Advanced Computer Software Group plc
Munro House 
Portsmouth Road 
Cobham 
Surrey KT11 1TF
T: +44 (0) 8451 606 162 
F: +44 (0) 1932 584 001 
E: investor-relations@advancedcomputersoftware.com 
www.advancedcomputersoftware.com
 
Advanced Computer Software Group plc 
Annual report 2013
Unlocking  
efficiencies
Advanced Computer Software Group plc  Annual Report 2013 This report has been printed in the UK. Our printers are accredited with the FSC  
chain of custody. All inks are vegetable-based. The paper is fully recyclable and 
biodegradable. If you have finished reading this report and no longer wish to retain it, 
please pass it on to other interested readers and recycle it. Thank you.
Designed and produced by The College  www.the-college.com
Profile
Advanced Computer Software Group plc  
is a leading provider of software and  
IT services to the public, private and  
not for profit sectors which enable 
organisations to improve efficiency ,  
reduce costs and drive growth.
The Group’s strategy – to develop the 
business through a combination of strong 
organic growth and complementary 
acquisitions – has resulted in a substantial, 
robust and cash generative organisation. 
Pro-forma
*
 turnover, following the  
key acquisition of Computer Software 
Holdings in March 2013, has grown  
to more than £190m in less than five years.
The Group now employs approximately 
1,900 staff servicing 20,000 customers  
from eight regional offices across the UK.
Advanced is listed on AIM (symbol ASW) 
and is an AIM UK Top 50 company .
Contents 
Overview
1  Operational and financial  
highlights
2 Business at a glance
4  U n l o c k i n g e f fi ci e n ci es :  
promoting growth
6 Chairman’s statement
Business review
8 Chief Executive’s review
11 Operating review
14 Financial review
17  Principal risks and uncertainties
1 8    C or p or a t e s o c i a l r e s p on s i b i l i t y 
statement
Governance
20 Board of directors
22  Statement of directors’ responsibilities
23 Directors’ report 
26 Corporate governance statement
29 Audit Committee report
31 Directors’ remuneration report
34  Independent auditor’s report
Financials
35 Consolidated income statement
3 6   C o n s o l i d a te d s t a te m e n t  
of comprehensive income
37  Consolidated balance sheet
38  Consolidated cashflow statement
3 9   C o n s o l i d a te d s t a te m e n t  
of changes in equity
40   Notes to the consolidated  
financial statements
71  Company balance sheet
72   Notes to the financial  
statements of the Company
75 Company information
*
 As if all acquisitions were present from 1 March 2012. Advanced Computer Software Group plc
Annual Report 2013
1
Overview Business review Governance Financials
Operational and  
financial highlights
Financial highlights Operational highlights
 > Strong revenue growth of 23% to £120.9m  
(2012: £98.2m) with organic growth* of 9% from:
 − Health & Care up 13% 
 − Business Solutions up 6% 
 − 365 Managed Services up 9% 
 > Adjusted EBITDA** up 12% to £27 .0m (2012: £24.1m)
 > Pre-tax profit up 42% to £9.2m (2012: £6.4m)
 > Adjusted pre-tax profit** up 14% to £24.1m  
(2012: £21.2m) 
 > Adjusted EPS
†
 up 12% to 5.6p (2012: 5.0p) 
 > Maiden dividend of 0.4p per share proposed
 > Cash conversion
‡
 of 108% (2012: 105%), cash 
generated from operations £26.7m (2012: £24.1m)
 > Net cash of £30.9m (2012: net debt £1.1m)
 > Excellent revenue visibility: 
 − Recurring revenue 57% (2012: 57%) with 
approximately a further 25% of repeating revenue
 − Future contracted revenue increased by  
£79.1m to £189.1m (2012: £110.0m), following  
the acquisition of CSH
 > Three strategic acquisitions during the year
 > Major supplier of software and services  
to approximately 85% of providers to new  
NHS 111 service
 > Mobile licence sales growth maintained –  
now over 25,000 signed
 > Key contract wins for Advanced 365 contributing  
to a steady rise in revenue under contract
 > Key acquisition post year end – Computer Software 
Holdings in March 2013 for £107.0m providing 
business solutions to SMEs, the not for profit sector 
and the legal profession
*
  Calculated on a like-for-like basis.
**
  Before acquisition costs, share-based payments and amortisation of acquired 
intangible assets.
†
  Before acquisition costs, share-based payments, amortisation of acquired 
intangible assets and tax adjustments.
‡
  Cash generated from continuing operating activities as a percentage of  
adjusted EBITA. Advanced Computer Software Group plc
Annual Report 2013
2
Business  
at a glance
Advanced is structured as three divisions. Together, these divisions 
provide a range of software and IT services that enable public, 
private and third sector organisations to retain control, improve 
visibility and gain efficiencies through streamlined processes
 
Health & Care
Advanced Health & Care is a leading supplier of 
patient management systems to providers of urgent 
and unplanned care, community care, care at  
home and residential care. The division is a leading 
innovator in the development of mobile applications 
for community based care.
Revenue
£26.2m
(2012: £22.7m)
EBITDA
£7 .2m
(2012: £6.2m)
Products
 > Call handling workflow management and clinical care referral management  
for urgent and unscheduled care
 > Patient administration and clinical care management for community care  
and mental health providers
 > Mobile solutions for community clinicians and care workers
 > Rostering and workforce management for providers of care at home
 > Administration, financial management and care management for residential  
care providers
 Business Solutions
Advanced Business Solutions delivers a range  
of back office software solutions to a wide variety  
of customers in the healthcare, financial services, 
banking, retail, transport, distribution and logistics,  
not for profit, education and housing sectors. These 
solutions are deployed as the traditional licence and  
services model or as hosted, cloud-based models in 
conjunction with Advanced 365 Managed Services.
Revenue
£59.9 m
(2012: £53.9m)
EBITDA
£16.6m
(2012: £15.6m)
Products
 > Financial and human capital management for enterprise and  
mid-market applications
 > Corporate and financial analytics
 > Collaborative planning, budgeting and forecasting
 > Procurement
 > Document management
 > Supply chain management and warehousing
 > Back office and case management for legal firms
 > Legal forms distribution
 > Ticketing and CRM
 > Field services management
 365 Managed Services
Advanced 365 Managed Services focuses on the 
delivery of IT services in support of Group products 
and to a wide range of direct customers. Services 
provided include outsourcing, cloud computing, 
application development and support, and unified 
communications. Solutions can be cloud-based, such 
as Software as a Service (SaaS), or delivered as a fully 
managed service with software hosted in Advanced’s 
own data centre, in a data centre of the customer’s 
choice, or at the customer’s own premises.
Revenue
£34.7 m
(2012: £21.8m)
EBITDA
£5.1m
(2012: £4.4m)
Services
 > Complete IT outsourcing from desktop to data centre
 > Modular outsourcing arrangements such as service desk or desk-side support
 > Core IT infrastructure outsourcing 
 > Application hosting and management
 > Bespoke application design
 > Development and support of e-commerce systems
 > Unified communications design, deployment and management
 > Legacy software management Advanced Computer Software Group plc
Annual Report 2013
3
Overview Business review Governance Financials
 
Health & Care
Advanced Health & Care is a leading supplier of 
patient management systems to providers of urgent 
and unplanned care, community care, care at  
home and residential care. The division is a leading 
innovator in the development of mobile applications 
for community based care.
Revenue
£26.2m
(2012: £22.7m)
EBITDA
£7 .2m
(2012: £6.2m)
Products
 > Call handling workflow management and clinical care referral management  
for urgent and unscheduled care
 > Patient administration and clinical care management for community care  
and mental health providers
 > Mobile solutions for community clinicians and care workers
 > Rostering and workforce management for providers of care at home
 > Administration, financial management and care management for residential  
care providers
 Business Solutions
Advanced Business Solutions delivers a range  
of back office software solutions to a wide variety  
of customers in the healthcare, financial services, 
banking, retail, transport, distribution and logistics,  
not for profit, education and housing sectors. These 
solutions are deployed as the traditional licence and  
services model or as hosted, cloud-based models in 
conjunction with Advanced 365 Managed Services.
Revenue
£59.9 m
(2012: £53.9m)
EBITDA
£16.6m
(2012: £15.6m)
Products
 > Financial and human capital management for enterprise and  
mid-market applications
 > Corporate and financial analytics
 > Collaborative planning, budgeting and forecasting
 > Procurement
 > Document management
 > Supply chain management and warehousing
 > Back office and case management for legal firms
 > Legal forms distribution
 > Ticketing and CRM
 > Field services management
 365 Managed Services
Advanced 365 Managed Services focuses on the 
delivery of IT services in support of Group products 
and to a wide range of direct customers. Services 
provided include outsourcing, cloud computing, 
application development and support, and unified 
communications. Solutions can be cloud-based, such 
as Software as a Service (SaaS), or delivered as a fully 
managed service with software hosted in Advanced’s 
own data centre, in a data centre of the customer’s 
choice, or at the customer’s own premises.
Revenue
£34.7 m
(2012: £21.8m)
EBITDA
£5.1m
(2012: £4.4m)
Services
 > Complete IT outsourcing from desktop to data centre
 > Modular outsourcing arrangements such as service desk or desk-side support
 > Core IT infrastructure outsourcing 
 > Application hosting and management
 > Bespoke application design
 > Development and support of e-commerce systems
 > Unified communications design, deployment and management
 > Legacy software management Advanced Computer Software Group plc
Annual Report 2013
4
Unlocking efficiencies: 
promoting growth
Cost reduction and increased productivity continue  
to be key business drivers for organisations in both the 
public and private sectors
Managed services, including the transitioning of Group 
customers to cloud-based platforms, continues to provide 
a cost-effective and robust solution for companies and 
organisations to streamline their IT functions and create 
a scaleable platform for future expansion plans. 
Unlocking
efficiencies
Advanced 365 
Advanced 365 secures £2.5m/five-year managed 
services contract with Ruffer LLP
Independent investment management firm  
Ruffer has seen considerable growth over the last  
five years and in 2013 reviewed the management of 
its IT infrastructure to ensure it was able to support future 
growth. Ruffer chose Advanced to manage its entire 
IT estate for the next five years, comprising 100 servers 
across London, Edinburgh and Hong Kong. Advanced 
will also provide a 24/7 IT services help desk and will 
manage both Ruffer’s primary and disaster recovery 
infrastructure to ensure that the business can continue 
to operate in an emergency and Ruffer clients 
continue to receive a first-class service.
 
