Annual Report & Accounts
for the year ended
31st December 2003 Contents
Contents
Financial highlights 1
Chairman’s statement 2
Chief Executive’s review 3
Finance Director’s report 4
Directors’ report 5
Board of Directors 7
Corporate governance 8
Remuneration report 10
Statement of directors’ responsibilities 11
Independent auditor’s report 12
Profit and loss account 13
Balance sheet 14
Cash flow statement 15
Accounting policies 16
Notes 17
Notice of Annual General Meeting 25
Contents Number of clients 196 159 23%
Sales financed £207 million £148 million 40%
Client commitments £17.6 million £15.2 million 16%
Turnover £4.2 million £2.9million 46%
Operating profit £921,000 £427,000 116%
Profit/(loss) before tax £206,000 (£96,000)
Profit after tax £134,000 £103,000 30% 
Basic earnings per share 3.43p 2.63p 30%
Financial highlights
Financial highlights
2003 2002 Growth
1 2
Chairman’s statement
Continued growth
In what is an increasingly competitive marketplace, the company continued to grow during
the year as we increased our client base from 159 to 196 clients. Turnover increased by 46%
to £4.2 million (2002: £2.9 million) on total sales financed of £207 million (2002: £148
million) and client commitments of £17.6 million (2002: £15.2 million). The company
produced a profit before tax for the year of £206,000 (2002: loss of £96,000).
Our office in Manchester, opened last year, has expanded, and we now look after almost 40%
of our clients from there. At present, one half of our business development team is based in
the north of the country and we plan to expand the team further in 2004 as good quality
individuals become available. This in turn will enable the company to increase its base of
introducers and write more business.
We have recently launched our bad debt protection product, the take-up of which has been
very encouraging. In the first three months clients have purchased protection for
approaching £40 million of annualised turnover, well ahead of our expectations. This product
has the potential to drive revenue growth, both in its own right and by broadening the market
for our existing products.
I am pleased to announce that we have agreed in principle a risk-share programme with our
banking facility provider, Lloyds TSB Commercial Finance. This will enable us to attract larger
clients without taking on all the risk of the increased commitment.
Management team
I think it is important to give recognition to our management team which has worked
tirelessly during the last three years to grow DCF and to ensure it is equipped with the strong
foundations it needs for its future development. The quality and commitment of the team
has been, and will continue to be, vitally important to DCF and its stakeholders. I would like
to welcome Paul Billett to the team as our Finance Director. Paul joined DCF from
PricewaterhouseCoopers at the time of Nigel Miller’s departure on 1 December 2003.
Outlook
The company’s objectives are aimed at continuing to grow the business quickly and
profitably, without compromising our underwriting standards. Our brand is now well known
and highly regarded in the market. We are positioned well from both a people and systems
perspective to grow our client base, and we expect to be able to do that this year – indeed,
2004 has started well with the addition of 21 new clients during the first two months.
Finally, I would like to thank all the staff for their continued commitment and hard work,
without which the business would not be in the strong position it is today.
Tony Caplin
Chairman
30 March 2004 3
Chief Executive’s review  
The last year has seen continued profitable growth despite the backdrop of a more crowded
and competitive market place. Fee rates are still being driven down as a result of increased
competition, although our speed of delivery and quality of service provides us with a
necessary competitive advantage in many quarters.
Whilst there continue to be new entrants to the market, the barriers to entry are now
increasing and a period of rationalisation is expected in the short term. Encouragingly the
economic outlook in the UK, with increased raw material costs and interest rates, points to
a buoyant 2004 for our industry. We therefore approach the coming year with a good deal of
optimism.
DCF people and systems
We continue to seek out and employ the very best individuals our industry has to offer. In the
second half of 2003 we began to develop an experienced tier of management to provide
senior support to the Board, and this development will continue throughout 2004. We also
maintain our policy of providing an environment that encourages our people to develop their
careers, at the same time investing in the latest systems to deliver a first class service whilst
providing high quality risk management.
2004 sees the introduction of both our new bad debt protection product (arranged via a
back-to-back agreement with the insurer AIG) and a risk-share programme with Lloyds TSB
Commercial Finance. Both of these products not only provide new revenue opportunities but
also widen considerably our target market.
Further improvements to our website and our e-commerce offering will also be made this
year.
Market developments
With improving IT in all sectors, more and more clients are opting for invoice discounting
rather than factoring. Invoice discounting not only has more security issues for the lender
but historically has also been viewed more as a commodity by the marketplace. Ironically,
with more lenders focused on this type of business, an opportunity exists for a fast moving
and flexible lender in the traditional market of factoring where the potential client is far
more concerned about service and the relationship with their funding partner.
Our figures in 2003 would certainly seem to confirm this assertion and so far in 2004 all of
our new business transactions have been factoring. This not only suggests that our
underwriting has remained constant but that both clients and introducers alike recognise
the Dynamic brand as being synonymous with quality of service. Having said that, the launch
of the two products outlined above makes it clear that we are very keen to continue taking
advantage of our reputation for service in the invoice discounting sector.
Outlook 
High activity levels and an increased number of distribution channels combined with a still
fragile UK economy will provide ample opportunities for our company this year. Increased
costs will put pressure on companies’ cash flow, a problem for which factoring is the ideal
solution. Equally, more businesses will require financial restructuring services, which offers
Dynamic the ability to earn higher fees.
After three years trading Dynamic is now a well known and respected brand in our industry.
We have been very successful in attracting good people, who, with the systems we have
developed and new products we have launched, will drive the business forward increasing
our market share in the short to medium-term. The credibility afforded by our stock market
listing allied to the hands-on entrepreneurial approach of our management team make the
Dynamic offering hugely attractive to the ambitious owner-managed business and SME.
