Annual Report 2013  ANNUAL REPORT
2013
01
Contents
01 Introduction
 Highlights of the year   04
  Financial Highlights   04
  Operational Highlights   05
  Overview     06
  Our Clients    07
02 Customer Service
 Customer Service is Changing   10
 Speech Recognition    12
  case study: Vue Cinemas   13
 Multi-channel Self-service    14
  case study: Utilita    15
 Payment Card Industry Data Security Standards 16
  case study: Kiddicare   17
 Service Overview     18
 What our Clients think    19
03 Business Overview
  Chairman’s Statement   22
  Market Overview    22
  Operational Review   24
  Current Trading and Outlook  27
  Financial Review    28
  Board of Directors    29
  Directors’ Report    30
  Corporate Responsibility   35
  Corporate Governance   38
  Directors’ Responsibilities   42
  Independent Audit Report   43
04 Financial Review
 Consolidated Financial Statements   46
 Notes to the Financial Statements   50
 Company Financial Statements   73
 Notes to the Company Financial Statements  74
 Shareholder Information    80 ANNUAL REPORT
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02 ANNUAL REPORT
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3
 SECTION
01
Introduction
04 Highlights of the Year
06 Overview
07 Our Clients ANNUAL REPORT
2013
04
Highlights of the Year
*  Adjusted Operating Profit is Operating Profit 
excluding expenses relating to share option schemes
** EBITDA is the profit before tax adjusted for 
depreciation, amortisation, finance income, finance 
expense and expenses relating to share option 
schemes
Eckoh plc (AIM: ECK), the UK’s leading provider of 
multi-channel customer service and secure payment 
solutions, is pleased to announce its final results for the 
year ended 31 March 2013.
Revenue 
£11m
up 6% to £11.0m  
(FY12: £10.4m)
88% of FY13 revenue is of a 
recurring nature (FY12: 87%)
Gross Profit
£8.3m
up 5% to £8.3m  
(FY12: £7.9m)
Gross margin of 76%  
(FY12: 76%)
Operating Profit
£1.5m
Adjusted* Operating profit 
increased by 18% to £1.5m 
(FY12: £1.3m)
Dividend
0.25p
The Board recommends a full 
year dividend of 0.25 pence 
per share for the year ended 
31 March 2013  
(FY12: 0.2 pence per share)
EBITDA**
£2.4m
EBITDA* increased by 9% to 
£2.4m (FY12: £2.2m)
Cash Generated
+67%
Cash generated from 
operating activities increased 
by 67% to £2.5m  
(FY12: £1.5m)
Cash Balance
£8.5m
Strong debt free financial 
position with a cash and short 
term investment balance up 
to £8.5m (FY12: £6.4m)
Financial Highlights: ANNUAL REPORT
2013
5
Operational Highlights:
Strong new customer traction during the year 
driven by both direct and indirect sales initiatives
  o  Group now services 50 corporate clients an uplift 
of 11 new clients on the previous year 
  o  Channel Partners BT, Azzurri Communications, a 
global payment service provider and Serco now 
generating significant new business interest
  o  New 3 year partnership with a UK leader in BPM 
and outsourcing solutions
Demand for payment services continues to 
underpin customer growth, including:
  o  3 year contracts with Whitbread and CIMA
  o  3 year contracts with one of the UK’s leading 
financial services companies and a major high 
street retailer
  o  2 year contract with Kiddicare
Successfully renewed contracts with blue chip 
customers including Vue, Power NI, Royal Mail, 
Ideal Shopping and Train Information Services 
Limited
On June 11th 2013 completed £6.3m acquisition of 
Veritape, a provider of PCI DSS compliant secure 
payment solutions
  o  Increases Eckoh’s customer base from 50 to  
121 clients
  o  Immediately earnings enhancing
Positive momentum generated by both our indirect 
and direct sales channels with significant levels of 
new business opportunities now in development 
The Board are confident that the growth seen in 
recent periods will continue in the current year and 
beyond.
ANNUAL REPORT
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Overview
Eckoh is the UK’s leading provider 
of multi-channel, customer service 
and secure payment solutions.   
Our hosted solutions enable consumers 
to make enquiries, transactions or secure 
payments over the phone, web or mobile 
without having to interact with a contact centre 
agent. This reduces our client’s operational 
costs and enables their agents to focus on 
complex enquiries.
For services using advanced speech recognition, 
Eckoh is the largest provider in the UK with 
the infrastructure and scalability to handle up 
to 6,000 calls simultaneously. For clients, this 
means their calls will always be answered no 
matter how unpredictable the circumstances.
Eckoh is a Payment Card Industry Data Security 
Standards (PCI DSS) level one compliant service 
provider, annually processing over £300 million 
in card payments. 
Eckoh processes around 30 million transactions 
per year across voice, web and mobile channels.
Typical applications include:
 o Intelligent call routing  
 o  Secure PCI DSS compliant  
card payments
 o  Customer identification  
and verification
 o  Real-time information
 o  Data capture
 o  Customer surveys
 o  Product purchase
 o  Balance enquiries,  
subscriptions and renewals
 o  Delivery tracking
 o  T icket booking
 o  Outbound notifications
 o  Service outage notifications Our Clients
For over 10 years, Eckoh has delivered 
customer service and payment solutions 
for leading brands across an unmatched 
range of industry sectors. With a 
heritage in phone services using speech 
recognition, over the decade our 
proposition has broadened to become 
fully multi-channel, encompassing 
services delivered over the phone, web 
and mobile channels. We now handle 
more interactions than any other 
company in our marketplace.  
Eckoh typically works with the customer services 
divisions of large organisations, helping them become 
more efficient. These companies receive a high 
volume of customer enquiries which are typically 
handled by a live contact centre of between 50 to 
2,000 agents that are either in-house or outsourced. 
It is this area of business upon which we target our 
service propositions. 
Our clients generally contract with us for an initial 
three year period and the vast majority of them (more 
than 95%) renew their contracts with us at the end 
of their term. This extremely high retention level is 
testament both to the quality of the solutions we 
deliver and the on-going support and improvements 
we provide during the contract term through 
our Project and Account Management teams. 
They ensure that each client is valued, cared for 
appropriately and receives exceptional service. 
The contractual arrangements usually involve a 
monthly or annual usage commitment based upon 
volumes of interactions, transactions or payments. 
This provides us with a regular and predictable level 
of revenue across the duration of the contract. 
These recurring payments combined with committed 
monthly management fees represented 88% of the 
Group revenue for 2012/13 and gives the Company 
excellent visibility on future revenues. 
Our clients include: 
Utilities
o Affinity Water
o Bournemouth Water
o Dw ˆ r Cymru Welsh Water
o Flow Energy
o Northumbrian Water
o Power NI
o South East Water
o South West Water
o Utilita
o Wessex Water 
Travel
o Addison Lee
o BAA 
o Gatwick Airport
o National Rail Enquiries
o Transport for London
Financial Services
o Barclays
o CIMA
o London Stock Exchange
o RCI Financial Services
o TD Waterhouse
o Paratus AMC
Outsourcing  
and Distribution
o GEOAmey
o Orbital Response
o Parcelforce Worldwide
o Royal Mail 
o Rentokil Initial
o Serco
ANNUAL REPORT
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Telecoms
o BT
o O2 
o Resilient Networks
o Spoke Interactive
Public Sector
o  Central Office of 
Information
o Department of Health
o  Defra - Rural Payments 
Agency
o Essex County Council
o Ministry of Justice
Leisure and Media
o Comic Relief
o IPSOS MORI
o Premier Inn
o Vue
o William Hill
Retail 
o Electrolux
o Ideal Shopping Direct
o Kiddicare (Morrisons)
o Laura Ashley
o Luxup
o Tenpin
o  The Garden Centre Group ANNUAL REPORT
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08 ANNUAL REPORT
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09
 SECTION
02
Customer Service
10 How Customer Service is Changing
12 Speech Recognition
14 Multi-channel Self-service
16 PCI DSS
18 Service Overview
19 What our Clients Think ANNUAL REPORT
2013
10
How Customer Service is Changing
A new empowered, self-serving customer
Just this year it was predicted that by 2015, people will use a tablet as their main computing 
device, replacing the home PC. In addition, 64% of people in the UK now own a smartphone. This 
unprecedented growth and demand for mobile information has led to a behavioural change in how 
people contact organisations for help. 
Across all demographics, voice is still the primary communication channel 
used, but is quickly followed by self-service channels. 
Forrester, January 2013
Customers are becoming more self-sufficient 
and are very willing to try and get the 
information they require on their own before 
talking to or interacting with a company 
representative. Where a phone number to a 
contact centre was historically the primary 
source of product and service information, this 
has now been absorbed into a large pool of 
communications options for the customer.
This doesn’t mean to say that the voice channel 
is becoming a less important customer contact 
channel; just that it has been augmented by 
complementary ways of achieving the same 
goal. Despite the global recession the contact 
centre industry has continued to grow and is 
forecast to continue to do so over the coming 
years. People still want to speak to an agent, 
but instead of phoning for general queries 
which they can source from elsewhere, they 
phone for answers or assistance to more 
complex enquiries. This changing customer 
behaviour has had three major impacts on 
organisations:
  o  Consumers now expect self-service 
channels to answer their basic enquiries.
  o  Agents are now viewed as the trusted 
advisor, the expert and the hub that 
binds all the other channels together.
  o  As well as having a choice of contact 
points to an organisation (without 
being particularly loyal to any one 
in particular), customers want the 
option to start an interaction in one 
communication channel and finish it in 
another. ANNUAL REPORT
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Organisations are evolving their 
customer service functions
Organisations are introducing more ways for 
their customers to be more self-sufficient when 
seeking information, placing orders and making 
payments. These include automated voice systems 
(using both touchtone and speech recognition); 
feature rich websites and mobile web; SMS and 
smartphone applications. 
Contact centre agents are being given access to 
customer history to provide a richer interaction 
by building on information that has already been 
communicated by the customer. Agents are also 
being empowered to use communication tools 
such as webchat, email, SMS and social media to 
directly and conveniently converse with customers 
for service and support.
Combining all these elements to create a 
seamless customer experience is the challenge 
businesses are now facing. To date, multi-channel 
management has created communication silos 
that have often resulted in a disjointed service. 
Creating the agile service that customers want 
means standardising resolution and customer 
services processes, across all channels and touch-
points.
Increasing self-service automation
Organisations realise that to provide the level 
of multi-channel service that customers now 
expect they have to optimise their contact centre 
environments. This includes automating tasks to 
increase agent productivity.
Eckoh has spent the last two decades refining 
such services and now provides an end-to-
end proposition for contact centres. Using 
our technology, customers can now contact 
an organisation, locate a store, find real-time 
information about products and services, order 
and pay for them and receive confirmation of 
payment without physically needing to speak with 
an agent. These services are brought together 
under three main service propositions:
  o  Speech self-service solutions
  o  Multi-channel self-service solutions
  o  Secure payment solutions compliant with 
PCI DSS (“Payment Card Industry Data 
Security Standards”)
Creating the agile service that customers 
want means standardising resolution and 
customer services processes, across all 
channels and touch-points. ANNUAL REPORT
2013
12
Interactive phone services that rely on 
keypad entry (known as touchtone) 
have been widely used over many years 
by contact centres and businesses, but 
there continues to be a mixed response 
from customers about the usability 
of them. These services were typically 
designed and implemented many years 
ago and over time they have been 
augmented and changed, leading to a 
disjointed and frustrating experience. As 
people have become more comfortable 
speaking aloud to their devices, the 
traditional touchtone menus are either 
being replaced with advanced speech 
recognition systems or these are offered 
as an alternative. Speech solutions that 
use ‘natural language’ technology, 
where the user can say in detail what 
they need, have the ability to remove 
all of the layers of touchtone menu 
choices. This results in the caller getting 
their desired result much quicker and 
usually with greater accuracy.
It is undoubtedly true that not everyone 
enjoys using speech systems either and 
may have a negative view about how 
they perform. However, our experience 
is that these views have generally 
been formed from the use of poorly 
implemented solutions from many years 
ago. We find that where such a user is 
presented with a well-designed Eckoh 
solution that actually achieves their 
objective, their negative perceptions can 
very quickly be turned into a positive, 
almost evangelical attitude. This leads 
us to believe that the strong growth in 
the use of Eckoh’s speech self-service 
solutions will continue.
To compete effectively in a market 
where brands are reviewed and 
critiqued publicly through social 
media channels, contact centres 
and businesses see the value of 
deploying advanced solutions to 
retain customers. A well designed 
speech recognition solution enables 
callers to speak to a system just 
as they would to a contact centre 
agent. The technology has evolved 
to make precise recognition of 
extremely large grammars viable, 
even in difficult environmental 
conditions. This makes it possible 
not just for the system to 
understand and respond to the 
caller accurately, but to do so in an 
intuitive and personalised manner.
Using the most advanced speech 
technologies, Eckoh has created a 
natural language application and 
dialogue called EckohASSIST which is 
delivered on a single phone number 
to the organisation and greets callers 
with the simple question “how can we 
help you?”. The caller can describe the 
reason for their call in their own words 
and based on their reply they will be 
routed appropriately. Callers can now 
take control of their interaction, and 
in doing so it minimises any frustration 
and increases their confidence in the 
organisation’s ability to provide them 
with the right service and support.
To achieve this simple, natural and 
effective customer experience, Eckoh 
uses the most advanced speech 
technology combined with complex 
statistical language models that 
know the probability of a particular 
organisation receiving one call type 
versus another. This approach not only 
provides a compelling and satisfying 
customer experience, but also delivers 
a significant cost saving to the 
organisation by ensuring that their 
customers get the most appropriate 
outcome from their call. 
Our clients benefit from the latest 
self-service technologies of which 
advanced speech recognition is but 
one. Whilst our heritage has been in 
the development of many of the UK’s 
most complex and most widely used 
speech solutions, in recent years our 
client’s desire to deliver a coherent and 
consistent customer experience across 
all of their communication channels has 
provided Eckoh with an opportunity 
to broaden our offering into web and 
perhaps most importantly the mobile 
channel. 
Speech Recognition 
Gathering momentum
As customers become more self-sufficient they are also becoming more 
demanding, so as the time between requesting and receiving information 
is reduced, the idea of navigating through long menu systems, being 
put on hold, or being redirected incorrectly is regarded with increasing 
frustration. 
As a mainstream technology speech recognition has come of age, and 
when incorporated with mobile technologies is now being viewed as 
perhaps the quickest way to obtain information by allowing people to 
simply ask for it verbally. People now understand the potential of speech 
and how to get the best outcome from using it. As such it is increasingly 
incorporated within everyday devices such as cars, phones, PCs and 
electrical goods.  case study: 
Vue Cinemas
Vue Entertainment is a world class operator and developer of 
modern state-of-the-art multiplex cinemas. Vue currently operates 
116 cinemas across the UK, Germany, Ireland, Denmark, Portugal 
and Taiwan. The Company has a mission to deliver unrivalled cinema 
experience with outstanding service provided by friendly and helpful 
people. Vue serves around 37 million customers per year.
With 80 cinemas in the UK alone Vue takes thousands of calls every 
day. To tie in with their mission to deliver outstanding service, be 
customer focused and innovative they wanted to improve the ease 
of the booking process for customers and the quality of the guest 
services. To achieve this, Vue wanted to reduce call waiting times for 
customers who want to book tickets and find basic film information, 
especially at peak times or when popular films are released.
The cinema information and ticket booking service provides Vue with 
a one-number telephone solution for its group of UK cinemas. Using 
Eckoh’s advanced speech recognition technology, the automated 
service allows customers to request film information and screen 
times at their nearest cinema and book and pay for tickets in 
advance.
Callers can book from the extensive range of ticket and performance 
types across the Vue network, select where they would like to sit 
in the cinema and keep it as a personal preference. It also features 
increased levels of personalisation that offers callers option selections 
based upon their previous call patterns to help make the call 
experience faster and more intuitive. The market leading speech 
recognition solution is hosted on Eckoh’s VoiceXML processing 
platform and receives over a million calls every year from Vue’s 
customers.
W e have been working 
with Eckoh for almost 
a decade and they have 
consistently demonstrated an 
unrivalled level of flexibility, 
responsiveness, and expertise 
in the delivery of their 
telephony and contact 
centre services. Vue strives 
to set the highest customer 
service benchmarks for the 
cinema industry and as our 
partner , Eckoh has helped 
us to achieve that goal. W e 
look forward to exploring 
other multi-channel services 
with them to provide a more 
satisfying experience for our 
customers.
Steve Knibbs  
Chief Operating Officer  
VUE Cinemas
ANNUAL REPORT
2013
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Following the emergence of the affordable home PC and laptop at the 
beginning of the millennium, the more recent leaps in technology have 
given consumers mobile devices such as the smartphone and tablet which 
have a capability that often exceeds their home computers. These have 
provided consumers everywhere with the ability to call, browse the web, 
gather and send information, order and purchase products and services, 
and comment about their experience. The meteoric adoption of this 
portable consumer technology just in the last two years is only set to 
explode further with new devices and new ways of interacting already in 
development.
Multi-channel Self-service
To keep up with the pace of innovation and to offer the latest 
functionality, companies are typically outsourcing requests to develop 
mobile apps and mobile optimised websites so that they can compete 
effectively and quickly. However, many of the organisations that are 
delivering these solutions have no expertise in other communication 
channels, particularly voice, and often ignore them altogether. This 
can lead to a solution that may work effectively in isolation but has no 
coherence when the customer moves from the mobile environment to 
interacting via the phone or web either at work or home. 
Customers are now demanding 
interaction with organisations via 
mobile devices and want to fulfil the 
same goals as they would with a 
PC or on the phone. So to compete 
effectively in the market, organisations 
need to facilitate this level of service 
and provide the means to be contacted 
in this way so that customers can, at 
the swipe of their finger: 
  o  use their geographical location 
to receive location dependant 
information and offers,
  o  register, order and pay for 
products and services,
  o  personalise the way that they 
receive information based on 
preferences and location,
 
