Contact
 
Advanced Computer Software plc 
Munro House, Portsmouth Road, 
Cobham, Surrey KT11 1TF 
 
T: 01932 584 000
F: 01932 584 015 
E:  investor-relations@advcomputersoftware.com 
Advanced Computer Software plc Annual Report 2010
Annual Report 2010
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Overview
Advanced Computer Software plc
Annual Report 2010
Profile
Advanced Computer Software plc  
is a leading supplier of technology 
solutions to the health, care and 
commercial markets.
The Group comprises three main 
divisions: Business Solutions, Health  
& Care and Managed Services. 
Together, these divisions provide  
a range of software and IT services  
that enable public, private and  
third sector organisations to maintain 
control, improve visibility and gain 
efficiencies through streamlined 
processes.
Advanced has over 7 ,000 customers 
and prides itself on developing long-
term relationships with its customers  
to meet their evolving needs.
The Group is well positioned to  
deliver further growth and value  
by continuing to expand rapidly 
through product innovation,  
selective acquisitions and technical 
collaboration.
Contents
 
Overview 
1 Operational and financial highlights
2 Business at a glance
4 Chairman’s statement
6 Chief Executive’s review
Business review 
8 Operations
12 Financial review
Governance 
15  Corporate social responsibility 
statement
17 Board of Directors
18 Directors’ report
21 Corporate governance
24 Statement of Directors’ responsibilities
25 Directors’ remuneration report
27  Independent auditor’s report to the 
members of Advanced Computer 
Software plc
Financials  
29 Consolidated income statement
30  Consolidated statement of 
comprehensive income
31  Consolidated balance sheet
32  Consolidated cash flow statement
33  Consolidated statement of changes 
in equity
34  Notes to the consolidated 
financial statements
60  Company balance sheet
61  Notes to the financial statements 
of the Company
64  Company information Advanced Computer Software plc
Annual Report 2010
1
Overview Business review Governance Financials
 Financial highlights
   Revenues up 312% to £30.2m (2009: £7.3m) 
– Organic growth of 8% for Adastra 
   Pro-forma* revenues of £91.5m, generating pro-forma 
EBITDA of £21.7m
   Adjusted reported EBITDA** up 249% to £7.2m (2009: £2.1m) 
   Profit before tax up 281% to £4.2m (2009: £1.1m)
   EPS of 1.1p (2009: 0.8p) 
   Net debt of £41m
  – Operating cash conversion 88%*** 
  –  Loan facility of £55m agreed with HSBC/Royal Bank of Scotland 
comprising £25m term loan and £30m revolving facility 
 Operational highlights
   Successful acquisition of five companies
  –  COA Solutions adds £58m annual revenue of which approximately 
£30m is from public sector customers including healthcare, 
emergency services and not-for-profit organisations, and builds 
Advanced’s product portfolio, improves access to decision makers 
within the public sector for its broad product portfolio and opens up 
new markets for cross-selling
  –  Business Systems Group, now known as Advanced Managed 
Services, adds expertise in the healthcare and commercial  
markets and provides managed services and hosting for 66  
NHS customers across 100 NHS sites
  –  StaffPlan and Healthy Software augment the healthcare  
product portfolio 
  –  Oak Labs India adds off-shore development capability to  
support all divisions
   Advanced now serves 344 of the 392 NHS Trusts, provides 
workforce scheduling for 37 police constabularies across the UK  
and manages more than 5.7m NHS procurement transactions
   Organic growth with new product development 
  – Launch of iNurse, Summary Care Record and End-of-Life Register 
   Entry into NHS Health Checks market
  – Partnership with Pfizer provides hosted solution to pharmacies 
Operational and financial highlights
During the year, Advanced has progressed 
its strategy to be a leading provider of 
software and services to the health, care  
and commercial markets whilst focusing  
on driving organic growth from its core 
businesses.
* Pro-forma numbers account for all acquisitions as if acquired on 1 March 2009. 
**  Adjusted EBITDA is defined as profit from operations before depreciation, amortisation, one-off restructuring  
costs, aborted transaction costs and share based payments.
***  The operating cash conversion rate is the measure of the cash generated in operations as a percentage of 
adjusted EBIT (excluding amortisation of intangibles and one-off restructuring costs). Overview
Advanced Computer Software plc
Annual Report 2010
2
Business at a glance
Advanced has a clear structure focusing  
on specific areas of expertise in the health 
and care, managed services and business 
solutions markets. 
In the 18 months since Advanced began 
trading, a combination of organic growth 
and growth by selective acquisition has 
seen pro-forma* revenues rise to over £91m 
and EBITDA to over £21m. Advanced is  
now the 5th largest UK-based provider of 
software and services to the UK market**.
Following a restructuring in February 2010,  
the Group now comprises three divisions, 
each managed separately but with a 
common cross-selling policy to maximise 
Group revenue.