Paul Hird
Chief Executive Finance Director’s report
4
Introduction
When I joined DCF on 1 December 2003 it was immediately clear that I had arrived at an exciting
time for the company. In the three years since it started trading a number of important
milestones have been achieved, not least of which was the financing in excess of £200 million of
sales this year, an increase on 2002 of 40%. The achievement of such milestones is moving us
towards the critical mass we need to begin increasing the bottom line more rapidly as our fixed
costs reduce relative to the overall cost base. The investments that have been made during DCF’s
first three years, the quality of our staff and our systems, and the enthusiasm and calibre of the
management team puts us in a strong position to do just that, and I am excited at the thought
of being closely involved with the next phase of DCF’s growth.
Result for the year
During the year DCF generated a profit before tax of £206,000 (2002: loss of £96,000) on turnover
of £4.2 million (2002: £2.9 million). We increased our client base from 159 at the end of 2002 to
196 clients at the end of this year, comprising 164 factoring and 32 invoice discounting clients.
Our administrative costs rose by 34%. The majority of this increase was due to additional
personnel costs resulting from the recruitment of ten people during the year, taking the total
number of our employees at the year end to 36. We have continued to recruit people into our
operations team, where we have been increasing our capacity in line with the increase in demand
from our growing client base, and we have also been successful in expanding our business
development team.  
From a balance sheet perspective, at the end of the year we had £33.7 million of debtors under
management (2002: £32.7 million) against which we had advanced £17.6 million to our clients
(2002: £15.2 million).   
Taxation
The effective tax rate for the year is 35%, which is higher than the standard rate of corporation
tax due to certain expenses which do not benefit from tax relief. Whilst the accounts show a tax
charge this does not translate into a cash payment due to the relief provided by taxable losses
brought forward from previous periods.
Earnings per share
Basic earnings per share rose by 30% from 2.63p for 2002 to 3.43p for 2003. The diluted earnings
per share figure reflects the dilutive effect of share options issued under our staff share option
scheme. This scheme is offered to all full-time employees as we continue to believe that our staff
should benefit from improvements in our share price given any increases are due in a significant
part to their contribution to DCF.
Cash flow
We continue to show a net outflow of cash reflecting the continuing growth in the level of our
clients’ sales that we finance. This outflow continues to be supported by our £25 million
receivables financing facility with Lloyds TSB Commercial Finance, of which, at the year end, we
had utilised £12.9 million (2002: £11.6 million). 
Paul Billett
Finance Director 5
Directors’ report
The directors present their Annual Report and the audited financial statements for the year ended
31 December 2003.
Principal activity
The principal activity of the company is the provision of recourse factoring, invoice discounting and
payroll products to small and medium-size companies.
Business review
The profit and loss account is set out on page 13 and shows the results for the year. A review of the
performance of the business and its future prospects is given in the Chairman’s statement, Chief
Executive’s review and Finance Director’s report on pages 2, 3 and 4 respectively.
Dividends
The directors do not recommend the payment of a dividend (2002: £nil).
Payment of creditors 
It is the company’s payment policy to settle outstanding accounts with all suppliers in accordance
with the terms and conditions agreed when placing orders. On average this approximates to 35 days.
Charitable and political contributions
The company made charitable donations of £670 (2002: £nil). The company made no political
contributions (2002: £nil).
Director appointment
Paul Billett succeeded Nigel Miller as Finance Director on 1 December 2003. Biographies of all
directors who held office at the end of the year are set out on page 7.
Directors’ interests in ordinary shares
The total interests of the directors who held office at the end of the financial year in the ordinary
share capital of the company are shown below. Directors were the beneficial owners of all interests
listed save for 3,000 shares (2002: 2,000) held by an immediate family member of Paul Hird.
Interests Interests 
at 31 December 2003 at 1 January 2003*
Ordinary ‘A’ ordinary Ordinary ‘A’ ordinary
shares shares shares shares
Anthony Caplin 24,490 32,653 24,490 32,653
Paul Hird 188,273 241,633 183,273 241,633
Paul Billett - - - -
Philip Woodward 115,592 154,123 115,592 154,123
Gary Davis 115,592 154,123 115,592 154,123
Keith Carpenter 3,918 5,224 3,918 5,224
*or date of appointment if later
No director holds share options in the company, nor was granted share options in the company
during the year. There have been no movements in the interests of the directors in the share capital
of the company since the year end.
The ‘A’ ordinary shares of the company carry certain limited dividend and voting rights and were
convertible into either ordinary shares or deferred shares depending upon certain levels of earnings
per share being achieved in the financial year ended 31 December 2003. Those levels of earnings per
share were not achieved, meaning that all of the ‘A’ ordinary shares will convert to deferred shares
on the date of publication of this report. The deferred shares carry no dividend or voting rights and
carry only limited rights to a return of capital on the winding-up of the company. Directors’ report (continued)
The directors retiring by rotation are Philip Woodward and Paul Billett who, being eligible,
offer themselves for re-election.
Significant shareholdings
At 29 February 2004 the company was aware of the following significant holdings in its
ordinary share capital:
Percentage of
Number ofissued ordinary
Name of shareholder or fund manager ordinary shares share capital
Unicorn Asset Management 1,132,876 28.91
Laing & Cruickshank Investment Management 623,100 15.90
Close Finsbury Asset Management 596,464 15.22
Liontrust Asset Management 538,858 13.75
Impact of International Financial Reporting Standards
The company is aware of the requirement for listed companies to apply IFRS for the year
ending 31 December 2005. The directors have commenced a plan which investigates the
effects of IFRS on the company’s financial statements.
Auditor
In accordance with section 384 of the Companies Act 1985, a resolution for the re-
appointment of KPMG Audit Plc as auditor of the company will be proposed at the
forthcoming Annual General Meeting.
Annual General Meeting
Special notice of the Annual General Meeting of the company to be held at 7 Devonshire
Square, Cutlers Gardens, London, EC2M 4YH at 2pm on Thursday 20 May 2004 is enclosed
with these accounts, together with a form of proxy. 
