Dillistone Group Plc
Annual Report and Accounts 2014
Empowering recruitment globally  
through technology
Dillistone Group Plc Annual Report and Accounts 2014 Contents
Strategic Report
1 Highlights
2 Dillistone Group at a Glance
4 Chairman’s Statement
6 CEO’s Review
12 Financial Review
Governance
14 Corporate Governance Report
16  Report to the Shareholders on 
Directors’ Remuneration
18 Board of Directors
20 Directors’ Report
Financial Statements
21  Independent Auditor’s Report 
to the Members
2 2  C on s ol i d at e d S t at emen t  
of Comprehensive Income
2 3  C on s ol i d at e d S t at emen t  
of Changes in Equity
24  Company Statement of 
Changes in Equity
25  Consolidated and Company 
Statements of Financial 
Position
26  Consolidated Cash Flow 
Statement
27  Company Cash Flow 
Statement
28  Notes to the Financial 
Statements
IBC Directors and Advisers
Dillistone Group Plc is a 
global leader in the supply 
of technology solutions and 
services to the recruitment 
industry worldwide
We provide software and services to recruitment firms 
and recruiting teams within major corporations. Across 
our subsidiaries, we work with over 2,000 firms in over 
60 countries.
Our two divisions are Dillistone Systems and Voyager 
Software. Dillistone Systems specialises in the supply 
of software and services into executive level 
recruitment teams. Voyager Software’s clientele are 
primarily involved in contingent recruitment, including 
permanent placement, contract placement and the 
provision of temporary staff. 1
Dillistone Group Plc Annual Report and Accounts 2014
Adjusted basic EPS pence
13
14
7.99
8.56
Recurring revenues £’000
13
14
5,271
5,929
Highlights
+7
%
+1 2
%
• Revenues up 6% to £8.6m
• Record level of recurring revenues of £5.9m up  
12% from 2013
• Adjusted operating profits
1
 up 1 % to £1.82m
• Adjusted EBITDA
2
 up 7% to £2.4m 
• Adjusted pre-tax profits
3
 up 1 % to £1.82m
• Profit for the year down 7% to £1.15m
• Adjusted earnings per share
4
 up 7% to 8.56p 
• Final dividend of 2.7p per share recommended, making 
total dividend for the year of 4p (a yield of 3.7% on a 
share price of 107p) (2013: 3.85p)
• Cash funds of £1.9m (2013: £1.4m) after acquisition 
related payments of £1.3m offset by £1.0m placing 
proceeds. Bank borrowings total of £0.5m (2013: nil) 
• ISV Software acquisition completed in October 2014
www.dillistonegroup.com
1 Adjusted operating profit is statutory operating profit before acquisition costs, related 
intangible amortisation, movements in contingent consideration and other one-off 
costs relating to acquisitions.
2  Adjusted EBITDA is adjusted operating profit with depreciation and amortisation 
added back. 
3  Adjusted pre-tax profits is statutory pre-tax profits before acquisition costs, related 
intangible amortisation, movements in contingent consideration and other one-off 
costs relating to acquisitions.
4  Adjusted earnings per share is computed from statutory profits after tax adjusted to 
exclude the post-tax effect of acquisition costs, related intangible amortisation, 
movements in contingent consideration and other one-off costs relating to acquisitions.
“ The Group has enjoyed another successful year in 2014, delivering 
its best ever performance in terms of revenue, adjusted operating 
profit and adjusted EPS. The business continued to invest, delivering 
a major new product launch in the Dillistone Systems division, while 
successfully completing the integration of FCP Internet into the 
Voyager Software division, and in September 2014 announcing the 
acquisition of ISV Software. 
 
This represents our 3rd successive year on year increase in the 
dividend, in line with our progressive dividend policy, which illustrates 
the Board’s confidence in the future prospects of the Group.”  
 
