Annual Report & Accounts 2006
Public Relations      Advertising and Marketing Services      Research
In a transparent world 
your reputation can be the difference 
between success and failure. The Chime Group helps clients create, manage, 
monitor and market their businesses, brands and 
reputations both in the UK and internationally.
Chime is the holding company for the UK’s leading 
public relations group, Bell Pottinger; the UK’s leading
research and consultation group, Opinion Leader; 
and with VCCP , one of the fastest growing advertising 
and marketing services groups in the UK.
Financial highlights 1
Chairman’s statement 2
Chief Executive’s review 6
Public Relations Division 10
Advertising and Marketing 
Services Division 12
Research Division 14
Finance Director’s review 16
Board of directors 18
Executive management team 20
Directors’ statement on 
corporate governance 22
Directors’ remuneration report 26
Directors’ report 30
Statement of directors’ 
responsibilities 31
Independent auditors’ report 
to the members of 
Chime Communications plc 32
Consolidated income statement 33
Consolidated statement 
of recognised income 
and expense 34
Consolidated balance sheet 35
Consolidated cash flow statement 36
Notes to the consolidated
financial statements 37
Independent auditors’ report 
to the members of 
Chime Communications plc 66
Company balance sheet 67
Notes to the Company 
financial statements 68
Information for shareholders 72
Chime and the environment IBC
Contents Financial highlights 1
£78.8m +25%
2005: £63.0m
Operating income up 25% to £78.8 million
£12.3m +47%
2005: £8.3m
Operating profit up 47% to £12.3 million
£11.1m +51%
2005: £7.3m
Profit before tax up 51% to £11.1 million
3.08p +24%
2005: 2.49p
Earnings per share up 24% to 3.08p
Summary of 2006 results 2 Chime Communications plc Annual Report 2006   
Chairman’s statement
At the onset of 2006, we redefined the Chime
Group’s vision and strategy, and developed a
three year plan. Before we present our results, 
I would like to share these with you as context
to our performance.
Our vision
To be the modern communications group:
• by being up-to-date, contemporary and 
competitive in our use of communications 
technology
• by being in touch with the mood and spirit 
of the times (be it in politics, corporate life, 
the consumer agenda, etc.) so that our
communication strategies relate to all our
audiences
• by building and sustaining social and business
networks
• by making reputation the most important 
measure of all the work we do for our clients.
Our strategy
Our strategy is to build market leading brands
to answer the modern demands of our 
clients in:
• reputation management in all relevant sectors 
of the market through the Bell Pottinger 
Group
• international branding and communication 
through VCCP and our marketing services 
group
• issue driven research through our market 
leading research companies.
We will achieve this through:
• new product development and start-ups in
high growth market sectors e.g. search and
web-mapping
• targeted acquisitions where we see a long 
term strategic fit and clear opportunities to 
improve our offering
• integrating digital communication into all our
communication plans.
These are excellent results.The company has made
considerable progress across all its divisions with double
digit growth in all the key indicators. This growth is
continuing into the beginning of 2007. We are delighted
with the acquisition of Fast Track, the UK’s leading sports
marketing agency.
Lord Bell
Chairman
2006 2005 2006 2005
Division % % % %
Public Relations 61 65 65 75
Advertising and 
Marketing Services 33 29 27 17
Research 6 6 8 8
100 100 100 100
Share of 
operating income
Share of 
operating profit
Three year plan
• To sustain the highest margin in our sector at 
18% by 2008 (including central costs)
• to cross-market our relationships across 25% 
of our client base and 60% of our income
• to raise average fee per client to £80,000 
by 2008
• to leverage high growth sectors, such as
digital communications, geopolitical
consulting, deliberative research
• to increase overseas income to 40% of total 
Group income by 2008.
Summary of results
The results for 2006 show excellent growth over
last year from all of our divisions.
Operating income in 2006 increased by 25% to
£78.8 million and operating profit increased by
47% to £12.3 million, resulting in an operating
profit margin increase to 15.6%. Operating
income (excluding acquisitions) rose by 11%
and operating profit grew by 33%. Earnings per
share increased by 24.0% to 3.08p from 2.49p. 
The Board is proposing a final dividend of 0.40p
per share compared to 0.32p in 2005, giving a
total dividend per share of 0.58p compared to
0.48p in 2005, an increase of 21%.
Net cash at 31 December 2006 was 
£2.9 million compared to net debt at 
31 December 2005 of £3.0 million.
Review of operations
All three of our divisions showed double digit
growth in operating income and operating profit
growth in excess of 20%.
The percentage contribution from each of our
divisions is shown above. 3
Public Relations Division
The Public Relations Division includes the Bell
Pottinger Group, Bell Pottinger Sans Frontieres,
Bell Pottinger Middle East, Good Relations, 
De Facto, Resonate, Harvard and Insight.
Operating income for 2006 increased by 17%
to £47.8 million and operating profit increased
by 24% to £8.3 million, resulting in an operating
profit margin of 17.3%.
Bell Pottinger Group retained its position at 
the top of the PR Week league table published
in April 2007. It has been number one for 
five years.
Advertising and Marketing Services
Division
The Advertising and Marketing Services Division
incorporates VCCP , VCCP digital, VCCP
Search, VCCP Blue, SFW (Direct Marketing),
BMT (formerly Gasoline), Pure Media, Someone,
Teamspirit and TTA.
2006 2005
£m £m % change
Operating income 26.3 18.6 +40.9%
Operating profit 3.5 1.5 +137.4%
Operating profit 
margin 13.4% 8.0%
Operating income for 2006 increased by 41%
to £26.3 million and operating profit increased
by 137% to £3.5 million, resulting in an
operating profit margin of 13.4%.
Research Division
The Research Division incorporates Opinion
Leader, Ledbury Research and Facts International
which was acquired in February 2007.
2006 2005
£m £m % change
Operating income 4.7 3.6 +30.9%
Operating profit 1.0 0.7 +48.4%
Operating profit 
margin 21.7% 19.1%
Operating income for 2006 increased by 31%
to £4.7 million and operating profit increased by
48% to £1.0 million, resulting in an operating
profit margin of 21.7%.
11%
33%
15.6%
Margin
Organic growth in 
operating income
Organic growth in 
operating profit
2005: 13.2%
£2.9m
0.58p
Net cash/(debt)
Dividend increased by
21% to 0.58p per share
2005: (£3.0m)
2005: 0.48p
2006 2005
£m £m % change
Operating income 47.8 40.8 +17.3%
Operating profit 8.3 6.6 +24.0%
Operating margin 
profit 17.3% 16.3%
New business wins in 2006 
have included:
- 118 118
- Ladies European Golf Tour 
- Lastminute.com 
- Body Shop
- British Technology Group (BTG) 
- National Grid
- Digital UK
- Network Rail
- Disney Consumer Products
- Dubai Aerospace Enterprise (DAE)
- Dubai International Airport
- Pernod Ricard 
- Pfizer 
- Foxtons 
- Polo Ralph Lauren
- GSK
- Toshiba Mobile
- Hogg Robinson Group 
- Kellogg’s
New business wins in 2006 
have included:
- London Lite
- Coke Zero
- Miller Brands
- Department for Work and Pensions 
(Benefit Fraud Campaign)
- Muller
- Powerplate
- Five
- Qatar Financial Centre
- Hoseasons
- Sheilas’ Wheels
- House of Fraser
- Weight Watchers for Heinz
- Inside Track
New business wins in 2006 
have included:
- Age Concern
- Her Majesty’s Treasury
- Barclays Wealth
- Molton Brown
- BBC Radio 5 Live
- National Housing Federation
- The Business Channel
- Norwich Union
- Cancer Research UK
- Liverpool Victoria 
- Carbon Trust
- Ofcom 
- Crisis
- Shelter
- Department for Constitutional Affairs
- Sony PlayStation
- Department for Work and Pensions 4 Chime Communications plc Annual Report 2006   
Chairman’s statement
Our marketplace continues to
grow and we foresee further
growth in international revenue
this year. Our ability to develop
international work without the
massive overheads of an
international network means
that it is very profitable growth. 
Business activity
The Group acted for 1,157 clients in 2006
compared to 1,069 in 2005. 215 of these
clients used more than one of our businesses
(183 in 2005) which represented 54% of total
operating income (2005 – 44%).
In 2006, 141 clients paid us over £100,000,
compared to 124 in 2005. Our top 30 clients
represented 45% of total operating income
(2005 – 38%) and our largest client represented
9% of total operating income (2005 – 8.6%).
Average income per employee was £104,000
(2005 – £98,000). Average fee income per client
was £68,000 compared to £60,000 in 2005.
During the year under review, 9% of our
business came from digital activity and 
32% of our operating income came from 
international work (international clients and 
work done overseas).
Corporate and social responsibility
The Group has made a commitment to improve
its environmental practices and as a result
became carbon neutral in January 2007. 
(See inside back cover for further information.)
Corporate developments
We have announced the proposed 
acquisition of Fast Track Sales Limited 
and its subsidiaries. Fast Track is the UK’s
leading sports marketing agency.
The initial consideration is £15 million payable
£10 million in cash from within the Group’s
facilities and £5 million in Chime shares.
Deferred consideration is payable on the
average profits for the three years ended 
31 December 2009 and the three years 
ended 31 December 2012. The maximum 
total consideration (initial and deferred) is 
£43 million. The transaction (initial and 
deferred considerations) is based on a 
multiple of seven times average pre-tax profits.
Deferred consideration can be paid in Chime
shares or loan notes at Chime’s discretion. 
Any Chime shares issued to satisfy the deferred
consideration are subject to restrictions on sale.
Reported pre-tax profits (under UK GAAP) for
the year to 31 December 2006 were £371,000
and the four main shareholders of Fast Track
have warranted pre-tax profits for the year to 
31 December 2007 of £2.5 million. It is expected
that the transaction will be earnings enhancing
to the Group. 
Gross assets (under UK GAAP) of the 
Fast Track Group at 31 December 2006 
were £6.6 million.
The four principal shareholders and Directors 
of the company, Alan Pascoe, Edward Leask,
Jon Ridgeon and Jim Glover, are remaining 
with the Group under their existing contractual
arrangements.
As this transaction will be a class 1 acquisition
for the Group under the Listing Rules, a circular
has been sent to shareholders and their approval
sought for the transaction. The financial
information included in the circular has been
prepared in accordance with IFRS and Chime’s
normal accounting policies as is required by the
Listing Rules as these are the financial reporting
procedures of the Group.  5
Board changes
Two of our Non-Executive Directors have 
retired from the Board. We would like to thank 
Dame Sue Tinson and Lord Hannay for their
considerable contribution over many years.
We are in the process of recruiting new 
Non-Executive Directors.
Outlook
Our performance in 2006 was excellent and we
have more than achieved the targets we set
ourselves in the first year of our three year plan.
Our marketplace continues to grow and we
foresee further growth in international revenue
this year. Our ability to develop international
work without the massive overheads of an
international network means that it is very
profitable growth. 
We have invested in our digital/online capability
so that we are well positioned for the much
commented-on movement from offline to online. 
Our results for the first two months of 2007 are
better than we achieved in 2006 and we are
optimistic about the full year. 
Lord Bell 
Chairman
12 March 2007
Our performance in 2006 was
excellent and we have more
than achieved the targets we
set ourselves in the first year 
of our three year plan.
Major new client wins
As a result, the profit and gross asset numbers
stated above may differ from those that appear
in the circular. Any such differences will be
explained in the circular.
We have expanded our representation in the
Middle East by opening offices in Qatar, Saudi
Arabia and Abu Dhabi. These report to our
existing headquarters in Dubai – Bell Pottinger
Middle East.
We have established a specialist office in
Washington DC as part of Bell Pottinger 
Sans Frontieres. 
We have continued to expand the digital
capabilities within the Group during 2006. 
This expansion has included:
• a web-mapping business within the Bell
Pottinger Group which provides clients with
analysis of online communications about their
brands and issues facing them
• an integrated business within VCCP which
offers pay-per-click and natural search 
engine optimisation services, online creative
advertising and an online media buying
capability.
In February 2007 we continued the expansion
of our research division by acquiring a 75%
stake in Facts International, a fieldwork research
business based in Ashford, Kent from Barbara
Lee and Elizabeth Teague. The remaining 
25% is held by the new Chairman of Facts
International. The gross assets of Facts at 
31 July 2006 were £1.2 million. 6 Chime Communications plc Annual Report 2006   
The Reputation Revolution
Reputation is governed by what you say, what
you do and what other people say about you.
The early years of the 21st century have been 
a time of revolution for the communications
industry, with the transition to a new media
landscape overturning old models of influence
and creating new challenges for those entrusted
with clients’ brands and reputations.
The success of the Group’s three divisions 
in the last 12 months owes much to the manner
in which they have anticipated these changes
and worked to develop solutions that work 
with them. 
Across the Bell Pottinger Group, this can be
summed up by an emphasis for our clients 
on ‘doing the right thing, and getting the credit
for it’. 
In VCCP’s case, it has meant developing a new
model of ‘visual communication’ that reduces
advertising to first principles and promotes
brand identity and brand awareness without
telling audiences what to think. 
The work of Opinion Leader has pioneered a
new form of deliberative consultation that goes
beyond polling and focus groups to establish
genuine collaboration with an audience,
delivering greater understanding of issues for 
all concerned.
Chime’s approach to public relations,
advertising and marketing services and research
is founded on an understanding that these
disciplines work best when integrated together.
Christopher Satterthwaite
Group Chief Executive
Brands and reputations can no
longer be managed in isolation;
instead, the true measure of
marketing and business success
is ‘Reputation’.
Campaign: Top 100 Agencies
PR Week: Top 100 Agencies
Integrated campaigns for the likes of the 
Qatar Financial Centre, reflects the reality 
that today’s communication must frequently 
address different audiences through different
disciplines. Brands and reputations can 
no longer be managed in isolation; instead, 
the true measure of marketing and business
success is ‘Reputation’. 7
Some of the high profile activities we were involved in during 2006 include:
High profile activities where we
advised clients included: 
• Devising and managing 
National Pensions Day, bringing
together some 1,100 citizens 
to debate the recommendations
of the Pension Commission on
pension reform. 
• The switch of GSK’s leading
migraine treatment, Imigran,
from prescription only to over
the counter.
• The communications strategy
for Sky’s corporate campaign
‘The bigger picture’.
• DP World’s successful 
£3.9 billion bid for P&O Ports.
• Playtech’s £550 million IPO on
the London market.
• The £34 million sponsorship of
Tottenham Hotspur Football
Club by Mansion.
• Creating the 118 118 online
Caroloke campaign.  
• Helping restore Foxtons’
reputation as London’s leading
estate agent following a series
of hostile accusations from the
BBC’s Whistleblower
programme.
• Driving the global launch of 
the new $15 billion Dubai
Aerospace Enterprise.
• Supporting sponsorship
activities for Emirates as it
became the first airline sponsor
of the 2006 FIFA World Cup in
Germany.
• The new labelling campaign 
for the UK’s leading food
manufacturers, Food & Drink
Federation. 
• Polo Ralph Lauren launching
the new Wimbledon uniforms.
• Managing the personal 
profile of Zara Phillips as she
became World Eventing
Champion and BBC Sports
Personality of the Year.
Awards we have won include:
• Health Insurance Award for 
Best Use of Marketing to
Intermediaries for Norwich
Union Healthcare.
• O2’s winning of the Marketing
Society’s Loyalty Award in the
2006 Awards for Excellence and
Campaign’s Poster Award for
Best IT and Consumer Durables
Advertisement for O2.
• IPA Effectiveness Awards
2006 Gold for O2 and Bronze 
for ING Direct.
• Marketing Week Effectiveness
Award winner for Financial
Services – ING Direct and 
winner for Technology and
Telecoms – O2.
• Winner in 2006 of two of the
Market Research industry’s
Excellence and Effectiveness
Awards.
Public Relations Division
Bell Pottinger Sans Frontieres
Bell Pottinger Group
Bell Pottinger Collective
Bell Pottinger Corporate & Financial
Bell Pottinger Public Affairs
Bell Pottinger Business & Brand
Bell Pottinger Sport & Sponsorship
Bell Pottinger North
Bell Pottinger USA
Bell Pottinger Middle East
Good Relations Corporate
Good Relations Healthcare
Good Relations Consumer
Good Relations Political
Good Relations Property & Planning
Good Relations Wales
Harvard Public Relations
Harvard GMBH
MMK
Traffic Advertising
Insight Marketing
Resonate
De Facto
Rare Corporate Design
The Smart Company
Advertising & Marketing 
Services Division
The VCCP Group
VCCP
BMT
Pure Media
VCCP Blue
VCCP digital
VCCP Search
SFW
Someone
Specialists
Teamspirit
TTA Group
Research Division
Facts International
Opinion Leader Group
Opinion Leader
Ledbury Research
Chime Network
Centre 8 Chime Communications plc Annual Report 2006   
Chief Executive’s review
Web 2.0 has grown the size of that room to the
extent that no organisation can afford to ignore
what’s said in it. Whilst a brand image belongs
to a brand, a brand’s reputation belongs to its
public. It is all the more powerful for that – and
all the more difficult to measure and control.
Modern reputation management involves far
more than third-party coverage, word of mouth
or buzz (important though these are). Brand
awareness and image may contribute to
reputation but they certainly do not control it. 
In the ‘upload’ culture, people judge you by
your actions rather than your words. The task of
marketing is increasingly to enable this process,
encouraging a brand to do the right thing, and
encouraging a brand’s public to participate in
and interact with its reputation.
People or brands with poor reputations tend 
to say one thing and do another. Conversely,
brands with good reputations tend to do what
they say. Either way, people notice – and
people tend not to keep it to themselves.
How did Channel 4 behave when confronted
with the racism row over Big Brother? Was
Charles Dunstone right to pull The Carphone
Warehouse’s sponsorship of the show in
response? These are no longer simply matters
for Campaign or Marketing Week. The entire
country has a view.
The reputation revolution has been driven by
the internet, or more precisely, the explosion in
social networking that the internet has enabled.
In a world in which people trust people like
themselves more than sources of authority, 
in which points of shared interest are being
connected through millions of online forums,
and in which transparency is a fact of life, our
approach to brand communications needs 
to change. As the furore around Big Brother
perfectly illustrates, we have moved from 
a ‘download’ mentality to an ‘upload’ one. 
The balance of power now lies with user-
generated, ‘uploaded’ points of view. The 
old rules of marketing and public relations 
don’t work anymore.
The Wikipedia consensus describes reputation
as “the general opinion (more technically, a
social evaluation) of the public toward a person,
a group of people or an organisation”. In other
words, reputation is a social phenomenon. 
The most succinct way I’ve heard it described
is, “what people say about you when you’ve 
left the room”. 
Good people and good brands are able to
display integrity because they know who they
are and behave accordingly. Bad people and
bad brands lack this inherent self-awareness.
It’s therefore hardly a surprise that good brands
tend to be the brands in touch with their
audiences, the ones that listen to them intently. 
As a result, good brands know what decisions
to take, what is ‘right’ and what fits with 
the times. This enables them to be true to
themselves, yet innovate with integrity. In the
world of brand reputation, this is the only true
route to success. The fact that brand reputation
follows different rules does not mean that it
follows no rules at all. 
The success that Chime has delivered over the
past 12 months has come from a willingness 
to explore the ways in which the new media
landscape has transformed our business, and
develop innovative solutions to meet those
challenges, be they through public relations,
brand marketing, innovative research
techniques, or a combination of all three. 
Over the course of this report we will describe
some of the solutions that Chime agencies have
developed, as well as additional measures that
the Group is taking to anticipate the next stages
of the brand reputation revolution. 
It’s an approach that has brought success
across the Group in 2006 and we expect it to
continue to do so in the future.
Brand reputation is headline news this week, last
week and I guarantee every week this year. 
In the ‘upload’ culture, people
judge you by your actions rather
than your words. The task of
marketing is increasingly to
enable this process, encouraging
a brand to do the right thing, 
and encouraging a brand’s
public to participate in and
interact with its reputation. 9
“To thyself be true in all you say and do”.
Brand reputation is fragile. But do you
know what your brand really stands for?
In a service orientated economy, brands
help guide internal behaviours and deliver
a brand’s promise consistently. 
Accept that you can no longer control 
the message. All you can do is join in the
conversation and believe that you have 
a more persuasive voice. 
Chatham House rules no longer exist 
and have been replaced by Glass House
rules. Be prepared for anything you say 
to be repeated or passed on, especially
e-mails.
Reference has replaced deference. 
All brand communication must measure
up to the closest scrutiny and ideally fuel
brand conversations.
Better to under promise and over deliver
than fall into the ‘raised expectation/low
delivery’ trap.
Reputation is earned. Customers are
increasingly looking for the values behind
brands, so ‘what you do’ to create your
brand every day is becoming a more and
more serious factor of choice. Care for
your employees, care for the environment,
care for the ingredients of your brand will
have a greater and greater influence on
your reputation as information is shared
across the connected world of your
employees, stakeholders, detractors 
and customers.
Those closest to you tend to be your
fiercest critics. In some instances they
become whistleblowers. Treat them
complacently at your peril. Over
communicate to those closest to you 
to keep them as connected to your brand
as possible. 
Reputation is a social phenomenon. 
Often “less is more”. Charismatic brands
rely on a visual narrative more than a verbal
narrative. This provides huge scope 
for advertising, which can leverage the
visual, whereas public relations tends to
the verbal.
Brand reputation depends on its weakest
link. What are your brand moments of
truth? Are you geared to fulfil customers’
expectations of them?
Gear your brand and corporate
communications resource to the
interconnected world of Web 2.0.
Marketing Directors working in isolation
from Communication Directors is a recipe
for disaster and increasingly the functions
should be merged or reconfigured, e.g.
into ‘brand newsrooms’. Entrepreneurial
and service-orientated companies act like
this already.
Brand owners have long known that
‘perception is reality’. In a Web 2.0
environment perception is increasingly
‘Googled reality’. Successful brands of the
future will monitor market conversations
and engage with them as second nature.
‘User generated uploads’ are a 24/7
reality. Politicians speak of “permanent
campaigning” and the need to win hearts
and minds through the media on a daily
basis. Brands of the future will employ
brand newsrooms as a commonplace
function, much as successful retail brands
like Marks & Spencer do today.
Everything is getting faster. Kick the 
habit of using historical panel data that
records points of view so long after the
conversations have happened that 
they have little relevance to action. 
Use research to involve your customers in
the development of your brands and track
attitudes in real time when you can enter
the conversation if you choose to.
The Wikipedia consensus describes reputation as “the general opinion
(more technically, a social evaluation) of the public toward a person, 
a group of people or an organisation”. 
In other words, reputation is a social phenomenon. The most succinct 
way I’ve heard it described is, “what people say about you when you’ve 
left the room”.  
What you say What you do What others say about you Public Relations Division
The Public Relations Division:
Bell Pottinger Sans Frontieres
Bell Pottinger Group:
Bell Pottinger Collective
Bell Pottinger Corporate & Financial
Bell Pottinger Public Affairs
Bell Pottinger Business & Brand
Bell Pottinger Sport & Sponsorship
Bell Pottinger North
Bell Pottinger USA
Bell Pottinger Middle East
Good Relations Corporate
Good Relations Healthcare
Good Relations Consumer
Good Relations Political
Good Relations Property & Planning
Good Relations Wales
Harvard Public Relations 
Harvard GmbH
MMK
Traffic Advertising
Insight Marketing
Resonate
De Facto
Rare Corporate Design
The Smart Company
The Group’s campaign for the Qatar Financial
Centre, which used the skills of 10 different
Chime companies to launch an intricately planned
and highly integrated global awareness campaign,
is a perfect example of such large-scale, cross-
disciplinary work. The launch included financial
public relations, speech-writing and event
management as well as advertising and 
market research.
