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ZOO Digital Group plc 
The Tower 
2 Furnival Square 
Sheffield 
S1 4QL 
United Kingdom 
T: 0114 241 3700 
F: 0114 241 3701
ZOO Digital Group plc 
2201 Park Place 
Suite 100 
El Segundo 
90245 
USA 
T: +1 310 220 3939 
F: +1 310 220 3958
www.zoodigital.com
One Stop to Global
ZOO Digital Group plc
Annual Report and Accounts 2011
Stock Code: ZOO
Smarter Workflows 
for Global Media
Zoo 
Digital
Home  
Entertainment
Music
Videogames
Publishing
ZOO Digital Group plc Annual Report and Accounts 2011
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Our Business
Welcome 
to ZOO Digital Group plc
Creating media for global distribution is a labour-intensive, time-
consuming process for most companies. ZOO’s software enables 
businesses to create and deliver media to the global marketplace  
more rapidly and efficiently than ever before.
ZOO is a provider of software for managing collaborative workflows that involve regionalising and authoring 
creative content to companies across multiple sectors. We work with film studios, videogame companies, music 
publishers, toy companies and book publishers to simplify the production of creative media. Our customers enjoy 
reduced time to market, higher quality and lower costs. We do this by designing innovative, patent-protected 
software and providing flexible solutions that combine licensing with value-added services to meet the diverse 
needs of customers of all sizes across multiple industries. Our software is used to create localised iTunes, DVD, 
Blu-ray, eBooks, product packaging and marketing campaigns for some of the best known brands in the world.
Why ZOO?
	 We create open, collaborative 
relationships with our customers 
which build trust and generate 
repeat business
	 Our proposition is clearly 
differentiated in the market, based 
on our innovative software
	 We focus on addressing the urgency 
of our customers to improve the 
efficiency of their operations 
	 Our technology has high barriers to 
entry, being built on patent-protected 
software created over many years
	 Our business model is highly scalable, 
enabling us to grow without 
significantly adding to the cost base
	 Our strategy of partnering in new 
markets brings significant potential 
with only modest levels of investment
Head Office
ZOO Digital Group plc
The Tower
2 Furnival Square
Sheffield
S1 4QL
United Kingdom
T: +44 (0)114 241 3700
F: +44 (0)114 241 3701
ZOO Employee Share Trust 
Limited
The Tower
2 Furnival Square
Sheffield
S1 4QL
United Kingdom
T: +44 (0)114 241 3700
F: +44 (0)114 241 3701
Software Solutions
ZOO Digital Limited
The Tower
2 Furnival Square
Sheffield
S1 4QL
United Kingdom
T: +44 (0)114 241 3700
F: +44 (0)114 241 3701
ZOO Digital Inc
2201 Park Place
Suite 100
El Segundo
CA 90245
USA
T: +1 310 220 3939
F: +1 310 220 3958
Media Production
Scope Seven LLC
2201 Park Place
Suite 100
El Segundo
CA 90245
USA
T: +1 310 220 3939
F: +1 310 220 3958
Group Directory
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ZOO Digital Group plc 
Annual Report and Accounts 2011
www.zoodigital.com
Our Business
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Operational Highlights
	 Major Hollywood studio adopted automated toolset 
for Apple’s iTunes
®
 Extras
	 Secured Warner Home Video International for new 
automated style guide production system
	 eBook and music industries identified as further areas 
for growth
Financial Highlights
	 Revenues of $14m (2010: $15m) reflect change in 
sales mix to higher margin services
	 Adjusted EBITDA of $2.3m (2010: $1.6m)*
	 Adjusted operating profit of $1.3m  
(2010: $0.8m)*
	 Year-end cash balance $0.6m (2010: $1.2m)
*  Adjusted EBITDA and operating profit/(loss) before exchange gains on intercompany 
transactions and exceptional impairment.
Post-period end highlights
	 First significant contract through MPS relationship with 
leading videogame publisher
	 Global Digital Media Xchange licenses automated Blu-Ray 
and Electronic Sell Through (“EST”) production solutions
	 Successfully completed a share placing of $2.8m to 
provide working capital to fund growth, particularly in 
the area of eBooks 
	 $5.6m convertible loan note instrument resolved with 
50 per cent converting into equity and 50 per cent 
rolling into a loan note extension for two years
Operating profit*
$m
(3.7)
(0.7)
0.8
1.3
2008
09
2009
09 09
2010 2011
Revenue
$m
11.3
15.1
n Core business
n Subtitling
13.8
2008
09
2009
09 09
2010 2011
Our Business
01  Highlights
02  Group at a Glance
04 Our Products
Our Performance
06  Chairman’s Statement
08  Chief Executive’s Statement
10  Financial Review
Our Governance
12  Board of Directors
13  Senior Management
14  Directors’ Report
17  Corporate Governance Report
19  Directors’ Remuneration Report
22  Independent Auditor’s Report
Our Financials
23  Consolidated Statement of  
 Comprehensive Income
24  Consolidated Statement of 
 Financial Position
25  Company Statement of Financial 
 Position
26  Consolidated Statement of 
 Changes in Equity
27  Company Statement of  
 Changes in Equity
28  Consolidated Statement of Cash Flows
29  Company Statement of Cash Flows
30  Notes to the Financial Statements
IBC Group Directory
Contents
New website now online:
www.zoodigital.com
6.6
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Our Business
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Group at a Glance
By centralising editorial and approval processes via secure 
web-based platforms, ZOO’s proprietary patented software 
helps customers to increase their speed of production, 
reduce costs and protect their brand integrity. ZOO’s services 
enable quicker and more cost effective processes across a 
wide range of applications and formats, including packaging, 
printed materials, DVD, Blu-ray Disc, video on demand, 
electronic sell-through (EST), broadcast, music and electronic 
books. 
The Group’s largest customers include major Hollywood 
studios, for which the production, marketing and distribution 
of titles in numerous formats across many geographies and 
languages has previously been a lengthy, costly and largely 
manual process. Increasingly the Group’s software is benefiting 
a variety of companies across sectors where the development 
of media products, printing, packaging and marketing involves 
complex processes in multiple countries and languages, 
particularly where brand integrity is of core importance.
The Industries We Serve
Following an initial period of exclusively targeting the entertainment industry with solutions for video content, our product 
set has since been expanded to address a much wider scope of creative media types and requirements. We are now building 
our customer base in a number of diverse industries as described on the following page. In each case, depending on the 
needs of the customer, we either license our technology or provide an outsourced service to customers with our operators 
utilising our software. Either way the customer will reap the benefits of our wealth of experience and dramatically reduce 
their production costs, meaning that those previously uneconomic products become viable and can now be introduced into 
product streams.
One Stop to Global
ZOO offers comprehensive solutions for global 
companies like film and television studios, music 
producers, book and games publishers and 
corporate clients who produce creative media 
for global distribution.
ZOO Digital Group plc provides software and related services that 
support the authoring, re-purposing and distribution of creative media. 
ZOO’s products form an integrated suite of web-based and desktop 
applications for audio/visual content and printed materials, adapting 
these media for different languages, formats and delivery mechanisms.
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Home Entertainment
The home entertainment industry is going through a period of significant change. Consumers have come to expect to have choice in the way in which 
they watch movies and other video materials — in the living room, on the personal computer and on the move. The DVD format is in decline as consumers 
scale back the building of their personal collections, while the latest packaged media format — Blu-ray Disc — and a range of Electronic Sell Through (EST) 
platforms such as iTunes are taking off. This industry transition causes all studios to examine costs very carefully and find ways of doing more for less.
We help our customers cut outsourcing costs. We offer something different from the traditional service provided by other vendors; our tools 
automate the costly repetitive tasks involved in production. These tools remove the need for expensive and error-prone manual production resulting in 
fully compliant output that requires significantly less quality control.
We help our customers to decrease their time to market. We have been at the sharp end of the entertainment industry’s demand for ‘day-and-
date’ releases for the past few years and have developed tools and services to help our customers co-ordinate their workflows, speed up localization and 
drastically cut the time taken to create products — whether they are EST, DVD or Blu-ray – as well as the associated promotional material.
Our products manage complexity for our customers. Creation of home entertainment products is complex work — there are many parties whose 
work must be co-ordinated; everyone is under time pressure; there is a high reliance on human labour; it is easy to make mistakes; every aspect of these 
products must be checked and verified; the cost of ensuring that products meet the stringent quality expectations of modern consumers is high. Our 
technology manages complex workflows to bring structure and enforce adherence to standards – we can achieve high quality results very cost effectively.
Video games
When video games are distributed around the world, having a fast, efficient method for producing and managing localized versions of manuals, packaging 
and marketing material is a must. In this industry product packaging often requires text in multiple languages to be integrated into a single layout. This is a 
challenging design requirement with a correspondingly onerous approvals process.
Our software manages complex approvals workflows. For any single territory, multiple approvers are typically required to ensure that all aspects of the 
artwork fulfil the needs of the business. These include legal, corporate branding, product marketing, regulatory and other requirements. The integration 
of multiple languages brings an added level of complexity to the process. Our collaboration software enables these complex workflows to be managed 
efficiently, reducing time-to-market.
Our software creates print-ready artwork. The output from our systems is data files that can be delivered directly to a printer and streamlining the pre-
media process. 
Publishing
There is a seismic shift taking place in the publishing industry as businesses seek to exploit the rapidly expanding eBook market. While the conversion of a 
novel for electronic sale is a relatively straightforward process, the production of rich media genres, such as picture books, comics, graphic novels, recipe 
books, travel guides and encyclopaedias is a different matter altogether.
We automate the preparation of media-rich eBooks. Working with us, traditional publishers are able to adapt existing titles for sale electronically at a 
lower cost and more quickly than by partnering with traditional service vendors. 
We can streamline the translation of books into other languages. Although the eBook market is currently established in the US and UK, it is expected 
that other countries will follow suit and when they do we are well placed to assist in the management of workflows for localisation.
We support all popular eReader platforms. We take a platform agnostic position – by working with us book publishers are assured that their titles can be 
produced through our automated process for all required eReader devices, including the iPad, Kindle, Nook and Sony Reader.
Music
iTunes LP offers a unique and interactive experience with Apple’s iTunes platform. A consumer who purchases an album with iTunes LP 
receives the songs from the album, plus special features such as lyrics, photos, videos, credits, and more.
The added value provided by these bonus materials should make titles more attractive for purchase, and provide an incentive for 
publishers to package their products using the iTunes LP format. But this is a complex and costly process.
Our software can create iTunes LP packages quickly and easily. We are able to repurpose designs and files created previously for 
other platforms to enable efficient production of titles.
We enable music publishers to create products in-house. We have developed software so that these complex titles can be created without requiring 
technical specialists. The result is an easy to use product that can be used to create engaging, content-rich LPs using the publisher’s internal staff and 
reducing costs. 
Our software manages localisation. Adapting digital music products so that they may be published in other languages is a painless process using our 
software, enabling international product versions to be created quickly and easily.
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Our Business
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Our Products
Smarter Workflows
for Global Media
Creative media plays an ever increasing role in the operations 
of all global organisations. For some, creative media is the 
lifeblood of the business — the product itself, particularly 
for producers and publishers of film and video, video games, 
music and books. For others it is a means to an end to entice 
customers to buy consumer and professional products — 
used in the design of packaging and marketing materials.
As businesses strive to reach global audiences, creative media must be produced in the local languages of 
customers all around the world, often as part of simultaneous product releases in many territories. Across  
many industries there is a drive to create more products, more quickly, in more languages and at lower  
cost. This often requires a Herculean effort by many collaborating groups — suppliers, distributors, licensees, 
territory offices, legal departments, translators — involving complex workflows with plenty of opportunity  
for human error. 
ZOO provides a Media Collaboration Platform to support creative media preparation and publication  
enabling diverse groups of individuals to work together efficiently via the internet. 
Each ZOO tool brings customer value in its own right yet all work together to offer a smart end-to-end 
workflow for global media. The tools on the following page are components of ZOO’s Media Collaboration 
Platform.
Use your phone's bar code app and go directly to the relevant page on our website
http://www.zoodigital.com/annualreport2011
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Interactive Content Editor
ZOO’s Interactive Content Editor (ICE) 
allows movie and music studios to produce 
cost-effective value-added content for 
consumers interested in enhanced features 
and additional content with their digital 
media downloads. iTunes
®
 Extras and iTunes 
LPs deliver a richer product to film and 
music fans and quantifiable benefits to the 
publishers.
ICE is designed to allow movie and music 
producers to create enhanced iTunes movies 
and albums in the form of iTunes Extras and 
iTunes LP that often use assets designed 
for other media. This could include DVD/
BD packaging, album cover art or CD-audio 
packaging. Content such as still images, 
music videos, director’s commentary, 
deleted scenes, album credits and lyrics are 
repurposed and used to create an engaging, 
content-rich product.
ICE eliminates time-consuming hand 
programming while also automating the 
production of all the images by generating 
constituent elements for buttons, 
backgrounds, etc. ICE can efficiently produce 
the same features and effects found in 
almost all of today’s iTunes Extras and iTunes 
LP titles in a matter of minutes. Automated 
creation of language versions are also a 
feature.
Templated Authoring System
For movie/TV content providers, TAS is the 
only professional DVD authoring solution 
that offers a flexible templated workflow. 
This de-skills the creation of a DVD title, 
so creating titles is quicker and cheaper. 
Because TAS is systematic about the way 
in which titles are prepared, it ensures 
all technical requirements are rigorously 
adhered to. This means titles are produced 
right-first-time, reducing the labour needed 
for QC.
TAS enables cost effective in-sourcing of 
functions that previously required specialists. 
Because TAS simplifies the process of 
authoring a DVD and removes much of the 
repetition. In depth knowledge of the DVD 
specification is not required to create a disc 
and fewer errors occur during authoring. 
This reduces the cost of authoring and 
testing of a DVD title and operators within 
studios can undertake DVD authoring  
in-house without needing to outsource  
to a specialist.
Media Adaptation Tool
For anyone with an international market, MAT 
is the only automated tool which creates single 
and multi-lingual variants of printed and digital 
materials in multiple languages and sizes. MAT’ s 
flexible automation brings significant timesaving 
benefits, reduces the number of errors and 
encourages consistency in output designed for 
multiple territories.
MAT also links to other ZOO tools in the 
production workflow. This means that 
translations are requested, received and applied 
automatically (in conjunction with the TMS). It 
also means all digital media menus (such as for 
DVD/Blu-ray/iTunes LPs) are already formatted for 
ZOO authoring systems (TAS/BDX/ICE).
MAT automates the tedious and error-prone parts 
of the production process for printed materials 
so that designs can be created more quickly and 
with fewer errors. It scans domestic documents, 
copies text to the ZOO Translation Management 
System ready for translation. Then MAT finds and 
uses supplied translations to create regionalized 
variants of the same document so operators no 
longer have to repeatedly copy and paste. T ext 
expansion after translation is already accounted 
for and the MAT operator has direct control over 
automatic text resizing and adjustments to put in 
finishing touches on the localized versions to get 
them just right.
Not only does MAT regionalize and resize 
printed materials, but digital products too. 
Entertainment products such as Blu-ray menus 
can be easily created and regionalized using 
the same process, and because everything 
is automated, the vast numbers of files 
produced are all consistently and logically 
named, filed and ready for authoring.
Translation Management System
The TMS helps our clients manage global 
projects with complex media workflows 
and thousands of translations. This system 
incorporates a number of modules designed 
to support international media production 
workflows, including a graphical display of 
a project’s progress, a dictionary of standard 
translations, as well as the capability to 
‘learn phrases’ as they are used in specific 
contexts. This eradicates the need for 
duplication, providing ZOO’s clients with 
significant cost savings, alongside improved 
brand consistency and control.
Blu-ray Authoring System
BDX is the only Blu-ray authoring system 
that combines flexible template-driven 
authoring with a visual menu editor. This 
means that Blu-ray discs can be made more 
quickly, with reduced need for QC, and 
without the need for programming skills. 
This can dramatically reduce costs.
Everyone in the home entertainment 
industry knows that Blu-ray production is 
complex, expensive to author and test, and 
the work involved is error-prone, repetitive 
and requires highly skilled staff. It is also 
difficult to scale up when work increases.
ZOO eBook Builder
ZEB is an eBook editing tool which combines 
full support for fixed-layout epub files 
with the ability to quickly regionalise a title 
for many different territories. This means 
that graphically rich books can be easily 
converted into eBooks and made ready for 
multiple territories with reduced need for 
QC and without the need to manually create 
the epub files.  
