TJ Group Plc Stock Exchange Release February 15, 2007, at 08:30 Finnish time TJ GROUP FINANCIAL REPORT 1 JANUARY-31 DECEMBER 2006 (IFRS) - Net sales EUR 4.32 million (EUR 9.88 million) - Operating result EUR -1.56 million (EUR -1.13 million) - Result before taxes EUR -1.74 million (EUR -1.27 million) - Equity ratio -40.5% (-8.4%), shareholders' equity/share EUR -0.02 (EUR -0.01) - Earnings per share EUR -0.014 (EUR -0.025) STRUCTURE OF THE GROUP During the review period, TJ Group consisted of the Finnish subsidiaries Documenta Oy and PlanMill Ltd (until 29 September 2006), in which it had 100% ownership, and the parent company TJ Group Plc. The company had business operations in Finland only, so there are no geographically segmented reports of the net sales, business results and personnel to be presented. During the review period, TJ Group Plc owned 50% of Morning Digital Design Oy (until 7 April 2006) and 23% of the German company GAP AG (until 31 March 2006) in addition to the subsidiaries. On 7 April 2006, the company announced that it had sold its 50% share of Morning Digital Design Oy to Edita Oyj. On 31 March 2006, the company announced that GAP AG and the German company GROUP Technologies AG will merge into GlobalWare AG and that, after the merger, TJ Group Plc will own about 9.4% of the shares of this company. GlobalWare AG has changed its name to GROUP Technologies AG on 6 June 2006. On 31 December 2006, TJ Group Plc owned 8.79% of the GROUP Technologies AG shares and these shares have been entered in the balance sheet as other financial assets under long-term assets. The GROUP Technologies AG shares have been valued at the stock exchange rate of the closing date, 31 December 2006. On 29 September 2006, the company announced that it had sold the business operations of its subsidiary PlanMill Ltd to its operating management and Sentica Partners. In its business operations, TJ Group Oyj will focus on developing its customers' business processes especially by means of document and workflow management systems and development of quality and customer relationship management, with the emphasis on the Finnish markets. The company will continue to use the operating model in which the operative functions have been centralized into the subsidiary/subsidiaries. NET SALES TJ Group's net sales for the review period were EUR 4.32 million (EUR 9.88 million). The net sales of the continuing operations on the review period were EUR 3.93 million and the comparable net sales of the continuing operations on 1 January-31 December 2005 were EUR 4.68 million. RESULT DEVELOPMENT TJ Group's operating result for the review period was EUR -1.56 million (EUR -1.13 million). The operating result of the continuing operations on the review period was EUR -1.88 million and the comparable operating result of the continuing operations on 1 January-31 December 2005 was EUR -5.53 million. The operating result of the review period includes as other profits of the business the following one-off profits: EUR 0.78 million for selling the Morning Digital Design Oy shares to Edita Oyj, EUR 0.57 million for selling the business operations of PlanMill Ltd to its operating management and Sentica Partners, a cancellation of a reservation of EUR 0.38 million for unprofitable leases and a related additional write-off of EUR 0.27 million from the reconstruction costs of the office premises included in the balance sheet. The lease for office space, signed in 2001, ended on 30 June 2006 and the reservation connected to it has been cancelled. TJ Group Plc and its subsidiaries Documenta Oy and Planmill Ltd have moved to new premises at Westendintie 1, 02160 Espoo. The business result of the review period includes a one-off reservation of EUR 0.33 million concerning a tax claim for the year 2000. The company has presented a counterclaim related to this on the basis of the right of recourse. Additionally, the operating result is burdened by the EUR 1.4 million depreciation of the value of the GROUP Technologies AG shares. The shares have been valued at the stock exchange rate of the closing date, 31 December 2006, and they have been entered