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Taylor Nelson Sofres (TNS)

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Monday 06 March, 2006

Taylor Nelson Sofres

Final Results

Taylor Nelson Sofres PLC
06 March 2006





                      Delivering insight, adding value
                 Taylor Nelson Sofres plc - full year results



Highlights for the year ended 31 December 2005

•  Underlying revenue* up 4.1%; stronger performance in second half

•  Adjusted operating profit up 9.5%; adjusted operating margin up 40 bps
   to 11.3%

•  Adjusted earnings per share up 15.7% to 14.7p

•  Total dividend per share raised by 14.3% to 4.0p

•  Strong cash generation in second half; net debt reduced to £295.4m



Business performance*                                         2005             2004          Change %


Revenue                                                    £999.0m          £945.3m               5.7

Adjusted operating profit                                  £112.6m          £102.8m               9.5

Adjusted operating margin                                    11.3%            10.9%

Adjusted profit before tax                                  £97.8m           £81.0m              20.7

Adjusted earnings per share                                  14.7p            12.7p              15.7

Total dividend per share                                      4.0p             3.5p              14.3

Statutory results

Operating profit                                            £99.8m           £91.1m               9.5

Profit before tax                                           £85.0m           £69.3m              22.7

Earnings per share                                           11.8p            10.0p              18.0


*Adjusted results are before goodwill impairment, share based payments,
amortisation of acquired intangible assets, exceptional pension curtailment
credit and integration costs.  Earnings per share are shown before deferred tax
on goodwill.  Underlying revenue is defined on page 7.



Chief Executive, David Lowden, said:

"In 2005, TNS achieved strong underlying revenue growth across its syndicated
services and most regions in its custom business.  Although the performance of
our US custom business was disappointing, we saw a return to growth in our UK
custom business during the second half of the year.  We would expect 2006 to
represent another year of progress in both underlying revenue and operating
margin.



"In the longer term, I am confident that our new strategic focus and
organisational structure will help drive us towards our goal of being recognised
as market information's global leader in delivering value added information and
insights that help our clients make more effective business decisions."


On 6 March, all enquiries to +44 (0)20 7638 9571



Thereafter:



David Lowden, Chief Executive                            +44 (0)20 8967 4950

Andy Boland, Finance Director                            +44 (0)20 8967 4950

Janis Parks, Head of Investor Relations                  +44 (0)20 8967 1584

Margaret George, Citigate Dewe Rogerson                  +44 (0)20 7638 9571



Email to: Janis.Parks@tns-global.com



A webcast of the results presentation made to analysts will be broadcast live on
the Investors section of the group's website, at www.tns-global.com, from 9.00am
on Monday 6 March 2006.



An interview with David Lowden, CEO is available in video, audio and text on
www.tns-global.com and www.cantos.com.







Note to editors



About TNS



TNS is a market information group:

  • The world's largest provider of custom research and analysis
  • A leader in political and social polling
  • A major supplier of consumer panel, media intelligence and TV and radio
    audience measurement services.



TNS operates across a global network in over 70 countries, allowing us to
provide internationally consistent, up-to-the-minute and high quality
information and analysis.



The group's employees deliver innovative thinking and excellent service to local
and multi-national clients worldwide.  In the custom business, they combine
in-depth sector knowledge with expertise in the areas of new product
development, positioning and segmentation research, brand and advertising
research and stakeholder management.



TNS' strategic goal is to be recognised as the global leader in delivering value
added information and insights that help our clients to make more effective
decisions.



TNS is the sixth sense of business.



www.tns-global.com


David Lowden, Chief Executive of TNS, said:



"In 2005, TNS achieved strong underlying revenue growth across its syndicated
services and in the custom businesses of Continental Europe, Asia Pacific, Latin
America and Middle East & Africa.  While the performance of our US custom
business was disappointing, we saw a return to growth in our UK custom business
during the second half of the year.  In total, the group delivered underlying
revenue growth of 4.1 per cent for the year and an increase of 15.7 per cent in
adjusted earnings
per share.



Our markets

"Market information continues to be recognised as a growth industry.  Growth in
custom research is being driven by demand from the emerging economies, with
China, India and Brazil leading the increase in business in their regions.  As
the internet brings down the cost of data collection in the US, the volume of
research being commissioned there is rising.  While the mature markets of
Western Europe are growing more slowly, Central and Eastern Europe continue to
see an increase in demand.  In all regions, there is rising demand from newer
users of market information, such as the Technology sector.  Markets for
syndicated services around the world are maintaining their steady growth.



Syndicated services

"The group continues to invest in its syndicated services, where we have strong
market positions, clear competitive advantage and highly experienced management.
By expanding the size of our consumer panels under the Worldpanel brand and
introducing new technology in a number of markets, we have continued to increase
data granularity and strengthen our position.



"The group has extended and upgraded its Media Intelligence activities in
Europe, Asia and the US.  In Europe, we have built on our strong position in the
French news monitoring market with the successful integration of Presse+, which
has widened our client base and added to our international services.  In Russia,
we have added local advertising monitoring to our services.  In the US, we have
reinforced our competitive position through the upgrade of our monitoring
technology and delivery platforms and expanded coverage through the introduction
of a number of new services.



"Our TV and radio audience measurement (TRAM) business has had another very
successful year and has reinforced its position in the emerging markets, with
new contract wins in Asia and extension of services in China and Russia.  The
group is meeting the challenge of measuring audiences in the digital
broadcasting age, with new services in Europe and the US.  InfoSysTM, which
provides detailed audience data analysis, is now used by 6,000 people in 20
countries around the world.



Custom business

"TNS is the world's largest custom research business and, in 2005, we achieved
good underlying revenue growth across most areas.  The group has been investing
in the development of its managed access panels in the US, Europe and Asia
Pacific.  We have reinforced our global account management and our sector
expertise.  We have further developed our Areas of Expertise, which address all
the core marketing issues.  For example, in the field of New Product
Development, we are launching a new business solution to provide accurate
pre-launch sales and volume forecasts, and we have recently introduced a new
approach to Brand and Advertising research.



"By combining all of these elements and applying them throughout our global
network, we believe we are gaining share across most of our custom business.  In
2005, our businesses in Continental Europe performed very well, achieving
underlying growth significantly ahead of the market.  In the faster growing
markets of Asia Pacific, Latin America and Middle East & Africa we also had an
excellent year.



"After a difficult first half in the UK, when our custom operations were
impacted by a sharp downturn in the market, the business recovered in the second
half.  We are building our presence in the non-consumer segments of the market,
as well as placing greater emphasis on business driven by our Areas of
Expertise.



"In the US, the market is growing, as clients recognise the value of information
being collected by use of internet access panels and also as market research
spend continues to increase in less traditional sectors.  TNS is the market
leader for custom research in the US.  We have the broadest range of sector
expertise and product offering, well-established major client relationships and
a high quality managed access panel.  In a competitive environment, however, we
are not yet delivering on our potential.  At the start of 2006, we reorganised
the business to achieve improved client focus.  We believe that these changes
should allow us to rebuild our position during the year and lead to a
longer-term recovery.