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Our Performance
The Board is pleased to report another year 
of progress in which ZOO has performed in 
line with market expectations. The group 
increased its operating profit
1
 to $1.3m 
(compared with $821k in 2010), and EBITDA 
rose to $2.3m (from $1.6m in 2010), despite 
a decline in revenue to $14m (from $15m 
in 2010). The decline in revenue arose from 
two primary causes: a short-term slowdown 
in projects from our largest customer during 
a major organisation change there, and 
a reduction in the amount of low margin 
subtitling work which has traditionally 
been subcontracted to a third party vendor. 
Cash generation was also affected by this 
temporary slowdown in orders, and our year 
end cash balance was $0.6m.
During the year ZOO has made significant 
progress in reducing its dependence on the 
filmed entertainment industry. Although 
extending and deepening our customer 
relationships in this large industry remains 
vital to our business, the alliance with MPS, 
announced last year, has now yielded its 
first significant customer contracts outside 
the sector. In addition, our software and 
service platforms have shown themselves 
to be ideally suited to the management 
and electronic delivery of a wide range of 
creative media content, such as music, video 
game materials and, most significantly, 
eBooks. The Chief Executive’s operational 
review provides more details of these 
exciting developments for the group. 
Shareholders will be aware that in 
September 2006 the Company issued a 
five-year convertible loan note of $5.6m 
(£3.54m) to be either redeemed or 
converted into shares prior to October 2011.  
I am pleased to report that we have reached 
agreement with the loan note holders for 
50 per cent of this loan to be converted into 
shares and for the balance of 50 per cent 
to remain in the loan note instrument with 
the maturity date extending to 31 October 
2013 and the coupon changing to 7.5 per 
cent. I am also pleased to report a successful 
placing which will raise $2.8m to be used 
as working capital for the group to support 
expansion of the business in new markets, 
particularly eBooks.
 
Chairman’s Statement
“ZOO’s products and services are highly relevant to companies in all 
industries where there is a need to maintain the quality and brand 
integrity of creative digital content.”
	 Roger D Jeynes 
Chairman
"The progress we 
have made this 
year in winning 
new customers for 
our software tools 
outside the filmed 
entertainment sector, 
and in extending our 
relationships with 
existing customers, 
stems directly from 
the quality and 
commitment of our 
staff in the US and 
the UK."
1
  Operating profit and EBITDA are stated before exceptional impairment.
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Our Performance
Our Financials Our Governance Our Performance Our Business
Ian Stewart, Non-Executive director of the 
company, announced his decision to step 
down from the board of directors with effect 
from 31 December 2010 to concentrate 
on his other business interests. The board 
would like to thank Ian, who had been with 
ZOO since inception, for his dedication and 
commitment to the group, and he takes 
with him our very best wishes for the future.
ZOO’s products and services are highly 
relevant to companies in all industries where 
there is a need to maintain the quality and 
brand integrity of creative digital content. 
ZOO’s customers are therefore typically 
large, multi-national organisations whose 
brands are recognised internationally and 
whose names signify a level of quality that 
the companies need to protect. The progress 
we have made this year in winning new 
customers for our software tools outside the 
filmed entertainment sector, and in 
extending our relationships with existing 
customers, stems directly from the quality 
and commitment of our  staff in the US and 
the UK; the board is therefore confident in 
the future success of the group.
Roger D Jeynes
Chairman
Some of our clients
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Our Performance
Operational review
I am pleased with the performance of 
the group in what has been a difficult 
environment for the filmed entertainment 
industry. 
Filmed entertainment
The home entertainment market in 
particular has been through a turbulent 
period over the last 12 months, with 
upheaval and cost cutting measures taking 
place at many of the major Hollywood 
studios which, in turn, led to some order 
distortion for ZOO, specifically from our 
major customer. However, we were very 
pleased to note that the shortfall in orders 
has substantially recovered. Furthermore, we 
believe that the pressure that the studios are 
under to maximise sales and eliminate costs 
provides an ever greater advantage for the 
group. One of the most important ways for 
a studio to maximise sales of a new release, 
especially blockbuster titles, is to distribute 
the product into as many territories as 
possible simultaneously. By doing so, the loss 
of revenue through counterfeit products and 
illegal copying are dramatically reduced and 
the integrity and quality of the production 
is maintained. This very need to accelerate 
distribution globally in the shortest time 
frame possible makes our toolsets even 
more compelling. 
We are continually looking to broaden our 
client base whilst also striving to deepen 
the relationships with existing customers 
and increase the scope of work that we are 
doing for them. We were, therefore, pleased 
to be able to announce that Global Digital 
Media Xchange, a wholly-owned subsidiary 
of Warner Bros. Entertainment, has licensed 
our automation production solutions for  
Blu-Ray and Electronic Sell Through 
platforms. 
Electronic Sell Through (“EST”) 
Market
The electronic delivery of digital products 
represents possibly the most significant shift 
in consumers’ media purchasing in recent 
times and we believe that this creates an 
excellent opportunity for ZOO. In September 
we announced that we had launched a new 
toolset that allowed existing content for the 
filmed entertainment industry to be made 
available through Apple’s iTunes
®
 Extras 
platform. Our tools enable content owners 
to adapt additional features such as movie 
and chapter selection along with special 
features such as movie stills, deleted scenes, 
exclusive interviews, and behind-the-scenes 
footage. These additional features have long 
been associated with DVD and more recently 
with Blu-ray Disc productions but the costs 
associated with traditional production 
methods have proved prohibitive for sales on 
iTunes and other Electronic Sell Through 
platforms. ZOO’s toolset enables this 
production at significantly lower costs and 
the initial response from clients has been 
extremely positive.
A similar opportunity exists within the music 
industry. Traditional album formats often 
include extra features such as the ability to 
view lyrics, liner notes, band photos and 
performance videos. ZOO has created an 
Interactive Content Editor to enable the 
efficient preparation of iTunes LPs, enabling 
publishers to sell such content through 
Apple’s iTunes LP platform and incorporate 
many of the extra features associated with 
traditional formats. Initial customers include 
a number of music publishers in the US, UK 
and France. According to Strategy Analytics, 
digital music revenues in 2012 will reach 
US$2.8bn and surpass physical sales for the 
first time.
Chief Executive’s Statement
“We are continually looking to broaden our client base whilst also 
striving to deepen the relationships with existing customers and 
increase the scope of work that we are doing for them.”
Summary
	 Global Digital Media 
Xchange has licensed 
automation production 
solutions for Blu-ray and 
Electronic Sell Through 
platforms
	 Launched new toolset for 
Apple’s iTunes
®
 Extras
	 Our Media collaboration 
solutions now include the 
eBook builder
	 Raised $2.8m of additional 
working capital to accelerate 
development in the eBook 
market
	 Dr Stuart A Green 
Chief Executive
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Our Performance
Our Financials Our Governance Our Performance Our Business
An even greater opportunity in the field 
of EST, and one of the most exciting 
developments in the past year, has 
presented itself with the electronic book, or 
eBook, market. The success of the overall 
eBook market has been spectacular and well 
publicised. According to a recent report from 
Futuresource Consulting, in 2010 the eBook 
market grew by more than 200% to a value 
of more than US$900m. 
As a result of ZOO’s success with the iTunes 
platform we have augmented our Media 
Collaboration solutions to include an 
eBook Builder which provides an efficient 
and cost-effective way for publishers to 
repurpose traditional books for sale online. 
This new tool works in conjunction with 
ZOO’s software for managing collaborative 
workflows, adapting materials into multiple 
languages, and providing storage and 
distribution of content for multiple eBook 
vendors. Another great advantage in using 
ZOO’s toolset for eBook production is that 
it maintains the formatting qualities and 
standards of a physical production thereby 
enhancing the enjoyment of reading it 
electronically. For example, where pictures 
or illustrations are used to accompany text 
to illustrate a point in a physical book, 
current practices for converting this into an 
electronic version have proved complicated 
and many of the resulting eBooks created by 
third parties have been produced with layout 
errors. Whilst this may not be of particular 
relevance to pure text books, it makes a 
huge difference where such features are 
integral to the genre of the book, which 
makes our tools particularly applicable to 
picture books, comics, travel guides, cookery 
books and reference publications.
MPS
At this stage last year we announced that 
we had agreed a strategic relationship with 
John Henry Holdings Inc., a subsidiary of 
Multi Packaging Solutions, Inc. (“MPS”), a 
US headquartered value-added print-based 
packaging solutions company. I am pleased 
to report that we have made significant 
progress through this in the past 12 months 
and the potential new business opportunities 
available to us are extremely exciting.
Indeed, in June this year we were able to 
announce the first significant contract win 
through this relationship with a leading 
international videogame publisher. We have 
already begun work with the publisher in 
the regionalisation of the interactive game 
group’s packaging materials for multiple 
territories and languages. 
We believe that this will be just the first in 
many relationships to come through MPS 
and are currently in discussions with a 
number of impressive organisations to help 
them with the production of packaging, 
marketing and other printed materials in 
a wide range of geographies, and I look 
forward to providing further updates in the 
coming year.
Placing of shares
We have raised approximately $2.8m of 
capital through a placing of shares to 
provide working capital that we intend 
to use to support the acceleration of the 
business in new markets. I have personally 
subscribed $160,000 to the placing, 
demonstrating my confidence in the future.  
We plan to use these funds for the following 
purposes: 
n Put in place the infrastructure needed to 
establish ZOO as an eBook aggregator
n Support the recruitment of additional 
R&D staff to accelerate eBook and EST 
software development
n Enlargement of the production team to 
provide a range of eBook services
n Recruit new sales and marketing staff to 
support eBook business development
Convertible loan note
We have reached agreement with the holders 
of the $5.6m convertible loan note, which 
was issued in 2006 and was due to mature 
in October 2011. The loan note holders 
have agreed to convert 50 per cent of the 
outstanding amount into equity at 40p with 
the balance remaining in the convertible loan 
note instrument which has been extended for 
a further period of two years with a coupon 
of 7.5 per cent and a conversion price of 48p.
Staff
It continues to be an honour to work with 
such a talented team of professionals in 
both our UK-based R&D centre and our 
US-based production services facility. In all 
areas of the business our success hinges on 
the talents, creativity and dedication of our 
staff who continue to excel in delivering 
innovative technology and first class 
customer services. We strive to provide a 
great place to work to attract and retain our 
key talent. On behalf of the board I would 
like to extend my thanks to all staff for their 
contributions over the past year and I look 
forward to working together in the year 
ahead.
Outlook
Our team has built an excellent product 
platform, reputation and customer 
relationships that I believe place us in 
a strong position to grow the business 
significantly. We have many exciting 
opportunities ahead of us and I look forward 
to the future with confidence. 
Dr Stuart A Green
Chief Executive Officer
“Our team has built an excellent product platform, reputation and 
customer relationships that I believe place us in a strong position to 
grow the business significantly.”
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Our Performance
The year ended 31 March 2011 was an 
exciting one with the business expanding 
into new areas. 
Results for the year
We are pleased to report a significant 
increase in operating profit in the year 
despite a reduction in turnover. The 
operating profit reported for the year is 
$1.3m compared to the previous year’s 
$0.8m, which was prior to an exceptional 
impairment charge.
The revenue for the period reduced to 
$13.8m (2010: $15.1m) due to the short 
term impact of reorganisations that took 
place within our largest customer and also 
the change in the invoicing of certain low 
margin subtitling work. There was one 
line of outsourced work which we have 
previously managed on behalf of a major 
client from which we have earned a small 
margin to cover administration. This work 
declined during the year and we took the 
decision to extricate ourselves from the 
invoicing process, which in the future will 
occur directly between the supplier and 
customer. The Board felt that, although 
this would have an impact on the reported 
turnover, it would enable us to report 
clearer financial results as they would not be 
distorted by non-core, low margin work.  
In the year ended 31 March 2011 the 
reported revenue included $2.0m of this 
outsourced revenue; the amount in the prior 
year was $3.6m. Now that we have stepped 
out of the invoicing it is expected that the 
amount in the year ended 31 March 2012 
will be minimal. It can be seen that once the 
impact of the outsourced work is removed 
the core business would report a turnover of 
$11.8m which shows a small increase from 
$11.5m in the prior year.
The overheads of the business have 
reduced slightly since the previous year. On 
the face of the Consolidated Statement 
of Comprehensive Income (CSoCI) the 
operating expenses show a decrease from 
$11.5m to $10.2m but the comparative 
number includes an exceptional impairment 
charge. Once this is removed the other 
operating costs show a decrease from 
$10.5m to $10.2m. The overheads are 
primarily staff related costs. 
We have continued to take advantage of 
grant funding and throughout the year 
the total amount of cash received from 
grants was $0.3m (2010: $0.6m). The 
amount recognised in the CSoCI was $0.1m 
(2010: $0.2m). The amounts differ because 
some of the grant funding covers capital 
expenditure and therefore is not recognised 
in the CSoCI. We still have grant-supported 
projects on-going with almost $0.9m of 
funding still available at the end of the 
financial year (2010: $0.7m).
We have a total of around $28m of 
accumulated tax losses and consequently 
do not expect to pay taxes in the UK or the 
US in the immediate future. Now that the 
group is profitable and we anticipate profits 
in the foreseeable future it is appropriate 
that some of these losses are recognised as 
a deferred tax asset. Consequently, in the 
year we have recognised a $0.5m deferred 
tax asset.
Financial Review
“With a significant increase in operating profit, ZOO has made a great 
deal of progress over the past year and I share the board’s optimism 
for the future.”
Summary
	 Significant increase in 
operating profit in the 
year despite a reduction in 
turnover
	 Raised $2.8m working 
capital to accelerate work in 
new markets
	 Reduction of loan note 
significantly strengthens the 
balance sheet 
	 Helen P Gilder 
Group Finance Director
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Our Performance
Our Financials Our Governance Our Performance Our Business
Convertible loan note maturity
Our Consolidated Statement of Financial 
Position as at 31 March 2011 includes 
the reporting of a liability of $5.6m which 
relates to the £3.54m convertible loan note 
instrument which was issued in 2006 and 
is due to mature in October 2011. I am 
pleased to confirm that we have reached 
agreement with the loan note holders to 
convert 50 per cent of this loan into equity 
and for the remaining 50 per cent to remain 
as a loan note instrument for a further two 
years. The new loan note instrument will 
carry a coupon of 7.5 per cent, a conversion 
price of 48p and is now due to mature on 
31 October 2013.
At the same time as resolving the loan note 
maturity we have successfully agreed a share 
placing which has raised $2.8m (£1.7m) 
working capital to support the acceleration 
of the business in new markets, particularly 
eBooks.
Following this placing the Consolidated 
Statement of Financial Position is 
significantly strengthened with net assets 
of around $9m.
Cash flow
The year has seen a reduction in cash 
generated from operating activities 
compared to the previous year through the 
impact of the reorganisation within a key 
customer and the investment in new areas 
of business. Operating cash generation was 
$0.9m compared to $2.1m in 2010. Overall, 
cash reduced by $0.6m in the year, leaving 
a cash balance at 31 March 2011 of $0.6m 
(2010: $1.2m).
The Board is focused on maximising the 
efficiency of cash management and we 
closely monitor our cash predictions. The 
placing mentioned above will provide 
additional working capital to give us the 
ability to accelerate the expansion into new 
markets such as eBooks, where we can see 
many opportunities. The working capital is 
supplemented by a $0.8m bank overdraft 
facility which gives a buffer for the peaks 
and troughs of cash flow throughout the 
trading year.
Summary
With a significant increase in operating 
profit, ZOO has made a great deal of 
progress over the past year and I share the 
board’s optimism for the future. With an 
exciting period ahead as we penetrate new 
markets, we will manage the growth to 
ensure that we maximise profitability and 
efficiently manage working capital. I look 
forward to reporting on progress in the 
future.
Helen P Gilder
Group Finance Director
Professional tools for the eBooks market
“The Electronic Sell Through market is clearly 
one of the most exciting developments in 
recent history for all forms of media sales, and 
we’re delighted to be playing an increasing 
role. The incredible growth in the electronic 
books market has been well documented 
of late and we believe that there are also 
substantial opportunities within the music 
industry.”
Stuart Green 
Chief Executive Officer
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Our Governance
Board of Directors
1. Roger D Jeynes 
Chairman  (aged 58)
Roger has over 20 years experience in the 
technology sector, encompassing senior sales, 
marketing and general management roles in 
the UK, Italy and the USA with IBM, Pyramid 
Technology, and EMC Corporation. From 1997 
to 2006 he was Chief Operating Officer at AIM-
listed technology merchant bank Interregnum 
Plc through which he served on the boards 
of more than a dozen technology companies. 
