Sie sind auf Seite 1von 40

ANNUAL

REPORT
2007
Financial highlights
Headlines for the 2007 Annual Report

Turnover up 18% to a record £131m Numbers employed: a record 2,483 Investment in new plant and machinery:
- UK a record £20m
Operating profit after exceptionals up - Mainland Europe
65% to a record £7.4m - North America Shareholders’ funds up 95% to £14.2m
- Asia
Pre-tax profit up 86% to a record £5.8m; - Australasia Net assets up 83% to £14.3m
25% above the previous best

The Pindar Group - Annual Report 2007


Contents

Contents

02 Financial highlights

04 Chairman’s statement

06 Finance Director’s overview

08 Chief Executive’s overview

10 Financial reports

03
Chairman’s statement
The forecast is tough trading conditions with areas of great opportunity

The Pindar Group has turned in a very strong performance this


year with both sales and profit showing a healthy increase.
Looking ahead we appreciate that certain economies have taken
Investment
Investment is something that, as a family, Pindar has never stinted
some knocks recently and this will have an impact on some of
on, as it is a key point in securing the future of the business. In
the markets we operate in as we move into 2008.
this financial year, we have made significant investments in our
employees, buildings, infrastructure, presses and software.
However, the continued application of our Group values –
respect, improving capability and being the most progressive –
The investment in our Indian operations helps us to provide
supported by robust strategies and processes, has helped us to
around the clock support and a better customer experience for
capitalise on market opportunities across the globe and weather
Yellow Book.
the differences within those markets we serve.
In the UK 2% of Pindar Set’s payroll costs were invested in
The ongoing implementation of our T strategy – providing global
learning and development so that our employees can do their
content management and technology solutions and a vertical
jobs well, be confident in their roles and work in an environment
service offering in the UK – continues to bear fruit.This financial
where they can embrace change and flexibility.
year in particular can be characterised by innovation, investment,
best practice and our responsibility to the environment.
Pindar Graphics has acquired businesses that complement and
expand the services we offer to our customers, and
Innovation commissioning the latest technology in press and binding
equipment is helping us to anticipate customer future needs as
We have introduced a suite of E-tools at Pindar Set to help the well as meeting current requirements.
Yellow Book sales teams in the USA provide their customers
with accurate, high quality spec visuals which has led to greater For our AlphaGraphics franchisees it is about shared investment.
customer satisfaction. We know that our franchisees make a considerable
commitment when they invest in an AlphaGraphics business
Pindar Graphics customers have been supported through centre so we make sure we continue to provide the right mix of
improved workflow management tools (Proof Manager) and the support services, training and development, hence our Digital
majority of our online retail customers have seen significant Business Center model which is proving an attractive, affordable
increases in online sales through our E-commerce know-how business proposition to potential owners.
and the technology employed.
These ongoing investments maintain our competitive edge and
Delighted AlphaGraphics customers are realising much higher focus on the customer’s experience; securing the future of the
campaign response rates than previous direct marketing company and its employees.
campaigns through our provision of personalized
communications and use of variable data software.

The Pindar Group - Annual Report 2007


Chairman’s statement

Best practice Team Pindar’s two skippers – Brian Thompson and Jo Royle – as
part of our sports marketing activity, are both keen advocates
for the environment, having seen the impact of climate change
The success of the Group is not possible without our people.
on the world’s oceans during their sailing careers.
Many of our best practice initiatives have focused on engaging
and motivating our people while helping them to acquire greater
Throughout the Group we have implemented a number of
knowledge and skills to excel in their jobs.
successful environmental initiatives over the years, including
exceeding the BPIF climate change levy targets for energy
The AlphaGraphics Learning Zone features web-enabled
efficiency and, more recently, reductions in transport emissions
interactive training modules for all aspects of the business, while
and waste to landfill.This year we installed video conferencing
the AlphaGraphics Sales Academy (ASA) helps owners move
across the Group to help our staff use their time more effectively.
their businesses forward using the latest, most effective sales
techniques.
In Pindar Set employees were instrumental in setting up a green
team (a model now being rolled out to our other businesses)
As well as developing a modular branch for their management
and through the initiatives implemented in 2006, Pindar Set UK
development programme, it has been exciting to see the mix of
won one of the Green Organisation’s coveted Green Apple
best practice and innovation that Pindar Set has applied in the
Awards.
recent events it held. These included the inaugural rally to
celebrate the opening of the Magnum building in Bangalore and
On the award-winning front, Pindar was also delighted to be
the UK ‘Improving Capability through Healthy Minds and Bodies’
awarded Company of the Year and CSR Company of the Year by
Week.
the BPIF (British Printing Industry Federation).
The employee survey we implemented at Pindar Graphics drew
This vigorous mix of innovation, investment, best practice and
on best practice from Pindar Set.The process itself improved
environmental responsibility keeps our customers and their
communications by including focus groups with staff and follow-
experiences at the centre of all we do. In this next year with an
up groups to see how to tackle areas that were causing concern
organisation that is mentally agile and physically fit, I know that
while recognising those things that we are doing well. Action
we have the wherewithal to ride out the storms and look
plans are being formulated, but one immediate step we took was
forward to maximising some great print and technology
to implement quarterly business reviews to keep staff informed
opportunities across our global markets.
and understand better how they contribute to the business.

The environment
At the heart of all the Pindar Group is the value of Respect and
how well we apply that value to our customers and our
employees. For the first time we are making a public commitment G Andrew Pindar DL
to communicating our Respect for the environment. Chairman

05
Finance Director’s overview
Results Cash flow & net
This was an eventful year for the Group – not least due to the
increased size and make-up of the Group. More importantly, this
borrowings
year we report our best ever pre-tax profit – it was 25% better The Group generated £3.1m (2006: £15.7m) from operating
than the previous best and 86% up on last year. activities.

In fact, there was a whole battery of pleasing key performance Overall borrowings (including asset finance) increased in the year
indicators.Turnover up 18% on last year to £131m; operating by £26.5m to £43.7m.The bulk of this was to fund the acquisition
profit up 65% to £7.4m; shareholders’ funds up by 95% to of new presses for Eastfield and Preston, the fitting out of the two
£14.2m and net assets up by 83% to £14.3m. new studios in India for our Directories business, together with
taking on debt with the acquisition of Cooper Clegg Limited.
Progress was made by all three businesses, and headlines about
their individual performance and highlights appear in the Chief The asset funding is secured by charges over the relevant assets;
Executive’s statement. working capital funding carries with it securities in favour of the
bank.

Acquisitions/sales There are no off-balance sheet borrowing arrangements.


The Group made several exciting and significant acquisitions in the
year – both from strategic and quantum perspectives. Details
appear in the Directors’ Report on page 11.
Earnings & dividends
Earnings per share, before exceptional items and amortisation of
goodwill, was £138 per share (2006: £270).
Finance costs A dividend of £13 per share (2006: £10) was paid in December
The interest charge for the year of £1,555k was £206k (15%)
2006.
up on the previous year, partially due to the level of borrowings
increasing during the second half of the year and partially due to
base rate being on average 0.7% higher this year than the
previous year.
Corporate governance
The Board
The Board’s key roles are to provide leadership of the Group,
Taxation set out the strategic objectives of the Group and ensure that
the necessary resources are made available to the management
The effective rate for the year was 14.7% (2006: 44.2%).
of the various businesses to enable them to meet those
The underlying rate of tax, which excludes the effect of
objectives.
non-allowable exceptional items and prior year adjustments, was
33.1% (2006: 22.6%).
During the year under review, the Board met eleven times.

The Pindar Group - Annual Report 2007


Finance Director’s overview

Internal controls The annual US dollar profit contribution is broadly hedged by


The Group Board receive a full financial report each month borrowings of a similar sum in that currency.
which details the results for each business and the Group
overall, and also reviews cash flows, performance against bank
covenants and various other financial key indicators for current Pensions
and future forecast performance. The defined benefit scheme has been closed to future accruals
since April 2006, with members invited, along with subsequent
Audit committee new starters, to join the existing defined contribution scheme.
The adequacy and effectiveness of controls over the financial The pension fund is run independently by the scheme’s Trustees,
systems are reviewed by the Audit Committee in conjunction who take advice from the scheme’s actuary.There are four
with the company’s auditors. company nominated Trustees and four member nominated
Trustees.The Trustees met a total of five times during the year.
Remuneration committee The deficit at 30 September 2007, net of deferred tax, as
Under the chairmanship of JJ Carrier, the Committee continues computed under FRS17, was £8.5m (2006: £12.4m). Full details
to meet on an ad hoc basis to review the overall compensation appear in Note 23 of the accounts.
for senior executives.The Committee uses the services of an
external consultancy company to assist it in its deliberations. The reduction in the deficit was primarily due to:
a) A 9% increase in the market value of the assets.
Risk control b) Improved discount rates which helped reduce the quantum
The Group Board carries the ultimate responsibility for control of the liabilities.
for risk management throughout the Group. Each trading c) Cash contributions during the year, by the company.
company operates risk management controls appropriate to the
business needs and the needs of its customers and other
business partners. Financial reporting
The accounts have been prepared under UK GAAP using
Treasury policies policies unchanged from last year.

