Empowering Recruitment  
Globally Through  
Technology
Annual Report and Accounts 2013
Dillistone Group Plc Annual Report and Accounts 2013 Dillistone Group Plc is a 
global leader in the supply 
of technology solutions and 
services to the recruitment 
industry worldwide
We provide software and services 
to recruitment firms and recruiting 
teams within major corporations. 
Across our subsidiaries, we work with 
over 2,000 firms in over 60 countries.
Our two divisions are Dillistone 
Systems and Voyager Software. 
Dillistone Systems specialises in the 
supply of software and services into 
executive level recruitment teams. 
Voyager Software’s clientele are 
primarily involved in contingent 
recruitment, including permanent 
placement, contract placement and 
the provision of temporary staff. 1
Dillistone Group Plc 
Annual Report and Accounts 2013
Strategic Report Governance Financial Statements
www.dillistonegroup.com
Adjusted basic EPS pence
12
13
7.20
7.99
+11%
Recurring Revenues £’000
12
13
4,529
5,271
+16%
Highlights
Highlights for the year:
• Revenues up 15 % to £8.1m
• Record level of recurring revenues of £5.3m up 
16 % from 2012
• Adjusted operating profits
1
 up 7% to £1.8m
• Adjusted EBITDA
2
 increased 12% to £2.2m 
• Adjusted pre-tax profits
3
 up 7% to £1.8m
• Adjusted earnings per share
4
 up 1 1 % to 7 .99p 
• Final dividend of 2.6p per share recommended, 
making total dividend for the year of 3.85p (a 
yield of 3.5 % on a share price of 1 1 1p)
• Cash funds of £1.4m (2012: £1.6m) after 
acquisition related payments of £0.9m. The 
Group remains debt free 
• FCP Internet acquired in July 2013
1 Adjusted operating profit is statutory operating profit before 
acquisition costs, related intangible amortisation, movements in 
deferred consideration and other one-off costs relating to 
acquisitions.
2  Adjusted EBITDA is adjusted operating profit with depreciation and 
amortisation added back. 
3  Adjusted pre-tax profits is statutory pre-tax profits before acquisition 
costs, related intangible amortisation, movements in deferred 
consideration and other one-off costs relating to acquisitions.
4  Adjusted earnings per share is computed from statutory profits after 
tax adjusted to exclude the post-tax effect of acquisition costs, 
related intangible amortisation, movements in deferred consideration 
and other one-off costs relating to acquisitions.
Strategic Report
1 Highlights
2 Dillistone Group at a Glance
5 Chairman’s statement
6 CEO’s review
10 Financial review
Governance
12 Corporate Governance Report
14 Report to the Shareholders on 
Directors’ Remuneration
16 Board of Directors
18 Directors’ Report
Financial Statements
19 Independent Auditors’ Report  
to the Members
20 Consolidated Statement of 
Comprehensive Income
21 Consolidated Statement of Changes 
in Equity
22 Company Statement of Changes  
in Equity
23 Consolidated and Company 
Statement of Financial Position
24 Consolidated Cash Flow Statement
25 Company Cash Flow Statement
26 Notes to the Financial Statements
ibc Directors and Advisers
“These are another strong  
set of results with each of  
our divisions delivering both 
top line and bottom line 
growth, while integrating  
the FCP Internet business 
and continuing to invest in 
our future. We are also,  
once again, pleased to be 
increasing our dividend.”
 Mike Love
 Non-Executive Chairman 2
Dillistone Group Plc 
Annual Report and Accounts 2013
Dillistone Systems division Our two Divisions are Dillistone Systems 
and Voyager Software
Dillistone Systems is a leading global supplier of software 
to executive search firms and to in-house search teams at 
major corporations and not-for-profit organisations. The 
Division’s main product is FileFinder 10, which is the latest 
iteration of the FileFinder software system, launched in 
March 2011 and built using Microsoft .NET framework 
technology. The Division is headquartered in the UK, but 
has offices in Germany, the United States and Australia and 
serves clients in more than 60 countries, generating more 
revenue from outside the UK than from its home market. 
Dillistone Systems is widely acknowledged to work with 
more executive search firms than any comparable supplier, 
and is also considered to be a thought leader in this space. 
As a result, the Division has also moved beyond the supply 
of software, and provides additional services including 
training in executive search techniques, marketing and 
advertising services, and also runs regular conferences 
which are open to both client and non-client firms.
Timeline
1983
The original FileFinder software 
was developed by David 
Dillistone, himself a retained 
search consultant. While it was 
initially created for in-house use, 
David soon realised that there 
was a market for it beyond his 
own firm, and so he created 
David Dillistone Systems.
1990
By the late 1990s, David had 
retired and the business – now 
renamed as Dillistone Systems – 
was owned by Custom Business 
Systems. CBS invested heavily 
in the firm and, by the end of 
the decade, offices had been 
established on three continents.
2003
In 2003, the current management 
team took part in a management 
buyout of the business. The 
dawn of the Internet meant 
that it became far easier to 
sell the FileFinder system 
internationally, and, as a result, 
Dillistone Systems grew rapidly.
Dillistone Group at a Glance 3
Dillistone Group Plc 
Annual Report and Accounts 2013
Strategic Report Governance Financial Statements
www.dillistonegroup.com
Main Group offices
Voyager Software became a part of the Dillistone Group in 
September 2011. At the time of its acquisition by Dillistone, 
it provided end-to-end recruitment solutions principally to 
the third party recruiting sector. Voyager’s products included 
Voyager Professional, Voyager Commercial, Voyager VDQ! 
and Voyager Mid-Office, a product range largely used 
by temp and contingency recruiters. In September 2012, 
Voyager launched its next generation software platform, 
Voyager Infinity. Voyager Infinity is designed to improve 
the performance of recruitment companies specialising in 
both contract and permanent placements. Infinity meets 
the demands of flexibility and functionality required by 
these firms, putting it at the forefront of software available 
to the recruitment industry. As with FileFinder 10, Infinity 
has been built using Microsoft .NET framework technology 
and replaces the Voyager Professional product. 
Voyager Software division
In July 2013, the Group acquired FCP Internet, suppliers of the 
Evolve SaaS product, and this has subsequently been folded 
into the Voyager division. Today, the Voyager products are 
used in over 20 different countries by many thousands of users 
in different-sized recruitment businesses. The Division has 
offices in the UK and Australia and employs around 40 people.
2006
In 2006, the Group floated on 
the AIM market of the London 
Stock Exchange (DSG.L).
2008
In 2008, a decision was 
taken to significantly increase 
R&D expenditure, and the 
development of the next 
generation of FileFinder began.
2011
In March 2011 FileFinder10 
was released after over 
two years of development.
In September 2011 the Group 
made its first acquisition: 
Voyager Software.
2012
In September 2012 Voyager 
Infinity was launched after 
three years of development.
2013
In July 2013 the Group 
made its second acquisition 
of FCP Internet.
2014
Today, the Dillistone Group is 
profitable, debt free and cash 
generative. It is proud to work 
with over 2,000 firms in over 60 
countries. It has offices in four 
countries across the Globe and 
employs nearly 100 people.
Global reach 
Dillistone Group has offices in 
the UK, US, Germany and 
Australia, serving over 2,000 
firms in over 60 countries 4
Dillistone Group Plc 
Annual Report and Accounts 2013
Dillistone Systems division
Products
FileFinder is designed specifically for the executive search 
market with FileFinder 10 being the latest generation of  
the product. 
FileFinder is an executive search database, CRM system, 
research tool, report writer and project management solution 
all rolled into one. It is designed to support every element of 
the search process.
The software is available on an outright purchase 
model with support, as a Software as a Service (SaaS) 
solution or a combination where the customer buys 
the product outright but is hosted by the Division.
Dillistone Group at a Glance continued
Voyager Software division
Products
Voyager is a leading provider of innovative recruitment 
software. Its focus is on service and delivering tangible 
benefits and its recruitment solutions offer rapid 
deployment and return on investment. The products span 
the entire recruitment landscape, from the front office 
to the back office and even to bureaus. By combining 
recruitment software products the Division has a strong 
track record of delivering vertical market solutions. 
FRONT OFFICE products: 
Voyager Infinity manages the timetables of 
recruiters working to fill permanent and longer-
term contract/temporary vacancies.
Voyager Commercial brings further unique tools that 
optimise a candidate’s entire association with a temporary  
or short-term contract placement agency.
Voyager VDQ! is designed for fast-paced blue and white 
collar temporary placement agencies that have to quickly 
assemble transient or ad-hoc teams to serve highly volatile 
and urgent labour requirements.
MIDDLE AND BACK OFFICE products:
Voyager Mid-Office, Voyager’s flexible Pay & Bill solution, 
automates the processing of large volumes of invoices and 
payments to numerous clients and candidates.
Voyager Bureau enables bureaus to subcontract back- 
office operations for multiple client recruitment companies  
on a single platform.
VIRTUAL VOYAGER:
With Virtual Voyager, all Voyager products can now  
be hosted and delivered to any customer PC with an  
Internet connection.
Through FCP Internet, the division also 
provides its evolve™ software
evolve™ has been designed to deliver an effective workflow 
solution for all sizes and types of recruitment business. It is 
delivered only as a SaaS product. 5
Dillistone Group Plc 
Annual Report and Accounts 2013
Strategic Report Governance Financial Statements
www.dillistonegroup.com
Chairman’s Statement
The acquisition of FCP Internet (FCP) 
in July 2013 has once again proven 
our ability to acquire and integrate 
businesses successfully. The FCP team is 
now settled into our wider Group, client 
retention has been good and the evolve™ 
SaaS product is continuing to perform 
well in the market. FCP contributed 
£472,000 to revenue and £55,000 
to profit before taxation in 2013.
It is the view of the Board that product 
development is fundamental to the 
long term success of the business and 
as a result 2014 will see us continue 
to invest in the development of 
software within both of our divisions.
Dividends
The Board was pleased to increase the 
interim dividend payment in September 
2013 to 1.25p (2012: 1.2p). The Board 
has recommended a final dividend of 
2.6p per share (2012: 2.5p), subject to 
shareholder approval, payable on 25 
June 2014 to holders on the register 
on 16 May 2014. Shares will trade 
ex-dividend from 14 May 2014. This 
takes the total dividend based on the 
2013 results to 3.85p, and gives a yield 
of 3.5% on a share price of 111p. 
This represents another year on 
year increase in the dividend, in 
line with our progressive dividend 
policy, which illustrates the Board’s 
confidence in the future prospects of 
the Group. The business is committed 
to maintaining its policy of investing 
in its products and services whilst 
rewarding its shareholders.
Staff
Our staff are fundamentally important 
to the success of the business. It is 
through their efforts, commitment 
and determination that we continue 
to be a leading technology provider 
in the sectors we serve. On behalf 
of the Board I would like to take this 
opportunity to thank all of them.
Outlook
The Board retains a confident outlook 
on prospects for the Group. 
At this stage, while first half revenues 
are expected to be ahead of the 
equivalent period for 2013, it is 
anticipated that first half pre-tax profit 
will be below that delivered in 2013. We 
announced in summer 2013 that we 
were strengthening our management 
team and this, along with the 
increased amortisation of our product 
development, are two of the key reasons 
behind the increase in expected costs. 
However, taking the year as a whole, 
the Group expects to make positive 
progress in 2014, the scale of which will 
become clearer as the year evolves. 
Within our Dillistone Systems division, 
we have sold more new systems in 
the first quarter of 2014 than we did 
in the same period of 2013, however, 
income from new systems sales in 2014 
is lagging that seen in 2013, in part 
due to an increase in the proportion 
of purchases delivered on the cloud 
subscription model, which has an 
impact on near term revenues. 
Our Voyager division delivers products 
into a range of recruiting markets. 
Performance has varied across 
these, with a number of products 
delivering a strong performance. 
With a strong profile of recurrent 
revenues, the Group continues 
to generate cash allowing us to 
continue to invest in improving 
our products and services whilst 
maintaining our dividend policy.
Both the Dillistone Systems and 
Voyager Software divisions anticipate 
making significant product related 
announcements later in the year.
Dr Mike Love
Non-Executive Chairman
28 April 2014
The Group has again enjoyed another 
successful year in 2013, delivering its best 
ever performance in terms of both revenue 
and operating profit. Revenue was up 15 % 
to £8.1m and adjusted operating profits up 
7% to £1.8m. We have two divisions – 
Dillistone Systems and Voyager Software 
– and both delivered top line and bottom  
line growth. 6
Dillistone Group Plc 
Annual Report and Accounts 2013
Dillistone Group Plc is a global leader in 
the supply of technology solutions and 
services to the recruitment industry 
worldwide.
Strategy and objectives
The Group’s strategy is to grow the 
business both organically and through 
acquisition. This strategy is made 
possible by our commitment to product 
development, which ensures that the 
business continues to command a 
leading role in all of the markets in 
which it operates.
Our acquisition strategy typically 
entails consideration of firms offering:
• products that would further increase 
market share in the Group’s core 
markets;
• legacy applications where clients 
could be transferred to our modern 
suite of products; or
• complementary applications which 
may be cross sold to clients of the 
Group.
The Group’s objectives are principally to:
• ensure our products meet the needs 
of the recruitment sector through 
continual investment and 
development of our products;
• be a leading player in all of the 
markets we serve;
• develop our staff; and
• increase our profitability and deliver 
increased shareholder value year on 
year and to follow a progressive 
dividend policy. 
Our business model
The business is split into two divisions, 
Dillistone Systems and Voyager 
Software. Dillistone Systems specialises 
in the supply of software and services 
into executive-level recruitment 
teams. Voyager Software’s clientele 
are primarily involved in contingent 
recruitment, including permanent 
placement, contract placement and the 
provision of temporary staff. Across our 
subsidiaries, we work with around 2,000 
firms in approximately 60 countries. 
Further details of the products we supply 
are given in the ‘At a Glance’ section.
The majority of our products are 
delivered through one or more of the 
following:
1. an upfront licence fee plus a recurring 
support fee;
2. software as a Service (SaaS) 
subscription basis; or
3. a hybrid model incorporating an 
upfront payment and recurring 
support and hosting fees.
The business has offices in four 
countries, the UK, Germany (through 
a branch), the US and Australia. 
This enables the Group to support 
its customers on an approaching 
24/5 basis. As well as supplying and 
supporting our software we also 
host the software for a proportion 
of our clients. This is done through 
data centres in Europe, the US, 
Singapore and Australia.
Review of the business
2013 saw recurring revenues grow 
16% to £5.271m (2012: £4.529m) 
reflecting the acquisition of FCP 
Internet, whose revenues (£472,000) 
are included in the Group results for 
the first time and are mainly recurring 
in nature. Recurring revenues represent 
65% of Group revenues (2012: 64%). 
Overheads have increased across 
the business in part as a result of our 
decision to strengthen management 
depth in anticipation of future growth 
but, despite this, pre-tax profits before 
acquisition related items increased 
7% to £1.801m (2012: £1.684m).
Dillistone Systems
The Dillistone Systems division 
is primarily focused on providing 
technology solutions to the executive 
search market. This client group 
is made up of both executive 
search firms and executive search 
teams in major organisations.
In my 2013 report, I noted that, in 
2012, according to statistics from the 
Trade association the Association of 
Executive Search Consultants (AESC), 
the retained search market had shrunk 
but that Dillistone Systems had grown 
its install base despite that trend. I 
am able to report a very similar story 
in 2013, with the AESC reporting that 
the total number of mandates taken 
on by search firms in 2013 fell by 8.5%. 
Despite this, Dillistone Systems was 
again able to sign up a new client 
roughly every other working day.
CEO’s Review 7
Dillistone Group Plc 
Annual Report and Accounts 2013
Strategic Report Governance Financial Statements
www.dillistonegroup.com
In addition, we successfully sold 
our FileFinder product into a variety 
of different corporate sectors. 
These included retail, technology, 
private equity, management 
consulting, energy, banking, 
publishing and the public sector.