Dr Mike Love
Non-Executive Chairman
Strategic Report
Governance
Financial Statements 2 
Dillistone Group Plc Annual Report and Accounts 2014
Browser Desktop Outlook Mobile
Dillistone Group at a Glance
Our two divisions are 
Dillistone Systems and 
Voyager Software
Dillistone Systems Division
Dillistone Systems is a leading global 
supplier of software to executive search 
firms and to in-house search teams at 
major corporations and not-for-profit 
organisations. The Division’s main 
product is the FileFinder Anywhere suite 
which was launched in September 2014. 
The Division is headquartered in the UK, 
but has offices in Germany, the United 
States and Australia and serves clients in 
more than 60 countries, generating more 
revenue from outside the UK than from 
its home market. 
Dillistone Systems is widely acknowledged 
to work with more executive search firms 
than any comparable supplier, and is also 
considered to be a thought leader in this 
space. As a result, the Division has also 
moved beyond the supply of software, 
and provides additional services including 
training in executive search techniques, 
marketing and advertising services, and 
also runs regular conferences which are 
open to both client and non-client firms.
Dillistone Systems Products
FileFinder is designed specifically for the 
executive search market with FileFinder 
Anywhere being the latest generation of 
the product. 
FileFinder is an executive search database, 
CRM system, research tool, report writer 
and project management solution all 
rolled into one. It is designed to support 
every element of the search process.
The product is unique in its market, in 
that it is available to purchase or to rent, 
and can be accessed via a Desktop App,  
a full Browser App, a Mobile App or 
through Microsoft Outlook.
Voyager Software Division
Voyager Software became a part of the 
Dillistone Group in September 201 1. At the 
time of its acquisition by Dillistone, it 
provided end-to-end recruitment solutions 
principally to the third party recruiting sector. 
Voyager’s products included Voyager 
Professional, Voyager Commercial, Voyager 
VDQ! and Voyager Mid-Office, a product 
range largely used by temp and contingency 
recruiters. In September 2012, Voyager 
launched its next generation software 
platform, Voyager Infinity. Voyager Infinity 
is designed to improve the performance of 
recruitment companies specialising in both 
contract and permanent placements. 
Infinity meets the demands of flexibility and 
functionality required by these firms, putting 
it at the forefront of software available to 
the recruitment industry. In July 2013, the 
Group acquired FCP Internet, suppliers of 
the Evolve SaaS product, and this has 
subsequently been folded into the Voyager 
division. In October 2014, a further 
acquisition saw ISV Software – a supplier of 
skills testing and training services – folded 
into the division. Today, the Voyager 
products are used in over 20 different 
countries by many thousands of users in 
different-sized recruitment businesses. The 
Division has offices in the UK and Australia 
and employs around 50 people.
Global reach
Dillistone Group has  
offices in the UK, US, 
Germany and Australia, 
serving over 2,000 firms  
in over 60 countries
 Main Group offices
Strategic Report 3
Dillistone Group Plc Annual Report and Accounts 2014
Voyager Software Products
Voyager is a leading provider of 
innovative recruitment software. Its focus 
is on service and delivering tangible 
benefits and its recruitment solutions 
offer rapid deployment and return on 
investment. The products span the entire 
recruitment landscape, from the front 
office to the back office and even to 
bureaus. By combining recruitment 
software products, the Division has a 
strong track record of delivering vertical 
market solutions. 
Voyager Infinity manages the 
timetables of recruiters working to fill 
permanent and longer-term contract/
temporary vacancies. 
With Virtual Voyager, all Voyager 
products can now be hosted and 
delivered to any customer PC with  
an internet connection.
Voyager Commercial brings further 
unique tools that optimise a candidate’s 
entire association with a temporary or 
short-term contract placement agency. 
Voyager VDQ! is designed for fast- 
paced blue and white collar temporary 
placement agencies that have to  
quickly assemble transient or ad-hoc 
teams to serve highly volatile and  
urgent labour requirements. 
Through FCP Internet, the division also 
provides its evolve
TM 
software. evolve™ 
has been designed to deliver an effective 
workflow solution for all sizes and types of 
recruitment businesses. It is delivered only 
as a SaaS product.
Through ISV, the division provides its 
fastPath software. This software  
delivers pre-employment skills testing  
and training tools to recruitment 
businesses and corporates.
Middle and Back Office Products
Voyager Mid-Office Voyager’s flexible 
Pay & Bill solution, automates the 
processing of large volumes of invoices 
and payments to numerous clients  
and candidates.
Voyager Bureau enables bureaus to 
subcontract back-office operations for 
multiple client recruitment companies  
on a single platform.
Strategic Report
Governance
Financial Statements 4 
Dillistone Group Plc Annual Report and Accounts 2014
Chairman’s Statement
The Group has enjoyed another successful year in 2014, 
delivering its best ever performance in terms of revenue, 
adjusted operating profit and adjusted EPS. Revenue was  
up 6 % to £8.63m and adjusted operating profits up 1 %  
to £1.82m. Profit after tax fell 7% to £1.15m. Adjusted EPS  
rose 7 % to 8.56p. 
Mike Love
Non-Executive Chairman
The business continued to invest, 
delivering a major new product launch  
in the Dillistone Systems division, while 
successfully completing the integration of 
FCP Internet into the Voyager Software 
division, and in September 2014 
announcing the acquisition of ISV 
Software (ISV).
ISV (www.isvgroup.com) is a UK based 
supplier of training and testing services, 
primarily to the recruitment industry. ISV 
works with 9 of the 10 largest recruitment 
agencies in the UK (by office numbers) 
and 7 of the 10 largest by revenue. It 
offers over 200 published materials/tests 
covering many business sectors. ISV 
contributed £195,000 to revenue and 
£18,000 to profit before taxation during 
the three months of its ownership by 
Dillistone in 2014.
It is the view of the Board that product 
development is fundamental to the long 
term success of the business and, as a 
result, 2015 will see us continue to invest 
in the development of software within 
both of our Divisions.
Dividends
The Board was pleased to increase the 
interim dividend payment in September 
2014 to 1.30p (2013: 1.25p). The Board 
has recommended an increased final 
dividend of 2.7p per share (2013: 2.6p), 
subject to shareholder approval, payable 
on 24 June 2015 to holders on the register 
on 29 May 2015. Shares will trade 
ex-dividend from 28 May 2015. This takes 
the total dividend based on the 2014 
results to 4.00p (2013: 3.85p), and gives  
a yield of 3.7% on a share price of 107p. 
This represents our 3rd successive year 
on year increase in the dividend, in line 
with our progressive dividend policy, 
which illustrates the Board’s confidence 
in the future prospects of the Group. The 
business is committed to maintaining 
its policy of investing in its products and 
services whilst rewarding its shareholders.
Staff
Our staff are fundamentally important 
to the success of the business. It is 
through their efforts, commitment and 
determination that we continue to be a 
leading technology provider in the sectors 
we serve. On behalf of the Board I would 
like to take this opportunity to thank all 
of them.
Outlook
Group revenues in the first quarter are 
ahead of the same period in 2014. 
Our Dillistone Systems division has 
seen incoming orders in Q1 increase 
on the same period in the previous 
year reflecting, in part, the launch of 
the FileFinder Anywhere platform in 
September of 2014. As noted previously, 
since the launch of FileFinder Anywhere, 
the Division has been successful in 
winning a number of larger than average 
contracts and is currently in talks with 
a number of potential clients which, if 
successfully closed, would fall into this 
same category. These larger contracts  
do however take longer to implement  
and the full impact may not be seen in 
2015. Nonetheless, the relative scale  
and increasing frequency of these 
opportunities validates the Board’s 
strategy of investing in new product 
development and in the prospects for  
this iteration of FileFinder. 
“ Product development is 
fundamental to the long term 
success of the business”
Strategic Report 5
Dillistone Group Plc Annual Report and Accounts 2014
Dillistone Systems is a global market-leading 
provider of technology to executive 
recruitment companies and strategic talent 
acquisition teams. 
In September 2014, it launched the latest 
generation of its flagship product – FileFinder 
Anywhere, which enables users to access their 
business-critical data via four platforms – 
Desktop Software, Mobile, Browser and 
Outlook – anywhere, anytime. 
Since the launch, close to 100 companies 
have purchased or upgraded to FileFinder 
Anywhere, many of them reporting 
measurable benefits to their businesses. 
One of the earliest adopters of FileFinder 
Anywhere is O’Neill Consulting, a client-
centred retained Executive Search firm 
headquartered in South Kingstown, RI, USA. 
Alexandra Henry, Client Care Officer at O’Neill 
Consulting Group, shared her experience 
about the organisation’s implementation of 
FileFinder Anywhere.
The Background
O’Neill Consulting Group is a retained search 
firm that aims to deliver high impact talent 
solutions to clients around the world. It 
specializes in the consumer, industrial, 
manufacturing, life sciences and private 
equity sectors with emphasis on finance, 
operations, human resources, supply chain, 
logistics and general management roles.
How impactful is being able to access your 
data from machines other than your 
traditional office desktops?
“That is going to be extremely impactful for 
us,” commented Alexandra. She explained it 
would be much quicker and easier for the CEO 
and our Managing Directors, to access 
business information wherever they are.
How well does the product work  
on your Mac computers?
Some of O’Neill Consulting Group’s 
employees work remotely and prefer to travel 
with their Macs. Alexandra said the product 
was “working well” on Mac computers, and 
speaking about the attachments feature, 
which enables users, including those on the 
road, to pull up attachments in relation to a 
search quickly.
How do you find the new Outlook 
integration?
Alexandra explained: “It’s a lot easier to use, 
especially for people who are on the road – 
they don’t have to go into the database; they 
can see a lot of information right there, which 
is going to be extremely helpful for us pulling 
information on candidates quickly.”
How easy is the product to use?
“The product has been extremely easy; for 
us,” explained Alexandra. “It has been very 
straightforward; it hasn’t been a tricky process 
at all to switch over.”
How are the stability and the speed  
of the product?
“The stability has been excellent. We haven’t 
had any issues – I haven’t had anyone tell me 
they’ve had any crash issues or problems with 
things not working correctly,” said Alexandra. 
She described the speed of the product as 
“great”. She added: “One thing that we really 
like, especially with a lot of our people on the 
road, is how quick the speed is between 
updating something on the desktop to the 
browser version.”
Would you recommend FileFinder 
Anywhere?
“Yes, we would definitely recommend it, I 
think for firms that are growing and firms that 
have people outside of one office,” 
commented Alexandra. “I highly recommend 
it for anyone who travels a lot or has remote 
employees and needs information quickly.”
How FileFinder Anywhere  
Supports O’Neill Consulting
Case study
Revenues for our Voyager Software 
division are also up on the same period 
of 2014. The Division has invested 
significantly in product development 
over the past 2 years and it expects to 
announce a number of further notable 
product updates and launches in the 
coming months. These are expected to 
have a positive impact on the business 
in the medium to longer term. 
Both Divisions currently see recurring 
revenue at record levels and the Group 
was delighted to sign an extension of one 
of its largest SaaS contracts during the 
first quarter of 2015. This contract, worth 
at a minimum, in the region of £250,000 
per annum, has been extended until 
November 2016.
In the longer term, the Group’s continuing 
investment in product development 
across all parts of the business gives the 
Board confidence in the future and, as 
a result, we are delighted to propose an 
increase in our final dividend of 3.8% to 
2.7p (2013: 2.6p).
Dr Mike Love
Non-Executive Chairman
24 April 2015
Strategic Report
Governance
Financial Statements 6 
Dillistone Group Plc Annual Report and Accounts 2014
CEO’s Review
Dillistone Group Plc is a global leader in the supply  
of technology solutions and services to the recruitment  
industry worldwide.
“ 2014 saw recurring revenues 
grow 1 2% to £5.923m”
Jason Starr
Chief Executive
Strategy and objectives
The Group’s strategy is to grow the 
business both organically and through 
acquisition. This strategy is made  
possible by our commitment to product 
development, which ensures that the 
business continues to command a 
leading role in all of the markets in  
which it operates. 
Our acquisition strategy typically entails 
consideration of businesses offering:
• products that would further increase 
market share in the Group’s core 
markets; 
• legacy applications where clients could 
be transferred to our modern suite of 
products; or
• complementary applications which 
may be cross-sold to clients of  
the Group.
The Group’s objectives are principally to:
• ensure our products meet the needs  
of the recruitment sector through 
continual investment and 
development;
• be a leading player in all of the 
markets we serve;
• develop our staff; and
• increase our profitability and deliver 
increased shareholder value year on 
year in conjunction with following a 
progressive dividend policy.
Our business model
The business is split into two divisions, 
Dillistone Systems and Voyager Software. 
Dillistone Systems specialises in the 
supply of software and services into 
executive-level recruitment teams. 
Voyager Software’s clientele are primarily 
involved in contingent recruitment, 
including permanent placement,  
contract placement and the provision of 
temporary staff. Across our subsidiaries, 
we work with over 2,000 firms in 
approximately 60 countries. Further 
details of the products we supply are 
given in the ‘At a Glance’ section.
The majority of our products are delivered 
through one or more of the following:
1. an upfront licence fee plus a recurring 
support fee;
2. Software as a Service (SaaS) 
subscription basis; or
3. a hybrid model incorporating an 
upfront payment and recurring 
support and hosting fees.
The business has offices in four countries, 
the UK, Germany, the US and Australia. 
This enables the Group to support its 
customers on an approaching 24/5 basis. 
As well as supplying and supporting our 
software we also host the software for a 
proportion of our clients. This is done 
through data centres in Europe, the US, 
Singapore and Australia. 
Strategic Report 7
Dillistone Group Plc Annual Report and Accounts 2014
Group review of the business
2014 saw recurring revenues grow 12% to 
£5.929m (2013: £5.271m) reflecting the 
full year impact of the acquisition of FCP 
Internet and also the acquisition of ISV  
in October 2014. Non-recurring revenues 
fell 6% to £2.285m (2013: £2.428m).  
As a result, overall revenues, which were 
negatively impacted by exchange rates, 
increased by 6% to £8.625m (2013: 
£8.101m). Recurring revenues represent 
69% of Group revenues (2013: 65%). 
Overheads have increased across the 
business mainly as a result of the 
acquisitions with EBITDA increasing 7% 
to £2.402m (2013: £2.242m). Operating 
profits before acquisition related items 
increased 1 % to £1.820m (2013: 
£1.793m) and pre-tax profits before 
acquisition related items also increased 
1 % to £1.824m (2013: £1.801m).
Divisional reviews
Dillistone Systems
The Dillistone Systems division is primarily 
focused on providing technology 
solutions to the executive search market 
via our range of ‘FileFinder’ applications. 
This client group is made up of both 
executive search firms and executive 
search teams in major organisations.
Dillistone Systems’ head office is in 
London and it has offices in the US, 
Germany and Australia. The Division 
accounts for 53% (2013: 61 %) of the 
Group’s revenue and saw recurring 
revenue fall 2% to £3.186m (2013: 
£3.248m) mainly due to the impact  
of currency movements. As a whole,  
the Division saw segmental operating 
profit before amortisation and 
depreciation decrease by 21 % to 
£1.597m (2013: £2.013m). 
Revenue
2014
£’000 
2013
 £’000 
Recurring income 3,186 3,248
Non-recurring income 1,371 1,675
4,557 4,923
On the face of it, these are disappointing 
results. However, they are not 
unexpected, given our conscious and 
pre-stated decision to hold back the 
number of implementations we 
completed in the second half of the year. 
This enabled the successful replacement 
of the FileFinder 10 product with our new 
FileFinder Anywhere suite, launched to 
the market in September 2014, with the 
first ‘live’ implementations in November. 
FileFinder systems are business critical  
for our clients, and so we ensured that  
the product went through a significant 
beta test process. This meant that we 
deliberately implemented virtually no 
new client FileFinder systems between 
September and mid-November, so as  
to ensure that our development, 
implementation and support teams were 
able to provide our ‘early adopters’ with 
the level of service that they required.
This strategy has proven to be the correct 
one. Client feedback on the new product 
has been excellent, with a number of case 
studies and client testimonials already 
shown on our website.
We reported in our January trading 
statement that the new product had led 
to the Division achieving a number of 
early successes in the market, including:
• total order intake in Q4 of 2014 was 
more than 20% up on both Q4 of 
2013 and on the average of Q1–Q3 
2014;
• we won more new business contracts 
in December 2014 than in any single 
month in the last 2 years; and
• contract wins included our largest 
single North American win since 2009 
with a number of clients switching 
from competing products.
The Division has seen further positive 
signs in 2015:
• January 2015 saw us win our largest 
contract in mainland Europe since 
2007;
• February 2015 saw us win one of our 
largest ever upgrade contracts for an 
existing client; 
• several new clients converted to 
FileFinder Anywhere from the product 
of our main competitor; and
• total orders in Q1 2015 were more 
than 12% up on Q1 2014.
Key Performance Indicators (KPIs)
The Board and management use absolute figures to monitor the performance of the business in the following financial KPIs:
FY 2014 
£000
FY 2013 
£000 Measure
Total revenues 8,625 8,101 year on year growth
Recurring revenues 5,929 5,271 year on year growth
Non-recurring revenues 2,285 2,428 year on year growth
Adjusted profit before tax 1,824 1,801 year on year growth
Cash less borrowings 1,443 1,399 sufficient cash resources maintained
In addition, the Board monitors order levels and employee numbers as well as performance against budget.
Strategic Report
Governance
Financial Statements 8 
Dillistone Group Plc Annual Report and Accounts 2014
As a result, the Division has now seen  
3 successive quarters of year on year 
growth in total orders. Divisional recurring 
revenues at the end of Q1 are once again 
climbing and we have a strong prospect 
pipeline. We are currently ramping up our 
implementation frequency meaning that 
Q2 is likely to see realised revenue ahead 
of Q1 with the expectation that H2 will be 
stronger again.
The new FileFinder Anywhere suite 
continues to be developed, and we 
anticipate further positive announcements 
within the next 12 months. As a result, 
while the 2014 divisional results were 
disappointing, the Board is confident  
that the Division has an exciting future.
Voyager Software
Voyager Software is a leading provider  
of innovative recruitment software  
with products targeted at the entire 
recruitment landscape, from front office 
to back office and bureaus. 
Revenue
2014
£’000 
2013
 £’000 
Recurring income 2,743 2,023
Non-recurring income 914 777
Third party revenues 411 402
4,068 3,202
In 2014, the Voyager Software division 
accounted for 47% (2013: 39%) of  
Group revenues. The Division’s revenues 
were £4.068m and its segmental 
operating profit before amortisation  
and depreciation increased by 34% 
 to £0.802m (2013: £0.598m). Recurring 
revenues increased by 36% to £2.743m 
(2013: £2.023m).
The Division benefited from the full year 
impact of the FCP acquisition made in 
July 2013 and the acquisition of ISV in 
October 2014. The Division successfully 
won its largest ever contract and has seen 
its ‘Infinity’ product gain good 
momentum in the market. 
The Infinity product was a major 
development for the business and, since 
launch, work has continued to optimise  
it for larger firms and additional delivery 
models. Further announcements on this 
are expected in due course. 
The year in review was our first full  
year with FCP Internet under our 
management. This acquisition has proven 
to be very successful, with the evolve 
product now supporting more users  
than at any point in its history. Work is 
underway to deliver an updated version 
of the product, with completion expected 
in the coming months.
ISV Software was acquired in October 
2014. Unlike our other products, ISV 
provides pre-employment testing tools.  
It is the UK market leader. The business 
made a small contribution in 2014, and 
work is underway to integrate the product 
with the Voyager Software Infinity 
platform. This project should increase 
cross selling opportunities, and is likely  
to be completed this summer.
Financial risk management
The Group’s operations expose it to a 
number of risks that include the effect of 
changes in interest rates, credit, foreign 
currency exchange rates and liquidity. 
The Group does not trade in financial 
instruments. Further details in relation  
to these risks are shown in note 24. 
Interest rate risk
The Group is exposed to interest rate risk 
through its floating rate borrowings and 
through its management of retained 
cash. The Group monitors its exposure  
to interest rate risk when borrowing and 
investing its cash resources. 
Credit risk
The Group has a large customer base  
in excess of 2,000 customers and is  
not dependent on a small number of 
customers. Accordingly, the Group does 
not believe it is exposed to significant 
credit risk. In addition, it only places money 
with banks with strong credit ratings. 
Exchange risk
The Group is exposed to translation  
and transaction foreign exchange risk. 
The Group’s foreign operations primarily 
trade in their own currencies, reducing  
the transaction risk. As a result the main 
foreign exchange transactional exposure 
arises when repatriating profits. The 
Group only seeks to remit cash when 
required in the UK and it usually has some 
flexibility on timing of such appropriations 
to minimise any exchange losses. To  
a degree, the Group relies on a partial 
natural hedge of Euro, Australian  
Dollar and US Dollar to cover the 
translation exposures.
Liquidity risk
Although the Group has some borrowings 
it maintains positive cash resources and 
has sufficient available funds for its 
operations and planned expansion  
of its existing activities. 
CEO’s Review continued
Strategic Report 9
Dillistone Group Plc Annual Report and Accounts 2014
Timeline
1983 The original FileFinder software was developed by David Dillistone, 
himself a retained search consultant. While it was initially created 
for in-house use, David soon realised that there was a market for it 
beyond his own firm, and so he created David Dillistone Systems.
1990 By the late 1990s, David had retired and the business – now 
renamed as Dillistone Systems – was owned by Custom Business 
Systems (CBS). CBS invested heavily in the firm and, by the end of 
the decade, offices had been established on three continents. 
2003 In 2003, the current management team took part in a 
management buyout of the business. The dawn of the internet 
meant that it became far easier to sell the FileFinder system 
internationally, and, as a result, Dillistone Systems grew rapidly. 
2006 In 2006, the Group floated on the AIM market of the London  
Stock Exchange (DSG.L).
2008 In 2008, a decision was taken to significantly increase R&D 
expenditure, and the development of the next generation of 
FileFinder began. 
2011 In March 2011, FileFinder 10 was released after over two years  
of development. In September 2011, the Group made its first 
acquisition: Voyager Software.
2012 In September 2012, Voyager Infinity was launched after three 
years of development.
2013 In July 2013, the Group made its second acquisition:  
FCP Internet.
2014 In October 2014, the Group acquired ISV Software. 2014 saw the 
release of FileFinder Anywhere, a market leading product suited  
to mobile working.
Strategic Report
Governance
Financial Statements 10 
Dillistone Group Plc Annual Report and Accounts 2014
CEO’s Review continued
Principle risk and uncertainties
There are a number of risks and uncertainties which could have an impact on the Group’s long term performance and cause actual 
results to differ materially from expected and historical results. The Directors seek to identify material risks and put in place policies 
and procedures to mitigate any exposure. The table of risks that follows gives details of the principal risks and the approach being 
taken to manage them.
Risk Potential adverse impact Mitigation
Economic risk
The recruitment industry has a reputation for being 
vulnerable to the cyclical nature of the economy. This 
can impact significantly on non-recurring revenue and 
to a lesser extent recurring revenue.
The Company operates globally and so is not reliant on 
one economy. It enjoys a high percentage of recurring 
revenues. The acquisition of Voyager FCP and ISV has 
increased the exposure to the UK economy. 
In a downturn there may be a reduction in new 
permanent hires which may be replaced by temporary 
hires. The Group’s suite of products now supports more 
aspects of the third party recruitment market through its 
acquisition of Voyager. The temporary recruitment market 
is potentially anti-cyclical. 
New product risk
The introduction of new products might contain 
significant bugs that make them unusable. This could 
damage the Group’s reputation and result in loss of new 
orders and therefore reduce revenue growth. It could 
also result in claims against the Company.
Products are tested pre launch and launch and 
implementation strategies developed to minimise risks. 
Additional unit testing built in and commitment to focus 
on user experience. 
Attrition of  
customer base
Failure to attract new customers, or the loss of existing 
customers, may have a detrimental effect on the 
Group’s ability to generate revenues.
Actively manage existing customer relationships through 
account management structures and promptly deal with 
issues. 
The Group continues to invest in new products and new 
features being added. 
Competitor activity
The market for recruitment software is extremely 
fragmented with a large number of small suppliers 
operating in all of the Group’s geographical markets. 
Very few of these suppliers have the necessary financial, 
technical and marketing resources to be able to develop 
their competitive position. However, the competition 
may intensify through consolidation or new entrants  
to the market.
Some competitors offer a broader product range 
enabling them to compete across the whole of the 
sector.
The businesses can easily lose market share if its 
products are not well regarded either from being  
‘out of date’ or ‘buggy’.
Some firms may try to compete on price, particularly  
if the market deteriorates. Currently, Voyager carries  
a very high marginal cost on its subscription model.
Some competitors target Dillistone clients and make 
inroads based on their features.
The Group has strong customer relationships and uses 
account management to keep in touch with clients.
The Group continues to invest in its product development 
and 2015 is expected to see the launch of a SaaS version 
of Infinity and a full browser version of FF. The Group 
continues to innovate and provide solutions to client 
needs.
There is a focus on fixing bugs and issues as they arise to 
ensure the user experience is good.
Pricing strategies reviewed on a regular basis. The 
introduction of a SaaS product should result in a more 
competitive subscription model for Voyager.
The Group continue to look at developing new products 
and additional features to more readily compete. 
Strategic Report 11
Dillistone Group Plc Annual Report and Accounts 2014
Risk Potential adverse impact Mitigation
Business continuity 
risks associated with 
information systems’ 
operational failure 
and data security
A failure of systems or failure of hosting facilities 
leading to loss of customer confidence in the Group 
being able to deliver their requirements.
Loss or corruption of data held on behalf of customers 
which could have a detrimental effect on their 
confidence in data security processes and could cause 
financial loss.
External attacks on servers could result in lost or 
corrupted data and loss of reputation.
Each division is reliant on data centres. Work ongoing to 
improve disaster recovery plans, including investing in 
SANs and use of the cloud. 
Plans are regularly reviewed on how to improve data 
centre management as the business grows worldwide. 
Data backups occur daily and the necessary test carried 
out on a regular basis to ensure data can be restored. 
Penetration testing helps minimise the risk of attacks. 
Employee 
engagement and 
retention
Capability to meet the demands of the markets in 
which the Group operates and competes effectively 
with other IT suppliers is largely dependent on the skills, 
experience and performance of staff.
Failure to attract or retain high calibre employees could 
seriously impede future growth and present 
performance. 
Reliance on a small group of people especially in parts 
of the business.
To retain staff the Group operates competitive 
remuneration packages.
Appraisals are carried out which also consider individual’s 
personal development.
Cross training being carried out where possible.
Acquisition risk
The Group has made three acquisitions since 2011 and 
is likely to make further acquisitions in the future. This 
creates the potential risk that acquisitions may not 
perform or may contain hidden risks or liabilities.
For all acquisitions and in advance of completion, 
management undertakes due diligence and prepare 
integration plans including risk identification. These 
papers are reviewed and approved by the Board prior to 
any commitment being entered into.
Ability to finance 
acquisitions and 
expansion
The Group wants to grow by acquisition and this 
requires that it will have the ability to fund such 
expansion either via borrowing or placement, or 
through the availability of its own cash resources.
Ongoing discussions with investors and potential investors 
to build a following in Dillistone. 
Recent bank loan has established the feasibility of raising 
bank finance. Recent placing oversubscribed so Group has 
small fund available for future acquisitions.
Management 
capacity
Size of business means that management tends to be 
stretched and under resourced. As the business grows 
there may be insufficient support to ensure that the 
growth is effectively managed and integrated.
Investment in additional management in 2014. Structure 
of Divisional Boards under review as a way of developing 
senior management. 
Strategic Report
Governance
Financial Statements 12 
Dillistone Group Plc Annual Report and Accounts 2014
Financial Review
Total revenues increased by 6 % to £8.625m (2013: £8.101m), 
with pre-tax profits before acquisition related items up 1 % to 
£1.824m (2013: £1.801m). 
“ Dillistone finished the year with 
cash funds of £1.923m and 
bank borrowings of £0.487m”
Julie Pomeroy
Finance Director
Recurring revenues increased by 12%  
to £5.929m (2013: £5.271m) while 
non-recurring revenues saw a 6% 
decrease to £2.285m from £2.428m in 
2013. Third party software product sales 
amounted to £0.411m in the period 
(2013: £0.402m). These results include 
FCP revenues for the full year and ISV 
revenues from October 2014.
Cost of sales increased by 16% to 
£1.108m (2013: £0.957m), reflecting  
the full year impact of FCP and also  
the impact of ISV from October 2014.
Administrative costs, excluding 
acquisition related items, depreciation 
and amortisation, rose 4% to £5.116m 
(2013: £4.901m), again reflecting the full 
year of FCP and ISV costs from October 
2014. Depreciation and amortisation 
increased to £0.582m (2013: £0.449m). 
Administrative costs totalling £0.418m 
(2013: £0.210m), related to acquisition 
costs and amortisation of intangibles 
arising on the Voyager, FCP , and ISV 
acquisitions. Finance cost includes 
£0.101m relating to the unwinding  
of the discount in respect of the 
contingent consideration.
Recurring revenues covered 104% of 
administrative expenses before acquisition 
related costs (2013: 98%). Excluding 
depreciation and amortisation of our own 
internal development, the administrative 
costs are covered 116 % (2013: 108% ) by 
recurring revenues.
Tax has been provided at an effective 
rate of 13% (2013: 19%) excluding 
acquisition related items and at 12% 
(2013: 19%) post acquisition related 
costs. These rates reflect the R&D tax 
credits available to both Dillistone 
Systems and Voyager Software that  
have been claimed; the reduction in 
corporation tax rates from 23.25% to 
21.5%; the release of prior year provisions 
relating in part to agreement of the  
prior years’ tax position of the branch 
operation in Germany; and partially 
offset by the higher rates of corporation 
tax that are payable overseas. The post 
acquisition related items tax rate also 
reflects the reduction in deferred 
consideration and the write off of 
acquisition costs together with the 
reduction in the deferred tax rate used  
in the accounts from 21 % to 20%.
Profits for the year before acquisition 
related items rose 9% to £1.584m (2013: 
£1.455m) and profits for the year after 
acquisition related items decreased to 
£1.145m (2013: £1.231m). Basic earnings 
per share (EPS) rose 7% to 8.56p (2013: 
7 .99p) before acquisition related items 
and decreased by 9% to 6.18p (2013: 
6.76p) after such items. Fully diluted EPS 
rose 7% to 8.23p before acquisition 
related items (2013: 7 .70p) and decreased 
9% to 5.95p (2013: 6.51p) after 
acquisition related items.
Strategic Report 13
Dillistone Group Plc Annual Report and Accounts 2014
Capital expenditure
The Group invested £1.073m in property, 
plant and equipment and product 
development during the year (2013: 
£0.830m). This expenditure included 
£0.814m (2013: £0.747m) spent on 
development costs, of which £0.319m 
relates to development in Voyager 
Software division (2013: £0.250m) that 
has been capitalised under IFRS in the 
Group accounts. 
Trade and other payables
As with previous years, the trade and 
other payables include income which  
has been billed in advance but is not 
recognised as income at that time. This 
principally relates to support, SaaS and 
hosting renewals, which are billed in 2014 
but that are in respect of services to be 
delivered in 2015. Contractual income of 
this type is recognised monthly over the 
period to which it relates. It also includes 
deposits taken for work which has not yet 
been completed, as such income is only 
recognised when the work is substantially 
complete or the client software goes ‘live’. 
Also included in trade and other payables 
is £1.322m (2013: £0.918m) relating to 
deferred consideration and contingent 
consideration due to former FCP and  
ISV shareholders. The contingent 
consideration in respect of FCP is 
dependent on the level of revenue 
achieved by the Division in the periods  
up to 31 March 2015. There are four 
tranches of contingent consideration in 
respect of ISV and they are dependent on 
levels of revenue achieved in periods up 
until 30 September 2017 plus a deferred 
consideration payment payable in 
January 2015.
Cash
To part finance the acquisition of ISV,  
a placing of £0.500m was carried out  
and a bank loan of £0.500m obtained. 
Also in view of the demand for shares, 
two further placings, raising a total of 
£0.500m for working capital purposes, 
were carried out. Dillistone finished the 
year with cash funds of £1.929m (2013: 
£1.399m) and bank borrowings of 
£0.487m (2013: nil). This is after capital 
expenditure of £1.073m, the payment to 
the vendors of Voyager, FCP and ISV of 
£1.268m (net of cash received with ISV) 
(2013: £0.900m) and dividend payments 
of £0.723m (2013: £0.683m).
On behalf of the Board
Julie Pomeroy
Finance Director
24 April 2015
The Strategic Report is signed on behalf 
of the Board by
Jason Starr
Chief Executive
24 April 2015
Total revenue £’000
12
11
10
13
14
7,052
5,448
4,251
8,101
8,625
Recurring revenues £’000
12
11
10
13
14
4,529
3,248
2,536
5,271
5,929
Adjusted EBITDA £’000
12
11
10
13
14
1,998
1,633
1,358
2,242
2,402
Adjusted proﬁt before tax £’000
12
11
10
13
14
1,684
1,405
1,182
1,801
1,824
Adjusted basic EPS pence
12
11
10
13
14
7.2
6.26
5.13
7.99
8.56
Revenue analysis 
2014
 