The policy has traditionally been for approximately half of the Businesses acquired during the year have had their accounting
borrowings (generally asset finance) to be fixed rate over periods policies brought into line with those adopted by the Group and
of between 2 and 10 years and the other half (generally working as described in Note 1 of the accounts.
capital finance) on variable interest rate arrangements.There is a
mix of medium and short-term borrowings to fund working
capital needs and this is reviewed annually with the bank.

There was a significant increase in bank borrowings at the year


end due to the interim funding of a new press. Following the John Armistead FCA
year end, asset finance agreements relating to the press were Group Financial Director
put in place, with a total value of £10.4m.

07
Chief Executive’s overview
A summary of Pindar’s business activities in 2006/07
Pindar is a leading print and electronic media company In addition to the results we’ve achieved as a network, we have
employing 2500 people across the world and consists of three also had a successful financial year at AlphaGraphics Inc. Our
businesses: AlphaGraphics – a franchise network of business subsidiary, Creative Media Group, which is an internet services
centres providing communications solutions; Pindar Set – company, achieved a third record year under the capable
processing adverts and providing pre press services to its leadership of Ralph Stoeber.
customer Yell; and Pindar Graphics – offering communication
services across multiple channels including print, E-commerce
and software services. Pindar Graphics
This last year has been a tough year for the business, and while
AlphaGraphics Inc the market continues to insist on the lowest price, it is an ongoing
challenge to realise the profit margin we would like to see.
2007 was a very good year for the team at AlphaGraphics Inc
and the franchise network overall. We maintained our industry Aware that several print companies have had to close in the last
leadership position against our franchised competitors with an year, we continue to broaden and provide a package of
annual turnover in excess of $1.1 million for all our locations communications services across multiple channels, giving the
that have been open one year or more. business greater financial security.

Our system is also growing and at the end of this financial year Our largest acquisition was the purchase of Cooper Clegg,
we had 262 locations in operation with our international master Tewkesbury, in March 2007, a quality magazine printer looking
licensees in Brazil, Mexico and Russia contributing to this growth, after a range of high-end consumer, customer and business
all of whom have some great business opportunities in the year magazines including Vanity Fair, Easy Living and Sainsbury’s.This
ahead. has given us the opportunity to service both commercial and
contract printing work.
The introduction of the Digital Business Center (DBC) concept
two years ago has proved a wise move.The DBC concept Investments have included commissioning the latest heat set
affords our current franchisees a very economical expansion web offset and sheet fed presses to provide the widest range of
vehicle as well as an attractive business opportunity for new formats and ensure the highest quality, colour accurate results
franchisees with respect to investment required and the time to meet customers’ requirements. Investments in MIS, new IT
reach profitability. The DBCs currently in operation are in systems and video conferencing facilities have improved our
general exceeding both business objectives and sales targets. communications across the business.

Our Personalized Communications initiatives have had a major Throughout the investment process we have been mindful of
impact. Our network is becoming a leading provider of implementing solutions that reduce our impact on the
marketing communications services for clients and builds upon environment – optimising energy efficiency, recycling and
the foundation of our business created through our legacy reducing waste, and reducing transport emissions.
products and services. 400+ AlphaGraphics owners and staff
participated in direct marketing training over the past year. Our value added sales strategy continues to see dividends as
30%+ of customers now purchase 2 or more services from us.

The Pindar Group - Annual Report 2007


Chief Executive Overview

Pindar Set Across all of our businesses we have seen more proactive steps
taken as an organisation to reduce our impact on the
environment. Within Pindar Set the work of our Environmental
Pindar Set has seen a profitable and productive year, with best
Manager and team of Environmental Champions has led to the
practice initiatives and technology applied in the UK and the
business winning one of the Green Organisation’s coveted
USA, supported by substantial investment in our Indian
Green Apple Awards. Within Pindar Graphics all our main
operations and opportunities now opening up in Spain.
printing sites achieved FSC chain of custody certification
acknowledging the importance of purchasing paper sourced
In the States we launched a number of Pindar designed sales
from sustainable and well-managed forests.
tools including the Spec Visual Bank,Virtual Studio, E Spec and
E Art. These tools mean the Yellow Book sales teams can
Looking ahead to this financial year, we know that certain
provide visuals and artwork electronically to customers quickly,
markets in which we operate will continue to be tough but we
while maintaining high levels of quality and accuracy.
are prepared to meet the challenges and opportunities that we
will face. And through our ongoing commitment to the right
Our Indian operations have seen significant investment in the last
people, technology and processes, we will continue to exert
year. We have provided purpose-built accommodation, the latest
ourselves in providing the best experience possible for our
software and equipment for our employees in Hyderabad and in
customers.
the Magnum building at Bangalore.

Employee satisfaction surveys were carried out across the UK


for the third time and the States and India for the first time,
showing us how we can better help our employees to achieve
high results in their jobs and enjoy being at work.
Andrew Dalton
Group Chief Executive
Another achievement for our UK operations has been the
improvement of turnaround times on Spec Visual and Display
Ad Amends. Run on a trial basis over the last year we have been
able to provide 94% of Spec Visuals to Yell in 48 hours or less
(compared to former timescales of 5 days) and turned around
56% of Display Ad Amends in 24 hours.

09
Annual Report & Accounts - Year Ended 30 September 2007

Contents

11 Directors’ Report
REGISTERED AUDITOR
Ernst & Young LLP
15 Group Profit & Loss Account and Statement of Total Recognised Gains and Losses
Leeds
16 Group Balance Sheet
BANKERS
17 Company Balance Sheet
HSBC Bank plc
Scarborough
18 Group Statement of Cash Flows

19 Notes to the Accounts


SOLICITORS
Eversheds
39 Auditor’s Report
Leeds

DIRECTORS
GA Pindar
RS Lumby
AL Dalton
JGHL Armistead
KK Cushing
DT Jesson
GTV Pindar
JJ Carrier

SECRETARY
DA Noakes

REGISTERED OFFICE
Pindar House
Thornburgh Road
Eastfield
Scarborough
YO11 3UY
Registration No.
4049083

The Pindar Group - Annual Report 2007


Directors’ Report

The directors present their report and the accounts for the year ended 30 September 2007.

Results and dividends

The profit for the year, after taxation, amounted to £4,549,749 (2006 £1,640,329)
A dividend of £309,335 (2006 £237,950) was paid on 22 December 2006.

Principal activity, review of the business and future developments

This year has seen a significant step forward in the Group’s constitution with the consolidation of Screen Pages (acquired just before the
beginning of this year) and subsequently the acquisition of Cooper Clegg Ltd, Evesham Binders Ltd, Egan Reid and Acorn eCommerce Ltd.
The Group also acquired two Indian “business process outsourcing” studios and staff from Macmillan and a 50% interest in Barnard &
Westwood Ltd.

In more detail:
Cooper Clegg, based at Tewkesbury, is one of the country’s top magazine printers, offering extensive experience and skills in the magazine
publishing sector, printing titles such as Easy Living,Vanity Fair, FHM, More,Top Santé and Empire.The £30m turnover business, including its
subsidiary - Evesham Binders Ltd - was acquired on 2 March 2007. Unfortunately the site suffered the “July floods” that impacted Tewkesbury
and surrounding areas and not only damaged beyond repair one of the two perfect binders but also caused widespread disruption to
production in general. Despite this set back, we have invested considerable time, effort and resource into the business infrastructure with the
intention to increase efficiencies in production to match the existing quality of output.

Egan Reid, based in New Zealand, is Australasia’s most experienced producer of books and documents and since 1991 has managed the
production of thousands of publications ranging from trade product catalogues, educational and technical works, to fiction and non-fiction titles
for the retail book trade for publishers such as Penguin Books and Elsevier. It was acquired by the group on 23 January 2007.

In June 2007 Pindar acquired 700 graphic designers in two locations, Bangalore and Hyderabad, in India from Macmillan.The two studios
provide display ad creation, catalogue page production, data cleansing and manipulation and software quality testing for customers throughout
the group.

