debt Matters
Annual Report & Accounts 2006 Financial highlights
PAGE 2   |   Financial highlights
Head office - Mansell House, Bolton, Lancashire
Turnover (£m)
£7.8m
+ 212%
2.5
2006
7.8
Profit before tax (£m)
£2.8m
+ 460%
2005
0.5
2006
2.8
Net assets employed (£m)
£4.7m
2005
2006 2005 2006 2005
0.3
4.7
Basic earnings per share (pence)
8.36p
+ 412%
1.85
8.36 Contents
Contents |   PAGE 3
2 Financial highlights
4 Chairman's statement
5 Chief executive's review
8 Financial review
9 Directors
10 Directors' report
14 Corporate governance
16 Report of the remuneration committee
17 Independent auditor’s report
18 Group profit and loss account
19 Group balance sheet
20 Company balance sheet
21 Group cash flow statement
22 Accounting policies
24 Notes to the financial statements
37 Officers and professional advisers Chairman’s statement
PAGE 4|   Chairman’s statement
The company
It has been an exceptionally busy year for the Company,
which floated on AIM in June 2005 successfully raising 
£3 million in a placing which was twice oversubscribed. 
The funds raised have enabled the Group to achieve
significant levels of organic growth during the period under
review as it positions itself as a leading provider of IVAs to
over indebted consumers. 
Strategy 
Significant opportunities exist in our target market to grow
the business organically. This is being underpinned by the
development of third party IVA referral relationships as well
as select acquisitions such as Unique Business Finance Ltd
which add complementary services.
This strategy will continue in the coming year as
Debtmatters consolidates its position as one of the leading
consumer IVA providers and continues to pursue value
adding acquisition opportunities.
Market
The market for our IVA services continues to grow.
Consumer debt in the UK is now running at almost £1.2
trillion, the number of IVAs registered with the DTI doubled
in 2005 and, based on figures available to date for 2006, is
expected to double again. Debtmatters has invested in new
premises, people and processes to ensure we have the
capacity to capitalise on this growth in our core market.
Management and staff
The expansion of our business has only been achieved
through the hard work and dedication of my fellow directors
as well as all our staff. I would like to take this opportunity
to thank them all for their commitment to date and their
ongoing support in the current year. 
I would also like to welcome Mark Prideaux to the Board,
who was recently appointed Group Finance Director
replacing Christine Jarvis who stood down in April 2006.
Together with the increase in the number of our insolvency
practitioners we now have the management and
infrastructure in place to take full advantage of the
significant opportunities that exist for our business.
Outlook
Debtmatters has delivered impressive growth during the
period under review and is well positioned to continue its
momentum. It is the Board's intention to employ additional
insolvency practitioners to underpin the strength of our core
business as well as to develop ancillary services through
select acquisitions. Significant opportunities exist for the
Group and I look forward to updating shareholders with
further progress in due course.
Noel Guilford BA FCA MSI
Non Executive Chairman
Noel Guilford
Non Executive Chairman Chief executive’s review
Chief executive’s review |   PAGE 5
A strong performance
I am pleased to report that Debtmatters has had an
excellent year in which it has doubled its share of the IVA
market to 14% in the first quarter of 2006 while delivering
impressive profit and growth figures.
The Board is focused on accelerating the Company's
growth in the year ahead as we continue to provide
indebted consumers with effective solutions to their debt
problems. Total numbers of IVAs registered with the DTI in
the year ending 2005 exceeded 20,000 up from a total of
10,752 in the year ending 2004. Based on current monthly
run rates there are expected to be in excess of 40,000 IVAs
in the year ending 2006. 
Debtmatters is poised to take full advantage of this growing
market by capitalising on its cost effective marketing
strategies, industry leading IVA processing times and quality
service levels.
Strengthened management 
team and support
I am also pleased to welcome Mark Prideaux to the role of
Group Finance Director. Mark, a Chartered Accountant and
licensed Insolvency Practitioner, has been with Debtmatters
since December 2003 and has been on the Company's
Operations Board since its flotation. He has significant
knowledge of Debtmatters' core IVA business as well as an
in depth knowledge of the wider insolvency market place.
This experience will play a key role as Debtmatters
continues to grow its core IVA business as well as
assessing the opportunities to develop ancillary services. 
In addition, David Rankin was appointed to the Operations
Board as Insolvency Director. David, an experienced
Insolvency Practitioner, has been with the Company since
August 2005 and has played a key role in developing
Debtmatters' systems and processes to support its
significant growth post flotation.
I believe that we now have the management team as well
as supporting functions in place to support our growth
plans going forward. 
Business growth
Building on our successes to date, the Board has made 
a number of strategic investments during the period under
Ges Ratcliffe
Chief Executive Chief executive’s review
PAGE 6|   Chief executive’s review
review to support its future development. This has 
included the acquisition of Unique Business Finance Limited
(“Unique”), which has operated from Preston since 2003
and undertakes all aspects of corporate insolvency and
bankruptcy work. This acquisition has enabled 
Debtmatters to undertake other types of complementary
insolvency work.
Debtmatters also entered into an agreement with an
established money advice organisation for the exclusive
referral of IVAs to Debtmatters. This business, which has a
UK wide client base is currently generating significant
numbers of referrals per month and represents a
partnership that Debtmatters is actively seeking to grow in
the short to medium term. The Board is also looking at
suitable acquisitions which will complement the Group's
business model and broaden the range of services offered.
Marketing strategy
The bulk of Debtmatters’ business comes from our
marketing activities. Our advertising strategy is targeted and
understands the consumer in debt and is therefore highly
effective. This, coupled with detailed analysis of response
rates and aggressive buying, gives us the ability to further
scale our operation, taking advantage of the significant
opportunity for growth in our sector.
As advertising spend has increased so has brand
awareness, improving consumer trust and acceptance of
our proposition. Greater spend through the new financial
year will further strengthen our brand name.
Throughout the past year Debtmatters has been a leader in
the sector in terms of cost per case acquired. Investment in
market research and innovative new advertisements will
enable us to maintain this situation.                
Increasing capacity
In order to support the growth of the business, we have
relocated our operations to a new, modern office at
Middlebrook in Bolton which has significantly increased our
capacity. We also have the capability to scale up our
operation further through securing flexible lease terms with
our landlord.
In addition, we have invested in our networks, telephony
and software systems in order to increase our long term IT
capacity. All of these investments support our growth as
Debtmatters establishes itself as a leading supplier of IVAs
in the UK. 
Key performance indicators
In a year of rapid expansion we are proud to have improved
or maintained many of our key performance indicators. 
At an operational level we enjoy one of the industry's 
fastest turnaround times for cases. This speed and
efficiency impacts favourably on both our conversion rates
and cash flow.
In addition, we are working towards ISO 9001 accreditation
in July. This is the internationally recognised standard for an
organisation's internal Quality Management and we
anticipate that it will enable us to better meet our
customers' needs whilst improving operational efficiency.
Our business at a glance
Debtmatters is a leading solutions provider to consumers
with significant debt problems Chief executive’s review
Chief executive’s review |   PAGE 7
Staff commitment
As Investors in People we are committed to the
professional and personal development of our team. 