The division continued to invest in 
enhancing our products and services. 
For a number of years, Dillistone 
Systems has offered cloud hosting 
facilities in the UK and Australia, and 
facilities in the US and Asia have been 
added since the publication of our  
last report.
Our development team has continued 
to develop the FileFinder product, 
and has delivered performance and 
functionality improvements since 
launch. The division expects to 
make an important product related 
announcement later this year.
Dillistone Systems’ head office is in 
London and it has offices in the US, 
Germany and Australia. The division 
accounts for 61 % (2012: 66%) of the 
Group’s revenue and saw recurring 
revenue grow 3% to £3.248m (2012: 
£3.144m). As a whole, the division saw 
segmental operating profit before 
amortisation and depreciation increase 
by 5% to £2.013m (2012: £1.912m). 
Revenue
2013
£’000
2012
£’000
Recurring income 3,248 3,144
Non-recurring income 1,675 1,522
4,923 4,666
Voyager Software
Voyager Software performed well 
in 2013. The division successfully 
delivered its largest ever contract and 
has seen its ‘Infinity’ product gain 
good momentum in the market.
The Infinity product was a major 
development for the business and, 
since launch, work has continued 
to optimise it for larger firms 
and certain delivery models.
July 2013 saw us acquire FCP Internet, 
a UK focused SaaS business targeting 
the recruitment industry via its product, 
evolve™. The integration of the business 
has been successfully completed, with 
the majority of staff transferring to 
existing Group offices in Basingstoke 
and London. Client retention has been 
strong, and the evolve™ platform today 
supports more users than ever before.
In 2013, the Voyager Software 
division accounted for 40% of Group 
revenues. The division’s revenues were 
£3.202m and it had a segmental 
operating profit before amortisation 
and depreciation of £0.598m.
Revenue
2013
£’000
2012
£’000
Recurring income 2,023 1,385
Non-recurring income 777 618
Third party revenues 402 383
3,202 2,386
Although both divisions are run 
separately, synergies continue to 
be delivered. Both divisions are 
committed to continuing to invest in 
their products to ensure they retain 
their market leading positions.
Financial risk management
The Group’s operations expose it to 
a number of risks that include the 
effect of changes in interest rates, 
credit, foreign currency exchange 
rates and liquidity. The Group does 
not trade in financial instruments. 
Further details in relation to these 
risks are shown in note 23.
Interest rate risk
The Group currently finances its 
activities through retained cash and 
equity finance. The Group monitors 
its exposure to interest rate risk 
when investing its cash resources.
Credit risk
The Group has a large customer 
base in excess of 2,000 customers 
and is not dependent on a small 
number of customers. Accordingly, 
the Group does not believe it is 
exposed to significant credit risk. In 
addition, it only places money with 
banks with strong credit ratings.
Key Performance Indicators (KPIs)
The Board and management use absolute figures to monitor the performance of the business in the following financial KPIs:
FY 2013 
£’000
FY 2012 
£’000 Measure
Total revenue 8,101 7,052 year on year growth
Recurring revenues 5,271 4,529 year on year growth
Non-recurring revenues 2,428 2,140 year on year growth
Adjusted profit before tax 1,801 1,684 year on year growth
Cash 1,399 1,643 sufficient cash resources maintained
In addition, the Board monitors order levels and employee numbers as well as performance against budget. 8
Dillistone Group Plc 
Annual Report and Accounts 2013
CEO’s Review continued
Exchange risk
The Group is exposed to translation and transaction foreign exchange risk. The Group’s foreign operations primarily trade in their 
own currencies reducing the transaction risk. As a result the main foreign exchange transactional exposure arises when 
repatriating profits. The Group only seeks to remit cash when required in the UK and it usually has some flexibility on timing of 
such appropriations to minimise any exchange losses. 
To a degree, the Group relies on a partial natural hedge of Euro, Australian Dollar and US Dollar to cover the translation exposures.
Liquidity risk
The Group maintains positive cash resources and has sufficient available funds for its operations and planned expansion of its 
existing activities.
Principal risks and uncertainties
There are a number of risks and uncertainties which could have an impact on the Group’s long term performance and cause 
actual results to differ materially from expected and historical results. The Directors seek to identify material risks and put in 
place policies and procedures to mitigate any exposure. The table of risks that follows gives details of the principal risks and the 
approach being taken to manage them.
Risk Potential adverse impact Mitigation
Economic risk to our 
core markets
The recruitment industry has a reputation for being 
vulnerable to the cyclical nature of the economy. 
This can impact significantly on non-recurring 
revenue and to a lesser extent recurring revenue.
The Group operates globally and so is not reliant  
on one economy. It enjoys a high percentage of 
recurring revenues. The acquisition of Voyager  
and FCP have increased the exposure to the UK 
economy. Future acquisitions may be overseas.
In a downturn there may be a reduction in new 
permanent hires which may be replaced by 
temporary hires. This could impact our traditional 
executive search market. The Group’s suite of 
products now supports more aspects of the third 
party recruitment market through its acquisition  
of Voyager (in 2011) and FCP . The temporary 
recruitment market is potentially anti-cyclical. 
New product risk The introduction of new products might  
contain significant bugs that make them unusable. 
This could damage the Group’s reputation and 
result in loss of new orders and therefore reduce 
revenue growth. It could also result in claims 
against the Group.
Products are tested pre-launch and launch 
strategies are developed to minimise risks.
These risks are being actively monitored for  
all products.
Attrition of 
customer base
Failure to attract new customers, or the loss of 
existing customers may have a detrimental effect 
on the Group’s ability to generate revenues.
Actively manage existing customer relationships 
and endeavour to promptly deal with issues.
Competitor activity The market for recruitment software is  
extremely fragmented with a large number of 
small suppliers operating in all of the Group’s 
geographical markets. Very few of these suppliers 
have the necessary financial, technical and 
marketing resources to be able to develop their 
competitive position. However, the competition 
may intensify through consolidation or new 
entrants to the market.
Management works to build strong customer 
relationships and uses account management to 
keep in touch with clients.
The Group continues to invest in its product 
development. The Group continues to innovate 
and provide solutions to client needs. 9
Dillistone Group Plc 
Annual Report and Accounts 2013
Strategic Report Governance Financial Statements
www.dillistonegroup.com
Risk Potential adverse impact Mitigation
Business continuity 
risks associated with 
information 
systems’ 
operational failure 
and data security
A failure of systems or failure of hosting facilities 
leading to loss of customer confidence in the Group 
being able to deliver their requirements.
Loss or corruption of data held on behalf of 
customers which could have a detrimental effect 
on their confidence in data security processes and 
could cause financial loss.
External attacks on servers could result in lost or 
corrupted data and loss of reputation.
Each division is reliant on data centres. Work is 
ongoing to improve disaster recovery plans. 
Data backups occur daily and the necessary tests 
carried out on a regular basis to ensure data can be 
restored.
Penetration testing will help ensure systems are 
safe from attack.
Employee 
engagement and 
retention
Capability to meet the demands of the markets in 
which the Group operates and competes 
effectively with other IT suppliers is largely 
dependent on the skills, experience and 
performance of staff.
Failure to attract or retain high calibre employees 
could seriously impede future growth and present 
performance.
To retain staff the Group operates competitive 
remuneration packages and an appropriate culture 
in which staff work.
Acquisition risk The Group has made two acquisitions since 2011 
and is likely to make further acquisitions in the 
future. This creates the potential risk that 
acquisitions may not perform or may contain 
hidden risks or liabilities.
For all acquisitions and in advance of completion, 
management undertakes due diligence and 
prepare integration plans including risk 
identification. These papers are reviewed and 
approved by the Board prior to any commitment 
being entered into.
Ability to finance 
acquisitions and 
expansion
The Group wants to grow by acquisition and this 
requires that it will have the ability to fund such 
expansion either via borrowing or placement, or 
through the availability of its own cash resources.
New bankers appointed in 2013 for the Group and 
good dialogue maintained.
Changes to EIS relief likely to be beneficial in raising 
new finance through share issues.
Investor relations programme in place.
Management 
capacity
As the business grows there may be insufficient 
support to ensure that the growth is effectively 
managed and integrated.
Investment in additional management in 2013 and 
the divisional boards and the Group Board continue 
to review the need for additional resources.
On behalf of the Board
Jason Starr
Chief Executive
28 April 2014 10
Dillistone Group Plc 
Annual Report and Accounts 2013
Total Revenue £’000
11
10
09
12
13
5,448
4,251
3,655
7,052
8,101
Recurring Revenues £’000
11
10
09
12
13
3,248
2,536
2,344
4,529
5,271
Adjusted EBITDA £’000
11
10
09
12
13
1,633
1,358
1,234
1,998
2,242
Adjusted Proﬁt Before Tax £’000
11
10
09
12
13
1,405
1,182
1,080
1,684
1,801
Adjusted basic EPS pence
11
10
09
12
13
6.26
5.13
5.01
7.20
7.99
Total revenues increased by 15 % to £8.101m 
(2012: £7 .052m), with profit before tax and 
acquisition related items up 7% to £1.801m 
(2012: £1.684m). Recurring revenues increased 
by 16 % to £5.271m (2012: £4.529m). 
Non-recurring revenues saw an increase 
of 13% to £2.428m from £2.140m in 
2012. Third party software product 
sales amounted to £0.402m in the 
period (2012: £0.383m). These results 
include FCP revenues from July 2013.
Cost of sales increased by 11 % to 
£0.957m (2012: £0.864m), reflecting 
the impact of FCP from 8 July 2013.
Administrative costs, excluding 
acquisition related items, depreciation 
and amortisation, rose 15% to  
£4.901m (2012: £4.246m), reflecting 
a part year of FCP and increased 
investment in management. 
Depreciation and amortisation 
increased to £0.449m (2012: £0.327m). 
Acquisition related administrative costs 
totalled £0.210m (2012: £0.102m) 
and relate to acquisition costs and 
amortisation of intangibles arising 
on the Voyager and FCP acquisitions 
offset by a reduction in the estimated 
contingent consideration payable 
re Voyager of £0.058m. Interest 
income has also been offset by the 
unwinding of the discount in respect 
of the deferred consideration.
Recurring revenues covered 98% 
of administrative expenses before 
acquisition related costs (2012: 
99%). Excluding depreciation and 
amortisation of our own internal 
development, the administrative 
costs are more than covered 
at 108% (2012: 107%).
Tax has been provided at an effective 
rate of 19% (2012: 22%) excluding 
acquisition related items and at 19% 
(2012: 18%) post acquisition related 
costs. These rates reflect the R&D tax 
credits available to both Dillistone 
Systems and Voyager Software that 
have been claimed, partially offset 
by the higher rates of corporation 
tax that are payable overseas. The 
post acquisition related items rate 
also reflects the reduction in deferred 
consideration and the write off of 
acquisition costs together with the 
reduction in deferred tax rate used 
in the accounts from 23% to 21 %.
Profits for the year before acquisition 
related items rose 11 % to £1.455m 
(2012: £1.311m) and profits for the 
year after acquisition related items 
decreased marginally to £1.231m (2012: 
£1.235m). Basic earnings per share 
(EPS) rose 11 % to 7 .99p (2012: 7 .20p) 
before acquisition related items and 
decreased by 0.5% to 6.76p (2012: 
6.79p) after such items. Fully diluted 
EPS rose 7% to 7 .70p (2012: 7 .18p) 
and decreased 4% to 6.51p (2012: 
6.76p) after acquisition related items.
Financial Review 11
Dillistone Group Plc 
Annual Report and Accounts 2013
Strategic Report Governance Financial Statements
www.dillistonegroup.com
 
 
 
 
Divisional revenue analysis
2013
 61 % Dillistone Systems division
 39% Voyager Software division
 
 
 
 
 65% Recurring
 30% Non-recurring
 5% Third party
Revenue analysis
2013
Capital expenditure
The Group invested £0.830m in 
property, plant and equipment and 
product development during the year 
(2012: £0.872m). This expenditure 
included £0.747m (2012: £0.803m) 
spent on development costs, of which 
£0.250m relates to development in 
Voyager Software (2012: £0.403m), 
that has been capitalised under 
IFRS in the Group accounts.
Trade and other payables
As with previous years, the trade and 
other payables include income which 
has been billed in advance but is not 
recognised as income at that time. 
This principally relates to support, 
SaaS and hosting renewals which 
are billed in December 2013 but 
that are in respect of services to be 
delivered in 2014. Contractual income 
of this type is recognised monthly 
over the period to which it relates. It 
also includes deposits taken for work 
which has not yet been completed, as 
such income is only recognised when 
the work is substantially complete or 
the client software goes ‘live’. Also 
included in trade and other payables 
is £0.918m (2012: £0.360m) relating 
to consideration and contingent 
consideration due to former Voyager 
and FCP shareholders. The contingent 
consideration in respect of Voyager 
Software is dependent on the level of 
revenue achieved by the division in 
the periods up to 31 December 2013. 
There are four tranches of deferred 
contingent consideration in respect 
of FCP and they are dependent 
on levels of revenue achieved in 
periods up until 31 March 2015.
Cash
Dillistone finished the year with cash 
funds of £1.399m (2012: £1.643m) and 
remains debt free. This is after capital 
expenditure of £0.830m, the payment 
to the vendors of Voyager and FCP of 
£0.900m (net of cash received with FCP) 
and dividend payments of £0.683m.
On behalf of the Board
Julie Pomeroy
Finance Director 
28 April 2014 12
Dillistone Group Plc 
Annual Report and Accounts 2013
Corporate Governance Report
Corporate governance
The Board supports the principles of good governance. 
In fulfilling their responsibilities, the Directors believe 
that they govern the Group in the best interests of 
the shareholders, whilst having due regard to the 
interests of other stakeholders in the Group including, 
in particular, customers, employees and suppliers.
The workings of the Board and its committees
The Board
The Board comprises a Non-Executive Chairman, one 
Independent Non-Executive Director and five Executive 
Directors. All Directors are obliged to submit themselves 
for re-election at least every three years. The Chairman 
and Non-Executive Director are considered to be 
independent of management and free from any business 
or other relationship which could materially interfere 
with the exercise of their independent judgement. Giles 
Fearnley is the current Senior Independent Director and 
his shareholding of approximately 2.5% is not considered 
by the Board to change his independence. To enable the 
Board to discharge its duties, all Directors have full and 
timely access to all relevant information. They are also able 
to take independent professional advice as appropriate.
The Board meets at least four times each year and has 
adopted a formal schedule of matters specifically reserved 
for decision by it, thus ensuring that it exercises control 
over appropriate strategic, financial, operational and 
compliance issues. At these meetings the Board reviews 
trading performance, ensures adequate financing, sets and 
monitors strategy, examines investment and acquisition 
opportunities and discusses reports to shareholders. 
The following committees have been established to 
deal with specific aspects of the Group’s affairs.
Audit Committee
In 2013 the Audit Committee comprised the Chairman and 
the Non-Executive Director and met twice during the year.
The Finance Director, Group Chief Executive Officer (CEO) and 
external auditors attend by invitation. The Audit Committee 
makes recommendations to the Board on issues surrounding 
the appointment, resignation or removal of auditors and 
their remuneration. It discusses and agrees the scope of 
the audit with the external auditors before the audit.
The Audit Committee reviews external audit activities, 
monitors compliance with statutory requirements for financial 
reporting and reviews the half-year and annual accounts 
before they are presented to the Board for approval. It is 
also required to review the effectiveness of the Group’s 
internal control systems, to review the Group’s statement 
on internal control systems prior to endorsement by the 
Board and to consider, from time to time, the need for a 
risk assessment of the Group’s internal control systems.
Remuneration Committee
In 2013 the Remuneration Committee comprised the 
Chairman, the Non-Executive Director and, by invitation, 
the Group CEO and the Company Secretary. It is responsible 
for recommending to the Board the contract terms, 
remuneration and other benefits for Executive Directors, 
including the performance-related bonus scheme and 
participation in the Group’s long term share option schemes.
