Freshwater UK PLC 
Annual Report and Accounts
2007
freshwater Contents
Page
Financial and business highlights 3
Case studies 4
Chairman’s statement 20
Chief Executive’s review 22
Operational review 25
Board of Directors 30
Directors’ report 32
Statement of Directors’ responsibilities 37
Independent auditors’ report 38
Consolidated income statement 39
Consolidated balance sheet 40
Company balance sheet 41
Consolidated statement of changes 42
in equity 
Company statement of changes 43
in equity
Consolidated cash flow statement 44
Company cash flow statement 45
Notes to the financial statements 46 xx
xx
Financial highlights
� T urnover increased by 59% to £6.54m (2006: £4.12m)
� Revenue (gross profit) increased by 65% to £4.66m (2006: £2.82m)
� Earnings before interest, tax and depreciation (EBITDA) increased 97% to £1.14m
(2006: £0.58m) 
� Profit before taxation increased by 111% to £0.92m (2006: £0.44m)
� Basic earnings per share increased 58% to 9.66p (2006: 6.10p)
� T otal dividends increased by 22% to 2.98p per share (2006: 2.45p) 
� Raised £4m before expenses through a placing when listing on AIM
� Agreed new facilities of £2.2m with Royal Bank of Scotland
Operational highlights
� Achieved like-for-like organic growth of 7.7% in businesses in the Group on 
1 September 2005 and 31 August 2007
� Acquired Attenborough Saffron, a leading London-based consumer agency, 
in February 2007
� Successfully completed the integration of the six previous acquisitions, 
which are all now trading under the Freshwater brand 
� Provided services to 329 clients across the UK (2006: 239) with none
accounting for more than 3.5% of revenue
� Increased revenue per full time employee by 16% to £70,963 (2006: £61,373) 
� Increased EBITDA per full time employee by 38% to £17,443 (2006: £12,681) 
Post Balance Sheet Events
� Acquired Lynx Public Relations, Leeds-based public relations agency in
November 2007
� Acquired Waterfront Public Affairs and the Waterfront Conference Company,
based in London and Brussels in December 2007
T urnover increased by 
59% to 
£6.54m
Financial and business highlights Case studies
04 Freshwater UK Annual Report 06/07   
1. TRAINING FOR THE UNVEILING
OF THE 2012 LOGO
In 2005 Freshwater Academy provided
presentation training for Seb Coe and the
winning London 2012 Olympic bid team.
Following this success, Academy was
reappointed in 2007 to provide further
presentation training for the London
Organising Committee of the Olympic and
Paralympic Games when the much talked-
about London 2012 logo was unveiled to the
world.
2. VOICE COACHING TRAINING
FROM ACADEMY
Skadden is the first 'go-to' law firm for
America's biggest corporations according to
The National Law Journal, representing
more Fortune 250 companies than any
other lawyers. Freshwater Academy
developed a coaching programme for one of
their Canary Wharf-based arbitration and
litigation lawyers, including presentation
training and voice coaching. Radio 4
presenter and producer Sara Jones and BBC
radio actress Anna Bentinck led the sessions,
which covered the complex skills needed to
become a confident and articulate presenter
- from structuring key messages to working
on relaxation of the shoulders and neck. The
client was so impressed with the course they
are planning further coaching sessions.
3. LEADING THE WAY FOR NHS
TRAINING IN LONDON 
Freshwater Academy provides a series of
communication training courses for the NHS
Board Leadership Programme, run by The
King's Fund, an independent charitable
foundation working for better health. The
development programme is aimed at chair
people and non-executive directors in the
NHS in London, and since it began in May
2000, all health authorities and NHS trusts in
the London area have been represented at
events. The seminars run by Academy
include An introduction to communication in
the NHS and Understanding leadership in a
political environment. Excellent feedback
from participants and The King's Fund has
led to more seminars being planned.
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3 Case Studies
Freshwater UK Annual Report 06/07   05
4. LIQUIDITY SPARKS NATIONAL
DEBATE
Freshwater Midlands was briefed to organise
a business breakfast featuring a major speaker
for business finance house Liquidity. The aim
was to raise the profile of Liquidity and show
the firm as a thought leader. Freshwater
secured Jon Moulton, Chief Executive of one
of the UK's leading private equity firms,
Alchemy Partners LLP, to speak at the
breakfast - who fitted perfectly with Liquidity's
strategy for the event.
The speech created regional and national
interest as Jon Moulton was one of the first
to predict the impact of the 'credit crunch'
on the UK market. Coverage in the Financial
Times and key regional newspapers all
mentioned Liquidity, and led to an interview
on Radio Four's T oday programme. The link
with high profile speakers and accompanying
media interest placed Liquidity ahead of its
larger rivals in the SME market and
effectively supported its direct sales and
introducer-led activity.
5. NEW FRONTIER FOR No5
Already the largest barristers' chambers
outside London, No5 Chambers furthered
its horizons this year when it confirmed a
strategic alliance with Zhonglun W & D LLP ,
one of Asia's fastest growing law firms and
the first and only Chinese law firm to open
an office in London. Freshwater Midlands
was appointed to generate publicity for the
move and help establish the partnership. It
developed a targeted media relations
campaign involving face to face briefings with
key opinion formers in the media. The result
was high quality coverage in the law press and
across UK regional and international titles.
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Case studies
6. HOUSING A DEBATE
To promote the Property Investor &
Homebuyer Show at the Scottish Exhibition
and Conference Centre (SECC), Freshwater
Scotland organised a property trade debate
on the subject 'Why is property still the right
home for your money?'.
The debating panel of industry professionals
included the sales and investment director of
Dandara and the marketing manager of the
Glasgow Solicitor's Property Guide. The
event was chaired by George Kerevan,
associate editor of The Scotsman. 
A steady stream of media coverage in target
property publications and regional
newspapers helped promote the event and
the debate positioned client Homebuyer
Events as experts in the field, promoting
their other property shows around the UK
and raising awareness of them in the industry. 
7. LAUNCHED WITH A SWING
Freshwater Scotland held an event with a
swing when it launched international property
developer Southplace’s new development in
Glasgow, The Plaza. Briefed to host a launch
that would secure reservations and sales,
the Scotland team plumped for a 50s
themed event to celebrate The Plaza’s
1950s heyday, hiring veteran band leader
Harry Margolis and his famous Glen Miller
Band to perform.
The launch, combined with regular news fed
to the press, ensured weekly coverage in the
months leading up to and following the event.
The result was 17 direct sales in the first two
weeks and a very happy client. The team has
now been appointed to organise a similar
event in August 2008.
8. GETTING FRESH WITH
SCOTCAMPUS
The inaugural Scotcampus Freshers Festival
2007 was the very first large-scale
independent event for Glasgow’s student
population organised by Scotcampus
Newspaper – Scotland’s leading student
publication.
Freshwater Scotland delivered a high-impact
PR campaign that secured coverage with key
Glasgow media outlets including the Daily
Record and Metro Clyde 1 FM, Glasgow’s
biggest radio station. Freshwater’s work
dramatically increased awareness of the
event among key audiences including
potential exhibitors, school leavers and fresher
students. It also helped secure exhibitors and
deliver footfall for the event, achieving 10,000
visitors over the two days.
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Case Studies
9. CREATING A NEW HEART FOR
BARNSLEY
The site of the former Civic Theatre in
Barnsley is undergoing a transformation to
become a new creative industries quarter at
the heart of the town centre. Our challenge
involved communicating the dramatic
changes taking place inside the building at
the same time as working to maintain its
place in the affections of many of Barnsley’s
residents.
Freshwater Northern and Freshwater
Creative devised an integrated
communications campaign around the
theme ‘DARE to be different’, which was
used in the hoardings around the Civic, in
recruitment advertising and on the website.
A PR campaign fed regular stories to the
region’s media to let people know what was
happening, and included support from
Denise Van Outen, who made one of her
very first public appearances on the Civic’s
stage as a 14 year old.
10. BUSINESS AS USUAL
MESSAGE FOR HOWELLS
One of Howells Solicitors’ Sheffield offices
was so badly hit by the floods in summer
2007 that the entire staff and building
contents had to be relocated. An immediate
priority was to ensure that clients knew as
soon as possible that it was business as usual
for the firm. Freshwater Northern got
started straight away and negotiated a deal
with the local newspaper group to run full
and half page adverts in the weekly and daily
papers and banner ads on the Sheffield
Today website. A newsletter was also
produced in less than a week and distributed
to all clients, and signage was installed to
redirect clients to the firm’s other office.
The campaign achieved a high level of
awareness and reassured clients, meaning it
really was business as usual.
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Case studies
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11. SAFEGUARDING CHILDREN
MADE SIMPLE
Sheffield Safeguarding Children Service
wanted to create a way of ensuring that
schools could access vital information about
safeguarding children in an attractive, easily
available and simple-to-update format.
Freshwater Northern began by advising on
how to simplify and amalgamate existing
material to make it easier to use and
understand and drafted new material as
required. Alongside this, Freshwater
Creative developed a Safeguarding Children
brand and produced a whole suite of the
new documents in a format that was user
friendly and easy to update.
12. GOING ONCE, GOING TWICE…
John Francis is Wales’s largest independent
estate agency and has a reputation for selling
quality homes. But one property that came
up for sale this year stood out from the
crowd. Little Marloes Farm sits on its own
peninsula on the Pembrokeshire coast,
jutting out spectacularly into the Irish Sea.
The former farmhouse came with
outbuildings and land, and was up for sale at
auction with a guide price of £275,000.
Freshwater Wales secured the coveted ‘Is it
worth it?’ slot in The Sunday Times, as well
as substantial regional coverage. On the day
of the sale, John Francis had a packed
auction room and bidders on the phone
from London. The bids started at £400,000
and the hammer fell at £764,000 to a
London buyer. The incredible price
exceeded all expectations and earned
Freshwater praise from John Francis for
being “our 19th branch!” Freshwater UK Annual Report 06/07    09
Case Studies
13. MAKING A NOISE FOR LLOYDS
TSB
Lloyds TSB has sponsored the Welsh Proms
for the last two years, with fantastic profile-
raising results throughout the country. For
the 2007 Proms, the company wanted to
extend its support and raise awareness of its
sponsorship with the Welsh communities it
operates in. Freshwater Wales was
appointed to promote In Tune with Wales, a
schools’ music ensemble competition aimed
at secondary schools across the country.
The Wales team devised, managed and
undertook all PR activity and media relations
to correspond with each stage of the
competition. Releases were sent out to the
regional press and broadcast media
operating in the locality of each of the
shortlisted schools, accompanied by creative
photography of pupils practising with their
local Lloyds TSB branch manager. Releases
were tailored to encourage local and
regional media interest and Lloyds TSB was
highlighted as a strong community partner in
the resulting coverage. The campaign
received a return of investment of 5:1, on an
industry average of 3:1, and the contract has
been renewed for the 2008 competition.
14. RECRUITMENT DRIVE
Freshwater Wales has worked with
Castleoak Care Partnerships for a number of
years. The company specialises in the
construction of accommodation for older
people throughout the UK, and in June 2007
Freshwater Wales was specifically tasked to
help boost recruitment in a highly
competitive industry by highlighting
Castleoak’s commitment to its employees’
welfare.
Following a media audit, Freshwater devised
a specific recruitment communications plan
targeting key construction trade titles with
releases covering news from contract wins
to opinion pieces on industry issues.
Working closely with Freshwater Creative
and Freshwater Digital, the team devised a
new recruitment advertising campaign to
attract the very best candidates, and a video
of Castleoaks’ annual staff conference was
produced to highlight its worker-friendly
culture.
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Case studies
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15. KEEP SOMERSET LOCAL
Freshwater consultants from the Public
Sector and Southern teams worked closely
with the communications teams from five
Somerset district councils this year in a
successful campaign against the creation of a
unitary authority in the county.
After creating a working group involving all
five councils, Freshwater identified aspects
of the unitary proposal that could be
challenged and generated evidence to show
it could not deliver the promised benefits.
An integrated campaign was then launched –
branded “Keep Somerset Local” – to inform
Somerset residents and other stakeholders
about the proposal and encourage them to
vote in a county-wide poll, using a mix of
media relations, leaflets, posters, events, a
website, petitions and stakeholder lobbying.
200,000 people – almost half the county’s
population – voted, a turnout close to that
expected for a general election, and 82 per
cent said no to the unitary authority.
Communities Secretary Hazel Blears
subsequently rejected the unitary proposal,
citing lack of support from stakeholders and
the general public as a key reason behind her
decision.
16. ON THE ROAD WITH DIGNITY
AT WORK
For the past two years Freshwater Southern
has worked with Dignity at Work, Europe’s
largest anti-bullying in the workplace
initiative, co-funded by Unite the union and
the Department for Business, Enterprise and
Regulatory Reform. In March 2007, the team
was briefed to organise 13 seminars across
the country to take the anti-bullying
message to HR professionals, solicitors,
employment law specialists and union
representatives in the UK regions.
Although centrally coordinated by
Freshwater Southern, other regional teams
were involved in staging the events from
Southampton to Glasgow and Norwich to
Belfast. Freshwater was responsible for the
event management of the roadshow, from
compiling delegate databases and sending
invitations to securing media coverage for
each event. The roadshow was a real
success, with well-attended seminars,
including one with over 100 delegates,
excellent participant feedback and a
delighted client. Freshwater UK Annual Report 06/07   11
Case Studies
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17. REGIONAL OPENINGS FOR
JOHN LEWIS
With 26 department stores across the
country, John Lewis is one of the UK’s
leading retailers. Freshwater started
working with the partnership in January
2007 to manage the regional media and
stakeholder relations of a nationwide store
opening programme. The team has
successfully completed a PR programme for
a new Cambridge shop, and activity on
Liverpool, Leicester and Cardiff is well
underway. The team draws on a wide range
of Freshwater expertise including consumer
PR, community relations and regional
knowledge. 
The opening in Cambridge was a huge
success with outstanding media coverage in
the run-up to and on the opening day –
including newspapers, radio and television.
Sales and footfall figures have exceeded
expectations, with revenue in the first week
almost double the forecast level.
18. COMMUNICATING TECHNICAL
EXPERTISE
Morgan T echnical Ceramics offers specialist
materials design and product manufacture to
a variety of demanding markets all over the
world. It has established an enviable
reputation for delivering value-added
solutions through world-class engineering,
design and production.
Freshwater Technology worked directly
with applications engineers and product
managers from across the firm’s European
operations to develop a series of
applications-focused articles that were
placed in key trade and technical
publications. Site visits were arranged so
journalists could see the state-of-the-art
manufacturing facilities first hand. 
As a result, the team achieved media
coverage across Europe in the vertical target
sectors of medical, aerospace, lasers and
automotive. 12 Freshwater UK Annual Report 06/07   
Case studies
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19. ON TARGET
Freshwater Technology and Freshwater
Wales worked together to increase
awareness of software and services
company Target, which operates in the
consumer credit, general insurance and
financial services market. The teams
positioned Target as a thought leader,
operating responsibly within its community. 
To highlight the in-depth knowledge of
Target’s consultants, Freshwater T echnology
put together a panel of spokespeople, who
were trained to speak to the media. The
team then conducted a sustained campaign
to secure opportunities for by-lined articles
and comment in relevant features. 
The campaign achieved more than 20 pieces
of substantial coverage in Target’s key press,
and a significant change in perception among
key journalists, who are now proactively
approaching Target for contributions.
20. OFF-SHORE V ON-SHORE
DEBATE TO LAUNCH ALPHA 3
In January 2006, Abacus Group plc, one of
the leading distributors of electronic
components in Europe, re-structured its
manufacturing businesses to operate under a
brand new umbrella organisation, Alpha 3
Manufacturing. 
To launch the new brand, Freshwater
Technology identified a news hook around
the current debate in the electronics
industry about the pros and cons of offshore
versus UK-based manufacturing. The team
worked with Alpha 3 senior management to
develop clear messages, and a tailored
training session was provided to help the
Alpha 3 spokespeople deliver effective on-
message interviews.  
A series of one-to-one meetings was
arranged with leading electronics journalists,
supported by creative photography, which
led to good quality coverage in leading
electronics titles, including the front page of
Electronics Weekly. Freshwater UK Annual Report 06/07   13
Case Studies
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21. HEALTHCARE MANAGE
HOSPITAL SUPERBUG CRISIS
The report of an outbreak of a new virulent
form of Clostridium Difficile Infection (CDI)
responsible for the deaths of 12 patients at
Stoke Mandeville Hospital attracted
widespread media interest and prompted
the then Health Secretary Patricia Hewitt to
call for an external inquiry by the Healthcare
Commission.  
Freshwater Healthcare was called in to help
the hospital prepare for publication of the
highly critical inquiry findings and manage
local and national media on the day of
publication. By highlighting vastly improved
infection control measures and significant
reductions in infection rates, Freshwater
Healthcare was able to restrict the negative
publicity to a 24-hour news cycle. This was
despite the fact that the Healthcare
Commission inquiry found that 334 patients
had acquired CDI while in hospital and 33
had died from the infection.
22. CHANGING OPINIONS FOR
NHS HERTFORDSHIRE
The Healthcare team was appointed by the
NHS in Hertfordshire to help explain
proposals for controversial local changes to
health services. Although senior doctors and
nurses support the proposed changes, the
public was concerned about the closure of
much loved local hospitals and what would
replace them, a concern which was
reflected in the local media and through a
high profile ‘Hospital SOS’ campaign. 
Freshwater Healthcare worked with in-
house communication teams to develop a
highly targeted media campaign delivered
over four months and aimed at countering
negative coverage and ensuring local people
understood the proposed changes and the
reasons for them. The campaign resulted in
some very positive coverage emphasising
that doctors and nurses were 100 per cent
behind the proposals. This helped reassure
local people, and the proposed changes to
local health services have since been
approved by Hertfordshire County
Council’s Health Overview and Scrutiny
Committee. 14 Freshwater UK Annual Report 06/07   
Case studies
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23. MORPHY RICHARDS GETS
BALLS
In 2007, Morphy Richards created a new
range of irons and hair appliances to support
Everyman, the male cancer charity.
Attenborough Saffron came up with a multi-
faceted creative campaign to gain maximum
coverage for the range. The press office
function was launched with a quirky
postcard sent to target media, and followed
up with a stunning visual of the Cerne Giant
holding a Morphy Richards iron, to link the
product with Everyman’s mission. 
A central part of the campaign was the Male
Grooming Guide, a glossy 48 page guide of
top grooming tips, designed by Freshwater
Creative and written by Attenborough
Saffron. The guide included tips to help you
turn from ‘Cave Man’ to ‘Metrosexual’ and
was placed in 1,250 goody bags for shoe
retailer Office’s Student Lock In. This,
coupled with a three month sponsorship of
the grooming pages in lad’s mag Front,
ensured the key youth market was reached.
