TECH N O L O G Y P L C
Annual Report 
2015
Castleton T echnology plc Annual Report 2015 Castleton Technology plc Annual Report 2015
Introduction  
and Performance
 It has been a year of 
significant change, 
which has seen the Group finish its restructure 
and embark on a new strategy to build a 
focused software and IT managed services 
business serving the public and not-for-profit 
sectors.
In This Report
STRATEGIC REPORT
01 Operational Highlights
02 Chairman’s Statement
06 Chief Executive’s Review
08 Financial Review
13 Strategic Report
GOVERNANCE
14  Board of Directors 
15 Advisers
16 Corporate Governance Statement
18 Directors’ Remuneration Report
20 Directors’ Report
22  Statement of Directors’ Responsibilities
23   Independent Auditor’s Report to the 
Members of Castleton Technology plc
FINANCIAL STATEMENTS 
24  Consolidated Statement of 
Comprehensive Income
25 Consolidated Balance Sheet
26  Consolidated Statement of  
Changes in Equity
27 Consolidated Cash Flow Statement
28  Notes to the Consolidated 
Financial Statements
54  Company Balance Sheet 
55  Notes to the Company 
Financial Statements Strategic Report
Governance
Financial Statements
01 Castleton Technology plc Annual Report 2015
Operational 
Highlights
 – Acquisition of Montal Holdings Limited (“Montal”) for a total 
consideration of £3.8 million
 – Acquisition of Documotive Limited (“Documotive”), a leading 
software supplier to the social housing sector, for a total 
consideration of £4.0 million
 – Acquisition of Opus Information Technology Limited (“Opus”) 
for £0.5 million
 – Acquisition of Keylogic Limited (“Keylogic”) for £4.8 million
 – Disposal of trade and assets of Maxima Information Group (“MIG”) 
for £0.8 million
 – Sale of consultancy division of Montal for £0.6 million
 – Post year-end on 31 May 2015, acquisition of Brixx Solutions 
Limited (“Brixx”) and Impact Applications Limited (“Impact”), 
for £5.0 million each
 – Turnover from Continuing Operations £6.1 million (2014: Nil)
 – Adjusted EBITDA loss from Continuing Operations £0.1 million 
(2014: loss of £1.0 million)
 – Cash generated from Continuing Operations £0.5 million 
(2014: cash used of £2.3 million)
Turnover, continuing operations
£6.1m
Acquisitions in the year
Four
Acquisitions post year-end
Two 02 Castleton Technology plc Annual Report 2015
Chairman’s 
Statement
I expect that with 
the scale that the six 
acquisitions that have 
been made will bring, 
the Group will look very different when it 
reports its results for the next financial year.
David Payne
Non-Executive Chairman Strategic Report
Governance
Financial Statements
03 Castleton Technology plc Annual Report 2015
Dear Shareholder
I am pleased to report the results of 
the Group for the year ended 31 March 
2015. It has been a year of significant 
change, which has seen the Group finish 
its restructure and embark on a new 
strategy to build a focused software and 
IT managed services business serving 
the public and not-for-profit sectors. 
The journey started in June 2014 with the 
acquisition of Montal Holdings Limited 
(“Montal”), a well-respected niche IT 
managed services business followed 
by Documotive Limited (“Documotive”), 
a specialist software provider to the 
social housing market, in October 2014, 
and then the acquisition of Keylogic 
Limited (“Keylogic”) and Opus Information 
T echnology Limited (“Opus”) in February 
2015. Keylogic is an infrastructure 
managed services provider with a focus 
on the social housing sector and Opus 
is a specialist software provider to the 
social housing sector. The Group is now 
on a clear path to achieving its goal 
to become a successful niche player 
in software and IT managed services 
within the public sector and not-for-profit 
market-place.
The Group also made two disposals 
during the year. The ABS business unit 
consisting of the trade and certain assets 
of the Maxima Information Group Limited 
(“MIG”) was sold to PDMS UK Limited for 
a total cash consideration of £0.8 million 
in September 2014. This was classified 
as an asset held for sale at the previous 
year-end. The Group also disposed 
of the consultancy division of Montal 
Computer Services Limited which was 
sold to its management in February 2015 
for a total consideration of £0.6 million. 
The division was not considered to be 
core to the business and the disposal 
will enable Montal to concentrate on its 
portfolio of managed services and avoids 
any potential conflicts of interest that 
might have occurred in consulting on 
potential services to be recommended 
to clients.
The year has seen significant 
reorganisation, which has involved 
a huge effort from many people; 
I would like to thank all those who have 
contributed, some of whom are no 
longer part of the Group. 
Reported Results
The Group income statement for the 
year shows turnover from continuing 
operations of £6.1 million, a loss 
before tax on continuing operations of 
£3.1 million and an adjusted EBITDA * of a 
loss of £0.1 million. With four acquisitions 
completed at various stages during 
the year, these represent nine months 
of trading from Montal, five months 
of trading from Documotive and one 
month of trading from both Keylogic 
and Opus and are not indicative of a 
full year’s result. In addition to this, two 
further acquisitions were completed 
post year-end, details of which can 
be found below. Exceptional items of 
£2.1 million include acquisition related 
costs and restructuring costs for the 
acquired entities. 
Whilst this year’s results do not contain 
much in the way of guidance to the 
future, I expect that with the scale that 
the six acquisitions that have been 
made will bring, the Group will look very 
different when it reports its results for the 
next financial year.
* Earnings for the year from continuing operations before 
net finance costs, depreciation, amortisation, integration 
and strategic costs, goodwill impairment and share-based 
payment charges. 04 Castleton Technology plc Annual Report 2015
Chairman’s 
Statement continued
we see enormous 
potential to 
become the go-
to supplier for 
software and IT 
services in the 
social housing 
market. 
Equity Raised in the Y ear
On 18 November 2014, the Group raised 
£5.65 million by way of an equity placing 
of 513,636,000 new ordinary shares at 
a price of 1.1 pence per ordinary share. 
These proceeds were used for the 
acquisition of Documotive and towards 
the acquisitions which followed.
Subsequent Events
On 1 June 2015, Castleton announced 
the acquisition of the entire issued 
share capital of Brixx Solutions Limited 
(“Brixx”) and Impact Applications 
Limited (“Impact”).
Brixx is a provider of software enabling 
users to produce financial models and 
long-term forecasts and was acquired 
for a total consideration of £5 million, in 
cash, of which £0.5 million is deferred 
for 12 months. Brixx has developed 
a specific solution, HousingBrixx, in 
order to meet the needs of the social 
housing sector and this solution is 
currently used by over 300 UK social 
housing organisations.
Impact is a provider of business 
critical repairs management software 
and scheduling tools to the social 
housing sector and was acquired for 
consideration of £5.0 million, of which 
£1.67 million was satisfied via the issue 
of new ordinary shares in Castleton 
at a price of 2.25 pence per share. 
The remaining £3.3 million was paid 
in cash on completion. 
These acquisitions further contribute 
towards Castleton’s desire to be the  
go-to supplier of leading edge 
software and IT solutions in the 
social housing sector. Strategic Report
Governance
Financial Statements
05 Castleton Technology plc Annual Report 2015
On 30 June 2015, Castleton raised 
£2.2 million (before expenses) by way 
of an oversubscribed equity placing 
of 97 ,777 ,776 new ordinary shares, at 
2.25 pence per share, to help fund the 
acquisitions of Brixx and Impact and 
to strengthen the Company’s balance 
sheet. At the same time the outstanding 
£1.5 million loan facility with MXC Capital 
Limited (“MXC Capital”) was converted 
into new ordinary shares at 2 pence per 
share and £1 million of loan notes issued 
to the vendors of Documotive at the time 
of the Documotive acquisition were also 
converted into new ordinary shares at 
1.1 pence per share.
The Board
The changes at Board level during the 
year included the appointment of Phil 
Kelly as Senior non-executive Director, 
replacing Richard Ramsay, and the 
appointment of Haywood Chapman as 
Chief Financial Officer replacing Spencer 
Dredge. T ony Weaver also stepped down 
from the Board as non-executive Director 
on 31 December 2014. I would like to 
thank T ony, Richard and Spencer for their 
contribution to the Group. 
Phil brings a thirty year track record of 
leading successful companies within 
the technology sector, having worked 
with both quoted and private equity 
backed businesses. Phil sits on both the 
Audit and Remuneration Committees. 
Haywood is a Chartered Accountant 
and has significant technology expertise 
having held senior financial positions in 
FTSE 250 and Fortune 300 companies.
On 9 April 2015, Davinder Sanghera was 
appointed as Chief Operating Officer. 
Davinder was previously Sales Director 
of Documotive, and has significant 
experience in the social housing sector.
Opportunity/Outlook
With the quality software and IT services 
assets that have been acquired, we see 
enormous potential to become the go-to 
supplier for software and IT services in 
the social housing market. The Board 
is now fully focused on integrating the 
companies that have been acquired to 
become a seamless provider aiming 
to add value to our customer base. 
Our aspiration is to become the leading 
niche software and IT managed services 
provider in the public and not-for-profit 
sectors. MXC Capital is a cornerstone 
investor in the Group, with a proven 
track record of executing very similar 
strategies with other listed businesses, 
with great results. I believe we have the 
team, assets and experience in place 
to deliver value to our shareholders. 
The new financial year is progressing 
well with the Group trading in line with 
market expectations. The Board is 
optimistic for the Group’s prospects.
David Payne
Chairman
21 September 2015 06 Castleton Technology plc Annual Report 2015
Chief Executive’s 
Review
Nearly a third of all 
the social housing 
associations in the UK are 
now Castleton customers. 
Ian Smith
Chief Executive  Strategic Report
Governance
Financial Statements
07 Castleton Technology plc Annual Report 2015
Overview
I am pleased to report the progress the 
Group has made during the financial year 
to 31 March 2015. With four acquisitions 
made during the year and two further 
acquisitions post year-end, Castleton 
is on its way to being the pre-eminent 
supplier of software and IT services to 
the social housing sector as well as a 
leading niche player in the wider public 
and not-for-profit sectors; nearly a third 
of all the social housing associations in 
the UK are now Castleton customers. 
The scope to provide multiple service 
lines to our customers, combined with 
the opportunity for cost saving synergies 
between our businesses, gives me 
great confidence that Castleton will 
continue to deliver for its shareholders. 
The acquisitions of Brixx and Impact 
post year-end complete the initial steps 
in building our platform; our focus will 
now be on integrating our products 
and services.
Trading Results
The results for the year to 31 March 2015 
reflect a turning point for the Group. 
The year was one characterised by 
corporate activity; the Group made four 
acquisitions, two disposals, appointed 
a Chief Financial Officer and received 
the final payment for the disposal of 
the Redstone ICT business, Comunica 
Holdings Limited.
In September 2014, the Group disposed 
of the trade and certain assets of its 
subsidiary Maxima Information Group 
Limited. This disposal completed the 
Company’s restructuring and paved the 
way to building a “pure play” software 
and IT managed services group of scale, 
without the distractions of a diverse 
strategy. During the year the Group also 
disposed of the consultancy division of 
Montal to its management team, thereby 
enabling Montal to concentrate on its 
portfolio of specialist software solutions.
Castleton can now focus on its strategy 
of building a leading provider of 
software and IT managed services to 
the public and not-for-profit sectors. 
The acquisitions of Montal, Documotive, 
Keylogic and Opus during the year, and 
Impact and Brixx post year-end, reinforce 
this strategy.
The reported revenue for the year from 
continuing operations of £6.1 million and 
adjusted EBITDA * of a loss of £0.1 million 
only reflect a partial year’s trading 
of the companies acquired and the 
results for the following year will look 
markedly different. 
Outlook
Throughout the year we have kept our 
shareholders informed with the excellent 
progress of the initial acquisitions of 
Montal and Documotive and, although 
the acquisitions of Keylogic and Opus 
were very close to the year-end, we 
have also updated the market with 
their progress. We entered the current 
financial year confidently and indeed 
completed our initial acquisition phase 
with the acquisitions of Brixx and Impact 
on 1 June 2015. Almost immediately our 
existing customer base reacted very 
well to the addition of these companies 
and a number of potential deals were 
quickly identified.
The UK IT services market is a very 
interesting space at this time. It is very 
fragmented in nature, which presents the 
type of opportunities we, as the Board 
of Castleton, are looking for. In particular, 
we see the public and not-for-profit 
sectors as attractive markets due to their 
niche requirements and we believe a 
significant opportunity exists to capitalise 
on the ability to address historic under-
investment in IT infrastructure in those 
sectors. Castleton is well positioned to 
provide an eco-system of integrated 
modular solutions supported by 
scalable infrastructure platforms, helping 
organisations operate more effectively 
and achieve their goals, whilst bringing 
visible recurring annuity revenues to 
the Group. The Group brings together 
trusted brands with a pedigree of 
delivering solutions that meet customer 
needs whilst offering a refreshing 
change of culture and approach, 
focusing on customer collaboration using 
modern technology.
The next phase of the strategy will be 
to fully integrate the companies that we 
have acquired and this process is already 
well underway. We will also continue to 
look for strategic acquisitions that will 
add value and complement our existing 
services and products. My role in leading 
the Group is to ensure the successful 
integration of the current companies and 
identify and realise further opportunities. 
I hope to be in a position to share with 
you progress in this area over the 
coming months. The Board is fully aware 
that it needs to support the divisional 
management, providing the necessary 
tools and resource to deliver the value 
from this strategy. 
Ian Smith
Chief Executive
21 September 2015
* Earnings for the year from continuing operations before 
net finance costs, depreciation, amortisation, integration 
and strategic costs, goodwill impairment and share-based 
payment charges. 08 Castleton Technology plc Annual Report 2015
Financial 
Review
The period since the 
last report has been one 
of transformation 
with four acquisitions and two disposals during 
the year and a further two acquisitions shortly 
after the year-end. 
Haywood Chapman
Chief Financial Officer Strategic Report
Governance
Financial Statements
09 Castleton Technology plc Annual Report 2015
I am pleased to present this report 
as Chief Financial Officer, having 
been appointed to the Castleton 
T echnology plc Board on 1 December 
2014. In this report I will cover the results 
for the year ended 31 March 2015 and 
look at the new opportunities that we 
see for the future of the Group.
Principal Events and Overview
The period since the last report has 
been one of transformation with four 
acquisitions and two disposals during 
the year and a further two acquisitions 
shortly after the year-end. 
Acquisitions
On 23 June 2014 the Group acquired 
the entire issued share capital of Montal 
Holdings Limited (“Montal”) for a total 
consideration of £3.83 million payable 
£3.04 million in cash and £0.79 million 
in 8 percent coupon loan notes. The 
£3.04 million cash consideration was 
funded out of existing Group cash 
resources and the Group’s existing 
bankers, Barclays Bank Plc (“Barclays”) 
extended a £0.5 million facility to support 
working capital should the need have 
arisen. Montal specialises in providing 
outsourced IT services to the public 
and not-for-profit sectors, particularly 
within social housing and care providers 
and provides a full suite of outsourced 
services including support, hosting, 
business solutions and consultancy. 
Montal offers a broad range of expertise 
and competencies across Microsoft, 
Citrix, Cisco and VMware. 
On 18 November 2014, the entire 
share capital of Documotive Limited 
(“Documotive”) was acquired for 
£4.0 million, consisting of £3.0 million 
in cash and £1.0 million of zero coupon 
convertible loan notes, convertible at the 
holders’ option. Documotive is a leading 
software supplier to the social housing 
sector. In October 2014, 500,000,000 
new ordinary shares were placed at a 
price of 1.1 pence per share, raising gross 
proceeds of £5.5 million. The proceeds 
of the fundraising were used to fund 
the cash element of the consideration 
for Documotive and to provide working 
capital and funds for further acquisitions.
The Group acquired the entire share 
capital of Opus Information T echnology 
Limited (“Opus”) and Keylogic Limited 
(“Keylogic”) on 28 February 2015 for 
£0.5 million and £4.8 million respectively. 
Keylogic was acquired for £3.4 million 
in cash and £0.6 million in convertible 
loan notes. As part of the completion 
mechanism, in March 2015, further cash 
of £0.6 million was paid and a further 
£0.2 million of convertible loan notes 
issued. The loan notes are repayable 
in 12 months, carry nil coupon and are 
convertible into new ordinary shares in 
Castleton at a price of 2 pence per share 
at the holders’ option. Keylogic provides 
professional IT services to SMEs and 
the social housing sector, ranging 
from complete IT management to 
infrastructure upgrades and general 
consultancy. It has accreditations and 
approvals from leading technology 
vendors including Citrix, VMware, Cisco 
and Microsoft.
The consideration for Opus was paid 
with £0.4 million in cash and £0.1 million 
in convertible loan notes. The loan 
notes are repayable in 12 months, 
carry nil coupon and are convertible 
into new ordinary shares at a price 
of 2 pence per share at the holders’ 
option. In addition, there is a potential 
earn out payment of up to £1.0 million in 
loan notes and cash, should normalised 
EBITDA for the business for the 
12 months to 30 September 2015 exceed 
£0.2 million. Opus provides software 
solutions to the social housing sector, 
from initial scoping to licence sales, 
implementation and software support. 
The principal proprietary software 
breaks down service charges to give a 
detailed account of actual costs against 
budgets, saving time and money in the 
budget-setting process. In addition, 
Opus provides consultancy and support 
services alongside bespoke solutions. 
The acquisitions of Keylogic and Opus 
were financed from the Company’s 
existing cash resources and an overdraft 
facility of up to £1.5 million from Barclays.
At the same time, the Company entered 
into a loan agreement with MXC 
Capital for up to £1.5 million (the “Loan 
Agreement”). Interest is payable on 
amounts drawn down under the Loan 
Agreement at a rate of 10 percent 
per annum, with a commitment fee of 
4 percent payable on amounts undrawn. 
The Loan Agreement has a term of 
18 months and includes an arrangement 
fee of £25,000, payable to MXC Capital. 
Amounts drawn down under the Loan 
Agreement are capable of being 
converted into new ordinary shares at a 
price of 2 pence per share at any time 
at MXC Capital’s option. This facility 
remained undrawn at the year-end but 
has been subsequently drawn post 
year-end to help finance the acquisitions 
of Brixx Solutions Limited (“Brixx”) and 
Impact Applications Limited (“Impact”) 
on 31 May 2015. MXC Capital has since 
converted the £1.5 million outstanding 
under the Loan Agreement into new 
ordinary shares in Castleton.