Moving forward - evolution of strategy

"Our market is changing and it is clear that the growth opportunities for TNS
lie within the areas of added value information and insight.  It is here that
clients, particularly the major multi-nationals, are looking to spend a growing
proportion of their market information budgets, as their needs become
increasingly complex.  TNS' strategy is, therefore, based around delivering the
business insights and innovation they seek.



"Our approach involves strengthening our service offering around four core
principles: client orientation; service excellence and cost efficiency;
expertise and innovation; and people development.  This will be implemented
through changes to our global and regional business sectors - in order to ensure
that we are drawing on the strength of our network to win the growing
multi-country business.



Organisational changes

"Under the leadership of Pedro Ros, as Managing Director - Global Clients and
Sectors in the custom business, we are putting greater emphasis on servicing our
major, multi-national clients through our expertise in their business sectors.
We will continue to build our global partnership account teams and develop an
international project management group.



"Our regional custom business will continue to drive growth in client
relationships in local markets. It will be organised around three regions: North
America, Europe and Asia Pacific-Latin America-Middle East & Africa (ALM).  To
achieve service excellence and cost efficiency, we are increasing focus on
global operations, to ensure that we deliver the quality of data collection and
provision required by clients, in the most cost-effective manner.  TNS has been
at the forefront of establishing global access panel coverage and a newly-
appointed Head of Global Access Panels will ensure we maximise this coverage and
deliver a consistently high quality of service.



"Innovation has been a key driver in our syndicated services.  It has also led
to the successful growth of our Areas of Expertise and TNSInfoTM, our web portal
delivery system.  Clients continue to look to us for new thinking across the
business and we have scope to do more, based on our understanding of their needs
and building on our range of different research techniques.  I have appointed a
Head of Strategic Development and Marketing, who will be responsible for a
co-ordinated focus on investment in new ideas and services across the custom and
syndicated businesses, which will help us deliver more innovative solutions to
our clients.



Outlook

"As clients' own markets become increasingly competitive and fast-changing, we
expect that the demand for market information will continue to grow.  In the
major consumer and media syndicated markets, this growth should remain steady,
although we will continue to expand these markets through the innovative
introduction of new products and services.  The regional pattern of market
development in custom research in 2006 is expected to be similar to 2005; the
emerging markets will continue to see the fastest growth, the US market should
remain fairly strong but growth in Western European markets will be at a slower
pace.



"Looking at TNS revenue in 2006, we anticipate steady growth in Europe, our
largest region. While we may not be able to maintain the significant market out
performance achieved in Continental Europe in 2005, these businesses should
continue to see good growth and we expect an improvement year-on-year in the UK.
 The US custom business should stabilise but it is too early in the year to
predict exactly when that business will return to growth.  Our ALM operations
should continue to perform well.



"By sector, while the consumer market remains challenging, we anticipate some
recovery through the year.  Media, Business Services and Healthcare should grow
well.  We expect good demand in Technology but the sector will be impacted by
the continued cut-backs in business from one of our major US clients.



"Looking at the group overall, we would expect 2006 to represent another year of
progress in both underlying revenue and operating margin.



"In the longer term, I am confident that our new strategic focus and
organisational structure will help drive us towards our goal of being recognised
as market information's global leader in delivering value added information and
insights that help our clients make more effective business decisions."



FINANCIAL REVIEW



Definition of adjusted results

The following are the first full year results reported by TNS under
International Financial Reporting Standards (IFRS), as endorsed by the European
Union.  To assist understanding of the underlying performance of the business,
operating profit, profit before tax and earnings per share have been disclosed
on an adjusted basis.  Adjusted operating profit is before goodwill impairment,
amortisation of acquired intangible assets, share based payments, exceptional
pension curtailment credit and integration costs.  Adjusted earnings per share
also excludes deferred tax on goodwill (see Taxation below).



Calculation of underlying growth

The group's calculation of underlying revenue growth remains consistent with
that published in 2004.  Underlying revenue growth is calculated by taking the
increase in 2005 revenue over 2004 pro forma revenue, at constant exchange
rates.  The pro forma revenue assumes that any acquisitions were owned, and
discontinued operations excluded, for the comparable period in the prior year.



Revenue

Reported revenue increased by 5.7 per cent to £999.0 million (2004 £945.3
million).  Foreign exchange movements had a positive impact of 1.3 per cent on
reported revenue.  At constant exchange rates, the group increased underlying
revenue by 4.1 per cent for the year.



Operating profit and margin

Adjusted operating profit increased by 9.5 per cent to £112.6 million (2004
£102.8 million), providing an adjusted operating margin of 11.3 per cent (2004
10.9 per cent).  Adjusted operating profit, including the charge for share based
payments, was £108.1 million (2004 £100.2 million).  Reported operating profit
increased by 9.5 per cent to £99.8 million (2004 £91.1 million).



Goodwill impairment

Under IFRS, goodwill is no longer amortised but is instead subject to an annual
impairment review.  In 2005, impairment of goodwill was £10.3 million, primarily
recorded against TES, the group's US cinema advertising monitoring unit.  In
2004, the charge for impairment of goodwill was £3.5 million.



Share based payments

Under IFRS, the value of share options granted to employees is recorded as an
expense on the income statement.  The charge only applies to options granted on
or after 7 November 2002. The charge for share based payments in 2005 was £4.5
million (2004 £2.6 million).



Interest

The net interest charge fell to £15.2 million (2004 £22.8 million), reflecting
reduced debt levels and the refinancing of bank facilities at lower interest
rates announced in March 2005.  Interest cover against EBITDA before share based
payments, excluding other finance charges, was 9.2x (2004 7.4x).  Interest cover
is calculated on net interest expense of £15.2million and EBITDA before share
based payments of £140.0 million (operating profit, adding back depreciation,
amortisation, goodwill impairment and share based payments).

Associates

Income from associates fell to £0.4 million (2004 £1.0 million), primarily due
to the sale of Burke, Inc. in December 2004.



Profit before tax

Adjusted profit before tax increased 20.7 per cent to £97.8 million (2004 £81.0
million).  Adjusted profit before tax, including the charge for share based
payments, increased by 19.0 per cent to £93.3 million (2004 £78.4 million). 
Reported profit before tax increased by 22.7 per cent to £85.0 million (2004
£69.3 million).


Taxation

The tax charge for the year was £30.2 million (2004 £23.6 million), representing
a reported rate of 35.5 per cent (2004 34.1 per cent).  Under IFRS, where
goodwill is deductible against tax, a deferred tax liability is recognised, even
if such a liability would only unwind on the eventual sale or impairment of the
business in question.  This has led to a tax charge for deductible goodwill of
£0.1 million (2004 £3.2 million) for the year.  Excluding deferred tax on
goodwill the tax charge was £30.1 million (2004 £26.0 million, excluding the
benefit of tax credits arising on integration costs of £5.6 million),
representing an underlying rate of 31.5 per cent (2004 31.5 per cent).