  o  create call back/support 
requests; and 
  o  receive value-added services and 
incentives.
But an even bigger challenge facing 
customer services departments is that 
they have to do more with less financial 
investment. Efficiency is still the 
dominant objective. As customer touch 
points grow, department heads know 
that they have to devise a strategy that 
includes automating as many common 
enquiries and payments as possible to 
free up their agents for other tasks and 
keep costs down. And this is where 
Eckoh comes in.
As well as our automation expertise 
in the voice channel through speech 
enabled technology, Eckoh has evolved 
its portfolio to include web and mobile 
technology that offers organisations a 
large range of multi-channel, self-
service solutions. We have successfully 
provided clients with the means to 
complement their existing contact 
centre technologies with web and 
mobile applications for customers. 
Eckoh can enable businesses to interact 
with their customers through any 
contact channel they prefer including 
phone, web, mobile, smartphones 
and other devices. Services can also 
be highly personalised, recognising 
customers from previous interactions, 
and meeting their needs using 
information already known about 
them. This ensures that which ever 
channel the customer uses to interact, 
their experience remains consistent 
and their information and personal 
preferences are always available in real 
time.  case study: 
Utilita
Utilita is an independent UK company, licensed by Ofgem and 
Ofcom to supply gas and electricity, servicing some 15,000 
customers and growing. The Company wanted to offer their 
customers more choice in how they pay for gas and electricity. 
In particular, they wanted a way for pre-pay meter customers 
to make payments for electricity and gas, securely over the 
web and using their phone.
Utilita customers that have pre-pay meters can purchase 
electricity or gas using the EckohPAY web service. Customers 
are pre-identified through a unique meter ID detailed on their 
top-up card. The card authorisation and settlement is handled 
in real-time and the customer is issued with a code, which is 
sent via SMS directly to the meter to activate the purchased 
electricity or gas.
Customers can also register their mobile number online and 
when they want to ‘top-up’, they send an SMS message with 
their electric or gas card number and the amount they wish to 
pay to a dedicated shortcode. Once the details are validated 
and authorised, the customer is issued a code to activate the 
purchased electricity or gas.
W e wanted to implement 
technology to enhance the 
service we provide to our 
customers. Eckoh’s proven 
experience in our industry 
and customer-centric 
approach to their solutions 
provides us with every 
confidence that the service 
will continue to prove very 
successful both for our 
customers and for Utilita.
Bill Bullen  
Managing Director and Founder  
Utilita
ANNUAL REPORT
2013
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But it isn’t just the payment card industry or 
providers that want tighter security. Consumers 
are demanding more technology-based ways 
to keep their payment card details secure when 
paying over the phone and web. 
Owing to recent bad press, and bad 
experiences, consumers are now more aware of 
the measures they need to take to avoid identity 
theft and fraud, and are not prepared to take 
any risks with their personal information. 
Around one third of respondents admitted to 
being a victim of credit card fraud.
Many contact centres are changing their 
approach to how they deal with customer 
information to meet the pressure to comply 
with PCI DSS Standards. However, while most 
merchants are endeavouring to meet increasing 
customer security demands and protect 
their customers’ data, others do not see PCI 
compliance as a necessary step to achieve this.
Of contact centres surveyed in 2012, 93% 
either had a PCI Compliance programme 
underway or are planning one. The remaining 
7% admitted that they had no wish to become 
compliant but had made steps to increase the 
level of security around customer data. All 
contact centres tended to adopt one of the 
following strategies that had varying degrees of 
achieving PCI DSS compliance:
Denial – “Fraud won’t happen to us”
17% of contact centres only use basic 
security as their main fraud deterrent, using 
manual processes and training to ensure 
correct handling of payment information. 
When breached, it often spells financial and 
reputational disaster for the organisation 
involved.
Segmenting – separate payments areas, 
clean rooms, pausing recordings
42% of contact centres use additional security 
to segment the payment process within the 
contact centre. These methods may work and 
are used extensively however they are still open 
to human error. Additionally, standards and 
regulations are continually evolving, making 
gaps to achieve compliance ever wider.
Protecting – outsourcing the risk to PCI 
compliant service providers
13% of contact centres use external vendor 
technology, or third party cloud-based solutions 
that can be applied to the whole contact centre. 
Cloud-based solutions are proving to be the 
Payment Card Industry Data 
Security Standards (PCI DSS)
Since the PCI DSS were introduced in 2006, there has been increasing 
pressure on the contact centre industry to meet these standards. But while 
some merchants are embarking on compliance programmes, others are 
not treating it as high priority or changing their processes fast enough to 
meet industry standards. Some merchants are even choosing to ignore PCI 
compliance altogether, confident that their existing processes fulfil the 
criteria of secure phone payments.
EckohPROTECT 
Real-time payments 
with contact centre 
agents where card 
details are kept 
private.
In an independent study, Eckoh surveyed a sample of 1,000 UK consumers to gauge their attitude to making payments 
over the phone, with some interesting results.
  o  86% of consumers did not trust contact centre workers to keep their personal and card payment details secure 
when paying over the phone, believing that some agents may commit fraud by stealing their data. “I prefer talking 
to UK based centres, but still I don’t trust them enough to give them my card details over the phone.”
  o  Over half of consumers said that they would feel more secure if a technology based solution was involved in the 
contact centre agent transaction process. “If it’s an automatic system (and legitimate), there is no human who can 
pass on/steal my information.” most resilient form of PCI compliance available to contact 
centres. Of our sample, 9% of contact centres had adopted 
such solutions with a further 13% considering this approach 
as part of their future compliance programme.
Owing to the complexity of the annual PCI DSS audit, more 
contact centres are opting to outsource the requirement 
to PCI DSS service providers like Eckoh so that they can 
continue to run their core operation without distraction.
Eckoh is finding that their cloud- based payment solutions 
EckohPAY and EckohPROTECT are popular with clients and 
consumers alike, as callers can enter their card details using 
their telephone keypad and never have to pass their details 
verbally to someone they don’t know. EckohPROTECT 
ensures that the contact centre agent is never exposed to 
cardholder data but does allow them to stay on the phone 
with the caller while they process their payment. As well 
as maintaining a good customer experience, the system 
masks the card data on the agent screen and blocks the 
DTMF tones from being recorded allowing call recording to 
continue. For organisations who are required for regulatory 
reasons to have uninterrupted call recording this can be a 
critical requirement. 
As the Payment Card Industry Security Standards Council 
prefer to see robust technology based solutions, more 
organisations are realising the benefits of outsourcing this 
requirement for contact centres to Eckoh as it: 
  o helps to de-scope the PCI audit, and
  o  takes the burden of compliance away from the 
contact centre.
To make it easier for organisations to identify a compliant 
provider, Visa publishes a list of approved Level One Service 
providers. Eckoh has been a PCI DSS Level One compliant 
Service provider since 2010, taking over £300 million per 
year for clients.
case study: 
Kiddicare
Acquired by Morrisons in 2011, Kiddicare prides itself on delivering 
an outstanding hassle free shopping experience both in store and 
online. One such example is their extended next day delivery promise 
by allowing customers to place online orders as late as 7pm for 
guarantee delivery the following working day. Their commitment to 
their customers means they are now the UK’s number one online 
baby shop with 400,000 customers placing an order with them in 
the last 12 months.
Most of Kiddicare’s customers pay for goods online, but Kiddicare 
wanted to expand the shopping experience to offer payments via 
telephone. Aware of PCI DSS compliance, they wanted to ensure 
that any payments made by customers were secure and met Payment 
Card Industry regulations. They also wanted to offer the option of 
paying through their existing contact centre agents as well as an 
automated system.
By using Eckoh as their PCI DSS compliant service provider, Kiddicare 
is able to avoid a long and detailed part of the compliance process 
and quickly implemented a secure card payment service for their 
customers. In addition, EckohPROTECT enables callers to make 
payments with contact centre agents who can verbally guide them 
through the payment process.
EckohPROTECT is just 
what we were looking for 
at Kiddicare. W e were really 
impressed with Eckoh’s 
credentials, their PCI DSS 
Level One status and their 
confidence at meeting our 
challenging implementation 
deadlines. W e’re looking 
forward to providing a secure 
yet convenient payment service 
that delivers an excellent 
customer experience.
Ken Platt 
Head of Multi-Channel  
Morrisons.com
ANNUAL REPORT
2013
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Multi-channel Customer Service 
Solutions
As the largest provider of hosted, multi-channel 
customer service solutions, Eckoh helps large 
organisations increase the efficiency of their 
contact centres. By removing the more routine 
interactions from the contact centre, we not 
only make servicing customer contact activity 
more manageable, but we free up agents to 
handle more detailed calls or requests.
  o  EckohASSIST An advanced speech 
recognition solution that identifies a 
caller’s requirement by simply asking 
“How can I help you?”.
  o  EckohADDRESS – Captures name and 
address information and other personal 
data.
  o  EckohCOMMERCE – Ordering goods 
and services.
  o  EckohID&V – Identifies and securely 
verifies callers.
  o  EckohINFO – Provides callers with real-
time information (e.g. travel times)
  o  EckohLOCATE – Directs customers 
to stores or locations based on 
geographical location. 
  o  EckohSECURE – Authenticates callers 
and customers using voice biometrics.
  o  EckohSURVEY – Enables contact 
centres to quickly create and deploy 
automated questionnaires. 
PCI DSS Compliant Payment Solutions
As a Level One PCI DSS compliant service 
provider since 2010, Eckoh provides a range of 
hosted solutions to process secure credit and 
debit card payments. We reduce the scope of a 
PCI compliance audit by making organisations 
eligible to complete one of the shorter Self-
Assessment Questionnaire (SAQ) versions. This 
saves significant amounts of time and resources.
Agent Assisted Payments – the padlock 
for voice channels
  o  EckohPROTECT – a fully managed and 
hosted service that enables merchants 
to take payments securely over the 
phone through a contact centre agent. 
The agent can verbally guide the caller 
through the payment process, but the 
caller does not pass their details to the 
agent and card data is prevented from 
entering the contact centre environment. 
Automated 24/7 payments
  o  EckohPAY - an automated payment 
solution that enables your customers 
to make secure card payments through 
their landline, web, SMS or smartphone 
24 hours a day.
  o  EckohDONATE - a PCI DSS compliant 
solution especially developed for 
charitable organisations, that collects 
donations over the phone, web and 
mobile and includes gift aid verification 
to maximise donation value.
Service overview Our Technology
Eckoh continues to make significant investment in its 
VoiceXML cloud-based platform. Eckoh’s self-service  
platform delivers highly available, scalable and secure multi-
channel, self-service, automated solutions without the need 
for additional capital expenditure.  
  o  PCI DSS Level One audit scope includes all areas of 
Eckoh’s cloud offering.
  o  Deployed across multiple data centres the platform 
operates on an active-active basis ensuring resilience 
and scalable capacity for all services.
  o  Telephony connectivity is provided by the key tier one 
carriers and also supports OLO carrier termination and 
SIP .
  o  Web Connectivity provided by fully redundant links 
from multiple multi-homed ISPs.
  o  Fully meshed WAN connecting all sites.
  o  DR capabilities built in at core level with instant 
failover capabilities available.
  o  Bursting capacity available in an instant for 
unforeseen spikes and surges in inbound traffic.
Core technology is built on enterprise level 
technology, and Eckoh’s developed bespoke 
system layers:
  o  Holly Connects – VXML.
  o  Cisco networking.
  o  EMC storage.
  o  F5 load balancers.
  o  Nuance speech recognition – with all ports speech 
enabled and all main languages available.
  o  Eckoh bespoke secure build web and application 
server farms.
  o  Mobile and web hosted solutions make full use of 
existing resilient and secure components ensure a true 
end user multi-channel experience.
Eckoh’s product development and delivery teams have over 
a decade of experience delivering both bespoke automated 
solutions and developing packaged products to assist the 
contact centre industry.
What 
our clients think
For over 10 years, Eckoh has delivered self-
service speech and payment solutions for 
leading brands across an unmatched range 
of industry sectors. We now handle more 
interactions than any other company in our 
marketplace. These are just a few examples of 
what our clients say about us. 
National Rail Enquiries
“ Eckoh’s expertise, approach and 
professionalism are unquestionable 
and they have proven that they are the 
market leader in providing complex 
speech recognition services like 
TrainTracker .” 
  Chris Scoggins, Chief Executive Officer, 
National Rail Enquiries
Power NI
“ Eckoh’s service really does make it easy 
for our customers. W e’re confident that 
their solutions will continue to deliver 
the highest levels of customer service 
over the next three years.” 
 Graham Hunter, Power NI
Premier Inn
“ Eckoh brings a great deal of expertise 
in the complex area of PCI DSS 
compliance and network management 
and as a trusted supplier they were the 
natural choice for us.” 
  Siobhan Fagan, Head of Customer & Business 
Systems, Whitbread
Ideal Shopping
“Eckoh has proven over many years to 
be an extremely capable and reliable 
partner , consistently delivering the 
highest quality automated solutions. 
When you combine this with their 
innovative and flexible approach to our 
business, it made our decision to extend 
our relationship with them an easy one.” 
 Mike Hancox, Chief Executive Officer, ISD
ANNUAL REPORT
2013
19 In the second half of the financial year a large proportion 
of our new clients have now gone live resulting in an 
extremely strong performance in H2, which we have seen 
continue into the current financial year.
ANNUAL REPORT
2013
20 ANNUAL REPORT
2013
21
 SECTION
03
Business Review
22 Chairman’s Statement
22 Market Overview
24 Operational Review
27 Current Trading and Outlook
28 Financial Review
29 Board of Directors
30 Directors’ Report
35 Corporate Responsibility
38 Corporate Governance
42 Directors’ Responsibilities
43 Independent Audit Report ANNUAL REPORT
2013
22
“ W e enter the 
new financial 
year highly 
confident about 
the prospects for 
the Company 
and with an 
expectation 
that the growth 
of the business 
will continue 
to be reflected 
in increasing 
value for 
shareholders.”
I am pleased to be able to report on another period 
during which significant progress has been made by 
Eckoh. The key strategic focus over the past 12 months 
has been to promote our proposition in the payment 
sector, to use that capability to secure a high number 
of significant client wins and to establish partnerships 
with organisations that can assist us in accelerating the 
growth experienced in recent years.
Chairman’s Statement
We have been successful in both of these 
strategic initiatives with an unprecedented 
number of new clients being won during the 
financial year increasing the client base of 
the Company from 39 to 50 clients. Several 
of these new client wins have come through 
partnerships established with the likes of BT, 
Serco, Azzurri Communications and a global 
payment service provider. 
Going forward we would expect the trend 
of increasing client numbers to accelerate as 
these partner arrangements become further 
established. We are also excited about the 
prospects likely to be brought through our 
recently announced relationship with one of 
the UK’s leading providers of business process 
outsourcing and business process management 
solutions. The commitment shown to the 
relationship by the partner is such that we 
have been guaranteed a minimum level of 
revenue from the partner over the course of the 
initial three years of the agreement. The early 
signs are that opportunities being brought by 
the partner will result in some large contract 
wins which will render the minimum revenue 
guarantee redundant.
Historically we have always been successful in 
selling additional services to our client base with 
growth largely being split evenly between new 
client wins and additional services being sold 
to existing clients. We are confident that we 
will be successful selling additional services to 
this larger base whether it is payment services 
through other channels or more traditional 
speech solutions.
The increasing profitability of Eckoh has seen 
cash reserves increase to £8.5m at 31 March 
2013. This has enabled us to recommend a 
25% increase in dividend to 0.25p per share 
(FY12: 0.2p per share). We are now in a healthy 
position to consider more dynamic options 
towards achieving our growth aspirations.
We are delighted to be able to announce the 
acquisition of Veritape Limited, completed 
on 10 June 2013, (“Veritape”) for initial 
consideration of £6.3m rising to £10.6m 
provided Veritape are able to achieve profit 
before tax of £3.6m during the first twenty six 
months following acquisition. Veritape have 
quickly established their CallGuard proposition 
as an innovative proposition for rapidly de-
scoping call centres from the requirement of the 
Payment Card Industry Data Security Standards 
and with the minimum of disruption to the 
client. Veritape have also been successful in 
winning contracts of significant size outside of 
the UK. CallGuard is an ideal solution for those 
looking for a secure solution that does not 
involve payments being handled on a hosted 
basis by a third party such as Eckoh and as 
such is extremely complementary to the current 
Eckoh offerings.
The broadening of the client base has 
undoubtedly led to an increase in the workload 
undertaken by our employees. It is to their 
credit that satisfaction levels from our new 
clients have been extremely high and I would 
like to take this opportunity to thank the 
workforce for their efforts over the last twelve 
months. I was pleased that the results of the 
2013 Best Companies to Work For survey 
returned positive results with Eckoh being 
recognised as a two star employer by the 
employees responding to the survey.
We enter the new financial year highly 
confident about the prospects for the Company 
and with an expectation that the growth of 
the business will continue to be reflected in 
increasing value for shareholders.
Chris Batterham
Chairman
Chris Batterham We are delighted to report on another 
year of operational progress for the  
Group in which we extended our in-
direct channel relationships, broadened 
the number of clients taking multi-
channel services, generated significant 
levels of contract wins for our new 
payment solutions and saw record 
levels of new clients wins. 
Whilst our sales cycle on new prospects is 
becoming shorter than in previous years, it 
is still typical for a client to be contracted 
several months before their service goes live, 
triggering the flow of recurring revenue typically 
associated with our services and more than 
85% of the contract value. In the second half 
of the financial year a large proportion of our 
new clients have now gone live resulting in an 
extremely strong performance in H2, which we 
have seen continue into the current financial 
year.
Alongside this operational progress we have 
concluded a strategically important acquisition 
of Veritape Limited. This transaction will ensure 
that our payment solutions can continue to 
meet the demands of our expanding client base 
whilst accelerating the growth of the Company 
over a sustained period by opening up new 
overseas markets that we can service from our 
UK base. 
Market Overview
Our key target market continues to be those 
companies operating their own contact centres 
or using outsourced contact centre providers. 
It is a popular misconception that contact 
centres are in decline and only serve to answer 
incoming customer calls. In the UK alone there 
are over 5,500 contact centres with around 
780,000 agent seats and it is forecast that the 
outsourced sector will grow at around 4% 
per annum up to 2017*. Within these centres 
there is now a multiplicity of ways to interact 
with customers including proactive outbound 
contact, email, text, webchat and social media, 
and this is leading to a requirement that contact 
centre agents are skilled in a variety of activities. 
As a result the agent role is evolving into more 
of a ‘trusted advisor’. 
This trend is increasing the cost of training, 
recruiting and employing suitable employees, 
which is in turn seeing a growing need for 
companies to maximise the efficiency of these 
staff and ensure they are focused on the more 
complex and valuable activities. The wide 
variety of self-service multi-channel solutions 
that Eckoh supplies provides our clients with 
the ability to achieve this goal and to ensure 
that the touchpoints with their customers 
are personal, intuitive, effective and efficient. 
This means that where customers do need 
to interact with an advisor it is driven by the 
complexity of the enquiry rather than the need 
to complete or verify a rudimentary task. 
With UK contact centres processing over £2 
billion in credit card transactions annually 
they are an obvious target for external data 
attacks and have a heightened risk of fraud 
committed by insiders. In a OnePoll study 
of 1,000 adult consumers commissioned by 
Eckoh in December 2012, 85% of participants 
expressed concern that their card details could 
be stolen by a contact centre agent. According 
to Europol, in 2011 around 60% of payment 
card fraud losses, totalling 900 million euros, 
were caused by card-not-present fraud with the 
main sources of illegal data originating from 
data breaches.** Eckoh’s payment solutions 
enable organisations to achieve PCI DSS 
compliance much more easily and by removing 
card data from the agents themselves we also 