“Advanced will create an environment of highly 
available IT services whereby our investment  
and operational teams have the business systems  
and technology available to them when needed. 
Delivering the highest quality service to our clients  
is of paramount importance and we are confident 
that Advanced will allow us to continue to meet  
this challenge and drive the business forward.”
David Francis
Chief Operating Officer 
Ruffer LLP Advanced Computer Software Group plc
Annual Report 2013
5
Overview Business review Governance Financials
Advanced works with its customers to achieve optimal 
performance through an expanding range of software 
products and services that demonstrate flexibility , 
effectiveness and an early return on investment.
In FY13, the Group’s ability to support its business 
customers in driving growth through improved visibility 
and control was strengthened by the addition to the 
portfolio of corporate performance management and 
business intelligence tools.
During the year Advanced commenced deployment of 
its new community patient access system – Advanced 
Community. Advanced Community helps community 
care providers to deliver improved quality of care by 
reducing the administration burden whilst remaining 
fully compliant with current care regulations. The 
product’s mobile functionality enables care staff to view 
and record patient information at any time, even when 
a mobile signal is not available, to facilitate real-time 
workload management.
Kent Community Health 
NHS Trust
Advanced Community was one of four systems to 
be shortlisted by the Trust during the procurement 
process. The system will replace multiple paper 
and electronic-based systems and will be used  
to deliver integrated care in the community 
including referral management, care planning, 
assessments, patient records, bed management 
and appointment booking.
“Our clinicians are excited about Advanced 
Community because it will provide an integrated 
approach to care. It will also free up administration 
time and cut duplication of effort, allowing 
clinicians to see more patients and spend longer 
with patients during visits.”
Eldon Macarthur
Kent Community Health NHS Trust
Warrington Borough Council 
Warrington Borough Council has reduced financial 
reporting time from three weeks to two weeks with 
Advanced’s budgeting and forecasting solution.
Collaborative Planning integrates with the  
Council’s SAP finance system and simplifies the 
entire budgeting process, making it easier to input 
and analyse information. The solution reduces 
reporting time and increases reporting accuracy 
by providing real-time information through a  
single web-based system and allowing managers  
to compare budgets with forecasts on or off site.
“The latest government cuts mean we are under 
constant pressure to find ways to save costs and 
time whilst maximising efficiency. We talked to two 
other councils, which are already seeing significant 
benefits from using Collaborative Planning,  
and this gave me confidence in the solution and 
reassured me that my costs and time saving goals 
were achievable.”
Shaer Halewood, Chief Accountant
Warrington Borough Council
Unlocking
efficiencies
Unlocking
efficiencies Advanced Computer Software Group plc
Annual Report 2013
6
Chairman’s 
statement
In less than five years, Advanced has grown from a company 
formed to consolidate the fragmented healthcare software market 
to become one of the largest listed UK-based software companies
This year saw Advanced continue its unbroken record  
of organic growth and the selection and acquisition  
of businesses, both in the healthcare sector and from  
the accounting and back office sector, that are a  
good fit with the Group’s existing structure and which  
offer significant opportunity for cross-selling goods  
and services. 
The Group achieved strong organic growth* of 9%  
and completed three strategic and complementary 
acquisitions.
Group revenue from continuing operations was  
£120.9m, up 23%, and adjusted EBITDA** rose  
12% to £27 .0m. Basic earnings per share increased  
by 44% to 2.6p per share (2012: 1.8p). Adjusted earnings 
per share increased by 12% to 5.6p per share. These 
excellent results were again underpinned by strong  
cash conversion
‡
 of 108%.
Approximately 57% of Group revenue was contracted 
and recurring, a clear signal of the quality and robust 
nature of future revenue and profitability. In addition,  
the customer retention rate remained high – a direct 
result of the Group’s focus on delivering products and 
services that are key to customers’ operations.
In April 2012 Fabric Technologies was acquired  
for £4.6m. Fabric, with annual revenue of £11.2m, 
provides unified communications, linking together 
various different forms of communication, such as  
PCs, telephones and video conferencing, in a single  
integrated infrastructure that promotes collaboration; 
thus helping businesses to be more agile and responsive.
Michael Jackson
Chairman
£120.9m
Revenue up 23%
£27.0m
Adjusted EBITDA up 12%
5.6p
Adjusted EPS up 12% Advanced Computer Software Group plc
Annual Report 2013
7
Overview Business review Governance Financials
Strand Technology , with annual revenue of £1.0m,  
was acquired for £2.0m in September 2012 to  
provide specialist mental health clinical and patient 
administration capabilities to complement the Group’s 
new product, Advanced Community. Strand is a  
leading supplier of clinical care management solutions 
to community and mental health organisations.
In December 2012, Advanced’s public sector customer 
base was extended by the acquisition of Serco Learning 
for £7 .3m. Serco Learning has annual revenue of 
approximately £13.5m and supplies business solutions  
to the education sector. Now renamed Advanced 
Learning, the business has become part of Advanced’s 
Business Solutions division to gain best advantage from 
cross-selling opportunities.
Since the year end, the Group has acquired Computer 
Software Holdings (CSH) for £107 .0m in cash. CSH 
revenue for the 12 months to February 2013 was £61.2m, 
mostly arising from the supply of accounting and back 
office solutions to SMEs, and EBITDA before synergies was 
£13.1m. Advanced’s relationship with CSH dates back to 
before its private equity ownership, when it was known 
as Computer Software Group and was led by current 
Advanced directors Michael Jackson, Vin Murria and 
Barbara Firth. The Board’s familiarity with CSH’s products 
and markets is seen as a significant advantage to its 
successful integration, as is the Board’s experience of 
successfully integrating COA Solutions, acquired in 
February 2010 for £100.0m. 
Advanced has grown considerably in the last 12 months 
and has ambitious plans to expand further in coming 
years. The composition of the Board has been enhanced 
to support the next stage in the Group’s development. 
Non-executive director Guy Millward took up his position 
as Chief Financial Officer on 10 June 2013, taking over 
from Barbara Firth who has become Chief Operating 
Officer responsible for acquisitions and integration.  
Paul Gibson remains Chief Operating Officer responsible 
for the day-to-day operations of the Group. The Group is 
also seeking to appoint two new non-executive directors 
to join Mike McGoun and Michael Jackson on the Board.
A maiden dividend of 0.4p per share is proposed to  
be paid in October 2013. The Group’s dividend policy  
is to balance the distribution of profits with the Group’s 
working capital requirements, the ongoing needs  
of the business, and its plans for merger and acquisition 
activities with the focus firmly remaining on growing  
the business. 
I am pleased to look back on another excellent year for 
Advanced. I thank my fellow directors and all employees 
for their contribution to the Group’s continued success  
in the certainty that their enthusiasm and dedication 
will ensure further remarkable achievements in 2014.
Michael Jackson
Chairman
25 June 2013
*
 Calculated on a like-for-like basis.
**
  Before acquisition costs, share-based payments and amortisation of acquired 
intangible assets. 
‡
  Cash generated from continuing operating activities as a percentage  
of adjusted EBITA. Advanced Computer Software Group plc
Annual Report 2013
9 Advanced Computer Software Group plc
Annual Report 2013
8
Chief Executive’s review
Advanced Business Solutions has grown its customer 
base with many new business wins. The division was 
the largest operator in the UK mid-market for finance 
systems and the market leader for NHS finance systems 
in Northern Ireland and Scotland. Several large contracts 
signed in 2012 have successfully reached important 
milestones, illustrating the large-scale IT programme 
management capabilities of the division. 
Our Business Solutions and 365 Managed Services 
divisions have both benefited from opportunities created 
by organisations looking to reduce costs and improve 
efficiency during the economic downturn. Procurement, 
budgeting and forecasting solutions are popular with 
local authorities which are increasingly turning to shared 
services to further improve cost savings. Shared services 
allow a group of local authorities to join together to  
use one shared software solution, thereby paying one 
support fee and one installation fee. The solution can 
additionally be delivered as a hosted managed service, 
to provide further infrastructure cost savings.
Advanced has achieved a great deal in the first  
five years of its history. We have created a strong,  
stable and cash generative business that has been 
tested against an economic backdrop which others  
have found challenging, and which has succeeded  
in growing both organically and by way of sensible  
and strategic acquisitions.
Advanced Health & Care has performed extremely  
well with many new products and services added  
to the portfolio, including solutions addressing the 
growing mental health and community health markets. 
The division won and implemented contracts with  
2 key community health trusts and became the major 
supplier of software and services to approximately  
85% of providers to the new NHS 111 service. 
The adoption of mobile technologies for healthcare is 
seeing significant growth and Advanced is the leader  
in this field. We continue to invest heavily in this area 
with new versions of iConnect on the Gentag phone  
and iNurse on the Android phone being released  
at regular intervals and, later in the year, our new  
Android tablet and smartphone version of iConnect.
In less than five years, Group turnover, including the recent 
acquisition of Computer Software Holdings, has grown from  
£7 .3m to over £190.0m* and adjusted EBITDA from £2.1m to  
more than £40.0m*
Vin Murria
Chief Executive Officer Advanced Computer Software Group plc
Annual Report 2013
9 Advanced Computer Software Group plc
Annual Report 2013
8
Business review Governance Financials Overview
Advanced 365 Managed Services delivered another 
strong performance and key contract wins with 
customers such as Ruffer, South Downs National Parks 
and Doncaster Metropolitan Borough Council have 
resulted in a steady increase in revenue under contract.
The Group has invested in overseas development centres 
to ensure that its products remain technically ahead  
of the competition and in many instances we have 
developed innovative products that are leading edge, 
such as our mobile solutions for healthcare. Offshore 
headcount has grown from 45 in February 2012 to  
76 as at February 2013 and continues to expand  
to support key areas of technology , including  
android-based mobile applications.
Our acquisitions, which complement our organic growth, 
have been selected by measuring against our key 
criteria of high recurring revenue, a good fit with our 
existing businesses, own IP , business critical applications, 
a broad, good quality , customer base to facilitate 
cross-selling and, most importantly , the right price.
We have taken advantage of low interest rates to fund 
our acquisitions and have steadily reduced net debt  
by maintaining our strong cash generation and, in 2012, 
disposing of a non-core part of the business.
Acquisitions in FY13
During the year we made three strategic acquisitions.
 > Fabric Technologies – providing managed services  
and unified communications. Fabric has been fully 
integrated into the Advanced 365 Managed Services 
division where it extends the range of services its 
customers can purchase from one supplier, 
underpinning our ‘one stop shop’ approach. 
 > Strand Technology– a leading supplier of clinical care 
management solutions to providers of mental health 
services. Strand, highly regarded by clinicians and 
used by leading NHS trusts and private providers  
of mental health care, has been integrated into the 
Health & Care division to provide a specialist mental 
health patient administration system capable of 
being incorporated into our wider community 
healthcare portfolio. 
 > Serco Learning – a leading supplier of back office 
software and services to the education sector.  
Now rebranded Advanced Learning, this acquisition 
builds upon the Group’s existing relationships in the 
education sector. Pre-acquisition, millions of pounds 
had been invested in the development of a new 
software product, Progresso, to run alongside its current 
product Facility , but this had not been completed. 
Advanced plans to finish the development of the  
new product over the next six months to provide  
an upgrade path for existing customers and give  
new customers the best new technology. Advanced  
has begun the integration of Advanced Learning  
and is expecting to complete the transition by 
February 2014.
Acquisition of Computer Software Holdings
Following the year end we commenced the next phase 
of our growth plan by acquiring Computer Software 
Holdings (CSH) in March 2013. 
CSH was grouped into four divisions, each broadly 
serving a common end user market:
 > Accountancy and Business Solutions (ABS) – providing 
accounting, ERP and business management software 
to small and medium sized entities
 > Legal and Case Solutions (LCS) – legal software and 
forms provision for solicitors, barristers and coroners
 > Not for Profit (NFP) – software solutions for charities, 
membership organisations and educational 
establishments
 > Information, Technology and Compliance (ITC)  
– comprising IT modernisation services and  
ticketing solutions.
Michael Jackson, Vin Murria and Barbara Firth were  
all directors of CSH up to the time it was taken private  
by HgCapital in April 2007 for a consideration of £100.0m, 
when the results for the year ended 28 February 2007 
showed revenue of £43.9m and EBITDA of £6.0m.  
CSH underwent several transformations under different 
owners but ultimately returned to HgCapital’s ownership 
in December 2011 until it was sold to Advanced in 
March 2013 for £107 .0m, when the results for the year  
to 28 February 2013 showed revenue of £61.2m and 
EBITDA of £13.1m. Advanced Computer Software Group plc
Annual Report 2013
11 Advanced Computer Software Group plc
Annual Report 2013
10
Current trading and outlook
Advanced continues to trade well. Turnover is 
underpinned by strong recurring revenue, giving 
excellent revenue visibility , and low customer churn.
There are opportunities for further organic growth  
in the core business, particularly in mobile solutions, 
collaboration, community healthcare, shared services 
and cloud enablement. 
Following the acquisition of CSH, the Group is in  
a strong position to exploit the increased number  
of cross-selling and core product development 
opportunities. We will also continue to identify  
and make earnings-enhancing acquisitions that  
are complementary to our existing portfolio.
Turnover of the enlarged Group is underpinned by 
strong recurring revenue, giving excellent revenue 
visibility and low customer churn. Including CSH,  
the Group has some £189.1m of future contracted  
revenue of which £21.2m is in Health & Care, £119.9m in 
Business Solutions and £48.0m in 365 Managed Services. 
73% of the total will be recognised in FY14 and the 
balance from FY15 onwards.
The Group is developing well and I am delighted  
with our progress this year. With the acquisition of CSH,  
I look forward to building on our success to date to create 
a stable, substantial and increasingly profitable business  
of considerable scale. 
Vin Murria
Chief Executive Officer
25 June 2013
The majority of CSH revenue will fall into the Advanced 
Business Solutions division with the remaining revenue, 
comprising managed service and hosting, moving to 
Advanced 365 Managed Services. 
The acquisition of CSH is very similar in terms of size, 
products, method of funding and price to the acquisition 
of COA Solutions (COA) three years ago. COA required  
a change of management style and product investment 
to return to growth within 12 months but provided the 
critical mass and ready-made and robust infrastructure 
that the enlarged Group needed at that stage of its 
development. CSH provides further critical mass and 
brings a number of valuable senior people to the Group. 
More importantly , the business is well known to 
Advanced’s management team, who believe that their 
combined knowledge and experience of the markets in 
which CSH operates not only significantly reduces any 
risk around the acquisition, but also provides substantial 
competitive advantage. 
In order to help fund the acquisition, successful placings 
raised a total of £44.0m net in February and March 2013. 
A bank loan for £105.0m was negotiated with HSBC,  
RBS and Silicon Valley Bank in March 2013 to fund  
the balance of the consideration and provide working 
capital. At completion net debt was £62.5m.
Chief Executive’s review continued
*
  Group turnover and EBITDA calculated on a pro-forma basis ie, as if all 
acquisitions had been present at 1 March 2012. Advanced Computer Software Group plc
Annual Report 2013
11 Advanced Computer Software Group plc
Annual Report 2013
10
Financials Business review Governance Overview
Operating review
Advanced Health & Care 
Advanced Health & Care works with partners in the 
NHS, local government and the private sector to provide 
market-leading clinical and non-clinical IT solutions  
in support of safe, efficient care delivery for the patient, 
and greater information for the care provider. 
The division performed extremely well with revenue 
growth of 15%, of which 13% was organic, from all  
major revenue streams after adjusting for the impact  
of the acquisition of Strand in September 2012. Services 
revenue, driven by the successful roll-out of NHS 111, and 
mobile applications with airtime performed particularly 
well. This strong growth diluted the division’s recurring 
revenue 4 ppts to 59%. EBITDA margin remained steady 
at 27% (2012: 27%).
The search by care providers to find the best and  
most efficient way to manage patient care has driven 
these impressive results. Over 1,300 providers in the UK, 
Middle East and Australasia now use our care solutions.
Patient workflow management is at the heart of the 
Group’s portfolio of products supporting out-of-hours care 
(Adastra and Adastra 1 1 1), mobile patient management 
and care in the community (iNurse, iConnect, Carenotes).
Adastra is designed specifically to manage episodes  
of care quickly and safely in out-of-hours, walk-in and 
telephone-based on-demand settings. The entire patient 
journey is measured and analysed from the initial 
telephone call or arrival, to triage, consultation, 
prescription and referring on to internal or external 
departments or services, through to closure and 
automatic reporting to the patient’s GP.
The rolling out of the new NHS 111 service, to replace 
and improve upon the old NHS Direct service, 
commenced during FY13 and the Group, through its 
specifically targeted call handling and CRM product 
Adastra 111, succeeded in becoming the IT supplier  
of choice to approximately 85% of the service providers 
to the new service.
NHS 111 has reported operational challenges with the 
new service. However, the technical delivery of Adastra 
111 has been extremely successful with high levels of 
availability and performance from both the software 
and the managed services platform.
Providing a greater level of care in the community is  
key to meeting the demands of an ageing population. 
Advanced is at the forefront of using mobile technology 
to optimise cost and patient care benefits. A range of 
clinical and non-clinical solutions helps community  
care providers to reduce costs and improve the quality 
of care given to patients by reducing time spent  
on administration, case management, home visit 
scheduling, referral management, planning and 
messaging to other providers. 
Several NHS Community Trusts are successfully 
deploying iNurse, the mobile variant of the core  
Adastra product which enables community clinicians  
to record and communicate patient care information  
in real time, using smartphone and tablet technology , 
and iConnect. iConnect provides a point of care solution 
for community and social care providers using near field 
communication-enabled mobile phones and a special 
tag fitted at the service user’s home to monitor care 
workers’ visits. The mobile functionality enables care 
providers to view and record patient data from anywhere, 
at any time, even when a mobile signal is not available, 
by using semi-connected environment technology.
Advanced Mobile Communications (AMC) is one of  
the UK’s fastest growing mobilisation specialists, with  
its unique combination of patient management and 
workforce rostering systems, together with the capability 
to provide highly competitive airtime solutions as  
one package. Originally formed to support the mobile 
activities of the Health & Care division, AMC has grown 
rapidly and now offers an extensive telephony product 
family , customised to meet the needs of customers across  
a broad range of sectors. 
In September 2012, Advanced acquired Strand 
Technology for £2.0m. Strand, through its product 
Carenotes, helps mental health clinicians to access full 
mental health records. Mental illness is the largest cause 
of disability in the UK and Carenotes provides a fully 
integrated, web-based, electronic care record solution 
covering all aspects of community and mental health 
care to both community and mental health providers.
Information for Care. Everywhere. Advanced Computer Software Group plc
Annual Report 2013
13 Advanced Computer Software Group plc
Annual Report 2013
12
Business Solutions
Advanced Business Solutions offers highly scalable core 
accounting and financial management, supply chain 
management, warehousing, procurement, HR and 
payroll systems integrated with a range of collaborative, 
document management and business intelligence 
solutions to extend the value and effectiveness of finance 
and HR departments. Businesses and organisations 
across all sectors use Advanced software and services, 
increasingly delivered as a managed or bureau service, 
to drive efficiencies, achieve greater visibility and 
maintain control of their operations. 
Business Solutions performed well with 11% revenue 
growth, of which 6% was organic after adjusting for  
the acquisition of Serco Learning in December 2012  
and the disposal of Cedar HR in the prior year. Revenue  
from services increased significantly as large contracts 
were implemented. However, delivery of these contracts 
was largely by contractors at a lower gross margin 
which led to the EBITDA margin easing 1 ppt to 28%. 
Recurring revenue was 53%, decreasing slightly with 
pressure from public sector renewals.
The division has seen steady growth across all target 
markets as businesses and organisations continue to 
seek new ways to achieve cost savings and optimise 
performance. Demand has soared for performance 
management modules that deliver a return on 
investment period of less than a year such as Spend 
Analytics, Business Intelligence and Collaborative 
Planning. New customers welcomed during the year  
for these modules include Sanofi Aventis, Elektron, 
National Trust and Warrington Borough Council. 
Investment in new modules such as Mobile KPI 
Management and Mobile Requisitioner ensures 
Advanced maintains a competitive edge and  
is generating substantial interest.
Vertical market expertise and a thorough understanding 
of the key drivers within the public sector, such as 
shared services and cloud utilisation, differentiates 
Advanced from its competitors and enables it to win key 
deals with organisations such as Doncaster Metropolitan 
Council, Mid Yorkshire NHS Trust and Central Scotland 
Police. Customers now look at the whole life costs of any 
new solution and Advanced’s products score highly in 
terms of both fit and value for money.
Several large contracts for shared services signed in the 
previous year, including the Group’s largest ever contract 
– with the Northern Ireland Department of Health, Social 
Services and Public Safety – have been progressed 
during the year. This has resulted in a significant 
increase in the number of service days billed reinforcing 
Advanced’s position as a leading provider of cost-
effective shared services solutions to local authorities. 
In the private sector, return on investment is also 
important and the Advanced approach of offering  
a suite of products which combine to increase overall  
cost savings, has been very successful. Activity in  
the HR and payroll space has been fuelled by recent 
legislative changes around pension auto-enrolment 
which has caused some businesses to review and  
assess their needs. This initial interest is often converted 
to a wider interest by the potential benefits offered  
by an integrated system. The Smart Business Suite  
is now one of the most comprehensive financial, 
procurement, payroll, HR, document management, 
business intelligence and performance management 
package in the SME marketplace. 
In December 2012, Advanced acquired Serco Learning 
which provides management information systems  
for the education sector. Prior to the acquisition, 
Advanced had relationships with over 120 educational 
establishments. The education sector presents 
opportunities for Advanced Learning and cross-selling 
opportunities for Advanced 365 and Advanced Business 
Solutions. The Government continues to encourage the 
establishment of free schools and academies and these 
new organisations are expected to review their MIS, 
Finance and IT requirements.
Since the acquisition, the business has been successfully 
rebranded as Advanced Learning and the first phase  
of its integration into the Group has been completed.  
The change of ownership and renewed commitment  
to Facility and continued investment in its new product, 
Progresso, has been well received by the sector.
Operating review continued
Efficiency . Visibility . Control. Advanced Computer Software Group plc
Annual Report 2013
13 Advanced Computer Software Group plc
Annual Report 2013
12
Financials Overview Business review Governance
365 Managed Services
Advanced 365 designs, deploys and operates IT  
services for its customers from the desktop to the data 
centre, relieving organisations of often unpredictable 
capital expenditure and allowing costs to be flexed  
up and down in response to business requirements. 
Advanced 365 resolves the IT infrastructure issues  
and leaves its customers to focus on delivering real 
business differentiators.
The ability to offer an in-house option for delivery  
via the cloud or as an end-to-end managed service, 
incorporating a comprehensive application availability 
based SLA, is a unique selling point for Group products 
and contributes strongly to its cross-selling success. 
The results from this division remained strong with 59% 
revenue growth of which 9% was organic after adjusting 
for the impact of the acquisition of Fabric Technologies  
in April 2012. Recurring revenue remained high at 63%. 
EBITDA margin was 15% (2012: 20%) reflecting the  
lower margin applicable to Fabric transactions for  
third party infrastructure now included in the mix.  
The core Advanced 365 business is well placed to 
maintain its higher margin due to its unique proposition, 
its London-centric business and as the deliverer of an 
application based SLA.
The key growth drivers for 2013 were the delivery of 
cloud-based solutions and the facilitation of collaboration 
through effective and integrated communications.
Advanced 365 has invested significantly in cloud 
technology. Now more than 90% of new business 
includes an element of cloud delivery. Advanced 365’s 
flexibility in service delivery has enabled customers  
to receive services from the Group’s own data centre 
facility or from one of the managed suites maintained  
in shared facilities. The cloud platform was a new 
innovation for FY12 and is now directly delivering  
more than £2.0m revenue contribution per annum.
The continued move towards outsourcing to reduce  
costs, particularly in the public sector, has resulted in 
increased utilisation of shared services. Cost savings  
and efficiencies have been unlocked by offering a 
shared service platform for multiple local authorities 
which, in many cases, supports Group software 
products. Over 16 cross-selling contracts involving 
managed services were signed during the year 
including NHS Kettering, National Trust and Rotherham 
Metropolitan Borough Council. Other new customers 
welcomed during the year included Lotus Cars, General 
Pharmaceutical Council, South Downs National Parks, 
Ruffer, and Procserve. 
In order to maintain their competitive edge, organisations 
need to ensure that teams can communicate and share 
information regardless of location. This has resulted  
in a surge of interest in collaboration and unified 
communications. Advanced 365 is committed  
to helping its clients optimise benefits from unified 
communications by establishing a collaboration 
strategy and then by customising and deploying 
technology around this strategy.
As a result of this highly structured and business-centric 
model, Advanced 365 is now managing more unified 
communication deployments than ever before.  
For example, Charles Stanley and Co. Limited recently 
invested in a unified communications solution which 
was completed in just six months, giving the UK 
stockbroker and investment management firm 
anticipated savings of over £0.1m per year.
In April 2012, Advanced acquired Fabric Technologies 
Limited, which provides IT managed services and 
unified communications, for £4.6m. The two businesses 
are complementary and together offer a wider range of  
skills and expertise to existing and potential customers. 
Fabric’s people have been relocated to the division’s  
City Road, London premises and integration is proceeding 
steadily. Synergies are expected to positively impact the 
Fabric margin from FY14 onwards.
Cloud enablement. 
Collaboration. Advanced Computer Software Group plc
Annual Report 2013
15 Advanced Computer Software Group plc
Annual Report 2013
14
Financial review
Revenue
Group turnover for the year increased 23% to £120.9m 
(2012: £98.2m), including 9% organic growth.
The Health & Care division, including the acquisition  
of Strand in September 2012, grew by 15% to £26.2m 
(2012: £22.7m) overall, 13% organically with growth  
in all major revenue streams. Services revenue from  
the implementation of NHS 111 and mobile applications 
sold with inclusive airtime, contributed significantly  
to the increase. Recurring revenue remains strong at  
59% but was diluted 4 ppts by the higher than usual 
level of services revenue.
The Business Solutions division, including the acquisition 
of Serco Learning in December 2012, grew 11% to  
£59.9m (2012: £53.9m), 6% organically. Services revenue 
increased significantly , due to the implementation of 
large contracts signed in the previous year, with the 
majority delivered by contractors at lower gross margin. 
Pressure from public sector renewals caused recurring 
revenue to decrease 1 ppt to 53%.
The 365 Managed Services division, including the 
revenue of Fabric from May 2012, grew 59% to £34.7m 
(2012: £21.8m), 9% organically. Fabric revenue included a 
high proportion of lower margin third-party infrastructure 
revenue. Recurring revenue increased 4 ppts to 64%.
Financial results
The information provided in this section relates to 
continuing operations unless indicated otherwise. 
Organic growth is calculated on a like-for-like  
basis. Adjusted results exclude one-off items and  
share-based payments.
Divisional results
The Group’s divisional analysis is primarily based on  
the type of software or service supplied to the customer 
base. For the Health & Care division, this is patient care 
management software and services and the rostering 
and scheduling of carers. The Business Solutions division 
supplies financial management and HR software  
and services. 365 Managed Services supplies hosting, 
managed services and systems development.
Revenue 
Adjusted
EBITDA 
Adjusted
EBITDA
percentage
£m 
2013
£m 
2012
£m 
2013
£m 
2012 2013 2012
Health & Care 26.2 22.7 7.2 6.2 27% 27%
Business   
Solutions 59.9 53.9 16.6 15.6 28% 29%
365 Managed 
Services 34.7 21.8 5.1 4.4 15% 20%
Central functions 0.1 (0.2) (1.9) (2.1)
Group results 120.9 98.2 27.0 24.1 22% 25%
