
Depreciation eliminated on disposal   (265) – (3,321) (3,586)
Transfer to current assets   (146) – (1,317) (1,463)
         
At 26 September 2004    10,924 842 57,805 69,571
         
Net book values at 26 September 2004   705,931 7,221 124,689 837,841
         
Net book values at 28 September 2003   716,784 7,385 134,945 859,114
         
 
The net book value of tangible fixed assets includes an amount of £52,979,000 (2003: £53,005,000) in respect of hotel assets held under  
finance leases.
The aggregate amount of capitalised interest included in fixed assets is £6,573,000 (2003: £6,211,000).
Included above are assets under construction amounting to £12,103,000 (2003: £10,053,000). These assets are not depreciated until  
ready for use.
I DE VERE GROUP PLC I NOTES TO THE ACCOUNTS 44 NOTES TO THE ACCOUNTS
continued
10. Tangible fixed assets (continued)
     2004 2003
Company      £000 £000
Properties:    
Freehold      7,183 7,347
Short leasehold      38 38
    
       7,221 7,385
Fixtures and fittings      3,427 3,913
    
Net book values      10,648 11,298
    
    
     Fixtures
    Properties and fittings Total
Company     £000 £000 £000
         
Gross amounts        
At 28 September 2003     8,198 7,468 15,666
Additions during year     – 243 243
Disposals     (135) – (135)
         
At 26 September 2004     8,063 7,711 15,774
         
Aggregate depreciation       
At 28 September 2003     813 3,555 4,368
Charge for the year     29 729 758
         
At 26 September 2004     842 4,284 5,126
         
Net book values at 26 September 2004    7,221 3,427 10,648
         
Net book values at 28 September 2003    7,385 3,913 11,298
         
 
There were no assets held under finance leases and no capitalised interest included within fixed assets in either the current or prior year.
 NOTES TO THE ACCOUNTS I ANNUAL REPORT & ACCOUNTS 2004 I 45 NOTES TO THE ACCOUNTS
continued
11. Investments
   Loans Listed Unlisted Total
Group    £000 £000 £000 £000
         
At cost        
At 28 September 2003    1,000 1,337 8,950 11,287
Disposals    – – (13) (13)
Share of retained profit of joint ventures   – – 68 68
         
At 26 September 2004    1,000 1,337 9,005 11,342
         
Provisions        
At 28 September 2003 and 26 September 2004   – 1,187 – 1,187
         
Net book values at 26 September 2004   1,000 150 9,005 10,155
         
Net book values at 28 September 2003   1,000 150 8,950 10,100
         
 
     2004 2003
Company      £000 £000
         
Subsidiary undertakings     217,496 353,870
Other investments      4,903 4,916
         
       222,399 358,786
         
 
Subsidiary undertakings     £000
        
At cost        
At 28 September 2003      353,870
Additions      7,931
Repayments      (144,305)
        
At 26 September 2004      217,496
        
Provisions      
At 28 September 2003 and 26 September 2004     –
        
Net book values at 26 September 2004     217,496
        
Net book values at 28 September 2003     353,870
        
The additions in the year reflect the increase in value of an intra-group convertible bond issued by a subsidiary undertaking.  
The convertible bond was repaid at the end of the year.
I DE VERE GROUP PLC I NOTES TO THE ACCOUNTS 46 NOTES TO THE ACCOUNTS
continued
11. Investments (continued)
     Joint
    Listed ventures Total
Company     £000 £000 £000
         
At cost        
At 28 September 2003     1,337 4,766 6,103
Disposals     – (13) (13)
         
At 26 September 2004     1,337 4,753 6,090
         
Provisions        
At 28 September 2003 and 26 September 2004    1,187 – 1,187
         
Net book values at 26 September 2004    150 4,753 4,903
         
Net book values at 28 September 2003    150 4,766 4,916
         
 
All investments are in companies incorporated in England and Wales. Listed investments are listed on the Alternative Investment Market (AIM).
The fair value of investments at 26 September 2004 was £10,685,000 (Group) (2003: £10,236,000) and £5,433,000 (Company) (2003: 
£5,052,000). Listed investments include a 16% holding in the Ordinary shares of Paramount plc. The market value of listed investments at  
26 September 2004 was £667,000 (2003: £286,000).
Joint venture investments in the Company relate, principally, to a 50% interest in Daresbury Park Developments Limited, the company developing 
the Group’s land interests near its head office. In the Group, joint venture investments also include a 50% interest in a joint venture company, 
Bolton Whites Hotel Limited which owns and operates the De Vere Whites hotel. The Group’s share of gross assets and liabilities in joint ventures 
is as follows:
     
     2004 2003
      £000 £000
        
Share of gross assets      13,470 12,272
Share of gross liabilities     (7,371) (6,228)
Preference share capital held     2,906 2,906
        
