Tf annual 03_final

Contents

Page

Group Profile 2

Highlights of 2003 2

Operating and Financial Review 3

Directors 10

Advisers 11

Directors’ Report 12

Corporate Governance 15

Directors’ Remuneration Report 19

Statement of Directors’ Responsibilities 27

Independent Auditors’ Report 28

Consolidated Profit and Loss Account 30

Consolidated Statement of Total Recognised Gains and Losses 31

Group and Company Balance Sheets 32

Consolidated Cashflow Statement 33

Notes to the Accounts 34

Group Five Year Record 60

Group Profile

Taylor & Francis is a leading international Group of companies publishing specialist scientific,
academic and professional journals and books. The Group’s publications supply the undergraduate,
post-graduate, academic and industrial research and professional markets. Publications cover a
range of subjects including: bioscience, business and management, construction, education,
engineering, the environment, humanities, medicine and healthcare, physical sciences, psychology,
reference and social and political science. Publications are available in paper-based and electronic
forms.

Highlights of 2003
% 2003 2002
Increase £’000 £’000

Turnover +18 173,679 147,365
Operating profit*
(before exceptional items and goodwill amortisation) +21 43,110 35,743
Operating profit +16 30,048 25,911
Pre tax profit*
(before exceptional items and goodwill amortisation) +20 39,585 32,929
Pre tax profit +15 26,523 23,097
Diluted earnings per share*
(before exceptional items and goodwill amortisation) +27 34.19p 26.97p
Diluted earnings per share +22 19.55p 15.96p
Dividend per share +10 4.83p 4.39p

r Turnover up 18% to £173.7 million
r Normalised operating profit up 21%* to £43.1 million, reflecting acquisitions and efficiency
gains. Operating profit up 16% to £30.0 million
r Normalised pre tax profit up 20%* to £39.6 million. Pre tax profit up 15% to £26.5 million
r Normalised diluted earnings per share up 27%* to 34.19p. Diluted earnings per share up 22%
to 19.55p
r Dividend per share up 10% to 4.83p
r Acquisitions of CRC Press (completed 8 April 2003) and Marcel Dekker (announced 18
November 2003, completed 2 January 2004) strengthened US product base and presence
r Acquisitions of Cass, SZP and Bios completed during 2003 further enhanced the portfolio
r Solid platform to drive further organic growth, with additional contribution from recent
acquisitions – 2004 expected to be another successful year
r Today the Board announced a proposed merger with Informa Group plc

* Excludes exceptional items of £3.3 million (2003: £2.6 million) and goodwill amortisation of £9.8 million (2003: £7.3 million)

2 - Taylor & Francis Group plc

Operating and Financial Review

Introduction
In 2003, the Group enjoyed another successful year of revenue and profit growth despite the
challenging situation in the worldwide higher education and scientific research markets signalled
last year. Ongoing investment in organic product development and the dedication of the Group’s
employees produced sound organic growth, which was augmented by five well selected, high
quality earnings enhancing acquisitions (including Marcel Dekker).
Importantly the purchase of the business and assets of the CRC Press group of companies in April
2003 (‘‘CRC Press’’) also brought enhanced structural and management strength to the North
American operations. This enhanced US presence culminated in the successful acquisition of the
business and assets of the Marcel Dekker group of companies (‘‘Marcel Dekker’’) on 2 January
2004. CRC Press and Marcel Dekker, together with the addition of Bios Scientific Publishers
Limited (‘‘Bios’’), Frank Cass & Co. Limited (‘‘Cass’’), and the publishing business and assets of
Swets and Zeitlinger Publishers (‘‘SZP’’), will add long-term value.
Several years of well targeted acquisitions and development have taken the Group into market
segments adjacent to its original academic and scientific publishing roots. This is consistent with the
Group’s strategy of strengthening the portfolio, widening the customer base and internationalising
the business. As a result, Taylor & Francis now has a significant presence in many professional and
industrial areas such as engineering, construction and pharmaceuticals, which provide an important
balance to the Group’s historical revenue sources, as well as to future acquisition prospects.
Corporate Strategy
The market, despite pressure on library funding and the current debate over alternative journal
business models, continues to respond positively to the Group’s high quality publications. In its 200
year history, Taylor & Francis has built a reputation as a supporter of the academic and scientific
communities and will continue to work to meet the demand for high quality, must have
information whilst responding appropriately to the changing needs of the market.
Taylor & Francis’ successful acquisition policy has also generated opportunities for development
outside of its historic core markets. As a result the Group has operations in a number of adjacent
professions and industries that have a similar requirement for high quality information. Acquisitions
have also led to an expansion of the Group’s position in the strategically important US market.
Today the Board has separately announced a proposed merger with Informa Group plc under a
scheme of arrangement (the ‘‘Scheme’’) and subject to shareholder approval. Further details have
been made available separately but the proposed merger would create a new international force in
the provision of specialist information to the Academic/Scientific, Professional and Commercial
communities.
Board, Directors and Employees
On 14 January 2004 Taylor & Francis announced that Mr Robert Kiernan would resign as
Chairman and from the Board by the end of March 2004 and that Mr Don Cruickshank would
become the new Chairman. In view of the timing of today’s announcement of the proposed
merger, Mr Kiernan has brought his resignation forward by a month, resigning on 1 March 2004.
As a result Mr Cruickshank has been appointed Chairman of Taylor & Francis Group plc with
effect from 1 March 2004 and until the completion of the merger.
The dedicated efforts of the executive management team, directors and staff have once again
helped to produce good results and further the Group’s success. Enthusiasm for our products,
services and markets runs throughout the Group’s world-wide organisation. During the past twelve
months much progress has been made in the integration and consolidation of the Group’s US
operations in Philadelphia, Pennsylvania, New York City and Boca Raton, Florida. The US
rationalisation combined with the 2002 consolidation and development of our UK journal
publishing facility at Milton Park, in Oxfordshire have delivered greater operational efficiency and
provide a strong platform for future growth.

Taylor & Francis Group plc - 3

Operating and Financial Review continued

Results
Turnover increased 17.9%, from £147.4 million to £173.7 million – a good result given the 9%
weakening in the average US dollar to sterling exchange rate over the year. In 2003 the Group
received more than 60% of its revenues and incurred around 50% of its costs in US dollars and
hence material fluctuations in the exchange rate have had an adverse impact on the Group’s sales
reported in sterling. The organic sales growth rate, excluding acquisitions and at constant exchange
rates, was 5.4%.
The Group’s journals business continued to perform robustly with turnover growing by 8.8%,
from £71.0 million to £77.2 million. Exchange movements had an adverse effect on translated
turnover and at constant exchange rates the overall increase was 16.0%. Eliminating exchange
effects and acquisitions, like for like organic growth was 9.1%.
Book turnover increased by 26.3% (£20.1 million) to £96.5 million, or 33.2% (£25.4 million) at
constant exchange rates. This performance reflects the contributions from CRC Press, SZP and
Bios. Eliminating exchange effects and acquisitions, like for like organic sales growth was 2.0%,
achieved in a soft market. The growth was particularly pleasing given the contribution to 2002
revenue from the publication in that year of the 4th Edition of Molecular Biology of the Cell.
Group operating profit* before exceptional items and goodwill amortisation increased 20.6%, from
£35.7 million to £43.1million. The operating margin* before goodwill amortisation and
exceptional items was 24.8% compared to 24.2% in 2002, reflecting continuing efficiency gains.
The Group continuously seeks to grow its profit margins across both acquired and existing
businesses by achieving efficiencies through the elimination of duplicated overheads and through
economies of scale.
Exceptional costs of £3.3 million (2002: £2.6 million) were incurred during 2003 and include
£1.6 million of costs associated with the Group’s participation in the BertelsmannSpringer Science
and Business Media auction process. Exceptional items also include £1.7 million from rationalising
and integrating acquisitions during the year and the related globalisation of the business.
Goodwill amortisation increased from £7.3 million to £9.8 million in the year, including eight
months of amortisation of goodwill arising on the acquisition of CRC Press, net of the effects of
exchange rate movements, with a large proportion of the Group’s goodwill being denominated in
US dollars.
After exceptional costs of £3.3 million and goodwill amortisation of £9.8 million, operating profit
was up by 16% to £30.0 million (2002: £25.9 million).
Normalised* net interest cover has decreased marginally to 12.2 times, compared to 12.7 times in
2002, illustrating the continuing strength of the Group’s cash flow and its ability to finance further
acquisitions with debt.
Pre-tax profit*, before exceptional items and goodwill amortisation increased by 20%, to £39.6
million (2002: £32.9 million).
The effective tax rate of 36.8% (2002: 40.8%) is distorted mainly by goodwill amortisation for
which tax relief is only partially available. The underlying tax rate, after adjustments in respect of
exceptional items, goodwill amortisation and prior year items, was 27.8% (2002: 29.8%) reflecting
the benefit of acquiring US based businesses and the potential for significant tax deductions against
profits generated in the United States.
The Board intends to recommend a final dividend of 3.23p (2.94p in 2002) per ordinary share,
making a total dividend for the year of 4.83p, an increase of 10% on 2002 (4.39p).




The final dividend will be paid on 11 June 2004 to ordinary shareholders registered as of 12 March
2004. If the proposed merger with Informa Group plc becomes effective prior to the Annual
General Meeting or if the Scheme has not become effective before 11 June, the directors will
instead declare, prior to the effective date of the merger, a second interim dividend of an amount
equal to the final dividend, payable to shareholders on the register at the record date for the final
dividend unless such dividend is payable under the Scheme.
Diluted earnings per share* before exceptional items and goodwill amortisation increased 26.8% to
34.19p per ordinary share, compared to 26.97p in 2002.
Balance Sheet
Goodwill increased by £67.4 million to £177.1 million, of which £86.0 million related to
goodwill arising on acquisitions made in the year, offset by amortisation of £9.8 million and the
effect of exchange rate movements of £8.8 million. A significant proportion of the goodwill value
is denominated in US dollars.
Stocks increased by £3.9 million compared to 2002, to £35.0 million, due to acquisitions and
normal working capital requirements, offset by exchange effects on US dollar denominated stock
balances.
Net debt increased by £58.1 million, to £83.0 million, reflecting the expenditure of £92.5
million on acquisitions of businesses, titles and long term investments. The sterling value of debt,
which is predominately held in US dollars, was reduced by £8.1 million through the effect of
exchange rate movements.
The Group converted 107% of operating profits before goodwill amortisation and depreciation to
net cash flow from operations, a significant improvement on the comparable conversion rate for
2002 of 89%. Adjusting for the effect of exceptional items in cash flow from operations, the
percentages were 108% and 87%, respectively.
Capital expenditure was up by £0.2 million to £3.0 million compared to 2002 (which included
£0.75 million spent on the Milton Park premises).
Deferred income, which represents cash received in advance of publication of journal issues, was
again significantly impacted by exchange rate movements, due to the high proportion of income
received in US dollars. The balance of deferred income as at 31 December was £49.1 million, up
16% (£6.7 million) compared to £42.4 million at the end of 2002. The US dollar exchange rate at
31 December 2003 was $1.79: £1 compared to $1.61: £1 at 31 December 2002, representing a
decline of 11%. At constant exchange rates and ignoring all acquisitions in 2003, the underlying
growth in deferred income was an encouraging 13%. Deferred income is recognised as turnover
when journal issues are published.
Exchange Effects
Like most international businesses, the Group has an element of exchange translation exposure in
terms of its profit and loss account. With the addition of Marcel Dekker, the proportion of the
Group’s revenues and operating costs incurred in US dollars will increase to around 70% and 55%,
respectively. Hence movements in the US dollar to sterling exchange rate will be reflected in both
revenues and costs. As at 31 December 2003 the Group had also sold forward US $40 million at an
average rate of $1.575: £1, which should reduce the exposure to 2004 profits from currency
movements. From a cash flow perspective the Group’s multi currency revolving credit facility
enables it to repay surplus US dollars generated by operations, thereby effectively minimising the
cash flow based exchange exposure.
Acquisitions
On 31 January 2003 Bios, a well regarded scientific publisher was acquired for £3.2 million
(including costs). Bios, which has a number of repeat revenue generating products such as
textbooks, was successfully integrated into the Group by the end of June 2003. Bios contributed
£0.7 million and £0.1 million to 2003 Group turnover and profits, respectively.




