AIT Group plc
Annual Report and Accounts
for the year ended 31 March 2004
AIT Group plc
The Smith Centre
The Fairmile
Henley-on-Thames
Oxfordshire, RG9 6AB
T: +44 (0)1491 416600
F: +44 (0)1491 416601
E: contactus@aitgroup.com
W:www.aitgroup.com
AIT (USA) Inc 
639 Research Parkway
Suite 100
Meriden, CT 06450
USA
T: +44 203 630 1942
F: +44 203 630 7094
E: contactus@aitgroup.com
Asia Pacific
AIT (Aspac) Pte Ltd
P O Box 162
Singapore, 911206
Singapore
T: +65 9752 1759
E: ait_aspac@aitgroup.com
AIT Group plc Annual Report and Accounts for the year ended 31 March 2004 AIT makes Customer Interaction software that
helps companies be more profitable by serving
people better .
Our software is used by organisations that 
lead the world’ s most demanding, customer
intensive sectors, including financial services,
public services and contact centres.
AIT software addresses the two greatest
challenges facing every large organisation:
improving the customer experience and
responding to change.
Interaction
Intelligence ™
Increasing workplace 
 efficiency and channel 
 effectiveness through 
 business process 
 management
Increasing customer  
retention by improving the 
customer experience
Interaction Zones
Increasing the  
effectiveness of sales  
campaigns through  
intelligent interactions
 
Enforcing compliance  
through auditable,  
rules-based, customer  
interaction procedures
Attracting new customers
Getting them on board
Helping them buy more He
Serving them faster Se
Keeping them loyal
We help improve customer experiences 
through Interaction Intelligence™
When our clients are interacting with their
customers in the five interaction zones
Main Board
Non Executives
Richard Hicks
Non Executive Chairman
Felda Hardymon
Non Executive Director
Rob Stavis
Non Executive Director
Hugh McCartney
Non Executive Director
Geoff Probert
Non Executive Director
Executives
Nick Randall
Chief Executive Officer
Matthew White
Chief Financial Officer
Company Secretary
Tim Shaw
Chief T echnology Officer
Paul Frederick
EVP Business Development
Tracy Isacke
General Manager, EMEA
Chris Lowther
General Manager, Asia Pacific
Advisors
Auditors
Deloitte & Touche LLP
Abbots House, Abbey Street,
Reading, Berkshire RG1 3BD
Solicitors
Taylor Wessing
Carmelite, 50 Victoria Embankment,
Blackfriars, London EC4Y 0DX
Stockbrokers & Nominated Advisors
Arbuthnot Securities Limited
Arbuthnot House, 20 Ropemaker Street,
London EC2Y 9AR
Principal Bankers
National Westminster Bank plc
Abbey Gardens, 4 Abbey Street,
Reading, Berkshire RG1 3BA
Registrars
Capita Registrars
Northern House, Woodsome Park,
Fenay Bridge, Huddersfield HD8 0LA
Richard Morrison
General Manager, Americas
Gareth Evans
Group Operations Director
Sarah Haskell
Group Marketing Director
Mike McGroarty
General Counsel
Executive Management T eam
Registered Office
The Smith Centre, The Fairmile
Henley-on-Thames, Oxfordshire RG9 6AB
Company number
03358035 AIT Group plc Annual Report and Accounts 2004 01
Highlights
•T urnover increased by 11.7% to £19.6 million 
• Successfully increased the proportion of higher margin licence
related revenue to service revenue. Licence and maintenance
revenues increased 31% to £11.0 million, representing 
56% of all turnover 
• Operating profit of £1.3 million before exceptional income 
of £1.0 million
•Pre-tax profit of £2.0 million after exceptional income 
•Fully diluted earnings per share of 7 .49p
•Adjusted diluted earnings per share of 3.27p after 
excluding goodwill amortisation, exceptional items 
and recognition of deferred tax asset 
• Balance sheet strengthened considerably. Cash and deposits 
at bank of £7 .7 million. Net cash/debt position improved by 
£7 .0 million with net funds at year end of £0.8 million 
£19.6M
Turnover
£1 .3M
Operating profit before exceptionals
£2.0M
Pre-tax profit after exceptionals
Contents
02 AIT at a glance
04 Chairman’s Statement
06 Financial Services – Nationwide
08 Chief Executive’s Review
10 Public Services – Leading Police Force
12 Chief Executive’s Review continued
14 Contact Centres – Humana
16 Financial Review
18 Foundation Software – Fiserv
20 Financial Review continued
21 Board of Directors
22 Directors’ Report
24 Corporate Governance Statement
26 Directors’ Remuneration Report
28 Independent Auditors’ Report
29 Group Profit and Loss Account
29 Group Statement of T otal Recognised Gains and Losses
30 Group Balance Sheet
31 Group Cashflow Statement
32 Notes to the Group Cashflow Statement
33 Company Balance Sheet
34 Notes to the Financial Statements
IBC Managers and Advisors 02 AIT Group plc Annual Report and Accounts 2004
AIT at a glance
AIT serves clients who typically operate in the Business to Consumer markets
and who have a very large number of client interactions, which often occur
in multiple touch points (i.e. Contact Centre, web, branch etc.). 
Our most powerful and latest product is Portrait. Portrait’s unique selling
point is that it allows all types of information and business processes to 
be quickly, easily and effectively manipulated within a customer’s complex 
IT environment.
We believe the Customer Interaction 
sweet spot includes elements from each 
of these to deliver the next generation
multi-channel solution. We call it Customer
Interaction Management, or CIM. It is
designed to be responsive to change and
allows users to start with a single process
and scale up as required. 
Our Market
BPM
CRM
Stops short of the interaction
Inflexible = Unresponsive
Only part of the problem
No process automation
Simulates processes
Difficult to execute
EAI
AIT is now entirely focussed towards the
Customer Interaction marketplace. This 
is a sub-segment of three major IT market
segments: CRM (Customer Relationship
Management), BPM (Business Process
Management) and EAI (Enterprise
Application Integration, sometimes
referred to as Middleware).  AIT Group plc Annual Report and Accounts 2004 03
Our Global Presence
Partners
Business Units
Over 150 customers in more than 20 countries
Financial Services
Our Financial Services group is responsible for all our
Financial Services application development. Specific
emphasis is being placed by this group towards
extending our Portrait based sales and services
product platform. We are planning a number of new
product releases to help our customers in these key
areas during our current financial year.
Public Services
This group is working with our partner Unisys to
capture the potential in this market sector, both in
the UK and overseas. This should allow us to tap in
to the increasing levels of public sector investment 
in this area. In particular, we see opportunities for
our technology in the rapidly developing Emergency
Services sector.
Contact Centres
Our next generation Contact Centre group is
responsible for all specific Contact Centre
applications. In particular, they have been working
with key EDGE customers to help them extend and
evolve their existing EDGE applications, allowing
them to utilise much of the inherent power offered
by AIT’s technology, without sacrificing their existing
EDGE application development. 
Foundation Software
This group is responsible for the development of 
our Portrait architecture, with particular emphasis
towards developing our flexible Business Process
Engine, which is the real power behind our overall
Portrait product. Of particular relevance in this area
is our association with Fiserv, which is proving highly
beneficial to both parties and is increasing the
market penetration of Portrait. 04 AIT Group plc Annual Report and Accounts 2004
It gives me great pleasure to report 
that AIT has returned to profitability 
in the year ended 31 March 2004 with 
a powerful range of products, an
excellent customer base and a
strengthened balance sheet. 
Having worked closely with Nick Randall
and his colleagues to guide AIT through
this period, it is now appropriate for me 
to relinquish my executive role and revert
to my former position as Non Executive
Chairman. I do so in the full knowledge
that Nick has re-created a business
eminently capable of achieving the long
term goals that were set when he and I
first embarked upon the task of turning
AIT around.
Financial Results
Sales for the full year were £19.6 million
versus £17 .6 million in the prior year.
Operating profit amounted to £1.3 million
before exceptional income of £1.0 million
(versus an operating loss of £15.3 million
before exceptional charges of £23.0 million
last year). After exceptional items, the
overall pre-tax profit for the full year was
£2.0 million, compared to a pre-tax loss 
of £39.3 million in 2003.
Our financial position was improved
materially during the year as a result of the
successful raising of £5.0 million of new
funds (before costs) through an issue of
convertible loan notes in June 2003. These
loan notes were subsequently converted
to ordinary shares in September 2003. At
the same time, approximately £0.8 million
of other debt, comprising loans made
during 2002 by myself and two former
Directors of the Company, was also
converted into ordinary shares.
Also during the year, we were able to
further strengthen our balance sheet by
retiring the US$3.5 million loan note
payable to the original IMA shareholders.
We negotiated a settlement of 50 cents 
on the dollar for the loan note, which
made this an attractive opportunity for 
AIT (particularly with the strength of
sterling relative to the dollar). T o enable 
us to complete this transaction we took
the opportunity to place shares with new
institutional investors in January 2004
which raised £2.7 million. 
We ended the financial year with £7 .7 million
cash and deposits, which compares very
favourably with the £2.7 million at the 
end of the prior period. Following the
fundraising and debt reduction initiatives
taken in the year, our only material long
term debt is a £6.0 million bank term 
loan payable over a four year period
commencing April 2004, plus around
£0.9m of finance lease obligations. 
Chairman’s Statement
“It was particularly pleasing that in the 
second half of the financial year, new
Portrait licences were signed with 
Humana, the US healthcare insurer, 
and with a top 10 UK building society” AIT Group plc Annual Report and Accounts 2004 05
It gives me great pleasure to
report that AIT has returned
to profitability in the year
ended 31March 2004 
with a powerful range of
products, an excellent
customer base and a
strengthened balance sheet
Return to profitability
Strengthened balance sheet
First class range of products
Outstanding team of people
Summary
Outlook
We are optimistic about our long term
prospects. We have a first class range of
software products whose effectiveness is
recognised by a growing list of customers.
We also have an outstanding team of
people dedicated to selling and supporting
these products across the world. It was
particularly pleasing that in the second half
of the financial year, new Portrait licences
were signed with Humana, the US
healthcare insurer, and with a top 10 UK
building society. We are also delighted with
our new business development activities, in
particular our inroads into the Public Services
sector, which have been boosted recently by
a second UK police force’s decision to adopt
Portrait as part of their call management
solution. We are confident of a positive
outcome for the year.
Richard Hicks
Non Executive Chairman
14 June 2004 06 AIT Group plc Annual Report and Accounts 2004
Financial Services
The Financial Services industry is under pressure to cut the costs of servicing and
selling to customers, while all the time meeting the burden of increased regulation.
Increased customer sophistication and choice makes this a more demanding
challenge than ever before. The intense fight for customer wallet share means 
that only the best organisations will remain competitive. 
AIT is working with some of the world’s best retail banks, building societies and
insurance companies to cut costs while enabling intelligent, profitable interactions
with customers in the branch, the contact centre or on the web. For the first time,
every channel benefits from a comprehensive, real-time view of the customer, 
thus allowing these organisations to cross-sell the full range of their products in 
a targeted way, from simple banking services through to higher value financial
advice. More importantly, because Portrait enables organisations to treat all their
customers as individuals, they also know when not to attempt a sale. 
Our Intelligent Prompting™ technology guides staff to rewarding cross-sales and
pro-active service opportunities. With a single click, customers, tellers and agents
can initiate and manage automated processes and workflows that meet needs
efficiently, professionally and in an auditable way. Business users can quickly design
and deploy new processes based on our library of Portrait Frameworks. Insurance
firms who seek to lower costs while raising service levels for faster claims resolution
means happier customers, less litigation and other efficiency gains. Portrait also
helps to prevent mis-selling by effecting automated processes that cannot
circumvent best practice. 
AIT is working with some of the 
world’s best retail banks, building 
societies and insurance companies 
to cut costs while enabling 
intelligent, profitable interactions 
with customers in the branch, 
the contact centre or on the web AIT Group plc Annual Report and Accounts 2004 07
”AIT’s award-winning Portrait implementation at Nationwide
Building Society is already achieving good results and has
outperformed expectations. Thanks to Portrait’s Intelligent
Prompts, successful prompted conversations are running at
double original estimates. Nationwide’s employees have been
impressed with Portrait as it enables them to develop enhanced
relationships with customers by treating them as individuals,
and the feedback from members has been positive. Nationwide
is happy that all of the original return on investment criteria
will be met.”
Simon Baines, iCRM Director, Nationwide Building Society
Case Study: Nationwide
•12,000 users at branches, call centres and web
applications
•Real-time single customer view
•Positive member feedback
•Intelligent Prompts increases conversion rates for 
sales campaigns
•Nationwide is happy that all original ROI criteria 
will be met The power of our products,
the increasing number of
areas where we find they 
can provide real benefits 
and a growing pipeline of
prospects are all reasons for
management, employees and
shareholders to be optimistic
Full year pre-tax profits of £2 million
Entirely focussed towards the Customer
Interaction Marketplace
New business successes
Growing pipeline of prospects
Summary
My first six months with AIT was a period
of major change and rationalisation 
of our operations, including the
integration of the IMA acquisition.
Having achieved that, the overall
objective for the financial year ended 
31 March 2004 was to settle the
business down and return AIT to
sustainable profitability. I am pleased 
to report that major progress has been
achieved during the period and that 
we achieved this key objective, with 
full year pre-tax profits of £2.0 million
in welcome contrast to the previous
year’s heavy losses. 
New licence plus maintenance revenue
represented £11.0 million, a 31% increase
on prior year. An important aspect of our
long term growth strategy is to improve
the overall proportion of licence related
revenues to services revenues, so we are
most encouraged by this figure.
Operationally, it was also our intention 
to create a business structure that most
effectively enables AIT to sell its products
to a broad customer base throughout the
world. As I will describe below, we have
made excellent progress in this regard.
AIT’s product base has grown over the
years. These products have become 
well respected for their technological
capabilities and have allowed AIT to
compete with much larger organisations.
However, in order to maintain and build
upon this recognition and to continue to
compete at the highest level, it is vital 
that we understand the dynamics of the
markets we are attempting to address and
structure ourselves accordingly. Instead of
being thought of as a specialist developer
of niche technology, we want to be known
as a leading provider of products that help
08 AIT Group plc Annual Report and Accounts 2004 AIT Group plc Annual Report and Accounts 2004 09
“We want to be known as a leading
provider of products that help large
organisations understand and serve 
their customers more effectively and, 
in so doing, increase their profitability”
large organisations understand and serve
their customers more effectively and, in 
so doing, increase their profitability. In
short, we want to increase sales by being
market and product driven, not just
technology driven. 
