Annual report and accounts 2011
Managing collateralised trading Enabling regulatory compliance
Lombard Risk Management plc For over 20 years Lombard Risk Management plc  
(“Lombard Risk”) has delivered industry-leading global 
risk management and regulatory compliance software. 
Today, Lombard Risk is one of the world’s recognised leading 
providers of collateral management and regulatory compliance 
solutions to financial organisations and large corporations 
around the world. Our award-winning global solutions 
enable the financial industry to improve the management 
of counterparty risk, collateral risk, trading risk, liquidity 
risk reporting and global regulatory reporting.
Grow
•  Develop and market 
new products
•  Meet the needs of the 
financial services industry
•  Utilise resources according 
to greatest opportunities
•  I n t e r n at i o n a l e x pan s i o n
•  Grow organically, with 
acquisition appetite 
depending on share price
Maintain
•  M a r k e t - l e a d i ng p o si t io n 
in regulatory compliance
•  Continue to ride the wave of 
FSA regulation and build on 
success of liquidity reporting
•  Leadership in integrated collateral 
management solution
•  Optimise costs and 
improve efficiencies
Our strategy
Build
•  Tier 1 client wins for COLLINE
®
•  Product proven to work with 
high volumes
•  In negotiation with significant 
number of Tier 1 and 2 clients
•  Enhanced new technology 
platform
•  Developing next generation 
convergent products 01 Lombard Risk Management plc Annual report and accounts 2011
 01 Highlights
 02 A leading player in global software solutions
 04 Chairman’s statement
 05 Chief Executive Officer’s statement
 10 Board of Directors
 11 Lombard Risk’s management team
 12 Directors’ report 
 14 Corporate governance report 
 15 Report of the Audit Committee 
 16 Independent auditor’s report – Company
 17  C on s o l id a t e d s t a t e me n t 
of comprehensive income 
 18 Consolidated balance sheet
 19  Consolidated statement of changes 
in shareholders’ equity
 20 Consolidated cash flow statement 
 21  Notes to the consolidated financial statements 
 35 Independent auditor’s report – Group
 36 Company balance sheet
 37 Notes to the Company financial statements
 I B C  Company information
In this report
Highlights
  Revenue up 32% on same period last year at £11.8m 
(2010: £8.9m).
 Profit after tax of £1.3m (2010: loss of £1.6m).
  Cash at end of period £1.8m with no debt (2010: £0.7m).
  Profitability achieved by both the Regulatory and the 
Trading and Risk businesses.
  Acceptance of COLLINE
®
 at Tier 1 European banks.
  Cost reduction programme implemented.
  More than 30 contracts won for our liquidity solution.
  Board and management team  
further strengthened.
>
30
contracts won
Learn more about Lombard Risk at 
www.lombardrisk.com
Total comprehensive income (m)
£1.3  
Adjusted net cash (m)
£1.8  
Revenue (m)
£11.8 +32% 
11
11
1.3
1.8
10
10
(1.6)
0.7
09
09
(1.1)
(1.2)
08
08
(0.7)
0.0
07
07
(2.3)
0.2
11
11.8
10
8.9
09
8.7
08
8.5
07
6.9 02 Lombard Risk Management plc Annual report and accounts 2011
A leading player in global software solutions
COLLINE
®
integrated collateral management
•  Expanding on OTC Derivative, Repo 
and Securities Lending coverage 
•  Increasing demand in collateral-related 
regulatory demands 
•  New functionality for clearing 
and messaging
•  STP functionality delivering efficiency 
gains for clients
•  Clients include banks, service providers, 
asset managers and energy companies 
•  Proven scalability and resilience 
for high volume processing
•  Web-based platform meeting 
audiences’ technology requirements
•  Extensive team of business practitioners
We are committed to providing innovative 
specialised products that stay a step ahead 
of complex collateralised trading demands, 
changing market conditions, increasing 
regulatory challenges, ongoing financial 
and operational risk pressures and a host 
of other financial compliance mandates. 
The global financial businesses and leading 
corporations we serve are prepared to 
improve the management of collateralised 
trading and regulatory compliance today 
and tomorrow.
Risk Management software
Products
Key growth 
driver
OBERON
®
trade processing, valuation 
and risk management
•  High margin product
•   Target clients include Tier 1 and 
Tier 2 banks, service providers 
and asset managers
•  Sales in the UK, US and Asia
High 
margin 
product
Worldwide presence
Lombard Risk employs over 170 people 
across the globe and has customers in the 
UK, mainland Europe, Africa, the Middle East, 
the Americas, Asia and Oceania.
3 03 Lombard Risk Management plc Annual report and accounts 2011
(STB-) Reporter
regulatory compliance
•   Leading position in the UK market for FSA 
and Bank of England reporting: approximately 
37% of UK banks are regulatory clients 
•    Geographic expansion driven by customer 
demand with new jurisdictions in Japan 
and China
•    Meeting tightening global regulatory demands
•   Integrated with stress  
testing to meet  
regulators’ demands
•    F o r t h c o m in g  
opportunities for  
Basel III and Solvency II
Regulatory Compliance software
UK market 
leader
LISA
®
flagship interface for Lombard Risk’s 
new set of products
•   Liquidity and stress testing, analyses and 
risk management
•   Required by UK and European banks as 
regulators’ demand tighter control of liquidity
•   Expected to be important growth driver
MIS Reporting Suite
dynamic management information suite
•   Typically sold alongside products within 
Lombard Risk’s portfolio
•   Initial clients already identified and 
on board
•   Satisfies regulatory demand for better 
information for senior management
•   Web-based solution  
with graphical  
representation  
of data is in  
high demand
Converging risk and regulatory compliance
New 
product
Increasing
demand
1
2
4
5
6
Where we are based
1 London (headquarters)
2 Luxembourg
3 New York
4 Shanghai
5 Hong Kong
6 Singapore 04 Lombard Risk Management plc Annual report and accounts 2011
Chairman’s statement Philip Crawford
I have now completed my first year at 
Lombard Risk. It is with pleasure that 
I am able to state that the momentum 
reported in the interim results has been 
sustained throughout the financial year 
and I am extremely pleased to present 
an excellent set of results. Revenues have 
increased by more than 30% to £11.8m 
(2010: £8.9m) and the Company has 
enjoyed a £2.9m uplift in profits after tax, 
from a loss of £1.6m to a profit of £1.3m. 
This uplift constitutes a £2.2m uplift in 
profit before tax and additionally the 
recognition of a £0.7m deferred tax asset. 
Costs grew at a rate of one-quarter of 
revenues, emphasising the scalability 
of the Company’s operations.
A key driver for the pleasing financial performance 
is the ever-growing needs of banks and financial 
services companies to purchase regulatory 
compliance and collateral management technology 
solutions. This has coincided with Lombard Risk 
delivering enhanced product functionality and 
extended geographical coverage all combining 
to increase customer demand.
On reporting the interim results, I stated that 
my early impressions were of a company with 
considerable potential. This view has been 
cemented in the subsequent period. The Board 
is optimistic over the future outlook for the 
Company. The opportunities which are apparent 
with enhanced regulatory compliance across 
wider geographical areas, together with short 
to medium term opportunities arising more 
locally from Solvency II and Basel III, place 
the Regulatory Compliance business in an 
enviable position. Ever stricter risk management 
requirements over collateral are resulting in 
an escalation of interest in the Company’s 
collateral management product portfolio.
The Company has delivered well but there is 
much left to do to achieve our goals over the 
next few years. We will continue to work hard 
and wisely to take advantage of our excellent 
market position and the strong market drivers. 
We take nothing for granted!
Philip Crawford
Chairman 
27 May 2011
Summary
•   £2.9m uplift in profits after tax
•   Scalable operations
•   Enhanced product functionality
•   Extended geographical coverage
•   The Board is optimistic over the future 
outlook of the Company 05 Lombard Risk Management plc Annual report and accounts 2011
Chief Executive Officer’s statement John Wisbey
Summary
The Company has made great progress in the 
year and is now well positioned, profitable and 
cash generative. Moreover we believe that there 
are good opportunities to advance the business 
performance even further in the coming year which 
we enter with a strong sales pipeline, leading-edge 
products, a strengthened management team, an 
appropriately structured cost base and a strong 
balance sheet.
Revenues grew at 32%, all of it organic growth, 
profitability was achieved and we ended the year 
with cash of £1.8m and no borrowings, an advance 
of £1.1m on the previous year’s cash position. All 
these numbers were ahead of market expectations. 
The board is recommending a maiden dividend 
of 0.03p per share.
The highlights of the year were the success of 
the UK Liquidity Regulatory programme, prompted 
by changes in the FSA’s new reporting requirements 
for liquidity risk which resulted in over 30 contract 
wins, and the go live of a major Tier 1 German bank 
for our collateral management product COLLINE
®
. 
This contract had been announced in April 2009 and 
went live in April 2010. We have now proven the 
scalability and resilience of the COLLINE® product 
in a leading Tier 1 bank in a global environment 
and will roll this technology out to other products 
requiring similar scalability and resilience. 
Much progress was made on moving our 
technology’s look and feel to a new platform 
and in building components that can work across 
our various products. Client reaction to the look 
and feel of the new platform has been extremely 
positive. Functionally, our products continued 
to make great progress.
We changed our NOMAD to Allenby Capital in 
mid-April 2010 and shortly afterwards announced 
several board changes, including the appointment 
of a new Non-executive Chairman. It is particularly 
pleasing that the growth achieved in the year 
was able to occur during a period of considerable 
change. Towards the end of the financial year 
we strengthened the management team further 
with a number of senior appointments.
The Board considers that the Company’s 
products are well placed with an emphasis 
on risk management, regulatory compliance 
and on related management reporting. 
The valuations of our peer group on the AIM 
market, as well as the premium trade sale prices 
achieved by companies in a very comparable 
space of operation like FRSGlobal or related 
spaces like Complinet or Sophis, are at revenue 
multiples very much higher than the Company’s 
current market valuation on AIM. We are 
continually being told that our specialities of 
risk management and regulation are regarded 
Summary
•   32% organic revenue growth
•   Operating in one of the hottest sectors 
in the market for valuation
•   Worldwide growth of regulation looks set 
to continue with new opportunities for the 
Company outside Europe
•   Regulatory driven movement of derivatives 
to clearing houses is a major opportunity
•   New technology platform is very 
significant driver
•   Strengthened depth of management team
•   Recommendation of a maiden dividend 06 Lombard Risk Management plc Annual report and accounts 2011
Chief Executive Officer’s statement continued
“ We enter the current financial year with 
a strong sales pipeline, leading-edge 
products, a strengthened management 
team, an appropriately structured cost 
base and a strong balance sheet.”
Summary continued
as the “hottest” areas of financial technology. 
The current AIM valuation effectively reduces 
our ability to make value-enhancing acquisitions. 
We hope that the results being achieved will 
result in a market re-rating in due course for 
the benefit of all shareholders.
Financial
Revenues for the year increased by 32% to £11.8m 
(2010: £8.9m). Profit before taxation was £0.6m 
(2010: loss of £1.6m) and profit after taxation was 
£1.3m (2010: loss of £1.6m). EBITDA was £0.7m 
and normalised profit (stripping out one off staff 
reduction costs and the London office move) 
was £0.9m. Net cash was £1.8m, a considerable 
improvement from the previous year’s £0.7m. 
There were no borrowings.
The profit before tax was achieved without any 
capitalisation of software development. We have 
been happy to expense software development 
costs but under our accounting policy, which is 
in accordance with IFRS, we now satisfy all of the 
capitalisation qualifying conditions for many of 
our products, which consequently will result in 
the creation of an intangible asset. We have taken 
soundings from some leading industry analysts 
on what other companies in the sector report as 
R&D for capitalisation purposes and it is evident 
that there is a wide difference between companies, 
which is relatively opaque in company accounts. 
We will continue to be at the conservative end. 
In the last year our total expenditure on software 
development was £2.7m, being 23% of revenue. 
We would welcome greater consistency of 
presentation between companies in this area 
to make it easier for investors to compare like 
with like.
The strong growth in profit after taxation is partly 
because of the inclusion of a £0.7m deferred tax 
asset arising from the likely realisation of some 
of our tax losses. It should be stressed that this 
does not recognise the total after tax benefit of 
our tax losses which still totalled £4.8m at the 
end of March 2011.
Risk management and trading products 
As well as the positive impact from the aftermath 
of the credit crisis, there has been additional 
regulatory impetus that helps our business. 
In the United States the impact of the Dodd-Frank 
legislation, and how derivatives are transacted 
with central counterparties and cleared more 
on exchanges has given an opportunity to 
develop our Clearing offerings with the launch 
of COLLINE
®
 CCP Clearing. The product suite 
we are now able to market to clients for COLLINE
®
 
is a far wider one than three years ago with 
substantially all the main requirements of a 
collateral business met including OTC derivative 
margin management, repo and securities lending, 
central clearing, trade reconciliation, inventory 
management and margin messaging plus related 
workflow, straight through processing and reporting. 
This broader coverage has a positive impact on 
the price per customer that we are able to achieve.