Bell Pottinger Sans Frontieres, the London-
based consultancy established four years ago,
continued to extend its geographical reach, 
with a client base now extending into the
Americas, Eastern Europe, the Caucases,
Middle East and Africa. Bell Pottinger LLC 
will open this year in Washington DC. 
The growth achieved by Bell Pottinger 
Sans Frontieres since its founding reflects the
worldwide nature of strategic communications
in an age of globalisation, and the value of a
virtual network with in-country associates
around the world. 
Foxtons Bell Pottinger Business
& Brand worked with Foxtons to
enhance their corporate and
business reputation following
hostile media comment
Wimbledon Polo Ralph Lauren 
became the first sponsor of the 
Wimbledon officials and ball boys 
and girls, a campaign launched by 
Bell Pottinger Sport & Sponsorship
BAE Systems Executive profiling, strategic
media relations and corporate messaging 
around key events
Scottish & Newcastle Smart has been working
with S&N since 2002, advising on corporate
responsibility issues, including responsible drinking
Pentax Consumer, corporate and trade   
public relations activity includes  
media and industry relations and  
the running of a high profile  
brand ambassador campaign
Bell Pottinger Group companies exist to make clients more
successful by influencing the opinions and behaviours of
those people their clients depend on, be they consumers,
investors, employees or governments.
10 Chime Communications plc Annual Report 2006
Business review
The past year saw Bell Pottinger Group retain
its position as the number one Public Relations
Group in the UK, a position it has held for the
last five years. Once again, the Group delivered
strong growth, with operating income rising
17% to £47.8 million and operating profit up
24% to £8.3 million. The Group’s operating
margin has risen from 16.3% to 17.3%.
The Group includes a diverse range of
businesses involving everything from financial
public relations to government and consumer-
facing agencies, to crisis and issues management
and corporate responsibility. Across the board,
these companies have benefited from a
changing media environment that places huge
emphasis on transparency and reputation, and
makes good communication in all directions
central to any organisation’s success.
However, huge potential for growth also exists
within the Group itself. A strategy of cross-
referral, enlisting relevant disciplines from across
the Group to deliver dynamic, integrated
campaigns, has proven a significant source 
of revenue growth during 2006. Shared client
business currently accounts for around one
third of Group revenue, and the aim will be to
grow this further over the next year. The
relaunch of the Bell Pottinger Group brand 
has supported this process with a more
cohesive identity.
Despite a growing sense of group
identity, the individual agencies
within the Group remain market-
leading propositions in their 
own right, and the high-profile
campaigns orchestrated by 
each in 2006 show that greater
cohesion does not come at the
expense of individual success.
The Bell Pottinger Collective, a team of senior
operators drawn from across the Group, has
been developed to provide an accessible, central
point of contact that helps clients to establish the
skills that they need for a campaign. The Collective
helped to deliver several million pounds-worth
of revenue to the Group during 2006. 11
Besides the Qatar Financial Centre, DAE 
and 118 118, key new business wins for the
year included Foxtons, whose reputation 
Bell Pottinger Business & Brand worked to
restore following a hostile BBC Whistleblower
programme, 888.com, Hansard, Petrofac 
and the British Technology Group.
The strong performance of the Group in 
2006 has been hugely influenced by the
transformation of the media environment 
and the arrival of a digital world. The greater
transparency resulting from this has made the
ability to communicate an essential part of any
organisation’s success; it has also increased the
number of forms that this communication can
take. As natural storytellers, regardless of the
channel through which those stories are told,
public relations agencies have never had a
more central role in the communications mix.
Internal communication has grown in
importance as businesses are increasingly
judged by the actions of all their members.
Corporate responsibility is playing its own 
role in driving demand for public relations, as
businesses must both do the right thing and be
seen to be doing so. Consumer public relations
is rising up the marketing agenda as marketing
directors realise the return on investment that
can be delivered through this channel.
At the same time, increased public scrutiny, the
popularisation of business issues and a growing
appetite for regulation are driving demand for
financial public relations and public affairs
expertise, as well as for specialist skills in areas
such as healthcare.
The most profound development of all, however,
lies in the need for joined-up communications
strategies and an integrated approach to
implementation. Today’s public relations
challenges involve dealing with more than one
audience, and using more than one discipline.
The Bell Pottinger Group is ideally positioned 
to meet them.
Despite a growing sense of group identity, the
individual agencies within the Group remain
market-leading propositions in their own right,
and the high-profile campaigns orchestrated by
each in 2006 show that greater cohesion does
not come at the expense of individual success.
Key campaigns included the global launch of the
$15 billion Dubai Aerospace Enterprise (DAE) by
Bell Pottinger Business & Brand, Bell Pottinger
Corporate & Financial’s work on the £550 million
Initial Public Offering of Playtech, Bell Pottinger
Public Affairs’ work on food labelling and Bell
Pottinger Sport & Sponsorship’s launch of Polo
Ralph Lauren’s new Wimbledon uniforms.
Bell Pottinger’s consumer public relations agency,
Resonate, demonstrated the increasing value 
of digital public relations through the attention
generated by its innovative, seasonal ‘Caroloke’
campaign for 118 118. Good Relations
Corporate worked with Honda on the ‘Power 
of dreams’ campaign around its Asimo robot,
whilst Good Relations Political helped to land
multi-billion-pound training contracts for Metrix.
In Germany, Harvard led the campaign to bring
Sony PlayStation to a wider audience, whilst
MMK worked with both the German Football
Association and Interior Ministry on developing
a highly visible arts and culture programme to
coincide with the FIFA World Cup. Macclesfield-
based Insight delivered more than a thousand
customer endorsements for Hewlett Packard, 
in 10 different languages.
The Smart Company’s recent arrival has given
the Group valuable expertise in the vitally
important area of corporate responsibility;
alongside work for Pearson and Scottish &
Newcastle, the agency helped Chime to achieve
carbon neutral status in 2006. De Facto, the
healthcare agency, which also joined the Group
in 2005, demonstrated the potential of the
clinical trials marketing sector through its work
for GlaxoSmithKline and Pfizer.
Qatar Financial Centre This successful public
relations campaign is the result of co-operation 
of 10 companies within the Chime Group
118 118 Resonate’s main objective
was to drive call volume via
creative consumer engagement
Our skills
Our people are leaders in their field,
working together to reach every audience,
in any circumstance, through any medium.
Brand building communications
Financial public relations
Investor relations
Corporate public relations
Business-to-business public relations
Consumer public relations
Issue and crisis management
International communications
Change communications
Digital media
Mapping online conversations
Media relations
Public affairs
Corporate responsibility
Design, branding and corporate literature
Sports and sponsorship
Emirates Consumer and B2B media relations,
public affairs and international sports
sponsorship management and exploitation
Web-mapping Maps based on the statistical
analysis of the links between influential sites
are beginning to be seen as a key tool  Advertising and Marketing
Services Division
Advertising and Marketing
Services Division:
The VCCP Group:
VCCP
BMT (formerly Gasoline)
Pure Media
VCCP Blue
VCCP digital
VCCP Search
SFW
Someone
Specialists:
Teamspirit
TTA Group
The Advertising and Marketing Services Division
enjoyed a year of strong growth in 2006, with
operating income up 41% to £26.3 million and
operating profit rising 137% to £3.5 million. In
the process, standout work was delivered for
brands such as O2, Five, Coke Zero, Scottish
Widows and Berkeley Homes. 
The combination of growth and creative
recognition demonstrates the strength of 
the Group’s position as innovative brand
integrators, and the extent to which the VCCP
approach has anticipated changes in the
communications landscape.
Key activities for the year included the high-
profile launch of Coke Zero in the UK, a campaign
that delivered higher advertising awareness than
that achieved by the original Coca-Cola launch.
Coke Zero has further reinforced VCCP’s
reputation as the agency for major brand
launches following the success of its O2 launch
in 2002 and its establishing of ING Direct’s
brand in the same year, both of which
continued to pick-up a sweep of industry
awards in 2006. A hugely innovative campaign
for Channel Five’s Prison Break series
demonstrated the centrality of digital to the
VCCP approach. VCCP digital increasingly sits
at the heart of the Group’s offer, playing a
central role in campaign development.
During the year the Group also became the first
creatively led advertising company to launch a
specialist search marketing agency. The VCCP
Search team brings to the Group combined
search marketing experience of over 30 years,
offering real credibility in such a young growth
industry. During 2006, the agency successfully
established its own proprietary search
technology and pioneered the concept of
‘search relations’, a fusion of public relations
and search marketing expertise.
Berkeley Homes TTA provides
Berkeley Homes consumer and 
lifestyle public relations
Five VCCP works closely with
Five in the strategic development
and creative execution of their
advertising campaigns
O2 VCCP launched the O2 brand, and creates 
fully integrated work from above-the-line advertising
right through to internal communications
The VCCP Group has a firmly established reputation for
brand integration and innovation. Besides advertising, 
its offer incorporates digital communication and search
marketing, design, direct marketing, media planning and
buying and sales promotion. The advertising and marketing
services division also includes specialist marketing and
public relations agencies for property and financial services.
12 Chime Communications plc Annual Report 2006
Business review
Coke Zero has further 
reinforced VCCP’s reputation 
as the agency for major brand
launches following the success
of its O2 launch in 2002 and 
its establishing of ING Direct’s
brand in the same year.
Scottish Widows Teamspirit 
provides on and offline
communications for one of 
the most famous financial 
brands in the UK 13
The period will also see the relaunch of
Gasoline as BMT (Branded Moments of Truth).
The agency gives the Group important access
to the final moments of the consumer decision-
making process and provides potentially huge
influence of purchase choices. The research
carried out by major brands such as P&G in 
this area demonstrates the growing value of 
this area of work.
The specialist financial services agency,
Teamspirit, has long been a pioneer of 
an integrated approach to financial
communications and continued to innovate
successfully in 2006. The launch of Teamspirit
Public Relations recognises the growing
importance of third-party endorsement to the
reputation of financial services brands; and the
agency experienced strong growth in its digital
work, including a major launch for Scottish
Widows, as financial services brands look to
establish a dialogue with consumers online.
TTA continues to handle the public relations 
and marketing for 70 property clients worldwide,
and represents over £30 billion-worth of assets
in locations from Europe to the Middle East,
Asia and the United States. The agency is
quickly establishing a lead role in online
property marketing, adding paid for search,
website design and build, interactive TV and
client extranets to its existing services.
Key wins for Teamspirit in 2006 included landing
the Sheilas’ Wheels public relations account
and being reappointed to the roster of agencies
for Scottish Widows and Lloyds TSB following 
a four-way pitch. TTA’s key 2006 wins included
SEGRO (formerly Slough Estates), Durkan Group,
Laing O’Rourke, InterContinental Hotels &
Resorts and Quintain Estates and Development.
Key client wins for the VCCP Group in 2006
included Channel Five, Weight Watchers from
Heinz and the Qatar Financial Centre, as well 
as Skinny Cow, London Lite and the COI
Benefit Fraud campaign.
The Group’s specialist implementation agencies
play a key role in realising the promise of expert
brand integration, and delivered a significant
contribution to growth in 2006. The direct
marketing agency, SFW, landed the House 
of Fraser, O2 and Morley Fund Managers
accounts and was described as the ‘agency of
the moment’ by the direct marketing industry’s
trade journal, Precision Marketing. Promotions
marketing specialists, Gasoline, won spots 
on the agency rosters for Emirates and the 
COI and also picked up the Muller and SAB
Miller accounts.
Digital and search marketing will continue to sit
at the heart of the VCCP Group’s offer in 2007,
ensuring that clients’ brands are able to operate
expertly online whilst remaining wholly in touch
with their identity and strategy. The successful
establishment of VCCP Search provides the
Group with a key strength; search accounts 
for a growing share of digital media and is 
an increasingly vital component of any
campaign plan.
The next 12 months will also see the launch of
the Group’s brand identity agency, Someone,
and the fast-track brand integration agency,
VCCP Blue. Both are natural extensions of 
the Group’s existing offer, which promise to
generate new income streams: Someone builds
on VCCP’s heritage and reputation for working
with clients and branding agencies on the early
stages of launch campaigns; VCCP Blue will
make the VCCP approach available to clients
on tighter budgets.
ING Direct VCCP continues to
deliver this highly integrated and
memorable brand campaign across
their growing product range
Sheilas’ Wheels Teamspirit 
devised creative campaigns for 
the female-friendly car insurer,
generating substantial coverage
across news and lifestyle media
Weight Watchers from Heinz
VCCP relaunched their new range
of frozen ready meals and desserts
Dyson VCCP help Dyson maintain
their premium brand standing in the
UK and Europe with above-the-line
and digital communications
Our skills
Our people are leaders in their field,
working together to reach every audience,
in any circumstance, through any medium.
Strategic consulting and planning
Advertising
Brand strategy
In-store design, merchandising
Sponsorship exploitation
Promotional marketing
Online advertising
Online planning and execution
Below-the-line advertising
Design
Direct marketing
Media buying
Financial marketing and public relations
Property marketing and public relations
IFAP Creation of a new brand identity and
consumer campaign in support of their 
core proposition, aimed at reinforcing the 
value of truly independent financial advice Research Division
Research Division:
Facts International
Opinion Leader Group:
Opinion Leader
Ledbury Research
The Opinion Leader Group enjoyed another
year of strong growth in 2006, with operating
income up 31% to £4.7 million and operating
profit rising 48% to £1 million. The Group’s
profit margin increased from 19.1% to 21.7%.
The year saw a further strengthening of Opinion
Leader’s distinctive and increasingly valued
position within the research market. The company
continued to develop and promote new methods
for reputation evaluation and management. High
profile projects demonstrated the importance of
the agency’s unique deliberative research and
consultation practice establishing that these
approaches can be highly effective in the
commercial sector as well as the public and
voluntary sectors.
Opinion Leader’s work for the Department for
Work and Pensions brought together 1,100
citizens in six locations for a co-ordinated
National Pensions Day debate. The day
combined presentations, videos and
competitions designed to add to participants’
understanding of the pensions issue, and
identified the moments, and the insights that led
to changes in their understanding and opinions.
This deliberative approach enabled a more
meaningful level of consultation, and deeper
understanding of the complex issues and
produced analysis that was fed into the
Government’s White Paper on Pension Reform.
The role that such consultations play is set to
grow quickly with increasing focus on the need
to engage people in genuine dialogue. The
acclaim earned by the National Pensions Day,
as well as ongoing work with the Department 
of Health on the future of out-of-hospital care,
has established Opinion Leader as an authority
in the field. At the same time, deliberative
consultation developed for Sainsbury’s, bringing
together customers, staff, parents and other key
stakeholders to discuss new ideas for health,
has served to demonstrate the huge potential
that these techniques offer in the private sector.
The Opinion Leader Forum, a think tank
specialising in culture and behaviour change,
was launched during the year and has already
taken on work for the Green Alliance (on
changing views and behaviour towards the
environment) and the National Consumer
Council (on encouraging people to give up
smoking) as well as projects dealing with
changing views of Britishness.
The Opinion Leader Group helps clients to understand and
engage more effectively with key stakeholders through
research, deliberation and dialogue. It does so through tailored
approaches that enable clients to listen, engage and respond.
14 Chime Communications plc Annual Report 2006
Business review
Ofcom Researching the views of
informed parents and children on how to
regulate HFSS food advertising to kids
Sainsbury’s Creating direct dialogue between
the board of Sainsbury’s, the Government,
concerned parents and key stakeholders
about addressing the issues of healthy living 15
The Group added a number of high-profile
organisations to its client list in 2007. Besides
the Department for Work and Pensions, 
Opinion Leader won major new accounts from 
Ofcom, Liverpool Victoria Friendly Society and
Age Concern. Ledbury Research landed new
projects from Molton Brown, The Business
Channel and Barclays Wealth during its first
year with the Group.
The next 12 months will see Opinion Leader
develop a distinctive digital offer, including
deliberative consultation that embodies the
same core principles for informed and engaging
consultation. A relaunched reputation audit,
which explores the dynamics behind the
reputations of companies, brands, nations and
individuals, will also be rolled out during the
next year – and has already generated
significant new demand for this service.
During the year, the Group achieved a majority
stake in Ledbury Research, a clearly targeted
research consultancy specialising in high net
worth individuals. Ledbury Research provides
real understanding and insights from a target
demographic that is of significant interest to
clients across the Chime Group; Opinion
Leader, in turn, provides Ledbury Research 
with the opportunity for rapid growth.
The management team will continue to seek 
out opportunities to grow the Opinion Leader
Group, through acquisition, in 2007. The
acquisition strategy focuses on clearly defined
specialists with a real point of view, and a real
point of difference in the market. The addition 
of Facts International to the Research Division, 
in February 2007, is another example of this
approach in action, and will be covered in detail
in next year’s Annual Report.
The year saw a further
strengthening of Opinion
Leader’s distinctive and
increasingly valued position
within the research market.
Our skills 
Our people are leaders in their field,
working together to reach every audience,
in any circumstance, through any medium.
Qualitative
Quantitative
Deliberative
Collaborative
Opinion leaders
Social influencers
High net worth individuals
Hard to reach audiences
Employee engagement
Stakeholder dialogue
Norwich Union
Developing a benchmark
reputation audit with
Norwich Union’s key
national and local
stakeholders
Department for Work and Pensions Devising and managing 
National Pensions Day, bringing together 1,100 citizens to debate the
recommendations of the Pension Commission on pension reform
Molton Brown In-depth quantitative and
qualitative research amongst affluent consumers 
in Europe, North America and Asia 16 Chime Communications plc Annual Report 2006
Finance Director’s review
The Group has continued to grow pre-tax 
profits and to generate cash. The Group was 
net cash positive at the end of 2006, the first
time since 2000.
Key Performance Indicators (KPIs)
The Group manages its internal operational
performance using a number of KPIs. The most
important of these are as follows:
2006 2005
Operating margin 15.6% 13.2%
Personnel costs/
Operating income 64% 66%
Operating income 
per client £68,000 £60,000
Operating income 
per employee £104,000 £98,000
Clients shared by more 
than one business in 
the Group 215 183
In addition the Group believes that all its
businesses should either be making a trading
profit of at least £500,000 per annum or be
capable of doing so within three years.
Cash flow and banking arrangements
The Group has generated £9.0 million of cash
from trading activities in 2006. Net cash at 
31 December 2006 was £2.9 million compared
to net debt at 31 December 2005 of £3.0 million.
The Group continues to operate comfortably
within its banking covenants. As a result of the
proposed acquisition of Fast Track Sales Limited,
the Group has increased its borrowing facility to
£25 million. This is a three year facility, maturing
in February 2010.
Following the Fast Track acquisition, the
maximum deferred considerations remaining 
to be paid will be £47 million of which 
£28 million relates to the Fast Track acquisition.
This can be paid all or partly in shares at Chime’s
discretion. Of the remaining £19.0 million, 
£9.7 million is in cash and £9.3 million is in
shares. The maximum payable in 2007 is 
£2.25 million, 2008 is £12.9 million and 2009 
is £1.6 million.
The Group operates a very strong cash
management system and believes that
businesses in the area in which it operates are
much stronger financially if they do not have any
long-term debt. Whilst the Group will have
some debt as a consequence of the acquisition
of Fast Track it is believed that this debt can be
eliminated within two years.
The Group continues to maintain tight financial 
and internal controls whilst enabling the right
environment for controlled investment in acquisitions
and organic growth.
Mark Smith
Group Finance Director 17
Taxation
The effective tax charge for 2006 was 28.5%
compared to 22% last year when there was a
one-off adjustment as a result of agreeing some
prior year tax charges. We expect the effective
rate for 2007 to be similar to 2006.
Dividends
The Board is proposing to pay a final dividend 
of 0.40p per share (2005 – 0.32p), giving a total
dividend per share of 0.58p compared to 0.48p
in 2005. This is an increase of 21%. The final
dividend will be payable on 22 June 2007 to
shareholders on the register at 1 June 2007.
The expected ex-dividend date is 30 May 2007.
The Board, subject to the trading conditions at
the time, expects to continue to pay dividends
in the future in line with the Group’s policy of 
five times cover with two thirds of the value
being paid as a final dividend and one third as
an interim dividend.
International Financial Reporting 
Standards (IFRS)
The Group has as required, fully adopted IFRS
from 1 January 2005. This has resulted in the
following adjustments when compared to UK
GAAP effective at 1 January 2005 which were
the previous accounting rules:
£000s 2006 2005
1. Notional finance costs 
on future deferred 
consideration payments 612 222
2. Cost of share based 
payments 371 235
3. Amortisation of goodwill (42) (42)
941 415
The current forecast for these adjustments 
in 2007 is approximately £2 million.
Cash generated in the future will mainly be used
to cancel the Group’s debt and to pay deferred
considerations. Some cash may be used to
fund smaller acquisitions.
The Group also retains the ability to buy in its
own shares if the Board is of the view that this
is beneficial to shareholders. Whilst this is
unlikely in the next two years the Board will
keep it under review.
Capital expenditure and investment
Total capital expenditure for 2006 was £1.7 million
(2005 – £0.9 million).
The main categories of investment are leasehold
improvements (£0.6 million), fixtures and fittings
(£0.5 million) and computer equipment and
software (£0.6 million). 
In 2006 the Group has invested £400,000 in
starting digital businesses which it believes 
have strong growth potential for the future.
These costs have been fully accounted for in
the income statement for 2006. This investment
will continue in the first half of 2007 with these
businesses expected to make a contribution by
the end of 2007.
Procurement
The Group operates a central procurement
function which uses the power of the Group to
ensure that all businesses buy materials and
services as cost effectively as possible.
Pensions
All the Group’s employees are entitled to
contribute to the Group’s pension scheme or to
personal pension schemes. These are defined
contribution schemes.
Outlook
The Group currently has no debt and will only
have a relatively low level of debt after funding
the acquisition of Fast Track. The Group is
therefore well placed operationally and financially
to continue to grow both organically and
through selected acquisitions.
Mark Smith
Group Finance Director
12 March 2007
(Net debt) / net cash
2003
(Actual)
(29.3)
(6.3)
(3.0)
2.9
2004
(Actual)
2005
(Actual)
2006
(Actual)
£m 18 Chime Communications plc Annual Report 2006   
Lord Bell
Chairman
Piers Pottinger
Deputy Chairman 
Christopher Satterthwaite 
Group Chief Executive
Mark Smith
Group Finance Director
Julian Seymour
Senior Non-executive *‡#
Dave Allen
Non-executive
Catherine Biner Bradley 
Non-executive *‡#
Paul Richardson
Non-executive *
Lord Hannay 
(resigned 31 December 2006)
Non-executive *‡#
Dame Susan Tinson 
(resigned 31 December 2006)
Non-executive ‡#
* Member of the Audit Committee
‡ Member of the Remuneration Committee
# Member of the Nominations Committee
COMPANY SECRETARY
Robert Davison
Lord Bell, aged 65
Chairman
Lord Bell is one of the best known figures in 
the United Kingdom communications industry.
He helped found Saatchi & Saatchi in 1970,
and as International Chairman he took Saatchi
& Saatchi into its position as the first British
number one worldwide advertising agency 
in 1981. He successfully ran the publicity
campaigns for the Conservative Party for the
general elections in 1979, 1983 and 1987. 
He was appointed Deputy Chairman of Lowe
Howard-Spink & Bell plc in 1985 and remained
in that position until the formation of Chime
Communications in 1989. He advises the
chairmen of many of Britain’s leading
companies and organisations, as well as 
foreign heads of state and international
business leaders and politicians. He was
awarded a knighthood in 1990 by Lady
Thatcher in her resignation honours and a
peerage by Tony Blair.
