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annual report and  
accounts 2006
this annual report 
is for the special 
attention of
↘
 
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this report is printed using  
punch graphi x technolog ies
personalised digital colour cover 
with xeikon 6000 fa toner and 
x800 digital frontend
text pages  
are printed offset using prepress 
equipment from basysprint  
uvsetter 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 clearminded focus on rd punch 
graphix is solely dedicated to customer 
satisfaction and aims to deliver high quality 
costeffective 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
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2006 highli ghts
•   reinforced technology leadership in chosen  
market segments through new xeikon 6000  
fa form adapted colour toner range x800 v17 
digital frontend 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 recruitmenttraining 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 173340 158263 10
ebitda 41695 34760 20
operating profit 22482 21477 5
profit before tax 21212 18453 15
net profit equity interests 15901 12424 28
earning per share euro cent 1555 1332 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 1555 euro cent
2005 1332 euro cent punch graphix plc 
annual report and accounts 2006
02
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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 highend digital colour 
printing systems prepress and operating software and 
consumables for the global printing market solutions 
include printondemand direct marketing and 
transactional applications for the document printing 
sector and packaging label and speciality applications 
for the industrial sector
xeikon engines are webfed combining unique widths 
with virtually unlimited sheet length and the widest 
variety of substrates using electrophotographic 
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 frontend 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 frontend pre and postpress solutions
that seamlessly integrate into almost any workfl ow
↘ punch graphix plc 
annual report and accounts 2006
03
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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 computerto
plate ctp – with the advantage of using the cheap and 
widely available ultra violetplates used for the traditional 
computertofilm 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
stateofthe art 
demonstration 
facility 247 onsite 
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 nv
operational headoffice hosting 
corporate functions digital colour 
solutions rd software production 
development and production of  
punch graphix toner
punch graphix prepress belgium nv 
development and production  
of oem ctp for newspaper sector  
and inhouse tooling shop
canada
punch graphix 
canada inc
own sales and 
service office 
established in 
2005
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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 265
europe middle east africa 67  
asia pacic 65
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 
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↘
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
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chairman’s st at ement
the shareholders received a cash offer from punch 
international nv 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 9258 in punch graphix plc 
subsequently the independent nonexecutive 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 longterm 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 proactive 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 €17334m 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 computertoplate 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 vpcreative strategies direct mail express dme  
daytona beach fl and itasca il  usa  
lea di ng us o net oone d irect m arket er choos es x eikon 
xeikon 5000 07
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basysprint 
uvsetters 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 uptime 
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 multipage 
documents at unrivalled speeds it handles the widest 
range of paper stock and substrates in the market
a perfect fi t for highend digital colour printers who 
need higher productivity and fl exibility it opens up new 
business opportunities in the ondemand 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
upontyne 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 fullcolour a4page impressions per 
week producing over 10000 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 shapemodifi ed toners in highspeed 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 fdaapproved for indirect food contact 
pioneering with the 
form adapted toner
a successful year punch graphix plc 
annual report and accounts 2006
08
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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 rd teams are 
continuously monitoring technological changes 
customer feedback and competitor activity 
the second stream is designing a userfriendly 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 electrophotography for 
xeikon combined with inhouse developed toner 
capability as well as through the choice of uvsensitive 
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  
proactive 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 gotomarket strategy is 
the full solution approach for example we are targeting 
inplant printing facilities for large companies or 
institutions to enter those markets successfully we 
present flexible finishing solutions with inline 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
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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 reenforcing 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 rd as well as running a number of rd 
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
qa
“ the punch graphix strategy is founded on four 
valueadding 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
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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 
highend digital colour printing systems division xeikon 
and the computertoplate prepress division basysprint 
and oem showing healthy development group revenue 
was €1733m 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 €225m 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 3000 compared
to approximately 2500 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 computertofi 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 x800 digital 
frontend 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 highend 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 x800 digital frontend 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 comarketing agreement 
with artworksystems the prepress frontend 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 265
europe middle east africa 67  
asia pacic 65
consolidated revenue per  
business line 2006
digital printing 67
prepress oem 18  
prepress basysprint 15