Group’s total interest      9,005 8,950
        
Daresbury Park Developments Limited prepares accounts to 31 December for each financial period. Bolton Whites Hotel Limited prepares 
accounts up to 30 June for each financial year.
The market value of other investments, as adjusted by provisions, is not materially different from book value.
Subsidiary undertakings
The principal subsidiary undertakings in which the Company holds 100% of the issued share capital are set out below. All subsidiary 
undertakings are registered in England and Wales and operate principally in the United Kingdom.
Subsidiary Company  Main Activity
De Vere Hotels & Leisure Limited*  Hoteliers and leisure club operators 
De Vere Golf & Leisure Limited* Golf course and leisure club operators
* Indirect holding
 NOTES TO THE ACCOUNTS I ANNUAL REPORT & ACCOUNTS 2004 I 47 NOTES TO THE ACCOUNTS
continued
12. Assets held for disposal
  
   Group  Company
      
   2004 2003 2004 2003
    £000 £000 £000 £000
         
Fixed assets held for disposal   14,049 – – –
         
         
 
13. Stocks
  
   Group  Company
      
   2004 2003 2004 2003
    £000 £000 £000 £000
Raw materials    1,897 1,732 1,897 1,732
Finished goods    4,880 5,052 1,373 1,535
Consumable stores    2,269 2,251 89 91
Resort Ownership stocks   3,804 5,261 – –
         
     12,850 14,296 3,359 3,358
         
 
The difference between purchase price and production cost of stocks and their replacement cost is not material.
14. Debtors
  
   Group  Company
      
   2004 2003 2004 2003
    £000 £000 £000 £000 
     restated*
         
Due within one year:       
Trade debtors    19,875 18,496 5,697 3,919
Loans to employees    129 15 – 15
Other debtors    2,756 4,521 583 721
Property disposal proceeds   14,254 – – –
Due from subsidiary undertakings   – – 6,273 27,586
Due from joint ventures (see Note 30)   1,395 1,543 – –
Prepayments and accrued income   7,577 4,318 – –
Corporation Tax    9,374 19,144 6,963 16,631
Value Added Tax    – – 918 801
         
     55,360 48,037 20,434 49,673
         
Due after more than one year:       
Due from subsidiary undertakings   – – 1,107,261 963,185
Deferred tax asset    – – 134 4,980
Other debtors    8,592 9,143 – –
         
     8,592 9,143 1,107,395 968,165
           
*  Trade debtors have been reclassified to exclude deposits and payments in advance now held in accruals and deferred income £5,443,000. The corresponding amount 
for 2003 was £5,408,000 which has been restated in the table above and Note 15.
I DE VERE GROUP PLC I NOTES TO THE ACCOUNTS 48 NOTES TO THE ACCOUNTS
continued
15. Creditors: amounts falling due within one year
  
   Group  Company
      
   2004 2003 2004 2003
   Note £000 £000 £000 £000 
     restated
  
Short-term loans repayable on demand  17 6,337 6,899 6,337 6,899
Bank overdrafts   17 411 3,036 – 7,757
Net obligations under finance leases  17 10 73 – –
Trade creditors    22,021 23,155 4,461 5,409
Due to subsidiary undertakings   – – 171 2,178
Value Added Tax    5,960 4,131 – –
Social security and PAYE   2,095 1,837 134 148
Other creditors    14,801 29,425 2,999 8,102
Accruals and deferred income   29,158 27,565 5,413 5,581
Proposed dividends    10,165 8,762 10,165 8,762
         
     90,958 104,883 29,680 44,836
         
 
16. Creditors: amounts falling due after more than one year 
  
   Group  Company
      
   2004 2003 2004 2003
   Note £000 £000 £000 £000
         
$100m 6.4% Guaranteed senior loan notes  17 63,133 63,108 63,133 63,108
Unsecured bank loans – revolving credit facility  17 86,524 99,296 86,524 99,296
Hotel finance lease obligations  17 51,531 51,456 – –
Other finance leases   17 32 – – –
Due to subsidiary undertakings  17 – – 721,935 722,140
         
     201,220 213,860 871,592 884,544
         
 
 NOTES TO THE ACCOUNTS I ANNUAL REPORT & ACCOUNTS 2004 I 49 NOTES TO THE ACCOUNTS
continued
17. Borrowings
  
   Group  Company
      
   2004 2003 2004 2003
   Notes £000 £000 £000 £000
Amounts falling due within one year:
Loan notes  (i)  4,368 4,804 4,368 4,804
Unsecured loan stocks 2004-2013   1,969 2,095 1,969 2,095
          
Short-term loans repayable on demand  15 6,337 6,899 6,337 6,899
Finance leases   15 10 73 – –
Bank overdrafts  (ii)  15 411 3,036 – 7,757
Less – cash at bank and in hand   (5,284) (1,387) (2,698) (256)
          