Advanced has built a strong position in  
the Healthcare sector – its software is the 
market leader for Out-of-Hours applications 
and 95% of NHS Trusts take one or more of  
its products.
To complement its suite of healthcare 
products Advanced has added a managed 
service and outsourcing capability as the 
Group believes the challenge to reduce  
costs and improve service quality will drive 
customers towards hosted and managed 
service solutions.
Advanced also has a strong presence  
in the commercial sector through its 
financial, human capital and document 
management solutions which improve 
efficiency and lower costs across a wide 
blue chip customer base.
* Pro-forma numbers account for all acquisitions as if acquired on 1 March 2009.
** Tech market view – UK Software Rankings 2010. Advanced Computer Software plc
Annual Report 2010
3
Overview Business review Governance Financials
Products
Open Accounts/e2 
(financial management)
Collaborative Planning/Clearview 
(budgeting and forecasting)
Open People/ASR/eHRM 
(human capital and payroll 
management)
EROS 
(procurement)
Version One 
(document management)
Divisions
Market
The primary markets for Health  
& Care are Out-of-Hours including 
NHS trusts, walk-in centres and 
polyclinics; and Out-of-Hospital 
which addresses the provision of 
solutions for residential care homes, 
hospices, clinics, care-at-home and 
pharmacy health check services.
Market
Managed Services solutions are 
targeted at both the public and 
private sectors and our customers 
include NHS trusts, retailers, banks, 
financial institutions and public 
bodies. Depending on customers' 
needs, we can take over some or all 
back-office IT functions, enabling 
customers to operate more efficiently 
at a reduced cost.
Market
Business Solutions targets the United 
Kingdom commercial market and 
offers a complete back-office solution 
to a wide variety of customers in the 
retail, transport, not-for-profit, housing, 
business services and leisure sectors.
Products
Adastra  
(patient work flow management)
Crosscare  
(patient care management)
iNurse/iConnect  
(mobile solutions for district nurses 
and carers)
Summary Care Record/ 
End-of-Life Register  
(patient record management)
Staff Plan/Origin  
(rostering and scheduling solutions)
e5, efinancials  
(financial and human capital 
management)
Analytics 
(corporate, financial and  
people analytics)
Services
A full range of services including 
application hosting, management, 
bespoke development, website 
maintenance, and e-commerce 
solutions. 
Health  
& Care
No.1 provider of  
Out-of-Hours solutions
Managed 
Services
Innovative business 
systems management
Business 
Solutions
Award winning Enterprise 
software solution
2010 Health & Care revenue £m
Reported 15.8 Reported 11.8 Reported 2.6
Pro-forma 49.4 Pro-forma 18.4 Pro-forma 23.7
2010 Managed Services revenue £m 2010 Business Solutions revenue £m Overview
Advanced Computer Software plc
Annual Report 2010
4
Michael Jackson 
Chairman
Chairman’s statement
This year has been one of transformation  
for Advanced, which has acquired five 
companies as part of its strategy to be  
a leading provider of software and services 
to the health, care and commercial markets. 
Revenues have grown by 312% to £30.2m 
(2009: £7 .3m), including organic growth  
of 8%, adjusted EBITDA* rose 249% to £7 .2m 
(2009: £2.1m) and pre-tax profits were up 
281% to £4.2m.
*   Adjusted EBITDA is defined as profit from operations before interest, tax, depreciation, amortisation,  
one-off restructuring costs, aborted transaction costs and share based payments. Advanced Computer Software plc
Annual Report 2010
5
Overview Business review Governance Financials
I am pleased with our results which reflect a strong contribution from our  
first acquisition Adastra, acquired in August 2008, and good contributions 
from companies acquired during the year. Visibility of future turnover  
is excellent with 55% recurring revenue from maintenance, hosting and 
services contracts.
Of the companies acquired during the year, StaffPlan Limited (‘StaffPlan’) 
and Healthy Software Limited (‘Healthy Software’) specialise in software for 
the health and social care sector; Business Systems Group Limited (‘BSG’)  
and COA Solutions Limited (‘COA’) provide products and managed services 
to both the public and commercial sectors; and Oak Labs India Private, with 
its high quality, low cost, off-shore base in Bangalore, significantly enhances 
our product development capabilities. Furthermore with COA, we also 
acquired an efficient infrastructure around which to consolidate our back 
office operations.
In March, just after the year-end, we acquired Cerrus Limited (‘Cerrus’)  
which provides systems to manage delivery of care, resource planning and 
operational requirements of more than sixty community health and social 
care providers in the United Kingdom and Ireland.
We have broadened our product and services portfolio during the year to 
encompass pharmacy services, the emergency services, charities, residential 
and domiciliary care providers, hospices, human capital and financial 
management solutions. We have entered new markets by adapting and 
redeveloping products already owned within the Group and have added 
new capabilities that offer substantial opportunities for cross-selling across  
our enlarged customer base.