total sales
63
855
1052
1532
1644
180
160
140
120
100
80
60
40
20
0
2002 2003 2004 2005 2006
operating prot
28
119
136
215
225
25
20
15
10
5
0
2002 2003 2004 2005 2006
prot before taxation
19
91
11
185
212
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 265
europe middle east africa 67  
asia pacic 65
consolidated revenue per  
business line 2006
digital printing 67
prepress oem 18  
prepress basysprint 15
total sales
63
855
1052
1532
1644
180
160
140
120
100
80
60
40
20
0
2002 2003 2004 2005 2006
operating prot
28
119
136
215
225
25
20
15
10
5
0
2002 2003 2004 2005 2006
prot before taxation
19
91
11
185
212
25
20
18
16
14
12
10
8
6
4
2
0
2002 2003 2004 2005 2006
€m €m €m total sales
63
855
1052
1532
1644
180
160
140
120
100
80
60
40
20
0
2002 2003 2004 2005 2006
operating prot
28
119
136
215
225
25
20
15
10
5
0
2002 2003 2004 2005 2006
prot before taxation
19
91
11
185
212
25
20
18
16
14
12
10
8
6
4
2
0
2002 2003 2004 2005 2006
€m €m €m
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“ with the uvsetters we can handle all the 
uvsensitive 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 uvsetters 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 longterm 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 netuned 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 uvsetters for china  12
punch graphix plc 
annual report and accounts 2006
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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 €1583m in 2005 to €1733m in 
2006 of this amount €11m relates to the acquisition of 
linomedia in february 2006 765 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 265 and asia 65
ebitda earnings before interest tax depreciation and 
amortisation increased by 20 from €347m in 2005 to 
€417m in 2006 in sales terms this represents a margin of 
25 operating profit on sales for the year was €225m 
which represents an increase of 5 on the previous year
the tax charge of €52m reflects an effective tax rate of 
25 this compares to an effective tax rate of 303 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 €435000 in 
2005 to €101000 the group acquired the minority 
interests in its german and italian subsidiaries
in the reported year earnings per share increased by  
17 to 1555 euro cent the average number of shares  
in issue in the calculation of earnings per share was 
1022m for 2005 the company had on average €933m 
shares in issue
dividend
given the change of control further to the offer from 
punch international nv the board will propose not to pay 
a final dividend for 2006 
cash flow
cash flow from operating activities increased from €39m 
to €275m despite an increase in working capital of €36m
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 €205m 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 buildup 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 €76m
cash and shortterm investments at the end of the year 
amounted to €398m
the results were positively influenced by the market 
value of our hedging instruments financial result  
of €09m
shareholder’s funds
shareholders’ funds totalled €1079m the increase in the  
year of €125m is driven mainly by retained earnings
jan smits
chief financial officer punch graphix plc 
annual report and accounts 2006
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direct ors
board of directors of the company
philip ghekiere
nonexecutive 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 nv 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 nv 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
nonexecutive 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 nonexecutive deputy chairman of 
isoft group plc and a nonexecutive director of tekdata 
distribution ltd and tekdata interconnect ltd he is 
chairman and nonexecutive director of patientline plc 
he is a fellow of the institute of chartered accountants 
kenneth humphreys
nonexecutive 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
nonexecutive 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
nonexecutive director
in 1982 guido aged 47 initiated the growth of new 
impriver nv a ghentbased 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
nonexecutive 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 nv  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 midsize companies such as cytec ucb alcon 
and baxter
jan smits
chief financial officer nonexecutive 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 
sintaloysius 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
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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 €129m 
the amount attributable to the equity interest of €159m 
2005 €124m 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
 31122006  31122005
  ordinary  ordinary 
name shares  shares
geoffrey white  20408 20408
ben c van assche  150000 0
jan smits  140783 140783
guido dumarey  0 0 
kenneth humphreys  10204 10204 
nigel mccorkell  8163 8163
dick tilanus 0 157 706
 on admission of the company’s shares to aim jan smits through his 
interests in swap nv was granted an award 140183 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 nv was granted 150000 
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
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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 liquiditycash 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 
inhouse 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 reappointment will be proposed at the 
annual general meeting
philip ghekiere
c hairman of the board punch graphix plc 
annual report and accounts 2006
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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 
daytoday 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 
nonexecutive 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
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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 costeffective 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
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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 bvba  157 706 shares granted on 26 may 2005  all shares were granted to 
  tilanus consulting bvba  
  by decision of the board
swap nv  140183 shares granted on 26 may 2005
wolive nv  150000 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 nonexecutive 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 longterm on 
both growth and profitability
a base salary a bonus scheme and a longterm 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
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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 nonexecutive 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 nonexecutive 
director the nonexecutive 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 nv €159705  nil €9000 €168705 –
jan smits  swap nv €195000  nil €12000 €207000 €237000
dick tilanustilanus consulting bvba     – €231375
nonexecutive directors
geoffrey white  £60000  nil  none  £60000 £45000
nigel mccorkell  £30000  nil  none  £30000 £22500
ken humphreys £30000  nil  none  £30000 £22500