Net assets
Net cash
£2.6m
£1.8m 07 Lombard Risk Management plc Annual report and accounts 2011
Revenue by geographical area
 UK
 The Americas
  Rest of Europe,  
Middle East and Africa
 Asia Pacific
Total revenue
£11.8m
Operating cash generated
£1.2m
Revenue growth since 2010
32%
In April 2010 COLLINE
®
 went live globally at the 
major Tier 1 German bank which was announced 
in April 2009 and by the end of the financial year 
we had completed a new installation for another 
prestigious German bank. We won other deals 
for COLLINE
®
 among banks and asset managers. 
The sales pipeline is very promising.
COLLINE
®
’s scalability, resilience and performance 
has been proven in the Tier 1 German bank 
environment using active-active clustering in multiple 
data centres, user locations in three continents 
and well over 200 users. This means we now have 
every confidence that our solution is scalable from 
the smallest collateral user to the largest global bank. 
Similar technology is being deployed for our other 
products where performance is a key issue.
OBERON
®
, our most established product, which 
has the ability to value and risk manage many 
different types of financial instrument, is profitable 
and continues to move forward with functional 
and performance enhancements. 
During the year we launched our LISA
®
 product 
and we have now signed up several customers 
for it in conjunction with our regulatory success 
for liquidity. LISA
®
, will evolve into a risk product 
which is very complementary to our regulatory 
products, starting with Liquidity Risk, and using 
the most modern technology. Lombard Risk has 
always been strong on risk management and 
the convergence of risk and regulation plays 
to our strengths.
Regulatory and compliance software products
Lombard Risk is the market leader for UK Bank 
Regulatory Reporting with approximately 130 
of the 350 banks in the UK and approximately 
15 investment firms in the UK using the 
STB-Reporter product for regulatory reporting 
to the FSA. 
During the year the major market development was 
the implementation of the FSA’s new regulations on 
Liquidity which allowed us to earn significant initial 
and annual licence fees as well as implementation 
revenue. In all, over thirty clients were won for 
Liquidity reporting, more than twice as many 
as a key competitor highlighting our growing 
market share. 
Regulatory change is always one of the main 
revenue drivers for a regulatory business. 
This financial year does not see quite the same 
opportunity in the UK as last year’s Liquidity 
Regulatory Programme but we believe that the 
opportunities from unified European COREP 
reporting at the end of 2012 (the first reports which 
will be identical rather than similar for all EU 
countries) will provide useful revenue opportunities 
this year in both the UK and other European 
countries as well as preparation for Basel III 
and Solvency II in 2012/2013. The appreciable 
regulatory change in other countries, notably 
in various Asian countries including India, is an 
opportunity that we will exploit.
£6.5m
£2.5m
£1.0m
£1.9m 08 Lombard Risk Management plc Annual report and accounts 2011
Regulatory and compliance software products 
continued
The Group’s ability to offer global or regional 
regulatory solutions has been greatly enhanced 
by having regulatory offerings available or under 
production for several EMEA and Asian countries 
as well as the United States. This process continues 
with product under development for Indian, Chinese 
and Korean regulatory reporting. Our Asian offices 
have made a number of worthwhile product wins, 
including business in Singapore won away from 
our main competitor, and we went live with our 
first customer for Japanese reporting. 
We are making some important technology and 
product enhancements to our regulatory products, 
including an exciting Web 2 front end, more 
performance and resilience at the back end, 
and other features designed to make the product 
more attractive to global Tier 1 banks as well 
as to our existing client base. Our existing ETL 
(Extract, Transform and Load) tool is long tried 
and tested in the regulatory environment and 
provides a secure foundation for development. 
Technology
We see our technology as an increasingly positive 
part of our commercial story and a key driver for 
growth. Our IP is a major corporate asset. 
Much progress has been made on moving our 
technology’s look and feel to a new platform 
and in building components that can work across 
our various products. Several of the liquidity 
contract wins included licensing of parts of this 
new technology. Client reaction to the look and 
feel of the new platform has been extremely 
positive. Functionally, our products continued 
to make great progress with new technology 
launched for repos, collateral management 
for centrally cleared derivative transactions 
and flexible management reporting. 
As mentioned earlier, COLLINE
®
’s scalability, resilience 
and performance has now been proven to work 
very effectively in a Tier 1 bank environment 
using active-active clustering in multiple data 
centres, user locations in three continents and 
well over 200 users. Similar technology is being 
deployed for our other products where 
performance is a key issue.
Our Shanghai development centre now has almost 
100 people in it and our model is to do much of 
the business analysis in London and New York 
and other financial centres but the majority of 
development in China. 
We have spent money on appreciably upgrading 
our equipment and the software tools that 
we use ourselves in order to achieve efficiency 
gains for our staff and we have made further 
progress on automating large parts of our 
software testing routines.
Personnel and premises
During the financial year we continued to make 
new hires appropriate to the expected growth 
of the business but we also benefited from cost 
actions taken in the preceding financial year. 
We continue to build on last year’s profitability 
in all parts of the business and to re-allocate 
Q1. 
Regulatory contracts won in the UK 
from new clients and existing ones 
extending the scope to include 
the new liquidity standards.
Appointed new Directors 
to the Board.
Q2. 
Relocated London head office 
to Blackfriars.
BNP ParibasSecurities go live with 
COLLINE
® 
for collateral management.
Q3. 
New contract won with SEI, a global 
operational outsourcing firm, who 
will be using COLLINE
®
 to assist 
delivery of its new collateral 
management service.
Profitability announced for first 
half year.
A year of continued growth
Chief Executive Officer’s statement continued
For more information for investors, visit 
www.lombardrisk.com 09 Lombard Risk Management plc Annual report and accounts 2011
“ Lombard Risk has always been strong 
on risk management and the convergence 
of risk and regulation plays to our strengths.”
resources to those parts of the business where 
we see the best prospects. Costs should continue 
to be contained and to reduce as a percentage 
of revenue as we achieve greater efficiency gains. 
We now have more than half of our Group 
headcount in Shanghai.
The Board changes at the beginning of the 
financial year, including the appointment of 
Philip Crawford as Non-executive Chairman, 
were covered in the interim announcement. 
Towards the end of the financial year we made 
three senior hires. Paul Tuson, who had been 
interim CFO since September 2010, joined our 
board as CFO. Philip Stanning joined as Group 
Sales Director, and Rebecca Bond as Group 
Marketing Director. Together with the existing 
strong team, these new hires should greatly help 
our plans to scale up the business further over 
the next few years.
In July 2010 we moved to high quality premises 
at Ludgate House, 245 Blackfriars Road in London. 
We have also recently moved to larger and higher 
quality premises in New York.
Prospects
With the 32% organic revenue growth achieved in 
the last year, the Company has attained a profitable 
position based on a leading product portfolio in 
a market with an ever-greater need to buy regulatory 
or risk management products. As a result of our 
disciplined product development strategy and 
a clear focus on the needs of our customers, 
our business continues to develop strongly. 
Looking ahead, we will continue to expand our 
core businesses – Regulatory Compliance and 
Risk Management in the financial services market – 
by improved product functionality, smarter 
technology solutions and increased geographic 
reach. The aim of this strategy is to deliver 
significant and sustainable turnover and earnings 
growth over the next five years. It is anticipated 
that this will lead to a positive return to the 
Company’s investors via both dividend income 
and capital growth. 
The continued hard work and contribution made 
by all my colleagues has been a major contributory 
factor to the Company’s positive results. I would 
like to thank them for their hard work and 
commitment, as well as our advisors Allenby 
Capital, Grant Thornton, Memery Crystal and 
others, for their assistance, and our customers 
and investors for their continued support.
John Wisbey
Chief Executive Officer 
27 May 2011
Q4. 
COLLINE
®
 selected by second large 
German bank to automate OTC 
derivatives, repos and stock lending 
collateral management and risk 
mitigation by consolidating multiple 
asset classes.
Build 
•  Tier 1 client wins for COLLINE
®
•  Product proven to work with 
high volumes
Grow 
•  Develop and market new products
•  Meet the needs of the financial 
services industry
Maintain 
•  M a r k e t - l e a d i ng p o si t io n 
in regulatory compliance
•  Continue to ride the wave of FSA 
regulation and build on success 
of liquidity reporting
What’s next 10 Lombard Risk Management plc Annual report and accounts 2011
Board of Directors
The Group is run by its Board of Directors, which currently has six 
members including three Non-executive Directors and meets regularly. 
The Non-executive Directors make a valuable contribution by bringing 
a breadth of business and relevant professional experience to the 
Board. The Board has overall responsibility for the Group and there 
is a formal schedule of matters specifically reserved for decision by 
the Board. It is responsible for the overall Group strategy, acquisition 
and divestment policy, corporate policies, approval of major capital 
expenditure and consideration of significant capital matters.
Philip Crawford Non-executive Chairman
Philip Crawford joined the Board of Lombard Risk in 2010. He has been working 
in the IT Industry since 1983. Philip has held a number of senior positions in 
software, hardware and services companies including senior vice president of 
Oracle Corporation with membership of the executive board and Larry Ellison’s 
Strategy Council, president of EDS International with responsibility for all markets 
outside the US, chief executive of Bull UK and executive vice president and head 
of EMEA for i2 Technologies. 
Since retiring from full time employment in 2002, Philip has concentrated on his 
non-executive director portfolio and acts as a “business angel”. He is currently the 
chairman of Avanti Capital Plc and Crimsonwing Plc as well as being chairman and 
investor in a small number of private companies mainly in the technology space.
John Wisbey Chief Executive Officer
John Wisbey is the Chief Executive Officer of Lombard Risk, which he 
has led since its launch in 1989 with the introduction of Oberon, one of the 
industry’s original software systems for financial instrument valuation and 
risk management. John has guided the Company’s organic growth through 
the creation and development of several successful products, initially Oberon, 
followed by ValuSpread a credit derivative data service (sold to Fitch in 2005), 
COLLINE
®
 for collateral management and, most recently, LISA for liquidity risk 
management. In addition, John has been the principal architect of the Company’s 
inorganic growth, which includes the acquisitions of Open Image Systems in 1994 
(later floated on AIM as IDOX plc in 2000) and STB Systems (now the core of 
Lombard Risk’s regulatory compliance business) in 2005. Today, under John’s 
leadership, Lombard Risk is an international leader in collateralised trading, 
liquidity management and regulatory compliance offering a wide range of 
products and services to multinational clients. 
Prior to establishing Lombard Risk, John was head of option trading and a director 
in the Swap Group at Kleinwort Benson Limited. John acquired a broad foundation 
in the world’s financial markets and developed specialisations in derivatives and 
banking technology during his twelve years in the Treasury Division and Banking 
Division at Kleinwort Benson while based in London, Hong Kong and Singapore. 
John was also past chairman until 2005 of IDOX plc, a former subsidiary of 
Lombard Risk and now a leading company in UK e-government.
Paul Tuson Chief Finance Officer
Paul is a Chartered Accountant with over 20 years’ post-qualification experience 
gained in both the profession at KPMG and in industry and commerce in senior 
finance roles.
Paul’s experience has been gained within a broad range of businesses, with 
emphasis on AIM listed companies. He has particular experience in the media 
and technology sectors, with additional experience in telecoms and retail. He has 
led two IPOs (one being IPO of the Year) and has experience of rapid growth, 
business re-engineering, turn around, MBO and acquisitions and disposals.
Nick Davies Chief Technology Officer 
Nick Davies joined the Board of Lombard Risk in 2010 having joined the firm in 
2008 as the Group’s CTO. As CTO, Nick has global responsibility for Lombard Risk’s 
technical vision as well as for the delivery and quality of all software products. 
At Lombard Risk Nick’s achievements include providing the architectural vision 
for the rearchitecture of the COLLINE
®
 collateral management platform to provide 
additional business resilience and processing capacity capabilities. These 
architecture and design principles contributed to COLLINE
®
 winning its first 
Tier 1 enterprise client in early 2009. 
At JP Morgan he was the head of technology for three global businesses: 
Globeclear, Collateral Management and Global Trust. He oversaw the technical 
integration of the hedge fund acquisitions into the Alternative Investment group 
and was responsible for several high profile merger projects. He was responsible 
for the technical teams that architected and implemented the JP Morgan 
CommanD product servicing OTC derivatives.
Brian Crowe Non-executive Director
Brian Crowe joined the Board of Lombard Risk in 2004 at the time of its IPO on 
AIM. He was the chief executive of Global Banking & Markets at the Royal Bank 
of Scotland plc (“RBS”) until October 2008. During his tenure at RBS, Brian was 
a member of the Group ALCO, Credit and Investment Committees of RBS and a 
member of the Group Executive Management Committee. He was chairman of 
the Wholesale Committee of the British Bankers’ Association from 2006 to 2008 
and was a member of the Global Banking Issues Committee of the European 
Banking Federation (or Fédération Bancaire Européenne) from 2005 to 2008. 
He was also a member of the City of London EU Strategy Group for 2007/8. Prior 
to joining RBS, he was head of derivatives at Chase Manhattan Bank in London. 
He is a former board member of the International Swaps and Derivatives 
Association (“ISDA”).