At Advanced our expectations are high and I would like to sincerely  
thank my fellow directors and all Group employees for living up to these 
expectations in what has been an exciting and productive year. Despite  
the backdrop of economic uncertainty we have continued to take on new 
challenges whilst keeping firmly focused on our core business.
We now have a strong platform for further growth. No doubt there will be 
challenges arising from the anticipated cutbacks in public spending but we 
are confident that our products and services will thrive as we continue to offer 
our customers new and more cost-effective ways to manage their operations.
Michael Jackson
Chairman
30 July 2010 Overview
Advanced Computer Software plc
Annual Report 2010
6
Vin Murria 
Chief Executive
Chief Executive’s review
Advanced has the clearly defined strategy 
to be a leading provider of software  
and services to the health, care and 
commercial markets. 
During the year, we have, by  
a combination of organic growth and 
selected strategic acquisitions, broadened  
our healthcare focus from the out-of-hours 
and unscheduled medical care market  
to the wider out-of-hospital primary care 
market which includes both private and 
public sectors and covers health centres, 
pharmacies, district nurses, care homes, 
hospices and palliative end-of-life care  
– in short the entire patient journey.
We have also acquired a range of products 
for commercial applications and added a 
managed services capability to underpin 
all Group offerings. Advanced Computer Software plc
Annual Report 2010
7
Overview Business review Governance Financials
Advanced has grown organically by identifying new markets for existing 
products in the Group and has combined existing and acquired technologies 
and expertise to create new opportunities. For example, the functionality of 
Healthy Software’s Crosscare product has been combined with the Adastra 
patient workflow solution to create a new patient management solution for 
community health and wellbeing applications which has the potential to be 
extended to cosmetic and dental clinic settings. We are also particularly 
excited about our partnership with Pfizer for the support of their NHS vascular 
health check service using our core patient management software provided 
on a Software-as-a-Service (‘SaaS’) basis and believe that this is the first of 
many similar applications for our software.
The acquisitions of StaffPlan, Healthy Software and COA have extended  
our product portfolio to include software solutions for accounting, document 
management, workforce scheduling, human resource management, 
back-office administration, operational intelligence and analytics. All  
these products are targeted at both the public and commercial sectors. The 
acquisition of BSG has added hosting and managed services capabilities  
that are increasingly being recognised by healthcare authorities and other 
organisations as ways to achieve cost savings when budgets come  
under pressure.
Restructuring and integrating our acquired businesses quickly and  
effectively is part of our strategy to improve operating efficiency. Following 
the successful restructuring of Adastra reported last year, Advanced  
acquired BSG in June 2009. The post-acquisition review concluded that  
its low margin hardware infrastructure sales operation would benefit from 
being outsourced to BT Engage, so releasing cost savings from premises and 
allowing management to focus on higher margin business more appropriate 
to the Group’s strategy. This plan was successfully executed in July 2009, 
resulting in the operating margin of BSG improving from below 1% to 13%. 
The Board is currently reviewing the operations of COA, acquired at the year 
end, and is confident of achieving significant cost savings and synergies in 
the short term to improve the operating margin for this business. At the date 
of this report annualised cost savings and synergies of over £2m have been 
identified; COA’s, accounting, document management and payroll products 
have been rolled out across several Group companies; and senior 
management and head office functions of both Advanced and COA have 
been integrated to provide a new robust infrastructure for the Group.
I am personally looking forward to another year of growth and opportunity. 
Advanced has achieved a great deal since it began trading in August  
2008 – its pro-forma* revenue is now over £91m and EBITDA more than  
£21m, and we expect to build upon this success in the coming year.
Vin Murria
Chief Executive Officer
30 July 2010
*   Pro-forma revenue and EBITDA includes the results of the acquired subsidiaries as if they had been  
acquired on 1 March 2009. Advanced Computer Software plc
Annual Report 2010
8
Business review
Business review
Operations 
Advanced commenced trading in August 
2008 and since that date has become a 
leading provider of software solutions and 
services to the healthcare and commercial 
sectors by a combination of organic growth 
and selective acquisition. Our pro-forma 
turnover is £91.5m and we have more than 
800 UK and overseas employees and 7 ,000 
customers across three divisions. We have 
strong visibility of future revenues – 55% of our 
pro-forma turnover is contractually recurring 
and a further 35% is repeatable business 
generated from our existing customer base. 
At the year end the Group’s forward order 
book stood at £27 .3m, further compelling 
evidence of the Group’s growth potential.
Advanced’s strategy is to grow by a combination of selective acquisitions 
and organic growth. The acquisitions for the year under review were Business 
Systems Group Ltd (“BSG”), providing managed services and outsourcing to 
healthcare and commercial customers; StaffPlan Ltd and Healthy Software 
Ltd, offering software and services to the healthcare sector; Oak Labs India 
Private Ltd providing a low cost base for development projects; and COA 
Solutions Ltd (“COA”), a leading supplier of financial and human capital 
management solutions.
