Annual
 R e po rt
2014
Castleton Technology plc Annual Report 2014 In This Report
Discover more online 
www.castletonplc.com
Strategic Report
01 Operational Highlights
02 Chairman’s Statement
06 Chief Executive’s Review
08 Financial Review
12 Strategic Report
Financial Statements 
25 Consolidated Income Statement
26  Consolidated Statement of 
Comprehensive Income
27 Consolidated Balance Sheet
28  Consolidated Statement of  
Change in Equity
29 Consolidated Cash Flow Statement
30  Notes to the Consolidated 
Financial Statements
57  Company Balance Sheet 
(presented under UK GAAP)
58  Notes to the Company 
Financial Statements
Governance
14  Board of Directors and Advisers
16 Corporate Governance Statement
19 Directors’ Remuneration Report
21 Directors’ Report
23  Statement of Directors’ Responsibilities
24   Independent Auditor’s Report to the 
Members of Castleton Technology plc
Castleton, having 
experienced a period 
of significant change 
and with the post 
year end acquisition 
of Montal Holdings 
Limited, is on a 
journey to become 
a leading IT managed 
services provider , 
focusing on the 
public and not-for-
profit sectors.
Introduction and Performance
Castleton Technology plc 
Annual Report 2014 Financial Statements Governance Strategic Report
1
Castleton Technology plc 
Annual Report 2014
 – The successful demerger of the network based 
managed services businesses to Redcentric plc 
on 8 April 2013
 – Disposals during the year of Communica Holdings 
Ltd and QAD software consulting business, for the 
aggregate proceeds of £9.7 million
 – Change of name from Redstone plc to Castleton 
Technology plc
 – Profit from discontinued operations of £27 .6 million 
(2013: loss of £2.2 million)
 – Loss from continuing operations of £1.3 million 
(2013: loss of £1.8 million)
 – Year-end cash position of £2.8 million with the further 
deferred cash consideration and other receivables of 
£2.1 million due in the current financial year, of which 
£0.6 million has already been received
 – New strategy to become a leading provider of IT 
managed services to the public and not-for-profit sectors
 – Post year-end acquisition of Montal Holdings Limited 
(“Montal”) a well respected provider of IT managed 
services to the public and not-for-profit sector for 
£3.8 million in June 2014
 – Post year-end disposed of ABS, a proprietary software 
and consultancy business for £0.75 million in cash
Operational Highlights 2
Castleton Technology plc 
Annual Report 2014
Chairman’s Statement
“ In a year that has seen 
significant change, the Group 
is now ideally positioned to 
execute its strategy to 
become a leading IT managed 
services business, serving 
the public and not-for-profit 
sectors. The acquisition of 
Montal is the first building 
block and I’m sure we will 
see the transformation 
of the Group with further 
transactions over the 
coming months  
and years.” Financial Statements Governance Strategic Report
3
Castleton Technology plc 
Annual Report 2014
Dear Shareholder
I am pleased to report the results 
of the Group for the year ended 
31 March 2014. It has been a year of 
significant change, which has seen the 
Group finish its restructure and embark 
on a new strategy to build a focused 
IT managed services business serving 
the public and not-for-profit sectors. 
The journey started with the demerger 
of the network based managed 
services business to Redcentric plc 
(“the Demerger”) and moved post 
year-end to the acquisition, in June 
2014, of Montal Holdings Limited 
(“Montal”), a well-respected niche IT 
managed services business. This year 
has also seen the Group change its 
name from Redstone plc to Castleton 
T echnology plc. With the acquisition 
of Montal the Group is now on a clear 
path to achieving its goal of becoming 
a successful niche player in the public 
sector and not-for-profit IT managed 
services market place.
The results for the year highlight 
the fact that the Group has had a 
busy year: after the demerger of 
Redcentric, the Group disposed of two 
businesses. The most significant was 
the sale of Comunica Holdings Limited 
(“Comunica”) in November 2013 to 
Coms plc for £9.5 million in cash, 
of which £1.85 million was deferred 
for 12 months, and resulted in the 
Group changing its name to Castleton 
T echnology plc. The year has therefore 
seen significant reorganisation, which 
has involved a huge effort from many 
people: I would like to thank all those 
who have contributed, some of whom 
are no longer with the Group. 
I feel the Group is embarking on an 
exciting path, on which I am sure we 
will see further significant events, as 
we build a public sector focused IT 
managed service Group.
 
Reported Results
The Group income statement 
for the year reports the trading 
contribution from the business units as 
‘discontinued’, having been sold or held 
for sale. The remaining legacy assets 
of the Group have been classified as 
held for sale as the Board has deemed 
them to not be part of the Group’ s 
strategy in the future and consequently 
the Group will seek to dispose of them 
to provide further funding for growth. 
The income statement only reflects the 
costs of running the Group in the year, 
which are not attributed to the trading 
businesses. As a result, the Group loss 
for the year of £1.25 million includes no 
contribution from the trading business 
units, and with ABS, a proprietary ferry 
ticketing, erp and payroll software and 
consultancy business reported as ‘held 
for sale’, the Group’ s income statement 
and balance sheet have the appearance 
of a cash shell.
The Board has closely focused on cost 
control in the period, whilst it has sought 
suitable acquisition targets. During the 
year, and continuing post year-end, 
the cost of the Group overhead 
has been greatly reduced, with the 
Board taking half pay from 1 February 
2014 to 30 June 2014: full pay was 
reinstated with the start of the current 
investment programme. 4
Castleton Technology plc 
Annual Report 2014
Chairman’s Statement continued Financial Statements Governance Strategic Report
5
Castleton Technology plc 
Annual Report 2014
The Group’ s cash position at year-end 
of £2.8 million is before cash receivable 
by the Group from previous corporate 
transactions: the Group is owed 
£2.1 million at the year-end arising 
largely from the sale of Comunica, all of 
which is due in the current financial year 
and of which £0.6 million has already 
been received.
Whilst this year’ s results do not contain 
much in the way of guidance to the 
future, I expect with the scale that 
Montal brings to the Group and with 
the possibility of further acquisitions 
complementary to Montal and the 
Group’ s strategy, that the Group will 
look very different when it reports its 
results for the next financial year.
Banking and Financing
During the year, the Group settled all 
bank debt with the proceeds from the 
disposal of Comunica Holdings Limited, 
after which the Group had a net cash 
position of approximately £2.9 million. 
At year-end this stood at £2.8 million. 
Post the year-end, the Group financed 
the cash element of the consideration 
for the acquisition of Montal from 
existing Group cash resources. 
This included the early receipt of 
£0.6 million of deferred consideration 
from the disposal of Comunica. 
The Group has also agreed a new 
short-term bank facility to November 
2014 for £0.5 million, to be used to 
support working capital if required.
Equity
Prior to the demerger the Group placed 
75 million new ordinary shares at 8p 
per share. The £6.0 million raised was 
to provide sufficient working capital 
for each of the demerged businesses 
and to pay the costs associated with 
the demerger. 
Post Balance Sheet Events
The acquisition of Montal for 
£3.83 million was funded via existing 
cash resources of £3.04 million and loan 
notes of £0.79 million. The loan notes 
are repayable in 12 months and carry 
a coupon of 8%. The deal represents 
an enterprise value of approximately 
£3.6 million and, at current run rate 
EBITDA, a value multiple of six. 
Montal brings £6 million in annual 
revenues of which over 50% are 
recurring in nature. The business has 
delivered organic growth over the past 
three years with customer retention in 
excess of 90% and we are confident 
this trend will continue. The business 
offers a full suite of outsourced services 
including support, hosting, business 
solutions and consultancy and expertise 
and competencies across Microsoft, 
Citrix, Cisco, VMWare and CmpTIA. 
The business also has an experienced 
management team, which I have no 
doubt will prove to be a fantastic asset 
for the Group. Montal will be operated 
as a separate division of the Group and 
is self funding. 
I welcome the team at Montal to the 
Castleton Group and look forward to 
working with them. 
The one remaining business unit in 
the Group at the year-end was ABS, 
acquired as part of the Maxima Group 
in 2012; ABS is held for sale as reported 
in these accounts. The Board has 
evaluated the business and has decided 
that it will not be core to the Group’ s 
future strategy. 
On 29 August 2014 the Group disposed 
of the trade and certain assets of ABS 
for a total cash consideration of 
£0.75 million. The consideration will be 
settled £0.30 million at completion with 
a further £0.30 million on 30 September 
2014 and the remaining £0.15 million 
due on 31 March 2015.
The Board
The changes at Board level during the 
year included my appointment as non-
executive Chairman on 8 April 2013 and 
the appointment of Spencer Dredge 
as interim Group Finance Director, with 
Peter Hallett stepping down after his 
resignation in June 2013. I would like 
to thank Peter for his contribution to 
the Group over the past four and a 
half years. Spencer joined the Board in 
February 2014 having previously worked 
with the Group, in a variety of Group 
and divisional finance roles.
Richard Ramsay, our former  
non-executive Chairman, has said 
he would like to step down as a  
non-executive Director and will do so, 
in due course, once we have found a 
suitable replacement.
Opportunity/Outlook
We see an enormous opportunity with 
the fragmented nature of the IT services 
sector. The public and not-for-profit 
sectors offer a very substantial market 
opportunity for IT services. We believe 
that, by consolidating quality IT 
managed service assets, we can build a 
Group of significant scale, with a vertical 
focus, which we can use to leverage 
our market position. Our aspiration is 
to become the leading niche public 
sector IT managed services provider. 
We believe we can achieve this aim and 
the Group has made a positive start with 
the acquisition of Montal. The Board 
is fully focused on its new strategy and 
with the proven track record of our 
CEO, Ian Smith, an M&A specialist in 
this industry, I believe we will see the 
transformation of the Group over the 
coming months and years. MXC Capital 
is a cornerstone investor in the Group 
and has recently executed very similar 
strategies with other listed businesses, 
with great results. I believe we have 
both the foundations in place, with the 
Montal acquisition, and the experience 
of Ian and MXC Capital, to deliver value 
to our shareholders.
David Payne
Non-Executive Chairman
5 September 2014 6
Castleton Technology plc 
Annual Report 2014
Chief Executive’s Review
“ The IT services market 
in the UK is a very 
interesting space at this 
time. It is fragmented in 
nature, which presents 
the type of opportunities 
we, as the Board of 
Castleton, are looking for . 
The Group’ s new strategy, 
to become a leading 
IT managed services 
business, is evidenced 
with the acquisition of 
Montal Holdings Limited 
and my role in leading 
the Group, is to identify 
and deliver the next 
phase of the strategy 
with further acquisitions 
and their integration.” Financial Statements Governance Strategic Report
7
Castleton Technology plc 
Annual Report 2014
Overview
I am pleased to report the progress the 
Group has made during the financial 
year to 31 March 2014. The Group 
has undergone a strategic review 
following the demerger, and the Board 
is now confident that it can deliver its 
stated strategy of a ‘buy and build’ in 
the IT managed service space, with a 
focus on the public and not-for-profit 
sectors. The first building block has 
been put in place with the Montal 
acquisition in June 2014; the Board is 
committed to following this with further 
acquisitions, if the right opportunities 
present themselves.
Montal
Since the year-end the Group has made 
the important first step on its new 
journey, with the acquisition of Montal. 
Montal is a specialist outsourced IT 
managed service provider, with good 
penetration in the public and not-for-
profit sectors, particularly within social 
housing and care providers. I have good 
knowledge of the Montal operation, 
having had the benefit of closely 
monitoring its performance over the 
past 18 months. I firmly believe that 
Montal is a quality asset and a great 
platform from which the Group can 
grow, both organically and through 
further acquisitions. Montal has a 
mature and successful management 
team, which further supports my belief 
that Castleton has made a good start to 
executing its strategy.
Current Year Trading
Whilst the Group results for the year to 
March 2014 reflect a period of change, 
they also demonstrate the progress the 
Group has made from this time last year. 
The Group has sold the infrastructure 
business division, Comunica, for 
£9.5 million in cash followed by the 
disposal of QAD, a proprietary software 
consulting business, for £0.2 million in 
cash. With the post year-end disposal 
of ABS, this paves the way to building a 
‘pure play’ IT managed services group 
of scale, without the distractions of a 
diverse strategy.
Outlook
The IT services market in the UK is 
a very interesting space at this time. 
It is very fragmented in nature, which 
presents the type of opportunities we, 
as the Board of Castleton, are looking 
for. The visible nature of recurring 
annuity revenues supported by scalable 
infrastructure platforms highlights the 
compelling value that scale adds in this 
business model, which underpins the 
Board’ s strategy.
The next phase of the strategy will be to 
find complementary businesses to put 
alongside Montal. My role in leading 
the Group is to identify and realise these 
opportunities. I hope to be in a position 
to share with you progress in this area 
over the coming months. Integrating the 
acquisitions as we make them will play a 
huge role in shaping the success of the 
Group during this period. The Board is 
fully aware that it needs to support the 
divisional management, providing the 
necessary tools and resource to deliver 
the value from this strategy. 
Ian Smith
Chief Executive
5 September 2014 8
Castleton Technology plc 
Annual Report 2014
Financial Review Financial Statements Governance Strategic Report
9
Castleton Technology plc 
Annual Report 2014
I am pleased to present this report as 
interim Group Finance Director, having 
been appointed to the Castleton 
T echnology plc Board on 5 February 2014. 
In this report I will cover the results for 
the year ended 31 March 2014 and look 
at the new opportunities that we see for 
the future of the Group.
Principal Events and Overview
Castleton T echnology plc (previously 
Redstone plc) has undergone a 
significant period of change during 
the year. On 8 April 2013 the Group 
demerged the network based 
managed services businesses, now 
part of Redcentric plc. Later in the year 
followed two disposals, most notably 
the sale of Comunica Holdings Limited 
and its subsidiary Redstone Converged 
Solutions Limited on 5 November 2013, 
and also the disposal of the trade and 
assets of QAD, a proprietary software 
consultancy business on 3 March 2014.
At the balance sheet date the only 
remaining trading asset in the Group 
is our small niche proprietary software 
business unit ABS, based in Glasgow, 
with core products in ferry ticketing, 
ERP and payroll software. The Board 
has evaluated the business and has 
decided that it will not be core to the 
Group’ s future strategy. ABS has a 
good suite of products, a high level of 
recurring revenue and a strong software 
development team and consequently 
the Board believes it will be an attractive 
asset to potential acquirers. 
Auditors
As part of the on-going review of  
Group related costs and corporate 
governance best practice, the Board 
took the decision to change Group 
auditors from PwC to Baker Tilly. 
Baker Tilly Corporate Finance also 
supported the Group in its recent 
acquisition of Montal Holdings Limited.
Trading Results
Because all of the Group’ s trading 
operations have either been sold, or  
are held for sale, the loss for the year 
from continuing operations presented 
in the Income Statement comprises only 
the essential costs of maintaining the 
AIM listing, Board salaries, and finance 
and advisory expenses.
The prior year results presented herewith 
have been re-stated accordingly to 
provide a like-for-like comparison.
Revenue and Gross Profit
There were no Group revenues or  
gross profit from continuing activities in 
the year. The revenues and gross profit 
of the discontinued activities are shown 
in note 6. 
Administrative Expenses
The administrative expenses from 
continuing activities were incurred 
in relation to the Group Board and 
its advisers. These costs also include 
occupancy, back-office support 
services, and the fees associated with 
maintaining the AIM listing. 
Adjusted EBITDA*
Adjusted EBITDA for the year, a 
loss of £1.0 million (2013: loss of 
£0.6 million) comprises only the 
continuing operations and therefore 
arises as a result of the operating costs 
as explained above. The Board has 
continued to maintain tight cost controls 
on expenditure and, for the period 
between 1 February 2014 and 30 June 
2014, only received half pay.
Finance Income and Costs
Finance income comprises the fair value 
gain on the interest rate swap held by 
the Group, and finance costs comprise 
interest payable on bank borrowings.
Profit for the Year Attributable 
to the Owners of the Parent 
Company
The Group profit for the year to 
31 March 2014 is £26.4 million 
(2013: loss of £4.0 million). This is a 
combination of the operating loss 
after tax from continuing operations 
of £1.3 million (2013: £1.8 million), 
which includes finance income and 
costs, and the profit from discontinued 
operations of £27.6 million (2013: 
loss of £2.2 million). The profit from 
discontinued operations is explained 
in note 6.
Cash Flow
The principal cash outflows for the year 
were the cash absorbed by the loss on 
continuing and discontinued operations 
(£5.0 million), and the repayment of 
debt of £3.4 million. The principal 
cash inflows were from the disposal 
of Comunica and QAD software 
consultancy business (£7.8 million less 
£0.8m cash sold with the operations 
disposed of) and the proceeds of the 
placing of £6.0 million.
This resulted in an overall increase in 
funds of £4.6 million, giving a net cash 
position at the balance sheet date of 
£2.8 million. A further £2.1 million is due 
in the next financial year in relation to 
the demerger and the disposals made 
during the year, of which £0.6 million 
has already been received.
Since the year-end cash of £3.04 million 
has been utilised in the acquisition of 
Montal as further explained below.
Reporting Metrics
The reporting metrics and key 
performance indicators normally 
reviewed by the Board include the 
Income Statement categories as 
outlined in this report along with 
measures specific to individual business 
units and divisions, and the available 
resources and strength of the balance 
sheet. In summary, the Group results 
for this year are not reflective of where 
the Group is expected to be at the next 
reporting date and further performance 
indicators will be developed relevant to 
the results and activities of the Group in 
the next Half-Year and Annual Reports.
Demerger
Redcentric plc
The demerger of the network based 
managed service businesses to 
Redcentric plc (“Redcentric”) completed 
on 8 April 2013. The rationale for 
the transaction was to realise the 
‘trapped value’ of the then combined 
infrastructure solution and network 
managed solution businesses.
The Board believed that the higher 
valuation attributable to the network 
managed services business could only 
be realised by separation. 
The demerger was effected by a special 
dividend of £53.3 million. The special 
dividend was equal to the fair value of 
Castleton’ s interests in the managed 
services business that became Redcentric.
The dividend was satisfied in specie, 
by the transfer of shares in Redcentric 
Holdings Limited to Redcentric. 
