Job:	 8921_PG_06	AR_cover_AW.indd	 Proof:	 07	 Proof Read by:
Operator:	Qd	 Date:	 05.04.2007	
Server:	 studio	3	 Set–up:	 Rob	 First	Read/Revisons
Annual Report and  
Accounts 2006
THIS ANNUAL REPORT 
IS FOR THE SPECIAL 
ATTENTION OF:
↘
 
  Job:	 8921_PG_06	AR_cover_AW.indd	 Proof:	 07	 Proof Read by:
Operator:	Qd	 Date:	 05.04.2007	
Server:	 studio	3	 Set–up:	 Rob	 First	Read/Revisons
THIS REPORT IS PRINTEd USINg  
PUNCH gRAPHI x TECHNOLOg IES:
Personalised digital colour cover 
with Xeikon 6000, FA toner and 
X-800 Digital Front-End
Text pages  
are printed offset using prepress 
equipment from basysPrint  
UV-setter serie 7.
Punch Graphix designs, develops and delivers 
digital colour printing and prepress equipment, 
software, consumables, application support and 
services for the global graphics industry. 
With manufacturing operations in Europe and 
Asia and a worldwide sales and service network, 
Punch Graphix operates through two business 
lines, with leading brands in their own markets: 
Xeikon and basysPrint.
With a clear-minded focus on R&D, Punch 
Graphix is solely dedicated to customer 
satisfaction and aims to deliver high quality, 
cost-effective and leading edge graphic 
excellence that goes beyond expectations.
Beyond graphic excellence
ov ERviEW 
01 2006 Highlights
02 At a Glance
04 Geographic o verview
06  Chairman’s Statement
07  A Successful Year
08 Chief Executive’s Review
buSin ESS REviEW
10 business Review
12  Financial Review
13 Directors
 
Gov ERnAn CE
14 Directors’ Report
16  Corporate Governance Report
18  Remuneration Report
20   Social and Environmental Responsibility 
Report
22  Auditors’ Report
FinAn CiAl S tAt EmEnt S
23 Consolidated income Statement
24  Consolidated balance Sheet
25  Company balance Sheet
26  Consolidated Cash Flow Statement
27  Company Cash Flow Statement
28   Consolidated Statement of Changes  
in Equity
28   Company Statement of Changes  
in Equity
29  Accounting Policies
35  n otes to Accounts
53  Secretary and Advisors to the Company
54  n otice of Annual General meeting Punch Graphix plc 
Annual Report and Accounts 2006
01
Job:	 8921_PG_06	AR_front_AW.indd	 Proof:	 10	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
2006 HiGHli GHts
•   Reinforced technology leadership in chosen  
market segments, through new Xeikon 6000,  
FA (form adapted) colour toner range, X-800 V1.7 
digital front-end and new basysPrint DSI³
•    Invested in new facilities and equipment for the 
future: Heultje (Belgium), Boizenburg (Germany), 
Shenzhen (China)
•   Market reach extended through further 
acquisitions, recruitment/training of sales force
•   Demonstrated focus on relevant market segments 
based on an integrated approach including 
finishing and software
 Year Ended Year Ended  
€m 31 December 2006 31 December 2005 Growth
Revenues 173.340 158.263 +10%
EBITDA 41.695 34.760 +20%
Operating Profit 22.482 21.477 +5%
Profit before tax 21.212 18.453 +15%
Net Profit (equity interests) 15.901 12.424 +28%
Earning Per Share (euro cent) 15.55 13.32 +17%
↘
up 10%
2006: €173m 2005: €158m
REVENUE
up 15%
2006: €21m 2005: €18m
PROFit BEFORE t AXAti ON
up 5%
2006: €22m 2005: €21m
OPERAti NG PROFit
EARNiNG PER s HARE
up 1 7%
2006: 15,55 euro cent
2005: 13,32 euro cent Punch Graphix plc 
Annual Report and Accounts 2006
02
Job:	 8921_PG_06	AR_front_AW.indd	 Proof:	 10	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
At A GlANCE
Punch Graphix operates through two 
business lines with leading brands in their 
own markets 
diGitAl COlOUR PRiNtiNG sOlUtiONs
Under the Xeikon brand, Punch Graphix develops, 
manufactures and distributes high-end digital colour 
printing systems, prepress and operating software, and 
consumables for the global printing market. Solutions 
include print-on-demand, direct marketing and 
transactional applications for the document printing 
sector and packaging, label and speciality applications 
for the industrial sector.
Xeikon engines are web-fed, combining unique widths, 
with virtually unlimited sheet length and the widest 
variety of substrates. Using electro-photographic 
technology, they are environmentally friendly as no 
solvent is used. They deliver high levels of productivity, 
printing double sided in one pass, and have a scaleable, 
modular, digital front-end that combines extensive 
prepress functionality with a wide range of variable 
data printing processing capabilities. 
Xeikon provides its 
customers with integrated 
solutions tailored to specifi c 
markets, a vital distinction 
to the competition
Dream. Dare. Do.
KEY stRENGtHs
•  The pioneer of ‘Digital colour printing’ with outstanding 
productivity, fl exibility and print quality
•  A range of innovative products and services, constantly 
evolving in response to customer input
•  State of the art digital front-end, pre- and post-press solutions
that seamlessly integrate into almost any workfl ow
↘ Punch Graphix plc 
Annual Report and Accounts 2006
03
Job:	 8921_PG_06	AR_front_AW.indd	 Proof:	 10	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
basysPrint provides the 
perfect answer to the mid 
to high volume printers of 
books, magazines, packaging 
and other commercial 
applications, who require 
the highest reproduction 
quality and trust their long 
experience in cost competitive 
UV sensitive plates
PREPREss sOlUtiONs
Under the basysPrint brand name and as an OEM supplier 
Punch Graphix develops, manufactures and distributes 
high quality prepress equipment and related software for 
off set printing in the commercial and newspaper sectors.
In the commercial sector, basysPrint combines the 
advantages of directly transferring images onto a light 
sensitive plate without fi lm – known as Computer-to-
Plate (CtP) – with the advantage of using the cheap and 
widely available ultra violet-plates used for the traditional 
Computer-to-Film (CtF) system and well known by the 
prepress managers.
In the newspaper sector, the OEM prepress solutions are 
based on violet light technology.
↘
Trust your experience
KEY stRENGtHs
• Unique concept
• Low cost consumables leading to fast return on investment 
• Straightforward workfl ow integration
• Ultimate reproduction quality
• Flexibility in plate format and plate handling
• Environmental friendliness Punch Graphix plc 
Annual Report and Accounts 2006
04
Us
Punch Graphix  
Americas Inc.
State-of-the art 
demonstration 
facility. 24/7 on-site 
customer support 
available for large 
printing facilities. 
Greece
Punch Graphix Hellas SA.
Sales and service office 
covering major South East 
European markets such as 
Greece, Turkey, Romania, 
Bulgaria, and Cyprus. 
Brazil
Punch Graphix  
Brasil Comercio de 
Maquinas Graficas 
Ltda.  
Largest market for CtP 
in South America. 
Own sales and service 
office since 2005.
UK
Punch Graphix plc.
Registered office listed on AIM. 
Punch Graphix (UK) Ltd. 
Own sales and service office.
Belgium
Punch Graphix International N.V.
Operational head-office hosting 
corporate functions, digital colour 
solutions, R&D, software production, 
development and production of  
Punch Graphix toner.
Punch Graphix Prepress Belgium N.V. 
Development and production  
of OEM CtP for newspaper sector  
and in-house tooling shop.
Canada
Punch Graphix 
Canada Inc.
Own sales and 
service office 
established in 
2005.
Job:	 8921_PG_06	AR_front_AW.indd	 Proof:	 10	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
GEOGRAPHiC OVERViEw 
Focusing on rapidly growing markets Punch Graphix plc 
Annual Report and Accounts 2006
05
Equipment sale vs 
recurring revenues 2006
Equipment sale 54%
Recurring revenues 46%
Consolidated revenue by
geography 2006
Americas 26.5%
Europe, Middle East, Africa 67%  
Asia Pacic 6.5%
Consolidated revenue per  
business line 2006
Digital printing 67%
Prepress OEM 18%  
Prepress basysPrint 15%
Germany
Punch Graphix 
Deutschland GmbH.
Sales and service offi  ce 
for Germany.
Punch Graphix Prepress 
Germany GmbH.
Hosting development 
and production of 
basysPrint CtP for the 
commercial sector. 
China
Punch Graphix 
Shenzhen Ltd.
Sourcing for Punch 
Graphix.
Sales offi  ces 
Value Added 
Distributors offi  ces
Australia
Punch Graphix 
Oceania Pty Ltd.
Offi  ce opened in 2006. 
Job:	 8921_PG_06	AR_front_AW.indd	 Proof:	 10	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
↘
dYNAmiCs OF OUR mARKEts
• Strong growth rates predicted for both colour printing 
equipment and consumables
 – New applications made possible through on demand, 
variable printing
 – Printing in transition from traditional to digital, from 
black and white to colour
• Large installed base of CtP and CtF with high growth 
rates in Asia and South America
↘
dYNAmiCs OF OUR COmPANY
• Technology leadership in our segments
• Own sales and customer support in key digital colour 
target markets
• Own toner development and production, strong network 
of technological and commercial partners
• A balanced portfolio with high recurring revenue and 
good spread over our business lines
We aim to further expand and strengthen 
our global presence particularly in the rapidly 
growing US and Asia Pacifi c markets. A close 
relationship with our customers, via streamlined 
dedicated sales and support organisations, is of 
crucial importance for outstanding customer 
service and lasting success.
29
offi  ces globally
€1 73M
revenues 2006
716
employees worldwide Punch Graphix plc 
Annual Report and Accounts 2006
06
Job:	 8921_PG_06	AR_front_AW.indd	 Proof:	 10	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
CHAiRmAN’s st At EmENt
The shareholders received a cash offer from Punch 
International N.V on 8 January 2007, and the statement 
from the Independent Committee of our Board of 
Directors on 23 January 2007, expressing its reservation on 
the Punch International proposal, considering the 
company’s performance. The offer closed on 13 February 
2007 with Punch International increasing its shareholding 
from 49% to 92.58% in Punch Graphix plc. 
Subsequently, the independent Non-Executive Directors 
resigned on 20 February 2007. I want to express my 
appreciation for their contribution to the development of 
the Company during their terms of office.
The long-term strategy for growth to establish Punch 
Graphix as a strong technology player in selected markets 
of the graphic sector is further supported by the new 
Board of Directors, with a stronger emphasis on short-
term profitability, cash and shareholder value appreciation, 
to be achieved through continuous and pro-active cost 
control, operational efficiency actions, and top line 
management. We will keep investing in technology, 
further enhance our approach on total solutions, while 
strengthening our service offering. 
Looking back at 2006, revenues 
increased to €173.34m, operating 
profit before taxation increased by 
15% and earnings per share rose  
by 17%.
The Xeikon 6000 launched in September has been 
unanimously recognised as a new standard in the high-
end digital colour market with graphic art printing quality. 
The basysPrint ‘Very Large Format’ product line was 
upgraded with new technology for its optics, delivering 
superior speed and lower maintenance requirements. 
Punch Graphix continued supporting successfully its 
partner Agfa in the newspaper sector, especially with the 
new entry level Computer-to-Plate model.
The period saw the further strong growth of the Xeikon 
brand in Europe and Japan, but showed a slower 
evolution than expected in the USA. 
The basysPrint brand continued gaining momentum, 
specially in countries where UV plates are still widely used, 
such as Brazil, India and China.
To support the growth, the Group invested a further €8m 
in plant and machinery. We carried out a number of 
actions to increase operating efficiency, such as the SAP 
implementation in Germany and Canada, and marketing 
and sales process alignment.
I am confident that our well balanced business model 
with high recurring revenues and our presence in both 
digital and offset sectors is suited to challenge a dynamic 
and competitive environment. I am optimistic that with 
our changed focus to optimise further cash and return, we 
will offer strong returns to shareholders. 
Philip Ghekiere
Chairman
A focus change: from profitable growth to 
higher return and cash 
“ Unique and highly personalised direct mail 
campaigns form the core of DME’s multimedia 
direct marketing approach. We chose the Xeikon 
5000 because it’s a truly high volume digital color 
press and it is the only digital color press on the 
market that has a web width of 20” with virtually 
no restriction on the length of the printed piece
         ”
Alin Jacobs, VP-Creative Strategies, Direct Mail Express (DME),  
Daytona Beach, FL and Itasca, IL , USA  
lEA di NG Us O NE-t O-ONE d iRECt m ARKEt ER CHOOs Es X EiKON 
Xeikon 5000 07
Job:	 8921_PG_06	AR_front_AW.indd	 Proof:	 10	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
BasysPrint 
UV-sEttERs RAisE tHE PACE
Launched in October 2006, the Digital Screen Imaging 
technology (DSI³) for the ‘Very Large Format’ CtP range, 
off ers up to double exposure speed with imaging 
stability to improve production reliability and up-time. 
This new range is specifi cally targeted at large format 
high volume printers, looking for continuous productivity 
improvement as the key to maintain their 
competitiveness. 
NEw XEiKON 6000 
REVOlUtiONisEs PROdUCtiVitY
The new Xeikon 6000 digital colour printing system 
launched in September 2006 prints multi-page 
documents at unrivalled speeds. It handles the widest 
range of paper stock and substrates in the market.
A perfect fi t for high-end digital colour printers who 
need higher productivity and fl exibility, it opens up new 
business opportunities in the on-demand printing,
direct marketing and transactional printing 
environments.
BEst UsE OF diGitAl PRiNt AwARd 
FOR RAVENswORtH At tHE 2006 BPiF 
EXCEllENCE AwARds
One of the UK’s largest digital print operations, 
Ravensworth, is based at Cramlington near Newcastle-
upon-Tyne. The print room features the UK’s largest single 
installation of Xeikon equipment, with four new Xeikon 
5000 digital presses and one Xeikon 500 machine. The 
Company uses its Xeikon digital colour presses to print as 
many as two million full-colour A4-page impressions per 
week, producing over 10,000 print orders per week, with 
the vast majority of these destined for estate agents 
offi  ces up and down the country. 
The Form Adapted (FA) toner range, developed by 
Punch Graphix research, is one of the fi rst polyester 
based shape-modifi ed toners in high-speed digital colour 
printing and is produced in the Heultje plant in Belgium. 
The new FA toner technology off ers superior image 
quality, more vivid colours, a wider application range 
and is FDA-approved for indirect food contact. 
PiONEERiNG witH tHE 
FORm AdAPtEd tONER
A sUCCEssFUl YEAR Punch Graphix plc 
Annual Report and Accounts 2006
08
Job:	 8921_PG_06	AR_front_AW.indd	 Proof:	 10	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
CHiEF EXECUti VE’s REViEw Ben C. Van Assche answers some 
frequently asked questions about the 
progress and future of Punch Graphix
Q You have recently undertaken a 
strategic review – what are the key 
elements of your strategy moving 
forward?
 
A The Punch Graphix strategy is founded on four value-
adding business streams and I see the integration of 
those streams in the interest of the customer as a key 
success factor and one of my main responsibilities. First  
is the equipment development. Our R&D teams are 
continuously monitoring technological changes, 
customer feedback and competitor activity. 
The second stream is designing a user-friendly, software-
based workflow that interfaces with customers’ existing 
environments. The third is the consumables stream. We 
believe in environmentally friendly consumables that 
enhance output quality. Using electro-photography for 
Xeikon, combined with in-house developed toner 
capability as well as through the choice of UV-sensitive 
plate technology for basysPrint, we address both 
environmental requirements and improve reproduction 
quality. Moreover, with about half of our total revenue 
from consumables and services in 2006, this recurring 
revenue stream provides a solid base for development. 
Finally, the fourth stream is the support and service areas, 
where we make a real difference for our customers. Every 
customer has different requirements and workflow 
constraints and we are committed to matching our 
solutions to their individual needs. 
Over half of our total workforce is engaged in directly 
supporting our customers and ensuring prompt and  
pro-active interaction.
 
