a provider of 
staffing services 
to the health 
social care and
education sectors
annual report and financial statements 2002
reed health group plc financial highlights 1
the reed health group plc – at a glance 2
chairman’s statement 4
chief executive’s review 6
financial review 12
board of directors and advisors 14
report of the directors 16
remuneration report 18
corporate governance 20
independent auditors’ report to the 
shareholders of reed health group plc 22
consolidated profit and loss account 23
consolidated balance sheet 24
company balance sheet 25
consolidated cash flow statement 26
notes to the financial statements 27
notice of annual general meeting 41
form of proxy
contents 1 reed health group plc
• strong growth in proﬁts operating margins and cashﬂow
• increase in gross proﬁt margin as a result of concentrating on
higher quality contracted business
• acquisition of the locum group on 28 may 2002 for £337m
• maiden ﬁnal dividend of 134p per share
• cashﬂow from operations up signiﬁcantly to £72m 2001 £19m 
financial highlights
2001 2002
turnover
£m
668
783
2001 2002
operating proﬁt
£m
44
52
2001 2002
diluted earnings
per share p
669
784
2001 2002
shareholders’ funds
£m
75
315
2002 2001 increase
turnover 783m 668m 173
gross proﬁt 152m 113m 346
operating proﬁt 52m 44m 182
proﬁt before taxation 52m 43m 209
diluted earnings per share 784p 669p 172
dividend – ﬁnal 134p ––
– total 200p ––
 stated before goodwill amortisation and exceptional costs 2 reed health group plc
the reed health group plc 
– at a glance
the company provides human resource solutions to the health and social care
sectors through recruitment consultancy and management services operating out of
over 20 branches across the uk and with substantial international contacts we are
able to respond to the differing needs of our clients
nursing
professions
allied to
medicine
doctors
social care
education 
professions allied to medicine a leading supplier in the market this
division covers over 12 professions allied to medicine the business operates
out of 5 branches and services nhs and private clients across england
scotland and wales the database consists of over 20000 candidates
nursing deals with qualiﬁed and unqualiﬁed nursing staff this division is
focused on supplying nhs clients in the south east of england and the
midlands most of this business is held under contract and it operates from
7 branches the database holds approximately 10000 nursing candidates
doctors supplies locum staff to hospitals operating from 5 branches 
and covering all of the uk this division has been part of the “national
contract” agreement since 1997 it holds over 6000 medically qualiﬁed
candidates on its database
social care amongst the most successful competitors in its ﬁeld this
division supplies qualiﬁed and unqualiﬁed social workers across the social
services operates from 11 branches throughout england and wales and
holds a database of 15000 candidates
education supplies temporary and permanent teaching staff into 
primary and secondary schools this division operates from 5 branches and
has a database of 3500 qualiﬁed teachers service extends to schools in 
the south east the midlands and the north of england 3 reed health group plc
reed health group specialists in human resource
solutions to health and social care and education
markets we believe in
dedication to quality professionalism and service
delivering value to our customers and shareholders
developing our staff
we aim to shape and lead our ﬁeld by being the
partner of ﬁrst choice
professions allied
to medicine
auckland new zealand
birmingham
dublin
forfar
london
manchester
melbourne australia
nursing
birmingham
london
doctors
birmingham
glasgow
london
leeds
west malling
social care
birmingham
bristol
cardiff
leeds
liverpool
london
manchester
newcastle
shefﬁeld
education
auckland new zealand
calgary canada
leeds
london
melbourne australia
ware
new zealand canada australia 4 reed health group plc
i am delighted to report on the results of reed
health group plc for the year to 30 june 2002
during this period the group demerged from 
reed executive plc in july last year acquired 
the locum group limited “the locum group”
in may this year and has established itself as a
leading professional and specialist hr support
services company delivering services to health
social services and education
financial results 
in the year ended 30 june 2002 reed health group’s
turnover increased by 173 to £783m 
2001 £668m gross proﬁt increased by 346 to
£152m 2001 £113m and operating proﬁt before
taxation goodwill amortisation and exceptional item
increased 182 to £52m 2001 £44m diluted
earnings per share adjusted for goodwill amortisation
and exceptional item were up 172 to 784p 
2001 669p shareholders’ funds at 30 june 2002
have increased to £315m from £75m the prior year
net cash inﬂow from operating activities for the year
to 30 june 2002 was £72m 2001 £19m as at 
30 june 2002 the group had net debt of £69m
the directors are recommending a maiden ﬁnal
dividend of 134p per share bringing the total
dividend per share for the ﬁnancial year to 20p 
the group
the company completed the acquisition of the
locum group on 28 may 2002
in the health market the group is now one of the
leading providers of professional stafﬁng services
and has the capability to offer doctors nurses and
other professionally qualiﬁed health staff such as
physiotherapists optometrists pharmacists and
radiographers in the social care market the
locum group has strengthened reed health
group’s presence in the south east of england
the division is ﬁrmly established as a leading
provider of services to both the local authority and
independent sectors the acquisition has enabled
the group to enter the education market a sector in
chairman’s statement 5 reed health group plc
which we plan to continue to grow the board
expects the locum group to make a valuable
contribution to reed health group’s proﬁts in the
coming year
the integration of the locum group is progressing
to plan opportunities are being pursued to share
candidate bases across the enlarged group and to
increase the number of candidates sourced from
overseas locations particularly australia and canada
additionally we are evaluating plans to fully integrate
its support functions and enhance its management
information systems to provide a ﬁrm base from
which other acquisitions can be supported 
our people
on behalf of the board i would like to thank all our
employees for their hard work and dedication in this
our ﬁrst year as a public company 
summary and outlook
our markets remain full of opportunities the
government’s continued commitment to improving
the public services of health social care and
education together with the ever increasing demand
for ﬂexible professional and specialist stafﬁng
resources make for a thriving and competitive market
the board believes the group is well placed to take
advantage of the many prospects and opportunities
that present themselves in our current market 
by actively developing value added integrated
services for our clients across each of our three
markets the group will grow organically whilst
looking at complementary acquisition opportunities
the board believes the group is well placed to
maintain the momentum established over the 
past 12 months and views the year ahead with
conﬁdence
lord tom sawyer
chairman
9 september 2002
“the board believes the group is well placed to take
advantage of the many prospects and opportunities that
present themselves in our current market” 6 reed health group plc
chief executive’s review
this has been a year of signiﬁcant development for
the company in july 2001 we demerged from
reed executive plc and in may this year we made
our ﬁrst major acquisition the locum group 
the principal reason for the demerger was to 
allow the company to concentrate on the
healthcare and public sector stafﬁng markets and
to make suitable acquisitions both these aspects
are essential for the company to build on its aim of
becoming the partner of choice for the delivery of
professional and specialist human resource 
“hr” solutions in the areas of health social care
and education
group strategy
our strategy is to become the leading provider of
professional and specialist hr recruitment and
retention solutions to the public and private sectors
in the uk focusing on the health social care and
education markets
there are signiﬁcant opportunities in each of these
markets based on services that add value are
quality driven and have a strong customer
satisfaction focus in order to take advantage of
these opportunities we will continue to build on our
professional capabilities and understanding of
these markets by both increasing our specialisation
and cross selling our services across our client
base the acquisition of the locum group has
opened up a number of exciting synergies
particularly in the area of health
it is our intention to create integrated services
across our sectors to provide a complete solutions
package for the recruitment and retention of
specialist staff by our clients
sector review
health 
following the acquisition of the locum group we
are now deploying doctors and health professionals
on a nationwide basis into hospitals clinics and gp
surgeries combined with our nursing business
which chieﬂy concentrates on the market in the
south east of england we now cover the majority
of medically qualiﬁed professional disciplines 
over the past 12 months we have widened our
professional health stafﬁng portfolio further by
starting up specialist services such as optometry
and pharmacy these niche developments and the
ongoing specialisation are in line with our overall
strategy of developing value added integrated
services this strategy which has been
strengthened by the acquisition of the locum
group will put us in an increasingly strong position
in the markets in which we operate
professions allied to medicine 
turnover for the year to 30 june 2002 increased by
560 to £167m from £107m in 2001 excluding
the £24m of turnover relating to the locum group
growth was 333 within the existing reed health
group health professionals division  7 reed health group plc
“our strategy is to become the leading provider of
professional and specialist hr recruitment and
retention solutions to the public and private sectors 
in the uk focusing on the the health social care 
and education markets”
working in partnership
using the expertise of reed
nursing ashford and st peters
nhs trust will generate
savings of up to £600000
over the next two years to be
reinvested in nhs services
the initiative which assessed
the use of the trust’s nurse
bank and looked at how it
could be centralised will
beneﬁt staff patients and the
trust illustrating how private
sector experience knowledge
and skills can be used for
public beneﬁt 8 reed health group plc
this growth has been mainly in the service sectors
of therapeutic professions and we have continued
our successful strategy of adding services and
professions to our portfolio t ogether with the
locum group’s relevant divisions this business
now operates from 5 branches providing
nationwide coverage and caters for over a dozen
specialist professions such as optometrists and
chiropodists
nursing 
turnover for the year to 30 june 2002 fell marginally
by 17 from £299m to £293m reﬂecting the agreed
termination of the forest healthcare nhs trust
contract in february 2002 which had previously
generated turnover of approximately £6m per annum
we have successfully tendered for new business
in february 2002 we were awarded a service level
agreement with surrey and sussex healthcare nhs
trust and in july we were appointed sole supplier
to the newly formed central and northwest london
mental health nhs trust we have also extended
existing contracts with hammersmith hospitals
nhs trust to 2007 and parkside and newham to
october 2002 and march 2003 respectively 
work held under contract now accounts for
approximately 70 of turnover in this division down
from approximately 80 last year this change to a
higher proportion of spot placements has enabled
us to improve gross margins so the impact on gross
proﬁt of losing a high volume low margin contract
within the nursing division is minimised at the same
time we have restructured the division amalgamating
ten branches into seven to provide fewer larger
branches thus lowering the division’s cost base
having been awarded supplier status under the
ﬁrst phase of the london agency project “lap” 
in september 2001 the second phase “lap 2” is
likely to come into effect in the spring of 2003 
chief executive’s review continued 9 reed health group plc
lap 2 will regulate the pay and charge rates of
commercial agencies in respect of all nursing staff
supplied to the majority of london nhs trusts 
with nhs professionals the nhs is trying to solve
its own stafﬁng needs however it is difﬁcult to see
how one kind of provision will remedy the shortfall of
qualiﬁed and skilled workforce that currently exists
and seems only set to grow worse a degree of
impact has been felt by the company due to the
confusion over nhs professionals however there
continue to be opportunities for quality nursing
agencies particularly in london and the south east