Brixx is a provider of software enabling 
users to produce financial models and 
long-term forecasts and was acquired 
for a total consideration of £5 million in 
cash, of which £0.5 million is deferred 
for 12 months. Brixx has developed a 
specific solution, HousingBrixx, in order 
to meet the needs of the social housing 
sector and this solution is currently 
used by over 300 UK social housing 
organisations. Organisations using 
Brixx’s software are able to model the 
impact of improved service delivery 
thus enabling further investment. Brixx’s 
broad customer base offers significant 
opportunities to cross-sell Castleton’s 
suite of products and services.
Impact is a provider of business 
critical repairs management software 
and scheduling tools to the social 
housing sector and was acquired for 
consideration of £5.0 million, of which 
£1.67 million was satisfied via the issue 
of new ordinary shares of at a price of 
2.25 pence per share. The remaining 
£3.3 million was paid in cash 
on completion.  10 Castleton Technology plc Annual Report 2015
Gross profit
£3.4m
Revenue
£6.1m
Cash generated from operations
£0.5m
Adjusted EBITDA
(£0.1m)
Gross margin
56%
Financial 
Review continued Strategic Report
Governance
Financial Statements
11 Castleton Technology plc Annual Report 2015
Disposals
On 31 August 2014 the trade and certain 
assets of the Group’s subsidiary Maxima 
Information Group Limited (“MIG”) 
were sold for a total cash consideration 
of £0.75 million. £0.3 million was 
payable immediately, £0.3 million by 
30 September 2014 and the balance 
of £0.15 million by 31 March 2015. 
Castleton retained certain assets and 
liabilities associated with MIG and with 
Castleton having had the benefit of 
collecting circa £200,000 of annual 
maintenance revenues in the year 
ended March 2015, we achieved an exit 
enterprise valuation for the business 
approaching £1 million.
On 28 February 2015, the Group 
entered into an agreement to sell 
the consultancy division of Montal to 
the division’s management team for 
a total consideration of £0.6 million. 
The initial cash consideration receivable 
was £0.28 million with the remaining 
£0.32 million to be paid in 60 monthly 
instalments with interest accruing 
on outstanding amounts at a rate of 
9 percent per annum. The division 
was not considered to be core to the 
business and the disposal will enable 
Montal to concentrate on its portfolio 
of managed services and avoids any 
potential conflicts of interest that might 
have occurred in consulting on potential 
services to be recommended to clients.
Trading Results
The trading results for the year comprise 
five months of discontinued operations 
from MIG, just over nine months of 
trading results from Montal, five months 
of trading results from Documotive and 
one month of results from both Keylogic 
and Opus. It is therefore reasonable to 
say that the results for the year are not 
representative of future years.
Revenue and Gross Profit
Revenue and gross profit derive from 
the entities acquired during the year and 
amounted to £6.1 million and £3.4 million 
respectively, representing a gross margin 
of 56 percent. The revenues and gross 
profit of MIG, which was disposed of 
during the year, are shown in note 7 .
Administrative Expenses including 
Exceptional Items
The administrative expenses from 
continuing activities were incurred in 
the running of the acquired entities, and 
include the cost of the Group Board 
and its advisers, including the cost of 
occupancy, back office support services, 
and the fees associated with maintaining 
the AIM listing as well as amortisation 
and exceptional items. Exceptional items 
of £2.1 million (2014: £nil) include 
costs relating to the acquisitions, the 
fundraising and provisions relating to 
restructuring activities either undertaken 
in the year or announced prior to the end 
of the financial year.
Adjusted EBITDA *
The adjusted EBITDA for the year, 
a loss of £0.1 million (2014 loss of 
£1.0 million) comprises only the 
continuing operations. 
The current run rate full year cost for the 
plc Board and its advisors is £1.0 million, 
and we continue to maintain tight 
controls on expenditure.
Finance Income and Costs
Finance income comprises the fair value 
gain on the interest rate swap held by 
the Group, and finance costs comprise 
interest payable on bank borrowings and 
the unwind of discount on convertible 
loan notes. Finance income and 
costs amounted to £0.6 million and 
£0.7 million respectively.
Loss for the year attributable to 
the owners of the parent company
The Group loss for the year to 31 March 
2015 was £2.1 million (2014: profit of 
£26.4 million). This comprises the loss 
after tax from continuing operations of 
£3.0 million (2014: loss of £1.3 million), 
which includes the gain on the 
interest rate swap and the profit from 
discontinued operations of £0.9 million 
(2014: £27 .6 million). The profit from 
discontinued operations is explained 
in note 7 .
Cash Flow
Cash generated from operations 
during the year was £0.5 million (2014: 
outflow of £2.3 million). £1.0 million 
(2014: £7 .0 million) was received 
on the disposal of operations and 
£8.9 million (2014: £nil) was used in the 
acquisitions undertaken during the year. 
These acquisitions were partly financed 
through the issuance of shares which 
generated cash inflows of £5.7 million 
(2014: £6.0 million).
This resulted in an overall decrease in 
funds of £2.3 million, giving a net cash 
position at the balance sheet date of 
£0.5 million. Since the year-end cash 
of £7 .8 million has been utilised in the 
acquisition of Brixx and Impact, financed 
through a combination of bank debt, 
a draw down under the Loan Agreement 
with MXC Capital and proceeds 
from a further issuance of shares, 
as explained below.
Reporting Metrics
The reporting metrics and Key 
Performance Indicators normally 
reviewed by the Board include the 
income statement categories as outlined 
in this report along with measures 
specific to individual business units and 
divisions and the available resources 
and strength of the balance sheet. 
In summary, the Group results for this 
year are not reflective of where the 
Group is expected to be at the next 
reporting date and further performance 
indicators will be developed relevant to 
the results and activities of the Group in 
the next Half- Y ear and Annual Reports.
*  Adjusted EBITDA represents earnings for the year from 
continuing operations before net finance costs, depreciation, 
amortisation, integration and strategic costs, goodwill 
impairment and share-based payment charges. 12 Castleton Technology plc Annual Report 2015
Financial 
Review continued
Funding
At the balance sheet date the Group 
held £1.8 million of convertible loan 
notes that were issued as part of the 
acquisitions of Documotive, Keylogic 
and Opus. In addition, the Group had 
a £1.5 million overdraft facility available 
and a £1.5 million convertible loan 
facility available from MXC Capital as 
noted above.
As at the balance sheet date the Group 
continues to service the interest rate 
swap until it matures in September 2015. 
The liability for the interest rate swap as 
recorded in these financial statements 
is £0.3 million and is cash settled on a 
quarterly basis. The final payment in 
relation to the interest rate swap will be 
made on 30 September 2015.
Post year-end, the Group took out a 
£5.0 million term loan with Barclays to 
help fund the acquisitions of Brixx and 
Impact and increased the overdraft 
facility to £2.0 million. The term loan 
is secured with a fixed and floating 
charge over the entities in the Group 
and is repayable over five years at 
£0.25 million per quarter. At the same 
time, the Company also drew down 
£1.5 million under its loan agreement 
with MXC Capital. Subsequently, in 
June 2015, amounts due under the loan 
agreement were converted by MXC 
Capital into new ordinary shares at 
2 pence per share simultaneously with 
an oversubscribed equity placing raising 
£2.2 million (before expenses) for the 
Company by the issuance of 97 ,777 ,776 
new ordinary shares, at 2.25 pence per 
share, to help fund the acquisitions of 
Brixx and Impact and to strengthen the 
Company’s balance sheet. In addition, 
the £1.0 million of loan notes issued to 
the vendors of Documotive at the time 
of the Documotive acquisition were also 
converted into new ordinary shares at 
1.1 pence per share.
The Company also entered into a further 
loan facility with MXC Capital to provide 
up to £1.0 million. Interest is payable on 
amounts drawn down under the facility 
at a rate of 10 percent per annum, with a 
commitment fee of 4 percent payable on 
amounts undrawn. The facility has a term 
of six months. 
Going Concern
The Directors have prepared detailed 
cash flow projections including 
sensitivity analysis on key assumptions. 
The Group’s forecasts and projections, 
taking account of reasonably possible 
changes in trading performance and 
the timing of key strategic events, show 
the Group will be able to operate within 
the level and conditions of available 
funding. Based on the level of support 
demonstrated by the oversubscribed 
equity placing on 30 June and the 
funding available, the Directors have 
a reasonable expectation that the 
Group has adequate resources to 
continue in operational existence for 
the foreseeable future. 
Accordingly, the Group continues 
to adopt the going concern basis 
in preparing its consolidated 
financial statements.
Haywood Chapman 
Chief Financial Officer
21 September 2015 Strategic Report
Governance
Financial Statements
13 Castleton Technology plc Annual Report 2015
Strategic  
Report
The Directors present their strategic 
report for the year ended 31 March 2015.
Review of the Business
A detailed review of the business is set 
out in the Chairman’s Statement and 
in the Chief Executive’s and Financial 
Reviews. Included in these reviews are 
comments on the key performance 
indicators that are used by the Board 
on a monthly basis to monitor and 
assess the performance of the business. 
These indicators include the level 
of turnover, gross profit, gross profit 
percentage, adjusted EBITDA * and costs.
The consolidated statement of 
comprehensive income shows the Group 
loss for the year was £2.1 million (2014: 
profit of £26.4 million). 
Future Developments
Future developments and current 
trading and prospects are set out in the 
Chairman’s Statement and in the Chief 
Executive’s and Financial reviews.
Principal Risks and Uncertainties
Identifying, evaluating and managing 
the principal risks and uncertainties 
facing the Group is an integral part of the 
way we do business. We have policies 
and procedures in place throughout 
our operations that enable us to do so, 
embedded within our management 
structure and as part of our normal 
operating processes. 
Market and economic conditions are 
recognised as one of the principal risks in 
the current trading environment. This risk 
is mitigated by the monitoring of trading 
conditions and the constant search for 
ways to achieve new efficiencies in the 
businesses without impacting levels 
of service. 
Reliance on key personnel and 
management
The success of the Group will be 
dependent on the services of key 
management and operating personnel. 
The Directors believe that the Group’s 
future success will depend largely on its 
ability to retain and attract highly skilled 
and qualified personnel, and to expand, 
train and manage its employee base. 
There can be no guarantee that suitably 
skilled and qualified individuals will be 
retained or identified and employed. 
If the Group fails to retain or recruit 
the necessary personnel, or if the 
Group loses the services of any of its 
key executives, its business could be 
materially and adversely affected.
Competition risk
The Group operates in a highly 
competitive IT product, software and 
services marketplace and while the 
Directors believe the Group enjoys 
significant strengths and advantages 
in competing for business some of 
the competitors are much larger with 
considerable scale that could allow them 
to offer similar services for materially 
lower prices than the Group could 
match while maintaining a margin in 
the range targeted by the management 
of the Group. Therefore competitors 
could materially adversely impact both 
the scale of the Group’s revenues and 
its profitability.
Technology
The market for Castleton’s services is 
in a state of constant innovation and 
change. The Group actively participates 
in a number of industry-wide forums, 
and devotes significant resource to 
the development of new products and 
services, ensuring new technologies can 
be incorporated and integrated with the 
Group’s core services.
Post-acquisition integration risk, and 
risks of an acquisition strategy
The Company may not be able to fully 
achieve its strategic objectives and 
operating efficiencies in an acquisition. 
Inherent uncertainties exist in integrating 
the operations of an acquired entity. 
In addition, the markets and industries 
in which the Company and its potential 
acquisition targets operate, are highly 
competitive. The Company may lose 
existing customers or the customers 
of an acquired entity as a result of its 
acquisition. The Company also may 
lose key personnel, either from the 
acquired entity or from itself, as a 
result of an acquisition. These factors 
could contribute to the Company not 
achieving the expected benefits from its 
acquisitions within desired time frames, 
if at all. Future business acquisitions 
could be material to the Company and 
it may issue additional equity to pay 
for those acquisitions, which would 
dilute current shareholders’ ownership 
interest. Acquisitions could also require 
the Company to use substantial cash 
or other liquid assets or to incur debt. 
In such a case, it could become more 
susceptible to economic downturns and 
competitive pressures.
Financial Instruments
The Group’s financial instruments 
primarily comprise borrowings, loan 
notes and cash balances. In addition, 
various other financial instruments such 
as trade receivables and payables arise 
directly from its operations. Historically, 
in order to hedge against fluctuating 
interest rates on previous borrowings 
the Group entered into an interest rate 
swap agreement with Barclays Capital. 
The terms of this agreement are that 
the interest on a reducing notional 
principal is capped once the LIBOR rate 
reaches 6.5 percent. If LIBOR falls below 
4.89 percent, the interest rate rises on a 
one-for-one basis for each incremental 
fall, up to a maximum of 6.5 percent. 
The notional principal as at 31 March 
2015 was £10 million (2014: £10.0 million).
In the current year the Group incurred 
a £0.6 million cash outflow as a result 
of this hedge (2014: £0.6 million), and 
recorded a fair value gain of £0.6 million 
(2014: £0.6 million) in the Income 
Statement. As at 31 March 2015 the 
consolidated balance sheet includes a 
liability of £0.3 million (2014: £0.85 million) 
for the interest rate swap, stated at 
fair value.
Further details of the Group’s risks and 
policies regarding financial instruments 
are set out in note 23.
Jenny Y oung 
Company Secretary
On behalf of the Board 
21 September 2015
Registered Office:  
100 Fetter Lane 
London 
EC4A 1BN
* Earnings for the year from continuing operations before 
net finance costs, depreciation, amortisation, integration 
and strategic costs, goodwill impairment and share-based 
payment charges. 14 Castleton Technology plc Annual Report 2015
Board 
of Directors
Executive Directors
Ian Smith
Chief Executive Officer
A highly experienced IT and 
communications industry developer of 
new business, Ian has held senior sales 
positions with Dataworkforce, Cisco 
Systems, Foundry Networks and  
Cable & Wireless.
Most recently, for seven years as CEO 
of Xploite plc, Ian was responsible for 
the buy, build and sell strategy that saw 
26 corporate transactions including two 
substantial disposals and the creation 
and return of c£20 million of cash to the 
company’s shareholders.
Non-Executive Directors
David Payne
Non-Executive Chairman
David Payne is Chair of the 
Remuneration Committee and a member 
of the Audit and Nomination Committees 
of the Board of Directors.
David Payne has a varied background 
in the leisure, computer and property 
industries. For 20 years after leaving 
university he worked for Juliana’s, a 
leisure company that floated on the 
London Stock Exchange in 1983.
He was subsequently recruited, by 
a venture capital fund, to become 
Chairman of Virtuality, a company at the 
forefront of developing virtual reality.
He oversaw the successful flotation 
of this company on the LSE in 1994 
and then left to devote more time 
to the development of a quoted 
property company.
Haywood Chapman
Chief Financial Officer
Haywood Chapman joined Castleton 
on 1 December 2014. He has significant 
technology sector expertise in quoted 
and private equity backed companies. 
Prior to Castleton, Haywood held a 
number of senior finance positions at 
Northgate Information Solutions, Infinity 
SDC and Avnet Inc. Haywood is a 
Chartered Accountant, having trained 
at PwC, and gained M&A experience in 
their Transaction Services team.
Davinder Sanghera
Chief Operating Officer
Davinder joined Castleton in November 
2014 at the time of its acquisition of 
Documotive Limited (“Documotive”), 
where she was Sales Director. 
Davinder joined Documotive in its 
formative year and was instrumental 
in driving product development and 
sales strategy within the business. 
Davinder has 23 years’ experience 
within the social housing sector and 
over 12 years’ specific experience in 
selling Housing Management and 
Finance software solutions. Prior to 
Documotive, Davinder worked with 
various organisations within the social 
housing sector, holding front-line housing 
management positions at Housing 21 and 
Bromford Housing Group.
Phil Kelly
Non-Executive Director
Phil brings a thirty year track record of 
leading successful companies within the 
technology sector, having worked with 
both quoted and private equity backed 
businesses. Phil sits on both the Audit 
and Remuneration committees. 15 Castleton Technology plc Annual Report 2015
Strategic Report
Governance
Financial Statements
Advisers
Company Secretary
Jenny Y oung
Registered Office
100, Fetter Lane 
London 
EC4A 1BN
Financial Adviser and Broker
finnCap Limited, 
60 New Broad Street,  
London EC2M 1JJ
Independent Auditors
Baker Tilly UK Audit LLP , 
Portland, 25 High Street,  
Crawley, West Sussex, RH10 1BG
Solicitors
Beachcroft, 
100 Fetter Lane,  
London EC4A 1BN
Registrars
Capita Registrars, 
Northern House,  
Woodsome Park,  
Fenay Bridge, 
Huddersfield,  
West Y orkshire, HD8 0GA
Principal Bankers
Barclays Bank plc, 
54 Lombard Street,  
London EC3V 9EX
Company Number
3336134
Further details can be found  
on the Castleton T echnology  
website at the following address: 
www.castletonplc.com 16 Castleton Technology plc Annual Report 2015
Corporate Governance 
Statement
As an AIM listed company Castleton T echnology plc (Castleton) is not required to comply with the principles and provisions of the 
2012 UK Corporate Governance Code. The Directors have decided to adopt the Corporate Governance Code for small and mid-
sized quoted companies, as published by the Quoted Companies Alliance, and have sought to meet its recommendations in so 
far as it considers them appropriate for a company of Castleton’s size and nature.
The Board of Directors
At the financial year-end the Board comprised the Non-Executive Chairman (David Payne), the Chief Executive Officer (Ian Smith), 
the Chief Financial Officer (Haywood Chapman) and one non-executive Director (Phil Kelly). 
Richard Ramsay stood down as non-executive Director on 1 October 2014 having successfully presided over the restructuring of 
Redstone and subsequent demerger of Redcentric plc. On 31 December 2014, T ony Weaver stepped down from the Board as 
non-executive Director. T ony has held a main Board position since 2010, during which time the Group has been through significant 
change. Phil Kelly joined the Board as Senior Independent non-executive Director on 1 October 2014. Spencer Dredge stood 
down from the Board on 1 December 2014 and was replaced by Haywood Chapman, who was appointed Chief Financial Officer 
on 1 December 2014. Post year-end in April 2015, Davinder Sanghera was appointed to the Board as Chief Operating Officer.
The business and management of the Company and its subsidiaries are the collective responsibility of the Board. At each meeting, 
the Board considers and reviews the trading performance of the Group. The Board has a formal written schedule of matters 
reserved for its review and approval. These include the approval of the annual budget, major capital expenditure, investment 
proposals, the interim and annual results, and a review of the overall system of internal control and risk management.
There are three standing Board Committees: Audit, Nominations and Remuneration. Each of these Committees acts within defined 
terms of reference. Additional information is set out later in this report and also in the Directors’ Remuneration Report in respect of 
the Remuneration Committee.