Q Where do you see the key areas for 
growth within the business? How did the 
change of control of the Company in 
February 2007 impact on the business 
priorities?
A At the time of admission, we presented three main 
areas for growth and the direction is still valid, although 
the focus has shifted between these areas under 
guidance of the new Board, that was put in place  
20 February 2007.
One growth area is the extension and enhancement of 
our technology leadership. We were the pioneer of digital 
printing colour systems in the early 90s and although we 
have some very large competitors, we still put ourself 
apart with a number of very specific unique selling points, 
placing our systems at the high end of the document 
printing segment with graphic art quality. In the area of 
industrial applications, we have a promising foothold in 
labels and several speciality applications, which has a 
significant potential for the future. In the CtP areas, a  
more mature product, we see growth in enhancing the 
productivity and quality of systems further. 
Another area for growth is to selectively address market 
opportunities. For digital, from a geographical 
standpoint, clearly the US is the most attractive country 
for a brand like Xeikon to grow, followed by Europe and 
Japan. On the CtP side (non newspaper), the Asian and 
South American markets remain the most active with 
positive growth expected for the coming years. 
Another important part of our go-to-market strategy is 
the full solution approach. For example, we are targeting 
in-plant printing facilities for large companies or 
institutions. To enter those markets successfully we 
present flexible finishing solutions with in-line coating or 
perfect book binding solutions. 
Technology and market growth will however only be 
possible if our operational excellence keeps up its pace: 
we continue to realise synergies and whenever possible 
streamline and integrate functions. We have rationalised 
the CtP product platforms and adopted a more strict 
digital front end and software phasing process, while 
optimising production processes for both digital and 
prepress business lines. 
However the progress made in this area until the end of 
last year must, in the view of our main shareholder, be 
further improved. Under impulse of the new Board, the 
priority setting is shifting towards a stronger emphasis on 
return and cash generation. For this purpose a number  
of actions have been put in place, in a very systematic 
and controlled manner, in particular in the field of 
working capital and operations. We are among others 
reviewing our international industrial strategy, by 
optimising and centralising logistics and production in 
cooperation with Punch International. One consequence 
of this industrial review has been the closure of the 
operation in Shenzhen.  Punch Graphix plc 
Annual Report and Accounts 2006
09
Software
Consumables
Equipment
Service
&
support
Job:	 8921_PG_06	AR_front_AW.indd	 Proof:	 10	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
Q How are you developing your 
international footprint?
A Our strategy is to provide dedicated service in every 
region where there is substantial market traction and 
when economies of scale can be achieved. This can also 
be achieved through cooperation with well established 
distribution networks, for the other regions. As defi ned 
with the new Board, we will be re-enforcing indirect 
distribution networks for the prepress business line, in 
order to gain a larger exposure in the CtP key markets, 
while further developing our own sales and service 
network for the Xeikon brand.
Q How are you keeping ahead 
with technology?
A Our technology leadership is clearly a key success 
factor of Punch Graphix. We are investing close to 10% 
of turnover in R&D, as well as running a number of R&D 
projects with business partners, for example with 
substrate manufacturers. We foster partnerships with 
universities and technology centres and today we have 
research activities with among others the universities of 
Brussels, Hasselt, Gent, Leuven, Rostock. Last, but not 
least, we place strong emphasis on recruiting, training 
and retaining the best experts in the areas we consider 
core and strategic.
Q&A
“ The Punch Graphix strategy is founded on four 
value-adding business streams and I see the 
integration of those streams in the interest of the 
customers as a key success factor and one of my 
main responsibilities
   ”
↘ Punch Graphix plc 
Annual Report and Accounts 2006
10
Job:	 8921_PG_06	AR_front_AW.indd	 Proof:	 10	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
BUsiNEss REViEw 
Performances fully in line with stated 
growth strategy 
Summary 
Since Admission to AIM in May 2005, Punch Graphix has 
experienced strong growth. In both 2005 and 2006, 
growth in the operating result outstripped growth in 
revenues, resulting in growing operating result margins. 
Punch Graphix’s shares have risen over 30% between 
Admission and 31 December 2006 and continue to 
exhibit exciting growth prospects. 
Overview
2006 was a satisfactory year for the Group, with both the 
high-end digital colour printing systems division (Xeikon) 
and the Computer-to-Plate prepress division (basysPrint 
and OEM) showing healthy development. Group revenue 
was €173.3m, an increase of 10% over 2005. Of this, 33% 
was generated by prepress activities, and 67% by digital 
printing activities. The split between equipment sales 
and sales of consumables and services grew in favour of 
recurring revenue compared to the previous year.
Group operating result was €22.5m, an increase of 5% 
over 2005. Result before tax and the net result 
attributable to the equity rose by 15% and 28% 
respectively over 2005.
By the end of 2006, the total installed base of Punch 
Graphix machines was approximately 3,000, compared
to approximately 2,500 at the time of Admission.
Markets and key drivers
During 2006, market conditions remained favourable for 
Punch Graphix. Digital colour printing was the fastest 
growing of all printing technologies with a wider range of 
printers adopting new applications. In addition, ongoing 
trends such as the increasing use of colour printing and a 
widening use of personalisation in printed media, have 
contributed to growth.
The CtP equipment market remained fairly stable overall, 
refl ecting a combination of the mature off set markets in 
Europe and the United States, and the faster growth 
experienced in Asia and South America. Key drivers for 
the CtP market included the continuing upgrade of the 
large installed base of earlier computer-to-fi lm solutions 
and fi rst generation CtP machines, the search for more 
productive solutions and the further consolidation of
the printing market into large facilities in lower cost 
geographies such as Asia and South America.
Digital colour printing solutions (Xeikon)
Xeikon enjoyed another strong year overall, especially 
in the sale of consumables. This was driven by systems 
sold and installed during 2005 coming on stream and,
in particular, a number of existing US customers 
substantially increasing their toner requirements.
The number of pages printed by the installed base of 
Xeikon machines grew by over 25% during the year.
The Group launched its new generation digital colour 
printing system, the Xeikon 6000, in September 2006, 
in combination with a new colour toner range (Form 
Adapted), and a major update to the X-800 digital 
front-end. In February 2007, the Xeikon range was further 
extended with the introduction of the Xeikon 4000 and 
Xeikon 5000Plus. The expectation in the market place 
of the launch of the Xeikon 6000 restricted orders for 
Xeikon 5000 machines. However, the Xeikon 6000 is 
helping equipment sales in the high-end part of our 
targeted market, with the fi rst units being delivered in 
the later part of 2006.
The combination of the Xeikon 6000, the FA toner range 
and the updated X-800 digital front-end sets a new 
standard in digital colour printing for speed, productivity, 
image quality, substrate range and extended applications.
These features, combined with favourable printing costs, 
put Punch Graphix ahead of its competition in this 
market segment.
Prepress solutions
Prepress activity was strong throughout the year, 
particularly in the emerging CtP markets in Asia.
The basysPrint approach of combining readily available 
and cost competitive UV plates and CtP equipment 
without the need for fi lm has been more widely adopted, 
indicating greater acceptance of the Group’s technology. 
As a result, unit sales of basysPrint prepress equipment 
were signifi cantly ahead of 2005.
During 2006, basysPrint was chosen as a preferred 
partner and has entered into a co-marketing agreement 
with ArtworkSystems, the prepress front-end software 
market leader. Other arrangements with plate suppliers 
also helped increase the awareness of, and confi dence 
in, the basysPrint brand. In October 2006, we introduced 
new optics to the ‘‘Very Large Format’’ range which have 
been well received by the market. They off er clear 
advantages in terms of speed of imaging and scalability 
and considerably extend the life of the lighting unit.
The extension of the factory in Boizenburg, Germany, 
which commenced in the summer of 2006, was 
completed early 2007 and will improve order fl ow and 
reduce delivery and installation lead times. Our new 
facility in Shenzhen, China assembled its fi rst commercial 
engine in September 2006. However, as the benefi ts from 
this operation do not outweigh the cost, it was decided 
to suspend operations at the facility. Punch Graphix plc 
Annual Report and Accounts 2006
11
Equipment sale vs 
recurring revenues 2006
Equipment sale 54%
Recurring revenues 46%
Consolidated revenue by
geography 2006
Americas 26.5%
Europe, Middle East, Africa 67%  
Asia Pacic 6.5%
Consolidated revenue per  
business line 2006
Digital printing 67%
Prepress OEM 18%  
Prepress basysPrint 15%
Total sales
63
85.5
105.2
153.2
164.4
180
160
140
120
100
80
60
40
20
0
2002 2003 2004 2005 2006
Operating prot
2.8
11.9
13.6
21.5
22.5
25
20
15
10
5
0
2002 2003 2004 2005 2006
Prot before taxation
1.9
9.1
11
18.5
21.2
25
20
18
16
14
12
10
8
6
4
2
0
2002 2003 2004 2005 2006
€m €m €m
Equipment sale vs 
recurring revenues 2006
Equipment sale 54%
Recurring revenues 46%
Consolidated revenue by
geography 2006
Americas 26.5%
Europe, Middle East, Africa 67%  
Asia Pacic 6.5%
Consolidated revenue per  
business line 2006
Digital printing 67%
Prepress OEM 18%  
Prepress basysPrint 15%
Total sales
63
85.5
105.2
153.2
164.4
180
160
140
120
100
80
60
40
20
0
2002 2003 2004 2005 2006
Operating prot
2.8
11.9
13.6
21.5
22.5
25
20
15
10
5
0
2002 2003 2004 2005 2006
Prot before taxation
1.9
9.1
11
18.5
21.2
25
20
18
16
14
12
10
8
6
4
2
0
2002 2003 2004 2005 2006
€m €m €m Total sales
63
85.5
105.2
153.2
164.4
180
160
140
120
100
80
60
40
20
0
2002 2003 2004 2005 2006
Operating prot
2.8
11.9
13.6
21.5
22.5
25
20
15
10
5
0
2002 2003 2004 2005 2006
Prot before taxation
1.9
9.1
11
18.5
21.2
25
20
18
16
14
12
10
8
6
4
2
0
2002 2003 2004 2005 2006
€m €m €m
Job:	 8921_PG_06	AR_front_AW.indd	 Proof:	 10	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
“ With the UV-Setters, we can handle all the 
UV-sensitive plates used by our customers, 
and are absolutely fl exible with regard to plate 
format. At the same time, we are able to off er 
a really favourable price. We are certain that our 
investment in UV-Setters will drive our expansion 
still further
   ”
Mao XunYi, Managing director, Shanghai Sanken Printing Co., Ltd, PRC
We further developed our relationship with our key 
newspaper market partner, Agfa, in line with agreements 
entered into in 2005. These provide the Company with 
greater transparency on orders and allow for a more 
structured approach to joint product development.
Strategy and prospects
During 2006, as part of its ongoing growth strategy, the 
Group invested signifi cantly in facilities and machinery to 
support its expansion programme, including new 
equipment for the toner factory in Heultje, Belgium,
and the expansion of the Boizenburg CtP factory. 
The strategy of expanding our own sales and services 
organisations progressed further in 2006.
New approaches to team management were deployed 
across the Company to focus on continuous 
improvement through sharing best practice and 
effi  ciencies. Empowerment of our people at all levels for 
business excellence is a key component of our strategy 
for growth.
Productivity levels are expected to increase further 
through the continued streamlining of the Group. 
Priorities for 2007 include further upgrading the Group’s 
professional capabilities and enhancements to processes 
which are vital to the long-term future and growth of 
Punch Graphix, such as marketing, sales and service, 
purchasing, production and IT.
The Group’s commitment to research and development 
investment has historically resulted in a number of 
product enhancements and new product launches 
which have provided the foundation for the ongoing 
growth and competitiveness of Punch Graphix. These 
investments are continuously fi ne-tuned in order to 
sustain the Group’s growth prospects.
We are confi dent about the prospects for Punch Graphix 
for the current year and beyond and remain fi rmly 
committed to maximising shareholder value.
Ben C. Van Assche
Chief Executive Offi  cer
↘
KEY FiGUREs
30%
Share price increase
since admission
basysPrint UV-sEttERs FOR CHiNA  12
Punch Graphix plc 
Annual Report and Accounts 2006
Job:	 8921_PG_06	AR_front_AW.indd	 Proof:	 10	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
FiNANCiAl REViEw 
The results published in this annual 
report have been prepared under the 
International Financial Reporting 
Standards as adopted by the European 
Union
The Group reported a strong full second year, in revenue, 
profit and earnings per share. 
Trading
Revenues increased from €158.3m, in 2005, to €173.3m in 
2006. Of this amount €1.1m relates to the acquisition of 
Linomedia in February 2006 (76.5%) and the rest to 
organic growth.
The split between digital printing and prepress was 67% 
against 33%. Compared to the previous year, the split 
between equipment sales and recurring revenues (sales 
of consumables for the digital printing machines, spare 
parts and servicing) grew in favour of the recurring 
revenue: 54% equipment and 46% recurring revenue 
(compared to 56% and 44% in 2005). Geographically, 
Europe remains the most important market (67%), 
followed by the Americas (26.5%) and Asia (6.5%).
EBITDA (earnings before interest, tax, depreciation and 
amortisation) increased by 20% from €34.7m, in 2005 to 
€41.7m in 2006. In sales terms this represents a margin of 
25%. Operating profit on sales for the year was €22.5m, 
which represents an increase of 5% on the previous year.
The tax charge of €5.2m reflects an effective tax rate of 
25%. This compares to an effective tax rate of 30.3% in 
2005. The Group benefited from the utilisation of tax 
losses and the recognition of a deferred tax asset in 
respect of tax losses.
Minority interest and earning per share
Minority interests decreased further from €435,000 in 
2005 to €101,000. The Group acquired the minority 
interests in its German and Italian subsidiaries.
In the reported year, earnings per share increased by  
17% to 15.55 euro cent. The average number of shares  
in issue in the calculation of earnings per share was 
102.2m. For 2005, the Company had on average €93.3m 
shares in issue.
Dividend
Given the change of control, further to the offer from 
Punch International N.V, the Board will propose not to pay 
a final dividend for 2006. 
Cash flow
Cash flow from operating activities increased from €3.9m 
to €27.5m despite an increase in working capital of €3.6m.
Credit terms have been used to enable sales while 
recognising the need to ensure action against  
customers with over extended credit. 
Payables remained stable at €20.5m. Improvements to  
the purchasing process have encouraged more timely 
payments to suppliers which enable stronger 
relationships and more advantageous partnership 
agreements.
Events in 2006 such as the Linomedia acquisition and the 
new products inventory build-up for the Xeikon 6000 and 
FA toner range justified higher inventory levels at year-
end. Inventory management remains an operational 
challenge which has benefited from attention in 2006 
and will continue to do so in 2007, particularly through 
the further reduction of slow moving stocks levels. 
Capital expenditure was €8m on tangible assets 
(improvement and replacement of production 
equipment and assets held for rental contracts and 
demonstration equipment). The Shenzhen, Heultje,
and Boizenburg investments are completed. The
largest component of investment in intangible assets
is to be found in the capitalisation of development 
activities (€7.6m).
Cash and short-term investments at the end of the year 
amounted to €39.8m.
The results were positively influenced by the market 
value of our hedging instruments (Financial result  
of €0.9m).
Shareholder’s funds
Shareholders’ funds totalled €107.9m. The increase in the  
year of €12.5m is driven mainly by retained earnings.
Jan Smits
Chief Financial Officer Punch Graphix plc 
Annual Report and Accounts 2006
13
Job:	 8921_PG_06	AR_front_AW.indd	 Proof:	 10	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
diRECt ORs
Board of Directors of the Company
Philip Ghekiere
Non-Executive Director, Chairman appointed
20 February 2007
Philip (aged 46) was until December 2006 Founding 
Partner, Executive Director, Member of the Executive 
Management Committee and General Counsel of The 
Capital Markets Company N.V, a $100m global consulting 
and solutions business focused on the Financial Services 
Industry. Since December 2006, he is Vice Chairman of 
the Board of Kinepolis Group N.V, Euronext listed cinema 
group. Previous positions were held at law firms Loeff 
Claeys Verbeke, Brussels, Allen & Overy, and Reid Priest, 
New York. Philip studied law at the Catholic University of 
Louvain, Belgium and holds a Masters of Law Degree 
(LLM) from New York University School of Law.
Geoffrey White
Non-Executive Director, Chairman resigned
20 February 2007
Geoff (aged 54) was a Managing Director within the  
W. Canning plc Group and was Chief Executive Officer of 
Pressac plc from 1989 to 2001, where he previously held 
the position of Finance Director between 1986 and 1989. 
Geoff is currently Non-Executive Deputy Chairman of 
iSoft Group plc and a Non-Executive Director of Tekdata 
Distribution Ltd. and Tekdata Interconnect Ltd. He is 
Chairman and Non-Executive Director of Patientline plc. 
He is a Fellow of the Institute of Chartered Accountants. 
Kenneth Humphreys
Non-Executive Director, resigned 20 February 2007
Ken (aged 60) spent 35 years with Royal Philips 
Electronics BV working in the UK, The Netherlands, 
Belgium and Austria in a range of senior positions 
including that of Executive Vice President of 
the Consumer Electronics Division.
Nigel McCorkell
Non-Executive Director, resigned 20 February 2007
Nigel (aged 60) held positions of seniority during 12 years 
at Meggitt plc including those of Finance Director, 
Managing Director and Deputy Chairman. He was 
previously Finance Director of Flight Refuelling (Holdings) 
plc (now Cobham plc) and was Chairman of Cork 
Industries Ltd. for three years. Nigel is currently Vice 
Chairman of Aero Inventory plc and Deputy Chairman of 
Ffastfill plc. He is a fellow of the Institute of Chartered 
Accountants and was elected a Companion of the 
Institute of Management in 1994.
Guido Dumarey
Non-Executive Director
In 1982, Guido (aged 47) initiated the growth of New 
Impriver N.V, a Ghent-based Company that laid the 
foundations for Punch International. Guido founded 
Punch International in 1983 and has led the growth of 
that Company since. He became Managing Director and 
was appointed Chairman of its Board in 1998.
Wim Deblauwe
Non-Executive Director, appointed 20 February 2007 
Wim (aged 33) was active in the financial sector (ING) for 
five years before being appointed Chief Financial Officer 
of Xeikon in 2002. Later he was appointed Vice President 
Sales and Marketing of Punch Graphix. After the 
successful IPO of Punch Graphix he was appointed
Chief Financial Officer of Punch International. Since 
November 2005, he has also been Managing Director of 
the Group. Wim is licentiate in Law (Catholic University 
Louvain, Belgium).
Ben C. Van Assche 
Chief Executive Officer
Ben (aged 61) was appointed Chief Executive Officer on  
5 April 2006 following the passing away of Dick Tilanus 
on 9 January 2006. Ben joined Punch Graphix from Cytec 
Surface Specialties, the world leading manufacturer of 
coating and ink resins and adhesives, where he was CEO 
of Cytec Surface Specialties N.V.  He was a member of the 
Executive Committee of Cytec Group and has over 35 
years experience in the chemical, pharmaceutical and 
health care industries, including global assignments in 
large and mid-size companies such as Cytec, UCB, Alcon 
and Baxter.
Jan Smits
Chief Financial Officer, Non-Executive Director as of 
1 April 2007
Jan (aged 48) was appointed Chief Financial Officer of  
the Company on its formation. He joined Punch 
International as Financial Director in 1990 and in 1999 
became Managing Director whilst retaining responsibility 
for finance and administration. Jan was involved in the 
initial public offering of Punch International in 1999. 
He was previously head of accounting at Pluma 
Vleeswarenbedrijf and worked in a senior financial role  
at Massive International. He graduated as a Commercial 
Engineer at the University of Antwerp and Tax Science at 
Sint-Aloysius College in Brussels. As of 1 April 2007, Jan 
will be replaced as Chief Financial Officer by Peter 
Tytgadt, but he will remain a director of the Company. Punch Graphix plc 
Annual Report and Accounts 2006
14
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
The Directors present their report and the financial 
statements for the year ended 31 December 2006. 
The Company was incorporated on 24 March, 2005. 
The Company’s shares were admitted to the Alternative 
Investment Market on 26 May 2005, at the price of 98p.
Activities
The Company and its principal operating subsidiaries 
focus on the provision of digital and prepress printing 
systems. It also provides ongoing consumables and 
services to its installed base.
A review of the Group’s trading during the year and of its 
prospects is contained in the Chairman’s statement 
(page 6), the Business Review (pages 10 to 11) and the 
Financial Review (page 12) which are incorporated by 
reference into this report.
Details of significant events since the balance sheet date 
are contained in the operating and financial review.
Fin Anci Al results And dividends
The profit after tax for the year was €16m (2005: €12.9m). 
The amount attributable to the equity interest of €15.9m 
(2005: €12.4m) has been transferred to reserves. Following 
the change of control of the Company, the directors of 
the Company do not recommend the payment of a final 
dividend.
d irectors’ interests
The interests of the Directors, including the interests of 
their spouses and infant children and the interests of any 
persons connected with them within the meaning of 
section 346 of the Companies Act 1985 (‘the Act’) 
(‘Connected Person’), all of which are beneficial (save 
where otherwise stated) which (i) have been notified to 
the Company pursuant to sections 324 or 328 of the Act 
or (ii) are required to be entered in the register 
maintained under section 325 of the Act, or (iii) are 
interests of a Connected Person which would, if the 
Connected Person were a director, be required to be 
disclosed under (i) or (ii) above, and the existence of 
which is known or could with reasonable diligence be 
ascertained by the Director, at 31 December 2006, are 
as follows:
 31/12/2006  31/12/2005
  Ordinary  Ordinary 
Name shares  shares
Geoffrey White  20,408 20,408
Ben C. Van Assche ** 150,000 0
Jan Smits*  140,783 140,783
Guido Dumarey  0 0 
Kenneth Humphreys  10,204 10,204 
Nigel McCorkell  8,163 8,163
Dick Tilanus 0 157 ,706
* On admission of the Company’s shares to AIM, Jan Smits, through his 
interests in SWAP N.V, was granted an award 140,183 ordinary shares 
respectively, pursuant to the terms of the LTIP as further described in 
the Remuneration Report. 
** Ben C. Van Assche, through his interests in Wolive N.V, was granted 150,000 
ordinary shares pursuant to the terms of the LTIP as further described.
The Directors are responsible for preparing the Annual 
Report and the financial statements in accordance with 
applicable law and International Financial Reporting 
Standards as adopted by the European Union.
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 Group and Company 
and of the profit or loss of the Group for that year. In 
preparing those financial statements, the Directors are 
required to:
select suitable accounting policies and then apply 
them consistently;
make judgements and estimates that are reasonable 
and prudent;
state whether applicable accounting standards have 
been followed, subject to any material departures 
disclosed and explained in the financial statements; and
prepare the financial statements on the going concern 
basis unless it is inappropriate to presume that the 
Group will continue in business.
•
•
•
•
Directors’ re Port Punch Graphix plc 
Annual Report and Accounts 2006
15
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
The Directors are responsible for keeping proper 
accounting records which disclose with reasonable 
accuracy at any time the financial position of the 
Company and to enable them to ensure that the financial 
statements comply with the Companies Act 1985. They 
are also responsible for safeguarding the assets of the 
Group and hence for taking reasonable steps for the 
prevention and detection of fraud and other irregularities.
Financial statements are published on the Group’s 
website in accordance with legislation in the United 
Kingdom governing the preparation and dissemination 
of financial statements, which may vary from legislation 
in other jurisdictions. The maintenance and integrity of 
the Group’s website is the responsibility of the Directors. 
The Directors’ responsibility also extends to the ongoing 
integrity of the financial statements contained therein. 
All the current directors have taken all the steps that they 
ought to have taken to make themselves aware of any 
information needed by the company’s auditors for the 
purposes of their audit and to establish that the auditors 
are aware of that information. The directors are not aware 
of any relevant audit information of which the auditors 
are unaware.
Princi PAl r isks And u ncert Ainties
The Group operates in a competitive market place. The 
Group seeks to manage this risk through investment in 
technology to create value adding products and services 
with sustainable revenue stream. A more detailed 
discription is given in the Chief Executives’ Review and 
Business Reveiw on pages 8 to 11.
Credit risk, interest rate risk and liquidity/cash flows  
are described in the financial statements from  
pages 47 to 48.
d irectors’ remuner Ation
The Directors’ remuneration is described in the 
Remuneration Report on pages 18 to 19.
emPloyee PArtici PAtion
It is the Company’s policy to provide employees of the 
Group, on a regular basis, with financial and other 
information on matters of concern to them, by means of 
in-house communications and during meetings with 
employee delegations. Every endeavour is made to 
consult, wherever possible, with employees, so that their 
views can be taken into account in making decisions 
which are likely to affect their interests.
emPloyment o F dis Abled P ersons
The Company’s policy on employment of disabled 
persons is:
1.  to give full and fair consideration to applications for 
employment with the Company made by disabled 
persons, having regard to their particular aptitudes 
and abilities.
2. where practical, to continue the employment of and 
arrange appropriate training for employees of the 
Company who become disabled during their 
employment with the Company; and
3.  to encourage training and career development for all 
personnel employed by the Company, including 
disabled persons.
PAyments to su PPliers
It is the Company’s policy to agree the terms of payment 
at the start of business with a supplier. The Company 
seeks to abide by the payment terms agreed with 
suppliers whenever it is satisfied that the supplier has 
provided the goods or services in accordance with the 
agreed terms and conditions. Creditors days at year end 
were 24 days.
c hArit Able don Ations
No substantial charitable donations were made in the 
year 2006.
Post b Al Ance sheet events
Post balance sheet events are disclosed in note 33 to the 
financial statements.
Fin Anci Al instruments
Details of financial instruments are set out in note 26 to 
the financial statements.
r eseArch And develo Pment
The Group engages in research and development activity.
Auditors
The auditors, BDO Stoy Hayward LLP , have indicated 
their willingness to continue in office and a resolution 
concerning their re-appointment will be proposed at the 
Annual General Meeting.
Philip Ghekiere
c hairman of the board Punch Graphix plc 
Annual Report and Accounts 2006
16
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
introduction
The Group is committed to high standards of corporate 
governance and the Board believes that this is a key 
element to continuing to deliver the Group’s strategy. 
While the Group is not required to comply with the 
provisions of the 2003 FRC Combined Code, the Group 
complies wherever possible with principles of good 
governance.
s tAtement o F d irectors’ res Ponsibilities
The Board is responsible for leading and controlling the 
Group and is accountable to the shareholders for the 
operational and financial performance of the Group. 
The Directors are responsible for internal controls and 
company law requires the Directors to prepare financial 
statements for each financial year which give a true and 
fair view of the state of affairs of the Company and Group 
and of the profit or loss for that period. 
A more detailed description of the Directors 
responsibilities in respect of the financial statements  
can be found in the Directors’ report.
Goin G concern
Having made due enquiries the Directors have a 
reasonable expectation that the Group has adequate 
resources to continue in operational existence for the 
foreseeable future. For this reason, they continue to 
adopt the going concern basis in preparing the financial 
statements.
t he bo Ard
The Board meets regularly throughout the year and met 
six times during 2006. It is responsible for:
overall Group strategy; 
approving revenue and capital budgets and material 
expenditure plans; 
approving substantial acquisitions and disposals of 
businesses, subsidiaries or material assets; 
determining the financial and corporate structure of 
the Group (including financing and dividend policy); 
approving material or extraordinary contracts; 
setting the Company’s values and standards and 
ensuring that its obligations to its shareholders and 
others are understood and met; and 
ensuring appropriate training of Directors and other 
senior executives. 
Day-to-day management of the Company’s business is 
delegated to the management team. At each meeting 
the Board reviews comprehensive financial information, 
produced by management each month and considers 
the trends in the Company’s business and their 
performance against strategic objectives and plans. 
It also regularly reviews the work of its formally 
constituted standing committees as described below 
and compliance with the Group’s management policies 
and compliance with legal requirements.
•
•
•
•
•
•
•
All members of the Board and its committees attended 
all scheduled meetings held in 2006 except that  
Mr Dumarey and Mr Humphreys were absent on one 
occasion due to a business trip abroad.
Details of the service contracts of the Executive  
Directors are shown in the Remuneration report. The 
Non-Executive Directors do not have service contracts 
but have appointment letters, which can be renewed  
or extended.
In furtherance of the principles of good corporate 
governance, the Board has maintained the Audit, the 
Remuneration and the Nomination Committees, each of 
which is comprised solely of the Company’s Non-
Executive Directors.
Audit committee
The Audit Committee has primary responsibility for 
monitoring the quality of internal controls and ensuring 
that the financial performance of the Company is 
properly measured and reported on. In particular,  
the Audit Committee is responsible for making 
recommendations as to the appointment, reappointment 
or removal of external auditors and monitoring the 
expertise and independence of such auditors. It receives 
and reviews reports from Punch Graphix’s management 
and auditors relating to the interim and annual accounts 
and the accounting and internal control systems in use 
throughout the Company. The Audit Committee expects 
to meet at least twice a year and has unrestricted access 
to the Company’s auditors. The chairman of the Audit 
Committee was Nigel McCorkell and other members 
were Kenneth Humphreys and Geoffrey White. The  
Audit Committee met twice in 2006.
r emuner Ation committee
The Remuneration Committee reviews the performance 
of the Executive Directors and makes recommendations 
to the Board on matters relating to their remuneration 
and terms of employment. The Remuneration Committee 
also makes recommendations to the Board on proposals 
for the granting of share options and other equity 
incentives pursuant to any share option scheme or equity
incentive scheme in operation from time to time. 
The Remuneration Committee was chaired by Kenneth 
Humphreys, with Geoffrey White and Nigel McCorkell as 
other members and met twice in 2006.
n omin Ation committee
The Nominations Committee meets as and when 
necessary to assess the suitability of candidates proposed 
for appointment by the Board and to prepare a 
description of the role and capabilities required for a 
particular appointment. The chairman of the Nomination 
Committee was Geoffrey White and other members were 
Kenneth Humphreys and Nigel McCorkell. The 
Nomination Committee met once in 2006.
cor Porate Governance r e Port Punch Graphix plc 
Annual Report and Accounts 2006
17
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
r el Ationshi Ps with sh Areholders
The Board recognises the importance of maintaining 
regular dialogue with institutional shareholders to ensure 
that its strategy and any concerns can be addressed. 
In addition, all shareholders have the opportunity to 
attend the Annual General Meeting where the Group’s 
operations can be discussed with the Directors. The 
Chairman and Chief Financial Officer make themselves 
available for meetings with analysts and representatives 
of the major shareholders on the day of the preliminary 
announcement of the annual results and half year results 
or shortly thereafter and upon request at other times of 
the year. They report to the Board on shareholders’ views. 
r el Ationshi P with the A uditor
During the reported year BDO Stoy Hayward LLP 
provided tax advice to the Company and its principal 
subsidiaries. The Board has considered the effect on 
independence of the auditor and the objective criteria 
on which any decisions to appoint BDO Stoy Hayward 
LLP should be made. It was concluded that in the 
circumstances its appointment as tax advisors was the 
most cost-effective means of securing appropriate advice 
without a serious risk of affecting the independence of 
the auditor. BDO Stoy Hayward LLP has confirmed that it 
does not consider its independence to be affected. The 
Board has developed policies to safeguard the 
independence of the auditor based on:
internal BDO Stoy Hayward LLP processes to prevent 
information being shared between teams except 
where it is appropriate; 
separate consideration of each category or major item 
of work, including the cost effectiveness of any 
proposed work and the suitability of competing 
advisors; and 
consideration of the total level of fees payable to BDO 
Stoy Hayward LLP and other member firms.
intern Al controls
The Board of Directors is responsible for the Group’s 
system of internal controls and has established a 
framework of financial and other controls. 
The Board has taken and will continue to take appropriate 
measures to ensure that the chances of financial 
irregularities occurring are reduced as far as possible by 
improving the quality of information at all levels in the 
Group, fostering an open environment and ensuring that 
financial analysis is rigorously applied. Any system of 
internal control can, however, only provide reasonable, 
but not absolute, assurance against material 
misstatement or loss.
•
•
•
The major elements of the system of internal control are
as follows:
1.  Major commercial, strategic and financial risks are 
formally identified, quantified and assessed by each 
operating unit during the annual budgeting exercise 
and presented to and discussed with Executive 
Directors, after which they are considered by the Board. 
2.  There is a comprehensive system of planning, 
budgeting, reporting and monitoring of the Group’s 
operating units. This includes monthly management 
reporting and monitoring of performance and 
forecasts. The reports are reviewed by Group staff and 
are also submitted to the Board for review. Monthly 
and quarterly reviews are embedded in the internal 
control process and cover each principal operating 
unit. Monthly reviews require each operating unit to 
consider, inter alia, business development, financial 
performance against budget and forecast, and capital 
expenditure proposals. Quarterly reviews of operating 
units also include a review of longer term business 
development performance against budget and 
forecast and all other aspects of the business. They are 
attended by Executive Directors and other Group staff 
as appropriate.
3.  There is a structure which clearly defines lines of 
responsibility and delegation of authority.
4.  Each operating unit is required to comply with defined 
policies, financial controls and procedures and 
authorisation levels which are clearly communicated.
By order of the Board
Filip beernaert
c ompany secretary Punch Graphix plc 
Annual Report and Accounts 2006
18
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
Number of shares held by the Directors – awards made at the moment of admission to AIM or during 2006:
Grantee  Number of shares awarded  Notes
Tilanus Consulting B.V.B.A.  157 ,706 shares granted on 26 May 2005  All shares were granted to 
  Tilanus Consulting B.V.B.A.  
  by decision of the Board
SWAP N.V  140,183 shares granted on 26 May 2005
Wolive N.V  150,000 shares granted on 4 April 2006
r emuneration r e Port The Company’s compensation arrangements are overseen 
by the Remuneration Committee of the Board which during 
the financial year ended 31 December 2006 consisted of Ken 
Humphreys (chair) who prepared this report, Geoffrey White 
and Nigel McCorkell.
The policy of the Board is that the committee shall consist 
of Independent Non-Executive Directors. The CEO 
attends meetings by invitation but does not attend in 
relation to matters that can affect him.
The Committee considers changes in compensation 
policy likely to have a material impact on the Company 
and is informed on a regular basis on leadership 
performance, legislative compliance on employment 
issues, industrial agreements and incentive plans 
operating throughout the Company.
The Committee is responsible for: 
establishing and recommending to the Board the 
policy for executive remuneration;
determining on behalf of the Board and shareholders 
the level and structure of the packages of the Executive 
Directors and selected senior executives; and 
reviewing and ensuring the alignment of executive 
remuneration throughout the organisation including 
Company share schemes.
Policy
The Remuneration Committee aims to ensure the 
compensation systems compliment and to reinforce its 
performance culture, leadership and talent management 
systems. Its aim is to offer packages that are competitive 
and designed to attract, retain and motivate personnel of 
the highest calibre. The Committee aims to recognise 
competence, experience and contribution to reward the 
•
•
•
delivery of challenging targets over the long-term on 
both growth and profitability.
A base salary, a bonus scheme and a long-term incentive 
plan (shares) are designed to ensure the delivery of best 
in class performance and align interests of the 
shareholders, executives and the Company.
PAck AGes
The basic salary is set using appropriate external data for 
similar jobs in companies of comparable size and 
complexity. Packages also take into account professional 
qualifications, experience and proven competencies.
incentive s chemes
The Executive Directors participate in an annual cash bonus 
scheme which is aligned to reward the delivery of 
challenging business targets – sales, profit, cash and 
individual personal targets. The Committee ensures these  
are aligned with shareholder interest and are competitively 
benchmarked. The maximum bonus achievable for the CEO 
is 50% of salary and for the CFO 30%.
l on G t erm i ncentive Pl An (lti P)
The LTIP is intended to offer an effective incentive over 
the longer term to executives and certain other senior 
employees. The total number of new ordinary shares that 
may be issued pursuant to the LTIP over a 10 year period 
may not exceed 5% of the total share capital of the 
Company. The use of a relevant TSR (Total Shareholder 
Return) based hurdle ensures an alignment between 
comparative shareholder returns and rewards of 
executives. The Committee assesses the TSR of the 
Company against the performance of the AIM UK 50 and 
the TSR of a Group of comparable competitors. Punch Graphix plc 
Annual Report and Accounts 2006
19
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
The Company has sent a letter to the members of the leadership team that they may receive a specific (maximum) 
number of shares, provided the target of 10% growth in EPS per year is reached during the period 1 January 2006 to 
31 December 2008. This potential grant is made under the Company’s Long Term Incentive Plan (LTIP).
n on- executive d irectors
Fees for Non-Executive Directors are determined by the Board after seeking external and internal advice with regard 
to market rates. The Board may pay additional remuneration outside the scope of ordinary duties of a Non-Executive 
Director. The Non-Executive Directors do not have service agreements and there are no provisions for early 
termination payments or pensions.
d irectors e moluments
 r emuneration  
 and emoluments bonus fees  t otal t otal 
 paid 2006  2006 Allowances 2006 2005
executive director
Ben C. Van Assche / Wolive N.V €159,705  nil €9.000 €168,705 –
Jan Smits / SWAP N.V €195,000  nil €12,000 €207,000 €237,000
Dick Tilanus/Tilanus Consulting BVBA     – €231,375
non-executive directors
Geoffrey White  £60,000  nil  none  £60,000 £45,000
Nigel McCorkell  £30,000  nil  none  £30,000 £22,500
Ken Humphreys £30,000  nil  none  £30,000 £22,500
Guido Dumarey  £30,000  nil  none  £30,000 £22,500
Pension And G r Atuities F or d irectors
The Board may exercise all the powers of the Company 
to pay, provide or procure the grant of pensions or other 
retirement or superannuation benefits and death, 
disability or other benefits, allowances or gratuities to any 
person who is or has been at any time a Director of the 
Company or in the employment or service of the 
Company which is or was a subsidiary of or associated 
with the Company or the predecessors in business of the 
Company or any such subsidiary or associated Company 
or the relatives or dependants of any such person.
n otes
c onsultancy agreements
The consultancy agreements with the service companies 
for the provision of management service by the 
Executive Directors are entered into without time limit 
and may be terminated by either party by a three 
months’ notice or by paying equivalent compensation.
l etters of appointment
The letters of appointment of the Non-Executive 
Directors are entered into for a three-year period, can be 
renewed and may be terminated by either party on a 
month’s written notice.
r eimbursements
The Executive Directors receive reimbursement for 
mobile phone costs and travel costs by plane. 
The consultancy agreement for management services 
provides for reimbursement of expenses incurred on 
Company business.
Allowances
The service companies providing management services 
through the Executive Directors receive a monthly car 
allowance of a maximum of €1,000.
Save as set above, there are no existing or proposed 
service or consultancy contracts between any member 
of the Group of Punch Graphix Companies and any of 
the Directors. Punch Graphix plc 
Annual Report and Accounts 2006
20
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
sAFety, he Alth And environment
Punch Graphix is committed to building, implementing 
and ensuring working practices and production 
processes that pay need to the safety, health and 
environmental protection of its employees, products, 
customers and stakeholders. It constantly strives to 
ensure its products have the greatest possible positve 
impact on the local and global environment.
Punch Graphix’s commitment to the safety, health and 
environmental protection of its products covers all 
phases of the production process.
c onception
The Punch Graphix product range keeps the environment 
in mind even at the conceptual stage of the product. Its 
digital presses are environmentally friendly in three 
different aspects:
Xeikon presses allow printing on demand thanks to the 
low set-up times. Only those items that are actually 
required are printed. This is a revolutionary concept for 
fully personalised marketing campaigns, but it is also 
extremely important in terms of environmental 
friendliness, since this means that there is no need for 
keeping a stock of printed matter. The printer will only 
use the exact amount of paper and ink needed at that 
moment.
Digital technology makes it possible for the digital 
master of the document to be transferred via the 
internet and then printed locally. Hence, there are no 
transportation costs involved in the document transfer, 
and this helps reduce CO2 emissions in road or air 
transport. 
•
•
s ocial an D environmental  
r es Ponsibility r e Port Punch Graphix makes sure that the marking material 
used for its products, such as toner particles, makes 
for environmentally friendly digital presses. With 
traditional printing methods volatile organic 
compounds (VOCs), harmful to the environment and to 
human health, are released into the air. Xeikon digital 
presses use a quick, clean and environmentally friendly 
printing method and thus do not release VOCs. 
Moreover, the marking material the Company selects 
is totally recyclable. In addition, the FA toner range has 
been FDA-approved for food contact.
In the conception of the prepress product range, 
environmental friendliness is also given high priority:
When using basysPrint prepress technology in a 
traditional printing process, there is no need for the 
usual intermediate step illumination-to-film. The 
removal of the film lessens the environmental stress 
of the printing process. 
The fact that basysPrint allows the use of UV-sensitive 
conventional plates is highly beneficial to the 
environment and is, moreover, energy-efficient. Other 
CtP technologies require the newer digital plates and, 
thus, need hazardous developing liquids. Conventional 
plates do not use hazardous developing liquids and do 
not require as much energy.
•
•
• Punch Graphix plc 
Annual Report and Accounts 2006
21
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
d esign
The RoHs (Restriction on the use of Hazardous 
substances in electronic equipment) Directive is a 
European regulation that restricts the use of certain 
hazardous substances in electrical and electronic 
equipment. A programme is defined for all Punch 
Graphix products to comply with this directive and the 
new generation of prepress and digital products is, 
furthermore, designed to optimise energy efficiency.
Production
In all production plants, special care has been taken to 
comply with the WEEE (waste from electronic and 
electrical equipment) regulation, which limits the total 
quantity of waste that may go to final disposal, and the 
M.A.P . (Milieu Actie Plan – Environmental Action Plan) 
regulation on energy efficiency. At these plants, waste 
water is separated from the pluvial water to reduce the 
stress on the waste water treatment. 
At the toner production plant in Heultje (Belgium), 
substantial investment plans have been undertaken to 
optimise energy consumption. Also, this year special 
investment programmes are underway to implement 
recycling in the production process, by implementing 
more efficient classifying technology which will increase 
yield and reduce waste.
Quality
The entire Punch Graphix product range meets 
international quality standards thanks to the rigorous 
quality programme the Company implements in its 
production processes. Its production plants in Ieper 
(Belgium) and Boizenburg (Germany) are ISO 9001:2000 
certified and its production plant in Lier (Belgium) is 
expected to gain the ISO 9001 in the first half of 2007. 
humAn resources
Good HR management is essential to succeed in business 
and it is only through its employees that the Company 
will build on its current competitive advantages. Punch 
Graphix takes care that it is and is seen as an attractive, 
transparent and honest organisation that encourages 
employee initiative and development and provides a safe, 
pleasant working environment.
eQuAl o PPortunities
The Punch Graphix policy rigorously stipulates that all 
persons should be treated fairly irrespective of their 
colour, race, sexual orientation, age, religious or political 
beliefs. The Company is committed to the principles of 
equal opportunity, it specifically prohibits discrimination 
of any type, and it ensures that employees who are 
physically impaired can work for the Company wherever 
and whenever this is reasonably possible.
FAmily su PPort
Punch Graphix recognises that its future depends on  
the ability to recruit and retain the right people. The 
Company has an open approach to flexible working 
conditions and concurs with its employees in their 
requests and concerns about supporting a healthy family 
life. Its employee-friendly policies cover maternity/ 
paternity leave and pay, among others.
initi Atives
In the past two years, Punch Graphix has been 
committed to supporting the Plato Initiative in the 
Mechelen region (Antwerp). Plato is an intensive 
counselling and supporting programme that helps 
SMEs grow and prosper. Plato seeks to professionalise 
the management of SMEs by means of work experience 
exchanges and networking under the supervision 
of large companies in order to achieve SME growth 
and development. Punch Graphix plc 
Annual Report and Accounts 2006
22
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
inde Pendent A uditors’ re Port to the 
sh Areholders o F Punch Gr APhix P lc
We have audited the Group and parent Company 
financial statements (the ‘financial statements’) of Punch 
Graphix plc for the year ended 31 December 2006 which 
comprise the Consolidated Income Statement, 
the Consolidated and Company Balance Sheets, 
the Consolidated and Company Cash Flow Statements, 
the Consolidated and Company Statements of Changes 
in Shareholders’ Equity and the related notes. These 
financial statements have been prepared under 
the accounting policies set out therein.
r esPective res Ponsibilities o F d irectors And 
Auditors
The Directors’ responsibilities for preparing the Annual 
Report and the financial statements in accordance with 
applicable law and International Financial Reporting 
Standards (IFRSs) as adopted by the European Union are 
set out in the Statement of Directors’ Responsibilities.
Our responsibility is to audit the financial statements 
in accordance with relevant legal and regulatory 
requirements and International Standards on Auditing 
(UK and Ireland).
We report to you our opinion as to whether the financial 
statements give a true and fair view and 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 other transactions is 
not disclosed.
We read the other information contained in the Annual 
Report and consider whether it is consistent with the 
audited financial statements. The other information 
comprises only the 2006 Highlights, the Business Review, 
Chairman’s Statement, the Chief Executive’s Review, the 
Directors’ Report, the Remuneration Report, the Financial 
Review, the Social and Environmental Responsibility 
Report, Directors and the Corporate Governance Report. 
We consider the implications for our report if we become 
aware of any apparent misstatements or material 
inconsistencies with the financial statements. Our 
responsibilities do not extend to any other information.
auDitors’ r e Port Our report has been prepared pursuant to the 
requirements of the Companies Act 1985 and for no 
other purpose. No person is entitled to rely on this report 
unless such a person is a person entitled to rely upon this 
report by virtue of and for the purpose of the Companies 
Act 1985 or has been expressly authorised to do so by our 
prior written consent. Save as above, we do not accept 
responsibility for this report to any other person or for any 
other purpose and we hereby expressly disclaim any and 
all such liability.
bAsis o F Audit o Pinion
We conducted our audit in accordance with International 
Standards on Auditing (UK and Ireland) issued by the 
Auditing Practices Board. An audit includes examination, 
on a test basis, of evidence relevant to the amounts and 
disclosures in the financial statements. It also includes an 
assessment of the significant estimates and judgments 
made by the Directors in the preparation of the financial 
statements, and of whether the accounting policies are 
appropriate to the Group’s and Company’s circumstances, 
consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all 
the information and explanations 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.
oP inion
In our opinion:
the Group financial statements give a true and fair 
view, in accordance with IFRSs as adopted by the 
European Union, of the state of the Group’s affairs as at 
31 December 2006 and of its profit for the year then 
ended;
the parent Company financial statements give a true 
and fair view, in accordance with IFRSs as adopted by 
the European Union as applied in accordance with the 
provisions of the Companies Act 1985, of the state of 
the Company’s affairs as at 31 December 2006; 
the financial statements have been properly prepared 
in accordance with the Companies Act 1985; and
The information given in the Directors’ Report is 
consistent with the financial statements.
bdo s toy hA yw Ard ll P
c hartered Accountants and r egistered Auditors
London, 12 April 2007
•
•
•
• Punch Graphix plc 
Annual Report and Accounts 2006
23
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
      31/12/2006  31/12/2005 
    Note  € ‘000  € ‘000
Total sales    1,2,3  164,439  153,210
Other operating income      8,901  5,053
total r evenues      173,340  158,263
Change in inventories      13,798  2,952
Purchases      (78,403)  (69,066)
Salaries & employee benefits    5  (35,855)  (29,963)
Depreciation & amortisation    10,12  (15,906)  (10,167)
Impairment losses on current assets    4  (3,307)  (3,1 17)
Other operating charges    4  (31,185)  (27 ,425)
total operating expenses      150,858  136,786
o perating result      22,482  21,477
Finance income    6  3,009  1,329
Finance cost    6  (4,161)  (4,084)
Share of results of associates    13  (118)  (269)
Profit before tax      21,212  18,453
Taxes    7  (5,210)  (5,594)
Profit for the year      16,002  12,859
Attributable to equity interest      15,901  12,424
Attributable to minority interest      101  435
Earnings per share – basic (eurocents per share)    8  15.55  13.32
Earnings per share – diluted (eurocents per share)    8  15.46  13.26
The notes on pages 35 to 52 are part of the financial statements.
consoli Date D income statement Punch Graphix plc 
Annual Report and Accounts 2006
24
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
      31/12/2006  31/12/2005 
    Note  € ‘000  € ‘000
non current assets      89,495  84,817
Intangible assets    10,1 1  27,274  25,152 
PPE: Property, Plant & Equipment    12  53,619  49,973
Investments in associates    13  221  2,171
Other receivables    14  4,788  6,497
Deferred tax assets    14, 24  3,593  1,024
c urrent assets      130,653  108,962
Inventories    15  44,122  32,491
Trade receivables    16  39,817  34,995 
Other receivables    16  6,189  1 1,409
Cash and cash equivalents    18  39,798  30,029
Financial Instruments    26  727  38
total assets      220,148  193,779
Amount attributable to equity shareholders of the parent     107,859  95,403
Ordinary shares    19  15,029  15,027 
Share premium account      50,378  50,378
Retained earnings      43,150  30,604
Other reserves      3,300  3,300
Translation differences      (3,998)  (3,906)
minority interests    21  527  624
total equity      108,386  96,027
non current liabilities      47,604  46,187
Interest bearing loans & borrowings    22  43,191  40,932
Deferred tax liabilities    14, 24  3,198  4,180 
Other liabilities      1,215  1,075
c urrent liabilities      64,158  51,565
Trade payables    25  20,464  21,457
Other current payables    25  23,831  20,715
Current tax liabilities      7,020  4,025
Borrowings    22  10,810  2,848
Provisions    23  1,920  2,190
Financial instruments    26  113  330
total liabilities and equity      220,148  193,779
The financial statements were approved by the Board of Directors and authorised for issue on 12 April 2007 and were signed on its behalf by  
Ben Van Assche, CEO. 
The notes on pages 35 to 52 are part of the financial statements.
consoli Date D balance sheet Punch Graphix plc 
Annual Report and Accounts 2006
25
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
com Pany balance sheet      31/12/2006  31/12/2005 
    Note  € ‘000  € ‘000
non current assets      63,880  40,394
Investments    13  63,873  40,394
Other receivables      7  
c urrent assets      14,133  31,615
Trade receivables    16  1,086  851
Other receivables    16  7,350  16,099
Deferred charges and accruals      73  127
Cash and cash equivalents      5,624  14,538
total assets      78,013  72,009
Shareholders equity      71,200  71,361
Ordinary shares      15,029  15,027
Share premium account      50,378  50,378
Retained earnings      1,837  3,518
Other reserves      3,300  3,300
Translation differences      656  (862)
total equity      71,200  71,361
c urrent l iabilities      6,813  648
Trade payables    25  2,268  191
Other current payables    25  4,540  184
Current tax liabilities      5  273
total liabilities and equity      78,013  72,009
The financial statements were approved by the Board of Directors and authorised for issue on April 12 2007 and were signed on its behalf by  
Ben Van Assche, CEO. 
The notes on pages 35 to 52 are part of the financial statements. Punch Graphix plc 
Annual Report and Accounts 2006
26
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
      31/12/2006  31/12/2005 
      € ‘000  € ‘000
c ash flows from operating activities
Profit before taxation       21,212  18,453
Adjustments for:  
Impairment losses      –  265
Depreciation      15,906  10,167
Provisions      (271)  143
Inventories      (7,498)  (4,398) 
Trade & other receivables      11,922  (13,482)
Trade & other payables      (8,070)  (4,202)
Net finance charges (P&L)      1,152  2,753
Loss/Profit on the sale of fixed assets      575  (257)
Share of results of associates      118  269
Interest paid      (3,930)  (3,792)
Tax paid      (3,656)  (1,975)
net cash from operating activities      27,460  3,944
c ash flows from investing activities  
Cash to acquire subsidiaries      (1,714)  (497)
Cash acquired of the sale of associates      30 
Purchase of property plant & equipment      (9,488)  (7 ,951)
Proceeds from sale of equipment      2,270  4,352
Own work capitalised of intangible assets      (7,608)  (5,386)
Purchase of intangible fixed assets      (1,473)  (901)
Interest received      1,961  1,329
net cash used in investing activities      (16,022)  (9,054)
c ash flows from financing activities  
Proceeds from the issue of share capital      –  28,31 1
Capital element of finance leases paid      (1,310)  (4,798)
Capital element of finance leases received      1,286  –
Proceeds from new loans & borrowings      9,542  6,440
Reimbursement of loans & borrowings      (7,442)  –
Dividend paid      (3,899)  0
net cash from (used in) financing activities      (1,823)  29,953
Foreign exchange      154  128
net increase in cash & cash equivalent      9,769  24,971
Cash & cash equivalent at the beginning of the year      30,029  5,058
Cash & cash equivalent at the end of year      39,798  30,029
consoli Date D cash flow statement Punch Graphix plc 
Annual Report and Accounts 2006
27
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
com Pany cash flow statement       31/12/06 31/12/05 
       €’000 €’000
c ash flow from operating activities
Profit before taxation       2,218 3,737
Adjustments for:
Net interest received       (2,413) (638)
       (195) 3,099
Change in trade and other receivables       8,561 (17 ,509)
Change in trade and other payables       6,433 429
       14,799 (13,981)
Income taxes paid       (278) (219)
c ash flow from (used in) operating activities       14,521 (14,200)
c ash flow from investing activities
Investment in subsidiary undertakings       (21,976) (22)
Interest received       2,263 449
c ash flow from (used in) investing activities       (19,713) 427
c ash flow from financing activities
Proceeds from the issue of capital       – 28,31 1
Dividend paid       (3,899) –
c ash flow from (used in) financing activities       (3,899) 28,31 1
Foreign exchange       177 –
net increase/(decrease) in cash and cash equivalents       (8,914) 14,538
Cash and cash equivalents at the beginning of the period       14,538 –
Cash and cash equivalents at the end of the period       5,624 14,538 Punch Graphix plc 
Annual Report and Accounts 2006
28
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
consoli Date D statement of chan Ges in equity    Share 
   Called-up premimum Retained Translation Other 
   share capital account earnings differences reserves Total 
   € ‘000 € ‘000 € ‘000 € ‘000 € ‘000 € ‘000
At 1 January 2005   1 1,746 23,558 18,076 (3,075) 3,300 53,605
LTIP 
(1)
   – – 104 – – 104
Translation difference   – – – (831) – (831)
Total expense recognised in equity   – – 104 (831) – (727)
Profit of the year   – – 12,424 – – 12,424
Dividends   – – – – – –
New share capital issued   3,281 28,957 – – – 32,238
Share issue cost   – (2,137) – – – (2,137)
At 1 January 2006   15,027 50,378 30,604 (3,906) 3,300 95,403
LTIP 
(1)
   – – 544 – – 544
Translation difference   – – – (92) – (92)
Total expense recognised in equity   – – 544 (92) – (452)
Profit of the year   – – 15,901 – – 15,901
Dividends   – – (3,899) – – (3,899)
New share capital issued   2 – – – – 2
At 31 december 2006   15,029 50,378 43,150 (3,998) 3,300 107,859
(1)
 LTIP: Long Term Incentive Plan (see note 20)
The €3,300,000 other reserves concerns a capital contribution of Punch International N.V.
com Pany statement of chan Ges in equity    Share 
   Called-up premimum Other Retained Translation 
   share capital account reserves earnings differences Total 
Capital and reserves   € ‘000 € ‘000 € ‘000 € ‘000 € ‘000 € ‘000
At 1 January 2005   1 1,746 23,558 3,300 – – 38,604
Translation differences   – – – – (862) (862)
Total expense recognised in equity   – – – – (862) (862)
Profit of the year   – – – 3,518 – 3,518
New shares issued   3,281 28,957 – – – 32,238
Share issue cost   – (2,137) – – – (2,137)
At 1 January 2006   15,027 50,378 3,300 3,518 (862) 71,361
Translation differences   – – – – 1,518 1,518
Total expense recognised in equity   – – – – 1,518 1,518
Result of the year   – – – 2,218 – 2,218
New shares issued   2 – – – – 2
Dividends   – – – (3,899) – (3,899)
At 31 december 2006   15,029 50,378 3,300 1,837 655 71,200
As permitted by s230 of the Companies Act 1985 a separate income statement for Punch Graphix plc has not been presented.
The Company’s profit after tax for the year ended 31 December 2006 was €2,218,000 (2005: €3,518,000). Punch Graphix plc 
Annual Report and Accounts 2006
29
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
accountin G Policies bAsis o F Pre PAr Ation
These financial statements of the Company and its 
subsidiaries (‘the Group’) have been prepared in 
accordance with International Financial Reporting 
Standards as adopted by the EU (IFRS and IFRIC 
interpretations) issued by the International Accounting 
Standards Board (IASB) and with those parts of the 
Companies Act 1985 applicable to companies preparing 
their accounts under IFRS.
These financial statements are presented in euros, the 
functional currency of the Group. The Company’s 
functional currency is Sterling. However, the Company 
presents its financial statements in euros as the majority 
of transactions of the Group are in euros.
The Company was incorporated in the United Kingdom 
as Punch Graphix Limited on 24 March 2005 and 
re-registered as a public limited Company with the name 
Punch Graphix plc on 29 April 2005. On 20 April 2005, the 
Company acquired Punch Graphix International N.V, 
formerly Xeikon International N.V, Punch Graphix Prepress 
Belgium N.V, formerly Strobbe Graphics N.V, Punch 
Graphix Prepress Germany GmbH, formerly basysPrint 
GmbH, and certain other companies, in which Punch 
International N.V (‘Punch International’) had an 
investment immediately prior to 20 April 2005. Following 
the Company’s Admission onto AIM on 26 May 2005, 
its issued share capital was £10,282,922 divided into 
102,829,220 fully paid ordinary shares. 
The Company’s controlling interest in its directly held 
subsidiaries was acquired through a transaction under 
common control, as defined in IFRS 3 Business 
Combinations. The Directors note that transactions under 
common control are outside the scope of IFRS 3 and  
that there is no guidance elsewhere in IFRS covering 
such transactions.
IFRS contain specific guidance to be followed where a 
transactions falls outside the scope of IFRS. This guidance 
is included at paragraphs 10 to 12 of IAS 8 Accounting 
Policies, Changes in Accounting Estimates and Errors. 
This requires, inter alia, that where IFRS does not include 
guidance for a particular issue, the Directors should also 
consider the most recent pronouncements of other 
standard setting bodies that use a similar conceptual 
framework to develop accounting standards. In this 
regard, it is noted that the United States Financial 
Accounting Standards Board (FASB) has issued an 
accounting standard covering business combinations 
(FAS 141) that is similar in a number of respects to IFRS 3. 
Further there is currently a major project being run jointly 
by the IASB and FASB to converge IFRS and US GAAP .
In contrast to IFRS 3, FAS 141 does include, as an 
Appendix, limited accounting guidance for transactions 
under common control which, as with IFRS 3, are outside 
the scope of that accounting standard. The guidance 
contained in FAS 141 indicates that a form of accounting 
that is similar to pooling of interests accounting, which 
was previously set out in Accounting Principles Board 
(APB) Opinion 16, may be used when accounting for 
transactions under common control.
Having considered the requirements of IAS 8, and the 
guidance included within FAS 141, it is considered 
appropriate to use a form of accounting which is similar 
to pooling of interests when dealing with the transaction 
in which the Company acquired its controlling interest in 
its subsidiaries.
In consequence, the financial information for Punch 
Graphix plc reports the result of operations for the prior 
year as though the acquisition of its controlling interest 
through a transaction under common control had 
occurred at the beginning of the earliest period 
presented. The effects of intercompany transactions have 
been eliminated in determining the results of operations 
for the period prior to the acquisition of the controlling 
interest, meaning that those results are on substantially 
the same basis as the results of operations for the period 
after the acquisition of the controlling interest.
Similarly, the consolidated balance sheets and other 
financial information have been presented as though the 
assets and liabilities of the combining entities had been 
transferred at 1 January 2005.
At the date of authorising these financial statements, the 
following standards and interpretations were in issue but 
not effective: IFRS 7 Financial Instruments: Disclosures; 
IFRS 8 Operating Segments; IAS 23 (revised) Borrowing 
Costs; IFRIC 7 Applying the Restatement Approach under 
IAS29, Financial Reporting in Hyperinflationary 
Economies; IFRIC 8 Scope of IFRS 2; IFRIC 9 Reassessment 
of Embedded Derivatives; IFRIC 10 Interim Financial 
Reporting and Impairment; IFRIC 11 Group and Treasury 
Share Transactions; and IFRIC 12 Service Concession 
Arrangement. The directors anticipate that the adoption 
of standards and interpretations in future periods will 
have no material financial impact of the financial 
statements of the Group.
The preparation of the Group’s financial statements 
requires management to make judgements, estimates and 
assumptions that affect the application of policies and 
reported amounts of assets and liabilities, income and 
expenses. The estimates and associated assumptions are 
based on historical experience and various other factors 
that are believed to be reasonable under the 
circumstances, the results of which form the basis of 
making judgements about carrying values of assets and 
liabilities that are not readily apparent from other sources. 
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed 
on an ongoing basis. Revisions to accounting estimates 
are recognised in the period in which the estimate is 
revised if the revision affects only that period, or in the 
period of the revision and future periods if the revision 
affects both current and future periods. Punch Graphix plc 
Annual Report and Accounts 2006
30
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
IAS 36 Impairment of assets requires the directors to 
estimate inputs into valuation models concerning 
matters such as forecast cash flows and profit margins. 
The directors base their estimates both on past 
experience and expected market trends going forward. 
Management must also make assumptions concerning 
inventory valuation, the valuation of receivables and the 
valuation of the warranty provision. In each instance, 
management take account of the historical performance 
of the group in respect of these matters, together with 
current information concerning, for example, product mix 
and performance and exposure to credit risk.
A summary of the more important accounting policies is 
set out below. The accounting principles have been 
applied consistently for all years’ presented.
bAsis o F consolid Ation
Where the Company has the power, either directly or 
indirectly, to govern the financial and operating policies 
of another entity or business so as to obtain benefits 
from its activities, it is classified as a subsidiary. The 
consolidated financial statements present the results of 
the Company and its subsidiaries as if they formed a 
single entity. Intercompany transactions and balances 
between Group companies are therefore eliminated 
in full.
business combin Ations
The consolidated financial statements incorporate the 
results of business combinations using the purchase 
method. In the consolidated balance sheet, the acquiree’s 
indentifiable assets, liabilities and contingent liabilities are 
initially recognised at their fair values at the acquisition 
date. The results of acquired operations are included in 
the consolidated income statement from the date on 
which control is obtained. When a business combination 
is achieved in stages, goodwill is calculated on the 
increase in stake. The impact of fair value adjustments on 
the Group’s previously held interest is not accounted for 
through goodwill.
Goodwill
Goodwill represents the excess of the cost of a business 
combination over the interest in the fair value of 
identifiable assets, liabilities and contingent liabilities 
acquired. Cost comprises the fair values of assets given, 
liabilities assumed and equity instruments issued, plus 
any direct costs of acquisition.
Goodwill is capitalised as an intangible asset with any 
impairment in carrying value being charged to the 
income statement.
Where the fair value of identifiable assets, liabilities 
and contingent liabilities exceed the fair value of 
consideration paid, the excess is credited in full to 
the income statement.
int An Gibles
r esearch and development costs
Expenditure on research activities, undertaken with 
the prospect of gaining new scientific or technical 
knowledge, is recognised in the income statement as an 
expense as incurred. Costs incurred on development 
projects (relating to the design and testing of new or 
improved products) are recognised as intangible assets to 
the extent that such expenditure is expected to generate 
future economic benefits and meets the recognition 
criteria set out in IAS 38 Intangible Assets. Other 
development expenditures are recognised as an expense 
as incurred. Development costs previously recognised as 
an expense are not recognised as assets in a subsequent 
period. Development costs that have been capitalised are 
amortised from the commencement of the commercial 
production of the product on a straight-line basis over 
the period of its expected benefit. The amortisation 
periods adopted do not exceed five years. The capitalised 
development costs are assessed for impairment 
whenever events or changes in circumstances indicate 
that their carrying amount may not be recoverable.
c omputer software development costs
Generally, costs associated with developing or 
maintaining computer software programmes are 
recognised as an expense as incurred. However, costs 
that are directly associated with identifiable and unique 
software products controlled by the Group that have 
probable economic benefits exceeding the cost beyond 
one year, are recognised as assets. Direct costs include 
staff costs of the software development team. Computer 
software costs that have been capitalised are amortised 
on a straight-line basis over the period of their expected 
useful lives, not exceeding a period of five years.
o ther intangible assets
Expenditure on acquired patents, trademarks and 
licences are capitalised and amortised on a straight-line 
basis over their useful economic lives, but not exceeding 
20 years. Amortisation of intangible assets is included 
within depreciation and amortisation expense in the 
income statement.
imPAirment o F non- Fin Anci Al A ssets
Impairment tests on goodwill and other intangible assets 
with indefinite useful economic lives are undertaken 
annually on 31 December. Other non-financial assets are 
reviewed for impairment whenever events or changes in 
circumstances indicate that their carrying amount may 
not be recoverable. Whenever the carrying amount of an 
asset exceeds its recoverable amount (being the higher 
of its fair value less cost to sell and its value in use), an 
impairment loss is recognised within other operating 
charges. The fair value less cost to sell is the amount 
obtainable from the sale of an asset in an arm’s length 
transaction while value in use is the present value of 
estimated future cash flows expected to arise from the 
continuing use of an asset and from its disposal at the 
end of its useful life. Recoverable amounts are estimated 
for individual assets or, if this is not possible, for the cash 
accountin G Policies continued Punch Graphix plc 
Annual Report and Accounts 2006
31
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
generating unit to which the assets belong. Reversal of 
impairment losses recognised in prior years is recorded in 
income when there is an indication that the impairment 
losses recognised for the assets no longer exist or have 
decreased. As an exception, impairment losses 
recognised for goodwill are not reversed.
Pro Perty, P l Ant And e Qui Pment
Items of property, plant and equipment are stated at 
purchase price or production cost including directly 
attributable costs less accumulated depreciation and 
impairment losses. Expenses for the repair of property, 
plant and equipment are usually charged as an expense 
when incurred. They are, however, capitalised when they 
increase the future economic benefits expected to arise 
from the item of property, plant and equipment.
Property, plant and equipment are depreciated on a 
straight-line basis over the estimated useful life of the 
item. Land is not depreciated. Assets under construction 
represent plant and properties under construction and 
are stated at cost less any recognised impairment loss. 
This includes cost of construction, plant and equipment 
acquired and other direct costs. Assets under 
construction are not depreciated until such time as the 
relevant assets are available for their intended use.
The estimated useful lives of the various identified asset 
categories are as follows:
Buildings  25 to 40 years
Machinery and equipment 3 to 8 years
Furniture and fixtures 5 to 10 years
Other fixed assets 3 to 5 years
The depreciation is calculated to write off the carrying 
value of items on a straight-line basis starting from the 
month of purchase. Where the carrying amount of an 
asset is greater than its estimated recoverable amount, 
it is written down immediately to its recoverable value.
Government G r Ants
Government grants relating to the purchase of property, 
plant and equipment are included in non-current 
liabilities as deferred income and are credited to the 
income statement on a straight-line basis over the 
expected lives of the related assets.
l eAses
As lessee
Finance lease
Leases of property, plant and equipment where the 
Group has substantially all the risks and rewards of 
ownership, are classified as finance leases. Finance leases 
are capitalised at the inception of the lease at the lower 
of the fair value of the leased property or the present 
value of the minimum lease payments. Each lease 
payment is allocated between the liability and the 
finance charges so as to achieve a constant rate on the 
finance balance outstanding. The corresponding rental 
obligations, net of finance charges, are included as 
borrowing. The interest element of the finance cost is 
charged to the income statement over the lease term. 
The leased assets are depreciated over their expected 
useful lives on a basis consistent with similar owned 
property, plant and equipment. If there is no reasonable 
certainty that ownership will be acquired by the end of 
the lease term, the asset is depreciated over the shorter of 
the lease term and its useful life.
Operating lease
Lease payments under operating leases are recognised as 
an expense on a straight-line basis over the lease term.
As lessor 
Finance lease
When assets are leased under a finance lease, the present 
value of the lease payment is recognised as a receivable. 
Financial income is recognised over the term of the lease 
using the net investment method, which reflects a 
constant periodic rate of return. Profits arising on sales 
under finance leases are recognised in the period that the 
sale occurs.
Operating lease
Assets leased out under operating leases are included in 
property, plant and equipment in the balance sheet. They 
are depreciated over their expected useful lives on a basis 
consistent with similar owned property, plant and 
equipment. Rental income (net of any incentives given to 
the lessee) is recognised on a straight-line basis over the 
lease term or in accordance with usage as appropriate.
inventories
Inventories are initially valued at cost, and subsequently 
at the lower of cost or net realisable value, fixed 
according to the weighted average cost method. Work 
in progress and finished goods are valued at direct 
production cost. The cost of production comprises the 
direct cost of materials, direct manufacturing expenses, 
appropriate allocation of material and manufacturing 
overhead, and an appropriate share of the depreciation 
and write-downs of assets used for production. If the 
purchase or production cost is higher than the net 
realisable value, inventories are written down to net 
realisable value. Net realisable value is the estimated 
selling price in the ordinary course of business, less the 
estimated costs of completion and selling expenses.
t r Ade r eceiv Ables
Trade receivables are carried at original invoice amount 
less impairment losses as a result of a past event that 
occurred subsequent to the assets’ recognition, such as 
evidence of a deterioration in counterparty credit risk. 
tA x Ation includin G deFerred t Ax
Deferred income tax is provided in full using the balance 
sheet liability method, on temporary differences between 
the carrying amount of assets and liabilities for financial 
reporting purposes and the tax bases. Punch Graphix plc 
Annual Report and Accounts 2006
32
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
Deferred taxes are not calculated on the following 
temporary differences:
initial recognition of goodwill;
goodwill for which amortisation is not tax 
deductible; and
the initial recognition of assets or liabilities that are 
not a business combination and at the time of 
the transaction affects neither accounting nor 
taxable profit.
The amount of deferred tax provided is based on the 
expected manner of realisation or settlement of the 
carrying amount of assets and liabilities, using tax rates 
enacted or substantially enacted at the balance sheet 
date. A deferred tax asset is recognised only to the extent 
that it is probable that future taxable profits will be 
available against which the unused tax losses and credits 
can be utilised. Deferred tax assets are reduced to the 
extent that it is no longer probable that the related 
tax benefit will be realised. Deferred tax balances are 
not discounted.
Deferred tax assets and liabilities are offset when the 
Group has a legally enforceable right to offset current tax 
assets and liabilities and the deferred tax assets and 
liabilities relate to the taxes levied by the same tax 
authority on either:
the same taxable Group Company; or
different Group entities which intend either to settle 
current tax assets and liabilities on a net basis, or to 
realise the assets and settle the liabilities 
simultaneously, in each future period in which 
significant amounts of deferred tax assets or liabilities 
are expected to be settled or recovered.
investments in Associ Ates
An associate is an entity over which the Group is in a 
position to exercise significant influence, but not control 
or joint control, through participation (but not control of) 
in the financial and operating policy decisions of the 
investee. The results and assets and liabilities of associates 
are incorporated in these financial statements using the 
equity method of accounting except when classified as 
held for sale. Investments in associates are carried in the 
balance sheet at cost as adjusted by post-acquisition 
changes in the Group’s share of the net assets of the 
associate, less any impairment in the value of individual 
investments. Losses of the associates in excess of the 
Group’s interest in those associates are not recognised 
unless there is an obligation to make good those losses.
Any excess of the cost of acquisition over the Group’s 
share of the fair values of the identifiable net assets of 
the associate at the date of acquisition is recognised as 
goodwill and included in the carrying value of the 
investment. Any deficiency of the cost of acquisition 
below the Group’s share of the fair values of the 
identifiable net assets of the associate at the date of 
acquisition (i.e. discount on acquisition) is credited in 
profit and loss in the period of acquisition.
•
•
•
•
•
Where a Group Company transacts with an associate of 
the Group, profits and losses are eliminated to the extent 
of the Group’s interest in the relevant associate. Losses 
may provide evidence of an impairment of the asset 
transferred in which case appropriate provision is made 
for impairment.
The Company’s investments in associated undertakings 
are carried at cost less provision for impairment.
cA sh And c Ash e Quiv Alents
For the purposes of the cash flow statement, cash and 
cash equivalents comprise cash on hand, deposits 
held on call with banks, other short-term highly liquid 
investments, and bank overdrafts. In the balance 
sheet, bank overdrafts are included in borrowings 
in current liabilities.
shAre c APit Al And sh Are P remium
External costs directly attributable to the issue of new 
shares, other than on a business combination, are shown 
as a deduction, net of tax, in equity from the proceeds. 
Share issue costs incurred directly in connection 
with a business combination are included in the 
cost of acquisition.
Dividends on ordinary shares are recognised in equity in 
the period in which they are declared.
Where the Company or its subsidiaries purchase its own or 
its parent Company’s equity share capital, the consideration 
paid, including any attributable transaction costs, net of 
income taxes, is deducted from the total shareholders’ 
equity as treasury shares until they are cancelled. Where 
such shares are subsequently sold or reissued, any 
consideration received is included in shareholders’ equity.
Provisions
Provisions are recognised when the Group has a present 
legal or constructive obligation as a result of past events. 
It is probable that an outflow of resources will be required 
to settle the obligation, and a reliable estimate of the 
amount can be made.
wArr Anty
The Group recognises the estimated liability to repair or 
replace its products still under warranty at the balance 
sheet date. This provision is calculated based on the past 
history of the level of repairs and replacements or on the 
basis of best estimates.
o nerous contr Acts
The Group recognises a provision for onerous contracts 
when the expected benefits to be derived from a 
contract are less than the unavoidable costs of meeting 
the obligations under the contract.
accountin G Policies continued Punch Graphix plc 
Annual Report and Accounts 2006
33
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
r estructurin G
Restructuring provisions mainly comprise lease 
termination penalties and employee termination 
payments, and are recognised in the period in which 
the Group becomes legally or constructively  
committed to payment. 
A constructive obligation to restructure arises only when 
an entity:
has a detailed formal plan for restructuring; and
has raised a valid expectation in those affected that 
it will carry out the restructuring by starting to 
implement that plan or announcing its main features 
to those affected by it.
Costs relating to the ongoing activities of the Group are 
not provided for in advance. Any fixed assets that are no 
longer required for their original use are transferred to 
current assets and carried at the lower of the carrying 
amount or the fair value less costs to sell.
borrowin G costs And interest
Borrowings are recognised initially at the proceeds 
received, net of transaction costs incurred. In subsequent 
periods, borrowings are stated at amortised cost using 
the effective yield method. Any difference between 
proceeds (net of transaction costs) and the redemption 
value is recognised in the income statement over the 
period of the borrowing.
When borrowings are repurchased or settled before 
maturity, any difference between the amount repaid and 
the carrying amount is recognised immediately in the 
income statement.
r evenue reco Gnition
Revenue is recognised when significant risks and rewards 
have been transferred to the buyer, when the Group no 
longer retains significant management involvement in 
the sold item, when it is probable that the economic 
benefits associated with a transaction will flow to the 
enterprise, when the amount of the revenue can be 
measured reliably and when the costs incurred can be 
reliably measured. Sales of print systems, consumables 
and parts and options are recognised net of sales tax and 
discounts. Revenue from service arrangements is 
recognised by reference to the stage of completion when 
this can be measured by reference to labour hours 
incurred prior to the year end as a percentage of total 
estimated labour hours for the contract. When the 
outcome of the transaction involving the rendering 
of services cannot be estimated reliably, revenue is 
recognised only to the extent of the expenses recognised 
that are recoverable. No revenue is recognised on barter 
transactions involving the exchange of similar goods and 
services. Interest is recognised on a time proportion basis 
that reflects the effective yield of the asset. Dividends are 
recognised when the shareholders’ right to receive 
payment is established.
•
•
emPloyee bene Fit costs
Employees benefit payments are generally paid in cash 
and expensed to the income statement. The non-cash 
element of employee benefits generally relate to share 
based payments.
Forei Gn currency
Transactions entered into by Group entities in a currency 
other than the currency of the primary economic 
environment in which it operates (the ‘functional 
currency’) are recorded at the rates ruling when the 
transactions occur. Foreign currency monetary assets 
and liabilities are translated at the rates ruling at the 
balance sheet date. Exchange differences arising on the 
retranslation of unsettled monetary assets and liabilities 
are similarly recognised immediately in the income 
statement, except for foreign currency borrowings as a 
hedge of a net investment in a foreign operation.
On consolidation, the results of overseas operations are 
translated into euros at rates approximating to those 
ruling when the transactions took place. All assets and 
liabilities of overseas operations, including goodwill 
arising on the acquisition of those operations, are 
translated at the rate ruling at the balance sheet date. 
Exchange differences arising on translating the opening 
net assets at opening rate and the results of overseas 
operations at actual rate are recognised directly in equity 
(the ‘foreign exchange reserve’). The Company balance 
sheet has been translated at a rate of 0,6715 €/£.
On disposal of a foreign operation, the cumulative 
exchange differences recognised in the foreign exchange 
reserve relating to that operation up to the date of 
disposal are transferred to the income statement as  
part of the profit or loss on disposal.
Fin Anci Al instruments
Fin Anci Al A ssets
The Group classifies its financial assets into one of the 
following categories, depending on the purpose for 
which the asset was acquired. Other than financial assets 
in a qualifying hedging relationship (see below), the 
Group’s accounting policy for each category is as follows:
Fair value through profit or loss 
This category comprises only in-the-money derivatives. 
They are carried in the balance sheet at fair value with 
changes in fair value recognised in the income statement. 
The Group does not have any assets held for trading nor 
does it voluntarily classify any financial assets as being at 
fair value through profit or loss.
loans and receivables 
These assets are non-derivative financial assets with fixed 
or determinable payments that are not quoted in an 
active market. They arise principally through the provision 
of goods and services to customers (trade debtors), but 
also incorporate other types of contractual monetary 
asset. They are carried at cost less any provision for 
impairment. Punch Graphix plc 
Annual Report and Accounts 2006
34
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
h eld-to-maturity investments
These assets are non-derivative financial assets with fixed 
or determinable payments and fixed maturities that the 
Group’s management has the positive intention and 
ability to hold the maturity. These assets are measured 
at amortised cost, with changes through the income 
statement.
Available-for-sale
Non-derivative financial assets not included in the  
above categories, are classified as available-for-sale and 
comprise the Group’s strategic investments in entities not 
qualifying as subsidiaries, associates or jointly controlled 
entities. They are carried at fair value with changes in fair 
value recognised directly in equity. Where a decline in 
the fair value of an available-for-sale financial asset 
constitutes objective evidence of impairment, the 
amount of the loss is removed from equity and 
recognised in the income statement.
Fin Anci Al li Abilities
The Group classifies its financial liabilities into one of two 
categories, depending on the purpose for which the 
liability was acquired. Other than financial liabilities in a 
qualifying hedging relationship, the Group’s accounting 
policy for each category is as follows:
Fair value through profit or loss
This category comprises only out-of-the-money 
derivatives. They are carried in the balance sheet at  
fair value with changes in fair value recognised in the 
income statement.
o ther financial liabilities
These other financial liabilities include the following 
items:
Trade payables and other short-term monetary 
liabilities, which are recognised at amortised cost. 
Bank borrowings drawn by the Group are initially 
recognised at fair value net of any transaction costs. 
Such interest bearing liabilities are subsequently 
measured at amortised cost using the effective interest 
rate method, which ensures that any interest expense 
over the period to repayment is at a constant rate on 
the balance of the liability carried in the balance sheet. 
‘Interest expense’ in this context includes initial 
transaction costs and premiums payable on 
redemption, as well as any interest or coupon payable 
while the liability is outstanding.
The Group does not apply the principles of hedge 
accounting.
shAre-b Ased PA yments
Where share options are awarded to employees, the fair 
value of the options at the date of grant is charged to the 
income statement over the vesting period. Non-market 
vesting conditions are taken into account by adjusting 
the number of equity instruments expected to vest at 
each balance sheet so that, ultimately, the cumulative 
•
•
amount recognised over the vesting period is based 
on the number of options that eventually vest. Market 
vesting conditions are factored into the fair value of the 
options granted. As long as all other vesting conditions 
are satisfied, a charge is made irrespective of whether the 
market vesting conditions are satisfied. The cumulative 
expense is not adjusted for failure to achieve a market 
vesting condition.
Where the terms and conditions of options are modified 
before they vest, the increase in the fair value of the 
options, measured immediately before and after the 
modification, is also charged to the income statement 
over the remaining vesting period.
investment in subsidi Aries
The Company’s investment in subsidiary undertakings is 
recognised at cost less provision for impairment.
accountin G Policies continued Punch Graphix plc 
Annual Report and Accounts 2006
35
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
notes to accounts 1. business se Gment re Portin G
The Group’s operating businesses are organised and managed separately according to the nature of products and services provided, with each 
segment representing a distinct business line that  offers different products and serves different markets. Unallocated costs, mainly represent 
corporate expenses. Segment assets consist primarily of property, plant and equipment, intangible assets, inventories, receivables and operating 
cash and exclude financial assets. Segment liabilities comprise operating liabilities and corporate borrowings. Capital expenditures comprise 
additions to property, plant and equipment (see note 12) and intangible assets (see note 10), including additions resulting from acquisitions. For 
the primary reporting format, the two business segments are CtP (Computer to Plate) and DP (Digital Printing).    
    
