Advanced Computer Software Group plc
Annual Report 2011
Innovation
& Efficiency
Advanced Computer Software Group plc Annual Report 2011
Advanced Computer Software Group plc
Munro House, Portsmouth Road, 
Cobham, Surrey KT11 1TF
T: 01932 584 000 
F: 01932 584 001 
E: investor-relations@advancedcomputersoftware.com Company information
Legal form
Public Limited Company
Country of incorporation
United Kingdom
Company number
5965280
Registered address
Munro House 
Portsmouth Road 
Cobham 
Surrey 
KT11 1TF
Nominated advisor and joint broker
Singer Capital Markets Limited 
1, Hanover St 
London 
W15 1YZ
Joint broker
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21, St James’s Square 
London 
SW1Y 4JP
Bankers
HSBC Bank Plc 
8, Canada Square 
London 
E14 5HQ
Auditors
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Arlington Business Park, 
Theale, Reading  
RG7 4SD
Solicitors
CMS Cameron McKenna LLP 
Mitre House 
160 Aldersgate Street 
London 
EC1A 4DD
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Advanced Computer Software Group is a leading  
provider of patient management software solutions for the 
healthcare sector, and back office solutions for businesses 
and organisations in both the public and private sectors. 
The Group has an annual turnover of £95m and over 850 
staff based in seven regional offices serving over 7,000 
customers within the UK.
Originally established to consolidate the fragmented 
primary care software market, the Group now comprises 
three divisions addressing the needs of both public and 
private sector organisations. 
The Health & Care division sells a range of products to  
the NHS and private sector including patient workflow 
management and case management for social care 
providers, mobile applications for care in the community 
and rostering applications for social care settings. 
The Business Solutions division provides accounting, 
payroll, HR and document management solutions to local 
authorities, healthcare organisations and companies 
across the private sector. 
Underpinning these divisions, the Group’s 365 Managed 
Services division supports the Group’s software portfolio in 
addition to providing managed services to a wide range of 
customers. By means of this common technology platform 
the Group is able to offer solutions in a variety of ways to 
best suit customers’ business needs including the provision 
of hosted Cloud-based solutions, such as Software as a 
Service (SaaS), which can be delivered as a fully managed 
service with software hosted either in the Group’s data 
centre or at customers’ own premises.
Contents
 
