Debts.co.uk plc 
Carter Place 
Gisborne Close 
Staveley 
Chesterfield S43 3JT
0800 9 15 15 16
www.debts.co.uk
Debts.co.uk plc                       Annual Report & Accounts 2007
Annual Report & Accounts 2007 Contents
Highlights 01
Timeline 02
Chairman’s Statement 04
Chief Executive Officer’s Statement 06
Board of Directors 10
Directors’ Report 12
Report on Remuneration  15
Corporate Governance 17
Independent Auditors’ Report 20
Consolidated Income Statement 22
Consolidated Balance Sheet 23
Company Balance Sheet 24
Statement of Changes in Equity 25
Consolidated Cash Flow Statement 26
Notes to the Consolidated  
Financial Statements 27
Officers and Professional Advisers 44
Debts.co.uk plc is a leading provider 
of a range of solutions, including IVAs, 
protected trust deeds, debt management 
programmes, bankruptcy sequestrations 
and secured loans or second mortgages.
Better equipped 
Better advice
Better returns  
Annual Report 2007 Balance sheet up 77.3% to £9.4m (2006: £5.3m) 
following trading profi ts and fund raising 
completed on 25 May 2007
Growth in engaged clients to 6,492 (2006: 2,033):
IVAs 2,800 » (2006: 1,507)
Trust deeds 1,207 (2006: NIL) »
Debt management programmes 2,348 »
(2006: 1,876)
Corporate and bankruptcy 137 (2006: NIL) »
Acquisition of Adie Financial Solutions Limited 
provided entry into the Scottish trust deed market 
place which has been largely unaffected by the 
recent changes in the IVA market
Acquisition of Neville Eckley & Co broadens the 
range of services offered by the Group and 
provides additional capacity
Move to new 30,000 sq ft offi ces in Chesterfi eld was 
completed in December 2006
Signifi cant opportunities remain, aided the 
diffi culties in the IVA market place, to consolidate 
the providers of solutions to indebted individuals
Highlights
Revenues up
+90.2%
Revenues up 90.2% to £11.6m   
(Proforma 2006: £6.1m)
Gross profi t up 95.8% to £9.4m   
(Proforma 2006: £4.8m)
Reported pre-tax profi t up 61.9% to £3.4m  
(Proforma 2006: £2.1m)
Earnings per share up 51.2% to 13.05p   
(Proforma 2006: 8.63p)
2004 2005 2006 2007
2004 2005 2006 2007
Revenues (million)
Gross Pro t (million)
1.9
3.4
6.1
11.6
1.6
2.7
4.8
9.4
2004 2005 2006 2007
Pro t Before Tax (million)
0.8
1.3
2.1
3.4
01
Annual Report 2007
DB2190 – front AW08.indd   3 18/1/08   10:29:17 02
September
Borehamwood offi ces opened 
with 6,000 sq ft of offi ce space 
to accommodate the Group’s 
initial debt counselling and 
advisory service.
October
Acquired Neville Eckley & 
Co, a provider of services 
covering IVAs and bankruptcy, 
acquired for £360,000 cash 
and shares.
2007 has been a year of 
signiﬁ cant change for the 
Group with infrastructure and 
operational changes and the 
completion of 2 acquisitions.
Timeline
December
Chesterfi eld offi ces initially 
opened providing up 
to 30,000 sq ft of offi ce 
space allowing signifi cant 
capacity for growth.
Annual Report 2007
DB2190 – front AW08.indd   4 18/1/08   10:29:20 January
Major industry changes 
occur with calls by creditor 
groups for a move toward 
greater regulation within 
the debt advisory arena 
which are welcomed by 
Debts.co.uk plc and other 
industry leaders.
May
Aquired Adie Financial 
Solutions Limited, a leading 
provider of Scottish 
Protected Trust Deeds and 
sequestrations for £500,000 
and raised a further £1.6m 
for the initial purchase 
price and working capital.
July 
Work on debt resolution 
forum continues with 
consensus agreed on 
key issues.
DB2190 – front AW08.indd   5 18/1/08   10:29:26 Gross proﬁ t up
+95.8%
04
I am pleased to present the ﬁ rst full 
year’s set of results for Debts.co.uk 
plc as an AIM listed company for 
the year ended 31 July 2007. 
The Board previously set out its objectives 
regarding the IVA and debt solutions market 
place on its admission to the AIM market and 
continues to work towards these objectives.  The 
results for the year for the Group have been 
pleasing despite the publicised diffi culties across 
the whole of the industry.
As has been widely recorded, debt plays an 
ever-more important role in the UK’s economic 
landscape and the increased levels of borrowing is 
widely credited with sustaining the UK growth rate 
over recent years. However, against a background 
of the recent credit ‘squeeze’, fall in house prices 
and threat of recession in the US and potentially 
the UK, the availability of debt to individuals is 
widely expected to fall.
Chairman’s Statement
The availability 
of debt to 
individuals 
is widely 
expected to fall.
Bernard Asher
Chairman
Annual Report 2007
DB2190 – front AW08.indd   6 18/1/08   10:29:28 It is against this positive background that there 
has been an increasing level of competition in 
the market place since our Aim flotation in May 
2006, which has impacted on current trading 
performance and particular on the first half of 
2007/2008. This has been acutely felt in an increase 
in the cost of acquisition of IVA clients. However, we 
are now seeing a number of competitors ceasing 
their marketing activities where they have not 
reached a level of critical mass within their business 
models and as such there appears to be an easing 
of this situation which we believe will be felt in the 
second half of 2008.
A further factor which has affected the historic 
business model is the increase in creditor hostility 
to IVAs. The result of this has been a restriction on 
the number of debtors acceptable to lenders for 
an IVA which results in the debtor being declared 
bankrupt or entering into a debt management 
programme. This has again increased the cost of 
client acquisition as well as increasing processing 
costs due to necessary changes to our systems 
in order to take account of the variety of 
modifications requested by creditors. These have 
had a significant negative impact on the Group’s 
cash flows and future profitability.
Additionally, the recent consensus on fees charged 
by IVA providers involves a reduction in the level 
and timing of drawing fees which will impact 
both on the future profitability of the IVA business 
as well as the methodology previously adopted 
for accounting for Nominee fees (the initial costs) 
and supervisory fees (ongoing costs) as effectively 
there is now “one fee” for the entire case, the 
recoverability of which relies on whether the IVA 
continues for the full term of the arrangement.
Further, the expected increase in the level 
of second charge and mortgage broking 
commissions has been severely impacted by this 
summer’s sub-prime mortgage crisis in the US with a 
reduction in the number of panel lenders prepared 
to lend at reasonable rates falling from 8 to 2 in just 
a few weeks. 
On the other hand, the number of debt 
management programmes under management 
has increased considerably and continue to grow 
profitably and generally are an accepted solution 
by creditors.
The acquisition of Adie Financial Solutions Limited in 
June 2007 opened up further opportunities, giving 
the ability to provide a full range of debt solutions 
within Scotland. The Scottish market remains largely 
unaffected by the creditors situation in England & 
Wales and we are looking to increase our presence 
in this market place.
The Group continues to look for complementary 
opportunities to grow our client base through 
acquisition and believe that this will provide 
significant opportunities for value growth in  
the coming months and years as the industry 
further consolidates.
These changes in the IVA market and the 
associated ongoing industry wide negotiations 
with creditors are providing a shape for the future 
and the Group is adapting well to these changes, 
details of which have been set out in the Chief 
Executive Officer’s report.
Meanwhile, the Board continually looks to 
improve systems and controls to the optimum 
operational levels and where appropriate to 
ensure that the Group meets all current and future 
regulatory requirements.
Bernard Asher 
Chairman 
18 January 2008
05
Chairman’s Statement
continued
Annual Report 2007
DB2190 – front AW08.indd   7 18/1/08   10:29:29 Earnings per share up
+51.2%
Paul Carter
Chief Executive Offi cer
Chief Executive Offi cer’s Statement
06
I am pleased to report an 
excellent set of results for the year 
ended 31 July 2007 despite the 
publicised poor market conditions.
The board has 
worked hard to 
adapt our business 
model to meet the 
current challenges 
in the market and 
look to the future 
with a degree of 
cautious optimism.
DB2190 – front AW08.indd   8 18/1/08   10:29:30 Growth in financial Performance
The year is again a record year in all our key 
measures:
2007 2006 Change%
Revenues £11.6m £6.1m 90.2
Gross profit £9.4m £4.8m 95.8
Profit before tax £3.4m £2.1m 61.9
Significant Growth
The Group continues to deliver on all key 
performance indicators.  In particular, turnover and 
profits before tax have grown by 90.2% and 61.9% 
respectively over the 12 months to 31 July 2007.
The year started off with strong growth on the 
back of key marketing and sales activity. This 
led to good revenue growth and business 
development. The second half saw a change 
in the market conditions to which the Group 
responded with a slowdown in its marketing to 
preserve cash and profits whilst evaluating the 
potential outcomes and the optimum levels of 
marketing spend and operational resourcing.
The Group’s insolvency subsidiaries, Neville 
Eckley and Synergi Partners, which both deal 
primarily with IVAs, have both performed well. 
They saw good growth in this area in the early 
half of the year, slowing down to a steady state 
in the second half.  The quality of proposals 
continued to improve as has the number of 
acceptances and hence cases that continue 
into supervision.
The acquisition of Adie Financial Solutions 
Limited (‘AFS’), a provider of Trust Deeds and 
Sequestrations, which we announced on 25 May 
2007, has been successful and we expect this 
to continue.  The results to 31 July 2007 include 
trading from AFS for only 2 months. The Scottish 
market has been largely unaffected by all the 
issues that are currently being headlined within 
the rest of the United Kingdom and the Group’s 
fee levels remain steady and the percentage of 
acceptances of proposals high.
The Group’s debt management subsidiary, 
Debtcare, has had a good growth rate over the 
year and continues to be profitable.
Progress within Scarlet, the Group’s secured 
lending brokerage division, has been slow.  