Authority for the execution of the approved policies, business plan and daily running of the business is delegated to the executive 
Directors. During the year, the Board met formally on 12 occasions and there were no absences from any meetings.
Phil Kelly is the Senior Independent non-executive Director and served from 1 October 2014. Prior to this date, Richard Ramsay 
was the Senior Independent non-executive Director.
The Company’s Articles of Association require one-third of the Directors to stand for re-election each year at the Annual General 
Meeting and that each Director should seek re-election every three years. In addition, Directors appointed by the Board during the 
year must seek re-appointment at the next Annual General Meeting. Accordingly Haywood Chapman, Ian Smith and Phil Kelly will 
retire and offer themselves for re-election at the forthcoming Annual General Meeting.
All Directors have access to the advice and services of the Company Secretary who is responsible for ensuring that Board 
procedures and applicable rules and regulations are observed. The Board has a procedure whereby any Director may seek, 
through the office of the Company Secretary, independent professional advice, at the Company’s expense, in furtherance of 
his duties.
Formal agendas and reports are provided to the Board on a timely basis for Board and Committee meetings and the Chairman 
ensures that all Directors are properly briefed on issues to be discussed at Board meetings. Directors are able to obtain further 
advice or seek clarity on issues raised at the meetings from within the Company or from external sources.
All Directors are subject to appraisal by the Board. The non-executive Director is responsible for the evaluation of the Chairman.
Nominations Committee
The Nominations Committee consisted of David Payne (Chairman) and Richard Ramsay until 1 October 2014. From 1 October 2014 
Phil Kelly replaced Richard Ramsay.
For nominations, the Committee meets as and when necessary to consider the appointment of new executive and non-
executive Directors.
A process is in place for the appointment of new Directors involving the use of external consultants, where appropriate, followed 
by meetings with both the Committee and subsequently with the Board as a whole, together with the Company Secretary. 
This ensures that the selection process is both formal and objective. The Committee has formal terms of reference (available on 
request from the Company Secretary) and meets at least once a year to review succession planning at both Board and senior 
management level across the Group.
During the year, the Committee met formally on two occasions and there were no absences from the meetings.
Remuneration Committee
The Remuneration Committee consisted of David Payne (Chairman) and Richard Ramsay until 1 October 2014. From 1 October 
2014 Phil Kelly replaced Richard Ramsay.
Details of the Committee and its policies are set out in the Directors’ Remuneration Report. 
The Committee has formal terms of reference (available on request from the Company Secretary).
During the year, the Committee met formally on four occasions. There were no absences from the formal meetings. 17 Castleton Technology plc Annual Report 2015
Strategic Report
Governance
Financial Statements
Audit Committee
The Audit Committee consisted of Richard Ramsey (Chairman) until 1 October 2014 and David Payne. From 1 October 2014, 
Phil Kelly replaced Richard Ramsay.
The Committee has formal terms of reference (available on request from the Company Secretary). These include the 
recommendation, appointment, re-appointment and removal of the external auditors, the review of the scope and results of the 
interim review and external annual audit by the auditors, their cost effectiveness, independence and objectivity. The Committee 
also reviews the nature and extent of any non-audit services provided by the external auditors. In addition, the Committee reviews 
the effectiveness of internal controls, considers the need for an internal audit function and considers any major accounting 
issues and reports on such matters to the Board. The Committee reviews the integrity of the financial statements and formal 
announcements. A whistle-blowing arrangement exists whereby matters can be confidentially reported to the Committee. 
The executive Directors are not members of the Committee but attend the meetings by invitation, as necessary, to facilitate 
its business.
The Chief Financial Officer monitors the level and nature of non-audit services and specific assignments are flagged for approval 
by the Audit Committee as appropriate. The Audit Committee reviews non-audit fees and considers implications for the objectivity 
and independence of the relationship with the external auditors.
The Board is satisfied that the Chairman of the Audit Committee has recent and relevant financial experience.
The Committee met on two occasions during the year and there were no absences from the meetings.
Internal control
The Board has overall responsibility for the Group’s system of internal control and for reviewing its effectiveness. 
The implementation and maintenance of the risk management and internal control systems are the responsibility of the executive 
Directors and senior management. The internal control system is designed to manage risk rather than eliminate it and can 
therefore only provide reasonable and not absolute assurance against material misstatement or loss. In accordance with the 
guidance set out in the Turnbull Guidance on Internal Control, the Group has an on-going process for identifying, evaluating and 
managing the significant risks faced by it. 
The Group is committed to maintaining high standards of business conduct and operates under an established internal control 
framework covering financial, operational and compliance controls. This is achieved through an organisational structure 
that has clear reporting lines and delegated authorities. The reporting lines and delegated authorities are clearly defined. 
Management monitors the risk and performance of the Group. In addition, the Group maintains written processes to control 
expenditure, authorisation limits, purchase ordering, sales order intake, project management, inventories and assets to the extent 
applicable given the changes in the Group’s activities during the year.
The Board receives monthly financial information which includes key performance and risk indicators and the Chief Executive 
Officer reports on significant changes in the business and the external marketplace to the extent they represent significant risk. 
There is an established budgetary system with an annual budget approved by the Board. The Board reviews the results monthly 
against budget and forecasts together with other business measures.
The principal treasury related risks are documented and approved by the Board. Details of derivatives and financial instruments 
are set out in notes 21 and 22 to the financial statements.
Relations with shareholders and investors
Copies of the Annual Report and Accounts are issued to all shareholders and copies are available on the Group’s website 
www.castletonplc.com. The Half Y ear Report is also available on the Group’s website. The Group makes full use of its website to 
provide information to shareholders and other interested parties. The Company Secretary also deals with a number of written or 
e-mailed enquiries throughout the year.
Shareholders are given the opportunity to raise questions at the Annual General Meeting and the Directors are available both prior 
to and after the meeting for further discussion with shareholders.
During the year, the Chief Executive Officer and the Chief Financial Officer met with institutional investors after the announcement 
of the interim and year-end results. Additional meetings were arranged during the year by the Group’s brokers, finnCap Limited. 
Feedback arising from these meetings was communicated to the Board and the Company Secretary also reported to the Board 
on feedback from shareholders.
Phil Kelly, as Senior Independent non-executive Director, is available to shareholders if they wish to raise any matters that contact 
through the normal channels of Non-Executive Chairman, Chief Executive Officer, Chief Financial Officer or Company Secretary 
has failed to resolve or for which such contact is inappropriate.
Phil Kelly
Chairman, Audit Committee
21 September 2015 18 Castleton Technology plc Annual Report 2015
Directors’ Remuneration  
Report
Remuneration Committee
The Remuneration Committee comprised David Payne (Chairman) and Richard Ramsay until 1 October 2014. From 1 October 2014, 
Phil Kelly replaced Richard Ramsay.
The Committee makes recommendations to the Board, within agreed terms of reference, on the remuneration and other benefits, 
including bonuses and share options, of the executive Directors.
In considering the remuneration for the year, the Committee consulted with the executive Directors about its proposals. The Board 
sets the fees payable to the non-executive Directors.
Remuneration policy
The Remuneration Committee is aware that the remuneration package should be sufficiently competitive to attract, retain and 
motivate individuals capable of achieving the Group’s objectives and thereby enhancing shareholder value.
Basic salary and benefits
Basic salaries are reviewed on a discretionary basis.
Performance related bonus
The Remuneration Committee determines the criteria for the award of performance bonuses for the executive Directors in 
advance of each year. The bonuses are non-pensionable. Non-executive Directors do not receive a bonus.
Fees
The Board, within the limits stipulated by the Articles of Association and following recommendation by the executive Directors, 
determines non-executive Directors’ fees. The fees were £30,000 for non-executive Directors, and £30,000 for the Chairman, 
including, in both cases a fee of £5,000 for chairing a Board Committee. 
Service contracts
The Company’s policy is for all executive Directors to have service contracts with provision for termination of no more than 
12 months’ notice.
Non-executive Directors have letters of appointment. Appointments can be terminated by the Company giving six months’ notice 
or the individual giving one month’s notice. The remuneration of the non-executive Directors takes the form solely of fees which 
are not pensionable.
The details of the executive and non-executive Directors’ service contracts are summarised below:
Date of contract Notice period (months)
Executive Directors 
Ian Smith 8 September 2010 1
Haywood Chapman 1 December 2014 6
Non-executive Directors 
David Payne 23 July 2001 6
Phil Kelly 1 October 2014 6
The service contracts continue until notice on either side is given.
Haywood Chapman, Phil Kelly and Ian Smith retire in line with the terms of the articles of the Company, and being eligible, offer 
themselves for re-election at the forthcoming Annual General Meeting.  19 Castleton Technology plc Annual Report 2015
Strategic Report
Governance
Financial Statements
Directors’ remuneration
Basic salary, 
allowances and fees 
£000
Bonus
£000
Benefits
£000
2015 T otal 
£000
2014 T otal 
£000
Executive 
Peter Hallett – – – – 59
Spencer Dredge 63 – – 63 7
Ian Smith 179 – – 179 187
Haywood Chapman 43 – – 43 –
Non-executive 
T ony Weaver – – – – –
Richard Ramsay 5 – – 5 28
David Payne 27 – – 27 28
Phil Kelly 15 – – 15 –
332 – – 332 309
Share options
Exercise price 
Pence
At 1 April 
2014 
Number
Forfeited during 
the year 
Number
Transferred 
during the year 
Number 
At 31 March 
2015 
Number
Peter Hallett 0.8 6,875,000 (6,875,000) – –
0.8 8,464,944 (8,464,944) – –
Ian Smith (a) 0.8 8,464,944 – (8,464,944) –
T ony Weaver (a) 0.8 8,464,944 – (8,464,944) –
MXC Holdings Limited (b) 0.8 – – 16,928,888 16,928,888
(a)  The options were granted on 9 September 2010 and are exercisable as follows: 
2,821,648 on the earlier of the 9 September 2013 or the achievement of the performance conditions; 5,643,296 on the 
achievement of the performance conditions.
(b)  On 30 October 2014, the options granted to Ian Smith and T ony Weaver were transferred to MXC Holdings Limited 
Options (a) were granted under the Company’s Unapproved Share Option Scheme.
On 18 July 2015 options were awarded as follows:
Options over 2 percent of the fully diluted share capital to Haywood Chapman under a combination of EMI Share Options, 
Unapproved Share Options and Employee Share Scheme Options;
Options over 1 percent of the fully diluted share capital to Davinder Sanghera under a combination of EMI Share Options, 
Unapproved Share Options and Employee Share Scheme Options;
Options over 0.4 percent of the fully diluted share capital to David Payne under a combination of Unapproved Share Options and 
Hurdle Shares;
Options over 0.2 percent of the fully diluted share capital to Phil Kelly under a combination of Unapproved Share Options and 
Hurdle Shares; 
All of the Options are evergreen, meaning that the percentage of the fully diluted issued share capital held under option will 
remain constant, notwithstanding any further issues of ordinary shares in the capital of the Company. The options are being 
awarded under a variety of schemes, both approved and unapproved. All of the options are subject to vesting criteria whereby the 
average price of an ordinary share must exceed 3 pence, and in some cases 4 pence, for a ten day period between the second 
and third anniversaries of 1 April 2015. If these targets are not met, extended targets compounding at 12 percent per annum are in 
place between the third and sixth anniversaries. 
If the average price of an ordinary share does not reach or exceed the targets above then the Option shall lapse. 
Share price
The market price of the Company’s shares on 31 March 2015 was 2.18 pence per share. The highest and lowest market prices 
during the year were 2.60 pence and 0.83 pence respectively. 
David Payne
Chairman, Remuneration Committee
On behalf of the Board
21 September 2015 20 Castleton Technology plc Annual Report 2015
Directors’  
Report
The Directors present their report together with the audited financial statements for the year ended 31 March 2015.
Principal activity
The principal activity of the Group during the year was the provision of software and managed services to the Public and  
not-for-profit sectors, predominately the social housing sector. The Company is an investment holding company.
Review of the year and future developments
The review of the year and the Directors’ strategy and objectives for the future are set out in the Strategic Report.
Dividends
The Company did not pay a dividend during the year. The Directors do not recommend the payment of a dividend (2014: nil).
Subsequent events
On 1 June 2015, Castleton announced the acquisition of the entire issued share capital of Brixx Solutions Limited (“Brixx”) and 
Impact Applications Limited (“Impact”). Further details can be found in note 29 to these financial statements.
On 18 July 2015 options over 8.6 percent of the fully diluted share capital were awarded to management and MXC. Further details 
are given in note 29 to these financial statements.
Directors
As at 31 March 2015 the Directors and their beneficial interests and those of their families in the share capital of the Company were 
as follows:
31 March 
2015 
Number of ordinary 
shares of 0. 1p
31 March 
2014 
Number of ordinary 
shares of 0.1p
Ian Smith (note a) 160,866,080 160,866,080
David Payne 1,006,250 1,006,250
Haywood Chapman – –
Richard Ramsay – 435,150
Spencer Dredge – 788,909
Note (a) – these shares are in the name of MXC Capital Limited, a company in which Ian Smith has a controlling interest. 
On 29 October 2014, MXC Capital was granted a warrant over 5 percent of the issued share capital. In addition, Colin Sales, then 
Managing Director of Montal, was granted a warrant over 1 percent of share capital. Both warrants are exercisable at 1.1 pence per 
share and are exercisable over a three year period, a third per annum, with 50 percent of the warrants exercisable in any year 
becoming exercisable immediately and the remaining 50 percent of the warrants only becoming exercisable on the achievement 
of 12 percent compound growth in each year in the Company’s share price above 1.1 pence per share. The warrant granted to 
MXC was replaced by options over 5 percent of the fully diluted share capital under the MXC Share Option Scheme granted on 
18 July 2015 as detailed in note 29 to these financial statements.
Details of the Directors’ contracts, remuneration and share options granted are set out in the Directors’ Remuneration Report.
As permitted by the Articles of Association, the Directors have the benefit of an indemnity which is a qualifying third party 
indemnity provision as defined by Section 234 of the Companies Act 2006. The indemnity was in force throughout the last 
financial year and is currently in force. The Company also purchased and maintained throughout the financial year Directors’ and 
Officers’ liability insurance in respect of itself and its Directors.
On 9 April 2015, Davinder Sanghera was appointed to the Board of Directors as Chief Operating Officer.
Staff policy
The Group’s employment policies are designed to ensure that they meet the statutory, social and market practices in the UK 
where the Group operates. The Group systematically provides employees with information on matters of concern to them, 
consulting them or their representatives regularly, so that their views can be taken into account when making decisions that are 
likely to affect their interests. Employee involvement in the Group is encouraged, as achieving a common awareness on the part 
of all employees of the financial and economic factors affecting the Group plays a major role in maintaining its relationship with 
its staff. 21 Castleton Technology plc Annual Report 2015
Strategic Report
Governance
Financial Statements
The Group is committed to employment policies, which follow best practice based on equal opportunities for all employees, 
irrespective of sex, race, colour, disability or marital status. The Group gives full and fair consideration to applications for 
employment for disabled persons, having regard to their particular aptitudes and abilities. Appropriate arrangements are made 
for the continued employment and training, career development and promotion of disabled persons employed by the Group. 
If members of staff become disabled the Group continues employment, either in the same or an alternative position, with 
appropriate retraining being given if necessary.
Annual General Meeting
The Annual General Meeting will be held at the offices of DAC Beachcroft LLP , 100 Fetter Lane, London EC4A 1BN at 2.00 pm on 
22 October 2015 to conduct all mandatory business.
A resolution is to be proposed at the forthcoming AGM for the re-appointment of Baker Tilly UK Audit LLP as auditor of the 
Company, at a rate of remuneration to be determined by the Audit Committee.
Disclosure of information to auditors
The Directors who were members of the Board at the time of approving the Directors’ Report are listed on page 14. Having made 
enquiries of fellow Directors, each of these Directors confirms that:
• T o the best of each Director’s knowledge and belief, there is no information relevant to the preparation of their report of which 
the Group’s auditors are unaware; and
• Each Director has taken all the steps a Director might reasonably be expected to have taken to be aware of relevant audit 
information and to establish that the Group’s auditors are aware of that information.
Jenny Y oung 
Company Secretary
On behalf of the Board
21 September 2015
Registered Office:  
100 Fetter Lane 
London 
EC4A 1BN 22 Castleton Technology plc Annual Report 2015
Statement of Directors’ 
Responsibilities
The Directors are responsible for preparing the Strategic Report and the Directors’ Report and the financial statements in 
accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and Company financial statements for each financial year. The Directors 
are required by the AIM Rules of the London Stock Exchange to prepare the Group financial statements in accordance with 
International Financial Reporting Standards (IFRSs) as adopted by the European Union, and have elected under company law to 
prepare the parent company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice 
(United Kingdom Accounting Standards and applicable law).
The Group financial statements are required by law and IFRS adopted by the EU to present fairly the financial position and 
performance of the Group; the Companies Act 2006 provides in relation to such financial statements that references in the 
relevant part of that Act to financial statements giving a true and fair view are references to their achieving a fair presentation.
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair 
view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period.
In preparing each of the Group and Company financial statements, the Directors are required to:
• Select suitable accounting policies and then apply them consistently;
• Make judgements and accounting estimates that are reasonable and prudent;
• State whether IFRSs as adopted by the European Union and applicable UK Accounting Standards have been followed, subject 
to any material departures disclosed and explained in the Group and parent company financial statements respectively; and
• Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the 
Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s 
and the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and 
the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also 
responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention 
and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the Company’s website. Legislation in the United Kingdom 
governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
By order of the Board
Jenny Y oung
Company Secretary
21 September 2015
Registered Office:  
100 Fetter Lane 
London 
EC4A 1BN 23 Castleton Technology plc Annual Report 2015
Strategic Report
Governance
Financial Statements
Independent Auditor’s Report to the 
Members of Castleton T echnology plc
We have audited the Group and parent company financial statements (“the financial statements”) on pages 24 to 58. The financial 
reporting framework that has been applied in the preparation of the Group financial statements is applicable law and International 
Financial Reporting Standards (IFRSs) as adopted by the European Union. The financial reporting framework that has been applied 
in the preparation of the parent company financial statements is applicable law and United Kingdom Accounting Standards 
(United Kingdom Generally Accepted Accounting Practice). 
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 
2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to 
state to them in an auditor’s report and for no other purpose. T o the fullest extent permitted by law, we do not accept or assume 
responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for 
the opinions we have formed.
Respective responsibilities of Directors and auditor
As more fully explained in the Directors’ Responsibilities Statement set out on page 22, the Directors are responsible for the 
preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and 
express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and 
Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the Financial Reporting Council’s website at 
http://www.frc.org.uk/auditscopeukprivate.