 
 
 
 69% Recurring
 26% Non-recurring
 5% 3rd party
Divisional revenue analysis 
2014
 
 
 
 
 53% Dillistone
 47% Voyager
Strategic Report
Governance
Financial Statements 14 
Dillistone Group Plc Annual Report and Accounts 2014
Corporate Governance Report
Corporate governance
Dillistone Group Plc (the ‘Company’) is committed to maintaining 
high standards of corporate governance. The Company does 
not comply with the provisions of the UK Corporate Governance 
Code (the ‘Code’) in its entirety and it is not required to do so. 
However, the Board recognises the importance of sound 
corporate governance and will take appropriate measures to 
ensure that the Company complies with the main provision of 
the Code as far as practicable and to the extent appropriate 
given the Company’s size, assets, liabilities and other relevant 
information. The summary below describes the extent to which 
the Company complies with the Code. 
Leadership
The Board comprises a Non-Executive Chairman, one 
Independent Non-Executive Director and five Executive Directors. 
All Directors are obliged to submit themselves for re-election at 
least every three years. The Chairman and Non-Executive Director 
are considered to be independent of management and free from 
any business or other relationship which could materially interfere 
with the exercise of their independent judgement. Giles Fearnley 
is the current Senior Independent Director and his shareholding  
of approximately 2.3% is not considered by the Board to change 
his independence. 
Effectiveness
To enable the Board to discharge its duties, all Directors have full 
and timely access to all relevant information. They are also able 
to take independent professional advice as appropriate. 
The Board has two committees:
Audit Committee
The Audit Committee comprised the Chairman and the 
Non-Executive Director and usually meets twice during the year. 
The Finance Director, Group Chief Executive Officer (CEO) and 
external auditors attend by invitation. The Audit Committee 
makes recommendations to the Board on issues surrounding the 
appointment, resignation or removal of auditors and their 
remuneration. It discusses and agrees the scope of the audit 
with the external auditors before the audit. 
The Audit Committee reviews external audit activities, monitors 
compliance with statutory requirements for financial reporting 
and reviews the half-year and annual accounts before they are 
presented to the Board for approval. It is also required to review 
the effectiveness of the Group’s internal control systems, to 
review the Group’s statement on internal control systems prior 
to endorsement by the Board and to consider, from time to  
time, the need for a risk assessment of the Group’s internal 
control systems.
 
Remuneration Committee
The Remuneration Committee comprised the Chairman,  
the Non-Executive Director and, by invitation, the Group CEO 
and the Company Secretary. It is responsible for recommending 
to the Board the contract terms, remuneration and other 
benefits for Executive Directors, including the performance-
related bonus scheme and participation in the Group’s long 
term share option schemes.
The Board has not delegated a Nomination Committee; the 
whole Board is involved in the appointment of any new Director.
The Board does not currently undertake an evaluation of its own 
performance or that of its committees.
Accountability
The Board meets at least four times each year and has adopted 
a formal schedule of matters specifically reserved for decision  
by it, thus ensuring that it exercises control over appropriate 
strategic, financial, operational and compliance issues. At these 
meetings the Board reviews trading performance, ensures 
adequate financing, sets and monitors strategy, examines 
investment and acquisition opportunities and discusses reports 
to shareholders. 
Internal controls
The Board has overall responsibility for the Group’s system of 
internal controls. However, such a system is designed to manage 
rather than eliminate the risk of failure to achieve business 
objectives, and can only provide reasonable and not absolute 
assurance against material misstatement. In order to discharge 
that responsibility in a manner which ensures compliance with 
laws and regulations and promotes effective and efficient 
operations, the Directors have established an organisation 
structure with clear operating procedures, lines of responsibility 
and delegated authority. There is an established framework  
of internal controls set out and approved by the executive 
management. The more important elements of this  
framework are as follows:
Management structure
The Board has overall responsibility for the Group and each 
Executive Director has been given responsibility for specific 
aspects of the Group’s affairs.
Corporate accounting and procedures 
Responsibility levels are communicated throughout the Group  
as part of the corporate communication procedure. Accounting, 
delegation of authority and authorisation levels, segregation of 
duties and other control procedures, together with the general 
ethos of the Group are included in these communications, and 
standardised accounting policies are in place reflecting this policy.
Governance 15
Dillistone Group Plc Annual Report and Accounts 2014
Quality and integrity of personnel
The integrity and competence of personnel is ensured through 
high recruitment standards and subsequent training courses. 
Quality personnel are seen as an essential part of the control 
environment and the ethical standards expected are 
communicated through senior members of staff.
Budgetary process 
Each year the Board approves the annual budget, which 
includes an assessment of key assumptions underlying it. 
Performance is monitored and relevant action taken throughout 
the year by monthly reporting to the Board of updated forecasts 
together with information on key risk areas.
Internal monitoring
The Audit Committee considers and determines relevant action 
in respect of any control issues raised by the auditors. Given the 
size of the Group and the close day-to-day control exercised by 
the Executive Directors and senior management, no formal 
financial internal audit department is considered necessary. The 
Operations Director is responsible for maintaining registrations 
and quality related certifications and defining and agreeing the 
procedures, standards and practices to be followed in all 
non-financial aspects of the Group’s business.
Risk management
The Board formally reviews the risk register at least annually and 
the consideration of risks and in particular the identification of 
new risks are an agenda item at each Board meeting.
Relationship with Company auditors
The auditors have ready access to the Chairman of the  
Audit Committee and the Audit Committee meets at least 
annually with the auditors without any member of the executive 
being present.
Remuneration
The objective of the Group’s remuneration policy is to attract, 
motivate, and retain high quality individuals who will contribute 
significantly to shareholder value. The Remuneration Committee 
decides on the remuneration of the Directors and other senior 
management, which comprises a basic salary, benefits, bonus 
scheme, share options and longer term incentive plan.
No Director is involved in deciding his or her own remuneration.
Relations with shareholders 
The Group seeks to maintain good communications with 
shareholders. The Executive Directors make presentations to 
institutional shareholders covering the interim and full year 
results. The Group despatches the notice of Annual General 
Meetings (AGM), with an explanatory circular describing items 
of special business, at least 21 working days before the meeting. 
All shareholders have the opportunity formally or informally to 
ask questions at the Company’s AGM and the Chairman 
typically makes a statement on current trading conditions at 
that meeting. The Chairman of the Audit and Remuneration 
Committees attends the AGM and will answer questions that 
may be relevant to the remit of those committees. At each AGM 
the Chairman advises shareholders of the proxy voting details 
on each of the resolutions, which are dealt with on a show of 
hands. In addition, webinars are made following certain 
announcements, giving shareholders and other interested 
parties access to commentary from the Board.
Auditor
A resolution authorising the Directors to set the remuneration of 
the Auditor will be put to shareholders at the forthcoming AGM.
Strategic Report
Governance
Financial Statements 16 
Dillistone Group Plc Annual Report and Accounts 2014
Remuneration report
Remuneration policy
The objective of the Group’s remuneration policy is to attract, motivate, and retain high quality individuals who will contribute 
significantly to shareholder value. The Remuneration Committee decides on the remuneration of the Directors and other senior 
management, which comprises a basic salary, benefits, bonus scheme, share options and longer term incentive plan.
Service contracts
The Board’s policy is that service contracts of Executive Directors should provide for termination by the Group on one year’s notice. 
The service contracts of each of the current Executive Directors provide for such a period of notice.
The independent Non-Executive Directors have letters of appointment providing fixed three-year service periods, which may be 
terminated by giving six months’ notice.
Non-Executive Directors’ remuneration
The fees for the Chairman and independent Non-Executive Director are determined by the Board. The Chairman and the  
Non-Executive Director are not involved in any discussions or decisions about their own remuneration.
The Chairman and independent Non-Executive Director do not receive bonuses or pension contributions and are not entitled to 
participate in any of the Group’s share schemes. They are entitled to be reimbursed the reasonable expenses incurred by them  
in carrying out their duties as Directors of the Company.
Executive Directors’ remuneration
The remuneration package of the Executive Directors includes the following elements:
Basic salary 
Salaries are normally reviewed annually taking into account inflation and salaries paid to Directors of comparable companies. Pay 
reviews also take into account Group and personal performance. The Board as a whole decides the remuneration of the Chairman 
and the Non-Executive Director.
Performance related pay scheme
There are two performance related pay schemes for Executive Directors. The first is an annual bonus scheme which is based upon 
the achievement of certain profit and commercial targets for the Group, as appropriate. A bonus of £22,000 was payable to the 
Executive Directors in respect of 2014 (2013: £66,000). 
The second scheme was introduced in 201 1 and is a long term incentive plan linked to growth in earnings per share over a three year 
period. Executive Directors have been granted phantom share options at the ruling mid-market price at the time of the grant. The 
awards are subject to meeting challenging EPS growth targets and will be cash settled. The Remuneration Committee can also choose, 
when making the award, to grant share options in place of phantom options with the same growth targets. In 2013 an alternative pure 
cash bonus fixed as a percentage of salary was introduced with similar EPS growth targets. It is expected that annual awards will be 
made under this later scheme going forward. Where phantom options are awarded, the value of the award is calculated at each 
reporting period using a Black-Scholes model (see note 22 for further details). One of the phantom option schemes was replaced  
by a cash bonus scheme which fixes the maximum payout. The awards made in the period are included below:
Directors’ remuneration (audited)
Details of the remuneration of the Directors for the financial year are set out below:
Salary and 
fees 
£’000
Annual 
bonus 
£’000
Pension
payments*
£’000
 Benefits 
£’000 
 2014 
Total 
£’000
2013 
Total 
£’000
Executive Directors 
J S Starr 93 5 27 – 125 136
R Howard 64 4 – 4 72 76
A D James 84 4 5 2 95 102
J P Pomeroy 83 4 9 – 96 102
A Milne 78 5 – 6 89 87
Non-Executive Directors 
M D Love 33 – – – 33 33
G R Fearnley 12 – – – 12 12
447 22 41 12 522 548
* Includes payments where salary sacrifice has been enabled.
Report to the Shareholders on Directors’ Remuneration
Governance 17
Dillistone Group Plc Annual Report and Accounts 2014
Long term incentive payments made in the period are not 
included in the above figures but are detailed below:
LTIP award (not audited) – phantom options
Number of 
phantom 
options 
granted in 
year 
Total value of 
all phantom 
option LTIP 
awards 
carried at 
31 December
2014* 
£’000
Total value of 
all phantom 
option LTIP 
awards 
carried at 
31 December
2013* 
£’000
J S Starr – 11 29
R Howard – 9 26
A D James – – –
J P Pomeroy – – –
A Milne – 6 17
– 26 72
LTIP award (not audited) – % of salary arrangement
Maximum 
payout 
awarded in 
period 
Paid in the 
year including 
employers  
NI
Total value of 
salary based 
LTIP awards 
carried at 
31 December
2014* 
£’000
Total value of 
all salary 
based  
LTIP awards 
carried at 
31 December
2013* 
£’000
J S Starr 37 14 5 47
R Howard 21 39 – 40
A D James 29 30 – 34
J P Pomeroy 29 26 – 31
A Milne 27 26 – 29
143 135 5 181
* Awards accrued over the period that they relate to and the valuation takes into 
account the likelihood of performance conditions being met.
LTIP Award (not audited) – share options
Number 
of options 
granted under 
LTIP scheme 
in year
Total number 
of options 
granted 
under LTIP 
scheme at 
31 December 
2014
Total number 
of options 
granted 
under LTIP 
scheme at  
31 December 
2013 
A D James – 109,589 109,589
J P Pomeroy – 111,233 111,233
– 220,822 220,822
These options were granted at 73p and carry the same 
performance conditions as the LTIP phantom option awards.
Directors’ interests
The interests of the Directors (including family interests) in the 
share capital of the Company at the year end are set out below:
Ordinary shares of 5 pence each
At 31 
December 
2014
At 31 
December 
2013
J S Starr 3,564,443 3,554,443
R Howard 3,300,000 3,300,000
A D James 101,494 101,494
M D Love 703,254 450,622
G R Fearnley 453,435 453,435
A Milne 59,109 59,109
J P Pomeroy 39,682 13,888
 