Our future revenue under contract has risen £79.1m to £189.1m 
following the acquisition of CSH, providing excellent visibility  
of results to come
Guy Millward
Chief Financial Officer Advanced Computer Software Group plc
Annual Report 2013
15 Advanced Computer Software Group plc
Annual Report 2013
14
Business review Governance Financials Overview
Adjusted EBITDA
Group Adjusted EBITDA (EBITDA before acquisition  
fees and share-based payments) rose 12% to £27 .0m  
(2012: £24.1m), 9% organically . 
EBITDA for Health & Care was £7 .2m (2012: £6.2m), 
maintaining its 27% EBITDA percentage.
Business Solutions’ EBITDA was up 6% to £16.6m (2012: 
£15.6m), with the EBITDA percentage reducing slightly  
to 28% (2012: 29%) due to the increased utilisation of 
contractors to deliver larger projects.
365 Managed Services’ EBITDA was up 16% to £5.1m 
(2012: £4.4m), with the EBITDA percentage reducing  
to 15% (2012: 20%) following the acquisition of Fabric 
Technologies and the proportion of lower margin  
third-party infrastructure included in the mix.
Pro-forma results
The table below shows the pro-forma operating  
results of the Group’s divisions as if the results of all the 
acquisitions made during the year had been included 
from 1 March 2012.
Health
& Care
Business
Solutions
365
Managed
Services
Central
functions
Group
results
Revenue  
(£m) 26.8 71.8 36.0 0.1 134.7
Adjusted EBITDA 
(£m) 7.3 17.6 5.1 (1.9) 28.1
Adjusted EBITDA 
percentage 27% 25% 14% – 21%
Finance costs
The net finance costs for continuing operations were 
£0.5m lower at £1.2m (2012: £1.7m) due to the reduction 
in the revolving credit facility to nil and timely 
repayments of the term loan.
Pre-tax profit
Pre-tax profit of £9.2m was £2.8m higher than the 
previous year, reflecting an increase in adjusted  
EBITDA and a reduction in finance costs. Pre-tax  
profit included the deduction of a non-cash charge  
of £13.2m (2012: £12.8m) for the amortisation of  
acquired intangible assets and £1.2m (2012: £2.0m)  
for share-based payment charges.
Taxation
The Group reported a zero tax charge for the year 
(2012: £0.7m) as a result of adjustments to deferred  
tax following the change in the UK corporation tax  
rate (credit of £0.9m) and prior year adjustments  
(credit: £1.2m). The underlying effective rate excluding 
these adjustments would be 23% (2012: 30%) which  
is lower than the statutory rate of 24% as a result of 
additional R&D relief and the relief in respect of the 
exercise of options of £0.6m less non-tax-deductible 
expenses of £0.5m.
The Group has £5.8m (2012: £6.1m) of trading losses of 
which £1.0m (2012: £1.0m) are expected to be utilised 
against future profits. The balance largely relates to 
losses acquired with the COA group that are unlikely  
to be utilised.
Earnings per share (EPS) 
Adjusted EPS from continuing operations (adjusted  
to exclude one-off acquisition costs, share-based 
payments, amortisation of acquired intangibles and  
tax adjustments) was up 12% to 5.6p (2012: 5.0p).  
Basic EPS from continuing operations was up 44%  
to 2.6p (2012: 1.8p).
2013
Pence per
share
2012
Pence per
share
Basic EPS 2.6 1.8
Amortisation of acquired 
intangible assets 3.8 3.7
Share-based payments 0.5 0.6
Acquisition costs 0.1 –
Tax effect on adjustment (1.4) (1.1)
Adjusted EPS 5.6 5.0
Cashflow and net cash/debt
Cash generated from operating activities was £26.7m 
(2012: £24.1m). Operating cash conversion was 108% 
(2012: 105%) of adjusted EBITA.
The resulting net cash position as at 28 February 2013 
was £30.9m, £3.2m before the £27 .7m net placing in 
February 2013, compared to a net debt position of  
£1.1m as at 29 February 2012, and comprised £33.4m 
cash (2012: £9.9m), £2.5m term loan (2012: £10.0m)  
and £nil revolving credit facility (2012: £1.0m).
Since the year end and following the acquisition of CSH, 
the Group has reverted to a net debt position. Net debt  
at the completion of the CSH acquisition was £62.5m. Advanced Computer Software Group plc
Annual Report 2013
17 Advanced Computer Software Group plc
Annual Report 2013
16
Financing
During the year the Group repaid £7 .5m of its term loan 
and £1.0m of the revolving credit facility. Repayments 
and withdrawals in connection with the revolving credit 
facility were made during the year in accordance with 
cashflow requirements. At the year end none of the 
revolving credit facility and £2.5m of the term loan 
remained outstanding.
On 7 March 2013 the Group negotiated a new banking 
facility of £105.0m, with HSBC, RBS and Silicon Valley 
Bank. The facility is structured as a £55.0m term loan  
and a £50.0m revolving credit facility both falling  
due for repayment in September 2016.
The interest rate on both the term loan and revolving 
credit facility varies between 2.25% and 3% over LIBOR 
depending on the Group’s net debt to EBITDA ratio.
The directors are confident that the Group will continue 
to meet its financial covenants and has adequate 
resources to continue in operational existence for  
the foreseeable future and therefore continue to adopt 
the going concern basis in preparing the annual 
financial statements.
Capital expenditure and research  
and development
Capital expenditure of £2.7m includes investment  
of £1.4m in infrastructure to support the growth in  
the 365 Managed Services division and £0.4m of 
improvements to Group properties.
Expenditure on research and development in the year 
was £9.2m (2012: £8.5m) of which £2.1m (2012: £1.8m) 
was capitalised in accordance with IFRS. Amortisation  
of previously capitalised research and development in 
the year was £1.1m (2012: £0.7m).
Discontinued operations
On 22 September 2011 the Group sold Cedar HR Software 
to Capita IT Services Holdings for £16.0m (net of fees).  
The net assets of £0.5m together with the goodwill of 
£5.6m and intangibles of £5.1m have resulted in a profit 
on sale of £4.9m.
The results for the discontinued operation in the reported 
period were as follows:
Seven months to
22 September
2012
£m
Revenue 3.6
Adjusted EBITDA 1.3
Profit on disposal 4.9
Profit after tax 5.2
Guy Millward
Chief Financial Officer
25 June 2013
Financial review continued Advanced Computer Software Group plc
Annual Report 2013
17 Advanced Computer Software Group plc
Annual Report 2013
16
Financials Business review Governance Overview
Principal risks and 
uncertainties
The Group has a process for identifying risks that could affect business operations  
and consequently the financial results. Further information on this process is set out  
in the corporate governance statement on pages 26 to 28. 
Advanced considers the following to be its principal risks:
Risk category Specific risks Mitigation
Economic The Group’s markets fall into decline.
Weak economic conditions affect the  
ability of the Group’s clients to do business.
The Group has a diversified portfolio of products, services 
and markets, so as to mitigate dependence on any one 
product, service or market.
Innovative solutions are offered in a variety of ways to best 
suit each customer’s business needs, including the traditional 
licence and services model or payment by subscription via 
Software as a Service.
Strategic The Group fails to execute its M&A  
strategy successfully.
The Group fails to properly integrate 
acquisitions made.
The strategy remains to identify and make earnings-
enhancing acquisitions with strong recurring revenue 
streams, that are complementary to the Group’s existing 
portfolio.
The Group has a specific integration team led by a 
designated Board director that has successfully integrated 
all acquisitions made to date.
Competition The Group operates in highly competitive 
markets characterised by rapidly changing 
technology and increasingly sophisticated 
customer requirements. Failure to respond 
promptly and effectively may lead to loss  
of market share.
Significant investment is made in product development.
Dedicated development resource centres exist in  
Bangalore and Baroda, India, which continually review  
and update products.
Systems failure  The loss or failure of the 365 Managed  
Services systems would impact on both  
the Group’s operations and those of its  
hosted clients.
All critical new business and client focused systems have 
‘High Availability’ built in by design.
Regular testing of business continuity/disaster recovery 
plans is maintained, including annual full live  
scheduled testing.
Project delivery The Group contracts for multiple projects each 
year to deliver products and services to clients. 
Failure to deliver large or even smaller projects 
can result in significant financial loss.
The Group has proven procedures and policies for project 
delivery and regularly measures and reviews project 
progress. Problem projects involve senior management  
at an early stage.
Financial Incomplete management/financial 
information informing Board/management 
decisions could result in the business being 
managed sub-optimally and adversely  
affect performance.
The Group may be unable to finance  
growth or acquisitions.
Detailed management information on each division is 
circulated monthly and reviewed by the management 
board and Group Board.
The Group has a £105.0m term loan and revolving credit 
facility taken out in March 2013.
The Group continues to be highly cash-generative,  
improving its cash conversion to 108% during the year.
People The Group’s success relies on recruiting, 
developing and incentivising senior 
management and other key employees,  
the loss of whom may affect the financial 
performance of the Group.
A comprehensive vetting and recruitment process exists.
There is continual development of employees through 
objective setting and regular appraisals.
An in-house development and training facility provides  
a structured learning environment for the professional 
development of all staff.
Key employees are incentivised via bonus plans and  
share schemes.
Compliance The Group is subject to a wide range of  
UK legislation and regulation.
There is regular interface with the Group’s external advisers.
Appropriate policies and procedures are in place across the 
Group, including staff training. Advanced Computer Software Group plc
Annual Report 2013
19 Advanced Computer Software Group plc
Annual Report 2013
18
Corporate social 
responsibility statement
Each business division is responsible for its own corporate 
responsibility activities at a local level coupled with 
Group-wide initiatives focused on business conduct and 
ethics, health and safety , the development of talent and 
environmental impact.
Social responsibilities
Employees 
The Group firmly believes in equal opportunities and 
treats potential recruits and employees fairly , regardless 
of disability , race, gender, age, gender orientation or 
religious and political beliefs.
The Group aims to maintain a high level of staff retention 
by providing a positive work environment in which all 
staff can thrive. This is illustrated by (i) recognising and 
rewarding outstanding performance via bonus plans 
and participation in share option schemes; (ii) promoting 
training and personal development; and (iii) ensuring 
that career success and progression within the Group  
is solely determined by ability and achievement.
Development and training
During the year, the Group extended the range of 
courses offered by Advanced University , its in-house 
training facility which provides a structured learning 
environment for professional development and is 
available to all Group employees. The University  
is divided into colleges representing the following 
functional areas: Management Development; 
Consultancy Development; Selling Development; 
Marketing Development; Technology Development;  
and Operational Development. A programme of courses 
to MBA level has been developed, addressing core 
competencies as well as vital soft skills. During the year, 
67 courses were run across the Group which were 
attended by 425 delegates. During the same period, 
more than a quarter of the Group’s employees had 
completed one or more Advanced University courses.
Employee engagement
In April 2012, the Company launched Advanced 
Awareness, a news site for all Advanced employees.  
The content is updated on a monthly basis and is 
intended to keep staff informed on developments  
across the Group, from acquisitions to new starters.
Health and safety
The provision of a safe, healthy and productive work 
environment for all Group employees, contractors and 
visitors is a priority for which all management and 
employees are held accountable. Responsibility is 
delegated to the managing directors of each business 
unit for ensuring that their business complies with Group 
policies and health and safety legislation. Each business 
unit reviews its own strategy and performance on a 
regular basis. Any issues are reported to the monthly 
meeting of the management board.
Charitable donations
The Group supports various local community projects 
from time to time and also contributes financial  
support to charitable organisations. In the year ended  
28 February 2013, the Group made charitable donations 
of £24,000 (2012: £0.3m) including a donation of £15,000  
to The Prince’s Trust for membership of its Technology 
Leadership Group.
The environment
The Group operates in a business sector that has a  
low environmental impact. However, it recognises the 
importance of its responsibilities to the environment and 
adheres to environmental regulations at all times. The 
Group has identified its principal areas of environmental 
impact as energy use, paper and printing and travel.
Employees are expected to switch off lights and 
electronic equipment when not in use and business  
units are encouraged to apply for environmental 
accreditation where appropriate. Advanced 365  
Limited holds the Environmental Management System 
accreditation ISO 14001.
The annual report is produced in the UK by printers 
accredited with the Forest Stewardship Council (FSC) 
chain of custody. All inks are vegetable-based and  
the paper is fully recyclable and biodegradable. 
Shareholders are encouraged to receive the annual 
report electronically , thereby saving on production  
and distribution resources and costs.
Advanced recognises its social, 
environmental and ethical responsibilities 
and is committed to managing its  
business responsibly , with integrity  
and transparency . Advanced Computer Software Group plc
Annual Report 2013
19 Advanced Computer Software Group plc
Annual Report 2013
18
Governance Financials Overview Business review
The Group actively participates in the recycling of  
office waste and waste paper and appropriate facilities 
are provided in all offices. Electronic equipment is 
recycled via WEEE-compliant recycling companies.  
The Company also recycles mobile phones, expired 
batteries and light bulbs, which are collected and 
disposed of by authorised recyclers.
The Group recognises that some business travel is 
necessary for the effective management of the business. 
However, it encourages the use of conference calls and 
video conferences wherever possible and facilitates 
working from home, where appropriate.
Environmental initiatives
V1 Limited, the document management software 
company which is part of the Business Solutions division, 
continues to lead the way with its green initiative  
by planting more trees during the year. In June 2012, 
Cheadle Hulme School students teamed up with  
V1 to plant 340 trees in the school grounds as part of  
V1’s environmental initiative, which supports the school’s 
commitment to green principles and its aim to reduce  
its carbon footprint year on year. Tree planting forms 
part of V1’s environmental initiative and ties in with  
the company’s development of ‘paperless office’ software. 
V1 has been planting trees in school grounds and 
sustainable forests throughout the UK since 2006 and  
has planted 4,657 trees to date.
Advanced Business Solutions continues to promote 
Carbon Accounting which automatically tracks  
and budgets organisation-wide carbon emissions.  
The solution, which is integrated with Advanced’s 
OpenAccounts financial management system,  
enables businesses to measure carbon emissions  
quickly and easily and to more effectively budget for  
emissions through integration with the OpenAccounts 
budgeting system.
Environmental awards
During the year, V1 was recognised for its positive 
contribution to the environment, winning a number of 
awards including the Green IT Award 2012, Green Hero 
and Green Apple Awards from The Green Organisation, 
an independent, non-profit environment group dedicated 
to recognising, rewarding and promoting environmental 
best practice around the world. V1 also won the 
Paperless Office & Document Management (Corporate) 
category of the prestigious Software Satisfaction Awards 
for the third year running. The Software Satisfaction 
Awards are run by Sift Media in collaboration with 
Intellect, the UK’s largest technology association.
Advanced Business Solutions, was awarded an 
International Green Hero Award in recognition of  
the environmental benefits of its Human Resource 
Self-Service solution. It also won the Environmental 
Accounting & Management Software of the Year 
category of the Green IT Awards 2012 and Green  
Apple Award for its Carbon Accounting product.
Ethics
Advanced actively promotes integrity in its dealings 
with all its stakeholders.
The Group promotes high ethical standards in carrying 
out its business activities and has clear guidelines for 
dealing with gifts, hospitality , corruption, fraud and the 
use of inside information. All employees must comply 
with the laws and regulations of the country in which 
they operate as well as with Group policies. 
The Group has a whistleblowing procedure which 
enables any employee or third party who feels that the 
normal reporting channels through line management 
are not appropriate, to confidentially report any issues 
around dishonesty , fraud, bribery , malpractice, bullying, 
unfair treatment or unsafe working practices. All such 
reports are notified to the Human Resources Director and 
are independently investigated by senior management 
who are not connected to the report. The outcome of  
any investigation is reported to the Chairman of the 
Audit Committee.
The Group is committed to achieving the highest levels of 
customer service and satisfaction in line with delivering 
high quality , reliable products and services. Advanced 
Health and Care provides clinical and back-office 
software and services to customers in the healthcare 
sector and is conscious of its responsibility to provide 
robust solutions that positively impact the lives  
and wellbeing of patients and vulnerable people 
requiring care.
Advanced Business Solutions is registered to the 
international quality standard, ISO9001:2000.  
Advanced 365 holds the ISO27001:2005, Information 
Security Management System (ISMS) certification  
for its business activities. Advanced Computer Software Group plc
Annual Report 2013
21 Advanced Computer Software Group plc
Annual Report 2013
20
Board of  
Directors
1
3
6
2
4
5 Advanced Computer Software Group plc
Annual Report 2013
21 Advanced Computer Software Group plc
Annual Report 2013
20
Overview Business review Governance Financials
1 2
5 6
Michael Jackson
Chairman
Michael became Chairman of Advanced in August 
2008 and is also Chairman of the Audit Committee.  
He founded Elderstreet Investments Limited in 1990  
and is its executive Chairman. For the past 30 years,  
he has specialised in raising finance for the smaller 
companies sector. He was previously chairman  
of FTSE 100 companies, The Sage Group plc and 
PartyGaming plc, and Computer Software Group plc,  
the business that later became Computer Software 
Holdings. He is a director of many quoted and unquoted 
companies, including Elderstreet portfolio companies. 
Vin Murria
Chief Executive Officer
Vin joined Advanced in August 2008 as Chief Executive 
Officer with 25 years’ experience of working for private 
equity-backed and publicly listed companies focusing 
on the software sector. She was formerly Chief Executive 
Officer of Computer Software Group plc, which she  
took private in April 2007 . Her previous roles include 
Chief Operating Officer for Kewill Systems plc, Chairman 
of Leeds Group plc and non-executive director of 
Concateno plc. Vin is a partner at Elderstreet Capital 
and a non-executive director of Greenko plc, an Indian 
energy company.
Guy Millward
Chief Financial Officer
Guy joined the Board as a non-executive director in 
November 2012 and on 10 June 2013 was appointed 
Chief Financial Officer. He has spent the majority of  
his career in the IT industry , most recently as Group 
Finance Director of private equity owned BigHand 
Limited. Previous roles include Group Finance Director of 
listed companies Kewill plc, Alterian plc and Morse plc, 
and at an IT division of GE.
Barbara Firth
Chief Operating Officer,  
Acquisitions and Integration
Barbara was previously Chief Financial Officer of 
Computer Software Group plc where she worked  
closely with Vin Murria and Michael Jackson until the 
merger with IRIS Software Group Limited in July 2007 . 
Following the merger, Barbara was Acquisitions Director 
of the combined group until joining Advanced as  
Chief Financial Officer in September 2009. Following  
the acquisition of Computer Software Holdings in  
March 2013, Barbara was appointed Chief Operating 
Officer with specific responsibility for acquisitions  
and integration.
Mike McGoun
Non-Executive Director
Mike was appointed to the Board in November 2012 and 
chairs the Remuneration Committee. He has a wealth  
of management experience within the IT industry.  
After 10 years at IBM, Mike co-founded a successful 
ComputerLand franchise in 1984. In 1994 he moved to 
SkillsGroup plc (now known as QA plc) as a main board 
director with responsibility for corporate development. 
Most recently , he was non-executive Chairman of Tikit plc, 
a provider of software, consultancy , and services to legal 
and accounting firms in the UK, until its acquisition by 
British Telecom in November 2012.
Paul Gibson
Chief Operating Officer, Operations
Paul was appointed to the Board of Advanced in 
November 2012, having been Chief Operating Officer 
since 2010. Paul was Finance Director at COA Solutions 
for eight years before its acquisition by Advanced in 
2010. Prior to that, he was European Finance Director  
of a NASDAQ-listed systems integrator and spent  
seven years with Oracle where his final role was as  
the director responsible for establishing its European 
shared services centre in Dublin.
3 4 Advanced Computer Software Group plc
Annual Report 2013
PB Advanced Computer Software Group plc
Annual Report 2013
22
Statement of directors’ 
responsibilities 
The directors are responsible for preparing the  
annual report, and the Group and Parent Company 
financial statements in accordance with applicable  
law and regulations.
Company law requires the directors to prepare Group 
and Parent Company financial statements for each 
financial year. As required by the AIM Rules of the 
London Stock Exchange they are required to prepare  
the Group financial statements in accordance with  
IFRSs as adopted by the EU and applicable law and 
have elected to prepare the Parent Company financial 
statements in accordance with UK Accounting 
Standards and applicable law (UK Generally Accepted 
Accounting Practice).
Under company law, the directors must not approve  
the financial statements unless they are satisfied that 
they give a true and fair view of the state of affairs  
of the Group and Parent Company and of their profit or 
loss for that period. In preparing each of the Group and 
Parent Company financial statements, the directors are 
required to:
 > select suitable accounting policies and then apply 
them consistently;
 > make judgements and estimates that are reasonable 
and prudent;
 > for the Group financial statements, state whether they 
have been prepared in accordance with IFRSs as 
adopted by the EU;
 > for the Parent Company financial statements, state 
whether applicable UK Accounting Standards have 
been followed, subject to any material departures 
disclosed and explained in the financial statements; 
and
 > prepare the financial statements on the going  
concern basis unless it is inappropriate to presume 
that the Group and the Parent Company will  
continue in business.
The directors are responsible for keeping adequate 
accounting records that are sufficient to show and 
explain the Parent Company's transactions and disclose 
with reasonable accuracy at any time the financial 
position of the Parent Company and enable them to 
ensure that its financial statements comply with the 
Companies Act 2006. They have general responsibility 
for taking such steps as are reasonably open to them  
to safeguard the assets of the Group and to prevent  
and detect fraud and other irregularities.
The directors are responsible for the maintenance  
and integrity of the corporate and financial information 
included on the Company's website. Legislation in  
the UK governing the preparation and dissemination  
of financial statements may differ from legislation in 
other jurisdictions. Advanced Computer Software Group plc
Annual Report 2013
23 Advanced Computer Software Group plc
Annual Report 2013
PB
Overview Business review Governance Financials
Directors’ report
Principal activities
Advanced is a leading provider of software and  
IT services for organisations in the public, private  
and not for profit sectors delivered through its three 
divisions: Health & Care, Business Solutions and  
365 Managed Services.
Its principal subsidiary undertakings are listed in  
note 23 to the financial statements on page 64.
Business review
The Company is required to produce a business review 
which complies with section 417 of the Companies Act 
2006. A detailed review of the Group’s activities, its key 
performance indicators and a description of the principal 
risks and uncertainties which it faces, can be found in 
the business review section on pages 8 to 19.
Corporate governance statement
The corporate governance statement, which forms  
part of this directors’ report, is set out on pages 26 to 28.
Results and dividends
The results for the year are set out in the consolidated 
income statement on page 35. Continuing Group profit  
for the year after provision for taxation was £9.1m  
(2012: £5.9m).
The Board’s dividend policy is to consider payment  
of a dividend in light of the Group’s working capital 
requirements, the ongoing needs of the business and  
its merger and acquisition activities. Accordingly ,  
the directors recommend the payment of a maiden 
dividend of 0.4p per share (2012: £nil). If approved at  
the annual general meeting, the dividend will be paid 
on 8 October 2013 to shareholders on the register at the 
close of business on 13 September 2013.
Acquisitions
During the year, the Group made a number of 
acquisitions, details of which are set out in the business 
review and note 11 to the financial statements.
Post balance sheet events
On 7 March 2013, Advanced acquired the entire issued 
share capital of Computer Software Holdings for net cash 
consideration of £107 .0m.
Further details are set out in the Chairman’s statement 
and Chief Executive’s review and in note 26 to the 
financial statements.
Research and development
During the year, the Group capitalised £2.1m (2012: 
£1.8m) of development costs relating to internal software 
development in accordance with IAS38. Other research 
and development costs not meeting the criteria for 
capitalisation were written off during the year.
Financial instruments
The Group uses financial instruments to manage certain 
types of risks including those relating to credit, market, 
interest rates, currency exchange and liquidity. Details  
of the objectives and management of these instruments 
and an indication of the exposure of the Group to such 
risks are contained in note 20 to the financial statements.
Political and charitable donations
The Group made charitable donations in 2013 of  
£24,000 (2012: £0.3m) including a donation of £15,000  
to The Prince’s Trust for membership of its Technology 
Leadership Group.
In accordance with Board policy , no political donations 
were made during the year (2012: £nil).
Directors and their interests
The table below sets out the beneficial interests in the 
Company’s shares of those persons who were directors  
at the end of the financial year:
2013
Number of
ordinary shares
2012
Number of
ordinary shares
Vin Murria,  
Chief Executive Officer 36,550,867 36,050,867
Barbara Firth, COO, 
Acquisitions and 
Integration 250,000 250,000
Paul Gibson, COO, 
Operations (appointed  
19 November 2012) Nil N/a
Guy Millward,  
Chief Financial Officer 
(appointed  
19 November 2012) Nil N/a
Michael Jackson,  
Non-Executive Chairman 736,149 1,681,525
Mike McGoun,  
Non-Executive  
Director (appointed  
19 November 2012) Nil N/a
On 14 March 2013, Vin Murria and Barbara Firth each 
acquired 30,250 ordinary shares of 10p each in the 
Company , following the exercise of SAYE options  
at a price of 30p per share. Since the year end, both  
Vin Murria and Michael Jackson have transferred part 
of their shareholdings into self-invested personal pension 
arrangements. No other changes have taken place in the 
above interests of the directors between 28 February 2013 
and 21 June 2013, being the latest practicable date prior 
to publication of this report.
The biographical details of the persons currently serving 
as directors appear on page 21. Advanced Computer Software Group plc
Annual Report 2013
25 Advanced Computer Software Group plc
Annual Report 2013
24
In accordance with the Company’s articles of 
association, Paul Gibson, Guy Millward and Mike 
McGoun, retire as directors, having been appointed 
since the 2012 annual general meeting, but offer 
themselves for re-election. In addition, the Company’s 
articles require that all directors retire at least every  
three years and that a third of the directors retire  
by rotation. At the next annual general meeting,  
Vin Murria retires by rotation and, being eligible,  
offers herself for re-election.
Directors’ powers
The directors’ powers are conferred on them by  
UK legislation and by the articles of association.  
Further details can be found in the corporate 
governance statement on pages 26 to 28.
Directors’ indemnity arrangements
The Company has purchased and maintained 
throughout the year Directors’ and Officers’ liability 
insurance, which gives appropriate cover for any legal 
action brought against the directors. The directors also 
have the benefit of the indemnity provision contained  
in the Company’s articles of association.
Details of directors’ remuneration and service contracts 
are set out in the directors’ remuneration report.
Share capital
Details of the authorised and issued share capital, 
together with the movements in the Company’s issued 
share capital during the year, are shown in note 24 to 
the financial statements.
The Company has one class of ordinary shares which 
carry no right to fixed income. As at 21 June 2013, being 
the latest practicable date prior to publication of this 
report, the Company had issued 429,471,822 fully paid 
ordinary shares of 10p each, which are listed on the 
Alternative Investment Market of the London Stock 
Exchange. Each ordinary share carries the right to  
one vote at general meetings of the Company.
There are no specific restrictions on the size of holding  
or on the transfer of shares which are both governed  
by the general provisions of the Company’s articles of 
association and prevailing legislation. The directors are 
not aware of any agreements between holders of the 
Company’s shares that may result in restrictions on the 
transfer of securities or voting rights.
No person has any special rights of control over the 
Company’s share capital and all issued shares are  
fully paid.
Information on employee share schemes is set out  
in note 25 to the financial statements.
Substantial shareholdings
As at 21 June 2013, the Company was aware of the 
following interests in 3% or more of its issued share capital:
Name of fund manager
Percentage 
of issued 
share capital
M+G Investment Management 16.94
Liontrust Asset Management 9.67
Vin Murria 8.52
Marwyn Investment Management 7.18
Hargreave Hale 5.05
JPMorgan Asset Management 3.80
Ruffer 3.74
Majedie Asset Management 3.48
BlackRock 3.46
NFU Mutual 3.40
Authority to purchase own shares
At the Company’s annual general meeting held on 
28 August 2012, shareholders renewed the Company’s 
authority to make market purchases of up to 53,432,589 
ordinary shares. This authority was not used during the 
year or up to the date of this report. At the 2013 annual 
general meeting, shareholders will be asked to renew 
this authority for another year and the directors will  
once again propose a maximum aggregate number of 
ordinary shares which the Company can purchase of 
less than 15% of the issued ordinary share capital. Details 
are contained in the notice of annual general meeting. 
The Company held no treasury shares during the year  
or up to the date of this report.
Employees
The Group places considerable value on the involvement 
of its employees and keeps them informed on the 
