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Annual Report and Financial Statements 2006
Tikit Group plc Annual Report and Financial Statements 2006
Professional IT for law firms
and accountancy practices
Tikit
Africa House, 64-78 Kingsway, T: +44 (0) 20 7 400 3737 www.tikit.com
London WC2B 6AH F: +44 (0) 20 7 400 3738
www.tikit.com
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2002 2003 2004 2005 2006
£’000 £’000 £’000 £’000 £’000
 Turnover 8,231 9,558 11,903 20,162 23,517
 Pre-tax profit 648 1,177 1,512 2,103 2,888
* before goodwill amortisation and share option charges
Highlights 01
About Us 02
Chairman’s statement 06
Chief Executive’s statement 12
Financial review 16
Directors 18
Corporate governance statement 20
Remuneration report 22
Report of the directors 24
Statement of directors’ responsibilities 26
Report of the independent auditors 27
Consolidated profit and loss account 28
Consolidated statement of total recognised
gains and losses 29
Consolidated balance sheet 30
Company balance sheet 31
Consolidated cash flow statement 32
Notes forming part of the financial statements 33
Notice of AGM 51
Directors and advisors 53
>> Contents
 Consultancy 31%
 Services 34%
 Software 31%
 Other 4%
Percentage split of 2006 revenues
>> 5 Year Performance
Professional IT for law firms
and accountancy practices
>> Directors and advisers
Tikit Group plc
Annual Report 2006
52:53
Directors M McGoun BSc Msc (Chairman)
D Lumsden (Managing Director)
P Giuffredi ACA (Finance Director)
R Price BSc (Econ) FCA, FCCA, CTA (Independent Senior Non-Executive)
N Briant LLB (Independent Non-Executive)
Secretary and registered office P Giuffredi ACA
Africa House
64–78 Kingsway
London
WC2B 6AH
Telephone: (020) 7 400 3737
Facsimile: (020) 7 400 3738
Website: www.tikit.com
Company number 4164203
Auditors BDO Stoy Hayward LLP
8 Baker Street
London
W1U 3LL
Solicitors TLT LLP Faegre & Benson LLP
Sea Containers House 7 Pilgrim Street
20 Upper Ground London
London EC4V 6LB
SE1 9LH
Brokers and Nominated Adviser Charles Stanley & Company Limited
25 Luke Street
London
EC2A 4AR
Principal bankers National Westminster Bank Plc
98 St Paul’s Churchyard
London
EC4M 8BU
Registrars Capita Registrars
Northern House
Woodsome Park
Fenay Bridge
Huddersfield
HD8 0LA
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Tikit Group plc
Annual Report 2006
13534 30/03/2007 Proof 7
 Consultancy and Services revenues increased by 13% to £15.3m (2005: £13.5m)
 Revenues from software business up 30% to £7 .4m (2005: £5.7m)
 Group remains cash generative with £3.6m net cash inflow from operations
>> 2006 Financial Highlights
Turnover
up 17%
to £23.52m
Profit before taxation, goodwill
amortisation and share option
charges
up 38%
to £2.89m
Operating margin
up 18%
to 12.3%
Profit before taxation
up 233%
to £2.13m
Earnings per share before
goodwill amortisation and
share option charges
up 38%
to 18.0p
Basic earnings per share
up 606%
to 12.0p
Full year dividend per share
up 60%
to 4.0p
Net cash at year end
up 78%
to £4.15m
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Client Relationship Management (CRM)
The CRM group is a specialised team focused on the
development, implementation and management of
CRM programmes and systems. The group has
implementated more than 70 CRM systems over 8
years and has developed an implementation
methodology that is driven by the business needs of
a firm rather than the software. This approach
results in a much higher level of acceptance within a
firm and delivers genuine business benefit.
Document Management (DM)
Tikit has installed firm-wide DM systems at some of
the world’s largest law firms. With over 100 DM
clients worldwide, Tikit has been one of the key
drivers in moving law firms towards the paperless
office, a key strategy in cost and environmental
impact reduction.
Office Productivity
Tikit recognises that the Microsoft Office product
suite is a key tool for lawyers and support staff in law
firms. The Office Productivity group is dedicated to
understanding the implications of developments in
the Office suite for law firms as well as to developing
new, legal specific tools that enhance the existing
functionality.
Information Services
Tikit’s Information Services group is focused on
leveraging Microsoft’s SharePoint technology to
help law firms develop powerful internal and
external content solutions. Using SharePoint in
conjunction with complementary technologies such
as Handshake, iBox, Metastorm and Redwood, the
division creates integrated knowledge management,
workflow and business intelligence solutions.
>> Solutions Practice Groups
>> What we do?
Tikit is one of the world’s largest IT specialists focused on the legal and accounting markets. The company works with more than
90 of the UK’s top 100 law firms, 20 of the top 50 US law firms and 18 of the top 50 UK accountancy practices. Headquartered in
London and established in 1994, Tikit has over 180 employees in 5 offices in the UK as well as Madrid and Paris in mainland
Europe.
Tikit offers a broad range of legal and accountancy focused consulting services and software, from client relationship management
and document management to networking and training.
Tikit’s team has an unparalleled level of experience in delivering IT solutions for law firms. Having worked on hundreds of
major IT implementations in the legal environment, Tikit’s consultants and technologists have a deep understanding of the
issues that law firms face and the solutions that can deliver real value.
Having gained valuable experience in the legal sector , Tikit took their best of breed solutions into another professional
services market and now provide accountancy practices with these productivity enhancing solutions. Tikit has established a
strong presence in the accountancy market working with over 250 accountancy practices including 4 of the top 5
in the UK.
As well as working with best of breed partners, Tikit also has a history of developing innovative
proprietary software packages to answer law firms’ specific needs to further
enhance the return on investment for its clients.
About Us
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Tikit Group plc
Annual Report 2006
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Managed Support
Tikit provides a comprehensive range of support
services to help firms make the most of their
investment in IT. Tikit can offer 24/7 IT helpdesk
support for firms of any size to ensure that
problems are quickly and efficiently resolved.
Firms outsource their entire IT department to Tikit,
removing the hassles and complexity of a non-core
function.
Tikit has a dedicated software development team
which has extensive experience working with the
systems commonly used by law firms. Tikit uses its
experience of the legal sector , combined with direct
feedback from its legal clients, to identify industry
specific issues and develop software solutions that
directly answer legal clients’ needs.
The group has designed and built a range of
proprietary add-on technologies that offer powerful,
legal-specific tools that accommodate the industry’s
particular working patterns. Tikit has over 150
clients worldwide using its products including a high
proportion of the largest law firms in the US.
Training Services
Tikit Training Services is a highly skilled and
experienced technical training division with a
specialist understanding of both law firms and
accountancy practices. Tikit’s training consultants
provide a wide range of services with public courses,
onsite training and bespoke courses available across
all of Tikit’s key product areas.
Network & Integration Services
Tikit’s Network & Integration Services group is
committed to supplying, installing, maintaining and
supporting hardware and software solutions. The group
has 25 years’ experience working with professional
service organisations, with a strong foothold within law
firms and accounting practices. They are therefore able
to design the IT support solution specifically to address
the needs of growing businesses.
>> Managed Services Practice Groups
>> Product Development Group
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>> What Our Clients Say
About Us
We’ve been working with Tikit for a long time now and
their understanding of our marketplace is unmatched.
They really understand the different problems faced by
law firms and are always able to source or develop new
products to help fix them. Tikit are about more than just
straight IT — they help us develop new ways of working
that have made a real difference to our business.
Janet Day, IT Director,
Berwin Leighton Paisner LLP
This year we are making a significant investment in our
IT infrastructure with the implementation of new
Content Management and Client Relationship
Management systems and we have enlisted Tikit as our
natural IT partner . Tikit has been providing IT services to
us for over ten years now and we are confident that
their knowledge and experience will help to ensure the
successful roll-out of these new systems across our
global offices.
Chris White, IT Director,
Ashurst
What makes Tikit really stand out from the crowd is the
level of commitment and effort they put into maintaining
a strong relationship with their clients. When we have a
major IT issue we know that Tikit can be relied upon to
go that extra mile to help us out and that makes a real
difference when it comes to choosing a supplier .
Simon Kosminsky, IT Director,
SJ Berwin LLP
Tikit has provided us with Business Intelligence
consultancy and training and advice on international
aspects of finance system set-up. What’s really made a
difference is the level of expertise and experience that
they can offer . As well as their general understanding of
the legal marketplace and how large law firms work, they
can offer us consultants who are trained accountants
and therefore offer a deep understanding of our needs
and system requirements from a finance perspective.
Mike Giles, Finance Director,
SJ Berwin LLP
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Tikit Group plc
Annual Report 2006
>> Leading Position in the Market
Legal Vertical
UK
Legal Vertical
EU
USA
Accounting Vertical
UK
10
45 4
92
114 20 250
18 17
Top 10
Top 50 Top 5
Top
50
Top 100
Top 200
Top 30
Top 50 Top 500
 Shows the number of clients who have purchased one or more solutions 135 13534 30/03/2007 Proof 7
During 2006 the Group achieved
record sales and profits
Introduction
I am pleased to be able to announce
excellent results for Tikit Group plc for
the year ended 31 December 2006. The
Group undertook a number of
acquisitions during late 2004 and 2005
and the focus for 2006 was to secure
good organic growth from the enlarged
Group and at the same time improve
operating margins across all of the
business areas.
We achieved overall revenue growth of
17% in 2006 compared with 2005 and
operating margins improved from 10.4%
to 12.3%. Profit before taxation, goodwill
amortisation and share option charges
increased by 38% to £2.9 million
compared with 2005 (£2.1 million).
Good progress has been made
throughout the business including major
project wins with our existing large legal
clients and significant success from our
recent move into the accountancy sector .
Our operations in France and Spain
performed ahead of plan.
Results
Turnover for the period increased by
17% to £23.5 million (2005: £20.2
million). Within this, consultancy and
managed services businesses increased
by 13% to £15.3 million (2005: £13.5
million) of which £8.0 million (2005:
£7 .2 million) related to managed
services turnover , representing
recurring revenues of 34% of our 2006
turnover . The improvement of operating
margins from 10.4% to 12.3% reflects
higher utilisation rates of our
chargeable staff and efficiencies gained
through the integration of managed
services operations and reducing some
lower margin business in non-strategic
areas such as hardware sales.
The Group improved profits by 38%,
achieving a profit before taxation,
goodwill amortisation and share option
charges for the period of £2.9 million
(2005: £2.1 million).
The figure for pre-tax profit after share
option charges and goodwill
amortisation increased by 233% to £2.1
million (2005: £0.6 million). Following a
review by the Board of the Group’s
goodwill amortisation accounting policy,
the goodwill charge for 2006 was made
on the basis of a ten-year amortisation
period (2005: five years). As a result
goodwill amortisation in the year was
£0.64 million (2005: £1.34 million).
Share option charges during the period,
as required by FRS 20, were £127 ,000
(2005: £126,000).
Earnings per share before goodwill
amortisation and share option charges
increased by 38% to 18.0 pence (2005:
13.0 pence). Basic earnings per share
were 12.0 pence (2005: 1.7 pence).
Chairman’s Statement
>> Mike McGoun
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Cash generated from operations was
£3.6 million (2005: £2.1 million). Our
balance sheet remains strong, with net
assets at 31 December 2006 at £6.2
million (2005: £5.2 million), including
cash balances of £4.2 million (2005:
£2.3 million).
During the year , we took the opportunity
to use £392,000 of our cash resources
to purchase 203,535 Tikit shares in the
market for cancellation, as we believed
this to be immediately earnings
enhancing.
In order to facilitate a proposed new
Long Term Incentive Plan (LTIP), for key
personnel, the implementation of which
is subject to shareholder approval,
100,000 Tikit shares were purchased in
the market during 2006 at a cost of
£234,000 and these, together with a
further 100,000 purchased in January
2007 at a cost of £258,500, are
available to satisfy the award of shares
under the proposed LTIP.
Dividends
Given the ongoing strength of the
business and our excellent record of
cash generation from operations, the
Board has decided upon a more
progressive dividend policy. A final
dividend of 2.75 pence per share is
proposed. It is to be paid on 7 May 2007
to shareholders on the register on
30 March 2007 . This, when taken with
the interim dividend of 1.25 pence
(2005: 0.75 pence), brings total
dividends for the year to 4.0 pence
(2005: 2.5 pence), an increase of 60%
over the previous year .
Employees
I would like to take the opportunity to
thank the directors and employees of
the Group for their contribution in
delivering this excellent set of results.
Executive Long Term Incentive Plan
(LTIP)
Since its public listing in June 2001, Tikit
has been very successful in generating
not only profits, but also, more
importantly, cash from its operations.
This generation of cash has enabled us to
make acquisitions and fund our growth
without recourse to the capital markets.