Acorn eCommerce was acquired in August 2007 to complement the existing range of online trading sites as offered by Screen Pages. Between
them, these two companies now have created over eighty e-commerce sites.

Barnard & Westwood is a London based, high end printer and bookbinder privileged to carry the Royal Warrant which was acquired jointly by
the group, and a third party investor, on 22 December 2006. Our joint venture partner brings with him many years of marketing expertise that
will help build on the company’s existing reputation for quality and service.

Meanwhile, the existing businesses also had busy years.The Eastfield plant commissioned its biggest ever press – a Lithoman 3 short grain cut
off with in line stitcher.This state of the art press will considerably enhance the capacity and efficiency of the site.The opportunity was taken
during the installation process to retro fit some of the new technologies to the existing press park that will further contribute to the safe and
efficient operation of the site.The downside of all this was that the second half year was negatively impacted by the absence of the press that
was disposed of to make room for the new one. Pindar Graphics’ sheet fed centre of excellence at Preston was further enhanced by the
purchase of a 10 unit and a 12 unit press.

11
Directors’ Report

Our catalogue software business consolidated its market leading position in the USA and UK with the launch of its latest version of AgilityCMS
containing a suite of new functionality and enjoyed considerably increased revenues from its page building service, assisted by the creation of a
sophisticated back office in Bangalore.

The AlphaGraphics print franchise business based in Salt Lake City continued to help its franchisees deliver an ever more sophisticated offering
to their customers.

Pindar Set maintains its privileged role as the supplier of choice for all advert processing and book pagination services to Yell, as that company
grows organically and through acquisition both in the USA and now Spain.

The impact of the investment in new and existing businesses resulted in a significant increase in borrowings and we were delighted with the
support and commitment of our funders in sharing our vision to take the Group to the next level.

The pension deficit came onto our balance sheet for the first time last year and had a negative impact of £12.3m on shareholders’ funds.This
year, the deficit has reduced by £4.1m to £8.3m, partially due to the group investing £1.2m into the fund and partially due to the twin benefits
of a healthy increase in the value of the investments combined with a favourable improvement in discount rates that helps to reduce the
liabilities as computed under FRS17.

This improved position is in stark contrast to the increase in levy imposed by the Pension Protection Fund which has resulted in this year’s levy
increase eight-fold compared to last year and imposes an undue burden on the scheme, hindering the efforts of the Trustees and the company
to reduce the deficit.

Principal risks and uncertainties

The print sector continues to defy gravity in that, whilst some companies have fallen by the wayside, many others manage to keep busy only by
taking work at unprofitable margins. We believe our policy of investing in people and equipment to ensure an optimum blend of quality and
efficiency will serve us well for when the market returns to something approaching normality.

The scale of the work and resource required to bring the Tewkesbury site back into a profitable business is considerable but, based on current
knowledge is, we believe, manageable.

Key performance indicators

The company’s key financial and other performance indicators during the year were as follows:

2007 2006 Change


£’000 £’000 %
Turnover 131,303 110,931 18
Operating profit 7,364 4,476 65
Profit after tax 4,550 1,641 177
Net Assets 14,300 7,807 83

The increase in turnover was largely due to the acquisitions made late last year and during this year – particularly Cooper Clegg Ltd which
contributed £18.3m.

The improvement in operating profit and profit after tax, were largely due to the absence, this year, of any exceptional costs (Note 4).
Net assets were boosted, in broadly equal measure, by the retained profit in the year and the net reduction in the pension deficit.

The Pindar Group - Annual Report 2007


Directors’ Report

Directors and their interests

The directors in office during the year were:-

G A Pindar
R S Lumby
A L Dalton
J G H L Armistead
K K Cushing
D T Jesson
G T V Pindar
J J Carrier

The directors in office at the date of signing this report are listed on page 1.
GA Pindar, GTV Pindar and RS Lumby hold interests in shares of the company as follows:
Ordinary shares of £1 each at 30 September:

2007 2006
Held Held Held Held
directly jointly directly jointly
G T V Pindar 714 - 714 -
R S Lumby 8,250 - 8,250 3,908
G A Pindar 10,323 3,308 10,323 3,908

GA Pindar has an interest in 1,200 (2006: 3,908) shares, through control of a Trust which holds the shares for the benefit of his children.

In addition, JGHL Armistead holds an interest in 2,000 (2006: 2,000) Ordinary shares of the subsidiary company AlphaGraphics Inc.

Creditor payment policies

The group is responsible for agreeing the detail of terms and conditions relating to transactions with its suppliers. It is group policy to abide
by the agreed terms of payment with suppliers where the goods and services have been supplied in accordance with the relevant terms and
conditions of contract. At 30 September 2007 the group’s trade creditors outstanding represented approximately 47 days purchases
(2006: 51 days).

Political and charitable donations

During the year political donations amounted to £25,000 (2006 £nil), and donations to charitable causes were £132,516 (2006 £208,215).

13
Directors’ Report

Directors’ responsibilities

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable United Kingdom
Generally Accepted Accounting Practice.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to
prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting
Standards and applicable law).The financial statements are required by law to give a true and fair view of the state of affairs of the group and
the company and of the profit or loss of the group for that period. In preparing those financial statements, the directors are required to:

I Select suitable accounting policies and then apply them consistently;


I Make judgements and estimates that are reasonable and prudent;
I State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the
accounts; and
I Prepare the accounts on the going concern basis unless it is inappropriate to presume that the company or group will continue in business.

The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position
of the group and enable them to ensure that the accounts comply with the Companies Act 1985.They are also responsible for safeguarding
the assets of the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Directors’ statement as to disclosure of information

As at the date of this report, so far as each director is aware, there is no relevant audit information of which the company’s auditors are
unaware and each director has taken such steps as he or she should have taken as a director in order to make him or herself aware of any
relevant audit information and to establish that the company’s auditor is aware of that information.

Auditors

A resolution to re-appoint Ernst & Young LLP as the company’s auditor will be proposed at the Annual General Meeting.

By order of the board.

D A Noakes
Secretary

14 February 2008

The Pindar Group - Annual Report 2007


Year Ended 30 September 2007 - Group Profit & Loss Account

Notes 2007 2006


£’000 £’000 £’000 £’000
Turnover 2 131,303 110,931
Change in stocks of finished goods 723 141
and work in progress
Other operating income 1,474 1,238
Ongoing operations 114,407 112,246
Acquisitions 19,093 64
133,500 112,310
Raw materials and consumables (26,585) (23,418)
Other external charges (23,177) (15,720)
(49,762) (39,138)
Staff costs 3 (49,733) (45,112)
Depreciation and amortisation (4,936) (6,663)
Other operating charges (21,705) (13,815)
(76,374) (65,590)
Operating profit - pre exceptional items
Ongoing operations 8,363 7,576
Acquisitions (999) 6
Operating profit
- pre exceptionals 4 7,364 7,582
Exceptional items 4 - (3,106)
Operating profit
- post exceptionals 7,364 4,476
Net interest payable 6 (1,555) (1,349)
Profit on ordinary activities
before taxation 5,809 3,127
Taxation 7 (1,231) (1,381)
Profit on ordinary activities
after taxation 4,578 1,746
Minority interests (28) (105)
Profit after taxation 4,550 1,641

Year Ended 30 September 2007 - Statement of Total Recognised Gains and Losses

2007 2006
£’000 £’000

Profit after tax 4,578 1,746


Exchange difference (341) (141)
Actuarial gains and losses 4,663 2,339
Deferred tax on actuarial gains and losses (1,617) (702)
Total recognised gains and losses relating to the year 7,283 3,242

The notes on pages 19 to 38 form part of these accounts.

15
Group Balance Sheet - Year Ended 30 September 2007

Notes 2007 2006


£’000 £’000 £’000 £’000
Fixed assets
Intangible assets 8 2,073 4,018
Tangible assets 9 55,977 33,769
Investments 10 - 122
58,050 37,909
Current assets
Stocks 11 5,718 3,981
Debtors 12 30,233 19,792
Cash at bank and in hand 1,196 1,820
37,147 25,593
Creditors - amounts falling due
within one year 13 (56,190) (28,257)
Net current liabilities (19,043) (2,664)
Total assets less current liabilities 39,007 35,245
Creditors - amounts falling due after
more than one year 15 (12,758) (12,017)
Provisions for liabilities and charges 16 (3,453) (3,063)
Net assets – before pension liability 22,796 20,165
Pensions liability (net of deferred tax) 23 (8,496) (12,358)
Net assets – after pension liability 14,300 7,807
Capital and reserves
Called up share capital 17 24 24
Merger reserve 19 43 43
Profit and loss account 19 14,169 7,223
Equity shareholders’ funds 19 14,236 7,290
Minority interest 64 517
14,300 7,807

Approved by the Board on 14 February 2008 and signed on its behalf by

G A Pindar
Director

J G H L Armistead
Director

The notes on pages 19 to 38 form part of these accounts.