Our operations board directors and managers work closely
with their teams to ensure that morale is strong and the
Company has many initiatives which involve staff in the
Company ethos on a personal and professional level.
We enjoy exceptionally low levels of staff turnover and have
been able to absorb a significant increase in numbers
without losing our strong sense of team spirit and identity.
We employ people who are loyal, problem solving and
innovative and as a result make a valuable contribution to
our business.  I would like to thank them all for their
commitment and hard work to date.  
Outlook
Debtmatters continues to deliver strong growth as 
it addresses the significant opportunities that exist within
the IVA market place. We have an efficient business 
model in place, which continues to deliver industry
leading turnaround times and a very effective cost of 
case acquisition. 
In addition to significant organic growth, the Board is
profiling a number of possible acquisitions which would
provide an immediate contribution to the group in terms of
earnings.This strategy, which is part of our longer term
outlook will complement the rapid growth of our core IVA
business and I Iook forward to updating shareholders in
due course.
Ges Ratcliffe
Chief Executive
Mission statement
Our mission is to provide the best possible advice to over
indebted consumers in a sympathetic manner, leading to
permanent solutions to their financial problems,
implemented quickly and effectively.
IVA
An IVA is a legally binding agreement between a debtor
and his/her creditors. Interest and charges are frozen and
affordable monthly payments are made over a period of 
typically five years.
At the end of the period any balances remaining are
written off by the creditors and the individual becomes 
free from debt. Financial review
PAGE 8|   Financial review
Mark Prideaux
Group Finance Director
Trading highlights
Debtmatters has had a very successful maiden year as a
publicly quoted company. Since flotation on AIM in June
2005, at which time the business raised £3m before costs,
the Group has gone from strength to strength. We have
invested in operations, systems and people in order to
support our ongoing growth while at the same time
strengthening our gross margins to 58% up from 53% in
2005. In the period since flotation our staff numbers have
increased from 49 to 155 with our IVA processing
capabilities significantly enhanced by the appointment of a
further 3 Insolvency Practitioners.
Turnover has increased from £2.5m to £7.8m over the
period, an increase of 212% and Profit Before Tax has risen
to £2.8m (£500k, FY 05), an increase of 460%, far in
excess of market forecast expectations. This has been
achieved principally by the growth of the core domestic IVA
business. Approved case numbers have increased
throughout the period. In March 2006, 554 IVA cases were
approved which represents a 329% increase on March
2005 figures. 
The Group ended the financial year with a strong balance
sheet with Net Assets of £4.7m, compared to £0.3m at 31
March 2005. The Group remains focused on pursuing its
strategy of growing the top line while re-investing in the long
term development of the Group.
Trading highlights
In line with this strategy, the acquisition of Unique Business
Finance in October 2005 has broadened the scope of the
insolvency services provided by the Group. In the five
month period since acquisition Unique contributed circa
£450,000 to Group turnover and additional pre tax profit of
£207,873. 
Our marketing strategy has been strengthened by television
advertising which commenced in January 2006. This has
had a significant impact on IVA activity levels while at the
same time reducing overall costs of case acquisition. 
In conclusion, our core market continues to grow. We now
have the infrastructure and support in place to service this
demand and expect strong growth going forward.
Mark Prideaux
Group Finance Director Directors
Directors |   PAGE 9
left to right: Mark Prideaux - Finance Director, David Rankin - Director of Insolvency, Michael Shirley - Operations Director,
James Dean - Marketing Director, Noel Guilford - Chairman, Ges Ratcliffe - Chief Executive 
The expansion of our business and the very pleasing increase in
our share price since flotation have only been achieved through
the hard work and dedication of my fellow directors”
Noel Guilford, Chairman
“ Directors’ report
The directors submit their report and financial statements 
of Debtmatters Group Plc for the period ended 31 March
2006.
Principal activities
The Company was incorporated on 4 February 2005 under
the name of Hallco 1151 Limited. 
On 9 June 2005 the Company changed its name to
Debtmatters Group plc and re-registered as a public
company. The Company subsequently extended its
accounting reference date to 31 March.
The principal activity of the Group during the period was the
provision of debt solutions through the implementation of
voluntary arrangements to individuals. 
Review of the business
The Group's results are set out in the Group Profit and Loss
Account on page 18 and are explained in the Financial
review on page 8. A full review of the Group's activities and
future developments is incorporated in the Chairman's and
Chief Executive's statements.
Results and dividends
The Group's trading profit for the year, after taxation, 
was £1,971,086. The directors do not recommend a 
final dividend.
Share issues
The Company's original authorised share capital on
incorporation comprised 1,000 £1 ordinary shares of which
2 were issued.
On 8 June 2005 the authorised share capital was increased
from £1,000 to £3,520,000 by the creation of 3,519,000
ordinary shares of £1 each. Each of the ordinary shares of
£1 each, both in issue and unissued, were subdivided into
10 shares of 10p each.
On 8 June 2005 the Company acquired the entire share
capital of Debtmatters Limited and Debtmatters
Commercial Limited, satisfied by the issue of 19,999,980
ordinary shares of 10p each respectively each credited as
fully paid.
On 22 June 2005, following admission to the Alternative
Investment Market of the London Stock Exchange, a further
4,615,385 ordinary shares of 10p each were issued at a
price of 65p per ordinary share.
Directors
The directors who served the Company during the period
were as follows:
G N Ratcliffe (appointed 6 June 2005)
N D Guilford (appointed 6 June 2005)
C K Jarvis (appointed 6 June 2005 
and resigned 20 April 2006)
M Prideaux (appointed 20 April 2006)
H L Directors Limited (appointed 4 February 2005
and resigned 6 June 2005)
PAGE 10 |   Directors’ report Directors’ report
Directors’ report |   PAGE 11
Directors
At 31 March 2006, the directors had the following beneficial interests in the Company's shares:
At At 
31 March 5 February 
Class of share 2006 2005
No No
G N Ratcliffe Ordinary shares of 10p/(£1) each 15,384,615 2
N D Guilford Ordinary shares of 10p each 39,230 -
C K Jarvis Ordinary shares of 10p each 23,075 -
Directors’ share options
At 31 March 2006 the directors held the following options over the shares of the Company.
At At 
5 February Granted 31 March Date 
2005 in period 2006 exercisable Expiry date 
C K Jarvis - 153,846 153,846 1 July 2008 1 July 2015 
C K Jarvis - 230,769 230,769 1 July 2010 1 July 2015
The share options are exercisable at 65p per share.
The market price of shares at 31 March 2006 was 265p and the range during the period was 65p to 265p.
Substantial shareholders
As at 8 June 2006, other than the directors, substantial shareholdings were held by:
Number of 
% Ordinary Shares
holding No
Barclayshare Nominees Limited 3.20% 787,701
Chase Nominees Limited 5.27% 1,298,420
No other person has notified an interest in the ordinary share capital of the Company. Directors’ report
PAGE 12 |   Directors’ report
Share capital
Details of the movement in share capital are shown in 
note 18. 