He is currently a non-executive director of 
Downing Distribution VCT1 (DDV1.L), Keycom 
plc, mxData Limited and Charborough Capital 
Limited, and Professor of Management Practice 
at the Ashcroft International Business School of 
Anglia Ruskin University.
2. Dr Stuart A Green
Chief Executive Officer (aged 46)
Stuart brings over 20 years of experience of 
team building and executive management in 
the software industry to his role as CEO. Prior 
to his appointment as CEO Stuart was Chief 
Technical Officer, where he was responsible 
for determining the technology strategy and 
expanding the core intellectual property of 
the company. Previously he founded Kazoo3D 
plc and prior to that was the co-founder of 
LightWork Design Limited where he served as 
Technical Director. Stuart received a Ph.D in 
Computer Science from the University of Bristol 
in 1989 for his research into multiprocessor 
systems for advance computer graphics. He is 
responsible for securing almost 30 patents  
in the fields of image processing and digital 
media processing.
3. Helen P Gilder
Group Finance Director (aged 44)
Helen has been employed within the technical 
and services industry for over fifteen years. After 
qualifying as a Chartered Accountant with PKF 
in 1991 she moved into a more commercially 
focussed role. Her extensive managerial and 
transaction experience came through her role as 
Finance Director within a highly acquisitive listed 
IT company. She joined ZOO to assist with the 
initial float in 2000 as Group Financial Controller 
and has gathered an invaluable knowledge of 
the companies in the group. She became the 
Group Finance Director in 2006.
4. Gordon Doran
Commercial Director (aged 44)
Gordon has held senior positions in sales and 
marketing roles for a variety of companies in 
the software industry since the early 1990s, 
both in the UK and US. Most recently he was 
Chief Operating Officer for Mediostream Inc., a 
consumer DVD software developer, and joined 
ZOO in 2005 to establish a North American 
division. In his role as President he is responsible 
for all ZOO’s North America operations and has 
been pivotal in establishing relationships with a 
number of large US entertainment companies. 
Gordon became the Commercial Director in 
2009.
5. James A Livingston
Non-Executive Director (aged 30)
James is a senior investment manager at 
Foresight Group, a leading UK asset manager. 
He works closely with the boards of a number of 
SME UK companies as non-executive director or 
board observer. Prior to Foresight James was a 
strategy consultant at Deloitte where he advised 
businesses in the healthcare, public sector and 
technology sectors. He has a first class degree 
in Natural Sciences and Management from 
Cambridge University and holds the CIMA 
advanced Diploma in Management Accounting. 
James has represented Great Britain at the 
Rowing World Championships and rowed for 
Cambridge in the Boat Race.
1. 
2. 
3. 
4. 
5. 
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Our Financials Our Governance Our Performance Our Business
Our Governance
Senior Management
1. Duncan A Wain
Chief Operating Officer (aged 48)
Duncan joined ZOO following the acquisition of 
the assets of Scope Seven Inc. in August 2007. 
He co-founded Scope Seven in 1997 where he 
was responsible for operations and revenues 
from post-production, compression and 
authoring services provided to US entertainment 
companies. He is an accomplished executive 
in the Hollywood post production industry 
and has worked with many studios including 
Warner Home Video, Disney, 20th Century Fox, 
HBO, Lions Gate, New Line and the BBC. In 
his role as COO of ZOO Duncan is responsible 
for all production operations and for growing 
service revenues with studio clients. Duncan 
earned a Bachelors Degree in Business at Loyola 
Marymount University and is currently a member 
of New Media Council of the Producers Guild 
of America, an industry group that serves 
to represent the interests of professionals 
responsible for the art, craft and science of 
production in the entertainment industry.
2. Philip M Corio
Chief Technical Officer (aged 44)
Phil has worked in the pre-press industry since 
1985, most recently with AGI Media Inc., Los 
Angeles where he was Production Director 
working on the creation of marketing materials 
and special packaging for the entertainment 
industry. Phil joined ZOO in 2006 and has been 
instrumental in establishing the company’s 
product and service offerings for the pre-media 
marketplace. In his role as Chief Technical 
Officer, Phil is responsible for providing direction 
for ZOO’s product development efforts to 
differentiate the company’s service offerings for 
the entertainment industry.
Advisers
Company Secretary and 
Registered Office
Helen P Gilder
ZOO Digital Group plc
The Tower
2 Furnival Square
Sheffield 
S1 4QL
Tel: 0114 241 3700
Company number
3858881
Bankers
Royal Bank of Scotland
3rd Floor
2 Whitehall Quay
Leeds 
LS1 4HR
Nominated adviser 
and broker
finnCap Limited
60 New Broad Street
London 
EC2M 1JJ
Auditor
PKF (UK) LLP
2nd Floor
Fountain Precinct
Balm Green
Sheffield 
S1 2JA
Registrar
Share Registrars Limited
Suite E, First Floor
Lion & Lamb Yard
Farnham
Surrey 
GU9 7LL
Solicitors
DLA Piper UK LLP
1 St Paul’s Place
Sheffield 
S1 2JX
Finers Stephens Innocent LLP
179 Great Portland Street
London
W1W 5LS
1. 
2.
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Our Governance
Directors’ Report
The directors present their report on the affairs of the group, 
together with the financial statements and auditor’s report, for the 
year ended 31 March 2011.
Principal activities
The principal activity of the group for the year under review was to 
provide productivity software tools and services for digital content 
authoring, video post-production and localisation for entertainment 
and packaging markets and to continue with on-going research and 
development in those areas.
Review of the Business and Future Developments
A review of the development of the business together with an 
indication of future developments is included in the Chairman’s and 
Chief Executive’s statements set out on pages 6 to 9.
The audited financial statements for the year ended 31 March 2011 
are set out on pages 23 to 60. The directors do not recommend the 
payment of a dividend for the year.
Research and development
The group undertakes research and development into software 
solutions for media transformation. The aim of the software 
developed is to improve efficiencies, therefore reducing time and 
costs of producing physical and digital video products.
Charitable and political contributions
During the year the group made no charitable or political donations.
Employees
Employee consultation
The group places considerable value on the involvement of its 
employees and has continued to keep them informed on matters 
affecting them as employees and on the various factors affecting 
the performance of the group. This is achieved through formal and 
informal meetings, questionnaires and regular feedback.
Disabled employees
Applications for employment by disabled persons are always 
fully considered, bearing in mind the aptitudes of the applicant 
concerned. In the event of members of staff becoming disabled 
every effort is made to ensure that their employment with the group 
continues and that appropriate training is arranged. It is the policy of 
the group that the training, career development and promotion of 
disabled persons should, as far as possible, be identical with that of 
other employees.
Events after the reporting period
On 10 June 2011 36,155 shares were issued following the exercise 
of employee share options.
On 14 June 2011 the group entered into an agreement to  
extend the lease on its US offices. The lease has been extended  
to December 2016. The total commitment of the five year period  
is $2.6m.
On 10 August 2011 the company announced that agreement  
had been reached with the holders of the $5.6m convertible loan 
note to convert 50% of their holding into shares at a price of 
40p and for the balance of 50% to remain within the loan note 
instrument for a further two years at a coupon of 7.5% and a 
conversion price of 48p. The loan note conversion into equity results 
in the issue of 4,426,250 shares and the placing results in a further 
4,252,500 shares. 
Dr Stuart A Green held a $549,000 (2010: $519,000) interest in 6% 
unsecured convertible loan stock at 31 March 2011. The underlying 
value of the interest in the convertible loan stock is £342,000. As 
a result of the above agreement, 50% of this loan stock has been 
converted into shares. 
On 10 August 2011 it was further announced that there has been a 
successful placing of shares raising $2.8m at a price of 40p in order 
to fund working capital in areas of growth. Stuart A Green, CEO, 
agreed to subscribe $160,000 to the placing.
On 16 August 2011 99,500 shares were issued following the 
exercise of employee share options.
Directors
The directors who served during the year were as follows:
Roger D Jeynes
(1)
 Non-Executive Chairman
Dr Christopher HB Honeyborne
(2)
 Non-Executive Chairman 
Dr Stuart A Green Chief Executive Officer
Helen P Gilder Group Finance Director
Gordon Doran Commercial Director
James A Livingston Non-Executive Director
Ian C Stewart
(3)
 Non-Executive Director
(1)
 Appointed 28 April 2010.
(2)
 Retired 28 April 2010.
(3)
 Retired 31 December 2010.
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Our Financials Our Governance Our Performance Our Business
Our Governance
Details of the interests in the shares of the company at the 
beginning or subsequent date of appointment and end of the 
financial year of those directors who held office at 31 March 2011 
are disclosed in the Directors’ Remuneration report. In accordance 
with the company’s Articles of Association Helen Gilder and James 
Livingston retire by rotation at the next Annual General Meeting 
and, being eligible, offer themselves for re-election.
Directors’ indemnities
The group has granted an indemnity to one or more of its directors 
against liability in respect of proceedings brought by third parties, 
subject to the conditions set out in the Companies Act 2006. The 
company has purchased and maintains directors’ and officers’ 
insurance cover against certain legal liabilities and costs for claims in 
connection with any act or omission by such director and officers in 
the execution of their duties.
Policy and practice on payment of creditors
The group’ s policy is to settle terms of payment with suppliers when 
agreeing the terms of each transaction, ensure that suppliers are made 
aware of the terms of payment and abide by the terms of payment. 
Trade creditors of the group at 31 March 2011 were equivalent to 76 
days (2010: 101 days) purchases, based on the average daily amount 
invoiced by suppliers during the year. The group has agreed with one 
significant creditor extended payment terms.
Key performance indicators
In addition to the monthly management accounts and information 
that are produced and monitored against the company’s plan and 
the previous year’s performance, the Board uses Key Performance 
Indicators (KPI’s) in the management of the key risks of the business 
and as a measure of the business efficiencies of the company. The 
KPI’s cover the following:
n Sales performance is measured against budget and the latest 
expectations which are updated monthly.
n Debtors are monitored by reviewing trends in debtor days and 
tracking the level of debt becoming overdue by 30 days or more
n Costs and overheads are monitored against budget and against 
current needs.
n Employee satisfaction is monitored through monthly surveys, 
enabling management to act on emerging trends.
  2011 2010
Revenue $000 13,757 15,056 
Adjusted EBITDA* $000 2,267 1,594 
Debtor days days 32 33 
Overdue debtors $000 303 156 
* EBITDA before exceptional impairment.
Principal risks and uncertainties
Company law requires the group to report on princpal risks and 
uncertainties facing the business, which the directors believe to be 
as follows:
International business
The group is domiciled in the UK, but has the LA operations and 99% 
of its revenues coming from overseas customers. As with most small 
yet international businesses the group’s risks are around managing 
the cash flow and exchange rate fluctuations. The group continues to 
focus closely on conservative cash management and monitor currency 
transactions taking proactive actions when appropriate.
Technology conservation
The group continues with an aggressive patent protection policy, 
with 28 patents granted and 15 pending. These are integral to the 
business in the protection of our unique technologies.
Operational risks
The main operational risks are delays in the production of technology 
products and adoption of technology tools by customers. The production 
risk is managed by ensuring very tightly controlled schedules, thoroughly 
planning staff time and allowing time for contingencies.
Loss of the group’s key customer
Client relationships are crucial to the group and the strength of 
them are key to its continued success. The group mitigates this risk 
by a diverse number of contacts working closely with the customer 
across different business units and obtaining long term contractual 
agreements for supply of technology and services.
Financial risks
The main financial risks faced by the group are foreign currency risk 
and liquidity risk. The directors regularly review and agree policies for 
managing these risks.
Foreign currency risk is managed by matching payments and receipts 
in foreign currency to minimise exposure. From 1 April 2009 the 
functional currency and presentation currency of the group has 
changed to US dollars. The majority of the group’s transactions are 
undertaken in US dollars, however, the Consolidated Statement of 
Financial Position can be affected by movements between pound 
sterling and US dollars as the parent company and UK subsidiaries 
have some pound sterling debtors and creditors. In the current 
financial year the group has used forward foreign exchange 
contracts to mitigate the risk of fluctuations in the pound sterling 
and US dollars exchange rate.
Further information on the financial risks is given in note 28 to  
the accounts.
.
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Our Governance
Directors’ Report
Financial instruments
During the financial year the group entered into some forward 
exchange contracts to sell US dollars for pound sterling. There were 
no forward exchange contracts outstanding at 31 March 2011 
(2010: nil). Further description of the forward foreign exchange 
contracts is given in note 28 to the accounts. The group is also 
exposed to the usual credit risk and cash flow risk associated with 
selling on credit and manages this through credit control procedures.
Purchase and disposal of Interest in Own Shares
During the year the group purchased 298,232 shares (2010: 
473,500), this represents 1% of the group’s share capital. The total 
cost of the purchase was $124,374 (2010: $71,823). Also during 
the year 164,850 ordinary shares with a nominal value of 15p were 
disposed of (2010: 451,683). No consideration was received for 
the disposal as these shares were transferred to the group’s share 
incentive plan or distributed as a staff bonus. The maximum number 
of own ordinary shares, with a nominal value of 15p, held in the 
year was 185,717 (2010:475,153). 
Substantial shareholdings
At 18 August 2011, the company had been notified, in accordance 
with sections 791 to 825 of the Companies Act 2006, of the following 
interests in the ordinary share capital of the company:
  Percentage
Name of holder  held Number
Dr S A Green  17.5% 4,179,835
Funds managed and 
advised by 
Foresight Group  15.9% 3,794,689
Herald Investment Trust plc  15.1% 3,590,102
John Henry Holdings Inc.  9.0% 2,148,642
JM Finn & Co  8.2% 1,966,712
Mr I C Stewart  7.2% 1,705,365
South Yorkshire
Investment Capital Fund  5.8% 1,382,562
Disclosure of information to auditor
Each of the persons who are directors at the time when this 
directors’ report is approved has confirmed that:
n so far as that director is aware, there is no relevant audit 
information of which the company’s auditor is unaware, and
n that director has taken all the steps that ought to have been 
taken as a director in order to be aware of any information 
needed by the company’s auditor in connection with preparing 
its report and to establish that the company’s auditor is aware of 
that information.
 
By order of the Board
Helen P Gilder
Director and Secretary
18 August 2011
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Our Governance
Corporate Governance Report
Directors' responsibilities statement
The directors are responsible for preparing the directors' report and 
the financial statements in accordance with applicable law  
and regulations. 
Company law requires the directors to prepare financial statements 
for each financial year. Under that law the directors have, as required 
by the AIM Rules of the London Stock Exchange, elected to prepare 
the group financial statements in accordance with International 
Financial Reporting Standards as adopted by the European Union 
and also elected to prepare the parent company financial statements 
in accordance with those standards. Under company law the 
directors must not approve the financial statements unless they are 
satisfied that they give a true and fair view of the state of affairs of 
the company and the group and of the profit or loss of the group for 
that period. 
In preparing these financial statements the directors are required to:
n select suitable accounting policies and then apply them 
consistently;
n make judgments and estimates that are reasonable and prudent;
n state whether the financial statements have been prepared in 
accordance with IFRSs as adopted by the European Union;
n prepare the financial statements on the going concern basis 
unless it is inappropriate to presume that the company and the 
group will continue in business.
The directors are responsible for keeping adequate accounting 
records that are sufficient to show and explain the company's 
transactions and disclose with reasonable accuracy at any time the 
financial position of the company and the group and enable them to 
ensure that the financial statements comply with the Companies Act 
2006. They are also responsible for safeguarding the assets of the 
company and the group and hence for taking reasonable steps for 
the prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity of 
the corporate and financial information included on the company’s 
website. Legislation in the United Kingdom governing the 
preparation and dissemination of the financial statements and other 
information included in annual reports may differ from legislation in 
other jurisdictions.
The names and functions of all the directors are stated on page 12. 
Compliance with the Combined Code
Under the rules of AIM (The Alternative Investment Market of the 
London Stock Exchange) the company is not required to comply with 
the Combined Code as annexed to the Listing Rules of the Financial 
Services Authority. Nethertheless, the company has taken steps to 
comply with provisions set out in Section 1 of the Code so far as is 
practical given the size of the group and the nature of its operations. 
The directors consider the group insufficiently large to warrant the 
need for an internal audit function.
Board of Directors
Throughout the year the board consisted of the non-executive 
chairman and three executive directors. From the start of the 
financial year to 31 December 2010 the board also included two 
non-executive directors. Following the retirement of Ian Stewart on 
31 December 2010 this reduced to one non-executive director.
The Board meets formally at least eleven times a year to consider 
those matters which are required to be brought to it for decision, 
which ensures that it maintains full and effective control over 
appropriate strategic, financial, operational and compliance issues. 