Whilst performance has been steady, it has not 
achieved the same levels of growth as other 
areas of the business. With the recent well 
publicised difficulties in the sub-prime lending 
market and the expectation of house prices at 
best showing a small percentage increase in the 
next 12 months, the outlook for this business is one 
of slow growth.
Market Conditions
There has been a great deal of media coverage 
and speculation regarding the issues currently 
facing the IVA industry.
IVAs still have an important role to play. They are 
of fundamental importance to the UK banking 
industry and a key element of Government policy.  
It is expected that they will remain so for the 
foreseeable future. General economic conditions 
are such that levels of consumer indebtedness 
have hit record highs, long-term interest rates 
could yet increase further, levels of disposable 
incomes are at the lowest level as a proportion of 
overall income since 1997, new lending volumes 
are reducing and sub-prime lenders may have 
difficulties raising capital in the market place to 
lend in the future; such conditions inevitably lead 
to increased need for individuals to have to seek 
alternative methods to deal with debt issues.
Industry wide negotiations with creditors have 
been ongoing during most of the year with a 
consensus being reached on a number of areas. 
The area of fees has proved difficult to reach 
agreement on due in part to anti-competition 
laws preventing lenders and debt adviser firms 
coming together to agree a pricing structure.  
The most likely scenario concerning an outline 
fee structure appears to be one with fees based 
upon percentage of realisations coupled with an 
extended timescale over which fees will be paid.
This structure has had a negative impact on 
cash flows and we have seen evidence of this 
07
Chief Executive Officer’s Statement
continued
Annual Report 2007
DB2190 – front AW08.indd   9 18/1/08   10:29:31 Chief Executive Offi cer’s Statement
continued
08 Annual Report 2007
within our own business over the past 6 months 
as mentioned in the Group’s interim statement.  
Additionally, there may be a reduction in the 
level of profi tability earned on each case 
although this will be offset in part by the 
introduction of more effi cient processing.
The business strategy of the Group has always 
been to offer independent advice to over-
indebted individuals and to have a range of 
services available, including those available from 
third parties.
I expect highly professional and effi cient fi rms, 
such as ourselves, to continue to achieve 
profi table growth.
Growth in Resources
Over the year the Group has continued to 
develop its product offerings and the requisite 
infrastructure.  The aim is to improve the overall 
effi ciency and effectiveness of the Group to be 
able to offer a range of solutions, including IVAs 
and Trust Deeds, debt management programmes, 
bankruptcy and secured loans or second 
mortgages, to over-indebted individuals.
I was delighted that Alan Adie and his team 
at AFS were able to join the Group. This has 
enabled us to expand our operations into the 
Scottish market through Trust Deeds (the Scottish 
equivalent to IVAs).  We have taken further 
opportunity to expand operations within Scotland 
by taking on additional facilities in Glasgow.
Selective acquisitions form an important part of 
the overall development of the Group and we 
continue to seek suitable candidates which we 
hope will become part of the Group.
The Group has also fi nished investing heavily 
in improving the overall infrastructure of the 
business.  The Chesterfi eld operations of the 
business have moved into their new 30,000 sq ft 
purpose built offi ces.
I am pleased to welcome Richard Arden to the 
Board as Finance Director also was appointed 
on 18 September 2007.  Richard was previously 
an executive Director of Westfi eld Contributory 
Health Scheme Limited, a leading provider 
of health insurance to the public where his 
responsibilities included fi nance, compliance 
and information communication technologies. 
Richard’s other experience has been at South 
Yorkshire Investment Fund Limited and Coopers 
& Lybrand, latterly PricewaterhouseCoopers, 
where he qualifi ed as a Chartered Accountant.  
Richard brings with him a wealth of experience 
operating in a low cost processing environment 
with excellent customer service.
I am also pleased that we were able to retain 
the experience of Stuart Cumberland who has 
taken the responsibility as the Board Director for 
Strategic and Commercial development.
In light of the changes within the debt 
management industry, as outlined above, 
together with the increased facilities within 
Chesterfi eld, a recent review of the Group’s 
operational structure was undertaken with a view 
to rationalise the number of separate business 
units operated. The objective is to maximise 
effi ciency and enable effective communication 
and knowledge transfer throughout the various 
businesses in the Group. This plan has been 
fully implemented and provides a platform to 
withstand the current structural changes within 
the IVA market place and position the Group to 
benefi t fully from the expected future increase in 
the demand for the current services provided.
Marketing Strategies
The change in the market with respect to IVAs in 
the second half of the year resulted in a switch 
in the marketing strategy. The advertising spend 
across all media was increased signifi cantly 
from October 2006 to February 2007 and a large 
DB2190 – front AW08.indd   10 18/1/08   10:29:32 number of leads generated which have been 
converted into client business across the Group in 
the second half of 2007.  From March onwards our 
approach to marketing was more cautious, with 
less expenditure, but with a focus on making the 
most effi cient use of our spend whilst at the same 
time reducing the associated operating costs.  
The Group spend is monitored closely. The priority 
is to be cash fl ow positive and remain profi table 
despite these diffi cult conditions.
The business continues to generate a signifi cant 
proportion of leads through marketing activities.  
Advertising is generic refl ecting our wide range of 
products. The Group believes that it is important 
to maximise our ability through advertising to assist 
current and potential clients.
The Group continues to develop affi liation links 
with a select number of preferred partners.  In 
our view, this is an excellent way of providing a 
balanced approach to client acquisition.
Current Business Overview
Since the year end the Group has continued 
to make progress despite the diffi cult market 
conditions.  It has remained profi table but it would 
be rash to make any predictions for the outcome 
of the current year.  We are confi dent and believe 
that this Group has a profi table future ahead of it.
The challenges ahead continue to be those 
we have addressed already: to improve the 
effi ciency and profi tability of the Group’s 
operations. The Group has already begun a 
managed process of streamlining operations 
to continue to generate improved profi tability. 
A signifi cant and ongoing review of costs and 
effi ciencies, including a number of potential 
redundancies, has commenced.
The reduction in marketing that started in the 
second half of the year led to fewer IVA proposals 
in the early part of the new year.  More recently 
close monitoring of our marketing spend has 
enabled an increase in the number of IVA and 
Trust Deed proposals and cases entering into debt 
management.  There is also an increasing number 
of proposals being accepted.
Finally, the market continuously changes and 
one of the keys to long-term success is one’s 
willingness and ability to adapt to the changing 
circumstances. This is nothing new to the Group 
or its management. We have one of the most 
experienced teams in the industry. Market turmoil 
may cause pain for some but it also presents 
opportunities and we are well placed to take 
advantage of these.
Paul Carter
CEO
18 January 2008
The market continuously 
changes and one of the keys 
to long-term success is one’s 
willingness and ability to adapt 
to the changing circumstances.
Chief Executive Offi cer’s Statement
continued
managed process of streamlining operations 
to continue to generate improved profi tability. 
A signifi cant and ongoing review of costs and 
DB2190 – front AW08.indd   11 18/1/08   10:29:37 Board of Directors 
10
Pre-tax proﬁ t up
+61.9%
We have again strengthened the 
board and senior management 
to deal effectively with the 
challenges facing the Group.
Bernard Asher
Non-Executive 
Chairman
Paul Carter
Chief Executive Offi cer
Barry Krite 
Managing Director 
Richard Arden ACA
Finance Director
Stuart Cumberland ACA 
Director
Annual Report 2007
DB2190 – front AW08.indd   12 18/1/08   10:29:37 Board of Directors
continued
Bernard Asher
Bernard was an executive Director of HSBC 
Holdings from 1986 to 1998 and chairman of HSBC 
Investment Bank. In 1998 Bernard became non-
executive vice chairman of Legal & General Group 
plc, chairman of Lonrho Africa plc and is currently 
a non-executive Director of Morgan Sindall plc and 
China Shoto plc. He is also the chairman of Liontrust 
Asset Management Holdings plc, a UK based equity 
investment fund, and non-executive Director of 
Hansard Global Investments plc. 
Paul Carter
Paul has worked in the fi eld of insolvency for the 
whole of his career.
Until he set up Debtcare in 1998 he was involved 
in corporate insolvency as a self employed 
consultant, and later consulted on personal 
insolvency.  In the ten years since Paul set up 
Debtcare he has dedicated his time and effort 
into building a group of companies that has led to 
the formation of Debts.co.uk.
Barry Krite 
Barry has held several posts in management, 
marketing and IT.
As well as developing the marketing plan for Debt 
Counsellors, Barry also designed the automated 
database system that has helped the Group 
become more effi cient at data processing. He fi rst 
realised the opportunity for marketing IVAs on the 
internet in 1998 and was amongst the fi rst in the 
industry in using this form of marketing.
Together with Paul, Barry has been instrumental 
in forming and growing the several Group 
companies forming Debts.co.uk plc.
Richard Arden ACA 
Richard was previously an executive Director of 
Westfi eld Contributory Health Scheme Limited, 
a leading provider of health insurance. Richard 
qualifi ed as a Chartered Accountant with Coopers 
& Lybrand, latterly PricewaterhouseCoopers, 
following which he worked at the South Yorkshire 
Investment Fund Limited.
Stuart Cumberland ACA 
Stuart has extensive corporate fi nance and board 
level experience built up over 17 years with roles 
in Mazars and Ernst & Young and he subsequently 
founded the corporate fi nance department at 
Morley and Scott. Stuart is also the co-founder 
and a partner in Olivine Partners LLP, a specialist 
corporate fi nance and tax advisory practice 
based in London.
DB2190 – front AW08.indd   13 18/1/08   10:29:39 12
Annual Report 2007
The Directors present their report and the audited financial statements of the Group for the year ending 
31 July 2007.
Principal Activities
The principal activity of the Group during the year was the provision of a range of solutions including 
Individual Voluntary Arrangements, Scottish Trust Deeds, debt management programmes and secured 
loans or second mortgages, to over-indebted individuals. A more detailed review of the year and 
future developments are given in the Chief Executive’s Officer Statement.
Results and Dividends
The trading results for the year and the Group’s financial position at the end of the year are shown in 
the attached financial statements.