Although an issue of new Tikit shares has
sometimes been used partially to fund
acquisitions, the rate of growth of the
issued share capital has been
significantly less than the rate of growth
of the company. As a result, the ability of
the company to grant share options
within the ABI guidelines (which restrict
the issue of options over a ten year
period to a maximum of 10% of the
issued share capital) is severely limited.
The proposed Long Term Incentive Plan
(LTIP) is performance related and
provides incentives to key executives and
staff to remain with the business and
share in the increase in shareholder
value over the next three years.
The proposed LTIP requires shareholder
approval at the company’s Annual
General Meeting to be held on 3 May
2007 . In the notice convening the
Group’s Annual General Meeting the
necessary resolution is set out together
with explanatory details of the proposed
scheme. It is proposed that share
options over 250,000 Tikit Group plc
shares are granted to the senior
management team with a nominal grant
price. There are currently 200,000
6:7
Tikit Group plc
Annual Report 2006
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The overriding Group objective is to continue to
focus on the provision of IT systems and support
to large law firms.
shares held in treasury. An additional
50,000 shares will, if required, be
purchased in the market and held in
treasury. These options may vest at the
end of a three-year period and will be
subject to an earnings per share growth
target over three years. For the
maximum number of shares to vest
under this scheme, a compound growth
rate of 20% per annum in normalised
earnings per share has to be achieved.
For this purpose, normalised means the
fully diluted earnings per share of the
company taxed at the standard
corporation tax rate of the company and
before goodwill amortisation and share
option charges.
Most of the cost to the company will be
fixed at the outset as 80% of the
maximum number of shares to vest
under this scheme have already been
purchased and held in treasury. No
dilution of the existing issued share
capital through the issue of new shares
will occur .
As at 31 December 2006, there were
unexercised options granted over
638,778 shares under existing Group
share options schemes, representing
approximately 5.0 % of the existing
issued share capital of the company. If
the proposed LTIP is approved and
implemented, share options over an
additional 250,000 shares representing
approximately 1.9% of the company’s
existing issued share capital will be
granted.
Business review and prospects
The purpose of this section is to give
shareholders a summary of the
prospects of the business. The
performance in 2006 is a good indicator
of the skills that currently exist within
the Group and the financial results show
how effectively those skills are
employed.
The overriding Group objective is to
continue to focus on the provision of IT
systems and support to large law firms
and accountancy practices. Tikit has
established itself as a leading supplier to
this market in the UK and remains
focused on expanding its market share.
In addition, we seek to become the
Chairman’s Statement
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leading supplier of these services and
products to the large firms in mainland
Europe.
The large UK law firms and accountancy
practices have announced significant
recent growth in their businesses and
are investing commensurately in their IT
systems. Tikit is ideally positioned to
provide consultancy, services and
products to help these firms derive
maximum benefit from their IT
investment. In 2006, we estimate that
the top one hundred law firms in the UK
spent approximately £500 million on IT
products and services. The top fifty
accountancy firms spent an estimated
£300 million. At this stage of our
development we do not believe that the
size of our chosen market is a limit to
our growth.
Tikit’s competitive advantage is that it is
a specialised business focused on the
large legal and accountancy markets.
This differentiates us from general IT
consultancy organisations. Our
relationship with clients is from a service
perspective in that we understand how
large law firms and accountancy
practices work, their language and
culture. We understand their business
issues and can help them identify
potential IT-based solutions to those
issues. We differentiate ourselves from
software vendors by our independence
and, whilst we have strong relationships
with our software partners, our strength
is that we endeavour to select the best
of breed software appropriate to our
clients’ needs and are not committed to
providing standard solutions. There may
be some short-term risk associated with
this strategy given that new software
developments may render existing
partnership arrangements
inappropriate. This may lead to short-
term direct competition from software
vendors.
Our focus remains on achieving strong
organic growth. At the same time we
continue to look for businesses, products
or services that can further expand our
current portfolio. We also believe that
Tikit is well positioned to participate in
the consolidation that is taking place in
both the legal and accountancy sectors.
The average size of the top one hundred
UK law firms continues to rise faster
than the overall market because of
merger activity. We believe that the large
UK law firms will lead consolidation
across Europe and that Tikit, with its
strong client base among those firms,
will benefit from this.
The Group’s pipeline of consultancy and
implementation projects should provide
the opportunity to schedule resources
more efficiently and improve utilisation.
The managed services group will
continue to streamline its services so
that clients can benefit from the full
range of support offerings, from
hardware and infrastructure support to
onsite support for complex applications.
In addition, the introduction of a number
of new software products during 2006 is
expected to result in additional sales in
2007 and beyond.
The key performance indicators (KPI’s)
used by your Board to measure the
success of the business remain those
that have underpinned our success to
date. The most important of these is
8:9
Tikit Group plc
Annual Report 2006
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When your board considers risk issues
going forward, the prominent element
is dependence on our people.
customer retention, especially reflected
in support contract renewal rates.
Following our first year in business,
some 13 years ago, we have had annual
renewal rates in excess of 90%. With 92
of the top one hundred UK law firms as
clients and 18 of the top fifty
accountancy practices, it is essential
that we retain existing clients at the
same time as winning new ones.
The second KPI is the organic growth of
our revenues and this should be at least
as great as that of the top one hundred
firms. In addition, we seek to add
additional services so that our actual
revenue growth is higher . The third KPI
is the operating margin that we are able
to achieve. Since inception in 1994, Tikit
has had operating margins in excess of
10%, with the exception of the year
ended 31 December 2002 where
operating margin was 6.5%. We aim to
have operating margins of 12.5%. A final
KPI is our ability to generate cash from
our operating activities — in our view,
the true measure of profit. This is an
area where Tikit has excelled over the
years. We aim to achieve a conversion
ratio of profit before tax to cash of at
least 100%.
In commenting upon the capital
structure of the company, I draw
attention to the acquisitions made by us
that have largely been funded by the
cash generated by the business. We have
been able to act quickly without incurring
the time and costs associated with equity
or debt fundraisings. The company has
had no debt since its inception in 1994.
However , we continue to consider the
most appropriate capital structure given
the outlook for interest rates on long-
term debt. There is a determination not
to hold surplus cash and we will return
such cash to shareholders by a
combination of the progressive dividend
policy where it is our intention to provide
shareholders with a yield over 2%,
combined with the purchase of shares in
the market for cancellation.
Business review — risks
When your board considers risk issues
going forward, the prominent element is
the dependence on our people. We
recognise the value of their
Chairman’s Statement
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commitment and are conscious that we
must keep the reward systems, both
financial and motivational, in place to
minimise this area of risk; our proposed
LTIP is an example of this. A second risk
issue, competition, arises in relation to
our strong position with the large law
firms. Given that there is no external
direct competition of any size in this
market, we must be careful not to abuse
our position. The main competition issue
in any project proposal is whether a law
firm’s internal IT department may wish
to undertake the assignment itself.
Accordingly, our services are designed
to complement and assist internal staff
rather than replace them. Finally, we are
aware of the supply risk of losing key
software partners. This would have a
short-term impact as we sought to
identify and then train our staff in a
suitable alternative product. We have an
excellent record of maintaining good
relationships with our software partners
and usually get notice of impending
changes in time to minimise the impact
on Tikit.
Environmental policies
The Group acknowledges the
importance of environmental matters
and where possible, utilises environment
friendly policies in its offices, such as
recycling and energy efficient practices.
Summary and prospects
In summary, 2006 was an excellent year
for the Group. We enter 2007 with a
good order book of projects to be
implemented, reflecting a blend of
consultancy, support and software
business sold in the last quarter . The
targets we have set ourselves for 2007
and 2008 are challenging and, if met,
will lead to further significant
improvements in the trading
performance of the Group and to
earnings per share. Tikit’s opportunities
are many and your Board continues to
be optimistic about the trading
prospects of the Group.
Mike McGoun
Chairman
Tikit Group plc
21 March 2007
10:11
Tikit Group plc
Annual Report 2006
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Chief Executive’s Statement
2006 has been very encouraging with a number
of large projects awarded to Tikit.
Operating review
All parts of the business made positive
contributions to the Group’s results in
2006. The Group currently operates and
is managed across three co-ordinated
business streams: Consultancy,
Managed Services and Software Sales.
Clients are delivered an integrated
solution based upon a managed blend
of these three areas of expertise.
The table below summarises Group
sales by business category.
Consultancy
Tikit continues to be the leading
provider of Document Management
(DM) systems to large law firms and
undertook consultancy assignments
with over fifty clients in the year
including major projects at Simmons
and Simmons, Slaughter and May, SJ
Berwin and Bevan Brittan. New
document management systems were
also implemented at two large Scottish
firms: Shepherd and Wedderburn and
Andersen Strathern.
Our Client Relationship Management
(CRM) team undertook assignments at
over sixty clients during 2006 with
major projects at Simmons and
Simmons and SJ Berwin in the UK and
De Brauw in Holland. This team has also
had significant success in the
accountancy arena, completing a major
project at Grant Thornton, utilising both
Tikit’s own eMarketing Solution and
Twelve months to 31 December Increase/
2006 2005 Decrease
£m £m %
Consultancy 7.3 6.3 16
Managed services 8.0 7 .2 11
Software sales 7.4 5.7 30
Other (incl. hardware) 0.8 1.0 (19)
TOTAL 23.5 20.2
>> David Lumsden
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LexisNexis’ InterAction software. Our
CRM system is deployed across Grant
Thornton’s 32 UK offices, totalling some
1,600 users. In addition, Tikit undertook
extensions to the CRM systems installed
at Ernst & Young offices, both in the UK
and Australia. A significant number of
these projects also benefited from the
data auditing and cleansing expertise of
the Shamrock team.
Shamrock have also been adding value
to our accounting and legal clients by
providing outsourced marketing
campaign activities.
Our Practice Management Systems
(PMS) group are recognised experts in
the back-office systems upon which law
firms are reliant. They have undertaken
a number of assignments to help clients
implement PMS systems and, for HM
Government’s Treasury Solicitors, have
installed a new Time Recording system
for over 500 users, based upon the
Sage Carpe Diem system. They have had
early success with Redwood software,
sold exclusively by Tikit in the UK, for
financial planning and budgeting, with
installations under way at Clarke
Willmott, CMS Cameron McKenna and
SJ Berwin.
Tikit is continuing its strong alliance with
Microsoft. We are a Microsoft Gold
certified partner , as well as recently
being awarded our fifth competency, the
Information Worker Solutions
accreditation, in recognition of our
expertise with implementations of
platforms such as SharePoint and
Office. We are currently developing an
innovative portal solution in conjunction
with Eversheds and Microsoft using
Share point and Handshake software,
which we expect to be applicable across
a wide number of professional firms.
A web-based portfolio control and billing
workflow system (developed by Tikit)
has achieved wide adoption at
Freshfields Bruckhaus Deringer . This
project not only shows Tikit’s
understanding of law firm processes but
also its versatility in creating a new
process flow that integrates a range of
existing applications.
Managed services
Good progress is being made in the
provision of outsourced, infrastructure
support services to law firms through
our Network and Infrastructure Support
(NIS) division. Historically specialising in
the accountancy sector , NIS has, this
year , won large projects with Brabner
Chaffe Street and Dickinson Manser in
the legal sector as well as continuing its
business with the large accountancy
practices. The major work in 2006 has
been a number of complete server
refresh projects incorporating Microsoft
Exchange and full security and network
management implementations. Of
particular note is the exciting project at
Chantry Vellacott which will be
implemented in 2007 and which will
standardise IT systems across all six UK
offices.
12:13
Tikit Group plc
Annual Report 2006
13534TIKITGRO:13534TIKITGRO  12/4/07  08:41  Page 13 Chief Executive’s Statement
The acquisitions we made in 2005 have
performed well.
Recent improvements to our document
editing and classification service in
Yorkshire, which provides clients with a
cost effective way of classifying their
key documents to enhance the value of
their knowledge management systems,
is delivering greater benefit to both Tikit
and its clients.
Software sales
2006 has been very encouraging with a
number of large projects awarded to
Tikit, many of which were tendered for
in 2005. Total revenues for the year
ended 31 December 2006 from all
software sales were £7 .4 million (2005:
£5.7 million), an increase of 30% on the
prior year .
We are Interwoven’s preferred partner
in the legal and accountancy market
sector , being awarded their Global
Partner of the Year award for the
second year running. The recent
announcement of Tikit signing its one-
hundredth Interwoven WorkSite client
illustrates our continued success in
this area.
Tikit has invested resources into several
other new technologies such as iBox, a
new indexing and search tool which
combines taxonomy management,
browsing and searching in a new way
especially suited to use by law firms, and
is undertaking a pilot implementation at
one of the UK’s largest law firms.
Another such initiative is with
Microsystems D3, which provides clients
with software and a service to ensure
that working documents are stripped of
unnecessary metadata and that styles
and formatting are consistent. Early
adopter projects are already underway
with a number of clients.