BSG, acquired in June 2009, is an important component of our plan to offer  
a complete and integrated service to all our customers, including hosted and 
SaaS based offerings. Since its acquisition, we have restructured BSG, saving 
around £1m of annualised costs, and have outsourced its low margin 
hardware infrastructure business to BT Engage. 
Our acquisitions in the healthcare sector during the year, StaffPlan and Healthy 
Software, have been fully integrated into the Group and we are happy with the 
contribution made to the Group results for the year and expect this to continue.
Prior to the acquisition of COA in mid February. Advanced was structured  
as two divisions – Health & Care and Managed Services. The acquisition of 
COA brought new products to the Group portfolio which broadly fell into two 
categories: those servicing the public sector including healthcare customers; 
and those primarily targeted at the commercial sector. From March 2010  
the first category of COA’s products and customers became part of the  
Health & Care division. The second category of COA’s products and  
customers formed the basis of a new division – Business Solutions, targeted  
at commercial markets.
Each division is headed by a managing director to ensure effective and 
efficient operational control, but has a common cross-selling strategy to 
maximise Group results.
This restructuring has not impacted the year under review as the results from 
COA for the two weeks of ownership by Advanced are not significant for 
reporting purposes and therefore the divisional review reflects the divisional 
structure of the Group during the year together with an overview of the 
Business Solutions division going forward. 
95% 
customer  
retention rate
8% 
organic growth  
for Adastra
55% 
pro-forma  
recurring revenue Advanced Computer Software plc
Annual Report 2010
9
Overview Business review Governance Financials
Business 
Working with partners in the NHS, local government and the private sector, 
the Advanced Health & Care division is providing IT in support of safe and 
efficient care delivery and greater information for the care provider. The 
Group’s unique proposition is the breadth of integrated health and care 
solutions – from patient-facing IT systems through to back-end operational 
systems and services.
Highlights of the year include the successful launch of three new products 
born out of the core patient management workflow solution: iNurse, a mobile 
solution directed at bringing cost and resource efficiencies to the district nurse 
community; End-of-Life Care Register which gives the patient control over his/
her medical future; and Summary Care Record, a snapshot of the patient’s 
medical record that can be transferred around the primary care network to 
improve diagnosis and treatment. 
Advanced’s presence in the unscheduled ‘walk-in’ care setting including 
polyclinics and GP-led health centres has doubled in the year and the 
offering for the management of end-of-life patients has broadened with  
the addition of the Crosscare Hospice Patient Management System.
The Group’s Out-of-Hours solution remains the class leader in the 
management of patients in this demanding care setting and is being 
expanded into new care settings such as lifestyle clinics, single point of 
access, referral management and minor injuries units. 
Mobile information solutions for carers in community nursing and homecare 
continues to grow and ‘first of its type’ pilot projects have been established  
to show how telehealth and telecare can be integrated into care services.  
The Group anticipates further deployment of mobile solutions such as iNurse 
and iConnect which support the provision of efficient and safe care in the 
community. In addition, Advanced Health Checks has quickly established 
itself as a leader for solutions in high street health checks.
Outlook 
The outlook remains positive for the Health & Care division. Further take-up  
of Advanced Health Checks and End-of-Life Register is expected and the 
success of implementations in minor injury units suggests that our solutions for 
this market will enjoy a wide roll-out. Deeper market penetration of Crosscare 
into hospice management and private and workplace care settings is also 
anticipated. Other plans for expansion include re-configuring the core 
products for new care settings such as lifestyle and single point of access 
clinics, and referral management.
Health & Care
No.1 
Provider of Out-of-
Hours solutions Advanced Computer Software plc
Annual Report 2010
10
Business review
Managed Services
Business 
The Managed Services division designs, deploys and operates IT services 
from the desktop to the data centre, helping customers to align their IT 
systems to their core business requirements. This is achieved by providing 
application development and managed services that focus on the core utility 
components of customers’ IT operations (for example monitoring, backup, 
email and hosting). Services are delivered either as a hosted solution that  
is managed via the Advanced data centre suite or as a hybrid solution 
utilising a combination of delivery channels.
Highlights of the year include a multi-million pound five-year contract to 
provide a full back-office and trading desk solution for a leading financial 
services company, and the successful outsoucing to BT Engage of the low 
margin infrastructure business in July 2009 which has helped to improve  
profit margins in combination with annualised cost savings of around £1m.
The success of this division can be attributed to its breadth of offering and 
focus on developing new and enhanced products and services aimed at 
lowering operating costs and/or increasing business efficiency. Recent 
developments include an enhanced managed email service that is being 
built on Microsoft Exchange 2010 and our Reporting Services Consolidator 
product which has been developed utilising several different technologies 
from the Microsoft product stack. The Reporting Service Consolidator has 
already been deployed at several customer sites.