remove the risk of internal fraud. In 2011, 96% 
of those organisations who were victims of 
data breaches were found not to be PCI DSS 
compliant, emphasising the importance that PCI 
compliance has in preventing data attacks.
Of those organisations that were victims of data 
breaches in 2011, 96% who were subject to 
PCI DSS were not compliant, emphasising the 
importance of achieving compliance to prevent 
such breaches. ***
Business Review
* Contact Babel  
– The UK Contact 
Centre Decision  
Makers Guide 2012
** EUROPOL  
Situation Report - 
Payment Card Fraud 
2012
*** Verizon 2012  
Data Breach 
Investigations  
Report 
ANNUAL REPORT
2013
23
Nik Philpot ANNUAL REPORT
2013
24
Operational Review
We have been consistent in recent periods 
about where our strategic focus lies.  As our 
business expands, we remain focused on a 
number of strategic growth drivers:
  o  Maximise our Level One Payment Card 
Industry Data Security Standards (“PCI 
DSS”) status through our payment 
products EckohPROTECT and EckohPAY
  o  Continue to expand and strengthen our 
indirect sales channels whilst continuing 
to invest in our direct sales capabilities
  o  Increase incremental sales and cross 
selling opportunities from our existing 
customer base by expanding the range 
of multi-channel services 
  o  Continue to innovate through new 
product development to maintain our 
market leading position
  o  Focus on generating strong levels 
of organic revenue growth whilst 
continuing to evaluate bolt-on 
acquisition opportunities
To that end, we outline below the considerable 
progress the Group has made in these key 
areas.
Maximise our Level One PCI DSS Status
It is the demand in the payment sector that 
undoubtedly provides the greatest opportunity 
for the future growth of Eckoh. In the 2012/13 
financial year, 80% of the new contracts won 
were predominantly for payment services. 
Whilst these services are generally quicker 
to sell and implement than our traditional 
speech services and more latterly multi-
channel services, they do have a typically lower 
margin value. However, the payment services 
contribute significantly to the profitability of 
the Company and more importantly establish 
relationships with large organisations that 
enable us to cross sell our wider customer 
service solutions.
We continue to see a trend for organisations 
that take card payments to be put under 
increasing pressure by Banks and Payment 
Service Providers to become PCI DSS compliant. 
Given the PCI process can be both long 
and expensive by outsourcing to Eckoh, an 
accredited service provider, organisations can 
address the broader security concerns whilst 
reducing expenditure. 
The drive towards PCI compliance is still at the 
early stages with the majority of organisations 
and outsourced contact centres not yet having 
addressed the issue. The pressure applied by 
financial institutions will increase over the next 
few years presenting an exciting opportunity to 
Eckoh. The acquisition of Veritape announced 
today creates a broader ‘PCI DSS platform’ 
from which Eckoh can offer a full suite of 
solutions that can satisfy the requirements of 
any potential customer.
Expansion of Indirect Sales Channels 
and Investment in Direct Sales
Since renewing our strategic relationship with 
BT in October 2011 on a non-exclusive basis, 
we have been actively seeking to establish 
relationships with other channel partners in 
order to help us accelerate organic growth. 
Over the course of the past 12 months we have 
been able to announce a number of contract 
wins which have been assisted by these 
relationships.
In May 2012 we announced a Reseller 
Agreement with a leading Global Payment 
Service Provider who has assisted us in winning 
contracts for payment services with Kiddicare, 
the Chartered Institute of Management 
Accountants (CIMA) and a major high 
street retailer. We have also won contracts 
through our relationships with BT, Azzurri 
Communications and Serco during the period.
Going forward, we are confident that our most 
recently announced partnership with one of 
the UK’s leading providers of business process 
outsourcing (‘BPO’) and business process 
management (‘BPM’) solutions will deliver 
a large volume of high value opportunities. 
This agreement is unique amongst Eckoh’s 
indirect relationships in being underpinned by 
a minimum level of revenue, which indicates 
the level of confidence both parties have in the 
future success of the partnership.  ANNUAL REPORT
2013
25
The indirect channel is expected to increase 
the annual volume of new clients, but our 
direct channel continues to secure some of 
the largest and most significant contracts. The 
3-year agreement with Premier Inn for payment 
solutions, which started generating revenue at 
the end of January 2013, was the largest new 
contract that Eckoh secured during the period 
and is expected to make Premier Inn the second 
largest revenue-generating client this year.  The 
direct sales team which currently consists of four 
sales people will increase by 50% as a result of 
the Veritape acquisition and is supported by a 
larger marketing budget than the previous year. 
Expanding the Range of Multi-channel 
Services
Eckoh now has the ability to cross sell and upsell 
across a complementary suite of services to 
more clients than ever before.  Our sales teams 
have been very successful in following up initial 
deployments with further incremental sales 
growth through cross selling over the life of 
the contract.  Our heritage and reputation has 
been built on providing voice-based services, 
particularly those using speech recognition 
technologies and we are undoubtedly the market 
leader in this field. However, it is vital that Eckoh 
is recognised as a multi-channel provider to 
ensure that we are also considered by companies 
looking to deploy customer service solutions in 
any of the communication channels. 
Of the clients that Eckoh currently has under 
contract as might be expected the vast majority 
(96%) take services that are delivered over the 
voice channel. But 35% of these companies 
also take either web or mobile services and an 
additional 10% have a complete multi-channel 
solution. The payments area is leading the way in 
driving the uptake of multi-channel solutions, as 
it is common for new clients to contract initially 
with Eckoh for a telephony payment solution 
and for web and mobile payment solutions to be 
added shortly thereafter. Crucially for Eckoh, the 
business model of recurring revenue generated 
by minimum guaranteed levels of transactions 
extends successfully across multiple channels, as 
well as offering the client protection against any 
future channel shift from their customers. 
Innovate Through New Product 
Development
The design of our products increasingly looks to 
leverage the benefits that working with multiple 
channels provides. We have, for example, 
enhanced the Addison Lee booking service to 
utilise the geographical location of the mobile 
phone that the customer is calling from to 
pinpoint their pick up location more quickly. 
Whilst in turn we have provided the Addison 
Lee drivers a mobile service which allows them 
to check their status and to log on and off for 
jobs without needing to speak to the central car 
control unit. This has reduced contacts into the 
unit by around 80%.
EckohROUTE, our latest multi-channel product 
innovation that we are deploying into Premier 
Inn, will allow the client to manage through 
a web interface the way that their inbound 
calls are routed and distributed. This real time 
management tool delivers complete control to 
the client and ensures that their contact centre 
operations are utilised as efficiently as possible. ANNUAL REPORT
2013
26
Consumers in this multi-channel world expect 
customer service to be agile, starting an 
interaction in one communication channel 
and being able to complete it in another. The 
interaction needs to convey consistent and 
personalised data to the customer irrespective 
of their choice of touchpoint. This is more 
challenging to achieve than it sounds, but if 
companies choose to work with a single multi-
channel supplier such as Eckoh, the sharing 
and interrogation of the data to enhance the 
customer’s experience is more straightforward 
and at a lower cost to the business. It is vital 
that we can demonstrate tangibly our vision 
of ‘seamless’ customer service, so this year 
we are increasing our investment in research 
and development to ensure that our product 
development keeps ahead of the pace of 
change within the area of customer contact. 
Acquisition of Veritape 
On June 11th 2013 we announced the 
acquisition of Veritape, a UK based specialist 
in PCI DSS compliant call recording software 
and on premise secure payment solutions. We 
believe that this acquisition provides Eckoh with 
the ability to offer a complete PCI compliant 
payment solution whatever the requirements.  
Our experience in successfully selling our 
EckohPAY and EckohPROTECT hosted payment 
solutions to our client base leads us to believe 
an even broader payment portfolio will offer 
significant opportunities for incremental sales 
growth.
The initial consideration comprises of £5.2m 
payable in cash funded by existing cash 
resources from the combined entity and 
£1.1m payable by the issue of 7,095,044 new 
Eckoh ordinary shares. Additional deferred 
consideration of up to a maximum of £4.3m, 
payable in cash of £1.7m and new Eckoh 
ordinary shares of £2.6m, is dependent on the 
achievement of certain profit before tax targets. 
To earn the entire deferred consideration a 
profit before tax of £3.6m must be achieved 
over the 26 month period beginning 1 July 
2013.
Veritape’s main payment offering ‘CallGuard’ 
is a solution which is self-installed on a client’s 
premises which immediately enables payments 
to be made over the telephone without credit 
card details being shared with the agent or 
stored by the call recording software. The 
simplicity of CallGuard has enabled Veritape to 
successfully sell their solution in both the UK 
and overseas with over half their business in 
the last 12 months coming from international 
markets. Eckoh believe that Veritape can assist 
Eckoh in globalising our own proposition.
Whilst CallGuard has driven much of the 
growth in the past two years, Veritape also 
have a well-established call recording solution 
that we believe can be combined with Eckoh’s 
speech recognition platform to assist us in 
answering a growing demand for speech 
analytic solutions. 
In addition to these products, Veritape have also 
developed ‘OneProx’ that will allow merchants 
to be de-scoped completely from cardholder 
data, which can reduce the costs of PCI DSS 
compliance considerably. Importantly, OneProx 
requires no integration with existing payment 
processes or IT systems, and avoids complex and 
time-consuming implementation projects.
With over 70 clients, including Carnival plc,  
E.ON, Ford, Connextions, Trulia, Jaguar 
LandRover, LBM and Atos Origin, already using 
a Veritape solution this provides an immediate 
cross selling opportunity for Eckoh’s multi-
channel solutions and the breadth of payments 
solutions that Eckoh will now be able to provide 
on an international basis clearly supports the 
rationale for combining these two growing 
companies. Our experience in 
successfully selling 
our EckohP AY and 
EckohPROTECT hosted 
payment solutions to our 
client base leads us to 
believe an even broader 
payment portfolio 
will offer significant 
opportunities for 
incremental sales growth.
ANNUAL REPORT
2013
27
Current Trading and Outlook
Eckoh experienced an extremely strong period of 
trading during the second half of 2012/13 with 
a record number of new clients being deployed, 
which will generate recurring revenues over the 
full twelve month period ahead.  
The positive momentum generated from the 
new indirect sales channels has led to a sales 
pipeline value that is at its highest ever level, 
fuelled by both our payment solutions and our 
multi-channel customer service portfolio.  The 
addition of Veritape will broaden our customer 
base, extend our product range and allow us 
to sell more easily to international markets.  
This earnings enhancing acquisition will offer 
immediate cross selling opportunities for Eckoh 
and will further strengthen an already buoyant 
sales pipeline.
The combination of these factors gives the Board 
every confidence that the growth seen in recent 
periods will continue in the current year and 
beyond. ANNUAL REPORT
2013
28
Financial Review
Revenue and Margin
Revenue increased by 6% to £11.0m (2011/2: 
£10.4m) in the year while the gross margin 
remained at 76% resulting in a 5% increase in 
margin to £8.3m (2011/2: £7.9m). The quality 
of these revenues has improved considerably 
with an active base of 50 different clients 
(2011/2: 39) at the end of the financial year 
and being represented by 88% by revenue of a 
recurring nature (2011/12: 87%).
Profitability Measures
Despite servicing a rapidly increasing number 
of clients, Eckoh continues to benefit from 
beneficial levels of operational gearing. The 
table below indicates that revenue has increased 
by 65% over the past five financial years 
and margin has increased by £4.0m or 94%. 
Over the same period adjusted administrative 
expenses have only increase by £1.6m or 31%. 
This has led to an increase in adjusted operating 
profit from a loss of £0.9m to a profit of £1.5m.
 Year ended Year ended Year ended Year ended Year ended  
 31 March 31 March 31 March 31 March 31 March 
 2013 2012 2011 2010 2009 
 £’000 £’000 £’000 £’000 £’000
Turnover 10,985 10,392 9,003 7,923 6,674
Gross profit 8,294 7,895 6,663 5,697 4,279
Administrative Expenses 7,180 6,788 6,036 6,231 6,034
Expenses relating to share options schemes (375) (150) (75) (44) (53)
Non Recurring Administrative Expenses - - - (653) (811)
Adjusted* Administrative Expenses 6,805 6,638 5,961 5,534 5,170
Operating profit / (loss) 1,114 1,107 627 (534) (1,755)
Adjusted* Operating profit / (loss) 1,489 1,257 702 163 (891)
 2013 2012 2011 2010 2009 
 £’000 £’000 £’000 £’000 £’000
Profit before tax 1,188 1,256 (615) (197) (1,373)
Amortisation of intangible assets 276 349 290 157 121
Depreciation 656 505 446 529 474
Expenses relating to share options schemes 375 150 75 44 53
Net interest receivable (74) (49) 1,104 (337) (382)
Adjusted EBITDA 2,421 2,211 1,300 196 (1,107)
*excludes non-recurring administrative expenses and expenses relating to share options schemes
This increase in profitability is further reflected in the cash generation seen from the business. Over 
the past five financial years, the company has converted a Loss before Interest, Tax, Depreciation 
and Amortisation of £1.1m to an EBITDA of £2.4m. 
This trend in profitability and cash generation 
has seen Eckoh accumulate cash and short 
term investments of £8.5m at 31 March 
2013 (31/3/12: £6.4m). Having a large cash 
reserve gives comfort to many of the blue chip 
organisations that Eckoh contract with that it is 
financially secure. The Veritape transaction will 
result in an immediate cash outflow of £4.0m, 
but will allow us to retain an appropriate cash 
reserve. A dividend of 0.25p per share (FY12: 
0.2 pence per share) will be recommended to 
shareholders and will result in a further cash 
outflow of £0.5m. Board of Directors
Chris Batterham – Non-executive Chairman
Chris qualified as an accountant with Arthur Andersen and has significant 
experience in the technology based business environment, including 
the flotation of Unipalm on the London Stock Exchange. Currently on 
the boards of a number of companies including SDL plc, Iomart plc and 
Office2Office plc, Chris brings a wealth of experience in the strategic 
development of companies in the IT sector.
Nik Philpot – Chief Executive Officer
Nik joined the Board in February 1999, appointed COO and Deputy CEO 
in September 2001 and appointed CEO in September 2006. Nik was a co-
founder of Symphony Telecom and formerly worked for British Telecom. 
As a founder of Eckoh he has created the UK’s largest provider of multi-
channel customer service and secure payment solutions for the contact 
centre industry. Nik has over 25 years experience in the voice services 
industry.
Adam Moloney – Group Finance Director
Adam has been Finance Director at Eckoh for nine years and has seen 
the Group through a period of continuous change over that time. Prior 
to joining the company in 2003 he worked in senior financial roles for 
a number of organisations and immediately prior to joining Eckoh, was 
Manager of Finance and Operations for the UK arm of New York based IT 
hardware reseller, Resilien Inc.
Clive Ansell – Non-executive Director
Clive joined the Board in July 2009 and is currently the CEO of Systems 
and Applications at Tribal Group plc. Formerly, he had held several senior 
executive and strategic roles at BT, worked as a Strategic Consultant to 
the Board of Royal Mail, spent three years as an Executive Board Director 
of Japan Telecom, and led major M&A projects in the US. Clive is an 
Oxford graduate, a Non-executive Director of Arqiva, the communications 
infrastructure and media services company and sits on the boards of a 
number of charities and business representative groups.
ANNUAL REPORT
2013
29 ANNUAL REPORT
2013
30
The Directors of Eckoh plc present their annual 
report, together with the audited financial 
statements of the Company and the Group for 
the year ended 31 March 2013.
Principal Activity 
The principal activity of Eckoh plc and its 
subsidiary undertakings (“the Group”) is the 
provision of speech recognition services and 
outsourced automated solutions for customer 
contact centres. The Chairman’s Statement 
(page 22) and the Business Review (pages 22 to 
26) report on the progress made in the financial 
year under review.
The principal subsidiary undertakings are listed 
on page 64.
Results and Dividends 
The audited financial statements and related 
notes for the year ended 31 March 2013 are 
set out on pages 46 to 71. The Group’s profit 
for the year is set out in the Consolidated 
Statement of Comprehensive Income on  
page 46. 
The Group’s financial risk management is 
discussed in note 3. The Directors’ regularly 
assess the Group’s key commercial risks, which 
are considered to be the competitive market 
sector and the stability of the infrastructure 
which supports the Group’s products and 
services. Commercial risks are managed through 
the introduction of new products and services 
and by maintaining high levels of customer 
service. Infrastructure stability is managed 
through 24 hour technical monitoring and an 
approach to continuous improvements of the 
operations of the Group.
Post Balance Sheet Events 
On 10 June 2013, the Group completed the 
acquisition of Veritape Limited, a provider of 
PCI DSS compliant call recording software and 
on premise secure payment solutions for initial 
consideration of £6.3m.
The initial consideration comprises of £5.2m 
of initial cash consideration to be funded by 
existing cash finances from the combined entity 
and £1.1m payable in Eckoh shares. Additional 
deferred consideration of up to £4.3m payable 
in cash of £1.7m and £2.6m of Eckoh shares 
dependent on the achievement of profit before 
tax targets can be earned. To earn the entire 
deferred consideration, profit before tax of 
£3.6m must be achieved over the first 26 
month period following 1 July 2013.
As the acquisition was finalised on the day that 
the accounts were signed, completion accounts 
have yet to be prepared and full disclosure 
cannot be provided in these statements.
Also, post year end the Directors are 
recommending a dividend for the year of 
0.25 pence per share that will be paid on 20 
September 2013 to shareholders on the register 
at 23 August 2013, subject to approval at the 
Company’s Annual General Meeting on 14 
August 2013. Based on the shares in issue at 
the year end, this payment would amount to 
£0.5m.
Directors’ Report ANNUAL REPORT
2013
31
Research and Development 
The Group capitalised £0.2m (2012: £0.1m) 
of development expenditure during the year. 
The majority of this cost arose from the effort 
required to develop the product range along 
with enhancements to client services.
Financial Instruments 
The financial instruments of the Group are set 
out in the Notes to the Financial Statements 
on pages 50 to 72. Please refer to note 2 for 
a summary of principal accounting policies; 
to note 3 for the Group’s financial risk 
management policies in relation to liquidity risk 
or cash flow risk, interest rate risk and foreign 
currency risk, as well as capital management; 
to note 16 for credit risk and loans and 
other receivables; to note 17 for short-term 
investments; to note 18 for cash and cash 
equivalents and to note 19 for trade and other 
payables.
Related Party Transactions 
Related party transactions are disclosed in note 
24.
Significant Accounting Policies
The Significant Accounting Policies applied 
to the consolidated financial statements are 
included within note 2.
Annual General Meeting 
The next Annual General Meeting of the 
Company will be held at 11:00 am on 14 
August 2013. Details of the business to be 
proposed at the Annual General Meeting are 
contained within the Notice of Meeting, which 
accompanies this Report.
Directors 
The current Directors of the Company are 
shown on page 29. 
The articles of association require that at the 
Annual General Meeting one third, or as near as 
possible, of the Directors will retire by rotation. 
C M Batterham will retire by rotation and puts 
himself forward for re-election at the Annual 
General Meeting. 
Directors’ Interests 
The interests of the Directors in the share capital 
of the Company and their options in respect 
of shares in the Company are shown below. 
No Director has had any material interest in 
a contract of significance (other than service 
contracts) with the Company or with any 
subsidiary company during the year.
Directors’ Interests in Shares 
The interests, all of which are beneficial, of the 
Directors (and their immediate families) in the 
share capital of the Company are set out below:
 11 June 2013 31 March 2013 1 April 2012 
 Ordinary shares Ordinary shares Ordinary shares 
 of 0.25 pence each of 0.25 pence each of 0.25 pence each
N B Philpot (i) 4,379,873 4,379,873 3,052,000
A P Moloney 472,705 472,705 135,000
C M Batterham 950,000 950,000 750,000
Notes:
(i) N B Philpot’s spouse is the beneficial owner of 80,000 shares which are included above. ANNUAL REPORT
2013
32
Directors’ Share Options 
The Directors’ interests in share options are shown in the following table:
 Note At 1 April Granted in Forfeited Exercised At 31 March Exercise Earliest Latest 
  2012  year in year in year 2013 price date for date for 
  (number)  (number) (number)  (number) (number) (pence) exercise exercise
N B Philpot b 3,000,000 - - 3,000,000 - 6.50 27.06.05 27.06.12
 a 380,710 - - 380,710 - 7.88 07.10.07 07.10.14
 b 337,702 - - 337,702 - 7.88 07.10.07 07.10.14
 b 1,000,000 - - 1,000,000 - 8.75 13.09.08 13.09.15
 c 800,000 - - 800,000 - 8.75 31.07.10 31.07.17
 b 200,000 - - 200,000 - 8.75 31.07.10 31.07.17
 b 1,000,000 - - - 1,000,000 5.13 05.03.13 05.03.20
 d 3,000,000 - 3,000,000 - - 0.25 30.06.13 30.06.20
 d 150,000 - 150,000 - - 0.25 30.06.13 30.06.20
 e 380,643 - - 380,643 - 0.00 30.06.12 30.06.21
 e 380,643 - - - 380,643 0.00 30.06.13 30.06.21
 e - 247,000 - - 247,000 0.00 30.06.13 30.06.22
 e - 247,000 - - 247,000 0.00 30.06.14 30.06.22
 f - 2,843,988 - - 2,843,988 0.00 01.01.14 01.01.23
 f - 2,843,989 - - 2,843,989 0.00 01.01.15 01.01.23
 f - 2,843,989 - - 2,843,989 0.00 01.01.16 01.01.23
 g - 4,265,983 - - 4,265,983 0.00 01.01.16 01.01.23
 