Opinion on financial statements
In our opinion: 
• The financial statements give a true and fair view of the state of the Group’s and of the parent company’s affairs as at 31 March 
2015 and of the Group’s loss for the year then ended;
• The Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union; 
• The parent company financial statements have been properly prepared in accordance with United Kingdom Generally 
Accepted Accounting Practice; and
• The financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial 
statements are prepared is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in 
our opinion:
• Adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been 
received from branches not visited by us; or
• The parent company financial statements are not in agreement with the accounting records and returns; or
• Certain disclosures of Directors’ remuneration specified by law are not made; or
• We have not received all the information and explanations we require for our audit. 
Geoff Wightwick BA FCA (Senior Statutory Auditor)
For and on behalf of BAKER TILL Y UK AUDIT LLP ,  
Statutory Auditor 
Chartered Accountants
Portland 
25 High Street 
Crawley 
West Sussex
RH10 1BG
21 September 2015 24 Castleton Technology plc Annual Report 2015
Consolidated Statement of Comprehensive Income
for the year ended 31 March 2015
Continuing operations Note
Y ear 
ended  
31 March  
2015 
£000
Y ear 
ended 
31 March 
2014 
£000
Revenue 6,053 –
Cost of Sales (2,689) –
Gross Profit 3,364 –
Administrative expenses (6,275) (1,099)
Adjusted EBITDA * (84) (1,040)
Exceptional Items 5 (2,087) –
Depreciation (84) –
Amortisation (644) –
Charges for share-based payments (12) (59)
Operating loss (2,911) (1,099)
Finance income 8 558 633
Finance costs 8 (705) (785)
Loss on ordinary activities before taxation (3,058) (1,251)
Income tax 10 118 –
Loss for the year from continuing operations attributable to owners of the 
parent company (2,940) (1,251)
Profit for the year from Discontinued Operations attributable to owners of the parent 
company 7 869 27,640
(Loss)/profit for the year attributable to owners of the parent company (2,071) 26,389
Earnings/(loss) per share 11
Basic loss per share from continuing activities (0.36p) (0.20p)
Basic profit per share from discontinued activities 0.12p 4.44p
T otal basic (loss)/profit per share (0.24p) 4.24p
Diluted loss per share from continuing activities (0.36p) (0.20p)
Diluted profit per share from discontinued activities 0.12p 4.44p
T otal diluted (loss)/profit per share (0.24p) 4.24p
* T otal result for the year from Continuing Operations before net finance costs, tax, depreciation, amortisation, exceptional costs, goodwill impairment and share-based payment charges
The notes on pages 28 – 53 are an integral part of these financial statements 25 Castleton Technology plc Annual Report 2015
Strategic Report
Governance
Financial Statements
Consolidated Balance Sheet
as at 31 March 2015
Note
 31 March  
2015 
£000
31 March 
2014 
£000
Assets
Non-current assets
Intangible assets 12 17,899 –
Property, plant and equipment 13 527 –
Trade and other receivables 14 323 –
18,749 –
Current assets
Inventories 42 –
Trade and other receivables 14 4,113 2,618
Assets held for sale/distribution 15 – 827
Cash and cash equivalents 16 526 2,785
4,681 6,230
T otal assets 23,430 6,230
Equity and liabilities
Equity attributable to owners of the parent
Share capital 24 1,206 674
Share premium account 10,689 5,925
Equity reserve 1,423 –
Other reserves 7,966 7,966
Accumulated loss (13,763) (11,704)
T otal equity attributable to the owners of the parent 7,521 2,861
Liabilities
Current liabilities
Derivative financial instruments 22 298 569
Trade and other payables 17 7,755 2,358
Finance leases 20 31 –
Borrowings 20 1,832 –
Provisions 19 286 –
Liabilities held for sale/distribution 15 – 157
10,202 3,084
Non-current liabilities
Deferred income 2,364 –
Derivative financial instruments 22 – 285
Borrowings 20 110 –
Finance leases 20 24 –
Provisions 19 731 –
Deferred taxation liabilities 10 2,478 –
5,707 285
T otal liabilities 15,909 3,369
T otal equity and liabilities 23,430 6,230
The notes on pages 28 – 53 are an integral part of these financial statements. The financial statements on pages 24 – 53 were 
approved by the Board and authorised for issue on 21 September 2015 and are signed on its behalf by: 
Haywood Chapman   Ian Smith 
Director   Director 26 Castleton Technology plc Annual Report 2015
Consolidated Statement of Changes in Equity
for the year ended 31 March 2015
Attributable to owners of the parent
Called up  
share  
capital 
£000
Share  
premium  
account 
£000
Equity 
reserve (a)
£000
Merger  
reserve (b) 
£000
Translation  
reserve (c) 
£000
Revaluation  
reserve 
£000
Retained  
earnings/
(Accumulated  
loss) 
£000
T otal  
equity 
£000
At 1 April 2013 599 – – 7,966 (644) 5,795 9,964 23,680
Profit for the period 26,389 26,389
Transfer (c) 644 (644) –
Revaluation reserve realised on 
demerger (5,795) 5,795 –
Transactions with owners:
Share-based payments 117 117
Share Issue 75 5,925 6,000
Dividend in Specie (d) (53,325) (53,325)
At 1 April 2014 674 5,925 – 7,966 – – (11,704) 2,861
(Loss) for the period (2,071) (2,071)
Share-based payments 12 12
Convertible loan notes issued 1,053 1,053
Warrants issued (370) 370 –
Share issue 532 5,134 5,666
At 31 March 2015 1,206 10,689 1,423 7,966 – – (13,763) 7,521
(a) Equity reserve
Firstly, three convertible loan notes were issued during the year as part of the consideration for the acquisitions of Documotive 
Limited, Keylogic Limited and Opus Information T echnology Limited. The fair value of the equity components of the convertible 
loan notes are based on a Black Scholes option pricing model under standard option pricing assumptions.
Secondly, in addition, on 29 October 2014, in acknowledgement of being the Cornerstone Placee in the Group’s share issue, 
57 .8 million share warrants were issued to MXC Capital Plc. The fair value of the warrants is calculated using a Monte Carlo 
simulation option pricing model and the requirements of IFRS 13.
(b) Merger reserve
The merger reserve arose from the acquisition of Redstone Communications Limited (£216,000) and Maxima Holdings Limited 
(formerly Maxima Holdings plc) (£7 ,750,000) and represents the difference between the value of the shares acquired (nominal 
value plus related share premium) and the nominal value of the shares issued.
(c) Translation reserve
The translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign 
subsidiaries. At 31 March 2014 the Group had no foreign subsidiaries and the balance of the reserve was transferred to Retained 
Earnings/(Accumulated Loss).
(d) Dividend in specie 
In the year ended 31 March 2014, a demerger of the Managed Services Business was effected by the declaration of a special 
dividend in Castleton, equal to the fair value of Castleton’s interests in the Managed Services Business. The dividend was 
satisfied, in specie, by the transfer of the shares in Redcentric Holdings Limited (“RCH”) to Redcentric plc. RCH was a new wholly 
owned subsidiary of Castleton, formed as a vehicle to hold the interests of the consolidated Managed Services Business (prior to 
the demerger).
The Directors attributed a fair value of £53.3 million to the dividend equivalent to the market value of the shares issued by 
Redcentric, as permitted under IFRIC 17 “Distribution of non-cash assets to owners”. Market value was determined as the mid - 
market price on the first day of admission of the Redcentric plc shares to AIM on 8 April 2013.
The cost to the Company of satisfying the dividend liability was the transfer of the net assets held for demerger in RCH at the 
demerger date. The net assets held for demerger amounted to £23.3 million. The resulting gain of £30.0 million was recorded in 
the consolidated statement of comprehensive income as a change in equity as required by IFRIC 17 . 27 Castleton Technology plc Annual Report 2015
Strategic Report
Governance
Financial Statements
Consolidated Cash Flow Statement
for the year ended 31 March 2015
Note
31 March 
2015 
£000
31 March 
2014 
£000
Cash flows from continuing operating activities
Cash generated from/(used in) operations 26 513 (2,337)
Finance charges paid (676) (785)
Income taxes paid – –
Net cash flows generated from/(used in) continuing operating activities (163) (3,122)
Net cash generated from/(used in) discontinued operating activities 561 (1,837)
Cash flows from investing activities
Proceeds from sale of businesses, net of cash sold 977 7,045
Acquisition of subsidiaries, net of cash acquired (8,952) –
Purchase of property, plant and equipment (46) –
Purchase of intangible assets (94) –
Net cash flows (used in)/generated from continuing investing activities (8,115) 7,045
Net cash flows (used in) discontinued investing activities – (21)
Cash flows from financing activities
Proceeds from issuance of shares 5,650 6,000
Costs of share issue (184) –
Repayment of borrowings (8) (3,434)
Net cash flows generated from continuing financing activities 5,458 2,566
Net (decrease)/increase in cash and cash equivalents from continuing activities (2,820) 6,489
Net increase/(decrease) in cash and cash equivalents from discontinued activities 561 (1,858)
Cash and cash equivalents at 1 April 2,785 (1,846)
Cash and cash equivalents at 31 March 526 2,785
Comprising:
Cash and cash equivalents 16 526 2,785
526 2,785
The notes on pages 28 – 53 are an integral part of these financial statements. 28 Castleton Technology plc Annual Report 2015
Notes to the Consolidated Financial Statements
year ended 31 March 2015
1 Accounting policies – Group
Castleton T echnology plc (Castleton) is a public limited company incorporated and domiciled in England and Wales, whose shares 
are publicly traded on the AIM division of the London Stock Exchange. The registered office is 100 Fetter Lane, London, EC4A 1BN 
and the principal place of business is the United Kingdom. The principal accounting policies, which have been applied consistently 
in the preparation of these consolidated financial statements throughout the year and by all subsidiary companies, are set 
out below:
1. 1 Basis of preparation
The consolidated financial statements of Castleton have been prepared on the going concern basis and in accordance with EU 
adopted International Financial Reporting Standards (IFRS), IFRIC interpretations and the Companies Act 2006 applicable to 
companies reporting under IFRS. The consolidated financial statements have been prepared under the historical cost convention, 
as modified by the revaluation of financial assets and financial liabilities (including derivative financial instruments) at fair value 
through profit or loss.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also 
requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a 
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial 
statements are disclosed in Section 1.29 in the accounting policies.
Cash flows and operations that relate to a major component of the business or geographical region that has been disposed of or 
is classified as held for sale or distribution are shown separately from continuing operations. Comparative amounts are restated.
New standards adopted in the year are discussed in Section 1.28.
Going Concern
The Directors have prepared detailed cash flow projections including sensitivity analysis on key assumptions. The Group’s 
forecasts and projections, taking account of reasonably possible changes in trading performance and the timing of key strategic 
events, show the Group will be able to operate within the level and conditions of available funding. Based on the level of support 
demonstrated by the oversubscribed equity placing on 30 June and the funding available, the Directors have a reasonable 
expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. 
Accordingly, the Group continues to adopt the going concern basis in preparing its consolidated financial statements.
1.2 Basis of consolidation
Subsidiaries are all entities (including special purpose entities) over which the Group has control. The Group controls an entity 
when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to reflect 
those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred 
to the Group. 
The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition 
of a subsidiary is the total of the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree 
and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting 
from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a 
business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling 
interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate 
share of the recognised amounts of the acquiree’s identifiable net assets.
Acquisition-related costs are expensed as incurred.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. 
Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in 
accordance with IAS 39 either in profit or loss or as a change to other comprehensive income. Contingent consideration that is 
classified as equity is not re-measured, and its subsequent settlement in accounted for within equity. Inter-company transactions, 
balances and unrealised gains or losses on transactions between Group companies are eliminated. Accounting policies of 
subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
1.3 Intangible assets
Goodwill
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of any non-
controlling interest over the fair value of the net identifiable assets acquired and liabilities assumed. If this consideration is lower 
than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. 
The carrying amount of goodwill allocated to a cash generating unit is taken into account when determining the gain or loss on 
disposal of the unit, or of an operation within it. Goodwill disposed of in this circumstance is measured on the basis of the relative 
values of the operation disposed of and the portion of the cash generating unit retained. 29 Castleton Technology plc Annual Report 2015
Strategic Report
Governance
Financial Statements
1 Accounting policies – Group continued
Other intangible assets
Intangible assets that meet the criteria to be separately recognised as part of a business combination are carried at cost (which is 
equal to their fair value at the date of acquisition) less accumulated amortisation and impairment losses. An intangible asset 
acquired as part of a business combination is recognised outside goodwill if the asset is separable or arises from contractual 
or other legal rights and its fair value can be measured reliably. Intangible assets acquired in this manner include software and 
customers contracts. They are amortised over their estimated useful life as follows:
– Software – 7 – 8 years
– Customer contracts and related relationships – 7 – 8 years
Impairment and amortisation charges are included within the administrative expenses line in the income statement.
1.4 Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any impairment in value. The cost includes 
the original price of the asset and the cost attributable to bringing the asset to its current working condition for its intended use. 
Depreciation, down to residual value, is calculated on a straight-line basis over the estimated useful life of the asset which is 
reviewed on an annual basis, as follows:
Long leasehold property   50 years
Short leasehold improvements  5 years or over lease term if shorter
Network infrastructure and equipment 1–20 years
Equipment, fixtures and fittings  2–5 years
An item of property, plant and equipment is de-recognised upon disposal or when no future economic benefits are expected 
to arise from the continued use of the asset. Any gain or loss arising on de-recognition of the asset (calculated as the difference 
between the net disposal proceeds and the carrying amount of the item) is included in the income statement in the year the item is 
de-recognised.
1.5 Impairment of assets
Goodwill is not subject to amortisation and is reviewed for impairment annually or more frequently if events or changes in 
circumstances indicate that the carrying value may be impaired. As at the acquisition date any goodwill acquired is allocated to 
each of the cash generating units expected to benefit from the business combination’s synergies. Impairment is determined by 
assessing the recoverable amount of the cash generating unit to which the goodwill relates. When the recoverable amount of 
the cash generating unit is less than the carrying amount, including goodwill, an impairment loss is recognised.
Other intangible assets and property, plant and equipment are subject to amortisation and depreciation and are reviewed for 
impairment whenever events or changes in circumstances indicate the carrying values may not be recoverable. In addition, the 
carrying value of capitalised development expenditure is reviewed for impairment annually. If any such indication exists and 
where the carrying values exceed the estimated recoverable amount, the assets or cash generating units are written down to 
their recoverable amount.
The recoverable amount of intangible assets and property, plant and equipment is the greater of fair value less costs to sell 
and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a  
pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. 
For an asset that does not generate largely independent cash inflows, the recoverable amount is determined by the cash 
generating unit to which the asset belongs. Fair value less costs to sell is, where known, based on actual sales price net of 
costs incurred in completing the disposal.
Non-financial assets that were impaired in previous periods are reviewed annually to assess whether the impairment is 
still relevant. 
1.6 Share capital
Ordinary shares and redeemable preference shares are classified as equity. The redeemable preference shares are classified as 
equity as the option to redeem lies with the Company. Incremental costs directly attributable to the issue of new shares or options 
are shown in equity as a deduction from proceeds.
Share warrants that are issued outside of the scope of IFRS 2 are measured at fair value at date of Issue. They are classified as 
equity instruments based on the substance of the contractual arrangements entered into whereby a fixed amount of cash will be 
received for a fixed number of the Company’s own equity instruments. 30 Castleton Technology plc Annual Report 2015
Notes to the Consolidated Financial Statements continued
year ended 31 March 2015
1 Accounting policies – Group continued
1.7 Leases
Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases.
Operating lease payments are recognised as an expense in the income statement on a straight-line basis over the lease term.
Where the Group has substantially all the risks and rewards of ownership of property, plant and equipment, the assets are 
capitalised as property, plant and equipment and depreciated over the shorter of their useful economic life and the lease term. 
The resulting lease obligations are included in borrowings net of finance charges. Interest costs on finance leases are charged to 
the income statement so as to produce a constant periodic rate of charge on the remaining balance of the liability for each period.
1.8 Current and deferred income tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, 
based on tax rates and laws that are enacted or substantively enacted by the balance sheet date.
Deferred income tax is provided for on all temporary differences at the balance sheet date between the tax bases of assets and 
liabilities and their carrying amounts for financial reporting purposes, with the following exceptions:
• Where the temporary difference arises from the initial recognition of goodwill or an asset or liability in a transaction that is not 
a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss;
• In respect of taxable temporary differences associated with investments in subsidiaries, where the timing of the reversal of the 
temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable 
future; and
• Deferred income tax assets are recognised only to the extent that it is probable that taxable profits will be available against 
which deductible temporary differences carried forward tax credits or tax losses can be utilised.
1.9 Trade and other receivables
Trade and other receivables are recognised and carried at the lower of their original value and recoverable amounts. 
Provision is made where there is evidence that the balances will not be recovered in full. Significant financial difficulties of the 
debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments are 
considered indicators that the trade receivable is impaired. The amount of the provision is the difference between the asset’s 
carrying amount and the present value of estimated future cash flows.
Amounts recoverable on contracts are stated at the net sales value of the work done after provision for contingencies and 
anticipated future losses on contracts, less amount received as progress payments on account.
The Group’s trade and other receivables are non-interest bearing.
1. 10 Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term deposits with an original 
maturity of three months or less.
For the purpose of the consolidated cash flow statement, cash and cash equivalents consist of cash and cash equivalents as 
defined above, net of outstanding bank overdrafts.
1. 11 Foreign currencies
The functional and presentation currency of Castleton is Pounds Sterling (£) and the Group conducts the majority of its business 
in Sterling.
Transactions in foreign currencies are initially recorded in the functional currency by applying the rate of exchange ruling at 
the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional 
currency rate of exchange ruling at the balance sheet date. All differences are taken to the income statement.
1. 12 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable 
that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be 
made of the amount of the obligation.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at 
a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to 
the liability.
1. 13 Pensions
The Group operates a defined contribution scheme. Pension costs are charged directly to the income statement in the period to 
which they relate on an accruals basis. The Group has no further payment obligations once contributions have been paid. 31 Castleton Technology plc Annual Report 2015
Strategic Report
Governance
Financial Statements
1 Accounting policies – Group continued
1. 14 Share-based payment transactions
The cost of equity-settled transactions with employees is measured by reference to the fair value of the award at the date at 
which they are granted and is recognised as an expense over the vesting period, which ends on the date at which the relevant 
employees become fully entitled to the award. Fair value is determined by an external valuer using an appropriate pricing model 
for which the assumptions are approved by the Directors. In valuing equity-settled transactions, only vesting conditions linked to 
the market price of the shares of the Company are considered.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market 
condition, which are treated as vesting irrespective of whether or not the market condition is satisfied, provided that all other 
performance conditions are satisfied.