Directors receive an information pack before each board meeting 
which contains background information on such matters. Additional 
meetings are held to review and approve special matters if necessary.
Board Committees
There are two committees to deal with remuneration and audit. 
They are comprised solely of the non-executive directors with certain 
executive directors attending by invitation when required.
The Audit Committee is chaired by James Livingston. The committee 
meets at least twice a year. The group’s external auditor is invited to 
attend these meetings. Consideration is given to the auditor’s pre- 
and post-audit reports and these provide opportunities to review the 
accounting policies, internal control and the financial information 
contained in the Annual and Interim Reports.
The Remuneration Committee is chaired by Roger Jeynes and meets 
at least once per year.
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Our Governance
Corporate Governance Report
Internal Control
The Board is ultimately responsible for the group’s system of internal 
control and for reviewing its effectiveness.
A comprehensive budgetary process is completed once a year and 
is reviewed and approved by the Board. The group’s results are 
compared to the budget and prior year and are reported to the 
board on a monthly basis.
Going Concern
After making enquires and taking into account the group’s cash 
resources, the directors have a reasonable expectation that the group 
has adequate resources to continue in operational existence for at 
least the next twelve months and, for this reason, they continue to 
adopt the going concern basis in preparing the financial statements.
By order of the Board
Helen P Gilder
Director and Secretary
18 August 2011
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Our Governance
Directors’ Remuneration Report
Directors’ remuneration report
As an AIM listed company, ZOO Digital Group plc is not required to comply with the principles and regulations of the Directors’ 
Remuneration Report Regulations 2002. However, management consider it good practice to comply so far as is appropriate for a company  
of its size and nature.
The Remuneration Committee
During the year ended 31 March 2011 the Remuneration Committee consisted of all the non-executive directors. The committee was chaired by 
Ian Stewart until his retirement from the board on 31 December 2010 and was thereafter chaired by Roger Jeynes. Christopher Honeyborne was 
a member of the committee until his retirement from the board on 28 April 2010 and James Livingston was a member throughout the year. 
The Remuneration Committee is responsible for determining the Executive Directors’ remuneration packages, including bonuses, share 
options and other incentive schemes.
Executive directors
The committee aims to ensure compensation is fair and reasonable and that it motivates the executive directors on both the short and  
long-term.
The remuneration packages include:
n Basic salary
n Defined contribution to personal pension plans
n Private medical insurance
n Discretionary bonus
Non-Executive directors
The Board determines the remuneration package of the non-executive directors. Ian Stewart was paid as an employee until his retirement 
on 31 December 2010 and Christopher Honeyborne was remunerated by fees invoiced from Brockhill Limited. James Livingston was 
remunerated by fees invoiced from Foresight Group. Roger Jeynes was remunerated by fees invoiced by Charborough Capital Limited.
Directors’ remuneration
Directors’ remuneration for the year to 31 March 2011 is:
       2011 2010
   Salary Bonus Benefits Pension Total Total
    $000 $000 $000 $000 $000 $000
Dr Stuart A Green   214 65 3 — 282 263
Helen P Gilder   149 43 3 16 211 199
Gordon Doran*   220 74 16 —  310 214
Roger D Jeynes†   36 — — — 36 —
James A Livingston‡   33 — — — 33 27
Ian C Stewart§   17 — — — 17 24
Dr Christopher HB Honeyborne^  3 — — — 3 32
Matthew P Taylor¶   — — — — — 7
    672 182 22 16 892 766
*
 
Gordon Doran was appointed as a director on 28 July 2009.
† Roger Jeynes was appointed on 28 April 2010.
‡ James Livingston was appointed on 12 June 2009.
§ Ian Stewart retired on 31 December 2010.
^ Dr Christopher HB Honeyborne retired on 28 April 2010.
¶ Matthew Taylor retired on 12 June 2009.
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Directors’ Remuneration Report
Directors’ remuneration paid in pound sterling for the year to 31 March 2011 is:
       2011 2010
   Salary Bonus Benefits Pension Total Total
    £000 £000 £000 £000 £000 £000
Dr Stuart A Green   138 40 2 — 180 166
Helen P Gilder   96 27 2 10 135 125
Roger D Jeynes   23 — — — 23 —
James A Livingston   22 — — — 22 17
Ian C Stewart   11 — — — 11 15
Dr Christopher H B Honeyborne  2 —  — — 2 20
Matthew P Taylor   — —  — — — 4
    292 67 4 10 373 347
Gordon Doran is remunerated in US Dollars.
At 31 March 2011 $45,000 was owing to Dr Stuart Green (2010:$59,000) and $36,000 (2010: $30,000) was due to Helen Gilder in respect of their 
services performed as directors. The balance owing to Brockhill Limited at 31 March 2011 was $nil (2010: $nil). The balance owing to Foresight Group 
at 31 March 2011 was $18,000 (2010: $16,000).The balance owing to Charborough Capital Limited at 31 March 2011 was $8,000 (2010: $nil).
Two directors (2010: two) serving during the year have been members of money purchase pension schemes into which the company contributes.
The highest paid director received emoluments and benefits as follows: 
       2011 2010
       $000 $000
Emoluments       310 257
Money purchase pension contributions     — 6
        310 263
The highest paid director did not exercise any share options, but received 1,500 shares in the year as part of the group’s share incentive scheme. 
Directors’ share options
Aggregate emoluments disclosed above do not include any amounts for the value of options to acquire ordinary shares in the company 
granted to or held by the directors. Details of the options are as follows:
   Granted Exercised Surrendered   Date from
Name of 1 April during  during during 31 March Exercise which
director 2010 the year the year the year 2011 price exercisable Expiry date 
Roger D Jeynes — 30,000 — — 30,000 $0.65† Jun 11 Jun 20 
Dr Stuart A Green 175,000 —  — —  175,000 $0.21* Sep 09 Oct 18 
Helen P Gilder 450,000 —  — —  450,000 $0.21* Sep 09 Oct 18 
Helen P Gilder 100,000 —  — —  100,000 $0.21* Oct 09 Oct 18 
Gordon Doran 450,000 —  — —  450,000 $0.21* Sep 09 Oct 18 
Gordon Doran 100,000 —  — —  100,000 $0.21* Oct 09 Oct 18 
Ian C Stewart‡ 30,000 —  (30,000) —  — $0.21* Sep 09 Oct 18 
Dr Christopher 
H B Honeyborne 30,000 — — (30,000) — $0.21* Sep 09 Oct 18 
  1,335,000 30,000 (30,000) (30,000) 1,305,000
† The underlying exercise price of the share options is £0.43.
* The underlying exercise price of the share options is £0.15.
‡ Ian Stewart exercised all his share options on his retirement as allowed by the rules of the scheme.
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Our Governance
The exercise of share options is staggered over the exercise period with typically 40% exercisable after the first year and a further 30% in 
each of the next two years.
The charge to profit or loss in respect of directors’ share options amounted to $18,000 (2010: $54,000).
The market price of the ordinary shares at 31 March 2011 was 81 cents (50.5p) and the range during the year was 111 cents (70.9p) (high) 
to 37 cents (25p) (low).
Service contracts
The service contracts and letters of appointment of the directors include the terms in the table below. All the directors are on rolling director 
appointments and offer themselves for re-election by rotation in accordance with the company’s Articles of Association. Upon termination of 
their service agreement, executive directors are entitled to salary equivalent to their notice period.
        Date of  Notice
Name of director       appointment period
Executive directors
Dr Stuart A Green       28 January 2000 12 months
Helen P Gilder      29 September 2006 6 months
Gordon Doran       28 July 2009 12 months
Non-executive directors
Roger D Jeynes       28 April 2010 —
James A Livingston       12 June 2009 —
Dr Christopher H B Honeyborne retired on 28 April 2010 and Ian C Stewart retired on 31 December 2010.
Directors’ interests
The directors who held office at 31 March 2011 had the following interests, including any interests of a “connected person”, in the 15p 
ordinary shares of ZOO Digital Group plc:
       2011 2010
Name of director        Beneficial Beneficial
Roger D Jeynes  Appointed 28 April 2010     20,000 —
Dr Stuart A Green       4,179,835 4,179,835
Helen P Gilder       56,019 46,843
Gordon Doran       — —
James A Livingston       — —
Shares are held on behalf of three of the directors in the long term incentive plan.
Dr Stuart A Green held a $549,000 (2010: $519,000) interest in 6% unsecured convertible loan stock at 31 March 2011. The underlying 
value of the interest in the convertible loan stock is £342,000. On 10 August 2011 the company announced that agreement had been 
reached with the holders of the $5.6m convertible loan note to convert 50% of their holding into shares at a price of 40p and for the 
balance of 50% to remain within the loan note instrument for a further two years at a coupon of 7.5% and a conversion price of 48p. The 
loan note conversion into equity results in the issue of 4,426,250 shares and the placing results in a further 4,252,500 shares. As a result, 
50% of Dr Stuart A Green’s loan stock has been converted into shares. 
On 10 August 2011 it was further announced that there has been a successful placing of shares raising $2.8m at a price of 40p in order to 
fund working capital in areas of growth. Stuart A Green, CEO, agreed to subscribe $160,000 to the placing.
James Livingston has a non-beneficial interest in both shares and loan notes as a representative of Foresight Group, manager of the Foresight 
VCTs, several of which have a direct beneficial interest in ZOO Digital Group plc.
No other transactions have taken place with directors.
No other changes took place in the interests of directors between 31 March 2011 and 18 August 2011.
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Independent Auditor’s Report to the Members  
of Zoo Digital Group plc
We have audited the financial statements of ZOO Digital Group plc 
for the year ended 31 March 2011 which comprise the Consolidated 
Statement of Comprehensive Income, the Consolidated and Parent 
Company Statement of Financial Position, the Consolidated and 
Parent Company Statement of Changes in Equity, the Consolidated 
and Parent Company Statement of Cash Flows, and the related notes. 
The financial reporting framework that has been applied in their 
preparation is applicable law and International Financial Reporting 
Standards (IFRSs) as adopted by the European Union and, as regards 
the parent company financial statements, as applied in accordance 
with the provisions of the Companies Act 2006.
This report is made solely to the company’s members, as a body, in 
accordance with Chapter 3 of Part 16 of the Companies Act 2006. 
Our audit work has been undertaken so that we might state to the 
company’s members those matters we are required to state to them 
in an auditor’s report and for no other purpose. To the fullest extent 
permitted by law, we do not accept or assume responsibility to anyone 
other than the company and the company’s members as a body, for 
our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditor
As explained more fully in the directors’ responsibilities statement, 
the directors are responsible for the preparation of the financial 
statements and for being satisfied that they give a true and fair view. 
Our responsibility is to audit and express an opinion on the financial 
statements in accordance with applicable law and International 
Standards on Auditing (UK and Ireland). Those standards require us 
to comply with the Auditing Practices Board’s Ethical Standards for 
Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and 
disclosures in the financial statements sufficient to give reasonable 
assurance that the financial statements are free from material 
misstatement, whether caused by fraud or error. This includes an 
assessment of: whether the accounting policies are appropriate to 
the group’s and the parent company’s circumstances and have been 
consistently applied and adequately disclosed; the reasonableness 
of significant accounting estimates made by the directors; and 
the overall presentation of the financial statements. In addition, 
we read all the financial and non-financial information in the 
annual report to identify material inconsistencies with the audited 
financial statements. If we become aware of any apparent material 
misstatements or inconsistencies we consider the implications for 
our report.
Opinion on financial statements
In our opinion:
n the financial statements give a true and fair view of the state 
of the group’s and the parent company’s affairs as at 31 March 
2011 and of the group’s profit for the year then ended;
n the group financial statements have been properly prepared in 
accordance with IFRSs as adopted by the European Union;
n the parent company financial statements have been properly 
prepared in accordance with IFRSs as adopted by the European 
Union as applied in accordance with the provisions of the 
Companies Act 2006; and
n the financial statements have been prepared in accordance with 
the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies 
Act 2006
In our opinion the information given in the directors’ report for the 
financial year for which the financial statements are prepared is 
consistent with the financial statements.
Matters on which we are required to report by 
exception
We have nothing to report in respect of the following matters  
where the Companies Act 2006 requires us to report to you if, in  
our opinion:
n adequate accounting records have not been kept, or returns 
adequate for our audit have not been received from branches 
not visited by us; or
n the parent company financial statements are not in agreement 
with the accounting records and returns; or
n certain disclosures of directors’ remuneration specified by law 
are not made; or
n we have not received all the information and explanations we 
require for our audit.
Linda Cooper (Senior statutory auditor)
for and on behalf of PKF (UK) LLP , Statutory auditor 
18 August 2011
Sheffield, UK
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our Financials Our Governance Our Performance Our Business
Independent Auditor’s Report to the Members  
of Zoo Digital Group plc
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2011
           2011 2010
           Note $000 $000
Revenue        5 13,757 15,056
Cost of sales          (2,388) (3,769)
Gross profit         11,369 11,287
Other operating income       6 135 177
Operating expenses        8 (10,158) (11,503)
operating profit/(loss)        1,346 (39)
Analysed as:
Operating profit/(loss) before exceptional impairment       1,346 821
Exceptional impairment       8 — (860)
           1,346 (39)
Finance income        7 — 1
Exchange loss on borrowings      7  (300) (290)
Finance cost        7 (535) (540)
Total finance cost         (835) (830)
Profit/(loss) before taxation       511 (868)
Tax on profit/(loss)        11 484 (4)
Profit/(loss) for the year attributable to equity holders of the parent      995 (872)
other comprehensive income:
Total Comprehensive income       995 (872)
Comprehensive income attributable to equity holders of the parent     995 (872)
           cents cents
Profit/(loss) per share       13
basic            4.29  (4.09)
diluted           2.84 (4.09)
The notes on pages 30 to 59 are an integral part of these consolidated financial statements.
The company has elected to take the exemption under section 408(2) of the Companies Act 2006 to not present the parent company 
Statement of Comprehensive Income.
The profit for the parent company for the year was $853,000 (2010: $897,000).
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Consolidated Statement of Financial Position
as at 31 March 2011
           2011 2010
           Note $000 $000
ASSETS
Non-current assets
Property, plant and equipment      15 549 558
Intangible assets        16 8,480 6,903
Deferred income tax assets      17 486 —
             9,515 7,461
Current assets
Inventories        18 80 365
Trade and other receivables      19 3,016 2,667
Cash and cash equivalents       20 600 1,221
             3,696 4,253
Total assets          13,211 11,714
LIABILITIES
Current liabilities
Trade and other payables       23 (3,319) (4,763)
Borrowings        22 (5,709) (169)
             (9,028) (4,932)
Non-current liabilities
Borrowings        22 (191) (5,138)
Total liabilities          (9,219) (10,070)
Net assets          3,992 1,644
EQUITY
Equity attributable to equity holders of the parent
Called up share capital       21 5,127 4,573
Share premium reserve        33,626 32,899
Other reserves         12,293 12,293
Share option reserve         278 267
Warrant reserve         190 50
Convertible loan note reserve       380 380
Foreign exchange translation reserve       (992) (992)
Accumulated losses         (46,782) (47,822)
             4,120 1,648
Interest in own shares        (128) (4)
Attributable to equity holders        3,992 1,644
The notes on pages 30 to 59 are an integral part of these consolidated financial statements.
The financial statements on pages 23 to 59 were approved and authorised for issue by the Board of Directors on 18 August 2011 and were 
signed on its behalf.
 
Stuart A Green Helen P Gilder
Chief Executive Group Finance Director
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our Financials Our Governance Our Performance Our Business
Company Statement of Financial Position
as at 31 March 2011
           2011 2010
          Note $000 $000
ASSETS
Non-current assets
Property, plant and equipment      15 85 232
Intangible assets        16 2,281 2,290
Investment in subsidiary undertakings      26 9,700 9,700
Deferred income tax assets      17 92 —
             12,158 12,222
Current assets
Trade and other receivables      19 21,804 18,353
Cash and cash equivalents       20 — 8
             21,804 18,361
Total assets          33,962 30,583
LIABILITIES
Current liabilities
Trade and other payables       23 (899) (1,070)
Borrowings        22 (5,555) —
Cash and cash equivalents       20 (719) —
             (7,173) (1,070)
Non-current liabilities
Borrowings        22 (9,701) (14,755)
Total liabilities          (16,874) (15,825)
Net assets          17,088 14,758
EQUITY
Equity attributable to equity holders of the parent
Called up share capital       21 5,127 4,573
Share premium reserve        33,626 32,899
Other reserves         10,569 10,569
Share option reserve         278 267
Warrant reserve         190 50
Convertible loan note reserve       380 380
Foreign exchange translation reserve       (13) (13)
Accumulative losses         (33,065) (33,963)
             17,092 14,762
Interest in own shares        (4) (4)
Attributable to equity holders        17,088 14,758
Company registration number: 3858881
The notes on pages 30 to 59 are an integral part of these consolidated financial statements.