Operational Review
Business Focus
AIT is now entirely focussed towards the
Customer Interaction marketplace. This is 
a sub-segment of three major IT market
segments: CRM (Customer Relationship
Management), BPM (Business Process
Management) and EAI (Enterprise
Application Integration, sometimes referred
to as Middleware). We believe the
Customer Interaction sweet spot includes
elements from each of these to deliver the
next generation multi-channel solution. We
call it Customer Interaction Management,
or CIM. It is designed to be responsive to
change and allows users to start with a
single process and scale up as required. 
We serve clients who typically operate in
the Business to Consumer markets and
who typically have a very large number 
of client interactions, which often occur in
multiple touch points (i.e. Contact Centre,
web, branch etc.). Our software is used by
organisations that lead the world’s most
demanding, customer intensive sectors
and addresses the two greatest challenges
facing every large organisation: improving
the customer experience and responding
to change.
We provide the software necessary to
allow our customers to manage their
customer interactions effectively, even
when they may have many hundreds 
or thousands of employees dealing 
with thousands or millions of customers.
Our most powerful and latest product 
is Portrait. Portrait’s unique selling point 
is that it allows all types of information
and business processes to be quickly, easily 
and effectively manipulated within a
customer’s complex IT environment. 
Portrait delivers benefits to our clients in
the following four key areas:
•Increasing customer retention – by
improving the customer experience.
•Increasing the effectiveness of sales
campaigns – through intelligent
interactions.
•Increasing workplace efficiency and
channel effectiveness – through
business process management.
•Enforcing compliance – through
auditable, rules-based, customer
interaction procedures.
Portrait Development
We now have four Portrait business
development groups, focussing their
energies towards developing exciting new
Portrait products to explore opportunities
in the four market areas we now address.
These are:
•Financial Services – Our Financial
Services group is responsible for all 
our Financial Services application
development. Specific emphasis is being
placed by this group towards extending
our Portrait based sales and services
product platform. We are planning a
number of new product releases to help
our customers in these key areas during
our current financial year.
•Foundation Software – This group is
responsible for the development of our
Portrait architecture, with particular
emphasis towards developing our
Chief Executive’s 
Review
flexible Business Process Engine, which
is the real power behind our overall
Portrait product. Of particular
relevance in this area is our association
with Fiserv, which is proving highly
beneficial to both parties and is
increasing the market penetration 
of Portrait.
•Contact Centre – Our next generation
Contact Centre group is responsible for
all specific Contact Centre applications.
In particular, they have been working
with key EDGE customers to help them
extend and evolve their existing EDGE
applications, allowing them to utilise
much of the inherent power offered by
AIT’s technology, without sacrificing
their existing EDGE application
development. 
•Public Services – This group is working
with our partner Unisys to capture the
potential in this market sector, both in
the UK and overseas. This should allow
us to tap in to the increasing levels of
public sector investment in this area. In
particular, we see opportunities for our
technology in the rapidly developing
Emergency Services sector.
We continue to work with our key
customers to help them achieve their
objectives in these areas and are building
an increasing number of successful case
studies, demonstrating the financial success
enjoyed as a result of using our products.
In the year ended 31 March 2004, 
AIT spent £4.4 million on new product
development, which has delivered a
comprehensive set of process frameworks
that support our business strategy
described above.
continued on page 12 10 AIT Group plc Annual Report and Accounts 2004
Public Services
Portrait Public Services is a revolutionary response management environment
designed to reduce the burden on the world’s most mission critical command
centres while increasing the speed and quality of response.
In the UK, AIT is addressing the need for improvements in policing required by 
the Home Office National Policing Strategy. This called for more customer focussed
service, the highest levels of efficiency and effectiveness, timely response to 999
calls, the civilianisation of non-police work and the requirement to work across
geographical and institutional boundaries (for example in child protection). There
was also a call to use the latest technology to gather evidence, for case-handling,
for victim on-line self-service and complaint handling.
In response, AIT is investing in Portrait Response™ a powerful call handling solution
designed for fast, effective, auditable incident response and Portrait Resolve™, 
a case management and workflow module that initiates automated follow-up
processes to guide incidents and investigations through to conclusion. Both
integrate easily with all existing communications, databases and other critical
applications giving officers and civilians a single, complete view of any incident 
and all relevant data. They support fast decisions and ensure compliance with
police standard operating procedures. Resilience is built in as standard and service 
is continuous even during upgrades.
In addition to heightening officer and public safety, our solutions are highly flexible
and allow the police and other government agencies to add new processes and
capabilities as needed. For the first time, public services will be fully integrated 
and will therefore be able to track each contact through to completion, providing 
a single source for all relevant information and events.
T ogether with our partners Unisys and other influencers such as Intergraph, we
have begun the process of addressing the much larger US 911 and 311 market.
Portrait Public Services is a revolutionary
response management environment
designed to reduce the burden on the
world’s most mission critical command
centres while increasing the speed and
quality of response AIT Group plc Annual Report and Accounts 2004 11
”AIT has been a strategic Unisys partner for two years and in that
time we have made significant headway in both new business
sales and in existing AIT and Unisys accounts. Our respective
strengths complement each other well. The domain expertise of
Unisys in the Financial Services and Emergency Services markets
and AIT's expertise as a leading global CIM vendor is the winning
combination to help our clients advance their business.”
Stephen Olyha, Vice President, 
Global CRM practice,Unisys
Case Study: Leading Police Force
■
Covers a population of 7 .2 million
■
Over 3,000 calls taken per day, 15 million per year
■
326 Police stations
■
3 separate call centres
■
New emergency and non-emergency contact handling
system demonstrates Portrait’s speed and reliability
■
Initial phase to go live this year 12 AIT Group plc Annual Report and Accounts 2004
“Nationwide recently won CRM Magazine’s
award for the best Customer Interaction
Management Project, and was a finalist 
in the Gartner 2004 European CRM
Excellence Awards”
Customers
Nationwide Building Society remain our
largest Portrait customer with over 12,000
users in branches, call centres and other
web applications. They have reported very
real success with the product, from both a
technology/reliability standpoint as well 
as with addressing their original business
objectives.
They are now using the Real Time Single
Customer View built by Portrait in all their
customer touch points and are reporting
excellent results in terms of increased
conversion rates for sales campaigns. With
over 12,000 users at Nationwide, this is a
clear demonstration of Portrait’s scalability
and robustness in a complex and highly
regulated environment. 
It was gratifying to note that Nationwide
recently won CRM Magazine’s award for
the best Customer Interaction Management
project and was also a finalist in the Gartner
2004 European CRM Excellence Awards. 
Simon Baines, Head of iCRM Marketing at
Nationwide, has told us:
“AIT’s award-winning Portrait
implementation at Nationwide Building
Society is already achieving good results
and has outperformed expectations.
Thanks to Portrait’s intelligent prompts,
successful prompted conversations are
running at double original estimates.
Nationwide’s employees have been
impressed with Portrait as it enables
them to develop enhanced relationships
with customers by treating them as
individuals, and the feedback from
members has been positive. Nationwide
is happy that all of the original return on
investment criteria will be met.”
Nationwide continue to be a very
supportive reference customer and I 
would like to take this opportunity to
thank all the Nationwide staff for their
help and co-operation in this regard. 
Rainier Pacific Bank in Seattle,
Washington, have now completed their
successful Portrait implementation and
have reported very tangible business
benefits. They provide a very helpful 
USA reference site for AIT . Portrait’s
revolutionary flexible integration system
enables Rainier Pacific to make everything
it knows about each customer available 
at the point of engagement, ready to
be acted upon. This view is constantly 
up-to-date, reflecting the current state 
of the customer data across all systems 
at any moment in time. Portrait provides 
a single view of the customer by collating
information from host systems. Contact
history and other customer data is stored
locally on the Portrait database. 
Leading European Police Force We
reported in the half year accounts that
Portrait was selected to be the new
emergency and non-emergency contact
handling system for Europe’s largest police
force. This is another demonstration of
Portrait’s speed and reliability in one of 
the most demanding and critical of
environments.
Although this represents a departure from
our traditional Financial Services focus,
when we reviewed the requirements for 
the new system, Portrait was actually ideally
suited for this very demanding Contact
Centre environment. Working alongside
our partner Unisys, progress with the
implementation has gone well and we
expect the initial phase to go live this year.
Our entry into this market has shown that
there is enormous potential for Portrait
applications within the global Public
Services sector. Our Public Services
Chief Executive’s 
Review continued
business development group is now
focussed entirely on the opportunities 
in this area.
Nova KBM We have now completed the
implementation of Portrait at Nova KBM.
For this application, we again worked very
closely with our partner Unisys, to provide
a new customer interaction environment
to support Nova KBM’s programme for
VIP customers.
Recent Wins
Leading UK Building Society
I am delighted to announce that in 
March 2004, we were selected by a top 
10 UK building society to provide their
new Customer Interaction Management
(CIM) system, based on Portrait. For
reasons of commercial confidentiality, 
we cannot yet disclose the identity of this
organisation. However, this is an important
new win for AIT and we look forward to
working closely with this building society
to complete the implementation. We also
hope to provide further information
regarding this contract in due course.
Humana 
We have also been selected by Humana 
to provide the first stage of their new
insurance CIM system. Humana is a very
large ($14 billion sales) medical insurance
company primarily focused towards the 
US marketplace. They have been a very
successful EDGE customer for many years
and have now decided to utilise Portrait 
to improve their healthcare underwriting
processes. In order to convince Humana
that Portrait was right for their application,
we completed a very demanding Proof of
Concept, which was able to demonstrate
clearly the potential benefits Portrait could
bring to improving the underwriting
process. This is an excellent example of 
a workplace efficiency solution. The
potential clearly exists for us to extend
Portrait across the whole of Humana’s
customer interaction activities.  AIT Group plc Annual Report and Accounts 2004 13
EDGE Extend & Evolve
In addition to the above new Portrait
customers, we are also working with a
number of our EDGE customers on various
Extend & Evolve initiatives.
Our aim moving forward is to provide 
all our customers with a high level of
ongoing support for their existing 
software applications. In addition, 
we seek to work with our customers to
help develop and improve their critical
customer interaction activities.
Partners
We have made good progress during the
year with our objective of strengthening
relationships with our two major
international partners, Unisys and Fiserv. 
Our partnership with Unisys has now
extended beyond Retail Financial Services
to include Government applications in most
major territories. There are now more than
100 people trained on Portrait, representing
a good proportion of the Unisys CRM
practice now aligned with AIT .
Our relationship with Fiserv has been
expanded to include a number of
innovative product and marketing
initiatives within our Financial Services
sector. Fiserv’s long-standing partnership
with AIT has produced considerable
benefits for its customers in the retail
financial services industry. For example,
building on AIT’s Portrait software, Fiserv
has developed Alliant Aperio which
strengthens Fiserv’s existing product
portfolio by converging CRM and BPM
into a single, multi-channel business
solution, specifically designed for the 
retail financial services market. 
We also continue to work with a number
of important local reseller partners, for
example TietoEnator and Datapoint in
Europe, KSI in Japan and CPM in Brazil,
who help us to address the specific market
needs within the individual territories.
Microsoft continues to be AIT’s most
important technology partner. The award-
winning installation at Nationwide is one 
of the largest Microsoft based Customer
Interaction solutions worldwide. We work
very closely with Microsoft to offer flexible,
robust and scalable solutions based on the
Microsoft platform, products and associated
technologies including .NET .
Employees
I am delighted with the performance of
AIT’s employees and management team
during what has been a testing 12 months.
They have shown outstanding commitment
to our various Portrait new product and
business development initiatives and our
international sales and marketing activities.
AIT has a great team of people who I would
like to thank for their commitment and
support, which often went way beyond 
the “call of duty” last year.
Now that we have completed our
objective of restoring AIT to profitability,
we are pleased to announce a number of
internal management changes designed to
position AIT for the next stage of our
business development plans. 
Board Changes
Richard Hicks will become Non Executive
Chairman. He will continue to guide the
Group in terms of both strategy and
business development as well as having
overall responsibility to our shareholders
for corporate governance.
Geoff Probert will relinquish his
operational role but remain on the Board
as a Non Executive, with particular
responsibility for guiding the company in
the IT technology area. Geoff has been
invaluable to our team over the last 18
months and I look forward to working
with him in his Non Executive role. 
Matthew White, who has been with AIT
since August 2002 overseeing the Group’s
return to financial stability, will join the
main Board as Chief Financial Officer. 
I believe that we have in place an
outstanding AIT Management team and 
I look forward to working with them to
implement our operational and business
development plans for the year ahead.
Outlook
Our aim for the current financial year is 
to continue to expand licence sales in 
the four sectors we now address and to
improve overall profitability. We also intend
to complete our transition to become a
more international product based business,
with a growing base of Portrait users. The
market environment has improved but
nevertheless remains challenging. I am,
however, confident that we can achieve 
our objectives for this year by building on
the foundations we have laid both in the
last financial year and during AIT’s 18 year
history. The power of our products, the
increasing number of areas where we 
find they can provide real benefits and 
a growing pipeline of prospects are all
reasons for management, employees and
shareholders to be optimistic.
Nick Randall
Chief Executive Officer
14 June 2004 Contact Centres
Portrait brings next-generation contact centre functionality to the agent desktop
without disrupting valuable back-end applications.
Contact centres used to have to choose between giving great customer experiences
and keeping costs down. Portrait lets organisations increase call handling
efficiencies while also dramatically improving the customer experience, for both
outbound and inbound contacts.
For the first time, existing contact centre customers can now give their agents:
•a real-time view of the entire customer relationship across all channels.
•Intelligent Prompts to guide the agent through the best cross-sell or service
opportunity for that customer at that moment.
• automated processes and workflow that pick up the customer demand and
guide it through to completion.
We are working closely with our EDGE customers around the world to support 
their drive to create world beating next generation contact centres. For example,
Humana, an existing EDGE customer, is now investing in Portrait to help improve
customer interactions and the underwriting process.
With Portrait powering a contact centre agents become more productive and
effective with each customer interaction which enables them to sell more and
improve the customer experience. 