At each balance sheet date before vesting, the cumulative expense is calculated, representing the extent to which the vesting 
period has expired and management’s best estimate of the achievement or otherwise of non-market conditions, number of equity 
instruments that will ultimately vest or in the case of an instrument subject to a market condition, be treated as vesting described 
above. The movement in the cumulative expense since the previous balance sheet date is recognised in the income statement, 
with a corresponding entry in equity.
Where the terms of an equity-settled award are modified or a new award is designated as replacing a cancelled or settled award, 
the existing charge is recognised immediately. In addition an expense is recognised over the remainder of the new vesting period 
for the incremental fair value of any modification, based on the difference between the fair value of the original award and the 
fair value of the modified award, both as measured on the date of the modification. No reduction is recognised if this difference 
is negative.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet 
recognised for the award is recognised immediately. Any compensation paid up to the fair value of the award at the cancellation 
or settlement date is deducted from equity, with any excess over fair value being treated as an expense in the income statement.
1. 15 Holiday pay accrual
Provision is made for holiday pay to the extent of the liability if all employees of the Group had left the business at its 
reporting date.
1. 16 Financial assets
The Group classifies its financial assets as loans and receivables.
Loans and receivables are non-derivative financial assets with fixed or determinable payments which are not quoted in an active 
market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date which are 
classified as non-current assets. The Group’s loans and receivables comprise “trade and other receivables” and “cash and cash 
equivalents” on the balance sheet.
1. 17 Derivative financial instruments and hedging activities
Derivatives are initially recognised at fair value on the dates a derivative contract is entered into and are subsequently  
re-measured at their fair value. Any gains or losses arising from changes in the fair values of derivatives are taken to the income 
statement through finance costs.
1. 18 Compound financial instruments
Compound financial instruments issued by the Group comprise convertible notes that can be converted to share capital at the 
option of the holder, and the number of shares to be issued does not vary with changes in their fair value.
The liability component of a compound financial instrument is recognised initially at the fair value of a similar liability that does 
not have an equity conversion option. The equity component is recognised initially at the difference between the fair value of the 
compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs 
are allocated to the liability and equity components in proportion to their initial carrying amounts.
Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised cost using 
the effective interest method. The equity component of a compound financial instrument is not re-measured subsequent to initial 
recognition except on conversion or expiry.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at 
least 12 months after the end of the reporting period.
1. 19 Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at fair value less directly attributable transaction costs. After initial recognition, 
interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. 
Gains and losses arising on the repurchase, settlement or otherwise cancellation of liabilities are recognised in the finance cost 
line in the income statement. 32 Castleton Technology plc Annual Report 2015
Notes to the Consolidated Financial Statements continued
year ended 31 March 2015
1 Accounting policies – Group continued
1.20 Finance costs
Loans are carried at fair value on initial recognition, net of unamortised issue costs of debt. These costs are amortised over the 
loan term. Where a significant change occurs in respect of a loan, any unamortised issue costs arising from previous issues of debt 
are recognised in the income statement in full.
All other borrowing costs are recognised in the income statement on an accruals basis, using the effective rate method.
1.21 Revenue
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary 
course of the Group’s activities. Revenue is shown net of Value Added T ax, returns, rebates and discounts and after eliminating 
sales within the Group.
The group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic 
benefits will flow to the entity and when specific criteria have been met for each of the Group’s activities as described below. 
The amount is not considered to be reliably measurable until all contingencies relating to the sale have been resolved. The Group 
bases its estimates on historical results taking into account the type of customer, the type of transaction and the specifics of 
each arrangement.
(i) Sale of software licences
The Group sells licences to use its software products either on a perpetual royalty free basis or on a rental basis for a fixed 
period of time. Revenue arising from the sale of perpetual licences is recognised at the time of sale provided that all the Group’s 
obligations associated with the sale of the licence have been fulfilled. Revenue from licences sold on a rental or subscription basis 
is recognised over the period for which the Group has obligations under the contract.
(ii) Sales of services
The Group sells consultancy, training, implementation and project management services to customers either separately from or in 
conjunction with the sale of licences. Revenue from the sale of services is recognised when those services have been provided.
(iii) Sales of goods
Sales of goods are recognised on delivery.
(iv) Annual contracts
The Group enters into contracts to provide support services on an annual basis. Revenue from support agreements is recognised 
in equal instalments over the period of the agreements.
1.22 Other income
Finance income
Income is recognised on an accrual basis using the effective interest method.
1.23 Exceptional items
Items which are material either because of their size or their nature, and which are non-recurring, are highlighted separately on 
the face of the income statement. The separate reporting of exceptional items helps provide a better picture of the Company’s 
underlying performance. Items which may be included within the exceptional category include:
• Spend on the integration of significant acquisitions and other major restructuring programmes; 
• Significant goodwill or other asset impairments; and 
• Other particularly significant or unusual items.
Spend on integration are incurred by the Group, when integrating one trading business into another. The types of costs include 
employment related costs of staff made redundant as a consequence of integration, due diligence costs, property costs such as 
lease termination penalties and vacant property provisions, third party adviser fees and rebranding costs.
Exceptional items are excluded from the headline profit measures used by the Group and are highlighted separately in the 
income statement as management believe that they need to be considered separately to gain an understanding of the underlying 
profitability of the trading businesses. 
1.24 Operating profit or loss
The operating profit or loss is identified in the income statement and represents the profit on continuing activities before finance 
income and costs and taxation. 33 Castleton Technology plc Annual Report 2015
Strategic Report
Governance
Financial Statements
1 Accounting policies – Group continued
1.25 Segmental reporting
The Chief Operating Decision Maker has been identified as the Executive Board. The Executive Board reviews the Group’s internal 
reporting in order to assess performance and allocate resources. Management has determined the operating segments based on 
these reports.
The Executive Board assess the performance of the operating segments based on adjusted EBITDA. Information provided to the 
Executive Board is measured in a manner consistent with that in the financial statements.
1.26 Discontinued operations
Cash flows and operations that relate to a major component of the business or geographical region that has been disposed 
of or is classified as held for sale or distribution are shown separately from continuing operations. Comparative amounts have 
been restated.
Assets and businesses classified as held for sale or distribution are measured at the lower of carrying amount and fair value less 
costs to sell.
Assets and businesses are classified as held for sale or distribution if their carrying amount will be recovered or settled principally 
through a sale transaction rather than through continuing use. This condition is regarded as being met only when the sale is 
highly probable and the assets or businesses are available for immediate sale in their present condition or is a subsidiary acquired 
exclusively with a view to resale. Management must be committed to the sale, which should be expected to qualify for recognition 
as a completed sale within one year from the date of classification.
1.27 Demerger accounting
The Redcentric demerger carried out during the year ended 31 March 2014 was accounted for as a disposal to owners in 
accordance with IFRIC 17 Distribution of non-cash assets to owners. Accordingly the difference between the fair value of the 
Redcentric business and the book value of the net assets disposed of was recorded as a “demerger gain” in the Consolidated 
income statement for the year ended 31 March 2014, and presented as part of the profit for that year on discontinued operations.
1.28 Application of new IFRSs and interpretations 
(a) New and amended standards adopted by the Group
The following principal standards and interpretations have been adopted as they are mandatory for the year ended 31 March 2015 
but have not had an impact on profit, earnings per share or net assets:
International Financial Reporting Standard (IFRS) 10 “Consolidated financial statements,” and amendments to IAS 27 (2011) 
“Separate Financial Statements”.
(b) New standards and interpretations not yet adopted
A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 
1 January 2014, and have not been applied in preparing these consolidated financial statements. None of these is expected to 
have a significant effect on the consolidated financial statements of the Group, except the following set out below:
IFRS 9, “Financial instruments”, addresses the classification, measurement and recognition of financial assets and financial 
liabilities. The complete version of IFRS 9 was issued in July 2014. It replaces the guidance in IAS 39 that relates to the 
classification and measurement of financial instruments. IFRS 9 retains but simplifies the mixed measurement model and 
establishes three primary measurement categories for financial assets: amortised cost, fair value through OCI and fair value 
through P&L. The basis of classification depends on the entity’s business model and the contractual cash flow characteristics 
of the financial asset. Investments in equity instruments are required to be measured at fair value through profit or loss with 
the irrevocable option at inception to present changes in fair value in OCI not recycling. There is now a new expected credit 
losses model that replaces the incurred loss impairment model used in IAS 39. For financial liabilities there were no changes 
to classification and measurement except for the recognition of changes in own credit risk in other comprehensive income, for 
liabilities designated at fair value through profit or loss. The standard is effective for accounting periods beginning on or after 
1 January 2018. Early adoption is permitted. The Group is yet to assess IFRS 9’s full impact.
IFRS 15, “Revenue from contracts with customers” deals with revenue recognition and establishes principles for reporting useful 
information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising 
from an entity’s contracts with customers. Revenue is recognised when a customer obtains control of a good or service and thus 
has the ability to direct the use and obtain the benefits from the good or service.
The standard replaces IAS 18 “Revenue” and IAS 11 “Construction contracts” and related interpretations. The standard is effective 
for annual periods beginning on or after 1 January 2018 and earlier application is permitted. The Group is assessing the impact of 
IFRS 15.
There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on 
the Group. 34 Castleton Technology plc Annual Report 2015
Notes to the Consolidated Financial Statements continued
year ended 31 March 2015
1 Accounting policies – Group continued
1.29 Critical accounting estimates and assumptions
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including 
expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, 
seldom equal the related results. The estimates and assumptions that have a significant risk of causing a material adjustment to 
the carrying amounts of assets and liabilities within the next financial year are:
• Estimated valuation of intangibles 
On acquisition of a new business, the Group identifies intangible assets. This calculation involves estimates about future revenues, 
costs, cash flows and the cost of capital for the Group. It also involves estimating royalty rates used in the valuation model for 
software acquired in business combinations, and the estimated life of customer relationships.
• Estimated impairment of goodwill and intangible assets
The Group tests annually whether goodwill and intangible assets have suffered any impairment, in accordance with the 
accounting policy stated in 1.5. The recoverable amounts of cash generating units have been determined based on value-in-use 
calculations. These calculations require the use of estimates.
• Estimated valuation of financial instruments
Convertible loan notes and share warrants are valued based on the following definition of Fair Value per IFRS 13 “Fair Value 
Measurement”: “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between 
market participants at the measurement date”. These calculations require the use of estimates. External experts have been 
engaged for valuation purposes where appropriate.
• Classification of Exceptional costs
The Directors have exercised judgement when classifying certain costs as integration and strategic costs. They believe that these 
costs are all related to the costs described in note 1.23. 
2 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting to the Chief Operating Decision Makers 
(“CODM”). The CODM has been identified as the Executive Board. 
The Executive Board is responsible for resource allocation and assessing the performance of the operating segments. 
The operating segments are defined by distinctly separate product offerings or markets. The CODMs assesses the performance 
of the operating segments based on a measure of adjusted EBITDA. This measurement basis excludes discontinued operations. 
The Group Is comprised of the following main operating segments:
Managed Services
In this segment are the results of Montal Computer Services Limited for the period from acquisition on 20 June 2014 and Keylogic 
Limited for the period from acquisition on 1 March 2015.
Software Solutions
This segment comprises the results of Documotive Limited for the period from acquisition on 18 November 2014 and Opus 
Information T echnology Limited for the period from acquisition on 1 March 2015.
Managed Services 
£000
Software Solutions 
£000
Unallocated 
£000
T otal 
£000
Revenue 5,120 889 44 6,053
Operating loss before amortisation of intangibles assets (432) (577) (1,258) (2,267)
Amortisation of acquired intangibles (300) (344) – (644)
Operating loss (732) (921) (1,258) (2,911)
Finance income – – 558 558
Finance costs (1) (2) (702) (705)
Loss before tax (733) (923) (1,402) (3,058)
Adjusted EBITDA * 175 (47) (212) (84)
Segment Assets 12,815 9,856 759 23,430
Segment Liabilities (6,885) (6,774) (2,250) (15,909)
Net assets/(liabilities) 5,930 3,082  (1,491) 7,521 35 Castleton Technology plc Annual Report 2015
Strategic Report
Governance
Financial Statements
2 Segment reporting continued
Managed Services 
£000
Software Solutions 
£000
Unallocated 
£000
T otal 
£000
Capital Expenditure:
Property, plant and equipment 29 15 2 46
Intangibles 94 – – 94
Depreciation (55) (29) – (84)
There were no continuing operations in the prior year, therefore there is no comparative segment information to report.
All revenue originates in the United Kingdom.
The Group had no customers who accounted for more than 10% of the Group’s revenue during the year (2014: nil).
3 Expenses by nature
2015 
£000
2014 
£000
Continuing
Direct staff costs 1,136 –
Other cost of sales 1,553 –
Employee costs within administrative expenses 1,565 391
Amortisation of intangible assets 644 –
Depreciation 84 –
Share-based compensation (see note 25) 12 59
Exceptional costs (see note 5) 2,087 –
Other administrative costs 1,883 649
T otal cost of sales and administrative expenses 8,964 1,099
4 Auditors’ remuneration
Below are the fees payable to the auditors and their associates:
2015 
£000
2014 
£000
Audit services 
Fees payable to Company's auditor for the audit of parent company and consolidated financial 
statements:
2015 financial statements 22 –
2014 financial statements 13 9
Other services: 
Audit related assurance services 10 –
The audit of the Company’s subsidiaries 60 16
T ax advisory services 55 10
Amounts relating to due diligence and reporting accountants’ services 121 –
T otal 281 35
During the year Baker Tilly UK Audit LLP were re-appointed as auditors of the Group. 36 Castleton Technology plc Annual Report 2015
Notes to the Consolidated Financial Statements continued
year ended 31 March 2015
5 Exceptional costs
In accordance with the Group’s policy in respect of exceptional costs the following charges were incurred for the year:
2015 
£000
2014 
£000
Integration and strategic costs 566 –
Acquisition and reorganisation costs:
Montal 105 –
Documotive 249 –
Keylogic 186 –
Opus 82 –
Creation of restructuring provision (see note 19) 688 –
Other 211 –
2,087 –
6 Business Combinations
Montal
On 23 June 2014 Castleton acquired 100% of the share capital of Montal, a specialist outsourced IT managed services business 
focused on the provision of tailored solutions to the public sector, for a total consideration of £3.83 million. 
T otal consideration of £3.83 million was satisfied as to £3.04 million in cash and loan notes of £0.79 million. The loan notes were 
fully settled in November 2014. 
The first Acquisition was considered a related party transaction under AIM rules for companies on the basis that MXC Capital, 
a substantial shareholder in the Company representing the interests of Ian Smith, CEO of the Company, and T ony Weaver,  
non-executive Director, held 18% of the ordinary share capital of Montal, being a portfolio investment made 12 months earlier. 
The independent Directors considered, having consulted with finnCap Limited, that the terms of transaction were fair and 
reasonable insofar as shareholders of the Company are concerned. MXC Capital Advisory LLP was not paid a fee by the 
Company in relation to the first Acquisition. Montal engaged MXC Capital Advisory LLP to advise on its strategic options and 
paid it a success fee of £120,000 in relation to the Acquisition. The Company incurred acquisition costs of £0.1 million payable to 
third parties.
From the date of acquisition to 31 March 2015, the portion of Montal held within continuing activities achieved revenue of 
£4.5 million and a loss before taxation of £0.7 million, after creation of a restructuring provision of £1.0 million (see note 19). 
Assuming the combination had taken place at the beginning of the year, the reported revenue from Montal would have been 
£5.7 million and the loss for the year before taxation would have been £0.6 million, after creation of a restructuring provision of 
£1.0 million (see note 19).
Documotive 
On 18 November 2014, Castleton acquired the entire share capital of Documotive Limited (“Documotive”), a leading software 
supplier to the social housing sector, for £4.0 million, to be satisfied by £3.0 million in cash and £1.0 million of zero coupon 
convertible loan notes, with a fair value of £1.6 million. Subsequent purchase price adjustments of £0.3 million were paid in cash.
On 30 June 2015, the vendors of Documotive converted the loan notes into new ordinary shares at a price of 1.1 pence per 
ordinary share resulting in the issue of 90,909,090 new ordinary shares. 
From the date of acquisition to 31 March 2015, the portion of Documotive held within continuing activities achieved revenue of 
£1.3 million and a profit before taxation of £0.2 million. Assuming the combination had taken place at the beginning of the year, 
the reported revenue from Documotive would have been £3.0 million and the profit for the year before taxation would have been 
£0.3 million.
Acquisition costs were £0.4 million.
Keylogic
On 28 February 2015, Castleton acquired 100% of the share capital of Keylogic, an infrastructure managed services provider with 
a focus on the social housing sector, for consideration of £4.0 million.
The initial consideration for the acquisition of Keylogic was £4.0 million, £3.4 million paid in cash and £0.6 million satisfied by 
convertible loan notes. As part of the completion mechanism, in March 2015, further cash of £0.6 million was paid and a further 
£0.2 million of convertible loan notes issued. The loan notes are repayable in 12 months, carry nil coupon and are convertible into 
new ordinary shares of 0.1 pence each in Castleton (“Ordinary Shares”) at a price of 2 pence per ordinary share. The fair value of 
loan notes at the date of issue was £1.1 million. 37 Castleton Technology plc Annual Report 2015
Strategic Report
Governance
Financial Statements
6 Business Combinations continued
From the date of acquisition to 31 March 2015, the portion of Keylogic held within continuing activities achieved revenue of 
£0.6 million and a loss before taxation of £0.03 million. Assuming the combination had taken place at the beginning of the year, 
the reported revenue from Keylogic would have been £4.5 million and the profit for the year before taxation would have been 
£1.5 million.
Acquisition costs were £0.2 million.
Opus
On 28 February 2015, Castleton also acquired 100% of the share capital of Opus, a specialist software provider to the social 
housing sector, for an initial £0.5 million, up to a maximum of £1.5 million, dependent on performance.
The initial consideration for the acquisition of Opus was £0.5 million, £0.4 million paid in cash and £0.1 million in loan notes. 
The loan notes are repayable in 12 months, carry nil coupon and are convertible into new ordinary shares at a price of 2 pence per 
ordinary share. In addition, there is a potential earn out payment of up to £1.0 million in loan notes and cash, should normalised 
EBITDA for the business for the 12 months to 30 September 2015 exceed £0.2 million.