Redcentric Holdings Limited was a 
wholly owned subsidiary of Castleton, 
*Earnings for the year from continuing operations 
before net finance costs, depreciation, amortisation, 
integration and strategic costs, goodwill impairment 
and share based payment charges. 10
Castleton Technology plc 
Annual Report 2014
Financial Review continued
incorporated to act as the vehicle to 
hold the consolidated net assets of the 
managed services businesses, which 
became Redcentric on demerger.
The £53.3 million fair value of the 
net assets and subsequent dividend 
equalled the market value of the shares 
in Redcentric. The market value was 
determined by the mid-market price  
on the first day of admission of 
Redcentric to AIM.
The cost of the net assets demerged 
was £23.3 million, which resulted in 
a gain on demerger of £30.0 million. 
This gain on demerger has been 
calculated by comparing the fair value 
of the businesses transferred with the 
net assets disposed of.
The gain on demerger is disclosed in 
the Income Statement as part of the 
profit on discontinued activities.
Disposals
Comunica Holdings Limited
On 5 November 2013 the Group 
disposed of its ICT infrastructure, data 
centre and smart building solutions 
business, Comunica Holdings Limited to 
Coms plc for a total cash consideration 
of £9.5 million with £7.65 million paid on 
completion and a further £1.85 million 
deferred for 12 months, becoming 
payable in November 2014. Subsequent 
to the year-end, Coms plc settled 
£0.6 million of the deferred balance early . 
Following the disposal of Comunica 
Holdings Limited the Group changed 
its name to Castleton T echnology plc, 
as all relevant intellectual property 
of Redstone including the Redstone 
brand, trademarks and domain names 
transferred across to Coms plc.
QAD
On 3 March 2014 the Group disposed 
of the trade and assets relating to the 
QAD software consultancy business 
to Glantus Limited for a total cash 
consideration of £200,000, of which 
£50,000 is deferred and payable in 
August 2014. The QAD business unit 
focused on consultancy and technical 
services to support ERP systems in the 
manufacturing and distribution sectors. 
The business had not been an area of 
growth for the Group partly as a result 
of there being no vendor relationship. 
The Board felt that significant financial 
and management investment would 
have been required to turn the 
business around and that the business 
unit was not considered to fit with 
the future strategy of focusing on IT 
managed services. 
Borrowings and Bank Facilities
The Group did not have any borrowings 
at the balance sheet date. Following the 
disposal of Comunica, all bank debt 
was repaid. 
As at the balance sheet date the Group 
continues to service the interest rate 
swap until it matures in September 
2015. The liability for the interest rate 
swap as recorded in these financial 
statements is £0.85 million and is cash 
settled on a quarterly basis.
The Group continues its relationship 
with Barclays Bank and in connection 
with the acquisition of Montal post 
year-end, the Group has arranged a 
new secured £0.5 million facility at 2.5% 
above the bank’ s base rate. This new 
arrangement is in place until November 
2014 when it expires.
Equity
Placing
In order to provide sufficient working 
capital for each of the demerged 
businesses and to pay the costs 
associated with the demerger and 
admission of Redcentric to trading on 
AIM, the Company raised by way of 
equity £6 million (before commission 
and expenses) by the issuance of 
75,000,000 new ordinary shares at 
a price of 8 pence per share. 
T otal Group equity at 31 March 2014 
was £2.9 million (2013: £23.7 million) 
and reflects the period of divestment.
Post Balance Sheet Events
On 23 June 2014 Castleton announced 
the acquisition of the entire issued share 
capital of Montal for a total consideration 
of £3.83 million, payable £3.04 million in 
cash and £0.79 million in loan notes. 
The £3.04 million cash consideration 
was funded out of existing Group cash 
resources including utilising the collateral 
cash set aside for the interest rate swap. 
In addition, Barclays extended a 
£0.5 million facility to support working 
capital should the need arise. 
The loan notes carry an 8% coupon, and 
fall due to be settled within 12 months.
Montal specialises in providing 
outsourced IT services to the public 
and not-for-profit sectors, particularly 
within social housing and care providers 
and provides a full suite of outsourced 
services including support, hosting, 
business solutions and consultancy. 
Montal offers a broad range of 
expertise and competencies across 
Microsoft, Citrix, Cisco, VMware and 
CmpTIA platforms.
Montal has a proven track record, 
delivering turnover of £5.7 million 
and EBITDA of £0.5 million in its 
previous full year trading results.
On 29 August 2014 the Group disposed 
of the trade and certain assets of ABS, 
the ferry ticketing, ERP and payroll 
software and consultancy business 
operated by Maxima Information Group 
Limited, for a total cash consideration of 
£0.75 million. The consideration will be 
settled £0.30 million at completion with 
a further £0.30 million on 30 September 
2014 and the remaining £0.15 million 
due on 31 March 2015.  
Group Strategy
The Group’ s transformation period 
continues. Having successfully disposed 
of assets not aligned with the future 
strategy, the Group is fully focused on 
building a scale IT managed services 
business. The acquisition of Montal is 
the first step and provides a platform 
for consolidation; the strategy remains 
to seek further acquisitions in the 
technology sector to build a public 
sector focused managed services 
business. The Board feels that, given the 
fragmented nature of the sector, there 
will be ample opportunity to achieve 
its strategy, as access to available and 
suitable targets clearly exists, Montal 
being a good example.
Spencer Dredge
Finance Director
5 September 2014 Financial Statements Governance Strategic Report
11
Castleton Technology plc 
Annual Report 2014 12
Castleton Technology plc 
Annual Report 2014
Strategic Report
The Directors present their 
strategic report for the year ended 
31 March 2014.
Review of the Business
A detailed review of the business is 
set out in the Chairman’ s statement 
on pages 2 and 5 and in the Chief 
Executive’ s and Financial reviews set 
out on pages 6 to 11. Included in these 
reviews are comments on the key 
performance indicators that are used 
by the Board on a monthly basis to 
monitor and assess the performance of 
the business. These indicators include 
the level of revenue turnover, gross 
profit, gross profit percentage, adjusted 
EBITDA* and costs.
The consolidated income statement 
for the year is set out on page 25. 
The profit of the Group for the year was 
£26.4 million (2013: loss of £4.0 million). 
The Directors do not recommend the 
payment of a dividend (2013: £nil). 
As more fully described in note 6 the 
Board decided that a demerger of 
the managed services business was 
in the best interests of the Company 
and would deliver additional value to 
shareholders over time. 
The demerger was effected by the 
declaration of a special dividend 
in Castleton, accounted for as the 
fair value of Castleton’ s interests 
in the managed services business. 
The dividend was satisfied, in specie, 
by the transfer of the shares in 
Redcentric Holdings Limited (“RCH”) to 
Redcentric plc. RCH was a new wholly 
owned subsidiary of Castleton, formed 
as a vehicle to hold the interests of 
the consolidated managed services 
business (prior to the demerger).
The Directors have attributed a fair 
value of £53.3 million to the dividend, 
equivalent to the market value of the 
shares issued by Redcentric, as 
permitted under IFRIC 17 “Distribution 
of non-cash assets to owners”. 
Market value was determined as the 
mid-market price on the first day of 
admission of the Redcentric plc shares 
to AIM on 8 April 2013.
The cost to the Group of satisfying 
the dividend liability was the transfer 
of the net assets held for demerger in 
RCH at the demerger date. The net 
assets held for demerger amounted 
to £23.3 million. The resulting gain of 
£30.0 million has been recorded in the 
consolidated income statement under 
discontinued operations as required by 
IFRIC 17.
Future Developments
Future developments and current 
trading and prospects are set out in the 
Chairman’ s statement and in the Chief 
Executive’ s and Financial reviews.
Principal Risks and Uncertainties
Identifying, evaluating and managing 
the principal risks and uncertainties 
facing the Group is an integral part 
of the way we do business. We have 
policies and procedures in place 
throughout our operations that enable 
us to do so, embedded within our 
management structure and as part 
of our normal operating processes. 
Whilst the Group has no continuing 
operations at the year-end, it has 
adopted the approach to managing 
risks and uncertainties set out below 
in respect of discontinued activities 
during the year, and will adopt a similar 
approach as it builds its new business.
Market and economic conditions are 
recognised as one of the principal risks 
in the current trading environment. 
This risk is mitigated by the monitoring 
of trading conditions and the constant 
search for ways to achieve new 
efficiencies in the businesses without 
impacting levels of service. 
Reliance on key personnel  
and management
The success of the Group will be 
dependent on the services of key 
management and operating personnel. 
The Directors believe that the Group’ s 
future success will depend largely on 
its ability to retain and attract highly 
skilled and qualified personnel, and to 
expand, train and manage its employee 
base. There can be no guarantee that 
suitably skilled and qualified individuals 
will be retained or identified and 
employed. If the Group fails to retain 
or recruit the necessary personnel, or if 
the Group loses the services of any of 
its key executives, its business could be 
materially and adversely affected.
Competition risk
The Group operates in a highly 
competitive IT product, software and 
services marketplace and while the 
Directors believe the Group enjoys 
significant strengths and advantages 
in competing for business some of 
the competitors are much larger 
with considerable scale that could 
allow them to offer similar services 
for materially lower prices than the 
Group could match while maintaining 
a margin in the range targeted by 
the management of the Group. 
Therefore competitors could materially 
adversely impact both the scale of the 
Group’ s revenues and its profitability.
* Earnings for the year from continuing operations 
before net finance costs, depreciation, amortisation, 
integration and strategic costs, goodwill impairment 
and share-based payment charges. Financial Statements Governance Strategic Report
13
Castleton Technology plc 
Annual Report 2014
Technology
The market for Castleton’ s services is 
in a state of constant innovation and 
change. The Group actively participates 
in a number of industry-wide forums, 
and devotes significant resource to 
the development of new products and 
services, ensuring new technologies can 
be incorporated and integrated with the 
Group’ s core services.
Post-acquisition integration risk  
and risks of an acquisition strategy
The Company may not be able to fully 
achieve its strategic objectives and 
operating efficiencies in an acquisition. 
Inherent uncertainties exist in integrating 
the operations of an acquired entity. 
In addition, the markets and industries 
in which the Company and its potential 
acquisition targets operate, are highly 
competitive. The Company may lose 
existing customers or the customers 
of an acquired entity as a result of its 
acquisition. The Company may also 
lose key personnel, either from the 
acquired entity or from itself, as a 
result of an acquisition. These factors 
could contribute to the Company 
not achieving the expected benefits 
from its acquisitions within desired 
time frames, if at all. Future business 
acquisitions could be material to the 
Company and it may issue additional 
equity to pay for those acquisitions, 
which would dilute current shareholders’ 
ownership interest. Acquisitions could 
also require the Company to use 
substantial cash or other liquid assets 
or to incur debt. In such a case, it could 
become more susceptible to economic 
downturns and competitive pressures.
Financial Instruments
The Group’ s financial instruments 
primarily comprise borrowings and cash 
balances. In addition, various other 
financial instruments such as trade 
receivables and payables arise directly 
from its operations. In order to hedge 
against fluctuating interest rates on 
its borrowings the Group has entered 
into an interest rate swap agreement 
with Barclays Capital. The terms of this 
agreement are that the interest on a 
reducing notional principal is capped 
once the LIBOR rate reaches 6.5%. 
If LIBOR falls below 4.89%, the interest 
rate rises on a one-for-one basis for 
each incremental fall, up to a maximum 
of 6.5%. The notional principal as 
at 31 March 2014 was £10.0 million 
(2013: £10.0 million).
In the current year the Group incurred 
a £0.6 million cash outflow as a result 
of this hedge (2013: £0.6 million), 
and recorded a fair value gain of 
£0.6 million (2013: £0.3 million) in the 
Income Statement. At 31 March 2014 
the consolidated balance sheet 
includes a liability of £0.85 million 
(2013: £1.49 million) for the interest 
rate swap, stated at fair value.
Further details of the Group’ s risks and 
policies regarding financial instruments 
are set out in note 24.
Paul Myhill
Company Secretary
On behalf of the Board 
Dated: 5 September 2014 
Registered Office:  
Newton House 
Cambridge Business Park 
Cowley Road 
Cambridge 
CB4 0WZ  14
Castleton Technology plc 
Annual Report 2014
Board of Directors
Executive Directors Non-executive Directors
Ian Smith
Chief Executive Officer
A highly experienced IT and 
communications industry developer of 
new business, Ian has held senior sales 
positions with Dataworkforce, Cisco 
Systems, Foundry Networks and Cable 
& Wireless.
Most recently, for seven years as CEO 
of Xploite plc, Ian was responsible for 
the buy, build and sell strategy that saw 
26 corporate transactions including two 
substantial disposals and the creation 
and return of c£20 million of cash to the 
company’ s shareholders.
Spencer Dredge
Finance Director
Spencer has more than a decade of 
experience in the technology sector 
having held a number of senior 
divisional and group finance roles for 
quoted UK technology companies. 
Spencer has recently played a pivotal 
role in executing successful M&A 
programmes at Redstone plc, Maxima 
Holdings plc and Redcentric plc.
Spencer’ s most recent role as an 
Associate Consultant at MXC Capital 
has seen him successfully deliver 
a variety of corporate transactions 
for both private and public 
companies. Spencer is a Chartered 
Management Accountant.
David Payne
Non-Executive Chairman
David Payne is Chair of the 
Remuneration Committee and a 
member of the Audit and Nomination 
Committees of the Board of Directors.
David Payne has a varied background 
in the leisure, computer and property 
industries. For 20 years after leaving 
university he worked for Juliana’ s, a 
leisure company that floated on the 
London Stock Exchange in 1983.
He was subsequently recruited, by 
a venture capital fund, to become 
Chairman of Virtuality, a company at the 
forefront of developing virtual reality.
He oversaw the successful flotation 
of this company on the LSE in 1994 
and then left to devote more time 
to the development of a quoted 
property company.
Tony Weaver
Non-Executive Director
T ony has an IT and communications 
services background that started in 
the mid 1980s. T ony founded his first 
IT business in 1988 and is a founder 
of a number of other successful 
IT companies and has a very well 
established background in sales and 
management. T ony has served on a 
number of private and public company 
boards over the last 25 years.
From 2003 to 2010, T ony was the 
Chief Operating Officer of Xploite plc, 
responsible for the management and 
consolidation of the businesses acquired 
and created by the group. Xploite plc 
successfully created and returned 
c£20 million of cash to the company’ s 
shareholders before it was acquired 
in May 2010.
T ony is also a managing partner of 
MXC Capital Ltd, the consulting and 
investment company he set up with Ian 
Smith. MXC invests in and advises a 
number of companies in the technology, 
media and telecommunication sector.
Richard Ramsay
Non-Executive Director
Richard is a highly experienced 
Director with a strong track record in 
delivering growth, project direction and 
maximising profitability over 35 years. 
During this time he spent ten years as 
a director of Hill Samuel before being 
recruited by Barclays De Zoete Wedd, 
where, latterly, he worked closely with 
the Corporate Finance Division’ s CEO 
and management team to achieve  
33% growth worldwide.
He has since held various directorships, 
amongst which was Aberdeen Football 
Club, at which he helped grow profits 
by 30%. More recently, he was a director 
at Intelli Corporate Finance and the 
Shareholder Executive. He is currently 
non executive chairman of Wolsey 
Group Ltd, URICA Ltd, Northcourt Ltd 
and Midas Income and Growth Trust plc. 
Richard is also a non executive director 
of Castle Trust Capital plc and John 
Laing Environmental Assets Group Ltd. Financial Statements Governance Strategic Report
15
Castleton Technology plc 
Annual Report 2014
Advisers
Company Secretary
Paul Myhill
Registered Office
Newton House, 
Cambridge Business Park,  
Cowley Road,  
Cambridge CB4 0WZ
Financial Adviser and Broker
finnCap Limited, 
60 New Broad Street,  
London EC2M 1JJ
Independent Auditors
Baker Tilly UK Audit LLP , 
Portland, 25 High Street,  
Crawley, West Sussex, RH10 1BG
Solicitors
Beachcroft, 
100 Fetter Lane,  
London EC4A 1BN
Registrars
Capita Registrars, 
Northern House,  
Woodsome Park,  
Fenay Bridge, 
Huddersfield,  
West Yorkshire, HD8 0GA
Principal Bankers
Barclays Bank plc, 
54 Lombard Street,  
London EC3V 9EX
Company Number
3336134
Further details can be found  
on the Castleton Technology  
website at the following address: 
www.castletonplc.com 16
Castleton Technology plc 
Annual Report 2014
As an AIM listed company Castleton T echnology plc (“Castleton”) is not required to comply with the principles and provisions 
of the 2012 UK Corporate Governance Code. During the year, the Quoted Companies Alliance published its Corporate 
Governance Code for small and mid-sized quoted companies. The Directors have decided to adopt this and have sought 
to meet its recommendations in so far as it considers them appropriate for a company of Castleton’ s size and nature.
The Board of Directors
At the financial year-end the Board comprised the non-executive Chairman (David Payne), the Chief Executive Officer 
(Ian Smith), the Finance Director (Spencer Dredge) and two non-executive Directors (Richard Ramsay and T ony Weaver).
Following the demerger of Redcentric on 8 April 2013, Richard Ramsay stood down as non-executive Chairman and was 
replaced by David Payne; Richard remains a non-executive Director. T ony Weaver became a non-executive Director and was 
replaced as Chief Executive Officer by Ian Smith. On 28 June 2013, following the successful completion of the demerger, 
Peter Hallett, Chief Financial Officer of the Company, gave notice of his resignation in order to pursue new professional 
challenges. Peter has been with the business for over four years and has successfully completed the restructuring of 
Castleton and the demerger and flotation of Redcentric plc. Spencer Dredge was appointed interim Finance Director on 
5 February 2014. 
The business and management of the Company and its subsidiaries are the collective responsibility of the Board. 
At each meeting, the Board considers and reviews the trading performance of the Group. The Board has a formal written 
schedule of matters reserved for its review and approval. These include the approval of the annual budget, major capital 
expenditure, investment proposals, the interim and annual results, and a review of the overall system of internal control and 
risk management.
There are three standing Board Committees: Audit, Nominations and Remuneration. Each of these Committees acts within 
defined terms of reference. Additional information is set out later in this report and also in the Directors’ Remuneration Report 
in respect of the Remuneration Committee.
Authority for the execution of the approved policies, business plan and daily running of the business is delegated to the 
executive Directors. During the year, the Board met formally on 12 occasions with apologies received from one Director for 
one meeting.
Richard Ramsay is the Senior Independent non-executive Director and served throughout the year in this position.