Overview 
1	 O p e r at i o nal 	 an d 	 finan c ial 	hi ghli ght s
2	 B u s in e s s 	 at 	 a 	 gl an c e
4	 C hair man ’ s 	 s t at e m e nt
6	 C hi e f 	 E x e c u t i v e’ s 	 s t r at e gi c 	 r ev i ew
B u s in e s s 	 r ev i ew 
8	 O p e r at in g 	 r ev i ew
1 2	 F inan c ial 	 r ev i ew
1 3 	 	 C o r p o r a t e 	 s o c ial 	 r e s p o n s ib ili t y	
s t at e m e nt
G o v e r nan c e
1 5	 B o ar d 	 o f 	 D ir e c t o r s
1 6	 D ir e c t o r s ’ 	 r e p o r t
1 9	 C o r p o r at e 	 g o v e r nan c e 	 s t at e m e nt
2 1 	 	 S t a t e m e nt 	 o f 	 D ir e c t o r s ’	
r e s p o nsib ilitie s
2 2 	 D ir e c t o r s ’ 	 r e mun e r a t i o n 	 r e p o r t
2 4 	 	 I n d e p e n d e nt 	 au di t o r ’ s 	 r e p o r t 	 t o	
the	m em ber s 	 o f 	 A d v a n ced	
Com pu ter 	 So f t w a re 	 Gro u p 	 p l c
F in a n c ial s	 
2 5	 C o n s o li dat e d 	 in c o m e 	 s t at e m e nt
2 6 	 	 C o n s o li d a t e d 	 s t a t e m e nt 	 o f	
c ompr e h e n s i v e 	 in c om e
2 7	 	 C o n s o li dat e d 	 b al an c e 	 s h e e t
2 8	 	 C o n s o li dat e d 	 c a s h 	 fl o w 	 s t at e m e nt
2 9	 	 C o n s o li dat e d 	 s t at e m e nt 	 o f 	 c han g e s	 
in 	 e qui t y
3 0 	 	 N o t e s 	 t o 	 t h e 	 c o n s o li d a t e d	 
fi n an c ial 	 s t at e m e nt s
5 7	 	 C o mp an y 	 b al an c e 	 s h e e t
5 8 	 	 N o t e s 	 t o 	 t h e 	 fi n a n c ial 	 s t a t e m e nt s	 
o f 	 t h e 	 C o mp an y
I b c 	 	 C o m p an y 	 inf o r ma t i o n
Profile
Innovation
& Efficiency Advanced Computer Software Group plc
Annual Report 2011
1
Overview Business review Governance Financials
Operational and 
financial highlights
Financial highlights
 Revenue up 216% to £95.4m (2010: £30.2m)  »
reflecting the acquisition of COA Solutions in 
February 2010 
–  Pro forma organic revenue growth
†
 of 10% 
for Health and Care division
 –  Pro forma organic revenue growth
†
 of 15% 
for 365 Managed Services 
 –  Approximately 57% of Group revenue  
is recurring and a further 35% is repeating 
business
 Adjusted EBITDA* up 235% to £24.1m   »
(2010: £7.2m)
 Profit from operations up 36% to £5.3m  »
(2010: £3.9m)
Adjusted pre-tax profit* up 209% to £21.0m  »
(2010: £6.8m) 
Adjusted EPS** up 171% to 4.6p (2010: 1.7p)  »
EPS up 9% to 1.2p (2010: 1.1p) »
Cash generated from operations £22.5m  »
(2010: £5.2m)
Net debt down to £31.2m (2010: £41.0m) »
Excellent revenue visibility: future contracted  »
revenues of £78m
Operational highlights
  Acquisition of two companies in the  »
community care sector
Successful integration of COA acquisition   »
and realisation of more than £2m annualised  
cost savings
*  Adjusted EBITDA and pre-tax profit: before one-off restructuring costs,  
share based payments and amortisation of acquired intangible assets.
**  Adjusted EPS: before one-off restructuring costs, share based payments, 
amortisation of intangible assets and tax adjustments.
†   Organic growth is calculated using the pro forma results for 2011 and 2010  
as if all acquisitions were present on the 1st March 2009.
These results report on the Group’s third year of trading 
and the first full year of trading following the acquisition 
of COA Solutions in February 2010. Advanced Computer Software Group plc
Annual Report 2011
2
Business at a glance
The Group is structured as three complementary divisions, 
each with its own management team and portfolio of products 
and services. 
Health & Care is focussed on the provision of patient workflow 
management and case management solutions for out-of-hours 
and community care providers. Business Solutions supplies 
accounting and back office solutions to public sector 
organisations and the private sector. 365 Managed Services 
delivers services in support of the Group’s products and to a 
wide range of customers including financial services providers, 
local authorities and retail organisations.
The Group continues to look for opportunities to sell its core 
products in new markets and its mobile products for the 
healthcare sector – iNurse and iConnect, which are derived 
from the patient workflow management software, have been 
well received.
Cross-selling is an important revenue generator for the Group 
and a particular focus has been on the collaboration of the 
Business Solutions and 365 Managed Services divisions to offer 
integrated hosted solutions for local authorities allowing them 
to benefit from shared services arrangements.
The development of Cloud technology was a priority during 
the year and the Group has invested in new infrastructure  
and equipment for its datacentre to meet the anticipated 
demand for outsourcing as pressure mounts for businesses  
and organisations to reduce costs. Advanced Computer Software Group plc
Annual Report 2011
3
Overview Business review Governance Financials
Market
 365 Managed Services provides  »
a full range of outsourcing 
services to both the public and 
private sectors together with 
the provision of group software 
offerings delivered as Cloud 
enabled services.
Market
 Business Solutions delivers a  »
range of software solutions to  
a wide variety of customers in 
the healthcare, financial services, 
banking, retail, transport, not for 
profit and housing sectors. 
Market
The Health & Care division is   »
a leading supplier of patient 
workflow and patient care 
management systems for urgent 
and unplanned care, home care, 
residential care, end of life and 
hospice care, private clinics and 
environmental health clinics. 
Health & Care  Business 
Solutions
365 Managed 
Services
Products
 Adastra   »
(patient work flow management)
Crosscare   »
(patient care management)
iNurse/iConnect   »
(mobile solutions for district 
nurses and carers)
Summary Care Record/  »
End-of-Life Register  
(patient record management)
Staff Plan/Origin   »
(rostering and scheduling 
solutions)
Caresys and Saturn   »
(community care management) 
Products
e5, efinancials   »
(financial and human capital 
management)
Analytics  »
(corporate, financial and  
people analytics)
Open Accounts/e2  »
(financial management)
Collaborative Planning/ »
Clearview 
(budgeting and forecasting)
Open People/ASR/eHRM  »
(human capital and payroll 
management)
EROS  »
(procurement)
Version One  »
(document management)
Services
 A full range of services including  »
application hosting, management, 
bespoke development, website 
maintenance, and e-commerce 
solutions. 
Revenue 
£1 9.6m
£3.5m
Adjusted EBITDA
Revenue 
£55.8m
£16.6m
Adjusted EBITDA
Revenue 
£20.0m
£6.4m
Adjusted EBITDA Advanced Computer Software Group plc
Annual Report 2011
4
Chairman’s statement
Michael Jackson 
Chairman
I am pleased to report an excellent set  
of results for the first full year of trading 
following the acquisition of COA Solutions 
in February 2010 – which transformed  
the Group in terms of both scale and 
addressable markets. Advanced Computer Software Group plc
Annual Report 2011
5
Overview Business review Governance Financials
Revenues rose by 216% to £95.4m (2010: £30.2m), 
including organic growth of 4%, and adjusted EBITDA* 
rose 235% to £24.1m (2010: £7.2m) giving an improved 
adjusted EBITDA margin of 25%. Operating cash 
conversion** continues to be strong at 93% and  
net debt has decreased by £9.8m to £31.2m.
Approximately 57% of revenues were derived from 
maintenance, hosting and managed service contracts 
from the installed base of over 7 ,000 customers. 
Significantly our customer retention rate remained  
in excess of 95%, reflecting our focus on delivering  
value and excellent customer service.
A major focus for the year has been the integration  
of three recently acquired businesses: COA Solutions, 
acquired at the close of the previous financial year; 
Cerrus in March 2010 and Caresys in September 2010.
COA Solutions, now forming the major part of the 
Business Solutions division and specialising in financial 
and human capital management systems for the 
health, public and private sectors was, at £99.3m,  
our largest acquisition to date. The acquisition has 
transformed the Group, not only by contributing £57.5m  
of revenues and £16.8m of EBITDA, but also by providing 
a robust platform for future expansion. 
The acquisitions of Cerrus Ltd and Caresys Software Ltd, 
both providing solutions for the management of care, 
resource planning and operational requirements, 
extended our offering to community health and  
social care providers – a fragmented market that we 
believe offers opportunities for growth given the UK’s 
ageing population.
Our offshore development facility in Bangalore continues 
to thrive. We have also switched the development 
facility in Vietnam, which we gained as part of the 
acquisition of COA Solutions, to Bangalore in order  
to manage the development of the next generation  
of our products efficiently.
The Comprehensive Spending Review and NHS reforms 
set out in the July 2010 White Paper, have considerably 
changed Government spending plans during the year. 
The focus is now firmly on cost reduction, with increased 
demand for outsourcing and shared services. We have 
successfully addressed these three key requirements by 
continuing to provide innovative ways to reduce costs 
and increase efficiency via our mobile application 
portfolio and by collaborating, both across our business 
divisions and with our strategic partners, to offer a 
shared platform to local authorities and other public 
sector organisations. The ability to deliver our in-house 
software via the Cloud or as a managed service 
provides our customers with a further opportunity  
to reduce costs.
Following the annual review of our corporate 
governance policy and procedure, the Board believes 
that the appointment of an independent non-executive 
director is now appropriate and has commenced the 
search for a suitable candidate.
The Board has also considered whether the payment  
of a dividend is appropriate for the current year and  
has concluded that the payment of a dividend should 
remain on the agenda but be carried forward until such 
time as the Group’s bank debt was substantially repaid.
We have achieved a great deal during the year and 
believe our plans to grow and develop Advanced’s 
portfolio of healthcare and back office solutions will 
ensure an exciting and productive future. I thank my 
fellow directors and all Group employees for their 
willingness and determination to drive the business 
forward in these challenging times.
Michael Jackson
Chairman
15 July 2011
*  Adjusted EBITDA is defined as profit from operations before interest,  
tax, depreciation, one-off restructuring costs, share based payments  
and amortisation of acquired intangible assets.
**  The operating cash conversion rate is calculated as cash generated  
from operations as a percentage of acquired adjusted EBITDA pre 
capitalisation of research and development expenditure and post  
one-off reorganisation costs. Chief Executive’s strategic review
With over 7 ,000 customers and more  
than 850 employees, Advanced is  
now the fifth largest UK provider of 
software to the UK market (source: 
Techmarket 2010). In less than three 
years, turnover has grown from  
£7 .3m to £95.4m.
Vin Murria 
Chief Executive
Advanced Computer Software Group plc
Annual Report 2011
6 Advanced Computer Software Group plc
Annual Report 2011
7
Overview Business review Governance Financials
Originally formed to consolidate a fragmented 
healthcare sector, we have identified and acquired  
four businesses since 2009 enabling us to extend our 
initial core patient management software offering for  
the primary care sector to community and social  
care providers. 
In 2009, finding that many healthcare businesses  
were overvalued, we broadened our search to include 
targets offering managed services and back office 
applications that could either be cross-sold into health 
and care organisations or provide a platform for growth 
into other niche markets. 
The acquisition of Business Systems Group Holdings plc 
providing managed services, hosting and Cloud 
enablement to a wide range of customers in the 
financial services, retail and not for profit sectors  
took place in June 2009. 
The acquisition of COA Solutions specialising in 
accounting and back office software solutions followed in 
February 2010 and not only increased our revenues and 
profits significantly , but also provided us with an efficient 
and robust infrastructure and experienced management 
team to use as a platform for future expansion.
During the year, we strengthened our product range  
for community care and social care providers through 
the acquisition of Cerrus and Caresys, each providing 
complementary case management and administrative 
support applications. The functionality of the two main 
products has been combined in one product going 
forward to streamline future development and improve 
the customer experience and we believe we are now 
well-placed to benefit from the surge in the community 
and social care market that will inevitably result from 
the rapidly ageing population and the push for care  
in the community.
In addition to integrating our acquisitions, we have 
retained our focus on organic growth and continue  
to develop our core patient management software 
applications to take advantage of new opportunities  
in healthcare. We have set up strategic partnerships 
with major mobile telephony organisations to expand 
the reach of our time-saving and cost-effective iNurse 
and iConnect mobile applications for district nurses  
and community carers. Our solutions for summary 
patient care record and end-of-life register management 
are now widely in use across the UK and our solutions 
for case management and rostering, which are ideal  
for private healthcare and social care settings, are set  
to grow as a result of the NHS reform.
Cross-selling was a significant contributor to the Group’s 
results for the year, largely due to the collaboration of 
the Business Solutions and Managed Services divisions 
in supplying integrated hosted solutions for local 
authority shared services and healthcare organisations. 
We expect shared services to be increasingly specified 
by local authorities as pressure to cut costs continues  
to mount and we are confident that our solution  
works efficiently and securely with a clear resulting  
cost saving.
We have maintained our focus on operational 
performance, with cost reduction and efficiency 
measures high on the agenda. We have delivered  
the planned annualised savings of more than £2m 
following the integration of COA Solutions into the  
Group with synergies achieved from rationalising 
development centres, properties and senior 
management. These synergies contributed to the 
increased Group operating margin of 25% and  
at the same time, skills and processes were made 
available to the Group as a whole to optimise 
operational efficiency.
Outlook
We will continue to build and develop market-leading 
positions in our core markets of healthcare and business 
solutions. Future Health & Care acquisitions include 
further extensions of our patient care management 
software, whilst for Business Solutions we will be 
targeting businesses with complementary products  
to broaden our portfolio of back office solutions and 
provide further opportunities for cross-selling. 
I am very happy with progress made during the year 
and am looking forward to the next stage of building  
a substantial and increasingly profitable business for  
the future.
Vin Murria 
Chief Executive Officer 
15 July 2011 8 Advanced Computer Software Group plc
Annual Report 2011
Operating review
Health & Care 
Working with partners in the NHS, local government 
and the private sector, the Health & Care division 
provides versatile market-leading IT solutions in support 
of safe and efficient care delivery for the patient and 
greater information for the care provider. 
Advanced’s initial core software offering for patient 
management in the primary care sector has been 
extended by the acquisitions made during the year  
to encompass patient care management for social, 
community and private care providers. 
As a result of these acquisitions Advanced is now the 
leading supplier of IT to health and social care providers 
and well placed to deliver technology solutions that 
address the urgent demands of an ageing population.
These demands and government calls for cost 
reductions in the NHS have both played to the Group’s 
strengths. The division’s products all help providers to 
deliver care in the most cost-effective way. With the 
focus on delivery of care in the community, Advanced’s 
mobile applications iNurse and iConnect are generating 
considerable interest, not only from organisations keen 
to deliver better care for less, but also from mobile 
telephony providers who see an opportunity to generate 
incremental revenues.
Results for the Health & Care division were excellent with 
revenue organic growth of 10% and EBITDA organic 
growth of 32%. 
Highlights of the year included:
•   Increased take-up of End of Life Care Register and 
Summary Care Record 
•   iNurse and iConnect users increased to 7 ,000
•  94 homecare providers, 65 care homes and nine 
hospices took the Group’s software solutions
•  21 urgent care/walk-in centres and 16 point  
of access clinics were added to the customer base
Advanced is well placed to deliver 
technology solutions to address the  
urgent demand of an ageing population.
Case study: End of Life Care 
Register helps to deliver 15% 
reduction in hospital deaths
Advanced’s End of Life Care Register (EOLCR) has 
helped Weston Area Health Trust to deliver a 15% 
reduction in hospital deaths. The EOLCR is visible 
across the whole health community and can be 
seen by hospital teams, accident and emergency 
departments, GP practices, community nurses, 
ambulance services and hospices. Dying in one’s 
place of choice is seen as a key marker of the 
provision of high quality end of life care, and  
EOLCR has been instrumental in communicating 
patients’ wishes on this sensitive issue.
Reducing hospital death rate is significant not  
only from a quality perspective but also for 
containing costs.
In the case of Weston Area Health Trust, these 
savings have been successfully reinvested in 
community services.
Innovation
& Efficiency 9
Overview Business review Governance Financials
Advanced Computer Software Group plc
Annual Report 2011
Business Solutions 
The Business Solutions division provides accounting, 
payroll, HR and document management solutions  
through its two business units, Public Sector and Private 
Sector, each aligned to its customer base and with its 
own management and product suite.
The Public Sector business unit’s results were steady 
despite the cut-backs in public spending announced  
as part of the Government’s Comprehensive Spending 
Review in July 2010 and plans for widespread reform  
of the National Health Service. 
Advanced’s experience in successfully implementing 
shared services for local authorities, combined with the 
ability to deliver all or any of its software solutions as  
a managed service or via the Cloud, means that the 
Group is in a strong position to benefit from the cost-
cutting pressures being exerted by central government.
The Private Sector business suffered from a poor start to 
the year, which impacted both revenues and EBITDA. 
However, the appointment of new senior management 
at the half year, and the ability to provide Cloud-based 
integrated solutions delivered by the 365 Managed 
Services division, has re-energised the business resulting 
in the sales pipeline at the year-end being up 44% over 
the previous year. 
New business wins include London Metal Exchange, 
British Gymnastics Council and Crisis. New partners 
included Experian Payments, who collaborated with 
Advanced to cut transaction costs and improve 
payment efficiency within the public sector by linking 
the Group’s customers to the Experian bank account 
validation software.
The Group is in a strong position to benefit 
from Government cost cutting measures.
Innovation
& Efficiency
Case study: NHS Wakefield 
District invests in leading  
edge BI solution
NHS Wakefield District is one step ahead of the 
NHS transformation thanks to a comprehensive 
business intelligence solution from Advanced 
Business Solutions.
Since introducing the solution in January 2010, 
significant time savings in generating critical, 
decision-supporting reports have been achieved. 
Reports that would have taken days to produce  
can now be processed in less than an hour.  
Rachel Spilsbury, Head of Information says,  
“We have visited several GP practices throughout 
the district and used the information from ABS’ 
solution as a basis to guide these discussions.  
This has enabled us to work much more closely 
with GP Consortia, and provide information  
more swiftly and in greater detail to support 
commissioning decisions. The solution also allows  
us to update information to reflect changes on  
the ground so that commissioners can see the 
effects of their actions.” 10 Advanced Computer Software Group plc
Annual Report 2011
Operating review
365 Managed Services 
This division offers a full outsourcing solution including 
desktop-to-data centre service delivery, IT Infrastructure 
outsourcing, application development, corporate 
strategising and Cloud enablement. Services are 
delivered either as a hosted solution managed via the 
Advanced data centre suite or as a hybrid solution 
utilising a combination of delivery channels.
The Group has invested significantly  
in new infrastructure and equipment  
for its data centre.
365 Managed Services performed well during the year 
with 15% organic revenue growth and organic EBITDA 
growth up by 110%. The move to outsourcing and 
utilisation of shared services to reduce costs, particularly 
in the public sector, has resulted in a strong pipeline  
of opportunity with further growth anticipated in the 
near term.
The development of Cloud technology has been a 
particular focus during the year. The Group has invested 
significantly in new infrastructure and equipment  
for its data centre. Cross selling with other Group 
businesses supplying proprietary software has proved  
to be successful and 450 of Advanced’s customers  
are already Cloud-enabled with delivery via a private 
cloud (dedicated services with unique configuration) or 
application cloud (configurable application delivery).
Case study: NMC signs  
£5.2 million contract with 
Advanced 365
The Nursing and Midwifery Council (NMC), the 
regulator for over 660,000 registered nurses and 
midwives in England, Wales, Scotland, Northern 
Ireland and the Channel Islands, signed a five year 
contract worth up to £5.2 million with Advanced 
365 in August 2010.
Jo Ingham, Interim Head of ICT, NMC says: “It is 
clear that Advanced 365 can deliver enhanced 
service levels, expertise and security as well as  
an effective disaster recovery solution. The NMC  
is the regulator for nurses and midwives and  
not a maintainer of IT services and so we require 
dedicated IT specialists managing and supporting 
our networks and servers. With Advanced 365 
on-board, we are confident that our IT infrastructure 
will operate effectively and securely and will be 
managed by a team of knowledgeable and highly 
qualified IT experts.”
Innovation
& Efficiency 11
Overview Business review Governance Financials
Advanced Computer Software Group plc
Annual Report 2011
Current trading and outlook
The Group’s solutions offer compelling benefits in an 
economic climate where cost reduction, increased 
demand for outsourcing and shared services are high 
on the agenda. 
Based on the first quarter results, current trading is  
in line with Board expectations and all divisions are 
reporting high levels of activity and growing pipelines. 
Further cross-selling wins have been signed since  
the year end, including a significant five year contract  
with Tees, Esk and Wear Valleys Foundation Trust  
to provide a new system based on the Group’s Business 
Intelligence software delivered by 365 Managed Services. 
Advanced’s mobile applications iNurse and iConnect 
are generating considerable interest, not only from 
organisations keen to deliver better care for less,  
but also from mobile telephony providers who see  
an opportunity to generate incremental revenues.
There are further opportunities for significant growth, 
particularly in the Health & Care and Managed 
Services divisions. Business Solutions remains steady  
and resilient, offering strong cash generation and 
opportunities for cross-selling, particularly between  
the Public Sector business unit and 365 Managed 
Services as a result of government cost-cutting initiatives 
spurring local authorities to explore the concept of 
shared services and outsourcing.
The Group will continue to build and develop market-
leading positions in its core markets of healthcare  
and business solutions. Future Health & Care 
acquisitions include further extensions of the patient 
care management software, whilst for Business Solutions 
the Group will be targeting businesses with 
complementary products to broaden its portfolio of  
back office solutions and provide further opportunities  
for cross-selling. 
The Board believes that Advanced is in a very good 
position for future growth. Turnover is underpinned  
by strong recurring revenues, giving excellent revenue 
visibility , and low customer churn, whilst profits are 
being maximised by an efficient infrastructure and  
firm cost management. 12 Advanced Computer Software Group plc
Annual Report 2011
Financial review
Results
Revenue
Group turnover for the year more than trebled to £95.4m 
(2010:£30.2m), reflecting the impact of the acquisition of 
COA at the end of the last financial year.
The Health & Care division grew by 27% to £20.0m 
(2010:£15.7m) overall, 10% organically. Revenue  
of £1.4m was contributed by Cerrus and Caresys.  
The organic growth was largely due to sales of recently 
launched products and improved performance from the 
community care products. 
The Business Solutions division, which includes Public 
Sector revenues of £34.3m, reported revenue of £55.8m 
(2010: £2.7m), 1% down on the previous year’s pro forma 
revenue. Public Sector revenue was steady with the 
Private Sector unit down 4%, due to a poor start to  
the year arising from the absence of a dedicated 
management team. This has now been remedied  
and the performance of the unit has improved.
365 Managed Services revenue increased 66% to  
£19.6m (2010: £11.8m), 15% organically. This division  
has particularly benefitted from the expanded Group 
customer base, following the acquisition of COA.
   365
 Health & Business Managed Central Group
 Care Solutions Services costs results
Revenue £m 20.0 55.8 19.6   95.4
Adjusted EBITDA £m 6.4 16.6 3.5 (2.4) 24.1
Adjusted EBITDA  
percentage 32% 30% 18%   25%
Adjusted EBITDA 
Group adjusted EBITDA (EBITDA before one-off 
restructuring costs and share based payments) rose 
235% to £24.1m (2010: £7.2m) with Group pro forma 
adjusted EBITDA rising from £19.8m to £24.3m, clearly 
illustrating the annualised cost synergies of over £2m 
realised from the COA acquisition and the general focus 
on controlling costs.
Health & Care adjusted EBITDA was £6.4m (2010: £6.1m), 
Business Solutions was £16.6m (2010: £0.5m) and 365 
Managed Services was £3.5m (2010: £1.6m).
Pro-forma results
The table below shows the pro-forma operating results of 
the Group’s trading subsidiaries as if the results of all the 
acquisitions made during the year had been included 
from 1 March 2010.
   365
 Health & Business Managed Central Group
 Care Solutions Services costs results
Revenue £m 21.0 55.8 19.6   96.4
Adjusted EBITDA £m 6.6 16.6 3.5 (2.4) 24.3
Adjusted EBITDA  
percentage 31% 30% 18%   25%
Group’s segments 
The Group’s divisional analysis is based on the type  
of software or services supplied to the customer base.  
For the Health & Care division, this is patient care 
management software and services and the rostering 
and scheduling of carers. The Business Solutions division 
supplies financial management and HR software and 
services. 365 Managed Services division supplies 
hosting, managed services and systems development.
The Board believes that the classification of results by the 
type of software and services supplied reflects the way 
the Group is managed and this methodology is used for 
segmental analysis in the financial statements 2011.
Gross profit margin 
Gross profit, calculated as turnover less third party 
software and services, was 83% (2010: 76%) reflecting 
the higher proportion of software and services in the 
Group mix following on from the acquisition of COA.
Pre-tax profit
Reported pre-tax profit was £3.1m (2010: £4.2m) 
reflecting the non cash charge of £15.4m (2010: £2.0m) 
for amortisation of intangible assets relating to 
acquisitions, and higher finance costs following the  
COA acquisition.
Taxation 
The Group has recognised a tax credit for the year of 
£1.0m (2010: charge of £1m). The effective rate of (33%) 
(2010: 24%) has been driven by adjustments to deferred 
tax as a result of the change in the UK Corporation  
tax rate (credit of £0.7m) and a reassessment of the 
likelihood of the group being able to utilise trading 
losses and capital allowances following the successful 
integration of its acquired businesses (credit of £1.5m). 
The effective rate excluding these adjustments would  
be 38% which is higher than the statutory rate of 28%  
as a result of non-tax deductible expenses of £0.4m less 
additional R&D relief of £0.1m.
The Group has trading losses of £1.8m available for 
utilisation against future profits.
Earnings per share 
Adjusted earnings per share was up 171% to 4.6p  
(2010: 1.7p). Reported earnings per share were up 9%  
to 1.2p (2010: 1.1p) The Group is not paying a dividend. 13
Overview Financials
Advanced Computer Software Group plc
Annual Report 2011
Business review Governance
Corporate social 
responsibility statement
The Group’s corporate and social responsibility  
priorities are:
Customers
The Group is committed to achieving the highest  
levels of customer service and satisfaction in line with 
delivering high-quality , reliable products and services.
Health & Care
The Group provides clinical and back-office software 
and services to customers in the healthcare sector  
and is conscious of its responsibility to provide robust,  
often mission-critical, solutions that affect the lives  
and well-being of patients and vulnerable people 
requiring care.
To keep the Group’s products and services up to date  
and in line with new healthcare initiatives, we regularly 
undertake clinical review meetings with practicing  
GPs and continuously monitor our performance on 
service incidents.
365 Managed Services
The Group works closely with customers to identify and 
provide cost-effective services to optimise their business’ 
quality and efficiency. The Group appreciates that  
these services are critical to its customers’ own business 
success and therefore services are governed by service 
level agreements to demonstrate the commitment to 
providing those services.
Business Solutions
The Group provides accounting and human capital 
management solutions to a wide variety of commercial 
enterprises, which are designed to improve business 
efficiency. Advanced consistently invests significant 
sums in the development of its products to offer its 
customers best-of-breed solutions.
Employees
The Group aims to maintain a high level of staff 
retention by providing a positive work environment  
in which all staff can thrive. This is illustrated by  
(i) recognising and rewarding outstanding performance; 
(ii) investing in training and personal development;  
and (iii) ensuring that career success and progression 
within the Group is solely determined by ability  
and achievement.
The Group firmly believes in equal opportunities  
and treats all potential recruits and employees fairly, 
regardless of disability, race, gender, age, gender 
orientation or religious and political beliefs.
Health and safety
The Group is committed to providing a safe and healthy 
environment for all its staff, contractors and visitors and 
delegates responsibility to the managing directors  
of each businesses unit who are accountable for the  
health and safety of their business unit. Each business  
unit reviews its own strategy , issues and performance  
on a regular basis.
Advanced recognises its corporate social responsibility  
and is committed to carrying on business responsibly  
and to managing its relationships with stakeholders with 
integrity and transparency. The Group provides products  
and services to organisations in both the public and the 
private sectors through its three divisions and takes the 
reliability of its products and the delivery and efficiency  
of its services seriously. Advanced’s solutions are directed 
towards offering its customers more cost-effective, secure  
and better ways to manage their operations. 14 Advanced Computer Software Group plc
Annual Report 2011
Donations
The Group’s supports various local community projects 
from time to time and also contributes financial  
support to charitable organisations. In the year ended 
28 February 2011, £1.4m of the Chief Executive Officer’s 
salary was waived by her and an equivalent amount 
plus the ENIC saved was paid to PS Foundation. 
Environment
The Group recognises the importance of its 
responsibilities to the environment and follows 
environmental regulations at all times. 
Travel
The Group encourages the use of conference calls  
and tele-conferences wherever possible to minimise 
business travelling.
Recycling
The Group encourages recycling and appropriate 
facilities are provided in all offices.
Electricity, gas and water usage
The Group is aware that these are finite resources  
and business units are encouraged to apply for 
environmental accreditation where appropriate. 
Advanced 365 Limited (formerly Business Systems  
Group Limited) holds the Environmental Management 