On 7 April the Group purchased the publishing business and assets of CRC Press for £58.6 million
(including costs), financed through a new £165 million multi-currency revolving credit facility.
The CRC Press acquisition added a backlist of over 6,000 book titles and 32 journal titles, along
with database and newsletter subscription based products.
CRC Press, with its strong brand publishing in the areas of science, engineering and medicine,
added further balance to the Group’s book portfolio which had a predominance of social science
and humanities publications. The acquisition of CRC Press also gave the Group the critical mass
and the infrastructure necessary to enable further US acquisitions to be integrated more efficiently.
CRC Press contributed £23.4 million to Group turnover and £4.8 million to operating profit*
before exceptional items and goodwill amortisation.
On 28 July the Group acquired Cass, a well regarded book and journal publisher in the Humanities
and Social Sciences for £11.0 million including costs. Cass contributed £1.8 million to 2003
turnover and £0.3 million to operating profit* before exceptional items and goodwill
amortisation. The Cass business will be fully integrated by the end of March 2004.
On 31 October 2003 the publishing business and assets of SZP were acquired for E16.75 million
(£11.6 million including costs). SZP publishes books, journals and conference proceedings and
contributed £0.7 million to 2003 turnover and £0.1 million to operating profit before exceptional
items and goodwill amortisation.
The acquisition of the publishing business and assets of Marcel Dekker was announced on
18 November 2003. The consideration, paid upon completion of the acquisition on 2 January
2004, was US $122.0 million (£68.2 million) in cash, a loan note of US $1.6 million (£0.9
million) and a further cash payment at completion of US $18.4 million (£10.2 million). In the year
ended 31 December 2002 Marcel Dekker’s sales were US $42.0 million (£24.9 million),
producing an operating profit before exceptional items and shareholders’ cost of US $5.1 million
(£3.0 million).
The Marcel Dekker acquisition was financed by an increase, to £240 million, in the Group’s
revolving credit facility.
Operating Review
During the year we have made further progress towards our strategic goals of:
r strengthening and extending our portfolio of products and increasing the proportion of STM
based products;
r extending our customer base into adjacent segments; and
r balancing the geographical focus of the Group’s product generation.
Central to this progress has been the process of globalising the operational structure of the business
by subject area rather than by geographical location.
The Group is now structured on a global basis with Science Books run from Boca Raton, USA and
Humanities and Social Science Books from New York City and the UK. This structure is mirrored
in the Journals division with the STM journals now being run predominantly from Philadelphia,
USA and Humanities and Social Science Journals from the Milton Park offices in the UK.
Following the acquisitions of CRC Press and Marcel Dekker, the Group expects to derive around
40% of its 2004 revenue from products originated in the USA as compared to around 20% in 2001.
The increase in US generated revenue will also help to achieve economies of scale and further
underpin future Group performance.




The five acquisitions have significantly altered the shape of the publishing portfolio.
BIOS Books and journals in Biological Science including Genetics.
CRC Press Books, journals, electronic databases and newsletters in Sciences, Engineering and
Mathematics.
Cass Books and journals in the Humanities and Social Sciences.
SZP Books, journals and conference proceedings in Engineering and Medical Biological
Sciences.
Marcel Books and journals in Science, Medical and Pharmaceuticals.
Dekker
The Group will now generate the majority of its revenue from the Scientific, Technical and
Medical subject areas, (which form the largest part of the academic market), with the balance from
Social Sciences and Humanities. The Group now also has a significant medical/pharmaceutical
business.
In parallel with our acquisition strategy we have continued to invest in appropriate technology. We
have a number of key IT projects targeted to complete in 2004 to support the back office functions
of the Group, including project tracking and sales order processing systems. During the last 12
months we have transferred the majority of our reference product on line and have increased the
number of e-books available to 6,000.
Journal Publishing
The year started turbulently for journals publishers with the bankruptcy of Rowecom. 2003 was
also characterised by widespread restrictions in library funding, particularly in the USA where both
the state and private university sectors were affected by economic conditions.
Despite the market conditions, the Group has traded well through the cycle and is showing good
organic growth as well as acquisitive growth in its order book for 2004, as demonstrated by the
13% organic growth in deferred income in the 2003 balance sheet.
There was strong growth in the Asian markets, particularly China, and the momentum in on-line
access gathered pace as evidenced by downloads of Taylor & Francis research articles, which
increased by more than 35% in the year.
Taylor & Francis has a tradition of partnering with academic societies in its core disciplines and we
were delighted to sign agreements with a number of distinguished partners during the year
including the American Industrial Hygiene Association and American Conference of
Governmental Industrial Hygienists, the Scandinavian Society of Radiology and the Geological
Society of Australia.
In total 46 new journal titles were added to the list for publication in 2004 on top of the 185 titles
acquired with SZP, Cass and Marcel Dekker. The Group will publish more than 1,000 journal
titles in 2004.
Book Publishing
The books division had a good year especially given the challenging market conditions that we
experienced along with many of our competitors. The softness in the US books market we
reported in September 2002 continued and was mirrored in most markets around the world during
the course of 2003. The results were also affected by the significant decline in the US dollar
exchange rate, which reduced reported book turnover by around £5.3 million.
Books turnover was up 26.3% in 2003, with an underlying constant currency organic growth rate
of 2% compared to 2002. The Pacific Rim region performed very strongly continuing the
momentum reported last year, despite the short term impact of SARS. Middle East sales were
adversely affected during the Gulf war, but reverted to their normal patterns by the year end.
European sales were strong in the southern European markets but noticeably weaker in Germany
and France. India and China are growing markets for the Group’s products and, although they are



relatively small at the moment, as these markets develop there is scope for significant long term
growth.
Revenue from online and e-books continues to be relatively small, but the benefits of digitising
book content will play a greater part in revenue generation as Taylor & Francis develops its offering
to the library subscription market. For example, over 90% of Europa reference product is now
being digitised and for 2004 will be delivered through new content management systems.
The books division published 2,248 new titles in 2003, compared with 2,193 new titles published
in 2002. In 2004, after the acquisition of Marcel Dekker, Taylor & Francis will publish around
2,600 new book titles per year, adding to its growing back-list of over 35,000 book titles.
On 1 March we announced to our staff the proposed relocation of the majority of the London
based book publishing operation into expanded Milton Park offices when the current London
office lease expires in September 2004.
Derivatives and Other Financial Instruments
The Group’s financial instruments, other than derivatives, comprise borrowings, long-term loans,
cash and liquid resources and various items, such as trade debtors and trade creditors that arise
directly from its operations. The main purpose of these financial instruments is to raise finance for
the Group’s operations.
The Group also enters from time to time into appropriate derivatives transactions, principally
interest rate swap and forward foreign currency contracts. The purpose of such transactions is to
manage the interest rate and currency risks arising from the Group’s operations and its sources of
finance.
It is, and has been throughout the period under review, the Group’s policy that no trading in
financial instruments shall be undertaken.
The main risks arising from the Group’s financial instruments are liquidity risk, interest rate risk and
foreign currency risk. The Board reviews and agrees policies for managing each of these risks and
these are summarised below.
Liquidity and interest rate risk
The Group’s policy is to finance its operations by a mixture of retained profits, bank borrowings
and long-term loans.
As at 31 December 2003 the Group had in place a three year £165 million multi-currency
revolving credit loan facility arranged in connection with the acquisition of CRC Press. The
facility can be drawn in sterling, euros or US dollars or a combination thereof.
In connection with the Marcel Dekker acquisition, in January 2004 the revolving credit facility was
increased by £75 million, to £240 million.
As at 31 December 2003 the Group’s net debt was £83.0 million compared to £24.9 million at
31 December 2002. The increase of £58.1 million results mainly from the financing of
acquisitions, net of cash generated from operations and exchange gains.
As regards liquidity, the directors continually review the maturity profile of the Group’s
borrowings in the light of acquisitions and other known events. Short term flexibility is achieved
by revolving credit and overdraft facilities.
In respect of interest rate risk, the Group’s policy is to minimise exposure to fluctuations in interest
rates and to that end it has entered into interest rate swaps.
Foreign currency risk
The Group has significant long-term investments in overseas subsidiaries which operate primarily
in the USA. Their revenues and expenses are denominated substantially in US dollars. In order to
protect the Group’s sterling balance sheet from movements in these currencies (principally US



dollars) and the sterling exchange rate, the Group finances its net investment in these subsidiaries
primarily by means of borrowings in their respective functional currencies.
With the addition of Marcel Dekker, the proportion of the Group’s revenues and operating costs
incurred in US dollars will increase to around 70% and 55%, respectively.
The Group’s policy is to minimise the effect of fluctuations caused by currency movements with
reference to pre-determined exchange rates and to substantially reduce the currency exposure on
the projected net surplus of US dollar income over US dollar expenditure through the use of
forward currency contracts. This exposure is determined after reviewing operational requirements
for the period in which the exposure arises and is adjusted for acquisitions and other known events.
From a cash flow perspective the Group’s multi currency revolving credit facility enables it to repay
surplus US dollars generated by operations, thereby effectively minimising the cash flow based
exchange exposure.
Current Trading and Prospects
Our markets have and continue to experience funding pressures although this appears to be easing
in 2004. The Group has a tremendous benefit in that it has strong niche products and operates in
global markets, which enables it to balance the effect of localised market conditions. In 2003 the
Group has seen good growth from many markets, and has posted a strong underlying performance.
The Group will also have the benefit of a full year contribution from the acquisitions made during
2003 to help sustain growth into 2004. The enlarged product and customer bases will enable the
Group to develop and compete more effectively in an enlarged and growing market place.
Taylor & Francis has a solid platform from which to drive further organic growth, and with the
addition of CRC Press, Cass, SZP and Marcel Dekker it is well placed to continue to participate,
where appropriate, in the consolidation of the STM and academic publishing market.
There has been a debate recently regarding the subject of alternative journal business models,
which we have been following with interest. Taylor & Francis, being flexible in its approach, has
been able to respond to market changes appropriately in the past. We view any changes associated
with open access as an opportunity to strengthen our relationship with the academic community
and will monitor trends carefully and respond as necessary. As an illustration, the Group has
experimented with a number of pricing models over the past few years and publishes a number of
titles which could be considered as ‘‘open access’’ products.
This truly is an exciting time for the Group and Taylor & Francis is well positioned for the next
step in its development as a public company. As a result the Board is confident of another successful
year. I would like to end my report by thanking the Group’s employees as always for their support
and hard work, making 2003 another successful and enjoyable year.

David J Smith
Chief Executive 2 March 2004


Directors

Robert Kiernan (63) Non-executive Chairman 1 2 3
Robert Kiernan joined the Board in 1998. He was previously Chairman of Routledge Publishing
Holdings Limited which was acquired by Taylor & Francis in 1998. Prior to his position with
Routledge, Robert was Chief Executive Officer of Thomson Corporation Publishing. Robert is
also the Non-executive Chairman of the Discovery Group plc and has a number of other private
business interests. He retired on 1 March 2004.
Don Cruickshank (62) Non-executive Chairman elect 1 2 3
Don Cruickshank joined the Board as Non-executive Director on 14 January 2004 and replaced
Robert Kiernan as Chairman on 1 March 2004. Don was previously Chairman of the London
Stock Exchange and is currently Chairman of SMG plc. Prior to this he held a number of senior
positions including Director General of the Office of Telecommunications (OFTEL) as well as
Managing Director roles at both Pearson Longman plc and Virgin Group plc.
David Smith (54) Chief Executive
David Smith was appointed Chief Executive in April 2002. In the previous ten years he held senior
management positions at Wolters Kluwer and was latterly Chief Executive of its European
Education and Legal, Tax and Business divisions. David is responsible for the overall business
development of the Group.
Anthony Foye BA, ACA (41) Group Finance Director
Anthony Foye joined Taylor & Francis in 1987 as Group Chief Accountant after qualifying as a
Chartered Accountant with Haines Watts. He was appointed Finance Director in 1994. Anthony is
responsible for the Group’s finance function and is Managing Director of Taylor & Francis
Publishing Services Limited.
Roger Horton (46) Group Books Director
Roger Horton joined the Board in 1994 with over 15 years of previous publishing experience.
Roger is responsible for the Group’s global book publishing activities and is Managing Director of
Taylor & Francis Books Limited.
Jon Conibear (52) Group Journals Director
Jon Conibear joined the Board in 2001 from the Blackwell publishing group, bringing with him
over 25 years experience in academic publishing. He is responsible for the Group’s journal
publishing activities and is Managing Director of Taylor & Francis Limited.
David Banister BA, PhD, CMILT, FRSA (53) Non-executive Director
David Banister has been a non-executive Director of Taylor & Francis Group plc since 1990. He is
Professor of Transport Planning at University College London and has authored or edited 17 books
and written more than 200 papers for refereed journals and books.
Derek Mapp (53) Non-executive Director 1 2 3
Derek Mapp joined the Board as non-executive Director in 1998. He is Executive Chairman of
Leapfrog Day Nurseries Limited and Chairman of the East Midlands Development Agency, as well
as having a number of other private business interests. Derek was formerly Managing Director of
Tom Cobleigh plc.
David Wallace CBE, FRS, FREng, FRSE, FinstP (58) Non-executive Director 2
David Wallace was appointed as a non-executive Director in 2000. He is Vice-Chancellor of
Loughborough University and chairs the e-Science Steering Committee of the Office of Science
and Technology. David is also currently President of the Institute of Physics and a Vice President of
the Royal Society.
Nicholas Berwin, MA (Hons) (46) Non-executive Director 1 3
Nicholas Berwin joined the Board in 2001. Nicholas has broad experience in strategic and financial
consulting having held positions with Morgan Grenfell & Company Limited/Deutsche Morgan
Grenfell and more recently in his own consultancy business.
1 denotes member of Audit Committee
2 denotes member of Remuneration Committee
3 denotes member of Nominations Committee


Advisers

Financial Adviser and Broker Principal Solicitors Auditors
ABN AMRO Bank NV Ashurst Deloitte & Touche LLP
250 Bishopsgate Broadwalk House Chartered Accountants
London EC2M 4AA 5 Appold Street Abbots House
London EC2A 2HA Abbey Street
Reading
Berkshire RG1 3BD

Principal Bankers Registrars Public Relations Advisers
The Royal Bank of Scotland Capita Registrars Financial Dynamics
9th Floor Bourne House Holborn Gate
280 Bishopsgate 34 Beckenham Road 26 Southampton Buildings
London EC2M 4RB Beckenham London WC2A 1PB
Kent BR3 4TU