A P Moloney a 250,000 - - 250,000 - 8.50 28.02.08 28.02.15
 b 750,000 - - 750,000 - 8.75 13.09.08 13.09.15
 c 900,000 - - 900,000 - 8.75 31.07.10 31.07.17
 b 100,000 - - 100,000 - 8.75 31.07.10 31.07.17
 b 1,000,000 - - - 1,000,000 5.13 05.03.13 05.03.20
 d 1,846,153 - 1,846,153 - - 0.25 30.06.13 30.06.20
 e 238,020 - - 238,020 - 0.00 30.06.12 30.06.12
 e 238,020 - - - 238,020 0.00 30.06.13 30.06.13
 e - 167,200 - - 167,200 0.00 30.06.13 30.06.22
 e - 167,200 - - 167,200 0.00 30.06.14 30.06.22
 f - 1,421,994 - - 1,421,994 0.00 01.01.14 01.01.23
 f - 1,421,994 - - 1,421,994 0.00 01.01.15 01.01.23
 f - 1,421,995 - - 1,421,995 0.00 01.01.16 01.01.23
 g - 2,132,992 - - 2,132,992 0.00 01.01.16 01.01.23
The information contained in this table has been audited.  Notes:
a)  Granted under the Inland Revenue 
approved Appendix to the Eckoh plc Share 
Option Scheme (1999). The performance 
target attaching to these options is that 
the closing price of a share, on any day 
following the third anniversary of the date 
of grant, must be greater than the exercise 
price of the Option by RPI plus 15%.
b)  Granted under the Eckoh plc Share Option 
Scheme (1999) but not qualifying for 
Inland Revenue approval. The performance 
target attaching to these options is that 
the closing price of a share, on any day 
following the third anniversary of the date 
of grant, must be greater than the exercise 
price of the Option by RPI plus 15%.
c)  Granted under the Eckoh plc 2007 
Enterprise Management Incentive (“EMI”) 
Share Option Plan. The Performance target 
attached to these options is satisfied if 
the percentage growth in the Earnings 
per Share (before exceptional items and 
intangible asset amortisation) over the 
Prescribed Period comparing the Basis Year 
with the Latest Year is at least 5 per cent 
(compounded) per annum higher.
d)  Shares that will ultimately vest are subject 
to the satisfaction of stretching Earnings per 
Share and Total Shareholder Return targets. 
All awards made under this plan were 
forfeited by participants during the year and 
replaced by awards made under the 2012 
Eckoh plc Long Term Incentive Plan.
e)  Granted under the 2010 Eckoh plc Bonus 
plan. Half of the bonus awards made to 
executives in respect of the two most recent 
financial years were made in the form of 
deferred shares with the calculation for the 
year ending 31 March 2012 to be finalised 
on 30 June 2012 (“calculation date”). 
The table to the left shows an estimate of 
the number of shares to be awarded at 
that date based on the share price at the 
year end. The deferred shares will vest in 
tranches of 50% on the first and second 
anniversary of the calculation date. Further 
details are available in the Remuneration 
report on page 40.
f)  Granted under the 2012 Eckoh plc Long 
Term Incentive Plan (“2012 LTIP”). The 
number of shares that will ultimately vest 
are subject to the satisfaction of share price 
targets. 
g)  Granted under the 2012 Eckoh plc Long 
Term Incentive Plan (“2012 LTIP”). The 
number of shares that will ultimately vest 
are subject to the achievement of stretching 
share price targets at the conclusion of the 
three year vesting period.
Share Capital and Reserves 
Details of changes in the authorised and issued 
share capital and reserves of the Company are 
shown in note 20 to the financial statements.
Share Schemes 
The Directors believe that a key element in 
attracting, motivating and retaining employees of 
the highest calibre is employee involvement in the 
performance of the Group through participation in 
share schemes. By doing so, the Directors believe 
that employees’ interests will be aligned with those 
of shareholders. Details of options granted under 
the share option schemes are set out in note 22 to 
the financial statements. All permanent employees 
are eligible to join a scheme.
Payments to Creditors 
The Company and its subsidiaries have a variety 
of payment terms with their suppliers. The Group 
agrees payment terms with its suppliers when it 
enters into binding purchasing contracts for the 
supply of goods and services. The Group seeks to 
abide by these payment terms when it is satisfied 
that the supplier has provided the goods or 
services in accordance with the agreed terms and 
conditions. At 31 March 2013 the amount of trade 
creditors shown in the balance sheet represents 65 
days of average purchases for the Group (2012: 69 
days). The Company had no trade creditors at 31 
March 2013. 
Statement of Disclosure of Information  
to Auditors 
As far as the Directors are aware there is no 
information relevant to the audit of which the 
Company’s auditors are unaware and the Directors 
have taken all steps that they ought to have taken 
as Directors in order to make themselves aware 
of any such relevant information and to establish 
that the Company’s auditors are aware of that 
information.
ANNUAL REPORT
2013
33 ANNUAL REPORT
2013
34
Auditors 
Our auditors, KPMG Audit Plc has instigated 
an orderly wind down of business. The Board 
has decided to put KPMG LLP forward to 
be appointed as auditors and resolution 
concerning their appointment will be put to the 
forthcoming AGM of the Company.
Shareholder Relations 
The Company holds meetings with its major 
institutional investors and general presentations 
are given covering the interim and preliminary 
results. The Chairman, C M Batterham, has 
met with shareholders and brokers during the 
period under review. The Chairman is available 
to attend presentation meetings and other 
presentations on an ongoing basis. All Directors 
have access to the Company’s nominated 
advisors who give feedback from shareholders 
and receive copies of broker update documents.
All shareholders have the opportunity to raise 
questions at the Company’s Annual General 
Meeting, or leave written questions, which will 
be answered in writing as soon as possible. At 
the meeting the Chairman will give a statement 
on the Group’s performance during the year, 
together with a statement on current trading 
conditions. 
In addition to regular financial reporting, 
significant matters relating to the trading or 
development of the business are disseminated 
to the market by way of Stock Exchange 
announcements. The Company’s Annual Report 
and Accounts, Interim Statements and other 
major announcements are published on the 
Company’s corporate web site at  
www.eckoh.com.
Going Concern 
Under company law, the Company’s Directors 
are required to consider whether it is 
appropriate to prepare financial statements on 
the basis that the Company and the Group are 
a going concern. As part of its normal business 
practice the Group prepares annual and longer 
term plans and, in reviewing this information, 
the Company’s Directors are satisfied that the 
Group and the Company have reasonable 
resources to enable them to continue in 
business for the foreseeable future. For this 
reason the Company and the Group continue to 
adopt the going concern basis in preparing the 
financial statements. ANNUAL REPORT
2013
35
In the Workplace
Eckoh believes that its employees are the source 
of its competitive advantage and a valuable 
asset to the business. We recognise that 
continued and sustained improvement in the 
performance of the Group depends on its ability 
to attract, motivate and retain people of the 
highest calibre.
Eckoh is an equal opportunities employer. 
No applicants or employees will be unfairly 
discriminated against on the grounds of criteria 
unrelated to their job performance. We are 
proud of our high staff retention level and we 
often see people return to Eckoh after a short 
time of leaving the business.
Our people are proud to work for Eckoh 
which is demonstrated in its Best Companies 
Accreditation status. In 2013 we were awarded 
Two Star ‘outstanding’ status which recognises 
the strength of the Company’s working 
practices and employee care. We are also 
profiled in the Best Companies Guide 2012, 
an annual reference report that offers a unique 
insight into the UK’s top employers.
Development
We encourage our people to develop 
their skills and keep up to date with new 
technology, standards and processes. To build 
a high performance culture at Eckoh and 
support advancement, we have introduced 
a programme of training and development 
which is offered to every employee within the 
business. 
Our investment in staff helps to retain and 
motivate our people, as well as assisting high 
achieving employees to progress and flourish in 
their role. 
Communication
We maintain our enthusiastic and motivated 
workforce through effective two-way 
communication. Staff members are regularly 
informed of matters, both positive and 
negative, that are affecting the business. 
This news is relayed with a feedback request 
through monthly presentations to staff by 
Directors and regular email bulletins. Managers 
are also encouraged to share progress 
information within team briefings. 
Health, Safety and Accessibility
The health, safety and wellbeing of the people 
on our premises are our highest priority. 
We hold regular risk management reviews 
which scrutinise the safety of our working 
environment. We actively encourage staff to 
protect each other from potential harm and be 
aware of their surroundings, mitigating any risk 
of slips, trips or falls.
For employees or guests with reduced mobility, 
our offices are fully accessible with elevators 
to each floor. For those who choose to cycle 
or run as part of their daily commute, we 
have provided showers for their use and 
convenience. We actively encourage a healthy 
lifestyle and we have partnered with three local 
fitness centres that offer Eckoh discounted 
memberships.
Corporate Responsibility
Our Business
Eckoh is committed to running the business in an ethical and responsible 
manner and we focus our efforts on three distinct areas: workplace, 
community and environment. ANNUAL REPORT
2013
36
Voice
Following a series of fundraising initiatives, we 
presented a cheque for £6,568.76 for Voice, a 
national charity that aims to improve the lives of 
over 64,000 children and young people in care. 
Voice works directly with over 5,000 young 
people each year and all 64,000 children and 
young people in care benefit indirectly from the 
campaigning work. Voice also supports other 
professionals in the childcare field to improve 
practice by providing specialist advice and 
training services.
Iain Rennie Hospice at Home
During the year, Eckoh raised over £1,500 for 
our nominated charity, Iain Rennie Hospice 
at Home. The Hertfordshire based charity 
supports local families affected by life-limiting 
illness so that patients of all ages can stay at 
home for as long as possible. The charity was 
voted by Eckoh people as many had a personal 
connection to Iain Rennie Hospice, having 
helped staff and family members through some 
difficult times. Staff decided to donate money 
that would usually spent on Christmas cards to 
the charity. 
Make A Wish Foundation
The opening week of two blockbuster films 
was an exceptionally busy time for Eckoh’s 
contact centre which takes bookings for Vue 
Cinemas. However, the contact centre team 
decided to mark the occasion with a charity 
fund raising day themed around the “Skyfall” 
and “Twilight” movies. A day of fancy dress 
and various activities including games, cooked 
breakfast and cakes sale, movie poster auction, 
a raffle, quizzes and competitions all helped to 
raise over £500 for Make a Wish Foundation. 
Make a Wish Foundation was chosen by the 
contact centre team as it grants the wishes of 
children and young people aged between three 
and 17 that live with life threatening illnesses.
Comic Relief
On 15th March 2013, 60 employees, friends 
and family members at Eckoh dressed in 
‘onesies’ and red noses to take calls on a 
voluntary basis for Comic Relief. Between 6pm 
and midnight, over 1,800 calls had been taken. 
Each year, Comic Relief relies on the contact 
centres of organisations and businesses around 
the country to boost the number of lines 
available for public donations. Eckoh wanted 
to take part this year to show its support, and 
had a fantastic response from employees for 
volunteers to give up their time to work into the 
night and raise money for Red Nose Day.
During the year, Eckoh has made charitable 
donations totalling £6,024 (2012: £2,531). The 
business of the Group does include the support 
of charities and their fund raising programmes, 
but this is operated solely on a commercial 
basis. 
In the Community
Eckoh recognises the importance of giving something back to the local 
community, as well as supporting national causes. ANNUAL REPORT
2013
37
In the Environment 
Although operationally we do not manufacture 
products, Eckoh understands the impact 
our business can have on the environment. 
From the efficient lighting in our offices to 
the Fairtrade coffee in our kitchen areas, we 
carefully consider the purchases we make 
and encourage our suppliers to be equally 
considerate in the way they conduct their 
business. 
Eckoh has taken the following steps to 
ensure that we are doing all we can for the 
environment and to set a good example to 
those who we come into contact with:
  o  Reduced business travel through the use 
of web and phone based conferencing 
systems
  o  Energy efficient and motion sensor 
lighting in our offices
  o  Comprehensive recycling programmes in 
all possible locations
  o  Photo copiers set to double-sided, black 
and white printing to reduce paper/ink 
use
  o  Provide reusable cups and glasses to 
reduce waste associated with disposable 
cups
  o  Encourage alternative methods of 
transport to travel to and from work e.g. 
cycle to work scheme.
By order of the Board
Adam Moloney 
Company Secretary
10 June 2013
Eckoh understands the impact our business can have 
on the environment. From the efficient lighting in our 
offices to the Fairtrade coffee in our kitchen areas . . . Compliance Statement 
The Board of Eckoh plc recognises its 
responsibilities to maintain high standards 
of corporate governance throughout the 
Group. The Board continues to give careful 
consideration to the principles of corporate 
governance as set out in the UK Corporate 
Governance Code published by the Financial 
Reporting Council, although as a company 
listed on AIM it is not required to comply with 
the UK Corporate Governance Code. The 
Company is committed to complying with 
the UK Corporate Governance Code so far 
as is practicable and appropriate for a public 
company of its size and nature. 
Board of Directors 
The Chairman is responsible for the effective 
running of the Board of Directors. The Board 
currently has four members, comprising the 
Non-Executive Chairman, the Chief Executive, 
the Group Finance Director and a Non-executive 
Director. The Board has considered the 
independence of its Non-Executive Chairman, 
C M Batterham, and after due consideration, 
has concluded that he is independent. He 
does not have any involvement in the day-
to-day management of the Company or its 
subsidiaries.
The biographical details of the Board members 
are set out on page 29. 
There is a schedule of formal matters specifically 
reserved for the full Board’s consideration, 
including a policy enabling Directors to 
take independent professional advice in the 
furtherance of their duties at the Company’s 
expense. The Board programme is designed 
so that Directors have a regular opportunity to 
consider the Group’s strategy, policies, budgets, 
progress reports and financial position and to 
arrive at a balanced assessment of the Group’s 
position and prospects. In addition, strategic 
developments are on the agenda at each Board 
meeting and are subject to further ad hoc 
review by the Board as triggered by relevant 
external factors. Also, where appropriate, the 
Board programme also includes a day set aside 
purely for strategic review and planning.
The Company has a clear division of 
responsibility between the roles of Chairman 
and Chief Executive within the business.
The Non-Executive Chairman has a responsibility 
to ensure that the strategies and policies 
proposed by the Executive Directors are fully 
discussed and critically examined, not only 
with regard to the best long-term interests of 
shareholders, but also having regard to the 
Company’s relationships with its employees, 
customers and suppliers. The Board and its 
Committees are supplied with information 
and papers to ensure that all aspects of the 
Company’s affairs are reviewed on at least an 
annual basis. 
Day-to-day management of the business is 
delegated to the Management Team, consisting 
of the two Executive Directors and certain 
senior managers, who meet monthly. The Board 
is dependent on the Management Team for 
the provision of accurate, complete and timely 
information and the Directors may seek further 
information where necessary. The Chairman 
is responsible for ensuring that all Directors 
are properly briefed on issues arising at Board 
meetings.
Under the Company’s articles of association, 
each year at least one third of the Directors 
must retire and submit themselves for re-
election by the shareholders at the Annual 
General Meeting. The communication 
accompanying the Company’s Notice of Annual 
General Meeting sets out reasons for the 
Board’s belief that the individual should be re-
elected.
Board Committees 
Certain responsibilities are delegated to the 
Remuneration and Audit Committees. Both 
committees have written terms of reference, 
which define their authorities, duties and 
membership. 
Corporate Governance
ANNUAL REPORT
2013
38 Audit Committee Report
The Audit Committee is responsible for 
reviewing the following:
  o  accounting procedures and controls;
  o  financial information published by the 
Group, including the Annual Report, 
Preliminary & Interim Statements and on 
the Company’s website;
  o  risk management and the effectiveness 
of the Group’s system of internal 
financial control;
  o  the terms of reference for the Group’s 
external valuers; and
  o  the results and effectiveness of the 
Company’s external audit.
The Audit Committee formally met once during 
the period under review, with no absentees. 
A P Moloney, the Group Finance Director, 
attends all Audit Committee meetings by 
invitation and provides advice to the Committee 
where appropriate. The Chief Executive was 
invited to and attended the meeting. The 
Company’s auditor attended the meeting and 
the Committee considered reports issued by 
them. The auditor has direct access to the 
Audit Committee without the presence of an 
Executive Director. The Committee reviews the 
effectiveness of the Company’s internal financial 
controls by reference to reports from the 
external auditors. The Committee also reviews 
the scope and results of the external audit as 
well as its cost effectiveness.
The Audit Committee annually reviews the 
requirement for an internal full-time audit 
function. The Committee has decided that 
none is necessary at present. Instead, other 
monitoring processes have been applied to 
provide assurance to the Board that the system 
of internal control is functioning satisfactorily. 
Internal controls are discussed under the 
internal control and risk management section 
below.
Internal Control and Risk Management 
The Directors formally acknowledge their 
responsibility for establishing effective internal 
control within the Company. In this context, 
control is defined as those policies, processes, 
tasks and behaviours established to ensure 
that business objectives are achieved most cost 
effectively, assets and shareholder value are 
safeguarded and laws, regulations and policies 
are complied with.
The Board has put in place a system of internal 
controls, set within a framework of a clearly 
defined organisational structure, with well 
understood lines of responsibility, delegation 
of authority, accountability, policies and 
procedures, which is supported by training, 
budgeting, reporting and review procedures.
A long-term business plan and an annual 
operating budget are prepared by management 
and are reviewed and approved by the Board 
prior to the commencement of each financial 
year. Monthly reporting and analysis of results 
against budget, risk assessment and related 
internal controls and forecasts are received, 
discussed by management and reported 
formally to the Board. Informal reviews take 
place more frequently.
There are ongoing processes for identifying, 
evaluating and managing the Company’s 
significant risks and related internal controls 
which are integrated into the Company’s 
operations. Such processes are reported to, 
and reviewed by, the Board at each meeting. 
These processes have identified the risks 
most important to the Company (business, 
operational, financial and compliance), 
determined the financial implications, and 
assessed the adequacy and effectiveness of their 
control. The reporting and review processes 
provide routine assurance to the Board as to 
the adequacy and effectiveness of the internal 
controls. 
ANNUAL REPORT
2013
39 Notes:
(i) C Ansell was appointed as a Non-Executive 
Director on 7 July 2009.
(ii)   C M Batterham was appointed as Non-
Executive Director on 15 July 2009 and 
further appointed as Non-Executive 
Chairman on 11 September 2009.
(iii)  Included within the other benefits paid 
to A P Moloney is an employer pension 
contribution of £12,000 (2012: £12,000). 
The remainder of the other benefits paid 
to A P Moloney relate to private healthcare 
costs of £2,000 (2011: £1,000)
(iv)  The amount of £2,000 (2012: £2,000) paid 
to N B Philpot within other benefits relate to 
private healthcare costs.
None of the Directors exercised any share 
options in the current or prior year.
Remuneration and service contracts
The remuneration of the Executive Directors is 
determined by the Remuneration Committee. 
Both Executive Directors have service contracts 
which are terminable on twelve months’ 
notice. The service contracts for both Executive 
Directors have been reviewed for the 2013/4 
financial year. A 2.5% pay increase has been 
awarded to both with effect from 1 April 2013. 
It has also been agreed that a contribution of 
10% of salary will be made to the pension of 
both Executive Directors.
Both Non-Executive Directors have service 
contracts terminable on six months’ notice. The 
fees payable to the Non-Executive Directors 
were reviewed at the end of the 2012/3 
financial year. Upon review, it was agreed 
that the fee paid to the Chairman was below 
market rate and was increased from £45,000 
to £50,000 per annum with effect from 1 April 
2013. The fee payable to C Ansell is to remain 
unchanged at £30,000 per annum.
Bonus Arrangements
The Bonus plan adopted allowed for awards 
based on achievement of a series of financial 
and non-financial targets weighted as follows;
Margin growth   30%
Operating profit   35%
Cash generation   15%
Non financial measures relating  
to the operations of the business 20%
To deliver a maximum payment bonus award 
of 100% of salary, targets must be exceeded 
by 15%. In the year ended 31 March 2013, 
performance against targets resulted in a bonus 
Name Salary  Cash Other 2013 2012 
 and fees Bonus benefits Total Total 
 £’000 £’000 £’000 £’000 £’000
C Ansell (i) 30 - - 30 25
C M Batterham (ii) 45 - - 45 40
A P Moloney (iii) 130 - 14 144 169
N B Philpot (iv) 207 - 2 209 270
Total 412 - 16 428 504
Remuneration Committee Report
The principal objectives of the Remuneration Committee are to review the performance of 
the Executive Directors and make recommendations to the Board on matters relating to their 
remuneration and terms of employment.
Directors’ remuneration for the financial year was as follows:
The information contained in this table has been audited. 
ANNUAL REPORT
2013
40 payment of 25% of salary being awarded 
to both Executive Directors. However, both 
Executive Directors agreed to forfeit these 
payments as no bonus payments were to be 
made in the year to the general workforce.
Long-Term Incentive arrangements for 
Directors
In June 2010 a Long Term Incentive Plan (“2010 
LTIP”) was adopted by the Board. 
Part 1 of the plan awarded nominal value 
options to participants upon achievement of 
stretching earnings per share targets over a 
three year period. Vesting of these options were 
also subject to a Total Shareholder Return target 
being achieved over the corresponding period. 
Part 2 of the plan released value to participants 
in the event that there is a change of control in 
the business at a value which is significantly in 
excess of the market value of the Company at 
the date of the award made in June 2010. Any 
change of control was required to be completed 
before June 2013 otherwise the award under 
Part 2 of the 2010 LTIP would lapse.
During 2012, independent professional advice 
was obtained to review the 2010 LTIP . The 
review concluded that the 2010 LTIP strongly 
incentivised Management to seek a disposal 
of the business before June 2013 which was 
not considered to be in the best interests of 
shareholders. It was agreed that a replacement 
Long Term Incentive Plan should be adopted 
which would recognise the value created since 
the adoption of the 2010 LTIP when the share 
price of the Company was 4.875 pence. The 
new plan should also provide incentives for the 
generation of further shareholder value over the 
next three year period.
The new Long Term Incentive Plan was adopted 
by the Board on 19 December 2012 (“2012 
LTIP”). All awards made under the 2010 LTIP 
were forfeited by participants and replaced by 
nil cost share options (“Base Awards”) which 
are subject to their continued employment 
and the satisfaction of certain share price 
performance conditions. The Base Awards will 
vest in three equal amounts on the anniversary 
of the grant in each of the next three years and 
are subject to claw back under certain events, 
including if the future share price on vesting 
has fallen by greater than 10% on the previous 
year.
Executive Directors can also earn a maximum 
of an additional 50% of the Base Award 
depending on the achievement of challenging 
share price targets within three years. The 
maximum award can only be achieved in the 
event that the share price hits a target of 28 
pence per share by the end of 2015.
Further details of the awards made are disclosed 
in the Directors share options section of the 
Director’s report on page 32.
Nomination Committee
The Nomination Committee meets at least once 
a year and is responsible for reviewing the size, 
structure and composition of the Board and 
making recommendations to the Board if it 
considers that any changes are required. It has 
a formal procedure for appointments to the 
Board. 
ANNUAL REPORT
2013
41 Company law requires the Directors to prepare 
group and parent company financial statements 
for each financial year. As required by the 
AIM Rules of the London Stock Exchange they 
are required to prepare the group financial 
statements in accordance with IFRSs as adopted 
by the EU and applicable law and have elected 
to prepare the parent company financial 
statements in accordance with UK Accounting 
Standards and applicable law (UK Generally 
Accepted Accounting Practice). 
Under company law the Directors must not 
approve the financial statements unless they 
are satisfied that they give a true and fair 
view of the state of affairs of the group and 
parent company and of their profit or loss for 
that period. In preparing each of the group 
and parent company financial statements, the 
Directors are required to: 
  o  select suitable accounting policies and 
then apply them consistently; 
  o  make judgements and estimates that are 
reasonable and prudent; 
  o  for the group financial statements, state 
whether they have been prepared in 
accordance with IFRSs as adopted by the 
EU; 
  o  for the parent company financial 
statements, state whether applicable 
UK Accounting Standards have been 
followed, subject to any material 
departures disclosed and explained in 
the financial statements; and 
  o  prepare the financial statements on 
the going concern basis unless it is 
inappropriate to presume that the group 
and the parent company will continue in 
business. 
The Directors are responsible for keeping 
adequate accounting records that are sufficient 
to show and explain the parent company’s 
transactions and disclose with reasonable 
accuracy at any time the financial position 
of the parent company and enable them to 
ensure that its financial statements comply 
with the Companies Act 2006. They have 
general responsibility for taking such steps as 
are reasonably open to them to safeguard the 
assets of the group and to prevent and detect 
fraud and other irregularities. 
The Directors are responsible for the 
maintenance and integrity of the corporate 
and financial information included on the 
Company’s website. Legislation in the UK 
governing the preparation and dissemination of 
financial statements may differ from legislation 
in other jurisdictions.
Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report and the 
group and parent company financial statements in accordance with 
applicable law and regulations. 
ANNUAL REPORT
2013
42 This report is made solely to the Company’s 
members, as a body, in accordance with 
sections Chapter 3 of Part 16 of the Companies 
Act 2006. Our audit work has been undertaken 
so that we might state to the Company’s 
members those matters we are required to state 
to them in an auditor’s report and for no other 
purpose. To the fullest extent permitted by 
law, we do not accept or assume responsibility 
to anyone other than the Company and the 
Company’s members as a body, for our audit 
work, for this report, or for the opinions we 
have formed.
Respective responsibilities of Directors 
and Auditor 
As explained more fully in the Directors’ 
Responsibilities Statement, the directors are 
responsible for the preparation of the financial 
statements and for being satisfied that they 
give a true and fair view. Our responsibility is to 
audit, and express an opinion on, the financial 
statements in accordance with applicable law 
and International Standards on Auditing (UK 
and Ireland). Those standards require us to 
comply with the Auditing Practices Board’s 
Ethical Standards for Auditors.
Scope of the audit of the financial 
statements
A description of the scope of an audit of 
financial statements is provided on the Financial 
Reporting Council’s website at  
www.frc.org.uk/auditscopeukprivate.
Opinion on financial statements
In our opinion: 
  o  the financial statements give a true and 
fair view of the state of the group’s and 
the parent company’s affairs as at 31 
March 2013 and of the group’s profit for 
the year then ended;
  o  the group financial statements have 
been properly prepared in accordance 
with IFRSs as adopted by the European 
Union;
  o  the parent company’s financial 
statements have been properly prepared 
in accordance with UK Generally 
Accepted Accounting Practice; and
  o  the financial statements have been 
prepared in accordance with the 
requirements of the Companies Act 
2006.
Opinion on other matters prescribed by 
the Companies Act 2006
In our opinion the information given in the 
Directors’ Report for the financial year for 
which the financial statements are prepared is 
consistent with the financial statements. 
Independent Auditor’s Report 
to the Members of Eckoh plc
We have audited the financial statements of Eckoh plc for the year 
31 March 2013, which comprise the Consolidated Statement of 
Comprehensive Income, Consolidated Statement of Financial Position, 
Consolidated Statement of Changes in Equity, Consolidated Statement of 
Cash Flows, Company Balance Sheet and the related notes. 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 preparation of the 
parent company financial statements is applicable law and UK Accounting 
Standards (UK Generally Accepted Accounting Practice). 
ANNUAL REPORT
2013
43 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:
  o  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
  o  the parent company financial statements 
are not in agreement with the 
accounting records and returns; or
  o  certain disclosures of directors’ 
remuneration specified by law are not 
made; or
  o  we have not received all the information 
and explanations we require for our 
audit.
Mark Matthewman  
Senior Statutory Auditor
for and on behalf of KPMG Audit Plc,  
Statutory Auditor
10th June 2013
Chartered Accountants
Altius House
One North Fourth Street
Milton Keynes
MK9 1NE 
ANNUAL REPORT
2013
44 ANNUAL REPORT
2013
45
 SECTION
04
Financial Review
46 Consolidated Financial Statements
50 Notes to the Financial Statements
73 Company Financial Statements
74  Notes to the Company Financial 
Statements
80 Shareholder Information ANNUAL REPORT
2013
46
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2013 
  2013 2013  2012 2012 
 Notes £’000 £’000 £’000 £’000
Continuing operations
Revenue 4  10,985  10,392
Cost of sales   (2,691)  (2,497)
Gross profit 4  8,294  7,895
Administrative expenses before expenses  
relating to share options schemes  (6,805) (6,805) (6,638) (6,638)
Profit from operating activities before expenses  
relating to share option schemes   1,489  1,257
Expenses relating to share option schemes  (375) (375) (150) (150)
Total Administrative expenses 4 (7,180)  (6,788) 
Profit from operating activities 5  1,114  1,107
     