In addition, the following Directors had total share options 
including the options granted under the LTIP scheme above. 
Options over ordinary shares  
of 5 pence each
At 31 
December 
2014
At 31 
December 
2013
A D James 109,589 109,589
J P Pomeroy 111,233 137,027
220,822 246,616
Julie Pomeroy exercised 25,794 options during the year at a 
price of 77p.
Strategic Report
Governance
Financial Statements 18 
Dillistone Group Plc Annual Report and Accounts 2014
Board of Directors
Mike Love, aged 66
Non-Executive Chairman
Mike Love has a PhD in theoretical physics 
and over 30 years’ experience in the 
software industry. He is currently Non-
Executive Chairman of SciSys plc, also an 
AIM quoted company, and Director and 
Chairman at Redcliffe Precision Ltd. 
He was Group Managing Director of SciSys 
from 1986 to 2003 during which time he led 
a management buy-out of the business and 
floated it on AIM in 1997. He is a previous 
member of the AIM Advisory Group of the 
London Stock Exchange.
Jason Starr, aged 43
Chief Executive
Jason Starr joined Dillistone Systems in 
1994. He became Marketing Manager in 
1996 before becoming Managing Director 
of the UK business in 1998. Following the 
MBO, Jason became Managing Director of 
Dillistone Systems Ltd and subsequently 
became Group Chief Executive Officer. 
Jason is well known in the industry and has 
spoken at events in Asia, the US and Europe. 
Jason was appointed a Non-Executive 
Director of AIM listed IPPlus PLC from  
1 January 2015.
Jason has a BA (Honours) business studies 
degree from the London Guildhall 
University.
Jason is the Group Chief Executive of 
Dillistone Group Plc and Managing Director 
of Dillistone Systems. 
Rory Howard, aged 47
Operations Director
Rory Howard has a BA (Honours) in  
Business Administration and is a PRINCE2 
practitioner. Rory started his career with the 
Dixons Stores Group and from 1991 to 1994 
he worked in the systems and control 
department as a technical support analyst 
working on their EPOS systems, data 
reporting and security. He then joined  
JATO Dynamics Ltd, a software company 
specialising in the automotive research 
market, as a database analyst, developing 
databases for pricing models for the large 
automotive manufacturers. In 1998  
he joined Dillistone Systems Limited  
as a project manager, and the following 
year became the Global Projects  
Manager, tasked with restructuring  
all implementations and data migrations 
procedures and operations. In 2003  
Rory became Operations Director of 
Dillistone Systems Limited and a  
member of the Board.
Alex James, aged 42
Product Development Director
Alex graduated from Swansea University in 
1995 with a degree in Psychology. In 1995 
Alex joined Mallinckrodt Veterinary, working 
in quality control. In 1997 he moved to 
Responseability, a company that manages 
aspects of the recruitment process for 
clients, starting in administration before 
progressing into an account management 
role. Alex started at Dillistone in 1999 in a 
training/consultancy position prior to 
becoming the UK and then Global Projects 
Manager, being ultimately responsible for 
the implementation of all products and 
services to both new and existing clients. 
Alex joined the Board of Dillistone Systems 
Limited in January 2005 and the Group 
Board in February 2006.
Alex is the Product Development Director 
for Dillistone Systems; departments under 
his responsibility are software development 
and technical integration.
Governance 19
Dillistone Group Plc Annual Report and Accounts 2014
Alistair Milne, aged 39
Director of Support Services 
Alistair started his career at Richmond 
Theatre in 1994, working in both the 
marketing department and box office. In 
1997 he joined The Football Association, 
initially in a ticketing administration role, 
before progressing to a management role. 
Alistair then began working at the Shaw 
Theatre as Box Office Manager. He joined 
Dillistone Systems in 2003. He was initially 
appointed to the UK and then Global 
Support Manager role with responsibility for 
all aspects of support services. 
He was promoted to the Dillistone Systems 
Limited Board in 2006 and joined the Group 
Board in January 2011.
Alistair is the Director of Support Services; 
he oversees all Dillistone IT infrastructure 
and support services globally.
Julie Pomeroy, aged 59
Finance Director
Julie is an experienced Finance Director  
of quoted and private companies. She 
graduated with an honours degree in 
Physics from Birmingham University and is 
a Chartered Accountant and Chartered 
Director. She also holds tax and treasury 
qualifications. Julie was group finance 
Director of Carter & Carter Group plc until 
October 2005 having joined in 2002 to help 
grow and float the business. 
She had previously been Chief Financial 
Officer of Weston Medical Group plc and 
prior to this Julie worked at East Midlands 
Electricity plc as Director of corporate 
finance. She was Finance Director of AIM 
quoted Biofutures International plc until 
July 2010. Julie is also a Non-Executive 
Director of Nottingham University Hospitals 
NHS Trust.
Giles Fearnley, aged 60
Non-Executive Director
A career in the passenger transport industry 
saw Giles lead an MBO in 1991, forming 
Blazefield Holdings Limited, a business 
operating bus networks principally across 
Yorkshire and Lancashire. This company was 
sold to Transdev in 2006.
In 1997 he was appointed chief executive 
of Prism Rail PLC, having been one of that 
company’s founders, and held that position 
until its sale to National Express in 2000. 
Prism Rail operated four of the UK’s 
passenger rail franchises with a turnover of 
£500m per annum.
Giles is currently Managing Director – Bus, 
UK and Ireland for First Group Plc. Giles 
served as Chairman of the Association of 
Train Operating Companies in 1999/2000 
and as Chairman of The Confederation of 
Passenger Transport UK.
Strategic Report
Governance
Financial Statements 20 
Dillistone Group Plc Annual Report and Accounts 2014
Directors’ Report
The Directors present their report and financial statements for 
the year ended 31 December 2014.
Results and dividends
The consolidated statement of comprehensive income for the 
year is set out on page 22.
An interim dividend of 1.3p per share was paid in June 2014.  
A final dividend of 2.7p per share will be paid, subject to 
shareholder approval, on 24 June 2015.
Directors
The following Directors have held office since 1 January 2014 
other than where stated:
M D Love – Non-Executive Chairman 
J S Starr 
R Howard 
A D James 
J P Pomeroy
G R Fearnley – Non-Executive Director
A Milne 
The interests of the Directors (including family interests) in the 
share capital of the Company are listed on page 17 .
Jason Starr and Alex James are proposed for re-election at the 
forthcoming AGM. Both have service contracts with a one year 
notice period. 
Financial risk management
Details of the Group’s financial risk management is set out in the 
Strategic Report section. 
Principal shareholders
As at 23 April 2015, the Directors have been notified of the 
following shareholdings in excess of 3% of the Company’s 
issued share capital:
Ordinary 
shares of  
5 pence each Percentage
J S Starr 3,564,433 18.38%
R Howard 3,300,000 17.02%
J McLaughlin 2,572,122 13.26%
Herald Investment Management 1,767,444 9.11%
Unicorn Asset Management 1,595,301 8.22%
CFS Independent 870,889 4.49%
M Love 703,254 3.62%
R Howells 650,000 3.35%
Directors’ and officers’ insurance
The Group maintains insurance cover for all Directors and 
officers of Group companies against liabilities which may be 
incurred by them while acting as Directors and officers.
Annual General Meeting
The Company’s Annual General Meeting will be held at 
Voyager Software Limited, 12 Cedarwood, Crockford Lane, 
Chineham Park, Basingstoke RG24 8WD on 18 June 2015 at 
10:30 am. The Notice convening the Annual General Meeting 
and an explanation of the business to be put to the meeting is 
contained in the separate document to shareholders which 
accompanies this report.
Auditor
Grant Thornton UK LLP was appointed as auditor for the year 
ended 31 December 2014 and a resolution proposing their 
re-appointment as auditors to the Company will be put to the 
forthcoming Annual General Meeting.
Directors’ responsibilities
The Directors are responsible for preparing the Directors’ Report 
and the financial statements in accordance with applicable law 
and regulations.
Company law requires the Directors to prepare financial 
statements for each financial year. Under that law the Directors 
have elected to prepare the Company’s financial statements in 
accordance with International Financial Reporting Standards as 
adopted by the European Union (IFRSs). 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 accounting estimates that are 
reasonable and prudent;
• state whether applicable IFRSs have been followed, subject 
to any material departures disclosed and explained in the 
financial statements;
• 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 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.
The Directors confirm that so far as each Director 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 as Directors 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.
On behalf of the Board
J P Pomeroy
Company Secretary
24 April 2015
Governance 21
Dillistone Group Plc Annual Report and Accounts 2014
Independent Auditor’s Report
To the Members of Dillistone Group Plc for the year ended 31 December 2014
Independent auditor’s report to the members of  
Dillistone Group Plc
We have audited the financial statements of Dillistone Group Plc 
for the year ended 31 December 2014 which comprise the 
consolidated statement of comprehensive income, the 
consolidated and parent company statements of changes in 
equity, the consolidated and parent company statement of 
financial position, the consolidated and parent company cash 
flow statements and the related notes. The financial reporting 
framework that has been applied in their preparation is 
applicable law and International Financial Reporting Standards 
(IFRSs) as adopted by the European Union and, as regards the 
parent company financial statements, as applied in accordance 
with the provisions of the Companies Act 2006.
This report is made solely to the Company’s members, as a 
body, in accordance with Chapter 3 of Part 16 of the Companies 
Act 2006. Our audit work has been undertaken so that we might 
state to the Company’s members those matters we are required 
to state to them in an auditor’s report and for no other purpose. 
To the fullest extent permitted by law, we do not accept or 
assume responsibility to anyone other than the Company and 
the Company’s members as a body, for our audit work, for this 
report, or for the opinions we have formed.
Respective responsibilities of Directors and auditor
As explained more fully in the Directors’ Responsibilities 
Statement, set out on page 20, the Directors are responsible  
for the preparation of the financial statements and for being 
satisfied that they give a true and fair view. Our responsibility is 
to audit and express an opinion on the financial statements in 
accordance with applicable law and International Standards on 
Auditing (UK and Ireland). Those standards require us to comply 
with the Auditing Practices Board’s (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 Financial Reporting Council’s website at  
www.frc.org.uk/auditscopeukprivate
Opinion on financial statements
In our opinion:
• the financial statements give a true and fair view of the state 
of the group’s and of the parent company’s affairs as at  
31 December 2014 and of the group’s profit for the year  
then ended; 
• the group financial statements have been properly prepared 
in accordance with IFRSs as adopted by the European Union; 
• the parent company financial statements have been properly 
prepared in accordance with IFRSs as adopted by the 
European Union and as applied in accordance with the 
provisions of the Companies Act 2006; and
• the financial statements 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 Strategic Report  
and the Directors’ Report for the financial year for which the 
financial statements are prepared is consistent with the  
financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters 
where the Companies Act 2006 requires us to report to you if,  
in our opinion:
• 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.
Paul Etherington BSc FCA CF
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
24 April 2015
Strategic Report
Governance
Financial Statements 22 
Dillistone Group Plc Annual Report and Accounts 2014
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2014
Note
2014
 £’000 
2013
 £’000 
Revenue 3 8,625 8,101
Cost of sales (1,108) (957)
Gross profit 7,517 7,144
Administrative expenses (6,115) (5,561)
Profits from operating activities 6 1,402 1,583
Adjusted operating profit before acquisition related items 2 1,820 1,793
Acquisition related items 5 (418) (210)
Operating profit 1,402 1,583
Financial income 8 6 8
Finance cost 8 (103) (68)
Profit before tax 1,305 1,523
Tax expense 9 (160) (292)
Profit for the year 1,145 1,231
Other comprehensive income net of tax:
Items that will be reclassified subsequently to profit and loss
Currency translation differences (8) (16)
Total comprehensive income for the year net of tax 1,137 1,215
Earnings per share – from continuing activities
Basic 10 6.18p 6.76p
Diluted 10 5.95p 6.51p
The notes on pages 28 to 56 are an integral part of these consolidated financial statements.
Financial Statements 23
Dillistone Group Plc Annual Report and Accounts 2014
Consolidated Statement of Changes in Equity
For the year ended 31 December 2014
 Share 
 capital 
 £’000 
 Share 
 premium 
 £’000 
 Merger 
 reserve 
 £’000 
 Retained 
 earnings 
 £’000 
 Share 
 option 
 £’000 
 Foreign 
exchange 
 £’000 
 Total 
 £’000 
Balance at 31 December 2012 910 451 365 2,528 68 152 4,474
Comprehensive income
Profit for the year ended 31 December 2013 – – – 1,231 – – 1,231
Other comprehensive income
Exchange differences on translation of 
overseas operations – – – – – (16) (16)
Total comprehensive income – – – 1,231 – (16) 1,215
Transactions with owners
Issue of share capital 4 47 – – – – 51
Share option charge – – – – 53 – 53 
Dividends paid – – – (683) – – (683) 
Total transactions with owners 4 47 – (683) 53 – (579)
Balance at 31 December 2013 914 498 365 3,076 121 136 5,110 
Comprehensive income
Profit for the year ended 31 December 2014 – – – 1,145 – – 1,145
Other comprehensive income
Exchange differences on translation of 
overseas operations – – – – – (8) (8)
Total comprehensive income – – – 1,145 – (8) 1,137
Transactions with owners
Issue of share capital 55 934 – – – – 989
Share option charges – – – 16 (3) – 13 
Dividends paid – – – (723) – – (723) 
Total transactions with owners 55 934 – (707) (3) – 279
Balance at 31 December 2014 969 1,432 365 3,514 118 128 6,526 
The notes on pages 28 to 56 are an integral part of these consolidated financial statements.
Strategic Report
Governance
Financial Statements 24 
Dillistone Group Plc Annual Report and Accounts 2014
Company Statement of Changes in Equity
For the year ended 31 December 2014
Share
capital
£’000
Share
premium
£’000
Merger 
reserve
£’000
Retained
earnings
£’000
Share 
option
£’000
Total
£’000
Balance at 31 December 2012 910 451 365 1,142 68 2,936
Comprehensive income
Total comprehensive income for the year ended  
31 December 2013 – – – 715 – 715 
Transactions with owners
Issue of share capital 4 47 – – – 51
Share option charge – – – – 53 53
Dividends paid – – – (683) – (683)
Total transactions with owners 4 47 – (683) 53 (579)
Balance at 31 December 2013 914 498 365 1,174 121 3,072
Comprehensive income
Total comprehensive income for the year ended  
31 December 2014 – – – 896 – 896 
Transactions with owners
Issue of share capital 55 934 – – – 989 
Share option charge – – – 16 (3) 13 
Dividends paid – – – (723) – (723) 
Total transactions with owners 55 934 – (707) (3) 279
Balance at 31 December 2014 969 1,432 365 1,363 118 4,247
The notes on pages 28 to 56 are an integral part of these consolidated financial statements.
Financial Statements 25
Dillistone Group Plc Annual Report and Accounts 2014
Consolidated and Company Statements of Financial Position
As at 31 December 2014
Group Company
Notes
2014
 £’000 
2013
 £’000 
2014
 £’000 
2013 
£’000
ASSETS
Non-current assets
Goodwill 12 3,415 2,745 – –
Other intangible assets 13 6,317 4,833 – –
Property, plant and equipment 14 299 127 – –
Investments 15 – – 7,599 5,675
10,031 7,705 7,599 5,675
Current assets
Inventories 16 41 78 – –
Trade and other receivables 17 1,784 1,790 331 365
Cash and cash equivalents 1,929 1,399 387 78
3,754 3,267 718 443
Total assets 13,785 10,972 8,317 6,118
EQUITY AND LIABILITIES 
Equity attributable to owners of the parent
Share capital 20 969 914 969 914
Share premium 1,432 498 1,432 498
Merger reserve 365 365 365 365
Retained earnings 3,514 3,076 1,363 1,174
Share option reserve 22 118 121 118 121
Translation reserve 128 136 – –
Total equity 6,526 5,110 4,247 3,072
Liabilities
Non-current liabilities
Trade and other payables 18 666 459 666 459
Borrowings 19 325 – 325 –
Deferred tax liability 9 1,152 901 – –
Current liabilities
Trade and other payables 18 4,669 4,313 2,917 2,587
Borrowings 19 162 – 162 –
Current tax payable 285 189 – –
Total liabilities 7,259 5,862 4,070 3,046
Total liabilities and equity 13,785 10,972 8,317 6,118
The notes on pages 28 to 56 are an integral part of these consolidated financial statements.
The financial statements were approved by the Board of Directors and authorised for issue on 24 April 2015. They were signed on its 
behalf by
J P Pomeroy 
Director
Company Registration No. 4578125 
Strategic Report
Governance
Financial Statements 26 
Dillistone Group Plc Annual Report and Accounts 2014
Consolidated Cash Flow Statement
For the year ended 31 December 2014
2014
£’000
2013
£’000
Operating activities
Profit before tax 1,305 1,523
Less taxation paid (122) (273)
Adjustment for:
Financial income (6) (8)
Financial cost 103 68
Depreciation and amortisation 868 621
Share option expense 13 53
Foreign exchange adjustments arising from operations (3) 14
Operating cash flows before movement in working capital 2,158 1,998
Increase in receivables (81) (120)
Decrease/(increase) in inventories 37 (15)
Increase in payables 4 259
Net cash generated from operating activities 2,118 2,122
Investing activities
Interest received 6 7
Finance cost (2) –
Purchases of property, plant and equipment (259) (83)
Investment in development costs (814) (747)
Acquisition of subsidiaries net of cash acquired (718) (715)
Contingent consideration paid (550) (185)
Net cash used in investing activities (2,337) (1,723)
Financing activities
Net proceeds from issue of share capital 989 51
Bank loan received 500 –
Bank loan repayments made (13) –
Dividends paid (753) (683)
Net cash generated from/(used in) by financing activities 753 (632)
Net increase/(decrease) in cash and cash equivalents 534 (233)
Cash and cash equivalents at beginning of year 1,399 1,643
Effect of foreign exchange rate changes (4) (11)
Cash and cash equivalents at end of year 1,929 1,399
The notes on pages 28 to 56 are an integral part of these consolidated financial statements.
Financial Statements 27
Dillistone Group Plc Annual Report and Accounts 2014
Company Cash Flow Statement
As at 31 December 2014
2014
 £’000 
2013
 £’000 
Operating activities
Profit before tax 896 715
Less taxation paid – –
Adjustment for:
 Financial cost 103 68
 Share option expense 13 53
Operating cash flows before movements in working capital 1,012 836
Decrease /(increase) in receivables 36 (334)
Increase in payables 123 1,214
Net cash generated from operating activities 1,171 1,716
Investing activities
Finance cost (2) –
Investment in acquisitions (1,063) (832)
Contingent consideration paid (550) (185)
Net cash used in investing activities (1,615) (1,017)
Financing activities
Net proceeds from issue of share capital 989 51
Bank loan received 500 –
Bank loan repayments made (13) –
Dividends paid (723) (683)
Net cash from/(used) in financing activities 753 (632)
Net increase in cash and cash equivalents 309 67
Cash and cash equivalents at beginning of year 78 11
Cash and cash equivalents at end of year 387 78
The notes on pages 28 to 56 are an integral part of these consolidated financial statements.
Strategic Report
Governance
Financial Statements 28 
Dillistone Group Plc Annual Report and Accounts 2014
Notes to the Financial Statements
For the year ended 31 December 2014
Dillistone Group Plc (the ‘Company’) is a company incorporated in England and Wales. The financial statements are presented in 
thousand Pounds Sterling.
The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as the ‘Group’). The 
parent company financial statements present information about the Company as a separate entity and not about its Group.
Both the Group financial statements and the Company financial statements have been prepared and approved by the Directors  
in accordance with International Financial Reporting Standards (’IFRS’) as adopted by the European Union (’EU’), IFRIC 
Interpretations and the Companies Act 2006 applicable to companies reporting under IFRS. In publishing the Company financial 
statements here together with the Group financial statements, the Company has taken advantage of the exemption in s408 of the 
Companies Act 2006 not to present its individual income statement and related notes in these financial statements.
1. Accounting policies
1.1 Basis of accounting
The consolidated financial statements have been prepared using the significant accounting policies and measurement bases 
summarised below: 
Significant estimates
In the application of the Group’s accounting policies the Directors are required to make estimates and assumptions about the 
carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated 
assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from 
these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in 
the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if 
the revision affects both current and future periods. The key areas are summarised below:
Valuation of share-based payments
The estimation of share-based payment costs requires the selection of an appropriate valuation model and consideration as to the 
inputs necessary for the valuation model chosen. The Group has made estimates as to the volatility of its own shares, the probable 
life of options granted, leaver rates and the time of exercise of those options. The model used by the Group is a Black-Scholes 
valuation model. Further details are shown in note 22.
Impairment of goodwill and other intangible assets
There are a number of assumptions management have considered in performing impairment reviews of goodwill and intangible 
assets which include an estimate of the future cash flows expected to arise from the cash generating unit and a suitable discount 
rate in order to calculate the recoverable amount. See note 12.
Business combinations
On initial recognition, the assets and liabilities of the acquired business are included in the consolidated statement of financial 
position at their fair values. In measuring fair value, management uses estimates about future cash flows and discount rates. 
However, actual results may vary. Details of acquired assets and liabilities are given in note 23.
Contingent consideration
Where contingent consideration is payable in cash and discounting would have a material effect, management uses an appropriate 
discount rate. As the contingent consideration is dependent upon future trading performance, an estimate of the present value of 
the likely consideration payable is made at each reporting date. See note 23.
Judgements in applying the Group’s accounting policies
In the process of applying the Group’s accounting policies, management make various judgements that can significantly affect the 
amounts recognised in the financial statements. The critical judgements are considered to be the following:
Customers’ practical acceptance of licence software
As detailed in note 1.4, perpetual licence fee revenues are recognised on practical acceptance of the software. The Group uses the 
‘live’ date as the basis of determining the timing of customer practical acceptance, thereby reducing the judgement required to 
ascertain the timing of licence revenue recognition.
Financial Statements 29
Dillistone Group Plc Annual Report and Accounts 2014
1. Accounting policies continued
Capitalisation of internal development expenditure
Management exercises judgement in establishing both the technical feasibility of completing an intangible asset which can be used 
internally or sold and the degree of certainty that a market exists for the asset, or its output, for the generation of future economic 
benefits. In addition, amortisation rates are based on estimates of the useful economic lives and residual values of the assets 
involved. The assessment of these useful economic lives is made by projecting the economic lifecycle of the asset which is subject to 
alteration as a result of product development and innovation. Amortisation rates are changed where economic lives are re-assessed 
and technically obsolete items written off where necessary. The carrying value of capitalised development is reviewed for 
impairment at each accounting period end. See note 13. 
Valuation of assets and liabilities
Management has made a number of assumptions with regards to the models used to value assets and liabilities at the statement 
of financial position date. Valuation techniques commonly used by market practitioners are applied. In respect of the provision for 
bad and doubtful receivables and credit note provisions, management has made relevant judgements based on discussions with 
the account managers as regards the recoverability of trade receivables. 
Valuation of separately identifiable intangible assets
As detailed in note 1.7 , separately identifiable intangible assets are identified and amortised over a defined period. The Directors use 
an acknowledged approach but this is reliant upon certain judgements, including the assumptions to be used in the capital asset 
pricing model, which they determine are reasonable by reference to companies in similar industries.
The accounting policies set out below have, unless otherwise stated, been applied consistently by the Group to all periods presented 
in these financial statements.
1.2 Going concern
The Group’s business activities and financial position, together with the factors likely to affect its future development, performance 
and position, are set out in the CEO’s Review and Financial Review on pages 6 to 13. In addition, note 24 to the financial statements 
includes the Company’s objectives, policies and processes for managing its capital; its financial risk management objectives; details 
of its financial instruments; and its exposures to credit risk and liquidity risk. The Group prepare budgets and cash flow forecasts to 
ensure that the Group can meet its liabilities as they fall due.
The Group has considerable financial resources together with well established relationships with a number of customers and 
suppliers across different geographic areas. In addition a substantial proportion of its revenue is recurring.
As a consequence, the Directors believe that the Company is well placed to manage its business risks successfully despite the current 
uncertain economic outlook.
The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the 
foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements. 
1.3 Basis of consolidation
The Group financial statements consolidate those of the parent company and all of its subsidiaries as of 31 December 2014. The 
parent controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the 
ability to affect those returns through its power over the subsidiary. All subsidiaries have a reporting date of 31 December.
All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and losses on 
transactions between Group companies. Where unrealised losses on intra-group asset sales are reversed on consolidation, the 
underlying asset is also tested for impairment from a Group perspective. Amounts reported in the financial statements of 
subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the 
effective date of acquisition, or up to the effective date of disposal, as applicable.
1.4 Revenue
General
Revenue is the fair value of the total amount receivable by the Group for supplies of products and services which are provided in the 
normal course of business. VAT or similar local taxes and trade discounts are excluded.
 