Product development
In conjunction with third-party software
products, Tikit has developed a number
of software application packages, which
typically provide additional functionality
in key application areas. One of these
products, the eMarketing Solution
(which includes E-Merge and ReAction
Server) is now installed in 152 clients
worldwide with sales secured not only in
the UK but also in the USA, Canada,
Ireland and Australia. We achieved sales
of £734,000 of our own IPR in the year
(2005: £660,000).
135 13534 30/03/2007 Proof 7
13534TIKITGRO:13534TIKITGRO  12/4/07  08:41  Page 14 Following on from the success of the
eMarketing Solution we have recruited
extra people to provide more focus on
creating and developing more Tikit own
brand software products. These
products will provide further
functionality and management to key
application areas within law firms and
will initially be aimed at Interwoven
WorkSite and Microsoft Word.
Overseas
The French subsidiary, LecSoft, is
developing well, with a particularly
strong performance in the second half
of the year . Our Spanish operation
continues to focus on gaining market
share, presence and reputation and
made a small contribution to profits in
2006. Total overseas sales including our
operations in France and Spain
accounted for 22% of sales in the year
ended 31 December 2006.
Summary
Overall Tikit had a very good year
operationally and the acquisitions that
we made in 2005 have performed well.
Tikit operates in a market where people
and their relationships are absolutely
critical to the success of the business
and the quality of the newer people
coming into Tikit together with the
enthusiasm and support from Tikit’s
existing staff has enabled the business
to be significantly stronger than at the
same time last year . I would therefore
like to thank every employee of Tikit for
contributing to the success we enjoyed
in 2006.
David Lumsden
Chief Executive
Tikit Group plc
21 March 2007
14:15
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The Group achieved another record year with
both turnover and profits growing strongly
The financial statements have been
prepared in accordance with generally
accepted accounting principles in the UK
and cover the results for the Group for
the year to 31 December 2006.
Trading
The Group achieved another record
year with both turnover and profits
growing strongly. Total turnover in the
year was £23.52 million (2005: £20.16
million) — an increase of 17%.
Group profit on ordinary trading
activities, before taxation, amortisation
of goodwill and share option charges
was £2.89 million (2005: £2.10 million) —
an increase of 38%.
A detailed review of the performance of
the business can be found in the
Chairman’s and the Chief Executive’s
Statements.
Taxation
Based on the Group profit before tax,
amortisation of goodwill and share
option charges, the current year tax
charge is an effective rate of 21.8%
(2005: 19.6%). In 2006 the charge
benefited from the utilisation of tax
losses acquired on the purchase of Tikit
NIS Limited on 17 December 2004 and
the exercise of share options. The
standard rate of corporation tax in the
UK is 30%.
Earnings and dividends
The Group measures its adjusted
earnings per share performance on
trading results after excluding goodwill
amortisation and share option charges
from the calculation. Adjusted basic
earnings per share, based on the actual
shares in issue, was 18.0p (2005: 13.0p),
an increase of 38%. Basic earnings per
share was 12.0p (2005: 1.7p). The average
number of shares in issue in the year was
12.54 million (2005: 12.53million).
When determining dividend policy,
current earnings, future prospects and
Financial Review
>> Paul Giuffredi
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future cash flows are taken into account.
This year the Board is recommending a
final dividend of 2.75p (2005: 1.75p)
which when combined with the interim
dividend of 1.25p gives a total dividend
for the year of 4.0p (2005: 2.5p) — an
increase of 60%. The dividend is
covered 4.4 times by post-tax earnings,
after adding back goodwill amortisation
and share option charges.
Cash flow
Cash inflow from operating activities of
£3.58 million (2005: £2.10 million)
reflects our usual strong conversion of
profit to cash. The year end bank
balances increased by £1.82 million to
£4.15 million.
Financial instruments
The Group’s financial instruments
comprise cash, liquid resources, trade
debtors and trade creditors. The main
risks arising from these financial
instruments are interest rate risk,
liquidity risk, credit risk and foreign
currency exchange rate risk. The
policies for managing each of these
risks are as follows:
Interest rate risk
The Group is cash positive and places its
balances on short-term deposits with
highly regarded financial institutions.
Changes in interest rates will affect the
return on cash balances. The Group
does not hold or issue derivative
financial instruments.
Liquidity risk
The Group is cash positive and has a
policy of ensuring sufficient funds are
always available for its operating
activities. While the need for borrowing
facilities are not required at present, the
Board continually monitors the Group’s
cash requirements.
Foreign currency exchange risk
Part of the cash at bank is held in euro
and US dollar accounts. There are also
trade balances and investments in these
currencies. The Group’s foreign
exchange risk is hedged by way of
forward exchange contracts where
appropriate and any resulting gains or
losses are recognised in the profit and
loss account.
Credit risk
The Group has a small exposure to
credit risk from credit sales. It is the
Group’s policy to assess the credit risk of
new customers before entering into
contracts.
Shareholder information
The Group’s website at www.tikit.com
contains a wide range of information
about our activities and visitors can
download copies of the report and
accounts as well as newsletters and
matters of interest.
Paul Giuffredi
Finance Director
Tikit Group plc
21 March 2007
16:17
Tikit Group plc
Annual Report 2006
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>> Group Directors
Mike McGoun
Executive Chairman
Mike has a wealth of management experience
within the IT industry. He spent 10 years at IBM
prior to co-founding a successful ComputerLand
franchise in 1989. In 1994 Mike moved to
Skillsgroup plc (now known as QA plc) as a main
board director , with responsibility for corporate
development and later as a non-executive
director . Mike was appointed as a non-executive
chairman of Tikit in 1997 , becoming part-time
executive chairman in 2000 and part-time
executive chairman of Tikit Group plc on 1 June
2001.
Nicholas Briant
Non-Executive Director
Nicholas is a solicitor and has been a partner of
Taylor Wessing, a leading city law firm for over
20 years. He is an acknowledged expert in the
legal and commercial aspects of corporate
finance, flotations, mergers and acquisitions (of
a public and private nature) and private equity
transactions. He was appointed a
director of Tikit in May 2001.
David Lumsden
Managing Director
David’s expertise of legal IT spans nearly 25 years.
Whilst at Wang, David implemented systems at
firms such as Linklaters, Denton Wilde Sapte and
Masons. In 1990 he joined Ashurst, a leading city law
firm, as head of its UK IT function. In 1997 he moved
to Tikit and brought with him a wealth of knowledge
gained at Ashurst and set up a Support Services
team to provide the service to law firms that he felt
was missing. Following the success of this team he
joined the Tikit Limited Board in 1999 and was
appointed Managing Director in 2000. He became
Group Managing Director on 1 June 2001.
Richard Price
Senior Non-Executive Director
Richard is a chartered accountant and tax specialist
by training. He co-founded BPP Holdings plc, a training
and publishing group, in 1976 and was Chairman of the
organisation until mid-2002. BPP Holdings plc has
been a listed company since 1986 and has a market
capitalisation in excess of £100 million.
Richard was appointed a director
of Tikit in May 2001.
Paul Giuffredi
Group Financial Director
Paul qualified as a chartered accountant at
KPMG. He then spent four years at Costain
Group PLC in a group accounting role working
on a number of corporate finance transactions.
In 1996 he moved to GE Information Services
(now GXS), a division of the US conglomerate
General Electric. At GE he held a number of roles
including UK Finance Director . Since 2000 he
has been finance director of two private equity
backed companies. He joined Tikit in August
2005.
Left to right: Nicholas Briant, Paul Giuffredi, David Lumsden, Mike McGoun, Richard Price
Directors
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Liam Flanagan
Sales Director
Liam Flanagan was co-founder of Tikit in 1994 and
has been the creative force behind the organisation
for 13 years. He has been responsible for sourcing a
wide range of products and has established
LexisNexis’ InterAction CRM system and
Interwoven’s WorkSite DM system as the systems of
choice for the UK legal market. Liam’s industry
knowledge is unsurpassed and is the result of 16
years in the legal IT sector , he previously spent time
with AEG Olympia and SystenHouse Inc. More
recently, Liam set up Tikit’s Office Productivity
Group in recognition of the importance of Microsoft
Word and continues to source and drive the
development of innovative products such as Interse
iBox, Microsystems D3 and the new Tikit Template
Management System which deliver real value to
Tikit’s target markets and existing clients.
Gordon Simpson
Technical Director
Gordon joined ComputerGroup in 1988 as a systems
integration manager , transferring to SHL ’s Geneva
office in 1992 where he was responsible for managing
a number of large-scale systems integration projects.
He has been a director at Tikit since it was formed
twelve years ago. In that time he has been responsible
for over 75 document management implementations,
25 knowledge management implementations and 50
CRM implementations as well as various other legal
project areas.
Ivor Owen
Operations Director
Ivor spent 10 years working as a communications
specialist in the Royal Corps of Signals before
joining Wilde Sapte in 1989 where he was IT &
Operations Manager with responsibility for the day-
to-day management of the firm’s IT department.
When Wilde Sapte merged with Denton Hall, Ivor
became IT manager of the merged firm, responsible
for all European IT services. Ivor joined Tikit in 2000
and has used his management experience to
continue to develop the Managed Services team.
Mike Bailey
BPM Director
After qualifying as a Chartered Accountant in 1990,
Mike has worked exclusively within the legal market
for software resellers and consultancy
organisations. Since 1996 he has specialised in the
practice management arena, initially as General
Manager of CMS Europe (now Aderant), and more
recently as an implementation consultant
specialising in the issues associated with the
implementation of systems in a global environment.
Danny Hoffman
Network & Integration Services Director
Danny spent 4 years at the BBC before moving into
Information Technology. He joined MICL, who
specialised in supplying software to the accounting
profession 20 years ago and progressed to the role
of Technical Director building a dedicated
infrastructure division dealing with nearly 200
professional service organisations. Following various
acquisitions his team now form Tikit’s Network &
Integration Services group.
Neil Renfrew
Professional Services Director
Neil Renfrew began his career in legal IT as a software
developer with Olivetti in Edinburgh. In 1984 he set up
the company that became ResSoft and was
responsible for the design of systems such as
FirmControl (for Linklaters), FirmWare (for Freshfields)
and Panaseea (for Slaughter and May). In February
2005, following the acquisition of ResSoft, Neil
became Tikit’s Professional Services Director , bringing
with him a wealth of IT, project management,
solutions design and systems integration
and implementation experience.
Steve Knowles
Managed Services Director
Steve has over 20 years IT industry experience.
Steve has held a number of roles including Business
Development Manager for Plumb Center Ltd,
Financial Director and Company Secretary at Brandt
Computers Ltd before moving to ResSoft Ltd where
he was Client Services Director and Company
Secretary. Following Tikit’s acquisition of ResSoft,
Steve now works as Managed Services Director for
Tikit and has been responsible for extending the
services offered by Tikit’s Managed Services Group.
>> Tikit Directors
Left to right: Liam Flanagan, Steve Knowles, Ivor Owen, Danny Hoffman, David Lumsden, Gordon Simpson, Paul Giuffredi, Neil Renfrew
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>> Corporate Governance Statement
Statement by the directors on
compliance with the Combined Code
The company is listed on the Alternative
Investment Market (AIM) and is
therefore not required to comply with
the provisions of the 2006 Financial
Reporting Council’s revised Combined
Code. Nevertheless the Board is
committed to ensuring that proper
standards of corporate governance
operate throughout the Group and has
followed the principles of the Code so
far as is practicable and appropriate for
the nature and size of the Group.
A statement of the directors’
responsibilities in respect of the financial
statements is set out on page 26. Below
is a brief description of the role of the
Board and its Committees, followed by a
statement regarding the Group’s system
of internal controls.
The Board
The Board comprises two non-executive
directors and three executive directors
and is responsible to shareholders for
the proper management of the Group.
The non-executive directors are Richard
Price (the senior non-executive director)
and Nicholas Briant and the Board
consider both to be independent. The
Board meets regularly, reviewing trading
performance, setting and monitoring
strategy, and examining major capital
expenditure and acquisition
opportunities. All directors have access
to the advice and services of the
Company Secretary. Any director
appointed during the year is required,
under the company’s Articles of
Association, to retire and seek re-
election by shareholders at the next
Annual General Meeting. It is company
policy that each director retires and
seeks re-election every three years.
Audit Committee
The Audit Committee comprises the two
non-executive directors of the company
and is chaired by Richard Price. Its terms
of reference require it to meet not less
than twice each year and it provides a
forum for reporting by the Group’s
auditors. By invitation, the meetings are
also attended by the Chairman,
Managing Director and the Finance
Director .
The Audit Committee is responsible for
reviewing a wide range of financial
matters including ensuring that the
financial performance of the Group is
adequately measured and controlled,
correctly represented, reported to and
understood by the Board. The Audit
Committee advises the Board on the
appointment of external auditors and on
their remuneration, both for audit and
non-audit work, and discusses the
nature and scope of their audit.
The Committee meets the auditors at
least once a year without any executive
directors present.
Remuneration Committee
The Remuneration Committee
comprises the two non-executive
directors and is chaired by Nicholas
Briant. Details of the executive
remuneration policy is set out in the
separate Remuneration Report.