Registered Ofﬁce 11 New Fetter Lane, London, EC4P 4EE
Registration Registered in England and Wales Number 2280993


Directors’ Report

The directors have pleasure in submitting their annual report and the audited financial statements
for the year ended 31 December 2003.
Principal Activities
The Group’s principal activities are the publishing and distribution of scientific, technical and
medical and social sciences and humanities journals and books. The Group’s main objective is to
continue to develop these activities on a worldwide basis, in support of the academic, scientific and
professional communities and for the benefit of the Group’s shareholders.
Business Review
The results for the year are summarised in the consolidated profit and loss account on page 30. A
review of the Group’s business and future prospects is set out in the Operating and Financial
Review.
Dividends
The company continues to actively invest in acquiring businesses and reserves need to be built up
to accommodate this investment. Your Board intends to recommend a final dividend of 3.23p per
share, making a total for the year of 4.83p per share, an increase of 10% on 2002.
The final dividend will be payable to shareholders registered as at the close of business on 12 March
2004 and will be paid on 11 June 2004. If the proposed merger becomes effective prior to the
AGM of if the Scheme has not become effective before 11 June, the directors will instead declare,
prior to the effective date of the merger, a second interim dividend of an amount equal to the final
dividend, payable to shareholders on the register at the record date for the final dividend unless
such dividend is payable under the Scheme.
Directors
Details of directors who held office during the year ended 31 December 2003 and their interests in
the issued share capital of the Company are set out in the Directors’ Remuneration Report on
pages 19 to 26. Resolutions will be submitted to the Annual General Meeting in accordance with
the Articles of Association for the reappointment of three directors.
Mr D Cruickshank, who was offered and has accepted a position as non-executive Director with
effect from 14 January 2004 and as Chairman with effect from 1 March 2004, retires under the
provisions contained in the Articles of Association and, being eligible, offers himself for election by
the shareholders. Messrs R Horton and D Mapp retire by rotation in accordance with the Articles
and, being eligible, offer themselves for re-election. Brief biographical details of those directors
who are proposed for election or re-election appear on page 10.
Annual General Meeting
The notice of the Annual General Meeting will be despatched at a later date, depending on the
timing of the proposed merger.
Charitable and Political Contributions
The Group made gifts during the year for charitable purposes of £4,155 (2002: £nil). No political
donations were made (2002: £nil).
Auditors
Deloitte & Touche LLP have expressed their willingness to continue in office as auditors and a
resolution to reappoint them will be proposed at the forthcoming Annual General Meeting.


Directors’ Report continued

Substantial Shareholdings
As at 1 March 2004 the Company has been notified of the following interests, other than those
held by the directors, of 3% or more of the issued share capital of the Company:
Number of
shares % held
The Royal Bank of Scotland Group plc 6,235,308 7.26%
Aviva PLC and its subsidiary Morley Fund Management
Limited 4,600,413 5.36%
Legal & General Investment Management Limited 3,436,634 4.00%
Policy on Payment of Creditors
It is the Group’s normal practice to make payments to suppliers in accordance with agreed terms,
provided that the supplier has performed in accordance with the relevant terms and conditions. At
31 December 2003 and 2002 the Company had no trade creditors.
Corporate Social Responsibility
Social, environmental and ethical (SEE) matters are referred to the Board as part of regular
operational and strategic reports it receives from the business units, the executive directors and
through the formalised process of Risk Assessment. These issues are regularly discussed as part of
the Board’s review and reporting procedures and are given high prominence as having relevance to
the image, reputation and ultimately valuation of the business.
Managers are specifically required to comment on SEE matters within the formalised Risk
Assessment process. These SEE matters are then referred to the Audit Committee as part of their
review and, where appropriate, to the Environmental Policy Committee. Board members have the
opportunity to receive external training on SEE matters and during 2004 the Board will be
formalising its ethical conduct policies.
It is the Group’s policy not to make any political donations.
Environmental Policy
The Board has an Environmental Policy Committee, consisting of Mr R Kiernan and Mr D
Banister, who review policies and practices surrounding environmental issues throughout the
Group. The objective is to provide Group-wide targets for key areas of environmental impact and
to encourage initiatives to make the business more environmentally friendly.
Products
The primary issue for the Group in relation to the impact of the business on the environment
relates to the use of paper for our books and journals, of which 100% are produced on acid
(chlorine) free paper. The Group works with its printers throughout the world to ensure that water
based biodegradable inks are used wherever possible. Targets have been set to improve the Group’s
environmental impact and we seek to reduce consumption of paper through, for example,
electronic publishing, through reducing print runs and stock levels, through the replacement of
colour wet-proofing with colour digital proofing and through converting backlist titles to
electronic form.
Operations
The preferred method of internal communication within the Group is through the intranet and
email, which reduces the amount of paper used in the business. All Group offices have established
recycling and waste recovery (e.g. paper, toners, etc.) programmes. Energy use is subject to regular
reviews with the objective of improving procedures to reduce energy consumption and to source
energy efficient technology such as ‘low energy’ computer display equipment. This is part of a
Group wide policy of monitoring and improvement to ensure the Group moves towards reaching
a ‘‘compliance plus’’ position.


Directors’ Report continued

Staff
On transport, staff are encouraged to use public transport. In the UK interest free loans are offered
for annual season tickets for rail and bus travel. There is a limitation of 15 car parking spaces in the
Group’s main London office (none in New York or Philadelphia) for more than 300 staff.
Additionally, the Group provides locked storage facilities and, where possible, facilities such as
showers to encourage staff to cycle to work. The Group also offer loans to UK staff to purchase
bicycles.
Employee Policies
The Group’s employment policies are designed to provide equal opportunities irrespective of race,
ethnic or national origin, gender, sexual orientation, religion or disabled status. Full consideration
is given to applications for employment, the continuing employment, training and career
development of disabled persons.
During 2003 the Group again expanded the opportunities for staff to own shares in the Company
through a number of share option schemes. Shares have again been allocated to UK staff during the
year under the Save As You Earn scheme and under an equivalent US scheme. The Board intends
to allocate further shares under both schemes during 2004. Also during 2003 a number of
employee incentive schemes were introduced which link bonuses to achievement of individual and
Group objectives, both financial and non financial.
Every effort is made to keep staff as fully informed as possible about the operations and prospects of
the Group. Information on the activities of the Group and consultation with staff are provided
regularly through various management communication channels, which include bulletins, notices,
press releases and through meetings and presentations by senior management.

By order of the Board
11 New Fetter Lane
London
EC4P 4EE
J Thomasson
Secretary 2 March 2004


Corporate Governance

This section of the annual report describes how the Company has applied the Principles set out in
Section 1 of the Combined Code on Corporate Governance issued by the London Stock
Exchange in June 1998 (the ‘‘Hampel Code’’ or the ‘‘Code’’). The directors consider that
throughout the year ended 31 December 2003 the Company has been in compliance with the
provisions set out in Section 1 of that Code.
Statement of Appliance of Principles
The Code establishes fourteen Principles of Good Governance which are split into four main areas
and are described in the sections below:
r Directors
r Directors’ Remuneration
r Relations with Shareholders
r Accountability and Audit
Directors
The Company is controlled through the Board of Directors which, at 31 December 2003,
comprised four executive and five non-executive directors. Their biographies appear on page 10.
Except for Professor D Banister, who has been a director for more than ten years, all of the non-
executive directors are considered independent by the Board and Mr D Mapp is the Senior
Independent Director.
The Chairman is mainly responsible for the running of the Board ensuring that all directors receive
sufficient, relevant and timely information on financial, business and corporate issues prior to
meetings. The Chief Executive’s responsibilities are concerned with co-ordinating the Group’s
business and implementing Group strategy.
Major acquisitions and disposals require Board approval. The Board also considers key
appointments and significant employee issues, as well as social, environmental and ethical
matters. All directors are equally accountable for the proper stewardship of the Company’s affairs.
The non-executive directors have a particular responsibility for ensuring that the business strategies
proposed are fully discussed and critically reviewed. This ensures the directors act in the best long-
term interests of shareholders, whilst taking account of the interests of employees, customers,
suppliers and the communities in which the businesses operate. The non-executive directors also
test fully the operational performance of the whole Group.
All directors have full and timely access to relevant information. Directors are also provided with
the opportunity for training to ensure they are kept up to date on relevant new legislation and
changing commercial risks. All directors are able to seek independent professional advice in the
performance of their duties as directors if necessary.
All directors, in accordance with the Code, will submit themselves for re-election at least once
every three years.
During 2003 eight scheduled Board meetings were held. Matters arising between scheduled Board
meetings which require Board approval are dealt with by committee appointed by the Board.


Corporate Governance continued

The frequency of attendance at Board meetings during the year was as follows:
Number of meetings
Board Meetings attended during 2003
R Kiernan (Chair) 7
D Smith 8
A Foye 8
R Horton 8
J Conibear 6
D Banister 7
D Mapp 6
D Wallace 8
N Berwin 8
During 2003 the Board had three standing committees, the Audit Committee, the Remuneration
Committee and the Nominations Committee, each of which operates within defined terms of
reference. The Audit Committee met three times during 2003 and the Remuneration Committee
met four times. The membership of each committee and the frequency of attendance at committee
meetings during the year were as follows:
Number of meetings
Audit Committee attended during 2003
D Mapp (Chair) 3
R Kiernan 3
N Berwin 3
Number of meetings
Remuneration Committee attended during 2003
D Wallace (Chair) 4
R Kiernan 4
D Mapp 3
From 1 January 2004 the Audit Committee will be chaired by Mr N Berwin.
During 2003 a Nominations Committee was formally constituted, comprising Mr N Berwin
(Chair), Mr R Kiernan and Mr D Smith, to consider the successor to Mr R Kiernan and, following
a search conducted with the assistance of independent consultants Spencer Stuart, recommended
the appointment of Mr D Cruickshank.
Following the appointment of Mr Cruickshank, the Nominations Committee is now comprised of
Mr D Cruickshank (Chair), Mr N Berwin and Mr D Mapp.
Relations with Shareholders
The Company encourages two way communication with both its institutional and private
investors and responds appropriately to all queries received orally or in writing. The Chief
Executive and the Group Finance Director attended more than fifty meetings with analysts and
institutional shareholders and the trade and financial press during the year 2003.
All shareholders have at least twenty working days’ notice of the Annual General Meeting at which
all directors are available for questions. The number of proxy votes received for and against each
resolution is disclosed at the Annual General Meeting and a separate resolution is proposed on each
item.
Accountability and Audit
Internal Control and Risk Management
The Board is responsible for the Group’s system of internal controls and for reviewing the
effectiveness of these systems. Such systems can provide only reasonable but not absolute assurance
against material misstatement or loss as they are designed to manage, rather than eliminate the risk
of failure to achieve business objectives.



The Board confirms that the effectiveness of the system of internal controls for the year ended 31
December 2003 and the period up to 2 March 2004 has been reviewed in line with the criteria set
out in Internal Control: Guidance for Directors on the Combined Code (‘The Turnbull Report’)
published in September 1999. In carrying out this review the Board takes account of material
developments through reports by the Group Finance Director, the Audit Committee and the Risk
Assessment Committee and this is explained further below.
The Group has operated under an established internal control framework which can be described
under five headings:
Financial reporting
The Group has a comprehensive system for reporting financial results to the Board. Each operating
unit prepares monthly results with a comparison against budget. The Board reviews these for the
Group as a whole and determines any appropriate action. Toward the end of each financial year the
operating units prepare detailed budgets for the following year which are consolidated and
presented to the Board for review before being formally adopted. Forecasts are updated at least
three times during the year.
Quality and integrity of personnel
One of the key requirements of an effective system of internal control is the integrity of personnel.
The Group has policies on personnel selection which utilise procedures (including the follow up of
references) to ensure that staff of suitable calibre and integrity are employed.
Operating unit financial controls
The executive directors have defined the financial controls and procedures with which each
operating unit is required to comply. Compliance with these procedures is regularly reviewed by
senior management.
Computer systems
Much of the Group’s financial and management information is processed by and stored on
computer systems. Accordingly, the Group has established controls and procedures over the
security of data held on computer systems. Also, the Group has put in place arrangements for
computer processing to continue and data to be retained in the event of the complete failure of the
Group’s own data processing facilities.
Risk Management
The Board has a formalised internal risk assessment procedure in relation to Code Provision D2.1.
As part of the process the Board identified and agreed key ‘high level’ risks which affect the Group,
the acceptable level of such risks and the controls and reporting procedures. These risks are
summarized on a Risk Analysis Document and this has been communicated in an appropriate form
to each of the Group’s business units. The Group operates an ongoing process to identify and
evaluate significant risks affecting the business. Managers throughout the Group are encouraged to
notify an executive Board member if they become aware of any major factors that may adversely
affect the business either from a control view point or from factors in the wider business
environment. Any such matters are then immediately referred to the Group Finance Director who
notes these into the Risk Register which is maintained at head office.
Managers are also formally required, twice each year, to re-evaluate and report on the business
environment and any risks that may be present. All urgent issues are dealt with either immediately
or referred to a standing Risk Assessment Committee consisting of the Chief Executive (Chair) and
the three other Group executive directors. In any event the Risk Assessment Committee meets
twice a year to review progress on issues identified in the Risk Register and to consider the major
risk categories identified in relation to the business and the Risk Register. In the review process the
Risk Assessment Committee considers contributing factors and recommends appropriate early
warning systems and actions.