The campaign achieved 78 press cuttings,
reached 14,614,621 people and had a PR
value of £266,871, with more cuttings
expected.
24. SEARCH FOR A STAR WITH
QVC
QVC, the UK’s leading TV shopping channel,
works with Attenborough Saffron’s specialist
fashion and beauty consultants.  The team
devised a campaign to promote ‘QVC
Presenter Search’, a national competition to
find a new member to join the channel’s
team of professional presenters. The event,
a mix between X Factor and The
Apprentice, would provide the winner with
a one-year contract to present on QVC.
Attenborough Saffron secured The Sunday
Mirror magazine, Celebs on Sunday, to be
the event’s media partner, and secured
national and regional media exposure for the
auditions, celebrity judges, finalists and the
winner. The national event generated 90
pieces of editorial coverage, with OTS
figures of over 100 million. Highlights
included extensive publicity in the Sunday
Mirror, Independent, Guardian and BBC TV
News Scotland. The finalist TV show on
QVC achieved some of the highest viewing
figures for the channel during 2007 and
created a real buzz around the brand. Freshwater UK Annual Report 06/07   15
Case Studies
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25. BEN FOGLE BRAVES THE
ELEMENTS FOR NATURE VALLEY
VODCAST
T o promote General Mills’ granola bar brand
Nature Valley, Attenborough Saffron created
a campaign linking the brand with the great
outdoors. A theme was launched to target
the walkers’ market – an audience looking
for a high energy boost when out and about.
Attenborough Saffron appointed outdoor-
loving television presenter Ben Fogle as the
brand’s spokesperson, and devised a raft of
promotional activity around the theme. 
This included a video of Ben guiding viewers
around his favourite walk, from Peak Cavern
to Mam T or in the Peak District, which was
filmed, edited and produced by Freshwater
Digital and available on the Nature Valley
website. As well as the vodcast, the
campaign for Nature Valley included a
syndicated radio feature with Ben for local
radio and a Guide to 50 Things to do
Outdoors, published in The Sunday
Telegraph.
26. ITALIAN STYLE HITS THE
FINCHLEY ROAD
Freshwater Consumer and Attenborough
Saffron were appointed to create an event to
launch premium Italian furniture brand
Natuzzi’s flagship store on Finchley Road.
The team was tasked to create excitement
around the brand and raise the profile of
Pasquale Natuzzi, the brand's founder and
chief designer.
Prior to the event, Italian male models were
hired to drive Natuzzi-branded scooters
around London and an exclusive press
breakfast was held for key magazine editors,
hosted by Pasquale Natuzzi. The launch
party was attended by 250 guests including
journalists, opinion formers, potential
customers, local community leaders and
trade partners. The evening included a
charity auction of one-off dresses in Natuzzi
fabrics, designed by London Fashion Week
Young Designer of the Year and modelled by
Take 2 Models, in aid of The Children's
Society.  
The event was such a success that the client
decided to recreate a smaller-scale version
for its new Dublin store, and the London
event is now being used as a blueprint for
best practice at every store opening globally. Chairman’s statement
16 Freshwater UK Annual Report 06/07   
Case studies
27. THE ULTIMATE LAMB
SANDWICH
Attenborough Saffron has worked with New
Zealand lamb since 1996 to provide annual
campaigns that reflect the seasonal
availability of the meat and react to the
diminishing interest in traditional cookery of
the British public. A creative campaign was
used to launch the first ever downloadable
recipe for the iPod generation. Celebrity
New Zealand chef Peter Gordon was
appointed to demonstrate the creation of
the ‘Ultimate Lamb Sam’, available on the
website and to download for the video iPod.
National newspaper coverage was achieved
in You Magazine, The Sunday Telegraph,
Daily Express on Sunday and Daily Star on
Sunday. According to Meat New Zealand,
demand for lamb legs has grown in both
retail and the catering trade over the past
three years.
28. NEW BRAND FEEL FOR
SCOTTISH & SOUTHERN ENERGY
The utilities company needed a new
marketing identity to appeal to its mid
market and major business customers,
ranging from regional businesses to FTSE
100 firms. After an analysis of the existing
material, Freshwater Creative developed a
new core design and brand feel, working
with the existing logo and brand colours. A
vibrant theme was conceived that would
reflect the work Scottish & Southern does
and appeal to a diverse target market.
Working with Freshwater Wales, the
brochures were completely rewritten and
the design team also came up with creative
ideas for adverts, corporate stationery,
newsletters brochures and exhibition
material.
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28 Financial and business highlights
Freshwater UK Annual Report 06/07   17
Case Studies
29. AWARD-WINNING WEBSITE
FOR MEADGATE
Freshwater Creative and Freshwater Wales
have worked with Meadgate Homes for
several years on the full range of its
marketing activity, from brochures and
branding for each development to media
relations to help drive sales. Following the
appointment of a new sales & marketing
director, Meadgate wanted a major overhaul
of its website as part of a campaign to
revamp the company’s entire marketing
strategy. 
An audit of the existing Meadgate website by
Freshwater found that it was difficult to
navigate and hard to find important
information. The team advised that a simple
approach would make it easier for potential
homebuyers to find what they were looking
for and better promote the range and quality
of Meadgate’s houses. Freshwater Wales
drafted new copy and Freshwater Creative
redesigned the entire site. The result was an
eye-catching and uncluttered look that gives
a taste of the lifestyle a Meadgate home
offers and focuses on the most important
factor to consider when buying a home –
location. The website also won a silver in the
Best Website category at the CIPR Cymru
New Pride Awards.
30. A NATIONAL CONTRACT
AWARDED BY THE
ENVIRONMENT AGENCY
The Environment Agency has been working
with Freshwater’s media buying division for
the last eight years, gaining preferential rates
and placing legal and public notices in the
press in Wales and other regions. In 2007,
Freshwater was appointed to handle the
UK-wide media buying for The Environment
Agency’s rod and line fishing licence duties
for 2008 to 2011. Freshwater Creative’s
media buying experts placed adverts in
publications ranging from The Cornishman
to The Sun, allowing The Environment
Agency to communicate with its widespread
and varied audiences.
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Chairman’s Statement &
Chief Executive’s Review Chairman’s statement
I am pleased to present to shareholders our first annual report and accounts as an AIM
listed company.  
The Group has delivered another outstanding set of financial results, with operating profit
growing by 114 per cent as a result of a combination of acquisitions, organic growth and
efficiency improvements. 2006-07 was our seventh consecutive year of profitable growth
since incorporation.
Our strategy of building a focused and integrated group under a single brand through
selected acquisitions and organic growth continues to pay off. The results reflect both
earnings-enhancing additions to our operations and the benefits of cross-selling, combined
selling and efficiency gains from integration. Above all, they reflect the continued success
of our entrepreneurial approach to meeting the needs of our markets.
Results
T urnover for the year was £6.54 million (2006: £4.12 million), an increase of 59 per cent
over the prior year as a result of organic growth of 7.7 per cent, a full year’s trading from
the four businesses acquired in 2005/06 and six months contribution from Attenborough
Saffron acquired in February 2007. Revenue (gross profit) increased by 65 per cent to
£4.66 million (2006: £2.82 million). Earnings before interest, tax, depreciation and
amortisation were £1.14 million (2006: £0.58 million). Operating profit margins as a
percentage of revenue increased to 21.8 per cent (2006: 16.9 per cent). Profit before
taxation increased by 111 per cent to £0.92 million (2006: £0.44 million).
Basic earnings per share were 9.66p (2006: 6.10p), an increase of 58 per cent and fully
diluted earnings per share rose by 55 per cent to 9.48p (2006: 6.10p). 
We continue to see strong cash generation by the Group, with net cash flow from
operating activities of £0.81m in the year (2006: £0.60m). This coupled with our other
available funds, makes us well placed to finance growth going forward.
Dividend
The Board is recommending a final dividend of 1.5145p taking the total to 2.98p for the
year, an increase of 22 per cent on the prior year. This is in line with our progressive
dividend policy, and the dividend was covered 2.5 times by earnings. The dividend will be
paid on 10 January 2008 to shareholders on the register on 14 December 2007. 
Financing
On behalf of the Board, I would like to welcome the new investors who showed
confidence in Freshwater’s strategy by supporting the placing which raised £4m before
expenses as part of the Group’s admission to AIM on 16 July 2007. I would also like to
thank those who invested in our final fund-raising as a private company, which raised
£0.44m in January-February 2007 taking the total equity investment prior to joining AIM
to £2.2m.
On top of the aggregate £6.2m in equity investment, we have also negotiated a £2.2m
banking facility with Royal Bank of Scotland.
Operating profit grew 
114% to 
£1.02m
20 Freshwater UK Annual Report 06/07   
Bart Haines
Chairman’s statement Chairman’s statement (continued)
Board and Employees
I took over the chair midway through the year from David Howell, who held the post for
three years and helped steer the Group through a period of very rapid growth, including
seven acquisitions.  David continues on the Board as a non-executive director. 
Ken Tilley, our vice chairman and also a non-executive director, intends to step down from
the Board at the Annual General Meeting on 24 January 2008. The Board would like 
to take this opportunity to express our appreciation to him for his contribution over 
the last five years.  He will continue to be involved as Company Secretary with effect from
the AGM.  
Baroness Cohen of Pimlico, also a non-executive director of the London Stock Exchange
plc, was appointed to the Board on 1 June 2007 and now chairs our Audit Committee. 
Following the acquisition of Leeds-based Lynx Public Relations on 1 November 2007 and
of Waterfront Public Affairs and the Waterfront Conference Company on 2 December
2007, the Group now employs 118 people all of whom are contributing to the
implementation of our strategy.  
The Board is committed to ensuring they share in the Group’s success through our
progressive approach to rewards including share options, bonuses, pensions and salaries.
Outlook
Since 31 August 2007, we have been trading in line with expectations, and the two latest
acquisitions - Lynx and Waterfront - have added further regional and specialist strength to
the Group.
While we are aware of the potential threats to global economic growth, we are still
experiencing robust market conditions  and  we have an excellent spread in terms of both
business offering and client base, making the Group resilient to the impact of any slow
downs that may occur in the economy. As a result, we are confident of the prospects of
the Group and of making further progress in the year to 31 August 2008. 
Bart Haines
Chairman
12 December 2007
The Group now 
employs
118
people
Freshwater UK Annual Report 06/07   21
Chairman’s statement Chief Executive’s Review
Freshwater UK made considerable progress in 2006-07 towards its goal of building a
substantial PR-led marketing group combining a regional network with specialist and
sectoral expertise.
During the year, the Group transformed itself into a public company and secured
admission to AIM in July 2007 through a placing that raised £4m before expenses to fund
further growth.  
The year also saw a very strong trading performance with turnover rising 59 per cent to
£6.54m, revenue (gross profit) rising 65 per cent to £4.66m and operating profit rising 114
per cent to £1.02m.
The large increases in turnover and revenue were achieved by a combination of:
� Organic growth of 7.7 per cent in the businesses that were in the Group at the start of
the previous financial year (2005-06)
� A full-year’s trading from the four businesses acquired in 2005-06, all of which were
successfully integrated under the Freshwater brand during 2006-07
� A contribution of six months’ trading from Attenborough Saffron, a leading London-
based consumer agency
At the same time, the Group has delivered increases in profit margins, taking them to
among the best in the PR industry.  As a percentage of revenue, operating profit grew from
16.9 per cent to 21.8 per cent and EBITDA grew from 20.7 per cent in 2005-06 
to 24.6 per cent in 2006-07, ahead of our key performance indicator (KPI) target of 
23 per cent.  
This outstanding profit performance was underpinned by higher productivity, with average
revenue per full time employee rising 16 per cent from £61,373 to £70,963 and EBITDA
per full time employee rising 38 per cent from £12,681 to £17,443.
Strategy
Freshwater is now beginning to reap the benefits of its strategy of creating an integrated
Group, trading under one brand and offering a single point of contact for regional and
specialist PR and marketing services.  
Our model provides considerable scope for growth through cross-selling to existing
clients, economies of scale in our own marketing activity and the ‘combined’ selling of
diverse services and expertise to new clients.  We have also kept overheads low by basing
two-thirds of our staff outside London and centralising back office and Group functions 
in Cardiff.
The Group’s aim is to become Britain’s leading regional and specialist PR network through
organic growth and earnings-enhancing acquisitions.
We already have strong operations in Wales, Scotland and the English regions and
substantial specialist expertise in technology, healthcare, education, consumer, property,
leisure, retail, utilities and the public sector. Our PR and communications offering is
enhanced by teams offering creative, digital and training services.  
The market for agency PR services in the UK was estimated to be worth more than £1.2bn
in 2005 (Chartered Institute of Public Relations) and has seen sustained and substantial
growth every year since 2003. We believe that PR will continue to play a growing role as
media and communication channels become more diverse and technology changes make
them more accessible. PR is less vulnerable to cyclical factors than conventional advertising
and other marketing services, and the Freshwater business model, with its diverse client
base across many regions and sectors, is particularly robust.
Chief Executive’s Review
22 Freshwater UK Annual Report 06/07   
EBITDA per full time
employee grew 
38%
Steve Howell Chief Executive’s Review (continued)
Acquisitions
The acquisition of Attenborough Saffron on 28 February 2007, which had a turnover in the
11 months prior to completion of £2.1m, was our largest to date and puts Freshwater
among the market leaders in consumer PR.
Our policy is to acquire well-run businesses with a history of profitable trading led by
principals who share the Group’s vision and want to participate in implementing our
strategy. We are continuing to look at a variety of acquisition options that fit our strategy
in one or more of the following ways:
� Expansion into new regions and greater market share in regions where Freshwater
already has a strong presence
� The addition of new specialisms and sectors
� Expansion of existing specialisms to achieve market leading positions
� New marketing services that enhance and complement the PR offering
Our formula for acquisitions is financially prudent and minimises risk while incentivising
performance.
Freshwater’s strategy also provides for incremental and gradual expansion into overseas
markets, both organically and through acquisitions and joint ventures that fit our strategy
and deliver synergies with existing operations.   
On 1 November 2007, we acquired Lynx Public Relations in Leeds, which adds regional
strength in the north of England and specialist expertise in the utility sector and the
growing field of community relations. Its clients include; National Grid, Halifax [a division
of HBOS], Northern Electric Distribution Limited, Yorkshire Electricity Distribution and
York-based Beacon, the purchasing arm of Best Western Hotels and the UK’s largest
purchasing consortium for the independent hospitality industry. 
The total maximum consideration of the acquisition will be £1.25m. This comprises an
initial consideration of £0.45m, which is satisfied by £0.35m in cash and by the issue of new
Freshwater shares. In addition, a maximum payment of £0.15m will be made for the net
assets of Lynx at completion and a further deferred consideration of a maximum of £0.65m
will be made dependent on the profit performance of Lynx in the 12 months following
completion.
On 2 December 2007, we acquired the Waterfront Partnership and the Waterfront
Conference Company in London and Brussels. Waterfront will contribute public affairs
expertise to the Group, particularly in the transport sector, and a well-established
conference business with experience of organising up to 40 events annually at venues
across Britain.  Waterfront’s clients include the Association of T rain Operating Companies,
Civil Aviation Authority, Go Skills, Mersey T ravel, D P World, Port of London Authority,
UK Major Ports Group, Macquarie, GNER and Bristol Port Company. 
The combined businesses, which had unaudited turnover of £2.07m and net profit before
tax of £0.29m in the year to 31 March 2007, were acquired for a total maximum
consideration of £2.245m. This comprises an initial consideration of £0.945m, which is
satisfied by £0.72m in cash and the issue of new Freshwater shares. The additional
deferred consideration will be subject to the profit performance of the two businesses in
the 15 months following completion.   
Acquisitions were
complemented by 
organic growth of
7.7%
Chief Executive’s Review
Freshwater UK Annual Report 06/07   23 Chief Executive’s Review (continued)
Clients 
Freshwater’s client roster grew from 239 in 2005-06 to 329 in 2006-07, with none
accounting for more than 3.5 per cent of revenue.
Major brands using our services include John Lewis, Lloyds TSB Insurance, Ryder Cup
Europe, Specsavers, Bellway, RBS, Morphy Richards, Waterford Wedgwood, Scottish &
Southern Energy, General Mills, Nivea Beauté, QVC and Edwards (formerly part of the
BOC group).
Public sector clients include the Environment Agency, London School of Economics,
Sheffield Hallam University, University of Birmingham, the Food Standards Agency, several
NHS regions and trusts, and the Welsh Assembly Government. 
Cross selling and combined selling is reflected in the fact that we provided more than one
service to 90 clients, including 18 of the top 20. We believe that the potential 
for broadening our partnerships with clients through meeting more of their marketing 
and communication needs is very significant, providing real potential for further growth
in revenues.
In 2006-07, we won a national award at the Chartered Institute of Public Relations’
President’s Grand Prix, for ‘Putting Newport on the Map', a campaign on behalf of
regeneration company Newport Unlimited.  The Midlands and Wales PR teams also won
one silver and three gold awards at the CIPR’s regional PRide awards, including the Grand
Prix for best overall campaign in Wales. 
Management
The Group has an integrated management team, many of whom benefit from a broad
business experience. Senior managers from each division meet with the executive
directors and group managers on a regular basis to discuss strategy, operational issues and
marketing and new business.
The Group team is responsible for finance and accounts, IT , human resources, corporate
communications, acquisitions and group marketing.  The Group also plays a co-ordinating
role on new business, particularly in relation to cross-selling and the ‘combined’ selling of
regional and specialist services.
All staff are incentivised through bonus schemes and share options.  In addition, a number
of senior managers hold shares by virtue of having been principals of acquired businesses
and some have also purchased shares.  
The Board and management are committed to building shareholder value. In 2006-07
basic earnings per share increased 58 per cent from 6.10p to 9.66p.
Outlook
Our markets remain buoyant and our strategy of offering an integrated PR and marketing
service across all our offices has helped win new business and increase the range of client
needs we can meet. 
Our strong cash position also means we are well placed to make further acquisitions in line
with the Group’s strategy outlined above.  
T rading in the first quarter of 2007-08 is in line with expectations and we expect to deliver
another progressive trading performance in the current financial year.  
Steve Howell
Chief Executive
12 December 2007
Cross selling and 
combined selling 
is reflected in the
fact that we provided 
more than one 
service to
90 
clients
(representing 58% 
of income) 
Chief Executive’s Review
24 Freshwater UK Annual Report 06/07    Operational
review Operational review 
Introduction
Freshwater made considerable progress during the year to 31 August 2007 in
implementing its strategy operationally, particularly in integrating the business behind a
single brand and positioning itself nationally as a provider of combined regional and
specialist services.
The businesses acquired in 2005-06 were all successfully brought under the Freshwater
name in the first half of 2006-07 and a co-ordinated new business drive scored several
successes at Group level. These included substantial contracts to handle the John Lewis
store opening programme and a nationwide roadshow for Dignity at Work, Europe’s
largest anti-bullying in the workplace initiative, co-funded by Unite the union and the
Department for Business, Enterprise and Regulatory Reform.