Creditor payment policy
It is Group policy to agree and clearly communicate 
the terms of payment as part of the commercial
arrangements negotiated with suppliers and then to pay
according to those terms based upon the timely receipt of
an accurate invoice.
At 31 March 2006 the Group had an average of 15 days
purchases outstanding in trade creditors.
Directors responsibilities for 
the preparation of the financial
statements
The directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and United Kingdom Generally Accepted
Accounting Practice. Company law requires the directors to
prepare financial statements for each financial year which
give a true and fair view of the state of affairs of the
Company and of the Group and of the profit or loss of the
Group for that period. In preparing those financial
statements, the directors are required to:
a. select suitable accounting policies and then apply them
consistently;
b. make judgements and estimates that are reasonable
and prudent;
c. state whether applicable accounting standards have
been followed, subject to any material departures
disclosed and explained in the financial statements; and
d. prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Group will continue in business.
The directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any
time the financial position of the Group and to enable them
to ensure that the financial statements comply with the
requirements of the Companies Act 1985. They are also
responsible for safeguarding the assets of the Group and
hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The directors are responsible for ensuring that the directors'
report and other information included in the annual report 
is prepared in accordance with company law in the United
Kingdom. They are also responsible for ensuring that 
the annual report includes information required by the 
AIM Rules.
The directors are also responsible for the maintenance and
integrity of the Debtmatters Group plc website. The work
carried out by the auditors does not involve consideration of
these matters and, accordingly, the auditors accept no
responsibility for any changes that may have occurred to
the information contained in the financial statements since
they were initially presented on the website.
Legislation in the United Kingdom governing the preparation
and dissemination of the financial statements and other
information included in annual reports may differ from
legislation in other jurisdictions.
Employee involvement
The Group recognises and seeks to encourage the
involvement of its employees, with the aim being 
the recruitment, motivation and retention of quality
employees throughout the Group. An approved share
option scheme is in place operated within the Enterprise
Management Incentive Scheme, as well as an unapproved
option scheme.
The Group's employment policies, including the
commitment to equal opportunity, are designed to attract,
retain and motivate employees regardless of sex, race,
religion or disability. Equality of treatment includes full and
fair assessment of applications and extends to training and
continuing career development. Directors’ report
Directors’ report |   PAGE 13
The Group is committed to ensuring and communicating
the requirements for a safe and healthy working
environment for all employees, consistent with health 
and safety legislation and, wherever practicable, gives 
full consideration to applications for employment from
disabled persons.
Charitable and political
contributions
The Group made charitable donations of £1,199 in the
period to 31 March 2006 (2005: Nil). No political donations
were made in either period.
Awareness of relevant 
audit information
At the date of approval, so far as each of the directors’ is
concerned, there is no relevant audit information of which
the auditors are unaware, and they have taken all the
necessary steps to make themselves aware of any relevant
audit information and to establish that the auditors are
aware of that information.
Annual general meeting
The notice convening the Annual General Meeting to be
held at 11am on 19th July 2006 at De Vere Whites Hotel,
De Havilland Way, Bolton, Greater Manchester, BL6 6SF 
is set out within the letter and proxy from accompanying
this report.
Auditors
During the period Baker Tilly, Chartered Accountants’ were
appointed as the first auditors of the Company. A resolution
to re-appoint Baker Tilly as the Company's auditor will be
proposed at the forthcoming Annual General Meeting.
By order of the Board on 14 June 2006
G N Ratcliffe
Chief Executive  Corporate governance
PAGE 14 |  Corporate governance
Principles of corporate
governance
The Company's board of directors appreciates the value of
good corporate governance not only in the areas of
accountability and risk management but also as a positive
contribution to business prosperity. It believes that
corporate governance involves more than a simple “box
ticking” approach to establish whether a company has met
the requirements of a number of specific rules and
regulations. Rather the issue is one of applying corporate
governance principles (including those set out in the
Corporate Governance Guidelines for AIM companies
published by the Quoted Companies' Alliance in July 2005)
in a sensible and pragmatic fashion having regard to the
individual circumstances of the Group's business. The key
objective is to enhance and protect shareholder value. 
Board structure 
The Board is responsible to shareholders for the proper
management of the Group. A statement of directors'
responsibilities in respect of the accounts is set out within
the Director’s Report.
The non-executive director has a particular responsibility 
to ensure that the strategies proposed by the executive
directors are fully considered. The non-executive director 
is considered by the Board to be independent of
management and free of any relationship which could
materially interfere with the exercise of his independent
judgement. He receives a fixed fee for his services. 
To enable the board to discharge its duties, all directors
have full and timely access to all relevant information and
there is a procedure for all directors, in furtherance of their
duties, to take independent professional advice, if
necessary, at the expense of the Group. The board has a
formal schedule of matters reserved to it and meets
monthly. It is responsible for overall Group strategy,
approval of major capital expenditure projects and
consideration of significant financing matters. Both the
executive and non executive directors have attended all
meetings which they were eligible to attend during the
period. 
The following committees, which have written terms of
reference, deal with specific aspects of the Group's
affairs:
• the remuneration committee is responsible for making
recommendations to the Board on the Company's
framework of executive remuneration and its cost. 
The committee determines the contract terms,
remuneration and other benefits for each of the
executive directors, including performance related
bonus schemes, pension rights and compensation
payments. The Board itself determines the remuneration
of the non-executive directors. The committee
comprises the non-executive chairman Mr N Guilford.
The report on directors' remuneration is set out on 
page 16. 
• the audit committee comprises the non-executive
chairman Mr N Guilford and the finance director 
Mr M Prideaux. Its prime tasks are to review the scope
of external audit, to receive regular reports from Baker
Tilly, and to review the half-yearly and annual accounts
before they are presented to the Board, focusing in
particular on accounting policies and areas of
management judgement and estimation. 
The committee is responsible for monitoring the 
controls which are in force to ensure the integrity of 
the information reported to the shareholders. 
The committee acts as a forum for discussion of internal
control issues and contributes to the Board's review of
the effectiveness of the Group's internal control and risk
management systems and processes. It advises the
board on the appointment of external auditors and on
their remuneration for both audit and non-audit work,
and discusses the nature and scope of the audit with
the external auditors. It reviews and monitors the
independence of the auditors especially with regard to
non-audit work. The audit committee has met twice
during the year to consider the reports of the auditors
immediately before the submission of the annual and
interim financial statements to the board.
No formal nomination committee exists in view of the stage
of growth of the Group. Instead, appointments to the Board
are considered by the Chief Executive and other executive
directors and discussed with the non executive director.
Appointments are made after an evaluation of the skills,
knowledge and expertise required to ensure that the Board
as a whole has the ability to ensure that the Group can
continue to compete effectively in its market place.  Corporate governance
Corporate governance |   PAGE 15
Internal control 
The directors are responsible for the Group's system of
internal control and reviewing its effectiveness. The Board
has designed the Group's system of internal control in order
to provide the directors with reasonable assurance that its
assets are safeguarded, that transactions are authorised
and properly recorded and that material errors and
irregularities are either prevented or would be detected
within a timely period. However, no system of internal
control can eliminate the risk of failure to achieve business
objectives or provide absolute assurance against material
misstatement or loss. 
