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tribal group plc
8791 newman street
london w1t 3ey
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tribalgroupcouk
tribal group plc report and accounts 2007
services for life
tribal group plc report and accounts 2007 design and production by accrue
our annual report has been produced using iso 14001 and fsc
certified environmental print technology vegetablebased inks and a
singlesite production facility requiring no transport between processes
further reduced the environmental footprint
when tribal was founded just over seven years
ago our vision was to build a business that
would help transform people’s lives and 
life chances
today our professional consultancy support
and delivery services are helping our clients
improve how essential public services are
planned and delivered
tribal people have a range of skills and
experience that spans the public voluntary
and private sectors but most importantly
they share with our clients a commitment to
making a positive difference to the services
which touch us all  
whether we are raising standards in schools
and colleges regenerating communities or
improving hospitals this vision remains at the
heart of everything we do services for life
contents
business review
highlights of the year  01
financial highlights  01
chairman’s statement  02
chief executive’s statement  04
business review  12
n strategy
n our markets
n our people
n risk management and key
performance indicators
n financial review
n corporate responsibility
governance
board of directors  28
directors’ report  29
corporate governance  31
remuneration report 34
statement of directors responsibilities  38
financial statements
independent auditors’ report to 
the members of tribal group plc  39
consolidated financial statements and notes 40
five year summary 68
uk gaap tribal group plc 
company financial statements  69
company information  76
key events
april 2006
merged
education and
technology
activities creating
integrated
education
services
business
july 2006
appointed as
design lead for
£130m caerphilly
hospital 
september 2006
launched
groundbreaking
elearning project
with mcdonald’s
november 2006
fashion retail
academy
designed by tribal
is opened by
prime minister 
business review governance  financial statements  highlights of the year 
n revenue increased by 8 per cent 
n profits and earnings fell due to underperformance in consultancy services
n excellent operating cash conversion of 156 per cent operating cash flow of £182m
n successful sale of mercury health in april 2007 realising net cash proceeds of £52m and a profit of £27m
n the sale of mercury health reduced pro forma net debt at the year end to £43m
n cost base and underperforming areas addressed providing a platform for future growth
n full year dividend up 5 per cent to 347p
n encouraging start to the new financial period with several new contract wins
financial highlights
january 2007
secured largest
ever local
government
contract for
recruitment
process
outsourcing 
april 2007
sale of mercury
health to care
uk for £77m
tribal group plc report and accounts 2007  01
note the adjusted operating profit operating margin adjusted profit before tax and adjusted diluted earnings per share are stated before goodwill impairment of £144m 2006 £nil
intangible asset amortisation of £03m 2006 £03m share option costs of £nil 2006 £04m mercury health disposal costs of £33m 2006 £nil and in the case of adjusted profit before
tax and adjusted earnings per share financial instrument credit of £02m 2006 charge £08m see page 40 and page 51
year ended 31 march 2007 2006
turnover £2723m £2599m 48
revenue £2319m £2148m 80 
operating profit £02m £233m
adjusted operating profit £183m £241m 241
operating margin 79 112
adjusted profit before tax £117m £190m 384
lossprofit on ordinary activities before taxation £61m £175m
lossprofit on ordinary activities after taxation £86m £128m
adjusted diluted earnings per share 103p 172p 401
basic lossearnings per share 115p 162p
operating cash flow £182m £191m
operating profit to cash conversion 156 123
  note the operating profit operating margin adjusted profit before tax and adjusted diluted earnings per share are stated before
goodwill impairment of £144m 2006 £nil intangible asset amortisation of £03m 2006 £03m share option costs of £nil
2006 £04m mercury health disposal costs of £33m 2006 £nil and in the case of adjusted profit before tax and adjusted
earnings per share financial instrument credit of £02m 2006 charge £08m  see page 40 consolidated income statement and
page 51 earnings per share note    
chairman’s statement
business units good progress has been made in
rationalising our support infrastructure and
achieving benefits from our procurement strategy
following the actions taken during the year a
detailed review of the carrying value of goodwill
was undertaken resulting in an impairment
charge of £144m
sale of mercury health
on 20 april 2007 we announced the completion
of the sale of mercury health to care uk this
disposal was a successful outcome for the
group enabling us to crystallise the value we had
created in the business and as a result
substantially reduce our borrowings the gross
sale proceeds were £77m which after deduction
of debt and costs provided net cash proceeds of
£52m the profit on disposal was £27m  
balance sheet
following the sale of mercury health the group’s
balance sheet has been substantially
strengthened with pro forma net debt at 31 march
2007 reducing to £43m on 14 june 2007 the
group signed a new five year bank facility of
£40m with hbos and hsbc together with a
working capital facility of £3m the reduced net
debt and bank facilities will result in substantial
savings in interest costs and bank fees
dividend
the board is pleased to announce that it is
recommending a final dividend of 242p per
share making a total of 347p per share for the
year 2006 33p an overall increase of five per
cent subject to approval at tribal’s 2007 annual
general meeting this dividend will be paid on 15
october 2007 to tribal’s shareholders on the
register at 21 september 2007  
management changes
as announced on 25 april 2007 henry pitman
tribal group’s founder stood down as chief
executive on 4 june 2007 he remains on the 
overview
the year ended 31 march 2007 was a
challenging trading period for the group during
which we saw modest revenue growth and a fall
in operating margins however we have
continued to strengthen our position as a leading
provider of consultancy support and delivery
services predominantly to the uk public sector
we have a major presence in our chosen
markets of education health central government
and communities
revenue for the year was up 8 per cent at
£2319m 2006 £2148m operating profit was
£183m 2006 £241m and the operating
margin was 79 per cent 2006 112 per cent
profit before tax was down 38 per cent at
£117m 2006 £190m and the loss after tax was
£86m 2006 profit of £128m the adjusted
diluted earnings per share were 103p 2006
172p aided by a low tax rate of 21 per cent
following agreement of prior year tax claims  
during the year the group generated operating
cash flow of £182m 2006 £191m
representing an operating profit to cash
conversion rate of 156 per cent 2006 123
per cent net debt at the year end was
£738m including the nonrecourse mercury
health project debt of £315m the group’s
gearing was 47 per cent and the interest
cover was 28 times at 31 march 2007
the group’s committed revenue excluding
mercury health was £131m 2006
£119m  
the group’s education services business
delivered growth in profits during the year
and is well placed to respond to future
opportunities however our consultancy
services businesses had a disappointing
year impacted by underperformance
in specific areas significant action
has been taken with a reduction in
the cost base and the restructuring
or closing down of peripheral 
02 tribal group plc report and accounts 2007
the year proved challenging for certain parts of the core business but we are
now in a much better position in april 2007 we successfully sold mercury
health strengthening the group’s balance sheet we have taken action to
reduce the level of operating costs and we have commenced a review of the
group’s future opportunities these steps and the encouraging start to the
new financial period give the board confidence about the future prospects of
the group
business review governance  financial statements  tribal group plc report and accounts 2007  03
board as a non executive director peter martin is
the new chief executive peter was previously an
executive director of the group having been
involved with tribal since 2000 he initially led the
group’s acquisition strategy until his appointment
in early 2004 as chief executive of mercury
health a position he retained until the recent sale
of the business
on behalf of the board and shareholders i would
like to thank henry for his considerable vision and
drive in creating what is today one of the uk’s
leading support services groups working with the
public sector
people
tribal’s continued success is a result of the broad
base of talented employees across the group the
group has a distinctive culture and a strong set of
values which attract high quality people from both
the public and the private sector we would like to
record our thanks to our 2000 staff through their
efforts tribal is now regarded as one of the most
respected businesses in its markets 
year end change
since the group’s formation trading has become
increasingly weighted to the second half of the
financial year in 2007 over 40 per cent of
operating profit was earned in the final quarter to
march this has made it difficult to predict reliably
the group’s year end outturn and to provide
investors with timely trading information the board
has therefore taken the decision to change the year
end to 31 december the company will be
reporting the six month performance to 30
september 2007 the nine month results to 31
december 2007 and the pro forma 12 month
performance to 31 december 2007
we have published today unaudited financial
information for both the nine and 12 months to 
31 december 2006 this information can be found
on the company’s website wwwtribalgroupcouk
prospects
in recent weeks the group has commenced a
number of initiatives as well as the change of
year end the group has moved its head office to
its main premises in central london in order to be
closer to many of its major clients and the
investor community the central group executive
has been strengthened with a number of key
appointments in addition tribal has created a
working group of its 30 most senior managers to
conduct a review over the summer months led
by peter martin this review will examine the
group’s core competencies its competitive
strengths and its growth opportunities 
the intention is to provide better clarity and
definition to the structure of the business and to
identify priority areas for growth tribal has leading
positions in its key markets of health education
central government and communities and it is
anticipated that this review will determine how we
best capitalise on the franchise we have built in
recent years the group intends to report back
on the findings of the review in the autumn
the successful sale of mercury health has
strengthened the balance sheet considerably and
provides for a renewed focus on the group’s core
business of providing consultancy support and
delivery services predominantly to the public
sector our clients are under constant pressure to
improve the range and quality of their services
whilst operating to stringent financial and
performance targets we therefore continue to
see a strong flow of opportunities to support
these clients as they look to transform services
and bring about organisational change
the board is confident about the group’s future
prospects
strone macpherson
chairman
4 july 2007
adjusted diluted earnings
per share 
103p
07 03 04 05 06
186p
205p
153p
172p
profit before tax
£m
117
07 03 04 05 06
154
201
178
190
revenue
£m
2319
07 03 04 05 06
984
1522
1799
2148 markets
over the last few years the private sector has become
increasingly involved in the delivery of public services
in most parts of government there are now many
examples of successful public private partnerships and
of services outsourced for the first time 
there are several policy drivers that are
fundamentally changing the shape of public sector
markets  the continued pressures on budgets the
increasing move towards personalisation of
services the localisation of services the role of the
state as a commissioner but not necessarily the
deliverer of services there are therefore
considerable opportunities for the private sector to
develop new services in response to these
complex changes
in the year ended 31 march 2007 95 per cent
of our revenue was from the public sector and
we expect to retain this focus in the future
our revenue excluding mercury health was
split as follows education 49 per cent
health 19 per cent communities housing
local government and regeneration 18
per cent and central government 14 per
cent
operating review
all segmental operating profit and
operating profit margin figures are stated in
accordance with the business segment
information in note 4 to the accounts
this was a disappointing period for the
consulting services businesses with a 4 per
cent decline in revenue and a significant fall
in margins
chief executive’s statement
04 tribal group plc report and accounts 2007
as the pressure on public sector organisations to reform
and improve service quality increases we expect to see
continued expansion of the role of the private sector in
advising and supporting our public sector partners and
where appropriate delivering services on their behalf
we had a very slow start to the year particularly
in property impacted by pfi delays resourcing
continuing softness in the recruitment advertising
market and certain parts of our consultancy
business where utilisation rates were low 
revenue in the first half was 139 per cent lower
than in the previous year significant action was
taken resulting in a reduction in staff numbers of 
7 per cent and the closing down or disposal of
several underperforming business units  in the
second half of the year we saw a small increase in
revenue against the previous year and improved
profitability we expect the full impact of the
changes we have made and the focus on improved
margins to be seen in the current financial period
and we have been encouraged by the operational
performance in the first two months
despite the underperformance last year of certain
consultancy services businesses we have seen
many successes and we now believe that we
have a much stronger platform from which to
generate profitable growth  
health and social care
in health our information and it strategy
consultancy team had a good year continuing to
build on its strong position as an adviser to the
£124bn nhs connecting for health programme
for example we secured an extension to our
secondary uses service sus contract sus has
been described as the largest epidemiological
database in the world and draws together data on
nhsfunded healthcare across the whole of
england we also won several other important
information and it consultancy contracts 
the decision we took last year to grow our health
service improvement consultancy has been
successful we have won several major service
improvement contracts with acute hospital trusts
we have established a partnership with boxwood
a change consultancy working in the private
sector which enables us to provide a more
comprehensive skillset to the nhs and we won
high profile contracts with the nhs institute for
innovation and improvement in partnership with
at kearney a leading strategy consultancy 
consulting services
year ended year ended
31 march 2007 31 march 2006
£’000 £’000
revenue 117325 122743
operating profit 6797 15464
operating profit margin 58 126
business review governance  financial statements  tribal group plc report and accounts 2007  05
school for success
to flourish at school children need the right learning environment and the 
right support  
through the academies programme we design and deliver inspiring new schools which
transform the opportunities for pupils increase diversity and help regenerate deprived
areas and our unique ‘pupils’ champions’ programme provides the specialist support of
successful school leaders and teachers to bring out the best in over 15000 students and
hundreds of staff in schools across the uk learning to deliver
in today’s eenabled world our learning doesn’t stop when we leave the classroom   
workbased programmes which improve literacy language and numeracy have
large scale technical requirements tribal’s technology and service solutions support
learning assessment and workforce profiling across many sectors and for clients
including mcdonald’s and skills for care the national workforce development body
responsible for adult social care helping people enhance their skills contributes towards
creating a stronger workforce and building economic sustainability
06 tribal group plc report and accounts 2007
business review governance  financial statements  tribal group plc report and accounts 2007  07
we are one of the principal advisers on major
capital programmes in the nhs working on a
wide range of pfi and lift schemes in england
as well as capital developments elsewhere in the
uk and overseas our successful work in
procurement across the nhs includes providing
strategic guidance to the nhs purchasing and
supply agency pasa and the health industries
task force in defining the future for nhs
procurement 
it was a difficult year for our property business
with delays on a number of major pfi schemes
impacting trading we were particularly affected
by the delay in closing the contract on the
peterborough hospitals pfi financial close on
this contract was announced on 3 july we were
successful in winning a number of new health
contracts during the year including design lead
for the £130m caerphilly local general hospital
we also continued to win architectural
commissions in education particularly in further
education fe where the market conditions
remained strong in schools we have expanded
into the building schools for the future bsf
market we are part of a consortium that won a
£20m contract for a design and build school in
liverpool in the first phase of a £400m bsf
framework in higher education he we won two
further projects for oxford university
communities
in local and regional government the market
presented some challenges as a result of delayed
decision making following the local elections and
a change of control in many parts of the country
however we were successful in winning a
number of advisory contracts with local councils
in england our comprehensive performance
assessment cpa team has extended its
influence into many councils across the west
midlands manchester and london
our economic development and regeneration
businesses continue to expand strongly with new
teams established in birmingham and london
we won several new contracts from central and
local government development agencies
voluntary sector organisations and private sector
clients in england scotland and wales major
appointments secured during the year included a
strategic review of government transport
investment priorities for the scottish executive
benchmarking of housing subsidies for english
partnerships and a framework contract for
evaluation studies for the department of
education lifelong learning and skills wales
our housing practice has continued to build on its
strong position as the leading uk housing
consultancy working with the majority of registered
social landlords rsls across england and wales
we won a significant number of contracts during
the year including stock transfer schemes with
watford bracknell forest wansbeck manchester
southway and rhondda cynon taf rct homes
we also consolidated our position as lead adviser
for the large mergers and partnerships that are
taking place within the sector
in our resourcing business we made excellent
progress in interim resourcing in executive search
and selection we retained our strong share of the
local government market and managed chief
executive appointments for important clients such
as the local government association
birmingham city council bradford metropolitan
borough council and nottingham city council in
recruitment advertising we saw a significant
reduction in spend on traditional media but this
was mitigated by a high volume of contract wins
and retentions and by improved margins during
the year we won new recruitment advertising
contracts with a number of councils several city
and district council consortia and an increasing
number of universities 
we are seeing significant new demand for
recruitment process outsourcing rpo providing
customers with a range of back office processing
support services during the year we won our
largest rpo contract worth an estimated £4m
with the london contracts and supplies group
we continue to develop our digital capability and
we are seeing strong growth from our 
eresourcing offering and our internet job portals
including one in the west midlands that will see
11 authorities bringing their recruitment portals
together as part of a shared services vision for
local government in the region 
our temporary staffing business to the medical
profession has faced a fundamental change in its
business due to a move in the industry towards
national supply contracts which favour the larger
chains this significantly impacted profitability and
in the light of this performance we have
concluded that the operation should be closed
and that the goodwill associated with the
business should be impaired in full
central government
in central government we have continued to
grow our management consultancy businesses
from a standing start less than four years ago
we now employ close to 80 consultants and use
several hundred associates our ability to bring
together a range of skills into single bids allows us
to present a powerful proposition to a market
which has traditionally been dominated by more
established consulting practices
chief executive’s statement continued
‘our ability to bring together a
range of skills into single bids allows
us to present a powerful proposition
to the market’ 08 tribal group plc report and accounts 2007
during the year we won contracts with several
major central government departments including
the home office hm revenue  customs the
foreign  commonwealth office the department
for environment food and rural affairs and the
cabinet office  
we were successful in being awarded places on the
new catalist frameworks the office of government
commerce’s catalogue based procurement
scheme for providing professional services to
central government departments and we are now
seeing increased demand from this source
separately from catalist more central government
departments are establishing their own individual
framework contracts whilst bidding for a place on
these frameworks takes up management time we
expect them to be a good source of larger
opportunities for the group  
in communications we managed a number of pr
campaigns for central government with new wins
during the period with the department for education
and skills to promote its academies programme
and with the school food trust to encourage
healthy school meals we are in the second year of
promoting london state secondary schools for
london challenge 
education services
year ended year ended
31 march 2007 31 march 2006
£’000 £’000
revenue 78700 79184
operating profit 14102 13735
operating profit margin 179 173
we saw continued profit growth of 3 per cent in our
education business with strong performances across
most areas being offset by difficult conditions in
schools and fe college training
in april 2006 we merged our education and
technology business streams to create a fully
integrated education business and we are now well
positioned as one of the leading providers of
consultancy support and delivery services across
education and learning in the uk we have a strong
profile in all the principal education and learning
markets – schools post16 and higher education
in software we continued to build on our strong
market position – over 40 per cent of the further
education fe market 55 per cent of the work–based
learning market 65 per cent of the higher education
he market and more than 50 per cent of local
authorities are using our applications in fe we had a
good year with strong take up of our new ebs4
student administration product by our existing clients
and also through winning a number of new clients 
we had a very successful year in the fast expanding
workbased learning market with many new contracts
won in he we had another good year including a
significant new contract with edinburgh university and
since the year end a major contract with nottingham
university in children’s services we continue to be
successful with our market leading products as well
as developing new areas such as the ecaf common
assessment framework and ics integrated childrens
system in asset management we have won
prestigious new clients such as north ayrshire
liverpool direct and london fire and emergency
planning authority across our software business we
are building our capacity to deliver outsourced
managed services and are now delivering an
increasing number of fully hosted solutions
our publishing and elearning business streams
continued to make excellent progress we are the
leading publisher of distance learning materials in
vocational subjects aimed principally at fe colleges
we have a strong position in the skills for life market
with expertise in literacy numeracy and with students
for whom english is a second language our flagship
interactive product suite target skills continues to
build its reputation and market position
we had a successful year in winning and extending
national delivery contracts the national centre for
excellence in the teaching of mathematics which we
now manage has been given a new £1m contract to
support maths teachers in the fe sector we also won
a £12m contract with the children’s workforce
development council to support the work of early
years practitioners a £7m contract to develop a
portal database and support infrastructure for skills
for care the sector skills council for the care sector
and a £2m contract from the european social fund’s
equal programme to prepare learners for
employment
over the last few years largely as a result of funding
changes demand for oneoff training courses for
schools and fe colleges has been declining in the
light of these changes we have concluded that
goodwill of £34m in respect of this business stream
should be written off in full however during the year
we won several new large contracts to deliver training
services to a wider range of organisations we are
now working in 17 prisons in england we manage
training delivery for a major regional police force and
have recently won a £11m contract to set up and
manage training for housing association tenants for
the housing corporation in parallel we are also
working with an increasing number of major
corporates such as compass and mcdonald’s to
support their staff training through the development of
online learning portals 
we support ofsted in the inspection of one third of all
state maintained primary secondary and special
schools and our contracts to deliver these services
continue to perform to ofsted’s requirements we are
expecting ofsted to consider outsourcing the
inspection of nursery settings and workbased
learning in the future and we should be well placed to
bid for this work
we continue to offer a range of consultancy services
across children’s services and the fe sector
increasingly this work is delivered through longer term
contracts  
chief executive’s statement continued
business review governance  financial statements  database cure 
ensuring people get treated as quickly as possible is a key target for the nhs  
making it happen requires high quality information about what services are needed and
effective planning the secondary uses service sus provides healthcare decision
makers with accurate and comprehensive data about patients held on a secure
confidential system with tribal’s programme management and business analysis
support one of the largest patient databases in the world will give policy developers
health commissioners and providers the information they need to plan and deliver 
better services 
tribal group plc report and accounts 2007  09 positive influence
it’s one thing to ask people for their views but quite another to really involve them in
making key decisions which affect their lives and communities 
the housing corporation wants to ensure that people who live in social housing have
every opportunity to influence how their homes are managed as part of the housing
corporation’s tenant empowerment programme tribal is providing social housing
tenants throughout england with training regional events and a free information
service on tenant participation housing and community issues
10 tribal group plc report and accounts 2007
business review governance  financial statements  tribal group plc report and accounts 2007  11
examples include contracts with the quality
improvement agency qia to deliver the
improvement adviser service and with the
department for education lifelong learning and
skills dells to deliver benchmarking across a
spectrum of post16 providers 
the development of the academy and bsf
initiatives continued to provide opportunities for the
group we have been involved with the academy
programme since its inception and have now won
contracts to programme manage 13 academies
we are increasingly developing our involvement in
the bsf programme and won advisory contracts
with local authorities in southwark and durham  
our education business is now very well placed to
build on its strong market position and win an
increasing number of longer term contracts we
intend to strengthen our bidding capability enabling
us to grow the value of our contract pipeline over the
next few years we see new opportunities emerging
to deliver shared services in fe and to extend our
position in the vocational learning market
mercury health
year ended year ended
31 march 2007 31 march 2006
£’000 £’000
revenue 37795 14550
operating profit 3785 1476
operating profit margin 100 101
mercury health performed strongly during the period
with revenue of £378m and operating profit of
£38m this was a successful second year of trading
for the business exceeding our financial and
operational objectives in june 2006 mercury opened
its largest centre an orthopaedic facility in haywards
heath in december 2006 mercury signed a new
contract to deliver diagnostic services throughout the
west midlands and it was also selected as preferred
bidder on a contract to deliver a range of surgical and
other clinical services in essex  
on 20 april 2007 the business was sold to care uk
for a gross consideration of £77m which after
deduction of debt and costs realised net cash
proceeds of £52m the profit on disposal was
£27m the sale was an excellent outcome for tribal
group it has enabled us to crystallise the
substantial value created repay the majority of net
debt and release the group from significant and
onerous guarantees
people
tribal group continues to attract some of the most
talented people in its markets we have within the
group a strong mix of market and technical
specialists who are able to provide our customers
with high quality advice innovative solutions and
project and programme management capabilities