Individual directors’ remuneration
packages are included in the
Remuneration Report on page 23.
Nominations Committee
The Nominations Committee comprises
the chairman and the two non-executive
directors. It is responsible for making
recommendations to the Board on all
new appointments to the Board and
considering and making
recommendations as to the Board’s
composition and balance.
Going Concern
Having reviewed the future plans and
projections for the business, the
directors believe that the company and
its subsidiary undertakings have
adequate resources to continue in
operational existence for the
foreseeable future. For this reason, they
continue to adopt the going concern
basis in preparing the financial
statements.
Internal Controls
The directors are responsible for the
Group’s system of internal control and
for reviewing its effectiveness which, by
its nature, can only provide reasonable
and not absolute assurance against
material misstatement or loss.
The Board has reviewed the
effectiveness of the Group’s internal
control systems for the period 1 January
2006 to the date of approval of the
financial statements. The Board will
continue to review the effectiveness of
its control assessment system on a
regular basis.
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The Board has established procedures
which are designed to provide effective
internal control for the Group and these
include:
Control Environment and Procedures
The directors have in place an
organisational structure with clearly
defined levels of responsibility and
delegation of authority.
Control procedures include annual
budget approval and monitoring of
actual performance. Formal staff
appraisal procedures and training
programmes are in place. Capital
expenditure requests are reviewed by
the Board and appropriate due diligence
work will be carried out when a business
is to be acquired.
It is Board policy that executive directors
receive suitable training for their
position, which is considered as part of
the appraisal process.
Risk Management
The directors and operating company
management have a clear responsibility
for identifying risks facing each of the
businesses and for putting in place
procedures to mitigate and monitor
risks. Risks are formally assessed during
the annual budget process, which is
monitored by the Board, and the
ongoing Group strategy process.
Financial Reporting
The Group has a comprehensive system
of financial reporting. There is a detailed
budgeting system in place which
includes the plan of each operating
company being approved by the
executive directors and the Board
approves the overall Group budget. On a
monthly basis, actual results are
reported against budget and any
significant adverse variances examined
and remedial action taken where
necessary.
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>> Remuneration Report
The Remuneration Committee is
constituted in accordance with the
Combined Code. The Committee is
composed entirely of non-executive
directors, who are believed by the
company to be independent, as set out
on page 20. The Chairman during the
year was Mr Nicholas Briant. The terms
of reference for the Committee are to
determine the Group’s policy on
executive remuneration and to consider
and approve the remuneration packages
for directors subject to ratification by
the Board. During the financial year the
Committee met a total of 3 times.
Policy on executive director
remuneration
The Group’s current and ongoing
remuneration policy aims to ensure that
executive directors are fairly rewarded
for their individual contributions to the
Group’s overall performance and is
designed to attract, retain and motivate
executives of the right calibre. The
Committee is responsible for
recommendations on all elements of
directors’ remuneration including, in
particular , basic salary, annual bonus,
share options and any other incentive
awards. In implementing the
remuneration policy the Committee has
regard to factors specific to the
company, such as salary and other
benefit arrangements within the Group
and the achievement of the Group’s
strategic objectives.
The Committee determines the Group’s
policy on executive directors’
remuneration with reference to
comparable companies of similar
market capitalisation, location and
business sector .
Basic salary
The basic salaries of executive directors
are reviewed annually having regard to
individual performance and position
within the company and are intended to
be competitive but fair using
information provided from both internal
and external sources. The performance
related annual bonus forms a significant
part of the level of remuneration
considered appropriate by the
Remuneration Committee. Details of
directors’ emoluments are set out on
page 23.
Performance related annual bonus
The percentage of basic salary on which
annual cash bonuses are based is set by
the Committee. The 2006 bonuses paid
to executive directors on achievement
of the target Group profits before tax
are shown in the remuneration table on
page 23. Target based bonuses payable
to the executive directors for the 2007
financial year will be on a similar basis
and capped at a maximum of 40% of
basic pay, including any pension
contributions. In determining whether a
bonus payment is made or not, the
Committee will consider any factors that
may alter the targets against which
performance is measured and adjust the
level of bonus accordingly. In addition to
the formal bonus scheme, the
Committee has the discretion to
recommend the payment of ad hoc
awards to reflect exceptional
performance.
Incentive plans
No new share options were issued to
directors or senior management in
the year . An outline of the proposed new
Long Term Incentive Plan is set out in
the Chairman’s Statement.
Pensions
Contributions are made to the executive
directors’ personal pension schemes up
to a maximum of 10% of basic salary.
Details of directors’ pension
contributions are set out on page 23.
Other benefits
The Committee aims to provide an
objective and independent assessment
of all benefits granted to directors.
Service contracts
The executive directors have rolling 12
month service contracts with notice
periods of 12 months. Directors are
entitled to a non-pensionable bonus
subject to achieving the targets set by
the Remuneration Committee for the
bonus scheme in place for the year in
question (as set out at the beginning of
this report). No director receives
additional remuneration or benefits in
relation to being a director or sitting on
the board of any Group company.
Policy on remuneration of non-
executive directors
The Board determines the Group’s policy
on non-executive directors’ fees and will
continue to set fees with reference to
the individual director’s role, the
company’s market capitalisation,
location and business sector .
Non-executive directors are not
permitted to participate in employee
share option schemes, neither are they
entitled to participate in the company’s
pension arrangements.
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13534 30/03/2007 Proof 7
The two non-executive directors have
letters of appointment dated 16 May
2001 which specify that their
appointment lasts for a renewable three
year term initially to 15 May 2004.
Following expiration of the initial term
the appointments have been extended
on an annual basis.
Advisers to the Remuneration
Committee
Any advisers to the Remuneration
Committee are appointed and instructed
by the Committee members. No such
advisers were appointed in 2006.
Remuneration of directors
The remuneration of directors who
served during 2006 is shown in the
table on page 23. Remuneration
includes management salaries, taxable
benefits and bonuses. Remuneration
shown is in respect of each director’s
period in office during 2006 as a Board
member of Tikit Group plc and includes
remuneration from the company and its
subsidiary undertakings.
The emoluments of individual directors
are as follows:
Salary/ Bonus Benefits Total Pensions
fees in kind 2006 2005 2006 2005
£’000 £’000 £’000 £’000 £’000 £’000 £’000
M McGoun 96 20 1 117 91 — —
D Lumsden 113 40 1 154 154 8 8
A Pearson 29 10 1 40 96 2 4
P Giuffredi 47 10 1 58 — 3 —
N Briant 24 —— 24 22 — —
R Price 22 —— 22 22 — —
331 80 4 415 385 13 12
Prior to his appointment as a director , P Giuffredi received emoluments of £55,000 from Tikit Limited.
Details of directors’ options to acquire ordinary shares in the company are provided in note 5 to the accounts.
Nick Briant
Chairman of the Remuneration Committee
21 March 2007
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>> Report of the Directors
The directors present their annual
report and the audited financial
statements for the year ended
31 December 2006.
Results and dividends
The results of the Group for the year are
set out on page 28 and show a profit
after taxation of £1,503,000 (2005:
£223,000). After adding back goodwill
amortisation and share option charges
for the year , the profit after taxation
increases to £2,259,000 (2005:
£1,690,000). An interim dividend of
1.25p (2005: 0.75p) per share was paid
on 11 October 2006 and subject to
shareholders’ approval, the directors
recommend the payment of a final
ordinary dividend of 2.75p (2005: 1.75p)
per share making a total ordinary
dividend for the year of 4.0p
(2005: 2.5p).
During the year the company purchased
203,535 ordinary shares in the market
for cancellation for a consideration of
£392,000 representing approximately
1.6% of the issued share capital.
Principal activity, review of business
and future developments
The Group is principally engaged in the
provision and maintenance of
information technology products and
solutions. A review of the business and
future developments, that fulfils the
requirements of the Business Review, is
contained in the Chairman’s Statement
in the paragraphs headed “Results”,
“Business Review and Prospects” and
“Business Review — Risks” on pages 6
to 11.
Directors and directors’ interests
The directors who held office during the
year and their beneficial interests in the
share capital of the Company at the end
of the financial year were as follows:
for the year ended 31 December 2006
Ordinary shares Preference shares
of 10p each of £1 each
2006 2005 2006 2005
M McGoun 1,040,890 1,025,890 1,000 1,000
D Lumsden 281,158 381,158 — —
A Pearson n/a 72,757 n/a —
P Giuffredi — — — —
N Briant 6,500 6,500 — —
R Price 6,500 6,500 — —
Details of directors’ interests in options on the ordinary share capital of the company are disclosed in note 5 to the financial
statements.
Substantial holdings
As far as the directors are aware, as at 15 January 2007 , the only holdings of 3% or more of the company’s issued share capital
were as follows:
Percentage Percentage
Number of of issued Number of of issued
ordinary share preference share
shares capital shares capital
M McGoun 1,040,890 8.2 1,000 100
Gartmore Investment Management 827 ,066 6.5 ——
Blackrock Investment Management 810,981 6.4
W Flanagan 7 49,490 5.9 ——
Rensburg Investment Management 677 ,863 5.3 ——
Hargreave Hale & Co 675,000 5.3
M & K Bailey 519,023 4.1 ——
G Simpson 47 4,338 3.7 ——
Rathbone Investment Management 452,075 3.5 ——
Universities Superannuation Scheme 434,783 3.4 ——
Trivest VCT Plc 434,782 3.4 ——
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The Nominee accounts are identified in
the share register but the number and
identity of the underlying holdings have
not been notified to the company.
Creditors’ payment policy
It is the policy of the Group to agree
terms and conditions with suppliers and
to pay in accordance with them,
provided the goods or services
concerned have been supplied in
accordance with those terms and
conditions.
At 31 December 2006 the company had
113 days (2005: 101 days) of outstanding
liabilities to creditors.
Research and development
The Group continues to invest in
carefully targeted, low cost research and
development to identify and write a
number of software enhancement
modules which improve the
functionality of certain third party
applications in a law firm environment.
Expenditure on research and
development is charged to the profit
and loss account in the year it is
incurred but produces intellectual
property rights which are expected to
benefit the Group’s trading results in the
medium and longer term.
Financial instruments
The Group’s financial instruments
comprise cash, liquid resources, trade
debtors and trade creditors. The main
risks arising from these financial
instruments are interest rate risk,
liquidity risk and foreign exchange risk.
The policies for managing these risks
are set out in the Financial Review and
the exposures are contained in note 21.
Employees
The Group has a policy of keeping all
employees fully informed about its plans
and progress through regular meetings,
formal presentations and electronic
communication. Participation by
employees in the progress and
profitability of the Group is encouraged,
where appropriate, through annual
bonus schemes, in addition to the Group
share option schemes. Employee
development is encouraged with formal
staff appraisals and training
programmes.
The Group operates recruitment and
selection procedures which consider all
applicants for employment on the basis
of qualification for specific vacancies
without regard to race, colour , religion,
sex, age, disability or national origin.
Political and charitable donations
The Group made no political
contributions in the year (2005: £Nil).
Donations to UK charities totalled
£2,756 (2005: £1,246).
Auditors
BDO Stoy Hayward LLP have expressed
their willingness to continue in office
and a resolution to reappoint them will
be proposed at the Annual General
Meeting.
Annual General Meeting
The Annual General Meeting will be held
at the company’s registered office on
3 May 2007 .
By order of the Board
P Giuffredi
Company Secretary
Tikit Group plc
21 March 2007
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>> Statement of Directors’ Responsibilities
The directors are responsible for
preparing the annual report and the
financial statements in accordance with
applicable law and United Kingdom
Generally Accepted Accounting Practice.
Company law requires the directors to
prepare financial statements for each
financial year which give a true and fair
view of the state of affairs of the
company and Group and of the profit or
loss of the Group for that period. In
preparing those financial statements,
the directors are required to:
 select suitable accounting policies
and then apply them consistently;
 make judgements and estimates
that are reasonable and prudent;
 state whether applicable
accounting standards have been
followed, subject to any material
departures disclosed and explained
in the financial statements; and
 prepare the financial statements
on the going concern basis unless
it is inappropriate to presume that
the Group will continue in business.
The directors are responsible for
keeping proper accounting records
which disclose with reasonable accuracy
at any time the financial position of the
company and Group and to 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.
Financial statements are published on
the company’s website in accordance
with legislation in the United Kingdom
governing the preparation and
dissemination of financial statements,
which may vary from legislation in other
jurisdictions. The maintenance and
integrity of the company’s website is the
responsibility of the directors. The
directors’ responsibility also extends to
the ongoing integrity of the financial
statements contained therein.
13534TIKITGRO:13534TIKITGRO  12/4/07  08:42  Page 26 26:27
Tikit Group plc
Annual Report 2006
13534 30/03/2007 Proof 7
>> Report of the Independent Auditors
Independent Auditors’ Report to the
Shareholders of Tikit Group plc
We have audited the Group and parent
company financial statements of Tikit
Group plc for the year ended
31 December 2006 which comprise the
Group profit and loss account, the Group
and company balance sheets, the Group
cash flow statement, the Group
statement of total recognised gains and
losses and the related notes. These
financial statements have been
prepared under the accounting policies
set out therein.