Audit Committee and Auditors
The Audit Committee, comprising of three independent non-executive directors, has specific
terms of reference which deal with its authority and duties and comply with the Code. It meets at
least twice a year with the external auditors attending. The Committee’s duties include the review
of the Group’s accounting policies, financial reporting procedures, audit fees (including
remuneration received by auditors for non-audit work) and the Group’s internal controls,
including a review of the Risk Register and the Risk Analysis Document. Part of each meeting of
the Audit Committee is held between the non-executive directors and the external auditors in
private.
Internal Audit
The Board, through the Audit Committee, introduced a Group internal audit function during
2003. The function operates under a Charter of Group Internal Audit, including adherence to the
Code of Ethics, Standards and Guidelines of the Institute of Internal Auditors.
Going Concern Basis
The directors are responsible for preparing the financial statements on the going concern basis
unless it is inappropriate to presume the Group will continue in business. After making enquiries,
the directors have formed a judgment, at the time of approving the financial statements, 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. This statement also forms part of the Operating
and Financial Review.


Directors’ Remuneration Report

Introduction
This 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.
The Regulations require the auditors to report to the Company’s members on the ‘‘auditable part’’
of the Directors’ Remuneration Report and to state whether in their opinion that part of the
report has been properly prepared in accordance with the Companies Act 1985 (as amended by the
Regulations). The report has therefore been divided into separate sections for audited and
unaudited information.
Unaudited Information
Remuneration Committee
The Remuneration Committee comprises Messrs D Wallace, R Kiernan, D Mapp and, following
his appointment, Mr D Cruickshank, under the chairmanship of Mr D Wallace. None of the
Committee has any personal financial interest (other than as shareholders), conflicts of interests
arising from cross-directorships or day-to-day involvement in running the business.
The Committee measures the performance of the executive directors before recommending their
annual remuneration, bonus awards and awards of share options to the Board for final
determination. The remuneration of the non-executive directors is recommended by
Mr D Wallace and also takes account of the time spent on Board matters. The final
determinations are made and approved by the Board as a whole, although no director plays a
part in any discussion about his own remuneration.
The Committee consults the Chief Executive about its proposals and has access to professional
advice from inside and outside the Company. During 2003 New Bridge Street Consultants
provided advice on structuring directors’ remuneration packages. New Bridge Street Consultants
did not provide any other services to the Group.
The Committee met four times during 2003, to review general policy and to agree remuneration
for executive and non-executive directors for recommendation to the Board.
Remuneration Policy
Taylor & Francis operates globally and its continued success is dependent on its ability to recruit,
retain and reward appropriate high calibre staff. The rewards for the Chief Executive, for the other
executive directors and for senior staff must therefore be competitive with global salary scales and,
in particular, must reflect the international dimension of the Group. However, individual
performance targets must be demanding, so that outstanding performance is appropriately
rewarded. Whatever the geographical location of staff, their rewards must enable the Company to
attract the best, and to motivate them as a team.
The Remuneration Committee works within the fundamental principles of corporate governance,
of independence, accountability, transparency of information and alignment of reward with
performance. In making its judgements it utilises external independent advice, both commissioned
and from reputable surveys.
In 2002 the committee recognised that the remuneration of the directors was generally in the
lowest quartile of companies which are comparable, whether by market capitalisation, revenue,
number of employees or sector. During 2003 the Committee began the process of reviewing the
directors remuneration packages in order to reflect the continuing success of the Group, and to
safeguard this for the future. The committee’s review is continuing.


Directors’ Remuneration Report continued

There are four elements of the remuneration package for executive directors:
r Basic salary and benefits;
r Annual bonus payments;
r Share option incentives; and
r Pension benefits
These are summarised below.
Basic Salary
This is reviewed annually and determined by the Board prior to the beginning of each year, having
regard to individual performance and responsibility. External market factors are taken into account
as appropriate.
In addition to basic salary, executive directors receive certain benefits-in-kind, principally private
medical insurance.
Annual Performance Related Bonus Scheme
The Group’s policy is that a significant proportion of the maximum potential remuneration of the
executive directors should be performance related. Accordingly, the executive directors participate
in an annual bonus scheme. The level of potential bonus is expressed as a percentage of basic salary,
with the executive directors eligible to earn up to 50 per cent of basic salary, subject to the
achievement of financial targets on a sliding scale primarily in respect of revenue, operating profit
and earnings per share. The targets are set at the beginning of the year by the Remuneration
Committee and, if appropriate, adjusted to take account of acquisitions made during the period.
For 2003, the maximum and actual bonuses payable for achievement of each of the targets, as a
percentage of basic salary, were as follows:
Maximum bonus payable

Group Group Actual
Group operating earnings Other bonus
revenue profit* per share* criteria Total awarded
% % % % % %

D Smith 17.0 17.0 16.0 – 50 22
A Foye 12.5 12.5 12.5 12.5 50 28
R Horton 12.5 12.5 – 25.0 50 20
J Conibear 12.5 12.5 – 25.0 50 25

* Excluding exceptional items and goodwill amortisation.

Awards under the bonus scheme are non-pensionable.
Share Option Incentives
The Board considers that it is in the best interests of shareholders for executive directors, senior
management and other employees with the Group to have an interest in the shares of the
Company. Grants of share options are, therefore, considered upon executives joining the Group
and periodically thereafter by reference to their position within the Group, their performance and
the status of options currently outstanding. Options, incorporating performance criteria, were
granted to the executive directors during 2003 as shown on page 24. The directors are not eligible
to participate in the Company’s Save as You Earn share option scheme.
The exercise price of the options granted is equal to the market value of the Company’s shares on
the date the options were granted.



The company does not currently operate any long-term incentive schemes other than the share
option schemes described above but the Remuneration Committee is considering the introduction
of a new long-term incentive scheme.
Pension Benefits
Executive directors and employees of certain UK subsidiaries were eligible until 8 March 2002
(when the scheme was closed to new entrants) to join the Taylor & Francis Limited Group Pension
and Life Assurance Scheme. This is a defined benefit scheme which, subject to Inland Revenue
limits and length of service, provides a pension of up to two-thirds of final salary (excluding
benefits) at the age of 63. Dependants are eligible for dependants’ pensions and the payment of a
lump sum in the event of the member’s death in service.
No payments other than basic salary are pensionable.
As he joined the Company after the above pension scheme was closed to new entrants, Mr D Smith
does not participate in the scheme and instead receives an additional 10% of his basic salary.
Performance Graph
The following graph shows the Company’s performance, measured by total shareholder return,
compared with the performance of the FTSE 250 Share Index, also measured by total shareholder
return, in the 5 year period ended 31 December 2003. The FTSE 250 Share Index has been
selected for this comparison because the Company is a constituent company of that index.

5 Year Total Shareholder Return Index for FTSE 250 Share Index as at 31 December 2003

300

250

200
Return Index

150

100

50

0
Jan 99 Jan 00 Jan 01 Jan 02 Jan 03

Taylor & Francis Group plc FTSE 250

Director’s Contracts
At 31 December 2003 and in accordance with the Company’s policy, the four executive directors
had service contracts with an indefinite term under which twelve months’ notice must be given by
the Company or by the director.
The details of the executive director’s contracts are summarised in the table below:
Date of Contract

D Smith 8 April 2002
A Foye 1 January 1998
R Horton 1 January 1998
J Conibear 1 November 2001



In the event of early termination, the directors’ contracts provide for compensation up to a
maximum of basic salary for the notice period, in addition to the continued provision of private
medical insurance and pension benefits during the notice period. Mr D Smith’s contract also
provides for the payment of any bonus which would have been earned during the notice period.
The appointments of non-executive directors are at the will of the parties but are envisaged to last
for three years, following which they are reviewed annually. Non-executive directors are not
eligible to participate in any of the Company’s share option schemes or join any Company pension
scheme.
Audited Information
Aggregate Directors’ Remuneration
The total amounts for director’s remuneration were as follows:
2003 2002
£’000 £’000

Emoluments 1,108 998
Gains on exercise of share options – 4,437

1,108 5,435

Directors’ Emoluments
Bonus Benefits Total Total
Salary Fees accrued in kind 2003 2002
£’000 £’000 £’000 £’000 £’000 £’000

Executive Directors
D Smith 297 – 65 1 363 347
A Foye 173 – 48 1 222 175
R Horton 147 – 29 1 177 151
J Conibear 147 – 37 1 185 151
A Selvey (resigned 6 April 2002) – – – – – 56

764 – 179 4 947 880
Non-Executive Directors
R Kiernan – 60 – – 60 40
D Banister – 22 – – 22 19
D Mapp – 26 – – 26 20
D Wallace – 26 – – 26 20
N Berwin – 27 – – 27 19

764 161 179 4 1,108 998

The salary figure for Mr D Smith includes a payment in lieu of pension equal to 10% of his basic
salary.
Mr D Cruickshank, appointed 14 January 2004, receives annual fees of £85,000.



Directors’ Share Interests
The directors who held office at 31 December 2003 had the following interests in the issued share
capital of the Company :
At 31 December 2003 At 31 December 2002*
Ordinary Shares Ordinary Shares

Non- Non-
Beneficial Beneficial Beneficial Beneficial

R Kiernan 22,493 356,162 184,993 356,162
D Smith 16,500 – 16,500 –
A Foye 54,081 – 44,081 –
R Horton 114,054 – 239,054 –
J Conibear – – – –
D Banister 1,785,772 5,078,400 1,861,147 5,078,400
D Mapp 17,016 – 17,016 –
D Wallace 1,500 – 1,500 –
N Berwin – – – –

* Or date of appointment if later

In addition to the beneficial interests in shares in the Company as noted above, the executive
directors of the Company (Messrs Smith, Foye, Horton and Conibear) are for the purposes of the
Companies Act 1985 regarded as interested in the 562,500 Ordinary Shares which Ogier
Employee Benefit Trustee Limited as trustee of the Taylor & Francis Group 1997 Employee
Benefit Trust holds. All Taylor & Francis Group employees (including executive directors) are
potential beneficiaries under this trust.
The figures for Mr D Banister exclude 6,170,000 Ordinary Shares held as trustees by Coutts & Co
(included in the interests of The Royal Bank of Scotland Group plc shown on page 13) and
Mr S M A Banister, a connected party of Mr D Banister, save for 430,000 of those shares in which
Mr D Banister has a beneficial interest and which have been included in the above table.
No notification has been received of any change in directors’ share interests from 31 December
2003 to the date of this report. Mr D Cruickshank does not have any interest in the Company’s
issued share capital.
None of the directors had any beneficial interests in the shares of other Group companies.



Directors’ Share Options
Set out below are the options to acquire shares in Taylor & Francis Group plc held by the directors
who served during the year. No performance criteria are attached to options granted prior to 2001.
The performance criteria attached to options granted after 2001 are summarized below.

At 31 Market price At 31
December Exercise at date of December
2002 Granted Lapsed Exercised price (p) exercise (p) 2003 Exercise period

D Smith 39,215 – – – 637.5 – 39,2155 27.05.05 to 26.05.09
39,216 – – – 637.5 – 39,2166 27.05.05 to 26.05.09
58,479 – – – 427.5 – 58,4795 03.10.05 to 02.10.09
58,480 – – – 427.5 – 58,4806 03.10.05 to 02.10.09
– 28,696 – – 517.5 – 28,6967 18.11.06 to 17.11.10
– 28,695 – – 517.5 – 28,6958 18.11.06 to 17.11.10

195,390 57,391 – – 252,781

A Foye 227,800 – – – 13.33 – 227,800 06.11.00 to 05.11.04
11,111 – – – 585.0 – 11,1111 26.04.04 to 25.04.11
11,111 – – – 585.0 – 11,1112 26.04.04 to 25.04.11
22,222 – – – 585.0 – 22,2223 26.04.04 to 25.04.11
11,372 – – – 637.5 – 11,3725 27.05.05 to 26.05.09
11,373 – – – 637.5 – 11,3736 27.05.05 to 26.05.09
– 19,942 – – 432.5 – 19,9427 30.04.06 to 29.04.10
– 19,942 – – 432.5 – 19,9428 30.04.06 to 29.04.10

294,989 39,884 – – 334,873

R Horton 9,402 – – – 585.0 – 9,4021 26.04.04 to 25.04.11
9,402 – – – 585.0 – 9,4022 26.04.04 to 25.04.11
18,803 – – – 585.0 – 18,8033 26.04.04 to 25.04.11
9,804 – – – 637.5 – 9,8045 27.05.05 to 26.05.09
9,804 – – – 637.5 – 9,8046 27.05.05 to 26.05.09
– 17,052 – – 432.5 – 17,0527 30.04.06 to 29.04.10
– 17,052 – – 432.5 – 17,0528 30.04.06 to 29.04.10

57,215 34,104 – – 91,319

J Conibear 11,764 – – – 510.0 – 11,7645 01.11.04 to 31.10.11
11,765 – – – 510.0 – 11,7656 01.11.04 to 31.10.11
23,529 – – – 510.0 – 23,5294 01.11.04 to 31.10.11
9,804 – – – 637.5 – 9,8045 27.05.05 to 26.05.09
9,804 – – – 637.5 – 9,8046 27.05.05 to 26.05.09
– 17,052 – – 432.5 – 17,0527 30.04.06 to 29.04.10
– 17,052 – – 432.5 – 17,0528 30.04.06 to 29.04.10

66,666 34,104 – – 100,770

1
Options vest if earnings per share growth, excluding exceptional items, goodwill amortisation and inflation (‘‘normalised, inflation-
adjusted earnings per share growth’’) is at least 3% per year in each of the three years ending 31 December 2003. The 3% target
having been achieved in each of the three years ending 31 December 2003, these options have vested.
2
Options vest if normalised, inflation-adjusted earnings per share growth is at least 10% per year in each of the three years ending
31 December 2003. The 10% target having been achieved in each of the three years ending 31 December 2003, these options have
vested.
3
100% of options vest if normalised, inflation-adjusted earnings per share growth was at least 17% in the year ended 31 December
2001. Actual normalised, inflation-adjusted earnings per share growth exceeded 17% in 2001 and hence these options have vested.
4
100% of options vest if normalised, inflation-adjusted earnings per share growth was at least 17% in the year ended 31 December
2002. Actual normalised, inflation-adjusted earnings per share growth exceeded 17% in 2002 and hence these options have vested.