 31/12/2006 31/12/2005  31/12/2006 31/12/2005 31/12/2006 31/12/2005 31/12/2006 31/12/2005 
 t otal Total  c tP CtP digital Printing Digital Printing  o ther Other 
 € ‘000 € ‘000  € ‘000 € ‘000 € ‘000 € ‘000 € ‘000 € ‘000
Total sales 164,439 153,210  54,172 49,876 110,267 103,334 – –
Other operating income 8,901 5,053  2,664 6,356 6,237 (1,303) – –
total revenues 173,340 158,263 56,836 56,232 116,504 102,031 – –
Operating result 22,482 21,477  8,417 8,883 14,065 12,594 – –
Finance income/(Cost) (1,152) (2,755) – – – – (1,152) (2,755)
Share of results of associates (118) (269) – – (118) (269) – –
Result before tax 21,212 18,453 – – – – – –
Taxes (5,210) (5,594) – – – – – –
net result 16,002 12,859      
Net result – minority interest 101 435 – – 101 435 – –
Total assets 220,148 193,779  49,664 31,579 167,332 107 ,272 3,152 54,928
Total liabilities 111,762 97 ,752 5,328 4,723 105,030 29,395 1,404 63,634
Total capital expenditure 18,569 16,586 3,162 2,662 15,407 13,924 – –
Total depreciation and amortisation (15,906) (10,167) (4,535) (1,437) (11,373) (8,730) – –
Total impairment on current assets (3,307) (3,1 17)  (415) (392) (2,890) (2,725) (2) –
Total other non cash expenses 1,798 (2,764)  1,061 (2,397) 737 (367) – –
Investments in associates 221 2,171 – – 221 2,171 – –
2. revenue
An analysis of the revenue is as follows:
       31/12/2006 31/12/2005 
       € ‘000 € ‘000
Sales of parts and options       11,515 9,588
Sale of consumables       45,144 41,081
Sale of printing systems       88,544 86,021
Revenue from service arrangements       14,429 10,353
Equipment leasing revenue       4,807 6,167
       164,439 153,210
Other operating income       8,901 5,053
       173,340 158,263 
Other operating income relates mainly to investment grants, recharge of expenses and rental income.
3. Geo Gr APhic Al se Gment re Portin G
The Group’s manufacturing facilities are based in Europe and China. The Group conducts its selling activities on a global basis through  
sales companies. The following table provides an analysis of the Group’s sales by geographical market irrespective of the origin of the goods 
and services.           
 31/12/2006 31/12/2005 31/12/2006 31/12/2005 31/12/2006 31/12/2005 31/12/2006 31/12/2005 
 europe Europe Americas Americas  Asia Asia t otal Total 
 € ‘000 € ‘000 € ‘000 € ‘000 € ‘000 € ‘000 € ‘000 € ‘000
Total sales 110,182 102,576 43,010 42,594 11,247 8,040 164,439 153,210
Segment assets 187,675 158,253 15,079 16,806 17,394 18,720 220,148 193,779
Total capex 15,130 13,370 3,086 3,191 354 25 18,569 16,586 Punch Graphix plc 
Annual Report and Accounts 2006
36
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
notes to accounts continued
4. o ther o Per Atin G ch Ar Ges
       31/12/2006 31/12/2005 
       € ‘000 € ‘000
Rental, leasing and maintenance of land, property and equipment      5,063 4,976
Utility and service costs of land, property and equipment       7,241 7 ,180
Insurance costs       603 742
Research and development costs       6,667 6,107
Sales, marketing and representation costs       7,496 7 ,261
Share based payments – equity settled       544 104
Other fees and expenses       3,581 1,159
Foreign exchange gain/loss       (78) (215)
During the year the Group paid BDO Stoy Hayward LLP and its associates €321,000 (2005: €209,000) for audit services. In 2006, there was an  
under accrual in respect of 2005 audit fees of €154,000. The audit fee paid to BDO Stoy Hayward LLP in respect of the company was €137,000 
(2005: €139,000).
During the year, BDO Stoy Hayward LLP and its associates supplied non-audit services totalling €62,000 (2005: €406,000). In 2006, these services 
comprised tax services of €44,000 (2005: €1,000) and other audit services of €18,000 (2005: €2,000). In 2005, corporate finance services of €403,000 
were supplied.
Impairment losses on current assets comprise €2,560,000 (2005: €1,472,000) in respect of inventory and €747,000 (2005: €1,381,000) in respect of 
accounts receivable.
5. emPloyees And directors
       31/12/2006 31/12/2005 
       € ‘000 € ‘000
staff costs of the year          
Wages and salaries       27,608 23,516
Social security costs       5,268 5,289
Other staff costs       2,153 323
Pension costs       826 835
salaries and employee benefits       35,855 29,963
Average number of people employed by business unit      
Digital Printing (DP)       457 403
Computer to Plate (CtP)       256 235
Other       3 3
Average number of people employed by business unit       716 641
Aggregate emoluments paid to directors during the period amounted to €593,000 (2005: €672,000). Emoluments comprise short-term 
benefits only. The aggregate emoluments of the highest paid director was €207,000 (2005: €271,375). The executive directors received in total 
290,183 shares under the long-term incentive plan with a value of €254,000 (2005: €520,000). In addition, €534,000 was expensed during the 
year in respect of the LTIP scheme (2005: €104.000). The Company had no employees. Punch Graphix plc 
Annual Report and Accounts 2006
37
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
6. Fin Anci Al income And ch Ar Ges  
       31/12/2006 31/12/2005 
       € ‘000 € ‘000
net finance cost        
Interests on bank borrowings       (996) (834)
Interest on finance leases       (2,356) (2,247)
Financial instruments       (231) (1 13)
Other financial expenses       (578) (890)
Finance c ost       (4,161) (4,084)
Interests on bank accounts       1,052 782
Interest income from finance leases       592 285
Financial instruments       1,048 254
Other financial income       317 8
Finance income       3,009 1,329
Finance c ost       (1,152) (2,755)
7. income t Axes  
       31/12/2006 31/12/2005 
       € ‘000 € ‘000
Analysis of charge arising in year    
UK (at 30%)       244 518
Belgium (at 34%)       6,121 1,876
Other (between 22% and 41%)       1,024 708
total current tax       7,389 3,102
Deferred tax       (2,179) 2,492
taxation       5,210 5,594
       31/12/2006 31/12/2005 
       € ‘000 € ‘000
c urrent tax charged to the income statement   
Corporate taxation       7,389 3,102
total current tax liabilities       7,389 3,102
     31/12/2006  31/12/2005 
     € ‘000  € ‘000
tax in the income statement      
Current tax     7,389  3,102
Deferred tax     (2,179)  2,492
taxes     5,210  5,594
Proof of tax     
r esult before tax     21,330 – 18,721 –
Income tax using the Belgian Tax Rate     7,250 34% 6,365 34%
Tax effect of non deductive expenses     275 1% 490 3%
Tax effect of tax exempt revenues     (132) (1%) (1 16) (1%)
Recognition and utilisation of tax losses     (2,684) (13%) (783) (4%) 
Under/over-provided in prior years     125 – (6) –
Effect of tax rates in foreign jurisdictions     (1) – (286) (2%)
Other tax effects     377 2% (70) –
total tax reconciliation     5,210 24% 5,594 30% Punch Graphix plc 
Annual Report and Accounts 2006
38
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
notes to accounts continued
8. eArnin Gs Per s hAre
       31/12/2006 31/12/2005 
       € ‘000 € ‘000
Profit for the period       15,901 12,424
Weighted average number of shares – basic       102,241,327 93,258,058
Shares issued under LTIP       589,603 444,472
Average number of shares – diluted       102,830,930 93,702,530
ePs (eurocents per share)       15.55 13.32
ePs – diluted (eurocents per share)       15.46 13.26
9. d ividends 
       31/12/2006 31/12/2005 
       € ‘000 € ‘000
Final dividend of 2,35 eurocent per share paid during       2,399 –
 the year relating to the previous year’s result  
Interim dividend of 1,5 eurocent per share paid during the year      1,500 –
       3,899 –
Following the offer and subsequent increase in shareholding to 92,58% of Punch Graphix plc by  Punch International N.V, the Directors do not 
propose to pay a final dividend.
10. int An Gibles
        