doctors 
the doctors division which was acquired as part of
the locum group generated turnover of £13m in
the period of ownership the locum group has built
a strong reputation for the supply of medical locum
staff to nhs trusts in england wales and scotland
and operates out of 5 branches from a database of
over 6000 candidates  
since the formation of the “national contract” for
the supply of locum doctors in 1997 the locum
group has been one of only nine agencies
accredited on this contract this “national contract”
is presently being renegotiated for a further ﬁve
year extension and the result of this is expected in
october over 150 nhs trusts are currently part of
the “national contract” and we service over half of
these trusts and have preferred supplier status
with over 20 in particular we were pleased to
renew a contract with guy’s and st thomas’ private
patients unit for residential medical ofﬁcers 
market statistics
• government committed to increase signiﬁcantly the number of
consultants gp’s nurses midwives health visitors therapists and
scientists by 2008
• the wanless report indicates the healthcare workforce may have
to increase by 300000 over the next two years
• in health government spending plan will increase to £105bn by
20078
• social services and education expected to receive equally strong
commitments
• ppp expected to play an increasing role in the health industry 10 reed health group plc
chief executive’s review continued
which has been extended to may 2003 with yearly
extensions thereafter
consultancy 
we have had the opportunity to work on a number
of consultancy projects with nhs trust clients 
this has opened up new opportunities for working
in partnership with our clients and to achieve better
services for the end user we believe that the
opportunity to undertake consultancy assignments
conﬁrms our standing in the market as being a
quality provider of services
social care
the division supplies qualiﬁed and unqualiﬁed
social workers on a temporary and contract basis
mainly to local authorities and social services
across specialist services ranging from child care
to elderly care
turnover for the year to 30 june 2002 increased
from £262m to £303m an increase of 155
excluding turnover of £04m relating to the locum
group acquisition growth was 140 this was a
pleasing result particularly in the light of a 
rigorous internal restructuring programme which
took place during the second half of the year 
this has led to improved business processes
margins and cost control poorly performing
projects and supply agreements have been
terminated or renegotiated and we have put in
place the necessary operational infrastructure to
enable improved performance
a number of supply contracts were renewed in 
the year namely greenwich city council 
islington social services waltham forest social
services and birmingham bury and leeds 
social services  
the integration of the locum group’s social care
business into the reed health group’s social care
business is progressing well and should be
completed before the end of the calendar year 
in particular this integration will strengthen our
market standing in the london region we have
increased the number of our branches there from
two to three and more branch openings are
scheduled over the coming months
education
this is a new market for reed health group the
business was acquired through the locum group
acquisition and in the period to 30 june 2002
generated sales of £07m this is a market that ﬁts
the overall strategy of the group there are growing
synergies particularly between the markets of
social care and education which we are now able
to satisfy this will bring us further cross selling
opportunities across the markets this division
operates from ﬁve branches and concentrates on
the supply of temporary and permanent teachers to
primary and secondary schools overseas supply
of candidates has become successful in this
division and is expected to continue to generate
growth in this business
international
our ability to grow the business relies on our ability to
recruit and retain suitably qualiﬁed and experienced
professional staff our recruitment ofﬁces in
australia and new zealand which were acquired
as part of the locum group play an important part
in attracting suitable staff to work in the each of the
health social care and education sectors 
we are currently establishing a canadian ofﬁce to
formalise our recruitment presence there initially 11 reed health group plc
this ofﬁce will be used to supply canadian teachers
to the uk market but over time it will be expanded to
cater for the health and social care markets we
expect the ofﬁce to be operational in october 2002 
criminal records bureau
whilst the well publicised difﬁculties at the criminal
records bureau have not affected us to date the
group operates in areas where many of our
candidates need to be vetted if the problems at
the criminal records bureau continue this may
have a slight impact on our business however at
this stage the board foresees no immediate
impact on the group
summary and outlook
our ﬁrst acquisition has materially strengthened our
aim of becoming a preferred and leading supplier
of professional and specialist personnel in the
health social care and education sectors
as we continue to improve our internal structures to
increase effectiveness and efﬁciency we will continue
to improve our offers of value adding quality services
to customers to build on our position in the forefront
of recruitment and retention in our chosen markets
we will drive the business based on our organic
growth skills combined with making ﬁtting and suitable
acquisitions the year ahead is full of opportunities
to strengthen our position and move towards
realising our aim
christa echtle
chief executive
9 september 2002 12 reed health group plc
financial review
general
the demerger of reed health group plc from 
reed executive plc on 4 july 2001 has been
accounted for under the principles of merger
accounting as set out in frs 6 “acquisitions and
mergers” this means that proforma ﬁgures have
been presented for the group as if the trading of
the demerged businesses had been conducted by
reed health group plc for all periods shown
turnover
t urnover for the group increased by 173 to £783m
from £668m growth in turnover excluding £48m
attributable to the locum group since its acquisition
on 28 may 2002 was 101
gross proﬁt 
gross proﬁt increased by 346 to £152m 
2001 £113m and gross margin as a percentage
of sales increased to 194 from 169 excluding
the acquisition of the locum group the increase
in gross proﬁt was 256 and gross margin as a
percentage of sales was 193
operating proﬁt and margin
administrative expenses before goodwill amortisation
and exceptional costs increased by 45 to £100m
2001 £69m of the £31m increase £07m is
attributable to the acquisition of the locum group
the remainder represents a necessary build in the
company’s infrastructure following its demerger
from reed executive plc
the group’s operating proﬁt before goodwill
amortisation and exceptional item increased by
182 to £5179000 2001 £4383000 representing
a net operating margin of 66 excluding the
acquisition of the locum group operating proﬁt
before goodwill amortisation and exceptional item
was £4849000 106 ahead of last year
exceptional charge
the exceptional item of £156000 arises from costs
incurred relating to the demerger of the group 
from reed executive plc no tax relief has been
taken for these costs
pretax proﬁt
proﬁt before tax goodwill amortisation and exceptional
item amounted to £5227000 up 205 on last year’s
£4338000 proﬁt attributable to the acquisition of 
the locum group from 28 may 2002 was £330000
before goodwill amortisation of £132000 and
interest on additional borrowings of £44000
taxation
the tax charge for the year was £1588000 giving
an effective rate of 322 the effective tax rate on
proﬁts before goodwill amortisation and exceptional
item was 304
earnings per share
adjusted earnings per share before exceptional
item and goodwill amortisation were 789p 
2001 669p an increase of 179 this reﬂects
the increase in pretax proﬁts coupled with a
modest amount of interest income adjusted
earnings per share on a fully diluted basis but 
before exceptional item and goodwill amortisation
were 784p 2001 669p an increase of 172
dividend
the board has proposed a ﬁnal dividend of 134p
per share which together with the interim dividend
of 066p brings the total dividend for the year to
20p this represents a yield of 14 on the 30
june 2002 share price of 1465p and a dividend
cover of 31 times the dividend is payable on 
2 december 2002 to shareholders on the register
as at 1 november 2002 cashﬂow
cashﬂow from operations amounted to £72m
2001 £19m this increase was achieved through
a combination of increased proﬁtability and better
working capital management the increase in
creditors payable is distorted by certain onetime
amounts totalling £08m due to reed executive plc
which were settled subsequent to the year end
capital expenditure for the year amounted to
£476000 and consisted of investment in computer
systems hardware and software to support the
business dividends interest and corporation tax
amounted to a net payment of £1173000
acquisitions
on 28 may 2002 the company purchased the locum
group on a debt free basis for £337m net of
expenses of £08m  
t o satisfy the consideration payable the company
raised £218m net of share issue expenses of
£06m from the issue of 149m new ordinary shares
drew down new bank facilities of £80m and utilised
£47m of existing cash balances
equity shareholders’ funds
equity shareholders’ funds increased from £75m 
in 2001 to £315m in 2002 reﬂecting net proceeds
from the share issue in the year of £218m and
retained earnings of £22m after dividends of £11m
treasury 
net debt at the end of the year was £6861000
giving a modest gearing of 218 
derivatives and other ﬁnancial instruments
the group’s ﬁnancial instruments comprise
borrowings cash and various items such as trade
debtors and creditors that arise directly from its
operations the main purpose of these instruments
is to raise ﬁnance for operations the group has not
entered into derivatives transactions nor does it
trade in ﬁnancial instruments as a matter of policy
the main risks arising from the group’s ﬁnancial
instruments are interest rate risk and liquidity risk
the board’s policy on each is described below and
has not changed since incorporation
operations are ﬁnanced through a mixture of
retained proﬁts and bank borrowings the board’s
policy is to use variable rate borrowings t o ensure
continuity of debt funding the group’s policy is 
to keep part of the debt due in more than one 
year’s time 
the group is geared to enable the possibility of
further ﬁnancing through debt interest rates remain
unchanged and possible short term variations in the
rates should not signiﬁcantly impact the cost of debt
to the group
the group’s exposure to foreign currency risk remains
low due to the relative size of the overseas operations
desmond doyle
group finance director
9 september 2002
13 reed health group plc
diluted adjusted earnings per share up 172 to 784p
per share from 669p per share
stated before goodwill amortisation and exceptional costs
financial summary
‘01 ‘02 ‘01 ‘02 ‘01 ‘02 ‘01 ‘02 ‘01 ‘02
turnover
£m
668
783
gross
proﬁt
£m
113
152
operating
proﬁt
£m
44
52
diluted
earnings per
share p
669
784
shareholders’
funds
£m
75
315 14 reed health group plc
board of directors
directors and advisors
lord tom sawyer christa echtle
desmond doyle alan dexter
daphne statham james reed
directors
lord t om sawyer – nonexecutive chairman
•

christa echtle – chief executive
desmond doyle – group financial director
alan dexter – nonexecutive director
•

†
james reed – nonexecutive director
•

daphne statham – nonexecutive director
•

•
member of the audit committee
 member of the remuneration committee
† senior independent nonexecutive director
secretary
peter chapman
registered ofﬁce
79 st georges square
london sw1v 2hx
registered number
04215546
stockbroker
robert w baird ltd
mint house
77 mansell street
london e1 8af 15 reed health group plc
lord tom sawyer 59
nonexecutive chairman
t om was appointed to the board in july 2001
previously he was the general secretary of the
labour party from 1994 to 1999 following on from
his post as deputy general secretary of unison
t om is also currently a nonexecutive director of the
britannia building society and investors in people uk
christa echtle ma mba 44
chief executive
christa joined reed personnel services in the
social care division becoming divisional manager
in 1991 in 1998 she became operations director
for the healthcare division and in 2001 led the
demerger of the group from reed executive plc
desmond doyle ba aca 37
group finance director
desmond was appointed to the board on joining
the company in november 2001 previously he
was european cfo for nyse listed apw prior to
which he held positions as a divisional finance
director and group financial controller with vero
group plc desmond qualiﬁed as a chartered
accountant with coopers  lybrand in 1990
alan dexter fca 60
nonexecutive director
alan was appointed to the board in july 2001 
