Delivering 
World Class 
Performance
01 Highlights
02 At a glance
04 Chairman’s statement
06 Chief Executive’s review
12 Board of Directors
14 Report of the Directors
22 Independent Auditor’s report
23 Principal accounting policies
29 Consolidated income statement
29 Consolidated statement of comprehensive income
30 Consolidated statement of financial position
31 Company statement of financial position
32 Consolidated statement of changes in equity
33 Company statement of changes in equity
34 Consolidated cash flow statement
35 Company cash flow statement
36 Notes to the financial statements
59 Directors and Advisers 
Allocate Software plc is the leading supplier of workforce and  
compliance optimisation solutions for world-wide organisations with  
large, multi-skilled workforces. Using Allocate Software’s workforce and 
governance optimisation software, organisations can deploy the right 
people with the right skills, to the right place at the right time, enabling 
operational demands to be matched with workforce supply ensuring 
efficiency, safety and compliance whilst reducing costs. 
 
Headquartered in London with regional offices in the UK, Sweden, USA, 
Australia and Malaysia, Allocate Software provides services and support to 
an international customer base in key vertical sectors including: Healthcare, 
Defence and Maritime.  Allocate Software plc
Annual Report and Accounts 2010
01
Financial highlights
 2010 2009
Revenue up 39% £22.0m  £15.8m
Trading profit* up 38% £3.49m  £2.53m
Diluted adjusted EPS** up 18% 6.31p  5.36p
Cash generated from operations up 172%  £4.9m  £1.8m
** Trading profit defined as profit before amortisation of intangible assets, share-based payments, interest and tax. 
** Diluted adjusted EPS defined as excluding amortisation of intangible assets, share-based payments and deferred tax. 
Business highlights
Acquisition of Time Care in Sweden  ■
in December 2009 
Acquisition of Dynamic Change in  ■
the UK in May 2010 
The Healthcare customer base now  ■
includes 353 NHS Trusts in the UK, 
including therein, 121 NHS Trusts 
who are customers of Dynamic 
Change 
Selected as preferred supplier by 
 ■
the State Government of New 
South Wales, Australia to supply its 
Healthroster software across the 
entire state public health system, 
covering more than 90,000 staff. 
This contract has a potential total 
value of A$10 million (approximately 
£5.5m at current exchange rates) 
and will start to be delivered during 
the 2011 financial year 
Healthroster gained 40 new NHS 
 ■
Trust customers, making 119 Trusts 
with Healthroster in total at the 
year-end (which represents 29%  
of the 411 total number of Acute, 
Mental Health and Primary Care 
Trusts in England and Wales) 
Total Healthcare customers 
 ■
worldwide now number 417, 
including 58 customers of  
Time Care in Sweden 
Signed for £2m license value with 
 ■
the Australian Army
Our partner strategy has produced  ■
positive results with our partners 
PwC and CSC supporting the 
Company in closing two major deals 
this year 
07 08 09 10
Revenue £m
8.3
11.6
15.8
22.0
1.07
1.85
2.53
3.49
07 08 09 10
Trading Proﬁt £m 02
Allocate Software plc
Annual Report and Accounts 2010
Overview
At a glance
2010
Total Revenue
£22.0m
2007
Total Revenue
£8.3m
67.3%
28.9%
24.1%
46.9%
20.4%
8.1%
 2007 2010
 Healthcare £2.5m £14.8m
 Defence £3.9m £4.5m
 Maritime £2.0m £1.8m
Revenue by Sector £m
What we do
Healthcare Defence Maritime
Understanding the unique issues 
faced by Healthcare organisations 
worldwide and NHS Trusts in the UK, 
Allocate Software’s Healthcare 
solutions help organisations align their 
staff to the clinical needs of the wards. 
Allocate Software’s e-Rostering and 
temporary staffing applications are 
making a big difference in over 400 
Healthcare organisations worldwide 
both in terms of financial savings, 
standards of patient care and 
outcomes. Our Healthcare solutions 
are designed to help maximise the 
effectiveness and efficiency of the 
workforce by managing highly 
complex rosters across different staff 
groups and automating the planning 
of bank and agency staff across clinical 
organisations. With the acquisition of 
Dynamic Change our company now 
has an extended applications portfolio 
for the Healthcare sector which 
includes regulatory compliance 
corporate governance, risk and 
performance management. Our 
acquisition of Time Care, a leading 
Swedish provider of workforce 
management software  
also helps expand our geographic 
footprint into the Northern European 
Healthcare market. 
At the core of Allocate Software’s 
solution for the defence sector is our 
industry-leading MAPS Defence Suite. 
This full Capability Management 
solution is designed to meet the 
complex requirements of modern 
defence forces. Aligning military 
capability with national defence policy, 
MAPS Defence Suite is an integrated, 
time-based Force Planning, Force 
Preparation and Force Generation 
solution which helps its military 
customers to achieve effective and 
timely projection of Combat Power. 
With a proven track record in 
delivering costed, predictive military 
capability managements, MAPS 
Defence Suite has been deployed to 
a number of organisations including: 
The Royal Navy, The British Army, The 
Royal Australian Navy, NATO, The 
Australian Army and the Royal Fleet 
Auxiliary.
Allocate Software’s solution for the 
maritime sector has been developed 
to manage crew administration, crew 
resources and safety compliance in 
the shipping, offshore engineering 
and cruise & ferry sectors. Our MAPS 
Maritime Suite ensures: scheduling the 
right staff to the right projects at the 
right time, efficient utilization of 
multi-skilled resources, ensuring staff 
have the correct skills and qualifications 
and providing accurate real-time 
People on Board information. Allocate 
Software maritime solutions are 
currently in use with some worldwide 
organisations: P&O Cruises, A.P . 
Moller-Maersk, Maersk Oil Qatar, 
Acergy Group and the world’s largest 
family entertainment company fleet 
of cruise ships. Allocate Software plc
Annual Report and Accounts 2010
03
USA
UK
Sweden
Malaysia
Australia
 2007 2010
 United Kingdom £5.3m £14.2m
 Rest of World £3.0m £7.8m
Revenue by Territory Growth £m
Office Locations Worldwide
65%
36%
64%
35%
2010
Total Revenue
£22.0m
2007
Total Revenue
£8.3m
Where we are
Headquartered in the UK, Allocate 
now has operations on four continents 
and supply customers in over 10 
countries. There was significant growth 
in Europe in 2010 – driven by the 
acquisition of Time Care in Sweden – 
and in Australia, following the signing 
of two substantial contracts with the 
New South Wales Department of 
Health and the Australian Army.
A presence has been established in 
the Middle East for Healthcare and in 
the US for Healthcare and Maritime, 
reducing Allocate’s dependence on 
the UK public sector and providing 
broader opportunities for growth. 04
Allocate Software plc
Annual Report and Accounts 2010
Chairman’s statement
Business review
Terry Osborne 
Chairman
Delivering robust results
Our customer 
numbers have 
grown from less 
than 100 in 2007 
to over 600  
in 2010
We are now a business with significant and 
growing overseas customers and operations
The 2010 financial year has been 
another year of considerable success  
for Allocate. We have grown our 
revenues and profits in all of our core 
markets and we continue to execute 
well against our strategy.
As is clear from our results, Allocate has 
evolved over the last four years. In the 
2007 financial year, we reported revenue 
of £8.3m, a trading profit of £1.0m and 
diluted adjusted EPS of 2.29p. In 2010 
we have reported revenue of £22.0m,  
a trading profit of £3.5m and diluted 
adjusted EPS of 6.31p. This represents  
a compound growth in revenue of 39% 
per annum over the period, 50% in 
trading profits and 40% in diluted 
adjusted EPS.
In 2006, we were a business focused 
mainly on the Defence and Maritime 
markets, having relatively little overseas 
presence, little Healthcare market 
penetration and using an operating 
model which was based upon a small 
number of large licence transactions 
followed by bespoke, complex, 
services projects. 
We are now a business well established 
in three distinct customer markets, 
Healthcare, Defence and Maritime, of 
which Healthcare in 2010 represented 
some 67% of our revenue. Our customer 
numbers have grown from less than 100 
in 2007 to over 600 in 2010. We are now 
a business with significant and growing 
overseas customers and operations and 
have established a financial model that 
is accelerating the proportion of repeat 
revenues from our broad and growing 
customer base.
Allied with continued disciplined 
management practices, this breadth of 
business operations provides Allocate 
with not only a wide range of future 
opportunities, but also with a cushion 
should a single market or territory face 
economic challenges in the future.
I was also pleased to welcome Chris 
Gale to the position of CFO this year. 
Chris’ appointment comes at a time 
when Allocate has begun its 
international expansion, following  
the recent acquisition of Time Care. 
Chris brings a wealth of experience 
transacting deals in Europe and North 
America and he has held a number of 
senior financial roles in international 
public companies within the IT industry. 
Our results for the 2010 financial year 
were excellent and the outlook for  
the 2011 financial year is for further 
progress. Whilst management has 
established firm foundations for 
continuing growth across its three 
vertical markets, Allocate’s largest 
market remains the NHS in the UK. 
We note the recently issued 
government White Paper on the NHS 
and continue to seek further clarity over 
the government’s plans as they are 
published. However, based on the 
information made available to date, 
whilst a number of questions remain 
open with respect to the structure of 
the procurement authorities within the 
NHS, we believe that demand for our 
products will continue as they represent 
compelling value, particularly when 
finances are tight. We will seek to work 
with whichever new organisations are  Allocate Software plc
Annual Report and Accounts 2010
05
granted responsibility for procurement 
in the NHS, as and when such changes 
are implemented, and we remain 
confident of continuing to expand  
our business. 
During the year we have made two 
successful acquisitions, of Time Care 
and Dynamic Change, and we  
continue to seek further investment 
opportunities to further enhance 
shareholder value. Despite the global 
economic climate, the Directors believe 
the Company is well positioned for 
another successful year.
I would like to thank our customers  
and partners for their business, their 
commitment to the Allocate products 
and their engagement with the 
Allocate vision. Finally, I would like to 
recognise and thank the Company’s 
employees for another year of hard 
work and dedication in support of the 
Company’s success.
Terry Osborne
Chairman
4 August 2010
“If tangible savings identified so far are replicated 
across the organisation, and there is no reason to 
suggest that this would not be the case, it would 
mean we exceed our forecasted savings of £2 million 
over a three year period.” 
Lynda Bicknell, 
HR Manager,  
Southampton City PCT
Case study: 06
Allocate Software plc
Annual Report and Accounts 2010
Chief executive’s review
Business review
Ian Bowles 
Chief Executive Officer
We have  
significant 
opportunities  
for growth in  
all three of  
our current  
vertical market 
sectors
Well positioned for future growth
Strategy
Customer Satisfaction
Deliver the highest quality •	
product and services to our 
customers
Work to ensure every customer •	
is a reference
Strong independent user group •	
Allocate Employees
Continue to attract and retain •	
the very best talent who are 
valued and a key part of our 
success and growth
Focus on Multiple Growth 
Drivers/Opportunities
Maximise penetration of •	
existing vertical markets
Maximising customer value by •	
delivery of multiple applications 
International expansion in •	
Healthcare 
Appropriately judged •	
acquisitions to support the 
strategy
Consideration of additional •	
vertical market sectors
Results
Revenue in the financial year was 
£22.0m (2009: £15.8m), an increase over 
last year of 39%. Trading profit for the 
year, before adjustments for share-
based payments and amortisation of 
intangible assets, was £3.49m (2009: 
£2.53m), an increase over last year of 
38%. The resulting trading profit margin 
was 15.9% (2009: 16.05%), consistent 
with the previous year. Diluted adjusted 
EPS (excluding amortisation of 
intangibles, share-based payments and 
the deferred tax adjustment) increased 
by 18% to 6.31p (2009: 5.36p). 
Licence revenue grew by 22% to £9.3m 
(2009: £7.6m), while Services and 
support revenue grew by 56% to £12.5m 
(2009: £8.0m). By sector, Healthcare 
revenue in the period increased by  
33% to £14.8m (2009: £11.1m), reflecting 
not only the Company’s continued 
partnership with the NHS but also the 
impact of the Time Care and Dynamic 
Change acquisitions. Defence revenues 
grew by 50% to £4.5m (2009: £3.0m), 
principally due to the large order from 
the Australian Army. Maritime revenues 
grew by 12% to £1.8m (2009: £1.6m). 
Organic revenues (excluding the 
acquisitions of Time Care and Dynamic 
Change) grew by 21% to £19.1m  
(2009: £15.8m) during the year. Selling 
and operational expenses in the 
financial year increased from £10.7m  
to £14.8m. This planned increase 
reflects continued investments in all of 
our functional lines of business as well  
as the impact of the acquisitions of 
Time Care and Dynamic Change.
The breadth of the Company’s markets now 
provide a wide range of opportunities Allocate Software plc
Annual Report and Accounts 2010
07
Well positioned for future growth
Administrative expenses in the financial 
year were £3.7m (2009: £2.5m), the 
planned increase reflecting additional 
costs arising as a result principally of  
the acquisitions of Time Care and 
Dynamic Change.
Operating cash flows during the 
financial year were £4.9m (2009: £1.8m), 
reflecting a significant growth in profits 
over last year in addition to improved 
management of working capital.
Net cash balances at the year-end were 
£2.9m (2009: £3.7m). This reflects:
£3.3m cash expended to part fund •	
the acquisitions of Time Care and 
Dynamic Change. 
A new £2.0m facility taken on  •	
to part fund the acquisition of  
Dynamic Change. 
An increase in debtors of £2.8m •	
reflecting increased sales activity  
in the year. 
An increase in trade, other payables •	
and deferred revenue of £5.9m, 
reflecting new support contracts  
and consultancy services pre-paid  
by customers.
Principal accomplishments
Financial year 2010 has been another 
record year for Allocate. Compound 
growth per annum over the past four 
years has been:
Revenue  39%
Trading profit 50%
Diluted, adjusted EPS 40%
In addition to the Company’s record 
financial results, a number of major 
achievements were also accomplished 
during the past year.
We achieved significant success in all •	
three of our vertical markets during 
2010 growing our Healthcare revenue 
by 33%, Defence revenue by 50% 
and Maritime revenue by 12%.  
Allocate now has a customer base  •	
of 353 NHS Trusts across the UK.  
This demonstrates the continuing 
recognition by our customers of the 
value of our products and services. 
40 NHS Trusts became new •	
Healthroster customers this year.  
In addition, 20 NHS Trusts became 
new customers for our Bank Staff 
Management Solution (BSMS Trinity). 
The Company reported on 31 May •	
2010 that it had been selected as 
the preferred supplier by the State 
Government of New South Wales, 
Australia for a major contract worth 
up to a potential value of A$10m 
(approximately £5.5m at current 
exchange rates) which will start to 
be delivered during the 2011 
financial year. 
The Company also reported that it •	
had won a significant Defence deal 
for the Australian Army valued at 
£2m of licence revenue. 
The acquisition of Time Care in •	
Sweden in December 2009 
establishes a further foundation for 
our strategy of international growth. 
Time Care is a well established, 
growing and profitable business that 
has made great strides in the 
Swedish Healthcare market and 
currently has 58 Swedish hospitals  
as customers. 
The acquisition of Dynamic Change •	
in May 2010 further strengthens  
our strategic position as it brings 
Allocate into the compliance and 
regulatory market, a market closely 
allied to our core market of workforce 
optimisation. In addition, this 
acquisition makes available a new 
Software-as-a-Service (“SaaS”) 
delivery model to Allocate’s large 
customer base.
Acquisitions
We are satisfied with our two major 
acquisitions during the year, Time Care 
and Dynamic Change. Additionally,  
we are pleased with the positive results 
we continue to see from the prior year 
acquisitions of Key ITS and Baum Hart 
Partners.
Time Care is a leading Swedish-based 
provider of workforce management 
software, with a strong focus on the 
Healthcare market. The acquisition of 
Time Care has provided Allocate with  
a strong geographic footprint in the 
Nordic region, particularly in Sweden, 
where Time Care has customer 
relationships with some 58 hospitals  
and 110 of Sweden’s 290 municipalities. 
As a result of this acquisition, Allocate  
is now one of the leading providers of 
workforce management software for  
the Healthcare sector in Europe. 
“Cooperation between the Royal Australian Navy and 
Allocate Software has been outstanding.  We are on course 
to implement one of the most far reaching, cost effective 
capability management programmes to date.  It will have 
material benefits to all Naval personnel and has the potential to 
improve retention in key areas at time of increased operational 
tempo, while reducing costs.”  
Director Navy Personnel Information Systems Management,  
Royal Australian Navy
Case study: 08
Allocate Software plc
Annual Report and Accounts 2010
Chief Executive’s review continued
Business review
The international expansion of our Healthcare business  
is proceeding well and as of today we have Healthcare 
customers in Australia, Malaysia, Sweden and New Zealand
Expanding our international footprint
Dynamic Change, a UK-based software-
as-a-service (“SaaS”) provider of 
regulatory compliance, corporate 
governance, risk and performance 
management for the UK Healthcare 
market was acquired in May 2010. 
Dynamic Change has developed its  
SaaS software platform that is used by  
its customers to monitor and manage 
regulatory compliance, corporate 
governance, business objectives, risks 
and controls, performance indicators 
and financial targets. Dynamic Change 
generates over 98% of revenues from  
the Healthcare sector with approximately 
70% of revenues contractually recurring 
from subscriptions. Dynamic Change 
currently has 121 NHS Trusts as 
customers.
Both acquisitions continue to grow their 
business and the task of integrating the 
companies into Allocate is proceeding 
in line with management plans.
Strategy
This year’s very strong results validate 
the strategy that the Board adopted  
in 2007. 
It is our belief that this strategy remains 
appropriate for the next phase of our 
growth. Looking forward we will 
continue to focus on the key elements 
of the strategy that have proven so 
successful during the last few years.
Focus on customer success
The success of our customers is critical 
to our success and future plans. 
We believe it is important that each of 
our customers achieve demonstrable 