performance of the Group and other matters affecting 
them as employees. This is achieved via formal and 
informal meetings, email and the Company’s website. 
The Group further promotes the involvement of its staff  
in its business aims and performance by linking reward 
to achievement. Many employees are stakeholders in  
the business through participation in share option and 
Sharesave schemes. 
The Company is an Equal Opportunities employer.  
Its policy is to ensure that no job applicant or employee 
receives less favourable treatment on the grounds of 
gender, race, disability , colour, nationality , ethnic or 
national origin, marital status, sexuality , responsibility for 
dependents, religion or belief, trade union activity and 
age. Selection criteria and procedures are kept under 
review to ensure that individuals are selected, promoted 
and treated on the basis of their relevant merits and 
abilities. Fair consideration is given to applications for 
Directors’ report continued Advanced Computer Software Group plc
Annual Report 2013
25 Advanced Computer Software Group plc
Annual Report 2013
24
Overview Business review Governance Financials
employment from disabled people and the retention  
and retraining, where practicable, of employees who 
become disabled is encouraged.
More information relating to employee engagement  
can be found in the CSR Statement on pages 18 and 19.
Supplier payment policy
The Group recognises the importance of good 
relationships with its suppliers and subcontractors. 
Although the Group does not follow any particular  
code or standard on payment practice, its established 
payment policy is to agree payment terms in advance  
of any commitment being entered into and to ensure that 
payments are made in accordance with agreed terms.
Trade creditor days for the Group for the year ended 
28 February 2013 were 34 (2012: 30).
Significant agreements
There are a number of agreements that take effect,  
alter or terminate upon a change of control, such as 
commercial contracts, bank loan agreement and 
employee share plans. The only one of these which is 
considered to be significant in terms of likely impact on 
the business of the Group as a whole is the bank facility 
(as described in note 20 to the financial statements) 
which requires majority lender consent for any change  
of control. Should such consent not be forthcoming, a 
change of control would trigger a mandatory repayment 
of the entire facility. As at 21 June 2013, £84.0m of the 
facility was outstanding comprising £55.0m term debt 
and £29.0m revolving credit facility.
The directors are not aware of any agreements between 
the Company and its directors or staff that provide for 
compensation for loss of office or employment that occurs 
because of a change of control.
Going concern
The financial statements have been prepared on a going 
concern basis as, after making appropriate enquiries, 
the directors have a reasonable expectation that the 
Group has adequate resources to continue to operate  
for the foreseeable future.
Auditors
The directors confirm that, as at the date this report was 
approved, and so far as each director is aware, there is 
no relevant audit information of which the Group’s 
auditor is unaware and each director has taken all the 
steps that he ought to have taken as a director in order  
to make himself aware of any relevant audit information 
and to establish that the Group’s auditor is aware of that 
information.
It is proposed that KPMG LLP will be appointed  
auditor of the Company , replacing KPMG Audit plc.  
The resolution for this change will be proposed at the 
annual general meeting.
Articles of association
The Company’s articles of association may be amended 
by special resolution of the shareholders. The current 
articles can be found on the Company’s website at 
www.advancedcomputersoftware.com. 
Annual general meeting
The annual general meeting will be held at  
Munro House, Portsmouth Road, Cobham, Surrey KT1 1 1TF 
on 30 August 2013 at 2.00pm. Details of the resolutions  
to be proposed are contained in the notice of annual 
general meeting sent to shareholders with this  
annual report.
By order of the Board
Barbara Firth
Director and Company Secretary
25 June 2013 Advanced Computer Software Group plc
Annual Report 2013
27 Advanced Computer Software Group plc
Annual Report 2013
26
Corporate governance statement
Corporate governance
The Board is committed to maintaining high standards 
of corporate governance and managing the Company 
in a flexible, effective and entrepreneurial manner for 
the benefit of all its stakeholders over the long term. The 
Company is not subject to the UK Corporate Governance 
Code (‘the Code’). However, the Board firmly supports 
the principles of good corporate governance as set out  
in the Code and complies, so far as it feels is appropriate 
for an AIM-listed company of its size and complexity ,  
by adopting the Quoted Company Alliance (QCA) 
Corporate Governance Code for Small and Mid-Size 
Quoted Companies 2013 (‘the QCA Code’) except that:
 > not all of the directors forming the Remuneration  
and Audit Committees may be deemed independent, 
as defined by the QCA Code. Michael Jackson  
has links, both current and historical, with other 
directors through their mutual involvement in other 
companies; and
 > the Board does not undertake a formal evaluation  
of its performance, as this is constantly under review 
given its size.
This corporate governance statement, together with  
the directors’ remuneration report and Audit Committee 
report, explains how the Company has applied the 
principles of the QCA Code.
Board responsibilities
The Board’s principal responsibilities are to provide the 
overall vision and leadership for the Company , maintain 
reliable systems of control and deliver shareholder value. 
It determines corporate strategy , reviews the Group’s 
operating and financial performance to ensure it is 
effectively controlled, and is the primary decision-maker 
for all matters considered to be significant to the Group 
as a whole.
There is a formal schedule of matters reserved for 
approval by the Board, which gives it responsibility for:
 > the long term objectives and commercial strategy  
of the Company;
 > the approval of the annual operating and capital 
expenditure budgets;
 > changes to the Group’s capital structure;
 > changes to the Group’s activities;
 > approval of major acquisitions and disposals;
 > corporate governance;
 > approval of treasury policies; and
 > approval of material capital expenditure projects.
The schedule of matters reserved for the Board  
can be viewed on the Company’s website at  
www.advancedcomputersoftware.com/ 
governance.php
Board composition and balance
The Board, chaired by Michael Jackson, comprises four 
executive directors and two non-executive directors.  
The size of the Board allows individuals to communicate 
easily and freely and exercise their individual skills and 
experience in the decision-making process. The directors 
have a wide range of relevant business and financial 
experience and knowledge which is vital to the success 
of the Group. The biographies of the directors can be 
found on page 21.
During the year, one director resigned and three new 
directors were appointed. Mark Watts resigned from  
the Board on 17 September 2012, after four years with  
the Group, in order to concentrate on the earlier stage 
positions in the Marwyn portfolio. Two non-executive 
directors – Mike McGoun and Guy Millward – and  
Chief Operating Officer, Paul Gibson, were appointed  
on 19 November 2012. Following the subsequent 
appointment of Guy Millward as Chief Financial Officer 
on 10 June 2013, the newly-established Nomination 
Committee is seeking to improve the balance between 
executive and non-executive directors on the Board,  
by appointing two further non-executive directors.
The Chairman and Chief Executive Officer have clearly 
defined and distinct roles. The Chairman is primarily 
responsible for the efficient operation of the Board and 
corporate governance. The Chief Executive Officer is 
responsible for implementing the Group’s strategy and 
also leads the communication programme with analysts 
and potential investors.
Board process
The Board carries out its duties with the assistance of the 
Board committees.
At the beginning of each year, Board and Committee 
meetings are scheduled in line with the key financial 
reporting dates. Additional meetings are arranged  
as necessary for specific purposes. An agenda and 
supporting papers are distributed in a timely manner 
ahead of each meeting to enable the Board or 
Committee to function effectively and to allow  
directors to discharge their responsibilities. Advanced Computer Software Group plc
Annual Report 2013
27 Advanced Computer Software Group plc
Annual Report 2013
26
Overview Business review Governance Financials
The table below shows the number of scheduled 
meetings of the Board and its committees that individual 
directors could have attended during the year and their 
actual attendance.
Board
Audit
Committee
Remuneration
Committee
Number of  
meetings held 9 2 1
Michael Jackson 9 2 1
Vin Murria 9 – –
Barbara Firth 8 – –
Paul Gibson 
(appointed  
19 November 2012) 3 – –
Mark Watts  
(resigned  
17 September 2012) 2 1 1
Mike McGoun 
(appointed  
19 November 2012) 3 1 –
Guy Millward 
(appointed  
19 November 2012) 2 1 –
Procedures are in place to capture the disclosure by 
directors of any situations which may conflict with the 
Company’s interests. All such disclosures are recorded 
and the Board confirms that the procedures have 
operated effectively during the year under review.
The directors have access to the advice and services of 
the Company Secretary and all directors are able to take 
independent professional advice if necessary and at the 
Company’s expense.
Board committees
The Board delegates clearly defined powers to its  
various committees. The terms of reference of each of  
the committees are available to view on the Company’s 
website at www.advancedcomputersoftware.com/
governance.php
Details of the work of the Audit and Remuneration 
committees are set out in the Audit Committee report  
on page 29 and 30 and in the directors’ remuneration 
report on pages 31 to 33.
The Nomination Committee was established after  
the year end. It will report on its activities in the  
2014 annual report.
Election and re-election of directors
Any directors appointed during the year submit 
themselves for election by shareholders at the next 
annual general meeting. The Company’s articles of 
association require that directors retire and stand for 
re-election at least once every three years.
Directors’ indemnity and insurance
In accordance with the articles of association, the 
Company has provided indemnities to the directors  
(to the extent permitted by the Companies Act) in 
respect of liabilities incurred as a result of their office.  
The Company has taken out an insurance policy in 
respect of those liabilities for which directors may not  
be indemnified. Neither the indemnity nor insurance 
provides cover in the event that the director is proved  
to have acted dishonestly or fraudulently. 
Internal control and risk management
The Board has overall responsibility for ensuring  
that the Group maintains a system of internal control  
to provide it with reasonable assurance regarding  
effective and efficient operations, internal financial 
control and compliance with laws and regulations.  
The Audit Committee assists the Board in discharging  
its responsibilities in this regard. The Board is not aware  
of any significant failings or weaknesses in the system  
of internal control. The risk management process and 
system of internal control can only manage rather than 
eliminate risk and the Board recognises that this system 
of internal control can only provide reasonable and not 
absolute assurance against material misstatement or loss.
The Group has a clearly defined organisational structure. 
Managers assume responsibility for running day-to-day 
operational activities, with performance regularly 
reviewed, and employees are required to follow 
procedures and policies appropriate to their position 
within the business.
The Board is responsible for identifying, evaluating  
and managing all major business risks facing the Group. 
To facilitate the assessment of risks, monthly reports on 
non-financial matters are compiled by all business units 
covering such matters as sales performance, project 
progress, compliance, health and safety , environment, 
product quality , customer support metrics and human 
resource issues.  Advanced Computer Software Group plc
Annual Report 2013
29 Advanced Computer Software Group plc
Annual Report 2013
28
The Group has a comprehensive system for reporting 
financial results to the Board. Monthly accounts for each 
business unit, with a financial commentary comparing 
current year performance with budget and forecast, 
together with key performance metrics, are prepared  
in accordance with the Group accounting policies and 
principles for Board consideration.
The Board monitors the Group’s funding requirements, 
treasury function and banking facilities and approves 
capital and significant investment expenditure.
The Board considers that there have been no substantial 
weaknesses in internal financial controls that have 
resulted in material loss, contingency or uncertainty 
which require to be disclosed in the accounts. 
On the recommendation of the Audit Committee,  
the Board has determined that a separate internal  
audit function is not appropriate given the size and 
complexity of the Group, but it will continue to review  
the position periodically.
Relations with shareholders
The Board attaches great importance to maintaining 
good relationships with the Company’s shareholders. 
Relations with shareholders are managed principally  
by the Chief Executive Officer and Chief Financial 
Officer. Following the announcement of the half year 
and year end results, a series of formal meetings takes 
place with institutional shareholders which allows the 
executive directors to form relationships with actual  
and potential investors and for shareholders to discuss 
long term issues and communicate their views. The 
Company’s brokers and financial PR advisers provide 
feedback from investor and analyst meetings which  
is communicated to the Board as a whole.
The annual general meeting provides a welcome 
opportunity for the Board to communicate directly  
with shareholders.
The Company maintains a website at  
www.advancedcomputersoftware.com  
which contains further information on the Group,  
regulatory announcements and financial statements.
Corporate governance statement
continued Advanced Computer Software Group plc
Annual Report 2013
29 Advanced Computer Software Group plc
Annual Report 2013
28
Overview Business review Governance Financials
Audit Committee report
Role of the Audit Committee
The Audit Committee is appointed by the Board.  
The Committee’s terms of reference, which cover all  
the matters recommended under the UK Corporate 
Governance Code, can be viewed on the Company’s 
website at www.advancedcomputersoftware.com/
governance.php 
The Audit Committee is responsible for:
 > monitoring the integrity of the financial statements  
of the Group and any formal announcement relating 
to its financial performance, reviewing any significant 
financial reporting issues and judgements which  
they contain;
 > reviewing the adequacy and effectiveness of the 
Company’s internal financial controls and internal 
control and risk management systems;
 > making recommendations to the Board, to be put  
to shareholders for approval in general meeting,  
on the appointment of the Company’s external 
auditor, approval of their terms of engagement  
and remuneration;
 > assessing annually the independence and objectivity 
of the external auditor and the effectiveness of  
the audit process, taking into account relevant 
professional and regulatory requirements; and
 > developing and implementing a policy on the  
supply of non-audit services by the external auditor, 
taking into account any relevant ethical guidance  
on the matter.
The Audit Committee is required to report to the Board 
after each Audit Committee meeting, making 
recommendations to the Board where it considers action 
or improvement is needed.
Composition of the Audit Committee
The members of the Audit Committee are Michael 
Jackson (Chairman) and Mike McGoun. Their 
biographical details are set out on page 21. Mark Watts 
was previously a member until his resignation as  
a director of the Company on 17 September 2012.  
Guy Millward was a member of the Committee from  
his appointment to the Board on 19 November 2012  
until 7 March 2013, when he accepted the role of  
Chief Financial Officer of the Company with effect  
from 10 June 2013.
The Committee is required to comprise a minimum  
of two non-executive directors, one of whom should  
be a financially qualified member. Currently , the  
Audit Committee Chairman fulfils this requirement  
as Michael Jackson is a chartered accountant.  
The Secretary to the Committee is Barbara Firth.
Meetings
The Audit Committee is required to meet formally  
at least twice per year and has an agenda linked  
to the Group’s financial calendar. During the year  
under review, the Committee met on two occasions.
The Audit Committee invites the Chief Executive Officer, 
Chief Financial Officer and Chief Operating Officers  
to attend for all or part of its meetings, as and when 
appropriate.
Actions undertaken by the Audit Committee in 
discharging its duties
Since March 2012, the Committee has:
 > reviewed the 2012 annual report and financial 
statements, the 2013 half year review and 2013 
annual report and financial statements. As part of 
these reviews, the Committee received reports from 
the external auditor on their audit of the annual report 
and financial statements and the half year review. 
Significant reporting issues were discussed and the 
going concern assumptions and compliance with 
relevant accounting standards were discussed;
 > considered a report from the external auditor on their 
review of the effectiveness of the Group’s internal 
controls and risk management activities;
 > reviewed and agreed the scope of the audit work  
to be undertaken by the external auditor;
 > agreed the fees to be paid to the auditor for their  
audit of the 2013 report and accounts and financial 
statements;
 > monitored the external auditor’s compliance  
with applicable ethical guidance and, in addition, 
considered their independence and objectivity  
taking into account all appropriate guidelines;
 > recommended to the Board the reappointment  
of the external auditor; and
 > reviewed the whistleblowing policy. Advanced Computer Software Group plc
Annual Report 2013
31 Advanced Computer Software Group plc
Annual Report 2013
30
External auditor
The Committee is responsible for managing the  
Group’s relationship with the external auditor, including 
approving the terms of their engagement and 
monitoring their independence, objectivity and 
compliance with ethical and regulatory requirements. 
The Committee has established a formal external auditor 
policy , which includes details of the non-audit services 
which the external auditor will and will not be allowed 
to provide to the Group together with a policy on the 
employment of former partners and employees of the 
external auditor.
Internal audit function
The Committee considers on an annual basis the 
requirement for an internal audit function. Due to the size 
and complexity of the Group, the Committee continues  
to believe that there is no requirement for an internal 
audit function at this time. Instead, the Group-level 
finance function will continue to review the financial 
reporting provided by the subsidiary operations.
Conclusion
As a result of its work during the year, the Audit 
Committee considers that it has acted in accordance 
with its terms of reference and has ensured the 
independence and objectivity of the external auditor.
On behalf of the Audit Committee
Michael Jackson
Chairman
25 June 2013
Audit Committee report continued Advanced Computer Software Group plc
Annual Report 2013
31 Advanced Computer Software Group plc
Annual Report 2013
30
Overview Business review Governance Financials
Directors’ remuneration report
This report has been prepared in accordance with  
the Companies Act 2006 (‘the Act’) and also meets  
the relevant requirements of the AIM Rules. A resolution 
to approve the report will be proposed at the annual 
general meeting of the Company at which the financial 
statements will be approved. 
Remuneration Committee
The Company has an established Remuneration 
Committee, the terms of reference of which are available 
at www.advancedcomputersoftware.com/governance.
php. The members of the Committee are Mike McGoun 
(Committee Chairman) and Michael Jackson. Mark 
Watts was previously Chairman until his resignation  
as a director of the Company on 17 September 2012. 
Guy Millward was a member of the Committee from  
his appointment to the Board on 19 November 2012  
until 7 March 2013, when he accepted the role of  
Chief Financial Officer of the Company with effect  
from 10 June 2013. The Secretary is Barbara Firth.
The Committee is responsible for determining and 
agreeing with the Board the broad policy for the 
remuneration of the executive directors.
The Committee met once during the year, when the 
following matters were approved:
 > executive directors’ bonus payments for FY12;
 > executive directors’ remuneration for FY13; and 
 > bonus targets for the executive directors for FY13.
Since the year end, the Committee has met to review  
the remuneration of the executive directors, approve the 
remuneration of the newly-appointed Chief Financial 
Officer, and approve bonus payments to the executive 
directors for FY13 and bonus targets for FY14.
Remuneration policy for the executive directors
The Company’s policy is to remunerate the directors 
appropriately , taking into account the size and growth  
of the Group, and to continue to focus on performance-
related remuneration. The objective of such policy is  
to ensure that the executive directors are provided  
with appropriate incentives to encourage enhanced 
performance and are rewarded for their individual 
contributions to the success of the Company in a fair and 
reasonable manner. The remuneration package for the 
executive directors comprises both fixed and variable 
elements and includes the following elements.
Basic salary
The basic salary of each director is reviewed annually 
by the Remuneration Committee with changes, if any , 
taking effect on 1 March each year.
Other benefits
In addition to basic salary , each executive director is 
entitled to a range of benefits, or the cash equivalent, 
including company car, permanent health insurance, 
private health insurance, Company pension 
contributions and life assurance.
Bonus payments
The Committee determines the targets that must be  
met for each financial year if a bonus is to be paid.  
For the year under review, the targets were based on  
the achievement of revenue and EBITDA targets. The 
amount of the bonus paid to executive directors has 
been determined by the Committee based on those 
targets. The bonus structure will remain the same for  
the coming year. The entire bonus was settled in cash.
Long term incentive arrangements
The Company operates long term incentive 
arrangements to align the interests of certain directors 
with those of shareholders. Further details of these 
schemes are set out below and in note 25 to the  
financial statements on pages 66 to 69.
Non-executive directors
The Board determines the remuneration of the  
non-executive directors within the limits set by the 
articles of association and based on fees paid by  
similar companies and the skills of, and expected time 
commitment required from, the individual concerned. 
All the current non-executive directors are remunerated 
through payroll. The fees for Mark Watts’ services were 
invoiced by , and paid to, Marwyn Capital LLP during 
the period of his directorship.
Service contracts
The directors’ service contracts and date of appointment 
are summarised in the table below:
Date of
appointment Notice period
Executive directors
Vin Murria 29.08.2008 12 months
Barbara Firth 01.09.2009 6 months
Paul Gibson 19.11.2012 6 months
Guy Millward 10.6.2013 6 months
Non-executive directors
Michael Jackson 29.08.2008 12 months
Mike McGoun 19.11.2012 3 months
Shareholding guidelines
There are no requirements for directors to hold shares in 
the Company. However, details of any shares held by  
the directors can be found in the directors’ report on 
page 23. Advanced Computer Software Group plc
Annual Report 2013
33 Advanced Computer Software Group plc
Annual Report 2013
32
Directors’ remuneration for the year to 28 February 2013
Salary
£’000
Bonus
£’000
Benefits
1
£’000
Pension
contributions
£’000
Consultancy
fees
£’000
2013
Total
remuneration
£’000
2012
Total
remuneration
£’000
Executive directors
Vin Murria
2
 275 175 1 – – 451 419
Barbara Firth
3
159 78 1 – – 238 281
Paul Gibson
4
53 30 5 5 – 93 –
Non-executive directors
Michael Jackson 25 – – – – 25 25
Mark Watts
5
– – – – 8 8 15
Mike McGoun 6 – – – – 6 –
Guy Millward
6
4 – – – – 4 –
522 283 7 5 8 825 740
1 Benefits include a combination of company car, life assurance, pension contributions, private health insurance and permanent health insurance.
2  In 2012, Vin Murria elected to waive her right to the full compensation due under her employment contract and to receive £15,000 gross salary per annum plus  
benefits from December 2011 to February 2012. The Company agreed to pay an amount equivalent to the remuneration waived plus the value of the ENIC saved  
to PS Foundation, registered charity number 1123570.
  In 2012, Vin Murria also waived a discretionary bonus of £25,000 paid to her during 2012 in respect of the 2011 year end and elected to waive any discretionary bonus 
for 2012. The Committee awarded her a bonus of £116,250 for the year ended 29 February 2012. The Company agreed to pay an amount equivalent to the bonuses 
waived plus the ENIC saved to PS Foundation, registered charity number 1123570.
3 Barbara Firth reduced her working week to four days from 1 April 2012 to 30 November 2012 and her remuneration package was amended accordingly.
4  Paul Gibson was appointed a director on 19 November 2012 and the above reflects his remuneration from that date. He is a member of the Group Personal Pension 
Scheme, a defined contribution scheme. The Company contributes an amount equivalent to 10% of his basic salary into the scheme.
5 Resigned from the Board on 17 September 2012.
6 Appointed to the Board as a non-executive director on 19 November 2012. Appointed as Chief Financial Officer with effect from 10 June 2013.
Long-term incentive arrangements
In 2008 and 2010, the Company granted Management 
Participation Shares (MPS) to certain directors and key 
executives and the Marwyn Participation Option (MPO) 
to Marwyn Management Partners LP , in which  
Mark Watts is a partner, to align their interests with  
those of shareholders. 
Both schemes entitle the counterparty to receive a  
fixed percentage of any increase in shareholder value 
from the commencement of the scheme, calculated  
on exercise or at the termination of the scheme, 
whichever is earlier. The calculated percentage of any 
increase in value is settled by the issue of shares in the 
Company at the market price on the date of exercise or 
termination of the scheme. The number of shares to be 
issued in settlement is fixed at the date of exercise or 
termination of the scheme.
Shareholder value for this purpose is broadly defined  
as the difference between:
 > the market capitalisation of the Company at the  
date of exercise or termination of the scheme; and
 > the sum of the market capitalisation of the Company 
on 29 August 2008 plus the aggregate subscription 
price of all issued ordinary share capital up to  
the date of exercise or termination of the scheme,  
adjusted for dividends and any returns of capital  
to shareholders.
Both schemes were initially subject to a vesting condition 
which required the Company’s share price to exceed  
an 11% compound growth rate measured over the  
three-year period from 29 August 2008 to 29 August 2011.  
The vesting condition was determined to have been 
achieved on 5 October 2011 and the schemes vested 
accordingly on that date.
On 17 September 2012, Marwyn Management Partners 
LP exercised its option over 13,307 ,424 ordinary shares of 
10p each at an exercise price of 10p per share pursuant 
to the MPO agreement. The exercise of this option 
constitutes the entire liability of the Company to Marwyn 
Management Partners LP under the MPO scheme.
If settlement of the MPS scheme is assumed to have 
occurred at the 28 February balance sheet date, then 
41,569,293 shares (equivalent to 10.16% of the issued 
share capital as at that date) would have been required 
to be issued to satisfy the award.
Directors’ remuneration report
continued Advanced Computer Software Group plc
Annual Report 2013
33 Advanced Computer Software Group plc
Annual Report 2013
32
Overview Business review Governance Financials
Share options
During the year, Michael Jackson continued to contribute £250 per month into the Company’s Save As You Earn 
(SAYE) scheme. Vin Murria and Barbara Firth continued to contribute £250 per month into the scheme until  
their savings contracts matured on 1 November 2012. As a result, at the year end, they held options over the 
following shares. 
Director Date of grant
Number of shares
over which 
options held at 
28 February 
2013 Option price (£) Maturity date
Vin Murria 21.09.2009 30,250 0.30 01.11.2012
Barbara Firth 21.09.2009 30,250 0.30 01.11.2012
Michael Jackson 07.12.2011 9,615 0.39 01.01.2015
On 14 March 2013, Vin Murria and Barbara Firth exercised their respective SAYE options to purchase 30,250  
ordinary shares in the Company at an exercise price of 30p per share.
On behalf of the Remuneration Committee
Mike McGoun
Chairman
25 June 2013 Advanced Computer Software Group plc
Annual Report 2013
35 Advanced Computer Software Group plc
Annual Report 2013
34
Independent auditor’s report
to the members of Advanced Computer Software Group plc 
We have audited the financial statements of Advanced 
Computer Software Group plc for the year ended 
28 February 2013 set out on pages 35 to 74. The financial 
reporting framework that has been applied in the 
preparation of the Group financial statements is 
applicable law and International Financial Reporting 
Standards (IFRSs) as adopted by the EU. The financial 
reporting framework that has been applied in the 
preparation of the Parent Company financial statements 
is applicable law and UK Accounting Standards  
(UK Generally Accepted Accounting Practice). 
This report is made solely to the Company’s members,  
as a body , in accordance with Chapter 3 of Part 16  
of the Companies Act 2006. Our audit work has been 
undertaken so that we might state to the Company’s 
members those matters we are required to state to  
them in an auditor’s report and for no other purpose.  
To the fullest extent permitted by law, we do not accept 
or assume responsibility to anyone other than the 
Company and the Company’s members, as a body ,  
for our audit work, for this report, or for the opinions  
we have formed. 
Respective responsibilities of directors and auditor 
As explained more fully in the directors’ responsibilities 
statement set out on page 22, the directors are 
responsible for the preparation of the financial statements 
and for being satisfied that they give a true and fair 
view. Our responsibility is to audit, and express an 
opinion on, the financial statements in accordance with 
applicable law and International Standards on Auditing 
(UK and Ireland). Those standards require us to comply 
with the Auditing Practices Board’s Ethical Standards  
for Auditors. 
Scope of the audit of the financial statements
A description of the scope of an audit of financial 
statements is provided on the Financial Reporting 
Council’s website at www.frc.org.uk/
auditscopeukprivate. 
Opinion on financial statements
In our opinion:
 > the financial statements give a true and fair view of 
the state of the Group’s and of the Parent Company’s 
affairs as at 28 February 2013 and of the Group’s profit 
for the year then ended;
 > the Group financial statements have been properly 
prepared in accordance with IFRSs as adopted by  
the EU;
 > the Parent Company financial statements have been 
properly prepared in accordance with UK Generally 
Accepted Accounting Practice; 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.
Paul Gresham (Senior Statutory Auditor)
for and on behalf of KPMG Audit Plc, Statutory Auditor
Chartered Accountants 
Arlington Business Park 
Theale 
Reading 
Berkshire RG7 4SD 
United Kingdom 
25 June 2013 Advanced Computer Software Group plc
Annual Report 2013
35 Advanced Computer Software Group plc
Annual Report 2013
34
Overview Business review Governance Financials
Consolidated income statement
for the year ended 28 February 2013
Notes
2013
Continuing
operations 
£’000 
 