Strategic Report
Governance
Financial Statements 30 
Dillistone Group Plc Annual Report and Accounts 2014
Notes to the Financial Statements continued
For the year ended 31 December 2014
1. Accounting policies continued
Licensing (excluding SaaS)
The Group licences software under licence agreements. Perpetual licence fee revenues are recognised on practical acceptance of the 
software, when all obligations have been substantially completed. This is when the customer has accepted the product, the risks and 
rewards of ownership have been transferred, it is probable that the economic benefits of the transaction will flow to the Group, all 
costs and revenue in relation to the transaction can reliably be measured and the Group has no further managerial involvement 
over the goods to the degree usually associated with ownership. To the extent that payments have been received in advance for 
licences, where practical acceptance has not yet been reached, these amounts are recognised as deferred income.
Professional services
The Group provides professional services which include installation, consulting, data translation and training. Such revenues  
are recognised as the services are completed or, where they are part of the sale and installation of software, they are typically 
recognised when the obligations under the contract are complete. To the extent that payments have been received in advance  
for such services these amounts are recognised as deferred income. 
Product support, hosting and software as a service (SaaS)
Revenues from support, hosting or SaaS agreements are recognised over the period to which they relate but only after practical 
acceptance of the software, as defined above, has been received. Where revenue is invoiced in advance for such services, the 
amount in advance is included in deferred revenue and released over the period to which the service relates. 
Third party revenues
The Group sells, predominantly as principal, software developed by other organisations together with services that are bought in 
from third parties. Sales of third party software are recognised in the period in which the sale occurs. Services are recognised in the 
period in which they are provided. 
Tokens
The Group sells tokens to access certain services within the business. Tokens are normally bought in bundles and can be used over 
time. Tokens currently do not have a fixed expiry period. Revenue is only recognised on use.
1.5 Share-based payments
The Company operates two share-based payment schemes and one cash based scheme. 
The first is an equity settled share-based compensation plan (share options) for remuneration of its employees. It can also be used 
in conjunction with a long term incentive plan for executives.
All employee services received in exchange for the grant of any share-based compensation are measured at their fair values. These 
are indirectly determined by reference to the share option awarded. Their value is appraised at the grant date and excludes the 
impact of any non-market vesting conditions (e.g. profitability or sales growth targets). 
All equity-settled share-based compensation is ultimately recognised as an expense in the profit or loss with a corresponding credit 
to share-based payment reserve, net of deferred tax where applicable. If vesting periods or other vesting conditions apply, the 
expense is allocated over the vesting period, based on the best available estimate of the number of shares options expected to vest. 
Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. 
Estimates are subsequently revised if there is any indication that the number of share options expected to vest differs from previous 
estimates. No adjustment to expenses recognised in prior periods is made if fewer share options ultimately are exercised than 
originally estimated.
Upon exercise of share options, the proceeds received, net of any directly attributable transaction costs, up to the nominal value  
of the shares issued are reallocated to share capital with any excess being recorded as additional share premium.
The second scheme is a cash settled share-based compensation plan for Directors. Under this scheme, Directors are granted 
‘phantom’ options which have performance conditions related to the growth in earnings per share of the Group. The options will 
automatically be exercised following the publication of the Annual Report of the Company, three years after the grant. These 
phantom options are revalued at each reporting date using a Black-Scholes model and the necessary movement in the liability is 
recognised through the income statement. The liability is included as appropriate in current and non-current liabilities. The Directors 
agreed to waive their rights under the plan maturing in 2014 and replace it with a capped cash bonus scheme with the similar 
performance conditions and which matures in the same timeframe.
Where there is a modification to a cash settled scheme, the change in fair value between the current and previous scheme is 
immediately recognised in the profit or loss.
Financial Statements 31
Dillistone Group Plc Annual Report and Accounts 2014
1. Accounting policies continued
1.6 Long term incentive plan – capped cash bonus
The LTIP awards granted in 2014 were based on a capped cash bonus with performance conditions related to the growth in  
earnings per share of the Group. These awards automatically mature following the publication of the Annual Report of the Company, 
three years after the period to which the grant relates. The liability is accrued and recognised through the income statement.
1.7 Business combinations
The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to 
obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and 
the equity interests issued by the Group, which includes the fair value of any asset or liability arising from a contingent consideration 
arrangement. Acquisition costs are expensed as incurred.
 
The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have 
been previously recognised in the acquiree’s financial statements prior to the acquisition. Assets acquired and liabilities assumed are 
generally measured at their acquisition-date fair values. Goodwill is stated after separate recognition of identifiable intangible 
assets. It is calculated as the excess of the sum of a) fair value of consideration transferred, b) the recognised amount of any 
non-controlling interest in the acquiree and c) acquisition-date fair value of any existing equity interest in the acquiree, over the 
acquisition-date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the sum calculated above, 
the excess amount (ie gain on a bargain purchase) is recognised in profit or loss immediately. 
Where contingent consideration relates to the results spread over different accounting periods, the fair value of such consideration  
is recalculated at each year end and any adjustment is recognised in profit or loss immediately.
1.8 Adjusted operating profit
Adjusted operating profit excludes acquisition costs and related intangible amortisation and movements in deferred consideration 
and other one off costs which can include, as an example, buying out onerous contracts acquired through an acquisition.
1.9 Impairment testing of goodwill, other intangible assets and property, plant and equipment
For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely independent cash inflows 
(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 goodwill. Cash generating units to 
which goodwill has been allocated 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 asset’s or cash generating unit’s carrying amount exceeds its 
recoverable amount, which is the higher of fair value less costs to sell and value-in-use. To determine the value-in-use, 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. The data used for impairment testing procedures are directly linked to the Group’s latest 
approved budget, adjusted as necessary to exclude the effects of future reorganisations and asset enhancements. Discount factors 
are determined individually for each cash generating unit and reflect management’s assessment of respective risk profiles, such as 
market and asset-specific risks factors. Impairment losses for cash generating units reduce first the carrying amount of any goodwill 
allocated to that cash generating unit. 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. An impairment charge is reversed if the cash generating unit’s recoverable amount exceeds its 
carrying amount.
1.10 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. 
The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating 
segments, has been identified as the Board of Directors.
Strategic Report
Governance
Financial Statements 32 
Dillistone Group Plc Annual Report and Accounts 2014
Notes to the Financial Statements continued
For the year ended 31 December 2014
1. Accounting policies continued
1.11 Intangible assets
Internal development costs
Costs incurred on product development relating to the design and development of new or enhanced products are capitalised as 
intangible assets when it is reasonably certain that the development will provide economic benefits, considering its commercial and 
technological feasibility and the resources available for the completion and marketing of the development, and where the costs can be 
measured reliably. The expenditures capitalised are the direct labour and subcontracted costs, which are managed and controlled 
centrally. Product development costs previously recognised as an expense are not recognised as an asset in a subsequent period.
Capitalised product development expenditure for versions of the Group’s FileFinder product (up to version 9) and for expenditure on 
subsequent enhancements and releases to FileFinder 10 and FileFinder Anywhere is amortised over its useful life of three years, 
commencing a year following the costs being incurred. Maintenance costs are expensed.
Capitalised product development expenditure for the Company’s FileFinder version 10, the Browser version of FileFinder and 
Voyager Infinity platform is amortised over its useful life of 10 years or to 30 June 2021, whichever is the shorter period, 
commencing in the year in which the product is first brought into use.
Capitalised product development expenditure is subject to regular impairment reviews and is stated at cost less any accumulated 
impairment losses and amortisation. Any impairment taken during the year is shown under administrative expenses on the 
consolidated statement of comprehensive income.
Acquired as part of a business combination
In accordance with IFRS 3 Business Combinations, an intangible asset acquired in a business combination is deemed to have a cost 
to the Group of its fair value at the acquisition date. The fair value of the intangible asset reflects market expectations about the 
probability that the future economic benefits embodied in the asset will flow to the Group. Where an intangible asset might be 
separable, but only together with a related tangible or intangible asset, the Group of assets is recognised as a single asset separately 
from goodwill where the individual fair values of the assets in the Group are not reliably measurable. Where the individual fair values 
of the complementary assets are reliably measurable, the Group recognises them as a single asset provided the individual assets 
have similar useful lives.
Subsequent to initial recognition, intangible assets are reported at cost less accumulated amortisation and accumulated 
impairment losses. Amortisation is provided to write off the cost of each intangible asset over its useful economic life as follows:
Estimated life
Intangible assets
Brand 15 years
Brand and IP 15 years
Developed technology 6–11.25 years
Contractual customer relationships 1.25 years
Non-contractual customer relationships 10–10.25 years
1.12 Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation on these assets is provided at rates 
estimated to write off the cost, less estimated residual value, of each asset over its expected useful life as follows:
Leasehold land and buildings the lower of 5 years or the remaining lease period
Office and computer equipment 3-5 years straight line
Fixtures, fittings and equipment 4 years straight line
1.13 Financial assets
The Group classifies its financial assets under the definitions provided in International Accounting Standard 39 (IAS 39) Financial 
Instruments: Recognition and measurement, depending on the purpose for which the financial assets were acquired. Management 
determines the classification of its financial assets at initial recognition. Management considers that the Group’s financial assets fall 
under the ‘loans and receivables’ category.
Loans and receivables are non-derivative financial assets with fixed or determined payments that are not quoted in an active 
market. They are included in current assets, except for maturities greater than 12 months after the statement of financial position 
date, which are classified as non-current assets. The Group’s loans and receivables comprise trade receivables, intercompany trading 
balances (in relation to Company accounts), and cash and cash equivalents.
Financial Statements 33
Dillistone Group Plc Annual Report and Accounts 2014
1. Accounting policies continued
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest  
rate method, less any provision for impairment. Receivables are considered for impairment when they are past due or when other 
objective evidence is received that a specific counterparty may default. Receivables that are not considered to be individually 
impaired are reviewed for impairment in groups. The impairment loss estimate is then based on recent historical counterparty 
default rates and current economic conditions. 
Derecognition of financial assets occurs when the rights to receive cash flows from the investments expire or are transferred and 
substantially all of the risks and rewards of ownership have been transferred. An assessment for impairment is undertaken at least 
at each statement of financial position date whether or not there is objective evidence that a financial asset or a group of financial 
assets is impaired.
1.14 Financial liabilities
The Group classifies its financial liabilities under the definitions provided in IAS 39, either as financial liabilities at fair value through 
profit or loss, or financial liabilities measured at amortised cost. Management considers that the Group’s financial liabilities fall under 
the ‘financial liabilities measured at amortised cost’ category other than contingent consideration which is measured at fair value 
and movements in fair value are recognised in the profit or loss. The Group’s ‘financial liabilities measured at amortised cost’ 
comprise trade payables, intercompany trading balances (in relation to Company accounts), bank loans and accruals.
Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective 
interest method.
1.15 Investments
Investments in subsidiary companies are included at cost in the accounts of the Company less any amount written off in respect  
of any impairment in value.
1.16 Leases
Finance leases are recognised as being those that transfer substantially all the risks and rewards of ownership. Assets held under 
finance leases are capitalised and the outstanding future lease obligations are shown in payables at the present value of the lease 
payments. They are depreciated over the term of the lease or their useful economic lives, whichever is the shorter. The interest 
element (finance charge) of lease payments is charged to profit or loss over the period of the lease.
All other leases are regarded as operating leases and the payments made under them are charged to profit or loss in the period in 
which they are incurred on a straight line basis over the lease term. The Group does not act as a lessor.
1.17 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost includes all directly attributable expenses. Costs of ordinarily 
interchangeable items are assigned using the first in, first out cost formula. Net realisable value is the estimated selling price in the 
ordinary course of business less any applicable selling expenses.
1.18 Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term highly liquid investments 
with original maturities of three months or less and which are subject to an insignificant risk of changes in value.
1.19 Equity
Equity comprises the following:
• ‘Share capital’ represents the nominal value of equity shares.
• ‘Share premium’ represents the excess over nominal value of the fair value of consideration received for equity shares, net of 
expenses of the share issue.
• ‘Merger reserve’ is used where more than 90% of the shares in a subsidiary are acquired and the consideration includes the issue 
of new shares by the Company, thereby attracting merger relief under the Companies Act 2006.
• ‘Share option reserve’ represents equity-settled share-based employee and non-employee remuneration until such share options 
are exercised.
• ‘Retained earnings’ represents retained profits and losses.
• ‘Translation reserve’ represents translation differences arising on the consolidation of investments in overseas subsidiaries.
Strategic Report
Governance
Financial Statements 34 
Dillistone Group Plc Annual Report and Accounts 2014
Notes to the Financial Statements continued
For the year ended 31 December 2014
1. Accounting policies continued
1.20 Foreign currency translation
The consolidated financial statements are presented in Sterling, which is also the functional currency of the parent company.
Monetary assets and liabilities denominated in foreign currencies are translated into Sterling at the rates of exchange ruling at the 
statement of financial position date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. 
All differences are taken to profit and loss.
On consolidation, the assets and liabilities of the Group’s overseas subsidiaries are translated from their functional currency to 
Sterling at exchange rates prevailing on the statement of financial position date. Income and expenses have been translated from 
their functional currency into Sterling at the average rate for each month over the reporting period. Exchange differences are 
charged/credited to other comprehensive income and recognised in the currency translation reserve in equity.
1.21 Income taxes
Current income tax assets and liabilities comprise those obligations to fiscal authorities in the countries in which the Group carries 
out its operations. They are calculated according to the tax rates and tax laws applicable to the fiscal period and the country to 
which they relate. Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in other 
comprehensive income or directly in equity. 
Deferred income taxes are calculated using the liability method on temporary differences. This involves the comparison of the 
carrying amount of assets and liabilities in the consolidated financial statements with their respective tax bases. However, deferred 
tax is not provided on the initial recognition of goodwill, or 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 
investments in subsidiaries 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.
 