he was previously chief executive then chairman
of community hospitals group plc and a past
director and chairman of the independent
healthcare association he is currently a non
executive director of capio healthcare uk limited
formerly community hospitals group plc non
executive chairman of medeval group limited and
a director of trinity college of music london
james reed ma mba 39
nonexecutive director
james was appointed to the board in july 2001
he is currently the chief executive of reed
executive plc he had previously worked as group
chief operating ofﬁcer and operations director of
reed employment 
daphne statham cbe ma 63
nonexecutive director
daphne was appointed to the board in april 2002
daphne is currently the director of the national
institute for social work and a past president of the
national association of councils of voluntary service
auditors
rsm robson rhodes
186 city road
london ec1v 2nu
solicitors
slaughter and may
one bunhill row
london ec1y 8yy
registrars
capita irg plc
bourne house
34 beckenham road
beckenham
kent br3 4tu
bankers
barclays bank plc
54 lombard street
london ec3p 3ah 16 reed health group plc
the directors present their report and the audited ﬁnancial
statements for the period from incorporation on 11 may 2001
to 30 june 2002 as stated in note 1b to the ﬁnancial
statements the group has applied merger accounting for the
demerger from reed executive plc
principal activities
the principal activities of the group are the provision of
stafﬁng services to the health social care and education
sectors the chairman’s statement chief executive’s and
financial reviews on pages 4 to 13 provide a report on the
group’s activities trading results and future developments 
results and dividends
the proﬁt attributable to shareholders was £3351000 
2001 £2994000 an interim dividend of 066p per share
was paid to shareholders on 31 march 2002 the directors now
recommend a ﬁnal dividend of 134p per share to be paid to
shareholders on 2 december 2002 following payment of all
dividends for the year totalling 20p per share £2257000 will
be transferred to reserves 
directors
the directors who served during the year are as follows
christa echtle and malcolm paget were each appointed 
as directors on 8 june 2001 malcolm paget resigned on 
20 november 2001 
lord t om sawyer alan dexter and james reed were each
appointed to the board on 5 july 2001 desmond doyle was
appointed to the board on 26 november 2001 and daphne
statham was appointed to the board on 1 april 2002 
having been appointed as directors during this ﬁrst period all
directors are required to retire by rotation and if eligible offer
themselves for reelection at the annual general meeting
brief biographical details of the present directors are set out
on pages 14 and 15
directors’ interests
all directors’ interests including details of shareholdings are
set out in the remuneration committee report to the board
on pages 18 and 19
substantial shareholdings
as at 6 september 2002 the company has been notiﬁed of the
following material interests excluding directors’ interests
which are shown on page 19 of 3 or more of its ordinary
share capital 
notes
i a reed has a nonbeneﬁcial interest which includes 2941000 ordinary shares
held as cotrustee of the reed charity and 5000000 “b” ordinary shares held as
cotrustee of a family trust
ii r reed’s interest includes an interest in 1164621 ordinary shares as a result of his
life interest in a family trust and 34875 ordinary shares representing his own
holding r reed also has a nonbeneﬁcial interest in 2941000 ordinary shares
which he holds as cotrustee of the reed charity and in 7344557 “b” ordinary
shares held as cotrustee for family trusts except to the extent that he has a life
interest in those trusts
iii a chapman’s interest includes an interest in 1164621 ordinary shares as a
result of her life interest in a family trust and 25000 ordinary shares representing
her own holding a chapman’s interest includes an interest in 5000000 “b”
ordinary shares by virtue of related interest in a family trust and an interest in
4024388 “b” ordinary shares representing her life interest in a family trust 
she also has a nonbeneﬁcial interest in 2941000 ordinary shares held as a co
trustee of the reed charity and 7344558 “b” ordinary shares held as cotrustee
of family trusts except to the extent that she has a lifeinterest in those trusts
iv the interests of james capel nominees ltd include 4024388 “b” ordinary shares
beneﬁcially owned by a chapman and 4024387 “b” ordinary shares beneﬁcially
owned by r reed the ordinary shares registered in the name of james capel
nominees ltd are split as to 199000 owned by the reed charity and 108290
owned by independent third parties
v the interests of farrer trust corporation ltd of 4603500 “b” ordinary shares
comprise 2274258 1164621 and 1164621 ordinary shares beneﬁcially owned
by j reed a chapman and r reed respectively the “b” ordinary shares
registered in the name of farrer trust corporation ltd are beneﬁcially owned 
by j reed
vi jl hill’s of farrer  co interest is held as cotrustee of a reed family trust
vii the interest of schroders investment management limited includes 250000
ordinary shares held by schroders investment management north america inc
an afﬁliated company of schroders investment management limited
viii the interest of eagle trustees ltd represents the holding of the reed executive 
employee beneﬁt trust
annual general meeting – special business
the annual general meeting of the company will take place 
at mint house 77 mansell street london e1 8af on 
26 november 2002 at 1230 the notice of annual general
meeting may be found on pages 41 and 42 
donations
no political or charitable donations were made during the year
2001 £nil 
report of the directors
ordinary “b” ordinary total
shares percentage shares percentage percentage
a reed 750000 20 5885055 265 111
reed charity 2941000 79 nil nil 49
r reed 1199496 32 4026387 181 88
a chapman 1189621 32 9024388 406 171
james capel nominees 307290 08 8048775 362 140
farrer trust corporation 4603500 123 3320170 149 133
jl hill nil nil 5000000 225 84
eagle trustees 1964577 53 nil nil 33
schroders investment
management 7275283 195 nil nil 122 17 reed health group plc
employees
the group attaches considerable importance to ensuring all its
employees are provided with information concerning them as
employees particularly the economic and ﬁnancial factors
affecting the group’s performance and the market in which the
group operates internal newsletters are issued on a monthly
basis and consultation between management and staff is
encouraged through monthly meetings of the staff link group
employees are consulted on issues directly affecting them
wherever possible 
equal opportunities
the group is committed to an active equal opportunities
policy from recruitment and selection through training and
development appraisal and promotion to retirement 
it is the group’s policy to promote an environment free from
discrimination harassment and victimisation where everyone
will receive equal treatment regardless of gender colour
ethnic or national origin disability age marital status sexual
orientation or religion all decisions relating to employment
practices will be objective free from bias and based solely
upon work criteria and individual merit
the group is responsive to the needs of its employees
customers and the community at large and is an organisation
that uses everyone’s talents and abilities to the full
payment of creditors
whilst the company does not follow any external code or
standard on payment practice the policy for the year to 30 june
2002 for all suppliers is to ﬁx terms of payment when agreeing
the terms of each business transaction to ensure that the
supplier is aware of those terms and to abide by the agreed
terms of payment the number of days trade creditors was 42
2001 nil for the company and for the group 37 2001 37
statement of directors’ responsibilities for the 
annual report
company law in the united kingdom requires the directors to
prepare ﬁnancial statements for each ﬁnancial year which give
a true and fair view of the state of affairs of the company and
the group and of the proﬁt or loss of the group for that period
in preparing these ﬁnancial statements the directors have
• selected suitable accounting policies and applied 
them consistently
• made judgements and estimates that are reasonable and
prudent
• followed applicable united kingdom accounting
standards and
• prepared the ﬁnancial statements on the going 
concern basis
the directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time
the ﬁnancial position of the company and enable them to
ensure that the ﬁnancial statements comply with the companies
act 1985 they are also responsible for safeguarding the assets
of the company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities
the directors are responsible for ensuring that the directors’
report and other information included in the annual report is
prepared in accordance with company law in the united
kingdom they are also responsible for ensuring that the
annual report includes information required by the listing
rules of the financial services authority
the annual report is available on the company’s web site
the maintenance and integrity of the web site is the responsibility
of the directors the work carried out by the auditors does not
involve consideration of these matters and accordingly the
auditors accept no responsibility for any changes that may
have occurred to the information contained in the ﬁnancial
statements since they were initially presented on the web site
legislation in the united kingdom governing the preparation
and dissemination of the ﬁnancial statements and other
information included in annual reports may differ from
legislation in other jurisdictions
auditors
the auditors rsm robson rhodes who were appointed during
the period are willing to continue in ofﬁce and a resolution to
reappoint them will be proposed at the annual general meeting
approval
the report of the directors was approved by the board and
signed on its behalf by
peter chapman
secretary
9 september 2002 18 reed health group plc
the board is pleased to present its remuneration report for the
year ended 30 june 2002
remuneration policy
the board has delegated its powers to determine the company’s
remuneration policy for senior executives to the remuneration
committee the members of which during the year were lord
sawyer alan dexter and james reed subsequent to the year
end daphne statham was appointed to the committee
in determining its remuneration policy the committee has
paid regard to the principles and provisions of good corporate
governance contained in the combined code published by
the committee on corporate governance the remuneration
committee pays attention to the ﬁndings of independent
consultants to assist in determining the remuneration
packages of executive directors its aim is to provide a
remuneration package sufﬁcient to attract motivate and retain
directors and to reward them for good performance
in the year to 30 june 2002 the executive directors’
remuneration consisted of three parts
• basic salary and beneﬁts
basic salary for the individual is determined by their level
of experience and the rate of basic pay for similar roles in
comparable companies the company also provides a
car allowance pension contribution and private and
permanent health insurance
• cash bonus
an annual bonus which is nonpensionable is payable
based on individual performance criteria speciﬁc to the
executive’s role and the overall ﬁnancial performance of the
group at the proﬁt before tax and earnings per share levels
in successful years bonuses can form a major part of the
remuneration package of executive directors
• share options
the committee believes that share ownership by
executive directors encourages above average
performance since the interests of shareholders and
management are aligned accordingly it is the
committee’s policy to grant share options to executive
directors provided adequate performance has been
demonstrated options are not exercisable unless the
company meets the performance related criteria
determined by the committee from time to time
the fees of nonexecutive directors are determined by the full
board the nonexecutive directors are not eligible for any
additional employment related beneﬁts
share option schemes
the company operates a number of employee share option
schemes available to executive directors and senior
management all of which now have performance conditions
attached to them the remuneration committee has agreed
that the exercise of options is conditional upon the growth in the
company’s adjusted earnings per share of at least ﬁve percent
above the growth in the uk retail prices index per annum over
three consecutive ﬁnancial years after the date of grant
it is the company’s intention to operate other share option
schemes which will provide longterm savings opportunities
for all the group’s employees as well as encouraging them 
to participate in the success of the group
directors’ service contracts
executive directors have contracts of service terminable on 
no more than one year’s notice nonexecutive directors do