Revenue for the year to 31 July 2007 was £11.6m (2006: £6.1m) and the profit for the year before 
taxation was £3.4m (2006: £2.1m). 
The Directors do not recommend the payment of a final dividend in respect of the results for the year.
A full review of the business has been incorporated within the Chief Executive Officer’s Statement on 
pages 6 to 9.
Directors
The following Directors have held office during the year: 
Bernard Asher Non-Executive Chairman 
Paul Carter Chief Executive Officer 
Barry Krite  Managing Director
Richard Arden ACA Finance Director  (Appointed 18 September 2007)
Stuart Cumberland ACA Director
Robin Williams Non-Executive Director (Appointed 24 January 2007; 
  Resigned 31 July 2007)
Directors’ Interest in Shares
Directors’ interests in the share capital of the Company, including family and pension scheme interests 
were as follows:
Ordinary shares 
10p each
31 July 2007
Ordinary shares 
10p each
31 July 2006
Bernard Asher  – –
Paul Carter 5,011,238 5,011,238
Barry Krite 4,725,101 4,725,101
Richard Arden 3,746 –
Stuart Cumberland – –
Robin Williams – –
The were no interests of Directors in share options as at 31 July 2007. 
Directors’ Report
year ended 31 July 2007
DB2190 - back street boys AW09.indd   12 18/1/08   10:28:23 13
Annual Report 2007
On 10 October 2007, Richard Arden was granted 186,915 options to subscribe for ordinary shares of 10p 
each under the Company’s Enterprise Management Incentive (EMI) plan and are exercisable at 53.5p 
at any time after 2 years from grant with an expiry date of 10 years from grant.
Substantial Shareholdings
On 31 July 2007, the Company was notified that the following were interested in 3% or more of the 
issued share capital of the Company:
Ordinary shares 
10p each
% of issued 
share capital
Paul Carter
5,011,238 23.76%
Barry Krite 
4,725,101 22.40%
David Krite
2,004,671 9.50%
Colin Sefton
2,004,671 9.50%
Unicorn Asset Management Limited
1,369,444 6.49%
Octopus Asset management Nominees Limited
654,762 3.1%
Subsequent Events
Details of subsequent events are set out in note 22.
Financial Risk Management
The Group’s exposure to financial risk is set out in note 1 (T) to the accounts.
Policy on Payments to Suppliers
It is the policy of the Group in respect of all its suppliers, where reasonably practicable, to settle the 
terms of payment with those suppliers when agreeing the terms of each transaction, to ensure that 
those suppliers are made aware of the terms of payment, and to abide by these terms. Creditor days 
at the end of the year were 39 days (2006: 64 days).
Health, Safety and the Environment
Debts.co.uk plc operates responsibly with regard to its shareholders, employees, other stakeholders, the 
environment and the wider community. The Group and Company is committed to the wellbeing of all 
employees and ensure that their health, safety and general welfare is paramount at all times. We also 
maintain open and fair relationships with all clients and suppliers while ensuring that all transactions are 
operated on an arms-length, commercial basis.
Political and Charitable Contributions
No political or charitable donations were made during the year.
Directors’ Report
year ended 31 July 2007 continued
DB2190 - back street boys AW09.indd   13 18/1/08   10:28:23 14
Annual Report 2007
Statement of Directors Responsibilities
The Directors are responsible for preparing the Annual Report and the Financial Statements in 
accordance with applicable law and United Kingdom Generally Accepted Accounting Practice.
Company law requires the Directors to prepare fi nancial statements for each fi nancial year, which give a 
true and fair view of the state of affairs of the Group and of the profi t or loss of the Group for that year. 
In preparing those fi nancial statements the Directors are required to:
select suitable accounting policies and then apply them consistently; a. 
 make judgements and estimates that are reasonable and prudent; b. 
 state whether applicable accounting standards have been followed, subject to any material c. 
departures disclosed and explained in the fi nancial statements; and
 prepare the fi nancial statements on the going concern basis unless it is inappropriate to presume d. 
that the Group will continue in business.
The Directors are responsible for keeping proper accounting records which disclose with reasonable 
accuracy at any time the fi nancial position of the Group and to enable them to ensure that the 
fi nancial statements comply with the requirements of the Companies Act 1985 and Article 4 of the IAS 
regulation. 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.
The Directrors are responsible for ensuring that the Directors’ Report and other information included in 
the Annual Report is prepared in accordance with Company Law in the United Kingdom. They are also 
responsible for ensuring that the Annual Report includes information required by the AIM rules.
So far as the Directors are aware, there is no relevant audit information of which the Group’s auditors 
are unaware and we have taken all the steps that we ought to have taken as Directors in order to 
make ourselves aware of any relevant audit information and to establish that the Group’s auditors are 
aware of that information.
Financial statements are published on the company’s website in accordance with legislation in the 
United Kingdom governing the preparation and dissemination of fi nancial statements, which may 
vary from legislation in other jurisdictions. The maintenance and integrity of the Group’s website is the 
responsibility of the Directors. The Directors’ responsibility also extends to the ongoing integrity of the 
fi nancial statements contained therein.
Independent Auditor
The auditors, Shipleys LLP, will be proposed for reappointment at the Annual General Meeting in 
accordance with section 385 of the Companies Act 1985.
Signed by order of the Board
Richard Arden
Company Secretary
18 January 2008
Directors’ Report
year ended 31 July 2007 continued
Richard Arden Richard Arden
DB2190 - back street boys AW09.indd   14 18/1/08   10:28:24 15
Annual Report 2007
The role of the Remuneration Committee is to determine the overall remuneration policy of the Group 
and to agree the level and extent of remuneration paid to Executive Directors and senior management.
This report sets out the Company’s remuneration policy for Directors and details of the remuneration 
received by Directors during the year ended 31 July 2007. This report has been prepared on behalf of 
the Board by the Remuneration Committee and has been approved by the Board.
Terms of Reference
The Board has overall responsibility for determining the framework of executive remuneration. The 
principal areas of responsibility delegated to the Remuneration Committee include the determination 
of the remuneration paid to each Executive Director including salary, bonuses, incentive payments, 
share options/awards, pension rights, terms of employment and other compensation payments. 
Additionally, the committee considers all issues relating to executive remuneration generally and makes 
recommendations to the Board on the Group’s framework of remuneration for Executive Directors.
Composition and Meetings
The members of the Remuneration Committee considering matters in respect of 2007 were Bernard 
Asher (Chairman of the Committee) and Robin Williams since his appointment to the Board on  
24 January 2007 until his resignation on 31 July 2007. No member of the Remuneration Committee has 
any personal interest in the matters to be decided by the Remuneration Committee. During 2007, the 
Remuneration Committee met formally on 2 occasions. Details of each member’s attendance at the 
meetings are set out in the corporate governance report on page 17. In addition, the members of 
the Remuneration Committee also met on an informal basis on several occasions during the year. It is 
expected that the Remuneration Committee will meet formally at least once a year.
Remuneration Policy
The Company’s remuneration policy is designed to ensure that remuneration and incentive 
arrangements enable the company to recruit, motivate and retain high-calibre individuals capable of 
leading the Group successfully. To achieve this goal, remuneration for the Executive Directors and other 
senior managers must be competitive within the Group’s areas of expertise.
Components of Executive Director Remuneration
The Company has a total reward approach to remuneration comprising several components 
including a combination of base salary and benefits, including pension contributions. Additionally, 
the Company provides: 
Base Salary
Base salary levels for Executive Directors are reviewed annually by the Remuneration Committee taking 
into account individual responsibility, experience and performance as well as salary levels for similar 
positions in comparable companies, where such information is available. The Group’s policy is to set 
salaries in order to remain competitive within the highly specialised sectors in which it operates.
From the 1 July 2007, the remuneration of Paul Carter and Barry Krite were increased to £255,000 
and £250,000 respectively. These salary increases are their first since the AIM flotation and reflect 
the significant increases in individual responsibilities arising from their board appointments and their 
respective appointments as CEO and Managing Director.
Report on Remuneration
year ended 31 July 2007
DB2190 - back street boys AW09.indd   15 18/1/08   10:28:24 16
Annual Report 2007
Benefits and Pensions
Benefits are provided to Executive Directors in line with normal market practice. Benefits include car 
allowances of up to £12,000 per annum, car insurance, provision of mobile phones and the cost of a 
home phone line used for business purposes and private health insurance.
The Directors are also entitled to a pension contribution of up to 7% to the Directors personal  
pension arrangements.
Options
Options have been granted to Directors and employees. The Remuneration Committee believes the 
use of option awards is necessary to meet the Group’s strategic objective of attracting and retaining 
the best people in the industry, and to incentivise the Executive Directors and senior team leaders to 
maintain the Groups continued Growth. 
On 10 October 2007, Richard Arden was granted 186,915 options to subscribe for ordinary shares of 10p 
each under the Company’s Enterprise Management Incentive (EMI) plan and are exercisable at 53.5p 
at any time after 2 years from grant with an expiry date of 10 years from grant.
Non-executive Directors
The remuneration of the independent non-executive Directors is established by the Board, on advice 
from the Chairman. Non-executive Directors do not participate in the incentive plans of the Group.
Summary of Directors’ Remuneration
2007 
Basic Annual 
Salary 
£
2007
 Benefits 
£
2007 
Payment in 
lieu of holiday
£
2007
 Total 
£
2006 
Total 
£
Executive
Paul Carter 170,833 23,096 11,923 205,852 31,453
Barry Krite 165,000 28,420 – 193,420 30,511
Richard Arden – – – – –
Stuart Cumberland* – – – – –
Non-executive
Bernard Asher 33,807 – – 33,807 –
Robin Williams 13,171 – – 13,171 –
382,811 51,516 11,923 446,250 61,964
* The Directors’ remuneration of Stuart Cumberland for the year was £94,200 (2006: £11,000) which was 
paid to Olivine Partners LLP of which Mr Cumberland is a designated member.