Deferred tax liabilities are always provided for in full. Deferred tax assets are recognised to the extent that it is probable that future 
taxable profits will be available against which the temporary differences can be utilised. 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 statement of financial position date. Tax expense recognised in profit or loss comprises the sum of deferred tax and 
current tax not recognised in other comprehensive income or directly in equity.
1.22 Defined contribution pension scheme
The pension costs charged in profit or loss represent the contributions payable by the Group during the year.
1.23 New accounting standards
(i) New and amended standards adopted by the Group: 
IFRS 10 ‘Consolidated Financial Statements’ (IFRS 10)
IFRS 10 supersedes IAS 27 ‘Consolidated and Separate Financial Statements’ (IAS 27) and SIC 12 ‘Consolidation-Special Purpose 
Entities’. IFRS 10 revises the definition of control and provides extensive new guidance on its application. These new requirements 
have the potential to affect which of the Group’s investees are considered to be subsidiaries and therefore to change the scope of 
consolidation. The requirements on consolidation procedures, accounting for changes in non-controlling interests and accounting 
for loss of control of a subsidiary are unchanged.
Management has reviewed its control assessments in accordance with IFRS 10 and has concluded that there is no effect on the 
classification (as subsidiaries) of any of the Group’s investees held during the period or comparative periods covered by these 
financial statements.
IFRS 12 ‘Disclosure of Interests in Other Entities’ (IFRS 12)
IFRS 12 integrates and makes consistent the disclosure requirements for various types of investments, including unconsolidated 
structured entities. It introduces new disclosure requirements about the risks to which an entity is exposed from its involvement with 
structured entities. Note 15 illustrates the application of IFRS 12 in the current year.
Financial Statements 35
Dillistone Group Plc Annual Report and Accounts 2014
1. Accounting policies continued
(ii) Standards, amendments and interpretations which are effective for reporting periods beginning after the date of 
these financial statements which have not been adopted early: 
Standard Description Effective date 
IFRS 9 Financial instruments 1 January 2015 
IFRS 15 Revenue from contracts with customers 1 January 2017
2. Reconciliation of adjusted operating profits to consolidated statement of comprehensive income 
Note
Adjusted 
operating 
profits 
2014
£’000
Acquisition 
related items 
2014*
£’000
2014
 £’000 
Adjusted 
operating 
profits 2013
£’000
Acquisition 
related items 
2013*
£’000
2013
 £’000 
Revenue 8,625 – 8,625 8,101 – 8,101
Cost of sales (1,108) – (1,108) (957) – (957)
Gross profit 7,517 – 7,517 7,144 – 7,144
Administrative expenses (5,697) (418) (6,115) (5,351) (210) (5,561)
Results from operating activities 1,820 (418) 1,402 1,793 (210) 1,583
Financial income 6 – 6 8 – 8
Financial cost (2) (101) (103) – (68) (68)
Profit before tax 1,824 (519) 1,305 1,801 (278) 1,523
Tax expense (240) 80 (160) (346) 54 (292)
Profit for the year 1,584 (439) 1,145 1,455 (224) 1,231
Other comprehensive income net  
of tax:
Currency translation differences (8) – (8) (16) – (16)
Total comprehensive income for the 
year net of tax 1,576 (439) 1,137 1,439 (224) 1,215
Earnings per share – from continuing 
activities
Basic 10 8.56p 6.18p 7.99p 6.76p
Diluted 10 8.23p 5.95p 7.70p 6.51p
* See accounts note 5.
 
Strategic Report
Governance
Financial Statements 36 
Dillistone Group Plc Annual Report and Accounts 2014
Notes to the Financial Statements continued
For the year ended 31 December 2014
3. Segment reporting
The Board principally monitors the Group’s operations in terms of results of the two divisions, Dillistone Systems and Voyager 
Software. Segment results reflect management charges made or received. Intercompany balances are excluded from segment 
assets and liabilities.
Divisional segments
For the year ended 31 December 2014
Dillistone
£’000
Voyager
£’000
Interdivisional 
revenue
£’000
Central
£’000
Total
£’000
Recurring income 3,186 2,743 – – 5,929
Non-recurring income 1,371 914 – – 2,285
Third party revenues – 411 – – 411
Segment revenue 4,557 4,068 – – 8,625
Segment EBITDA 1,597 802 3 2,402
Depreciation and amortisation expense (429) (153) – (582)
Segment result 1,168 649 3 1,820
Acquisition related amortisation – – (286) (286)
Acquisition related charges – – (132) (132)
Operating profit/(loss) 1,168 649 (415) 1,402
Financial income 5 1 – 6
Loan interest (2) (2)
Acquisition related interest expenses (101) (101)
Income tax expense (160)
Profit after tax 1,145
Additions of non-current assets 720 353 – 1,073
Segment assets 2,546 1,107 400 4,053
Intangibles and goodwill 2,003 884 6,845 9,732
Total 4,549 1,991 7,245 13,785
Segment liabilities 3,097 1,376 2,796 7,269
Financial Statements 37
Dillistone Group Plc Annual Report and Accounts 2014
3. Segment reporting continued
For the year ended 31 December 2013
Dillistone
£’000
Voyager
£’000
Interdivisional 
revenue 
£’000
Central
£’000
Total
£’000
Recurring income 3,248 2,023 – – 5,271
Non-recurring income 1,675 777 (24) – 2,428
Third party revenues – 402 – – 402
Segment revenue 4,923 3,202 (24) – 8,101
Segment EBITDA 2,013 598 (369) 2,242
Depreciation and amortisation expense (358) (91) – (449)
Segment result 1,655 507 (369) 1,793
Acquisition related amortisation – – (172) (172)
Acquisition related charges – – (38) (38)
Operating profit/(loss) 1,655 507 (579) 1,583
Financial income 7 1 – 8
Acquisition related interest expenses (68) (68)
Income tax expense (292)
Profit after tax 1,231
Additions of non-current assets 546 284 – 830
Segment assets 2,341 971 82 3,394
Intangibles and goodwill 1,870 691 5,017 7,578
Total 4,211 1,662 5,099 10,972
Segment liabilities 2,959 1,009 1,894 5,862
Products and services
The following table provides an analysis of the Group’s revenue by products and services:
Revenue
2014
£’000 
2013
 £’000 
Recurring income 5,929 5,271
Non-recurring income 2,285 2,428
Third party revenues 411 402
8,625 8,101
Recurring income includes all support services, SaaS and hosting income. Non-recurring income includes sales of new licences, and 
income derived from installing those licences including training, installation, and data translation. Third party revenues arise from 
the sale of third party software.
It is not possible to allocate assets and additions between recurring, non-recurring income and third party revenue. 
No customer represented more than 10% of revenue of the Group.
Strategic Report
Governance
Financial Statements 38 
Dillistone Group Plc Annual Report and Accounts 2014
Notes to the Financial Statements continued
For the year ended 31 December 2014
4. Geographical analysis
The following table provides an analysis of the Group’s revenue by geographic market.
The Board does not review the business from a geographical performance viewpoint and this analysis is provided for information 
only.
Revenue
2014
£’000 
2013
£’000 
UK 6,859 6,188
US 1,198 1,228
Australia 568 685
8,625 8,101
Non-current assets by geographical location
2014
 £’000 
2013
£’000 
UK 10,025 7,698
US 4 5
Australia 2 2
10,031 7,705
5. Acquisition related items
2014
 £’000 
2013
 £’000 
Included within administrative expenses:
Estimated change in fair value of contingent consideration (note 23) (9) (57)
Amortisation of acquisition intangibles 286 172
Fees relating to the acquisition of ISV/FCP (note 23) 141 95
418 210
Included within finance cost:
Unwinding of discount on contingent consideration (note 8) 101 68
519 278
6. Profits from operating activities
2014
 £’000 
2013
 £’000 
Profits from operating activities is stated after charging:
Depreciation 94 93
Amortisation 773 528
Loss on foreign exchange transactions 3 2
Operating lease rentals – land and buildings 207 176
Money purchase pension contributions 179 97
Fees receivable by the Group auditors:
Audit of financial statements 24 22
Other services:
Audit of accounts of subsidiary of the Company 50 43
Other services relating to taxation 61 34
All other services 45 33
    
Financial Statements 39
Dillistone Group Plc Annual Report and Accounts 2014
7. Employees
The average number of employees was:
2014 2013
Operations 96 87
Management 7 7
Employee numbers 103 94
 
Their aggregate remuneration comprised:
2014
 £’000 
2013
 £’000 
Wages and salaries 4,089 3,713
Social security costs 437 410
Pension costs 179 97
Share-based payments charged and share-based LTIP (33) 102
LTIP non share-based (40) 84
4,632 4,406
The aggregate remuneration includes salary cost and Directors’ remuneration totalling £792,000 (2013: £724,000) that have been 
capitalised in intangible assets. 
Key management of the Group are the Directors and the Divisional Directors of Voyager Software. Remuneration of key 
management was as follows:
2014
 £’000 
2013
 £’000 
Wages and salaries 662 699
Social security costs 74 83
Pension costs 51 36
Share-based payments charged and share-based LTIP (49) 80
LTIP non share-based (40) 84
698 982
Details of Directors’ emoluments, share options and pension entitlements are given in the Report to the Shareholders on Directors’ 
Remuneration on pages 16 to 17 .
8. Financial income
2014
 £’000 
2013
 £’000 
Interest receivable 6 8
Finance cost on bank loan (2) –
Unwinding of discount on contingent consideration (101) (68)
(97) (60)
Strategic Report
Governance
Financial Statements 40 
Dillistone Group Plc Annual Report and Accounts 2014
Notes to the Financial Statements continued
For the year ended 31 December 2014
9. Tax expense
2014
 £’000 
2013
 £’000 
Current tax 200 308
Deferred tax 40 38
Deferred tax re acquisition intangibles (80) (54)
Income tax expense for the year 160 292
Factors affecting the tax charge for the year
Profit before tax 1,305 1,523
UK rate of taxation 21.5% 23.25%
Profit before tax multiplied by the UK rate of taxation 281 354
Effects of:
Overseas tax rates 84 49
Impact of deferred tax not provided – (15)
Enhanced R&D relief (99) (112)
Disallowed expenses 75 103
Rate change impact on deferred tax (37) (27)
Prior year adjustments (144) (60)
Tax expense 160 292
Deferred tax provided in the financial statements is as follows:
Group Company
2014
 £’000 
Movement
£’000
2013
 £’000 
2014
 £’000 
2013
 £’000 
Accelerated intangible amortisation 473 40 433 – –
Provisions (7) 2 (9) – –
Acquisition intangibles 686 209 477 – –
1,152 251 901 – –
The UK corporation tax rate in the year fell from 23% to 21 % giving an effective rate for the year of 21.5%. The tax rate is expected 
to fall again to 20% in April 2015. Where deferred tax is provided in relation to the UK it has been provided at 20%. The tax charge 
is impacted by the higher rates of corporation tax payable in the US and Australia partially offset by the R&D tax credits available to 
both Dillistone Systems, Voyager Software, FCP and ISV. The release of prior year provisions relate in part to the agreement of the 
prior years’ tax position of the branch operation in German. The Group has gross tax losses and temporary timing differences of 
£292,000 (2013: £227 ,000) for which no deferred tax asset has been recognised.
10. Earnings per share
2014
Using adjusted 
operating profit 2014
2013
Using adjusted 
operating profit 2013
Profit attributable to ordinary shareholders £1,584,000 £1,145,000 £1,455,000 £1,231,000
Weighted average number of shares 18,512,594 18,512,594 18,211,321 18,211,321
Basic earnings per share 8.56 pence 6.18 pence 7.99 pence 6.76 pence
Weighted average number of shares after dilution 19,243,357 19,243,357 18,902,055 18,902,055
Fully diluted earnings per share 8.23 pence 5.95 pence 7.70 pence 6.51 pence
Reconciliation of basic to diluted average number of shares 2014 2013
Weighted average number of shares (basic) 18,512,594 18,211,321
Effect of dilutive potential ordinary shares – employee share plans 730,763 690,734
Weighted average number of shares after dilution 19,243,357 18,902,055
Financial Statements 41
Dillistone Group Plc Annual Report and Accounts 2014
11. Profit for the financial year
As permitted by section 408 of the Companies Act 2006, the parent company’s profit and loss account has not been included in 
these financial statements. The profit for the financial year for the parent company was £896,000 (2013: £715,000).
 
12. Goodwill
Group
Goodwill
£’000
Cost
At 1 January 2013 2,490
Additions 255
At 31 December 2013 2,745
Additions 670
At 31 December 2014 3,415
Carrying amount
At 31 December 2014 3,415
At 31 December 2013 2,745
 