The Group has ten fee-earning teams functioning as separate profit centres: five regions
(Midlands, Northern, Scotland, Southern and Wales), three specialist PR teams
(Healthcare, Consumer and Technology) and two teams providing support services
(Creative and Academy).   
During the year, the total number of staff increased from 62 to 90, based in eight offices.
With the acquisition of Lynx and Waterfront since the end of the year, we now have 118
staff in 10 offices.
The Group continued to develop its human resources policies, with a strong focus on
incentives, training, team building and career development. We have experienced
recruitment problems in some specialisms, but these have been largely offset by the
development of existing staff and the success of our expanded and enhanced graduate
training scheme for which we had an abundance of applicants in 2007.    
The Group provided services to a total of 329 clients in 2006-07 drawn from a wide range
of sectors. The largest sectors by income were consumer and retail (29 per cent),
public sector (27 per cent), housing and property (15 per cent), professional services 
(12 per cent), and technology and industry (9 per cent).
The group delivered
services to 
329 clients 
Operational review
26 Freshwater UK Annual Report 06/07    Operational review (continued)
Regional network
Freshwater’s five regions - Wales, Scotland, Midlands, Northern and Southern - employ 30
staff, mostly CIPR qualified fee earners, based in six offices. In aggregate, our regional
operations grew organically in the year by 5.5 per cent on a like-for-like basis to produce
combined revenue (GP) of £1.86m. The regional teams have their own portfolios of
clients, while also offering a single network to provide a seamless service to organisations
needing support in several regions at the same time.
The Birmingham-based Midlands team has significant specialist expertise in property and
professional services, as well as clients in automotive, education, health, manufacturing,
retail and utilities. The consultancy had a good second half after winning several major new
accounts, including Midland Heart, one of the UK’s leading housing associations, and
Castlemore Securities. At the very end of the year, the team won a competitive pitch,
jointly with Freshwater Creative, to provide full service marketing support for Ironstone,
a major new development near T elford by a consortium of the three largest house builders
in the UK.
The Northern region had a very successful first full year in the group winning major
contracts to promote the Barnsley Civic and South Yorkshire Open Forum jointly with
Freshwater Creative, as well as a number of new contracts with existing clients such as
Sheffield Hallam University and Sheffield City Council. It is also taking the lead role in work
for John Lewis relating to the Liverpool, Sheffield and Leicester store openings.  The
acquisition of Lynx Public Relations in Leeds and the planned opening of an office in
Liverpool will make the Northern region a focal point for growth in the Group in 
2007-08.    
Operating from Bristol and London, the Southern team scored a major success in being
awarded a contract to deliver, with support from the whole regional network, a UK-wide
roadshow for Dignity at Work. The team acts as the overall co-ordinator for the John
Lewis’s store opening programme across the country, as well as leading on the opening of
the Cambridge store. Freshwater Southern also successfully provided PR services in
connection with the opening in July of Puxton Park, a new multi-million pound farm-based
leisure attraction near Bristol.
The Group opened a new 2,000sq ft office at Skypark in the centre of Glasgow in May
2007 replacing the Scotland team’s two existing offices in Edinburgh and at Bearsden just
outside Glasgow. The team is a market leader in housing and property PR and has also
begun to diversify by gaining clients in retail, leisure and professional services.
Wales, Freshwater’s original business based in Cardiff, continues to be one of the most
successful and profitable divisions in the group. The region’s client base is very diverse,
including SMEs, professional firms, public sector bodies, retailers and housebuilders.
Among the additions to the portfolio in the year were Lloyds TSB, North East Wales
Institute in Wrexham and Visit Wales.
Regional revenue grew
organically by 
5.5%
Operational review
Freshwater UK Annual Report 06/07   27 Operational review (continued)
Specialist PR teams
The three specialist businesses (Consumer, Technology and Healthcare) delivered total
revenue of £2.26m in the year.  This comprises the first full year of trading from the three
acquisitions made in 2005-06 and a half year contribution from Attenborough Saffron.  
The teams employ a total of 36 staff and operate from offices in London and Romsey, 
near Southampton.
Consumer - The acquisition of Attenborough Saffron places Freshwater among the 
top ten agencies in consumer PR.  Attenborough Saffron is one of the oldest and best
known agencies in this sector and has a host of household names on its client roster,
including Nivea Beauté, New Zealand Lamb, Natuzzi, Waterford Wedgwood, Roberts
Radio and Jane Shilton. The acquisition of Attenborough Saffron gave the Group an
opportunity to concentrate London based consumer services under one roof.
Technology - The Technology team provides specialist PR consultancy in engineering,
electronics and IT . Formerly Black & White Communications, the business was successfully
integrated into the Freshwater brand this year. Its solid client base features long-standing
client relationships from manufacturing to software and high-tech spin-outs.  The client list
includes established international brands such as Emerson Process Management, Penny +
Giles and Morgan Advanced Ceramics, as well as emerging players Perpetuum, SPI Lasers
and iMeta.
Healthcare - A market leader in communication consultancy to clients in the public
healthcare sector, this division - formerly part of CLEAR, which was acquired on 1 June
2006 - specialises in public consultations about changes in healthcare services and issues
management.  Major projects in 2006-07 included work for the NHS in Hertfordshire, East
Sussex, Warwickshire, Bath, and Cornwall and the Isles of Scilly. This last project has been
shortlisted for the prestigious “Involvement to Impact” awards run by the NHS Centre for
Involvement. The team also won its first client for a new media analysis service it hopes to
roll out across the NHS.  
Specialist PR teams
delivered revenue of 
£2.26m
Operational review
28 Freshwater UK Annual Report 06/07   
CONSUMER
TECHNOLOGY
HEALTHCARE Operational review (continued)
Marketing support services
Freshwater is developing a portfolio of support services to complement its core 
PR business.  We currently offer a wide range of communications and marketing training, 
a full graphic design service, media buying and extensive expertise in digital media,
including podcasts, videos, DVDs, websites and e newsletters.  The services are grouped
into two divisions - Freshwater Academy and Freshwater Creative - which had a
combined income of £0.49m in the year to 31 August 2007.  
Freshwater Academy - Acquired as part of CLEAR, the training division was rebranded
during 2006-07 and sold across the Group using new marketing materials. This resulted in
training being sold to the clients of several other divisions, such as Morphy Richards, QVC
and Nord Anglia. Meanwhile, Academy continued to build its own client base, winning
contracts to deliver courses for the NHS Board Leadership Programme (a development
programme for chairs and non-executive directors in the NHS in London), the London
Organising Committee of the Olympic and Paralympic Games and NHS South West (the
strategic health authority covering the south west of England).  The latter was Academy’s
largest contract to date and involved providing comprehensive communication training for
approximately 70 senior NHS managers in the region.  In 2007-08, Academy will seek to
begin to regionalise its offering by locating part of its operation in Bristol.
Freshwater Creative - The team has enjoyed its most successful year to date, with
cross-selling to existing clients and combined selling with the PR teams playing a crucial
role in achieving a 39 per cent uplift in revenue. Major new business wins in the year
include Morphy Richards, Scottish & Southern Energy, Barnsley Metropolitan Council and
complete rebranding for the Golf Club Managers’ Association. The team offers media
buying and graphic design services, including a wide range of digital services such as
websites and e-newsletters.  
Freshwater Creative’s
revenue grew
39% 
Operational review
Freshwater UK Annual Report 06/07   29
CREATIVE Board of Directors
1. Bart Haines, Non-executive Chairman: Bart Haines was appointed to the Board in
2003. He spent 25 years working outside the UK, based in Brussels and the USA, with the
global silicon materials group Dow Corning, where he became European Vice President
and UK Managing Director. Key areas of his experience and expertise lie in acquisition and
change management. He also has experience in the public sector, having been a director
of South Glamorgan T raining and Enterprise Council (TEC) for three years before chairing
TEC South East Wales in 2000-2001. He is a governor of further education provider Barry
College and sits on the audit and finance committees of Cardiff-based science discovery
centre, T echniquest.
2. Steve Howell, Chief Executive: Steve Howell founded the agency in 1997 and has led
the development of the Group throughout. His previous experience included a period at
the BBC where he was a producer and reporter in radio and television. He had previously
worked for national and regional newspapers and as a public relations officer in local
government. He has been responsible for developing Freshwater’s growth strategy and
delivering a series of successful acquisitions. He was a governor of the University of Wales
Newport from 2005 to 2007 and is the PR representative in Wales of the European Ryder
Cup Board.
3. Haydn Evans, Finance Director: Haydn Evans was appointed to the Board in
December 2003. He has 15 years experience in the telecommunications sector having
worked for Mitel Networks Corporation and for Nortel Networks Corporation in the UK
and Paris. Immediately prior to joining Freshwater he was a finance leader within
Canadian-based Nortel, heading a 20-strong business team in the UK, Switzerland and
T oronto and reporting directly to the vice president of finance. He has been responsible
for the due diligence for and financial integration of the seven acquisitions undertaken by
Freshwater since his appointment.
4. Ken Tilley, Non-executive Vice-Chairman: Ken Tilley was appointed to the Board in
2002 and has a business career spanning almost 35 years. After training as a quantity
surveyor he became the founder director of Twyn Construction in 1973, a successful
building contractor operating throughout South Wales. He retired from the
business in 1998 having completed a management
buy-out, but remained as a Director and
Company Secretary until 2005. In addition
he was chairman of a group of privately-
owned companies involved in motor
vehicle distribution between 1983
and 1993 when the group was
sold. Having become a
magistrate in 1979 he is now 
a senior chairman on the
Gwent Bench.
Listing on AIM raised  
£4m
before expenses 
3
4
8
5
6
7
Board of Directors
30 Freshwater UK Annual Report 06/07    5. Baroness Janet Cohen, Non-executive Director: Baroness Cohen of Pimlico,
appointed to the Board in June 2007, is a non-executive director of the London Stock
Exchange (since 2001) and a former BBC Governor (1994 - 1999). She is also a non-
executive director of Management Consulting Group plc and on the joint board 
of the Borsa Italiana after the merger with the London Stock Exchange in September 2007.
A life peer since 2000, Baroness Cohen chairs Sub Committee A of the European 
Union Committee, which deals with EU financial matters, and sits on the Tax Law 
Rewrite Committee.
6. David Howell, Non-executive Director: David Howell was appointed to the Board in
2004 and served as chairman until March 2007. He is the managing director of Hillco
Property Services Limited (which trades as Profile Consultancy), a specialist commercial
property consultancy providing service charge, property management and building
consultancy services to many of the UK’s FTSE 100 companies. He is also managing
director of privately-owned Hillco Investments Limited, which holds a diverse portfolio of
assets and investments.
7. Edward Carter, Executive Director: Edward Carter, a chartered accountant, was
appointed to the Board in March 2006. He was for many years a partner at Ernst & Young,
the global business advisers. He also played a key role in working on and with the boards
of various companies as a consultant or non-executive director prior to being a joint
founder of Quantum PR plc, which was acquired by Freshwater in June 2005. He is an
experienced PR consultant specialising in business-to-business, professional services and
financial sectors. He is also a non-executive director of two privately owned businesses -
Grove Industries Limited and Owl Optical Limited.
8. John Underwood, Business Development Director: John Underwood was appointed
to the Board in June 2006. In the 1980s, he was an award-winning TV reporter 
and presenter and worked for the BBC, ITV and Channel Four before 
becoming director of communications for the Labour Party. He founded 
Clear Communications in 1991 and built it into one of the leading
communication agencies in the healthcare sector. He is also a non executive
director of Verita, the trading name of The Inquiry Consultancy Limited, a
specialist management consultancy.
T otal dividends increased 
22% to 
2.98p
1
2
Board of Directors
Freshwater UK Annual Report 06/07    31 The Directors present their report and the audited financial statements for the year ended 31 August 2007.
Principal activities 
Freshwater Group ('the Group') comprises Freshwater UK Plc (the ‘Company') and its subsidiary undertakings. A list of the Company’s
subsidiaries is provided in note 12 to the financial statements. At the start of the year, the Company transferred its remaining public relations
and marketing related trading activities to Freshwater Creative Limited, Freshwater Southern Limited and Freshwater Wales Limited. 
The Company has subsequently operated as a holding company. The primary activity of all other Group members during the year was the
provision of public relations and marketing services. 
Business review 
A review of the Group’s business including likely future developments therein is to be found in the Chief Executive’s Review and the
Operational Review. Financial and, where appropriate, other key performance indicators ('KPI') have been used to facilitate the understanding
of the development, performance and position of the Group’s business. The principal risks faced by the Group can be categorised as follows:
Economic
We are a UK based organisation, and a general economic downturn in the UK could have an adverse affect on our revenue. T o mitigate this
risk, we offer a broad range of services to a wide range of sectors so that we are not overly dependent in any one area.
Client Loss
During the financial year we billed 329 clients, with none accounting for more than 3.5% of our total revenue. Our client relationships are
fundamental to us, so we would always seek to replace them, but our wide base significantly de-risks the impact of any individual loss.
Staff Loss
As a people based business our staff play a critical role in our client offering, and the loss of key staff could be a risk to client relationships.
T o offset this risk, we have developed a team based approach to client service, so that no one member of staff is the sole point of contact
with any given client. We also look to retain all staff with a share option scheme, and we also ensure all staff are covered by employment
contracts with appropriate levels of lock-ins and restrictive covenants.
Results and dividends
The Group’s results are on page 39. The Directors propose the payment of a final ordinary dividend of 1.5145p (2006:1.4p) per qualifying
share to qualifying shareholders on the register on the dividend record date. With the interim dividend of 1.4655p per qualifying share
(2006:1.05p) paid during the financial year this will produce a total ordinary dividend of 2.98p per qualifying share. The provided figures
reflect the effects of the 2:1 split in June 2007 under which each authorised and allotted 20p ordinary share was subdivided into two 10p
ordinary shares. See note 22 to the financial statements. The financial statements do not reflect the final proposed dividend which will be
accounted for in shareholder’s equity as an appropriation of retained earnings in the year ending 31 August 2008. 
Post balance sheet events 
On 1 November 2007, the Company acquired Lynx Public Relations Limited. On 2 December 2007, the Company acquired both the
Waterfront Conference Company Limited and the business of the Waterfront Partnership. Note 27 to the financial statements provides
information on these transactions which are considered material non-adjusting events.  
Directors’ report
32 Freshwater UK Annual Report 06/07   
Directors’ report 
for the year ended 31 August 2007 Directors 
The following individuals served as Directors of the Company during the year:
During the year D B Haines took on the role of Chairman from D Howell who continues to serve as a non-executive director. 
The Company’s Directors have remained unchanged since the year end with the exception of the appointment of Marie Louise Windeler as
a Non-executive Director on the 11 December 2007.
Directors’ interests
The interests of those individuals who were Directors of the Company at the end of the financial year in the shares and debentures of the
Company at the year end were:
The 2006 comparative data reflects the effects of the 2:1 split in June 2007 under which each authorised and allotted 20p ordinary share was
subdivided into two 10p ordinary shares. See note 22 to the financial statements.
All interests were beneficial and include the interests of the Directors' immediate families. S B Howell's and J H Evan's interests include their
interests in ordinary shares held by the Freshwater UK Pension Fund. S B Howell's interest additionally includes his interest in ordinary shares
held by Isca Mercatura Limited. D Howell's interest includes his interest in ordinary shares held by Hillco Investments Limited and the HLM
pension fund. J M Underwood's interest includes his interest in ordinary shares held by the Underwood Pension T rust Mattioli SIPP . 
Other than as above none of the Company's Directors at the end of the financial year had any interest in the shares or debentures of Group
members. The holdings of the Company's Directors in the shares or debentures of Group members have remained unchanged since the 
year end.
J H Evans is interested in options to subscribe for 24,000 ordinary shares in the Company as a result of entering a series of share option
contracts in previous financial years. None of the other Directors at the end of the financial year were interested in options over shares or
debentures in Group members at the year end. J H Evans exercised no options during the financial year. This has remained the case since
the year end.
Directors’ report
Freshwater UK Annual Report 06/07   33
Appointed Position
E G Carter 30 Mar 2006 Executive 
Baroness Cohen of Pimlico 01 Jun 2007 Non-executive
J H Evans 10 Dec 2002 Finance Director
D B Haines 22 Dec 2003 Chairman
D Howell 26 Feb 2004 Non-executive
S B Howell 25 Aug 2000 Chief Executive Officer
K J Tilley 01 Oct 2002 Non-executive
J M Underwood 01 Jun 2006 Executive
No. of ordinary shares held at % of ordinary share capital held 
31 August 2006 31 August 2007 31 August 2006 31 August 2007
E G Carter 60,600 65,000 1.4% 0.6%
Baroness Cohen of Pimlico - 29,411 - 0.3%
J H Evans 4,000 15,770 0.1% 0.1%
D B Haines 150,000 160,000 3.4% 1.4%
D Howell 600,000 700,000 13.7% 6.3%
S B Howell 1,194,352 1,209,780 27.2% 10.8%
K J Tilley 363,000 372,000 8.3% 3.3%
J M Underwood 312,400 312,400 7.1% 2.8%
Directors’ report 
for the year ended 31 August 2007 (continued) Directors’ report
34 Freshwater UK Annual Report 06/07   
Substantial shareholdings
In addition to the Directors detailed above the following individuals and entities were interested in 3% or more of the ordinary share capital
of the Company at 31 August 2007:
No. of ordinary shares % of ordinary share capital 
held at 31 August 2007 held at 31 August 2007
Finance Wales Investments 1,414,284 12.7%
IBIS Media VCT No 1 821,000 7.4%
Charles Stanley & Co 690,000 6.2%
Close Brothers Group Plc 640,000 5.7%
Herald Investment Management 588,000 5.2%
Singer & Friedlander 500,000 4.5%
Williams de Broe 448,100 4.0%
Johnathan Smith 423,982 3.8%
Calculus Capital 350,000 3.1%
Brewin Dolphin Securities 340,000 3.0%
There have been no significant changes since the year end. 
Creditor payment policy
The Group agrees payment terms with its suppliers when it enters into binding purchase contracts. The Group seeks to abide by the payment
terms agreed with suppliers whenever it is satisfied that the supplier has provided the goods or services in accordance with the agreed terms
and conditions. The Group seeks to treat all of its suppliers fairly. At the end of the financial year creditor days (defined as (trade payables /
cost of sales) / 365) were 68 days (2006: 82 days).