The key elements of the control system in operation are:
• the Board meets regularly with a formal schedule of
matters reserved to it for decision and has put in place
an organisational structure with clear lines of
responsibility defined and with appropriate delegation of
authority; and
• there are procedures for planning, approval and
monitoring of capital expenditure and information
systems for monitoring the Group's financial
performance against approved budgets and forecasts; 
The process adopted by the Group accords with the
guidance contained in the document “Internal Control
Guidance for directors on the Combined Code” issued by
the ICAEW.
The audit committee receives reports from the external
auditors on a regular basis and from executive directors of
the Group. During the year, the audit committee has
reviewed the effectiveness of the system of internal control
as described above. The Board receives periodic reports
from all committees.
There are no significant issues disclosed in the report and
financial statements for the period ended 31 March 2006
and up to the date of approval of the report and financial
statements that have required the Board to deal with any
related material internal control issues.
The Board has considered whether the Group's internal
controls processes would be significantly enhanced by an
internal audit function and has taken the view that at the
Group's current stage of development, this is not required.
The Board will continue to review this matter each year.
Relations with shareholders 
The Group values its dialogue with both institutional and
private investors. Effective two-way communication with
fund managers, institutional investors and analysts is
actively pursued and this encompasses issues such as
performance, policy and strategy. During the year the
directors have had meetings with analysts and institutions
and will continue to do so on a regular basis. 
There is also an opportunity, at the Company's Annual
General Meeting for individual shareholders to raise general
business matters with the full Board and notice of the
Company's Annual General Meeting is circulated to all
shareholders at least 21 days before such meeting. 
The Chairman of the audit and remuneration committees
will be available at the Annual General Meeting to answer
questions.
The Annual Report is to be published on the Company's
website, which also includes other announcements made
during the year.
Going concern 
The directors confirm that they are satisfied that the
Company and Group have adequate resources to continue
in business for the foreseeable future. For this reason, they
continue to adopt the going concern basis in preparing the
financial statements. PAGE 16 |   Report of the remuneration committee
Report of the remuneration committee
Remuneration policy for executive directors
The basic annual salary payable to each executive director is as set out below and is to be reviewed annually (without any
obligation to increase the same). In addition, performance related bonuses and other benefits are provided, as shown. 
Basic
Salary Fees Benefits Bonuses Total
£££££
G N Ratcliffe 150,000 - 22,808 - 172,808
C K Jarvis 66,246 - 7,968 - 74,214
N D Guilford - 22,500 - - 22,500
216,246 22,500 30,776 - 269,522
During the year the Group paid management charges of £45,000 to G N Ratcliffe in respect of his services for the period prior
to the acquisition by the Company of Debtmatters Limited.
Share options
Details of directors' interests in share options can be found in the directors' report on page 11.
Incentive schemes
The Company has granted options under the EMI scheme to selected key employees. The eligible employees or directors must
be an employee of the Group, and not have a material interest in the Company or the Group. The individual participation limits
held by an employee will be £100,000. The exercise price per ordinary share payable will be the higher of the market value of
the shares at the date of grant agreed by the Inland Revenue and the nominal value of the share. An option will not normally be
exercisable until three years have lapsed since its grant and subsisting options will lapse ten years after the grant. 
As at 31 March 2006 options over 1,660,202 ordinary shares granted under the EMI scheme remained unexercised.
Service contracts
Each of the executive directors has entered into a service agreement with the Company. The service agreements are terminable
on not less than 6 months notice by either party to the others at any time. The service agreements contain provisions for early
termination, inter alia, in the event of a breach by the director in question. 
The non-executive director has entered into an engagement letter with the Company. The engagement letter is terminable on
not less than 6 months notice by either party to the others or where the director is not re-elected at an annual general meeting.
The engagement letter contains provisions for early termination, inter alia, in the event of a breach by the director in question. Independent auditor’s report
Independent auditor’s report |   PAGE 17
We have audited the financial statements which comprise
the Group Profit and Loss Account, the Group Balance
Sheet, the Company Balance Sheet, the Group Cash Flow
Statement, and the related notes. 
This report is made solely to the Company's members, as a
body, in accordance with section 235 of the Companies Act
1985. Our audit work has been undertaken so that we
might state to the Company's members those matters we
are required to state to them in an auditors' report and for
no other purpose. To the fullest extent permitted by law, we
do not accept or assume responsibility to anyone other
than the Company and the Company's members as a
body, for our audit work, for this report, or for the opinions
we have formed.
Respective responsibilities of
directors and auditors
The directors' responsibilities for preparing the Annual
Report and the financial statements in accordance with
applicable law and United Kingdom Accounting Standards
(United Kingdom Generally Accepted Accounting Practice)
are set out in the Statement of Directors' Responsibilities.
Our responsibility is to audit the financial statements in
accordance with relevant legal and regulatory requirements
and International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the financial
statements give a true and fair view and are properly
prepared in accordance with the Companies Act 1985 and
whether the information given in the Directors' Report is
consistent with the financial statements. We also report to
you if, in our opinion, the Company has not kept proper
accounting records, if we have not received all the
information and explanations we require for our audit, or 
if information specified by law regarding directors'
remuneration and other transactions is not disclosed.
We read other information contained in the Annual Report,
and consider whether it is consistent with the audited
financial statements. This other information comprises the
Directors' Report, Chairman's Statement, Corporate
Governance and Report of the Remuneration Committee.
We consider the implications for our report if we become
aware of any apparent misstatements or material
inconsistencies with the financial statements. 
Our responsibilities do not extend to any other information.
Basis of opinion
We conducted our audit in accordance with International
Standards on Auditing (UK and Ireland) issued by the
Auditing Practices Board. An audit includes examination, 
on a test basis, of evidence relevant to the amounts and
disclosures in the financial statements. It also includes an
assessment of the significant estimates and judgements
made by the directors in the preparation of the financial
statements, and of whether the accounting policies are
appropriate to the Company's circumstances, consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain all 
the information and explanations which we considered
necessary in order to provide us with sufficient evidence to
give reasonable assurance that the financial statements are
free from material misstatement, whether caused by fraud
or other irregularity or error. In forming our opinion we also
evaluated the overall adequacy of the presentation of
information in the financial statements.
Opinion
In our opinion 
• the 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 and of the Group at 31 March 2006 and of its
profit for the period then ended and have been properly
prepared in accordance with the Companies Act 1985;
and
• the information given in the Directors' Report is
consistent with the financial statements.
