wwwtribalgroupcouk
tribal group plc
8791 newman street
london wit 3ey
t 0207 323 7110
e infotribalgroupcouk
services for life
tribal group plc report and accounts 2005
tribal group plc report and accounts 2005 company information
corporate offices
tribal group plc
8791 newman street
london wit 3ey
t 0207 323 7110
tribal group plc
priory court
poulton
cirencester gl7 5jb
t 01285 886 020
company secretary
richard h collins 
registered office
165 queen victoria street
london ec4v 4dd 
stockbroker and joint 
financial adviser
dresdner kleinwort wasserstein
20 fenchurch street
london ec3p 3db
joint financial adviser
n m rothschild  sons limited
new court
st swithin’s lane
london ec4p 4du
principal bankers
bank of scotland plc
po box 208
21 prince street
bristol bs99 7jg
auditors
deloitte  touche llp
3 rivergate
temple quay
bristol bs1 6gd
solicitors
osborne clarke
2 temple back east
temple quay
bristol bs1 6eg
registrars
capita registrars
the registry
bourne house
34 beckenham road
beckenham
kent br3 4tu
financial pr consultants
the maitland consultancy
orion house
5 upper st martin’s lane
london wc2h 9ea
company’s registered number
4128850
place of incorporation
registered in england and wales
tribal is a leading uk provider of professional
support and consultancy services with a number
one position in several of our markets we help a
wide range of clients – over 2500 in the public
sector alone – improve the quality of their services
to customers many of our assignments affect and
influence how public services are run and delivered
every day
services which are essential to our wellbeing and
quality of life attractive and affordable housing
21stcentury hospital treatment quality education
for the young dignified care for the sick and 
elderly safe and clean neighbourhoods lifelong
opportunities for learning and selfimprovement
services that touch us all tribal people who come
from a variety of backgrounds – both public and
private sector have dedicated much of their
professional careers to fulfilling these expectations
our specialist teams draw on their wide experience
to offer support and solutions to complex projects
working collaboratively the sum of our knowledge
is a great strength our mission is to share and
apply this knowledge for the benefit of things that
matter services for life
contents
01 highlights of the year 
02 chairman’s statement
04 chief executive’s statement
11 review of our markets
21 corporate responsibility
22 financial review
26 board of directors
27 directors’ report
29 corporate governance
32 remuneration report
37 statement of directors’ responsibilities
38 independent auditors’ report to the 
members of tribal group plc
39 consolidated profit and loss account
40 consolidated balance sheet
41 company balance sheet
42 consolidated cash flow statement
43 consolidated statement of total recognised
gains and losses
43 reconciliation of movements in 
shareholders’ funds
44 notes to the financial statements
67 international financial reporting standards
68 five year summary
69 company information
design and production by accrue
the paper used for this report uses ecf elemental chlorine free pulps supplied by manufacturers
with environmentfriendly and sustainable reforestation policies the report has been printed using
soyabased inks and the printing process conforms to iso 14001
  l strong sales growth during the year up by 24 per cent
l successful integration into seven divisions is producing early benefits 
and greater opportunities for largescale contract wins
l reached financial close on a £214m contract to design and operate 
a regional network of independent sector treatment centres for the nhs
l secured two contracts valued at £50m from ofsted to provide school
inspections in two english regions
l committed revenue increased from £94m to £350m
tribal group plc   report and accounts 2005   01
highlights of the year
year ended 31 march 2005 2004
turnover £2295m £1857m up 24
gross revenue £1799m £1522m up 18
operating profit £224m £232m down 3
operating margins on gross revenue 124 152
profit before tax £179m £201m down 11
lossprofit on ordinary activities before taxation £02m £53m
loss on ordinary activities after taxation £56m £09m
adjusted diluted earnings per share 156p 205p down 24
operating cash flow before mercury health £175m £343m
operating profit to cash conversion 78 148
note the operating profit operating margins profit before tax and adjusted diluted earnings per share are stated before goodwill amortisation and impairment of
£166m 2004 £107m employee benefit trust credit of £02m 2004 costs of £10m and exceptional items of £17m 2004 £30m see page 39 and page 50
financial highlights
  during the year we have strengthened our position
as a leading professional support services and
consultancy business predominantly operating in
the uk public sector
we are now well positioned in all of our core
markets this year we have also moved into the
direct delivery of healthcare services through
mercury health
the group is now managed as seven divisions
consulting education technology resourcing
property communications and healthcare delivery
i am pleased to report on the results of tribal group
plc for the year ended 31 march 2005 during this
period we strengthened our position as a leading
professional support services and consultancy
business predominantly operating in the uk public
sector the group is now well positioned in its core
markets of education local government housing and
regeneration health and social care and central
government the year also saw our successful
move into the direct delivery of healthcare
services through mercury health
results
this was a challenging year for the group with
significant organisational change which as
previously indicated adversely affected margins
nevertheless we continued to deliver revenue
growth with turnover for the year up 24 per cent at
£2295m 2004 £1857m operating profit was
£224m 2004 £232m and operating margins
were 124 per cent 2004 152 per cent profit
before taxation was £179m 2004 £201m loss
after tax was £56m 2004 £09m and adjusted
diluted earnings per share were 156p 2004
205p goodwill amortisation was £166m 2004
£107m and included an impairment write down of
£52m 2004 £06m relating to a review of the
carrying value of two businesses
during the year the group generated operating
cash flow before mercury health of £175m 2004
£343m representing an operating profit to cash
conversion rate of 78 per cent net debt at the
year end was £530m representing gearing of 35
per cent with interest cover of over five times
our gross return on capital employed was 123
per cent 2004 150 per cent
 the operating profit operating margins profit before tax
and adjusted diluted earnings per share are stated before
goodwill amortisation and impairment of £166m 2004
£107m employee benefit trust credit of £02m 2004
cost of £10m and exceptional items of £17m 2004
£30m see page 39 consolidated profit and loss account
and page 50 earnings per share note
chairman’s statement
02 tribal group plc   report and accounts 2005
consulting education technology resourcing property communications delivery
central benchmarking education and executive architectural corporate social elective surgery
government learning systems resourcing services responsibility
health and consulting information interim project and cost creative services diagnostic 
social care management resourcing management services
local government inspection managed people and town interim 
and housing services performance planning management
economic training and recruitment specialist pr services
development and elearning advertising consulting
regeneration
  organisational restructuring 
during the year the group continued the process
of implementing its new corporate structure our
businesses are now managed as seven divisions
consulting education resourcing technology
property communications and healthcare delivery
the integration of businesses into this structure
has enabled us to strengthen management and
financial reporting arrangements and provide a
better focus for business development there has
been a very positive response across the group to
this reorganisation and we are already seeing the
benefits of offering an integrated package of
services across our customer base the ability to
do this will increasingly differentiate tribal from
other competitors in our markets opening up
more opportunities and creating barriers to entry
major contracts 
during the year we signed our largest contract to
date a £214m contract with the nhs to design
build and manage a regional network of treatment
centres for elective surgery and diagnostic
procedures implementation is progressing well and
the first centre is expected to open in august 2005
this contract has given mercury health the group’s
healthcare delivery business a significant market
share and places us in a strong position to bid for
the next wave of contracts which are expected to
be procured during the next 12 months
since the year end the group has announced two
contracts with a combined value of £50m with
ofsted to provide school inspection services we
are currently preferred bidders on further
significant contracts as a result of our contract
wins our committed revenue has increased to
£350m up from £94m
dividend 
the group paid a dividend of 10p per share
following the announcement of the interim results
last november the board is pleased to announce
that it is recommending a final dividend of 20p per
share making a total of 30p per share for the year
board changes 
i would like to record the board’s gratitude to
dominic collins who stood down as nonexecutive
director on 24 march 2005 and miles hunt who
retired at our last annual general meeting on 14
september 2004 both dominic and miles made
significant contributions to the group and we thank
them for their guidance and support there have
been no other board changes during the period
staff 
the group is a peoplebased business and its success
is a result of the broad base of talented
employees we would like to put on record the
thanks of the board to our 2000 employees 
at all levels their efforts have ensured that tribal
continues to be one of the most respected dynamic
and fast growing companies in its markets
prospects 
tribal is firmly established as a major supplier of
high valueadded consultancy and professional
support services to the public sector we are well
placed to take advantage of opportunities to build
and extend our service offering to increase the
level of committed revenue by successfully bidding
for longerterm contracts and to leverage our
relationships and advisory experience to develop
delivery services in our principal markets
with the reorganisation largely completed
investment in business development account
management and bidding for longterm contracts
is being increased to ensure longterm revenue
growth across the group the focus continues to
be on improving profitability margins and
operational efficiency
we are now starting to see the benefits of 
the significant investment we have made over 
the last 18 months in developing the group’s
infrastructure and in our divisional and 
central management
the group has started the year well and although
first half results will be influenced by the increased
weighting of trading to the second half and by our
continuing investment in products services and
capacity building the board is confident about the
group’s future prospects
strone macpherson
chairman
21 june 2005
tribal group plc   report and accounts 2005   03
turnover £’000
01 02 03 04 05
17465
45651
105659
185744
229470
profit before taxation 
£’000
01 02 03 04 05
1922
8077
15425
20077
17927
adjusted diluted earnings 
per share 
01 02 03 04 05
69p
142p
186p
205p
156p 04 tribal group plc   report and accounts 2005
chief executive’s statement
during the year our businesses have continued to
strengthen their service offering and have
increasingly been able to offer customers an
integrated package of services drawn from across
the group this capability alongside our excellent
relationships with public sector organisations
positively differentiates tribal from its competitors
markets 
we continue to operate in expanding markets and
to benefit from increasing government
expenditure particularly in education and health
we now work in sectors that account for over
£250bn of annual government spending
while tribal has benefited from increasing public
expenditure the main driver to our business
continues to be the growing acceptance and use
of the private sector in reforming and delivering
public services
the government’s election manifesto and
subsequent queen’s speech confirmed the
continuing and increasing use of the private sector
in public service reform particularly in education
and health in her first speech following the
election the secretary of state for health patricia
hewitt announced the procurement of £3bn of
elective surgery procedures from the private sector
through the extension of the independent sector
treatment centre istc initiative
there continue to be other major opportunities as
a result of a number of specific government
initiatives the ‘building schools for the future’
academies and hospital private finance initiative
pfi programmes together present very significant
capital investment plans until at least 2010 the
gershon review will introduce cost efficiencies
across government through improved supply chain
and business process management and lead to a
radical redesign of many services the lyons
review which recommends the relocation of
government departments and agencies to areas
outside london and the southeast is generating
the requirement for improved technology and
resourcing solutions and the children act is re
shaping education and social services departments
in the year ended 31 march 2005 94 per cent
2004 96 per cent of our revenues were from the
public sector and we expect to retain this focus in
the immediate future we are however starting to
see opportunities to increase our presence in the
private sector as we transfer and apply the skills
that we have developed in the public sector
public spending to 200708 baseline plans
200405 200506 200607 200708
£bn £bn £bn £bn
health 715 785 860 944
local government 437 462 486 510
education and skills 276 311 329 352
defence 297 308 321 334
home office
1
167 175 187 195
transport 104 110 136 129
other
2
706 759 802 838
source hm treasury
1
the home office also includes constitutional affairs and the law officers’ departments
2
‘other’ includes the office of the deputy prime minister foreign and commonwealth office international development trade and industry environment
food and rural affairs culture media and sportwork and pensions scotlandwales northern ireland executive and northern ireland office
gross revenue by division
n consulting £552m 30
n education £363m 20
n technology £344m 19
n resourcing £247m 14
n property £213m 12
n communications £100m 5
n delivery £03m 0
gross revenue by market
n education £720m 40
n health £467m 26
n local government £356m 20
n central government £151m 8
n private sector £109m 6
we operate in
sectors that
account for over
£250bn of
government
spending
  operating review 
tribal provides a range of consultancy and
professional support services and through mercury
health is moving into the delivery of public services
tribal consulting
consulting achieved revenue growth of 31 per
cent due in part to a full year contribution from
hacas which was acquired in july 2003
operating profit was down by six per cent and
operating margins were significantly lower
compared to 2004 this was in part a
consequence of organisational restructuring but
also as a result of lower utilisation rates in parts of
our healthcare practice increasing competitive
pressures in certain areas and higher associate
costs due to skill shortages particularly in the first
half of the year areas of underperformance were
addressed and margins across the division
improved in the second half of the year
we have now built one of the largest consultancy
businesses operating in the public sector with
expertise across local government housing and
regeneration health and social care and central
government generally the market for consultancy
remains buoyant and average fee rates remain firm
during the year we have continued to build our
local government practice by expanding our
regional coverage and developing our advisory
services in areas such as pfi and performance
improvement our housing and regeneration
consultancy has expanded into economic
development establishing two new teams in
edinburgh and manchester both of which have
achieved notable contract successes including
business planning for the national nuclear
academy the evaluation of hull citybuild the
city’s urban regeneration company and securing a
substantial high profile contract with english
partnerships to provide consultancy support to the
government’s firsttime buyers initiative this
business area will be further developed in 200506
our housing consultancy remains the leading
adviser to registered social landlords
tribal group plc   report and accounts 2005   05
the government’s agenda for ‘sustainable
communities’ will ensure that this remains an
expanding market for us a major contract
completed during the year was the setting up of
wakefield housing trust the largest housing stock
transfer to a single organisation
in our health and social care consultancy we
continue to be involved in groundbreaking areas
of activity including advising existing and aspirant
foundation hospital trusts continuing support for
the implementation of the nhs national
programme for it npfit developing the first
‘productive time delivery framework’ and planning
a new model for contract management to enable
gp practicebased commissioning work other
successes include the closure of our nineteenth pfi
project as corporate finance adviser membership
of winning teams on four major pfi developments
including sherwood forest and colchester and
further growth of our project support for primary
care local improvement finance trusts lift
at the end of the year we established a centre for
organisational learning as a focal point for our
hr consultancy activities the centre has already
won work with clients such as the forensic
science service hull and east yorkshire nhs trust
and merton council
in central government we have made excellent
progress having now grown to 50 consultants
from a standing start two years ago major
assignments have been won with the ministry of
defence environment agency pensions regulator
cabinet office and the foreign and commonwealth
office a number of recent wins such as a senior
management training programme within the
ministry of defence have been against
competition from the major international
consultancy groups
management processes have been strengthened
and as a result of our divisional integration exercise
all support services have been brought together in a
shared service centre that will also deliver improved
financial management arrangements
year ended year ended
31 march 2005 31 march 2004
£’000 £’000
gross revenue 55238 42130
ebita 6669 7121
ebita margin  121 169
 before goodwill and employee benefit trust costs
our businesses
have continued to
strengthen their
offering and are
increasingly able 
to offer customers
an integrated
package of services
drawn from across
the group
  we are now differentiating ourselves from most of
our competitors by agreeing three year preferred
supplier contracts for executive resourcing
services as we have done recently with
wolverhampton council we also continue to
develop new markets in the central government
and notforprofit areas
over the next year we will be launching several
new resourcing products which will extend our
range of services and will help to further increase
barriers to entry
tribal communications
within communications both gross revenue up 44
per cent and operating profit up 37 per cent
showed good growth with geronimo and tribal
mpc both making full year contributions following
their acquisition by the group in 200304
the integration of our communications businesses
in education local government and health is now
well advanced based on the consolidated fee
income of the division we have created a top ten
public relations agency as judged by pr week
criteria and are one of the top three companies
working in the £300m per annum public sector
communications market much of this work is
procured through framework arrangements we
are on all the main government frameworks
including the department of health central
office of information department for work and
pensions learning and skills council and
department for education and skills
we are currently responsible for developing and
delivering a number of public information
campaigns our contract to deliver the ukwide
‘aimhigher’ campaign which advises young people
on the benefits of going on to higher education is
worth £5m over four years we are also working
with the department for work and pensions on the
‘age positive’ and ‘age partnership’ campaigns which
promote age diversity in the workplace and the edge
employer awards for the edge foundation which
raises awareness of the value of practical learning
our communications work in local government
continues to develop we now have interim 
heads of communication in a range of public
sector bodies including the london fire 
emergency planning authority and the london
borough of tower hamlets and are running best
value communications reviews for both the
cambridgeshire constabulary and the association
of london government
06 tribal group plc   report and accounts 2005
year ended year ended
31 march 2005 31 march 2004
£’000 £’000
gross revenue 9958 6921
ebita 2382 1741
ebita margin  239 252
 before goodwill and employee benefit trust costs
tribal resourcing
resourcing achieved good levels of turnover
growth up 36 per cent to £74m with gross
revenue growth of 18 per cent in a competitive
public sector market there has been some pressure
in certain areas on consultancy fee rates and
advertising commission rates which combined
with increased investment in infrastructure has
resulted in lower operating margins 
the opportunities for our resourcing business
continue to be driven by organisational change
within our client organisations our recruitment
advertising business has continued to grow its
contractual base we now work with over 50 local
authorities and over 100 health trusts with an
additional £9m new advertising turnover secured
this financial year whilst we saw some slowdown
in advertising spend by the nhs the market in
local government and education has remained
strong during the year we won several major
local authority advertising contracts including
camden westminster and the cambridgeshire
councils’ consortium new nhs contracts with
sheffield and nottingham primary care trusts and
a new university contract with nottingham trent
our resourcing proposition has been further
developed and now includes a webbased product
‘careers for leaders’ although it is still early days
this is showing good potential and we will continue
to increase our investment in this area
we are experiencing strong growth in our
healthcare supply business where profit and
margins have increased we have recently opened
a new office in the northwest and will continue
to invest in this area in 2006
during the year we established a new interim
management business to target senior
management roles in local government and
housing this has had a successful start and will
make a good contribution in 200506 we expect
to extend this service into other tribal markets
over the next 12 months
although our executive resourcing business has
experienced challenging market conditions with
increased competition we continue to see good
levels of growth over the last 12 months we have
made over 30 chief executive appointments across
the local government and housing sectors work
that has been important in raising the group’s
profile in these markets
year ended year ended
31 march 2005 31 march 2004
£’000 £’000
gross revenue 24684 20909
ebita 5252 5406
ebita margin  213 259
 before goodwill and employee benefit trust costs
our new interim
management
business in local
government and
housing has had 
a successful start
  within the nhs and health sector we have
substantially developed our creative businesses
with new offices opening in nottingham and 
bury st edmunds
we are confident that our new integrated
management arrangements put us in a strong
position to capitalise on the growing opportunities
for pr and communications services in the public
sector we are now well placed to expand both our
capacity and geographical coverage
tribal property
property achieved revenue growth of 16 per cent
seven per cent of which was from the acquisition of
derek hicks and thew dht in november 2004
the decline in operating profit and margins was a
consequence of the significant investment made in
extending geographic coverage and in developing
capacity for capital spending programmes such as
‘building schools for the future’
our architecture business now employing close to
300 people has extended its regional network to
include exeter and liverpool we have set up our
first offshoring centre in cape town that will
provide the business with the capacity needed to
run several major public sector pfi projects in
parallel we have also now fully integrated our
education and healthcare practices our property
services business continues to grow and has
during the year extended its building surveying
operation and the regional spread of its project
management business we will continue to invest
in the growth of this business area
we are currently involved in the major capital
programmes in healthcare pfi independent sector
treatment centres istcs local improvement
finance trusts lift and procure 21 and in
education building schools for the future
academies further education colleges and higher
education institutions we have wellestablished
relationships with many of the major contractors
a number of significant contracts have been won