Internal controls
The Board has overall responsibility for the Group’s system 
of internal controls. However, such a system is designed to 
manage rather than eliminate the risk of failure to achieve 
business objectives, and can only provide reasonable and 
not absolute assurance against material misstatement. In 
order to discharge that responsibility in a manner which 
ensures compliance with laws and regulations and promotes 
effective and efficient operations, the Directors have 
established an organisation structure with clear operating 
procedures, lines of responsibility and delegated authority. 
There is an established framework of internal controls set 
out and approved by the executive management. The more 
important elements of this framework are as follows:
Management structure
The Board has overall responsibility for the Group and 
each Executive Director has been given responsibility 
for specific aspects of the Group’s affairs.
Corporate accounting and procedures
Responsibility levels are communicated throughout the 
Group as part of the corporate communication procedure. 
Accounting, delegation of authority and authorisation 
levels, segregation of duties and other control procedures, 
together with the general ethos of the Group are 
included in these communications, and standardised 
accounting policies are in place reflecting this policy.
Quality and integrity of personnel
The integrity and competence of personnel is ensured 
through high recruitment standards and subsequent training 
courses. Quality personnel are seen as an essential part of 
the control environment and the ethical standards expected 
are communicated through senior members of staff.
Budgetary process
Each year the Board approves the annual budget, which 
includes an assessment of key assumptions underlying 
it. Performance is monitored and relevant action taken 
throughout the year by monthly reporting to the Board of 
updated forecasts together with information on key risk areas. 13
Dillistone Group Plc 
Annual Report and Accounts 2013
Strategic Report Governance Financial Statements
www.dillistonegroup.com
Internal monitoring
The Audit Committee considers and determines relevant 
action in respect of any control issues raised by the 
auditors. Given the size of the Group and the close day-
to-day control exercised by the Executive Directors and 
senior management, no formal financial internal audit 
department is considered necessary. The Operations 
Director is responsible for maintaining registrations and 
quality related certifications and defining and agreeing 
the procedures, standards and practices to be followed 
in all non-financial aspects of the Group’s business.
The Directors have reviewed the effectiveness of the system 
of internal controls in operation during the year through 
the compliance monitoring process set out above and by 
reports from senior managers concerning the operations 
for which they are responsible. It must be recognised 
that such a system can provide only reasonable and not 
absolute assurance and, in that context, the review revealed 
nothing, which in the opinion of the Directors, indicates 
that the system was inappropriate or unsatisfactory.
Relations with shareholders
The Group seeks to maintain good communications with 
shareholders. The Executive Directors make presentations 
to institutional shareholders covering the interim and 
full year results. The Group despatches the notice of 
Annual General Meetings (AGM), with an explanatory 
circular describing items of special business, at least 21 
working days before the meeting. All shareholders have 
the opportunity formally or informally to ask questions at 
the Company’s AGM and the Chairman typically makes a 
statement on current trading conditions at that meeting. 
The Chairman of the Audit and Remuneration Committees 
attends the AGM and will answer questions that may be 
relevant to the remit of those committees. At each AGM 
the Chairman advises shareholders of the proxy voting 
details on each of the resolutions, which are dealt with 
on a show of hands. In addition, webinars have been 
introduced following announcements, giving shareholders 
and other interested parties more access to the Company.
Auditors
A resolution authorising the Directors to set the  
remuneration of the Auditor will be put to shareholders  
at the forthcoming AGM. 14
Dillistone Group Plc 
Annual Report and Accounts 2013
Remuneration report
Remuneration policy
The objective of the Group’s remuneration policy is to attract, motivate, and retain high quality individuals who will contribute 
significantly to shareholder value. The Remuneration Committee decides on the remuneration of the Directors and other senior 
management, which comprises a basic salary, benefits, bonus scheme, share options and longer term incentive plan.
Service contracts
The Board’s policy is that service contracts of Executive Directors should provide for termination by the Group on one year’s 
notice. The service contracts of each of the current Executive Directors provide for such a period of notice.
The Independent Non-Executive Directors have letters of appointment providing fixed three-year service periods, which may be 
terminated by giving six months’ notice.
Non-Executive Directors’ remuneration
The fees for the Chairman and independent Non-Executive Director are determined by the Board. The Chairman and the 
Non-Executive Director are not involved in any discussions or decisions about their own remuneration.
The Chairman and independent Non-Executive Director do not receive bonuses or pension contributions and are not entitled to 
participate in any of the Group’s share schemes. They are entitled to be reimbursed the reasonable expenses incurred by them in 
carrying out their duties as Directors of the Company.
Executive Directors’ remuneration
The remuneration package of the Executive Directors includes the following elements:
Basic salary
Salaries are normally reviewed annually taking into account inflation and salaries paid to directors of comparable companies. 
Pay reviews also take into account Group and personal performance. The Board as a whole decides the remuneration of the 
Chairman and the Non-Executive Director.
Performance related pay scheme
There are two performance related pay schemes for Executive Directors. The first is an annual bonus scheme which is based 
upon the achievement of certain profit and commercial targets for the Group, as appropriate. A bonus of £66,000 was payable 
to the Executive Directors in respect of 2013 (2012: £81,000).
The second scheme was introduced in 2011 and is a long term incentive plan linked to growth in earnings per share over a  
three year period. Executive Directors have been granted phantom share options at the ruling mid-market price at the time  
of the grant. The awards are subject to meeting challenging EPS growth targets and will be cash settled. The remuneration 
committee can also choose, when making the award, to grant share options in place of phantom options with the same growth 
targets. In 2013 an alternative pure cash bonus fixed as a percentage of salary was introduced with similar EPS growth targets.  
It is expected that annual awards will be made under the scheme. Where phantom options are awarded, the value of the  
award is calculated at each reporting period using a Black Scholes model (see note 21 for further details). One of the phantom 
option schemes was replaced by a cash bonus scheme which fixes the maximum payout. The awards made in the period are 
included below:
Directors’ remuneration (audited)
Details of the remuneration of the Directors for the financial year are set out below:
Salary  
and fees
£’000
Bonus
£’000
Pension 
payments*
£’000
Benefits
£’000
2013  
Total
£’000
2012  
Total 
£’000
Executive Directors
J S Starr 104 18 13 1 136 139
R Howard 62 10 – 4 76 101
A D James 81 13 4 4 102 100
J P Pomeroy 81 13 7 1 102 101
A Milne 71 12 – 4 87 87
Non-Executive Directors
M D Love 33 – – – 33 33
G R Fearnley 12 – – – 12 12
444 66 24 14 548 573
*  Includes cash payments in lieu of employer contributions and payments where salary sacrifice has been enabled.
Report to the Shareholders on Directors’ Remuneration 15
Dillistone Group Plc 
Annual Report and Accounts 2013
Strategic Report Governance Financial Statements
www.dillistonegroup.com
LTIP award (not audited) – phantom options
Number of 
phantom 
options 
granted in 
year
Total value of 
all phantom 
option LTIP 
awards at  
31 December 
2013 
£’000
Total value of 
all phantom 
option LTIP 
awards at  
31 December 
2012 
£’000
J S Starr – 29 34
R Howard – 26 31
A D James – – 18
J P Pomeroy – – 16
A Milne – 17 20
– 72 119
LTIP award (not audited) – % of salary arrangement
Maximum 
payout 
awarded in 
period
Total 
maximum 
value of  
all salary 
based LTIP 
awards at  
31 December 
2013 
£’000
Total 
maximum 
value of all 
salary based 
LTIP awards at  
31 December 
2012 
£’000
J S Starr 37 72 –
R Howard 21 55 –
A D James 28 55 –
J P Pomeroy 28 51 –
A Milne 25 48 –
139 281 –
LTIP award (not audited) – share options
Number  
of options 
granted  
under LTIP 
scheme  
in year
Total number 
of options 
granted 
under LTIP 
scheme at  
31 December 
2013
Total number 
of options 
granted  
under LTIP 
scheme at  
31 December 
2012
A D James – 109,589 109,589
J P Pomeroy – 111,233 111,233
– 220,822 220,822
These options were granted at 73p and carry the same 
performance conditions as the LTIP phantom option awards.
Directors’ interests
The interests of the Directors (including family interests) in the 
share capital of the Company at the year end are set out 
below.
Ordinary shares of 5 pence each
At  
31 December 
2013
At  
31 December 
2012
J S Starr 3,554,443 3,554,443
R Howard 3,300,000 3,524,433
A D James 101,494 121,494
M D Love 450,622 272,137
G R Fearnley 453,435 993,435
A Milne 59,109 59,109
J P Pomeroy 13,888 13,888
In addition the following Directors had total share options 
including the options granted under the LTIP scheme above.
Options over ordinary shares of  
5 pence each
At  
31 December 
2013
At  
31 December 
2012
A D James 109,589 109,589
J P Pomeroy 137,027 137,027
246,616 246,616 16
Dillistone Group Plc 
Annual Report and Accounts 2013
Mike Love, aged 65
Non-Executive Chairman
Jason Starr, aged 42
Chief Executive
Rory Howard, aged 46
Operations Director
Alex James, aged 41
Product Development 
Director
Alistair Milne, aged 38
Director of  
Support Services
Julie Pomeroy, aged 58
Finance Director
Giles Fearnley, aged 59
Non-Executive Director
Mike Love has a PhD in 
theoretical physics and 
over 30 years’ experience 
in the software industry. He 
is currently non-executive 
chairman of SciSys plc, also 
an AIM quoted company, 
and director and chairman 
at Redcliffe Precision Ltd. 
He was group managing 
director of SciSys from 
1986 to 2003 during which 
time he led a management 
buy-out of the business and 
floated it on AIM in 1997 . He 
is a previous member of the 
AIM Advisory Group of the 
London Stock Exchange.
Jason Starr joined Dillistone 
Systems in 1994. He became 
Marketing Manager in 1996 
before becoming Managing 
Director of the UK business 
in 1998. Following the MBO, 
Jason became Managing 
Director of Dillistone Systems 
Ltd and subsequently 
became Group Chief 
Executive Officer. Jason is 
well known in the industry 
and has spoken at events in 
Asia, the US and Europe.
Jason has a BA (Honours) 
business studies degree 
from the London 
Guildhall University.
Jason is the Group Chief 
Executive of Dillistone Group 
Plc and Managing Director 
of Dillistone Systems. As well 
as being Managing Director 
he also has responsibility 
for the sales and marketing 
departments of the Division.
Rory Howard has a BA 
(Honours) in business 
administration and is a 
PRINCE2 practitioner. Rory 
started his career with the 
Dixons Stores Group and 
from 1991 to 1994 he 
worked in the systems and 
control department as a 
technical support analyst 
working on their EPOS 
systems, data reporting and 
security. He then joined JATO 
Dynamics Ltd, a software 
company specialising in the 
automotive research market, 
as a database analyst, 
developing databases for 
pricing models for the large 
automotive manufacturers. 
In 1998 he joined Dillistone 
Systems Limited as a 
project manager, and the 
following year became the 
Global Projects Manager, 
tasked with restructuring all 
implementations and data 
migrations procedures and 
operations. In 2003 Rory 
became Operations Director 
of Dillistone Systems Limited 
and a member of the Board.
Alex graduated from 
Swansea University in 
1995 with a degree in 
psychology. In 1995 
Alex joined Mallinckrodt 
Veterinary, working in 
quality control. In 1997 he 
moved to Responseability, 
a company that manages 
aspects of the recruitment 
process for clients, starting 
in administration before 
progressing into an account 
management role. Alex 
started at Dillistone in 1999 
in a training/consultancy 
position prior to becoming 
the UK and then Global 
Projects Manager, being 
ultimately responsible for 
the implementation of all 
products and services to both 
new and existing clients. 
Alex joined the Board of 
Dillistone Systems Limited in 
January 2005 and the Group 
Board in February 2006.
Alex is the Product 
Development Director 
for Dillistone Systems; 
departments under his 
responsibility are software 
development and 
technical integration.
Alistair started his career 
at Richmond Theatre in 
1994, working in both the 
marketing department 
and box office. In 1997 
he joined The Football 
Association, initially in a 
ticketing administration 
role, before progressing to 
a management role. Alistair 
then began working at 
the Shaw Theatre as Box 
Office Manager. He joined 
Dillistone Systems in 2003. 
He was initially appointed 
to the UK and then Global 
Support Manager role with 
responsibility for all aspects 
of support services. He was 
promoted to the Dillistone 
Systems Limited Board in 
2006 and joined the Group 
Board in January 2011.
Alistair is the Director of 
Support Services; he oversees 
all Dillistone IT infrastructure 
and support services globally.
Julie is an experienced 
finance director of quoted 
and private companies. She 
graduated with an honours 
degree in Physics from 
Birmingham University and 
is a Chartered Accountant 
and Chartered Director. She 
also holds tax and treasury 
qualifications. Julie was 
group finance director of 
Carter & Carter Group plc 
until October 2005 having 
joined in 2002 to help grow 
and float the business. She 
had previously been chief 
financial officer of Weston 
Medical Group plc and 
prior to this Julie worked at 
East Midlands Electricity 
plc as director of corporate 
finance. She was finance 
director of AIM quoted 
Biofutures International plc 
until July 2010. Julie is also 
a non-executive director 
of Nottingham University 
Hospitals NHS Trust.
A career in the passenger 
transport industry saw 
Giles lead an MBO in 1991, 
forming Blazefield Holdings 
Limited, a business operating 
bus networks principally 
across Yorkshire and 
Lancashire. This company 
was sold to Transdev in 2006.
In 1997 he was appointed 
chief executive of Prism Rail 
PLC, having been one of 
that company’s founders, 
and held that position until 
its sale to National Express 
in 2000. Prism Rail operated 
four of the UK’s passenger 
rail franchises with a turnover 
of £500 million per annum.
Giles is currently managing 
director – Bus, UK and 
Ireland for First Group Plc. 
Giles served as chairman 
of the Association of Train 
Operating Companies in 
1999/2000 and as chairman 
of The Confederation of 
Passenger Transport UK. 
Board of Directors 17
Dillistone Group Plc 
Annual Report and Accounts 2013
Strategic Report Governance Financial Statements
www.dillistonegroup.com
Mike Love, aged 65
Non-Executive Chairman
Jason Starr, aged 42
Chief Executive
Rory Howard, aged 46
Operations Director
Alex James, aged 41
Product Development 
Director
Alistair Milne, aged 38
Director of  
Support Services
Julie Pomeroy, aged 58
Finance Director
Giles Fearnley, aged 59
Non-Executive Director
Mike Love has a PhD in 
theoretical physics and 
over 30 years’ experience 
in the software industry. He 
is currently non-executive 
chairman of SciSys plc, also 
an AIM quoted company, 
and director and chairman 
at Redcliffe Precision Ltd. 
He was group managing 
director of SciSys from 
1986 to 2003 during which 
time he led a management 
buy-out of the business and 
floated it on AIM in 1997 . He 
is a previous member of the 
AIM Advisory Group of the 
London Stock Exchange.
Jason Starr joined Dillistone 
Systems in 1994. He became 
Marketing Manager in 1996 
before becoming Managing 
Director of the UK business 
in 1998. Following the MBO, 
Jason became Managing 
Director of Dillistone Systems 
Ltd and subsequently 
became Group Chief 
Executive Officer. Jason is 
well known in the industry 
and has spoken at events in 
Asia, the US and Europe.
Jason has a BA (Honours) 
business studies degree 
from the London 
Guildhall University.
Jason is the Group Chief 
Executive of Dillistone Group 
Plc and Managing Director 
of Dillistone Systems. As well 
as being Managing Director 
he also has responsibility 
for the sales and marketing 
departments of the Division.