financial return from the deployment  
of our applications, justifying their 
investment and allowing them to be a 
reference for prospective customers 
facing similar challenges. Our growing 
and influential UK and overseas 
customer base helped us achieve 
significant international success during 
the year, supporting our efforts to win 
new business in New Zealand and 
Australia. In addition, 40 NHS Trusts 
independently selected Healthroster 
after competitive public tenders during 
this financial year.
Our strong and independent User 
Group attracted over 180 NHS 
professionals, as well as representatives 
from the private Healthcare sector, to 
this year’s annual meeting providing 
fresh input to the development of 
product enhancements and future 
product direction.
Retention and attraction of the  
best talent
The domain expertise and operational 
experience of various members of the 
team provide a significant competitive 
advantage to Allocate when engaging 
with customers and prospects alike. It is 
therefore important for our continued 
growth that we retain and recruit the 
very best talent available to us.
As well as record financial results for 
four consecutive years, we have seen 
growth in our headcount with the result 
that today the Allocate team consists  
of over 245 professionals supporting 
customers across five continents. 
Healthcare: Developing a broader 
applications portfolio.
During the 2010 financial year we 
launched two additional applications, 
Doctor Rostering and e-Expenses  
which deliver additional value to  
our customers. 
All four of our acquisitions in the last 
two years have supported our strategy 
of offering a broader set of applications  Allocate Software plc
Annual Report and Accounts 2010
09
Expanding our international footprint
to our Healthcare customers. However, 
it remains significant that a material 
proportion of our NHS customer base, 
some two thirds, have purchased only 
one of our products and therefore our 
existing customers remain an avenue  
of significant growth potential. The 
Dynamic Change acquisition also 
brought a new SaaS delivery 
methodology to our offerings which  
will over time enable us to deliver 
applications more cost effectively for 
customers who do not wish to install 
and support applications within their 
own infrastructure. This is a critical 
consideration given the financial 
challenges being faced by Healthcare 
organisations around the world.
During the current financial year we  
will launch additional complementary 
applications developed in conjunction 
with our Healthcare customers.
Focus on multiple growth 
opportunities 
Maximise penetration of existing •	
vertical markets
Augment customer value by delivery •	
of multiple applications 
International expansion in Healthcare •	
Appropriately judged acquisitions to •	
support the strategy
Consideration of additional vertical •	
market sectors
We have significant opportunities for 
growth in all three of our current vertical 
market sectors. In particular, there is a 
considerable cross-sell opportunity 
within our Healthcare customer base as 
we expand the applications portfolio. 
Additionally, by broadening our 
applications portfolio we can deliver 
more significant value to each customer 
and deepen the account relationship. 
As an example over 115 NHS Trusts now 
have more than one of our applications. 
As noted above, this provides a 
significant market opportunity for 
further product sales.
Interestingly, elements of applications 
developed for Healthcare have 
applicability in other verticals; as an 
example, our Healthcare Rostering 
application has recently been ported  
in to the Maritime Suite.
The international expansion of our 
Healthcare business is proceeding well 
and as of today we have Healthcare 
customers in New Zealand, Australia, 
Malaysia and Sweden.
Importantly, the Company reported on 
31 May 2010 that it had been selected 
as the preferred supplier by the State 
Government of New South Wales, 
Australia to implement a State-wide 
rostering project. The agreement is  
to provide our software to roster the 
90,000 nurses and other Healthcare 
professionals throughout the State of 
New South Wales. As a result, during 
the current fiscal year we will look to 
increase our investment in Asia Pacific 
and specifically Australia as we develop 
additional business in the region.
Markets 
We will continue to focus on our three 
chosen markets of Healthcare, Defence 
and Maritime. However we will 
continue to investigate additional 
market segments that may further 
strengthen the long term growth 
prospects of the business.
Healthcare 
Healthcare is our largest and fastest 
growing market sector, accounting for 
67% of total revenues in 2010. 
The recent Government White Paper, 
‘Liberating the NHS’, outlines planned 
reforms across the NHS, our domestic 
Healthcare market and offers additional 
opportunities to assist in the delivery of 
the benefits anticipated by the reforms. 
The creation of new structures, the 
requirement for the provision of 
aggregated and detailed data analysis 
fits with the vision we have been 
pursuing; that of providing a broader 
portfolio of complementary 
applications. 
Our e-Rostering and temporary staff 
applications (Healthroster and BSMS) 
are delivering referenceable results that 
show reductions in Healthcare costs 
and an improvement in both standards 
of care and patients outcomes. These 
are the key focal points of the White 
Paper and will remain at the heart of our 
commercial offering to our Healthcare 
customers. We anticipate that they  
will underpin prospects for further 
expansion in the years ahead. In 
addition, the Governance application 
acquired with Dynamic Change 
broadens our applications portfolio  
and offers further growth opportunities 
when considered in relation to the 
systems alignment, focus on patient 
outcomes and continued quality focus 
that is envisaged in the ‘Liberating the 
NHS’ document. We will continue to 
seek to expand our Healthcare portfolio 
into adjacent areas.
Case study:
“After an extensive evaluation we selected Allocate  
Software’s Maritime Suite because of their proven  
expertise and implementation experience in large,  
complex, global organisations.”
Len Webster, 
IMS Engagement Manager,  
HR Systems, Acergy 
A leader in Seabed-to-Surface  
Engineering and Construction 10
Allocate Software plc
Annual Report and Accounts 2010
Chief Executive’s review continued
Business review
Our growing customer base will be fertile territory 
for us as we cross-sell our new applications
Building on our strong customer base
In the UK we have a substantial customer 
base, which extends to 353 NHS Trusts, 
and one private group. Worldwide we 
have 417 Healthcare customers.
It is our belief that we will continue to 
grow our markets within the NHS, as 
well as the private and international 
Healthcare sectors for our Health Suite 
applications. The acquisition of 
Dynamic Change broadens our 
application portfolio and affords a 
significant, opportunity for the cross- 
sell of both Allocate’s and Dynamic 
Change’s applications into the 
respective customer bases. 
At 31 May 2010, Healthroster was 
installed in 119 NHS Trusts in England 
and Wales. This is more than triple the 
number of customers we had two years 
ago (2008: 38) and it represents 29% of 
the total number of Acute, Mental Health 
and Primary Care Trusts in England  
and Wales. In addition, Healthroster is 
installed in four international Healthcare 
organisations. BSMS, our temporary 
staffing solution which empowers NHS 
Trusts by automating the planning of 
bank and agency staff and reporting 
across hospitals, is now installed in  
187 NHS Trusts. 
Defence 
The Defence sector is our heritage  
and continues to be a focus for the 
Company. During the year there were 
several significant developments in  
the use of MAPS Defence Suite by  
our British and overseas customers. 
Defence revenues were £4.5m, 
representing 20% of revenues in 2010.
Most significantly building on our work 
with the Royal Australian Navy, Allocate 
has been contracted to deliver Defence 
Suite capabilities across the entire 
Australian Army. The Australian Army 
agreement represents the biggest 
single contract award for our Defence 
applications.
Our longstanding relationship with the 
British Army continues to contribute 
to the overall success of the business 
and during the fiscal year the Royal 
Navy began using part of our 
applications suite. The Royal Fleet 
Auxiliary successfully migrated to  
the latest version of the Defence 
Suite and deployed a new application 
based on development work in our 
Healthcare vertical. 
In Europe, NATO has successfully 
deployed versions of the Allocate 
Defence Suite now operating in the  
J1 Human Resources Branch; the J5 
Force Generation cell, and the newly 
formed and mission critical Special 
Forces HQ. Recent enhancements to 
the NATO Special Forces installation 
have seen the application deployed 
in-theatre to Afghanistan.
Maritime 
Our Maritime activities continue to 
contribute to the overall success of 
the Company, and at £1.8m, they 
represented 8% of the total revenue  
in 2010. 
The world’s largest family entertainment 
company has gone live with its shore 
side deployment of the maritime 
application. We are actively engaged 
with this customer to deploy the 
application ship side on its fleet of 
cruise liners.
The new Onboard product is being 
shipped this month to CMA-CGM, who 
will be the first large scale users. It will 
be installed on their container fleet of 
some 100 vessels and will integrate with 
their existing MAPS Maritime Suite for 
crew scheduling.
Maersk Oil Qatar AS (“MOQ”) is 
expected to go live with our MAPS 
Maritime Suite early this current 
financial year. MOQ selected MAPS 
Maritime Suite to manage its offshore 
personnel across all production 
operations including platforms, drilling 
rigs, offshore accommodation vessels 
and storage vessels. The solution  
will improve effectiveness, streamline 
tasks and integrate personnel data to 
optimise performance of offshore 
operations ensuring compliance with 
health and safety policies. MAPS 
Maritime Suite will replace MOQ’s 
multiple sources of personnel 
movement information with a single 
integrated system for both shore  
side and offshore operations for the 
scheduling of personnel. It will allow 
managers to have a consolidated, 
real-time accurate view of personnel on 
board, accommodation and lifeboat 
availability on any offshore location.
Partnerships
Our partner strategy has delivered 
success with our major partners,  
PwC and CSC co-operating with  
the Company on two major contracts 
during the fiscal year. Both partners  
were independently chosen as the 
Systems Integrator of choice to  
support the deployment of our 
applications by the Department of 
Health in New South Wales and the 
Australian Army respectively.  Allocate Software plc
Annual Report and Accounts 2010
11
Building on our strong customer base
We anticipate that these partnerships 
will continue to deliver significant 
benefits to the Company over the 
coming years, helping us accelerate the 
broader deployment of our applications 
and assisting us to enter new 
geographical territories. 
We will continue to seek additional 
strategic partnerships that will enable  
us to deliver incremental value to  
our customers.
Development
To sustain our market leading position 
and to help ensure future growth 
prospects we continue to invest in the 
future. We embarked upon a project 
two years ago code named project 
“Columbus”. The project will see the 
complete redevelopment of our core 
applications from the ground up, 
delivering improved performance  
and enhanced functionality. 
The design architecture will also 
become the platform for all future 
applications development. Additionally, 
it will allow us to merge the applications 
we acquired with the purchase of  
Time Care with Healthroster to increase 
still further the functional advantage 
delivered to Healthcare customers 
around the world. Co-operative sharing 
of work with the Swedish development 
team has already begun.
The first application to be delivered  
on the new architecture will be 
Healthroster. An early alpha version  
of the application was recently 
demonstrated at the user group 
conference to tumultuous applause 
from the users. 
Our Defence suite will be the second 
application to benefit from the new 
architecture with development work due 
to start during the current fiscal year. 
Outlook
As we begin the new financial year, 
which will be my fourth year as CEO  
of Allocate Software, I am confident  
of our prospects. The breadth of the 
Company’s markets now provide a  
wide range of opportunities as well  
as reducing the Company’s historical 
dependence on a small number of  
high value transactions. Our growing 
customer base will be fertile territory for 
us as we cross-sell our new applications, 
both those developed within Allocate 
and those acquired.
We have experienced revenue growth 
of 39% CAGR for the last four years with 
trading profit growth of over 50% on the 
same basis during a period of sustained 
economic uncertainty. The opportunity 
for increasing sales in our Healthcare 
business and the continued 
engagement in the Defence and 
Maritime market sectors will combine  
to maintain our progress. 
We will continue to win new customers, 
broaden our relationships with existing 
customers and invest in our growth 
markets and applications whilst 
producing results that will grow 
shareholder value.
Ian Bowles
Chief Executive Officer
4 August 2010
Case study:
“We compared the data from one year before and one year 
after implementing Healthroster on the wards and we found 
we had already made savings of £600,000. With this in mind, 
we have projected savings of £1.2 million across all our 
wards. We believe the majority of these savings are due  
to Healthroster.”
Anne Bennett,  
Divisional Finance Manager,  
County Durham and Darlington NHS Foundation Trust 12
Allocate Software plc
Annual Report and Accounts 2010
Board of Directors
Business review
Allen Swan 
Business Development 
Director
Allen joined as Business 
Development Director in June 
2008, having previously acted as 
an adviser to the Company. Prior 
to his appointment, Allen served 
as International President for 
Chordiant Software Inc, 
International President of Prime 
Response Inc and was a founder 
member of Oracle UK, where  
he served as Sales Director  
both direct and non-direct for  
12 years. 
Terry Osborne 
Executive Chairman
Terry joined as the Company’s 
Chairman in October 2005. He 
enjoyed a distinguished career 
with IBM over the period 1961  
to 1987 , where he held vice 
president positions in Europe 
and the USA. He was also a 
Director of IBM UK. In 1987 , he 
founded SSA Ltd, a technology 
company, and was President of 
SSA Inc for the period 1994 to 
1996. Mr Osborne has served on 
the boards of several technology 
companies in both the USA and 
Europe, including Chairman of 
Dr Solomon’s Group plc, Prime 
Response Inc and Eyretel plc. He 
was also a Director of Mapics Inc, 
Dendrite International Inc and 
Witness Inc.
Chris Gale 
Chief Financial Officer
Chris has held senior financial 
roles in international public 
companies within the IT industry 
including: Apple Inc (in USA & 
European HQ), Cooper and 
Chyan Technology Inc (USA), 
Cadence Design Systems (USA 
& Europe), Interwoven and 
Clearswift (UK). In his most 
recent corporate role, Chris was 
CFO and acting CEO of GFI, a 
global software and hosted 
solutions company. 
Ian Bowles 
Chief Executive Officer
Ian joined as Chief Executive 
Officer in May 2007 . Previously 
he was Chief Operating Officer 
at Clearswift Limited, a leading 
e-mail content security company, 
where he was responsible for 
Worldwide Operations including 
sales and marketing in the UK, 
Europe, USA, Japan and Asia 
Pacific, as well as the company’s 
Professional Services, Customer 
Support and worldwide IT 
infrastructure. Prior to this  
he held senior positions at 
Interwoven Inc as Vice President 
EMEA, Chordiant Inc as Vice 
President International and 
Oracle UK as General Manager. Allocate Software plc
Annual Report and Accounts 2010
13
Front row (left to right)
Ian Bowles, Terry Osborne, Chris Gale.
Back row (left to right)
Allen Swan,  Ian Lang, Richard Morgan-Evans, Mark Loveland, 
Andrew Pringle.
Mark Loveland 
Non-Executive Director
Mark joined as a Non-Executive 
Director in April 2005. He is a 
graduate in jurisprudence from 
Oxford University and has had 
considerable experience in  
the support and development  
of technology companies. He 
has held positions within Rowe  
& Pitman and SG Warburg, 
including Head of UK 
Technology Research and 
Deputy Chairman of the  
Small and Mid-Cap Group,  
at Dresdner Kleinwort Benson 
where he was Head of European 
Technology Research, and at  
JP Morgan Investment Bank  
as Head of European IT Equity 
Research and Head of European 
Technology Strategy.
Richard Morgan-Evans 
Non-Executive Director
Richard joined the Company in 
June 2004 as Chief Operating 
Officer. He was appointed 
Group Managing Director in 
September 2004 and, in January 
2007 , he became a Non-
Executive Director. Richard has 
over 20 years international 
business experience at senior 
level, including appointments  
as President, Managing Director 
and CEO, in the European  
IT industry. He has particular 
expertise in international  
sales, partner development, 
consultancy, implementation 
services and product 
development. He has also 
specialised in managing large 
international contracts to 
successful completion.
Ian Lang 
Non-Executive Director
Ian joined as a Non-Executive 
Director in August 1998. He is  
a graduate in mathematics from 
Cambridge University. He has 
held senior roles in ICI in sales, 
marketing, logistics and 
corporate planning including 
portfolio management, risk 
assessment, acquisition and 
divestment. As General 
Manager of Information Systems 
for Zeneca Agrochemicals  
he was responsible for the 
re-engineering of the global 
supply chain using SAP and 
Oracle software.
He has provided high level 
business consultancy to BP , 
Pfizer and Mercedes-Benz.
Andrew Pringle 
Non-Executive Director
Andrew joined as a Non-
Executive Director in March 2004. 
Previously, he was Chief of Staff  
at the UK’s Permanent Joint 
Headquarters (“PJHQ”), 
responsible for the direction of  
all UK military operations jointly 
carried out by the three armed 
services (Army, Navy, Air Force). 
He retired in 2001 with the rank  
of Major General. Previously, 
Andrew had been commissioned 
into The Royal Green Jackets and 
commanded military operations 
at every level from Platoon to 
Division, both for the UK Army 
and for multi-national forces 
overseas. Andrew has served in 
the Ministry of Defence, the 
Assessments Staff of the Joint 
Intelligence Committee, and, 
while at P JHQ. 14
Allocate Software plc
Annual Report and Accounts 2010
Directors and their shareholdings
The Directors who served during the year and their interests in the shares of the company as recorded in the register of 
Directors’ interests were as follows:
 5p ordinary shares
        31 May 1 June 
        2010 2009
T H Osborne       50,000 50,000
I J Bowles       348,500 223,500
C D Gale       – –
A A Swann       1,119,000 1,119,000
J I Lang       746,437 746,437
M J S Loveland       1,550,000 1,525,000
R J Morgan-Evans       – –
A R D Pringle       7,000 7,000
S C Thorne (resigned 1 February 2010)       804,772 777,083
    