System accreditation ISO 14001.
Environmental initiatives
Version One plants a tree each time a customer makes 
a software purchase and a reseller facilitates the sale. 
For every batch of 100 trees planted, ten refurbished 
computers are shipped to Africa for use by African 
school children. Version One has planted over 4,000 
trees since the scheme was launched in 2006.
Version One’s environmental initiative, The Clean and 
Green Project, has introduced new, innovative green 
measures across Version One to further improve its 
environmental credentials by ensuring staff are familiar 
with its environmental agenda and by encouraging 
customers, suppliers and partners to become as green 
as possible.
For further information about Version One’s Clean and 
Green Initiative please refer to www.versionone.co.uk/
news/clean-and-green-2009.php.
Environmental awards
Recent awards won to add to the Group’s collection 
include:
Version One Limited, in partnership with Blenheim 
Palace, won the Environmental Project of the Year 
category at the Green IT Awards 2011 for their project  
to electronically process and store the 20,000 financial 
documents handled by the Palace each year.
Version One won the ‘Best Carbon Offsetting Scheme  
of the Year’ category at the Green IT Awards 2010 for  
its tree planting scheme.
Advanced Business Software and Solutions Ltd (formerly 
COA Solutions Limited) received a gold award at the 
2010 National Green Apple Environmental Awards in 
recognition of the environmental benefits of its electronic 
payslips module. Version One was also presented with a 
Green Apple Environment Award for the development of 
its electronic document management (EDM) green meter.
Corporate social 
responsibility statement
continued 15
Overview Business review Governance Financials
Advanced Computer Software Group plc
Annual Report 2011
Board of Directors
Barbara Firth, Chief Financial Officer
Barbara has many years of experience in senior 
managerial and financial roles and was previously Chief 
Financial Officer of Computer Software Group plc where 
she worked closely with Vin Murria and Michael Jackson 
until the merger with IRIS Software Group Limited in July 
2007 . Following the merger Barbara was Acquisitions 
and Integration Director of the newly combined group 
until joining Advanced in September 2009.
Vin Murria, Chief Executive Officer
Vin joined Advanced in August 2008 as Chief Executive 
Officer and has over 20 years’ experience of working  
for private equity backed and publicly listed companies 
focusing on the software sector. She was formerly Chief 
Executive Officer of Computer Software Group plc, which 
was taken private in April 2007 and subsequently 
merged with IRIS Software Group Limited before  
being sold in July 2007 to Hellman & Friedman in a 
transaction worth £500m. Vin is a partner at Elderstreet 
Capital and a Non-Executive Director of Greenco plc.
Mark Watts, Non-Executive Director
Mark became a Non-Executive Director of Advanced  
in August 2008 and is also Chairman of the 
Remuneration Committee. He is joint managing partner 
in Marwyn Capital LLP and Marwyn Investment 
Management LLP and a director of many portfolio 
companies including Melorio plc, Praesepe plc and 
Silverdell plc. At Marwyn, Mark and fellow managing 
partner James Corsellis have undertaken over 50 
transactions, raising approximately £1bn in acquisition 
funding for Marwyn-backed management teams and 
special purpose acquisition vehicles to date.
Michael Jackson, Chairman 
Michael became Chairman of Advanced in August 
2008 and is also Chairman of the Audit Committee.  
He founded Elderstreet Investments Limited in 1990  
and is its Executive Chairman. For the past 25 years,  
he has specialised in raising finance for, and investing 
in, the smaller companies sector. Michael was 
previously Chairman of The Sage Group plc, Computer 
Software Group plc and Party Gaming plc. He is also  
a director and investor in many other quoted and 
unquoted companies. 16 Advanced Computer Software Group plc
Annual Report 2011
Directors’ report
Principal activities
Advanced is a leading provider of technology solutions 
to the healthcare, public and private sector delivered 
through its three divisions Health & Care, Business 
Solutions and 365 Managed Services.
Results and dividends
The Group profit for the year after provision for taxation 
was £4.2m (2010: £3.2m). The Board’s current dividend 
policy is to invest cash flow in its operations and 
accordingly the Directors do not recommend the 
payment of a dividend for the year (2010: £nil).  
The dividend policy is kept under regular review.
Acquisitions
The Group made two acquisitions during the year, 
further details of which are set out in note 11 to the 
financial statements. 
Post balance sheet events
Open Logistix Systems Limited was acquired  
on 4 March 2011 as disclosed in note 26 to the  
financial statements.
Principal risks and uncertainties
The Board considers that the principal risks and 
uncertainties facing the Group can be classified  
as follows:
Business review
A review of the principal activities of the Group, key 
performance indicators, principal risks and uncertainties 
and its financial performance is provided in the 
Chairman’s statement, the Chief Executive’s review,  
the business review and the financial review – all of 
which are incorporated into this report by reference.
Going concern
The financial statements have been prepared on  
a going concern basis as, after making appropriate 
enquiries, the Directors have a reasonable expectation 
that the Group has adequate resources to continue to 
operate for the foreseeable future.
Research and development
During the year the Group capitalised £1.7m (2010: 
£0.3m) of development costs relating to internal software 
development in accordance with IAS 38. Other research 
and development costs not meeting the criteria for 
capitalisation were written off during the year.
The Directors present their annual report and the audited financial statements of Advanced Computer Software 
Group plc (the Company) and the Group for the year ended 28 February 2011.
Risk
Business risks
Markets fall into decline
Failure to execute M&A strategy successfully
Failure to innovate, technical obsolescence
Financial risks
Financial performance deteriorates 
Inability to finance growth or acquisitions
Market expectations not met
Compliance risks
Health & safety regulations breached
Bribery Act non-compliance 
Failure of internal control systems
Breach of AIM rules
Operational and other risks
Physical disaster and business continuity failure 
Loss of key employees
Loss of intangible assets
Loss of customers
Mitigation
Regular evaluation of existing markets and 
consideration of new markets
Communication and close monitoring of integration plans
Development roadmap Regularly reviewed
Monthly performance reviews and reforecasts,  
tight cost control
Investor relations programme
Close contact with key advisers
Company policy maintained and monitored
Company policy maintained and monitored
Ad hoc testing and periodic review
Education of senior management and regular interface 
with NOMAD
Business continuity and disaster recovery plan  
regularly revisited
Incentive plans and benchmarking reviewed annually
Contractual protection for IP in place
Customer satisfaction surveys regularly undertaken 17
Overview Business review Governance Financials
Advanced Computer Software Group plc
Annual Report 2011
Financial instruments
Financial instruments, including financial risk 
management objectives and policies and policies  
for hedging, exposure to price risk, credit risk, liquidity 
risk and cash flow risk are disclosed in note 20 to the 
financial statements. 
Political and charitable contributions
The Group made charitable contributions during the 
year of £1.6m (2010: £0.2m) relating to the waiver  
of Chief Executive’s salary , including the associated 
Employers National Insurance Contribution saving, 
which were donated to PS Foundation, registered  
charity no 1123570.
In accordance with the Board’s policy no political 
donations were made during the year.
Employees
The Group’s culture is to promote the involvement of  
all its staff in its business aims and performance by 
linking reward to achievement. Many employees are 
stakeholders in the business through participation in 
share option and Sharesave schemes.
The Group adopts an equal opportunities policy under 
which training and career development opportunities 
are available to all employees regardless of gender, 
religion, race, disability or sexual orientation. Fair 
consideration is given to applications for employment 
from disabled people and the retention and retraining, 
where practicable, of employees who become disabled 
is encouraged.
Directors
The Directors who held office during the year ended  
28 February 2011 were as follows:
Vinodka Murria Chief Executive Officer
Barbara Firth Chief Financial Officer
Michael Jackson Non-Executive Chairman
Mark Watts Non-Executive Director
Details of the remuneration of all Directors who served 
during the year and their interests in the ordinary share 
capital of the Company are given in the Directors’ 
remuneration report.
The Group maintained cover during the year for its 
Directors and Officers and those of subsidiary companies 
under a Directors’ and Officers’ liability insurance policy, 
as required by the Companies Act 2006.
Substantial shareholdings
At the date of this report, the Company has been 
notified of the following holdings of 3% or more of its 
issued ordinary capital:
  Percentage of
Fund manager  issued share capital
M&G Investment Management 14.94%
Marwyn Investment Management 11.79%
Dowgate Capital, stockbrokers 10.91%
BlackRock  10.57%
Vin Murria*  10.16%
Fidelity Investments  4.71%
Royal London Asset Management 4.34%
JPMorgan Asset Management 3.74%
Nick Gerard  3.66%
Majedie Asset Management 3.06%
* The percentage of issued share capital held by Vin Murria at the date of this 
report includes the growth interest in 17,761,651 shares awarded to her on 
4 March 2010.
Share capital
Details of the authorised and issued share capital, 
together with details of the movement in the Company’s 
issued share capital during the year are shown in note 
24 to the financial statements.
At the date of this report the Company consisted of 
354,880,592 issued and fully paid ordinary shares with a 
nominal value of 10p per share, listed on the Alternative 
Investment Market of the London Stock Exchange.  
Of these, 17 ,761,651 shares were held jointly by the 
Employee Benefit Trust and Vin Murria. The Company 
has one class of ordinary shares which carry no right  
to fixed income. Each share carries the right to one vote  
at general meetings of the Company. The Trustee of the 
Employee Benefit Trust and Vin Murria have agreed to 
abstain from voting at any general meeting in respect 
of the jointly owned shares.
There are no specific restrictions on the size of holding 
nor on the transfer of shares which are both governed 
by the general provisions of the Articles of Association 
and prevailing legislation. The Directors are not aware 
of any agreements between holders of the Company’s 
shares than may result in restrictions on the transfer  
of securities or voting rights.
No person has any special rights of control over the 
Company’s share capital and all issued shares are  
fully paid.
Details of employee share schemes are set out in note 25 
to the financial statements. 18 Advanced Computer Software Group plc
Annual Report 2011
Significant agreements
There are a number of agreements that take effect,  
alter or terminate upon a change of control such as 
commercial contracts, bank loan agreement and 
employee share plans. The only one of these which is 
considered to be significant in terms of likely impact on 
the business of the Group as a whole, is the bank facility 
(as described in note 20 to the financial statements) 
which requires majority lender consent for any change 
on control. Should such consent not be forthcoming,  
a change of control would trigger a mandatory 
repayment of the entire facility.
The Directors are not aware of any agreements between 
the Company and its Directors or staff that provide  
for compensation for loss of office or employment that 
occurs because of a change of control.
Supplier payment policy
The Group recognises the importance of good 
relationships with its suppliers and subcontractors. 
Although the Group does not follow any particular  
code or standard on payment practice, its established 
payment policy is to agree payment terms in advance 
of any commitment being entered into and to  
ensure that payments are made in accordance  
with agreed terms.
Trade creditor days for the Group for the year ended  
28 February 2011 were 30 (2010: 48).
Auditors
The Directors confirm that, as at the date this report  
was approved, and so far as each Director is aware, 
there is no relevant audit information of which the 
Group’s auditors are unaware and that each Director 
has taken all the steps that he ought to have taken as a 
Director in order to make himself aware of any relevant 
audit information and to establish that the Group’s 
auditors are aware of that information.
KPMG Audit Plc, who were appointed on 8 March 2011 
following BDO LLP resignation, have expressed  
their willingness to continue in office as auditors  
and a resolution to appoint them and authorise  
the Directors to determine their remuneration for the 
ensuing year will be proposed at the forthcoming 
Annual General Meeting.
Annual General Meeting
The Annual General Meeting will be held at Munro 
House, Portsmouth Road, Cobham, Surrey KT11 1TF on  
19 August 2011 at 10am. Details of the resolutions to be 
proposed are contained in the Notice of Annual General 
Meeting sent to shareholders with this annual report.
By order of the Board
Barbara Firth
Director 
15 July 2011
Directors’ report
continued 19
Overview Business review Governance Financials
Advanced Computer Software Group plc
Annual Report 2011
Introduction
The Board is committed to the principles of good 
corporate governance set out in the Corporate 
Governance Code published by the Financial Reporting 
Council in June 2010 (‘the Code’) and complies, so far as 
it feels is appropriate for an AIM-listed company of its 
size, by adopting the Quoted Company Alliance (QCA) 
Corporate Governance Guidelines for AIM Companies 
published in September 2010 excepting that:
The Directors forming the Remuneration and Audit 
Committees are not independent, as defined by the 
Code; and the Board does not formally evaluate  
the performance of the Board, its committees and its 
individual directors but evaluates the effectiveness  
of the Board as a whole.
This statement, together with the statement of  
Directors’ responsibilities on page 21 and the Directors’ 
remuneration report, indicates how the Company has 
applied the principles of the Code.
Board responsibilities
The Board’s principal responsibilities are to deliver 
shareholder value, maintain reliable systems of control 
and provide the overall vision and leadership for the 
Company. It determines corporate strategy, reviews  
the Group’s operating and financial performance to 
ensure it is effectively controlled, and is the primary 
decision-maker for all matters considered to be 
significant to the Group as a whole.
There is a formal schedule of matters reserved for 
approval by the Board including the approval of 
acquisitions and divestments, budgets and business 
plans, commercial strategy, major capital expenditure, 
treasury policy, corporate governance, risk control and 
the appointment of new directors.
Board composition and balance
The Board, chaired by Michael Jackson, comprises  
two Executive Directors and two Non-Executive 
Directors. Collectively, the Directors have a wide range 
of relevant business and financial experience and 
knowledge which is vital to the success of the Group.
The Chairman and Chief Executive have clearly defined 
and distinct roles. The Chairman is responsible for 
corporate governance, shareholder communications 
and the efficient operation of the Board. The Chief 
Executive is responsible for the day-to-day operation  
of the Group and leads the communication programme 
with analysts and potential investors.
The Board annually reviews its performance and 
considers that the appointment of an independent 
Non-Executive Director is now appropriate and  
has commenced the search for a suitable candidate. 
Biographical details of the Directors can be found on 
page 15.
Board process
The Board carries out its duties with the assistance  
of the Board committees.
The Board meets regularly during the year and 
additional meetings are arranged as necessary  
for specific purposes. Full and timely information is 
provided to the Board to enable it to function effectively 
and to allow Directors to discharge their responsibilities.
The table below shows the number of monthly meetings 
individual Directors could have attended during the 
year (taking account of eligibility, appointment and 
retirement dates) and their actual attendance.
No of
meetings
Meetings
attended
Michael Jackson 10 9
Vin Murria 10 10
Barbara Firth 10 10
Mark Watts 10 9
The Board has procedures in place to deal with potential 
conflicts of interest and confirms that the procedures 
have operated effectively during the year under review.
There is a procedure for Directors to take independent 
professional advice if necessary and at the Company’s 
expense in addition to the access that every Director has 
to the advice and services of a Company Secretary, who 
is responsible to the Board for ensuring that the Board 
procedures are followed and that applicable rules and 
regulations are complied with.
Internal control and risk management
The Directors have overall responsibility for ensuring 
that the Group maintains a system of internal control  
to provide reasonable assurance of effective and 
efficient operations, internal financial control and 
compliance with laws and regulations. The risk 
management process and system of internal control  
are designed to manage rather than eliminate risk  
and the Board recognises that this system of internal 
control can only provide reasonable and not absolute 
assurance against material misstatement or loss.
The Group has a clearly defined organisational 
structure. Managers assume responsibility for running 
day-to-day operational activities with performance 
regularly reviewed and employees are required to 
follow procedures and policies appropriate to their 
position within the business.
The Board is responsible for identifying, evaluating  
and managing all major business risks facing the 
Group. To facilitate the assessment of risks, monthly 
reports on non-financial matters are compiled by  
all business units covering such matters as sales 
performance, project progress, compliance, health  
and safety, environment, product quality, customer 
support metrics and human resource issues.
Corporate governance statement 20 Advanced Computer Software Group plc
Annual Report 2011
Corporate governance statement
continued
The Group has a comprehensive system for reporting 
financial results to the Board. Monthly accounts for each 
business unit, with a financial commentary comparing 
current year performance with budget and forecast, 
together with key performance metrics, are prepared  
in accordance with the Group accounting policies and 
principles for Board consideration.
The Board monitors the Group’s funding requirements, 
treasury function and banking and facilities and 
approves capital and significant investment expenditure.
The Board considers that there have been no substantial 
weaknesses in internal financial controls that have 
resulted in material loss, contingency or uncertainty 
which require to be disclosed in the accounts. 
The Directors do not currently believe that an additional 
separate internal audit function is appropriate for the 
size and complexity of the Group but will continue to 
review the position periodically.
Election and re-election of Directors
Directors are initially appointed until the following 
Annual General Meeting when, under the Company’s 
Articles of Association, it is required that they be elected 
by shareholders. The Company’s Articles of Association 
require that Directors retire and stand for re-election at 
least once every three years.
Directors’ indemnity and insurance
In accordance with the Articles of Association, the 
Company has provided indemnities to the Directors  
(to the extent permitted by the Companies Act) in 
respect of liabilities incurred as a result of their office.  
The Company has taken out an insurance policy in 
respect of those liabilities for which Directors may not  
be indemnified. Neither the indemnity nor insurance 
provides cover in the event that the Director is proved  
to have acted dishonestly or fraudulently. 
Audit Committee
The Audit Committee assists the Board to discharge  
its responsibilities for ensuring the integrity of the 
Company’s external reporting, the assessment of the 
adequacy and effectiveness of internal financial control, 
and the monitoring the Group’s accounting policies and 
compliance with accounting standards. The members  
of the Audit Committee consider that they have the 
requisite skills and experience to fulfil the responsibilities 
of the Audit Committee. The Audit Committee is chaired 
by Michael Jackson and meets on at least two occasions 
each year. The Group’s auditors have direct access to  
the Audit Committee at any time to raise any matters  
of concern or for discussion. The table below shows  
the number of meetings individual Directors could  
have attended during the year (taking account of 
eligibility , appointment and retirement dates) and  
their actual attendance.
No of
meetings
Meetings
attended
Michael Jackson 2 2
Mark Watts 2 2
Remuneration Committee
The report of the Remuneration Committee can  
be found on page 22. The Committee is chaired  
by Mark Watts and meets at least once a year. The 
table below shows the number of meetings individual 
Directors could have attended during the year (taking 
account of eligibility, appointment and retirement)  
and their actual attendance.
No of
meetings
Meetings
attended
Michael Jackson 2 2
Mark Watts 2 2
Nomination Committee
There is no separate Nominations Committee, the 
appointment of new Directors is considered by the  
Board as a whole.
Relations with shareholders
The Board attaches great importance to maintaining 
good relationships with its institutional shareholders. 
Following the announcement of the half-year and 
year-end results, a series of formal meetings with 
institutional shareholders is undertaken which allows  
the Executive Directors to form relationships with the 
investors and for the shareholders to raise any concerns. 
The Company’s brokers and financial PR advisers 
provide feedback from investor and analyst meetings 
which are presented to the Board.
The Annual General Meeting also provides an 
opportunity for the Board to communicate directly  
with shareholders.
The Company maintains a website which  
contains information on the Group, regulatory 
announcements and financial statements:  
www.advancedcomputersoftware.com. 21
Overview Business review Governance Financials
Advanced Computer Software Group plc
Annual Report 2011
Statement of Directors’ 
responsibilities
The Directors are responsible for preparing the annual 
report, The Directors’ remuneration report and the  
Group and Parent Company financial statements in 
accordance with applicable laws and regulations.
Company law requires the Directors to prepare Group 
and Parent Company financial statements for each 
financial year. Under that law they are required to 
prepare Group financial statements in accordance with 
International Financial Reporting Standards (IFRS) as 
adopted by the European Union (EU), and have elected 
to prepare the Parent Company financial statements in 
accordance with United Kingdom Generally Accepted 
Accounting Practice (United Kingdom Accounting 
Standards and applicable law).
Under Company law, the Directors must not approve  
the financial statements unless they are satisfied that 
they give a true and fair view of the state of affairs of 
the Group and the Parent Company and of the profit  
or loss of the Group for the year. The Directors are also 
required to prepare financial statements in accordance 
with the rules of the London Stock exchange for 
companies trading securities on the Alternative 
Investment Market.
In preparing these financial statement, the Directors  
are required to:
•  select suitable accounting policies and then apply 
them consistently;
•  make judgements and estimates that are reasonable 
and prudent;
•  state whether IFRS as adopted by the EU, and 
applicable United Kingdom Accounting Standards 
have been followed, subject to any material 
departures disclosed and explained in the Group and 
Parent Company financial statements respectively; 
and
•  prepare the financial statements on the going concern 
basis unless it is inappropriate to presume that the 
Group will continue in business.
The Directors are responsible for keeping adequate 
accounting records that are sufficient to show and 
explain the Group and Parent Company’s transactions 
and disclose with reasonably accuracy at any time  
the financial position of the Group and the Parent 
Company and to enable them to ensure that the 
financial statements comply with the Companies Act 
2006. They are also responsible for safeguarding the 
assets of the Company and the Group and hence for 
taking reasonable steps for the prevention and detection 
of fraud and other irregularities.
The Directors are responsible for ensuring the annual 
report and financial statements are made available on 
the Company’s website in accordance with legislation 
in the United Kingdom governing the preparation and 
dissemination of financial statements, which may vary 
from legislation in other jurisdictions. The maintenance 
and integrity of the Company’s website is the 
responsibility of the Directors. The Directors’ responsibility 
also extends to the ongoing integrity of the financial 
statements contained therein. 22 Advanced Computer Software Group plc
Annual Report 2011
Directors’ remuneration report
As Chairman of the Remuneration Committee,  
I am pleased to present the Remuneration Committee’s 
report on Directors’ remuneration for the year ended  
28 February 2011.
Advanced’s policy is to remunerate Directors 
appropriately given the size and stage of growth  
of the Group and to continue to focus on performance-
related remuneration.
Executive Directors
The remuneration package for Executive Directors 
comprises both fixed and variable elements  
and includes:
• basic salary
• discretionary bonus
• defined contribution to personal pension plans
•  other benefits such as car allowance and life 
assurance.
In 2008 and 2010, the Group granted Management 
Participation Shares (MPS) to certain Directors to  
align their interests with shareholders. The details  
of the MPS scheme are summarised in note 25 to  
the financial statements. 
During the year Vinodka Murria and Barbara Firth  
both continued to contribute £250 per month into the 
Company’s Save As You Earn Scheme and therefore 
retain an option over the following shares.
SAYE
Number of shares granted
over the year ended
28 February 2011
Vin Murria 10,000
Barbara Firth 10,000
Non-Executive Directors
The Board determines the remuneration of the  
Non-Executive Directors. Michael Jackson remunerated 
through payroll and the fees for Mark Watts’ services  
are invoiced by Marwyn Capital LLP.
Service contracts
The service contracts and letters of appointment of the 
Directors include the following terms:
Date of
appointment
Notice
period
Executive Directors
Vin Murria 27 Aug 2008 12 months
Barbara Firth 1 Sept 2009 6 months
Non-Executive Directors
Michael Jackson 27 Aug 2008 12 months
Mark Watts 27 Aug 2008 3 months
The Executives are on rolling contracts and offer 
themselves for re-election by rotation in accordance 
with the Company’s Articles of Association.
Directors’ interests in the ordinary share capital  
of the Company
Directors’ 
interests at 
28 February 2011
Directors’ 
interests at 
28 February 2010
Vin Murria* 36,050,867 18,289 ,216
Michael Jackson 1,68 1,525 1,470,588
Barbara Firth 250,000 –
* including the growth interest in 17,761,651 shares awarded on 4 March 2010 23
Overview Business review Governance Financials
Advanced Computer Software Group plc
Annual Report 2011
*Ms Murria waived her right to the full compensation  
due under her employment contract and elected from  
1 March 2010 to 31 August 2010 to receive £24,000 gross 
salary per annum plus benefits and from 1 September  
to 28 February 2011 to receive £75,000 plus benefits.  
An amount equivalent to the remuneration waived,  
plus the value of the Employers’ National Insurance 
Contributions (ENIC) saved, was paid to PS Foundation, 
registered charity no 1123570. 
Ms Murria also waived any discretionary bonuses  
to be paid to her during the year. The Board awarded 
her a bonus of £500,000 in respect of her contribution to 
the Group’s success for the period to 28 February 2010 
and £650,000 in respect of the acquisition and 
successful integration of COA for the year ended  
to 28 February 2011. An amount equivalent to the 
remuneration waived plus the value of ENIC saved was 
paid to PS Foundation, registered charity no 1123570.
Mark Watts
Chairman of the Remuneration Committee
Directors’ remuneration for the year to 28 February 2011
February
2011 
February
2010
Salary
£000
Salary,
bonus and
benefits
waived
£000
Bonus
£000
Benefits
£000
Consultancy
fees
£000
Total
remuneration
£000
Total
remuneration
£000
Executive Directors
Vinodka Murria* 50 1,387 – 9 – 1,446 218
Barbara Firth 195 – 60 1 – 256 79
Karen Bach     – 69
Non-Executive Directors 
Michael Jackson 25 – – – – 25 25
Mark Watts – – – – 15 15 15
Mark Watts 270 1,387 60 10 15 1,742 406 24 Advanced Computer Software Group plc
Annual Report 2011
Independent auditor’s report  
to the members of Advanced 
Computer Software Group plc
We have audited the financial statements of Advanced 
Computer Software Group plc for the year ended  
28 February 2011 set out on pages 25 to 60. The financial 
reporting framework that has been applied in the 
preparation of the group financial statements is 
applicable law and International Financial Reporting 
Standards (IFRSs) as adopted by the EU. The financial 
reporting framework that has been applied in the 
preparation of the parent company financial statements 
is applicable law and UK Accounting Standards  
(UK Generally Accepted Accounting Practice).
This report is made solely to the company’s members,  
as a body, in accordance with Chapter 3 of Part 16  
of the Companies Act 2006. Our audit work has been 
undertaken so that we might state to the company’s 
members those matters we are required to state to  
them in an auditor’s report and for no other purpose.  
To the fullest extent permitted by law, we do not accept 
or assume responsibility to anyone other than the 
company and the company’s members, as a body,  
for our audit work, for this report, or for the opinions  
we have formed.
Respective responsibilities of directors and auditor
As explained more fully in the Directors’ Responsibilities 
Statement set out on page 21, the directors are 
responsible for the preparation of the financial 
statements and for being satisfied that they give a true 
and fair view. Our responsibility is to audit, and express 
an opinion on, the financial statements in accordance 
with applicable law and International Standards on 
Auditing (UK and Ireland). Those standards require  
us to comply with the Auditing Practices Board’s (APB’s) 
Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial 
statements is provided on the APB’s website at  
www.frc.org.uk/apb/scope/UKNP/ www.frc.org.uk/
apb/scope/private.cfm.
Opinion on financial statements
In our opinion:
•  the financial statements give a true and fair view of 
the state of the group’s and of the parent company’s 
affairs as at 28 February 2011 and of the group’s profit 
for the year then ended;
•  the group financial statements have been properly 
prepared in accordance with IFRSs as adopted by  
the EU;
•  the parent company financial statements have been 
properly prepared in accordance with UK Generally 
Accepted Accounting Practice;
•  the financial statements have been prepared in 
accordance with the requirements of the Companies 
Act 2006.
Opinion on other matter prescribed by the  
Companies Act 2006
In our opinion the information given in the Directors’ 
Report for the financial year for which the financial 
statements are prepared is consistent with the  
financial statements.
Matters on which we are required to report by 
exception
We have nothing to report in respect of the following 
matters where the Companies Act 2006 requires us  
to report to you if, in our opinion:
•  adequate accounting records have not been kept  
by the parent company, or returns adequate for  
our audit have not been received from branches  
not visited by us; or
•  the parent company financial statements are not in 
agreement with the accounting records and returns; 
or
•  certain disclosures of directors’ remuneration specified 
by law are not made; or
•  we have not received all the information and 
explanations we require for our audit.
P Gresham
Senior Statutory Auditor for and on behalf of  
KPMG Audit Plc
Chartered Accountants 
Arlington Business Park 
Theale 
Reading 
Berkshire RG7 4SD 
United Kingdom 
15 July 2011 25
Overview Business review Governance Financials
Advanced Computer Software Group plc
Annual Report 2011
Consolidated income statement
for the year ended 28 February 2011
Notes
2011
£000
2010
£000
Revenue 4,5 95,397 30,191
Cost of sales (16,514) (7 ,356) 
Gross profit 78,883 22,835
   