By order of the board
Paul Billett
Company Secretary
30 March 2004
6 7
Board of Directors
Tony Caplin
Non-Executive Chairman
Aged 52, Tony has held many senior management positions, including Managing Director of
Manchester News Ltd, President of Pacific Telesis, European division, Chief Executive of First
City GB and Chief Executive of Hunterprint Plc. He currently serves as non-executive Chairman
of Durlacher Plc, G.S.Technologies Ltd, Norprint Ltd, Ealing Hospital NHS Trust and Coppice
Allupack Ltd. Tony is also the senior non-executive director of Easynet Plc, Tadpole
Technology Plc and Northamber Plc, is a non-executive director of Hand Picked Hotels Ltd and
is a Commissioner for the Public Works Loan Board. Tony is Chairman of the Remuneration
Committee and a member of the Audit Committee.
Paul Hird
Chief Executive
Aged 45, Paul is a former director of Venture Finance PLC (a member of the ABN Amro Group)
with Board experience in both sales and marketing and operations. He has 26 years
experience in the factoring and invoice discounting industry having worked previously for
International Factors Limited as well as Venture Finance PLC.
Paul Billett
Finance Director 
Aged 37, Paul is a Chartered Accountant who joined DCF from PricewaterhouseCoopers on 1
December 2003. Since 1999 he has spent his time with PwC in London, undertaking assurance
and transaction support work for some of the firm’s largest clients. Paul is Company
Secretary and also has responsibility for information technology and human resources.  
Phil Woodward
Risk and Operations Director
Aged 36, Phil was previously a divisional director of Venture Factors, the factoring division
of Venture Finance PLC. Prior to this he was senior regional manager, responsible for sales
and marketing, for Venture Finance PLC in the north-west of England. He started his
factoring career with Osborne Best where he held the position of commercial manager,
having previously been with chartered accountants Robson Rhodes for three years.
Gary Davis
Sales and Marketing Director
Aged 39, Gary was previously area sales manager for Venture Finance PLC and was
instrumental in establishing their London office. His sales career spans twenty years working
with Dunn & Bradstreet, The Mortgage Corporation and Avco Trust.
Keith Carpenter
Non-Executive Director
Aged 60, Keith’s career spanned 37 years with Lloyds TSB Bank plc, including 17 years
experience working in the venture capital market with Lloyds Development Capital. Keith has
served as non-executive director of numerous companies and is currently a non-executive
director of Justina Holdings Ltd. Keith is Chairman of the Audit Committee and a member of
the Remuneration Committee. 8
Corporate governance
The maintenance of effective corporate governance is a key priority of the Board and the ways in
which the company has applied the principles of corporate governance as set out in the
Combined Code are described below. The rules of the Alternative Investment Market (“AIM”) do
not require the company to comply with the requirements of the Combined Code, and indeed the
Board considers that the size of the company would not warrant compliance with all of the Code’s
requirements. However, the Board fully supports the principles of openness, integrity and
accountability on which the Combined Code is based and the company has complied with a
number of key requirements.
The Board consists of four executive and two non-executive directors. The non-executive
Chairman of the company is Tony Caplin. Paul Hird is Chief Executive and is responsible for the
day-to-day running of the company. Paul Billett is Finance Director, Phil Woodward is Risk and
Operations Director and Gary Davis is Sales and Marketing Director. This gives the necessary mix
of industry-specific and broad business experience necessary for the effective governance of the
company. The Board meets regularly, at least monthly, and is particularly concerned with the
company’s strategy. The biographies of the Board members appear on page 7 of this report.
The committees described below deal with important aspects of the company’s affairs and
provide independent, objective advice. The Board has not appointed a nominations committee
as it believes that the size and operations of the company do not justify it.
The Audit Committee is chaired by Keith Carpenter and comprises the non-executive directors.
The external auditor and executive directors are invited to attend when appropriate. The remit
of the committee is to monitor the internal financial controls that are in place to ensure the
integrity of financial and other management information, including external financial reporting;
to review the company’s internal control and risk management systems; and to provide, by way
of regular meetings, a line of communication between the Board and the external auditor. It
makes recommendations to the Board on the appointment of the external auditor and its fees,
and is responsible for monitoring its independence. The Audit Committee meets at least three
times each year.
The Remuneration Committee is chaired by Tony Caplin and comprises the non-executive
directors. The Chief Executive is normally in attendance, except during discussions concerning
his own remuneration. The committee is responsible for the executive directors’ remuneration
and other benefits and their terms of employment, including performance-related bonuses and
share options. It ensures that a significant proportion of the executive directors’ remuneration
is directly related to the performance of the company.
Internal controls and risk managment
The Board acknowledges its responsibility for the company’s system of internal control and for
reviewing its effectiveness. It should be recognised that such a system can only provide
reasonable and not absolute assurance against material misstatement or loss as it is designed
to manage rather than eliminate those risks that may affect the company in reaching its
business objectives. The concept of reasonable assurance recognises that the cost of a control
procedure should not exceed the expected benefits. 
The Combined Code requires that the effectiveness of the system of internal control is reviewed
by the directors, including financial, operational and compliance controls and risk management.
Under the rules of AIM the company is not required to comply with the requirements of the
Combined Code. However, whilst the Board considers that the size of the company does not
warrant compliance with all of the Code’s requirements, the Board has implemented a process to
review material aspects of the system of internal control and for identifying, evaluating and
managing the significant risks the company faces.
Board of Directors
Audit Committee
Remuneration Committee 9
Corporate governance (continued)
The overall internal control system includes written policies and control procedures and
clearly drawn lines of accountability and delegation of authority. The company maintains a
comprehensive process of financial reporting. The annual budget is reviewed and approved
by the Board before being formally adopted. The Board receives financial reports of the
company’s performance compared to the budget and to prior years together with
explanations of significant variances. In addition, a quarterly reforecast is prepared and
performance against it is monitored by the Board.
The external auditor, KPMG Audit Plc, reviews the internal controls insofar as it considers
necessary to support its audit opinion, and it reports to the Audit Committee on its findings.