The financial statements on pages 23 to 59 were approved and authorised for issue by the Board of Directors on 18 August 2011 and were 
signed on its behalf.
 
Stuart A Green Helen P Gilder
Chief Executive Group Finance Director
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our Financials
Consolidated Statement of Changes in Equity
for the year ended 31 March 2011
      Foreign
     Share exchange Convertible Share Share   Interest
    ordinary  premium translation loan note option warrant other Accumulated in own
    shares reserve reserve reserve reserve reserve reserves losses shares
     $000 $000 $000 $000 $000 $000 $000 $000 $000
Balance at 
1 April 2009  4,573 32,899 (992) 380 110 38 12,293 (46,950) (4)
Share-based 
payments      157 12
Loss for the year                (872) 
Balance at 
31 March 2010 4,573 32,899 (992) 380 267 50 12,293 (47,822) (4)
Issue of shares  468 779
Issue costs   (52)
Share-based 
payments      69 140
Exercise of 
share options  86    (41)   42
Forfeited share options     (17)   3
Purchase of own shares         (124)
Profit for the year                995
Balance at 
31 March 2011  5,127 33,626 (992) 380 278 190 12,293 (46,782) (128)
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our Financials
our Financials Our Governance Our Performance Our Business
Company Statement of Changes in Equity
for the year ended 31 March 2011
      Foreign
     Share exchange Convertible Share Share   Interest
    ordinary  premium translation loan note option warrant other Accumulated in own
    shares reserve reserve reserve reserve reserve reserves losses shares
     $000 $000 $000 $000 $000 $000 $000 $000 $000
Balance at 
1 April 2009  4,573 32,899 (13) 380 110 38 10,569 (34,860) (4)
Share-based 
payments      157 12
Profit for the year                897
Balance at 
31 March 2010  4,573 32,899 (13) 380 267 50 10,569 (33,963) (4)
Issue of shares  468 779
Issue costs   (52)
Share-based 
payments      69 140
Exercise of 
share options  86    (41)   42
Forfeited share options     (17)   3
Profit for the year                853 
Balance at 
31 March 2011  5,127 33,626 (13) 380 278 190 10,569 (33,065) (4)
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Consolidated Statement of Cash Flows
for the year ended 31 March 2011
           2011 2010
           Note $000 $000
Cash flows from operating activities
Operating profit/(loss) for the year       1,346 (39)
Finance income        7 — 1
Depreciation        15 424 419
Amortisation and Impairment      16 497 1,214
Share-based payments       27 196 169
Purchase of own shares        (124) —
Disposal and derecognition of intangible assets     16 24 1
Disposal of property, plant and equipment     15 — 1
Changes in working capital:
Decreases/(increases) in inventories      18 285 (365)
Increases in trade and other receivables      19 (349) (591)
(Decreases)/increases in trade and other payables     23 (1,444) 1,244
Cash flow from operations       855 2,054
Tax paid           (2) (4)
Net cash flow from operating activities       853 2,050
Investing activities
Purchase of intangible assets      16 (2,098) (1,256)
Purchase of property, plant and equipment     15 (415)  (215)
Net cash flow from investing activities       (2,513) (1,471)
Cash flows from financing activities
Repayment of borrowings       22 (144) (521)
Proceeds from borrowings       22 288 120
Finance cost         (386) (371)
Share issue costs        21 (52) —
Issue of share capital        21 1,333 —
Net cash flow from financing        1,039 (772)
Net decrease in cash and cash equivalents       (621) (193)
Cash and cash equivalents at the beginning of the year      1,221 1,414
Cash and cash equivalents at the end of the year     20 600 1,221
The notes on pages 30 to 59 are an integral part of these consolidated financial statements.
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our Financials Our Governance Our Performance Our Business
Company Statement of Cash Flows
for the year ended 31 March 2011
           2011 2010
           Note $000 $000
Cash flows from operating activities
Operating profit for the year       1,555 1,346
Finance income         — 1
Depreciation        15 150 13
Amortisation & Impairment      16 9 —
Share-based payments       27 196 169
Changes in working capital:
Increases in trade and other receivables      19 (3,451) (1,579)
(Decreases)/increases in trade and other payables     23 (171) 191
Cash flow from operations       (1,712) 141
Tax paid           — (2)
Net cash flow from operating activities       (1,712) 139
Investing activities
Purchase of property, plant and equipment     15 (3) —
Net cash flow from investing activities       (3) —
Cash flows from financing activities
Repayment of borrowings       22 — (107)
Finance cost         (293) (34)
Share issue costs        21 (52) —
Issue of share capital        21 1,333 —
Net cash flow from financing        988 (141)
Net decrease in cash and cash equivalents       (727) (2)
Cash and cash equivalents at the beginning of the year      8 10
Cash and cash equivalents at the end of the year     20 (719) 8
The notes on pages 30 to 59 are an integral part of these consolidated financial statements.
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Notes to the Financial Statements
for the year ended 31 March 2011
1. General Information
ZOO Digital Group plc (‘the company’) and its subsidiaries (together ‘the group’) provide productivity tools and services for digital 
content authoring, video post-production and localisation for entertainment and packaging markets and continue with on-going 
research and development in those areas. The group has operations in both the UK and US.
The company is a public limited company which is listed on the Alternative Investment Market and is incorporated and domiciled in  
the UK. The address of the registered office is The Tower, 2 Furnival Square, Sheffield.
The registered number of the company is 3858881.
The consolidated financial statements are presented in US dollars, the currency of the primary economic environment in which the 
company operates (note 2.4).
2. Summary of significant accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been 
applied consistently to all the years presented, unless otherwise stated.
2.1 Basis of preparation
These financial statements have been prepared in accordance with IFRS as adopted by the European Union, and with those parts of the 
Companies Act 2006 applicable to companies reporting under IFRS. 
The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions 
that effect the application of policies and reported amounts in the financial statements. The areas involving a higher degree of 
judgements or complexity, or areas where assumptions or estimates are significant to the financial statements are disclosed in note 3.
A separate Statement of Comprehensive Income for the parent company has not been presented as permitted by section 408 (2) of the 
Companies Act 2006.
In September 2006 the company issued a five year convertible loan note of $5.6m to be either redeemed or converted into shares prior 
to October 2011. Since the balance sheet date the Board have reached agreement with the loan note holders for 50 per cent of this loan 
to be converted into shares and for the remaining 50 per cent to stay in the loan note instrument which has been extended for a further 
a two years with a coupon of 7.5 per cent. A placing of equity shares has raised an additional $2.8m which will be received in September 
2011 and will be used as working capital for the group to support expansion of the business in new markets, particularly eBooks.
The results for the year demonstrate growth in profitability and the directors have prepared trading and cash flow forecasts for the 
group for the period to 31 March 2014 which show further cautious growth in profitability.  In line with industry practice in this sector 
the directors have had informal indications from major and other customers to substantiate a significant proportion of the forecast sales.  
The directors have considered the consequences if the sales volume is less than the level forecast and they are confident that in this 
eventuality alternative steps could be taken to ensure that the group can continue to operate without the need for additional funding.
The bank funding facilities are due for renewal in October 2011 and the directors have no reason to believe that this will not be 
renewed.
The directors believe these assumptions to be realistic, and consequently that the group will continue in operational existence for the 
foreseeable future. The financial statements have therefore been prepared on a going concern basis.
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2. Summary of significant accounting policies continued
2.1.1 IFRS effective in 2010 but not relevant
The following standards and interpretations were mandatory for the current accounting period, but are not relevant to the operations of 
the group.
n IFRS1 (Amendment) First time adoption of IFRS
n IFRS2 (Amendment) Share based payments
n IFRS3 Business combinations (Revised)
n IFRS5 (Amendment) Non-current assets held for sale and discontinued operations
n IFRS7 (Amendment) Financial instruments: Disclosures
n IAS1 and IAS32 (Amendment) Presentation of financial statement and Financial instruments: Presentation
n IAS23 (Amendment) Borrowing costs
n IAS27 (Amendment) Consolidated and separate financial statements
n IAS39 and IFRS7 (Amendment) Reclassification of financial instruments
n IAS39 and IFRIC9 (Amendment) Financial instruments: Recognition and measurement, and Reassessment of embedded derivatives
n IFRIC13 Customer loyalty programmes
n IFRIC16 Hedges of a net investment in a foreign operation
n IFRIC17 Distributions of Non-cash Assets to Owners
n IFRIC18 Transfers of assets from customers
2.1.2 Standards and interpretations issued but not yet applied
Any standards and interpretations that have been issued but are not yet effective, and that are available for early application, have 
not been applied by the group in these financial statements. Application of the majority of these Standards and Interpretations is not 
expected to have a material effect on the financial statements in the future.
The standards that are expected to have a material effect on the financial statements in the future are:
n IFRIC19 Extinguishing financial liabilities with equity instruments
In accordance with the transitional provisions these standards will be prospectively applied and changes in accounting policy resulting 
from their application will have no impact on the opening balances in future financial statements.
2.2 Consolidation
Subsidiaries are all entities over which the group has the power to govern the financial and operating policies so as to obtain benefit 
from their activities. Subsidiaries are fully consolidated from the date on which control is transferred until the date that control ceases.
The consolidated financial statements of ZOO Digital Group plc include the results of the company and its subsidiaries. Subsidiary 
accounting policies are amended where necessary to ensure consistency within the group and intra group transactions are eliminated  
on consolidation.
2.3 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting regularly reviewed by the group’s chief operating 
decision maker to make decisions about resource allocation to the segments and to assess their performance.
2.4 Foreign currency translation
2.4.1 Functional and presentation currency
Items included in the financial statements of each of the group’s entities are measured using the currency of the primary economic 
environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in US dollars 
which is the company’s functional and presentation currency.
The pound sterling/US dollar exchange rate at 31 March 2011 was 0.6228 (2010: 0.6589).
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Notes to the Financial Statements
for the year ended 31 March 2011
2. Summary of significant accounting policies continued
2.4.2 Transactions and balances
Transactions in foreign currencies are recorded at the prevailing rate of exchange in the month of the transaction. Foreign exchange 
gains or losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities 
denominated in foreign currencies at the year end exchange rates are recognised in the profit/(loss) for the year in the Consolidated 
Statement of Comprehensive Income.
In order to hedge its exposure to certain foreign currency exchange risks, the group uses forward foreign currency exchange contracts  
to hedge significant exposure on foreign exchange transactions. This is explained in the financial instruments accounting policy and  
note 28 to these financial statements. The group does not hedge account for forward foreign currency contracts.
2.4.3 Group companies
The results and financial position of all group entities that have a functional currency different from the presentation currency are 
translated into the presentation currency as follows:
n assets and liabilities for each entity are translated at the closing rate at the year end date;
n income and expenses for each Statement of Comprehensive Income are translated at the prevailing monthly exchange rate for the 
month in which the income or expense arose and all resulting exchange rate differences are recognised with the foreign exchange 
translation reserve.
2.5 Intangible assets
2.5.1 Goodwill
Goodwill arising on the acquisition of subsidiary undertakings and businesses, representing any excess of the fair value of the 
consideration given over the fair value of the identifiable assets and liabilities acquired, is capitalised and reviewed annually for 
impairment. Goodwill is carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating 
units that are expected to benefit from the business combination in which the goodwill arose.
2.5.2 Patent and Trademark costs
Patent and trademark costs are stated at cost, net of amortisation and any provision for impairment. Patents and trademarks have a 
finite useful life and amortisation is charged on a straight line basis over the estimated useful economic life which is assessed to be  
ten years.
2.5.3 Research and Development costs
Research expenditure is charged to the Consolidated Statement of Comprehensive Income in the period in which it is incurred. 
Development costs are recognised as an intangible asset if they fulfil the following criteria:
— it is technically feasible to complete the intangible asset so that it will be available for use;
— management intends to complete the intangible asset and use or sell it;
— there is an ability to use or sell the intangible asset;
— it can be demonstrated how the intangible asset will generate probable future economic benefits;
— there are adequate technical, financial and other resources to complete the development and to use or sell the intangible asset;
— the expenditure attributable to the intangible asset during its development can be reliably measured.
Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously 
recognised as an expense are not recognised as an asset in a subsequent period.
Development costs recognised as an intangible asset are amortised on a straight line basis over the estimated useful life of three years or 
the length of any current sales contracts, from the point at which the asset is ready for sale or use.
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2. Summary of significant accounting policies continued
2.5.4 Computer Software
Acquired computer software is shown at historical cost less accumulated amortisation and impairment losses. Amortisation is charged to 
the Consolidated Statement of Comprehensive Income on a straight-line basis over its estimated useful life of three years from the date 
the asset is available for use.
Costs that are directly associated with the development of identifiable and unique software products controlled by the group, and are 
expected to generate economic benefits exceeding costs beyond one year, are recognised as development costs within intangible assets. 
See note 2.5.3 Research and Development costs.
Amortisation is included within ‘Other operating expenses’ in the Consolidated Statement of Comprehensive Income.
2.6 Investments in subsidiary undertakings
In the company, investments in subsidiary undertakings are carried at cost less any impairment. The investments are reviewed on an 
annual basis to test for any indication of impairment. The investments are eliminated on consolidation.
2.7 Property, plant and equipment
All property, plant and equipment assets are stated at cost less accumulated depreciation and impairment. Depreciation is provided 
on all such assets at rates calculated to write off the cost of each asset less estimated residual value, on a straight-line basis, over its 
estimated useful life, as follows:
— Leasehold improvements   5 years or over the term of the lease, if shorter
— Computer hardware   between 2 and 3 years
— Office equipment, fixtures and fittings  between 2 and 5 years
— Production equipment   between 2 and 3 years
2.8 Impairment of assets
The group assesses at each year end date whether there is any indication that any of its assets have been impaired. If such indication 
exists, the asset’s recoverable amount is estimated and compared to its carrying value.
For goodwill, intangible assets that have an indefinite life and intangible assets not yet available for use, the recoverable amount is 
estimated at each year end date and whenever there is an indication of impairment an impairment loss is recognised for the amount 
by which the asset’s carrying value amount exceeds its recoverable amount. Impairment losses are recognised in the Consolidated 
Statement of Comprehensive Income within ‘Other operating expenses’.
2.9 Financial Instruments
The group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an 
equity instrument in accordance with the substance of the contractual agreement.
The group has used forward foreign exchange contracts in the current financial year to hedge its exposure to currency risk. The group 
monitors its exposure and adopts forward foreign exchange contracts where it deems appropriate.
Financial instruments are recognised on the Statements of Financial Position at fair value when the group becomes a party to the 
contractual provisions of the instrument, with movements reflected in the Consolidated Statement of Comprehensive Income
The group does not use hedge accounting for its forward foreign currency contracts and does not use forward foreign currency 
contracts for speculative purposes.
2.9.1 Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; 
any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the Consolidated Statement of 
Comprehensive Income over the period of the borrowings using the effective interest rate method.
The convertible loan notes are accounted for in accordance with IAS 32 ‘Financial Instruments: presentation’ and split between debt and 
equity based upon the market rate of similar loans not carrying conversion options.
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Notes to the Financial Statements
for the year ended 31 March 2011
2. Summary of significant accounting policies continued
2.9.2 Trade receivables
Trade receivables are stated at their amortised cost as reduced by appropriate allowances for estimated irrecoverable amounts. They are 
recognised on the trade date of the related transactions. Subsequent recoveries of amounts previously written off are credited to the 
Consolidated Statement of Comprehensive Income.
2.9.3 Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held with banks.
2.9.4 Trade payables
Trade payables are stated at their amortised cost. They are recognised on the trade date of the related transactions.
2.10 Share-based payments
Options and warrants are measured at fair value at grant date using the binomial model. The fair value is expensed on a straight line 
basis over the vesting period, based on an estimate of the number of options or warrants that will eventually vest.
Under the group’s share option scheme, share options are granted to directors and selected employees and under the share warrant 
schemes, warrants are granted to selected customers. The options and warrants are expensed in the period over which the share based 
payment vests. A corresponding increase to the share option reserve or share warrant reserve under shareholder’s funds is recognised.