Mike Shinya Non-executive Director 
Mike Shinya joined the Board of Lombard Risk in 2010. Until June 2010 
Mike was the chief executive officer of IBS Group, a Stockholm headquartered 
business applications software company operating in over 20 countries globally. 
Prior to this position Mike was chief executive officer at Sherwood International 
and chief operating officer at Micro Focus plc (both publicly quoted UK software 
companies). Mike has been in the IT industry for over 30 years having served 
in senior positions at IBM, Oracle and Baan Company.
Philip Crawford Non-executive Chairman
Nick Davies Chief Technology Officer
John Wisbey Chief Executive Officer
Brian Crowe Non-executive Director
Paul Tuson Chief Finance Officer
Mike Shinya Non-executive Director 11 Lombard Risk Management plc Annual report and accounts 2011
Lombard Risk’s management team
Lombard Risk’s management team comprises experts in their respective fields. 
It was expanded and restructured in early 201 1 to include Sales and Marketing 
Directors at Group level, both of whom have track records in successfully 
growing market-leading firms in the financial services software market. 
Many members of the management team have banking backgrounds and 
have used risk management and regulatory software in previous roles, 
giving them first-hand knowledge of customer needs and desires.
These individuals’ skills and experience have been brought together 
to create a team that now has the ability to respond to and anticipate 
customer requirements. This gives considerable market advantage 
when competing for business and delivering to plan.
The management team is made up of functional, product and geographic 
heads, all of whom are measured on successful delivery of financial and 
non-financial key performance indicators.
For more information visit  
www.lombardrisk.com
Philip Stanning  
Sales
Rebecca Bond  
Marketing
Peter Francis  
Support and Maintenance
James Phillips  
Regulatory Compliance
Sue Kent  
Legal and HR
Sherry Isenberg 
Americas 
William Tong  
Asia Pacific 
Anthony Brown  
Professional Services – 
Regulatory Compliance
Helen Nicol  
Risk Management
Functional
Product Geographic 12 Lombard Risk Management plc Annual report and accounts 2011
Directors’ report 
For the year ended 31 March 2011
The Directors submit their annual report together with the consolidated financial statements for the year ended 31 March 2011.
Directors’ responsibilities
The Directors are responsible for preparing the annual 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 elected to prepare consolidated 
financial statements in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the European Union and Parent Company financial 
statements in accordance with UK Generally Accepted Accounting Practice (“UK GAAP”). 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 and profit or loss of the Company and Group for that period. 
In preparing these financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
•  state whether applicable IFRS and UK GAAP have been followed, subject to any material departures disclosed and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company 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 that disclose 
with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the 
Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention 
and detection of fraud and other irregularities.
In so far as each of the Directors is aware:
• there is no relevant audit information of which the Company’s auditor is unaware; and
•  the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the 
auditor is aware of that information.
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 financial statements may differ from legislation in other jurisdictions.
Principal activities and business review
The Company is a holding company. The principal activities of the Group are the provision of trading, valuation and risk management systems and 
regulatory compliance systems to the financial markets. A review of these activities, future developments and financial risk management is provided 
in the Chief Executive Officer’s statement and note 13 to the consolidated financial statements. This information forms a part of the Directors’ report.
Principal risks and uncertainties
The management of the business and the nature of the Group’s strategy are subject to a number of risks. 
The Directors have set out in note 13 the principal risks facing the business.
The Directors are of the opinion that a thorough risk management process is adopted which involves the formal review of all risks identified in note 13. 
Where possible, processes are in place to monitor and mitigate such risks. 
Capital management
The Company has no external debt and seeks to finance all financing requirements through cash flows generated from operating activities. The Company’s 
equity structure is set out in note 14 to the financial statements.
Management’s objectives with respect to managing capital include maintaining sufficient capital to enable the Group to implement its strategy going forward 
with the minimum level of external debt; there is no external debt at 31 March 2011. Part of this strategy is to generate a positive return to investors, both 
through dividend income and capital growth.
Key performance indicators
The Directors have monitored the performance of the Group with particular reference to the following key performance indicators:
• turnover by product line and geography compared to prior year;
• utilisation and profitability of professional services against budgets and market norms;
• cash management – actual compared to budget; and
• operating costs by function and location as an absolute measure and as a proportion of revenues compared to prior periods, forecasts and market norms.
Results and dividends
The audited financial statements for the year ended 31 March 2011 are set out on pages 17 to 34. The Group’s profit for the year after taxation amounted 
to £1,272,705 (2010: loss of £1,584,351). The Directors propose a dividend for the year of 0.03p per ordinary share of 0.5p (2010: £Nil). 13 Lombard Risk Management plc Annual report and accounts 2011
Directors and their interests
The Directors who served during the year and/or up to the date of this report and their beneficial interests in the Company’s ordinary share capital were 
as follows:
       31 March 2011 31 March 2010 
       Number Number
John Wisbey
1
      101,639,562 101,639,562
Paul Tuson (appointed 17 February 2011)     1,500,000 —
Nick Davies (appointed 27 April 2010)     — —
Chris Langridge (appointed 27 April 2010, resigned 30 September 2010)    — —
Philip Crawford (appointed 1 May 2010)     590,000 —
Brian Crowe      5,625,000 5,625,000
Mike Shinya (appointed 1 May 2011)      250,000 —
Ian Peacock (resigned 30 September 2010)     1,838,532 1,588,532
Keith Butcher (resigned 27 April 2010)     — 1,250,000
1 77 ,939,562 shares are owned directly. In addition John Wisbey is a beneficiary of Advanced Technology Trust which owns a further 23,700,000 shares.
In addition to these shareholdings listed above, the Directors have been granted options over ordinary shares.
In accordance with the Articles of Association and best practice, all Directors will retire at the forthcoming Annual General Meeting (“AGM”) and, being 
eligible, will offer themselves for re-election.
Payment of creditors
It is the Group’s practice to agree credit terms with all suppliers and to pay all approved invoices within these agreed terms. The average trade creditors’ 
days outstanding for the year was 25 days (2010: 49 days).
Substantial shareholdings
As at 31 March 2011 the Company has been notified of the following interests in 3% or more of its issued share capital:
       Number of shares % holding
John Wisbey      101,639,562 49.11
Legal & General Group plc      17 ,280,000 8.35
AMF (NBF) Holdings Inc.      12,222,222 5.90
Gartmore Investment Limited      9,116,945 4.41
Merifin Capital NV      7,525,264 3.63
Research and development
Research and development expenditure incurred on the Group’s suite of products has all been expensed to the income statement in the relevant period.
Going concern
The financial statements have, as in previous years, been prepared on a going concern basis. 
The Directors are required by the Companies Act 2006 to prepare annual accounts that give a true and fair view and, as part of this, to decide if it is appropriate 
to prepare them on a going concern basis. In forming an opinion that the Company and the Group is a going concern, the Directors have taken particular 
note of the positive trading performance in the year ended 31 March 2011. These show an upturn in the Group’s performance.
The Directors have prepared cash flow forecasts for the period ending 30 June 2012 which shows that the Company and Group have sufficient facilities for 
on-going operations. Whilst there will always remain some inherent uncertainty within the aforementioned forecasts, the Directors believe the Company and 
Group have sufficient resources to continue in operational existence for at least twelve months from the date of approval of these financial statements.
Accordingly the Directors continue to adopt the going concern basis in preparing the financial statements for the year ended 31 March 2011.
Auditor
A resolution to re-appoint Grant Thornton UK LLP as auditor and to authorise the Directors to agree its remuneration will be placed before the forthcoming 
AGM of the Company.
On behalf of the Board
John Wisbey  
Director 
27 May 2011 
 
  14 Lombard Risk Management plc Annual report and accounts 2011
Corporate governance report 
For the year ended 31 March 2011
Policy statement
The Board is committed to high standards of integrity and corporate governance, consistently seeking to apply the principles set out in the Combined Code 
(“the Code”) although recognising that as an AIM company the Company is not required to comply with the provisions of the Code and, largely because 
of its size, does not comply with a number of them. This statement, together with the Directors’ report and the report of the Board to shareholders on 
Directors’ remuneration, explains how the Group has applied the principles set out in the Code.
Internal controls
The Directors are responsible for the systems of internal control. Although no system of internal control can provide absolute assurance against material 
misstatement or loss, the Group’s systems are designed to provide the Directors with reasonable assurance that problems are identified on a timely basis 
and dealt with appropriately. The Board considers that there have been no substantial weaknesses in internal financial controls resulting in any material 
losses, contingencies or uncertainties, and thus disclosable in the accounts. The Board has considered the need for an internal audit function and has 
concluded that there is no current need for such a function within the Company.
Accounting policies
The Board considers the appropriateness of its accounting policies on an annual basis. The Board believes that its accounting policies and estimation 
techniques are appropriate, in particular in relation to income recognition, research and development and deferred expenses.
Board of Directors
The Board, comprising a Non-executive Chairman, three Executive Directors and two additional Non-executive Directors, is responsible for the overall 
strategy and direction of Lombard Risk Management plc as well as for approving potential acquisitions, corporate policies, major capital expenditure items 
and financing matters. The Board has a formal schedule of business reserved to it and meets regularly during the year. Advice from independent sources is 
available if required. The Board monitors exposure to key business risks, reviews the strategic direction of the Company, the annual budgets and progress 
against those budgets.
The Board members and their roles are described on page 10. The Executive Directors have service contracts, which are terminable upon periods between 
three and twelve months’ notice. In accordance with the Company’s Articles of Association, at least one-third of the Directors are required to retire by rotation 
at the AGM.
Shareholder relations
The Company recognises the importance of dialogue with all of its shareholders. The AGM is an opportunity to communicate with institutional and other 
shareholders. Additional information is supplied through the circulation of the interim report and the annual report and accounts. Lombard Risk Management plc 
maintains up-to-date information on the investor section of its website, www.lombardrisk.com.
Every shareholder receives a full annual report after each year end and has access to an interim report online after each half year end. Care is taken to 
ensure that any price sensitive information is released to all its shareholders, institutional and private, at the same time in accordance with London Stock 
Exchange requirements.
Audit Committee
The Audit Committee is a committee of the Board chaired by Brian Crowe and also comprises Philip Crawford and Mike Shinya. The Report of the 
Audit Committee can be found on page 15.
Remuneration Committee
The Remuneration Committee is a committee of the Board chaired by Mike Shinya and also comprises Brian Crowe, Philip Crawford and John Wisbey. The 
committee reviews the remuneration structures and performance of the Executive Directors and reviews the remuneration policy for senior management. 
The Remuneration Committee meets as and when necessary and has access to professional advice from inside and outside the Company. The Executive 
Directors determine the remuneration arrangements of the Non-executive Directors. No Director may participate in decisions regarding his own remuneration. 15 Lombard Risk Management plc Annual report and accounts 2011
Report of the Audit Committee 
For the year ended 31 March 2011
Membership and meetings of the Audit Committee
The Audit Committee is a committee of the Board and is composed entirely of Non-executive Directors, whom the Board considers to be independent. 
The Audit Committee invites the Executive Directors and other senior managers to attend its meetings as appropriate.
During the year the Audit Committee was chaired by Brian Crowe. The Audit Committee is considered to have sufficient, recent and relevant financial 
experience to discharge its functions. The Audit Committee invites others, including the external auditor, to attend its meetings as appropriate.
Role, responsibilities and terms of reference
The Audit Committee’s role is to assist the Board in the effective discharge of its responsibilities for financial reporting and internal control.
The Audit Committee’s responsibilities include:
•  reviewing the integrity of the annual and interim financial statements of the Group, ensuring they comply with legal requirements, accounting standards 
and the AIM Rules and any other formal announcements relating to the Group’s financial performance;
• reviewing the Group’s internal financial control and risk management systems;
• monitoring and reviewing the requirement for an internal audit function; and
•  overseeing the relationship with the external auditor, including approval of its remuneration, reviewing the scope of the audit engagement, assessing 
its independence, monitoring the provision of non-audit services, and considering its reports on the Group’s financial statements.
Independence of external auditor
The Audit Committee keeps under review the relationship with the external auditor including:
•  the independence and objectivity of the external auditor, taking into account the relevant UK professional and regulatory requirements and the 
relationship with the auditor as a whole, including the provision of non-audit services;
• recommending to the Board and shareholders the re-appointment or otherwise of the external auditor for the following financial period; and
• the consideration of audit fees and any fees for non-audit services.
The Audit Committee develops and recommends to the Board the Company’s policy in relation to the provision of non-audit services by the auditor 
and ensures that the provision of such services does not impair the external auditor’s independence.
Brian Crowe
Chairman of the Audit Committee
27 May 2011 16 Lombard Risk Management plc Annual report and accounts 2011
Independent auditor’s report 
Consolidated financial statements
Independent auditor’s report to the members of Lombard Risk Management plc
We have audited the group financial statements of Lombard Risk Management plc for the year ended 31 March 2011, which comprise the Consolidated 
statement of comprehensive income, the Consolidated balance sheet, the Consolidated statement of changes in shareholders’ equity, the Consolidated 
cash flow statement and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International 
Financial Reporting Standards (“IFRS”) as adopted by the European Union.