Administrative costs (73,620) (18,966)
    
Adjusted EBITDA 24,078 7,200
Reorganisation costs (298) (65)
Share based payments (IFRS2) 8,25 (1,853) (572)
Depreciation 13 (1,270) (698)
Amortisation of acquired intangible assets (IFRS3) 12 (15,394) (1,996)
    
Profit from operations 5,6 5,263 3,869
    
Finance income 7 50 410
Finance costs 7 (2,189) (110)
    
Profit before taxation 3,124 4,169
    
Taxation 9 1,048 (1,000)
    
Profit for the year 4,172 3,169 
  
Earnings per share   
Basic (pence) 10 1.2 1.1
Diluted (pence) 10 1.1 1.0
The notes on pages 30 to 56 form part of these financial statements. 26 Advanced Computer Software Group plc
Annual Report 2011
Consolidated statement 
of comprehensive income
for the year ended 28 February 2011
2011
£000
2010
£000
Foreign exchange translation differences (38) 27
 
Net income recognised directly in equity (38) 27
   
Profit for the year 4,172 3,169
   
Total comprehensive income for the year 4,134 3,196
The notes on pages 30 to 56 form part of these financial statements. 27
Overview Business review Governance Financials
Advanced Computer Software Group plc
Annual Report 2011
Consolidated balance sheet
as at 28 February 2011
Notes 2011
£000
2010
£000
Non-current assets
Intangible assets 12 149,844 158,862
Property , plant and equipment 13 3,621 3,781
Total non-current assets 153,465 162,643
    
Current assets   
Inventories 14 987 629
Trade and other receivables 15 25,173 22,208
Cash and cash equivalents 16 11,236 10,279
Total current assets 37,396 33, 11 6
   
Deferred tax 18 3,172 –
 3,172 –
    
Total assets 194,033 195,759
Current liabilities   
Trade and other payables 17 (16,962) (16,456)
Deferred income (26,500) (25,699)
Corporation tax (1,613) (879)
Loans and borrowings 20 (32,139) (34,144)
Total current liabilities (77,214) (77, 1 78)
Non-current liabilities   
Deferred tax 18 (21,592) (23,032)
Provisions 19 (1,153) (1,130)
Loans and borrowings 20 (9,475) (15,873)
Total non-current liabilities (32,220) (40,035)
    
Total liabilities (109,434) (1 1 7,2 1 3)
    
Net assets 84,599 78,546
Equity
Share capital 24 35,488 35,488
Share premium 24 33,361 33,361
Merger reserve 24 7,826 7,826
Foreign exchange reserve 24 (11) 27
Share trust reserve 24 (1,777) (1,954)
Retained earnings 24 9,712 3,798
Total equity attributable to equity holders of the Company 84,599 78,546
The notes on pages 30 to 56 form part of these financial statements.
These financial statements were approved by the board of directors and authorised for issue on 15 July 2011  
and were signed on its behalf by:
Barbara Firth
Director 28 Advanced Computer Software Group plc
Annual Report 2011
Consolidated cash flow statement
for the year ended 28 February 2011
Notes 2011
£000
2010
£000
Cash flows from operating activities
Profit for the year 4,172 3,169
Adjustments for  
Depreciation 13 1,270 698
Amortisation of intangible assets 12 15,676 1,996
Share based payment – IFRS 2 25 1,853 572
Net finance costs/(income) 7 2,139 (300)
Tax (credit)/charge 9 (1,048) 1,000
    
Operating cash flows before movement in working capital 24,062 7, 1 35
    
Increase in trade and other payables 4,601 996
Increase in trade and other receivables (6,185) (3,120)
Decrease/(increase) in stock (27) 200
    
Cash generated in the operations 22,451 5,2 11
Corporation tax paid (3,462) (359)
    
Net cash inflow from operating activities 18,989 4,852
    
Cash flows from investing activities   
Acquisition of subsidiaries (net of cash acquired) 11 (4,728) (101,287)
Finance income (1,818) 300
Development expenditure (1,679) (340)
Acquisition of PPE (1,047) (277)
    
Cash outflow from investing activities (9,272) (101,604)
   
Cash flows from financing activities   
Proceeds from issue of new shares – 43,575
Cost of issue of shares – (1,199)
Proceed from new loan – 25,000
Repayment of borrowings (7,500) – 
Borrowing fees – (1,265)
    
Cash from financing activities (7,500) 66, 111
    
Change in cash and cash equivalents 2,217 (30,641)
Cash and cash equivalents at start of previous period (15,985) 14,656
    
Cash and cash equivalents at the end of the year (13,768) (15,985)
The notes on pages 30 to 56 form part of these financial statements.
The cash and cash equivalents at the end of the year together with the revolving facility , represents the cash and 
cash equivalents balance shown in the balance sheet. 29
Overview Business review Governance Financials
Advanced Computer Software Group plc
Annual Report 2011
Ordinary
share
capital
£000
Share
premium
£000
Merger
reserve
£000
Share trust
reserve
£000
Revaluation
 reserve
£000
Retained
earnings
£000
Total
£000
Balance at 28 February 2010 35,488 33,361 7,826 (1,954) 27 3,798 78,546
Deferred tax asset on share 
based payment
– – – – – 66 66
Transfer of shares to employees 
from EBT
– – – 1 77 – (1 77) –
Share based payment – – – – – 1,853 1,853
Total comprehensive income 
for the year
– – – – (38) 4,172 4,134
Balance at 28 February 2011 35,488 33,361 7,826 (1,777) (11) 9,712 84,599
Ordinary
share
capital
£000
Share
premium
£000
Merger
reserve
£000
Share trust
reserve
£000
Revaluation
 reserve
£000
Retained
earnings
£000
Total
£000
Balance at 28 February 2009 19,092 5,426 2,821 (1,954) – 57 25,442
        