      1,474 8,621 3,639 14,400
          
Amounts falling due after more than one year:
$100m 6.4% Guaranteed senior loan notes (iii) 16 63,133 63,108 63,133 63,108
Revolving credit facility  (iv) 16 86,524 99,296 86,524 99,296
Hotel finance leases  (v) 16 51,531 51,456 – –
Other finance leases   16 32 – – –
Due to subsidiary undertakings (vi) 16 – – 721,935 722,140
     
     201,220 213,860 871,592 884,544
         
Net borrowings   28 202,694 222,481 875,231 898,944
         
 
 Maturity schedule of borrowings due in more than one year:
 By instalments:        
  Due in more than one but not more than two years  32 – – –
 Other than by instalments:       
  Due in more than ten years   51,531 51,456 721,935 722,140
   Due in more than five but not more than ten years   63,133 63,108 63,133 63,108
  Due in more than two but not more than five years  86,524 99,296 86,524 99,296
          
      201,220 213,860 871,592 884,544
(i)  The annual rate of interest on these loan notes is 1% below LIBOR. As the amount of outstanding loan notes is less than £5 million, the 
Company may redeem the outstanding balance on 30 days notice. Otherwise the loan notes will be repaid in full on 10 April 2005.
(ii)  The Group has a bank overdraft facility of £25 million (2003: £25 million) which remained undrawn at both year-ends; this facility is 
reviewed by the bank on an annual basis.
(iii)  The principal and interest payable on these loan notes have been hedged into sterling for the full term of the notes. Sterling interest on the US 
$100 million is now fixed at a rate of 7.15% for the remaining term of the notes. The loan notes are repayable in full on 18 December 2012.
(iv)  At the year-end £88 million of the revolving credit facility remains undrawn (2003: £75 million). The facility expires in October 2006.  
The interest on the facility is determined by reference to LIBOR.
(v)  The hotel finance lease obligations mature between 31 December 2022 and 23 August 2024. Interest payable is based on LIBOR.
(vi)  The amounts due from the Company to subsidiary undertakings are a mixture of interest bearing and non-interest bearing loans. Interest 
payable is based on Base Rate.
The carrying value of debt at 26 September 2004 secured on fixed assets was £51,573,000 (2003: £51,529,000).
I DE VERE GROUP PLC I NOTES TO THE ACCOUNTS 50 NOTES TO THE ACCOUNTS
continued
18. Derivatives and financial instruments
An explanation of the Group’s objectives, policies and strategies for the role of derivatives and other financial instruments in creating and 
changing the risks of the Group in its activities can be found on page 16.
With the exception of the analysis of currency exposures the disclosures below exclude short-term debtors and creditors.
Interest rate management
Weighted average interest rates applicable to fixed rate and floating rate borrowings and assets were as follows:
  
   2004  2003
      
    £000 % £000 %
         
Borrowings – fixed rate*   123,133 6.0 103,181 6.2
Borrowings – floating rate   84,845 5.7 120,687 4.5
Cash at bank and in hand – floating rate   (5,284) 3.8 (1,387) 2.5
         
Net borrowings    202,694  222,481  
Long-term debtors – fixed rate   (8,592) 6.1 (9,143) 5.2
         
     194,102 5.9 213,338 5.5
         
* The weighted average period for the fixed rate debt is 7.1 years (2003: 7.2 years).
Maturity of financial instruments is disclosed in Note 17.
Fixed rate borrowings comprise US $100 million Guaranteed senior loan notes which have been hedged into sterling at a value of £63,133,000 
(net of costs) until maturity and three £20 million interest rate swaps fixing the interest rate at 5.31%, 3.90% and 5.06% on an element of the 
Group’s floating rate borrowings. The amount of available borrowing facilities at year-end is disclosed in the Financial Review on page 16, which 
also includes an assessment of the estimated impact of a change in interest rates on the Group’s results. The weighted average period of long-
term debtors is 4.5 years (2003: 5.7 years).
The interest rate applicable to floating rate debt is determined by reference to LIBOR or Base Rate.
Currency exposure
Transactions conducted in foreign currencies are not significant in the context of the Group’s overall business.
All financial assets and liabilities are denominated in sterling, except for the US $100 million Guaranteed senior loan notes for which all cash 
flows have been hedged into sterling.
 
Financial instruments
Set out below is a year-end comparison of current and book values of the Group’s financial instruments by category. Where available, market 
values have been used to determine fair values. Where market values are not available, fair values have been calculated for interest swap 
contracts using appropriate pricing models.
Short-term debtors and creditors have been excluded as permitted by FRS 13.
   2004 2004 2003 2003
   Book value Fair value Book value Fair value
    £000 £000 £000 £000
Investments    (10,155) (10,685) (10,100) (10,235)
Cash at bank and in hand (at floating rate based on LIBOR)  (5,284) (5,284) (1,387) (1,387)
Short-term loans, bank overdrafts, and finance leases   6,758 6,758 10,008 10,008
Long-term borrowings    201,220 194,035 213,860 211,711
Long-term debtors – interest bearing (up to 10 years)  (8,592) (8,592) (9,143) (9,143)
Interest rate contracts – positive fair values   – (847) – (551)
  – negative fair values
†
   – 8,565 – 4,454
         