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 set out on page 12, the Directors are responsible for the preparation of the Group 
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 Group 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 (“APB’s”) ethical standards for auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the APB’s website at www.frc.org.uk/apb/scope/private.cfm.
Opinion on financial statements
In our opinion the Group financial statements:
• give a true and fair view of the state of the Group’s affairs as at 31 March 2011 and of its profit for the year then ended; 
• have been properly prepared in accordance with IFRSs as adopted by the European Union; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors’ report for the financial year for which the Group financial statements are prepared is consistent with 
the Group financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Other matter
We have reported separately on the Parent Company financial statements of Lombard Risk Management plc for the year ended 31 March 2011.
Christopher Smith
Senior Statutory Auditor
For and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
30 May 2011 17 Lombard Risk Management plc Annual report and accounts 2011
      Year ended Year ended 
      31 March 2011 31 March 2010 
     Note £ £
Continuing operations   
Revenue      2 11,801,175 8,949,459
Cost of sales      (82,488) (174,139)
Gross profit      11,718,687 8,775,320
Administrative expenses      (11,158,866) (10,256,513)
Profit/(loss) from operations     4 559,821 (1,481,193)
Finance expense     5 (5) (108,915)
Finance income     6 4,732 1,026
Profit/(loss) before taxation      564,548 (1,589,082)
Tax credit     7 708,157 4,731
Profit/(loss) for the year from continuing operations    1,272,705 (1,584,351)
Other comprehensive income      
Exchange differences on translating foreign operations     (20,473) (54,536)
Total comprehensive income for the year     1,252,232 (1,638,887)
Profit/(loss) per share   
Basic (pence)     8 0.62 (0.95)
Diluted (pence)     8  0.62 (0.95)
The accompanying accounting policies and notes form an integral part of the financial statements.
Consolidated statement of comprehensive income 
For the year ended 31 March 2011 18 Lombard Risk Management plc Annual report and accounts 2011
Consolidated balance sheet
As at 31 March 2011
      As at As at 
      31 March 2011 31 March 2010 
Company number: 03224870     Note £ £
Non-current assets   
Property, plant and equipment     9 103,871 151,753
Goodwill     10 3,632,680 3,632,680
Other intangible assets     10 11,095 10,208
Deferred tax asset     7 721,500 —
      4,469,146 3,794,641
Current assets   
Trade and other receivables     11 1,252,658 1,579,833
Cash and cash equivalents      1,782,335 702,194
      3,034,993 2,282,027
Total assets      7,504,139 6,076,668
   
Current liabilities   
Trade and other payables     12 (1,977,523) (1,953,437)
Deferred income      (2,950,477) (2,794,698)
      (4,928,000) (4,748,135)
Total liabilities      (4,928,000) (4,748,135)
Net assets      2,576,139 1,328,533
Equity   
Share capital     14 1,464,465 1,464,465
Share premium account      4,795,033 4,795,033
Foreign exchange reserves      (84,145) (63,672)
Other reserves      1,664,297 1,668,923
Profit and loss account      (5,263,511) (6,536,216)
Total equity      2,576,139 1,328,533
The financial statements were approved by the Board on 27 May 2011 and signed on its behalf by:
John Wisbey Paul Tuson
Chief Executive Officer Chief Finance Officer
The accompanying accounting policies and notes form an integral part of the financial statements. 19 Lombard Risk Management plc Annual report and accounts 2011
Consolidated statement of changes in shareholders’ equity
For the year ended 31 March 2011
   Share Foreign    
  Share  premium exchange Other Profit and Total 
  capital account reserves reserves loss account equity 
  £ £ £ £ £ £
Balance at 1 April 2010  1,464,465 4,795,033 (63,672) 1,668,923 (6,536,216) 1,328,533
Share-based payment credit  — — — (4,626) — (4,626)
Transactions with owners  — — — (4,626) — (4,626)
Profit for the year  — — — — 1,272,705 1,272,705
Other comprehensive income      
Exchange differences on translating  
foreign operations  — — (20,473) — — (20,473)
Total comprehensive income for the year — — (20,473) — 1,272,705 1,252,232
Balance at 31 March 2011  1,464,465 4,795,033 (84,145) 1,664,297 (5,263,511) 2,576,139
   Share Foreign    
  Share  premium exchange Other Profit and Total 
  capital account reserves reserves loss account equity 
  £ £ £ £ £ £
Balance at 1 April 2009  1,110,715 2,512,904 (9,136) 1,649,152 (4,951,865) 311,770
Share-based payment charge   — — — 19,771 — 19,771
Issue of share capital  353,750 2,282,129 — — — 2,635,879
Transactions with owners  353,750 2,282,129 — 19,771 — 2,655,650
Loss for the year  — — — — (1,584,351) (1,584,351)
Other comprehensive income       
Exchange differences on translating  
foreign operations  — — (54,536) — — (54,536)
Total comprehensive income for the year — — (54,536) — (1,584,351) (1,638,887)
Balance at 31 March 2010  1,464,465 4,795,033 (63,672) 1,668,923 (6,536,216) 1,328,533
Other reserves relate to negative goodwill arising on the acquisition of a subsidiary undertaking prior to 1 April 1997, share-based payment and the merger reserve.
The accompanying accounting policies and notes form an integral part of the financial statements. 20 Lombard Risk Management plc Annual report and accounts 2011
      Year ended Year ended 
      31 March 2011 31 March 2010 
      £ £
Cash flows from operating activities  
Profit/(loss) for the period      1,272,705 (1,584,351)
Tax credit      (708,157) (4,731)
Finance income      (4,732) (1,026)
Finance expense      5 108,915
Operating profit/(loss)       559,821 (1,481,193)
Adjustments for:  
Depreciation      123,547  137,891
Amortisation      13,310 10,960
Share-based payment (credit)/charge     (4,626) 19,771
Decrease in trade and other receivables     327,175 1,262,393
Increase/(decrease) in trade and other payables     7,219 (716,340)
Increase in deferred income      155,779 214,196
Cash generated/(used) in operations     1,182,225 (552,322)
Tax credit (paid)/received      (13,343) 4,731
Net cash inflow/(outflow) from operating activities    1,168,882 (547,591)
Cash flows from investing activities 
Interest received      1,432 1,026
Purchase of property, plant and equipment     (75,991) (88,851)
Purchase of intangible fixed assets      (14,177) (10,353)
Net cash used in investing activities     (88,736) (98,178)
Cash flows from financing activities  
Loans from Directors      — 300,000
Repayment of Directors’ loans      — (600,000)
Shares issued, net of issue costs      — 1,605,879
Interest paid      (5) (108,915)
Net cash generated by financing activities     (5) 1,196,964
Net increase in cash and cash equivalents     1,080,141 551,195
Cash and cash equivalents at beginning of period     702,194 150,999
Cash and cash equivalents at end of period     1,782,335 702,194
The accompanying accounting policies and notes form an integral part of the financial statements.
Consolidated cash flow statement 
For the year ended 31 March 2011 21 Lombard Risk Management plc Annual report and accounts 2011
1. Accounting policies
(A) Basis of preparation
These consolidated financial statements are for the year ended 31 March 2011. They have been prepared in accordance with International Financial 
Reporting Standards (“IFRS”) and IFRS Interpretation Committee (“IFRIC”) interpretations as at 31 March 2011, as adopted by the European Union. 
They have been prepared under the historical cost convention.
The preparation of financial statements under IFRS requires the Board to make judgements, estimates and assumptions that affect the application of accounting 
policies, the reported amounts of balance sheet items at the period end and the reported amount of revenue and expense during the reporting period. 
The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the 
circumstances, the results of which form the basis of making judgements that are not readily apparent from other sources. However, the actual results 
may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.
New standards, amendments and interpretations
At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have been 
published but are not yet effective and have not been adopted early by the Group.
Management anticipates that all of the pronouncements will be adopted by the Group’s accounting policies for the first period beginning after the 
effective date of the pronouncement. Information on new standards, amendments and interpretations that are expected to be relevant to the Group’s 
financial statements is provided below. Certain other new standards and interpretations have been issued but are not expected to have a material impact 
on the Group’s financial statements.
• IFRS 9 “Financial instruments” (effective 1 January 2013)
  IFRS 9 addresses the classification and measurement of financial assets and will replace IAS 39. The standard is mandatory for accounting periods 
commencing on or after 1 January 2013, subject to adoption by the European Union.
• IAS 24 (revised 2009) “Related party disclosures” (effective 1 January 2011) 
  The revision to IAS 24 covers various items, including a revised definition of related parties. The revision is mandatory for accounting periods 
commencing on or after 1 July 2011.
• IFRIC 19 “Extinguishing financial liabilities with equity instruments” (effective 1 July 2010)
  IFRIC 19 addresses the accounting by an entity when the terms of a financial liability are renegotiated and result in an entity issuing equity instruments 
to a creditor to extinguish all or part of a financial liability.
(B) Basis of consolidation
The Group accounts consolidate the financial statements of the Parent Company (Lombard Risk Management plc) and its subsidiary undertakings over 
which it has full control (see note 5 to the Parent Company balance sheet). A description of the principal activities and operations of the Group can be 
found in the Directors’ report.
The consolidated financial statements include the financial statements of the Company and its subsidiary undertakings made up to 31 March 2011. 
The acquisition method of accounting has been adopted. Under this method, the results of subsidiary undertakings acquired or disposed of in the year 
are included in the Consolidated statement of comprehensive income from the date of acquisition or up to the date of disposal. All of the Group’s assets 
and liabilities existing at the date of acquisition are recorded at their fair values reflecting their condition at that date. Profits or losses on intra Group transactions 
are eliminated in full. Goodwill arising on consolidation was written off to reserves prior to 1 April 1999. Goodwill arising after this date is capitalised and 
under IFRS 3 goodwill is not amortised, but an impairment test is performed as appropriate, but at least annually. The value of goodwill is to be written 
down according to the outcome of the impairment test.
(C) Segment reporting 
In identifying its operating segments, management generally follows the Group’s product lines. The Group operates two main operating segments: 
Regulatory Compliance software and Risk Management and trading software. Regulatory Compliance software is for regulatory, anti-money laundering 
and compliance systems to financial markets. Risk Management and trading software provides trading, valuation and risk management systems to the 
financial markets. Each of these product lines is managed separately as each of these product lines requires different technology and other resources 
as well as marketing approaches. Corporate overheads, assets and liabilities which are not directly attributable to either product line are not allocated 
to segments.
Notes to the consolidated financial statements 
For the year ended 31 March 2011 22 Lombard Risk Management plc Annual report and accounts 2011
Notes to the consolidated financial statements continued
For the year ended 31 March 2011
1. Accounting policies continued
(D) Going concern
The financial statements have, as in previous years, been prepared on a going concern basis. 
In forming an opinion that the Company and the Group is a going concern, the Directors have taken particular note of the positive trading performance in the 
year ended 31 March 2011, both in the signing of new business contracts, and in the realised financial results. These show an upturn in the Group’s performance. 
The Directors have prepared cash flow forecasts for the period to 30 June 2012, which shows that the Company and Group have sufficient facilities for 
ongoing operations. Whilst there will always remain some inherent uncertainty within the aforementioned forecasts, the Directors believe the Company 
and Group have sufficient resources to continue in operational existence for at least twelve months from the date of approval of these financial statements.
Accordingly the Directors continue to adopt the going concern basis in preparing the financial statements for the year ended 31 March 2011.
(E) Revenue
Revenue represents the fair value of goods sold and services provided during the year, stated net of Value Added Tax. Revenue and profit/(loss) before tax 
are wholly attributable to the principal activities of the Group.
The recognition of revenue depends on the type of income:
Licence income  For long-term projects which do not include the up-front delivery of immediately usable software, revenue is recognised on both 
the consultancy and initial licence elements in line with the estimated percentage of completion of the project. That part of licence 
and maintenance revenue invoiced simultaneously with the initial licence but considered to relate to the period when the licence 
is deemed to be live is deferred in its entirety until the live date, following which it is released to profit in equal daily instalments 
over the duration of the relevant licence or maintenance. For other projects which do include the up-front delivery of immediately 
usable software, revenue is recognised in accordance with the invoicing schedule on a percentage completion basis. For non-refundable 
licences revenue is recognised in full on customer acceptance.
Customisation income Recognised once the customisation has taken place.
Maintenance income Recognised evenly over the term of the maintenance contract.
Rental income  Recognised evenly over the term of the rental contract.
Data subscription income  Recognised evenly over the term of the data contract.
Training income Recognised when the relevant courses are run.
(F) Property, plant and equipment
Property, plant and equipment are stated at cost, net of depreciation and any provision for impairment. No depreciation is charged during the period 
of construction. Leasehold property is included in property, plant and equipment only where it is held under a finance lease.
The cost of computer hardware, fixtures, fittings and equipment is written down to the residual value and is depreciated in equal annual instalments 
over the estimated useful lives of the assets. The residual values of assets or groups of like assets and their useful lives are reviewed annually.
The estimated useful lives of the assets are as follows: 
Computer hardware two years
Fixtures, fittings and equipment four years
(G) Goodwill
Goodwill, representing the excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired, is capitalised 
and reviewed annually for impairment. Goodwill is carried at cost less accumulated impairment losses. Negative goodwill is recognised immediately 
after acquisition in the Consolidated statement of comprehensive income.