Issue of share capital        
For cash 14,525 29,050 – – – – 43,575
In respect of acquisition  
of subsidiaries
1,871 – 5,005 – – – 6,876
Costs of issuing share capital – (1 , 115) – – – – (1,115)
Share based payment – – – – – 572 572
Total comprehensive income 
for the year
– – – – 27 3,169 3,196
Balance at 28 February 2010 35,488 33,361 7,826 (1,954) 27 3,798 78,546
The notes on pages 30 to 56 form part of these financial statements.
Consolidated statement  
of changes in equity 30 Advanced Computer Software Group plc
Annual Report 2011
Notes to the consolidated  
financial statements
1 General information
Advanced Computer Software Group plc (AIM: ASW, ‘Advanced’, ‘the Company’ or ‘the Group’), a leading provider 
of software and IT services to the healthcare, public and private sectors, is a limited liability company listed on AIM 
(a market of the London Stock Exchange). The Company’s registered address is Munro House, Portsmouth Road, 
Cobham, Surrey KT11 1TF and the Company’s registration number is 5965280.
The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as  
the ‘Group’). 
The Parent Company financial statements present information about the Company as a separate entity and not 
about its Group.
The consolidated financial statements have been prepared in accordance with International Financial Reporting 
Standards (IFRSs) as adopted by the European Union. The Company has elected to prepare its Parent Company 
financial statements in accordance with UK GAAP. The Company’s subsidiaries are prepared in compliance  
with UK GAAP. The principal accounting policies used in preparing the financial results are detailed in note 3.
2 Basis of preparation
Measurement convention
The financial statements are prepared on the historical cost basis.
Subsidiary basis of consolidation
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, 
to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing 
control, potential voting rights that are currently exercisable or convertible are taken into account. The financial 
statements of subsidiaries are included in the consolidated financial statements from the date that control 
commences until the date that control ceases.
Functional and presentation currency
The financial information is presented in sterling, which is the functional currency of the Group. All financial 
information presented in sterling has been rounded to the nearest thousand.
Going concern 
The Group negotiated a bank facility of £55m with HSBC and Royal Bank of Scotland in February 2010  
in connection with the acquisition of COA and the provision of working capital for the Group. The facility is 
structured as £25m term debt and £30m revolving loan facility both falling due for repayment in August 2013.
The Group repaid £7.5m of its term loan during the year. Repayments and withdrawals in connection to the 
revolving loan facility were made during the year in accordance with cash flow requirements and at the year  
end £25m of the revolving loan facility remained outstanding.
The interest rate on both the term debt and the revolving facility varies between 2% and 3.25% over LIBOR 
depending on the Group’s net debt to EBITDA ratio.
In April 2010, an agreement was reached with Royal Bank of Scotland to hedge two thirds of the term debt for the 
period of the loan by way of a cap on LIBOR of 3.3%.
The Group’s forecasts and projections, taking into account of reasonably possible changes in trading performance, 
show that the group should continue to operate within the level of these facilities.
Whilst the Group has net current liabilities of £39.8m (2010: £44.1m), this includes an amount of £26.5m of non cash 
deferred revenue (2010: £25.7m) which will be released over the next 12 months. In addition, the nature of the 
revolving facility requires it to be shown as due within 1 year. 
The Directors are confident that the Group will continue meeting its financial covenants and has adequate resources 
to continue in operational existence for the foreseeable future and therefore continue to adopt the going concern 
basis in preparing the annual financial statements. 31
Overview Business review Governance Financials
Advanced Computer Software Group plc
Annual Report 2011
3 Significant accounting policies
The accounting policies adopted in the preparation of the condensed consolidated financial statements  
are consistent with those followed in preparation of the Group’s annual financial statements for the year ended  
28 February 201 1, except for the adoption of new Standards and Interpretations as of 1 March 2010, noted below:
IFRS 3 Business Combinations
The Group adopted the revised standards from 1 March 2010. IFRS 3 (Revised) introduces significant changes in  
the accounting for business combinations occurring after this date. Changes affect the valuation of non-controlling 
interest, the accounting for transaction costs, the initial recognition and subsequent measurement of a contingent 
consideration and business combinations achieved in stages. Transaction costs are recognised in administration 
expenses. These changes impact the amount of goodwill recognised in the reported results in the period that an 
acquisition occurs and future reported results. IAS 27 (Amended) requires that a change in the ownership interest  
of a subsidiary (without loss of control) is accounted for as a transaction with owners in their capacity as owners. 
Therefore, such transactions no longer give rise to goodwill, nor give rise to a gain or loss. Furthermore, the 
amended standard changes the accounting for losses incurred by the subsidiary as well as the loss of control of a 
subsidiary. The changes required by IFRS 3 (Revised) and IAS 27 (Amended) will affect future acquisitions or loss of 
control of subsidiaries and transactions with non-controlling interests. The change in accounting policy was applied 
prospectively and had no material impact on earnings per share or the results for the year ended 28 February 2011.
The significant accounting policies adopted by the Group are set out below.
Property, plant and equipment
Property , plant and equipment are stated at cost less accumulated depreciation and impairment losses. Where 
parts of an item of property , plant and equipment have different useful lives, they are accounted for as separate 
items of property , plant and equipment.
Depreciation
Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part 
of an item of property , plant and equipment. The depreciation policies for each class of asset are as follows:
Leasehold improvements – over the period of the lease 
Office equipment and furniture – 20% to 33 1⁄3% straight-line 
Computer equipment – 20% to 25% straight-line 
Land & buildings – 2% straight-line
Depreciation methods, useful lives and residual values are reviewed at each reporting date.
Intangibles
Goodwill
Goodwill is recognised on the acquisition of a subsidiary and is the difference between the cost of the acquisition 
and the fair value of tangible and intangible assets acquired. The carrying value of goodwill is reviewed at each 
reporting date, with any impairment required charged to the income statement.
Research and development
Development activities involve a plan or design for the production of new or substantially improved computer 
software. Development expenditure is capitalised only if development costs can be measured reliably, the  
software program is technically and commercially feasible, future economic benefits are probable, and the Group  
has sufficient resources available to complete development and to use, lease or sell the asset. The expenditure 
capitalised includes only the cost of gross direct labour costs that are directly attributable to preparing the asset  
for its intended use or third party costs incurred directly on the development activities above. 
Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated 
impairment losses. Other research and development expenditure not meeting the above criteria is recognised  
in the income statement as incurred.
Acquired intangibles
Following the acquisitions in the year (see note 11) the assets acquired were classified into tangible and intangible 
assets and fair values applied using the principles of IFRS 3. This led to the creation of intangible assets recognised on 
the consolidated balance sheet which will be amortised over their estimated useful lives. The assets recognised were:
1. Brand name 
2. Customer contracts and relationships 
3. Technology assets 
4. In-process research and development 32 Advanced Computer Software Group plc
Annual Report 2011
Notes to the consolidated  
financial statements
continued
3 Significant accounting policies continued
Intangibles continued
Amortisation
Amortisation is recognised in the income statement within administrative costs on a straight line basis over  
the estimated useful lives of intangible assets, other than goodwill, from the date they are available for use.  
The estimated useful lives for the current period are different depending on the profile of the acquisition. 
The amortisation policies for each class of intangible asset are as follows:
•  capitalised development costs are amortised over the period from the date it generates revenue. This period  
is estimated by management as between four and eight years.
•  the brand names recognised as a result acquisitions are amortised over a period of four to five years.
•  technology assets recognised on the acquisitions are amortised over a period of four to five years.
•  customer contracts and relationships recognised on the acquisitions over a period of one to 10 years, based  
on the useful life of the contract or relationship. Customer pipelines and backlog are amortised over one year.
Impairment of intangibles and property, plant and equipment
The carrying amounts of the Group’s assets are reviewed at each balance sheet date to determine whether  
there is any indication of impairment. If any such indication exists, the assets’ recoverable amount is estimated.
An impairment loss is recognised whenever the carrying amount of an asset, or its cash-generating unit, exceeds 
the asset’s recoverable amount. Impairment losses are recognised in the income statement.
Calculation of recoverable amount
The recoverable amount of assets is the greater of their net selling price and value in use. In assessing value in  
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects 
current market assessments of the time value of money and the risks specific to the asset. For an asset that does not 
generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to 
which the asset belongs. Impairments of goodwill are never reversed.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is based on the first-in first-out principle  
and includes expenditure incurred in acquiring the inventories and bringing them to their existing location  
and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs  
of completion and selling expenses.
Financial instruments
The Group’s financial instruments comprise cash and various items such as trade receivables and trade payables 
that arise directly from its operations. Finance payments associated with financial liabilities are dealt with as  
part of finance expenses.
Financial assets
The Group’s financial assets are loans and receivables. These assets are non-derivative financial assets with fixed  
or determinable payments that are not quoted in an active market. They arise principally through the provision  
of services to customers (trade receivables), but also incorporate other types of contractual monetary asset such  
as deposits on rental property and prepayments, which are contractually recoverable. They are initially recognised, 
at fair value and subsequently carried at amortised cost. Unless otherwise indicated, the carrying amounts of the 
Group’s financial assets are a reasonable approximation of their fair values.
Financial liabilities
The Group’s financial liabilities are trade payables and other financial liabilities. These liabilities are initially 
recognised at fair value and subsequently measured at amortised cost using the effective interest rate method. 
Unless otherwise indicated, the carrying amounts of the Group’s financial liabilities are a reasonable approximation 
of their fair values.
Share capital
Financial instruments issued by the Group are treated as equity only to the extent that they do not meet the 
definition of a financial liability. The Group’s ordinary shares are classified as equity instruments.
Further information on the Group’s financial instruments can be found in note 20. 33
Overview Business review Governance Financials
Advanced Computer Software Group plc
Annual Report 2011
3 Significant accounting policies continued
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, call deposits and short-term deposits with  
a maturity of less than three months. Bank overdrafts are repayable on demand and form an integral part  
of the Group’s cash management strategy. 
Leased assets
Leases where the Group assumes substantially all the risks and rewards of ownership are classified as finance 
leases. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value  
and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted  
for in accordance with the accounting policy applicable to that asset. Other leases are operating leases.
Operating lease payments
Payments made under operating leases are recognised in the income statement on a straight-line basis over  
the term of the lease. Lease incentives received are recognised in the income statement as an integral part of  
the total lease expense.
Foreign currency transactions
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. 
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the 
foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in  
the income statement. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign 
currency are translated using the exchange rate at the date of the transaction.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, 
are translated to the Group’s presentational currency , sterling, at foreign exchange rates ruling at the balance sheet 
date. The revenues and expenses of foreign operations are translated at an average rate for the year, where this rate 
approximates to the foreign exchange rates ruling at the dates of the transactions.
Exchange differences arising from this translation of foreign operations are taken directly to the translation reserve 
and are released into the income statement upon disposal of the foreign operation in due course.
Revenue recognition
The Group’s revenues are derived from the sale of software product licences, the associated consultancy services, 
hardware, maintenance, managed services and supplies of third party software. All revenue is reported exclusive 
of value added tax.
The Group will only recognise revenue when:
•  persuasive evidence of an arrangement exists. This is typically a signed contract or customer purchase order;
• the price to the customer is fixed or determinable;
• delivery has occurred; and
collectability is reasonably assured and there are no material outstanding conditions or contingencies attaching  
to the receipt of monies due.
The Group recognises revenue on each element of a contract as follows:
•   software product licence – revenue is recognised when risks and rewards have passed to the customer and there 
is no significant ongoing obligation on the group. Where software is sold as part of a bundled arrangement, the 
group allocates revenue to each component based on its fair value;
 • hardware – revenue is recognised on delivery of the goods;
 •  consultancy services (including training) – the group performs a number of professional services to its customers. 
These can include implementation and configuration of the software and training of the customer’s staff. Revenue 
is recognised as the services are performed;
•  product maintenance – the group provides software updates to its customers as part of the ongoing maintenance 
contract. Revenue is recognised rateably over the duration of the contract; and
 •  managed services – where the group provides hosting services, revenue is recognised rateably over the duration 
of the contract. 34 Advanced Computer Software Group plc
Annual Report 2011
Notes to the consolidated  
financial statements
continued
3 Significant accounting policies continued
Revenue recognition continued
Typically , a number of the above elements maybe sold together as a bundled contract. Revenue is recognised 
separately for each component if it is considered to represent a separable good or service and a fair value can  
be reliably established.
The Group derives fair value for its consultancy services based on day rates for consultants and for product 
maintenance based on maintenance renewal prices. Where software is included within a bundled arrangement, 
the residual value of the contract is ascribed to the software after a fair value has been allocated to all  
other components. 
Deferred revenues primarily relate to managed services and customer support fees, which have been invoiced  
to the customer prior to the performance of these services. Deferred revenue is generally recognised over a period  
of one to three years. 
Employee Benefit Trust
At balance sheet date, the Employee Benefit Trust (EBT) was dependant on Advanced Computer Software Group 
plc for its funding and its investment in the Company’s shares was shown in share trust reserve, treated as a 
deduction from equity in the consolidated balance sheet.
Corporation tax
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income statement 
except to the extent that it relates to items recognised directly in equity , in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted, or 
substantively enacted, at the balance sheet date and any adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for 
financial reporting purposes and the amounts used for taxation purposes. The following temporary differences  
are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither 
accounting nor taxable profit other than in a business combination, and differences relating to investments in 
subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred  
tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and 
liabilities, using tax rates enacted, or substantively enacted, at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available 
against which the asset can be utilised.
Employee benefits
Defined contribution plans
Obligations for contributions to defined contribution pension plans are recognised as an expense in the income 
statement as incurred.
Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related 
service is provided. A provision is recognised for the amount expected to be paid under short-term cash bonus  
or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result  
of past service provided by the employee and the obligation can be estimated reliably.
Share-based payment transactions
Share-based payment arrangements in which the Group receives goods or services as consideration for it’s own 
equity instruments are accounted for as equity-settled share-based payment transactions. 
The grant date fair value of options granted to employees is recognised as an employee expense, with a 
corresponding increase in equity , over the period in which the employees become unconditionally entitled to  
the options. The fair value of the options granted is measured using an option valuation model, taking into account 
the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted 
to reflect the actual number of share options that vest except where forfeiture is due only to share prices not 
achieving the threshold for vesting. 35
Overview Business review Governance Financials
Advanced Computer Software Group plc
Annual Report 2011
3 Significant accounting policies continued
Critical accounting estimates and judgements
Revenue recognition
Revenues for arrangements that involve significant modification, or customisation of the software may be recognised 
based on achievement of contract specific milestones, or using the percentage of completion method depending  
on the terms of the contract. The group determines the stage of completion based on an assessment of direct labour 
costs incurred to date as a percentage of total estimated project costs required to complete the project.
If collectability is not reasonably assured at the outset of a contract, the group defers revenue and only recognises 
revenue on receipt of the cash and to the extent that it has discharged its obligations under the contract.
Impairment of goodwill
The Group is required to test goodwill for potential impairment on an annual basis. The recoverable amount is 
determined based on value in use calculations which requires the estimation of future cash flows and the selection 
of a discount rate in order to calculate the present value of the cash flows. Actual outcomes of this calculation may 
vary. Further information including the carrying value is given in note 12.
Intangible assets
On acquisition of a business, the Group is required to value the assets acquired and recognise intangible assets on 
the balance sheet. The valuation of these assets relies on various assumptions, including future revenues and costs 
derived from those assets and the selection of an appropriate discount rate in order to calculate the present value  
of those cashflows. Further information including the carrying value is given in note 12.
Useful lives of intangible assets and property, plant and equipment
Intangible assets, property , plant and equipment are amortised or depreciated over their useful lives. These useful 
lives are based on management’s estimates of the period that the assets will generate revenue. These estimates are 
periodically reviewed for continued appropriateness. Changes to estimates can result in significant variations in the 
carrying value and amounts charged to the Consolidated Income Statement in specific periods. 
Inventories
The trading subsidiaries within the Group review the net realisable value of, and demand for, their inventory on a 
regular basis to provide assurance that it is stated at the lower of cost and net realisable value. Factors that could 
impact estimated demand and selling prices include the timing and success of future technological innovations, 
competitor activities, supplier prices and economic trends.
Share-based payments
The fair value of share-based payments is estimated using the binominal valuation model as at the date of grant 
and using certain assumptions. These assumptions are disclosed in note 25.
Provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as  
a result of a past event, that can be reliably measured and it is probable that an outflow of economic benefits  
will be required to settle the obligation. In arriving at estimates for provisions, estimates and judgements are made, 
in particular with regard to timing and amount. Calculations are based on anticipated future cash flows relating  
to the relevant event, which are estimated by management and where appropriate supported by the use of 
external advisers.
Taxation
The Group is subject to United Kingdom corporate taxation and judgement is required in determining the provision 
for income and deferred taxation. The Group recognises taxation assets and liabilities based upon estimates and 
assessments of many factors including past experience, advice received on the relevant taxation legislation and 
judgements about the outcome of future events. To the extent that the final outcome of these matters is different  
from the amounts recorded, such differences will impact on the taxation charge made in the Consolidated Income 
Statement in the period in which such determination is made. 36 Advanced Computer Software Group plc
Annual Report 2011
Notes to the consolidated  
financial statements
continued
3 Significant accounting policies continued
Standards, amendments and interpretations to existing standards not yet effective.
At the date of approval of these financial statements, the following standards, interpretations and amendments 
were issued but not yet mandatory for the Group and early adoption has not been applied.
International Financial Reporting Standards (‘IFRS’)
• IFRS9, Financial Instruments
International Financial Reporting Interpretations Committee (‘IFRIC’) interpretations
• IFRIC19, Extinguishing Financial Liabilities with Equity Instruments
Amendments to existing standards
• Amendment to IAS24, Related Party Disclosures
• Amendment to IAS32, Classification of Rights Issues
• Amendment to IFRS7 , Financial Instruments: Disclosure
• Amendment to IFRIC14, Prepayments of a Minimum Funding Requirement
• Annual Improvements to IFRSs 2010
It is considered that the above standards, amendments and interpretations will not have a significant effect  
on the results or net assets of the Group.
All the IFRSs, IFRIC interpretations and amendments to existing standards are endorsed by the EU at the date  
of approval of these financial statements with the exception of IFRS9, the amendment to IFRS7 and the Annual 
Improvements to IFRSs 2010.
Other new endorsed standards and amendments and interpretations to existing standards have been published, 
that management believes will not impact the Group’s financial statements going forward.
4 Revenue
Revenue for the Group was generated from subsidiaries and almost all of the revenue is from customers based  
in the United Kingdom. Revenue can be split into recurring (software and hardware support contracts, managed 
services) and non-recurring (services and sale of software licenses and hardware). The split of revenues for the  
year to 28 February 2011 is shown below.
2011
£000
2010
£000
Recurring revenues 54,044 18,483
Non-recurring revenues 41,353 11 ,708
95,397 30,191 
5 Segments
During the year the Group had three reportable segments as described below, which were the Group’s divisions. 
These divisions represent the lower level of operating segment, excluding any aggregation, which is consistent  
with the internal reporting to the Board. The CGU used for the goodwill impairment test in note 12 is in line with  
the reported segment.
The divisions offered differing solutions and were managed separately as they required different resources and 
strategies. For each of the divisions, the Group’s Board reviewed internal management reports on a monthly basis, 
which showed adjusted EBITDA performance of each division. The following summary describes the operations  
of each division:
•  Health & Care: provides clinical software solutions, including patient care management and clinical support 
software to urgent and unscheduled healthcare providers and social care providers.
•  365 Managed Services: provides hosting, cloud enablement and managed IT services to a wide range  
of customers in both the public and private sectors.  37
Overview Business review Governance Financials
Advanced Computer Software Group plc
Annual Report 2011
5 Segments continued
•  Business Solutions: provides a complete suite of back office applications including financial management,  
payroll, human capital management, e-procurement and document management to businesses in the retail, 
health & care, banking, leisure and other commercial sectors.
In the year under review, the acquisitions of Cerrus and Caresys augmented the size of the Health & Care segment.  
The business of COA Solutions, acquired in February 2010, was sub-divided into two main parts being Public and 
Commercial sector, which formed the Business Solutions division.
The 365 Managed Services division was established during the prior period following the acquisition of BSG.  
A small part of the COA Solutions business has increased the size of the segment.
‘Unallocated items’ represents the elimination of the inter-segment sales and shows the non-segmental Group 
expenses incurred during the period.
Information regarding the result of each reportable segment is included below which is consistent with the monthly 
information provided to the Board.
Other information reported to the board is on a group wide basis and therefore not associated with segments. 
Health & Care
Business
Solutions
365 Managed
Services
Unallocated
items Total
2011
£000
2010
£000
2011
£000
2010
£000
2011
£000
2010
£000
2011
£000
2010
£000
2011
£000
2010
£000
External revenue 19,987 15,722 55,767 2,673 19,643 11 ,796 – – 95,397 30,191
Recurring 12,133 9,646 29,054 1,487 12,857 7,350 – – 54,044 18,483
Non-recurring 7,854 6,076 26,713 1,186 6,786 4,446 – – 41,353 11 ,708
Inter-segment revenue (234) (10) (5) (38) (109) 14 348 34 – –
EBITDA 6,218 5,997 15,960 512 3,350 1,482 (3,601) (1,428) 21,927 6,563
Share based payments 178 92 325 4 153 22 1,197 454 1,853 572
Reorganisation costs – – 298 – – 65 – – 298 65
Adjusted EBITDA 6,396 6,089 16,583 516 3,503 1,569 (2,404) (974) 24,078 7,200
Depreciation –  –  –  –  –  – 1,270 698 1,270 698
Amortisation of 
acquired intangible 
assets
 –  –  –  –  –  – 15,394 1,996 15,394 1,996
Finance expense/ 
(income)
– – – – – – 2,139 (300) 2,139 (300)
Tax charge/(credit) – – – – – – (1,048) 1,000 (1,048) 1,000
Product information
Revenues from products and services of the Group were as follows in the year:
Product
2011
£000
2010
£000
Licence 20,578 2,288
Consultancy services 20,798 2,992
Maintenance 43,260 12,367
Managed services 10,761 11 ,796
Other – 748
95,397 30,191 38 Advanced Computer Software Group plc
Annual Report 2011
Notes to the consolidated  
financial statements
continued
5 Segments continued
Geographic information
The reported segments of the Group are mainly located in the United Kingdom and all material sales are made  
to customers inside the United Kingdom. There are no material assets located outside of the United Kingdom.
Major customer
No single customer accounted for more than 10% of the Group’s revenues in the year.
Net assets
Assets and liabilities are not reported internally by segments.
6 Profits from operations
2011
£000
2010
£000
Profit from operations is stated after charging/(crediting):
Loss on disposal of fixed assets 25 57
   