Under the provisions of Article 111 of the company’s Memorandum and Articles of Association Mr Bowles, Mr Lang, Mr Pringle 
and Mr Gale will retire by rotation at the next Annual General Meeting and, being eligible, offer themselves for re-election. 
Details of Directors’ interests in options to acquire shares of the company are set out in note 6 to the accounts.
Substantial shareholdings
At 31 May 2010 notification had been received of the following interests which exceed a 3% interest in the issued share capital of 
the company, in addition to those of the Directors referred to above.
         % of issued 
Name of holder         Number share capital
Herald Investment Management       13,721,477 22.42
Jupiter Asset Management       7,000,000 11.44
Gartmore Investment Management       6,569,641 10.74
Schroder Investment Management       4,200,000 6.86
BlackRock Investment Management (UK)       3,600,000 5.88
SVG Capital       3,600,000 5.88
CI Investments Inc       2,450,000 4.00
Relations with shareholders
The Group encourages two way communications with both institutional and private investors and responds promptly to queries 
received. All shareholders have at least twenty-one working days notice of the Annual General Meeting. The Directors and 
Committee Chairs are introduced and are available for questions at the Annual General Meeting. Every shareholder receives  
a full annual report each year-end. The preliminary and interim results are published by the Regulatory News Service and on  
the company’s website.
Care is exercised to ensure that any price sensitive information is released to all shareholders, institutional and private, at the 
same time in accordance with the Financial Services Authority’s requirements.
Report of the Directors
Governance Allocate Software plc
Annual Report and Accounts 2010
15
CORPORATE GOVERNANCE 
While, as an AIM listed company, there is no requirement to comply with the Combined Code and the Turnbull Guidance,  
the Board has applied the Code and the Guidance as it feels appropriate for a company of this size.
In applying the principle that the Board should maintain a sound system of internal control to safeguard shareholders’ 
investments and the Group’s assets, the Directors recognise that they have overall responsibility for ensuring that the Group 
maintains proper accounting records and a system of internal control to provide them with reasonable assurance regarding 
effective and efficient operations, internal financial control and compliance with laws and regulations. However, there are 
inherent limitations in any system of internal control and, accordingly, even the most effective system can provide only 
reasonable, and not absolute, assurance particularly against misstatement or loss.
As might be expected in a group of this size, a key control procedure during the year was the day to day supervision  
of the business by the Executive Directors.
Board responsibilities
The Board has adopted a formal schedule which sets out the various matters for which it is responsible and that are reserved  
to it. The Board meets regularly during the year and it met formally on six occasions during the period from 1 June 2009 to  
31 May 2010.
The Board is responsible for the overall strategy and direction of the Group and for approving acquisitions and disposals, 
management performance, major capital and development expenditure and significant financial matters. It monitors exposure 
to key business risks and reviews the strategic direction of the company and its subsidiaries, their annual budgets, their progress 
against those budgets and their development programmes. The Board also considers employee issues and key appointments.
The Board has established an Audit Committee, a Nomination Committee and a Remuneration Committee. Each Committee 
operates within defined terms of reference. The Audit, Nomination and Remuneration Committees comprise J I Lang,  
A R D Pringle and M J S Loveland, Non-Executive Directors. The Audit Committee is chaired by M J S Loveland, the  
Nomination Committee is chaired by A R D Pringle and the Remuneration Committee is chaired by J I Lang. The Audit 
Committee is required to meet at least twice a year and its primary responsibilities include monitoring internal controls, 
approving the Group’s accounting policies and reviewing the interim and annual reports. 
Clear management responsibilities have been determined for each subsidiary and division with authorisation limits and 
segregation of duties established for the operating functions of the Group. Financial reports are reported regularly to the  
Board with a comparison against budget. Towards the end of each financial year, appropriately detailed budgets for the 
following year are reviewed by the Board.
Financial risk management
The Company uses various financial instruments, which include loans, cash and other items such as trade debtors and  
trade creditors that arise directly from its operations. The main purpose of these financial instruments is to raise finance  
for the Company’s operations.
The existence of these financial instruments exposes the Company to a number of financial risks. These are currency risk, 
liquidity risk, interest rate risk and credit risk. The Directors review and agree policies for managing each of these risks and  
they are summarised below. These policies have remained unchanged from previous years.
Currency risk
The Company is exposed to translation and transaction foreign exchange risk. In relation to translation risk, so far as possible, 
the assets held in the foreign currency are matched to an appropriate level of borrowings or liabilities in the same currency. 
Approximately 35% (2009: 15%) of the Group’s sales are to customers overseas and in currencies other than UK sterling.  
The Company’s policy is to try to match the timing of all foreign currency transactions to eliminate, so far as possible,  
currency exposures. Foreign exchange differences on transactions relating to foreign currency assets and liabilities are  
taken to the profit and loss account of the Group. 
      Swedish Australian US MYR 
      Krona Dollars Dollars Ringgits 
Net foreign currency monetary asset      £000s £000s £000s £000s
2010     571 121 341 38
2009     nil nil 31 21 16
Allocate Software plc
Annual Report and Accounts 2010
Liquidity risk
The Company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest 
cash assets safely and profitably.
Short-term flexibility is supported by the availability of an overdraft facility.
Risk management
Given the small size of the company and the close involvement of the Executive Directors in all its activities, the Directors do not 
consider that an internal audit function is necessary.
The Board has identified the following key risks which are controlled as set out below:
Control over product quality and services delivery
In order to ensure the quality of its product and service delivery the Group has introduced a Quality Management System  
which is registered with the British Standard Institute as ISO 9001 compliant. The Board believes that this gives rise to the 
following benefits:
Policies and objectives are set by the Board •	
Greater understanding of the Group’s business processes •	
An improved understanding of customers’ requirements with a view to achieving customer satisfaction •	
Quicker and less complicated procedures for software implementation •	
A reduction in support calls •	
Improved transparency in the product development process •	
Future product upgrades are facilitated •	
Understanding how statutory and regulatory requirements impact on the Group and its customers •	
Liquidity
A cash forecast is prepared and updated regularly to monitor the Group’s short term cash position and to identify borrowing 
requirements if appropriate.
Monitoring of pipeline
The Board regularly reviews the status of outstanding proposals. This information is then taken into account in cash forecasting 
and in defining future marketing activity.
Cost control
All significant investment decisions, including capital expenditure, are considered by the Board for authorisation.  
Detailed management accounts are prepared, which compare the profit and loss account with budget, and significant  
variances are identified.
Key Performance Indicators
The following financial and non-financial KPI’s are some of the tools used by the Board and management to monitor the 
performance of the operating business within the Group:
Financial indicators
        2010 2009
Gross margin as a percentage of revenue       32.6% 32.2%
Operating profit as a percentage of revenue       6.0% 11.1%
Sales per employee       £127,700 £121,300
Operating profit* per employee       £20,300 £19,500
Debtors 90 days or over as a percentage of total debtors      2.2% 20.0%
*before amortisation of intangible assets, share-based payments and tax.
Non-financial indicators
The service operational KPI’s include: 
Customer satisfaction levels •	
Customer calls and the number of calls outstanding •	
Employee turnover •	
Report of the Directors continued
Governance Allocate Software plc
Annual Report and Accounts 2010
17
GOING CONCERN BASIS
After making enquiries, the Directors have formed a judgement, at the time of approving the accounts, that there is a 
reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. 
For this reason the Directors continue to adopt the going concern basis in preparing the accounts.
EMPLOYEES
During the year, the Group has continued to provide employees with relevant information and to seek their views on matters  
of common concern. Priority is given to ensuring that employees are aware of significant matters affecting the Group’s trading 
position and organisational changes, subject to Stock Exchange and other disclosure requirements.
It is the policy of the Group to support the employment of disabled employees where possible, both in recruitment and  
by retention of employees who become disabled while in the employment of the Group.
THE REMUNERATION COMMITTEE
The members of the Remuneration Committee, as detailed in this report, comprise three of the independent Non-Executive 
Directors. The Non-Executive Directors have no personal financial interest (other than as shareholders and option holders) in  
the matters to be decided. They have no conflicts of interest arising from cross-directorships and no day-to-day involvement  
in the running of the business. The Committee has access to professional advice.
The functions of the Committee are to determine and agree with the Board the framework or broad policy for the remuneration 
and conditions of employment of the Executive Directors. Within the terms of the agreed policy, the Remuneration Committee 
reviews the performance of the Executive Directors and determines their annual remuneration, bonus awards and awards of 
share options.
REMUNERATION POLICY
The Group’s policy relating to Directors’ remuneration, endorsed by the Remuneration Committee, is to provide appropriate 
remuneration, including share options, to attract, motivate and retain executives of the highest calibre.
In setting the remuneration policy, the Group has regard to factors including:
The actual and potential contribution of each Director •	
The competitive environment in which the Company operates •	
Bonus awards for the Executive Directors are made on the achievement of financial targets. In the year under review bonuses 
were paid to Directors under these arrangements as set out in note 6.
Grants of options to the Executive Directors are recommended by the Remuneration Committee, based on the Executive 
Directors’ performance.
The remuneration of the Non-Executive Directors is recommended by the Executive Directors and takes account of time spent 
on Committee matters, final determinations being made by the Board as a whole.
An explanation and details of Directors’ remuneration and share options is set out in note 6 to the accounts. 
LONG TERM INCENTIVES
There are three share option schemes in operation: an HMRC Approved Scheme (“the Approved Scheme”), a scheme which  
has not been approved by HMRC (“the Unapproved Scheme”) and an Enterprise Management Incentive Scheme (“the EMI 
Scheme”) which complies with the requirements of HMRC. The conditions for exercising options granted under these schemes 
are set out below.
Where mentioned, “EPS” means the pre-tax fully diluted earnings per share of the Company calculated on such basis as the 
Directors may reasonably specify from time to time.
Options granted prior to 18 September 2000
Options granted prior to 18 September 2000 can be exercised provided that there has been an average increase in earnings per 
share of the Group in the three year period prior to the date of exercise of not less than 5 per cent per annum above the 
increase in the Retail Price Index for the period.
Options granted on or after 18 September 2000 and before 15 December 2005
Options granted on or after 18 September 2000 and before 15 December 2005 may be exercised if the share price of the 
Company’s ordinary shares has increased at a rate of no less than 10% per annum compared with the share price at the date  
of the grant of the option over a defined measurement period. For the approved options the measurement period is three  
years from the date of the grant of the options.  18
Allocate Software plc
Annual Report and Accounts 2010
Report of the Directors continued
Governance
For the unapproved and EMI options the measurement period is two years from the date of the grant of the options. In both 
cases, if the performance criteria are not initially met, then the measurement period is extended in three monthly intervals until 
such time as the criteria are met, or until ten years from the date of the grant whereupon the options will lapse. The approved 
options vest immediately on exercise, while the unapproved and EMI options vest in eight equal intervals quarterly from the 
date of exercise.
Options granted on or after 15 December 2005 and before 31 May 2006
Options granted on or after 15 December 2005 and before 31 May 2006 may be exercised if the following EPS targets  
(together the “Primary Condition”) are achieved.
Primary Condition
EPS target Financial Year
2.2 pence or more  2005/6
3.5 pence or more 2006/7
5.5 pence or more 2007/8
Secondary Condition
EPS target Financial Year
3.8 pence or more 2007/8
5.5 pence or more 2008/9
For each Primary EPS target achieved, subject to the rules of the Scheme, an Option may be exercised as to one third on or after 
the third anniversary of the Date of Grant. If any of the EPS targets within the Primary Condition is not achieved (i.e. the option  
is not exercisable in full following the third anniversary of the grant date) an option holder may choose not to exercise such 
portion (if any) of his option that would otherwise become exercisable and wait until the determination of EPS for financial years 
following the Performance Period. In such case, subject to the rules of the Scheme, an unexercised option shall be exercisable  
in full on or after such date as :
the EPS for the most recently completed Financial Year is at least 5.5 pence; and (a) 
the sum of the EPS figures for each of the Financial Years within the Performance Period and such subsequent completed (b) 
Financial Year(s) is at least 11.2 pence.
In the event that:
the EPS targets within the Primary Condition for the 2005/6 and 2006/7 Financial Years are met, but the EPS target for the (a) 
2007/8 Financial Year is not; and
the sum of EPS figures for each of the Financial Years within the Performance Period is at least 10.08 pence; and (b) 
EPS for the 2007/8 Financial Year is at least 4.9 pence; (c) 
then, subject to the rules of the Scheme, the third of an Option that did not become exercisable in accordance with Clause 2 
above may at the election of the Option Holder be exercised on or after the third anniversary of the Grant Date to the extent 
determined by the following.
For EPS of between 4.9 pence and 5.5 pence for the 2007/8 Financial Year, in addition to the two thirds of the Option becoming 
exercisable for the satisfaction of the 2005/6 and 2006/7 EPS performance target, up to a further sixth of the Option may be 
exercised, pro rata to the point at which EPS for the 2007/8 Financial Year falls between 4.9 pence and 5.5 pence.
For aggregate EPS for each of the Financial Years within the Performance Period of between 10.08 pence and 11.2 pence, in 
addition to the two thirds of the Option becoming exercisable for the satisfaction of the EPS targets set for the 2005/6 and 
2006/7 Financial Years, up to a further sixth of the Option may be exercised, pro rata to the point at which the sum of the EPS 
figures for each of the Financial Years within the Performance Period falls between 10.08 pence and 11.2 pence.
In the event that the Directors determine that the EPS targets within the Primary Condition are not met but the EPS targets 
within the Secondary Condition are met, then, subject to the Rules of the Scheme, two-thirds of the Option shall become 
exercisable immediately and the one-third of the Option that has not yet become exercisable may be exercised when the EPS 
for the most recently completed Financial Year is at least 5.5 pence and the sum of the EPS figures for each of the Financial Years 
within the Performance Period and such subsequent completed Financial Year(s) is at least 11.2 pence.
  Allocate Software plc
Annual Report and Accounts 2010
19
Options granted on or after 1 June 2006 and before 31 May 2007 
Options granted on or after 1 June 2006 and before 31 May 2007 may be exercised if the following EPS targets (together the 
“Primary Condition”) are achieved.
EPS target Financial Year
3.5 pence or more 2006/7
5.5 pence or more 2007/8
6.1 pence or more 2008/9
For each EPS target achieved, subject to the rules of the Scheme, an Option may be exercised as to one third on or after the 
third anniversary of the Date of Grant. If any of the EPS targets within the Primary Condition is not achieved (i.e. the option is not 
exercisable in full following the third anniversary of the grant date) an option holder may choose not to exercise such portion (if 
any) of his option that would otherwise become exercisable and wait until the determination of EPS for financial years following 
the Performance Period. In such case, subject to the rules of the Scheme, an unexercised option shall be exercisable in full on or 
after such date as:
the EPS for the most recently completed Financial Year is at least 6.1 pence; and (a) 
the sum of the EPS figures for each of the Financial Years within the Performance Period and such subsequent completed (b) 
Financial Year(s) is at least 15.1 pence.
In the event that:
the EPS targets within the Primary Condition for the 2006/7 and 2007/8 Financial Years are met, but the EPS target for the 2008/9 
Financial Year is not; and
the sum of EPS figures for each of the Financial Years within the Performance Period is at least 13.59 pence; and (a) 
EPS for the 2008/9 Financial Year is at least 5.5 pence; (b) 
then, subject to the rules of the Scheme, the third of an Option that did not become exercisable in accordance with Clause 2 
above may at the election of the Option Holder be exercised on or after the third anniversary of the Grant Date to the extent 
determined by the following.
For EPS of between 5.5 pence and 6.1 pence for the 2008/9 Financial Year, in addition to the two thirds of the Option becoming 
exercisable for the satisfaction of the 2006/7 and 2007/8 EPS performance target, up to a further sixth of the Option may be 
exercised, pro rata to the point at which EPS for the 2008/9 Financial Year falls between 5.5 pence and 6.1 pence.
For aggregate EPS for each of the financial years within the performance period of between 13.59 pence and 15.1 pence, in 
addition to the two thirds of the option becoming exercisable for the satisfaction of the EPS targets set for the 2006/7 and 
2007/8 financial years, up to a further sixth of the option may be exercised, pro rata to the point at which the sum of the EPS 
figures for each of the financial years within the performance period falls between 13.59 pence and 15.1 pence.
 