Political and charitable donations
During the year the Group made charitable donations of £1,000 (2006: £1,000). The Political Parties, Elections and Referendums Act 2000
(the 'Act') requires disclosure of any donations to an EU political organisation (including a registered political party in the UK) or EU political
expenditure in excess of £200. The terms 'donation', 'EU political organisation' and 'EU political expenditure' are given broad definitions by
the Act.  Whilst the Group does not make donations to political parties within the normal meaning of that expression, as part of its normal
work on behalf of clients and as part of its own marketing, the Group needs to attend or sponsor events which are organised by political
parties or other political organisations for which a charge is made. During the year, the Group made a payment for an attendance cost that
fell within the definition of political donation introduced by the Act totalling £5,000 to the Labour Party. 
Financial instruments
A commentary on the financial instruments held by the Group and the Group's exposure to credit, interest rate and liquidity risk is provided
in note 15 to the financial statements.
Corporate governance
The Company is not required to comply with the Combined Code on Corporate Governance issued in July 2003 by the Financial Reporting
Council ('the 2003 FRC Combined Code') and accordingly does not report on how it has applied the principles therein or on the extent to
which it has complied with the provisions therein throughout the period. The Company's Directors are however committed to ensuring a
high standard of corporate governance that reflects the recommendations of the 2003 FRC Combined Code in a manner proportionate to
the Group's size. An insight into the Company's current corporate governance practice is provided below.
Directors’ report 
for the year ended 31 August 2007 (continued) Directors’ report
Freshwater UK Annual Report 06/07   35
Corporate governance (continued)
Board of Directors
The members of the Company's current Board of Directors ('the Board') are listed above. The Board includes both Executive and 
Non-executive Directors. The roles of Chairman and Chief Executive Officer are held by separate individuals. The Board meets regularly
and its responsibilities include formulating, reviewing and approving strategy, budgets, acquisitions, capital expenditure and senior personnel
appointments.  
Audit Committee
An Audit Committee was established upon the Company being admitted to the Alternative Investment Market as a standing committee
of the Board.  The following individuals served as members during the year:
The Audit Committee will meet at least three times a year and has since its inception been chaired by Baroness Cohen. The Audit
Committee's responsibilities include monitoring the integrity of the Company's and the Group's financial statements, reviewing the external
auditor's independence, objectivity and effectiveness and making recommendations to the Board in relation to the appointment,
reappointment and removal of the external auditor.   
Remuneration Committee
A Remuneration Committee has been in existence for three years as a standing committee of the Board. However it was given new terms
of reference upon the Company being admitted to the Alternative Investment Market. The following individuals were appointed to the
Remuneration Committee on admission to the AIM:
The Remuneration Committee has since its inception been chaired by D B Haines. Its responsibilities include reviewing the performance of
the Directors and setting the scale and structure of their remuneration and the basis of their service agreements and appointment with due
regard to the interests of shareholders. The remuneration committee also determines the bonuses to be paid to Executive Directors. 
Attendance record 
The number of full Board meetings and committee meetings attended by each Director during the year was:
Board Audit Remuneration
meetings Committee Committee
E G Carter 7 (8) - -
Baroness Cohen of Pimlico 4 (4) 1 (1) -
J H Evans 8 (8) - -
D B Haines 7 (8) - 1 (1)
D Howell 8 (8) 1 (1) 1 (1)
S B Howell 8 (8) - -
K J Tilley 7 (8) 1 (1) 1 (1)
J M Underwood 6 (8) - -
Figures in brackets indicate the maximum number of meetings in the period in which the Director was a Board or a Committee member. 
Appointed
Baroness Cohen of Pimlico 16 Jul 2007
D Howell 16 Jul 2007
K J Tilley 16 Jul 2007
Appointed
Baroness Cohen of Pimlico 16 Jul 2007
D B Haines 16 Jul 2007
D Howell 16 Jul 2007
K J Tilley 16 Jul 2007
Directors’ report 
for the year ended 31 August 2007 (continued) Directors’ report
36 Freshwater UK Annual Report 06/07   
Going concern
After making enquiries, the Directors, at the time of approving the financial statements, have determined that there is reasonable expectation
that the Company and the Group have adequate resources to continue operating for the foreseeable future. For this reason, the Directors
have adopted the going concern basis in preparing the financial statements. 
Auditors and disclosure of information to auditors 
As far as the Directors are aware there is no relevant audit information of which the Company's auditors are unaware and they have taken
all the steps that they ought to have taken as Directors in order to make themselves aware of any relevant audit information and to establish
that the Company's auditors are aware of that information.
The auditors, PKF (UK) LLP , have indicated their willingness to continue in office, and a resolution that they be re-appointed will be proposed
at the Annual General Meeting.
This report was approved by the Board on 12 December 2007 and signed on its behalf by:
J H Evans 
Finance Director
Directors’ report 
for the year ended 31 August 2007 (continued) Statement of directors’ responsibilities
Freshwater UK Annual Report 06/07   37
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations. 
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected 
to prepare the financial statements in accordance with International Financial Reporting Standards as adopted by the European Union. 
The financial statements are required to give a true and fair view of the state of affairs of the company and the group and of the profit or loss
of the group for that period. In preparing these financial statements the directors are required to:
� select suitable accounting policies and then apply them consistently;
� make judgments and estimates that are reasonable and prudent;
� prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue
in business.
The directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position
of the company and the group and enable them to ensure that the financial statements comply with the Companies Act 1985. They are also
responsible for safeguarding the assets of the group and hence for taking reasonable steps for the prevention and detection of fraud and other
irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website.
Legislation in the United Kingdom governing the preparation and dissemination of the financial statements and other information included in
annual reports may differ from legislation in other jurisdictions.
Statement of directors’ responsibilities
for the year ended 31 August 2007 Independent auditors’ report to the members of Freshwater UK Plc
38 Freshwater UK Annual Report 06/07   
We have audited the group and parent company financial statements ('the financial statements') of Freshwater UK Plc for the year ended 
31 August 2007 which comprise the consolidated income statement and the consolidated and company balance sheets, cash flow statements,
statements of changes in equity 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 by 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 have been properly prepared in accordance
with the Companies Act 1985. We also report to you whether in our opinion the information given in the directors' report is consistent with
the financial statements. The information in the directors' report includes that specific information presented in the Chief Executive’s Review
and Operational Review that is cross referenced 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 Financial and Business Highlights, the case studies, the Chairman’s Statement, the Chief Executive’s
Review, the Operational Review, Board of Directors and the Directors’ Report. We consider the implications for our report if we become
aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any
other information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. 
An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes
an assessment of the significant estimates and judgments made by the directors in the preparation of the financial statements, and of whether
the accounting policies are appropriate to the group's and company's circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations 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 August 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 August 2007;
� the financial statements have been properly prepared in accordance with the Companies Act 1985 and
� the information given in the directors' report is consistent with the financial statements.
PKF (UK) LLP
Registered auditors
Cardiff, UK
12 December 2007
Independent auditors’ report to the members of
Freshwater UK Plc Consolidated income statement
Freshwater UK Annual Report 06/07   39
Consolidated income statement
for the year ended 31 August 2007
2007 2006
Note £ £
TURNOVER 6,535,746 4,122,480
REVENUE 4,655,145 2,817,009
Administrative expenses (3,638,030) (2,341,861)
OPERATING PROFIT 1,017,115 475,148
Finance income 7 38,759 9,493
Finance costs 7 (135,173) (48,635)
PROFIT BEFORE INCOME TAX 4 920,701 436,006
Income tax expense 8 (270,415) (146,864)
PROFIT FOR THE YEAR 650,286 289,142
Earnings per share for profit attributable to the equity holders of the Company during the year
Basic earnings per share 25 9.66p 6.10p
Diluted earnings per share 25 9.48p 6.10p
The notes on pages 46 to 76 are an integral part of these financial statements.
The Company has elected to take the exemption under section 230 of the Companies Act 1985 to not present the parent company profit
and loss account. The Company's profit for the financial year was £187,928 (2006 £534). Consolidated balance sheet
40 Freshwater UK Annual Report 06/07   
Consolidated balance sheet
as at 31 August 2007
2007 2006
Note £ £
ASSETS
Non-current assets
Property, plant and equipment 9 1,011,175 868,567
Intangible assets 10 5,336,122 2,888,209
6,347,297 3,756,776
Current assets
Inventories 14 55,434 60,060
T rade and other receivables 16 1,608,987 1,189,670
Derivative financial instruments 15 700 -
Cash and cash equivalents 17 3,570,459 848,772
5,235,580 2,098,502
T otal assets 11,582,877 5,855,278
EQUITY
Issued equity capital 22 1,115,300 569,059
Share premium 5,266,624 1,607,104
Other reserves 720,000 150,855
Retained earnings 970,391 490,934
8,072,315 2,817,952
LIABILITIES
Non-current liabilities
Long term borrowings 19 1,296,656 1,117,486
Liability component of preference shares - 167,300
Deferred tax liabilities 21 38,070 24,836
1,334,726 1,309,622
Current liabilities
T rade and other payables 18 1,554,624 1,435,920
Short-term borrowings 19 344,597 60,793
Liability component of preference shares - 11,700
Current tax liabilities 276,615 219,291
2,175,836 1,727,704
T otal liabilities 3,510,562 3,037,326
T otal equity and liabilities 11,582,877 5,855,278
The notes on pages 46 to 76 are an integral part of these financial statements. The financial statements were approved and authorised for
issue by the Board and were signed on its behalf on 12 December 2007.
J H Evans                     S B Howell
Director                      Chief Executive Officer Consolidated balance sheet
Freshwater UK Annual Report 06/07   41
Company balance sheet
as at 31 August 2007
2007 2006
Note £ £
ASSETS
Non-current assets
Property, plant and equipment 9 843,748 810,470
Intangible assets 10 63,871 68,182
Investments 11 6,244,195 3,262,064
7,151,814 4,140,716
Current assets
Inventories 14 3,373 55,821
T rade and other receivables 16 1,072,363 1,194,744
Derivative financial instruments 15 700 -
Cash and cash equivalents 17 3,300,100 650,997
4,376,536 1,901,562
T otal assets 11,528,350 6,042,278
EQUITY
Issued equity capital 22 1,115,300 569,059
Share premium 5,266,624 1,607,104
Other reserves 720,000 150,855
Retained earnings 155,739 138,640
7,257,663 2,465,658
LIABILITIES
Non-current liabilities
Long term borrowings 19 1,296,656 1,117,486
Liability component of preference shares - 167,300
Deferred tax liabilities 21 33,440 24,000
1,330,096 1,308,786
Current liabilities
Bank overdraft 17 912,166 1,168,177
T rade and other payables 18 1,619,068 982,242
Short-term borrowings 19 344,597 60,793
Liability component of preference shares - 11,700
Current tax 64,760 44,922
2,940,591 2,267,834
T otal liabilities 4,270,687 3,576,620
T otal equity and liabilities 11,528,350 6,042,278
The notes on pages 46 to 76 are an integral part of these financial statements. The financial statements were approved and authorised for
issue by the Board and were signed on its behalf on 12 December 2007.
J H Evans                     S B Howell
Director                      Chief Executive Officer Consolidated statement of changes in equity 
42 Freshwater UK Annual Report 06/07   
Consolidated statement of changes in equity 
for the year ended 31 August 2007
Preferred 
Note Ordinary ordinary Share Share Other Retained
shares shares Premium option reserves earnings
££ £ £ £ £
At 1 September 2005 306,200 80,000 367,866 1,630 226,250 288,346
Issue of ordinary shares 22 132,859 - 898,086 - - -
Issue of preferred shares 22 - 50,000 341,152 - - -
Share option reserve 24 - - - 6,123 - -
Movement in contingent consideration 13 - - - - (83,148) -
Profit for the year - - - - - 289,142
Dividends 23 - - - - - (86,554)
At 31 August 2006 439,059 130,000 1,607,104 7,753 143,102 490,934
Issue of ordinary shares 22 64,233 - 491,839 - - -
Issue of preferred shares 22 - 11,428 88,570 - - -
Conversion of preferred shares 22 141,428 (141,428) 179,000 - - -
Issue of ordinary shares (IPO) 22 470,580 - 2,900,111 - - -
Share option reserve 24 - - - 12,247 - -
Movement in contingent consideration 13 - - - - 556,898 -
Profit for the year - - - - - 650,286
Dividends 23 - - - - - (170,829)
At 31 August 2007 1,115,300 - 5,266,624 20,000 700,000 970,391 Company statement of changes in equity 
Freshwater UK Annual Report 06/07   43
Company statement of changes in equity 
for the year ended 31 August 2007
Preferred 
Note Ordinary ordinary Share Share Other Retained
shares shares Premium option reserves earnings
££ £ £ £ £
At 1 September 2005 306,200 80,000 367,866 1,630 226,250 224,660
Issue of ordinary shares 22 132,859 - 898,086 - - -
Issue of preferred shares 22 - 50,000 341,152 - - -
Share option reserve 24 - - - 6,123 - -
Movement in contingent consideration 13 - - - - (83,148) -
Profit for year - - - - - 534
Dividends 23 - - - - - (86,554)
At 31 August 2006 439,059 130,000 1,607,104 7,753 143,102 138,640
Issue of ordinary shares 22 64,233 - 491,839 - - -
Issue of preferred shares 22 - 11,428 88,570 - - -
Conversion of preferred shares 22 141,428 (141,428) 179,000 - - -
Issue of ordinary shares (IPO) 22 470,580 - 2,900,111 - - -
Share option reserve 24 - - - 12,247 - -
Movement in contingent consideration 13 - - - - 556,898 -
Profit for the year - - - - - 187,928
Dividends 23 - - - - - (170,829)
At 31 August 2007 1,115,300 - 5,266,624 20,000 700,000 155,739 Consolidated cash flow statement
44 Freshwater UK Annual Report 06/07   
Consolidated cash flow statement
for the year ended 31 August 2007
2007 2006
Note £ £
Operating profit 1,017,115 475,148
Depreciation of property, plant and equipment 9 99,810 55,169
Impairment of goodwill 10 26,470 3,619
Amortisation of other intangible assets 10 898 48,138
Unrealised gain on derivative financial instrument 15 (700) -
Loss on disposal of fixed assets 9 4,664 -
Change in inventories 4,626 (35,557)
Change in trade and other receivables (76,301) 119,164
Change in trade and other payables 18,925 20,078
Change in share option reserve 24 12,247 6,123
1,107,754 691,882
Interest received 38,759 9,493
Interest paid (135,173) (48,635)
Income taxes paid (199,857) (55,742)
Net cash flow from operating activities 811,483 596,998
Net cash flow arising from acquisitions (2,662,624) (829,835)
Purchase of property plant and equipment 9 (171,626) (40,479)
Net cash flow from investing activities (2,834,250) (870,314)
Proceeds from the issue of share capital 3,802,309 809,597
Change in borrowings 1,112,974 (18,342)
Dividends paid 23 (170,829) (86,554)
Net cash flow from financing activities 4,744,454 704,701
Increase in cash and cash equivalents 2,721,687 431,385
Cash and cash equivalents at the start of the period 17 848,772 417,387
Cash and cash equivalent at the end of the period 17 3,570,459 848,772 Company cash flow statement
Freshwater UK Annual Report 06/07   45
Company cash flow statement
for the year ended 31 August 2007
2007 2006
Note £ £
Operating profit 342,902 36,607
Depreciation of property, plant and equipment 9 60,053 40,582
Impairment of goodwill 10 3,413 1,819
Amortisation of other intangible assets 10 898 1,426
Impairment of investments 11 24,565 48,512
Unrealised gain on derivative financial instrument 15 (700) -
Change in inventories 14 52,494 (31,568)
Change in trade and other receivables (1,056,988) 41,694
Change in trade and other payables 52,590 (34,297)
Change in share option reserve 12,247 6,123
(508,526) 110,898
Interest received 38,759 9,493
Interest paid (135,173) (48,635)
Income taxes paid (29,282) 56,121
Net cash flow from operating activities (634,222) 127,877
Net cash flow arising from acquisitions (3,003,245) (1,141,296)
Purchase of property plant and equipment 9 (93,331) (34,273)
Purchase of goodwill 10 - (22,887)
Net cash flow from investing activities (3,096,576) (1,198,456)
Proceeds from the issue of share capital 3,802,309 809,597
Change in external borrowings 1,112,974 (18,342)
Change in intra group funding 1,891,458 (421,584)
Dividends paid 23 (170,829) (86,554)
Net cash flow from financing activities 6,635,912 283,117
Increase / (decrease) in cash and cash equivalents 2,905,114 (787,462)
Cash and cash equivalents at the start of the period 17 (517,180) 270,282
Cash and cash equivalent at the end of the period 17 2,387,934 (517,180) Notes to the financial statements
for the year ended 31 August 2007
1. FRESHWATER GROUP 
Freshwater Group ('the Group') comprises Freshwater UK Plc (the ‘Company') and its subsidiary undertakings a list of which is provided in
note 12. The Company is a limited liability company incorporated and domiciled in the United Kingdom. Its ordinary shares have been listed
and traded on the Alternative Investment Market since 16 July 2007. The Company’s registered office is at Freshwater House, Cardiff Gate
Business Park, Cardiff, CF23 8RS.
2. AUTHORISATION OF FINANCIAL STATEMENTS AND STATEMENT OF COMPLIANCE
The group and parent company financial statements for the year ended 31 August 2007 ('the financial statements') were authorised for issue
by the Company’s Board on 11 December 2007 and signed on the board’s behalf by Steve Howell and Haydn Evans. The financial statements
have been prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union ('EU') and in
accordance with the applicable provisions of the Companies Act 1985.
3. SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies applied in the preparation of the financial statements are set out below. These policies were consistently
applied. The functional currency and presentational currency of the Group is Sterling.
This is the first year that financial statements have been prepared in accordance with IFRS as adopted by the EU. The disclosures required
by ‘IFRS 1 - First time adoption of International Financial Reporting Standards’ in relation to the transition from UK GAAP to IFRS are
provided in note 28. The transition date is 1 September 2005. 
a) Basis of consolidation
The group financial statements incorporate the financial statements of the Company and the entities that it controls (its subsidiaries) drawn
up to 31 August each year. Control comprises the power to govern the financial and operating policies of an entity so as to obtain benefit
from its activities. The financial statements of subsidiaries are incorporated from the date of their acquisition, being the date on which control
passed to the Group, and continue to be included until the date that such control ceases. The effects of intra-group transactions are
eliminated in full.
b) Revenue and turnover
Revenue comprises professional fees and mark-ups. Professional fees and mark-ups are recognised in proportion to the extent to which the
service to be provided under the related contract has been performed. Revenue is stated exclusive of value added tax. T urnover (billings) is
revenue stated gross of marginal costs such as print costs and the purchase of advertising space that are incurred in providing a service and
that in accordance with industry practice are marked up and passed on to clients. 
c) Segmental analysis 
A geographical segment is a distinguishable component of an enterprise that provides products and services within a particular economic
environment and that is subject to risks and returns that are different from those of components operating in other economic environments.