The fair value of the contingent consideration has been estimated at nil because the Directors do not expect the threshold EBITDA 
to be achieved.
From the date of acquisition to 31 March 2015, the portion of Opus held within continuing activities achieved revenue of 
£0.05 million and a loss before taxation of £0.01 million. Assuming the combination had taken place at the beginning of the year, 
the reported revenue from Opus would have been £0.5 million and the profit for the year before taxation would have been 
£0.1 million.
Acquisition costs were £0.1 million.
Had all the acquired business been owned all year the Group revenue from continuing operations would have been £13.7 million 
with a profit before tax of £1.3 million after exceptional items of £1.0 million.
The fair value of the convertible loan notes issued in the final three acquisitions have been valued using the following approach 
and steps:
1. Estimation of the fair value of the debt component of the loan notes based on a discounted cash flow valuation approach;
2. Estimation of the fair value of the equity component of the loan notes based on a Black Scholes option pricing model;
3. Estimation of the fair value of the loan notes, being the total value of the debt and equity components.
The total provisional goodwill and intangible assets arising from the acquisitions is the difference between the fair value of 
consideration less the provisional fair value of assets acquired:
Montal
£000
Documotive
£000
Keylogic
£000
Opus
£000
T otal
£000
Fair value of purchase consideration 3,830 4,901 5,085 546 14,362
Less fair value of assets acquired:
Property Plant and Equipment (194) (335) (133) (20) (682)
Inventories (53) (53)
Trade Receivables (785) (948) (505) (124) (2,362)
Other debtors (503) (63) (566)
Cash (291) (402) (1,034) (42) (1,769)
Trade Payables 1,756 3,167 399 91 5,413
Provisions for liabilities and charges 50 115 32 3 200
Borrowings 136 136
Other liabilities 163 340 480 70 1,053
Goodwill and intangibles 4,476 6,471 4,261 524 15,732
The consideration was satisfied as follows:
Montal
£000
Documotive
£000
Keylogic
£000
Opus
£000
T otal
£000
Cash 3,040 3,288 3,985 408 10,721
Convertible loan notes:
Classified as debt 790 944 759 95 2,588
Classified as equity – 669 341 43 1,053
3,830 4,901 5,085 546 14,362 38 Castleton Technology plc Annual Report 2015
Notes to the Consolidated Financial Statements continued
year ended 31 March 2015
6 Business Combinations continued
On acquisition of each business the Directors assessed the business acquired to identify any intangible assets. 
Customer contracts and related relationships met the criteria for recognition as intangible assets as they are separable from each 
other and have a measurable fair value, being the amount for which an asset would be exchanged between knowledgeable and 
willing parties in an arm’s length transaction. 
For the customer contracts the fair value of the intangible assets was calculated by using the discounted cash flows arising from 
the existing customer contracts base for both the managed services business and the software businesses. Customer retention 
was assumed to be between 85% – 93% based on past experience. 
For software, a royalty relief calculation was used to calculate the fair value of the intangible assets, with an assumed royalty rate 
of 8%.
A long term growth rate of 2.4% was applied with a discount rate of 11.5%. The reasonable economic life of the customer 
relationships and software was assumed to be between seven and eight years. The identifiable intangible assets and related 
deferred tax liability are as follows:
Montal
£000
Documotive
£000
Keylogic
£000
Opus
£000
T otal
£000
Customer contracts and related assets 3,132 5,367 348 3,775 12,622
Software – 502 116 – 618
Deferred tax liability (590) (1,267) (105) (755) (2,717)
Goodwill 1,934 1,869 165 1,241 5,209
4,476 6,471 524 4,261 15,732
Impairment tests for Goodwill
The recoverable amount of all cash generating units has been determined based on value-in-use calculations. These calculations 
use pre-tax cash flow projections based on financial budgets approved by management until 31 March 2018. Cash flows beyond 
this period are extrapolated using the estimated growth rates stated below. 
For each of the CGUs with significant amount of goodwill the key assumptions, long-term growth rate and discount rate used in 
the value-in-use calculations are as follows:
Managed Services
Growth rate to 2018 – 3%
Gross margin  – 33%
Operating margin  – 17%
Software Solutions
Growth rate to 2017  – 7%
Gross margin   – 77%
Operating margin  – 33%
For all cash generating units the long-term growth rate assumed is 2.4%. The pre-tax discount rate used is 11.5%, which reflects 
management’s risk-adjusted estimate of the weighted average cost of capital. 
A reasonably possible adverse movement in any of the above key assumptions made would not give rise to impairment.
7 Discontinued operations
Montal Consultancy Business
On 28 February 2015, Castleton entered into an agreement to sell the consultancy division of Montal Computer Services 
Limited to its management team for a total consideration of £0.8 million. The initial cash consideration received by Castleton 
was £0.28 million with the remaining £0.32 million to be paid to Castleton in 60 monthly instalments with interest accruing on 
outstanding amounts at a rate of 9% per annum. The division was not considered to be core to the business and the disposal will 
enable Montal to concentrate on its portfolio of software solutions and avoids any potential conflicts of interest that might have 
occurred in consulting on potential software solutions to be recommended to clients.
Maxima Information Group
On the 31 August 2014 Castleton announced the sale of ABS, comprising the trade and certain assets of its subsidiary Maxima 
Information Group Limited (“MIG”) for a total cash consideration of £0.75 million. The consideration was as follows: £0.3 million 
upon sale, £0.3 million paid 30 September, with the balance of £0.15 million paid 31 March 2015.
Castleton have retained certain assets and liabilities associated with MIG, principally £130,000 of recoverable debtors, some 
legacy assets (fully written down and of limited value) and leasehold property.  39 Castleton Technology plc Annual Report 2015
Strategic Report
Governance
Financial Statements
7 Discontinued operations continued
MIG’s sole trading division (following the sale of QAD in March 2014) was ABS, a software business focused on supporting a range 
of its own developed and proprietary ERP , reservation and ticketing and payroll software products (www.ferrysoftware.co.uk). 
ABS’ services include the provision of software, hardware, development and continued support. While the business contained a 
good software product and a skilled management team, it was clear to the Board that the business requires investment and new 
commercial partners in order to sustain its market position and attract new customers. 
In the year ended 31 March 2014 MIG (excluding QAD) generated £1.5 million of revenue and returned a profit before tax of 
£305,000 (adjusted to reflect certain attributable Group and back office costs that relate to MIG that will not recur post disposal).
Current year trading of the discontinued businesses is as follows:
2015 
£000
2014 
£000
Discontinued operations
Revenue 907 17,581
Cost of sales (586) (7,715)
Gross profit 321 9,866
Selling and distribution costs (29) (764)
Administrative expenses (97) (8,359)
Gain on demerger – 30,042
Gain/(Loss) on disposal of subsidiary 538 (3,075)
Adjusted EBITDA 691 1,944
Depreciation (107) (127)
Integration and strategic costs (36) (278)
Share-based payments – (59)
Gain/(loss) on disposal of subsidiary 538 (3,075)
Gain on demerger – 30,042
Amortisation of intangibles (117) (737)
Operating Profit 969 27,710
T ax on profit on ordinary activities (100) (70)
Profit from discontinued activities attributable to equity holders of the parent company 869 27,640
The net assets of the businesses disposed of in the year, at the date of disposal, were as follows:
MIG 
£000
Montal 
Consultancy 
£000
T otal 
£000
Net Assets 433 36 469
8 Finance income and costs
Finance income
2015 
£000
2014 
£000
Fair value gain on interest rate swap 556 633
Other finance income 2 –
558 633
Finance cost
2015 
£000
2014 
£000
Interest payable on bank loans and overdrafts 619 785
Interest expense in respect of:
Commitment fees 31 –
Loan notes 28 –
Finance lease obligations 1 –
Unwind of discount on convertible loan notes 26 –
705 785 40 Castleton Technology plc Annual Report 2015
Notes to the Consolidated Financial Statements continued
year ended 31 March 2015
9 Employee benefits expense
Continuing
2015 
£000
2014 
£000
Staff costs for the year for continuing operations, including executive Directors, amounted to: 
Wages and salaries 2,385 353
Social security costs 251 36
Pension costs 65 2
Share-based payments 12 59
2,713 450
Average monthly number of people (including executive Directors) employed:
2015 
£000
2014 
£000
Sales and Administration 16 5
Management 3 –
Operations 50 –
T otal average headcount 69 5
The remuneration of the Directors was as follows:
Basic salary, 
allowances 
and fees 
£000
Bonus 
£000
Benefits 
£000
2015 
Total 
£000
2014 
T otal 
£000
Executive 
Peter Hallett – – – – 59
Spencer Dredge 63 – – 63 7
Ian Smith 179 – – 179 187
Haywood Chapman 43 – – 43 – 
Non-executive 
Richard Ramsay 5 – – 5 28
David Payne 27 – – 27 28
Phil Kelly 15 – – 15 – 
332 332 309
None of the Directors made any gains on exercise of share options in 2015 or 2014. Director’s emoluments payable to Ian Smith 
were paid to Mathian Limited.
Details of share options in the Company held by the Directors during the year are as follows:
Exercise price 
(Pence) 
At 1 April 
2014 
Number
Forfeited 
during the year 
Number
Transferred 
during the year 
Number 
At 31 March 
2015 
Number
Peter Hallett 4.0 6,875,000 (6,875,000) – – 
4.0 8,464,944 (8,464,944) – – 
Ian Smith (a) 4.0 8,464,944 – (8,464,944) – 
T ony Weaver (a) 4.0 8,464,944 – (8,464,944) – 
MXC Holdings Limited (b) 4.0 – – 16,928,888 16,928,888
The options were granted on 9 September 2010 and are exercisable as follows:
(a)  2,821,648 on the earlier of the 9 September 2013 or the achievement of the performance conditions; 5,643,296 on the 
achievement of the performance conditions.
(b) on 30 October 2014, the options granted to Ian Smith and T ony Weaver were transferred to MXC Holdings Limited.
Options (a) were granted under the Company’s Unapproved Share Option Scheme.
The performance conditions are linked to the occurrence of a qualifying transaction that will deliver a predefined return 
to shareholders. 41 Castleton Technology plc Annual Report 2015
Strategic Report
Governance
Financial Statements
10 Income tax
(a) T ax on profit on ordinary activities
                             Continuing operations Discontinued Operations                          T otal
2015 
£000
2014 
£000
2015 
£000
2014 
£000
2015 
£000
2014 
£000
Corporation T ax
Current tax on loss for the year 6 – 100 – 106 –
Reversal of prior year provisions – – – 312 – 312
Deferred tax
Origination and reversal of timing 
differences (124) – – (242) (124) (242)
T otal tax (credit)/charge (118) – 100 70 (18) 70
The rate of UK Corporation T ax for the year beginning 1 April 2014 is 21% and the subsequent change to the recognised deferred 
tax asset that was previously calculated at a rate of 23% has been reflected in the reconciliation of the total income tax charge.
The rate of UK Corporation T ax for the year beginning 1 April 2015 is 20% and the relevant deferred tax balances reflect this.
(b) Reconciliation of the total income tax (credit)
The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate 
applicable to losses of the consolidated entities as follows:
2015 
£000
2014 
£000
Continuing loss from operations before taxation (3,058) (1,251)
Accounting profit/(loss) multiplied by the UK standard rate of Corporation T ax of 21% (2014: 23%) (642) (288)
Net items not deductible/(chargeable) for tax purposes 44 14
Change in prior year provisions – 312
Unrelieved losses 463 –
Capital allowances in excess of depreciation 17 – 
Movement in deferred tax and the effect of the change of tax rate – (38)
T otal income tax charge/(credit) on continuing operations (118) – 
(c) Unrecognised deferred tax
The Group has unrecognised deferred tax assets of £13.7 million (2014: £13.2 million) in respect of losses and reliefs, which the 
Group is unlikely to be able to utilise except in very limited circumstances. The composition of these deferred tax assets is as 
follows: property, plant and equipment differences £4.8 million (2014: £4.8 million), short-term temporary differences £0.1 million 
(2014: £0.1 million) and tax losses of £8.8 million (2013: £8.3 million). Deferred tax assets have not been recognised in respect of 
losses where it is the view of the Directors that it is not probable that future taxable profits of the nature required will be available 
to offset against any deferred tax asset.
(d) Deferred tax liability
£000
At 31 March 2013 1,217
Credited to discontinued operations (242)
Included in disposals (818)
Included in liabilities held for sale (157)
At 31 March 2014 – 
Business combinations 2,717
On acquisitions (115)
Credit to income statement (124)
At 31 March 2015 2,478
Deferred tax liabilities arose in respect of the amortisation of intangible assets recognised on acquisitions made, the difference 
between capital allowances and depreciation. 42 Castleton Technology plc Annual Report 2015
Notes to the Consolidated Financial Statements continued
year ended 31 March 2015
11 Earnings/loss per share
Basic loss per share and diluted loss per share are calculated using a weighted average number of shares of 818,969,196 and 
895,071,598 respectively. (2014: weighted average number of shares of 622,689,960). Adjusted EBITDA * has been shown on the 
grounds that it is a common metric used by the market in monitoring similar businesses.
2015 
£000
2014 
£000
(Loss) for the year from continuing operations before tax (3,058) (1,251)
Net finance expense 147 152
Depreciation 84 – 
Amortisation 644 – 
Share-based payment charges 12 59
Exceptional items included in administrative expenses 2,087 – 
Adjusted EBITDA * (84) (1,040)
Basic and diluted adjusted EBITDA * per share 0.01p (0.17p)
Statutory EPS:
Basic loss per share from continuing activities (0.36p) (0.20p)
Basic profit per share from discontinued activities 0.12p 4.44p
T otal basic (loss)/profit per share (0.24p) 4.24p
Diluted loss per share from continuing activities (0.36p) (0.20p)
Diluted profit per share from discontinued activities 0.12p 4.44p
T otal diluted (loss)/profit per share (0.24p) 4.24p
The weighted number of shares and the loss for the year for the purposes of calculating the fully diluted earnings per share are 
the same as the basic loss per share calculation. This is because the outstanding share options and warrants would have the 
effect of reducing the loss per ordinary share and would, therefore, not be dilutive under the terms of IAS 33.
* T otal result for the year from Continuing Operations before net finance costs, tax, depreciation, amortisation, goodwill impairment, integration and strategic costs and share-based payment charges.
12 Intangible assets
Goodwill
£000
Software 
£000
Customer contacts 
and related 
relationships 
£000
Trademarks and 
licences 
£000
Development 
Expenditure 
£000
T otal 
£000
Cost 
At 1 April 2013 11,409 6,419 11,000 500 – 29,328
Disposals (11,409) (629) (9,800) (500) – (22,338)
Assets Held for Sale – (5,790) (1,200) – – (6,990)
At 1 April 2014 – – – – – – 
Additions – – – – 94 94
Business Combinations 5,209 618 12,622 – – 18,449
At 31 March 2015 5,209 618 12,622 – 94 18,543
Amortisation
At 1 April 2013 (5,119) (6,266) (5,700) (500) – (17,585)
Charge for the year – (131) (606) – – (737)
Disposals 5,119 609 5,909 500 – 12,137
Held for disposal – 5,788 397 – – 6,185
At 1 April 2014 – – – – – – 
Charge for the year – (50) (568) – (26) (644)
At 31 March 2015 – (50) (568) – (26) (644)
Net carrying amount 
31 March 2015 5,209 568 12,054 – 68 17,899
31 March 2014 – – – – – –  43 Castleton Technology plc Annual Report 2015
Strategic Report
Governance
Financial Statements
12 Intangible assets continued
The amortisation of £644,000 (2014: £737 ,000) comprises £nil (2014: £737 ,000) in respect of discontinued operations and 
£644,000 (2014: £nil) in respect of continuing operations, and is included in the loss for the year from Continued Operations in the 
income statement.
Goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying 
value may be impaired Goodwill is supported by calculating the discounted cash flows arising from the existing businesses. 
A long-term growth rate of 2.4% was applied with a discount rate of 11.5%. 
13 Property, plant and equipment
Leasehold property 
£000
Network 
infrastructure and 
equipment 
£000
Equipment, 
fixtures 
and fittings 
£000
T otal 
£000
Cost
At 1 April 2013 2,658 8,142 6,793 17,593
Additions 6 15 – 21
Included in assets held for sale (10) (16) (20) (46)
Disposals (2,654) (8,141) (6,773) (17,568)
At 1 April 2014 – – – – 
Additions 7 39 – 46
Business Combinations 215 372 95 682
Disposals – (10) – (10)
At 31 March 2015 222 401 95 718
Accumulated depreciation
At 1 April 2013 (2,542) (8,082) (6,697) (17,321)
Charge for the year (20) (55) (52) (127)
Included in assets held for sale 2 10 12 24
Disposals 2,560 8,127 6,737 17,424
At 1 April 2014 – – – – 
Charge for the year 24 159 8 191
At 31 March 2015 24 159 8 191
Net book amount 
31 March 2015 198 242 87 527
31 March 2014 – – – – 
As at 31 March 2015 included in equipment, fixtures and fittings are assets held under finance leases with a carrying value of 
£42,000 (2014: £nil).
The depreciation for the year of £191,000 (2014: £127 ,000) comprises £107 ,000 (2014: £127 ,000) relating to discontinued operations 
and £84,000 (2014: £nil) relating to continuing operations.
The depreciation expense relating to continuing operations of £84,000 has been charged to administrative expenses.
Bank borrowings of £117 ,000 are secured on long leasehold property with a book value of £180,000. 44 Castleton Technology plc Annual Report 2015
Notes to the Consolidated Financial Statements continued
year ended 31 March 2015
14 Trade and other receivables
2015 
£000
2014 
£000
Trade receivables 2,841 519
Less: provision for impairment of trade receivables (83) (249)
Trade receivables – net 2,758 270
Other receivables 879 2,236
Prepayments 476 112
Amounts due within 12 months 4,113 2,618
Prepayments 323 – 
Amounts due after more than 12 months 323 – 
T otal Receivables 4,436 2,618
As at 31 March 2015, trade receivables of £0.08 million (2014: £0.2 million) were impaired and fully provided for.
The quality of trade receivables can be assessed by reference to the historical default rate of £546 for the preceding 365 days. 
The carrying value of trade receivables that would otherwise be past due or impaired but whose terms were renegotiated 
were £nil. The individually impaired receivables relate to receivables over 365 days, customers in financial difficulty, customer 
acceptance issues and cancelled contracts.
As at 31 March 2015, trade receivables of £0.8 million were past due but not impaired. In the table below, these comprise the 
receivables over 30 days, which relate to a number of independent customers for whom there is no recent history of default. 