Respective responsibilities of
directors and auditors
The directors’ responsibilities for
preparing the financial statements in
accordance with applicable law and
United Kingdom Accounting Standards
(United Kingdom Generally Accepted
Accounting Practice) are set out in the
statement of directors’ responsibilities.
Our responsibility is to audit the
financial statements in accordance with
relevant legal and regulatory
requirements and International
Standards on Auditing (UK and Ireland).
We report to you in our opinion as to
whether the financial statements give a
true and fair view and are properly
prepared in accordance with the
Companies Act 1985 and whether the
information given in the Director’s
Report is consistent with those financial
statements. We also 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
transaction 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 Report
of the Directors, the Remuneration
Report, the Chairman’s Statement, the
Chief Executive Statement, the Financial
Review and the Corporate Governance
Statement. 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.
Our report has been prepared pursuant
to the requirements of the Companies
Act 1985 and for no other purpose. No
person is entitled to rely on this report
unless such a person is a person entitled
to rely upon this report by virtue of and
for the purpose of the Companies Act
1985 or has been expressly authorised
to do so by our prior written consent.
Save as above, we do not accept
responsibility for this report to any other
person or for any other purpose and we
hereby expressly disclaim any and all
such liability.
Basis of audit opinion
We conducted our audit in accordance
with International Standards on Auditing
(UK and Ireland) issued by the Auditing
Practices Board. An audit includes
examination, on a test basis, of evidence
relevant to the amounts and disclosures
in the financial statements. It also
includes an assessment of the
significant estimates and judgements
made by the directors in the preparation
of the financial statements, and of
whether the accounting policies are
appropriate to the Group’s
circumstances, consistently applied and
adequately disclosed.
We planned and performed our audit so
as to obtain all the information and
explanations which we considered
necessary in order to provide us with
sufficient evidence to give reasonable
assurance that the financial statements
are free from material misstatement,
whether caused by fraud or other
irregularity or error . In forming our
opinion we also evaluated the overall
adequacy of the presentation of
information in the financial statements.
Opinion
In our opinion:
 the Group financial statements give
a true and fair view, in accordance
with United Kingdom Generally
Accepted Accounting Practice, of
the state of the Group’s affairs as at
31 December 2006 and of its profit
for the year then ended;
 the parent company financial
statements give a true and fair
view, in accordance with United
Kingdom Generally Accepted
Accounting Practice, of the state of
the parent company’s affairs as at
31 December 2006;
 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.
BDO Stoy Hayward LLP
Chartered Accountants
and Registered Auditors
London
21 March 2007
13534TIKITGRO:13534TIKITGRO  12/4/07  08:42  Page 27 135 13534 30/03/2007 Proof 7
for the year ended 31 December 2006
As restated
2006 2005
Note £’000 £’000
Turnover 3 23,517 20,162
Cost of sales (17,479) (15,459)
Gross profit 6,038 4,703
Administrative expenses
Goodwill amortisation (629) (1,341)
Share option charges (127) (126)
Other administrative expenses (3,207) (2,639)
Total administrative expenses (3,963) (4,106)
Operating profit 4 2,075 597
Interest receivable 67 46
Interest payable and similar charges 7 (10) (7)
Profit on ordinary activities before taxation and amortisation of
goodwill and share option charges 2,888 2,103
Amortisation of goodwill and share option charges (756) (1,467)
Profit on ordinary activities before taxation 2,132 636
Taxation on profit from ordinary activities 8 (629) (413)
Profit on ordinary activities after taxation 20, 22 1,503 223
Earnings per share 10
Basic 12.0p 1.7p
Diluted 11.3p 1.7p
All amounts relate to continuing activities.
The notes on pages 33 to 50 form part of these financial statements.
>> Consolidated Profit and Loss Account
13534TIKITGRO:13534TIKITGRO  12/4/07  08:42  Page 28 13534 30/03/2007 Proof 7
for the year ended 31 December 2006
>> Consolidated Statement of Total Recognised Gains and Losses
As restated
Group Group
2006 2005
£’000 £’000
Profit for the financial year 1,503 223
Currency translation differences on foreign currency net investments — (4)
Total recognised gains and losses relating to the year 1,503 219
Prior year adjustment — on adoption of FRS 20 “share based payments” 4
Total gains and losses recognised since last financial statements 1,507
The notes on pages 33 to 50 form part of these financial statements.
28:29
Tikit Group plc
Annual Report 2006
13534TIKITGRO:13534TIKITGRO  12/4/07  08:42  Page 29 at 31 December 2006
>> Consolidated Balance Sheet
As restated As restated
2006 2006 2005 2005
Note £’000 £’000 £’000 £’000
Fixed assets
Intangible assets 12 4,835 4,510
Tangible assets 13 478 458
5,313 4,968
Current assets
Stocks 15 22 41
Debtors 16 7,174 6,661
Cash at bank and in hand 4,149 2,325
11,345 9,027
Creditors: amounts falling due within one year 17 8,851 7 ,782
Net current assets 2,494 1,245
Total assets less current liabilities 7,807 6,213
Provisions for liabilities 18 1,610 1,056
6,197 5,157
Capital and reserves
Called up share capital 19,20 1,276 1,277
Treasury share reserve 20 (234) —
Shares to be issued 20 44 33
Share premium account 20 1,481 1,308
Merger reserve 20 1,264 1,075
EBT share reserve 20 (10) (162)
Capital redemption reserve 20 124 104
Profit and loss account 20 2,252 1,522
Shareholders’ funds 20,22 6,197 5,157
The financial statements were approved by the Board of directors and authorised for issue on
P Giuffredi
Director
The notes on pages 33 to 50 form part of these financial statements.
135 13534 30/03/2007 Proof 7
13534TIKITGRO:13534TIKITGRO  12/4/07  08:42  Page 30 at 31 December 2005
>> Company Balance Sheet
As restated As restated
2006 2006 2005 2005
Note £’000 £’000 £’000 £’000
Fixed assets
Investments 14 7,206 5,983
Current assets
Debtors 16 12 10
Cash at bank 98 65
110 75
Creditors: amounts falling due within one year 17 1,270 2,027
Net current liabilities (1,160) (1,952)
Total assets less current liabilities 6,046 4,031
Provisions for liabilities 18 1,445 559
4,601 3,472
Capital and reserves
Called up share capital 19,20 1,276 1,277
Treasury share reserve 20 (234) —
Shares to be issued 20 44 33
Share premium account 20 1,481 1,308
EBT share reserve 20 (10) (162)
Capital redemption reserve 20 124 104
Profit and loss account 20 1,920 912
Shareholders’ funds 20,22 4,601 3,472
The financial statements were approved by the Board of directors and authorised for issue on
P Giuffredi
Director
The notes on pages 33 to 50 form part of these financial statements.
30:31
Tikit Group plc
Annual Report 2006
13534 30/03/2007 Proof 7
13534TIKITGRO:13534TIKITGRO  12/4/07  08:42  Page 31 for the year ended 31 December 2006
>> Consolidated Cash Flow Statement
2006 2006 2005 2005
Note £’000 £’000 £’000 £’000
Net cash inflow from operating activities 25 3,579 2,102
Returns on investments and servicing of finance
Interest received 67 46
Interest paid (10) (7)
Net cash inflow from returns on investments
and servicing of finance 57 39
Corporation tax paid (582) (527)
Capital expenditure and financial investment
Purchase of tangible fixed assets (240) (354)
Sale of tangible fixed assets — 1
Net cash outflow from capital expenditure and financial investment (240) (353)
Acquisitions and disposals
Purchase of subsidiary undertakings (200) (1,870)
Cash acquired with subsidiaries — 438
Net cash outflow from acquisitions and disposals (200) (1,432)
Equity dividends paid (376) (270)
Cash inflow/(outflow) before financing 2,238 (441)
Financing
Exercise of share options 212 3
Purchase of own shares (626) —
Purchase of own shares by employee benefit trust — (20)
Cash outflow from financing (414) (17)
Increase/(decrease) in cash in the year 27 1,824 (458)
The notes on pages 33 to 50 form part of these financial statements.
135 13534 30/03/2007 Proof 7
13534TIKITGRO:13534TIKITGRO  12/4/07  08:42  Page 32 for the year ended 31 December 2006
>> Notes Forming Part of the Financial Statements
1 Accounting policies
Basis of preparation
The financial statements have been prepared in accordance with applicable accounting standards and under the historical
cost convention. The Group has adopted FRS 20 “share based payments” and UITF 44 “Group and treasury share
transactions” in preparing the current year’s accounts (see note 2).
The principal accounting policies are:
Basis of consolidation
The consolidated financial statements incorporate the results of Tikit Group plc and its subsidiary undertakings (together
referred to as the ‘Group’) for the year ended 31 December 2006.
Acquisition accounting
Where the acquisition method is used, the results of the subsidiary are included from the date of acquisition. The purchase
consideration is allocated to assets and liabilities on the basis of fair value at the date of acquisition. In the company financial
statements of Tikit Group plc, advantage has been taken of the merger relief rules. Shares issued as consideration for
acquisitions are accounted for at nominal value.
Merger accounting
Where merger accounting is used, the investment is recorded in the company’s balance sheet at the nominal value of shares
issued together with the fair value of any additional consideration paid.
In the Group financial statements, merged subsidiary undertakings are treated as if they had always been a member of the
Group. The results of such a subsidiary are included for the whole period in the year it joins the Group. The corresponding
figures for the previous year include its results for that period, the assets and liabilities at the previous balance sheet date and
the shares issued by the company as consideration as if they had always been in issue. Any difference between the nominal
value of the shares acquired by the company and those issued by the company to acquire them is taken to reserves.
Share options
When shares and share options are granted to employees a charge is made to the profit and loss account and a reserve
created in capital and reserves to record the fair value of the awards at the date of grant in accordance with FRS 20 “share
based payments”. This charge is spread over the vesting period.
When shares and share options are granted to employees of subsidiary companies, the fair value of the awards is treated as a
capital contribution and spread over the period of performance relating to the grant. The corresponding entry is made in
reserves.
Goodwill
Goodwill arising on an acquisition of a subsidiary undertaking is the difference between the fair value of the consideration
paid and the fair value of the assets and liabilities acquired. In calculating goodwill, the total consideration, both actual and
deferred, is taken into account. Where the deferred consideration is contingent and dependent upon future trading
performance, an estimate of the value of likely consideration payable is made. The contingent deferred consideration is
reassessed annually and a corresponding adjustment is made to the goodwill arising on acquisition.
Goodwill is capitalised and amortised through the profit and loss account over the directors’ estimate of its
useful economic life of 10 years. Impairment tests on the carrying value of goodwill are undertaken:
 at the end of the first full financial year following acquisition;
 in other periods if events or changes in circumstances indicate that the
carrying value may not be recoverable.
32:33
Tikit Group plc
Annual Report 2006
13534 30/03/2007 Proof 7
13534TIKITGRO:13534TIKITGRO  12/4/07  08:42  Page 33 for the year ended 31 December 2006
>> Notes Forming Part of the Financial Statements
1 Accounting policies (continued)
During the period, the directors reviewed the useful economic life of goodwill. As a result it was revised and goodwill is now
amortised through the profit and loss account over 10 years (2005: 5 years). This has resulted in the amortisation charge for
the year to 31 December 2006 being reduced by £1,021,000 to £629,000 (2005: £1,341,000). There has been no restatement
of the comparatives.
Turnover and income recognition
Turnover represents the amounts receivable, net of value added tax, on the provision of the Group’s software, maintenance,
consultancy and other services such as training. When a sale of the Group’s software is made to a customer the price
normally includes the provision of third party maintenance and support provided by the Group. The support element is
deferred and recognised over the period that the support is provided. The licence element of the sale and third party
maintenance is recognised as income when the following conditions have been satisfied:
1) The software has been provided to the customer in a form that enables the customer to utilise it.
2) There is a contractual relationship between the customer and the Group.
3) The ongoing obligations of the Group to the customer , aside from the support, are minimal.
4) The amount payable by the customer is determinable and there is a reasonable expectation of payment.
Sales of hardware and consultancy are recognised at the point of delivery to the customer .
Depreciation
Depreciation is provided to write off the cost, less estimated residual values, of all tangible fixed assets evenly over their
expected useful lives. It is calculated at the following rates:
Leasehold improvements — over length of lease
Computer equipment — 33% per annum
Office equipment — 25% per annum
Investments
Investments held as fixed assets are stated at cost less any provision for impairment in value.
Impairment of fixed assets and goodwill
The need for any fixed asset impairment write-down is assessed by comparison of the carrying value of the asset against the
higher of its net realisable value and value in use.