Internal audit
The Board has considered the need for an internal audit function and has concluded that the
size of the company does not warrant it at this time. However, the company’s client auditor
performs a process of independent internal review at regular intervals throughout the year.
The scope of this review is determined by, and the findings reported to, the Audit Committee.
Going concern
The directors have reviewed the company’s budget for the year ending 31 December 2004 and
the forecast for the following year in the light of the company’s financial position and
borrowing facilities at 31 December 2003. On the basis of this review the directors are
satisfied that the company is a going concern and have continued to adopt the going
concern basis in preparing the financial statements. 10
Remuneration report
The individual directors’ emoluments are detailed below.
2003        2003 2003 2002 2003 2002
£000 £000 £000 £000 £000 £000
Tony Caplin 20 - 20 20 - -
Paul Hird 90 18 108 109 18 16
Nigel Miller 74 21 95 89 14 12
Paul Billett 516 - 1 -
Phil Woodward 85 16 101 91 4 14
Gary Davis 75 16 91 85 15 12
Keith Carpenter 16 - 16 15 - -
365 72 437 409 52 54
Benefits in kind include a car allowance, a mortgage subsidy and private medical insurance.
Pension payments represent amounts paid into personal pension plans on behalf of the
executive directors.
On behalf of the board
Tony Caplin
Chairman
30 March 2004
Fees &    Benefits in Total Pension
salary kind
This report has been prepared by the Remuneration Committee on behalf of the Board, and
describes the company’s arrangements for directors’ remuneration in the context of the
Combined Code principles. 
The members of the Remuneration Committee are all non-executive directors. 
The Remuneration Committee, on behalf of the Board and in consultation with the Chief
Executive, determines the company’s policy on executive remuneration, employment
conditions and the remuneration packages of the executive directors. Regular review of the
policy is carried out by the committee, supported by independent advice, to ensure that the
range and level of emoluments and incentive schemes for the executive directors continue to
match market practice. The fees of the non-executive directors are determined by the Board. 
The policy on remuneration is to provide the incentivisation packages necessary to attract,
retain and motivate executive directors of the highest quality to manage the business of the
company, and to attract non-executive directors of the calibre appropriate to the company.
The policy, with its emphasis on performance-related remuneration, is designed to align the
interests of the directors with those of the shareholders. 11
Statement of directors’ responsibilities
Company law requires the directors to prepare financial statements for each financial year
which give a true and fair view of the state of affairs of the company and of the result for
that year.  In preparing those financial statements, the directors are required to:
 select suitable accounting policies and then apply them consistently;
 make judgements and estimates that are reasonable and prudent;
   state whether applicable accounting standards have been followed, subject to any
material departures disclosed and explained in the financial statements; and
 prepare the financial statements on the going concern basis unless it is inappropriate
to presume that the company will continue in business.
The directors are responsible for keeping proper accounting records which disclose with
reasonable accuracy at any time the financial position of the company and to enable them
to ensure that the financial statements comply with the Companies Act 1985.  They have
general responsibility for taking such steps as is reasonably open to them to safeguard the
assets of the company and to prevent and detect fraud and other irregularities.
By order of the Board
Paul Billett
Company Secretary
30 March 2004 12
Independent auditor’s report to the members of Dynamic Commercial Finance Plc
KPMG Audit Plc
1 Forest Gate
Brighton Road
Crawley
West Sussex
RH11 9PT
We have audited the financial statements on pages 13 to 24.
This report is made solely to the company’s members, as a body, in accordance with Section
235 of the Companies Act 1985. 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 auditors
The directors are responsible for preparing the Annual Report. As described on page 11, this
includes responsibility for preparing the financial statements in accordance with applicable
United Kingdom law and accounting standards. Our responsibilities, as independent auditor,
are established in the United Kingdom by statute, the Auditing Practices Board and by our
profession’s ethical guidance.
We report to you our opinion as to whether the financial statements give a true and fair view
and are properly prepared in accordance with the Companies Act 1985. We also report to you
if, in our opinion, the directors’ report is not consistent with the financial statements, if the
company has not kept proper accounting records, if we have not received all the information
and explanations we require for our audit, or if information specified by law regarding
directors’ remuneration and transactions with the company is not disclosed.
We read the other information contained in the Annual Report and consider whether it is
consistent with the audited financial statements. We consider the implications for our report
if we become aware of any apparent misstatements or material inconsistencies with the
financial statements. 
Basis of audit opinion
We conducted our audit in accordance with Auditing Standards issued by the Auditing
Practices Board. An audit includes examination, on a test basis, of evidence relevant to the
amounts and disclosures in the financial statements. It also includes an assessment of the
significant estimates and judgements made by the directors in the preparation of the
financial statements, and of whether the accounting policies are appropriate to the
company’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations
which we considered necessary in order to provide us with sufficient evidence to give
reasonable assurance that the financial statements are free from material misstatement,
whether caused by fraud or other irregularity or error. In forming our opinion we also
evaluated the overall adequacy of the presentation of information in the financial
statements.
Opinion
In our opinion the financial statements give a true and fair view of the state of affairs of the
company as at 31 December 2003 and of its profit for the year then ended and have been
properly prepared in accordance with the Companies Act 1985.
KPMG Audit Plc
Chartered Accountants 
Registered Auditor
30 March 2004 13
Profit and loss account
Note 2003 2002
£000 £000
Sales financed 206,933 147,897
Turnover 4,202 2,875
Administrative expenses (3,281) (2,448)
Operating profit 921 427
Interest receivable 7 8
Interest payable and similar charges 5 ( 722) (531)
Profit/(loss) on ordinary activities before taxation 1 206 (96)
Tax (charge)/credit on profit/(loss) on ordinary activities 2 (72) 199
Profit on ordinary activities after taxation 134 103
Dividends - -
Retained profit for the year 11 134 103
Basic earnings per share 3 3.43p 2.63p
Diluted earnings per share 3 3.42p 2.63p
All amounts relate to continuing activities.