Finance expense 17  -  -
Finance income 8  74  49
Profit from sale of investment 9  -  100
Profit before taxation   1,188  1,256
Taxation 10  720  1,320
Total comprehensive income for the year attributable to  
the equity holders of the parent company   1,908  2,576
     
Profit per share (pence) 11    
Basic earnings per 0.25p share   0.93  1.29
Diluted earnings per 0.25p share   0.89  1.23
Consolidated Financial Statements ANNUAL REPORT
2013
47
Consolidated Financial Statements
Consolidated Statement of Financial Position
for the year ended 31 March 2013 
    2013 2012 
   Notes £’000 £’000
Assets
Non-current assets
Intangible assets   12 311 386
Property, plant and equipment   13 1,184 1,488
Deferred Tax Asset   10 2,040 1,320
    3,535 3,194
Current assets
Inventories   15 - 19
Trade and other receivables   16 3,331 3,583
Short-term investments   17 3,000 1,000
Cash and cash equivalents   18 5,497 5,370
    11,828 9,972
Total assets    15,363 13,166
   
Liabilities   
Current liabilities   
Trade and other payables   19 (2,204) (2,261)
    (2,204) (2,261)
Non-current liabilities   
Provisions   21 (43) (43)
    (43) (43)
Net assets    13,116 10,862
   
Shareholders’ equity   
Share capital   20 522 499
ESOP Reserve    (128) -
Capital redemption reserve    198 198
Share premium    1,331 695
Currency reserve    (41) (41)
Retained earnings    11,234 9,511
Total shareholders’ equity    13,116 10,862
The financial statements were approved by the Board of Directors on 10 June 2013 and signed on its behalf by:
Adam Moloney 
Group Finance Director
Company Registration Number 3435822 ANNUAL REPORT
2013
48
Consolidated Statement of Changes in Equity
as at 31 March 2013 
   Capital    Total 
 Share ESOP redemption Share Retained Currency shareholders 
 Capital reserve reserve premium earnings reserve equity 
 £’000 £’000 £’000 £’000 £’000 £’000 £’000
       
Balance at 1 April 2011 499 - 198 695 7,030 (41) 8,381
Total comprehensive income for period - -  - - 2,576 - 2,576
Other comprehensive income  
- exchange differences - - - - (200) - (200)
Share based payment charge - - - - 105 - 105
Balance at 31 March 2012 499 - 198 695 9,511 (41) 10,862
       