Minority interests

Minority interests increased to £2.7 million (2004 £2.1 million), largely due to
a strong performance in Russia and the acquisition of Interscience in Brazil in
March 2005.



Earnings per share

Based on a weighted average of 441.6 million shares, adjusted earnings per share
were 14.7p (2004 12.7p), an improvement of 15.7 per cent.  Including the charge
for share based payments (IFRS2), adjusted earnings per share were 13.9p (2004
12.3p). Basic earnings per share were 11.8p (2004 10.0p).  See note 3.



In order to provide additional clarity, the table below shows operating profit,
operating margin, profit before tax and earnings per share both before and after
the charge for share based payments (IFRS2).


                                   TNS adjusted     Adjusted after charge for         Reported under IFRS
                                     definition          share based payments
                                                                      (IFRS2)


                                2005       2004              2005        2004            2005        2004

Operating profit £m            112.6      102.8             108.1       100.2            99.8        91.1


Operating margin %              11.3       10.9              10.8        10.6            10.0         9.6


Profit before tax £m            97.8       81.0              93.3        78.4            85.0        69.3


EPS p                           14.7       12.7              13.9        12.3            11.8        10.0









Dividend per share

The board is recommending a final dividend of 2.75p per share (2004 2.4p),
giving a 14.3 per cent increase in total dividend for the year to 4.0p (2004
3.5p).  The dividend will be paid on 7 July 2006 to shareholders on the register
on 26 May 2006.

Net debt and cash flow

Net debt at 31 December 2005 was £295.4 million compared with £329.4 million at
31 December 2004 (£342.9 million at 30 June 2005).  Movement in working capital
generated a net outflow of £8.4 million for the year.  Operating cash flow was
£128.4 million (2004 £113.4 million).  Net capital expenditure was £20.7 million
(2004 £25.8 million).  Net debt to EBITDA at 31 December 2005 was 2.1x (2004
2.7x) using EBITDA before share based payments of £140.0 million (2004 £121.8m).


REVIEW OF OPERATING ACTIVITIES



Regional revenue performance


                                     Year to 31 December               Change
                                        2005       2004         Reported   Underlying
                                          £m         £m                            %
                                                                      %
     UK                                159.1      158.2             0.6          1.2
     France                            147.4      135.1             9.1          8.6
     Rest of Europe                    354.3      324.5             9.2          7.7
Europe                                 660.8      617.8             7.0          6.3
Americas                               238.7      241.4            (1.1)        (3.7)
Asia Pacific                            99.5       86.1            15.6         10.0
Total                                  999.0      945.3             5.7          4.1



Europe (including Middle East and Africa)

Underlying revenue growth in Europe was strong at 6.3 per cent, with an
excellent performance in both France and Germany but more modest growth in the
UK.



In the UK, underlying revenue grew by 1.2 per cent, representing a recovery in
the second half.  In the custom business, second half growth was driven by good
performance in non-consumer areas such as financial services and Healthcare, as
well as some stabilisation in the Consumer sector.  Demand for TNS' syndicated
services continued to be good.  In Worldpanel, the first stage of the expansion
of the consumer panel was successfully completed and contributed to further new
business wins.



In France, underlying revenue growth was 8.6 per cent for the year.  A strong
performance was recorded across most sectors of the business, including
Healthcare.  The strong position of the Media Intelligence business in France
was bolstered by the acquisition of Presse+ and the business performed well
throughout the year.



In the Rest of Europe, underlying revenue growth was 7.7 per cent, well ahead of
the market.  Germany continues to perform well, especially given the backdrop of
a weak economic environment, with Healthcare and financial services, in
particular, making good progress.  Most other parts of the region, including
Spain, also grew well in the year.



Americas

In the Americas, underlying revenue declined by 3.7 per cent, due to a
disappointing performance in the US custom business, which was impacted by
further reductions in marketing expenditure by a key technology client in the
second half and by a weak performance in the Consumer and Business Services
sectors.



Growth in the developing markets of Latin America continued to be strong in 2005
and TNS' position in both Worldpanel and custom, including recently acquired TNS
Interscience in Brazil, contributed to another very good performance across the
region.

Asia Pacific

Demand for market information in the Asia Pacific region remains buoyant.  TNS
additionally benefits from the strength of its operations in both syndicated
services and custom research across the region.  Underlying growth in Asia
Pacific was again strong at 10.0 per cent.



Sector revenue performance


                                             Year to 31 December                    Change

                                         2005                 2004          Reported      Underlying %
                                           £m                   £m                 %
Consumer                                334.6                330.0               1.4              (0.1)
Media                                   191.8                176.4               8.7               6.6
Business Services                       131.8                133.0              (0.9)              1.4
Technology                              111.0                104.9               5.8               2.0
Healthcare                               87.4                 80.7               8.3               6.0
Other                                   142.4                120.3              18.4              14.9
Total                                   999.0                945.3               5.7               4.1



Consumer

Worldpanel continued to show steady growth in 2005, demonstrating the value of
purchasing behaviour information for retailers and consumer goods companies.
Panel expansion programmes in the UK and Spain were successfully implemented and
contributed to good performance.  The Consumer sector was flat overall, held
back by weaker demand in the custom business, where conditions in developed
markets such as the UK and US were challenging.



Media

Underlying growth of 6.6 per cent reflected a good performance from both Media
Intelligence and TRAM.  Media Intelligence progressed strongly in Europe and
reinforced its competitive positioning in the US, although poor attendance
figures had an adverse impact on cinema monitoring.  TRAM had an excellent year,
including contract wins in Hong Kong and Singapore and expansion of services in
China and Russia.



Business Services

The demand for research services from some sectors within Business Services
remained challenging in 2005.  The first half was also impacted by the loss of
third party business on the US access panel.  However, there was good progress
within financial services in most major markets and Business Services recovered
well in the second half, to achieve modest growth in underlying revenue of 1.4
per cent for the year.



Technology

Changes in Technology clients' markets are fuelling demand for market
information, which has led to some good contract wins.  The group achieved
strong growth in Asia Pacific and Latin America, driven by the demand in those
regions for international research and the added value provided by TNS' Areas of
Expertise.  In the case of one key US client, however, a change in direction has
led to a substantial reduction in studies conducted by TNS.  This held back
underlying growth in the sector to 2.0 per cent.



Healthcare

Underlying growth in the Healthcare sector was strong at 6.0 per cent.  A global
account strategy and new initiatives to measure the performance of and attitudes
to existing pharmaceutical brands helped drive strong growth in Europe,
especially in the UK and Germany.  The group is also having success in taking
its sector expertise into Asia and Latin America.  Although TNS is building its
brand performance services in the US, that market continues to be more
challenging due to concerns on drug safety and regulatory changes.