A business segment is a distinguishable component of an enterprise that provides products or services and that is subject to risks and returns
that are different from those of other business segments. The Group’s operations are entirely within the UK and the Group is not considered
to consist of differing geographical segments. With the exception of Freshwater UK Plc which operates as a holding company Group
members are in the business of providing public relations and marketing services. The Group is not considered to comprise of differing
business segments. In the absence of differing business and geographical segments segmental information is not provided.
Notes to the financial statements
46 Freshwater UK Annual Report 06/07    Notes to the financial statements
for the year ended 31 August 2007 (continued)
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
d) Dividends
Dividends are recognised in the period in which they are considered to have become no longer at the discretion of the Company. Dividends
declared (i.e. appropriately authorised and therefore no longer at the discretion of the Company) after the balance sheet date but before the
financial statements are authorised for issue are not recognised as a liability at the balance sheet date. 
e) Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses. Freehold land is not
depreciated. Other property, plant and equipment is depreciated so as to write off cost less estimated residual value over its expected life on
the following bases:
� Freehold Property - 3% straight line;
� Short Leasehold Property - 33% straight line;
� Plant and Machinery - 10% reducing balance or 25% on cost;
� Motor Vehicles - 25% on cost;
� Fixtures and Fittings - 25% on cost;
� Office Equipment - 25% reducing balance or 25% - 33% on cost. 
f) Business combinations and goodwill
Business combinations are accounted for in accordance with the purchase method. 
Goodwill comprises the excess of the cost of a business combination over the net fair value of the identifiable assets, liabilities and contingent
liabilities acquired. The cost of a business combination is measured as the aggregate of the fair values at the date of acquisition of the assets
given, the liabilities incurred or assumed and the equity instruments issued in exchange for control of an acquiree plus associated directly
attributable costs. Goodwill is stated at cost less accumulated impairment losses. Where the cost of a business combination is less than the
net fair value of the identifiable assets, liabilities and contingent liabilities acquired the associated gain is recognised in the income statement
in the period of acquisition. 
The terms of a business combination may require for purchase consideration to be provided subsequent to the acquisition date. The value
of such deferred consideration may additionally be dependent upon future events. In such circumstances an estimate of the ultimate value of
the deferred contingent consideration is recognised at the date of acquisition. Subsequent revisions are accounted for as a revision to the cost
of the business combination and lead to a revision to the cost of goodwill associated with the combination. Such revisions are recognised
prospectively in the accounting period that they are made. Deferred consideration is not discounted where the effects of such discounting is
considered immaterial and recognised as a liability or as a component of equity depending on its nature. 
Goodwill is reviewed for impairment annually and more frequently if events or changes in circumstances indicate that its carrying value may
be impaired. At the date of acquisition goodwill is allocated to a cash-generating unit(s) and in the event of a subsequent reorganisation of the
cash unit(s) to which it has been allocated correspondingly reallocated. An impairment review comprises assessing the recoverable amount
of the cash generating unit(s) to which goodwill has been allocated. Where the recoverable amount of the cash generating unit(s) is less than
its carrying amount and associated goodwill an impairment loss is recognised. Impairment losses are recognised in the income statement and
are not subsequently reversed. The recoverable amount of a cash generating unit is the higher of its fair value less costs to sell and its value
in use. Assessing the recoverable amount of a cash generating unit includes estimating the future cash flows that it will generate and
discounting these cash flows at what is considered to be an appropriate discount rate. 
Notes to the financial statements
Freshwater UK Annual Report 06/07   47 Notes to the financial statements
48 Freshwater UK Annual Report 06/07   
Notes to the financial statements
for the year ended 31 August 2007 (continued)
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
g) Other intangible assets 
Other intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses. They are amortised to residual
values on a straight line basis over their estimated useful lives with a maximum of 20 years and are reviewed for impairment whenever
changes in circumstances indicate their carrying value may not be recoverable. 
h) Trade receivables
T rade receivables are stated at the original invoice amount less allowances made for doubtful receivables. Provision is made where there is
objective evidence that the group will be unable to recover balances in full. 
i) Derivative financial instruments 
The Group has sought to manage its interest rate risk through entering an interest (base) rate swap. The contract is carried at fair value with
any gains or losses being taken to the income statement.  
j) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, demand deposits and short-term, highly liquid investments that are readily convertible 
to known amounts of cash and which are subject to an insignificant risk of changes in value. The group overdraft facility is an integral part 
of the Group’s cash management stragegy and is considered to form part of cash and cash equivalents for the purposes of the statement of
cash flows.
k) Borrowings
Borrowings are initially recognised at fair value and are subsequently measured at amortised cost calculated in accordance with the effective
interest method. 
l) Leases 
Where the use of an asset is funded by leasing arrangements that give rights over the asset approximating to ownership the asset is accounted
for as if it has been purchased and recognised at the lower of fair value and the present value of the minimum lease payments. The capital
element of the obligations under the associated leasing arrangements is shown as obligations under finance leases and lease payments are
apportioned between interest which is charged to the income statement and liability which reduces the outstanding obligation so as to give
a constant rate of charge on the outstanding lease obligations. All other leases are considered operating leases and payments thereunder are
recognised as an expense in the income statement on a straight line basis over the lease term.  
m) Deferred taxation
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are recognised for all
taxable temporary differences. 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. Exceptionally such assets and liabilities are not recognised if the temporary difference
arises from the recognition of goodwill or the initial recognition (other than a business combination) of other assets and liabilities in a
transaction that affects neither the tax profit or accounting profit. Notes to the financial statements
Freshwater UK Annual Report 06/07   49
Notes to the financial statements
for the year ended 31 August 2007 (continued)
3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
m) Deferred taxation (continued)
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability
is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.
n) Share based payments 
The cost of equity settled share option contracts is measured as the fair value of the associated options at the date of their grant. Fair value
is calculated using the recognised Black-Scholes-Merton methodology. This cost is expensed on a straight line basis over the associated vesting
period in a manner that reflects the expectation of the number of options that will eventually vest.  More particularly at each balance sheet
date before vesting the cumulative charge that should have been expensed in view of the extent to which the vesting period has expired and
management’s then best estimate of the number of equity instruments that will ultimately vest is calculated. The movement in the cumulative
expense since the previous balance sheet date is then recognised as an expense in the income statement with a corresponding entry in equity.
Upon the exercise of the associated options the credits in associated equity are reversed and the proceeds received in respect of share
options are credited to share premium and share capital.  
o) Accounting estimates and judgements
In applying the accounting polices detailed above decisions sometimes have to be made as to the likely outcome of future events. Those
judgements and estimates made in preparing the financial statements are based on historical experience and assumptions that the Directors
believed were reasonable in the circumstances. The Directors consider the key judgements and estimates made in preparing the financial
statements to have been those relating to:
� the recognition of revenue in relation to contracts which straddle the year end;
� the accounting for share option contracts; and;
� the valuation of goodwill and other intangible assets. 
These judgements and estimates are discussed in more detail both above and in the relevant notes to the financial statements. 
p) Impact of standards not yet effective
The directors have considered standards and interpretations which have been issued but are not yet effective. Whilst certain standards such
as IFRS 7 ‘Financial Instrument Disclosures’ and IFRS 8 ‘Operating Segments’ may affect disclosures in future financial statements,
implementation of new standards is not expected to have a significant effect on Group’s results or balance sheet. Notes to the financial statements
50 Freshwater UK Annual Report 06/07   
Notes to the financial statements
for the year ended 31 August 2007
4. PROFIT BEFORE TAX
Profit before tax is stated after charging the following:
5. AUDITORS’ REMUNERATION
2007 2006
£ £
Depreciation of property, plant and equipment:
� owned by the group 84,056 40,347
� held under finance leases by the group 15,754 14,822
Impairment of goodwill 26,470 3,619
Amortisation of other intangible assets 898 48,138
Operating lease rentals:
� property, plant and equipment 5,000 5,616
� other operating leases 189,319 86,393
Employee costs 2,528,189 1,630,456
The above amounts are included in administrative expenses.
2007 2006
£ £
Fees payable by the Company to the Company’s auditor for the audit of 
the Company’s annual accounts 5,000 2,500
Fees payable by the Group to the Company’s auditor for other services
� Audit of the Company’s subsidiaries 42,500 9,500
� Tax Services 7,250 5,500
� Corporate Finance Services 167,939 -
222,689 17,500
Corporate Finance Service fees include fees for services provided in relation to the Company’s admission to the Alternative Investment
Market and the Company’s recent acquisitions. The majority of these fees have been capitalised. 
Separate disclosure of the fees paid to the Company’s auditor for non-audit services provided to the Company is not given as the financial
statements are required to disclose such fees on a consolidated basis. 
The Directors considered the auditors to be best placed to provide the non-audit services above. The Audit Committee reviews the nature
of non-audit services to ensure independence is maintained. 
6. EMPLOYEE COSTS
Group Company
2007 2006 2007 2006 
£ £ £ £
Wages and salaries 2,215,130 1,429,731 248,732 640,955
Social security costs 233,267 146,715 30,191 64,811
Other pension costs 67,545 47,887 10,538 19,044
Share based payments 12,247 6,123 4,000 3,000
2,528,189 1,630,456 293,461 727,810 Notes to the financial statements
Freshwater UK Annual Report 06/07   51
Notes to the financial statements
for the year ended 31 August 2007
6. EMPLOYEE COSTS (CONTINUED)
Bonuses dependent upon the achievement of certain financial and non-financial targets are payable to qualifying Group employees upon the
end of a financial year and following a performance review. Included in Group wages and salaries are bonuses of £38,979 (2006: £38,744).
The holiday year for Group employees runs from 1 January to 31 December inclusive. Employees are entitled to accumulate holiday not
taken within a leave cycle subject to a maximum of 5 days. This must be taken within 12 months of the end of the associated leave cycle.
Unused accrued holiday benefits vest upon the termination of employment and provision is made to reflect this.  Included in Group wages
and salaries in respect of such provision is £15,808 (2006: £1,482)
The Group offers qualifying employees the opportunity to enter into a group personal pension contract with a major insurer that provides
money purchase benefits. More generally under the remuneration arrangements currently in place the Group will at the request of a
qualifying employee contribute an amount equal to 3% of their basic salary to a personal pension arrangement of their choice.  
The average number of employees including Directors during the year was as follows.
2007 2006
Directors 4 3
Administrative 6 4
Public Relations 57 40
67 47
7. FINANCIAL INCOME AND EXPENSES
2007 2006
£ £
Interest receivable on deposits 38,059 9,493
Unrealised gain on derivative financial instrument 700 -
38,759 9,493
Interest payable on borrowings and overdrafts 126,762 41,347
Finance lease and hire purchase contracts costs 8,411 7,288
135,173 48,635
8. TAXATION
2007 2006
£ £
Current taxation
UK corporation tax on profits for the year 257,181 136,900
Deferred taxation
Origination and reversal of timing differences 13,234 9,964
Income tax expense 270,415 146,864
Profit before tax 920,701 436,006
Effective tax rate 29.3% 33.7%
Profit before tax at the standard rate of UK corporation tax of 30% 276,210 130,801
Goodwill impairment and intangible amortisation (2,397) (10,343)
Non deductible expenses 4,019 28,485
Capital allowances below depreciation 498 3,683
Utilisation of tax losses - (625)
Marginal relief. (21,149) (15,101)
UK corporation tax on profits for the year 257,181 136,900 Notes to the financial statements
52 Freshwater UK Annual Report 06/07   
Notes to the financial statements
for the year ended 31 August 2007
9.  PROPERTY, PLANT AND EQUIPMENT 
a) Group 
Short 
leasehold
Land land and Plant and Motor Fittings and T otal
and buildings buildings machinery Vehicles equipment
££ £ £ £ £
Cost 
At 31 August 2005 646,797 - 41,109 17,317 271,184 976,407
Acquisitions - - - - 170,222 170,222
Additions 1,921 - 1,689 - 36,869 40,479
At 31 August 2006 648,718 - 42,798 17,317 478,275 1,187,108
Acquisitions - 45,049 266,850 - 62,548 374,447
Additions - 15,310 - 1,653 155,013 171,976
Disposals - - - - (47,738) (47,738)
At 31 August 2007 648,718 60,359 309,648 18,970 648,098 1,685,793
Depreciation 
31 August 2005 11,564 - 16,262 3,247 108,383 139,456
Acquisitions - - - - 123,916 123,916
Charge for the year 11,207 - 10,048 4,329 29,585 55,169
At 31 August 2006 22,771 - 26,310 7,576 261,884 318,541
Charge for the year 11,625 8,712 10,257 5,322 63,894 99,810
Acquisitions - 6,324 243,076 - 49,941 299,341
Disposals - - - - (43,074) (43,074)
At 31 August 2007 34,396 15,036 279,643 12,898 332,645 674,618
Net book value
31 August 2007 614,322 45,323 30,005 6,072 315,453 1,011,175
31 August 2006 625,947 - 16,488 9,741 216,391 868,567
31 August 2005 635,233 - 24,847 14,070 162,801 836,951
The net book value of land and buildings includes £300,000 (2006: £300,000) of freehold land that is not subject to depreciation. The net
book value of assets held under finance leases or hire purchase contracts included above is:
2007 2006
£ £
Motor vehicles 5,410 10,823
Fittings and equipment 67,302 77,643
72,712 88,466 Notes to the financial statements
Freshwater UK Annual Report 06/07   53
Notes to the financial statements
for the year ended 31 August 2007
9.  PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
b) Company
Land Plant and Motor Fittings and T otal
and buildings machinery Vehicles equipment
££ £ £ £
Cost 
At 31 August 2005 646,797 39,349 17,317 187,025 890,488
Additions 1,921 - - 32,352 34,273
At 31 August 2006 648,718 39,349 17,317 219,377 924,761
Additions - - - 93,331 93,331
At 31 August 2007 648,718 39,349 17,317 312,708 1,018,092
Depreciation 
31 August 2005 11,564 16,310 3,247 42,588 73,709
Charge for the year 11,207 10,048 4,329 14,998 40,582
At 31 August 2006 22,771 26,358 7,576 57,586 114,291
Charge for the year 11,625 3,935 4,331 40,162 60,053
At 31 August 2007 34,396 30,293 11,907 97,748 174,344
Net book value
31 August 2007 614,322 9,056 5,410 214,960 843,748
31 August 2006 625,947 12,991 9,741 161,791 810,470
31 August 2005 635,233 23,039 14,070 144,437 816,779
The net book value of land and buildings includes £300,000 (2006: £300,000) of freehold land that is not subject to depreciation. The net
book value of assets held under finance leases or hire purchase contracts included above is:
2007 2006
£ £
Motor vehicles 5,410 10,823
Fittings and equipment 67,302 77,643
72,712 88,466 Notes to the financial statements
54 Freshwater UK Annual Report 06/07   
Notes to the financial statements
for the year ended 31 August 2007
10. INTANGIBLE FIXED ASSETS
a) Group 
2007 2006
Goodwill Other Total Goodwill Other Total
££ £ £ £ £
Cost
Opening balance 2,881,374 66,712 2,948,086 718,118 20,000 738,118
Business combinations 2,475,281 - 2,475,281 2,163,256 46,712 2,209,968
Closing balance 5,356,655 66,712 5,423,367 2,881,374 66,712 2,948,086
Amortisation & impairment
Opening balance 3,619 56,258 59,877 - 8,120 8,120
Amortisation - 898 898 - 48,138 48,138
Impairment 26,470 - 26,470 3,619 - 3,619
Closing balance 30,089 57,156 87,245 3,619 56,258 59,877
Carrying value at end of year 5,326,566 9,556 5,336,122 2,877,755 10,454 2,888,209
Carrying value at start of year 2,877,755 10,454 2,888,209 718,118 11,880 729,998
Other intangibles include intangible assets acquired through business combinations.
The movement in the cost of goodwill due to business combinations includes adjustments to the opening cost of goodwill associated with
business combinations effected in prior periods relating to the reassessment of the fair value of the contingent consideration payable. 
Such adjustments are considered to be the result of a change in estimate and are being recognised prospectively in the current period. Notes to the financial statements
Freshwater UK Annual Report 06/07   55
Notes to the financial statements
for the year ended 31 August 2007
10. INTANGIBLE FIXED ASSETS
b) Company 
2007 2006
Goodwill Other Total Goodwill Other Total
££ £ £ £ £
Cost
Opening balance 76,171 20,000 96,171 53,284 20,000 73,284
Other - - - 22,887 - 22,887
Closing balance 76,171 20,000 96,171 76,171 20,000 96,171
Amortisation & impairment
Opening balance 18,443 9,546 27,989 16,624 8,120 24,744
Amortisation - 898 898 - 1,426 1,426
Impairment 3,413 - 3,413 1,819 - 1,819
Closing balance 21,856 10,444 32,300 18,443 9,546 27,989
Carrying value at end of year 54,315 9,556 63,871 57,728 10,454 68,182
Carrying value at start of year 57,728 10,454 68,182 36,660 11,880 48,540
11. INVESTMENTS
Investments comprises the carrying value of the Company’s shares in its direct subsidiaries net of any impairments in value. A list of the
Company’s direct subsidiaries is provided in note 12.
At 31 August 2005 507,109
Business combinations 2,803,467
Impairment (48,512)
At 31 August 2006 3,262,064
Business combinations 3,006,696
Impairment (24,565)
At 31 August 2007 6,244,195
The movement due to business combinations during the year includes adjustments to the opening balance as a result of the fair value of
contingent consideration associated with business combinations effected in prior periods being reassessed. These adjustments are
considered to be the result of a change in estimate and are recognised prospectively in the period to which they relate.  Notes to the financial statements
56 Freshwater UK Annual Report 06/07   
Notes to the financial statements
for the year ended 31 August 2007
12. SUBSIDIARY UNDERTAKINGS
The Company owns 100% of the ordinary share capital and controls 100% of the voting rights in the entities listed below. These subsidiary
companies operate solely in the UK and are registered in either England and Wales or Scotland. All are direct subsidiaries of the Company
with the exception of Saffron Public Relations Limited which is a 100% direct subsidiary of Attenborough Saffron Limited.  
Entity Acquired Principal activity
Freshwater Scotland Limited 2005 Public relations
Freshwater Midlands Limited 2005 Public relations
Freshwater Creative Limited 2006 Graphic design and marketing 
Freshwater Southern Limited 2006 Public relations
Freshwater Wales Limited 2006 Public relations
Freshwater Consumer Limited 2006 Public relations
Freshwater T echnology Limited 2006 Public relations
Freshwater Northern Limited 2006 Public relations
Freshwater Healthcare Limited 2006 Public relations
Attenborough Saffron Limited 2007 Public relations
Saffron Public Relations Limited 2007 Dormant
13. BUSINESS COMBINATIONS  
Details of the business combinations effected in the current and prior year are provided below. 
a) Freshwater Creative Limited, Freshwater Southern Limited and Freshwater Wales Limited 
These entities were acquired by the Company during 2006 as ‘off the shelf', non-trading companies. Since the beginning of the current
financial year they have carried out those trading activities previously performed by the Company.  
b) Freshwater Consumer Limited (formerly Trew Relations Limited)
On 1 December 2005 the Company acquired the entire issued ordinary share capital and thereby control of Trew Relations Limited 
in exchange for a cash payment of £195,000 and certain contingent consideration. Contingent consideration comprised the promise of a
cash payment dependant on what subsequently was agreed as the audited net assets of Trew Relations Limited at the acquisition date
together with the promise of both a cash payment and the issue of a number of 20p ordinary shares in the Company dependant upon Trew
Relations Limited’s profitability in the subsequent 12 months.  T rew Relations Limited had and continues to have no subsidiaries or associates.