in the balance sheet as other financial assets under long- term assets. The shares will be valued at the stock exchange rate of the review period's closing date also in the future interim reports and financial reports. The exchange rate on December 31, 2006 was EUR 0.47 and the latest exchange rate on February 14, 2007 was EUR 0.60. Company is owning 1 999 357 pcs GROUP Technologies shares. Additionally, the operating result of the review period is still encumbered by the expenses relating to the legal proceedings concerning the alleged security markets information offense. The result before taxes for the review period was EUR -1.74 million (EUR -1.27 million). The result before taxes of the continuing operations on the review period was EUR -2.07 million and the comparable result before taxes of the continuing operations on 1 January-31 December 2005 was EUR -5.67 million. The costs for employment benefits on the review period were EUR 2.52 million (EUR 6.06 million), which equals to 58% of the net sales (61%). The costs for employment benefits for the continuing operations on the review period were EUR 2.24 million and the comparable costs for employment benefits on the period of 1 January-31 December 2005 were EUR 2.84 million. Net sales per person for the continuing operations on the review period were EUR 94 thousand. At the end of the review period, the group's equity is negative. The loss on company's share capital has been registered in the trade register on 20 September 2006. THE NET SALES AND RESULT DEVELOPMENT OF THE SUBSIDIARY (IFRS) Documenta Oy Documenta Oy's net sales for the review period 1 January-31 December 2006 were EUR 3.90 million (EUR 4.86 million on 1 January-31 December 2005). The operating result was EUR 0.42 million (EUR 1.32 million on 1 January-31 December 2005), which is 11% of the net sales. During the review period, a large project started on 2003 for the Finnish Defence Forces was completed. However, the project will continue on 2007 as deliveries of additional parts and options. The customer base of Documenta started to grow on the review period. Additionally, Documenta worked in closer cooperation with Microsoft Oy and IBM Oy during the year. During the review period, Documenta has especially invested in developing a new generation product family. The results of the product development project will be published in stages during 2007. Documenta Oy is a company specializing in software products for digital workflow and document management, quality management, customer relationship management and intensification of operative processes. Documenta offers information technology based software, maintenance, operation service and integration solutions for companies and public administration. Documenta is also responsible for reselling the GROUP Technologies AG's iQ-Suite and CRM Suite (Gedys Software) product families in Finland directly and through its partners. The CEO of the company is Asko Ojanen. SIGNIFICANT EVENTS IN THE REVIEW PERIOD On 26 January 2006, the company announced that the Helsinki District Court had given, on 26 January 2006, the following decision on the trial concerning the share issue and sales of TJ Group Plc in the year 2000: - The charges for aggravated misuse of inside information have been rejected. - The then-CEO of TJ Group Plc Jyrki Salminen and the Chairman of the Board Tuomo Tilman have been sentenced to 40 day-fines for a security market information offense concerning the unnecessary delay of the profit warning given by TJ Group Plc on 26 April 2000. - The other charges concerning security market information offenses have been rejected. Additionally, the District Court rejected the claim for a fine imposed on a corporation, amounting to EUR 200,000, and the claim for ordering the alleged criminal benefit of EUR 39,369,600 to be paid to the state that the State Prosecutor had made against TJ Group Plc. In accordance with the District Court's decision, the state is obligated to pay the legal expenses of TJ Group Plc. On 1 February 2006, the company announced that on 1 February 2006 the State Prosecutor had stated discontent with the