Continuing
operations 
£’000
2012 
Discontinued
operations 
£’000
Total 
£’000
Revenue 4,5 120,914 98,200 3,625 101,825
Cost of sales (25,873) (16,302) (477) (16,779)
Gross profit 95,041 81,898 3,148 85,046
    
Administrative costs (84,653) (73,775) (2,661) (76,436)
    
Adjusted EBITDA 27,001 24,099 1,270 25,369
Acquisition costs (485) – – –
Share-based payments (IFRS2) 25 (1,246) (1,956) (72) (2,028)
Depreciation 13 (1,697) (1,194) (25) (1,219)
Amortisation of acquired intangible assets (IFRS3) 6,12 (13,185) (12,826) (686) (13,512)
    
Profit from operations 5,6 10,388 8,123 487 8,610
    
Finance income 7 51 27 – 27
Finance costs 7 (1,276) (1,719) – (1,719)
Profit before taxation 9,163 6,431 487 6,918
    
Taxation 9 (31) (491) (151) (642)
Profit for the year before the profit  
on sale of discontinued operations 9,132 5,940 336 6,276
 
Profit on sale of discontinued operations 11 – – 4,889 4,889
Profit for the year 9,132 5,940 5,225 11,165
 
Earnings per share 
Basic (pence) 10 2.6 1.8 1.5 3.3
Diluted (pence) 10 2.2 1.5 1.3 2.8
The notes on pages 40 to 70 form part of these financial statements. Advanced Computer Software Group plc
Annual Report 2013
37 Advanced Computer Software Group plc
Annual Report 2013
36
Consolidated statement of 
comprehensive income
for the year ended 28 February 2013
2013
Continuing
operations
£’000
Continuing 
operations
£’000
2012
Discontinued
operations
£’000
Total
£’000
Foreign exchange translation differences (50) (28) – (28)
Net income recognised directly in equity (50) (28) – (28)
    
Profit for the year 9,132 5,940 5,225 11,165
    
Total comprehensive income for the year 9,082 5,912 5,225 11,137
The notes on pages 40 to 70 form part of these financial statements. Advanced Computer Software Group plc
Annual Report 2013
37 Advanced Computer Software Group plc
Annual Report 2013
36
Overview Business review Governance Financials
Consolidated balance sheet
as at 28 February 2013
 
 Notes
2013
£’000
2012
£’000
Non-current assets  
Intangible assets 12 135,249 126,965
Property , plant and equipment 13 5,937 4,590
Other investment 22 520 –
Total non-current assets 141,706 131,555
Current assets 
Inventories 14 2,892 1,541
Trade and other receivables 15 36,825 27,955
Cash and cash equivalents 16 33,419 9,948
Total current assets 73,136 39,444
 
Deferred tax asset 18 3,432 3,114
  
Total assets 218,274 174,113
 
Current liabilities 
Trade and other payables 17 (22,060) (17,494)
Deferred income (38,936) (28,537)
Corporation tax (1,448) (2,197)
Loans and borrowings 20 (2,707) (8,274)
Total current liabilities (65,151) (56,502)
 
Non-current liabilities 
Deferred tax 18 (11,645) (15,401)
Provisions 19 (1,830) (1,174)
Loans and borrowings 20 (533) (2,804)
Total non-current liabilities (14,008) (19,379)
 
Total liabilities (79,159) (75,881)
 
Net assets 139,115 98,232
Equity
Share capital 24 40,904 35,616
Share premium 24 58,364 33,498
Merger reserve 24 7,826 7,826
Foreign exchange reserve 24 (89) (39)
Share trust reserve 24 (1,777) (1,777)
Retained earnings 24 33,887 23,108
Total equity attributable to equity holders of the Company 139,115 98,232
The notes on pages 40 to 70 form part of these financial statements. These financial statements were approved by the 
Board of directors and authorised for issue on 25 June 2013 and were signed on its behalf by:
Guy Millward
Director
Company number 5965280 Advanced Computer Software Group plc
Annual Report 2013
39 Advanced Computer Software Group plc
Annual Report 2013
38
Consolidated cash flow statement
for the year ended 28 February 2013
 
 Notes
2013
£’000
2012
£’000
Cash flows from operating activities  
Profit for the year 9,132 11,165
Adjustments for: 
Depreciation 13 1,697 1,219
Amortisation of intangible assets 12 14,255 14,170
Share-based payment – IFRS2 25 1,246 2,028
Profit on sale of discontinued operations 11 – (4,889)
Net finance costs 7 1,225 1,692
Tax charge 9 31 642
  
Operating cash flows before movement in working capital 27,586 26,027
  
Increase in trade and other payables 2,814 3,666
Increase in trade and other receivables (3,507) (4,046)
Increase in stock (176) (98)
  
Cash generated from operating activities 26,717 25,549
Corporation tax paid (4,840) (4,306)
  
Net cash inflow from operating activities 21,877 21,243
  
Cash flows from investing activities 
Acquisition of subsidiaries (net of cash acquired) 11 (14,686) (1,231)
Disposal of subsidiaries (net of cash disposed of) 11 – 14,846
Deferred consideration – (100)
Development expenditure capitalised (2,056) (1,779)
Acquisition of property , plant and equipment (2,708) (1,669)
  
Cash (outflow)/inflow from investing activities (19,450) 10,067
  
Cash flows from financing activities 
Proceeds from issue of new shares 30,177 185
Repayment of borrowings (7,500) (7,500) 
Finance costs (633) (1,279)
  
Cash inflow/(outflow) from financing activities 22,044 (8,594)
  
Change in cash and cash equivalents 24,471 22,716
Cash and cash equivalents at beginning of the year 8,948 (13,768)
  
Cash and cash equivalents at the end of the year 33,419 8,948
The notes on pages 40 to 70 form part of these financial statements.
The cash and cash equivalents at the end of the period together with the revolving facility , represent the cash and 
cash equivalents balance shown in the balance sheet. Advanced Computer Software Group plc
Annual Report 2013
39 Advanced Computer Software Group plc
Annual Report 2013
38
Overview Business review Governance Financials
Consolidated statement of  
changes in equity
  
 
Ordinary 
share capital
£’000
Share
premium
£’000
Merger 
reserve
£’000
Share trust
reserve
£’000
Revaluation
reserve
£’000
Retained
earnings
£’000
Total
£’000
Balance at 29 February 2012 35,616 33,498 7,826 (1,777) (39) 23,108 98,232
        
Issue of ordinary shares 3,564 24,952 – – – – 28,516
Share options exercised 1,724 704 – – – – 2,428
Cost of issuing share capital – (790) – – – – (790)
Deferred tax asset on  
share-based payment – – – – – 401 401
Share-based payment – – – – – 1,246 1,246
Total comprehensive  
income for the year – – – – (50) 9,132 9,082
Balance at 28 February 2013 40,904 58,364 7,826 (1,777) (89) 33,887 139,115
  
 
Ordinary 
share capital
£’000
Share
premium
£’000
Merger 
reserve
£’000
Share trust
reserve
£’000
Revaluation
reserve
£’000
Retained
earnings
£’000
Total
£’000
Balance at 28 February 2011 35,488 33,361 7,826 (1,777) (11) 9,712 84,599
        
Share options exercised 128 137 – – – (80) 185
Deferred tax asset on  
share-based payment – – – – – 283 283
Share-based payment – – – – – 2,028 2,028
Total comprehensive  
income for the year – – – – (28) 11,165 11,137
Balance at 29 February 2012 35,616 33,498 7,826 (1,777) (39) 23,108 98,232
The notes on pages 40 to 70 form part of these financial statements. Advanced Computer Software Group plc
Annual Report 2013
41 Advanced Computer Software Group plc
Annual Report 2013
40
Notes to the consolidated  
financial statements
1 General information
Advanced Computer Software Group plc (AIM: ASW, ‘Advanced’, ‘the Company’ or ‘the Group’), a leading provider 
of software and IT services to the healthcare, public and private sectors, is a limited liability company listed on AIM 
(a market of the London Stock Exchange). The Company’s registered address is Munro House, Portsmouth Road, 
Cobham, Surrey KT11 1TF and the Company’s registration number is 5965280.
The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as  
the ‘Group’). 
The Company financial statements present information about the Company as a separate entity and not about  
its Group.
The consolidated financial statements have been prepared in accordance with International Financial Reporting 
Standards (IFRSs) as adopted by the European Union. The Company has elected to prepare its Company financial 
statements in accordance with UK GAAP. The Company’s subsidiaries are prepared in compliance with UK GAAP. 
The principal accounting policies used in preparing the financial results are detailed in note 3.
2 Basis of preparation
Measurement convention
The financial statements are prepared on the historical cost basis.
Subsidiary basis of consolidation
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly , to 
govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, 
potential voting rights that are currently exercisable or convertible are taken into account. The financial statements  
of subsidiaries are included in the consolidated financial statements from the date that control commences until the 
date that control ceases.
Functional and presentation currency
The financial information is presented in sterling, which is the functional currency of the Group. All financial 
information presented in sterling has been rounded to the nearest thousand.
Going Concern 
On 7 March 2013 the Group negotiated a banking facility of £105.0m, with HSBC, Royal Bank of Scotland and  
Silicon Valley Bank. The facility is structured as a £55.0m term loan and a £50.0m revolving credit facility , both 
falling due for repayment in September 2016.
The interest rate on both the term loan and revolving credit facility varies between 2.25% and 3% over LIBOR 
depending on the Group’s net debt to EBITDA ratio.
The previous facility was cancelled on 27 February 2013 and the outstanding balance at the balance sheet date  
of £2.5m was repaid on the 6 March 2013.
In May 2013, an agreement was reached with Royal Bank of Scotland to hedge two-thirds of the term debt for the 
period of the loan by way of a cap on LIBOR of 1%.
The Group’s forecasts and projections, taking account of reasonably possible changes in trading performance, show 
that the Group will continue to operate within the level of these facilities.
The directors are confident that the Group will continue to meet its financial covenants and has adequate resources  
to continue in operational existence for the foreseeable future and therefore they continue to adopt the going concern 
basis in preparing the annual financial statements. Advanced Computer Software Group plc
Annual Report 2013
41 Advanced Computer Software Group plc
Annual Report 2013
40
Overview Business review Governance Financials
3 Significant accounting policies   
The accounting policies adopted in the preparation of the financial statements are consistent with those followed in 
preparation of the Group’s annual financial statements for the year ended 29 February 2012.
There were no relevant new standards and amendments to standards which were mandatory for the first time for  
the financial year beginning 1 March 2012.
Property , plant and equipment
Property , plant and equipment are stated at cost less accumulated depreciation and impairment losses. Where parts 
of an item of property , plant and equipment have different useful lives, they are accounted for as separate items of 
property , plant and equipment.
Depreciation
Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part 
of an item of property , plant and equipment. The depreciation policies for each class of asset are as follows:
Leasehold improvements – over the period of the lease 
Office equipment and furniture – 20% to 331⁄3% straight-line 
Computer equipment – 20% to 25% straight-line 
Land & buildings – 2% straight-line
Depreciation methods, useful lives and residual values are reviewed at each reporting date.
Intangibles
Goodwill
Goodwill is recognised on the acquisition of a subsidiary and is the difference between the cost of the acquisition 
and the fair value of tangible and intangible assets acquired. The carrying value of goodwill is reviewed at each 
reporting date, with any impairment charged to the income statement.
Research and development
Development activities involve a plan or design for the production of new or substantially improved computer 
software. Development expenditure is capitalised only if development costs can be measured reliably , the software 
program is technically and commercially feasible, future economic benefits are probable, and the Group has 
sufficient resources available to complete development and to use, lease or sell the asset. The expenditure capitalised 
includes only the cost of gross direct labour that is directly attributable to preparing the asset for its intended use or 
third party costs incurred directly on the development activities above. 
Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated 
impairment losses. Other research and development expenditure not meeting the above criteria is recognised  
in the income statement as incurred.
Acquired intangibles
Following business combinations (see note 11) the assets acquired are classified into tangible and intangible assets 
and fair values applied using the principles of IFRS3. This leads to the creation of intangible assets recognised on  
the consolidated balance sheet which will be amortised over their estimated useful lives. The assets typically 
recognised were:
1. Brand name
2. Customer contracts and relationships
3. Technology assets
4. Contractual arrangements
5. In-progress research and development Advanced Computer Software Group plc
Annual Report 2013
43 Advanced Computer Software Group plc
Annual Report 2013
42
Notes to the consolidated  
financial statements continued
3 Significant accounting policies continued 
Intangibles continued
Amortisation
Amortisation is recognised in the income statement within administrative costs on a straight-line basis over  
the estimated useful lives of intangible assets, other than goodwill, from the date they are available for use.  
The estimated useful lives for each period are different depending on the profile of the acquisition. 
The amortisation policy for each class of intangible asset is as follows:
 > capitalised development costs are amortised over the period from the date the development generates revenue. 
This period is estimated by management as between four and eight years;
 > brand names recognised on acquisition are amortised over a period of four to five years;
 > technology assets recognised on acquisition are amortised over a period of four to five years;
 > customer contracts and relationships recognised on acquisition are amortised over a period of one to ten years, 
based on the useful life of the contract or relationship. Customer pipelines and backlog are amortised over  
one year;
 > contractual arrangements recognised on acquisition are amortised over a period of one to ten years, based  
on the useful life of the contract. 
Impairment of intangibles and property , plant and equipment
The carrying amounts of the Group’s assets are reviewed at each balance sheet date to determine whether there is 
any indication of impairment. If any such indication exists, the assets’ recoverable amount is estimated.
An impairment loss is recognised whenever the carrying amount of an asset, or its cash-generating unit, exceeds  
its recoverable amount. Impairment losses are recognised in the income statement.
Calculation of recoverable amount
The recoverable amount of assets is the greater of their net selling price and value in use. In assessing value in use, 
the estimated future cashflows are discounted to their present value using a pre-tax discount rate that reflects current 
market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate 
largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the 
asset belongs. Impairments of goodwill are never reversed.
Inventories
Finished goods
Finished goods are stated at the lower of cost and net realisable value. Cost is based on the first-in first-out principle 
and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and 
condition. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated 
costs of completion and selling expenses.
Work in progress
Work in progress is recognised using the percentage of completion method.
Financial instruments
The Group’s financial instruments comprise cash and various items such as trade receivables and trade payables 
that arise directly from its operations. Finance payments associated with financial liabilities are dealt with as part  
of finance expenses.
Financial assets
The Group’s financial assets are loans and receivables. These assets are non-derivative financial assets with fixed  
or determinable payments that are not quoted in an active market. They arise principally through the provision  
of services to customers (trade receivables), but also incorporate other types of contractual monetary asset such as 
deposits on rental property and prepayments, which are contractually recoverable. They are initially recognised  
at fair value and subsequently carried at amortised cost. Unless otherwise indicated, the carrying amounts of the 
Group’s financial assets are a reasonable approximation of their fair values. Advanced Computer Software Group plc
Annual Report 2013
43 Advanced Computer Software Group plc
Annual Report 2013
42
Overview Business review Governance Financials
3 Significant accounting policies continued
Financial instruments continued
Financial liabilities
The Group’s financial liabilities are trade payables and other financial liabilities. These liabilities are initially 
recognised at fair value and subsequently measured at amortised cost using the effective interest rate method. 
Unless otherwise indicated, the carrying amounts of the Group’s financial liabilities are a reasonable approximation 
of their fair values.
Share capital
Financial instruments issued by the Group are treated as equity only to the extent that they do not meet the 
definition of a financial liability. The Group’s ordinary shares are classified as equity instruments.
Further information on the Group’s financial instruments can be found in note 20.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, call deposits and short term deposits with a 
maturity of less than three months. Bank overdrafts are repayable on demand and form an integral part of the 
Group’s cash management strategy. 
Leased assets
Leases where the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. 
Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the 
present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in 
accordance with the accounting policy applicable to that asset. Other leases are operating leases.
Operating lease payments
Payments made under operating leases are recognised in the income statement on a straight-line basis over the 
term of the lease. Lease incentives received are recognised in the income statement as an integral part of the total 
lease expense.
Foreign currency transactions
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. 
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the 
foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in  
the income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign 
currency are translated using the exchange rate at the date of the transaction.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, 
are translated to the Group’s presentational currency , sterling, at foreign exchange rates ruling at the balance sheet 
date. The revenues and expenses of foreign operations are translated at an average rate for the year, where this rate 
approximates to the foreign exchange rates ruling at the dates of the transactions.
Exchange differences arising from the translation of foreign operations are taken directly to the exchange revaluation 
reserve and are released into the income statement upon disposal of the foreign operation in due course.
Revenue recognition
The Group’s revenues are derived from the sale of software product licences, the associated consultancy services, 
hardware, maintenance, managed services and supplies of third party software. All revenue is reported exclusive  
of value added tax.
The Group will only recognise revenue when:
 > persuasive evidence of an arrangement exists. This is typically a signed contract or customer purchase order;
 > the price to the customer is fixed or determinable;
 > delivery has occurred; and
 > collectability is reasonably assured and there are no material outstanding conditions or contingencies attaching  
to the receipt of monies due. Advanced Computer Software Group plc
Annual Report 2013
45 Advanced Computer Software Group plc
Annual Report 2013
44
Notes to the consolidated  
financial statements continued
3 Significant accounting policies continued
Revenue recognition continued
The Group recognises revenue on each element of a contract as follows:
 > software product licence – revenue is recognised when risks and rewards have passed to the customer and there 
is no significant ongoing obligation on the Group. Where software is sold as part of a bundled arrangement, the 
Group allocates revenue to each component based on its fair value or where a contractual component involves 
significant modification or customisation of software, revenue allocated to that component is recognised using the 
percentage of completion method;
 > hardware – revenue is recognised on delivery of the goods;
 > consultancy services (including training) – the Group performs a number of professional services for its customers. 
These can include implementation and configuration of the software and training of the customer’s staff. Revenue 
is recognised as the services are performed;
 > product maintenance – the Group provides software updates to its customers as part of the ongoing maintenance 
contract. Revenue is recognised rateably over the duration of the contract; 
 > managed services – where the Group provides hosting services, revenue is recognised rateably over the duration 
of the contract; and
 > airtime – the Group recognises revenue from airtime which is incorporated into agreements with customers.  
This revenue is recognised once the connection has been made as this is the point when the risks and rewards 
have been transferred to the customer.
Typically , a number of the above elements may be sold together as a bundled contract. Revenue is recognised 
separately for each component if it is considered to represent a separable good or service and a fair value can be 
reliably established.
The Group derives fair value for its consultancy services based on day rates for consultants and for product 
maintenance based on maintenance renewal prices. Where software is included within a bundled arrangement, the 
residual value of the contract is ascribed to the software after a fair value has been allocated to all other components. 
Deferred revenue primarily relates to managed services and customer support fees, which have been invoiced to  
the customer prior to the performance of these services. Deferred revenue is generally recognised over a period of 
one to three years.
Employee Benefit Trust
At the balance sheet date, the Employee Benefit Trust (EBT) was dependent on Advanced Computer Software Group plc 
for its funding and its investment in the Company’s shares was shown in the share trust reserve, treated as a deduction 
from equity in the consolidated balance sheet.
Corporation tax
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income statement 
except to the extent that it relates to items recognised directly in equity , in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted, or substantively 
enacted, at the balance sheet date and any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for  
financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are 
not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither 
accounting nor taxable profit other than in a business combination, and differences relating to investments in 
subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred  
tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and 
liabilities, using tax rates enacted, or substantively enacted, at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available 
against which the asset can be utilised. Advanced Computer Software Group plc
Annual Report 2013
45 Advanced Computer Software Group plc
Annual Report 2013
44
Overview Business review Governance Financials
3 Significant accounting policies continued 
Employee benefits
Defined contribution plans
Obligations for contributions to defined contribution pension plans are recognised as an expense in the income 
statement as incurred.
Short term benefits
Short term employee benefit obligations are measured on an undiscounted basis and are expensed as the related 
service is provided. A provision is recognised for the amount expected to be paid under short term cash bonus or 
profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past 
service provided by the employee and the obligation can be estimated reliably.
Share-based payment transactions
Share-based payment arrangements in which the Group receives goods or services as consideration for its own 
equity instruments are accounted for as equity-settled share-based payment transactions. 
The grant date fair value of options granted to employees is recognised as an employee expense, with a 
corresponding increase in equity , over the period in which the employees become unconditionally entitled to the 
options. The fair value of the options granted is measured using an option valuation model, taking into account the 
terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to 
reflect the actual number of share options that vest except where forfeiture is due only to share prices not achieving 
the threshold for vesting.
Critical accounting estimates and judgements
Revenue recognition
Revenue for arrangements that involve significant modification or customisation of the software may be recognised 
based on achievement of contract-specific milestones. The Group determines the stage of completion based on an 
assessment of direct labour costs incurred to date as a percentage of total estimated project costs required to 
complete the project.
If collectability is not reasonably assured at the outset of a contract, the Group defers revenue and only recognises 
revenue on receipt of the cash and to the extent that it has discharged its obligations under the contract.
Impairment of goodwill
The Group is required to test goodwill for potential impairment on an annual basis. The recoverable amount is 
determined based on value in use calculations which require the estimation of future cashflows and the selection  
of a discount rate. Actual outcomes of this calculation may vary. Further information including the carrying value  
is given in note 12.
Acquired intangible assets
On acquisition of a business, the Group is required to value the assets acquired and recognise intangible assets on 
the balance sheet. The valuation of these assets relies on various assumptions, including future revenue and costs 
derived from those assets and the selection of an appropriate discount rate in order to calculate the present value  
of those cashflows. Further information including the carrying value of intangibles acquired is given in note 12.
Useful lives of intangible assets and property, plant and equipment
Intangible assets, property and plant and equipment are amortised or depreciated over their useful lives. These useful 
lives are based on management’s estimates of the period which the assets will generate revenue. These estimates are 
periodically reviewed for continued appropriateness. Changes to estimates can result in significant variations in the 
carrying value and amounts charged to the consolidated income statement in specific periods.  Advanced Computer Software Group plc
Annual Report 2013
47 Advanced Computer Software Group plc
Annual Report 2013
46
Notes to the consolidated  
financial statements continued
3 Significant accounting policies continued 
Critical accounting estimates and judgements continued
Inventories
The trading subsidiaries within the Group review the net realisable value of, and demand for, their inventory on a 
regular basis to provide assurance that it is stated at the lower of cost and net realisable value. Factors that could 
impact estimated demand and selling prices include the timing and success of future technological innovations, 
competitor activities, supplier prices and economic trends.
Share-based payments
The fair value of share-based payments is estimated using the binomial valuation model as at the date of grant and 
using certain assumptions. These assumptions are disclosed in note 25.
Provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a 
result of a past event, that can be reliably measured and it is probable that an outflow of economic benefits will be 
required to settle the obligation. In arriving at estimates for provisions, judgements are made, in particular with regard 
to timing and amount. Calculations are based on anticipated future cashflows relating to the relevant event, which 
are estimated by management and where appropriate supported by the use of external advisers.
Taxation
The Group is subject to UK corporate taxation and judgement is required in determining the provision for income  
and deferred taxation. The Group recognises taxation assets and liabilities based upon estimates and assessments  
of many factors including past experience, advice received on the relevant taxation legislation and judgements 
about the outcome of future events. To the extent that the final outcome of these matters is different from the amounts 
recorded, such differences will impact on the taxation charge made in the consolidated income statement in the 
period in which such determination is made.
Standards, amendments and interpretations to existing standards not yet effective
At the date of approval of these financial statements, the following standards, interpretations and amendments were 
issued but not yet mandatory for the Group and early adoption has not been applied:
International Financial Reporting Standards (‘IFRS’)
 > IFRS10 Consolidated Financial Statements
 > IFRS11 Joint Arrangements
 > IFRS12 Disclosure of Interests in Other Entities
 > IFRS13 Fair Value Measurement
Amendments to existing standards
 > Amendment to IAS1, Presentation of Other Comprehensive Income
 > Amendments to IFRS7 , Offsetting Financial Assets and Liabilities
All other amendments to existing standards are not yet endorsed by the EU at the date of approval of these  
financial statements.
It is considered that the above mentioned standards, amendments and interpretations will not have a significant 
effect on the results or net assets of the Group. Advanced Computer Software Group plc
Annual Report 2013
47 Advanced Computer Software Group plc
Annual Report 2013
46
Overview Business review Governance Financials
4 Revenue 
Revenue for the Group was generated from subsidiaries and almost all of the revenue is from customers based in  
the UK. Revenue can be split into recurring (managed services and software and hardware support contracts) and 
non-recurring (services and sale of software licences and hardware). The split of revenues for the year to 28 February 
2013 is shown below.
2013
Continuing
operations
£’000
Continuing
operations
£’000
2012
Discontinued
operations
£’000
Total
£’000
Recurring revenues 69,454 56,140 1,469 57,609
Non-recurring revenues 51,460 42,060 2,156 44,216
 120,914 98,200 3,625 101,825
5 Segments
During the year the Group had three reportable segments as described below, which were the Group’s divisions. 
These divisions represent the lower level of operating segment, excluding any aggregation, which is consistent with 
the internal reporting to the Board. The cash generating units (CGU) used for the goodwill impairment test in note 12 
is in line with the reported segments.
The divisions offered differing solutions and were managed separately as they required different resources and 
strategies. For each of the divisions, the Group’s Board reviewed internal management reports on a monthly basis, 
which showed adjusted EBITDA performance of each division. The following summary describes the operations of 
each division:
 > Health & Care: provides clinical software solutions, including patient care management and clinical support 
software to urgent and unscheduled healthcare providers and social care providers;
 > 365 Managed Services: provides hosting, cloud-enablement and managed IT services to a wide range of 
customers in both the public and private sectors; 
 > Business Solutions: provides a complete suite of back office applications including financial management, payroll, 
human capital management, e-procurement and document management to businesses in the retail, health & care, 
banking, leisure and other commercial sectors.
All three segments were reported in the prior year. In the year under review, the acquisition of Serco Learning and 
ATMS augmented the size of the Business Solutions segment and the acquisition of Strand and Fabric augmented  
the size of Health & Care and 365 Managed Services respectively.
‘Unallocated items’ represents the elimination of the inter-segment sales and shows the non-segmental Group 
expenses incurred during the period.
Information regarding the result of each reportable segment is included below which is consistent with the monthly 
information provided to the Board. Advanced Computer Software Group plc
Annual Report 2013
49 Advanced Computer Software Group plc
Annual Report 2013
48
Notes to the consolidated  
financial statements continued
5 Segments continued
Other information reported to the Board is on a Group-wide basis and therefore not associated with segments. 
Health & Care
Business 
Solutions
365 Managed 
Services
Unallocated 
items Total
 