guido dumarey  £30000  nil  none  £30000 £22500
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 nonexecutive 
directors are entered into for a threeyear 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 €1000
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
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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 setup 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 fdaapproved 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 illuminationtofilm the 
removal of the film lessens the environmental stress 
of the printing process 
the fact that basysprint allows the use of uvsensitive 
conventional plates is highly beneficial to the 
environment and is moreover energyefficient 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
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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 
map  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 90012000 
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 employeefriendly 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
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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
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      31122006  31122005 
    note  € ‘000  € ‘000
total sales    123  164439  153210
other operating income      8901  5053
total r evenues      173340  158263
change in inventories      13798  2952
purchases      78403  69066
salaries  employee benefits    5  35855  29963
depreciation  amortisation    1012  15906  10167
impairment losses on current assets    4  3307  31 17
other operating charges    4  31185  27 425
total operating expenses      150858  136786
o perating result      22482  21477
finance income    6  3009  1329
finance cost    6  4161  4084
share of results of associates    13  118  269
profit before tax      21212  18453
taxes    7  5210  5594
profit for the year      16002  12859
attributable to equity interest      15901  12424
attributable to minority interest      101  435
earnings per share – basic eurocents per share    8  1555  1332
earnings per share – diluted eurocents per share    8  1546  1326
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
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      31122006  31122005 
    note  € ‘000  € ‘000
non current assets      89495  84817
intangible assets    101 1  27274  25152 
ppe property plant  equipment    12  53619  49973
investments in associates    13  221  2171
other receivables    14  4788  6497
deferred tax assets    14 24  3593  1024
c urrent assets      130653  108962
inventories    15  44122  32491
trade receivables    16  39817  34995 
other receivables    16  6189  1 1409
cash and cash equivalents    18  39798  30029
financial instruments    26  727  38
total assets      220148  193779
amount attributable to equity shareholders of the parent     107859  95403
ordinary shares    19  15029  15027 
share premium account      50378  50378
retained earnings      43150  30604
other reserves      3300  3300
translation differences      3998  3906
minority interests    21  527  624
total equity      108386  96027
non current liabilities      47604  46187
interest bearing loans  borrowings    22  43191  40932
deferred tax liabilities    14 24  3198  4180 
other liabilities      1215  1075
c urrent liabilities      64158  51565
trade payables    25  20464  21457
other current payables    25  23831  20715
current tax liabilities      7020  4025
borrowings    22  10810  2848
provisions    23  1920  2190
financial instruments    26  113  330
total liabilities and equity      220148  193779
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
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com pany balance sheet      31122006  31122005 
    note  € ‘000  € ‘000
non current assets      63880  40394
investments    13  63873  40394
other receivables      7  
c urrent assets      14133  31615
trade receivables    16  1086  851
other receivables    16  7350  16099
deferred charges and accruals      73  127
cash and cash equivalents      5624  14538
total assets      78013  72009
shareholders equity      71200  71361
ordinary shares      15029  15027
share premium account      50378  50378
retained earnings      1837  3518
other reserves      3300  3300
translation differences      656  862
total equity      71200  71361
c urrent l iabilities      6813  648
trade payables    25  2268  191
other current payables    25  4540  184
current tax liabilities      5  273
total liabilities and equity      78013  72009
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
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      31122006  31122005 
      € ‘000  € ‘000
c ash flows from operating activities
profit before taxation       21212  18453
adjustments for  
impairment losses      –  265
depreciation      15906  10167
provisions      271  143
inventories      7498  4398 
trade  other receivables      11922  13482
trade  other payables      8070  4202
net finance charges pl      1152  2753
lossprofit on the sale of fixed assets      575  257
share of results of associates      118  269
interest paid      3930  3792
tax paid      3656  1975
net cash from operating activities      27460  3944
c ash flows from investing activities  
cash to acquire subsidiaries      1714  497
cash acquired of the sale of associates      30 
purchase of property plant  equipment      9488  7 951
proceeds from sale of equipment      2270  4352
own work capitalised of intangible assets      7608  5386
purchase of intangible fixed assets      1473  901
interest received      1961  1329
net cash used in investing activities      16022  9054
c ash flows from financing activities  
proceeds from the issue of share capital      –  2831 1
capital element of finance leases paid      1310  4798
capital element of finance leases received      1286  –
proceeds from new loans  borrowings      9542  6440
reimbursement of loans  borrowings      7442  –
dividend paid      3899  0
net cash from used in financing activities      1823  29953
foreign exchange      154  128
net increase in cash  cash equivalent      9769  24971
cash  cash equivalent at the beginning of the year      30029  5058
cash  cash equivalent at the end of year      39798  30029
consoli date d cash flow statement punch graphix plc 
annual report and accounts 2006
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com pany cash flow statement       311206 311205 
       €’000 €’000
c ash flow from operating activities
profit before taxation       2218 3737
adjustments for
net interest received       2413 638
       195 3099
change in trade and other receivables       8561 17 509
change in trade and other payables       6433 429
       14799 13981
income taxes paid       278 219
c ash flow from used in operating activities       14521 14200
c ash flow from investing activities
investment in subsidiary undertakings       21976 22
interest received       2263 449
c ash flow from used in investing activities       19713 427
c ash flow from financing activities
proceeds from the issue of capital       – 2831 1
dividend paid       3899 –