Rory Howard has a BA 
(Honours) in business 
administration and is a 
PRINCE2 practitioner. Rory 
started his career with the 
Dixons Stores Group and 
from 1991 to 1994 he 
worked in the systems and 
control department as a 
technical support analyst 
working on their EPOS 
systems, data reporting and 
security. He then joined JATO 
Dynamics Ltd, a software 
company specialising in the 
automotive research market, 
as a database analyst, 
developing databases for 
pricing models for the large 
automotive manufacturers. 
In 1998 he joined Dillistone 
Systems Limited as a 
project manager, and the 
following year became the 
Global Projects Manager, 
tasked with restructuring all 
implementations and data 
migrations procedures and 
operations. In 2003 Rory 
became Operations Director 
of Dillistone Systems Limited 
and a member of the Board.
Alex graduated from 
Swansea University in 
1995 with a degree in 
psychology. In 1995 
Alex joined Mallinckrodt 
Veterinary, working in 
quality control. In 1997 he 
moved to Responseability, 
a company that manages 
aspects of the recruitment 
process for clients, starting 
in administration before 
progressing into an account 
management role. Alex 
started at Dillistone in 1999 
in a training/consultancy 
position prior to becoming 
the UK and then Global 
Projects Manager, being 
ultimately responsible for 
the implementation of all 
products and services to both 
new and existing clients. 
Alex joined the Board of 
Dillistone Systems Limited in 
January 2005 and the Group 
Board in February 2006.
Alex is the Product 
Development Director 
for Dillistone Systems; 
departments under his 
responsibility are software 
development and 
technical integration.
Alistair started his career 
at Richmond Theatre in 
1994, working in both the 
marketing department 
and box office. In 1997 
he joined The Football 
Association, initially in a 
ticketing administration 
role, before progressing to 
a management role. Alistair 
then began working at 
the Shaw Theatre as Box 
Office Manager. He joined 
Dillistone Systems in 2003. 
He was initially appointed 
to the UK and then Global 
Support Manager role with 
responsibility for all aspects 
of support services. He was 
promoted to the Dillistone 
Systems Limited Board in 
2006 and joined the Group 
Board in January 2011.
Alistair is the Director of 
Support Services; he oversees 
all Dillistone IT infrastructure 
and support services globally.
Julie is an experienced 
finance director of quoted 
and private companies. She 
graduated with an honours 
degree in Physics from 
Birmingham University and 
is a Chartered Accountant 
and Chartered Director. She 
also holds tax and treasury 
qualifications. Julie was 
group finance director of 
Carter & Carter Group plc 
until October 2005 having 
joined in 2002 to help grow 
and float the business. She 
had previously been chief 
financial officer of Weston 
Medical Group plc and 
prior to this Julie worked at 
East Midlands Electricity 
plc as director of corporate 
finance. She was finance 
director of AIM quoted 
Biofutures International plc 
until July 2010. Julie is also 
a non-executive director 
of Nottingham University 
Hospitals NHS Trust.
A career in the passenger 
transport industry saw 
Giles lead an MBO in 1991, 
forming Blazefield Holdings 
Limited, a business operating 
bus networks principally 
across Yorkshire and 
Lancashire. This company 
was sold to Transdev in 2006.
In 1997 he was appointed 
chief executive of Prism Rail 
PLC, having been one of 
that company’s founders, 
and held that position until 
its sale to National Express 
in 2000. Prism Rail operated 
four of the UK’s passenger 
rail franchises with a turnover 
of £500 million per annum.
Giles is currently managing 
director – Bus, UK and 
Ireland for First Group Plc. 
Giles served as chairman 
of the Association of Train 
Operating Companies in 
1999/2000 and as chairman 
of The Confederation of 
Passenger Transport UK.  18
Dillistone Group Plc 
Annual Report and Accounts 2013
The Directors present their report and financial statements for 
the year ended 31 December 2013.
Results and dividends
The consolidated statement of comprehensive income for the 
year is set out on page 20.
An interim dividend of 1.2p per share was paid in June 2013. 
A final dividend of 2.6p per share will be paid, subject to 
shareholder approval, on 25 June 2013.
Directors
The following Directors have held office since 1 January 2013 
other than where stated:
M D Love – Non-Executive Chairman
J S Starr
R Howard
A D James
J P Pomeroy
G R Fearnley – Non-Executive Director
A Milne
The interests of the Directors (including family interests) in the 
share capital of the Company are listed on page 15.
Mike Love, Rory Howard and Alistair Milne are proposed for 
re-election at the forthcoming AGM. Rory Howard and Alistair 
Milne have a service contract with a one year notice period.
Principal shareholders
As at the 22 April 2014 the Directors have been notified of the 
following shareholdings in excess of 3% of the Company’s 
issued share capital:
Ordinary 
shares of  
5 pence each Percentage
J S Starr 3,554,433 19.52%
R Howard 3,300,000 18.13%
J McLaughlin 2,572,122 14.13%
Herald Investment Management 1,767,444 9.71%
Unicorn Asset Management 900,043 4.94%
CFS Independent 870,889 4.78%
R Howells 650,000 3.57%
Directors’ and officers’ insurance
The Group maintains insurance cover for all Directors and 
officers of Group companies against liabilities which may be 
incurred by them while acting as Directors and officers.
Annual General Meeting
The Company’s Annual General Meeting will be held at 
Voyager Software Limited, 12 Cedarwood Crockford Lane 
Chineham Park Basingstoke RG24 8WD on 11 June 2014 at 
10:30 am. The Notice convening the Annual General Meeting 
and an explanation of the business to be put to the meeting is 
contained in the separate document to shareholders which 
accompanies this report.
Auditors
Grant Thornton UK LLP was appointed as auditor for the year 
ended 31 December 2013 and a resolution proposing their 
re-appointment as auditors to the Company will be put to the 
forthcoming Annual General Meeting.
Directors’ responsibilities
The Directors are responsible for preparing the Directors’ 
Report and the financial statements in accordance with 
applicable law and regulations.
Company law requires the Directors to prepare financial 
statements for each financial year. Under that law the 
Directors have elected to prepare the financial statements in 
accordance with International Financial Reporting Standards 
as adopted by the European Union (IFRSs). 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 and profit or loss of the Company and 
Group for that period. In preparing these financial statements, 
the Directors are required to:
• select suitable accounting policies and then apply them 
consistently;
• make judgements and accounting estimates that are 
reasonable and prudent;
• state whether applicable IFRSs have been followed, subject 
to any material departures disclosed and explained in the 
financial statements; and
• prepare the financial statements on the going concern 
basis unless it is inappropriate to presume that the 
Company will continue in business.
The Directors are responsible for keeping adequate 
accounting records that are sufficient to show and explain the 
Company’s transactions and disclose with reasonable 
accuracy at any time the financial position of the Company 
and enable them to ensure that the financial statements 
comply with the Companies Act 2006. They are also 
responsible for safeguarding the assets of the Company and 
hence for taking reasonable steps for the prevention and 
detection of fraud and other irregularities.
The Directors confirm that so far as each Director is aware:
• there is no relevant audit information of which the 
Company’s auditors are unaware; and
• the Directors have taken all steps that they ought to have 
taken to make themselves aware of any relevant audit 
information and to establish that the auditors are aware of 
that information.
The Directors are responsible for the maintenance and 
integrity of the corporate and financial information included 
on the Company’s website. Legislation in the United Kingdom 
governing the preparation and dissemination of financial 
statements may differ from legislation in other jurisdictions.
On behalf of the Board
J P Pomeroy
Company Secretary
28 April 2014
Directors’ Report 19
Dillistone Group Plc 
Annual Report and Accounts 2013
Strategic Report
www.dillistonegroup.com
Governance Financial Statements
Independent auditor’s report to the members of 
Dillistone Group Plc
We have audited the financial statements of Dillistone Group 
Plc for the year ended 31 December 2013 which comprise  
the consolidated statement of comprehensive income, the 
consolidated and parent company statements of changes  
in equity, the consolidated and parent company statement  
of financial position, the consolidated and parent company 
statements of cash flow and the related notes. The financial 
reporting framework that has been applied in their 
preparation is applicable law and International Financial 
Reporting Standards (IFRSs) as adopted by the European 
Union and, as regards the parent company financial 
statements, as applied in accordance with the provisions  
of the Companies Act 2006.
This report is made solely to the Company’s members,  
as a body, in accordance with Chapter 3 of Part 16 of the 
Companies Act 2006. Our audit work has been undertaken  
so that we might state to the Company’s members those 
matters we are required to state to them in an auditor’s report 
and for no other purpose. To the fullest extent permitted by 
law, we do not accept or assume responsibility to anyone  
other than the Company and the Company’s members as a 
body, for our audit work, for this report, or for the opinions we 
have formed.
Respective responsibilities of Directors and auditor
As explained more fully in the Directors’ Responsibilities 
Statement, set out on page 18, 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/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 31 December 2013 and of the Group’s profit for the year 
then ended;
• the Group financial statements have been properly 
prepared in accordance with IFRSs as adopted by the 
European Union;
• the parent company financial statements have been 
properly prepared in accordance with IFRSs as adopted by 
the European Union and as applied in accordance with the 
provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance 
with the requirements of the Companies Act 2006.
Opinion on other matter prescribed by the Companies 
Act 2006
In our opinion the information given in the Strategic Report 
and the Directors’ Report for the financial year for which the 
financial statements are prepared is consistent with the 
financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters 
where the Companies Act 2006 requires us to report to you if, 
in our opinion:
• adequate accounting records have not been kept by the 
parent company, or returns adequate for our audit have 
not been received from branches not visited by us; or
• the parent company financial statements are not in 
agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by 
law are not made; or
• we have not received all the information and explanations 
we require for our audit.
Paul Etherington BSc FCA CF
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
28 April 2014
Independent Auditor’s Report
To the Members of Dillistone Group Plc for the year ended 31 December 2013 20
Dillistone Group Plc 
Annual Report and Accounts 2013
Note
2013 
£’000
2012 
£’000
Revenue 3 8,101 7,052
Cost of sales (957) (864)
Gross profit 7,144 6,188
Administrative expenses (5,561) (4,675)
Profit from operating activities 6 1,583 1,513
 Adjusted operating profit before acquisition related items 1,793 1,671
 Acquisition related items
*
(210) (158)
 Operating profit 1,583 1,513
Financial income 8 8 13
Finance cost 5 (68) (13)
Profit before tax 1,523 1,513
Tax expense 9 (292) (278)
Profit for the year 1,231 1,235
Other comprehensive income net of tax:
Items that will be reclassified subsequently to profit and loss
Currency translation differences (16) (11)
Total comprehensive income for the year net of tax 1,215 1,224
Earnings per share – from continuing activities
Basic 10 6.76p 6.79p
Diluted 10 6.51p 6.76p
* see accounts note 2 & 5.
The notes on pages 26 to 48 are an integral part of these consolidated financial statements.
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2013 21
Dillistone Group Plc 
Annual Report and Accounts 2013
Strategic Report
www.dillistonegroup.com
Governance Financial Statements
Share  
capital
£’000
Share 
premium
£’000
Merger  
reserve
£’000
Retained 
earnings
£’000
Share  
option
£’000
Foreign 
exchange
£’000
Total
£’000
Balance at 31 December 2011 910 451 365 1,934 24 163 3,847
Comprehensive income
Profit for the year ended 31 Dec 2012 – – – 1,235 – – 1,235
Other comprehensive income
Exchange differences on translation of 
overseas operations – – – – – (11) (11)
Total comprehensive income – – – 1,235 – (11) 1,224
Transactions with owners
Share option charge – – – 2 44 – 46
Dividends paid – – – (643) – – (643)
Total transactions with owners – – – (641) 44 – (597)
Balance at 31 December 2012 910 451 365 2,528 68 152 4,474
Comprehensive income
Profit for the year ended 31 Dec 2013 – – – 1,231 – – 1,231
Other comprehensive income
Exchange differences on translation of 
overseas operations – – – – – (16) (16)
Total comprehensive income – – – 1,231 – (16) 1,215
Transactions with owners
Issue of share capital 4 47 – – – – 51
Share option charges – – – – 53 – 53
Dividends paid – – – (683) – – (683)
Total transactions with owners 4 47 – (683) 53 – (579)
Balance at 31 December 2013 914 498 365 3,076 121 136 5,110
The notes on pages 26 to 48 are an integral part of these consolidated financial statements.
Consolidated Statement of Changes in Equity
For the year ended 31 December 2013 22
Dillistone Group Plc 
Annual Report and Accounts 2013
Share  
capital
£’000
Share 
premium
£’000
Merger  
reserve
£’000
Retained 
earnings
£’000
Share  
option
£’000
Total
£’000
Balance at 31 December 2011 910 451 365 975 24 2,725
Comprehensive income
Total comprehensive income for the year ended 
31 December 2012 – – – 808 – 808
Transactions with owners
Share option charge – – – 2 44 46
Dividends paid – – – (643) – (643)
Total transactions with owners – – – (641) 44 (597)
Balance at 31 December 2012 910 451 365 1,142 68 2,936
Comprehensive income
Total comprehensive income for the year ended 
31 December 2013 – – – 715 – 715
Transactions with owners
Issue of share capital 4 47 – – – 51
Share option charge – – – – 53 53
Dividends paid – – – (683) – (683)
Total transactions with owners 4 47 – (683) 53 (579)
Balance at 31 December 2013 914 498 365 1,174 121 3,072
The notes on pages 26 to 48 are an integral part of these consolidated financial statements.
Company Statement of Changes in Equity
For the year ended 31 December 2013 23
Dillistone Group Plc 
Annual Report and Accounts 2013
Strategic Report
www.dillistonegroup.com
Governance Financial Statements
Group Company
Notes
2013
£’000
2012
£’000
2013
£’000
2012
£’000
ASSETS
Non-current assets
Goodwill 12 2,745 2,490 – –
Intangible assets 13 4,833 3,048 – –
Property, plant and equipment 14 127 124 – –
Investments 15 – – 5,675 4,111
7,705 5,662 5,675 4,111
Current assets
Inventories 16 78 62 – –
Trade and other receivables 17 1,790 1,715 365 28
Cash and cash equivalents 1,399 1,643 78 11
3,267 3,420 443 39
Total assets 10,972 9,082 6,118 4,150
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 19 914 910 914 910
Share premium 498 451 498 451
Merger reserve 365 365 365 365
Retained earnings 3,076 2,528 1,174 1,142
Share option reserve 21 121 68 121 68
Translation reserve 136 152 – –
Total equity 5,110 4,474 3,072 2,936
Liabilities
Non-current liabilities
Trade and other payables 18 459 256 459 256
Deferred tax liability 9 901 592 – –
Current liabilities
Trade and other payables 18 4,313 3,609 2,587 958
Current tax payable 189 151 – –
Total liabilities 5,862 4,608 3,046 1,214
Total liabilities and equity 10,972 9,082 6,118 4,150
The notes on pages 26 to 48 are an integral part of these consolidated financial statements.
The financial statements were approved by the Board of Directors and authorised for issue on 28 April 2014. They were signed 
on its behalf by
J S Starr
Director
Company Registration No. 4578125
Consolidated and Company Statement of Financial Position
As at 31 December 2013 24
Dillistone Group Plc 
Annual Report and Accounts 2013
2013
£’000
2012
£’000
Operating activities
Profit before tax 1,523 1,513
Less taxation paid (273) (250)
Adjustment for:
Financial income (8) (13)
Financial cost 68 13
Depreciation and amortisation 621 553
Share option expense 53 47
Foreign exchange adjustments arising from operations 14 9
Operating cash flows before movement in working capital 1,998 1,872
Increase in receivables (120) (4)
Increase in inventories (15) (51)
Increase/(decrease) in payables 259 (149)
Net cash generated from operating activities 2,122 1,668
Investing activities
Interest received 7 13
Purchases of property, plant and equipment (83) (69)
Investment in development costs (747) (803)
Acquisition of subsidiaries net of cash acquired (715) (98)
Deferred consideration paid (185) –
Net cash used in investing activities (1,723) (957)
Financing activities
Proceeds from issue of share capital 51 –
Dividends paid (683) (643)
Net cash used by financing activities (632) (643)
Net (decrease)/increase in cash and cash equivalents (233) 68
Cash and cash equivalents at beginning of year 1,643 1,617
Effect of foreign exchange rate changes (11) (42)
Cash and cash equivalents at end of year 1,399 1,643
The notes on pages 26 to 48 are an integral part of these consolidated financial statements.