The Company’ s Articles of Association require one-third of the Directors to stand for re-election each year at the Annual 
General Meeting and that each Director should seek re-election every three years. In addition, Directors appointed by the 
Board during the year must seek re-appointment at the next Annual General Meeting. Accordingly Spencer Dredge and 
T ony Weaver will retire and offer themselves for re-election at the forthcoming Annual General Meeting.
All Directors have access to the advice and services of the Company Secretary who is responsible for ensuring that Board 
procedures and applicable rules and regulations are observed. The Board has a procedure whereby any Director may seek, 
through the office of the Company Secretary, independent professional advice, at the Company’ s expense, in furtherance of 
their duties.
Formal agendas and reports are provided to the Board on a timely basis for Board and Committee meetings and the Chairman 
ensures that all Directors are properly briefed on issues to be discussed at Board meetings. Directors are able to obtain further 
advice or seek clarity on issues raised at the meetings from within the Company or from external sources.
All Directors are subject to appraisal by the Board. The non-executive Directors are responsible for the evaluation 
of the Chairman.
Nominations Committee
The Nominations Committee consists of David Payne (Chairman) and Richard Ramsay.
For nominations, the Committee meets as and when necessary to consider the appointment of new executive  
and non-executive Directors.
A process is in place for the appointment of new Directors involving the use of external consultants, where appropriate, 
followed by meetings with both the Committee and subsequently with the Board as a whole, together with the Company 
Secretary. This ensures that the selection process is both formal and objective. The Committee has formal terms of reference 
(available on request from the Company Secretary) and meets at least once a year to review succession planning at both Board 
and senior management level across the Group.
During the year, the Committee met formally on two occasions and there were no absences from the meetings.
Corporate Governance Statement Financial Statements Governance Strategic Report
17
Castleton Technology plc 
Annual Report 2014
Remuneration Committee
The Remuneration Committee consists of David Payne (Chairman) and Richard Ramsay.
Details of the Committee and its policies are set out in the Directors’ Remuneration Report on pages 19 to 20. 
The Committee has formal terms of reference (available on request from the Company Secretary).
During the year, the Committee met formally on four occasions. There were no absences from the formal meetings.
Audit Committee
The Audit Committee consists of Richard Ramsay (Chairman) and David Payne.
The Committee has formal terms of reference (available on request from the Company Secretary). These include the 
recommendation, appointment, re-appointment and removal of the external auditors, the review of the scope and results 
of the interim review and external annual audit by the auditors, their cost effectiveness, independence and objectivity. 
The Committee also reviews the nature and extent of any non-audit services provided by the external auditors. In addition, 
the Committee reviews the effectiveness of internal controls, considers the need for an internal audit function and considers 
any major accounting issues and reports on such matters to the Board. The Committee reviews the integrity of the financial 
statements and formal announcements. A whistle-blowing arrangement exists whereby matters can be confidentially reported 
to the Committee. The executive Directors are not members of the Committee but attend the meetings by invitation, 
as necessary, to facilitate its business.
The Finance Director monitors the level and nature of non-audit services and specific assignments are flagged for approval by 
the Audit Committee as appropriate. The Audit Committee reviews non-audit fees and considers implications for the objectivity 
and independence of the relationship with the external auditors.
The Board is satisfied that the Chairman of the Audit Committee has recent and relevant financial experience.
The Committee met on two occasions during the year and there were no absences from the meetings.
Internal Control
The Board has overall responsibility for the Group’ s system of internal control and for reviewing its effectiveness. 
The implementation and maintenance of the risk management and internal control systems are the responsibility of the 
executive Directors and senior management. The internal control system is designed to manage risk rather than eliminate it 
and can therefore only provide reasonable and not absolute assurance against material misstatement or loss. In accordance 
with the guidance set out in the Turnbull Guidance on Internal Control, the Group has an on-going process for identifying, 
evaluating and managing the significant risks faced by it. 
The Group is committed to maintaining high standards of business conduct and operates under an established internal 
control framework covering financial, operational and compliance controls. This is achieved through an organisational structure 
that has clear reporting lines and delegated authorities. The reporting lines and delegated authorities are clearly defined. 
Management monitors the risk and performance of the Group. In addition, the Group maintains written processes to control 
expenditure, authorisation limits, purchase ordering, sales order intake, project management, inventories and assets to the 
extent applicable given the changes in the Group’ s activities during the year.
The Board receives monthly financial information which includes key performance and risk indicators and the Chief Executive 
reports on significant changes in the business and the external marketplace to the extent they represent significant risk. There is 
an established budgetary system with an annual budget approved by the Board. The Board reviews the results monthly against 
budget, forecasts and prior year actual figures together with other business measures.
The principal treasury related risks are documented and approved by the Board. Details of derivatives and financial instruments 
are set out in notes 23 and 24 to the financial statements.
Relations with Shareholders and Investors
Copies of the Annual Report and Accounts are issued to all shareholders and copies are available on the Group’ s website 
www.castletonplc.com. The Half Year Report is also available on the Group’ s website. The Group makes full use of its website 
to provide information to shareholders and other interested parties. The Company Secretary also deals with a number of 
written or e-mailed enquiries throughout the year.
Shareholders are given the opportunity to raise questions at the Annual General Meeting and the Directors are available both 
prior to and after the meeting for further discussion with shareholders. 18
Castleton Technology plc 
Annual Report 2014
During the year, the Chief Executive Officer and the Finance Director met with institutional investors after the announcement of 
the interim and year-end results. Additional meetings were arranged during the year by the Group’ s brokers, finnCap Limited. 
Feedback arising from these meetings was communicated to the Board and the Company Secretary also reported to the Board 
on feedback from shareholders.
Richard Ramsay, as Senior Independent non-executive Director, is available to shareholders if they wish to raise any matters 
that contact through the normal channels of non-executive Chairman, Chief Executive Officer, Finance Director or Company 
Secretary has failed to resolve or for which such contact is inappropriate.
Richard Ramsay
Chairman, Audit Committee
5 September 2014
Corporate Governance Statement continued Financial Statements Governance Strategic Report
19
Castleton Technology plc 
Annual Report 2014
Remuneration Committee
The Remuneration Committee comprises David Payne (Chairman) and Richard Ramsay. 
The Committee makes recommendations to the Board, within agreed terms of reference, on the remuneration and other 
benefits, including bonuses and share options, of the executive Directors.
In considering the remuneration for the year, the Committee consulted with the executive Directors about its proposals. 
The Board sets the fees payable to the non-executive Directors.
Remuneration Policy
The Remuneration Committee is aware that the remuneration package should be sufficiently competitive to attract, retain 
and motivate individuals capable of achieving the Group’ s objectives and thereby enhancing shareholder value.
Basic Salary and Benefits
Basic salaries are reviewed on a discretionary basis.
The benefits provided for each executive Director include:
i. Life assurance cover of four times salary;
ii. Private medical insurance for themselves, their spouse and their children; and
iii. The provision of a company car or car allowance including petrol for private mileage.
Performance Related Bonus
The Remuneration Committee determines the criteria for the award of performance bonuses for the executive Directors  
in advance of each year. The bonuses are non-pensionable. Non-executive Directors do not receive a bonus.
Fees
The Board, within the limits stipulated by the Articles of Association and following recommendation by the executive Directors, 
determines non-executive Directors’ fees. The fees were £25,000 for non-executive Directors, and £30,000 for the Chairman, 
including, in both cases a fee of £5,000 for chairing a Board committee. As part of the Board’ s on-going cost review, the Board 
agreed to half pay for the period from 1 February 2014 to 30 June 2014.
Service Contracts
The Company’ s policy is for all executive Directors to have service contracts with provision for termination of no more than 
12 months’ notice.
Non-executive Directors have letters of appointment. Appointments can be terminated by the Company giving six months’ 
notice or the individual giving one months’ notice. The remuneration of the non-executive Directors takes the form solely  
of fees which are not pensionable.
The details of the executive and non-executive Directors’ service contracts are summarised below:
Date of contract Notice period (months)
Executive Directors 
Ian Smith 8 September 2010 1
Spencer Dredge 5 February 2014 6
Non-executive Directors 
David Payne 23 July 2001 6
Richard Ramsay 18 October 2010 6
T ony Weaver 8 September 2010 1
The service contracts continue until notice on either side is given.
Spencer Dredge and T ony Weaver retire in line with the terms of the articles of the Company, and being eligible, offer 
themselves for re-election at the forthcoming Annual General Meeting. 
Directors’ Remuneration Report 20
Castleton Technology plc 
Annual Report 2014
Directors’ Remuneration
The remuneration of the Directors was as follows:
Basic salary
and fees 
£000
Bonus
£000
Benefits
£000
2014
Total 
£000
2013
T otal
£000
Executive 
Peter Hallett 56 – 3 59 355
Ian Smith 187 – – 187 143
Spencer Dredge 7 – – 7 –
Non-executive 
T ony Weaver – – – – 204
David Payne 28 – – 28 36
Richard Ramsay 28 – – 28 46
306 – 3 309 784
None of the Directors made any gains on exercise of share options in 2014 or 2013. Director’ s emoluments payable to 
Ian Smith and T ony Weaver were paid to MXC Capital Limited. 
Share Options
Details of share options in the Company held by the Directors during the year are as follows. 
Exercise
price
Pence
At 1 April
2013
Number
Granted 
during the year 
Number
At 31 March
 2014
Number
Peter Hallett (a) 0.8 6,875,000 – 6,875,000
Peter Hallett (b) 0.8 8,464,944 – 8,464,944
Ian Smith (c) 0.8 8,464,944 – 8,464,944
T ony Weaver (c) 0.8 8,464,944 – 8,464,944
See note 26 Share Based Payments for details of the movements in the exercise price of share options held by the directors. 
The options were granted on 9 September 2010 and are exercisable as follows:
(a) 9 March 2011 as to one-third, 9 September 2011 as to one-third and 9 September 2012 as to one-third;
(b) 4,808,088 on the earlier of the 9 September 2013 or the achievement of the performance conditions; 3,656,856 
on the achievement of the performance conditions;
(c) 2,821,648 on the earlier of the 9 September 2013 or the achievement of the performance conditions; 5,643,296 
on the achievement of the performance conditions.
Options (a), (b) and (c) were granted under the Company’ s Unapproved Share Option Scheme.
The performance conditions are linked to the occurrence of a qualifying transaction that will deliver a predefined return 
to shareholders.
Share Price
The market price of the Company’ s shares on 31 March 2014 was 0.88 pence per share. The highest and lowest market prices 
during the year were 2.25 pence and 0.47 pence respectively. 
David Payne
Chairman, Remuneration Committee
On behalf of the Board 
5 September 2014
Directors’ Remuneration Report continued Financial Statements Governance Strategic Report
21
Castleton Technology plc 
Annual Report 2014
The Directors present their report together with the audited financial statements for the year ended 31 March 2014.
Principal Activity
The principal activity of the Group during the year was that of an infrastructure solutions and software consultancy business, 
until the disposal of those operations. Subsequent to the disposal of Comunica Holdings Limited in November 2013 and QAD 
in March 2014 the Group has been actively seeking acquisitions in the technology sector culminating in the acquisition of 
Montal Holdings Limited (“Montal”) in June 2014. Montal is a specialist in providing outsourced IT services to the public sector. 
The Company is an investment holding company.
Review of the Year and Future Developments
The review of the year and the Directors’ strategy and objectives for the future are set out in the Strategic report on pages 12 and 13.
Dividends
During the year the Company paid a dividend in specie, settled by the transfer of shares in Redcentric Holdings Limited having 
a book value of £0.5 million to Redcentric plc which in turn issued shares to the existing shareholders of Castleton T echnology 
plc. For the purposes of the Group Income Statement this transaction is recorded at the fair value of the shares issued by 
Redcentric plc, measured as the share price on the first day of admission to trading on AIM which resulted in a deduction from 
Group reserves of £53.3 million.
In the Company accounts, this transaction was recorded as a dividend of £0.5 million, being the cost of the shares distributed. 
The Board was able to recommend this dividend after the reorganisation undertaken at the beginning of the financial year 
which resulted in sufficient distributable reserves being available to the Company to enable it to pay a dividend.
Post Balance Sheet Events
On 23 June Castleton announced the acquisition of the entire issued share capital of Montal for a total consideration 
of £3.83 million payable £3.04 million in cash and £0.79 million in loan notes. 
Montal specialises in providing outsourced IT services to the public sector and provides a full suite of outsourced services 
including support, hosting, business solutions and consultancy.
On 29 August 2014 the Group disposed of the trade and certain assets of ABS, the ferry ticketing, ERP and payroll software 
and consultancy business operated by Maxima Information Group Limited, for a total cash consideration of £0.75 million, 
which equates to the carrying value of the ABS assets in the Group financial statements. The consideration will be settled 
£0.30 million at completion with a further £0.30 million on 30 September 2014 and the remaining £0.15 million due on 
31 March 2015.
Directors
As at 31 March 2014 the Directors and their beneficial interests and those of their families in the share capital of the Company 
were as follows:
31 March 2014
Number of ordinary 
shares of 0.1p
31 March 2013
Number of ordinary  
shares of 0.1p
Ian Smith and T ony Weaver (note a) 160,866,080 85,616,084
Peter Hallett – 2,625,000
David Payne 1,006,250 1,006,250
Richard Ramsay 435,150 435,150
Spencer Dredge 788,909 –
Note (a): 154,616,080 of these shares are in the name of MXC Capital Limited, a company in which Ian Smith and T ony Weaver 
have a controlling interest. The remaining 6,250,000 shares are owned by a SIPP for the beneficial interest of Ian Smith.
Spencer Dredge and T ony Weaver retire in accordance with the terms of the articles of the Company and, being eligible, will 
offer themselves for re-election at the forthcoming Annual General Meeting.
Details of the Directors’ contracts, remuneration and share options granted are set out in the Directors’ Remuneration Report 
on pages 19 and 20.
As permitted by the Articles of Association, the Directors have the benefit of an indemnity which is a qualifying third party 
indemnity provision as defined by Section 234 of the Companies Act 2006. The indemnity was in force throughout the last 
financial year and is currently in force. The Company also purchased and maintained throughout the financial year Directors’ 
and Officers’ liability insurance in respect of itself and its Directors.
Directors’ Report 22
Castleton Technology plc 
Annual Report 2014
Staff Policy
The Group’ s employment policies are designed to ensure that they meet the statutory , social and market practices in the UK where 
the Group operates. The Group systematically provides employees with information on matters of concern to them, consulting 
them or their representatives regularly , so that their views can be taken into account when making decisions that are likely to affect 
their interests. Employee involvement in the Group is encouraged, as achieving a common awareness on the part of all employees 
of the financial and economic factors affecting the Group plays a major role in maintaining its relationship with its staff.
The Group is committed to employment policies, which follow best practice based on equal opportunities for all employees, 
irrespective of sex, race, colour, disability or marital status. The Group gives full and fair consideration to applications for 
employment for disabled persons, having regard to their particular aptitudes and abilities. Appropriate arrangements are made 
for the continued employment and training, career development and promotion of disabled persons employed by the Group. 
If members of staff become disabled the Group continues employment, either in the same or an alternative position, with 
appropriate retraining being given if necessary.
Substantial Shareholders
As at 30 June 2014 the Company had been notified of the following interests in 3% or more of its issued ordinary, voting 
share capital:
Number % 
MXC Capital Limited 154,616,080 24.79
Kestrel Partners LLP 78,465,932 12.58
Hargreaves Lansdown Asset Management 49,519,873 7.94
Barclays Wealth Management (UK) 40,174,183 6.44
Halifax Share Dealing 38,926,205 6.24
TD Direct Investing 37,480,104 6.01
Stephens Group Inc 32,465,000 5.14
Zaphiriou Zarifi Overseas Equities 18,825,000 3.02
Annual General Meeting
The Annual General Meeting will be held at the offices of finnCap Limited, 60 New Broad Street, London on 30 September 2014 
at 12.00 noon to conduct all mandatory business.
During the year Baker Tilly UK Audit LLP was appointed as auditor to replace PricewaterhouseCoopers LLP .
A resolution is to be proposed at the forthcoming AGM for the re-appointment of Baker Tilly UK Audit LLP as auditor 
of the Company, at a rate of remuneration to be determined by the Audit Committee.
Disclosure of Information to Auditors
The Directors who were members of the Board at the time of approving the Directors’ report are listed on page 14. 
Having made enquiries of fellow Directors, each of these Directors confirms that:
•	 T o the best of each Director’ s knowledge and belief, there is no information relevant to the preparation of their report 
of which the Group’ s auditors are unaware; and
•	 Each Director has taken all the steps a Director might reasonably be expected to have taken to be aware of relevant audit 
information and to establish that the Group’ s auditors are aware of that information.
Paul Myhill
Company Secretary
On behalf of the Board 
Dated: 5 September 2014 
Registered Office:  
Newton House 
Cambridge Business Park 
Cowley Road 
Cambridge 
CB4 0WZ
Directors’ Report continued Financial Statements Governance Strategic Report
23
Castleton Technology plc 
Annual Report 2014
The Directors are responsible for preparing the Strategic report and the Directors’ Report and the financial statements in 
accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and Company financial statements for each financial year. The Directors 
are required by the AIM Rules of the London Stock Exchange to prepare the Group financial statements in accordance with 
International Financial Reporting Standards (IFRSs) as adopted by the European Union, and have elected under company law 
to prepare the parent company financial statements in accordance with United Kingdom Generally Accepted Accounting 
Practice (United Kingdom Accounting Standards and applicable law). 
The Group financial statements are required by law and IFRS adopted by the EU to present fairly the financial position and 
performance of the Group; the Companies Act 2006 provides in relation to such financial statements that references in the 
relevant part of that Act to financial statements giving a true and fair view are references to their achieving a fair presentation.
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 the Company and of the profit or loss of the Group for that period.
In preparing each of the Group and Company financial statements, the Directors are required to:
•	 select suitable accounting policies and then apply them consistently;
•	 make judgements and accounting estimates that are reasonable and prudent;
•	 state whether IFRSs as adopted by the European Union and applicable UK Accounting Standards have been 
followed, subject to any material departures disclosed and explained in the Group and parent company financial 
statements respectively;
•	 prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group 
and the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’ s 
and the Company’ s transactions and disclose with reasonable accuracy at any time the financial position of the Group and 
the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are 
also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the 
prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the Company’ s website. Legislation in the UK governing  
the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
By order of the Board
Paul Myhill
Company Secretary
Dated: 5 September 2014 
Registered Office:  
Newton House 
Cambridge Business Park 
Cowley Road 
Cambridge 
CB4 0WZ
 
Statement of Directors’ Responsibilities 24
Castleton Technology plc 
Annual Report 2014
We have audited the Group and parent company financial statements (“the financial statements”) on pages 25 to 64. 