Balance at 1 April 2012 499 - 198 695 9,511 (41) 10,862
Total comprehensive income for period - - - - 1,908 - 1,908
Dividends paid in the year  - - - - (407) - (407)
Shares issued under the share option schemes 23 - - 636 - - 659
Shares transacted through Employee Benefit Trust - (128) - - (38) - (166)
Share based payment charge - - - - 260 - 260
Balance at 31 March 2013 522 (128) 198 1,331 11,234 (41) 13,116 ANNUAL REPORT
2013
49
Consolidated Statement of Cash Flows
for the year ended 31 March 2013 
    2013 2012 
   Notes £’000 £’000
Cash flows from operating activities
Cash generated in operations   26 2,520 1,507
Interest paid    - -
Taxation   10 - -
Net cash generated in operating activities    2,520 1,507
Cash flows from investing activities
Purchase of property, plant and equipment   13 (352) (645)
Purchases of intangible fixed assets   12 (201) (128)
Proceeds from sale of investment in associate   9 - 100
Increase decrease in short-term investments   17 (2,000) (683)
Interest received    74 49
Net cash utilised in investing activities    (2,479) (1,307)
Cash flows from financing activities
Dividends paid    (407) (200)
Issue of shares    659 -
Shares acquired by Employee Benefit Trust    (166) -
Net cash generated in / (utilised) in financing investing activities    86 (200)
Increase in cash and cash equivalents    127 -
Cash and cash equivalents at the start of the period   18 5,370 5,370
Cash and cash equivalents at the end of the period   18 5,497 5,370 ANNUAL REPORT
2013
50
1. Basis of preparation
The consolidated financial statements of Eckoh plc have 
been prepared in accordance with International Financial 
Reporting Standards (“IFRS”) as adopted by the EU 
(“endorsed IFRS”). These financial statements have been 
prepared in accordance with those IFRS standards and IFRIC 
interpretations issued and effective or issued and early 
adopted as at 31 March 2013 as endorsed by the EU.
In the current year the Group has adopted the following 
standards and interpretations:
h)  Disclosures – Transfers of Financial Assets (Amendments 
to IFRS 7 – effective 1 July 2011)
i)  Deferred Tax: Recovery of Underlying Assets 
(Amendments to IAS 12 – effective 1 January 2012)
None of these have had a material impact on the results or 
financial position of the Group.
The following Adopted IFRSs have been issued but have not 
been applied by the Group in these financial statements. 
Their adoption is not expected to have a material effect on 
the financial statements unless otherwise indicated:
j)  Amendments to IAS 1 ‘Presentation of Items of 
Other Comprehensive Income’ (mandatory for year 
commencing on or after 1 July 2012). 
k)  Amendments to IAS 19 ‘Employee Benefits’ (mandatory 
for years commencing on or after 1 January 2013).
l)  Amendments to IFRS 7 ‘Disclosures – Offsetting Financial 
Assets and Financial Liabilities’ (mandatory for year 
commencing on or after 1 January 2013).
m)  IFRS 10 Consolidated Financial Statements and IAS 27 
(2011) Separate Financial Statements (mandatory for year 
commencing on or after 1 January 2014).
n)  IFRS 11 Joint Arrangements and Amendments to IAS 
28 (2008) Investments in Associates and Joint Ventures 
(mandatory for year commencing on or after 1 January 
2014).
o)  IFRS 12 Disclosure of Interests in Other Entities 
(mandatory for year commencing on or after 1 January 
2014).
p)  IFRS 13 Fair Value Measurement (mandatory for year 
commencing on or after 1 January 2013).
q)  Amendments to IAS 32 ‘Offsetting Financial Assets and 
Financial Liabilities’ (mandatory for year commencing on 
or after 1 January 2014).
r)  Annual Improvements to IFRS 2009-2011 cycle 
(mandatory for year commencing on or after 1 January 
2013). 
s)  Investment Entities (Amendments to IFRS 10, IFRS 12 and 
IAS 27) (mandatory for year commencing on or after 1 
January 2014).
t)  Transition Guidance (Amendments to IFRS 10, IFRS 
11 and IFRS 12) (mandatory for year commencing on 
or after 1 January 2014). IFRS 9 Financial Instruments 
(mandatory for year commencing on or after 1 January 
2015).
The Directors’ review newly issued standards and 
interpretations in order to assess the impact (if any) on the 
financial statements of the Group in future periods.
These financial statements have been prepared in 
accordance with the accounting policies set out below which 
are based on the recognition and measurement principles of 
IFRS in issue as adopted by the European Union (“EU”) and 
effective at 31 March 2013.
These Consolidated Financial Statements have been 
prepared under the historical cost convention, as modified 
by the revaluation of available-for-sale financial assets, and 
financial assets and financial liabilities at fair value through 
profit and loss.
Going Concern 
Under company law, the Company’s Directors are required 
to consider whether it is appropriate to prepare financial 
statements on the basis that the Company and the Group 
are a going concern. As part of its normal business practice 
the Group prepares annual and longer term plans and, in 
reviewing this information, the Company’s Directors are 
satisfied that the Group and the Company have reasonable 
resources to enable them to continue in business for the 
foreseeable future. For this reason the Company and 
the Group continue to adopt the going concern basis in 
preparing the financial statements.
The Consolidated Financial Statements are presented in 
Pounds Sterling, which is the Company’s functional currency. 
All financial information presented has been rounded to the 
nearest one thousand.
The principal accounting policies, which have been 
consistently applied, are described below.
Notes to the Financial Statements 
for the year ended 31 March 2013 ANNUAL REPORT
2013
51
2. Summary of principal accounting policies
Critical accounting policies, estimates and judgements
The preparation of financial statements in accordance with 
IFRS requires the use of certain critical accounting estimates. 
It also requires management to exercise judgement in 
the process of applying the Group’s accounting policies. 
Estimates and judgements are continually evaluated and are 
based on historical experience and reasonable expectations 
of future events. Actual results may differ from those 
estimates.
The accounting policies cover areas that are considered by 
the Directors to require estimates and assumptions which 
have a significant risk of causing a material adjustment to 
the carrying amounts of assets and liabilities within the next 
financial year. The policies, and the related notes to the 
financial statements, are found below:
Revenue recognition  note 2
Intangible assets   note 12
Trade and other receivables  note 16
Share based payment  note 22
Basis of consolidation
(a) Business combinations 
Business combinations are accounted for using the 
acquisition method as at the acquisition date – i.e. when 
control is transferred to the Group. Control is the power to 
govern the financial and operating policies of an entity so as 
to obtain benefits from its activities. In assessing control, the 
Group takes into consideration potential voting rights that 
are currently exercisable.
The Group measures goodwill at the acquisition date as: 
 •  the fair value of the consideration transferred; plus 
 •  the recognised amount of any non-controlling interests 
in the acquiree; plus 
 •  if the business combination is achieved in stages, the 
fair value of the pre-existing equity interest in the 
acquiree; less 
 •  the net recognised amount (generally fair value) of the 
identifiable assets acquired and liabilities assumed. 
When the excess is negative, a bargain purchase gain is 
recognised immediately in profit or loss. 
The consideration transferred does not include amounts 
related to the settlement of pre-existing relationships. Such 
amounts are generally recognised in profit or loss. 
Transactions costs, other than those associated with the 
issue of debt or equity securities, that the Group incurs in 
connection with a business combination are expensed as 
incurred. 
Any contingent consideration payable is measured at fair 
value at the acquisition date. If the contingent consideration 
is classified as equity, then it is not remeasured and 
settlement is accounted for within equity. Otherwise, 
subsequent changes in the fair value of the contingent 
consideration are recognised in profit or loss. 
If share-based payment awards (replacement awards) 
are required to be exchanged for awards held by the 
acquiree’s employees (acquiree’s awards) and relate to 
past services, then all or a portion of the amount of the 
acquirer’s replacement awards is included in measuring 
the consideration transferred in the business combination. 
This determination is based on the market-based value of 
the replacement awards compared with the market-based 
value of the acquiree’s awards and the extent to which the 
replacement awards relate to past and/or future service.
(b) Non-controlling interests 
For each business combination, the Group elects to measure 
any non-controlling interests in the acquiree either: 
 • at fair value; or 
 •  at their proportionate share of the acquiree’s identifiable 
net assets, which are generally at fair value. 
Changes in the Group’s interest in a subsidiary that do not 
result in a loss of control are accounted for as transactions 
with owners in their capacity as owners. Adjustments to 
non-controlling interests are based on a proportionate 
amount of the net assets of the subsidiary. No adjustments 
are made to goodwill and no gain or loss is recognised in 
profit or loss. 
(c) Subsidiaries
Subsidiaries are entities controlled by the Group. The 
financial statements of subsidiaries are included in the 
consolidated financial statements from the date that control 
commences until the date that control ceases.  ANNUAL REPORT
2013
52
(d) Loss of control 
On the loss of control, the Group derecognises the 
assets and liabilities of the subsidiary, any non-controlling 
interests and the other components of equity related to 
the subsidiary. Any surplus or deficit arising on the loss of 
control is recognised in profit or loss. If the Group retains 
any interest in the previous subsidiary, then such interest 
is measured at fair value at the date that control is lost. 
Subsequently that retained interest is accounted for as an 
equity-accounted investee or as an available-for-sale financial 
asset depending on the level of influence retained.
(e) Transactions eliminated on consolidation 
Intra-group balances and transactions, and any unrealised 
income and expenses arising from intra-group transactions, 
are eliminated in preparing the consolidated financial 
statements. Unrealised gains arising from transactions 
with equity accounted investees are eliminated against 
the investment to the extent of the Group’s interest in the 
investee. Unrealised losses are eliminated in the same way 
as unrealised gains, but only to the extent that there is no 
evidence of impairment.
Intangible assets
(a) Goodwill
Goodwill represents the excess of the fair value of the 
consideration paid over the fair value attributable to the 
net assets acquired and is capitalised on the Group balance 
sheet. 
Goodwill is not amortised and is reviewed for impairment at 
least annually. Any impairment is recognised in the period in 
which it is indentified.
(b) Intangible assets 
Intangible assets acquired by the Group are capitalised at 
the fair value of the consideration paid and amortised over 
their expected useful economic lives. The expected useful 
economic life of intangible assets is assessed for each 
acquisition as it arises, and is generally assumed to be three 
years. 
(c) Research and development 
Research costs are charged to the income statement in the 
year in which they are incurred. Development expenses 
include expenses incurred by the Group to set up or enhance 
services to clients. Development costs which mainly relate 
to staff salaries are capitalised as intangible assets when it 
is probable that the project will be a success, considering 
its commercial and technological feasibility, and costs 
can be measured reliably. Development costs that do not 
meet those criteria are expensed as incurred. Capitalised 
development costs are amortised on a straight line basis over 
the estimated minimum duration of the commercial contract 
that they arose from. In the absence of a specific commercial 
contract the capitalised development costs are amortised 
over the estimated useful life of the asset, which is generally 
assumed to be three years.
Amortisation is charged to administrative expenses in the 
income statement.
The carrying value of intangible assets is assessed at the end 
of each financial year for impairment. See the policy entitled 
impairment of assets below.
Impairment of non-financial assets 
An impairment loss is recognised in the income statement 
for the amount by which the asset’s carrying amount 
exceeds its recoverable amount. The recoverable amount 
is the higher of the asset’s fair value less costs to sell, and 
the value-in-use based on an internal discounted cash 
flow evaluation. For the purpose of assessing impairment, 
assets are grouped at the lowest levels for which there are 
separately identifiable cash flows. All assets are subsequently 
reassessed for indications that an impairment loss previously 
recognised may no longer exist.
Property, plant and equipment 
Property, plant and equipment is stated at cost or fair 
value at acquisition, net of depreciation and any provisions 
for impairment. Cost includes expenditure that is directly 
attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount 
or recognised as a separate asset, as appropriate, only when 
it is probable that future economic benefits associated with 
the item will flow to the Group and the cost of the item can 
be measured reliably. All other repairs and maintenance are 
charged to the income statement during the financial period 
in which they are incurred.
The gain or loss arising on the disposal of an asset is 
determined by comparing the disposal proceeds and the 
carrying amount of the asset and is recognised in the income 
statement. Depreciation is calculated using the straight-line 
method to allocate the cost of each asset to its estimated 
residual value over its expected useful life, as follows:
  Fixtures and equipment – between 3 and 5 years
  Leasehold improvements – over the term of the lease ANNUAL REPORT
2013
53
NOTES TO THE FINANCIAL STATEMENTS
Material residual values and useful lives are reviewed, and 
adjusted if appropriate, at least annually. An asset’s carrying 
amount is written down immediately to its recoverable 
amount if the asset’s carrying amount is greater than its 
estimated recoverable amount.
Financial assets 
Financial assets include investments in companies other 
than Group companies, trade and other receivables (see 
separate policy) financial receivables held for investment 
purposes, treasury shares and other securities. A permanent 
impairment is provided as a direct reduction of the securities 
account.
The Group classifies its financial assets in the following 
categories: available for sale investments and loans and 
receivables. The classification depends on the purpose for 
which the investments were acquired. The classification is 
determined by management at initial recognition.
(a) available-for-sale investments: 
   are non-derivative financial assets that are either 
designated in this category or not classified in any of the 
other categories. They are included within non-current 
assets unless management intends to dispose of the 
investment within 12 months of the balance sheet date 
and they are carried at fair value.
(b) loans and receivables: 
   are non-derivative financial assets with fixed or 
determinable payments that are not quoted in an active 
market and with no intention of trading. They arise 
principally through the provision of services to customers 
(e.g. trade receivables), but also incorporate other 
types of contractual monetary assets. Trade and other 
receivables which principally represent amounts due from 
customers and other third parties, are carried at original 
invoice value less an estimate made for bad and doubtful 
debts. They are included within current assets, with the 
exception of those with maturities greater than one year, 
which are included within non-current assets. Loans 
and receivables are included within trade and other 
receivables in the balance sheet. 
Gains and losses arising from investments classified as 
available-for-sale are recognised in the Income Statement 
when they are sold or when the investment is impaired.
In the case of impairment of available-for-sale assets, any 
loss previously recognised in equity is transferred to the 
Income Statement. Impairment losses recognised in the 
Income Statement on equity instruments are not reversed 
through the Income Statement. 
An assessment for impairment is undertaken annually. 
Management consider the financial information in respect of 
entities from which receivables are due.
A financial asset is derecognised only where the contractual 
rights to the cash flows from the asset expire or the 
financial asset is transferred and that transfer qualifies 
for derecognition. A financial asset is transferred if the 
contractual rights to receive the cash flows of the asset 
have been transferred or the Group retains the contractual 
rights to receive the cash flows of the asset but assumes a 
contractual obligation to pay the cash flows to one or more 
recipients. A financial asset that is transferred qualifies for 
derecognition if the Group transfers substantially all the 
risks and rewards of ownership of the asset, or if the Group 
neither retains nor transfers substantially all the risks and 
rewards of ownership but does transfer control of that asset.
Inventories 
Inventories are valued at the lower of cost and net realisable 
value. The cost of finished goods and work in progress 
comprises design costs, direct labour and other direct costs. 
Net realisable value is the estimated selling price in the 
ordinary course of business less applicable selling expenses.
Trade and other receivables 
Trade and other receivables are stated at amortised cost less 
provision for impairment. A provision for the impairment of 
trade receivables is made when there is objective evidence 
that the Group will not be able to collect all amounts due to 
it in accordance with the original terms of those receivables. 
The amount of the provision is determined as the difference 
between the asset’s carrying amount and the present value 
of estimated future cash flows, discounted at the effective 
interest rate. The amount of the provision is recognised 
in the income statement. Other receivables are stated at 
amortised cost less provision for impairment.
Cash and cash equivalents 
Cash and cash equivalents comprise cash in hand, deposits 
held at call with banks, other short-term investments, with 
maturities of three months or less that are readily convertible 
into known amounts of cash and which are subject to an 
insignificant risk of changes in value and bank overdrafts. 
Bank overdrafts are shown within borrowings in current 
liabilities on the balance sheet.
Short-term investments 
Short-term investments comprise funds which have been 
invested in short-term deposit accounts with maturities of 
less than twelve months and amounts held in escrow. Credit 
and liquidity risk management is described in note 3. ANNUAL REPORT
2013
54
Equity 
Equity comprises the following:
Share capital represents the nominal value of ordinary 
shares.
ESOP reserve represents the par value of ordinary shares 
held by the Employee Share Ownership Plan.
Capital redemption reserve represents the maintenance of 
capital following the share buy back and tender offer.
Share premium reserve represents consideration for 
ordinary shares in excess of the nominal value.
Currency reserve represents exchange differences arising 
on consolidation of Group companies with a functional 
currency different to the presentation currency.
Retained earnings represents retained profits less losses 
and distributions.
Dividends 
Final dividends are recorded in the Group’s financial 
statements in the period in which they are approved by the 
shareholders. Interim dividends are recognised when paid.
Foreign currency transactions 
(a)  Functional and presentation currency 
Items included in the financial statements of each of the 
Group’s entities are measured using the currency of the 
primary economic environment in which the entity operates 
(the ‘functional currency’). The Consolidated Financial 
Statements are presented in Sterling, which is the group 
companies functional and presentation currency.
(b) Group companies
The results and position of all Group companies that have a 
functional currency different from the presentation currency 
are translated into the presentation currency as follows:
 (i)   assets and liabilities are translated at the closing rates 
of exchange ruling at the balance sheet date;
 (ii)  income and expenses are translated at the average 
exchange rates. If however the average exchange rate 
is not a reasonable approximation of the exchange 
rates prevailing on the date of the transactions, the 
income and expenses are translated at the exchange 
rates at the transaction dates; and
 (iii)  resulting exchange differences are recognised as a 
separate component of equity.
Differences on exchange arising from the retranslation of the 
net investment in foreign entities are taken to shareholders 
equity on consolidation. When a foreign entity is sold, 
such exchange differences are recognised in the income 
statement as part of the profit or loss on disposal.
Goodwill and fair value adjustments arising on the 
acquisition of a foreign entity are treated as assets and 
liabilities of the foreign entity and as such are translated at 
the closing rate.
Leases 
Leases are classified as finance leases whenever the terms 
of the lease transfer substantially all the risks and rewards 
of ownership to the lessee. All other leases are classified as 
operating leases.
Assets held under finance leases are recognised assets of 
the Group at their fair value or, if lower, at the present 
value of the minimum lease payments, each determined 
at the inception of the lease. The corresponding liability 
to the lessor is included in the balance sheet as a finance 
lease obligation. Lease payments are apportioned between 
finance charges and reduction of the lease obligation so 
as to achieve a constant rate of interest on the remaining 
balance of the liability. Finance charges are charged directly 
against income.
Rentals payable under operating leases are charged to 
income on a straight-line basis over the term of the relevant 
lease. Benefits received and receivable as an incentive to 
enter into an operating lease are also spread on a straight-
line basis over the lease term.
Provisions 
Provisions are recognised when: the Group has a present 
legal or constructive obligation as a result of past events; it 
is more likely than not that an outflow of resources will be 
required to settle the obligation; and the amount has been 
reliably estimated. Provisions are not recognised for future 
operating losses.
Provisions are measured at the present value of 
management’s best estimate of the expenditure required to 
settle the present obligation at the balance sheet date. The 
discount rate used reflects current market assessments of 
the time value of money and the risks specific to the liability.
Employee Benefits 
(a) Pensions 
The Group operates a group personal pension scheme. The 
assets of the schemes are held separately from those of the 
Group in independently administered funds. Contributions  ANNUAL REPORT
2013
55
NOTES TO THE FINANCIAL STATEMENTS
payable are charged in the income statement in the year in 
which they are incurred.
(b) Bonus schemes 
The Group recognises a liability and an expense for bonuses 
payable to: 
 i)  employees based on a formula derived from 
management assessment of individual performance; 
and 
 ii)  senior management and executive directors based on 
achievement of a series of financial and non-financial 
targets. A provision is recognised where there is a past 
practice that has created a constructive obligation.
(c) Share-based payments 
From time to time on a discretionary basis, the Board of 
Directors award high-performing employees bonuses in 
the form of share options. The options are subject to a 
three year vesting period and their fair value is recognised 
as an employee benefits expense with a corresponding 
increase in equity over the vesting period. The fair value of 
share options granted is recognised within staff costs with 
a corresponding increase in equity. The proceeds received 
are credited to share capital and share premium when the 
options are exercised.
The fair value of share options was measured using the more 
appropriate of the QCA-IRS option valuer using the Black-
Scholes formula or a Monte Carlo valuation model, taking 
into account the terms and conditions upon which the 
grants were made. The amount recognised as an expense is 
adjusted to reflect the actual number of share options that 
vest except where forfeiture is only due to share prices not 
achieving the threshold of vesting.
IFRS 2 has been applied to all options granted after 7 
November 2002 which have not vested on or before 1 April 
2006. A deferred tax adjustment is also made relating to the 
intrinsic value of the share options at the balance sheet date 
(see separate policy).
As a result of the grant of share options since 6 April 1999 
the Company will be obliged to pay employer’s National 
Insurance contributions on the difference between the 
market value of the underlying shares and their exercise 
price when the options are exercised. A provision is made for 
this liability using the value of the Company’s shares at the 
balance sheet date and is spread over the vesting period of 
the share options. 
(d) Employee Share Ownership Plan 
The Group’s Employee Share Ownership Plan (‘ESOP’) is 
a separately administered trust. The assets of the ESOP 
comprise shares in the Company and cash. The assets, 
liabilities, income and costs of the ESOP have been included 
in the financial statements in accordance with SIC 12, 
‘Consolidation - Special purpose entities’ and IAS 32, 
‘Financial Instruments: Disclosure and Presentation’. The 
shares in the Company are included at cost to the ESOP 
and deducted from shareholders’ funds. When calculating 
earnings per share these shares are treated as if they were 
cancelled.
Revenue recognition
Revenue represents the fair value of the sale of goods and 
services, net of Value-Added Tax, and after eliminating sales 
within the Group. Revenue is recognised as follows:
 •  Speech Solutions build fee revenue is recognised on 
delivery and acceptance of the speech application. In 
the event that work on a project which results in a 
build fee has commenced but not completed within an 
accounting period, revenue is recognised in line with 
the percentage that the project is complete at the end 
of the accounting period. The percentage of completion 
is calculated by taking the costs incurred on the project 
at the end of an accounting period and expressing 
that as a percentage of the total estimated costs that 
are anticipated to be incurred in order to complete the 
project.
 •  Call revenue from speech services is recognised on a 
transaction basis, when the Group has determined that 
users have accessed its services via a telephone carrier 
network and/or the Group’s telecommunication call 
processing equipment connected to that network.
 •  In the event that build, call and maintenance revenue 
are included in the same contract, each component part 
is separately valued and individual component revenues 
are recognised when that component is delivered.
Non-recurring items 
The Group presents as non-recurring items on the face of 
the Income Statement those material items of expenditure 
which, because of their nature and/or expected infrequency 
of the events giving rise to them, merit separate presentation 
to allow shareholder to understand the elements of financial 
performance in the period, so as to facilitate comparison 
with prior periods. ANNUAL REPORT
2013
56
Finance fee income 
Finance fee income is credited to the Income Statement 
over the term of the loan so that the amount credited is at a 
constant rate on the carrying amount of the receivable. 
Associate 
Where the Group has the power to participate in (but not 
control) the financial and operating policy decisions of 
another entity, it is classified as an associate. Associates are 
initially recognised in the Consolidated Balance Sheet at their 
fair value. The Group’s share of post-acquisition profits and 
losses is recognised in the Consolidated Income Statement, 
except that losses in excess of the Group’s investment in the 
associate are not recognised unless there is an obligation to 
make good those losses.
Profits and losses arising on transactions between the Group 
and its associates are recognised only to the extent of 
unrelated investors’ interests in the associate. The investor’s 
share in the associate’s profits and losses resulting from 
these transactions is eliminated against the carrying value of 
the associate.
Any premium paid for an associate above the fair value of 
the Group’s share of the identifiable assets, liabilities and 
contingent liabilities acquired is capitalised as goodwill 
and included in the carrying amount of the associate. 
The carrying amount of investment in associate is subject 
to impairment in the same way as goodwill arising on a 
business combination described above.
Taxation 
Current tax is the tax currently payable based on taxable 
profit for the year.
Deferred taxation is provided in full, using the liability 
method, on temporary differences arising between the tax 
bases of assets and liabilities and their carrying amounts in 
the Consolidated Financial Statements. Deferred tax is not 
provided if it arises from initial recognition of an asset or 
liability in a transaction, other than a business combination, 
that at the time of the transaction affects neither accounting 
nor taxable profit or loss. Deferred tax is calculated at tax 
rates that are expected to apply to their respective period 
of realisation, provided they are enacted or substantively 
enacted at the balance sheet date.
Deferred tax assets are recognised to the extent that it is 
probable that future taxable profit will be available against 
which the temporary differences can be utilised.
Deferred tax on temporary differences associated with shares 
in subsidiaries is not provided if reversal of these temporary 
differences can be controlled by the Group and it is probable 
that reversal will not occur in the foreseeable future.
Changes in deferred tax assets or liabilities are recognised 
as a component of tax expense in the Income Statement, 
except where they relate to items that are charged or 
credited directly to equity in which case the related deferred 
tax is also charged or credited directly to equity. 
Where cash payments are received from HM Revenue and 
Customs relating to claims for investment tax credits relating 
to Research and Development relief, they are recognised 
in the Statement of Comprehensive Income when they are 
received as a credit to taxation.
Financial liabilities 
Financial liabilities are obligations to pay cash or other 
financial assets and are recognised when the Group 
becomes a party to the contractual provisions of the 
instrument. Financial liabilities are stated at amortised cost.
A financial liability is derecognised only when the obligation 
is discharged, is cancelled or it expires.
Non-current assets held for sale and disposal groups 
Non-current assets and disposal groups are classified as held 
for sale when:
 •  They are available for immediate sale;
 •  Management is committed to a plan to sell;
 •  It is unlikely that significant changes to the plan will be 
made or that the plan will be withdrawn;
 •  An active programme to locate a buyer has been 
initiated;
 •  The asset or disposal group is being marketed at a 
reasonable price in relation to its fair value; and
 •  A sale is expected to complete within 12 months from 
the date of classification.
Non-current assets and disposal groups classified as held for 
sale are measured at the lower of:
 •  Their carrying amount immediately prior to being 
classified as held for sale in accordance with the group’s 
accounting policy; and
 •  Fair value less costs to sell.
Following their classification as held for sale, non-current 
assets (including those in a disposal group) are not 
depreciated. ANNUAL REPORT
2013
57
NOTES TO THE FINANCIAL STATEMENTS
The results of operations disposed during the year are 
included in the Consolidated Statement of Comprehensive 
Income up to the date of disposal.
A discontinued operation is a component of the Group’s 
business that represents a separate major line of business or 
geographical area of operations or is a subsidiary acquired 
exclusively with a view to resale, that has been disposed 
of, has been abandoned or that meets the criteria to be 
classified as held for sale.
Discontinued operations are presented in the Consolidated 
Statement of Comprehensive Income (including the 
comparative period) as a single line which comprises the 
post tax profit or loss of the discontinued operation and 
the post-tax gain or loss recognised on the re-measurement 
to fair value less costs to sell or on disposal of the assets/
disposal groups constituting discontinued operations.
3. Financial risk management
The operations of the Group expose it to a variety of 
financial risks: liquidity risk, interest rate risk and foreign 
currency risk. Policies for managing these risks are set by the 
Board following recommendations from the Group Finance 
Director. All financial risks are managed centrally. The policy 
for each of the above risks is described in more detail below.
The Group’s financial instruments comprise cash, short-
term deposits, finance leases and various items, such 
as receivables and payables that arise directly from its 
operations. It is, and has been throughout the year under 
review, the Group’s policy that no trading in financial 
instruments shall be undertaken. Similarly the Group did 
not undertake any financial hedging arrangements during 
the year under review. The year-end position reflects these 
policies and there have been no changes in policies or risks 
since the year-end. 
Liquidity risk 
Through detailed cash flow forecasting and capital 
expenditure planning, the Group monitors working capital 
and capital expenditure requirements and through the use of 
rolling short-term investments ensures that cash is available 
to meet obligations as they fall due. Cash at bank is pooled 
and invested in overnight money market accounts and 
deposits.
 Interest rate risk 
The Group principally finances its operations through 
shareholders’ equity and working capital. The Group had no 
borrowings during the year, and its only material exposure 
to interest rate fluctuations was on its cash and short-term 
deposits.
The Group has adopted a sensitivity analysis that measures 
changes in the fair value of financial instruments and any 
resultant impact on the Income Statement of an increase or 
decrease of 2% in market interest rates.
 2% decrease 2% increase  
 in interest  in interest  
 rates  rates 
 £’000 £’000
(Decrease)/increase in fair value of short-term investments (130) 130
Impact on income statement: (loss)/gain (130) 130
Foreign currency risk 
Since the closure of Group subsidiary in France undertaken in June 2010, no cash or assets are held in foreign currencies. 
Very few transactions undertaken by the Company are in a currency other than Sterling. No sensitivity analysis is provided in 
respect of foreign currency risk as the risk is considered to be immaterial.
Capital management 
The Board’s policy is to maintain a strong capital base with the joint objectives to maintain investor, creditor and market 
confidence and to sustain future development of the business. Capital comprises all components of equity (i.e. share capital, 
capital redemption reserve, share premium and retained earnings). The Board manages the capital structure and makes 
adjustments as required in the light of changes in economic conditions. The Board may return capital to shareholders, issue 
new shares or sell assets in order to maintain capital.
Credit risk management is described in note 16.  ANNUAL REPORT
2013
58
 Loans and receivables
 2013 2012 
 £’000 £’000
Current financial assets
Trade receivables (note 16) 1,295 1,564
Other receivables (note 16) 28 134
Short-term investments (note 17) 3,000 1,000
Cash and cash equivalents (note 18) 5,497 5,370
Total current financial assets 9,820 8,068
Total financial assets 9,820 8,068
 2013 2012 
 £’000 £’000
Revenue 10,985 10,392
Gross profit 8,294 7,895
Administrative expenses (7,180) (6,788)
Net interest receivable 74 49
Profit from sale of investment - 100
Profit before taxation 1,188 1,256
Taxation 720 1,320
Profit after taxation 1,908 2,576
Categories of financial assets and financial liabilities
Financial liabilities
All financial liabilities held by the Group are measured at amortised cost and comprise trade payables of £1,064,000  
(2012: £1,047,000) and other payables of £9,000 (2012: £208,000). See note 19 for further details.
4. Segment analysis 
The Group’s continuing operations are considered to represent a single integrated business with only one reportable segment. 
Internal financial reporting within the Group is prepared on an individual customer basis, rather than on a product basis; 
however management consider all customers to have similar characteristics, and, therefore, financial analysis and decision-
making is performed at an aggregated level rather than customer level. In addition, there are no material foreign entities and 
revenue is derived entirely from the UK therefore segmental information by geographical area is not presented. 
In 2012/13, there were two customers that individually accounted for more than 10% of the total revenue of the continuing 
operations of the Company (2011/12: two customers). Revenue from the largest customer totalled £2,395,000  
(2011/12: £2,430,000) with the second largest customer generating revenue of £1,260,000 (2011/12: £1,323,000). ANNUAL REPORT
2013
59
NOTES TO THE FINANCIAL STATEMENTS
 2013 2012 
 £’000 £’000
The Group’s profit from operating activities is arrived at after charging:
Employee benefits expense (note 6) 3,536 3,251
Depreciation (note 13) 656 505
Amortisation (note 12) 276 349
Operating lease payments – property (note 25) 502 588
 2013 2012 
 £’000 £’000
Fees payable for the audit of the parent company and consolidated accounts 15 15
Fees payable for other services:  
The audit of subsidiary undertakings comprising continuing operations 26 25
Total fees payable to the Group’s auditor 41 40
 2013 2012 
 £’000 £’000
Wages and salaries 2,769 2,650
Less: Internal development costs capitalised in the year (161) (109)
Amortisation of internal development costs 201 227
Social security costs 462 372
Pension costs 5 6
Share based payments 260 105
 3,536 3,251
 2013 2012 
 number number
Technical support 35 30
Customer services 12 10
Administration and management 27 25
 74 65
5. Profit from operating activities
7. Auditor remuneration
During the year the Group obtained the following services from the Group’s auditor at costs as detailed below:
6. Employee benefits expense
The Directors’ Report on page 30 provides further details on the Directors’ emoluments. The average number of people 
(including Executive Directors) employed by the Group during the year was:
Excluded from the table above are 20 (2011/12: 27) full time equivalent casual call centre employees who cost £243,000 
(2011/12: £333,000) in the year.
The fees payable for the audit of the parent company and consolidated accounts are borne by a subsidiary undertaking. ANNUAL REPORT
2013
60
 2013 2012 
 £’000 £’000
Bank interest receivable 74 49
 74 49
8. Finance income
Continuing operations
10. Taxation
Tax recognised in profit and loss
Continuing operations
9. Profit on sale of investment
Eckoh plc acquired a 27.5% holding in Telecom Express Limited (“TE”) on 27 May 2010 and a place on the board. On 16 
March 2012, this holding was sold back to Telecom Express for £100,000 to be paid in three equal instalments on 1 June 
2012, 3 August 2012 and 1 February 2013. As the investment had been fully impaired in 2010, the sale of the investment 
back to Telecom Express generated a profit of £100,000 in the prior year.
 2013 2012 
 £’000 £’000
Current tax expense/(credit)  
Current year - -
Adjustments in respect of prior periods - -
 - -
Deferred tax credit  
Origination and reversal of temporary differences - -
Recognition of previously unrecognised tax losses (720) (1,320)
 (720) (1,320)
Total tax credit (720) (1,320)
No taxation was recognised directly in equity.
 2013 2012 
 £’000 £’000
Profit / (loss) for the year 1,908 2,576
Total tax credit (720) (1,320)
Profit / (loss) excluding tax 1,188 1,256
  