Piers Pottinger, aged 53
Deputy Chairman 
Following three years at J Henry Schroder
Wagg & Co Limited, Piers Pottinger spent three
years as an analyst with stockbrokers Laurence
Prust. In 1978, he joined Charles Barker. He
spent two years as Director of Media Relations
at Manufacturers Hanover Trust in New York
before returning to London as Managing
Director of Sterling Financial Public Relations in
1982. He joined Good Relations City (now Bell
Pottinger Corporate & Financial) as Managing
Director in 1985 and was also a director of
Good Relations Group plc. He is currently
Chairman of Sportech plc, a Vice President of
the National Society for Epilepsy and a Trustee
of the Foundation for Liver Research.
Christopher Satterthwaite, aged 50
Group Chief Executive
Christopher Satterthwaite began his commercial
career as a graduate trainee at HJ Heinz. 
Since his grounding on the client side, he has
worked for three different kinds of marketing
communication agencies, for all of which he
became Chief Executive: IMP 1981-1993, 
then the UK’s largest sales promotion and 
direct marketing agency; HHCL & Partners
1993-2000, ‘Campaign’s 1990s Advertising
Agency of the Decade’; Bell Pottinger 2000-
2001, the UK’s leading Public Relations agency.
Christopher was appointed Chief Executive of
Chime Communications plc in 2002.
Mark Smith, aged 51
Group Finance Director
Mark Smith has been a Chartered Accountant
since 1978 having qualified with Touche Ross &
Co (now Deloitte & Touche LLP). Following two
years as European Finance Director at RCA
Records, he joined Good Relations Group plc 
in 1984 and became its Group Finance Director
in 1985. In 1986, he became Finance Director
of Lowe Bell Communications (now Bell
Pottinger Group) and Finance Director of 
Chime Communications at the time of the
management buy-out in 1989. Mark is a 
Non-executive Director of Holiday Extras
Holdings Limited.
Directors Board of directors 19
Julian Seymour, aged 62
Senior Non-Executive Director
Julian Seymour has been involved throughout
his career in the financial management of
businesses in the communications industry,
most recently as Director of Corporate Finance 
at Lowe Group plc. From 1991 to 2000, he was
the director of Lady Thatcher’s private office. He
has been a director of Chime Communications
since the management buy-out in 1989.
Dave Allen, aged 50
Dave Allen is CEO of Team Vodafone. 
He oversees and integrates the activities of 
the 30 WPP operating companies who work 
for Vodafone around the world. He took on 
this role full-time in January 2006. Prior to that
he was CEO of Enterprise IG, a leading brand
and identity consultancy owned by WPP . 
He joined WPP in 1986 through the acquisition
of Sampson Tyrrell. He started his career at
Kodak where he worked in various positions 
in sales and marketing.
Catherine Biner Bradley, aged 53
Catherine Biner Bradley is a Swiss lawyer with
offices in Geneva and Vaud who specialises 
in business law and in Swiss and international
tax planning. She founded Bourquin & Biner
Bradley where she remains a partner today. 
She serves on the board of directors of a
number of Swiss and international companies.
She has been a Director of COLT Telecom plc
for five years commencing with its initial listing
on the London Stock Exchange in 1996 
serving during that period on its Audit and
Compensation Committees.
Paul Richardson, aged 49
Paul Richardson became Group Finance
Director of WPP Group plc in December 1996
after four years with the Company as Director 
of Treasury. He is responsible for the Group’s
worldwide finance function, including external
reporting, taxation, procurement, property,
treasury and internal audit. Previously he spent
six years with the central team of Hanson plc
financing major acquisitions and disposals. 
He is a Chartered Accountant and member 
of the Association of Corporate Treasurers. 
He is also a non-executive director of S.T.W 
in Australia.
Robert Davison, aged 49
Company Secretary
Robert Davison joined the Group in 1987 as
Group Services Manager, became Assistant
Company Secretary in 1994 and Director of
Administration in 1998. Prior to joining the
Group he worked in the music industry for ten
years initially for PolyGram, including working 
on the launch of the compact disc format in
Europe, and later with RCA Records. In his
current role he is additionally responsible for 
the Group’s centralised functions such as IT,
property, HR and risk management. Robert is 
a Fellow of the Institute of Chartered Secretaries
and Administrators.  20 Chime Communications plc Annual Report 2006   
Executive management team
Piers Pottinger, aged 53
(For biographical details see page 18)
Christopher Satterthwaite, aged 50
(For biographical details see page 18)
Mark Smith, aged 51
(For biographical details see page 18)
Graham Barr, aged 63
Graham Barr leads Bell Pottinger Sans
Frontieres, Chime’s growing international
consultancy. He was formerly Vice President,
International Regions, with global responsibilities
for the BP Group based in London, and prior 
to that Executive Director, BP Southern Africa.
He was co-chairman and a director of the
Consultative Business Movement in South
Africa, which played a vital role in moving 
the country to democracy. 
Alongside broad business experience, his
specialities include reputation and political risk
strategy and management, public affairs,
negotiations, crisis and relationship
management, corporate social and ethical
policy and change management. A former
political and financial journalist and Deputy
Editor of a leading South African daily
newspaper. Educated at the University of 
Cape Town and Harvard Business School.
Adrian Coleman, aged 43
Adrian Coleman is one of the founding partners
of VCCP, which was launched in January 
2002. Since joining Chime, Adrian now heads
up the advertising marketing services division,
which comprises VCCP , VCCP Digital, VCCP
Search, VCCP Blue, Pure Media, BMT, SFW.
Prior to this he was Chief Executive of the AMD
Group (Chime owned) where he oversaw the
media group, responsible for publishing, design,
online as well as advertising. Before joining
AMD, Adrian was a partner at HHCL & Partners,
a director of IMP, and started his career working
for Exxon on the client side. Overall, he has 
a broad understanding of the marketing mix
through his previous experience.
Viki Cooke, aged 52
Following a successful career in advertising,
communications and planning, Viki co-founded
and is joint CEO of Opinion Leader. Viki has
played a leading role in developing new thinking
about the drivers of corporate reputation, the
use of deliberative methods to help shape
policy, and ways of identifying, understanding
and engaging with hard-to-reach audiences
ranging from those at risk of social exclusion to
chief executives. Viki is also a Trustee of Global
Action Plan and Changing Faces.
Sue Farr, aged 51
Sue Farr has been a member of the
Management Team of Chime since 2003 and is
currently leading Chime’s strategic and business
development programme. Prior to Chime she
was European Managing Director of Golin/Harris,
an IPG owned public relations group where she
ran several businesses across Europe. Most of
Sue’s client-side career has been spent in
broadcasting. Firstly as Director of Corporate
Communications for Thames Television plc
(1990-1993), which saw her launch UK Gold,
and subsequently as Director of Marketing for
the BBC (1993-2000), where she was
responsible for marketing strategy, planning and
implementation across all the BBC’s public
service brands.
A director of The Marketing Society since 
1984, she was the first woman Chair in 
1991-1992. She was a non-executive director
of New Look plc from 1994 until 1996. She was
Chairman of The Marketing Group of Great
Britain in 1999-2001. She was voted the
Advertising Woman of the Year in 1997, a
WACL Woman of Achievement in 1998 and
awarded The Marketing Society ‘Grand Prix’ 
in 1998. Deborah Mattinson, aged 50
Deborah Mattinson, co-founder and joint CEO
of Opinion Leader, is one of Britain’s leading
practitioners of issue-based research and
consultation. She has unparalleled expertise 
in accessing and understanding public opinion,
in stakeholder dialogue, and in citizen
engagement. She writes and broadcasts widely
on public opinion. She is a Commissioner of the
Equal Opportunities Commission, and a Trustee
of the Green Alliance.
Kevin Murray, aged 52
Kevin Murray is Chairman of the Bell Pottinger
Group, the Public Relations Division of Chime
Communications. 
Kevin specialises in the field of strategic
communications and reputation management
and has years of experience advising chairmen
and chief executives, as well as managing
complex and global communications projects
and departments.
Previously he was the Director of
Communications for British Airways and, before
that, Director of Corporate Affairs for AEA
Technology, the international science and
engineering business that was floated off from
the United Kingdom Atomic Energy Authority.
Prior to AEA, Kevin was Group Public Relations
Manager for Bayer companies in the UK. 
He is also a former national newspaper journalist,
magazine publisher and marketing director. 
Ian Priest, aged 43
Ian Priest, Founding Partner at VCCP, started
below-the-line and migrated to advertising, with
excellent integrated credentials. His approach 
to work is team based, to encourage respect,
fun, ambition and speed. He loves working with
like-minded clients and has proven time and
time again that he delivers outstanding work
that gets it right. From Account Executive at
IMP in 1986 to Managing Director of HHCL &
Partners in 1999, Ian’s career has been carved
out of brilliant campaigns and hard-nosed
business reality.
Nick Taylor, aged 54
Nick Taylor began his commercial career as a
graduate trainee in the Aerospace and Medical
divisions of Smiths Industries plc. In 1979 he
founded Harvard Public Relations which went
on to become one of Europe’s leading TMT
consultancies, with offices in London, Paris 
and Munich. Following Harvard’s acquisition 
by Chime in 2000, Nick joined the Executive
Management Board with responsibility for
Chime’s overseas offices; he is also a member
of the Corporate Development Team handling
M&A activity. Nick is a non-executive director 
of Merityre Specialists and a member of the
Chartered Institute of Marketing. 
21 22 Chime Communications plc Annual Report 2007   
Directors’ statement on corporate governance
Corporate Governance Report
The Board of Directors is collectively
accountable to the Company’s shareholders for
good corporate governance and is committed
to achieve compliance with the Principles of
Corporate Governance as set out in the 2003
FRC Code which forms part of the Listing Rules
of the Financial Services Authority (‘The Code’).
A narrative statement on how the Company 
has applied the Principles throughout the year
ended 31 December 2006 and a Statement of
Compliance appears below.
The Board’s responsibilities and processes
Directors
The Company is controlled through the Board
of Directors which, during 2006 comprised four
executive and six non-executive directors during
most of the year. In December 2006 two Directors,
Lord Hannay and Dame Sue Tinson, retired from
the Board. The biographies of the current directors
are shown on pages 18 and 19 of this report.
The Board meets quarterly and is responsible
for overall Group strategy, acquisitions and the
consideration of significant financial matters. 
It reviews the strategic direction of trading
companies, their annual budgets and their
progress towards achievement of those
budgets. The Board is responsible for ensuring
the integrity of financial information and that 
the financial controls and the systems of risk
management both financial and non-financial
are robust and appropriate.
The Chairman, Lord Bell, is responsible for the
running of the Board and he ensures that all
directors receive sufficient, accurate and timely
information on financial, business and corporate
issues prior to meetings. He also ensures that
the non-executive directors have access to any
further supplementary information they may
require should they request it. 
The Chief Executive’s (Christopher Satterthwaite)
responsibilities focus on co-ordinating the
Company’s business and implementing 
Group strategy.
Julian Seymour is the Senior Non-Executive
Director.
The Non-Executive Directors’ terms and
conditions of the appointment are available for
inspection at the Company’s registered office 
on request and will be available, together with
the Executive Directors’ service contracts at the
forthcoming Annual General Meeting.
All Directors are able to take independent
professional advice, at the Company’s expense,
in furtherance of their duties, if necessary. 
The Company also makes appropriate training
available to all existing directors as well as
ensuring that new directors receive training. 
All directors, in accordance with the Code, 
will submit themselves for re-election at least
once every three years. 
Executive directors may be permitted to take a
limited number of external non-executive
directorships in non-competing companies,
subject to the approval of the Board. 
The Board met on four occasions during 
2006. Mark Smith and Dame Sue Tinson 
were absent from one meeting. Dave Allen and
Paul Richardson were each absent from two
meetings. The other Directors attended all
meetings. When absent from meetings the
views of the director concerned are sought in
advance then put to the meeting in order to
facilitate a comprehensive discussion. Each
director continues to make themselves available
to their fellow directors and ensures he/she
contributes to the major decisions before 
the Board. 
Non-executive directors
The individual directors have different skills,
experience and qualifications with certain of
them presently or previously working in other
sectors in the economy and they are able to
bring independent judgement to bear on
matters for consideration by the Board. 
The resignation of Lord Hannay and Dame 
Sue Tinson in December 2006 was by mutual
consent and the Company expects to make
further non-executive appointments during 2007.
The Board considers its current non-executive
directors to be of sufficient calibre and number
that their views may be of sufficient weight that
no individual or small group can dominate the
Board’s decision making process.
Independence of Non-executive Directors
The Code states that it is for the Board to
determine whether a director is independent in
character and judgement and consider whether
there are any relationships or circumstances
that are likely to affect a director’s judgement.
In applying the Code, the Board has considered
whether the length of service of Julian Seymour
(13 years) and Paul Richardson (9 years) has
compromised their independence. They are
both experienced and accomplished in their
fields of expertise. In their association with the
Company they have acquired an understanding
of the Company’s operations, its markets and
issues determining its success. They have
shown commitment to the Company in both
time and effort. The Board does not consider
their long service as Directors to be detrimental
or to have eroded their objectivity and should
not raise any concerns about their ability to
perform their duties. 
The question of Non-executive Directors’
shareholdings should also be considered when
assessing independence. Catherine Biner
Bradley holds a small number of shares in the
Company as disclosed on page 29. The Board
considers that this holding is not significant and
believes this alone should not raise questions
regarding her independence.
Paul Richardson and Dave Allen are WPP 
plc’s representatives on the Board under 
the subscription agreement of 1997. The
performance evaluation of these two directors
has shown that they both have a good record
of involvement in board level discussions and
their efforts to contribute to and to further the
Company’s strategies have been significant.
The Board considers these directors to be
independent.
Following performance evaluations for 2006,
that took place early in 2007, the Board has
considered the independence of its non-
executive directors and considers Julian
Seymour, Catherine Biner Bradley, Paul
Richardson and Dave Allen to be independent
in both judgement and character and that the
circumstances shown above are unlikely to
affect their respective judgements when
considering matters of the Company.
Board committees
In addition to each of the trading companies
being managed by separate boards of directors
the Board has three standing Committees. 
Catherine Biner Bradley was appointed as a
member of the Remuneration and Nominations
Committees in December 2006 following the
retirement of Lord Hannay and Dame Sue
Tinson. Paul Richardson was also appointed as
a member of both Committees in March 2007. 
Each Committee operates within written terms
of reference and these are available on request
from the Company Secretary and will also be
available for inspection at the forthcoming
Annual General Meeting.  23
Audit Committee
The Committee met on three occasions during
the year to discuss accounting, audit and
internal control matters together with reviewing
financial statements and compliance with
accounting standards and the Company’s
accounting policies. The Audit Committee is
also responsible for ensuring that a professional
and objective relationship exists with the
Company’s external auditors. The external
auditors are represented at each meeting and
may request a meeting of the Committee
without management being present if
necessary. The Audit Committee also reviews
the work of the Company’s Risk Management
Group as part of the Company’s risk
identification and management system. 
The Chairman of the Audit Committee is 
Julian Seymour and membership is restricted 
to those non-executive directors deemed to 
be independent by the Board and is shown 
on page 18.
Each meeting was attended by the full
membership except Paul Richardson and
Catherine Biner Bradley who were each absent
for one meeting.
Remuneration Committee
Under the Chairmanship of Julian Seymour 
the Committee measures the performance 
of the Executive Directors and of key members
of senior management as a prelude to
recommending their annual remuneration. 
The Committee is also responsible for
overseeing grants under the Company’s
Executive and Savings-Related Share Option
Schemes to both the Directors and to
employees of the Group. The Chairman, Lord
Bell, attends the meetings when required and
serves as technical advisor, but is not actually a
member. The remuneration of the Non-executive
Directors is recommended by the Chairman and
Finance Director and takes account of the time
spent on Board and Committee matters. Final
decisions are made by the Board but no
director takes part in any discussion regarding
his or her own remuneration. During 2006 the
Committee reviewed the Company’s incentive
schemes including those intended for the
participation of the Executive Directors. The
resulting Co-Investment Plan was approved 
by shareholders at the Extraordinary General
Meeting held in September 2006. The Report 
of the Board on Director’s Remuneration is set
out on pages 26 to 29 and includes details of
Directors’ incentive payments and the related
performance criteria.
In 2006 the Committee met on three occasions
during the year and all members attended
except for Dame Sue Tinson who attended 
one. Paul Richardson, whilst not a standing
Committee member, attended one meeting as 
a technical advisor.
Nominations Committee
The Nominations Committee is chaired 
by Julian Seymour and membership of the
Committee is restricted to independent 
non-executive directors as shown on page 18. 
The Committee leads the process of
appointments to the Board by evaluation of the
skills, knowledge and experience required for 
a particular appointment. The Committee did 
not meet during the year as there were no 
new appointments to the Board.
The Code requires the Company to have a
formalised process for the selection and
appointment of new directors. In the last annual
report the Board undertook to review best
practice in this important area. In May 2006 the
Board assessed that a prescriptive procedure 
is inappropriate and could prove restrictive and
costly both in terms of identifying potential
candidates and in the selection process itself. 
The Company does not believe that it should
commit to the exclusive use of external
recruitment consultants although there may be
occasions where this method is employed.
Performance evaluation
In line with the Code the Company carries 
out formal performance evaluations of the
Board, its committees and individual directors.
The 2006 performance evaluation took place 
in February 2007. The aim of the evaluation is 
to recognise the strengths and address any
weaknesses of the management process; 
to ensure that the Board meets its objectives
and that effectiveness is maximised.
The Non-Executive Directors, led by Julian
Seymour, the senior independent director,
evaluates the performance of the Executive
Directors. The Board, led by the Chairman, 
is responsible for the assessment of the
performance of the Non-Executive Directors. 
The work of the Committees is assessed by 
the Board, taking into account the specific
workloads of each committee; the knowledge
and expertise of its members; and the
recommendations made to the Board regarding
specific tasks put before them.
Relations with shareholders
The Company is keen to promote two-way
communications with its institutional and 
private investors and responds quickly to
queries received. Lord Bell, Chairman; Christopher
Satterthwaite, Chief Executive; and Mark Smith,
Group Finance Director, are the Company’s
principal spokespersons with investors,
analysts, the press and other interested parties. 
All shareholders are sent copies of the
Company’s Annual and Interim Reports 
and, where appropriate circulars and
prospectuses. The Annual and Interim reports
are also published on the Group website,
www.chime.plc.uk, together with
announcements, press releases and company
information, which enables investors worldwide
to keep informed on the Company’s progress.
Shareholders are given at least 20 days’ notice
of the Annual General Meeting at which all
Directors are generally present and at which
questions are both invited and encouraged.
Accountability and audit
Financial reporting
A review of the businesses in the Group is
included in the Chief Executive’s Review. The
Board uses this, together with the Chairman’s
Statement and the Directors’ report on page 30
to present a balanced and understandable
assessment of the Company’s position and
prospects. The Directors’ responsibilities for the
financial statements are described on page 31
of the Report and Financial Statements.
Internal control
The directors are responsible for the Group’s
system of internal control, including financial,
operational and compliance controls and risk
management, and for reviewing its
effectiveness. During the course of its review 
of the system of internal control, the Board has
not identified nor been advised of any failings 
or weaknesses which it has determined to be
significant. Therefore a confirmation in respect
of necessary actions has not been considered
appropriate. Due to the limitations that are
inherent in any system of internal control it is
designed to manage rather than eliminate risk
and can provide only reasonable and not
absolute assurance against material
misstatement or loss. 24 Chime Communications plc Annual Report 2006   
Directors’ statement on corporate governance (continued)
The Board has established a process for
identifying, evaluating and managing significant 
risks faced by the Group. The Board regularly
reviews the process, which has been in place
from the start of the year to the date of
approval of this report and which is in
accordance with revised guidance on internal
control published in October 2005 (the Turnbull
Guidance). The Board is responsible for the
Group’s system of internal control and for
reviewing its effectiveness. Such a system is
designed to manage rather than eliminate the
risk of failure to achieve business objectives,
and can only provide reasonable and not
absolute assurance against material
misstatement or loss.
Information on the Group’s significant risks,
together with the relevant control and
monitoring procedures, is reviewed on a
monthly basis by the heads of the business
units under the guidance of a nominated
Executive Director. This information is presented
to the Executive Directors to assess any
identified risks and the overall effectiveness 
of the system of internal control. An update 
on all significant risk management issues is
made to the Board at each quarterly meeting.
Additionally, companies annually complete a
review of specified risk areas and their local risk
management processes under the supervision
of the trading division Finance Directors, the
Group Internal Auditor and the Company
Secretary. The Company also has a sub-
committee of the Audit Committee, the Risk
Management Group, that specifically monitors
and investigates potential areas of risk raised 
by the trading companies and by Group
administrative management such as Property,
Human Resources and IT.
Given the nature of the Group’s activities the
Board recognises the risks associated with its
ability to attract, motivate and retain talented
employees. Accordingly a significant part of 
the Group’s risk management procedures 
are focused in this area and have led to 
the introduction of the detailed employee
benefits schemes.
In recent years the Group has acquired a
number of companies including overseas
businesses in Germany, the Middle East and
the United States of America. The Board
recognises the need to ensure that established
risk management procedures are integrated 
into all acquired businesses and accordingly
potential areas of non-compliance are 
identified during the due diligence process 
and addressed post completion. Control of 
the overseas businesses is currently effected 
by designated senior executives reporting
directly to the Board.
The internal audit function reports directly to the
Audit Committee. A review of this function has
been conducted and reported to the Board
within the annual review of the system of internal
controls. Recommended changes to the scope
and application of internal audit procedures
have been adopted and the internal audit
programme for the year has been presented 
to and approved by the Audit Committee.
The Group has a clear written whistleblowing
statement and procedure available to all staff
regarding concerns of employees about ethical
behaviour and non-compliance with regulatory
requirements and/or the law.
The Group has material investments in a small
number of associated companies that are not
managed by the Group. Accordingly the Group
can only influence, not control, their
management practices and therefore the review
of internal controls for these operations is less
comprehensive than that for the Group’s
managed operations.
Financial control 
The financial control procedures are described
under the following five headings:
1. Financial reporting – The Group has a
comprehensive system for reporting financial
results to the Board; each trading company
prepares monthly results with a comparison
against budget. The Board reviews these for the
Group as a whole and determines appropriate
action. Towards the end of each financial year
the operating units prepare detailed budgets 
for the following year. Budgets and plans are
reviewed and necessary changes made by 
the Board before being adopted formally.
2. Quality and integrity of personnel – One of
the Group’s core values is integrity; this is
regarded as vital to the maintenance of the
Group’s system of internal financial control and
is reflected in the quality and experience of the
Group’s financial staff. 
3. Operating unit financial controls – Key
controls over major business risks include
reviews against performance indicators and
exception reporting. The trading companies
regularly assess their exposure to major
business risks and appropriate action is taken
both at operating and Group level in order to
ensure that risk is minimised as far as possible.
4. Computer systems – The Group’s financial
and management information is processed by
and stored on computer systems. Accordingly,
the Group has established controls and
procedures over the security of data held on
computer systems. The Group has put in place
arrangements for computer processing to
continue and data to be retained in the event 
of complete failure of any system.
5. Controls over central functions – A number 
of the Group’s key functions, including treasury,
taxation, acquisitions and insurance are dealt
with centrally. Each of these functions has 
clear and detailed procedures and is required 
to report to the Board on a regular basis; 
the treasury details are reported daily to the
Finance Director.