not have contracts of employment but are offered letters of
appointment for three years
directors’ emoluments
christa echtle and malcolm paget were each appointed as
directors on 8 june 2001 malcolm paget resigned on 
20 november 2001 lord t om sawyer alan dexter and 
remuneration report
salary beneﬁts annual compensation 2002 2001
and fees in kind bonus – loss of ofﬁce total total
£’000 £’000 £’000 £’000 £’000 £’000
nonexecutives
lord tom sawyer 35–– –35 –
alan dexter 30–– –30 –
james reed 25–– –25 –
daphne statham 6–– – 6 –
executives
christa echtle 135 7 50 – 192 8
desmond doyle 60 6 50 – 116 –
malcolm paget 35 3 – 37 75 7
aggregate emoluments 326 16 100 37 479 15 19 reed health group plc
james reed were each appointed as a director on 5 july 2001
desmond doyle was appointed as a director on 26 november
2002 and daphne statham was appointed as a director on 
1 april 2002
the ﬁgures above represent emoluments earned as directors
during the relevant ﬁnancial year all amounts are paid in that
year with the exception of the annual bonus
directors’ pensions
the company operates a deﬁned contribution pension scheme
that the executive directors are eligible to join alternatively at
the request of the executive director contributions can be paid
to individual personal pension plans 
employer contributions of £11000 2001 £nil and £3000
2001 £nil were paid to personal pension plans for 
christa echtle and desmond doyle respectively no pension
contributions are made for nonexecutive directors
no pension contribution was made for malcolm paget in the
year 2001 £nil
directors’ interests
the beneﬁcial and family interests of directors of the company
at 30 june 2002 in the share capital of the company
according to the register of directors’ interests maintained
under section 325 of the companies act 1985 were
the nonbeneﬁcial interest of james reed includes 2941000
ordinary shares held as a cotrustee of the reed charity and
8045775 “b” ordinary shares held as cotrustee of family
trusts except to the extent that he has a lifeinterest in those
trusts his beneﬁcial interest includes 134875 ordinary
shares representing his own and his spouse’s personal
holdings as well as 2274258 ordinary shares and 3320170
“b” ordinary shares representing his lifeinterests in family
trusts and 5000000 “b” ordinary shares as a result of his
family interest in a family trust 
there have been no changes in directors’ shareholdings
since the year end 
directors’ share options
details of options held by directors during the year were
the market price of the shares at 30 june 2002 was 1465p and
the low and high for the year was 985p and 1815p
the options granted to christa echtle formed part of the
arrangements on the demerger of the group from reed
executive plc and were disclosed in the documentation
relating to the demerger these options are not subject to any
performance conditions share options granted to desmond
doyle are only exercisable if growth in the company’s
adjusted earnings per share is at least ﬁve percent above the
growth in the uk retail prices index per annum over three
consecutive ﬁnancial years after the date of grant
there have been no further changes in directors’ options held
since the year end
on behalf of the board
lord sawyer
chairman remuneration committee
9 september 2002
ordinary ordinary “b” ordinary “b” ordinary
shares shares shares shares
300602 300601 300602 300601
nonexecutives
lord tom sawyer – – – –
alan dexter – – – –
james reed – beneﬁcial 2409133 2409133 8320170 8320170
– nonbeneﬁcial 2941000 2941000 8048775 8048775
daphne statham – – – –
executives
christa echtle 90909 90909 – –
desmond doyle – – – –
no of options
granted exercised date from
at start during during at end exercise when expiry 
of year year year of year price exercisable date
christa echtle – 392156 – 392156 £102 060704 060711
– 392156 – 392156 £102 060705 060711
– 196080 – 196080 £102 060706 060711
– 980392 – 980392
desmond doyle – 148700 – 148700 £1345 070305 070312 20 reed health group plc
the company complied throughout the year with the code
provisions set out in section 1 of the combined code published
by the committee on corporate governance in june 1998
“the code” except where indicated in this statement 
the manner in which the group applies the principles of good
governance contained in the code is described in the
appropriate parts of this annual report consequently the
application by the company of the code’s principles to
remuneration matters on pages 18 and 19 should be read in
conjunction with the statement below 
directors
during the year the company has maintained a board of
directors which leads and controls the company by holding at
least ten meetings a year at which current performance is
examined and directions are given regular reports on
monthly performance and other ad hoc matters of importance
to the company ensure that the board is supplied in a timely
manner with the information necessary to make an informed
judgement additional meetings are held to discuss the
company’s long term strategic focus and other matters such
as acquisitions as necessary
in accordance with the company’s articles of association and
the code each director is subject to reelection by the
company’s shareholders at the annual general meeting
immediately following appointment and at least every three
years thereafter
the board has a schedule of matters speciﬁcally reserved to it
for decision and has written terms of reference for the various
committees to which it has delegated its authority in certain
matters all directors have access to the advice and services
of the company secretary who is also responsible for
ensuring that board procedures are followed there is also a
procedure in place for any director to take independent
professional advice if necessary at the company’s expense
the board is led by the nonexecutive chairman lord sawyer
the daytoday running of the company’s business is delegated
to an executive team of christa echtle the chief executive and
desmond doyle the group finance director the board has
three further nonexecutive directors with health social care
and recruitment backgrounds brief biographies of the directors
are given on page 15 with the exception of james reed all the
nonexecutives are considered to be independent not being
past executives of the company and other than their
shareholdings and fees they have no ﬁnancial interest in the
company james reed is a director of reed executive plc
which provides the group with certain it and property related
services details of which are set out in note 6 to the ﬁnancial
statements nonexecutives comprise more than a third of 
the board alan dexter acts as the company’s senior 
nonexecutive director
the board has procedures that allow all directors to deepen
their knowledge of their role and responsibilities appropriate
training brieﬁngs and induction are available to all directors
on appointment taking into account existing qualiﬁcations
and experience 
board committees
the board operates an audit committee and a remuneration
committee the board does not have a nominations
committee as it is deemed unnecessary in view of the size of
the company all board nominations are considered by the
full board of directors the members of each committee are
listed on page 14 each of the board’s committees has
carefully drafted terms of reference and consists entirely of
nonexecutive directors
the audit committee consists of all nonexecutive directors
and meets at least twice a year the committee which is
chaired by alan dexter considers and recommends the
appointment and fees of the external auditors reviews the
scope and results of the annual external audit considers the
independence and objectivity of the external auditors reviews
prior to publication the interim results preliminary
announcement and the annual ﬁnancial statements and
reviews the group’s system of internal control
the remuneration committee consists of all nonexecutive
directors and meets at least twice a year whilst the inclusion
of james reed who is not an independent director is a
breach of the combined code the committee welcomes his
contribution in determining executive remuneration given that
he is also a signiﬁcant shareholder the committee which is
chaired by lord sawyer determines policy on executive
directors’ remuneration the committee also determines the
criteria on which employee share option schemes and
corporate governance 21 reed health group plc
invitations to participate are to be offered the report of the
remuneration committee on the policies which it applies and
on the executive directors’ remuneration packages is set out
on pages 18 and 19 appointments of new directors to the
board are also considered by the board of the company
internal controls
the directors are responsible for the group’s system of
internal control and for reviewing its effectiveness whilst the
role of management is to implement board policies on risk
management and control to meet its obligations under the
t urnbull guidance it should be recognised that the group’s
system of internal control is designed to manage rather than
eliminate the risk of failure to achieve the group’s business
objectives and can only provide reasonable and not absolute
assurance against material misstatement or loss
the group demerged from reed executive plc on 4 july 2001
since that date the group has operated a risk management
process which is embedded in normal management and
governance processes 
the group operates a series of controls which are 
communicated through operating and control manuals in
existence at both a divisional and group level these controls
include but are not limited to the annual strategic planning and
budgeting process a clearly deﬁned organisational structure
with authorisation limits reviews by senior management of
monthly ﬁnancial and operating information including
comparisons with budgets 
as part of the annual strategic planning and budgeting process
each division identiﬁes signiﬁcant risks the probability of those
risks occurring their potential ﬁnancial impact and the plans for
managing and mitigating each of those risks these plans are
then discussed with the group’s executive directors as part of
the strategic planning process the plans are discussed
updated and reviewed on a sixmonthly basis
on 28 may 2002 the company acquired the locum group 
as a result of the changes that have taken place during the
year the board has deferred its annual assessment of the
effectiveness of the system of internal controls it has asked that
a review be undertaken across the enlarged group to identify
and document key risks and associated procedures and controls
with a view to conforming policy and procedure across the group
this exercise is expected to be completed by december this
year whereupon a full report will be given to the board and a
formal review of the effectiveness of controls undertaken
in common with a number of other smaller quoted 
companies the company does not have an internal audit
function the audit committee considers the need for such 
a function at the meeting with the external auditors to review the
full year results signiﬁcant risk issues are referred to the board
for consideration
communication with shareholders
the board attaches a high priority to communications with
shareholders presentations are made to shareholders
institutions and analysts by the chief executive and group
finance director at least twice a year to coincide with results
announcements additional dialogue with institutional
shareholders is entered into as necessary mindful of the rules
on insiders and pricesensitive information
the annual general meeting is normally attended by all directors
and provides an opportunity for communication with those
institutional and individual shareholders attending notice of the
annual general meeting is given to shareholders at least 20
working days in advance and separate resolutions are proposed
on each substantially separate issue during the meeting the
chairman also invites questions from shareholders 
where resolutions at the annual general meeting are dealt with
by show of hand the results of proxy votes for and against are
still announced after the annual general meeting shareholders
can obtain a resume of the meeting and the voting ﬁgures by
writing to the company secretary at the registered ofﬁce shown
on page 14 the annual general meeting is to be held on 
26 november 2002 the resolutions to be proposed at the
annual general meeting together with explanatory notes appear
in the separate notice of annual general meeting sent to all
shareholders
financial and other information about the company is
available on the company’s web site at wwwreedhealthcouk
going concern
the board is satisﬁed that the group has adequate ﬁnancial
resources to continue to operate for the foreseeable future
for this reason the directors continue to adopt the going
concern basis in preparing the ﬁnancial statements 22 reed health group plc
independent auditors’ report to the
shareholders of reed health group plc
we have audited the ﬁnancial statements on pages 23 to 40
respective responsibilities of directors and auditors
the directors’ responsibilities for preparing the annual report