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 European Union. The financial reporting framework 
that has been applied in the preparation of the parent company financial statements is applicable law and United Kingdom 
Accounting Standards (United Kingdom Generally Accepted Accounting Practice). 
This report is made solely to the Company’ s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies 
Act 2006. Our audit work has been undertaken so that we might state to the Company’ s members those matters we are 
required to state to them in an auditor’ s report and for no other purpose. T o 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 more fully explained in the Directors’ Responsibilities Statement set out on page 23, the Directors are responsible for the 
preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit 
and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing 
(UK and Ireland). Those standards require us to comply with the Auditing Practices Board’ s (APB’ s) Ethical Standards for Auditors.
Scope of the Audit of the Financial Statements
A description of the scope of an audit of financial statements is provided on the Financial Reporting Council’ s website at 
http://www.frc.org.uk/auditscopeukprivate.
Opinion on Financial Statements
In our opinion:
•	 the financial statements give a true and fair view of the state of the Group’ s and of the parent company’ s affairs as at 
31 March 2014 and of the Group’ s profit for the year then ended;
•	 the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union; 
•	 the parent company financial statements have been properly prepared in accordance with United Kingdom 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 Strategic Report and the Directors’ Report for the financial year for which the 
financial statements are prepared is consistent with the financial statements.
Matters on Which We are Required to Report by Exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, 
in our opinion:
•	 adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been 
received from branches not visited by us; or
•	 the parent company financial statements are not in agreement with the accounting records and returns; or
•	 certain disclosures of Directors’ remuneration specified by law are not made; or
•	 we have not received all the information and explanations we require for our audit. 
Geoff Wightwick BA FCA (Senior Statutory Auditor)
For and on behalf of Baker Tilly UK Audit LLP , Statutory Auditor 
Chartered Accountants 
Portland 
25 High Street 
Crawley 
West Sussex 
RH10 1BG 
Date: 5 September 2014
Independent Auditor’s Report to the Members of Castleton T echnology plc Financial Statements Governance Strategic Report
25
Castleton Technology plc 
Annual Report 2014
Consolidated Income Statement
for the year ended 31 March 2014
Note
Year 
ended  
31 March  
2014 
£000
Restated 
31 March 
2013 
£000
Continuing operations
Administrative expenses (1,099) (980)
Adjusted EBITDA* (1,040) (592)
Depreciation – (66)
Integration and strategic costs included within administrative expenses 5 – (177)
Share-based payments charges (59) (145)
Operating loss (1,099) (980)
Finance income 7 633 341
Finance costs 7 (785) (1,125)
Loss on ordinary activities before taxation (1,251) (1,764)
Income tax 9 – –
Loss for the year from continuing operations attributable to owners  
of the parent company (1,251) (1,764)
Profit/(loss) for the year from discontinued operations attributable  
to owners of the parent company 6 27,640 (2,199)
Profit/(loss) for the year attributable to owners of the parent company 26,389 (3,963)
Earnings/(loss) per share 
Basic and diluted loss per share from continuing operations 10 (0.20p) (0.38p)
Basic and diluted profit/(loss) per share from discontinued operations 10 4.44p (0.48p)
4.24p (0.86p)
*  T otal result for the year from continuing operations before net finance costs, tax, depreciation, amortisation, integration and strategic costs, goodwill impairment and  
share-based payment charges 26
Castleton Technology plc 
Annual Report 2014
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2014
Year 
ended  
31 March  
2014 
£000
Restated 
31 March 
2013 
£000
Profit/(loss) for the period 26,389 (3,963)
Gain on revaluation of Cambridge MAN – 940
Currency translation differences – (3)
T otal comprehensive income attributable to the owners of the parent company 26,389 (3,026)
From continuing operations (1,251) (1,764)
From discontinued operations 27,640 (1,262)
26,389 (3,026)
The notes on pages 30 – 56 are an integral part of these financial statements.  Financial Statements Governance Strategic Report
27
Castleton Technology plc 
Annual Report 2014
Consolidated Balance Sheet
as at 31 March 2014 
Registered number 3336134
Note
31 March 
2014 
£000
31 March 
2013 
£000
Assets
Non-current assets
Intangible assets 11 – 11,743
Property, plant and equipment 12 – 272
Deferred taxation assets 9 – 1,434
Other non-current assets 13 – 355
– 13,804
Current assets
Inventories 14 – 431
Trade and other receivables 15 2,618 11,241
Income tax receivable – 170
Assets held for sale/distribution 16 827 54,095
Cash and cash equivalents 17 2,785 122
6,230 66,059
T otal assets 6,230 79,863
Equity and liabilities
Equity attributable to owners of the parent
Share capital 25 674 599
Share premium account 5,925 –
Other reserves  7,966 13,117
(Accumulated loss)/retained earnings (11,704) 9,964
T otal equity attributable to the owners of the parent 2,861 23,680
Liabilities
Current liabilities
Derivative financial instruments 23 569 595
Trade and other payables 18 2,358 15,318
Borrowings 21 – 2,968
Provisions 20 – 292
Liabilities held for sale/distribution 16 157 31,400
3,084 50,573
Non-current liabilities
Derivative financial instruments 23 285 892
Borrowings 21 – 2,434
Provisions 20 – 1,067
Deferred taxation liabilities 9 – 1,217
285 5,610
T otal liabilities 3,369 56,183
T otal equity and liabilities 6,230 79,863
The notes on pages 30 – 56 are an integral part of these financial statements. The financial statements on pages 25 to 56 were 
approved by the Board and authorised for issue on 5 September 2014 and are signed on its behalf by:
Spencer Dredge Ian Smith
Director   Director 28
Castleton Technology plc 
Annual Report 2014
Consolidated Statement of Changes in Equity
for the year ended 31 March 2014
Attributable to owners of the parent
Called up  
share  
capital 
£000
Share  
premium  
account 
£000
Merger  
reserve (a) 
£000
Capital  
redemption  
reserve (b) 
£000
Translation  
reserve (c) 
£000
Revaluation  
reserve 
£000
Retained  
earnings/
(Accumulated  
loss) 
£000
T otal  
equity 
£000
At 1 April 2012 17,534 31,845 216 5,683 (641) 4,855 (44,709) 14,783
(Loss) for the period – – – – – – (3,963) (3,963)
Other comprehensive income – – – – (3) 940 – 937
Transactions with owners:
Share-based payments – – – – – – 289 289
Merger relief – – 7,750 – – – – 7,750
Capital re-organisation (18,272) (34,392) – (5,683) – – 58,347 –
Share issue less costs 1,337 2,547 – – – – – 3,884
At 1 April 2013 599  – 7,966 – (644) 5,795 9,964 23,680
Profit for the period – – – – – – 26,389 26,389
Transfer (c) – – – – 644 – (644) –
Revaluation reserve realised 
on demerger – – – – – (5,795) 5,795 –
Transactions with owners:
Share based payments – – – – – – 117 117
Share issue 75 5,925 – – – – – 6,000
Dividend in specie (d) – – – – – – (53,325) (53,325)
At 31 March 2014 674 5,925 7,966 – – – (11,704) 2,861
(a) Merger reserve
The merger reserve arose from the acquisition of Redstone Communications Limited (£216,000) and Maxima Holdings Limited 
(formerly Maxima Holdings plc) (£7,750,000) and represents the difference between the value of the shares acquired (nominal 
value plus related share premium) and the nominal value of the shares issued.
(b) Capital redemption reserve 
The capital redemption reserve arose on the elimination of deferred shares and represents the nominal value of the deferred 
shares. As part of the reorganisation of capital effected on 27 March 2013 this was transferred to distributable (retained) 
earnings.
(c) Translation reserve
The translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign 
subsidiaries. At the year-end the Group had no foreign subsidiaries and the balance of the reserve has been transferred to 
retained earnings/(accumulated loss).
(d) Gain on demerger and Dividend in specie
As more fully described in note 6 the Board decided that a demerger of the network-based managed services businesses 
(“Demerger”) was in the best interests of the Company and would deliver additional value to shareholders over time. 
The demerger was effected by the declaration of a special dividend in Castleton, equal to the fair value of Castleton’ s interests 
in the managed services business. The dividend was satisfied, in specie, by the transfer of the shares in Redcentric Holdings 
Limited (“RCH”) to Redcentric plc. RCH was a new wholly owned subsidiary of Castleton, formed as a vehicle to hold the 
interests of the consolidated managed services business (prior to the demerger).
The Directors have attributed a fair value of £53.3 million to the dividend equivalent to the market value of the shares issued 
by Redcentric, as permitted under IFRIC 17 “Distribution of non-cash assets to owners”. Market value was determined as the 
mid-market price on the first day of admission of the Redcentric plc shares to AIM on 8 April 2013.
The cost to the Company of satisfying the dividend liability was the transfer of the net assets held for demerger in RCH at 
the demerger date. The net assets held for demerger amounted to £23.3 million. The resulting gain of £30.0 million has 
been recorded in the consolidated statement of comprehensive income as required by IFRIC 17. Financial Statements Governance Strategic Report
29
Castleton Technology plc 
Annual Report 2014
Consolidated Cash Flow Statement
for the year ended 31 March 2014
Note
31 March 
2014 
£000
Restated 
31 March 
2013 
£000
Cash flows from continuing operating activities
Cash (used in)/generated from operations 27 (2,337) 366
Cash absorbed by integration and strategic costs – (178)
Finance charges paid (785) (922)
Net cash flows (used in) continuing operating activities (3,122) (734)
Net cash (used in) discontinued operating activities (1,837)
Cash flows from investing activities
Proceeds from sale of businesses, net of cash sold 7,045 –
Acquisition of subsidiaries, net of cash acquired – (4,936)
Net cash flows generated from/(used in) continuing investing activities 7,045 (4,936)
Net cash flows (used in) discontinued investing activities (21) (2,408)
Cash flows from financing activities
Proceeds from issuance of shares 6,000 3,000
Costs of share issue – (154)
(Repayment)/increase in borrowings (3,434) 9,445
Net cash flows generated from continuing financing activities 2,566 12,291
Net cash flows generated from discontinued financing activities – –
Net increase in cash and cash equivalents from continuing activities 6,489 6,621
Net (decrease) in cash and cash equivalents from discontinued activities (1,858) (2,826)
Cash, cash equivalents and bank overdrafts at 1 April (1,846) (5,641)
Cash, cash equivalents and bank overdrafts at 31 March 2,785 (1,846)
Comprising:
Bank overdrafts 21 – (1,968)
Cash and cash equivalents 18 2,785 122
2,785 (1,846)
The notes on pages 30 – 56 are an integral part of these financial statements. 30
Castleton Technology plc 
Annual Report 2014
Notes to the Consolidated Financial Statements
year ended 31 March 2014
1 Accounting Policies – Group
Castleton T echnology plc (“Castleton”) is a public limited company incorporated and domiciled in England and Wales, 
whose shares are publicly traded on the AIM division of the London Stock Exchange. The principal accounting policies, which 
have been applied consistently in the preparation of these consolidated financial statements throughout the year and by all 
subsidiary companies, are set out below.
1.1 Basis of preparation
The consolidated financial statements of Castleton have been prepared on the going concern basis and in accordance with 
EU adopted International Financial Reporting Standards (IFRS), IFRIC interpretations and the Companies Act 2006 applicable 
to companies reporting under IFRS. The consolidated financial statements have been prepared under the historical cost 
convention, as modified by the revaluation of financial assets and financial liabilities (including derivative financial instruments) 
at fair value through profit or loss.
The Directors are required to be satisfied that the Group has adequate resources to continue in business for the foreseeable 
future. The validity of this assumption depends on the ability of the Group to meet its cash flow forecasts and on the continuing 
support of its bankers by providing adequate overdraft facilities and of its debt holders and shareholders. Following the 
disposal of Comunica Holdings Limited (“Comunica”) on 21 November 2013 for an initial cash consideration of £7.65 million, 
all bank debt was repaid, a condition of securing bank consent to the disposal, required under the terms of the bank facility. 
Disposal proceeds of £1.1 million were required to be transferred to an escrow account as collateral against the liabilities arising 
from the interest swap derivative, which remains with the Group.
The Company is obligated to service the derivative until its maturity in September 2015. The gross liability under the derivative 
stands at approximately £0.9 million, and the current annual cost is approximately £0.6 million.
Following a review in December 2013, the Directors decided to cancel the bank facility, in recognition of commitment fee 
savings of £0.1 million per annum,and the waiver by the bank of the cancellation fee of £0.1 million, and the now inappropriate 
conditionality of any future utilisation.
The net cash position of the Group immediately following the disposal of Comunica amounted to approximately £3.0 million 
net of transaction expenses, including the restricted collateral account, and excluding deferred consideration and other 
receivables of £2.1 million, expected to be received within twelve months of disposal.
On 23 June 2014 Castleton announced the acquisition of the entire issued share capital of Montal Holdings Limited (“Montal”) 
for a total consideration of £3.83 million payable £3.04 million in cash and £0.79 million in loan notes. On 16 June 2014 the 
Group secured a £0.5 million short-term facility from its bankers to assist with the integration of the acquisition, should it be 
required. This facility will remain in place until the sooner of 30 November 2014 and the receipt of the deferred consideration 
for the sale of Comunica. 
The Directors have prepared detailed projections for the period to September 2015, based on the above facts and their 
knowledge of the Group’ s existing business. Whilst the Board believes that the Group as currently constituted will generate 
sufficient cash to enable it to pay its debts as they fall due, they are also confident of being able to raise additional financing 
should it be necessary to enable the Group to meet its strategic aims. In connection with this, MXC Capital Limited, a major 
shareholder, has undertaken to defer settlement of certain monies due to it and to provide additional funding should either be 
necessary. Based on this, the Directors consider that the adoption of the going concern basis is appropriate.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also 
requires management to exercise its judgement in the process of applying the Group’ s accounting policies. The areas involving 
a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated 
financial statements are disclosed in Section 1.27 in the accounting policies.
Cash flows and operations that relate to a major component of the business or geographical region that has been disposed 
of or is classified as held for sale or distribution are shown separately from continuing operations. Comparative amounts have 
been restated.
New standards adopted in the year are discussed in Section 1.26.
1.2 Basis of consolidation
Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the financial 
and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and 
effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group 
controls another entity. The Group also assesses existence of control where it does not have more than 50% of the voting 
power but is able to govern the financial and operating policies by virtue of de-facto control. De-facto control may arise in 
circumstances where the size of the Group’ s voting rights relative to the size and dispersion of holdings of other shareholders 
give the Group the power to govern the financial and operating policies. Financial Statements Governance Strategic Report
31
Castleton Technology plc 
Annual Report 2014
1 Accounting Policies – Group continued
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from 
the date that control ceases.
The Group applies the acquisition method to account for business combinations. The consideration transferred for the 
acquisition of a subsidiary is the total of the fair values of the assets transferred, the liabilities incurred to the former owners 
of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset 
or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent 
liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group 
recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the  
non-controlling interest’ s proportionate share of the recognised amounts of the acquiree’ s identifiable net assets.
Acquisition-related costs are expensed as incurred.
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-
controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair 
value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.
Inter-company transactions, balances, income and expenses on transactions between Group companies are eliminated. 
Profits and losses resulting from intercompany transactions that are recognised in assets are also eliminated. Accounting policies 
of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
1.3 Intangible assets
Goodwill
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses (note 11). Goodwill already 
carried in the balance sheet at 1 April 2004 is not amortised after that date.
The carrying amount of goodwill allocated to a cash generating unit is taken into account when determining the gain or loss 
on disposal of the unit, or of an operation within it. Goodwill disposed of in this circumstance is measured on the basis of the 
relative values of the operation disposed of and the portion of the cash generating unit retained.
Other intangible assets
Other intangible assets are carried at cost less accumulated amortisation and impairment losses (Note 1.5).
Other intangible assets acquired separately from a business are carried initially at cost. An intangible asset acquired as part of a 
business combination is recognised outside goodwill if the asset is separable or arises from contractual or other legal rights and 
its fair value can be measured reliably.
Costs that are directly associated with development of identifiable and unique software products generated for use by 
the Group, and that will probably generate economic benefits exceeding costs beyond one year, are recognised as 
intangible assets. These represent the direct employment costs of software developers’ time spent on relevant projects. 
Computer software development costs recognised as assets are amortised over their estimated useful lives being three years.
Software and software licences are classified as intangible assets and include computer software that is not integral to a related 
item of hardware.
Impairment and amortisation charges are included within the administrative expenses line in the income statement.
1.4 Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any impairment in value (Note 1.5). 
The cost includes the original price of the asset and the cost attributable to bringing the asset to its current working condition 
for its intended use. 
Depreciation, down to residual value, is calculated on a straight-line basis over the estimated useful life of the asset which 
is reviewed on an annual basis. 
Leasehold improvements  5 years or over lease term if shorter
Network infrastructure and equipment  1–20 years
Equipment, fixtures and fittings  2–5 years 32
Castleton Technology plc 
Annual Report 2014
Notes to the Consolidated Financial Statements continued
year ended 31 March 2014
1 Accounting Policies – Group continued
An item of property, plant and equipment is de-recognised upon disposal or when no future economic benefits are expected 
to arise from the continued use of the asset. Any gain or loss arising on de-recognition of the asset (calculated as the difference 
between the net disposal proceeds and the carrying amount of the item) is included in the income statement in the year the 
item is de-recognised.
1.5 Impairment of assets
Goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying 
value may be impaired. As at the acquisition date, any goodwill acquired is allocated to each of the cash generating units 
expected to benefit from the business combination’ s synergies. Impairment is determined by assessing the recoverable amount 
of the cash generating unit to which the goodwill relates. When the recoverable amount of the cash generating unit is less than 
the carrying amount, including goodwill, an impairment loss is recognised.
Other intangible assets and property, plant and equipment are reviewed for impairment whenever events or changes in 
circumstances indicate the carrying values may not be recoverable. In addition, the carrying value of capitalised development 
expenditure is reviewed for impairment annually. If any such indication exists and where the carrying values exceed the 
estimated recoverable amount, the assets or cash generating units are written down to their recoverable amount.