c ash flow from used in financing activities       3899 2831 1
foreign exchange       177 –
net increasedecrease in cash and cash equivalents       8914 14538
cash and cash equivalents at the beginning of the period       14538 –
cash and cash equivalents at the end of the period       5624 14538 punch graphix plc 
annual report and accounts 2006
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consoli date d statement of chan ges in equity    share 
   calledup premimum retained translation other 
   share capital account earnings differences reserves total 
   € ‘000 € ‘000 € ‘000 € ‘000 € ‘000 € ‘000
at 1 january 2005   1 1746 23558 18076 3075 3300 53605
ltip 
1
   – – 104 – – 104
translation difference   – – – 831 – 831
total expense recognised in equity   – – 104 831 – 727
profit of the year   – – 12424 – – 12424
dividends   – – – – – –
new share capital issued   3281 28957 – – – 32238
share issue cost   – 2137 – – – 2137
at 1 january 2006   15027 50378 30604 3906 3300 95403
ltip 
1
   – – 544 – – 544
translation difference   – – – 92 – 92
total expense recognised in equity   – – 544 92 – 452
profit of the year   – – 15901 – – 15901
dividends   – – 3899 – – 3899
new share capital issued   2 – – – – 2
at 31 december 2006   15029 50378 43150 3998 3300 107859
1
 ltip long term incentive plan see note 20
the €3300000 other reserves concerns a capital contribution of punch international nv
com pany statement of chan ges in equity    share 
   calledup 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 1746 23558 3300 – – 38604
translation differences   – – – – 862 862
total expense recognised in equity   – – – – 862 862
profit of the year   – – – 3518 – 3518
new shares issued   3281 28957 – – – 32238
share issue cost   – 2137 – – – 2137
at 1 january 2006   15027 50378 3300 3518 862 71361
translation differences   – – – – 1518 1518
total expense recognised in equity   – – – – 1518 1518
result of the year   – – – 2218 – 2218
new shares issued   2 – – – – 2
dividends   – – – 3899 – 3899
at 31 december 2006   15029 50378 3300 1837 655 71200
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 €2218000 2005 €3518000 punch graphix plc 
annual report and accounts 2006
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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 
reregistered 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 nv 
formerly xeikon international nv punch graphix prepress 
belgium nv formerly strobbe graphics nv punch 
graphix prepress germany gmbh formerly basysprint 
gmbh and certain other companies in which punch 
international nv ‘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 £10282922 divided into 
102829220 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
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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 straightline 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 straightline 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 straightline 
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 nonfinancial 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
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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 
straightline 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 straightline 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 noncurrent 
liabilities as deferred income and are credited to the 
income statement on a straightline 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 straightline 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 straightline 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 writedowns 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
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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 postacquisition 
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 ie 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 shortterm 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
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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 noncash 
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 06715 €£
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 inthemoney 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 nonderivative 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
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h eldtomaturity investments
these assets are nonderivative 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
availableforsale
nonderivative financial assets not included in the  
above categories are classified as availableforsale 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 availableforsale 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 outofthemoney 
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 shortterm 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
shareb 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 nonmarket 
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
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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    
    
 31122006 31122005  31122006 31122005 31122006 31122005 31122006 31122005 
 t otal total  c tp ctp digital printing digital printing  o ther other 
 € ‘000 € ‘000  € ‘000 € ‘000 € ‘000 € ‘000 € ‘000 € ‘000
total sales 164439 153210  54172 49876 110267 103334 – –
other operating income 8901 5053  2664 6356 6237 1303 – –
total revenues 173340 158263 56836 56232 116504 102031 – –
operating result 22482 21477  8417 8883 14065 12594 – –
finance incomecost 1152 2755 – – – – 1152 2755
share of results of associates 118 269 – – 118 269 – –
result before tax 21212 18453 – – – – – –
taxes 5210 5594 – – – – – –
net result 16002 12859      
net result – minority interest 101 435 – – 101 435 – –
total assets 220148 193779  49664 31579 167332 107 272 3152 54928
total liabilities 111762 97 752 5328 4723 105030 29395 1404 63634
total capital expenditure 18569 16586 3162 2662 15407 13924 – –
total depreciation and amortisation 15906 10167 4535 1437 11373 8730 – –
total impairment on current assets 3307 31 17  415 392 2890 2725 2 –
total other non cash expenses 1798 2764  1061 2397 737 367 – –
investments in associates 221 2171 – – 221 2171 – –
2 revenue
an analysis of the revenue is as follows
       31122006 31122005 
       € ‘000 € ‘000
sales of parts and options       11515 9588
sale of consumables       45144 41081
sale of printing systems       88544 86021
revenue from service arrangements       14429 10353
equipment leasing revenue       4807 6167
       164439 153210
other operating income       8901 5053
       173340 158263 
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           
 31122006 31122005 31122006 31122005 31122006 31122005 31122006 31122005 
 europe europe americas americas  asia asia t otal total 
 € ‘000 € ‘000 € ‘000 € ‘000 € ‘000 € ‘000 € ‘000 € ‘000
total sales 110182 102576 43010 42594 11247 8040 164439 153210
segment assets 187675 158253 15079 16806 17394 18720 220148 193779
total capex 15130 13370 3086 3191 354 25 18569 16586 punch graphix plc 
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notes to accounts continued