Portrait brings next-generation
contact centre functionality to the
agent desktop without disrupting
valuable back-end applications
14 AIT Group plc Annual Report and Accounts 2004 ■
Humana is a $14 billion sales US medical insurance
company  
■
A very successful EDGE customer for many years 
■
Are now implementing Portrait to improve their
healthcare underwriting processes
■
An excellent example of a workplace efficiency solution 
■
Potential exists to extend Portrait across the whole of
Humana’s customer interaction activities 
Case Study: Humana
”AIT has been a strategic partner of Microsoft’s in the financial
services sector for many years and we continue to work with
them globally. We are delighted that the latest version of
Portrait fully utilises the .NET framework and web services
architecture. Microsoft is committed to supporting AIT’s
continued success.”
Neil Holloway, Managing Director, Microsoft Ltd
Vice President, Microsoft EMEA
AIT Group plc Annual Report and Accounts 2004 15
A picture of good service 16 AIT Group plc Annual Report and Accounts 2004
Trading Performance
Revenues
Turnover for financial year 2004 was 
£19.6 million, up 11.7% on the prior year
revenues of £17 .6 million. This growth 
was driven by the increase in licence and
related revenue which increased 31% to
£11.0 million from £8.4 million in 2003.
Licence related revenue represented 56% of
all turnover in financial year 2004 compared
to 48% of all turnover in prior year.
Professional services revenue fell to 
£8.6 million from £9.2 million in prior 
year, representing a shift in our business
model to reduce reliance on lower 
margin services work and to increase
opportunities for higher margin licence
related revenues. Professional services will
remain an important source of revenue in
the future but the growth in our indirect
partner channels will mean that we will
focus more on adding value to projects
working alongside our partners, rather
than providing commodity services where
margin pressure is strong.
AIT’s international reach and broad
customer base is demonstrated by the fact
that our sales during the year were earned
from over 150 customers in 23 countries
around the world. 
Europe remains our biggest developed
market representing 78% of all sales, and
this region performed well by increasing
sales by 15%. Sales in the Americas region
have also grown year on year and now
represent 19% of all global sales. The
highlight of the region was the key USA
market, where sales grew by 28% in real
terms from over 50 customers in 24 states.
When measured in sterling the year on
year growth is a little lower at 19%
because of the adverse impact of a
comparatively weak dollar. The Asia Pacific
market is still developing and represents
2% of global sales. However, we believe
the region offers good potential for further
growth and the existing 10 customers in
the region provide a good platform for
further business development.
Operating Costs
Operating costs excluding exceptional
items were £18.3 million compared to
£32.9 million in the prior year, reflecting
the benefits of the extensive rationalisation
carried out in the previous financial year.
Further restructuring costs were incurred in
the year to consolidate our customer after
sales support activities into a professional
global support centre operating around
the clock, and also to reduce operating
costs in line with the reduced capacity
required in our professional services team.
Although we have continued to manage
expenditure very carefully we recognise the
critical importance of continued sustainable
investment in research and development
and targeted marketing activities. The
savings delivered by our cost management
programme have not been at the expense
of future business development.
Sales and marketing spend represented
approximately 20% of turnover, while
research and development costs were
approximately 22%.
Exceptional items
During October 2003 we completed
negotiations with a former associate
company and received £500,000 cash 
in settlement of their loan obligations 
to the Group. As this amount had been
fully provided within investments in the
previous financial year we have written
back £500,000 as an exceptional gain 
this financial year.
Financial Review
“AIT remains at core a great business
with great products and great people,
and the combination makes for an
exciting future” AIT Group plc Annual Report and Accounts 2004 17
As referred to in the Chairman’s
Statement, in January 2004 we were able
to negotiate a settlement of the IMA loan
notes at a 50% discount to their principal
value. The resulting loan waiver of
£941,000 (net of costs) has been treated
as an exceptional gain.
As referred to above, we incurred further
restructuring costs during the year. The
attributable non recurring cost of
£615,000 has been treated as an
exceptional charge.
The £159,000 balance of exceptional
income recognised in the year largely
relates to the management of the Group’s
exposure to onerous property leases and
other commercial liabilities. We negotiated
exits from two surplus property leases
during the year and also renegotiated our
commitments under what was an otherwise
onerous outsource contract so that it could
deliver commercial benefit to the Group.
We continue to maintain a relatively 
high level of provisions in our balance 
sheet reflecting our cautious approach to
identifying and providing against potentially
onerous liabilities of the business. We
continue to work hard to ensure that
wherever possible these risks are mitigated
or eliminated entirely.
Earnings Per Share
Fully diluted earnings per share of 7.49p
(2003: loss per share 291.91p) was
bolstered by significant exceptional income
and the recognition of a deferred tax asset
during the financial year. In order to
provide a more comparable indication of
underlying trading performance, we have
disclosed adjusted earnings per share
information in the notes to the financial
statements. Adjusted diluted earnings per
share of 3.27p compares very favourably
to a loss per share of 113.78p in 2003.
The management of the
Group’ s debt obligations
combined with the additional
equity fund raising has
considerably improved the
Group’ s financial position
T urnover £19.6 million up 11.7%
Licence and related maintenance revenue 
£11 million up 31%
Operating costs £18.3 million down 44%
Operating profits before exceptional items
£1.3 million
Summary
continued on page 20 18 AIT Group plc Annual Report and Accounts 2004
Foundation Software
Portrait lets Independent Software Vendors (ISVs) build flexible and adaptable
customer interaction applications quickly and easily. With a comprehensive 
front-end framework and our partners vertical expertise, together we can make
world beating vertical applications.
With Portrait as a development framework, ISVs with strong transactional
capabilities can meet demands for the new generation of front-office solutions.
Unlike raw development environments, Portrait’s Configuration Suite includes
sophisticated process modelling and workflow tools integrated with a user friendly
Graphical User Interface. The Configuration Suite draws on a library of re-usable
business logic as well as templates for the most common needs – including a real
time single view of the customer, contact history and case management. 
We are working closely with our ISV partners around the world to support their
drive to create world beating vertical applications that open up new markets. For
example, Fiserv, one of the world’s leading suppliers of information management
systems to banks, has designed and developed Alliant Aperio powered by Portrait,
its new customer interaction management platform for banks.
Portrait will not only create new opportunities for partners within their traditional
core markets but will also extend the relevance of the proposition into new market
segments ahead of competition. In particular we are focussing on ISVs and Business
process outsourcers who have a strong Business to Consumer process proposition
for highly regulated industries as suitable markets for AIT in the future.
Microsoft continues to be a very important AIT technology partner. We work very
closely with Microsoft to ensure our future developments are aligned for the
benefit of our customers and partners.
Portrait lets Independent Software Vendors
(ISVs) build flexible and adaptable customer
interaction applications quickly and easily. With
a comprehensive front-end framework and our
partners vertical expertise, together we can
make world beating vertical applications AIT Group plc Annual Report and Accounts 2004 19
■
A number of innovative product and marketing
initiatives
■
For example, building on AIT’s Portrait software Fiserv
has developed Alliant Aperio which converges CRM
and BPM into a single, multi-channel business solution
”Fiserv's long-standing partnership with AIT has produced
considerable benefits for our customers in the retail financial
services industry. Building on AIT's Portrait software, Fiserv has
developed Alliant Aperio which strengthens our existing product
portfolio by converging CRM and BPM into a single, multi-
channel business solution, specifically designed for the retail
financial services market. Alliant Aperio, powered by Portrait, 
will not only create new opportunities for us within our
traditional core markets but will also extend the relevance 
of our proposition into new market segments.”
Alex Groenendyke, Fiserv CBS CEO
Case Study: Fiserv 20 AIT Group plc Annual Report and Accounts 2004
Dividend Policy
The Board believes that AIT’s financial
priorities are the continued investment in
business development activities and the
continued strengthening of the balance
sheet, in particular the reduction of debt
financing. The Board believes it is in the
best interests of shareholders to retain
cash funds within the Group to help meet
these important objectives.
Cashflow
Cash outflow from operating activities
during the year was £1.0 million (2003:
outflow of £16.8 million) which included
£0.8 million cash outflow arising from non
recurring settlements in respect of onerous
property leases and other commercial
liabilities. The cash outflow from operating
activities excludes £0.5 million cash 
inflow from the recovery of a loan to 
a former associate.
After taking into account further cash
flows for finance charges, tax, capital
expenditure and investment activity, 
total cash outflow before financing 
was £0.7 million (2003: cash outflow
£16.9 million).
£5.0 million was raised from the issue 
of convertible loan notes in June 2003 
and a further £2.7 million was raised from 
the placing of shares with institutional
investors in January 2004. Costs
associated with these fundraisings
amounted to £0.4 million. Other 
debt repayments of £0.5 million were
made in respect of finance leases and 
£1.0 million in respect of the IMA loan
notes settlement. T otal net cash inflows
from financing amounted to £5.9 million 
(2003: £15.5 million).
The net cash increase for the year after
financing inflows was £5.2 million 
(2003: net cash decrease of £1.4 million).
Cash and deposits at year end stood at
£7.7 million (2003: 2.7 million).
The Group’s net cash/debt position has
improved by £7.0 million in the year with
net funds of £0.8 million at year end
compared to a net debt position of 
£6.2 million at prior year end.
The management of the Group’s debt
obligations combined with the additional
equity fundraising during the year has
considerably improved the Group’s
financial position and enables us to take
the business forward with confidence. 
The return of the Group to profitability is
vindication of the turnaround strategy and
that success is fully deserved. As ever, we
remain grateful for the continued support
of our key investors and our bankers who
have shared our conviction that AIT
remains at core a great business with great
products and great people, and that the
combination makes for an exciting future.
Matthew White
Chief Financial Officer
14 June 2004
Financial Review
continued The Directors of the Company and their responsibilities within the
Group are set out below:
Richard Hicks (56) Non Executive Chairman 
(formerly Executive Chairman)
Richard was the founder of the Company in 1986 and led the
Company as Managing Director through to listing on the London
Stock Market in June 1997. His prior career was as a systems
manager for 3m and BMW. Richard is also Chairman of The Centre
for T omorrow’s Company which is a business led research charity
concerned with the future role of business in society.
Nick Randall (53) Chief Executive Officer 
Nick has enjoyed success in growing and turning around companies.
He founded Oxford Magnetic T echnology Limited in 1981, the
revenues for which grew to approximately £50 million within five
years. He left Oxford Magnetic T echnology to purchase Airtech
Limited and returned it to profitability within two years. He sold two
divisions of Airtech for £13 million and formed Airtech plc, which
obtained an AIM quotation in 1996 and merged with Remec Inc, 
in 1999. Post acquisition, Nick managed Remec’s worldwide wireless
infrastructure group, and oversaw mergers and acquisitions activities
for the company.
Matthew White (37) Chief Financial Officer 
(appointed 14 June 2004)
Matthew White has extensive experience in business turnaround
and financial management having managed distressed businesses 
as part of Arthur Andersen’s Corporate Financial Services team and
having worked alongside Nick Randall as finance director of quoted
technology companies since 1998. Between 1999 and 2002,
Matthew was European Finance Director for Remec Inc, a NASDAQ
listed Electronic Engineering group and prior to that, he was Group
Finance Director of Airtech plc. Between 1991 and 1998 Matthew
was engaged as a corporate recovery specialist with Arthur
Andersen (London) and Binder Hamlyn, and prior to that he spent
six years in audit practice. Matthew is a Chartered Accountant and 
a qualified Insolvency Practitioner.
Felda Hardymon (56) Non Executive Director
Chairman of the Remuneration Committee
G. Felda Hardymon is Professor of Management Practice at Harvard
Business School where he teaches Venture Capital and Private
Equity. Prior to that, he joined Bessemer Venture Partners as a
general partner in 1981. He has led investments in young companies
in the software, communications and retail sectors, including
American Superconductor, Cascade Communications (acquired by
Ascend), Celcore (acquired by DSC), Parametric T echnology, the
Sports Authority, Staples, LBMS (acquired by Platinum T echnology),
and VideoServer. He currently serves on the Board of Silicon Valley
Bancshares (NASDAQ:SIVB).
Hugh McCartney (54) Non Executive Director 
Hugh has over 25 years experience in the computer software
industry, most recently as Senior Vice President WW Operations 
for enterprise software company Merant based in San Francisco,
California. Prior to Merant, Hugh held senior Sales and General
Management positions in Europe with database vendors Sybase Inc
and Ingres Inc and application software company MSA Inc. Hugh 
is Chairman of Kvault Software Ltd, Centennial Software Ltd and
Scapa T echnologies Ltd and also serves on the Board of UK quoted
company Alterian Plc. Hugh is considered independent by the Board.
Robert Stavis (41) Non Executive Director
Chairman of the Audit Committee 
Robert joined Bessemer Venture Partners in July 2000 as a venture
partner in the firm’s New Y ork investment office, located in
Larchmont, New Y ork. He primarily focusses on early-stage
investments in financial services technologies. Prior to joining
Bessemer, Robert was a private equity investor, managing a portfolio
of private equity interests in a variety of industries including
telecommunications, software, technology, gaming and restaurants.
Until July 1998, Robert was the co-head of global arbitrage trading
for Salomon Smith Barney. 
Geoff Probert (50) Non Executive Director 
(formerly Software Development Director)
Geoff was previously a Main Board Director at Perpetual plc
responsible for information systems. He joined Perpetual in 1984. 
He was closely associated with the setting up of both the EMX Co
and Cofunds initiatives within the Unit Trust industry. Following 
the takeover of Perpetual plc by AMVESCAP Plc he was employed
as a technical strategist and was a private investor. Prior to joining
Perpetual, he worked for a number of software houses supplying 
the financial services industry. He is a Trustee of POWER, an
international charity working for disabled victims of conflict.
Board of Directors 
AIT Group plc Annual Report and Accounts 2004 21 22 AIT Group plc Annual Report and Accounts 2004
The Directors present their annual report on the affairs of the
Group, together with the audited financial statements, for the 
year ended 31 March 2004. 
Principal Activity
The Group’s principal activity, which has remained unchanged
throughout the year, is the provision of information technology
solutions, based on a core product set, concentrating on specialist
computer software design, systems integration and systems support. 
Results and Dividends
The results for the year are set out on page 29 and the movements
in reserves are shown in Note 19 to the financial statements. Further
commentary is given in the Chairman’s Statement, the Chief
Executive’s Review and the Financial Review. 
The Directors are not recommending the payment of a dividend.
The total cost of dividends for the year is £nil (2003: £nil).
Review of the Business
A review of the Group’s business and future prospects is given 
in the Chairman’s Statement, Chief Executive’s Review and the
Financial Review.