we have a strong culture that encourages ambition
and independence while our corporate values
appeal to our customers and staff and differentiate
us from our competitors
the strength of our market position is a result of the
efforts and dedication of our 2000 staff and 1000
associates and the high quality work and services
they provide to our customers i would like to thank
all of them for the enormous contribution they have
made and i look forward to working with them as we
enter the next stage of tribal group’s development 
prospects
the successful sale of mercury health has
strengthened the balance sheet considerably and
provides for a renewed focus on the group’s core
business of providing consultancy support and
delivery services predominantly to the public
sector our clients that operate in our chosen
markets of education health central government
and communities are under constant pressure to
improve the range and quality of services whilst
operating to stringent financial and performance
targets we therefore continue to see a strong flow
of opportunities to support these clients as they
look to transform services and bring about
organisational change
the group is now focused on its key priorities of
delivering sustained organic revenue growth
improving margins and raising the level of
committed income we have made an encouraging
start to the new financial period as announced on
3 july financial close has been reached on the
peterborough hospitals pfi contract in addition
we have secured a number of new contract wins
including
n kent county council recruitment advertising –
value c£3m over three years
n cornwall county council recruitment advertising
– value c£25m over three years
n foreign  commonwealth office change
management – value c£2m over two years
n housing corporation training framework –
value c£11m over three years
n dfes maths for life – value c£11m 
over one year
n qia teacher improvement contract – 
value c£11m over one year
the pipeline of new contract opportunities is good
the board is confident about the group’s 
future prospects
peter j martin
chief executive
4 july 2007
chief executive’s statement continued business review
strategy
tribal group delivers a range of consultancy support and
delivery services predominantly to the uk public sector
we address four principal markets education health
communities and central government
organic growth 
a primary objective of the group is to generate
sustainable organic revenue growth this will be
achieved in a number of ways by increasing the
capacity and skillset offered by our consultants
by investing in the development of new products
and services to meet the needs of our clients by
concentrating on winning larger and longerterm
contracts and by developing a broader range of
delivery services
we have an unparalleled range of expertise and
capabilities that can be deployed in a variety of
ways to provide clients with increasingly
integrated and tailored solutions
margin
the group’s objective is to improve operating
margins each year this will be achieved through
a rigorous review of operational performance
constant attention to our market positioning
careful qualification of new contract opportunities
and by maintaining a strong focus on our cost
base and overheads as tribal grows we expect
to see financial and operational benefits of
delivering increasing revenue through our existing
management and physical infrastructure as well
as from consolidating procurement across 
the group
business model 
following the sale of mercury health in april 2007
tribal now operates through two business streams
consulting services and education services
in consulting services we provide an extensive
range of management consultancy
communications resourcing and property
services working in our chosen public sector
markets we are able to offer our customers a
powerful combination of specialist expertise and
integrated solutions
in education services we operate across the
schools post16 and higher education markets
we provide a wide range of education consulting
products and services which help our clients to
manage their organisations efficiently and respond
to the developing government agenda
12 tribal group plc report and accounts 2007
business review governance  financial statements  tribal group plc report and accounts 2007  13
partnerships and acquisitions
where we identify a significant opportunity that
requires a set of skills that are complementary to
those that we can provide inhouse we will
continue our policy of partnering with high quality
organisations that can work with us to develop
and deliver a unique solution to our clients  
whilst our attention in the shortterm will be
focused on delivering organic growth we will be
prepared in due course to give consideration to
acquisitions of businesses that meet our stringent
criteria the minimum requirements for
acquisitions will be businesses that extend our
product or skills offering deepen or extend our
market positioning have a robust profit history
and significant growth potential and are a good
cultural fit with tribal acquisitions that we make in
the future will be fully integrated into our
operational structure
values
our core purpose is to enhance people’s lives and
life chances
our five values are
n passionate about improvement 
n stronger together
n inspiring people
n unleashing talent
n prepared to be different
tribal’s positioning in its markets is strengthened
by the group being closely aligned to the public
sector ethos of its clients our people have a
deep understanding of our client’s organisations
local regional and national agendas and empathy
for the public sector they support our employees
believe that the work they do helps to improve the
lives of the citizens it affects this sense is
underpinned by our core purpose and the
group’s values which flow through all the 
work we do
management structure
reporting to the main board there is a group
executive team that comprises the group chief
executive the chief operating officer and the
group finance director the group executive
team has overall responsibility for developing and
implementing the strategic direction of the group
and the financial and operational performance of
the business reporting to the group executive
team are a number of business units that operate
through two business streams consulting
services and education services each of the
business units is headed by a managing director
the managing director has responsibility for
delivering the unit’s profit performance but is also
expected to contribute to the wider business
development of the group
we continue to strengthen the management
arrangements across our business during the
year we have recruited a number of high quality
individuals from both the private and public
sectors tribal has established a reputation as a
dynamic business with a high level of integrity
where managers are given considerable
independence within a supportive group
framework this business environment and the
company’s strong underlying values have been
important factors in attracting talented individuals
‘we have an unparalleled range of
expertise and capabilities which
provides our clients with increasingly
integrated and tailored solutions’ funding pressures remain resulting in an
increasing use of complex procurement
frameworks and creating new opportunities in
outsourcing  
tribal’s breadth of service offering track record for
innovation and strong balance sheet mean we are
well placed in our core public sector markets 
education
the reform agenda in education is focused on
personalised learning and a demandled
approach for delivering access to high quality
provision
‘every child matters’ continues as the sector
flagship for improving the wellbeing and life
chances of children with the introduction of the
education and inspections act ofsted became
the sole inspection agency for education and
skills and the government committed to raise
standards promote choice and diversity and give
teachers new powers to discipline pupils the 
14 tribal group plc report and accounts 2007
business review
our markets
the reform agenda continues to drive growth in our core
public sector markets the programme for improving public
service quality is now focused on devolved decision
making increased customer choice and more effective
collaboration between service delivery partners
green paper ‘care matters transforming the lives
of young children and young people in care’
published in april 2007 seeks to ensure a first
class education for children in care  
the further education white paper ‘raising skills
improving life chances’ set out reforms to deliver
capacity and quality across the sector lord
leitch’s review ‘prosperity for all in the global
economy – world class skills’ and the green paper
‘raising expectations staying in education and
training post 16’ both promote a culture of lifelong
education and training in the current and future
workforce in higher education the growth in
student numbers and diversity and the increasing
range and flexibility of learning opportunities are
challenging universities to sustain the quality of
their teaching and research
the government has pledged to increase the
overall investment in education skills and
children’s services by £107 billion between 2008
and 2011
during the last year tribal has continued to
secure business growth and market share in the
sector  as well as working with government
departments and local authorities we deliver
supported elearning to multinational companies
and are a partner of choice in delivering high
quality clientfocused services
business review governance  financial statements  tribal group plc report and accounts 2007  15
health and social care
the nhs is just over halfway through a major
10year programme of investment and reform  
the programme initially focused on expanding
capacity and increasing investment to support
national targets for improving patient access and
care this was followed by a series of radical
reforms to introduce patient choice and payment
by results
the new direction outlined in the white paper ‘our
health our care our say’ means that more funding
will follow the patient and care will shift from
hospitals into the community it is estimated that
up to 5 per cent of resources could transfer from
secondary to primary care longterm conditions
will be managed outside hospitals by gps
incentivised through the new quality and
outcomes framework
in the latest stage of the reform programme
decisionmaking about priorities and resources is
being devolved to a local level requiring local
commissioning capability and giving
communities a bigger say in how care and
services are delivered
tribal has supported key initiatives to increase
capacity by advising on and designing pfifunded
hospitals and primary care facilities our
consulting services have helped drive a more
responsive health service and our work on
enabling programmes such as ‘choose and
book’ has given patients more choice about how
when and where they receive treatment we have
recently developed a comprehensive
commissioning capability to work in partnership
with trusts to ensure they get the best possible
outcomes and value for money
tribal’s group structure – combining consulting
communications technology property and
recruitment capabilities – together with its
willingness to develop new serviceled business
streams places it in a very strong position in the
nhs market  
communities
local government housing and regeneration
the momentum for transformation in service
delivery created by the gershon and lyons
reviews has continued with the introduction of
the local government bill the varney review
and the likely outcome of the comprehensive
spending review later this year csr07 local
authorities are facing significant interrelated
strategic issues as they strive to simultaneously
improve service quality and reduce costs in
addition councils are increasingly focused on
economic and social regeneration and
developing local partnership models and
innovative shared service arrangements 
in january 2007 the government announced
the creation of communities england a new
agency to deliver regeneration and housing
which will bring together the work of english
partnerships the housing corporation and some
functions currently undertaken by the
department of communities and local
government the recent hills report on social
housing and the review of the sector’s regulation
by professor martin cave will have a significant
impact on housing policy and the way social
housing is regulated in the future
the consolidation of the social housing sector
through mergers and partnerships has continued
as has the transfer of stock from local authorities
to registered social landlords rsls and arms
length management organisations almos 
‘tribal’s group structure together
with its willingness to develop new
serviceled business streams places
it in a very strong position in the
nhs market’ 16 tribal group plc report and accounts 2007
business review
our markets continued
over the next few years decisions over transport
strategy and investment will have significant
implications for regeneration and sustainability
the changes in the sector are creating new
opportunities for tribal’s regeneration consultancy
work which is underpinned by integrated
economic social and housing expertise as a
transformation partner we support local
authorities to achieve their goals through creating
the opportunity and investment choices which
enable high performance tribal is also leading the
way in local authority executive search and interim
management in response to the egovernment
agenda we are working with authorities to build
more than 30 erecruitment systems 
central government
although the lead up to the prime ministerial
succession inevitably created some policy
uncertainty personalisation and greater choice are
expected to remain as key policy themes 
the distinction between government’s role as the
commissioner as opposed to the provider of
services is becoming more defined performance
improvement will increasingly be focused on
competition and contestability while the
department of health has been prominent in
implementing these policies most departments
and agencies are now developing similar
initiatives
greater efficiencies will be driven by the
continuing impact of the gershon and lyons
reviews together with the constraints likely to
result from the csr07 budget review this is
expected to lead to more effective collaboration
between government agencies and the
development of shared service and joint
procurement initiatives
homeland security continues to be a priority
requiring better coordination of activity across
government departments and agencies to prevent
and respond to events
tribal’s broad base of technical and consultancy
expertise in central government means that we
are well placed to support these reforms and
initiatives
business review governance  financial statements  tribal group plc report and accounts 2007  17
at tribal we recognise that our talented and
diverse mix of people is one of our key strengths
our employees may be consultants town
planners architects software developers and
educators but whatever their discipline they are
at the top of their profession in terms of technical
intellectual and management skills we work
together to harness this talent across the group
and develop new services and enhance our
portfolio our comprehensive product and service
offerings also mean we can provide excellent
opportunities for career progression and
development
tribal’s people reflect the ethos and values of our
client base and our unique culture is a powerful
synthesis of high quality commercial practice and
the best of the public sector ethos of service to
society
supporting our people
continuing engagement with our staff is central to
ensuring we remain an employer of choice at our
staff forums across the group tribal employees
develop and enhance our policies and processes
this enables everyone to have a say not only in
how they are treated as employees but also in
the way we manage our business  
our first groupwide staff satisfaction survey was
completed this year and working groups are now
driving changes through the business our
intranet and regular briefings ensure that staff are
wellinformed about news and developments and
we are also introducing a monthly update by the
chief executive to all staff this proactive
approach to engaging and involving employees
continues to have a direct and positive impact on
our people and our business  
supporting the development of our staff and the
provision of continuing professional development
opportunities is a key focus for us we have built
on the framework of professional technical and
supervisory development opportunities by
introducing several management development
initiatives these include the excellence programme
based on neuro linguistic programming and
tribal’s own branded ‘managers into leaders’ and
‘moving up in management’ programmes we
support staff with their professional qualifications
and memberships we continue to develop our
graduate recruitment and development
programmes and this year we have further
developed our team building events providing a
range of training and development opportunities 
at every level of the workforce is a key target 
for 2007
business review
our people
tribal’s directors regularly review important
management information about our people – for
example turnover equal opportunities disability
and diversity building our people management
framework has allowed us to monitor the
composition and diversity of our workforce
improve our performance management and
identify personal development needs we also
have a counselling service in place to ensure 
staff have access to a support network outside
the business
rewarding our people
we continuously strive to improve and broaden
the range of benefits we offer both to reward
success and encourage participation in and
ownership of the business we are developing a
menubased range of benefits offering staff a
choice in how their package is comprised our
current benefit range includes a save as you earn
scheme a share incentive plan occupational
pension life insurance private medical insurance
permanent health insurance eye care vouchers
enhanced paternity allowance time off to support
voluntary work flexible and generous leave
arrangements access to free financial planning
home computer allowance discounted travel
insurance and hotel rates nursery vouchers car
allowance and a confidential support line
recognising achievement
each year tribal recognises and rewards
exceptional effort and commitment at every level
of the business through our national awards
these showcase the achievements of both
individuals and teams in each of our five
corporate values passionate about improvement
stronger together inspiring people unleashing
talent and prepared to be different 18 tribal group plc report and accounts 2007
business review
risk management and 
key performance indicators
audit
committee
business 
stream
management
board committees executive management
business 
stream
management
executive
directors
main board
of directors
business
stream
management
risk management
the board assesses risk management throughout
the group and sets the overall risk appetite and
philosophy supported by the audit committee and
the executive directors
the board establishes the parameters for risk
appetite for the group through
n setting strategic direction including targets
n reviewing and ultimately approving annual plans
and budgets for the group and each business
stream
n regularly reviewing and monitoring the group’s
performance in relation to risk through monthly
board reports
to ensure that risk is robustly managed
throughout tribal a group risk management
framework operates as part of the annual
business planning and performance management
process this requires each business unit to
n identify and assess all significant risks facing their
business
n prioritise risk
n actively manage by detailing the steps to avoid or
to mitigate risk
n review and report risk
a summary of the key risks facing the group is
placed on a risk register which is supported by
the audit committee and the executive directors
the executive directors provide the central
leadership and clear guidance within the annual
planning instructions issued to all business
streams the business stream heads are
specifically responsible for the management of risk
within their operating businesses supported by
their operations and finance directors we believe
the key to success is a combination of strong
central direction and good management talent
our businesses are experts in understanding
customer requirements and market opportunities
adapting their plans to achieve the best possible
performance  
governance framework
we review performance by conducting regular business
stream meetings to ensure that the businesses are on
track this framework came to the fore during this last
challenging financial year and enabled the executive
directors and business stream heads to take
appropriate actions to deal with underperformance and
other issues as they arose
organic revenue growth
10
target performance
8
kpi deﬁnition and target likeforlike annual 
growth in organic revenue of a blended rate 
of 10
performance in fy2007 8
status not met
reassessment going forward following the 
restructuring in fy2007 we remain confident 
that the group will get back on track
l
labour costs as a percentage 
of gross revenue
a
40
44
kpi deﬁnition and target employed staff 
labour costs and not our pool of associate 
staff as a percentage of revenue the 
medium term range target is 40
performance in fy2007 44
status not met
reassessment going forward following the 
closure of underperforming business streams
and reduction in staff numbers we are 
confident that we can move towards our
target
a
target performance
adjusted operating profit margin
13
target performance
8
kpi deﬁnition and target ebita as a
percentage of revenue the medium term
range target was 13
performance in fy2007 8
status not met
reassessment going forward the decline in
revenue and challenging business 
environment resulted in a large miss we 
have decided to downgrade our medium 
term target to 10 to reflect current 
strategic plans
4
business review governance  financial statements  adjusted operating cash conversion
90
target performance
156
kpi deﬁnition and target this measures our 
ability to turn our operating profit into cash by 
dividing ebita into cash flow from operating
activities our sustainable target is 90
performance in fy2007 156
status achieved
reassessment going forward we remain a
cash generative business and operate a 
strong focus on effective working capital 
management we will benchmark against our
peer group of companies to decide if our 
definition is consistent given the exceptional 
performance
committed income
staff turnover
13
target performance
19
kpi deﬁnition and target staff turnover
measures our ability to retain staff  our 
medium term target is 13
performance in fy2007 19
status not met
reassessment going forward fy2007 was a
challenging trading year with several business
closures and redundancy rounds 
nevertheless we are disappointed with the 
higher level of staff attrition fy2006 15
and will continue to invest in strong team 
values and ethos staff talent development
and career opportunities so that staff are 
motivated and excited by the work we do and 
are rewarded for their commitment to quality 
and professional integrity 
50
target performance
38
kpi deﬁnition and target this measures the 
contracted work in hand as a proportion of 
budgeted revenue at the start of the financial
year our medium term target is 50
performance in fy2007 38
status on track
reassessment going forward we will 
continue to grow the visibility of revenue by 
securing larger long term contracts
tribal group plc report and accounts 2007  19
the principal risks that the group manages are as
follows
1 reputational risk
tribal operates across a wide spectrum of the uk
public sector which is subject to regular political and
public interest together with scrutiny by the media  
in 20056 we moved the majority of our
businesses to a single tribal brand and therefore
we are increasingly aware of the importance of
managing our corporate reputation as we
continue to win larger and more complex
government contracts particularly in our
education and health markets we need to ensure
that we carefully select the contracts we bid for
price them correctly fully understand all the
contractual requirements and then deliver them
effectively since any failure and adverse media
coverage by one business has a potential impact
on the group as a whole
2 changes in government policy and spending
given the significance of public sector contracts to
tribal any cut in relevant public spending or a
change in policy away from using independent
private sector providers may have an adverse effect
on the results of the group tribal has consciously
made an effort to protect itself against this risk by
establishing a balanced portfolio of services and in
this respect we have some advantage over a
number of our competitors in the year to 31 march
2007 no customer accounted for more than 7 per
cent of our revenue
3 operational risks
tribal operates in competitive markets which can
be significantly affected by the number and size of
our competitors pricing policies and knowledge
of our customer requirements procurement
cycles for large delivery and management service
contracts are becoming more complex and
involve a clear justification of value for money to
government bodies the group board signs off all
major contracts to ensure these meet our core
competencies capabilities and financial targets
we are a people based business and any
increased costs of employment including pension
costs could significantly impact our operating
costs and profitability the group has limited
exposure to defined benefit pensions plans and
sets clear direction as part of annual pay reviews
we have a clear strategy to reduce our labour
cost bill as a percentage of revenue
4 financial risks
for the past few years tribal has operated with a
highly geared balance sheet due in part to its
historical acquisition strategy and also its
investment of £25 million in establishing its
mercury health business from 2003 mercury
health experienced significant success by
securing a number of major contracts under the
department of health’s istc programme  as a
consequence our net debt rose to over £89
million or gearing of 52 per cent at its peak
tribal successfully sold mercury health in april
2007 with the proceeds being used to pay down
debt with a pro forma net debt of less than £5
million at the start of 20078 tribal has
substantially derisked its gearing and balance
sheet and hence its exposure to any rise in
interest rates
there is a high likelihood that the group’s current
tax rate of 21 per cent below the standard rate of
corporation tax due to the resolution of prior year
matters will increase over time in line or slightly
above the standard rate the group will continue
to mitigate its tax liabilities whenever and
wherever appropriate
other financial risks are covered in the financial
review section
key performance indicators kpis
the board uses a range of performance measures
to monitor and manage the business each business
unit has established performance measures specific
to its business lines however there are a number of
kpis which are applied across the group these
group kpis fall into two categories financial metrics
that measure past performance and operational
measures that allow us to manage the business into
the future
we set out each kpi on these pages and how we
have performed against the targets set last year business review
financial review
the sale of mercury health post the reporting period has
strengthened our balance sheet and significantly reduced
the group’s debt we provide pro forma comparative
information to help shareholders understand the
continuing business going forward and the change in our
accounting reference date to 31 december
the financial year 20067 was a challenging business environment for our core
continuing business which necessitated business closures goodwill impairment write
down and high restructuring costs this is explained further in this financial review we
are pleased to report some good recovery was made in the second half of the year
our continuing business delivered another year of strong operating cash performance
this cash efficiency coupled with a record order book and a stronger balance sheet
provides a sound financial platform for future profitable organic growth 
group trading summary
2007 2006 increase
£’000 £’000 decrease
revenue 231851 214794 8
operating profit 192 23313
share option costs 10 449
amortisation of ifrs 3 intangibles 320 316
goodwill impairment 14429 –
mercury health disposal costs 3300 –
adjusted ebita 18251 24078 24
net finance costs 6330 5841
exclude financial instruments creditcharge 178 765
adjusted profit before tax 11743 19002 38
adjusted effective tax rate 210 250
adjusted diluted earnings per share 103p 172p 40
dividend per share based on proposed final dividend 347p 33p 5
note before goodwill impairment amortisation of ifrs intangibles share option costs mercury health disposal
costs and financial instrument creditcharge see notes 9 and 10
revenue
revenue increased by 8 per cent to £2319m 2006 £2148m  the second half of the
year has seen some improvement with revenue excluding mercury health of £1063m up
3 per cent on last year in contrast first half revenue increased by 7 per cent to £1045m
but excluding mercury health decreased by 8 per cent
compound revenue growth over the last six years has been 39 per cent
20 tribal group plc report and accounts 2007
revenue
£m
01 02
h1 fy
41
175
153
457
383
984
644
1522
818
1799
98
2148
1045
2319
03 04 05 06 07
business review governance  financial statements  profit
adjusted ebita decreased by 24 per cent to £183m 2006 £241m the groups
operating margins reduced from 112 per cent to 79 per cent we have taken a number
of remedial actions closing eight business streams with aggregate losses and closure
costs totalling c£23m and reduced headcount at a cost of c£11m this has impacted
current year profitability and margins but will benefit the current accounting period  if
these costs are added back the underlying margin would be 93 per cent our target is
10 per cent and the restructuring should improve our future profitability and margins
the groups trading continues to be seasonally weighted towards the second half of the
year 66 per cent 2006 61 per cent of the annual profit being generated in h2 this will
become more balanced following the change of year end which is discussed in more
detail below
share option costs
share option costs of £10000 2006 £449000 represent the share based payment
charge under ifrs 2 the current year’s charge has benefited from the reversal of a
charge made in the prior year for the ltip granted in 2005 it is now clear that the
performance criteria will not be met and accordingly the options will not vest
goodwill impairment
a goodwill impairment charge of £144m 2006 £nil has been made after the group carried
out its detailed annual impairment test of this charge £34m relates to the fe training
business stream within education services that has been closed £16m for the 
underperforming medical equipping business stream within consulting services and the
balance of £94m in respect of cash generating units within consulting services whose returns
have deteriorated below previous expectations this is more fully discussed in note 14