4 o ther o per atin g ch ar ges
       31122006 31122005 
       € ‘000 € ‘000
rental leasing and maintenance of land property and equipment      5063 4976
utility and service costs of land property and equipment       7241 7 180
insurance costs       603 742
research and development costs       6667 6107
sales marketing and representation costs       7496 7 261
share based payments – equity settled       544 104
other fees and expenses       3581 1159
foreign exchange gainloss       78 215
during the year the group paid bdo stoy hayward llp and its associates €321000 2005 €209000 for audit services in 2006 there was an  
under accrual in respect of 2005 audit fees of €154000 the audit fee paid to bdo stoy hayward llp in respect of the company was €137000 
2005 €139000
during the year bdo stoy hayward llp and its associates supplied nonaudit services totalling €62000 2005 €406000 in 2006 these services 
comprised tax services of €44000 2005 €1000 and other audit services of €18000 2005 €2000 in 2005 corporate finance services of €403000 
were supplied
impairment losses on current assets comprise €2560000 2005 €1472000 in respect of inventory and €747000 2005 €1381000 in respect of 
accounts receivable
5 employees and directors
       31122006 31122005 
       € ‘000 € ‘000
staff costs of the year          
wages and salaries       27608 23516
social security costs       5268 5289
other staff costs       2153 323
pension costs       826 835
salaries and employee benefits       35855 29963
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 €593000 2005 €672000 emoluments comprise shortterm 
benefits only the aggregate emoluments of the highest paid director was €207000 2005 €271375 the executive directors received in total 
290183 shares under the longterm incentive plan with a value of €254000 2005 €520000 in addition €534000 was expensed during the 
year in respect of the ltip scheme 2005 €104000 the company had no employees punch graphix plc 
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6 fin anci al income and ch ar ges  
       31122006 31122005 
       € ‘000 € ‘000
net finance cost        
interests on bank borrowings       996 834
interest on finance leases       2356 2247
financial instruments       231 1 13
other financial expenses       578 890
finance c ost       4161 4084
interests on bank accounts       1052 782
interest income from finance leases       592 285
financial instruments       1048 254
other financial income       317 8
finance income       3009 1329
finance c ost       1152 2755
7 income t axes  
       31122006 31122005 
       € ‘000 € ‘000
analysis of charge arising in year    
uk at 30       244 518
belgium at 34       6121 1876
other between 22 and 41       1024 708
total current tax       7389 3102
deferred tax       2179 2492
taxation       5210 5594
       31122006 31122005 
       € ‘000 € ‘000
c urrent tax charged to the income statement   
corporate taxation       7389 3102
total current tax liabilities       7389 3102
     31122006  31122005 
     € ‘000  € ‘000
tax in the income statement      
current tax     7389  3102
deferred tax     2179  2492
taxes     5210  5594
proof of tax     
r esult before tax     21330 – 18721 –
income tax using the belgian tax rate     7250 34 6365 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     2684 13 783 4 
underoverprovided in prior years     125 – 6 –
effect of tax rates in foreign jurisdictions     1 – 286 2
other tax effects     377 2 70 –
total tax reconciliation     5210 24 5594 30 punch graphix plc 
annual report and accounts 2006
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notes to accounts continued
8 earnin gs per s hare
       31122006 31122005 
       € ‘000 € ‘000
profit for the period       15901 12424
weighted average number of shares – basic       102241327 93258058
shares issued under ltip       589603 444472
average number of shares – diluted       102830930 93702530
eps eurocents per share       1555 1332
eps – diluted eurocents per share       1546 1326
9 d ividends 
       31122006 31122005 
       € ‘000 € ‘000
final dividend of 235 eurocent per share paid during       2399 –
 the year relating to the previous year’s result  
interim dividend of 15 eurocent per share paid during the year      1500 –
       3899 –
following the offer and subsequent increase in shareholding to 9258 of punch graphix plc by  punch international nv 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     10013 1155 13106 24274
additions – acquisitions     – 178 201 1 2189
additions – internally generated     5433 996 – 6429
disposals     60 248 – 308
other movements     – 319 319 –
currency translation adjustments     – – 33 33
at 1 january 2006     15386 1762 15469 32617
additions – acquisitions     12 1461 1383 2856
additions – internally generated     7 608 – – 7 608
disposals     68 9 – 77
currency translation adjustments     – 6 27 33
at 31 december 2006     22938 3208 16825 42971
amortisation     
at 1 january 2005     969 577 2306 3852
charge for the year     3143 574 1 14 3831
disposals     17 206  223
other movements     – 17 17 –
currency translation adjustments     – 4  1 5
at 1 january 2006     4095 932 2438 7465
charge for the year     5559 404 1741 7 704
disposals     142 8 – 150
additions through business combinations     – 683 – 683
currency translation adjustments     – 8 3 5
at 31 december 2006     9512 2003 4182 15697
net book value     
at 1 january 2006     11291 830 13031 25152
at 31 december 2006     13426 1205 12643 27274 punch graphix plc 
annual report and accounts 2006
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included in the charge of the year is the €1600000 adjustment to goodwill described in note 1 1 acquisition includes the €1090000 of  
preexisting 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
       31122006 31122005 
       € ‘000 € ‘000
at 31 december 2006 goodwill can be allocated to the business segments as follows    
ctp       7852 9699
digital       4776 3317
other       15 15
goodwill       12643 13031
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 pretax 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 €1600000 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 €1847 000 was recognised as a depreciation and amortisation in the income statement punch graphix plc 
annual report and accounts 2006
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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    47932 15811 1989 4046 69778
additions     172 5821 487 1488 7 968
sales and disposals    3764 579 – 1550 5893
other movements    21 1 648 1 1026 166
currency translation adjustments    16 205 56 3 274
at 1 january 2006    44567 21906 2533 2955 71961
additions through business combinations    1467 5666 814 43 7 990
additions    160 6446 524 2357 9487
sales and disposals    339 2440 269 829 3877
other movements    – 8 55 684 621
currency translation adjustments    34 388 58 2 482
at 31 december 2006    45821 31198 3599 3840 84458
depreciation      
at 1 january 2005    3911 10008 1251 244 15414
disposals and cancellation    355 – – – 355
charge for the year    1345 4290 366 335 6336