Options granted on or after 1 June 2007 and before 31 May 2008
Options granted on or after 1 June 2007 and before 31 May 2008 may be exercised if the following EPS targets (together the 
“Primary Condition”) are achieved.
EPS target Financial Year
3.8 pence or more 2007/8
5.5 pence or more 2008/9
6.1 pence or more 2009/10
For each EPS target achieved, subject to the rules of the Scheme, an Option may be exercised as to one third on or after the 
third anniversary of the Date of Grant. If any of the EPS targets within the Primary Condition is not achieved (i.e. the option is not 
exercisable in full following the third anniversary of the grant date) an option holder may choose not to exercise such portion (if 
any) of his option that would otherwise become exercisable and wait until the determination of EPS for financial years following 
the Performance Period. In such case, subject to the rules of the Scheme, an unexercised option shall be exercisable in full on or 
after such date as:
the EPS for the most recently completed Financial Year is at least 6.1 pence; and (a) 
the sum of the EPS figures for each of the Financial Years within the Performance Period and such subsequent completed (b) 
Financial Year(s) is at least 15.4 pence. 20
Allocate Software plc
Annual Report and Accounts 2010
Options granted on or after 1 June 2008 and before 31 May 2009
Options granted on or after 1 June 2008 and before 31 May 2009 may be exercised if the following EPS targets (together the 
“Primary Condition”) are achieved.
EPS target Financial Year
5.5 pence or more 2008/9
6.1 pence or more 2009/10
6.6 pence or more 2010/11
For each EPS target achieved, subject to the rules of the Scheme, an Option may be exercised as to one third on or after the 
third anniversary of the Date of Grant. If any of the EPS targets within the Primary Condition is not achieved (i.e. the option is not 
exercisable in full following the third anniversary of the grant date) an option holder may choose not to exercise such portion (if 
any) of his option that would otherwise become exercisable and wait until the determination of EPS for financial years following 
the Performance Period. In such case, subject to the rules of the Scheme, an unexercised option shall be exercisable in full on or 
after such date as:
the EPS for the most recently completed Financial Year is at least 6.6 pence; and (a) 
the sum of the EPS figures for each of the Financial Years within the Performance Period and such subsequent completed (b) 
Financial Year(s) is at least 18.2 pence.
Options granted on or after 1 June 2009 and before 31 May 2010
Options granted on or after 1 June 2009 and before 31 May 2010 may be exercised if the following EPS targets (together the 
“Primary Condition”) are achieved.
EPS target Financial Year
6.1 pence or more 2009/10
6.6 pence or more 2010/11
7.3 pence or more 2011/12
For each EPS target achieved, subject to the rules of the Scheme, an Option may be exercised as to one third on or after the 
third anniversary of the Date of Grant. If any of the EPS targets within the Primary Condition is not achieved (i.e. the option is not 
exercisable in full following the third anniversary of the grant date) an option holder may choose not to exercise such portion (if 
any) of his option that would otherwise become exercisable and wait until the determination of EPS for financial years following 
the Performance Period. In such case, subject to the rules of the Scheme, an unexercised option shall be exercisable in full on or 
after such date as:
the EPS for the most recently completed Financial Year is at least 7.3 pence; and (a) 
the sum of the EPS figures for each of the Financial Years within the Performance Period and such subsequent completed (b) 
Financial Year(s) is at least 20.0 pence.
OTHER MATTERS
Mr I J Bowles has a service agreement which is terminable upon twelve months notice. All other Directors have service contracts 
which are terminable upon six months notice. There is no contractual provision for compensation for early termination of any of 
the Directors’ contracts.
The Non-Executive Directors retire by rotation in the same manner as the Executive Directors, in accordance with the company’s 
Articles of Association.
T H Osborne (Executive Chairman), J I Lang, A R D Pringle, M J S Loveland and R J Morgan-Evans (Non-Executive Directors) 
monitor the actions of management and the Group’s performance. Other than their shareholdings, options and remuneration 
they have no other relationship with the Company or its subsidiaries. Together, they bring a complementary set of skills and 
experience to the Board.
Communication with shareholders on remuneration matters is largely undertaken by way of this report and the detailed 
disclosure of remuneration provided by notes 5 and 6 to the accounts.
Report of the Directors continued
Governance Allocate Software plc
Annual Report and Accounts 2010
21
Executive Directors are permitted to accept external directorships only with the company’s prior permission and provided their 
ability to act in the best interest of the Group is not impaired.
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law 
and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have 
elected to prepare financial statements in accordance with International Financial Reporting Standards as adopted by the 
European Union (IFRS’s). The financial statements are required by law to give a true and fair view of the state of affairs of the 
Group and Parent Company and of the profit or loss of the Group for that period. In preparing these financial statements, the 
Directors are required to:
Select suitable accounting policies and then apply them consistently •	
Make judgments and estimates that are reasonable and prudent •	
State whether IFRS’s 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 disclose with reasonable accuracy at any time the 
financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 
2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the 
prevention and detection of fraud and other irregularities.
In so far as each of the Directors is aware:
There is no relevant audit information of which the Company’s auditors are unaware; and •	
The Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information •	
and to establish that the auditors are 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. 
PAYMENT OF CREDITORS
The Group does not follow any published code or standard on payment practice in respect of any of its suppliers. The Group’s 
policy in respect of the majority of its trade creditors is to negotiate terms and conditions with the suppliers and, provided the 
suppliers comply with these, payments are made in accordance with the agreed terms and conditions. Where payment terms 
are not specifically agreed, suppliers are paid in accordance with local commercial practice. The average number of day’s credit 
for the year is 24 days (2009: 24 days).
AUDITORS
Grant Thornton UK LLP offer themselves for reappointment as auditors in accordance with section 489 of the Companies  
Act 2006.
BY ORDER OF THE BOARD
C D Gale
Company Secretary
3 August 2010 22
Allocate Software plc
Annual Report and Accounts 2010
Financial statements
Independent Auditor’s Report to the 
Members of Allocate Software plc
We have audited the financial statements of Allocate Software plc for the year ended 31 May 2010, which comprise the 
consolidated income statement, the consolidated statement of comprehensive income, the consolidated and company 
statements of financial position, the consolidated and company statements of changes in equity, the consolidated and 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 (IFRS’s) 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 Auditors
As explained more fully in the Directors’ Responsibilities Statement set out on page 21, 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 
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 APB’s website at www.frc.org.uk/apb/scope/UKNP .
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 May 2010 and of the Group’s profit for the year then ended; 
The Group financial statements have been properly prepared in accordance with IFRS as adopted by the European Union; •	
The Parent Company financial statements have been properly prepared in accordance with IFRS 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 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. •	
Marc Summers
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
3 August 2010  Allocate Software plc
Annual Report and Accounts 2010
23
Financial statements
Principal accounting policies
Basis of preparation
The Group financial statements are for the year ended 31 May 2010. They have been prepared in compliance with International 
Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations as 
adopted by the European Union as at 31 May 2010.
The Group has adopted the following new interpretations, revisions and amendments to IFRS issued by the International 
Accounting Standards Board, which are relevant to and effective for the Group’s financial statements for the annual 
period beginning 1 June 2009.
IAS 1 Presentation of Financial Statements (Revised 2007).
Amendments to IFRS 7 Financial Instruments: Disclosures – improving disclosures about financial instruments.
IFRS 8 Operating Segments
IAS 1 Presentation of Financial Statements (Revised 2007) requires presentation of a comparative Statement of Financial Position 
as at the beginning of the first comparative period, in some circumstances. Management considers that this is not necessary in 
these financial statements as the 31 May 2009 Statement of Financial Position is the same as that previously published.
There has been no material impact as a result of adopting the above other than in the presentation of accounts under the 
revised requirements of IAS 1 and IFRS 8.
Standards, amendments and interpretations to existing standards that are not yet effective and have not been early 
adopted by the Group in the 31 May 2010 financial statements.
At the date of authorisation of these financial statements, certain new standards, amendments and interpretations  
to existing standards have been published but are not yet effective. The Group has not early adopted any of these 
pronouncements. The new standards, amendments and interpretations that are expected to be relevant to the Group’s  
financial statements are as follows:
IFRS 3 (revised) ‘Business Combinations (2008)’ incorporates certain changes that amend the Group’s current accounting 
policies in respect of business combinations, the main change being that transaction costs, other than share and debt issue 
costs, will be expensed as incurred. Revised IFRS 3 becomes mandatory for the Group’s consolidated financial statements  
for the year to 31 May 2011.
IAS 38 (amendment) ‘Intangible Assets’, part of the IASB’s improvement project, will be applied at the same time as the revised 
IFRS 3. The amendment clarifies guidance in measuring the fair value of intangible assets acquired in a business combination.
IFRS 5 (amendment) ‘Non-current assets held for sale and discontinued operations’, part of the IASB’s improvement project, will 
be applied in the Group’s financial statements for the year to 31 May 2011 and clarifies the disclosure required for non-current 
assets held for sale or disposal Groups.
Amendment to IAS 27 ‘Consolidated and Separate Financial Statements (2008)’ addresses changes in ownership  
interests in subsidiaries by the Group. The amendments to IAS 27 become mandatory for the Group’s 2011 consolidated 
financial statements.
Amendment to IAS 39 ‘Financial Instruments: Recognition and Measurement’ permits reclassification of non-derivative financial 
assets out of the fair value through profit or loss category in particular circumstances. This amendment is not expected to have  
a significant impact on the consolidated financial statements.
IFRIC 16 ‘Hedges of a Net Investment in a Foreign Operation’, IFRIC 17 ‘Distribution of Non Cash Assets to Owners’ and IFRIC 18 
‘Transfers of assets from Customers’ will have no impact upon the financial statements.
Amendment to IAS 32 ‘Classification of Rights Issues’ requires that if rights issues offered for a fixed amount of foreign currency 
are issued pro rata to existing shareholders they should be classified as equity regardless of the currency in which the exercise 
price is denominated. The amendment is not expected to have a significant impact on the consolidated financial statements.
The principal accounting policies adopted by the Group in conformity with IFRS in force at 31 May 2010 are set out overleaf.  Financial statements
24
Allocate Software plc
Annual Report and Accounts 2010
Principal accounting policies continued
Consolidation
Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies generally 
accompanying a shareholding of over one-half of the voting rights. The existence and effect of potential voting rights that are 
currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are 
fully consolidated from the date on which control is transferred to the Group. They are deconsolidated on the date control ceases.
The Group uses the purchase method of accounting for the acquisition of a subsidiary. The cost of an acquisition is measured  
by the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus 
costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a 
business combination are measured initially at their fair values at the acquisition date irrespective of the extent of any minority 
interest. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is 
recorded as goodwill. If the cost of the acquisition is less than the fair value of the net assets of the subsidiary acquired the 
difference is recognised directly in the income statement.
Inter-company transactions, balances and unrealised gains and losses on transactions between Group companies  
are eliminated.
Investments
Investments held as non-current assets comprise investments in subsidiary undertakings and are stated at cost less any 
provision for any impairment. 
Revenue recognition
General
Revenue is the fair value of the total amount receivable by the Group for supplies of services which are provided in the normal 
course of business. VAT or similar local taxes and trade discounts are excluded.
Revenue from the provision of services is recognised by reference to the stage of completion of the transaction at the statement 
of financial position date. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied:
(a) the amount of revenue can be measured reliably;
(b) it is probable that the economic benefits associated with the transaction will flow to the entity;
(c) the stage of completion of the transaction at the statement of financial position date can be measured reliably; and
(d) the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.
Licensing
The Group licenses software under non-cancellable licence agreements. Licence fee revenues are generally recognised when a 
non-cancellable licence agreement has been signed, there are no uncertainties surrounding product acceptance, there are no 
significant vendor obligations, the fees are fixed and determinable and collection is considered probable. 
Where licence fees are attributable to contracts extending over more than one period, revenue is taken based upon the stage of 
completion when the outcome of the contract can be foreseen with reasonable certainty and after allowing for costs to completion.
Where appropriate, the Group allocates a portion of contracted fees to post-contract activities covered under the contract, 
which may include installation assistance, training services and first year maintenance.
Support services
The Group provides support services which include installation, consulting, training and product support. Revenues for training 
or consulting services are recognised as the services are performed. Revenues from support agreements are recognised 
rateably over the support period.
Segmental reporting 
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision 
Maker (“CODM”). The CODM is the person or group that allocates resources to and assesses the performance of the operating 
segments of an entity. The group has determined that its CODM is the board of directors of the group.
The measurement policies the Group uses for segment reporting under IFRS 8 are the same as those used in its  
financial statements. Allocate Software plc
Annual Report and Accounts 2010
25
Foreign currency translation
a) Functional and presentational currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary 
economic environment in which the entity operates (the functional currency). The Company’s functional currency and the 
Group’s presentational currency is Sterling.
b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates  
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the 
translation at reporting period-end exchange rates of monetary assets and liabilities denominated in foreign currencies  
are recognised in the income statement. 
c) Group companies 
The results and financial position of all Group entities that have a functional currency different from the presentation currency 
are translated into the presentation currency as follows:
Assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of the •	
statement of financial position;
Income and expenses for each income statement are translated at actual rates, the average exchange rate is an acceptable •	
approximation where there are no significant rate fluctuations during the period; and
On consolidation, exchange differences arising from the translation of the net investment in foreign entities are taken to a •	
separate component of equity.
 