The acquisition has been accounted for in accordance with the purchase method. Notes to the financial statements
Freshwater UK Annual Report 06/07   57
1 Dec 05 Aug 06 Final
Book Adj. Fair FV FV
££ £ £ £
Assets and liabilities acquired
Intangible assets 7,410 7,410
Tangible assets 13,960 13,960
Debtors 209,254 209,254
Cash at bank and at hand 28 28
Creditors (156,279) (156,279)
Net assets acquired 74,373 74,373 74,373 74,373
Goodwill 474,970 474,970 420,150
549,343 549,343 494,523
Cost of business combination
Cash 195,000 195,000 195,000
Contingent consideration
Net tangible assets - Cash 87,740 87,740 43,364
Earn out - Cash 100,000 100,000 191,025
Earn out - Ordinary shares 97,500 97,500 -
285,240 285,240 234,389
Directly attributable costs 69,103 69,103 65,134
549,343 549,343 494,523
What is considered to have been the fair value of T rew Relations Limited’s identfiable assets, liabilities and contingent liabilities at the date
of acquisition has remained unchanged since completion.
At the date of acquisition it was estimated that £100,000 of cash would become payable and that 65,000 20p ordinary shares in the Company
would become issuable as a result of the earn out arrangements  (it having been agreed that  the Company’s 20p ordinary shares were to
be considered as having a fair value of £1.5 after due regard to factors such as the price paid in recent previous share subscriptions and the
shares’ proportionate share of the Group’s consolidated net assets at the date of acquisition). This expectation was unchanged at year end
2006. Ultimately a cash payment of £191,025 was made to settle the obligations under the earn out arrangements. Adjustments to
contingent consideration have been accounted for in the current period by effecting a corresponding change to the cost of goodwill. 
Trew Relations Limited was renamed Freshwater Consumer Limited on 2 February 2007. Freshwater Consumer Limited contributed
£20,617 to Freshwater Group’s reported profit for the year ended 31 August 2007 (2006: £37,331).
Notes to the financial statements
for the year ended 31 August 2007
13. BUSINESS COMBINATIONS  (CONTINUED) Notes to the financial statements
58 Freshwater UK Annual Report 06/07   
Notes to the financial statements
for the year ended 31 August 2007
13. BUSINESS COMBINATIONS (CONTINUED)
c)  Freshwater Technology Limited (formerly Black and White Communications Limited)
On 1 March 2006 the Company acquired the entire issued ordinary share capital and thereby control of Black and White Communications
Limited in exchange for a cash payment of £120,000 and certain contingent consideration. Contingent consideration comprised the promise
of a cash payment equal to what subsequently was agreed as the net tangible assets of Black and White Communications Limited at 
the acquisition date together with the promise of both a cash payment and the issue of a number of 20p ordinary shares in the
Company dependant upon Black and White Communication Limited’s profitability in the subsequent six months. Black and White
Communications Limited had and continues to have no subsidiaries or associates. The acquisition has been accounted for in accordance with
the purchase method.
1 March 06 Aug 06 Final
Book Adj. Fair FV FV
££ £ £ £
Assets and liabilities acquired
Intangible assets 120,808 120,808
Tangible assets 12,522 12,522
Debtors 62,341 62,341
Cash at bank and at hand 33 33
Creditors (57,359) (57,359)
Net assets acquired 138,345 138,345 138,345 138,345
Goodwill 226,433 226,433 197,318
364,778 364,778 335,663
Cost of business combination
Cash 120,000 120,000 120,000
Contingent consideration
Net tangible assets - Cash 17,537 17,537 17,537
Earn out - Cash 120,000 120,000 90,000
Earn out - Ordinary shares 74,988 74,988 45,602
212,525 212,525 153,139
Directly attributable costs 32,253 32,253 62,524
364,778 364,778 335,663
What is considered to have been the fair value of Black and White Communications Limited’s identifiable assets, liabilities and contingent
liabilities at the date of acquisition has remained unchanged since completion.
At the date of acquisition it was estimated that £120,000 of cash would become payable and that 42,850 20p ordinary shares in the Company
would become issuable as a result of the earn out arrangements (it having been agreed that the Company’s 20p ordinary shares were to be
considered as having a fair value of £1.75 after due regard to factors such as the price paid in recent previous share subscriptions and the
shares’ proportionate share of the Group’s consolidated net assets at the date of acquisition). This expectation was unchanged at year end
2006. Ultimately £90,000 of cash and 26,058 20p ordinary shares were issued to settle the obligations under the earn out arrangements.
This adjustment has been accounted for in the current period by a corresponding change to the cost of goodwill.
Black and White T echnology Limited was renamed Freshwater T echnology Limited on 5 February 2007. Freshwater T echnology Limited
contributed £(33,681) to Freshwater Group’s reported profit for the year ended 31 August 2007 (2006: £21,238). Notes to the financial statements
Freshwater UK Annual Report 06/07   59
d) Freshwater Northern Limited (formerly Kath Harding PR Limited)
On 1 April 2006 the Company acquired the entire issued ordinary share capital and thereby control of Kath Harding PR Limited in exchange
for a cash payment of £80,000 and certain contingent consideration. Contingent consideration comprised the promise of a cash payment
equal to what subsequently was agreed as the net assets of Kath Harding PR Limited at the acquisition date. Kath Harding PR Limited had
and continues to have no subsidiaries or associates. The acquisition has been accounted for in accordance with the purchase method.
1 Apr 06  and final
Book Adj. Fair 
££ £
Assets and liabilities acquired
Intangible assets 3,167 3,167
Tangible assets 3,300 3,300
Debtors 60,995 60,995
Cash at bank and at hand 419 419
Creditors (51,030) (51,030)
Net assets acquired 16,851 16,851
Goodwill 86,878
103,729
Cost of business combination
Cash 80,000
Contingent consideration
Net assets - Cash 16,851
Directly attributable costs 6,878
103,729
What is considered to be have been the fair value of both the cost of the business combination and of Kath Harding PR Limited’s identifiable
assets, liabilities and contingent liabilities at the date of acquisition has remained unchanged since completion.
Kath Harding PR Limited was renamed Freshwater Northern Limited on 7 April 2006. Freshwater Northern Limited contributed £22,786
to Freshwater Group’s reported profit for the year ended 31 August 2007 (2006: £15,000).
Notes to the financial statements
for the year ended 31 August 2007
13. BUSINESS COMBINATIONS  (CONTINUED) Notes to the financial statements
60 Freshwater UK Annual Report 06/07   
Notes to the financial statements
for the year ended 31 August 2007
13. BUSINESS COMBINATIONS (CONTINUED)
e) Freshwater Healthcare Limited (formerly Clear Communication Specialists Limited)
On 31 May 2006 the Company acquired the entire issued ordinary share capital and thereby control of Clear Communication Specialists
Limited in exchange for the issue of Floating Rate Notes of aggregate nominal value £650,000, the issue of 220,000 20p ordinary shares in
the Company and certain contingent consideration. Contingent consideration comprised the promise to issue further Floating Rate Notes
of an aggregate nominal value dependant on what was subsequently agreed as Clear Communication Specialists Limited’s net tangible assets
at the acquisition date. Clear Communication Specialists Limited had and continues to have no subsidiaries or associates. The acquisition has
been accounted for in accordance with the purchase method.
31 May 06 Aug 06 Final
Book Adj. Fair FV FV
££ £ £ £
Assets and liabilities acquired
Intangible assets 31,831 31,831
Tangible assets 16,524 16,524
Debtors 301,992 301,992
Cash at bank and at hand 337,815 337,815
Creditors (168,912) (168,912)
Net assets acquired 519,250 519,250 519,250 519,250
Goodwill 1,083,218 1,083,218 1,172,491
1,602,468 1,602,468 1,691,741
Cost of business combination
Floating rate notes 650,000 650,000 650,000
220,000 ordinary shares 385,000 385,000 385,000
Contingent consideration
Floating rate notes 482,819 482,819 469,273
Directly attributable costs 84,649 84,649 187,468
1,602,468 1,602,468 1,691,741
What is considered to have been the fair value of Clear Communication Specialists Limited’s identifiable assets, liabilities and contingent
liabilities at the date of acquisition has remained unchanged since completion.
It was agreed that the fair value of each 20p ordinary share in the Company issued as part of the acquisition would be considered to be
£1.75 after due regard to factors such as the price paid in recent previous share subscriptions and the shares’ proportionate share of the
Group’s consolidated net assets at the date of acquisition.
The aggregate nominal value of the additional Floating Rate Notes to be issued was known with certainty by late 2006 although the
instruments themselves were not issued until January 2007. Further information on the Floating Rate Notes associated with the transaction
is provided in note 19.
Clear Communications Specialists Limited was renamed Freshwater Healthcare Limited on 1 March 2007. Freshwater Healthcare Limited
contributed £172,378 to Freshwater Group’s reported profit for the year ended 31 August 2007 (2006: £45,000). Notes to the financial statements
Freshwater UK Annual Report 06/07   61
Notes to the financial statements
for the year ended 31 August 2007
13. BUSINESS COMBINATIONS  (CONTINUED)
f) Attenborough Saffron Limited 
On 28 February 2007 the Company acquired the entire issued ordinary share capital and thereby control of Attenborough Saffron Limited
in exchange for an immediate cash payment of £625,000, the issue of 100,000 20p ordinary shares in the Company and certain contingent
consideration. Contingent consideration comprised the promise of a cash payment equal to what subsequently was agreed as the net
tangible assets of Attenborough Saffron Limited at the acquisition date (subject to a cap) together with the promise of a cash payment and
the issue of a number of additional 20p ordinary shares in the Company dependant upon Attenborough Saffron’s profitability in the
subsequent 12 months. The acquisition has been accounted for in accordance with the purchase method.
28 Feb 07 Aug 07
Book Adj. Fair FV
££ £ £
Assets and liabilities acquired
Tangible assets 73,721 73,721
Investments 100 100
Debtors 343,016 343,016
Cash at bank and at hand 384,912 384,912
Creditors (227,329) (227,329)
Net assets acquired 574,420 574,420 574,420
Goodwill 2,175,580 2,375,580
2,750,000 2,950,000
Cost of business combination
Cash 625,000 625,000
100,000 ordinary shares 175,000 175,000
Contingent consideration
Net tangible assets - Cash 500,000 550,000
Earn out - Cash 600,000 600,000
Earn out - Ordinary shares 700,000 700,000
1,800,000 1,850,000
Directly attributable costs 150,000 300,000
2,750,000 2,950,000
What is considered to be have been the fair value of Attenborough Saffron Limited’s identifiable assets, liabilities and contingent liabilities at
the date of acquisition has remained unchanged since completion.
The parties agreed that the fair value of any 20p ordinary shares in the Company issued as part of the acquisition should be considered as
£1.75 after due regard to factors such as the price paid in recent previous share subscriptions and the shares’ proportionate share of the
Group’s consolidated net assets at the date of acquisition.
At the date of acquisition it was considered that £600,000 cash would become payable and that 400,000 20p ordinary shares would become
issuable as a result of the earn out arrangements associated with the transaction. This expectation remains unchanged albeit that with the
2:1 share split in June 2007 the expectation of the number of ordinary shares to be issued was revised to 800,000.
Attenborough Saffron Group comprising Attenborough Saffron Limited and its dormant subsidiary undertaking, Saffron Public Relations
Limited, contributed £156,861 to Freshwater Group’s reported profit  for the year ended 31st August 2007. Notes to the financial statements
62 Freshwater UK Annual Report 06/07   
Notes to the financial statements
for the year ended 31 August 2007
14. INVENTORIES
Group Company
2007 2006 2007 2006 
£ £ £ £
Raw materials and consumables 4,326 7,566 3,373 7,566
Work in progress 51,108 52,494 - 48,255
55,434 60,060 3,373 55,821
15. FINANCIAL INSTRUMENTS
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another
entity. Freshwater Group’s financial assets include cash and cash equivalents and trade receivables. The group’s financial liabilities include its
borrowings and trade and other payables. The group is additionally party to a £ Sterling denominated amortising interest (base) rate 
swap contract.
The risks associated with the group’s financial assets and liabilities include credit risk, interest rate risk and liquidity risk. Group members
publish their accounts and conduct their business entirely in £ Sterling and accordingly the group does not face currency risk being the risk
that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.
Credit risk 
Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation
(e.g. the risk of a trade debtor or a financial institution with which money is deposited defaulting on payment). The Group actively monitors
the composition of trade debtors and denies additional credit when appropriate. Undue concentrations of customer credit are not allowed
to develop. At the year end the Group’s bank accounts, deposits and borrowings were all with a single recognised UK high street bank.
Interest rate risk 
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest
rates. The Group faces interest rate risk as a result of its borrowings and from holding money with financial institutions. At the year end all
the Group’s bank accounts, deposits and borrowings were with a single recognised UK high street bank. An analysis of the group’s
borrowings all of which are at a floating rate is provided in note 19. The group has mitigated the interest rate risk associated with its
borrowings through entering into a free standing 10 year £ Sterling denominated amortising interest (base) rate swap with its bankers. Under
the contract which had an initial nominal value of £900,000 the group pays interest at a fixed rate of 5.6% in exchange for the counterparty
bank’s base rate. The contract was entered into on 1 March 2007 and will end on 1 March 2017. Early exit would require the payment of
the then fair value of the contract.
Liquidity risk 
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. Within Freshwater
Group the responsibility for monitoring liquidity risk and for ensuring that individual Group members are adequately funded has been
centralised and lies with the ultimate parent undertaking, Freshwater UK Plc, which leads all borrowing and capital raising activities.
16. TRADE AND OTHER RECEIVABLES
Group Company
2007 2006 2007 2006 
£ £ £ £
T rade receivables 1,392,247 1,030,741 - 346,083
Prepayments and accrued income 120,642 - 20,875 -
Other receivables 96,098 158,929 61,329 78,434
Amounts owed by Group undertakings - - 990,159 770,227
1,608,987 1,189,670 1,072,363 1,194,744
Further information on amounts owed by Group undertakings is provided in note 26. Notes to the financial statements
Freshwater UK Annual Report 06/07   63
Notes to the financial statements
for the year ended 31 August 2007
17. CASH AND CASH EQUIVALENTS
Group Company
2007 2006 2007 2006 
£ £ £ £
Current account balances 270,359 197,775 (912,166) (1,168,177)
Short term deposits 3,300,100 - 3,300,100 -
Other deposits - 650,997 - 650,997
3,570,459 848,772 2,387,934 (517,180)
At the year end all bank accounts, deposits and borrowings were with a single recognised UK high street bank.
18.  TRADE AND OTHER PAYABLES
Group Company
2007 2006 2007 2006 
£ £ £ £
T rade payables 354,346 299,976 63,615 154,528
Other taxes and social security 255,348 211,209 - 48,314
Deferred (contingent) consideration 600,000 727,819 600,000 727,819
Other payables and accrued expenses 344,930 196,916 136,330 51,581
Amounts owed to Group undertakings - - 819,123 -
1,554,624 1,435,920 1,619,068 982,242
Futher information on amounts owed to Group undertakings is provided in note 26.
19.  BORROWINGS
Group and Company
Current Non current T otal
2007 2006 2007 2006 2007 2006 
£ £ £ £ £ £
Lease and HP 9,431 33,453 - 14,383 9,431 47,836
Floating rate note - - - 650,000 - 650,000
Mortgage 30,914 27,340 536,034 453,103 566,948 480,443
Term loan 304,252 - 760,622 - 1,064,874 -
344,597 60,793 1,296,656 1,117,486 1,641,253 1,178,279
The maturity profile of non current borrowings is as follows:
Due in greater than 1but greater than 2  but
less than 2 yrs less than 5 yrs more than 5yrs T otal
2007 2006 2007 2006 2007 2006 2007 2006
£ £ £ ££ £ £ £
Lease and HP - 14,383 - - - - - 14,383
Floating rate notes - 650,000 - - - - - 650,000
Mortgage 33,314 29,171 116,278 99,767 386,442 324,165 536,034 453,103
Term Loan 304,252 - 456,370 - - - 760,622 -
337,566 693,554 572,648 99,767 386,442 324,165 1,296,656 1,117,486 Notes to the financial statements
64 Freshwater UK Annual Report 06/07   
Notes to the financial statements
for the year ended 31 August 2007
19.  BORROWINGS (CONTINUED)
On the 31 May 2006 the Company issued transferable sterling denominated Floating Rate Notes of aggregate nominal value £650,000
to the vendors of the ordinary share capital of Clear Communication Specialists Limited (see note 13). These notes were redeemable at par
on the 31 December 2007 and as of 1 January 2007 upon due notice being served by noteholders. Noteholders could opt for the notes to
be redeemed in either £ Sterling or US$ at the prevailing spot rate on the redemption date. The Company’s obligations under the notes
were guaranteed by its bankers in exchange for it maintaining a matching ringfenced cash deposit as security. Interest was payable on the
notes quarterly in arrears at the counterparty bank’s base rate. The notes were fully redeemed in £ Sterling in April 2007 following due
notice being served by the noteholders.
On the 31 January 2007 the Company issued transferable sterling denominated Floating Rate Notes of aggregate nominal value £469,216 to
the vendors of the ordinary share capital of Clear Communication Specialists Limited (see note 13). These notes were analogous in all
respects to those issued on 31 May 2006. The notes were fully redeemed in £ Sterling in August 2007 following due notice being served by
the noteholders.
Early in 2007 the Company repaid its existing mortgage contract and entered into a new floating rate mortgage contract under which it was
advanced £600,000 at 1.75% above the counterparty bank’s base rate and also a floating rate term loan contract under which it was
advanced £500,000 at 2.25% above the counterparty bank’s base rate. In addition a new £400,000 group overdraft facility was negotiated
with interest payable at 1.75% above the counterparty bank’s base rate on net creditor balances up to the agreed limit. All these
arrangements were entered into with a single recognised UK high street bank.
The group overdraft facility continues in place subject to regular review and being repayable upon demand. The mortgage contract continues
in place. The amount advanced thereunder is repayable in monthly level instalments of capital and interest over 13 years and upon demand
on the occurrence of certain events including the breach of certain financial covenants.  The amount may be prepaid by the Company at any
time. Amounts prepaid may not be redrawn. The floating rate term loan contract was refinanced with an analogous contract for £1,217,000
in February 2007. This is repayable over four years in quarterly level instalments of capital and upon demand on the occurrence of certain
events including the breach of certain financial covenants. The loan may be prepaid at any time. Amounts repaid may not be redrawn.