When share options or warrants are exercised, the company issues new shares. The nominal share value from the proceeds received 
are credited to share capital and proceeds received above nominal value, net of attributable transaction costs are credited to the 
share premium when the options or warrants are exercised. When share options or warrants are forfeited, cancelled or expire, the 
corresponding fair value is transferred to the accumulated losses reserve.
The group has no legal or constructive obligation to repurchase or settle the options in cash.
2.11 Pension costs and other post-retirement benefits
The Group operates only defined contribution schemes and pays contributions to publicly or privately administered pension insurance 
plans on a mandatory, contractual or voluntary basis. The group has no further obligations once the contributions have been paid. 
The amount charged to the Consolidated Statement of Comprehensive Income in respect of pension costs and other post-retirement 
benefits is the contributions payable in the period. Differences between contributions payable in the period and contributions actually 
paid are shown as either accruals or prepayments in the Statements of Financial Position.
2.12 Revenue
Revenue comprises the consideration receivable for services provided, software usage fees and royalty income. Revenue is shown net of 
value added tax, returns, rebates and discounts and after eliminating sales within the group.
2.12.1 Sales of services
The group sells design, development and other services relating to the media production and packaging industries. These services are 
provided either on a time and material basis or as a fixed price contract.
Revenue from time and material contracts is recognised as labour hours and direct expenses are incurred, at the contracted rates.
Revenue from fixed price contracts is recognised in accordance with the substance of the contract as services are performed by the 
group and accepted by the customer.
If circumstances arise that may change the original estimates of revenue and costs or extent of progress toward completion, estimates are 
revised. These revisions resulting in increases or decreases in the estimated revenues and costs are reflected in the Consolidated Statement 
of Comprehensive Income in the period in which the circumstances that give rise to the revision become known to management.
2.12.2 Software license fees
Revenue attributable to the use of software products is credited to the Consolidated Statement of Comprehensive Income in line with 
the usage of these products.
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2. Summary of significant accounting policies continued
2.12.3 Royalty income
Under IAS18 royalties are recognised on an accruals basis in accordance with the substance of the relevant agreement. Based on the 
substance of the contract agreements, revenue is recognised to match with estimated sales. Estimates of expected sales are reviewed at 
each year end date.
2.13 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost includes all direct costs incurred and attributable production 
overheads. Net realisable value is based on estimated selling price allowing for all further costs of completion and disposal.
2.14 Leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. 
Payments made under operating leases are recognised in the Consolidated Statement of Comprehensive Income on a straight line basis 
over the term of the lease.
Leases of equipment where the group has substantially all the risks and rewards of ownership are classified as finance leases. Finance 
leases are capitalised at the lease’s commencement at the lower of the fair value of the leased property and the present value of the 
minimum lease payments.
Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance 
outstanding. The corresponding rental obligations, net of finance charges, are included in borrowings. The interest element of the 
finance cost is charged to the Consolidated Statement of Comprehensive Income over the lease period so as to produce a constant 
periodic rate of interest on the remaining balance of the liability for each period. The equipment acquired under finance leases is 
depreciated over the shorter of the useful life of the asset or the lease term.
2.15 Deferred taxation
Deferred tax, including UK corporation tax and foreign tax, is provided in full using the Statement of Financial Position liability method. 
Deferred tax is the future tax consequences of temporary differences between the carrying amounts and tax bases of assets and 
liabilities shown on the consolidated and parent company Statement of Financial Position. Deferred tax assets and liabilities are not 
recognised if they arise in the following situations; the initial recognition of goodwill; or the initial recognition of assets and liabilities 
that affect neither accounting nor taxable profit. The amount of deferred tax provided is based on the expected manner of recovery or 
settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at the year end date.
The group does not recognise deferred tax liabilities, or deferred tax assets, on temporary differences associated with investments in 
subsidiaries, joint ventures and associates as it is not considered probable that the temporary differences will reverse in the foreseeable future. 
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the 
asset can be utilised. The carrying amount of deferred tax assets are reviewed at each year end date and reduced to the extent that it is 
no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.
2.16 Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and 
the group will comply with all attached conditions.
Government grants relating to operating costs are deferred and recognised in the Consolidated Statement of Comprehensive Income 
over the period necessary to match them with the costs they are intended to compensate.
Government grants relating to property, plant and equipment are credited to the cost of the asset and released to the Consolidated 
Statement of Comprehensive Income on a straight line basis over the expected lives of the related assets.
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Notes to the Financial Statements
for the year ended 31 March 2011
2. Summary of significant accounting policies continued
2.17 Exceptional items
Exceptional items are those significant items which are separately disclosed by virtue of their size or incidence to enable a full 
understanding of the group’s financial performance. The transactions giving rise to exceptional items are the gains and losses on 
disposal of operations and the discontinuation of activities, including the decisions not to continue certain development projects.
3. Accounting estimates and judgements
Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of 
future events that are believed to be reasonable under the circumstances.
3.1 Critical accounting estimates and assumptions
The group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal 
the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying 
amounts of assets and liabilities within the next financial year are discussed below.
Goodwill
Goodwill is tested annually for impairment at the year end date. The recoverable amounts of cash generating units have been 
estimated based on value in use calculations. Value in use calculations have been based on a subjective pre-tax discount rate of 8%. No 
impairment loss incurred at this discount rate. Had the discount rate used been 1% greater or lower than estimated, there still would be 
no material impact on impairment.
Financial Instruments
Discounted cash flow analysis is used to determine the fair value of financial instruments that are not traded on the open market. The 
non-traded financial instrument is the convertible loan note. Calculations have been based on a subjective pre-tax discount rate of 
8%. Had the discount rate used been 1% greater or lower than estimated, the fair value would have been decreased by $155,000, or 
increased by $165,000 respectively.
Recognition of deferred tax assets
The recognition of deferred tax assets is based upon whether it is more likely than not that sufficient and suitable taxable profits will be 
available in the future against which the reversal of temporary differences can be deducted. Where the temporary differences related to 
unused tax losses, evidence considered to support the recognition of deferred tax assets include the existence of relevant taxable profits 
in the current and preceding periods and in the period after the reporting date and expectations of profits in the future. Recognition 
therefore involves judgement regarding the future financial performance of the particular legal entity or tax group in which the deferred 
tax asset has been recognised.
Accounting estimates for the useful lives of property, plant and equipment and intangible assets are included within the relevant 
accounting policies above.
3.2 Critical judgements in applying the group’s accounting policies
Operating lease commitments
The group has entered into property leases for its Sheffield and Los Angeles offices. As management have determined that the group 
has not obtained substantially all the risks and rewards of ownership of the property, the lease has been classified as an operating lease 
and accounted for accordingly.
4. Segmental reporting
Business segments
At 31 March 2011, the group is organised on a worldwide basis into two main business segments:
— Software solutions, including development, consultancy and software sales
— Media production and design
These divisions are the basis on which the group reports its segment information. Other group operations comprise of head office 
operations.
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4. Segmental reporting continued
The Segment results are as follows:
 Software Solutions Media Production  Total 
      2011 2010 2011 2010 2011 2010
       $000 $000 $000 $000 $000 $000
Total revenue    8,134 7,329 8,049 11,458 16,183 18,787
Inter-segment revenue   — (205)  (2,426) (3,526) (2,426) (3,731)
Revenue     8,134 7,124 5,623 7,932 13,757 15,056
Segment result    2,787 1,811 274 (35) 3,061 1,776
Unallocated corporate expense         (1,715) (1,815)
operating profit/(loss)       1,346 (39)
Finance income        — 1
Finance cost            (835) (830)
Profit/(loss) before taxation       511 (868)
Tax on profit/(loss)            484 (4)
Profit/(loss) for the year           995 (872)
Other segmental information included in the Consolidated Statement of Comprehensive Income is as follows:
 Software Solutions Media Production Group operations
      2011 2010 2011 2010 2011 2010
       $000 $000 $000 $000 $000 $000
Depreciation     52 55 222 351 150 13
Amortisation    396 240 92 114 9 —
Impairment losses    — 91 — 769 — —
Segment assets consist primarily of property, plant and equipment, intangible assets, trade and other receivables and cash and cash 
equivalents. Segment liabilities comprise operating liabilities. Unallocated liabilities comprise items such as borrowings.
Capital expenditure includes additions to property, plant and equipment and intangible assets, including additions resulting from 
acquisitions through business combinations.
 Software Solutions Media Production Total
      2011 2010 2011 2010 2011 2010
       $000 $000 $000 $000 $000 $000
Assets     7,371 7,259 2,205 1,827 9,576 9,086
Unallocated corporate assets       3,635 2,628
Consolidated total assets           13,211 11,714
Liabilities     1,184 1,259 1,616 2,726 2,800 3,985
Unallocated corporate liabilities       6,419 6,085
Consolidated total liabilities           9,219 10,070
Capital Expenditure    2,018 1,158 492 313 2,513 1,471
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Notes to the Financial Statements
for the year ended 31 March 2011
4. Segmental reporting continued
Geographical segments
The Group’s operating divisions operate in two principal geographical areas of the world, the UK and the US. All European operations 
are run from the UK office.
   Additions to
   property, plant and
   equipment and 
 Revenue Total assets intangible assets
      2011 2010 2011 2010 2011 2010
       $000 $000 $000 $000 $000 $000
United Kingdom    68 140 10,973 8,144 2,017 1,152
US     13,689 14,916 2,238 3,570 496 319
       13,757 15,056 13,211 11,714 2,513 1,471
5. Revenue
The group’s revenue comprises:
          2011 2010
           $000 $000
Software Solutions        8,134 7,124
Media Production        5,623 7,932
           13,757 15,056
Continuing operations       13,757 15,056
Discontinued operations       — —
           13,757 15,056
Revenue from services       7,811 9,439
Royalty income and software license fees      5,946 5,617
           13,757 15,056
Major customers
The group currently has one major customer representing 92% (2010:92%) of the group’s revenues. These revenues are generated from 
both of the group’s operating segments. The revenues are as follows:
          2011 2010
           $000 $000
Major customer        12,676 13,786
Other customers        1,081 1,270
           13,757 15,056
6. other operating income
          2011 2010
          $000 $000
Government grants         119 177
Sales of own shares        16 —
          135 177
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7. Finance income and costs
          2011 2010
           $000 $000
Finance income:
Interest on short-term deposits       — 1
Finance income          — 1
Finance costs:
Interest on bank overdraft       (5) (25)
Interest on borrowings       (530) (515)
Exchange losses on borrowings       (300) (290)
Finance costs         (835) (830)
8. operating profit/(loss)
Group operating profit/ (loss) for the year is stated after charging/(crediting) the following:
          2011 2010
           $000 $000
Other exchange gains or losses       (26) (2)
Staff costs         6,541 7,164
Depreciation        424 419
Amortisation of other intangible assets       497 354
Exceptional impairment losses on other intangible assets (note 14)     — 860
Research and non-capitalised development costs       123 170
Operating lease expense       634 785
Auditor’s remuneration       88 77
Other expenses        1,877 1,676
Other operating expenses       10,158 11,503
9. Auditor’s remuneration
          2011 2010
           $000 $000
Fees payable to group’s auditor for the audit of the group’s annual financial statements    36 34
The audit of the group’s subsidiaries, pursuant to legislation      40 35
Tax services         11 8
All other services        1 —
           88 77
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Notes to the Financial Statements
for the year ended 31 March 2011
10. Employees including directors
The average number of employees (including executive directors) was:
          2011 2010
           No. No.
Product design         88 82
Sales and marketing         6 7
Administration         10 10
           104 99
Their aggregate remuneration comprised:
          2011 2010
           $000 $000
Wages and salaries         5,739 6,254
Social security costs         681 694
Other pension costs         65 59
Share-based payments       56 157
           6,541 7,164
The group pension arrangements are operated through a defined contribution scheme.
Compensation of key management personnel (including directors)
          2011 2010
           $000 $000
Short-term employee benefits       1,485 1,571
Post-employment benefits       16 13
Share-based payments       39 127
           1,540 1,711
Directors’ remuneration for the year to 31 March 2011 is:
          2011 2010
      Salary Bonus Benefits Pension Total Total
       $000 $000 $000 $000 $000 $000
Dr Stuart A Green    214 65 3 — 282 263
Helen P Gilder    149 43 3 16 211 199
Gordon Doran*    220 74 16 —  310 214
Roger D Jeynes†    36 — — — 36 —
James A Livingston‡    33 — — — 33 27
Ian C Stewart§    17 — — — 17 24
Dr Christopher HB Honeyborne^   3 —  — — 3 32
Matthew P Taylor¶    — — — — — 7
       672 182 22 16 892 766
* Gordon Doran was appointed as a director on 28 July 2009.
†  Roger Jeynes was appointed on 28 April 2010.
‡ James Livingston was appointed 12 June 2009.
§  Ian Stewart retired 31 December 2010.
^ Dr Christopher HB Honeyborne retired on 28 April 2010.
¶  Matthew Taylor retired on 12 June 2009.
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10. Employees including directors continued
Two directors (2010: two) serving during the year have been members of money purchase pension schemes into which the company 
contributes.
The highest paid director received emoluments and benefits as follows:
          2011 2010
          $000 $000
Emoluments        310 257
Money purchase pension contributions      — 6
           310 263
11. Income tax
          2011 2010
           $000 $000
Current tax:
UK corporation tax
— Current tax on income for the year      — —
— Adjustments in respect of prior years      — (3)
Foreign tax         (2) (1)
Total current tax        (2) (4)
Deferred tax:
— Current year (note 17)       486 —
Total deferred tax        486 —
Tax credited/(charged)        484 (4)
Corporation tax is calculated at 28% (2010: 28%) of the estimated assessable profit for the year.
Tax charge for the year
The tax charge for the year can be reconciled to the profit/(loss) for the year as follows:
          2011 2010
           $000 $000
Profit/(loss) before tax       511 (868)
Tax calculated at standard rate of corporation tax of 28% (2010: 28%)    143 (243)
Depreciation in excess of capital allowances      9 22
Capital allowances in excess of depreciation      (26) (68)
Disallowable items        25 (48)
Additional R&D expenditure relief       (164) —
(Profits)/losses carried forward       11 333
Deferred tax (note 17)       486 —
Tax credited/(charged)       484 (4)
Tax losses carried forward 
The group has tax losses carried forward of approximately $28m (2010: $28m), of which $1.8m (2010: nil) has been recognised at a 
rate of 26% as a deferred tax asset for the year. The balance of tax losses remain unrecognised at the balance sheet date.
12. Dividends
There were no dividends paid or proposed.
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Notes to the Financial Statements
for the year ended 31 March 2011
13. Profit/(loss) per share
Earnings per share is calculated by dividing the profit/ (loss) attributable to equity holders of the company by the weighted average 
number of ordinary shares in issue during the year.
   Basic and Diluted 
          2011 2010
          $000 $000
Profit/(loss) for the financial year       995 (872)
          2011 2010
          Number of  Number of
Weighted average number of shares for basic & diluted profit/(loss) per share  shares shares
Basic         23,182,299 21,326,421
Effect of dilutive potential ordinary shares:
Convertible loan note       7,263,590 7,263,590
Share options        2,915,238 3,134,565
Share warrants        1,719,998 525,000
Diluted             35,081,125 32,249,576
14. Exceptional items
During the year ended 31 March 2010 changes in market expectations led to a management decision not to continue certain 
development projects acquired through the purchase of Scope Seven LLC. The amount of this impairment was $797,000 and this is 
included within ‘Exceptional impairment losses on other intangible assets’, the balance being in respect of cancelled patents (note 16).
This item is considered exceptional by virtue of its size and omission of its disclosure would not give a fair presentation of the group’s 
financial position and performance.
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15. Property, plant and equipment
          office
        Leasehold  equipment, 
       Production  improve- Computer fixtures &
       equipment ments hardware fittings Total
Group      $000 $000 $000 $000 $000
Cost 
Opening cost at 1 April 2009    264 321 1,325 504 2,414
Additions      19 — 191 5 215
Disposals      — — (209) (51) (260)
Opening cost at 1 April 2010    283 321 1,307 458 2,369
Additions      26 23 362 4 415
Disposals      (9) (189) (284) (81) (563)
Closing cost at 31 March 2011    300 155 1,385 381 2,221
Accumulated depreciation/impairment 
Opening balance at 1 April 2009    91 118 1,059 383 1,651
Depreciation     98 75 200 46 419
Disposals      — — (208) (51) (259)
Opening balance at 1 April 2010    189 193 1,051 378 1,811
Depreciation     79 78 218 49 424
Disposals      (9) (189) (284) (81) (563)
Closing balance at 31 March 2011   259 82 985 346 1,672
Opening carrying value at 1 April 2009   173 203 266 121 763
Opening carrying value at 1 April 2010   94 128 256 80 558
Closing carrying value at 31 March 2011   41 73 400 35 549
Depreciation expense of $424,000 (2010: $419,000) is included in ‘Other operating expenses’.