†
 The unrecognised losses on the interest rate contracts disclosed in the table above will be recognised over 7.6 years (2003: 8.6 years).
 NOTES TO THE ACCOUNTS I ANNUAL REPORT & ACCOUNTS 2004 I 51 NOTES TO THE ACCOUNTS
continued
19. Provisions for liabilities and charges
    Deferred
     tax Property Total 
     £000 £000 £000
  
Group       
At 28 September 2003     34,357 8,540 42,897
Utilised during the year    – (1,386) (1,386)
Created during the year    12,661 – 12,661
        
At 26 September 2004    47,018 7,154 54,172
        
Company       
At 28 September 2003     – 4,331 4,331
Utilised during the year    – (186) (186)
        
At 26 September 2004    – 4,145 4,145
        
The property provision represents rents payable and allowance for dilapidations on vacant leasehold properties. The majority of the property 
provision remaining at 26 September 2004 is expected to be utilised over the next six years.
An analysis of the provision for deferred tax is given in Note 21.
 
20. Pensions
a) Pensions
The Group operates a contracted-out defined benefit scheme, The Greenalls Group Pension & Life Assurance Scheme (the Scheme), the assets of 
which are held in a separate trustee administered fund. The Scheme is now closed to new members. Contributions are paid into the Scheme in 
accordance with the recommendations of an independent actuary on the basis of triennial valuations.
The latest formal triennial actuarial valuation was carried out on 5 April 2003 and this disclosed that the value of the Scheme’s assets totalled 
£197 million at market value, which represented 83% of the benefits that had accrued to members after allowing for expected future increases 
in earnings. The liabilities were valued on a market-related projected unit basis. Under this basis the current service cost will increase as the 
members of the Scheme approach retirement.
Following the disposal of the Pubs & Restaurants business, in December 1999, and based on subsequent advice from the Group’s actuaries, the 
Group undertook to improve the funding level of the Scheme by contributing an additional £40 million to the Scheme payable over a four year 
period. The final instalment due under this commitment of £2.5 million was paid on 1 November 2003.
After consultation with the Group’s actuaries and the Pension Trustees, the Group has agreed to make additional contributions of £2.8 million 
per annum from February 2004 over the next thirteen years and this will be reviewed at the next triennial valuation in April 2006. The additional 
contributions will be increased annually in line with wage inflation.
The SSAP 24 charge for the year based on best estimate valuation was £2.2 million.
The Group also operates a defined contribution Group Personal Pension Plan for employees in which liabilities are restricted to the level of 
contributions paid into the Scheme.
 
The assumptions, which have had the most significant effect on the funding of the Scheme, are set out in the following table:
  
       %
Price inflation       2.50
Pension increases (non-guaranteed minimum pension)      3.00
Return on investments (net of investment costs and expenses)     5.75
Increase in pensionable earnings      4.25
I DE VERE GROUP PLC I NOTES TO THE ACCOUNTS 52 NOTES TO THE ACCOUNTS
continued
20. Pensions (continued)
b) Pensions – FRS 17 Retirement Benefits
The valuation used for FRS 17 disclosures has been based on data being used for the 5 April 2003 valuation and updated by Watson Wyatt LLP 
to take account of the requirements of FRS 17 in order to assess the liabilities of the Scheme at 26 September 2004. Scheme assets are stated at 
their market value at 26 September 2004. The following assumptions were used to determine the value of the Scheme’s liabilities:
    2004 2003 2002
     % % %
         
Discount rate     5.65 5.50 5.60
Inflation rate     2.80 2.50 2.25
Increase to deferred benefits during deferment    2.80 2.50 2.25
Increases to pensions in payment    3.00 3.00 3.00
Salary increases     4.30 4.25 4.00
         
 
The assets in the Scheme and the expected rate of return were:
  Value at Long-term rate of 
  the year-end return at the year-end
 2004 2003 2002 2004 2003 2002
  £m £m £m % % %
 
Equities  82.9 66.9 55.6 8.2 8.3 8.0
Fixed interest gilts  60.3 63.6 63.1 4.8 4.7 4.5
Long-dated corporate bonds 61.2 69.6 66.0 5.7 5.5 5.6
Cash  5.6 8.0 6.5 4.3 4.0 3.0
Other  1.9 2.0 2.0 – – –
         
Total market value of assets 211.9 210.1 193.2 
Present value of Scheme liabilities (243.6) (242.7) (242.6)
         
Deficit in the Scheme  (31.7) (32.6) (49.4) 
Related deferred tax asset 9.5 9.8 14.8 
Net pension liability under FRS 17 (22.2) (22.8) (34.6)
Liability accrued in Group accounts 
 (net of deferred tax)  – 1.7 8.8 
         