mercury health disposal
at 31 march 2007 we have expensed committed costs of £33m in respect of the
disposal of mercury health as a result of its size and nature it has been separately
disclosed and effectively forms part of the net profit on disposal of the business that will
be fully reported in our next report and accounts details of this transaction are included in
the post balance sheet events note 37
group finance costs
2007 2006 increase
£’000 £’000
finance credit 1041 446
finance charges 7549 5522
6508 5076 28
ias32 discounting of deferred consideration 164 443
6672 5519
ias39 financial instruments 342 322
6330 5841 8
net finance costs for the year increased by 28 per cent to £65m 2006 £51m before
ias 32ias 39 financial instrument credits of £02m 2006 charge £08m reflecting the
full year effect of the increase in the groups net debt position to fund the implementation
and mobilisation of the istc contracts in mercury health the higher finance costs are
also due to the reduction in capitalised interest from £13m to £04m
the ias 32 charge relates to a notional charge in respect of discounting deferred
consideration only one historical acquisition earnout payment remains outstanding and
will be settled in share or loan notes at the company’s discretion in november 2007
tribal group plc report and accounts 2007  21
h1 fy
adjusted ebita
£m
01 02
06
31
21
84
47
167
82
232
89
223
94
241
62
183
03 04 05 06 07 the ias 39 credit 2006 charge is largely due to the inability of the group to obtain perfect
hedge accounting for its discounted swap this means that the movement in the fair value of
the swap in the period is recognised in the finance charge for the period  whilst this
creditcharge could potentially be highly volatile in line with movements in uk interest rates
the volatility will not be reflected in the cash flows of the group which are determined by the
underlying hedge interest rate the volatility introduced to the income statement as a result
of this imperfect swap is not considered to be representative of the performance of the
business and has therefore been excluded when calculating adjusted earnings
the interest rate swap has saved the group £117000 in cash and interest payments in
the current year
on 31 march 2007 the bank exercised its option to convert the discounted swap into an
annuity at 01 per cent below libor the arrangement has now been cancelled in the
group’s favour
tax
the group adopts a proactive approach to managing its tax bill our effective tax rate
based on our adjusted profit before tax dropped from 25 per cent to 21 per cent due to
hmrc agreement to tax relief for the mercury health bid costs incurred in 2004 this is a
oneoff benefit the ongoing tax charge on current year profits is likely to be in line or
slightly above the standard 30 per cent rate reflecting disallowed expenses and non
qualifying depreciation
shareholder returns and dividends
the loss on ordinary activities after taxation was £86m 2006 profit £128m
adjusted diluted earnings per share decreased to 103p 2006 172p due to the decline
in profitability
the board has proposed a final dividend of 242p 2006 225p giving a total dividend for the
year of 347p 2006 33p our dividend is covered three times by adjusted earnings per share
retained earnings for the year to equity holders decreased by £52m  
cash management
cash conversion for the year was an excellent 156 per cent 2006 123 per cent this is
defined as net cash from operating activities before tax over adjusted ebita 
operating cash flow defined as net cash from operating activities less interest was
£182m 2006 £191m
capital expenditure in the year was £44m 2006 £40m for the consulting and education
services business streams mainly replacing and enhancing it infrastructure representing
23 per cent of revenue 2006 20 per cent and £76m 2006 £266m was incurred by
mercury health mainly long term leases and assets under construction  
the groups cash flow for the year is shown below
group cash flow
2007 2006
£’000 £’000
net cash from operating activities before tax 28423 29559
net interest 6032 7078
corporation tax 4143 3365
operating cash flow 18248 19116
capital expenditure
 mercury health 7574 26569
 other business streams 4407 4005
other financial investment net 1564 1048
acquisition and deferred consideration 556 3642
dividends paid 2780 2362
financing 9501 14315
increasedecrease in cash and cash equivalents in year 10868 4195
22 tribal group plc report and accounts 2007
business review
financial review continued
h1 fy
net cash from operating activities before tax
£m
02 03
16
95
50
204
72
313
02
122
13
296
284
04 05 06 07
51
h1 fy
operating cash flow
£m
02 03
16
76
28
148
25
199
48
29
16
191
05
182
04 05 06 07
business review governance  financial statements  tribal group plc report and accounts 2007  23
included within financing is £106m of new loans drawn primarily under the mercury health
nonrecourse debt facility to fund the implementation and mobilisation of the healthcare
contracts 
disposal of mercury health 
following approval at the extraordinary general meeting of the company on 19 april 2007
we completed the sale of our investment in mercury health to care uk on 20 april 2007
the gross sale proceeds were £77m which after deduction of debt and costs equates to
net cash proceeds of £52m  
the healthcare delivery business stream has not been classified as discontinued or held
for sale under ifrs 5 ‘noncurrent assets held for sale and discontinued operations’ as
shareholder approval for the transaction had not been received at the balance sheet date
the continuing operations of the group will consist of the existing consulting and
education business streams in order to show the financial impact of the disposal on the
group the results of mercury health for the years ended 31 march 2007 and 31 march
2006 have been shown in a separate column on the face of the income statement 
to give an indication of the balance sheet impact of the disposal we have disclosed pro
forma figures applying the disposal to the 2007 balance sheet in note 37 post balance
sheet events
net debt
group net debt decreased from £759m to £738m as shown below
group net debt
2007 2006
£’000 £’000
cash at bank and in hand 33483 22615
cash collateralised 949 1392
gross cash 34432 24007
short term loans 1455 2907
syndicated bank facility net of bank arrangement fees 72676 72277
nonrecourse bank facility net of bank arrangement fees 31481 22554
mercury health asset finance facility 500 –
share option facility 1725 1725
finance leases 425 429
gross debt 108262 99892
net debt 73830 75885
gearing 47 47
interest cover 28 47
the disposal of mercury health had the following impact on the group’s net debt
£’000
net debt at 31 march 2007 73830
net debt transferred to care uk on disposal 17577
net proceeds of disposal 52000
pro forma net debt 4253 following the disposal of mercury health the group no longer required its existing level of
banking facility and the high costs associated with the nonutilised portion on 14 june
2007 the group agreed a new £40m senior debt banking facility until 2012 under the
terms of the facility £40m is available under a fully fluctuating revolving credit facility which
can in part be transferred into a performance bond facility as required the previous
£180m facility together with the share option facility of £5m have been cancelled this is
likely to save bank costs of £04m per annum
our gearing at 31 march 2007 was 47 per cent 2006 47 per cent pro forma gearing at
31 march 2007 is 3 per cent
change of year end
the board has taken the decision to change the group’s year end to 31 december since
the group’s formation trading has been very seasonally weighted to the second half of the
year with up to 40 per cent of operating profit earned in the final quarter this has made it
very difficult to manage the group’s year end outturn and to provide investors with timely
trading information it is believed that this will enable more focus to be given to the longer
term and provide greater certainty earlier in the year
we will be reporting half year results to 30 september 2007 followed by nine months to 31
december 2007
in order to provide visibility of the impact of this change we have set out unaudited abridged
pro forma accounts for the 12 months ended 31 december 2006 and the nine months ended
31 december 2006 in a separate document which is available on our website
a summary pro forma unaudited income statement is set out below excluding the
discontinued mercury health business
pro forma trading summary
9 months to 12 months to
31 december 31 december
2006 2006
£’000 £’000
revenue 138180 194279
operating lossprofit 6319 2019
share option costs 62 192
amortisation of ifrs 3 intangibles 238 316
goodwill impairment 14429 14429
adjusted operating profit 8410 16956
net finance costs 2810 3714
exclude financial instruments credit 46 38
adjusted profit before tax 5554 13204
adjusted effective tax rate 286 298
adjusted earnings per share 42p 106p
net debt at 31 december 2006 87189 87189
 before goodwill impairment amortisation of ifrs intangibles share option costs and financial instrument credit
basis of preparation
1 the accounting policies used are consistent with those followed in the preparation of the group financial
statements for the year ended 31 march 2007 except as stated below
2 mercury has been treated as a discontinued operation as it will be in future financial reports
3 had the march 2007 impairment review taken place at 31 december 2006 the same charge would have arisen
24 tribal group plc report and accounts 2007
business review
financial review continued
‘the board has taken
the decision to
change the group’s
year end to 31
december this will
enable more focus to
be given to the
longer term and
provide greater
certainty earlier 
in the year’
business review governance  financial statements  tribal group plc report and accounts 2007  25
committed income
the forward order book of the group excluding mercury health as at 31 march 2007 was
£131m 2006 £119m 
financial risks and treasury management 
the main financial risks faced by the group relate to the availability of funds to meet
business needs credit risk arising from customer defaults and fluctuations in interest rates
these risks are managed as described below
funding
the group finances its operations by a combination of cash reserves from retained profits
bank borrowings and leases  our policy is to maintain sufficient headroom in undrawn
committed bank facilities and banking covenants the group is now funded by a £40m
senior debt banking facility until 2012 with two major uk banks
treasury management is led by group finance and operates within policies and
procedures reviewed and approved by the board
credit risk
the objective is to reduce the risk of bad debts arising from nonpayment from our
customers this risk is tightly managed across the group led by the group finance team
we incurred no material bad debts during the year due to the strong relationships with our
customers debtor days outstanding were 42 days 2006 42 days but the age profile of
older debts continues to improve
interest rate risk
forward rate agreements and interest rate swaps are used to achieve the desired mix of
fixed and floating rate debt  at the year end the group held a hedged fixed interest rate
swap over £25m of core borrowings and an unhedged discount rate swap over a further
£25m of core debt the nonrecourse mercury health facility of up to £335m is fully
hedged over the term through two fixed rate swaps following the sale of mercury health
and the cancellation of the unhedged discount swap the group has retained the following
swap instrument
instrument expiry date tribal pay tribal receive
£25m hedge against core debt 30092010 499 6 month libor
committed income by business stream
education 
services 71
consulting 
services 29 26 tribal group plc report and accounts 2007
business review
corporate responsibility
corporate responsibility framework
over the course of the last twelve months we have built on the results of our extensive
corporate responsibility cr audit and developed a framework that defines how we will
transform our priorities into tangible outcomes 
to tribal corporate responsibility means a commitment to our staff clients stakeholders
and the communities who benefit from our services that we live up to our core purpose of
‘improving people’s lives and life chances’ in a responsible way  
due to the nature of our operations our social and environmental impacts are
comparatively low however managing our business responsibly is part of our culture and
helps shape our overall strategy planning and daily activities 
our cr framework is built on four strands
1 our customers
following the cr review we identified that due to the diverse nature of our business and
projects a universal mechanism for evaluating customer satisfaction was not appropriate
our priority moving forward is therefore to agree on a consistent set of customer
satisfaction and service improvement standards and ensure each part of the business has
relevant formal mechanisms in place for evaluating and reporting its performance targets
will be set for the next financial year to ensure we continue to deliver excellent services
and value for money to our customers   
over the next twelve months we plan to undertake a survey across our key markets to
benchmark customer perceptions of tribal and our services and highlight areas for
improvement 
2 our people
as a professional services business our people are our most important asset we
therefore regard staff satisfaction consultation and involvement as a top priority staff
engagement has improved through a range of initiatives including the annual groupwide
staff satisfaction survey which had a 51 per cent response rate and our staff forums our
annual awards based on our core values attracted over 200 nominations
we have reviewed and developed our groupwide terms and conditions and overall
package of benefits to ensure we continue to attract and retain the best people with the
relevant skills we have introduced a new policy to promote and develop people internally
wherever possible 
3 our community
tribal recognises we have a duty to support the communities in which we work and we
actively encourage employee participation in local community projects through our staff
payroll giving scheme employees make a regular taxfree donation to charity and tribal
group matches these donations last year saw the launch of the tribal foundation ‘give
it up’ week where staff devised and participated in a range of activities and again tribal
matched the donations
we support and encourage employees who wish to undertake volunteer work charitable
activities and social sabbaticals and are looking at ways to formalise volunteering
arrangements throughout the business we were highly commended at the charities aid
foundation’s companies and communities awards 2006 for our work in the effective
giving category
4 our environment
due to the nature of our business our environmental impact is comparatively low
however we are committed to continuously improving our environmental performance and
minimising adverse environmental impact our group environmental policy promotes good
practice and sets out the minimum standards for all parts of the business to support our
businesses in assessing their environmental impact a set of guidelines will be produced
on areas for review measurement and targets in due course each business will be
accountable for assessing and reporting on its main environmental impacts including
utilities waste recycling and transport 
a number of initiatives are already in place to minimise environmental impact these
include the introduction of teleconferencing facilities in regional business centres and the
appointment of green officers we are in the process of setting up a cycle2work
scheme giving employees a great way to get hold of a new bicycle tax free we plan to
make further progress in these areas during the next year 
‘we were highly
commended at the
charities aid
foundation awards
2006 for our work
in the effective
giving category’
business review governance  financial statements  tribal group plc report and accounts 2007  27
the tribal foundation
the foundation was established in 2005 as a registered charity to support activities
which reflect our involvement in areas such as education and health both in the uk and
the developing world we do this through both financial support and the sharing of our
skills and expertise the foundation is principally funded by donations from our group
profits and by additional funds raised through our payroll giving scheme and staff
fundraising initiatives 
in response to the worldwide campaign to ‘make poverty history’ we decided to
concentrate primarily on projects in the developing world where our support is able to
have a real impact we work with skillshare international an ngo with over 100 years’
experience this ensures our support is effectively targeted and sustainable with
continuing support from skillshare’s development workers in the field
over the past two years we have supported five projects and established a secondment
programme  
n over 400 disabled people in kwazulu natal in south africa have received basic
education opportunities through the provision of premises tutors and vital equipment
including braille machines
n our financial support has helped to train 414 village health workers benefiting 70000
people in southeast india these community health workers provide vital information
and training to help prevent malaria and reduce infant mortality
n the people living with hiv and aids project covers four southern african countries
which have infection rates of over 35 per cent of the adult population it is establishing
support networks for 1200 people and training 400 community volunteers and carers 
n the lesotho disability project helps integrate disabled learners into mainstream
education and training it aims to raise the status of disabled people by enabling them
to get work or become selfemployed
n the railway children project in gorakhpur india assists orphans forced to live on
railway platforms by giving them access to shelter and education    
while tribal has contributed just under £100000 towards these projects our support
also attracts significant matched funding from the department for international
development and the european union  
however perhaps our greatest resource is the skills expertise and enthusiasm of our
staff our secondment programme has gained considerable momentum over the past
year and tribal staff have shared their expertise in it and information management in
lesotho botswana and swaziland
ftse4good
tribal group is a member of the ftse4good index series the index for companies which
meet globally recognised corporate responsibility standards we have been a member for
the last five years henry j pitman 
age 44
nonexecutive director
henry pitman founded tribal
group in september 1999 and
resigned as chief executive on 4
june 2007 he was appointed a
nonexecutive director on and
from the same date henry was
formerly managing director of
jhp group limited a uk
vocational training and business
services company which he
joined in 1995 prior to this he
worked for the property
corporation of south africa from
1990 to 1995 in may 2007 he
was appointed as a non
executive director of grainger plc
david g f thompson 
age 53
nonexecutive director
david thompson joined tribal
group in march 2004 and is
chairman of the audit committee
he is chairman of marstons plc
which he joined in 1977 and a
nonexecutive director of
caledonia investments plc and
persimmon plc
sheila m forbes cbe 
age 60
nonexecutive director
sheila forbes joined tribal group
in may 2004 as a nonexecutive
director and will not be seeking
reelection at tribal’s annual
general meeting on 3 september
2007 since 1996 she has held
a number of nonexecutive
positions including lloyds tsb
group plc and the british library
having previously served as
group personnel director at
storehouse plc and then director
of human resources at reed
elsevier plc
timothy e p stevenson obe
age 59
nonexecutive director
tim stevenson joined tribal
group as a nonexecutive
director in may 2004 and is
chairman of the remuneration
committee and senior
independent director tim worked
for burmah castrol group plc
from 1975 until 2000 latterly as
group chief executive he is
currently chairman of travis
perkins plc morgan crucible plc
and of the board of governors of
oxford brookes university
board of directors
strone macpherson 
age 58
nonexecutive chairman
strone macpherson was
appointed as an independent
nonexecutive chairman of tribal
group in march 2004 he was
formerly executive deputy
chairman of misys plc which he
joined in 1989 after 15 years at
flemings his current positions
include nonexecutive director of
axa uk plc and close brothers
group plc strone is a member
of the general council of the
kings fund
peter j martin 
age 49
chief executive
peter martin joined tribal group
in june 2001 as group
development director becoming
chief executive of mercury health
in april 2004 until its sale in april
2007 he was appointed chief
executive of tribal group on 4
june 2007 peter was formerly a
founding partner of corporate
finance firm anvil partners and
prior to that a director of the
corporate finance division of
kleinwort benson limited 
he is a nonexecutive director 
of win plc
simon m lawton fca 
age 46
group finance director
simon lawton joined tribal
group in march 2000 he was
formerly director of finance at
securicor electronics limited a
subsidiary of securicor group
plc and before that finance
director of dawes group limited
simon originally qualified at
kpmg where he became a
senior manager in audit and
advisory services
28 tribal group plc report and accounts 2007 
richard h collins
age 44
group company secretary
richard collins joined tribal in
2004 he qualified as a solicitor in
1988 and practised in the city of
london before joining camas plc
subsequently aggregate
industries plc in 1995 as head of
legal also becoming company
secretary in 1997 in 1998 he
joined support services company
blick plc where he was group
solicitor and company secretary
 business review governance financial statements  tribal group plc report and accounts 2007   29
directors’ report
the directors have pleasure in presenting their annual report on the affairs of the group together with audited consolidated financial statements and
independent auditors’ report for the year ended 31 march 2007
principal activities
tribal group plc is a holding company with a number of trading subsidiaries    
the principal activities of the group are the provision of a broad range of consultancy and professional support services the majority of our customers
are in the uk public sector predominantly within education and training health and social care local and regional government housing and
regeneration and central government the review of the year’s operations key risks and future developments are contained in the chairman’s
statement the chief executive’s statement the business review and the corporate governance statement the group’s policy with regards to financial
instruments and the risk to the group is discussed on page 25 in the ‘financial risks and treasury management’ section of the business review
our services are delivered through consulting services education services and mercury health  
business review
a detailed review of the group’s performance is provided in the section headed ‘business review’ on pages 12 to 27
since the balance sheet date the company disposed of its investment in mercury health this significant event is detailed in the section headed
‘disposal of mercury health’ on page 23
results
the results of the group are shown on page 40 and show a decrease of 24 per cent in group operating profit before amortisation impairment
share option costs and mercury health disposal costs from £241m to £183m loss before tax was £61m 2006 profit £175m and the adjusted
diluted earnings per share has decreased by 40 per cent from 172p to 103p see note 13
proposed dividend
the directors recommend a final dividend of 242p per share which together with the interim dividend of 105p paid on 2 february 2007 makes a
total of 347p for the year 2006 33p
the final dividend will be paid on 15 october 2007 to shareholders on the register on 21 september 2007
directors and directors’ interests
the board of directors’ interests are detailed on page 37
research and development
the group continues to invest in research and development this has resulted in a number of new products being launched recently which are
expected to contribute to the growth of the business
employment policies
we are a people business we seek to attract develop and retain high calibre staff and as a consequence our customers can be assured that the
service they receive is among the best available the group’s commitment to its people is discussed in the section of the business review on
page 17 headed ‘our people’
the group is an equal opportunities employer and bases all decisions on individual ability regardless of race religion gender sexual orientation 
age or disability
applications for employment by disabled persons will always be fully considered having regard to their particular aptitudes and abilities should any
employee become disabled every practical effort is made to provide continued employment depending on their skills and abilities they enjoy the
same career prospects and scope for realising their potential as other employees appropriate training is arranged for disabled persons including
retraining for alternative work for employees who become disabled to promote their career development within the organisation
supplier payment policy
the group does not follow any specified code or standard on payment practice however it is the group’s policy to negotiate terms with its
suppliers and to ensure that they are aware of the terms of payment when business is agreed it is the group’s policy to make prompt payment to
those suppliers meeting their obligations the group year end trade payables represented approximately 41 days 2006 44 days
charitable and political donations
during the year the group made charitable donations of £19836 2006 £25789 the group made no political donations during the year 2006 nil
substantial shareholdings
at 4 july 2007 the following voting interests other than directors in the ordinary share capital of the company disclosable under the financial
services authority’s disclosure and transparency rules which replaced part vi of the companies act 1985 with effect from 20 january 2007 
had been notified to the directors
ordinary shares of 5p each 
bt pension scheme trustees limited 14103152 1664
caledonia investments plc 8836232 1043
   business review governance financial statements 
30 tribal group plc report and accounts 2007
directors’ report continued
special business at the annual general meeting
a separate document accompanying the annual report and accounts 2007 contains the notice convening the annual general meeting and an
explanation of the special business to be conducted at that meeting
audit information
in the case of each of the persons who are directors of the company at the date when this report was approved
n so far as each of the directors is aware there is no relevant audit information of which the companys auditors are unaware and
n each of the directors has taken all the steps that heshe ought to have taken as a director to make himselfherself aware of any relevant audit
information and to establish that the company’s auditors are aware of that information
this confirmation is given and should be interpreted in accordance with the provisions of s234za of the companies act 1985
auditors
a resolution for the reappointment of deloitte  touche llp as auditors of the company is to be proposed at the forthcoming annual general
meeting
on behalf of the board
richard h collins
company secretary 8791 newman street
4 july 2007 london
w1t 3ey
registered in england and wales number 4128850 tribal group plc report and accounts 2007   31
corporate governance 
introduction
tribal group plc is committed to achieving high standards of corporate governance integrity and business ethics the group supports the principles
of good corporate governance and code of best practice appended to the listing rules of the financial services authority the ‘combined code’
in july 2003 the financial reporting council issued the ‘frc 2003 combined code’ which is the version of the combined code applicable to the
group in the year under review in june 2006 the financial reporting council published the ‘frc 2006 combined code’ and recommended that
this amended code be adopted by listed companies for reporting years starting sooner than the effective date for the amendments the group has
followed this recommendation
the remainder of this report sets out how the group applied the frc 2003 combined code during the year under review
compliance with the code of best practice
the group has complied throughout the year with the code provisions set out in the frc 2003 combined code
board of directors   
the board comprised seven directors being sheila forbes simon lawton strone macpherson nonexecutive chairman peter martin 
henry pitman tim stevenson and david thompson the terms and conditions of nonexecutive directors are available for inspection on request
from the company secretary the directors’ profiles are set out on page 28
on 4 june 2007 henry pitman stood down as an executive director but continues on the board in a nonexecutive capacity at the company’s
2007 annual general meeting sheila forbes will not seek reelection as a nonexecutive director 
independence 
the board believes that the nonexecutive directors excluding henry pitman are independent as defined by the code the senior independent non
executive director is tim stevenson
david thompson is also an independent nonexecutive director of caledonia investments plc which has become a significant shareholder in 
the group this connection between the group and one of its current shareholders does not affect the director’s objectivity particularly as he is
independent of executive decisionmaking processes at both companies all of the nonexecutive directors bring a wide range of experience to 
the board including building large and midcap public company businesses handson operational cvs strategy and human resources  
the chairman has other significant time commitments as indicated in his profile these have not changed materially during the year and they do not
affect his ability to devote sufficient time to the company’s activities  
the chairman strone macpherson is chairman of the nomination committee and tim stevenson is chairman of the remuneration committee
david thompson is chairman of the audit committee and has the relevant experience to chair this committee as required by the combined code 
the independent nonexecutive directors and the chairman were initially appointed for a threeyear term other than sheila forbes each nonexecutive
director and the chairman is seeking reelection at the 2007 annual general meeting
the board exercises full and effective control over the group the board maintains a formal schedule of matters reserved for the board’s decision
and its responsibilities include strategy and management of performance acquisitions capital expenditure and safeguarding the group’s assets 
the actual results of the group and a summary of operating company performance are reported to all members of the board executive members