BAKER TILLY
Registered Auditor
Chartered Accountants
Brazennose House
Lincoln Square
Manchester 
M2 5BL
14 June 2006 Group profit and loss account
for the period ended 31 March 2006
PAGE 18 |   Group profit and loss account
2006 2006 2006 2005
Continuing Acquisitions Total
Notes ££££
TURNOVER 1 7,345,651 447,898 7,793,549 2,553,843
Cost of sales (3,046,308) (194,248) (3,240,556) (1,208,894)
Gross profit 4,299,343 253,650 4,552,993 1,344,949
Administrative expenses (1,688,911) (45,777) (1,734,688) (805,460)
OPERATING PROFIT 2 2,610,432 207,873 2,818,305 539,489
Interest receivable 32,944 -
Interest payable and similar charges 5 (12,119) (34,954)
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 2,839,130 504,535
Taxation 6 (868,044) (133,761)
PROFIT FOR THE FINANCIAL PERIOD/YEAR 1,971,086 370,774
Basic earnings per share - pence 8 8.36p 1.85p
Fully diluted earnings per share - pence 8 7.93p 1.85p
No separate Statement of Total Recognised Gains and Losses has been presented as all such gains and losses have been dealt
with in the Profit and Loss Account. 2006 2005
Notes £ £
FIXED ASSETS
Intangible assets 9 277,503 19,532
Tangible assets 10 237,432 102,483
514,935 122,015
CURRENT ASSETS
Work in progress 129,090 94,519
Debtors 12 6,020,676 1,274,809
Cash at bank and in hand 189,615 20,456
6,339,381 1,389,784
CREDITORS: Amounts falling due within one year 13 (2,065,839) (1,097,917)
NET CURRENT ASSETS 4,273,542 291,867
TOTAL ASSETS LESS CURRENT LIABILITIES 4,788,477 413,882
CREDITORS: Amounts falling due after more than one year 14 (30,161) (57,636)
4,758,316 356,246
PROVISIONS FOR LIABILITIES AND CHARGES
Deferred taxation 15 (19,200) (6,369)
4,739,116 349,877
CAPITAL AND RESERVES
Called up share capital 18 2,461,539 2,000,000
Share premium account 19 1,956,614 -
Merger reserve 19 (1,999,996) (1,999,996)
Profit and loss account 19 2,320,959 349,873
SHAREHOLDERS' FUNDS 19 4,739,116 349,877
These financial statements were approved by the board of directors and authorised for issue on 14 June 2006 and are signed 
on their behalf by:
G N Ratcliffe
(Chief Executive)
M Prideaux
(Finance Director)
Group balance sheet
31 March 2006
Group balance sheet |   PAGE 19 Company balance sheet
31 March 2006
PAGE 20 |   Company balance sheet
2006
Notes £
FIXED ASSETS
Investments 11 2,000,000
-
CURRENT ASSETS
Debtors 12 2,273,876
Cash at bank and in hand 184,317
2,458,193
CREDITORS: Amounts falling due within one year 13 (32,016)
NET CURRENT ASSETS 2,426,177
TOTAL ASSETS LESS CURRENT LIABILITIES 4,426,177
CREDITORS: Amounts falling due after more than one year 14 -
4,426,177
CAPITAL AND RESERVES
Called up share capital 18 2,461,539
Share premium account 19 1,956,614
Profit and loss account 19 8,024
SHAREHOLDERS' FUNDS 4,426,177
These financial statements were approved by the board of directors and authorised for issue on 14 June 2006 and are signed 
on their behalf by:
G N Ratcliffe
(Chief Executive)
M Prideaux
(Finance Director) Group cash flow statement
for the period ended 31 March 2006
Group cash flow statement |   PAGE 21
2006 2005
Notes £ £
Net cash flow from operating activities  20.a (1,012,234) (51,243)
Returns on investments and servicing of finance  20.b 20,825 (34,954)
Taxation  20.b (127,392) -
Capital expenditure and financial investment  20.b (312,367) (62,410)
Acquisitions and disposals of subsidiaries 20.b (400,000) -
CASH OUTFLOW BEFORE FINANCING (1,831,168) (148,607)
Financing  20.b 2,382,563 15,561
INCREASE/(DECREASE) IN CASH IN THE PERIOD 551,395 (133,046)
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
2006 2005
Notes £ £
Increase/(decrease) in cash in the period 551,395 (133,046)
Net cash inflow/(outflow) in respect of hire purchase 35,590 (15,561)
CHANGE IN NET FUNDS 20.c 586,985 (148,607)
Other non cash movements:
Hire purchase contracts - (31,712)
NET DEBT AT THE START OF THE PERIOD 20.c (552,008) (371,689)
NET FUNDS/(DEBT) AT THE END OF THE PERIOD 20.c 34,977 (552,008) Accounting policies
PAGE 22 |   Accounting policies
Basis of accounting
The financial statements have been prepared under the
historical cost convention. Accounting policies are
consistently applied and are in accordance with generally
accepted accounting practice in the UK.
Basis of consolidation
The consolidated financial statements incorporate the
financial statements of the Company and all Group
undertakings. These are adjusted, where appropriate, to
conform to Group accounting policies. 
Under a group reconstruction on 8 June 2005 the
Company acquired the whole of the issued share capital of
Debtmatters Limited and Debtmatters Commercial Limited
in exchange for shares. The reconstruction has been
accounted for in accordance with the principles of merger
accounting as set out in the Financial Reporting Standard
No. 6 (FRS 6) and in accordance with Schedule 4a of the
Companies Act 1985. The accounts have been prepared as
if Debtmatters Limited and Debtmatters Commercial Limited
had been owned and controlled by the Company
throughout the periods ended 31 March 2006 and 31
March 2005.
The acquisition of Unique Business Finance Limited on 31st
October 2005 has been accounted for under the
acquisition method. The results of companies acquired or
disposed of are included in the profit and loss account after
or up to the date that control passes respectively. Unique
Business Finance Limited has an accounting reference date
of 31 October. As this was the date at which its trade and
net assets were transferred to the Group, it was effectively
dormant from that date onwards. 
As a consolidated profit and loss account is published, a
separate profit and loss account for the parent company is
omitted from the Group financial statements by virtue of
section 230 of the Companies Act 1985.
Turnover
Turnover in the profit and loss represents amounts billed or
to be billed in respect of services performed on behalf of
clients. The amounts taken to turnover are calculated as
follows:
Nominee fees - on approval of a proposal in a formal
creditors' meeting the full amount of the nominee fee is
accounted for less a provision for cases on which the full
fee may not be recoverable.
Supervisory fees - on a monthly basis as earned following
the creditors' meeting.
Goodwill
Goodwill representing the excess of the purchase price
compared with the fair value of net assets acquired is
capitalised and written off evenly over 10 years as in the
opinion of the directors this represents the period over
which the goodwill is effective. It is reviewed for impairment
at the end of the first full financial year following the
acquisition and in other periods if events or changes in
circumstances indicate the carrying value may not be
recoverable.  
Amortisation
Amortisation is calculated to write off the cost of an asset,
less its estimated residual value, over the useful economic
life of that asset as follows:
IPS Licences      - 20% straight line
Fixed assets
All fixed assets are initially recorded at cost.
Depreciation
Depreciation is calculated so as to write off the cost of an
asset, less its estimated residual value, over the useful
economic life of that asset as follows:
Fixtures & Fittings - 25% straight line
Motor vehicles - 25% straight line
Equipment - 33% straight line
The carrying values of tangible fixed assets are reviewed for
impairment when events or changes in circumstances
indicate the carrying value may not be recoverable. Accounting policies
Accounting policies |   PAGE 23
Work in progress
Work in progress is valued on the basis of direct costs plus
attributable overheads based on normal levels of activity for
cases on which instructions have been received but not yet
approved in a creditors' meeting for those cases which, in
the opinion of the directors, will proceed to approval by
creditors. Provision is made for any foreseeable losses
where appropriate.