Report on Remuneration
year ended 31 July 2007 continued
DB2190 - back street boys AW09.indd   16 18/1/08   10:28:25 17
Annual Report 2007
Corporate governance describes the operating structure put in place by a company in order to 
promote an environment in which its business objectives can be realised with due probity and on a 
sustainable basis. A key element of good corporate governance is to establish and maintain effective 
systems of internal management, strategy and control. Accordingly, promoting an effective system of 
corporate governance forms a central component of the Board’s strategic planning.
The requirements of the combined code of principles of corporate governance set out in the listing 
rules of the Financial Services Authority are not mandatory for companies traded on AIM. However, the 
Directors are committed to complying with best practice in this area, and have adopted its principles 
where they have been considered appropriate.
Board of Directors and Board Committees
The Board of Directors, which consists of four executive and one non-executive Directors, is responsible 
for the Group’s system of corporate governance. The role of the non-executive Director is to bring 
independent judgement to Board discussions and decisions.
The Board meets regularly throughout the year. It has a schedule of matters referred to it for decision, 
which includes Group strategy and future developments, allocation of financial resources, investments, 
annual and interim results, and risk management.
The Group has three Board committees, which operate within defined terms of reference.
Audit Committee
The Audit Committee, comprising Bernard Asher (Chairman) is responsible for reviewing the full and half 
year results. In addition, the Audit Committee monitors the framework of internal control.
Remuneration Committee
The Remuneration Committee, comprising Bernard Asher (Chairman) reviews the remuneration of the 
Executive Directors and any senior executive of the Group and considers the grant of options and 
payment of performance related bonuses.
Nomination Committee
The Nomination Committee, comprising Bernard Asher (Chairman) reviews the nomination of the 
Executive Directors and any new senior executive of the Group.
Board Meetings
The Board holds regular meetings throughout the year and 6 formal meetings took place during 2007 
(2006: 4). Further meetings of the Board, in person or by telephone, were held on an ad hoc basis as 
and when required.
Attendance during 2007 at formal meetings of the Board and of the Audit, Nominations and 
Remunerations Committees were as follows:
Board
Audit 
Committee
Remuneration 
Committee
Meetings 6 2 1
B. Asher 6 2 1
P. Carter 6 – –
B. Krite 6 – –
R. Arden – – –
S. Cumberland 6 – –
R. Williams 2 2 1
Corporate Governance
for the year ended 31 July 2007
DB2190 - back street boys AW09.indd   17 18/1/08   10:28:25 18
Annual Report 2007
Directors’ Appointment
Directors are initially appointed by the Board upon recommendation of the Nominations Committee and, in 
accordance with the Company’s Bye-laws, seek re-election at the next AGM following their appointment.
Thereafter, in accordance with the Bye-laws, one-third of the Directors retires by rotation and seeks 
re-appointment at each AGM. The Nominations Committee has reviewed those individuals who will 
seek re-election at the 2007 AGM and has concluded that, in light of the relevant experience and skills 
which each brings to the Board, its Committees and the Group as a whole, each of those Directors 
should be put forward for re-election. Further details of the Nominations Committee are given above.
Directors’ and Officers’ Liability Insurance and Professional Advice
The Company ensures that appropriate insurance cover is maintained in respect of leal action against its 
Directors. A procedure also exists to allow Directors, in appropriate circumstances, to take independent 
professional advice in respect of their duties, with fees incurred being paid by the Company.
Internal Control
The Directors are responsible for ensuring that the group maintains a system of internal control to 
provide them with reasonable assurance regarding the reliability of financial information used within 
the business and for publication and that assets are safeguarded. There are inherent limitations in any 
system of internal financial control. On the basis that such a system can only provide reasonable but 
not absolute assurance against material misstatement or loss and that it relates only to the needs of 
the business at the time, the system as a whole was found by the Directors at the time of approving the 
accounts to be generally appropriate to the size of the business.
Shareholder Communication
The Group seeks to ensure that all shareholders are kept informed about the Group and its activities. A 
comprehensive annual report and accounts is sent to shareholders and an interim report is published.
The Annual General Meeting is a forum for shareholders’ participation with the opportunity to meet 
and question Board members including the non-executive members and the Chairmen of the 
Board committees.
Additionally, the Group operates an investors section on its website to provide further details of the 
Group’s activities.
Going Concern
After reviewing budgets and forecasts, the Directors have a reasonable expectation that the Group 
and Company has adequate resources to continue as an operational business for the foreseeable 
future. The financial statements have therefore been prepared on a going concern basis.
Corporate Governance
for the year ended 31 July 2007 continued
DB2190 - back street boys AW09.indd   18 18/1/08   10:28:26 19
Annual Report 2007
Corporate Governance
for the year ended 31 July 2007 continued
Employment Policy
The Board places considerable value on the involvement of its employees and has effective 
arrangements for communicating the Group’s results and significant business issues to them.
The Directors recognise that continued and sustained improvement of the Group depends on its ability 
to attract, motivate and retain employees of the highest calibre. Furthermore the Directors believe that 
the Group’s ability to sustain the competitive advantage in the long term depends on ensuring that 
all employees contribute to the maximum of their potential. The Group is committed to improving the 
performance of all its employees through appropriate development and training.
Share ownership is at the heart of the Group’s remuneration philosophy and the Directors believe that 
the key to the Group’s future success lies in a motivated workforce holding a stake in the Group. For this 
reason the Board has implemented an Enterprise Management Incentive share option scheme which is 
available to all Group employees subject to meeting certain qualifying rules.
The Group is an equal opportunity employer. Entry into and progression within the Group is solely 
determined on the basis of work criteria and individual merit.
The Group gives full and fair consideration to applications for employment made by disabled persons, 
having regard to their respective aptitudes and abilities. The policy includes, where practicable, 
the continued employment of those who may become disabled during their employment and the 
provision of training and career development and promotion, where appropriate.
Corporate Responsibility
Debts.co.uk plc operates responsibly with regard to its shareholders, employees, other stakeholders, the 
environment and the wider community. The Group is committed to the wellbeing of all employees and 
ensures that their health, safety and general welfare is paramount at all times. We also maintain open 
and fair relationships with all clients and suppliers while ensuring that all transactions are operated on 
an arms-length, commercial basis. As part of this culture, the Group ensures that all suppliers are paid in 
a timely fashion, unless there are sound commercial reasons why payment should not be made.
Auditors’ Independence
The Audit Committee has reviewed the Group’s relationships with its auditors, Shipleys LLP, and has 
concluded that there are sufficient controls in place to ensure the desired level of independence. 
DB2190 - back street boys AW09.indd   19 18/1/08   10:28:26 20
Annual Report 2007
We have audited the Group and parent Company financial statements (the “financial statement”) 
of Debts.co.uk plc for the year ended 31 July 2007, which comprise the Consolidated Income 
Statement, the Statement of Changes in Equity, the Balance Sheets, the Consolidated Cash 
Flow Statement, and the related notes. The 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 law and International Financial Reporting Standards (IFRSs) as adopted 
for use in the European Union 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 and whether, in addition, the Group 
financial statements have been properly prepared in accordance with Article 4 of the IAS regulation. 
We also report to you whether, in our opinion, the information given in the Directors’ Report is not 
consistent with the financial statements. The information given in the Directors’ Report includes that 
specific information presented in the Chief Executive Officer’s Statement that is cross referred from the 
Business Review section of the Directors’ Report.
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. The other information comprises only the Chairman’s Statement, 
Chief Executive Officer’s Statement, Directors’ Report, Corporate Governance Statement, and the 
Report of the Remuneration Committee. 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 judgements made by the Directors in the preparation of the financial 
statements, and of whether the accounting policies are appropriate to the Groups, and Company’s 
circumstances, consistently applied and adequately disclosed.
Independent Auditors’ Report
to the members of Debts.co.uk plc
DB2190 - back street boys AW09.indd   20 18/1/08   10:28:26 21
Annual Report 2007
We planned and performed our audit so as to obtain all the information and explanations which we 
considered necessary in order to provide us with sufficient evidence to give reasonable assurance 
that the financial statements are free from material misstatement, whether caused by fraud or other 
irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation 
of information in the financial statements.
Opinion
In our opinion:
 the Group financial statements give a true and fair view, in accordance with IFRSs as adopted by • 
the European Union, of the state of the Group’s affairs as at 31 July 2007 and of its profit for the year 
then ended;
the parent company financial statements give a true and fair view, in accordance with IFRSs as • 
adopted by the European Union as applied in accordance with the provisions of the companies 
Act 1985, of the state of the parent company’s affairs as at 31 July 2007;
the financial statements have been properly prepared in accordance with the Companies Act 1985 • 
and, as regards the Group financial statements, Article 4 of the IAS Regulation; and
the information contained in the Directors’ Report is consistent with the financial statements. • 
Shipleys LLP  
Chartered Accountants  
Registered Auditors 
18 January 2008
 
Independent Auditors’ Report
to the members of Debts.co.uk plc continued
10 Orange Street 
Haymarket 
London WC2H 7DQ
DB2190 - back street boys AW09.indd   21 18/1/08   10:28:27 22
Annual Report 2007
Note
Group Group Pro forma Group
Year ended 
31 July 2007
£’000
Period ended
31 July 2006
£,000
Year ended
31 July 2006
£,000 
Revenue 1 11,598 1,593 6,105
Direct costs (2,163) (314) (1,346)
Gross profit 9,435 1,279 4,759
Operating costs 2 (5,993) (737) (2,673)
Operating profits 3,442 542 2,086
Net finance income/(cost) 5 (22) 21 17
Profit before taxation 3,420 563 2,103
Income tax expense 6 (846) (165) (640)
Profit for the year attributable to equity 
holders of the parent 2,574 398 1,463
Earnings per share
Basic earnings per ordinary share 14 13.05p 2.35p 8.63p
Diluted earnings per ordinary share 14 13.04p 2.34p 8.59p
There were no other gains and losses other than those recognised in the income statement. All activities 
relate to continuing operations.
On 5 May 2006, the Group carried out a corporate restructuring including the introduction of a new 
holding company. The profit and loss account has been prepared using merger accounting and is 
presented on a pro forma basis as if the new holding company has been in existence throughout both 
the current and prior years. 