District Court's decision given on 26 January 2006 and had decided to appeal to the Court of Appeal. On 13 March 2006, the company announced that TJ Group Plc had delivered to the Helsinki Court of Appeal a counterappeal regarding its legal expenses. On 31 March 2006, the company announced that TJ Group's associated company GAP AG and the German company GROUP Technologies AG will merge into GlobalWare AG and that, after the merger, TJ Group Plc will own about 9.4% of the shares of this company. On 7 April 2006, the company announced that TJ Group Plc had signed an agreement on selling its shares of Morning Digital Design Oy to Edita Oyj. On 7 April 2006, the company announced that the Annual Shareholders' Meeting, held on 7 April 2006, authorized the Board of Directors to decide, within one year from the Annual Shareholders' Meeting, on the issuing of new shares or to take convertible loans in one or several portions. In the issuing of new shares or taking of convertible loans, a right can be given to subscribe for a total of not more than 250,000,000 new shares, the book value equivalent of which is EUR 0.02 per share. On the basis of the authorization, the share capital may be increased by a maximum of EUR 5,000,000. On 29 September 2006, the company announced that TJ Group Plc has sold the business operations of PlanMill Ltd to its operating management and Sentica Partners. THE CURRENT AUTHORIZATIONS OF THE BOARD OF DIRECTORS The Annual Shareholders' Meeting, held on 7 April 2006, authorized the Board of Directors to decide, within one year from the Annual Shareholders' Meeting, on the issuing of new shares or to take convertible loans in one or several portions. In the issuing of new shares or taking of convertible loans, a right can be given to subscribe for a total of not more than 250,000,000 new shares, the book value equivalent of which is EUR 0.02 per share. On the basis of the authorization, the share capital may be increased by a maximum of EUR 5,000,000. The authorization includes a right to deviate from the pre-emptive rights of the existing shareholders to subscribe for new shares or convertible loans as set out in Chapter 4, Section 2 of the Companies Act. If the Board of Directors, on the basis of this authorization, decides on the issuing of new shares or taking of convertible loans deviating from the pre-emptive rights of the existing shareholders, it is possible on the basis of the authorization to issue new shares deviating from the pre-emptive rights of the existing shareholders for a maximum amount of 20% of the registered share capital and of the total number of votes for the shares at the time when the Annual Shareholders' Meeting decides on the authorization and at the time when the Board of Directors decides to issue new shares or take convertible loans. However, when deciding on the issuing of new shares or taking of convertible loans on the basis of the pre-emptive rights of the existing shareholders, this 20% maximum limit does not in any way limit the number of shares to be subscribed. A deviation from the shareholders' pre-emptive subscription rights requires that there is an important financial reason for this, such as an arrangement connected with the development of the Company's business or capital structure. The Board of Directors decides who will have subscription rights. The authorization also includes the right to decide the basis of defining the subscription price for new shares and convertible loans and the terms of the issuing of new shares or taking of a convertible loan. Except with respect to a share capital increase on the basis of a convertible loan, the Board of Directors is authorized to decide that the shares may be subscribed against a contribution in kind, by means of set-off or otherwise on special terms. At the end of the review period, the Board of Directors does not have the authorization for share repurchase or transfer. FINANCING AND INVESTMENTS The value of TJ Group's cash and liquid current assets totalled EUR 3.08 million (EUR 2.27 million) at the end of the review period. The equity ratio of the group was -40.5% (-8.4%). TJ Group's