Consolidated Cash Flow Statement
For the year ended 31 December 2013 25
Dillistone Group Plc 
Annual Report and Accounts 2013
Strategic Report
www.dillistonegroup.com
Governance Financial Statements
2013
£’000
2012
£’000
Operating activities
Profit before tax 783 808
Less taxation paid – –
Adjustment for share option expense 53 46
Operating cash flows before movements in working capital 836 854
(Increase)/decrease in receivables (334) 11
Increase/(decrease) in payables 1,214 (126)
Net cash generated from operating activities 1,716 739
Investing activities
Investment in acquisitions (832) (98)
Deferred consideration paid (185) –
Net cash used in investing activities (1,017) (98)
Financing activities
 Dividends paid (683) (643)
 Monies from share issue 51 –
Net cash used in financing activities (632) (643)
Net (decrease)/increase in cash and cash equivalents 67 (2)
Cash and cash equivalents at beginning of year 11 13
Cash and cash equivalents at end of year 78 11
The notes on pages 26 to 48 are an integral part of these consolidated financial statements.
Company Cash Flow Statement
As at 31 December 2013 26
Dillistone Group Plc 
Annual Report and Accounts 2013
Dillistone Group Plc (the ‘Company’) is a company incorporated in England and Wales. The financial statements are presented in 
thousand Pounds Sterling.
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.
Both the Group financial statements and the Company financial statements have been prepared and approved by the Directors 
in accordance with International Financial Reporting Standards (‘IFRS’) as adopted by the European Union (‘EU’), IFRIC 
Interpretations and the Companies Act 2006 applicable to companies reporting under IFRS. In publishing the Company financial 
statements here together with the Group financial statements, the Company has taken advantage of the exemption in s408 of 
the Companies Act 2006 not to present its individual income statement and related notes in these financial statements.
1. Accounting policies
1.1 Basis of accounting
The consolidated financial statements have been prepared using the significant accounting policies and measurement bases 
summarised below:
Significant estimates
In the application of the Group’s accounting policies the Directors are required to make estimates and assumptions about the 
carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated 
assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ 
from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised 
in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future 
periods if the revision affects both current and future periods. The key areas are summarised below:
Valuation of share based payments
The estimation of share based payment costs requires the selection of an appropriate valuation model and consideration as to 
the inputs necessary for the valuation model chosen. The Group has made estimates as to the volatility of its own shares, the 
probable life of options granted, leaver rates and the time of exercise of those options. The model used by the Group is a 
Black-Scholes valuation model. Further details are shown in note 21.
Impairment of goodwill and other intangible assets
There are a number of assumptions management have considered in performing impairment reviews of goodwill and intangible 
assets which include an estimate of the future cash flows expected to arise from the cash generating unit and a suitable discount 
rate in order to calculate present value. See note 12.
Business combinations
On initial recognition, the assets and liabilities of the acquired business are included in the consolidated statement of financial 
position at their fair values. In measuring fair value, management uses estimates about future cash flows and discount rates. 
However, actual results may vary. Details of acquired assets and liabilities are given in note 22.
Contingent consideration
Where contingent consideration is payable in cash and discounting would have a material effect, management uses an 
appropriate discount rate. As the contingent consideration is dependent upon future trading performance, an estimate of the 
present value of the likely consideration payable is made.
Judgements in applying the Group’s accounting policies
In the process of applying the Group’s accounting policies, management make various judgements that can significantly affect 
the amounts recognised in the financial statements. The critical judgements are considered to be the following:
Customers’ practical acceptance of licence software
As detailed in note 1.4, perpetual licence fee revenues are recognised on practical acceptance of the software. The Group uses 
the ‘live’ date as the basis of determining the timing of customer practical acceptance, thereby reducing the judgement required 
to ascertain the timing of licence revenue recognition.
Capitalisation of internal development expenditure
Management exercises judgement in establishing both the technical feasibility of completing an intangible asset which can be 
used internally or sold and the degree of certainty that a market exists for the asset, or its output, for the generation of future 
economic benefits. In addition, amortisation rates are based on estimates of the useful economic lives and residual values of the 
assets involved. The assessment of these useful economic lives is made by projecting the economic lifecycle of the asset which is 
subject to alteration as a result of product development and innovation. Amortisation rates are changed where economic lives 
are re-assessed and technically obsolete items written off where necessary.
Notes to the Financial Statements
For the year ended 31 December 2013 27
Dillistone Group Plc 
Annual Report and Accounts 2013
Strategic Report
www.dillistonegroup.com
Governance Financial Statements
Valuation of assets and liabilities
Management has made a number of assumptions with regards to the models used to value assets and liabilities at the 
statement of financial position date. Valuation techniques commonly used by market practitioners are applied. In respect of the 
provision for bad and doubtful receivables and credit note provisions, management has made relevant judgements based on 
discussions with the account managers as regards the recoverability of trade receivables.
Valuation of separately identifiable intangible assets
As detailed in note 1.6, separately identifiable intangible assets are identified and amortised over a defined period. The Directors 
use an acknowledged approach but this is reliant upon certain judgements which they determine are reasonable by reference to 
companies in similar industries.
The accounting policies set out below have, unless otherwise stated, been applied consistently by the Group to all periods 
presented in these financial statements.
1.2 Going concern
The Group’s business activities and financial position, together with the factors likely to affect its future development, 
performance and position, are set out in the CEO’s Review and Financial Review on pages 6 to 11. In addition, note 23 to the 
financial statements includes the Company’s objectives, policies and processes for managing its capital; its financial risk 
management objectives; details of its financial instruments; and its exposures to credit risk and liquidity risk.
The Group has considerable financial resources together with well established relationships with a number of customers and 
suppliers across different geographic areas.
As a consequence, the Directors believe that the Company is well placed to manage its business risks successfully despite the 
current uncertain economic outlook.
The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for 
the foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial 
statements.
1.3 Basis of consolidation
The Group financial statements consolidate those of Dillistone Group Plc and of its subsidiary undertakings at the statement of 
financial position date. Subsidiary undertakings are entities over which the Group has the power to govern the financial and 
operating policies so as to obtain benefits from the activities, which is considered to represent control. The Group obtains and 
exercises control through voting rights. There are no associates or joint ventures to be considered.
Intra-group balances, and any unrealised gains and losses or income and expenses arising from intra-group transactions, are 
eliminated in preparing the consolidated financial statements. Acquisitions of subsidiaries are dealt with by the acquisition 
method.
1.4 Revenue
General
Revenue is the fair value of the total amount receivable by the Group for supplies of products and services which are provided in 
the normal course of business. VAT or similar local taxes and trade discounts are excluded.
Licensing (excluding SaaS)
The Group licenses software under licence agreements. Perpetual licence fee revenues are recognised on practical acceptance of 
the software, when all obligations have been substantially completed. This is when the customer has accepted the product, the 
risks and rewards of ownership have been transferred, it is probable that the economic benefits of the transaction will flow to the 
Group, all costs and revenue in relation to the transaction can reliably be measured and the Group has no further managerial 
involvement over the goods to the degree usually associated with ownership. To the extent that payments have been received in 
advance for licences, where practical acceptance has not yet been reached, these amounts are recognised as deferred income.
Professional services
The Group provides professional services which include installation, consulting, data translation and training. Such revenues are 
recognised as the services are completed or, where they are part of the sale and installation of software, they are typically 
recognised when the obligations under the contract are complete. To the extent that payments have been received in advance 
for such services these amounts are recognised as deferred income.
Product support, hosting and software as a service (SaaS)
Revenues from support, hosting or SaaS agreements are recognised over the period to which they relate but only after practical 
acceptance of the software, as defined above, has been received. Where revenue is invoiced in advance for such services, the 
amount in advance is included in deferred revenue and released over the period to which the service relates.
1. Accounting policies continued 28
Dillistone Group Plc 
Annual Report and Accounts 2013
Third party revenues
The Group sells software developed by other organisations together with services that are bought in from third parties. Sales  
of third party software are recognised in the period in which the sale occurs. Services are recognised in the period in which they 
are provided.
1.5 Share based payments
The Company operates two share based payment schemes and one cash based scheme.
The first is an equity settled share based compensation plan (share options) for remuneration of its employees. It can also be 
used in conjunction with a long term incentive plan for executives.
All employee services received in exchange for the grant of any share based compensation are measured at their fair values. 
These are indirectly determined by reference to the share option awarded. Their value is appraised at the grant date and 
excludes the impact of any non-market vesting conditions (e.g. profitability or sales growth targets).
All equity-settled share based compensation is ultimately recognised as an expense in the profit or loss with a corresponding 
credit to share based payment reserve, net of deferred tax where applicable. If vesting periods or other vesting conditions apply, 
the expense is allocated over the vesting period, based on the best available estimate of the number of shares options expected 
to vest. Non market vesting conditions are included in assumptions about the number of options that are expected to become 
exercisable. Estimates are subsequently revised if there is any indication that the number of share options expected to vest 
differs from previous estimates. No adjustment to expenses recognised in prior periods is made if fewer share options ultimately 
are exercised than originally estimated.
Upon exercise of share options, the proceeds received, net of any directly attributable transaction costs, up to the nominal value 
of the shares issued are reallocated to share capital with any excess being recorded as additional share premium.
The second scheme is a cash settled share based compensation plan for Directors. Under this scheme, Directors are granted 
‘phantom’ options which have performance conditions related to the growth in earnings per share of the Group. The options will 
automatically be exercised following the publication of the Annual Report of the Company, three years after the grant. These 
phantom options are revalued at each half year end using a Black Scholes model and the necessary movement in the liability is 
recognised through the income statement. The liability is included in non-current liabilities. The Directors agreed to waive their 
rights under the plan maturing in 2014 and replace it with a capped cash bonus scheme with the similar performance conditions 
and which matures in the same time-frame.
Where there is a modification to a cash settled scheme, the change in fair value between the current and previous scheme is 
immediately recognised in the consolidated comprehensive statement of income.
The LTIP awards granted in 2013 were based on a capped cash bonus with performance conditions related to the growth  
in earnings per share of the Group. These awards automatically mature following the publication of the Annual Report of  
the Company, three years after the period to which the grant relates. The liability is accrued and recognised through the  
income statement.
1.6 Business combinations
The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group 
to obtain control of a subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities 
incurred and the equity interests issued by the Group, which includes the fair value of any asset or liability arising from a 
contingent consideration arrangement. Acquisition costs are expensed as incurred.
The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they 
have been previously recognised in the acquiree’s financial statements prior to the acquisition. Assets acquired and liabilities 
assumed are generally measured at their acquisition-date fair values. Goodwill is stated after separate recognition of identifiable 
intangible assets. It is calculated as the excess of the sum of a) fair value of consideration transferred, b) the recognised amount 
of any non-controlling interest in the acquiree and c) acquisition-date fair value of any existing equity interest in the acquiree, 
over the acquisition-date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the sum 
calculated above, the excess amount (i.e. gain on a bargain purchase) is recognised in profit or loss immediately. 
Where contingent consideration relates to the results spread over different accounting periods, the fair value of such 
consideration is recalculated at each year end and any adjustment is recognised in profit or loss immediately.
1.7 Adjusted operating profit
Adjusted operating profit excludes acquisition costs and related intangible amortisation and movements in deferred 
consideration and other one off costs which can include, as an example, buying out onerous contracts acquired through  
an acquisition.
1. Accounting policies continued
Notes to the Financial Statements continued
For the year ended 31 December 2013 29
Dillistone Group Plc 
Annual Report and Accounts 2013
Strategic Report
www.dillistonegroup.com
Governance Financial Statements
1.8 Impairment testing of goodwill, other intangible assets and property, plant and equipment
For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely independent cash 
inflows (cash generating units). As a result, some assets are tested individually for impairment and some are tested at cash 
generating unit level. Goodwill is allocated to those cash generating units that are expected to benefit from synergies of the 
related business combination and represent the lowest level within the Group at which management monitors goodwill. Cash 
generating units to which goodwill has been allocated (determined by the Group’s management as equivalent to its operating 
segments) are tested for impairment at least annually. All other individual assets or cash generating units are tested for 
impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s or cash generating unit’s carrying amount exceeds its 
recoverable amount, which is the higher of fair value less costs to sell and value-in-use. To determine the value-in-use, 
management estimates expected future cash flows from each cash generating unit and determines a suitable interest rate in 
order to calculate the present value of those cash flows. The data used for impairment testing procedures are directly linked to 
the Group’s latest approved budget, adjusted as necessary to exclude the effects of future reorganisations and asset 
enhancements. Discount factors are determined individually for each cash generating unit and reflect management’s 
assessment of respective risk profiles, such as market and asset-specific risks factors. Impairment losses for cash generating units 
reduce first the carrying amount of any goodwill allocated to that cash generating unit. Any remaining impairment loss is 
charged pro rata to the other assets in the cash generating unit. With the exception of goodwill, all assets are subsequently 
reassessed for indications that an impairment loss previously recognised may no longer exist. An impairment charge is reversed if 
the cash generating unit’s recoverable amount exceeds its carrying amount.
1.9 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-
maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the 
operating segments, has been identified as the Board of Directors.
1.10 Intangible assets
Internal development costs
Costs incurred on product development relating to the design and development of new or enhanced products are capitalised as 
intangible assets when it is reasonably certain that the development will provide economic benefits, considering its commercial 
and technological feasibility and the resources available for the completion and marketing of the development, and where the 
costs can be measured reliably. The expenditures capitalised are the direct labour and subcontracted costs, which are managed 
and controlled centrally. Product development costs previously recognised as an expense are not recognised as an asset in a 
subsequent period.
Capitalised product development expenditure for versions of the Group’s FileFinder product (up to version 9) and for expenditure 
on subsequent enhancements and releases to FileFinder 10 is amortised over its useful life of three years, commencing a year 
following the costs being incurred. Maintenance costs are expensed.
Capitalised product development expenditure for the Company’s FileFinder version 10 and Voyager Infinity platform is 
amortised over its useful life of 10 years or to 30 June 2021, whichever is the shorter period, commencing in the year in which the 
product is first brought into use.
Capitalised product development expenditure is subject to regular impairment reviews and is stated at cost less any accumulated 
impairment losses and amortisation. Any impairment taken during the year is shown under administrative expenses on the 
consolidated statement of comprehensive income.
Acquired as part of a business combination
In accordance with IFRS 3 Business Combinations, an intangible asset acquired in a business combination is deemed to have a 
cost to the Group of its fair value at the acquisition date. The fair value of the intangible asset reflects market expectations about 
the probability that the future economic benefits embodied in the asset will flow to the Group. Where an intangible asset might 
be separable, but only together with a related tangible or intangible asset, the Group of assets is recognised as a single asset 
separately from goodwill where the individual fair values of the assets in the Group are not reliably measurable. Where the 
individual fair values of the complementary assets are reliably measurable, the Group recognises them as a single asset provided 
the individual assets have similar useful lives.
1. Accounting policies continued 30
Dillistone Group Plc 
Annual Report and Accounts 2013
Subsequent to initial recognition, intangible assets are reported at cost less accumulated amortisation and accumulated 
impairment losses. Amortisation is provided to write off the cost of each intangible asset over its useful economic life as follows:
Estimated life
Intangible assets
Brand 15 years
Developed technology 6–11.25 years
Contractual customer relationships 1.25 years
Non-contractual customer relationships 10–10.25 years
1.11 Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation on these assets is provided at rates 
estimated to write off the cost, less estimated residual value, of each asset over its expected useful life as follows:
Leasehold land and buildings the lower of 5 years or the remaining lease period
Office and computer equipment 3–5 years straight line
Fixtures, fittings and equipment 4 years straight line
1.12 Financial assets
The Group classifies its financial assets under the definitions provided in International Accounting Standard 39 (IAS 39)  
Financial Instruments: Recognition and measurement, depending on the purpose for which the financial assets were acquired. 