The recoverable amount of intangible assets and property, plant and equipment is the greater of fair value less costs to sell 
and value in use. In assessing value in use, the estimated future cash flows 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 by the cash generating 
unit to which the asset belongs. Fair value less costs to sell is, where known, based on actual sales price net of costs incurred in 
completing the disposal.
Non-financial assets that were impaired in previous periods are reviewed annually to assess whether the impairment 
is still relevant. 
1.6 Share capital
Ordinary shares, deferred shares and redeemable preference shares are classified as equity. Incremental costs directly 
attributable to the issue of new shares or options are shown in equity as a deduction from proceeds.
1.7 Leases
Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified 
as operating leases.
Operating lease payments are recognised as an expense in the income statement on a straight-line basis over the lease term.
Assets funded through finance leases are capitalised as property, plant and equipment and depreciated over the shorter of 
their useful economic life and the lease term. The resulting lease obligations are included in borrowings net of finance charges. 
Interest costs on finance leases are charged to the income statement.
1.8 Current and deferred income tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, 
based on tax rates and laws that are enacted or substantively enacted by the balance sheet date.
Deferred income tax is provided for on all temporary differences at the balance sheet date between the tax bases of assets 
and liabilities and their carrying amounts for financial reporting purposes, with the following exceptions:
•	 where the temporary difference arises from the initial recognition of goodwill or an asset or liability in a transaction that 
is not a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss;
•	 in respect of taxable temporary differences associated with investments in subsidiaries, where the timing of the reversal 
of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the 
foreseeable future; and
•	 deferred income tax assets are recognised only to the extent that it is probable that taxable profits will be available against 
which deductible temporary differences carried forward tax credits or tax losses can be utilised. Financial Statements Governance Strategic Report
33
Castleton Technology plc 
Annual Report 2014
1 Accounting Policies – Group continued
1.9 Trade and other receivables
Trade and other receivables are recognised and carried at the lower of their original value and recoverable amounts. 
Provision is made where there is evidence that the balances will not be recovered in full. Significant financial difficulties of the 
debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments are 
considered indicators that the trade receivable is impaired. Trade and other receivables are initially recognised at fair value and 
subsequently held at amortised cost. The amount of the provision is the difference between the asset’ s carrying amount and 
the present value of estimated future cash flows.
Amounts recoverable on contracts are stated at the net sales value of the work done after provision for contingencies 
and anticipated future losses on contracts, less amount received as progress payments on account.
The Group’ s trade and other receivables are non-interest bearing.
1.10 Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term deposits with an original 
maturity of three months or less.
For the purpose of the consolidated cash flow statement, cash and cash equivalents consist of cash and cash equivalents as 
defined above, net of outstanding bank overdrafts.
1.11 Foreign currencies
The functional and presentation currency of Castleton is Pound Sterling (£) and the Group conducts the majority of its business 
in Sterling.
Transactions in foreign currencies are initially recorded in the functional currency by applying the rate of exchange ruling at 
the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional 
currency rate of exchange ruling at the balance sheet date. All differences are taken to the income statement, except for 
differences on monetary assets and liabilities that form part of the Group’ s net investment in a foreign operation. These are 
taken directly to equity until the disposal of the net investment, at which time they are recognised in profit or loss.
The assets and liabilities of foreign operations are translated into Sterling at the rate of exchange ruling at the balance sheet 
date. Income and expenses are translated at weighted average exchange rates for the year. The resulting exchange differences 
are taken directly to a separate component of equity.
On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign 
operation is recognised in the income statement.
1.12 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is 
probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable 
estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows 
at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific 
to the liability.
1.13 Pensions
The Group operates a defined contribution scheme. Pension costs are charged directly to the income statement in the period 
to which they relate on an accruals basis. The Group has no further payment obligations once contributions have been paid.
1.14 Share-based payment transactions
The cost of equity-settled transactions with employees is measured by reference to the fair value of the award at the date at 
which they are granted and is recognised as an expense over the vesting period, which ends on the date at which the relevant 
employees become fully entitled to the award. Fair value is determined by an external valuer using an appropriate pricing 
model for which the assumptions are approved by the Directors. In valuing equity-settled transactions, only vesting conditions 
linked to the market price of the shares of the Company are considered.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market 
condition, which are treated as vesting irrespective of whether or not the market condition is satisfied, provided that all other 
performance conditions are satisfied. 34
Castleton Technology plc 
Annual Report 2014
1 Accounting Policies – Group continued
At each balance sheet date before vesting, the cumulative expense is calculated, representing the extent to which the vesting 
period has expired and management’ s best estimate of the achievement or otherwise of non-market conditions, number of 
equity instruments that will ultimately vest or in the case of an instrument subject to a market condition, be treated as vesting as 
described above. The movement in the cumulative expense since the previous balance sheet date is recognised in the income 
statement, with a corresponding entry in equity.
Where the terms of an equity-settled award are modified or a new award is designated as replacing a cancelled or settled 
award, the existing charge is recognised immediately. In addition an expense is recognised over the remainder of the new 
vesting period for the incremental fair value of any modification, based on the difference between the fair value of the original 
award and the fair value of the modified award, both as measured on the date of the modification. No reduction is recognised 
if this difference is negative.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not 
yet recognised for the award is recognised immediately. Any compensation paid up to the fair value of the award at the 
cancellation or settlement date is deducted from equity, with any excess over fair value being treated as an expense in the 
income statement.
1.15 Financial assets
The Group classifies its financial assets as loans and receivables.
Loans and receivables are non-derivative financial assets with fixed or determinable payments which are not quoted in an active 
market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date which are 
classified as non-current assets. The Group’ s loans and receivables comprise ‘trade and other receivables’ and ‘cash and cash 
equivalents’ in the balance sheet.
1.16 Derivative financial instruments and hedging activities
Derivatives are initially recognised at fair value on the dates a derivative contract is entered into and are subsequently  
re-measured at their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is 
designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives 
as either:
•	 fair value hedges when hedging the exposure to changes in the fair value of a recognised asset or liability; or
•	 cash flow hedges when hedging exposure to variability in cash flows that is either attributable to a particular risk associated 
with a recognised asset or liability or a highly probable forecast transaction.
For those derivatives designated as hedges and for which hedge accounting is desired, the hedging relationship is documented 
at its inception. This documentation identifies the hedging instrument, the hedged item or transaction, the nature of the risk 
being hedged and how effectiveness will be measured throughout its duration. Such hedges are expected at inception to be 
highly effective.
Any gains or losses arising from changes in the fair values of derivatives that do not qualify for hedge accounting are taken 
to the income statement through finance costs. The treatment of gains or losses arising from revaluing derivatives as hedging 
instruments depends on the nature of the hedging relationship, as follows:
1.17 Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at fair value less directly attributable transaction costs. After initial recognition, 
interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. 
Gains and losses arising on the repurchase, settlement or otherwise cancellation of liabilities are recognised in the finance cost 
line in the income statement.
1.18 Finance costs
Loans are carried at fair value on initial recognition, net of unamortised issue costs of debt. These costs are amortised over the 
loan term. Where a significant change occurs in respect of a loan, any unamortised issue costs arising from previous issues of 
debt are recognised in the income statement in full.
All other borrowing costs are recognised in the income statement on an accruals basis, using the effective rate method.
Notes to the Consolidated Financial Statements continued
year ended 31 March 2014 Financial Statements Governance Strategic Report
35
Castleton Technology plc 
Annual Report 2014
1 Accounting Policies – Group continued
1.19 Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and can be reliably 
measured. Revenue is measured at the fair value of the consideration received, excluding discounts, rebates, Value Added T ax 
and other sales duty. The following specific recognition criteria must also be met before revenue is recognised:
IP solutions revenues comprise the sale of goods and rendering of services. Revenues from the sale of goods are recognised 
when the significant risks and rewards of ownership of the goods have passed to the buyer. Revenues relating to contracted 
maintenance and subscription agreements are recognised evenly over the period of the agreement.
1.20 Other income
Finance income
Income is recognised on an accrual basis using the effective interest method.
1.21 Integration and strategic costs
Strategic costs include the costs incurred in sourcing new acquisitions, identifying disposal opportunities which did not take 
place, related restructuring and refinancing. Integration costs are incurred by the Group, when integrating one trading business 
into another. The types of costs include employment related costs of staff made redundant as a consequence of integration, 
due diligence costs, property costs such as lease termination penalties and vacant property provisions, third party adviser fees 
and rebranding costs.
Both the above types of costs are highlighted separately on the income statement as management believe that they need to 
be considered separately to gain an understanding of the underlying profitability of the continuing trading businesses.
For further detail refer to note 6.
1.22 Holiday pay accrual
Provision is made for holiday pay to the extent of the liability if all employees of the Group had left the business at its 
reporting date.
1.23 Segmental reporting
The Chief Operating Decision Maker (“CODM”) has been identified as the Executive Board. The Executive Board reviews the 
Group’ s internal reporting in order to assess performance and allocate resources. Management has determined the operating 
segments based on these reports.
The Executive Board assesses the performance of the operating segments based on adjusted EBITDA. Information provided to 
the Executive Board is measured in a manner consistent with that in the Financial Statements.
The segmental results for the comparative period to 31 March 2013 have been restated under IFRS 8 “Operating segments” to 
only include the continuing operations of the business.
1.24 Discontinued operations
Cash flows and operations that relate to a major component of the business or geographical region that has been disposed 
of or is classified as held for sale or distribution are shown separately from continuing operations. Comparative amounts have 
been restated.
Assets and businesses classified as held for sale or distribution are measured at the lower of carrying amount and fair value less 
costs to sell.
Assets and businesses are classified as held for sale or distribution if their carrying amount will be recovered or settled 
principally through a sale transaction rather than through continuing use. This condition is regarded as being met only when 
the sale is highly probable and the assets or businesses are available for immediate sale in their present condition or is a 
subsidiary acquired exclusively with a view to resale. Management must be committed to the sale, which should be expected 
to qualify for recognition as a completed sale within one year from the date of classification.
1.25 Demerger accounting
The Redcentric demerger carried out during the year has been accounted for as a disposal to owners in accordance with 
IFRIC 17 “Distribution of non-cash assets to owners”. Accordingly the difference between the fair value of the Redcentric 
business and the book value of the net assets disposed of has been recorded as a ‘demerger gain’ in the Consolidated 
Income Statement, and presented as part of the profit for the year on discontinued operations. 36
Castleton Technology plc 
Annual Report 2014
1 Accounting Policies – Group continued
1.26 Application of new IFRSs and interpretations 
(a) New and amended standards adopted by the Group
There are no IFRSs or IFRIC interpretations that are effective for the first time for the current financial year that have had 
a material impact on the Financial Statements of the Group for the year-ended 31 March 2014.
(b) New standards and interpretations not yet adopted
New standards, amendments and interpretations issued, effective for the financial year beginning 1 April 2014 and not yet 
adopted by the Group are detailed in the table below.
Standard
Effective date: 
periods 
commencing  
on or after
EU endorsement 
date
IAS 39 Financial Instruments: Recognition and measurement 
Amendment: Novation of derivatives and continuation of 
hedge accounting 1 Jan 14 19 Dec 13
IAS 36 Impairment of Assets  
Amendment: Recoverable Amount Disclosures for Non-Financial Asset 1 Jan 14 19 Dec 13
IFRIC 21 Levies – defines obligating event 1 Jan 14 13 Jun 14
IFRS 2 Share-based Payment – amends definitions of market, performance 
and service conditions 1 Jul 14 Q1 2015
IFRS 3 Business Combinations – non equity consideration to be measured 
at fair value, changes going to profit or loss 1 Jul 14 Q1 2015
IFRS 8 Operating Segments – requires judgements in aggregation 
of segments to be disclosed 1 Jul 14 Q1 2015
IFRS 13 Fair Value Measurement – clarifies discounting not necessary on short-
term payables and receivables when not material N/A Q1 2015
IAS 16 Property, Plant and Equipment – permits consistent measurement 
adoption 1 Jul 14 Q1 2015
IAS 24 Related Party Disclosures – extends definition to entities providing key 
management personnel services 1 Jul 14 Q1 2015
IAS 38 Intangible Assets – as for IAS 16 1 Jul 14 Q1 2015
IFRS 3 Business Combinations – excludes joint arrangements 1 Jul 14 Q1 2015
IFRS 13 Fair Value Measurement – clarifies the “portfolio exception” 1 Jan 14 Q1 2015
None of these are expected to have a material effect on the Consolidated Financial Statements of the Group. There are no 
IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group.
1.27 Critical accounting estimates and assumptions
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including 
expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, 
seldom equal the related results. The estimates and assumptions that have a significant risk of causing a material adjustment 
to the carrying amounts of assets and liabilities within the next financial year are:
•	 Estimated impairment of goodwill and intangible assets
  The Group tests annually whether goodwill and intangible assets have suffered any impairment, in accordance with the 
accounting policy stated in note 1.5. The recoverable amounts of cash generating units have been determined based on 
value-in-use calculations. These calculations require the use of estimates.
•	 Classification of integration and strategic costs
  The Directors have exercised judgement when classifying certain costs as integration and strategic costs. They believe that 
these costs are all related to the costs described in note 1.21. 
Notes to the Consolidated Financial Statements continued
year ended 31 March 2014 Financial Statements Governance Strategic Report
37
Castleton Technology plc 
Annual Report 2014
2 Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting to the Chief Operating Decision Maker 
(“CODM”). The CODM has been identified as the Group Chief Executive and the Finance Director. 
The Group Chief Executive and the Finance Director are jointly responsible for resource allocation and assessing the 
performance of the operating segments. The operating segments are defined by distinctly separate product offerings 
or markets. The CODM assesses the performance of the operating segments based on a measure of adjusted EBITDA. 
This measurement basis excludes discontinued operations. 
As the income generating segments had all been discontinued the figures in the Income Statement and Balance Sheet are 
in respect of the central cost centre which was the only remaining segment at the year-end.
3 Expenses by Nature
2014
£000
Restated 
2013
£000
Continuing
Depreciation – 66
Share-based compensation (see note 26) 59 145
Discontinued
Amortisation of intangible assets 737 2,225
Depreciation 127 1,703
Loss on disposal of property, plant and equipment – 32
Share-based compensation (see note 26) 59 144
4 Auditor’s Remuneration
Below are the fees payable to the auditors and their associates:
2014
£000
Restated 
2013
£000
Audit services 
Fees payable to Company auditor for the audit of parent company 
and consolidated financial statements 9 72
Other services: 
The audit of the Company’ s subsidiaries 16 160
T ax advisory services 10 170
Amounts relating to due diligence and reporting accountants services – 520
Total 35 922
During the year Baker Tilly UK Audit LLP were appointed as auditor of the Group. The comparatives relate to fees paid to the 
previous auditors. 38
Castleton Technology plc 
Annual Report 2014
5 Integration and Strategic Costs
In accordance with the Group’ s policy in respect of integration and strategic costs the following charges were incurred for 
the year:
2014
£000
Restated 
2013
£000
Costs of integration:
Reorganisation costs – 177
– 177
6 Discontinued Operations
Demerger
Subsequent to the acquisition of Maxima in November 2012, Castleton comprised two main operating divisions, the network-
based managed services business and the infrastructure solutions business.
The Board did not believe that the market fully appreciated the attributes of this business while it was combined with 
the infrastructure solutions business. Businesses with similar characteristics and profit margins to the network-based 
managed services business historically command a valuation with a higher price/earnings multiple than that of the Group. 
Furthermore it was the opinion of the Board that the two divisions were less likely to maximise their potential performance if 
they continued to be operated as part of one Group. 
Given these factors, the Board, together with its advisers, evaluated several options for maximising shareholder value, giving 
due consideration to a range of alternatives and factors.
The Board concluded that a demerger of the network based managed services business into a separate AIM listed company 
called Redcentric (“Demerger”) was in the best interests of the business and would deliver additional value to shareholders 
over time by allowing Castleton and Redcentric to pursue their strategic objectives independently with greater control over 
resources and opportunities, and increasing management and Board focus on the particular needs of each company.
The demerger, completed on 8 April 2013, created two distinct entities with different strategic, operational and economic 
characteristics and with separate operational management teams. The assets and liabilities for the demerged business were 
reflected as “Held for sale” in the 2013 balance sheet.
Comunica Holdings Limited
On 5 November 2013 Castleton announced the sale of its ICT Infrastructure, data centre and smart building solutions business, 
Comunica Holdings Limited (“Comunica”) to Coms plc (“Coms”) for a total cash consideration of £9.5 million to be settled 
by the payment of £7.65 million at completion and a consideration deferred for 12 months of £1.85 million. At the date of the 
disposal Comunica had net assets of £12.6 million resulting in a loss on disposal of £3.1 million.
The Board believes that the disposal was in the best interests of both shareholders and Comunica stakeholders. Comunica was 
well positioned for sale, having delivered on many internal objectives in the current year, enabling existing shareholders 
to capitalise on the value created to date, as well as providing the acquirer with an opportunity to further build upon 
these successes.
As part of the disposal the Company sold all of the intellectual property and associated trademarks and web sites of Redstone, 
save for those relating to the businesses retained following the disposal, and it was therefore required under the terms of the 
disposal that the Company change its name.
QAD Software Consultancy Business
On 3 March 2014 Castleton announced that it had agreed to sell the trade and certain assets of its QAD software consultancy 
business to Glantus Limited for a total cash consideration of £200,000, of which £50,000 is deferred for six months. The portion 
of the intangible assets relating to the QAD customer base was valued at £200,000 by the Directors and there was no profit or 
loss on the disposal.
The QAD software consultancy business is focused on QAD consultancy and technical services to support ERP systems in the 
manufacturing and distribution sectors. QAD is a US based Nasdaq quoted ERP vendor which previously had a formal working 
relationship with Maxima Information Group Ltd (“MIG”), a company acquired by Castleton in November 2012.
Notes to the Consolidated Financial Statements continued
year ended 31 March 2014 Financial Statements Governance Strategic Report
39
Castleton Technology plc 
Annual Report 2014
6 Discontinued Operations continued
QAD withdrew its support for the business some years ago and the business has been in decline since that time. The QAD 
software consultancy business is reliant upon the people it employs and its remaining customer relationships, both of which 
have been negatively impacted in recent months. The Board believed that significant financial and management investment 
were required to turn the business around. As a result, the Board took the decision to sell the business in order to allow a new 
management team to invest the time and resources required to return the business to growth.