The Pindar Group - Annual Report 2007


Year Ended 30 September 2007 - Company Balance Sheet

Notes 2007 2006


£’000 £’000 £’000 £’000
Fixed assets
Tangible assets 9 2,831 2,840
Investments 10 4,317 4,502
7,148 7,342
Current assets
Debtors 12 19,412 15,952
Cash at bank and in hand 7 42
19,419 15,994
Creditors – amounts falling due
within one year 13 (23,620) (19,638)
Net current liabilities (4,201) (3,644)
Total assets less current liabilities 2,947 3,698
Creditors – amounts falling due after
more than one year 15 (753) (2,819)
Provisions for liabilities and charges 16 (174) (344)
Net assets 2,020 535
Capital and reserves
Called up share capital 17 24 24
Profit and loss account 18 1,996 511
Equity shareholders’ funds 2,020 535

Approved by the Board on 14 February 2008 and signed on its behalf by

G A Pindar
Director

J G H L Armistead
Director

The notes on pages 19 to 38 form part of these accounts.

17
Group Statement of Cash Flows - Year Ended 30 September 2007

Notes 2007 2006


£’000 £’000 £’000 £’000
Net cash flow from operating activities 24 3,095 15,669
Returns on investments and servicing of finance
Interest and similar income received 162 161
Interest paid (1,059) (892)
Interest element of finance lease rentals paid (668) (537)
Dividend paid to minority shareholders (28) -
Net cash outflow from returns on investments and
servicing of finance (1,593) (1,268)
Taxation
Corporation and overseas tax paid (1,456) (1,319)
Capital expenditure
Payments to acquire intangible fixed assets (375) (118)
Payments to acquire tangible fixed assets (16,751) (5,035)
Receipts from sale of tangible fixed assets 2,325 2,492
Payments to acquire investments (5) -
Receipts from the sale of investments 333 -
Net cash outflow for capital expenditure (14,473) (2,661)
Acquisitions and disposals
Payments to acquire shares in subsidiary undertaking (32) (646)
Payments to acquire shares from minority shareholders (810) -
Net cash acquired with subsidiary (3,611) (14)
Sale of operations - 28
Net cash outflow for acquisitions and disposals (4,453) (632)
Equity dividends paid (309) (238)
Net cash (outflow)/inflow before financing (19,188) 9,551
Financing
Finance lease capital repaid (3,436) (3,326)
New mortgage and loans received in the year 14,742 -
Mortgage and loan repayments in the year (5,892) (2,988)
Net cash inflow/(outflow) from financing 5,414 (6,314)
(Decrease)/increase in cash in year 26 (13,775) 3,237

The notes on pages 19 to 38 form part of these accounts.

The Pindar Group - Annual Report 2007


Year Ended 30 September 2007 - Notes to the Accounts

1 Accounting policies

(a) Accounting convention


The accounts have been prepared in accordance with applicable accounting standards under the historical cost convention.

(b) Basis of consolidation


The consolidated accounts include the accounts of the company and all its subsidiaries.

(c) Turnover
Turnover represents the invoiced amount of goods and services provided, and is stated net of value added tax, excluding payments on
account.

(d) Intangible fixed assets

Goodwill arising on the acquisition of businesses is being written off over its estimated useful lives of between one and twenty years.

The Master Licence Fee costs relate to amounts paid for the exclusive use of the AlphaGraphics system in the United Kingdom, Eire and
Brazil and are being amortised over the twenty-year term of the master licence agreement.

Software developments costs are amortised over the expected useful life of five years.

(e) Depreciation

Depreciation is provided on all tangible fixed assets, at rates calculated to write off the cost or valuation, less estimated residual value, of
each asset over its expected useful life as follows:

Freehold and long leasehold property 50 years on a straight line basis


Short leasehold property over term of lease on a straight line basis
Plant and machinery 3 to 12 years on a straight line basis
Fixtures and fittings 3 to 10 years on a straight line basis
Motor vehicles 30% - 40% per annum of written down value

(f) Stock and work in progress

Stock and work in progress is stated at the lower of cost and net realisable value.

In the case of raw materials and consumable stores, cost means purchase price including transport and handling costs, less trade discounts,
calculated on a first in first out basis. In the case of work in progress and finished goods, cost consists of direct materials, direct labour and
attributable production overheads.

Net realisable value means estimated net selling price less all further costs to completion and all costs to be incurred in marketing, selling
and distribution.

(g) Deferred 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 recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where
transactions or events that result in an obligation to pay more, or a right to pay less, tax in the future have occurred at the balance sheet
date, with the following exceptions:

19
Notes to the Accounts - Year Ended 30 September 2007

I provision is made for gains on disposal of fixed assets that have been rolled over into replacement assets only where, at the balance
sheet date, there is a commitment to dispose of the replacement assets.

I deferred tax assets are recognised only to the extent that the directors consider that it is more likely than not that there will be
suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.

Deferred tax is measured on a non-discounted basis at the tax rates that are expected to apply in the periods in which timing differences
reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

(h) Foreign currency

Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the transaction. Monetary assets
and liabilities have been translated into sterling at the rate of exchange prevailing at the balance sheet date.

(i) Leasing

Assets funded by finance leases are capitalised and future lease obligations, excluding interest, are included as creditors in the balance
sheet. Depreciation on such assets is charged in accordance with the group policy on depreciation and interest charges, calculated using
the actuarial method, are written off as incurred.

Rentals payable under operating leases are charged to the profit and loss account on the straight line basis over the lease term.

(j) Pension costs

The company operates a pension scheme with both defined benefit and defined contribution sections.The scheme is a multi-employer
scheme in which several of the company’s subsidiaries participate.The company is the principal employer and the scheme is not formally
sectionalised.The defined benefit section was closed to new members in June 2001 and closed to future accrual of benefits from April
2006.

All contributions are made to a separately administered fund. In respect of the defined benefit section, assets are measured at fair value
and liabilities are measured on an actuarial basis using the projected unit method and discounted at an interest rate equivalent to the
current rate of return on a high quality corporate bond.

The service cost of providing pension and other post-retirement benefits to employees for the year is charged to the operating profit or
loss for the year.The full cost of providing amendments to benefits in respect of past service and the curtailment costs resulting from the
defined benefit section ceasing future accrual are also charged to the operating profit or loss for the year.

The expected return on the defined benefit section assets based on the market value of scheme assets at the start of the financial year is
included within other finance costs.This also includes a charge representing the expected increase in liabilities of the schemes during the
year, arising from the liabilities being one year closer to payment. Differences between actual and expected returns on assets during the
year are recognised in the statement of recognised gains and losses in the year, together with differences from changes in assumptions.The
net deficit of the defined benefit section is reported on the balance sheet within the pension liability.This is net of related deferred tax.

Although members of the defined benefit section may accrue no further benefits, the participating employers within the scheme have
agreed with the scheme’s trustees to continue paying contributions at the rate of £105,000 per month increasing each July by 5% in order
to reduce the scheme deficit.

Contributions in respect of the defined contribution section are charged in the profit and loss account as they become payable.

The company provides no other post retirement benefits to employees.

The Pindar Group - Annual Report 2007


Year Ended 30 September 2007 - Notes to the Accounts

(k) Research and development

Research and development costs are written off to the profit and loss account as incurred.

2 Turnover and profit on ordinary activities before taxation

Substantially all the turnover and profit before taxation arose from the group’s principal activities, namely printing and related activities.