Additionally, a consolidated profit and loss account from the date of incorporation of the new holding 
company is also given as a  comparative above.
   
 
The pages 27 to 43 form part of the Annual Report. 
Consolidated Income Statement
for the year ended 31 July 2007
DB2190 - back street boys AW09.indd   22 18/1/08   10:28:28 23
Annual Report 2007
Group Group
Note
As at
31 July 2007
£,000
As at
31 July 2006
£,000
Assets
Non-current assets
Goodwill 7 1,008 –
Property, plant and equipment 9 519 110
1,527 110
Current assets
Trade and other receivables 10 10,681 3,195
Cash and short-term deposits 11 1,219 3,988
11,900 7,183
Total assets 13,427 7,293
Equity and liabilities
Equity attributable to equity holders of the parent
Share capital 13 2,109 1,944
Share premium 16 5,527 4,033
Merger reserve 17 (1,513) (1,513)
Retained earnings 18 3,316 814
9,439 5,278
Current liabilities
Trade and other payables 19 1,974 884
Corporate income tax payable 1,828 959
3,802 1,843
Liabilities due after one year 20 186 172
Total liabilities 3,988 2,015
Total equity and liabilities 13,427 7,293
    
The fi nancial statements on pages 22 to 43 were approved by the Board of Directors and authorised for 
issue on 18 January 2008 and are signed on its behalf by 
Paul Carter Barry Krite
Director Director
The pages 27 to 43 form part of the Annual Report.
Consolidated Balance Sheet
as at 31 July 2007
DB2190 - back street boys AW09.indd   23 18/1/08   10:28:29 24
Annual Report 2007
Company Balance Sheet
as at 31 July 2007
Company Company
Note
As at
31 July 2007
£,000
As at
31 July 2006
£,000
Assets
Non-current assets
Investment 7 2,100 1,513
Property, plant and equipment 9 238 –
2,338 1,513
Current assets
Trade and other receivables 10 6,061 1,205
Cash and short-term deposits 11 70 3,547
6,131 4,752
Total assets 8,469 6,265
Equity and liabilities
Equity attributable to equity holders of the parent
Share capital 13 2,109 1,944
Share premium 16 5,527 4,033
Merger reserve 17 – –
Retained earnings 18 91 2
7,727 5,979
Current liabilities
Trade and other payables 19 606 286
Corporate income tax payable 38 –
644 286
Liabilities due after one year 20 98 –
Total liabilities 741 286
Total equity and liabilities 8,469 6,265
    
The fi nancial statements on pages 22 to 43 were approved by the Board of Directors and authorised for 
issue on 18 January 2008 and are signed on its behalf by 
Paul Carter Barry Krite
Director Director
The pages 27 to 43 form part of the Annual Report.
DB2190 - back street boys AW09.indd   24 18/1/08   10:28:30 25
Annual Report 2007
Statement of Changes in Equity
for the year ended 31 July 2007
Pro forma Group 
Share 
Capital
£,000
Share 
Premium
£,000
Merger 
Reserve
£,000
Retained 
Earnings
£,000
Total
£,000
Changes in equity for the year to 31 July 2006
Profit for the year 398 398
Total recognised income and expense for the year 398 398
Reorganisation 1,513 (1,513) 570 570
Bonus issue on 16 May 2006 154 (154) –
Issue of share capital 277 4,723 5,000
Issue costs (690) (690)
Balance as at 31 July 2006 1,944 4,033 (1,513) 814 5,278
Group
Changes in equity for the year to 31 July 2007
Profit for the year 2,574 2,574
Total recognised income and expense for the year 2,574 2,574
Issue of share capital 165 1,566 1,731
Issue costs (72) (72)
Adjustment to reserves (72) (72)
Balance as at 31 July 2007 2,109 5,527 (1,513) 3,316 9,439
Company
Changes in equity for the period to 31 July 2006
Profit for the year 156 156
Total recognised income and expense for the year 156 156
Reorganisation 1,513 – – – 1,513
Bonus issue on 16 May 2006 154 – – (154) –
Issue of share capital on 24 May 2006 277 4,723 5,000
Issue costs – (690) (690)
Balance as at 31 July 2006 1,944 4,033 2 5,979
Company
Changes in equity for the period to 31 July 2007
Profit for the year 89 89
Total recognised income and expense for the year
Issue of share capital 165 1,566 1,731
Issue costs (72) (72)
Balance as at 31 July 2007 2,109 5,527 91 7,727
DB2190 - back street boys AW09.indd   25 18/1/08   10:28:30 Annual Report 2007
26
Consolidated Cash Flow Statement
for the year ended 31 July 2007
Group Pro forma Group
Year ended 
31 July 2007 
£,000
Year ended 
31 July 2006 
£,000
Cash flows from operating activities
Profit from operations 3,442 2,086
Depreciation of property, plant and equipment 386 39
Profit on disposal of property, plant and equipment (241) –
Other non-cash movement 72 –
Operating cash flows before movement in working capital 3,659 2,125
Increase in receivables (6,676) (1,952)
(Decrease)/Increase in payables (2) 447
Cash generated from operations (3,019) 620
Income taxes paid – (220)
Net cash (used in)/from operating activities (3,019) 400
Cash flows from investing activities
Net interest (paid)/received (8) 1
Acquisition of Neville Eckley & Co. (including costs of £102,000) (402) –
Acquisition of Adie Financial Solutions Limited (including costs of £87,000) 
net of cash acquired of £195,000 (292) –
Acquisition of property, plant and equipment (1,173) (65)
Disposal of property, plant and equipment 653 3
Net cash used in investment activities (1,222) (61)
Cash flows from financing activities
Net (decrease)/increase in borrowings (65) 246
Proceeds on issues of shares 1,631 5,000
Cost of share issue (72) (690)
Cost of reorganisation – (94)
Dividends paid – (967)
Net cash from financing activities 1,494 3,495
Net (decrease)/increase in cash and cash equivalents (2,747) 3,834
Cash and cash equivalents at 1 August 3,966 132
Cash and cash equivalents at 31 July 1,219 3,966
DB2190 - back street boys AW09.indd   26 18/1/08   10:28:31 Notes to the Consolidated Financial Statements
for the year ended 31 July 2007 continued
27
Annual Report 2007
A) Significant Accounting Policies 
Debts.co.uk plc (the Company) is a company domiciled in the United Kingdom. The consolidated 
financial statements of the Company for the year ended 31 July 2007 comprise the Company and 
its subsidiaries (together referred to as the Group).
B) Statement of Compliance
The consolidated financial statements of Debts.co.uk plc have been prepared in accordance with 
International Financial Reporting Standards incorporating International Accounting Standards as 
issued by the International Accounting Standards Board (IFRS) and with those parts of the Companies 
Act, 1985 applicable to companies reporting under IFRS. The disclosure required by IFRS1 (First Time 
Adoption of International Financial Reporting) concerning the transition from applicable accounting 
standards in the United Kingdom (UK GAAP) to IFRS are shown where relevant.
C) Basis of Preparation
The financial reports have been prepared under the historical cost convention.
Non-current assets are stated at the lower of carrying amount and fair value less costs to sell.
The preparation of financial statements in conformity with generally accepted accounting principles 
requires the use of estimates and assumptions that affect the reported amounts of assets and 
liabilities at the date of the financial statements and the reported amounts of revenues and expenses 
during the reporting year. Although these estimates are based on management’s best knowledge of 
the amount, event or actions, actual results ultimately may differ from those estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to 
accounting estimates are recognised in the year in which the estimate is revised if the revision 
affects only that year, or in a year of the revision and future years if the revision affects both current 
and future years.
Judgements made by management in the application of IFRSs that have a significant effect on the 
financial statements and estimates with a significant risk of material adjustment in the next year are 
discussed where appropriate.
The accounting policies have been applied consistently by Group entities.
D) Basis of Consolidation
i. Reorganisation
On 5 May 2006, the Group carried out a corporate restructuring including the introduction of a 
new holding company which acquired the entire share capital of the subsidiary undertakings 
through the allotment of 1,512,931 ordinary shares of the Company pursuant to a share purchase 
agreement dated 3 March 2006.
The above transaction has been accounted for as a Group reconstruction under merger 
accounting principles. The results and cash flows of the relevant entities are combined from the 
beginning of the year in which the merger occurred and their assets and liabilities combined at the 
amounts at which they were previously recorded.
DB2190 - back street boys AW09.indd   27 18/1/08   10:28:31 Notes to the Consolidated Financial Statements
for the year ended 31 July 2007 continued
Annual Report 2007
28
D) Basis of Consolidation continued
In accordance with merger accounting principles, the comparatives are presented as if the 
companies in the Debts.co.uk plc Group had been owned and controlled by the Company 
throughout the year ended 31 July 2006.
Additionally, a consolidated profit and loss account from the date of incorporation of the new 
holding company is also given above.
ii. Subsidiaries
Subsidiaries are entities controlled by the Company. Control exists when a Company has the power, 
directly or indirectly, to govern the financial and operational policies of an entity so as to obtain 
benefits from its activities. In assessing control, potential voting rights that presently are exercisable 
or convertible are taken into account. The financial statements of subsidiaries are included in 
the consolidated financial statements from the date that control commences until the date that 
control ceases.
iii. Transactions Eliminated on Consolidation
Intragroup balances and any unrealised gains and losses or income and expenses arising from 
intragroup transactions, are eliminated in preparing the consolidated financial statements. 
Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that 
there is no evidence of impairment.
E) Foreign Currencies
Transactions in foreign currencies are initially recorded at the rates of exchange prevailing on 
the dates of the transactions. Monetary assets and liabilities denominated in such currencies 
are retranslated at the rates prevailing on the balance sheet date. Profits and losses arising on 
exchange are included in the net profit or loss for the year.