     Development Software   
     costs licences Goodwill Intangibles 
     € ‘000 € ‘000 € ‘000 € ‘000
Acquisition value     
At 1 January 2005     10,013 1,155 13,106 24,274
Additions – acquisitions     – 178 2,01 1 2,189
Additions – internally generated     5,433 996 – 6,429
Disposals     (60) (248) – (308)
Other movements     – (319) 319 –
Currency translation adjustments     – – 33 33
At 1 January 2006     15,386 1,762 15,469 32,617
Additions – acquisitions     12 1,461 1,383 2,856
Additions – internally generated     7 ,608 – – 7 ,608
Disposals     (68) (9) – (77)
Currency translation adjustments     – (6) (27) (33)
At 31 december 2006     22,938 3,208 16,825 42,971
Amortisation     
At 1 January 2005     (969) (577) (2,306) (3,852)
Charge for the year     (3,143) (574) (1 14) (3,831)
Disposals     17 206  223
Other movements     – 17 (17) –
Currency translation adjustments     – (4)  (1) (5)
At 1 January 2006     (4,095) (932) (2,438) (7,465)
Charge for the year     (5,559) (404) (1,741) (7 ,704)
Disposals     142 8 – 150
Additions through business combinations     – (683) – (683)
Currency translation adjustments     – 8 (3) 5
At 31 december 2006     (9,512) (2,003) (4,182) (15,697)
net book value     
At 1 January 2006     11,291 830 13,031 25,152
At 31 december 2006     13,426 1,205 12,643 27,274 Punch Graphix plc 
Annual Report and Accounts 2006
39
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
Included in the charge of the year is the €1,600,000 adjustment to goodwill described in note 1 1. Acquisition includes the €1,090,000 of  
pre-existing goodwill relating to Linomedia.
Capitalised development costs principally comprise internally generated expenditure on major projects where it is reasonably anticipated that the 
costs will generate future economic benefits.     
All amortisation charges have been determined in accordance with the accounting policies described on page 30 and are recognised in 
depreciation and amortisation in the income statement.
The average remaining useful economic lives of intangible assets are as follows: development costs two years and software licences one year.
11. Goodwill
       31/12/2006 31/12/2005 
       € ‘000 € ‘000
At 31 December 2006, goodwill can be allocated to the business segments as follows:    
CtP       7,852 9,699
Digital       4,776 3,317
Other       15 15
Goodwill       12,643 13,031
Management have assessed the carrying value of this goodwill on a value in use basis, using cash flow projections from formally approved 
budgets covering a five year period. Cash flows outside of this period grew at a constant rate of 3% (2005: 3%). The discount rate applied to the 
cash flow projections is the pre-tax weighted average cost of capital of 18% (2005: 18%). The projected gross profit margin is a key assumption and 
is based on management’s past experience. Forecast profit margins have been set in a conservative manner. The impairment test demonstrated 
that no impairment loss should be recognised.
In 2006, Punch Graphix Prepress Germany utilised €1,600,000 of income tax income on losses carried forward. At acquisition date no deferred tax 
asset was recognised. In accordance with IFRS3, the carrying amount of goodwill was reduced to the amount that would have been recognised  
if the deferred tax asset had been recognised in the balance sheet on the acquisition date (20 December 2004). The reduction of the carrying 
amount of goodwill of €1,847 ,000 was recognised as a depreciation and amortisation in the income statement. Punch Graphix plc 
Annual Report and Accounts 2006
40
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
notes to accounts continued
12. Pro Perty, Pl Ant & eQ ui Pment
    Land &  Machinery &  Furniture & Other fixed  
    buildings equipment fixtures assets PPE 
    € ‘000 € ‘000 € ‘000 € ‘000 € ‘000
Acquisition values      
At 1 January 2005    47,932 15,811 1,989 4,046 69,778
Additions     172 5,821 487 1,488 7 ,968
Sales and disposals    (3,764) (579) – (1,550) (5,893)
Other movements    21 1 648 1 (1,026) (166)
Currency translation adjustments    16 205 56 (3) 274
At 1 January 2006    44,567 21,906 2,533 2,955 71,961
Additions through business combinations    1,467 5,666 814 43 7 ,990
Additions    160 6,446 524 2,357 9,487
Sales and disposals    (339) (2,440) (269) (829) (3,877)
Other movements    – 8 55 (684) (621)
Currency translation adjustments    (34) (388) (58) (2) (482)
At 31 december 2006    45,821 31,198 3,599 3,840 84,458
depreciation      
At 1 January 2005    (3,911) (10,008) (1,251) (244) (15,414)
Disposals and cancellation    355 – – – 355
Charge for the year    (1,345) (4,290) (366) (335) (6,336)
Other movements    (30) (263) – (248) (541)
Currency translation adjustments    (5) (3) (44) – (52)
At 1 January 2006    (4,936) (14,564) (1,661) (827) (21,988)
Additions through business combinations    (120) (1,665) (682) – (2,467)
Disposals and cancellation    331 1,017 260 – 1,608
Charge for the year    (1,470) (5,774) (464) (494) (8,202)
Other movements    – 1 – – 1
Currency translation adjustments    13 153 41 2 209
At 31 december 2006    (6,182) (20,832) (2,506) (1,319) (30,839)
net book value      
o pening balance    39,631 7,342 872 2,128 49,973
c losing balance     39,639 10,366 1,093 2,521 53,619
Assets held under finance lease can be analysed as follows :      
       2006 2005 
       € ‘000 € ‘000
net book value      
Land and buildings       33,199 33,774
Machinery and equipment       1,917 868
       35,116 34,642 Punch Graphix plc 
Annual Report and Accounts 2006
41
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
13. Fixed A ssets investments
       31/12/2006 31/12/2005 
       € ‘000 € ‘000
Interests in associated undertakings        
At 1 January        
- Net assets excluding goodwill       1,081 1,150
- Goodwill       1,090 1,090
       2,171 2,240
Share of profits retained       (118) (269)
Additions       – 472
Impairments       – (272)
Disposals       (30) –
Transfer        (712) –
Transfer of goodwill       (1,090) –
At 31 December        221 2,171
- Net assets excluding goodwill       221 1,081
- Goodwill       – 1,090
       221 2,171
Total assets       530 20,371
Total liabilities       81 14,744
Revenue       74 9,508
Profit after tax       (262) (1,355)
Xeikon Shenzhen Digital Printing Equipment Ltd was founded in August 2005 in cooperation with Shenzhen Zhongsheng Electronic Stock Co. 
Ltd. The total capital of the company amounted to €1,000,000 of which €472,000 was contributed by Punch Graphix Hong Kong Ltd. Details of 
investments in associates are disclosed in note 30.
In the course of 2006, the investment in Stora Enso Digital Solutions N.V was sold to Stora Enso N.V for €30,000.
The existing goodwill at 31 December 2005, amounting to €1,090,000 is transferred at the acquisition date of the Linomedia Group to the 
intangible assets, see note 10. The transfer of €712,000 relates entirely to Linomedia which became a subsidiary during the year.
The Company acquired for €191,000 new investments in subsidiaries (2005: €40,394,000) and underwrote the capital increase in cash of Punch 
Graphix Prepress Belgium N.V and Punch Graphics International N.V for €23,288,000.
14. n on current receiv Ables
       31/12/2006 31/12/2005 
       € ‘000 € ‘000
Finance lease receivables (see note 17)       4,176 5,963
Other financial assets       612 534
Receivables       4,788 6,497
    