which underpin much of our future revenue growth
in health we have recently won work at
birmingham hospital pfi we are currently preferred
bidder on the £250m peterborough pfi hospital
project and working with mercury health are
involved in the first wave of the istc programme
extending our work in higher education we have
recently won a £40m research facility at oxford
university’s old road campus in further education
tribal group plc   report and accounts 2005   07
we have now established a leading market position
and are winning both property consultancy and
architectural work for example we have been
appointed to deliver the £40m first phase of 
the new campus for the midkent college at
chatham we are advising on the £25m campus
redevelopment at barking and within the
academies programme we have won project
management contracts in reading and leicester
increasingly there are opportunities to provide
clients in the property area with an integrated
proposition for solihull college we brought
together our property and grant funding
capability for the academies programme we
combined our education and property project
management skills
over the next few years we will be focusing on
developing new services to complement our existing
offering and extending our presence in our core
sectors whilst diversifying into related markets such
as science and higher education
tribal education
education achieved overall revenue growth of one
per cent despite the decline of our teacher training
business excluding teacher training the division’s
activities delivered organic growth of 20 per cent
and an operating margin of 18 per cent
the integration of our education services and
advisory businesses has strengthened our position
as a top five education company in april 2005 we
announced that we had won contracts worth
£50m over four years to deliver school inspection
services for ofsted these contracts which
increased our market share from 21 per cent to
approximately 30 per cent are together the largest
educational contract we have won to date we are
seeing increasing signs that we are well placed to
win other large scale contracts in education
during the year we increased investment in our
education benchmarking service extending our
product into higher as well as further education
where it has been used by over 100 colleges
during 200506 we will seek opportunities to 
take this business into other tribal markets
year ended year ended
31 march 2005 31 march 2004
£’000 £’000
gross revenue 21331 18443
ebita 2658 2819
ebita margin  125 153
 before goodwill and employee benefit trust costs
year ended year ended
31 march 2005 31 march 2004
£’000 £’000
gross revenue 36317 35884
ebita 5784 6634
ebita margin  159 185
 before goodwill and employee benefit trust costs
during the year
we have increased
investment in 
our education
benchmarking
service extending
our product into
higher as well as
further education
  we have now integrated our education software
businesses managed services activities and
information management services and systems
operations we are now the market leader in many
of our sectors providing services to over 35 per
cent of fe colleges 60 per cent of universities
over 50 per cent of local education authorities and
more than 30 per cent of workbased learning
providers
we are becoming increasingly successful at
winning contracts which incorporate our complete
service offering of technology consultancy and
managed services in particular we are making
strong headway in taking on the management of 
learning delivery
significant contracts during the year include a
£4m contract with total for information
management services a £15m contract with the
science learning centres to deliver and support an
online learning environment a £9m contract from
ufi learndirect to manage its learning centres
across the southwest and a learning and skills
council contract to manage the information
advice and guidance iag service in dorset these
wins are a direct result of investment in our
bidding capabilities and our combined service
offering as an integrated division
we are now well positioned to bid for progressively
larger contracts predominantly in the education
and skills market but also from the private sector
where there is growing demand for our information
management services
mercury health – healthcare delivery
the revenue and operating loss reported for this
division is in line with expectations reflecting the
startup nature of mercury health and the
associated business development overheads we
expensed bid costs of £17m in accordance with
uitf34 ‘precontract costs’ as an exceptional item
in december 2004 we signed a £214m contract
with the nhs to design build staff and operate a
regional network of treatment centres this
contract which runs until june 2011 was part of
the £25bn first wave of contracts procured under
the government’s independent sector treatment
centre istc initiative this was developed to seek
private sector capacity to develop treatment
centres to carry out over 250000 elective surgery
procedures per annum
08 tribal group plc   report and accounts 2005
year ended year ended
31 march 2005 31 march 2004
£’000 £’000
gross revenue 349 7
ebita 343 –
 before goodwill employee benefit trust costs and
exceptional items
our highly successful school improvement
programme ‘pupils’ champions’ which currently
provides teaching support through contracts with
the department for education and skills and local
education authorities to schools in disadvantaged
areas has been expanded to meet the needs of
the post16 sector students’ champions and the
professional development requirements of
teachers teachers’ champions all are now part
of our overall product range ‘tribal’s champions’
the market for courses and conferences for
teachers and further education lecturers which
now accounts for four per cent of our turnover
has remained difficult with funding changes and
switching priorities impacting delegate numbers
however the market for distance learning
continues to be very strong with over 100 colleges
now working with us our elearning and ‘skills for
life’ services have also been developing well with
major contracts won with the department for
education and skills learning and skills council
further education colleges and regional
development agencies
good opportunities are emerging to bring
together our property and education consultancy
expertise to support capital projects the building
schools for the future initiative will now include
primary as well as secondary schools and the
government has also announced an extension of
the academies programme in further education
sir andrew foster is undertaking a fundamental
review of the future management of colleges with
likely benefits for private sector involvement all
these will create further demand for our services
looking ahead we are confident that
opportunities will emerge for the increasing
involvement of the private sector in the delivery
of education including the opportunity in the
future to run schools and colleges
tribal technology
operating profit in technology was up 19 per cent
the two acquisitions made during the year aldcliffe
computer systems and strategic information
technology services sits contributed 16 per cent
to revenue growth
year ended year ended
31 march 2005 31 march 2004
£’000 £’000
gross revenue 34391 30457
ebita 5145 4308
ebita margin  150 141
 before goodwill employee benefit trust costs
we are becoming
increasingly
successful at
winning contracts
which incorporate
our complete
service offering 
of technology
consultancy and
managed services
  the contract provides mercury health with
guaranteed volumes and there will also be
opportunities to secure additional volumes from
both the nhs and the private sector
financing for the contract totalled £575m the
group has provided equity of £175m and secured
additional funding of £400m comprising non
recourse senior debt of £335m and equipment
lease finance of £65m
the implementation of the contract is well
advanced and the centres located in high
wycombe haywards heath portsmouth and
gillingham are scheduled to open between
summer 2005 and summer 2006 a fifth centre 
in havant is due to open in early 2008
we have made excellent progress with the
establishment of the mercury health management
team recruiting some experienced managers from
the nhs and private sector healthcare companies
as a result of this contract mercury health has a
significant share of this progressive new market
the government has already announced that there
will be further procurements commencing over the
coming months with a combined value of more
than £4bn over five years mercury health intends
to bid selectively for a number of these contracts
mercury health will be supported in these bids
and in the development of its existing business by
the hospital for special surgery one of the leading
orthopaedic hospitals in the us
we expect that the nhs market for independent
healthcare will grow very strongly over the next few
years driven in part by the move to ‘payment by
results’ we believe that mercury health is well
placed to take advantage of these developments
customers
the majority of the group’s customers continue
to be at the delegated level of government for
example in education schools colleges and
universities and in health primary care trusts
acute trusts and strategic health authorities
however we have continued to make very good
progress in developing our customer base in
central government
now that the reorganisation of our business is
completed we are increasing our investment in
business development account management and in
bidding for longerterm contracts we have
developed a bidding resource in each of our
divisions and have also increased the size of our
central teamwe are particularly targeting contract
opportunities that allow us to provide an integrated
service offering deploying skills from across the
group the major example of this has been the
mercury health contract which brought together
our consulting resourcing property and
communications services there are now many
other examples of different parts of the business
successfully working together
tribal group plc   report and accounts 2005   09
branding and profile 
from 1 april 2005 with very few exceptions
businesses across the group commenced trading
as tribal this rebranding has been received
positively by staff and customers and it will help
to raise further tribal’s profile in its markets
it will also assist by enabling us to present a 
fully integrated proposition to our customers
growth 
during the financial year we announced three
acquisitions sits a student administration
software business in the higher education market
aldcliffe a trainee administration software
business in the workbased learning market and
dht a healthcare architectural practice based in
liverpool these businesses are now integrated
into our technology and property divisions
respectively and are all performing ahead of our
expectations the acquisitions made in the year
cost an aggregate initial consideration of £160m
paid for by a combination of cash and shares
deferred consideration of up to £59m is payable
in respect of these acquisitions principally in
shares based on increases in operating profits
at the year end our total estimated earnout
liability in respect of the period to 31 march 2007
was £218m of which we expect to pay £143m 
in 200506 and £75m in 200607 although 
these liabilities are primarily to be satisfied in
shares the group always retains sufficient
headroom in its banking facilities to finance 
the remaining earnouts in cash as previously
announced in a number of cases we have already
crystallised earnout payments in order to
facilitate our integration process
while we do still consider there to be interesting
consolidation opportunities in our markets we are
currently focused on delivering organic growth
through increasing headcount developing new
services and winning new contracts
over the year the businesses owned for two full
years or more have increased headcount by 
12 per cent and demonstrated underlying organic
revenue growth of five per cent we have
continued to broaden and strengthen our
management teams with an increasing number of
high quality senior managers joining us from
major support services and consultancy
competitors we have adopted a very proactive
approach to the recruitment of consultants and
senior managers
we have won several
major contracts
which demonstrate
the potential of the
tribal business model
we are now in a
strong position to
take advantage of the
many opportunities in
our markets
  10 tribal group plc   report and accounts 2005
we are seeing an acceleration of crossselling
with many examples of the group providing our
customers with an integrated package of services
from across the business our five sector service
groups education health and social care local
government and housing regeneration and central
government are now well established and are
becoming more influential in developing the
group’s strategy marketing approach and brand
profile in their respective markets the operational
head office in london and the network of regional
hub offices are making a significant contribution
to joint working as well as enabling us to
consolidate our office network reducing the number
of individual locations over the next two years
management 
the group is now managed through a divisional
structure we are confident that the benefits of
integration have been achieved whilst retaining
much of our entrepreneurial culture
we have now appointed divisional ceos to lead
each of the seven divisionswe are starting to see
benefits from cost efficiencies brand leverage
shared best practice enhanced recruitment and staff
development initiatives and from shared services
provided from the group’s eight hub offices
the group’s executive management board
consisting of divisional ceos and other key group
directors is responsible for the strategic and
operational management of tribal assessing
investment priorities and managing the group’s
risk profile
people 
we are a business that relies on the quality and
commitment of our people and our success is due
to the hard work and professional integrity of our
management and employees across the group we
have created a culture in which individuals at all
levels are given a high degree of autonomy within
a supportive group framework we have
established a clear set of values which encourage
entrepreneurialism profit focus and a dynamic
culture within a strong ethos of customer service
integrity and social awareness our staff believe
they are making a substantial contribution to
improving public services and to the lives of those
affected by those services
we have exceptionally talented individuals
amongst our middle and senior management
teams many of our directors are nationally
leading figures in their specialist areas we will
continue to recruit ambitious and talented
individuals who will contribute to the growth of
the business these will be from a variety of
backgrounds both public and private sectors
in october 2004 we launched the second tribal
management development programme in
conjunction with henley management college
in the last two years 50 individuals have attended
we will continue to invest further in the
development of our senior managers and staff
during 200506
tribal is committed to positive and proactive
communications with our employees we have
embraced the ‘information and consultation rights’
directive and introduced elected staff forums which
are currently being rolledout across the business
during the year we have also introduced an
independent and confidential counselling service for
our staff and are currently reviewing our employee
assistance programme to ensure it is delivering a
valuable service in a range of areas
we are grateful to staff at all levels of the
company for their effort throughout the year and
for their contribution to our continuing success
prospects 
we have now completed our organisational 
restructuring and are well advanced with our
integration process we have won several major
contracts which demonstrate the potential of the
tribal business model the group is now in a
strong position to take advantage of the many
opportunities arising in its key markets
henry j pitman
chief executive
21 june 2005
  tribal group plc   report and accounts 2005   11
review of our markets
we continue to operate in expanding markets and
to benefit from increasing government expenditure
particularly in education and health currently
94 per cent of our revenues are generated by sales
in the public sector
outsourcing generally continues to be a
dominant activity in the uk in the public sector
alone an additional £20bn worth of services are
likely to be contracted out to external suppliers in
the next three years this means that by 200607
about £67bn worth of services are likely to be
managed in this way compared with just under
£45bn this year
the increasing use by the public sector of external
consultancy and support services is unlikely simply
to be a shortterm consequence of the recent
focus on modernisation of and investment in
public services but part of a gradual and overall
trend which is unlikely to be reversed
1
the increased emphasis on service improvement
efficiency gains and new technology are all
opportunities for us to help provide additional
support we are well placed to respond to recent
service delivery trends while still offering more
traditional forms of consultancy we now have the
critical mass and multidisciplinary expertise to
respond to complex and largerscale opportunities
across our markets particularly for managed
services and direct delivery
 public financenelson hall 2005
1999 2000 2001 2002 2003 2004
n private    n public
1
market analysis
“while the recent increases in public sector expenditure on consultancy activities are substantial
they are not out of line with trends in the private sector from comparing the rates of growth in
private and public sector consulting over the past 16 years it is clear that the private sector saw
a surge in demand for consulting in the 1990s a surge that has been replicated in the public
sector since 2003
this suggests that recent rises in the expenditure on consulting in the public sector rather than being
a shortterm repercussion of the government’s focus on improving the quality of public services are
part of an underlying shift in which organisations across the economy increasingly collaborate with
external suppliers the public sector is simply following the lead of the private sector”
source the uk consulting industry mca 2005
2509
3337
3783
4138
4531
4712
567
384
562
605
1279
1865
comparing reported consultancy fee income generated
by the private and public sectors 19992004 £m
  12 tribal group plc   report and accounts 2005
health and social care
the largest single area of current government
investment is in the health service which is
experiencing an unprecedented level of growth
one in ten of the working population is employed
in the uk health and social care sectors
throughout the health service the continuing
focus is on patientled services and the
modernisation of all aspects of delivery as the
leading consultancy in the health and social care
sector we are continuing to advise and support
hospital and primary care trusts strategic health
authorities and the department of health on a
wide range of strategic and delivery issues we
work with the majority of nhs trusts and
strategic health authorities
ambitious targets to reduce waiting times for
elective surgery means that by 2010 15 per cent
of all nonemergency surgery will be carried out
by private providers under the independent sector
treatment centre programme this is a major
growth area for our healthcare delivery business
which has secured a £214m contract to design
and operate a regional network of centres in the
southeast this represents a significant market
share and ensures that we are well placed for the
second stage of procurement worth another £3bn
over five years
the nhs national programme for it
we are working on a wide range of
projects for the national programme
for it including providing extensive
national level support to the
development both of the planned
online appointments system
‘choose and book’ and the nhs
care records service at the local
level we are working with strategic
health authorities nhs and primary
care trusts to help them develop
local implementation strategies and
provide related support
good hope hospital nhs trust
following our selection as a
management partner for poorly
performing nhs trusts in england
we are the first private company to
have been appointed as franchise
managers of a hospital trust we
are currently midway through our
three year franchising contract with
good hope hospital nhs trust in
sutton coldfield the trust has now
achieved a one star rating up from
a zero star the year before and
“significant improvements in
several areas” according to the
healthcare commission
the increasing use of the independent sector for
nonemergency surgery and diagnostic treatment
presents a major opportunity for our healthcare
delivery business mercury health
one of our mri magnetic resonance imaging mobile units will be used at our mercury health
treatment centre in high wycombe due to open later this year
  tribal group plc   report and accounts 2005   13
our architectural practice is the recognised european leader 
for the design of healthcare facilities and has wellestablished
relationships with the major contractors and consortia active
in the private finance initiative
by 2010 40 per cent of the nhs estate will be
less than 15 years old and will include 100 new
hospitals most of them constructed under the
framework of the private finance initiative pfi
with about £65bn of capital value yet to be
invested – or about twothirds of the overall
projected cost – the outlook for construction in
the health sector remains very positive our
architectural practice is the recognised european
leader for design of healthcare facilities and has
wellestablished relationships with the major
contractors and consortia active in pfi
we are also offering design and project
management services to primary care trusts in
colchester hampshire and liverpool under the
lift local improvement finance trusts joint
ventures which have been set up to provide new
or upgraded primary care facilities to date lift
has absorbed about £200m out of a total of £1bn
so the programme will continue to provide
substantial longterm opportunities
peterborough hospital pfi 
our architectural practice is part of
the winning consortium selected to
design and build peterborough’s
new £250m acute hospital and
mental health unit on the edith
cavell site together with an
integrated care centre in the heart
of the city our successful design
has a number of highly innovative
features including our crossshaped
‘cruciform’ bed layouts in multibed
areas which we are also using in pfi
developments in guernsey and
colchester this pioneering and
unique design manipulates the
existing space differently giving
patients an additional bedtobed
distance of 15 metres more than
the nhs requirement this is an
important step towards resolving
many of the crossinfection issues
common in multibed areas
department of health
we have secured one of the three
‘pathfinder hub’ contracts to support
the introduction of collaborative
purchasing arrangements across the
nhs we are currently working with
the shropshire and staffordshire
collaborative procurement hub to
deliver over £4m of savings by the
end of 2005
the nhs national programme for it worth over
£6bn is the largest it transformation project in
europe aiming to standardise systems for clinical
services and communications infrastructure
throughout the health service in england
investment will be spread over several years and
will continue to generate the need for substantial
external support tribal has been involved in a
consultancy capacity from the early stages of this
initiative
we have a strong track record in nhs recruitment
particularly in recruitment advertising and
executive search and have established a new
interim resourcing business we are a market
leader for the supply of allied health professionals
to the nhs
our winning design for the peterborough hospital pfi project includes our unique design for multibed areas
developed to help reduce crossinfection
  we have been providing inspection
services for ofsted since 1996 and
are now the largest of the five
providers in england
education and training
continuing investment is planned for primary and
secondary schools further education and the
broader learning and skills sector over £12bn of
additional expenditure has been allocated over the
next three years the majority of these resources
will be focused on raising standards and improving
infrastructure our services are designed to offer
additional capacity and specialist consultancy or
technical skills
the building schools for the future initiative is 
one of the country’s largest ever investment
programmes in education it envisages the
rebuilding or renovating of every school in england
over the next 15 years and offers the private
sector the opportunity to engage in largescale
and longterm partnerships with local education
authorities our integrated capacity offering a
deep and wide knowledge base across education
consultancy it and property services means that
we are now viewed by the department for
education and skills dfes and other customers as
one of the major providers in this sector we are
currently on four of seven dfes framework
agreements for this programme
we are also actively involved with the academies
initiative our property division working in
association with our education division is an
approved supplier of overall project management
construction project management and design
services with the planned construction of over
200 academies by 2010 we look forward to
making a significant contribution
14 tribal group plc   report and accounts 2005