Profit / (loss) multiplied by rate of corporation tax in the UK of 24% (2012: 26%) 285 327
Effect of expenses not deductible for tax purposes 65  (17)
Effect of income not taxable for tax purposes (123) -
Adjustments in respect of prior periods - -
Utilisation of tax losses (1,120) -
Deferred tax not recognised 84 (1,740)
Effect of tax rate adjustment on closing recognised deferred tax balance  89 110
Tax credit for the year (720) (1,320) ANNUAL REPORT
2013
61
NOTES TO THE FINANCIAL STATEMENTS
 Assets Liabilities Net
 2013 2012 2013 2012 2013 2012 
 £’000 £’000 £’000 £’000 £’000 £’000
Tax losses carried forward 2,040 1,320 - - 2,040 1,320
Movement in deferred tax balances during the year
Recognition of deferred tax assets and liabilities 
 2013 2012 
 £’000 £’000
Balance at 1 April 1,320 -
Recognised in income statement 720 1,320
Recognised in Other Comprehensive Income - -
Balance at 31 March 2,040 1,320
Unrecognised deferred tax assets
There are unprovided deferred taxation assets totalling £1,985,000 (2012: £3,239,000) in respect of trading losses and 
£7,205,000 (2012: £7,509,000) in respect of capital losses of which £5,156,000 (2012: £5,380,000) are restricted. In 
addition, there are other temporary timing differences resulting in unprovided deferred tax assets of £733,000  
(2012: £697,000), comprising Accelerated Capital Allowances of £651,000 (2012: £571,000) and Short Term Temporary 
differences of £82,000 (2012: £126,000).
In the 2012 & 2013 Budgets, the Chancellor announced a reduction in the main rate of corporation tax from 24% to 21%, 
to be phased in over three years as follows:
 •  With effect from 1 April 2013 - 23%
 •  With effect from 1 April 2014 - 21%
 •  With effect from 1 April 2015 - 20%
Under IFRS, deferred tax is measured by reference to the rates which are enacted or substantively enacted at the balance 
sheet date.  The reduction in the corporation tax rate to 23% was substantively enacted on 3 July 2012, and therefore the 
potential deferred tax asset has been calculated at this rate. 
The further reductions to 21% and 20% are not expected to be substantially enacted until July 2013 and therefore have not 
been reflected in the deferred tax calculations for this period.
The ongoing growth of the business into increasing profitability has provided sufficient evidence that £2,040,000 (2012: 
£1,320,000) of deferred tax assets in respect of trading losses will be recoverable, and is therefore being recognised as an 
asset on the statement of financial position. ANNUAL REPORT
2013
62
11. Earnings per share
Basic earnings per ordinary share is calculated on the basis of the weighted average number of ordinary shares of 
205,568,912 (2012: 199,759,576) in issue during the year ended 31 March 2013 after adjusting for shares held by the 
Employee Share Ownership Plan of 9,156 (2012: 9,156) and the profit for the period attributable to equity holders of the 
parent of £1,188,000 (2012: £2,576,000).
In calculating diluted earnings per share, the weighted average number of ordinary shares in issue, after adjusting for shares 
held by the Employee Share Ownership Plan and Employee Benefit Trust, is further adjusted to include the dilutive effect of 
potential ordinary shares. The potential ordinary shares represent share options granted to employees where the exercise 
price is less than the average market price of ordinary shares in the period. The total number of options in issue is disclosed in 
note 23. The dilutive effect of potential ordinary shares outstanding at the end of the year is 10,393,000 (2012: 9,740,000). 
Denominator
 2013 2012 
 £’000 £’000
Weighted average number of shares in issue in the period 205,569 199,760
Shares held by employee ownership plan (9) (9)
Shares held in Employee Benefit Trust (810) -
Number of shares used in calculating basic earnings per share 204,750 199,751
Dilutive effect of share options 10,393 9,740
Number of shares used in calculating diluted earnings per share 215,143 209,491
12. Intangible assets
Group
  Internally 
  developed Other 
  computer intangible 
 Goodwill software assets Total 
 £’000 £’000 £’000 £’000
Cost    
At 1 April 2011 15,922 1,529 20 17,471
Additions - 128 - 128
At 31 March 2012 15,922 1,657 20 17,599
Additions - 201 - 201
At 31 March 2013 15,922 1,858 20 17,800
    
Amortisation    
At 1 April 2011 15,922 922 20 16,864
Charge for the year - 349 - 349
At 31 March 2012 15,922 1,271 20 17,213
Charge for the year - 276 - 276
At 31 March 2013 15,922 1,547 20 17,489
    
Carrying amount    
At 31 March 2013 - 311 - 311
At 31 March 2012 - 386 - 386 ANNUAL REPORT
2013
63
NOTES TO THE FINANCIAL STATEMENTS
Included within the carrying value of intangible assets is £61,000 (2012: £185,000) capitalised in respect of the costs 
incurred to enable Eckoh plc to become a Payment Card Industry Data Security Standard (PCI DSS) compliant level one service 
provider. This investment has strengthened security around the infrastructure and procedures within the business enabling 
it to handle credit card transactions for clients in a secure manner. These costs are being amortised over three years until 
October 2013.
13. Property, plant and equipment
 Fixtures and equipment 
 £’000
Cost 
At 1 April 2011 6,174
Additions 645
At 31 March 2012 6,819
Additions 352
At 31 March 2013 7,171
 
Depreciation 
At 1 April 2011 4,826
Charge for the year 505
At 31 March 2012 5,331
Charge for the year 656
At 31 March 2013 5,987
 
Carrying amount 
At 31 March 2013 1,184
At 31 March 2012 1,488
The carrying amount of property, plant and equipment includes £nil (2010: £nil) in respect of assets held under finance lease 
contracts. The depreciation charge in respect of assets held under finance lease was £nil (2010: £nil). ANNUAL REPORT
2013
64
Subsidiary Country of Principal Percentage of share 
undertakings incorporation activities capital held
Eckoh UK Limited England and Wales Speech Solutions  100%
Eckoh France SAS France Non trading 100%(i)
Eckoh Enterprises Limited England and Wales Dormant 67% & 33%(i)
Eckoh Projects Limited England and Wales Non trading 100%
Avorta Limited England and Wales Dormant 100%(i)
Eckoh Technologies Limited England and Wales Dormant 100%(i)
Intelliplus Group Limited England and Wales Dormant 100%
Intelliplus Limited England and Wales Non Trading 100%(i)
Medius Networks Limited England and Wales Non Trading 100%(i)
Telford Projects Limited England and Wales Dormant 100%
Swwwoosh Limited England and Wales Dormant 100%(i)
365 Isle of Man Limited Isle of Man Dormant 100%(i)
(i) Share capital held by a subsidiary undertaking.
All companies have March year-ends. All trading companies operate principally in their country of incorporation.
14. Investment in subsidiary undertakings
The following are the principal subsidiary undertakings of the Group, which are included in the consolidated financial 
statements: 
 2013 2012 
 £’000 £’000
Work in progress - 19
 - 19
15. Inventories
 2013 2012 
 £’000 £’000
Trade receivables 1,295 1,564
Less: provision for impairment of receivables - -
Net trade receivables 1,295 1,564
Other receivables 28 134
Prepayments and accrued income 2,008 1,885
 3,331 3,583
The Directors’ consider that the carrying value of the trade and other receivables approximate to their fair value.
16. Trade and other receivables
Current ANNUAL REPORT
2013
65
NOTES TO THE FINANCIAL STATEMENTS
 2013 2012 
 £’000 £’000
Sterling 3,000 1,000
 3,000 1,000
 2013 2012 
 £’000 £’000
Sterling 5,497 5,370
 5,497 5,370
 2013 2012 
 £’000 £’000
Fixed rate 3,000 1,000
Floating rate - -
 3,000 1,000
The short term investment at fixed rate represents amounts held with Natwest Bank for a fixed period of time. Short-term 
deposits held during the year have an average maturity of 12 months (2012: 9 months) with an average interest rate of 
2.39% (2012: 1.04%).
 2013 2012 
 £’000 £’000
Floating rate 5,497 5,370
Cash and cash equivalents comprise cash held by the Group. Surplus cash is placed in an interest bearing account.  
The average interest rate on the interest bearing account during the year was 0.50% (2012: 0.65%).
The Group’s financial risk management is disclosed in note 3.
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its 
contractual obligations. Credit risk arises principally from the Group’s trade and other receivables. Concentrations of credit 
risk with respect to trade receivables are limited due to working capital practices of the market sector and the Group; and the 
nature of the Group’s customer base. The working capital practices of the market sector within which the Group operates 
are such that the majority of the trade receivables balance is due from the telephony carriers under a self bill agreement. The 
reputable nature of the Group’s current customer base limits exposure to credit risk. At 31 March 2013, there are no trade 
receivables that are past due but not impaired (2012: nil). Management believe that the current provision for the impairment 
of receivables need not be increased on the basis of their historic experience and current knowledge of customers and 
amounts due. 
17. Short-term investments
18. Cash and cash equivalents ANNUAL REPORT
2013
66
19. Trade and other payables
 2013 2012 
 £’000 £’000
Trade payables 1,064 1,047
Other payables 9 208
Other taxation and social security 454 399
Accruals and deferred income 677 607
 2,204 2,261
All of the amounts above are payable within one year and trade payables that are more than three months old at the year-
end represent £1,000 (2012: £13,000).
The Group’s exposure to liquidity risk is disclosed in note 3.
20. Share Capital
Allotted called up and fully paid
 Number of shares Nominal Value 
Share type   £’000
Ordinary shares of 0.25p each  
At 1 April 2012 199,759,576 499
Shares issued under share option schemes 9,229,957 23
At 31 March 2013 208,989,533 522
 Provisions for 
 Dilapidations Total 
 £’000 £’000
At 1 April 2012 43 43
Provided/(utilised) in year - -
At 31 March 2013 43 43
The total authorised number of shares is 1,000,000,000 ordinary shares with a nominal value of 0.25 pence per share. All 
ordinary shares in issue are fully paid. The holders of the ordinary shares are entitled to receive dividends, if declared, and 
are entitled to vote at general meetings of the Company. There were no changes to the authorised share capital during the 
period. Potential ordinary shares are disclosed in note 22.
21. Provisions
The dilapidation provision will not be payable until the end of the lease on the Group’s Telford House offices in 2015. The 
effect of discounting is not material and therefore has not been included within the calculation for the dilapidation provision. ANNUAL REPORT
2013
67
NOTES TO THE FINANCIAL STATEMENTS
22. Share based payment
The Eckoh plc Share Option Scheme (‘the Scheme’) was 
introduced in November 1999. Under the Scheme the Board 
can grant options over shares in the Company to Group 
employees. The grant price of share options is the middle 
market quotation price as derived from the Daily Official List 
of the London Stock Exchange on the date of the grant. The 
contractual life of an option is ten years. Options granted 
under the Scheme become exercisable subject to the share 
price exceeding RPI plus 15% after the third anniversary of 
the grant date. Exercise of an option is subject to continued 
employment, with certain exceptions, as specified in the 
Scheme rules.
The Eckoh plc Enterprise Management Incentive Scheme 
(‘the EMI Scheme’) was introduced in February 2007. Under 
the Scheme the Board can grant options over shares in the 
Company to Group employees. The grant price of share 
options is the middle market quotation price as derived 
from the Daily Official List of the London Stock Exchange 
on the date of the grant. The contractual life of an option is 
ten years. Options granted under the EMI Scheme become 
exercisable subject to the percentage growth in earnings per 
share in the three years following the year of grant being at 
least 5% (compounded) per annum. Exercise of an option 
is subject to continued employment, subject to certain 
exceptions as specified in the EMI Scheme rules. 
The Eckoh plc Share Incentive Plan (‘the SIP’) was 
introduced in April 2007. Under the SIP , employees can buy 
partnership shares worth up to up to £1,500 per annum and 
receive matching shares in the ratio of 2:1 by completing 
the partnership/matching share agreement. The purchase 
price will be the prevailing market price on that day when 
the shares are purchased. The SIP trustees buy shares twice 
a year. Subject to continuing employment, within three 
years of purchase partnership shares can be withdrawn 
from the SIP with a corresponding charge to income tax and 
national insurance however the associated matching shares 
cannot be withdrawn within the first three years. Subject to 
continuing employment, between three and five years of the 
purchase date, both partnership and matching shares can 
be withdrawn from the SIP with a corresponding charge to 
income tax and national insurance. Subject to continuing 
employment, five years after the purchase date, both 
partnership and matching shares can be withdrawn from 
the SIP without a corresponding charge to income tax and 
national insurance. Both partnership and matching shares 
can be withdrawn from the SIP within five years of the 
purchase date without a corresponding charge to income tax 
and national insurance subject to employment terminating 
for certain reasons as specified under the SIP rules.
The Eckoh plc 2010 Long Term Incentive Plan (“2010 
LTIP”) was introduced in June 2010. Awards under the plan 
are made in two parts. Part 1 awards are in the form of 
options exercisable at 0.25 pence, which vest dependent 
on performance against Earnings per share targets set at 
the beginning of each financial period. None of the Part 1 
awards are released until three years have elapsed during 
which targets relating to Total Shareholder Return must 
also be achieved. The Part 1 awards have a matching 
mechanism whereby additional awards are made to match 
any purchase of shares made by recipients up to a cap of 
25% of the Executive’s remuneration. Part 2 awards are 
made to Executive Directors and key management in the 
event that the Company undergoes a change of control 
(“trigger event”). The value of part 2 awards is dependent 
on the increase in value obtained for shareholders from a 
trigger event in comparison to the value of the Company 
shares at the date of award. As there is currently no 
probability of a “trigger event” taking place before the lapse 
date of the awards of 30 June 2013, no charge was made 
to the Statement of comprehensive income in respect of 
Part 2 of these awards. Further information is available in 
the Remuneration Report on page 40 and in the Directors 
Report on page 30.
The 2010 Eckoh plc Bonus Scheme paid half of any bonus 
payable to executives and key management personnel in 
the form of deferred nil cost share options. The awards 
relating to the 2010/11 financial year were made on 30 
June 2011 (“calculation date”) with further detail available 
in the Remuneration Report on page 40. An award relating 
to the 2011/12 financial year is expected to be made on 30 
June 2012 (“calculation date”). The deferred share options 
will vest in two halves 12 and 24 months following the 
calculation dates.
The Eckoh plc 2012 Long Term Incentive Plan (“2012 
LTIP”) was introduced in December 2012 and replaced 
the 2010 LTIP introduced in June 2010. Base Awards were 
made to participants to reflect the value generated for 
shareholders since the introduction of the 2010. These 
awards will vest in three equal tranches of the grant date 
provided share price targets are achieved and the participant 
remains employed with the company. Match awards can be 
further awarded three years after the original award date 
provided share price targets have been satisfied. ANNUAL REPORT
2013
68
The fair value of share options granted under the Scheme, the EMI Scheme and the SIP was measured using the QCA-IRS 
option valuer based on the Black-Scholes formula, taking into account the terms and conditions upon which the grants were 
made. The fair value per option granted and the assumptions used in the calculation are as follows:
 5 March 2010 8 June 2011 26 March 2012 8 June 2012
Share price (pence) 5.0 8.00 10.875 11.125
Exercise price (pence) 5.13 8.125 11.0 11.25
Number of employees 21 2 13 2
Shares under option 4,500,000 1,000,000 1,275,000 300,000
Vesting period (years) 3 3 3 3
Expected volatility 43% 48% 42% 40%
Option life (years) 10 10 10 10
Expected life (years) 3 3 3 3
Risk free rate 2.83% 4.00% 2.75% 2.75%
Expected dividends expressed as a dividend yield - - - -
Fair value per option (pence) 1.56 3.13 3.15 3.18
The expected volatility is based on historical volatility over the last three years. The expected life is the average expected 
period to exercise. The risk free rate of return is the yield on zero-coupon UK government bonds of a term consistent with 
assumed option life.
The fair value of awards made under the 2010 LTIP scheme was measured using a model using the Monte Carlo method, 
taking into account the terms and conditions upon which the awards were made. The fair value of awards made under the 
Bonus scheme was measured using the QCA-IRS option valuer based on the Black-Scholes formula. The fair value per award 
granted and the assumptions used in the calculation are as follows:
 30 June 2010 28 February 2011
Award type LTIP LTIP
Share price (pence) 4.875 7.125
Exercise price (pence) 0.25 0.25
Number of employees 2 1
Shares under option 4,846,153 150,000
Vesting period (years) 3 2.34
Expected volatility 43% 43%
Option life (years) 10 9.34
Expected life (years) 3 2.34
Risk free rate 1.38% 1.61%
Expected dividends expressed as a dividend yield - -
Fair value per option (pence) 2.53 4.98 ANNUAL REPORT
2013
69
NOTES TO THE FINANCIAL STATEMENTS
 30 June 2010 30 June 2010 30 June 2011 30 June 2011
Award type Bonus Bonus Bonus Bonus
Share price (pence) 4.75 4.75 11.00 11.00
Exercise price (pence) 0.00 0.00 0.00 0.00
Number of employees 4 4 4 4
Shares under option 831,794 831,794 633,228 633,228
Vesting period (years) 2 3 2 3
Expected volatility 43% 43% 43% 43%
Option life (years) 10 10 10 10
Expected life (years) 2 3 2 3
Risk free rate 1.38% 1.38% 4.0% 4.0%
Expected dividends expressed as a dividend yield - - - -
Fair value per option (pence) 4.75 4.75 11.00 11.00
The fair value of awards made under the 2012 LTIP scheme was measured using a model using the Monte Carlo method, 
taking into account the terms and conditions upon which the awards were made. The fair value of Match awards made 
under the 2013 LTIP scheme was measured using a model based on the Black-Scholes formula. The fair value per award 
granted and the assumptions used in the calculation are as follows:
 1 January 2013 1 January 2013 1 January 2013 1 January 2013
Award type LTIP LTIP LTIP LTIP Match
Share price (pence) 14.25 14.25 14.25 14.25
Exercise price (pence) 0.00 0.00 0.00 0.00
Number of employees 4 4 4 5
Shares under option 5,687,976 5,687,977 5,687,980 9,598,463
Vesting period (years) 1 2 3 3
Expected volatility 28% 28% 28% 28%
Option life (years) 10 10 10 10
Expected life (years) 1 2 3 3
Risk free rate 0.32% 0.39% 0.56% 0.56%
Expected dividends expressed as a dividend yield 0.70% 0.70% 0.70% 0.70%
Fair value per option (pence) 8.54 9.43 10.06 1.57
The expected volatility is based on historical volatility over the last three years. The expected life is the average expected 
period to exercise. The risk free rate of return is the yield on zero-coupon UK government bonds of a term consistent with 
assumed option life. ANNUAL REPORT
2013
70
A reconciliation of option movements over the year to 31 March 2013 is shown below:
 2013 2012
 Number of Weighted average Number of Weighted average 
 share options exercise price share options exercise price
Outstanding at 1 April 22,970,591 5.04 20,394,304 4.80
Granted 27,342,634 0.12 3,134,483 7.07
Exercised (9,419,957) 7.08 - -
Lapsed (30,000) 10.75 (236,000) 7.79
Forfeited (5,980,624) 1.23 (322,196) 5.87
Outstanding at 31 March 34,882,644 1.24 22,970,591 5.04
Exercisable at 31 March 4,050,776 5.37 8,999,632 7.91
 2013 2012
 Weighted    Weighted 
 average    average 
Range of  exercise  Number    exercise Number  
exercise price of shares   price of shares 
prices (pence) (pence) (000’s) Expected Contractual (pence) (000’s) Expected Contractual
0 – 0.5 0.00 28,757 2.7 9.7 0.17 7,546 1.4 8.4
4.5 – 6.5 5.13 3,760 - 6.9 5.13 4,150 0.9 7.9
6.5 – 8.5 8.11 541 1.1 7.7 7.07 4,820 0.5 2.5
8.5 – 10.5 8.65 250 - 3.4 8.72 5,150 - 4.4
10.5 – 12.5 11.05 1,575 2.0 9.0 10.99 1,305 2.9 9.8
Weighted average  
remaining life
Weighted average  
remaining life
The total charge for the year relating to employee share based payment plans was £260,000 (2012: £105,000) all of which 
related to equity-settled share based payment transactions.
23. Pension commitments
The Group operates a group personal pension scheme and, in addition, the subsidiary company Eckoh UK Limited operates 
a defined contribution pension scheme. The assets of the pension schemes are held separately from those of the Group in 
independently administered funds. The pension charge represents contributions payable by the Group to the funds. There 
were no outstanding or proposed contributions at the balance sheet date.
24. Related party transactions
Eckoh plc is the parent and ultimate controlling company of the Eckoh Group, the Consolidated Financial Statements of 
which include the results of the subsidiary undertakings set out in note 14.
Each subsidiary is 100% owned by the Eckoh Group and is considered to be a related party.
Directors and key management includes the staff costs of the Directors’ and the Management Team. ANNUAL REPORT
2013
71
NOTES TO THE FINANCIAL STATEMENTS
Directors and other key management
 2013 2012 
 £’000 £’000
Wages and salaries 608 710
Social security costs 78 90
Pension costs 12 12
Share based payments 243 91
 941 903
The aggregate Directors’ emoluments are shown in the table below. An analysis of Directors’ emoluments is included in the 
Directors’ Report on page 30.
Directors
 2013 2012 
 £’000 £’000
Aggregate emoluments 407 513
 407 513
25. Operating lease commitments
The Group had total commitments under non-cancellable operating leases as follows:
Land and buildings
 2013 2012 
 £’000 £’000
Expiring within one year 471 234
Expiring within two to five years 1,171 284
 1,642 518
The principal property under operating lease is the Group’s head office in Hemel Hempstead for which the annual operating 
lease charge is £103,000 for the ground and first floors. On 8 December 2011, an additional lease for the second floor of the 
same building was agreed. The annual operating lease charge for the additional floor is £52,000 with rent commencing on 
24 July 2012. The term of the lease covers the period to 21 March 2015. 
The Group also have an operating lease for a data centre in Heathrow, London at which some of its call processing platform 
is located. The term of the lease covers the period to July 2017 at a cost of £320,000 per annum. ANNUAL REPORT
2013
72
26. Cash flow from operating activities
Cash flows from operating activities
 2013 2012 
 £’000 £’000
Profit after taxation 1,908 2,576
Profit on sale of investment in associate  - (100)
Interest income (74) (49)
Increase in deferred tax asset (720) (1,320)
Depreciation of property, plant and equipment 656 505
Amortisation of intangible assets 276 349
Share based payments 260 105
Operating profit before changes in working capital and provisions 2,306 2,066
Decrease / (increase) in inventories 19 (15)
Decrease / (increase) in trade and other receivables 252 (486)
(Decrease) in trade and other payables (57) (58)
Net cash generated in operating activities 2,520 1,507
27. Events after the Statement of Financial Position Date
On 10 June 2013, the Group completed the acquisition of Veritape Limited, a provider of PCI DSS compliant call recording 
software and on premise secure payment solutions for initial consideration of £6.3m.
The initial consideration comprises of £5.2m of initial cash consideration to be funded by existing cash finances from the 
combined entity and £1.1m payable in Eckoh shares. Additional deferred consideration of up to £4.3m payable in cash of 
£1.7m and Eckoh shares to the value of £2.6m based on the share price at 10 June 2013, dependent on the achievement 
of profit before tax targets can be earned. To earn the entire deferred consideration, profit before tax of £3.6m must be 
achieved over the first 26 month period following 1 July 2013.
As the acquisition was finalised on the day that the accounts were signed, completion accounts have yet to be prepared and 
full disclosure cannot be provided in these statements.
Also, post year end the Directors are recommending that a final dividend for the year ended 31 March 2013 of 0.25 pence 
per ordinary share be paid to the shareholders whose names appear on the register at the close of business on 23 August 
2013 with payment on 20 September 2013. The ex-dividend date will be 18 September 2013. This recommendation will be 
put to the shareholders at the Annual General Meeting. Based on the shares in issue at the year end, this payment would 
amount to £0.5m. ANNUAL REPORT
2013
73
Company Balance Sheet
for the year ended 31 March 2013 
    2013 2012 
   Notes £’000 £’000
Fixed Assets
Investments   ii 5,471 5,211
    5,471 5,211
Current assets
Debtors: amounts falling due within one year   iii 70 40
Short-term investments   iv 3,000 1,000
Cash at bank and in hand    3,469 5,230
    6,539 6,270
   