Other

TNS continues to perform well in the Automotive sector, especially in the US and
Asia Pacific, where its car clinic offering and expertise in new product
development is helping to win significant new business.



Growth in Polling & Social was also strong, as the sector saw the benefit of the
first full year of the contract with the EU for the Standard Eurobarometer and
good levels of activity relating to the European Constitution, as well as
Presidential elections in Germany.



ENDS



The results of the group are shown on the following pages.



CONSOLIDATED INCOME STATEMENT

For the year ended 31 December
                                                                           2005          2004
                                                 Notes                       £m            £m

Revenue                                                 2                 999.0         945.3
Cost of sales                                                            (336.5)       (322.5)

Gross profit                                                              662.5         622.8
Administrative expenses                                                  (562.7)       (531.7)

Operating profit before exceptional items                                 112.6         102.8
Integration costs                                                             -          (9.8)
Goodwill impairment                                                       (10.3)         (3.5)
Amortisation of additional intangibles identified on acquisitions          (0.9)         (0.6)
Exceptional pension curtailment credit                                      2.9           4.8
Share based payments                                                       (4.5)         (2.6)

Operating profit                                      2                    99.8          91.1
Finance income                                                              1.0           0.8
Finance costs before exceptional items                                    (16.2)        (20.0)
Exceptional finance costs                                                    -           (3.6)
Finance costs                                                             (16.2)        (23.6)
Share of post tax profit of associates                                      0.4           1.0

Profit before taxation                                                     85.0          69.3
Taxation - excluding deferred tax on goodwill                             (30.1)        (20.4)
Taxation - deferred tax on goodwill                                        (0.1)         (3.2)
Taxation                                              6                   (30.2)        (23.6)

Profit for the year                                                        54.8          45.7
Attributable to:
   Equity holders of the parent company                                    52.1          43.6
   Minority interests                                                       2.7           2.1
                                                                           54.8          45.7

Basic earnings per share                              3                    11.8p         10.0p

Diluted earnings per share                            3                    11.6p          9.8p



Dividends paid in the year were £16.0m (2004 £13.7m) and the final proposed
dividend is £12.2m (2004 £10.6m).




CONSOLIDATED BALANCE SHEET

At 31 December
                                                                            2005          2004
                                                               Notes          £m            £m
Assets
Non-current assets
Goodwill                                                                    393.6        382.8
Intangible assets                                                            16.6         17.8
Plant, property and equipment                                                73.1         72.5
Investments in associates                                                     2.5          1.3
Available for sale investments                                                0.4          0.6
Deferred tax assets                                                          29.6         29.2
                                                                            515.8        504.2

Current assets
Inventories                                                                  59.1         75.3
Trade and other receivables                                                 260.1        250.4
Current tax receivable                                                        2.5          9.9
Available for sale investments                                                0.8          0.7
Cash                                                                         45.8         63.3
Total current assets                                                        368.3        399.6
Total assets                                                                884.1        903.8

Liabilities
Current liabilities
Borrowings                                                                  (0.5)        (3.2)
Trade and other payables                                                  (298.7)      (313.0)
Current tax payable                                                        (27.0)       (30.6)
Provisions                                                                 (11.7)        (5.5)
Total current liabilities                                                 (337.9)      (352.3)
Net current assets                                                          30.4         47.3

Non-current liabilities
Borrowings                                                                (340.7)      (388.9)
Deferred tax liabilities                                                   (27.0)       (25.4)
Retirement benefit obligations                                             (15.3)       (12.4)
Provisions                                                                 (13.0)       (17.0)
Trade and other payables                                                    (2.3)        (3.0)
Total non-current liabilities                                             (398.3)      (446.7)
Total liabilities                                                         (736.2)      (799.0)
Total net assets                                                           147.9        104.8

Equity
Issued share capital                                               8        22.4         22.3
Share premium                                                      8       126.7        123.8
Shares to be issued                                                8           -          4.2
Other reserves                                                     8         1.8          1.5
Retained earnings                                                  8       (13.0)       (56.1)
Total shareholders' equity                                                 137.9         95.7
Minority interests in equity                                       8        10.0          9.1

Total equity                                                               147.9        104.8




CONSOLIDATED CASH FLOW STATEMENT

For the year ended 31 December
                                                                                    2005         2004
                                                                       Notes          £m           £m

Cash flows from operating activities
Cash generated from operations                                             4       128.4        113.4
Income tax paid                                                                    (24.2)       (20.2)

Net cash generated from operating activities                                       104.2         93.2

Cash flows from investing activities
Acquisition of subsidiaries (net of cash acquired)                                  (5.7)       (11.0)
Sale of subsidiaries (net of cash disposed)                                          0.7          0.1
Sale of associates                                                                     -          7.4
Proceeds from sale of property, plant and equipment                                  2.6          2.2
Purchase of property, plant and equipment                                          (20.0)       (22.3)
Purchase of intangible assets                                                       (3.3)        (5.7)
Purchase of associates and investments                                              (0.8)           -
Interest received                                                                    1.0          0.7
Dividends received                                                                     -          0.5

Net cash used in investing activities                                              (25.5)       (28.1)

Cash flows from financing activities
Net proceeds from issue of ordinary share capital                                    2.5          3.2
Dividends paid to company's shareholders                                           (16.0)       (13.7)
Dividends paid to minority interests                                                (1.7)        (1.4)
Arrangement fee paid on restructuring group finance                                 (1.4)           -
Decrease in debt                                                                   (65.7)        (1.6)
Interest paid                                                                      (13.9)       (20.2)
Purchase of company shares                                                             -         (4.1)

Net cash used in financing activities                                              (96.2)       (37.8)

Net (decrease)/increase in cash and cash equivalents                               (17.5)        27.3

Cash and cash equivalents at beginning of year                                      63.3         35.7
Exchange gain on cash and bank overdrafts                                              -          0.3

Cash and cash equivalents at end of year                                            45.8         63.3

Net debt*                                                                  4        295.4       329.4



* Net debt is defined as bank borrowings net of arrangement fees and obligations
under finance leases, less    cash.


CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE

For the year ended 31 December
                                                                             2005          2004
                                                                               £m            £m

Profit for the year                                                          54.8          45.7

Actuarial losses on pensions                                                 (5.4)         (2.8)
Tax on actuarial losses on pensions                                           1.6           0.2
Gain in fair value of financial instruments                                   1.8             -
Translation differences on foreign currency net investments less              6.0          (8.4)
translation differences on foreign currency loans taken out to fund
those investments
Tax on the above item                                                        (1.4)          2.0
Net gains and losses not recognised in the income statement                   2.6          (9.0)

Total recognised income and expense relating to the year                     57.4          36.7

Prior year adjustment following adoption of IAS 32 and IAS 39                (5.4)            -

Total recognised income and expense since the last annual report             52.0          36.7

Attributable to:
   Equity holders of parent company                                          49.3          34.6
   Minority interests                                                         2.7           2.1
                                                                             52.0          36.7









1.       Basis of preparation

Prior to 2005, the group prepared its audited annual financial statements using
accounting principles generally accepted in the UK (UK GAAP).  For the year
ended 31 December 2005, the group is required to prepare its annual consolidated
financial statements in accordance with accounting standards adopted for use in
the European Union, International Financial Reporting Standards (IFRS) and IFRIC
interpretations.  As such, those financial statements will take account of the
requirements and options in IFRS 1 "First-time adoption of International
Financial Reporting Standards" as they relate to the 2004 comparatives included
therein. The financial statements have been prepared under the historical cost 
convention in accordance with the Companies Act 1985.