Leasing and hire purchase
commitments
Assets held under finance leases, which are leases where
substantially all the risks and rewards of ownership of the
assets have passed to the Company, and hire purchase
contracts, are capitalised in the balance sheet and are
depreciated over their useful lives. The capital element of
future obligations under the leases and hire purchase
contracts are included as liabilities in the balance sheet.
The interest elements of the rental obligations are charged
in the profit and loss account over the periods of the leases
and hire purchase contracts and represent a constant
proportion of the balance of capital repayments
outstanding.
Rentals payable under operating leases are charged in the
profit and loss account on a straight line basis over the
lease term.
Deferred Taxation
Deferred tax is recognised in respect of all timing
differences that have originated but not reversed at the
balance sheet date where transactions or events that result
in an obligation to pay more tax in the future or a right to
pay less tax in the future have occurred at the balance
sheet date. Timing differences are differences between the
Group's taxable profits and its results as stated in the
financial statements that arise from the inclusion of gains
and losses in tax assessments in periods different from
those in which they are recognised in the financial
statements.   
Deferred tax assets are recognised only to the extent that
the directors consider that it is more likely than not that
there will be available taxable profits from which the future
reversal of the underlying tax differences can be deducted.  
Deferred tax is measured at the average tax rates that are
expected to apply in the periods in which timing differences
are expected to reverse, based on tax rates and laws that
have been enacted or substantially enacted by the balance
sheet date.  
Deferred tax is measured on a non-discounted basis.
Investments
Fixed asset investments are stated at cost less a provision
for any permanent impairment in value.   Notes to the financial statements
for the period ended 31 March 2006
PAGE 24 |   Notes to the financial statements
1 TURNOVER AND SEGMENTAL ANALYSIS
The turnover and profit before tax are attributable to the one principal activity of the company, undertaken wholly in the United
Kingdom. Accordingly, no segmental information is given.
2 OPERATING PROFIT
Operating profit is stated after charging/(crediting):
2006 2005
£ £
Amortisation of goodwill 7,290 0
Amortisation of IPS licences 11,918 4,020
Depreciation of owned fixed assets 44,393 5,739
Depreciation of assets held under hire purchase agreements 17,285 17,331
Loss on disposal of fixed assets 25,857 -
Auditors' remuneration
- as auditors 26,900 19,500
- for tax compliance 5,700 1,750
- for other services 19,610 -
Operating lease costs:
Land and buildings 144,091 72,754
Other 66,325 -
An amount of £140,000 in relation to corporate finance services provided by the auditors was incurred in relation to the
Company's admission to AIM and was charged to the share premium account.
3 PARTICULARS OF EMPLOYEES
The average number of staff employed by the Group, including executive directors, during the financial period amounted to:
2006 2005
No No
Administration 65 29
Management 8 8
73 37
The aggregate payroll costs, including directors’ emoluments, of the above were:
2006 2005
£ £
Wages and salaries 1,652,771 698,313
Social security costs 165,497 71,154
Other pension costs 5,036 -
1,823,304 769,467 Notes to the financial statements
for the period ended 31 March 2006
Notes to the financial statements |   PAGE 25
4 DIRECTORS' EMOLUMENTS
The directors' aggregate emoluments in respect of qualifying services were:
2006 2005
£ £
Emoluments receivable 506,863 59,113
The emoluments of the highest paid director were:
2006 2005
£ £
Emoluments receivable 172,808 59,113
No directors accrued benefits under a company pension scheme.
5 INTEREST PAYABLE AND SIMILAR CHARGES
2006 2005
£ £
Interest payable on:
Bank loans and overdrafts 7,647 30,731
Finance charges 4,472 4,223
12,119 34,954
6 TAXATION ON ORDINARY ACTIVITIES
2006 2005
£ £
Current tax:
Corporation tax at 30% (2005: 30%) 855,213 127,392
Total current tax 855,213 127,392
Deferred tax:
Origination of and reversal of timing differences 12,831 6,369
Tax on profit on ordinary activities 868,044 133,761 Notes to the financial statements
for the period ended 31 March 2006
PAGE 26 |   Notes to the financial statements
6 TAXATION ON ORDINARY ACTIVITIES (continued)
2006 2005
£ £
Factors affecting the tax charge for the period
Profit on ordinary activities before taxation 2,839,130 504,535
Profit on ordinary activities before taxation multiplied by standard rate 
of UK corporation tax of 30.00% (2005: 30.00%) 851,739 151,360
Effects of:
Non deductible expenses 15,637 1,282
Capital allowances in excess of depreciation (12,833) 81
Utilisation of tax losses - (12,909)
Losses not recognised arising in the period 302 -
Income not taxable for tax purposes - (1,070)
Marginal relief (306) (11,353)
Other 674 -
Current tax charge 855,213 127,391
7 PROFIT ATTRIBUTABLE TO MEMBERS OF THE PARENT COMPANY
The profit dealt with in the accounts of the parent company was £8,024. Notes to the financial statements
for the period ended 31 March 2006
Notes to the financial statements |   PAGE 27
8 EARNINGS PER SHARE
Earnings per share is calculated in accordance with Financial Reporting Standard 22 (FRS 22). Earnings and the number of 
shares used in the calculations of earnings per share are set out below:
Period ended Year ended  
31 March 2006 31 March 2005 
£ £ 
Profit for the period 1,971,086 370,744
Weighted average number of shares in issue: No. No.
For basic earnings per share 23,578,504 20,000,000
For diluted earnings per share 23,979,663 20,000,000
Earnings per share:
Basic 8.36p 1.85p
Diluted 7.93p 1.85p
9 INTANGIBLE FIXED ASSETS
Goodwill IPS Licences Total
£ £ £ 
Cost:
At 1 April 2005 - 24,033 24,033
Arising on acquisition of subsidiary undertakings (see note 11) 174,975 - 174,975
Additions - 102,204 102,204
At 31 March 2006 174,975 126,237 301,212
Amortisation:
At 1 April 2005 - 4,501 4,501 
Charge for the period 7,290 11,918 19,208
At 31 March 2006 7,290 16,419 23,709
Net book value:
At 31 March 2006 167,685 109,818 277,503
At 31 March 2005 - 19,532 19,532 Notes to the financial statements
for the period ended 31 March 2006
PAGE 28 |   Notes to the financial statements
10 TANGIBLE FIXED ASSETS
Group Leasehold Fixtures & Motor 
Improvements Fittings Vehicles Equipment Total
£ £ £ £ £ 
Cost
At 1 April 2005 - 2,253 99,113 24,497 125,863
Additions        37,083 67,409 - 127,514 232,006
Arising on acquisition - - - 12,320 12,320
Disposals       - (21,411) (31,175) (9,513) (62,099)
At 31 March 2006 37,083 48,251 67,938 154,818 308,090
Depreciation
At 1 April 2005 - 630 17,331 5,419 23,380
Charge for the period 6,185 8,709 19,929 26,855 61,678
On disposals - (3,090) (9,654) (1,656) (14,400)
At 31 March 2006 6,185 6,249 27,606 30,618 70,658
Net book value at 31 March 2006 30,898 42,002 40,332 124,200 237,432
At 31 March 2005 - 1,623 81,782 19,078 102,483
Included within the net book value of £237,432 is £40,332 (2005 - £44,798) relating to assets held under hire purchase and
finance agreements. The depreciation charged to the financial statements in the period in respect of such assets amounted to
£17,285 (2005 - £17,331).