There are no recognised gains or losses except as disclosed above.
Reported profits are equivalent to historical cost profits.
for the year ended 31 December 2003 14
Balance sheet
Note 2003 2002
£000 £000
Fixed assets
Tangible fixed assets 6 190 196
Current assets
Debtors 7 17,310 15,229
Cash at bank and in hand - 487
17,310 15,716
Creditors: amounts falling due within one year 8 (13,330) (11,876)
Net current assets 3,980 3,840
Net assets 4,170 4,036
Capital and reserves
Called up share capital 9 190 190
Share premium account 11 4,406 4,406
Profit and loss account 11 (426) (560)
Equity shareholders’ funds 10 4,170 4,036
These financial statements were approved by the Board of Directors on 30 March  2004 and
were signed on its behalf by:
Paul Hird
Chief Executive
at 31 December 2003
Paul Billett
Finance Director 15
Cash flow statement
Note 2003 2002
£000 £000
Net cash outflow from operating activities 14 (917) (7,152)
Returns on investments and servicing of finance 15 (715) (523)
Capital expenditure 15 (87) (61)
Cash outflow before financing (1,719) (7,736)
Financing 15 1,232 8,140
(Decrease)/increase in cash in the year 16 (487) 404
Reconciliation of net cash flow to movement in net debt
Note 2003 2002
£000 £000
(Decrease)/increase in cash in the year 16 (487) 404
Increase in borrowings 15 (1,232) (8,140)
Movement in net debt in the year (1,719) (7,736)
Net debt at 1 January (11,153) (3,417)
Net debt at 31 December 16 (12,872) (11,153)
for the year ended 31 December 2003 16
Accounting policies
Accounting policies
The following accounting policies have been applied consistently in dealing with items which
are considered material in relation to the company’s financial statements.
Basis of preparation
The financial statements have been prepared in accordance with applicable accounting
standards and under the historical cost accounting rules.  
Sales financed
Sales financed is the value of client sales invoices assigned to the company during the year.
Service fees are received in relation to the level of sales financed.
Turnover
Turnover arises wholly from the principal activities of the company.  It comprises service
fees, discount income and other income net of value added tax.  Turnover, profit and net
assets arise from business activities undertaken wholly within the United Kingdom.
Service fees are recognised when the service is provided. Discount income is recognised on
funds advanced to clients as it becomes due. 
Introducer commissions
Commissions payable to introducers of business are included in the profit and loss account
when they become due to the introducer.
Operating leases
Operating lease rentals are charged to the profit and loss account on a straight-line basis
over the period of the lease.
Credit facility arrangement fees
Fees payable to arrange credit facilities are recognised over the life of the facility. 
Taxation
The charge for taxation is based on the profit for the year and takes into account taxation
deferred because of timing differences between the treatment of certain items for taxation
and accounting purposes.  Deferred tax is recognised, without discounting, in respect of all
timing differences between the treatment of certain items for taxation and accounting
purposes which have arisen but not reversed by the balance sheet date, except as otherwise
required by FRS 19.
Fixed asset depreciation
Depreciation is provided to write off the cost less the estimated residual value of tangible
fixed assets by equal instalments over their useful economic lives as follows:
Leasehold improvements - Life of lease 
Office furniture - 5 years
Office equipment - 5 years
Computer equipment - 3 years
Net client commitments
Amounts due to clients are offset against the related trade debtors. The resulting balance,
less client provisions, represents net client commitments and is included in debtors.
Client provisions
Provision is made specifically in relation to clients with outstanding advances where
recoverability is doubtful, and generally in relation to the level of outstanding commitments
to clients at the year end.
(forming part of the financial statements) 17
Notes 
1 Profit/(loss) on ordinary activities before taxation
2003 2002
£000 £000        
Profit/(loss) on ordinary activities before taxation is stated after charging:
Amounts paid to the auditor:
Audit services 24 23
Tax services 7 7
Depreciation and other amounts written off tangible fixed assets 93 58
Hire of assets under operating leases 80 63
2 Taxation
2003 2002
£000 £000
UK corporation tax 
Current tax on income for the year - -
Total current tax - -
Deferred tax charge/(credit) (see note 7) 72 (199)
Tax charge/(credit) on profit/(loss) on ordinary activities 72 (199)
Factors affecting the tax charge for the current year
Profit/(loss) on ordinary activities before tax 206 (96)
Current tax  charge/(credit) at 30% (2002: 30%) 62 (29)
Effects of :
Expenses not deductible for tax purposes 10 10
Capital allowances in excess of depreciation 14 4
Non-specific doubtful debt provision not deductible 17 6
Losses brought forward and carried forward (103) 9
Total current tax charge - -
(forming part of the financial statements) Notes (continued)
3  Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable  to ordinary 
shareholders by the weighted average number of ordinary shares in issue during the year.
For diluted earnings per share, the weighted average number of ordinary shares in issue is
adjusted to assume conversion of all dilutive potential ordinary shares. The company has
one class of dilutive potential ordinary share: those share options granted to employees
where the exercise price is less than the average market price of the company’s ordinary
shares during the year.
A reconciliation of the earnings and average number of shares used in the calculations is set
out below.
2003 2002
Weighted Weighted
average Per-share average Per-share
Earnings number amount Earnings number amount
£000 of shares pence £000 of shares pence
Basic earnings per share
Earnings attributable 
to shareholders 134 3,918,465 3.43 103 3,918,465 2.63
Effect of dilutive 
securities
Share options 6,716 -
Diluted earnings per share 134 3,925,181 3.42 103 3,918,465 2.63
4 Information regarding directors and employees
The average number of persons employed by the company (including directors) during the
year was 36 (2002 : 26).
2003 2002
£000 £000
Wages and salaries 1,151 915
Social security costs 125 98
Other pension costs 94 80
1,370 1,093
Details of directors’ remuneration are  contained in the remuneration report on page 10.