First time adoption of IFRS

Certain of the requirements and options in IFRS 1, relating to comparative
financial information presented on first-time adoption, may result in a
different application of accounting policies in the 2004 restated financial
information, to that which would apply if the 2004 financial statements were the
first financial statements of the group prepared in accordance with IFRS.  An
explanation of how transition from UK GAAP to IFRS has affected the group's
financial position, income statement and cash flows is set out in note 9.  The
reconciliations set out in note 9 are based on the IFRS applicable as at 31
December 2005 and the interpretation of those standards.



The accounting policies published on the group's website, www.tns-global.com, on
6 March 2006, have been consistently applied to all periods presented, except
those relating to the classification and measurement of financial instruments.
The group has made use of the exemption available under IFRS 1 to apply the
standards related to financial instruments IAS 32 "Financial instruments:
disclosure and presentation" and IAS 39 "Financial instruments: recognition and
measurement", from 1 January 2005.



Financial information

The preliminary results were approved by the board on 6 March 2006.  The
financial information contained in this announcement does not constitute
statutory accounts within the meaning of section 240 of the Companies Act 1985.
Statutory accounts for the year ended 31 December 2004, together with an
unqualified auditors' report thereon, have been delivered to the Registrar of
Companies.  Statutory accounts for the year ended 31 December 2005 have not yet
been delivered to the Registrar of Companies.  The group's annual report and
accounts for 2005 will be delivered to shareholders in early April and will be
filed with the Registrar of Companies, together with an unqualified auditors'
report thereon, following the annual general meeting.  It will be available
electronically from the Investor section of the group's website at
www.tns-global.com in early April.



2.       Segmental reporting

Primary reporting format - geographic segments


                      Revenue                                      Operating profit
                   2005        2004                    2005                                2004
                                                Pre                    Post         Pre                    Post
                                        exceptional Exceptional exceptional exceptional Exceptional exceptional
                                              items       items       items       items       items       items
                     £m         £m              £m          £m          £m          £m          £m          £m

Europe             660.8      617.8            75.2       (2.5)        72.7        63.5       (7.1)        56.4
Americas           238.7      241.4            24.6       (9.7)        14.9        29.2       (3.9)        25.3
Asia Pacific        99.5       86.1            12.8       (0.6)        12.2        10.1       (0.7)         9.4
Total              999.0      945.3           112.6      (12.8)        99.8       102.8      (11.7)        91.1



3.       Earnings per share

Basic earnings per share of 11.8p (2004 10.0p) have been calculated on the
profit for the year attributable to equity holders of the parent company of
£52.1m (2004 £43.6m) and on 441.6 million shares (2004 437.6 million), being the
weighted average number of shares in issue during the year, excluding those held
in the ESOP and the EBT, which are treated as cancelled.



The diluted earnings per share have been calculated in accordance with the
provisions of IAS 33 "Earnings per share", with the weighted average number of
shares in issue being adjusted to assume conversion of all dilutive potential
shares for the period they were outstanding.  Shares held by the ESOP and the
EBT, which are under performance-based options, are included in the diluted
weighted average number of shares, as the performance conditions are deemed to
have been met for the purposes of this calculation.



The weighted average number of ordinary shares in issue during the year for the
purpose of these calculations is as follows:
                                                                           2005         2004
                                                                        millions     millions
Share capital                                                             447.4         445.1
Shares held by ESOP                                                        (0.4)        (1.1)
Shares held by EBT                                                         (5.4)        (6.4)
Basic earnings per share denominator                                      441.6         437.6
Dilutive effect of share options                                            8.3           9.9
Diluted earnings per share denominator                                    449.9         447.5



An adjusted earnings per share using an adjusted profit for the year
attributable to equity holders of the parent company is also presented, as the
directors believe that this assists in understanding the underlying performance
of the group.  The adjusted earnings per share is based on the profit as
adjusted for the items shown below.


                                                                           2005          2004
                                                                             £m            £m
Profit for the year attributable to equity holders of                      52.1          43.6
the parent company
Adjusted for exceptional
items:
Integration costs                                                             -           9.8
Goodwill impairment                                                        10.3           3.5
Amortisation of additional intangibles identified on acquisitions           0.9           0.6
Exceptional pension curtailment credit                                     (2.9)         (4.8)
Share based payments                                                        4.5           2.6
Exceptional finance costs                                                   -             3.6
                                                                           12.8          15.3
Tax on exceptional items                                                     -           (6.4)
Deferred tax on goodwill                                                    0.1           3.2
                                                                           12.9          12.1
Adjusted profit for the year attributable to equity                        65.0          55.7
holders of the parent company
Adjusted earnings per share                                               14.7p         12.7p




                   Profit used for EPS   Weighted average number      Earnings per share
                              purposes                 of shares
                      2005        2004         2005         2004        2005        2004
                        £m          £m     millions     millions           p           p
Basic                 52.1        43.6        441.6        437.6        11.8        10.0
Diluted               52.1        43.6        449.9        447.5        11.6         9.8
Adjusted              65.0        55.7        441.6        437.6        14.7        12.7





4.       Cash flow
                                                                            2005         2004
                                                                           Total        Total
Reconciliation of operating profit to cash generated from operations          £m           £m
Operating profit                                                            99.8         91.1
Amortisation of intangibles                                                  5.8          6.2
Impairment of goodwill                                                      10.3          3.5
Depreciation of property, plant and equipment                               19.6         18.4
(Profit)/loss on sale of property, plant and equipment                      (1.2)         0.4
Share based payments                                                         4.5          2.6
Decrease in inventories                                                     16.0          2.3
Increase in trade and other receivables                                     (2.8)        (2.7)
(Decrease)/increase in trade and other payables                            (21.6)         2.9
Decrease in pension liabilities                                             (3.4)        (4.4)
Increase/(decrease) in provisions                                            1.4         (6.9)
Cash generated from operations                                             128.4        113.4



Operating cash flows from continuing activities include an outflow of £nil (2004
£11.5m) relating to integration costs of £nil (2004 £9.8m).