(H) Intangible assets
Research and development
Expenditure on research is recognised as an expense in the period in which it is incurred.
Development costs incurred are capitalised when all the following conditions are satisfied:
• completion of the intangible asset is technically feasible so that it will be available for use or sale;
• the Group intends to complete the intangible asset and use or sell it;
• the Group has the ability to use or sell the intangible asset;
•  the intangible asset will generate probable future economic benefits. Among other things, this requires that there is a market for the output 
from the intangible asset or for the intangible asset itself, or, if it is to be used internally, the asset will be used in generating such benefits;
• there are adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and
• the expenditure attributable to the intangible asset during its development can be measured reliably.
Development costs not meeting the criteria for capitalisation are expensed as incurred. Capitalised development costs are amortised in equal monthly instalments 
over a period of three years from the end of the month in which the costs were incurred. The residual values of the development are reviewed annually. 23 Lombard Risk Management plc Annual report and accounts 2011
1. Accounting policies continued
(H) Intangible assets continued
Computer software
The cost of computer software, net of estimated residual value and impairment, is depreciated in equal annual instalments over one to two years based 
on the estimated useful lives of the assets. The residual values of assets or Group of like assets are reviewed annually.
(I) Financial instruments
Financial assets and liabilities are recognised on the Group’s balance sheet when the Group becomes a party to the contractual provisions of the 
instrument. The Group’s financial instruments comprise cash, trade receivables and trade and other payables. Derivative instruments are not used by 
the Group and the Group does not enter into speculative derivative contracts.
Loans and receivables
Loans and receivables are initially stated at their fair value plus transaction costs, then subsequently at amortised cost using the effective interest method, 
if applicable, less impairment losses. Provisions against trade receivables are made when there is objective evidence that the Group will not be able to 
collect all amounts due to it in accordance with the original terms of those receivables. The amount of the write down is determined as the difference 
between the assets’ carrying amount and the present value of the estimated future cash flows.
Cash and cash equivalents
The Group manages short-term liquidity through the holding of cash and highly liquid interest bearing deposits. Only deposits that are readily convertible 
into cash, with no penalty of lost interest, are shown as cash or cash equivalent.
Trade payables
Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Group becomes a party to the contractual provisions 
of the instrument. Financial liabilities categorised as at fair value through profit or loss are recorded initially at fair value; all transaction costs are recognised 
immediately in the Statement of comprehensive income. All other financial liabilities are recorded initially at fair value, net of direct issue costs.
Financial liabilities categorised as at fair value through profit or loss are re-measured at each reporting date at fair value, with changes in fair value being 
recognised in the Statement of comprehensive income. All other financial liabilities are recorded at amortised cost using the effective interest method, 
with interest related charges recognised as an expense in finance cost in the Statement of comprehensive income.
A financial liability is derecognised only when the obligation is extinguished, that is, when the obligation is discharged, cancelled or expires. Where debt 
has been converted into equity, the liability is extinguished at no gain no loss. The equity is measured at the carrying value of the extinguished debt.
(J) Foreign exchange
Transactions in foreign currencies are translated into the functional currency of the individual entity at the exchange rate ruling at the date of the 
transaction. Monetary assets and liabilities in foreign currencies are translated at the rates of exchange ruling at the balance sheet date. Non-monetary 
items that are measured at historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Non-monetary items that 
are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.
Any exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were 
initially recorded are recognised in the profit or loss in the period in which they arise. Exchange differences on non-monetary items are recognised in the 
Statement of other comprehensive income to the extent that they relate to a gain or loss on that non-monetary item taken to the Statement of changes 
in shareholders’ equity, otherwise such gains and losses are recognised in the Statement of comprehensive income.
The assets and liabilities in the financial statements of foreign subsidiaries are translated into the Parent Company’s presentation currency at the rate of exchange 
ruling at the balance sheet date. Income and expenses are translated at the actual rate at the date of transaction. The exchange differences arising from 
the retranslation of the opening net investment in subsidiaries are recognised in other comprehensive income and taken to the “Foreign exchange reserve” 
in equity. On disposal of a foreign operation the cumulative translation differences (including, if applicable, gains and losses on related hedges) are transferred 
to profit or loss as part of the gain or loss on disposal.
(K) Taxation
Current tax is the tax currently payable based on taxable profit for the year. Current tax credits arise from the UK legislation regarding the treatment 
of certain qualifying research and development costs, allowing for the surrender of tax losses attributable to such costs in return for a tax rebate.
Deferred taxes are calculated using the liability method on temporary differences. Deferred tax is generally provided on the difference between the 
carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill, nor on the initial 
recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary 
differences associated with shares in subsidiaries and joint ventures is not provided if reversal of these temporary differences can be controlled by the 
Group and it is probable that reversal will not occur in the foreseeable future. In addition, tax losses available to be carried forward as well as other income 
tax credits to the Group are assessed for recognition as deferred tax assets.
Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the extent that it is probable that the underlying 
deductible temporary differences will be able to be offset against future taxable income. Current and deferred tax assets and liabilities are calculated at 
tax rates that are expected to apply to their respective period of realisation, provided they are enacted or substantively enacted at the balance sheet date.
Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the Statement of comprehensive income, except where they 
relate to items that are charged or credited directly to equity (such as the revaluation of land) in which case the related deferred tax is also charged or 
credited directly to equity. 24 Lombard Risk Management plc Annual report and accounts 2011
Notes to the consolidated financial statements continued
For the year ended 31 March 2011
1. Accounting policies continued
(L) Leased assets
The Group does not hold any finance leases.
All leases referred to are regarded as operating leases and the payments made under them are charged to the Statement of comprehensive income 
on a straight line basis over the lease term. Lease incentives are spread over the term of the lease.
Where leased buildings are vacated or under-utilised a provision is made for the loss of benefit over the remainder of the lease.
(M) Pension costs
The Group operates a number of defined contribution pension schemes. The assets of the schemes are held separately from those of the Group in independently 
administered funds. The amount charged to profit or loss represents the contributions payable to the schemes in respect of the accounting period.
(N) Share options issued to employees
All share-based payment arrangements granted after 7 November 2002 that had not vested prior to 1 April 2006 are recognised in the financial statements.
All goods and services received in exchange for the grant of any share based payment are measured at their fair values. Where employees are rewarded 
using share-based payments, the fair values of employees’ services are determined indirectly by reference to the fair value of the instrument granted to 
the employee. This fair value is appraised at the grant date using a binomial model, taking into account the terms and conditions upon which the options 
were granted.
All equity settled share-based payments are ultimately recognised as an expense in the Statement of comprehensive income with a corresponding credit 
to “other reserves”.
If vesting periods or other non-market vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate 
of the number of share options expected to vest. Estimates are subsequently revised if there is any indication that the number of share options expected 
to vest differs from previous estimates. Any cumulative adjustment prior to vesting is recognised in the current period. No adjustment is made to any 
expense recognised in prior periods if share options ultimately exercised are different to that estimated on vesting.
Upon exercise of share options the proceeds received net of attributable transaction costs are credited to share capital and, where appropriate, 
share premium.
(O) Impairment testing of goodwill, other intangible assets and property, plant and equipment
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating 
units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level. Goodwill is allocated to those 
cash-generating units that are expected to benefit from synergies of the related business combination and represent the lowest level within the Group 
at which management monitors the related cash flows.
Goodwill, other individual assets or cash-generating units that include goodwill, other intangible assets with an indefinite useful life, and those intangible 
assets not yet available for use are tested for impairment at least annually. All other individual assets or cash-generating units are tested for impairment 
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the assets or cash-generating unit’s carrying amount exceeds its recoverable amount. The recoverable 
amount is the higher of fair value, reflecting market conditions less costs to sell, and value in use based on an internal discounted cash flow evaluation. 
Impairment losses recognised for cash-generating units, to which goodwill has been allocated, are credited initially to the carrying amount of goodwill. 
Any remaining impairment loss is charged pro rata to the other assets in the cash-generating unit. With the exception of goodwill, all assets are 
subsequently reassessed for indications that an impairment loss previously recognised may no longer exist.
(P) Key judgements in applying the entity’s accounting policies and goodwill impairment
The Group’s management makes estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical 
experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual 
experience may differ from these estimates and assumptions. The estimates and assumptions that have a reasonable risk of causing material adjustment 
to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Recognition of revenue
Revenue is recognised according to the accounting policies as stated and is dependent upon the type of income. Where contracts include different 
elements of revenue, those elements are recognised in line with those policies, with fair values attributed to each component part.
Judgement is used in the recognition of revenue from long-term projects. 
If work is contracted on a fixed-cost basis, revenue is recognised in line with an estimation of the percentage of completion of the project. This estimation 
is based upon the views of the consultants implementing the projects as to the proportion of the project completed and this is supported by data from 
a time recording system. There is, however, an element of judgement involved that can impact the recognition of revenue. This process and individual 
project recognition is reviewed regularly to ensure that, whilst still subjective, the reflection of revenue is the best approximation possible.
Where projects include the up-front delivery of immediately usable software, the element of non-refundable licence revenue is recognised on receipt of the 
software by the customer, with other revenue being recognised in line with the performance of the contracted services. The unbundling of this contract 
revenue requires management to exercise judgement as to the relative fair values of the component parts of the contract. 25 Lombard Risk Management plc Annual report and accounts 2011
1. Accounting policies continued
(P) Key judgements in applying the entity’s accounting policies and goodwill impairment continued
Goodwill impairment
An impairment loss is recognised if the amount by which the assets or cash-generating unit’s carrying amount exceeds its recoverable amount. To determine 
the recoverable amount, management estimates expected future cash flows from each cash-generating unit and determines a suitable interest rate in 
order to calculate the present value of those cash flows. In the process of measuring expected future cash flows management makes assumptions about 
future operating results. These assumptions relate to future events and circumstances. The actual results may vary and may cause significant adjustments 
to the Group’s assets within the next financial year.
In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment 
to asset-specific risk factors.
Deferred tax assets
The assessment of the probability of future taxable income on which deferred tax assets can be utilised is based on the Group’s latest approved budget 
forecasts, which is adjusted for significant non-taxable income and expense. If a positive forecast of taxable income indicates the probable use of a deferred 
tax asset, especially when it can be utilised without a time limit, that deferred tax asset is usually recognised in full. The recognition of deferred tax assets that 
are subject to certain legal or economic limit or uncertainties is assessed individually by management based on the specific facts and circumstances.
2. Business segmentation
Management currently identifies the Group’s two product lines as operating segments as further described in the accounting policies. These operating 
segments are monitored and strategic decisions are made on the basis of segment operating results.
Segment information can be analysed as follows for the reporting periods under review:
       Year ended Year ended 
       31 March 2011 31 March 2010 
       £ £
Revenue  
Regulatory Compliance software      6,506,805 4,201,278
Risk Management and Trading software     5,294,370 4,748,181
Group unallocated      — —
Total revenue      11,801,175 8,949,459
Depreciation and amortisation  
Regulatory compliance software      (76,236) (93,893)
Risk management and trading software     (60,621) (54,958)
Group unallocated      — —
Total depreciation and amortisation     (136,857) (148,851)
Interest expense  
Regulatory compliance software      — —
Risk management and trading software     — —
Group unallocated      4,727 (107,889)
Total interest income/(expense)      4,727 (107,889)
Other costs  
Regulatory compliance software      (5,765,428) (5,873,633)
Risk management and trading software     (4,795,023) (3,537,500)
Group unallocated       (544,046) (870,668)
Total other costs      (11,104,497) (10,281,801)
Total costs      (11,236,627) (10,538,541)
Profit/(loss)  
Regulatory compliance software      665,141 (1,766,248)
Risk management and trading software     438,726 1,155,723
Group unallocated      (539,319) (978,557)
Total profit/(loss) before taxation     564,548 (1,589,082)
Net assets  
Regulatory compliance software      (1,703,416) (2,368,557)
Risk management and trading software     4,237 ,526 3,798,800
Group unallocated      42,029 (101,710)
Net assets      2,576,139 1,328,533
The two segments operate independently and there is no inter-segment income or expenditure.  26 Lombard Risk Management plc Annual report and accounts 2011
Notes to the consolidated financial statements continued
For the year ended 31 March 2011
2. Business segmentation continued
The Group’s revenues from customers and its non-current assets are divided into the following geographical areas: 
       Year ended Year ended 
       31 March 2011 31 March 2010 
       £ £
Revenue  
United Kingdom      6,473,995 3,985,568
Rest of Europe, Middle East and Africa     1,892,641 1,121,372
The Americas      2,459,090 2,738,291
Asia Pacific      975,449 1,104,228
Total revenue      11,801,175 8,949,459
Non-current assets  
United Kingdom      45,394 17,178
The Americas      18,445 14,749
Asia Pacific      51,127 130,034
Non-current assets      114,966 161,961
In this year ended 31 March 2011 9% (2010: 13%) of the revenue depended on a single customer.