Stocks
Stocks are valued at the lower of cost and net realisable value. Cost of raw materials, consumables and goods purchased for
resale means actual purchase price, including transport and handling, and is determined using the FIFO method. Net
realisable value means estimated net selling price less further costs to completion.
Leased assets
Payments made in respect of operating leases are charged to the profit and loss account on a straight-line basis over the
lease term. The Group has no finance leases or hire purchase contracts.
Research and development
Expenditure on product development is charged to the profit and loss account in the year in which it is incurred.
Deferred taxation
Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the balance
sheet date except that the recognition of deferred tax assets is limited to the extent that the company anticipates to make
sufficient profit in the future to absorb the reversal of the underlying timing differences. Deferred tax balances are not
discounted.
135 13534 30/03/2007 Proof 7
13534TIKITGRO:13534TIKITGRO  12/4/07  08:42  Page 34 1 Accounting policies (continued)
Pension costs
Contributions to the Group personal pension scheme are charged to the profit and loss account in the period in which they
become payable. The Group does not operate any defined benefit pension plans.
Foreign currency
Foreign currency transactions of individual companies are translated at the rates ruling when they occurred. Foreign currency
monetary assets and liabilities are translated at the rate of exchange ruling at the balance sheet date. Any differences are
taken to the profit and loss account.
The results of overseas operations and the balance sheets are translated into sterling at the closing rate of exchange ruling
on the balance sheet date. Exchange differences which arise from translation of the opening net assets of foreign subsidiary
undertakings are taken to reserves.
Financial instruments
In relation to the disclosures made in note 21:
 short-term debtors and creditors are not treated as financial assets and liabilities; and
 the Group does not hold or issue derivative financial instruments for trading purposes.
Employee benefit trust
The balance sheets include the assets and liabilities of the Employee Benefit Trust. Amounts paid and received by the trust for
transactions in the company’s own shares are reported directly in shareholders’ funds. Shares held by the EBT are treated as
cancelled for the purposes of calculating earnings per share.
Treasury Shares
Consideration paid or received for the purchase or sale of the company’s own shares for holding in treasury is taken directly
to shareholders’ funds. The difference between the consideration received on the sale of the treasury shares and the
weighted average cost of shares sold is taken to the share premium account.
All shares held in treasury are treated as cancelled for the purposes of calculating earnings per share.
2 Changes to accounting policies
In preparing these financial statements the Group has adopted for the first time FRS 20 ‘Share-based payments’. which
requires the recognition of share-based payments at fair value at the date of grant. Prior to the adoption of FRS 20, the
Group recognised the financial effect of the share-based payment in the following way: when shares and share options were
awarded to employees a charge was made to the profit and loss account based on the difference between the market value
of the company’s shares at the date of grant and the option exercise price in accordance with UITF Abstract 17 (revised 2003)
‘Employee Share Schemes’. The credit entry for this charge was taken to the profit and loss reserve and reported in the
reconciliation of movements in shareholders’ funds.
In accordance with transitional provisions of FRS 20, the standard was applied retrospectively to all grants of equity
instruments after 7 November 2002 that were unvested as of 1 January 2006.
The change in accounting policy has resulted in a net increase in profit for the year ended 31 December 2005
of £4,000 (share-based payments expense net of deferred tax impact of £nil and net of reversal
of the 2005 charge under UITF 17).
In the company Financial Statements the fair value of the awards is treated as a
Capital Contribution. The change in accounting policy has resulted in an increase
of £207 ,000 in the cost of investment in Group undertakings and reserves.
34:35
Tikit Group plc
Annual Report 2006
13534 30/03/2007 Proof 7
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3 Turnover
2006 2005
£’000 £’000
Turnover by destination:
United Kingdom 18,463 16,658
Continental Europe 4,113 2,914
Rest of the world 941 590
23,517 20,162
Turnover , net profit and net assets are attributable to the principal activity of the Group and derive from operations located
in the UK, France and Spain as follows:
Turnover Pre-tax profit Net assets
As restated As restated
2006 2005 2006 2005 2006 2005
£’000 £’000 £’000 £’000 £’000 £’000
UK 20,694 18,419 1,860 595 5,893 5,036
France 2,001 1,189 254 21 266 99
Spain 822 554 18 20 38 22
23,517 20,162 2,132 636 6,197 5,157
4 Operating profit
Restated
2006 2005
£’000 £’000
This is arrived at after charging/(crediting):
Research and development 254 275
Depreciation 220 145
Amortisation of goodwill 629 1,341
Share option charges 127 126
Operating leases — rent of buildings 202 205
— motor leases 45 45
Profit on sale of investment — (5)
Loss on disposal of fixed assets — 1
Auditors’ remuneration — audit services (company £28,000 (2005: £10,000)) 59 56
— non-audit services (taxation) 13 8
Auditors’ remuneration for non-audit services included within the cost of investment of Group companies acquired in the year
is £nil (2005: £18,000).
for the year ended 31 December 2006
>> Notes Forming Part of the Financial Statements
13534TIKITGRO:13534TIKITGRO  12/4/07  08:42  Page 36 13534 30/03/2007 Proof 7
5 Directors
2006 2005
£’000 £’000
The remuneration of directors is set out below:
Directors’ emoluments 415 385
Pension costs — amounts paid to defined contribution scheme 13 12
Gains on exercise of share options 198 —
626 397
Emoluments of the highest paid director:
Emoluments 154 154
Pension costs — amounts paid to defined contribution scheme 8 8
Gains on exercise of share options 198 —
360 162
Three directors (2005: two) were accruing benefits under defined contribution schemes.
Directors’ emoluments are detailed, by director , in the Remuneration report.
The share options of the directors under The Tikit Group EMI and Unapproved Share Option Scheme are set out below:
31 December 31 December
2006 2005 Exercise Earliest date
Number Number price of exercise
P Giuffredi 100,000 100,000 187 .5p 1 August 2008
The above unexercised options were granted on 1 August 2005 and following achievement of a minimum basic earnings per
share in the subsequent three year period they are exercisable from 1 August 2008. The options expire on 1 August 2015.
No options lapsed during the year . The market price of the shares at 31 December 2006 was 256.5p and the range during
the financial year was 166p to 262p.
£29,769 (2005: £35,377) of the Group’s share option charges were in respect of options granted to Directors.
36:37
Tikit Group plc
Annual Report 2006
13534TIKITGRO:13534TIKITGRO  12/4/07  08:42  Page 37 135 13534 30/03/2007 Proof 7
for the year ended 31 December 2006
>> Notes Forming Part of the Financial Statements
6 Employees
The average number of employees of the Group during the year , including executive directors, was as follows:
Group Group Company Company
2006 2005 2006 2005
Number Number Number Number
Services 146 120 5 5
Sales 20 18 — —
Administration 24 23 — —
190 161 5 5
Staff costs for all employees, including executive directors, consist of:
Group Group Company Company
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Wages and salaries 7,625 6,686 379 385
Social security costs 1,085 922 46 43
Pension costs 205 197 13 12
8,915 7 ,805 438 440
7 Interest payable and similar charges
2006 2005
£’000 £’000
Bank charges 10 7
8 Taxation on profit from ordinary activities
(a) Analysis of charge in year
2006 2006 2005 2005
£’000 £’000 £’000 £’000
Current tax
UK corporation tax on profits for the year 603 451
Adjustments in respect of previous periods (1) —
Total current tax (note 8(b)) 602 451
Deferred tax
Origination and reversal of timing differences — 23
Adjustment in respect of previous periods (37) —
Utilisation of tax losses 60 —
Short term timing differences on share option charges 4 (61)
Total deferred tax (note 16) 27 (38)
Tax on profit on ordinary activities 629 413
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Tikit Group plc
Annual Report 2006
13534 30/03/2007 Proof 7
8 Taxation on profit from ordinary activities (continued)
((b) Factors affecting tax charge for the year
The tax assessed for the year differs from that obtained by applying the standard rate of corporation tax in the UK (30%).
The differences are explained below:
As restated
2006 2005
£’000 £’000
Profit on ordinary activities before tax 2,132 636
Profit on ordinary activities multiplied by standard rate of UK corporation tax of 30% (2005: 30%) 639 191
Effects of:
Expenses not deductible for tax purposes (primarily goodwill amortisation) 244 454
Exercised share options (190) (2)
Difference between capital allowances for period and depreciation (5) (27)
Utilisation of tax losses (95) (149)
Tax differences 10 —
Marginal relief — (4)
Claim for research and development tax credit — (12)
Adjustments in respect of previous periods (1) —
Current tax charge for year (note 8(a)) 602 451
(c) Factors affecting future tax charges
The Group has approximately £nil (2005: £375,000) of tax losses available for relief against future profits.
9 Dividends
2006 2005
£’000 £’000
Interim paid of 1.25p (2005: 0.75p) per share 157 98
Final paid of 1.75p (2005: 1.4p) per share relating to the previous year’s results 219 172
376 270
The directors are recommending a proposed final dividend of £351,000 (2.75p per share) for the year .
13534TIKITGRO:13534TIKITGRO  12/4/07  08:42  Page 39 135 13534 30/03/2007 Proof 7
for the year ended 31 December 2006
>> Notes Forming Part of the Financial Statements
10 Earnings per share
The calculation of earnings per ordinary share is based on profit after tax and the weighted average number of ordinary
shares in issue during the year .
The weighted average number of ordinary shares used in the calculation of earnings per share is as follows:
2006 2005
No’000 No’000
Weighted average ordinary shares in issue during the year 12,537 12,528
Potentially dilutive share options under the Group’s share option schemes 405 410
Deferred consideration to be satisfied in shares 340 277
Weighted average ordinary shares for diluted earnings per share 13,282 13,215
An adjusted earnings per share has also been calculated in addition to the basic earnings per share and is based on
earnings adjusted to eliminate the effects of goodwill amortisation and share option charges. It has been calculated to allow
shareholders to gain a clearer understanding of the trading performance of the Group.
As restated As restated As restated
2006 2006 2006 2005 2005 2005
Basic pence Diluted pence Basic pence Diluted pence
£’000 per share per share £’000 per share per share
Basic earnings:
Profit after tax 1,503 12.0 11.3 223 1.7 1.7
Adjustments:
Goodwill amortisation 629 5.0 4.7 1,341 10.8 10.1
Share option charges 127 1.0 1.0 126 1.0 1.0
Deferred tax on share option charges 4 0.0 0.0 (61) (0.5) (0.5)
Adjusted earnings 2,263 18.0 17.0 1,629 13.0 12.3
11 Profit for the financial year
The company has taken advantage of the exemption allowed under section 230 of the Companies Act 1985 and has not
presented its own profit and loss account in these financial statements. The Group profit for the year includes a profit after
tax and before dividends of £1,782,000 (note 22) (2005: profit of £313,000) which is dealt with in the financial statements of
the parent company.
12 Intangible fixed assets
Goodwill
Group £’000
Cost
At 1 January 2006 7 ,301
Adjustment to deferred contingent consideration (note 18) 954
At 31 December 2006 8,255
Amortisation
At 1 January 2006 2,791
Charge for the period 629
At 31 December 2006 3,420
Net book value
At 31 December 2006 4,835
At 31 December 2005 4,510
13534TIKITGRO:13534TIKITGRO  12/4/07  08:42  Page 40 12 Intangible fixed assets (continued)
The adjustment to deferred contingent consideration relates to the increase in cash due to the vendors of Lecsoft SAS and
the increase in cash and shares due to the vendors of Shamrock Marketing Limited under the earn-out arrangements. The
company exercised its right to increase the proportion of cash and decrease the proportion of shares due to the vendors of
Lecsoft SAS under the earn-out arrangements.
The company has no intangible fixed assets.
13 Tangible fixed assets
Leasehold Computer Office
improvements equipment equipment Total
Group £’000 £’000 £’000 £’000
Cost
At 1 January 2006 121 1,159 488 1,768
Additions 15 215 10 240
At 31 December 2006 136 1,37 4 498 2,008
Depreciation
At 1 January 2006 42 881 387 1,310
Provision for year 21 168 31 220
At 31 December 2006 63 1,049 418 1,530
Net book value
At 31 December 2006 73 325 80 478
At 31 December 2005 79 278 101 458
The company has no tangible fixed assets.
40:41
Tikit Group plc
Annual Report 2006
13534 30/03/2007 Proof 7
13534TIKITGRO:13534TIKITGRO  12/4/07  08:42  Page 41 14 Fixed asset investments
Investment
in Group
undertakings Total
Loans Shares
Company £’000 £’000 £’000
At 1 January 2006 as previously stated 698 5,078 5,776
Prior year adjustment in respect of share options granted to subsidiary employees — 207 207
At 1 January 2006 as restated 698 5,285 5,983
Adjustment to deferred contingent consideration (note 18) — 1,097 1,097
Share options granted to subsidiary employees — 126 126
At 31 December 2006 698 6,508 7,206
Subsidiary undertakings
The following were subsidiary undertakings at the end of the year and have all been included in the consolidated financial
statements:
Proportion of
voting rights
Country of and ordinary
Name incorporation share capital held Nature of business
Tikit Limited UK 100% IT services and
software
Aurra Consulting Limited UK 100% Non-trading
Granite & Comfrey Limited UK 100% Non-trading
Tikit NIS Limited UK 100% Non-trading
Lecsoft SAS France 100% IT services and
software
Tikit Solutions SL Spain 100% IT services and
software
Shamrock Marketing Limited UK 100% Marketing data
services
All subsidiaries are directly held by the company.