department for education and skills 
following on from the success of
our school improvement programme
‘pupils’ champions’ in the london
boroughs of greenwich and
richmond we have been awarded a
£21m contract by the department
for education and skills to work
with selected schools to raise the
attainment standards of pupils in
years 6 9 and 11 ‘pupils’ champions’
combines specialist teaching
academic mentoring and revision
programmes we now have over 120
consultants working on the project
leicester academy
the samworth enterprise academy
will offer a ‘throughschool’
education to 316 year olds a
specialist curriculum and stateof
theart facilities and building design
as project managers we will be
offering our combined property and
educational expertise and working
closely with the dfes and co
sponsors david samworth and the
church of england diocese of
leicester to drive the concept
forwardwe are also acting as overall
project manager on academies in
bristol readingwestminster and
southwark and as construction
project manager in hackney
we work with 90 per cent of further education colleges 80 per cent of secondary schools 50 per cent
of local education authorities and the majority of learning and skills councils the focus on lifelong and personalised learning
continues to present a range of opportunities for
our elearning and technology businesses
tribal group plc   report and accounts 2005   15
the further education sector is also undergoing a
transformation through a combination of increased
investment and fundamental reform both the
foster review and the learning and skills council
‘agenda for change’ will present substantial new
opportunities for our consultancy businesses
the focus on standards and efficiency has
established a climate in which our consultancy
inspection and benchmarking services can thrive
we are now the largest provider of ofsted
inspection services in england and the market
leader for benchmarking in the post16 and adult
learning sector
there are clear signs that the government intends
to increase the role and involvement of the private
sector in the direct provision of educational
services the academies initiative gives an
indication of this but much wider involvement in
the management of schools and colleges is likely
to be encouraged our three year contract with
swindon borough council to manage its education
service has led to a greatly improved ofsted re
inspection rating and is one very successful
example of how our educational expertise could
be used more widely
the focus on lifelong and personalised learning
continues to present a range of opportunities for
our elearning and technology businesses the
department for education and skills’ £4bn ‘skills
for life’ programme – basic literacy numeracy and
language – continues to be a central component
of the government’s national skills strategy we
have market leadership in this area
sector skills councils 
we are working with ten of the new
sector skills councils the dfes and
four learning and skills council
regions to target potential learners
in key regional employment sectors
our innovative range of resources
over 50 products in all including
text messaging tests mobile phone
games and scratchcards are
designed to help employees improve
their literacy and numeracy skills
ofsted 
we have been awarded two four year
ofsted contracts to inspect schools
in two english regions the south
west and the west midlands
representing a third of the overall
total tribal has been providing
inspection services for ofsted since
1996 and is now the largest of the
five providers in england
learndirect 
in april 2004 we were selected as 
a regional ‘hub operator’ for
learndirect the £92m contract
covers dorset somerset devon and
cornwall an area in which 14000
learners are enrolled at over 50
centres learndirect is the largest 
elearning service in the world and
tribal has been supporting its
development over a number 
of years
our flagship basic skills software product target skills is now used in 400 of the
450 further education colleges in the uk and is being taken up by an increasing
number of other clients including nhs trusts and workbased training providers
  local government
the highest level of fee income recorded for
consulting services in the public sector during
2004 was from local government ahead of 
both health and central government change
management turnaround programmes and the
implementation of the gershon efficiency review
all remain key drivers
we have been supporting local government for 20
years and work with over 75 per cent of local
authorities to provide additional capacity and
technical skills across a range of disciplines
including social services housing environmental
services leisure regeneration libraries and
corporate services
service redesign has been prompted by a number
of policy reviews the need for substantial
efficiency savings the comprehensive
performance assessment cpa inspection regime
and legislation such as the recent children act
stipulating the need for increased joint
departmental working these developments all
present continuing opportunities for our
consulting and resourcing businesses
the local authority sector spends in excess of
£120m on recruitment advertising and executive
search and selection per annum as the largest
resourcing consultancy in local government we
will continue to extend our market presence
compliance with the freedom of information act
and the requirement to achieve electronic delivery
of an increasing number of services are growth
areas for our technology division our
management systems are used in 170 local
authorities and we are working closely with many
councils to support the transition to integrated
children’s services departments by providing 
ict solutions for information sharing and
management planning
 the uk consulting industry mca 2005
16 tribal group plc   report and accounts 2005
hertfordshire county council 
the £10m five year contract to
provide advertising recruitment
services was won in partnership with
manpower the council employs over
18000 staff and the contract covers
all staff vacancies from cleaners to
senior executives in the first year of
the contract we have launched the
highly successful and awardwinning
‘hertfordshire heroes’ campaign the
aim of which was to present careers
in social care more positively in
order to attract a wider selection 
of candidates
city and county of swansea 
we undertook an hr and
organisational review on behalf of
the authority culminating in the
development of a future strategy
and supported its implementation
“this was a critical piece of work for
the authority” said its assistant chief
executive “swansea’s hr service now
has a clear strategic direction and is
well placed to meet the challenging
agenda ahead the involvement of
tribal resourcing was invaluable”
association of london government
we have been appointed by the
association of london government
alg to carry out a best value
review of its communications and
public affairs division the results 
of the review will assist the alg to
set priorities for the division and
ensure that it is properly equipped 
to communicate successfully on
behalf of 33 london boroughs and
other partners
we are the largest resourcing consultancy in local government over 50 local authorities are using our
recruitment advertising services housing and regeneration
tribal group plc   report and accounts 2005   17
housing remains high on the political agenda we
are the uk’s leading specialist consultancy for
local authority housing departments social
housing organisations and regeneration
partnerships rationalisation of stock and the
transfer of homes from local authority ownership
to registered social landlords continues we are
providing advice to many uk local authorities
involved in stock transfers regeneration and asset
management initiatives
the government’s sustainable communities plan
sets out a blueprint to create regenerated
communities and deliver neighbourhood renewal in
response to the government regeneration agenda
we have set up tribal urban futures to bring
together our expertise in this area we are already
managing over 20 regeneration programmes funded
by the single regeneration budget working with a
third of all the new deal for communities
programmes across the country and supporting the
development of local strategic partnerships in the
london boroughs of newham and lambeth
we have market leadership in the area of interim
management and recruitment of housing and
regeneration staff our consultancy specialising in
identifying and securing uk and european funding
opportunities for economic and community
regeneration projects is well established
english partnerships 
we have recently been selected to
join the consultancy panel for
english partnerships the
government’s national regeneration
agency we have also now secured
the first contract procured through
the panel arrangement consultancy
support to the ‘first time buyers
initiative’ ftbi which aims to
remove barriers to home ownership
and increase the supply of
affordable homes
city of edinburgh council 
we have been appointed as lead
consultants for edinburgh’s
ambitious community ownership
project ‘better homes for edinburgh’
the initiative will generate a total of
around £2bn of public and private
investment for the city’s affordable
housing stock over the next ten
years it is the largest and most
complex stock transfer and
regeneration project in scotland
we are the uk’s leading specialist consultancy for local authority housing
departments social housing organisations and regeneration partnerships
we have a proven track record in developing and delivering regeneration programmes and have managed over 20 projects
funded by the single regeneration budget including a major town centre redevelopment in stratford london
  18 tribal group plc   report and accounts 2005
central government
central government remains under increasing
pressure to reengineer services and release
funding to frontline delivery egovernment joined
up services and the planning of largescale it
projects many of which are still in the pipeline
with implementation cycles of several years
represent a major challenge for key government
departments policy reviews will continue to trigger
a shakeup of services the gershon efficiency
review and the lyons review have set challenging
targets for service transformation both will
continue to generate substantial opportunities for
our consultancy it and hr businesses
we work with all of the key spending departments
and national agencies to support service
modernisation and crossdepartmental
programmes we provide a range of information
and it services to central government and as an
accredited member of the scat framework the
governmentsponsored list of preferred suppliers
our services are easy to procure and quality
assured our consultants are being used to help
develop implement and measure the success of
policy initiatives as well as to provide additional
capacity where inhouse shortages exist
our communications division is an acknowledged
specialist in central government public information
and pr campaigns and is currently involved in a
number of high profile contracts for the department
for education and skills the department for work
and pensions and the foreign and commonwealth
office pr and communications is a growth area
for the public sector
department for education and 
skills and the royal bank 
of scotland group
we are delivering a four year
communications campaign for the
department for education and skills
aimhigher programme providing
information to young people aged
1318 on the benefits of higher
education with a particular
emphasis on reaching people from
communities and backgrounds with
no history of going on to university
our roadshows visit 3000 young
people in england every week and
take place on stateoftheart mobile
trailers with an informative and fast
paced presentation evaluation has
shown this method is highly
effective shifting attitudes towards
higher education by 64 per cent
ministry of defence mod
we are currently delivering resource
and performance management
training to senior military staff and
civil servants across the mod the
training programme based around
classroom teaching with online
support will be delivered over the
next five years in association with
henley management college
resource management courses 
are also being run at the home
office for both financial and non
financial managers
home office
we are working with the home
office’s immigration and
naturalisation directorate on a
major data management initiative
the assignment involves building a
corporate file plan and introducing
best practice electronic records
management erm throughout 
the directorate
we are currently involved in a number of government information campaigns including the ‘aimhigher’
programme for the department for education and skills
  tribal group plc   report and accounts 2005   19
private sector
outsourcing of noncore activities continues to 
be the major driver for our private sector work
particularly in business processing and information
and data management
organisations are increasingly looking for expert
providers to take over the running of their records
and information management services in order to
improve performance and efficiency our library 
and information management business is well
established and we provide onsite and outsourced
solutions to companies across a range of industries
including the energy construction leisure
automotive and transport sectors we also provide
these clients and other public and private sector
organisations with both interim and permanent
staff through our recruitment consultancy service
our private sector resourcing portfolio both in
executive search and recruitment advertising is
expanding based on a strong trackrecord across
the public sector we are securing and retaining
work from a range of private sector organisations
including securicor and tnt we are also finding
our public sector expertise is helping us secure
private to public sector recruitment assignments
we design and support management information
and learner tracking systems for over 300 work
based learning providers and corporate inhouse
training departments
we have a strong private sector client base for our
property advice particularly in surveying and town
planning where we have longterm relationships
with a wide range of commercial clients including
woolworths halfords dixons stores group
canada life royal london and center parcs
we also deliver asset management solutions for
major property and construction companies
ranging from consultants and third party building
and facilities management contractors to those
managing their assets inhouse
securicor
we have been securicor’s executive
search recruitment partner since
2003 and in the last year have helped
the company recruit ten directors for
its operations throughout europe
center parcs 
we have been advising center parcs
on the planning and development of
its forest holiday villages since 1990
as town planners with a reputation
for both sensitive and complex
planning applications we are
currently advising the company on 
its £165m planned development of 
a fifth forest holiday village on
bedford estate land in bedfordshire
total
in december 2004 we were
selected as information
management partner to french oil
company total in a contract worth
£4m over five years we will be
responsible for ensuring that the
company meets its objective of
delivering an integrated information
management service from its
aberdeen headquarters
we have been advising center parcs on the planning and development of its leisure resorts since 1990
  20 tribal group plc   report and accounts 2005
corporate offices 
london
cirencester
regional offices 
birmingham
bristol
edinburgh
leeds
london
manchester
nottingham
sheffield
local offices 
bath
beaconsfield
belfast
birmingham
blackburn
blaenavon
brighton
bury st edmunds
cambridge
cardiff
chester
chislehurst
coventry
dartford
dublin
ellesmere
exeter
frodsham
glasgow
glasshoughton
harwell
hessle
lancaster
liverpool
london
loughborough
manchester
newport
norwich
plymouth
reading
rochdale
southampton
st albans
st ives
stafford
stirling
tadcaster
taunton
wakefield
wimborne
our business centres
the majority of our 2000 staff
are based at one of our regional
hub offices around the uk tribal group plc   report and accounts 2005   21
corporate responsibility
our cr framework
this year we set up a corporate responsibility cr
working party to establish a cr framework this
will form a baseline against which we will measure
our performance in a number of areas
the framework is required to be compatible with
the overall corporate strategy of the group the
working party will present its preliminary
conclusions to the executive board by the end of
2005 and will report on the progress of the
framework in next year’s annual report
our baseline framework contains a number of
principles which encapsulate our own approach to
cr and cover all the key material issues for the
group the working party agreed the framework
should cover six areas customers staff the
community the environment shareholders and
suppliers we have already made significant
progress in a number of these areas and some
parts of the group are well advanced in terms of
best practice
the ftse4good index
the ftse4good index was established in 2001 as
a tool for socially responsible investors sri to
identify companies that meet globally recognised
corporate responsibility standards for inclusion
eligible companies must meet stringent criteria in
three areas
l working towards environmental sustainability
l developing positive relationships with 
stakeholders
l upholding and supporting universal 
human rights
tribal has been included in the ftse4good index
for the third consecutive year
tribal group foundation
the tribal group foundation was registered as a
charity in august 2003 its charitable objectives
are to advance health both physical and mental
and education and training both in the uk and
the developing world in the last financial year our
principal donation funding of £40000 has been
to our nominated charity skillshare international
this successful partnership will be continued
during 200506 in order to raise additional funds
for the foundation a payrollgiving scheme will be
launched by the end of 2005 this will give staff
the opportunity to make taxefficient donations
either to the foundation’s nominated charity or to
any other charities of their choice
skillshare international
skillshare international has been
supporting skills development
programmes in africa and asia since
the end of the first world war its
projects are always determined by
locally identified needs and are run
and managed by local people in
partnership with skilled overseas
volunteers the majority of funding
for these programmes is supplied by
the department for international
development in the uk and the
european commission tribal is
currently supporting two projects
one in south africa and the other 
in southern india
the first provides basic skills
education for adults with
disabilities in the region of
kwazulunatal which has the
highest number of people with
physical disabilities in south africa
many of these people have received
no schooling and have encountered
many barriers to work and training
a key objective of the project is to
change attitudes as well as develop
skills and sustainable employment
the second project supports
community health initiatives in four
states in southern india these
programmes have had a vast impact
since they began in 1998 in one
project three skillshare
international volunteers have
provided community health training
to over 200 individuals in 203
villages during this period infant
and maternal mortality have been
dramatically reduced in another
similar project 99 per cent
immunisation against malaria 
has been achieved
as a result of our sponsorship of
these projects substantial matched
funding has 
been secured from the european
commission 22 tribal group plc   report and accounts 2005
financial review
this financial review analyses the performance of tribal group
in the financial year ended 31 march 2005 it also explains
other aspects of the group’s results and operations including
our financial objectives and risk management
2005 2004 change
£’000 £’000 
turnover gross earnings 229470 185744 235
gross revenue 179857 152221 182
operating profit 4239 8398
goodwill amortisation and impairment 16636 10690
employee benefit trust creditcosts 244 1025
exceptional items 1747 3040
adjusted underlying ebita 22378 23153 33
net interest 4451 3076 447
adjusted underlying profit before tax 17927 20077 107
adjusted underlying effective tax rate 300 308
adjusted underlying earnings per share 156p 205p 239
 before goodwill amortisation employee benefit trust costs and exceptional items see notes 6 and 10
group trading summary group sales performance
0
50
100
150
200
250
2001  2002  2003  2004  2005
total sales
£m
tribal group has seven divisional businesses and the segmental analysis is shown below
division gross revenue adjusted underlying
ebita
2005 2004 2005 2004
£’000 £’000 £’000 £’000
communications 9958 6921 2382 1741
consulting 55238 42130 6669 7121
education 36317 35884 5784 6634
property 21331 18443 2658 2819
resourcing 24684 20909 5252 5406
technology 34391 30457 5145 4308
mercury health 349 7 343 –
central and bid costs – – 5169 4876
inter segment sales 2411 2530 – –
total 179857 152221 22378 23153
our compound sales growth over the
last four years has been 190 per cent
the operating performance of each division is discussed in the chief executive’s statement
  the exceptional items of £17m 2004 £30m
mainly relate to bid costs on the nhs independent
sector treatment centres istc contract which was
awarded in december 2004 the group
consistently applies uitf 34 ‘precontract costs’
and only capitalises bid costs from the point at
which it becomes virtually certain that costs will
be recovered at 31 march 2005 capitalised costs
for the istc contract were £76m
seasonality the group trading continues to be
seasonally weighted towards the second half of
the year
we expect our profit seasonality to be more
pronounced in 200506 due to mercury health’s
istc contract start date anticipated bid costs for
the wave 2 programme investment in headcount
in h1 and a higher interest cost due to the
increase in group debt
group interest and tax net interest payable for
the year increased by 45 per cent to £45m 2004
£31m reflecting the increase in the group’s net
debt position we invested £77m into mercury
health to fund the implementation and
mobilisation of the istc contract
tax on operating profit before goodwill
amortisation ebt costs and exceptional items has
been charged at an effective tax rate of 300 per
cent 2004 308 per cent the charge for the
current year prudently assumes no tax relief on
the istc contract whereas we intend to build this
business into a major healthcare delivery partner
to the nhs with multiple contracts
tribal group plc  report and accounts 2005   23
0
20
40
60
80
100
2001  2002  2003  2004  2005
gross revenue h1   gross revenue h2
2001  2002  2003  2004  2005
0
20
40
60
80
100
2001  2002  2003  2004  2005
gross revenue h1   gross revenue h2
0
20
40
60
80
100
2001  2002  2003  2004  2005 2001  2002  2003  2004  2005
profit h1    profit h2
seasonality of revenues

seasonality of profits

financial objectives
we have now completed our restructuring into 
six trading divisions plus mercury health and
strengthened management and financial controls
looking forward we will focus on organic growth
strong cash generation maintaining high margins
earnings growth and return on capital
group performance 
group turnover increased by 24 per cent to
£2295m 2004 £1857m turnover from
continuing operations increased by 19 per cent 
to £2210m 2004 £1857m
our primary measure of sales is gross revenue net
of pass through agency costs relating to recruitment
advertising costs gross revenue increased by 18 per
cent to £1799m 2004 £1522m
gross revenue for businesses owned on a like
forlike basis for two or more years grew by 
50 per cent
adjusted underlying ebita decreased by 33 per
cent to £224m 2004 £232m due to the
significant level of organisational change this
restructuring added cost to the group split
between redundancy costs of £07m and
investment costs of £20m including £04m 
of operating costs to setup mercury health
this impacted the overall group operating margins
which reduced from 152 per cent to 124 per cent
the goodwill amortisation charge increased from
£107m to £166m due to the four acquisitions
made in the year plus an impairment write down
of £52m relating to a review of the carrying value
of certain assets
the graphs below demonstrate
our seasonality
  24 tribal group plc   report and accounts 2005
all current earnouts will be determined by 31
march 2007 leaving a small number of minority
interests in startup companies
cash management after a disappointing h1 
cash conversion of just 24 per cent due to the
unwinding of our exceptional 200304
performance cash conversion for the full year
before the mercury health investment was
78 per cent 2004 148 per cent
cumulative cash conversion over the four years to
march 2005 was 105 per cent 2004 107 per cent
the graph below illustrates the rolling 12 month
cash conversion and the cumulative cash conversion
free cash flow defined as operating cash flow less
interest and taxation was £29m 2004 £199m
capital expenditure in the year was £31m 2004
£34m for the core group and a net £27m
invested in mercury health
group net debt increased from £379m to £530m
after investing £77m in mercury health including
bid costs and £79m for acquisitions we have
ringfenced a further £100m from our cash and
bank facilities to invest into the istc contract
after allowing for contingent deferred
consideration of £12m the group has only used
51 per cent of available facilities
a new nonrecourse outside of group bank
covenants senior debt facility of £335m has been
secured from our bank syndicate to fund the