3. Directors and employees
       2011 2010 
Directors      £ £
Emoluments      657 ,499 408,131
Pension costs      — 1,890
       657 ,499 410,021
No share options were exercised by the highest paid Director. There were no pension contributions made in respect of the highest paid Director. 
During the year no director accrued benefit under a Company pension scheme (2010: one).
The Directors of the Company are the key management personnel.
Individual Director’s emoluments and compensation
       2011 2010 
       £ £
John Wisbey      260,000 220,000
Paul Tuson      29,928 —
Nick Davies      196,034 —
Ian Peacock      12,500 25,000
Brian Crowe      20,000 20,000
Mike Shinya      18,295 —
Philip Crawford      41,250 —
Chris Langridge      68,247 —
Keith Butcher (includes £50,000 compensation for loss of office in 2010)    11,245 116,686
Michael Thomas       — 26,445
Total      657 ,499 408,131
   At start   At the Date from   
Share options  of the year Price paid Exercise price end of year which exercisable Expire dates
John Wisbey  555,555 — 9.0p 555,555 14/12/2006 14/12/2011
John Wisbey  1,194,445 — 11.0p 1,194,445 14/12/2006 14/12/2011
Ian Peacock  300,000 — 9.0p — 14/12/2006 14/12/2011
Brian Crowe  200,000 — 9.0p 200,000 14/12/2006 14/12/2011
Brian Crowe  — — 5.5p 800,000 14/01/2013 14/01/2016
Paul Tuson  — — 5.5p 2,400,000 14/01/2013 14/01/2016
Nick Davies  1,000,000 — 6.0p 1,000,000 20/06/2010 20/06/2013
Nick Davies  — — 4.5p 3,600,000 28/05/2012 28/05/2015
Mike Shinya  — — 4.5p 2,100,000 28/05/2012 28/05/2015
Philip Crawford  — — 4.5p 2,400,000 28/05/2012 28/05/2015
Philip Crawford  — — 5.5p 600,000 14/01/2013 14/01/2016 27 Lombard Risk Management plc Annual report and accounts 2011
3. Directors and employees continued
Individual Director’s emoluments and compensation continued
       2011 2010 
Staff costs including Directors      £ £
Wages and salaries       6,809,539 6,355,573
Social security costs      1,044,476 875,819
Pension costs      114,420 129,110
Share-based payments (credit)/charge (note 15)     (4,626) 19,771
Total staff costs      7 ,963,809 7,380,273
The average monthly number of employees (excluding Directors) during the year was:
       2011 2010 
       Number Number
Office and administration      14 13
Operational      155 156
Total       169 169
4. Profit/(loss) from operations
The profit/(loss) from operations before taxation is stated after charging:
       2011 2010 
       £ £
Auditor’s remuneration – Company audit fee     25,000 25,000
Fees payable to the Company auditor for other services  
– Subsidiary company audit fees      14,500 20,000
– Tax services      8,500 10,500
– Other services      2,500 569
Depreciation       123,547 137,891
Amortisation      13,310 10,960
Foreign exchange      40,135 34,232
Operating leases – land and buildings     1,035,204 815,334
Research and development expenditure     2,733,924 2,661,518
Fees payable to the Company’s auditor, Grant Thornton UK LLP, and its associates for non-audit services to the Company itself are not disclosed in the 
individual financial statements of the Company because the Company’s Group financial statements are required by the Companies (Disclosure of Auditor 
Remuneration and Liability Limitation Agreements) Regulations 2008, Regulation 5(1) to disclose such fees on a consolidated basis.
5. Finance expense
       2011 2010 
       £ £
Interest on bank loans and overdrafts      — 464
Other interest payable      5 108,451
       5 108,915
6. Finance income
       2011 2010 
       £ £
Interest on bank deposits      1,432 439
Other interest receivable      3,300 587
       4,732 1,026 28 Lombard Risk Management plc Annual report and accounts 2011
Notes to the consolidated financial statements continued
For the year ended 31 March 2011
7. Taxation
(A) Analysis of charge in the period
       2011 2010 
       £ £
Current Tax:
– UK corporation tax on profits in the period     — —
– Foreign tax on profits in the period      13,343 (4,731)
Total current tax charge/(credit)      13,343 (4,731)
Deferred tax:
– Origination and reversal of timing differences     (721,500) —
Total deferred tax credit      (721,500) —
Taxation credit on ordinary activities     (708,157) (4,731)
(B) Research and development tax credits
The Group has received to date research and development tax credits of £816,082 (2010: £816,082) relating to financial years ended 31 March 2002 to 2007. 
As for all companies that have received these credits, the amounts are subject to potential future HM Revenue & Customs claw back.
(C) Tax on profit/(loss) on ordinary activities
The tax assessed for the period is the standard rate of corporation tax in the UK of 28% (2010: 28%). The difference is explained as follows:
       2011 2010 
       £ £
Profit/(loss) on ordinary activities before tax     564,548 (1,589,082)
Profit/(loss) on ordinary activities multiplied by the standard rate of corporation tax in the UK of 28% (2010: 28%)  158,073 (444,943)
Effect of:  
– Depreciation in excess of capital allowance for the period    11,808 12,358
– Other short term timing differences      (181,566) —
– (Utilisation)/increase of tax losses      (126,300) 420,546
– Expenses not deductible for tax purposes     137 ,985 7,308
– Foreign tax suffered      13,343 —
Current tax charge/(credit) for the period     13,343 (4,731)
(D) Unrecognised deferred tax
A deferred tax asset of £0.7m (2010: £1.8m) is unrecognised and relates principally to trading losses carried forward.
(E) Deferred tax asset
The deferred tax asset included in the balance sheet relates to the carry forward of tax losses.
       2011 2010 
       £ £
Deferred tax asset      721,500 —
The Directors have recognised a deferred tax asset in respect of carried forward trading tax losses as, based on current estimates, the Company is forecast 
to make sufficient trading tax profit in the future against which these losses can be offset. The movement in the deferred tax asset in the year is recognised 
in full in the profit for the year, no amount is recognised directly in equity.
The deferred tax asset is not expected to crystallise in full in the next financial year.
8. Profit/(loss) per share
Basic profit/(loss) per share has been calculated by dividing the profit/(loss) after taxation by the weighted average number of ordinary shares in issue 
during each period.
Diluted loss per share is calculated by adjusting the weighted average number of ordinary shares in issue on the assumption of conversion of all dilutive potential 
ordinary shares. The Group has only one category of dilutive potential ordinary shares; those share options were granted under the Enterprise Management Incentive 
Plan. When a loss is incurred, since the conversion of potential ordinary shares to ordinary shares would decrease the net loss per share, options are not 
dilutive and therefore diluted and basic losses per share are the same (see note 15). During the report period the fair value of ordinary shares was 3.83p. Since 
none of the share options exercise price is less than average market price there is no potential dilutive effect for ordinary shares. 
Profit/(loss) per share
       Year ended Year ended 
       31 March 2011 31 March 2010
Profit/(loss) for the year and basic and diluted earnings attributable to ordinary shareholders (pound)  1,272,705 (1,584,351)
Weighted average number of ordinary shares     206,926,786 167,190,485
Profit/(loss) per share (pence)      0.62 (0.95)
Effect of dilutive share options      — —
Adjusted weighted average number of ordinary shares     206,926,786 167,190,485
Diluted profit/(loss) per share (pence)      0.62 (0.95) 29 Lombard Risk Management plc Annual report and accounts 2011
9. Property, plant and equipment
      Computer Fixtures, fittings  
      hardware and equipment Total 
Group     £ £ £
Cost   
At 1 April 2009     1,015,764 718,914 1,734,678
Additions     88,851 — 88,851
Foreign exchange effect     (35,653) (7,686) (43,339)
At 31 March 2010     1,068,962 711,228 1,780,190
1 April 2010     1,068,962 711,228 1,780,190
Additions     75,991 — 75,991
Foreign exchange effect     (5,140) (5,026) (10,166)
At 31 March 2011     1,139,813 706,202 1,846,015
Depreciation   
At 1 April 2009     927 ,940 566,940 1,494,880
Charge for the year     78,191 59,700 137 ,891
Foreign exchange effect     (3,934) (400) (4,334)
At 31 March 2010     1,002,197 626,240 1,628,437
At 1 April 2010     1,002,197 626,240 1,628,437
Charge for the year     66,335 57 ,212 123,547
Foreign exchange effect     (5,295) (4,545) (9,840)
At 31 March 2011     1,063,237 678,907 1,742,144
Net book value   
At 31 March 2011     76,576 27 ,295 103,871
At 31 March 2010     66,765 84,988 151,753
10. Intangible assets
       Other 
      Goodwill intangible assets Total 
Group     £ £ £
Cost   
At 1 April 2009     3,632,680 253,471 3,886,151
Additions     — 10,353 10,353
Foreign exchange effect     — (677) (677)
At 31 March 2010     3,632,680 263,147 3,895,827
At 1 April 2010     3,632,680 263,147 3,895,827
Additions     — 14,177 14,177
Foreign exchange effect     — (352) (352)
At 31 March 2011     3,632,680 276,972 3,909,652
Amortisation   
At 1 April 2009     — 242,030 242,030
Provided in the year     — 10,960 10,960
Foreign exchange effect     — (51) (51)
At 31 March 2010     — 252,939 252,939
At 1 April 2010     — 252,939 252,939
Provided in the year     — 13,310 13,310
Foreign exchange effect     — (372) (372)
At 31 March 2011     — 265,877 265,877
Net book value   
At 31 March 2011     3,632,680 11,095 3,643,775
At 31 March 2010     3,632,680 10,208 3,642,888 30 Lombard Risk Management plc Annual report and accounts 2011
Notes to the consolidated financial statements continued
For the year ended 31 March 2011
10. Intangible assets continued
The goodwill relates solely to the acquisition of STB Systems Limited, since renamed Lombard Risk Compliance Limited, which was acquired in 2005 
and which constitutes the Group’s regulatory compliance business. An impairment review has therefore been carried-out on this cash-generating unit.
In accordance with IAS 36 “Impairment of assets” the cash-generating unit has been assessed by comparing its carrying value to its recoverable 
amount. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell, and value in use based on an internal 
discounted cash flow evaluation.
For the year ended 31 March 2011, the goodwill recoverable amount was determined based on value-in-use calculations, which are based on detailed 
five year discounted forecast cash flows (using a discount rate of 12%). Cash flows for the regulatory compliance business are based on management 
forecasts, which are approved by the Board and reflect management’s expectations of sales growth, operating costs and margin based on past experience 
as well as the current order book. Management has used a five year period in the cash flow projections as the regulatory compliance business experiences 
a low level of customer turnover and the technology is based on regulations which, whilst subject to periodic amendment, are unlikely to be withdrawn.
For the years 2013 to 2016 no new business is forecast with retention levels of recurring revenues averaging 90% per annum. In view of this, no sales and 
marketing or research and development costs are forecast for the years 2013 to 2016. 
Sensitivity to changes in key assumptions: impairment testing is dependent on management’s estimates and judgements, in particular in relation to the 
forecasting of future cash flows and the discount rate applied to the cash flows. Management has concluded that no reasonably possible change in the 
key assumptions would cause the carrying value of goodwill to exceed its recoverable account.
The table below shows the impairment charge that would be required if the assumptions in the calculation of the goodwill value in use were changed:
       25% increase  25% decrease 
       in discount rate in growth rate 
       £ £
Goodwill impairment charge      — —
11. Trade and other receivables
       2011 2010 
       £ £
Trade receivables      631,422 846,224
Other receivables      454,361 348,916
Prepayments and accrued income      166,875 384,693
       1,252,658 1,579,833
The amounts are short term and the Directors consider that the carrying amount of these trade and other receivables approximates to their fair value. All of the 
Group’s trade and other receivables have been reviewed for indications of impairment. As at 31 March 2011, trade receivables of £631,422 (2010: £846,224) 
were fully recoverable. An impairment provision of £201,724 (2010: £224,467) has been made against the invoices of 27 clients (2010: 28 clients). In addition, 
some of the unimpaired trade receivables are past due as of the reporting date. Trade receivables past due but not impaired are as follows:
       2011 2010 
       £ £
Not more than three months      187 ,290 213,074
More than three months but not more than six months     52,372 —
More than six months but less than one year     15,146 3,752
More than one year      1,337 —
       256,145 216,826
All other receivables (non-trade) are not past due.
Movements in Group provisions for impairment of trade receivables, as included in administrative expenses, are as follows:
       2011 2010 
       £ £
Opening balance      224,467 52,914
Movement in provision for receivables     (22,743) 171,553
Closing balance      201,724 224,467
The Group operates in a global market with income arising in a number of different currencies, principally Sterling, Euros or US Dollars. The Group does not 
hedge potential future income, since the existence, quantum and timing of such income cannot be accurately predicted. 31 Lombard Risk Management plc Annual report and accounts 2011
12. Trade and other payables
       2011 2010 
       £ £
Trade payables      150,785 346,394
Other taxes and social security costs      572,503 589,200
Other payables      1,254,235 1,017,843
       1,977 ,523 1,953,437
13. Financial risk management and financial instruments
The Group’s multinational operations expose it to financial risks that include market risk, credit risk, operational risk and liquidity risk. The Directors review 
and agree policies for managing each of these risks and they are summarised below. These policies have remained unchanged from previous years.