Property, plant and equipment for the group includes the following amounts where the group is a lessee under finance leases:
          office
          equipment, 
        Production  Computer fixtures &
        equipment hardware  fittings Total
At 31 March 2011       $000 $000 $000 $000
Cost — capitalised finance leases     145 449 100 694
Accumulated depreciation     (123) (146) (83) (352)
Net book value      22 303 17 342
          Office
          equipment, 
        Production  Computer fixtures &
        equipment hardware  fittings Total
At 31 March 2010       $000 $000 $000 $000
Cost — capitalised finance leases     249 332 100 681
Accumulated depreciation     (78) (158) (60) (296)
Net book value      171 174 40 385
The group leases various equipment under non-cancellable finance lease agreements. The lease terms are three years.
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Notes to the Financial Statements
for the year ended 31 March 2011
15. Property, plant and equipment continued
          office
          equipment, 
        Leasehold  Computer fixtures &
        improvements hardware  fittings Total
Company       $000 $000 $000 $000
Cost 
Opening cost at 1 April 2009     — 396 318 714
Additions       128 29 54 211
Opening cost at 1 April 2010     128 425 372 925
Additions       — — 3 3
Closing cost at 31 March 2011     128 425 375 928
Accumulated depreciation/impairment 
Opening balance at 1 April 2009     — 396 284 680
Depreciation      — — 13 13
Opening balance at 1 April 2010     — 396 297 693
Depreciation      73 29 48 150
Closing balance at 31 March 2011    73 425 345 843
Opening carrying value at 1 April 2009    — — 34 34
Opening carrying value at 1 April 2010    128 29 75 232
Closing carrying value at 31 March 2011    55 — 30 85
Property, plant and equipment for the company includes the following amounts where a subsidiary company is the lessee under  
finance leases:
           office
          equipment,
         Computer fixtures &
         hardware fittings Total
At 31 March 2011        $000 $000 $000
Cost — capitalised finance leases      — 100 100
Accumulated depreciation      — (83) (83)
Net book value       — 17 17
           Office
          equipment,
         Computer fixtures &
         hardware fittings Total
At 31 March 2010        $000 $000 $000
Cost — capitalised finance leases      149 100 249
Accumulated depreciation      (128) (60) (188)
Net book value       21 40 61
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16. Intangible assets
        Development  Patents and Computer
       Goodwill costs  trademarks software Total
Group      $000 $000 $000 $000 $000
Cost
Opening cost at 1 April 2009    16,610 3,350 593 388 20,941
Additions      — 1,035 102 119 1,256
Disposals      — — — (34) (34)
Opening cost at 1 April 2010    16,610 4,385 695 473 22,163
Additions      — 1,911 92 95 2,098
Disposals      — (28)  -  (72) (100)
Derecognise     — — (233) — (233)
Closing cost at 31 March 2011    16,610 6,268 554 496 23,928
Accumulated amortisation/impairment
Opening balance at 1 April 2009    12,620 1,049 172 238 14,079
Amortisation     — 222 20 112 354
Impairment loss (note 8)    — 797 63 — 860
Disposals      — — — (33) (33)
Opening balance at 1 April 2010    12,620 2,068 255 317 15,260
Amortisation     — 355 29 113 497
Disposals      — (28) — (70) (98)
Derecognise     — — (211)  -  (211)
Closing balance at 31 March 2011   12,620 2,395 73 360 15,448
Opening carrying value at 1 April 2009   3,990 2,301 421 150 6,862
Opening carrying value at 1 April 2010   3,990 2,317 440 156 6,903
Closing carrying value at 31 March 2011   3,990 3,873 481 136 8,480
Development costs are internally generated software development costs. All other intangible assets are acquired externally.
The remaining life of the majority of development costs is 11 years.
Following the decision by management not to renew or pursue some of the company’s patent applications, $232,575 of previously 
capitalised patents costs were derecognised during the year. Of these costs $210,804 was fully impaired.
During the year ended 31 March 2010 changes in market expectations led to a management decision not to continue certain 
development projects acquired through the purchase of Scope Seven LLC. The amount of impairment was $797,000.
Amortisation and impairment costs are included within ‘Other operating expenses’ in the Consolidated Statement of Comprehensive 
Income.
Computer software includes the following amounts where the group is a lessee under finance leases:
          2011 2010
           $000 $000
Cost — capitalised finance leases       77 133
Accumulated amortisation       (55) (50)
Net book value        22 83
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Notes to the Financial Statements
for the year ended 31 March 2011
16. Intangible assets continued
          Computer 
         Goodwill software Total
Company        $000 $000 $000
Cost
Opening cost at 1 April 2009      10,960 57 11,017
Additions        — 8 8
Opening cost at 1 April 2010      10,960 65 11,025
Additions        — — —
Closing cost at 31 March 2011      10,960 65 11,025
Accumulated amortisation/impairment
Opening balance at 1 April 2009      8,679 56 8,735
Amortisation       — — —
Opening balance at 1 April 2010      8,679 56 8,735
Amortisation       — 9 9
Closing balance at 31 March 2011     8,679 65 8,744
Opening carrying value at 1 April 2009     2,281 1 2,282
Opening carrying value at 1 April 2010     2,281 9 2,290
Closing carrying value at 31 March 2011     2,281 — 2,281
Computer software includes the following amounts where a subsidiary of the company is the lessee under finance leases:
          2011 2010
           $000 $000
Cost — capitalised finance leases        — 54
Accumulated amortisation       — (47)
Net book value        — 7
There were no assets held under finance leases at 31 March 2011.
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16. Intangible assets continued
Impairment tests for goodwill
Goodwill is subject to annual impairment testing, or more frequently if there are indications that goodwill might be impaired. Goodwill 
is allocated to the group’s cash generating units (CGUs) identified according to the business segment. The aggregation of assets for 
identifying the cash generating units has not changed since the prior year.
The recoverable amount of a CGU is its value in use. In calculating the value in use the group used a discount rate of 8% (2010: 8%). 
The carrying amount of goodwill is allocated as follows:
 Software Solutions Media Production Group
      2011 2010 2011 2010 2011 2010
      $000 $000 $000 $000 $000 $000
      2,281 2,281 1,709 1,709 3,990 3,990
Following the impairment tests, goodwill was considered not to be impaired.
Management has based its pre-tax cash flow projections on financial budgets approved by management covering a three year period. 
Cash flows after the three year period have been extrapolated based on estimated growth rates disclosed below. Management 
determined the budgets on past performance and its expectations of market development.
          Software Media
          Solutions Production
Discount rate        8% 8%
Growth rate        10% 10%
17. Deferred income tax
  Group Company
        2011 2010 2011 2010
         $000 $000 $000 $000
Deferred tax assets comprise:
Unused tax losses      486 — 92 —
The gross movement on the deferred income tax account is as follows:
  Group Company
        2011 2010 2011 2010
         $000 $000 $000 $000
At 1 April       — — — —
Credited to the statement of comprehensive income   486 — 92 —
At 31 March       486 — 92 —
Tax losses carried forward
The group has tax losses carried forward of approximately $28m (2010: $28m), of which $1.8m (2010: nil) has been recognised at a 
rate of 26% as a deferred tax asset for the year. The balance of tax losses remain unrecognised at the balance sheet date.
18. Inventories
   Group
          2011 2010
          $000 $000
Products in the course of development      80 365
During the year ended 31 March 2011 $365,000 was recognised as an expense within ‘cost of sales’.
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Notes to the Financial Statements
for the year ended 31 March 2011
19. Trade and other receivables
  Group Company
        2011 2010 2011 2010
         $000 $000 $000 $000
Trade receivables      1,436 2,247 1 1
Less: provision for impairment of trade receivables   (6) (65) (1) (1)
Trade receivables — net     1,430 2,182 — — 
Amounts owed by subsidiary undertakings    — — 21,583 18,193
VAT       31 22 — —
Other debtors      278 234 — 3
Prepayments and accrued income     1,277 229 221 157
         3,016 2,667 21,804 18,353
The fair values of trade and other receivables equal their carrying amounts.
As of 31 March 2011, trade receivables of $303,000 (2010: $156,000) were overdue. The ageing analysis of these trade receivables is 
as follows:
  Group Company
        2011 2010 2011 2010
         $000 $000 $000 $000
Less than 3 months      146 129 — —
3 to 6 months      50 25 — —
7 to 12 months      96 1 — —
Over 12 months      11 1 1 1
         303 156 1 1
The carrying amounts of trade and other receivables are denominated in the following currencies:
  Group Company
        2011 2010 2011 2010
         $000 $000 $000 $000
Pound sterling      443 200 221 160
US Dollar       2,570 2,465 21,583 18,193
Euros       3 2 — —
         3,016 2,667 21,804 18,353
Provision for impairment of trade receivables:
   Group
          2011 2010
           $000 $000
At 1 April          65 117
Provision for receivables impairment      — 5
Receivables written off in the year as uncollectible      (59) (47)
Unused amounts reversed       — (10)
At 31 March        6 65
The other classes within trade and other receivables do not contain impaired assets.
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19. Trade and other receivables continued
The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables, other debtors and cash and cash 
equivalents. The group does not hold any collateral as security.
The directors believe that a reasonable provision has been made for outstanding amounts or values impaired and the remaining 
unprovided amounts are considered to be recoverable.
The amounts owed by the subsidiary undertakings to the parent company, have no payment terms and bear no interest, but they are 
considered to be recoverable in the future.
20. Notes to the cash flow statement
20.1 Significant non-cash transactions
During the year the group acquired property, plant and equipment and computer software with a cost of $510,000 (2010:$334,000) of 
which $288,000 (2010: $120,000) was acquired by the means of finance leases.
20.2 Cash and cash equivalents
Cash and cash equivalents consist of cash on hand and balances with banks. Cash and cash equivalents included in the cash flow 
statement comprise the following consolidated and parent company statement of financial position amounts.
  Group Company
        2011 2010 2011 2010
        $000 $000 $000 $000
Cash on hand and balances with banks    600 1,221 (719) 8
The fair value of the cash and cash equivalents are considered to be at their book value.
21. Share capital and reserves
Called up share capital
          2011 2010
          $000 $000
Allotted, called-up and fully paid
23,846,255 ordinary shares of 15p each      5,127 4,573
Reconciliation of the number of shares outstanding:
Opening balance        21,326,421 21,326,421
Shares issued        2,148,642 —
Share options exercised       371,192 —
Closing balance        23,846,255 21,326,421
During the year the group purchased 298,232 (2010: 473,500) of its own shares through ZOO Employee Share Trust Limited at an 
average price of $0.42 (24.1p) per share. The total cost of the purchase was $124,374 (2010: $71,823).
On 25 June 2010 the company allotted and issued 2,148,642 new ordinary shares of $0.23 (15p) each in the company, at a subscription 
price of $0.60 (40p) per share. 
Transactions after the reporting period are shown in note 25.
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Notes to the Financial Statements
for the year ended 31 March 2011
21. Share capital and reserves continued
Reserves
The following describes the nature and purpose of each reserve within owner’s equity:
Reserve  Description and purpose 
Share premium reserve Represents the amount subscribed for share capital in excess of the nominal value.
Accumulative losses Cumulative net losses recognised in the Consolidated Statement of Comprehensive Income. 
Foreign exchange translation reserve Cumulative exchange differences resulting from translation of foreign operations into the 
 reporting currency.
Convertible loan note reserve Represents the equity element of the Convertible loan note.
Share option reserve Cumulative cost of share options issued to employees.
Share warrant reserve Cumulative cost of share warrants issued to customers.
Other reserves Created as part of the reverse takeover between Kazoo3D plc and ZOO Media Corporation Ltd  
 in 2001.
22. Borrowings
  Group Company
        2011 2010 2011 2010
        $000 $000 $000 $000
Non-current
Amounts owed to subsidiary undertakings    — — 9,701 9,701
6% Unsecured convertible loan note stock    — 5,054 — 5,054
Finance lease liabilities     191 84 — —
         191 5,138 9,701 14,755
Current
6% Unsecured convertible loan note stock    5,555 — 5,555 —
Finance lease liabilities     154 169 — —
         5,709 169 5,555 —
Total borrowings      5,900 5,307 15,256 14,755
On 27 September 2006 the Group issued $5,062,000 6% Unsecured convertible loan note stock which matures on 31 October 2011. The 
underlying value of the loan stock is £3,541,000. The loan stock holder is entitled, at any time after the first anniversary, to convert all or part of 
the loan stock into fully paid ordinary shares on the basis of 1 Ordinary share for every $0.6969 (£0.4875) of principal amount of loan stock. 
The convertible loan stock has been accounted for in accordance with IAS 32 (Financial instruments: Presentation) and split between 
debt and equity based upon the market rate of similar loan stock not carrying conversion options, estimated to be 8%. The fair value of 
the convertible loan note is considered to be the carrying value.
Following the agreement with the loan note holders in August 2011 to extend 50 per cent of the loan note instrument for a further two 
years, 50 per cent of the liability, currently shown in the Current borrowings, in the Statement of Financial position will move into Non-
current liabilities. The remaining 50 per cent will convert into equity.
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22. Borrowings continued
Finance lease liabilities
Finance lease liabilities are payable as follows:
         Future   Present value
         minimum   of minimum
         lease   lease
         payments Interest payments
At 31 March 2011       $000 $000 $000
Less than one year       187 (33) 154
Between one and five years      209 (18) 191
More than five years       — — —
         396 (51) 345
         Restated Restated Restated
         Future   Present value
         minimum   of minimum
         lease   lease
         payments Interest payments
At 31 March 2010       $000 $000 $000
Less than one year       179 (24) 155
Between one and five years      108 (10) 98
More than five years       — — —
         287 (34) 253
The lease periods of the finance leases range from between 3 and 4 years, with options to purchase the asset at the end of the term.
The year ended 31 March 2010 has been restated to show interest and present value separately.
23. Trade and other payables
  Group Company
        2011 2010 2011 2010
        $000 $000 $000 $000
Trade creditors      1,013 1,894 301 207
Amounts owed to subsidiary undertakings    — — 38 13
VAT       — — 33 —
Accrued expenses      2,306 2,869 527 850
         3,319 4,763 899 1,070
The fair values of trade and other payables equal their carrying amounts.
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Notes to the Financial Statements
for the year ended 31 March 2011
24. Commitments
Capital commitments
The group had no capital commitments at the 31 March 2011.
operating lease commitments
The group has a number of operating leases, as a lessee, for equipment and premises under non-cancellable agreements. The lease 
terms are between 3 and 6 years, and the majority of lease agreements are renewable at the end of the lease period at market rate. The 
lease expenditure charged to the Consolidated Statement of Comprehensive Income during the year is disclosed in note 8. The lease 
expenditure on premises is charged to the Consolidated Statement of Comprehensive Income on an average annual charge over the life 
of the lease.
The future minimum lease payments under non-cancellable operating leases are as follows:
          2011 2010
          $000 $000
Within one year        488 552
From one to five years       185 380
After five years        — —
          673 932
The group does not sub-lease any of its leased premises.
25. Events after the reporting period
On 10 June 2011 36,155 shares were issued following the exercise of employee share options.
On 14 June 2011 the group entered into an agreement to extend the lease on its US offices. The lease has been extended to December 
2016. The total commitment of the five year period is $2.6m.
On 10 August 2011 the company announced that agreement had been reached with the holders of the $5.6m convertible loan note 
to convert 50% of their holding into shares at a price of 40p and for the balance of 50% to remain within the loan note instrument 
for a further two years at a coupon of 7.5% and a conversion price of 48p. The loan note conversion into equity results in the issue of 
4,426,250 shares and the placing results in a further 4,252,500 shares. 
Dr Stuart A Green held a $549,000 (2010: $519,000) interest in 6% unsecured convertible loan stock at 31 March 2011. The 
underlying value of the interest in the convertible loan stock is £342,000. As a result of the above agreement, 50% of this loan stock 
has been converted into shares. 
On 10 August 2011 it was further announced that there has been a successful placing of shares raising $2.8m at a price of 40p in order 
to fund working capital in areas of growth. Stuart A Green, CEO, agreed to subscribe $160,000 to the placing.
On 16 August 2011 99,500 shares were issued following the exercise of employee share options.