The mortgage contract, term loan and group overdraft facility are all secured by an unlimited intercompany composite guarantee (under
which the members of the Group are jointly and severally liable for the Group’s obligations to the counterparty bank), debentures by the
members of Freshwater Group and a first legal charge over the Company’s property.
20. OPERATING LEASE COMMITMENTS 
Group Company
2007 2006 2007 2006 
£ £ £ £
Payable < 1 year 194,517 153,816 - -
Payable > 1 year < 5 years 218,737 12,996 - -
413,254 166,812 - -
The disclosed values relate entirely to operating leases entered into in order to occupy office premises. 
21.  DEFERRED TAXATION
Group Company
2007 2006 2007 2006 
£ £ £ £
Opening balance 24,836 14,872 24,000 15,870
Charge for the year 13,234 9,964 9,440 8,130
Closing balance 38,070 24,836 33,440 24,000
The provision for deferred taxation relates solely to capital allowances. Notes to the financial statements
Freshwater UK Annual Report 06/07   65
Notes to the financial statements
for the year ended 31 August 2007
22.  SHARE CAPITAL 
Group and Company
Authorised Allotted, called up and fully paid
Preferred Preferred 
Ordinary ordinary Ordinary ordinary
No Par No Par No Par No Par
At 31 August 2005 2,000,000 20p 400,000 20p 1,531,000 20p 400,000 20p
Authorised / issued 300,000 300,000 664,297 250,000
At 31 August 2006 2,300,000 20p 700,000 20p 2,195,297 20p 650,000 20p
Pre Jun-07 authorised / issued 6,950,000 50,000 321,116 57,142
Jun-07 conversion of pref. 750,000 (750,000) 707,142 (707,142)
10,000,000 20p - 3,223,555 20p -
Jun-07 2:1 split 20,000,000 10p - 6,447,110 10p -
Jul-07 IPO - - 4,705,891 -
At 31 August 2007 20,000,000 10p - 11,153,001 10p -
Movements during the financial year
On the 16 October 2006 26,058 ordinary shares of 20p each were allotted at a deemed issue price of £1.75 each to the vendor(s) of the
ordinary share capital of Black and White Communications Limited (subsequently renamed Freshwater T echnology Limited). See note 13.
On the 30 November 2006 2,200 ordinary shares of 20p each were allotted at a deemed issue price of £1.75 each to the vendor(s) of the
ordinary share capital of Quantum Public Relations Limited (subsequently renamed Freshwater Midlands Limited). See note 13.
On the 8 January 2007 the Company’s authorised ordinary share capital was increased from 2,300,000 ordinary shares of 20p each to
3,000,000 ordinary shares of 20p each. On the same day the Company’s authorised preferred ordinary share capital was increased from
700,000 preferred ordinary shares of 20p each to 750,000 preferred ordinary shares of 20p each. 
Between the 9 January 2007 and 27 February 2007 192,858 ordinary shares of 20p each were allotted at a deemed issue price of £1.75 each
and 57,142 preferred ordinary shares of 20p each were allotted at a deemed issue price of £1.75 each.
On the 28 February 2007 100,000 ordinary shares of 20p each were allotted at a deemed issue price of £1.75 to the vendor(s) 
of Attenborough Saffron Limited. See note 13.
On 4 June 2007 the Company’s authorised ordinary share capital was increased from 3,000,000 shares of 20p each to 7,000,000 ordinary
shares of 20p each. On the same day the Company’s preferred ordinary share capital was converted into a similar number of ordinary shares
due notice having been served by holders of not less than 51% of their number.
In June 2007 and subsequent to the conversion of the 20p preferred ordinary shares into 20p ordinary shares a 2:1 split occurred with each
authorised and allotted 20p ordinary share being subdivided into two 10p ordinary shares.
In July 2007 Freshwater UK successfully listed on the AIM market with 4,705,891 10p ordinary shares being placed at 85p each for total
consideration of £4,000,000 excluding transaction costs. T ransaction costs of £629,316 have been taken to the share premium account.
Preferred ordinary shares 
The non-redeemable 20p preferred ordinary shares had the same voting rights as ordinary shares and preferential rights in the event of a
liquidation or capital reduction. Holders ranked pari passu with the holders of ordinary shares in any general distribution and were entitled
to an additional annual non-discretionary preferred dividend calculated as a percentage of the Group’s consolidated net profit (as defined in
the Company’s Articles of Association) in the event of less than 40% of the Group’s consolidated net profit being distributed by way of
ordinary dividend in a given year. In the event of due notice being served by holders of not less than 51% of their number the preferred
ordinary shares were convertible into a similar number of ordinary shares. The 20p preferred ordinary shares were regarded as a compound
instrument comprising an ordinary share and a debt instrument and accounted for accordingly. Upon their conversion into ordinary shares
in June 2007 the then carrying value of the related liability component was written back to the share premium account. Notes to the financial statements
66 Freshwater UK Annual Report 06/07   
Notes to the financial statements
for the year ended 31 August 2007
23.  DIVIDENDS
Paid during the year ended 31 August 2006: £
Ordinary dividends:
Final 04/05 ordinary dividend at 2p (1p) per qualifying share 39,498
Interim 05/06 ordinary dividend at 2.1p (1.05p) per qualifying share 47,056
86,554
Preferred dividend:
Final 04/05 preferred dividend 2,328
Paid during the year ended 31 August 2007:
Ordinary dividends:
Final 05/06 ordinary dividend at 2.8p (1.4p) per qualifying share 79,269
Interim 06/07 ordinary dividend at 2.931p (1.4655p) per qualifying share 91,560
170,829
The figures in brackets reflect the 2:1 split that occurred in June 2007. See note 22. In reflection of the compound nature of the preferred
ordinary shares the preferred dividend paid to holders of preferred ordinary shares was accounted for as interest. Details of the proposed
final dividend for the current financial year are provided in the Director’s report. 
24.  SHARE OPTIONS 
The Company has entered into a number of share option contracts with certain employees and Directors of the Group under the umbrella
of an Enterprise Management Incentive Scheme. Contracts were entered into in February 2005, January 2006, July 2006 and July 2007. 
All the contracts entered into have a ten year term and lapse in the event of the optionholder becoming bankrupt or trying to sell his or her
interest. They also lapse upon the optionholder either giving or receiving notice of the termination of his or her employment with the Group,
save that a limited grace period is given in certain defined circumstances.
The contracts entered into by the Company provide the optionholder with an option to acquire a fixed number of ordinary shares in the
Company ('option shares') at a fixed exercise price that vests upon the occurrence of certain control events (e.g. certain restructurings of
the Company or the Company listing on a recognised investment exchange). The exercisability of the options provided under the contracts
is not dependant on any individual performance related criteria. Both the number of option shares and the exercise prices associated with
those contracts entered into in February 2005, January 2006 and July 2006 were proportionately changed following the 2:1 share split
effected in June 2007. Any obligations arising under the contracts are settled by the Company through the issue of new shares to the
optionholder for settlement at the relevant exercise price.
Upon the Company listing on AIM in July 2007 1/3 of the options associated with those contracts entered into by the Company:
� in February 2005 and January 2006 became exercisable at the exercise price on the listing date with: i) 1/3 becoming exercisable at the
exercise price on or after the first anniversary of the listing date; and; ii) 1/3  becoming exercisable at the exercise price on or after the
second anniversary of the listing date.
� in July 2006 became exercisable at the exercise price 12 months after the listing date with: i) 1/3 becoming exercisable at the exercise
price on or after the second anniversary of the listing date; and; ii) 1/3 becoming exercisable at the exercise price on or after the third
anniversary of the listing date.
� in July 2007 became exercisable at the exercise price 18 months after the listing date with: i) 1/3 becoming exercisable at the exercise
price on or after the elapse of 30 months subsequent to the listing date; and; ii) 1/3 becoming exercisable at the exercise price on or after
the elapse of 42 months subsequent to the listing date.
The occurrence of other control events in the future may result in all the options associated with the contracts so far entered becoming
exercisable in full immediately. Notes to the financial statements
Freshwater UK Annual Report 06/07   67
Notes to the financial statements
for the year ended 31 August 2007
24. SHARE OPTIONS (CONTINUED)
Date of grant 31-Aug-06 Lapse Pre June 07 split Split Post June 07 split Grant 31-Aug-07
T ranche 1 5,167 - 417 4,750 4,750 9,500 - 9,500 
T ranche 2 5,167 -417 4,750 4,750 9,500 - 9,500 
T ranche 3 5,167 -417 4,750 4,750 9,500 - 9,500 
Feb-05 15,501 -1,251 14,250 14,250 28,500 - 28,500 
T ranche 1 5,000 -1,583 3,416 3,416 6,832 - 6,832 
T ranche 2 5,000 -1,584 3,418 3,418 6,836 - 6,836 
T ranche 3 5,000 -1,583 3,416 3,416 6,832 - 6,832 
Jan-06 15,000 -4,750 10,250 10,250 20,500 - 20,500 
T ranche 1 9,833 -1,333 8,500 8,500 17,000 - 17,000 
T ranche 2 9,833 -1,333 8,500 8,500 17,000 - 17,000 
T ranche 3 9,833 -1,333 8,500 8,500 17,000 - 17,000 
Jul-06 29,499 -3,999 25,500 25,500 51,000 - 51,000 
Tranche 1 - - - - - 30,666  30,666 
Tranche 2 - - - - - 30,667  30,667 
Tranche 3 - - - - - 30,667  30,667 
Jul-07 - - - - - 92,000 92,000 
Total 60,000 -10,000 50,000 50,000 100,000 92,000 192,000
Exercise price Exercisable 
Date of grant Pre split Post split From T o 
T ranche 1 125p       62.5p            Jul-07 Feb-15
T ranche 2 125p       62.5p Jul-08 Feb-15
T ranche 3 125p       62.5p Jul-09 Feb-15
Feb-05
T ranche 1 150p       75p Jan-07 Jan-16
T ranche 2 150p       75p Jan-08 Jan-16
T ranche 3 150p       75p Jan-09 Jan-16
Jan-06
T ranche 1 175p       87.5p Jul-08 Jul-16
T ranche 2 175p       87.5p Jul-09 Jul-16
T ranche 3 175p       87.5p Jul-10 Jul-16
Jul-06
T ranche 1 -              82p Jan-09           Jul-17
T ranche 2 -              82p Jan-10          Jul-17
T ranche 3 -              82p Jan-11          Jul-17
Jul-07
In accordance with IFRS 2 - Share based payment the Company determined the fair value of the share option contracts it entered 
on the date of their grant, adjusted this amount to reflect its then expectation of the number of option shares that would ultimately 
vest and then commenced to expense the remaining balance on a straight line basis through its profit and loss account over the then
expected vesting period with a corresponding credit to its share option reserve. Subsequent changes in expectations have been dealt with
by catch up adjustments such that the cumulative amount charged to the profit and loss account and share option reserve is consistent with
latest expectations. Notes to the financial statements
68 Freshwater UK Annual Report 06/07   
Notes to the financial statements
for the year ended 31 August 2007
24. SHARE OPTIONS (CONTINUED)
The Company determines the fair value of the share option contracts it enters on the date of their grant using the recognised Black-Scholes-
Merton methodology. In determining the fair value of the contracts the Company made the following assumptions (Ranges are provided in
those instances where values differ across tranches):
All tranches
Feb 05 Jan 06 Jul-06 Jul-07
Share price 88p 88p 88p 93p
Exercise price 63p 75p 88p 85p
Expected life of option 3-5 yrs 4-6 yrs 4-6 yrs 4-6yrs
Expected volatility 30% 30% 30% 30%
Expected dividend yield 2.8% 2.8% 2.8% 2.8%
Risk free interest rate 5.4% 5.4% 5.4% 5.4%
Fair value at date of grant 29p-31p 23p-26p 19p-22p 22p-26p
25. EARNINGS PER SHARE
Basic earnings per share
2007 2006
£ / no. £ / no.
Profit attributable to ordinary shareholders 650,286 289,142
Weighted average number of shares 6,732,996 4,737,439
Basic earnings per share 9.66p 6.10p
The 20p preferred ordinary shares in issue during 2007 and 2006 were regarded as a compound instrument comprising an ordinary share
and a debt instrument. See note 22. In reflection of this their number has been taken into account when calculating the weighted average
number of ordinary shares used in the calculation of basic earnings per share.
In June 2007 a 2:1 split occurred with each authorised and allotted 20p ordinary share being subdivided into two 10p ordinary shares. 
The weighted average number of ordinary shares figure for the prior year has been adjusted accordingly.
Diluted earnings per share
2007 2006
£ / no. £ / no.
Profit attributable to ordinary shareholders (diluted) 650,286 289,142
Weighted average number of shares 6,732,996 4,737,439
Share options 34,108 -
Business combinations - Contingent share consideration 91,667 -
Weighted average number of shares (diluted) 6,858,771 4,737,439
Diluted earnings per share 9.48p 6.10p
The weighted average number of ordinary shares used to calculate diluted earnings per share is equal to that used to calculate basic earnings
per share as adjusted to assume conversion of all dilutive potential ordinary shares on the earlier of the beginning of the period and the date
of their issue. Notes to the financial statements
Freshwater UK Annual Report 06/07   69
Notes to the financial statements
for the year ended 31 August 2007
25.EARNINGS PER SHARE (CONTINUED)
Potential ordinary shares - share options 
The Company entered into analogous share option contracts in February 2005, January 2006, July 2006 and July 2007. See note 24. 
Until the Company listed on the Alternative Investment Market in July 2007 the vesting of the options under these contracts was subject to
the achievement of a performance related condition and the options were considered contingently issuable potential ordinary shares. The
options were not taken into account in calculating diluted earnings per share for 2006 as their vesting was subject to a performance related
condition that had neither in part or in full been met. This changed in July 2007 and in calculating diluted earning per share for 2007 the
options under those contracts issued in February 2005 and January 2006 being dilutive were taken into account from the beginning of the
period. Options under those contracts issued in July 2006 and July 2007 were not taken into account being antidilutive.
Potential ordinary share - Contingent share consideration 
Contingent share consideration that forms part of a business combination is taken into account in calculating diluted earnings per share from
the earlier of the beginning of the period and the date of acquisition to the extent that the relevant conditions have been met by the balance
sheet date and the consideration is dilutive. It should be noted that this approach can mean a mismatch between the dilutive potential
ordinary shares taken into account in calculating diluted earnings per share and the contingent share consideration that ultimately it is
expected will be provided based on future expectations. In particular it is expected that ultimately 800,000 ordinary shares will be issued as
a result of the earn out arrangements associated with the acquisition of Attenborough Saffron on 28 February 2007 whereas for the purposes
of calculating diluted earnings per share for 2007 it has been assumed that only 200,000 will be issued based on actual performance by the
balance sheet date.
26.RELATED PARTY DISCLOSURES
Group
Key management personnel
The Group’s key management personnel are those persons having the authority and responsibility for planning, directing and controlling the
significant elements of the Group’s activities including but not necessarily limited to the directors (whether executive or otherwise) of Group
members.  Details of the compensation that became payable during the year to the Group’s key management personnel are provided below:
2007 2006
£ £ 
Directors of the Company 326,689 259,865
Other 388,360 184,496
Wages and salaries 715,049 444,361
Directors of the Company 38,270 30,327
Other 44,307 20,950
Social security costs 82,577 51,277
Directors of the Company 14,914 11,998
Other 25,696 8,870
Other pension costs 40,610 20,868
Directors of the Company 500 176
Other - -
Share based payments 500 176
T otal compensation 838,736 516,682
Other
John Underwood a Director of the Company owns 25% of Verita (The Inquiry Consultancy Limited), a customer of the Group which
accounted for 1.5% of the Group’s turnover (2006: 1.6%). Notes to the financial statements
70 Freshwater UK Annual Report 06/07   
Notes to the financial statements
for the year ended 31 August 2007
26. RELATED PARTY DISCLOSURES (CONTINUED)
Company
Key management personnel
The key management personnel of the Company are considered to be the Company’s Directors. Details of the compensation that became
payable during the year to the Company’s Directors are disclosed above. 
The highest paid Director received compensation (including pension contributions) of £94,865 (2006: £82,335). 
During the year contributions became payable by the Group in relation to the money purchase pension of 4 Directors (2006: 4). 
The contributions that became payable by group in relation to the highest paid Director amounted to £4,293 (2006: 3,600).
T ransactions with other Group members 
The Company is the Group’s ultimate parent undertaking. The Company’s subsidiary undertakings are listed in note 12. All are 100% direct
subsidiaries with the exception of the dormant company, Saffron Public Relations Limited, which is a 100% subsidiary of Attenborough
Saffron Limited.
The Company settles the VAT liabilities of other Group members and when appropriate recharges other Group members a proportion of
its employment and overhead costs. The only other events that routinely effect the amount owed to/by the Company by/to other Group
members are the payment of dividends by the Company’s direct subsidiaries and the advancing/borrowing of funds by the Company to/from
other group members. 
During 2006 the Company entered no significant non-routine transactions with other Group members. The Company additionally neither
re-charged employment and overhead costs to other Group members or received any dividends from its direct subsidiaries.  
During 2007 the Company transferred trade debtor balances amounting to £346,083 and trade creditor balances amounting to £107,034 to
Freshwater Creative, Freshwater Southern and Freshwater Wales as part of the transfer of its trading activities to these entities. In addition
the Company re-charged employment and overhead costs of £903,218 to other Group members and received dividends of £50,000 from
Freshwater Wales Limited and £100,000 from Freshwater Healthcare Limited. 
Similar to other Group members the Company maintains a single intercompany account in its ledger and monitors the aggregate net position
thereon. This is considered appropriate as with a few minor exceptions the Company can be considered to be the counterparty to all
intercompany transactions entered into by other Group members i.e. the components of the aggregate net balances on other Group
members’ intercompany accounts can be considered to relate entirely to the Company.
Amounts owed by Amounts owed to 
Group undertakings Group undertakings
2007 2006 2007 2006 
£ £ £ £
Attenborough Saffron Limited - - 443,184 -
Freshwater Consumer Limited 60,514 81,529 - -
Freshwater Creative Limited 184,688 - - -
Freshwater Healthcare Limited - 47,341 253,677 -
Freshwater Midlands Limited - 17,379 122,262 -
Freshwater Northern Limited 11,931 20,494 - -
Freshwater Scotland Limited 350,108 536,588 - -
Freshwater Southern Limited 101,033 - - -
Freshwater T echnology Limited 82,906 66,896 - -
Freshwater Wales Limited 198,979 - - -
990,159 770,227 819,123 - Notes to the financial statements
Freshwater UK Annual Report 06/07   71
Notes to the financial statements
for the year ended 31 August 2007
27. EVENTS AFTER THE BALANCE SHEET DATE  
The following material non-adjusting events occurred subsequent to the balance sheet date and prior to the authorisation of these 
financial statements. 