Market risk
Market risk for the Group encompasses all those market risk factors that impact the value of the Group’s assets and liabilities and the expected value 
in base currency of the Group’s revenues and costs. The main risk factors are currency risk, inflation risk and interest rate risk. The Group’s policies for 
managing these are as follows:
I) Currency risk
The Group is exposed to translational and transactional foreign exchange risk as it operates in various currencies, including US Dollars, the Euro, Chinese 
Yuan, Hong Kong Dollars and Singapore Dollars. Although, through its own software, the Group has access to sophisticated models for the management 
of foreign exchange risk, there has historically been no use of foreign exchange derivatives to manage this position on the basis that the overall effect on 
the Group’s income statement has not been large enough to warrant the management, the costs and margin requirements of this activity. As the Company 
grows this position may change. The Company’s main on-going transactional exposure is to be long of Euro and US Dollars and short of Chinese Yuan. 
II) Inflation risk
The Group has exposure to the inflationary effect of operating in countries in which it operates, offset by its ability to raise prices in those countries in 
which it sells. The Group’s cost base is mainly exposed to the inflation rates and changes in payroll taxes in the United Kingdom, the United States and 
China. The inflation rate for salaries in specialised parts of the financial sector in a financial centre such as London, New York or Shanghai is often different 
from the relevant country’s overall rate of wage inflation. Most of the Group’s software contracts give the Group the ability to raise prices on a formula 
linked to the inflation rate of the currency of the contract. No specific hedging of inflation risk has been carried out.
III) Interest rate risk
Interest rate risk arises primarily on the investment of the Group’s cash balances or on its borrowings and the present value of the Group’s receivables. 
The Group finances its operations through retained cash reserves. When the Group is a net depositor of funds, the Group stands to gain if interest rates 
rise and to lose if interest rates fall, ignoring any possible positive or negative correlation effects with business demand for the firm’s products or inflationary 
pressures on the firm’s cost base that might arise from changes in interest rates. When the Group is a net borrower of funds, the opposite is the case. 
Although through its own Oberon
®
 software the Group has access to sophisticated models for the management of interest rate risk, there has been no 
use of interest rate derivatives to manage this position on the basis that the amounts are not large enough to warrant this activity. The policy of the Group 
is to monitor exposure to interest rate risk and take into account potential movements in interest rates as well as liquidity considerations when selecting 
methods of financing.
Credit risk
Most of the Group’s business is with banks, asset management firms and other high-quality companies, and the Group’s bad debt experience over 
15 years has been negligible. The Group consequently has not considered taking out credit insurance and is not likely to do so in the foreseeable future. 
Deposits are placed with high quality banks.
Although through its own Firmament
®
 software the Group has access to sophisticated models for the management of credit spreads and credit 
derivatives, there has been no use of credit derivatives to mitigate counterparty risk and no such use is contemplated.
The Group’s exposure to credit risk is limited to the carrying amount of financial assets recognised at the balance sheet date, as summarised below: 
       2011 2010 
Classes of financial assets – carrying amounts      £ £
Cash and cash equivalents      1,782,335 702,194
Trade and other receivables       1,085,783 1,195,140
       2,868,118 1,897,334 32 Lombard Risk Management plc Annual report and accounts 2011
Notes to the consolidated financial statements continued
For the year ended 31 March 2011
13. Financial risk management and financial instruments continued
Operational risk
The Group has numerous operational risks, ranging from control over bank accounts to its processes for delivering and supporting software to a required 
level of quality and on a timely basis, and retention and recruitment of key personnel. A key risk, as for any company, is the reputation risk that might arise 
from poor execution, non-delivery or late delivery of a high-profile project or breach of client confidentiality for sensitive data. Further risks may arise where 
late delivery of software or untimely delivery of related services causes a client to miss regulatory deadlines. A detailed operational risk review is outside 
the scope of this report, but the Board attaches importance to maintaining appropriate internal controls to identify and limit these risks.
Liquidity risk
The Group seeks to manage financial risk by ensuring that sufficient liquidity is available to meet foreseeable needs and by investing cash assets safely 
as well as profitably. At 31 March 2011 the Group financial liabilities were as follows:
       2011 2010 
       £ £
Current liabilities
Trade and other payables      1,405,020 1,364,237
Categorised as financial liabilities measured at amortised cost    1,405,020 1,364,237
All amounts are short term and payable in zero to three months. 
14. Share capital
       2011 2010 
       £ £
Authorised  
714,034,085 ordinary shares of 0.5p each (2010: 714,034,085)    3,570,170 3,570,170
Allotted, called up and fully paid  
206,926,786 ordinary shares of 0.5p each (2010: 206,926,786)    1,034,634 1,034,634
429,829,575 deferred shares of 0.1p each (2010: 429,829,575)    429,831 429,831
       1,464,465 1,464,465
The deferred shares carry no rights to receive dividends or to participate in any profits of the Company. The shareholders are not entitled to attend any 
meetings of the Company or have any rights to participate in any return of capital (except on a winding up). The deferred shares are not transferable other 
than with the consent of all the Directors of the Company.
Share issue
No shares were issued during the reporting period. In the year ended 31 March 2010 the Company issued 70,750,000 0.5p ordinary shares at the then 
market value of 4p each. The Company recorded this transaction as £353,750 issuance of ordinary share capital and recognised £2,476,250 as share premium, 
from which £194,121 of issue costs was netted off. Part of the shares issued was to the Company Directors, further details of which are provided in note 18.
15. Share options
Employee share options charge
The fair value is based on a number of assumptions as stated below.
In accordance with the accounting policy stated under note 1(N), the volatility of the Company’s shares for the relevant period has been estimated at 30%, 
giving a credit to the income statement for the year ended 31 March 2011 of £4,626 (2010: charge £19,771), with the same amount being debited to reserves. 
The expected volatility has been based on historical volatility, using market prices of Lombard Risk Management plc shares between 4 September 2004 
and 31 March 2010.
Equity settled share-based payments
The Company has a share option scheme for all employees. Options are granted to employees based on the discretion of the Directors to reward performance. 
The options are settled in equity once exercised. If the options remain unexercised after the end of the exercising period, the options expire. Options are 
forfeited if the employee leaves the Company. 33 Lombard Risk Management plc Annual report and accounts 2011
15. Share options continued
Equity settled share-based payments continued
The fair values of the options were calculated using a numerical binomial model assuming the inputs shown below:
  At start    At end Exercise Exercise Exercise 
   of year Granted Exercised Lapsed  of year  price (p)  date from  date to
2004 EMI Scheme 730,000 — — (730,000) — 9.00 March 2006 March 2011
  2,050,000 — — (240,000) 1,810,000 9.00 April 2008 April 2013
  870,000 — — (70,000) 800,000 9.00 December 2008 December 2013
  3,900,000 — — (2,400,000) 1,500,000 6.00 October 2011 October 2016
  1,000,000 — — — 1,000,000 6.00 June 2010 June 2015
  — 1,414,365 — — 1,414,365 4.50 May 2012 May 2015
  — 7,210,000 — — 7 ,210,000 5.50 January 2013 January 2016
Unapproved Scheme 1,520,555 — — (500,000) 1,020,555 9.00 December 2006 December 2011
  1,194,445 — — — 1,194,445 11.00 December 2006 December 2011
  915,555 — — (845,555) 70,000 9.00 April 2008 April 2013
  444,445 — — (444,445) — 11.00 April 2008 April 2013
  100,000 — — (100,000) — 6.00 October 2011 October 2016
  — 6,685,635 — — 6,685,635 4.50 May 2012 May 2015
  — 1,950,000 — — 1,950,000 5.50 January 2013 January 2016
  12,725,000 17,260,000 — (5,330,000) 24,655,000   
       28 May 14 January 
Grant date      2010 2011
Share price at grant      3.62p 4.10p
Exercise price      4.50p 5.50p
Contractual life (years)      2 3
Staff turnover      50% 50%
Risk-free rate                                            Discount curve used for UK on the day of valuation
Expected volatility      30% 30%
Expected dividend yield      — —
Fair value of option       0.50p 0.30p
Details of the number of share options and the weighted average exercise price (“WAEP”) outstanding during the year are as follows:
     2011  2011 2010 2010 
     Number WAEP Number WAEP
Outstanding at beginning of the year    12,725,000 8.10p 10,120,000 8.37p
Granted during the year    17,260,000 5.03p 4,000,000 6.00p
Lapsed during the year    (5,330,000) 7.76p (1,395,000) 7.70p
Outstanding at end of the year    24,655,000 6.01p 12,725,000 8.10p
Exercisable at the year end    5,895,000  7,250,000 
The share options outstanding at the end of the year have the following exercise prices:
      Exercise  2011 2010 
Expiry date     price Number Number
14 December 2011     9.0p 1,020,555 —
14 December 2011     11.0p 1,194,445 —
24 April 2013     9.0p 1,880,000 5,216,110
24 April 2013     11.0p — 1,638,890
28 May 2013     4.5p 2,700,000 —
1 December 2013     9.0p 800,000 870,000
28 May 2014     4.5p 2,700,000 —
28 May 2015     4.5p 2,700,000 —
20 June 2015     6.0p 1,000,000 1,000,000
14 January 2016     5.5p 9,160,000 —
19 October 2016     6.0p 1,500,000 4,000,000
       24,655,000 12,725,000 34 Lombard Risk Management plc Annual report and accounts 2011
Notes to the consolidated financial statements continued
For the year ended 31 March 2011
16. Operating leases
The Group had commitments under non-cancellable operating leases in respect of land and buildings. The Group’s future minimum operating lease 
payments are as follows:
       2011 2010 
       £ £
Within one year or less      166,373 126,234
Within one to five years      1,497 ,979 904,080
Total      1,664,352 1,030,314
17. Pensions
A Group company contributes to a defined contribution pension scheme on behalf of a limited number of employees of that subsidiary. The assets 
of the scheme are administered by trustees in a fund independent of the Company. Other defined contribution pension schemes to which the Group 
makes contributions on behalf of employees are of the stakeholder variety, again totally independent of the Company.
18. Related party transactions
There are no related party transactions in this reporting year. However in the comparative period, the following related party transactions occurred: 
In August 2009 John Wisbey made an advance to the Company of £100,000, which was added to an existing loan balance of £1,090,000. The total 
balance outstanding to him of £1,190,000 was settled in October 2009 partially (£790,000) by conversion of 0.5p ordinary shares at 4.0p per share  
as the same time and price as the institutional placing and partially (£400,000) by cash payment. The loan carried interest at 1% per month during  
the outstanding periods.
Ian Peacock advanced an amount of £10,000 to the Company on 12 July 2007. Michael Thomas advanced a sum of £30,000 on 29 June 2007. The loan 
was interest free until 31 March 2008 and thereafter the loan attracted interest of 1% per month. Outstanding loans of £10,000 and £30,000 repayable 
to Ian Peacock and Michael Thomas respectively were settled in October 2009 by conversion of the full outstanding balance to 0.5p ordinary shares at 
4.0p per share. Both loans carried interest at 1% per month before settlement.
In July 2009 Brian Crowe made an advance to the Company of £200,000, which was added to an existing loan balance of £200,000. The total balance 
of £400,000 was settled in October 2009, half by conversion to 0.5p ordinary share and half by cash payment. The loan carried interest at 1% per month 
while outstanding.
There are no outstanding Directors’ loans at the start or end of the financial year.
Key management of the Group are the Directors of the Parent Company. Details of the Directors’ remuneration is set out in note 3.
19. Controlling personnel related parties
In the opinion of the Directors, there is no ultimate controlling party at 31 March 2011. 35 Lombard Risk Management plc Annual report and accounts 2011
Independent auditor’s report
Parent Company financial statements
Independent auditor’s report to the members of Lombard Risk Management plc
We have audited the Parent Company financial statements of Lombard Risk Management plc for the year ended 31 March 201 1, which comprise the Parent Company 
balance sheet and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom 
Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
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 set out on page 12, the Directors are responsible for the preparation of the Parent Company 
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 Parent Company 
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 (“APB’s”) ethical standards for auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the APB’s website at www.frc.org.uk/apb/scope/private.cfm.
Opinion on financial statements
In our opinion the Parent Company financial statements:
• give a true and fair view of the state of the Company’s affairs as at 31 March 2011; 
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matter 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 
Parent Company 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:
•  adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches 
not visited by us; or
•  the Parent Company financial statements are not in agreement with the accounting records and returns; or
•  certain disclosures of Directors’ remuneration specified by law are not made; or
•  we have not received all the information and explanations we require for our audit.
Other matter
We have reported separately on the Group financial statements of Lombard Risk Management plc for the year ended 31 March 2011.