construction of the treatment facilities as part of
the istc contract funds will be drawn down over
the next two financial years this debt will be fully
consolidated on to the group’s balance sheet
cash conversion
40
60
80
100
120
140
160
180
mar01
sep01
sep02
mar03
sep03
mar04
sep04
mar05
mar02
cumulative cash conversion since march 2001 
rolling 12 month cash conversion
the loss on ordinary activities after taxation was
£56m 2004 loss of £09m
shareholder returns and dividends underlying
adjusted diluted earnings per share excluding
goodwill ebt costs and exceptional items
decreased by 24 per cent to 156p 2004 205p
due to the decline in profitability and the rise in
diluted weighted average number of shares by 
17 per cent to 785m 2004 672m
the board has proposed a final dividend of 2p
2004 2p giving a total dividend for the year of
3p 2004 3p our dividend is covered 52 times
by adjusted earnings per share
shareholders’ funds before minority interests
decreased by £66m this was due to the higher
goodwill amortisation and impairment charge
as a result our return on shareholder funds
based on adjusted pbt was 120 per cent 2004
129 per cent
acquisitions and startups we made four
acquisitions during the year for a combined initial
consideration of £160m of which £11m was
satisfied by debt further consideration of up to
£59m is payable to the vendors based on future
profit growth
the combined acquisitions contributed £84m to
gross revenue and £23m to ebita
we also started up a number of new businesses
which delivered breakeven profits for the year but
we expect a positive contribution in 200506
outstanding deferred consideration the
estimated deferred consideration payable as 
at 31 march 2005 was £165m payable in shares
and £16m in loan notescash
during q1 of 200506 the group is accelerating
certain earnouts and acquiring minority share
interests to limit further dilution and to accelerate
divisional integration the cost of £84m is included
in the total below of £218m
following these transactions the estimated
deferred consideration payable is as follows
of the £164m shares to be issued £87m are
included in the weighted average number of
diluted shares as part of the adjusted diluted 
eps for 200405 see note 10
200506 200607 total
£’000 £’000 £’000
shares 9800 6600 16400
loan notescash 4500 900 5400
total 14300 7500 21800
  tribal group plc   report and accounts 2005   25
our gearing at 31 march 2005 was 35 per cent
2004 24 per cent
posttax return on capital employed decreased
to 123 per cent from 150 per cent last year this
compares to our weighted average cost of capital
of 87 per cent
the forward order book of the group as at 21
june has increased by 272 per cent to £350m
compared to £94m at the start of last year
mercury health’s istc contract accounts for
£214m of this total
financial risks and treasury management the
main financial risks faced by the group relate to
the availability of funds to meet business needs
credit risk arising from customer defaults and
fluctuations in interest rates
these risks are managed as described below
funding the group finances its operations by a
combination of cash reserves from retained
profits bank borrowings and leases our policy is
to maintain sufficient headroom in undrawn
committed bank facilities and banking covenants
the group is funded by a £100m revolving credit
facility until 29 may 2007 and a working capital
facility of £6m with four major uk banks
treasury management is led by group finance and
operates within policies and procedures approved
and reviewed by the board
credit risk the objective is to reduce the risk of
bad debts arising from nonpayment from our
customers this risk is tightly managed across the
group led by the group finance team we incurred
no material bad debts during the year due to the
strong relationships with our customers debtor
days outstanding was 46 days 2004 45 days and
our age profile of older debts significantly improved
interest rate risk the group’s policy is to
minimise interest charges forward rate agreements
and interest rate swaps are used to achieve the
desired mix of fixed and floating rate debt at the
year end £40m 75 per cent of net debt was at a
fixed rate as detailed in note 29 the balance of our
net debt is in floating rate form
the nonrecourse mercury health facility of
£335m is fully hedged over the term
the average rate of interest paid during the year
was 64 per cent 2004 53 per cent
international financial reporting standards
‘ifrs’ all european union listed companies are
required to prepare their consolidated financial
statements in accordance with ifrs for accounting
periods beginning on or after 1 january 2005 the
group will therefore adopt ifrs for the first time for
the financial year ending 31 march 2006 and the
first set of accounts under ifrs will be our interim
results for the half year to 30 september 2005
a project team has been working with deloitte 
touche llp performing a high level review of the
difference between ifrs and our current
accounting practices and we are now quantifying
the financial impacts of convergence with ifrs we
are also looking at the wider implementation
aspects including how we will communicate the
changes resulting from ifrs
based on our work to date the major areas of
impact on the net profit and shareholders’ funds
are expected to be due to differences in accounting
for sharebased payments business combinations
pensions deferred tax and goodwill amortisation
the presentation of our financial statements and
note disclosures will also be affected
other information additional financial and non
financial information including press releases and
year end presentations can be accessed on our
website wwwtribalgroupcouk
simon m lawton
group finance director
21 june 2005
26
28
30
32
34
36
38
2002 2003 2004 2005
30
28
29
36
committed income at start of each financial year 
as  of projected gross revenue
  26 tribal group plc   report and accounts 2005
board of directors
 the appointment of a chief executive to our property division is still to be announced the chief executive of our health delivery division peter martin is a member of our main board
peter j martin 47
executive director and
chief executive of
mercury health
peter martin joined tribal
group in june 2001 as
corporate development
director he became chief
executive of mercury health
in april 2004 peter was
formerly a founding partner
of corporate finance firm
anvil partners and prior to
that a director of the
corporate finance division 
of kleinwort benson limited
john simpson 53
chief executive
tribal education 
karen harris 36
chief executive
tribal communications
david chevins 52
chief executive
tribal consulting
julie towers 39
chief executive
tribal resourcing
jim chambers 51
chief executive
tribal technology
divisional chief executives
main board
p strone s macpherson 56
nonexecutive chairman
strone macpherson was
appointed as an independent
nonexecutive chairman of
tribal group in march 2004
he was formerly executive
deputy chairman of misys
plc which he joined in 1989
after 15 years at flemings
he is currently a non
executive director of axa uk
plc and close brothers
group plc and a member of
the investment committee
and of the general council
of the king’s fund
henry j pitman 42
chief executive
henry pitman founded tribal
group in september 1999
he was formerly managing
director of jhp group
limited a uk vocational
training and business
services company which he
joined in 1995 prior to this
he worked for the property
corporation of south africa
from 1990 to 1995
simon m lawton fca 44
group finance director
simon lawton joined tribal
group in march 2000 he
was formerly director of
finance at securicor
electronics limited a
subsidiary of securicor
group plc and before that
finance director of dawes
group limited simon
originally qualified at kpmg
where he became a senior
manager in audit and
advisory services
timothy e p stevenson obe 57
nonexecutive director
tim stevenson joined tribal
group as a nonexecutive
director in may 2004 and is
chairman of the remuneration
committee and senior
independent director tim
worked for burmah castrol
group plc from 1975 until 2000
latterly as group chief executive
he is currently chairman of
travis perkins plc and a director
of national express group he
was formerly a director of the
dfes and partnerships uk plc
david g f thompson 50
nonexecutive director
david thompson joined
tribal group in march 2004
and is chairman of the audit
committee he is chairman
of the wolverhampton 
dudley breweries plc which
he joined in 1977 chairman
of the income and growth
trust plc and a non
executive director of
caledonia investments plc
and jpmorgan fleming
smaller companies
investment trust plc
sheila m forbes cbe 58
nonexecutive director
sheila forbes joined tribal
group in may 2004 as a non
executive director since
1996 she has held a number
of nonexecutive positions
including lloyds tsb group
plc and the british library
having previously served as
group personnel director at
storehouse plc and then
director of human resources
at reed elsevier plc
  the directors have pleasure in presenting their annual report on the affairs of the group together with audited consolidated financial statements and
independent auditors’ report for the year ended 31 march 2005
principal activities
tribal group plc is a holding company with a number of trading subsidiaries
the principal activities of the group are the provision of a broad range of consultancy and professional support services the majority of our
customers are in the uk public sector predominantly within education health and social care local government housing and regeneration and central
government we work with 80 per cent of secondary schools 50 per cent of local education authorities 75 per cent of local authorities 90 per cent of
further education colleges and 75 per cent of nhs trusts
our services are delivered in the areas of management consulting technology resourcing property education and communications we also have a
healthcare delivery business
business review
a detailed review of the group’s performance and likely future developments is provided within the chief executive’s statement
results
the results of the group are shown on page 39 and show a decrease of 3 per cent in group operating profit before goodwill amortisation employee
benefit trust costs and exceptional items from £232m to £224m group profit before tax has decreased from £53m to a loss of £02m and the
adjusted diluted earnings per share has decreased by 24 per cent to 156p note 10
proposed dividend
the directors recommend a final dividend of 20p per share which together with the interim dividend of 10p paid on 14 january 2005 makes a total
of 30p for the year 2004 30p
the final dividend will be paid on 14 october 2005 to shareholders on the register on 23 september 2005
research and development
the group continues to invest in research and development this has resulted in a number of new products being launched recently which are
expected to contribute to the growth of the business
employment policies
we are a people business we seek to attract develop and retain high calibre staff – and as a consequence our customers can be assured that the
service they receive is among the best available
we have exceptionally talented individuals amongst our middle and senior management teams many of whom are leading figures in their 
specialist areas
it is our policy to provide an environment in which individual talents can excel the directors encourage employee involvement with wide share
ownership and participation in share option schemes
tribal group are committed to positive and proactive communications with our employees we have embraced the information and consultation
rights directive and introduced elected staff forums which are being rolled out across the business
employees are kept informed of the performance of the group and all matters affecting them as employees by means of regular briefings the group’s
internal magazine published three times per year and the inhouse managed group intranet and internet web sites
we have a counselling service in place for our staff to ensure they have access to a support network outside the business and we are currently
reviewing our whole employee assistance programme to ensure it is delivering a valuable service to our staff across a range of areas
we are introducing a group wide induction programme which will bring together all new starters across the divisions to foster their knowledge of the
group its values and strategy and to create effective networks within our business to maximise our capability to deliver enhanced services
the group is an equal opportunities employer and bases all decisions on individual ability regardless of race religion gender sexual orientation
age or disability
applications for employment by disabled persons will always be fully considered having regard to their particular aptitudes and abilities should any
employee become disabled every practical effort is made to provide continued employment depending on their skills and abilities they enjoy the
same career prospects and scope for realising their potential as other employees appropriate training is arranged for disabled persons including
retraining for alternative work for employees who become disabled to promote their career development within the organisation
tribal group plc   report and accounts 2005   27
directors’ report
  directors’ report continued
supplier payment policy
the group does not follow any specified code or standard on payment practice however it is the group’s policy to negotiate terms with its suppliers
and to ensure that they are aware of the terms of payment when business is agreed it is the group’s policy to make prompt payment to those
suppliers meeting their obligations
the group year end trade creditors represented approximately 43 days 2004 45 days
substantial shareholdings
as at 17 june 2005 the company had been notified of the following interests in 3 per cent or more of its issued share capital excluding directors
ordinary shares of 5p each 
caledonia investments plc 5061232 672
mirabaud investment management limited 3876829 514
special business at the annual general meeting
a separate document accompanying the annual report and accounts 2005 contains the notice convening the annual general meeting and an
explanation of the special business to be conducted at that meeting
environmental
the group is committed to ensuring its operations have a minimal environmental impact and to the maintenance of continual assessments and
awareness of its environmental responsibilities
a number of initiatives and projects are currently in progress including waste minimisation reuse and recycling of products wherever practicable
energy efficiency and conservation
the group has a clearly documented policy that is promoted throughout the organisation and regularly reviewed
health and safety 
the group is conscious of the importance of providing a safe working environment for both its employees and its customers and to comply with
current legislation each company in the group has a health and safety representative who is regularly trained and provides basic induction training to
new staff on health and safety issues the group has comprehensive health and safety policies procedures and documentation that are regularly
reviewed and updated in line with statutory obligations
political and charitable contributions
the group remains committed to support local development community education training and health that relate to the group’s activities the
group made charitable donations during the year of £44160 2004 £35866 there were no political contributions
the group has established a registered charity called the tribal group foundation which received £30000 of the above donations the objectives and
charitable purpose have been determined in consultation with employees and include promoting sustainable development overseas by sharing and
developing skills and encouraging organisational best practice plus supporting any specific charitable activities in which our employees are involved
auditors
a resolution for the reappointment of deloitte  touche llp as auditors of the company is to be proposed at the forthcoming annual 
general meeting
on behalf of the board
richard h collins
company secretary 165 queen victoria street
21 june 2005 london
ec4v 4dd
registered number 4128850
28 tribal group plc   report and accounts 2005
  tribal group plc   report and accounts 2005   29
corporate governance
introduction
tribal group plc is committed to achieving high standards of corporate governance integrity and business ethics the group supports the principles of
good corporate governance and code of best practice appended to the listing rules of the financial services authority the ‘combined code’ in july
2003 the financial reporting council published the ‘frc 2003 combined code’ which has been applicable to the group in the year under review
the remainder of this report sets out how the group applied the frc 2003 combined code during the year
compliance with the code of best practice
the group has complied throughout the year with the code provisions set out in section 1 of the frc 2003 combined code on corporate
governance with the exception of provision b23 the aggregate remuneration of nonexecutive directors has exceeded the limit in the company’s
articles of association a resolution to increase this limit is to be proposed at the 2005 annual general meeting
board of directors 
the board currently comprises seven directors sheila forbes simon lawton strone macpherson nonexecutive chairman peter martin henry
pitman tim stevenson and david thompson excluding the chairman the board comprises three nonexecutive and three executive directors in the
year under review dominic collins resigned as a nonexecutive director and tim stevenson agreed to act in his place as senior independent director
miles hunt retired as a nonexecutive director at the 2004 annual general meeting the terms and conditions of nonexecutive directors are available
for inspection on request from the company secretary the directors’ profiles are set out on page 26
the board believes that all the nonexecutive directors are independent david thompson is also an independent nonexecutive director of caledonia
investments plc which has become a significant shareholder in the group this connection between the group and one of its current shareholders
does not affect the director’s objectivity particularly as he is independent of executive decisionmaking processes at both companies all of the non
executive directors bring a wide range of experience to the board including building large and midcap public company businesses handson
operational cvs strategy and human resources the chairman has other significant time commitments as indicated in his profile these have not
changed materially during the year and they do not affect his ability to devote sufficient time to the company’s activities the senior independent
nonexecutive director is tim stevenson who is also chairman of the remuneration committee david thompson is chairman of the audit
committee and has the relevant experience to chair this committee as required by the combined code the nonexecutive directors and chairman
are initially appointed for a threeyear term
the board exercises full and effective control over the group the board maintains a formal schedule of matters reserved for the board’s decision and
its responsibilities include strategy and management of performance acquisitions capital expenditure and safeguarding the group’s assets the actual
results of the group and a summary of operating company performance are reported to all members of the board executive members of the board
meet formally with divisional and subsidiary management monthly to review business performance and to discuss operational and strategic issues
key points from these meetings are discussed at group board meetings
a procedure exists for the board of directors in the furtherance of their duties to take independent professional advice if necessary at the 
company’s expense all directors have access to the advice and services of the company secretary who is responsible to the board for ensuring 
agreed procedures rules and regulations are observed richard collins an experienced public company secretary and a qualified solicitor was
appointed in november 2004
on appointment and throughout their tenure directors receive appropriate training
the roles of the chairman and chief executive are separate and clearly defined
information is provided to the board on a timely basis in advance of each board meeting directors receive a board pack including detailed monthly
management accounts proposed acquisitions a corporate governance update and major capital expenditure requests
all directors are appointed by the board as a whole following recommendations from the nomination committee and each director submits himself
for reelection at least every three years none of the executive directors has a service contract greater than 12 months
during the year under review a performance evaluation of the board its committees and its individual directors was conducted by means of a
combination of written and oral processes under the control of the chairman and facilitated by the company secretary the senior independent
director with input from the other directors evaluated the chairman’s performance
board committees
the board has established three committees to deal with matters in accordance with written terms of reference they are an audit committee a
nomination committee and a remuneration committee the chairmen of the board committees will be available to answer questions at the annual
general meeting
audit committee
the audit committee meets at least twice each year the committee is chaired by david thompson current members comprise sheila forbes and tim
stevenson the group finance director also attends all meetings the committee monitors the effectiveness of internal financial controls and considers
matters relating to accounting financial reporting accounting policies business risks and the external audit to do this it receives and considers
  corporate governance continued
30 tribal group plc   report and accounts 2005
written and oral reports from company officers the group finance director and the auditors procedures to correct weaknesses identified in these
reports are put in place by the group finance director and reviewed at subsequent meetings the audit committee holds discussions with the auditors
without the group finance director present at least once a year the audit committee considers annually the need for an internal audit function it
currently believes that the group is not of sufficient size or complexity to obtain value from such a function at this stage in order to safeguard
auditor objectivity and independence the committee keeps these matters under review and also reviews the cost effectiveness of the external
auditors and the nature of the nonaudit services provided by them
nomination committee
the nomination committee is chaired by strone macpherson and current members comprise sheila forbes henry pitman tim stevenson and david
thompson the committee deals with appointments to the board monitors potential conflicts of interest and reviews annually the independence of
the nonexecutive directors the committee is responsible for proposing candidates for appointment to the board having regard to the balance and
structure of the board suitable candidates for nonexecutive roles have in the past been identified by use of external recruitment consultancies and
the committee would expect to use a similar process in the future
remuneration committee
the remuneration committee is chaired by tim stevenson and current members comprise sheila forbes and david thompson
the committee meets at least twice a year and on behalf of the board sets the remuneration packages for the directors including basic salary
bonuses and other compensation payments the committee ratifies policy and framework proposals made by executive directors in respect of the
remuneration for senior executives within the group the committee also ratifies any share option nominations under the various share option
schemes of the group including any grants to the executive directors
the committee is assisted by the company secretary and the group hr director and the remuneration report is set out on pages 32 to 37
attendance at board and committee meetings
boardcommittee name board audit nomination remuneration notes
number of meetings in year 6 2 2 7
number of meetings attended by members
strone macpherson 6 na 2 na chairman of board and
nomination committee
henry pitman 6 na 2 na executive chief executive
simon lawton 6 na na na executive group finance
director
peter martin 6 na na na executive directorceo of
mercury health
sheila forbes 5 2 2 7 non executive director
appointed 25 may 2004
tim stevenson 5 2 2 7 non executive director
chairman of remuneration
committee 
appointed 25 may 2004
david thompson 6 2 2 6 non executive director
chairman of audit
committee 
dominic collins 4 na 1 1 non executive director
resigned 24 march 2005
miles hunt 2 1 na 1 non executive director
resigned 14 september 2004
 note excludes unscheduled or purely administrative meetings
executive management board
during the last year the group established a newly appointed executive management board following the restructuring of the business into six
divisions excluding mercury health the executive management board comprise the executive directors the divisional chief executives the group
business development director the group hr director and group company secretary this board meets every month and has responsibility to set
communicate and monitor the application of policies procedures and standards in areas including operations bid activities finance legal commercial
and regulatory compliance human resources and health and safety information technology and security property management corporate social