18 19
5 Interest payable and similar charges
2003 2002
£000 £000
On bank loans 586 404
Credit facility arrangement fees 132 93
Credit facility non-utilisation fees 4 34
722 531
Notes (continued)
6 Tangible fixed assets
Leasehold Office Office Computer Motor Total
improvements furniture equipment equipment Vehicles
£000 £000 £000 £000 £000 £000
Cost 
At 1 January 2003 44 42 35 159 100 280
Additions 12 1 5 70 - 88
Disposals - - - (2) (100) (2)
At 31 December 2003 56 43 40 227 - 366
Depreciation
At 1 January 2003 11 9 8 56 33 84
Charge for year 7 9 8 69 8 93
Disposals - - - (1) (41) (1)
At 31 December 2003 18 18 16 124 - 176
Net book value
At 31 December 2003 38 25 24 103 - 190
At 31 December 2002 33 33 27 103 67 196
(2)
(1) 20
Notes (continued)
7 Debtors
2003 2002
£000 £000
Gross debt receivable 33,688 32,733
Amounts due to clients on collection (16,051) (17,582)   
Client commitments 17,637 15,151
Less client provisions (552) (211)
Net client commitments 17,085 14,940
Deferred tax 127 199
Sundry debtors and prepayments 98 90
17,310 15,229
Deferred tax 
2003 2002
£000 £000
The deferred tax asset comprises:
Accelerated capital allowances (30) (44)
Unrelieved tax losses carried forward 121 224
Non-specific doubtful debt provision 36 19
Total deferred tax asset 127 199
At 1 January 2002 199 -
(Charge)/credit to profit and loss account                         (72) 199
At 31 December 2002   127 199
(30) (44) 21
Notes (continued)
9 Share capital
2003 2002
£000 £000
Authorised
5,846,939 ordinary shares of 2p each 117 117
653,062 ‘A’ ordinary shares of 2p each 13 13
4,904,762 deferred shares of 2p each 98 98
228 228
Allotted, issued and fully paid
3,918,465 ordinary shares of 2p each 79 79
653,062 ‘A’ ordinary shares of 2p each 13 13
4,904,762 deferred shares of 2p each 98 98
190 190
Employee share option plan
At 31 December 2003 the following ordinary shares were under option:
8   Creditors: amounts falling due within one year
2003 2002
£000 £000
Bank loan 12,872 11,640
Tax and social security 109 97
Accruals 349 139
13,330 11,876
On 1 April 2003 the company replaced its existing bank facility with a new receivables financing
facility which provides for maximum borrowing of £25 million over a two-year period. The amount
shown for 2003 under bank loan represents the amount outstanding under this facility at the end
of the year. The loan is secured by a fixed and floating charge over the assets of the company.
Year of grant Exercise Number Number Number Exercise
price granted lapsed    outstanding dates
2001 96p 17,200       3,025 14,175 2004-2011
2002 91.5p 18,200       6,800 11,400 2005-2012
2003 69.5p 47,000       5,250 41,750 2006-2013 22
Notes (continued)
11   Capital and reserves
Share premium account Profit and loss account
£000 £000
At 1 January 2003 4,406 (560)
Retained profit for the year - 134
At 31 December 2003 4,406 (426)
10 Reconciliation of movement in shareholders’ funds
2003 2002
£000 £000
Opening shareholders’ funds 4,036 3,935
Profit for the year 134 103
Adjustment - (2)
Closing shareholders’ funds 4,170 4,036
12  Operating lease commitments
Annual commitments under non-cancellable operating leases are as follows:
2003 2002 2003 2002
Land and Land and Other Other
buildings buildings
£000 £000 £000 £000
Operating leases which expire:
Within one year 28 19 - -
Within two to five years 26 26 45 33
13 Pension costs
The company makes contributions to personal pension plans on behalf of its employees.  The
pension cost for the year represents contributions payable by the company to the personal
pension plans and amounted to £93,623 (2002: £80,121). There were no outstanding
contributions payable to the personal pension plans at the year end (2002: £nil.)  23
Notes (continued)
14   Reconciliation of operating profit to net cash outflow from operating activities
2003 2002
£000 £000
Operating profit 921 427
Depreciation charges 93 58
Increase in client provisions 341 165
Increase in client commitments (2,486) (7,863)
(Increase)/decrease in sundry debtors (8) 47
Increase in sundry creditors 222 14
Net cash outflow from operating activities (917) (7,152)
15 Notes to the cash flow statement
2003 2002
£000 £000
Returns on investments and servicing of finance
Interest payable and similar charges (722) (531)
Interest receivable 7 8
Net cash outflow from returns on investments and
servicing of finance (715) (523)
Capital expenditure 
Purchase of tangible fixed assets (88) (120)
Sale of tangible fixed assets 1 59
Net cash outflow for capital expenditure (87) (61)
Financing
Increase in bank loan 1,232 8,140 24
Notes (continued)
16 Analysis of net debt 
At 1 January Cash flow At 31 December
2003 2003
£000 £000 £000
Cash at bank 487 (487) -
Increase in bank loan (11,640) (1,232) (12,872)
(11,153) (1,719) (12,872)
17 Financial instruments
The company's financial instruments comprise bank borrowings, cash and short term deposits,
factored debts receivable, client advances, trade debtors and trade creditors.
The main risks arising from the company's financial instruments are interest rate risk and
liquidity risk. The policies for managing these risks are regularly reviewed and agreed by the
Board.   The overall market price risk is low because of the nature of the company’s activities. 
The fair values of the company’s financial assets and liabilities are not materially different to
their book values. 
It is, and has been throughout the year, the company’s policy that no trading in financial
instruments shall be undertaken.
Interest rate risk
The company pays interest on its bank borrowings at a floating  rate linked to the base rate.