The Audit Committee and Auditors
The Audit Committee has considered reports
made to it by the executive management of the
Group, which assesses the major business risks
and the control environment against the criteria
for assessing internal financial control which 
are set out in the guidance for directors on
reporting on internal control. The Audit
Committee has reported to the Board that it
has been able to review the effectiveness of the
Group’s system of internal financial control for
the accounting year and the period to the date
of approval of the financial statements.
The Company has a policy for the employment
of the auditors for non-audit work. The auditors
work on tax issues for the Company but any
increase in fees is strictly controlled by the Audit
Committee. Any other non-audit assignments
can be awarded to the auditors during the year
but only where fees are within Audit Committee
approved limits. 25
Going concern basis
As required by UK company law the Directors
have considered and confirm that it is
appropriate to adopt the financial statements on
the basis that the Company and Group have
adequate resources for the foreseeable future.
Therefore the Company and the Group continue
to adopt the going concern basis in preparing
the financial statements.
Social Responsibility Guidelines
We are in the business of managing brand 
and corporate reputation on behalf of clients
and the Board acknowledges that being socially
responsible is also an important factor in the
management of our business.
The Board confirms that regular consideration is
given to the significance of social, environmental
and ethical (SEE) issues (as defined by the
Association of British Insurers), and as part of
our wider operational risk framework, identifies
significant risks arising from these areas to
short-term and long-term value.
The Group also considers Corporate Social
Responsibility (CSR) to be an area of business
opportunity. Our subsidiary, The SMART
Company provides not only a focus for our
investment in this field but provides the group
with specialist expertise. 
The Board believes that Corporate Social
Responsibility should underpin everything that
we do. The Company is therefore committed to
demonstrating the importance of this not only in
our work for clients but in our own working
practices. 
In 2005 we published our first Corporate Social
Responsibility Report establishing not only our
principles of our approach to this area but also
setting a benchmark for future performance
improvements. A review of our performance is
currently taking place and an updated report will
be published in June 2007.
Environment
The business of Chime Communications is
primarily in the UK and delivers services to
clients based on image, ideas, research and
content. As such, our direct and indirect impact
on the environment is minimal and considered
low risk.
Nevertheless, there is growing interest from
customers and staff in the environmental
practices of all companies. In 2004 we
established a formal system for collecting data
regarding our procedures and their impact on
the environment, results of which were reported
in the Corporate Social Responsibility Report.
In March 2006 the Board made a commitment
to shareholders to be Carbon Neutral by the
end of the year. This was achieved, and a
programme of reducing our carbon impact on
the environment and offsetting any unavoidable
emissions is in place. The Board believes this is
not only good environmental policy but reflects
good citizenship in the communities in which
we operate. Further details are given on the
inside back cover of this document.
Health and safety
The Board believes that our people are our
most important asset. Our businesses do not
include any industrial or manufacturing
processes and all our staff are office based. 
As such, risk of accidents is low. We continue
to review, maintain and enhance our practices
in this area in line with perceived risks and new
legislative requirements and best practice.
Employee issues
As a people business, our reputation depends
on the skills, knowledge and integrity of our
people. Chime has fostered an entrepreneurial
culture and each of our businesses is
encouraged to create a stimulating, rewarding
and inspiring work environment for our people.
Our people continue to be our main priority.
We recognise that greater central oversight on
Human Resources issues may be beneficial and
continually review the employment standards
across the Group as part of the general
management and risk identification processes. 
We have continued to operate our Executive
and Savings-Related Share Option Schemes
and in order to attract and retain talented staff
continue to review our incentive schemes on 
an ongoing basis.
Ethics
The group meets all relevant laws, regulations,
codes of practice issued by any Government 
or appropriate regulator. We ensure that all our
people are aware and comply with such
standards. In addition, we recognise that
integrity is essential to the maintenance of our
reputation in the marketplace. As part of our
regular review process, issues of conduct are
identified, reviewed and the Board alerted as
appropriate.
In March 2007 we published ‘A Pocket Guide
to Chime’ detailing our vision and values. This is
available to all staff.
Compliance statement
Throughout the year ended 31 December 
2006 the Company has been in compliance
with the provisions set out in Section 1 of the
July 2003 FRC Combined Code on Corporate
Governance, except for Code A.4.6 –
Processes used by the Nominations Committee
– the reason for non-compliance is shown 
on page 23; and B.1.4. – Executive Directors’
remuneration for external non-executive
directorships, as this information is available 
in the financial statements of the companies
concerned.
Further to the resignations of Lord Hannay 
and Dame Susan Tinson the Group is in the
process of appointing new members of the
remuneration committee in accordance with
provision B2.1 of the Combined Code.
Approved by the Board of Directors
and signed on behalf of the Board 
Robert Davison, Secretary 
12 March 2007 26 Chime Communications plc Annual Report 2006   
Directors’ remuneration report
Group policy on the remuneration of
directors and employees
This report has been prepared in accordance
with Schedule 7A to the Companies Act 1985.
The report also meets the relevant requirements
of the Listing Rules of the Financial Services
Authority and describes how the Board has
applied the Principles of Good Governance
relating to directors’ remuneration. As required
by the Act, a resolution to approve this report
will be proposed at the Annual General Meeting
of the Company at which the financial
statements will be approved.
The Act requires the auditors to report to the
Company’s members on the ‘auditable part’ of
the Directors’ Remuneration Report and to state
whether in their opinion that part of the report
has been properly prepared in accordance with
the Companies Act 1985. The report has
therefore been divided into separate sections
for audited and unaudited information.
Unaudited information
Remuneration Committee
The composition, chairmanship and activities 
of the Remuneration Committee are set out 
on pages 18 and 23. The members of the
Committee receive remuneration as set out in
this report. They abstain from participating
where their own interests are concerned and
have no involvement in the day-to-day
management of the Group’s operations.
Remuneration policy
The Group is committed to attracting and
retaining high quality staff. Remuneration is set
at levels commensurate with competing firms in
the same industry and is monitored on a regular
basis. The performance measurement of the
executive directors and key senior management
and the determination of the annual remuneration
package are undertaken by the Committee.
Executive directors are entitled to accept external
appointments outside the Company providing
that the Chairman’s permission is sought.
The remuneration of the non-executive directors
is recommended by the Chairman and Finance
Director and takes account of the time spent on
Board and Committee matters.
Remuneration packages
There are five main elements of the
remuneration package for executive directors
and senior management:
• basic annual salary and benefits;
• annual bonus payments which cannot
exceed 30% of salary;
• share option incentives; 
• long-term incentive plans; and
• pension arrangements.
The benefits provided by the Group to the
executive directors’ consists principally of a car
or car allowance and private medical insurance.
A bonus of 15% of the relevant executive
director’s salary may be paid to each director 
if profit targets set by the Board are met. 
A further 15% may be paid to each executive
director if profit targets set by the Board are
exceeded by at least 30%.
On 8 September 2006 shareholder approval
was granted to introduce a Co-Investment Plan.
The scheme has been established to align 
the interests of the Company’s most senior
executives to the three year business plan that
was put in place during 2006. Participation in
the plan is dependent upon the commitment 
by the executive to maintain an investment in
the Company’s shares until the end of the
performance period over shares with an initial
value equal to 50% of salary capped at a total
of £175,000 per participant. In return for this
commitment the executive is granted an 
award over a maximum of five times as many
matching shares. The number of matching
shares that vest, if any, are dependent upon the
achievement of performance targets measured
over a four year performance period. Fifty 
per cent of the matching shares are tied to the
aggregate reported earning per shares and fifty
per cent are tied to total shareholder return
(TSR) relative to a peer group of other media
companies. The maximum award is for
achieving EPS growth equivalent to 26% per
annum compounded and a TSR ranking in the
top 15% of the comparator group. In addition
to the above requirements the Remuneration
Committee must be satisfied as to the underlying
financial performance of the Company. The
executives will receive no further awards under
any of the Company’s long-term incentive
schemes for the duration of this scheme.
During 2006 the Company introduced a
deferred share plan. Under this plan restricted
rights over existing Chime Communications
shares are granted to Executive Board
Directors, subsidiary Board directors and senior
employees of the Group. The employee must
remain employed by the Group for a period of
three years after the date of grant for the shares
to vest with the employee. There are no other
performance criteria attached to the restricted
shares. All grants under the scheme are
approved by the Remuneration Committee. 
The deferred share plan is intended to replace
the executive share option scheme. 
The Company has operated an Executive Share
Option Scheme for Executive Board Directors,
subsidiary Board directors and senior
employees. All executive options granted from
November 1997 (other than special executive
options) are subject to the Group achieving
during the period of grant, an average total
shareholder return on the shares for the
preceding three years which exceeds the
average FTSE 100 total shareholder return for
the same period and a percentage growth in
earnings per share which is at least equal to the
percentage growth in the Retail Price Index plus
6% over three years. Executive share options
granted before November 1997 have no
performance criteria. The exercise price of the
options granted under the above scheme is
equal to the market value of the Company’s
shares at the time when the options are granted.
Lord Bell has special executive options over
1,000,000 ordinary shares. These special
options will not ordinarily be exercisable less
than five years from the date of grant and are
subject to a performance target of growth in
diluted earnings per ordinary share being
achieved such as would place the Group in 
the upper quartile of the FTSE 100 companies
compiled by reference to growth in diluted
earnings per share over the same period.
Executive share options are only expected 
to be granted in future if there is a contractual
commitment or in exceptional circumstances.
The Company also operates a Savings-Related
Share Option Scheme which is open to all
employees after an initial qualifying period. 27
Pension contributions on behalf of the executive
directors are paid by the Company to the
Group’s money purchase pension scheme or to
a personal pension scheme up to the value of
20% of their basic salary.
Directors’ contracts
All executive directors and employees have
rolling contracts of employment with a notice
period that does not exceed 12 months. 
In December 2006 the Company agreed a 
new service contract with Lord Bell in order that
he may continue as a director beyond age 65. 
The terms of this are identical to the previous
contract. The Non-Executive Directors’ service
contracts will be available for inspection at the
Annual General Meeting. Any compensation
payable on early termination of employment
contracts is considered on a case-by-
case basis.
Performance graph 
The following graph shows the Company’s
performance measured by total shareholder
return, compared with the performance of the
FTSE All share media index, also measured by
total shareholder return:
0
Jan 02 Jan 03 Jan 04 Jan 05 Jan 06 Jan 07 
20
40
60
80
100
120
140
160
Chime Communications Total Shareholder Return Relative to FTSE 100 and FTSE All Share Media Sector
Chime Communications – Total Return (Ex Net) Rebased 100
FTSE All Share media return – Total Return (Ex Net) Rebased 100
FTSE 100 – Total Return (Ex Net) Rebased 100
Source: Perfect Analysis (www.perfectanalysis.perfectinfo.com)
Audited information
Directors’ emoluments
Emoluments Total Total
Salary excl. pension Pension 31 December 31 December
and fees Benefits Bonuses contributions contributions 2006 2005
Name £££££££
Executive directors
Lord Bell* 615,000 88,401 92,250 795,651 123,000 918,651 877,201
Piers Pottinger 401,000 28,371 60,150 489,521 80,200 569,721 573,813
Christopher Satterthwaite 350,000 19,926 52,500 422,426 70,000 492,426 492,179
Mark Smith 250,000 27,298 37,500 314,798 50,000 364,798 311,499
Non-executive directors
Julian Seymour 30,000 – – 30,000 – 30,000 30,000
Catherine Biner Bradley 17,500 – – 17,500 – 17,500 17,500
Paul Richardson –––––––
Dave Allen –––––––
Alan Chamberlain (resigned 9 March 2006) 26,243 – – 26,243 – 26,243 137,500
Lord Hannay (resigned 31 December 2006) 17,500 – – 17,500 – 17,500 17,500
Dame Susan Tinson (resigned 31 December 2006) 17,500 – – 17,500 – 17,500 17,500
Totals 1,724,743 163,996 242,400 2,131,139 323,200 2,454,339 2,474,692
*Chairman and highest paid director
Alan Chamberlain was paid a fee of £3,340 (2005 – £17,500) in respect of his work as a non-executive director. The balance of his remuneration
relates to work carried out by him for the Group on acquisitions and disposals.
The sums paid to Julian Seymour are in respect of consultancy fees.
The pension contributions made by the Company are in respect of money purchase schemes. Contributions in respect of Lord Bell, Piers Pottinger, 
Christopher Satterthwaite and Mark Smith for the year ended 31 December 2005 were £123,000, £80,200, £42,000 and £70,000 respectively. 
Piers Pottinger and Mark Smith are members of the Group’s defined contribution scheme.   28 Chime Communications plc Annual Report 2006   
Directors’ remuneration report (continued)
Directors’ share options, restricted shares and matching shares
The following unexercised options over shares were held by directors:
Executive Share Option Scheme
1 January 2006 31 December Date from
(or on 2006 (or on Exercise which
Directors appointment) Exercised Lapsed resignation) price exercisable Expiry date
Lord Bell* 1,000,000 – – 1,000,000 48p Nov 2002 Nov 2007
Lord Bell 100,000 – – 100,000 209p Nov 2003 Nov 2010
Lord Bell 500,000 193,548‡ – 306,452 15.5p Apr 2006 Apr 2013
Lord Bell 350,000 – – 350,000 39.5p Apr 2007 Apr 2014
Piers Pottinger 100,000 – – 100,000 209p Nov 2003 Nov 2010
Piers Pottinger 500,000 – – 500,000 32.5p Dec 2006 Dec 2013
Christopher Satterthwaite 33,333 – – 33,333 90p Oct 2002 Oct 2009
Christopher Satterthwaite 1,500,000 – – 1,500,000 15.5p Apr 2006 Apr 2013
Mark Smith 100,000 – – 100,000 209p Nov 2003 Nov 2010
Mark Smith 250,000 193,548# – 56,452 15.5p Apr 2006 Apr 2013
Mark Smith 250,000 – – 250,000 39.5p Apr 2007 Apr 2014
Alan Chamberlain (resigned 9 March 2006) 50,000 – 50,000 – 175p May 2003 May 2010
* Special executive options
‡ Market price at date of exercise 46.5p
# Market price at date of exercise 38.5p
Savings-Related Share Option Scheme
1 January 31 December Date from
2006 (or on 2006 (or on Exercise which
Directors appointment) resignation) price exercisable Expiry date
Christopher Satterthwaite 20,437 20,437 32p July 2009 Dec 2009
Mark Smith 20,437 20,437 32p July 2009 Dec 2009
The market price of the shares at 31 December 2006 was 55.50p and the range during 2006 was 28.25p to 57.00p.
There have been no variations to the terms and conditions or performance criteria for share options during the financial year.
Deferred Share Plan
The following restricted shares were held by directors:
1 January 31 December
2006 (or on 2006 (or on
Directors appointment) Awarded resignation) Award date Vesting date
Lord Bell – 214,500 214,500 25 May 2006 25 May 2009
Piers Pottinger – 139,800 139,800 25 May 2006 25 May 2009
Christopher Satterthwaite – 122,000 122,000 25 May 2006 25 May 2009
Mark Smith – 73,200 73,200 25 May 2006 25 May 2009
These shares are included as part of the beneficial holdings in the table on page 29. Co-investment Plan – matching shares
The following matching shares were held by directors:
1 January 31 December
2006 (or on 2006 (or on
Directors appointment) Awarded resignation) Award date Vesting date
Lord Bell – 2,092,180 2,092,180 18 September 2006 September 2010
Piers Pottinger – 2,302,630 2,302,630 18 September 2006 September 2010
Christopher Satterthwaite – 2,247,020 2,247,020 18 September 2006 September 2010
Mark Smith – 1,632,020 1,632,020 18 September 2006 September 2010
Directors interests in the shares of Chime Communications plc
The directors of the Company, all of whom were directors for the whole year, unless otherwise indicated, and their interests in the Company at 
31 December 2006, or on date of resignation, and at 1 January 2006 or date of appointment were:
Beneficial holdings Share options
1 January 31 December 1 January 31 December
2006 2006 2006 2006
(or date of (or date of (or date of (or date of
appointment) resignation) appointment) resignation)
Ordinary Ordinary Ordinary Ordinary
Shares of 5p Shares of 5p Shares of 5p Shares of 5p
each each each each
Lord Bell 1,487,866 1,895,914 1,950,000 1,756,452
Piers Pottinger 2,005,800 2,145,600 600,000 600,000
Christopher Satterthwaite 36,514 449,404 1,553,770 1,553,770
Mark Smith 274,170 540,918 620,437 429,837
Dave Allen ––––
Catherine Biner Bradley 18,514 39,514 – –
Paul Richardson ––––
Julian Seymour ––––
Alan Chamberlain (resigned 8 March 2006) 3,352 3,352 50,000 50,000
Lord Hannay (resigned 31 December 2006) 32,142 32,142 – –
Dame Susan Tinson (resigned 31 December 2006) 4,500 4,500 – –
Lord Bell also held a non-beneficial interest in 849,501 ordinary shares at 1 January 2006 and at 31 December 2006. Christopher Satterthwaite also
held a non-beneficial interest in 594 ordinary shares at 1 January 2006 and at 31 December 2006.
Approval
This report was approved 
by the Board of directors 
and signed on its behalf by 
Robert Davison, Secretary 
12 March 2007
29 30 Chime Communications plc Annual Report 2006   
Directors’ report
The directors present their annual report and
the audited financial statements for the year
ended 31 December 2006.
Business review
The principal business of the Group is providing
public relations, advertising, market research,
direct marketing, design and event
management consultancy. A review of the
performance and development of the Group’s
business during the year, its position at the year
end and its prospects is set out in the
Chairman’s statement and Finance Director’s
report on pages 16 and 17. The principal risks
and uncertainties facing the Group can be
found within note 45 of the accounts on page 65
and within the section headed internal control
within the report of the Board to the shareholders
on directors’ remuneration on page 26.
The Group uses the following key performance
indicators to measure progress towards
objectives:
2006 2005
Organic revenue growth 11% 7%
Organic profit growth 33% 16%
(Organic growth excludes 
acquisitions in 2005 
and 2006)
Operating profit margin 15.6% 13.2%
Earnings per share 3.08p 2.49p
Average fee income 
per client £68,000 £60,000
Average income 
per employee £104,000 £98,000
Staff costs/operating 
income 60.1% 63.7%
Net cash/(debt) £2,924,000 (£3,013,000)
Results and dividends
The Group’s income statement is set out on
page 33 and shows a profit before tax for the
year to 31 December 2006 of £11,063,000
(2005 – £7,325,000) after charging restructuring
costs of £nil (2005 – £1,286,000). The directors
recommend the payment of a final dividend of
0.40p per ordinary share to be paid on 22 June
2007 to the ordinary shareholders on the
register on 30 May 2007 which together with
the interim dividend paid on 9 November 2006
makes a total of 0.58p per share for the year
(2005 – 0.48p).
Directors and their interests
The directors’ interests in the shares of Chime
Communications plc are disclosed as part of
the Directors’ Remuneration Report on page 26.
Details relating to directors’ share options are
also given as part of the Report of the Board to
the Shareholders on Directors’ Remuneration. 
There has been no change in the interests of
the directors between 31 December 2006 and
9 March 2007.
At the forthcoming Annual General Meeting,
two directors are due to retire by rotation and
offer themselves for re-election; Mark Smith and
Catherine Biner Bradley and; 
Paul Richardson and Julian Seymour will also
retire and offer themselves for re-election at the
Annual General Meeting as they have been Non-
Executive Directors for more than nine years.
Other than described in the Report of the Board
to the Shareholders on Directors’ Remuneration
no director of the Company has, or had during
the year, any interests in the shares of other
group companies or in any transactions which
were unusual in their nature or were significant
to the Company’s business.
Donations
During the year the Group donated £23,115
(2005 – £49,693) for charitable purposes. 
There were no political donations made during
the current or preceding year.
Employee involvement
The Group operates a policy of informing all
employees on a regular basis of the Group’s
financial performance. In addition, the Group’s
Savings-Related Share Option Scheme,
Performance Related Pay and bonus schemes
encourages employees at all levels to contribute
to the achievement of the Group’s short and
long-term goals.
Employment of disabled persons
The Group gives full and fair consideration to all
applications for employment made by disabled
persons, having regard to their particular
aptitudes and abilities. Opportunities for
training, career development and promotion 
do not disadvantage these employees.
Acquisition of the Company’s own shares
At the end of the year, the directors had
authority, under the shareholders’ resolution on
7 June 2006, to purchase through the market
25,308,056 of the Company’s own ordinary
shares at prices not less than 5p per ordinary
share and not more than 5% above the average
of the middle market quotations as derived from
the London Stock Exchange Daily Official List.
This authority will last until the conclusion of the
next Annual General Meeting.
Substantial interests
At 9 March 2007 the following interests, other
than those of the directors set out above, in 3%
or more of the issued ordinary share capital had
been notified to the Company:
Number of % of
ordinary ordinary
shares share capital
WPP Group Plc 55,183,593 21.74
Aberforth Partners 21,820,732 8.59
JP Morgan Asset 
Management 15,673,844 6.17
BGI 15,229,860 6.00
Fidelity Investments 14,500,000 5.71
Henderson Global 
Investors 9,732,125 3.83
Creditor payment terms
The Group’s policy on suppliers is that they will
be paid in accordance with agreed terms and
conditions of trade on a regular basis.
The number of days outstanding between
receipt of invoices and date of payment,
calculated by reference to the amount owed to
trade creditors at the year-end as a proportion
of the amounts invoiced by suppliers during the
year, was 30 days in aggregate for the Group
(2005 – 47). The Company did not have any
trade creditors at 31 December 2006 or 2005.
Auditors
Each of the directors at the date of approval of
this report confirms that:
• so far as the director is aware, there is no
relevant audit information of which the
Company’s auditors are unaware; and
• the director has taken all the steps that 
he/she ought to have taken as a director to
make himself/herself aware of any relevant
audit information and to establishing that 
the Company’s auditors are aware of that
information.
This confirmation is given and should be
interpreted in accordance with the provisions of
s234ZA of the Companies Act 1985.
A resolution to re-appoint Deloitte & Touche LLP
will be proposed at the forthcoming Annual
General Meeting.
Approved by the Board of Directors
and signed on behalf of the Board
Robert Davison, Secretary 
12 March 2007 The directors are responsible for preparing 
the Report and the financial statements. 
The directors are required to prepare financial
statements for the group in accordance with
International Financial Reporting Standards
(IFRS), the Companies Act 1985 and Article 4
of the IAS Regulation. They have chosen to
continue to prepare the accounts of the
Company in accordance with United Kingdom
Generally Accepted Accounting Practice.
International Accounting Standard 1 requires
that financial statements present fairly for 
each financial year the Company’s financial
position, financial performance and cash
flows. This requires the faithful representation
of the effects of transactions, other events and
conditions in accordance with the definitions
and recognition criteria for assets, liabilities,
income and expenses set out in the
International Accounting Standards Board’s
‘Framework for the preparation and
Presentation of Financial Statements’. In
virtually all circumstances, a fair presentation
will be achieved by compliance with all
applicable International Financial Reporting
Standards. Directors are also required to:
• properly select and apply accounting policies;
• present information, including accounting
policies, in a manner that provides relevant,
reliable, comparable and understandable
information;
• provide additional disclosures when
compliance with the specific requirements 
in IFRS is insufficient to enable users to
understand the impact of particular
transactions, other events and conditions 
on the entity’s financial position and financial
performance; and
• state whether applicable accounting
standards have been followed.
In the case of UK GAAP Company accounts,
the directors are required to prepare financial
statements for each financial year which give
a true and fair view of the state of affairs of the
Company and of the profit or loss of the
Company for that period and to make
judgements and estimates that are reasonable
and prudent.