The ageing analysis of net trade receivables which are past due and not impaired is as follows:
Days outstanding
2015 
£000
2014 
£000
31–60 days 513 14
61–90 days 82 – 
91–180 days 168 68
763 82
The provision is calculated by local management on a specific basis based on their best estimate of recoverability taking into 
account the age and specific circumstances relating to the debtor. The maximum exposure to credit risk at the reporting date 
is the fair value of each class of receivable mentioned above. The Group does not hold any collateral as security. The carrying 
amounts of the Group’s trade and other receivables are denominated in pounds.
Movements on the Group provision for impairment of trade receivables are as follows:
£000
Balance at 31 March 2014 249
Disposed during year (249)
Fair Value on Business Combinations 83
At 31 March 2015 83
The creation and release of a provision for impaired receivables has been included in “administrative expenses” in the income 
statement. Amounts charged to the allowance account are generally written-off, when there is no expectation of recovering 
additional cash.
The other asset classes within trade and other receivables do not contain impaired assets.
15 Assets and liabilities held for sale or distribution
As at 31 March 2015, £nil assets or liabilities were held for sale or distribution.
As part of the disposal of MIG described in note 7 , discontinued operations, the following assets and liabilities were held for sale at 
the 31 March 2014. 
Assets held for sale or distribution
2015 
£000
2014 
£000
Intangible assets – 805
T angible assets – 22
– 827 45 Castleton Technology plc Annual Report 2015
Strategic Report
Governance
Financial Statements
15 Assets and liabilities held for sale or distribution continued
Liabilities held for sale or distribution
2015 
£000
2014 
£000
Deferred tax liability – 157
– 157
16 Cash and cash equivalents
2015 
£000
2014 
£000
Cash at bank and in hand (excluding overdrafts) 526 2,785
The table below shows the balance with the major counterparty in respect of cash and cash equivalents.
Credit rating
2015 
£000
2014 
£000
A 526 2,785
17 Trade and other payables
Current
2015 
£000
2014 
£000
Trade payables 1,593 399
Other payables 24 – 
T axation and social security 590 183
Accruals 1,945 1,141
Corporation tax payable 596 – 
Deferred income 3,007 635
7,755 2,358
18 Commitments and contingencies
a) Operating leases
Future aggregate minimum annual lease payments under non-cancellable operating leases as at 31 March are as follows:
Land and  
buildings 2015 
£000
Other 
2015 
£000
Land and  
buildings 2014 
£000
Other 
2014 
£000
Not later than one year 122 23 – – 
After one year but not more than five years 100 68 – – 
After five years 5 – – 
227 91 – – 
The Group’s operating leases related to property, motor vehicles and office equipment, and had remaining terms of between one 
and seven years. The amount recognised as an expense in discontinued activities in the year is £nil (2014: £nil). 
(b) Capital commitments
The Group had no contracted but not provided for capital commitments at 31 March 2015 (2014: £nil).
(c) Contingent liabilities
The Group’s subsidiaries and the Company are currently, and may be from time to time, involved in a number of legal proceedings. 
Whilst the outcome of current outstanding actions and claims remains uncertain, it is expected that they will be resolved without a 
material impact on the Group’s financial position.
As is usual practice in corporate transactions, the Company has given warranties and indemnities in relation to businesses 
disposed of. The Directors have not received any claims under such warranties or indemnities, and have no reason to 
believe that there will be any sustainable claims forthcoming. No provision has been made for any potential claims in these 
financial statements. 46 Castleton Technology plc Annual Report 2015
Notes to the Consolidated Financial Statements continued
year ended 31 March 2015
19 Provisions
Property
The Group currently has a number of vacant properties. Provisions have been recognised to cover the rents, business rates 
and service charges for the period that each property is expected to be vacant, being up to the lease expiry or break clause if 
earlier. Provisions are calculated using the contracted rates of rents and service charges on each individual lease arrangement. 
Dilapidation provisions are built up over the life of the associated lease based on estimates of costs of work required to fulfil the 
Group’s contractual obligation under the lease agreements to return the property to the same condition as at the commencement 
of the lease.
Restructuring
In March 2015 the Group announced its intention to relocate the offices of Keylogic Limited and Montal Computer Services 
Limited. Provisions have been recognised to cover redundancies and associated costs.
Restructuring 
provision 
£000
Other 
provisions 
£000
 Property 
provision 
£000
T otal 
provision 
£000
At 1 April 2013 – – 1,359 1,359
Included in discontinued operations (1,359) (1,359)
At 31 March 2014 – – – – 
Acquired –  85 115 200
Charged to income statement 260 – 408 668
Reclassification from accruals 149 149
At 31 March 2015 260 85 672 1,017
20 Borrowings
Current
2015 
£000
2014 
£000
Mortgage 7 – 
Convertible loan notes 1,825 – 
1,832 – 
Non-current
2015 
£000
2014 
£000
Mortgage 110 – 
110 – 
The mortgage is secured over a long leasehold property acquired as part of a business combination during the year. The property 
is held within fixed assets at a cost £0.2 million. The mortgage is repayable at an interest rate of 2.9% above base rate. 
The remaining term at 31 March 2015 is 161 months. 
Derivative financial instruments
The Company has an interest rate swap and is obligated to service this derivative until its maturity in September 2015. The gross 
liability under the derivative stands at approximately £0.33 million, and the current annual cost is approximately £0.6 million.
Loan facility
On 28 February 2015, the Company entered into a loan agreement with MXC Capital Limited (“MXC Capital”) for up to £1.5 million 
(the “Loan Agreement”). Interest is payable on amounts drawn down under the Loan Agreement at a rate of 10% per annum, with a 
commitment fee of 4% payable on amounts undrawn. The Loan Agreement has a term of 18 months and includes an arrangement 
fee of £25,000, payable to MXC Capital. Amounts drawn down under the Loan Agreement are capable of being converted 
into new ordinary shares at a price of 2 pence per ordinary share at any time at MXC Capital’s option. At 31 March 2015, the full 
£1.5 million remained undrawn. See note 29 for an explanation of post balance sheet events. 47 Castleton Technology plc Annual Report 2015
Strategic Report
Governance
Financial Statements
20 Borrowings continued
Finance lease liability
The present value of finance lease liabilities is as follows:
Minimum lease 
payments 2015 
£000
Interest  
2015 
£000
Principal 
2015 
£000
Less than one year 34 (3) 31
Between one and five years 25 (1) 24
Total 59 (4) 55
Convertible loan notes
Three convertible loan notes were issued during the year in order to satisfy consideration for the acquisitions of Documotive 
Limited, Keylogic Limited and Opus Information T echnology Limited. The Documotive loan note was issued on 18 November 2014 
and the Keylogic and Opus loan notes on 28 February 2015. The loan notes are all repayable with 12 months of issue, carry zero 
coupon and are convertible into new ordinary shares of 0.1 pence each at the holders’ option at a price of 1.1 pence per share 
(Documotive) and 2 pence per share (Keylogic and Opus). In addition, the 8% unsecured convertible loan note issued on the 
acquisition of Montal in the year was converted.
The convertible loan note recognised in the balance sheet is calculated as follows:
2015 
£000
2014 
£000
Debt component_fair value at issue 2,588 – 
Converted to equity in the year (790) – 
Unwind of discount 27 – 
Debt component at 31 March 2015 1,825 – 
Equity component at 31 March 2015 1,053 – 
Total 2,878 – 
All loan notes are payable within 12 months of the balance sheet date. See note 29 for an explanation of post balance 
sheet events.
The fair value of the liability component of the loan notes at 31 March 2015 was £1.83 million. The fair value is calculated using cash 
flows discounted at a rate based on the borrowings rate of 0.4%.
21 Financial instruments by category
The objectives of the Group’s treasury activities are to manage financial risk, secure cost-effective funding where necessary and 
minimise adverse effects of fluctuations in the financial markets on the value of the Group’s financial assets and liabilities, on 
reported profitability and on cash flows of the Group.
The Group’s principal financial instruments for fundraising are bank borrowings, overdraft facilities and loans. The Group has 
various other financial instruments such as cash, trade receivables and trade payables that arise directly from its operations.
2015 
£000
2014 
£000
Assets
Trade receivables 2,758 270
Other current assets 879 2,233
Cash and cash equivalents 526 2,785
Total 4,163 5,288 48 Castleton Technology plc Annual Report 2015
Notes to the Consolidated Financial Statements continued
year ended 31 March 2015
21 Financial instruments by category continued
Fair value of the above items equals their carrying amounts.
31 March 2015
Liabilities 
at fair value 
through the profit 
and loss 
£000
Other financial 
liabilities 
£000
Total 
£000
Liabilities 
Trade and other payables excluding statutory liabilities – 3,555 3,555
Convertible Loan Notes – 1,825 1,825
Mortgage – 117 117
Derivative financial instruments:
– Interest rate swap 298 – 298
Total 298 5,497 5,795
31 March 2014
Liabilities 
at fair value 
through the profit 
and loss 
£000
Other financial 
liabilities 
£000
T otal £
000
Liabilities 
Trade and other payables excluding statutory liabilities – 1,540 1,540
Derivative financial instruments:
– Interest rate swap 854 – 854
T otal 854 1,540 2,394
Fair value of the above items equals their carrying amounts.
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by 
valuation technique:
– Level 1: quoted (unadjusted) prices in active markets for identical assets and liabilities;
–  Level 2: not traded in an active market but the fair values are based on quoted market prices or alternative pricing sources with 
reasonable levels of price transparency; and
–  Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable 
market data.
The nature of the valuation techniques and the judgement around the inputs mean that a change in assumptions could result in 
significant change in the fair value of the instruments.
At the balance sheet date the Group’s financial instruments held at fair value were level 2 instruments.
22 Derivative financial instruments
2015 
£000
2014 
£000
Interest rate swap – fair value hedge 
Current liability 298 569
Non-current liability – 285
298 854
At 31 March 2015, the Group has in place a cap and collar arrangement whereby the variable interest rate, which is based on 
LIBOR, cannot fall below 4.89% or rise above 6.5%. In addition, under the terms of the swap agreement, if LIBOR falls below 
4.89%, the interest rate rises by an equivalent amount for each incremental fall, up to a maximum of 6.5%. In the current year 
the Group incurred a £0.6 million (2014: £0.6 million) cash outflow as a result of this hedge. The notional principal amount of the 
outstanding interest rate swap contract at 31 March 2015 was £10 million (2014: £10.0 million). The derivative instrument expiry date 
is 30 September 2015.
Derivative financial instruments are accounted for as financial liabilities through profit or loss and gains and losses are recognised 
in the income statement in finance costs.
All derivative financial instruments are measured at their fair value and are calculated by reference to the net present value of 
future cash flows, based on exchange rates and interest rates quoted on international financial markets, at the balance sheet date. 49 Castleton Technology plc Annual Report 2015
Strategic Report
Governance
Financial Statements
23 Financial risk management
The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange, fair value interest rate risk, 
cash flow interest rate risk, and price risk), credit risk, and liquidity risk. The Group’s overall risk management programme focuses 
on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance. 
The Group uses derivative financial instruments to hedge certain risk exposures.
Risk management is carried out centrally under policies approved by the Board of Directors. Management identifies, evaluates 
and hedges financial risks. The Board provides principles for overall risk management, as well as policies covering specific areas, 
such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial 
instruments, and investments of excess liquidity.
(a) Market risk
(i) Foreign exchange risk
The Group mainly operates within the UK and foreign exchange risk arises from future commercial transactions, recognised assets 
and liabilities.
(ii) Cash flow risk
The Group receives interest on cash and cash equivalents and pays interest on its borrowings.
The Group has an interest rate swap in place which hedges against interest rate movements on its Barclays borrowing facility. 
The interest rate swap has a floor and a ceiling linked to LIBOR, the floor is set at 4.89% and the ceiling 6.5%.
The impact on post-tax profit and equity of a +/– 1% shift in the interest rate would not be material. 
(iii) Price risk
The Group is not exposed to significant commodity or security price risk.
(b) Credit risk
Credit risk is managed at a subsidiary level. Credit risk arises from cash and cash equivalents, derivative financial instruments 
and deposits with banks and financial institutions, as well as credit exposures to customers, including outstanding receivables, 
amounts recoverable on contracts and committed transactions. Individual risk limits are set based on internal and external ratings 
and review by the Board where appropriate. The utilisation of credit limits is regularly monitored with appropriate action taken by 
management in the event of a breach of credit limit.
(c) Liquidity risk
Management reviews cash forecasts of operating companies of the Group in accordance with practice and limits set by the Group. 
The Group’s liquidity management policy involves projecting cash flows and considering the level of liquid assets necessary to 
meet these.
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period from the 
balance sheet date to the contractual maturity date. These amounts disclosed in the table are the contracted undiscounted cash 
flows. Balances within 12 months equal their carrying balances as the impact of discounting is not significant.
At 31 March 2015
Within 1 year 
£000
1–2 years 
£000
More than 
2 years 
£000
Total 
£000
Trade and other payables 1,593 – – 1,593
Loan Notes 1,825 – – 1,825
Mortgage 7 8 102 117
Derivative financial instruments 298 – – 298
At 31 March 2014
Within 1 year 
£000
1–2 years 
£000
More than 
2 years 
£000
T otal 
£000
Trade and other payables 1,540 – – 1,540
Derivative financial instruments 569 285 – 854 50 Castleton Technology plc Annual Report 2015
Notes to the Consolidated Financial Statements continued
year ended 31 March 2015
24 Called up share capital
2015 
Number
2014 
Number
2015 
£000
2014 
£000
Allotted, called up and fully paid share capital 
Ordinary shares of 0.1p (2014: 0.1p)
1 April 623,717,357 548,717,357 624 549
Share issues 531,818,181 75,000,000 532 75
31 March 1,155,535,538 623,717,357 1,156 624
Allotted, called up and unpaid share capital
Redeemable preference shares of 10p
At start and end of year 500,000 500,000 50 50
T otal issued share capital 1,156,035,538 624,217,357 1,206 674
Ordinary shareholders have the right to attend, vote and speak at meetings, receive dividends, and receive a return on assets in 
the case of a winding up. 
The redeemable preference shares may be redeemed at the Company’s option at any time without payment of a premium. On a 
winding up they rank ahead only of the ordinary shares and will be repaid at par. Redeemable preference shareholders do not 
have the right to vote and speak at meetings nor to receive dividends. 
Share issue
During the year the following shares were issued:
2015 
Number
2014 
Number
Placing with investors 531,818,181 75,000,000
531,818,181 75,000,000
In order to raise cash to purchase Documotive, repay a portion of the loan notes used to fund the acquisition of Montal and to 
provide sufficient working capital to fund further acquisitions, on 18 November 2014, the Company raised £5.65 million by way 
of an equity placing of 513,636,000 new ordinary shares at a price of 1.1 pence per ordinary share. A further 18,182,000 new 
ordinary shares were issued on this date as a result of the conversion of the remainder of the loan notes issued to fund the 
Montal acquisition.
Warrants
During the year, in acknowledgement of being the Cornerstone Placee in the Group’s share issue, 57 .8 million share warrants 
were issued to MXC Capital Plc, acting in its capacity as shareholder. The fair value of the warrants is calculated using a Monte 
Carlo simulation option pricing model. 
The weighted average fair value of the warrants issued during the period determined using the Monte Carlo simulation option pricing 
model, including a 20% discount for lack of marketability, was 0.64 pence per warrant. The significant inputs into the model were 
weighted average share price of 1.3 pence per share at the grant date, an exercise price of 1.1 pence per share shown above, volatility 
of 85%, nil dividend yield, an expected warrant life of two and a half to six years, and an annual risk-free interest rate of 1.67%.
25 Share-based payment plans
During the year ended 31 March 2015 the Group had the following share-based payments:
2015 
£000
2014 
£000
Equity-settled share-based charge arising from share option plans for employees – 117
Equity-settled share-based charge arising from warrants 12 – 
T otal equity-settled share-based payments 12 117
ESOP
The Group operates share options schemes issued through an Employee Share Option Plan, (“ESOP”), in both Approved and 
Unapproved share schemes and also issued warrants in the year giving rise to a share-based payment charge. 
The schemes under the ESOP (both the Approved and Unapproved schemes) incorporate the same general terms and conditions 
with the Approved scheme benefiting from certain tax breaks.
The schemes’ period is ten years with vesting occurring after the first three years and settlement in equity. Two grants contain 
differing general terms and conditions. The May 2005 grant can be exercised in equal one-third tranches each year from inception. 
25 Share-based payment plans continued 51 Castleton Technology plc Annual Report 2015
Strategic Report
Governance
Financial Statements
The October 2015 grant vests in three annual tranches with 50% being subject to achievement of a 12% compound annual growth 
in share price above the exercise price. The schemes do not have service conditions attached.
At 31 March 2015 options granted under the Unapproved and the Approved schemes were outstanding over a total of 26,985,243 
and 1,515,000 ordinary shares respectively (2014: 30,023,970 Approved and 2,382,862 Unapproved).
On 29 October 2014, Colin Sales, then Managing Director of Montal, was granted a warrant over 1% of the Company’s share 
capital. The warrant is exercisable at 1.1 pence per share and are exercisable over a three year period, a third per annum, with 50% 
of the warrant exercisable in any year becoming exercisable immediately and the remaining 50% of the warrants only becoming 
exercisable to 12% compound growth in each year in the Company’s share price above 1.1 pence per share having been achieved.
The expense recognised for equity-settled share-based payments in respect of employee services received during the year to 
31 March 2015 was £12,000 (2014: £117 ,000).
The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share options 
during the year.
2015
Number of 
warrants
2015 
Number 
of options
2015 
WAEP 
of options
2014 
Number 
of options
2014 
WAEP
Outstanding at the beginning of the year – 32,406,832 4.46p 32,406,832 4.46p
Forfeited during the year – (15,461,943) 4.62p – – 
Granted in the year 11,555,355 – – – – 
Outstanding at the end of the year 11,555,355 16,944,889 4.46p 32,406,832 4.46p
During the year 15,461,943 options were forfeited (2014: nil).
There were no options exercisable at the end of the year under the Approved and the Unapproved schemes (2014: Approved nil 
and Unapproved nil).
The weighted average fair value of the warrants issued during the period determined using the Monte Carlo simulation option 
pricing model was 0.74 pence per warrant. The significant inputs into the model were weighted average share price of 1.3 pence 
per share at the grant date, an exercise price of 1.1 pence per share shown above, volatility of 85%, nil dividend yield, an expected 
warrant life of two and a half to six years, and an annual risk-free interest rate of 1.67%.