Intangible assets
Internally generated intangibles
An internally generated intangible asset arising from the development of software is recognised only if all of the following 
conditions are met:
It is probable that the asset will create future economic benefits; •	
The development costs can be measured reliably; •	
The technical feasibility of completing the intangible asset can be demonstrated; •	
There is the intention to complete the asset and use or sell it; •	
There is the ability to use or sell the asset; and •	
Adequate technical, financial and other resources to complete the development and to use or sell the asset are available. •	
Intangible assets are amortised over their estimated useful lives, which is between 3-6 years. Where no intangible asset can be 
recognised, development expenditure is charged to the income statement in the period in which it is incurred. 
Research expenditure is recognised as an expense in the period in which it is incurred.
Intangibles 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 value 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.
Goodwill
Goodwill arising from business combinations is the difference between the fair value of the consideration paid and the fair value 
of the assets acquired and liabilities and contingent liabilities assumed. It is recognised initially as an intangible asset at cost and 
is subject to impairment testing on an annual basis or more frequently if circumstances indicate that the asset may have been 
impaired. Details of impairment testing are described in the accounting policies.  Financial statements
26
Allocate Software plc
Annual Report and Accounts 2010
Principal accounting policies continued
Property, plant and equipment
Property, plant and equipment are recorded at cost net of accumulated depreciation and any provision for impairment. 
Depreciation is provided using the straight line method to write off the cost of the asset less any residual value over its  
useful economic life as follows: 
Equipment 33%
Leasehold improvements  25%
Long leasehold property nil
 
Impairment
The Group’s goodwill, other intangible assets and property, plant and equipment are subject to impairment testing.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable 
cash flows (cash generating units). 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 controls 
the related cash flows. 
Individual assets or cash generating units are tested for impairment whenever events or changes in circumstances indicate that 
the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the assets or cash generating unit’s carrying amount exceeds its 
recoverable amount. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell and value 
in use, based on an internal discounted cash flow evaluation. Impairment losses recognised for cash generating units, to which 
goodwill has been allocated, are credited initially to the carrying amount of goodwill. Any remaining impairment loss is charged 
pro rata to the other assets in the cash generating unit. With the exception of goodwill, all assets are subsequently reassessed 
for indications that an impairment loss previously recognised may no longer exist. 
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 the income statement over the period of the lease.
All other leases are regarded as operating leases and the payments made under them are charged to the income statement  
in the period in which they are incurred. The Company does not act as a lessor.
Financial assets
Financial assets comprise loans and receivables and are assigned to their different categories by management on initial 
recognition, depending on the contractual arrangements. Loans and receivables are non derivative financial assets which  
are recognised when the Group becomes a party to the contractual provisions of the instrument and measured at fair value  
plus transaction costs. Trade and other receivables are classified as loans and receivables. Subsequent to initial recognition, 
loans and receivables are measured at amortised cost using the effective interest method less any provision for impairment.  
Any change in value resulting from impairment or the reversal of impairment is recognised in the income statement.
Provision against trade receivables is made when there is objective evidence that the Group will not be able to collect all 
amounts due to it in accordance with the original terms of those receivables. The amount by which they are written down  
is determined as the difference between the receivables carrying amount and the present value of the estimated future  
cash flows.
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. Allocate Software plc
Annual Report and Accounts 2010
27
Financial liabilities
The Group’s financial liabilities include bank loans and overdrafts, trade and other payables. 
Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Group becomes a party  
to the contractual provisions of the instrument. All financial liabilities are recorded initially at fair value, net of direct issue costs 
and subsequently measured at amortised cost using the effective interest method, less settlement payments. Interest related 
charges are recognised as an expense in finance costs in the income statement.
Finance charges, including premiums payable on settlement or redemption and direct issue costs are charged to the income 
statement on an accruals basis using the effective interest method. They are added to the carrying amount of the instrument  
to the extent that they are not settled in the period in which they arise.
A financial liability is derecognised only when the obligation is discharged, cancelled or expires.
Dividend distributions to shareholders are included in ‘Other short term financial liabilities’ when the dividends are approved  
by the shareholders meeting.
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. All changes to current tax liabilities are recognised as a component of tax expense in the income 
statement. 
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. 
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.
Cash and cash equivalents
Cash and cash equivalents include cash at bank and in hand as well as short term bank deposits. 
Share-based employee compensation
The Group operates equity settled share-based compensation plans for remuneration of its employees.
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 share-based compensation is ultimately recognised as an expense in the income statement 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. Financial statements
28
Allocate Software plc
Annual Report and Accounts 2010
Principal accounting policies continued
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.
“Shares to be issued” represents both the nominal value and premium of shares still to be issued at the statement of  •	
financial position date.
“Share-based payment reserve” represents equity-settled share-based employee and non-employee remuneration until •	
such share options are exercised.
“Retained earnings” represents retained profits and losses. •	
“Foreign exchange reserve” represents translation differences arising on the consolidation of overseas investments  •	
in subsidiaries.
 
Use of accounting estimates and judgements
Many of the amounts included in the financial statements involve the use of judgement and/or estimation. These judgements 
and estimates are based on management’s best knowledge of the relevant facts and circumstances, having regard to prior 
experience, but actual results may differ from the amounts included in the financial statements. Information about such 
judgements and estimation is contained in the accounting policies and/or the notes to the financial statements and the key 
areas are summarised below.
Judgements in applying accounting policies:
Corporate acquisitions require the Directors to make judgements regarding the value of the net assets that have been acquired. 
Specifically, to value the amount of future service revenues that are likely to flow from the current customer base. 
The Directors have judged that a litigation arising against Key Information Technology Systems Limited after its acquisition by 
the company, in respect of an event occurring prior to the acquisition, is fully indemnified in the sale and purchase agreement 
and, therefore, they have not made a provision to cover any possible resulting loss.
Sources of estimation uncertainty:
Depreciation rates are based on estimates of the useful lives and residual values of the assets involved. 
Estimates are required as to asset carrying values and impairment charges.
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 and the time of exercise of those options. The model used by the Group is a Black-Scholes 
valuation model.
Business combinations:
On initial recognition, the assets and liabilities of the acquired business are included in the consolidated statement of financial 
position at their provisional fair values. In measuring fair value, management uses estimates about future cash flows and 
discount rates, however, actual results may vary. Management also uses a best estimate to determine the future payable 
contingent consideration. Details of acquired assets and liabilities are given in note 26.
Contingent consideration:
Where contingent consideration is payable in cash and discounting would have a material effect, the liability is discounted to its 
present value. Where the deferred consideration is contingent and dependent upon future trading performance, an estimate of 
the present value of the likely consideration payable is made. See note 26. Allocate Software plc
Annual Report and Accounts 2010
29
        Year to Year to  
        31 May 31 May 
        2010 2009 
       Note £000s £000s
Revenue      1 21,964 15,774
Selling and operational expenses      2 (14,795) (10,702)
Gross profit       7,169 5,072
Administrative expenses        (3,680) (2,541)
Profit before amortisation, share-based payment, interest and tax    3,489 2,531
Amortisation of intangible assets       (2,091) (678)
Share-based payment      22 (80) (97)
Total administrative expenses        (5,851) (3,316)
Operating profit       1,318 1,756
Finance income      7 24 80
Finance charges      8 (17) (6)
Net finance income       7 74
Profit for the period before taxation      4 1,325 1,830
Tax on profit for the period      9 (75) 1,217
Profit for the period       1,250 3,047
Earnings per share      12  
Basic (pence per share)       2.41p 6.82p
Diluted (pence per share)       2.31p 6.48p
Consolidated statement of  
comprehensive income 
For the year ended 31 May 2010   
        Year to Year to  
        31 May 31 May 
        2010 2009 
        £000s £000s
Profit per the income statement       1,250 3,047
Exchange differences on translation of foreign operations     69 21
Share-based payment deferred tax excess recognised directly in equity    – 84
Total comprehensive income attributable to the owners of the company    1,319 3,152
     
Consolidated income statement 
For the year to 31 May 2010 30
Allocate Software plc
Annual Report and Accounts 2010
Financial statements
Consolidated statement of financial position
As at 31 May 2010
Financial statements
        31 May 31 May 
        2010 2009 
       Note £000s £000s
Non-current assets    
Intangible assets      14 18,977 2,723
Goodwill      15 4,779 –
Other financial assets      16 61 –
Property, plant and equipment      17 770 673
Deferred tax asset      20 1,527 1,386
Total non-current assets       26,114 4,782
Current assets    
Trade and other receivables      19 9,211 5,939
Cash and cash equivalents       5,042 3,664
Total current assets       14,253 9,603
Total assets       40,367 14,385
Equity and liabilities    
Equity    
Share capital      21 3,060 2,235
Share premium account      23 7,380 6,493
Shares to be issued      26 – 213
Share-based payment reserve      22 408 328
Foreign exchange reserve       153 84
Retained earnings       5,858 (1,885)
Total equity       16,859 7,468
Non-current liabilities    
Borrowings      24 2,172 180
Contingent consideration      26 2,750 –
Deferred tax liability      20 4,781 –
Total non-current liabilities       9,703 180
Current liabilities    
Trade and other payables      25 12,555 6,690
Contingent consideration      26 1,250 –
Corporation tax       – 47
Total current liabilities       13,805 6,737
Total liabilities       23,508 6,917
Total equity and liabilities       40,367 14,385
    
The financial statements were approved by the Board of Directors on 3 August 2010.
I J Bowles – Director        C D Gale – Director
Company no. 2814942 Allocate Software plc
Annual Report and Accounts 2010
31
Financial statements
Company statement of financial position
As at 31 May 2010
        31 May 31 May 
        2010 2009 
       Note £000s £000s
Non-current assets    
Investments      18 23,324 621
Intangible assets      14 1,653 2,248
Property, plant and equipment      17 327 359
Deferred tax asset      20 1,345 1,365
Total non-current assets       26,649 4,593
    
Current assets    
Trade and other receivables      19 6,707 5,557
Cash and cash equivalents       2,659 3,576
Total current assets       9,366 9,133
Total assets       36,015 13,726
    
Equity and liabilities    
Equity    
Share capital      21 3,060 2,235
Share premium account      23 7,380 6,493
Shares to be issued      26 – 213
Share-based payment reserve      22 408 328
Retained earnings       10,735 (1,554)
Total equity       21,583 7,715
    
Non-current liabilities    
Borrowings      24 2,172 –
Contingent consideration      26 2,750 –
Total non-current liabilities       4,922 –
    
Current liabilities    
Trade and other payables      25 8,260 5,977
Contingent consideration      26 1,250 –
Corporation tax       – 34
Total current liabilities       9,510 6,011
Total equity and liabilities       36,015 13,726
The financial statements were approved by the Board of Directors on 3 August 2010.
I J Bowles – Director        C D Gale – Director
Company no. 2814942 32
Allocate Software plc
Annual Report and Accounts 2010
Financial statements
Consolidated statement of changes  
in equity
For the year ended 31 May 2010
Financial statements
      Share-based Foreign   
   Share Share Shares to payment exchange Retained Total 
   capital premium be issued reserve reserve earnings equity 
   £000s £000s £000s £000s £000s £000s £000s
At 1 June 2008   2,235 6,493 159 314 63 (5,099) 4,165
Equity settled share options  – – – 97 – – 97
Options transfer on exercise  – – – (83) – 83 –
Total transactions with owners  – – – 14 – 83 97
Result for the period  – – – – – 3,047 3,047
Other comprehensive income:       
Exchange differences on retranslation  
 of foreign operations  – – – – 21 – 21
Deferred consideration  – – 54 – – – 54
Share-based payment deferred tax  
 excess recognised directly in equity  – – – – – 84 84
At 31 May 2009  2,235 6,493 213 328 84 (1,885) 7,468
Equity settled share options  62 234 – 80 – – 376
New shares issued  763 7,642 – – – – 8,405
Cancelled against retained earnings reserve  – (6,493) – – – 6,493 –
Total transactions with owners  825 1,383 – 80 – 6,493 8,781
Share issue costs  – (496) – – – – (496)
Deferred consideration  – – (213) – – – (213)
Comprehensive income:       
Result for the period  – – – – – 1,250 1,250
Exchange differences on retranslation  
 of foreign operations  – – – – 69 – 69
At 31 May 2010  3,060 7,380 – 408 153 5,858 16,859 Allocate Software plc
Annual Report and Accounts 2010
33
Financial statements
Company statement of changes  
in equity
For the year ended 31 May 2010
       Share-based   
    Share Share Shares to payment Retained Total 
    capital premium be issued reserve earnings equity 
    £000s £000s £000s £000s £000s £000s
At 1 June 2008    2,235 6,493 159 314 (5,206) 3,995
Equity settled share options   – – – 97 – 97
Options transfer on exercise   – – – (83) 83 –
Total transactions with owners   – – – 14 83 97
Result for the period   – – – – 3,485 3,485
Deferred consideration   – – 54 – – 54
Share-based payment deferred  
 tax excess recognised directly in equity   – – – – 84 84
At 31 May 2009   2,235 6,493 213 328 (1,554) 7,715
Equity settled share options   62 234 – 80 – 376
New shares issued   763 7,642 – – – 8,405
Cancelled against retained earnings reserve   – (6,493) – – 6,493 –
Total transactions with owners   825 1,383 – 80 6,493 8,781
Share issue costs   – (496) – – – (496)
Result for the period   – – – – 5,796 5,796
Deferred consideration   – – (213) – – (213)
At 31 May 2010   3,060 7,380 – 408 10,735 21,583 34
Allocate Software plc
Annual Report and Accounts 2010
Consolidated cash flow statement
For the year ended 31 May 2010
Financial statements
        Year to Year to  
        31 May 31 May 
        2010 2009 
        £000s £000s
Cash flow from operating activities    
Profit for the period       1,250 3,047
Adjustments for:    
Finance charges       (7) (74)
Income tax         72 85
Deferred tax       3 (1,302)
Depreciation       260 169
Amortisation       2,091 678
Share-based payment       80 97
Increase in trade and other receivables       (769) (3,271)
Increase in trade and other payables       1,892 2,381
Net cash generated from operations       4,872 1,810
Interest expense       (17) (6)
Income tax expense       (75) (85)
Net cash generated by operating activities       4,780 1,719
    
Cash flows from investing activities    
Interest received       24 80
Payments for intangible assets       – (2,136)
Investment to acquire subsidiary (note 26)       (13,444) –
Payments for property, plant and equipment       (218) (318)
Net cash used in investing activities       (13,638) (2,374)
    
Cash flows from financing activities    
Repayment of borrowings       (6) (16)
Proceeds from loan       2,000  –
Proceeds from the issue of equity shares        8,700 –
Issue costs       (496) –
Net cash generated by/(used in) financing activities      10,198 (16)
Net increase/(decrease) in cash and cash equivalents      1,340 (671)
Foreign exchange differences       38 18
Cash and cash equivalents at the start of the period      3,664 4,317
Cash and cash equivalents at the end of the period      5,042 3,664 Allocate Software plc
Annual Report and Accounts 2010
35
Company cash flow statement
For the year ended 31 May 2010
Financial statements
        Year to Year to  
        31 May 31 May 
        2010 2009 
        £000s £000s
Cash flow from operating activities    
Profit for the period       5,796 3,485
Adjustments for:    
Finance income       10 (78)
Income tax        – 73
Deferred tax       – (1,281)
Depreciation       207 147
Amortisation       595 388
Share-based payment       80 97
Increase in trade and other receivables       (1,134) (2,968)
Increase in trade and other payables       2,045 1,996
Net cash generated from operations       7,599 1,859
Interest        (14) –
Income tax expense       – (73)
Net cash generated by operating activities       7,585 1,786
    
Cash flows from investing activities    
Interest received       5 78
Payments for intangible assets       – (2,136)
Investment to acquire subsidiary       (18,703) (17)
Payments for property, plant and equipment       (180) (305)
Net cash used in investing activities       (18,878) (2,380)
    
Cash flows from financing activities    
Repayment of borrowings       (15) –
Proceeds from loan       2,187 –
Proceeds from the issue of equity shares       8,700 –
Issue costs       (496) –
Net cash generated by financing activities       10,376 –
Net decrease in cash and cash equivalents       (917) (594)
Cash and cash equivalents at the start of the period      3,576 4,170
Cash and cash equivalents at the end of the period      2,659 3,576 36
Allocate Software plc
Annual Report and Accounts 2010
Notes to the financial statements
For the year ended 31 May 2010
Financial statements
1 Revenue
Revenue represents the invoiced amount of licensed software and services provided during the year stated net of  
sales taxes: 
        2010 2009 
        £000s £000s
Provision of licensed software and services       21,964 15,774
2 Selling and operational expenses
        2010 2009 
        £000s £000s
Third party costs attributable to licensed software       822 74
Research and development       2,964 1,973
Selling and operational expenses       11,009 8,655
       14,795 10,702
3 Segmental reporting
Management has determined the operating segments based on the revenue streams within the reports reviewed  
by the strategic decision maker comprising the Board of Directors. Licences represents revenue from the sale of  
non-cancellable licence agreements. Services represents revenue from the provision of installation, consulting,  
training and product support.
      Licences  Services Other Total 
2010      £000s £000s £000s £000s
Revenue     9,313 12,487 164 21,964
Operational costs     (859) (5,402) (125) (6,386)
Sub-total        15,578
Selling and marketing costs        (5,445)
Research and development costs        (2,964)
Gross profit        7,169
General and administration (*)        (5,851)
Operating profit        1,318
    