15 Stocks
Group Group
2006 2005
£’000 £’000
Consumables 22 28
Finished goods and goods held for resale — 13
22 41
There is no material difference between the replacement cost of stocks and the amounts stated above.
135 13534 30/03/2007 Proof 7
for the year ended 31 December 2006
>> Notes Forming Part of the Financial Statements
13534TIKITGRO:13534TIKITGRO  12/4/07  08:42  Page 42 16 Debtors
As restated
Group Group Company Company
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Trade debtors 6,583 6,058 — —
Prepayments and accrued income 496 481 12 10
Deferred taxation 95 122 — —
7,174 6,661 12 10
All amounts fall due for payment within one year , with the exception of deferred taxation.
Provision for deferred taxation
As restated
Group Group Company Company
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Depreciation in excess of capital allowances (38) (1) — —
Tax losses — (60) — —
Short-term timing differences on share option charges (57) (61) — —
(95) (122) — —
Amounts in brackets denote a deferred tax asset. A deferred tax asset amounting to £nil (2005: £53,000) arising from
trading losses acquired in the prior year is not recognised in the accounts.
Group Company
£’000 £’000
Balance at 1 January 2006 as previously stated (122) (61)
Prior year adjustment on adoption of FRS 20 — 61
Balance at 1 January 2006 as restated (122) —
Credited to profit and loss account (note 8) 27 —
Balance at 31 December 2006 (95) —
42:43
Tikit Group plc
Annual Report 2006
13534 30/03/2007 Proof 7
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17 Creditors: amounts falling due within one year
Group Group Company Company
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Trade creditors 3,620 3,418 74 42
Amounts due to Group undertakings — — 825 1,802
Tax and social security 1,504 1,218 61 11
Corporation tax 352 331 — 8
Accruals and deferred income 3,375 2,815 310 164
8,851 7 ,782 1,270 2,027
18 Provisions for liabilities
Provision for deferred contingent consideration:
Amount to be satisfied in:
Cash Shares Total
Group £’000 £’000 £’000
At 1 January 2006 528 528 1,056
Adjustment to deferred contingent consideration (note 12) 1,110 (156) 954
Amounts paid (200) — (200)
Amounts transferred to shares to be issued — (200) (200)
At 31 December 2006 1,438 172 1,610
Amount to be satisfied in:
Cash Shares Total
Company £’000 £’000 £’000
At 1 January 2006 528 31 559
Adjustment to deferred contingent consideration 1,110 (13) 1,097
Amounts paid (200) — (200)
Amounts transferred to shares to be issued — (11) (11)
At 31 December 2006 1,438 7 1,445
The adjustments to deferred contingent consideration are in respect of the acquisition of Lecsoft SAS and Shamrock
Marketing Limited.
In respect of Shamrock Marketing Limited, the amounts payable are contingent on it achieving certain performance criteria
in the period to 31 August 2007 up to a maximum of £800,000.
In respect of Lecsoft SAS, the amounts payable are contingent on it achieving certain performance criteria in the period to
31 December 2006, up to a maximum of £1,266,000.
The amounts are to be settled by cash and shares, in the relative proportions agreed with the vendors. Provisions for
liabilities include the Directors’ current estimate of the amounts which will become payable.
for the year ended 31 December 2006
>> Notes Forming Part of the Financial Statements
13534TIKITGRO:13534TIKITGRO  12/4/07  08:42  Page 44 13534 30/03/2007 Proof 7
19 Share capital
2006 2006 2005 2005
Number £’000 Number £’000
Authorised
Ordinary shares of 10p each 19,490,000 1,949 19,490,000 1,949
Preference shares of £1 each 51,000 51 51,000 51
Allotted, called up and fully paid
Ordinary shares of 10p each 12,763,318 1,276 12,769,434 1,277
Preference shares of £1 each (included in creditors from 2006) 1,000 1 1,000 1
Issue of ordinary shares
197 ,413 ordinary shares of 10p each were issued during the year to satisfy the exercise of employee share options at prices
ranging from 15p to 115p.
Cancellation of ordinary shares
During the year the company purchased 203,535 ordinary shares in the market for cancellation for a consideration of
£392,000 representing approximately 1.6% of the issued share capital.
Purchase of ordinary shares into treasury (see note 20)
During the year the company purchased 100,000 ordinary shares in the market for treasury for a consideration of
£234,000.
Preference shares (see note 17)
There are £1,000 preference shares in issue. These have been included in creditors from 2005 in accordance with FRS 25.
The holders of the preference shares have the right to receive a fixed cumulative dividend of 5% per annum calculated on
the amount paid up.
The company will redeem any unredeemed preference shares on 31 December 2010.
The shares are redeemable at par and carry no voting rights. They rank in priority to the ordinary shares for repayment in
the event of the company being wound up.
44:45
Tikit Group plc
Annual Report 2006
13534TIKITGRO:13534TIKITGRO  12/4/07  08:42  Page 45 19 Share capital (continued)
Share options
At 31 December 2006, the following share options were outstanding in respect of the ordinary shares:
Date from which
Number options are first Price per
Date of grant of shares exercisable Lapse date share
Inland Revenue Approved
Company Share Option Plan:
31 March 2002 3,057 31 March 2005 31 March 2011 114.5p
30 June 2003 61,7 42 30 June 2006 30 June 2013 81.0p
28 April 2006 16,984 28 April 2009 28 April 2016 169.5p
14 June 2006 1,220 14 June 2009 14 June 2016 201.5p
3 July 2006 8,035 3 July 2009 3 July 2016 194.0p
Enterprise Management
Incentive Scheme:
29 October 2004 20,000 29 August 2006 29 October 2014 133.5p
10 February 2005 32,349 10 February 2008 10 February 2015 10.0p
11 February 2005 133,778 11 February 2008 11 February 2015 134.5p
23 May 2005 41,350 23 May 2008 23 May 2015 150.0p
1 July 2005 46,721 1 July 2008 1 July 2015 70.0p
1 August 2005 53,333 1 August 2008 1 August 2015 187 .5p
31 January 2006 20,000 30 June 2008 31 January 2016 166.0p
14 June 2006 20,000 14 June 2009 14 June 2016 169.5p
Unapproved Options:
11 February 2005 133,542 11 February 2008 11 February 2015 134.5p
1 August 2005 46,667 1 August 2008 1 August 2015 187 .5p
FRS 20 disclosures
The number of options outstanding at the beginning of the year was 1,116,300 (2005: 614,197), which had a weighted
average exercise price of 100.6p (2004: 71.7p). During the year , 397 ,419 (2005: 3,432) options were exercised, 146,346
(2005: 124,991) were forfeited and 66,239 (2005: 630,526) were issued.
The weighted average exercise price of options exercised in the year was 53.4p (2005: 78.3p). The weighted average share
price at the date of exercise was 184.6p (2005: 183.0p).
The weighted average exercise price of options forfeited in the year was 131.3p (2005: 119.2p). The weighted average price of
options granted in the year was 188.7p (2005: 132.3p).
For share options granted during the period, the weighted average fair value of the options was 52.3p (2005: 58.7p) and the
weighted average share price at grant date was 176.3p (2005: 166.0p).
The following information is relevant in the determination of the fair value of the options granted during the current and
prior year:
Option pricing model Binominal
Expected volatility 28%
Expected dividend growth rate 1.5%
Risk-free interest rate 4.6%
The volatility assumption is based upon a statistical analysis of daily share prices over the past three years.
The Group did not enter into any share-based payment transactions with parties other than employees during the current
or previous period.
135 13534 30/03/2007 Proof 7
for the year ended 31 December 2006
>> Notes Forming Part of the Financial Statements
13534TIKITGRO:13534TIKITGRO  12/4/07  08:42  Page 46 20 Reconciliation of movement in share capital and reserves
Capital
Ordinary Treasury Shares Share redemp- Profit EBT
share share to be premium Merger tion and loss share
capital reserve issued account reserve reserve account reserve T otal
Group £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
At 1 January 2006 1,277 — 33 1,308 1,075 104 1,522 (162) 5,157
Shares cancelled after buy backs (20) —— —— 20 (392) — (392)
Shares purchased into treasury — (234) —— —— —— (234)
Exercise of share options (note 19) 19 —— 173 —— (132) 152 212
Profit after taxation for the year—— —— —— 1,503 — 1,503
Dividends paid —— —— —— (376) — (376)
Deferred consideration —— 11 — 189 —— — 200
Credit in respect of
share option charges —— —— —— 127 — 127
At 31 December 2006 1,276 (234) 44 1,481 1,264 124 2,252 (10) 6,197
Capital
Ordinary Treasury Shares Share redemp- Profit EBT
share share to be premium Merger tion and loss share
capital reserve issued account reserve reserve account reserve Total
Company £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
At 1 January 2006 1,277 — 33 1,308 — 104 766 (162) 3,326
Prior year adjustment in respect of
share options granted to subsidiary
employees —— —— —— 207 — 207
Deferred tax on share options —— —— —— (61) — (61)
At 1 January 2006 restated 1,277 — 33 1,308 — 104 912 (162) 3,472
Shares cancelled after buy backs (20) —— —— 20 (392) — (392)
Shares purchased into treasury — (234) —— —— —— (234)
Exercise of share options (note 19) 19 —— 173 —— (132) 152 212
Deferred consideration —— 11 —— —— — 11
Profit after taxation for the year—— —— —— 1,782 — 1,782
Dividends paid —— —— —— (376) — (376)
Share options granted to
subsidiary employees —— —— —— 126 — 126
At 31 December 2006 1,276 (234) 44 1,481 — 124 1,920 (10) 4,601
The ‘shares to be issued’ reserve relates to shares expected to be issued in order to satisfy deferred
consideration on the acquisition of Lecsoft SAS and Shamrock Marketing Limited.
The deferred contingent consideration increase in the year of £11,000 relates to the change
in the number of ordinary shares to be issued to the previous shareholders of Shamrock
Marketing Limited.
46:47
Tikit Group plc
Annual Report 2006
13534 30/03/2007 Proof 7
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20 Reconciliation of movement in share capital and reserves (continued)
EBT share reserve
The employee benefit trust (EBT) was established on 26 September 2002 in order to provide for the future obligations of
the company for shares awarded under its share option schemes. Under the scheme the trustees purchase the company’s
ordinary shares using funds supplied under a loan agreement with the company.
Shares held in Trust
Cost
Number £’000
Cost
At 1 January 2006 213,456 162
Disposals (200,000) (152)
At 31 December 2006 13,456 10
Market value at 31 December 2006 35
Market value at 31 December 2005 375
At 31 December 2006, £148,500 (2005: £148,000) had been loaned by the company to the EBT to finance the purchase of
ordinary shares. The balance of cash held by the Trust, £80,000 (2005: £65,000), is included in the balance sheet as cash
at bank and in hand. None of the above shares have vested unconditionally to employees.
21 Financial instruments
The only significant financial asset the Group has is cash at bank. Cash is held either on current or on short term deposits at
floating rates of interest determined by the relevant bank’s prevailing base rate. Part of the cash at bank is held in Euro and
US dollar accounts.
The table below shows the Group’s currency exposures that give rise to the net currency gains and losses recognised in the
profit and loss account. Such exposures comprise the monetary assets and monetary liabilities of the Group that are not
denominated in the operating (‘functional’) currency of the operating unit involved. As at 31 December 2006, these
exposures were as follows:
Net foreign currency monetary assets/(liabilities)
2006 2005
£’000 £’000
US dollar (829) (851)
Euro 417 505
Australian dollars 25 37
All amounts have sterling as the functional currency. There are no currency exposures in any other functional currency. The
Group’s French and Spanish subsidiaries’ functional currency is euros and they have no significant exposure to other
currencies.
The Group’s financial liabilities consist of preference shares. The preference shares pay a fixed coupon of 5% per annum on
amounts paid up.
The fair value of the Group’s currency forwards as at 31 December 2006 was £(10,000) (2005: £nil) and the book value £nil
(2005: £nil). Market rates have been used to determine current values. The market value of the Group’s other financial
assets and liabilities does not differ materially from the carrying value.
The Group does not hold any derivative financial instruments.
The Group’s policy as regards liquidity is to ensure sufficient cash resources are maintained to meet short-term liabilities.