Outlook 
With market analysis indicating that there will be opportunities for growth  
in managed services and outsourcing, the outlook for this area of the business 
is positive. The economic recovery will allow us to actively market our 
managed services and outsoucing solutions around the key messages of 
scalability and operational efficiency. 
There is also considerable opportunity to cross-sell managed services and 
solutions to customers across the wider Group. Advanced believes that the 
acquisition of COA, for example, has brought 2,400 customers that could  
be classified as a “good fit” for products and services from the Managed 
Services division.
Business review continued
Operations 
12%
increase in  
operating margin Advanced Computer Software plc
Annual Report 2010
11
Overview Business review Governance Financials
Business Solutions
Business 
Following the acquisition of COA in February 2010, the Group now includes  
a Business Solutions division which delivers a comprehensive suite of financial, 
human capital and corporate performance management solutions and 
collaborative applications, to a wide variety of commercial customers in the 
retail, transport, not-for-profit, housing and business services sectors. 
The Group is constantly improving its product suite in response to customer 
and industry needs and this approach is ensuring that the business retains a 
competitive position in the United Kingdom’s mid-market. Bolt-on applications 
to finance and human capital management systems such as corporate 
performance management, business intelligence, electronic document 
management and e-procurement solutions, which improve efficiency, cut 
costs and deliver greater financial visibility, will be key revenue generators  
in the short to medium term.
COA was awarded the title of Enterprise Software Package of the Year at the 
prestigious Accountancy Age Awards 2009 for its financial solutions package. 
Outlook
The challenging economic climate is driving businesses towards greater 
business efficiency and better returns on their current software investments. 
Our collaborative products can be bolted on to existing applications to give 
greater visibility and therefore control of costs and resources. These same 
products also offer cost-selling opportunities across the wider Group.
Enterprise 
software 
package of  
the year 2009 Advanced Computer Software plc
Annual Report 2010
12
Business review
Revenue
Group turnover for the year was £30.2m including £14.3m of revenue from 
Adastra (2009: £7.3m). The table below summarises the business’ individual 
results. For future reporting, it is intended that the results of the healthcare 
businesses (Adastra, StaffPlan, Healthy Software and Cerrus) will be 
consolidated as one divisional result.
   Healthy   Central Group 
 Adastra StaffPlan Software BSG COA costs results
Revenue £m 14.3 1.2 0.3 11.8 2.6   30.2
Adjusted EBITDA £m 5.9 0.2 0.0 1.5 0.6 (1.0) 7.2
Adjusted EBITDA  
percentage 41% 17% 0% 13% 23%   24%
Gross profit margin
Gross profit margin, calculated as turnover less third party software and 
services costs, was 76% (2009: 83%) for the year across the Group. It should be 
noted that the comparative relates only to Adastra.
Adjusted EBITDA
Adjusted EBITDA is calculated as EBITDA excluding post acquisition 
reorganisation and transaction costs, share based payments and amortisation 
of intangible assets and was £7.2m for the year of which £5.9m related to 
Adastra (2009: £2.1m).
Earnings per share
Earnings per share rose 35% from 0.8p to 1.1p. If the impact of the mid-year 
placing was assumed to have taken place on the date of the acquisition of 
COA, the assumed earnings per share would be 1.7p, an increase of 110%.
Research and development expenditure
Expenditure on research and development in the year was £0.8m (2009: 
£0.2m) of which £0.3m (2009: £0.1m), relating to the development of new 
products, was capitalised in accordance with IFRS.
Pro-forma results
The table below shows the pro-forma operating results of the Group’s trading 
subsidiaries as if the results of all the acquisitions made during the year had 
been included from 1 March 2009, normalised for cost savings and operational 
changes arising from acquisition.
   Healthy   Central Group 
 Adastra StaffPlan Software BSG COA costs results
Revenue £m 14.3 2.0 1.0 15.7 58.5   91.5
Adjusted EBITDA £m 5.9 0.3 0.3 2.1 14.1 (1.0) 21.7
Adjusted EBITDA  
percentage 41% 17% 29% 13% 24%   24%
Order book 
At the year end the Group’s forward order book stood at £27.3m (2009: £0.9m).
Cash and net debt
At the year-end, following the acquisition of COA, the Group had cash  
and cash equivalents of £10.3m (2009: £14.7m) and net debt of £41m  
(2009: net cash of £14.7m).
Business review continued
Financial review  Advanced Computer Software plc
Annual Report 2010
13
Overview Business review Governance Financials
Cash generated from operations was £5.2m giving an operating cash 
conversion rate of 88% (2009: 30%). The increase in trade and other  
receivables at the year end was due to the seasonal billing of support  
and maintenance contracts.
Capital expenditure has increased during the year and comprises expenditure 
on internal equipment for general use in addition to expenditure on equipment 
and infrastructure for use in hosting and managed services environments. 