      Licences  Services Other Total 
2009      £000s £000s £000s £000s
Revenue     7,599 7,984 191 15,774
Operational costs     (74) (4,212) (136) (4,422)
Sub-total        11,352
Selling and marketing costs        (4,307)
Research and development costs        (1,973)
Gross profit        5,072
General and administration (*)        (3,316)
Operating profit        1,756
    
Under IFRS 8 there is a requirement to show operating profit and total assets for the operating segments, however, 
attributable expenses and total assets cannot be allocated on a reasonable basis and, as a result, the analysis is limited  
to the group revenue which is then reconciled to the operating profit. 
(*) includes amortisation of intangible assets and share-based payment charges.
Revenues from external customers in the group’s domicile, the United Kingdom, as well as its major markets, the 
European Union and the USA, have been identified on the basis of the customer’s geographical location. Non-current 
assets are allocated based on their physical location. Allocate Software plc
Annual Report and Accounts 2010
37
Revenue arises from customers in the following locations:
 
        2010 2009 
        £000s £000s
UK       14,204 13,457
Europe       3,525 1,137
USA       1,264 543
Rest of World       2,971 637
       21,964 15,774
In addition to the requirements of IFRS 8, the Directors present a schedule of revenue analysed by vertical  
business sector:
 
        2010 2009 
        £000s £000s
Healthcare       14,751 11,073
Defence       4,539 3,007
Maritime       1,828 1,555
Other       846 139
       21,964 15,774
During 2010 and 2009, no single external customer contributed 10% or more to the Group’s revenues.
The internal reporting of the Group’s performance does not require that statement of financial position information  
is gathered on the basis of the business streams ‘Licenses’, ‘Services’ and ‘Other’ reported above. This information is 
therefore not accessible and, as a result, the segmental analysis does not include statement of financial position details. 
However, the Group operates within discrete geographical markets and the non-current assets of the Group are split 
between these locations: 
 
Non-current assets by location     USA Europe UK R o W Total 
2010     £000s £000s £000s £000s £000s
Intangible assets    – 7,572 11,405 – 18,977
Goodwill    – 2,121 2,658 – 4,779
Financial assets    – 61 – – 61
Property, plant and equipment    8 111 640 11 770
Deferred tax assets    – 129 1,398 – 1,527
Total non-current assets    8 9,994 16,101 11 26,114
Non-current assets by location     USA Europe UK R o W Total 
2009     £000s £000s £000s £000s £000s
Intangible assets    – – 2,723 – 2,723
Property, plant and equipment    6 – 666 1 673
Deferred tax assets    – – 1,386 – 1,386
Total non-current assets    6 – 4,775 1 4,782 38
Allocate Software plc
Annual Report and Accounts 2010
Notes to the financial statements
For the year ended 31 May 2010
Financial statements
4 Profit before taxation
        2010 2009 
        £000s £000s
Profit before taxation has been arrived at after charging/(crediting):  
Foreign exchange differences       (65) (48)
Depreciation and amortisation:  
Depreciation of property, plant and equipment      260 169
Amortisation of intangible assets       2,091 678
Employee benefits expense:  
Employee costs (Note 6)       11,210 9,011
Land and buildings held under operating leases       505 227
Other operating leases       54 –
Audit and non-audit services:  
Fees payable to the Company’s auditor for the audit of the Group accounts    39 39
Fees payable to the Company’s auditor and its associates for other services:  
Tax services       7 10
Other services pursuant to legislation – interim review      9 9
Due diligence on acquisition       82 –
Other services (research and development claim and business advice)    3 9
5 Remuneration of key management personnel
        2010 2009 
Group and Company        £000s £000s
Director’s emoluments       975 887
Director’s share-based payment       60 71 
       1,035  958
The Group and Company consider that the Directors are their key management personnel. 
6 Employees
        2010 2009 
Group        £000s £000s
Employee costs (including Directors):  
Wages and salaries       9,872 8,069
Social security costs       1,258 845
Share-based payment       80 97
       11,210 9,011
The average number of employees (including Directors) during the period was made up as follows:  
Sales and Services       101 87
Development       40 28
Administration       23 7
Executive Directors       4 4
Non-Executive Directors       4 4
       172 130
        2010 2009 
Company        £000s £000s
Employee costs (including Directors):  
Wages and salaries       8,210 7,497
Social security costs       908 807
Share-based payment       80 97
       9,198 8,401
The average number of employees (including Directors) during the period was made up as follows:  
Sales and Services       77 71
Development       34 27
Administration       18 16
Executive Directors       4 4
Non-Executive Directors       4 4
       137 122 Allocate Software plc
Annual Report and Accounts 2010
39
The remuneration of the Directors was as follows:
     Salary Fees Bonus Benefits Total 
For the year ended 31 May 2010     £000s £000s £000s £000s £000s
Executive Directors     
I J Bowles    215 – 160 13 388
C D Gale*    44 – 15 2 61
S C Thorne**    72 – 41 1 114
T H Osborne    – 42 25 – 67
A A Swann    125 – 120 – 245
     
Non-Executive Directors     
J I Lang    – 25 – – 25
M J S Loveland    – 25 – – 25
A R D Pringle    – 25 – – 25
R J Morgan-Evans    – 25 – – 25
    456 142 361 16 975
* from date of appointment 
** until date of resignation as Director
     Salary Fees Bonus Benefits Total 
For the year ended 31 May 2009     £000s £000s £000s £000s £000s
Executive Directors     
I J Bowles    196 – 140 12 348
S C Thorne    107 – 50 1 158
T H Osborne    – 36 20 – 56
A A Swann    125 – 100 – 225
Non-Executive Directors     
J I Lang    – 25 – – 25
M J S Loveland    – 25 – – 25
A R D Pringle    – 25 – – 25
R J Morgan-Evans    – 25 – – 25
    428 136 310 13 887
      40
Allocate Software plc
Annual Report and Accounts 2010
Notes to the financial statements
For the year ended 31 May 2010
Financial statements
Directors’ share options
Aggregate emoluments disclosed do not include any amounts for the value of options to acquire Ordinary Shares in the 
Company granted to or held by the Directors. Details of the options are as follows:
I J Bowles
 Date Number Option Exercisable 
Scheme of grant of options price period
EMI 2/05/08 250,000 53.00p  2/05/11 – 1/05/18
EMI 7/04/09 750,000 45.50p  7/04/12 – 6/04/19
Unapproved 7/05/10 600,000 70.25p 7/05/13 – 6/05/20
  1,600,000
C D Gale
 Date Number Option Exercisable 
Scheme of grant of options price period
EMI 7/05/10 170,818 70.25p 7/05/13 – 6/05/20
Unapproved 7/05/10 329,182 70.25p 7/05/13 – 6/05/20
  500,000  
T H Osborne
 Date Number Option Exercisable 
Scheme of grant of options price period
EMI  27/03/06 500,000 25.50p 27/03/09 – 26/03/16
EMI 7/05/10 28,470 70.25p 7/05/13 – 6/05/20
Unapproved 7/05/10 21,530 70.25p 7/05/13 – 6/05/20
  550,000  
A Swann
 Date Number Option Exercisable 
Scheme of grant of options price period
Unapproved  27/03/06 25,000 25.50p 27/03/09 – 26/03/16
EMI  09/10/06 225,000 18.50p 09/10/09 – 08/10/16
EMI 7/05/10 102,491 70.25p 7/05/13 – 6/05/20
Unapproved 7/05/10 147,509 70.25p 7/05/13 – 6/05/20
  500,000  
A R D Pringle
 Date Number Option Exercisable 
Scheme of grant of options price period
Unapproved  18/03/04 50,000 45.00p 18/03/06 – 17/03/14
R J Morgan-Evans
 Date Number Option Exercisable 
Scheme of grant of options price period
EMI  17/06/04 100,000 33.00p 17/06/06 – 16/06/14
EMI  28/09/04 210,406 32.00p 28/09/06 – 27/09/14
Unapproved  28/09/04 129,594 32.00p 28/09/06 – 27/09/14
Unapproved  12/10/04 100,000 35.50p 12/10/06 – 11/10/14
Unapproved  27/03/06 100,000 25.50p 27/03/09 – 26/03/16
Total options held  640,000  
    
On 4 February 2010, Mr Morgan-Evans exercised 200,000 unapproved options which had been granted to him on  
27 March 2006 at a grant price of 25.5p.
The mid-market price of the Ordinary Shares at 31 May 2010 was 69.25p and the range during the year was 48p to 77p. Allocate Software plc
Annual Report and Accounts 2010
41
7 Finance income
        2010 2009 
        £000s £000s
Interest income       24 80
       24 80
8 Finance charges
        2010 2009 
        £000s £000s
Interest expense       17 6
       17 6
9 Income tax expense
        2010 2009 
        £000s £000s
Current tax:   
Corporation tax on profit for the year       (37) 85
Overseas tax       109 –
Total current tax       72 85
Deferred tax:   
Origination and reversal of timing differences:
 current period       170 497
 prior year adjustments       (167) (1,799)
Total deferred tax       3 (1,302)
Tax on profit for the period       75 (1,217)
  
The tax assessed for the period differs from the standard rate of corporation tax as applied in the respective trading 
domains where the Group operates. The differences are explained below:
        2010 2009 
        £000s £000s
Profit for the period before tax       1,325 1,830
  
Profit for period multiplied by the respective standard rate of corporation tax applicable  
in each domain 28% (2009: 30%).       371 512
  
Effects of:   
Deferred tax (credit)/charge current year       – 432
Adjustment to tax in respect of prior periods       (220) (1,744)
Expenses not deductible for tax purposes       75 73
IFRS 2 charge add back       22 27
Schedule 23 deductions       (230) –
Capital allowances in excess of depreciation       – 3
Tax losses (utilised)/arising during the year       – (479)
Research and development enhanced relief        (366) (140)
Difference in tax rates       (11) –
Disallowable amortisation       435 99
Tax on profit for the period       75 (1,217)
Tax losses carried forward in the UK total £3,873,000 – tax effect is £1,085,000 (2009: £4,246,000 – tax effect is £1,189,000). 42
Allocate Software plc
Annual Report and Accounts 2010
Notes to the financial statements
For the year ended 31 May 2010
Financial statements
10 Profit attributable to Allocate Software plc
The profit for the financial year of the Parent Company, Allocate Software plc, was £5,796,000 (2009: £3,485,000).  
As permitted by section 408 of The Companies Act 2006, no separate profit and loss account is presented in respect  
of the Parent Company.
11 Dividends
The Directors do not propose to pay a dividend for the current financial year (2009: £nil).
12 Earnings per ordinary share
        31 May 31 May 
        2010 2009 
        £000s £000s
Profit for the year       1,250 3,047
  
Earnings per share  
Basic (pence per share)       2.41p 6.82p
Diluted (pence per share)       2.31p 6.48p
  
        Number Number 
Weighted average number of shares        of shares of shares
Shares in issue at opening       44,702,625 44,702,625
Shares issued during the period       16,492,689 –
Shares at closing       61,195,314 44,702,625
Weighted average shares for basic earnings per share      51,768,106 44,702,625
Effect of dilutive potential Ordinary Shares       2,452,967 2,348,181
Weighted average shares for diluted earnings per share      54,221,073 47,050,806
  
Adjusted earnings per ordinary share
An adjusted earnings per share has been calculated in addition to the post tax earnings per share which eliminates the 
effects of share-based payment, amortisation of intangibles and the deferred tax adjustment. It has been calculated to 
allow shareholders to gain a clearer understanding of the trading performance of the Group. The basis of the calculation 
of the basic and adjusted profit per share is set out below:
        2010 2009 
        £000s £000s
Profit for the year attributable to shareholders       1,250 3,047
Amortisation of intangibles       2,091 678
Share-based payment       80 97
Deferred tax adjustment       – (1,302)
Adjusted profit for the year attributable to shareholders      3,421 2,520
  
Basic adjusted earnings per share       6.61p 5.64p
Diluted adjusted earnings per share       6.31p 5.36p Allocate Software plc
Annual Report and Accounts 2010
43
14 Intangible assets
Group         £000s
Cost/valuation   
At 1 June 2008        845
Reduction in fair value        (30)
Additions – purchase of intangibles         2,636
At 31 May 2009        3,451
Additions – purchase of intangibles       (note 26) 18,345
At 31 May 2010        21,796
   
Amortisation   
At 1 June 2008        50
Charge for the year        678
At 31 May 2009        728
Charge for the year        2,091
At 31 May 2010        2,819
   
Net book value   
At 31 May 2010        18,977
At 31 May 2009        2,723
At 1 June 2008        795
Company         £000s
Cost/valuation   
At 1 June 2008        –
Additions – purchase of intangibles         2,636
At 31 May 2009        2,636
Additions – purchase of intangibles         –
At 31 May 2010        2,636
   
Amortisation   
At 1 June 2008        –
Charge for the year        388
At 31 May 2009        388
Charge for the year        595
At 31 May 2010        983
   
Net book value   
At 31 May 2010        1,653
At 31 May 2009        2,248
At 1 June 2008        –
 
15 Goodwill
        2010 2009 
Group        £000s £000s
At 1 June       – –
Additions       5,136 –
Utilised against deferred tax liability       (357) –
At 31 May       4,779 –
  
Additions to goodwill reflect the amounts recognised in relation to the deferred tax liability arising on the fair  
value adjustment of the intangible assets acquired as a result of the acquisitions of Time Care AB and Dynamic  
Change Limited. 44
Allocate Software plc
Annual Report and Accounts 2010
Notes to the financial statements
For the year ended 31 May 2010
Financial statements
16 Other financial assets
Other financial assets amount to £61,000 (2009: £nil). They represent an endowment policy purchased for the benefit  
of the Chief Executive Officer of Time Care AB. The asset is stated at its fair value.
17 Property, plant and equipment
17.1 Group
      Long leasehold Leasehold 
      property improvements Equipment Total 
      £000s £000s £000s £000s
Cost    
At 1 June 2008     285 180 707 1,172
Additions     – 65 253 318
Foreign exchange rate movement     – – 23 23
At 31 May 2009     285 245 983 1,513
    
Acquisition of Time Care AB     – – 356 356
Acquisition of Dynamic Change Ltd     – – 115 115
Additions     – 19 199 218
Disposals     – – (349) (349)
Foreign exchange rate movement     – – 17 17
At 31 May 2010     285 264 1,321 1,870
    
Depreciation    
At 1 June 2008     – 161 490 651
Provided in the year     – 7 162 169
Foreign exchange rate movement     – – 20 20
At 31 May 2009     – 168 672 840
    
Acquisition of Time Care AB     – – 244 244
Acquisition of Dynamic Change Ltd     – – 95 95
Provided in the year     – 64 196 260
Disposals     – – (349) (349)
Foreign exchange rate movement     – – 10 10
At 31 May 2010     – 232 868 1,100
    
Net book amount at 31 May 2010     285 32 453 770
    
Net book amount at 31 May 2009     285 77 311 673
Net book amount at 31 May 2008     285 19 217 521
The long leasehold property is subject to a mortgage charge, all other assets are mortgage and charge free. The value  
of the mortgage is held as borrowings £172,000 (2009: £178,000).
Netted off the cost of property plant and equipment are accumulated landlord capital contributions amounting to 
£304,000 (2009: £304,000) at the period end. Of this amount £54,000 (2009: £5,000) had been taken to the income 
statement by way of a reduction to accumulated depreciation.
  Allocate Software plc
Annual Report and Accounts 2010
45
17.2 Company
       Leasehold 
       improvements Equipment Total 
       £000s £000s £000s
Cost    
At 1 June 2008      142 580 722
Additions      65 240 305
Disposals      – – –
At 31 May 2009      207 820 1,027
    
Additions      19 161 180
Disposals      – (203) (203)
At 31 May 2010      226 778 1,004
    