The directors are responsible for keeping
proper accounting records which disclose with
reasonable accuracy at any time the financial
position of the Company, for safeguarding the
assets, for taking reasonable steps for the
prevention and detection of fraud and other
irregularities and for the preparation of a
directors’ report and directors’ remuneration
report and Chairman’s statement which
comply with the requirements of the
Companies Act 1985. 
The directors are responsible for the
maintenance and integrity of the Company
website. Legislation in the United Kingdom
governing the preparation and dissemination
of financial statements may differ from
legislation in other jurisdictions.
Statement of directors’ responsibilities
31 32 Chime Communications plc Annual Report 2006   
Independent auditors’ report to the members of
Chime Communications plc
We have audited the Group financial statements
of Chime Communications plc for the year
ended 31 December 2006 which comprise the
Group Income Statement, the Group Balance
Sheet, the Group Cash Flow Statement, the
Group Statement of Recognised Income and
Expense and the related notes 1 to 45. These
group financial statements have been prepared
under the accounting policies set out therein.
We have also audited the information in the
directors’ remuneration report that is described
as having been audited.
We have reported separately on the parent
Company financial statements of Chime
Communications plc for the year ended 
31 December 2006.
This report is made solely to the Company’s
members, as a body, in accordance with
section 235 of the Companies Act 1985. 
Our audit work has been undertaken so that 
we might state to the Company’s members
those matters we are required to state to them
in an auditors’ report and for no other purpose.
To the fullest extent permitted by law, we do 
not accept or assume responsibility to anyone
other than the Company and the Company’s
members as a body, for our audit work, for this
report, or for the opinions we have formed.
Respective responsibilities of directors 
and auditors
The directors’ responsibilities for preparing the
Annual Report, the Directors’ Remuneration
Report and the Group financial statements in
accordance with applicable law and
International Financial Reporting Standards
(IFRSs) as adopted by the European Union are
set out in the Statement of Directors’
Responsibilities.
Our responsibility is to audit the Group financial
statements in accordance with relevant United
Kingdom legal and regulatory requirements and
International Standards on Auditing (UK and
Ireland). 
We report to you our opinion as to whether the
Group financial statements give a true and fair
view, whether the Group financial statements
have been properly prepared in accordance
with the Companies Act 1985 and Article 4 of
the IAS Regulation and whether the part of the
director’s remuneration report described as
having been audited have been properly
prepared in accordance with the Companies
Act 1985. We also report to you whether in our
opinion the information given in the Directors’
report is consistent with the Group financial
statements. 
In addition we report to you if we have not
received all the information and explanations we
require for our audit, or if information specified
by law regarding directors’ remuneration and
other transactions is not disclosed.
We review whether the Corporate Governance
Statement reflects the Company’s compliance
with the nine provisions of the 2003 Combined
Code specified for our review by the Listing
Rules of the Financial Services Authority, and
we report if it does not. We are not required 
to consider whether the Board’s statement on
internal control covers all risks and controls, 
or form an opinion on the effectiveness of the
Group’s corporate governance procedures 
or its risk and control procedures.
We read the other information contained in the
Annual Report and consider whether it is
consistent with the audited Group financial
statements. We consider the implications for
our report if we become aware of any apparent
misstatements or material inconsistencies with
the Group financial statements. Our
responsibilities do not extend to any further
information outside the Annual Report. 
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 Group financial statements
and the part of the Directors’ Remuneration
Report to be audited. It also includes an
assessment of the significant estimates and
judgements made by the directors in the
preparation of the Group 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 Group financial
statements and the part of the Directors’
Remuneration Report to be audited 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 Group
financial statements and the part of the
Directors’ Remuneration Report to be audited.
Opinion
In our opinion:
• the Group financial statements give a true 
and fair view, in accordance with IFRSs as
adopted by the European Union, of the state
of the Group’s affairs as at 31 December
2006 and of its profit for the year then ended;
• the Group financial statements have been
properly prepared in accordance with the
Companies Act 1985 and Article 4 of the 
IAS Regulation;
• the part of the Directors’ Remuneration
Report described as having been audited
have been properly prepared in accordance
with the Companies Act 1985; and
• the information given in the Directors’ Report
is consistent with the Group financial
statements.
Deloitte & Touche LLP
Chartered Accountants and Registered Auditors
London
12 March 2007 2006 2005
Note £’000 £’000
Continuing operations
Turnover 2,3 165,246 116,403
Cost of sales (86,430) (53,371)
Operating income 78,816 63,032
Operating expenses (66,552) (53,410)
12,264 9,622
Restructuring costs 5 – (1,286)
Operating profit 6 12,264 8,336
Share of results of associates (280) (111)
Investment income 8 93 152
Finance costs 9 (402) (830)
Finance cost of deferred consideration (612) (222)
Profit before tax 11,063 7,325
Tax 10 (3,156) (1,608)
Profit for the year from continuing operations 7,907 5,717
Discontinued operations
Loss for the year from discontinued operations 11 – (660)
Profit for the year from sale of associate 13 – 2,662
Profit for the year 7,907 7,719
Attributable to:
Equity holders of the parent 7,647 7,536
Minority interest 260 183
7,907 7,719
Earnings per share
From continuing operations
Basic 14 3.08p 2.49p
Diluted 14 3.03p 2.46p
From continuing and discontinued operations
Basic 14 3.08p 3.39p
Diluted 14 3.03p 3.34p
Consolidated income statement
Year ended 31 December 2006
33 34 Chime Communications plc Annual Report 2006   
Consolidated statement of recognised income and expense
Year ended 31 December 2006
2006 2005
£’000 £’000
Exchange differences on translation of foreign operations (106) (137)
Net loss recognised directly in equity (106) (137)
Profit for the year 7,907 7,719
Total recognised income and expense for the year 7,801 7,582
Attributable to:
Equity holders of the parent 7,541 7,399
Minority interests 260 183
7,801 7,582 2006 2005
Note £’000 £’000
Non-current assets
Goodwill 15 74,730 68,606
Other intangible assets 16 10 140
Property, plant and equipment 17 2,972 2,305
Investments in associates 19 582 891
Due from deferred consideration 20 950 950
Deferred tax asset 21 1,747 1,338
80,991 74,230
Current assets
Work in progress 22 686 565
Trade and other receivables 23 30,813 27,098
Cash and cash equivalents 6,652 6,997
38,151 34,660
Total assets 119,142 108,890
Current liabilities
Trade and other payables 24 (37,996) (34,964)
Current tax liabilities (2,475) (1,865)
Obligations under finance leases 25 (109) (142)
Short-term provisions 27 (2,133) (690)
(42,713) (37,661)
Net current liabilities (4,562) (3,001)
Non-current liabilities
Bank loans 26 (2,928) (8,485)
Long-term provisions 27 (13,167) (8,880)
Obligations under finance leases 25 (49) (129)
(16,144) (17,494)
Total liabilities (58,857) (55,155)
Net assets 60,285 53,735
Equity
Share capital 28 12,684 12,654
Share premium account 29 26,594 26,475
Own shares 30 (5,968) (6,961)
Equity reserves 31 33,764 32,817
Translation reserve 32 (245) (139)
Accumulated losses 33 (6,971) (11,375)
Equity attributable to equity holders of the parent 34 59,858 53,471
Minority interest 427 264
Total equity 60,285 53,735
The financial statements were approved by the Board of directors and authorised for issue on 12 March 2007. They were signed on its behalf by:
Mark Smith, Director 
Consolidated balance sheet
31 December 2006
35 36 Chime Communications plc Annual Report 2006   
Consolidated cash flow statement
Year ended 31 December 2006
2006 2005
Note £’000 £’000
Net cash from operating activities 35 7,694 8,239
Investing activities
Interest received 93 147
Dividends received from associates – 5
Proceeds on disposal of property, plant and equipment 69 218
Purchases of property, plant and equipment (1,703) (1,090)
Purchases of other intangible assets – (5)
Proceeds from disposal of an investment – 266
Acquisition of investment in an associate – (72)
Disposal of investment in an associate 36 2,862 (50)
Loans repaid by/(granted to) associates 13 (411)
Acquisition of subsidiary 38 (359) (7,191)
Disposal of subsidiary 37 (74) (98)
Net cash from/(used in) investing activities 901 (8,281)
Financing activities
Dividend paid (1,243) (1,009)
Dividends paid to minorities (92) (122)
Repayments of borrowings (5,557) (410)
Repayments of loan notes (878) (527)
Repayments of obligations under finance leases (156) (143)
Proceeds on issue of ordinary share capital – 4,692
Buy back of warrants (800) –
(Purchase of)/proceeds from sale of own shares (214) 2
Net cash (used in)/from financing activities (8,940) 2,483
Net (decrease)/increase in cash and cash equivalents (345) 2,441
Net funds at beginning of year 6,997 4,556
Cash and cash equivalents at end of year 6,652 6,997 1. General information
Chime Communications plc is a company incorporated in the United Kingdom under the Companies Act 1985. The address of the registered office is
No. 14 Curzon Street, London, W1J 5HN, United Kingdom. The nature of the Group’s operations consist principally of public relations, advertising,
market research, direct marketing design and event management consultancy.
These financial statements are presented in pounds sterling because that is the currency of the primary economic environment in which the Group
operates. Foreign operations are included in accordance with the policies set out in note 2.
2. Significant accounting policies
Statement of Compliance
The consolidated financial statements have been prepared in accordance with IFRSs and interpretations as adopted by the European Union and issued
by the International Accounting Standards Board.
Basis of accounting
The financial statements have been prepared in accordance with International Financial Reporting Standards. The financial statements have also been
prepared in accordance with IFRSs adopted for use in the European Union and therefore comply with Article 4 of the EU IAS Regulation.
The financial statements have been prepared on the historical cost basis except for certain financial instruments that are carried at fair value in
accordance with the accounting policies set out below. In the process of applying the Group’s accounting policies, management is required to make
judgements, estimates and assumptions that may affect the financial statements. Management believes that the judgements made in the preparation of
the financial statements are reasonable. However, actual outcomes may differ from those anticipated. Judgements in relation to revenue recognition
and goodwill have the most significant effect on the amounts recognised in the financial statements. The principal accounting policies adopted are set
out below.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries)
made up to 31 December each year. Control is achieved where the Company has the power to govern the financial and operating policies of an
investee entity so as to obtain benefits from its activities.
On acquisition, the assets and liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess
of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. Any deficiency of the cost of acquisition
below the fair values of the identifiable net assets acquired (i.e. discount on acquisition) is credited to the income statement in the period of acquisition.
The interest of minority shareholders is stated at the minority’s proportion of the fair values of the assets and liabilities recognised.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of
acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by
the Group.
All intra-Group transactions, balances, income and expenses are eliminated on consolidation.
Investments in associates
An associate is an entity over which the Group is in a position to exercise significant influence, but not control or joint control, through participation in
the financial and operating policy decisions of the investee.
The results, assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting except when
classified as held for sale. Investments in associates are carried in the balance sheet at cost as adjusted by post-acquisition changes in the Group’s
share of the net assets of the associate, less any impairment in the value of individual investments. Losses of the associates in excess of the Group’s
interest in those associates are not recognised.
Any excess of the cost of acquisition over the Group’s share of the fair values of the identifiable net assets of the associate at the date of acquisition is
recognised as goodwill and is included in the carrying value of the investment. Any deficiency of the cost of acquisition below the Group’s share of the
fair values of the identifiable net assets of the associate at the date of acquisition (i.e. discount on acquisition) is credited in the income statement in the
period of acquisition.
Where a Group company transacts with an associate of the Group, unrealised profits and losses are eliminated to the extent of the Group’s interest in
the relevant associate.
Goodwill
Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group’s interest in the fair value of the identifiable assets,
liabilities and contingent liabilities recognised.
Goodwill is recognised as an asset and reviewed for impairment at least annually. Any impairment is recognised in the income statement and is not
subsequently reversed.
On disposal of a subsidiary or associate, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
Notes to the consolidated financial statements
Year ended 31 December 2006
37 38 Chime Communications plc Annual Report 2006   
Notes to the consolidated financial statements (continued)
Goodwill arising on acquisitions before the date of transition to IFRSs has been retained at the previous UK GAAP amounts subject to being tested for
impairment at that date. Goodwill written off to reserves under UK GAAP prior to 1998 has not been reinstated and is not included in determining any
subsequent profit or loss on disposal. 
Goodwill impairment is assessed by comparing the carrying value of goodwill to the net present value of future cash flows derived from the underlying
assets considering forecast cash flows over an initial projection period of up to three years for each cash-generating unit. After this period, growth rates
of nominal GDP are generally assumed for each cash-generating unit. In certain instances, accelerated growth rates higher than the nominal GDP may
be used for the initial projection period if management believes the higher rate is more appropriate to reflect the economic cycles that occur within the
market which the cash-generating unit operates.
The weighted average cost of capital used by the Group to discount the future cash flows to their present value is 9.1% (2005 – 7.9%).
For two acquisitions with a combined value of £9.5 million (out of a total goodwill value of £74.7 million) we have used accelerated growth rates. 
Future anticipated payments to vendors in respect of earnouts are based on the directors’ best estimates of future obligations, which are dependent 
on future performance of the interests acquired and assume the operating companies improve profits in line with directors’ estimates and are included
in liabilities greater or less than one year as appropriate. When earnouts are to be settled in cash or share consideration, the fair value of the
consideration is obtained by discounting to present value the amounts expected to be payable in the future. The resulting interest charge is included
within finance costs.
Turnover recognition
Turnover is measured at the fair value of the consideration received or receivable and comprises the gross amounts billed to clients in respect of fees
earned, expenses recharged and commission-based income. Operating income comprises commission and fees earned in respect of turnover. Cost of
sales include fees paid to external suppliers where they are retained to perform part or all of a specific project for a client, and the resulting expenditure
is directly attributable to the revenue earned. Turnover and Operating income are stated exclusive of VAT, sales taxes and trade discounts.
– Public Relations
Operating income is typically derived from retainer fees and services performed subject to specific agreement. Operating income is recognised when
the service is performed in accordance with the contractual arrangement. Operating income is recognised on long-term contracts, if the outcome
can be assessed with reasonable certainty, by including in the income statement revenue and related costs as contract activity progresses.
– Advertising and Marketing Services and Research
Apart from where it is derived from retainer contracts (as above), operating income is recognised on each contract in proportion to the level of
services performed. Costs relating to contracts in progress at the balance sheet date are carried forward in work in progress. Losses are recognised
as soon as they are foreseen.
Leasing
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. 
All other leases are classified as operating leases.
Assets held under finance leases and the related lease obligations are recorded in the balance sheet at the fair value of the leased assets at the
inception of the leases or, if lower, the present value of minimum lease payments. The excess of the lease payments over the recorded lease obligations
is treated as finance charges which are amortised over each lease term to give a constant rate of charge on the remaining balance of the obligation.
Rental costs under operating leases are charged to the income statement in equal annual amounts over the periods of the leases.
Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term or the
period to the next review.
Foreign currencies
Transactions in UK companies denominated in currencies other than pounds sterling are recorded at the rates of exchange prevailing on the dates of
the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates
prevailing on the balance sheet date. Gains and losses arising on retranslation are included in net profit or loss for the period.
On consolidation, the assets and liabilities of the Group’s overseas operations are translated at the exchange rates prevailing on the balance sheet
date. Income and expenses are translated at the average exchange rates for the period unless exchange rates fluctuate significantly. Exchange
differences arising, if any, are classified as equity and transferred to the Group’s translation reserve. Such translation reserve differences are recognised
as income or as expenses in the period in which the operation is disposed of.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at
the closing rate. 
Finance costs
Finance costs which include interest, bank charges and the unwinding of the discount on deferred consideration, are recognised in the income
statement in the year in which they are incurred.
Operating profit
Operating profit is now stated after charging restructuring costs but before the share of results of associate, investment income and finance costs. 
This is a change in accounting policy in the year and accordingly, the prior year comparatives have been reclassified to effect this change. Segmental reporting
As required by IAS 14 (Segment Reporting) the prior year comparatives have been restated to reflect the change in management reporting of 
The Smart Company within the group. The Smart Company was previously reported within research, it is now included within public relations. 
The effect of this change is as follows for 2005: turnover £853,000, operating income £751,000; operating profit £120,000; capital additions £4,000,
depreciation £2,000; segment assets £4,049,000; segment liabilities £166,000. In addition, the restructuring costs incurred in 2005 have been
allocated across the business segments as follows: public relations £292,000; advertising and marketing £938,000; research £56,000.
Retirement benefit costs 
The pension cost is the amount of contributions payable by the Group to the defined contribution pension scheme and to personal pension schemes 
of certain employees during the accounting period. These are charged as an expense as they fall due.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it
excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.
The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and
liabilities in a transaction that affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is
charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is
also dealt with in equity.
Property, plant and equipment
Property, plant and equipment are stated at cost net of depreciation and any provision for impairment. Depreciation is provided in equal instalments
over the estimated useful economic lives of assets, using the following rates:
Short-term leasehold improvements 20%
Motor vehicles 16.67%
Fixtures, fittings and equipment 25%
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term of 
the relevant lease.
The gain or loss arising on the disposal of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset
and is recognised in the income statement.
Other intangible assets
Acquired computer software is capitalised based on the cost incurred to acquire and bring to use the specific software. Software is stated at cost net
of amortisation and any provision for impairment. The costs are amortised over their estimated useful lives of four years.
Impairment of property, plant and equipment and intangible assets excluding goodwill
At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication
that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine
the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates
the recoverable amount of the cash-generating unit to which the asset belongs. An intangible asset with an indefinite useful life is tested for impairment
annually and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset for which estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset 
(cash-generating unit) is reduced to its recoverable amount. An impairment loss is immediately recognised as an expense in the income statement.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no
impairment loss been recognised for the asset (cash-generating unit) in prior years.
39 40 Chime Communications plc Annual Report 2006   
Notes to the consolidated financial statements (continued)
Work in progress
Work in progress is stated at the lower of invoiced cost and net realisable value, net of payments received on account. Cost represents work supplied
from outside the Group awaiting billing to clients at the year-end.
Financial instruments
Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group becomes a party to the contractual provisions of
the instrument.
Cash and cash equivalents
Cash comprises cash, overdrafts and cash held on short-term deposit (up to three months). Cash equivalents are cash deposits held on three months
deposit at the Royal Bank of Scotland plc. The deposits guarantee the loan note creditors. Interest accruing on the deposits are payable to the holders
of the loan notes less any costs arising.
Trade receivables
Trade receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable
amounts. 
Investments
Investments are recognised and derecognised on a trade date where a purchase or sale of an investment is under contract whose terms require the
delivery of the investment within the timeframe established by the market concerned, and are initially measured at cost, including transaction costs.
Investments are classified as available for sale, and are measured at subsequent reporting dates at fair value. Gains and losses arising from changes 
in fair value are recognised directly in equity, until the security is disposed of or is determined to be impaired, at which time the cumulative gain or loss
previously recognised in equity is included in the net profit or loss for the period.
Bank borrowings
Interest bearing bank loans and overdrafts are recorded at the fair value of proceeds received, net of direct issue costs.
Trade payables
Trade payables are not interest-bearing and are stated at their nominal value.
Equity instruments
Equity instruments issued by the Company are recorded at the fair value of proceeds received, net of direct issue costs.
Share-based payments
The Group has applied the requirements of IFRS 2 Share-based Payments. IFRS 2 has been applied to all grants of equity instruments after 
7 November 2002 that were unvested as of 1 January 2005.
The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value at the
date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the
vesting period, based on the Group’s estimate of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions.
Fair value is measured for all schemes with market-based conditions by use of the Monte Carlo model. For all other schemes, fair value is measured 
by use of the Black-Scholes model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of
non-transferability, exercise restrictions, and behavioural considerations.
A liability equal to the portion of the goods or services received is recognised at the current fair value determined at each balance sheet date for 
cash-settled share-based payments.
The Group also provides employees with the ability to purchase the Group’s ordinary shares at 80% of the current market value. The Group records an
expense, based on its estimate of the 20% discount related to shares expected to vest on a straight-line basis over the vesting period. 3. Turnover
An analysis of the Group’s turnover is as follows:
2006 2005
Continuing operations £’000 £’000
Public Relations 105,351 71,678
Advertising and Marketing Services 52,680 39,006
Research 7,215 5,719
Group turnover 165,246 116,403
Discontinued operation (note 11) – 2,846
165,246 119,249
4. Business and geographical segments
Business segments
For management purposes, the Group is currently organised into three operating divisions – Public Relations, Advertising and Marketing Services and
Research. These divisions are the basis on which the Group reports its primary segment information.
Principal activities are as follows:
Public Relations
The public relations division comprises some of the leading names in the industry, including Bell Pottinger, Good Relations, The Smart Company,
Harvard and Insight, which together advise the owners and promoters of more than 300 major UK and international brands. The public relations
division is ranked first in the PR Week public relations consultancy league table for 2005. 
Advertising and Marketing Services (‘AMS’)
The AMS division possesses specialist skills in marketing services – sales promotion, direct marketing, advertising, design, media planning and buying,
digital online content creation and specialises in the niche markets of property, financial services and healthcare.
Research
The research division is made up of Opinion Leader Research and Ledbury Research. Opinion Leader Research is one of the UK’s leading research
consultancies and Ledbury Research provides research and advice to brands who market and sell to high net-worth consumers. 
41 42 Chime Communications plc Annual Report 2006   
Notes to the consolidated financial statements (continued)
4. Business and geographical segments (continued)
Segment information about these businesses is presented below: 
Advertising Elimination 
and of results of 
Public Marketing discontinued
Relations Services Research operations Elimination Consolidated
2006 £’000 £’000 £’000 £’000 £’000 £’000
Turnover
External sales 105,351 52,680 7,215 – – 165,246
Inter-segment sales 6,068 7,023 211 – (13,302) –
Total revenue 111,419 59,703 7,426 – (13,302) 165,246
Inter-segment sales are charged at prevailing market prices that would also be available to unrelated third parties.
Segment result
Operating income 47,847 26,264 4,705 – – 78,816
Operating profit 8,262 3,519 1,021 – – 12,802
Unallocated corporate expenses (538)
Operating profit 12,264
Share of results of associates (280)
Investment income 93
Finance costs (402)
Finance costs of deferred consideration (612)
Profit before tax 11,063
Tax (3,156)
Profit for the year 7,907
Advertising
and 
Public Marketing
Relations Services Research Eliminations Consolidated
2006 £’000 £’000 £’000 £’000 £’000
Other segment information
Capital additions 1,061 532 153 – 1,746
Depreciation and amortisation 767 356 33 – 1,156
Balance sheet
Assets
Segment assets 55,330 48,414 5,696 109,440
Investments in associates 582
Unallocated corporate assets 9,120
Consolidated total assets 119,142
Liabilities
Segment liabilities (24,426) (13,752) (1,606) (39,784)
Unallocated corporate liabilities (19,073)
Consolidated total liabilities (58,857) 4. Business and geographical segments (continued)
Advertising Elimination 
and of results of 
Public Marketing discontinued
Relations Services Research operations Elimination Consolidated
2005 £’000 £’000 £’000 £’000 £’000 £’000
Turnover
External sales 71,678 41,852 5,719 (2,846) – 116,403
Inter-segment sales 6,100 3,376 97 – (9,573) –
Total revenue 77,778 45,228 5,816 (2,846) (9,573) 116,403
Inter-segment sales are charged at prevailing market prices that would also be available to unrelated third parties.