Research and Development
The Group continues to invest significantly in research and
development and the Directors believe that investment in this area 
is a prerequisite for success in the medium to long term. During 
the year AIT invested £4.4 million in research and development
(2003: £6.3 million).
Share Capital
Details of movements in share capital are given in Note 18 to the
financial statements.
Directors and their Interests
The current Directors of the Company and all other Directors 
who served during the year are shown on page 21. The Directors’
interests in the share capital of the Company are shown in the
Report of the Remuneration Committee. Except for transactions 
with Directors referred to below, no Director had a material interest
in any contract of significance to which the Company, or any
subsidiary, was a party during the year.
T ransactions with Directors
There were the following transactions with Directors during 
the year:
On 24 June 2003 the Directors and their related parties shown
below subscribed for a total of £2,100,000 of Unsecured
Convertible Loan Notes in AIT Group plc. The terms of these 
Loan Notes are described more fully in Note 18 to the financial
statements. Following the approval of shareholders which was
confirmed at an extraordinary general meeting of the Company 
on 16 September 2003, the Loan Notes were converted into
ordinary shares at a price of 25 pence per share, representing a
discount of approximately 7.4% to the closing mid-market price 
on 24 June 2003, being the date immediately prior to the date 
of announcement of the issue of the Loan Notes.
Directors’ Report
for the year ended 31 March 2004
Loan Notes Number of 
amount shares upon 
subscribed conversion of  
Subscriber £ Loan Notes
Bessemer Investors and 
Stavco Arbitrage Group LLC (i) 1,500,000 6,000,000
Nicholas Randall/Trustees 
NJ Randall Settlement 2001/
Trustees NJS Randall Accumulation 
and Maintenance Settlement 300,000 1,200,000
Richard Hicks 200,000 800,000
Geoffrey Probert 80,000 320,000
Matthew White (ii) 20,000 80,000
2,100,000 8,400,000
Notes
(i) The subscriptions of Bessemer Investors and Stavco Arbitrage
Group LLC were made by various investment funds managed 
by Bessemer Venture Partners and Stavco Arbitrage Group LLC.
Each of Felda Hardymon and Rob Stavis has an indeterminate
interest in each of the Bessemer Investors’ interests and in
Stavco Arbitrage Group LLC (as relevant).
(ii) Matthew White did not serve as a Director during the year
ended 31 March 2004.
On 21 August 2003 Richard Hicks (along with two former directors
of the Company) entered into agreements with the Company in
respect of loans due to them. In consideration of the release of the
Company’s obligation to repay such loans (and accrued interest), 
Mr Hicks was allotted 806,734 ordinary shares in settlement of his
loan balance of £573,171 plus accrued interest of £31,879. The
effective conversion price was 75 pence per share representing 
a discount of approximately 4.5% to the closing mid-market price
on 21 August 2003. The principal amounts of these loans were due
for repayment between 1 August 2003 and 1 August 2004. The
conversion of these loans was approved by shareholders at an
extraordinary general meeting of the Company on 16 September 2003.
Directors’ and Officers’ Insurance
The Company maintains insurance cover for all Directors and
Officers of group companies against liabilities which may be
incurred by them while acting in those capacities.
Substantial Shareholdings
As at 1 June 2004, the Company had been notified that the following
were interested in 3% or more of the Company’s share capital.
No. of 
Name (Other than Directors) Shares Percentage
Bessec Ventures VLP 3,243,995 6.45%
Bessemer Venture Partners VLP 2,876,752 5.72%
The Bank of New Y ork 
(Nominees) Limited 2,803,833 5.58%
Quester VCT 4 PLC 2,615,240 5.20%
Close Brothers Group plc 2,505,352 4.98%
Finsbury T echnology Trust 2,439,091 4.85%
Trustees Martyn Arbib ’79 Settlement 2,356,327 4.69%
Royal Bank of Scotland plc/
West Register (Investments) Limited 1,911,428 3.80% Donations
During the year the Group made donations of £1,000 (2003: £2,750)
to various charities. No contributions were made for political purposes.
Payment Policy
The Group’s policy is to abide by the terms of payment agreed with
suppliers. At 31 March 2004 the number of days of annual purchases
represented by trade creditors amounted to 34 days (2003: 46 days).
The Company has no trade creditors.
Economic and Monetary Union 
All relevant parts of the Group are able to handle transactions in the
Euro when required.
Employment Policies
It is the policy of the Group to consider all applicants for employment
on the basis of qualification for the specific job without regard to
race, colour, religion, sex, age, disability or national origin. This
policy extends to all aspects of employment including recruitment,
placement, training, compensation, career development, transfer
and promotion.
Employee Development and Involvement
The contribution of employees is vital to enable the Group to
achieve its commercial and financial objectives. The Group’s ability
to sustain a competitive advantage over the long term will depend,
in large part, on the continuous development of all employees. 
For this reason AIT is committed to providing an environment 
which values continuous learning and which creates development
opportunities across all business areas. Various programmes exist 
to meet the learning and development needs of employees. 
The Group places considerable value on the involvement of its
employees and has continued to keep them informed on matters
affecting them as employees and on the various factors affecting 
the performance of the Group. This is achieved through regular
formal and informal meetings, newsletters and the Group intranet.
Employee representatives are consulted regularly on a wide range 
of matters affecting their current and future interests.
A shared commitment by all employees to the success of the
business is of fundamental importance. All employees have share
option entitlements with vesting terms linked directly to the Group’s
financial performance. The allocation of share options provides all
staff with a direct stake in the growth and prosperity of the business.
In addition, all employees who do not already participate in sales
commission schemes are entitled to an annual bonus which is
dependant on the overall profitability of the Group. For the financial
year to 31 March 2004 the Group intends to distribute this bonus in
the form of par value share options.
Share Schemes
The Company maintains two employee trusts. These are the AIT
Group Employee Share Ownership Plan Trust (the “ESOP”) and 
the AIT Qualifying Employee Share Ownership Trust (the “QUEST”).
The original purpose of these trusts was to hold and distribute
ordinary shares in the Company under current and future share
option schemes. The trustees of both trusts include an Executive
Director, a Non Executive Director, an employee representative 
and a third party professional.
The Company adopted a new share option scheme post refinancing
in September 2002, which allowed for the grant of options under
the Enterprise Management Incentive Scheme. The options vest 
and are exercisable in accordance with the rules of the Scheme 
and subject to the following conditions:
1Normal Vesting: 
aOne-quarter of the Ordinary Shares comprised in each Option
Grant on the first anniversary of the Date of Grant; and
bOne thirty-sixth of the remaining three-quarters of the Ordinary
Shares comprised in each Option Grant on the last day of each
calendar month between the first and fourth anniversaries of 
the Date of Grant.
2Accelerated Vesting: 
the conditions for accelerated vesting of the options shall
depend, inter alia, on the performance of the Group as
measured by the audited yearly Trading Profit released by the
Group. Trading Profit is defined as the Profit on Ordinary
Activities Before Taxation, excluding any windfall gains from the
release of unutilised provisions and including any exceptional
items. The date on which this accelerated vesting condition will
become applicable shall be the date on which the Company
announces its Preliminary Results for the year. The residual
balance of non-vested options after the accelerated vesting
condition has occurred shall be calculated and the Normal
Vesting conditions shall continue to apply to that balance.
aOne-half of the Ordinary Shares comprised in each Option
Grant (including options already vested) on the first year that
Trading Profit is greater than £3 million; and
bAll of the Ordinary Shares comprised in each Option Grant
(including options already vested) on the first year that Trading
Profit is greater than £5 million.
Annual General Meeting
Notice of the Annual General Meeting of shareholders, the date 
of which will be announced to shareholders in due course, will be
contained in a separate document that will be sent to shareholders
in advance of the meeting. 
Auditors
On 1 August 2003, Deloitte & T ouche transferred their business to
Deloitte & T ouche LLP , a limited liability partnership incorporated
under the Limited Liability Partnership Act 2000. The Company gave
its consent to treating the appointment of Deloitte & T ouche as
extending to Deloitte & T ouche LLP with effect from 1 August 2003
and accordingly the financial statements have been signed in the
name of Deloitte & T ouche LLP . A resolution for the re-appointment
of Deloitte & T ouche LLP will be proposed at the forthcoming
Annual General Meeting.
Approved by the Board of Directors and signed on behalf of 
the Board
Richard Hicks
Non Executive Chairman
14 June 2004 
AIT Group plc Annual Report and Accounts 2004 23 In June 1998, the Hampel Committee and the London Stock
Exchange published the Principles of Good Governance and Code 
of Best Practice (‘the Combined Code’) which embraces the work 
of the Cadbury, Greenbury and Hampel Committees and became
effective in respect of accounting periods ending on or after 
31 December 1998. In July 2003 the UK Listing Authority published
the new Combined Code (“the new code”).
Although the Group is not governed by the Listing Rules of the 
UK Listing Authority the Directors have given consideration to the
Combined Code and the new code and applied it where appropriate
for the limited size of the Company and its position.
The Board and its Committees
The Board
The composition of the Board is set out on page 21. The Board
comprises a Non Executive Chairman plus two Executive Directors and
four further Non Executive Directors. The Board meets regularly and
has a formal schedule of matters which are reserved for its decision. 
It has delegated specific responsibilities to the Remuneration and Audit
Committees which have specific terms of reference approved by the
Board. Board and Committee papers are circulated in advance of each
meeting and are supplemented by reports and presentations so that
all Directors are fully briefed and provided with the information they
need. All Directors may take independent professional advice in
furtherance of their duties at the Company’s expense.
The primary function of the Board is to set Group strategy and to
oversee the effective implementation of that strategy. The Board
meets regularly throughout the year with an established agenda 
of items dealing with important aspects of the Group’s affairs
including monitoring strategy, approving acquisitions and disposals,
management performance, major capital and development
expenditure, approving budgets and significant financing matters.
The Board monitors exposures to key business risks and reviews
business performance against strategic and budgetary goals and
development programmes. The Board also considers employee
issues, key appointments and reporting to shareholders.
Details of the Directors’ service contracts are given in the Report 
of the Remuneration Committee.
Division of Responsibilities
The changes to the Board structure announced today achieve the
previously stated objective of having demonstrable separation of
executive responsibility for running the business and responsibility
for running the Board. This new Board structure will increase
accountability to the Board and will safeguard the independence 
and objectivity of the Board.
The Board has delegated specific responsibilities to two principal
Committees, each of which has written terms of reference. In 
line with best practice, the terms of reference of the following
committees have been the subject to review within the last 
12 months.
Audit Committee
The Audit Committee comprises Robert Stavis (Chairman) and Hugh
McCartney. The role of the Audit Committee is key both to ensuring
that a sound system of internal control is maintained within the
Group and to ensuring that AIT Group plc presents (and its policies
support) a balanced, clear and understandable assessment of its
position and prospects. The AIT Audit Committee meets twice a 
year and more frequently if required. 
The Committee examines the process of financial reporting within
the Group. It reviews annually the adequacy of the Group’s system
of internal controls and the processes for monitoring and evaluating
the risks facing the Group. The Committee reviews the scope and
results of the audit, as well as the fees of the auditors for both audit
and non-audit services. The Committee is authorised to seek
information from any member of the Group and to obtain external
professional advice if it considers it necessary. The Committee also
reviews the interim and annual results and the annual report and
financial statements, prior to their submission to the Board and
ensures an appropriate relationship is maintained between the
Group and its external auditors.
Remuneration Committee
The Remuneration Committee comprises Felda Hardymon (Chairman)
and Hugh McCartney and meets periodically as required. The role of
the Committee is to approve terms of service, agree the remuneration
of the Executive Directors and to determine the allocation of share
options within the terms of a remuneration policy which is approved
annually by the Board. 
Nominations Committee
In view of the size of the Board, the appointment of new Directors 
is considered by the Board as a whole, accordingly there is no
Nominations Committee. 
Shareholder Communication
The Company encourages two-way communication with both
institutional and private investors and endeavours to respond
promptly to queries received. The Group’s website
(‘www.aitgroup.com’) now provides detailed financial and business
information about the Group. It is the policy of the Company to
ensure that all our market announcements are made immediately
available to all our shareholders via the medium of the internet. 
Meetings between Directors, designated AIT senior management,
institutional shareholders and other market professionals are held
regularly in accordance with AIT’s investor management programme
and always follow the terms of AIT’s Market Communications Policy. 
Shareholders attending the AGM are invited to ask questions during
the meeting and to meet the Directors and other members of senior
management after the formal proceedings have ended. 
Corporate Governance Statement
for the year ended 31 March 2004
24 AIT Group plc Annual Report and Accounts 2004 Internal Controls
The Board attaches considerable importance to the Group’s systems
of internal control and risk management with specific emphasis 
in the areas of financial, legal/commercial and compliance risk.
These procedures include financial, operational and compliance
controls as well as risk management, which accord with the criteria
contained in the Internal Control Guidance for Directors on the
Combined Code published by the ICAEW in September 1999.
However the internal controls are designed to manage rather than
eliminate risk and the Board recognizes that any system can only
provide reasonable and not absolute assurance against material
misstatement or loss. It acknowledges its responsibility for ensuring
that the Group’s system of internal financial control provides
reasonable assurance regarding the reliability of financial
information used both within the business and for publication 
and to safeguard shareholders’ investment and the Group’s assets. 
The Board delegates day to day responsibility for internal control
and risk issues to the Chief Executive Officer who conducts meetings
with his senior management team on a regular basis. In these
management meetings the exposures to financial, operational and
compliance risks are identified, reported on, assessed and controlled. 
The Audit Committee is also responsible for reviewing the ongoing
financial and compliance control procedures. The Board reviews the
effectiveness of the systems of internal control and risk management
on a continuing basis by:
•Considering Group strategy and approving an annual budget
based on that strategy and medium-term projections. Core to
this process is review of the risks and opportunities facing the
Group undertaken on a continuing basis.
•Regularly reviewing operational performance and updated
forecasts.
•Retaining primary responsibility for acquisition and divestment
policy, the approval of major capital expenditure and financing
arrangements. Below Board level there are clearly defined
management authority limitations for the approval of capital
expenditure, Human Resource actions, significant contracts,
investments, acquisitions and divestments.
•Receiving regular reports on environmental, social, ethical and
health and safety matters as they relate to the Group’s
operations.
•Receiving regular reports from the Audit Committee as to
whether the systems of internal control and risk management
are operating effectively.
These procedures have been in place since the start of the
accounting period, have been reviewed and improved to enhance
their effectiveness during the year, and have remained in place up 
to the date of approval of the annual report.