Management determines the classification of its financial assets at initial recognition. Management considers that the Group’s 
financial assets fall under the ‘loans and receivables’ category.
Loans and receivables are non-derivative financial assets with fixed or determined payments that are not quoted in an active 
market. They are included in current assets, except for maturities greater than 12 months after the statement of financial 
position date, which are classified as non-current assets. The Group’s loans and receivables comprise trade receivables, 
intercompany trading balances (in relation to Company accounts), and cash and cash equivalents.
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest 
rate method, less any provision for impairment. Receivables are considered for impairment when they are past due or when other 
objective evidence is received that a specific counterparty may default. Receivables that are not considered to be individually 
impaired are reviewed for impairment in groups. The impairment loss estimate is then based on recent historical counterparty 
default rates and current economic conditions.
Derecognition of financial assets occurs when the rights to receive cash flows from the investments expire or are transferred and 
substantially all of the risks and rewards of ownership have been transferred. An assessment for impairment is undertaken at 
least at each statement of financial position date whether or not there is objective evidence that a financial asset or a group of 
financial assets is impaired.
1.13 Financial liabilities
The Group classifies its financial liabilities under the definitions provided in IAS 39, either as financial liabilities at fair value 
through profit or loss, or financial liabilities measured at amortised cost. Management considers that the Group’s financial 
liabilities fall under the ‘financial liabilities measured at amortised cost’ category other than contingent consideration which is 
measured at fair value. The Group’s ‘financial liabilities measured at amortised cost’ comprise trade payables, intercompany 
trading balances (in relation to Company accounts), and accruals.
Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective 
interest method.
1.14 Investments
Investments in subsidiary companies are included at cost in the accounts of the Company less any amount written off in respect 
of any impairment in value.
1.15 Leases
Finance leases are recognised as being those that transfer substantially all the risks and rewards of ownership. Assets held under 
finance leases are capitalised and the outstanding future lease obligations are shown in payables at the present value of the 
lease payments. They are depreciated over the term of the lease or their useful economic lives, whichever is the shorter. The 
interest element (finance charge) of lease payments is charged to profit or loss over the period of the lease.
All other leases are regarded as operating leases and the payments made under them are charged to profit or loss in the period 
in which they are incurred. The Group does not act as a lessor.
1. Accounting policies continued
Notes to the Financial Statements continued
For the year ended 31 December 2013 31
Dillistone Group Plc 
Annual Report and Accounts 2013
Strategic Report
www.dillistonegroup.com
Governance Financial Statements
1.16 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost includes all directly attributable expenses. Costs of 
ordinarily interchangeable items are assigned using the first in, first out cost formula. Net realisable value is the estimated selling 
price in the ordinary course of business less any applicable selling expenses.
1.17 Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term highly liquid investments 
with original maturities of three months or less and which are subject to an insignificant risk of changes in value.
1.18 Equity
Equity comprises the following:
• ‘Share capital’ represents the nominal value of equity shares.
• ‘Share premium’ represents the excess over nominal value of the fair value of consideration received for equity shares, net of 
expenses of the share issue.
• ‘Merger reserve’ is used where more than 90% of the shares in a subsidiary are acquired and the consideration includes the 
issue of new shares by the Company, thereby attracting merger relief under the Companies Act 2006.
• ‘Share option reserve’ represents equity-settled share based employee and non-employee remuneration until such share 
options are exercised.
• ‘Retained earnings’ represents retained profits and losses.
• ‘Translation reserve’ represents translation differences arising on the consolidation of investments in overseas subsidiaries.
1.19 Foreign currency translation
The consolidated financial statements are presented in Sterling, which is also the functional currency of the parent company.
Monetary assets and liabilities denominated in foreign currencies are translated into Sterling at the rates of exchange ruling at 
the statement of financial position date. Transactions in foreign currencies are recorded at the rate ruling at the date of the 
transaction. All differences are taken to profit and loss.
On consolidation, the assets and liabilities of the Group’s overseas subsidiaries are translated from their functional currency to 
Sterling at exchange rates prevailing on the statement of financial position date. Income and expenses have been translated 
from their functional currency into Sterling at the average rate for each month over the reporting period. Exchange differences 
are charged/credited to other comprehensive income and recognised in the currency translation reserve in equity.
1.20 Income taxes
Current income tax assets and liabilities comprise those obligations to fiscal authorities in the countries in which the Group carries 
out its operations. They are calculated according to the tax rates and tax laws applicable to the fiscal period and the country to 
which they relate. Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in 
other comprehensive income or directly in equity.
Deferred income taxes are calculated using the liability method on temporary differences. This involves the comparison of  
the carrying amount of assets and liabilities in the consolidated financial statements with their respective tax bases. However, 
deferred tax is not provided on the initial recognition of goodwill, or on the initial recognition of an asset or liability unless the 
related transaction is a business combination or affects tax or accounting profit. Deferred tax on temporary differences 
associated with investments in subsidiaries is not provided if reversal of these temporary differences can be controlled by  
the Group and it is probable that reversal will not occur in the foreseeable future.
Deferred tax liabilities are always provided for in full. Deferred tax assets are recognised to the extent that it is probable that 
future taxable profits will be available against which the temporary differences can be utilised. Deferred tax assets and liabilities 
are calculated at tax rates that are expected to apply to their respective period of realisation, provided they are enacted or 
substantively enacted at the statement of financial position date. Tax expense recognised in profit or loss comprises the sum  
of deferred tax and current tax not recognised in other comprehensive income or directly in equity.
1.21 Defined contribution pension scheme
The pension costs charged in the financial statements represent the contributions payable by the Group during the year.
1. Accounting policies continued 32
Dillistone Group Plc 
Annual Report and Accounts 2013
1.22 New accounting standards
(i) New and amended standards adopted by the Group:
The following new standards and amendments to standards are mandatory for the first time for the Group for financial year beginning 
1 January 201 3. Except as noted, the implementation of these standards is not expected to have a material effect on the Group.
Standard 
IAS 12 (Amendment): Deferred tax – Recovery of Underlying Assets
IAS 19 (Revised): IAS 19 Employee Benefits 
IFRS 7 (Amendment): Disclosures – Offsetting Financial Assets and Financial Liabilities 
IFRS 13: Fair Value Measurement
IFRS 13 clarifies the definition of fair value and provides related guidance and enhanced disclosures about fair value 
measurements. It does not affect which items are required to be fair-valued. The scope of IFRS 13 is broad and it applies for both 
financial and non-financial items for which other IFRSs require or permit fair value measurements or disclosures about fair value 
measurements except in certain circumstances.
IFRS 13 applies prospectively for annual periods beginning on or after 1 January 2013. Its disclosure requirements need not be 
applied to comparative information in the first year of application. The Group has however included as comparative information 
the IFRS 13 disclosures that were required previously by IFRS 7 Financial Instruments: Disclosures.
The Group has applied IFRS 13 for the first time in the current year (note 24).
No other IFRS issued and adopted but not yet effective are expected to have an impact on the Group’s financial statements.
(ii) Standards, amendments and interpretations which are effective for reporting periods beginning after the date of these 
financial statements which have not been adopted early:
Standard Description Effective date
IFRS 9 Financial Instruments 1 January 2015 
IFRS 10 Consolidated Financial Statements 1 January 2014 
IFRS 11 Joint Arrangements 1 January 2014 
IFRS 12 Disclosure of Interests in Other Entities 1 January 2014 
IAS 27 Separate Financial Statements 1 January 2014 
IAS 28 Investments in Associates and Joint Ventures 1 January 2014 
IAS 32 Offsetting Financial Assets and Financial Liabilities 1 January 2014 
2. Reconciliation of adjusted operating profits to consolidated statement of comprehensive income 
Note
Adjusted 
operating 
profits 
2013
£’000
Acquisition 
related  
items 
2013*
£’000
2013
£’000
Adjusted 
operating 
profits 
2012
£’000
Acquisition 
related items 
and other one 
off costs 
2012*
£’000
2012
£’000
Revenue 8,101 – 8,101 7,052 – 7,052
Cost of sales (957) – (957) (808) (56) (864)
Gross profit 7,144 – 7,144 6,244 (56) 6,188
Administrative expenses (5,351) (210) (5,561) (4,573) (102) (4,675)
Results from operating activities 1,793 (210) 1,583 1,671 (158) 1,513
Financial income 8 – 8 13 – 13
Financial cost – (68) (68) – (13) (13)
Profit before tax 1,801 (278) 1,523 1,684 (171) 1,513
Tax expense (346) 54 (292) (373) 95 (278)
Profit for the year 1,455 (224) 1,231 1,311 (76) 1,235
Other comprehensive income net 
of tax:
Currency translation differences (16) – (16) (11) – (11)
Total comprehensive income for 
the year net of tax 1,439 (224) 1,215 1,300 (76) 1,224
Earnings per share – from 
continuing activities
Basic 10 7.99p 6.76p 7.20p 6.79p
Diluted 10 7.70p 6.51p 7.18p 6.76p
* see accounts note 5.
1. Accounting policies continued
Notes to the Financial Statements continued
For the year ended 31 December 2013 33
Dillistone Group Plc 
Annual Report and Accounts 2013
Strategic Report
www.dillistonegroup.com
Governance Financial Statements
3. Segment reporting
The Board principally monitors the Group’s operations in terms of results of the two divisions, Dillistone Systems and Voyager 
Software. Segment results reflect management charges made or received. Intercompany balances are excluded from segment 
assets and liabilities.
Divisional segments
For the year ended 31 December 2013
Dillistone
£’000
Voyager
£’000
Inter-
divisional 
Revenue
£’000
Central
£’000
Total
£’000
Recurring income 3,248 2,023 – – 5,271
Non-recurring income 1,675 777 (24) – 2,428
Third party revenues – 402 – – 402
Segment revenue 4,923 3,202 (24) – 8,101
Segment EBITDA 2,013 598 (369) 2,242
Depreciation and amortisation expense (358) (91) – (449)
Segment result 1,655 507 (369) 1,793
Acquisition related amortisation – – (172) (172)
Acquisition related charges – – (38) (38)
Operating profit/(loss) 1,655 507 (579) 1,583
Financial income 7 1 – 8
Acquisition related interest expenses (68) (68)
Income tax expense (292)
Profit after tax 1,231
Additions of non-current assets 546 284 – 830
Segment assets 2,341 971 82 3,394
Intangibles and goodwill 1,870 691 5,017 7,578
Total 4,211 1,662 5,099 10,972
Segment liabilities 2,959 1,009 1,894 5,862
For the year ended 31 December 2012
Dillistone
£’000
Voyager
£’000
Central
£’000
Total
£’000
Recurring income 3,144 1,385 – 4,529
Non-recurring income 1,522 618 – 2,140
Third party revenues – 383 – 383
Segment revenue 4,666 2,386 – 7,052
Segment EBITDA 1,912 484 (398) 1,998
Depreciation and amortisation expense (281) (46) – (327)
Segment result 1,631 438 (398) 1,671
Acquisition related amortisation – – (227) (227)
Acquisition related charges – (84) 153 69
Operating profit 1,631 354 (472) 1,513
Financial income 12 1 – 13
Acquisition related interest expenses (13) (13)
Income tax expense (278)
Profit after tax 1,235
Additions of non-current assets 465 407 – 872
Segment assets 3,181 349 14 3,544
Intangibles and goodwill 1,667 488 3,383 5,538
Total 4,848 837 3,397 9,082
Segment liabilities 2,961 749 898 4,608 34
Dillistone Group Plc 
Annual Report and Accounts 2013
Products and services
The following table provides an analysis of the Group’s revenue by products and services.
Revenue
2013
£’000
2012
£’000
Recurring income 5,271 4,529
Non-recurring income 2,428 2,140
Third party revenues 402 383
8,101 7,052
Recurring income includes all support services, SaaS and hosting income. Non-recurring income includes sales of new licences, 
and income derived from installing those licences including training, installation, and data translation. Third party revenues arise 
from the sale of third party software.
It is not possible to allocate assets and additions between recurring, non-recurring income and third party revenue.
No customer represented more than 10% of revenue of the Group.
4. Geographical analysis
The following table provides an analysis of the Group’s revenue by geographic market.
The Board does not review the business from a geographical performance viewpoint and this analysis is provided for 
information only.
Revenue
2013
£’000
2012
£’000
UK 6,188 4,995
US 1,228 1,239
Australia 685 818
8,101 7,052
Non current assets by geographical location
2013
£’000
2012
£’000
UK 7,698 5,654
US 5 4
Australia 2 4
7,705 5,662
5. Acquisition related items
2013
£’000
2012
£’000
Estimated change in fair value of contingent consideration (note 22) (57) (153)
Payment in respect of onerous contract acquired at acquisition – 56
Tax costs relating to options exercised pre-acquisition of Woodcote – 28
Amortisation of acquisition intangibles 172 227
Fees relating to the acquisition of FCP (note 22) 95 –
210 158
Unwinding of discount on contingent consideration 68 13
278 171
3. Segment reporting continued
Notes to the Financial Statements continued
For the year ended 31 December 2013 35
Dillistone Group Plc 
Annual Report and Accounts 2013
Strategic Report
www.dillistonegroup.com
Governance Financial Statements
6. Profits from operating activities
2013
£’000
2012
£’000
Profits from operating activities is stated after charging:
Depreciation 93 88
Amortisation 528 465
Loss on foreign exchange transactions 2 3
Operating lease rentals – land and buildings 176 184
Money purchase pension contributions 97 50
Fees receivable by the Group auditors:
Audit of financial statements 22 21
Other services:
Audit of accounts of subsidiary of the Company 43 32
Other services relating to taxation 34 20
All other services 33 –
7. Employees
The average number of employees was:
2013 2012
Operations 87 79
Management 7 6
Employee numbers 94 85
Their aggregate remuneration comprised:
2013
£’000
2012
£’000
Wages and salaries 3,713 3,340
Social security costs 410 381
Pension costs 97 50
Share based payments charged and LTIP 186 130
4,406 3,901
The aggregate remuneration includes salary cost and Directors’ remuneration totalling £474,000 (2012: £366,000) that have 
been capitalised in intangible assets.
Key management of the Group are the Directors and the directors of Voyager Software. Remuneration of key management was 
as follows:
2013
£’000
2012
£’000
Wages and salaries and benefits 699 735
Social security costs 83 83
Pension costs 36 8
Share based payments charge and LTIP charge 164 107
982 933
Details of Directors’ emoluments, share options and pension entitlements are given in the Report to the Shareholders on Directors’ 
Remuneration on pages 14 to 15.
8. Financial income
2013
£’000
2012
£’000
Interest receivable 8 13
Unwinding of discount on contingent consideration (68) (13)
(60) – 36
Dillistone Group Plc 
Annual Report and Accounts 2013
9. Tax expense
2013
£’000
2012
£’000
Current tax 308 251
Deferred tax 38 101
Deferred tax re acquisition intangibles (54) (74)
Income tax expense for the year 292 278
Factors affecting the tax charge for the year
Profit before tax 1,523 1,513
UK rate of taxation 23.25% 24.5%
Profit before tax multiplied by the UK rate of taxation 354 371
Effects of: 
Overseas tax rates 49 67
Impact of deferred tax not provided (15) 16
Enhanced R&D relief (112) (142)
Disallowed expenses 103 31
Rate change impact on deferred tax (27) (50)
Prior year adjustments (60) (15)
Tax expense 292 278
Deferred tax provided in the financial statements is as follows:
Group Company
2013
£’000
Movement
£’000
2012
£’000
2013
£’000
2012
£’000
Accelerated intangible amortisation 433 39 394 – –
Provisions (9) (1) (8) – –
Acquisition intangibles 477 271 206 – –
901 309 592 – –
The UK corporation tax rate in the year fell from 24% to 23% giving an effective rate for the year of 23.25%. The tax rate is 
expected to fall again to 21 % in April 2014 and subsequently to 20%. Where deferred tax is provided in relation to the UK it  
has been provided at 21 %. The tax charge is impacted by the higher rates of corporation tax payable in the US and Australia 
partially offset by the R&D tax credits available to both Dillistone Systems and Voyager Software. The Group has gross tax losses 
and temporary timing differences of £227 ,000 (2012: £221,000) for which no deferred tax asset has been recognised.