Depreciation    
At 1 June 2008      142 379 521
Provided in the year      7 140 147
Disposals      – – –
At 31 May 2009      149 519 668
    
Provided in the year      38 169 207
Disposals      – (198) (198)
At 31 May 2010      187 490 677
    
Net book amount at 31 May 2010      39 288 327
    
Net book amount at 31 May 2009      58 301 359
Net book amount at 31 May 2008      – 201 201
All assets are mortgage and charge free.
Netted off the cost of property plant and equipment are accumulated landlord capital contributions amounting to 
£304,000 (2009: £304,000) at the period end. Of this amount £54,000 (2009: £5,000) had been taken to the income 
statement by way of a reduction to accumulated depreciation.
18 Investments 
Group
There are no non-current asset investments held by the Group.
Company
Investments in subsidiaries:
         £000s
Cost  
At 1 June 2008        550
Additions        71
Cost at 31 May 2009        621
Additions       (note 26) 22,703
Cost at 31 May 2010        23,324
Net book value  
At 31 May 2010        23,324
At 31 May 2009        621
At 31 May 2008        550 46
Allocate Software plc
Annual Report and Accounts 2010
Notes to the financial statements
For the year ended 31 May 2010
Financial statements
Principal investments
The company holds more than 20% of the equity share capital of the following:
          
      Country of    
      registration    
      and Class of Percentage Nature of 
Subsidiary       operation share held business
Time Care AB      Sweden Ordinary 100% Sales of  
      SEK 1  software
Time Care Sverige AB     Sweden Ordinary 100% Sales of
       SEK 1,000  software
Calistrum AB     Sweden Ordinary 100% Dormant
      SEK 1,000  
Time Care UK Limited     England Ordinary 100% Dormant
     and Wales £1  
Dynamic Change Limited     England Ordinary 100% Sales of
     and Wales 1p  software
Allocate Software Worldwide Limited     England Ordinary 100% Overseas
     and Wales 1p  sales
Allocate Software Inc     USA Common stock 100% USA sales
      US$0.011  and support
Allocate Software Pte Limited     Singapore Common stock 100% Dormant
      Singapore $1  
Allocate Software PTY Limited     Australia Ordinary 100% Sales of
      Aus $1  software
MSW Technology Limited     England Ordinary 100% Dormant
     and Wales £1  
Allocate Software Technology     England Ordinary 100% Sales of
Systems Ltd     and Wales £1  software
Allocate Software Sdn Bhd     Malaysia Ordinary 100% Sales of
      MYR1  software
Allocate Sdn Bhd      Malaysia Ordinary 100% Sales of
      MYR1  software
Manpower Software Limited     England Ordinary 100% Dormant
     and Wales £1  
Allocate Limited     England Ordinary 100% Dormant
     and Wales £1  
19 Trade and other receivables
        2010 2009 
Group        £000s £000s
Current  
Trade receivables       7,555 4,774
Accrued income       942 707
Prepayments and other receivables       714 458
       9,211 5,939
  
The following financial assets are overdue for receipt. The fair value of receivables is not materially different from the 
carrying value shown. The receivables are overdue by: 
        2010 2009 
        £000s £000s
Trade receivables  
Not more than 3 months        1,778 2,054
More than 3 months but not more than 6 months       157 618
More than 6 months but not more than 1 year        11 97
       1,946 2,769
There are no receivables which have been impaired.   Allocate Software plc
Annual Report and Accounts 2010
47
Trade and other receivables are due in the following currencies: 
        2010 2009 
        £000s £000s
Australian Dollars       2,211 30
Euros       20 –
Malaysian Ringgits       4 67
New Zealand Dollars       1 –
Swedish Krona       654 –
US Dollars       246 319
       3,136 416
        2010 2009 
Company        £000s £000s
Current  
Trade receivables       3,837 3,917
Amounts owed by subsidiary companies       1,848 581
Accrued income       551 646
Prepayments and other receivables       471 413
       6,707 5,557
  
Amounts owed by subsidiary companies are payable on demand.
The following financial assets are overdue for receipt. The fair value of receivables is not materially different from the 
carrying value shown. The receivables are overdue by: 
        2010 2009 
        £000s £000s
Trade receivables  
Not more than 3 months        1,330 1,666
More than 3 months but not more than 6 months       33 412
More than 6 months but not more than 1 year        11 44
       1,374 2,122
There are no receivables which have been impaired.  
Trade and other receivables are due in the following currencies: 
        2010 2009 
        £000s £000s
Australian Dollars       16 –
Euros       20 –
New Zealand Dollars       1 –
US Dollars       132 –
       169 –
  
The Group’s and Company’s receivables are unsecured.
20 Deferred tax
Deferred tax asset
        2010 2009 
Group        £000s £000s
At 1 June       1,386 –
Additions       144 1,386
Prior year adjustment       167 –
Utilisation       (170) –
At 31 May       1,527 1,386 48
Allocate Software plc
Annual Report and Accounts 2010
Notes to the financial statements
For the year ended 31 May 2010
Financial statements
        2010 2009 
Company        £000s £000s
At 1 June       1,365 –
(Utilisation)/Additions       (20) 1,365
At 31 May       1,345 1,365
Additions to the deferred tax asset principally reflect amounts recognised on unrealised tax losses. Other deferred tax 
assets arise from timing differences on share options and profit for the period before taxation.
Deferred tax liability
        2010 2009 
Group        £000s £000s
At 1 June       – –
Additions       5,138 –
Utilisation       (357) –
At 31 May       4,781 –
Additions to the deferred tax liability principally reflect amounts recognised in relation to the fair value adjustment made 
to the assets and liabilities acquired as part of the acquisition of Time Care AB and Dynamic Change Limited.
21 Share capital
        2010 2009 
Equity        £000s £000s
Authorised  
100 million Ordinary Shares of 5p each  
 (2009: 65 million Ordinary Shares of 5p each)       5,000 3,250
Shares to be issued  
2010: nil (2009: 296,431)       – 15
Allotted, called up and fully paid  
61,195,314 (2009: 44,702,625) Ordinary Shares of 5p each      3,060 2,235
At 31 May       3,060 2,250
        Number of 
Equity: allotted, called up and fully paid        shares £000s
At 1 June 2009       44,702,625 2,235
Issued on acquisition of Time Care AB       15,100,000 755
Issued on acquisition of Dynamic Change Limited      156,250 8
Issued on exercise of share options       1,236,439 62
At 31 May       61,195,314 3,060
Time Care AB
On 15 December 2009, the Company acquired Time Care AB, a Swedish-based provider of workforce optimisation 
software, for a net consideration of SEK 100 million (approximately £8.7 million). To help fund the acquisition, the 
Company raised £8.3 million (£8.0 million net of expenses) through a cash placing of 15.1m new Ordinary Shares at  
55 pence per share, with the balance being satisfied from the Company’s existing cash resources. 
Dynamic Change Limited
On 5 May 2010, the Company acquired Dynamic Change Limited, a UK-based software-as-a-service (“SaaS”) provider of 
regulatory compliance, corporate governance, risk and performance management for the UK healthcare market, for up  
to £9.0 million over three years. The initial consideration of £4.9 million in cash and £100,000 in shares of the company was 
funded by the issue of 156,250 new Ordinary Shares at 64 pence per share, a £2 million cash loan and the balance from 
the Company’s existing cash resources. 
Deferred, contingent consideration of up to £4.0 million in cash is payable based on the financial performance of  
Dynamic Change for the 12 month periods ending 31 March 2011, 31 March 2012 and 31 March 2013 (the “Contingent 
Consideration”). No Contingent Consideration will be payable unless Dynamic Change achieves at least 15 per cent. 
compound annual growth in run-rate subscription revenues over run-rate subscription revenues as at 31 March 2010. Full 
payment of the Contingent Consideration will only be made if Dynamic Change achieves at least 25 per cent. compound 
annual growth in run-rate subscription revenues in the three year period to 31 March 2013.  Allocate Software plc
Annual Report and Accounts 2010
49
£1.25 million of the Contingent Consideration is attributable to the financial performance of Dynamic Change in respect 
of the 12 month period to 31 March 2011 and £1.75 million is attributable to the financial performance of Dynamic Change 
in respect of the 12 month period to 31 March 2012. If the full payment of £1.25 million of the Contingent Consideration 
attributable to the performance in respect of the 12 month period to 31 March 2011 is not made, it remains available to 
be paid in respect of the financial performance for the subsequent 12 month period to 31 March 2012 (but not thereafter). 
£1.0 million of the Contingent Consideration is attributable to the financial performance of Dynamic Change in respect of 
the 12 month period to 31 March 2013.
Group and Company
        Number of Subscription 
        shares under price 
        option per share
Approved Share Option Scheme  
Exercisable between:  
18 September 2003 – 17 September 2010       68,070 36.16p
2 May 2004 – 1 May 2011       31,150 25.00p
2 May 2004 – 1 May 2011       24,675 25.00p
30 May 2004 – 29 May 2011       10,000 30.00p
25 February 2005 – 24 February 2012       36,000 25.00p
       169,895 
Unapproved Executive Share Option Scheme  
Exercisable between:  
18 March 2006 – 17 March 2014       50,000 45.00p
27 March 2009 – 26 March 2016       117,500 25.50p
16 February 2010 – 15 February 2017       50,000 36.25p
7 May 2013 – 6 May 2021       1,098,221 70.25p
       1,315,721 
        Number of Subscription 
        shares under price 
        option per share
Enterprise Management Incentive Scheme  
Exercisable between:  
17 May 2004 – 16 May 2012       756,800 14.00p
17 May 2004 – 16 May 2012       190,896 25.00p
14 May 2005 – 13 May 2013       214,500 10.00p
5 March 2006 – 4 March 2014       3,000 45.00p
17 June 2006 – 16 June 2014       122,500 33.00p
28 September 2006 – 27 September 2014       340,000 32.00p
12 October 2006 – 11 October 2014       100,000 35.50p
12 October 2007 – 11 October 2015       250,000 27.25p
27 March 2009 – 26 March 2016       863,500 25.50p
9 October 2009 – 8 October 2016       225,000 18.50p
16 February 2010 – 15 February 2017       450,000 36.25p
2 May 2011 – 2 May 2018       310,000 53.00p
7 April 2012 – 6 April 2019       750,000 45.50p
14 April 2013       745,000 71.50p
7 May 2013 – 6 May 2021       301,779 70.25p
       5,622,975  50
Allocate Software plc
Annual Report and Accounts 2010
Notes to the financial statements
For the year ended 31 May 2010
Financial statements
22 Share-based payments
There are three share option schemes in operation: an HMRC Approved Scheme, a scheme which has not been  
approved by HMRC, and an Enterprise Management Incentive Scheme which complies with the requirements of HMRC. 
The conditions for exercising options granted under these schemes is as set out in the Report of the Directors.
If the options remain unexercised after a period of 10 years from the date of grant, the options expire. Options are 
forfeited if the employee leaves the company before the options become available to exercise.
Details of the number of share options and the weighted average exercise price (WAEP) outstanding during the year are 
as follows:
 2010 2009
      No. of  WAEP No. of  WAEP 
      options pence options pence
Outstanding at the beginning of the year     6,236,527 28.46p 6,214,846 32.24p
    
Granted during the year     2,145,000 70.68p 750,000 45.50p
Exercised during the year     (1,236,439) 23.91p – –
Forfeited during the year     – – (650,000) 74.25p
Expired during the year     (36,497) 55.97p (78,319) 83.15p
Outstanding at the end of the year     7,108,591 42.16p 6,236,527 28.46p
Exercisable at the year end     3,864,424 24.98p 4,057,861 23.86p
     
Share options to employees are granted on a discretionary basis.
The total cost of the share option schemes charged to the Consolidated Income Statement is £80,000 (2009: £97,000).
The fair values of the services received were calculated using a binomial pricing model. The inputs into the model were  
as follows:
2010:
During the prior year the following options were granted:
        Expected 
   Exercise Expected Expiry  Risk dividend Employee 
  Number price volatility period Vesting free rate yield exit rate 
Date of issue  granted Pence % Years period % % %
14 April 2010 745,000 71.5p 35 10 3 2.85 nil 5
7 May 2010 1,400,000 70.25p 35 10 3 2.69 nil 5
2009:
During the year the following options were granted:
        Expected 
   Exercise Expected Expiry  Risk dividend Employee 
  Number price volatility period Vesting free rate yield exit rate 
Date of issue  granted Pence % Years period % % %
7 April 2009 750,000 45.50p 40 10 3 3.56 nil 5
        
The volatility calculation was based on the average weighted annualised volatility of the Company’s share price for the 
past four years.
23 Share premium
         2010 
         £000s
At 1 June 2009        6,493
Cancelled against retained earnings reserve        (6,493)
Arising on new shares issued        7,642
Arising on exercise of share options        234
Share issue costs        (496)
At 31 May 2010        7,380
  
During the year, the Company received shareholder and court approval, in accordance with Section 138 of the 
Companies Act 1985, to cancel its share premium account against reserves in order to create distributable reserves.  Allocate Software plc
Annual Report and Accounts 2010
51
24 Borrowings
The Company has a mortgage secured on a long leasehold property owned by its subsidiary, Allocate Software 
Technology Systems Limited. The amount outstanding at the statement of financial position date is £172,000 (2009: £nil). 
The interest rate is 1.85% above HSBC bank base rate.
The Company has a two year revolving facility secured against the assets of the UK companies in the group, which it took 
out to fund the acquisition of Dynamic Change Limited. The amount outstanding at the statement of financial position 
date is £2 million (2009: £nil). The interest rate is 2% above HSBC bank base rate.
25 Trade and other payables
        2010 2009 
Group        £000s £000s
Trade payables       768 440
Other taxation and social security       1,567 760
Accruals and deferred income       10,220 5,490
       12,555 6,690
  
        2010 2009 
Company        £000s £000s
Trade payables       601 413
Amounts owed to subsidiary companies       680 96
Other taxation and social security       908 674
Accruals and deferred income       6,071 4,794
       8,260 5,977
  
The Group’s and Company’s payables are unsecured.
26 Business combinations
Acquisitions
The Group prepares discounted cash flow forecasts based on financial forecasts approved by management covering  
a five-year period, which takes account of both past performance and expectations for future market developments. 
Management estimates the discount rate using a pre-tax rate that reflects current market assessments of the time  
value of money and the risks specific to IT services businesses. A pre-tax discount rate of 14% has been used. The main 
assumptions on which the forecast cash flows were based include revenue growth, margin growth and access to a new 
customer base. All key assumptions used by management within the cash flow forecasts are based on past experience 
and sector experience.
Time Care AB
On 15 December 2009, the Company completed the acquisition of 100% of Time Care AB (“Time Care”), a Swedish-based 
provider of workforce optimisation software for a net consideration of SEK 100 million (approximately £8.7 million). To fund 
the acquisition, the Company raised £8.3 million (£8.0 million net of expenses) through a cash placing of 15.1m new Ordinary 
Shares at 55.0 pence per share, with the balance being satisfied from the Company’s existing cash resources.  52
Allocate Software plc
Annual Report and Accounts 2010
Notes to the financial statements
For the year ended 31 May 2010
Financial statements
The net assets acquired and the resultant fair value adjustments are shown below: 
     
        Provisional 
        fair value 
       Book value adjustment Fair value 
       £000s £000s £000s
Cash with subsidiary      4,110  4,110
Intangibles – identified at acquisition (note 14)       8,850 8,850
Non-current financial asset      58  58
Property, plant and equipment      112  112
Receivables      2,122  2,122
Trade payables and other payables      (2,387)  (2,387)
Deferred tax liability       (2,478) (2,478)
Net assets      4,015 6,372 10,387
Goodwill on this acquisition      – 2,478 2,478
Consideration        12,865
Less cash acquired        (4,110)
Net consideration        8,755
Net consideration satisfied by:     
Cash        8,171
Professional fees paid        584
        8,755
In the period since acquisition, Time Care AB contributed £324,000 to post-tax profits of the Group. Had Time Care AB 
been acquired on 1 June 2009, annualised revenue of the Group for 2010 would have been greater by approximately 
£5,760,000 (including £2,650,000 already reflected in the consolidated reported results) and profit after tax of the Group 
for 2010 would have been greater by approximately £700,000 (including £324,000 already reflected in the consolidated 
reported results).
Dynamic Change Limited
On 7 May 2010, the Company completed the acquisition of 100% of Dynamic Change Limited, a UK-based software-as-a-
service (“SaaS”) provider of regulatory compliance, corporate governance, risk and performance management for the  
UK healthcare market, for up to £9.0 million over three years. The initial consideration of £4.9 million in cash and £100,000 
in shares of the Company was funded by the issue of 156,250 new Ordinary Shares at 64 pence per share, a £2 million 
cash loan and the balance from the Company’s existing cash resources. Deferred, contingent consideration of up to  
£4.0 million in cash may become payable as set out in note 21. Allocate Software plc
Annual Report and Accounts 2010
53
The net assets acquired and the resultant fair value adjustments are shown below: 
        Provisional 
        fair value 
       Book value adjustment Fair value 
       £000s £000s £000s
Cash with subsidiary      1,148  1,148
Intangibles – identified at acquisition (note 14)       9,494 9,494
Property, plant and equipment      20  20
Receivables      639  639
Trade payables and other payables      (1,464)  (1,464)
Deferred tax liability       (2,658) (2,658)
Net assets      343 6,836 7,179
     