of the board meet formally with business stream management each month to review business performance and to discuss operational and strategic
issues key points from these meetings are discussed at group board meetings
a procedure exists for the board of directors in the furtherance of their duties to take independent professional advice if necessary at the
company’s expense all directors have access to the advice and services of the company secretary who is responsible to the board for ensuring
that all rules regulations and agreed procedures are observed richard collins an experienced public company secretary and a qualified solicitor
was appointed in november 2004
on appointment and throughout their tenure directors receive appropriate training and presentations 
the roles of the chairman and chief executive are separate and clearly defined the chairman is primarily responsible for the running of the board
and the chief executive for the running of the group information is provided to the board on a timely basis in advance of each board meeting
directors receive a board pack including detailed monthly management accounts proposed acquisitions a corporate governance update and major
capital expenditure requests
all directors are appointed by the board as a whole following recommendations from the nomination committee and each director submits himself
for reelection at least every three years none of the executive directors has a service contract with a notice period greater than 12 months
during the year under review a performance evaluation of the board its committees and its individual directors was conducted by means of a
combination of written and oral processes under the control of the chairman and facilitated by the company secretary the senior independent
director with input from the other directors has evaluated the chairman’s performance 
board committees
the board has established three committees to deal with matters in accordance with written terms of reference they are an audit committee 
a nomination committee and a remuneration committee the chairmen of the board committees will be available to answer questions at the 
2007 annual general meeting
terms of reference for the audit nomination and remuneration committees can be found on the company’s website
audit committee
the audit committee meets at least twice each year the committee is chaired by david thompson and the members comprise sheila forbes and
tim stevenson the group finance director also attends all meetings the committee monitors the effectiveness of internal financial controls and
considers matters relating to accounting financial reporting accounting policies business risks and the external audit to do this it receives and
considers written and oral reports from company officers the group finance director and the external auditors procedures to correct weaknesses
identified in these reports are put in place by the group finance director and reviewed at subsequent meetings the audit committee holds
discussions with the auditors without the group finance director present at least once a year the audit committee considers annually the need for
an internal audit function it currently believes that the group is not of sufficient size or complexity to obtain value from such a function at this stage   business review governance financial statements 
32 tribal group plc report and accounts 2007
corporate governance continued
in order to safeguard auditor objectivity and independence the committee keeps these matters under review and also reviews the cost
effectiveness of the external auditors and the nature of the nonaudit services provided by them
the group has a formal policy for use of auditors for nonaudit work during the year the auditors were engaged to provide assurance services and
advice in respect of the disposal of mercury health the committee consider these engagements to be appropriate due to the auditors’ familiarity
with the company’s business
nomination committee
the nomination committee is chaired by strone macpherson and the members comprise sheila forbes tim stevenson david thompson and the
chief executive the committee deals with appointments to the board monitors potential conflicts of interest and reviews annually the
independence of the nonexecutive directors the committee is responsible for proposing candidates for appointment to the board having regard to
the balance and structure of the board suitable candidates for nonexecutive roles have in the past been identified by use of external recruitment
consultancies and the committee would expect to use a similar process in the future
remuneration committee
the remuneration committee is chaired by tim stevenson and the members comprise sheila forbes and david thompson the chairman is not a
member of the committee but he is invited to attend all committee meetings
the committee meets at least twice a year and on behalf of the board sets the remuneration packages for the directors including basic salary
bonuses and other compensation payments the committee ratifies policy and framework proposals made by executive directors in respect of the
remuneration for senior executives within the group the committee is assisted by the company secretary and takes advice as appropriate from
external advisers the remuneration report is set out on pages 34 to 37
attendance at board and committee meetings 
boardcommittee name board audit nomination remuneration current role
number of meetings in year 10 3 1 5
number of meetings attended by members
strone macpherson 10 na 1 na chairman of board and nomination committee
henry pitman
1
10 na 1 na nonexecutive director
peter martin
2
10 na na na chief executive 
simon lawton 10 na na na executive group finance director
sheila forbes 8 3 1 5 nonexecutive director 
tim stevenson 10 3 1 5 nonexecutive director chairman of remuneration committee
david thompson 10 3 1 4 nonexecutive director chairman of audit committee 
 note excludes unscheduled or purely administrative meetings
1 h pitman resigned as chief executive on 4 june 2007 and was appointed a nonexecutive director on the same date
2
p martin was appointed chief executive on 4 june 2007
maintenance of a sound system of internal control
the directors undertake a periodic review of the effectiveness of the group’s system of internal controls using a common strategic risk framework
the group’s assessment includes a review of the major financial and nonfinancial risks to the business and the corresponding internal controls
the output is continuously reviewed by the executive directors to enhance further the internal control and risk management culture of the group
throughout its subsidiaries clear responsibilities have been allocated for key risk areas such as acquisitions human resources treasury capital
expenditure insurance and information technology other risks fall within the scope of the audit remuneration and nomination committees as
appropriate no potential issues warranting disclosure in the accounts have been identified
the executive directors will review these action plans on a regular basis to ensure that the board’s plans for improvement are being implemented
and that the outputs of the strategic risk assessments remain relevant to the group a review will be carried out and an action plan prepared for all
new acquisitions as part of the integration process the action plans and their ongoing review form a process for identifying evaluating and
managing risks faced by the group such a process has been in place for the year under review and up to the date of approval of the audited
financial statements and conforms to the requirements of the turnbull guidance
review of effectiveness of internal control
the directors are responsible for the group’s system of internal control and for reviewing its effectiveness such a system is designed to manage
rather than eliminate the risk of failure to achieve business objectives in establishing and reviewing the system of internal control the directors have
regard to the materiality of relevant risks the likelihood of a loss being incurred and the costs of control it follows that the system of internal control
can only provide reasonable and not absolute assurance against the risk of material misstatement or loss
in addition to the process of assessment of internal control and the monitoring of the effectiveness of internal financial control by the audit
committee explained above the process used by the board to review the effectiveness of the system of internal controls includes the following
control environment
the directors are committed to maintaining a controlconscious culture across the group whilst allowing the business streams sufficient autonomy 
to manage and develop their businesses this is communicated to all employees by way of regular management briefings training and mentoring 
an organisational structure is in place within which the business can be planned controlled and monitored this structure includes appropriate written
delegation of authority physical controls and procedures such as authorisation limits and segregation of duties the business stream chief executives
and managing directors regularly review their responsibilities and compliance with the group’s policies and procedures the group operates a
quarterly letter of representation reporting framework for operating companies’ chief executivesmanaging directors and finance directorscontrollers to
assess and report on the adequacy of internal financial controls and completeness and accuracy of the management accounts tribal group plc report and accounts 2007   33
financial reporting
there is a comprehensive system of financial reporting to the board based on an annual budget prepared in line with the group’s strategic plan and
formally adopted by the board quarterly rolling forecasts and monthly reporting of financial and operating results budgets and plans are prepared
at the individual business unit level and summarised at business stream and group level key operational performance indicators including weekly
cash flow forecasts and daily cash balances are continuously monitored by the executive and business stream directors  
group procedures manual
responsibility levels are communicated throughout the group as part of the group procedures manual which sets out delegation of authority and
authorisation levels and other control procedures together with accounting and reporting procedures the manual is updated regularly and has
been during the year to take account of new accounting standards performance criteria operational effectiveness investment returns and other
regulatory requirements all senior finance professionals are provided with training and guidance to ensure that the current and future needs of the
group are met
shareholder relations
the chief executive and group finance director are the group’s principal spokesmen with investors analysts fund managers the press and other
interested parties access is available to the chairman andor the senior independent director and other nonexecutive directors if this is required
the chairman has met with principal shareholders in the year under review  the full board is kept informed about shareholder relations and in
particular the senior independent director is kept informed of the views of major shareholders this is done by a combination of reports to the board
on meetings held and feedback to the board from the group’s financial advisers the group holds briefing meetings with analysts and institutional
shareholders usually following the interim and final results announcements to ensure that the investing community receives a balanced and
complete view of the group’s performance and the issues faced by the business 
the group reports formally to all shareholders twice a year when its half year and full year results are announced the annual general meeting is
attended by all directors and private investors are encouraged to participate in the meeting
these results and all other stock exchange announcement information are available on the group’s website we are aware that a growing number
of shareholders are taking advantage of improvements in technology and accessing the wealth of information on corporate websites recent
changes in legislation mean that subject to the necessary authority being obtained at the forthcoming annual general meeting in future we will be
able to offer electronic copies of the report and accounts notice of annual general meeting and other documents addressed to shareholders 
going concern
after making due enquiries and following the successful sale of mercury health the directors have formed a judgement that there is a reasonable
expectation that the group has adequate resources to continue in operational existence for the foreseeable future for this reason the directors
continue to adopt the going concern basis in preparing the financial statements  business review governance financial statements 
34 tribal group plc report and accounts 2007
remuneration report 
introduction
the remuneration report has been prepared in accordance with the directors’ remuneration report regulations 2002 the ‘regulations’ the report
also meets the relevant requirements of the listing rules of the financial services authority and describes how the board has applied the principles
of good governance relating to directors’ remuneration as required by the regulations a resolution to approve the report will be proposed at the
annual general meeting of the company at which the financial statements will be approved
the regulations require the auditors to report to the company’s members on the ‘auditable part’ of the remuneration report the report has
therefore been divided into separate sections for audited and unaudited information
information not subject to audit
composition and terms of reference
the committee is comprised of three independent nonexecutive directors sheila forbes david thompson and tim stevenson chairman it
operates in accordance with written terms of reference which are determined by the board and take account of best practice and the requirements
of the combined code the terms of reference will be available at the annual general meeting
advisers to the remuneration committee
during the year under review the committee commissioned and received advice on remuneration matters from new bridge street consultants 
remuneration policy
the key objective of the group’s policy on executive directors’ remuneration is that the overall package should be sufficiently competitive to attract
retain and motivate high quality executives to achieve the group’s business objectives and reward them for enhancing shareholder value
the package consists of basic salary benefits share options performance related bonuses and pension contributions in line with the group’s growth
strategy a significant proportion of the package is based on performance and dependent upon the achievement of growth in adjusted diluted
earnings per share for certain ltip awards made in april 2007 the performance measures also relate to the company’s share price performance
the group has a range of share incentive plans in place to provide the necessary mechanisms for employees and executive directors to participate
in the long term success of the group 
the committee believes that the schemes align the interests of key employees as well as all staff generally with those of shareholders
nonexecutive directors
the fees for nonexecutive directors are determined by the board and are reviewed periodically they do not participate in any bonus scheme share
option scheme pension scheme or receive any other benefits however henry pitman who became a nonexecutive director in june 2007
continues to participate in a sharesave contract which commenced while he was an executive director
executive directors
a summary of each element of the executive directors’ remuneration is set out below
basic salaries and benefits 
basic salaries and benefits are determined by reference to market levels for similar jobs in comparable companies based on independent surveys
salaries are reviewed annually at the start of each financial year and when an individual changes position or responsibility
benefits normally a car allowance pension permanent health cover private medical insurance and a death in service benefit of four times salary
are set at a comparable level with those granted to executives at a similar level in like companies
performance related bonuses
bonus entitlement is a contractual calculation set out in each director’s service agreement and is based on the growth in the group’s adjusted
diluted earnings per share but in all cases subject to the overriding discretion of the remuneration committee the terms are reviewed and
determined annually the threshold earnings per share target is adjusted each year to the audited figure disclosed in note 13 bonus payments are
made if the threshold target is exceeded and for specific directors there is also an element of the total bonus that is dependent upon performance
measured against personal targets the total contractual bonus is subject to a fixed maximum of 75 per cent of individual’s basic salary bonus
payments do not form part of salary for pension purposes 
in addition to any contractual bonus entitlement the committee has the discretion to make ad hoc bonus payments on such terms and subject to
such performance or other targets as it sees fit typically an ad hoc bonus payment could be made to reflect exceptional performance
any bonus payments relating to the year under review are detailed in the remuneration report on page 36 in respect of the year under review
contractual bonus payments in part were achieved by two directors for achieving personal targets the base threshold was not met for the adjusted
earnings per share target in addition in line with the policy described above bonus payments were also made to peter martin in his capacity as
chief executive of mercury health in the year under review he received his entitlement to a bonus under the mercury health senior management
profit share scheme and also an ad hoc bonus reflecting mercury health’s success in winning major contracts 
executive directors’ service contracts
it is group policy to fix notice periods for executive directors for a period of no more than 12 months the committee believes that the entitlement
of directors to the security of 12 months notice of termination of employment is in line with practice in many comparable companies 
copies of each director’s service agreement will be available for inspection at the annual general meeting
the committee aims always to deal fairly with cases of termination whilst attempting to limit compensation the service agreements make
allowance for specific amounts of compensation that may become payable in the event of early termination of contracts in order to enable the
committee to respond appropriately to particular circumstances  tribal group plc report and accounts 2007   35
details of service agreements and notice periods are as follows
effective expiry notice period notice period
date of retirement for company for directors
name of director contract date months months
s m lawton 08022001 ongoing 12 12
p j martin 25062001 ongoing 12 12
h j pitman 08022001 terminated 12 12
04062007
nonexecutive directors’ contracts
nonexecutive directors have a threemonth notice period and no compensation or other benefits are payable 
details of their agreements and notice periods are as follows
effective expiry notice period notice period
date of retirement for company for directors
name of director contract date months months
s m forbes 25052004 2007 agm 3 3
p s s macpherson 10032004 2007 agm 3 3
t e p stevenson 25052004 2007 agm 3 3
d g f thompson 22032004 2007 agm 3 3
h j pitman 04062007 2007 agm 3 3
 s forbes will not seek reelection at the annual general meeting on 3 september 2007
 h j pitman was appointed a nonexecutive director on 4 june 2007
current share incentive schemes
the group currently operates five share incentive schemes two employee share option schemes ‘option schemes’ a long term incentive plan
‘ltip’ a savings related share option scheme ‘saye’ and a share incentive plan ‘sip’ the executive schemes were established to provide a
continuing incentive for executive directors and selected key employees 
1 option schemes 
there are two employee share option schemes the tribal group plc employee share option scheme ‘the plc scheme’ and the tribal
holdings limited employee share option scheme ‘the limited scheme’ the limited scheme was used to grant options prior to admission on
aim options can no longer be granted under the limited scheme
at the discretion of the committee grants are normally made under the option schemes on an annual basis such grants are subject to scheme
limits and in particular there is a cap of £30000 on the market value of tax approved options both the option schemes contain hmrc
approved and unapproved parts
the exercise of options granted under the option schemes is conditional on the annual growth in adjusted diluted earnings per share exceeding
the rise in the retail prices index ‘rpi’ 8 per cent compound over the twoyear period from grant options commence vesting after the
publication of results at an equal amount 124th over a further twoyear period options are exercisable in one tranche between four and ten
years from the later of the date of grant and the results announcement date
2 ltip 
the plan was designed to provide an incentive for selected executive directors and senior key employees 
two changes to the plan were effected in 2003 following approval at that year’s annual general meeting the total length of the award period
was reduced from five years to four years and participants are able to acquire free loyalty shares
awards from 19 september 2003 under the ltip comprise of two elements
a a nil cost option over ordinary shares referred to as ‘performance shares’ which participants will be able to acquire on a fully vested basis
at the end of a threeyear performance period subject to satisfying the performance targets
the performance target is linked to the growth in adjusted diluted earnings per share exceeding the annual growth in the rpi over the 
threeyear period from grant for awards granted to 31 march 2005 vesting will be on a straight line basis with zero per cent if the annual
adjusted diluted earnings per share growth is less than rpi 10 per cent compound up to 100 per cent if the annual adjusted diluted
earnings per share growth is equal to rpi 20 per cent compound or more for awards granted after 31 march 2005 the growth rates are
rpi 4 per cent and rpi 12 per cent respectively under the ltip scheme rules alternative or additional performance targets may be
applied the committee will use this power if it considers this appropriate and
b a nil cost option over additional ordinary shares referred to as ‘loyalty shares’ which participants will be able to acquire at the end of a
holding period of one year subject to remaining in employment
the number of loyalty shares that can be awarded to any participant will be 25 per cent of the number of performance shares which vest in
favour of each participant at the end of the performance period
in the year under review ltip awards were made to the executive directors as detailed in the note on page 37
3 saye 
the group’s hmrc approved saye scheme is open to all employees and directors who have been in continuous service for such minimum
period as is determined by the committee eligible employees may save up to £250 per month under a three year saye contract and then
apply the savings to buy shares in the company
the option price for grants prior to 2005 was set at 20 per cent below the market value at the date of grant however there was no discounted
option price for the saye contracts entered into in january 2005 and january 2006 and participation had to be scaled back because of
pressures on available shares for use by the scheme in the light of these pressures the committee has decided that there may be limited future
saye contracts   business review governance financial statements 
36 tribal group plc report and accounts 2007
remuneration report continued
4 sip
at the 2005 annual general meeting the company proposed and shareholders approved the establishment of a new allemployee 
share incentive plan  
the sip is hmrc approved  it currently provides all employees with the opportunity to acquire ‘partnership shares’ in a taxefficient manner
performance graph
the following graph compares the value of an investment of £100 in tribal group plc shares with an investment in the ftse all share index and the
ftse support services index over five years from 31 march 2002
the committee believes that this comparison provides a clear picture of how the company has performed relative to both a wide range of
companies in the uk and also a specific group of companies in the same sector
a £100 investment in tribal shares on 31 march 2002 would be worth £37 compared to £128 for an investment in the ftse all share index or £106
for an investment in the ftse support services index as at 31 march 2007
information subject to audit
directors’ remuneration
the remuneration of individual directors was as follows
performance
salary related pension 2007 2006
or fees bonus benefits costs total total
£’000 £’000 £’000 £’000 £’000 £’000
chairman
p s s macpherson 100 – – – 100 100
executive directors
h j pitman 275 – 11 33 319 451
s m lawton 180 16 10 22 228 296
p j martin 200 98 10 24 332 312
nonexecutive directors
s m forbes 25 – – – 25 25
t e p stevenson 35 – – – 35 35
d g f thompson 35 – – – 35 35
aggregate emoluments 850 114 31 79 1074 1254
during the year peter martin served as a nonexecutive director of win plc the board has agreed that he should be allowed to retain the director’s
fees paid to him by win plc which during the year were £22000 2006 £20500 
on 26 april 2007 peter martin received an ad hoc bonus payment of £135700 as part of a transaction bonus arrangement established by the
remuneration committee for the mercury health senior management team which related any bonus paid to the sale price achieved for mercury health
this was regarded as a related party transaction in the context of the group’s disposal of its investment in mercury health and was referred to in the
circular issued to shareholders before their approval of the transaction  the committee believes that a transaction bonus was necessary in order to
incentivise the mercury health management team to maximise the benefits to the group from this transformational corporate transaction  tribal group plc report and accounts 2007   37
the interests of directors in share options were as follows
at at exercise date 
31 march 31 march price from which expiry
2006 granted lapsed exercised 2007 £ exercisable date
h j pitman
saye scheme 3289 – – – 3289 £144 01032008 01082008
ltip 120250 – – – 120250 £nil 30062008 30092009
ltip – 137868 – – 137868 £nil 30062010 30092011
s m lawton
limited scheme 18744 – – – 18744 £133 30062003 23012011
plc scheme 45444 – – – 45444 £165 30062003 07022011
ltip 90909  – – 90909 – £nil 31032006 30092006
saye scheme 945 – 945 – – £200 01022006 01082006
ltip 77940 – – – 77940 £nil 30062008 30092009
ltip – 90241 – – 90241 £nil 30062010 30092011
p j martin
plc scheme 40000 – – – 40000 £283 30062003 26062011
ltip 60000  – – 60000 – £nil 31032006 30092006
ltip 77940 – – – 77940 £nil 30062008 30092009
saye scheme 2422 – – – 2422 £193 01032009 01092009
ltip – 100267 – – 100267 £nil 30062010 30092011
there have been no variations to the terms and conditions or performance criteria for share options during the financial year  the ltip awards
marked with an asterisk  relate to a fiveyear period and do not qualify for any loyalty shares as the awards were granted prior to the changes
passed at the annual general meeting on 19 september 2003 the performance criteria for these awards have been achieved and they were fully
exercised by simon lawton and peter martin during the year
ltip awards were granted during the year to henry pitman simon lawton and peter martin the market value of tribal group plc shares at the date
of grant was £187
options granted under the saye schemes are not subject to performance criteria the performance criteria as detailed on page 35 have been met
for the limited scheme and the plc scheme as far as these awards relate to simon lawton and peter martin 
the market value of the company’s shares at the year end was £122  the highest market value during the year was £226 and the lowest market
value £110
directors’ interest in shares of tribal group plc 
the directors who held office at the end of the financial year had the following interests in the shares of the company according to the register of
directors’ interests
interest at interest at
end of year start of year
h j pitman 11691871 11691871
s m lawton 663484 600724
p j martin 390888 375888
p s s macpherson 50000 50000
t e p stevenson 26000 26000
d g f thompson 217500 17500
s m forbes nil nil
 of these 1200000 ordinary shares are held by his wife and 811760 ordinary shares by the trustees of the henry pitman 2001 accumulation and maintenance trust
 of these 20000 ordinary shares are held by his wife
 of these 25000 ordinary shares are held by members of his family
 of these 17500 ordinary shares are held by members of his family
directors’ retirement benefits
all of the executive directors’ pension arrangements are of the defined contribution type no pension arrangements are provided for nonexecutive directors
during the year the company made employer contributions of 12 per cent of basic salary into the company’s defined contribution scheme or
equivalent personal pension plan
approval
this report was approved by the board of directors on 4 july 2007 and signed on its behalf by
timothy e p stevenson obe
chairman remuneration committee  business review governance financial statements 
38 tribal group plc report and accounts 2007
statement of directors’ responsibilities
the directors are responsible for preparing the annual report directors’ remuneration report and the financial statements in accordance with
applicable law and regulations
company law requires the directors to prepare financial statements for each financial year the directors are required by the ias regulation to prepare
the group financial statements under international financial reporting standards ifrs as adopted by the european union the group financial
statements are also required by law to be properly prepared in accordance with the companies act 1985 and article 4 of the ias regulation 
international accounting standard 1 requires that ifrs financial statements present fairly for each financial year the company’s financial position
financial performance and cash flows this requires the faithful representation of the effects of transactions other events and conditions in
accordance with the definitions and recognition criteria for assets liabilities income and expenses set out in the international accounting standards
board’s ‘framework for the preparation and presentation of financial statements’ in virtually all circumstances a fair presentation will be achieved by
compliance with all applicable ifrs however directors are also required to
n select and apply accounting policies properly
n present information including accounting policies in a manner that provides relevant reliable comparable and understandable information 
n provide additional disclosures when compliance with the specific requirements in ifrs are insufficient to enable users to understand the impact
of particular transactions other events and conditions on the entity’s financial position and financial performance