sales receivables at the end of the review period were EUR 1.60 million (EUR 1.53 million). During the review period, the group's gross investments totalled EUR -1.6 million (EUR -2.7 million), which equals to -36% (-27%) of the net sales. The cash flow of the investments in the statement of source and application of funds was EUR 157 thousand. RESEARCH AND DEVELOPMENT COSTS The research expenses have been entered directly as costs. The product development expenses have been entered in accordance with the IAS 38 standard in such a way that the development expenses for entirely new products and new product versions including significant improvements have been activated, if their future accumulativeness can be reliably verified. Other product development expenses have been entered as costs in the profit and loss statement at the time they incurred. The product development costs activated in the balance sheet during the review period were EUR 157 thousand in total. PERSONNEL At the end of the review period, the group had 42 (52) employees. The group employed an average of 49 (97) persons during the review period. MANAGEMENT, BOARD OF DIRECTORS, AND AUDITORS OF THE COMPANY The management of the company consists of CEO Hannu Jokela and CFO Anneli Saarikoski. TJ Group Plc's Board of Directors includes four members and two deputy members: Chairman of the Board Tuomo Tilman, Hannu Jokela, Jörg Ott, Jyrki Salminen, and deputy members Markku Montonen and Anneli Saarikoski. The auditor selected by the Shareholders' Meeting is Ernst Young Oy Authorised Public Accounting Firm with Arto Tenhula as the principal accountant. SHARES, SHARE CAPITAL, AND SHAREHOLDERS TJ Group Plc's share capital on 31 December 2006 was EUR 2,569,853.92, and the total number of shares was 128,492,696. The equivalent book value of a share is EUR 0.02. Shareholders' equity/share was EUR -0.02. At the end of the review period, the equities of the group and the parent company were negative. At the end of the review period, the company had 15,920 shareholders. THE SHARE HOLDING AND WARRANTS OF THE BOARD OF DIRECTORS AND THE MANAGEMENT On 31 December 2006, the members and deputy members of the TJ Group's Board of Directors and the CEO owned a total of 63,236,641 TJ Group shares, that is, 49.2 percent of the company's share capital and votes, and 230,000 TJ Group warrants, that is, 0.2 percent of the company's share capital and votes. For more information on TJ Group's warrant programs, see the company's web site at www.tjgroup.fi and www.tjgroup.com. The company complies to and adapts the Guidelines for Insiders drawn up by the Helsinki Exchanges. DISTRIBUTION OF DIVIDEND The company's Board of Directors will propose to the Annual Shareholders' Meeting that no dividend be paid for the financial period and that the company's loss of EUR 2.04 million be booked against retained earnings. NEAR-TERM OUTLOOK TJ Group Plc's goal for 2007 is to increase the group's net sales and improve the result compared to 2006. This will be pursued by means of organic growth and possibly business arrangements. A prerequisite for any business arrangements is that the ongoing legal process will have a positive outcome for the company. As the legal process continues, it also harms the operative functions of the group's subsidiaries, especially sales to new customers. The interim report of TJ Group for 1 January-31 March 2007 will be published on 26 April 2006. Espoo, 15 February 2007 The Board of Directors of TJ Group Plc Tuomo Tilman, Chairman of the Board Hannu Jokela Jörg Ott Jyrki Salminen CONTACT: TJ Group Plc CEO Hannu Jokela Tel. 0207 91 6700 DISTRIBUTION: Helsinki Exchanges Main media www.tjgroup.com The figures in the financial report have not been audited. In addition to the accounts of the parent company, the financial report of TJ Group Plc consolidates the accounts of Documenta Oy and PlanMill Ltd (for 1 January-31 August 2006). The figures for Morning Digital Design Oy (ownership 50%) for 1 January-31 March 2006 have been consolidated in the financial report by using the equity method. Figures for the participating interest company GAP AG (ownership 23%) for the period of 1 January-31 March 2006 have not been consolidated, because due to the merger of GAP AG, Globalware AG and GROUP Technologies AG, there is not enough up- to-date information on GAP AG results, and because the consolidation is not necessary in order to give a correct and sufficient picture of the result of the group's operation and its financial position. On 31 March 2006, TJ Group Plc announced that due to the merger of GAP AG, Globalware AG and Group Technologies AG, the company's ownership was to decrease to 9.4%. After this, the company's shareholding in GROUP Technologies AG (name changed on 6 June 2006) was no longer considered partial ownership, but has been entered in other shares and holdings. At the end of the financial period, TJ Group Plc owns 8.79% of the shares of GROUP Technologies AG. The comparison figures for 2005 include the following companies in addition to the above mentioned companies: figures for TJ-KiPa Oy (former Key Partners Oy) and TJ Group GmbH. CONSOLIDATED PROFIT AND LOSS STATEMENT (EUR thousand) 1 Jan-31 Dec 1 Jan-31 Dec 2006 2005 12 months 12 months Net sales 4 323 9 882 Change in work in progress,inc(+),dec(-) 0 -5 Other operating income 306 677 Income from selling of business 1 351 3 971 operations Materials and services 631 705 Employee benefits expenses 2 519 6 060 Depreciations Depreciations according to plan 700 705 Rents 757 1 896 Marketing expenses 80 132 Other operating expenses 3 239 2 614 Write-off of shares in associated 0 3 163 companies Unprofitable agreements -382 382 Operating profit/loss -1 564 -1 132 Financial income and expeses Interest income and other financial 79 5 income Interest expenses and other financial -256 -256 expenses Share of profit/loss in associated 0 112 companies Profit/loss before income taxes -1 741 -1 271 Income taxes Write-off of imputed tax receivable -1 -1 890 Profit/loss for the period -1 742 -3 161 To eguity holders of the parent -1 742 -3 161 Earnings per share calculated on profit/loss attributable to equity holders of the parent: Earnings per share continued operations -0,016 -0,059 (undiluted), EUR Earnings per share continued operations -0,016 -0,059 (diluted), EUR Earnings per share discontinued 0,003 0,034 operations (undiluted), EUR Earnings per share discontinued 0,003 0,034 operations (diluted), EUR CONSOLIDATED PROFIT AND LOSS STATEMENT CONTINUED OPERATIONS Continu Continu ed ed and and dis- dis- continu continu ed ed (EUR thousand) operati Continu Continu operati ons ed ed ons in operati operati in total ons ons total 1 Jan- 1 Jan- 1 Jan- 1 Jan- 31 Dec 31 Dec 31 Dec 31 Dec 2006 2006 2005 2005 12 12 12 12 months months months months Net sales 4 323 3 932 4 676 9 882 Change in work in 0 0 -5 -5 progress,inc(+),dec(-) Other operating income 306 306 677 677 Income from selling of business 1 351 1 158 0 3 971 operations Materials and services 631 611 193 705 Employee benefits expenses 2 519 2 241 2 842 6 060 Depreciations Depreciations according to 700 627 472 705 plan Rents 757 729 1 572 1 896 Marketing expenses 80 76 63 132 Other operating expenses 3 239 3 376 5 733 2 614 Write-off of shares in 0 0 0 3 163 associated companies Unprofitable agreements -382 -382 0 382 Operating profit/loss -1 564 -1 882 -5 527 -1 132 Financial income and expeses Interest income and other 79 69 3 5 financial income Interest expenses and other -256 -255 -253 -256 financial expenses Share of profit/loss in 0 0 112 112 associated companies Profit/loss before income taxes -1 741 -2 068 -5 665 -1 271 Income taxes Write-off of imputed tax -1 -1 -1 889 -1 890 receivable Profit/loss for the period -1 742 -2 069 -7 554 -3 161 To eguity holders of the parent -1 742 -2 069 -7 554 -3 161 Earnings per share calculated on profit/loss attributable to equity holders of the parent: Earnings per share (undiluted), -0,014 -0,016 -0,059 -0,025 EUR Earnings per share (diluted), -0,014 -0,016 -0,059 -0,025 EUR CONSOLIDATED PROFIT AND LOSS STATEMENT BY QUARTER (EUR thousand) Total 1 Jan- 1 Apr- 1 Jul- 1 Oct- 1 Jan- 31 Mar 30 Jun 30 Sep 31 Dec 31 Dec 2006 2006 2006 2006 2006 3 months 3 months 3 months 3 months 12 months Net