At the year end date an impairment test has been undertaken by comparing the carrying values of goodwill with the recoverable 
amount of the cash generating unit (CGU) to which the goodwill has been allocated. The recoverable amount of the cash 
generating unit is based on value-in-use calculations. These calculations use cash flow projections covering a three year period 
based on financial budgets and a calculation of the terminal value, for the period following these formal projections.
The key assumptions used for value-in-use calculations are those regarding growth rates, increases in costs and discount rates.  
The discount rate is reviewed annually to take into account the current market assessment of the time value of money and the  
risks specific to the cash generating units and rates used by comparable companies. The pre-tax discount rate used to calculate 
value-in-use is in a range of 12% to 19.4% (2013: 12%) and for Voyager consolidated a rate of 19.4% has been used. Growth rates 
for forecasts take into account historic experience and current market trends. Costs are reviewed and increased for inflation and 
other cost pressures. The long term growth rate used for the terminal value calculation is 2% (2013: 2%) for all CGUs. The allocation 
of goodwill across the CGUs is as follows:
Opening
£’000
Addition
£’000
Impairment
£’000
Closing
£’000
Dillistone UKMEA 290 – – 290
Dillistone Europe 110 – – 110
Dillistone Australia 40 – – 40
Dillistone US 54 – – 54
Voyager consolidated 1,996 – – 1,996
FCP 255 – – 255
ISV – 670 – 670
2,745 670 – 3,415
Sensitivities
To reduce the headroom in the impairment calculation to £nil for the Voyager consolidation, goodwill would require a reduction of 
terminal growth rate to 0% and an increase in the discount rate to 36%. Alternatively, cash flows would need to fall by 55%. For FCP , 
cash flows would need to reduce by over 90% to reduce the headroom to £nil. For ISV cash flows would need to fall by 70% to 
reduce the headroom to £nil. No meaningful sensitivity for the Dillistone goodwill reduces the headroom to £nil. 
Strategic Report
Governance
Financial Statements 42 
Dillistone Group Plc Annual Report and Accounts 2014
Notes to the Financial Statements continued
For the year ended 31 December 2014
13. Other intangible assets
Group
Development 
costs
£’000
Acquisition 
intangibles
£’000
Total
£’000
Cost
At 1 January 2013 3,053 1,178 4,231
Additions through acquisition at fair value 15 1,551 1,566
Additions 747 – 747
At 31 December 2013 3,815 2,729 6,544
Additions through acquisition at fair value – 1,443 1,443
Additions 814 – 814
At 31 December 2014 4,629 4,172 8,801
Amortisation
At 1 January 2013 899 284 1,183
Charge for the year 356 172 528
At 31 December 2013 1,255 456 1,711
Charge for the year 487 286 773
At 31 December 2014 1,742 742 2,484
Carrying amount
At 31 December 2014 2,887 3,430 6,317
At 31 December 2013 2,560 2,273 4,833
Acquisition intangibles can be summarised as follows:
Brand
£’000
Developed 
technology
£’000
Brand and IP
£’000
Contractual 
and non-
contractual 
relationship
£’000
Total
£’000
Cost
At 1 January 2014 165 388 – 1,720 2,273
Additions – – 614 829 1,443
Amortisation (13) (53) (10) (210) (286)
At 31 December 2014 152 335 604 2,339 3,430
Intangible assets under development are reviewed each reporting period for impairment prior to amortisation. Forecasts of future 
revenue are prepared and these are discounted and compared to the carrying value. Sensitivities are carried out including applying 
differing growth and attrition rates as well as alternative discounts rates.
Financial Statements 43
Dillistone Group Plc Annual Report and Accounts 2014
14. Property, plant and equipment
Group
Land and 
buildings
£’000
Office & 
computer 
equipment
£’000
Fixtures and 
fittings
£’000
Motor 
Vehicles
£’000
Total
£’000
Cost
At 1 January 2013 166 545 130 – 841
Currency impact – (5) – – (5)
Additions – 77 6 – 83
Additions by acquisition – 11 3 – 14
Disposals – (25) – – (25)
At 31 December 2013 166 603 139 – 908
Currency impact – 2 2 – 4
Additions 185 66 8 – 259
Additions by acquisition – 4 1 2 7
Disposals (166) – – – (166)
At 31 December 2014 185 675 150 2 1,012
Depreciation
At 1 January 2013 164 440 113 – 717
Currency impact – (4) – – (4)
Charge for the year 1 73 19 – 93
Eliminated on disposal – (25) – – (25)
At 31 December 2013 165 484 132 – 781
Currency impact – 2 2 – 4
Charge for year 7 83 3 1 94
Eliminated on disposal (166) – – – (166)
At 31 December 2014 6 569 137 1 713
Carrying amount
At 31 December 2014 179 106 13 1 299
At 31 December 2013 1 119 7 – 127
15. Non-current asset investments
Company
Investments 
in subsidiaries 
£’000
Cost
At 1 January 2013 4,111
Additions 1,564
At 31 December 2013 5,675
Additions 1,924
At 31 December 2014 7,599
Strategic Report
Governance
Financial Statements 44 
Dillistone Group Plc Annual Report and Accounts 2014
Notes to the Financial Statements continued
For the year ended 31 December 2014
15. Non-current asset investments continued
The Company has the following subsidiary undertakings:
Name Principal activity
Holding of 
ordinary shares Registered
Dillistone Systems Limited Sale of computer software and  
related support services 100% England & Wales
Dillistone Systems (Australia) Pty Limited Sale of computer software and  
related support services 
100%  
(indirect) Australia
Dillistone Systems (US) Inc Sale of computer software and  
related support services 100% USA
FCP Internet Limited Provision of software services and  
related consultancy services 100% England & Wales
FCP Internet Holdings Limited Intermediate holding company 100% England & Wales
ISV Software Limited Provision of software services and  
related consultancy services 100% England & Wales
Woodcote Software Limited Dormant company 100% England & Wales
Voyager Software Limited Sale of computer software and  
related support services 100% England & Wales
Voyager Software (Australia) Pty Limited Sale of computer software and  
related support services
100%  
(indirect) Australia
16. Inventories
Group Company
2014
£’000
2013
£’000
2014
£’000
2013
£’000
Licences for resale 41 78 –  – 
17. Trade and other receivables
Group Company
2014
£’000
2013
£’000
2014
£’000
2013
£’000
Trade and other receivables 1,531 1,565 – –
Group receivables – – 318 354
Other current assets 47 61 – 7
Prepayments and accrued income 206 164 13 4
1,784 1,790 331 365
    
The carrying value of trade receivables is considered a reasonable approximation of fair value. All of the receivables have been 
reviewed for indicators of impairment. The movement in the provision is shown below:
2014
£’000
2013
£’000
At start of year 90 83
Movement in the year (27) 7
At the year end 63 90
Financial Statements 45
Dillistone Group Plc Annual Report and Accounts 2014
17. Trade and other receivables continued
The ageing profile of trade receivables as at the year end is as follows: 
2014
£’000
2013
£’000
Current 1,317 1,272
Past due date:
31-60 days overdue 88 121
More than 60 days overdue 126 172
Total 1,531 1,565
18. Trade and other payables
Group Company
2014
£’000
2013
£’000
2014
£’000
2013
£’000
Current liabilities
Trade and other payables 594 612 42 53
Group payables – – 1,971 1,623
Deferred income 2,711 2,475 – –
Accruals 857 660 397 345
Contingent consideration 507 566 507 566
4,669 4,313 2,917 2,587
Non-current liabilities
Contingent consideration 666 352 666 352
Cash settled share-based provision – 107 – 107
666 459 666 459
Contingent consideration is valued at fair value. The total amounts included are as follows: 
 
Group Company
2014
£’000
2013
£’000
2014
£’000
2013
£’000
In current liabilities 507 566 507 566
In non-current liabilities 666 352 666 352
1,173 918 1,173 918
Further details of the contingent consideration are given in note 23.
Strategic Report
Governance
Financial Statements 46 
Dillistone Group Plc Annual Report and Accounts 2014
Notes to the Financial Statements continued
For the year ended 31 December 2014
19. Borrowings
Group Company
Borrowings at amortised cost
2014
£’000
2013
£’000
2014
£’000
2013
£’000
Current bank borrowings 162 – 162 –
Non current bank borrowings 325 – 325 –
Total bank borrowings 487 – 487 –
The Directors consider that the fair value of borrowings approximates to the carrying value.
The borrowings consist of a bank loan repayable over 3 years from HSBC Bank plc secured by a fixed and floating charge over the 
assets of the Group and is supported by a cross guarantee between the Company and the Group’s principal subsidiaries. The loan 
was to provide part funding for the acquisition of ISV. The loan carries interest at 2.75% over UK base rate. 
The loan includes an option for early repayment at any time during the 3 year period. An early repayment fee of 1 % of the amount 
prepaid must be made if the option is exercised. Management have review the term of the prepayment option and deem it to be 
closely related to the underlying debt instrument and hence has not been separated from the host instrument.
The carrying amount of the bank borrowings is considered to be a reasonable approximation of the fair value of the debt.
20. Share capital
2014
£’000
2013
£’000
Allotted, called up and fully paid
Ordinary shares of 5 pence each 969 914
On 29 September 2014 526,316 new ordinary shares of 5p were placed at a price of 95p raising £500,000 (before expenses). These 
monies were raised to finance the acquisition of ISV.
On 3 October 2014 a further £250,000 was raised from the placing of 263,158 shares at 95p and additional £250,000 raised by a 
similar placing on 7 November 2014. 
Share options totalling 59,794 were exercised by employees in the period at an exercise price of 77p.
In November 2013, WH Ireland, the Company’s nomad and broker, exercised a warrant over 69,930 shares at a price of 71.5p. 
2014 2013
Shares issued and fully paid
Beginning of the year 18,275,120 18,205,190
Shares issued on placing 1,052,632 –
Shares issued on exercise of options 59,794 69,930
Shares issued and fully paid 19,387,546 18,275,120
 
21. Operating lease arrangements
The Group leases offices under non-cancellable operating lease agreements.
At 31 December 2014, the Group had future total commitments under non-cancellable operating leases as follows:
2014
£’000
2013
£’000
Commitments payable: 682 202
Within one year 229 154
Between two and five years 453 48
Financial Statements 47
Dillistone Group Plc Annual Report and Accounts 2014
22. Share options
Share-based payments
There are two share option schemes in operation: an Enterprise Management Incentive Scheme (the ‘EMI Scheme’) which complies 
with the requirements of HMRC and a scheme which has not been approved by HMRC (the ‘Unapproved Scheme’). The terms and 
conditions of both schemes are the same. If the options remain unexercised after a period of 10 years from the date of grant, the 
options expire. Options are normally forfeited if the employee leaves the Company before the options become available to exercise, 
which would normally be three years after grant. Performance conditions are associated with the options granted on 29 May 2012.
There was one grant of options in 2014. The weighted average share price of all grants in 2014 was 97p. The fair values of the 
services received in exchange for share-based payments were calculated using a Black-Scholes pricing model. The inputs into the 
model were as follows:
Date of grant
Number 
granted
Share price on 
issue date
Exercise 
price
Expected 
volatility
Vesting 
period
Leaver rate 
over vesting 
period
Risk-free 
rate
Expected 
dividend 
yield
8 December 2014 245,000 97.00p 97.00p 30% 3.3 years 10% 1.00% 4.0%
Expected volatility takes into account historic volatility of the share price and its current trend.
During 2013 the Group made two grants of options. The fair values of the services received in exchange for share-based payments 
were calculated using a Black-Scholes pricing model.
The inputs into the model were as follows:
Date of grant
Number 
granted
Share price on 
issue date Exercise price
Expected 
volatility
Vesting 
period
Leaver rate 
over vesting 
period
Risk-free 
rate
Expected 
dividend 
yield
8 July 2013 38,000 79.50p 79.50p 30% 3.3 years 18% 0.86% 3.0%
25 November 2013 20,000 115.00p 115.00p 30% 3.0 years 0% 0.86% 3.0%
Details of the number of share options and the weighted average exercise price (WAEP) outstanding during the year are as follows:
2014 2013
No of 
options* WAEP*
No of 
options* WAEP*
Outstanding at beginning of year 754,355 74.74 743,355 74.09
Granted during year 245,000 97.00 58,000 91.74
Exercised during year (59,794) 77.00 – –
Forfeited during year (9,000) 78.94 (47,000) 85.49
Outstanding at the end of the year 930,561 80.41 754,355 74.74
Exercisable at the year end 413,739 72.95 62,739 59.20
* Adjusted for the 2 for 1 bonus issue where appropriate.
In the year Julie Pomeroy exercised 25,794 options at an exercise price of 77p. The market value of the shares at the date of  
exercise was 95p. The Company’s mid-market share price on 31 December 2014 was 97 .0p. The Company’s mid-market share price 
on 31 December 2014 was 97 .0p.
The fair value of all options granted is shown as an employee expense with a corresponding increase in equity. The employee 
expense is recognised equally over the time from grant until vesting of the option. The expense charged takes into account the 
likelihood of performance targets being met. The employee expense for the year was £13,000 (2013: £53,000). The reduction in 
charge reflects the current expectation that share options with performance conditions will not fully vest. 
Strategic Report
Governance
Financial Statements 48 
Dillistone Group Plc Annual Report and Accounts 2014
Notes to the Financial Statements continued
For the year ended 31 December 2014
22. Share options continued
Share options remaining in the schemes are as follows:
Scheme type Date of grant Exercise from Lapse date
Options 
remaining
Exercise price 
(p)
Unapproved 03/05/2006 03/05/2009 02/05/2016 26,739 5.38 
EMI 14/09/2007 14/09/2010 13/09/2017 36,000 99.17 
Unapproved 14/01/2011 14/01/2014 13/01/2021 30,000 58.33 
EMI 21/09/2011 21/09/2014 20/09/2021 303,000 77.00 
Unapproved 21/09/2011 21/09/2014 20/09/2021 18,000 77.00 
EMI 29/05/2012 29/05/2015 28/05/2022 220,822 73.00 
EMI 08/07/2013 08/07/2016 07/07/2023 31,000 79.50
EMI 25/11/2013 25/11/2016 24/11/2023 20,000 115.00
Unapproved 08/12/2014 08/12/2017 08/12/2024 10,000 97.00
EMI 08/12/2014 08/12/2017 08/12/2024 235,000 97.00
930,561
59,794 share options were exercised during the year at a weighted average exercise price of 77 .0p and the weighted average  
share price at the date of exercise was 95.8p. The weighted average remaining contractual life of options at 31 December 2014  
was 7 .5 years (2013: 8.5 years). 
Cash settled options
During 2011 the Board introduced a long term incentive scheme for Directors. The scheme granted phantom options to the 
participants and these options are cash settled on the vesting date, which will be the date of the publication of the appropriate 
Annual Report. The amount payable will be the increase in share price between the date of grant and vesting multiplied by the 
number of phantom options granted multiplied by the performance factor. The performance factor is based on the percentage  
rise in the earnings per share over the period. 
The fair values of the services received in exchange for cash based option payments were calculated using a Black-Scholes pricing 
model at 31 December 2014 and adjusted for the probability of the performance conditions being obtained. 
The inputs into the model were as follows
Date of grant
Number
granted*
Share price on
issue date*
Exercise
 price *
Expected 
volatility
Remaining 
period to 
vesting 
Leaver rate 
over vesting 
period
Risk-free 
rate
Expected 
dividend yield
29 May 2012 384,932 73p 73p 60% 0.33 years 0% 0.4% 4.00%
* Adjusted for the 2 for 1 bonus issue.
The phantom options granted in 2011 pursuant to the Company’s 2011 long term incentive plan (LTIP) with exercise conditions 
linked to share price growth and growth in earnings per share over a three year period (measured by taking the earnings per share  
in the 2013 statutory accounts compared to the earnings per share in the 2010 statutory accounts). As a result of rise in the 
Company’s share price which meant that the awards could exceed one third of salary, the Executive Directors waived their right to 
the excess and the LTIP awards were amended so that the awards took the form of a cash bonus with a maximum pay-out, if all 
exercise conditions were met in full, of one third of annual salary (as at the date of award) but with no link to share price. 
Performance conditions remain in place. £135,000 was paid out in respect of these Awards in 2014.
Awards from 2013 onwards under a long term incentive plan take the form of a cash bonus of up to one third annual salary with 
appropriate performance conditions in place and are not share-based.
The total release charged in respect of all LTIP plans for the year was £(86,000) (2013: charge £133,000). In addition £135,000 of 
the 2011 LTIP plan was paid out in the year and this payment has been set against salaries & wages and social security. There is a 
release of £46,000 in respect of the LTIP schemes which are share-based and require separate disclosure under IFRS 2. The total 
liability carried forward was £32,000 (2013: £252,000) and is included in current liabilities.
Financial Statements 49
Dillistone Group Plc Annual Report and Accounts 2014
23. Acquisitions
On 29 September 2014 the Group signed an agreement to acquire the entire share capital of ISV Software Limited (‘ISV’) for an 
estimated consideration before fees of £1.924m, which was satisfied as detailed below. This was part of the Group’s strategy to 
broaden our offering to the recruitment sector. The acquisition was completed on 3 October 2015. 
ISV (www.isvgroup.com) is a UK based supplier of training and testing services, primarily to the recruitment industry. ISV works  
with 9 of the 10 largest recruitment agencies in the UK (by office numbers) and 7 of the 10 largest by revenue. It offers over 200 
published materials/tests covering many business sectors and over 500,000 tests were carried out in 2014 for over 350 clients. 
For the year ended 31 December 2013 the unaudited accounts of ISV showed profit before tax and profit after tax of £162,000  
and £159,000 respectively on revenues of £750,000. These accounts also showed net assets of £256,000 as at 31 December 2013. 
Following the acquisition the revenues and profits have been restated to reflect accounting for deferred income on annual contracts 
and the income in respect of token sales. ISV forms part of the Voyager Software division.
The details of the business combination are as follows:
Book value
£’000
Fair value 
adjustments
£’000
Fair value 
intangibles 
adjustments
£’000
Fair 
value
£’000
Assets
Non-current assets
Property, plant and equipment 14 (7) – 7 
Intangible assets – – 1,443 1,443
Current assets
Trade and other receivables 105 (10) – 95 
Cash and cash equivalents 345 – – 345
Total assets 464 (17) 1,443 1,890
Liabilities
Trade and other payables (303) (38) – (341) 
Tax liability – (7) – (7)
Deferred tax liability – – (289) (289)
Net assets acquired 161 (62) 1,154 1,253
Goodwill 671 
1,924 
Satisfied by
Initial Cash consideration 850 
Deferred cash consideration (discounted) 148
Cash consideration in relation to surplus working capital 213
Contingent consideration 713
1,924
 