Deficit  (22.2) (21.1)  (25.8)
 NOTES TO THE ACCOUNTS I ANNUAL REPORT & ACCOUNTS 2004 I 53 NOTES TO THE ACCOUNTS
continued
20. Pensions (continued)
      2004 2003 
      £m £m
    
Net assets        
Group net assets at the year end     597.8 580.4 
Pension liability under FRS 17 excluding special contributions payable from Group   (22.2) (22.8) 
Payable from Group (net of deferred tax)     – 1.7
Deficit      (22.2) (21.1)
        
Net assets including pension liability     575.6 559.3
        
Reserves        
Profit and loss reserve at the year-end     194.0 177.3 
Pension liability under FRS 17 excluding special contributions payable from Group   (22.2) (22.8) 
Payable from the Group (net of deferred tax)     – 1.7 
Deficit      (22.2) (21.1)
Profit and loss reserve      171.8 156.2
     2004 2003
Analysis of the amount charged to operating profit*    £m £m
    
Current service cost      1.0 1.1
Past service cost      – –
    
Total charge to operating profit     1.0 1.1
    
Analysis of the amount charged to other finance costs*    
Expected return on pension Scheme assets     (12.7) (11.8)
Interest on pension Scheme liabilities     13.0 13.3
    
Net charge to finance costs     0.3 1.5
    
Analysis of the proforma amount recognised in statement     2004 2003
of total recognised gains and losses (‘STRGL’)*     £m £m
Difference between the expected and actual return on assets    2.1 (4.5)
Experience losses/(gains) arising on the Scheme liabilities    1.8 (15.6)
Changes in assumptions underlying the present value of the Scheme liabilities   (0.5) 11.5
    
Total loss/(gain) recognised in STRGL before adjustment for tax    3.4 (8.6)
    
* Disclosed on a proforma basis under the transitional rules of FRS 17.
I DE VERE GROUP PLC I NOTES TO THE ACCOUNTS 54 NOTES TO THE ACCOUNTS
continued
20. Pensions (continued)
   Scheme
   excluding
   accrued Accrued Total Total
Analysis of the movement in deficit in the Scheme  liability liability 2004 2003
during the year    £m £m £m £m
Deficit in Scheme at start of the year (excluding deferred tax asset)  (32.6) 2.5 (30.1) (36.9)
Current service cost    (1.0) – (1.0) (1.1)
Contributions paid (net of special contributions)   5.6 (2.5) 3.1 0.8
Past service costs    – – – –
Other financial charge    (0.3) – (0.3) (1.5)
Actuarial (loss)/gain    (3.4) – (3.4) 8.6
        
Deficit in Scheme at end of the year (excluding deferred tax asset)  (31.7) – (31.7) (30.1)
        
     2004 2003 2002 
History of experience gains and losses    £m £m £m
Difference between the expected and actual return on assets   2.1 (4.5) 11.0
Percentage of Scheme assets at end of year    1% 2% 6%
    
Experience losses/(gains) arising on the Scheme liabilities   1.8 (15.6) (2.9)
Percentage of Scheme liabilities at end of year    1% 6% 2%
    
Total amount recognised in statement of total recognised (gains) and losses  3.4 (8.6) 27.1
Percentage of Scheme liabilities at end of year    1% 4% 11%
    
 NOTES TO THE ACCOUNTS I ANNUAL REPORT & ACCOUNTS 2004 I 55 NOTES TO THE ACCOUNTS
continued
21. Deferred taxation
   Group Company
      
   2004 2003 2004 2003
    £000 £000 £000 £000
         
Capital allowances in excess of depreciation   (49,611) (49,495) (747) (843)
Tax losses carried forward   1,526 12,712 – 3,833
Deferred tax on pension provision   608 750 881 750
Other timing differences    459 1,676 – 1,240
         
Net deferred tax (liability)/asset   (47,018) (34,357) 134 4,980
         
 
   Group Company
      
Reconciliation of the movement in deferred tax    2004 2003 2004 2003
(liability)/asset during the year   £000 £000 £000 £000
         
Net (liability)/asset at start of year   (34,357) (12,262) 4,980 27,340
         
Deferred tax charge in the profit and loss account for the year (Note 7)  (12,661) (22,095) (4,846) (22,360)
         
Net (liability)/asset at end of year   (47,018) (34,357) 134 4,980
         
 
22. Share capital
     2004 2003
Authorised      £000 £000
         
250,534,997 Ordinary shares of 22 
2
/
9
 pence each at September 2003 and 2004   55,674 55,674
         
 
     2004 2003
Allotted, called up and fully paid     £000 £000
         
115,103,775 (2003: 113,721,514) Ordinary shares of 22 
2
/
9
 pence each    25,579 25,272
         