and the ﬁnancial statements in accordance with applicable
law and united kingdom accounting standards are set out in
the statement of directors’ responsibilities
our responsibility is to audit the ﬁnancial statements in
accordance with relevant legal and regulatory requirements
united kingdom auditing standards and the listing rules of
the financial services authority we report to you our opinion
as to whether the ﬁnancial statements give a true and fair view
and are properly prepared in accordance with the companies
act 1985 we also report to you if in our opinion the
directors’ report is not consistent with the ﬁnancial
statements if the company has not kept proper accounting
records if we have not received all the information and
explanations we require for our audit or if information
speciﬁed by law or the listing rules regarding directors’
remuneration and transactions with the company and other
members of the group is not disclosed
we review whether the corporate governance statement
reﬂects the company’s compliance with the seven provisions
of the combined code speciﬁed for our review by the listing
rules and we report if it does not we are not required to
consider whether the board’s statements on internal control
cover all risks and controls or form an opinion on the
effectiveness of the group’s corporate governance
procedures or its risk and control procedures
we read the information contained in the annual report 
and consider whether it is consistent with the audited 
ﬁnancial statements we consider the implications for our
report if we become aware of any apparent misstatements 
or material inconsistencies with the ﬁnancial statements 
our responsibilities do not extend to any information 
outside the annual report
basis of audit opinion
we conducted our audit in accordance with united kingdom
auditing standards issued by the auditing practices board 
an audit includes examination on a test basis of evidence
relevant to the amounts and disclosures in the ﬁnancial
statements it also includes an assessment of the signiﬁcant
estimates and judgements made by the directors in the
preparation of the ﬁnancial statements and of whether the
accounting policies are appropriate to the company’s
circumstances consistently applied and adequately disclosed
we planned and performed our audit so as to obtain all the
information and explanations which we considered necessary
in order to provide us with sufﬁcient evidence to give
reasonable assurance that the ﬁnancial statements are free
from material misstatement whether caused by fraud or other
irregularity or error in forming our opinion we also evaluated
the overall adequacy of the presentation of information in the
ﬁnancial statements
opinion
in our opinion the ﬁnancial statements give a true and fair view
of the state of affairs of the company and the group as at 
30 june 2002 and of the group’s proﬁt for the year then
ended and have been properly prepared in accordance with
the companies act 1985
rsm robson rhodes
chartered accountants and registered auditors
london england
9 september 2002 23 reed health group plc
consolidated proﬁt and loss account
for the year ended 30 june 2002
2002 2001
notes £’000 £’000
group turnover – continuing
existing operations 73498 66776
acquired operations 4847 –
total group turnover 2 78345 66776
cost of sales 63180 55509
gross proﬁt 2 15165 11267
administrative expenses 2 10274 6884
operating proﬁt before goodwill amortisation and exceptional item 5179 4383
goodwill amortisation 132 –
exceptional item 4 156 –
group operating proﬁt 4891 4383
group operating proﬁt – continuing 
existing operations 4693 4383
acquired operations 198 –
total group operating proﬁt 4891 4383
net interest receivablepayable and similar charges 3 48 45
proﬁt on ordinary activities before taxation 4 4939 4338
t ax on proﬁt on ordinary activities 7 1588 1344
proﬁt for the ﬁnancial year 3351 2994
dividendscontributions to group 8 1094 2779
retained proﬁt for the year 2257 215
earnings per share p p
basic 9 727 669
diluted 9 722 669
adjusted earnings per share before goodwill amortisation 
and exceptional item
basic 9 789 669
diluted 9 784 669
there were no recognised gains and losses other than those noted in the consolidated proﬁt and loss account there were no differences
between historical cost proﬁt and losses and the ﬁgures noted in the consolidated proﬁt and loss account
prior year comparatives in all instances have been stated on a proforma basis see notes to the financial statements 1b 24 reed health group plc
consolidated balance sheet
at 30 june 2002
2002 2001
notes £’000 £’000
fixed assets
intangible assets 10 31437 –
t angible assets 11 1075 438
32512 438
current assets
debtors due within one year 14 19702 10934
cash at bank and in hand 1139 296
20841 11230
creditors amounts falling due within one year 15 19692 4187
net current assets 1149 7043
total assets less current liabilities 33661 7481
creditors amounts falling due after more than one year 16 2131 –
provisions for liabilities and charges 18 12 3
net assets 31518 7478
capital and reserves
called up share capital 19 1193 895
share premium account 20 21485 –
merger reserve 20 6317 6317
capital redemption reserve 20 51 51
proﬁt and loss account 20 2472 215
equity shareholders’ funds 21 31518 7478
the ﬁnancial statements were approved by the board on 9 september 2002 and were signed on its behalf by
christa echtle desmond doyle
chief executive group finance director 25 reed health group plc
company balance sheet
at 30 june 2002
2002
notes £’000
fixed assets
investments in group undertakings 12 35381
current assets
debtors 14 69
cash at bank and in hand –
69
creditors amounts falling due within one year 15 10220
net current liabilities 10151
total assets less current liabilities 25230
creditors amounts falling due after more than one year 17 2000
net assets 23230
capital and reserves
called up share capital 19 1193
share premium account 20 21485
capital redemption reserve 20 51
proﬁt and loss account 20 501
equity shareholders’ funds 21 23230
the ﬁnancial statements were approved by the board on 9 september 2002 and signed on its behalf by
christa echtle desmond doyle
chief executive group finance director 26 reed health group plc
2002 2001
notes £’000 £’000
net cash inﬂow from operating activities 22 7212 1910
returns on investment and servicing of ﬁnance 23 48 45
taxation paid 926 2530
6334 665
capital expenditure and ﬁnancial investment
payments for tangible ﬁxed assets 476 337
acquisitions and disposals
purchase of subsidiary undertakings 13 34486 –
cash acquired with subsidiary undertakings 13 24 –
34462 –
dividendscontributions paid 295 2779
net cash outﬂow before ﬁnancing 28899 3781
financing
new bank loans 9000 –
financing costs paid 41 –
repayment of bank loans 1000 –
contribution from group – 4077
issue of ordinary shares 22366 –
expenses of share issue 583 –
29742 4077
increase in cash 843 296
consolidated cash flow statement
for the year ended 30 june 2002 27 reed health group plc
notes to the financial statements
30 june 2002
1 accounting policies
a basis of accounting
the ﬁnancial statements are prepared in accordance with applicable accounting standards under the historical cost convention
as permitted by section 230 of the companies act 1985 the proﬁt and loss account of the parent company has not been separately
presented in the ﬁnancial statements
b basis of consolidation
the transfer of reed health limited and its subsidiaries to reed health group plc has been accounted for in accordance with the
principles of merger accounting as set out in frs6 “acquisitions and mergers” the ﬁnancial statements are therefore presented as 
if reed health limited and its subsidiaries had been owned and controlled by reed health group plc throughout
reed health limited was created through an internal reorganisation within reed executive plc which resulted in the transfer to it of reed
executive plc’s health activities with effect from 11 may 2001 the health activities included both subsidiary companies and certain
unincorporated business activities of reed executive plc which were themselves acquired by reed health group plc on 4 july 2001
comparatives have been prepared as if the continuing operations of the reed health group plc were in existence for the whole of
2000 and 2001 no comparatives are reported for the company as the company accounts relate to the period from incorporation on
11 may 2001 to 30 june 2002
the locum group limited and all its subsidiary undertakings have been accounted for at 30 june 2002 using acquisition accounting
the results of subsidiary undertakings acquired during the ﬁnancial year are included from the effective date of acquisition on 28 may 2002
c goodwill
purchased goodwill is the excess of the cost of an acquired entity over the aggregate of the fair values of that entity’s identiﬁable
assets and liabilities and is shown on the balance sheet as an asset goodwill is amortised evenly over its estimated useful economic
life of 20 years in addition to systematic amortisation the book value is written down to recoverable amount when any impairment is
identiﬁed
d investments
the investment in reed health limited in the company balance sheet is recorded at the nominal value of shares issued for the
purposes of the demerger in accordance with the treatment allowed by section 131 companies act 1985 on consolidation the
difference between the nominal value of shares issued and the net assets of reed health limited on acquisition is recorded as a
merger reserve the investment in the locum group limited is recorded at its fair value at the date of completion
the book value of investments is written down when any impairment is identiﬁed
e tangible ﬁxed assets and depreciation
all ﬁxed assets are included at cost and depreciation is provided evenly on that cost to write them down to their estimated residual
values over their expected useful lives where there is evidence of impairment ﬁxed assets are written down to recoverable amount 
the principal annual rates used for assets are
computer equipment  software 333
ofﬁce equipment ﬁxtures and ﬁttings 125 – 20
leasehold improvements over term of the lease
f turnover
turnover consists of the invoiced value excluding vat for goods and services supplied to third parties
g pensions
the group operates a number of deﬁned contribution pension schemes the pension costs for the schemes represent contributions
payable by the group in the year 28 reed health group plc
1 accounting policies continued
h deferred taxation
the payment of taxation is deferred or accelerated because of timing differences between the treatment of certain items for accounting
and taxation purposes full provision for deferred taxation is made under the liability method without discounting on all timing
differences that have arisen but not reversed by the balance sheet date unless such provision is not permitted by frs 19
deferred tax assets are recognised to the extent it is regarded as more likely than not that they will be recovered
i leased assets
rentals payable under operating leases are charged to the proﬁt and loss account on a straight line basis over the period of the leases
2 segmental reporting 
turnover cost of sales gross proﬁt administrative expenses goodwill amortisation exceptional item and operating proﬁt are
analysed between existing operations and operations acquired in the year
2002 existing acquired total
operations operations continuing
operations
£’000 £’000 £’000
turnover 73498 4847 78345
cost of sales 59346 3834 63180
gross proﬁt 14152 1013 15165
administrative expenses 9303 683 9986
goodwill amortisation – 132 132
exceptional item 156 – 156
group operating proﬁt 4693 198 4891
2001 existing acquired t otal
operations operations continuing
operations
£’000 £’000 £’000
turnover 66776 – 66776
cost of sales 55509 – 55509
gross proﬁt 11267 – 11267
administrative expenses 6884 – 6884
group operating proﬁt 4383 – 4383
all group turnover is derived from the united kingdom the directors consider all operations to form one class of business
3 net interest receivablepayable and similar charges
2002 2001
£’000 £’000
interest receivable 92 –
interest payable 44 45
net interest receivablepayable 48 45
interest payable comprises interest on
bank loans and overdrafts 44 45
notes to the financial statements continued
30 june 2002 29 reed health group plc
4 profit on ordinary activities before taxation
this is arrived at after charging
2002 2001
£’000 £’000
amortisation of goodwill 132 –
depreciation of tangible ﬁxed assets 237 108
loss on disposal of ﬁxed assets 7 –
exceptional item – costs related to the demerger of the group 156 –
auditors remuneration
– audit services 66 50
– nonaudit services 163 79
operating lease rentals
– plant and machinery 116 104
– land and buildings 362 294
in addition the auditors received £111000 2001 £nil for services in connection with the acquisition of the locum group limited
£98000 was capitalised in arriving at goodwill and £13000 written off to the share premium account
5 staff costs
average monthly number of employees including directors
2002 2001
no no
recruitment consultants 140 109
head ofﬁce 40 35
3093 2921
£’000 £’000
staff costs including directors