F) Property, Plant and Equipment
i. Owned Assets 
Items of property, plant and equipment are stated at cost as deemed cost less accumulated 
depreciation (see below) and impairment losses (see accounting policy K). 
ii. Leased Assets
Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are 
classified as finance leases.
iii. Depreciation
Depreciation is charged to the income statement over the estimated useful lives of each part of an 
item of property, plant and equipment. The estimated useful lives are as follows:
Buildings 50 years 
Leaseholds Over the term of the lease or life of the asset, if shorter 
Fixtures and fittings 25% on a reducing balance basis 
Motor vehicles 25% on a reducing balance basis 
Computer equipment  33% on a straight line basis
The residual value, if not significant, is reassessed annually.
DB2190 - back street boys AW09.indd   28 18/1/08   10:28:32 Notes to the Consolidated Financial Statements
for the year ended 31 July 2007 continued
29
Annual Report 2007
G) Intangible Assets
i. Goodwill
All business combinations are accounted for by applying the purchase method. Goodwill represents 
the amount arising on acquisition of subsidiaries. In respect of business acquisitions, goodwill 
represents the difference between the cost of the acquisition and the fair value of the net identifiable 
assets acquired.
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-
generating units and is no longer amortised but is tested annually for impairment (see accounting 
policy K).
Negative goodwill arising on acquisition is recognised directly in the income statement.
H) Investments
i. Investments in Debt and Equity Securities
The Group classifies its investments depending on the purpose for which the investments were 
acquired. The Directors determine the classification of its investment at initial recognition and re-
evaluates this designation at every reporting date.
The fair value of unquoted investments is based on valuation techniques. The Group assess at 
each balance sheet date whether there is objective evidence that a financial asset or a group of 
financial assets is impaired.
I) Trade and Other Receivables
Trade and other receivables are started at their cost less impairment losses (see accounting  
policy K).
J) Cash and Cash Equivalents
Cash and cash equivalents comprises cash balances and call deposits. Bank overdrafts that are 
repayable on demand and form an integral part of the Group’s cash management are included 
as a component of cash and cash equivalents for the purpose of the statement of cash flows.
K) Impairment
The carrying amounts of the Group’s assets, other than deferred tax assets (see accounting  
policy S), are reviewed at each balance sheet date to determine whether there is any indication of 
impairment. If any such indication exists, the asset’s recoverable amount is estimated.
For goodwill, assets have an indefinite useful life and intangible assets that are not yet available for 
use, the recoverable amount is estimated at each balance sheet date.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating 
unit exceeds its recoverable amount. Impairment losses are recognised in the income statement.
Impairment losses recognised in respect of cash-generating units are allocated first to reduce the 
carrying amount of any goodwill allocated to cash-generating units (group of units) and then, to 
reduce the carrying amount of other assets in the unit (group of units) on a pro rata basis.
DB2190 - back street boys AW09.indd   29 18/1/08   10:28:32 Notes to the Consolidated Financial Statements
for the year ended 31 July 2007 continued
Annual Report 2007
30
K) Impairment continued
The recoverable amount of the Group’s receivables carried at amortised cost is calculated as the 
present value of the estimated future cash flows, discounted at the original effective interest rate. 
Receivables with a short duration are not discounted.
The recoverable amount of other assets is the greater of their net selling price and the value in use. 
In assessing value in use, the estimated future cash flows are discounted to their present value using 
a pre-tax discount rate that reflects current market assessments of the time value of money and the 
risks specific to the asset. For an asset that does not generate largely independent cash inflows, the 
recoverable amount is determined for the cash-generating unit to which the asset belongs.
An impairment loss in respect of a receivable carried at amortised cost is reversed if the subsequent 
increase in recoverable amount can be related objectively to an event occurring after the 
impairment loss was recognised.
An impairment loss in respect of goodwill is not reversed.
In respect of other assets, an impairment loss is reversed if there has been a change in the estimates 
used to determine the recoverable amount.
An impairment loss is only reversed to the extent that the asset’s carrying amount does not exceed 
the carrying amount that would have been determined, net of depreciation or amortisation, if no 
impairment loss as been recognised.
L) Share Capital
Dividends on ordinary share capital are recognised as a liability in the year in which they are paid.
M) Interest-bearing Borrowings
Interest-bearing borrowings are recognised initially at fair value, net of transaction costs incurred. 
Borrowings are subsequently stated at amortised cost; any difference between proceeds (net of 
transaction costs) and the redemption value is recognised in the income statement over the year 
of the borrowings using the effective interest rate method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer 
settlement of the liability for at least 12 months after the balance sheet date.
N) Employee Benefits 
i. Defined Contribution Plans
Obligations for contributions to defined contribution pension plans are recognised as an expense in 
the income statement as incurred.
ii. Share-based Payment Transactions
The fair value of employee share option schemes is measured by a Black-Scholes pricing model. 
Further details are set out in note 16. In accordance with IFRS 2 ‘Share-based Payments’ the 
resulting cost is charged to the income statement over the vesting year of the options. The value of 
the charge is adjusted to reflect expected and actual levels of options vesting.
DB2190 - back street boys AW09.indd   30 18/1/08   10:28:33 Notes to the Consolidated Financial Statements
for the year ended 31 July 2007 continued
31
Annual Report 2007
O) Provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive 
obligation as a result of a past event, and it is probable that an outflow of economic benefits will be 
required to settle the obligation. If the effect is material, provisions are determined by discounting 
the expected future cash flows at a pre-tax rate that reflects current market assessments of the 
time value of money and, where appropriate, the risks specific to the liability.
P) Trade and Other Payables
Trade payables are stated at cost.
Q) Revenue Recognition
Revenue from services rendered is recognised in the income statement in proportion to the stage 
of completion of the transaction at the balance sheet date. The stage of completion is assessed 
by reference to a review of work performed. No revenue is recognised if there are significant 
uncertainties concerning the recovery of the consideration due or associated costs.
R) Expenses
i. Operating Lease Payments
Payments made under operating leases are recognised in the income statement on a straight-line 
basis over the term of the lease. Lease incentives received are recognised in the income statement 
as an integral part of the total lease expense.
ii. Finance Lease Payments
Minimum lease payments are apportioned between the finance charge and the reduction of the 
outstanding liability. The finance charge is allocated to each year during the lease term so as to 
produce a constant yearic rate of interest on the remaining balance of the liability.
iii. Net Financing Costs
Net financing costs comprise interest payable on borrowings calculated using the effective interest 
rate method and interest received on funds invested.
Interest income is recognised in the income statement as it accrues, using he effective interest 
method. The interest expense component of finance lease payments is recognised in the income 
statement using the effective interest rate method.
DB2190 - back street boys AW09.indd   31 18/1/08   10:28:33 Notes to the Consolidated Financial Statements
for the year ended 31 July 2007 continued
Annual Report 2007
32
S) Income Tax
The charge for current tax is based on the results for the year as adjusted for items which are 
non-assessable or disallowed. It is calculated using rates that have been enacted or substantively 
enacted by the balance sheet date.
Deferred tax is accounted for using the liability method in respect of temporary differences arising 
from differences between the carrying amount of assets and liabilities in the financial statements 
and the corresponding tax basis used in the computation of taxable profit. In principle, deferred 
tax liabilities are recognised for all taxable temporary differences and deferred tax assets are 
recognised to the extent that it is probable that taxable profits will be available against which 
deductible temporary differences can be utilised. Such assets and liabilities are not recognised if 
the temporary difference arises from goodwill (or negative goodwill) or from the initial recognition 
(other than in a business combination) of other assets and liabilities in a transaction which affects 
neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in 
subsidiaries and associates, and interest in joint ventures, except where the Group is able to control 
the reversal of the temporary difference and it is probable that the temporary difference will not 
reverse in the foreseeable future.
Deferred tax is calculated at the rates that are expected to apply when the asset or liability is settled. 
Deferred tax is charged or credited in the income statement, except when it relates to items credited 
or charged directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same 
taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
T) Financial Risk Management
The Group uses a limited number of financial instruments, comprising cash, short-term deposits, 
bank loans and overdrafts and various items such as trade receivables and payables, which arise 
directly from operations. The Group does not trade in financial instruments. 
Financial Risk Factors 
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk 
and interest rate risk), credit risk, liquidity risk and cash flow interest rate risk. The Group’s overall 
risk management programme focuses on the unpredictability of financial markets and seeks to 
minimise potential adverse effects on the Group’s financial performance. 
a) Market Risk 
(i) Foreign Exchange Risk 
The Group operates internationally and is exposed to foreign exchange risk arising from various 
currency exposures, primarily with respect to the UK pound and US dollar. Foreign exchange risk 
arises from future commercial transactions, recognised assets and liabilities and net investments in 
foreign operations. Foreign exchange risk arises when future commercial transactions or recognised 
assets or liabilities are denominated in a currency that is not the Group’s functional currency.
DB2190 - back street boys AW09.indd   32 18/1/08   10:28:34 Notes to the Consolidated Financial Statements
for the year ended 31 July 2007 continued
33
Annual Report 2007
T) Financial Risk Management continued
b) Credit Risk 
The Group has no significant concentrations of credit risk and has policies in place to ensure that 
sales are made to customers with an appropriate credit history.
c) Liquidity Risk 
Prudent liquidity risk management implies maintaining sufficient cash and available funding 
through an adequate amount of committed credit facilities. The Group ensures it has adequate 
cover through the availability of bank overdraft and loan facilities. 
d) Cash Flow and Interest Rate Risk 
The Group finances its operations through a mix of cash flow from current operations together 
with cash on deposit and bank and other borrowings. Borrowings are generally at floating rates of 
interest and no use of interest rate swaps has been made.
1. Segmental Reporting
Revenue and profit before tax are attributable to the one principal activity of the Group, that of a 
full service advertising and marketing agency. All revenue originated in the UK.