the directors have elected to prepare the parent company financial statements in accordance with united kingdom generally accepted accounting
practice united kingdom accounting standards and applicable law the parent company financial statements are required by law to give a true
and fair view of the state of affairs of the company in preparing these financial statements the directors are required to
n select suitable accounting policies and then apply them consistently
n make judgments and estimates that are reasonable and prudent
n state whether applicable uk accounting standards have been followed subject to any material departures disclosed and explained in the
financial statements
the directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the
company and enable them to ensure that the parent company financial statements comply with the companies act 1985 they are also responsible
for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities
the directors are responsible for the maintenance and integrity of the corporate and financial information included on the company’s website
legislation in the united kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions tribal group plc report and accounts 2007   39
independent auditors’ report to the members
of tribal group plc
we have audited the group financial statements of tribal group plc for the year ended 31 march 2007 which comprise the consolidated income
statement the consolidated balance sheet the consolidated cash flow statement the consolidated statement of recognised income and expense
and the related notes 1 to 41 these group financial statements have been prepared under the accounting policies set out therein we have also
audited the information in the directors’ remuneration report that is described as having been audited
we have reported separately on the parent company financial statements of tribal group plc for the year ended 31 march 2007
this report is made solely to the company’s members as a body in accordance with section 235 of the companies act 1985 our audit work has
been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditors’ report and for no
other purpose to the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the company and the
company’s members as a body for our audit work for this report or for the opinions we have formed
respective responsibilities of directors and auditors
the directors’ responsibilities for preparing the annual report the directors’ remuneration report and the group financial statements in accordance
with applicable law and international financial reporting standards ifrs as adopted by the european union are set out in the statement of
directors’ responsibilities
our responsibility is to audit the group financial statements in accordance with relevant legal and regulatory requirements and international
standards on auditing uk and ireland
we report to you our opinion as to whether the group financial statements give a true and fair view whether the group financial statements have
been properly prepared in accordance with the companies act 1985 and article 4 of the ias regulation and whether the part of the directors’
remuneration report described as having been audited has been properly prepared in accordance with the companies act 1985 we also report to
you whether in our opinion the information given in the directors’ report is consistent with the group financial statements the information given in
the directors’ report includes that specific information presented in the business review that is cross referenced from the business review section of
the directors’ report in addition we report to you if in our opinion we have not received all the information and explanations we require for our
audit or if information specified by law regarding directors’ remuneration and other transactions is not disclosed
we review whether the corporate governance statement reflects the company’s compliance with the nine provisions of the 2003 combined code
specified for our review by the listing rules of the financial services authority and we report if it does not we are not required to consider whether
the board’s statement on internal control covers all risks and controls or form an opinion on the effectiveness of the group’s corporate governance
procedures or its risk and control procedures
we read the other information contained in the annual report as described in the contents section and consider whether it is consistent with the
audited group financial statements we consider the implications for our report if we become aware of any apparent misstatements or material
inconsistencies with the group financial statements our responsibilities do not extend to any further information outside the annual report
basis of audit opinion
we conducted our audit in accordance with international standards on auditing uk and ireland issued by the auditing practices board an audit
includes examination on a test basis of evidence relevant to the amounts and disclosures in the group financial statements and the part of the
directors’ remuneration report to be audited it also includes an assessment of the significant estimates and judgements made by the directors in
the preparation of the group financial statements 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 group financial statements and the part of the directors’ remuneration report 
to be audited are free from material misstatement whether caused by fraud or other irregularity or error in forming our opinion we also evaluated
the overall adequacy of the presentation of information in the group financial statements and the part of the directors’ remuneration report to 
be audited
opinion
in our opinion
n the group financial statements give a true and fair view in accordance with ifrs as adopted by the european union of the state of the group’s
affairs as at 31 march 2007 and of its loss for the year then ended
n the group financial statements have been properly prepared in accordance with the companies act 1985 and article 4 of the ias regulation 
n the part of the directors’ remuneration report described as having been audited has been properly prepared in accordance with the companies
act 1985 and
n the information given in the directors’ report is consistent with the group financial statements
deloitte  touche llp
chartered accountants and registered auditors
bristol united kingdom
4 july 2007
notes an audit does not provide assurance on the maintenance and integrity of the website including controls used to achieve this and in
particular on whether any changes may have occurred to the financial statements since first published these matters are the responsibility of the
directors but no control procedures can provide absolute assurance in this area
legislation in the united kingdom governing the preparation and dissemination of financial statements differs from legislation in other jurisdictions
 business review  governance financial statements 40 tribal group plc report and accounts 2007
consolidated income statement
for the year ended 31 march 2007
group group
excluding excluding
mercury mercury 2007 mercury mercury  2006
health health total health health total
note £’000 £’000 £’000 £’000 £’000 £’000
continuing operations
turnover 234462 37795 272257 245347 14550 259897
direct agency costs 40406 – 40406 45103 – 45103
revenue 3 194056 37795 231851 200244 14550 214794
cost of sales 114633 19975 134608 115358 6650 122008
gross profit 79423 17820 97243 84886 7900 92786
administrative expenses before amortisation 
of ifrs 3 intangibles goodwill impairment 
share option costs and mercury health 
disposal costs 64957 14035 78992 62284 6424 68708
operating profit before amortisation of 
ifrs 3 intangibles goodwill impairment 
share option costs and mercury health 
disposal costs 14466 3785 18251 22602 1476 24078
share option costs 27 4 6 10 446 3 449
amortisation of ifrs 3 intangibles 15 320 – 320 316 – 316
goodwill impairment 14 14429 – 14429 –– –
mercury health disposal costs 8 – 3300 3300 –– –
14753 3306 18059 762 3 765
total administrative expenses 79710 17341 97051 63046 6427 69473
operating lossprofit 287 479 192 21840 1473 23313
investment revenues 9 1225 285 1510 394 52 446
finance costs 10 5279 2561 7840 5197 1090 6287
lossprofit before tax 4341 1797 6138 17037 435 17472
tax 11 2846 376 2470 5595 941 4654
lossprofit for the year from 
continuing operations 5 7187 1421 8608 11442 1376 12818
attributable to
equity holders of the parent 7958 1421 9379 11168 1376 12544
minority interest 32 771 – 771 274 – 274
7187 1421 8608 11442 1376 12818
earnings per share from continuing operations
basic 13 98p 17p 115p 144p 18p 162p
diluted 13 98p 17p 115p 137p 17p 154p
adjusted basic before amortisation of 
ifrs  3 intangibles goodwill impairment 
share option costs financial instrument 
creditcharge and mercury health 
disposal costs 13 81p 23p 104p 163p 18p 181p
adjusted diluted before amortisation of 
ifrs  3 intangibles goodwill impairment 
share option costs financial instrument 
creditcharge and mercury health 
disposal costs 13 80p 23p 103p 155p 17p 172p
 business review  governance financial statements tribal group plc report and accounts 2007   41
consolidated balance sheet
at 31 march 2007
note 2007 2006
£’000 £’000
noncurrent assets
goodwill 14 192099 206392
other intangible assets 15 3786 3255
property plant and equipment 16 45056 41162
investments 17 149 151
amounts recoverable on contracts 18 11833 8082
deferred tax assets 26 772 823
253695 259865
current assets
inventories 19 1298 1130
trade and other receivables 20 63205 59126
amounts recoverable on contracts 18 2840 2327
cash and cash equivalents 33483 22615
collateralised cash 21 949 1392
101775 86590
total assets 355470 346455
current liabilities
trade and other payables 22 81499 69788
tax liabilities 2742 5399
obligations under finance leases 23 98 78
bank loans and loan notes 24 5530 2907
provisions 25 450 150
shares to be issued 33 489 6102
90808 84424
net current assets 10967 2166
noncurrent liabilities
bank loans 24 102307 96556
pension liabilities 35 1436 1977
deferred tax liabilities 26 2358 939
obligations under finance leases 23 327 351
shares to be issued 33 – 135
106428 99958
total liabilities 197236 184382
net assets 158234 162073
equity
share capital 28 4234 4008
share premium account 29 74633 80771
other reserves 30 67823 60936
retained earnings 31 9941 15173
equity attributable to equity holders of the parent 156631 160888
minority interest 32 1603 1185
total equity 158234 162073
notes 1 to 41 form part of these financial statements
these financial statements were approved by the board of directors and authorised for issue on 4 july 2007 and were signed on its behalf by
peter j martin simon m lawton 
director director 42 tribal group plc report and accounts 2007
consolidated cash flow statement
for the year ended 31 march 2007
note 2007 2006
£’000 £’000
net cash from operating activities 36 24280 26194
investing activities
interest received 1873 446
proceeds on disposal of investments 2 –
proceeds on disposal of property plant and equipment 213 34
purchases of property plant and equipment – excluding mercury health 4622 4039
purchases of property plant and equipment – mercury health 7574 26569
purchases of property plant and equipment 12196 30608
expenditure on product development 1564 1048
acquisitions deferred consideration and minority interests 556 3642
net cash outflow from investing activities 12228 34818
financing activities
interest paid 7905 7524
equity dividend paid 2685 2362
dividends to minorities 95 –
issue of shares 487 304
repayment of borrowings 2352 15400
repayments of obligations under finance leases 83 57
new bank loans 10576 31538
movements in collateralised cash 443 133
purchase of own shares 105 1668
loan to third party 535 535
net cash used infrom financing activities 1184 4429
net increasedecrease in cash and cash equivalents 10868 4195
cash and cash equivalents at beginning of year 22615 26810
cash and cash equivalents at end of year 33483 22615     
notes 1 to 41 form part of these financial statements
note 2007 2006
£’000 £’000
actuarial gainloss on defined benefit plans 35 436 594
transfer to cash flow hedge reserve 30 1194 51
deferred tax 26 489 163
net incomeexpense recognised directly to equity 1141 380
lossprofit for the year 8608 12818
total recognised income and expense for the year 7467 12438
attributable to
equity holders of the parent 8238 12164
minority interest 771 274
7467 12438
notes 1 to 41 form part of these financial statements
consolidated statement of recognised
income and expense
for the year ended 31 march 2007
 business review  governance financial statements tribal group plc report and accounts 2007   43
notes to the financial statements
1 accounting policies
basis of accounting
the financial statements on pages 40 to 67 have been prepared in accordance with international financial reporting standards ifrs adopted for
use in the european union
the financial information has been prepared on the historical cost basis modified to include the revaluation of certain fixed assets and financial instruments
the accounting policies adopted in the preparation of the consolidated financial statements are consistent with those followed in the preparation of
the group’s annual financial statements for the year ended 31 march 2006 in the current year the group has adopted all of the new and revised
standards and interpretations that are relevant to its operations and effective for the current annual reporting period this adoption had no financial
impact on the financial statements
basis of consolidation
the consolidated financial statements incorporate the financial statements of the company and all its subsidiary undertakings made up to 31 march
each year
all intra group transactions balances income and expenses are eliminated on consolidation
revenue and turnover recognition
turnover comprises the gross amounts billed to clients in respect of commissionbased income together with the total of other fees earned
revenue comprises commission and fees earned in respect of turnover and is measured at the fair value of the consideration derived from the
provision of goods and services to third party customers in the normal course of business turnover and revenue are stated exclusive of vat sales
tax and trade discounts the particular recognition policies applied are
n consultancy – on performance of the contracted services
n courses training and software support and maintenance services – over the provision of the related services
n product sales – on delivery of the related goods 
n permanent recruitment – on performance over the search and selection period
n temporary recruitment – when the recruit joins the organisation
n recruitment advertising – when the advertisement is placed and 
n healthcare services – see below
direct agency costs comprise media payments and production costs in respect of commission based income cost of sales includes the direct
expenditure incurred in providing the goods and services described above including the cost of associates and the salary costs of employed fee
earners administrative expenses include the salary cost of nonfee earners
interest income is accrued on a time basis by reference to the principal outstanding and at the effective interest rate applicable
healthcare services
the principal activity of mercury health is the delivery of healthcare services to supplement existing nhs capacity these services principally relate to
delivery of contracts within the public sector the deliverables under these contracts are the design construction and commissioning of surgical and
diagnostic treatment centres and their subsequent operation over an initial five year period revenue is in the form of minimum guaranteed
payments in respect of the provision of these facilities and a variable element in respect of the number of daycare patients treated revenue from
healthcare services is recognised as follows
n revenue in respect of the provision of facilities is recognised evenly over the related contract term typically five years commencing on the date
that capacity is made available by the successful commissioning of the respective treatment or diagnostic centre and
n variable revenue in relation to patient treatments is recognised on the discharge of daycare patients back to nhs care 
business combinations
on acquisition the assets and liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition any excess
of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill any deficiency of the cost of acquisition
below the fair values of the identifiable net assets acquired is credited to income and expense in the period of acquisition
the interests of minority shareholdings are stated at the minority’s proportion of the fair values of the assets and liabilities recognised subsequently
any losses applicable to the minority interest in excess of the minority interest are allocated against the interest of the parent
on acquisition of minority shareholdings any excess of consideration paid over the carrying value of the minority interest is recognised as goodwill 
the profit or loss on the disposal or closure of a previously acquired business includes the attributable amount of any purchased goodwill relating to
that business not previously charged through the profit and loss account
the results and cash flow relating to a business are included in the consolidated income statement and the consolidated cash flow statement from
the date of acquisition or up to the date of disposal 44 tribal group plc report and accounts 2007
notes to the financial statements continued
1 accounting policies continued
goodwill
goodwill arising on consolidation represents the excess of the cost of acquisition over the group’s interest in the fair value of the identifiable assets
and liabilities of a subsidiary
goodwill is recognised as an asset and reviewed for impairment at least annually any impairment is recognised immediately in the income
statement and is not subsequently reversed
where the amount of purchase consideration is contingent on one or more future events the cost of acquisition includes a reasonable estimate of
the fair value of amounts expected to be payable in the future the cost of acquisition is adjusted when revised deferred consideration estimates are
made with consequential adjustments continuing to be made to goodwill until the ultimate deferred consideration is known
on disposal of a subsidiary the attributable amount of goodwill is included in the determination of the profit and loss on disposal
acquired intangibles
intangible assets acquired in business combinations are accounted for in accordance with ifrs 3 ‘business combinations’ such intangible assets
are recognised separately if they meet the criteria for recognition and are amortised over their expected useful economic lives unless these are
indefinite in which case they are reviewed regularly for impairment in accordance with ias 38 ‘intangible assets’
impairment of tangible and intangible assets excluding goodwill
at each balance sheet date the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any
indication that those assets have suffered an impairment loss  if any such indication exists the recoverable amount of the asset is estimated in
order to determine the extent of the impairment if any an intangible asset with an indefinite useful life is tested for impairment annually and
whenever there is an indication that the asset may be impaired
the recoverable amount is the higher of fair value less costs to sell and the value in use the estimated future cash flows are discounted to their
present value using a pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset
for which the estimates of future cash flows have not been adjusted
if the recoverable amount of an asset or cashgenerating unit is estimated to be less than its carrying amount the carrying amount of the asset
cashgenerating unit is reduced to its recoverable amount an impairment loss is recognised as an expense immediately unless the relevant asset
is carried at a revalued amount in which case the impairment loss is treated as a revaluation decrease
except for goodwill where an impairment loss subsequently reverses the carrying amount of the asset or cashgenerating unit is increased to the
revised estimate of its recoverable amount but so that the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset or cashgenerating unit in prior years a reversal of an impairment loss is
recognised as income immediately unless the relevant asset is carried at a revalued amount in which case the reversal of the impairment loss is
treated as a revaluation increase 
business systems
in accordance with ias 38 the group’s business systems are treated as an intangible asset costs included are those directly attributable to the
design construction and testing of new systems including major enhancements from the point of inception to the point of satisfactory completion
namely where the probable future economic benefits arising from the investment could be assessed with reasonable certainty at the time the costs
are incurred maintenance and minor modifications are expensed against the income statement as incurred
internally generated intangible assets – research and development costs
expenditure on research activities is recognised as an expense in the period in which it is incurred
an internally generated intangible asset arising from the group’s product development is recognised only if all of the following conditions are met
n an asset is created that can be identified
n it is probable that the asset created will generate future economic benefits and 
n the development cost of the asset can be measured reliably
internally generated intangible assets are amortised on a straightline basis over their useful lives  where no internally generated intangible asset
can be recognised development expenditure is recognised as an expense in the period in which it is incurred
property plant and equipment
property plant and equipment are stated at cost net of depreciation and any recognised impairment loss depreciation is charged so as to write off
the cost of each asset other than properties in the course of construction by equal instalments over their estimated useful economic lives as follows
leasehold – life of the lease
fixtures fittings and other equipment – 15 to 33 per cent
assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or where shorter over the
term of the relevant lease
assets in the course of construction relate to mercury health sites and are not depreciated until brought into use by the business
leases
assets acquired under finance leases are capitalised at their fair value or if lower at the present value of the minimum lease payments each
determined at the inception of the lease the outstanding future lease obligations are shown in the balance sheet as a finance lease obligation the
finance charges are allocated over the period of the lease in proportion to the capital amount outstanding and are charged directly against income
operating lease rentals are charged against income on a straight line basis over the period of the lease
 business review  governance financial statements tribal group plc report and accounts 2007   45
1 accounting policies continued
borrowing costs
borrowing costs directly attributable to the construction of qualifying assets and longterm contract costs are capitalised as part of the cost of
those assets the commencement of capitalisation begins when both finance costs and expenditures for the asset are being incurred and activities
that are necessary to get the assets ready for use are in progress capitalisation ceases when substantially all the activities that are necessary to
get the asset ready for use are complete all other borrowing costs are recognised in income or expense in the period in which they are incurred
investment properties
investment property which is property held to earn rentals andor capital appreciation is stated at its fair value at the balance sheet date gains or
losses arising from changes to the fair value of investment property are included in income or expense for the period in which they arise
investments
investments are initially measured at cost including transaction costs investments are classified as either heldfortrading or availableforsale 
they are measured at subsequent reporting dates at cost where they relate to unquoted equity investments where fair value cannot be reliably
measured and at fair value otherwise
inventories
inventories are stated at the lower of cost and net realisable value cost comprises materials direct labour and a share of production overheads
appropriate to the relevant stage of production  net realisable value is based on estimated selling price less all further costs to completion and all
relevant marketing selling and distribution costs
contract costs
longterm contracts balances represent costs incurred on specific contracts net of amounts transferred to cost of sales in respect of work
recorded as revenue less foreseeable losses and payments on account not matched with revenue contract work in progress is recognised as
revenue by reference to the value of work carried out to date
profits are recognised on longterm contracts where the final outcome can be assessed with reasonable certainty in calculating this the percentage of
completion method is used to calculate the profit based upon the proportion of costs incurred to the total estimated costs cost includes direct staff
outlays and an appropriate proportion of overheads full provision is made for all known losses immediately such losses are forecast on each contract
amounts recoverable on contracts are valued at the proportion of the anticipated net sales value of the work done to date including uncertified
amounts where the directors have satisfied themselves that entitlement has been established less billed on account advance payments are
included in creditors to the extent that they exceed the related work in progress
directly attributable contract costs in mercury health incurred from the point where there is virtual certainty that the contract will be awarded through 
to commencement of the contract are capitalised and amortised over the contract period and are also shown as ‘amounts recoverable on contracts’
previously such amounts were disclosed within ‘inventories’ as long term contract balances and have been reclassified for the 31 march 2007 financial
statements the amount reclassified for 2006 was £104m which is split £23m  £81m between current and noncurrent assets there is no other
impact on net assets profit or cash flows in any period from this reclassification all other precontract costs are expensed as incurred
exceptional items
exceptional items are material items which derive from events or transactions that fall within the ordinary activities of the group and which individually
or if of a similar type in aggregate need to be disclosed by virtue of their size or incidence if the financial statements are to give a true and fair view
retirement benefit costs
the group operates various defined contribution pension schemes that are established in accordance with employment terms set by the subsidiary
undertakings the assets of these schemes are held separately from those of the group in independently administered funds the amount charged
against profits represents the contributions payable to the scheme in respect of the accounting period
as a consequence of certain acquisitions a small number of employees participate in various defined benefit schemes the expected cost of
providing benefits is determined using the projected unit credit method with actuarial valuations being carried out at each balance sheet date
actuarial gains and losses are recognised in full in the period in which they occur in the statement of recognised income and expense
past service cost is recognised immediately to the extent that the benefits are already vested and otherwise is amortised on a straightline basis
over the average period until the benefits vest
the retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for
unrecognised past service cost and as reduced by the fair value of scheme assets any asset resulting from this calculation is limited to past
service cost plus the present value of available refunds and reductions in future contributions to the plan
government grants
government grants are recognised over the periods necessary to match them with the related costs and are deducted in reporting the related expense
provisions
provisions are recognised when the group has a present obligation as a result of a past event and it is probable that the group will be required to
settle that obligation provisions are measured at the directors’ best estimate of the expenditure required to settle the obligation at the balance sheet
date and are discounted to present value where the effect is material
operating profit
operating profit is stated before investment revenues and finance costs
sharebased payments
the group has applied the requirements of ifrs 2 ‘sharebased payment’ to all grants of equity instruments after 7 november 2002 that were
unvested as of 1 april 2005  no charge is made in respect of instruments awarded before this date because under the terms of ifrs 2 the group
is not permitted to apply the standard to these instruments the group issues equitysettled sharebased payments to certain employees equity
settled share based payments are measured at fair value at the date of grant this is expensed on a straightline basis over the vesting periods of
the instruments based on the group’s estimate of the number of shares that will vest
fair value is measured by use of a blackscholes model there is no effective liability in relation to national insurance on share options at the year
end as the company has obtained tax indemnities from employees in relation to employers’ national insurance 46 tribal group plc report and accounts 2007
notes to the financial statements continued
1 accounting policies continued
taxation
the tax expense represents the sum of the tax currently payable and deferred tax
current tax is provided at amounts expected to be paid or recovered using the tax rates and laws that have been enacted or substantially enacted
by the balance sheet date
deferred tax is the tax expected to be payable or recoverable on differences between the carrying values of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability
method deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against which deductible temporary differences can be utilised such assets and liabilities are
not recognised if the temporary difference arises from goodwill or from the initial recognition other than in a business combination of other assets
and liabilities in a transaction that affects neither the tax profit nor the accounting profit
the carrying value of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part of the asset to be recovered
deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised deferred tax in
the income statement is charged or credited except when it relates to items charged or credited directly to equity in which case the deferred tax is
also dealt with in equity
shares to be issued
in accordance with ias 32 ‘financial instruments disclosure and presentation’ shares to be issued are recognised as a financial liability as they
relate to obligations to settle acquisition related deferred consideration in tribal group plc shares the number of shares to be issued will vary
depending upon the share price at the date of settlement