The Group’s treasury policy is discussed in the Financial Review on pages 16 and 17 .
for the year ended 31 December 2006
>> Notes Forming Part of the Financial Statements
13534TIKITGRO:13534TIKITGRO  12/4/07  08:42  Page 48 48:49
Tikit Group plc
Annual Report 2006
13534 30/03/2007 Proof 7
22 Reconciliation of movements in shareholders’ funds
As restated
Group Group Company Company
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Profit for the year 1,503 223 1,782 313
Dividends (376) (270) (376) (270)
Shares cancelled on buy back (392) — (392) —
Shares purchased into treasury (234) — (234) —
Reclassification on adoption of FRS 25 — (355) — (23)
Shares issued on acquisition — 400 — 27
Exercise of share options (note 19) 212 2 212 2
Deferred consideration on acquisition — 180 — 8
Adjustment to contingent consideration (note 20) 200 2 11 —
Translation difference on foreign investments — (4) — —
Purchase of own shares by EBT — (20) — (20)
Share options granted to subsidiary employees — — 126 125
Credit in respect of share option charges 127 126 ——
Net addition to shareholders’ funds 1,040 284 1,129 162
Opening shareholders’ funds as restated 5,157 4,873 3,472 3,310
Closing shareholders’ funds 6,197 5,157 4,601 3,472
Opening shareholders’ funds as previously stated — — 3,326 3,228
Prior year adjustment in respect of share
options granted to subsidiary companies — — 207 82
Prior year adjustment in respect of
deferred tax in respect of share options — — (61) —
Opening shareholders’ funds as restated 6,197 5,157 3,472 3,310
23 Related party transactions
All transactions were conducted on an arm’s length basis on normal trading terms.
Mr D Sturdy is a director of Granite & Comfrey Limited and owns premises in Yorkshire which are leased to a Group
company. During the year £6,700 (2005: £6,700) was charged in respect of the lease. At 31 December 2006 £3,167 (2005:
£3,167) was outstanding.
Since his resignation, the company paid Mr A Pearson £6,000 in respect of consultancy fees.
The Group finances employees’, including directors’, train travel costs by way of short-term interest free loans.
The balances outstanding to/from directors at 31 December were:
13534TIKITGRO:13534TIKITGRO  12/4/07  08:42  Page 49 23 Related party transactions (continued)
2006 2005
£’000 £’000
Owed to/(from) the company
M McGoun — (9)
D Lumsden 2 4
A Pearson — 3
P Giuffredi — —
£’000
The maximum amounts outstanding during the year were:
D Lumsden 4
A Pearson 3
24 Commitments under operating leases
Annual commitments under operating leases for land and buildings amount to £201,801 (2005: £204,995) and motor leases
£35,894 (2005: £45,388). These commitments expire between two and five years.
25 Reconciliation of operating profit to net cash inflow from operating activities
2006 2005
£’000 £’000
Operating profit 2,075 597
Amortisation of goodwill 629 1,341
Share option charges 127 126
Impairment of investment — —
Depreciation charge 220 145
Loss on disposal of fixed assets — 1
Decease in stocks 19 73
Increase in debtors (540) (2,179)
Increase in creditors 1,049 1,998
Net cash inflow from operating activities 3,579 2,102
26 Reconciliation of net cash flow to movement in net funds
2006 2005
£’000 £’000
Increase in cash in the year 1,824 (458)
1,824 (458)
Net funds at 1 January 2,325 2,783
Net funds at 31 December 4,149 2,325
27 Analysis of changes in net funds
At At
start Cash end
of year flow of year
£’000 £’000 £’000
Cash in hand and at bank 2,325 1,824 4,149
Net funds 2,325 1,824 4,149
135 13534 30/03/2007 Proof 7
for the year ended 31 December 2006
>> Notes Forming Part of the Financial Statements
13534TIKITGRO:13534TIKITGRO  12/4/07  08:42  Page 50 Notice is hereby given that the Annual General Meeting of the Tikit Group plc will be held at Africa House, 64–78 Kingsway, London
WC2B 6AH on 3 May 2007 at 3.00 p.m. for the following purposes:
1 To receive the audited financial statements for the year ended 31 December 2006 and the Directors’ and Auditors’ reports
thereon.
2 To declare a final ordinary dividend of 2.75p per share for the year ended 31 December 2006.
3 To re-elect Mr David Lumsden, a director retiring by rotation.
4 To reappoint Mr Paul Giuffredi, a director who has been appointed since the last AGM pursuant to Article 88 and is retiring at
this AGM according to that Article.
5 To reappoint BDO Stoy Hayward LLP as Auditors and authorise the directors to determine the remuneration of the Auditors.
Special Business
To consider and, if thought fit, pass the following resolutions which will be proposed as ordinary or special resolutions as
indicated below:
6 As an ordinary resolution:
That the directors be and they are hereby generally and unconditionally authorised in accordance with Section 80 of the
Companies Act 1985 (“the Act”) to exercise all the powers of the company to allot relevant securities (as defined in Section
80(2) of the Act) of the company to such persons, at such times and on and subject to such terms and conditions as the
directors may determine. The maximum aggregate nominal amount of relevant securities which may be allotted pursuant to
this authority shall be £421,190. This authority shall expire on the earlier of 3 August 2008 and the conclusion of the Annual
General Meeting of the company to be held in 2008, save that the company may before such expiry make any offer or
agreement which would or might require relevant securities to be allotted after such expiry and the directors may allot
relevant securities in pursuant of such an offer or agreement as if the authority conferred hereby had not expired.
7 As a special resolution (subject to the passing of the previous resolution):
That the directors be and they are hereby empowered pursuant to Section 95(1) of the Companies Act 1985 (“the Act”) to allot
equity securities (within the meaning of Section 94 of the Act) pursuant to the general authority conferred by resolution 6 as if
Section 89(1) of the Act did not apply to any such allotment, provided that this power shall be limited:
(a) to the allotment of equity securities in connection with a rights issue or other issue in favour of holders of ordinary shares
where the equity securities respectively attributable to the interests of all holders of ordinary shares are proportionate (as
nearly as practicable) to the respective numbers of ordinary shares held or deemed to be held by them, subject only to
such exclusions or other arrangements as the directors may deem necessary or expedient to deal with fractional
entitlements, legal or practical problems arising in any overseas territory, or by virtue of shares being represented by
depositary receipts, the requirements of any regulatory body or stock exchange, or any other matter; and
(b) to the allotment (otherwise than pursuant to sub-paragraph (a) above) of equity securities for cash up to an aggregate
nominal value of £63,817 .60
and this power shall, unless renewed, varied or revoked, expire on the earlier of 3 August 2008 or the conclusion of the
Annual General Meeting of the company to be held in 2008, save that the company may before such expiry make any
offer or agreement which would or might require equity securities to be allotted after such expiry and the directors
may allot equity securities in pursuance of such an offer or agreement as if the power hereby conferred had
not expired.
8 As a special resolution:
That, in accordance with Chapter VII of Part V of the Companies Act 1985 (“the Act”), the company
be generally and unconditionally authorised to make market purchases (as defined in section
163(3) of the Act) of its own ordinary shares on such terms, and in such manner as the
Directors may, from time to time, determine, provided that:
50:51
Tikit Group plc
Annual Report 2006
13534 30/03/2007 Proof 7
>> Notice of Annual General Meeting
13534TIKITGRO:13534TIKITGRO  12/4/07  08:42  Page 51 13534 30/03/2007 Proof 7
(a) the maximum aggregate number of ordinary shares hereby authorised to be purchased is 1,276,332;
(b) the minimum price which may be paid for an ordinary share is 10p (excluding expenses);
(c) the maximum price which may be paid for an ordinary share is an amount equal to 105 per cent of the average of the
middle market quotations for an ordinary share as derived from the London Stock Exchange Daily Official List for the five
business days immediately preceding the day on which the share is contracted to be purchased (excluding expenses); and
(d) the authority hereby conferred shall expire on the earlier of 3 August 2008 or the conclusion of the Annual General
Meeting of the company to be held in 2008, but a contract of purchase may be made before such expiry which will or may
be executed wholly or partly thereafter and a purchase of shares may be made in pursuant of any such contract.
9 As an ordinary resolution
That:
(a) the Tikit Group plc Share Option Scheme 2007 (“2007 Option Scheme”), the main features of which are summarised in the
Appendix to the Circular to shareholders dated 21 March 2007 and being in substantially the same form as in the draft rules
submitted to the Meeting and signed by the Chairman thereof for the purpose of identification be and is hereby approved
and adopted;
(b) the directors be and are hereby authorised to vote and be counted in the quorum at any Board meeting on any matter
connected with the 2007 Option Scheme, notwithstanding that they may be interested in that matter and the provisions of
the Articles of Association of the company be relaxed accordingly to that extent (except that no director may be counted in
a quorum or vote in respect of his own participation in the Option Scheme); and
(c) the directors be and are hereby authorised to do all acts and things that they consider necessary or desirable to give effect
to the operation of the 2007 Option Scheme.
By order of the Board Registered Office:
Africa House
64–78 Kingsway
London
WC2B 6AH
P Giuffredi
Company Secretary
21 March 2007
Important notes for shareholders
1 A Form of Proxy is enclosed. A member entitled to attend and vote at the meeting convened by the notice set out above is
entitled to appoint one or more persons of your choice to act as your proxy. A proxy may attend the meeting and, on a poll,
vote in respect of the shares you hold. A proxy need not be a shareholder of the company. You may use the enclosed Form of
Proxy to nominate your proxy. To be valid, Forms of Proxy must reach the company’s Registrar no later than 3.00 p.m. on 1 May
2007 . Completing and returning a Form of Proxy to the Registrar will not preclude you from attending and voting at the
meeting in person.
2 Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the company specifies that only those shareholders
registered in the company’s register of members at 3.00 p.m. on 1 May 2007 shall be entitled to attend or vote at this Annual
General Meeting in respect of the number of shares registered in their names at that time. Changes to entries on the register
after 3.00 p.m. on 1 May 2007 will be disregarded in determining the rights of any person to attend or vote at the meeting.
3 Copies of the Memorandum and Articles of Association of the company and the draft rules of the 2007 Option Scheme will be
available at the registered office of the company during normal business hours on each business day from the date of this
document until the date of the Annual General Meeting, and, together with non-executive directors’ service contracts and the
register of directors’ interests, will be available for inspection at the place of the Annual General Meeting from 15 minutes prior
to its commencement until its conclusion.
4 The holders of preference shares are entitled to receive this Notice of Meeting but are not entitled to attend, speak or vote at
the Meeting.
>> Notice of Annual General Meeting
13534TIKITGRO:13534TIKITGRO  12/4/07  08:42  Page 52 13534 30/03/2007 Proof 7 13534 30/03/2007 Proof 7
2002 2003 2004 2005 2006
£’000 £’000 £’000 £’000 £’000
 Turnover 8,231 9,558 11,903 20,162 23,517
 Pre-tax profit 648 1,177 1,512 2,103 2,888
* before goodwill amortisation and share option charges
Highlights 01
About Us 02
Chairman’s statement 06
Chief Executive’s statement 12
Financial review 16
Directors 18
Corporate governance statement 20
Remuneration report 22
Report of the directors 24
Statement of directors’ responsibilities 26
Report of the independent auditors 27
Consolidated profit and loss account 28
Consolidated statement of total recognised
gains and losses 29
Consolidated balance sheet 30
Company balance sheet 31
Consolidated cash flow statement 32
Notes forming part of the financial statements 33
Notice of AGM 51
Directors and advisors 53
>> Contents
 Consultancy 31%
 Services 34%
 Software 31%
 Other 4%
Percentage split of 2006 revenues
>> 5 Year Performance
Professional IT for law firms
and accountancy practices
>> Directors and advisers
Tikit Group plc
Annual Report 2006
52:53
Directors M McGoun BSc Msc (Chairman)
D Lumsden (Managing Director)
P Giuffredi ACA (Finance Director)
R Price BSc (Econ) FCA, FCCA, CTA (Independent Senior Non-Executive)
N Briant LLB (Independent Non-Executive)
Secretary and registered office P Giuffredi ACA
Africa House
64–78 Kingsway
London
WC2B 6AH
Telephone: (020) 7 400 3737
Facsimile: (020) 7 400 3738
Website: www.tikit.com
Company number 4164203
Auditors BDO Stoy Hayward LLP
8 Baker Street
London
W1U 3LL
Solicitors TLT LLP Faegre & Benson LLP
Sea Containers House 7 Pilgrim Street
20 Upper Ground London
London EC4V 6LB
SE1 9LH
Brokers and Nominated Adviser Charles Stanley & Company Limited
25 Luke Street
London
EC2A 4AR
Principal bankers National Westminster Bank Plc
98 St Paul’s Churchyard
London
EC4M 8BU
Registrars Capita Registrars
Northern House
Woodsome Park
Fenay Bridge
Huddersfield
HD8 0LA
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Annual Report and Financial Statements 2006
Tikit Group plc Annual Report and Financial Statements 2006
Professional IT for law firms
and accountancy practices
Tikit
Africa House, 64-78 Kingsway, T: +44 (0) 20 7 400 3737 www.tikit.com
London WC2B 6AH F: +44 (0) 20 7 400 3738
www.tikit.com
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