other movements    30 263 – 248 541
currency translation adjustments    5 3 44 – 52
at 1 january 2006    4936 14564 1661 827 21988
additions through business combinations    120 1665 682 – 2467
disposals and cancellation    331 1017 260 – 1608
charge for the year    1470 5774 464 494 8202
other movements    – 1 – – 1
currency translation adjustments    13 153 41 2 209
at 31 december 2006    6182 20832 2506 1319 30839
net book value      
o pening balance    39631 7342 872 2128 49973
c losing balance     39639 10366 1093 2521 53619
assets held under finance lease can be analysed as follows       
       2006 2005 
       € ‘000 € ‘000
net book value      
land and buildings       33199 33774
machinery and equipment       1917 868
       35116 34642 punch graphix plc 
annual report and accounts 2006
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13 fixed a ssets investments
       31122006 31122005 
       € ‘000 € ‘000
interests in associated undertakings        
at 1 january        
 net assets excluding goodwill       1081 1150
 goodwill       1090 1090
       2171 2240
share of profits retained       118 269
additions       – 472
impairments       – 272
disposals       30 –
transfer        712 –
transfer of goodwill       1090 –
at 31 december        221 2171
 net assets excluding goodwill       221 1081
 goodwill       – 1090
       221 2171
total assets       530 20371
total liabilities       81 14744
revenue       74 9508
profit after tax       262 1355
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 €1000000 of which €472000 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 nv was sold to stora enso nv for €30000
the existing goodwill at 31 december 2005 amounting to €1090000 is transferred at the acquisition date of the linomedia group to the 
intangible assets see note 10 the transfer of €712000 relates entirely to linomedia which became a subsidiary during the year
the company acquired for €191000 new investments in subsidiaries 2005 €40394000 and underwrote the capital increase in cash of punch 
graphix prepress belgium nv and punch graphics international nv for €23288000
14 n on current receiv ables
       31122006 31122005 
       € ‘000 € ‘000
finance lease receivables see note 17       4176 5963
other financial assets       612 534
receivables       4788 6497
    
other financial assets comprise principally deposits with the belgian social security authorities  
15 inventories
       31122006 31122005 
       € ‘000 € ‘000
raw materials and components       14224 15570
work in progress       3318 2387
finished goods       26580 14534
inventories       44122 32491
during the year an impairment loss of €2560000 2005 €1472000 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
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16 t r ade and other receiv ables
       31122006 31122005 
       € ‘000 € ‘000
trade receivables excluding related parties       40469 32695
less provision for impairment of receivables       2773 1387
trade debtors to related parties see note 29       30 1891
finance lease receivables       1356 1632
advances received       735 164
trade receivables net       39817 34995
other amounts receivable       4827 4347
other amounts receivable from related parties see note 29      372 6044
deferred charges and accruals       990 1018
total other receivables       6189 1 1409
total trade and other receivables       46006 46404
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 €8127 000
17 fin ance l ease r eceiv ables 
  present value of 
 minimum lease payments  minimum lease payments
     311206 311205 311206 311205 
     € ‘000 € ‘000 € ‘000 € ‘000
within one year     1625 1972 1356 1632
second to fifth year     4501 6532 4176 5963
after five years     – – – –
     6126 8504 5532 7 595
future finance charges     594 909 
     5532 7 595 
current finance lease receivables     1356 1632 
non current finance lease receivables     4176 5963 
total     5532 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 65
notes to accounts continued punch graphix plc 
annual report and accounts 2006
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18 ca sh and c ash e quiv alents
       31122006 31122005 
       € ‘000 € ‘000
shortterm bank deposits       4086 1 1026
cash at bank and in hand       35712 19003
c ash and cash equivalents       39798 30029
     
the weighted average effective interest rate on shortterm 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 alledup share capital       € ‘000 € ‘000
authorised   
150000000 shares of 10p each       21920 21920
issued and fully paid   
102840970 ordinary shares of 10p each 2005 102829220 shares      15029 15027
movement in share capital   
date transaction n ° shares c apital
240305 incorporation 2 –
200405 acquisition of investments 79999998 11691
260505 new shares issued at admission to aim 21027 551 3073
260505 new shares issued to acquire minorities 1069213 156
260505 new shares issued pursuant to the ltip 732456 107
at 1 january 2006  102829220 15027
161 106 new shares issued pursuant to the ltip 1 1750 2
at 31 december 2006  102840970 15029
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     142 594026 – –
granted during the year     142 150000 142 732456
forfeited during the year     – – 142 138430
exercised during the year     142 157706 – –
lapsed during the year     – – – –
outstanding at the end of the year     142 586320 142 594026
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
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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 €088 2005 €087 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 €534000 2005 €104000  
has been recognised as an expense in the year in respect of the ltip  this amount was calculated using the blackscholes model with 
following assumptions
       2006 2005
current share price in €       187 188
strike price in €       142 142
risk free rate        326 326
volatility        5010 5010
dividend yield        200 200
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 732456 shares were issued under the ltip of which 574570 shares remain outstanding they were issued at an exercise price of €142 
and vest over 3 years
on 16 november 2006 the company announced that 150000 ordinary shares of 10p each in the capital of the company were issued and 
alloted to wolive nv the service company for ben van assche the ceo of the company pursuant to the company’s ltip  
11570 shares issued to wolive nv were new ordinary shares of 10p each in the capital of the company and the balance of 138430 ordinary 
shares were transfers of existing shares to wolive nv from former members of the ltip  the 150000 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 128000 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
       31122006 31122005 
       € ‘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
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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  40567 – 40567 703 672 1375 41942
new debts  6440 – 6440 64 – 64 6504
repayments  3741 – 3741 707 350 1057 4798
other movements  2429 – 2429 2429 – 2429 –
currency translation adjustment  95 – 95 37 – 37 132