 
During the year 1,138,672 Ordinary shares (2003: 870,742) were issued on the exercise of options under the De Vere Executive Share Option 
Scheme at prices ranging between 284 pence and 360 pence. The total cash consideration amounted to £3,473,000.
The Company issued 243,589 (2003: 106,850) Ordinary shares at prices ranging between 237 pence and 354 pence per share under the  
De Vere Sharesave Scheme. The total cash consideration amounted to £635,000.
I DE VERE GROUP PLC I NOTES TO THE ACCOUNTS 56 NOTES TO THE ACCOUNTS
continued
22. Share capital (continued)
The 2001 De Vere Group Plc Executive Share Option Scheme (“The 2001 Scheme”)
As at 26 September 2004 options outstanding in respect of grants made under the 2001 Scheme were as follows:
     Ordinary
     shares Option
Option exercise period     under option prices
Up to 8 September 2014     2,847,026 285p-426p
         
 
The number of options outstanding at 28 September 2003 was 2,451,426 at prices ranging between 285 pence and 360 pence.
During the year options were awarded over 145,000 Ordinary shares at 380 pence and 1,139,888 at 426 pence, exercisable between October 
2006 and September 2014.
The De Vere Group Plc Executive Share Option Scheme 1995 (“Executive Scheme”)
As at 26 September 2004 options outstanding in respect of grants made under the Executive Scheme were as follows:
     Ordinary
     shares Option
Option exercise period     under option price
         
Up to 7 June 2010      296,889 320p
         
 
The number of options outstanding at 28 September 2003 was 1,013,573 at prices ranging between 284 pence and 579 pence per share.
The De Vere Sharesave Schemes 1981, 1995 and 2002 (“Sharesave Scheme”)
As at 26 September 2004 options outstanding in respect of grants made under the Sharesave Scheme were as follows:
     Ordinary
     shares Option
Option exercise period     under option prices
         
Up to 1 September 2008     1,044,699 237p-354p
         
 
The number of options outstanding at 28 September 2003 was 1,333,549 at prices ranging between 237 pence and 354 pence.
During the year options were awarded over 278,867 Ordinary shares at 345 pence, exercisable between August 2007 and February 2010.
Share options issued since 7 November 2002
Under IFRS a profit and loss charge will be made in respect of share based payments. The level of charge will be based on any options issued 
since 7 November 2002 that have not vested prior to 26 September 2004. As at the year-end there are 2,764,595 of share options issued since 
7 November 2002 that have yet to vest. The weighted average price of these options is 353 pence.
 NOTES TO THE ACCOUNTS I ANNUAL REPORT & ACCOUNTS 2004 I 57 NOTES TO THE ACCOUNTS
continued
23. Reserves
       Profit  
    Share Revaluation Other and loss
   premium reserve reserve account Total 
Group   £000 £000 £000 £000 £000
At 28 September 2003   7,388 99,371 271,133 177,273 555,165
Premium on options exercised during the year  3,801 – – – 3,801
Costs of share issues   (4) – – – (4)
Realised revaluation surplus  – (3,504) – 3,504 –
Retained profit for the period  – – – 13,240 13,240
         
At 26 September 2004  11,185 95,867 271,133 194,017 572,202
         
 
At 26 September 2004 the net cumulative amount of goodwill set against reserves was £52.5 million (2003: £52.5 million).
       Profit  
     Share Other and loss
    premium reserve account Total 
Company    £000 £000 £000 £000
At 28 September 2003    7,388 272,633 152,532 432,553
Premium on options exercised during the year   3,801 – – 3,801
Costs of share issues    (4) – – (4)
Profit for the year before dividends   – – 14,697 14,697
Dividends    – – (15,110) (15,110)
         
At 26 September 2004   11,185 272,633 152,119 435,937
Comprising:        
Distributable    – – 152,119 152,119
Non-distributable    11,185 272,633 – 283,818
         
 
24. Capital commitments
   Group Company
      
   2004 2003 2004 2003
    £000 £000 £000 £000
         
Under contracts    31,761 16,377 – –
I DE VERE GROUP PLC I NOTES TO THE ACCOUNTS 58 NOTES TO THE ACCOUNTS
continued
25. Commitments under operating leases for the next financial year
   Group  Company
      
   2004 2003 2004 2003
    £000 £000 £000 £000
         
Leases of land and buildings ending:       
After five years    6,743 5,804 – –
         
     6,743 5,804 – –
         
Other operating leases ending:       
Within one year    241 350 18 23
Between one and five years   752 1,032 115 67
         
     993 1,382 133 90
         
 
26. Contingent liabilities
The Company has guaranteed the overdrafts of certain subsidiary undertakings/joint ventures which at 26 September 2004 amounted to  
£31.5 million (2003: £12.8 million). Included within this amount is £2 million (2003: £2 million) related to joint ventures.
The Company has guaranteed the finance and maintenance obligations of employees who have purchased cars under the Employee Car 
Ownership Scheme. As at 26 September 2004 these obligations amounted to £0.9 million (2003: £nil).
27. Reconciliation of operating profit to net cash inflow from operating activities
     2004 2003
      £000 £000
         