responsibility and the environment the executive management board met five times last year
  tribal group plc   report and accounts 2005   31
maintenance of a sound system of internal control
the directors undertake a semiannual review of the effectiveness of the group’s system of internal controls using a common strategic 
risk framework
the group’s assessment includes a review of the major financial and nonfinancial risks to the business and the corresponding internal controls the
output is continuously reviewed by the executive directors and executive management board to enhance further the internal control and risk
management culture of the group throughout its subsidiaries clear responsibilities have been allocated for key risk areas such as acquisitions
treasury capital expenditure insurance and information technology other risks fall within the scope of the audit remuneration and nomination
committees as appropriate no potential issues warranting disclosure in the accounts have been identified
the executive directors and executive management board will review these action plans on a regular basis to ensure that the plans for improvement
are being implemented and that the outputs of the strategic risk assessments remain relevant to the group a review will be carried out and an action
plan prepared for all new acquisitions as part of the integration process the action plans and their ongoing review form a process for identifying
evaluating and managing risks faced by the group such a process has been in place for the year under review and up to the date of approval of the
audited financial statements and conforms to the requirements of the turnbull guidance
review of effectiveness of internal control
the directors are responsible for the group’s system of internal control and for reviewing its effectiveness such a system is designed to manage
rather than eliminate the risk of failure to achieve business objectives in establishing and reviewing the system of internal control the directors have
regard to the materiality of relevant risks the likelihood of a loss being incurred and the costs of control it follows that the system of internal control
can only provide reasonable and not absolute assurance against the risk of material misstatement or loss
in addition to the process of assessment of internal control and the monitoring of the effectiveness of internal financial control by the audit
committee explained above the process used by the board to review the effectiveness of the system of internal controls includes the following
control environment
the directors are committed to maintaining a controlconscious culture across the group whilst allowing divisional and subsidiary companies
sufficient autonomy to manage and develop their businesses this is communicated to all employees by way of regular management briefings training
and mentoring an organisational structure is in place within which the business can be planned controlled and monitored this structure includes
appropriate delegation of authority physical controls and procedures such as authorisation limits and segregation of duties the divisional and
operating companies’ chief executives and managing directors regularly review their responsibilities and compliance with the group’s policies and
procedures the group operates a quarterly letter of representation reporting framework for divisional and operating companies’ chief
executivesmanaging directors and finance directorscontrollers to assess and report on the adequacy of internal financial controls and completeness
and accuracy of the management accounts
financial reporting
there is a comprehensive system of financial reporting to the board based on an annual budget prepared in line with the group’s strategic plan and
formally adopted by the board quarterly rolling forecasts and monthly reporting of financial and operating results budgets and plans are prepared at
the individual business unit level and summarised at the divisional and group level key operational performance indicators including weekly cash flow
forecasts and daily cash balances are continuously monitored by the executive and divisional directors
group procedures manual
responsibility levels are communicated throughout the group as part of the group procedures manual which sets out delegation of authority and
authorisation levels and other control procedures together with accounting and reporting procedures the manual is updated regularly to take account
of new accounting standards performance criteria operational effectiveness investment returns and other regulatory requirements all senior finance
professionals are provided with training and guidance to ensure that the current and future needs of the group are met
shareholder relations
the chief executive and group finance director are the group’s principal spokesmen with investors analysts fund managers the press and other
interested parties access is available to the chairman andor the senior independent director and other nonexecutive directors if this is required
the full board is kept informed about shareholder relations and in particular the senior independent director is kept informed of the views of major
shareholders this is done by a combination of reports to the board on meetings held and feedback to the board from the group’s financial pr and
other advisers the group holds briefing meetings with analysts and institutional shareholders usually following the interim and final results
announcements to ensure that the investing community receives a balanced and complete view of the group’s performance and the issues faced by
the business the group reports formally to all shareholders twice a year when its half year and full year results are announced these results and all
other stock exchange announcement information is available on the group’s website the annual general meeting is attended by all directors and
private investors are encouraged to participate in the meeting
going concern
after making enquiries the directors have formed a judgement that there is a reasonable expectation that the group has adequate resources to
continue in operational existence for the foreseeable future for this reason the directors continue to adopt the going concern basis in preparing the
financial statements introduction
the remuneration report has been prepared in accordance with the directors’ remuneration report regulations 2002 the report also meets the
relevant requirements of the listing rules of the financial services authority and describes how the board has applied the principles of good
governance relating to directors’ remuneration as required by the regulations a resolution to approve the report will be proposed at the annual
general meeting of the company at which the financial statements will be approved
the regulations require the auditors to report to the company’s members on the ‘auditable part’ of the remuneration report the report has therefore
been divided into separate sections for audited and unaudited information
information not subject to audit
composition and terms of reference
the committee is currently comprised of three independent nonexecutive directors sheila forbes david thompson and tim stevenson chairman it
operates in accordance with written terms of reference which are determined by the board and take account of best practice and the requirements of
the combined code the terms of reference will be available at the annual general meeting
advisers to the remuneration committee
the committee commissioned from new bridge street consultants an independent review of executive remuneration and in the light of this the
salaries of executive directors for the year under review were adjusted to be in line with median market rates during the year the committee has also
received advice from new bridge street consultants on the structure of new share scheme and bonus arrangements the committee expects to
implement changes as a result of this work during the current financial year
remuneration policy
the key objective of the group’s policy on executive directors’ remuneration is that the overall package should be sufficiently competitive to attract
retain and motivate high quality executives to achieve the group’s business objectives and reward them for enhancing shareholder value
the package consists of basic salary benefits share options performance related bonuses and pension contributions in line with the group’s growth
strategy a significant proportion of the package is based on performance and dependent upon the achievement of growth in adjusted diluted earnings
per share
the group has a range of share incentive plans in place to provide the necessary mechanisms for employees and executive directors to participate in
the long term success of the group
the committee believes that the schemes align the interests of key staff with those of shareholders
nonexecutive directors
the fees for nonexecutive directors are determined by the board and are reviewed periodically they do not participate in any bonus scheme share
option scheme pension scheme or receive any other benefits
executive directors
a summary of each element of the executive directors’ remuneration is set out below
basic salaries and benefits 
basic salaries and benefits are determined by reference to market levels for similar jobs in comparable companies based on independent surveys
salaries are reviewed annually at the start of each financial year and when an individual changes position or responsibility
benefits normally a car allowance pension permanent health cover private medical insurance and a death in service benefit of four times salary are
set at a comparable level with those granted to executives at a similar level in like companies
performance related bonuses
bonus entitlement is a contractual calculation set out in each director’s service agreement and is based on the growth in the group’s adjusted diluted
earnings per share but in all cases subject to the overriding discretion of the remuneration committee the terms are reviewed and determined
annually the threshold earnings per share target is adjusted each year to the audited figure disclosed in note 10 bonus payments are made if the
threshold target is exceeded subject to a fixed maximum of 75 per cent of individual’s basic salary bonus payments do not form part of salary for
pension purposes
in addition to any contractual bonus entitlement the committee has the discretion to make ad hoc bonus payments on such terms and subject to
such performance or other targets as it sees fit typically an ad hoc bonus payment could be made to reflect exceptional performance
the committee is currently reviewing the bonus arrangements for divisional directors and other key employees
any bonus payments are detailed in the remuneration report on page 35 in respect of the year under review no contractual bonus payments were
made to directors due to the reduction in adjusted diluted earnings per share the committee agreed to pay an ad hoc bonus to peter martin to
reflect the successful winning and implementation by mercury health of its independent treatment centre contract
32 tribal group plc   report and accounts 2005
remuneration report
  executive directors’ service contracts
it is group policy to fix notice periods for executive directors for a period of no more than 12 months the committee believes that the entitlement
of directors to the security of 12 months notice of termination of employment is in line with practice in many comparable companies
copies of each director’s service agreement will be available for inspection at the annual general meeting
the committee aims always to deal fairly with cases of termination whilst attempting to limit compensation the service agreements currently do
not make allowance for specific amounts of compensation in the event of early termination of contracts in order to enable the committee to respond
appropriately to particular circumstances the committee will continue to review the appropriateness of this practice
details of service agreements and notice periods are as follows
expiry notice period notice period
effective date retirement for company for directors
name of director of contract date months months
h j pitman 08022001 ongoing 12 12
s m lawton 08022001 ongoing 12 12
p j martin 25062001 ongoing 12 12
nonexecutive directors’ contracts
nonexecutive directors have a threemonth notice period and no compensation or other benefits are payable details of their agreements and notice
periods are as follows
expiry notice period notice period
effective date retirement for company for directors
name of director of contract date months months
s m forbes 25052004 2007 agm 3 3
p s s macpherson 10032004 2007 agm 3 3
t e p stevenson 25052004 2007 agm 3 3
d g f thompson 22032004 2007 agm 3 3
current share incentive schemes
the group currently operates five share incentive schemes two employee share option schemes ‘option schemes’ a long term incentive plan ‘ltip’
an executive equity participation plan ‘eepp’ and a savings related share option scheme ‘saye’ the executive schemes were established to provide
a continuing incentive for executive directors and selected key employees
a employee share option schemes
there are two share option schemes the tribal group plc employee share option scheme ‘the plc scheme’ and the tribal holdings limited
employee share option scheme ‘the limited scheme’ the limited scheme was used to grant options prior to admission on aim options can no
longer be granted under the limited scheme
at the discretion of the committee grants are normally made under the option schemes on an annual basis such grants are subject to scheme
limits and in particular there is a cap of £30000 on the market value of tax approved options both the option schemes contain an inland
revenue approved and unapproved part
the exercise of options granted under the option schemes is conditional on the annual growth in adjusted diluted earnings per share exceeding
the rise in the retail prices index rpi 8 per cent compound over the twoyear period from grant options commence vesting after the
publication of results interim and finals at an equal amount 124th over a further twoyear period options are exercisable in one tranche
between four and ten years from the later of the date of grant and the results announcement date
b ltip
the plan was designed to provide an incentive for selected executive directors and senior key employees
two changes to the plan were effected in 2003 following approval at that year’s annual general meeting the total length of the award period
was reduced from five years to four years and participants are able to acquire free loyalty shares
awards from 19 september 2003 under the ltip will be comprised of two elements
i a nil cost option over ordinary shares referred to as ‘performance shares’ which participants will be able to acquire on a fully vested basis at
the end of a threeyear performance period subject to satisfying the performance targets
tribal group plc   report and accounts 2005   33 remuneration report continued
the performance target is linked to the growth in adjusted diluted earnings per share exceeding the annual growth in the rpi over the three
year period from grant for awards granted to date vesting will be on a straight line basis with zero per cent if the annual adjusted diluted
earnings per share growth is less than rpi 10 per cent compound up to 100 per cent if the annual adjusted diluted earnings per share
growth is equal to rpi 20 per cent compound or more and
ii a nil cost option over additional ordinary shares referred to as ‘loyalty shares’ which participants will be able to acquire at the end of a
holding period of one year subject to remaining in employment
the number of loyalty shares that can be awarded to any participant will be 25 per cent of the number of performance shares which vest in
favour of each participant at the end of the performance period
the committee is currently reviewing the suitability of previously used performance targets for future ltip awards and is considering making
new ltip awards
c executive equity participation plan
the group adopted the eepp at the 2003 annual general meeting following extensive consultation with our major institutional shareholders and
pirc the committee incorporated an underpin total shareholder return ‘tsr’ threshold as part of the performance targets
senior executives are invited by the committee to contribute investment shares into the eepp which are held in the company’s existing employee
share ownership trust ‘esot’ a participant may contribute up to a maximum of 300 per cent of basic salary over a threeyear period subject
to an annual limit of 200 per cent of basic salary in any one year
the committee matches the participant’s investment shares by awarding nil cost options over matching shares the maximum number of
matching shares that can be awarded by the committee is limited to six times the number of investment shares contributed by a participant
awards of matching shares to participants are subject to two performance targets
i a tsr hurdle test – the company’s tsr performance over a threeyear period must exceed the median tsr position of other companies in the
ftse support services sector tsr is defined as the return shareholders would receive if they hold a notional number of shares and receive
dividends on those shares over the three year performance period it measures growth in the company’s share price together with the value
of any dividends paid assuming the dividends are reinvested into the company’s shares and
ii the level of growth in the adjusted headline diluted earnings per share plus rpi over the threeyear period 075 of a matching share for every
investment share occurs when the annual growth in adjusted earnings per share exceeds 75 per cent compound  rpi over three years the
maximum award of six matching shares occurs when the growth in adjusted earnings per share exceeds 30 per cent compound  rpi over the
three year period
no matching shares are awarded unless the tsr hurdle test has been met
all participants in the eepp intend to withdraw their investment shares from the esot if this happens there will be no shares that are subject to
the eepp as part of a wider review of remuneration and incentivisation arrangements the committee is reviewing the future role of the eepp and
is considering granting new ltip awards to each participant within the next six months
d saye and sip
the group’s saye scheme is open to all employees and full time directors who have been in continuous service for such minimum period as
determined by the committee eligible employees may save up to £250 per month under a three year saye contract and then apply the savings
to buy new shares in the company
the option price for previous grants has been set at 20 per cent below the market value at the date of grant however there was no discounted
option price for the saye contracts entered into in january 2005 and participation had to be scaled back because of pressures on available shares
for use by the scheme in the light of these pressures the committee has decided that there may be limited future saye contracts during the
year the committee has reviewed the position as regards all employee share schemes and the company wishes to establish a new allemployee
share incentive plan ‘sip’ a resolution to establish a sip will be put to the 2005 annual general meeting
34 tribal group plc   report and accounts 2005
  tribal group plc   report and accounts 2005   35
performance graph
the following graph compares the value of an investment of £100 in tribal shares with an investment in the ftse all share index and the ftse
support services index over three years since the group’s flotation on 23 february 2001
the committee believes that this comparison provides a clear picture of how well the company has performed relative to both a wide range of
companies in the uk and also a specific group of companies in the same sector
a £100 investment in tribal shares on 23 february 2001 would be worth £60 compared to £97 for an investment in the ftse all share index or £69
for an investment in the ftse support services index as at 31 march 2005
information subject to audit
directors’ remuneration
the remuneration of individual directors was as follows
salary performance pension 2005 2004
or fees related bonus benefits costs total total
£’000 £’000 £’000 £’000 £’000 £’000
chairman
p s s macpherson 100 – – – 100 8
d m telling resigned 26 september 2003 – – – – – 7
executive directors
h j pitman 270 – 11 32 313 277
s m lawton 175 – 10 21 206 242
p j martin 175 100 10 21 306 242
nonexecutive directors
a d j b collins resigned 24 march 2005 20 – – – 20 15
s m forbes 21 – – – 21 –
m w r hunt resigned 14 september 2004 6 – – – 6 12
w roots resigned 19 september 2003 – – – – – 6
t e p stevenson 30 – – – 30 –
d g f thompson 35 – – – 35 –
aggregate emoluments 832 100 31 74 1037 809
in september 2004 the board agreed that peter martin could accept an appointment as a nonexecutive director of win plc and that he should be
allowed to retain the director’s fees paid to him by win plc which during the year under review were £11667
160
150
140
130
120
110
100
90
80
70
60
50
40
feb01
may01
aug01
nov01
feb02
may02
aug02
nov02
feb03
may03
aug03
nov03
feb04
may04
aug04
nov04
feb05
tribal                          ftse all share                          ftse support services remuneration report continued
the interests of directors in share options were as follows
exercise date from
at 31 march at 31 march price which expiry
2004 granted exercised 2005 £ exercisable date
h j pitman
eepp 447510 – – 447510 £nil 30062006 18112013
saye scheme 4567 – – 4567 £208 01122004 01062005
saye scheme – 3289 – 3289 £144 01022008 01082008
s m lawton
limited scheme 18744 – – 18744 £133 30062003 23012011
plc scheme 45444 – – 45444 £165 30062003 07022011
ltip 90909 – – 90909 £nil 07022006 07082006
eepp 372924 – – 372924 £nil 30062006 18112013
saye scheme 3653 – – 3653 £208 01122004 01062005
saye scheme 945 – – 945 £200 01022006 01082006
p j martin
plc scheme 40000 – – 40000 £283 30062003 26062011
ltip 60000 – – 60000 £nil 26062006 26122006
eepp 372924 – – 372924 £nil 30062006 18112013
saye scheme 4567 – – 4567 £208 01122004 01062005
there have been no variations to the terms and conditions or performance criteria for share options during the financial year the ltip awards relate
to a fiveyear period and do not qualify for any loyalty shares as the awards were granted prior to the changes passed at the annual general meeting
on 19 september 2003
options granted under the saye schemes are not subject to performance criteria all saye options marked with an asterisk  above lapsed on 
1 june 2005
the performance criteria as detailed on page 33 have been met for the limited scheme and the plc scheme as far as these awards relate to simon
lawton and peter martin these options vest at a rate of 124th per month from july 2003
the performance period for the ltip shares is the three years ended 31 march 2004 and the performance criteria for these options have also been
met the market value of tribal group plc shares at the date of grant was £165 and £280 for the ltip awards granted to simon lawton and peter
martin respectively
options granted under the eepp scheme are subject to the performance criteria set out on page 34 the market value of tribal group plc shares at the
date of grant was £362 for the eepp awards granted to each executive director since the year end all three executive directors have stated their
intention to withdraw their investment shares from the esot and when this happens all the eepp options will lapse
the market value of the company’s shares at the year end was £141 the highest market value during the year was £231 and the lowest market
value £1175
directors’ interest in shares of tribal group plc 
the directors who held office at the end of the financial year had the following interests in the shares of the company according to the register of
directors’ interests
interest interest at
at end of start of
year year
h j pitman 11691871 11691871
s m lawton 570000 570000
p j martin 345164 345164
 of these 1200000 ordinary shares are held by his wife and 811760 ordinary shares by the trustees of the henry pitman 2001 accumulation and
maintenance trust
36 tribal group plc   report and accounts 2005
  as at the end of the year the following directors had an interest in the ‘c’ ordinary shares of tribal technology limited a 7661 owned subsidiary
undertaking s m lawton 7488 shares 2004 7488 shares and p j martin 7488 shares 2004 7488 shares during the year both directors received
a dividend of £801
since the year end the company has agreed to acquire all of the shares of tribal technology limited not already owned by it including the ‘c’ shares
held by s m lawton and p j martin details of this transaction are set out in note 32 the sale of the ‘c’ shares by s m lawton and p j martin is
conditional upon shareholder approval at the 2005 annual general meeting and resolutions to this effect are included in the notice of the meeting
directors’ retirement benefits
all of the executive directors’ pension arrangements are of the defined contribution type no pension arrangements are provided for nonexecutive
directors
during the year the company made employer contributions of 12 per cent of basic salary into the company’s defined contribution scheme or
equivalent personal pension plan
approval
this report was approved by the board of directors on 21 june 2005 and signed on its behalf by
timothy e p stevenson obe
chairman remuneration committee
statement of directors’ responsibilities
united kingdom company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the
state of affairs of the company and group as at the end of the financial year and of the profit or loss of the group for that period in preparing those
financial statements the directors are required to
l select suitable accounting policies and then apply them consistently