at 1 january 2006  40932 – 40932 2526 322 2848 43780
additions through business combinations  867 219 1086 694 6674 7 368 8454
new debts  427 5000 5427 – 41 15 41 15 9542
repayments  1770 – 1770 1541 4131 5672 7 442
other movements  2359 – 2359 2359 – 2359 –
currency translation adjustment  129 4 125 120 88 208 333
at 31 december 2006  37968 5223 43191 3918 6892 10810 54001
maturity        
at 1 january 2005        
within 1 year  – – – 2526 322 2848 2848
between 2 and 5 years  9709 – 9709 – – – 9709
more than 5 years  31223 – 31223 – – – 31223
at 1 january 2006  40932  40932 2526 322 2848 43780
within 1 year  – – – 3918 6892 10810 10810
between 2 and 5 years  6815 5223 12038 – – – 12038
more than 5 years  31153 – 31153 – – – 31153
at 31 december 2006  37968 5223 43191 3918 6892 10810 54001
the minimum lease payments under finance leases fall due as follows         
       31122006 31122005 
       € ‘000 € ‘000
not later than one year       6195 3003
later than one year but not more than five years       15203 14671
more than five years       51217 49635
       72615 67 309
future finance charge       30729 23851
       41886 43458
future finance charges falling due   
within 1 year       2277 477
within the 2nd and 5th year       8388 4962
after 5 years       20064 18412
total       30729 23851
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 625 2005 625 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
longterm bank loans includes a five year loan at a floating interest rate with six monthly installments shortterm 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 35 and 45 punch graphix plc 
annual report and accounts 2006
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23 provisions
     pensions warranty other total 
     € ‘000 € ‘000 € ‘000 € ‘000
c urrent
at 1 january 2005     295 780 973 2048
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 1195 794 2190
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 1345 233 1920
     
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 earlyretirement 
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 13366 3055 60 17 388
charged to profit and loss account   31 1 41 2181 775 2766 1090
exchange differences   – – – – 25 25
at 1 january 2006   564 73 11185 3830 2851 18503
charged to profit and loss account 2006   – 44 1888 732 1 10 1091
acquisitions   – – 791 – 176 967
exchange differences   – – – – 9 9
at december 31 2006   564 29 10088 4562 3128 18371
  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 13465 1 50 2196 16660
charged to profit and loss account  274 12 1883 1 2258 1514 1402
exchange differences  – 2 – – 103 12 89
at 1 january 2006  608 76 11582 – 2411 670 15347
charged to profit and loss account   675 25 121 51 489 1320 1601
acquisitions  597 14 667 109 239 296 1922
exchange differences  3 8 – – 58 35 104
at december 31 2006  1877 107 12370 58 2103 2251 18766
deferred taxes have been recognised in the balance sheet as follows        
       31122006 31122005 
       € ‘000 € ‘000
assets       3593 1024
liabilities       3198 4180
total       395 3156
notes to accounts continued punch graphix plc 
annual report and accounts 2006
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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 €2200000 of 
the losses of punch graphix prepress germany remained unprovided
25 t r ade and other payables
       31122006 31122005 
       € ‘000 € ‘000
trade payables excluding related parties       19901 20413
trade payables to related parties see note 29       563 1044
total trade payables       20464 21457
other tax and social security payables       5537 4442
advances received       1091 924
other debts       10237 7 856
accruals and deferred income       6966 7 493
total other payables       23831 20715
the trade payables and other payables in the company’s balance sheet concerns mainly amounts due to subsidiary undertakings of €6552000
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 intercompany 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 longterm 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 3464 55 2013 – – – – – 5532
trade  other receivables 28676 1954 5843 934 1807 40 – 230 39484
total 32140 2009 7 856 934 1807 40 – 230 45016
 eur gbp usd cad sek jpy aud brl total
financial liabilities
finance leases 41886 – – – – – – – 41886
borrowings 121 15 – – – – – – – 121 15
trade  other payables 17 641 1346 22975 271 1896 105 44 17 44295
total 71642 1346 22975 271 1896 105 44 17 98296
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
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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
       311206 311205 
       €’000 €’000
financial assets years
0–1       1356 1632
1–2       1426 1637
2–3       1231 1588
3–4       927 1381
4–5       592 1357
       5532 7 595
       311206 311205 
       €’000 €’000
financial liabilities years
0–1       3918 2526
1–2       2257 2328
2–3       2056 2391
3–4       1933 2459
4–5       1862 2532
5       29840 31222
       41886 43458
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 yearend 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 271207 493 38
total options     jpy 211207 234 –
total       727 38
       2006 2005 
       fair value fair value 
description     currency maturity date €’000 €’000
total forwards     usd 271207 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
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28 op er atin g le ase commitments    
      31122006  31122005 
      vehicles  vehicles 
      plant and  plant and 
     property equipment property equipment 
     € ’000 € ’000 € ’000 € ’000
commitments under noncancellable operating leases expiring
within one year     623 596 863 602
later than one year and less than five years     2494 364 281 1 569
after five years     1557 2 947 4
total     4674 962 4621 1175
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 nv for a term of  
nine years future minimum lease payments under noncancellable 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 €291000 2005 €207000
the average length of rental contracts is 5 years
29 r el ated p arties t r ans actions
       31122006 31122005 
group       € ‘000 € ‘000
directors fee       – 605
punch international and affiliates       798 3668
linomedia associate undertaking       – 500
swap invest ltd       – 430
total related party charges       798 5106
punch international and affiliates       24 650
linomedia associate undertaking       – 1577
xeramics associate undertaking       – 65
stora enso digital solutions associate undertaking       – 1766
total related party income       24 4058
punch international and affiliates       402 5887
linomedia associate undertaking       – 1355
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 1041
stora enso digital solutions associate undertaking       – 3
total related party balance sheet payable       563 1044
in respect of the company an amount of €2160000 was recharged to subsidiary undertakings in respect of management charges dividends 
of €1700000 were received from subsidiary undertakings 
the total amount due from subsidiary undertakings at 31 december 2006 was €6800000 these amounts do not bear interest and are 