The Board acknowledges that companies without an internal audit
function should, from time to time, review the need to establish
one. At present the Board and the Audit Committee feel that current
internal controls are adequate to meet the needs of the business
and, while constantly strengthening controls in all areas, will
consider the need for an internal audit function as the Group
continues to develop.
Business and Environmental Ethics
The Board requires that its employees comply with the laws and
standards of conduct of the countries in which it does business. 
The Directors and employees are all required to avoid personal
conflicts of interest regarding company business.
In complying with the Public Interest Disclosure Act 1998 in the
United Kingdom, the Group has established a procedure enabling
employees to bring matters to the attention of an appropriate
manager outside of their own department in the event that they 
do not feel able to approach their local line management.
The Board recognises that it is important, both for its employees 
and the communities in which it operates, that AIT maintains high
standards of health and safety and takes effective measures 
to ensure that its activities do not damage the environment.
In particular AIT recognises the responsibility it has toward the
environment. The Group Environmental Policy addresses compliance
with environmental legislation, conformity with standards for air,
waste disposal and noise, the economical use of materials and the
establishment of environmental performance standards. The Group
commenced implementation of this policy during 2003, a process
that has continued in 2004.
Going Concern Basis
After making enquiries, the Directors have formed a judgement, 
at the time of approving the financial statements, that there is a
reasonable expectation that the Group has adequate resources to
continue in operational existence for the foreseeable future. For this
reason the Directors continue to adopt the going concern basis in
preparing the financial statements.
Statement of Responsibilities
United Kingdom company law requires the Directors to prepare
financial statements for each financial year which give a true and 
fair view of the state of affairs of the Company and Group and of
the profit and loss of the Group for that period.
In preparing those financial statements, the Directors are required to:
•select suitable accounting policies and then apply them
consistently;
•make judgements and estimates that are reasonable and
prudent; and
• state whether applicable accounting standards have been followed.
The Directors are responsible for keeping proper accounting records
which disclose with reasonable accuracy at any time the financial
position of the Company and enable them to ensure that the financial
statements comply with the Companies Act 1985. They are also
responsible for the system of internal control and for safeguarding 
the assets of the Company and hence for taking reasonable steps 
for the prevention and detection of fraud and other irregularities.
AIT Group plc Annual Report and Accounts 2004 25 Although the Group is not governed by Schedule 7A of the
Companies Act 1985, the Directors have given consideration to the
requirements under this schedule to the Act and applied them where
appropriate for the limited size of the Company and its position.
Membership
The Committee consists of two Non Executive Directors, Felda
Hardymon (Chairman) and Hugh McCartney. The Committee, while
reserving the right of decision, consults with the Chairman and Chief
Executive about its proposals and is empowered to seek professional
advice, as it deems appropriate. The Board of Directors determines
the remuneration of the Non Executive Directors.
Objectives
The objectives of the Committee are:
•to set the remuneration of the Group’s Executive Directors 
to ensure that they are fairly rewarded for their individual
contribution to the Group’s overall performance; and
•to assist the Board by monitoring wider aspects of remuneration
as may from time to time be assigned to the Committee.
Remuneration Policy
The Committee is responsible for determining and reviewing 
a remuneration policy to attract and retain high quality executives
capable of achieving the Group’s objectives. The remuneration
package of executive directors consists of basic salary, a discretionary
annual bonus, pension, and other benefits. The individual
components of the remuneration package are discussed below.
Base Salary and Benefits
Salaries are reviewed annually and are set to reflect the
responsibilities, knowledge, skill and experience of the individual. 
In addition, the Group provides life assurance cover, health care
benefits and, in the case of executive directors, a car allowance.
Performance-related Bonuses
The approach for setting Directors’ bonuses is to establish a
framework at the beginning of the year, related to business
performance and profitability, as a base for the assessment of
achievements and performance bonus awards at year end. Senior
managers are assessed in a similar manner and reviewed by the
Remuneration Committee. 
Pension
The Company contributes to a defined contribution pension 
scheme for the Executive Directors.
Share Options
The Committee is also responsible for ensuring the proper
constitution and operation of the Group’s share option schemes.
These options are distributed to all Group employees. Details of
Directors’ share options in the year ending 31 March 2004 are
disclosed below.
Contracts of Service
All Directors’ service contracts can be terminated at six months’
notice. 
Directors’ Remuneration Report
for the year ended 31 March 2004
26 AIT Group plc Annual Report and Accounts 2004
Directors’ Interest in Shares
The beneficial and non-beneficial interests of the Directors at the end of the year in the share capital of the Company were as follows:
31 March 2004 31 March 2003
Ordinary 2.5p shares Ordinary 2.5p shares
Beneficial Warrants Beneficial Warrants
Director
Richard Hicks 3,911,941 926,757 2,305,207 926,757
Nick Randall 2,645,423 724,029 1,445,423 724,029
Geoffrey Probert 551,267 115,844 231,267 115,844
Matthew White 102,857 11,449 22,857 11,449
7,211,488 1,778,079 4,004,754 1,778,079 AIT Group plc Annual Report and Accounts 2004 27
Share Options
Options Options Market 
held at held at price Date 
31 March Granted 31 March Exercise at date from first Expiry
2003 in year 2004 price of grant exercisable date
Director
Nick Randall 360,000 – 360,000 £0.875 £0.635 20/10/03 20/10/12
Geoffrey Probert 100,000 – 100,000 £0.875 £0.635 20/10/03 20/10/12
Richard Hicks 100,000 – 100,000 £0.875 £0.635 20/10/03 20/10/12
Matthew White 100,000 – 100,000 £0.875 £0.635 20/10/03 20/10/12
Matthew White – 50,000 50,000 £0.74 £0.725 15/01/04 15/01/13
Felda Hardymon – 50,000 50,000 £0.74 £0.725 15/01/04 15/01/13
Robert Stavis – 50,000 50,000 £0.74 £0.725 15/01/04 15/01/13
Hugh McCartney – 50,000 50,000 £0.74 £0.725 15/01/04 15/01/13
Total 660,000 200,000 860,000
The closing price of an ordinary share on 31 March 2004 was 68.5p. The share price range during the year was 94p (high) and 9.5p (low).
Emoluments of Directors
The emoluments of Directors serving during the year ended 31 March 2004 are disclosed below:
SalaryPerformance Benefits Pension Total Total
and fees bonus* in kind contributions 2004 2003
££ £ £ £ £
Director
Executive
Nick Randall 193,000 150,000 4,932 26,250 374,182 179,769
Geoff Probert 125,000 100,000 2,000 12,000 239,000 125,703
Richard Hicks 37,500 100,000 1,225 – 138,725 25,000
Carl Rigby – – – – – 94,044
Carlos Rojas – – – – – 71,941
Gareth Bailey – – – – – 87,429
Sub T otal 355,500 350,000 8,157 38,250 751,907 583,886
Non Executive
Richard Hicks – – – – – 6,319
Hugh McCartney 16,000 – – – 16,000 2,667
Felda Hardymon 10,000 – – – 10,000 5,833
Robert Stavis 10,000 – – – 10,000 5,833
Garf Collins – – – – – 21,315
David T ebbs – – – – – 42,270
John Irvine – – – – – 53,913
Sub T otal 36,000 – – – 36,000 138,150
Total 391,500 350,000 8,157 38,250 787,907 722,036
Richard Hicks and Geoff Probert served as Executive Directors during the year.
* The performance bonus was a condition of the Directors’ service agreements and was payable upon AIT Group plc’s achievement 
of certain profit targets in the year ended 31 March 2004.
The Remuneration Committee has approved the Report of the Remuneration Committee.
By order of the Board
Felda Hardymon
Chairman of the Remuneration Committee
14 June 2004 We have audited the financial statements of AIT Group plc for the
year ended 31 March 2004 which comprise the Group Profit and
Loss Account, the Balance Sheets, the Group Cash Flow Statement,
the Group Statement of T otal Recognised Gains and Losses and the
related Notes numbered 1 to 22 together with the notes to the
Group Cash Flow Statement. These financial statements have 
been prepared under the accounting policies set out therein. 
This report is made solely to the Company’s members, as a body, 
in accordance with section 235 of the Companies Act 1985. Our
audit work has been undertaken so that we might state to the
Company’s members those matters we are required to state to them
in an auditors’ report and for no other purpose. T o 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
As described in the statement of directors’ responsibilities, the
Company’s directors are responsible for the preparation of the
financial statements in accordance with applicable United Kingdom
law and accounting standards. They are also responsible for the
preparation of the other information contained in the Annual Report
including the Director’s Remuneration Report. Our responsibility is 
to audit the financial statements in accordance with relevant United
Kingdom legal and regulatory requirements and auditing standards.
We report to you our opinion as to whether the financial statements
give a true and fair view and whether the financial statements have
been properly prepared in accordance with the Companies Act
1985. We also report to you if, in our opinion, the Directors’ Report
is not consistent with the financial statements, if 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
transactions with the Company and other members of the Group 
is not disclosed.
We read the Directors’ Report and the other information contained
in the Annual Report for the above year as described in the contents
section and consider the implications for our report if we become
aware of any apparent misstatements or material inconsistencies
with the financial statements. 
Basis of audit opinion
We conducted our audit in accordance with United Kingdom
auditing standards issued by the Auditing Practices Board. An audit
includes examination, on a test basis, of evidence relevant to the
amounts and disclosures in the financial statements. It also includes
an assessment of the significant estimates and judgments made 
by the directors in the preparation of the financial statements 
and of whether the accounting policies are appropriate to the
circumstances of the Company and of the Group, 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 of
the state of affairs of the Company and of the Group at 31 March
2004 and of the profit of the Group for the year then ended and
have been properly prepared in accordance with the Companies 
Act 1985.
Deloitte & T ouche LLP
Chartered Accountants and Registered Auditors
Reading 
14 June 2004
Independent Auditors’ Report to the Members of AIT Group plc
for the year ended 31 March 2004
28 AIT Group plc Annual Report and Accounts 2004 AIT Group plc Annual Report and Accounts 2004 29
Group Profit and Loss Account
for the year ended 31 March 2004
Exceptional Total
Before income/ including 
exceptional (charges) exceptionals*
items (Note 3) T otal as restated**
2004 2004 2004 2003
Note £’000 £’000 £’000 £’000
TURNOVER 2 19,648 – 19,648 17,584
Cost of sales (6,167) 395 (5,772) (18,044)
GROSS PROFIT/(LOSS) 13,481 395 13,876 (460)
Distribution costs (3,840) (234) (4,074) (6,060)
Administrative expenses (8,317) 824 (7,493) (31,791)
OPERATING PROFIT/(LOSS) 4 1,324 985 2,309 (38,311)
Share of associates’ operating losses –– – (141)
Loss on disposal of associate –– – (382)
PROFIT/(LOSS) ON ORDINARY ACTIVITIES 
BEFORE FINANCE CHARGES 1,324 985 2,309 (38,834)
Finance charges (net) 6 (291) (515)
PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION 2,018 (39,349)
T ax credit on profit/(loss) on ordinary activities 7 948 405
RETAINED PROFIT/(LOSS) FOR THE FINANCIAL 
YEAR AFTER TAXATION 2,966 (38,944)
Retained loss brought forward (40,182) (1,238)
RETAINED LOSS CARRIED FORWARD (37,216) (40,182)
Basic earnings/(loss) per ordinary share of 2.5p 8 8.06p (291.91)p
Diluted earnings/(loss) per ordinary share of 2.5p 8 7.49p (291.91)p
* The results for 2003 include exceptional charges of £23,374,000 (refer to note 3).
** The comparatives for 2003 have been restated as a result of the prior year adjustments detailed in note 20.
All amounts derive from continuing operations.