                                                                                         2005
Reconciliation of net cash flow to movement in net debt                                   £m

Decrease in cash in the year                                                            (17.5)
Cash outflow from decrease in debt                                                       65.7
Change in net debt resulting from cash                                                   48.2
flows
Translation difference                                                                  (15.6)
Non-cash movement                                                                         1.4
Movement in net debt in the year                                                         34.0
Net debt at 1 January 2005                                                             (329.4)
Net debt at 31 December 2005                                                           (295.4)


                                            At 1 Jan    Cash flow      Exchange     Non-cash    At 31 Dec
                                                2005                   movement    movements        2005
Analysis of net debt                              £m           £m           £m           £m           £m

Cash at bank and in hand                        63.3        (17.5)           -             -        45.8
Loans repayable within 1 year                   (3.2)        65.1         (0.2)       (62.2)        (0.5)
Loans repayable after more than 1             (388.9)           -        (15.4)        63.6       (340.7)
year
Obligations under finance leases                (0.6)         0.6            -            -            -
                                              (329.4)        48.2        (15.6)         1.4       (295.4)



The net non-cash movement represents the amortisation of arrangement fees of
£0.8m (2004 £4.9m) and movements in the fair value of financial instruments of
£0.6m (2004 nil).



5.       Acquisitions

On 1 March 2005, the group acquired a 51% share of Interscience Informacao e
Tecnologia Aplicada Ltda (Interscience), a well-established Brazilian custom
research business.  The group also acquired the business of Presse Plus, a
French media intelligence business, on 25 May 2005.  A further 8% of the group's
subsidiary in the Czech Republic, AISA, was purchased on 31 March 2005.



The acquisitions contributed revenues of £6.4m and operating profit of £1.4m to
the group in the year to 31 December 2005.  If the acquisition had occurred on 1
January 2005, group revenue would have been £1,001.5m and operating profit would
have been £99.8m.



As part of the acquisition of Interscience, the group has entered into put and
call options to purchase the remaining 49% of the company.  The potential amount
payable, which is dependent on future performance, is estimated to be £2.2m and
will be paid between 2006 and 2012.



6.       Taxation

The tax charge for the year was £30.2m (2004 £23.6m), representing a reported
rate of 35.5% (2004 34.1%). Under IFRS, where goodwill is deductible against
tax, a deferred tax liability is recognised, even if such a liability would only
unwind on the eventual sale or impairment of the business in question. This has
led to a tax charge for deductible goodwill of £0.1m (2004 £3.2m). Excluding
deferred tax on goodwill and the tax credits relating to exceptional integration
costs, the tax charge was £30.1m (2004 £26.0m), representing an underlying rate
of 31.5% (2004 31.5%).



7.       Currency conversion

The 2005 consolidated income statement has been prepared using, among other
currencies, an average exchange rate of US$1.8195 to the pound (2004 US$1.8320)
and €1.4624 to the pound (2004 €1.4747).



The consolidated balance sheet as at 31 December 2005 has been prepared using
the exchange rate on that day of US$1.7211 to the pound (2004 US$1.9158) and
€1.4531 to the pound (2004 €1.4133).



8.       Consolidated statement of changes in shareholders' equity


                                          Share     Share    Shares    Other  Retained   Total   Minority  Total
                                        capital   premium     to be reserves  earnings          interests   equity
                                                             issued
                                             £m        £m        £m       £m        £m      £m         £m        £m

Balance at 1 January 2004                  22.2      120.0       -       1.4     (76.3)   67.3        6.9      74.2
Profit for the year                           -          -       -         -      43.6    43.6        2.1      45.7
Actuarial losses on pensions net of tax       -          -       -         -      (2.6)   (2.6)         -     (2.6)
Currency translation differences net of       -          -       -         -      (6.4)   (6.4)         -     (6.4)
tax
New share capital issued net of             0.1        3.8       -         -         -     3.9          -       3.9
expenses
Share to be issued                            -          -     4.2         -         -     4.2          -       4.2
Minority interest additions                   -          -       -         -         -       -        1.5       1.5
Minority interest dividends                   -          -       -         -         -      -        (1.4)    (1.4)
Purchase of own shares                        -          -       -         -      (4.1)   (4.1)         -     (4.1)
Net proceeds on exercise of options           -          -       -       0.1       0.8     0.9          -       0.9
Share based payments                          -          -       -         -       2.6     2.6          -       2.6
Equity dividends                              -          -       -         -     (13.7)  (13.7)         -    (13.7)

Restated balance at 31 December 2004       22.3      123.8     4.2       1.5     (56.1)   95.7        9.1     104.8
First-time adoption of IAS 32 and 39          -          -    (4.2)        -      (1.2)   (5.4)        -      (5.4)
Restated balance at 1 January 2005         22.3      123.8       -       1.5     (57.3)   90.3        9.1      99.4
Profit for the year                           -          -       -         -      52.1    52.1        2.7      54.8
Actuarial losses on pensions net of tax       -          -       -         -      (3.8)   (3.8)         -     (3.8)
Currency translation differences net of       -          -       -         -       4.6     4.6          -       4.6
tax
Marked-to-market of financial                 -          -       -         -       1.2     1.2          -       1.2
instruments
Financial instrument fair value taken         -          -       -         -       0.6     0.6          -       0.6
to income statement
New share capital issued net of             0.1        2.9       -         -         -     3.0          -       3.0
expenses
Minority interest dividends and               -          -       -         -         -       -       (1.8)    (1.8)
disposals
Net proceeds on exercise of options           -          -       -        0.3      1.1     1.4          -       1.4
Share based payments                          -          -       -         -       4.5     4.5          -       4.5
Equity dividends                              -          -       -         -     (16.0)  (16.0)         -    (16.0)

Balance at 31 December 2005                22.4      126.7       -       1.8     (13.0)  137.9       10.0     147.9



9.       Reconciliation of IFRS financial statements to previously reported UK
GAAP financial statements

TNS reported under UK GAAP in its previously published financial statements for
the year ended 31 December 2004. The analysis below shows a reconciliation of
net assets and profit as reported under UK GAAP as at 31 December 2004, to the
revised net assets and profit under IFRS as reported in these financial
statements.

In addition, there is a reconciliation of net assets under UK GAAP to IFRS at
the transition date for the company, being 1 January 2004. The adoption of IFRS
has resulted in changes to the group's accounting policies that have affected
the amounts reported for the current or prior years in the following areas.



Share based payments

The fair value of share options granted to employees is estimated for each grant
using the Black-Scholes-Merton and Monte Carlo models and charged to the income
statement over the minimum life of the options.  This IFRS charge replaces the
UITF 17 (revised) charge for options issued at below market value previously
recognised.

TNS has elected to apply recognition and measurement requirements only to equity
instruments granted after 7 November 2002 that had not vested by 1 January 2005.



Goodwill

In place of amortisation, all goodwill will be subjected to an annual impairment
test.  Any impairment identified will be charged immediately to the income
statement.  Negative goodwill will be written off immediately to the income
statement.  Any fair value adjustments made to goodwill in a later financial
year (allowed up to 12 months from the date of acquisition) will be reflected as
a restatement of the prior year accounts.