2013
£’000
2012
£’000
 2013
£’000
 2012
£’000
2013
£’000
 2012
£’000
2013
£’000
2012
£’000
 2013
£’000
2012
£’000
External revenue 26,146 22,738 59,933 53,853 34,719 21,871 116 (262) 120,914 98,200
Recurring 15,430 14,217 31,729 28,923 22,295 13,000 – – 69,454 56,140
Non-recurring 10,716 8,521 28,204 25,051 12,424 8,750 116 (262) 51,460 42,060
Inter-segment revenue (190) (377) (401) (97) (287) (155) 878 629 – –
EBITDA 6,915 5,945 15,665 15,161 4,875 4,227 (2,185) (3,190) 25,270 22,143
Share-based payments 277 254 698 395 238 160 33 1,147 1,246 1,956
Acquisition costs – – 219 – – – 266 – 485 –
Adjusted EBITDA 7,192 6,199 16,582 15,556 5,113 4,387 (1,886) (2,043) 27,001 24,099
Depreciation      1,697 1,194 1,697 1,194
Amortisation of 
acquired intangibles      13,185 12,826 13,185 12,826
Finance costs      1,225 1,692 1,225 1,692
Tax      31 491 31 491
Product information
Revenue from products and services of the Group was as follows in the year:
 
2013
Continuing
operations 
£’000
Continuing
operations 
£’000
2012 
Discontinued
operations 
£’000
Total 
£’000
Product licence 17,685 16,435 955 17,390
Consultancy services 27,153 22,220 1,201 23,421
Maintenance 48,309 44,471 1,454 45,925
Managed services 21,145 11,669 15 11,684
Other 6,622 3,405 – 3,405
 120,914 98,200 3,625 101,825
Hardware has been reclassified from product licences to other revenue. Prior year figures have been reclassified 
accordingly.
Geographic information
The reported segments of the Group are mainly located in the UK and all material sales are made to customers 
inside the UK.
There are no material assets located outside the UK.
Major customer
No single customer accounted for more than 5% of the Group’s revenue in the year.
Net assets
Assets and liabilities are not reported internally by segment. Advanced Computer Software Group plc
Annual Report 2013
49 Advanced Computer Software Group plc
Annual Report 2013
48
Overview Business review Governance Financials
6 Profit from operations 
2013
Continuing
operations
£’000
Continuing
operations
£’000
2012
Discontinued
operations
£’000
Total
£’000
Profit from operations is stated after charging/(crediting):
Profit on disposal of fixed assets – (6) – (6)
    
Depreciation of tangible fixed assets   
Owned assets 1,540 1,122 25 1,147 
Leased assets 157 72 – 72
    
Amortisation of intangible fixed assets   
Capitalised development costs 1,070 658 – 658
Acquired intangible assets 13,185 12,826 686 13,512
    
Operating lease – lease payments   
Hire of plant and machinery – operating leases 1,892 1,398 – 1,398
Hire of other assets – operating leases 1,087 496 10 506 
    
Net foreign currency translation loss/(gain) 69 (56) – (56)
    
Audit services   
Fees payable to the Company's auditor for the audit of the 
Company and consolidated financial statements 20 20 – 20
    
Fees payable to the Company's auditor and  
its associates for other services:   
Audit of the Company's subsidiaries 150 128 – 128
Audit-related assurance services 15 15 – 15
Other assurance services 5 17 – 17
Taxation services 84 50 – 50
Other services 181 117 – 117
7 Finance income and costs
2013
Continuing
operations
£’000
Continuing
operations
£’000
2012
Discontinued
operations
£’000
Total
£’000
Bank interest receivable 51 27 – 27
Total financial income 51 27 – 27
Bank interest payable (1,070) (1,614) – (1,614)
Other interest (137) (55) – (55)
Loss on foreign exchange (69) (50) – (50)
Total financial costs (1,276) (1,719) – (1,719) Advanced Computer Software Group plc
Annual Report 2013
51 Advanced Computer Software Group plc
Annual Report 2013
50
Notes to the consolidated  
financial statements continued
8 Employee expenses
2013
Continuing
operations
£’000
Continuing
operations
£’000
2012
Discontinued
operations
£’000
Total
£’000
Wages, salaries and fees 48,351 40,661 1,414 42,075
Social security costs 4,898 5,075 148 5,223
Pension costs 1,400 1,286 62 1,348
 54,649 47 ,022 1,624 48,646
    
Share-based payments 1,246 1,956 72 2,028
 55,895 48,978 1,696 50,674
The average monthly number of employees of the Group (including directors) during the year was:
2013
Continuing
operations
Continuing
operations
2012
Discontinued
operations Total
Development and operations 674 601 23 624
Sales and marketing 167 158 1 159
Management & administration 110 92 1 93
 951 851 25 876
The remuneration of the directors of the Company was as follows:
2013
Continuing
operations
£’000
Continuing
operations
£’000
2012
Discontinued
operations
£’000
Total
£’000
Emoluments 817 725 – 725
Share-based payments – 766 – 766
Total 817 1,491 – 1,491
    
Highest paid director   
Gross salary 450 210 – 210
Car and other benefits in kind 1 3 – 3
Waived salary and bonus to charity – 206 – 206
 451 419 – 419
In the year ended 28 February 2013, six directors were remunerated as employees through payroll and one  
director was remunerated via a consultancy fee paid to Marwyn Capital LLP which is included in the directors’ 
remuneration report.
Vin Murria received £0.3m gross salary and £0.2m bonus during the year. The directors believe that the key 
management personnel are the executive directors. Advanced Computer Software Group plc
Annual Report 2013
51 Advanced Computer Software Group plc
Annual Report 2013
50
Overview Business review Governance Financials
9 Taxation
2013
Continuing
operations
£’000
Continuing
operations
£’000
2012
Discontinued
operations
£’000
Total
£’000
UK corporation tax 3,991 4,694 321 5,015
UK deferred tax (3,960) (4,203) (170) (4,373)
 31 491 151 642
The tax charge for the year is lower than the standard rate of 24% (2012: 26%) corporation tax in the UK as  
explained below:
2013
Continuing
operations
£’000
Continuing
operations
£’000
2012
Discontinued
operations
£’000
Total
£’000
Tax reconciliation:    
Profit on ordinary activities before tax 9,163 6,431 5,376 11,807
UK corporation tax at 24% (2012: 26%) 2,200 1,672 1,398 3,070
    
Effects of:   
Items not deductible/taxable for tax purposes 508 489 (1,252) (763)
Additional deduction for R&D expenditure (46) (89) – (89)
Other timing differences (164) – (3) (3)
Overseas tax differences 28 68 – 68
Relief for employee share schemes (316) – – –
Utilisation of previously unrecognised tax losses (101) (5) – (5)
Prior year adjustment (1,220) (309) (2) (311)
Change in tax rate (858) (1,335) 10 (1,325)
Tax charge for the year 31 491 151 642
The Group has recognised a zero tax charge for the year (2012: £0.7m). The effective tax rate of 0% (2012: 6%) has 
been driven by adjustments to deferred tax as a result of the change in the UK corporation tax rate (credit: £0.9m) 
and prior year adjustments (credit: £1.2m). The effective rate excluding these adjustments would be 23% (2012: 30%) 
which is lower than the statutory rate of 24% as a result of additional R&D relief and relief in respect of the exercise  
of options of £0.6m less non-tax deductible expenses of £0.5m.
On 3 July 2012 a 23% rate of UK corporation tax was enacted. The Group benefited from a £0.9m reduction in the 
2013 tax charge as a result of the reduction of the net deferred tax liabilities as at 28 February 2013 from 25% to 23%. 
Further reductions in the UK corporation tax rate are being discussed and are likely to be enacted.
10 Earnings per share
The basic earnings per share has been calculated by dividing the net profit attributable to ordinary shareholders by 
the weighted average number of shares in issue during the relevant period. 
Basic earnings per share
2013
Continuing
operations
Continuing
operations
2012
Discontinued
operations Total
Net earnings attributable to ordinary shareholders (£’000) 9,132 5,940 5,225 11,165
Weighted average number of ordinary shares in issue 346,407,684 337,539,801 337,539,801 337,539,801
Basic earnings per share 2.6p 1.8p 1.5p 3.3p Advanced Computer Software Group plc
Annual Report 2013
53 Advanced Computer Software Group plc
Annual Report 2013
52
Notes to the consolidated  
financial statements continued
10 Earnings per share continued
Diluted earnings per share
2013
Continuing
operations
Continuing
operations
2012
Discontinued
operations Total
Weighted average number of ordinary shares in issue 346,407,684 337,539,801 337,539,801 337,539,801
Adjustment for share schemes 65,659,056 60,500,635 60,500,635 60,500,635
Weighted average number of potential ordinary  
shares in issue 412,066,740 398,040,436 398,040,436 398,040,436
Diluted basic earnings per share 2.2p 1.5p 1.3p 2.8p
The diluted profit per share has been calculated by dividing the net profit attributable to ordinary shareholders by 
the weighted average number of shares in issue during the period, adjusted for potentially dilutive shares that are  
not anti-dilutive. 
The adjusted EPS is calculated by removing the one-off acquisition costs, share-based payments, amortisation of 
intangible assets and tax adjustments from the net profit.
Earnings
£’000
Weighted 
average
number of
shares
Per share 
amount
pence
Basic earnings 9,132 346,407,684 2.6
Dilution for employee share options 24,089,763
Dilution for MPS 41,569,293
Diluted earnings 9,132 412,066,740 2.2
 
Basic earnings 9,132 346,407,684 2.6
Amortisation of acquired intangible assets 13,185
Share-based payments 1,246
Acquisition costs 485
Tax effect on adjustment (4,799)
Adjusted earnings 19,249 346,407,684 5.6
 
Diluted earnings 9,132 412,066,740 2.2
Amortisation of acquired intangible assets 13,185
Share-based payments 1,246
Acquisition costs 485
Tax effect on adjustment (4,799)
Adjusted diluted earnings 19,249 412,066,740 4.7
11 Acquisitions
Acquisitions during the year
Fabric Technologies Limited
On 30 April 2012, the Group acquired all the ordinary share capital in Fabric Technologies for a total cash 
consideration of £4.6m. Fabric provides managed services and unified communication solutions to customers in 
banking and other professional services sectors and has been fully integrated into the Advanced 365 Managed 
Services division. In the ten months to 28 February 2013 the subsidiary contributed £0.2m to the consolidated net profit 
for the year. If the acquisition had occurred on 1 March 2012, Group revenue would have been £1.3m higher with  
no effect on net profit. In determining these amounts, management has assumed that the fair value adjustments  
that arose on the date of acquisition would have been the same if the acquisition had occurred on 1 March 2012.  Advanced Computer Software Group plc
Annual Report 2013
53 Advanced Computer Software Group plc
Annual Report 2013
52
Overview Business review Governance Financials
11 Acquisitions continued
Acquisitions during the year continued
Book value
£’000
Adjustment
£’000
Fair value at 
acquisition
£’000
Property , plant and equipment 156 – 156
Cash and cash equivalents (8) – (8)
Current assets 2,926 – 2,926
Current liabilities (3,029) (113) (3,142)
Long term liabilities (37) – (37)
Customer contracts and relationships – 746 746
Technology – 119 119
Deferred tax liabilities (16) (208) (224)
(8) 544 536
Goodwill on acquisition 4,064
Consideration paid 4,600
Overdraft acquired 8
Net cash outflow 4,608
Serco Learning
On 31 December 2012, the Group acquired the trade and assets of Serco Learning for a cash consideration of £7 .3m. 
Serco is the supplier of management information systems to the UK education market, providing training and support 
to over 2,000 academies, independent schools and higher and further education providers. Serco Learning has been 
incorporated into the Advanced Business Solutions division complementing the division’s portfolio of IT solutions for 
the public sector. In the two months to 28 February 2013 the subsidiary contributed £0.2m to the consolidated net 
profit for the year. If the acquisition had occurred on 1 March 2012, Group revenue and net profit would have increased 
by £11.2m and £0.7m respectively. In determining these amounts, management has assumed that the fair value 
adjustments that arose on the date of acquisition would have been the same if the acquisition had occurred on  
1 March 2012.
Book value
£’000
Adjustment
£’000
Fair value at 
acquisition
£’000
Property , plant and equipment 64 – 64
Cash and cash equivalents 110 – 110
Current assets 3,558 – 3,558
Current liabilities (8,862) – (8,862)
Customer contracts and relationships – 3,040 3,040
Contracts – 2,840 2,840
Technology – 1,464 1,464
(5,130) 7,344 2,214
Goodwill on acquisition 5,036
Consideration paid 7,250
Cash acquired (110)
Net cash outflow 7,140
Fair values determined on a provisional basis. Advanced Computer Software Group plc
Annual Report 2013
55 Advanced Computer Software Group plc
Annual Report 2013
54
Notes to the consolidated  
financial statements continued
11 Acquisitions continued
Acquisitions during the year continued
On the acquisition of Serco, all assets were provisionally measured at fair value and appropriate intangible assets 
recognised following the principles of IFRS3. Management identified three separately identifiable intangible assets:
 > Customer contracts and relationships
 > Technology
 > Contractual arrangement
Customer contracts and relationships
The customer contracts and relationships were valued on an income basis. The value represents the present value of 
the projected cash flow, in excess of returns on contributory assets during the life of the relationship with the customer. 
Management believe that these customer relationships have a useful economic life of ten years and the intangible 
assets will be recognised over this period. 
Technology
Technology has been valued on a replacement cost basis capturing the effort that would be required to develop 
similar software. Management believe that the technology has a useful life of five years and the intangible asset  
will be recognised over this period.
Contractual arrangement
The contractual arrangement has been valued on a cost saving basis. Management believe that the contractual 
arrangement has a useful life of ten years and the intangible asset will be recognised over this period.
Small acquisitions during the year
The Group acquired all the ordinary shares of two entities during the year – Strand Technology Limited (acquired on 
12 September 2012) and A.T.M.S. Limited, previously A.T.M.S. plc, (acquired on 16 November 2012) as shown in the 
aggregated table below:
Strand
£’000
A.T.M.S.
£’000
Fair value at 
acquisition
£’000
Property , plant and equipment 5 19 24
Cash and cash equivalents 114 (132) (18)
Current assets 151 135 286
Current liabilities (351) (651) (1,002)
Customer contracts and relationships 221 – 221
Technology 45 – 45
Deferred tax liabilities (64) – (64)
121 (629) (508)
Goodwill on acquisition 1,879 1,029 2,908
Consideration paid 2,000 400 2,400
Cash acquired (114) 132 18
Net cash outflow 1,886 532 2,418
Fair values determined on a provisional basis. Advanced Computer Software Group plc
Annual Report 2013
55 Advanced Computer Software Group plc
Annual Report 2013
54
Overview Business review Governance Financials
11 Acquisitions continued
Prior year acquisitions
During the prior period, the Group acquired 100% of the issued share capital of Open Logistix Systems Limited for 
£1.2m net of cash acquired with the business.
Open Logistix 
Systems Limited
£’000
Property , plant and equipment 16
Cash and cash equivalents 1,169
Current assets 239
Current liabilities (790)
Long term liabilities (1)
Customer contracts and relationships 707
Technology 164
Deferred tax liabilities (227)
1,277
Goodwill on acquisition 1,123
Consideration paid 2,400
Cash acquired 1,169
Net cash outflow 1,231
Disposal during the prior year
During the prior year the Group disposed of Cedar HR Software Limited to Capita IT Services Holdings Limited for 
£16.1m (net of fees). The net assets of £0.5m together with the goodwill of £5.6m and net book value of intangible 
assets of £5.1m have resulted in a non-taxable profit on sale of £4.9m. During the prior year the discontinued 
operations contributed £1.0m (2011: £1.3m) to the Group’s net cashflow from operating activities, paid £nil  
(2011: £0.1m) towards investing activities and made no payments in either year to financing activities. 
Cedar
HR Software
£’000
Goodwill 5,599
Customer contracts and relationships 5,563
Brand 200
Technology 1,120
Deferred tax on intangibles (1,790)
Tangible assets 98
Cash 1,278
Net current liabilities (835)
Net assets 11,233
Sales proceeds 16,187
Less disposal fees (65)
Profit on sale of discontinued operation 4,889
Net sales proceeds 16,122
Less: cash disposed (1,276)
Net cash inflow 14,846 Advanced Computer Software Group plc
Annual Report 2013
57 Advanced Computer Software Group plc
Annual Report 2013
56
Notes to the consolidated  
financial statements continued
12 Intangible assets
Year ended 28 February 2013
Customer
contracts &
relationships
£’000
Brand
£’000
Technology
£’000
Contracts
£’000
Goodwill
£’000
Development
costs
£’000
Total
£’000
Cost
At beginning of year 62,502 3,630 20,806 – 65,301 4,795 157,034 
Acquisitions through  
business combinations 4,007 – 1,628 2,840 12,008 – 20,483
Eligible development costs 
capitalised – – – – – 2,056 2,056
At end of year 66,509 3,630 22,434 2,840 77,309 6,851 179,573
       