In June 2009 the Group raised £42.4m, net of fees, from the issue of new shares 
to use as a ‘war chest’ for future acquisitions. The funds were subsequently 
used for the funding of four acquisitions in the year including the acquisition  
of COA in February 2010 for approximately £100m including transaction fees.
Banking facilities
Advanced negotiated a bank facility of £55m with HSBC and Royal Bank of 
Scotland in February 2010 in connection with the acquisition of COA and the 
provision of working capital for the Group. The facility is structured as £25m of 
term debt and £30m of revolving loan facility both falling due for repayment 
in August 2013. At the year-end £51m of the facility had been drawn down to 
cover the acquisition of COA and associated transaction costs.
The interest rate on both the term debt and the revolving facility varies 
between 2% and 3.25% over LIBOR depending on the Group’s net debt to 
EBITDA ratio.
In April 2010, an agreement was reached with Royal Bank of Scotland to 
hedge two thirds of the term debt for the period of the loan by way of a cap  
on LIBOR of 3.3%.
Taxation
The effective rate of taxation on profit before tax and exceptional items was  
24% compared with 28% for the previous year. The difference between the 
effective rate of tax and the statutory rate of 28% reflects the utilisation of losses 
available to the Group and the normal level of disallowable expenditure.
Pensions
The Group contributes to various defined contribution, money purchase 
schemes for its employees.
Key performance indicators (KPIs)
The following financial and non-financial KPIs are some of the tools used  
by the Board and management to monitor the performance of trading 
businesses in the Group:
Financial indicators 
  2010  2009
  Managed   Managed
 Health & Care Services  Health & Care Services
Gross margin as  
a percentage of  
revenue  86%  59%   83%  –
Adjusted EBITDA  
as a percentage  
of revenue* 38%  13%  31%  –
 
*  Adjusted EBITDA is defined as profit before interest, taxation, depreciation, amortisation, one-off restructuring and 
transaction costs and share-based charges.
Non-financial indicators
Operational KPIs include the utilisation of service teams, service desk calls 
from customers and response times, and the qualified sales pipeline. These 
KPIs are reviewed regularly with the senior management team. Advanced Computer Software plc
Annual Report 2010
14
Business review
Principal risks and uncertainties
The Board considers that the Group’s principal commercial and financial risks 
to achieving its objectives are:
Changes in government legislation or policy
The United Kingdom has recently changed Government and there is currently no 
guarantee that the current level of IT spending will be sustained.
Dependence on the public sector
Approximately 50% of the Group’s customer base arises from the public sector. 
If this sector is affected by budgetary constraints then the Group’s business and 
financial results may be affected.
Competition and technological change
The Group’s current and potential competitors may develop and introduce new 
products and services that could be priced at a lower level, provide superior 
performance or achieve greater market acceptance than the Group’s products 
and services.
Senior management
The Group’s future success is substantially dependent upon its senior 
management. The loss of a member of the senior management team could 
harm or delay the Group’s plans for growth whilst management time is 
directed to finding suitable replacements.
Intellectual property
The Group has certain trademark rights in existence or with applications 
pending over its product and service names and also owns certain domain 
names used in its operations. However, the Group could be challenged by 
third parties as to the ownership of, or right to use, such intellectual property. 
Customer contracts
A proportion of the Group’s business is derived from supplying ongoing services 
based on purchase orders and an implied acceptance by customers of 
standard terms and conditions. Despite historically very high levels of customer 
retention there is a risk that the Group’s customers might not retain the services 
or honour terms and conditions.
Environmental regulation
The Group is subject to extensive and changing environmental protection  
and health and safety laws and regulations. Ongoing compliance with 
environmental, health and safety laws and regulations could require the 
Group to incur significant expenses, limit its ability to modify or expand its 
premises or require expenditure on capital improvements.
Barbara Firth
Chief Financial Officer
Business review continued
Financial review continued Advanced Computer Software plc
Annual Report 2010
15
Overview Business review Governance Financials
Corporate social responsibility statement
The Group’s corporate and social responsibility priorities are:
Customers
The Group is committed to achieving the highest levels of customer  
service and satisfaction in line with delivering high-quality, reliable  
products and services. 
Health & Care 
The Group provides clinical and back-office software and services to 
customers in the healthcare sector and is conscious of its responsibility  
to provide robust, often mission-critical, solutions that affect the lives and 
well-being of patients and vulnerable people requiring care.
To keep our products and services up to date and in line with new healthcare 
initiatives we regularly undertake clinical review meetings with practicing 
GPs and continuously monitor our performance on service incidents.
Managed Services 
The Group works closely with customers to identify and provide cost-effective 
services to optimise their business’ quality and efficiency. We appreciate  
that these services are critical to our customers’ own business success and 
therefore our services are governed by service level agreements to 
demonstrate our commitment to providing these services.