Maxima Information Group Ltd (“MIG”)
Following the year-end, Castleton has disposed of the balance of the business in MIG, a software business focused on 
supporting a range of its own developed and proprietary ERP , reservation and ticketing and payroll software products 
(www.ferrysoftware.co.uk). The company’ s services include the provision of software, hardware, development and continued 
support. Castleton intends to utilise the proceeds from the disposal to further its stated strategy of potential acquisitions within 
the technology sector. The assets and liabilities of MIG that have been sold with the business are reflected as “Held for sale” in 
the balance sheet.
Current year trading of the discontinued businesses is as follows:
Year ended
31 March
2014
£000
Restated 
Year ended
31 March
2013 
£000
Discontinued operations
Revenue 17,581 63,948 
Cost of sales (7,715) (32,454)
Gross profit 9,866 31,494
Selling and distribution costs (764) (4,361)
Administrative expenses (8,359) (30,590)
Gain on demerger 30,042 –
Loss on disposal of subsidiary (3,075) –
Adjusted EBITDA* 1,944 6,053
Depreciation (127) (1,703)
Integration and strategic costs (278) (5,448)
Share-based payments (59) (144)
Loss on disposal of subsidiary (3,075) –
Gain on demerger 30,042 –
Intangible amortisation (737) (2,215)
Operating profit/(loss) 27,710 (3,457)
Net finance charges – (147)
Profit/(loss) on ordinary activities before taxation 27,710 (3,604)
T ax on profit/(loss) on ordinary activities (70) 1,405
Profit/(loss) from discontinued activities attributable to equity holders of the parent company 27,640 (2,199)
* Earnings for the year from continuing operations before net finance costs, depreciation, amortisation, integration and strategic costs, goodwill impairment and share-based 
payment charges. 40
Castleton Technology plc 
Annual Report 2014
6 Discontinued Operations continued
The net assets of the businesses disposed of in the year, at the date of disposal, were as follows:
Redcentric
£000
Comunica
£000
QAD
£000
T otal
£000
Intangible assets 31,004 9,982 200 41,186
Property plant and equipment 9,676 89 – 9,765
Inventories 675 297 – 972
Cash – 755 – 755
Receivables 11,179 7,371 – 18,550
Payables (16,213) (6,534) – (22,747)
Borrowings (11,200) – – (11,200)
Deferred tax (1,838) 615 – (1,223)
Gain on demerger 30,042 – – 30,042
Loss on disposal – (3,075) – (3,075)
T otal consideration 53,325 9,500 200 63,025
Satisfied by:
Cash – 7,650 150 7,800
Deferred consideration – 1,850 50 1,900
Dividend in specie 53,325 – – 53,325
53,325 9,500 200 63,025
During the year, these businesses contributed to or utilised cash flows of the Group as follows:
Redcentric Comunica QAD T otal
Net operating cash flows – (2,377) 540 (1,837)
Investing activities – (21) – (21)
Financing activities – – – –
7 Finance Income and Costs
Finance income
2014
£000
2013
£000
Fair value gain on interest rate swap 633 341
Finance costs
2014
£000
2013
£000
Interest payable on bank loans and overdrafts 785 825
Finance charges – 300
785 1,125
Finance charges are primarily unamortised loan costs written-off on the repayment of loans or amortised over the loan period.
Notes to the Consolidated Financial Statements continued
year ended 31 March 2014 Financial Statements Governance Strategic Report
41
Castleton Technology plc 
Annual Report 2014
8 Employee Benefits Expense
Continuing
2014 
£000
Restated
2013 
£000
Staff costs for the year for continuing operations, including executive Directors, amounted to: 
Wages and salaries 353 566
Social security costs 36 69
Pension costs 2 –
Share-based payments 59 145
450 780
Average monthly number of people (including executive Directors) employed:
2014 
£000
Restated
2013 
£000
Administration 5 7
T otal average headcount 5 7
The remuneration of the Directors was as follows:
Basic salary,
allowances
and fees
£000 Bonus
Benefits
£000
2014 
Total
£000
2013 
T otal
£000
Executive 
Peter Hallett 56 – 3 59 355
Ian Smith 187 – – 187 143
Spencer Dredge 7 – – 7 –
Non-executive 
T ony Weaver – – – – 204
David Payne 28 – – 28 36
Richard Ramsay 28 – – 28 46
306 – 3 309 784
None of the Directors made any gains on exercise of share options in 2014 and 2013. Director’ s emoluments payable to 
Ian Smith and T ony Weaver were paid to MXC Capital Limited.
Details of share options in the Company held by the Directors during the year are as follows:
Exercise
price
Pence
At 1 April
2013
Number
Granted
during the year
Number
At 31 March
 2014
Number
Peter Hallett (a) 0.8 6,875,000 – 6,875,000
Peter Hallett (b) 0.8 8,464,944 – 8,464,944
Ian Smith (c) 0.8 8,464,944 – 8,464,944
T ony Weaver (c) 0.8 8,464,944 – 8,464,944
See note 26 Share Based Payments for details of the movements in the exercise price of share options held by the directors. 
The options were granted on 9 September 2010 and are exercisable as follows:
(a)  9 March 2011 as to one-third, 9 September 2011 as to one-third and 9 September 2012 as to one-third;
(b)  4,808,088 on the earlier of the 9 September 2013 or the achievement of the performance conditions; 3,656,856 
on the achievement of the performance conditions;
(c)  2,821,648 on the earlier of the 9 September 2013 or the achievement of the performance conditions; 5,643,296 
on the achievement of the performance conditions.
Options (a), (b) and (c) were granted under the Company’ s Unapproved Share Option Scheme.
The performance conditions are linked to the occurrence of a qualifying transaction that will deliver a predefined return 
to shareholders. 42
Castleton Technology plc 
Annual Report 2014
9 Income Tax
(a) Tax on profit on ordinary activities
2014 
£000
Restated  
2013 
£000
Current income tax: 
Reversal of prior year provisions 312 –
Deferred tax: 
Origination and reversal of timing differences – Deferred tax asset – (863)
  – Deferred tax on acquired intangibles (242) (542)
T otal deferred income tax credit 70 (1,405)
Recognised as discontinued (70) 1,405
Deferred income tax credit in respect of continuing operations – –
Income tax credit reported in the income statement – –
The rate of income tax for the year beginning 1 April 2014 is 21% and the subsequent change to the recognised deferred tax 
asset that was previously calculated at a rate of 23% has been reflected in the reconciliation of the total income tax charge.
(b) Reconciliation of the total income tax (credit)
The tax on the Group’ s profit before tax differs from the theoretical amount that would arise using the weighted average tax 
rate applicable to losses of the consolidated entities as follows:
2014 
£000
Restated  
2013 
£000
Continuing loss from operations before taxation (1,251) (1,764)
Discontinued profit/(loss) from operations before taxation (note 6) 27,710 (3,604)
T otal profit/(loss) from operations before taxation 26,459 (5,368)
Accounting profit/(loss) multiplied by the UK standard rate of corporation tax of 23% (2013: 24%) 6,086 (1,288)
Net items not deductible/(chargeable) for tax purposes (6,290) 125
Change in prior year provisions 312 (171)
Movement in unrecognised deferred tax and the effect of the change of tax rate (38) (71)
T otal income tax charge/(credit) 70 (1,405)
T ax on discontinued operations (70) 1,405
T otal income tax reported in the income statement – –
(c) Unrecognised deferred tax
The Group has unrecognised deferred tax assets of £13.2 million (2013: £14.2 million) in respect of losses and reliefs, which 
the Group is unlikely to be able to utilise except in very limited circumstances. The composition of these deferred tax assets 
is as follows: property, plant and equipment differences £4.8 million (2013: £5.2 million), short-term temporary differences 
£0.1 million (2013: £0.1 million) and tax losses of £8.3 million (2013: £8.9 million). Deferred tax assets have not been recognised 
in respect of losses where it is the view of the Directors that it is not probable that future taxable profits will be available to 
offset against any deferred tax asset.
The rate of income tax for the year beginning 1 April 2014 is 21% and the subsequent change to the unrecognised deferred 
tax asset, previously calculated at a rate of 23%, is £1.0 million (2013: £1.0 million).
Notes to the Consolidated Financial Statements continued
year ended 31 March 2014 Financial Statements Governance Strategic Report
43
Castleton Technology plc 
Annual Report 2014
9 Income Tax continued
(d) Deferred tax liability
£000
At 1 April 2012 1,756
Acquisition of subsidiary 3,243
Deferred tax relating to intangible assets included in assets held for distribution (3,240)
Credited to the income statement (542)
At 31 March 2013 1,217
Credited to discontinued operations (242)
Included in disposals (818)
Included in liabilities held for sale (157)
At 31 March 2014 –
Deferred tax liabilities arose in respect of the amortisation of intangible assets recognised on acquisitions made.
(e) Deferred tax assets
T ax losses  
£000
Property,  
plant and 
equipment 
temporary 
differences 
£000
Other 
£000
T otal 
£000
At 1 April 2012 710 1,212 51 1,973
Recognised in the income statement 558 303 2 863
Deferred tax assets included in assets held for distribution (341) (1,034) (27) (1,402)
At 31 March 2013 927 481 26 1,434
Deferred tax asset included in disposals (927) (481) (26) (1,434)
At 31 March 2014 – – – –
Deferred tax assets are recognised where it is the view of the Directors that it is probable that there will be future sustainable 
taxable profits against which prior tax losses can be offset. This is based on projections of future taxable profits and indicators 
such as the level of orders that support the Directors’ projections.
A number of changes to the tax rate were announced by the Chancellor in March 2013 and substantively enacted on 
2 July 2013. These changes include a reduction of the main rate of corporation tax to 21% from 1 April 2014 and further 
reductions to the main rate of 1% per annum to 20% by 1 April 2015. These changes are not expected to have a significant 
impact on the Group.
10 Earnings/Loss Per Share
Basic loss per share and diluted loss per share are calculated using a weighted average number of shares of 622,689,960 
(2013: weighted average number of shares of 460,544,806, adjusted for the share consolidation). Adjusted EBITDA* has been 
shown on the grounds that it is a common metric used by the market in monitoring similar businesses.
*  Earnings for the year from continuing operations before net finance costs, depreciation, amortisation, integration and strategic costs, goodwill impairment and share-based 
payment charges. 44
Castleton Technology plc 
Annual Report 2014
10 Earnings/Loss Per Share continued
This measure is derived as follows:
2014 
£000
Restated  
2013 
£000
(Loss) for the year from continuing operations (1,251) (1,764)
Net finance expense 152 784
Depreciation – 66
Share-based payment charges 59 145
Integration and strategic costs – 177
Adjusted EBITDA* (1,040) (592)
Basic and diluted adjusted EBITDA* per share (0.17p) (0.13p)
Weighted average number of shares 623,717,357 460,544,806
Statutory EPS:
Basic and diluted (loss) per share from continuing activities (0.20p) (0.38p)
Basic and diluted profit/(loss) per share from discontinued activities 4.44p (0.48p)
*  T otal result for the year from continuing operations before net finance costs, tax, depreciation, amortisation, goodwill impairment, integration and strategic costs  
and share-based payment charges.
11 Intangible Assets
Goodwill 
£000
Software 
£000
Customer contacts 
and related 
relationships 
£000
Trademarks and 
licences 
£000
T otal  
£000
Cost 
As at 1 April 2012 94,691 6,271 19,671 500 121,133
Acquisition of a subsidiary 7,232 – 13,800 300 21,332
Additions – 148 – – 148
Assets held for distribution (90,514) – (22,471) (300) (113,285)
As at 1 April 2013 11,409 6,419 11,000 500 29,328
Disposals (11,409) (629) (9,800) (500) (22,338)
Assets held for sale – (5,790) (1,200) – (6,990)
As at 31 March 2014 – – – – –
Accumulated amortisation and impairment 
As at 1 April 2012 (78,722) (6,071) (12,352) (500) (97,645)
Amortisation – (195) (2,005) (25) (2,225)
Assets held for distribution 73,603 – 8,657 25 82,285
As at 31 March 2013 (5,119) (6,266) (5,700) (500) (17,585)
Amortisation – (131) (606) – (737)
Disposals 5,119 609 5,909 500 12,137
Held for disposal – 5,788 397 – 6,185
As At 31 March 2014 – – – – –
Net carrying amount 31 March 2014 – – – – –
Net carrying amount 31 March 2013 6,290 153 5,300 – 11,743
Net carrying amount 1 April 2012 15,969 200 7,319 – 23,488
The amortisation of £737,000 (2013:£2,225,000) comprises £737,000 (2013: £2,225,000) in respect of discontinued operations 
and £nil (2013: £nil) in respect of continuing operations, and is included in profit/(loss) for the year from discontinued operations 
in the Income Statement.
Notes to the Consolidated Financial Statements continued
year ended 31 March 2014 Financial Statements Governance Strategic Report
45
Castleton Technology plc 
Annual Report 2014
11 Intangible Assets continued
Goodwill
Goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that  
the carrying value may be impaired.
12 Property, Plant And Equipment
Metropolitan Area
Network
£000
Leasehold 
improvements 
£000
Network 
infrastructure  
and equipment 
£000
Equipment,  
fixtures and  
 fittings 
£000
T otal 
£000
Cost
At 1 April 2012 6,016 2,967 11,223 7,646 27,852
Revaluation of Metropolitan Area Network 940 – – – 940
Additions – 206 2,252 158 2,616
Disposals – (24) (130) (138) (292)
Included in assets held for distribution (6,956) (491) (5,203) (873) (13,523)
At 1 April 2013 – 2,658 8,142 6,793 17,593
Additions – 6 15 – 21
Included in assets held for sale – (10) (16) (20) (46)
Disposals – (2,654) (8,141) (6,773) (17,568)
At 31 March 2014 – – – – –
Accumulated depreciation
At 1 April 2012 (303) (2,397) (10,107) (6,871) (19,678)
Charge for the year (376) (253) (855) (284) (1,768)
Re-allocation – (95) (75) 170 –
Disposals – 9 104 165 278
Included in assets held for distribution 679 194 2,851 123 3,847
At 1 April 2013 – (2,542) (8,082) (6,697) (17,321)
Charge for the year – (20) (55) (52) (127)
Included in assets held for sale – 2 10 12 24
Disposals – 2,560 8,127 6,737 17,424
At 31 March 2014 – – – – –
Net book amount 
At 31 March 2014
  
– – – – –
At 31 March 2013 – 116 60 96 272
At 31 March 2012 5,713 570 1,116 775 8,174
As at 31 March 2014, included in equipment, fixtures and fittings are assets held under finance leases with a carrying value 
of £nil (2013: £54,348).
The depreciation for the year of £127,000 (2013: £1,768,000) comprises £127,000 (2013: £1,360.000) relating to discontinued 
operations and £nil (2013: £408,000) relating to continuing operations and is included in profit/(loss) for the year from 
discontinued operations in the Income Statement. 46
Castleton Technology plc 
Annual Report 2014
13 Other Non-Current Assets
2014 
£000
2013 
£000
Customer retentions – 355
The customer retentions were expected to be recovered within two to five years.
14 Inventories
2014 
£000
2013 
£000
Materials to be consumed in the rendering of services – 431
15 Trade and Other Receivables
2014 
£000
2013 
£000
Trade receivables 519 6,882
Less: provision for impairment of trade receivables (249) (232)
Less: customer retentions greater than 1 year – (355)
Trade receivables – net 270 6,295
Other receivables 2,233 740
Prepayments 112 994
Amounts recoverable on contracts – 3,108
Accrued income 3 104
2,618 11,241
As at 31 March 2014, trade receivables of £0.2 million (2013: £0.2 million) were impaired and fully provided for. The quality of 
trade receivables can be assessed by reference to the historical default rate of £3,566 for the preceding 365 days. The carrying 
value of trade receivables that would otherwise be past due or impaired but whose terms were renegotiated were nil. 
The individually impaired receivables relate to receivables over 365 days, customers in financial difficulty, customer acceptance 
issues and cancelled contracts.
As at 31 March 2014, trade receivables of £0.1 million were past due but not impaired. In the table below, these comprise the 
receivables over 30 days, which relate to a number of independent customers for whom there is no recent history of default. 
The ageing analysis of net trade receivables which are past due and not impaired is as follows:
Days outstanding
2014 
£000
31–60 days 14
61–90 days –
91–180 days 3
181–365 days 65
82
The provision is calculated by local management on a specific basis based on their best estimate of recoverability taking into 
account the age and specific circumstances relating to the debtor. The maximum exposure to credit risk at the reporting date 
is the fair value of each class of receivable mentioned above. The Group does not hold any collateral as security. The carrying 
amounts of the Group’ s trade and other receivables are denominated in Pounds.
Movements on the Group provision for impairment of trade receivables are as follows:
£000
Balance at 31 March 2013 195
Provision for receivables impairment 58
Receivables written-off during the year as uncollectible (4)
At 31 March 2014 249
Notes to the Consolidated Financial Statements continued
year ended 31 March 2014 Financial Statements Governance Strategic Report
47
Castleton Technology plc 
Annual Report 2014
15 Trade and Other Receivables continued
The creation and release of a provision for impaired receivables has been included in ‘administrative expenses’ in the income 
statement. Amounts charged to the allowance account are generally written-off, when there is no expectation of recovering 
additional cash.
The other asset classes within trade and other receivables do not contain impaired assets.
16 Assets and Liabilities Held for Sale or Distribution
Arising from the disposal of the business of MIG described in note 6 Discontinued operations, the following assets and 
liabilities were held for sale at 31 March 2014. The 2013 numbers relate to assets held for distribution pursuant to the demerger 
also described in note 6.
Assets held for sale or distribution
2014 
£000
2013 
£000
Intangible assets 805 31,000
T angible assets 22 9,676
Deferred tax asset – 1,402
Inventories – 675
Trade and other receivables – 11,180
Corporation tax – 162
827 54,095
Liabilities held for sale or distribution
2014 
£000
2013 
£000
Trade and other payables – 16,960
Borrowings – 11,200
Deferred tax liability 157 3,240
157 31,400
17 Cash and Cash Equivalents
2014 
£000
2013 
£000
Cash at bank and in hand (excluding overdrafts) 2,785 122
The table below shows the balance with the major counterparty in respect of cash and cash equivalents.