11 INVESTMENTS
Shares in subsidiary  
undertakings
£
Company
Additions and cost at 31 March 2006 2,402,000
Disposals (402,000)
2,000,000
Details of the investments in which the Company holds 20% or more of the nominal value of any class of share capital are as 
follows:
Proportion of
voting rights
Country of and shares Nature of
incorporation Holding held business
Debtmatters Limited England Ordinary shares 100% Personal debt solutions
Debtmatters Commercial Limited England Ordinary shares 100% Commercial debt solutions
Unique Business Finance Limited* England Ordinary shares 100% Dormant
* indirect holding
All the above companies have been included in the consolidated financial statements. Notes to the financial statements
for the period ended 31 March 2006
Notes to the financial statements |   PAGE 29
11 INVESTMENTS (continued)
The investments in Debtmatters Limited and Debtmatters Commercial Limited represented a group reconstruction, and as
such were accounted for as a merger.
On 31 October 2005 the company acquired 100% of the issued share capital of Unique Business Finance Limited for a cash
consideration of £400,000.
Fair Value 
£ 
Tangible fixed assets 12,320
Other assets/debtors 279,506
Creditors due within one year (64,801)
Net assets 227,025
Goodwill arising on acquisition of subsidiary 174,975
402,000
Discharged by:
Cash consideration 400,000
Costs associated with acquisition 2,000
402,000
In the opinion of the directors the fair value of the assets and liabilities acquired from Unique Business Finance Limited do not
materially vary from the book values, and as such no fair value adjustment has been performed.
12 DEBTORS
Group Group Company
2006 2005 2006
£ £ £
Amounts falling due within one year:
Trade debtors 26,207 65,929 -
Amounts owed by group undertakings - - 2,204,000
Other debtors 59,208 15,944 63,044
Prepayments and accrued income 5,935,261 1,192,936 6,832
6,020,676 1,274,809 2,273,876
Included within debtors are the following amounts falling due after more than one year:
£ £ £
Amounts owed by group undertakings - - 2,204,000 Notes to the financial statements
for the period ended 31 March 2006
PAGE 30 |   Notes to the financial statements
13 CREDITORS amounts falling due within one year
Group Group Company
2006 2005 2006
£ £ £
Bank overdraft 111,420 493,656 -
Trade creditors 377,321 194,833 19,613
Corporation tax 909,744 127,392 4,403
Other taxes and social security costs 175,477 68,911 -
Hire purchase agreements 13,057 21,172 -
Other creditors - 334 -
Accruals and deferred income 478,820 191,619 8,000
2,065,839 1,097,917 32,016
As at 31 March 2005, GN Ratcliffe, a director and shareholder, had a personal guarantee in respect of the bank overdraft 
up to £500,000. During the year this guarantee was replaced by a fixed and floating charge over the assets of Debtmatters
Limited.
14 CREDITORS amounts falling due after more than one year
Group Group Company
2006 2005 2006
£ £ £
Hire purchase agreements 30,161 57,636 -
Future commitments under hire purchase agreements are as follows
Group Group Company
2006 2005 2006
£ £ £
Amounts payable within 1 year 13,057 21,172 -
Amounts payable between 2 and 5 years 30,161 57,636 -
Amounts payable over 5 years - -
43,218 78,808   -
15 DEFERRED TAXATION
The movement in the deferred taxation provision during the year was:
Group Group Company
2006 2005 2006
£ £ £
Balance brought forward 6,369 - -
Charge in the period 12,831 6,369 -
Balance carried forward 19,200 6,369 -
The provision consists of the excess of capital allowances over depreciation of fixed assets. Notes to the financial statements
for the period ended 31 March 2006
Notes to the financial statements |   PAGE 31
16 COMMITMENTS UNDER OPERATING LEASES
At 31 March 2006 the Group and Company had annual commitments under non-cancellable operating leases as set out below.
Land and buildings
Operating leases which expire: 2006 2005
£ £ 
Within 1 year - -
Between 2 and 5 years - -
Over 5 years 196,026 84,000  
196,026 84,000  
17 RELATED PARTY TRANSACTIONS
The directors have taken advantage of the exemption under FRS 8 from reporting transactions with other group companies.
During the year the Group paid management charges to G N Ratcliffe, the Chief Executive, in respect of his services for the
period prior to the acquisition by the Company of Debtmatters Limited. The total amount invoiced in the period was £45,000
and there was no balance at the 31st March 2006.
During the period, the Company paid £90,063 to G N Ratcliffe in respect of rent on the premises at Tarleton House.
On 31 October 2005 the Company acquired the entire issued share capital of Unique Business Finance Limited from G N
Ratcliffe for a cash consideration of £400,000. The terms of the acquisition were considered fair and reasonable by the
independent directors, who consulted the Company's Nominated Advisers.
There were no other transactions with related parties which should be disclosed under FRS 8. Notes to the financial statements
for the period ended 31 March 2006
PAGE 32 |   Notes to the financial statements
18 SHARE CAPITAL
2006 2005 
£ £ 
Authorised:
35,200,000 (2005-1,000) Ordinary shares of 10p  (2005- £1) each 3,520,000 1,000
2006 2005 2006 2005
No No £ £ 
Allotted and called up:
24,615,385 (2005: 2) Ordinary shares of 10p (2005: £1) each 24,615,385 2 2,461,539 2
Ordinary Shares
On 8 June 2005 the authorised share capital was increased to £3,520,000 and each ordinary share was sub divided into 10p
ordinary shares.
On 8 June 2005 the Company entered into an agreement, as disclosed in the admission document, to acquire the entire share
capital of Debtmatters Limited and Debtmatters Commercial Limited, satisfied by the issue of 19,999,980 ordinary shares of
10p each respectively each credited as fully paid.
On 22 June 2005 following admission to the Alternative Investment Market of the London Stock Exchange, 4,615,385 ordinary
shares of 10p each were issued at a price of 65p per ordinary share.