Creditors: amounts falling due within one year   v (118) (9)
Net current assets    6,421 6,261
Total assets less current liabilities    11,892 11,472
Net assets    11,892 11,472
   
Capital and reserves   
Called up share capital   viii,ix 522 499
ESOP Reserve   ix (128) -
Capital redemption reserve   ix  198 198
Share premium account   ix  1,331 695
Share based payment   ix  700 440
Profit and loss account    ix  9,269 9,640
Total shareholders’ funds    11,892 11,472
The financial statements were approved and authorised for issue by the Board of Directors on 10 June 2013 and signed on its 
behalf by:
Adam Moloney 
Group Finance Director
Company Registration Number 3435822
Company Financial Statements
Prepared under UK GAAP ANNUAL REPORT
2013
74
Notes to the  
Company’s Financial Statements 
for the year ended 31 March 2013
Principal Accounting Policies
Basis of accounting
The financial statements for the Company have been 
prepared on the going concern basis, under the historical 
cost convention and in accordance with the Companies Act 
2006 and applicable Accounting Standards in the United 
Kingdom.
The following Accounting Standards have been issued, but 
have not been adopted by the Company in these financial 
statements.
u)  In March 2013, the Financial Reporting Council (FRC) 
issued FRS 102, the main part of the new UK GAAP 
regime.  This follows the issue in November 2012 of FRS 
100 and FRS 101.
v)  FRS 100 guides entities in their decision between 
reporting frameworks – effective for periods 
commencing on or after 1 January 2015, but with early 
adoption available. 
w)  FRS 101 allows the individual accounts of qualifying 
parent and subsidiary entities to be prepared under EU-
IFRS recognition and measurement, but with reduced 
disclosures – effective for periods commencing on or 
after 1 January 2015, but with early adoption available. 
x)  FRS 102 is based on the IASB’s IFRS for Small and 
Medium Sized Enterprises (IFRS for SMEs) and, similarly 
to FRS 101, allows for reduced disclosures in qualifying 
parent and subsidiary entities – effective for periods 
commencing on or after 1 January 2015, but with early 
adoption available.
Going Concern 
Under company law, the Company’s Directors are required 
to consider whether it is appropriate to prepare financial 
statements on the basis that the Company is a going 
concern. As part of its normal business practice, the 
Company is included within annual and longer term plans 
prepared management, and, in reviewing this information, 
the Company’s Directors are satisfied that the Company has 
reasonable resources to enable it to continue in business 
for the foreseeable future. For this reason, the Company 
continues to adopt the going concern basis in preparing 
these financial statements.
The principal accounting policies adopted by the Company 
are described below.
Investments 
Long-term investments, held as fixed assets, are stated at 
cost less provision for any impairment in value.
Deferred taxation
Deferred taxation is recognised in respect of all timing 
differences that have originated but not reversed at the 
balance sheet date, where transactions or events that result 
in an obligation to pay more tax in the future or a right to 
pay less tax in the future have occurred at the balance sheet 
date. 
A net deferred tax asset is regarded as recoverable and 
therefore recognised only when, on the basis of all available 
evidence, it can be regarded as more likely than not that 
there will be suitable taxable profits against which to recover 
carried forward tax losses and from which the future reversal 
of underlying timing differences can be deducted.
Deferred tax is measured at the average tax rates that 
are expected to apply in the periods in which the timing 
differences are expected to reverse, based on tax rates and 
laws that have been enacted or substantively enacted by 
the balance sheet date. Deferred tax is measured on a non-
discounted basis.
Related party transactions 
FRS 8 ‘Related Party Transactions’ requires the disclosure of 
the details of material transactions between the reporting 
entity and related parties.  The Company has taken 
advantage of exemptions under FRS 8 not to disclose 
transactions between wholly-owned Group companies.
Own shares held by ESOP Trust 
Transactions of the Company-sponsored Employee Share 
Ownership Plan (‘ESOP’) Trust are treated as being those of 
the Company and are therefore reflected in the Company’s 
financial statements. In particular, the trust’s purchases and 
sales of shares in the Company are debited and credited 
directly to equity.
Share based payments 
The Company operates a share option scheme which 
allowed certain Group employees to acquire shares in 
the Company. The fair value of share options granted is 
recognised within the staff costs of the relevant group 
company with a corresponding increase in equity. The fair 
value is measured at grant date and spread over the period  ANNUAL REPORT
2013
75
NOTES TO THE COMPANY’S FINANCIAL STATEMENTS
up to the date when the recipient becomes unconditionally 
entitled to payment.
The fair value of share options was measured using either a 
Monte Carlo valuation model or the QCA-IRS option valuer 
using the Black-Scholes formula, taking into account the 
terms and conditions upon which the grants were made. 
The amount recognised as an expense is adjusted to reflect 
the actual number of share options that vest except where 
forfeiture is only due to share prices not achieving the 
threshold of vesting.
During the year the Company also introduced a new 
long term incentive plan. The fair value of the conditional 
awards of shares granted under the long term incentive 
plan determined at the date of grant. The fair value is then 
expensed on a straight line basis over the vesting period 
based on an estimate of the number of shares that will 
eventually vest. At each reporting date, the non-market 
based performance criteria and total shareholder return 
defined in the long term incentive plan will be reconsidered 
and the expense will be revised as necessary.
FRS 20 has been applied to all options granted after 7 
November 2002 which have not vested on or before 1 
January 2006. A deferred tax adjustment is also made 
relating to the intrinsic value of the share options at the 
balance sheet date.
As a result of the grant of share options since 6 April 1999 
the Company will be obliged to pay employer’s National 
Insurance contributions on the difference between the 
market value of the underlying shares and their exercise 
price when the options are exercised. A provision is made for 
this liability using the value of the Company’s shares at the 
balance sheet date and is spread over the vesting period of 
the share options. The provision is held by the relevant group 
company who employs the share option holders.
Dividends 
Final dividends are recorded in the financial statements in 
the period in which they are approved by the shareholders.  
Interim dividends are recognised when paid.
Cash flow statement 
The cash flows of the Company are included in the 
Consolidated Cash Flow Statement on page 49.  
i. Operating expenses
Staff costs 
Details of the Directors’ emoluments are given in the 
Directors’ Report on page 30. The Director’s remuneration 
costs are borne by a subsidiary undertaking. The Company 
did not incur any staff costs during the year (2012: £nil). The 
average number of employees employed by the company 
during the year was 4 (2012: 4).
Services provided by the Group’s auditor 
Fees payable for the audit of the parent company and 
consolidated accounts of £15,000 (2012: £15,000) were 
borne by a subsidiary undertaking.
 Shares in  
 subsidiary  Other 
 undertakings investments Total 
 £’000 £’000 £’000
At 31 March 2012 11,722 475 12,197
Additions - 260 260
At 31 March 2013 11,722 735 12,457
   
Impairment   
At 1 April 2012 and 31 March 2013 (6,986) - (6,986)
   
Net Book Value   
At 31 March 2013 4,736 735 5,471
At 31 March 2012 4,736 475 5,211
ii. Fixed asset investments ANNUAL REPORT
2013
76
Subsidiary Country of Principal Percentage of share 
undertakings incorporation activities capital held
Eckoh UK Limited England and Wales Speech Solutions  100%
Eckoh Projects Limited England and Wales Non trading 100%
The Company also holds 100% of the issued share capital of nine non-trading or dormant companies, not shown above. 
The details of these non-trading and dormant companies are listed at Companies House and are included in note 14 of the 
consolidated accounts.
All trading companies operate principally in their country of incorporation and have March year-ends.
The Directors have assessed the carrying values of the Company’s investments in line with FRS 11 Impairment, and concluded 
that no impairment triggers exist that would require the Company’s investment in Eckoh UK Limited to be further impaired. 
The investment in Eckoh Projects Limited has been fully returned in previous years and therefore has no current value.
Other investments represent additional investments in Eckoh UK Limited as a result of the share-based payments 
arrangements in place.  As the Company grants options over its shares to employees of Eckoh UK Limited, the Company 
records an increase in its investment in Eckoh UK Limited, the details of which are disclosed further in note 22 of the 
Consolidated Financial Statements. The disclosure of these amounts has been reclassified between categories during the year.
iii. Debtors
 31 March 31 March 
 2013 2012 
 £’000 £’000
Other debtors 26 26
Prepayments and accrued income 44 14
Amounts due within one year 70 40
iv. Short-term investments
 31 March 31 March 
 2013 2012 
 £’000 £’000
Sterling 3,000 1,000
 3,000 1,000
 31 March 31 March 
 2013 2012 
 £’000 £’000
Fixed rate 3,000 1,000
 3,000 1,000
The short term investment at fixed rate represents an amount held with Natwest Bank for a fixed period of time. Short-term 
deposits held during the year have an average maturity of 12 months (2012: 9 months) with an average interest rate of 
2.39% (2012: 1.04%). ANNUAL REPORT
2013
77
NOTES TO THE COMPANY’S FINANCIAL STATEMENTS
 31 March 31 March 
 2013 2012 
 £’000 £’000
Total unprovided deferred tax assets are as follows:
Tax losses available 2,512 2,639
Other temporary differences - 18
Unprovided deferred tax asset 2,512 2,657
No deferred tax asset has been recognised on the grounds that there is insufficient evidence that the asset will be 
recoverable.
vii. Profit and loss account
The Directors have taken advantage of the exemption available under section 408 of the Companies Act 2006 and have not 
presented a profit and loss account for the Company alone. During the year ended 31 March 2013 the Company made a 
profit of £74,000 (2012: £1,478,000).
viii. Share capital
Allotted, called up and fully paid
 31 March 31 March 
 2013 2012 
 £’000 £’000
Other creditors 118 9
 118 9
vi. Provisions for liabilities and charges
v. Creditors: amounts falling due within one year
 Number of shares Nominal Value 
Share type   £’000
Ordinary shares of 0.25p each  
As at 1 April 2012 199,759,576 499
Shares issued under share option schemes 9,229,957 23
As at 31 March 2013 208,989,533 522 ANNUAL REPORT
2013
78
   Capital Share Share Profit 
 Share  ESOP redemption premium based and loss 
 capital reserve reserve account payment account 
 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 1 April 2012 499 - 198 695 440 9,640
Profit for the year - - - - - 74
Dividends paid in year - - - - - (407)
Shares issued under share option schemes 23 - - 636 - -
Shares acquired by Employee Benefit Trust - (128) - - - (38)
Share option charge - - - - 260 -
Balance at 31 March 2013 522 (128) 198 1,331 700 9,269
x. Share options and share based payments
Share options and share based payments are disclosed in note 22 to the Consolidated Financial Statements.
xi. Related party transactions
The Company has taken advantage of the exemption conferred by FRS 8 that transactions between wholly owned Group 
companies do not need to be disclosed. 
xii. Events after the balance sheet date
On 10 June 2013, the Group completed the acquisition of Veritape Limited, a provider of PCI DSS compliant call recording 
software and on premise secure payment solutions for initial consideration of £6.3m.
The initial consideration comprises of £5.2m of initial cash consideration to be funded by existing cash finances from the 
combined entity and £1.1m payable in Eckoh shares. Additional deferred consideration of up to £4.3m payable in cash of 
£1.7m and Eckoh shares to the value of £2.6m based on the share price at 10 June 2013, dependent on the achievement 
of profit before tax targets can be earned. To earn the entire deferred consideration, profit before tax of £3.6m must be 
achieved over the first 26 month period following 1 July 2013.
As the acquisition was finalised on the day that the accounts were signed, completion accounts have yet to be prepared and 
full disclosure cannot be provided in these statements.
Also, post year end the Directors are recommending that a final dividend for the year ended 31 March 2013 of 0.25 pence 
per ordinary share be paid to the shareholders whose names appear on the register at the close of business on 23 August 
2013 with payment on 20 September 2013. The ex-dividend date will be 18 September 2013. This recommendation will be 
put to the shareholders at the Annual General Meeting. Based on the shares in issue at the year end, this payment would 
amount to £0.5m.
ix. Share capital and reserves ANNUAL REPORT
2013
79 ANNUAL REPORT
2013
80
Directors and Company Secretary 
C.M. Batterham – Non-executive Chairman
C. Ansell – Non-executive Director
N.B. Philpot – Chief Executive Officer  
A.P . Moloney – Group Finance Director and Company Secretary
Solicitor
Travers Smith 
10 Snow Hill 
London 
ECA 2AL
Registered Office
Eckoh plc 
Telford House 
Corner Hall 
Hemel Hempstead 
Hertfordshire 
HP3 9HN
Registrar
Capita Registrars 
The Registry 
34 Beckenham Road 
Beckenham  
Kent 
BR3 4TU
Nominated Advisor  
and Nominated Broker
N+1 Singer Capital Markets 
Limited 
One Barthlomew Lane 
London 
EC2N 2AX
Banker
Barclays Bank plc 
11 Bank Court 
Hemel Hempstead 
Hertfordshire 
HP1 1BX
Auditor
KPMG Audit Plc 
Altius House 
One North Fourth Street 
Milton Keynes 
MK9 1NE
Shareholder information
Dealings permitted on Alternative Investment Market (AIM) of the London Stock Exchange.
Registered in England and Wales, Company number 3435822.
www.eckoh.com This report is printed on FSC® Mix material under 
certiﬁcate number SA-COC-002193.
FSC - Forest Stewardship Council®. 
Paper from well managed forests and other  
responsible sources. Eckoh UK plc
Telford House, Corner Hall 
Hemel Hempstead
Herts HP3 9HN
08000 630 730
tellmemore@eckoh.com
www.eckoh.com