The company receives discount income on amounts it has advanced to clients also at a floating
rate linked to the base rate 
Liquidity risk
It is the company's policy to finance its business by means of internally generated funds, equity
and facilities from its bankers.  The facilities are regularly reviewed by the Board.
Foreign currency risk
The company does not have any foreign currency exposures. 25
Notice of Annual General Meeting
To all shareholders
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Dynamic Commercial Finance Plc
(the “Company”) will be held at 7 Devonshire Square, Cutlers Gardens, London EC2M 4YH at
2pm on 20 May 2004 for the following purposes:
ORDINARY BUSINESS
Resolution 1
To receive and, if approved, to adopt the Company's accounts for the financial year ended 31
December 2003 together with the last directors' report, the last remuneration report and the
auditor’s report on those accounts and the auditable part of the remuneration report.
Resolution 2
To re-elect as a director of the Company Philip Woodward who is retiring by rotation.
Biographical details are included on page 7 of the 2003 Annual Report and Accounts.
Resolution 3
To re-elect as a director of the Company Paul Billett who is retiring by rotation. Biographical
details are included on page 7 of the 2003 Annual Report and Accounts.
Resolution 4
To re-appoint KPMG Audit Plc as auditor of the Company to hold office from the conclusion
of the meeting to the conclusion of the next meeting at which the accounts are laid before
the shareholders and to authorise the directors to determine its remuneration.
SPECIAL BUSINESS
To consider and, if thought fit, to pass the following resolutions, of which resolutions 5 and
7 will be proposed as ordinary resolutions and resolution 6 will be proposed as a special
resolution:
Resolution 5 
That the directors be and they are generally and unconditionally authorised pursuant to
Section 80 of the Companies Act 1985 (the “Act”) to allot relevant securities (as defined in
that section) up to a maximum aggregate nominal amount of £26,123 provided that this
authority shall expire on 20 May 2009 or such earlier date (if any) on which this authority is
revoked save that the Company may prior to the expiry of such period make any offer or
agreement which would or might require relevant securities to be allotted after the expiry of
this period and the directors may allot relevant securities in pursuance of any such offer or
agreement notwithstanding the expiry of the authority given by this paragraph, so that all
previous authorities of the directors pursuant to Section 80 of the Act be and they are
revoked.
Resolution 6
That subject to resolution 5 being passed the directors be and they are empowered pursuant
to Section 95(1) of the Act to allot equity securities (as defined in Section 94(2) of the Act)
of the Company for cash pursuant to the authority of the directors under Section 80 of the
Act conferred by the previous resolution as if Section 89(1) of the Act did not apply to such
allotment and at any time prior to the expiry of such power conferred by this resolution to
make any offer or agreement which would or might require equity securities to be allotted
after the expiry of such power notwithstanding the expiry of such power provided that such
power shall, subject as aforesaid, cease to have effect on 20 May 2009 or such earlier date
(if any) on which the said authority is revoked, and provided that the power conferred by this
resolution shall be limited to:
(a) the allotment of equity securities in connection with a rights issue in favour of the
holders of ordinary shares of 2 pence each where the equity securities attributable to
the interests of all the holders of ordinary shares of 2 pence each are proportionate
(as nearly as may be convenient, having regard to the statutory and other regulatory
requirements of any foreign territory or the requirements of any regulatory body or
stock exchange) to the respective number of ordinary shares of 2 pence each held by
them but subject to such exclusions and other arrangements as the directors of the Notice of Annual General Meeting (continued)
Company may deem necessary or expedient in relation to fractional entitlements and
any shares held by overseas shareholders; and
(b) the allotment of equity securities otherwise than as mentioned in sub-paragraph (a) 
up to a maximum aggregate nominal amount of £7,837, representing approximately 
10% per cent of the nominal value of the current issued ordinary share capital of the 
Company.
Resolution 7
That, in accordance with Article 17 of its Articles of Association and the Companies Act 1985,
the Company be and is hereby generally and unconditionally authorised to make market
purchases (within the meaning of Section 163(3) of the Companies Act 1985) on the London
Stock Exchange of ordinary shares of 2 pence each in the Company on such terms and in such
manner as the directors of the Company may from time to time determine, provided that:
(i) the maximum number of ordinary shares hereby authorised to be purchased
is 195,923, representing 5 per cent of the current issued ordinary share
capital of the Company;
(ii) the minimum price which may be paid for an ordinary share is 2 pence
(exclusive of expenses (if any) payable by the Company);
(iii) the maximum price which may be paid for an ordinary share is an amount
equal to 5% above the average of the middle market quotations for an
ordinary share as derived from the London Stock Exchange for the five
business days immediately preceding the day on which the ordinary share is
contracted to be purchased (exclusive of expenses (if any) payable by the
Company); and
(iv) this authority, unless previously revoked or varied, shall expire at the
conclusion of the Annual General Meeting of the Company to be held in
2005, save that a contract of purchase may be concluded by the Company
before such expiry which will or may be executed wholly or partly after such
expiry, and the purchase of shares may be made in pursuance of any such
contract.
By order of the Board
Paul  Billett
Company Secretary
30 March 2004
Registered office
7 Devonshire Square
Cutlers Gardens
London
EC2M 4YH
26 Notice of Annual General Meeting (continued)
Notes
1.All members who hold ordinary shares are entitled to attend and vote at the meeting.
Members who are entitled to attend and vote may appoint one or more proxies to
attend and, on a poll, vote instead of them, and a proxy need not also be a member.
2. A form of proxy is enclosed. To be valid, the enclosed form of proxy, together with any
power of attorney or other such instrument (if any) under which it is signed, or a 
notorially certified copy of such power of attorney or such other instrument, must be
deposited at the offices of Capita Registrars, 34 Beckenham Road, Beckenham, Kent,
BR3 4TU no later than 2pm on 18 May 2004. Completion and return of a form of proxy
will not preclude a member from attending in person and voting at the meeting.