Goodwill on this acquisition      – 2,658 2,658
Consideration        9,837
Less cash acquired        (1,148)
Net consideration        8,689
     
Net consideration satisfied by:     
Cash paid        4,095
Shares issued        100
Contingent cash payable        4,000
Professional fees paid        494
        8,689
The contingent consideration, if due, will be payable £1,250,000 within one year and £2,750,000 after one year.
In the period since acquisition, Dynamic Change Limited contributed £30,000 to post-tax profits of the Group. Had 
Dynamic Change Limited been acquired on 1 June 2009, annualised revenue of the Group for 2010 would have been 
greater by approximately £3,100,000 (including £250,000 already reflected in the consolidated reported results) and profit 
after tax of the Group for 2010 would have been greater by approximately £350,000 (including £30,000 already reflected 
in the consolidated reported results).
Key Information Technology Systems Limited
On 4 April 2008 the Group acquired 100% of the issued share capital of Key Information Technology
Systems Ltd (“KITS”) for a maximum consideration of £558,000. The consideration was to be settled as follows:  
(a) an initial payment in cash of £345,000; and (b) contingent consideration to be paid in shares up to a maximum value  
of £213,000 should certain targets for the renewal of customer support contracts be met. Subsequent to the acquisition 
of KITS, this company is being sued by a competitor company based on a dispute of an agreement entered into prior to 
the acquisition date. The likelihood of litigation arising was not made known to the Directors prior to the acquisition date.  
As a result the costs incurred in defending the litigation are subject to the terms of the sale and purchase agreement 
between the Company and the sellers of KITS, which include a full indemnity in respect of the claim arising. 
The targets for renewal of support contracts were met and, so, the contingent consideration payable in shares should 
have been paid. However, because of the legal costs arising in respect of the litigation, the shares were not issued and 
the proceeds were instead applied against this liability. In respect of on-going costs being incurred on the litigation, 
these are being reimbursed to the company by the sellers of KITS under the indemnity provision contained within the  
sale and purchase agreement. As a result, the Directors do not consider that any provision in respect of the litigation  
is required. 
KITS changed its name to Allocate Software Technology Systems Ltd on 28 May 2009.  54
Allocate Software plc
Annual Report and Accounts 2010
Notes to the financial statements
For the year ended 31 May 2010
Financial statements
27 Financial instruments
27.1 Group
The Group’s financial instruments comprise cash and liquid resources, short term receivables and payables. These all 
arise directly from the Group’s operations. 
It is, and has been throughout the period under review, the Group’s policy that no other trading in financial instruments 
shall be undertaken.
The main risks arising from the Group’s financial instruments are interest rate risk, liquidity risk and foreign currency risk. 
The Board reviews and agrees policies for managing each of these risks and they are summarised below. These policies 
were fully reviewed by the Board during the year and no significant changes were required.
Financial instruments by category
        2010 2009 
        £000s £000s
Financial assets:  
Non-current financial asset – loans and receivables      61 –
Trade and other receivables – loans and receivables       7,818 5,076
Trade and other receivables – non–financial assets      1,393 863
Total trade and other receivables       9,211 5,939
Cash and cash equivalents – loans and receivables      5,042 3,664
  
Financial liabilities:  
Non-current financial liabilities – other financial liabilities      2,172 180
Trade and other payables – other financial liabilities      2,889 2,428
Trade and other payables – non financial liabilities      9,666 4,262
Total trade and other payables       12,555 6,690
  
There is no material difference between the book value and the fair value of these financial assets and financial liabilities.
Market risk
Foreign exchange risk
Transactions of subsidiaries are denominated in the local currency. 
The table below shows the Group’s currency exposures. These consist of the monetary assets and liabilities of the Group 
that are not denominated in the Group’s reporting currency, which is UK pounds sterling.
      Swedish Australian US  MYR 
      Krona Dollars Dollars Ringgits 
Net foreign currency monetary asset      £000s £000s £000s £000s
2010     571 121 341 38
2009     nil nil 31 21
The figures for 2010 above are based on the following exchange rates:
Net foreign currency monetary asset        2010 2009
Swedish Krona       11.3318 –
Australian Dollars       1.70334 –
US Dollars       1.44399 1.48136
Malaysian Ringgits       4.75629 5.28435
For a movement of plus or minus 5% in the above exchange rates, the carrying values would be changed as set out 
below. Both profit and equity would be impacted by these amounts.
        2010 2009 
Resulting change        £000s £000s
Swedish Krona       30 –
Australian Dollars       6 –
US Dollars       18 2
Malaysian Ringgits       2 1 Allocate Software plc
Annual Report and Accounts 2010
55
Interest rate risk
The Group finances itself through a combination of equity and short term debt. The Group’s policy is to borrow on a 
floating rate basis and, if appropriate, it will enter into arrangements to fix the cost of borrowings. The Group has not 
used interest rate derivatives in the year.
At 31 May 2010 the Group’s financial assets, other than short term receivables, amounted to cash and cash deposits 
totalling £5,042,000 (2009: £3,664,000).
The Company has a mortgage secured on a long leasehold property owned by its subsidiary, Allocate Software 
Technology Systems Limited. The amount outstanding at the statement of financial position date is £172,000  
(2009: £180,000). The interest rate is 1.85% above HSBC bank base rate.
The Company has a loan secured on the UK assets of the Group, which it took out to fund the acquisition of Dynamic 
Change Limited. The amount outstanding at the statement of financial position date is £2 million (2009: £nil). The interest 
rate is 2% above HSBC bank base rate.
The Directors do not intend to use swap arrangements to mitigate the risk of interest rate movements as any likely 
movement in the interest rate of this mortgage will not be significant. A movement of plus or minus 1% in the interest rate 
charged will create a movement of plus or minus £22,000 (2009: £2,000) in the annual interest payment on the combined 
balances outstanding at the statement of financial position date of £2,172,000 (2009: £180,000).
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to  
the Group. In order to minimise this risk the Group endeavours only to deal with companies which are demonstrably 
creditworthy and this, together with the aggregate financial exposure, is continuously monitored. The maximum 
exposure to credit risk is the value of the outstanding amount.
The Group has trade receivables resulting from sales of products and services, which management considers to be of low 
risk, other receivables consist predominantly of deposits and prepayments. Management does not consider there is any 
concentration of risk within either trade or other receivables.
Deposits of cash are placed only with financial institutions whose credit rating is high. 
Liquidity risk
Deposits with the Group’s bankers are placed when cash is available surplus to immediate requirements. In addition,  
the Group has a loan facility of £2,000,000 (2009: revolving credit facility £1,000,000). At the statement of financial position 
date the amount drawn down was £2,000,000, being the loan used to fund the acquisition of Dynamic Change Limited. 
The provision of cash for the payment of day to day business commitments is carefully monitored and forecasts are made 
of future cash requirements. There are no significant single amounts due for payment in the foreseeable future other than 
those arising in the normal course of business. The loan taken out to fund the acquisition of Dynamic Change Limited is 
repayable on or before 4 May 2012. The mortgage held against the long leasehold property is due for repayment in 
quarterly instalments until 2021. 
Financial liabilities mature according to the following schedule:
      Within 1 One to Two to Over 
       year two years five years five years  
2010      £000s £000s £000s £000s
Trade and other payables     2,335   
Accruals     9,666   
Related party balances      680   
Borrowings     8 2008 24 132
    
      Within 1 One to Two to Over 
       year two years five years five years  
2009      £000s £000s £000s £000s
Trade and other payables     1,260   
Accruals     1,168   
Related party balances      96   
Borrowings     16 16 48 100 56
Allocate Software plc
Annual Report and Accounts 2010
Notes to the financial statements
For the year ended 31 May 2010
Financial statements
Capital risk management
The Group’s capital management objectives are to ensure its ability to continue as a going concern and to provide an 
adequate return to shareholders. The Group will also seek to minimise the cost of capital and attempt to optimise the 
capital structure. The Group monitors cash balances and prepares regular forecasts which are reviewed by the Board. 
Currently no dividends are paid to shareholders and capital for further development of the Group’s activities is achieved 
by share issues and organic growth. 
27.2 Company
The Company’s financial instruments comprise cash and liquid resources, short term receivables and payables. These all 
arise directly from the Group’s operations. 
It is, and has been throughout the period under review, the Company‘s policy that no other trading in financial 
instruments shall be undertaken.
The main risks arising from the Company’s financial instruments are liquidity risk and foreign currency risk. The Board 
reviews and agrees policies for managing each of these risks and they are summarised below. These policies were fully 
reviewed by the Board during the year and no significant changes were required.
Financial instruments by category
        2010 2009 
        £000s £000s
Financial assets:  
Trade and other receivables – loans and receivables       5,685 4,498
Trade and other receivables – non–financial assets      1,022 1,059
Total trade and other receivables       6,707 5,557
Cash and cash equivalents – loans and receivables      2,659 3,576
  
Financial liabilities:  
Non-current financial liabilities – other financial liabilities      2,172 180
Current financial liabilities  
Trade and other payables – other financial liabilities      2,190 2,964
Trade and other payables – non financial liabilities      6,070 3,013
Total trade and other payables       8,260 5,977
  
There is no material difference between the book value and the fair value of these financial assets and financial liabilities.
Market risk
Foreign exchange risk
Currency exposures at 31 May 2009 were not significant. Transactions are denominated in the local currency. 
The table below shows the Company’s currency exposures. These consist of the monetary assets and liabilities of the 
Company that are not denominated in the Group’s reporting currency, which is UK pounds sterling.
        2010 2009 
        £000s £000s
Net foreign currency monetary assets:  
Cash and cash equivalents – US Dollars       304 31
The Directors consider this risk to be minimal and any likely movements in rates of exchange would have an immaterial 
impact on the results and net assets of the Company.
Interest rate risk
The Company finances itself through a combination of equity and short term debt. The Company’s policy is to borrow on 
a floating rate basis and, if appropriate, it will enter into arrangements to fix the cost of borrowings. The Company has not 
used interest rate derivatives in the year.
The Company has a revolving loan facility which is at floating rates based on HSBC Bank’s sterling base rate plus 2.0%. 
The terms of this facility are due for renewal on 17 November 2010 and at the statement of financial position date no 
amount was drawn down. Allocate Software plc
Annual Report and Accounts 2010
57
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the 
Company. In order to minimise this risk the Company endeavours only to deal with companies which are demonstrably 
creditworthy and this, together with the aggregate financial exposure, is continuously monitored. The maximum 
exposure to credit risk is the value of the outstanding amount.
The Company has trade receivables resulting from sales of products and services, which the management consider to be 
of low risk, other receivables consist predominantly of deposits and prepayments. The management do not consider that 
there is any concentration of risk within either trade or other receivables.
Deposits of cash are placed only with financial institutions whose credit rating is high. 
Liquidity risk
Deposits with the Company’s bankers are placed when cash is available surplus to immediate requirements. In addition, 
the Company has a revolving loan facility of £2,000,000 (2008: overdraft facility £1,000,000). At the statement of financial 
position date the amount drawn down was nil. 
The provision of cash for the payment of day to day business commitments is carefully monitored and forecasts are made 
of future cash requirements. There are no significant single amounts due for payment in the foreseeable future other than 
those arising in the normal course of business.
Capital risk management
The Company’s capital management objectives are to ensure its ability to continue as a going concern and to provide an 
adequate return to shareholders. The Company will also seek to minimise the cost of capital and attempt to optimise the 
capital structure. The Company monitors cash balances and prepares regular forecasts which are reviewed by the Board. 
Currently no dividends are paid to shareholders and capital for further development of the Company’s activities is 
achieved by share issues and organic growth. 
Fair value
The fair values of all financial assets and liabilities at 31 May 2010 and 31 May 2009 were not materially different from their 
book values.
28 Leasing commitments
The table shows the total of future minimum lease payments under non-cancellable operating leases for each of the 
following periods:
        2010 2009 
Group        £000s £000s
Land and buildings:  
Within one year       443 394
Two to five years       750 1,018
Over five years        –
       1,193 1,412
Equipment:  
Within one year       14 –
Two to five years       23 –
Over five years        –
       37 –
  
        2010 2009 
Company        £000s £000s
Land and buildings:  
Within one year       418 394
Two to five years       720 1,018
Over five years        –
       1,138 1,412
The Company has leases on its office premises, 180 Piccadilly, London W1J 9ER which expires on 4 March 2014 and Unit 6 
Rossmore Business Village, Inward Way, Ellesmere Port, CH65 3EY, which expires on 17 June 2015. The total expense 
recognised in the year was £432,000 (2009: £207,000).  58
Allocate Software plc
Annual Report and Accounts 2010
Financial statements
Notes to the financial statements
For the year ended 31 May 2010
29 Related party transactions
The Group had no related party transactions in either 2010 or 2009. 
 
The Company had the following:
The Company rents office space in Chester from Mr C. Lee, a former partner of Baum Hart and Partners and now a senior 
manager with the Company. The rental amounts to £24,000 (2009: £24,000) per annum. 
        2010 2009 
        £000s £000s
Intercompany sales        1,645 833
Intercompany purchases        (641) (581)
       1,004 252
  
At the year end the Company had the following loan balances with subsidiaries:
        2010 2009 
        £000s £000s
Allocate Software Inc.       (64) (96)
Allocate Software Worldwide       238 377
Allocate Software Technology Systems Limited      (165) 74
Allocate Software Sendirian Berhad       178 109
Allocate Software PTY Ltd       1,433 21
Time Care AB       (451) –
       1,169 485
All intercompany balances are non-interest bearing and are repayable on demand. 
30 Contingent liabilities
Neither the Group nor the Company had any contingent liabilities at either 31 May 2010 or 31 May 2009.
31 Events after the statement of financial position date
There are no events after the statement of financial position date to disclose.
32 Capital commitments
Neither the Group nor the Company had any capital commitments at either 31 May 2010 or 31 May 2009. Allocate Software plc
Annual Report and Accounts 2010
59
Directors and Advisers
Company Registration Number
2814942
Registered office
180 Piccadilly
London
W1J 9ER
Website
www.allocatesoftware.com
Telephone number
+44 (0)20 7355 5555
Fax number
+44 (0)20 7355 5588
Directors
T H Osborne
I J Bowles
C D Gale
A A Swann
J I Lang
M J S Loveland
R J Morgan-Evans
A R D Pringle
Bankers
HSBC Bank plc
65 Packhorse Road
Gerrards Cross
Buckinghamshire
SL9 8PH
Financial public relations
Hansard Group
14 Kinnerton Place South
London
SW1X 8EX
Financial advisers and Brokers
Numis Securities Limited
10 Paternoster Square
London
EC4M 7LT
Registrars
Capita IRG plc
Bourne House
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Solicitors
Taylor Wessing LLP
5 New Street Square
London
EC4A 3TW
Auditors
Grant Thornton UK LLP
Registered Auditors
Chartered Accountants
Grant Thornton House
Melton Street
Euston Square
London
NW1 2EP 60
Allocate Software plc
Annual Report and Accounts 2010
Financial statements
Notes Delivering 
World Class 
Performance


 Allocate Software plc  Annual Report and Accounts 2010
Allocate Software plc
180 Piccadilly
London
W1J 9ER
Tel: +44 (0)20 7355 5555
Fax: +44 (0)20 7355 5588
www.allocatesoftware.com