5
31 December 2004.
6
Options vest if normalised, inflation adjusted earnings per share growth is at least 10% per year in each of the three years ending
31 December 2004.
7
31 December 2005.
8
Options vest if normalised, inflation adjusted earnings per share growth is at least 10% per year in each of the three years ending
31 December 2005.

There have been no variations to the terms and conditions or performance criteria for share options
during the ﬁnancial year.
The market price of the Company’s ordinary shares at 31 December 2003 was 509.0p and the
range during the year was 345.0p to 565.0p. The average market price during the year was 536.9p.



Directors’ Pension Entitlements
Three directors who served during the year are members of the Company’s final salary pension
scheme described on page 21 and have accrued entitlements under the scheme as follows:
Accrued Increase in Accrued
pension Real accrued pension
31 increase in pension 31
December accrued (excluding December Normal Spouse/
2002 pension inflation) 2003 Age at retirement dependant
£’000 £’000 £’000 £’000 year end age benefits

A Foye 42 10 11 53 41 63 50%
R Horton 15 2 2 17 46 63 50%
J Conibear 4 4 4 8 52 63 50%

Members of the scheme may take a proportion of the total pension as a lump sum payment
calculated in accordance with the scheme rules. Members can retire early subject to penalty. After
retirement, the pensions of the scheme members will increase by the lower of the increase in the
Retail Price Index or 5% p.a.
The following table sets out the transfer values of the accrued benefits under the scheme for the
directors who served during the year, calculated in a manner consistent with ‘‘Retirement Benefit
Schemes – Transfer Values (GN11)’’ published by the Institute of Actuaries and the Faculty of
Actuaries:
Transfer Transfer
value value
31 December Increase in 31 December
2002 transfer value 2003
£’000 £’000 £’000

A Foye 157 61 218
R Horton 73 20 93
J Conibear 27 30 57

The transfer values disclosed above do not represent a sum paid or payable to the individual
director; instead they represent a potential liability of the pension scheme.
Members of the scheme have the option to pay Additional Voluntary Contributions; no directors
made any contributions in the current or preceding year.
Approval
This report was approved by the Board of Directors and signed on its behalf by:

D Wallace
Director 2 March 2004


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 of the
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 consider that they have:
r selected suitable accounting policies and applied them consistently;
r made judgments and estimates that are reasonable and prudent; and
r followed applicable United Kingdom accounting standards.
The directors are responsible for ensuring that the Group keeps proper accounting records which
disclose with reasonable accuracy at any time the financial position of the Group and enable them
to ensure that the financial statements comply with the Companies Act 1985. They are responsible
for the Group’s system of internal financial controls, for safeguarding the assets of the Group and
hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.


Report of the Auditors

Independent Auditors’ Report to the Members of Taylor & Francis Group plc
We have audited the financial statements of Taylor & Francis Group plc for the year ended
31 December 2003 which comprise the consolidated profit and loss account, the balance sheets,
the consolidated cashflow statement, the consolidated statement of total recognised gains and losses
and the related notes numbered 1 – 35. These financial statements have been prepared under the
accounting policies set out therein. We also audited the information in the part of the Director’s
Remuneration Report that is described as having been audited.
This report is made solely to the Group’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
Group’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 Group and the Group’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 Director’s 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, auditing standards, and the Listing Rules of the Financial Services Authority.
We report to you our opinion as to whether the financial statements give a true and fair view and
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 or the
Listing Rules regarding directors’ remuneration and transactions with the Company and other
members of the Group is not disclosed.
We review whether the corporate governance statement reflects the Company’s compliance with
the seven provisions of the Combined Code specified for our review by the Listing Rules and we
report if it does not. We are not required to consider whether the Board’s statements on internal
control cover all the risks and controls, or to form an opinion on the effectiveness of the Group’s
corporate governance procedures or its risk and control procedures.
We read the directors’ report and other information contained in the annual report for the above
year as described in the contents section including the unaudited part of the Director’s
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


Report of the Auditors continued

presentation of information in the financial statements and the part of the Directors’ Remuneration
Report described as having been audited.
Opinion
In our opinion:
r the financial statements give a true and fair view of the state of affairs of the Company and
the Group as at 31 December 2003 and of the profit of the Group for the year then ended;
and
r 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.

Deloitte & Touche LLP
Chartered Accountants and Registered Auditors
Reading 2 March 2004


Consolidated Profit and Loss Account

For the Year Ended 31 December 2003
2003
Before goodwill 2003
amortisation Goodwill
and amortisation
exceptional and exceptional 2003 2002
items items Total Total
Note £’000 £’000 £’000 £’000

Turnover
Continuing operations 147,108 – 147,108 147,365
Acquisitions 26,571 – 26,571 –

Total turnover 2 173,679 – 173,679 147,365
Net operating costs
Operating costs before goodwill
amortisation 3,5 (130,569) (3,286) (133,855) (114,203)
Goodwill amortisation 11 – (9,776) (9,776) (7,251)

Total net operating costs (130,569) (13,062) (143,631) (121,454)

Operating profit
Continuing operations 37,653 (10,059) 27,594 25,911
Acquisitions 5,457 (3,003) 2,454 –

Total operating profit 3 43,110 (13,062) 30,048 25,911
Interest receivable and similar
income 6 95 166
Interest payable and similar
charges 7 (3,620) (2,980)

Profit on ordinary activities
before taxation 26,523 23,097
Tax on profit on ordinary
activities 8 (9,750) (9,420)

after taxation 16,773 13,677
Dividends 9 (4,114) (3,761)

Profit for the financial year
transferred to reserves 12,659 9,916

Earnings per ordinary share
Diluted (normalised) (p) 10 34.19 26.97
Diluted (p) 10 19.55 15.96
Basic (p) 10 19.69 16.12


Consolidated Statement of Total Recognised
Gains and Losses
2003 2002
£’000 £’000

Proﬁt attributable to shareholders 16,773 13,677
Currency translation differences on foreign currency net investments (1,444) (5,121)

Total recognised gains and losses since last annual report 15,329 8,556


Group and Company Balance Sheets

At 31 December 2003
Group Company

2003 2002 2003 2002
Note £’000 £’000 £’000 £’000

Fixed assets
Intangible assets 11 177,054 109,658 – –
Tangible assets 12 6,194 4,565 – –
Investments 13 6,705 – 163,268 94,029

189,953 114,223 163,268 94,029
Current assets
Stocks 14 34,995 31,098 – –
Debtors due within one year 15(a) 38,194 34,754 4,357 9,496
Debtors due after more than one year 15(b),18 500 1,028 – –
Investments 16 – 11,988 – 11,988
Cash at bank and in hand 13,132 6,070 3,448 1,301
86,821 84,938 7,805 22,785

Creditors: amounts falling due
within one year 17(a) (19,173) (63,188) (3,165) (44,573)
Net current assets/(liabilities) 67,648 21,750 4,640 (21,788)

Total assets less current liabilities 257,601 135,973 167,908 72,241
Creditors: amounts falling due after
more than one year 17(b) (95,099) – (95,099) –
Accruals and deferred income 20 (72,835) (58,089) (665) (991)
89,667 77,884 72,144 71,250

Capital and reserves
Called up share capital 21 4,293 4,284 4,293 4,284
Share premium account 22 44,842 44,283 44,842 44,283
Reserve for own shares 23 1,267 1,267 1,267 1,267
Proﬁt and loss account 24 39,265 28,050 21,742 21,416
Equity shareholders’ funds 89,667 77,884 72,144 71,250

These ﬁnancial statements were approved by the Board of Directors on 2 March 2004 and were
signed on its behalf by:

D Smith A Foye
Director Director


Consolidated Cashflow Statement

2003 2002
Note £’000 £’000

Net cash inflow from operating activities 26 44,891 31,008

Returns on investments and servicing of finance
Interest received 95 166
Interest paid (3,353) (3,112)

Net cash outflow from returns on investments and
servicing of finance (3,258) (2,946)
Taxation
Corporation tax paid (7,479) (5,088)
Overseas taxes paid (1,557) (1,008)

Tax paid (9,036) (6,096)
Capital expenditure and financial investment
Purchase of publishing goodwill 11 (3,469) (571)
Tangible fixed assets acquired 12 (3,002) (2,820)
Tangible fixed assets sold 47 113
Purchase of unlisted investments 13 (6,705) –
Net cash outflow from investing activities (13,129) (3,278)

Acquisitions
Purchase of businesses/subsidiary undertakings (net of cash
and overdrafts acquired) 34 (82,379) (2,946)
Net cash outflow from acquisitions (82,379) (2,946)

Equity dividends paid (3,844) (3,484)

Net cash (outflow)/inflow before use of liquid
resources and financing (66,755) 12,258

Management of liquid resources 28 11,988 (6,487)

Financing
Net loans drawn/(repaid) 61,602 (4,790)
Proceeds (net) from share issues 568 351
Payment of deferred consideration – (844)

Net cash inflow/(outflow) from financing 62,170 (5,283)

Increase in cash 27 7,403 488


Notes to the Accounts

1 Accounting Policies
The financial statements have been prepared in accordance with applicable United Kingdom
accounting standards. The particular accounting policies adopted are described below and 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.
Basis of Consolidation
The consolidated financial statements incorporate the accounts of the Company and all of its
subsidiaries. The results of subsidiaries acquired are included in the consolidated financial
statements under the acquisition method from the date of acquisition and those disposed of up to
the date of disposal.
Profit of Parent Company
As permitted by Section 230 of the Companies Act 1985, the profit and loss account of the parent
Company is not presented as part of these accounts. The parent Company’s profit for the financial
year amounted to £5,253,000 (2002: £4,478,000).
Intangible Fixed Assets
Publishing goodwill, comprising intellectual property rights on individual titles acquired, is valued
at cost less provision for impairment and is written off on a straight line basis over 20 years.
Goodwill arising on the acquisition of subsidiary companies and businesses is calculated as the
excess of the purchase consideration over the fair value of the net identifiable assets and liabilities
acquired and is then written off over its estimated useful life (normally 20 years) on a straight line
basis. The Board carries out a full impairment review on each acquired subsidiary or business after
the first full year following its acquisition or where a change in circumstances warrants a further
review.
Tangible Fixed Assets
Depreciation is provided to write off the cost less the estimated residual value of tangible fixed
assets in equal annual instalments over the estimated useful lives of the assets. The rates of
depreciation are as follows:
Freehold property – 80 years
Leasehold property – over the remaining term of lease
Plant and machinery – 3 to 15 years
Investments
Investments held as fixed assets are stated at cost less provision for any impairment in value. Those
held as current assets are stated at the lower of cost and net realisable value. Investments held by the
Company in subsidiaries denominated in foreign currencies are translated at rates of exchange
ruling at the balance sheet date.
Stocks
Stocks are stated at the lower of cost and net realisable value. Cost includes materials and direct
labour appropriate to the relevant stage of production. Net realisable value is based on estimated
sales price less all further costs to completion and all relevant marketing, selling and distribution
costs.
Foreign Currencies
Unhedged monetary assets and liabilities of UK companies denominated in foreign currencies are
translated at the rates of exchange ruling at the balance sheet date. Transactions denominated in
foreign currencies are recorded at the rates of exchange ruling in the period in which the amounts


Notes to the Accounts continued

are transacted, unless matching forward foreign exchange contracts have been entered into, in
which case the rate specified in the relevant contract is used. Exchange adjustments arising from the
translation of the opening net investment in the Group’s foreign subsidiaries are taken to reserves as
are exchange adjustments arising on the translation of foreign currency borrowings used to fund
the acquisition of foreign subsidiaries, to the extent that they can be matched with exchange
adjustments in the relevant net equity investment. All other exchange differences are reflected in
the profit and loss account.
Operating Leases
Rental charges under operating leases are charged to the profit and loss account in equal amounts
over the lease term.
Taxation
The charge for taxation is based on the profit for the year and takes into account taxation deferred
because of timing differences between the treatment of certain items for taxation and accounting
purposes. Deferred tax is provided in full on timing differences which result in an obligation at the
balance sheet date to pay more tax, or a right to pay less tax, at a future date, at rates expected to
apply when they crystallise based on current tax rates and law. Deferred tax assets are recognised to
the extent that it is regarded as more likely than not that they will be recovered. Deferred tax assets
and liabilities are not discounted.
Pension Costs
The Group operates five main pension schemes.
In the UK the Group operates four schemes. The first provides benefits based on final pensionable
pay (the ‘‘Final Salary Scheme’’) and the other three provide benefits on the basis of contributions
made. The assets of the schemes are held separately from those of the Group, being invested with
insurance companies. Contributions to the Final Salary Scheme are charged to the profit and loss
account so as to spread the cost of pensions over employees’ working lives with the Group.
Contributions to the remaining three schemes are charged to the profit and loss account in the
period in which they are payable.
In the US the Group also operates a pension scheme, the benefits of which are based on
contributions made. Contributions to the scheme are charged to the profit and loss account in the
period in which they are payable.
Financial Instruments
Derivative instruments utilised by the Group are interest rate swaps and forward foreign exchange
contracts. The Group does not enter into speculative derivative contracts. All derivative
instruments are used for hedging purposes to alter the risk profile of an existing underlying
exposure of the Group in line with the Group’s risk management policies. Amounts payable or
receivable in respect of interest rate swaps are recognised as adjustments to interest expense over the
period of the contracts.
Any termination payments are taken to the profit and loss account.