Other financial assets comprise principally deposits with the Belgian social security authorities.  
15. inventories
       31/12/2006 31/12/2005 
       € ‘000 € ‘000
Raw materials and components       14,224 15,570
Work in progress       3,318 2,387
Finished goods       26,580 14,534
inventories       44,122 32,491
During the year an impairment loss of €2,560,000 (2005: €1,472,000) was recognised in the income statement following the Director’s assessment 
of the carrying value of the inventory. Punch Graphix plc 
Annual Report and Accounts 2006
42
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
16. t r Ade And other receiv Ables
       31/12/2006 31/12/2005 
       € ‘000 € ‘000
Trade receivables excluding related parties       40,469 32,695
Less provision for impairment of receivables       (2,773) (1,387)
Trade debtors to related parties (see note 29)       30 1,891
Finance lease receivables       1,356 1,632
Advances received       735 164
trade receivables net       39,817 34,995
Other amounts receivable       4,827 4,347
Other amounts receivable from related parties (see note 29)      372 6,044
Deferred charges and accruals       990 1,018
total other receivables       6,189 1 1,409
total trade and other receivables       46,006 46,404
Related parties consist of members of the Punch International group.
The amounts in the balance sheet are net of doubtful debts, estimated by the management, based on prior experience and assessment of the 
current economic environment. In 2006, the average period of credit taken in respect of trade receivables was 88 days. 
Credit risk is primarily attributable to the Group trade and finance lease receivables. The Group has no significant concentration of credit risk, with 
exposure spread over a large number of counterparties and customers.
The trade and other amounts receivable in the Company’s balance sheet concerns mainly balances due from subsidiary undertakings 
of €8,127 ,000.
17. Fin Ance l eAse r eceiv Ables 
  Present value of 
 Minimum lease payments  minimum lease payments
     31/12/06 31/12/05 31/12/06 31/12/05 
     € ‘000 € ‘000 € ‘000 € ‘000
Within one year     1,625 1,972 1,356 1,632
Second to fifth year     4,501 6,532 4,176 5,963
After five years     – – – –
     6,126 8,504 5,532 7 ,595
Future finance charges     594 909 
     5,532 7 ,595 
Current finance lease receivables     1,356 1,632 
Non current finance lease receivables     4,176 5,963 
total     5,532 7 ,595 
Future financial charges falling due: 
within 1 year     269 340 
within the 2nd to 5th year     325 569 
after five years     – –
total     594 909 
The group enters into finance lease arrangements in respect of certain of its print systems. The average term of finance leases entered into is  
five years. The interest inherent in the leases is fixed at the contract date for all of the lease term. The average effective interest rate contracted at  
31 December 2006 approximates to 6.5%.
notes to accounts continued Punch Graphix plc 
Annual Report and Accounts 2006
43
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
18. cA sh And c Ash e Quiv Alents
       31/12/2006 31/12/2005 
       € ‘000 € ‘000
Short-term bank deposits       4,086 1 1,026
Cash at bank and in hand       35,712 19,003
c ash and cash equivalents       39,798 30,029
     