The group operates in the following geographical segments applicable to origin and destination of turnover:

2007 2006
Turnover Profit/(loss) Net assets Turnover Profit/(loss) Net assets
£’000 £’000 £’000 £’000 £’000 £’000
UK and Europe 97,252 3,160 9,435 78,595 1,406 3,693
USA 31,127 2,186 4,459 32,336 1,887 4,112
Asia 2,672 515 459 - (166) 1
Australasia 252 (52) (53) - - -
131,303 5,809 14,300 110,931 3,127 7,806

3 Staff costs
2007 2006
£’000 £’000
Wages and salaries 43,762 39,353
Social security costs 4,105 3,428
Other pension costs 1,866 2,331
49,733 45,112

The average monthly number of employees during the year:


2007 2006
Number Number
Office, management and sales 422 355
Production 2,061 1,172
2,483 1,527

21
Notes to the Accounts - Year Ended 30 September 2007

4 Operating profit
2007 2006
£’000 £’000
This is stated after charging/(crediting):
Auditors remuneration
Audit 193 137
Other services 77 92
Operating lease charges
Plant 173 149
Land and buildings 2,443 886
Rentals recharged (259) (263)
Depreciation and amortisation
Tangible assets - owned assets 3,341 4,410
- assets held under finance lease and mortgage 4115 1,565
Intangible assets (2,520) 688
Profit on disposal of fixed assets (93) (490)
Gains on currency translations (335) (20)
Share of losses of joint venture (28) -
The exceptional items consist of:
Pension curtailment costs - 2,141
Software impairment - 965
- 3,106

5 Directors’ remuneration
2007 2006
£’000 £’000
Salaries and estimated benefits 1,514 1,611
Contributions to money purchase pension scheme 50 25
1,564 1,636
The emoluments of the highest paid director were as follows:
Emoluments, excluding pension contributions 382 436
Contributions to money purchase pension scheme - -
382 436
Defined benefit pension scheme:
Accrued annual pension at end of year 141 141

At the year end four (2006: four) directors were accruing benefits under the money purchase pension scheme.

6 Interest
2007 2006
£’000 £’000
Bank loans and overdraft 1,018 833
Finance leases 668 537
Other loans 72 59
Interest charge on discount unwinding 28 -
Notional interest on pensions 24 131
1,810 1,560
Interest receivable and similar income (255) (211)
1,555 1,349

The Pindar Group - Annual Report 2007


Year Ended 30 September 2007 - Notes to the Accounts

7 Taxation

(a) Analysis of tax charge for the year

The charge based on the profit for the year comprises:


2007 2006
£’000 £’000
UK corporation tax:
UK corporation tax on profits for the year - 1,345
Adjustments in respect of previous years 114 (14)
Double tax relief - (411)
With-holding tax 35 -
Foreign tax:
Overseas tax 1,196 961
Adjustments in respect of previous years (390) (19)
Total current tax 955 1,862
Deferred tax:
Origination and reversal of timing differences 292 (442)
Adjustments in respect of previous years (16) (39)
Total deferred tax 276 (481)
Tax charge on profit on ordinary activities 1,231 1,381

(b) Factors affecting the tax charge for the year

The tax assessed on the profit on ordinary activities is different to the standard rate of corporation tax in the UK. These differences are
explained below:
2007 2006
£’000 £’000
Profit on ordinary activities before tax 5,809 3,127
Profit on ordinary activities multiplied by the standard rate
of corporation tax in the UK of 30% (2004: 30%) 1,743 938
Effect of:
Disallowed expenses and non taxable income 831 147
Capital allowances in excess of depreciation (6) (86)
Short term timing differences (284) 563
Deferred tax asset not recognised 6 47
Marginal relief and other rate differences 128 269
Adjustments in respect of previous periods (276) (33)
Changes in IBA legislation (201) -
Losses brought forward utilised - (35)
Capital gains - (8)
Goodwill amortisation (831) 60
Deferred tax rate differences (190) -
Withholding tax 35 -
Current tax charge for the year 955 1,862

23
Notes to the Accounts - Year Ended 30 September 2007

8 Intangible fixed assets


Group
Negative Positive Software Master Licence
Goodwill Goodwill Dev Fee Costs Total
£’000 £’000 £’000 £’000 £’000
Cost
At 30 September 2006 - 4,421 3,352 567 8,340
Additions (see note 10) (5,262) 814 5 - (4,443)
Exchange difference - - (53) (19) (72)
At 30 September 2007 (5,262) 5,235 3,304 548 3,825

Amortisation
At 30 September 2006 - 920 3,109 293 4,322
Charge for the year (3,033) 392 71 50 (2,520)
Exchange difference - - (45) (5) (50)
At 30 September 2007 (3,033) 1,312 3,135 338 1,752

Net Book Value


At 30 September 2007 (2,229) 3,923 169 210 2,073

At 30 September 2006 - 3,501 243 274 4,018

Software acquired in 2003/04 has since been significantly re-written for the benefit of current and future customers.Therefore the original
core product is largely obsolete and hence was impaired in earlier years to reflect its residual value. Development expenditure continues
to be written off to the profit and loss account as incurred.

The negative goodwill arose on the acquisition of Cooper Clegg Ltd and its subsidiary Evesham Binders Ltd (see note 10) and is being
written off over a period of 12 months.

9 Tangible fixed assets


Group
Freehold Plant & Fixtures &
Land and Buildings Machinery Fittings Total
£’000 £’000 £’000 £’000
Cost
At 30 September 2006 8,646 55,834 2,413 66,893
Additions 139 20,052 746 20,937
Disposals (2) (9,507) - (9,509)
Acquisition of subsidiary - 11,318 105 11,423
Exchange difference (470) (246) (70) (786)
At 30 September 2007 8,313 77,451 3,194 88,958

Depreciation
At 30 September 2006 1,308 30,340 1,476 33,124
Charge in year 319 7,006 131 7,456
Disposals - (7,278) - (7,278)
Exchange difference (78) (219) (24) (321)
At 30 September 2007 1,549 29,849 1,583 32,981

Net Book Amounts


At 30 September 2007 6,764 47,602 1,611 55,977

At 30 September 2006 7,338 25,494 937 33,769

The Pindar Group - Annual Report 2007


Year Ended 30 September 2007 - Notes to the Accounts

9 Tangible fixed assets (continued)


Company
Freehold Plant & Fixtures &
Land and Buildings Machinery Fittings Total
£’000 £’000 £’000 £’000
Cost
At 30 September 2006 3,071 239 82 3,392
Additions - 124 15 139
Disposals - (103) - (103)
At 30 September 2007 3,071 260 97 3,428

Depreciation
At 30 September 2006 379 109 64 552
Charge in year 55 50 5 110
Disposals - (65) - (65)
At 30 September 2007 434 94 69 597

Net Book Amounts


At 30 September 2007 2,637 166 28 2,831

At 30 September 2006 2,692 130 18 2,840

Group
2007 2006
£’000 £’000
Plant and machinery held under finance leases are included in
fixed assets at a net book value of 20,410 11,599
Depreciation on these assets during the year amounted to 4,095 1,565
Plant and machinery secured under loans are included in
fixed assets at a net book value of 2,166 1,346
Depreciation on these assets during the year amounted to 26 189

Capital expenditure commitments at the end of the year were as follows:

The Company The Group


2007 2006 2007 2006
£’000 £’000 £’000 £’000
Contracted for but not provided in the accounts nil nil nil 957

25
Notes to the Accounts - Year Ended 30 September 2007

10 Investments
Company
Group Related
Companies Companies Total
£’000 £’000 £’000
Cost
At 30 September 2006 7,579 270 7,849
Additions 32 5 37
Disposals - (270) (270)
At 30 September 2007 7,611 5 7,616

Provisions
At 30 September 2006 3,199 148 3,347
Provided/(released) in year 95 (143) (48)
At 30 September 2007 3,294 5 3,299

Net book amounts


At 30 September 2007 4,317 - 4,317
At 30 September 2006 4,380 122 4,502

On 2 March 2007 the company acquired Cooper Clegg Limited and its wholly owned subsidiary company Evesham Binders Limited for nil
consideration.The net book value of this group at acquisition was £3,601,000. Fair value adjustments and those to achieve consistency of
accounting policies within the group were £1,661,000, and the fair value of the assets acquired was £5,262,000 resulting in negative
goodwill of £5,262,000 which is being written off over a period of 12 months.This has been accounted for as an acquisition.

Analysis of the acquisition of Cooper Clegg Limited & Evesham Binders Limited:

Net assets at date of acquisition Book Adjustments & Fair Value


Value Revaluations to Group
£’000 £’000 £’000
Tangible fixed assets 9,652 1,766 a 11,418
Investment 64 (64) b -
Stocks 1,352 (212) c 1,140
Debtors 4,746 - 4,746
Creditors due within one year (10,962) 20 d (10,942)
Creditors due after one year (815) - (815)
Deferred tax (436) 151 e (285)
Net assets 3,601 1,661 5,262
Goodwill arising on acquisition (5,262)

Adjustments:
a Increase in value of assets due to:
Impairment of assets £500,000; assets write off £34,000; and
adjustment to historic depreciation to align with group policy £2,299,000.
b Provision against investment in subsidiary company £64,000.
c Provision for loss making work in progress £35,000; and write off of spare parts £177,000.
d Accruals adjustments re redundancy costs.
e Deferred tax recalculation to take account of changes in tax rates & assumptions.