2. Operating Costs
Note
Year ended  
31 July 2007 
£,000
Year ended  
31 July 2006  
£,000
Total staff costs 3 3,964 593
Establishment costs 458 35
Other operating costs (net) 1,571 109
Total operating costs 5,993 737
Operating costs include:
Depreciation of property, plant and equipment 9 386 7
(Profit) on disposal of plant and equipment (241) –
Operating lease rentals:
Property 262 32
Plant and equipment 144 5
Auditors remuneration:
Services as auditors 40 30
Other assurance services 20 130
Audit fees paid to Shipleys LLP include £10,000 (2006: £10,000) in respect of the parent company. In 
2007 fees paid to Shipley LLP in respect of the acquisition of Neville Eckley & Co and Adie Financial 
Solutions Limited of £7,000  and £13,000 respectively have been included in cost of investment in 
subsidiary companies and included goodwill acquired on consolidation.
DB2190 - back street boys AW09.indd   33 18/1/08   10:28:34 Notes to the Consolidated Financial Statements
for the year ended 31 July 2007 continued
Annual Report 2007
34
3.  Personnel Expenses
Year ended 
31 July 2007
£,000
Period ended 
31 July 2006
£,000
Wages and salaries 3,609 541
Compulsory social security costs 355 52
3,964 593
Compensation for key personnel is disclosed in the report on remuneration on page 15.
4. Our People
Our staff numbers averaged 165 in the year against 103 in 2005, as follows:
Year ended 
31 July 2007
No.
Period ended 
31 July 2006
No.
Directors 5 4
Senior managers 17 4
Licensed insolvency practitioners 5 5
Debt Counsellors 24 19
Administration and supervisors 114 71
165 103
5. Net Financing Income
Year Ended
31 July 2007
£,000
Period ended 
31 July 2006
£,000
Interest income 30 27
Interest cost (52) (6)
Net financing (cost)/ income (22) 21
6. Income Tax Expenses 
Year Ended
31 July 2007 
£,000
Period ended 
31 July 2006
£,000
Current income tax
Current year 846 165
Taxation attributable to the Company and its subsidiaries 846 165
Domestic income tax is calculated at 30% (2006: 30%) of the estimated assessable profit for the year.
DB2190 - back street boys AW09.indd   34 18/1/08   10:28:35 Notes to the Consolidated Financial Statements
for the year ended 31 July 2007 continued
35
Annual Report 2007
6. Income Tax Expenses continued
The charge for the year can be reconciled to the profit per the income statement as follows:
Year Ended
31 July 2007 
£,000
% Period ended 
31 July 2006
£,000
%
Profit before tax 3,420 100 563 100
Tax on the domestic income tax rate 1,026 30 169 30
Tax effect of expenses that are not deductible in  
determining taxable profit 76 2.2 3 0.5
Tax effect of capital allowances for the year in 
excess of depreciation (52) (1.5) (7) (1.2)
Over provision in prior year (323) (9.4) – –
Other adjustments 119 3.4 – –
Tax expense and effective tax rate for the year 846 24.7 165 29.3
7. Goodwill and Investments
Company
Year ended 
31 July2006
£,000
Shares in subsidiary undertakings 
At 1 August 2006 1,513
Additions in year 587
At 31 July 2007 2,100
The Directors consider that the carrying amount of investments are significantly less their fair value.
 Acquistions
 Neville Eckley & Co (‘Neville Eckley’)
On 12 October 2006, the Group acquired the business and certain assets of Neville Eckley for an initial 
consideration of £330,000 to be satisfied in cash and deferred consideration of £30,000 to be satisfied 
by the issue of 14,851 ordinary shares in Debts.co.uk plc, and be issued 18 months following completion.
DB2190 - back street boys AW09.indd   35 18/1/08   10:28:35 Notes to the Consolidated Financial Statements
for the year ended 31 July 2007 continued
Annual Report 2007
36
7. Goodwill and Investments continued
Adie Financial Solutions Limited (‘AFS’)
On 25 May 2007, the Group acquired the entire share capital of AFS for a cash consideration of 
£400,000 paid on completion and the issue of 95,238 ordinary shares in Debts.co.uk plc.
The fair value of the identifiable assets and liabilities of both Neville Eckley and AFS as at the date of 
their acquisition and the corresponding carrying assets immediately before the acquisition were:
Neville Eckley: 
Previous 
carrying value 
£,000
Fair value on 
acquisition 
£,000
AFS 
Previous 
carrying value 
£,000
Fair value on 
acquisition 
£,000
Property plant and equipment 39 39
Cash and cash equivalents 195 195
Trade receivables 100 100 1,240 1,066
Total assets 100 100 1,474 1,300
Trade payables 125 125
Other payables 1,264 1,264
Total liabilities 100 100 1,389 1,389
Net assets/(liabilities) 100 100 85 (89)
Goodwill arising on acquisition 332 676
Total consideration 432 587
Consideration comprises:
Cash 300 400
Shares – 100
Deferred consideration 30 –
Acquisition costs 102 87
Total consideration 432 587
Cash outflow on acquisition:
Net cash acquired with the 
subsidiary – (195)
Cash consideration 402 487
Net cash flow 402 292
From the date of acquisition, AFS has contributed £11,000 and Neville Eckley has contributed 
£218,000 to the net profit of the Group.
In the year of 31 July 2007, AFS made a net profit of £11,000 on revenues of £464,000 and Neville 
Eckley made a net profit of £218,000 on revenues of £1,588,000.
DB2190 - back street boys AW09.indd   36 18/1/08   10:28:36 Notes to the Consolidated Financial Statements
for the year ended 31 July 2007 continued
37
Annual Report 2007
8. Subsidiaries
Details of the Company’s subsidiaries at 31 July 2007 are as follows. 
Name of Subsidiary
Principal 
Activity
 
Proportion 
of beneficial 
ownership 
interest and 
voting power 
held
Synergi Partners Limited Insolvency practice 100%
The Debt Counsellors Limited Debt advisory 100%
Debtcare Limited Personal debt solutions 100%
Adie Financial Solutions Limited Scottish insolvency practice 100%
Neville Eckley Limited Insolvency practice 100%
Scarlet Loans and Mortgages Limited Financial intermediation 100%
The Loan Group Limited Non-trading 100%
Switch Mortgages Limited Non-trading 100%
Scarlet Money Limited* Non-trading 100%
Debtcare Direct Limited** Non-trading 100%
Debtcare Financial Services Limited** Non-trading 100%
All companies are incorporated in Great Britain. All companies are registered in England and Wales, except 
Adie Financial Solutions Limited which is registered in Scotland.
*100% subsidiary of The Loan Group Limited
** 100% subsidiary of Debtcare Limited
9. Plant and Equipment
Group
Fixtures and 
Fittings
£,000
Motor Vehicles
£,000
Total
£,000
Cost or valuation
At 1 August 2006 195 83 278
Acquired on acquisition of subsidiary undertaking 39 – 39
Acquisition of property, plant and equipment 971 202 1,173
Disposals (506) (147) (653)
At 31 July 2007 699 138 837
Accumulated depreciation
At 1 August 2006 116 52 168
Acquired on acquisition of subsidiary undertaking – – –
Depreciation charge for the year 298 88 386
Eliminated on disposal (145) (91) (236)
At 31 July 2007 269 49 318
Carrying amount 
At 31 July 2007 430 89 519
At 1 August 2006 79 31 110
DB2190 - back street boys AW09.indd   37 18/1/08   10:28:37 Notes to the Consolidated Financial Statements
for the year ended 31 July 2007 continued
Annual Report 2007
38
9. Plant and Equipment continued
Company
Fixtures and 
Fittings
£,000
Motor Vehicles
£,000
Total
£,000
Cost or valuation
Acquisition of property, plant and equipment 570 72 642
Disposals (330) – (330)
At 31 July 2007 240 72 312
Accumulated depreciation
Depreciation charge for the year 103 18 121
Disposals (47) – (47)
At 31 July 2007 56 18 74
Carrying amount 
At 31 July 2007 184 54 238
10. Other Financial Assets
Group Company
31 July 2007
£,000
31 July 2006
£,000
31 July 2007
£,000
31 July 2006
£,000
Trade receivables 342 171 – –
Other receivables:
Amount due from Group 
undertakings – – 5,796 810
Other debtors 382 908 108 395
Prepayments and  
accrued income 9,957 2,116 157 –
10,681 3,195 6,061 1,205
The Directors consider that the carrying amount of trade and other receivables approximates their 
fair value. All trade and other receivables are due within one year.
11. Cash and Cash Equivalents 
Cash and cash equivalents comprise cash and short-term deposits held by the Group treasury 
function. The carrying amount of these assets approximates their fair value.
12. Other Financial Assets
 Credit Risk
The Group’s credit risk is primarily attributable to its trade receivables. The amounts presented in 
the balance sheet are net of any allowances for doubtful receivables, estimated by the Group’s 
management based on prior experience and the current economic environment.
The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings 
assigned by international credit-rating agencies.
DB2190 - back street boys AW09.indd   38 18/1/08   10:28:38 Notes to the Consolidated Financial Statements
for the year ended 31 July 2007 continued
39
Annual Report 2007
13. Share Capital
Company
31 July 2007
£,000
31 July 2006
£,000
Authorised:
Ordinary shares of £0.10(2005: £0.10) each         5,000       5,000
Issued and fully paid:
Ordinary shares of £0.10 (2005: £0.10) each 2,109 1,944
On 25 May 2007, the Company issued 95,238 new ordinary shares in part consideration for the 
acquisition of AFS.
On 7 June 2007, the Company issued 1,553,571 new ordinary shares at a placing price of  
105p per share.
At 31 July 2007, 258,329 options over ordinary shares under the Debts.co.uk Enterprise Management 
Incentive (EMI) Plan were outstanding:
Date of 
grant
Granted Exercised
/vested
Forfeits At
31 July 2005
Exercise/ 
Share price
Exercise/Vesting date
From To
16 May 2006
23 May 2006
55,550
202,779
–
–
–
–
55,550
202,779
0.10
1.80
24 May 2009
24 May 2009
16 May 2016
16 May 2016
At 31 July 2007, 30,361 options over ordinary shares under an unapproved share option scheme 
were outstanding. The options were granted on 16 May 2006 for an exercise price of £0.10p 
per share which are available fro exercise from 24 May 2009 to 16 May 2016.