10. Earnings per share
2013
Using adjusted 
operating profit
£’000
2013
£’000
2012
Using adjusted 
operating profit
£’000
2012
£’000
Profit attributable to ordinary shareholders 1,455,000 1,231,000 1,311,000 1,235,000
Weighted average number of shares 18,211,321 18,211,321 18,201,294 18,201,294
Basic earnings per share 7.99 pence 6.76 pence 7 .20 pence 6.79 pence
Weighted average number of shares after dilution 18,902,055 18,902,055 18,261,915 18,261,915
Fully diluted earnings per share 7.70 pence 6.51 pence 7.18 pence 6.76 pence
Reconciliation of basic to diluted average number of shares
2013 2012
Weighted average number of shares (basic) 18,211,321 18,201,294
Effect of dilutive potential ordinary shares – employee share plans 690,734 60,621
Weighted average number of shares after dilution 18,902,055 18,261,915
Notes to the Financial Statements continued
For the year ended 31 December 2013 37
Dillistone Group Plc 
Annual Report and Accounts 2013
Strategic Report
www.dillistonegroup.com
Governance Financial Statements
11. Profit for the financial year
As permitted by section 408 of the Companies Act 2006, the parent company’s profit and loss account has not been included in 
these financial statements. The profit for the financial year for the parent company was £715,000 (2012: £808,000).
12. Goodwill
Group
Goodwill
£’000
Cost
At 1 January 2012 2,490
Additions –
At 31 December 2012 2,490
Additions 255
At 31 December 2013 2,745
Carrying amount
At 31 December 2013 2,745
At 31 December 2012 2,490
At the year end date an impairment test has been undertaken by comparing the carrying values of goodwill with the recoverable 
amount of the cash generating unit (CGU) to which the goodwill has been allocated. The recoverable amount of the cash 
generating unit is based on value-in-use calculations. These calculations use cash flow projections covering a three year period 
based on financial budgets and a calculation of the terminal value, for the period following these formal projections.
The key assumptions used for value-in-use calculations are those regarding growth rates, increases in costs and discount rates. 
The discount rate is reviewed annually to take into account the current market assessment of the time value of money and the 
risks specific to the CGUs and rates used by comparable companies. The pre-tax discount rate used to calculate value-in-use is 
12% (2012: 12%). Growth rates for forecasts take into account historic experience and current market trends. Costs are reviewed 
and increased for inflation and other cost pressures. The long term growth rate used for the terminal value calculation is 2% 
(2012: 2%) for all CGUs. The allocation of goodwill across the CGUs is as follows:
Opening
£’000
Addition
£’000
Impairment
£’000
Closing
£’000
Dillistone UKMEA 290 – – 290
Dillistone Europe 110 – – 110
Dillistone Australia 40 – – 40
Dillistone US 54 – – 54
Voyager consolidated 1,996 – – 1,996
FCP – 255 – 255
2,490 255 – 2,745
Sensitivities
To reduce the headroom in the impairment calculation to £nil for the Voyager consolidation goodwill would require a reduction 
of terminal growth rate to 0% and an increase in the discount rate to 41 %. Alternatively, cash flows would need to fall by 75%. 
For FCP , cash flows would need to reduce by almost 90% to reduce the head room to £nil. No meaningful sensitivity for the 
Dillistone goodwill reduces the headroom to £nil. 38
Dillistone Group Plc 
Annual Report and Accounts 2013
13. Intangible assets
Group
Development 
costs
£’000
Acquisition 
intangibles
£’000
Total
£’000
Cost
At 1 January 2012 2,250 1,178 3,428
Additions 803 – 803
At 31 December 2012 3,053 1,178 4,231
Additions through acquisition at fair value 15 1,551 1,566
Additions 747 – 747
At 31 December 2013 3,815 2,729 6,544
Amortisation
At 1 January 2012 661 57 718
Charge for the year 238 227 465
At 31 December 2012 899 284 1,183
Charge for the year 356 172 528
At 31 December 2013 1,255 456 1,711
Carrying amount
At 31 December 2013 2,560 2,273 4,833
At 31 December 2012 2,154 894 3,048
Acquisition intangibles can be summarised as follows:
Brand
£’000
Developed 
technology
£’000
Contractual 
and non- 
contractual 
relationship
£’000
Total
£’000
Cost
At 1 January 2013 178 271 445 894
Additions – 157 1,394 1,551
Amortisation (13) (40) (119) (172)
At 31 December 2013 165 388 1,720 2,273
Notes to the Financial Statements continued
For the year ended 31 December 2013 39
Dillistone Group Plc 
Annual Report and Accounts 2013
Strategic Report
www.dillistonegroup.com
Governance Financial Statements
14. Property, plant and equipment
Group
Land and 
buildings
£’000
Office and 
computer 
equipment
£’000
Fixtures and 
fittings
£’000
Total
£’000
Cost
At 1 January 2012 163 522 130 815
Currency impact – (3) – (3)
Additions 3 66 – 69
Disposals – (40) – (40)
At 31 December 2012 166 545 130 841
Currency impact – (5) – (5)
Additions – 77 6 83
Additions by acquisition – 11 3 14
Disposals – (25) – (25)
At 31 December 2013 166 603 139 908
Depreciation
At 1 January 2012 163 419 90 672
Currency impact – (3) – (3)
Charge for the year 1 64 23 88
Eliminated on disposal – (40) – (40)
At 31 December 2012 164 440 113 717
Currency impact – (4) – (4)
Charge for year 1 73 19 93
Eliminated on disposal – (25) – (25)
At 31 December 2013 165 484 132 781
Carrying amount
At 31 December 2013 1 119 7 127
At 31 December 2012 2 105 17 124
15. Non-current asset investments
Company
Investments in 
subsidiaries 
£’000
Cost
At 1 January 2012 4,111
Additions –
At 31 December 2012 4,111
Additions 1,564
At 31 December 2013 5,675
The Company has the following subsidiary undertakings:
Name Principal activity
Holding of 
ordinary shares Registered
Dillistone Systems Limited Sale of computer software and 
related support services
100% England & Wales
Dillistone Systems (Australia) Pty Limited Sale of computer software and 
related support services
100% 
(indirect)
Australia
Dillistone Systems (US) Inc Sale of computer software and 
related support services
100% USA
FCP Internet Limited Provision of software services and 
related consultancy services
100% England & Wales
FCP Internet Holdings Limited Intermediate holding company 100% England & Wales
Woodcote Software Limited Dormant company 100% England & Wales
Voyager Software Limited Sale of computer software and 
related support services
100% England & Wales
Voyager Software (Australia) Pty Limited Sale of computer software and 
related support services
100% 
(indirect)
Australia 40
Dillistone Group Plc 
Annual Report and Accounts 2013
16. Inventories
Group Company
2013
£’000
2012
£’000
2013
£’000
2012
£’000
Licences for resale 78 62 – –
17. Trade and other receivables
Group Company
2013
£’000
2012
£’000
2013
£’000
2012
£’000
Trade and other receivables 1,565 1,483 – –
Group receivables – – 354 21
Other current assets 61 36 7 4
Prepayments and accrued income 164 196 4 3
1,790 1,715 365 28
The carrying value of trade receivables is considered a reasonable approximation of fair value. All of the receivables have been 
reviewed for indicators of impairment. The movement in the provision is shown below:
2013
£’000
2012
£’000
At start of year 83 78
Movement in the year 7 5
At the year end 90 83
The ageing profile of trade receivables as at the year end is as follows:
2013
£’000
2012
£’000
Current 1,272 1,226
Past due date:
31–60 days overdue 121 51
More than 60 days overdue 172 206
Total 1,565 1,483
18. Trade and other payables
Group Company
2013
£’000
2012
£’000
2013
£’000
2012
£’000
Current liabilities
Trade and other payables 612 430 53 27
Group payables – – 1,623 518
Deferred income 2,475 2,483 – –
Accruals 1,226 696 911 413
4,313 3,609 2,587 958
Non-current liabilities
Contingent consideration 352 137 352 137
Cash settled share based provision 107 119 107 119
459 256 459 256
Contingent consideration is included in the trade and other payables and is valued at fair value. The amounts included are 
as follows:
Group Company
2013
£’000
2012
£’000
2013
£’000
2012
£’000
Current liabilities
In accruals 566 223 566 223
In non-current liabilities 352 137 352 137
918 360 918 360
Further details of the contingent consideration is given in note 22.
Notes to the Financial Statements continued
For the year ended 31 December 2013 41
Dillistone Group Plc 
Annual Report and Accounts 2013
Strategic Report
www.dillistonegroup.com
Governance Financial Statements
19. Share capital
2013
£’000
2012
£’000
Allotted, called up and fully paid
Ordinary shares of 5 pence each 914 910
In November 2013, WH Ireland, the Company’s nomad and broker, exercised a warrant over 69,930 shares at a price of 71.5p.
2013 2012
Shares issued and fully paid
Beginning of the year 18,205,190 18,196,277
Shares issued on exercise of options 69,930 8,913
Shares issued and fully paid 18,275,120 18,205,190
20. Operating lease arrangements
The Group leases offices under non-cancellable operating lease agreements.
At 31 December 2013, the Group had future total commitments under non-cancellable operating leases as follows:
2013
£’000
2012
£’000
Commitments payable: 202 335
Within one year 154 167
Between two and five years 48 168
21. Share options
Share based payments
There are two share option schemes in operation: an Enterprise Management Incentive Scheme (‘the EMI Scheme’) which 
complies with the requirements of HMRC and a scheme which has not been approved by HMRC (‘the Unapproved Scheme’). The 
terms and conditions of both schemes are the same. If the options remain unexercised after a period of 10 years from the date 
of grant, the options expire. Options are normally forfeited if the employee leaves the Company before the options become 
available to exercise, which would normally be three years after grant. Performance conditions are associated with the options 
granted on 29 May 2012.
During 2013 the Group made two grants of options. The fair values of the services received in exchange for share based 
payments were calculated using a Black-Scholes pricing model.
The inputs into the model were as follows:
Date of grant
Number 
granted
Share price  
on issue date
Exercise  
price
Expected 
volatility
Vesting  
period
Leaver rate 
over vesting 
period
Risk-free  
rate
Expected 
dividend yield
8 July 2013 38,000 79.50p 79.50p 30% 3.3 years 18% 0.86% 3.0%
25 Nov 2013 20,000 115.00p 115.00p 30% 3.0 years 0% 0.86% 3.0%
There was one grant of options in 2012. The fair values of the services received in exchange for share based payments were 
calculated using a Black-Scholes pricing model. The inputs into the model were as follows:
Date of grant
Number 
granted
Share price  
on issue date
Exercise  
price
Expected 
volatility
Vesting  
period
Leaver rate 
over vesting 
period
Risk-free  
rate
Expected 
dividend yield
29 May 2012 220,822 73.00p 73.00p 55% 3.0 years 0% 0.44% 4.5% 42
Dillistone Group Plc 
Annual Report and Accounts 2013
Details of the number of share options and the weighted average exercise price (WAEP) outstanding during the year are 
as follows:
2013 2012
No of 
options* WAEP*
No of 
options* WAEP*
Outstanding at beginning of year 743,355 74.09 552,446 74.01
Granted during year 58,000 91.74 220,822 73.00
Exercised during year – – (8,913) 5.39
Forfeited during year (47,000) 85.49 (21,000) 89.67
Outstanding at the end of the year 754,355 74.74 743,355 74.09
Exercisable at the year end 62,739 59.20 80,739 68.11
* Adjusted for the 2 for 1 bonus issue where appropriate.
No Directors exercised share options during the year. The Company’s mid-market share price on 31 December 2013 was 105.5p.
The fair value of all options granted is shown as an employee expense with a corresponding increase in equity. The employee 
expense is recognised equally over the time from grant until vesting of the option. The employee expense for the year was 
£53,000 (2012: £47 ,000).
Share options remaining in the schemes are as follows:
Scheme type Date of grant Exercise from Lapse date
Options 
remaining
Exercise price 
(p)
Unapproved 03/05/2006 03/05/2009 02/05/2016 26,739 5.38
EMI 14/09/2007 14/09/2010 13/09/2017 36,000 99.17
Unapproved 14/01/2011 14/01/2014 13/01/2022 30,000 58.33
EMI 21/09/2011 21/09/2014 20/09/2022 363,794 77.00
Unapproved 21/09/2011 21/09/2014 20/09/2021 19,000 77.00
EMI 29/05/2012 29/05/2015 28/05/2023 220,822 73.00
EMI 08/07/2013 08/07/2016 07/07/2023 31,000 79.50
Unapproved 08/07/2013 08/07/2016 07/07/2023 7,000 79.50
EMI 25/11/2013 25/11/2016 24/11/2023 20,000 115.00
754,355
No share options were exercised during the year. In 2012 8,913 shares were exercised at a weighted average share price of 68.5p. 
The weighted average remaining contractual life of options at 31 December 2013 was 8.5 years (2012: 8.4 years).
Cash settled options
During 2011 the Board introduced a long term incentive scheme for Directors. The scheme granted phantom options to the 
participants and these options are cash settled on the vesting date, which will be the date of the publication of the appropriate 
annual report. The amount payable will be the increase in share price between the date of grant and vesting multiplied by the 
number of phantom options granted multiplied by the performance factor. The performance factor is based on the percentage 
rise in the earnings per share over the period.
The fair values of the services received in exchange for cash based option payments were calculated using a Black-Scholes pricing 
model at 31 December 2013.
The inputs into the model were as follows:
Date of grant
Number 
granted*
Share price  
on issue date*
Exercise 
price*
Expected 
volatility
Remaining 
period to 
vesting
Leaver rate 
over vesting 
period
Risk-free  
rate
Expected 
dividend yield
28 April 2011 645,750 66.67p 66.67p 60% 0.33 years 0% 0.3% 4.00%
29 May 2012 384,932 73p 73p 60% 1.33 years 0% 0.4% 4.00%
* Adjusted for the 2 for 1 bonus issue.
21. Share options continued
Notes to the Financial Statements continued
For the year ended 31 December 2013 43
Dillistone Group Plc 
Annual Report and Accounts 2013
Strategic Report
www.dillistonegroup.com
Governance Financial Statements
The phantom options were granted in 2011 pursuant to the Company’s 2011 long term incentive plan (LTIP) with exercise 
conditions linked to share price growth and growth in earnings per share over a three year period (measured by taking the 
earnings per share in the 2013 statutory accounts compared to the earnings per share in the 2010 statutory accounts). 
As the recent rise in the Company’s share price meant that the awards would exceed one-third of salary, in 2014, the Executive 
Directors waived their right to the excess and the LTIP awards were amended so that the awards took the form of a cash bonus 
with a maximum pay-out, if all exercise conditions were met in full, of one-third of annual salary (as at the date of award) but 
with no link to share price. Performance conditions remain in place.
The expense charged in respect of the LTIP for the year was £133,000 (2012: £83,000). The total liability carried forward was 
£252,000 (2012: £119,000) and £145,000 is included in current liabilities and £107 ,000 in non-current liabilities.
Expected volatility takes into account historic volatility of the share price and its current trend.
22. Acquisitions
On 8 July 2013, the Group acquired the entire share capital of FCP Internet Holdings Limited (‘Holdings’) and its wholly owned 
subsidiary FCP Internet Limited (‘FCP’) for an estimated consideration before fees of £1,565,000, which was satisfied as detailed 
below. This was part of the Group’s strategy to broaden our offering to the recruitment sector.