2 Analysis of Turnover
2003 2002
Geographical analysis of turnover by destination £’000 £’000

United Kingdom 39,542 32,171
North America 68,891 62,196
Europe 31,100 24,854
Rest of the world 34,146 28,144

173,679 147,365

The above analysis shows turnover by geographical location of the customer or agent through
whom orders are placed.
2003 2002
Geographical analysis of turnover by origin £’000 £’000

United Kingdom 112,238 106,677
United States of America 54,134 34,324
Europe 7,307 6,364

173,679 147,365

2003 2002
Analysis of turnover by class of business £’000 £’000

Journals 77,225 70,998
Books 96,454 76,367

173,679 147,365

The directors have not provided additional segmental information in respect of proﬁt before tax
and net assets as they believe this could be seriously prejudicial to the business.
The acquisition of CRC Press (see note 34) contributed £20.5 million to books turnover and
£2.9 million to journals turnover during the period. £17.5 million of CRC Press turnover
originated in the United States of America and £5.9 million in the United Kingdom.
The geographical analysis of the turnover of CRC Press by destination was as follows:
Geographical analysis of turnover by destination CRC Press £ million

United Kingdom 2.6
North America 15.4
Europe 3.0
Rest of the world 2.4

23.4



3 Operating Profit
Continuing
operations Acquisitions Total Total
2003 2003 2003 2002
Net operating costs £’000 £’000 £’000 £’000

Increase in stock of finished goods
and work in progress (1,322) (106) (1,428) (807)
Raw materials and consumables 45,934 4,262 50,196 39,446
Depreciation of tangible and
intangible fixed assets 9,026 2,912 11,938 8,743
Staff costs in total (note 4) 23,449 7,907 31,356 24,711
Other operating charges
(including exceptional items
(note 5)) 42,523 9,142 51,665 49,367
Other operating income (96) – (96) (6)

119,514 24,117 143,631 121,454

The only acquisition to have a material impact on operating costs was CRC Press. The operating
costs of CRC Press comprise £56,000 increase in stock of finished goods and work in progress,
£3,579,000 raw materials and consumables, £295,000 depreciation of tangibles and intangibles
fixed assets, £6,927,000 staff costs, £68,000 exchange loss and £7,699 other operating charges.
Operating profit is stated 2003 2002
After charging: £’000 £’000

Auditors’ remuneration:
Audit – Group 330 285
Audit – Company 25 25
Taxation compliance and advisory – Group 272 181
Other – Group and Company 144 480
Depreciation and other amounts written off tangible
fixed assets owned 2,162 1,492
Exceptional items (note 5) 3,286 2,581
Goodwill amortisation 9,776 7,251
Hire of plant and machinery: rentals payable under
operating leases 230 299
Hire of other assets: rentals payable under operating leases 3,128 2,503
Exchange (gains)/losses (3,572) 439

2003 2002
After crediting: £’000 £’000

Rents receivable from property 96 6

Included within ‘Auditors’ remuneration: Other – Group and Company’ is an amount of
£127,000 (2002: £480,000) paid to the Group’s auditors in their capacity as reporting accountants
in the attempted acquisition of the BertelsmannSpringer Science and Business Media business.
(2002: Kluwer Academic Publishers)



In addition the Group’s auditors acted for the company in connection with a number of successful
acquisitions during the year. Total fees for their work for these assignments were £326,000. Such
costs have been included within the cost of investments.
4 Staff Numbers and Costs
The average number of persons employed by the Company (including directors) during the
period, analysed by category, was as follows:
Number of employees
2003 2002

Management and administration 198 152
Publishing and distribution 844 679

1,042 831

The aggregate payroll costs of these persons was as follows:
2003 2002
£’000 £’000

Wages and salaries 27,562 21,195
Social security costs 2,730 1,912
Other pension costs (note 32) 1,064 1,604

31,356 24,711

Disclosures on directors’ remuneration, share options, pension contributions and pension
entitlements are provided in the element of the Directors’ Remuneration Report marked as
audited on pages 22 to 26.
5 Exceptional Items
2003 2002
£’000 £’000

Reorganisation and relocation of US book publishing operations 1,705 –
Cost of attempted acquisition of BertelsmannSpringer 1,581 –
Cost of attempted acquisition of Kluwer Academic Publishers, net of
costs recovered – 1,250
Re-organisation and relocation of journal publishing operations – 1,331

3,286 2,581

The estimated tax effect of exceptional items is to reduce the overall tax charge by £511,000
(2002: £399,000).
6 Interest Receivable and Similar Income
2003 2002
£’000 £’000

Bank interest 95 166



7 Interest Payable and Similar Charges
2003 2002
£’000 £’000

Bank loans and loan notes 3,248 2,788
Amortisation of loan premium 372 192

3,620 2,980

8 Tax on Profit on Ordinary Activities
The tax charge comprises:
2003 2002
£’000 £’000

Current tax
UK corporation tax at 30% (2002: 30%) 8,862 7,397
Adjustments in respect of prior years (856) 72
Foreign tax 1,392 1,396

Total current tax 9,398 8,865

Deferred tax
Origination and reversal of timing differences 252 635
Adjustment in respect of prior years 100 (80)

Total deferred tax (note 18) 352 555

Total tax on profit on ordinary activities 9,750 9,420

The current effective tax rate of 35% is higher than that resulting from applying the standard rate of
corporation tax in the UK. The difference is explained below:
2003 2002
% %

Tax on Group profit on ordinary activities at standard UK corporation
tax rate (30) (30)
Effects of:
Expense not deductible for tax purposes – (2)
Movement in short term timing differences 1 2
Other deferred tax movements – 1
Higher tax rates on overseas earnings (1) (2)
Goodwill amortisation (7) (5)
Exceptional items (2) (2)
Prior year adjustments 4 –

Group current tax charge for period (35) (38)



9 Dividends
2003 2002
£’000 £’000

Ordinary equity shares
Interim 1.60p (2002: 1.45p) per share 1,359 1,242
Final* 3.23p (2002: 2.94p) per share 2,755 2,519

4,114 3,761

* See the Directors’ Report for circumstances in which this dividend may alternatively be payable as a second interim dividend or
under the scheme of arrangement.

Holders of 562,500 ordinary shares of 5p each have waived their rights to receive dividends.
10 Earnings Per Share
Basic
The basic earnings per share calculation is based on profit on ordinary activities after taxation of
£16,773,000 (2002: £13,677,000). This profit on ordinary activities after taxation is then divided
by the weighted average number of shares in issue less those non-vested shares held by an employee
share ownership trust, which is 85,175,000 (2002: 84,823,000).
Diluted
The diluted earnings per share calculation is based on the basic earnings per share calculation above
except that the weighted average number of shares includes all dilutive options granted by the
balance sheet date as if those options had been exercised on the first day of the accounting period or
the date of the grant, if later, giving a weighted average of 85,770,000 (2002: 85,697,000). In
accordance with FRS 14 the weighted average number of shares includes the estimated maximum
number of shares payable to the vendors of Routledge Publishing Holdings Limited assuming that
there are no claims for compensation by the Group that will reduce this deferred consideration and
assuming that the Company does not exercise its option to pay the balance of deferred
consideration in cash. The deferred consideration shares are also assumed for the purposes of this
calculation to have been issued on 1 January 2003 at the closing mid-market share price on
31 December 2003 of 509p, making 249,000 (2002: 280,000) ordinary shares potentially issued.
Diluted (normalised)
The diluted earnings per share (normalised) calculation has been made to allow shareholders to gain
a better understanding of the trading performance of the Group. It is based on the diluted earnings
per share calculation above except profits are adjusted for goodwill amortisation and the after tax
effect of exceptional items as follows:
2003 2002
£’000 £’000

Profit on ordinary activities after taxation 16,773 13,677
Goodwill amortisation 9,776 7,251
Exceptional items after tax 2,775 2,182

Normalised profit on ordinary activities after taxation 29,324 23,110



The table below sets out the adjustments in respect of diluted potential ordinary shares:
2003 2002
No. ’000 No. ’000

Weighted average number of shares used in basic earnings per share
calculation 85,175 84,823
Share options 346 594
Shares potentially to be issued or allotted 249 280

Weighted average number of shares used in diluted earnings per share
calculation 85,770 85,697

11 Intangible Fixed Assets
Goodwill
Publishing arising on
goodwill acquisitions Total
Group £’000 £’000 £’000

Cost
At 1 January 2003 2,643 131,361 134,004
Additions 3,469 82,523 85,992
Exchange adjustment (226) (10,147) (10,373)

At 31 December 2003 5,886 203,737 209,623

Amortisation
At 1 January 2003 562 23,784 24,346
Charge for the year 294 9,482 9,776
Exchange adjustment (40) (1,513) (1,553)

At 31 December 2003 816 31,753 32,569

Net book value
At 31 December 2003 5,070 171,984 177,054

At 31 December 2002 2,081 107,577 109,658



12 Tangible Fixed Assets
Long
Freehold leasehold Plant &
property property machinery Total
Group £’000 £’000 £’000 £’000

Cost
At 1 January 2003 182 1,273 9,366 10,821
Arising from acquisitions – – 931 931
Additions – – 3,002 3,002
Disposals – – (1,011) (1,011)
Exchange adjustment – – (329) (329)

At 31 December 2003 182 1,273 11,959 13,414

Depreciation
At 1 January 2003 87 488 5,681 6,256
Charge for year 8 22 2,132 2,162
Disposals – – (964) (964)
Exchange adjustment – – (234) (234)

At 31 December 2003 95 510 6,615 7,220

Net book value
At 31 December 2003 87 763 5,344 6,194

At 31 December 2002 95 785 3,685 4,565

13 Investments Held as Fixed Assets
2003 2002
a) Group £’000 £’000

At 1 January – –
Additions during year 6,705 –

At 31 December 6,705 –

The addition during the year represents the purchase of an unlisted investment.
2003 2002
b) Company £’000 £’000

Shares in Group undertakings
Cost and net book value
At beginning of year 94,029 96,633
Exchange adjustments (8,951) (2,619)
Additions during year 78,190 15

At end of year 163,268 94,029

The addition during the year represents the company’s investment in Frank Cass & Co Limited,
the long term loan to a group undertaking for the acquisition of CRC Press and the purchase of an
unlisted investment.



The companies in which the Company’s interest is more than 10% are as follows:
Country of
registration Ordinary
Company and operation Principal activity shares held

Afterhurst Limited1 England Distribution of books 100%
Bios Scientific Publishers Limited1 England Publishing of books 100%
CRC Press LLC1 USA Publishing of books 100%
Carfax Publishing Limited1 England Dormant 100%
Curzon Press Limited1 England Dormant 100%
Europa Publications Limited England Dormant 100%
Falmer Press Limited1 England Dormant 100%
Parthenon Publishing Group England Medical publishing and 100%
Limited1 communications
Martin Dunitz Limited England Publishing of medical 100%
books and journals
Frank Cass & Co Limited England Publishing of books and 100%
journals
Psychology Press Limited England Publishing of psychology 100%
books and journals
Primal Pictures Limited England Production of film, 16%
compact disc and
multimedia
Routledge Publishing Holdings England Holding company 100%
Limited
Scandinavian University Press England Dormant 100%
(UK) Limited1
Taylor & Francis AB1 Sweden Provision of publishing 100%
services
Taylor & Francis AS1 Norway Publishing of journals 100%
Taylor & Francis Books Inc.1 USA Publishing of books 100%
Taylor & Francis Books Limited1 England Publishing of books 100%
Bios Scientific Publishers Limited1 England Publishing of books 100%
Taylor & Francis Inc.1 USA Publishing and distribution 100%
of books and journals
Taylor & Francis Limited England Publishing and distribution 100%
of journals
Taylor & Francis (Publishers) Inc. USA Holding company 100%
Taylor & Francis Publishing England Provision of publishing 100%
Services Limited services
Tonterton Limited Jersey Holding company 100%
UCL Press Limited1 England Publishing of books 100%
In the opinion of the directors the investments in and amounts due from the Company’s subsidiary
undertakings are worth at least the amounts at which they are stated in the balance sheet. Details of
other non-trading subsidiaries are available from the Company’s registered office.
1
These companies are indirect subsidiaries of Taylor & Francis Group plc.