Options
At 31 March 2006 the Company had 1,660,202 unissued ordinary shares of 10p each under the Company's share option
schemes, details of which are as follows:
Grant date Granted in  Option Price Date from
the period pence which Expiry date
exercisable
20/06/05 615,384 65.0 01/07/08 20/06/15
20/06/05 923,076 65.0 01/07/10 20/06/15
04/07/05 34,965 71.5 01/07/08 04/07/15
04/07/05 34,965 71.5 01/07/10 04/07/15
15/08/05 25,906 96.5 01/07/08 15/08/15
15/08/05 25,906 96.5 01/07/10 15/08/15 Notes to the financial statements
for the period ended 31 March 2006
Notes to the financial statements |   PAGE 33
19 RESERVES AND SHAREHOLDERS' FUNDS
Group Share Share Merger Profit Total
capital premium reserve and loss
account account
£££££
At 1 April 2004 as previously stated:
Debtmatters Limited 2 - - (20,901) (20,889)
Debtmatters Commercial Limited 2 - - - 2
Merger adjustment 1,999,996 - (1,999,996) - -
At 1 April 2004 as restated 2,000,000 - (1,999,996) (20,901) (20,897)
Profit for the year 370,774 370,774
At 31 March 2005 2,000,000 - (1,999,996) 349,873 349,877
Share issue 461,539 2,538,461 - - 3,000,000
Share issue costs - (581,847) - - (581,847)
Profit for the period - - - 1,971,086 1,971,086
Balance at 31 March 2006 2,461,539 1,956,614 (1,999,996) 2,320,959 4,739,116
Company Share Share Merger Profit Total
capital premium reserve and loss
account account
£££££
Issued subscriber shares 2 - - - 2
Shares issued on acquisition 1,999,998 - - - 1,999,998
Shares issued on AIM placing 461,539 2,538,461 - - 3,000,000
Share issue costs - (581,847) - - (581,847)
Profit for the period - - - 8,024 8,024
Balance at 31 March 2006 2,461,539 1,956,614 - 8,024 4,426,177 Notes to the financial statements
for the period ended 31 March 2006
PAGE 34 |   Notes to the financial statements
20 CASH FLOWS
a Reconciliation of operating profit to net cash outflow from operating activities
2006 2005 
£ £ 
Operating profit 2,818,305 539,489
Depreciation 61,678 23,070
Amortisation of goodwill 7,290 -
Amortisation of IPS licences 11,918 4,020
Loss on disposal of tangible fixed assets 25,857 -
Increase in work in progress (34,571) (72,844)
Increase in debtors (4,466,361) (989,196)
Increase in creditors 563,650 444,218
Net cash outflow from operating activities (1,012,234) (51,243)
b Analysis of cash flows for headings netted in the cash flow statement
Returns on investment and servicing of finance 2006 2005 
£ £ 
Interest received 32,944 -
Interest paid (12,119) (34,954)
Net cash inflow/(outflow) from returns on investments and servicing of finance 20,825 (34,594)
Taxation 2006 2005 
£ £  
Taxation paid (127,392) -
Capital expenditure and financial investment 2006 2005 
£ £  
Payments to acquire tangible fixed assets (232,006) (59,575)
Payments to acquire intangible fixed assets (102,204) (9,610)
Receipts from sale of tangible fixed assets 21,843 6,775
Net cash outflow for capital expenditure and financial investment (312,367) (62,410)
Acquisitions and disposals 2006 2005 
£ £  
Purchase of subsidiary undertakings (400,000) -
Financing 2006 2005 
£ £ 
Proceeds on issue of ordinary shares 3,000,000 -
Share issue costs (581,847) -
Capital element of hire purchase (35,590) 15,561
Net cash inflow from financing 2,382,563 15,561 Notes to the financial statements
for the period ended 31 March 2006
Notes to the financial statements |   PAGE 35
c Analysis of net funds/(debt)
At start of the At end of the 
period  Cash flows  period
£ £ £
Cash in hand and at bank 20,456 169,159 189,615
Overdraft (493,656) 382,236 (111,420)
(473,200) 551,395 78,195
Debt:
Hire purchase agreements (78,808) 35,590 (43,218)
Net funds/(debt) (552,008) 586,985 34,977
21 FINANCIAL INSTRUMENTS
The Group's treasury policy during the year ended 31 March 2006 was to provide suitable, flexible funding arrangements to
satisfy the Group's requirements. The Group uses financial instruments comprising borrowings, cash, and trade debtors and
creditors that arise directly from its operations to achieve its financial and operational objectives.
It is not the Group's policy to enter into financial derivatives for speculative or trading purposes. The financial instruments
employed by the Group other than short term debtors and creditors are used to fund its operations and comprise cash, short
term deposits and long term loans and hire purchase contracts.
The Group's exposure to interest rate risk is limited to finance leases which are typically fixed rate and its cash deposits which
are typically floating rate. As permitted by Financial Reporting Standard (“FRS”) No 13, the disclosures below exclude short
term debtors and creditors.  
Interest rate risk profile of financial assets
The interest rate profile of the financial assets of the Group as at 31 March 2006 is as follows: 
Fixed rate Floating rate Financial assets
financial financial on which no
assets assets interest is paid Total
££££
2006
Sterling 250 189,365 - 189,615
2005
Sterling 250 20,176 - 20,426
Floating rate financial assets comprise cash deposits. Notes to the financial statements
for the period ended 31 March 2006
PAGE 36 |   Notes to the financial statements
21 FINANCIAL INSTRUMENTS (continued)
Interest rate risk profile of financial liabilities
The interest rate profile of the financial liabilities of the Group as at 31 March 2006 is as follows: 
Fixed rate Floating rate Financial 
financial financial liabilities on  
liabilities liabilities which no  
interest is paid Total
££££
2006
Sterling 43,218 111,420 - 154,638
2005
Sterling 78,808 493,656 - 572,464
The weighted average interest rate on fixed rate financial liabilities at 31 March 2006 was 7.3% (2005: 6.8%).
The weighted average period to maturity of fixed rate financial liabilities at 31 March 2006 was 20 months 
(2005:  23 months).
The fixed rate financial liabilities were confined to obligations under hire purchase and finance leases.
The maturity profile of the Group's financial liabilities as at 31 March 2006 was as follows: 
2006 2005
£ £
Payable within one year, or on demand 124,477 514,828
Payable between one and two years 12,438 13,057
Payable between two and five years 17,723 44,579
Payable in more than five years - -
154,638 572,464
Currency exposures
The Group has no overseas assets or liabilities.
Borrowing facility
The Group had an overdraft facility of £250,000 at 31 March 2006.
Fair values of financial assets and financial liabilities 
The fair value, based upon the market value or discounted cashflows of the financial instruments detailed above was not
materially different from their book values.
22 CONTROL
In the opinion of the directors G N Ratcliffe was the controlling party and majority shareholder during the current and
preceding period. Officers and professional advisers
Officers and professional advisers |   PAGE 37
Directors
G N Ratcliffe Chief Executive
N D Guilford Non Executive Chairman
M Prideaux Finance Director
Secretary
H L Secretaries Limited
Registered office
St James's Court
Brown Street
Manchester
M2 2JF
Nominated adviser and broker
Charles Stanley Securities
25 Luke Street
London
EC2A 4AR
Solicitors
Halliwells LLP
St James's Court
Brown Street
Manchester
M2 2JF
Auditors
Baker Tilly
Chartered Accountants
Brazennose House
Lincoln Square
Manchester
M2 5BL
Registrars
Capita Registrars
34 Beckenham Road
Beckenham
Kent
BR3 4TU Notes
PAGE 38 |   Notes debt Matters
Debtmatters Group plc. Mansell House, Aspinall Close, Middlebrook, Bolton BL6 6QQ
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