wages and salaries 4183 3120
social security costs 404 278
pension costs – deﬁned contribution scheme 43 36
4630 3434
in addition to the permanent staff whose numbers and costs are shown above the group employed 2913 temporary staff 2001 2777
information on directors’ remuneration is included in the remuneration report on pages 18 and 19 this information has been audited
6 related party transactions
during the year the group entered into transactions on an arm’s length basis with reed executive plc to the value of £1145000 
the services provided were it and systems provision and support property rental payroll services and the provision of temporary
staff no comparisons are available for 2001 because reed health limited operated as part of reed executive plc at 30 june 2002
the group owed reed executive plc £1062000 2001 £253000
in the same period the group provided debt collection services on an arm’s length basis to reed executive plc to the value of
£173000 2001 £nil at 30 june 2002 reed executive plc owed the group £6000 2001 £nil
reed executive plc is regarded as a related party because of its previous ownership of reed health limited james reed being a director
of both reed executive plc and reed health group plc and the reed family retaining signiﬁcant shareholdings in both companies 30 reed health group plc
notes to the financial statements continued
30 june 2002
7 taxation
2002 2001
£’000 £’000
united kingdom corporation tax
current tax on income for the year 1591 1341
deferred taxation net reversalorigination of timing differences 3 3
t ax on proﬁt on ordinary activities 1588 1344
proﬁt on ordinary activities before taxation 4939 4338
theoretical uk corporation t ax rate of 30 1482 1301
effects of
goodwill amortisation not tax deductible 40 –
other expenditure not tax deductible 66 43
accelerated capital allowances 3 3
1591 1341
8 dividends
2002 2001
£’000 £’000
interim dividend paid of 066p per share 295 –
proposed ﬁnal dividend of 134p per share 799 –
contributions to group – 2779
t otal dividend in year 1094 2779
the contributions to group reﬂect the proﬁts retained within reed executive plc prior to the demerger 31 reed health group plc
9 earnings per share
basic earnings per share is calculated using the earnings attributable to ordinary shareholders and the weighted average number of
ordinary shares in issue during the year 
diluted earnings per share is calculated by adjusting the ordinary shares in issue by the potential dilutive effect of share options 
there are no other potentially dilutive categories other than share options
the basis of the earnings and weighted average number of shares used in the calculations are set out below
2002 2001
weighted weighted
average number average number
earnings of shares eps earnings of shares eps
£’000s thousands pence £’000s thousands pence
frs14 basis
basic earnings per share 3351 46126 727 2994 44733 669
dilutive effect of options – 281 005 –––
diluted earnings per share 3351 46407 722 2994 44733 669
adjusted to exclude goodwill 
amortisation and exceptional item
basic – frs14 basis 3351 46126 727 2994 44733 669
exceptional item 156 – 034 –––
goodwill amortisation 132 – 028 –––
adjusted basic earnings per share 3639 46126 789 2994 44733 669
diluted – frs14 basis 3351 46407 722 2994 44733 669
exceptional item 156 – 034 –––
goodwill amortisation 132 – 028 –––
3639 46407 784 2994 44733 669
10 intangible assets
goodwill
£’000
cost
at 1 july 2001 –
additions 31569
at 30 june 2002 31569
amortisation
at 1 july 2001 –
charged in the year 132
at 30 june 2002 132
net book value
at 30 june 2002 31437
at 30 june 2001 – 32 reed health group plc
notes to the financial statements continued
30 june 2002
11 tangible fixed assets
group
computer ofﬁce equipment leasehold
equipment fixtures property 
and software and fittings improvements total
£’000 £’000 £’000 £’000
cost
at 1 july 2001 66 382 – 448
capital expenditure 267 209 – 476
subsidiary acquisition 739 298 66 1103
disposals 21 – – 21
at 30 june 2002 1051 889 66 2006
depreciation
at 1 july 2001 6 4 – 10
subsidiary acquisition 516 145 36 697
disposals 13 – – 13
charged in year 112 123 2 237
at 30 june 2002 621 272 38 931
net book value
at 30 june 2002 430 617 28 1075
at 30 june 2001 60 378 – 438
company
at 30 june 2002 the company had no ﬁxed assets on its balance sheet 2001 £nil
12 investment in group undertakings
company
shares
£’000
cost and net book value
on incorporation –
additions note 13 35381
at 30 june 2002 35381
details of the principal operating subsidiaries are set out below
company interest
principal trading in ordinary shares country of 
subsidiaries and voting rights incorporation principal activity
reed health limited 100 great britain recruitment
agency nursing limited 100 great britain recruitment
the locum group limited 100 great britain recruitment
caroline pelham limited 100 great britain recruitment
julia principal limited 100 great britain recruitment
lg international employment services limited 100 great britain recruitment
ljo associates pty limited 100 australia recruitment
 the interest of reed health group plc is held through intermediate holding companies 33 reed health group plc
13 acquisitions
on 4 july 2001 the company acquired 100 of the issued share capital of reed health limited under the principles of merger 
accounting as set out in frs 6 “ acquisitions and mergers” the company’s investment in reed health limited is £895000 being the 
nominal value of shares issued by the company
on 28 may 2002 the group acquired 100 of the issued share capital of the locum group limited whose assets and liabilities were
initial accounting provisional
book value policy alignment fair value
£’000 £’000 £’000
t angible ﬁxed assets 526 120 406
debtors 7659 – 7659
cash at bank and in hand 24 – 24
creditors 4863 – 4863
t axation – current 297 – 297
deferred tax provision 12 – 12
net separable assets 3037 120 2917
net assets acquired 2917
goodwill 31569
cash consideration 34486
the accounting policy alignment was made to reﬂect the difference in accounting policy relating to the depreciation of ﬁxed assets
the fair values are considered to be provisional at this time as the group is at an early stage of integrating the acquired operations
since the acquisition the locum group limited contributed £369000 to the group’s operating cash ﬂow paid £2000 in respect of
net returns on investments and servicing of ﬁnance paid £nil in respect of taxation and paid £8000 in respect of capital expenditure
and ﬁnancial investment
preacquisition performance of the locum group limited
7 months from 1 november 2001 £’000
turnover 25631
cost of sales 20088
gross proﬁt 5543
administrative expenses 3800
goodwill amortisation 306
operating proﬁt 1437
net interest receivable 6
proﬁt before taxation 1443
t axation 434
proﬁt for the ﬁnancial period 1009
t otal recognised gains 1009
year ended 31 october 2001
proﬁt for the ﬁnancial year 1175 34 reed health group plc
notes to the financial statements continued
30 june 2002
14 debtors
group company
2002 2001 2002
£’000 £’000 £’000
trade debtors 18056 10854 –
other debtors 1188 12 –
prepayments and accrued income 458 68 69
19702 10934 69
15 creditors amounts falling due within one year
group company
2002 2001 2002
£’000 £’000 £’000
bank loan 6000 – 6000
trade creditors 1481 3695 –
amounts owed to group undertakings – – 3281
corporation tax 1062 100 –
other taxation and social security 3744 ––
other creditors 4621 308 –
accruals and deferred income 1985 84 140
proposed dividends 799 – 799
19692 4187 10220
reed health limited operated as part of reed executive plc in the previous year with costs being recharged internally as deemed 
appropriate therefore the previous years ﬁgures are not directly comparable
16 creditors amounts falling due after more than one year
group company
2002 2001 2002
£’000 £’000 £’000
deferred consideration 131 – –
bank loan 2000 – 2000
2131 – 2000
the deferred consideration arises on the acquisition of ljo associates pty limited by the locum group limited 35 reed health group plc
17 borrowings analysis
group company
2002 2001 2002
£’000 £’000 £’000
due within one year
bank loans 6000 – 6000
due after more than one year
bank loans 2000 – 2000
repayable
due within 1 year 6000 – 6000
over 1 but  2 years – – –
over 2 but  5 years 2000 – 2000
after 5 years – – –
8000 – 8000
the bank loans and overdraft facility which are all sterling denominated are secured by a ﬂoating charge over the assets of the
companies concerned all are repayable within ﬁve years
the group’s only undrawn committed borrowing facilities for which all conditions precedent have been met is a bank variable loan
expiring within three years the undrawn amount at 30 june 2002 was £4000000 2001 £nil
the ﬂoating rate sterling borrowings are libor linked and at 30 june 2002 are of an average interest rate of 54125
18 provisions for liabilities and charges
deferred taxation
£’000
group
at 1 july 2001 3
transfer from proﬁt and loss account 3
subsidiary acquired 12
at 30 june 2002 12
deferred taxation comprises
2002 2001
£’000 £’000
accelerated capital allowances 12 3
12 3 36 reed health group plc
notes to the financial statements continued
30 june 2002
19 share capital
2002 2001
£’000 £’000
authorised
50000000 ordinary shares of 2p each 1000 1000
50000000 “b” ordinary shares of 2p each 1000 1000
2000 2000
allotted and fully paid
37403372 ordinary shares of 2p each 748 450
22241400 “b” ordinary shares of 2p each 445 445
2001 22492179 ordinary and 22241400 “b” ordinary shares of 2p each
1193 895
on incorporation on 11 may 2001 the company had an authorised share capital of 50000 ordinary shares of £1 each and 50000 
redeemable preference shares of £1 each
ordinary shares and “b” ordinary shares rank pari passu in respect of dividends and other distributions voting and repayments of 
capital on winding up
on 11 may 2001 the company issued 2 ordinary shares of £1 each fully paid to subscribers at par
on 12 june 2001 the company issued 50000 redeemable preference shares of £1 each at par
on 13 june 2001 the company redeemed the preference shares at par
on 16 june 2001
• the 50000 authorised ordinary shares of £1 each were sub divided into 50 ordinary shares of 2p each
• the 50000 authorised redeemable preference shares were redesignated as “b” ordinary shares and each divided into 
50 “b” ordinary shares of 2p each and
• the authorised share capital was increased from £100000 to £2000000 by the creation of 47500000 ordinary shares of 2p 
each and 47500000 “b” ordinary shares of 2p each
on 4 july 2001
• the 2 £1 ordinary shares issued on incorporation were repurchased and cancelled and
• the company subscribed for the entire issued share capital of reed health limited consideration was satisﬁed by the issue of 
22492179 ordinary shares and 22241400 “b” ordinary shares in reed health group plc to the shareholders of reed health 
limited and no premium has been recognised in the company accounts as allowed by section 131 of the companies act 1985
the company issued 14911193 ordinary shares  of 2p each for £150 each during the year as part of the funds raised for the 
purchase of the locum group limited the resulting premium of £22068566 has been credited to the share premium account
options over ordinary shares have been granted under the company’s various share option schemes options over 1283772
shares exercisable at varying dates between 6 july 2004 and 7 march 2012 were outstanding at 30 june 2002 37 reed health group plc
20 reserves
share share premium merger capital redemption proﬁt and 
capital account reserve reserve loss account
£’000 £’000 £’000 £’000 £’000
group
at 1 july 2001 895 – 6317 51 215
share issue 298 ––––
premium on share issue – 22068–––
expenses of share issue – 583 – – –
retained proﬁt – – – – 2257
at 30 june 2002 1193 21485 6317 51 2472
the merger reserve is included in the consolidated balance sheet following the principles of merger accounting in accordance with 
frs 6 “acquisitions and mergers” this being the excess of consideration paid over the nominal value of shares issued upon the
acquisition of reed health limited by the group on 4 july 2001
share share premium capital redemption proﬁt and 
capital account reserve loss account
£’000 £’000 £’000 £’000
company
on incorporation ––––
share issues 1193–––
premium on share issue – 22068 – –
expenses of share issue – 583 – –
capital redemption – – 51 51
retained proﬁt – – – 552
at 30 june 2002 1193 21485 51 501
the capital redemption reserve arose through the redemption of preference shares as explained in note 19 38 reed health group plc
notes to the financial statements continued
30 june 2002
21 reconciliation of movements in equity shareholders’ funds
2002 2001
£’000 £’000
group
t otal recognised gains relating to the ﬁnancial year 3351 2994
dividendscontributions 1094 2779
net proceeds of share issue 21783 895
increase in shareholders’ funds 24040 1110
opening shareholders’ funds 7478 6368
closing shareholders’ funds 31518 7478
company
t otal recognised gains for the ﬁnancial period 1646
dividends 1094
net proceeds of share issues 22678
increase in shareholders’ funds 23230
opening shareholders’ funds –
closing shareholders’ funds 23230
22 reconciliation of operating profit to net cash inflow from operating activities