Depreciation of tangible fixed assets  
Owned assets 1,245 667
Leased assets 25 31
   
Amortisation of intangible fixed assets  
Capitalised development costs 282 155
Other intangible assets 15,394 1,841
   
Operating lease – lease payments  
Hire of plant and machinery – operating leases 1,876 15
Hire of other assets – operating leases 313 461
   
Net foreign currency translation loss/(gain) (2) (25)
   
Audit services  
Fees payable to the company's auditors for the audit of the company and 
consolidated financial statements 20 22
   
Fees payable to the Company's Auditors and its associates for other services:  
Audit of the Company's subsidiaries 110 39
Other services pursuant to legislation 50 8
Taxation services 45 23
Other services 10 –
7 Finance and income costs
2011
£000
2010
£000
Bank interest receivable 50 410
Total financial income 50 410
Bank interest payable (2,178) (105)
Interest charge related to dilapidation provision (11) (5)
Total financial costs (2,189) (110) 39
Overview Business review Governance Financials
Advanced Computer Software Group plc
Annual Report 2011
8 Employee expenses
2011
£000
2010
£000
Wages, salaries and fees 39,396 10,431
Social security costs 5,112 1,148
Pension costs 1,195 439
 45,703 12,018
  
Share based payments 1,853 572
47,556 12,590
The average monthly number of employees of the Group (including Directors) during the year was:
2011 2010
Development and operations 658 1 76
Sales and marketing 121 36
Management and admin 80 28
 859 240
The remuneration of the Directors of the Company was as follows:
2011
£000
2010
£000
Emoluments 1,727 397
Contributions to defined contribution pension schemes – 9
Share based payments 851 329
Total 2,578 735
   
Highest paid director  
Gross salary 50 16
Car and other benefits in kind 9 9
Waived salary and bonus 1,387 193
 1,446 218
In the year ended 28 February 2011, three Directors’ were remunerated as employees through payroll and one 
Director was remunerated via a consultancy fee paid to Marwyn Capital LLP which is included in the director’s 
remuneration report.
Vinodka Murria waived the right to her full salary and bonus under her employment contract and elected to 
receive £0.05m gross salary during the year plus the provision of a company car. The Group paid the waived 
elements of her salary and bonus plus other benefits and national insurance saved to PS Foundation registered 
charity number 1123570.
The Directors believe that the key management personnel are the Executive and Non-Executive Directors. 40 Advanced Computer Software Group plc
Annual Report 2011
9 Taxation
2011
£000
2010
£000
UK corporation tax 4,099 1,507
UK deferred tax (5,147) (507)
(1,048) 1,000
The tax charge for the year is lower than the standard rate of 28% corporation tax in the United Kingdom as 
explained below:
2011
£000
2010
£000
Tax reconciliation:
Profit/(loss) on ordinary activities before tax 3,124 4,169
UK corporation tax at 28% (2010:28%) 875 1,167
Effects of:
Items not deductible/taxable for tax purposes 434 378
Additional deduction for R&D expenditure (126) –
Overseas tax differences 10 –
Utilisation of previously unrecognised tax losses (77) (555)
Loss carried forward to future periods – 10
Prior year adjustment (1,480) –
Change in tax rate (684) –
Tax charge for the year (1,048) 1,000
The Group has recognised a tax credit for the year of £1.0m (2010: charge of £1.0m). The effective rate of (33%)  
(2010: 24%) has been driven by adjustments to deferred tax as a result of the change in the UK Corporation tax rate 
(credit of £0.7m) and a reassessment of the likelihood of the group being able to utilise trading losses and capital 
allowances following the successful integration of its acquired businesses (credit of £1.5m). The effective rate 
excluding these adjustments would be 38% which is higher than the statutory rate of 28% as a result of non-tax 
deductible expenses of £0.4m less additional R&D relief of £0.1m.
On the 29 March 2011 a 26% rate of UK corporation tax was enacted. The Company will benefit from a  
£683,000 reduction in the 2012 tax charge as a result of the recalculation of the net deferred tax liabilities  
as at 28 February 2011 from 27% to 26%. Further reductions of the UK corporation tax rate are in discussion.
Notes to the consolidated  
financial statements
continued 41
Overview Business review Governance Financials
Advanced Computer Software Group plc
Annual Report 2011
10 Earnings per share
The basic earnings per share has been calculated by dividing the net profit attributable to ordinary shareholders  
by the weighted average number of shares in issue during the relevant period. 
Earnings per share
2011 2010
Net earnings attributable to ordinary shareholders (£000) 4,172 3,169
Weighted average number of ordinary shares in issue 337 ,118,941 296,726,1 12
Basic earnings per share 1.2p 1.1p
Diluted earnings per share
2011 2010
Weighted average number of ordinary shares in issue 337 ,118,941 296,726,1 12
Adjustment for share schemes 49,845,236 32,332,586
Weighted average number of potential ordinary shares in issue 386,964,177 329,058,698
Diluted basic earnings per share 1.1p 1.0p
The diluted profit per share has been calculated by dividing the net profit attributable to ordinary shareholders  
by the weighted average number of shares in issue during the year, adjusted for potentially dilutive shares that  
are not anti-dilutive. 
The adjusted EPS is calculated by removing the one-off restructuring costs, share based payments, amortisation  
of acquired intangible assets and tax adjustments from the net profit.
Earnings
£000
Weighted
average
number of
 shares
Per share
 amount 
Pence
Basic earnings per share 4,172 337 ,118,941 1.2
Amortisation of acquired intangible assets 15,394  
Share based payments 1,853  
Reorganisation costs 298  
Tax effect on adjustment (6,345)  
Adjusted earnings per share 15,372 337 ,118,941 4.6
    
Diluted earnings per share 4,172 386,964,177 1.1
Amortisation of acquired intangible assets 15,394  
Share based payments 1,853  
Reorganisation costs 298  
Tax effect on adjustment (6,345)  
Adjusted diluted earnings per share 15,372 386,964,177 4.0
11 Acquisitions
Small acquisitions during the year
The Group acquired all of the ordinary shares of two entities during the year – Cerrus Limited (acquired 1 March 2010) 
and Caresys Software Limited (acquired 30 September 2010) as shown in the aggregate table below*. 42 Advanced Computer Software Group plc
Annual Report 2011
11 Acquisitions continued
Cerrus
Limited
£000
Caresys
 Software
 Limited
£000
Fair value at
acquisition
£000
Property plant and equipment 11 18 29
Cash and cash equivalents (31) 23 (8)
Current assets 31 368 399
Current liabilities (485) (454) (939)
Long term liabilities (402) (519) (921)
Customer contracts and relationships 373 981 1,354
Technology 245 601 846
Deferred tax liabilities (17 4) (424) (598)
 (432) 594 162
    
Goodwill on acquisition 771 2,024 2,795
Consideration paid 339 2,618 2,957
Loan repayment at acquisition 502 282 784
Cash acquired (31) 23 (8)
Net cash outflow 872 2,877 3,749
*the assets shown were recognised on acquisition 
These acquisitions augmented the Group’s offering to the Health & Care sector. The companies were acquired for a total 
consideration of £3.0m. In the post acquisition period the companies contributed net profit of £0.1m to the Group’s results.
Prior year acquisitions
Business Systems Group Holdings plc
On 12 June 2009, the Group acquired all of the ordinary shares in Business Systems Group Holdings plc (BSG)  
for a total consideration net of cash acquired with the business of £8.2m, satisfied in cash and shares. BSG provides 
hosting and IT outsourcing services, which has enabled Advanced to extend effective hosting, managed services 
and outsourcing capabilities to it’s customers across the NHS primary care sector.
Book value
£000
Adjustment
£000
Fair value at
acquisition
£000
Property plant and equipment 1,019 – 1,019
Inventories 92 – 92
Trade and other receivables 5,654 – 5,654
Cash and cash equivalents 10,180 – 10,180
Trade and other payables (3,060) – (3,060)
Other creditors (3,529) – (3,529)
Provisions (592) – (592)
Customer relationships – 2,841 2,841
Deferred tax asset 1,238 (795) 443
11,002 2,046 13,048
    
Goodwill on acquisition 5,356
Consideration paid 18,404
Issue of 14,000,000 shares (5,180)
Exercise price of options acquired (841)
Cash acquired (10,180)
Net cash outflow (including expenses of £0.4m) 2,203
Notes to the consolidated  
financial statements
continued 43
Overview Business review Governance Financials
Advanced Computer Software Group plc
Annual Report 2011
11 Acquisitions continued
Redac Holdings Limited (COA)
On 11 February 2010, the Group acquired all of the ordinary shares in Redac Holdings Limited (RHL) for a total cash 
outflow of £99.3m, including consideration paid, transaction costs and the assumption of various shareholder loans. 
RHL provides software products for accounting and budgeting, data analysis, business intelligence (including 
patient pathways), compliance, billing, executive dashboard, HR, payroll, procurement, document management 
and business process outsourcing (BPO) service.
Book value
£000
Adjustment
£000
Fair value at
acquisition
£000
Property plant and equipment 2,535 – 2,535
Previously capitalised intangibles 106 – 106
Investments 2 – 2
Inventories 498 – 498
Trade and other receivables 11 ,352 – 11 ,352
Cash and cash equivalents 4,442 – 4,442
Loans and borrowings (61,680) – (61,680)
Trade and other payables (29,458) – (29,458)
Provisions (586) – (586)
Customer contracts and relationships – 61,596 61,596
Technology and R&D value – 20,136 20,136
Brand value – 3,590 3,590
Deferred tax asset 1,020 (23,890) (22,870)
(71,769) 61,432 (10,337)
    
Goodwill on acquisition 51,335
Consideration paid 40,998
Cash acquired (3,314)
Loans and borrowings acquired 61,680
Amounts owing at 28 February 2010 (1,038)
Net cash outflow at 28 February 2010 98,326
Fees paid during the year 979
Net cash outflow at 28 February 2011 99,305
Acquisition of smaller entities
The Group acquired all of the ordinary shares of certain other smaller entities during the prior year. These were:
• StaffPlan Limited (acquired 12 July 2009) 
•  Advanced Business & Healthcare Solutions India Private Limited (formerly Oak Labs India Private Limited, 
acquired 28 September 2009)
•  Healthy Software Limited (acquired 12 November 2009) 44 Advanced Computer Software Group plc
Annual Report 2011
12 Intangible assets
Year ended 28 February 2011
Customer
 contracts and
 relationships
£000
Brand
£000
Technology
£000
Goodwill
£000
Development
costs
£000
Total
£000
Cost
At beginning of year 67,533 3,965 21,673 66,998 1,337 161,506
Acquisitions through business combinations 1,354 – 846 2,779 – 4,979
Eligible development costs capitalised – – – – 1,679 1,679
At end of year 68,887 3,965 22,519 69,777 3,016 168,164
       
Amortisation      
At beginning of year (1,557) (183) (476) – (428) (2,644)
Charged in year (8,943) (991) (5,460) – (282) (15,676)
At end of year (10,500) (1,174) (5,936) – (710) (18,320)
Net book value      
At 28 February 2011 58,387 2,791 16,583 69,777 2,306 149,844
 
Net book value     
At 28 February 2010 65,976 3,782 21,197 66,998 909 158,862
Expenditure on research and development in the year was £8.2m (2010: £0.8m) of which £1.7m (2010: £0.3m) 
relating to the development of new products was capitalised in accordance with IFRS.
Year ended 28 February 2010
Customer
 contracts and
 relationships
£000
Brand
£000
Technology
£000
Goodwill
£000
Development
costs
£000
Total
£000
Cost
At beginning of year 2,805 375 375 8,616 910 13,081
Acquisitions through business combinations 64,728 3,590 21,298 58,382 87 148,085
Eligible development costs capitalised – – – – 340 340
At end of year 67,533 3,965 21,673 66,998 1,337 161,506
 
Amortisation 
At beginning of year (281) (47) (47) – (273) (648)
Charged in year (1,276) (136) (429) – (155) (1,996)
At end of year (1,557) (183) (476) – (428) (2,644)
 