Segment result
Operating income 40,801 19,727 3,594 (1,090) – 63,032
Operating profit 6,661 724 688 758 – 8,831
Unallocated corporate expenses (495)
Operating profit 8,336
Share of results of associates (111)
Investment income 152
Finance costs (830)
Finance costs of deferred consideration (222)
Profit before tax 7,325
Tax (1,608)
Profit for the year from continuing operations 5,717
Loss from discontinued operations (660)
Profit for the year from sale of associate 2,662
Profit for the year 7,719
Advertising
and 
Public Marketing
Relations Services Research EliminationsConsolidated
2005 £’000 £’000 £’000 £’000 £’000
Other segment information
Capital additions 778 434 62 – 1,274
Depreciation and amortisation 928 530 15 – 1,473
Balance sheet
Assets
Segment assets 47,444 43,364 4,810 95,618
Investments in associates 891
Unallocated corporate assets 12,381
Consolidated total assets 108,890
Liabilities
Segment liabilities (22,017) (12,039) (1,497) (35,553)
Unallocated corporate liabilities (19,602)
Consolidated total liabilities (55,155)
43 44 Chime Communications plc Annual Report 2006   
Notes to the consolidated financial statements (continued)
4. Business and geographical segments (continued)
2005
Discontinued operations
Discontinued operations had the following effect on the segment results of Advertising and Marketing Services, analysed into continuing and
discontinued components.
Advertising
and 
Marketing
Discontinued Continuing Services
£’000 £’000 £’000
Turnover
External sales 2,846 39,006 41,852
Inter-segment sales – 3,376 3,376
Total turnover 2,846 42,382 45,228
Result
Operating profit (758) 2,420 1,662
The segment results from discontinued operations stated above is equal to the loss before tax from discontinued operations in note 11, which provides
a reconciliation to the net loss from discontinued operations.
Geographical segments:
The Group’s operations are located in the United Kingdom, Germany, the Middle East and USA. The Group’s Advertising and Marketing Services and
Research divisions are located solely in the United Kingdom. Public Relations is carried out in the United Kingdom, Germany, the Middle East and USA.
The following table provides an analysis of the Group’s turnover by geographical market, based on the billing location of the client:
Turnover by geographical market
2006 2005
£’000 £’000
United Kingdom 84,922 73,894
Europe, Middle East and Africa 64,033 37,052
USA and rest of the world 16,291 5,457
165,246 116,403
Turnover of £2,846,000 from the Group’s discontinued operations in 2005 was derived from the United Kingdom.
The following is an analysis of the carrying amount of segment assets, and additions to tangible assets and intangible assets, analysed by the
geographical area in which the assets are located:
Carrying amount of 
segment assets Capital additions
2006 2005 2006 2005
£’000 £’000 £’000 £’000
United Kingdom 114,028 103,372 1,683 1,200
Europe, Middle East and Africa 4,691 5,082 45 54
USA and rest of the world 423 436 18 14
119,142 108,890 1,746 1,268
5. Restructuring costs
During the year the Group incurred no restructuring costs. In 2005 restructuring costs related to redundancies £348,000, other property related costs
of £601,000 and other costs of £337,000.  6. Operating profit
Profit from continuing operations has been arrived at after charging/(crediting):
2006 2005
£’000 £’000
Depreciation of owned property, plant and equipment 948 1,261
Depreciation of assets held under finance leases 78 82
Amortisation of other intangible assets – computer software 130 130
Rentals under operating leases – property 4,104 4,055
Profit on disposal of property, plant and equipment (1) (33)
Staff costs (see note 7) 47,821 40,169
Net foreign exchange losses 613 20
Auditors’ remuneration for audit services (see below) 181 225
Amounts payable to Deloitte & Touche LLP and their associates by the Company and its UK subsidiary undertakings in respect of non-audit services
were £114,000 (2005 – £342,000) of which £nil (2005 – £59,000) has been charged to the income statement.
A more detailed analysis of auditors’ remuneration is provided below:
2006 2006 2005 2005
£’000 % £’000 %
External audit services:
Audit services 31 10 83 15
Other audit services 150 51 142 25
181 61 225 40
Tax services:
Compliance services 61 21 59 10
Other tax services 53 18 113 20
Other services not covered above –– 170 30
295 100 567 100
The other services supplied by the auditors in 2005 can be analysed as follows: Due diligence – £15,000 and fees in relation to their role as Reporting
Accountants – £155,000. The fees for due diligence, Reporting Accountants work and the majority of tax advisory services have been capitalised as
part of costs of acquisition of VCCP Limited and De Facto Communications Limited.
45 46 Chime Communications plc Annual Report 2006   
Notes to the consolidated financial statements (continued)
7. Staff costs
The average monthly number of employees (including executive directors) was:
2006 2005
Number Number
Public Relations 436 356
Advertising and Marketing Services 279 258
Research 46 42
761 656
2006 2005
Their aggregate remuneration comprised: £’000 £’000
Wages and salaries 40,833 34,217
Social security costs 4,946 4,055
Pension costs – defined contribution plans (see note 42) 1,671 1,662
Costs of share options granted to directors and employees 371 235
47,821 40,169
8. Investment income
2006 2005
£’000 £’000
Interest on bank deposits 50 147
Interest on cash backed loan notes 30 –
Dividend received from associate – 5
Other interest receivable 13 –
93 152
9. Finance costs
2006 2005
£’000 £’000
Interest on bank overdrafts and loans (341) (811)
Interest on cash backed loan notes (30) –
Interest on non-cash backed loan notes (6) (2)
Interest on obligations under finance leases (14) (17)
Other interest payable (11) –
(402) (830)
Finance cost of deferred consideration (612) (222)
(1,014) (1,052) 10. Tax
2006 2005
£’000 £’000
Current tax:
UK corporation tax at 30% 3,213 1,804
Adjustment in respect of prior years (308) (986)
2,905 818
Foreign tax 5 49
Adjustment in respect of prior years 79 6
2,989 873
Deferred tax:
Current year originating temporary differences 303 688
Adjustment in respect of prior years (136) 47
Tax charge for the year 3,156 1,608
UK Corporation tax is calculated at 30% of the estimated assessable profit for the year.
Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions.
The charge for the year can be reconciled to the profit per the income statement as follows:
2006 2006 2005 2005
£% £%
Profit before tax 11,063 7,325
Tax at the UK corporation tax rate of 30% 3,319 30.0 2,198 30.0
Tax effect of expenses that are not deductible in determining taxable profits 274 2.5 386 5.3
Income not taxable (72) (0.7) (60) (0.8)
Tax effect of utilisation of tax losses not previously recognised –– 27 0.3
Prior year corporation tax adjustment (229) (2.1) (981) (13.4)
Prior year deferred tax adjustment (136) (1.2) 47 0.6
Effect of difference tax rates of subsidiaries operating in other jurisdictions –– (9) (0.1)
Tax expense and effective tax rate for the year 3,156 28.5 1,608 21.9
Discontinued operations – (227)
3,156 1,381
47 48 Chime Communications plc Annual Report 2006   
Notes to the consolidated financial statements (continued)
11. Discontinued operations
The results of the discontinued operations which have been included in the consolidated income statement, are as follows:
2006 2005
£’000 £’000
Turnover – 2,846
Expenses – (3,604)
Net loss before tax – (758)
Attributable tax credit – 227
Loss attributable to discontinued operations – (531)
Loss on disposal – (129)
Net loss on disposal of discontinued operations – (660)
In 2005 a loss of £129,000 arose on the disposal of Rare Publishing, being the proceeds of disposal less the carrying amount of the subsidiary’s net
assets and attributable goodwill and a tax credit was taken on the loss of £758,000 at 30%.
The effect of discontinued operations on segment results is disclosed in note 4.
12. Dividends
2006 2005
Amounts recognised as distributions to equity holders in the year: £’000 £’000
Final dividend for the year ended 31 December 2005 of 0.32p (2004 – 0.30p) per share 793 614
Interim dividend for the year ended 31 December 2006 of 0.18p (2005 – 0.16p) per share 450 395
1,243 1,009
Proposed final dividend for the year ended 31 December 2006 of 0.40p (2005 – 0.32p) per share 1,001 793
The proposed final dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these
financial statements.
Under an arrangement dated 3 April 1996, The Chime Communications Employee Trust which holds 4,631,907 ordinary shares representing 1.83% 
of the Company’s called-up share capital, has agreed to waive dividends on 3,384,907, the difference being those shares held under the deferred 
share scheme.
13. Profit on sale of associate
On 31 December 2005, the Group disposed of the remaining 51% of its associate HHCL United Limited (formerly HHCL/Red Cell Advertising Limited)
to WPP Group (UK) Limited. A profit of £2,662,000 arose in 2005 on disposal, being the proceeds less the costs of disposal. 14. Earnings per share
From continuing and discontinued operations
The calculation of the basic and diluted earnings per share is based on the following data:
Earnings
2006 2005
Basic 3.08p 3.39p
Diluted 3.03p 3.34p
£’000 £’000
Earnings for the purposes of basic earnings per share being net profit attributable to equity holders of the parent 7,647 7,536
Number of shares Number Number
Weighted average number of ordinary shares for the purposes of basic earnings per share 247,920,453 222,362,754
Effect of dilutive potential ordinary shares:
Share options 4,390,908 1,895,423
Warrants – 1,075,622
Weighted average number of ordinary shares for the purposes of diluted earnings per share 252,311,361 225,333,799
From continuing operations
2006 2005
Basic 3.08p 2.49p
Diluted 3.03p 2.46p
£’000 £’000
Profit attributable to equity holders of the parent 7,647 7,536
Adjustments to exclude loss for the year from discontinued operations – 660
Adjustment to exclude profit for the year from sale of associate – (2,662)
Earnings from continuing operations for the purpose of basic earnings per share excluding discontinued operations 7,647 5,534
From discontinued operations
2006 2005
Basic – 0.90p
Diluted – 0.88p
The denominators used are the same as those detailed above for both basic and diluted earnings per share from continuing and discontinued operations.
49 50 Chime Communications plc Annual Report 2006   
Notes to the consolidated financial statements (continued)
15. Goodwill
2006
Cost £’000
Carrying amount at 1 January 2006 68,606
Exchange differences (27)
Recognised on acquisition of a subsidiary (see note 38) 208
Other changes in respect of prior year acquisitions 5,943
At 31 December 2006 74,730
The adjustment arising on prior year acquisitions relates to the contingent consideration being re-assessed based on results as follows:
2006
£’000
VCCP Limited 4,777
De Facto Communication Limited 683
The Smart Company.Net Limited 282
Baxter Hulme PR & Marketing Limited 201
5,943
Goodwill is comprised of the following substantial holdings:
2006
£’000
VCCP Limited 27,596
QBO Bell Pottinger Limited 8,487
Harvard Public Relations Limited 7,737
Opinion Leader Research Limited/The Smart Company.Net Limited 6,793
50,613
Other acquired goodwill on the acquisition of 18 companies 24,117
74,730
16. Other intangible assets
Computer Software
2006 2005
Cost £’000 £’000
At 1 January 675 695
Additions – 6
Disposals (19) (26)
At 31 December 656 675
Accumulated amortisation
At 1 January 535 431
Charge for the year 130 130
Disposals (19) (26)
At 31 December 646 535
Carrying amount at 31 December 10 140 17. Property, plant and equipment
Short-term Fixtures, 
leasehold Motor fittings and 
improvements vehicles computers Total
Cost £’000 £’000 £’000 £’000
At 1 January 2006 3,121 832 5,538 9,491
Additions 586 36 1,124 1,746
Acquisition of subsidiary 5– 15 20
Exchange differences – (1) (56) (57)
Disposals (43) (220) (752) (1,015)
At 31 December 2006 3,669 647 5,869 10,185
Accumulated depreciation
At 1 January 2006 2,686 434 4,066 7,186
Charge for the year 231 106 689 1,026
Fair value adjustment ––– –
Exchange differences – (1) (51) (52)
Eliminated on disposal (39) (163) (745) (947)
At 31 December 2006 2,878 376 3,959 7,213
Carrying amount at 31 December 2006 791 271 1,910 2,972
Carrying amount at 31 December 2005 435 398 1,472 2,305
The carrying amount of the Group’s motor vehicles includes an amount of £237,989 in respect of assets held under finance leases. The carrying
amount of the Group’s fixtures, fittings and computers includes an amount of £53,283 in respect of assets held under finance leases. As stated in 
note 25, the Group’s obligations under finance leases are secured by the lessor’s charges over the leased assets.
51 52 Chime Communications plc Annual Report 2006   
Notes to the consolidated financial statements (continued)
18. Subsidiaries and associates
The Group’s principal trading subsidiaries and associated undertakings, which are all incorporated in Great Britain (except where noted) are listed below:
Proportion
of ordinary 
shares held and
Company Nature of business voting rights
Subsidiaries
Bell Pottinger Communications Limited Public Relations 100%
Bell Pottinger Corporate and Financial Limited Financial Public Relations 100%
Bell Pottinger Group Limited Public Relations 100%
Bell Pottinger Public Affairs Limited Political Public Relations 100%
Bell Pottinger Public Relations Limited Consumer Public Relations & Sports Marketing 100%
Bell Pottinger USA Inc * Public Relations 100%
Branded Moments of Truth Limited (formerly Gasoline Limited) Consumer Marketing 70%
Bullnose Limited Public Relations 51%
De Facto Communications Limited + Healthcare Public Relations 100%
Good Relations Limited Public Relations 100%
Harvard Public Relations GmbH ‡ Public Relations 100%
Harvard Public Relations Limited + Public Relations 100%
Insight Marketing & Communications Limited + Public Relations 100%
Ledbury Research Limited Market Research 55%
MMK Markt- & Medien-Kommunication GmbH ‡ Public Relations 100%
Opinion Leader Research Limited Market Research 100%
Ozone Marketing Communications Limited Healthcare Public Relations 100%
Pure Media Group Limited Media Buying 100%
Rare Corporate Design Limited Corporate Design 100%
Resonate Communications Limited Consumer Public Relations 100%
Stephens Francis Whitson Limited Direct Marketing 51%
Teamspirit Limited + Financial Services Advertising and Marketing 100%
Traffic Werbeagentur GmbH ‡ Public Relations 100%
The Smart Company.Net Limited + Corporate and Social Responsibility Consultancy 100%
TTA Public Relations Limited Property Marketing 70%
VCCP Limited + Advertising and Marketing 100%
VCCP Digital Limited Digital Advertising and Marketing 100%
Associates
Meropa Communications (Pty) Limited ±+ Public Relations 20%
Rare Publishing Limited Customer publishing 24%
Colour TV Limited Television Production 45%
± Incorporated in South Africa
‡ Incorporated in Germany
* Incorporated in America
+ Direct subsidiary/associate of Chime Communications plc
These companies operate principally in their country of incorporation. 19. Investments in associates
2006 2005
£’000 £’000
Carrying value of investments and loans to associates 615 987
Share of loss (33) (96)
582 891
2006 2005
Aggregate amounts relating to associates £’000 £’000
Total assets 1,524 1,281
Total liabilities (1,561) (1,631)
Net liabilities (37) (350)
Turnover 4,710 2,395
Loss for the year (280) (111)
Included in the above liabilities owed by the associates are loans from the Group of £465,816 (2005 – £704,772).
A list of the significant investments in associates, including the name, country of incorporation, proportion of ownership interest is given in note 18.
20. Due from deferred consideration
Amounts shown are due from the disposal of Smithfield Financial Limited and Rare Publishing Limited, being the potential deferred consideration due
after one year.
21. Deferred tax
2006 2005
Deferred tax asset movement £’000 £’000
At 1 January 2006 1,338 784
Acquisition of subsidiaries – 1,158
Charge to equity 577 131
Charge to the profit and loss account (168) (735)
At 31 December 2006 1,747 1,338
Analysis of deferred tax asset
Capital allowances in excess of depreciation 573 650
Short-term temporary differences 203 380
Share-based payments 971 170
Losses – 138
1,747 1,338
Losses of £0.8 million in the UK and £3.9 million in the US (2005 – £5.1 million) have not been recognised in deferred taxation due to insufficient
certainty that there will be appropriate profits available in the future to utilise them.
53 54 Chime Communications plc Annual Report 2006   
Notes to the consolidated financial statements (continued)
22. Work in progress
2006 2005
£’000 £’000
Amounts recoverable on customer contracts 686 565
23. Trade and other receivables
2006 2005
£’000 £’000
Amounts receivable from provision of services 25,430 19,677
Amounts due from disposal of businesses – 2,900
Other debtors 1,051 953
Prepayments and accrued income 4,332 3,568
30,813 27,098
The average credit period taken on provision of services is 51 days (2005 – 58 days). An allowance has been made for estimated irrecoverable
amounts from the provision of services of £583,614. This allowance has been determined by considering specific doubtful balances and by reference
to past default experience.
The directors consider that the carrying amount of trade and other receivables approximates their fair value.
24. Trade and other payables
2006 2005
£’000 £’000
Trade creditors 8,195 9,063
Other taxation and social security 2,541 2,616
Accruals and deferred income 25,728 21,204
Other creditors 890 827
Loan notes 642 1,254
37,996 34,964
The average credit period taken for trade purchases is 30 days. The directors consider that the carrying amount of trade payables approximates to
their fair value.
The loan notes are guaranteed against the loan note deposits of the same amount included within cash and cash equivalents. Interest accruing on the
deposit is payable to the holders of the loan notes less any costs arising.
Loan notes totalling £642,174 are outstanding as part of the initial and contingent consideration on the acquisition of HHCL Group Limited and the
initial and contingent consideration on the acquisition of Roose Holdings Limited and The Smart Company.Net Limited.
Loan notes totalling £5.5 million were issued to senior employees of HHCL Group Limited in two instalments, the balance outstanding at 
31 December 2006 being £0.29 million (2005 – £1.12 million). The loan notes are repayable on giving 90 days notice by the loan note holder.
Loan notes totalling £8.6 million were issued to the original shareholders of Roose Holdings Limited as part of the initial and contingent consideration.
The loan notes are repayable at any time after one year from the date of issue. The balance outstanding at 31 December 2006 is £0.05 million 
(2005 – £0.10 million). 
Loan notes totalling £0.4 million (2005 – £0.1 million) were issued to the original shareholders of The Smart Company.Net Limited for the contingent
consideration. The loan notes are repayable at any time after six months from the date of issue. The loan notes are not guaranteed by Royal Bank 
of Scotland plc. The balance outstanding at 31 December 2006 is £0.30 million (2005 – £0.03 million). On 1 August 2006 additional loan notes of
£0.27 million were issued in relation to deferred consideration.
Interest receivable on loan notes is in the range of 3.83% to 4.28%.
The loan notes are guaranteed by Royal Bank of Scotland plc, unless otherwise stated, who hold a deposit of £0.34 million against them. 25. Obligations under finance leases
Minimum Present Minimum Present
lease value of lease lease value of lease 
payments payments payments payments
2006 2006 2005 2005
£’000 £’000 £’000 £’000
Amounts payable under finance leases
Within one year 115 109 154 142
Between one and two years 44 43 104 99
Between two and three years 66 29 30
165 158 287 271
Less: future finance charges (7) – (16) –
158 158 271 271
Less: Amount due for settlement within 12 months (shown under current liabilities) (109) (142)
Amount due for settlement after 12 months 49 129
It is the Group’s policy to lease certain of its motor vehicles, fixtures, fittings and equipment under finance leases. The lease term is three years. 
The finance lease bears interest at variable rate of 1.4% above base rate. 
All lease obligations are denominated in sterling.
The fair value of the Group’s lease obligations approximates their carrying amount.
The Group’s obligations under finance leases are secured by the lessors’ charges over the leased assets.
26. Bank overdrafts and loans
2006 2005
£’000 £’000
Bank loans 3,000 8,500
Cost of raising finance (72) (15)
2,928 8,485
The borrowings are repayable as follows:
On demand or within one year – –
In the second year – 8,485
In the third to fifth year 2,928 –
2,928 8,485
Less: Amount due for settlement within 12 months (shown under current liabilities) – –
Amount due for settlement after 12 months 2,928 8,485
All borrowings are in sterling.
Cash deposits and bank loans are held at either variable rates of interest or at rates fixed for periods of no longer than three months.
The principal features of the group’s borrowings are as follows:
(i) The Group has an overdraft facility of £2 million which is renewable on 25 February 2007. The overdraft facility is repayable on demand.
(ii) The Group has a committed facility of £13 million until 28 February 2009.
(iii) The bank loan and overdrafts bear interest at 1% above LIBOR.
(iv) A cross-guarantee exists between each of the subsidiaries and the parent company. The Royal Bank of Scotland holds debentures over the
assets of the Company and its subsidiaries in respect of the bank loans.
At 31 December 2006, the Group had available £10 million (2005 – £5.5 million) of undrawn committed borrowing facilities in respect of which all
conditions precedent had been met. 
The fair values of bank overdrafts and loans are determined by considering the maturity dates and market rates of interest. At 31 December 2006 there
was no material difference between the fair value of financial assets and financial liabilities and their book value. 
55 56 Chime Communications plc Annual Report 2006   
Notes to the consolidated financial statements (continued)
27. Provisions
Deferred/ Deferred/
contingent contingent
consideration consideration Vacant
– shares – cash property Total
£’000 £’000 £’000 £’000
At 1 January 2006 4,352 4,475 743 9,570
On acquisition of subsidiaries 41 31 – 72
Adjustment to prior year acquisitions 2,900 2,954 – 5,854
Discounting charge to the income statement 301 311 – 612
Charged to the income statement –– 56 56
Payments made (260) (219) (385) (864)
At 31 December 2006 7,334 7,552 414 15,300
Included in current liabilities 826 1,100 207 2,133
Included in non-current liabilities 6,508 6,452 207 13,167
7,334 7,552 414 15,300
The vacant property provision remaining at 31 December 2006 relates to two buildings, one near Heathrow and one in Chelsea. 
The Heathrow building is approximately 12,000 sq ft and the Group has a lease which runs to September 2016. The current rental cost is £350,000
per annum with upward only rent reviews due in September 2010 and 2015. The Group has sublet 7,000 sq ft, the remaining 5,000 sq ft was reoccupied
by Group companies during 2006. The rental income achieved on the sub-let space is lower than that rent currently being paid under the lease.
The Chelsea building is approximately 20,000 sq ft and the Group has a lease which runs to June 2015. The current rental cost is £566,000 per 
annum with an upward rent review due in June 2010. The building is fully sub-let. The rent achieved is no less than that being paid under the lease.
The provision made in 2005 was fully utilised in 2006. A further provision of £56,000 was made in 2006. The provision covers the unwinding of the rent
free periods given to the tenants.
Contingent consideration relates to acquisitions made in current and previous years. The amounts payable are dependent on the future profits of the
companies acquired. Further details of the deferred considerations arising from current year acquisitions are shown in note 38.
The contingent consideration shares comprises shares to be issued in respect of acquisitions and has been shown as a liability in accordance with 
IAS 32 Financial Instruments: Presentation and Disclosure.
28. Share capital
2006 Nominal value 2005 Nominal value
Number £’000 Number £’000
Authorised: at 1 January and 31 December ordinary at 5p each 764,071,396 38,204 764,071,396 38,204
Called up, allotted and fully paid at 1 January 253,080,569 12,654 206,236,705 10,312
Issues relating to contingent consideration on The Smart Company.Net Limited –– 183,026 9
Issues relating to the acquisition of VCCP Limited –– 25,438,596 1,272
Placing and open offer –– 20,388,181 1,019
Issues relating to contingent consideration on TTA Public Relations Limited –– 834,061 42
Issues relating to contingent consideration on Baxter Hulme PR & Marketing Limited 602,941 30 ––
Issued to staff under share options 1,178 – ––
Called up, allotted and fully paid at 31 December 253,684,688 12,684 253,080,569 12,654
The Company has one class of ordinary shares which carry no right to fixed income.