2002 2001
£’000 £’000
operating proﬁt 4891 4383
amortisation of goodwill 132 –
depreciation of tangible ﬁxed assets 237 108
loss on disposal of tangible ﬁxed assets 7 –
working capital movements
debtors 1068 5022
creditors 3013 2441
net cash inﬂow from continuing operating activities 7212 1910
23 returns on investment and servicing of finance
2002 2001
£’000 £’000
interest received 92 –
interest paid 44 45
48 45 39 reed health group plc
24 reconciliation of net cash flow to movement in net debt
2002 2001
£’000 £’000
increase in cash 843 296
new loans 9000 –
repayment of loans 1000 –
increasereduction in net debtfunds 7157 296
opening net funds 296 –
closing net debtfunds 6861 296
25 analysis of net fundsdebt
acquisition of 
subsidiary excluding 
1 july 2001 cash ﬂow cash and overdraft 30 june 2002
£’000 £’000 £’000 £’000
cash at bank and in hand 296 843 – 1139
bank overdraft – – – –
cash 296 843 – 1139
borrowings – 8000 – 8000
net fundsdebt 296 7157 – 6861
26 post balance sheet events
on 28 august 2002 the group entered into a sales ledger ﬁnancing agreement with barclays bank plc whereby through conﬁdential
invoice discounting the group may borrow up to £13 million secured by a ﬂoating charge over the group’s assets
in august 2002 the company set up a wholly owned subsidiary in calgary lg personnel international limited the subsidiary
undertaking is expected to commence trading in october 2002
27 contingent liabilities
an amount of up to £70000 is payable to the former owners of ljo associates pty limited a wholly owned australian subsidiary of
the locum group limited the amount is payable by 31 march 2004 dependent upon the performance of the subsidiary the full
amount of the contingent payment has been provided for in the ﬁnancial statements
company
the company acts as guarantor for the banking requirements of all of its subsidiary undertakings the directors are of the opinion that
the likelihood of any default by a member of the group is remote and as such there is no requirement for any provision to be made in
the ﬁnancial statements
the company additionally provides operational guarantees in the ordinary course of business on behalf of its subsidiary
undertakings the directors are of the opinion that the likelihood of any default by a member of the group is remote and as such there
is no requirement for any provision to be made in the ﬁnancial statements 40 reed health group plc
notes to the financial statements continued
30 june 2002
28 financial commitments
capital commitments
as at 30 june 2002 the group had capital expenditure commitments of £nil contracted for but not provided in the ﬁnancial statements
2001 £nil
as at 30 june 2002 the company had capital expenditure commitments of £nil contracted for but not provided in the ﬁnancial statements
2001 £nil
operating lease commitments
the payments which the group is committed to make in the next year under operating leases are as follows
2002 2001
£’000 £’000
land and buildings leases expiring
within one year 110 123
one to ﬁve years 262 204
beyond ﬁve years 112 140
484 467
plant and machinery leases expiring
within one year 51 116
one to ﬁve years 74 –
beyond ﬁve years – –
125 116
the company had operating lease commitments of £nil at 30 june 2002 2001 £nil
29 financial assets and liabilities
the board policy on derivatives and ﬁnancial instruments is explained in the financial review on pages 12 and 13
financial assets and liabilities excluding debtors and non debt liabilities are analysed as follows
2002 2001
£’000 £’000
cash at bank and in hand 1139 296
borrowings 8000 –
6861 296
all balances are denominated in sterling there is no material difference between the book value and fair value of the ﬁnancial assets
and liabilities
the maturity proﬁle of borrowings and related interest rates are shown in note 17
market price risk
the group monitors its exposure to market price risk with regard to interest rate and foreign currency movements a 1 increase in 
libor would reduce group proﬁt before tax by £80000 the group has no material exposure to exchange rate risk 41 reed health group plc
notice is hereby given that the annual general meeting of the company will be held at mint house 77 mansell street london e1 8af
on 26 november 2002 at 1230 pm to transact the following business
ordinary business
1 t o receive and consider the ﬁnancial statements together with the reports of the directors and auditors for the year ended 30 june 2002
2 t o declare a ﬁnal dividend of 134p per share for the year ended 30 june 2002 payable on the ordinary and ‘b’ ordinary shares of
the company to all members whose names appear on the register of members on 1 november 2002 and that such dividend be paid
on 2 december 2002
3 t o elect christa echtle as a director
4 t o elect desmond doyle as a director
5 t o elect lord t om sawyer as a nonexecutive chairman
6 t o elect james reed as a nonexecutive director
7 t o elect alan dexter as a nonexecutive director
8 t o elect daphne statham as a nonexecutive director 
9 t o appoint rsm robson rhodes as auditors of the company to hold ofﬁce until the conclusion of the next annual general meeting
and to authorise the directors to determine their remuneration
special business
directors’ authority to allot shares
t o consider and if thought ﬁt to pass as an ordinary resolution the resolution set out below
10 that the directors be and are generally and unconditionally authorised pursuant to and in accordance with section 80 of the
companies act 1985 and in substitution for any or all authorities previously conferred upon the directors for the purposes of section
80 of that act to exercise all the powers of the company to allot relevant securities within the meaning of that section up to an
aggregate nominal amount of £395000 this authority shall continue in force until the conclusion of the annual general meeting in
2003 or on 25 february 2004 whichever shall be earlier save that the company may before such expiry make an offer or agreement
which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities in
pursuance of such an offer or agreement as if the power conferred hereby had not expired
savingsrelated share option scheme
t o consider and if thought ﬁt to pass as an ordinary resolution the resolution set out below
11 a the reed health group savingsrelated share option scheme the scheme a summary of which is set out in the appendix to 
the letter to shareholders dated 17 october 2002 be and is hereby approved and that the directors be and they are 
hereby authorised to do all acts and things necessary to establish and carry it into effect and
b the directors be and they are hereby authorised to establish a further scheme or schemes containing such provisions as the 
directors may decide subject to the following
i such schemes must operate within the limit on the number of new ordinary shares which may be made available from time 
to time under the scheme
ii such schemes must except to the extent necessary or desirable to take account of overseas tax securities and exchange 
control laws contain limitations so as to ensure so far as the directors consider practicable that the participants in such 
schemes obtain no greater beneﬁt than employees participating in the scheme and
iii once established the provisions of such schemes may not be amended without the prior approval of the company in 
general meeting if such approval would be required to amend the comparable provisions in the scheme
note 
copies of the full text of the new scheme may be inspected at the registered ofﬁce of the company and at the ofﬁces of slaughter and
may one bunhill row london ec1y 8yy at any time during normal business hours on weekdays saturdays and public holidays
excepted up to and including the day of the meeting and at the venue for the meeting from half an hour before the time ﬁxed for the
meeting until the conclusion of the meeting
notice of annual general meeting 42 reed health group plc
special business continued
disapplication of preemption rights
t o consider and if thought ﬁt to pass as a special resolution the resolution set out below
12 that the directors be and are empowered pursuant to section 95 of the companies act 1985 and in substitution for any or all 
authorities previously conferred upon the directors for the purposes of that section to allot equity securities within the meaning of 
section 942 of the companies act 1985 pursuant to the authority conferred by resolution 10 above as if the preemption provisions
of section 891 of that act did not apply to any such allotment provided that this power shall be limited
a to the allotment of equity securities in connection with a rights issue or open offer in favour of shareholders where the equity 
securities respectively attributable to the interests of all shareholders are proportionate as nearly as they may be to the 
respective numbers of shares held by them but subject to such exclusions or other arrangements as the directors may deem 
necessary or expedient to deal with legal or practical problems under the laws of any territory or the requirements of any 
regulatory body or any stock exchange or in connection with fractional entitlements and
b to the allotment otherwise than pursuant to a above of equity securities up to an aggregate nominal amount of £59640
this authority shall continue in force until the conclusion of the annual general meeting in 2003 or on 25 february 2004 whichever 
shall be the earlier save that the company may before such expiry make an offer or agreement which would or might require equity 
securities to be allotted after such expiry and the directors may allot equity securities in pursuance of such an offer or agreement as if
the power conferred hereby had not expired
company’s authority to purchase its own shares
t o consider and if thought ﬁt to pass as a special resolution the resolution set out below
13 that the company be generally and conditionally authorised to make market purchases as deﬁned in section 163 of the companies
act 1985 of its ordinary shares of 2p each provided that
a the company does not purchase under this authority more than 5610500 ordinary shares
b the company does not pay less than 2p for each ordinary share
c the company does not pay more for each ordinary share than 105 of the average of the middle market price of the ordinary
shares for the ﬁve business days immediately preceding the date on which the company agrees to buy the ordinary shares
concerned
d this authority shall continue in force until the conclusion of the annual general meeting in 2003 or on 25 february 2004
whichever shall be the earlier and
e the company may agree before the authority terminates under d above to purchase ordinary shares where the purchase will
or may be executed after the authority terminates either wholly or in part the company may complete such a purchase though
the authority has terminated 
by order of the board
peter chapman
company secretary registered ofﬁce
79 st georges square
london sw1v 2hx
17 october 2002
notes
1 a member of the company entitled to attend and vote at the above meeting is entitled to appoint one or more proxies to attend and on
a poll vote instead of him a proxy need not be a member of the company t o be valid the form of proxy must reach the company’s
registrars capita irg plc proxy department po box 25 beckenham kent br3 3br not less than 48 hours before the time appointed
for holding the meeting appointment of a proxy will not prevent a member from attending and voting at the annual general meeting
2 copies of the directors’ service contracts are available for inspection at the company’s registered ofﬁce during normal business hours
on any weekday except public holidays and at the place of meeting for 15 minutes prior to and during the annual general meeting
notice of annual general meeting continued please insert
full names and iwe 
addresses in of 
block capitals 
being a membermembers of the above named company hereby appoint lord t om sawyer oror failing him
the duly appointed chairman of the meeting as myour proxy to vote for meus on myour behalf at the annual general meeting of the company to be
held on 26 november 2002 at 1230pm and at any adjournment thereof
please indicate with an “x” in the boxes below how you wish your votes to be cast 
no ordinary resolutions for   against
1 t o receive and adopt the annual report and financial statements
2 t o declare a dividend
3 t o elect christa echtle as a director of the company
4 t o elect desmond doyle as a director of the company
5 t o elect lord t om sawyer as nonexecutive chairman of the company
6 t o elect james reed as a nonexecutive director of the company
7 t o elect alan dexter as a nonexecutive director of the company
8 t o elect daphne statham as a nonexecutive director of the company
9 t o reappoint rsm robson rhodes as auditors of the company and to 
authorise the directors to determine their remuneration
10 t o authorise the company to allot relevant securities
11 t o authorise the directors to establish the savingsrelated share option scheme as detailed in the 
appendix to the letter to shareholders dated 17 october 2002 and further scheme or schemes 
special resolutions