Amortisation      
At beginning of year 16,721 1,912 10,068 – – 1,368 30,069
Charged in year 7,030 861 5,128 166 – 1,070 14,255
At end of year 23,751 2,773 15,196 166 – 2,438 44,324
 
Net book value
At 28 February 2013 42,758 857 7,238 2,674 77,309 4,413 135,249
Net book value
At 29 February 2012 45,781 1,718 10,738 – 65,301 3,427 126,965
Expenditure on research and development in the year was £9.2m (2012: £8.5m) of which £2.1m (2012: £1.8m) 
relating to the development of new products was capitalised in accordance with IFRS.
Year ended 29 February 2012
 
 
Customer
contracts &
relationships
£’000
Brand
£’000
Technology
£’000
Goodwill
£’000
Development
costs
£’000
Total
£’000
Cost      
At beginning of year 68,887 3,965 22,519 69,777 3,016 168,164
Acquisitions through business combinations 707 – 164 1,123 – 1,994
Eligible development costs capitalised – – – – 1,779 1,779
Disposals (see note 11) (7,092) (335) (1,877) (5,599) – (14,903)
At end of year 62,502 3,630 20,806 65,301 4,795 157,034
       
Amortisation      
At beginning of year 10,500 1,174 5,936 – 710 18,320
Charged in year 7,750 873 4,889 – 658 14,170
Disposals (see note 11) (1,529) (135) (757) – – (2,421)
At end of year 16,721 1,912 10,068 – 1,368 30,069
      
Net book value      
At 29 February 2012 45,781 1,718 10,738 65,301 3,427 126,965
 
Net book value     
At 28 February 2011 58,387 2,791 16,583 69,777 2,306 149,844 Advanced Computer Software Group plc
Annual Report 2013
57 Advanced Computer Software Group plc
Annual Report 2013
56
Overview Business review Governance Financials
12 Intangible assets continued
Impairment tests for cash-generating units containing goodwill.
The goodwill on the balance sheet relates to the acquisitions in the current and prior periods (Acquisition note 11) 
and is calculated as the total consideration paid less the fair value of the net assets acquired.
This goodwill was tested for impairment as at 28 February 2013 following IAS36 criteria.
Management compared the carrying value of each CGU to the value in use, to confirm that no impairment of 
goodwill is necessary. The value in use was calculated using the subsidiary’s Board approved 2013-14 budget and 
the 2014-15 and 2015-16 forecasts, with a 4% growth assumption, for the following four years. Terminal values were 
calculated, based on the perpetuity of cash generated. Forecasts and terminal values were discounted using the 
following discount rates:
365 Managed Services  21.0% 
Business Solutions 13.0% 
Health & Care  13.0%
The pre-tax discount rates are based on the Group’s weighted average cost of capital, beta values and rates of 
similar companies in the same industry adjusted to reflect management’s assessment of specific risks related  
to the subsidiary.
No impairment is deemed necessary as a result of the testing performed as shown in the table below:
CGU listing
Goodwill
£’000
Intangibles
£’000
Fixed
assets
£’000
Carrying
value
£’000
Value in 
use (VIU)
£’000
Excess VIU
£’000 Sensitivity
365 Managed Services 9,446 1,851 3,342 14,639 25,102 10,463 71%
Business Solutions 52,842 49,709 1,855 104,406 128,304 23,898 23%
Health & Care 15,021 1,991 701 17,713 71,077 53,364 301%
The sensitivity shows the sensitivity of the excess over VIU in relation to the carrying value of the CGU.
The key assumptions used and the approach to determine their value are:
Assumption How determined
Discounted future cashflows 
These have been based on the Board approved forecasts 
for 2015 and 2016 with a 4% growth assumption for the 
following two years.
Perpetuity cashflows 2.5% growth
Similar assumptions and discount rates were used in the previous year ended 29 February 2012. No impairment was 
deemed necessary as shown in the table below:
CGU listing
Goodwill
£’000
Intangibles
£’000
Fixed 
assets
£’000
Carrying
value
£’000
Value in 
use (VIU)
£’000
Excess VIU
£’000 Sensitivity
365 Managed Services 5,382 1,614 2,258 9,254 23,138 13,884 150%
Business Solutions 45,489 53,428 1,942 100,859 121,424 20,565 20%
Health & Care 12,831 3,107 355 16,293 64,488 28,195 296% Advanced Computer Software Group plc
Annual Report 2013
59 Advanced Computer Software Group plc
Annual Report 2013
58
Notes to the consolidated  
financial statements continued
13 Property, plant and equipment
Year ended 28 February 2013
 
Property
£’000
Office
equipment 
& furniture
£’000
Computer 
equipment
£’000
Total
£’000
Cost    
Balance at 1 March 2012 1,632 3,376 14,547 19,555
Additions in the year 421 41 2,338 2,800
Assets acquired as part of business combinations – 9 516 525
At 28 February 2013 2,053 3,426 17,401 22,880
    
Depreciation
Balance at 1 March 2012 283 2,850 11,832 14,965
Depreciation charge for the year 186 131 1,380 1,697
Assets acquired as part of business combinations – 5 276 281
At 28 February 2013 469 2,986 13,488 16,943
 
Net book value
At 28 February 2013 1,584 440 3,913 5,937
 
Net book value    
At 29 February 2012 1,349 526 2,715 4,590
The net book value of computer equipment includes an amount of £0.8m (2012: £0.6m) in respect of assets held 
under finance leases.
Year ended 29 February 2012
Property
£’000
Office
equipment &
furniture
£’000
Computer
equipment
£’000
Total
£’000
Cost    
Balance at 1 March 2011 1,489 5,821 10,693 18,003
Reclassification 143 (2,661) 2,395 (123)
Additions in the year – 335 2,012 2,347
Assets acquired as part of business combinations – 12 4 16
Disposals – (131) (557) (688)
At 29 February 2012 1,632 3,376 14,547 19,555
    
Depreciation
Balance at 1 March 2011 166 4,749 9,467 14,382
Reclassification 47 (2,022) 1,852 (123)
Depreciation charge for the year 78 212 929 1,219
Disposals (8) (89) (416) (513)
At 29 February 2012 283 2,850 11,832 14,965 
     
Net book value
At 29 February 2012 1,349 526 2,715 4,590
     
Net book value
At 28 February 2011 1,323 1,072 1,226 3,621 Advanced Computer Software Group plc
Annual Report 2013
59 Advanced Computer Software Group plc
Annual Report 2013
58
Overview Business review Governance Financials
14 Inventories
2013
£’000
2012
£’000
Finished goods 397 221
Work in progress 2,495 1,320
 2,892 1,541
15 Trade and other receivables
2013
£’000
2012
£’000
Trade receivables 28,571 22,688
Other receivables 964 109
Prepayments 6,181 4,493
Accrued income 1,109 665
 36,825 27,955
Trade receivables include a provision of £1.2m (2012: £0.7m) for bad debts.
16 Cash and cash equivalents
2013
£’000
2012
£’000
Cash at bank 33,408 9,937
Bank short term deposits 11 11
 33,419 9,948
17 Trade and other payables: current
2013
£’000
2012
£’000
Trade payables 3,753 2,491
Taxation and social security 5,457 4,487
Accruals 12,617 10,443
Other payables 233 73
 22,060 17,494 Advanced Computer Software Group plc
Annual Report 2013
61 Advanced Computer Software Group plc
Annual Report 2013
60
Notes to the consolidated  
financial statements continued
18 Deferred tax liability
Deferred tax is calculated in full on temporary differences under the liability method using the taxation rate of 23% 
(2012: 25%). Deferred tax assets have been recognised on temporary differences where the directors believe that it  
is probable that these assets will be recovered.
2013 2012
 
Asset/
(liability)
£’000
 (Charged)/
credited to 
profit or loss
£’000
Asset/
(liability)
£’000
(Charged)/
credited to
profit or loss
£’000
Accelerated capital allowances 1,108 (349) 1,457 (559)
Short term temporary differences – liabilities (1,038) (158) (864) (244)
Short term temporary differences – assets 2,093 290 1,402 533
Acquired intangible assets (10,607) 4,201 (14,537) 4,871
Taxation losses 231 (24) 255 (228)
 (8,213) 3,960 (12,287) 4,373
Included in the net deferred tax liability of £8.2m is £3.4m of deferred tax assets split between £1.1m accelerated 
capital allowance, £0.2m tax losses and £2.1m short term temporary differences and £11.6m of deferred tax liability 
split between £10.6m intangible assets and £1.0m short term temporary differences.
The Group has £5.8m (2012: £6.1m) of trading losses of which £1.0m (2012: £1.0m) is expected to be utilised against 
future profits. The balance largely relates to losses acquired with the COA group that are unlikely to be utilised.
Deferred tax assets have not been recognised in respect of the following items due to uncertainties over availability 
of qualifying profits:
2013
£’000
2012
£’000
Non-trade loan relationship deficit 7,611 9,259
Management expenses 3,320 3,320
Capital losses 2,744 2,744
Taxation losses 1,503 1,752
 15,178 17,075
Deferred tax asset at 23% (2012: 25%) 3,491 4,269
19 Provisions: non-current
The non-current provision relates to dilapidations and onerous leases in respect of buildings leased by the Group as 
well as provision for deferred consideration on acquisitions.
 
Onerous 
lease 
provision
£’000
Leasehold
dilapidation
£’000
Deferred
consideration
for purchase 
of investment
£’000
Other
£’000
Total
£’000
At 29 February 2012 474 663 22 15 1,174
Amounts utilised during the year (34) – (22) (15) (71)
Amounts provided during the year 576 79 – – 655
Amounts arising from acquisitions – 72 – – 72
At 28 February 2013 1,016 814 – – 1,830 Advanced Computer Software Group plc
Annual Report 2013
61 Advanced Computer Software Group plc
Annual Report 2013
60
Overview Business review Governance Financials
20 Financial instruments
The maturity analysis of the Group’s financial liabilities for the year ended 28 February 2013 is as follows:
 Within 
the next 
12 months
£’000
 Within 
one to two 
years
£’000
 Within 
two to five 
years
£’000
Total 
financial 
liabilities
£’000
Loans and borrowings    
Term loan 2,500 – – 2,500
 2,500 – – 2,500
Finance lease >1 year 207 203 330 740
 2,707 203 330 3,240
Future interest payments 41 41 72 154
 2,748 244 402 3,394
The maturity analysis of the Group’s financial liabilities for the year ended 29 February 2012 was as follows:
 Within 
the next 
12 months
£’000
 Within 
one to two 
years
£’000
 Within 
two to five 
years
£’000
Total 
financial 
liabilities
£’000
Loans and borrowings    
Revolving facility 1,000 – – 1,000
Term loan 7,500 2,500 – 10,000
 8,500 2,500 – 11,000
Unamortised loan issue costs (361) (163) – (524)
 8,139 2,337 – 10,476
Finance lease >1 year 135 134 333 602
 8,274 2,471 333 11,078
Unamortised loan issue costs 361 163 – 524
Future interest payments 625 200 – 825
 9,260 2,834 333 12,427
Other financial liabilities 13,007 – – 13,007
 22,267 2,834 333 25,434
The banking facility was cancelled on the 27 February 2013 and the balance of the term loan, £2.5m, was paid on 
6 March 2013. Unamortised loan issue costs were expensed on cancellation of the facility. Advanced Computer Software Group plc
Annual Report 2013
63 Advanced Computer Software Group plc
Annual Report 2013
62
Notes to the consolidated  
financial statements continued
20 Financial instruments continued
The Group's financial assets
Cash and receivables
 
2013
£’000
2012
£’000
Trade and other receivables 35,716 27,290
Cash and cash equivalents 33,419 9,948
69,135 37,238
The above balance represents the Group’s maximum exposure to credit risk.
The fair value of the financial instruments is equal to the carrying value. In the normal course of the Group’s  
business and in common with other businesses, the Group encounters risks that arise from financial instruments.  
This note describes the Group’s objectives, policies and processes in managing these risks and the methods used  
to measure them.
Credit risk
Credit risk is the risk that a counterparty to a transaction with the Group fails to discharge its obligations in respect  
of the instrument. The Group’s credit risk arises on (i) transactions with customers following delivery of goods and/or 
services or (ii) cash and cash equivalents placed with banks and financial institutions.
Customers
The Group provides services to Government-backed organisations (for example, NHS Primary Care Trusts) and 
commercial businesses. A small proportion of revenue is generated outside of the UK. 
Management focuses strongly on working capital management and the collection of due invoices. Regular reports  
of overdue invoices are circulated amongst senior management and the Board reviews debtor days each month as 
part of the monthly reporting cycle. The risk with any one customer is limited by constant review of debtor balances 
and action to resolve any issues preventing discharge of obligations.
The table below shows the ageing of trade debtors that are past due invoice date and not impaired as at  
28 February 2013.
Ageing of trade receivables 2013:   
 Current 1-3 months >3 months
Trade receivables 20,158 7,960 453
    
Ageing of trade receivables 2012:   
 Current 1-3 months >3 months
Trade receivables 15,528 6,764 396
At the balance sheet date there were no significant concentrations of credit risk. The maximum exposure to credit 
risk is represented by the carrying amount of the trade and other receivables in the balance sheet. Advanced Computer Software Group plc
Annual Report 2013
63 Advanced Computer Software Group plc
Annual Report 2013
62
Overview Business review Governance Financials
20 Financial instruments continued
Dividend policy
The Board’s dividend policy is to balance the distribution of profits with the Group’s working capital requirements,  
the ongoing needs of the business, and its plans for merger and acquisition activities. 
Market risk
Market risk is the risk that the fair value or cashflows of a financial instrument will fluctuate due to changes in market 
prices. In managing interest rate and currency risks, the Group aims to reduce the impact of short term fluctuations 
on the Group’s earnings. Over the longer term, however, permanent changes in interest rates and foreign exchange 
would have an impact on consolidated earnings.
Interest rate risk
On 7 March 2013 the Group negotiated a new banking facility. The facility is structured as a term loan repayable in 
equal instalments until 2016 and a revolving credit facility , which expires in 2016. Both facilities are denominated in 
sterling and incur interest at LIBOR plus 2.25%-3%. The revolving credit facility is repayable at the Group’s discretion 
on a monthly basis with the interest accrued, or on demand. The Group is obliged to comply with certain covenants, 
as detailed in the going concern disclosures.
In May 2013, the Group entered into a contract to hedge two-thirds of the term loan with a cap at 1% on LIBOR.  
The Directors believe this hedge limits the Group’s exposure to interest rate changes to a manageable level.
 2013 2012
Weighted average interest rates receivable – –
Weighted average interest rates payable 2.77% 3.36%
Currency risk
The Group earns very small levels of revenue from outside the UK. The value of recurring revenue is converted at 
each invoice date from a fixed sterling value to varied USD and EUR values, thereby minimising the currency risk  
to the Group. It is Group policy not to enter into hedging arrangements to mitigate currency risk due to the 
disproportionate cost versus risk.
All cash and cash equivalents at 28 February 2013 were denominated in sterling.
Liquidity risk
Liquidity risk is the risk that the Group cannot meet financial liabilities when they fall due. The Group’s policy for 
managing liquidity risk is to ensure that the business has enough financial resources to meet its day-to-day activities 
at any point in time. Management believes that the cash resources on hand, together with the profits of the business 
more than cover the resources needed to meet the financial liabilities of the Group.
Capital management
The Group manages its capital structure to safeguard the going concern of the Group and provide returns for 
shareholders and benefits for other stakeholders. 
The capital structure of the Group consists of equity (including share capital, retained earnings and other reserves) 
and debt. The Group may maintain or adjust capital structure in the future by issuing new shares, returning capital 
to shareholder or by paying dividends. Advanced Computer Software Group plc
Annual Report 2013
65 Advanced Computer Software Group plc
Annual Report 2013
64
Notes to the consolidated  
financial statements continued
21 Commitments
Operating leases
At the end of the year, the future minimum lease payments under non-cancellable operating leases are payable  
as follows:
 
 
Land &
buildings
£’000
2013
Plant &
machinery
£’000
Others
£’000
Land &
buildings
£’000
2012
Plant &
machinery
£’000
Others
£’000
Less than one year 1,494 1,474 295 1,117 1,796 286
Between one and five years 2,859 1,622 395 2,309 2,209 290
More than five years 210 – – – – –
 4,563 3,096 690 3,426 4,005 576
The other operating leases are mainly related to office equipment. 
Pension commitments
The Group has no defined benefit pension schemes in place. The Group pays defined contributions into a Group 
Personal Pension Plan and certain individual pension plans. The assets of each of these plans are held separately 
from those of the Group in independently administered funds. The pension charge represents contributions payable 
by the Group in the year and amounted to £1.4m (2012: £1.3m).
22 Related parties
The Group has identified two related parties with which it has transacted during the year.
On 27 July 2012 the Company and Michael Jackson, Chairman, each acquired 50% of the issued share capital of 
Intercede 2445 Limited for £0.5m. Due to the size of the investment it has been treated as an available for sale asset.
Mark Watts, Non-Executive Director, who resigned in September 2012, was also a partner in Marwyn Capital LLP , 
Marwyn Management Partners LLP and Marwyn Investment Management Limited. 
The fees for Mark Watts’ services were invoiced by Marwyn Capital LLP and amounted to £0.01m for the current year.
Marwyn Value Investors, a substantial shareholder in the Company , is managed on an arm’s length basis by 
Marwyn Investment Management Limited. As at 28 February 2013, Marwyn Value Investors held 41,849,431 shares 
via its nominee, Goldman Sachs Securities Nominees Limited, which represented 10.23% of the issued capital of the 
Company on that date.
23 Group entities
Control of the Group
The Company believes there is no overall controlling party of Advanced Computer Software Group plc. 
The significant subsidiaries of the Group have been disclosed below.
Country of
incorporation
Principal
activity
Class of 
share held
Percentage
held
Drury Lane (Jersey) Limited* Jersey
Holding
company
Ordinary
shares 100%
Advanced Health and Care Limited** England
Software
development
Ordinary
shares 100%
Advanced 365 Limited ** England
IT managed
services
Ordinary
shares 100%
Advanced Business Software and Solutions Limited** England
Software
development
Ordinary
shares 100%
* Owned directly by Advanced Computer Software Group plc
** Owned indirectly by Advanced Computer Software Group plc Advanced Computer Software Group plc
Annual Report 2013
65 Advanced Computer Software Group plc
Annual Report 2013
64
Overview Business review Governance Financials
24 Equity 
As at 28 February 2013 the Company had 409,042,382 issued and fully paid ordinary shares listed on the Alternative 
Investment Market of the London Stock Exchange. Of these, 17 ,761,651 shares are held in the Employee Benefit Trust (EBT) 
for Vin Murria. The Company has one class of ordinary shares which carry no right to fixed income. Each share 
carries the right to one vote at general meetings of the Company , except that Vin Murria’s interest in the above  
jointly owned shares carried no voting rights at the balance sheet date.
2013 2012
Number £’000 Number £’000
Authorised for issue
Ordinary shares of £0.10 each 1,000,000,000 100,000 1,000,000,000 100,000
Allotted, called up and fully paid
Ordinary shares of £0.10 each 409,042,382 40,904 356,161,887 35,616
During the year to 28 February 2013, the Company issued 35,645,489 shares for cash and 17 ,235,006 shares for share 
options exercised. The movement in equity was as follows:
Number of
shares £’000
Shares in issue at 1 January 2008 45,000,000 4,500
   