Holdings is a non-trading holding company. FCP (www.evolvedb.co.uk), sells its evolve™ product to its target market of 
recruitment agencies. This product, which is wholly delivered through a SaaS model, is designed to facilitate the filling of 
temporary or permanent vacancies and is used by hundreds of users around the World. FCP operates in the same market  
sector as the Group’s Voyager Software business and is UK based. It forms part of the Voyager Software division.
The details of the business combination are as follows:
Book  
value
£’000
Fair value 
adjustments
£’000
Fair value 
intangibles 
adjustments
£’000
Fair  
value
£’000
Assets
Non-current assets
Property, plant and equipment 33 (20) – 13
Intangible assets 82 (67) 1,551 1,566
Current assets
Trade and other receivables 35 (1) – 34
Cash and cash equivalents 117 – – 117
Total assets 267 (88) 1,551 1,730
Liabilities
Trade and other payables (93) (1) – (94)
Deferred tax liability – – (326) (326)
Net assets acquired 174 (89) 1,225 1,310
Goodwill 255
1,565
Satisfied by
Cash consideration 750
Cash consideration in relation to surplus working capital 82
Contingent consideration 733
1,565
Fair value of consideration transferred
Amount settled in cash consideration in period 832
Cash and cash equivalents acquired (117)
Net cash outflow on acquisition 715
Acquisition costs charged to expenses 95
Net cash paid relating to acquisition 810
21. Share options continued 44
Dillistone Group Plc 
Annual Report and Accounts 2013
The total consideration of £1,565,000 net of cash acquired of £117 ,000 was £1,448,000 before fees. The fair value adjustment of 
£89,000 relates mainly to the writing down of intangible assets and property, plant and equipment to their fair value, adopting 
more closely the accounting policies adopted by the Group. Fees of £95,000 were expensed and included in acquisition related 
costs. In addition, following a detailed review of the fair value of assets and liabilities acquired, in accordance with IFRS 3 
Business Combinations the Group has recognised two intangible assets totalling £1,551,000 made up as follows:
£’000 Estimated life
Intangible assets
Developed technology 157 6 years
Customer relationships 1,394 10 years
1,551
Goodwill of £255,000 represents the excess of the purchase price over the fair value of the net tangible and intangible assets 
acquired. The goodwill arising on the acquisition consists largely of the workforce value, synergies and economies of scale 
expected from combining the operating with Dillistone Group companies.
As part of the acquisition, the Group agreed to pay additional consideration based on surplus working capital retained in the 
business at completion. Following a completion accounts verification process, an amount of £82,000 was agreed to be paid to 
the vendors and this was paid in the year. In addition, the vendors are entitled to contingent consideration as follows:
• £50,000 – provided that certain revenues in January 2014 exceeded those in January 2013.
• Up to 60% of recurring revenues in the nine month period to 31 March 2014. The percentage varies depending on the level of 
recurring revenues.
• Up to 50% of recurring revenues in the nine month period to 31 December 2014. The percentage varies depending on the 
level of recurring revenues.
• Up to 50% of recurring revenues in the three month period to 31 March 2015. The percentage varies depending on the level 
of recurring revenues.
The contingent consideration has been calculated based on the information available at the year end and not solely based on 
the information at the time of the acquisition. The deferred consideration as at acquisition has been discounted at an annual 
rate of 16.99% with a resulting charge in the 2013 accounts of £58,000. The value of the deferred contingent consideration at 
31 December 2013 was £790,000. The maximum deferred consideration payable is £1,200,000.
From the date of acquisition to 31 December 2013, the acquired companies contributed £472,000 to revenue and £55,000 to 
profit before taxation. In the last financial year, being the year ended 31 October 2012, the acquired companies made a profit 
before taxation of £171,000 and before an exceptional loss totalling £320,000 relating to a loan write-off to a sister company, 
NowWeComply Limited, which was sold prior to acquisition. However, due to a change in year end, lack of audited accounts  
and exceptional write-offs, pro-forma profit or loss of the combined entity for the complete 2013 reporting period cannot readily 
be determined.
Deferred consideration payable in respect of earlier acquisitions
As part of the acquisition of Voyager Software, the Group agreed to pay additional contingent consideration. During 2013 it 
made payments totalling £186,000. The final tranche of the deferred consideration is due to be paid in April 2014 and is derived 
as follows:
• 30% of the revenue of the acquired companies over £2,300,000 in the year ending 31 December 2013.
In the 2013 accounts, the amounts payable under the contingent consideration have been reduced by £57 ,000 based on the 
revenues for 2012 and on the revenue for 2013. These amounts have been discounted at 4.5% and resulted in a discount charge 
to the profit and loss account of £11,000.
23. Financial instruments
The Group uses various financial instruments; these include cash and bank deposits and various items such as trade receivables 
and trade payables that arise directly from its operations. The main purpose of these financial instruments is to provide finance 
for the Group’s operations.
The Group’s finance department maintains liquidity, manages relations with the Group’s bankers, identifies and manages  
foreign exchange risk and controls Group treasury operations. Treasury dealings such as investments and foreign exchange are 
conducted only to support underlying business transactions. Consequently, the Group does not undertake speculative foreign 
exchange dealings for which there is no underlying exposure.
22. Acquisitions continued
Notes to the Financial Statements continued
For the year ended 31 December 2013 45
Dillistone Group Plc 
Annual Report and Accounts 2013
Strategic Report
www.dillistonegroup.com
Governance Financial Statements
The Group’s policies for management of the financial risks to which it is exposed are outlined below.
(i) Interest rate risk
The Group has a limited exposure to interest rate volatility. The Group has no debt and the only interest rate exposure is therefore 
on the Group’s bank deposits. The Group’s policy is to maintain capital preservation and flexibility rather than to optimise interest 
rates on bank deposits held. Cash deposits in Sterling and foreign currencies are made at prevailing interest rates. Where rates are 
fixed, the fixed interest period is generally no more than one month.
At the year end, the Group had positive cash balances totalling £1,399,000 (2012: £1,643,000). Had interest rates been 1 % 
higher during the financial year, the impact on profit would have been an increase in profit for the year of £19,000 
(2012: increase of £20,000).
(ii) Credit risk
The Group’s principal financial assets are cash and cash equivalents and trade and other receivables.
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its 
contractual obligations and arises principally from the Group’s receivables from customers and monies on deposit with financial 
institutions.
Historically, the cash collection profile has been very good. Debt aging and collections are monitored on a regular basis and for 
new customers deposits are usually required. Some of the unimpaired trade receivables are past due as at the reporting date. 
Information on financial assets past due but not impaired are included in note 17 .
The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international 
credit rating agencies.
The Group has no significant concentration of credit risk.
The Group’s maximum exposure to credit risk at the reporting date is represented by the carrying value of financial assets, 
as follows:
Group Company
2013
£’000
2012
£’000
2013
£’000
2012
£’000
Trade and other receivables (current assets) 1,565 1,483 354 21
Cash and cash equivalents 1,399 1,643 78 11
Total 2,964 3,126 432 32
(iii) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to 
managing liquidity is to ensure it has sufficient liquidity to meet its liabilities when due.
As at 31 December 2013, the Group and Company’s financial liabilities (being trade and other payables and deferred income 
and payroll taxes and VAT or similar taxes) have contractual maturities as summarised below:
Group
31 December 2013
Carrying 
amount
£’000
< 1 year
£’000
1–2 years
£’000
2–5 years
£’000
Trade and other payables (current liabilities) 4,313 4,313 – –
Trade and other payables (non-current liabilities) 459 – 424 35
4,772 4,313 424 35
31 December 2012
Carrying 
amount
£’000
< 1 year
£’000
1–2 years
£’000
2–5 years
£’000
Trade and other payables (current liabilities) 3,609 3,609 – –
Trade and other payables (non-current liabilities) 256 – 233 23
3,865 3,609 233 23
The bank has a fixed and floating charge over the assets of the Group if monies are owed. As at the year-end no amounts were 
due to the bank.
23. Financial instruments continued 46
Dillistone Group Plc 
Annual Report and Accounts 2013
Company
31 December 2013
Carrying 
amount
£’000
< 1 year
£’000
1–2 years
£’000
2–5 years
£’000
Trade and other payables (current liabilities) 2,587 2,587 – –
Trade and other payables (non-current liabilities) 459 – 424 35
3,046 2587 424 35
31 December 2012
Carrying 
amount
£’000
< 1 year
£’000
1–2 years
£’000
2–5 years
£’000
Trade and other payables (current liabilities) 958 958 – –
Trade and other payables (non-current liabilities) 256 – 233 23
1,214 958 233 23
The Directors consider there to be no significant liquidity risks due to the significant cash balances of the Group.
(iv) Foreign currency risk
The Group is exposed to foreign currency risk on sales and purchases which are denominated in a currency other than Sterling. 
Exposures to currency exchange rates are primarily denominated in US Dollars ($), Australian Dollars (AUD) and Euros (€). The 
Group does not use derivatives to hedge translation exposures arising on the consolidation of its overseas operations.
At the year end, the Group had assets totalling £1,322,000 and liabilities totalling £518,000 denominated in Euros (2012: assets 
totalling £1,261,000 and liabilities totalling £508,000), assets totalling £602,000 and liabilities totalling £573,000 denominated 
in US Dollars (2012: assets totalling £1,120,000 and liabilities totalling £852,000) and assets totalling £353,000 and liabilities 
totalling £259,000 denominated in Australian Dollars (2012: assets totalling £287 ,000 and liabilities totalling £250,000). If each 
of the exchange rates weakened by 5%, the impact on the income statement would as follows:
Group
2013
£’000
2012
£’000
Euros 2 4
US dollars 14 17
Australian dollars 9 7
25 28
At the year end, the Company had liabilities totalling £183,000 denominated in Euros (2012: liabilities totalling £267 ,000), assets 
totalling £225,000 denominated in US Dollars (2012: liabilities totalling £47 ,000) and assets totalling £22,000 denominated in 
Australian Dollars (2012: liabilities totalling £28,000). 
Capital risk management
The Group’s objectives when managing capital are to safeguard the entity’s ability to continue as a going concern, so that it can 
continue to provide returns for shareholders and benefits for other stakeholders.
The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it 
in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust 
the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue 
new shares, or sell assets. The Group follows a progressive dividend policy.
The Company has no debt, and therefore the total capital managed by the Group as at the year end was its total equity  
balance of £5,110,000 (2012: £4,474,000). Further details in respect of movements in capital are provided in the statement of 
changes in equity.
23. Financial instruments continued
Notes to the Financial Statements continued
For the year ended 31 December 2013 47
Dillistone Group Plc 
Annual Report and Accounts 2013
Strategic Report
www.dillistonegroup.com
Governance Financial Statements
Summary of financial assets and liabilities by category
The carrying amounts of the financial assets and liabilities as recognised at the statement of financial position date of the years 
under review may also be categorised as follows:
Group Company
2013
£’000
2012
£’000
2013
£’000
2012
£’000
Financial assets
Cash and cash equivalents 1,399 1,643 78 11
Trade and other receivables 1,790 1,715 365 28
3,189 3,358 443 39
Financial liabilities held at amortised cost
Trade and other payables 3,854 3,505 2,128 854
Financial liabilities held at fair value
Contingent consideration 918 360 918 360
4,772 3,865 3,046 1,214
24. Fair value measurement of financial instruments 
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three Levels 
of a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement, as 
follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or 
indirectly
• Level 3: unobservable inputs for the asset or liability
The following table shows the Levels within the hierarchy of financial assets and liabilities measured at fair value on a recurring 
basis at 31 December 2013 and 31 December 2012:
2013
£’000
Level 3
2012
£’000
Level 3
Contingent consideration: 918 360
The Group’s finance team performs valuations of financial items for financial reporting purposes, including Level 3 fair values,  
in consultation with third party valuation specialists for complex valuations. Valuation techniques are selected based on the 
characteristics of each instrument, with the overall objective of maximising the use of market-based information. The finance 
team reports directly to the Group Finance Director and to the Audit Committee. The valuation techniques used for instruments 
categorised in Levels 2 and 3 are described below:
Contingent consideration (Level 3) 
The fair value of contingent consideration relates to the acquisitions of Voyager Software and FCP internet (see note 22) and is 
estimated using a present value technique. The £790,000 fair value is mainly based on actual, budget or forecast revenues 
prepared by the finance team. The contingent consideration is discounted.
The discount rate used in respect of Voyager Software is 4.5%, and is based on an after tax estimated of the Group’s  
theoretical borrowing rate for unsecured liabilities. The discount rate used for FCP Internet is 16.99% reflecting the cost of  
capital of the company. 
25. Control
No individual shareholder, or shareholders acting in concert, hold more than 50% of voting shares, and accordingly there is not 
considered to be an ‘ultimate controlling party’.
26. Related party transactions
Company
The Company has a related party relationship with its subsidiaries, its Directors, and other employees of the Company with 
management responsibility.
During the year the Company received a management charge of £62,000 (2012: £63,000) and a dividend of £210,000 from its 
subsidiary company Dillistone Systems (US) Inc (2012: £65,000). At the year end Dillistone Systems (US) Inc was owed £209,000 
(2012: £47 ,000) by the Company.
23. Financial instruments continued 48
Dillistone Group Plc 
Annual Report and Accounts 2013
26. Related party transactions continued
During the current year Dillistone Systems Limited paid a dividend of £1,000,000 (2012: £1,000,000) to Dillistone Group Plc and 
a management charge of £178,000 (2012: £128,000). At the year end Dillistone Systems Limited was owed £1,588,000 
(2012: £435,000).
The Company received a management charge during the year from Dillistone Systems (Australia) Pty Limited of £55,000 
(2012: £60,000) and at the year end owed it £28,000 (2012: £28,000).
Voyager Software paid a management charge of £144,000 (2012: £130,000) and owed the Company £29,000 at the year end 
(2012: £13,000). Woodcote Software owed the Company £13,000 at the year end (2012: nil).
FCP Internet Limited paid a management charge of £70,000 and owed the Company £67 ,000 at the year end (2012: £nil).
Management charges payable by Group members to Dillistone Group Plc relate to management support provided directly 
to them.
The Directors received dividends paid by the Company of £318,000 (2012: £299,000).
27. Dividends
The dividends paid in 2013 and 2012 were £683,000 (3.75p per share) and £643,000 (3.533p per share) respectively after 
adjusting for the bonus issue. A final dividend in respect of the year ended 31 December 2013 of 2.6p per share will be paid on  
25 June 2014. These financial statements do not reflect this dividend.
Notes to the Financial Statements continued
For the year ended 31 December 2013 Directors and Advisers
Directors
M D Love – Non-Executive Chairman
G R Fearnley – Non-Executive Director
J S Starr – Chief Executive
R Howard – Operations Director
A D James – Product Development Director
J P Pomeroy – Group Finance Director
A F Milne – Director of Support Services
Secretary
J P Pomeroy
Company number
4578125
Registered office
Third Floor
50-52 Paul Street
London EC2A 4LB
Independent auditors
Grant Thornton UK LLP
Grant Thornton House
Melton Street
Euston Square
London NW1 2EP
Principal bankers
HSBC Bank Plc
Basingstoke Commercial Centre
8 London Street
Basingstoke
RG21 7NU
Solicitors
Ashfords LLP
Tower Wharf
Cheese Lane
Bristol BS2 0JJ
Nominated adviser
WH Ireland Limited
24 Martin Lane
London
EC4R 0DR
Broker
WH Ireland Limited
24 Martin Lane
London
EC4R 0DR
Registrars
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU Dillistone Group Plc Annual Report and Accounts 2013
Dillistone Group Plc 
Third Floor 
50–52 Paul Street 
London EC2A 4LB 
Tel: +44 (0)20 7749 6100
www.dillistonegroup.com