14 Stocks
2003 2002
Group £’000 £’000

Raw materials 603 557
Work in progress 5,761 6,018
Finished goods and goods for resale 28,631 24,523

34,995 31,098

15(a) Debtors due within one year
2003 2002 2003 2002
Group Group Company Company
£’000 £’000 £’000 £’000

Trade debtors 30,240 28,122 – –
Amounts owed by subsidiary undertakings – – 3,883 8,744
Other debtors 6,036 5,173 474 750
Prepayments and accrued income 1,918 1,459 – 2

38,194 34,754 4,357 9,496

15(b) Debtors after more than one year
2003 2002 2003 2002
£’000 £’000 £’000 £’000

Deferred taxation (see note 18) 500 1,028 – –

16 Investments Held as Current Assets
2003 2002 2003 2002
£’000 £’000 £’000 £’000

Short term bank deposits – 11,988 – 11,988

17(a) Creditors: Amounts Falling Due Within One Year
2003 2002 2003 2002
£’000 £’000 £’000 £’000

Bank loans and overdrafts 574 42,494 – 41,579
Loan notes 455 511 412 452
Trade creditors 4,005 7,637 – –
Amounts owed to subsidiary undertakings – – – –
Corporation tax 8,970 9,288 – –
Other taxes and social security 686 319 – –
Other creditors 1,730 420 – 23
Dividends proposed 2,753 2,519 2,753 2,519

19,173 63,188 3,165 44,573



17(b) Creditors: Amounts Falling Due After More Than One Year
2003 2002 2003 2002
£’000 £’000 £’000 £’000

Bank loans (secured) 95,099 – 95,099 –

The bank loans are secured on the shares held in all material subsidiaries by the Company.
An analysis of the maturity of debt is given in note 19(a).
Loan notes comprise £412,000 (2002: £452,000) and £43,000 (2002: £59,000) of loan notes
payable to the management vendors of Routledge Publishing Holdings Limited and Curzon Press
Limited, respectively. These notes are redeemable up to 1 January 2009 and 4 December 2006,
respectively, at the holders’ option and interest is payable at 0.5% below LIBOR and 1.0% below
LIBOR, respectively.
18 Deferred Taxation
2003 2002
Group £’000 £’000

Deferred taxation asset 500 1,028

2003 2002
The movements during the year were as follows: £’000 £’000

At 1 January 1,028 1,583
Current year charge (252) (635)
Prior year (charge)/credit (100) 80
Reclassification of overseas Corporation Tax (251) –
Exchange difference 75 –

At 31 December 500 1,028

2003 2002
The deferred tax asset consists of the following amounts: £’000 £’000

Depreciation in excess of capital allowances 198 399
Other timing differences 302 629

500 1,028

A deferred tax asset of £500,000 has been recognized as at 31 December 2003, in accordance with
FRS 19. This asset relates mainly to tax deductible expenses in overseas subsidiaries for which relief
has yet to be obtained. The value of this asset is dependant upon future profits from those overseas
subsidiaries and based on forecasts the directors are of the opinion that sufficient profits will be
realised in due course to ensure that the asset is recoverable.



19 Financial Instruments
The Group’s policies as regards derivatives and financial instruments are set out in the Operating
and Financial Review on pages 8 to 9 and the accounting policies on page 35 and form part of
these audited financial statements. The Group does not trade in financial instruments.
Short term debtors and creditors have been omitted from all disclosures other than the currency
profile.
19(a) Maturity Profile of Group Financial Liabilities
2003 2002
£’000 £’000

Within one year or less or on demand 1,029 43,185
More than two years but not more than five years 95,794 –

96,823 43,185
Unamortised element of loan premium (695) (180)

96,128 43,005

The Group had the following committed undrawn borrowing facilities at 31 December:
2003 2002
Expiry date £’000 £’000

In one year or less 3,000 16,800
In more than two years but not more than five years 69,206 –

72,206 16,800

19(b) Interest Rate Profile
The following interest rate and currency profile of the Group’s financial liabilities and assets is after
taking into account any interest rate swaps entered into by the Group.
Financial Liabilities Fixed rate financial liabilities

Weighted
Floating average
rate Fixed rate Weighted period for
financial financial average which the
Total liabilities liabilities interest rate rate is fixed
Currency £’000 £’000 £’000 % Years

At 31 December 2003
GBP 53,529 38,529 15,000 5.19 1.9
USD 43,294 15,363 27,931 3.04 1.9

Gross financial liabilities 96,823 53,892 42,931 4.22 1.9

At 31 December 2002
GBP 30,826 27,626 3,200 6.33 1.0
USD 12,359 – 12,359 5.92 1.0

Gross financial liabilities 43,185 27,626 15,559 6.00 1.0

Interest on floating rate liabilities is based on the relevant national inter bank rates.



Financial Assets Floating Non-
rate Fixed rate interest
financial financial bearing
Total assets assets assets
Currency £’000 £’000 £’000 £’000

At 31 December 2003
GBP 2,889 2,497 – 392
USD 9,170 8,085 – 1,085
AUD 44 24 – 20
CAD 72 – – 72
SGD 32 – – 32
MLR 15 – – 15
NOK 88 88 – –
SEK 61 61 – –
INR 17 – – 17
EUR 744 35 – 709

Gross financial assets 13,132 10,790 – 2,342

At 31 December 2002
GBP 1,963 267 – 1,696
USD 15,430 2,761 11,988 681
AUD 156 142 – 14
CAD 12 – – 12
SGD 112 – – 112
MLR 8 – – 8
NOK 123 123 – –
SEK 76 76 – –
INR 6 – – 6
EUR 172 172 – –

Gross financial assets 18,058 3,541 11,988 2,529

Financial assets comprise cash at bank and in hand of £13,132,000 (2002: £6,070,000) and current
asset investments of £nil (2002: £11,988,000). Non-interest bearing assets are fully liquid and have
no maturity period.
Interest on floating rate bank deposits is based on the relevant national inter bank rate and may be
fixed in advance for up to one month. There were no fixed rate deposits as at 31 December 2003
or 2002.



19(c) Fair Values of Financial Assets and Liabilities
The fair values of the Group’s financial assets and liabilities are not materially different from their
carrying values as at 31 December 2003 and 2002.
Based on market values, the fair values as at 31 December 2003 of derivative financial instruments
held to manage the interest rate and currency profile were as follows:
Carrying Estimated Carrying Estimated
amount fair value amount fair value
2003 2003 2002 2002
£’000 £’000 £’000 £’000

Interest rate swaps – (66) – (479)
Forward foreign exchange
contracts – 3,045 – 2,708

19(d) Hedging
As explained in the Operating and Financial Review on pages 8 to 9, the Group’s policy is to
hedge the following exposures:
r interest rate risk – using interest swaps as appropriate; and
r currency exposures on the projected net surplus US dollar income – using forward foreign
currency contracts.
Gains and losses on instruments used for hedging are not recognised until the exposure that is being
hedged is itself recognised. As at 31 December 2003 and 2002 there were no other unrecognised
gains or losses on instruments used for interest rate or currency hedging save as disclosed in note
19(c) above.
19(e) Currency Profile
The main functional currencies of the Group are sterling and the US dollar. After taking into
account foreign currency borrowings (£43,294,000; 2002: £12,359,000) used to hedge against net
investments in foreign subsidiaries, the remaining monetary assets and liabilities are in the same
currency as the functional currency of the operations involved. Further explanation is given in the
Operating and Financial Review on pages 8 to 9.
20 Accruals and Deferred Income
2003 2002 2003 2002
£’000 £’000 £’000 £’000

Subscriptions received in
advance 49,065 42,414 – –
Accruals 23,770 15,675 665 991

72,835 58,089 665 991



21 Share Capital
2003 2002
Group and Company £’000 £’000

Authorised
125,000,000 (2002: 115,000,000) ordinary shares of 5p each 6,250 5,750

During the year an additional 10 million ordinary shares of 5p each were authorised.
Allotted, called up and fully paid
85,850,668 ordinary shares of 5p each
(2002: 85,670,426 of 5p each) 4,293 4,284

2003 2002
£’000 £’000

At 1 January 4,284 4,227
Options exercised 9 57

At 31 December 4,293 4,284

During the period options to purchase 180,242 ordinary 5p shares were exercised for a
consideration of £568,000.
As at 31 December 2003, outstanding options to subscribe for ordinary shares of 5p were as
follows:
Number Exercise price per share Exercise period

241,550 13.33p 06.11.00 to 05.11.04
15,672 381.50p 25.06.02 to 24.06.06
51,655 427.50p 04.11.02 to 03.11.06
49,805 427.50p 04.11.02 to 03.11.09
15,176 615.00p 08.06.03 to 07.06.07
12,619 591.38p 01.01.04 to 30.06.04
488,511 585.00p 26.04.04 to 25.04.08
47,058 510.00p 01.11.04 to 31.10.08
20,506 479.75p 01.01.05 to 30.06.05
16,143 575.50p 05.12.04 to 04.12.08
414,301 619.00p 26.04.05 to 25.04.09
140,392 672.50p 27.05.05 to 26.05.09
1,597 579.50p 01.08.04
116,959 427.50p 03.10.05 to 02.10.09
19,244 470.25p 01.01.06 to 30.06.06
751,833 432.50p 30.04.06 to 29.04.06
46,158 415.00p 01.08.05
12,063 444.00p 10.07.06 to 09.07.10
13,415 503.50p 01.01.07 to 30.06.07
57,391 517.50p 18.11.06 to 17.11.10

2,532,048



22 Share Premium Account
Group and
Company
£’000

At 1 January 2003 44,283
Premium arising on
– Options exercised during period 559

At 31 December 2003 44,842

23 Reserve for Own Shares
Group and
Company
£’000

At 1 January 2003 and 31 December 2003 1,267

The balance at 31 December 2003 represents deferred consideration payable to the vendors of
Routledge Publishing Holdings Limited if no claims are made against warranties given on the sale
of that company. The balance is payable in stages to 30 November 2005 and can be paid in either
cash or shares at the Company’s option.
24 Reserves
2003 2002 2003 2002
Profit and loss account £’000 £’000 £’000 £’000

At 1 January 28,050 23,255 21,416 21,308
after taxation 16,773 13,677 5,253 4,478
Dividend payable (4,114) (3,761) (4,114) (3,761)
Currency translation difference
on foreign currency net
investments (1,444) (5,121) (813) (609)

At 31 December 2003 39,265 28,050 21,742 21,416

In accordance with the transitional provisions of FRS 17, Retirement Benefits, the following
additional reconciliation is provided showing Group profit and loss account reserves if FRS 17
were to be adopted in full:
2003 2002
Group Group
£’000 £’000

Profit and loss account excluding pension liability 39,265 28,050
Pension liability (note 33) (2,943) (2,291)

Profit and loss account after deducting pension liability 36,322 25,759



25 Reconciliation of Movements in Consolidated Shareholders’ Funds
2003 2002
£’000 £’000

Profit for the year 16,773 13,677
Dividends (4,114) (3,761)

Retained profit for the year 12,659 9,916
Currency translation difference on foreign currency net
investments (1,444) (5,121)
Proceeds of new share issues (net) 568 351
Decrease in reserve for own shares – (844)

11,783 4,302

Opening shareholders’ funds 77,884 73,582

Closing shareholders’ funds 89,667 77,884

26 Reconciliation of Operating Profit to Net Cash Inflow from Operating Activities
2003 2002
£’000 £’000

Operating profit 30,048 25,911
Depreciation and amortisation 11,938 8,743
Decrease/(increase) in stocks 159 (807)
Decrease/(increase) in debtors 4,213 (29)
Decrease in creditors (1,467) (2,810)

Net cash inflow from operating activities 44,891 31,008

CRC Press (see note 34) contributed £1,990,000 to the net cash inflow from operating activities
during the period.
27 Reconciliation of Net Cash Flow to Movement in Net Debt
2003 2002
£’000 £’000

Increase in cash net of overdrafts in the period 7,403 488
(Increase)/decrease in bank loans and loan notes (61,602) 4,790
Cash flow from (decrease)/increase in liquid resources (11,988) 6,487

Change in net debt resulting from cash flows (66,187) 11,765
Foreign exchange translation difference 8,138 2,010

Movement in net debt during the period (58,049) 13,775
Opening net debt (24,947) (38,722)

Closing net debt (note 29) (82,996) (24,947)



28 Management of Liquid Resources
2003 2002
£’000 £’000

Cash withdrawn from/(invested in) deposit accounts 11,988 (6,487)

Cash flow from decrease/(increase) in liquid resources 11,988 (6,487)

29 Analysis of Net Debt
At At 31
1 January Exchange December
2003 Cash flow movement 2003
£’000 £’000 £’000 £’000

Cash at bank and in hand 6,070 7,062 – 13,132
Overdrafts (915) 341 – (574)

Net cash 5,155 7,403 – 12,558
Bank loans and loan notes (42,090) (61,602) 8,138 (95,554)
Current asset investments 11,988 (11,988) – –

Total (note 27) (24,947) (66,187) 8,138 (82,996)

30 Commitments
Annual commitments under non-cancellable operating leases are as follows:
2003 2002

Land & Land &
buildings Other buildings Other
Group £’000 £’000 £’000 £’000

Operating leases which expire:
– Within one year 1,494 141 359 75
– Within two to five years 919 148 1,401 196
– After five years 722 – 494 20

3,135 289 2,254 291

The Group had capital commitments at 31 December 2003 of £517,000 (2002: £130,000).
31 Contingent Liabilities
The Company has guaranteed the overdrafts of certain of its UK subsidiaries, up to a combined
maximum of £3 million.
The Company has also guaranteed £43,000 of loan notes outstanding and issued by its indirect
subsidiary, Taylor & Francis Books Limited.
The Company has also guaranteed the lease commitments of certain of its US subsidiaries which
amount annually to $255,000.
As at 31 December 2003 the Company has entered into forward exchange contracts for a total of
$40.0 million to be converted into sterling, as follows during 2004:
January 2004 $30.0 million @ $1.584
February 2004 $10.0 million @ $1.550