Employment benefits

Defined benefit plan assets and liabilities are recorded in the balance sheet
with actuarial gains and losses taken to reserves.  Previously, assets and
liabilities were not recorded and the costs of plans were charged to the profit
and loss so as to spread the cost of pensions over the service lives of
employees in the plans.



Under the IFRS transitional arrangements, TNS has elected to recognise the
cumulative actuarial loss at 1 January 2004 as a movement in equity.



Joint ventures

Under IFRS, joint ventures are consolidated on a proportionate basis with the
group's share of assets and liabilities, profit and loss and cash flows being
reflected in the group financial statements.  Previously, joint ventures were
shown within investments, with the group's share of operating profit shown in
the financial statements.



Joint venture cash flows were not included in the group cash flow statement.



Associates

Under IFRS, losses from an associate in excess of the group's interest in that
associate are no longer recognised where there is no contractual obligation to
fund those losses.  Under UK GAAP, losses were recognised even if in excess of
the group's interest in the associate.



Deferred tax

IFRS requires deferred tax to be provided for in full, using the liability
method, on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial statements.



Deferred tax assets are recognised only to the extent that it is probable that
they can be utilised against future taxable profits.



Where goodwill is deductible against tax, a deferred tax liability is required
even if such a liability would only unwind on the eventual sale of the business
in question.



Dividends

As required under IFRS, dividends are recognised when approved or paid, not when
declared.



Financial instruments

As permitted by IFRS 1, "First Time Adoption of IFRS", the IAS 39 "Financial
instruments: Recognition and Measurement" rules on hedge accounting will be
applied from 1 January 2005.  TNS continued to report financial instruments for
the 2004 comparative year in accordance with UK GAAP.



Property, plant and equipment and intangible assets

IFRS requires that, for acquisitions made since 1 January 2004, certain
intangible assets are recognised separately to reflect the fair value of brands,
customer lists, or other intangibles acquired.  Previously they would have been
included in goodwill.  These intangibles will be amortised over their estimated
useful lives.  Software, previously included within tangible fixed assets, is
classified as an intangible fixed asset under IFRS.



Business combinations

Business combinations prior to the transition date of 1 January 2005 have not
been restated.



Cumulative translation differences

TNS has reset the cumulative translation differences for all foreign operations
to £nil as at 1 January 2004.





Consolidated income statement for the year ended 31 December 2004
                                                                  Previous           IFRS     Restated
                                                                      GAAP     conversion   under IFRS
                                                                              adjustments
                                                        Notes          £m              £m          £m

Revenue                                                             945.3              -        945.3
Less share of joint ventures                                1       (16.7)          16.7            -

Revenue                                                             928.6           16.7        945.3
Cost of sales                                               1      (316.4)          (6.1)      (322.5)

Gross profit                                                        612.2           10.6        622.8
Administrative expenses                                  1 -5      (550.5)          18.8       (531.7)

Operating profit                                                     61.7           29.4         91.1
Share of operating profit of joint ventures                 1         2.7           (2.7)           -

Operating profit before exceptional items                   5       102.0            0.8        102.8
Integration costs                                                    (9.8)             -         (9.8)
Goodwill impairment                                         2       (27.8)          24.3         (3.5)
Amortisation of additional intangibles identified           3           -           (0.6)        (0.6)
on acquisitions
Exceptional pension curtailment credit                      4           -            4.8          4.8
Share based payments                                        5           -           (2.6)        (2.6)

Operating profit                                                     64.4           26.7         91.1
Share of operating profit of associates                     6         1.3           (1.3)           -
Finance income                                                        0.8              -          0.8
Finance costs before exceptional items                      4       (19.5)          (0.5)       (20.0)
Exceptional finance costs                                            (3.6)             -         (3.6)
Finance costs                                                       (23.1)          (0.5)       (23.6)
Share of post tax profit of associates                   6, 7           -            1.0          1.0

Profit before taxation                                               43.4           25.9         69.3
Taxation - excluding deferred tax on goodwill             3-6       (21.1)           0.7        (20.4)
Taxation - deferred tax on goodwill                         8           -           (3.2)        (3.2)
Taxation                                                            (21.1)          (2.5)       (23.6)

Profit for the year                                                  22.3           23.4         45.7
Attributable to:
   Equity holders of the parent company                              20.2           23.4         43.6
   Minority interests                                                 2.1              -          2.1
                                                                     22.3           23.4         45.7

Basic earnings per share                                              4.6p           5.4p        10.0p
Diluted earnings per share                                            4.5p           5.3p         9.8p

Notes to reconciliation of IFRS financial statements to previously reported UK
GAAP financial statements - consolidated income statement for the year ended 31
December 2004



1         Under proportionate consolidation, the results of joint ventures are
consolidated in the income statement on a line by line basis and, as a result,
there will be no separate disclosure of joint venture turnover and operating
profit (additional cost of sales £6.1m and administration expenses £7.9m replace
separate disclosure of operating profit of £2.7m).

2         £24.3m of goodwill amortisation under UK GAAP is reversed leaving only
impairment charges of £3.5m identified under both IFRS and UK GAAP.

3         Amortisation of intangible assets recognised on acquisitions in
accordance with IFRS 3 of £0.6m with associated deferred tax of £0.2m.

4         Retirement benefits charge calculated in accordance with IAS 19
results in an exceptional credit of £4.8m, following curtailments in the
Netherlands and US. The related deferred tax charge is £0.5m.

5         £2.6m share based payment charge for employee options granted since 7
November 2002, less £0.8m

UITF 17 (revised) charge included under UK GAAP.  The related deferred tax is a
credit of £0.5m.

6         Share of operating profit of associates is reclassified to below
exceptional finance charges and adjusted to include the £0.5m relevant
proportion of tax previously disclosed under tax.

7         £0.2m of losses arising from associates with net liabilities are not
recognised under IFRS.

8         £3.2m deferred tax charge relating to the tax deductible goodwill in
the year.