Net book value
At 28 February 2010 65,976 3,782 21,197 66,998 909 158,862
  
Net book value
At 28 February 2009 2,524 328 328 8,616 637 12,433
Notes to the consolidated  
financial statements
continued 45
Overview Business review Governance Financials
Advanced Computer Software Group plc
Annual Report 2011
12 Intangible assets continued
Impairment tests for cash-generating units containing goodwill.
The goodwill on the balance sheet relates to the acquisitions in the current and prior periods (Acquisition note 11)  
and is calculated as: the total consideration paid (including fees for the acquisition made in prior periods) less the 
fair value of the net assets acquired.
This goodwill has then been tested for impairment as at 28 February 2011 following IAS 36 criteria.
To confirm that no impairment of goodwill is necessary , management compared the carrying value of each CGU  
to the value in use. The value in use was calculated using the subsidiary’s 2011-12 budget ending 28 February 2012 
as approved by the Board, 2012-13 forecasts and forecasts, with a 4% growth assumption, for the following four 
years. Terminal values were calculated, based on the perpetuity of cash generated. Forecasts and terminal values 
were discounted using the following discount rates:
• 365 Managed Services  20.10%
• Business Solutions  12.40%
• Health & Care   12.40%
The pre tax discount rates are based on beta values of similar companies in the same industry adjusted to reflect 
management’s assessment of specific risks related to the subsidiary.
No impairment is deemed necessary as a result of the testing performed as shown in the table below:
CGU listing Goodwill Intangibles Fixed assets
Carrying
 value
(Value in use)
 VIU
Excess
VIU Sensitivity
365 Managed Services 5,382 2,068 8 17 8,267 1 7,47 6 9,209 111%
Business Solutions 51,329 71,035 2,422 124,786 145,734 20,948 1 7%
Health & Care 12,857 4,565 340 1 7,7 62 68,050 50,288 283%
The sensitivity above shows the sensitivity between the carrying value and the value in use.
The key assumptions used and the approach to determining their value are:
Assumption How determined
Discount future cashflows These have been based on the Board approved forecast for 2013 
and contain 4% growth, which the Board believe is appropriate.
Perpetuity cashflows 2.5% growth 46 Advanced Computer Software Group plc
Annual Report 2011
13 Property, plant and equipment
Year ended 28 February 2011
Leasehold
 property
£000
Office
equipment &
 furniture
£000
Computer
 equipment
£000
Total
£000
Cost
Balance at 1 March 2010 2,941 5,440 10,200 18,581
Assets acquired as part of business combinations – 27 9 36
Additions in the year – 419 751 1,1 70
Disposals (1,452) (65) (267) (1,784)
At 28 February 2011 1,489 5,821 10,693 18,003
Depreciation    
Balance at 1 March 2010 1,453 4,579 8,768 14,800
Depreciation charge for the year 165 231 874 1,270
Disposals (1,452) (61) (1 75) (1,688)
At 28 February 2011 166 4,749 9,467 14,382
Net book value    
At 28 February 2011 1,323 1,072 1,226 3,621
Net book value    
At 28 February 2010 1,488 861 1,432 3,781
£1.5m of disposals relates to a write off of a leasehold property due to a lease that has expired during the year.
Year ended 28 February 2010
Leasehold
 property
£000
Office
equipment &
 furniture
£000
Computer
 equipment
£000
Total
£000
Cost    
Balance at 1 March 2009 120 516 924 1,560
Assets acquired as part of business combinations 2,819 4,967 9,058 16,844
Additions in the year 2 41 234 277
Disposals – (84) (16) (100)
At 28 February 2010 2,941 5,440 10,200 18,581
Depreciation    
Balance at 1 March 2009 52 363 713 1,128
Assets acquired as part of business combinations 1,289 4,021 7,707 13,017
Depreciation charge for the year 112 202 384 698
Disposals – (7) (36) (43)
At 28 February 2010 1,453 4,579 8,768 14,800
Net book value    
At 28 February 2010 1,488 861 1,432 3,781
Net book value    
At 28 February 2009 68 153 2 11 432
Notes to the consolidated  
financial statements
continued 47
Overview Business review Governance Financials
Advanced Computer Software Group plc
Annual Report 2011
14 Inventories
2011
£000
2010
£000
Finished goods 123 106
Work in progress 864 523
987 629
15 Trade and other receivables
2011
£000
2010
£000
Trade receivables 20,919 1 7,895
Other receivables 495 357
Prepayments 3,564 3,504
Accrued income 195 452
25,173 22,208
16 Cash and cash equivalents
2011
£000
2010
£000
Cash at bank 11,226 10,193
Bank short term deposits 10 86
11,236 10,279
17 Trade and other payables: current
2011
£000
2010
£000
Trade payables 1,993 3,812
Taxation and social security 4,615 3,435
Accruals 9,982 8,755
Other payables 372 454
16,962 16,456
18 Deferred tax liability
Deferred taxation is calculated in full on temporary differences under the liability method using the taxation rate 
27% (2010: 28%). Deferred taxation assets have been recognised on temporary differences where the Directors 
believe that it is probably that these assets will be recovered.
Asset/
(liability)
£000
2011
(Charged)/
credited
to profit
or loss
£000
Asset/
(liability)
£000
2010
(Charged)/
credited
to profit
or loss
£000
Accelerated capital allowances 2,016 414 1,602 93
Short term temporary differences – liabilities (620) 380 (1,000) 40
Short term temporary – assets 671 671 – –
Intangible assets (20,970) 4,113 (24,548) 515
Taxation losses 483 (431) 914 (141)
(18,420) 5,147 (23,032) 507
Included in the net deferred tax liability of £18.4m is £3.2m of deferred tax assets split as £2.0m accelerated capital 
allowance, £0.5m tax losses and £0.7m short term temporary differences and the deferred tax liability of £21.6m  
is split £21.0m intangible assets and £0.6m short term temporary differences.
The Group has £6.9m (2010: £7.5m) of trading losses of which £1.8m (2010: £3.3m) are expected to be utilised 
against future profits, the balance largely relates to losses acquired in the COA group that cannot be utilised. 48 Advanced Computer Software Group plc
Annual Report 2011
18 Deferred tax liability continued
Deferred tax assets have not been recognised in respect of the following items:
2011
£000
2010
£000
Accelerated capital allowances – 4,954
Non trade loan relationship deficit 9,414 9,41 4
Management expenses 3,396 3,320
Capital losses 2,744 2,744
Taxation losses 1,694 927
1 7,248 21,359
Deferred tax asset at 27% (2010: 28%) 4,657 5,981
The un-provided deferred tax assets have not been recognised due to uncertainties over availability of  
qualifying profits.
19 Provisions: non-current
The non current provision relates to dilapidations and onerous leases in respect of buildings leased by the Group  
as well as provision arising from the acquisition made during the year.
Onerous
lease
provision
£000
Leasehold
 dilapidation
£000
Deferred
 consideration
 for purchase
 of investment
£000
Other
£000
Total
£000
At 28 February 2010 422 708 – – 1,130
Finance charges – (11) – – (11)
Amounts utilised during the year (369) – – – (369)
Amounts arising from acquisition 166 25 182 30 403
At 28 February 2011 219 722 182 30 1,153
20 Financial instruments
The maturity analysis of the Group’s financial liabilities for the year ended 28 February 2011 is as follows:
Within
the next
12 months
£000
Within
one to two
years
£000
Within
two to three
 and a half
 years
£000
Total
financial
 liabilities
£000
Loans and borrowings
Revolving facility 25,000 – – 25,000
Term loan 7,500 7,500 2,500 1 7,500
32,500 7,500 2,500 42,500
Unamortised loan issue costs (361) (361) (165) (887)
32,139 7,139 2,335 41,613
Unamortised loan issue costs 361 361 165 887
Future interest payments 1,167 325 50 1,542
33,667 7,825 2,550 44,042
Other financial liabilities 12,337 – – 12,337
46,004 7,825 2,550 56,379
Notes to the consolidated  
financial statements
continued 49
Overview Business review Governance Financials
Advanced Computer Software Group plc
Annual Report 2011
20 Financial instruments continued
The maturity analysis of the Group’s financial liabilities for the year ended 28 February 2010 was as follow:
Within
the next
12 months
£000
Within
one to two
years
£000
Within
two to three
 and a half
 years
£000
Total
financial
 liabilities
£000
Loans and borrowings
Revolving facility 26,265 – – 26,265
Term loan 8,236 6,764 10,000 25,000
34,501 6,764 10,000 51,265
Unamortised loan issue costs (357) (357) (534) (1,248)
34,144 6,407 9,466 50,017
Future interest payments 1,820 595 533 2,948
35,964 7 ,002 9,999 52,965
Other financial liabilities 12,781 – – 12,781
48,745 7 ,002 9,999 65,746
The revolving facility has a term of three years six months but is repayable on demand.
The future interest payments have been calculated based on the forecasted maturity of the term loan and 
revolving facility shown above, using an estimated 4% interest rate.
If the rates were to vary by 50 basis points, the effect on the future interest payment would be as follow:
Sensitivity on interest rate
Within
the next
12 months
£000
Within
one to two
years
£000
Within
two to three
 and a half
 years
£000
Total future
interest
 payments
£000
3.5% 1,021 284 44 1,349
4.0% 1,167 325 50 1,542
4.5% 1,313 366 56 1,735
The term loan and revolving facility are secured by way of unlimited cross guarantees and full and fixed  
floating charges over the assets of all Group companies, subject to material company provisions; first legal 
mortgages over all United Kingdom freehold and long leasehold premises; first fixed charges over all shares  
in United Kingdom subsidiaries; the assignment of rights and interests under the Sale and Purchase Agreement  
for the acquisition of Redac Holdings Limited; any hedging agreements and key contracts; and the assignment  
of keyman insurance policies.
The Group’s financial assets
Cash and receivables
2011
£000
2010
£000
Trade and other receivables 24,978 20,218
Cash and cash equivalents 11,236 10,279
36,214 30,497
The above balance represents the Group’s maximum exposure to credit risk. 50 Advanced Computer Software Group plc
Annual Report 2011
20 Financial instruments continued
The fair value of the financial instruments is equal to the carrying value. In the normal course of the Group’s 
business and in common with other businesses, the Group encounters risks that arise from financial instruments. 
This note describes the Group’s objectives, policies and processes in managing these risks and the methods used  
to measure them.
Credit risk
Credit risk is the risk that a counter party to a transaction with the Group fails to discharge its obligations in respect 
of the instrument. The Group’s credit risk arises on (i) transactions with customers following delivery of goods and/or 
services or on (ii) cash and cash equivalents placed with banks and financial institutions.
Customers
The Group provides services to Government-backed organisations (for example, NHS Primary Care Trusts) and 
commercial businesses. A small proportion of revenue is generated outside of the United Kingdom. 
Management focuses strongly on working capital management and the collection of due invoices. Regular reports 
of overdue invoices are circulated amongst senior management and the Group Board reviews debtor days each 
month as part of the monthly reporting cycle. The risk with any one customer is limited by constant review of  
debtor balances and action to resolve any issues preventing discharge of obligations.
The table below shows the aging of trade debtors that are past due invoice date and not impaired as at  
28 February 2011.
Ageing of trade receivables 2011:
Current 1-3 months >3 months
Trade receivables 13,771 6,416 732
Ageing of trade receivables 2010:
Current 1-3 months >3 months
Trade receivables 12,102 5,677 11 6
At the balance sheet date there were no significant concentrations of credit risk. The maximum exposure  
to credit risk is represented by the carrying amount of the trade and other receivables in the balance sheet.
Cash and cash equivalents
The Group places cash and cash equivalents with banks to earn interest. Due to the uncertainty within the 
financial sector over recent months, the cash has been placed with four banks to reduce the concentration  
of cash and/or deposits with any one institution. 
Market risk
Market risk is the risk that the fair value or cash flows of a financial instrument will fluctuate due to changes in 
market prices. In managing interest rate and currency risks, the Group aims to reduce the impact of short term 
fluctuations on the Group’s earnings. Over the longer term, however, permanent changes in interest rates and 
foreign exchange would have an impact on consolidated earnings.
Interest rate risk
The Group holds loans and other borrowings including a term loan repayable in equal instalments until 2013  
and a revolving credit facility , which expires in 2013. Both facilities are denominated in Sterling and incur interest  
at LIBOR plus 3%. The revolving credit facility is repayable at the Group’s discretion on a quarterly basis with the 
interest accrued, or on demand. The Group is obliged to comply with certain covenants, as detailed in the going 
concern disclosures.
In April 2010, the Group entered into a contract to hedge two thirds of the term loan with a cap at 3.3% on LIBOR. 
The Directors believe this hedge limits the Group’s exposure to interest rate charges to a manageable level.
Notes to the consolidated  
financial statements
continued 51
Overview Business review Governance Financials
Advanced Computer Software Group plc
Annual Report 2011
20 Financial instruments continued
2011 2010
Weighted average interest rates receivable  1.10% 1.18%
Weighted average interest rates payable 3.35% 3.71%
Currency risk
The Group earns very small levels of revenue from outside the UK. The value of recurring revenues is converted  
at each invoice date from a fixed Sterling value to a varied euro value and thereby minimising the currency  
risk to the Group. It is not Group policy to enter into hedging arrangements to mitigate currency risk due to the 
disproportionate cost versus risk.
All cash and cash equivalents at 28 February 2011 were denominated in sterling.
Liquidity risk
Liquidity risk is the risk that the Group cannot meet financial liabilities when they fall due. The Group’s policy for 
managing liquidity risk is to ensure that the business has enough financial resource to meet its day-to-day activities 
at any point in time. Management believes that the cash resources on hand, together with the profits of the business 
more than cover the resources needed to meet the financial liabilities of the Group.
Capital management
The Group manages its capital structure to safeguard the going concern of the Group and provide returns for 
shareholders and benefits for other stakeholders. The capital structure of the Group consists of equity (including  
share capital, retained earnings and other reserves) and debt. The Group entered in April 2010 into a contract  
to hedge two thirds of the term loan with a cap on LIBOR.
The Directors believe this hedge limits the Group’s exposure to interest rate charges to a manageable level.
The Group may maintain or adjust capital structure by issuing new shares, returning capital to shareholders  
or by paying dividends.
21 Commitments
Operating leases
Future minimum lease payments under non-cancellable operating leases are as follows:
2011 2010
Land and
 buildings
£000
Plant &
machinery
£000
Other
£000
Land and
buildings
£000
Other
£000
Within one year 1,238 1,630 168 1,374 417
In two to five years 3,348 1,913 126 1,597 201
In more than five years – – – 286 2
4,586 3,543 294 3,257 620
Pension Commitments
The Group has no defined-benefit pension schemes in place. The Group pays defined contributions into a Group 
Personal Pension Plan and individual pension plans. The assets of each of these plans are held separately from 
those of the Group in independently administered funds. The pension charge represents contributions payable  
by the Group and amounted to £1.2m (2010: £0.4m). 52 Advanced Computer Software Group plc
Annual Report 2011
22 Related Parties
The Group has identified two related parties with which it has transacted during the year.
Vin Murria, CEO of the Group, waived her right to part of her compensation due under her employment contract  
to PS Foundation, registered charity no 1123570. 
A total amount of £1.6m equivalent to the remuneration waived plus the value of the Employers’ National Insurance 
Contributions (ENIC) saved, was paid to the charity.
Mark Watts, non executive director of the Group, is also a partner in Marwyn Capital LLP, Marwyn Management 
Partners LLP and Marwyn Investment Management Limited. 
The fees for Mark Watts’ services are invoiced by Marwyn Capital LLP and amounted to £0.02m for the current year.
Marwyn Neptune Fund, a substantial shareholder in the Company , is managed on an arm’s length basis by 
Marwyn Investment Management Limited. As at 28 February 2011, Marwyn Neptune Fund held 41,849,431  
shares via its nominee, Vidacos Nominees Limited representing 12% of the issued equity of the Company.
Marwyn Management Partners LLP has been issued options (management participation option) to subscribe  
for ordinary shares and details of these options are shown in note 25 of the financial statements.
23 Group entities
        
Control of the Group
The Company believes there is no overall controlling party of Advanced Computer Software Group plc. 
The significant subsidiaries of the Group have been disclosed below:
Country of
Incorporation
Principal
activity
Class of
share held Percentage
Drury Lane (Jersey) Limited* Jersey
Holding
Company
Ordinary
shares 100%
Advanced Health and Care Limited**  
(formerly Adastra Software Limited) England
Software
development
Ordinary
shares 100%
Advanced 365 Limited** 
(formerly Business Systems Group Limited) England
IT Managed
Service
Ordinary
shares 100%
Advanced Business Software and Solutions Limited** 
(formerly COA Solutions Limited) England
Software
development
Ordinary
shares 100%
* Owned directly by Advanced Computer Software Group plc
** Owned indirectly by Advanced Computer Software Group plc
24 Share capital
The Company had 354,880,592 issued and fully paid ordinary shares listed on the Alternative Investment Market  
of the London Stock Exchange. Of these, 17 ,761,651 shares are held jointly by the Employee Benefit Trust and Vin 
Murria. The Company has one class of ordinary shares which carry no right to fixed income. Each share carries the 
right to one vote at general meetings of the Company. The Trustee of the Employee Benefit Trust and Vin Murria 
have agreed to abstain from voting at any general meeting in respect of the jointly owned shares.
2011
Number £000
2010
Number £000
Authorised for issue
Ordinary shares of £0.10 each 1,000,000,000 100,000 1,000,000,000 100,000
Allotted, called up and fully paid
Ordinary shares of £0.10 each 354,880,592 35,488 354,880,592 35,488
Notes to the consolidated  
financial statements
continued 53
Overview Business review Governance Financials
Advanced Computer Software Group plc
Annual Report 2011
24 Share capital continued
During the year ended 28 February 2011, the Company issued no new shares, the equity shares remain as follows:
Number of
 shares £000
Shares in issue at 1 January 2008 45,000,000 4,500
   
Shares issued for cash 86,088,235 8,609
Shares issued as consideration for acquisitions 40,294,1 19 4,029
Shares issued to Employee Benefit Trust 1 9 ,537,8 1 6 1,954
   