sales 1 124 995 786 1 418 4 323 Other operating income 164 142 0 0 306 Income from selling of 0 776 575 0 1 351 business operations Materials and services 87 83 109 352 631 Employee benefits expenses 676 783 459 601 2 519 Depreciations Depreciations according to 102 344 213 41 700 plan Rents 300 309 76 72 757 Marketing expenses 44 24 10 2 80 Other operating expenses 392 573 304 1 970 3 239 Unprofitable agreements 0 -382 0 0 -382 Operating profit/loss -313 179 190 -1 620 -1 564 Financial income and expeses Interest income and other 1 0 26 52 79 financial income Interest expenses and other -70 -61 -60 -65 -256 financial expenses Share of profit/loss in 20 0 0 -20 0 associated companies Profit/loss before income -362 118 156 -1 653 -1 741 taxes Income taxes 0 0 0 -1 -1 Profit/loss for the period -362 118 156 -1 654 -1 742 CONSOLIDATED BALANCE SHEET (EUR thousand) ASSETS 31 Dec 2006 31 Dec 2005 NON-CURRENT ASSETS Intangible assets Intangible rights 316 602 Goodwill 0 73 Tangible assets 171 130 Shares in associated companies 0 2 899 Other financial assets 972 11 Non-current assets total 1 459 3 715 CURRENT ASSETS Trade receivables 1 595 1 527 Other current assets 125 1 775 Cash and cash equivalents 3 084 2 271 Current assets total 4 804 5 573 TOTAL ASSETS 6 263 9 288 SHAREHOLDERS' EQUITY AND LIABILITIES 31 Dec 2006 31 Dec 2005 Equity attributable to equity holders of the parent Share capital 2 570 2 570 Premium reserve 65 142 65 142 Retained earnings -68 491 -65 330 Profit/loss for the period -1 742 -3 161 TOTAL SHAREHOLDERS' EQUITY -2 521 -779 Long-term liabilities Convertible loans 4 500 4 500 Interest-bearing liabilities 2 033 2 155 Long-term liabilities total 6 533 6 655 Current liabilities Interest-bearing liabilities 128 94 Trade payables 787 866 Other current liabilities 351 351 Accrued liabilities 985 2 101 Current liabilities total 2 251 3 412 TOTAL SHAREHOLDERS' EQUITY AND 6 263 9 288 LIABILITIES CONSOLIDATED CASH FLOW STATEMENT (EUR thousand) 1 Jan- 1 Jan- 31 Dec 2006 31 Dec 2005 Cash flow from operating activities Operating profit/loss -1 564 -1 132 Amendments: Booking of shares at current price, no payment transaction 1 399 3 163 Depreciations 700 705 Change in working capital: Change in trade and other 1 582 1 545 receivables Change in trade and other -1 195 -1 288 payables Change of work in progress 0 5 Interests received 79 5 Interests paid -256 -256 Other financial items 0 112 Income taxes, paid -1 -1 890 Cash flow from operating 744 969 activities total Cash flow/investments Investments in intangible and 157 -499 tangible assets Cash flow/investments total 157 -499 Cash flow/financing Repayment of loans -122 -94 Increase of loans 34 -210 Cash flow/financing total -88 -304 Change in liquid funds 813 166 according to the cash flow statement Change in liquid funds 813 166 Liquid funds opening balance 2 271 2 105 Liquid funds closing balance 3 084 2 271 KEY FIGURES 1 Jan- 1 Jan- 31 Dec 31 Dec 2006 2005 Net sales, EUR million 4,32 9,88 Operating profit/loss, EUR million -1,56 -1,13 % of net sales -36,2% -11,5% Cash flow from operations, EUR 0,74 -2,19 million Return on equity, % 1) 105,6 % -394,4 % Return on investment, % -29,4 % -13,2 % Interest bearing net debt, EUR 3,6 4,5 million Net debt to equity (Net Gearing), % -141,9 % -574,8 % Equity ratio, % -40,5 % -8,4 % Gross investments -1,6 -2,7 % of net sales -36 % -27 % Personnel at the end of the period 42 52 Personnel average 49 97 Employee benefits expenses/person, 51 62 EUR thousand KEY FIGURES PER SHARE Earnings/share, euro -0,014 -0,025 Shareholders' equity per share, euro -0,02 -0,01 1) Both indicator and devider are negative STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY Retained (EUR thousand) Share Share earnings Total capital premium SHAREHOLDERS' EQUITY 1 Jan 2 570 65 142 -65 330 2 382 2005 Profit/loss for the period -3 161 -3 161 SHAREHOLDERS' EQUITY 31 Dec 2 570 65 142 -68 491 -779 2005 Retained (EUR thousand) Share Share earnings Total capital premium SHAREHOLDERS' EQUITY 1 Jan 2 570 65 142 -68 491 -779 2006 Profit/loss for the period -1 742 -1 742 SHAREHOLDERS' EQUITY 31 Dec 2 570 65 142 -70 233 -2 521 2006