cash cash equivalents and collateralised cash
cash for the purpose of the cash flow statement comprises cash in hand and deposits repayable on demand less overdrafts payable on demand
these instruments are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value
collateralised cash comprises funds reserved for financial guarantee contracts and are carried at fair value
derivative financial instruments
the group’s activities expose it primarily to the financial risks of changes in interest rates the group uses interest rate swap contracts to hedge
these exposures  
the use of financial derivatives is governed by the group’s policies approved by the board which provides written principles on the use of financial
derivatives
changes in the fair value of derivative financial instruments that are designated and effective as hedges of future cash flows are recognised directly
in equity and the ineffective portion is recognised immediately in the income statement if the cash flow hedge of a firm commitment or forecasted
transaction results in the recognition of an asset or a liability then at the time the asset or liability is recognised the associated gains or losses on
the derivative that had previously been recognised in equity are included in the initial measurement of the asset or liability for hedges that do not
result in the recognition of an asset or a liability amounts deferred in equity are recognised in the income statement in the same period in which the
hedged item affects net profit or loss
for an effective hedge of an exposure to changes in fair values the hedged item is adjusted for changes in fair value attributable to the risk being
hedged with the corresponding entry in income or expense gains or losses from remeasuring the derivative are recognised in equity except for
any ineffective element which is recognised in income or expense
changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognised in the income statement as they arise
hedge accounting is discontinued when the hedging instrument expires or is sold terminated or exercised or no longer qualifies for hedge
accounting at that time any cumulative gain or loss on the hedging instrument recognised in equity is retained in equity until the forecasted
transaction occurs if a hedging transaction is no longer expected to occur the net cumulative gain or loss recognised in equity is transferred to net
income or expense for the period
derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and characteristics
are not closely related to those of host contracts and the host contracts are not carried at fair value with unrealised gains or losses reported in the
income statement 
trade receivables
trade receivables are measured at initial recognition at fair value and are subsequently measured at amortised cost using the effective interest rate
method appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset
is impaired the allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future
cash flows discounted at the effective interest rate computed at initial recognition
trade payables
trade payables are initially measured at fair value and are subsequently measured at amortised cost using the effective interest rate method
borrowings
borrowings are recorded at the proceeds received net of direct issue costs finance charges including premiums payable on settlement or
redemption and direct issue costs are accounted for on an accrual basis in profit or loss using the effective interest rate method and are added to
the carrying amount of the instrument to the extent that they are not settled in the period in which they arise
 business review  governance financial statements tribal group plc report and accounts 2007   47
1 accounting policies continued
equity instruments
equity instruments issued by the company are recorded at the proceeds received net of direct issue costs
new standards and interpretations not applied
during the year the iasb and ifric have issued the following standards and interpretations with an effective date after the date of these 
financial statements
effective date periods beginning on or after
amendment to ias 23 ‘borrowing costs’ 1 january 2009
ifrs 7 ‘financial instruments disclosures’ 1 january 2007
ifrs 8 ‘operating segments’ 1 january 2009
ifric 8 ‘scope of ifrs 2’ 1 may 2006
ifric 9 ‘reassessment of embedded derivatives’ 1 june 2006
ifric 10 ‘interim financial reporting and impairment’ 1 november 2006
ifric 11 ‘ifrs 2 – group and treasury share transactions’ 1 march 2007
ifric 12 ‘service concession arrangements’ 1 january 2008
the directors do not anticipate that the adoption of these standards and interpretations will have a material financial impact on the group’s financial
statements in the period of initial application
2 critical accounting judgements
in the process of applying the group’s accounting policies which are described in note 1 management have made the following judgements that
have the most significant effect on the amounts recognised in the financial statements
goodwill 
the carrying value of goodwill at the year end is £1921m 2006 £2064m an annual impairment review is required under ifrs 3 ‘business
combinations’ involving judgement of the future cash flows for cash generating units the group prepares such cash flow forecasts derived from
the most recent budgets approved by management for the next two years further details of the other assumptions used are given in note 14  
mercury health assets 
the implementation phase of the main delivery contract has resulted in significant expenditure on fixed assets and working capital in order to
provide the contracted services these assets are a requirement of the contract and this leads to judgements regarding the appropriate
capitalisation and amortisation rates of these assets    
revenue recognition 
the group’s revenue recognition policies are disclosed in note 1 in some cases judgement is required in order to determine the appropriate level of
income to recognise where delivery of services is performed over time or where the basis of delivery may vary from the contractually agreed terms
3 revenue
an analysis of the group’s revenue is as follows
2007 2006
£’000 £’000
continuing operations
sales of services 231851 214794
investment revenues 1510 446
total revenue 233361 215240
sale of goods is not material and is therefore not shown separately
4 business segments
the group is currently organised into three business streams – consulting services education services and mercury health
principal activities are as follows
consulting services – one of the largest consultancy businesses operating in the public sector providing a broad range of management
consultancy pr and communications resourcing and property services
education services – one of the largest providers of education services to the public sector including software managed services school
inspection services consultancy benchmarking publishing and training
mercury health – comprises the group’s healthcare delivery business providing diagnostic elective gp and primary care services
the group has been further reorganised in order to simplify its reporting structure and as a consequence the four segments which were previously
disclosed separately under consulting services have been amalgamated accordingly the business segment information for the year ended 
31 march 2006 has been restated to show the current business stream structure as a result there has been an adjustment to intersegment sales
and eliminations 48 tribal group plc report and accounts 2007
notes to the financial statements continued
4 business segments continued
segment information about the businesses is presented below
year ended 31 march 2007
consulting education mercury 
services services health eliminations consolidated
2007 2007 2007 2007 2007
£’000 £’000 £’000 £’000 £’000
revenue
external sales 115863 78193 37795 – 231851
intersegment sales 1462 507 – 1969 –
total revenue 117325 78700 37795 1969 231851
segment profit 6797 14102 3785 – 24684
unallocated corporate expenses 6433
amortisation of ifrs 3 intangibles 320
share option costs 10
goodwill impairment 14429
mercury health disposal costs 3300
operating profit 192
investment revenues 1510
finance costs 7840
loss before tax 6138
tax 2470
loss for the period 8608
intersegment sales are charged at prevailing market prices
balance sheet information
consulting education mercury 
services services health unallocated consolidated
2007 2007 2007 2007 2007
£’000 £’000 £’000 £’000 £’000
assets
segment assets 162033 94521 57986 40930 355470
liabilities
segment liabilities 35502 28879 46241 86614 197236
other segment information
capital additions 2059 2470 6550 245 11324
depreciation amortisation and impairment 12693 5239 2318 724 20974
the group’s operations are wholly undertaken in the united kingdom and hence no secondary business segment by geography is presented 
year ended 31 march 2006
consulting education mercury 
services services health eliminations consolidated
2006 2006 2006 2006 2006
£’000 £’000 £’000 £’000 £’000
revenue
external sales 121444 78800 14550 – 214794
intersegment sales 1299 384 – 1683 –
total revenue 122743 79184 14550 1683 214794
segment profit 15464 13735 1476 – 30675
unallocated corporate expenses 6597
amortisation of ifrs 3 intangibles 316
share option costs 449
operating profit 23313
investment revenues 446
finance costs 6287
profit before tax 17472
tax 4654
profit for the period 12818
intersegment sales are charged at prevailing market prices
 business review  governance financial statements tribal group plc report and accounts 2007   49
4 business segments continued
balance sheet information
consulting education mercury 
services services health unallocated consolidated
2006 2006 2006 2006 2006
£’000 £’000 £’000 £’000 £’000
assets
segment assets 173292 94351 46349 32463 346455
liabilities
segment liabilities 32488 30051 33071 88772 184382
other segment information
capital additions 1799 6381 28006 1025 37211
depreciation and amortisation 1565 1506 632 648 4351
the group’s operations are wholly undertaken in the united kingdom and hence no secondary business segment by geography is presented
5 lossprofit for the year
2007 2006
£’000 £’000
lossprofit for the year is stated after chargingcrediting
depreciation and other amounts written off property plant and equipment
owned 5177 3474
leased 179 126
increase in fair value of investment property – 20
staff costs see note 7 102667 92510
amortisation of acquired intangible assets 320 316
amortisation of business systems 113 78
goodwill impairment 14429 –
cost of inventories recognised as an expense 4694 1962
write down of inventories recognised as an expense 87 48
research and development expenditure 926 512
amortisation of development costs 756 357
the analysis of auditors’ remuneration is as follows 2007 2006
£’000 £’000
fees payable to the company’s auditors for the audit of the company’s annual report including ifrs restatement in 2006 96 142
fees payable to the company’s auditors and their associates for other services to the group
– the audit of the company’s subsidiaries pursuant to legislation 178 205
– the review of interim results 27 25
total audit fees 301 372
– tax services 322 229
– corporate finance services 895 52
– other services 29 14
total nonaudit fees 1246 295
total auditors’ remuneration 1547 667
fees payable to deloitte  touche llp and their associates for nonaudit services to the company are not required to be disclosed because the
consolidated financial statements are required to disclose such fees on a consolidated basis
included within tax services payable to the auditors are fees of £185000 2006 £nil in relation to the disposal of mercury health tax compliance
fees of £87000 2006 £180000 tax advisory fees of £50000 2006 £31000 and vat advice of £nil 2006 £18000
corporate finance services include fees of £845000 2006 £nil relating to the disposal of mercury health and fees as reporting accountants of
£50000 2006 £52000 see page 32 for group policy on use of auditors for nonaudit work
other services include accounting advice of £29000 2006 £9000 and £nil 2006 £5000 for the preparation of other statutory reports  50 tribal group plc report and accounts 2007
notes to the financial statements continued
6 remuneration of directors
2007 2006
£’000 £’000
directors’ emoluments 1074 1254
included within directors’ emoluments are pension costs of £79000 2006 £74000 in respect of payments made to three 2006 three directors’
individual defined contribution pension schemes
disclosures on directors’ remuneration share options longterm incentive schemes and pension contributions are contained in the 
‘directors’ remuneration’ section within the audited part of the remuneration report and form part of these audited financial statements
7 staff numbers and costs
the average number of persons employed by the group including executive directors during the year was as follows
2007 2006
no no
selling operations and marketing 1849 1690
finance and administration 445 433
2294 2123
the aggregate payroll costs of these persons were as follows 2007 2006
£’000 £’000
wages and salaries 86931 80253
social security costs 11017 8005
pension costs      4709 3803
share option costs 10 449
102667 92510
8 mercury health disposal costs
mercury health disposal costs of £33m 2006 £nil represent the committed costs incurred by 31 march 2007 in relation to the disposal of 
mercury health holdings limited and its subsidiaries the disposal received shareholder approval on 19 april 2007 and was completed on 
20 april 2007 see note 37 ‘post balance sheet events’
9 investment revenues
2007 2006
£’000 £’000
interest on bank deposits 1041 446
gain arising on derivatives 469 –
1510 446
10 finance costs
2007 2006
£’000 £’000
finance charges
interest on bank overdrafts and loans 7785 6500
interest on loan notes 66 249
interest on obligation under finance leases 33 23
net interest payable on retirement benefit obligations 30 26
total borrowing costs 7914 6798
less amounts included in the cost of qualifying assets 365 1276
7549 5522
financial instruments
loss arising on derivatives 127 322
discounting charge for deferred consideration 164 443
291 765
7840 6287
borrowing costs included in the cost of qualifying assets during the year arose on the mercury health istc contract for which the related
borrowings are separately identifiable and are capitalised at the average rate incurred of 69 per cent 2006 69 per cent
 business review  governance financial statements tribal group plc report and accounts 2007   51
11 tax
2007 2006
£’000 £’000
current tax
uk corporation tax 3412 5495
adjustments in respect of prior years 1923 1493
1489 4002
deferred tax
current year 981 652
tax charge on profits 2470 4654
the charge for the year can be reconciled to the lossprofit per the income statement as follows
lossprofit before tax 6138 17472
tax creditcharge at standard rate of 30 2006 30 1841 5242
effects of
intangible amortisation and impairment 4292 242
expenses not deductible for tax purposes 1942 396
adjustments in respect of prior years 1923 1493
share based payments and discounting charges – 267
tax expense for the year 2470 4654
in addition to the income tax charged to the income statement a deferred tax charge of £489000 2006 credit of £163000 has been taken
directly to equity see consolidated statement of recognised income and expense on page 42
the expected reduction in the corporation tax rate to 28 from 1 april 2008 is expected to affect the future tax charge accordingly
12 dividends
2007 2006
£’000 £’000
amounts recognised as distributions to equity holders in the period
final dividend for the year ended 31 march 2006 of 225 pence 2005 20 pence per share 1812 1530
interim dividend for the year ended 31 march 2007 of 105 pence 2006 105 pence per share 880 832
2692 2362
proposed final dividend for the year ended 31 march 2007 of 242 pence 2006 225 pence per share 2050 1804
the proposed final dividend is subject to approval by shareholders at the annual general meeting and has not been included as a liability in these
financial statements
13 earnings per share
earnings per share and diluted earnings per share are calculated by reference to a weighted average number of ordinary shares calculated as follows
2007 2006
thousands thousands
weighted average number of shares outstanding
basic weighted average number of shares in issue 81889 77255
employee share options 176 763
shares to be issued in respect of deferred consideration 410 3255
weighted average number of shares outstanding for dilution calculations 82475 81273 52 tribal group plc report and accounts 2007
notes to the financial statements continued
13 earnings per share continued
the adjusted basic and adjusted diluted earnings per share figures shown on the consolidated income statement on page 40 are included as the
directors believe that they provide a better understanding of the underlying trading performance of the group a reconciliation of how these figures
are calculated is set out below
year ended 31 march 2007
group excluding  
mercury health mercury health total
lossearnings lossearnings lossearnings
earnings per share earnings per share earnings per share
£’000 pence £’000 pence £’000 pence
basic and adjusted basic lossearnings per share
loss and basic loss per share 7958 98p 1421 17p 9379 115p
adjustments
share option costs 4 – 6 – 10 –
amortisation of ifrs 3 intangibles net of tax 224 03p – – 224 03p
goodwill impairment 14429 176p – – 14429 176p
mercury health disposal costs – – 3300 40p 3300 40p
financial instruments net credit net of tax 40 – 51 – 91 –
adjusted earnings and adjusted basic earnings per share 6659 81p 1834 23p 8493 104p
diluted and adjusted diluted lossearnings per share
loss and diluted loss per share 7958 98p 1421 17p 9379 115p
adjustments
share option costs 4 – 6 – 10 –
amortisation of ifrs 3 intangibles net of tax 224 03p – – 224 03p
goodwill impairment 14429 175p – – 14429 175p
mercury health disposal costs – – 3300 40p 3300 40p
financial instruments net credit net of tax 40 – 51 – 91 –
adjusted earnings and adjusted diluted earnings per share 6659 80p 1834 23p 8493 103p
year ended 31 march 2006
group excluding  
mercury health mercury health total
lossearnings lossearnings lossearnings
earnings per share earnings per share earnings per share
£’000 pence £’000 pence £’000 pence
basic and adjusted basic lossearnings per share
profit and basic earnings per share 11168 144p 1376 18p 12544 162p
adjustments
share option costs 446 06p 3 – 449 06p
amortisation of ifrs 3 intangibles net of tax 316 04p – – 316 04p
financial instruments charge net of tax 659 09p 9 – 668 09p
adjusted earnings and adjusted basic earnings per share 12589 163p 1388 18p 13977 181p
diluted and adjusted diluted earnings per share
profit and diluted earnings per share 11168 137p 1376 17p 12544 154p
adjustments
share option costs 446 06p 3 – 449 06p
amortisation of ifrs 3 intangibles net of tax 316 04p – – 316 04p
financial instruments charge net of tax 659 08p 9 – 668 08p
adjusted earnings and adjusted diluted earnings per share 12589 155p 1388 17p 13977 172p
14 goodwill
2007 2006
£’000 £’000
cost
at beginning of year 234094 232949
additions – including minority interests 274 4136
revisions to prior years 138 2991
at end of year 234230 234094
accumulated impairment losses 
at beginning of year 27702 27702
impairment charge 14429 –
at end of year 42131 27702
net book value
at end of year 192099 206392
at beginning of year 206392 205247
 business review  governance financial statements tribal group plc report and accounts 2007   53
14 goodwill continued
during the year options were exercised by certain employees of tribal resourcing limited over ordinary ‘b’ shares in that company these were
immediately repurchased by the company through the issue of tribal group plc shares the excess of the value paid over the consideration
received for the options is shown as an addition to the cost of goodwill
additions in respect of mercury health represent the purchase of trade and assets of a small business together with the minority shareholding in
mercury health primary care limited
revisions to prior years primarily relate to changes both increases and decreases in estimates of the likely final settlement values under various
earn out agreements which are dependent on post acquisition performance
goodwill acquired in a business combination is allocated at acquisition to the cash generating units that are expected to benefit from the business
combination the carrying amount of goodwill has been allocated as follows
2007 2006
£’000 £’000
consulting services
communications 17677 17677
consulting 64994 71207
property 21272 21245
resourcing 21614 26927
125557 137056
education services 66374 69336
mercury health 168 –
192099 206392
the group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired
the recoverable amounts of the cash generating units are determined from value in use calculations the key assumptions for the value in use
calculations are those regarding the discount rates growth rates and expected changes to selling prices and direct costs during the period
management estimates discount rates using pretax rates that reflect current market assessments of the time value of money and the risks specific
to the cash generating units  the growth rates are based on internal budgets in the short term and general market rates thereafter changes in
selling prices and direct costs are based on past practices and expectations of future changes in the market
the group prepares cash flow forecasts derived from the most recent financial budgets approved by management for the next two years and
extrapolates cash flows for two further years at 4 and into perpetuity based on an estimated growth rate of 25 this rate does not exceed the
average longterm growth rate for the relevant markets
the rate used to discount the forecast cash flow is 87
as a result of the annual impairment test carried out during the current year the group has made goodwill impairments totalling £144m allocated
as follows
£’000
consulting services
consulting – medical equipping 1644
consulting – other 4000
resourcing – action medical 5431
education services – fe training 3354
14429
the cash generating units in question have all been identified on the basis that they are separately identifiable business streams within the group 
in the case of medical equipping and fe training this impairment reflects management’s decision to terminate the related business streams and as
a consequence of this the goodwill in relation to these units has been fully impaired
action medical whose principal activity is the provision of temporary staff to the medical profession has faced a fundamental change in its business
during the year due to a move in the industry towards national supply contracts which favour the larger temporary recruitment providers ahead of
the niche market provider this in turn has had a significant adverse effect on its profitability at the interim management assessed the impact as a
£2m reduction in goodwill but in the light of continuing results have now concluded that the goodwill of this business should be impaired in full
following the disappointing performance of the consulting business stream in the year management has taken a prudent view when preparing its
forecast as a result the impairment review for the remainder of the consulting business stream produced a value in use which is £4m below the
carrying value of the related goodwill hence the impairment charge as the forecast recoverable amount is now equal to the carrying value it follows
that if future results were to fall below those assumed for the purposes of the value in use calculations a further impairment charge would arise in this
respect the group considers that the anticipated recovery in operating cash flows in the period to december 2008 is the most sensitive assumption
management do not believe there to be any other cash generating units for which there is a ‘reasonably possible’ change in the key assumptions
that would result in an impairment 54 tribal group plc report and accounts 2007
notes to the financial statements continued
15 other intangible assets
business development business
combinations costs systems total
£’000 £’000 £’000 £’000
cost
at 1 april 2005 2732 1993 384 5109
additions – 1048 7 1055
acquired 197 – – 197
fair value adjustment 725 – – 725
at 1 april 2006 2204 3041 391 5636
additions – 1564 156 1720
disposals – 471 – 471
at 31 march 2007 2204 4134 547 6885
amortisation
at 1 april 2005 322 1253 55 1630
charge for the year 316 357 78 751
at 1 april 2006 638 1610 133 2381
charge for the year 320 756 113 1189
disposals – 471 – 471
at 31 march 2007 958 1895 246 3099
carrying amount
at 31 march 2007 1246 2239 301 3786
at 31 march 2006 1566 1431 258 3255
at 31 march 2005 2410 740 329 3479
in accordance with ifrs 3 the intangible assets acquired on business combinations comprise software maintenance revenue trading relationships
intellectual property and contract pipeline they are amortised over their estimated useful lives which on average is five years
the amortisation period for development costs incurred on the group’s software development and product development is two to three years based
on the expected life cycle of the product
the group’s corporate business systems software is amortised over five years
the fair value adjustment relates to a reduction in the estimate of the likely final settlement value under an earnout agreement which was dependent
on the post acquisition performance
16 property plant and equipment
fixtures assets 
long term fittings in the
investment leasehold short term  and other course of
property buildings leases equipment construction  total
£’000 £’000 £’000 £’000 £’000 £’000
cost or valuation
at 1 april 2005 180 584 2381 13169 5829 22143
additions – – 1352 4849 25819 32020
increase in fair value 20 – – – – 20
reclassification – 20780 – – 20780 –
acquired with subsidiaries – – – 230 – 230
disposals – – 24 769 – 793
at 1 april 2006 200 21364 3709 17479 10868 53620
additions – 4855 718 3741 16 9330
reclassification – 10868 – – 10868 –
disposals – – 14 1160 – 1174
at 31 march 2007 200 37087 4413 20060 16 61776
depreciation
at 1 april 2005 – 30 628 8767 – 9425
charge for year – 379 433 2788 – 3600
acquired with subsidiaries – – – 155 – 155
disposals – – 18 704 – 722
at 1 april 2006 – 409 1043 11006 – 12458
charge for year – 1654 522 3180 – 5356
disposals – – 14 1080 – 1094
at 31 march 2007 – 2063 1551 13106 – 16720
net book value
at 31 march 2007 200 35024 2862 6954 16 45056
at 31 march 2006 200 20955 2666 6473 10868 41162
at 31 march 2005 180 554 1753 4402 5829 12718
 business review  governance financial statements tribal group plc report and accounts 2007   55
16 property plant and equipment continued
included in the total net book value of fixtures fittings and other equipment is £266000 2006 £362000 in respect of assets held under finance
leases depreciation for the year on these assets was £179000 2006 £126000 of the fixed asset additions of £93m 2006 £320m during the
period £65m 2006 £288m relates to mercury health
the fair value of the group’s investment property at 31 march 2007 has been arrived at on the basis of a valuation carried out at that date by
bernard marcus independent valuers not connected with the group the valuation was arrived at by reference to market evidence of transaction
prices for similar properties
the property rental income earned by the group from its investment property all of which is leased out under operating leases amounted to
£10000 2006 £9000 direct operating expenses arising on the investment property in the period amounted to £9000 2006 £3000
17 investments
investment in associates
2007 2006
£’000 £’000
cost
at beginning of year 151 151
disposals 2 –
at end of year 149 151
the directors have considered the value of the above investments and are satisfied that the aggregate value of the investments is not less than their
carrying value the results of associates are excluded as they are not material to the results of the group 
18 amounts recoverable on contracts
2007 2006
£’000 £’000
noncurrent 11833 8082
current 2840 2327
14673 10409
included within amounts recoverable on contracts are directly attributable contract costs of £144m 2006 £104m incurred after the point when
there was virtual certainty that the mercury health istc contract and subsequent contracts would be awarded and related mobilisation costs that
represent implementation costs incurred prior to the contract delivery phase these are included within amounts recoverable on contracts and
amortised over the contract period which is approximately five years
these amounts were previously disclosed as part of inventories and trade and other receivables see notes 19 and 20
19 inventories
2007 2006
£’000 £’000
work in progress 123 213
finished goods and goods for resale 1175 917
1298 1130
long term contract balances of £104m in 2006 relating to the mercury health istc contracts have been reclassified as amounts recoverable on
contracts as explained further in note 18
20 trade and other receivables
2007 2006
£’000 £’000
trade receivables 48363 45431
other receivables 725 1675
prepayments and accrued income 13100 12020
fair value of interest rate swaps 1017 –
63205 59126
amounts recoverable under contracts previously within trade and other receivables of £44000 have now been reclassified separately see note 18
the directors consider that the carrying amount of trade and other receivables approximates their fair value an allowance has been made for
estimated irrecoverable amounts from the sales of goods and services of £07m 2006 £04m this allowance has been determined by reference to
past default experience
the average credit period taken on the sale of goods and services is 42 days 2006 42 days 56 tribal group plc report and accounts 2007
notes to the financial statements continued
21 collateralised cash
cash collateralised of £09m 2006 £14m represents committed cash facilities that are specifically allocated to pay loan notes as described in note 24
22 trade and other payables
2007 2006
£’000 £’000
trade payables 24046 24147
other taxation and social security 11734 12503
other payables 4251 1892
accruals and deferred income 41468 30473
deferred cash consideration – 254
fair value of interest rate swaps – 519
81499 69788
the average credit period taken for trade purchases is 41 days 2006 44 days
the directors consider that the carrying amount of trade and other payables approximates to their fair value
£150000 of accruals in 2006 has now been reclassified as provisions see note 25
23 obligations under finance leases and hire purchase contracts
the group uses finance leases and hire purchase contracts to acquire fixtures fittings and other equipment
the value of future minimum lease payments and their present values are analysed as follows
minimum present value minimum present value
lease of minimum lease of minimum
payments lease payments payments lease payments
2007 2007 2006 2006
£’000 £’000 £’000 £’000
within one year 105 98 92 78
in the second to fifth years inclusive 391 327 398 340
after five years –– 15 11
496 425 505 429
the group has certain computer equipment and motor vehicles held under finance leases the average lease term is four years 2006 five for the
year ended 31 march 2007 the average effective borrowing rate was 71 2006 71 interest rates are fixed at the contract date all leases are
on a fixed repayment basis and no arrangements have been entered into for contingent rental periods
the group’s obligations under finance leases are secured by the lessors rights over the leased assets