The weighted average effective interest rate on short-term bank deposits variates between 2 and 4%. These deposits have an average maturity 
date of seven days.
19. shAre cAP it Al   
       2006 2005 
c alled-up share capital       € ‘000 € ‘000
Authorised   
150,000,000 shares of 10p each       21,920 21,920
issued and fully paid   
102,840,970 ordinary shares of 10p each (2005: 102,829,220 shares)      15,029 15,027
movement in share capital   
date transaction n ° shares c apital
24/03/05 Incorporation 2 –
20/04/05 Acquisition of investments 79,999,998 11,691
26/05/05 New shares issued at Admission to AIM 21,027 ,551 3,073
26/05/05 New shares issued to acquire minorities 1,069,213 156
26/05/05 New shares issued pursuant to the LTIP 732,456 107
At 1 January 2006  102,829,220 15,027
16/1 1/06 New shares issued pursuant to the LTIP 1 1,750 2
At 31 december 2006  102,840,970 15,029
20. shAre b Ased PA yment 
     weighted average  Weighted average  
     strike price  strike price 
     2006 2006 2005 2005
Number of shares 
Outstanding at the beginning of the year     1.42 594,026 – –
Granted during the year     1.42 150,000 1.42 732,456
Forfeited during the year     – – 1.42 (138,430)
Exercised during the year     1.42 (157,706) – –
Lapsed during the year     – – – –
Outstanding at the end of the year     1.42 586,320 1.42 594,026
No shares were exercisable at the end of the year. The Long Term Incentive Plan (‘LTIP’) is intended to offer an effective incentive over the 
longer term (three years) to executive directors and certain senior executives. Advice on the scheme was taken from Allen & Overy LLP  
and Altium Capital Limited prior to the AIM launch and was detailed in the launch data. The LTIP plan was adopted by the company on  
28 April 2005. 
The LTIP plan allows the Board to grant awards of shares in the company to employees of the group of Punch Graphix companies or to service 
companies, which the Board determines to be eligible for such grant. The total number of new ordinary shares, which may be issued may not 
exceed, when aggregated with ordinary shares issued pursuant to the LTIP in the previous 10 years, five percent of the total share capital of 
the company. A participant receiving an award under the LTIP will have full legal and beneficiary ownership of the ordinary shares from the 
date of grant, subject to certain restrictions. Participants will have voting rights and are entitled to dividends and other distributions in relation 
to these ordinary shares. The ordinary shares of an award, may not be disposed of before the end of the vesting period, which is for the 
current awards granted, three years from the date of grant. The awards granted are subject to a minimum of the earnings per share per 
annum and to other performance conditions, which are linked to the growth and the performance of the Company in relation to the AIM UK 
50 and to a peer group of companies. If a participant, who is an employee ceases to be in employment within the Group of Punch Graphix  Punch Graphix plc 
Annual Report and Accounts 2006
44
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
20. shAre b Ased PA yment continued
companies, due to retirement, disability, illness, injury, redundancy or as a result of the sale of the business or subsidiary, by which the 
participant is employed, the award will continue to vest. If employment ceases for other reasons, the award will be forfeited. If the participant, 
who is an employee, dies, the award will vest immediately.
 