The Pindar Group - Annual Report 2007


Year Ended 30 September 2007 - Notes to the Accounts

10 Investments (continued)
Company

Cooper Clegg Limited and Evesham Binders Limited earned a profit after tax of £990,472 in the 18 month period from 1 April 2006
to 30 September 2007 (12 months to 31 March 2006: loss of £1,326,161).The summarised profit and loss account for the period from
1 April 2006 to the effective date of acquisition is as follows:

£’000
Cost
Turnover 21,634

Loss on ordinary activities before tax (2,715)


Exceptional items 4,898

Profit before tax 2,183


Taxation credit 151

Profit for the 11 months ended 28 February 2007 2,333

There were no recognised gains and losses in the 11 months ended 28 February 2007 other than the profit of £2,333,000 shown above.

On 31 August 2007 the company acquired Acorn eCommerce Limited for consideration of £32,000.The net book value of the company
at acquisition and the fair value of assets acquired was £nil.The resulting goodwill of £32,000 was written off at acquisition.This has been
accounted for as an acquisition. Acorn eCommerce Limited did not have a material effect on the group’s results for the year.

During the year a new subsidiary company G A Pindar & Son (New Zealand) Limited was set up in New Zealand and it acquired the
trade and assets of Egan Reid in New Zealand for a consideration of £375,000.The fair value of the net assets at acquisition was £60,000
resulting in goodwill of £315,000 which is being written off over a period of ten years. G A Pindar & Son (New Zealand) Limited did not
have a material effect on the group’s results for the year.

In October 2006 a new joint venture company called Pindar 1730 Limited was set up.This company is owned 50% by G A Pindar & Son
Limited and 50% by a third party. On 22 December 2006 Pindar 1730 Limited acquired the trade and assets of Barnard & Westwood
Limited for nil consideration. Pindar 1730 Limited subsequently changed its name to Barnard & Westwood Limited and continues to
trade.The fair value of the net liabilities acquired was £65,000 resulting in goodwill of £65,000, which is being written off over a period
of five years.

27
Notes to the Accounts - Year Ended 30 September 2007

10 Investments (continued)
Group

The latest unaudited accounts for the unlisted investment excluded from consolidation and treated in the accounts as a current
fixed asset investment show the following:
Proportion of Profit for Aggregate Amounts owed
shares held 9 months capital & to group
at 30.09.07 to 30.09.07 reserves companies
£’000 £’000 £’000
Dufil Ltd 35% (20) 89 nil
Barnard & Westwood Ltd 50% (56) (46) 319

The group is not in a position to exert significant influence over these companies due to other controlling shareholdings.

At 30 September the cost of the investment in Dufil Limited was £32,000 (2006: £32,000) against which a provision of £32,000 (2006:
£32,000) is held, giving a net book value of £nil; and the investment in Barnard & Westwood Limited was £5,000 (2006: £nil) against which
a provision of £5,000 (2006: £nil) is held, giving a net book value of £nil.

Group
Related Company
£’000
Cost
At 30 September 2006 302
Additions 5
Disposal (270)
At 30 September 2007 37

Provisions
At 30 September 2006 180
Released in year (143)
At 30 September 2007 37

Net book amounts


At 30 September 2007 -
At 30 September 2006 122

The Pindar Group - Annual Report 2007


Year Ended 30 September 2007 - Notes to the Accounts

10 Investments (continued)
Group

The company holds directly or indirectly more than 10% of the ordinary and other share capital of the following active companies:

Proportion of
shares held at
Description of 30 September Principal
Name of company shares held 2007 activity
Subsidiary companies
Pindar plc Ordinary shares of £1 each 100% Printing, binding, computerised
typesetting and film setting and
the production of database
facilities
Pindar Print Ltd Ordinary shares of £1 each 100% Investment holding company
Pindar Set Ltd Ordinary shares of £1 each 100% Directory computerised
typesetting and photo-setting
Pindar Set Inc (incorporated in USA) Common stock of $0.01 each 100% Directory computerised
typesetting and photo-setting
Pindar North America Inc Common stock of $0.01 each 100% Content management
(incorporated in USA)
AlphaGraphics Printshops Ordinary shares of £1 each 100% Printshops franchisor
of the Future (UK) Ltd
Pindar Ocean Racing plc Ordinary shares of 10p each 100% Public relations
Pindar Maritime Ltd Ordinary shares of £1 each 100% Corporate hospitality and
education
Screen Pages Limited Ordinary shares of £1 each 100% Web design services
Cooper Clegg Ltd Ordinary shares of £1 each 100% Printing and binding
Evesham Binders Ltd Ordinary shares of £1 each 100% Binding
Acorn eCommerce Ltd Ordinary shares of £1 each 100% Web design services
G A Pindar & Son (New Zealand) Ltd Ordinary shares of $1 each 100% Publishing
Sub-Subsidiaries
AlphaGraphics Limited Ordinary shares of £1 each 100% Printshop (now dormant)
AlphaGraphics Inc Common stock of $0.0001 each 85% Printshop franchisor
(incorporated in the USA)
AlphaGraphics Printshops do Common stock of $0.0001 each 85% Franchising company
Brasil Ltd (incorporated in Brazil)
Creative Media Group Common stock of $0.0001 each 85% Web design services
(incorporated in the USA)
Pindar Set BPO Services Ordinary shares of Rs10 each 100% Directory computerised
Private Ltd (incorporated in India) typesetting and photo-setting
Other
Dufil Ltd Ordinary shares of £1 each 35% Print and copy shop
Barnard & Westwood Ltd Ordinary shares of £1 each 50% Fine printer

All companies above have a year end of 30 September except for AlphaGraphics Inc, AlphaGraphics Printshops do Brasil Ltd, Creative
Media Group, and Dufil Ltd.These companies, except for Dufil Ltd, have a year end of 30 June, being the year end adopted prior to them
becoming subsidiary companies and to change to 30 September would make them out of step with their commercial business calendar
and result in unnecessary cost. Dufil Ltd has a 31 December year end and the majority shareholder wishes it to remain so.

29
Notes to the Accounts - Year Ended 30 September 2007

11 Stocks
2007 2006
£’000 £’000
Group
Raw materials and consumables 1,244 929
Work in progress 3,961 2,433
Finished goods 513 619
5,718 3,981

12 Debtors
The Company The Group
2007 2006 2007 2006
£’000 £’000 £’000 £’000
Trade debtors 144 42 20,353 14,162
Amounts owed by group companies 15,531 13,829 - -
Amounts owed by related undertakings 1,562 1,021 1,878 1,288
Other debtors 77 86 1,468 1,825
Group relief 177 382 - -
Overseas tax recoverable - - 98 -
Other taxes 1,629 478 1,631 483
Prepayments 292 114 4,285 1,754
Deferred tax (note 16) - - 520 280
19,412 15,952 30,233 19,792

Included in other debtors is an amount of £331,514 (2006: £718,416) of loan notes due from franchisees which fall due after more than
one year.

13 Creditors: Amounts falling due within one year


The Company The Group
2007 2006 2007 2006
£’000 £’000 £’000 £’000
Bank loans and overdrafts 16,879 12,477 28,305 4,155
Payments received on account - - 596 2,182
Trade creditors 154 193 11,751 9,677
Amounts owed to group companies 2,439 3,869 - -
Amounts owed to related undertakings - - 29 7
Finance lease instalments (note 14) 336 217 3,897 2,858
Other creditors 2,856 2,216 3,434 1,098
Corporation tax - - 114 270
Overseas tax - - 49 642
Other taxes and social security costs 43 59 1,320 1,197
Accruals and deferred income 913 607 6,695 6,171
23,620 19,638 56,190 28,257

The bank loans and overdrafts are secured by a floating charge over all the assets and undertakings of the group and by a fixed charge over
all the book debts now and from time to time due, owing or incurred to certain group companies and bear interest at normal commercial
rates.The bank loans are repayable by instalments.