l make judgements and estimates that are reasonable and prudent and
l state whether applicable accounting standards have been followed subject to any material departures disclosed and explained in the 
financial statements
the directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the
company and the group and to enable them to ensure that the financial statements comply with the companies act 1985 they are also responsible
for the system of internal control for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention
and detection of fraud and 
other irregularities
tribal group plc   report and accounts 2005   37 we have audited the financial statements of tribal group plc for the year ended 31 march 2005 which comprise the consolidated profit and loss
account the balance sheets the consolidated cash flow statement consolidated statement of total recognised gains and losses and the related notes
1 to 33 together with the reconciliation of net cash flow to movement in net debt and the reconciliation of movements in shareholders’ funds these
financial statements have been prepared under the accounting policies set out therein we have also audited the information in the part of the
directors’ remuneration report that is described as having been audited
this report is made solely to the company’s members as a body in accordance with section 235 of the companies act 1985 our audit work has
been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditors’ report and for no
other purpose to the fullest extent permitted by law we do not accept or assume responsibility to anyone other than the company and the
company’s members as a body for our audit work for this report or for the opinions we have formed
respective responsibilities of directors and auditors
as described in the statement of directors’ responsibilities the company’s directors are responsible for the preparation of the financial statements in
accordance with applicable united kingdom law and accounting standards they are also responsible for the preparation of the other information
contained in the annual report including the directors’ remuneration report our responsibility is to audit the financial statements and the part of the
directors’ remuneration report described as having been audited in accordance with relevant united kingdom legal and regulatory requirements and
auditing standards
we report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements and the part of
the directors’ remuneration report described as having been audited have been properly prepared in accordance with the companies act 1985 we
also report to you if in our opinion the directors’ report is not consistent with the financial statements if the company has not kept proper
accounting records if we have not received all the information and explanations we require for our audit or if information specified by law regarding
directors’ remuneration and transactions with the company and other members of the group is not disclosed
we review whether the corporate governance statement reflects the company’s compliance with the nine provisions of the july 2003 frc combined
code specified for our review by the listing rules of the financial services authority and we report if it does not we are not required to consider
whether the board’s statements on internal control cover all risks and controls or form an opinion on the effectiveness of the group’s corporate
governance procedures or its risk and control procedures
we read the directors’ report and the other information contained in the annual report for the above year as described in the contents section
including the unaudited part of the directors’ remuneration report and consider the implications for our report if we become aware of any apparent
misstatements or material inconsistencies with the financial statements
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 and the part of the directors’ remuneration report
described as having been audited it also includes an assessment of the significant estimates and judgements made by the directors in the preparation
of the financial statements and of whether the accounting policies are appropriate to the circumstances of the company and the group 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 and the part of the directors’ remuneration report described as having
been audited are free from material misstatement whether caused by fraud or other irregularity or error in forming our opinion we also evaluated
the overall adequacy of the presentation of information in the financial statements and the part of the directors’ remuneration report described as
having been audited
opinion
in our opinion
l the financial statements give a true and fair view of the state of affairs of the company and the group as at 31 march 2005 and of the loss of
the group for the year then ended and
l the financial statements and part of the directors’ remuneration report described as having been audited have been properly prepared in
accordance with the companies act 1985
deloitte  touche llp
chartered accountants and registered auditors
bristol
21 june 2005 
independent auditors’ report to the members of
tribal group plc
38 tribal group plc   report and accounts 2005
  consolidated profit and loss account
for the year ended 31 march 2005
before before
goodwill goodwill goodwill goodwill
ebt and ebt and ebt and ebt and
exceptional exceptional 2005 exceptional exceptional 2004
items items total items items total
note £’000 £’000 £’000 £’000 £’000 £’000
turnover gross earnings 2
continuing operations 221035 – 221035 185744 – 185744
acquisitions 8435 8435 –––
229470 – 229470 185744 – 185744
direct agency costs 49613 – 49613 33523 – 33523
gross revenue 2 179857 – 179857 152221 – 152221
cost of sales 102772 – 102772 81134 – 81134
gross profit 77085 – 77085 71087 – 71087
net administrative expenses 54707 – 54707 47934 – 47934
goodwill amortisation and impairment – 16636 16636 – 10690 10690
employee benefit trust creditcosts – 244 244 – 1025 1025
exceptional items 6 – 1747 1747 – 3040 3040
total administrative expenses 54707 18139 72846 47934 14755 62689
22378 18139 4239 23153 14755 8398
operating profit 2
continuing operations 20044 17694 2350 23153 14755 8398
acquisitions 2334 445 1889 –––
22378 18139 4239 23153 14755 8398
net interest payable 7 4451 – 4451 3076 – 3076
profitloss on ordinary activities
before taxation 3 17927 18139 212 20077 14755 5322
taxation 8 5367 – 5367 6176 – 6176
profitloss on ordinary activities after 
taxation 12560 18139 5579 13901 14755 854
minority interest equity 303 – 303 108 – 108
profitloss for the financial year 12257 18139 5882 13793 14755 962
dividends equity 9 2280 – 2280 2090 – 2090
retained profitloss for the year 9977 18139 8162 11703 14755 3052
earningsloss per share
basic 10 172p 254p 82p 220p 235p 15p
diluted 10 156p 238p 82p 205p 220p 15p
notes 1 to 33 form part of these financial statements
tribal group plc   report and accounts 2005   39 consolidated balance sheet
at 31 march 2005
2005 2005 2004 2004
note £’000 £’000 £’000 £’000
fixed assets
intangible assets 
– goodwill 11 197188 200798
– development expenditure 12 740 557
tangible assets 13 13047 6356
investments 14 151 190
211126 207901
current assets
stocks 15 9102 2058
debtors 16 56959 45245
cash at bank and in hand 27 28335 41740
94396 89043
creditors amounts falling due within one year 17 75734 67784
net current assets 18662 21259
total assets less current liabilities 229788 229160
creditors amounts falling due after more than one year 18 78489 72015
net assets 151299 157145
capital and reserves
called up share capital 21 3748 3448
share premium account 22 86928 79548
revaluation reserve 22 91 –
capital reserve 22 9545 9545
merger reserve 22 36615 33444
shares to be issued 23 17934 27172
profit and loss account 22 5456 2861
equity shareholders’ funds 149405 156018
equity minority interests 22 1894 1127
total capital employed 151299 157145
notes 1 to 33 form part of these financial statements
these financial statements were approved by the board of directors on 21 june 2005 and were signed on its behalf by
henry j pitman simon m lawton
director director
40 tribal group plc   report and accounts 2005 company balance sheet
at 31 march 2005
2005 2005 2004 2004
note £’000 £’000 £’000 £’000
fixed assets
investments 14 175624 180399
current assets
debtors amounts falling due within one year 1892 22737
debtors amounts due after more than one year 80669 25501
total debtors 16 82561 48238
cash at bank and in hand 1525 5497
84086 53735
creditors amounts falling due within one year 17 23726 8191
net current assets 60360 45544
total assets less current liabilities 235984 225943
creditors amounts falling due after more than one year 18 77929 72013
net assets 158055 153930
capital and reserves
called up share capital 21 3748 3448
share premium account 22 86928 79548
merger reserve 22 36615 33444
shares to be issued 23 16517 25088
profit and loss account 22 14247 12402
equity shareholders’ funds 158055 153930
notes 1 to 33 form part of these financial statements
these financial statements were approved by the board of directors on 21 june 2005 and were signed on its behalf by
henry j pitman simon m lawton 
director director
tribal group plc   report and accounts 2005   41 consolidated cash flow statement
for the year ended 31 march 2005
2005 2005 2004 2004
note £’000 £’000 £’000 £’000
cash inflow from operating activities 26 12240 31293
returns on investments and servicing of finance
interest paid 5547 4957
interest element of finance lease rental payments 8 14
interest received 914 1347
net cash outflow from returns on investments and servicing of finance 4641 3624
t axation
corporation tax paid 4655 7772
capital expenditure and financial investment 13
payments to acquire tangible fixed assets 5315 3399
payments in respect of items in the course of construction 2652 –
development costs capitalised 640 502
payments to acquire investments 35 10
sales of investments 170 865
sale of tangible fixed assets 2265 718
net cash outflow from capital expenditure and financial investment 6207 2328
acquisitions
purchase of subsidiary undertakings 20 12988 55813
net cash acquired with subsidiary undertakings 20 5067 7350
net cash outflow from acquisitions 7921 48463
equity dividend paid 2135 688
cash outflow before financing 13319 31582
financing
issue of ordinary share capital less issue costs 106 20123
repayment of borrowings 6231 11617
new secured loans less issue costs 6095 35243
capital element of finance lease rental payments 56 98
net cash outflowinflow from financing 86 43651
decreaseincrease in cash in the year 27 13405 12069
2005 2004
note £’000 £’000
reconciliation of net cash flow to movement in net debt
decreaseincrease in cash in the year 27 13405 12069
cash outflow from movement in debt 1680 27615
change in net debt resulting from cash flows 27 15085 15546
finance leases acquired with subsidiaries 31 1
debt acquired with subsidiaries – 267
new finance leases 18 –
movement in net debt in the year 15134 15814
net debt at the start of the year 37897 22083
net debt at the end of the year 27 53031 37897
notes 1 to 33 form part of these financial statements
42 tribal group plc   report and accounts 2005
  consolidated statement of total recognised gains
and losses
for the year ended 31 march 2005
2005 2004
£’000 £’000
loss for the financial year 5882 962
unrealised surplus on revaluation of investment properties 91 –
realised deficit on exercise of share options 155 –
total recognised gains and losses relating to the year 5946 962
reconciliation of movements in shareholders’ funds
for the year ended 31 march 2005
group group company company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
lossprofit for the financial year 5882 962 4125 4315
dividends 2280 2090 2280 2090
new share capital subscribed net of issue costs 7680 36995 7680 36995
increase in revaluation reserve 91 – – –
movement in merger reserve 3171 17605 3171 17605
movement in shares to be issued 8571 10355 8571 6908
share related awards 244 912 – –
share related awards acquired – 248 – –
share option exercises 578 – – –
net reductionaddition to shareholders’ funds 6613 42353 4125 49917
opening shareholders’ funds 156018 113665 153930 104013
closing shareholders’ funds 149405 156018 158055 153930
notes 1 to 33 form part of these financial statements
tribal group plc   report and accounts 2005   43 notes to the financial statements
1 accounting policies
the following accounting policies have been applied consistently in dealing with items which are considered material in relation to the group’s
financial statements
basis of preparation
the financial statements have been prepared under the historical cost convention modified to include the revaluation of certain fixed assets and in
accordance with applicable united kingdom accounting standards
the group continues to apply frs 18 ‘accounting policies’ which is concerned with the selection application disclosure and regular review of
accounting policies in the accounts
basis of consolidation
the consolidated financial statements incorporate the financial statements of the company and all its subsidiary undertakings
in the company’s balance sheet the investment in tribal holdings limited is stated at the nominal value of the shares issued in consideration for that
company as required by sections 131 and 133 of the companies act 1985 no premium has been recorded on the shares issued as consideration
under section 2304 of the companies act 1985 the company is exempt from the requirement to present its own profit and loss account the profit
for the company amounted to £4125000 2004 £4315000
t urnover
turnover represents the amounts excluding value added tax derived from the provision of goods and services to third party customers and includes
the gross amounts billed in respect of commission based income the particular policies applied are
l consultancy – on performance of the contracted services
l courses and training – over the provision of the related services
l product sales – on delivery of the related goods and
l commission based income – on provision of the service to which the commission relates
direct agency costs comprise media payments and production costs in respect of commission based income gross revenue comprises commission
and fees earned in respect of turnover
cost of sales includes the direct expenditure incurred in providing the goods and services described above including the cost of associates and the
salary costs of employed fee earners administrative expenses include the salary cost of nonfee earners the comparative results for cost of sales and
administrative expenses have been shown on a consistent basis and this has resulted in a net reclassification of £165m 2004 £153m from
administrative expenses to cost of sales there is no impact on operating profit or net assets in either period
acquisitions and disposals
on acquisition of a business including an interest in an associated undertaking fair values are attributed to the group’s share of net separable assets
under the acquisition method in frs 6 ‘acquisitions and mergers’ where the cost of acquisition exceeds the fair values attributable to such net assets
the difference is treated as purchased goodwill and capitalised in the balance sheet in the year of acquisition
the profit or loss on the disposal or closure of a previously acquired business includes the attributable amount of any purchased goodwill relating to
that business not previously charged through the profit and loss account
the results and cash flow relating to a business are included in the consolidated profit and loss account and the consolidated cash flow statement
from the date of acquisition or up to the date of disposal
intangible assets – goodwill
goodwill arising on the acquisition of a business represents the excess of the fair value of the consideration given over the fair values of the separable
net assets acquired in accordance with frs 10 ‘goodwill and intangible assets’ goodwill is included within intangible fixed assets and is amortised on
a straight line basis over its estimated useful economic life of 20 years subject to any provision required for impairment
a formal review of the carrying value of goodwill is carried out at the end of the first full financial year following the related acquisition and at any
point where events or changes in circumstances indicate that the carrying value may not be recoverable
where the amount of purchase consideration is contingent on one or more future events the cost of acquisition includes a reasonable estimate of
the fair value of amounts expected to be payable in the future the cost of acquisition is adjusted when revised deferred consideration estimates are
made with consequential adjustments continuing to be made to goodwill until the ultimate deferred consideration is known in accordance with 
frs 7 ‘fair values in acquisition accounting’
where the value of goodwill is revised under frs 7 the revised carrying value is amortised over the remaining useful economic life
44 tribal group plc   report and accounts 2005
  tribal group plc   report and accounts 2005   45
1 accounting policies continued
in the event of a disposal or closure of the businesses the remaining unamortised goodwill is written off through the profit and loss account
intangible assets – research and development expenditure
research expenditure is written off in the year in which it is incurred development expenditure represents expenditure mainly of a revenue nature in
establishing new products of the group such expenditure is amortised over a period of two years once the products are revenue producing subject to
earlier amortisation if profitable commercial exploitation cannot be foreseen
the directors review the capitalised development expenditure on an ongoing basis and where appropriate provide for any impairment in value
tangible fixed assets 
tangible fixed assets are stated at cost or valuation net of depreciation and any provision for impairment depreciation is provided on all tangible
fixed assets other than investment properties at rates calculated to write off the cost or valuation less estimated residual value of each asset by
equal instalments over their estimated useful economic lives as follows
freehold land and buildings – 2 per cent
short term leases – life of the lease
fixtures fittings and other equipment – 1533 per cent
assets in the course of construction relate to mercury health sites and are not depreciated until brought into use by the business
leases
assets acquired under finance leases are capitalised and the outstanding future lease obligations are shown in creditors the finance charges are
allocated over the period of the lease in proportion to the capital amount outstanding and are charged to the profit and loss account they are
depreciated over the shorter of the lease term and their useful economic lives
operating lease rentals are charged to the profit and loss account on a straight line basis over the period of the lease
finance costs
finance costs which are directly attributable to the construction of tangible fixed assets and long term contract costs are capitalised as part of the
cost of those assets the commencement of capitalisation begins when both finance costs and expenditures for the asset are being incurred and
activities that are necessary to get the assets ready for use are in progress capitalisation ceases when substantially all the activities that are
necessary to get the asset ready for use are complete
investment properties
investment properties are revalued every five years surpluses or deficits on individual properties are transferred to the investment revaluation reserve
except that a deficit which is expected to be permanent and which is in excess of any previously recognised surplus over cost relating to the same
property or the reversal of such a deficit is charged or credited to the profit and loss account depreciation is not provided in respect of freehold
investment properties the directors consider that this accounting policy which represents a departure from the statutory accounting rules is
necessary to provide a true and fair view as required under ssap 19 ‘accounting for investment properties’ the financial effect of the departure from
statutory accounting rules is not material
investments
investments held as fixed assets are shown at cost less provision for any impairment
stocks
stocks and work in progress other than longterm contracts are stated at the lower of cost and net realisable value cost comprises materials direct
labour and a share of production overheads appropriate to the relevant stage of production net realisable value is based on estimated selling price
less all further costs to completion and all relevant marketing selling and distribution costs
long term contracts
long term contracts balances represent costs incurred on specific contracts net of amounts transferred to cost of sales in respect of work recorded as
turnover less foreseeable losses and payments on account not matched with turnover contract work in progress is recognised as turnover by
reference to the cost of work carried out to date
profits are recognised on longterm contracts where the final outcome can be assessed with reasonable certainty in calculating this the percentage of
completion method is used to calculate the profit based upon the proportion of costs incurred to the total estimated costs cost includes direct staff
outlays and an appropriate proportion of overheads full provision is made for all known losses immediately such losses are forecast on each contract
amounts recoverable on contracts are included within debtors and are valued at the proportion of the anticipated net sales value of the work done to
date including uncertified amounts where the directors have satisfied themselves that entitlement has been established less billed on account
advance payments are included in creditors to the extent that they exceed the related work in progress
  notes to the financial statements continued
46 tribal group plc   report and accounts 2005
notes to the financial statements continued
1 accounting policies continued
directly attributable precontract costs incurred after the point when there is a virtual certainty that the contract will be awarded are capitalised
within other debtors and amortised over the contract period all other precontract costs are expensed as incurred
pension costs
the group operates various defined contribution pension schemes that are established in accordance with employment terms set by the subsidiary
undertakings the assets of these schemes are held separately from those of the group in independently administered funds the amount charged
against profits represents the contributions payable to the scheme in respect of the accounting period
a small number of employees participate in various defined benefit schemes the expected costs of providing retirement pensions under these 
plans are charged against profits over the period benefiting from the employees’ service in accordance with the recommendations of independent 
qualified actuaries
employee share schemes
the cost of awards to employees that take the form of shares or rights to shares are recognised over the period of the employee’s related
performance where there are no performance criteria the cost is recognised when the employee becomes unconditionally entitled to the shares no
cost is recognised in respect of saye schemes that are offered on similar terms to all or substantially all employees
there is no liability in relation to national insurance on share options at the year end as the company has obtained tax indemnities from employees
in relation to employers’ national insurance
taxation
current tax is provided at amounts expected to be paid or recovered using the tax rates and laws that have been enacted or substantially enacted by
the balance sheet date
in accordance with frs 19 ‘deferred tax’ deferred taxation is provided in full on timing differences which represent an asset or liability at the balance
sheet date at rates expected to apply when they crystallise based on current tax rates and law timing differences arise from the inclusion of items of
income and expenditure in taxation computations in periods different from those in which they are included in the financial statements deferred tax
is not provided on timing differences arising on unremitted earnings of subsidiaries associates and joint ventures where there is no commitment to
remit these earnings deferred tax assets and liabilities are not discounted
a net deferred tax asset is regarded as recoverable and therefore recognised only when on the basis of all available evidence it can be regarded as
more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted
capital instruments
capital instruments are accounted for and classified as equity or nonequity share capital equity or nonequity minority interests and debt according
to their form convertible debt is separately disclosed and regarded as debt unless conversion actually occurs provision is made for the accrued
premium payable on redemption of redeemable debt or nonequity interests
cash and liquid resources
cash for the purpose of the cash flow statement comprises cash in hand collateralised cash and deposits repayable on demand less overdrafts
payable on demand
derivative financial instruments
derivative financial instruments are used to reduce exposure to interest rate movements the group does not hold or issue derivative financial
instruments for speculative purposes
for an interest rate swap to be treated as a hedge the instrument must be related to actual assets or liabilities or a probable commitment and must
change the nature of the interest rate by converting a fixed rate to a variable rate or vice versa interest differentials under these swaps are recognised
by adjusting net interest payable over the periods of the contracts
  2 segmental analysis
the group operates through seven divisions tribal communications tribal consulting tribal education tribal property tribal resourcing tribal