Consolidated balance sheet as at 31 December 2004
                                                                  Previous           IFRS      Restated
                                                                      GAAP     conversion    under IFRS
                                                                              adjustments
                                                        Notes          £m             £m             £m
Non-current assets
Goodwill                                              1, 2,12        349.1           33.7         382.8
Intangible assets                                    3, 7, 12          2.9           14.9          17.8
Plant, property and equipment                            1, 7         83.6          (11.1)         72.5
Share of joint venture assets                               1         27.0          (27.0)            -
Share of joint venture liabilities                          1        (10.2)          10.2             -
Investments in associates                                   6          1.0            0.3           1.3
Available for sale investments                                         0.6              -           0.6
Deferred tax assets                                3, 4, 5, 8            -           29.2          29.2
Total non-current assets                                             454.0           50.2         504.2

Current assets
Inventories                                                 1         75.0            0.3          75.3
Trade and other receivables                          1, 8, 11        265.6          (15.2)        250.4
Current tax receivable                                     11            -            9.9           9.9
Available for sale investments                                         0.7              -          0.7
Cash                                                        1         57.4            5.9          63.3
Total current assets                                                 398.7            0.9         399.6
Total assets                                                         852.7           51.1         903.8

Current liabilities
Borrowings                                                            (3.2)             -          (3.2)
Trade and other payables                                 1, 9       (317.4)           4.4        (313.0)
Current tax payable                                        11        (22.3)          (8.3)        (30.6)
Provisions                                                 10            -           (5.5)         (5.5)
Total current liabilities                                           (342.9)          (9.4)       (352.3)
Net current assets                                                    55.8           (8.5)         47.3

Non-current liabilities
Borrowings                                                  1       (388.7)          (0.2)       (388.9)
Deferred tax liabilities                                    8            -          (25.4)        (25.4)
Retirement benefit obligations                              4            -          (12.4)        (12.4)
Provisions                                           1, 4, 10        (35.8)          18.8         (17.0)
Trade and other payables                                              (2.9)          (0.1)         (3.0)
Total non-current liabilities                                       (427.4)         (19.3)       (446.7)
Total liabilities                                                   (770.3)         (28.7)       (799.9)
Total net assets                                                      82.4           22.4         104.8

Equity
Issued share capital                                                  22.3               -         22.3
Share premium                                                        123.8               -        123.8
Shares to be issued                                                    4.2               -          4.2
Other reserves                                                         1.5               -          1.5
Retained earnings                                                    (78.1)           22.0        (56.1)
Total shareholders' equity                                            73.7            22.0         95.7
Minority interests in equity                               13          8.7             0.4          9.1
Total equity                                                          82.4            22.4        104.8





Notes to reconciliation of IFRS financial statements to previously reported UK
GAAP financial statements - consolidated balance sheet as at 31 December 2004



This reconciliation has been updated since the interim report primarily in
respect of additional deferred tax liabilities identified in respect of tax
deductible goodwill (see note 8), adjustments to the valuation of the net
retirement benefit liability (see note 4), and increased minority interests (see
note 13).



1         Proportionate consolidation of joint ventures (intangibles £11.3m,
plant, property and equipment £2.5m, inventories £0.3m, receivables £3.3m, cash
£5.9m, creditors £6.1m, long-term borrowings £0.3m, provisions £0.1m).

2         £24.3m of goodwill amortisation under UK GAAP is reversed.

3         £0.6m amortisation of intangibles identified on acquisition in 2004
and separated out of goodwill and associated deferred tax of £0.2m.

4         £12.4m net retirement benefit liability calculated in accordance with
IAS 19 and disclosed separately. The associated deferred tax asset is £0.5m.

5         A £0.3m deferred tax asset has been set up at transition date in
respect of share based payments. This was increased by £0.5m during the year.

6         Net liabilities of £0.3m on investments in associates not recognised
under IFRS.

7         £14.6m software reclassified from tangible fixed assets to intangible
fixed assets.

8         A £9.8m deferred tax liability has been set up at transition date in
respect of tax deductible goodwill.

A further deferred tax liability of £2.8m net of £0.4m exchange has been
recognised relating to tax deductible goodwill in the year. Deferred tax assets
and liabilities are disclosed separately.

9         Under IFRS, dividends are recognised when approved or paid rather than
when declared. The accrual for the final proposed 2004 dividend of £10.6m at
December is reversed.

10     £5.5m of provisions falling due in less than 1 year are disclosed
separately on the face of the balance sheet.

11     Corporation tax receivable has been reclassified from current tax payable
and trade and other receivables to current tax receivable.

12     £1.9m of intangibles identified on 2004 acquisitions have been
reclassified from goodwill to intangibles.

13     The minority interest has increased by £0.4m in relation to the disposal
of a share in the group's Russian subsidiary, effective 31 December 2004.


Consolidated unaudited cash flow as at 31 December 2004
                                                                 Previous  GAAP      IFRS conv'n      Restated
                                                                                       adjust'ts    under IFRS
                                                           Notes            £m                              £m
Cash flows from operating activities
Cash generated from operations                                 1          107.2              6.2         113.4
Income tax paid                                                1          (19.6)            (0.6)        (20.2)
Net cash generated from operating activities                   1           87.6              5.6          93.2

Cash flows from investing activities
Acquisition of subsidiaries (net of cash                                  (11.0)               -         (11.0)
acquired)
Sale of subsidiaries (net of cash disposed)                                 0.1                -           0.1
Sale of associates                                                          7.4                -           7.4
Proceeds from sale of property, plant and                                   2.2                -           2.2
equipment
Purchase of property, plant and equipment                   1, 2          (26.7)             4.4         (22.3)
Purchase of intangible assets                                  2              -             (5.7)         (5.7)
Interest received                                                           0.7                -           0.7
Dividends received                                             1            2.6             (2.1)          0.5
Net cash used in investing activities                                     (24.7)            (3.4)        (28.1)

Cash flows from financing activities
Net proceeds from issue of ordinary share capital                           3.2                -           3.2
Dividends paid to company's shareholders                                  (13.7)               -         (13.7)
Dividends paid to minority interests                                       (1.4)               -          (1.4)
Decrease in debt                                                           (1.6)               -          (1.6)
Interest paid                                                             (20.2)               -         (20.2)
Purchase of company shares                                                 (4.1)               -          (4.1)
Net cash used in financing activities                                     (37.8)               -         (37.8)

Net increase in cash and cash equivalents                      1           25.1              2.2          27.3

Cash and cash equivalents at beginning of year                 1           32.2              3.5          35.7
Exchange gain on cash and bank overdrafts                      1            0.1              0.2           0.3
Cash and cash equivalents at end of year                                   57.4              5.9          63.3

Net debt                                                                  335.1             (5.7)        329.4



Notes

1.       Cash flows relating to TNS' share of joint ventures are included in the
consolidated cash flow statement under IFRS in each relevant line of the cash
flow statement and any dividends received from joint ventures, previously shown
as a cash inflow, are eliminated.

2.       Purchases of software have been reclassified from purchase of property,
plant and equipment to purchase of intangible fixed assets.


                                                                                  1 January  2004   31 December
                                                                                                           2004
Net equity reconciliation                                                                      £m            £m
Net assets under UK GAAP                                                                     76.7          82.4
Impact of changes in accounting for:
Write off negative goodwill                                                                   0.1             -
Retirement benefits                                                                           0.2           0.8
Net liabilities of associates                                                                 0.1           0.3
Increase minority interest in Russian subsidiary                                             (0.4)            -
Add back goodwill amortisation                                                                  -          24.3
Revenue recognition adjustment                                                               (0.7)         (0.7)
Amortisation of intangibles net of deferred tax                                                 -          (0.4)
Deferred tax on goodwill and share based payments                                           (10.7)        (12.5)
Write back proposed dividends                                                                 8.9          10.6
                                                                                             (2.5)         22.4
Net equity under IFRS                                                                        74.2         104.8








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