unsecured
at 31 december 2006 punch international nv owned 49 of the issued share capital of punch graphix plc punch graphix plc 
annual report and accounts 2006
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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 31122006 31122005  principal activity
punch graphix plc uk    holding
punch graphix international nv belgium 1000 1000  1 manufacturing
punch graphix prepress belgium nv belgium 1000 1000  1 manufacturing
punch graphix prepress germany gmbh germany 1000 1000  1 manufacturing
punch graphix americas inc united states 1000 1000  sales  marketing
punch graphix japan japan 1000 1000  sales  marketing
punch graphix deutschland gmbh germany 1000 800  sales  marketing
punch graphix nordic oy finland 800 800  sales  marketing
punch graphix scandinavia ab sweden 1000 1000  sales  marketing
punch graphix uk ltd united kingdom 1000 1000  1 sales  marketing
punch graphix nederland bv netherlands 1000 1000  sales  marketing
punch graphix italia italy 1000 510  sales  marketing
punch graphix france sa france 1000 1000  1 sales  marketing
punch graphix austria gmbh austria 1000 1000  sales  marketing
punch graphix hong kong china 1000 1000  1 sales  marketing
punch participatiemaatschappij bv netherlands 1000 1000  1 holding
punch graphix canada canada 1000 1000  sales  marketing
basys repro  print canada 1000 1000  1 sales  marketing
xeikon ltd uk 1000 1000  1 sales  marketing
punch graphix oceania pty ltd australia 1000   1 sales  marketing
punch graphix brasil comercio de maquinas  
grafica ltda brasil 1000   1 sales  marketing
punch graphix shenzhen china 1000   manufacturing
linomedia integrated publication printing systems  
commercial and industrie co sa greece 915 150  sales  marketing
linosmart aebe greece 914   2 sales  marketing
linomedia baski as turkey 732   2 sales  marketing
linomedia cyprus ltd cyprus 641   2 sales  marketing
linomedia bulgaria ltd bulgaria 915   2 sales  marketing
linomedia romania srl romania 915   2 sales  marketing
linomedia serbiamontenegro serbia 915   2 sales  marketing
stielund ab sweden 1000   sales  marketing
   of ownership   of ownership  
interests in associated undertakings country of incorporation 31122006 31122005
xeramics international nv belgium 250 25  sales  marketing
stora enso digital solutions nv belgium – 40  sales  marketing
xeikon shenshen digital printing equipment ltd china 450 45  sales  marketing
exin aebe greece 92   2 
anax aebe greece 92   2 
apex aebe greece 92   2 
technological park of thessaly greece 23   2 
high technology park acropolis sa greece 02   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
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punch graphix italia s rl
the shareholdings in punch graphix italia increased in 2006 from 51 to 100
this transaction led to a negative goodwill of €1 12000 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 €378000     
     
stielund ab     
the group acquired 100 of the shares of stielund ab on 1 november 2006 goodwill of €33000 arose   
     
l inomedia s aic      
the group acquired in february 2006 765 of the equity voting instruments of linomedia goodwill of €138000 arose  
after this transaction the group possesses of 915 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 nv was sold to stora enso nv on 15 may 2006 the investment was sold for €30000  
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 4995
stock     895 356 492 2596
debtors     1057 919 1973 10294
cash at bank and in hand     28 867 43 198
creditors     1691 1325 2068 16901
provisions     – 21 69 55
total     317 828 384 1127
 of equity     – 166 188 862
consideration paidcash     350 544 76 1000
goodwill     33 378  138
negative goodwill     – – 1 12 –
 of equity     1000 200 490 765
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 €181890000 had the acquisitions occurred on 1 january 2006 the group’s profit after tax would 
have been €15580000 punch graphix plc 
annual report and accounts 2006
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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 nv 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 9258  
in punch graphix plc
due to the offer of punch international nv and the terms of the ltip all awards vested the board of directors decided that 100 of the 
shares 586320 shares granted under ltip vests in respect of the vesting of the ltip an amount of €380000 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 128000 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 64000 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
•
•
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notes to accounts continued punch graphix plc 
annual report and accounts 2006
53
job	 8921pg06	arbackawindd	 proof	 09	 proof read by
operator	rich	 date	 12042007	
server	 studio	3	 setup	 rob	 first	readrevisons
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	 8921pg06	arbackawindd	 proof	 09	 proof read by
operator	rich	 date	 12042007	
server	 studio	3	 setup	 rob	 first	readrevisons
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 1000 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 reelect wim deblauwe as a director of the company 
4 to reelect philippe ghekhiere as a director of the company
5 to reappoint 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 1633 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 
81 the maximum aggregate number of ordinary shares hereby authorised to be purchased is 10290104 
82 the minimum price which may be paid for such shares is 10p per ordinary share exclusive of expenses
83  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
84  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
85  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
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job	 8921pg06	arbackawindd	 proof	 09	 proof read by
operator	rich	 date	 12042007	
server	 studio	3	 setup	 rob	 first	readrevisons
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	 8921pg06	arbackawindd	 proof	 09	 proof read by
operator	rich	 date	 12042007	
server	 studio	3	 setup	 rob	 first	readrevisons
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 infopunchgraphixcom
wwwpunchgraphixcom


Summary:
 punch graphix plc 
annual report and accounts 2006
06
job	 8921pg06	arfrontawindd	 proof	 10	 proof read by
operator	rich	 date	 12042007	
server	 studio	3	 setup	 rob	 first	readrevisons
chairman’s st at ement
the shareholders received a cash offer from punch 
international nv 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 9258 in punch graphix plc 
subsequently the independent nonexecutive 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 longterm 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 proactive 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 €17334m 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 computertoplate 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 vpcreative strategies direct mail express dme  
daytona beach fl and itasca il  usa  
lea di ng us o net oone d irect m arket er choos es x eikon 
xeikon 5000