technology and mercury health
the turnover and profit before tax of the group for the year has been derived from its principal activities wholly undertaken in the united kingdom
operating profit before
goodwill ebt and
turnover gross revenue exceptional items net assets
2005 2004 2005 2004 2005 2004 2005 2004
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
communications 9958 6921 9958 6921 2382 1741 16409 18484
consulting 55238 42130 55238 42130 6669 7121 74941 73908
education 36317 35884 36317 35884 5784 6634 31258 31929
property 21331 18443 21331 18443 2658 2819 24910 24130
resourcing 74297 54432 24684 20909 5252 5406 21757 22202
technology 34391 30457 34391 30457 5145 4308 31012 26070
mercury health 349 7 349 7 343 – 6483 1257
central and bid costs – – – – 5169 4876 55471 38321
inter segment sales 2411 2530 2411 2530 – – – –
229470 185744 179857 152221 22378 23153 151299 157145
items below operating profit before goodwill amortisation ebt and exceptional items are not analysed by segment
3 profitloss on ordinary activities before taxation
2005 2004
£’000 £’000
profitloss on ordinary activities before taxation is stated after chargingcrediting
auditors’ remuneration
group – audit 343 331
– other services 447 355
company – audit included above 62 55
depreciation and other amounts written off tangible fixed assets
owned 2699 2110
leased 16 24
goodwill amortisation and impairment 16636 10690
amortisation of shares held by employee benefit trusts – 113
creditcontribution to employee share awards 244 912
operating lease rentals
land and buildings 1325 1813
other 803 647
research and development expenditure
amortisation charge 457 255
expensed in year 891 905
included within other services payable to the auditors are amounts relating to the preparation of other statutory reports of £6000 2004 £44000
and other fees of £327000 2004 £219000 also included are tax compliance fees of £114000 2004 £92000 in addition fees as reporting
accountants of £36000 2004 £407000 paid to the auditors have been capitalised as part of the cost of acquisitions in accordance with frs 7
the total figures for continuing operations as stated in the consolidated profit and loss account for the year ended 31 march 2005 include the
following amounts in relation to subsidiaries acquired in the period direct agency costs £nil cost of sales £3390000 gross profit £5045000 and
administrative expenses £3156000
tribal group plc   report and accounts 2005   47 notes to the financial statements continued
4 remuneration of directors
2005 2004
£’000 £’000
directors’ emoluments 1037 809
included within directors’ emoluments are pension costs of £74000 2004 £58000 in respect of payments made to three 2004 three directors’
individual defined contribution pension schemes
disclosures on directors’ remuneration share options longterm incentive schemes and pension contributions required by the companies act 1985
and those specified for audit by the financial services authority are contained in the ‘directors’ remuneration’ section within the audited part of the
remuneration report and form part of these audited financial statements
5 staff numbers and costs
the average number of persons employed by the group including executive directors during the year was as follows
2005 2004
no no
selling operations and marketing 1491 1330
finance and administration 358 260
1849 1590
the aggregate payroll costs of these persons were as follows
2005 2004
£’000 £’000
wages and salaries 65605 51389
social security costs 6985 5818
pension costs 3299 2087
75889 59294
6 exceptional items
the exceptional items of £1747000 2004 £3040000 are in relation to further bid and implementation costs incurred on the nhs independent
sector treatment centre contract in september 2004 the board received sufficient assurance to believe the contract would reach financial close
which occurred on 10 december 2004 and has capitalised subsequent bid costs post september 2004 in accordance with uitf 34
7 net interest payable 
2005 2004
£’000 £’000
bank interest receivable 914 889
interest payable on bank loans and overdrafts 5143 3457
interest payable on all other loans 215 494
finance charges payable in respect of finance leases and hire purchase contracts 7 14
5365 3965
net interest payable 4451 3076
48 tribal group plc   report and accounts 2005
notes to the financial statements continued
  8 t axation
2005 2004
£’000 £’000
a analysis of charge in the year
current tax
uk corporation tax on profits for the year 5758 6497
adjustments in respect of prior years 125 385
5633 6112
deferred tax
origination and reversal of timing differences 75 82
adjustments in respect of prior years 341 146
taxation charge on profits 5367 6176
b factors affecting the tax charge
lossprofit before tax 212 5322
tax creditcharge at standard rate of 30 64 1597
effects of
intangible amortisation 4769 3002
nondeductible start up costs 704 944
expenses not deductible for tax purposes 218 284
difference between capital allowances and depreciation charge 78 118
nondeductible uitf 17 share option creditscharges 73 308
release of ebt contribution accruals 271 154
timing differences 115 14
unrelieved current period losses – 76
utilisation of prior period losses 30 –
prior year adjustments 125 385
current tax charge for the year 5633 6112
c the group is not currently aware of any factors which may materially affect the effective rate of tax going forward other than existing 
reconciling items
9 dividends
2005 2004
£’000 £’000
interim paid 10 pence per share 2004 10 pence 750 690
final proposed 20 pence per share 2004 20 pence 1530 1400
total 30 pence per share 2004 30 pence 2280 2090
tribal group plc   report and accounts 2005   49 notes to the financial statements continued
10 earnings per share
earnings per share and diluted earnings per share are calculated by reference to a weighted average number of ordinary shares calculated as follows
2005 2004
thousands thousands
weighted average number of shares outstanding
basic weighted average number of shares in issue 71421 62622
employee share options 890 1926
shares to be issued in respect of deferred consideration 6164 2695
weighted average number of shares outstanding for dilution calculations 78475 67243
the adjusted basic and adjusted diluted earnings per share figures shown on the profit and loss account on page 39 are included as the directors
believe that they provide a better understanding of the underlying trading performance of the group a reconciliation of how these figures are
calculated is set out below
2005 2004
lossearnings lossearnings
earnings per share earnings per share
£’000 pence £’000 pence
basic and adjusted basic earnings per share
loss and basic loss per share 5882 82p 962 15p
adjustments
goodwill amortisation and impairment 16636 233p 10690 171p
ebt costs net of tax 244 03p 1025 16p
exceptional items 1747 24p 3040 48p
adjusted earnings and adjusted basic earnings per share 12257 172p 13793 220p
diluted and adjusted diluted earnings per share
loss and diluted loss per share 5882 82p 962 15p
adjustments
frs 14 adjustment – 07p – 01p
goodwill amortisation and impairment 16636 212p 10690 159p
ebt costs net of tax 244 03p 1025 15p
exceptional items 1747 22p 3040 45p
adjusted earnings and adjusted diluted earnings per share 12257 156p 13793 205p
 frs 14 requires presentation of diluted earnings per share when a company could be called upon to issue shares that would decrease net profit or increase net loss per share for a loss making company net loss
per share would only be increased by the exercise of outofmoney options hence no adjustment is made to diluted earnings per share
50 tribal group plc   report and accounts 2005
notes to the financial statements continued
  11 intangible fixed assets – goodwill
2005 2004
group £’000 £’000
cost
at beginning of year 221835 152662
additions 17299 69173
revisions to prior years 4273 –
at end of year 234861 221835
amortisation
at beginning of year 21037 10347
charge in year 11436 10126
impairment 5200 564
at end of year 37623 21037
net book value
at 31 march 2005 197188 200798
at 31 march 2004 200798 142315
the fair value of assets acquired in hacas group limited which was purchased in july 2003 has been revised from £8543000 to £7882000 after
providing £661000 in respect of pension liabilities
other revisions to prior years primarily relate to changes in estimates of the likely final settlement values under various earn out agreements which
are dependent on post acquisition performance
the directors consider that for all significant acquisitions the useful economic life of goodwill is 20 years this is based on future profit forecasts and
the length of time over which commercial knowledge is expected to be effectively utilised
12 intangible fixed assets – development expenditure
2005 2004
group £’000 £’000
cost
at beginning of year 1353 849
additions 640 502
acquired with subsidiaries – 2
at end of year 1993 1353
amortisation
at beginning of year 796 541
charge in year 457 255
at end of year 1253 796
net book value
at 31 march 2005 740 557
at 31 march 2004 557 308
tribal group plc   report and accounts 2005   51 notes to the financial statements continued
13 tangible fixed assets
fixtures fittings assets
investment long term short term and other in the course of
properties leases leases equipment construction total
group £’000 £’000 £’000 £’000 £’000 £’000
cost
at beginning of year 89 584 1679 10967 – 13319
additions – – 702 4590 5829 11121
acquired with subsidiaries – – – 1149 – 1149
revaluations 91 – – – – 91
disposals – – – 3153 – 3153
at end of year 180 584 2381 13553 5829 22527
depreciation
at beginning of year – 7 360 6596 – 6963
charge for year – 23 268 2424 – 2715
acquired with subsidiaries – – – 720 – 720
disposals – – – 918 – 918
at end of year – 30 628 8822 – 9480
net book value
at 31 march 2005 180 554 1753 4731 5829 13047
at 31 march 2004 89 577 1319 4371 – 6356
included in the total net book value of fixtures fittings and other equipment is £46000 2004 £46000 in respect of assets held under finance leases
depreciation for the year on these assets was £16000 2004 £24000
included in additions and disposals of fixtures fittings and other equipment is the sale and leaseback of medical equipment for mercury health
comprising cost and proceeds of £22m
investment properties which are freehold were valued on an open market existing use basis at 31 march 2005 by bernard marcus estate agents
valuers such properties are not depreciated
14 fixed asset investments
group company
investment in associates investment in subsidiaries
2005 2004 2005 2004
£’000 £’000 £’000 £’000
cost
at beginning of year 190 86 180399 115818
additions 35 10 24646 64581
acquired with subsidiaries 1 99 – –
provisions for impairment – – 4172 
disposals 75 5 – –
transfers to other group companies – – 25249 
at end of year 151 190 175624 180399
the directors have considered the value of the above investments and are satisfied that the aggregate value of the investments is not less than their
carrying value the results of associates are excluded as they are not material to the results of the group
52 tribal group plc   report and accounts 2005
notes to the financial statements continued
  tribal group plc   report and accounts 2005   53
15 stocks
group group
2005 2004
£’000 £’000
work in progress finished goods and goods for resale 1528 2058
long term contract balances 7574 –
9102 2058
included in work in progress finished goods and goods for resale is £602000 2004 nil in respect of finished goods and goods for resale
16 debtors
group group company company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
trade debtors 45537 38972 – –
amounts owed by group undertakings – – 82561 48076
other debtors 1037 878 – 162
prepayments and accrued income 8350 4629 – –
amounts recoverable on contracts 1391 – – –
deferred tax note 19 644 378 – –
56959 45245 82561 48238
amounts owed by group companies includes £80669000 2004 £25501000 falling due after more than one year these amounts have no fixed
repayment date
17 creditors amounts falling due within one year
group group company company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
loan notes see note 18 3802 8168 3308 5164
obligations under finance leases and hire purchase contracts 20 44 – –
trade creditors 25457 23209 – –
amounts owed to group undertakings – – 17688 –
corporation tax 5758 4510 – –
other taxation and social security 9264 8500 – –
other creditors 1666 1176 2 –
accruals and deferred income 27039 18950 – –
deferred consideration 1198 1827 1198 1627
dividends 1530 1400 1530 1400
75734 67784 23726 8191 notes to the financial statements continued
18 creditors amounts falling due after more than one year
group group company company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
bank loans 77518 71423 77518 71423
obligations under finance leases and hire purchase contracts 26 2 – –
deferred consideration 411 590 411 590
other creditors 534 – – –
78489 72015 77929 72013
maturity of bank and loan notes
group group company company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
bank and loan notes can be analysed as falling due
in one year or less or on demand 3802 8168 3308 5164
between two and five years 77518 71423 77518 71423
81320 79591 80826 76587
the bank loan which has primary security is at market rates of interest and is secured by way of a fixed and floating charge over the assets of the
company and its subsidiary undertakings the interest rates on the other loans are a mixture of fixed and floating and are also at market rates
repayment terms vary between one and five years
maturity of obligations under finance leases and hire purchase contracts
group group
2005 2004
£’000 £’000
within one year 20 44
in the second to fifth years 26 2
46 46
finance leases and hire purchase contracts are secured on the related assets
19 deferred tax
the amounts provided for deferred taxation and the amounts for which credit has been taken are set out below
group group
2005 2004
£’000 £’000
capital allowances in excess of depreciation 471 319
other timing differences 136 59
tax losses carried forward 37 –
deferred tax asset note 16 644 378
the directors are of the opinion based on currently available forecasts that these timing differences will reverse in the near future and when they do
there will be sufficient taxable profits accordingly the directors believe that it is more likely than not that the deferred tax assets will be recoverable
54 tribal group plc   report and accounts 2005
notes to the financial statements continued
  20 purchase of subsidiary undertakings
1 strategic information technology services group limited
on 19 october 2004 the company acquired the entire share capital of strategic information technology services group limited ‘sits’
book value at fair value at
acquisition adjustments acquisition
£’000 £’000 £’000
net assets acquired 
fixed assets
tangible 295 78 217
current assets
trade debtors 1671 144 1527
prepayments and other debtors 383 1248 1631
cash at bank and in hand 3950 – 3950
total assets 6299 1026 7325
liabilities
trade creditors 49 24 25
other creditors 2288 1537 3825
taxation 34 – 34
net assets 3996 487 3509
goodwill 9962
13471
satisfied by
cash 7475
shares 2334
loan notes – non convertible 706
acquisition costs 196
contingent deferred consideration 2760
13471
the contingent deferred consideration reflects additional consideration payable to the previous owners and is based on trading performance up to
31 march 2006 the amounts above reflect the directors’ best estimate of contingent deferred consideration payable the maximum additional
consideration payable is £31m the liability will be satisfied by the issue of shares and is included within the shares to be issued disclosed in note 23
the provisional fair value adjustments represent a reassessment of the value of balances recorded in the accounts of sits
these mainly reflect adjustments to accrued income to bring the income recognition policy on software sales in line with group policy deferred
income in respect of training and consultancy in line with group policy and to reflect the liabilities accruing from the exercise of share options
immediately prior to acquisition
tribal group plc   report and accounts 2005   55 notes to the financial statements continued
20 purchase of subsidiary undertakings continued
1 strategic information technology services group limited continued
the profit and loss accounts of sits for the 116 month period ended 19 october 2004 and the year ended 30 november 2003 are summarised below
116 months to 12 months to
19 october 2004 30 november 2003
£’000 £’000
turnover 4865 5470
operating lossprofit 1398 1052
net lossprofit before tax 1269 1122
taxation 218 336
net lossprofit after tax 1487 786
the loss arising in the period prior to acquisition was a result of the writeoff of a us investment and exceptional staff bonuses paid immediately
prior to sale totalling £24m
sits had no other gains or losses in the period
the contribution to group turnover since acquisition was £37m £09m of cost of sales £28m of gross profit £15m of administrative expenses and
£13m in respect of operating profit
2 other subsidiary undertakings acquired
the group acquired three other subsidiary undertakings as follows
holding
april 2004 benchmarque limited 100
april 2004 aldcliffe computer systems limited 100
november 2004 derek hicks  thew limited 100
56 tribal group plc   report and accounts 2005
notes to the financial statements continued
  20 purchase of subsidiary undertakings continued
2 other subsidiary undertakings acquired continued
book value at fair value at
acquisition adjustments acquisition
£’000 £’000 £’000
net assets acquired 
fixed assets
tangible 191 – 191
current assets
stocks – work in progress 51 – 51
trade debtors 941 19 922
prepayments 122 – 122
other debtors 59 – 59
cash at bank and in hand 1117 – 1117
total assets 2481 19 2462
liabilities
trade creditors 264 – 264
other creditors and accruals 1419 193 1612
corporation tax 220 88 308
net assets 578 300 278
goodwill 7337
7615
satisfied by
cash 3989
shares 1105
loan notes – non convertible 420
acquisition costs 251
contingent deferred consideration 1850
7615
the contingent deferred consideration reflects earn outs payable to the previous owners and is based on forecast future trading performance to
various dates the amounts above reflect the directors’ best estimate of contingent deferred consideration payable the maximum earn out payable 
is £29m the liabilities will be satisfied by the issue of loan notes and shares and are included within creditors and shares to be issued disclosed in 
note 17 and note 23 respectively
the provisional fair value adjustments represent a reassessment of the value of balances recorded in the accounts of these subsidiaries
included within goodwill is £630000 which existed as an intangible asset in the balance sheets of the other companies acquired at the date 
of acquisition
the contribution to group turnover of these businesses since acquisition was £47m £25m of cost of sales £22m of gross profit £12m of
administrative expenses and £10m in respect of operating profit
tribal group plc   report and accounts 2005   57 notes to the financial statements continued
58 tribal group plc   report and accounts 2005
notes to the financial statements continued
21 called up share capital
2005 2004
£’000 £’000
authorised
125000000 ordinary shares of 5p each 2004 125000000 6250 6250
ordinary shares of 5p each
number £’000
allotted called up and fully paid
at 1 april 2004 68966818 3448
issued as consideration for acquisitions 5799821 290
share option exercises 197632 10
at 31 march 2005 74964271 3748
allotment of shares
between 1 april 2004 and 31 march 2005 new ordinary shares of 5p each in the company were issued as follows
valueproceeds
number of shares price per share £’000 purpose of issue
321756 £210 675 acquisition of aldcliffe
1269648 £177 to £186 2344 acquisition of sits
136239 £184 250 acquisition of dht
193617 £172 to £222 323 share option exercises
4015 £200 to £208 8 saye exercises
1063806 £176 1872 purchase of minorities
3008372 £149 to £229 5285 earn outs
5997453 10747 21 called up share capital continued
details of options in respect of shares outstanding at 31 march 2005 are as follows
employee share option schemes
date from which 
number outstanding price payable exercisable
limited scheme 461388 £133 30062003
241604 £165 30062003
702992
plc scheme 35808 £250 30062003
77241 £283 30062003
85932 £286 30062004
238562 £310 30062004
558700 £246 30062005
185403 £229 30062005
355986 £326 30062006
100858 £362 30062006
119142 £345 30062007
280855 £196 30062007
2038487
ltip 421208 £nil 07022006
60000 £nil 26062006
56450 £nil 19122006
54878 £nil 31072007
60427 £nil 30062007
47831 £nil 30062007
700794
eepp 1193358 £nil 30062006
acquired schemes 20289 £116 14012003
44402 £190 27032004
64746 £245 28022005
78842 £231 24012006
72636 £022 29032004
280915
savings related option scheme
saye 285394 £208 01122004
481337 £200 01022006
296227 £300 01022007
612434 £144 01032008
1675392
total tribal group plc share option schemes 6591938
tribal group plc   report and accounts 2005   59 notes to the financial statements continued
22 share premium and reserves 
share equity
premium revaluation capital merger profit and minority
account reserve reserve reserve loss account interest
group £’000 £’000 £’000 £’000 £’000 £’000
at beginning of year 79548 – 9545 33444 2861 1127
lossprofit for the year – – – – 5882 303
premium on share issues net of expenses 7380 – – 3171 – –
revaluation surplus – 91 – – – –
share option exercises – – – – 155 –
dividends – – – – 2280 80
new minority interests – – – – – 720
purchase of minorities – – – – – 176
at end of year 86928 91 9545 36615 5456 1894
share
premium merger profit and
account reserve loss account
company £’000 £’000 £’000
at beginning of year 79548 33444 12402
profit for the year – – 4125
dividends – – 2280
premium on share issues net of expenses 7380 3171 –
at end of year 86928 36615 14247
the merger reserve of £366m 2004 £334m relates to the premium arising on shares issued subject to the provisions of section 131 of the
companies act 1985
23 shares to be issued
group group company company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
deferred shares to be issued in future periods 16517 25088 16517 25088
credit in relation to share awards 1417 2084 – –
17934 27172 16517 25088
shares to be issued in future periods represents the directors’ estimate of the fair value of the shares to be issued it represents additional
consideration that is payable to the original vendors of some of the businesses now subsidiaries acquired by the company the final value of the
shares to be issued is dependent upon the future financial performance of the subsidiaries the maximum value of shares to be issued under earn outs
payable is £345m 2004 £413m
60 tribal group plc   report and accounts 2005
notes to the financial statements continued
  24 commitments
a there are capital commitments at 31 march 2005 of £25800000 2004 £275000 the current year commitments primarily relate to mercury
health and their obligations to construct five treatment centres
b annual commitments under noncancellable operating leases are as follows
2005 2004
land and 2005 land and 2004
buildings other buildings other
group £’000 £’000 £’000 £’000
operating leases which expire
within one year 320 172 130 157
one to two years 361 40 203 195
in the second to fifth years inclusive 984 728 1219 400
over five years 1277 – 888 –
2942 940 2440 752
25 pension scheme
the group operates a number of defined contribution and defined benefit pension schemes within individual subsidiaries and contributes to certain
employees’ personal pension plans the pension cost charge for the period represents contributions payable by the group and amounted to
£3299000 2004 £2087000
contributions amounting to £192000 2004 £173000 were payable to the funds at the year end and are included in creditors
defined benefit schemes
one of the group’s subsidiary undertakings tribal technology limited participates in the tfl pension fund formerly lrt pension fund which is a
defined benefit arrangement the last full actuarial valuation of this scheme was carried out by a qualified independent actuary as at 31 march 2003
the tribal technology section of the tfl pension fund had seven active members at the year end employer contributions amounting to £76720 were
paid in the year to 31 march 2005 as the scheme membership is relatively small these accounting figures have been calculated using the actual
membership and asset data rather than by projecting forward the results of the 31 march 2003 valuation
another of the group’s subsidiary undertakings sdp regeneration services 2 limited participates in the london pensions fund authority pension fund
‘the lpfa pension fund’ which is a defined benefit arrangement the last full actuarial valuation of this scheme was carried out by a qualified
independent actuary as at 31 march 2004
the sdp regeneration services 2 limited section of the lpfa pension fund had 45 active members and 10 deferred pensioners at the year end
employer contributions amounting to £279000 were paid in the year to 31 march 2005 including a oneoff payment of £150000 in respect of an
early retirement
the assets of the funds have been taken at market value and the actuarial assumptions used to calculate scheme liabilities under frs 17 are
2005 2004 2003
 per annum  per annum  per annum
inflation 275 275 250
salary increases 375 375 350
rate of discount 550 550 525
pension in payment increases nongmp component 275 275 250
revaluation rate for deferred pensioners 275 275 250
tribal group plc   report and accounts 2005   61 notes to the financial statements continued
25 pension scheme continued
the fair value of the assets in the scheme the present value of the liabilities in the scheme and the expected rate of return at each balance sheet date
were as follows
tfl pension fund
2005 2005 2004 2004
 £’000  £’000
equities 775 878 775 710
bonds 550 87 550 75
total fair value of assets 965 785