14. Earnings per Share 
Group
Earnings 
Year ended  
31 July 2007
Year ended  
31 July 2006
Basic EPS
Reported earnings (£) 2,574 1,463
Reported EPS 13.05p 8.63p
Diluted EPS
Diluted reported earnings (£) 2,574 1,463
Reported diluted EPS 13.04p 8.59p
Note Year ended
31 July 2007
No.
Year ended
31 July 2006
No.
Weighted average number of ordinary shares:
Issued ordinary shares at 1 August 19,444,444 16,666,666
Effect of 25 May 2007 share issue 13 14,090 –
Effect of 7 July 2007 share issue 13 259,638 –
Effect of 24 May 2006 share issue – 281,583
Weighted average number of ordinary shares 19,718,172 16,948,249
Average shares used in calculating the  
Basic EPS calculation 19,718,172 16,948,249
Dilutive Share Options outstanding 79,906 71,013
Weighted average number of ordinary shares 19,798,078 17,019,262
DB2190 - back street boys AW09.indd   39 18/1/08   10:28:38 Notes to the Consolidated Financial Statements
for the year ended 31 July 2007 continued
Annual Report 2007
40
15. Share-based Payment
During the year ending 31 July 2007 the Company had one share-based payment arrangement in 
operation, as described below.
 Employee Share Options
Options over shares in the holding company are awarded to eligible employees and Directors of 
Debts.co.uk plc.  
The options exercise period commences on the third anniversary of the date of the grant of the 
option and ends on the day which is the day before the tenth such anniversary. Exceptionally and 
subject to the discretion of the Board options may be exercised earlier than three years following 
grant on the cessation of the option holder’s employment.
The estimated fair value of each option granted was calculated by applying the Black-Scholes 
option pricing model. The assumptions used in the calculation are as follows:
Date of grant 16 and 23 May 2006
Notional share price at grant date 180p
Exercise price 10p/180p
Number of employees 12
Shares under option 288,690
Expected volatility 5%
Expected dividend 0%
Contractual life 3 years
Risk free rate 5%
Estimated fair value of each option 170p/nilp
Further details of the share option plan are as follows:
Group
Year ended 31 July 2007
Number of 
options
Weighted 
average price 
pence
Granted during the year – –
Forfeited – –
Exercised – –
Outstanding at the end of the year 288,690 1.29
Exercisable at the end of the year Nil –
Expenses charged to the profit and loss in the year in respect of share based payments are as follows:
Group
Expenses arising from
Year ended 
31 July 2007
£,000
Year ended 
31 July 2006
£,000
- share option plans 30 –
DB2190 - back street boys AW09.indd   40 18/1/08   10:28:39 Notes to the Consolidated Financial Statements
for the year ended 31 July 2007 continued
41
Annual Report 2007
16. Share Premium
Group and company
 
31 July 2007 
£,000
31 July 2006 
£,000
Balance at 1 August 4,033 –
Issue of shares 1,566 4,723
Issue costs (72) (690)
Balance at 31 July 5,527 4,033
17. Merger Reserve
Group
Year ended 
31 July 2007
£,000
Year ended 
31 July 2006
£,000
Balance at 31 July 2006 and 2007 (1,513) (1,513)
18. Retained Earnings
Group Company
 
31 July 2007
£,000
31 July 2006
£,000
31 July 2007
£,000
31 July 2006
£,000
Balance at 1 August 814 – 2 –
Net profit for the year 2,574 398 89 156
Adjustment on reorganisation – 570 – –
Bonus issue on 16 May 2006 (72) (154) – (154)
Balance at 31 July 3,316 814 91 2
The profit in the accounts of the parent company was £89,000 (2006: profit of £156,000).
19. Trade and Other Payables
Group Company
Year ended 
31 July 2007
£,000
Year ended 
31 July 2006
£,000
Year ended 
31 July 2007
£,000
Year ended 
31 July 2006
£,000
Trade payables 448 404 334 256
Other payables:
Bank overdraft – 22 – –
Social security and other taxes 504 88 73 28
Accruals and deferred income 1,022 370 199 2
1,974 884 606 286
Trade and other payables principally comprise amounts outstanding for purchases and ongoing costs. 
The Directors consider that the carrying amount of trade payables approximates to their fair value.
DB2190 - back street boys AW09.indd   41 18/1/08   10:28:39 Notes to the Consolidated Financial Statements
for the year ended 31 July 2007 continued
Annual Report 2007
42
20. Operating Lease Commitments
Lease Activity
Land and buildings:
Group
Year ended 
31 July 2007
£,000
Group
Period ended
31 July 2006
£,000
Minimum lease payments under operating leases 277 12
Recognised in income for the period 371 12
At the balance sheet date, the Group had outstanding commitments under non-cancellable leases, 
which fall due as follows:
At 31 July 2007
£,000
At 31 July 2006
£,000
In the second to fifth year inclusive                                  238              –
Over five years                                                              281              –
Operating lease payments represent rentals payable by the Group for its office property  
and equipment.
On 20 June 2006, Paul Carter and the Company entered into three leases for three separate office 
buildings at Ireland Business Park, Stavelely, Chesterfield, on a site which is owned by Paul Carter. The 
offices when are completed will be in excess of approximately 22,000 square feet in aggregate. 
The leases provide for an annual rent based on £12.50 per square foot, and are for terms of ten 
years each with provision for rent review on the fifth year of the term. The leases will have the 
benefit of the security of tenure provisions of the Landlord and Tenant Act 1954 and are on full 
repairing and insuring terms.
The office buildings were occupied in December 2006. 
DB2190 - back street boys AW09.indd   42 18/1/08   10:28:40 Notes to the Consolidated Financial Statements
for the year ended 31 July 2007 continued
43
Annual Report 2007
21. Related Party Transactions
All inter group transactions between Group enterprises have been eliminated on consolidation.
During the year, the Group engaged Olivine Partners LLP and Olivine Capital Partners Limited of 
which Stuart Cumberland is a Member and Director respectively to undertake corporate finance 
and tax advisory services. Fees payable totalled £160,500 in the period to 31 July 2007, of which 
£6,000 has been included in the share issue costs.
The Company entered into a lease agreement with Paul Carter for the provision of three separate 
office buildings. Details are set out in note 21.
During the year, the Company acquired systems flooring from a building firm, Jaybuild Projects 
Limited, for £95,035. Additionally, the Company purchased security guarding services and fuel 
charges for an electricity guarantor totalling £115,412 due to the requirement for temporary electricity 
to be supplied whilst an electrical substation was completed on the site. Paul Carter has used and 
is currently using Jaybuild Projects Limited on a number of personal building projects including the 
current offices occupied by the Group in Chesterfield and the transactions are considered to be 
related by virtue of the personal relationship of Paul Carter and Jaybuild Projects Limited.
22. Subsequent Events
As part of a review of operations undertaken in October 2007, the Group announced the closure of 
the Borehamwood office of The Debt Counsellors Limited and the closure of the March, Coulsden 
and Southend offices of Neville Eckley & Co with the activities of all closed offices being transferred 
to our head offices in Chesterfield. In addition, the Group made a small number of redundancies 
within Synergi Partners Limited and Scarlet Money Limited. It is anticipated that the closures and 
redundancies will achieve approximately £2m of cost savings per annum and will not have a 
material effect on revenues.
23. Capital Commitments
There are no capital commitments.
24. Accounting Estimates and Judgements
Management discussed with the Audit Committee the development, selection and disclosure of the 
Group’s critical accounting policies and estimates and the application of these policies and estimates.
25. Bank Balances Held on Behalf of Individuals
Total bank balances of £6,278,326 were held by the Group on behalf of individuals who have 
entered into IVA’s at 31 July 2007. The bank balances are not recognised in the Group or Company 
balance sheets.
Total bank balances of £332,879 were held by the Group in trustee accounts on behalf of 
individuals who have entered into a debt management programme at 31 July 2007. The bank 
balances are included in the Group balance sheets.
Total bank balance of £3,126,496 were held by the Group in trustee accounts on behalf of 
individuals who have entered into trust deed or sequestration as at 31 July 2007. The bank balances 
are not recognised in the Group or Company balance sheets.
DB2190 - back street boys AW09.indd   43 18/1/08   10:28:40 Annual Report 2007
44
Officers and Professional Advisers
for the year ended 31 July 2007
The Board of Directors
Bernard Asher 
Non-Executive Chairman
Paul Carter   
Chief Executive Officer 
Barry Krite  
Managing Director
Richard Arden ACA 
Finance Director
Stuart Cumberland ACA  
Director
Secretary
Richard Arden
Registered Office 
Carter Place 
Gisborne Close 
Staveley  
Chesterfield S43 3JT
Bankers
Barclays Bank PLC  
P.O. Box 190 
2nd Floor 
1 Park Row 
Leeds LS1 5WU
Auditors
Shipleys LLP 
Chartered Accountants 
Registered Auditors 
10 Orange Street  
Haymarket 
London WC2H 7DQ 
Nominated Adviser and Broker
Seymour Pierce Limited 
20 Old Bailey 
London EC4M 7EN
Solicitors
Halliwells LLP 
1 Threadneedle Street 
London EC2R 8AW
Registrar 
Computershare Investor Services PLC 
PO Box 82  
The Pavilions 
Bridgwater Road 
Bristol BS99 7NH
Finanicial PR
Adventis Financial PR 
93-95 Wigmore Street 
London W1U 1HH
Company Number
05663957 (England and Wales)
Website
www.debts.co.uk
DB2190 - back street boys AW09.indd   44 18/1/08   10:28:41 Better equipped – Better advice – Better returns 
Debts.co.uk plc 
Carter Place 
Gisborne Close 
Staveley 
Chesterfield S43 3JT
0800 008 7322
www.debts.co.uk Debts.co.uk plc 
Carter Place 
Gisborne Close 
Staveley 
Chesterfield S43 3JT
0800 9 15 15 16
www.debts.co.uk
Debts.co.uk plc                       Annual Report & Accounts 2007
Annual Report & Accounts 2007