On 1 February 2006 warrants were cancelled over 8,280,320 ordinary shares held by The Royal Bank of Scotland in return for a payment of £800,000.
These warrants were issued in September 2003 as part of our refinancing arrangements at an exercise price of 24p and entitled The Royal Bank of
Scotland to subscribe for the Shares at any time up to 30 September 2006. 
On 10 July 2006, 602,941 shares were issued in respect of contingent consideration for Baxter Hulme PR & Marketing Limited. The fair value of these
shares was £0.255 each. 
During the year shares were issued to staff at prices between £0.235 and £0.3344. 29. Share premium account
Share
premium
£’000
Balance at 1 January 2006 26,475
Premium arising on issue of equity shares 124
Expenses of issue of equity shares (5)
Balance at 31 December 2006 26,594
30. Own shares
Own
shares
£’000
Balance at 1 January 2006 (6,961)
Disposed of on exercise of options 1,534
Purchase of own shares (541)
Balance at 31 December 2006 (5,968)
The own shares reserve represents the cost of shares in Chime Communications plc purchased in the market and held by the The Chime
Communications Employee Trust to satisfy options under the Group’s share options schemes and deferred shares (see note 41).
The Chime Communications Employee Trust (‘The Trust’) was established in 1997 in Jersey. The trustee is HBOS Employee Equity Solutions.
The beneficiaries of the Trust are employees and former employees of the Company and the Group (including any director) and the spouses and children
or stepchildren of such employees or former employees. The purpose of the Trust is to facilitate and encourage the ownership of shares by employees.
Distributions from the Trust are agreed by the trustee on recommendations from the Board of Directors of Chime Communications plc.
The Trust currently holds 4,631,907 ordinary shares which have a nominal value of £231,595 and over which options were granted in November 1997,
May 1998, November 1998, April 1999, November 2000 and April 2003 and deferred shares in May 2006. 1,247,000 shares were purchased in 2006
at a nominal value of £536,400. Cost associated with these shares amounted to £5,186. All costs of the Trust are borne by Chime Communications plc
and expensed through the income statement. The Trust has opted to waive all dividends with the exception of those shares allocated under the
deferred share scheme (see note 41). The market value of the shares in the Trust at 31 December 2006 was £2,570,708 (2005 – £1,478,000). 
31. Equity reserves
Share-based Capital
payment reduction
reserve reserve Total
£’000 £’000 £’000
Balance at 1 January 2006 432 32,385 32,817
Credit in relation to share-based payments 947 – 947
Balance at 31 December 2006 1,379 32,385 33,764
Capital reduction reserve relates to the capital reduction undertaken in October 2003. The reserve will not be treated as realised profits of the Company
until any debt or claim outstanding as at 1 July 2003 has been repaid or remedied. If on 1 July 2013 there remains only liabilities outstanding in relation
to property leases the amount outstanding to the reserve may be released and the undertaking discharged or replaced by new share issues.
The share-based payments reserve arises from the cost of share-based payment transactions with employees, which is credited to equity in
accordance with IFRS 2 Share-Based Payments.
57 58 Chime Communications plc Annual Report 2006   
Notes to the consolidated financial statements (continued)
32. Translation reserves
2006
£’000
Balance at 1 January 2006 (139)
Exchange differences on translation of overseas operations (106)
Balance at 31 December 2006 (245)
33. Accumulated loss
2006
£’000
Balance at 1 January 2006 (11,375)
Profit for the year attributable to equity holders of the parent 7,647
Dividends paid (1,243)
Buy back of warrants (800)
Loss on disposal of own shares held in treasury (1,200)
Balance at 31 December 2006 (6,971)
34. Reconciliation of equity attributable to equity holders of parent 
2006 2005
£’000 £’000
Balance at 1 January 53,471 34,444
Dividends paid (1,243) (1,009)
Disposal of own equity shares held in treasury – (6)
Buy back of warrants (800) –
Deferred tax benefit in respect of share-based payments – 131
Credit in relation to share-based payments 947 235
Purchase of own shares (541) –
Own shares disposed of on exercise of options 334 8
Net profit for the year attributable to equity holders of the parent 7,541 7,399
Increase in share capital 149 12,269
Balance at 31 December 59,858 53,471 35. Notes to the cash flow statement
2006 2005
£’000 £’000
Operating profit 12,264 8,336
Adjustments for:
Loss from discontinued operation – (757)
Share-based payment expense 371 235
Translation differences (76) 6
Depreciation of property, plant and equipment 1,026 1,343
Amortisation of other intangible assets 130 130
Gain on disposal of property, plant and equipment (1) (33)
Decrease in provisions (328) (10)
Operating cash flows before movements in working capital 13,386 9,250
Increase in work in progress (121) (80)
Increase in receivables (6,499) (1,724)
Increase in payables 3,692 2,929
Cash generated by operations 10,458 10,375
Income taxes paid (2,306) (1,291)
Interest paid (458) (845)
Net cash from operating activities 7,694 8,239
Additions to fixtures and equipment during the year amounting to £12,307 and additions to motor vehicles during the year amounting to £32,082 were
financed by new finance leases (2005 – £178,173). 
Cash and cash equivalents (which are presented as a single class of assets on the face of the balance sheet) comprise cash at bank and other 
short-term liquid investments with a maturity of three months or less.
Net cash and cash equivalents at the beginning of the year comprise bank balances of £6,997,000 (2005 – £6,056,000) and overdrafts of £nil 
(2005 – £1,500,000).
36. Disposal of associate
There were no disposals in the year. On 31 December 2005, the Group disposed of the remaining 51% of its associate HHCL United Limited 
(formerly HHCL/Red Cell Advertising Limited) to WPP Group (UK) Limited. 
The associate was not recognised on the balance sheet as at 1 January 2005 as it had net liabilities. The disposal proceeds of £2,750,000 were
received by the Group during the first week of January 2006. Costs arising on the disposal amounted to £88,000, of these £38,000 were paid in 2006. 
In 2006 the Group received £150,000 as part of the deferred consideration receivable on Smithfield Financial Limited.
The net cash inflow arising on the disposal in 2006 amounted to £2,862,000. 
37. Disposal of subsidiary
There were no disposals in the year. In 2005 the Group disposed of the trade and assets, and 76% of its interest in Rare Publishing Limited. £74,000 of
disposal costs were paid in 2006.
59 60 Chime Communications plc Annual Report 2006   
Notes to the consolidated financial statements (continued)
38. Acquisition of subsidiary
Ledbury Research Limited
On 1 January 2006, the Group acquired 55% of the issued share capital of Ledbury Research Limited. The fair value of the consideration given for 
the acquisition was £216,698. An initial payment of £120,000 was satisfied by in cash on completion. Costs relating to the acquisition amounted to
£24,260, of which £22,760 had been paid in the year.
Contingent consideration of £82,800 is dependent on the profitability of Ledbury Research Limited for the three years to 31 December 2009. 
The Group has provided for contingent consideration of £82,800 to date, this has been discounted to a net present value of £72,438, with the 
resulting discounting charge of £10,362 to be taken through the income statement over the earnout period. 
The fair value of the net assets acquired was £11,130, resulting in goodwill of £205,568 which has been capitalised as an intangible fixed asset.
In the post acquisition period, Ledbury Research Limited contributed £26,219 to the profit on ordinary activities before taxation and £267,485 to
operating income.
Bullnose Limited
On 1 January 2006, the Group acquired 51% of the issued shared capital of Bullnose Limited. The fair value of the consideration given for the
acquisition was £12,756. An initial payment of £1 was satisfied by cash on completion. Costs relating to the acquisition amounted to £12,755, of which
£11,755 had been paid in the year. 
The fair value of the net assets acquired was £10,753, resulting in goodwill of £2,003 which has been capitalised as an intangible fixed asset.
In the post acquisition period, Bullnose Limited contributed £28,329 to the profit on ordinary activities before taxation and £314,856 to operating income.
The combined goodwill calculation for the two acquisitions is as follows:
Book Fair value Fair
value adjustments value
Net assets acquired: £’000 £’000 £’000
Tangible assets 20 – 20
Trade and other receivables 165 – 165
Cash and cash equivalents 16 – 16
Trade and other payables (160) – (160)
41 – 41
Minority interest (19)
22
Goodwill 208
Total consideration 230
Satisfied by:
Cash 120
Shares allotted –
Directly attributable costs 37
Deferred consideration 73
230
Net cash outflow arising on acquisition:
Cash consideration 155
Cash and cash equivalents acquired (16)
139
Goodwill arises from anticipated profitability and future operating synergies from the combination. 38. Acquisition of subsidiary (continued)
Other deferred consideration of £479,423 was settled during the year in respect of acquisitions made in previous years by cash payments of £59,625,
£266,048 by the issue of non-cash backed loan notes and £153,750 by the issue of shares. £46,229 of cash paid in the year relates to costs in
respect of prior year acquisitions. In addition £25,000 was paid to acquire an additional 15% of Gasoline Limited, on which there was no goodwill
recognised and £89,473 was a fair value adjustment in respect of De Facto Communications Limited. The total payment in respect of the purchase 
of subsidiary undertakings was therefore £374,843. Cash acquired on acquisition amounted to £16,188, therefore the net cash effect in respect of
subsidiary undertakings was £358,655. 
39. Contingent liabilities and commitments
In addition to the potential deferred and contingent consideration as disclosed in note 27 of £14,886,000 at 31 December 2006 there was a maximum
financial commitment of £2,722,680 in respect of unprovided capital expenditure. This relates to the acquisition of VCCP Limited (£2,200,000), 
De Facto Communications Limited (£216,180) and Baxter Hulme PR & Marketing (£306,500) in 2005. 
VCCP Limited – The maximum contingent consideration payable is £15,500,000, however provision has only been made for £13,300,000 (before
discounting) in the accounts to date. The contingent consideration is a multiple of 8 times profit before tax for the following periods: average of the
three years 2005 to 2007 inclusive, 2008, 2009 and 2010. 
De Facto Communications Limited – The maximum contingent consideration payable is £1,816,180, however provision has only been made for
£1,600,000 in the accounts to date (before discounting). The contingent consideration is 60% of the following: 5 times average profit after tax for 
2005 and 2006, and 5 or 6 times average profit after tax for 2007 and 2008, the higher multiple only being payable if the profit margin for both years
exceeds 15%.
Baxter Hulme PR & Marketing Limited – The maximum contingent consideration payable is £846,250, however provision has only been made for
£539,750 in the accounts to date (before discounting). The contingent consideration is a multiple of 4.1 times the average profits before tax for the
years 31 December 2006 to 31 December 2007.
40. Operating lease arrangements
The Group as lessee
2006 2005
£’000 £’000
Minimum lease payments under operating leases recognised as an expense for the year 36,723 38,589
At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which
fall due as follows:
2006 2005
£’000 £’000
Within one year – 182
In the second to fifth years inclusive 458 2,461
After five years 36,265 35,946
36,723 38,589
Operating lease payments represent rentals payable by the Group for its office properties and for certain office equipment. 
The group as lessor
At the balance sheet date, the Group had contracted with tenants for the following future minimum lease payments:
2006 2005
£’000 £’000
Within one year 132 164
In the second to fifth years inclusive 1,867 537
After five years 1,362 –
Property rental income earned during the year was £645,000 (2005 – £764,000).
61 62 Chime Communications plc Annual Report 2006   
Notes to the consolidated financial statements (continued)
41. Share-based payments
Equity-settled share option plan
The Group operates four share plans: an executive share option scheme, an employee savings related scheme, a deferred share scheme and a 
Co-Investment Plan.
The exercise price of the options granted under the executive share option scheme is equal to the market value of the Company’s shares at the time
when the options are granted. The vesting period is generally three years but if they are special options it is five years. If the options remain unexercised
after a period of 10 years from the date of grant, the options expire. Furthermore, options are forfeited if the employee leaves the group before the
options vest. All executive options granted from November 1997 (other than special executive options) are subject to performance criteria as set out in
the report to the shareholders on directors’ remuneration.
The exercise price of the options granted under the employee savings related scheme is 80% of the market value at the date of offer. The vesting
period is five years, if the options remain unexercised six months after this date, the options expire. Furthermore, the options are forfeited if the
employee leaves the Group before the options vest.
Under the deferred share scheme, restricted shares are awarded to employees at nil cost to the employee. The vesting period is three years from the
date of award. If the employee leaves the Group before vesting then the restricted shares are forfeited. The employee receives the dividend on the
shares during the vesting period.
The matching shares awarded under the Co-Investment Plan are awarded to employees at nil costs. The vesting period is four years. If the employee
leaves the Group before vesting then the matching shares are forfeited. If the employee disposes of any of their committed shares then the matching
shares awarded would be reduced accordingly retrospectively.
The matching shares awarded are subject to performance criteria as set out in the report to the shareholders on directors’ remuneration.
Share Options
2006 Weighted 2005 Weighted 
average exercise price average exercise price
Options (in £) Options (in £)
Outstanding at beginning of year 16,834,620 £0.430 16,120,062 £0.474
Granted during the year 761,796 £0.335 2,339,187 £0.275
Lapsed during the year (1,650,934) £0.447 (1,609,629) £0.651
Exercised during the year (1,881,274) £0.177 (15,000) £0.155
Outstanding at the end of the year 14,064,208 £0.445 16,834,620 £0.430
Exercisable at the end of the year 7,273,245 – 489,008
The weighted average share price at the date of exercise for share options exercised during the year was £0.4031 (2005 – £0.3025). The options
outstanding at 31 December 2006 had a weighted average exercise price of £0.445 (2005 – £0.43), and a weighted average remaining contractual life
of 2,110 days (2005 – 2,482 days). In 2006 options were granted on 5 May, the aggregate of the estimated fair values of the options granted on that
date is £55,400. In 2005 options were granted on 19 April, 13 May and 25 October, the aggregate of the estimated fair values of the options granted
on those dates is £123,240.
The fair value was calculated using the Black-Scholes model (2005 – Black-Scholes and Monte Carlo).
In valuing the options, the following assumptions were used:
2006 2005
Weighted average share price £0.415 £0.273
Weighted average exercise price £0.335 £0.272
Expected volatility 35% 35%
Expected life – executive scheme – 3 years
Expected life – savings related scheme 5 years 5 years
Risk-free rate 4.50% 4.06%
Dividend yield 1.89% 1.89%
Expected volatility was determined by calculating the historical volatility of the Group’s share price over the previous two years. The expected life used 
in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural
considerations. 41. Share-based payments (continued)
Deferred Shares
2006 2005
Deferred Deferred
Shares Shares
Outstanding at beginning of year – –
Awarded during the year 1,247,000 –
Lapsed during the year (23,250) –
Outstanding at the end of the year 1,223,750 –
The restricted shares were awarded on 25 May 2006, the share price at the date of award was £0.391 (2005 – £nil). The remaining contractual life is
876 days (2005 – nil). The estimated fair values of the restricted shares awarded is £426,167 (2005 – £nil).
The fair value was calculated with reference to the share price at the date of award.
Co-Investment Plan
2006 2005
Matching Matching
Shares Shares
Outstanding at beginning of year – –
Granted during the year 12,955,445 –
Outstanding at the end of the year 12,955,445 –
The matching shares were awarded on 18 September 2006, the share price at the date of award was £0.38 (2005 – £nil). The remaining contractual
life is 1,357 days. The estimated fair value of the matching shares granted is £2,256,958 (2005 – £nil).
The fair value of the matching shares allocated to the market based performance criteria was calculated using the Monte Carlo model.
In valuing the shares, the following assumptions were used:
2006 2005
Weighted average share price £0.379 –
Expected volatility 32% –
Expected life 4 years –
Risk-free rate 4.78% –
Dividend yield n/a –
Expected volatility was determined by calculating the historical volatility of the Group’s share price over the previous two years. 
The fair value of the matching shares allocated to the non market based performance criteria was made with reference to the share price at the date 
of award discounted for expected dividends.
The Group recognised total expenses of £371,000 and £235,000 related to equity-settled share-based payment transactions in 2006 and 2005
respectively.
42. Retirement benefit schemes
The Group operates a defined contribution pension scheme for the benefit of the majority of employees. This is an independently administered fund,
the assets of which are held separately from those of the Company. The amounts charged in this year and the prior year are disclosed in note 7.
63 64 Chime Communications plc Annual Report 2006   
Notes to the consolidated financial statements (continued)
43. Events after the balance sheet date
In February 2007 we continued the expansion of our research division by acquiring a 75% stake in Facts International, a fieldwork research business
based in Ashford, Kent from Barbara Lee and Elizabeth Teague. The remaining 25% is held by the new Chairman. The gross assets of Facts at 
31 July 2006 were £1.2 million.
We have today announced the proposed acquisition of Fast Track Sales Limited and its subsidiaries. Fast Track is the UK’s leading sports marketing agency.
The initial consideration is £15 million payable £10 million in cash from within the Group’s facilities and £5 million in Chime shares. Deferred
consideration is payable on the average profits for the three years ended 31 December 2009 and the three years ended 31 December 2012. 
The maximum total consideration (initial and deferred) is £43 million. The transaction (initial and deferred considerations) is based on a multiple of 
7 times average pre-tax profits.
Deferred consideration can be paid in Chime shares or loan notes at Chime’s discretion. Any Chime shares issued to satisfy the deferred consideration
are subject to restrictions on sale.
Reported pre-tax profits (under UK GAAP) for the year to 31 December 2006 were £371,000 and the four main shareholders of Fast Track have
warranted pre-tax profits for the year to 31 December 2007 of £2.5 million. It is expected that the transaction will be earnings enhancing to the Group. 
Gross assets (under UK GAAP) of the Fast Track Group at 31 December 2006 were £6.6 million.
44. Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this
note (details of subsidiaries are included in note 18). Transactions between the Group and its associates are disclosed below. Transactions between the
Company and its subsidiaries and associates are disclosed in the Company’s separate financial statements.
Trading transactions
During the year, Group companies entered into the following transactions with related parties who are not members of the Group:
Amounts Amounts Amounts Amounts
owed by owed to owed by owed to
Sale of Purchase related related Sale of Purchase related related
services of services parties parties services of services parties parties
2006 2006 2006 2006 2005 2005 2005 2005
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Associates
Colour TV 115 – 201 – 168 – 185 –
Killa Communications –3 – – 15 – 1 –
HHCL United –––– –16 – 8
J & J Media –––– 34 – 115 –
Meropa – – 374 – – – 333 –
Rare Publishing 19 29 18 35 ––––
Youthtrends 7––– 131 12 118 –
Sales of goods to related parties were made on an arm’s length basis.
The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received. No provisions have been made for
doubtful debts in respect of the amounts owed by related parties.
As referred to in note 36, on 31 December 2005, the Group disposed of the remaining 51% of its associate HHCL United Limited (formerly HHCL/Red
Cell Advertising Limited) to WPP Group (UK) Limited. 
Remuneration of key management personnel
The remuneration of the directors, who are the key management personnel of the Group, is set out below in aggregate for each of the categories
specified in IAS 24 Related Party Disclosures.
2006 2005
£’000 £’000
Short-term employee benefits 2,454 2,475
Share-based payment 142 45
2,596 2,520 45. Financial Instruments
The Group’s financial instruments comprise cash and various items such as trade debtors and trade creditors that arise directly from its operations. 
The main risks arising from the Group’s financial instruments are interest rate risk, liquidity risk and foreign currency risk. The policy for managing these
risks is reviewed and agreed with the Board.
The Group uses financial instruments to manage its bank borrowings, this is done by the use of foreign exchange rate swaps. The Group does not hold
or issue derivative financial instruments for financial trading purposes but derivatives that qualify for hedge accounting are accounted for as trading
instruments. Derivative financial instruments are initially recognised at fair value at the contract date and continue to be stated at fair value at the
balance sheet date with gains and losses on revaluation being recognised immediately to the income statement. 
Interest rate risk: cash deposits and loan draw downs are held either at variable rates of interest or at rates of interest fixed for periods of no longer
than three months. 
Liquidity risk: on 7 June 2006, the Group agreed to committed facilities of £13 million until March 2009. There is also an uncommitted facility available
of £2 million, which is reviewed on a rolling basis. At 31 December 2006 the Group had net cash of £2,924,000.
Foreign currency risk: the Group has one overseas associate, Meropa Communications (Pty) Limited, which trades in South Africa. At 31 December
2006 the Group had a debtor relating to the partial disposal of its shareholding in Meropa. This is payable in South African Rand and is valued at
£80,842 which is payable within one year. No interest is payable on these loans. The Group had not entered into forward currency transactions.
Fluctuations in the value of the South African Rand against sterling would give rise to foreign exchange differences which would be taken through the
profit and loss account. The Group has three overseas subsidiaries which trade in Europe and America. At 31 December 2006 the net foreign currency
monetary net assets were £1,475,281 (2005 – £792,395) in Europe and £497,493 (2005 – £320,063) in America. The Group uses foreign exchange
swaps to manage its bank borrowings. The fair value of the swap entered into at 31 December 2006 is estimated at £9,108,961 (2005 – £2,962,866).
There was only one swap open over the year end. This amount is based on the market values of equivalent instruments at the balance sheet date. 
Market price risk: the Group’s exposure to market price risk comprises interest rate risk and currency rate risk. The Group regularly monitors these
exposures which, setting aside the interrelationships between such rates and their wider impact on the economy, are not considered to have a
significant impact on the Group. 
Fair values of financial assets and financial liabilities: at 31 December 2006 there was no material difference between the fair value of financial assets
and financial liabilities and their book value. 
All monetary assets and liabilities are denominated in the same currency as the functional currency of the operations involved except where foreign
currency borrowings are used to finance, or provide a hedge against, foreign net investments.
65 66 Chime Communications plc Annual Report 2006   
Independent auditors’ report to the members of 
Chime Communications plc
We have audited the parent company financial
statements of Chime Communications plc 
for the year ended 31 December 2006 which
comprise the Balance Sheet and the related
notes 1 to 14. These parent company financial
statements have been prepared under the
accounting policies set out therein.
We have reported separately on the Group
financial statements of Chime Communications
plc for the year ended 31 December 2006 
and on the information in the Directors’
Remuneration Report that is described as
having been audited. 
This report is made solely to the Company’s
members, as a body, in accordance with
section 235 of the Companies Act 1985. Our
audit work has been undertaken so that we
might state to the Company’s members those
matters we are required to state to them in 
an auditors’ report and for no other purpose. 
To the fullest extent permitted by law, we do 
not accept or assume responsibility to anyone
other than the Company and the Company’s
members as a body, for our audit work, for this
report, or for the opinions we have formed.
Respective responsibilities of directors 
and auditors
The directors’ responsibilities for preparing 
the Annual Report, the Directors’ Remuneration
Report and the parent company 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 parent
company financial statements and the part 
of the Directors’ Remuneration Report to be
audited in accordance with relevant legal and
regulatory requirements and International
Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the
parent company financial statements give a true
and fair view and whether the parent company
financial statements have been properly
prepared in accordance with the Companies
Act 1985. We also report to you whether in our
opinion the Directors’ Report is consistent with
the parent company financial statements. 
In addition we report to you if, in our opinion,
the Company has not kept proper accounting
records, if we have not received all the
information and explanations we require for 
our audit, or if information specified by law
regarding directors’ remuneration and other
transactions is not disclosed.
We read the other information contained in 
the Annual Report and consider whether it is
consistent with the audited parent company
financial statements. We consider the
implications for our report if we become aware
of any apparent misstatements or material
inconsistencies with the parent company
financial statements. Our responsibilities do 
not extend to any further information outside
the Annual Report.
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 parent company financial
statements. It also includes an assessment of
the significant estimates and judgments made
by the directors in the preparation of the parent
company financial statements, and of whether
the accounting policies are appropriate to the
Company’s circumstances, consistently applied
and adequately disclosed.