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26. Related parties
Subsidiaries
The parent company has investments in the following subsidiary undertakings:
Subsidiary Country of 
undertakings incorporation Principle activity Holding %
ZOO Digital Limited UK Technology development 2 ordinary shares 100
Scope Seven Limited UK Dormant 100 ordinary shares 100
ZOOtech Limited UK Dormant 95,714 ordinary shares 100
ZOO Digital Inc. USA Sale & distribution technology products 10,000 shares of  100
    common stock
ZOO Employee Share Trust Limited UK Employee share scheme 2 ordinary shares 100
Scope Seven LLC USA Media production and design and  100 shares of 100*
   development of interactive DVDs common stock 
* Scope Seven LLC is indirectly held by ZOO Digital Group plc through ZOO Digital Inc.
Transactions between ZOO Digital Group plc and its subsidiaries, which are related parties, have been eliminated on consolidation.
Subsidiary undertakings
   Company
          2011 2010
          $000 $000
Cost         11,797 11,797
Provision for impairment       2,097 2,097
Net book value        9,700 9,700
On 31 March 2010 the group ceased the activities of Scope Seven Limited and transferred the trade and assets into ZOO Digital  
Group plc.
Key Management personnel
The details of key management remuneration is disclosed in note 10, Employees including directors.
Related Party Transactions
   Company
          2011 2010
          $000 $000
Sales of services to subsidiaries:
Administration services       2,975 3,441
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Notes to the Financial Statements
for the year ended 31 March 2011
26. Related parties continued
Amounts owed by subsidiary undertakings
   Company
          2011 2010
          $000 $000
ZOO Digital Limited        16,068 14,097
Scope Seven LLC        5,426 3,816
ZOO Digital Inc.        89 280
          21,583 18,193
Amounts owed to subsidiary undertakings
   Company
          2011 2010
          $000 $000
ZOO Employee Share Trust Limited       38 13
27. Share-based payments
Employee share option schemes
Share options have been granted under the following schemes to subscribe for ordinary shares of the company. Movements in the 
number of options, under each of the schemes, and their related weighted average exercise price are as follows:
  2011 2010
         Weighted   Weighted
         average   average
         exercise   exercise
        options price Options price
Zoo Digital Group plc EMI scheme    No. $ No. $
Outstanding at the beginning of the year    995,647 0.21 995,647 0.21
Granted during the year     47,334 0.76 — —
Exercised during the year     (60,366) 0.21 — —
Surrendered during the year     — — — —
Outstanding at the end of the year     982,615 0.24 995,647 0.21
Exercisable at the end of the year     696,953 0.21 398,259 0.21
The underlying weighted average exercise price for the share under option at 31 March 2011 was 17p (2010:15p)
Zoo Digital Group plc Unapproved
Outstanding at the beginning of the year    2,138,918 0.21 2,138,918 0.21
Granted during the year     45,000 0.69 — —
Exercised during the year     (310,826) 0.21 — —
Surrendered during the year     (172,140) 0.21 — —
Outstanding at the end of the year     1,700,952 0.22 2,138,918 0.21
Exercisable at the end of the year     1,395,820 0.21 855,567 0.21
The underlying weighted average exercise price for the share under option at 31 March 2011 was 17p (2010:15p).
Under these schemes the percentage of shares that can be exercised is staggered over the exercise period with typically 40% exercisable 
after the first year and a further 30% in each of the following two years.
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27. Share-based payments continued
Out of the 2,683,567 outstanding options (2010: 3,134,565 options), 2,092,773 were exercisable (2010: 1,253,826). 371,192 were 
exercised during the year ended 31 March 2011 (2010: nil). 
Share options outstanding at the end of the year have the following expiry dates and exercise prices
          Exercise  Exercise
        options  price price
Scheme        No. Expiry date $ £
ZOO Digital Group plc EMI scheme     935,281  13 Oct 2018   0.21   0.15 
ZOO Digital Group plc EMI scheme     47,334  30 Nov 2020   0.76   0.535 
ZOO Digital Group plc Unapproved     1,655,952  13 Oct 2018   0.21   0.15 
ZOO Digital Group plc Unapproved     30,000  27 Jun 2020   0.65   0.43 
ZOO Digital Group plc Unapproved     15,000  30 Nov 2020   0.76   0.535 
Outstanding at the end of the year     2,683,567
In arriving at the fair value, each option grant has been valued separately using the binomial model and the resulting fair value is 
expensed over the vesting period. The following table lists the range of assumptions used in the model:
         2008 Jun 2010 Dec 2010
Expected Volatility (%)      100 73 76
Risk-free Interest rate (%)       4.49   2.65   2.13 
Expected life of option (years)      5 5 5
Expected dividends       none none none
Volatility has been estimated by taking the historical volatility in the company’s share price over a three year period up to the date of 
grant of the options. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of 
non-transferability, exercise restrictions and behavioural considerations.
Share warrants
Share warrants have been granted under the following schemes to subscribe for ordinary shares of the company. 
Scheme 1
Under this scheme the percentage of shares that can be exercised is staggered over the exercise period based on cumulative cash 
received from the Warrant holder.
  2011 2010
         Weighted   Weighted
         average   average
         exercise   exercise
        options price Options price
Share Warrants      No. $ No. $
Outstanding at the beginning of the year    525,000 0.21 525,000 0.21
Granted during the year     — — — —
Outstanding at the end of the year     525,000 0.21 525,000 0.21
Exercisable at the end of the year     375,000 0.21 250,000 0.21
Out of the 525,000 outstanding warrants (2010: 525,000), 375,000 were exercisable (2010: 250,000). No warrants have been 
exercised since grant. The share warrants outstanding at the end of the year have an expiry date of 15 August 2013 and an exercise 
price of $0.21 (15p).
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our Financials
Notes to the Financial Statements
for the year ended 31 March 2011
27. Share-based payments continued
Scheme 2
Under this scheme the percentage of shares that can be exercised is staggered over the exercise period based on a minimum level of 
new sales generated in any 12 month rolling period through the Warrant holder.
  2011 2010
         Weighted   Weighted
         average   average
         exercise   exercise
        options price Options price
Share Warrants      No. $ No. $
Outstanding at the beginning of the year    — — — —
Granted during the year     2,148,642 0.77 — —
Outstanding at the end of the year     2,148,642 0.77 — —
Exercisable at the end of the year     — — — —
Out of the 2,148,642 outstanding warrants (2010: nil), no warrants were exercisable at the 31 March 2011 (2010: nil). No warrants 
have been exercised in 2011 or 2010. The share warrants outstanding at the end of the year have an expiry date of 31 July 2013 and an 
exercise price of $0.77 (50p)
In arriving at the fair value, the share warrants have been valued using the binomial model and the resulting fair value is expensed over 
the vesting period. The following table lists the range of assumptions used in the model:
          Scheme 1 Scheme 2
Expected Volatility (%)       100 71
Risk-free Interest rate (%)       4.00  0.67 
Expected life of option (years)       2  1.50 
Expected dividends        None None
Volatility has been estimated by taking the historical volatility in the company’s share price over a three year period up to the date of 
grant of the warrants. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of 
non-transferability, exercise restrictions and behavioural considerations.
Share-based payments have had the following impact on the group’s profit/ (loss) for the year:
          2011 2010
          $000 $000
Total expense/recognised from share option transactions     56 157
Total expense/recognised from share warrant transactions     140 12
Share-based payment liability appears in the statement of financial position under:
          2011 2010
          $000 $000
Share option reserve        278 267
Warrant reserve        190 50
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our Financials Our Governance Our Performance Our Business
28. Financial instruments
The group’s financial instruments comprise cash and liquid resources, a long term convertible loan, and various items, such as trade 
receivables and trade payables that arise directly from its operations. The main purpose of these financial instruments is to provide 
working capital for the group’s operations.
Categories of financial instruments
  Group Company
        2011 2010 2011 2010
        $000 $000 $000 $000
Loans and receivables
Trade and other receivables excluding pre-payments
(1) 
(note 19)   2,673 2,182 — —
Amounts owed by subsidiary undertakings (note 19)   — — 21,583 18,193
Cash and cash equivalents     600 1,221 (719) 8
Total       3,273 3,403 20,864 18,201
 
  Group Company
        2011 2010 2011 2010
        $000 $000 $000 $000
other financial liabilities at amortised cost
Finance lease liabilities (note 22)     345 253 — —
Amounts owed to subsidiary undertakings (note 22)   — — 9,701 9,701
6% Unsecured convertible loan stock    5,555 5,054 5,555 5,054
Trade and other payables (note 23)     3,319 4,763 899 1,070
Total       9,219 10,070 16,155 15,825
(1) 
Pre-payments are excluded from the trade and other receivables balance, as this analysis is required only for financial instruments
Market Risk
Foreign currency risk
The main risks arising from the group’s financial instruments are from foreign currency risk.
The group includes subsidiaries operating in both the UK and USA. The majority of the group’ transactions are denominated in US 
dollars, however the costs arising from the UK subsidiaries are denominated in pound sterling therefore exposing it to a currency risk of 
fluctuations in the pound sterling/US Dollar exchange rate. During the year ended 31 March 2011 there was less volatility in the pound 
sterling/US Dollar rate than in the previous years with the rate peaking at 0.7023 and falling to a low of 0.6097, with an average rate 
of 0.6424. If the US Dollar had remained at its highest level throughout the full year the group would have shown a post-tax profit of 
$514,000 (2010: Loss $230,000), if US Dollar had been at its lowest level throughout the full year the group would have shown a post-
tax loss of $863,000 (2010: Loss $1.3m) and if the US Dollar had remained at the average rate throughout the year the post-tax loss 
would have been $334,000 (2010: Loss $894,000).
Transactions between the company and its subsidiaries are in US Dollars, however the company is exposed to exchange rate fluctuations 
due to the majority of its costs being denominated in pound sterling and through the revaluation of the company’s pound sterling 
creditors.
The main exposure for the group and the company to fluctuation in the pound sterling/US dollar rate is through the Convertible loan 
note creditor which is denominated in pound sterling. The value of the loan is translated at the year end exchange rate.
To mitigate the exposure to fluctuations in pound sterling/US dollar exchange rate the group entered into four forward foreign currency 
exchange contracts during the year to the value of $750,000 (2010: nil). No forward exchange contracts were outstanding at 31 March 
2011 (2010: nil). The group does not apply hedge accounting to its financial statements, and therefore accounts for contracts at their 
fair value at the balance sheet date.
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Notes to the Financial Statements
for the year ended 31 March 2011
28. Financial instruments continued
At 31 March 2011 the aggregate amount of profit during the year from the forward currency exchange contracts was $18,000  
(2010: nil).
The pound sterling/US dollar exchange rate at the 31 March 2011 was 0.6228 (2010: 06589)
Interest rate risk
In September 2006 the company issued $5,062,000 (£3,541,000) Unsecured convertible redeemable loan stock, which matures on  
31 October 2011. The loan carries a fixed interest rate of 6%. The group and company consider the interest rate risk on the loan to  
be minimal as the rate is fixed. The company also has access to an overdraft facility of $800,000 through its bank, which carries an 
interest rate of 2.75% over the bank’s base rate.
Liquidity risk
Liquidity risk is the risk that the group and company will not be able to meet their financial obligations as they fall due. Management monitors 
rolling forecasts of the group’ s cash and cash equivalents on the basis of expected cash flows, reducing its liquidity risk through management 
of bank accounts, trade debtors and trade creditors, by utilising the availability of finance leases and through controls on expenditure. The 
majority of convertible loan stock is owned by major shareholders of the company.
The tables below analyse the financial liabilities which will be settled on a net basis into relevant maturity groupings based on the 
remaining period at the year end to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted 
cash flows.
        Less than  Between 1 Between 2 over
Group       1 year and 2 years and 5 years 5 years
At 31 March 2011      $000 $000 $000 $000
Borrowings       5,555 — — —
Finance lease liabilities     154 134 57 —
Trade and other payables     3,319 — — —
        Less than  Between 1 Between 2 Over
        1 year and 2 years and 5 years 5 years
At 31 March 2010      $000 $000 $000 $000
Borrowings       — 5,054 — —
Finance lease liabilities     154 66 33 —
Trade and other payables     4,763 — — —
        Less than  Between 1 Between 2 over
Company       1 year and 2 years and 5 years 5 years
At 31 March 2011      $000 $000 $000 $000
Amount owed to subsidiary undertakings    — — — 9,701
Borrowings       5,555 — — —
Trade and other payables     899 — — —
        Less than  Between 1 Between 2 Over
        1 year and 2 years and 5 years 5 years
At 31 March 2010      $000 $000 $000 $000
Amount owed to subsidiary undertakings    — — — 9,701
Borrowings       — 5,054 — —
Trade and other payables     1,070 — — —
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28. Financial instruments continued
Credit risk
Credit risk arises from cash and cash equivalents and credit exposures on outstanding receivables. The group’s and company’s main 
credit risks are on the outstanding trade receivables. This risk is reduced through credit control procedures. An analysis of outstanding 
receivables is included in note 19.
29. Capital management
The group’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern, so that it can provide 
returns for shareholders and benefits for other stakeholders and to provide an adequate return to shareholders by pricing products and 
services commensurately with the level of risk.
The group sets the amount of capital in proportion to risk. The group manages the capital structure and makes adjustments to it in the 
light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital 
structure, the group may return capital to shareholders, issue new shares, or sell assets to reduce debt.
Consistent with others in the industry, the group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt 
divided by total capital. Net debt is calculated as total borrowings (including ‘current and non-current borrowings’ as shown in the 
Consolidated Statement of Financial Position) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the 
Consolidated Statement of Financial Position plus net debt.
          2011 2010
          $000 $000
Total borrowings        5,900 5,307
Less cash and cash equivalents       (600) (1,221)
Net Debt         5,300 4,086
Total equity         3,992 1,644
Total capital        9,292 5,730
Gearing ratio        57% 71%
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Our Business
Welcome 
to ZOO Digital Group plc
Creating media for global distribution is a labour-intensive, time-
consuming process for most companies. ZOO’s software enables 
businesses to create and deliver media to the global marketplace  
more rapidly and efficiently than ever before.
ZOO is a provider of software for managing collaborative workflows that involve regionalising and authoring 
creative content to companies across multiple sectors. We work with film studios, videogame companies, music 
publishers, toy companies and book publishers to simplify the production of creative media. Our customers enjoy 
reduced time to market, higher quality and lower costs. We do this by designing innovative, patent-protected 
software and providing flexible solutions that combine licensing with value-added services to meet the diverse 
needs of customers of all sizes across multiple industries. Our software is used to create localised iTunes, DVD, 
Blu-ray, eBooks, product packaging and marketing campaigns for some of the best known brands in the world.
Why ZOO?
	 We create open, collaborative 
relationships with our customers 
which build trust and generate 
repeat business
	 Our proposition is clearly 
differentiated in the market, based 
on our innovative software
	 We focus on addressing the urgency 
of our customers to improve the 
efficiency of their operations 
	 Our technology has high barriers to 
entry, being built on patent-protected 
software created over many years
	 Our business model is highly scalable, 
enabling us to grow without 
significantly adding to the cost base
	 Our strategy of partnering in new 
markets brings significant potential 
with only modest levels of investment
Head Office
ZOO Digital Group plc
The Tower
2 Furnival Square
Sheffield
S1 4QL
United Kingdom
T: +44 (0)114 241 3700
F: +44 (0)114 241 3701
ZOO Employee Share Trust 
Limited
The Tower
2 Furnival Square
Sheffield
S1 4QL
United Kingdom
T: +44 (0)114 241 3700
F: +44 (0)114 241 3701
Software Solutions
ZOO Digital Limited
The Tower
2 Furnival Square
Sheffield
S1 4QL
United Kingdom
T: +44 (0)114 241 3700
F: +44 (0)114 241 3701
ZOO Digital Inc
2201 Park Place
Suite 100
El Segundo
CA 90245
USA
T: +1 310 220 3939
F: +1 310 220 3958
Media Production
Scope Seven LLC
2201 Park Place
Suite 100
El Segundo
CA 90245
USA
T: +1 310 220 3939
F: +1 310 220 3958
Group Directory
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ZOO Digital Group plc 
The Tower 
2 Furnival Square 
Sheffield 
S1 4QL 
United Kingdom 
T: 0114 241 3700 
F: 0114 241 3701
ZOO Digital Group plc 
2201 Park Place 
Suite 100 
El Segundo 
90245 
USA 
T: +1 310 220 3939 
F: +1 310 220 3958
www.zoodigital.com
One Stop to Global
ZOO Digital Group plc
Annual Report and Accounts 2011
Stock Code: ZOO
Smarter Workflows 
for Global Media
Zoo 
Digital
Home  
Entertainment
Music
Videogames
Publishing
ZOO Digital Group plc Annual Report and Accounts 2011
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