Credit rating
2014 
£000
2013 
£000
A 2,785 122
Included in cash at bank and in hand is £1.1 million of restricted funds held to secure the obligation for the interest rate swap. 48
Castleton Technology plc 
Annual Report 2014
18 Trade and Other Payables
Current
2014 
£000
2013 
£000
Trade payables 399 6,292
Other payables – 382
T axation and social security 183 1,610
Accruals 1,141 5,374
Deferred income 635 1,660
2,358 15,318
19 Commitments and Contingencies
a) Operating leases
Future aggregate minimum annual lease payments under non-cancellable operating leases as at 31 March are as follows:
Land and  
buildings  
2014 
£000
Plant and  
machinery 
2014 
£000
Land and  
buildings  
2013 
£000
Plant and 
machinery 
2013 
£000
Not later than 1 year – – 461 75
After 1 year but not more than 5 years – – 459 116
After 5 years – – 358 –
– – 1,278 191
The Group’ s operating leases related to property, motor vehicles and office equipment, and had remaining terms of between 
one and seven years. The amount recognised as an expense in discontinued activities in the year is £nil (2013: £536,000).
(b) Capital commitments
The Group had no contracted but not provided for capital commitments at 31 March 2014 (2013: £nil).
(c) Contingent liabilities
The Group’ s subsidiaries and the Company are currently, and may be from time to time, involved in a number of legal 
proceedings. Whilst the outcome of current outstanding actions and claims remains uncertain, it is expected that they will 
be resolved without a material impact on the Group’ s financial position.
As is usual practice in corporate transactions, the Company has given warranties and indemnities in relation to businesses 
disposed of. The Directors have not received any claims under such warranties or indemnities, and have no reason to 
believe that there will be any sustainable claims forthcoming. No provision has been made for any potential claims in these 
financial statements.
Notes to the Consolidated Financial Statements continued
year ended 31 March 2014 Financial Statements Governance Strategic Report
49
Castleton Technology plc 
Annual Report 2014
20 Provisions
Vacant property
The Group previously had a number of vacant properties. Provisions have been recognised to cover the rents, business rates 
and service charges for the period that each property is expected to be vacant, being up to the lease expiry or break clause if 
earlier. Provisions are calculated using the contracted rates of rents and service charges on each individual lease arrangement.
Dilapidations
The dilapidation provisions are built up over the life of the associated lease based on estimates of costs of work required to 
fulfil the Group’ s contractual obligation under the lease agreements to return the property to the same condition as at the 
commencement of the lease.
The provisions have been discounted to represent a risk-free time value of money. The remaining terms of these property 
leases range from one to eight years.
Dilapidations 
provision
Vacant  
property  
provision
T otal  
provision
At April 2012 363 742 1,105
Acquired with subsidiary 30 282 312
Utilised during the year (53) (5) (58)
At 1 April 2013 340 1,019 1,359
Included in discontinued operations (340) (1,019) (1,359)
At 31 March 2014 – – –
At 31 March 2013 
Current 87 205 292
Non-current 253 814 1,067
340 1,019 1,359
21 Borrowings
Current
2014 
£000
2013 
£000
Bank loan – 1,000
Overdrafts – 1,968
– 2,968
Non-current
2014 
£000
2013 
£000
Bank loan – 13,634
Included in liabilities held for distribution – (11,200)
Bank loan – 2,434
As at 31 March 2014, arrangement fees of £nil (2013: £66,000) are included within borrowings.
Bank loan and overdrafts
Following the disposal of Comunica Holdings Limited (“Comunica”) on 21 November 2013 for an initial cash consideration 
of £7.65 million, all bank debt was repaid, a condition of securing bank consent to the disposal, required under the terms 
of the Bank Facility. Disposal proceeds of £1.1 million were required by the bank to be transferred to an escrow account as 
collateral against the liabilities arising from the interest swap derivative which remains with the Group.
The Company is obligated to service the derivative until its maturity in September 2015. The gross liability under the derivative 
stands at approximately £0.8 million, and the current annual cost is approximately £0.6 million. 50
Castleton Technology plc 
Annual Report 2014
22 Financial Instruments by Category
The objectives of the Group’ s treasury activities are to manage financial risk, secure cost-effective funding where necessary and 
minimise adverse effects of fluctuations in the financial markets on the value of the Group’ s financial assets and liabilities, on 
reported profitability and on cash flows of the Group.
The Group’ s principal financial instruments for fundraising are bank borrowings, overdraft facilities and loans. The Group has 
various other financial instruments such as cash, trade receivables and trade payables that arise directly from its operations.
2014 
£000
2013 
£000
Assets
Other non-current assets – 355
Trade receivables 270 6,295
Other current assets 2,233 3,952
Cash and cash equivalents 2,785 122
Total 5,288 10,724
Fair value of the above items equals their carrying amounts.
31 March 2014
Liabilities  
at fair value  
through  
profit  
and loss  
£000
Other  
financial  
liabilities  
£000
Total  
£000
Liabilities 
Trade and other payables excluding statutory liabilities – 1,540 1,540
Derivative financial instruments:
– Interest rate swap 854 – 854
Total 854 1,540 2,394
31 March 2013
Liabilities  
at fair value  
through  
(the) profit  
and loss  
£000
Other  
financial  
liabilities  
£000
T otal  
£000
Liabilities 
Trade and other payables excluding statutory liabilities – 12,048 12,048
Borrowings – 5,402 5,402
Derivative financial instruments:
– Interest rate swap 1,487 – 1,487
Total 1,487 17,450 18,937
Fair value of the above items equals their carrying amounts.
23 Derivative Financial Instruments
2014 
£000
2013 
£000
Interest rate swap – fair value hedge 
Current liability 569 595
Non-current liability 285 892
854 1,487
Notes to the Consolidated Financial Statements continued
year ended 31 March 2014 Financial Statements Governance Strategic Report
51
Castleton Technology plc 
Annual Report 2014
23 Derivative Financial Instruments continued
At 31 March 2014, the Group has in place a cap and collar arrangement whereby the variable interest rate, which is based on 
LIBOR, cannot fall below 4.89% or rise above 6.5%. In addition, under the terms of the swap agreement, if LIBOR falls below 
4.89%, the interest rate rises by an equivalent amount for each incremental fall, up to a maximum of 6.5%. In the current year 
the Group incurred a £0.6 million (2013: £0.6 million) cash outflow as a result of this hedge. The notional principal amount of 
the outstanding interest rate swap contract at 31 March 2014 was £10.0 million (2013: £10.0 million). The derivative instrument 
expiry date is 30 September 2015.
Derivative financial instruments are accounted for as financial liabilities through profit or loss and gains and losses 
are recognised in the income statement in finance costs.
All derivative financial instruments are measured at their fair value and are calculated by reference to the net present value 
of future cash flows, based on exchange rates and interest rates quoted on international financial markets, at the balance 
sheet date.
Fair value measurement hierarchy
Fair value measurements of financial instruments (where relevant) are classified using the following fair value hierarchy which 
reflects the significance of the inputs used in making the measurements:
Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 –  input other than quoted prices included within Level 1 that are observable for the asset or liability, either directly 
(i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The fair value of financial instruments traded in active markets is based on quoted market prices at the close of business on 
the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, 
dealer, broker, industry group, pricing service or regulatory agency and those prices represent actual and regularly occurring 
market transactions on an arm’ s length basis. The fair value of financial instruments that are not traded in an active market (for 
example, over-the-counter derivatives) is determined by using valuation techniques. The valuation techniques maximise the use 
of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs 
required to fair value an instrument are observable, the instrument is included in Level 2. The Group’ s derivative at the year-end 
is Level 2.
24 Financial Risk Management
The Group’ s activities expose it to a variety of financial risks: market risk (including foreign exchange, fair value interest rate 
risk, cash flow interest rate risk, and price risk), credit risk, and liquidity risk. The Group’ s overall risk management programme 
focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’ s financial 
performance. The Group uses derivative financial instruments to hedge certain risk exposures.
Risk management is carried out centrally under policies approved by the Board of Directors. Group treasury identifies, 
evaluates and hedges financial risks. The Board provides principles for overall risk management, as well as policies covering 
specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-
derivative financial instruments, and investments of excess liquidity. 52
Castleton Technology plc 
Annual Report 2014
24 Financial Risk Management continued
(a) Market risk
(i) Foreign exchange risk
The Group mainly operates within the UK and foreign exchange risk arises from future commercial transactions, recognised 
assets and liabilities and net investments in foreign operations.
(ii) Cash flow risk
The Group receives interest on cash and cash equivalents and pays interest on its borrowings.
Borrowings at variable rates expose the Group to cash flow interest rate risk. During the years ended 31 March 2014 and 2013 
the Group’ s borrowings at variable rate were denominated in Pound Sterling with interest linked to UK Pound interest rates.
The Group analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into consideration 
refinancing, renewal of existing positions, alternative financing and hedging. Based on these scenarios, the Group calculates 
the impact on profit or loss of a defined interest rate shift and manages its cash flow interest rate risk by using hedges where 
appropriate. The Group has an interest rate swap in place which hedges against interest rate movements on its Barclays 
borrowing facility . The interest rate swap has a floor and a ceiling linked to LIBOR, the floor is set at 4.89% and the ceiling at 6.5%.
Based on the simulations performed, the impact on post-tax profit and equity of a +/– 1% shift in the interest rate would 
not be material. The simulation is done on a quarterly basis to verify that the maximum loss potential is within the limit given 
by management.
(iii) Price risk
The Group is not exposed to significant commodity or security price risk.
(b) Credit risk
Credit risk is managed at a divisional level. Credit risk arises from cash and cash equivalents, derivative financial instruments 
and deposits with banks and financial institutions, as well as credit exposures to customers, including outstanding receivables, 
amounts recoverable on contracts and committed transactions. Individual risk limits are set based on internal and external 
ratings in accordance with limits set by the divisions and reviewed by the Board where appropriate. The utilisation of credit 
limits is regularly monitored with appropriate action taken by management in the event of a breach of credit limit.
(c) Liquidity risk
Management monitors rolling forecasts of the Group’ s cash and cash equivalents based on expected cash flow. This is carried 
out at divisional and Group level, reviewing cash forecasts of operating companies of the Group in accordance with practice 
and limits set by the Group. The Group’ s liquidity management policy involves projecting cash flows and considering the level 
of liquid assets necessary to meet these.
The table below analyses the Group’ s financial liabilities into relevant maturity groupings based on the remaining period at the 
balance sheet to the contractual maturity date. These amounts disclosed in the table are the contracted undiscounted cash 
flows. Balances within 12 months equal their carrying balances as the impact of discounting is not significant.
Year ended 31 March 2014
Within  
1 year 
£000
1–2 years 
£000
More than  
2 years 
£000
Total  
£000
Trade and other payables 1,540 – – 1,540
Derivative financial instruments 569 285 – 854
Year ended 31 March 2013
Within  
1 year 
£000
1–2 years 
£000
More than  
2 years 
£000
T otal  
£000
Borrowings 2,968 2,434 – 5,402
Trade and other payables 12,048 – – 12,048
Derivative financial instruments 595 892 – 1,487
Notes to the Consolidated Financial Statements continued
year ended 31 March 2014 Financial Statements Governance Strategic Report
53
Castleton Technology plc 
Annual Report 2014
25 Called Up Share Capital
2014 
Number
2013 
Number
2014 
£000
2013 
£000
Allotted, called up and fully paid share capital 
Ordinary shares of 0.1p (2012: 0.1p)
1 April 548,717,357 3,102,419,622 549 3,102
Share issues 75,000,000 1,287,319,234 75 1,287
Share consolidation – (3,841,021,499) – –
Capital reduction – – – (3,840)
Ordinary shares of 0.1p each 623,717,357 548,717,357 624 549
Deferred shares of 9.9p each
1 April – 145,772,810 – 14,432
Cancellation of deferred shares – (145,772,810) – (14,432)
Deferred shares of 9.9p each – – – –
Allotted, called up and unpaid share capital
Redeemable preference shares of 10.0p
1 April 500,000 – 50 –
Share issue – 500,000 – 50
Redeemable preference shares of 10.0p 500,000 500,000 50 50
T otal issued share capital 624,217,357 549,217,357 674 599
Ordinary shareholders have the right to attend, vote and speak at meetings, receive dividends, and receive a return on assets 
in the case of a winding up.
The redeemable preference shares may be redeemed at the Company’ s option at any time without payment of a premium. 
On a winding up they rank ahead only of the ordinary shares and will be repaid at par. Redeemable preference shareholders 
do not have the right to vote and speak at meetings nor to receive dividends.
Share issue
During the year the following shares were issued:  
2014  
Number
2013  
Number
Placing with investors 75,000,000 1,287,319,234
75,000,000 1,287,319,224
In order to provide sufficient working capital for each of the demerged businesses and to pay the costs associated with 
the demerger, the Company raised £6 million by way of an equity placing of 75 million new ordinary shares in the Company 
at a price of 8 pence per share.
On 27 March 2013 the Company received the approval of the court for the capital reorganisation in preparation for the 
demerger. The capital reorganisation was undertaken under Part 17 of Chapter 10 of the Companies Act 2006 and comprised:
 (i) the cancellation of the Company’ s deferred shares, share premium account and capital redemption reserve; and
(ii) the reduction of the nominal value of each consolidated Redstone ordinary share from 0.8 pence to 0.1 pence by cancelling 
paid up capital of 0.7 pence on each such ordinary share.
On 26 March 2013, the Company’ s issued share capital was re-organised by the consolidation of every eight ordinary shares 
into one consolidated ordinary share.
In addition the Company has issued 3,500,000 warrants to Barclays Bank that can be converted to ordinary shares in the 
Company at any time before the sale of its entire share capital. The conversion price of these warrants is 0.4 pence per share. 54
Castleton Technology plc 
Annual Report 2014
26 Share-Based Payment Plans
During the year ended 31 March 2014 the Group had the following share-based payments: 
2014 
£000
2013 
£000
Equity-settled share-based charge arising from share option plans for employees 117 289
T otal equity-settled share-based payments 117 289
Equity-settled plans
The Group operates three types of equity-settled share-based payment plans; share options issued through an Employee Share 
Option Plan, (“ESOP”), in both Approved and Unapproved share schemes, and a Share Incentive Plan, (“SIP”), a contributory 
scheme based on employee contributions, on a buy one get one free basis. The charge for the year to 31 March 2014 of 
£117,000 (2013: £289,000) was made up of ESOP £117,000 (2013: £280,000) and SIP £nil (2013: £9,000). The charge for 2014 
is disclosed in the income statement as a share-based payment of charge of £117,000 (2013: £289,000), continuing operations 
£58,500 (2013: £144,500) and discontinued operations £58,500 (2013: £144,500).
ESOP
The schemes under the ESOP (both the Approved and Unapproved schemes) incorporate the same general terms 
and conditions with the Approved scheme benefiting from certain tax breaks.
The schemes’ period is ten years with vesting occurring after the first three years and settlement in equity. The only grant to 
contain differing general terms and conditions is the May 2005 grant which can be exercised in equal one-third tranches each 
year from inception. The schemes do not have performance conditions attached.
At 31 March 2014 options granted under the Unapproved and the Approved schemes were outstanding over a total 
of 30,023,970 and 2,382,862 ordinary shares respectively (2013: 2,382,862 Approved and 30,023,970 Unapproved).
The expense recognised for equity-settled share-based payments in respect of employee services received during the year 
to 31 March 2014 was £117,000 (2013: £280,000).
The following table illustrates the number and weighted average exercise prices (“WAEP”) of, and movements in, share options 
during the year.
2014  
Number of  
options
2014 
WAEP
2013  
Number of  
options
2013  
WAEP
Outstanding at the beginning of the year 32,406,832 4.46p 260,050,652 0.60p
Share consolidation adjustment – – (227,544,321) –
Forfeited during the year – – (45,000) 116.0p
Lapsed during the year – – (54,500) 116.0p
Outstanding at the end of the year 32,406,832 0.89p 32,406,832 4.46p
During the year the exercise price of the outstanding share options was adjusted to reflect the change in value of the options 
following the Demerger of Redcentric. 
During the year no options lapsed (2013: 54,500).
There were no options exercisable at the end of the year under the Approved and Unapproved schemes (2013: Approved nil 
and Unapproved nil).
The weighted average fair value of the options granted in the year ended 31 March 2014 was nil (2013: nil) and nil per option 
(2013: nil).
The weighted average remaining contractual life for the share options outstanding at 31 March 2014 is six years and 
five months (2013: seven years and five months).
The range of exercise prices for options outstanding at the end of the year was 0.8p to 23p (2013: 4p to 116p).
The number of share options at 31 March 2014 for which the exemption under IFRS 2 from fair valuing share options in issue 
prior to the adoption of IFRS has been utilised was nil (2013: nil).
Notes to the Consolidated Financial Statements continued
year ended 31 March 2014 Financial Statements Governance Strategic Report
55
Castleton Technology plc 
Annual Report 2014
26 Share-Based Payment Plans continued
The fair value of the equity-settled share options granted is estimated as at the date of grant using a binomial model, taking 
into account the terms and conditions upon which the options were granted. During the year ended 31 March 2014 there were 
no new grants (2013: nil). The following table lists the inputs into the model used for the year ended 31 March 2014 and for the 
year ended 31 March 2013.
Grant date
September  
2010
Option price 0.5p
Dividend yield (%) nil
Vesting period (years) 1 to 3 years
Assumed volatility at date of grant* 75% p.a.
Risk-free discount rate 1.2%
Expected life of option 3 years
Fair value per option 0.39p
Share price at grant 0.5p
*Assumed volatility has been determined by looking at historical share return volatility coupled with the period most closely matching the expected life of the option.
Share options outstanding at the end of the year with approximate remaining average life are as follows:
Range of prices
2014  
Number
Weighted  
average  
life of option at  
31 March  
2014
2013  
Number
Weighted  
average  
life of option at  
31 March  
2013
23p (2013: 116p) 137,000 5 years 137,000 6 years
0.8p (2013: 4p) 32,269,832
6 years  
5 months 32,269,832
7 years  
5 months
32,406,832
6 years  
5 months 32,406,832
7 years  
5 months
Share Incentive Plan
The Group introduced a Share Incentive Plan “SIP”, which provides employees in the Castleton Group with the opportunity to 
purchase shares in Castleton. Employee contributions are matched one for one and shares are purchased and held in the SIP 
by Yorkshire Building Society. This scheme was suspended in January 2010.