Acquisition of Lynx Public Relations Limited  
On 1 November 2007 the Company acquired control of Lynx Public Relations Limited acquiring its entire ordinary share capital and Class
B ordinary share capital in exchange for an immediate cash payment of £350,000, the issue of 109,890 10p ordinary shares in Freshwater
UK and certain contingent consideration. The Class B ordinary shares acquired carried no voting rights but in all other respects ranked pari
passu with the acquired ordinary shares. Following completion the Class B ordinary shares were converted into ordinary shares on a one
for one basis. Contingent consideration included the promise of a cash payment equal to what subsequently was agreed as Lynx Public
Relations Limited’s net tangible assets less cash resources under UK GAAP at the completion date (subject to a cap of £150,000) plus its
cash resources at the completion date. It further included the promise of a cash payment and the issue of additional 10p ordinary shares in
Freshwater UK dependant upon Lynx Public Relations Limited’s profitability in the subsequent 12 months under UK GAAP . Lynx Public
Relations Limited had and continues to have no subsidiaries or associates.
Provisional
01 Nov 07
Book Adj. Fair 
££ £
Assets and liabilities acquired
Intangible assets - -
Tangible assets 585 585
Stocks 1,932 1,932
Debtors 326,809 326,809
Cash at bank and at hand 147,499 147,499
Creditors (176,658) (176,658)
Net assets acquired 300,167 300,167
Goodwill 717,332
1,017,499
Cost of business combination
Cash 350,000
109,850 ordinary shares 100,000
Contingent consideration
Net tangible assets - Cash 297,499
Earn out - Cash 50,000
Earn out - Ordinary shares 120,000
467,499
Directly attributable costs 100,000
1,017,499
The parties agreed that the fair value of each of the 109,890 10p ordinary shares issued upon completion should be considered 91p after
due regard to the recent quoted mid-market price of the Company’s shares.
The cash payment to be made and the value of shares to be issued as a result of the earn out arrangements disclosed above reflect the
current expectation of Lynx Public Relations Limited’s profitability under UK GAAP in the 12 month earn out period. The number of shares
issued as a result of the earn out arrangements will be such as to yield an agreed value based on the average quoted mid-market closing
price of the Company’s shares in the last month of the earn out period. Notes to the financial statements
72 Freshwater UK Annual Report 06/07   
Notes to the financial statements
for the year ended 31 August 2007
27. EVENTS AFTER THE BALANCE SHEET DATE (CONTINUED)
Acquisition of Lynx Public Relations Limited (continued)
Audited IFRS accounts for Lynx Public Relations Limited for the period ended 31 October 2007 were not available prior to the authorisation
of these financial statements and as a result the fair value of Lynx Public Relation Limited’s identifiable assets, liabilities and contingent
liabilities at the date of acquisition disclosed above is based on unaudited UK GAAP management accounts. This value and the value of
goodwill disclosed are accordingly provisional and in particular may differ from the final agreed values due to the recognition of certain
intangible assets not recognised under UK GAAP .
Acquisition of the Waterfront Conference Company Limited  
On 2 December 2007 the Company acquired control of the Waterfront Conference Company Limited acquiring both its ordinary share
capital and its preference share capital in exchange for an immediate cash payment of £140,000, the immediate issue of 10p ordinary shares
in the Company of agreed value £25,000 and certain contingent consideration. Contingent consideration included the promise of a cash
payment equal to what subsequently was agreed as the value of the Waterfront Conference Company Limited’s net tangible assets at the
completion date subject to both a cap and in the event of this value being negative a corresponding clawback of the initial cash consideration.
It further included the promise of a cash payment and the issue of additional 10p ordinary shares in the Company dependant upon the
Waterfront Conference Company Limited’s profitability in the subsequent 15 months. It is currently anticipated that a cash payment of
£100,000 will be made and shares of agreed value £150,000 will be issued as a result of these earn out arrangements. The number of shares
issued as a result of the earn out arrangements will be such as to yield an agreed value based on the average quoted mid-market closing
price of the Company’s shares in the last month of the earn out period. At the date of authorisation of these financial statements financial
information for the Waterfront Conference Company Limited for the period ending 2 December 2007 had yet to be prepared and therefore
further information in relation to this acquisition is not given.  
The vendors of the Waterfront Conference Company’s Limited ordinary share capital and preference share capital were either the same as
or controlled by the vendors of the business of the Waterfront Partnership.
Acquisition of the Waterfront Partnership 
On 2 December 2007 the Company acquired the business and certain assets and liabilities of the Waterfront Partnership in exchange for an
immediate cash payment of £580,000, the immediate issue of 10p ordinary shares in Freshwater UK of agreed value £200,000 and certain
contingent consideration. Contingent consideration included the promise of a cash payment equal to what subsequently was agreed as the
value of the tangible assets and liabilities acquired at the completion date subject to both a cap of £150,000 and in the event of this value
being negative a corresponding reduction in the initial cash consideration provided by the Company. It further included the promise of a cash
payment and the issue of additional 10p ordinary shares in the Company dependant upon the acquired business’s profitability under UK
GAAP in the subsequent 15 months. It is currently anticipated that a cash payment of £125,000 will be made and shares of agreed value
£175,000 will be issued as a result of these earn out arrangements. The number of shares issued as a result of the earn out arrangements
will be such as to yield an agreed value based on the average quoted mid-market closing price of the Company’s shares in the last month
of the earn out period. At the date of authorisation of these financial statements financial information for the Waterfront Partnership for the
period ending 2 December 2007 had yet to be prepared and therefore further information in relation to this acquisition is not given.  
28. TRANSITIONAL DISCLOSURES
This is the first year that the financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS')
as adopted by the European Union. Previously the financial statements were prepared in accordance with UK Generally Accepted
Accounting Principles ('UK GAAP'). IFRS differ in a number of significant respects from UK GAAP . In accordance with ‘IFRS 1 - First time
adoption of International Financial Reporting Standards’ reconciliations of the Group’s and the Company’s equity at 31 August 2006 and at
1 September 2005 ('the date of transition to IFRS'') under IFRS to the values previously reported under UK GAAP are provided below
together with a reconciliation of the Group’s profit for the year ended 31 August 2006. Notes to the financial statements
Freshwater UK Annual Report 06/07   73
Notes to the financial statements
for the year ended 31 August 2007
28. TRANSITIONAL DISCLOSURES (CONTINUED)
Reconciliation of the Group’s equity at 31 August 2006
UK GAAP Adj 1 Adj 2 Adj 3 Adj 4 Adj 5
Restated IFRS 3 IFRS 3 IFRS 3 IAS 19 IFRS 2 IFRS
££ £ £ £ £ £
ASSETS
Property, Plant & Equipment 868,567 - - - - - 868,567
Goodwill 2,843,276 101,434 (46,712) (20,243) - - 2,877,755
Other intangible assets 10,454 - 46,712 (46,712) - - 10,454
T otal non current assets 3,722,297 101,434 - (66,955) - - 3,756,776
T otal current assets 2,098,502 - - - - - 2,098,502
T otal assets 5,820,799 101,434 - (66,955) - - 5,855,278
EQUITY
Issued share capital 569,059 - - - - - 569,059
Share premium 1,607,104 - - - - - 1,607,104
Other reserves 143,102 - - - - 7,753 150,855
Retained earnings 465,690 101,434 - (66,955) (1,482) (7,753) 490,934
T otal equity 2,784,955 101,434 - (66,955) (1,482) - 2,817,952
TOTAL LIABILITIES
T otal non-current liabilities 1,309,622 - - - - - 1,309,622
T otal current liabilities 1,726,222 - - - 1,482 - 1,727,704
T otal liabilities 3,035,844 - - - 1,482 - 3,037,326
T otal equity and liabilities 5,820,799 101,434 - (66,955) - - 5,855,278
Reconciliation of the Group’s profit for the year ended 31 August 2006
UK GAAP Adj 1 Adj 2 Adj 3 Adj 4 Adj 5
Restated IFRS 3 IFRS 3 IFRS 3 IAS 19 IFRS 2 IFRS 
££ £ £ £ £ £
T urnover 4,122,480 - - - - - 4,122,480
Revenue 2,817,009 - - - - - 2,817,009
Administrative expenses (2,368,735) 84,810 - (50,331) (1,482) (6,123) (2,341,861)
Operating income 448,274 84,810 - (50,331) (1,482) (6,123) 475,148
Financial income 9,493 - - - - - 9,493
Financial expenses (48,635) - - - - - (48,635)
Profit before tax 409,132 84,810 - (50,331) (1,482) (6,123) 436,006
Tax (146,864) - - - - - (146,864)
Profit for the year 262,268 84,810 - (50,331) (1,482) (6,123) 289,142
Dividends (86,554) - - - - - (86,554)
Retained earnings 175,714 84,810 - (50,331) (1,482) (6,123) 202,588 Notes to the financial statements
74 Freshwater UK Annual Report 06/07   
Notes to the financial statements
for the year ended 31 August 2007
28. TRANSITIONAL DISCLOSURES (CONTINUED)
Reconciliation of the Group’s equity at 1 September 2005 
UK GAAP Adj 1 Adj 2 Adj 3 Adj 4 Adj 5
Restated IFRS 3 IFRS 3 IFRS 3 IAS 19 IFRS 2 IFRS
££ £ £ £ £ £
ASSETS
Property, Plant & Equipment 836,951 - - - - - 836,951
Goodwill 718,118 16,624 - (16,624) - - 718,118
Other intangible assets 11,880 - - - - - 11,880
T otal non current assets 1,566,949 16,624 - (16,624) - - 1,566,949
T otal current assets 1,158,396 - - - - - 1,158,396
T otal assets 2,725,345 16,624 - (16,624) - - 2,725,345
EQUITY
Issued share capital 386,200 - - - - - 386,200
Share premium 367,866 - - - - - 367,866
Other reserves 226,250 - - - - 1,630 227,880
Retained earnings 289,976 16,624 - (16,624) - (1,630) 288,346
T otal equity 1,270,292 16,624 - (16,624) - - 1,270,292
TOTAL LIABILITIES
T otal non-current liabilities 694,598 - - - - - 694,598
T otal current liabilities 760,405 - - - - - 760,405
T otal liabilities 1,455,003 - - - - - 1,455,003
T otal equity and liabilities 2,725,295 - - - - - 2,725,295
Group - Restatement of UK GAAP
The process followed to prepare the Group’s and the Company’s first financial statements under IFRS as adopted by the EU uncovered
certain accounting matters. In addressing these matters the £78,859 of dividend expense previously reported in the Group’s and the
Company’s UK GAAP financial statements for the year ended 31 August 2006 was increased to £86,554 with a corresponding reduction in
the previously reported value of financial expenses. In addition the previously reported value of the Group’s equity at 31 August 2005 and
at 31 August 2006 in the Group’s UK GAAP financial statements for the years then ended was reduced by £41,956 with a corresponding
change to the value of goodwill. 
Group - Explanation of transitional items
Adjustment 1:
IFRS 3 - Business Combinations requires the goodwill that arises upon a business combination to be capitalised and then regularly tested for
impairment in accordance with IAS 36 - Impairment of assets. Impairment losses are required to be recognised in the income statement.
Previously under UK GAAP the goodwill that arose upon a business combination was capitalized and amortised. Adjustment 1 comprises
the writing back of goodwill previously amortised under UK GAAP .
Adjustment 2:
Under IFRS 3 - Business Combinations goodwill comprises the excess of the cost of a business combination over the net fair value of the
identifiable assets, liabilities and contingent liabilities acquired. This is similar to UK GAAP however differences between IFRS and UK GAAP
mean that the net fair value of the identifiable assets, liabilities and contingent liabilities of an acquiree at the date of acquisition under IFRS
can differ from that under UK GAAP . Adjustment 2 comprises the recognition of intangible assets that would have been recognised if the
net identifiable assets, liabilities and contingent liabilities of acquirees at the date of acquisition had previously been determined in accordance
with IFRS as opposed to UK GAAP . The recognition of these intangible assets is matched by a corresponding adjustment to the value of
goodwill previously reported under UK GAAP . Notes to the financial statements
Freshwater UK Annual Report 06/07   75
Notes to the financial statements
for the year ended 31 August 2007
28. TRANSITIONAL DISCLOSURES (CONTINUED)
Adjustment 3:
This comprises the impairment losses in relation to goodwill and the additional amortisation of intangible assets that would have been
recognised if the financial statements had previously been prepared under IFRS as opposed to UK GAAP .
Adjustment 4:
The introduction of a holiday pay accrual required under IAS19 Employee Benefits but that was not previously recognised under UK GAAP . 
Adjustment 5:
Under IFRS 2 - Share-based Payment the cost of equity settled share option contracts is expensed on a straight line basis over the associated
vesting period in a manner that reflects the expectation of the number of options that will eventually vest.  Cost is measured as the fair value
of the associated options at the date of their grant. More particularly at each balance sheet date before vesting the cumulative charge that
should have been expensed in view of the extent to which the vesting period has expired and management’s then best estimate of the
number of equity instruments that will ultimately vest is calculated. The movement in the cumulative expense since the previous balance
sheet date is then recognised as an expense in the income statement with a corresponding entry in equity. Upon the exercise of the
associated options the credits in associated equity are reversed and the proceeds received in respect of share options are credited to share
premium and share capital. Historically under UK GAAP outstanding equity settled option contracts were not accounted for. Adjustment 5
comprises the corresponding restatement. 
Reconciliation of the Company’s equity at 31 August 2006
UK GAAP Adj 1 Adj 2 Adj 3 Adj 4 Adj 5
Restated IFRS 3 IFRS 3 IFRS 3 IAS 19 IFRS 2 IFRS
££ £ £ £ £ £
ASSETS
Property, Plant & Equipment 810,470 - - - - - 810,470
Goodwill 57,728 18,443 (18,443) - - - 57,728
Other intangible assets 10,454 - - - - - 10,454
Investments 3,310,576 - - (48,512) - - 3,262,064
T otal non current assets 4,189,228 18,443 (18,443) (48,512) - - 4,140,716
T otal current assets 1,901,562 - - - - - 1,901,562
T otal assets 6,090,790 18,443 (18,443) (48,512) - - 6,042,278
EQUITY
Issued share capital 569,059 - - - - - 569,059
Share premium 1,607,104 - - - - - 1,607,104
Other reserves 143,102 - - - - 7,753 150,855
Retained earnings 196,387 18,443 (18,443) (48,512) (1,482) (7,753) 138,640
T otal equity 2,515,652 18,443 (18,443) (48,512) (1,482) - 2,465,658
TOTAL LIABILITIES
T otal non-current liabilities 1,308,786 - - - - - 1,308,786
T otal current liabilities 2,266,352 - - - 1,482 - 2,267,834
T otal liabilities 3,575,138 - - - 1,482 - 3,576,620
T otal equity and liabilities 6,090,790 18,443 (18,443) (48,512) - - 6,042,278 76 Freshwater UK Annual Report 06/07   
Notes to the financial statements
for the year ended 31 August 2007
28. TRANSITIONAL DISCLOSURES (CONTINUED)
Reconciliation of the Company’s equity at 1 September 2005
UK GAAP Adj 1 Adj 2 Adj 3 Adj 4 Adj 5
Restated IFRS 3 IFRS 3 IFRS 3 IAS 19 IFRS 2 IFRS
££ £ £ £ £ £
ASSETS
Property, Plant & Equipment 816,779 - - - - - 816,779
Goodwill 36,660 16,624 (16,624) - - - 36,660
Other intangible assets 11,880 - - - - - 11,880
Investments 507,109 - - - - - 507,109
T otal non current assets 1,372,428 16,624 (16,624) - - - 1,372,428
T otal current assets 1,145,647 - - - - - 1,145,647
T otal assets 2,518,075 16,624 (16,624) - - - 2,518,075
EQUITY
Issued share capital 386,200 - - - - - 386,200
Share premium 367,866 - - - - - 367,866
Other reserves 226,250 - - - - 1,630 227,880
Retained earnings 226,290 16,624 (16,624) - - (1,630) 224,660
T otal equity 1,206,606 16,624 (16,624) - - - 1,206,606
TOTAL LIABILITIES
T otal non-current liabilities 695,596 - - - - - 695,596
T otal current liabilities 615,873 - - - - - 615,873
T otal liabilities 1,311,469 - - - - - 1,311,469
T otal equity and liabilities 2,518,075 - - - - - 2,518,075
Company - Restatement of UK GAAP 
See Group explanation provided above
Company - Explanation of reconciling items
Adjustment 1:
Analogous to adjustment 1 associated with the reconciliation of the Group’s equity (goodwill exists in the Company’s balance sheet due to
its acquisition of the trade of another business).
Adjustment 2: 
Analogous to adjustment 3 associated with the reconciliation of the Group’s equity.
Adjustment 3:
Write down of investments so that their carrying value in the Company’s IFRS balance sheet is consistent with the Group’s IFRS balance
sheet. 
Adjustments 4 and 5
Analogous to adjustments 4 and 5 associated with the reconciliation of the Group’s equity
Notes to the financial statements Company Information
Directors S B Howell 
K J Tilley 
J H Evans 
D Howell 
D B Haines 
E G Carter 
J M Underwood 
Baroness Cohen of Pimlico 
Secretary J H Evans 
Company number 4059741 (England and Wales)
Registered office Freshwater House
Cardiff Gate Business Park
Cardiff
CF23 8RS
Auditors PKF (UK) LLP
18 Park Place
Cardiff
CF10 3PD
Bankers Royal Bank of Scotland
South Wales Commercial Office
3rd Floor
One Kingsway
Cardiff
CF10 3AQ
Nominated advisor Charles Stanley Securities
and broker 25 Luke Street
London
EC2A 4AR
Registrars Capita Registrars Plc
Northern House
Woodsome Park
Fenay Bridge
Huddersfield
HD8 OLA
Solicitors Martineau Johnson
1 Colmore Square
Birmingham
B4 6AA Looking ahead
Freshwater continues to provide consultancy support to the European Ryder Cup Board
as Wales prepares to host the world’s third largest sporting event at The Celtic Manor
Resort in 2010.  (Below) Ian Woosnam claims the trophy on behalf the European team 
at the 2006 Ryder Cup played at the K Club in Ireland, where Freshwater assisted with
media relations.
Looking ahead
Freshwater UK Annual Report 06/07   77
FW-AnnualReport07-extraPages:chosen  14/12/07  10:15  Page 1 Chairman’s statement
78 Freshwater UK Annual Report 06/07   
FW-AnnualReport07-extraPages:chosen  14/12/07  10:15  Page 2 www.freshwater-uk.com