32 Pension Schemes
As explained in the accounting policies set out on page 35, in the UK the Group operates a pension
scheme for eligible UK employees providing benefits based on final pensionable pay (the
‘‘Scheme’’). Contributions are charged to the profit and loss account so as to spread the cost of
contributions over employees’ working lives with the Group. The contributions are determined by
a qualified actuary on the basis of triennial valuations using the projected unit method. The most
recent valuation was at 30 September 2002, and does not take into account any impact of the
general fall in stock markets since that date. Any such impact will be reflected in the next valuation.
The assumptions which have the most significant effect on the results of the valuation are those
relating to the growth rate of the fund and the rates of increase in salaries. A growth rate of 9% for
the fund, a 6.5% salary increase per annum, an increase in pensions of 4.5% per annum and
dividend growth of 5% per annum have been assumed.
The most recent actuarial valuation showed that the market value of the Scheme’s assets was
£4,271,000 and that the actuarial value of those assets represented 66% of the benefits that had
accrued to members, assuming all members were to leave the Scheme at the valuation date with an
entitlement to normal leaving service benefit.
The most recent actuarial valuation also showed that the deficit of the Scheme’s liabilities over
assets on an on-going basis was £2,248,000. In order to address this deficit an additional provision
of £554,000 was made in 2002 to reflect recent concerns about returns generated by equities,
which form the largest part of the Scheme assets.
The pension charge in the profit and loss account (before the additional provision of £554,000 in
2002 referred to above) for the Scheme amounted to £241,000 (2002: £353,000), which is not
materially different from the regular pension cost.
As a result of the actuarial valuation as at 30 September 2002, the Company has increased
contributions from 10.7% to 33.6% of pensionable salaries from 1 January 2004 until 30 September
2006 and 21.4% thereafter. The Scheme is closed to new entrants and so this contribution rate is
likely to increase as the membership ages.
The Group also operates three defined contribution schemes in the UK. Contributions during the
year were £370,000 (2002: £283,000).
In the US the Group operates 2 pension schemes providing benefits based on the value of
contributions paid. £453,000 (2002: £414,000) was paid in respect of the US defined
contributions scheme.



33 Additional FRS 17 Retirement Benefit Disclosures
A full valuation of the Group’s Final Salary Scheme was undertaken as at 30 September 2002 and
updated to 31 December 2003 by a qualified independent actuary. The major assumptions used by
the actuary were as follows:
At 31 At 31 At 31
December December December
2003 2002 2001

Rate of increase in salaries 3.75% p.a. 3.30% p.a. 3.50% p.a.
Limited price indexation pension increases 2.75% p.a. 2.30% p.a. 2.50% p.a.
Discount rate 5.40% p.a. 5.75% p.a. 6.00% p.a.
Inflation assumption 2.75% p.a. 2.30% p.a. 2.50% p.a.
The assets of the Scheme are held in managed funds and cash funds operated by Henderson
Investment Managers. The fair value of the assets held and the expected rates of return assumed are
as follows:
Expected rate Expected rate Expected rate
of return year of return year of return year
commencing Value at commencing Value at commencing Value at
31 December 31 December 31 December 31 December 31 December 31 December
2003 2003 2002 2002 2001 2001
% £’000 % £’000 % £’000

Equities and
property 7.80% 2,938 7.50% 2,620 8.00% 4,573
Bonds 5.10% 347 4.75% 346 5.25% 742
Cash 3.75% 1,408 4.00% 1,472 4.00% 59

4,693 4,438 5,374

The funding position was as follows:
At At At
31 December 31 December 31 December
2003 2002 2001
£’000 £’000 £’000

Total market value of assets 4,693 4,438 5,374
Present value of Scheme liabilities (8,898) (7,711) (5,925)

Deficit in the Scheme (4,205) (3,273) (551)
Related deferred tax credit 1,262 982 165

Net pension liability (2,943) (2,291) (386)

Analysis of amount chargeable to operating profit if FRS 17 were to be adopted:
Year ended Year ended
31 December 31 December
2003 2002
£’000 £’000

Current service cost 349 296
Past service cost – –

Total operating charge 349 296



Analysis of the amount to be credited to other finance income if FRS 17 were to be
adopted:
2003 2002
£’000 £’000

Expected cost return on pension scheme assets 263 418
Interest cost on pension scheme liabilities (420) (354)

Net finance (cost)/return (157) 64

Analysis of amount recognisable in consolidated Statement of Total Recognised Gains
and Losses (STRGL) if FRS 17 were to be adopted:
2003 2002
£’000 £’000

Actual return less expected return on pension scheme assets 279 (1,632)
Experience gains and losses arising on scheme liabilities 225 (713)
Effect of changes in assumptions underlying present value of
scheme liabilities (1,151) (419)

Total actuarial loss recognised in STRGL (647) (2,764)

Movement in deficit during the year:
2003 2002
£’000 £’000

Deficit in Scheme at beginning of year (3,273) (551)
Current service cost (349) (296)
Contributions 221 274
Other finance (costs)/income (157) 64
Actuarial loss (647) (2,764)

Deficit in Scheme at end of year (4,205) (3,273)



History of experience gains and losses:
2003 2002
£’000 £’000

Difference between expected and actual return on
Scheme assets:
Amount (£’000) 279 (1,632)
Percentage of Scheme assets 6% (37)%

Experience gain and losses on Scheme liabilities:
Amount (£’000) 225 (713)
Percentage of present value of Scheme liabilities 3% (9)%

Total amount recognised in STRGL:
Amount (£’000) (647) (2,764)
Percentage of present value of Scheme liabilities (7)% (36)%

34 Acquisitions
The following tables show the book values and adjustments made to arrive at the fair values of the
major categories of assets and liabilities acquired and included in the consolidated financial
statements at the respective dates of acquisition. The acquisitions have been accounted for by the
acquisition method of accounting.
Cash outflow in respect of acquisitions was £82,379,000 (net of £1,611,000 net cash required).
(1)
Praxton Limited (including Bios Scientific Fair value
Publishers Limited) Book value adjustments Fair value
Business acquired 31 January 2003 £’000 £’000 £’000

Tangible Fixed Assets 136 (90) 46
Stocks 438 (173) 265
Debtors 586 (196) 390
Cash at bank and in hand (460) – (460)
Creditors and provisions (1,123) 30 (1,093)

Net liabilities (423) (429) (852)

Goodwill 4,063

3,211

Discharged by cash 3,211

Fair value adjustments have been made to provide for slow moving stock lines, irrecoverable debts
and write off obsolete tangible fixed assets.
During the post acquisition period ended 31 December 2003 the Praxton Group (including Bios
Scientific Publishers Limited) contributed £713,000 to Group turnover and £89,000 to profit
after tax.



The profit after tax for the Praxton Group (including Bios Scientific Publishers Limited) prior to
acquisition was not significant for the period 1 January 2003 to acquisition on 31 January 2003. For
the year ended 31 December 2002 the group made a loss of £35,000.
(2) Fair value
Frank Cass and Co. Limited Book value adjustments Fair value
Business acquired 28 July 2003 £’000 £’000 £’000

Fixed Assets 165 (38) 127
Stocks 542 (200) 342
Debtors 718 (264) 454
Cash at bank and in hand 2,029 – 2,029
Creditors and provisions (2,033) (379) (2,412)

Net assets 1,421 (881) 540

Provisional goodwill 10,420

10,960

Deferred consideration 350

10,960

Fair value adjustments have been made to provide for slow moving stock lines, returns and
unrecoverable debts.
The payment of the deferred consideration in contingent on the future sales performance of the
business acquired.
During the post acquisition period ended 31 December 2003 Frank Cass & Co Limited
contributed £1,779,000 to Group turnover and £280,000 to profit after tax.
The goodwill figure is provisional pending the finalisation of completion accounts.
The profit after tax for Frank Cass & Co Limited prior to acquisition for the period from 30 June
2003 to acquisition was deminimus and was £309,000 for the year ended 30 June 2002.
(3) Fair value
Swets & Zeitlinger Publishers (SZP) Book value adjustments Fair value
Business acquired 31 October 2003 £’000 £’000 £’000

Fixed Assets 66 – 66
Stocks 650 (548) 102
Debtors 500 – 500
Creditors and provisions (577) (205) (782)

Net assets 639 (753) (114)

Provisional Goodwill 11,705

11,591




Fair value adjustments have been made to provide for unrecorded liabilities and obsolete and slow
moving stock. The goodwill figure is provisional pending the finalisation of completion accounts.
During the post acquisition period ended 31 December 2003 SZP contributed £651,000 to Group
turnover and £108,000 to profit after tax.
It is not practical to identify the pre acquisition profit after tax of the SZP business acquired as it
formed part of a larger divisional entity.
Fair value adjustments
(4)
CRC Press (including Accounting
Parthenon Publishing Group policy
Limited) Book value Revaluations changes Fair value
Business acquired 7 April 2003 £’000 £’000 £’000 £’000

Fixed Assets 1,805 – (607) 1,198
Stocks 8,386 (577) (4,127) 3,682
Debtors 6,743 (433) – 6,310
Cash in bank and in hand 42 – – 42
Creditors (7,979) (675) – (8,654)

Net assets 8,997 (1,685) (4,734) 2,578

Goodwill 56,000

58,578


The fair value adjustments have been made to bring accounting policies for stock valuation and the
capitalisation of costs into line with group policy as well as providing for slow moving stock lines,
unrecoverable debts and additional liabilities.
During the post acquisition period CRC Press (including Parthenon Publishing Group Limited)
contributed £23,428,000 to Group turnover and £1,679,000 to profit after tax.
The results of the acquired CRC Press business (including Parthenon Publishing Group Limited)
prior to acquisition were as follows:
1 January 2003 to Year ended
7 April 2003 31 December 2002
£’000 £’000

Turnover 7,173 34,493
Operating profit (24) 4,581
Net interest payable 21 103
Profit before tax (45) 4,478
Tax 25 143
Profit after tax (70) 4,335

In addition to the profits for the periods the business also recorded gains related to currency
translation differences of £94,000 for the period from 1 January 2003 to 7 April 2003 and
£237,000 for the year ended 31 December 2002.



(5)
Fitzroy Dearborn
In addition to the goodwill arising on the acquisitions noted above an increase of £335,000 has
been recorded in goodwill of £1,809,000 arising from the Fitzroy Dearborn acquisition as
disclosed in the prior year’s ﬁnancial statements. The increase in goodwill relates to a further
adjustment being required to the valuation of stock. The total goodwill recorded for the Fitzroy
Dearborn acquisition is now £2,144,000.
Post year end acquisition
On 2 January 2004 the business and certain assets and liabilities of Marcel Dekker were acquired for
a consideration of £79.3 million. In the year ended 31 December 2002 Dekker’s sales were US
$42.0 million (£24.9 million) and its an operating proﬁt before exceptional items and shareholders’
cost was $5.1 million (£3.0 million).
35 Post balance sheet event
On 2 March 2004 the company announced a proposed merger with Informa Group plc under a
scheme of arrangement and subject to shareholder approval.


Group Five Year Record

1999 2000 2001 2002 2003
£’000 £’000 £’000 £’000 £’000

Turnover 95,879 116,355 137,326 147,365 173,679

Operating profit before exceptional
items and goodwill amortisation 19,949 25,496 30,580 35,743 43,110
Exceptional items and goodwill
amortisation (5,864) (5,571) (8,284) (9,832) (13,062)

Operating profit 14,085 19,925 22,296 25,911 30,048

Profit on ordinary activities before
taxation 10,540 15,791 18,475 23,097 26,523
Taxation (5,096) (6,890) (7,579) (9,420) (9,750)

Profit on ordinary activities after
taxation 5,444 8,901 10,896 13,677 16,773

Earnings per ordinary share
– basic 6.99p 11.05p 13.09p 16.12p 19.69p
– diluted before exceptional items
and goodwill amortisation 12.77p 16.75p 22.00p 26.97p 34.19p
Dividends per share (net) 3.30p 3.63p 3.99p 4.39p 4.83p

1999 2000 2001 2002 2003
£’000 £’000 £’000 £’000 £’000

Fixed assets
Intangible assets 98,177 101,172 119,466 109,658 177,054
Tangible assets 4,281 3,560 3,415 4,565 6,194
Investments – – – – 6,705

102,458 104,732 122,881 114,223 189,953

Current assets
Stocks 24,176 25,492 28,835 31,098 34,995
Debtors 25,605 28,888 36,106 35,782 38,694
Investments and cash at bank and in
hand 20,848 21,112 13,664 18,058 13,132

70,629 75,492 78,605 84,938 86,821
Creditors: amounts falling due
within one year (48,931) (49,887) (57,042) (63,188) (19,173)

Net current assets 21,698 25,605 21,563 21,750 67,648

Total assets less current liabilities 124,156 130,337 144,444 135,973 257,601
Creditors: amounts falling due after
more than one year (35,406) (30,166) (16,514) – (95,099)
Provisions for liabilities and charges (58) (343) – – –
Accruals and deferred income (32,640) (36,367) (54,348) (58,089) (72,835)

Net assets 56,052 63,461 73,582 77,884 89,667

Figures prior to 2001 have not been restated for the adoption of FRS 19.


Printed by Burrups, a St Ives Company B74249X/13472

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