The expense recognised for the SIP during the year is £nil (2013: £9,000).
27 Net Cash Flows From Continuing Operating Activities
2014 
£000
Restated  
2013 
£000
Loss on ordinary activities before taxation (1,251) (1,764)
Adjustments for: 
Cash absorbed by integration and strategic costs – 177
Net finance costs 152 784
Depreciation of property, plant and equipment – 66
Equity-settled share-based payment charge 59 145
Movements in working capital: 
Decrease/(increase) in trade and other receivables 444 (33)
(Decrease)/increase in trade and other payables (1,741) 991
Cash used in continuing operations (2,337) 366 56
Castleton Technology plc 
Annual Report 2014
28 Pensions
The Group operates a defined contribution pension scheme for eligible employees. The charge for the year ended 
31 March 2014 relating to continuing operations is £2,174 (2013: £278,000). There were no prepayments or accruals relating 
to pension costs at the year-end.
29 Significant Subsidiaries
Below are the principal subsidiary undertakings.
Principal activity Country of incorporation
% Ordinary share 
capital owned
Held by Castleton T echnology plc 
Castleton T echnology Holdings Limited Intermediate holding company England and Wales 100%
Redstone Group Holdings Limited Intermediate holding company England and Wales 100%
Xpert Group Limited Intermediate holding company England and Wales 100%
Redstone T elecom Holdings Limited Intermediate holding company England and Wales 100%
Held by Castleton T echnology Holdings Limited
Maxima Information Group Limited Computer software sales and services England and Wales 100%
30 Subsequent Events
On 23 June 2014 Castleton announced the acquisition of the entire issued share capital of Montal Holdings Limited (“Montal”) 
for a total consideration of £3.83 million payable £3.04 million in cash and £0.79 million in loan notes. Montal specialises 
in providing outsourced IT services to the public sector and provides a full suite of outsourced services including support, 
hosting, business solutions and consultancy. The Group has not as yet completed the provisional assessment of the fair values 
of Montal.
On 16 June 2014 the Group secured a £0.5 million short-term facility from its bankers to assist with the integration of the 
acquisition. This facility will remain in place until the sooner of 30 November 2014 and the receipt of the deferred consideration 
for the sale of Comunica.
On 29 August 2014 the Group disposed of the trade and certain assets of ABS, the ferry ticketing, ERP and payroll software 
and consultancy business operated by Maxima Information Group Limited, for a total cash consideration of £0.75 million, which 
equates to the carrying value of the ABS assets in Group financial statements. The consideration will be settled £0.30 million at 
completion with a further £0.30 million on 30 September 2014 and the remaining £0.15 million due on 31 March 2015.
31 Related Parties
The Group has taken advantage of the exemption allowing it not to disclose transactions with entities wholly owned by 
the Group.
Key management is considered to comprise only the Directors. Directors’ emoluments are disclosed in note 8.
During the year the Group employed MXC Capital Limited, a specialist investment and advisory Group, to assist with the 
demerger and flotation of Redcentric plc, and the disposal of the entities noted in note 6, Discontinued Operations, incurring 
fees of £347,000 (2013: £408,000).
Ian Smith and T ony Weaver, Directors and shareholders of Castleton T echnology plc are Directors, and together the controlling 
shareholders of MXC Capital Limited.
Notes to the Consolidated Financial Statements continued
year ended 31 March 2014 Financial Statements Governance Strategic Report
57
Castleton Technology plc 
Annual Report 2014
Company Balance Sheet
as at 31 March 2014
Registered number 3336134
Note
31 March  
2014 
£000
31 March  
2013  
£000
Fixed assets 
Investments in subsidiaries 2 1,790 23,715
Current assets 
Debtors 3 699 50
Creditors: Amounts falling due within 1 year 4 – (6,680)
Net current assets/(liabilities) 699 (6,630)
T otal assets less current liabilities 2,489 17,085
Creditors: Amounts falling due after more than 1 year 5 – (13,634)
Net assets 2,489 3,451
Capital and reserves 
Called up share capital 8 674 599
Share premium account 9 5,925 –
Profit and loss account 9 (4,110) 2,852
T otal shareholders’ funds 10 2,489 3,451
The notes on pages 58 – 64 are an integral part of these financial statements. The financial statements set out on pages 57 – 64 
were approved by the Board of Directors and authorised for issue on 5 September 2014 and are signed on its behalf by.
Spencer Dredge Ian Smith
Director   Director 58
Castleton Technology plc 
Annual Report 2014
Notes to the Company Financial Statements
year ended 31 March 2014
1 Accounting Policies (UK GAAP)
Castleton T echnology plc has taken advantage of the exemption provided under Section 408 of the Companies Act 
2006 not to disclose the Company profit and loss account. The loss made by the Company in the year was £6,579,000 
(2013: £25,603,000).
The principal accounting policies, which have been applied consistently throughout the year in the preparation of the financial 
statements are:
(a) Basis of accounting
The financial statements have been prepared under the historical cost convention in accordance with the Companies Act 2006 
and applicable accounting standards in the UK.
(b) Basis of preparation
The financial statements have been prepared on a going concern basis in accordance with UK GAAP .
The Directors have assessed going concern for the Company, taking into account that it operates as part of the Castleton 
T echnology plc Group.
Following the disposal of Comunica Holdings Limited (“Comunica”) on 5 November 2013 for an initial cash consideration of 
£7.65 million, all bank debt was repaid, a condition of securing bank consent to the disposal, required under the terms of the 
Bank Facility. Disposal proceeds of £1.1 million were required to be transferred to an escrow account as collateral against the 
liabilities arising from the interest swap derivative which remains with the Group.
The Company is obligated to service the derivative until its maturity in September 2015. The gross liability under the derivative 
stands at approximately £1.1 million, and the current annual cost is approximately £0.6 million.
Following a review in December 2013, the Directors decided to cancel the Bank Facility, in recognition of commitment 
fee savings of £0.1 million per annum, a Bank waiver of the cancellation fee of £0.1 million, and the now inappropriate 
conditionality of any future utilisation.
The net cash position of the Group immediately following the disposal of Comunica amounted to approximately £3.0 million 
net of transaction expenses, including the restricted collateral account, and excluding deferred consideration of £1.85 million, 
expected to be received 12 months after disposal.
On 23 June 2014 Castleton announced the acquisition of the entire issued share capital of Montal Holdings Limited (“Montal”) 
for a total consideration of £3.83 million payable £3.04 million in cash and £0.79 million in loan notes. On 16 June 2014 the 
Group secured a £0.5 million short-term facility from its bankers to assist with the integration of the acquisition. This facility will 
remain in place until the sooner of 30 November 2014 and the receipt of the deferred consideration for the sale of Comunica.
The Directors have prepared detailed projections for the period to September 2015, based on the above facts and their 
knowledge of the Group’ s existing business. Whilst the Board believes that the Group as currently constituted will generate 
sufficient cash to enable it to pay its debts as they fall due, they are also confident of being able to raise additional financing 
should it be necessary to enable the Group to meet its strategic aims. Based on this, the Directors consider that the adoption 
of the going concern basis is appropriate.
(c) Investments in subsidiaries
Investments are initially recognised at cost, being the fair value of the consideration given and including acquisition costs 
associated with the investment. The carrying value of investments is reviewed for impairment if events or changes in 
circumstances indicate that the carrying value may not be recoverable.
(d) Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, 
based on tax rates and laws that are enacted or substantively enacted by the balance sheet date. Financial Statements Governance Strategic Report
59
Castleton Technology plc 
Annual Report 2014
1 Accounting Policies (UK GAAP) continued
(e) Share-based payments transactions
Equity-settled share-based payment transactions
The cost of equity-settled transactions with employees is measured by reference to the fair value of the award at the date at 
which they are granted and is recognised as an expense in the subsidiary over the vesting period, which ends on the date at 
which the relevant employees become fully entitled to the award. The fair value of the employee services received in exchange 
for the grant of options in Castleton T echnology plc shares is recognised as a capital contribution in the subsidiary. Fair value 
is determined by an external valuer using an appropriate pricing model for which the assumptions are approved by the 
Directors. In valuing equity-settled transactions, only vesting conditions linked to the market price of the shares of the Company 
are considered.
No expense is recognised in the subsidiary for awards that do not ultimately vest, except for awards where vesting 
is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition 
is satisfied, provided that all other performance conditions are satisfied.
At each balance sheet date before vesting, the cumulative expense is calculated, representing the extent to which the vesting 
period has expired and management’ s best estimate of the achievement or otherwise of non-market conditions, number of 
equity instruments that will ultimately vest or in the case of an instrument subject to a market condition, be treated as vesting as 
described above. The movement in the cumulative expense since the previous balance sheet date is recognised in the income 
statement of the subsidiary, with a corresponding entry in equity.
Where the terms of an equity-settled award are modified or a new award is designated as replacing a cancelled or settled 
award, the cost based on the original award terms continues to be recognised over the original vesting period. In addition 
an expense is recognised in the subsidiary over the remainder of the new vesting period for the incremental fair value of any 
modification, based on the difference between the fair value of the original award and the fair value of the modified award, 
both as measured on the date of the modification. No reduction is recognised if this difference is negative.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not 
yet recognised for the award is recognised immediately. Any compensation paid up to the fair value of the award at the 
cancellation or settlement date is deducted from equity, with any excess over fair value being treated as an expense in the 
income statement of the subsidiary.
(f) Foreign currencies
The functional and presentation currency of Castleton T echnology plc is Pound Sterling.
Transactions in foreign currencies are initially recorded in the functional currency by applying the rate of exchange ruling at 
the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional 
currency rate of exchange ruling at the balance sheet date. All differences are taken to the profit and loss.
(g) Employees and Directors emoluments
The Company had no employees during the year. The Directors’ emoluments are paid by Redstone Holdings Group Limited. 
Their remuneration is disclosed in this Annual Report. 60
Castleton Technology plc 
Annual Report 2014
Notes to the Company Financial Statements continued
2 Investments In Subsidiaries
Investments in 
subsidiaries 
£000
Cost 
At 1 April 2013 259,213
Cost of disposals and investments fully impaired (257,353)
Capital contribution related to share-based payments for subsidiaries 117
At 31 March 2014 1,977
Provision 
At 1 April 2013 235,498
Disposals and full impairments in prior years (235,498)
Charge in year 187
At 31 March 2014 187
Net book value 
At 31 March 2014 1,790
At 31 March 2013 23,715
The Directors annually review the carrying amount of the Company’ s investment for impairment. Based on this review, as a 
result of the disposals during the year, the Directors decided to recognise an impairment loss of £18,118,000. Following this 
review, the Directors believe that carrying value of the investments is supported by their underlying net assets and cash flows. 
At 31 March 2014, the Company had the following principal subsidiary undertakings.
Principal activity Country of incorporation
% Ordinary share 
capital owned
Held by Castleton T echnology plc 
Castleton T echnology Holdings Limited Intermediate holding company England and Wales 100%
Redstone Group Holdings Limited Intermediate holding company England and Wales 100%
Xpert Group Limited Intermediate holding company England and Wales 100%
Redstone T elecom Holdings Limited Intermediate holding company England and Wales 100%
Held by Castleton T echnology Holdings Limited
Maxima Information Group Limited Computer software sales and services England and Wales 100%
3 Debtors
2014 
£000
2013 
£000
Amounts due from subsidiary undertakings 649 –
Other debtors 50 50
699 50
Amounts due from subsidiary undertakings are unsecured, interest-free and have no fixed payment terms. Financial Statements Governance Strategic Report
61
Castleton Technology plc 
Annual Report 2014
4 Creditors: Amounts Falling Due Within One Y ear
2014 
£000
2013 
£000
Bank loans – 1,000
Amounts owed to subsidiary undertakings – 5,680
– 6,680
Amounts due to subsidiary undertakings are unsecured, interest-free and have no fixed payment terms.
5 Creditors: Amounts Falling Due After More Than One Y ear
2014 
£000
2013 
£000
Bank loans – 13,634
– 13,634
As at 31 March 2014, arrangement fees of £nil (2013: £66,000) are included within borrowings.
Bank loan and overdrafts
Following the disposal of Comunica Holdings Limited (“Comunica”) on 5 November 2013 for an initial cash consideration of 
£7.65 million, all bank debt was repaid, a condition of securing bank consent to the disposal, required under the terms of the 
Bank Facility. Disposal proceeds of £1.1 million were required to be transferred to an escrow account as collateral against the 
liabilities arising from the interest swap derivative which remains with the Group.
The Company is obligated to service the derivative until its maturity in September 2015. The gross liability under the derivative 
stands at approximately £0.8 million, and the current annual cost is approximately £0.6 million.
All bank loans are denominated in UK Pound Sterling.
Fair value of non-current borrowings
The carrying amounts and fair value of the non-current borrowings are as follows:
Carrying amount Fair value
2014 
£000
2013 
£000
2014 
£000
2013 
£000
Bank loans – 13,634 – 13,359
Fair values are based on discounted cash flows, using a rate based on the borrowing rates at 31 March 2014 and 31 March 2013 
as per the table below.
The effective interest rates based on average forecast borrowings are as follows:
2014 
%
2013 
%
Bank loans n/a 6.94
6 Share-Based Payment Plans
See note 26 in the Consolidated financial statements.
7 Auditor’s Remuneration
The Company audit fee is £4,000 (2013: £20,000). This fee was borne by another Group company. 62
Castleton Technology plc 
Annual Report 2014
8 Called Up Share Capital
2014 
Number
2013 
Number
2014 
£000
2013 
£000
Allotted, called up and fully paid share capital 
Ordinary shares of 0.1p (2012: 0.1p)
1 April 548,717,357 3,102,419,622 549 3,102
Share issues 75,000,000 1,287,319,234 75 1,287
Share consolidation – (3,841,021,499) – –
Capital reduction – – – (3,840)
Ordinary shares of 0.1p each 623,717,357 548,717,357 624 549
Redeemable preference shares of 10.0p
1 April 500,000 – 50 –
Share issue – 500,000 – 50
Redeemable preference shares of 10.0p 500,000 500,000 50 50
T otal issued share capital 624,217,357 549,217,357 674 599
Ordinary and preference shareholders have the right to attend, vote and speak at meetings, receive dividends, and receive 
a return on assets in the case of a winding up. Deferred shareholders cannot attend, speak or vote at meetings nor receive 
dividends and only have a right to receive a return on assets equal to the paid up amount of shares after the repayment to 
ordinary shareholders.
Share issue
During the year the following shares were issued:  
2014 
Number
2013 
Number
Placing with investors 75,000,000 1,287,319,234
75,000,000 1,287,319,224
In order to provide sufficient working capital for each of the demerged businesses and to pay the costs associated with 
the demerger, the Company raised £6 million by way of an equity placing of 75 million new ordinary shares in the Company 
at a price of 8 pence per share.
On 27 March 2013 the Company received the approval of the court for the capital reorganisation in preparation for the 
demerger of Redcentric plc. The capital reorganisation was undertaken under Part 17 of Chapter 10 of the Companies Act 
2006 and comprised:
(i) the cancellation of Castleton’ s deferred shares, share premium account and capital redemption reserve; and
(ii) the reduction of the nominal value of each ordinary share from 0.8 pence to 0.1 pence by cancelling paid up capital of 
0.7 pence on each such ordinary share.
On 26 March 2013, the Company’ s issued share capital was re-organised by the consolidation of every eight ordinary shares 
into one consolidated ordinary share.
Notes to the Company Financial Statements continued Financial Statements Governance Strategic Report
63
Castleton Technology plc 
Annual Report 2014
9 Reserves
Share  
premium  
account  
£000
Profit  
and loss  
account  
£000
At 1 April 2013 – 2,852
Loss for the year – (6,579)
Distribution of shares in Redcentric Holdings Limited on demerger – (500)
Share-based payment (note 6) – 117
Shares issued in the year 5,925 –
At 31 March 2014 5,925 (4,110)
10 Reconciliation Of Movements In Shareholders’ Funds
2014 
£000
2013 
£000
(Loss) for the year (6,579) (25,603)
Distribution of shares in Redcentric Holdings Limited on demerger (500) –
Share-based payments (note 6) 117 289
Shares issued 6,000 3,836
Preference shares – 50
Net decrease in shareholders’ funds (962) (21,428)
Opening shareholders’ funds 3,451 24,879
Closing shareholders’ funds 2,489 3,451
11 Subsequent Events
On 23 June 2014 Castleton announced the acquisition of the entire issued share capital of Montal Holdings Limited (“Montal”) 
for a total consideration of £3.83 million payable £3.04 million in cash and £0.79 million in loan notes. Montal specialises 
in providing outsourced IT services to the public sector and provides a full suite of outsourced services including support, 
hosting, business solutions and consultancy. The Group has not as yet completed the provisional assessment of the fair values 
of Montal.
On 16 June 2014 the Group secured a £0.5 million short-term facility from its bankers to assist with the integration of the 
acquisition. This facility will remain in place until the sooner of 30 November 2014 and the receipt of the deferred consideration 
for the sale of Comunica.
On 29 August 2014 the Group disposed of the trade and certain assets of ABS, the ferry ticketing, ERP and payroll software 
and consultancy business operated by Maxima Information Group Limited, for a total cash consideration of £0.75 million, 
which equates to the carrying value of the ABS assests in the Group finanical statements. The consideration will be settled 
£0.30 million at completion with a further £0.30 million on 30 September 2014 and the remaining £0.15 million due on 
31 March 2015. 64
Castleton Technology plc 
Annual Report 2014
Notes to the Company Financial Statements continued
12 Related Parties
The Group has taken the exemption not to disclose transactions with entities wholly owned by the Group.
During the year the Group employed MXC Capital Limited, a specialist investment and advisory Group, to assist with the 
demerger and flotation of Redcentric plc, and the disposal of the entities noted in note 6 to the Consolidated financial 
statements, Discontinued Operations, incurring fees of £347,000 (2013: £408,000).
Ian Smith and T ony Weaver, Directors and shareholders of Castleton T echnology plc are Directors, and together the controlling 
shareholders of MXC Capital Limited.
13 Control
In the opinion of the Directors, there is no single controlling party. Designed and produced by Radley Yeldar www.ry.com Newton House
Cambridge Business Park
Cowley Road
Cambridge CB4 0WZ
www.castletonplc.com
Castleton Technology plc Annual Report 2014