12 t o disapply the statutory preemption rights contained in section 89 companies act 1985
13 t o authorise the company to make market purchases of ordinary shares 
signature           dated this day of2002   
number of ordinary shares held           number of “b” ordinary shares held 
notes
if any other proxy is preferred strike out the name inserted above and add the name of the proxy you wish to appoint and initial the alteration the proxy need not be a member of
the company
if the appointor is a corporation this form must be under its common seal or under the hand of an ofﬁcer or attorney duly authorised in that behalf
in the case of joint holders the signature of any holder will be sufﬁcient but the names of all the joint holders must be stated
if the form is returned without any indication as to how the person appointed proxy shall vote he will exercise his discretion as to how he votes or whether he abstains from voting
t o be valid this form must be completed and deposited together with the power of attorney or other authority if any under which it is signed or a notarially certiﬁed copy of such
power or authority at the ofﬁces of the registrars of the company capita irg plc bourne house 34 beckenham road beckenham kent br3 4tu not less than fortyeight hours
before the time appointed for holding the meeting or adjourned meeting
completion and return of the form of proxy will not prevent members voting and attending in person
form of proxy
reed health group plc
✁ business reply service
licence no mb122
1 1
capita irg plc
proxy department
registrars of reed health group plc
p o box 25
beckenham
kent 
br3 4br
third fold and tuck in
second fold
first fold
✁ designed and produced by weber shandwicksquare mile 


Summary:
 6 reed health group plc
chief executive’s review
this has been a year of signiﬁcant development for
the company in july 2001 we demerged from
reed executive plc and in may this year we made
our ﬁrst major acquisition the locum group 
the principal reason for the demerger was to 
allow the company to concentrate on the
healthcare and public sector stafﬁng markets and
to make suitable acquisitions both these aspects
are essential for the company to build on its aim of
becoming the partner of choice for the delivery of
professional and specialist human resource 
“hr” solutions in the areas of health social care
and education
group strategy
our strategy is to become the leading provider of
professional and specialist hr recruitment and
retention solutions to the public and private sectors
in the uk focusing on the health social care and
education markets
there are signiﬁcant opportunities in each of these
markets based on services that add value are
quality driven and have a strong customer
satisfaction focus in order to take advantage of
these opportunities we will continue to build on our
professional capabilities and understanding of
these markets by both increasing our specialisation
and cross selling our services across our client
base the acquisition of the locum group has
opened up a number of exciting synergies
particularly in the area of health
it is our intention to create integrated services
across our sectors to provide a complete solutions
package for the recruitment and retention of
specialist staff by our clients
sector review
health 
following the acquisition of the locum group we
are now deploying doctors and health professionals
on a nationwide basis into hospitals clinics and gp
surgeries combined with our nursing business
which chieﬂy concentrates on the market in the
south east of england we now cover the majority
of medically qualiﬁed professional disciplines 
over the past 12 months we have widened our
professional health stafﬁng portfolio further by
starting up specialist services such as optometry
and pharmacy these niche developments and the
ongoing specialisation are in line with our overall
strategy of developing value added integrated
services this strategy which has been
strengthened by the acquisition of the locum
group will put us in an increasingly strong position
in the markets in which we operate
professions allied to medicine 
turnover for the year to 30 june 2002 increased by
560 to £167m from £107m in 2001 excluding
the £24m of turnover relating to the locum group
growth was 333 within the existing reed health
group health professionals division  7 reed health group plc
“our strategy is to become the leading provider of
professional and specialist hr recruitment and
retention solutions to the public and private sectors 
in the uk focusing on the the health social care 
and education markets”
working in partnership
using the expertise of reed
nursing ashford and st peters
nhs trust will generate
savings of up to £600000
over the next two years to be
reinvested in nhs services
the initiative which assessed
the use of the trust’s nurse
bank and looked at how it
could be centralised will
beneﬁt staff patients and the
trust illustrating how private
sector experience knowledge
and skills can be used for
public beneﬁt 8 reed health group plc
this growth has been mainly in the service sectors
of therapeutic professions and we have continued
our successful strategy of adding services and
professions to our portfolio t ogether with the
locum group’s relevant divisions this business
now operates from 5 branches providing
nationwide coverage and caters for over a dozen
specialist professions such as optometrists and
chiropodists
nursing 
turnover for the year to 30 june 2002 fell marginally
by 17 from £299m to £293m reﬂecting the agreed
termination of the forest healthcare nhs trust
contract in february 2002 which had previously
generated turnover of approximately £6m per annum
we have successfully tendered for new business
in february 2002 we were awarded a service level
agreement with surrey and sussex healthcare nhs
trust and in july we were appointed sole supplier
to the newly formed central and northwest london
mental health nhs trust we have also extended
existing contracts with hammersmith hospitals
nhs trust to 2007 and parkside and newham to
october 2002 and march 2003 respectively 
work held under contract now accounts for
approximately 70 of turnover in this division down
from approximately 80 last year this change to a
higher proportion of spot placements has enabled
us to improve gross margins so the impact on gross
proﬁt of losing a high volume low margin contract
within the nursing division is minimised at the same
time we have restructured the division amalgamating
ten branches into seven to provide fewer larger
branches thus lowering the division’s cost base
having been awarded supplier status under the
ﬁrst phase of the london agency project “lap” 
in september 2001 the second phase “lap 2” is
likely to come into effect in the spring of 2003 
chief executive’s review continued 9 reed health group plc
lap 2 will regulate the pay and charge rates of
commercial agencies in respect of all nursing staff
supplied to the majority of london nhs trusts 
with nhs professionals the nhs is trying to solve
its own stafﬁng needs however it is difﬁcult to see
how one kind of provision will remedy the shortfall of
qualiﬁed and skilled workforce that currently exists
and seems only set to grow worse a degree of
impact has been felt by the company due to the
confusion over nhs professionals however there
continue to be opportunities for quality nursing
agencies particularly in london and the south east
doctors 
the doctors division which was acquired as part of
the locum group generated turnover of £13m in
the period of ownership the locum group has built
a strong reputation for the supply of medical locum
staff to nhs trusts in england wales and scotland
and operates out of 5 branches from a database of
over 6000 candidates  
since the formation of the “national contract” for
the supply of locum doctors in 1997 the locum
group has been one of only nine agencies
accredited on this contract this “national contract”
is presently being renegotiated for a further ﬁve
year extension and the result of this is expected in
october over 150 nhs trusts are currently part of
the “national contract” and we service over half of
these trusts and have preferred supplier status
with over 20 in particular we were pleased to
renew a contract with guy’s and st thomas’ private
patients unit for residential medical ofﬁcers 
market statistics
• government committed to increase signiﬁcantly the number of
consultants gp’s nurses midwives health visitors therapists and
scientists by 2008
• the wanless report indicates the healthcare workforce may have
to increase by 300000 over the next two years
• in health government spending plan will increase to £105bn by
20078
• social services and education expected to receive equally strong
commitments
• ppp expected to play an increasing role in the health industry 10 reed health group plc
chief executive’s review continued
which has been extended to may 2003 with yearly
extensions thereafter
consultancy 
we have had the opportunity to work on a number
of consultancy projects with nhs trust clients 
this has opened up new opportunities for working
in partnership with our clients and to achieve better
services for the end user we believe that the
opportunity to undertake consultancy assignments
conﬁrms our standing in the market as being a
quality provider of services
social care
the division supplies qualiﬁed and unqualiﬁed
social workers on a temporary and contract basis
mainly to local authorities and social services
across specialist services ranging from child care
to elderly care
turnover for the year to 30 june 2002 increased
from £262m to £303m an increase of 155
excluding turnover of £04m relating to the locum
group acquisition growth was 140 this was a
pleasing result particularly in the light of a 
rigorous internal restructuring programme which
took place during the second half of the year 
this has led to improved business processes
margins and cost control poorly performing
projects and supply agreements have been
terminated or renegotiated and we have put in
place the necessary operational infrastructure to
enable improved performance
a number of supply contracts were renewed in 
the year namely greenwich city council 
islington social services waltham forest social
services and birmingham bury and leeds 
social services  
the integration of the locum group’s social care
business into the reed health group’s social care
business is progressing well and should be
completed before the end of the calendar year 
in particular this integration will strengthen our
market standing in the london region we have
increased the number of our branches there from
two to three and more branch openings are
scheduled over the coming months
education
this is a new market for reed health group the
business was acquired through the locum group
acquisition and in the period to 30 june 2002
generated sales of £07m this is a market that ﬁts
the overall strategy of the group there are growing
synergies particularly between the markets of
social care and education which we are now able
to satisfy this will bring us further cross selling
opportunities across the markets this division
operates from ﬁve branches and concentrates on
the supply of temporary and permanent teachers to
primary and secondary schools overseas supply
of candidates has become successful in this
division and is expected to continue to generate
growth in this business
international
our ability to grow the business relies on our ability to
recruit and retain suitably qualiﬁed and experienced
professional staff our recruitment ofﬁces in
australia and new zealand which were acquired
as part of the locum group play an important part
in attracting suitable staff to work in the each of the
health social care and education sectors 
we are currently establishing a canadian ofﬁce to
formalise our recruitment presence there initially 11 reed health group plc
this ofﬁce will be used to supply canadian teachers
to the uk market but over time it will be expanded to
cater for the health and social care markets we
expect the ofﬁce to be operational in october 2002 
criminal records bureau
whilst the well publicised difﬁculties at the criminal
records bureau have not affected us to date the
group operates in areas where many of our
candidates need to be vetted if the problems at
the criminal records bureau continue this may
have a slight impact on our business however at
this stage the board foresees no immediate
impact on the group
summary and outlook
our ﬁrst acquisition has materially strengthened our
aim of becoming a preferred and leading supplier
of professional and specialist personnel in the
health social care and education sectors
as we continue to improve our internal structures to
increase effectiveness and efﬁciency we will continue
to improve our offers of value adding quality services
to customers to build on our position in the forefront
of recruitment and retention in our chosen markets
we will drive the business based on our organic
growth skills combined with making ﬁtting and suitable
acquisitions the year ahead is full of opportunities
to strengthen our position and move towards
realising our aim
christa echtle
chief executive
9 september 2002