Shares in issue at 28 February 2009 190,920,170 19,092
   
Issue of share capital   
Shares issued for cash 145,250,000 14,525
Shares issued as consideration for acquisitions 18,710,422 1,871
Balance at 28 February 2010 and 28 February 2011 354,880,592 35,488
Share premium reserve
This represents the amounts subscribed for share capital in excess of the nominal value of those shares.
Merger reserve
The merger reserve represents the difference between the fair value and nominal value of the 59,004,541 Ordinary 
shares allotted to the vendors of the new businesses acquired since August 2008.
Share trust reserve
Transactions of the Company-sponsored Employee Benefit trust (EBT) are treated as being those of the Company 
and are therefore reflected in the parent company and group financial statements. In particular, the EBT’s purchases 
and sales of shares in the Company are debited and credited directly to equity. The share trust reserve comprises 
the costs of shares held by the EBT.
Profit and loss account
Cumulative net gains and losses recognised in the consolidated income statement.
Foreign exchange reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the financial 
statements of foreign operations’
25 Share options and management incentives
Share option schemes
During the year, the Group implemented a new Save as you Earn scheme and granted options to certain 
employees under the existing Enterprise Management Incentive/unapproved share option scheme. In addition, 
three key management personnel were invited to join the Management Participation Shares scheme. 
The total expense recognised for the year from share-based payments was:
2011
£000
2010
£000
Equity settled share based payment expense 1,853 572
Enterprise Management Incentive (EMI)/unapproved share option scheme
The EMI scheme was approved by HM Revenue and Customs for share options grants that fall within the EMI rules. 
Options granted that do not fall within the EMI rules are deemed to be unapproved share options. Under the terms 
of this scheme all employees and Directors of the Group are eligible to participate. The options entitle the recipient  
to acquire ordinary shares in the Company at an exercise price determined at the date of grant.   54 Advanced Computer Software Group plc
Annual Report 2011
25 Share options and management incentives continued
Management Participation Option (MPO) and Management Participation Shares (MPS)
The MPO is an option over the Company’s shares which is held by Marwyn Management Partners LLP (‘Marwyn’).
The key executives of the Group have subscribed for MPS shares in Drury Lane (Jersey) Limited, a subsidiary of  
the Company. 
Accounting for MPO and MPS
The MPO and MPS schemes are share based payment arrangements and awards made under each scheme to  
the relevant counterparty are made using similar terms and conditions.
In exchange for the MPO, Marwyn has agreed to assist the Company in meeting its business strategy by providing 
advice and assistance in evaluating the merits of strategic acquisitions and support in the overall market positioning 
of the Group to create additional shareholder value. These services are to be provided throughout the duration of 
the vesting period. The Company is not separately charged for any of these services by Marwyn. At inception of 
the scheme, the Company judged these services to be substantially similar to those provided by a non-executive 
director of the Group. Consequently , the Company has accounted for this scheme under IFRS 2 as if the services  
are substantially similar to those rendered by an employee.
Each scheme entitles the counterparty to receive a fixed percentage of any increase in ‘shareholder value’ at the 
end of the vesting period. Each award is subject to the achievement of a growth condition and certain vesting 
criteria. Shareholder value for this purpose is broadly defined as the difference between:
 • the market capitalisation of the Company at the date of exercise; and 
•  the sum of the market capitalisation of the Company on 29 August 2008 plus the aggregate subscription price  
of all ordinary share capital up to the relevant date of exercise, adjusted for dividends and any returns of capital 
to shareholders.
The increase in shareholder value is measured over a three year period (‘the initial vesting period’) from the grant 
date, 29 August 2008, to 28 August 2011 However, in order for the participants to receive any award, the Company’s 
share price must have grown by an 11% compound annual growth rate over the initial vesting period (‘the growth 
condition’). In the event that the growth condition has not been met, then the vesting period will be extended by  
a further two years to 28 August 2013 (‘the extended vesting period’). 
If the growth condition is not met at the end of the extended vesting period then the award will lapse and the 
counterparty will not receive any value under either scheme. 
Further, the awards will vest if there is a change in control of the Group.
In the case of the MPO scheme, the counterparty is required to pay 10p (or nominal price) for the share on the date 
when the award is settled. However, the counterparty will receive an award equivalent to 5% of the increase in 
shareholder value after deduction of this price. The MPO scheme is treated as equity settled as the counterparty 
must subscribe for ordinary share capital of the Company. There is no other settlement option. 
In the case of the MPS scheme, the counterparty has subscribed for shares in a subsidiary company, Drury Lane 
(Jersey) Limited. If the vesting conditions are achieved then the counterparties can sell these shares to the Company 
and receive an amount equivalent to 15% of the increase in the Group’s value. At the Company’s discretion, the 
amount can be settled in cash or issue of shares in Advanced Computer Software Group plc. In addition to the 
conditions set out above, should the counterparty leave during the vesting period the awards are subject to good 
and bad leaver provisions. 
The Company has measured the fair value of the award at the grant date, using an option pricing model  
(a binomial lattice model) that simulates the increase in shareholder value of the Group and therefore allows  
an estimate of the fair value delivered to participants to be discerned based on the anticipated vesting date.  
The option model also simulates the likelihood of the Company achieving the growth condition.
The list of options disclosed on page 56 shows the number of shares that would have to be issued to settle the 
awards, if the settlement had occurred at the balance sheet date.
Notes to the consolidated  
financial statements
continued 55
Overview Business review Governance Financials
Advanced Computer Software Group plc
Annual Report 2011
25 Share options and management incentives continued
Save as you Earn (SAYE)
The Group implemented Save as you Earn schemes, in September 2009 and August 2010. Participation  
in the scheme was open to all employees employed at the date of commencement of the three year scheme.  
All participants agreed to save a fixed amount monthly into the scheme and in return received an option  
to purchase shares in the capital of the Company at a discounted price at the conclusion of the scheme.  
The discounted share price is calculated as the market price at the commencement of the scheme less 10%.
Company Share Option Plan (CSOP)
CSOP share options are awarded to certain Group employees to incentivise them to positively impact the Group’s 
performance over the medium term. The options are awarded with an exercise price equal to fair market value 
and shares typically cannot be exercised until three years after the date on which the option was granted.  
Options granted to employees who leave before the exercise date will usually lapse.
Options outstanding
The number and weighted average exercise prices of share options are as follows:
2011
Weighted
 average
 exercise
price
 (pence)
Number of
options
granted 
2010
Weighted
 average
 exercise
price
 (pence)
Number of
options
 granted 
restated 
Outstanding at the beginning of the year – restated 8.30 40,894,961 10.00 1,600,000
Granted during the year 49.18 12,501,608 5.68 6,733,882
Movement in the number of shares required to fulfil awards made 
under MPO/MPS* (0.90) (3,258,679) 2.55 32,561,079
Options expired during the year – – – –
Outstanding at the end of the year 15.67 50,137,890 8.30 40,894,961
* In the case of the MPO scheme, the counterparty is required to pay 10p (or nominal price) for the share on the date when the award is settled, which is 
reimbursed by a further issue of shares. For the MPS/MPO schemes, the comparative has been restated and increased by 2,531,966 to reflect the correct 
number of shares required to fulfil the MPO scheme, as if that scheme had been exercisable at the balance sheet date.
At the year end, no options were exercisable.
The fair value of all employee share schemes is measured using a binomial lattice model. Measurement inputs and 
assumptions are as follows:
For the options granted during the year ended 28 February 2011:
Options granted  
during the year
Weighted
 average
fair value of
 share options
(pence)
Weighted
 average 
share price of
 share options
(pence)
Weighted
 average
 exercise price
(pence)
Expected
volatility
Option
life
Expected
 dividends Risk-free rate
MPS 49.6 42.0 – 40.0% 2.5 – 4.8%
EMI (unapproved) 14.5 38.2 38.1 50.3% 3.0 – 2.7%
CSOP 15.1 38.2 39.0 52.4% 3.0 – 2.8%
SAYE 6.1 35.0 31.5 54.0% 3.0 – 2.0%
For the options granted during the year ended 28 February 2010:
Options granted  
during the period
Weighted
 average
fair value of
 share options
(pence)
Weighted
 average 
share price of
 share options
(pence)
Weighted
 average
 exercise price
(pence)
Expected
volatility
Option
life
Expected
 dividends Risk-free rate
EMI (approved) 30.2 38.3 10.0 50.0% 3.0 – 3.0%
EMI (unapproved) 31.3 40.0 38.1 50.0% 3.0 – 3.0%
CSOP 15.8 40.0 38.5 50.0% 3.0 – 3.0%
SAYE 8.2 34.4 38.5 50.0% 3.0 – 2.8%
The expected volatility is based on the historic volatility adjusted for any expected changes to future volatility. 56 Advanced Computer Software Group plc
Annual Report 2011
Notes to the consolidated  
financial statements
continued
25 Share options and management incentives continued
The range of exercise prices and contractual life of outstanding options is analysed as follows:
Option scheme
Date of
grant
2011
Number
Exercise
price
(pence)
Contractual
life
MPO* 23.07 .08 9,203,959 10 4
MPS* 30.07 .08 20,098,440 – 4
EMI 14.10.08 1,500,000 10 10
EMI 19 .01.10 100,000 10 10
EMI 04.06.09 921,500 10 10
EMI 08.06.09 320,000 10 10
SAYE 21.09.09 2,132,383 38.5 10
EMI (unapproved) 06.01.10 1,688,312 38.5 10
EMI (unapproved) 06.01.10 172,078 34 10
CSOP 06.01.10 1,499,610 38.5 10
EMI (unapproved) 18.03.10 4,225,000 40 10
CSOP 18.03.10 2,215,000 40 10
SAYE 13.08.10 3,658,521 31.5 10
EMI (unapproved) 23.12.10 1,939,707 34 10
CSOP 23.12.10 463,380 34 10
50,137,890
*At 28 February 2010, the total number of shares required to settled awards under the MPO and MPS scheme was 10,039,244 and 22,521,834 respectively.
26 Subsequent events
Acquisition of Open Logistix Systems Ltd          
       
On 4 March 2011, Advanced acquired 100 per cent of the issued share capital of Open Logistix Systems Ltd  
for £1.2m net of cash acquired with the business. 57
Overview Business review Governance Financials
Advanced Computer Software Group plc
Annual Report 2011
Company balance sheet
as at 28 February 2011
Notes
2011
£000
2010
£000
Fixed assets
Investment in subsidiary undertakings 3 75,793 35,007
Amounts owed by subsidiary undertakings – 1,954
Total fixed assets 75,793 36,961
    
Current assets   
Debtors – due within one year 4 17 685
Debtors – due after more than one year 4 – 39,159
Cash at bank and in hand 88 594
Deferred taxation 5 – 51
  105 40,489
    
Creditors: amounts falling due within one year 6 (45) (1,049)
Net current assets 60 39,440
    
Total assets less current liabilities 75,853 76,401
    
Creditors: amounts falling due after more than one year 7 (60) (1,954)
Net assets 75,793 74,447
    
Capital and reserves   
Share capital 8,9 35,488 35,488
Share premium 9 33,361 33,361
Merger reserve 9 7,826 7,826
Share trust reserve 9 (1,777) (1,954)
Capital contribution reserve 9 2,416 634
Retained earnings 9 (1,521) (908)
Shareholders’ funds 9 75,793 74,447
These financial statements were approved and authorised for issue on 15 July 2011 by the board of directors and 
signed on its behalf by:
Barbara Firth
Director 58 Advanced Computer Software Group plc
Annual Report 2011
Notes to the financial statements  
of the Company
1 Accounting policies
The following accounting policies have been applied consistently in dealing with items which are considered 
material in relation to the Company’s financial statements.
Basis of preparation
The financial statements have been prepared in accordance with applicable accounting standards generally 
accepted in the United Kingdom and under the historical cost convention. The financial statements have been 
prepared on the going concern basis.
Profit and loss account
Under section 408 of the Companies Act 2006 the Company is exempt from the requirement to present its own  
profit and loss account. The loss for the year ended 28 February 2011 is disclosed in note 10.
Taxation
Current tax, including UK corporation tax is provided at amounts expected to be paid (or recovered) using the  
tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised, without discounting, in respect of all timing differences between the treatment of certain 
items for taxation and accounting purposes which have arisen but not reversed by the balance sheet date, except 
as otherwise required by Financial Reporting Standard 19: Deferred Tax. Deferred taxation assets are recognised  
to the extent that it is regarded as more likely than not that they will be recovered.
Investments in subsidiaries
Investments in subsidiaries are stated at cost less provision of impairment value. 
Employee Benefit Trust.
As the Company is deemed to have some control of the Employee Benefit Trust, it is treated as a subsidiary 
undertaking. The assets (other than investments in the Company’s shares), liabilities, income and expenses are 
included on a line by line basis in the consolidated financial statements. The investment in the Company’s shares  
is shown in the share trust reserve and is treated as a deduction from equity in the balance sheet.
Share-based payments 
The Company operates equity-settled share based option plans. The fair value of the employee services received in 
exchange for the participation in the plan is recognised as an expense in the profit and loss account. The Company 
has accounted for options granted to the employees of subsidiary undertakings as capital contributions, which have 
been recharged to the intermediate company holding the investment. The corresponding credit has been 
recognised in the capital contribution reserve. 
The fair value of the employee service is based on the fair value of the equity instrument granted. This expense  
is spread over the vesting period of the instrument. The corresponding entry is credited to equity. The liability for 
social security costs arising in relation to the awards is measured at each reporting date based upon the share price 
at the reporting date and the elapsed portion of the relevant vesting periods to the extent that it is considered that  
a liability will arise.
Dividends
Dividend distributions to the Company’s shareholders are recognised in the period when paid or, if earlier, in  
which the dividend is approved by the Company’s shareholders. No dividends were distributed in the year ended 
28 February 2011.
2 Wages and salaries costs
The Company has four directors, their costs are borne by a subsidiary company and their remuneration details  
are provided in the Directors’ remuneration report within the Group financial statements. 59
Overview Business review Governance Financials
Advanced Computer Software Group plc
Annual Report 2011
3 Investments in subsidiaries
£000
As at 28 February 2010 35,007
Investment in subsidiaries 39,004
Share incentive charges – subsidiaries 1,782
As at 28 February 2011 75,793
The investment is the cost of the Company’s holding in Drury Lane (Jersey) Ltd. The Company exchange its net 
assets to settle its investment in Drury Lane (Jersey) Ltd.
The undertakings, in which the Company’s has an interest at 28 February 2011 of more than 20%, either directly  
or indirectly , are as per note 23 of the Group financial statements.
4 Debtors
2011
£000
2010
£000
Amounts due within one year:
Other debtors 17 67
Amounts owed by subsidiary undertakings – 618
 17 685
Amounts due after more than one year: 
Amounts owed by subsidiary undertakings – 39,159
5 Deferred taxation
2011
£000
2010
£000
Short term differences – 51
Opening balance 51 16
Movement in the year (51) 35
Closing balance – 51
6 Creditors: amounts falling due within one year
2011
£000
2010
£000
Trade payables 4 435
Accruals and deferred income 41 61 4
45 1,049
7 Creditors: amounts falling due after more than one year
2011
£000
2010
£000
Amounts due to Group companies 60 1,954 60 Advanced Computer Software Group plc
Annual Report 2011
Notes to the financial statements  
of the Company
continued
8 Called up share capital
2011
Number £000
2010
Number £000
Authorised for issue
Ordinary shares of £0.10 each 1,000,000,000 100,000 1,000,000,000 100,000
Allotted, called up and fully paid
Ordinary shares of £0.10 each 354,880,592 35,488 354,880,592 35,488
Details of the share options and share capital issued by the Company are detailed in notes 24 and 25 of the Group 
financial statements.
9 Reconciliation of movement in shareholders funds
Ordinary
 share
capital
£000
Share
 premium
£000
Merger
reserve
£000
Capital
contribution
 reserve
£000
Share trust
 reserve
£000
Profit
and loss
 account
£000
2011
Total
£000
2010
Total
£000
Opening balance 35,488 33,361 7,826 634 (1,954) (908) 74,447 24,845
Issue of share 
capital 
For cash – – – – – – – 43,575
In respect of 
acquisition of 
subsidiaries – – – – – – – 6,876
Transfer of shares to 
employees from EBT – – – – 1 77 (1 77) – –
Costs of issuing 
share capital – – – – – – – (1 , 115)
Share based 
payment – – – 1,782 – – 1,782 572
Loss for the year – – – – – (436) (436) (306)
Closing balance 35,488 33,361 7,826 2,416 (1,777) (1,521) 75,793 74,447
10 Loss for the year
The loss for the year was £0.4m (2010: £0.3m). Company information
Legal form
Public Limited Company
Country of incorporation
United Kingdom
Company number
5965280
Registered address
Munro House 
Portsmouth Road 
Cobham 
Surrey 
KT11 1TF
Nominated advisor and joint broker
Singer Capital Markets Limited 
1, Hanover St 
London 
W15 1YZ
Joint broker
Mirabaud Securities LLP 
21, St James’s Square 
London 
SW1Y 4JP
Bankers
HSBC Bank Plc 
8, Canada Square 
London 
E14 5HQ
Auditors
KPMG Audit Plc 
Arlington Business Park, 
Theale, Reading  
RG7 4SD
Solicitors
CMS Cameron McKenna LLP 
Mitre House 
160 Aldersgate Street 
London 
EC1A 4DD
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Advanced Computer Software Group is a leading  
provider of patient management software solutions for the 
healthcare sector, and back office solutions for businesses 
and organisations in both the public and private sectors. 
The Group has an annual turnover of £95m and over 850 
staff based in seven regional offices serving over 7,000 
customers within the UK.
Originally established to consolidate the fragmented 
primary care software market, the Group now comprises 
three divisions addressing the needs of both public and 
private sector organisations. 
The Health & Care division sells a range of products to  
the NHS and private sector including patient workflow 
management and case management for social care 
providers, mobile applications for care in the community 
and rostering applications for social care settings. 
The Business Solutions division provides accounting, 
payroll, HR and document management solutions to local 
authorities, healthcare organisations and companies 
across the private sector. 
Underpinning these divisions, the Group’s 365 Managed 
Services division supports the Group’s software portfolio in 
addition to providing managed services to a wide range of 
customers. By means of this common technology platform 
the Group is able to offer solutions in a variety of ways to 
best suit customers’ business needs including the provision 
of hosted Cloud-based solutions, such as Software as a 
Service (SaaS), which can be delivered as a fully managed 
service with software hosted either in the Group’s data 
centre or at customers’ own premises.
Contents
 
Overview 
1	 O p e r at i o nal 	 an d 	 finan c ial 	hi ghli ght s
2	 B u s in e s s 	 at 	 a 	 gl an c e
4	 C hair man ’ s 	 s t at e m e nt
6	 C hi e f 	 E x e c u t i v e’ s 	 s t r at e gi c 	 r ev i ew
B u s in e s s 	 r ev i ew 
8	 O p e r at in g 	 r ev i ew
1 2	 F inan c ial 	 r ev i ew
1 3 	 	 C o r p o r a t e 	 s o c ial 	 r e s p o n s ib ili t y	
s t at e m e nt
G o v e r nan c e
1 5	 B o ar d 	 o f 	 D ir e c t o r s
1 6	 D ir e c t o r s ’ 	 r e p o r t
1 9	 C o r p o r at e 	 g o v e r nan c e 	 s t at e m e nt
2 1 	 	 S t a t e m e nt 	 o f 	 D ir e c t o r s ’	
r e s p o nsib ilitie s
2 2 	 D ir e c t o r s ’ 	 r e mun e r a t i o n 	 r e p o r t
2 4 	 	 I n d e p e n d e nt 	 au di t o r ’ s 	 r e p o r t 	 t o	
the	m em ber s 	 o f 	 A d v a n ced	
Com pu ter 	 So f t w a re 	 Gro u p 	 p l c
F in a n c ial s	 
2 5	 C o n s o li dat e d 	 in c o m e 	 s t at e m e nt
2 6 	 	 C o n s o li d a t e d 	 s t a t e m e nt 	 o f	
c ompr e h e n s i v e 	 in c om e
2 7	 	 C o n s o li dat e d 	 b al an c e 	 s h e e t
2 8	 	 C o n s o li dat e d 	 c a s h 	 fl o w 	 s t at e m e nt
2 9	 	 C o n s o li dat e d 	 s t at e m e nt 	 o f 	 c han g e s	 
in 	 e qui t y
3 0 	 	 N o t e s 	 t o 	 t h e 	 c o n s o li d a t e d	 
fi n an c ial 	 s t at e m e nt s
5 7	 	 C o mp an y 	 b al an c e 	 s h e e t
5 8 	 	 N o t e s 	 t o 	 t h e 	 fi n a n c ial 	 s t a t e m e nt s	 
o f 	 t h e 	 C o mp an y
I b c 	 	 C o m p an y 	 inf o r ma t i o n
Profile
Innovation
& Efficiency Advanced Computer Software Group plc
Annual Report 2011
Innovation
& Efficiency
Advanced Computer Software Group plc Annual Report 2011
Advanced Computer Software Group plc
Munro House, Portsmouth Road, 
Cobham, Surrey KT11 1TF
T: 01932 584 000 
F: 01932 584 001 
E: investor-relations@advancedcomputersoftware.com