Operating profit      56,250 47,398
Depreciation      23,579 23,561
Decrease in provision for liabilities     (1,386) (852)
Share of retained profit of joint ventures     (68) (578)
Decrease/(increase) in stocks     1,446 (218)
(Increase)/decrease in debtors     (2,382) 5,008
Increase in creditors      623 2,792
         
Net cash inflow from operating activities     78,062 77,111
         
 
 NOTES TO THE ACCOUNTS I ANNUAL REPORT & ACCOUNTS 2004 I 59 NOTES TO THE ACCOUNTS
continued
28. Reconciliation of net cash flow to movement in net borrowings
     2004 2003
     Note £000 £000
         
Increase/(decrease) in cash     6,522 (6,234)
Cash outflow from movement in borrowings     13,517 12,131
         
Change in net borrowings resulting from cash flows     20,039 5,897
Other non-cash adjustments to long-term borrowings     (252) (246)
         
Movement in net borrowings     19,787 5,651
Opening net borrowings     (222,481) (228,132)
         
Closing net borrowings     17 (202,694) (222,481)
         
 
29. Analysis of changes in net borrowings during the year
    Non cash
   2003 items Cash flow 2004
   Note £000 £000 £000 £000
Cash at bank and in hand   1,387 – 3,897 5,284
Bank overdrafts    (3,036) – 2,625 (411)
         
     (1,649) – 6,522 4,873
Other short-term borrowings   (6,972) – 625 (6,347)
Long-term borrowings    (213,860) (252) 12,892 (201,220)
         
    17 (222,481) (252) 20,039 (202,694)
         
 
30. Transactions with related parties
The Group has made a £1 million non-interest bearing loan to Burnden Leisure plc, the fellow joint venture partner in Bolton Whites Hotel 
Limited (‘BWH’) (2003: £1 million). The loan is convertible into Ordinary shares in the period up to and including 31 May 2024, at the option of 
the Group, otherwise the loan is redeemable at par on 31 May 2024.
The Group holds 50% of the Ordinary share capital of BWH, a company jointly controlled by the Group and Burnden Leisure plc, who hold the 
remaining 50% of the Ordinary share capital. The Group earned management fees of £428,000 during the year (2003: £280,000) from BWH 
for managing the De Vere Whites Hotel. At the year-end, an amount of £368,000 was due from BWH (2003: £368,000) in respect of unpaid 
management fees. In addition, an amount of £698,000 was due from BWH (2003: £846,000) in respect of operating costs paid on its behalf by 
the Group. A further £329,000 loan to the company to finance a refurbishment of the exhibition centre was outstanding at the year-end (2003: 
£329,000). This loan attracts interest at a market rate. The Group has guaranteed £2 million (2003: £2 million) of the overdraft facility of BWH.
I DE VERE GROUP PLC I NOTES TO THE ACCOUNTS 60 Analysis of shareholders
as at 26 September 2004
   Number of  Shares
Range    shareholders % held %
  
 1 – 500   9,935 67.99 1,873,590 1.63
 501 – 1,000   2,157 14.76 1,567,494 1.36
 1,001 – 5,000   2,011 13.76 4,051,312 3.52
 5,001 – 10,000   177 1.21 1,245,045 1.08
 10,001 – 25,000   120 0.82 1,868,977 1.62
 25,001 – 50,000   55 0.38 1,967,323 1.71
 50,001 – 100,000   41 0.28 2,822,161 2.45
 100,001 – 150,000   18 0.12 2,358,384 2.05
 150,001 – 500,000   59 0.40 15,884,772 13.80
 500,001 – 1,000,000   20 0.14 14,363,671 12.48
 1,000,001 – and over   20 0.14 67,101,046 58.30
         