The Pindar Group - Annual Report 2007


Year Ended 30 September 2007 - Notes to the Accounts

14 Obligations under finance leases and hire purchase contracts

The Company The Group


2007 2006 2007 2006
£’000 £’000 £’000 £’000
Amounts falling due within:
One year (note 13) 336 217 3,897 2,858
Two to five years (note 15) 753 116 7,430 4,586
1,089 333 11,327 7,444

The maturity of these amounts is as follows:


Amounts payable:
Within one year 406 233 4,494 3,207
After one but less than five years 846 119 8,279 4,897
1,252 352 12,773 8,104
Less: finance charges allocated to
future periods (163) (19) (1,446) (660)
1,089 333 11,327 7,444

15 Creditors: Amounts falling due after more than one year

The Company The Group


2007 2006 2007 2006
£’000 £’000 £’000 £’000
Finance lease instalments payable in (note 14):
1 to 2 years 255 112 2,843 2,308
2 to 5 years 498 4 4,587 2,278
753 116 7,430 4,586
Bank loan instalments falling due in:
1 to 2 years - 1,298 1,785 1,811
2 to 5 years - 1,405 588 2,149
over 5 years - - 1,557 1,903
- 2,703 3,930 5,863
Other amounts falling due in:
1 to 2 years - - 157 113
2 to 5 years - - 261 314
over 5 years - - 980 1,141
- - 1,398 1,568
Total 753 2,819 12,758 12,017

Interest is payable at commercial rates, other than a 20 year loan from the Salt Lake City Development Agency which is at a fixed rate of
3% pa.The balance of this loan at the year end was £1,304,514 (2006: £1,508,980).

31
Notes to the Accounts - Year Ended 30 September 2007

16 Provision for liabilities and charges


Group
Deferred Property Total
Tax Provisions Provisions
£’000 £’000 £’000
At 30 September 2006 2,499 564 3,063
Provided/(released) in the year 169 (57) 112
On acquisition of subsidiary company 255 - 255
Interest charged on discount unwinding - 28 28
Transfers out during the year (5) - (5)
At 30 September 2007 2,918 535 3,453

Property provisions: Provision is made on a discounted basis for the future rent expense and related costs of leasehold property (net of
estimated sub-lease income), when the property is not planned for use in the company’s on-going operations.The provision has been
discounted using an interest rate of 5.5% (2006 5.0%).

The deferred tax liability consists of: 2007 2006


£’000 £’000
Accelerated capital allowances 3,771 2,802
Other timing differences (88) (303)
Losses (765) -
2,918 2,499

£’000
The deferred tax asset (note 12)
At 30 September 2006 280
Transfers in during the year (5)
Provided in the year 268
Exchange differences (23)
At 30 September 2007 520

The deferred tax asset consists of:


2007 2006
£’000 £’000
Accelerated capital allowances 258 272
Other timing differences 262 8
520 280

In addition there is a deferred tax asset recognised on the FRS17 pension provision as set out in note 23.

The Pindar Group - Annual Report 2007


Year Ended 30 September 2007 - Notes to the Accounts

16 Provision for liabilities and charges (continued)


Group
2007 2006
£’000 £’000
At 1 October 5,296 5,309
Movement to the profit and loss account (375) 689
Movement within the statement of total recognised gains and losses (1,617) (702)
At 30 September 3,304 5,296

The group will benefit from the reduction in the main rate of corporation tax to 28% from 1 April 2008. Deferred tax is required
to be measured at the tax rates expected to apply in the periods in which the timing differences are expected to reverse, and
hence deferred tax has been provided at 28%

The group has historically made significant taxable profits each year. It is reasonable to forecast that future taxable profits will arise
against which the deferred tax asset can be recovered.

Company

Deferred tax liability


£’000
At 30 September 2006 344
Provided during the year (170)
At 30 September 2007 174

The deferred tax liability consists of:


2007 2006
£’000 £’000
Accelerated capital allowances 170 349
Other timing differences 4 (5)
174 344

17 Called up share capital


2007 2006
£’000 £’000
Authorised
Ordinary shares of £1 each 25 25

Allotted, Called Up and Fully Paid


Ordinary shares of £1 each 24 24

18 Reserves
Share Profit & Loss
Capital Account
£’000 £’000
Company
At 30 September 2006 24 511
Profit for the year - 1,794
Dividend paid - (309)
At 30 September 2007 24 1,996

A separate profit and loss account for the holding company has not been presented as permitted by s.230 Companies Act 1985.

33
Notes to the Accounts - Year Ended 30 September 2007

19 Reconciliation of movements in shareholders’ funds


Group
Ordinary Profit & Total
share Merger loss shareholders’
capital reserve account funds
£’000 £’000 £’000 £’000
As at 1 October 2005 24 43 4,324 4,391
Results for the year - - 1,641 1,641
Dividend paid - - (238) (238)
FRS17 pensions movement (net of deferred tax) - - 1,637 1,637
Exchange difference - - (141) (141)
At 30 September 2006 24 43 7,223 7,290

Result for the year - - 4,550 4,550


Dividend paid - - (309) (309)
FRS17 pensions movement (net of deferred tax) - - 3,046 3,046
Exchange difference - - (341) (341)
At 30 September 2007 24 43 14,169 14,236

20 Contingent liabilities

The company has joined with certain of its subsidiaries in an unlimited guarantee of any amounts due from them to the HSBC Bank plc. At
the year end net group indebtedness subject to these guarantees amounted to £15,580,084 (2006: £6,075,053).

21 Other financial commitments

At 30 September the group had annual commitments under non-cancellable operating leases as set out below:

2007 2006
£’000 £’000
Agreements on vehicles and equipment expiring:
Within one year 128 31
In two to five years 2 5
Over five years - 1
130 37
Agreements on premises expiring:
Within one year 20 20
In two to five years 502 311
After five years 1,505 545
2,027 876

22 Related party transactions

Certain directors of the company have an interest in Valleycrown Limited. Premises are rented from Valleycrown Limited by some of the
group companies, and during the year rent and service charges of £700,039 (2006: £752,562) was charged. Management fees of £65,456
(2006: £66,188) were charged by group companies.These charges are made under normal commercial terms.

At the year end Valleycrown Limited owed a total of £1,415,824 (2006: £1,232,043) to group companies and interest of £83,626 (2006:
£35,257) was charged in the year.

The Pindar Group - Annual Report 2007


Year Ended 30 September 2007 - Notes to the Accounts

22 Related party transactions (continued)

One of the directors of the company is a director and shareholder of Glendawn Limited, William Scott Print Limited and, Keywrap Limited.

Included within debtors is £20,582 (2006: £452) and creditors £nil (2006: £6,533), relating to balances with Glendawn Ltd. During the
year, transactions with Glendawn Ltd consisted of £94,704 (2006: £100,111) sales and £55,600 (2006: £33,306) purchases on normal
commercial terms.

Included within debtors is £6,784 (2006: £28,444) and creditors £nil (2006: £nil), relating to balances with William Scott Print Ltd. During
the year, transactions with William Scott Print Ltd consisted of £44,776 (2006: £69,940) sales and £nil (2006: £nil) purchases on normal
commercial terms.

During the year transactions with Keywrap Limited amounted to £71,228 (2006: £35,649) of sales, and £nil (2006: £nil) purchases.
Included within debtors is £15,433 (2006: £10,437) and in creditors £nil (2006: £nil), relating to balances with Keywrap Limited.

The group owns 35% (2006 35%) of the share capital of Dufil Limited. During the year transactions with Dufil Limited consisted of
£62,285 (2006: £54,600) in turnover, and £336 (2006: £3,458) of purchases, under normal commercial terms. At the year end there was
£5,091 (2006: £7,632) included within debtors and £nil (2006: £nil) included within creditors relating to balances with Dufil Limited.

The company owns 50% (2006 nil) of the share capital of Barnard & Westwood Limited.Transactions with Barnard & Westwood Limited
consisted of £26,491 (2006: £nil) in turnover, and £4,891 (2006: £nil) of purchases, under normal commercial terms. At the year end there
was £26,491 (2006: £nil) included within debtors and £nil (2006: £nil) included within creditors relating to balances with Barnard &
Westwood Limited.

The group has made loans to Barnard & Westwood Limited under normal commercial terms, at the year end the amount owed to group
companies was £290,975 (2006: £nil) and interest of £18,975 (2006: £nil) was charged on these loans.

During the year group companies made the following loans to directors:

In July 2004, AlphaGraphics Inc (a subsidiary company) advanced a loan of $1,373,680 to KK Cushing, a director of the company, to allow
him to acquire full ownership of Prospective Partners, Inc. (“PPI”) a US registered corporation through which two AlphaGraphics stores
are controlled.

The loan is to be repaid by monthly instalments of the greater of (i) $10,000 and (ii) the monthly free cash flow of PPI, with effect from
the first day of each month commencing October 2007 through to 1 December 2016 and one final payment on 31 December 2016 in
the amount of the entire remaining principal balance. At the year end the balance owed on this loan was $919,681 (2006: $1,243,680).

The loan is secured by a pledge agreement and interest is charged on the outstanding balance at any one time, at the one-year “LIBOR”
rate, plus 2.0% per annum.

During the year transactions with PPI consisted of sales of £46,975 (2006: £47,905) under normal commercial terms and at the year end
there was £2,997 (2006: £4,064) within debtors.