We planned and performed our audit so as 
to obtain all the information and explanations
which we considered necessary in order to
provide us with sufficient evidence to give
reasonable assurance that the parent company
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 parent
company financial statements.
Opinion
In our opinion:
• 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
Company’s affairs as at 31 December 2006;
• the parent company 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 parent company
financial statements.
Deloitte & Touche LLP
Chartered Accountants and Registered Auditors
London
12 March 2007 Company balance sheet
Year ended 31 December 2006
67
2006 2006 2005 2005
(restated*) (restated*)
Notes £’000 £’000 £’000 £’000
Fixed assets
Investment in subsidiaries 4 84,558 83,915
Current assets
Debtors 6 10,694 9,329
Short-term investments 7 343 1,221
Cash at bank and in hand 5,085 7,565
16,122 18,115
Creditors: amounts falling due within one year 8 (2,455) (2,517)
Net current assets 13,667 15,598
Total assets less current liabilities 98,225 99,513
Creditors: amounts falling due after more than one year 9 (9,396) (12,783)
Net assets 88,829 86,730
Capital and reserves
Share capital 11 12,684 12,654
Share premium account 11 26,594 26,475
Share-based payment reserve 12 803 432
Merger reserve 12 3,780 3,780
Shares to be issued 12 7,337 4,362
Capital reduction reserve 12 32,385 32,385
ESOP reserve 12 (5,968) (6,961)
Retained earnings 12 11,214 13,603
Equity shareholders’ funds 88,829 86,730
*see note 13
The financial statements were approved by the Board of directors and authorised for issue on 12 March 2007. They were signed on its behalf by:
Mark Smith, Director
12 March 2007 68 Chime Communications plc Annual Report 2006   
Notes to the Company financial statements
Year ended 31 December 2006
1. Accounting policies
The financial statements are prepared in accordance with applicable United Kingdom law and accounting standards. The particular accounting policies
adopted are described below. They have all been applied consistently throughout the year and the prior year. 
Accounting convention
The financial statements are prepared under the historical cost convention.
Investments
In the Company’s accounts, investments in subsidiary and associate undertakings are stated at cost less provision for any impairment in value.
Cash flow statement
The Company is exempt from the requirement to prepare a cash flow statement under FRS 1 (Revised) ‘Cash flow statements’ standards being a
wholly owned subsidiary whose ultimate parent company prepares a consolidated cash flow statement.
Deferred consideration
When earnouts are to be settled in cash or shares with a fixed monetary value, the fair value of the consideration is obtained by discounting to present
value the amounts expected to be payable in the future. The resulting interest charge is included within finance costs of deferred consideration.
Share-based payments
The accounting policy in respect of share incentive schemes adopted in the prior year in the Company has been reconsidered in the year ended 
31 December 2006 following the adoption of FRS 20 ‘Share-based payments’ by the Company’s subsidiary undertakings and the recently issued
guidance UITF Abstract 44: (IFRIC Interpretation 11) FRS 20 (IFRS 2) – Group and Treasury Share Transactions. The change in policy has the effect 
of increasing profit and net assets for the Company, however there is no change in the Group balance sheet or income statement for either period.
2. Profit of parent company
As permitted by Section 230 of the Companies Act 1985, the profit and loss account of the parent company is not presented as part of these
accounts. The parent company’s loss for the financial year amounted to £389,000 (2005 – profit £3,626,000).
3. Equity dividends
The equity dividends paid from the Company are disclosed in note 12 of the consolidated financial statements.
4. Investments
Investments in
and loans to Equity
associated interest in
undertakings subsidiaries Total
The Company £’000 £’000 £’000
Cost
At 1 January 2006 (restated*) 638 83,277 83,915
Additions – 229 229
Adjustment to prior year acquisitions – 5,873 5,873
Transfer of investment – (575) (575)
Loans written off (186) – (186)
Shared based payment – 371 371
Reduction of carrying value – (4,911) (4,911)
Foreign exchange (40) – (40)
Disposals (118) – (118)
At 31 December 2006 294 84,264 84,558
*see note 13
5. Subsidiaries, associates and joint ventures
The Company’s principal trading subsidiaries and associated undertakings, which are all incorporated in Great Britain (except where noted) are listed in
note 18 of the consolidated financial statements. 69
6. Debtors
2006 2005
£’000 £’000
Prepayments and accrued income 23 –
Amounts owed by Group undertakings 10,196 6,083
Other debtors 93 114
Amounts due from disposal of businesses 382 3,132
10,694 9,329
Due within one year 10,312 8,947
Due after more than one year 382 382
10,694 9,329
Amounts due from the disposal of businesses relate to Rare Publishing Limited. 
7. Short-term investments
2006 2005
£’000 £’000
Loan note cash deposit 343 1,221
The loan note cash deposit of £0.3 million (2005 – £1.2 million) relates to a cash deposit held on three months notice at Royal Bank of Scotland plc.
The deposit guarantees £0.3 million (2005 – £1.2 million) of the loan note creditors of £0.6 million (2005 – £1.2 million). Interest accruing on the deposit
is payable to the holders of the loan notes less any costs arising (see note 24 of the consolidated financial statements).
8. Creditors: amounts falling due within one year
2006 2005
£’000 £’000
Deferred/contingent consideration 1,100 183
Loan notes 642 1,254
Current taxation 191 365
Other taxation and social security costs 1 4
Other creditors 3 3
Accruals and deferred income 518 708
2,455 2,517
9. Creditors: amounts falling due after more than one year
2006 2005
£’000 £’000
Deferred/contingent consideration 6,468 4,298
Bank loans 2,928 8,485
9,396 12,783
Due in more than one year but not more than two years 5,757 9,122
Due in more than two years but not more than five years 3,639 3,661
9,396 12,783
No interest attaches to the deferred consideration, which is payable in sterling and euros. 70 Chime Communications plc Annual Report 2006   
Notes to the Company financial statements (continued)
10. Borrowings
2006 2005
£’000 £’000
Bank loans 2,928 8,485
Loan notes 642 1,254
3,570 9,739
Due within one year or on demand 642 1,254
Due in more than one year but not more than two years – 8,485
Due in three to five years 2,928 –
3,570 9,739
Maturity analysis
Bank overdraft/loans 
Within one year or on demand – –
Between one and two years – 8,485
Between two and five years 2,928 –
Loan notes
Within one year or on demand 642 1,254
3,570 9,739
11. Share capital and share premium account
The movements on these items are disclosed in notes 28 and 29 to the consolidated financial statements.
12. Statements of movements on reserves
Share-based Capital Profit
payment Merger Shares reduction ESOP and loss
reserve reserve to be issued reserve reserve account
£’000 £’000 £’000 £’000 £’000 £’000
Balance at 1 January 2006 (restated*) 432 3,780 4,362 32,385 (6,961) 13,603
Retained profit for the year ––––– (389)
Adjustment on prior year acquisitions – – 3,086–––
Acquisition of Ledbury Research Limited –– 43–––
Issues as contingent consideration on Baxter Hulme PR
& Marketing Limited – – (154) – – –
Share-based payment charge 371–––––
Buy back of warrants ––––– (800)
(Purchase)/Disposal of own equity shares held in treasury –––– 993 (1,200)
Balance at 31 December 2006 803 3,780 7,337 32,385 (5,968) 11,214
*see note 13 71
13. Restatement of comparatives
The 2005 comparatives have been restated as follows:
Profit
and loss
Investments account
£’000 £’000
At 31 December 2005 as previously disclosed 83,483 13,171
Share-based payment charge allocated to subsidiaries 432 432
Balance at 31 December 2005 as restated 83,915 13,603
14. Financial Instruments
The Company’s financial instruments comprise cash and various items that arise directly from its operations. 
The main risks arising from the Company’s financial instruments are interest rate risk, liquidity risk and foreign currency risk. The policy for managing
these risks is reviewed and agreed with the Board and is set out in note 48 to the consolidated financial statements.
Fair values of financial assets and financial liabilities: at 31 December 2005 there was no material difference between the fair value of financial assets
and financial liabilities and their book value. 
All monetary assets and liabilities are denominated in the same currency as the functional currency of the operations involved except where foreign
currency borrowings are used to finance, or provide a hedge against, foreign net investments.
Disclosure of the interest rates applicable on bank loans and loan notes are given in notes 27 and 29 of the consolidated financial statements. 72 Chime Communications plc Annual Report 2006   
FINANCIAL CALENDAR Wednesday 30 May 2007 Ex-Dividend Date 2006 Final Dividend
Friday 1 June 2007 Record Date 2006 Final Dividend
Wednesday 6 June 2007 AGM – 12 noon at 14 Curzon Street, London W1J 5HN
Friday 22 June 2007 Payment of 2006 Final Dividend
Tuesday 11 September 2007 Announcement of 2007 Interim Results
Wednesday 10 October 2007 Ex-Dividend Date 2007 Interim Dividend
Friday 12 October 2007 Record Date 2007 Interim Dividend
Thursday 8 November 2007 Payment of 2007 Interim Dividend
SHARE PRICE Share price at 31 December 2006 55.5p
High during the year (31 December 2006) 55.5p
Low during the year (2 January 2006) 28.25p
BALANCE ANALYSIS SUMMARY
Number of Number of Balance as at
holdings holdings 31 December
Range individuals Corporate bodies 2006 %
1 – 1,000 156 28 127,978 0.05
1,001 – 10,000 188 45 1,010,391 0.40
10,001 – 100,000 115 73 6,331,240 2.50
100,001 – 1,000,000 34 53 32,752,495 12.91
1,000,001 – 10,000,000 12 23 102,387,990 40.36
10,000,001 – to highest – 5 111,074,594 43.78
Total 505 227 253,684,688
CONTACT DETAILS Chime Communications plc
14 Curzon Street
London W1J 5HN
Tel: 020 7861 8515
www.chime.plc.uk
Lord Bell – Chairman
lord.bell@chime.plc.uk
Christopher Satterthwaite – 
Group Chief Executive
csatterthwaite@chime.plc.uk
Mark Smith – Group Finance Director
msmith@chime.plc.uk
Robert Davison – Company Secretary
rdavison@chime.plc.uk
PROFESSIONAL ADVISERS FINANCIAL ADVISERS AND 
STOCKBROKERS
Numis Securities Limited
London Stock Exchange Building
10 Paternoster Square
London EC4M 9BR
AUDITORS
Deloitte & Touche LLP
Chartered Accountants
London 
SOLICITORS
Slaughter & May
One Bunhill Row
London EC1Y 8YY
BANKERS
Royal Bank of Scotland plc
280 Bishopsgate
London EC2M 4RB
REGISTRARS
Computershare Investor Services plc
Registrar’s Department
PO Box 82
The Pavilions
Bridgwater Road
Bristol
BS99 7NH
web.queries@computershare.co.uk
Tel: 0870 889 3278
www.computershare.com
REGISTERED OFFICE
14 Curzon Street
London W1J 5HN
Registered in England No: 1983857
Information for shareholders  Chime Communications plc Annual Report 2006
Notice of meeting (continued)
Explanation of Resolutions 3 to 5
These resolutions concern the re-election of Directors to the Board.
In accordance with the Financial Reporting Council Code of Corporate
Governance ("the Code") the Board has carried out an evaluation of the
performance of each of the Directors, the Board, its processes and
Committees. The Chairman confirms that, following the performance
evaluation, each of the Directors proposed for re-election continues to
be effective and to demonstrate commitment to the role.
Resolution 3 - Mark Smith - Finance Director
Mark Smith is retiring by rotation and standing for re-election under the
three year-rule. Mark has been a Director of the Company since 1994.
The Board recommends his re-election.
Resolution 4 - Julian Seymour - Senior Non-Executive Director
Under the Code provisions Julian Seymour is due to retire and stand for
re-election under the Code provision governing length of service. Julian
has been a Director since 1994. He is Chairman of the Audit, Nomination
and Remuneration Committees. Julian has worked in the financial
management of businesses in the communications industry throughout
his career and this together with his experience of corporate finance
underpins his valuable contribution to the Board in general and in these
specific areas in particular. The Board recommends his re-election.
Resolution 5 - Catherine Biner Bradley
Catherine Biner Bradley is retiring by rotation and standing for re-election
under the three year rule. Catherine Biner Bradley has been a Director of
the Company since 2001. The Board recommends her re-election.
Explanation of Resolution 8
Resolution 8 - Political donations and political expenditure
Part XA of the Companies Act 1985 (the '1985 Act') contains restrictions
on companies making donations or incurring expenditure in relation to
political organisations. Part XA of the 1985 Act is due to be replaced by
similar provisions in Part 14 of the Companies Act 2006 (the '2006 Act')
once Part 14 comes into force.
The Company does not make donations to political organisations or
incur political expenditure in the ordinary sense and has no intention of
using the authority for this purpose. However, Part XA of the 1985 Act
(and Part 14 of the 2006 Act when it comes into force) defines the term
'organisation' very widely. As a result, it is possible that organisations
may include bodies concerned with matters such as policy review and
law reform, or the representation of the business community or sections
of it, or the representation of other communities or special interest
groups, and it may be in the shareholders' interest for the Company to
support such a group. Consequently, to enable the Company to support
organisations that are not believed to be political, but which might come
within the extended and uncertain scope of the above provisions, the
Company is seeking authority under this resolution to allow the Company
or its subsidiaries to fund donations and/or incur expenditure up to a limit
of £25,000 per annum. This authority is sought for the full period of four
years as permitted under both the 1985 Act and the 2006 Act.
It is likely that Part XA of the 1985 Act will be replaced by Part 14 of the
2006 Act during the period of the authority, although the timing of this
is not yet confirmed. Consequently, the resolution has been drafted
to request the authority under Part XA of the 1985 Act (as set out in
paragraph (a) of the resolution) and under Part 14 of the 2006 Act (as
set out in paragraph (b)), as and when either of these relevant provisions
affects the companies. The Company believes that it is prudent to take
this combined approach to the resolution to ensure that the authority can
continue for the full four-year period, despite the change in legislation.
The terms of the resolution, including the monetary thresholds,
necessarily reflect the differing technical requirements of Part XA of the
1985 Act and Part 14 of the 2006 Act. In particular, Part 14 provides for
a new requirement that the authority should specify the maximum amount
which each of the Company and its subsidiaries can spend on each
category of political donations or expenditure during the four-year period.
To ensure sufficient flexibility, the resolution provides that this maximum
amount is £100,000 for each Company, in respect of each category, over
the whole period of the authority until its expiration in 2011. However, as
stated in the resolution, the amount of expenditure by the Company and
its subsidiaries under the authority (whether granted under paragraph (a)
or (b)) is also subject to a limit of £25,000 in total in any year.
Explanation of Resolutions 9 to 11
Resolution 9 - Renewal of Board's authority to allot securities
This resolution will allow the Board to allot securities in the Company.
The Board's authority will last until the conclusion of the next Annual
General Meeting.
The maximum aggregate nominal amount of securities that can be
allotted under this authority is £4,234,122 which is equivalent to one third
of the issued ordinary share capital of the Company as at 25 April 2007.
The Board has no current intention of exercising this authority other than
in the exercise of share options as described on pages 56 of this Report
and Accounts.
Resolution 10 - Disapplication of pre-emption rights
The effect of this resolution is to allow the Board to allot shares in the
Company for cash other than to existing shareholders in proportion to
their holdings. Allotments under this authority may be up to a maximum
aggregate nominal amount of £635,118 which is equivalent to
approximately 5% of the issued ordinary share capital of the Company
as at 25 April 2007. This authority will last until the conclusion of the
next Annual General Meeting.
Both Resolutions 9 and 10 are consistent with the recommendations of
the Investment Committees of the National Association of Pension Funds
and the Association of British Insurers.
Resolution 11 - Purchase of own shares
This resolution will allow the Company to make market purchases
of up to 25,404,731 of its own ordinary shares (10% of the issued
ordinary share capital of the Company as at 25 April 2007) at prices
not less than 5p per ordinary share and not more than 5% above the
average of the middle market quotations as derived from the London
Stock Exchange Daily Official List for the five business days before
each purchase. The Board has no current intention of exercising this
authority and will only purchase shares if the effect will be to increase
earnings per share and such purchase is in the best interests of
shareholders as a whole.
Any shares purchased in this way will be cancelled and the number
of shares in issue will be reduced. This authority will last until
the conclusion of the next Annual General Meeting or, if earlier,
5 September 2008.
As at 25 April 2007 the total number of ordinary shares in the Company in
respect of which options were outstanding was 9,933,525, representing
3.9% of the Company's issued ordinary share capital as at that date.
If the authority set out in this resolution were exercised in full then the
outstanding options would represent 4.3% of the Company's issued
ordinary share capital as at 25 April 2007.
No purchases were made pursuant to the equivalent authority granted
to the Board at the 2006 Annual General Meeting.
Notes
1. Directors and their interests
There was no change in the interests of the directors in the share
capital of the Company between 12 March 2007 and 25 April 2007.
The interests of the directors as at 12 March 2007 are set out on
page 29 of this Report and Accounts.
2. Substantial Interests
At 25 April 2007 the following interests, other than those of the Directors
set out on page 29, in 3% or more of the issued share capital had beer
notified to the Company.
Number of
ordinary shares
% of ordinary
share carital
WPP North Atlantic Limited 55,183,593 21.74
Aberforth Partners 22,820,732 8.99
Barclays Global Investors 15,272,610 6.01
Fidelity Investments Limited 14,500,000 5.71
JP Morgan Asset Management 13,577,348 5.35
Henderson Global Investors Limited 9,349,089 3.68 CHIME COMMUNICATIONS PLC
Form of Proxy for use by holders of ordinary shares at the
Annual General Meeting of the Company convened for 6 June 2007
I/We
(FULL NAME(S) OF SHAREHOLDER(S) IN BLOCK CAPITALS)
of
(ADDRESS)
being (a) member(s) of the above company hereby appoint the Chairman of the meeting, (see note 1) failing whom
(NAME AND ADDRESS OF PROXY IN BLOCK CAPITALS - SHAREHOLDER TO INITIAL THIS ENTRY)
as my/our proxy to attend, and, on a poll, vote for me/us and on my/our behalf at the Annual General Meeting of the Company to
be held at 14 Curzon Street, London W1J 5HN on 6 June 2007 at 12 Noon and at any adjournment thereof.
The Company has introduced 'vote withheld' in order to comply with the revised UK Combined Code. Please note a 'vote withheld'
is not a vote under English Law and will not be calculated in the calculation of the proportion of votes 'for' or 'against' a resolution.
I/We wish my/our proxy to vote as indicated below in respect of the resolutions to be proposed at the meeting.
Please indicate which way you wish your proxy to vote by ticking the appropriate box alongside each resolution. (see note 2)
Resolutions
For Against Vote
Withheld
1. To receive and adopt the Directors' Report and Accounts for the year ended
31 December 2006 and the Report of the Auditors thereon.
2. To approve the directors' remuneration report for the year ended 31 December 2006.
3. To re-elect Mark Smith as a Director of the Company.
4. To re-elect Julian Seymour as a Director.
5. To re-elect Catherine Biner Bradley as a Director.
6. To declare a final dividend for the year ended 31 December 2006.
7. To re-appoint Deloitte & Touche LLP as auditors.
8. To give limited authority to make political donations and incur political expenditure.
9. To authorise the Board to allot relevant securities.
10. To disapply certain statutory pre-emption rights.
11. To authorise the Board to purchase the Company's shares.
Signature (See note 3) Date 2007
Notes:
1. If you wish to appoint as your proxy someone other than the Chairman of the meeting, cross out the words `the Chairman of the meeting' and enter the full name
and address of your proxy in the space provided. The name should be initialled. A proxy need not be a member of the Company but must attend the meeting in
person to represent you.
2. In the absence of instructions, the person appointed proxy may vote or abstain from voting as he or she thinks fit on the specified resolutions and, unless instructed
otherwise, the person appointed proxy may also vote or abstain from voting as he or she thinks fit on any other business (including amendments to resolutions) which
may properly come before the meeting.
3. This form must be signed and dated by the shareholder or his/her attorney duly authorised in writing. If the shareholder is a company, it may execute under its
common seal, by the signature of a director and its secretary or two directors or other authorised signatories in the name of the company, or by the signature of a
duly authorised officer or attorney. In the case of joint holding, any one holder may sign this form. The vote of the senior joint holderwho tenders a vote, whether in
person or by proxy, will be accepted to the exclusion of the votes of the other joint holders and for this purpose seniority will be determined by the order in which the
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than 48 hours before the meeting, or any adjournment thereof. Chime and the environment
Like every other business, we use
resources and produce waste, but in 
terms of actual environmental impact, 
our emissions are not that significant.
Where we can and do have an impact is
through the messages we give about
ourselves, and through our work helping
clients to communicate their values and
reputation. We believe that everyone has 
a responsibility for addressing climate
change; as a communications group, we
have a particular responsibility in enabling
environmental messages to be heard. 
The starting point for that, of course, is
with our own actions.
Becoming carbon neutral
Our start point has been in improving our
environmental performance from within our
own staff. To deliver carbon neutrality we
have established a team of volunteers,
‘Climate Change Champions’, each
representing their brands within the Group.
It is this team who have driven the process
of becoming carbon neutral from day one.
2006 was about collecting our carbon
footprint data: our approach to this was 
to be accurate (the Edinburgh Centre for
Carbon Management gave us a ‘very 
good’ rating for the methods used) and
comprehensive (e.g. we have included 
our staff’s total emissions resulting 
from commuting).
We became carbon neutral on 1 January
2007. In March we announced our carbon
reduction target of 30% and we are
actively promoting improved practices and
behaviour throughout the Group to deliver
on this promise within 12 months. This will
mean changes and those changes cannot
be rushed, but we are reviewing the
products we use, the methods we
recommend and the suppliers we engage
with. We will not simply change our supply
partners to achieve this goal. We will
encourage our existing suppliers to
improve their own environmental practice
and join us on this journey. This will have
greater value to the wider community.
Carbon offsetting
Our emissions for 2006 were 3,100 tonnes
of CO2. However, in assessing our carbon
offset requirements we have factored 
in both our organic growth and growth
from acquisitions. We therefore offset 
4,200 tonnes of CO2. We believe this
commitment will be more than sufficient 
to remain Carbon Neutral throughout the
year including our growth targets.
Offset projects
In order to engage our staff fully we polled
our entire workforce in order to select
appropriate projects for our carbon offset. 
As a result Chime has invested in three
projects:
1. A Forestry Project in the UK,
2. A Wind Power Generation Project in
India and
3. A Rural Solar Electrification Project in
India and Sri Lanka.
Our UK forestry project reflects our primary
focus as a UK based business, while our
projects in India help one of the fastest
growing economies to reduce its carbon
emissions. Planting trees helps take carbon
out of the atmosphere whilst investing 
in wind power helps to reduce carbon
emissions in the first place. In addition, 
the solar power projects are helping 
local communities through employment,
education and raising standards of living
and health.
Emissions reductions
Over the next year we will work to build 
on the progress we have made and 
work towards the further integration of
environmental considerations throughout
our business operations and relationships. 
Our emissions reduction campaign (under
the banner ‘Turn it off’) has already raised
awareness, engaged staff and produced
some innovative ideas on changing our
working practices and delivering on our
promises.
We will report further on our progress with
our interim results later in the year.
For further information on our carbon
neutral status and for our corporate
responsibility report visit
www.chime.plc.uk
Christopher Satterthwaite
Group Chief Executive
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is suitable for archival storage and qualifies for the Nordic Swan environmental label. Chime Communications plc
14 Curzon Street, London W1J 5HN
Tel: 020 7861 8515
E-mail: enquiries@chime.plc.uk
www.chime.plc.uk