     14,613 100.00 115,103,775 100.00
         
Shareholder enquiries/change of address
For enquiries relating to holdings of shares of the Company such as the loss of a share certificate, dividend payments, or to notify a change of 
address, shareholders should write to the Company’s registrars: Capita Registrars, Northern House, Woodsome Park, Fenay Bridge, Huddersfield, 
HD8 0LA. Telephone 0870 162 3131, www.capitaregistrars.com.
Payment of dividends to mandated accounts
Shareholders who do not currently have their dividends paid directly to a bank or building society account and who wish to do so should 
complete a mandate instruction form obtainable from the Company’s registrars, as above. Tax vouchers are sent to the shareholder’s registered 
address under this arrangement unless requested otherwise.
Low cost stock and share dealing service
Cazenove & Co. Ltd, the Company’s stockbrokers, operate a low cost stock and share dealing service for Ordinary shares in De Vere Group Plc.  
This provides not only for the sale of stocks and shares at a basic commission of 1% with a £10 minimum charge, but also for purchases of 
Ordinary shares. Further information is available from Cazenove & Co. Ltd, 20 Moorgate, London EC2R 6DA. Telephone 020 7588 2828.
CREST: stock market settlement system
The computerised system for settling sales and purchases of shares, CREST, became operational for the Company’s Ordinary shares in October 
1996. It is a voluntary system that enables shareholders, if they wish, to hold and transfer their shareholdings electronically rather than by paper. 
Shareholders who wish to retain their certificates are also able to do so.
Electronic communications with shareholders
Following recent Government legislation, we now offer our shareholders the option to receive electronic versions of shareholder communications 
including the annual and interim reports. Information regarding this service can be downloaded directly from the corporate website,  
www.deveregroupplc.co.uk.
SHAREHOLDER INFORMATION
 SHAREHOLDER INFORMATION I ANNUAL REPORT & ACCOUNTS 2004 I 61 ADVISERS TO DE VERE GROUP PLC
Company Secretary and  
Registered Office
Company Secretary
Mr David Charles Edwards LL.B
Registered Office
2100 Daresbury Park
Daresbury
Warrington, WA4 4BP
Registered in England No. 14504C
Tel: 01928 712111
www.deveregroupplc.co.uk
Registrars and Transfers Office
for Shareholders and loan stockholders
Capita Registrars 
Northern House, Woodsome Park
Fenay Bridge
Huddersfield, HD8 0LA
Tel: 0870 162 3131
www.capitaregistrars.co.uk
Agents for the 6.4% $100 million
Guaranteed Senior Loan Notes
December 2012
Prudential Insurance Company of America
141 Wardour Street
London, W1F 0UT
Advisers to De Vere Group Plc
Stockbrokers
Cazenove & Co. Ltd
20 Moorgate
London, EC2R 6DA
Tel: 020 7588 2828
Credit Suisse First Boston de Zoete & Bevan 
Limited
20 Columbus Courtyard
London, E14 4DA
Financial Advisers
Close Brothers Corporate Finance
10 Crowne Place
Clifton Street
London, EC2A 4FT
Principal Bankers
National Westminster Bank plc
23 Sankey Street
Warrington, WA1 1XH
Auditors
Ernst & Young LLP
100 Barbirolli Square
Manchester, M2 3EY
Solicitors
Freshfields Bruckhaus Deringer
65 Fleet Street
London, EC4Y 1HS
 
Designed & Produced by: www.forepoint.co.uk Printed by: Jigsaw Print Limited
I DE VERE GROUP PLC I ADVISERS TO DE VERE GROUP PLC 62 DE VERE HOTELS:
1.  De Vere Cameron House* 
Loch Lomond
2. De Vere Slaley Hall* 
 Nr. Newcastle Upon Tyne
3. De Vere Oulton Hall 
 Leeds
4. De Vere Herons’ Reach 
 Blackpool
5. De Vere Whites 
 Bolton, Greater Manchester
6. De Vere Daresbury Park 
 Warrington, Cheshire
7. De Vere Mottram Hall 
 Prestbury, Manchester
8. De Vere St. David’s Park 
 Ewloe, Nr. Chester
9. De Vere Carden Park 
 Nr. Chester
10. The De Vere Belfry 
 North Warwickshire
11. De Vere Belton Woods* 
 Grantham, Lincolnshire
12. De Vere Dunston Hall 
 Norwich
13. De Vere University Arms 
 Cambridge
14. De Vere Swindon
15. De Vere Cavendish St. James’s 
 London
16. The De Vere Grand, Brighton
17. De Vere Grand Harbour 
 Southampton
18. De Vere Royal Bath 
 Bournemouth
19. De Vere Grand, Jersey 
 St. Helier
* Resort ownership lodges  
also available.
VILLAGE HOTELS & LEISURE CLUBS:
1. Village Leeds
2. Village Bury
3. Village East Manchester
4. Village Cheadle
5. Village Warrington
6. Village Wirral
7. Village Liverpool
8. Village Nottingham
9. Village Dudley
10. Village Coventry
11. Village Cardiff
12. Village Newcastle
13. Village Maidstone
14. Village Walsall
15. Village Bournemouth
†
16. Village Hull
†
17. Village Swansea
†
†
 Opening before mid 2006. 
GREENS HEALTH & FITNESS:
1. Greens Cambridge
2. Greens Croydon
3. Greens Birmingham
4. Greens Wakefield
5. Greens Sheffield
6. Greens Stoke-on-Trent
7. Greens Liverpool
8. Greens Norwich
9. Greens Glasgow
10. Greens Edinburgh 
11. Greens Chingford
12. Greens Gosforth
13. Greens Shipley
14. Greens Leicester
15. Greens Glasgow Giffnock
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PROPERTY LOCATIONS
 PROPERTY LOCATIONS I ANNUAL REPORT & ACCOUNTS 2004 I 63 2100 Daresbury Park, Warrington, Cheshire, WA4 4BP
www.deveregroupplc.co.uk