Group Statement of T otal Recognised Gains and Losses
Restated
2004 2003
Note £’000 £’000
Profit/(Loss) for the financial year 2,966 (38,944)
Exchange translation differences 19 427 261
Total recognised gains/(losses) in the year 3,393 (38,683)
Prior period adjustment 20 528 –
Total recognised gains/(losses) since last annual report 3,921 (38,683) Group Balance Sheet
as at 31 March 2004
30 AIT Group plc Annual Report and Accounts 2004
Restated Restated
2004 2004 2003 2003
Note £’000 £’000 £’000 £’000
FIXED ASSETS
Intangible assets – goodwill 9(a) 2,051 2,297
Intangible assets – licences 9(b) 300 –
T angible assets 10 1,293 1,302
3,644 3,599
CURRENT ASSETS
Debtors 12 3,191 4,114
Cash at bank and in hand 21 7,668 2,735
10,859 6,849
CREDITORS: 
Amounts falling due within one year 13 (3,614) (4,220)
NET CURRENT ASSETS 7,245 2,629
TOTAL ASSETS LESS CURRENT LIABILITIES 10,889 6,228
CREDITORS: Amounts falling due after more than one year 14 (5,024) (7,851)
PROVISIONS FOR LIABILITIES AND CHARGES 16 (4,525) (6,853)
ACCRUALS AND DEFERRED INCOME 17 (8,646) (10,364)
NET LIABILITIES (7,306) (18,840)
CAPITAL AND RESERVES
Called up share capital 18 3,296 2,655
Share premium 19 27,542 20,042
Other reserve 19 763 336
Merger reserve 19 (1,162) (1,162)
Profit and loss account 19 (37,216) (40,182)
Own shares held 19 (529) (529)
SHAREHOLDERS’ DEFICIT (7,306) (18,840)
Shareholders’ deficit may be analysed as:
Equity interests (9,345) (20,879)
Non equity interests 2,039 2,039
(7,306) (18,840) Group Cashflow Statement
for the year ended 31 March 2004
AIT Group plc Annual Report and Accounts 2004 31
2004 2003
Note £’000 £’000
NET CASH OUTFLOW FROM OPERATING ACTIVITIES (i) (1,025) (16,766)
Returns on investments and servicing of finance 
Interest received 103 132
Interest paid (216) (641)
Interest element of finance leases (52) (6)
(165) (515)
T axation
T axation received 367 1,077
Capital expenditure
Payments to acquire tangible fixed assets (28) (75)
Proceeds from the sale of tangible fixed assets – 59
Payments to acquire intangible fixed assets (630) –
(658) (16)
Acquisitions
Investments in associated undertakings (4) (710)
Proceeds from the sale of investments – 10
Loan recovery from former associate 500 –
496 (700)
Management of liquid resources
Decrease in cash deposits 280 –
CASH OUTFLOW BEFORE FINANCING (705) (16,920)
Financing 
Issue of new shares (net of expenses) 2,689 18,310
Repayment of bank loan – (2,000)
Loans received from Director and former Directors – 754
Repayment of IMA Loan Note (969) (1,518)
Issue of Convertible Loan Notes (net of expenses) 4,656 –
Finance lease repayments in year (458) (73)
Cash inflow from financing 5,918 15,473
INCREASE/(DECREASE) IN CASH IN THE YEAR (ii) & (iii) 5,213 (1,447)
The accompanying notes are an integral part of this group cash flow statement Notes to the Group Cashflow Statement
for the year ended 31 March 2004
32 AIT Group plc Annual Report and Accounts 2004
(i) RECONCILIATION OF OPERATING PROFIT/(LOSS) TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES 
Restated
2004 2003
£’000 £’000
Operating profit/(loss) 2,309 (38,311)
Depreciation charges 355 685
Impairment of goodwill – 10,434
Amortisation of goodwill 246 391
Amortisation of intangible licence 330 –
Provision against associate – 2,156
Profit on sale of fixed assets – (6)
Decrease in debtors 1,520 3,524
IMA Loan Note waiver (before costs) (969) –
(Decrease) in creditors (386) (498)
(Decrease)/Increase in accruals and deferred income (1,717) 784
(Decrease)/Increase in provisions (2,328) 4,044
Other 115 31
Loan recovery from former associate (see note 3) (500) –
Net cash outflow from operating activities (1,025) (16,766)
(ii) ANALYSIS OF MOVEMENT IN NET FUNDS/(NET DEBT)
At  Equipment At 
1April leases Interest EquityWaiver ofForeign 31March  
2003 Cash flow capitalised roll up conversion loan note exchange 2004
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Cash at bank and in hand 2,012 5,213 – – – – – 7,225
Cash deposits 723 (280) – – – – – 443
Bank term loan (6,000) – – – – – – (6,000)
IMA loan note (2,222) 969 – – – 941 312 –
Convertible Loan Notes – (5,000) – – 5,000 – – –
Finance leases – 458 (1,270) (53) – – – (865)
Directors’ and former 
Directors’ loans (754) – – (42) 796 – – –
Net funds/(net debt) (6,241) 1,360 (1,270) (95) 5,796 941 312 803
(iii) RECONCILIATION OF INCREASE/(DECREASE) IN CASH TO MOVEMENT IN NET FUNDS/(NET DEBT)
2004 2003
£’000 £’000
Increase/(decrease) in cash in the year 5,213 (1,447)
Decrease in cash deposits (280) –
Cash (outflow)/inflow from decrease/(increase) in debt and lease financing (3,573) 2,837
Change in net debt resulting from cash flows 1,360 1,390
Waiver of IMA Loan Note 941 –
Translation difference 312 261
Conversion of former Directors’ loans into equity 754 –
Equity conversion 5,000 –
New finance leases (1,323) –
Movement in net debt in year 7,044 1,651
Net (debt) as at beginning of year (6,241) (7,892)
Net funds/(debt) at end of year 803 (6,241) Company Balance Sheet
as at 31 March 2004
AIT Group plc Annual Report and Accounts 2004 33
2004 2004 2003 2003
Note £’000 £’000 £’000 £’000
FIXED ASSETS
Investments 11 1,863 1,863
CURRENT ASSETS
Debtors – amounts falling due within one year 12 – 44
Debtors – amounts falling due after one year 12 21,631 21,580
Cash at bank and in hand 6,653 –
28,284 21,624
CREDITORS: 
Amounts falling due within one year 13 (433) (29)
NET CURRENT ASSETS 27,851 21,595
TOTAL ASSETS LESS CURRENT LIABILITIES 29,714 23,458
CREDITORS: 
Amounts falling due after one year 14 – (754)
NET ASSETS 29,714 22,704
CAPITAL AND RESERVES
Called up share capital 18 3,296 2,655
Share premium 19 27,542 20,042
Profit and loss account 19 (1,124) 7
SHAREHOLDERS’ FUNDS 29,714 22,704
Shareholders’ funds may be analysed as:
Equity interests 27,675 20,665
Non equity interests 2,039 2,039
29,714 22,704
On behalf of the Board
Richard Hicks
Chairman
Nick Randall
Chief Executive Officer
Approved by the Board on 14 June 2004 Notes to the Financial Statements
for the year ended 31 March 2004
34 AIT Group plc Annual Report and Accounts 2004
1. Accounting policies
Basis of accounting
The financial statements have been prepared under the historical
cost convention and in accordance with the Companies Act 1985
and applicable UK accounting standards, applied consistently
throughout the year and the preceding year.
Basis of consolidation
The financial statements include the financial statements of the
Company and its subsidiary undertakings, AIT Limited, AIT (USA)
Inc, AIT Australia Group Pty Limited, AIT Group Qualifying
Employee Share Ownership Trust and AIT Group ESOP Trust. The
employee benefit trusts are consolidated on the basis of dominant
influence exercised by the officers of the Company over the
direction of the Trusts. For associated undertakings the Group
includes its share of profits and losses in the consolidated profit 
and loss account and its share of post acquisition retained profits 
or accumulated deficits in the consolidated balance sheet. The
consolidated financial statements are based on financial statements
which are coterminous with those of the parent company.
The acquisition method of accounting has been adopted. Under 
this method, the results of subsidiary and associated undertakings
acquired or disposed of in the year are included in the consolidated
profit and loss account from the date of acquisition or up to the date
of disposal. Goodwill arising on consolidation (representing the
excess of the fair value of the consideration given over the fair value
of the separable net assets acquired) is capitalised and written off
over a period of 10 years. Any excess of the aggregate of the fair
value of the separable net assets acquired over the fair value of the
consideration given (negative goodwill) is credited to the profit and
loss account in the period(s) expected to benefit.
The merger reserve represents the excess of the nominal value of
the shares issued by the Company over the nominal value of the
share capital and share premium of AIT Limited.
No profit and loss account is presented for AIT Group plc as
permitted by section 230 of the Companies Act 1985. The
Company’s retained loss for the year is disclosed in note 19.
Turnover
Turnover represents revenue recognised in the period net of value
added tax.
Licence fees are recognised when there is a binding arrangement
with a customer and there is entitlement to consideration based 
on performance. Licence sales to channel partners (resellers) are
recognised on the earlier of sales to end users and the licence
expiring. If after two years neither of these events has occurred and
payment has been made in full, the Directors assess the attributable
value of any existing or potential future obligations connected with
the sale of the licences or the partner relationship and carry forward
a deferral amount which recognises the attributable value of these
existing or potential obligations. The amount of licence is accounted
for net of amounts due for product maintenance and amounts due
to third parties. 
Royalties and maintenance are recognised in accordance with
contract terms on an accruals basis.
Contracts for the supply of services at fixed rates are accounted 
for as and when the work is performed, irrespective of the contract
duration. Revenue on fixed price contracts is taken while the
contract is in progress, having regard to the proportion of the
contract which has been completed at the balance sheet date.
Provision is made for foreseeable losses.
Amounts recoverable on contracts
Amounts recoverable on contracts represent revenue that has not
yet been invoiced to clients. Such amounts are separately disclosed
within debtors. Amounts billed but not recognised as revenue in the
reporting period, are shown as deferred income.
Research and development
Research and development expenditure is written off as it is
incurred.
Intangible fixed assets – licences
Acquired long term licences for the distribution rights to third party
software are capitalised and amortised to the profit and loss account
over the period in which economic benefit is received by the Group.
T angible fixed assets
T angible fixed assets are shown at original historical cost, net of
depreciation and any provision for impairment. Depreciation is
provided on a straight line basis at the following rates, calculated 
to write down the cost of tangible fixed assets over their estimated
useful lives. 
Leasehold improvements Shorter of lease or useful life
Fixtures and fittings 20%
Motor vehicles 25%
Computer equipment 33%
Investments
Long term investments are classified as fixed assets. Unlisted
investments and own shares are stated at cost less any provision 
for impairment.
Foreign currency transactions
Transactions in foreign currencies are translated at contracted rates
or the exchange rate on the date of the transaction. Assets and
liabilities in foreign currencies are translated at the year end rate of
exchange or, if hedged, at the forward contract rate. The exchange
differences are taken to the profit and loss account.
The results of overseas subsidiary undertakings are translated into
sterling at average rates for the year. The exchange differences are
taken to reserves and reported in the statement of total recognised
gains and losses.
Pensions
The Group operates a group personal pension scheme on a defined
contribution basis. Contributions payable for the year are charged 
to the profit and loss account. Differences between contributions
payable in the year and contributions actually paid are shown 
as either accruals or prepayments in the balance sheet. AIT Group plc Annual Report and Accounts 2004 35
1. Accounting policies continued
Employee share schemes
The issue of shares under employee share schemes is charged to 
the profit and loss account over the period to which participants’
performance relates. The charge is based on the market value of the
shares, less any consideration, at the time of granting rights thereto.
Annual adjustments are made for staff who have left the Group
during the year.
T axation
Current tax, including UK corporation tax and foreign tax, is provided
at amounts expected to be paid (or recovered) using the tax rates
and laws that have been enacted or substantially enacted by the
balance sheet date. 
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 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.
A net deferred tax asset is regarded as recoverable and therefore
recognised when it is more likely than not that there will be suitable
taxable profits from which the future reversal of the underlying
timing differences can be deducted.
Deferred tax is measured at the average tax rates that are expected
to apply in the periods in which the timing differences are expected 
to reverse, based on tax rates and laws that have been enacted or
substantively enacted by the balance sheet date.
Hire purchase and leasing commitments
Assets obtained under hire purchase contracts or finance leases are
capitalised in the balance sheet when they give rights approximating 
to ownership.
Those held under hire purchase contracts are depreciated over 
their estimated useful lives. Assets held under finance leases are
depreciated over their estimated useful lives or the lease term,
whichever is the shorter. The interest element of these obligations 
is charged to the profit and loss account over the relevant period.
The capital element of the future payments is treated as a liability.
Rentals paid under operating leases are charged to the profit and
loss account as incurred. Profit on sale and leaseback is amortised
over the period to the first rent review.  Notes to the Financial Statements
for the year ended 31 March 2004
36 AIT Group plc Annual Report and Accounts 2004
2. Segmental information
Turnover includes revenue recognised from licence, maintenance, support, integration and development. Throughout the year, turnover 
was derived from a single class of business, being the provision and maintenance of information technology products and solutions.
Turnover by geographical destination for the year was as follows:
2004 2003 
£’000 £’000
Europe 15,414 13,425
North America 3,449 2,791
Rest of World 785 1,368
19,648 17,584
Turnover by type of revenue for the year was as follows:
2004 2003 
£’000 £’000
Licence and maintenance revenues 11,002 8,429
Professional services revenues 8,646 9,155
19,648 17,584
Turnover, operating profit/(loss) and net assets by geographical source for the year were as follows:
United Kingdom USA Group
Restated Restated
2004 2003 2004 2003 2004 2003
£’000 £’000 £’000 £’000 £’000 £’000
Turnover 15,839 13,425 3,809 4,159 19,648 17,584
Operating profit/(loss) 2,015 (26,467) 294 (11,844) 2,309 (38,311)
Share of associates’ operating loss – (141) – – – (141)
Loss on disposal of associate – (382) – – – (382)
Finance income/(charges) 4 (17) (295) (498) (291) (515)
Profit/(loss) on ordinary activities before taxation 2,019 (27,007) (1) (12,342) 2,018 (39,349)
Net assets/(liabilities) 5,868 (6,036) (13,174) (12,804) (7,306) (18,840) AIT Group plc Annual Report and Accounts 2004 37
3. Exceptional items
Exceptional income/(charges) comprises:
Restated
2004 2003
£’000 £’000
Goodwill impairment – (10,434)
Write down of associate investment – (2,177)
Restructuring and reorganisation costs (615) (5,376)
Onerous leases and other commercial liabilities 159 (5,005)
Gain on IMA Loan Note settlement (see note 14) 941 –
Loan recovery from former associate 500 –
985 (22,992)
Loss on disposal of associate – (382)
985 (23,374)
The loan recovery relates to the receipt of £500,000 from a former associate company of the Group in settlement of a term loan obligation
which had been fully provided for in financial year 2003.
Exceptional charges in 2003 comprised £2,943,000 attributable to cost of sales, £674,000 attributable to distribution costs, £19,375,000
attributable to administrative expenses and £382,000 attributable to loss on disposal of associate. Prior year comparatives have been
restated to reflect the prior year adjustments described in note 20.
4. Operating profit/(loss)
The operating profit/(loss) is stated after charging/(crediting):
2004 2003
£’000 £’000
Hire of plant and machinery 223 559
Rents payable under operating leases 931 1,365
Other operating leases 639 3,411
Depreciation – owned assets 262 675
Depreciation – assets on finance lease contracts 93 10
Impairment of goodwill (note 3) – 10,434
Amortisation of goodwill 246 391
Amortisation of other intangible assets – licences 330 –
Profit on disposal of fixed assets – (6)
Auditors’ remuneration:
• Audit services – Deloitte & T ouche LLP 47 47
• Non-audit services – Arthur Andersen – 23
• Non-audit services – Deloitte & T ouche LLP 126 79
Research and development 4,357 6,332
In addition to the amounts noted above, Deloitte & T ouche LLP received fees totalling £40,000 in connection with the issue of shares in the
year (2003: £246,000), the charge for which has been debited to share premium account. Notes to the Financial Statements
for the year ended 31 March 2004
38 AIT Group plc Annual Report and Accounts 2004
5. Information regarding Directors and employees
2004 2003 
£’000 £’000
Directors’ emoluments
Remuneration 750 677
Pension contributions 38 45
788 722
2004 2003 
£’000 £’000
The highest paid Director received
Remuneration 348 165
Pension contributions 26 15
374 180
2004 2003 
£’000 £’000
Staff costs (including Directors)
Wages and salaries 9,400 19,561
Social security costs 941 1,661
Pension contributions 377 614
10,718 21,836
Wages and salaries and social security costs include £562,658 (2003: £3,858,464) of severance costs charged to restructuring and
reorganisation costs under exceptional items (refer to note 3).