There is a further loan to the son of a director: On 14 June 2007 the group loaned Mr N Lumby, son of company director Mr R S Lumby
$213,000 (£104,000). Interest is charged on this loan at Pindar’s commercial rate of interest.The capital and interest is to be repaid within
one year. At 30 September 2007 the outstanding balance of $215,315 (£105,551) is included within amounts due from related parties.

35
Notes to the Accounts - Year Ended 30 September 2007

23 Pension costs

The Group operates a funded pension scheme. The scheme has both defined benefit and defined contribution sections. On 1 April 2006
the defined benefits section of the scheme ceased future accrual of benefits for active members.The defined benefits section of the
scheme now only has deferred and pensioner members.The assets of the scheme are held in a separate trustee administered fund.

Composition of the Scheme

A full actuarial valuation was carried out as at 1 June 2005 and has been updated to 30 September 2007.The main assumptions used for
the purposes of FRS17 are:

At 30 September 2007 2006 2005


Discount rate 6.0% 5.3% 5.1%
Salary increases n/a n/a 3.5%
Pension increases in payment (LPI) 3.1% 2.7% 2.75%
RPI 3.3% 2.9% 2.75%

The assets of the scheme and the long-term expected return on these assets were:

At 30 September 2007 2006 2005


Rate of Value Rate of Value Rate of Value
Return £’000 Return £’000 Return £’000
Equities 8.6% 39,059 8.0% 34,418 8.0% 30,251
Bonds 5.6% 5,517 4.9% 5,531 4.8% 12,726
Property 8.6% 1,946 8.0% 1,708 - -
Insurance Policies 5.7% 822 5.0% 871 4.9% 680
Cash 5.5% 5,961 4.5% 6,332 4.0% 47
Total Market Value of Assets 53,305 48,860 43,704

Service Cost

The current service cost for benefit accrual up to 31 March 2006 has been determined using the projected unit method as prescribed
under FRS17.

Contributions

Employer contributions totalling £1,215,000 were paid to the Scheme in respect of the defined benefit section during over the year from
1 October 2006.

The agreed employer contribution rate is £105,000 per month, increasing by 5% in June 2008 and each subsequent June.

This is subject to review at future formal actuarial valuations.

At 30 September 2007 2006


£’000 £’000
Total market value of assets 53,305 48,860
Actuarial liabilities (65,105) (66,514)
Surplus/(deficit) (11,800) (17,654)
Associated deferred tax 3,304 5,296
Net pensions liability (8,496) (12,358)

The Pindar Group - Annual Report 2007


Year Ended 30 September 2007 - Notes to the Accounts

23 Pension costs (continued)

Analysis of the amount charged to operating profit

At 30 September 2007 2006


£’000 £’000
Current service cost - 1,388
Curtailment costs - 2,141
- 3,529

Analysis of the amount credited to other finance income

At 30 September 2007 2006


£’000 £’000
Expected return 3,446 3,060
Interest on pension liabilities (3,470) (3,191)
Net return (24) (131)

Analysis of amount recognised in statement of total recognised gains and losses (STRGL)

At 30 September 2007 2006


£’000 £’000
Actual return in excess of expected 1,991 2,076
Experience gains and losses - (2,980)
Change in assumptions 2,752 3,243
Actuarial gain or loss in STRGL 4,663 2,339

Movement in surplus during year


2007 2006
£’000 £’000
Deficit at 1 October (17,654) (17,693)
Current service cost - (1,388)
Employer contributions 1,215 1,360
Curtailment costs - (2,141)
Other finance income (24) (131)
Actuarial gain or loss in STRGL 4,663 2,339
Deficit at 30 September (11,800) (17,654)

History of experience gains and losses


2006/07 2005/06 2004/05 2003/04
Difference between actual and expected return on assets
Amount (£’000) 1,911 2,076 5,077 3,158
% of scheme assets 3.6% 4.2% 11.6% 9.1%

Experience gains and losses on liabilities


Amount (£’000) - (2,980) 750 (924)
% of scheme liabilities - (4.5%) 1.2% (2.0%)

Total amount recognised in STRGL


Amount (£’000) 4,663 2,339 (5,358) 3,113
% of scheme liabilities 7.2% 3.5% (8.7%) 6.7%

37
Notes to the Accounts - Year Ended 30 September 2007

24 Reconciliation of operating profit to net cash inflow from operating activities


2007 2006
£’000 £’000
Operating profit 7,364 4,476
Depreciation, amortisation and impairment 4,936 7,628
Decrease in provision against investment (143) -
Profit on sale of tangible fixed assets (93) (490)
Increase in stocks (597) (545)
Increase in debtors (5,451) (518)
(Increase)/decrease in creditors (1,395) 2,633
(Decrease)/increase in property provision (57) 104
FRS17 pension charges (1,215) 2,169
Share of loss of associate 28 -
Loss on sale of operations - 71
Profit on disposal of investment (63) -
Exchange differences (219) 141
Net cash inflow from operating activities 3,095 15,669

25 Analysis of changes in net debt during the year

At 1 Oct Cash Other non At 30 Sept


2006 Flows cash changes 2007
£’000 £’000 £’000 £’000
Cash at bank & in hand 1,820 (624) 1,196
Overdrafts (3,939) (13,151) (17,090)
(13,775)
Debt due within one year (216) (10,999) (11,215)
Debt due after one year (7,431) 2,149 (5,282)
Finance leases (7,444) 3,436 (7,319) (11,327)
(5,414)
Total (17,210) (19,189) (7,319) (43,718)

Material non cash transactions

During the year the group entered into finance lease arrangements with a value at inception of £4,186,000 (2006: £1,690,533).
The acquisition of a new subsidiary company brought with it £3,133,000 (2006: £34,041) of finance lease debt.

26 Reconciliation of net cash flow to movement in net debt


2007 2006
£’000 £’000
(Decrease)/increase in net cash in year (13,775) 3,237
Cash outflow from changes in
debt and lease financing (5,414) 6,314
Other non-cash movements (7,319) (1,725)
Changes in net debt (26,508) 7,826

Net debt at 1 October (17,210) (25,036)


Net debt at 30 September (43,718) (17,210)

27 Post balance sheet events

On 5 December 2007, Pindar Set Limited acquired 100% of the share capital of Edinet Europa, S.A.U. a Spanish registered company for
£51,000.The company provides an ad design and pagination service to Yell Publicidad S.A. a wholly owned subsidiary of Yell Group plc.

The Pindar Group - Annual Report 2007


Year Ended 30 September 2007 - Auditor’s Report

Independent auditor’s report to the members of G A Pindar & Son Limited

We have audited the group and parent company financial statements (the “financial statements”) of G A Pindar & Son Limited for the year
ended 30 September 2007 which comprise the Group Profit and Loss Account, the Group and Company Balance Sheets, the Group Cash
Flow Statement, the Group Statement of Total Recognised Gains and Losses and the related notes 1 to 27.These financial statements have
been prepared under the accounting policies set out therein.

This report is made solely to the company’s members, as a body, in accordance with Section 235 of the Companies Act 1985. Our audit
work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an
auditors’ report and for no other purpose.To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors

The directors’ responsibilities for preparing the Annual Report and the financial statements in accordance with applicable United Kingdom law
and Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in the Statement of Directors’ Responsibilities.

Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International
Standards on Auditing (UK and Ireland).

We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance
with the Companies Act 1985. We also report to you whether in our opinion the information given in the directors’ report is consistent
with the financial statements.

In addition we report to you if, in our opinion, the company has not kept proper accounting records, if we have not received all the
information and explanations we require for our audit, or if information specified by law regarding directors’ remuneration and other
transactions is not disclosed.

We read other information contained in the Annual Report, and consider whether it is consistent with the audited financial statements.
This other information comprises only the directors’ report. We consider the implications for our report if we become aware of any
apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other
information.

Basis of audit opinion

We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An
audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an
assessment of the significant estimates and judgments made by the directors in the preparation of the financial statements, and of whether
the accounting policies are appropriate to the group’s and company’s circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to
provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether
caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of
information in the financial statements.

Opinion

In our opinion:
I the financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted Accounting Practice, of the
state of the group’s and the parent company’s affairs as at 30 September 2007 and of the group’s profit for the year then ended;
I the financial statements have been properly prepared in accordance with the Companies Act 1985; and
I the information given in the directors’ report is consistent with the financial statements.

Ernst & Young LLP


Registered auditor
Leeds

14 February 2008

39
www.pindar.com

For more information call 0800 169 2678 or email contactus@pindar.com


This product was digitally printed.