3. The register of directors' interests in the shares of the Company and copies of the 
directors' service contracts, other than those expiring or determinable without
payments of compensation within one year, are available for inspection at the 
registered office of the Company during the usual business hours on any weekday
(public holidays excluded) from the date of this notice until the Annual General 
Meeting and will be available for inspection at the place of the Annual General Meeting
from 1.45pm on 20 May 2004 and during the meeting.
4.Only those shareholders registered on the register of members of the Company at 2pm
on 18 May 2004 shall be entitled to attend or vote at the Annual General Meeting either
in person or by proxy and the number of shares registered in their name at that time
shall determine the number of votes such persons are entitled to cast at the meeting.
Any changes to the register of members after such time shall be disregarded in
determining the rights of any person to attend or vote at the meeting. 
Explanatory notes to the notice of Annual General Meeting
Item 1: Report and accounts
The directors must present to shareholders at the Annual General Meeting the directors’
report and the accounts of the Company for the year ended 31 December 2003. The directors’
report, the accounts, the remuneration report and the report of the Company's auditor on
the accounts and the auditable part of the remuneration report, are contained within the
2003 Annual Report and Accounts.
Items 2 and 3: Re-election of directors
The 2003 Annual Report and Accounts gives biographical details of each of the directors and
reasons for their re-election. Each re-election shall be considered separately at the
meeting.
Item 4: Re-appointment of auditor
The auditor of a company must be appointed at each general meeting at which accounts are
presented. Resolution 4 proposes the re-appointment of KPMG Audit Plc to hold office until
the conclusion of the next Annual General Meeting to be held in 2005. The resolution also
gives authority to the directors to determine the auditor’s remuneration.
Item 5: Directors’ authority to allot securities
Resolution 5 proposes to seek renewal of the authority of the directors to allot ordinary
shares for a period of five years from the date of the resolution. In compliance with the
Guidelines issued by the Association of British Insurers, the nominal amount of relevant
securities of £26,123 to which this authority will relate represents one third of the nominal
amount of the issued ordinary share capital of the Company at 30 March 2004. The authority
will expire on 20 May 2009 but in accordance with previous practice the directors intend to
seek renewal of this authority at subsequent Annual General Meetings.
Resolution 5 will be proposed as an Ordinary Resolution.
27 28
Item 6: Disapplication of pre-emption rights
Resolution 6 proposes to seek renewal of the power of the directors to make limited
allotments of ordinary shares for cash other than according to the statutory pre-emption
rights which require a company to offer all allotments of ordinary shares for cash
proportionately to existing shareholders first.The resolution would continue to provide
directors with the flexibility to act in the best interests of shareholders when opportunities
arise, so that:
(a) the Company can follow normal practices in the event of a rights issue; and
(b) ordinary shares may be issued wholly for cash other than proportionately to existing
ordinary shareholders up to a maximum nominal amount of £7,837, representing
approximately 10% of the Company's issued ordinary share capital at 30 March 2004.
The directors believe that the limited powers provided by this resolution will maintain a
desirable degree of flexibility. Unless previously revoked or varied the disapplication will
expire on 20 May 2009 but in accordance with previous practice, the directors intend to seek
renewal of this authority at subsequent Annual General Meetings. 
Resolution 6 will be proposed as a Special Resolution
Item 7: Authority to purchase own shares
In certain circumstances, it may be advantageous for the Company to purchase its own
ordinary shares and Resolution 7 seeks authority from shareholders to authorise the
directors to make such purchases in the market.
The directors consider it desirable for this general authority to be available to provide
additional flexibility in the management of the Company's capital resources. The directors
would only implement the authority when, in the light of market conditions prevailing at the
time, they believe that the effect of any such purchase will enhance earnings per share in the
medium to long-term and will be in the best interests of shareholders generally. The
purchase price will be paid out of distributable profits.
The total number of options to subscribe for ordinary shares that are outstanding at 30
March 2004 (being the latest practicable date prior to publication of this notice) is 67,325.
The proportion of issued share capital that they represent at that time is 1.7% and the
proportion of issued share capital that they will represent if the full authority to buy back
shares (existing and being sought) is used is 1.8%.
Resolution 7 specifies the maximum number of shares which may be purchased (representing
approximately 5% of the Company's issued ordinary share capital as at 30 March 2004) and
the minimum and maximum prices at which they may be bought, reflecting the requirements
of the Companies Act 1985 and the UK Listing Authority. The directors intend to seek renewal
of this power at subsequent Annual General Meetings.
Resolution 7 will be proposed as a Special Resolution.
Notice of Annual General Meeting (continued) Company offices
38-42 South Road
Haywards Heath
West Sussex
RH16 4LA
01444 884646
Web site & email address
www.dcfplc.com 
info@dcfplc.com
For further information please contact
Paul Hird (Chief Executive)
01444 884610
phird@dcfplc.com
Paul Billett (Finance Director)
01444 884612
pbillett@dcfplc.com
Key dates
Annual general meeting 20 May 2004
Announcement of interim results September 2004
Announcement of final results March 2005
Registered office
7 Devonshire Square
Cutlers Gardens
London
EC2M 4YH
Company number
4117878
Auditor
KPMG Audit Plc
1 Forest Gate
Brighton Road
Crawley
RH11 9PT
Bankers
Lloyds TSB Commercial Finance
Boston House
The Little Green 
Richmond
TW9 1QE
Lloyds TSB Bank plc
Black Horse House
Medway Wharf Road
Tonbridge
Kent
TN9 1QS
Solicitors
Hammonds
7 Devonshire Square
Cutlers Gardens
London
EC2M 4YH
Nominated adviser and broker
Williams de Broë  Plc
6 Broadgate
London
EC2M 2RP
Registrars
Capita Registrars 
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Public relations consultants
Hansard Communications
14 Kinnerton Place South
London
SE1X 8EH
Company information and Advisors
Company information and advisors 38-42 South Road, Haywards Heath, West Sussex RH16 4LA
Tel: 01444 884646   Fax: 01444 884647
www.dcfplc.com
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