2004 2003
number number
Operational and product development 109 233
Management & administration 22 49
Sales & marketing 28 61
159 343
The total number of employees at the year end was: 135 174
6. Finance charges
2004 2003 
£’000 £’000
Interest receivable and similar income 103 132
Interest payable
– on bank loan, overdrafts and other loans (342) (641)
– on finance lease agreements (52) (6)
(291) (515) AIT Group plc Annual Report and Accounts 2004 39
7. Tax on profit/(loss) on ordinary activities 
The tax credit on the profit/(loss) on ordinary activities for the year was as follows:
2004 2003 
£’000 £’000
Adjustment in respect of prior years, being total current tax credit 18 334
Recognition of deferred tax asset 930 –
Adjustment to deferred tax provision – 71
Total tax credit on profit/(loss) on ordinary activities 948 405
The difference between the total current tax credit shown above and the amount calculated by applying the standard rate of UK
Corporation tax to the profit/(loss) before tax is as follows:
Restated
2004 2003 
£’000 £’000
Profit/(loss) on ordinary activities before tax 2,018 (39,349)
Profit/(loss) on ordinary activities multiplied by the standard rate of UK corporation tax 606 (11,805)
Effects of:
Goodwill amortisation not deductible for tax purposes – 24
Higher tax rates on overseas earnings 145 (567)
Capital allowances in excess of depreciation (80) (2)
Expenses not deductible for tax purposes 607 2,256
Movement in short term timing differences (296) 3,691
(Decrease)/Increase in potential deferred tax asset not recognised (964) 6,403
State tax deduction (3) –
Adjustment in respect of prior years (33) (334)
Current tax credit (18) (334)
The tax charge in future periods will be principally affected by the Group’s ability to generate taxable profits. As at 31 March 2004 there
were estimated tax losses in the UK, including associates’ losses of £23,240,000 (2003: £22,144,000), and overseas losses of £2,074,000
(2003: £4,322,000).
Deferred Tax
Deferred tax assets have been recognised in respect of tax losses that are likely to be utilised in the year to 31 March 2005. A reconciliation
of the deferred tax assets contained in the Group balance sheet and shown in note 12 is given below:
2004 2003 
£’000 £’000
Deferred tax asset brought forward – –
Recognised in the year 930 –
Deferred tax asset carried forward 930 –
There were unrecognised potential deferred tax assets as set out below:
2004 2003 
£’000 £’000
Accelerated depreciation 51 –
Short-term timing differences 3,332 –
T ax losses carried forward 6,941 11,288
10,324 11,288
Due to the losses made in the year ended 31 March 2002, losses carried forward have generated a deferred tax credit of £930,000, which
represents the value of the tax saving throughout the Group against forecast profits for the year ended 31 March 2005. In accordance with
FRS19 the Directors have not recognised deferred tax assets for future accounting periods. The assets will be recognised in future periods 
as their recoverability becomes foreseeable. There were no unrecognised deferred tax liabilities at either year end. Notes to the Financial Statements
for the year ended 31 March 2004
40 AIT Group plc Annual Report and Accounts 2004
8. Earnings/(loss) per share
Earnings/(loss) per share has been calculated in accordance with Financial Reporting Standard 14 by dividing the consolidated profit/(loss)
after tax attributable to shareholders by the weighted average number of 2.5p ordinary shares outstanding during the year.
Diluted earnings/(loss) per share has been calculated on the same basis as above except that the weighted average number of 2.5p ordinary
shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares has been added to the
denominator. For a loss making financial period where there are outstanding share options or warrants, diluted loss per share would only be
increased by the exercise of out-of-the-money options or warrants. Since it seems inappropriate to assume that option holders or warrant
holders would act irrationally, out-of-the-money options or warrants are assumed not to be dilutive in a loss making period. There are no
changes to the profit/(loss) (numerator) as a result of the dilutive calculation. 
The calculations of earnings/(loss) per share are based on profit on ordinary activities after taxation of £2,966,000 (2003: loss £38,944,000).
Comparative figures for 2003 loss per share and loss on ordinary activities after taxation have been restated to reflect the prior year
adjustments described in note 20.
Adjusted earnings/(loss) per share information has been disclosed to provide a more comparable indication of the underlying trading
performance. 
The earnings per share information has been calculated as follows:
Restated
2004 2003 
£’000 £’000
Profit/(loss) after taxation 2,966 (38,944)
Adjustment to exclude amortisation of goodwill 246 391
Adjustment to exclude exceptional items (985) 23,374
Adjustment to exclude recognition of deferred tax asset (930) –
Adjusted profit/(loss) 1,297 (15,179)
2004 2003
number number
Weighted average number of shares in issue 36,782,407 13,340,969
Effect of dilutive potential ordinary shares – share options 100,969 –
Effect of dilutive potential ordinary shares – warrants 2,725,657 –
Diluted weighted average number of shares 39,609,033 13,340,969
Restated
2004 2003 
pence pence
Basic earnings/(loss) per share 8.06 (291.91)
Dilution impact (0.57) –
Diluted earnings/(loss) per share 7.49 (291.91)
Adjustment to exclude amortisation of goodwill 0.62 2.93
Adjustment to exclude exceptional items (2.49) 175.20
Adjustment to exclude recognition of deferred tax asset (2.35) –
Adjusted diluted earnings/(loss) per share 3.27 (113.78) AIT Group plc Annual Report and Accounts 2004 41
9 (a). Intangible assets – goodwill
£’000
Group
COST
At 1April 2003 and 31 March 2004 13,832
AMORTISATION
At 1 April 2003 11,535
Charge for year 246
At 31 March 2004 11,781
NET BOOK VALUE
At 31 March 2004 2,051
At 31 March 2003 2,297
9 (b). Intangible assets – licences
£’000
Group
COST
At 1 April 2003 –
Additions 630
At 31 March 2004 630
AMORTISATION
At 1 April 2003 –
Charge for year 330
At 31 March 2004 330
NET BOOK VALUE
At 31 March 2004 300
At 31 March 2003 –
10. Tangible fixed assets
Leasehold Fixtures Computer
improvements and fittings equipment T otal
£’000 £’000 £’000 £’000
Group
COST
At 1 April 2003 1,941 240 428 2,609
Additions 3– 362 365
Exchange adjustment (3) (7) (63) (73)
At 31 March 2004 1,941 233 727 2,901
DEPRECIATION
At 1 April 2003 788 182 337 1,307
Charge for year 159 37 159 355
Exchange adjustment (1) (8) (45) (54)
At 31 March 2004 946 211 451 1,608
NET BOOK VALUE
At 31 March 2004 995 22 276 1,293
At 31 March 2003 1,153 58 91 1,302
Fixed assets, included in the above, which are held under finance lease contracts comprises computer equipment with a net book value 
of £243,634 (2003: £nil) which was depreciated by £93,704 (2003:£nil).
There were no capital commitments contracted but not provided for at the year end. Notes to the Financial Statements
for the year ended 31 March 2004
42 AIT Group plc Annual Report and Accounts 2004
11. Investments
£’000
Company
Cost and net book value
At 1April 2003 and 31 March 2004 1,863
Shares in Group undertakings Country of registration or incorporation % of share capital & voting rights held Principal activity
AIT Limited England & Wales 100% Development and sale of 
computer software and services
AIT Quest Trustee Limited England & Wales 100% T rustee for AIT Group plc’s 
Employee Share Ownership Trust
The Group also owns, through its subsidiaries, the following companies:
Shares in Group undertakings Country of registration or incorporation % of share capital & voting rights held Principal activity
AIT (USA) Inc. Ohio, USA 100% Development and sale of 
computer software and services
12. Debtors
2004 2003
£’000 £’000
Group
Trade debtors 1,826 2,826
Amounts recoverable on contracts 53 344
Deferred tax asset 930 –
Corporation tax recoverable – 333
Prepayments and other debtors 382 611
3,191 4,114
2004 2003
£’000 £’000 
Company
Amounts falling due within one year
Corporation tax – 44
2004 2003
£’000 £’000 
Company
Amounts falling due after more than one year
Amounts owed by Group undertakings 21,631 21,580 AIT Group plc Annual Report and Accounts 2004 43
13. Creditors: amounts falling due within one year
2004 2003
£’000 £’000
Group
Bank loan (refer note 14) 1,500 1,125
T rade creditors 563 1,897
Social security and other taxes 1,162 1,150
Finance lease contracts 341 –
Other creditors 48 48
3,614 4,220
2004 2003
£’000 £’000
Company
Other creditors 433 29
14. Creditors: amounts falling due after more than one year
2004 2003
£’000 £’000
Group
Bank loan repayable between two and five years 4,500 4,875
Finance lease contracts repayable between two and five years 524 –
Directors’ and former Directors’ Loans – 754
IMA Loan Note – 2,222
5,024 7,851
The bank loan is scheduled as repayable in 16 quarterly instalments commencing April 2004. The bank loan attracts interest at 2% above
National Westminster Bank base rates.
The IMA Loan Note balance at 31 March 2003 was US$3,500,000. During the year a payment of £969,000 (US$1,750,000) was made,
together with costs of £28,000 (US$50,000), in full settlement of the IMA Loan Notes. An exceptional gain of £941,000 was realised on 
the settlement of this liability.
The Directors’ and former Directors’ loans were converted into ordinary shares during the year (see note 18).
2004 2003
£’000 £’000
Company
Directors’ and former Directors’ Loans – 754
15. Operating lease commitments
At 31 March 2004 there were annual commitments under operating leases as follows:
Land and buildings Other leases
2004 2003 2004 2003
£’000 £’000 £’000 £’000
Expiring within one year 257 60 143 982
Expiring between one and five years – 303 304 662
Expiring in more than five years 942 1,223 6 –
1,199 1,586 453 1,644 Notes to the Financial Statements
for the year ended 31 March 2004
44 AIT Group plc Annual Report and Accounts 2004
16. Provisions for liabilities and charges
Onerous 
leases/other 
commercial 
liabilities
£’000
Group
At 1 April 2003 6,853
Utilisation of provision – non recurring settlements (838)
Utilisation of provision – other (1,119)
Net release of unutilised provision (321)
Exchange movement (50)
As at 31 March 2004 4,525
The provision for onerous leases and other commercial liabilities represents provision for commitments of the Group that are not expected 
to generate future economic benefit. These commitments include leases for property and other operating assets which the Directors have
assessed as excessive following the restructuring of the business, supply contracts for outsourced staff on a take or pay basis which the
Directors consider to be onerous and provision for the resolution of commercial matters with business partners. The provision represents the
Directors’ estimate of the costs to the Group of settling these commitments. The Directors expect the provision for onerous leases and other
commercial liabilities to be utilised over the course of the four financial years ending 31 March 2008.
17 . Accruals and deferred income 
2004 2003
£’000 £’000 
Falling due within one year
Accruals 3,005 2, 640
Deferred Income 5,367 7,218
8,372 9,858
Falling due after one year
Deferred Income 274 506
8,646 10,364
18. Called-up share capital
Authorised
Nominal 2004 2003
Number Class value £’000 £’000
80,642,081 Ordinary 2.5p 2,016 2,016
2,038,947,966 Deferred 0.1p 2,039 2,039
4,055 4,055
Allotted, issued and fully paid
Nominal 2004 2003
Number Class value £’000 £’000
50,290,820 (2003: 24,657,210 shares) Ordinary 2.5p 1,257 616
2,038,947,966 Deferred 0.1p 2,039 2,039
3,296 2,655 AIT Group plc Annual Report and Accounts 2004 45
18. Called-up share capital continued
On 24 June 2003 the Company issued unlisted unsecured convertible Loan Notes with an aggregate value of £5 million in order to
strengthen its balance sheet and to provide additional working capital. The Loan Notes were convertible into ordinary shares at a price 
of 25 pence per share, representing a discount of approximately 7.4% to the closing mid-market price of 24 June 2003. The Loan Notes
were redeemable in whole or in part at any time between 1 October 2004 and 10 July 2008 and they attracted interest at LIBOR minus 
2% if not converted prior to 31 October 2003. The Loan Notes carried a redemption premium of at least three times the principal value. 
The Loan Notes were automatically convertible upon shareholder approval. At an extraordinary general meeting on 16 September 2003, the
Company’s shareholders approved the resolutions to effect the allotment of 20,000,000 ordinary shares upon conversion of the Loan Notes.
On 21 August 2003 Richard Hicks, Garfield Collins and Carl Rigby (the latter two being former directors of the Company) entered into
agreements with the Company in respect of loans due to them. In consideration of the release of the Company’s obligation to repay such
loans (and accrued interest), the individuals were allotted 1,061,730 ordinary shares in settlement of their aggregate loan balances of
£796,298 including accrued interest. The effective conversion price was 75 pence per share representing a discount of approximately 4.5%
to the closing mid-market price on 21 August 2003. The principal amounts of these loans were due for repayment between 1 August 2003
and 1 August 2004. The conversion of these loans was approved by shareholders at an extraordinary general meeting of the Company on 
16 September 2003.
On 15 January 2004, the Company announced the placing of 4,571,880 ordinary shares with institutional investors at a price of 60 pence
per share. The shares were issued for a total cash consideration of £2,743,128 (before costs) including share premium arising of £2,628,831
for the purposes of providing funds for repayment of the IMA Loan Notes and to provide additional funds to further strengthen the
Company’s balance sheet.
Share options in issue at 31 March 2004, all of which may normally be exercised up to nine years from the date on which they first vest, 
are shown below:
Option Exercisable 
Grant date price from Number
20-Oct 02 £0.875 20-Oct-03 1,723,100
25-June-03 £0.275 25-June-04 255,000
15-Jan-04 £0.74 15-Jan-05 298,000
30-Mar-04 £0.705 30-Mar-05 24,000
2,300,100
In addition to the share options noted above the Company had 554,613 share options in issue which pre-dated the capital reorganisation
carried out during the financial year 2003. The exercise price of those share options ranged from £44.50 to £339.50 and they were
exercisable at various points from 1 December 2000 to 1 April 2005. These options were cancelled during the year.
There are also 4,865,990 warrants in issue, at a subscription price of 25p. The subscription rights conferred by warrants will be capable of
exercise at any time between 7 September 2003 and 7 September 2009. Ordinary shares allotted pursuant to any exercise of subscription
rights conferred by the existing warrants shall be allotted and issued fully paid; shall not rank to any dividends or other distributions
declared, paid or made on the ordinary share capital of the Company by reference to a record date prior to the date of exercise of such
subscription rights; but subject thereto, shall otherwise rank pari passu in all other respects with the ordinary shares then in issue.
In the event that the number and/or nominal value of ordinary shares to be subscribed will be increased/decreased, the warrantholder’s
proportion of voting rights in the Company and rights to participate in the profits and assets of the Company will be maintained.