If a participant which is a service company ceases to provide services to the Company or a subsidiary, the award will be forfeited, unless the 
Board determines otherwise.
On the lapse of an award the ordinary shares subject to an award will be transferred to a third party specified by the Company, unless the 
participant transfers to the Company a cash amount equal to the market value of such number of ordinary shares.
The weighted average fair value of each share granted during the year was €0.88 (2005: €0.87). This fair value has been based upon the IPO 
placing price taken into consideration a discount for the applicable market conditions of the LTIP . An amount of €534,000 (2005: €104,000)  
has been recognised as an expense in the year in respect of the LTIP . This amount was calculated using the Black-Scholes model with 
following assumptions:
       2006 2005
Current share price (in €):       1.87 1.88
Strike price (in €):       1.42 1.42
Risk free rate (%):       3.26 3.26
Volatility (%):       50.10 50.10
Dividend yield (%):       2.00 2.00
Expected weighted life (in years):       3 3
Average remaining contract life (in years):       1 2
The Board granted, in accordance with the rules of the LTIP plan, on 27 February 2006 the total award of shares to the service company of  
Dick Tilanus. 
In 2005, 732,456 shares were issued under the LTIP of which 574,570 shares remain outstanding. They were issued at an exercise price of €1.42 
and vest over 3 years.
On 16 November 2006, the Company announced that 150,000 ordinary shares of 10p each in the capital of the Company were issued and 
alloted to Wolive N.V, the service company for Ben Van Assche, the CEO of the Company, pursuant to the Company’s LTIP . 
11,570 shares issued to Wolive N.V were new ordinary shares of 10p each in the capital of the Company and the balance of 138,430 ordinary 
shares were transfers of existing shares to Wolive NV from former members of the LTIP . The 150,000 ordinary shares will vest over a three year 
period if the EPS grows by 10% compared to the EPS of the preceding fiscal year.
The Board of Directors has decided that certain employees of the leadership team shall have the opportunity to receive all together a 
maximum of 128,000 ordinary shares (the ‘Award’) of Punch Graphix plc. (the ‘Company’) after a period of three Financial Years of the 
Company commencing on the first day of the Financial year 2006 (the ‘Performance Period’) under the LTIP . The shares will be granted under 
the LTIP after the end of the financial year ending on 31 December 2008 or on such earlier date, in accordance with the Rules of the Plan, and 
shall vest immediately without conditions. No vesting period will begin earlier than upon the grant of the Award. However the Award will only 
be made if the growth in the Company’s earnings per share over the Performance Period equals or is greater than ten per cent (10%) per 
annum for each individual year.
For the determination of the grant and vesting date the rules as described above take precedence over the LTIP . The participation in the LTIP is 
at the sole discretion of the Remuneration Committee of the Board of Directors. 
21. minority interest
       31/12/2006 31/12/2005 
       € ‘000 € ‘000
At 1 January       624 604
Acquisitions       (174) (383)
Share of net profit of subsidiaries       101 435
Exchange adjustments       (24) (32)
At 31 December       527 624
notes to accounts continued Punch Graphix plc 
Annual Report and Accounts 2006
45
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
22. l o Ans & borrowin Gs
    Total 
    non current  Bank debts Total current  
  Leasings debts Bank debts borrowings Leasing debts and overdrafts borrowings Total 
  € ‘000 € ‘000 € ‘000 € ‘000 € ‘000 € ‘000 € ‘000
At 1 January 2005  40,567 – 40,567 703 672 1,375 41,942
New debts  6,440 – 6,440 64 – 64 6,504
Repayments  (3,741) – (3,741) (707) (350) (1,057) (4,798)
Other movements  (2,429) – (2,429) 2,429 – 2,429 –
Currency translation adjustment  95 – 95 37 – 37 132
At 1 January 2006  40,932 – 40,932 2,526 322 2,848 43,780
Additions through business combinations  867 219 1,086 694 6,674 7 ,368 8,454
New debts  427 5,000 5,427 – 4,1 15 4,1 15 9,542
Repayments  (1,770) – (1,770) (1,541) (4,131) (5,672) (7 ,442)
Other movements  (2,359) – (2,359) 2,359 – 2,359 –
Currency translation adjustment  (129) 4 (125) (120) (88) (208) (333)
At 31 december 2006  37,968 5,223 43,191 3,918 6,892 10,810 54,001
maturity        
At 1 January 2005        
Within 1 year  – – – 2,526 322 2,848 2,848
Between 2 and 5 years  9,709 – 9,709 – – – 9,709
More than 5 years  31,223 – 31,223 – – – 31,223
At 1 January 2006  40,932  40,932 2,526 322 2,848 43,780
Within 1 year  – – – 3,918 6,892 10,810 10,810
Between 2 and 5 years  6,815 5,223 12,038 – – – 12,038
More than 5 years  31,153 – 31,153 – – – 31,153
At 31 december 2006  37,968 5,223 43,191 3,918 6,892 10,810 54,001
The minimum lease payments under finance leases fall due as follows :        
       31/12/2006 31/12/2005 
       € ‘000 € ‘000
Not later than one year       6,195 3,003
Later than one year but not more than five years       15,203 14,671
More than five years       51,217 49,635
       72,615 67 ,309
Future finance charge       30,729 23,851
       41,886 43,458
Future finance charges falling due:   
within 1 year       2,277 477
within the 2nd and 5th year       8,388 4,962
after 5 years       20,064 18,412
total       30,729 23,851
The Group has entered into finance leases for periods ranging from 4 to 40 years. The interest rate inherent in the leases is fixed at the contract 
date for all of the lease term. The average effective interest rate contracted approximates to 6.25% (2005: 6.25%). All leases are on a fixed 
repayment basis and no arrangements have been entered into for contingent rents. Obligations under finance leases are secured by the 
lessor’s charge over the leased assets.
Long-term bank loans includes a five year loan at a floating interest rate with six monthly installments. Short-term bank loans consist mainly of 
straight loans with a term of one week and a fixed interest rate (with a weighted average interest rate between 3.5 and 4.5%). Punch Graphix plc 
Annual Report and Accounts 2006
46
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
23. Provisions
     Pensions Warranty Other Total 
     € ‘000 € ‘000 € ‘000 € ‘000
c urrent
At 1 January 2005     295 780 973 2,048
Charged to profit and loss – expensed     – 415 – 415
Charged to profit and loss – utilised     (97) – (184) (281)
Currency translation adjustment     3 – 5 8 
At 1 January 2006     201 1,195 794 2,190
Charged to profit and loss - expensed     194 276 (31 1) 159
Charged to profit and loss - utilised     (44) (121) (250) (415)
Currency translation adjustment     (9) (5) – (14) 
At 31 december 2006     342 1,345 233 1,920
     