the fair value of the group’s lease obligations approximates to their carrying value
24 bank loans and loan notes
2007 2006
£’000 £’000
bank loans 106382 96556
loan notes 1455 2907
107837 99463
maturity of bank loans and loan notes
2007 2006
£’000 £’000
bank loans and loan notes can be analysed as falling due
on demand or within one year 5530 2907
in the second year 5110 4000
in the third to fifth years inclusive 97197 92556
107837 99463
the bank arrangements are all denominated in uk sterling
floating floating
fixed rate rate total fixed rate rate total
2007 2007 2007 2006 2006 2006
£’000 £’000 £’000 £’000 £’000 £’000
bank loans 57500 48882 106382 46000 50556 96556
loan notes – 1455 1455 116 2791 2907
total 57500 50337 107837 46116 53347 99463
 business review  governance financial statements tribal group plc report and accounts 2007   57
24 bank loans and loan notes continued
the weighted average interest rates paid were as follows
2007 2006
bank loans 63 72
loan notes 40 35
the weighted average fixed rate is 50 2006 50 and the weighted average period for which interest rates on fixed rate liabilities are fixed is
three years 2006 four years  there are £513m 2006 £513m undrawn committed borrowing facilities which all expire in three to five years
the directors estimate the fair value of the group’s borrowings as follows
2007 2006
£’000 £’000
bank loans 105365 97075
loan notes 1455 2907
106820 99982
bank loans comprise four elements
a £125m is available under a revolving facility until 14 october 2010 the interest rate is reset for a period of one three or six months at libor
plus a variable margin determined by covenant calculations the rate is managed through interest rate swaps at 31 march 2007 the amount
drawn down net of bank arrangement fees was £727m 2006 £723m the loan is secured by way of a fixed and floating charge over the
assets of the group
b an unsecured revolving facility of £5m is available under a share option facility until 4 august 2010 the facility is used to onlend funds to the
tribal group employee share ownership trust for the sole purpose of acquiring shares in the company in connection with the company’s
employee share schemes the interest rate is reset for a period of one three or six months at libor plus 225 at 31 march 2007 the
amount drawn down was £17m 2006 £17m
c a £335m nonrecourse senior debt facility secured by mercury health to fund the construction of the facilities as part of the istc contract 
the lenders have a direct contractual relationship with the secretary of state who has underwritten the loan the facility comprises two separate
loans £21m and £125m  at 31 march 2007 the total amount drawn down net of bank arrangement fees was £315m 2006 £226m 
the loans are repayable in instalments with full repayment due at the conclusion of the contract of the amount outstanding £4m is repayable
within one year £5m repayable in the second year and £225m is repayable in the third to fifth years
d two commercial loans totalling £05m to fund mercury health asset purchases both loans were entered into in january 2007 for a period of 
five years quarterly fixed repayments of £30300 commence in april 2007
the interest rates on the outstanding loan notes are at market rates determined by each separate agreement with typical interest rates being one
percent below base rate repayment terms vary between one and five years but all are redeemable for cash at the request of the loan note holders
and are therefore recorded as current liabilities
interest bearing loan notes are normally issued as part of the purchase consideration or deferred consideration on the new business or minority
interest acquired all outstanding loan notes are redeemable for cash at par on or before 30 june 2010 at the option of the loan note holder
25 provisions
2007 2006
litigation provision £’000 £’000
at beginning of year 150 –
additional provision in year 450 150
utilisation of provision 150 –
at end of year 450 150
provisions represent an estimate of the cost of settling potential litigation claims these claims are expected to be resolved within one year and are
therefore shown within current liabilities further details are contained in note 38
the opening balance of £150000 has been reclassified from accruals see note 22 58 tribal group plc report and accounts 2007
notes to the financial statements continued
26 deferred tax
the amounts provided for deferred taxation and the amounts for which credit has been taken are set out below
2007 2006
£’000 £’000
deferred tax assets
retirement benefit schemes 431 594
holiday pay accrual 253 300
capital allowances in excess of depreciation – 137
derivative financial instruments – 15
other timing differences 88 81
772 823
deferred tax liabilities
capital allowances in excess of depreciation 1010 –
intangible assets 764 728
fair value adjustment on investment property 36 36
leasehold property not qualifying for tax allowances 175 175
derivative financial instruments 373 –
2358 939
the directors are of the opinion based on currently available forecasts that these timing differences will reverse in the near future and when they do
there will be sufficient taxable profits accordingly the directors believe that it is more likely than not that the deferred tax assets will be recoverable
the movement in deferred tax assets and liabilities during the year was as follows
temporary retirement derivative other
differences on holiday pay benefit financial temporary
intangible assets accrual schemes instruments differences total
£’000 £’000 £’000 £’000 £’000 £’000
at 1 april 2006 1076 300 594 15 81 116
chargedcredited to income statement 909 47 32 – 7 981
items taken directly to equity – – 131 358 – 489
at 31 march 2007 1985 253 431 373 88 1586
the restated movement in deferred tax assets and liabilities during the previous year was as follows
temporary retirement derivative other
differences on holiday pay benefit financial temporary
intangible assets accrual schemes instruments differences total
£’000 £’000 £’000 £’000 £’000 £’000
at 1 april 2005 587 227 411 – 173 224
chargedcredited to income statement 638 73 5 – 92 652
acquisitions 149 – – – – 149
items taken directly to equity – – 178 15 – 163
at 31 march 2006 1076 300 594 15 81 116
27 sharebased payments
the group recognised the following expenses related to equitysettled share based payment transactions
2007 2006
£’000 £’000
ltip 107 107
saye 133 337
acquired schemes 16 5
10 449
employee share option scheme esos
options granted under the esos prior to 17 july 2003 have an award period of four years the options are granted at market value the extent to
which an award vests is measured by the reference to the growth in the group’s adjusted diluted earnings per share over two financial years
options granted since 17 july 2003 have an award period of three years and vest based on the growth in the adjusted diluted earnings per share
over a three year period the performance criteria for these schemes has either not been met or are unlikely to be met and therefore no expense
has been recognised in either the current or prior year
 business review  governance financial statements tribal group plc report and accounts 2007   59
27 sharebased payments continued
ltip
awards made to eligible employees under the ltip are nil cost options with an award period of four years the extent to which an award vests is
measured by reference to the growth of the group’s adjusted diluted earnings per share over the performance period of three financial years it is
most unlikely that the ltips granted in 2006 will meet the performance criteria and therefore the charge made in 2006 has been reversed in the
current year in addition the ltips granted in the current year are unlikely to meet the performance criteria and accordingly no charge has been made
saye
the saye scheme provides for a purchase price equal to mid market value at date of grant for grants prior to january 2005 a discount to market
value of 20 was applied all schemes are three year saving schemes
acquired schemes
the acquired schemes relate to share option schemes existing when the group acquired certain businesses these option schemes have rolled into
tribal options and have no performance criteria the current year credit is a result of the options that have lapsed during the year
options outstanding during the year are as follows
esos ltip saye acquired schemes
weighted weighted weighted weighted
number average number average number average number average
of options exercise of options exercise of options exercise of options exercise
thousands price thousands price thousands price thousands price
outstanding at 1 april 2006 2146 £249 969 £nil 1500 £190 243 £159
exercised during the year 46 £135 481 £nil 10 £191 13 £152
granted during the year – – 1008 £nil – – – –
lapsed during the year 383 £271 98 £nil 723 £215 34 £227
outstanding at 31 march 2007 1717 £247 1398 £nil 767 £166 196 £147
exercisable at 31 march 2007 1479 £250 113 £nil 10 £300 196 £147
weighted average remaining contractual life years 53 73 14 48
weighted average share price at date of exercise £190 £199 £172 £213
share options outstanding at the year end have a range of exercise prices esos £133 – £362 ltip £nil saye £144 – £300 and 
acquired schemes £022 – £245
in the year ended 31 march 2007 and 31 march 2006 the group used the blackscholes model for measuring the fair value of the options granted
the following table sets out the information about how the fair value of the grant is calculated for each of the schemes
ltip saye
2007 2006 2007 2006
share price £1875 £209 – £1925
exercise price £nil £nil – £193
expected dividend yield 176 144 – 158
risk free interest rate 493 410 – 418
expected volatility 339 375 – 337
term years 36 36 – 325
the expected life used in the model has been adjusted based on management’s best estimate for the effects of nontransferability exercise
restrictions and behavioural considerations
expected volatility was determined by calculating the historical volatility of the group’s share price over the term commensurate with the expected
term immediately prior to the date of grant ie 36 years for the ltip award
for saye valuations the model reflects the fact that the options are exercisable only for a short period of six months following their vesting an
expected life of three years and three months is the mid point between the vesting and expiry dates 
the following options over shares have not been recognised in accordance with ifrs 2 as the options were granted on or before 7 november
2002 these options have not been subsequently modified and therefore do not need to be accounted for in accordance with ifrs 2
esos ltip saye acquired schemes
2007 2006 2007 2006 2007 2006 2007 2006
thousands thousands thousands thousands thousands thousands thousands thousands
options granted before
7 november 2002 1037 1231 48 584 – – 73 107 60 tribal group plc report and accounts 2007
notes to the financial statements continued
28 share capital
2007 2006
£’000 £’000
authorised
125000000 2006 125000000 ordinary shares of 5p each 6250 6250
2007 2007 2006 2006
number £’000 number £’000
allotted called up and fully paid
at beginning of year 80158913 4008 74964271 3748
issued as consideration for acquisitions 3982619 199 4970908 249
share option exercises 541738 27 223734 11
at end of year 84683270 4234 80158913 4008
the company has one class of ordinary shares which carry no right to fixed income
during the year 541738 ordinary 5p shares with an aggregate nominal value of £27000 were issued under share option schemes for a total
consideration of £1032000
during the year 3982619 ordinary 5p shares with an aggregate nominal value of £199000 were issued as consideration for acquisitions for a total
consideration of £6704000
29 share premium
2007 2006
£’000 £’000
at beginning of year 80771 80156
premium on share issues net of expenses 987 615
reclassification to merger reserve 7125 –
at end of year 74633 80771
the share premium and merger reserve have been partially reallocated so that £7125000 of share premium is reclassified as merger reserve in
accordance with the requirements of section 131 of the companies act 1985 there is no impact on profit or net assets as a result of the reallocation
30 other reserves 
share
own based
capital merger share payment hedging
reserve reserve reserve reserve reserve total
£’000 £’000 £’000 £’000 £’000 £’000
at 1 april 2005 9545 43387  597 30 53499
premium on share issues  8777    8777
net income recognised directly in equity in the year     36 36
own shares acquired   1668   1668
credit in relation to share based payment charge    449  449
transfers    157  157
at 1 april 2006 9545 52164 1668 889 6 60936
reallocation from share premium account  7125    7125
premium on share issues  6504    6504
transfer re goodwill impairment see note 31  7007    7007
net income recognised directly to equity in the year     835 835
own shares acquired   105   105
credit in relation to share based payment charge    10  10
transfers    475  475
at 31 march 2007 9545 58786 1773 424 841 67823
the capital reserve of £95m 2006 £95m resulted from a share exchange when tribal group plc was listed in february 2001
the merger reserve of £588m 2006 £522m relates to the premium arising on shares issued subject to the provisions of section 131 of the
companies act 1985 see also note 29 net of goodwill impairment of £70m 2006 £nil in respect of related acquisitions now deemed to be impaired
the own share reserve of £18m 2006 £17m represents the cost of 922499 shares 2006 853091 in tribal group plc held by the 
employee share ownership trust to satisfy certain options under the group’s share option schemes and shares to satisfy bonus arrangements of
certain employees
the share based payment reserve represents the liability arising from the application of ifrs 2
the hedging reserve represents movements relating to cash flow hedges net of deferred tax at 30
 business review  governance financial statements tribal group plc report and accounts 2007   61
31 retained earnings
2007 2006
£’000 £’000
at beginning of year 15173 5350
lossprofit for the year 9379 12544
dividends paid 2692 2362
net incomeexpense recognised directly in equity 306 416
transfer goodwill impairment to merger reserve see note 30 7007 –
share option exercises 949 100
transfers from share based payment reserve 475 157
at end of year 9941 15173
32 minority interest
2007 2006
£’000 £’000
at beginning of year 1185 1894
profit for the year 771 274
dividends 95 3
new minorities 4 97
purchase of minorities 262 1077
at end of year 1603 1185
33 shares to be issued
2007 2006
£’000 £’000
at beginning of year 6237 16517
fair value adjustments 377 2449
issued             6125 7831
at end of year 489 6237
of this amount £489000 2006 £6102000 is shown as a current liability and £nil 2006 £135000 as a noncurrent liability
34 capital and other commitments
there are capital commitments at 31 march 2007 of £2305000 2006 £6599000 the current year commitments relate to a new group finance
system and to mercury health the prior year commitments primarily relate to mercury health
the group as lessee
2007 2006
£’000 £’000
minimum lease payments under operating leases recognised as an expense in the year 4623 3874
at the balance sheet date the group had outstanding commitments for future minimum lease payments under noncancellable operating leases
which fall due as follows
2007 2006
£’000 £’000
within one year 991 744
in the second to fifth years inclusive 8273 5998
after five years 7555 11774
16819 18516
operating lease payments mainly represent rentals payable by the group for certain of its office properties leases are negotiated for an average
term of five years and rentals are fixed for an average of three years 62 tribal group plc report and accounts 2007
notes to the financial statements continued
35 retirement benefit schemes
the group operates a number of defined contribution and defined benefit pension schemes within individual subsidiaries and contributes to certain
employees’ personal pension plans the pension cost charge for the year ended 31 march 2007 was £4709000 2006 £3803000 of which
£4494000 2006 £3596000 related to defined contribution schemes and £215000 2006 £207000 to defined benefit schemes  
contributions amounting to £498000 2006 £372000 were payable to the funds at the year end and are included in current liabilities
defined benefit schemes
one of the group’s subsidiary undertakings tribal technology limited participates in the tfl pension fund formerly lrt pension fund which is a
defined benefit arrangement the last full actuarial valuation of this scheme was carried out by a qualified independent actuary as at 31 march 2006
the tribal technology section of the tfl pension fund had four active members at the year end employer contributions amounting to £61688
were paid in the year to 31 march 2007 these accounting figures have been calculated using the valuation as at 31 march 2006 updated on an
approximate basis to 31 march 2007
another of the group’s subsidiary undertakings sdp regeneration services 2 limited participates in the london pensions fund authority pension
fund ‘the lpfa pension fund’ which is a defined benefit arrangement the last full actuarial valuation of this scheme was carried out by a qualified
independent actuary as at 31 march 2004
the sdp regeneration services 2 limited section of the lpfa pension fund had 23 active members 19 deferred pensioners and 2 pensioners at
the year end employer contributions amounting to £258000 were paid in the year to 31 march 2007 
the assets of the funds have been taken at market value and the actuarial assumptions used to calculate scheme liabilities under ias 19 ‘employee
benefits’ are
2007 2006 2005
 per annum  per annum  per annum
inflation 325 310 275
salary increases 460 460 375
rate of discount 545 490 550
pension in payment increases 325 310 275
revaluation rate for deferred pensioners 325 310 275
the expected long term return on cash is equal to bank base rates at the balance sheet date the expected return on bonds is determined by
reference to uk long dated gilt and bond yields at the balance sheet date the expected return on equities and property have been determined by
setting an appropriate risk premium above giltbond yields having regard to market conditions at the balance sheet date
the fair value of the assets in the scheme the present value of the defined obligations in the scheme and the expected long term rate of return at
each balance sheet date were as follows
tfl pension fund
2007 2007 2006 2006
 £’000  £’000
equities 750 175 750 140
bonds 545 170 500 126
total fair value of scheme assets 345 266
present value of defined obligations 606 591
deficit in the scheme 261 325
related deferred tax asset 78 98
net pension liability 183 227
lpfa pension fund
2007 2007 2006 2006
 £’000  £’000
equities 770 2216 730 1919
target return funds 640 796 600 580
alternative assets 680 451 650 359
cash 490 96 460 187
total fair value of scheme assets 3559 3045
present value of defined obligations 4734 4697
deficit in the scheme 1175 1652
related deferred tax asset 353 496
net pension liability 822 1156
 business review  governance financial statements tribal group plc report and accounts 2007   63
35 retirement benefit schemes continued
reconciliation of opening and closing balances of the fair value of scheme assets
tfl lpfa tfl lpfa
2007 2007 2006 2006
£’000 £’000 £’000 £’000
fair value of scheme assets at 1 april 266 3045 965 2380
expected return on assets 19 215 45 171
actuarial lossesgains 2 30 7 342
contributions by employer 62 258 66 128
contributions by scheme participants 6 46 658
benefits paid – 35 – 34
transfers 6 – 809 –
fair value of scheme assets at 31 march 345 3559 266 3045
reconciliation of opening and closing balances of the present value of the defined benefit obligations
tfl lpfa tfl lpfa
2007 2007 2006 2006
£’000 £’000 £’000 £’000
defined benefit obligation at 1 april 591 4697 1142 3573
current service cost 34 151 28 151
interest cost 30 234 41 201
contributions by scheme participants 6 46 658
actuarial gainloss 49 359 183 748
benefits paid – 35 – 34
transfers 6 – 809 –
defined benefit obligation at 31 march 606 4734 591 4697
the contribution rate for 2007 was 20 of pensionable earnings plus £37000 per annum for the tfl pension fund and 181 for the lpfa pension
fund the contribution rate for the next 10 years has yet to be determined for the tfl pension fund and 181 for the lpfa pension fund
an additional annual past service contribution of £37000 is to be paid into the tfl pension fund and additional lump sum payments will be made
over the next three years into the lpfa pension fund to address the deficits in the schemes
analysis of amounts recognised in the consolidated income statement
tfl lpfa tfl lpfa
2007 2007 2006 2006
£’000 £’000 £’000 £’000
current service cost 34 151 28 153
recognised in arriving at operating profit 34 151 28 153
other finance costs
interest on pension scheme liabilities 30 234 41 201
expected return on pension scheme assets 19 215 45 171
net finance chargeincome 11 19 4 30
total charge to income statement 45 170 24 183
analysis of actuarial gainloss in the consolidated statement of recognised income and expense
tfl lpfa tfl lpfa
2007 2007 2006 2006
£’000 £’000 £’000 £’000
actual return less expected return on pension scheme assets 2 30 7 388
experience gains and losses arising on the scheme liabilities 3 1 8 1
changes in assumptions underlying the present value of scheme liabilities 46 358 175 791
total actuarial gainloss recognised in the 
consolidated statement of recognised income and expense 47 389 190 404
cumulative actuarial loss recognised in the consolidated statement of recognised income and expense since 1 april 2004 is £53000 
2006 £489000  64 tribal group plc report and accounts 2007
notes to the financial statements continued
35 retirement benefit schemes continued
changes in the deficit are analysed as follows
tfl lpfa total tfl lpfa total
2007 2007 2007 2006 2006 2006
£’000 £’000 £’000 £’000 £’000 £’000
at beginning of year 325 1652 1977 177 1193 1370
movement in the year
current employer service cost 34 151 185 28 153 181
employer contributions 62 258 320 66 128 194
actuarial gainloss 47 389 436 190 404 594
net finance incomecharge 11 19 30 4 30 26
at end of year 261 1175 1436 325 1652 1977
the three year history of experience adjustments is as follows
tfl lpfa tfl lpfa tfl lpfa
2007 2007 2006 2006 2005 2005
£’000 £’000 £’000 £’000 £’000 £’000
present value of defined benefit obligations 606 4734 591 4697 1142 3573
fair value of scheme assets 345 3559 266 3045 965 2380
deficit in the scheme 261 1175 325 1652 177 1193
experience adjustments arising on scheme assets
amount 2 30 7 388 42 –
percentage of the scheme assets 1 1 3 13 4 –
experience adjustments arising on scheme liabilities
amount 31 8 1 7 –
percentage of the present value of the scheme liabilities 0 0 1 0 1 –
no assets are invested in the group’s own financial instruments properties or other assets used by the group
36 notes to the cash flow statement
2007 2006
£’000 £’000
operating profit from continuing operations 192 23313
depreciation of property plant and equipment   5356 3600
amortisation of development expenditure 869 435
amortisation of intangible assets 320 316
impairment of goodwill 14429 –
net pension charge 105 13
gain on disposal of property plant and equipment 133 24
increase in fair value of investment property – 20
share based payments 10 449
increase in receivables 4724 685
increase in amounts recoverable on contracts 4041 2791
increase in payables 16118 4367
increasedecrease in inventories 168 436
increase in provisions 300 150
net cash from operating activities before tax 28423 29559
tax paid 4143 3365
net cash from operating activities 24280 26194
 business review  governance financial statements tribal group plc report and accounts 2007   65
37 post balance sheet events
the sale of the group’s healthcare delivery business mercury health to care uk was completed on 20 april 2007 the gross sale proceeds were
£77m which after deduction of debt and disposal costs equates to net cash proceeds of £52m
the continuing operations of the group will consist of the existing consulting services and education services business streams in order to show
the financial impact of the disposal on the group the results of mercury health and its subsidiaries for the years ended 31 march 2007 and 
31 march 2006 have been shown separately on the face of the income statement to give an indication of the balance sheet impact of the disposal
the table below shows pro forma figures applying the disposal to the 31 march 2007 balance sheet
unadjusted mercury disposal
total health adjustments pro forma
£’000 £’000 £’000 £’000
noncurrent assets
property plant and equipment 45056 37567  7489
other noncurrent assets 208639 12051  196588
253695 49618  204077
current assets
cash and collateralised cash 34432 14821  19611
other current assets 67343 9086  58257
101775 23907  77868
total assets 355470 73525  281945
current liabilities
other current liabilities 85180 40778 24460 68862
obligations under finance leases 98 92  6
bank loans and loan notes 5530 4075  1455
90808 44945 24460 70323
net current assets 10967 21038 24460 7545
noncurrent liabilities
bank loans 102307 27906 52000 22401
obligations under finance leases 327 325  2
other noncurrent liabilities 3794 2042  1752
106428 30273 52000 24155
total liabilities 197236 75218 27540 94478
net assets 158234 1693 27540 187467
adjustments reflect the intercompany loan of £245m between tribal and mercury that was extinguished on disposal together with the net cash
inflow of £52m net disposal proceeds no account has been taken of any trading between 1 april 2007 and 20 april 2007 on the basis of the
above pro forma net debt is £43m
the mercury health business stream has not been classified as discontinued or held for resale under ifrs 5 ‘noncurrent assets held for sale and
discontinued operations’ as shareholder approval for the transaction had not been received at the balance sheet date 66 tribal group plc report and accounts 2007
notes to the financial statements continued
38 contingent liabilities
the group has received notification of a number of potential litigation claims as set out below in all cases the claims are being investigated by our
lawyers and are being robustly contested as to both liability and quantum
n breach of contract arising out of the provision of services to a further education college
n the return of funding received for the provision of learning assessment and delivery for job seekers provided through a third party
n infringement of copyright relating to a software product and
n claim for negligence in the treatment of a development contract as part of a transfer of council housing stock 
a provision of £450000 2006 £150000 has been made for defending these claims where appropriate
these claims are expected to be resolved within one year and are therefore shown within current liabilities however it is possible that these claims
may take longer to resolve or the group may not be promptly notified that the claim has been dropped the claim may be settled at amounts
higher or lower than that provided depending on the outcome of commercial or legal arguments the provision made is management’s best
estimate of the group’s liability based on past experience commercial judgement and legal advice there is no expected reimbursement for any
economic outflow that may be required
there are two parent company guarantees pcgs given by the company relating to leases of mercury health properties that were not released at
the time of the sale of mercury health to care uk  these property leases have an aggregate annual commitment of approximately £04m over the
outstanding term of approximately 17 years  care uk and tribal group have a formal agreement whereby care uk shall use its best endeavours to
obtain full release of the pcgs on a timely basis  to some extent tribal has no control over the release process required of the landlord of each
property  it is expected that releases will be obtained during the course of the year
a crossguarantee exists between group companies in respect of bank facilities totalling £54883206 2006 £53337000
39 financial instruments
the group has entered into the following interest rate swaps
fair value at
31 march 2007
amount expiry date tribal pays tribal receives £’000
£25m 30092010 499 6 month libor 545
£25m 30092010 6 month libor less 75 bps 6 month libor 79
to 3092006 499 or 
libor less 10 bps thereafter 
at bank option
£20m 31032009 5 3 month libor 220
£125m 31032009 498 3 month libor 173
fair value of interest rate swaps see note 20 1017
 this financial instrument does not meet the criteria for a hedge instrument  on 31 march 2007 the bank exercised its option to convert this instrument into an annuity with tribal
receiving a net 10bps the other interest rate swaps are hedge accounted
 this financial instrument is a structured swap that decreases in line with the repayment profile of the loan
the fair value of the interest rate swaps is based on market values of equivalent instruments at the balance sheet date
financial risk
treasury management is led by group finance and is responsible for managing the group’s exposure to financial risk it operates within a defined
set of policies and procedures reviewed and approved by the board
interest rate risk
the group’s exposure to interest rate fluctuations on its interest bearing assets and liabilities is selectively managed using interest rate swaps
lenders of nonrecourse debt generally require that the debt is maintained on fixed rate terms or is swapped to fixed rate terms the group
therefore hedges its interest rate risk on nonrecourse debt and part of its recourse debt by using interest rate swaps to exchange floating interest
cash flows to fixed interest cash flows
credit risk
the group’s principal financial assets are cash and cash equivalents trade and other receivables and amounts recoverable on contracts
the group’s credit risk is relatively low because a high proportion of trade and other receivables have a sovereign or close to sovereign credit rating
 business review  governance financial statements tribal group plc report and accounts 2007   67
40 related party disclosures
on 26 april 2007 peter martin received an ad hoc bonus payment of £135700 this was regarded as a related party transaction in the context of
the group’s disposal of its investment in mercury health the sum was paid to peter martin as part of a transaction bonus arrangement established
by the remuneration committee which related any bonus paid to the sale price achieved for mercury health
save as is described in this note no material contract or arrangement has been entered into during the year nor subsisted at 31 march 2007 in
which a director had a material interest
remuneration of key management personnel
the remuneration of the directors who are the key management personnel of the group is set out below in aggregate for each of the categories
specified in ias 24 ‘related party disclosures’
2007 2006
£’000 £’000
shortterm employee benefits 1074 1254
share based payment 106 107
968 1361
the share based payment charge in the prior year primarily related to the ltip granted in 2006 it is now considered most unlikely that this award
will meet the performance criteria  as a result this charge has been reversed in the current year
41 principal subsidiary undertakings
the principal subsidiary undertakings at 31 march 2007 are shown below all subsidiary undertakings are registered in the united kingdom and
prepare accounts to 31 march each year
principal activity holding