Certain events may trigger adjustments to the number of warrants and/or the subscription price, including capital reorganisation, or where
the Company issues shares at a price lower than the warrant subscription price or the Company issues shares at a subscription price lower
than market price per share on the date of the relevant offer. Notes to the Financial Statements
for the year ended 31 March 2004
46 AIT Group plc Annual Report and Accounts 2004
19. Shareholders’ (deficit)/funds
Restated
Restated Profit & 
Share Share Other Merger Own Loss Restated
capital premium reserve reserve Shares Account Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Group
At 1 April 2003 2,655 20,042 336 (1,162) (529) (40,182) (18,840)
Profit ––––– 2,966 2,966
Shares issued 641 7,898 – – – – 8,539
Costs of share issue – (398) – – – – (398)
Foreign exchange – – 427 – – – 427
At 31 March 2004 3,296 27,542 763 (1,162) (529) (37,216) (7,306)
Company
At 1 April 2003 2,655 20,042 – – – 7 22,704
Loss ––––– (1,131) (1,131)
Shares issued 641 7,898 – – – – 8,539
Costs of share issue – (398) – – – – (398)
At 31 March 2004 3,296 27,542 – – – (1,124) 29,714
20. Prior year adjustments 
Bad debt expense in the comparative figures being for the year ended 31 March 2003, and debtors as at 31 March 2002, have been reduced
by £1,350,000 to reflect the consequences of a prior year adjustment. This adjustment has been necessary to reflect more accurately the
level of entitlement to consideration in respect of licence revenues in the year to 31 March 2002 and thus to reduce turnover in that year
and to reduce debtors as at 31 March 2002. The bad debt expense originally recognised in 2003 is therefore not required. There is no impact
on the 2003 balance sheet, or cashflows for any period.
The prior year comparatives have been restated to reflect the application of Urgent Issues Task Force Abstract 38, which requires own shares
held to be shown as a deduction from shareholders funds. As a result of this adjustment the impairment charge of £528,000 that was
included in exceptional administrative expenses in 2003 is no longer required as the own shares are held at their original cost on the face 
of the balance sheet. 
21. Financial instruments
Group policy prohibits speculative transactions and no trading activity in financial instruments is undertaken. Treasury policies are determined
by the Chief Financial Officer, based on forecast business requirements, and are reviewed regularly by the Board. 
Certain financial assets, such as investments in subsidiary undertakings are excluded from the scope of these disclosures. As permitted 
by FRS 13, short term debtors and creditors have been excluded from the disclosures, except for the currency disclosures.
a) Interest rate profile
All of the Group’s financial assets, comprising £7,508,370 denominated in Sterling and £159,390 denominated in US Dollars 
(2003: £2,270,653 denominated in Sterling and £465,103 denominated in US Dollars), are held at floating interest rates.
The financial assets of the Group comprise cash and cash equivalents of £7,667,759 (2003: £2,735,756). Of this amount £442,145 
was held on deposit not available on 24 hours notice (2003: £722,586).
Details of the interest rate profile of the Group’s bank loan obligations are shown in Note 14. In addition the Group has finance lease
obligations of £864,959 (2003: £nil), which are classified as financial liabilities and are held at fixed interest rates.
b) Currency exposures
Substantially all of the monetary assets and liabilities of the Group are denominated in the functional currency of the operating unit
involved.
22. Fair values of the Group’s financial assets, liabilities and instruments
As at 31 March 2004 the book values of the Group’s financial assets, financial liabilities and financial instruments were not materially
different to their estimated fair values. AIT Group plc Annual Report and Accounts 2004 47
Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting of AIT Group plc (“the Company”) will be held at The Smith Centre, The Fairmile,
Henley-on-Thames, Oxfordshire RG9 6AB on 12 August 2004 at 10.00 am, for the following purposes:
Ordinary Business 
To consider and, if thought fit, to pass Resolutions 1 to 6 (inclusive) as ordinary resolutions of the Company:
Resolution 1
To receive and adopt the accounts of the Company for the financial year ended 31 March 2004, together with the reports of the Directors 
of the Company and the auditors of the Company on those accounts.
Resolution 2
To receive, adopt and approve the remuneration report for the financial year ended 31 March 2004.
Resolution 3
To re-appoint Deloitte & T ouche LLP as auditors of the Company to hold office until the conclusion of the next general meeting at which
accounts are laid before the Company and to authorise the Directors of the Company to fix and determine Deloitte & T ouche LLP’s
remuneration for the ensuing year.
Resolution 4
To re-elect Richard Hicks as a Director of the Company.
Resolution 5
To re-elect Rob Stavis as a Director of the Company.
Resolution 6
To re-elect Matthew White as a Director of the Company.
Special Business
To consider and, if thought fit, to pass the following resolutions, of which Resolutions 7 and 8 will be proposed as ordinary resolutions 
of the Company and Resolution 9 as a special resolution of the Company: 
Resolution 7
That the authorised share capital of the Company be increased by £281,000 from £4,055,000 to £4,336,000 by the creation of 11,240,000
ordinary shares of 2.5p each in the Company ranking pari passu with the existing ordinary shares of 2.5p each in the Company.
Resolution 8
That in substitution for any existing authority:
(a) in accordance with Section 80 of the Companies Act 1985 (the “Act”) the Directors be and are hereby generally and unconditionally
authorised to exercise all the powers of the Company to allot relevant securities within the terms of the following restrictions and
provisions, namely:
(i) this authority shall (unless previously revoked, varied or renewed by the Company in general meeting) expire on the earlier of the
conclusion of the next Annual General Meeting of the Company following the passing of this Resolution and the date 15 months
after the date of passing of such Resolution; and
(ii) this authority shall be limited to the allotment of relevant securities up to an aggregate nominal amount of £500,000; and
(b) for the purpose of sub-paragraph (a) above:
(i) the said power shall allow and enable the Directors to make an offer or agreement which would or might require relevant securities
to be allotted after such expiry and the Directors may allot relevant securities in pursuance of such an offer or agreement as if the
power conferred hereby had not expired; and
(ii) words and expressions defined in or for the purpose of Part IV of the Act shall bear the same meaning herein.
Resolution 9
That:
(a) conditionally upon the passing of Resolution 8 above and in accordance with Section 95 of the Act, the Directors be and are hereby
given power to allot equity securities for cash pursuant to the authority conferred by Resolution 8 above as if sub-section (1) of Section
89 of the Act did not apply to any such allotment provided that:
(i) the power hereby granted shall be limited:
(aa) to the allotment of equity securities in connection with or pursuant to an offer by way of rights to the holders of shares in the
Company and other persons entitled to participate therein, in the proportion (as nearly as may be) to such holders’ holdings 
of such shares (or, as appropriate, to the number of shares which such other persons are for these purposes deemed to hold)
subject only to such exclusions or other arrangements as the Directors may feel necessary or expedient to deal with fractional
entitlements or the regulations or requirements of any recognised regulatory body in any territory;
(bb) to the grant of options to subscribe for shares in the Company and the allotment of such shares pursuant to the exercise 
of options granted, under the terms of any share option scheme adopted or operated by the Company; and 
(cc) to the allotment of equity securities, otherwise than pursuant to sub-paragraphs (aa) and (bb) above, up to an aggregate
nominal amount of £125,727;
(ii) the power hereby granted shall expire on the earlier of the conclusion of the next Annual General Meeting of the Company following
the passing of this Resolution and the date 15 months after the passing of such Resolution; (b) (i) the said power shall allow and enable the Directors to make an offer or agreement before the expiry of the said power which would
or might require equity securities to be allotted pursuant to such offer or agreement after such expiry as if the power conferred
herein had not expired; and
(ii) words and expressions defined in or for the purpose of Part IV of the Act shall bear the same meaning herein.
By order of the Board Registered Office
The Smith Centre 
The Fairmile
Matthew White Henley-on-Thames
Company Secretary Oxfordshire, RG9 6AB
16 July 2004
Notes:
(1) Only those shareholders registered in the register of members of the Company as at 10.00 am on 10 August 2004 shall be entitled to attend and vote at
the meeting in respect of the number of shares registered in their name at that time. Changes to entries on the relevant register of securities after 10.00
am on 10 August 2004 shall be disregarded in determining the rights of any person to attend or vote at the meeting.
(2) Any shareholder who is entitled to attend and vote at this meeting is entitled to appoint a proxy to attend and, on a poll, vote on his or her behalf. A proxy
need not be a shareholder of the Company. Completion and return of the Form of Proxy will not preclude a shareholder from attending and voting at the
meeting.
(3) A Form of Proxy is enclosed which to be effective must be completed and received by the Company’s registrars at, Capita Registrars, Proxy Department,
PO Box 25, Beckenham, Kent, BR3 4BR, not later than 10.00 am on 10 August 2004.
(4) The following documents are available for inspection on any day (except Saturday, Sunday and Bank Holidays) during usual business hours at the
registered office of the Company and will, on the date of the Annual General Meeting, be available for inspection from 15 minutes prior to, until the
conclusion of the meeting:
(i) the register of interests of Directors (and their family interests) in the share capital of the Company;
(ii) copies of all the contracts of service and letters of engagement between the Directors of the Company and the Company or any of its subsidiaries;
and
(iii) the Memorandum and Articles of Association of the Company.
In view of the voting and quorum requirements for the Annual General Meeting, shareholders are particularly requested to complete and return their Forms 
of Proxy whether or not they intend to be present at the Annual General Meeting.
The Annual General Meeting starts at 10.00 am, however the doors to the Meeting will be open from 9.45 am and you may wish to arrive by 9.45 am to take
your seat in good time for the start of the Meeting.
Annual Report and Accounts and Remuneration Report (Resolutions 1 and 2)
The Directors of the Company (“the Directors”) must lay the accounts of the Company for the financial year ended 31 March 2004, the report of the Directors
and the report of the auditors of the Company on those accounts before the Meeting.
In addition, Resolution 2 provides for the remuneration report for the financial year ended 31 March 2004 to be received, adopted and approved 
by the Meeting.
An extract from the auditors’ report on page 28 of the Annual Report and Accounts will be read at the Meeting.
Appointment and Remuneration of Auditors (Resolution 3)
The Company is required to appoint auditors at each general meeting at which accounts are laid before the Company, to hold office until the next such
meeting. Resolution 3 proposes the re-appointment of Deloitte & T ouche LLP as auditors of the Company and authorises the Directors to fix and determine
their remuneration for the ensuing year.
Re-election of Directors (Resolutions 4, 5 and 6)
Under the regulations of the Company’s articles of association concerning retirement by rotation and re-election, Richard Hicks and Rob Stavis are both
required to retire as Directors and are both recommended by the Directors for re-election.
Matthew White has been appointed since the Company’s last Annual General Meeting and is offering himself for re-election. Brief biographical details 
of the Directors appear on page 21 of the Annual Report and Accounts.
Special Business (Resolutions 7, 8 and 9)
Resolution 7 is to increase the authorised share capital of the Company in order to ensure that there is sufficient headroom to allow for the issue of shares
pursuant to the exercise of warrants granted by the Company to certain investors as part of the re-financing of the Company in September 2002, the issue of
shares pursuant to the exercise of options granted and to be granted under the terms of share option schemes adopted or operated by the Company (including
a long term incentive plan to be established for the benefit of members of the Company's management) and in order to give the Board flexibility for the future.
Resolution 8 is to confer on the Directors authority to allot ordinary shares pursuant to Section 80 of the Act, amounting to approximately one-third of the
anticipated issued share capital of the Company (as diluted). 
Resolution 9 is to confer on the Directors power to allot ordinary shares as if the statutory pre-emption rights set out in Section 89 of the Act did not apply to
such allotments plus, in order to give the Board flexibility for the future, an additional authority amounting to approximately 10% of the current issued share
capital of the Company. 
Notice of Annual General Meeting
48 AIT Group plc Annual Report and Accounts 2004 AIT makes Customer Interaction software that
helps companies be more profitable by serving
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Our software is used by organisations that 
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AIT software addresses the two greatest
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Interaction
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Increasing workplace 
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retention by improving the 
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Interaction Zones
Increasing the  
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campaigns through  
intelligent interactions
 
Enforcing compliance  
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Keeping them loyal
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Main Board
Non Executives
Richard Hicks
Non Executive Chairman
Felda Hardymon
Non Executive Director
Rob Stavis
Non Executive Director
Hugh McCartney
Non Executive Director
Geoff Probert
Non Executive Director
Executives
Nick Randall
Chief Executive Officer
Matthew White
Chief Financial Officer
Company Secretary
Tim Shaw
Chief T echnology Officer
Paul Frederick
EVP Business Development
Tracy Isacke
General Manager, EMEA
Chris Lowther
General Manager, Asia Pacific
Advisors
Auditors
Deloitte & Touche LLP
Abbots House, Abbey Street,
Reading, Berkshire RG1 3BD
Solicitors
Taylor Wessing
Carmelite, 50 Victoria Embankment,
Blackfriars, London EC4Y 0DX
Stockbrokers & Nominated Advisors
Arbuthnot Securities Limited
Arbuthnot House, 20 Ropemaker Street,
London EC2Y 9AR
Principal Bankers
National Westminster Bank plc
Abbey Gardens, 4 Abbey Street,
Reading, Berkshire RG1 3BA
Registrars
Capita Registrars
Northern House, Woodsome Park,
Fenay Bridge, Huddersfield HD8 0LA
Richard Morrison
General Manager, Americas
Gareth Evans
Group Operations Director
Sarah Haskell
Group Marketing Director
Mike McGroarty
General Counsel
Executive Management T eam
Registered Office
The Smith Centre, The Fairmile
Henley-on-Thames, Oxfordshire RG9 6AB
Company number
03358035 AIT Group plc
Annual Report and Accounts
for the year ended 31 March 2004
AIT Group plc
The Smith Centre
The Fairmile
Henley-on-Thames
Oxfordshire, RG9 6AB
T: +44 (0)1491 416600
F: +44 (0)1491 416601
E: contactus@aitgroup.com
W:www.aitgroup.com
AIT (USA) Inc 
639 Research Parkway
Suite 100
Meriden, CT 06450
USA
T: +44 203 630 1942
F: +44 203 630 7094
E: contactus@aitgroup.com
Asia Pacific
AIT (Aspac) Pte Ltd
P O Box 162
Singapore, 911206
Singapore
T: +65 9752 1759
E: ait_aspac@aitgroup.com
AIT Group plc Annual Report and Accounts for the year ended 31 March 2004