The warranty provision represents managements’ best estimate of the Group’s liabilities under 12 month warranties granted on sale of print 
systems based on past experience. The pension provision principally relates to the Group’s obligation in connection with certain early-retirement 
arrangements.
24. d eFerred t Ax
Deferred tax is calculated in full on temporary differences under the liability method using local tax rate applicable in each country. Deferred tax 
assets have been recognised in full on taxable losses as realisation of the tax benefit from these losses is probable. The movements in gross 
deferred tax assets and liabilities (prior to the offsetting of balances within the same jurisdiction as permitted by IAS12) during the period are 
shown below:        
   Depreciation  Leasing 
   & value reductions Provisions & renting Intangibles Other Total 
   € ‘000 € ‘000 € ‘000 € ‘000 € ‘000 € ‘000
deferred tax liabilities
At 1 January 2005   875 32 13,366 3,055 60 17 ,388
Charged to profit and loss account   (31 1) 41 (2,181) 775 2,766 1,090
Exchange differences   – – – – 25 25
At 1 January 2006   564 73 11,185 3,830 2,851 18,503
Charged to profit and loss account 2006   – (44) (1,888) 732 1 10 (1,091)
Acquisitions   – – 791 – 176 967
Exchange differences   – – – – (9) (9)
At december 31 2006   564 29 10,088 4,562 3,128 18,371
  Depreciation  Leasing 
  & value reductions Provisions & renting Intangibles Other Tax losses Total 
  € ‘000 € ‘000 € ‘000 € ‘000 € ‘000 € ‘000 € ‘000
deferred tax assets
At 1 January 2005  882 66 13,465 1 50 2,196 16,660
Charged to profit and loss account  (274) 12 (1,883) (1) 2,258 (1,514) (1,402)
Exchange differences  – (2) – – 103 (12) 89
At 1 January 2006  608 76 11,582 – 2,411 670 15,347
Charged to profit and loss account   675 25 121 (51) (489) 1,320 1,601
Acquisitions  597 14 667 109 239 296 1,922
Exchange differences  (3) (8) – – (58) (35) (104)
At december 31 2006  1,877 107 12,370 58 2,103 2,251 18,766
Deferred taxes have been recognised in the balance sheet as follows :       
       31/12/2006 31/12/2005 
       € ‘000 € ‘000
Assets       3,593 1,024
Liabilities       (3,198) (4,180)
Total       395 3,156
notes to accounts continued Punch Graphix plc 
Annual Report and Accounts 2006
47
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
No deferred tax has been provided on the unremitted earnings on overseas subsidiaries and associated undertakings. Deferred tax assets and 
liabilities are only offset where there is a legally enforcable right of offset and there is an intention to settle the balance net. Deferred tax assets 
have not been recognised in respect to tax losses when their recoverability is not considered probable. At the balance sheet date €2,200,000 of 
the losses of Punch Graphix Prepress Germany remained unprovided.
25. t r Ade And other PAyAbles
       31/12/2006 31/12/2005 
       € ‘000 € ‘000
Trade payables (excluding related parties)       19,901 20,413
Trade payables to related parties (see note 29)       563 1,044
total trade payables       20,464 21,457
Other tax and social security payables       5,537 4,442
Advances received       1,091 924
Other debts       10,237 7 ,856
Accruals and deferred income       6,966 7 ,493
total other payables       23,831 20,715
The trade payables and other payables in the Company’s balance sheet concerns mainly amounts due to subsidiary undertakings of €6,552,000.
26. Fin Anci Al i nstruments
(i) Financial risk factors
The Group seeks to minimise potential adverse effects on the financial performance of their local business, however, fluctuations in market 
prices, foreign currency exchange rates on sales and purchases or inter-company loans are inherent risks in the performance of the business. 
The Group uses derivative financial instruments to hedge its exposure arising from its operational, financing and investment activities. The net 
exposure is managed on a central basis in accordance with the principles laid down by the directors. As a policy, the Group does not engage 
in speculative or leveraged transactions, nor does it hold or issue financial instruments for trading purposes. The long-term bank loan  
(see note 22) with floating interest rate exposes the group to interest rate risk.
(ii) Foreign exchange risk
Due to the international nature the Group’s business it is exposed to different foreign exchange risks arising from various currency exposures 
primarily with respect to the US dollar and £UK. Companies in the Group use forward contracts or other instruments, concluded with local 
banks to hedge their exposure to foreign currency risks in their local reporting currency. The Groups financial liabilities and assets can be 
analysed by currency as follows:
 EUR GBP USD CAD SEK JPY AUD BRL Total
Financial assets
Finance leases 3,464 55 2,013 – – – – – 5,532
Trade & other receivables 28,676 1,954 5,843 934 1,807 40 – 230 39,484
Total 32,140 2,009 7 ,856 934 1,807 40 – 230 45,016
 EUR GBP USD CAD SEK JPY AUD BRL Total
Financial liabilities
Finance leases 41,886 – – – – – – – 41,886
Borrowings 12,1 15 – – – – – – – 12,1 15
Trade & other payables 17 ,641 1,346 22,975 271 1,896 105 44 17 44,295
Total 71,642 1,346 22,975 271 1,896 105 44 17 98,296
(iii) c redit risk
The Group has no significant concentration of credit risks and has policies in place to monitor the credit risks on customers. For major projects 
the intervention of credit insurance companies or similar organisations is requested. The Group’s maximum exposure to credit risk in respect 
of trade debtors and finance lease receivables are reflected by the amounts included in the balance sheet.
(iv) l iquidity risk
Liquidity risk is linked to the evolution of the Group’s working capital and is managed centrally. The Group monitors the change in working 
capital through focused actions. Punch Graphix plc 
Annual Report and Accounts 2006
48
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
26. Fin Anci Al i nstruments continued
(v) Fair value interest risk
The Group enters into lease arrangements as both lessee and lessor. These leases are transacted at fixed rate thereby exposing the Group to 
fair value interest rate risk. Currently, the Group does not hedge any of this risk. Finance leases to which the Group is exposed to fair value risk 
can be analysed as follows:
       31/12/06 31/12/05 
       €’000 €’000
Financial assets years
0–1       1,356 1,632
1–2       1,426 1,637
2–3       1,231 1,588
3–4       927 1,381
4–5       592 1,357
       5,532 7 ,595
       31/12/06 31/12/05 
       €’000 €’000
Financial liabilities years
0–1       3,918 2,526
1–2       2,257 2,328
2–3       2,056 2,391
3–4       1,933 2,459
4–5       1,862 2,532
>5       29,840 31,222
       41,886 43,458
There is no significant difference between the book and fair value of financial assets and liabilities.
h edging activities
At 31 December 2006, the Group held several foreign exchange contracts to hedge future cash inflows in USD and JPY. The hedged items 
concern foreseeable transactions (sales orders) and highly probable future transactions (from anticipated orders). Hedging activities were 
effected by combining forward exchange contracts and currency options and swaps, which combines a call and put and aims to hedge 
future USD and JPY inflows. Since the Group does not apply the hedge accounting principles of IAS 39 Financial instruments: Recognition and 
measurement, the hedge items that are recognised at year-end, are included in the balance sheet at fair value and movements in fair value are 
taken directly to net profit or loss for the year. The following foreign exchange contracts are outstanding:
       2006 2005 
       Fair value Fair value 
Description     Currency Maturity date €’000 €’000
Total options     usd 27/12/07 493 38
Total options     jpy 21/12/07 234 –
Total       727 38
       2006 2005 
       Fair value Fair value 
Description     Currency Maturity date €’000 €’000
Total forwards     usd 27/12/07 (113) (217)
Total options     usd   (79)
Total swaps        (34)
Total       (113) (330)
27. Pension commitments
The Group established a number of pension schemes around the world covering many of its employees. The Group’s pension arrangements 
are principally defined contributions in nature. Defined benefit arrangements are not significant, covering just eight employees. The assets of 
these schemes are held separately from those of the Group in funds administered and under control of trustees.
At 31 December 2006, no contributions were outstanding to these schemes. Pensions costs are disclosed in note 4.
notes to accounts continued Punch Graphix plc 
Annual Report and Accounts 2006
49
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
28. oP er Atin G le Ase commitments    
      31/12/2006  31/12/2005 
      vehicles,  Vehicles, 
      plant and  plant and 
     Property equipment Property equipment 
     (€ ’000) (€ ’000) (€ ’000) (€ ’000)
Commitments under non-cancellable operating leases expiring:
within one year     623 596 863 602
later than one year and less than five years     2,494 364 2,81 1 569
after five years     1,557 2 947 4
total     4,674 962 4,621 1,175
At 31 December 2006, the Group has lease agreements in respect of properties, vehicles, plant and equipment, for which payments extend 
over a number of years. Operating lease agreements relate to office premises, car leases and IT equipment. Leases are negotiated for an 
average term of three years. Included in property lease is the rent of the Heultje building from Punch Property International N.V for a term of  
nine years. Future minimum lease payments under non-cancellable operating lease where the Group is lessor are primarily under contingent 
rental agreements. Contingent rentals recognised in income for the year ended 31 December 2006 were €291,000 (2005: €207,000).
The average length of rental contracts is 5 years.
29. r el Ated P Arties t r Ans Actions
       31/12/2006 31/12/2005 
Group       € ‘000 € ‘000
Directors fee       – 605
Punch International and affiliates       798 3,668
Linomedia (associate undertaking)       – 500
SWAP Invest Ltd.       – 430
total related party charges       798 5,106
Punch International and affiliates       24 650
Linomedia (associate undertaking)       – 1,577
Xeramics (associate undertaking)       – 65
Stora Enso Digital Solutions (associate undertaking)       – 1,766
total related party income       24 4,058
Punch International and affiliates       402 5,887
Linomedia (associate undertaking)       – 1,355
Xeramics (associate undertaking)       – 183
Stora Enso Digital Solutions (associate undertaking)       – 510
total related party balance sheet receivable       402 7 ,935
Punch International and affiliates       563 1,041
Stora Enso Digital Solutions (associate undertaking)       – 3
total related party balance sheet payable       563 1,044
In respect of the Company, an amount of €2,160,000 was recharged to subsidiary undertakings in respect of management charges. Dividends 
of €1,700,000 were received from subsidiary undertakings. 
The total amount due from subsidiary undertakings at 31 December 2006 was €6,800,000. These amounts do not bear interest and are 
unsecured.
At 31 December 2006, Punch International N.V owned 49% of the issued share capital of Punch Graphix plc. Punch Graphix plc 
Annual Report and Accounts 2006
50
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
notes to accounts continued
30. Princi PAl com PAnies, J oint ventures And A ssoci Ates     
     
investments      
  % of ownership  % of ownership  
Operating Group Country of Incorporation 31/12/2006 31/12/2005  Principal activity
Punch Graphix plc UK    Holding
Punch Graphix International N.V Belgium 100.0% 100.0%  (1) Manufacturing
Punch Graphix Prepress Belgium N.V Belgium 100.0% 100.0%  (1) Manufacturing
Punch Graphix Prepress Germany GmBH Germany 100.0% 100.0%  (1) Manufacturing
Punch Graphix Americas Inc. United States 100.0% 100.0%  Sales & Marketing
Punch Graphix Japan Japan 100.0% 100.0%  Sales & Marketing
Punch Graphix Deutschland GmBH Germany 100.0% 80.0%  Sales & Marketing
Punch Graphix Nordic Oy Finland 80.0% 80.0%  Sales & Marketing
Punch Graphix Scandinavia AB Sweden 100.0% 100.0%  Sales & Marketing
Punch Graphix (UK) Ltd United Kingdom 100.0% 100.0%  (1) Sales & Marketing
Punch Graphix Nederland B.V. Netherlands 100.0% 100.0%  Sales & Marketing
Punch Graphix Italia Italy 100.0% 51.0%  Sales & Marketing
Punch Graphix France S.A. France 100.0% 100.0%  (1) Sales & Marketing
Punch Graphix Austria GmBH Austria 100.0% 100.0%  Sales & Marketing
Punch Graphix Hong Kong China 100.0% 100.0%  (1) Sales & Marketing
Punch Participatiemaatschappij B.V. Netherlands 100.0% 100.0%  (1) Holding
Punch Graphix Canada Canada 100.0% 100.0%  Sales & Marketing
Basys Repro & Print Canada 100.0% 100.0%  (1) Sales & Marketing
Xeikon Ltd UK 100.0% 100.0%  (1) Sales & Marketing
Punch Graphix Oceania PTY Ltd Australia 100.0%   (1) Sales & Marketing
Punch Graphix Brasil Comercio de Maquinas  
Grafica Ltda Brasil 100.0%   (1) Sales & Marketing
Punch Graphix Shenzhen China 100.0%   Manufacturing
Linomedia Integrated Publication Printing Systems,  
Commercial and Industrie Co S.A. Greece 91.5% 15.0%  Sales & Marketing
Linosmart AEBE Greece 91.4%   (2) Sales & Marketing
Linomedia Baski AS Turkey 73.2%   (2) Sales & Marketing
Linomedia Cyprus Ltd Cyprus 64.1%   (2) Sales & Marketing
Linomedia Bulgaria Ltd Bulgaria 91.5%   (2) Sales & Marketing
Linomedia Romania Srl Romania 91.5%   (2) Sales & Marketing
Linomedia Serbia-Montenegro Serbia 91.5%   (2) Sales & Marketing
Stielund AB Sweden 100.0%   Sales & Marketing
  % of ownership  % of ownership  
Interests in associated undertakings Country of Incorporation 31/12/2006 31/12/2005
Xeramics International N.V Belgium 25.0% 25%  Sales & Marketing
Stora Enso Digital Solutions N.V Belgium – 40%  Sales & Marketing
Xeikon Shenshen Digital Printing Equipment Ltd China 45.0% 45%  Sales & Marketing
Exin AEBE Greece 9.2%   (2) 
Anax AEBE Greece 9.2%   (2) 
Apex AEBE Greece 9.2%   (2) 
Technological Park of Thessaly Greece 2.3%   (2) 
High Technology Park Acropolis SA Greece 0.2%   (2) 
     
(1) investments held by Punch Graphix plc     
(2)  for investments held by Linomedia Integrated Publication Printing Systems, Commercial and Industrie Co SA in 2005, the Group had Board 
representation and the investment was considered as an associate at 31 December 2005.   Punch Graphix plc 
Annual Report and Accounts 2006
51
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
Punch Graphix italia s .r.l.
The shareholdings in Punch Graphix Italia increased in 2006 from 51% to 100%.
This transaction led to a negative goodwill of €1 12,000 which has been recognised in the income statement.
     
Punch Graphix d eutschland Gmbh     
The shareholdings in Punch Graphix Deutschland increased in May 2006 from 80% to 100%.   
This transaction created goodwill of €378,000.     
     
stielund Ab     
The Group acquired 100% of the shares of Stielund AB on 1 November 2006, goodwill of €33,000 arose.   
     
l inomedia s .A.i.c .     
The Group acquired in February 2006 76,5% of the equity voting instruments of Linomedia, goodwill of €138,000 arose.  
After this transaction, the Group possesses of 91,5% of the share capital in the Linomedia Group.     
     
d isposals
stora enso d igital s olutions n .v
The participation in Stora Enso Digital Solutions N.V was sold to Stora Enso N.V on 15 May 2006. The investment was sold for €30,000.  
No gain or loss arose.
31. AcQ uisitions
      Punch Punch 
      Graphix Graphix 
     Stielund Deutschland  Italia Linomedia 
     € ‘000 € ‘000 € ‘000 € ‘000
Fixed assets     28 32 13 4,995
Stock     895 356 492 2,596
Debtors     1,057 919 1,973 10,294
Cash at bank and in hand     28 867 43 198
Creditors     (1,691) (1,325) (2,068) (16,901)
Provisions     – (21) (69) (55)
total     317 828 384 1,127
% of equity     – 166 188 862
Consideration paid/cash     350 544 76 1,000
Goodwill     33 378  138
negative goodwill     – – (1 12) –
% of equity     100.0 20.0 49.0 76.5
Profit included in 2006     2 – – 519
The main factors leading to the recognition of goodwill are the presence of certain intangible assets, such as the value inherent on the 
incumbent workforce, which do not qualify for separate recognition.     
The negative goodwill was recognised in the income statement.
Turnover of the Group would have been €181,890,000 had the acquisitions occurred on 1 January 2006, the Group’s profit after tax would 
have been €15,580,000. Punch Graphix plc 
Annual Report and Accounts 2006
52
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
32. c ontin Gent li Abilities
At 31 December 31, 2006, the Group had no contingent liabilities.
33. Post b Al Ance sheet events
The shareholders received a cash offer from Punch International N.V on 8 January 2007, and the statement from the Independent 
Committee of our Board of Directors on 23 January 2007, expressing its reservation on the Punch International proposal, considering the 
company’s performance. The offer closed on 13 February 2007 with Punch International increasing its shareholding from 49% to 92.58%  
in Punch Graphix plc.
Due to the offer of Punch International N.V and the terms of the LTIP all awards vested. The Board of Directors decided that 100% of the 
shares (586,320 shares) granted under LTIP vests. In respect of the vesting of the LTIP an amount of €380,000 has to be recognised in the 
income statement in 2007.
The Board of Directors decided in 2006 that certain employees of the leadership team would receive a maximum of 128,000 ordinary shares 
if certain conditions were fulfilled. Due to the offer of Punch International and the Rules of the Plan, the Board of Directors decided to grant 
50% of the shares. In January 2007, 64,000 ordinary shares of 10p each were issued.
The Companies Act 1985 permits the Directors to revise the financial statement subsequent to issuance if they are found to be defective.
•
•
•
notes to accounts continued Punch Graphix plc 
Annual Report and Accounts 2006
53
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
s ecretary an D aDvisors to the com Pany r egistered office
Chestnut House
Hackness Road
Northminster Business Park
Upper Poppleton
York YO 26 6QR 
c ompany secretary
Filip Beernaert
n ominated advisor and broker
Altium Capital Limited
30 St. James’s Square
London SW1Y 4AL 
Auditors
BDO Stoy Hayward LLP
8 Baker Street
London W1U 3LL
l egal advisors to the company
Dickinson Dees LLP
121 The Mount
York YO 24 1DU
r egistrars
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
c ompany n umber
5403372 Punch Graphix plc 
Annual Report and Accounts 2006
54
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
notice of annual General meetin G
this document is im Port Ant . iF you Are in Any doubt About wh At A ction you should t Ake, you Are recommended to 
consult your F in Anci Al Adviser .
iF you h Ave sold or tr Ans Ferred All your ordin Ary sh Ares , you should send this document And the enclosed F orm 
o F Proxy And notice o F meetin G to the P urch Aser or to the stockbroker or other AG ent throu Gh whom the sAle wAs 
eFFected , For tr Ansmission to the P urch Aser .
Notice is hereby given that the annual general meeting of Punch Graphix plc (the ‘Company’) will be held at Chestnut House, Hackness Road, 
Northminster Business Park, Upper Poppleton, York, YO26 6QR, UK at 10.00 am on May 21, 2007 to consider and, if thought fit, pass the 
following resolutions as ordinary resolutions other than resolution 8 which will be proposed as a special resolution:
o rdin Ary b usiness
1. To receive and adopt the accounts for the financial year ended 31 December 2006 together with the directors’ report, and the auditors’ 
report on those accounts and the auditable part of the directors’ remuneration report. 
2. To pay no final dividend for the financial year ended 31 December 2006. 
3. To re-elect Wim Deblauwe as a director of the Company. 
4. To re-elect Philippe Ghekhiere as a director of the Company.
5. To re-appoint BDO Stoy Hayward LLP as the auditors of the Company. 
6. To authorise the directors to agree the remuneration of the auditors of the Company. 
7. To approve the directors’ remuneration report for the financial year ended 31 December 2006. 
 
sPeci Al b usiness
8. That in accordance with article 11 of the Company’s articles of association and the Act the Company be generally and unconditionally 
authorised for the purposes of section 166 of the Act to make market purchases (within the meaning of section 163(3) of the Act) on the 
Alternative Investment Market of the London Stock Exchange of ordinary shares of 10p each in the capital of the Company provided that: 
8.1 the maximum aggregate number of ordinary shares hereby authorised to be purchased is 10,290,104; 
8.2 the minimum price which may be paid for such shares is 10p per ordinary share (exclusive of expenses);
8.3  the maximum price (exclusive of expenses) which may be paid for such ordinary shares shall not be more than 5% above the average 
of the market values for ordinary share as derived from the London Stock Exchange’s Alternative Investment Market for the five 
business days immediately preceding the date on which the ordinary shares are purchased;
8.4  unless previously renewed, varied or revoked, the authority hereby conferred shall expire at the conclusion of the Company’s next 
annual general meeting or 15 months from the date of this resolution (whichever is earlier); and
8.5  the Company may make a contract or contracts to purchase ordinary shares under the authority conferred by this resolution prior to 
the expiry of such authority which will or may be executed wholly or partly after the expiry of such authority and may make a 
purchase of ordinary shares in pursuance of any such contract or contracts.
19 April 2007
By order of the board
Filip beernaert
Company Secretary
Registered office:
Chestnut House, Hackness Road, Northminster Business Park, Upper Poppleton, York, YO26 6QR
Registered in England and Wales No. 5403372 Punch Graphix plc 
Annual Report and Accounts 2006
55
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
n otes
The following notes explain your general rights as a shareholder and your right to attend and vote at this meeting or to appoint someone else 
to vote on your behalf.
1.  Only those members registered in the Register of Members of the Company as at 10am on 19 May 2007 shall be entitled to attend and 
vote at the meeting convened above in respect of the number of shares registered in their names at that time. 
2.  A member entitled to attend and vote at the meeting convened by the above notice is entitled to appoint one or more proxies to attend 
and, on a poll, to vote instead of him. A proxy need not be a member of the Company. Appointing a proxy will not prevent a shareholder 
from attending in person and voting at the meeting.
3.  A form of appointment of proxy is enclosed. If you return more than one proxy appointment, that received last by the registrar before  
the latest time for the receipt of proxies will take precedence. The form of proxy includes a vote withheld option. Please note that a  
vote withheld is not a vote in law and will not be counted in the calculation of the proportion of the votes for and against any  
particular resolution.
4.  The appointment of a proxy and the original or duly certified copy of the power of attorney or other authority (if any) under which it is 
signed or authenticated should be deposited with the Company’s registrar at the address shown on the proxy form or received by the 
registrar not later than 10am on 19 May 2007 or 48 hours before the time for holding any adjourned meeting. 
5.   In accordance with the Uncertificated Securities Regulations 2001, only those members entered on the Company’s register of members 
not later than 10am on 19 May 2007 or, if the meeting is adjourned, shareholders entered on the Company’s register of members not later 
than 48 hours before the time fixed for the adjourned meeting, shall be entitled to attend and vote at the meeting. Changes to entries on 
the register of members after that time will be disregarded in determining the rights of any person to attend or vote at the meeting. 
  Punch Graphix plc 
Annual Report and Accounts 2006
56
Job:	 8921_PG_06	AR_back_AW.indd	 Proof:	 09	 Proof Read by:
Operator:	Rich	 Date:	 12.04.2007	
Server:	 studio	3	 Set-up:	 Rob	 First	Read/Revisons
notes  Registered address:
Punch Graphix plc
Chestnut House
Hackness Road
northminster business Park
upper Poppleton
York Yo26 6QR
uK
Company number: 5403372
Contact Address:
Punch Graphix international n .v
Duwijckstraat 17
2500 l ier
belgium
tel: +32 3 443 13 11
Fax: +32 3 443 13 09
email: info@punchgraphix.com
www.punchgraphix.com