present value of scheme liabilities 1142 1047
deficit in the scheme 177 262
related deferred tax asset 53 79
net pension liability 124 183
lpfa pension fund
2005 2005 2004 2004
 £’000  £’000
equities 775 1792 775 1570
bonds 550 238 550 232
property 650 169 650 111
cash 350 181 350 33
total fair value of assets 2380 1946
present value of scheme liabilities 3573 3130
deficit in the scheme 1193 1184
related deferred tax asset 358 355
net pension liability 835 829
adjustments to group net assets under frs 17
2005 2004
£’000 £’000
net assets 151299 157145
pension liability 959 1012
net assets including pension liability 150340 156133
adjustments to group reserves under frs 17
2005 2004
£’000 £’000
profit and loss deficitreserve excluding pension liability 5456 2861
pension liability 959 1012
profit and loss deficitreserve 6415 1849
the contribution rate for 2005 was 25 of pensionable earnings for the tfl pension fund and 17 for the lpfa pension fund and the agreed
contribution rate for the next 10 years is 25 of pensionable earnings for the tfl pension fund and 181 for the lpfa pension fund
an additional annual past service contribution of £37000 is to be paid into the tfl pension fund and additional lump sum payments will be made over
the next three years into the lpfa pension fund to address the deficits in the schemes
62 tribal group plc   report and accounts 2005
notes to the financial statements continued
  25 pension scheme continued
analysis of amounts charged to the profit and loss account under frs 17
tfl lpfa tfl lpfa
2005 2005 2004 2004
£’000 £’000 £’000 £’000
current service cost 44 176 48 168
past service cost – 150 ––
total operating charge 44 326 48 168
other finance charges
interest on pension scheme liabilities 59 179 51 146
expected return on pension scheme assets 62 161 44 108
net finance charge 3 18 738
total charge to profit and loss account 41 344 55 206
analysis of actuarial gain in the statement of total recognised gains and losses
tfl lpfa tfl lpfa
2005 2005 2004 2004
£’000 £’000 £’000 £’000
actual return less expected return on pension scheme assets 42 56 117 265
experience gains and losses arising on the scheme liabilities 7– 7 –
changes in assumptions underlying the present value of scheme liabilities – – 3 204
changes in assumptions underlying the present value of scheme liabilities 49 56 113 61
movement in the deficit during the year
tfl lpfa tfl lpfa
2005 2005 2004 2004
£’000 £’000 £’000 £’000
deficit in fund at 1 april 262 1184 361 1189
movement in the year
current employer service cost 44 176 48 168
past service cost – 150 – –
net finance charge 3 18 7 38
employer contributions 77 279 41 150
actuarial gain 49 56 113 61
deficit in fund at 31 march 177 1193 262 1184
the comparative figures have been restated to reflect the lpfa pension fund liability this information was not available at the time the 2004
accounts were signed
tribal group plc   report and accounts 2005   63 notes to the financial statements continued
26 reconciliation of operating profit to operating cash flows
2005 2004
£’000 £’000
operating profit 4239 8398
depreciation 2715 2134
goodwill amortisation and impairment 16636 10690
amortisation of development expenditure 457 255
profit on sale of investments 95 203
profit on disposal of fixed assets 30 25
creditcontribution to employee share awards 244 912
amortisation of employee benefit trust – 113
increase in debtors 6636 3717
decreaseincrease in creditors 1798 12317
decrease in stocks 543 419
exceptional items 1747 3040
net cash inflow from operating activities excluding mercury health 17534 34333
mercury health
– increase in stocks 7574 –
– increase in debtors 379 –
– increase in creditors 4406 –
exceptional items 1747 3040
net cash inflow from operating activities 12240 31293
27 analysis of net debt
arising from other 
at beginning acquisitions noncash at end
of year cash flow excluding cash changes of year
£’000 £’000 £’000 £’000 £’000
cash at bank and in hand 34273 7463 – – 26810
cash collateralised 7467 5942 – – 1525
41740 13405 – – 28335
debt due within one year 8168 4366 – – 3802
loans 71423 6095 – – 77518
finance leases 46 49 31 18 46
79637 1680 31 18 81366
total 37897 15085 31 18 53031
included within cash at bank and in hand is £1525000 2004 £7467000 of cash collateralised representing committed facilities that are specifically
allocated to repay loan liabilities in respect of nonconvertible loan notes issued to the previous owners of certain entities acquired
28 purchase of subsidiary undertakings
the subsidiaries acquired during the year contributed the following cash flows to the group
operating returns on capital
cash flow investments taxation expenditure
£’000 £’000 £’000 £’000
strategic information technology services group limited 722 9 – 35
other 448 3 468 24
a number of the acquisitions made in the year involved noncash consideration including nonconvertible loan notes and contingent consideration
further details are supplied in note 20
64 tribal group plc   report and accounts 2005
notes to the financial statements continued
  29 interest rate swaps
on 1 april 2004 the group entered into two interest rate swaps
i £20m fixed at 509 until 31 march 2008
ii £20m discounted at 75 basis points for the year ended 31 march 2005 and subsequently moved to a fixed rate of 529 the bank has the right
to flip this tranche to libor minus 10 basis points for the remaining term to 31 march 2008
in addition the group has entered into interest rate swaps in order to modify the characteristics of the £335m limited recourse senior debt facility
arranged in relation to mercury heath dtc1 limited from a floating rate to a fixed rate for a period of the loan’s duration the first swap relates to
£125m of the facility and fixes the rate at 498 for a period of three years from 1 april 2006 the second swap relates to £210m of the facility and
fixes the rate at 500 for a period of three years from 1 april 2005 none of the £335m of this facility has been drawn at 31 march 2005
30 financial instruments
the group’s policies as regards derivatives and financial instruments are as described in note 1 the group does not trade in financial instruments as
permitted by frs 13 short term debtors and creditors have been omitted from all disclosures
liquidity
the company’s policy is to finance its operations and expansion through the use of overdrafts bank loans vendor loan notes and the issue of new
equity share capital contingent consideration is used to manage the liquidity risk of the company some assets are purchased using finance leases
where it is commercially advantageous to do so
foreign currency
the company has no transactional exposure in respect of costs denominated in currencies other than sterling and therefore does not currently hedge
against foreign currency risk
financial assets
financial assets comprise cash and cash deposits held at floating market rates linked to the bank of england base rate the split of cash and
collateralised cash is presented in note 27
financial liabilities
frs 13 defines floating rate liabilities as those that attract an interest charge and have their interest rate reset at least once a year the profile of
financial liabilities after taking into account interest rate swaps as follows
2005 2004
fixed rate floating rate total fixed rate floating rate total
£’000 £’000 £’000 £’000 £’000 £’000
sterling
rates reset at least once a year – 77518 77518 – 72423 72423
loan notes 158 3644 3802 205 7963 8168
158 81162 81320 205 80386 80591
finance leases 46 – 46 46 – 46
total 204 81162 81366 251 80386 80637
the weighted average fixed rate is 45 2004 45 and the weighted average period for which interest rates on fixed rate liabilities is two years
2004 two years there are £285m 2004 £316m undrawn committed borrowing facilities which all expire in two to five years
fair value
there are no differences between the book value and fair value of the financial instruments described above
31 post balance sheet events
as is more fully described in note 32 on 24 may 2005 the group acquired all of the minority shareholdings in tribal technology limited and tribal
education limited subject to shareholder approval in respect of the holdings of 7488 ‘c’ ordinary shares held by each of s m lawton and p j martin
directors of tribal group plc
in respect of the purchase of the minority shareholdings in tribal technology limited the total consideration is £2985000 and it is £1400000 for
the minority shareholdings in tribal education limited
32 related party disclosures
all subsidiary undertakings are more than 90 controlled within the group and any transactions with those subsidiaries are not disclosed as
permitted under frs 8 ‘related party transactions’
during the year under review the following directors had an interest in the ‘c’ ordinary shares of tribal technology limited a 7661 owned
subsidiary undertaking s m lawton 7488 shares 2004 7488 shares and p j martin 7488 shares 2004 7488 shares during the year both directors
received a dividend of £801 after the year end these interests were disposed of as described below in this note
tribal group plc   report and accounts 2005   65 32 related party disclosures continued
save as is described in this note no material contract or arrangement has been entered into during the year nor subsisted at 31 march 2005 in which
a director had a material interest
details of related party transactions
on 24 may 2005 the company acquired all of the shares in its subsidiaries tribal technology limited and tribal education limited not already owned
by it from the holders of the minority shareholdings who included directors of various group subsidiary companies and their spouses and in the
case of tribal technology limited s m lawton and p j martin who are executive directors of tribal group plc and also directors of each of its
subsidiaries the transactions involving s m lawton and p j martin are substantial property transactions for the purposes of section 320 of the
companies act 1985 and are therefore conditional upon shareholder approval at the group’s 2005 annual general meeting as required by the listing
rules an independent adviser has confirmed to the uk listing authority that the terms of these transactions are fair and reasonable so far as the
shareholders of the company are concerned
in respect of the purchase of the minority shareholdings in tribal technology limited the total consideration was £2985000 paid as to £1238372 in
cash and £1746628 in loan notes that can be redeemed by the issue of tribal group plc shares the company has the option to redeem the loan
notes by issuing new group shares in two tranches based on the market value of these shares at the time of such redemption the first redemption
period is following the announcement of the group’s results for the year ended 31 march 2005 on 21 june 2005 the second redemption period
follows the announcement of the group’s interim results for the six months ending 30 september 2005 each redemption period will last for ten
business days a twelve month lockup arrangement will apply to 60 of any shares issued
included in the acquisition of minority shareholdings in tribal technology limited described above are holdings of 7488 ‘c’ ordinary shares held by
each of s m lawton and p j martin two group directors these acquisitions are subject to shareholder approval as described above each of these
directors will receive in consideration for his shareholding £59044 in cash and £59044 in the same form of loan notes as described above
in respect of the purchase of minority shareholdings in tribal education limited the total consideration is £1400000 the consideration will be
satisfied by the issue of £1400000 in loan notes tribal group plc has the option to redeem up to 50 of the loan notes by the issue of new group
shares based on the market value of these shares at the time of such redemption following the announcement of the group’s results for the year
ended 31 march 2005 any shares issued will be subject to lockup arrangements for a minimum of twelve months from the date of issue
33 principal subsidiary undertakings
the principal subsidiary undertakings at 31 march 2005 are shown below all subsidiary undertakings are registered in the united kingdom and
prepare accounts to 31 march each year
principal activity holding
action medical limited recruitment and provision of temporary staff to the medical profession 100
aldcliffe computer systems limited developer and supplier of work based learning software 100
atlas media group limited pr consultants publication and website design consultants 100
avail consulting limited management consultancy it services and solutions 6667
cambridge training and development limited design and production of multimedia training resources 100
tribal dundas limited further education consultancy 100
geronimo public relations limited public relations consultancy 100
mercury health dtc1 limited healthcare delivery 100
network training publishing limited production of training course materials 100
nightingale architects limited architects 100
strategic information technology services group limited provider of administrative software to the further education sector 100
tribal lgc limited management consultancy services to local government 100
tribal education limited education consultancy training and ofsted inspections 80
tribal hch limited housing regeneration consultancy 100
tribal holdings limited holding company 100
tribal mpc limited pr communication and design 100
tribal property services limited property consultants 100
tribal resourcing limited recruitment advertising in the public sector 9784
tribal secta limited management consultancy services to the health sector 100
tribal technology limited software support and it services 7661
tribal tgc limited management consultancy learning and training 6831
yale data management consultants limited management and it consultants 100
 all investments are held by tribal group plc other than those marked which are held by intermediate holding companies
the proportion of voting rights held is equivalent to the equity shareholdings
66 tribal group plc   report and accounts 2005
notes to the financial statements continued
  the group will adopt ifrs in its consolidated financial statements for the year ending 31 march 2006
in compliance with european union regulations the interim results for the half year to 30 september 2005 will be presented under ifrs
as required by ifrs 1 ‘first time adoption of ifrs’ the group will adopt full retrospective application in its accounts except where it will make use of
exemptions permitted by the standard these being
l the group will take advantage of the exemptions allowed in ifrs 1 regarding ifrs 2 ‘sharebased payments’ the group will apply the
exemptions for sharebased payments granted on or before 7 november 2002 and for equity settled transactions granted after 7 november
2002 vesting before 1 january 2005 the group will meet all disclosure requirements of ifrs 2
l the group will adopt ifrs 3 ‘business combinations’ to the extent that it applies to acquisitions post 1 april 2004 business combinations prior
to that date will be treated under previous accounting standards in accordance with the optional exemption permitted under ifrs 1 all goodwill
and intangibles will be tested for impairment as required by international accounting standard ‘ias’ 36 ‘impairment of assets’ on an 
annual basis
l the group will take advantage of the exemption which allows cumulative actuarial gains and losses in defined benefit pension schemes up to the
date of transition to ifrs 1 april 2004 to be recognised immediately
during the year ended 31 march 2005 the group has made significant advances in assessing the financial impact of convergence with ifrs in brief
the major areas of impact are
ifrs 2 – sharebased payments
this standard deals with the valuation of share awards and their treatment in the financial statements at present the group applies uitf 17
‘employee share schemes’ in so far as it applies to the group’s share schemes under ifrs 2 all share awards must be measured at fair value at grant
date and recognised as an expense over the vesting period
since 31 march 2004 the group has undertaken a review of methods for valuing share option awards advice has been taken from external valuation
specialists and all relevant options will be valued using a blackscholes model
ifrs 3 – business combinations
this standard deals with accounting for business combinations including goodwill and intangible assets goodwill will be recognised as an asset and
reviewed for impairment at least annually any impairment is recognised immediately and will not subsequently reverse goodwill amortisation will
cease goodwill arising on acquisitions before the date of transition to ifrs will be retained at previous uk gaap amounts subject to being tested for
impairment at that date other intangible assets arising from acquisition after 1 april 2004 will be separately identified and amortised over their
estimated useful economic lives which may be over shorter periods than goodwill has previously been amortised
as a result of this change the group’s operating profit will be increased by the amount of goodwill amortisation under uk gaap for the year to 31
march 2005 this amounted to £114m in addition operating profit will be reduced by any amortisation on separately identified intangible assets
ias 19 – employee benefits
this standard covers all forms of employee benefits but the impact for the group will be in accounting for defined benefit pension schemes the
group currently accounts for these schemes using ssap 24 ‘accounting for pension costs’ and also complies with the transitional rules of frs 17
‘retirement benefits’
the impact on the financial statements will be to introduce a liability on the balance sheet in respect of defined benefit pension schemes and to
reduce shareholders’ equity by a corresponding amount
the group has chosen not to disclose quantified information on the impact of all the changes due to ias in these statements though it will do so in
the interim financial statements in accordance with guidance from the committee of european securities regulations quantitative disclosure will be
issued only when it can be measured with sufficient reliability and confidence there is still significant fluidity in the development of ias and the
group does not wish to provide quantitative information until it has been tested
the group is of the view that no other standard will have a significant impact on the accounting or operations of the group
tribal group plc   report and accounts 2005   67
international financial reporting standards ‘ifrs’
unaudited
  five year summary
for the years ended 31 march
2005 2004 2003 2002 2001
summarised consolidated group profit and loss account £’000 £’000 £’000 £’000 £’000
turnover 229470 185744 105659 45651 17465
profit before interest and goodwill amortisation 22378 23153 16685 8360 3148
goodwill amortisation and impairment 16636 10690 6288 2903 1156
ebt charges 244 1025 580 494 67
exceptional items 1747 3040 702 – –
interest 4451 3076 1260 283 1226
taxation 5367 6176 4737 1851 648
minority interests 303 108 – – –
dividends 2280 2090 – – –
retained lossesprofits 8162 3052 3118 2829 51
earnings per share adjusted diluted 156p 205p 186p 142p 69p
dividend per ordinary share 30p 30p – – –
summarised consolidated group balance sheet
intangible fixed assets 197928 201355 142623 92941 36235
tangible fixed assets 13198 6546 3635 2332 601
current assets 94396 89043 65145 54877 18651
current liabilities 75734 67784 60737 55964 16449
non current liabilities 78489 72015 36225 9388 973
total capital employed 151299 157145 114441 84798 38065
68 tribal group plc   report and accounts 2005
  company information
corporate offices
tribal group plc
8791 newman street
london wit 3ey
t 0207 323 7110
tribal group plc
priory court
poulton
cirencester gl7 5jb
t 01285 886 020
company secretary
richard h collins 
registered office
165 queen victoria street
london ec4v 4dd 
stockbroker and joint 
financial adviser
dresdner kleinwort wasserstein
20 fenchurch street
london ec3p 3db
joint financial adviser
n m rothschild  sons limited
new court
st swithin’s lane
london ec4p 4du
principal bankers
bank of scotland plc
po box 208
21 prince street
bristol bs99 7jg
auditors
deloitte  touche llp
3 rivergate
temple quay
bristol bs1 6gd
solicitors
osborne clarke
2 temple back east
temple quay
bristol bs1 6eg
registrars
capita registrars
the registry
bourne house
34 beckenham road
beckenham
kent br3 4tu
financial pr consultants
the maitland consultancy
orion house
5 upper st martin’s lane
london wc2h 9ea
company’s registered number
4128850
place of incorporation
registered in england and wales
tribal is a leading uk provider of professional
support and consultancy services with a number
one position in several of our markets we help a
wide range of clients – over 2500 in the public
sector alone – improve the quality of their services
to customers many of our assignments affect and
influence how public services are run and delivered
every day
services which are essential to our wellbeing and
quality of life attractive and affordable housing
21stcentury hospital treatment quality education
for the young dignified care for the sick and 
elderly safe and clean neighbourhoods lifelong
opportunities for learning and selfimprovement
services that touch us all tribal people who come
from a variety of backgrounds – both public and
private sector have dedicated much of their
professional careers to fulfilling these expectations
our specialist teams draw on their wide experience
to offer support and solutions to complex projects
working collaboratively the sum of our knowledge
is a great strength our mission is to share and
apply this knowledge for the benefit of things that
matter services for life
contents
01 highlights of the year 
02 chairman’s statement
04 chief executive’s statement
11 review of our markets
21 corporate responsibility
22 financial review
26 board of directors
27 directors’ report
29 corporate governance
32 remuneration report
37 statement of directors’ responsibilities
38 independent auditors’ report to the 
members of tribal group plc
39 consolidated profit and loss account
40 consolidated balance sheet
41 company balance sheet
42 consolidated cash flow statement
43 consolidated statement of total recognised
gains and losses
43 reconciliation of movements in 
shareholders’ funds
44 notes to the financial statements
67 international financial reporting standards
68 five year summary
69 company information
design and production by accrue
the paper used for this report uses ecf elemental chlorine free pulps supplied by manufacturers
with environmentfriendly and sustainable reforestation policies the report has been printed using
soyabased inks and the printing process conforms to iso 14001
  wwwtribalgroupcouk
tribal group plc
8791 newman street
london wit 3ey
t 0207 323 7110
e infotribalgroupcouk
services for life
tribal group plc report and accounts 2005
tribal group plc report and accounts 2005


Summary:
 during the year we have strengthened our position
as a leading professional support services and
consultancy business predominantly operating in
the uk public sector
we are now well positioned in all of our core
markets this year we have also moved into the
direct delivery of healthcare services through
mercury health
the group is now managed as seven divisions
consulting education technology resourcing
property communications and healthcare delivery
i am pleased to report on the results of tribal group
plc for the year ended 31 march 2005 during this
period we strengthened our position as a leading
professional support services and consultancy
business predominantly operating in the uk public
sector the group is now well positioned in its core
markets of education local government housing and
regeneration health and social care and central
government the year also saw our successful
move into the direct delivery of healthcare
services through mercury health
results
this was a challenging year for the group with
significant organisational change which as
previously indicated adversely affected margins
nevertheless we continued to deliver revenue
growth with turnover for the year up 24 per cent at
£2295m 2004 £1857m operating profit was
£224m 2004 £232m and operating margins
were 124 per cent 2004 152 per cent profit
before taxation was £179m 2004 £201m loss
after tax was £56m 2004 £09m and adjusted
diluted earnings per share were 156p 2004
205p goodwill amortisation was £166m 2004
£107m and included an impairment write down of
£52m 2004 £06m relating to a review of the
carrying value of two businesses
during the year the group generated operating
cash flow before mercury health of £175m 2004
£343m representing an operating profit to cash
conversion rate of 78 per cent net debt at the
year end was £530m representing gearing of 35
per cent with interest cover of over five times
our gross return on capital employed was 123
per cent 2004 150 per cent
 the operating profit operating margins profit before tax
and adjusted diluted earnings per share are stated before
goodwill amortisation and impairment of £166m 2004
£107m employee benefit trust credit of £02m 2004
cost of £10m and exceptional items of £17m 2004
£30m see page 39 consolidated profit and loss account
and page 50 earnings per share note
chairman’s statement
02 tribal group plc   report and accounts 2005
consulting education technology resourcing property communications delivery
central benchmarking education and executive architectural corporate social elective surgery
government learning systems resourcing services responsibility
health and consulting information interim project and cost creative services diagnostic 
social care management resourcing management services
local government inspection managed people and town interim 
and housing services performance planning management
economic training and recruitment specialist pr services
development and elearning advertising consulting
regeneration