Shares issued for cash 86,088,235 8,609
Shares issued as consideration for acquisitions 40,294,119 4,029
Shares issued to Employee Benefit Trust 19,537,816 1,954
   
Shares in issue at 28 February 2009 190,920,170 19,092
Shares issued for cash 145,250,000 14,525
Shares issued as consideration for acquisitions 18,710,422 1,871
   
Balance at 28 February 2010 and 28 February 2011 354,880,592 35,488
Shares issued for cash 483,296 48
Shares issued to settle entitlements under the MPS 797 ,999 80
 
Balance at 29 February 2012 356,161,887 35,616
Issue of share capital
Shares issued for cash 35,645,489 3,564
Shares issued to settle entitlements under the MPO 13,307,424 1,331
Shares issued in respect of employee options exercised 3,927,582 393
Balance at 28 February 2013 409,042,382 40,904
Share premium reserve
This represents the amounts subscribed for share capital in excess of the nominal value of those shares.
Merger reserve
The merger reserve represents the difference between the fair value and nominal value of the 59,004,541 ordinary 
shares allotted to the vendors of the new businesses acquired since August 2008. Advanced Computer Software Group plc
Annual Report 2013
67 Advanced Computer Software Group plc
Annual Report 2013
66
Notes to the consolidated  
financial statements continued
24 Equity continued
Share trust reserve
Transactions of the Company-sponsored EBT are treated as being those of the Company and are therefore reflected 
in the Parent Company and Group financial statements. In particular, the EBT’s purchases and sales of shares in the 
Company are debited and credited directly to equity. The share trust reserve comprises the costs of shares held by 
the EBT.
Retained earnings
This represents cumulative net gains and losses recognised in the consolidated income statement.
Foreign exchange reserve
The foreign exchange reserve comprises all foreign exchange differences arising from the translation of the financial 
statements of foreign operations.
25 Share options and management incentives 
Share option schemes
During the year, the Group implemented a new Save As You Earn scheme and granted options to certain employees 
under the existing Enterprise Management Incentive/unapproved share option scheme and Company Share  
Option Plan. 
The total expense recognised for the year from share-based payments was:
2013
£’000
2012
£’000
Equity-settled share-based payment expense 1,246 2,028
Enterprise Management Incentive (EMI)/unapproved share option scheme
The EMI scheme was approved by HM Revenue and Customs for share option grants that fall within the EMI rules. 
Options granted that do not fall within the EMI rules are deemed to be unapproved share options. Under the terms  
of this scheme all employees and directors of the Group are eligible to participate. The options entitle the recipient  
to acquire ordinary shares in the Company at an exercise price determined at the date of grant.
Marwyn Participation Option (MPO) and Management Participation Shares (MPS)
The MPO is an option over the Company’s shares which was held by Marwyn Management Partners LLP (‘Marwyn’). 
On 17 September 2012 Marwyn exercised its option in the MPO scheme and was awarded 13,307 ,424 shares  
in the Company at an exercise price of 10p per share.
The key executives of the Group have subscribed for MPS shares in Drury Lane (Jersey) Limited, a subsidiary  
of the Company. 
Accounting for MPO and MPS
The MPO and MPS schemes are share-based payment arrangements and awards made under each scheme to the 
relevant counterparty are made using similar terms and conditions. 
In exchange for the MPO, Marwyn agreed to assist the Company in meeting its business strategy by providing 
advice and assistance in evaluating the merits of strategic acquisitions and support in the overall market positioning 
of the Group in order to create additional shareholder value. These services were provided for the duration of the 
vesting period. The Company was not separately charged for any of these services by Marwyn. At inception of the 
scheme, the Company judged these services to be substantially similar to those provided by a non-executive director 
of the Group. Consequently , the Company has accounted for this scheme under IFRS2 as if the services were 
rendered by an employee. Advanced Computer Software Group plc
Annual Report 2013
67 Advanced Computer Software Group plc
Annual Report 2013
66
Overview Business review Governance Financials
25 Share options and management incentives continued
Accounting for MPO and MPS continued
Each scheme entitles the counterparty to receive a fixed percentage of any increase in ‘shareholder value’ at the 
termination of the scheme. Each award is subject to the achievement of a growth condition and certain vesting 
criteria. Shareholder value for this purpose is broadly defined as the difference between:
 > the market capitalisation of the Company at the date of exercise; and
 > the sum of the market capitalisation of the Company on 29 August 2008 plus the aggregate subscription price 
of all ordinary share capital up to the relevant date of exercise, adjusted for dividends and any returns of capital  
to shareholders.
The growth condition was measured over a three-year period (‘the initial vesting period’) from the commencement  
of the scheme on 29 August 2008, to 29 August 2011. In order for the participants to receive any award, the 
Company’s share price must have grown by an 11% compound annual growth rate over the initial vesting period.
On 5 October 2011, the Remuneration Committee of the Board determined that the growth condition had been 
achieved and the awards therefore vested.
In the case of the MPO scheme, the counterparty was required to pay 10p (or nominal price) for the shares on the 
date when the award was settled. However, the counterparty received an award equivalent to 5% of the increase  
in shareholder value after deduction of this price. The MPO scheme was treated as equity settled as the counterparty 
subscribed for ordinary share capital of the Company. There was no other settlement option. 
In the case of the MPS scheme, the counterparties have subscribed for shares in a subsidiary company , Drury Lane 
(Jersey) Limited. On exercise of the awards, the counterparties may sell these shares and receive an amount 
equivalent to a pre-determined proportion of 15% of the increase in the Group’s value. At the Company’s discretion, 
the amount can be settled in cash or issue of shares in Advanced Computer Software Group plc. In addition to the 
conditions set out above, should the counterparty leave during the vesting period the awards are subject to good 
and bad leaver provisions. 
Save As You Earn (SAYE)
The Group has implemented four Save As You Earn schemes, in August 2009, August 2010, December 2011 and 
December 2012. Participation was open to all employees employed at the date of commencement of each three 
year scheme. All participants agreed to save a fixed amount monthly into the scheme and in return received an 
option to purchase shares in the Company at a discounted price at the conclusion of the scheme. The discounted 
share price is calculated as the market price at the commencement of the scheme less 10%-15%.
Company Share Option Plan (CSOP)
CSOP share options are awarded to certain Group employees to incentivise them to positively impact the Group’s 
performance over the medium term. The options are awarded with an exercise price equal to fair market value  
and typically cannot be exercised until three years after the date on which the option was granted. Options granted 
to employees who leave before the exercise date will usually lapse.  Advanced Computer Software Group plc
Annual Report 2013
69 Advanced Computer Software Group plc
Annual Report 2013
68
Notes to the consolidated  
financial statements continued
25 Share options and management incentives continued
The number and weighted average exercise prices of share options are as follows:
2013 2012
Weighted
average
exercise
price
(pence)
Number 
of options
granted
Weighted
average
exercise
price
(pence)
Number 
of options
granted
Outstanding at the beginning of the year 14.5 65,243,147 15.7 50,137,890
Granted during the year 12.0 3,911,170 15.0 8,492,265
Movement in the number of shares required  
to fulfil awards made under MPO/MPS 0.7 14,970,267 1.4 11,402,050
Options lapsed or exercised during the year 15.4 (18,492,762) (30.1) (4,789,058)
Outstanding at the end of the year 13.6 65,631,822 14.5 65,243,147
As at 28 February 2013 4,081,550 options were exercisable.
The fair value of all employee share schemes is measured using a binomial lattice model. Measurement inputs and 
assumptions are as follows:
For the options granted during the year:
Weighted
average fair
value of 
share options
(pence)
Weighted
average 
share price 
of share
options
(pence)
Weighted
average
exercise 
price
(pence)
Expected
volatility
Option life
(years)
Expected
dividends
Risk-free 
rate
EMI (unapproved) 20.6 65.3 62.1 30.0% 3.0 – 1.7%
CSOP 19.8 61.4 61.9 34.0% 3.0 – 1.0%
SAYE 12.1 65.3 55.0 25.0% 3.0 – 0.6%
For the options granted during the year ending 29 February 2012:
Weighted
average fair
value of 
share options
(pence)
Weighted
average 
share price 
of share
options
(pence)
Weighted
average
exercise 
price
(pence)
Expected
volatility
Option life
(years)
Expected
dividends
Risk-free 
rate
EMI (unapproved) 21.8 45.7 31.6 45.0% 3.0 – 1.7%
CSOP 18.3 45.8 45.8 45.0% 3.0 – 1.7%
SAYE 11.1 41.0 39.0 45.0% 3.0 – 0.5%
The expected volatility is based on the historic volatility adjusted for any expected changes to future volatility. Advanced Computer Software Group plc
Annual Report 2013
69 Advanced Computer Software Group plc
Annual Report 2013
68
Overview Business review Governance Financials
25 Share options and management incentives continued
The range of exercise prices and contractual life of these options can be analysed as follows:
Date of grant 2013 number Exercise price Contractual life
MPS* 30/07/2008 41,569,293 –  10.0 
EMI 14/10/2008 800,000 10.0  10.0 
EMI unapproved 14/10/2008 200,000 10.0  10.0 
EMI 04/06/2009 501,500 10.0  10.0 
EMI 08/06/2009 320,000 10.0  10.0 
SAYE 21/09/2009 187,550 30.0  4.0 
CSOP 06/01/2010 606,266 38.5  10.0 
EMI unapproved 06/01/2010 1,466,234 38.5  10.0 
CSOP 18/03/2010 1,315,000 40.0  10.0 
EMI unapproved 18/03/2010 2,351,000 40.0  10.0 
SAYE 13/08/2010 2,475,356 31.5  4.0 
CSOP 23/12/2010 372,940 34.0  10.0 
EMI unapproved 23/12/2010 1,397,060 34.0  10.0 
CSOP 23/12/2010 43,027 36.8  10.0 
EMI unapproved 14/06/2011 33,000 35.5  10.0 
EMI unapproved 30/11/2011 4,600,000 28.0  10.0 
CSOP 30/11/2011 1,308,438 45.8  10.0 
EMI unapproved 30/11/2011 1,041,562 45.8  10.0 
SAYE 07/12/2011 1,232,426 39.0  4.0 
CSOP 24/07/2012 201,817 57.8  10.0 
EMI unapproved 24/07/2012 505,183 57.8  10.0 
CSOP 01/08/2012 49,792 60.3  10.0 
EMI unapproved 01/08/2012 208 60.3  10.0 
CSOP 14/12/2012 93,552 71.8  10.0 
EMI unapproved 14/12/2012 250,000 55.0 10.0
EMI unapproved 14/12/2012 406,448 71.8 10.0
SAYE 28/12/2012 2,304,170 55.0  4.0 
65,631,822
*  At 29 February 2012, the total shares required to settle awards under the MPS scheme was 28,005,680.  Advanced Computer Software Group plc
Annual Report 2013
71 Advanced Computer Software Group plc
Annual Report 2013
70
26 Subsequent events
On 7 March the Group acquired all the ordinary share capital of CSG Equity Co Limited (CSH) for a net cash 
consideration of £107 .0m, including the repayment of shareholder and institutional debt. CSH is a leading provider  
of accounting and back office software to the UK professional services market (legal and coroners) and Customer 
Relationship Management (CRM) software for the not for profit (NFP) market. It also provides accounting software  
to SMEs, as well as mobile solutions for field services operations. If the acquisition had occurred on 1 March 2012, 
Group revenue and adjusted EBITDA would have increased by £61.2m and £13.1m respectively. 
Book value
£’000
Adjustment
£’000
Fair value at
acquisition
£’000
Property , plant and equipment 2,100 – 2,100
Cash and cash equivalents 13,245 – 13,245
Current assets 13,453 – 13,453
Current liabilities (32,089) – (32,089)
Loans and borrowings (103,448) – (103,448)
Customer contracts and relationships – 20,860 20,860
Technology – 38,329 38,329
Deferred tax liabilities – (13,613) (13,613)
(106,739) 45,576 (61,163)
Goodwill on acquisition 77,960
Consideration paid 16,797
Cash acquired (13,245)
Loans and borrowing repaid 103,448
Net cash outflow 107 ,000
On acquisition of CSH, all assets were provisionally fair valued and appropriate intangible assets recognised 
following the principles of IFRS3. Management identified two separately identifiable intangible assets: 
 > customer contracts and relationships
 > technology.
A deferred tax liability relating to these intangible assets was also recognised.
Customer contracts and relationships
The customer contracts and relationships were valued on an income basis. The value is the present value of 
projected cashflows in excess of returns on contributory assets during the life of the relationship with customers. 
Management believe that these customer contracts and relationships have a useful economic life of at least  
ten years and therefore the intangible assets recognised will be recognised over this period.
Technology
CSH technology has been valued on a replacement cost basis capturing the efforts that would be required to 
develop similar software. Management believe that the technology has a useful economic life of at least five years 
and therefore the intangible assets recognised will be recognised over this period.
Assumptions
The assumptions used for valuing the intangibles included the internal rate of return (13.0%), assumptions about 
levels of new and lost revenue and about costs that would be incurred to generate that revenue.
Notes to the consolidated  
financial statements continued Advanced Computer Software Group plc
Annual Report 2013
71 Advanced Computer Software Group plc
Annual Report 2013
70
Overview Business review Governance Financials
Company balance sheet
as at 28 February 2013
Notes
2013
£’000
2012
£’000
Fixed assets
Investment in subsidiary undertakings 3 109,884 77,965
Total fixed assets 109,884 77,965
  
Current assets 
Cash at bank and in hand 125 230
Total current assets 125 230
  
Creditors: amounts falling due within one year 4 (40) (41)
Net current assets 85 189
  
Total assets less current liabilities 109,969 78,154
  
Creditors: amounts falling due after more than one year 5 (600) (185)
Net assets 109,369 77,969
  
Capital and reserves 
Share capital 6,7 40,904 35,616
Share premium 7 58,364 33,498
Merger reserve 7 7,826 7,826
Share trust reserve 7 (1,777) (1,777)
Retained earnings 7 4,052 2,806
Shareholders’ funds 7 109,369 77,969
These financial statements were approved by the Board of directors and authorised for issue on 25 June 2013 and 
were signed on its behalf by:
Guy Millward
Director
Company number 5966280 Advanced Computer Software Group plc
Annual Report 2013
73 Advanced Computer Software Group plc
Annual Report 2013
72
Notes to the financial statements  
of the Company
1 Accounting policies
The following accounting policies have been applied consistently in dealing with items which are considered 
material in relation to the Company’s financial statements.
Basis of preparation
The financial statements have been prepared in accordance with applicable accounting standards generally 
accepted in the UK and under the historical cost convention. The accounts have been prepared on the going 
concern basis.
Profit and loss account
Under section 408 of the Companies Act 2006 the Company is exempt from the requirement to present its own  
profit and loss account. The profit for the year ended 28 February 2013 is disclosed in note 8.
Taxation
Current tax, including UK corporation tax, is provided at amounts expected to be paid (or recovered) using the tax 
rates and laws that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised, without discounting, in respect of all timing differences between the treatment of certain 
items for taxation and accounting purposes which have arisen but not reversed by the balance sheet date, except as 
otherwise required by FRS19: Deferred Tax. Deferred tax assets are recognised to the extent that it is regarded as more 
likely than not that they will be recovered.
Investments in subsidiaries
Investments in subsidiaries are stated at cost less provision for impairment value. 
Employee Benefit Trust
As the Company is deemed to have some control of the Employee Benefit Trust, it is treated as a subsidiary 
undertaking. The assets (other than investments in the Company’s shares), liabilities, income and expenses are 
included on a line by line basis in the consolidated financial statements. The investment in the Company’s shares  
is shown in the share trust reserve and is treated as a deduction from equity in the balance sheet.
Share-based payments 
The Company operates equity settled share-based option plans. The Company has accounted for options granted  
to the employees of subsidiary undertakings as an increase in the investment in subsidiaries with the corresponding 
credit recognised in equity.
The fair value of the employee service is based on the fair value of the equity instrument granted. This expense is 
spread over the vesting period of the instrument. The corresponding entry is credited to equity. The liability for social 
security costs arising in relation to the awards is measured at each reporting date based upon the share price at  
the reporting date and the elapsed portion of the relevant vesting periods to the extent that it is considered that a 
liability will arise.
Dividends
Dividend distributions to the Company’s shareholders are recognised in the period when paid or, if earlier, in  
which the dividend is approved by the Company’s shareholders. No dividends were distributed in the year to 
28 February 2013.
2 Wages and salary costs
The Company has six directors; their costs are borne by subsidiary companies and their remuneration details are 
provided in note 8 of the Group financial statements. Advanced Computer Software Group plc
Annual Report 2013
73 Advanced Computer Software Group plc
Annual Report 2013
72
Overview Business review Governance Financials
3 Investments in subsidiaries
 £’000
As at 29 February 2012 77,965
Investment in subsidiaries 30,673
Share incentive charges – subsidiaries 1,246
As at 28 February 2013 109,884
The investment is the cost of the Company’s holding in Drury Lane (Jersey) Limited and Intercede 2445 Limited.
The significant undertakings, in which the Company has an interest at 28 February 2013 of more than 20%, either 
directly or indirectly , are as set out in note 23 of the Group financial statements.
4 Creditors: amounts falling due within one year
 
2013
£’000
2012
£’000
Accruals and deferred income 40 41
 40 41
5 Creditors: amounts falling due after more than one year
2013
£’000
2012
£’000
Amounts due to Group companies 600 185
 600 185
6 Called up share capital
2013 2012
 Number £’000 Number £’000
Authorised for issue    
Ordinary shares of £0.10 each 1,000,000,000 100,000 1,000,000,000 100,000
Allotted, called up and fully paid    
Ordinary shares of £0.10 each 409,042,382 40,904 356,161,887 35,616
Details of share capital issued by the Company and share options are detailed in notes 24 and 25 of the Group 
financial statements. Advanced Computer Software Group plc
Annual Report 2013
75 Advanced Computer Software Group plc
Annual Report 2013
74
Notes to the financial statements  
of the Company continued
7 Reconciliation of movement in shareholders’ funds
 
 
Ordinary 
share capital
£’000
Share 
premium
£’000
Merger 
reserve
£’000
Share trust 
reserve
£’000
Retained 
earnings
£’000
2013 
Total
£’000
2012 
Total
£’000
Opening balance 35,616 33,498 7,826 (1,777) 2,806 77,969 75,793
Issue of share capital 
For cash 3,564 24,952 – – – 28,516 –
In respect of the exercise  
of the options 1,724 704 – – – 2,428 185
Cost of issuing share capital – (790) – – – (790)
Share-based payment – – – – 1,246 1,246 1,991
Profit for the period – – – – – – –
Closing balance 40,904 58,364 7,826 (1,777) 4,052 109,369 77,969
8 Result for the year
The result for the year was £nil (2012: £nil). Advanced Computer Software Group plc
Annual Report 2013
75 Advanced Computer Software Group plc
Annual Report 2013
74
Registered office
Munro House
Portsmouth Road
Cobham
KT11 1 TF
Registered number
5965280
Nominated adviser and joint broker
N+1 Singer Capital Markets Limited
One Bartholomew Lane
London 
EC2N 2AX
Joint broker
Arden Partners plc
125 Old Broad Street
London
EC2N 1AR
Banker
HSBC Bank Plc
8 Canada Square
London
E14 5HQ
Auditor
KPMG Audit Plc
Arlington Business Park
Theale
Reading
RG7 4SD
Solicitor
Morrison & Foerster (UK) LLP 
City Point 
One Ropemaker Street 
London 
EC2Y 9AW
Registrar
Capita Registrars Limited
34 Beckenham Road
Beckenham
BR3 4TU
Company information Advanced Computer Software Group plc
Annual Report 2013
PB Advanced Computer Software Group plc
Annual Report 2013
76 Advanced Computer Software Group plc
Annual Report 2013
76
Notes This report has been printed in the UK. Our printers are accredited with the FSC  
chain of custody. All inks are vegetable-based. The paper is fully recyclable and 
biodegradable. If you have finished reading this report and no longer wish to retain it, 
please pass it on to other interested readers and recycle it. Thank you.
Designed and produced by The College  www.the-college.com
Profile
Advanced Computer Software Group plc  
is a leading provider of software and  
IT services to the public, private and  
not for profit sectors which enable 
organisations to improve efficiency ,  
reduce costs and drive growth.
The Group’s strategy – to develop the 
business through a combination of strong 
organic growth and complementary 
acquisitions – has resulted in a substantial, 
robust and cash generative organisation. 
Pro-forma
*
 turnover, following the  
key acquisition of Computer Software 
Holdings in March 2013, has grown  
to more than £190m in less than five years.
The Group now employs approximately 
1,900 staff servicing 20,000 customers  
from eight regional offices across the UK.
Advanced is listed on AIM (symbol ASW) 
and is an AIM UK Top 50 company .
Contents 
Overview
1  Operational and financial  
highlights
2 Business at a glance
4  U n l o c k i n g e f fi ci e n ci es :  
promoting growth
6 Chairman’s statement
Business review
8 Chief Executive’s review
11 Operating review
14 Financial review
17  Principal risks and uncertainties
1 8    C or p or a t e s o c i a l r e s p on s i b i l i t y 
statement
Governance
20 Board of directors
22  Statement of directors’ responsibilities
23 Directors’ report 
26 Corporate governance statement
29 Audit Committee report
31 Directors’ remuneration report
34  Independent auditor’s report
Financials
35 Consolidated income statement
3 6   C o n s o l i d a te d s t a te m e n t  
of comprehensive income
37  Consolidated balance sheet
38  Consolidated cashflow statement
3 9   C o n s o l i d a te d s t a te m e n t  
of changes in equity
40   Notes to the consolidated  
financial statements
71  Company balance sheet
72   Notes to the financial  
statements of the Company
75 Company information
*
 As if all acquisitions were present from 1 March 2012. Advanced Computer Software Group plc
Munro House 
Portsmouth Road 
Cobham 
Surrey KT11 1TF
T: +44 (0) 8451 606 162 
F: +44 (0) 1932 584 001 
E: investor-relations@advancedcomputersoftware.com 
www.advancedcomputersoftware.com
 
Advanced Computer Software Group plc 
Annual report 2013
Unlocking  
efficiencies
Advanced Computer Software Group plc  Annual Report 2013