Business Solutions
The Group provides accounting and human capital management solutions  
to a wide variety of commercial enterprises, which are designed to improve 
business efficiency. We consistently invest significant sums in the development 
of our products to offer our customers best-of-breed solutions.
Advanced recognises its corporate social 
responsibility and is committed to carrying  
on business responsibly and to managing its 
relationships with stakeholders with integrity  
and transparency. The Group provides products  
and services to organisations in both the public 
and the private sectors through its three divisions 
and, takes the reliability of its products and the 
delivery and efficiency of its services seriously. 
Our solutions are directed towards offering our 
customers more cost-effective, secure and better 
ways to manage their operations – of paramount 
importance in these challenging times. Advanced Computer Software plc
Annual Report 2010
16
Governance
Employees
The Group invests heavily in its staff and it therefore aims to maintain a high 
level of staff retention by providing a positive work environment in which all 
staff can thrive. This is illustrated by (i) recognising and rewarding outstanding 
performance; (ii) investing in training and personal development; and  
(iii) ensuring that career success and progression within the Group is solely 
determined by ability and achievement.
The Group firmly believes in equal opportunities and treats all potential 
recruits and employees fairly, regardless of disability, race, gender, age,  
gender orientation or religious and political beliefs. 
Health and safety
The Group is committed to providing a safe and healthy environment for all  
its staff, contractors and visitors and delegates responsibility to the managing 
directors of each businesses unit who are accountable for the health and safety 
of their employees. Each business unit reviews its own strategy, issues and 
performance on a regular basis.
Donations
The Group’s supports various local community projects from time to time  
and also contributes financial support to charitable organisations. In the year 
ended February 2010, £125,000 of the Chief Executive Officer’s salary was 
waived by her in favour of a donation to her chosen charity.
Environment
The Group recognises the importance of its responsibilities to the environment 
and follows environmental regulations at all times. The Group believes that 
small efforts for the environment can together make a significant contribution 
overall.
Travel 
The Group encourages the use of conference calls and tele-conferences 
wherever possible to minimise business travelling.
Recycling 
The Group encourages recycling and appropriate facilities are provided in  
all offices.
Electricity, gas and water usage 
The Group is aware that these are finite resources and business units are 
encouraged to apply for environmental accreditation where appropriate. 
Business Systems Group Limited holds the Environmental Management System 
accreditation ISO 1400.
Environmental initiatives
Version One plants a tree across the United Kingdom for each software product 
purchase and for every 10 trees planted a refurbished computer is shipped to 
Africa for use by African school children. For further information about Version 
One’s Clean and Green Initiative please refer to www.versionone.co.uk/news/
clean-and-green-2009.php.
Environmental awards
COA Solutions has been awarded the Green Apple Award 2009 and Green 
Hero Award 2010 from The Green Organisation. For information about COA 
Solutions’ Green Apple Award 2009 please refer to www.coasolutions.com/
news/green-apple-09.php. 
Version One have been awarded the Green Apple Award 2009, Green  
IT Award 2010 and Green Hero Award 2010. For further information about 
Version One’s Green Apple Awards, please refer to www.versionone.co.uk/
news/green-apple-09.php and www.versionone.co.uk/news/version-one-wins-
green-it-award.php.
Corporate social responsibility statement 
continued Advanced Computer Software plc
Annual Report 2010
17
Overview Business review Governance Financials
Board of Directors
3 4
1 2
1. Michael Jackson, Chairman 
Michael became Chairman of Advanced in August 2008 and is Chairman of 
the Audit Committee. He founded Elderstreet Investments Limited in 1990 and 
is its Executive Chairman. For the past 25 years, he has specialised in raising 
finance for, and investing in, the smaller companies sector. Michael was 
previously Chairman of The Sage Group plc, Computer Software Group plc and 
Party Gaming Plc. He is also a director and investor in many other quoted and 
unquoted companies. 
2. Vin Murria, Chief Executive Officer
Vin joined Advanced in August 2008 as Chief Executive Officer with over  
20 years’ experience of working for private equity backed and publicly listed 
companies focusing on the software sector. She was formerly Chief Executive 
Officer of Computer Software Group Plc, which was taken private in April 2007 
and subsequently merged with IRIS Software Group Limited in July 2007 
before being sold to Hellman & Friedman in a transaction worth £500m.  
Vin is a partner at Elderstreet Capital and a Non-Executive Director  
of Greenco plc.
3. Barbara Firth, Chief Financial Officer
Barbara has many years of experience in senior managerial and financial 
roles and was previously Chief Financial Officer of Computer Software Group 
plc where she worked closely with Vin Murria and Michael Jackson until the 
merger with IRIS Software Group Limited in July 2007. Following the merger 
Barbara was Acquisitions and Integration Director of the combined group until 
joining Advanced in September 2009.