Christopher Smith
Senior Statutory Auditor
For and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
30 May 2011 36 Lombard Risk Management plc Annual report and accounts 2011
      As at As at 
      31 March 2011 31 March 2010 
Company number: 03224870     Note £ £
Fixed assets   
Tangible assets     4 9,286 11,610
Intangible assets     4 5,409 —
Investments in subsidiaries     5 12,611,378 12,383,529
      12,626,073 12,395,139
Current assets   
Debtors due within one year     6 2,908,603 4,876,159
Cash at bank and in hand      3,219 339
      2,911,822 4,876,498
Creditors: amounts falling due within one year    7 (1,127,761) (10,896,275)
Net current assets/(liabilities)      1,784,061 (6,019,777)
Total assets less current liabilities     14,410,134 6,375,362
Net assets      14,410,134 6,375,362
Capital and reserves   
Called up share capital     9 1,464,465 1,464,465
Share premium     10 4,795,033 4,795,033
Other reserves     10 7,174,102 7,178,728
Profit and loss account     10 976,534 (7,062,864)
Shareholders’ funds      14,410,134 6,375,362
The financial statements were approved by the Board on 27 May 2011 and signed on its behalf by:
John Wisbey Paul Tuson
Chief Executive Officer Chief Finance Officer
The accompanying accounting policies and notes form an integral part of these accounts.
Company balance sheet
As at 31 March 2011 37 Lombard Risk Management plc Annual report and accounts 2011
1. Accounting policies
(A) Basis of preparation
The separate financial statements of the Company are presented as required by the Companies Act 2006. As permitted by that Act, the separate financial 
statements have been prepared in accordance with all applicable United Kingdom accounting standards and on a historical cost basis.
(B) Going concern
The financial statements have, as in previous years, been prepared on a going concern basis. 
In forming an opinion that the Company and Group is a going concern, the Directors have taken particular note of the positive trading performance in 
the year ended 31 March 2011, both in the signing of new business contracts, and in the realised financial results. These show an upturn in the Group’s 
performance. The Directors have prepared cash flow forecasts for the period ending 30 June 2012 which shows that the Company and Group have 
sufficient facilities for ongoing operations. Whilst there will always remain some inherent uncertainty within the aforementioned forecasts, the Directors 
believe the Company and Group have sufficient resources to continue in operational existence for at least twelve months from the date of approval of 
these financial statements.
Accordingly the Directors continue to adopt the going concern basis in preparing the financial statements for the year ended 31 March 2011.
(C) Foreign exchange
Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign 
currencies are retranslated at the rate of exchange ruling at the balance sheet date. All differences are taken to the profit and loss account.
(D) Deferred taxation
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events 
that result in an obligation to pay more, or a right to pay less, tax in the future have occurred at the balance sheet date. Deferred tax assets are recognised 
when it is more likely than not that they will be recovered. Deferred tax is measured using rates of tax that have been enacted or substantively enacted by 
the balance sheet date.
(E) Leased assets
All leases held by the Company are regarded as operating leases and the payments made under them are charged to the profit and loss account on 
a straight line basis over the lease term.
(F) Fixed and intangible assets
Depreciation is provided using the following rates and bases so as to write off the cost or valuation of fixed and intangible assets over their useful lives 
in the Company’s business:
Computer software 50% to 100% straight line
Computer hardware 50% straight line
Fixtures, fittings and equipment 25% straight line
(G) Investments in subsidiaries
Investments in subsidiaries are recorded at cost less any provision for permanent diminution in value.
2. Directors and employees
       2011 2010 
Staff costs including Directors      £ £
Wages and salaries      1,073,622 731,368
Social security costs      123,334 85,877
Pension costs      354 354
Share-based payments (credit)/charge (note 15 to the consolidated financial statements)   (4,626) 19,771
Total staff costs      1,192,684 837,370
Notes to the Company financial statements
For the year ended 31 March 2011 38 Lombard Risk Management plc Annual report and accounts 2011
3. Profit for the financial year
The Parent Company has taken advantage of Section 408 of the Companies Act 2006 and has not included its own income statement in these financial 
statements. The Parent Company’s profit for the year was £8,039,398 (2010: loss £1,377,122).
4. Fixed assets
     Computer Fixtures, fittings Other intangible  
     hardware and equipment assets Total 
Company    £ £ £ £
Cost     
At 1 April 2010    697 ,221 412,321 232,575 1,342,117
Additions    9,076 — 7,562 16,638
At 31 March 2011    706,297 412,321 240,137 1,358,755
Depreciation     
At 1 April 2010    685,611 412,321 232,575 1,330,507
Charge for the year    11,400 — 2,153 13,553
At 31 March 2011    697 ,011 412,321 234,728 1,344,060
Net book value    
At 31 March 2011    9,286 — 5,409 14,695
At 31 March 2010    11,610 — — 11,610
5. Investments in subsidiaries
       2011 2010 
Investments in subsidiaries      £ £
Opening balance at 1 April      12,383,529 12,383,529
New capital investment in Lombard Risk International Limited     227,849 —
Closing balance at 31 March      12,611,378 12,383,529
The Directors have considered the carrying value of the investments in subsidiaries and have concluded, on the basis of forecast financial performance 
of the subsidiaries, that no impairment in value has taken place and therefore that no provision is currently required.
At 31 March 2011 the undertakings in which the Company held more than 20% of the allotted share capital were as follows:
     Proportion of ordinary share capital held 
Country of
     By parent (%) By Group (%) incorporation Business
Lombard Risk Systems Limited    100 100 UK Software
Lombard Risk Compliance Limited    100 100 UK Software
Lombard Risk International Limited    100 100 China Software
Lombard Risk Systems Inc.    — 100 US Software
Lombard Risk International (USA) Inc   . — 100 US Software
Lombard Risk International (Hong Kong) Limited   — 100 Hong Kong Software
Lombard Risk International (Singapore) Limited   — 100 Singapore Software
Lombard Risk Consultants Limited    100 100 UK Services
Lombard Risk Systems (Pty) Limited    — 100 South Africa Dormant
Lombard Risk Systems (Asia Pacific) Limited   — 100 Hong Kong Dormant
Swapval Limited    100 100 UK Dormant
All of the subsidiary undertakings have been included in the consolidation.
6. Debtors due within one year
       2011 2010 
       £ £
Amounts receivable from subsidiary undertakings     2,751,185 4,691,960
Prepayments and accrued income      71,618 104,859
Other debtors      — 79,340
Deferred tax asset (note 8)      85,800 —
       2,908,603 4,876,159
The amounts due from subsidiary companies are due on demand. However, in the opinion of the Directors, it is unlikely that these amounts will be fully 
repaid within the next financial year.
The deferred tax asset is not expected to crystallise in full in the next year.
Notes to the Company financial statements continued
For the year ended 31 March 2011 39 Lombard Risk Management plc Annual report and accounts 2011
7. Creditors due within one year
       2011 2010 
       £ £
Trade creditors      107 ,727 204,796
Amounts due to subsidiary undertakings     651,735 10,541,810
Accruals      368,299 149,669
       1,127 ,761 10,896,275
8. Taxation
The deferred tax asset in the balance sheet relates to the carry forward of tax losses.
       2011 2010 
       £ £
Deferred tax asset      85,800 —
The Directors have recognised a deferred tax asset in respect of carried forward trading tax losses as, based on correct estimates, the company is forecasting 
to make sufficient trading tax profit in the future against which these losses can be offset. The movement in the deferred tax asset in the year is recognised 
in full in the profit and loss account.
The deferred tax asset is not expected to crystallise in full in the next year.
9. Share capital
       2011 2010 
       £ £
Authorised  
714,034,085 ordinary shares of 0.5p each (2010: 714,034,085)    3,570,170 3,570,170
Allotted, called up and fully paid  
206,926,786 ordinary shares of 0.5p each (2010: 206,926,786)    1,034,634 1,034,634
429,829,575 deferred shares of 0.1p each (2010: 429,829,575)    429,831 429,831
       1,464,465 1,464,465
The deferred shares carry no rights to receive dividends or to participate in any profits of the Company. The shareholders are not entitled to attend any 
meetings of the Company or have any rights to participate in any return of capital (except on a winding up). The deferred shares are not transferable other 
than with the consent of all the Directors of the Company.
Share issue
During the year the Company did not issue any new ordinary shares. In the Comparative year the company issued 70,750,000 0.5p ordinary shares at the 
then market value of 4.0p each. The Company recorded this transaction as £353,750 issuance of ordinary share capital and recognised £2,282,129 as share 
premium, which was net of £194,121 of issue costs. Part of the shares issued was to the Company Directors, further details of which are provided in note 18 
to the consolidated financial statements.
Share options
  At start    At end Exercise Exercise Exercise 
   of year Granted Exercised Lapsed  of year  price (p)  date from  date to
2004 EMI Scheme 730,000 — — (730,000) — 9.00 March 2006 March 2011
  2,050,000 — — (240,000) 1,810,000 9.00 April 2008 April 2013
  870,000 — — (70,000) 800,000 9.00 December 2008 December 2013
  3,900,000 — — (2,400,000) 1,500,000 6.00 October 2011 October 2016
  1,000,000 — — — 1,000,000 6.00 June 2010 June 2015
  — 1,414,365 — — 1,414,365 4.50 May 2012 May 2015
  — 7,210,000 — — 7 ,210,000 5.50 January 2013 January 2016
Unapproved Scheme 1,520,555 — — (500,000) 1,020,555 9.00 December 2006 December 2011
  1,194,445 — — — 1,194,445 11.00 December 2006 December 2011
  915,555 — — (845,555) 70,000 9.00 April 2008 April 2013
  444,445 — — (444,445) — 11.00 April 2008 April 2013
  100,000 — — (100,000) — 6.00 October 2011 October 2016
  — 6,685,635 — — 6,685,635 4.50 May 2012 May 2015
  — 1,950,000 — — 1,950,000 5.50 January 2013 January 2016
  12,725,000 17,260,000 — (5,330,000) 24,655,000    40 Lombard Risk Management plc Annual report and accounts 2011
10. Share premium and other reserves
     Share premium Other Profit and Shareholders’ 
    Share capital account reserves loss account funds 
    £ £ £ £ £
Balance at 1 April 2010   1,464,465 4,795,033 7 ,178,728 (7 ,062,864) 6,375,362
Profit for the year   — — — 8,039,398 8,039,398
Share-based payment charge   — — (4,626) — (4,626)
Balance at 31 March 2011   1,464,465 4,795,033 7 ,174,102 976,534 14,410,134
Other reserves relate to negative goodwill arising on the acquisition of a subsidiary undertaking prior to 1 April 1997, merger reserve and net foreign 
exchange movements in connection with overseas subsidiaries.
11. Related party transactions
There are no related party transactions in this reporting year. However in the comparative period, the following related party transactions occurred: 
In August 2009 John Wisbey made an advance to the Company of £100,000, which was added to an existing loan balance of £1,090,000. The total 
balance outstanding to him of £1,190,000 was settled in October 2009 partially (£790,000) by conversion of 0.5p ordinary shares at 4.0p per share 
at the same time and price as the institutional placing and partially (£400,000) by cash payment. The loan carried interest at 1% per month during 
the outstanding periods.
Ian Peacock advanced an amount of £10,000 to the Company on 12 July 2007. Michael Thomas advanced a sum of £30,000 on 29 June 2007. The loan 
was interest free until 31 March 2008 and thereafter the loan attracted interest of 1% per month. Outstanding loans of £10,000 and £30,000 repayable 
to Ian Peacock and Michael Thomas respectively were settled in October 2009 by conversion of the full outstanding balance to 0.5p ordinary shares 
at 4.0p per share. Both loans carried interest at 1% per month before settlement.
In July 2009 Brian Crowe made an advance to the Company of £200,000, which was added to an existing loan balance of £200,000. The total balance 
of £400,000 was settled in October 2009, half by conversion to 0.5p ordinary shares and half by cash payment. The loan carried interest at 1% per month 
while outstanding.
There are no outstanding Directors’ loans at the start or end of the financial year.
The Company has taken advantage of the exemption in Financial Reporting Standard 8 “Related party disclosures” and has not disclosed transactions with 
Group undertakings.
Notes to the Company financial statements continued
For the year ended 31 March 2011 Company information
Company registration number
3224870
Directors
Philip Crawford 
Chairman
John Wisbey
Chief Executive Officer
Paul Tuson 
Chief Finance Officer
Nick Davies
Chief Technology Officer
Brian Crowe
Non-executive Director
Mike Shinya
Non-executive Director
Company Secretary
Paul Tuson
Registered office
7th Floor  
Ludgate House 
245 Blackfriars Road 
London SE1 9UF
Nominated advisor and broker
Allenby Capital
Claridge House  
32 Davies Street 
Mayfair 
London W1K 4ND
Auditor
Grant Thornton UK LLP
Grant Thornton House 
Melton Street 
Euston Square 
London NW1 2EP
Corporate solicitors
Memery Crystal
44 Southampton Buildings 
London WC2A 1AP
Registrars
Computershare Investor Services PLC
PO Box 859 
The Pavilions 
Bridgwater Road 
Bristol BS99 1XZ
Date
Annual General Meeting 
13 July 2011 Lombard Risk Management plc
7th Floor 
Ludgate House 
245 Blackfriars Road 
London SE1 9UF 
UK 
tel: +44 (0)20 7593 6700 
fax: +44 (0)20 7593 6780 
e: investorrelations@lombardrisk.com
www.lombardrisk.com