The weighted average remaining contractual life for the share options outstanding at 31 March 2015 is five years and four months 
(31 March 2014: six years and five months).
The range of exercise prices for options outstanding at the end of the year was 1.1 pence to 4.31 pence (2014: 4 pence to 
116 pence). 
The fair value of the equity-settled share options granted is estimated as at the date of grant using a binomial model, taking into 
account the terms and conditions upon which the options were granted. 
26 Net cash flows from continuing operating activities
2015 
£000
2014 
£000
Loss on ordinary activities before taxation (3,058) (1,251)
Adjustments for: 
Net finance costs 147 152
Depreciation of property, plant and equipment 84 – 
Amortisation of intangibles 644 – 
Equity-settled share-based payment charge 12 59
Movements in working capital: 
Decrease in trade and other receivables 715 444
Increase/(decrease) in trade and other payables 1,130 (1,741)
Increase in provisions 817 – 
Decrease in stock 11 – 
Loss on disposal of fixed assets 11 – 
Cash used in continuing operations 513 (2,337) 52 Castleton Technology plc Annual Report 2015
Notes to the Consolidated Financial Statements continued
year ended 31 March 2015
27 Pensions
The Group operates defined contribution pension schemes for eligible employees. The charge for the year ended 31 March 
2015 relating to continuing operations is £64,619 (2014: £2,174). An amount of £10,938 is included in creditors being outstanding 
contributions at 31 March 2015 (2014: £nil).
28 Subsidiaries
Below are the Group’s subsidiary undertakings.
At 31 March 2015, the Company had the following subsidiary undertakings.
Principal activity Country of incorporation
% ordinary share 
capital owned
Held by Castleton T echnology plc 
Castleton T echnology Intermediate 
Holding Company Limited Intermediate holding company England and Wales 100%
Redstone Group Holdings Limited Intermediate holding company England and Wales 100%
Documotive Limited Software sales and services England and Wales 100%
Held by Castleton T echnology 
Intermediate Holding Company Limited
Montal Computer Services Limited IT Infrastructure sales and services England and Wales 100%
Opus Limited Software sales and services England and Wales 100%
Keylogic Limited IT Infrastructure sales and services England and Wales 100%
In addition, the Group had the following non-trading subsidiaries, all of which were wholly- owned and incorporated in England 
and Wales:
Pure Networks Limited** Essential Network Solutions Limited** Redstone T elecommunications Limited**
Systematic T elecoms Limited** Isomatrix UK Limited** Compass T elecom Limited**
Fenfones Communications Limited** Dialnet plc* Compass Communications Limited**
Redstone i4e Limited
Compass Communications T echnical 
Services Limited** Castleton Communications Limited**
Xpert Group Limited* Fujin Systems Limited** Net Quest Solutions Limited**
IDN T elecom Limited* Caltell Communications Limited** Xpert Communications Limited*
Identa Limited** Genesis Communications Limited* Independent Digital Networks Limited*
Fastnet Group Limited* Fastnet Systems plc* Fastnet Consulting Services Limited*
Montal Group Limited Montal Computer Systems Limited Redstone T elecom Holdings Limited
3net Limited* Seventhree Limited** Castleton Business Solutions Limited**
Cognition Solutions Limited** DXI Networks Limited* Cognition Support Services Limited**
AH1 Limited* Minerva Industrial Systems plc* Azur Business Solutions Limited**
M2 Systems Limited** Ringwood Group Limited** Ringwood Software Limited*
Trove Software Limited** Marcom Communication Limited* Centric Networks Limited*
* Members voluntary liquidation proceedings commenced post year-end.
** Company struck off post year-end. 53 Castleton Technology plc Annual Report 2015
Strategic Report
Governance
Financial Statements
29 Subsequent events
On 31 May 2015 Castleton acquired the entire issued share capital of Impact Applications Limited (“Impact”) and Brixx Solutions 
Limited (“Brixx”) for a total consideration of £10.0 million payable as to £8.33 million in cash (of which £0.5 million is deferred) 
and £1.67 million in shares. The book value of net assets acquired was £1.1 million and £0.1 million respectively. The Directors are 
currently assessing the fair value of the assets net acquired.
The acquisitions were financed by a new bank facility with the Group’s existing bankers, Barclays Plc, comprising a term loan 
of £5 million together with an overdraft of up to £2 million and drawdown of £1.5 million under the Loan Agreement with MXC. 
The Company entered into a further loan facility with MXC Capital to provide up to £1 million. Interest is payable on amounts drawn 
down under the Facility at a rate of 10%. per annum, with a commitment fee of 4% payable on amounts undrawn. The Facility has a 
term of six months and remains undrawn.
On 30 June 2015 the Group raised £2.2 million gross proceeds from a placing of 97 ,777 ,776 new ordinary shares at a price of 
2.25 pence. In addition, on 30 June 2015, the Company allotted 75,000,000 new ordinary shares pursuant to the conversion of 
the £1.5 million drawn under the loan facility with MXC Capital Limited and a further 90,909,090 new ordinary shares pursuant to 
the conversion of the loan notes issued as part of the consideration for the acquisition of Documotive Limited (“Documotive Loan 
Note Shares”).
On 18 July 2015 options were awarded as follows:
Options over 2% of the fully diluted share capital to Haywood Chapman under a combination of EMI Share Options, Unapproved 
Share Options and Employee Share Scheme Options;
Options over 1% of the fully diluted share capital to Davinder Sanghera under a combination of EMI Share Options, Unapproved 
Share Options and Employee Share Scheme Options;
Options over 0.4% of the fully diluted share capital to David Payne under a combination of Unapproved Share Options and 
Hurdle Shares;
Options over 0.2% of the fully diluted share capital to Phil Kelly under a combination of Unapproved Share Options and Hurdle 
Shares; and
All of the options are evergreen, meaning that the percentage of the fully diluted issued share capital held under option will 
remain constant, notwithstanding any further issues of ordinary shares. The options are being awarded under a variety of 
schemes, both approved and unapproved. All of the options are subject to vesting criteria whereby the average price per ordinary 
share must exceed 3 pence, and in some cases 4 pence, for a ten day period between the second and third anniversaries of 
1 April 2015. If these targets are not met, extended targets compounding at 12% per annum are in place between the third and 
sixth anniversaries. 
Also on 18 July 2015, evergreen options over 5% of the fully diluted share capital were awarded to MXC under the MXC Share 
Option Scheme. The MXC options are subject to criteria whereby the average price per ordinary share must exceed 2.5 pence for 
50% of the options to vest and 3.0 pence for the other 50% of the options to vest, both criteria for a ten day period between the 
second and fifth anniversaries of 1 April 2015. The options granted to MXC replace the share warrant granted on 29 October 2014 
as detailed below.
If the average price of an ordinary share does not reach or exceed the targets above then the option shall lapse. 
30 Related parties
The Group has taken advantage of the exemption allowing it not to disclose transactions with entities wholly- owned by the Group.
Key management is considered to comprise only the Directors. Directors’ emoluments are disclosed in Note 9.
Ian Smith, Director and shareholder of Castleton T echnology plc is Director, and one of the controlling shareholders of, MXC 
Capital Limited (MXC). 
During the year, the Company paid MXC for consultancy services and corporate finance advice amounting to £562,736 
(2014: £347 ,000). At the year-end £182,313 (2014: £nil) of this balance remained unpaid. 54 Castleton Technology plc Annual Report 2015
Company Balance Sheet
as at 31 March 2015 
Note
 31 March  
2015 
£000
31 March 
2014 
£000
Fixed assets 
Investments in subsidiaries 2 9,085 1,790
Current assets 
Debtors 3 1,150 699
Creditors: Amounts falling due within 1 year 4 (2,114) –
Net current(liabilities)/assets (964) 699
T otal assets less current liabilities, being net assets 8,121 2,489
Capital and reserves 
Called up share capital 7 1,206 674
Share premium account 8 10,689 5,925
Equity Instruments 8 1,380 –
Profit and loss account 8 (5,154) (4,110)
T otal shareholders’ funds 9 8,121 2,489
The notes on pages 55 – 58 are an integral part of these financial statements. The financial statements set out on pages 54 – 58 
were approved by the Board of Directors and authorised for issue on 21 September 2015 and are signed on its behalf by.
Haywood Chapman   Ian Smith 
Director   Director 55 Castleton Technology plc Annual Report 2015
Strategic Report
Governance
Financial Statements
Notes to the Company Financial Statements
year ended 31 March 2015
1 Accounting policies (UK GAAP)
Castleton T echnology plc has taken advantage of the exemption provided under Section 408 of the Companies Act 2006 not to 
disclose the Company profit and loss account. The loss made by the Company in the year was £1,056,276 (2014: £6,579,000).
The principal accounting policies, which have been applied consistently throughout the year in the preparation of the financial 
statements are:
(a) Basis of accounting
The financial statements have been prepared under the historical cost convention in accordance with the Companies Act 2006 
and applicable accounting standards in the United Kingdom.
(b) Basis of preparation
The financial statements have been prepared on a going concern basis in accordance with UK GAAP .
The Directors have prepared detailed cash flow projections including sensitivity analysis on key assumptions. The Group’s 
forecasts and projections, taking account of reasonably possible changes in trading performance and the timing of key strategic 
events, show the Group will be able to operate within the level and conditions of available funding. Based on the level of support 
demonstrated by the oversubscribed equity placing on 30 June and the funding available, the Directors have a reasonable 
expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. 
 (c) Investments in subsidiaries
Investments are initially recognised at cost, being the fair value of the consideration given and including acquisition costs 
associated with the investment. The carrying value of investments is reviewed for impairment if events or changes in 
circumstances indicate that the carrying value may not be recoverable.
(d) Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, 
based on tax rates and laws that are enacted or substantively enacted by the balance sheet date.
(e) Share-based payments transactions
Equity-settled share-based payment transactions
The cost of equity-settled transactions with employees is measured by reference to the fair value of the award at the date at which 
they are granted and is recognised as an expense in the subsidiary over the vesting period, which ends on the date at which the 
relevant employees become fully entitled to the award. The fair value of the employee services received in exchange for the grant 
of options in Castleton T echnology plc shares is recognised as a capital contribution in the subsidiary. Fair value is determined by 
an external valuer using an appropriate pricing model for which the assumptions are approved by the Directors. In valuing equity-
settled transactions, only vesting conditions linked to the market price of the shares of the Company are considered.
No expense is recognised in the subsidiary for awards that do not ultimately vest, except for awards where vesting is conditional 
upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied, provided 
that all other performance conditions are satisfied.
At each balance sheet date before vesting, the cumulative expense is calculated, representing the extent to which the vesting 
period has expired and management’s best estimate of the achievement or otherwise of non-market conditions, number of equity 
instruments that will ultimately vest or in the case of an instrument subject to a market condition, be treated as vesting described 
above. The movement in the cumulative expense since the previous balance sheet date is recognised in the income statement of 
the subsidiary, with a corresponding entry in equity.
Where the terms of an equity-settled award are modified or a new award is designated as replacing a cancelled or settled award, 
the cost based on the original award terms continues to be recognised over the original vesting period. In addition an expense is 
recognised in the subsidiary over the remainder of the new vesting period for the incremental fair value of any modification, based 
on the difference between the fair value of the original award and the fair value of the modified award, both as measured on the 
date of the modification. No reduction is recognised if this difference is negative.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet 
recognised for the award is recognised immediately. Any compensation paid up to the fair value of the award at the cancellation 
or settlement date is deducted from equity, with any excess over fair value being treated as an expense in the income statement 
of the subsidiary.
(f) Foreign currencies
The functional and presentation currency of Castleton T echnology plc is Pounds Sterling.
Transactions in foreign currencies are initially recorded in the functional currency by applying the rate of exchange ruling at 
the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional 
currency rate of exchange ruling at the balance sheet date. All differences are taken to the profit and loss. 56 Castleton Technology plc Annual Report 2015
Notes to the Company Financial Statements continued
year ended 31 March 2015
1 Accounting policies (UK GAAP) continued
(g) Employees and Directors emoluments 
The Company had no employees during the year. The Directors’ emoluments are paid by Redstone Group Holdings Limited. 
Their remuneration is disclosed in this annual report.
(h) Compound financial instruments
Convertible loan notes are accounted for under FRS 25. On initial recognition the equity and liability elements of the compound 
instruments are identified and the fair value of the various components is determined. The liability component is recognised 
initially at the fair value of a similar liability that does not have an equity conversion option. The equity component is recognised 
initially as the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability. 
After initial recognition, the equity is not remeasured until the final settlement. The liability component is accounted for by 
application of the effective interest rate method.
(i) Equity financial instruments
Share warrants that are issued outside of the scope of FRS 20 are measured at fair value at date of issue. They are classified as 
equity instruments based on the substance of the contractual arrangements entered into whereby a fixed amount of cash will be 
received for a fixed number of the Company’s own equity instruments.
2 Investments in subsidiaries
Investments in 
subsidiaries 
£000
Cost 
At 1 April 2014 1,977
Cost of acquisitions 9,085
At 31 March 2015 11,062
Provision 
At 1 April 2014 187
Charge in year 1,790
At 31 March 2015 1,977
Net book value 
At 31 March 2015 9,085
At 31 March 2014 1,790
The Directors annually review the carrying amount of the Company’s investment for impairment. Following this review, the 
Directors believe that carrying value of the investments is supported by their underlying net assets and cash flows
3 Debtors
2015 
£000
2014 
£000
Amounts due from subsidiary undertakings 1,100 649
Other Debtors 50 50
1,150 699
Amounts due from subsidiary undertakings are unsecured, interest-free and have no fixed payment terms.
4 Creditors: Amounts falling due within one year
2015 
£000
2014 
£000
Loan Notes 1,730 –
Amounts owed to subsidiary undertakings 353 –
Accruals 31 –
2,114 –
On 18 November 2014, the Company issued £1 million of zero coupon convertible loan notes as part consideration for the entire 
share capital of Documotive Limited. On 30 June 2015, the loan notes were converted into fully paid ordinary shares at a price of 
1.1 pence per share.  57 Castleton Technology plc Annual Report 2015
Strategic Report
Governance
Financial Statements
4 Creditors: Amounts falling due within one year continued
On 1 March 2015, the holders of zero coupon convertible loan notes in Castleton T echnology Intermediate Holding Company 
Limited, a subsidiary of Castleton T echnology plc, which were issued as part consideration for the entire share capital of Keylogic 
Limited, exercised a call option to transfer the loan notes into Castleton T echnology plc.
5 Share-based payment plans
See note 25 in the Consolidated Financial Statements.
6 Auditors’ remuneration
 The Company audit fee is £22,000 (2014: £4,000). This fee was borne by another Group company.
7 Called up share capital
2015 
Number
2014 
Number
2015 
£000
2014 
£000
Allotted, called up and fully paid share capital 
Ordinary shares of 0.1p (2012: 0.1p)
1 April 623,717,357 548,717,357 624 549
Share issues 531,818,181 75,000,000 532 75
31 March 1,155,535,538 623,717,357 1,156 624
Allotted, called up and unpaid share capital
Redeemable preference shares of 10p
1 April and 31 March 500,000 500,000 50 50
T otal issued share capital 1,156,035,538 624,217,357 1,206 674
Ordinary shareholders have the right to attend, vote and speak at meetings, receive dividends, and receive a return on assets in 
the case of a winding up. 
The redeemable preference shares may be redeemed at the Company’s option at any time without payment of a premium.  
On a winding up they rank ahead only of the ordinary shares and will be repaid at par. Redeemable preference shareholders do 
not have the right to vote and speak at meetings nor to receive dividends. 
Share issue
During the year the following shares were issued:
2015 
Number
2014 
Number
Placing with investors 531,818,181 75,000,000
531,818,181 75,000,000
In order to raise cash to purchase Documotive, repay a portion of the loan notes used to fund the acquisition of Montal and 
to provide sufficient working capital to fund further acquisitions, on 18 November 2014, the Company raised £5.65 million by 
way of an equity placing of 513,636,000 new ordinary shares at a price of 1.1 pence per ordinary share. A further 18,182,181 new 
ordinary shares were issued on this date as a result of the conversion of the remainder of the loan notes issued to fund the 
Montal acquisition.
Warrants
During the year, in acknowledgement of being the Cornerstone Placee in the Group’s share issue, 57 .8 million share warrants 
were issued to MXC Capital Plc, acting in its capacity as shareholder. The fair value of the warrants is calculated using a Monte 
Carlo simulation option pricing model. 
The weighted average fair value of the warrants issued during the period determined using the Monte Carlo simulation option pricing 
model, including a 20% discount for lack of marketability, was 0.64 pence per warrant. The significant inputs into the model were 
weighted average share price of 1.3 pence per share at the grant date, an exercise price of 1. 1 pence per share shown above, volatility 
of 85%, nil dividend yield, an expected warrant life of two and a half to six years, and an annual risk-free interest rate of 1.67%. 58 Castleton Technology plc Annual Report 2015
Notes to the Company Financial Statements continued
year ended 31 March 2015
8 Reserves
Equity 
Instruments 
£000
Share premium 
account 
£000
Profit and loss 
account 
£000
At 1 April 2014 – 5,925 (4,110)
Loss for the year – – (1,056)
Loan notes issued in the year 1,010 – –
Share warrants issued in the year 370 (370) –
Share-based payment – – 12
Shares issued in the year – 5,134 –
At 31 March 2015 1,380 10,689 (5,154)
Two convertible loan notes were issued during the year as part of the consideration for the acquisitions of Documotive Limited 
and Keylogic Limited and Opus Information T echnology Limited. The fair value of the equity components of the convertible loan 
notes are based on a Black Scholes option pricing model under standard option pricing assumptions.
In addition, on 29 October 2014, in acknowledgement of being the Cornerstone Placee in the Group’s share issue, 57 .8 million 
share warrants were issued to MXC Capital Plc. The fair value of the warrants is calculated using a Monte Carlo simulation option 
pricing model.
9 Reconciliation of movements in shareholders’ funds
2015 
£000
2014 
£000
(Loss) for the year (1,056) (6,579)
Distribution of shares in Redcentric Holdings Limited on demerger – (500)
Share-based payments 12 117
Equity instruments issued 1,380 –
Shares Issued, net of costs 5,296 6,000
Net increase in shareholders’ funds 5,632 (962)
Opening shareholders’ funds 2,489 3,451
Closing shareholders’ funds 8,121 2,489
10 Control
In the opinion of the Directors, there is no single controlling party. 59 Castleton Technology plc Annual Report 2015
Strategic Report
Governance
Financial Statements
Notes Notes Notes  60 Castleton Technology plc Annual Report 2015
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Castleton T echnology plc Annual Report 2015