£’000
Consideration transferred
Amount settled in cash consideration in period 1,063 
Cash and cash equivalents acquired (345)
Net cash outflow on acquisition 718
Acquisition costs charged to expenses 141
Net cash paid relating to acquisition 859
Strategic Report
Governance
Financial Statements 50 
Dillistone Group Plc Annual Report and Accounts 2014
Notes to the Financial Statements continued
For the year ended 31 December 2014
23. Acquisitions continued
The total consideration of £1,924,000 net of cash acquired of £345,000 was £1,579,000. The fair value adjustment of £62,000 
relates mainly to the writing down of property, plant and equipment to their fair value and adopting more closely the accounting 
policies adopted by the Group. Fees of £141,000 were expensed and included in acquisition related costs. In addition, following a 
detailed review of the fair value of assets and liabilities acquired, in accordance with IFRS 3 Business Combinations the Group has 
recognised two intangible assets totalling £1,443,000 made up as follows:
£’000
Estimated
 life
Intangible assets
Brand/IP 614 15 years
Customer relationships 829 10 years
1,443
Goodwill of £671,000 represents the excess of the purchase price over the fair value of the net tangible and intangible assets 
acquired. The goodwill arising on the acquisition consists largely of the workforce value, synergies and economies of scale expected 
from combining the operations with Dillistone Group companies.
From the date of acquisition to 31 December 2014, the acquired companies contributed £195,000 to revenue and £18,000 to profit 
before taxation. In the last financial year, being the year ended 31 December 2013, the acquired companies made a profit before 
taxation of £162,000. However, as no audited accounts had previously been required and changes in the accounting policies 
including those for deferred income on annual contracts and token sales, pro-forma profit or loss of the combined entity for the 
complete 2014 reporting period cannot readily be determined.
As part of the acquisition, deferred consideration of £150,000 is payable in January 2015. The Group also agreed to pay additional 
consideration based on surplus working capital retained in the business at completion. Following a completion accounts verification 
process, an amount of £213,000 was agreed to be paid to the vendors and this was paid in the year. In addition, the vendors are 
entitled to contingent consideration as follows:
• 30% of net revenues in the three month period to 31 December 2014. 
• 30% of net revenues in the year to 31 December 2015 less £15,000.
• 30% of net revenues in the year to 31 December 2016 less £15,000.
• 30% of net revenues in the nine month period to 30 September 2017 less £25,000. 
The fair value of the contingent consideration has been calculated based on the information available at the time of the acquisition. 
The contingent consideration as at acquisition has been discounted at an annual rate of 3.48% with a resulting charge in the 2014 
accounts of £6,000. The value of the contingent consideration at 31 December 2014 was £713,000. The maximum total 
consideration, including contingent consideration, payable is capped at £2,500,000.
Contingent consideration payable in respect of earlier acquisitions
As part of the acquisition of Voyager Software in 2011, the Group agreed to pay additional contingent consideration. During 2014  
it made the final payment due of £129,000. A £2,000 discount was charged in 2014.
As part of the acquisition of FCP , the Group agreed to pay the vendors contingent consideration over the period to 31 March 2015. 
During 2014, contingent consideration of £421,000 was paid. At the year end the Group had a liability for contingent consideration 
calculated as follows:
• Up to 50% of recurring revenues in the nine month period to 31 December 2014. The percentage varies depending on the level 
of recurring revenues.
• Up to 50% of recurring revenues in the three month period to 31 March 2015. The percentage varies depending on the level of 
recurring revenues.
In the 2014 accounts, the amounts payable under the contingent consideration have been reduced by £9,000 based on the 
revenues for 2014 and on the estimated revenue for 2015. This contingent consideration had originally been discounted at 16.99% 
but following the acquisition of ISV and the availability of bank finance the rate has been reduced to 3.48%. The discount charged 
to the profit and loss account in 2014 totalled £93,000.
Financial Statements 51
Dillistone Group Plc Annual Report and Accounts 2014
24. Financial instruments
The Group uses various financial instruments; these include cash, bank deposits, bank loans and various items such as trade 
receivables and trade payables that arise directly from its operations. The main purpose of these financial instruments is to provide 
finance for the Group’s operations.
The Group’s finance department maintains liquidity, manages relations with the Group’s bankers, identifies and manages foreign 
exchange risk and controls Group treasury operations. Treasury dealings such as investments and foreign exchange are conducted 
only to support underlying business transactions. Consequently, the Group does not undertake speculative foreign exchange 
dealings for which there is no underlying exposure.
The Group’s policies for management of the financial risks to which it is exposed are outlined below.
(i) Interest rate risk
The Group is exposed to interest rate risk on its floating rate borrowings and its financial assets. The interest rate profile of the 
Group’s financial assets at 31 December 2014 was: 
Group Company
At 31 December 2014
Non interest 
bearing 
financial 
assets 
£’000
Floating rate 
financial 
assets
£’000
Non interest 
bearing 
financial 
assets
£’000
Floating rate 
financial 
assets
£’000
Trade and other receivables (current assets) 1,531 – 318 –
Cash and cash equivalents – 1,929 – 387
Total 1,531 1,929 318 387
The interest rate profile of the Group’s financial assets at 31 December 2013 was: 
Group Company
At 31 December 2013
Non interest 
bearing 
financial 
assets
£’000
Floating rate 
financial 
assets
£’000
Non interest 
bearing 
financial 
assets
£’000
Floating rate 
financial 
assets
£’000
Trade and other receivables (current assets) 1,565 – 354 –
Cash and cash equivalents – 1,399 – 78
Total 1,565 1,399 354 78
Strategic Report
Governance
Financial Statements 52 
Dillistone Group Plc Annual Report and Accounts 2014
Notes to the Financial Statements continued
For the year ended 31 December 2014
24. Financial instruments continued
The table below shows the Group’s financial liabilities split by those bearing interest at floating rates and those that are non  
interest bearing.
Group Company
31 December 2014
Non interest 
bearing 
financial 
liabilities
£’000
Floating rate 
financial 
liabilities
£’000
Non interest 
bearing 
financial 
liabilities
£’000
Floating rate 
financial 
liabilities
£’000
Trade and other payables (current liabilities) 4,162 – 2,410 –
Trade and other payables (non-current liabilities) – – – –
Bank borrowings – 487 – 487
Contingent consideration (current liabilities) 507 – 507 –
Contingent consideration (non-current liabilities) 666 – 666 –
5,335 487 3,583 487
31 December 2013
Non interest 
bearing 
financial 
liabilities
£’000
Floating rate 
financial 
liabilities
£’000
Non interest 
bearing 
financial 
liabilities
£’000
Floating rate 
financial 
liabilities
£’000
Trade and other payables (current liabilities) 3,747 – 2,021 –
Trade and other payables (non-current liabilities) 107 – 107 –
Bank borrowings – – – –
Contingent consideration (current liabilities) 566 – 566 –
Contingent consideration (non-current liabilities) 352 – 352 –
4,772 – 3,046 –
The benchmarks for interest rates on floating rate financial assets and financial liabilities are bank base rates for the currencies in 
which the assets are held. Sensitivities of movements in interest rates have been considered by Directors and reasonably possible 
movements in interest rates are not considered to have a material impact on future Group profits or equity.
(ii) Credit risk
The Group’s principal financial assets are cash and cash equivalents and trade and other receivables.
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual 
obligations and arises principally from the Group’s receivables from customers and monies on deposit with financial institutions.
Historically, the cash collection profile has been very good. Debt aging and collections are monitored on a regular basis and for  
new customers deposits are usually required. Some of the unimpaired trade receivables are past due as at the reporting date. 
Information on financial assets past due but not impaired are included in note 17 .
The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit 
rating agencies. 
The Group has no significant concentration of credit risk.
The Group’s maximum exposure to credit risk at the reporting date is represented by the carrying value of financial assets, as follows:
Group Company
2014
£’000
2013
£’000
2014
£’000
2013
£’000
Trade and other receivables (current assets) 1,531 1,565 318 354
Cash and cash equivalents 1,929 1,399 387 78
Total 3,460 2,964 705 432
Financial Statements 53
Dillistone Group Plc Annual Report and Accounts 2014
24. Financial instruments continued
(iii) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to 
managing liquidity is to ensure it has sufficient liquidity to meet its liabilities when due.
As at 31 December 2014, the Group and Company’s financial liabilities (being trade and other payables and deferred income, 
payroll taxes, VAT or similar taxes and bank borrowings) have contractual cash flows as summarised below:
Group
31 December 2014
Carrying 
amount
£’000
< 1 year 
£’000
1–2 years
£’000
2–5 years
£’000
Trade and other payables (current liabilities) 4,669 4,669 – –
Trade and other payables (non-current liabilities) 666 – 245 421
Bank borrowings 487 162 167 158
5,822 4,831 412 579
31 December 2013
Carrying 
amount
£’000
< 1 year 
£’000
1–2 years
£’000
2–5 years
£’000
Trade and other payables (current liabilities) 4,313 4,313 – –
Trade and other payables (non-current liabilities) 459 – 424 35
4,772 4,313 424 35
Company
31 December 2014
Carrying 
amount
£’000
< 1 year 
£’000
1–2 years
£’000
2–5 years
£’000
Trade and other payables (current liabilities) 2,917 2,917 – –
Trade and other payables (non-current liabilities) 666 – 245 421
Bank borrowings 487 162 167 158
4,070 3,079 412 579
 
31 December 2013
Carrying 
amount
£’000
< 1 year 
£’000
1–2 years
£’000
2–5 years
£’000
Trade and other payables (current liabilities) 2,587 2,587 – –
Trade and other payables (non-current liabilities) 459 – 424 35
3,046 2,587 424 35
The Group would normally expect that sufficient cash is generated in the operating cycle to meet contractual cash flows as 
disclosed above. In addition the Group has significant cash balances as at the year end to minimise any liquidity risk. 
(iv) Foreign currency risk
The Group is exposed to foreign currency risk on sales and purchases which are denominated in a currency other than Sterling. 
Exposures to currency exchange rates are primarily denominated in US Dollars ($), Australian Dollars (AUD) and Euros (€). The 
Group does not use derivatives to hedge translation exposures arising on the consolidation of its overseas operations.
Strategic Report
Governance
Financial Statements 54 
Dillistone Group Plc Annual Report and Accounts 2014
Notes to the Financial Statements continued
For the year ended 31 December 2014
24. Financial instruments continued
At the year end, the Group had assets totalling £551,000 and liabilities totalling £356,000 denominated in Euros (2013: assets 
totalling £1,322,000 and liabilities totalling £518,000), assets totalling £1,537 ,000 and liabilities totalling £1,181,000 denominated in 
US Dollars (2013: assets totalling £602,000 and liabilities totalling £573,000) and assets totalling £370,000 and liabilities totalling 
£319,000 denominated in Australian Dollars (2013: assets totalling £353,000 and liabilities totalling £259,000). If each of the 
exchange rates weakened by 5%, the impact on the income statement would as follows:
Group
2014
£’000
2013
£’000
Euros 5 2
US Dollars 14 14
Australian Dollars 4 9
23 25
At the year end, the Company had liabilities totalling £99,000 denominated in Euros (2013: liabilities totalling £183,000), assets 
totalling £124,000 denominated in US Dollars (2013: assets totalling £225,000) and assets totalling £61,000 denominated in 
Australian Dollars (2013: assets totalling £22,000). 
Capital risk management
The Group’s objectives when managing capital are to safeguard the entity’s ability to continue as a going concern, so that it can 
continue to provide returns for shareholders and benefits for other stakeholders.
The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it in 
the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the 
capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new 
shares, sell assets or take on bank debt. The decision to take on some element of debt gives the Group additional flexibility in its 
capital structure and enables it to lower its cost of capital. 
The Group considers its capital to include share capital, share premium, merger reserve, translation reserve, share option reserve and 
retained earnings. Net cash comprises borrowings less cash and cash equivalents.
Note
2014
£’000
2013
£’000
Total borrowings 19 487 –
Less cash or cash equivalents (1,929) (1,399)
Net cash (1,442) (1,399)
Total equity 6,516 5,110
Total capital gearing ratio 0% 0%
Financial Statements 55
Dillistone Group Plc Annual Report and Accounts 2014
24. Financial instruments continued
Summary of financial assets and liabilities by category
The carrying amounts of the financial assets and liabilities as recognised at the statement of financial position date of the years 
under review may also be categorised as follows:
Group Company
2014
£’000s
2013
£’000s
2014
£’000s
2013
£’000s
Loans and receivables
Cash and cash equivalents 1,929 1,399 387 78 
Trade and other receivables 1,531 1,565 318 361 
3,460 2,964 705 439 
Financial liabilities held at amortised cost
Trade and other payables 4,162 3,854 2,410 2,128
Borrowings 487 – 487 –
Financial liabilities held at fair value
Contingent consideration 1,173 918 1,173 918
5,822 4,772 4,070 3,046
25. Fair value measurement of financial instruments 
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three Levels of 
a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement, as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or 
indirectly.
• Level 3: unobservable inputs for the asset or liability.
The following table shows the Levels within the hierarchy of financial assets and liabilities measured at fair value on a recurring basis 
at 31 December 2014 and 31 December 2013:
2014
£’000
Level 3
2013
£’000
Level 3
Contingent consideration 1,173 918
The Group’s finance team performs valuations of financial items for financial reporting purposes, including Level 3 fair values,  
in consultation with third party valuation specialists for complex valuations. Valuation techniques are selected based on the 
characteristics of each instrument, with the overall objective of maximising the use of market-based information. The finance  
team reports directly to the Group Finance Director and to the Audit Committee. The valuation techniques used for instruments 
categorised in Level 3 are described below:
Contingent consideration (Level 3) 
The fair value of contingent consideration relates to the acquisitions of FCP Internet and ISV Software (see note 23) and is 
estimated using a present value technique. The contingent consideration of £1,173,000 is included at fair value which is mainly 
based on actual, budget or forecast revenues prepared by the finance team. The contingent consideration is discounted.
The discount rate used to discount the contingent consideration at 31 December 2014 is 3.48% and is based on an after tax 
estimated of the Group’s current borrowing rate.  
The reconciliation of the carrying amounts of financial instruments classified within Level 3 is as follows:
2014
£’000
2013
£’000
At start of year (918) (360)
Acquired through business combination (713) (733)
Paid in year 550 185
Movement in fair value recognised in profit or loss under finance costs (101) (68)
Movement in fair value recognised in profit or loss under admin costs 9 58
At the year end (1,173) (918)
Strategic Report
Governance
Financial Statements 56 
Dillistone Group Plc Annual Report and Accounts 2014
Notes to the Financial Statements continued
For the year ended 31 December 2014
26. Control
No individual shareholder, or shareholders acting in concert, hold more than 50% of voting shares, and accordingly there is not 
considered to be an ‘ultimate controlling party’.
27. Related party transactions
Group
The Directors received dividends paid by the Company of £313,000 (2013: £318,000).
In the year Julie Pomeroy exercised 25,794 options at an exercise price of 77p. The market value of the shares at the date of exercise 
was 95p.
During the year, Mike Love bought 252,632 shares at a price of 95p. In addition, Jason Starr also bought 10,000 shares at the  
same price.
Company
The Company has a related party relationship with its subsidiaries, its Directors, and other employees of the Company with 
management responsibility.
During the year the Company received a management charge of £96,000 (2013: £62,000) and a dividend of £111,000 from its 
subsidiary company Dillistone Systems (US) Inc (2013: £210,000). At the year end Dillistone Systems (US) Inc owed £122,000  
(2013: owed by £209,000) to the Company.
During the current year Dillistone Systems Limited paid a dividend of £1,000,000 (2013: £1,000,000) to Dillistone Group Plc  
and a management charge of £237 ,000 (2013: £178,000). At the year end Dillistone Systems Limited was owed £1,294,000  
(2013: £1,588,000).
The Company received a management charge during the year from Dillistone Systems (Australia) Pty Limited of £34,000 (2013: 
£55,000) and at the year end was owed £62,000 (2013: owed by the Company £28,000).
Voyager Software paid a management charge of £144,000 (2013: £144,000) and owed the Company £115,000 at the year end 
(2013: £29,000). Woodcote Software owed the Company £13,000 at the year end (2013: £13,000).
FCP Internet Limited paid a management charge of £71,000 and was owed by the Company £365,000 at the year end (2013: owed 
to the Company £67 ,000).
A management charge of £15,000 was received from ISV Software and at the year end the Company owed ISV £200,000  
(2013: nil). 
Management charges payable by Group members to Dillistone Group Plc relate to management support provided directly to them.
28. Dividends
The dividends paid in 2014 and 2013 were £723,000 (3.90p per share) and £683,000 (3.75p per share). A final dividend in respect  
of the year ended 31 December 2014 of 2.7p per share will be paid on 24 June 2015. These financial statements do not reflect  
this dividend. 
Financial Statements Directors and Advisers
Directors
M D Love – Non-Executive Chairman
G R Fearnley – Non-Executive Director
J S Starr – Chief Executive 
R Howard – Operations Director
A D James – Product Development Director
J P Pomeroy – Finance Director
A F Milne – Director of Support Services
Secretary
J P Pomeroy
Company number
4578125
Registered office
50 Leman St
London
E1 8HQ
Independent auditors
Grant Thornton UK LLP
Grant Thornton House
Melton Street
Euston Square
London NW1 2EP
Principal bankers
HSBC Bank Plc
Basingstoke Commercial Centre
8 London Street 
Basingstoke 
RG21 7NU
 
Solicitors
Ashfords LLP
Tower Wharf
Cheese Lane 
Bristol BS2 0JJ
 
Nominated adviser
WH Ireland Limited
24 Martin Lane
London
EC4R 0DR
Broker
WH Ireland Limited
24 Martin Lane
London
EC4R 0DR
Registrars
Capita Registrars 
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU Dillistone Group Plc
50 Leman St
London E1 8HQ
 
T +44 (0)20 7749 6100
www.dillistonegroup.com