avail consulting limited management consultancy it services and solutions 62
geronimo communications limited public relations consultancy 100
mercury health dtc1 limited healthcare delivery 100
nightingale architects limited architects          100
sportsvine limited development and marketing of distance learning products 51
tribal consulting limited management consultancy services to local government 100
tribal education limited education consultancy training and ofsted inspections 100
tribal holdings limited holding company 100
tribal property limited property consultants 100
tribal resourcing limited recruitment advertising in the public sector 99
tribal technology limited software support and it services 100
tribal tgc limited management consultancy learning and training 66
 all investments are held by tribal group plc other than those marked which are held by intermediate holding companies
the proportion of voting rights held is equivalent to the equity shareholdings
full details of related undertakings will be attached to the relevant company’s annual return to be filed with the registrar of companies 68 tribal group plc report and accounts 2007
five year summary
for the years ended 31 march 
ifrs uk gaap
2007 2006 2005 2004 2003
£’000 £’000 £’000 £’000 £’000
summarised consolidated group income statement
revenue 231851 214794 179857 152221 98364
profit before interest goodwill and intangibles 
amortisation and impairment share option costs 
and exceptional items 18251 24078 22291 23153 16685
goodwill impairment and intangibles amortisation 14749 316 6987 10690 6288
share option costs 10 449 134 1025 580
exceptional items 3300 – 1747 3040 702
interest 6330 5841 4466 3076 1260
tax 2470 4654 5401 6176 4737
minority interests 771 274 303 108 –
dividends 2692 2362 2150 2090 –
retained lossprofit 12071 10182 1103 3052 3118
earnings per share adjusted diluted 103p 172p 153p 205p 186p
dividend per ordinary share 347p 33p 30p 30p –
summarised consolidated group balance sheet
intangible assets 195885 209647 208726 201355 142623
other noncurrent assets 57810 50218 14151 6546 3635
current assets 101775 86590 93752 89043 65145
current liabilities 90808 84424 74834 67784 60737
noncurrent liabilities 106428 99958 80383 72015 36225
net assets 158234 162073 161412 157145 114441
the amounts disclosed for 2004 and earlier periods are stated on the basis of uk gaap at the time because it is not practicable to restate amounts
for periods prior to the date of transition to ifrs 
 business review  governance financial statements tribal group plc report and accounts 2007   69
uk gaap audit report – tribal group plc – company
independent auditors’ report to the members of tribal group plc
we have audited the parent company financial statements of tribal group plc for the year ended 31 march 2007 which comprise the balance sheet
and the related notes 1 to 10 these parent company financial statements have been prepared under the accounting policies set out therein
the corporate governance statement and the directors’ remuneration report are included in the group annual report of tribal group plc for the year
ended 31 march 2007 we have reported separately on the group financial statements of tribal group plc for the year ended 31 march 2007 and
on the information in the directors’ remuneration report that is described as having being audited
this report is made solely to the company’s members as a body in accordance with section 235 of the companies act 1985  our audit work has
been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditors’ report and for no
other purpose  to the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the company and the
company’s members as a body for our audit work for this report or for the opinions we have formed
respective responsibilities of directors and auditors
the directors’ responsibilities for preparing the annual report the directors’ remuneration report and the parent company financial statements in
accordance with applicable law and united kingdom accounting standards uk gaap are set out in the statement of directors’ responsibilities our
responsibility is to audit the parent company financial statements in accordance with relevant legal and regulatory requirements and international
standards on auditing uk and ireland
we report to you our opinion as to whether the parent company financial statements give a true and fair view and whether the parent company
financial statements have been properly prepared in accordance with the companies act 1985  we also report to you whether in our opinion the
directors’ report is consistent with the parent company financial statements  the information given in the directors’ report includes that specific
information presented in the business review that is cross referenced from the business review section of the directors’ report  in addition we report
to you if in our opinion the company has not kept proper accounting records if we have not received all the information and explanations we
require for our audit or if information specified by law regarding directors’ remuneration and other transactions is not disclosed
we read the other information contained in the annual report as described in the contents section and consider whether it is consistent with the
audited parent company financial statements we consider the implications for our report if we become aware of any apparent misstatements or
material inconsistencies with the parent company financial statements our responsibilities do not extend to any further information outside the
annual report
basis of audit opinion
we conducted our audit in accordance with international standards on auditing uk and ireland issued by the auditing practices board  an audit
includes examination on a test basis of evidence relevant to the amounts and disclosures in the parent company financial statements it also
includes an assessment of the significant estimates and judgements made by the directors in the preparation of the parent company financial
statements and of whether the accounting policies are appropriate to the company’s circumstances consistently applied and adequately disclosed
we planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the parent company financial statements are free from material misstatement whether caused
by fraud or other irregularity or error  in forming our opinion we also evaluated the overall adequacy of the presentation of information in the parent
company financial statements
opinion
in our opinion
n the parent company financial statements give a true and fair view in accordance with united kingdom generally accepted accounting practice
of the state of the company’s affairs as at 31 march 2007
n the parent company financial statements have been properly prepared in accordance with the companies act 1985 and
n the information given in the directors’ report is consistent with the parent company financial statements
deloitte  touche llp
chartered accountants and registered auditors
bristol united kingdom
4 july 2007
notes an audit does not provide assurance on the maintenance and integrity of the website including controls used to achieve this and in
particular on whether any changes may have occurred to the financial statements since first published these matters are the responsibility of the
directors but no control procedures can provide absolute assurance in this area
legislation in the united kingdom governing the preparation and dissemination of financial statements differs from legislation in other jurisdictions 70 tribal group plc report and accounts 2007
company balance sheet
at 31 march 2007
2007 2006
note £’000 £’000
fixed assets
investments 2 254016 269362
current assets
debtors amounts falling due within one year 3 29389 1746
debtors amounts falling due after more than one year 3 – 1220
cash at bank and in hand 1276 1984
30665 4950
creditors amounts falling due within one year 4 49486 44293
net current liabilities 18821 39343
total assets less current liabilities 235195 230019
creditors amounts falling due after more than one year 5 74402 74137
provisions for liabilities and charges 6 210 –
net assets 160583 155882
capital and reserves
called up share capital 7 4234 4008
share premium account 8 74633 80771
merger reserve 8 63181 52164
hedging reserve 8 592 103
own share reserve 8 1773 1668
share based payment reserve 8 424 889
profit and loss account 8 19292 19615
equity shareholders’ funds 160583 155882
notes 1 to 10 form part of these financial statements
these financial statements were approved by the board of directors on 4 july 2007 and were signed on its behalf by
peter j martin simon m lawton 
director director
 business review  governance financial statements tribal group plc report and accounts 2007   71
notes to the company balance sheet 
1 accounting policies
the following accounting policies have been applied consistently in dealing with items which are considered material in relation to the parent
company financial statements
basis of preparation
the financial information has been prepared on the historical cost basis modified to include the revaluation of certain fixed assets and in
accordance with applicable united kingdom law and accounting standards
in the company’s balance sheet the investment in tribal holdings limited is stated at the nominal value of the shares issued in consideration for that
company as required by sections 131 and 133 of the companies act 1985 no premium has been recorded on the shares issued as consideration
under section 2304 of the companies act 1985 the company is exempt from the requirement to present its own profit and loss account the loss
for the company amounted to £243000 2006 profit £6200000
the auditors’ remuneration for audit services to the company was £94000 2006 £81000
frs 20 ‘sharebased payment’ was adopted in the prior year the company has no employees and hence there is no charge to the company profit
and loss account the cost for options granted to the company’s subsidiaries’ employees represents additional capital contributions by the
company in its subsidiaries an additional investment in subsidiaries has been recorded with a corresponding increase in shareholders’ equity 
the additional capital contribution is based on the grant date fair value of the options issued allocated over the underlying grant’s vesting period
investments
investments held as fixed assets are shown at cost less provision for any impairment
taxation
current tax is provided at amounts expected to be paid or recovered using the tax rates and laws that have been enacted or substantially enacted
by the balance sheet date
in accordance with frs 19 ‘deferred tax’ deferred taxation is provided in full on timing differences which represent an asset or liability at the
balance sheet date at rates expected to apply when they crystallise based on current tax rates and law timing differences arise from the inclusion
of items of income and expenditure in taxation computations in periods different from those in which they are included in the financial statements
deferred tax is not provided on timing differences arising on unremitted earnings of subsidiaries associates and joint ventures where there is no
commitment to remit these earnings deferred tax assets and liabilities are not discounted
a net deferred tax asset is regarded as recoverable and therefore recognised only when on the basis of all available evidence it can be regarded as
more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted
cash flow statement
the results assets and liabilities of the company are included in the consolidated financial statements of tribal group plc consequently the
company has taken advantage of the exemption from preparing a cash flow statement under the terms of frs 1 revised ‘cash flow statements’
derivative financial instruments and hedging activities
changes in the fair value of derivative financial instruments that are designated and effective as hedges of future cash flows are recognised directly
in equity and the ineffective portion is recognised immediately in the income statement if the cash flow hedge of a firm commitment or forecasted
transaction results in the recognition of an asset or a liability then at the time the asset or liability is recognised the associated gains or losses on
the derivative that had previously been recognised in equity are included in the initial measurement of the asset or liability for hedges that do not
result in the recognition of an asset or a liability amounts deferred in equity are recognised in the income statement in the same period in which the
hedged item affects net profit or loss
directors’ remuneration
detailed disclosures of directors’ individual remuneration and share options are given in the audited part of the remuneration report on pages 36 to
37 and should be regarded as an integral part of this note the company has no employees 72 tribal group plc report and accounts 2007
notes to the financial statements continued
2 fixed asset investments
shares in
subsidiary long term
undertakings loans total
£’000 £’000 £’000
cost
at 1 april 2005 176221 80669 256890
additions 5559 – 5559
impairment 86514 – 86514
fair value adjustment 816 – 816
transfers to other group companies 9461 – 9461
capital contribution relating to share based payments 292 – 292
movement in long term loans – 103412 103412
at 1 april 2006 85281 184081 269362
additions 25380 – 25380
impairment 7667 – 7667
fair value adjustment 444 – 444
transfers to other group companies 15111 – 15111
capital contribution relating to share based payments 465 – 465
movement in long term loans – 17927 17927
at 31 march 2007 87862 166154 254016
the directors have considered the value of the above investments and are satisfied that the aggregate value of each investment is not less than its
carrying value
in the years ended 31 march 2007 and 2006 the group carried out a significant restructuring of its businesses to reduce the number of legal entities
that were trading  as part of this process a number of subsidiaries became dormant and had their reserves paid up by way of dividend to the
extent that the dividends reduced the net assets of these dormant companies below the carrying cost of the related investment an impairment of
the carrying value of those investments in the parent company accounts was recorded the total charge for the year ended 31 march 2007 is
£77m 2006 £865m there is no impact on the group results from this
additions in the year ended 31 march 2007 comprise £250m increase in share capital of tribal consulting limited and £04m in respect of the
acquisition of minority interests in tribal resourcing limited
a listing of principal subsidiaries is included in note 41 to the group financial statements
fair value adjustments relate to revision of the estimates of deferred consideration payable net of the appropriate discounting charges
3 debtors
2007 2006
£’000 £’000
amounts owed by group undertakings 27242 2966
fair value of interest rate swaps 623 –
corporation tax 1524 –
29389 2966
amounts owed by group companies includes £nil 2006 £1220000 falling due after more than one year  
4 creditors amounts falling due within one year
2007 2006
£’000 £’000
bank overdraft – 19944
loan notes 1355 2806
amounts owed to group undertakings 47642 14820
deferred consideration – 255
fair value of interest rate swaps – 366
shares to be issued see note 9 489 6102
49486 44293
 business review  governance financial statements tribal group plc report and accounts 2007   73
5 creditors amounts falling due after more than one year
2007 2006
£’000 £’000
bank loan 74402 74002
shares to be issued see note 9 – 135
74402 74137
maturity of bank and loan notes
2007 2006
£’000 £’000
bank and loan notes can be analysed as falling due
in one year or less or on demand 1355 2806
between two and five years 74402 74002
75757 76808
the bank loan which has primary security is at market rates of interest and is secured by way of a fixed and floating charge over the assets of the
company and its subsidiary undertakings the interest rates on the other loans are a mixture of fixed and floating and are also at market rates
repayment terms vary between one and five years  for further details see note 24 to the group financial statements
6 provision for liabilities and charges
2007
£’000
deferred taxation
items taken directly to equity 210
at 31 march 2007 210
provisions for deferred taxation consist of the following amounts 2007
£’000
derivative financial instruments 210
7 called up share capital
2007 2006
£’000 £’000
authorised
125000000 ordinary shares of 5p each 2006 125000000 6250 6250
2007 2007 2006 2006
number £’000 number £’000
allotted called up and fully paid
at beginning of year 80158913 4008 74964271 3748
issued as consideration for acquisitions 3982619 199 4970908 249
share option exercises 541738 27 223734 11
at end of year 84683270 4234 80158913 4008
allotment of shares
between 1 april 2006 and 31 march 2007 new ordinary shares of 5p each in the company were issued as follows
value valueproceeds
number of shares £’000 price per share £’000 purpose of issue
481208 24 £nil 949 ltip exercises
58904 3 £116 to £190 81 share option exercises
1626  £144 to £193 2 saye exercises
3674323 184 £158 to £195 6125 earn outs
308296 15 £185 to £199 579 purchase of minorities
4524357 226 7736 74 tribal group plc report and accounts 2007
notes to the financial statements continued
7 called up share capital continued
details of options in respect of shares outstanding at 31 march 2007 are as follows
employee share option schemes number outstanding price payable date from which exercisable
limited scheme 212184 £133 30062003
118860 £165 30062003
331044
plc scheme 35808 £250 30062003
62400 £283 30062003
31921 £286 30062004
177277 £310 30062004
398369 £246 30062005
138521 £229 30062005
250210 £326 30062006
53394 £362 30062006
58370 £345 30062007
179522 £196 30062007
1385792
ltip 48386 £nil 31032006
17265 £nil 31032007
47831 £nil 31032007
276130 £nil 31032009
1008527 £nil 31032010
1398139
acquired schemes 6668 £116 14012003
25693 £190 27032004
40866 £245 28022005
50122 £231 24012006
72636 £022 29032004
195985
savings related option scheme
saye 10208 £300 01022007
450148 £144 01032008
306654 £193 01032009
767010
total tribal group plc share option schemes 4077970
8 share premium and reserves
share
share based
premium merger hedging own share payment profit and
account reserve reserve reserve reserve loss account
£’000 £’000 £’000 £’000 £’000 £’000
at beginning of year 80771 52164 103 1668 889 19615
transfer 7125 7125 –– ––
loss for the year – – – – – 243
dividends – – – – – 2692
fair value movement on cash flow hedges – – 699 – – –
deferred tax – – 210 – – –
premium on share issues net of expenses 987 6504 – – – –
impairment of investments – 2612 – – – 2612
own share payments – – – 105 – –
movement in relation to share based payments – – – – 465 –
at end of year 74633 63181 592 1773 424 19292
the merger reserve of £632m 2006 £522m relates to the premium arising on shares issued subject to the provisions of section 131 of the
companies act 1985  in accordance with the provision £71m of share premium has been reclassified as merger reserve there is no impact on
profit or net assets as a result of the reallocation
the own share reserve of £18m 2006 £17m represents the cost of 922499 2006 853091 shares in tribal group plc held by the employee
share ownership trust to satisfy certain options under the group’s share option schemes
 business review  governance financial statements tribal group plc report and accounts 2007   75
9 shares to be issued
2007 2006
£’000 £’000
deferred shares to be issued in future periods
– within one year 489 6102
– after more than one year – 135
489 6237
shares to be issued in future periods represent the directors’ estimate of the fair value of the shares to be issued it represents additional
consideration that is payable to the original vendors of some of the businesses now subsidiaries acquired by the company the final value of the
shares to be issued is dependent upon the future financial performance of the subsidiaries the maximum value of shares to be issued under earn
outs payable is £11m 2006 £121m
10 post balance sheet events
the sale of the company’s investment in mercury health holdings limited to care uk was completed on 20 april 2007 the gross sale proceeds
were £77m which after the deduction of debt and costs equates to net cash proceeds of £52m see note 37 to group financial statements for
further details    business review  governance financial statements
76 tribal group plc report and accounts 2007
company information
tribal group plc
87–91 newman street
london w1t 3ey
t 0207 323 7110
priory court
poulton
cirencester gl7 5jb
t 01285 886 020
e infotribalgroupcouk
wwwtribalgroupcouk 
company secretary
richard h collins 
registered office
8791 newman street
london w1t 3ey
stockbroker and joint financial adviser
hoare govett limited
250 bishopsgate
london ec2m 4aa
joint financial adviser
n m rothschild  sons limited
new court
st swithin’s lane
london ec4p 4du
principal bankers
bank of scotland
po box 208
21 prince street
bristol bs99 7jg
auditors
deloitte  touche llp
3 rivergate
temple quay
bristol bs1 6gd
solicitors
osborne clarke
2 temple back east
temple quay
bristol bs1 6eg
registrars
capita registrars
the registry
bourne house
34 beckenham road
beckenham
kent br3 4tu
company’s registered number
4128850
place of incorporation
registered in england and wales design and production by accrue
our annual report has been produced using iso 14001 and fsc
certified environmental print technology vegetablebased inks and a
singlesite production facility requiring no transport between processes
further reduced the environmental footprint
when tribal was founded just over seven years
ago our vision was to build a business that
would help transform people’s lives and 
life chances
today our professional consultancy support
and delivery services are helping our clients
improve how essential public services are
planned and delivered
tribal people have a range of skills and
experience that spans the public voluntary
and private sectors but most importantly
they share with our clients a commitment to
making a positive difference to the services
which touch us all  
whether we are raising standards in schools
and colleges regenerating communities or
improving hospitals this vision remains at the
heart of everything we do services for life
contents
business review
highlights of the year  01
financial highlights  01
chairman’s statement  02
chief executive’s statement  04
business review  12
n strategy
n our markets
n our people
n risk management and key
performance indicators
n financial review
n corporate responsibility
governance
board of directors  28
directors’ report  29
corporate governance  31
remuneration report 34
statement of directors responsibilities  38
financial statements
independent auditors’ report to 
the members of tribal group plc  39
consolidated financial statements and notes 40
five year summary 68
uk gaap tribal group plc 
company financial statements  69
company information  76
key events
april 2006
merged
education and
technology
activities creating
integrated
education
services
business
july 2006
appointed as
design lead for
£130m caerphilly
hospital 
september 2006
launched
groundbreaking
elearning project
with mcdonald’s
november 2006
fashion retail
academy
designed by tribal
is opened by
prime minister 
business review governance  financial statements  wwwtribalgroupcouk
tribal group plc
8791 newman street
london w1t 3ey
t 020 7323 7110
e info

tribalgroupcouk
tribal group plc report and accounts 2007
services for life
tribal group plc report and accounts 2007


Summary:
 note the operating profit operating margin adjusted profit before tax and adjusted diluted earnings per share are stated before
goodwill impairment of £144m 2006 £nil intangible asset amortisation of £03m 2006 £03m share option costs of £nil
2006 £04m mercury health disposal costs of £33m 2006 £nil and in the case of adjusted profit before tax and adjusted
earnings per share financial instrument credit of £02m 2006 charge £08m  see page 40 consolidated income statement and
page 51 earnings per share note    
chairman’s statement
business units good progress has been made in
rationalising our support infrastructure and
achieving benefits from our procurement strategy
following the actions taken during the year a
detailed review of the carrying value of goodwill
was undertaken resulting in an impairment
charge of £144m
sale of mercury health
on 20 april 2007 we announced the completion
of the sale of mercury health to care uk this
disposal was a successful outcome for the
group enabling us to crystallise the value we had
created in the business and as a result
substantially reduce our borrowings the gross
sale proceeds were £77m which after deduction
of debt and costs provided net cash proceeds of
£52m the profit on disposal was £27m  
balance sheet
following the sale of mercury health the group’s
balance sheet has been substantially
strengthened with pro forma net debt at 31 march
2007 reducing to £43m on 14 june 2007 the
group signed a new five year bank facility of
£40m with hbos and hsbc together with a
working capital facility of £3m the reduced net
debt and bank facilities will result in substantial
savings in interest costs and bank fees
dividend
the board is pleased to announce that it is
recommending a final dividend of 242p per
share making a total of 347p per share for the
year 2006 33p an overall increase of five per
cent subject to approval at tribal’s 2007 annual
general meeting this dividend will be paid on 15
october 2007 to tribal’s shareholders on the
register at 21 september 2007  
management changes
as announced on 25 april 2007 henry pitman
tribal group’s founder stood down as chief
executive on 4 june 2007 he remains on the 
overview
the year ended 31 march 2007 was a
challenging trading period for the group during
which we saw modest revenue growth and a fall
in operating margins however we have
continued to strengthen our position as a leading
provider of consultancy support and delivery
services predominantly to the uk public sector
we have a major presence in our chosen
markets of education health central government
and communities
revenue for the year was up 8 per cent at
£2319m 2006 £2148m operating profit was
£183m 2006 £241m and the operating
margin was 79 per cent 2006 112 per cent
profit before tax was down 38 per cent at
£117m 2006 £190m and the loss after tax was
£86m 2006 profit of £128m the adjusted
diluted earnings per share were 103p 2006
172p aided by a low tax rate of 21 per cent
following agreement of prior year tax claims  
during the year the group generated operating
cash flow of £182m 2006 £191m
representing an operating profit to cash
conversion rate of 156 per cent 2006 123
per cent net debt at the year end was
£738m including the nonrecourse mercury
health project debt of £315m the group’s
gearing was 47 per cent and the interest
cover was 28 times at 31 march 2007
the group’s committed revenue excluding
mercury health was £131m 2006
£119m  
the group’s education services business
delivered growth in profits during the year
and is well placed to respond to future
opportunities however our consultancy
services businesses had a disappointing
year impacted by underperformance
in specific areas significant action
has been taken with a reduction in
the cost base and the restructuring
or closing down of peripheral 
02 tribal group plc report and accounts 2007
the year proved challenging for certain parts of the core business but we are
now in a much better position in april 2007 we successfully sold mercury
health strengthening the group’s balance sheet we have taken action to
reduce the level of operating costs and we have commenced a review of the
group’s future opportunities these steps and the encouraging start to the
new financial period give the board confidence about the future prospects of
the group
business review governance  financial statements  tribal group plc report and accounts 2007  03
board as a non executive director peter martin is
the new chief executive peter was previously an
executive director of the group having been
involved with tribal since 2000 he initially led the
group’s acquisition strategy until his appointment
in early 2004 as chief executive of mercury
health a position he retained until the recent sale
of the business
on behalf of the board and shareholders i would
like to thank henry for his considerable vision and
drive in creating what is today one of the uk’s
leading support services groups working with the
public sector
people
tribal’s continued success is a result of the broad
base of talented employees across the group the
group has a distinctive culture and a strong set of
values which attract high quality people from both
the public and the private sector we would like to
record our thanks to our 2000 staff through their
efforts tribal is now regarded as one of the most
respected businesses in its markets 
year end change
since the group’s formation trading has become
increasingly weighted to the second half of the
financial year in 2007 over 40 per cent of
operating profit was earned in the final quarter to
march this has made it difficult to predict reliably
the group’s year end outturn and to provide
investors with timely trading information the board
has therefore taken the decision to change the year
end to 31 december the company will be
reporting the six month performance to 30
september 2007 the nine month results to 31
december 2007 and the pro forma 12 month
performance to 31 december 2007
we have published today unaudited financial
information for both the nine and 12 months to 
31 december 2006 this information can be found
on the company’s website wwwtribalgroupcouk
prospects
in recent weeks the group has commenced a
number of initiatives as well as the change of
year end the group has moved its head office to
its main premises in central london in order to be
closer to many of its major clients and the
investor community the central group executive
has been strengthened with a number of key
appointments in addition tribal has created a
working group of its 30 most senior managers to
conduct a review over the summer months led
by peter martin this review will examine the
group’s core competencies its competitive
strengths and its growth opportunities 
the intention is to provide better clarity and
definition to the structure of the business and to
identify priority areas for growth tribal has leading
positions in its key markets of health education
central government and communities and it is
anticipated that this review will determine how we
best capitalise on the franchise we have built in
recent years the group intends to report back
on the findings of the review in the autumn
the successful sale of mercury health has
strengthened the balance sheet considerably and
provides for a renewed focus on the group’s core
business of providing consultancy support and
delivery services predominantly to the public
sector our clients are under constant pressure to
improve the range and quality of their services
whilst operating to stringent financial and
performance targets we therefore continue to
see a strong flow of opportunities to support
these clients as they look to transform services
and bring about organisational change
the board is confident about the group’s future
prospects
strone macpherson
chairman
4 july 2007
adjusted diluted earnings
per share 
103p
07 03 04 05 06
186p
205p
153p
172p
profit before tax
£m
117
07 03 04 05 06
154
201
178
190
revenue
£m
2319
07 03 04 05 06
984
1522
1799
2148