4. Mark Watts, Non-Executive Director
Mark became a Non-Executive Director of Advanced in August 2008 and  
is Chairman of the Remuneration Committee. He is joint managing partner  
in Marwyn Capital LLP and Marwyn Investment Management LLP and a 
director of many portfolio companies including Melorio plc, Praesepe plc  
and Silverdell plc. At Marwyn, Mark and fellow managing partner James 
Corsellis have undertaken over 50 transactions, raising approximately £1bn  
in acquisition funding for Marwyn-backed management teams and special 
purpose acquisition vehicles from 2002 to date. Advanced Computer Software plc
Annual Report 2010
18
Governance
The Directors present their annual report and the audited financial statements 
of Advanced Computer Software plc (the Company) and the Group for the  
12 months ended 28 February 2010.
Principal activities
Advanced is a leading provider of technology solutions to the healthcare  
and commercial markets delivered, in the year under review, through its two 
divisions Health & Care and Managed Services. 
Business review
The Companies Act 2006 requires us to present a fair review of the business 
performance and development of the Group. A review of the activities of the 
Group, its financial performance and its likely future business developments, 
including a description of the principal risks and uncertainties facing the 
Group, is provided in the Chairman’s statement, the Chief Executive’s review, 
the business review and the financial review – all of which are incorporated 
into this report by reference.
Results and dividends
The Group profit for the year after provision for taxation was £3.2m  
(2009: £0.8m). The Board’s current dividend policy is to invest cash flow in  
its operations and accordingly the Directors do not recommend the payment  
of a dividend for the year (2009: £nil). The dividend policy is kept under 
regular review.
Acquisitions
The Group made five acquisitions during the year, further details of which  
are set out in note 11 to the financial statements.
Post balance sheet events
There were no significant events after 28 February 2010 other than the 
acquisition of Cerrus Limited on 2 March as disclosed in note 26 to the  
financial statements.
Going concern
The financial statements have been prepared on a going concern basis  
as, after making appropriate enquiries, the Directors have a reasonable 
expectation that the Group has adequate resources to continue to operate  
for the foreseeable future.
Research and development
During the year the Group capitalised £0.3m (2009: £0.1m) in research and 
development relating to internal software development. Other research and 
development costs not meeting the criteria for capitalisation were written off 
during the year. 
Financial instruments
Financial instruments, including financial risk management objectives and 
policies, policy for hedging, exposure to price risk, credit risk, liquidity risk  
and cash flow risk are disclosed in note 20 to the financial statements.
Political and charitable contributions
The Group made charitable contributions during the year of £0.2m  
(2009: £0.1m relating to the waiver of Chief Executive’s salary, which,  
together with the associated Employers National Insurance Contribution 
saving, was donated to a charity of her choice.
In accordance with the Board’s policy no political donations were made 
during the year.
Employees
The Group’s culture is to promote the involvement of all its staff in its business 
aims and performance by linking reward to achievement. Many employees 
are stakeholders in the business through participation in share option and 
Sharesave schemes.
Directors’ report Advanced Computer Software plc
Annual Report 2010
19
Overview Business review Governance Financials
The Group adopts an equal opportunities policy under which training and 
career development opportunities are available to all employees regardless  
of gender, religion, race, disability or sexual orientation. Fair consideration is 
given to applications for employment from disabled people and the retention 
and retraining, where practicable, of employees who become disabled is 
encouraged.
Directors 
The Directors who held office during the 12 months to 28 February 2010 were  
as follows:
Vinodka Murria Chief Executive Officer 
Karen Bach Chief Financial Officer resigned 14 August 2009
Barbara Firth Chief Financial Officer appointed 1 September 2009
Michael Jackson Non-Executive Chairman 
Mark Watts Non-Executive director
Details of the remuneration of all Directors who served during the year and 
their interests in the ordinary share capital of the Company are given in the 
Directors’ remuneration report.
The Group maintained cover during the year for its Directors and officers  
and those of subsidiary companies under a Directors’ and officers’ liability 
insurance policy, as permitted by the Companies Act 2006.
Substantial shareholdings
At the date of this report, the Company has been notified of the following 
holdings of 3% or more of its issued ordinary capital:
      Percentage of  
      issued share capital
M&G Investment Management      14.94%
Marwyn Investment Management LLP     12.00%
Blackrock Investment Management      10.24%
Vin Murria*       10.16%
ISIS Equity Partners LLP       4.48%
Rensburg Sheppards Investment Management     4.09%
Legal & General Investment Management     4.02%
Gerard N Life Interest Trust       3.94%
Fidelity Investments       3.36%
*  The percentage of issued share capital held by Vin Murria at the date of this report includes the growth interest  
in 17,761,651 shares awarded to her on 4 March 2010.
Share capital
Details of the authorised and issued share capital, together with details of the 
movement in the Company’s issued share capital during the year are shown 
in note 24 to the financial statements.
At the date of this report the Company consisted of 354,880,592 issued and 
fully paid ordinary shares with a nominal value of 10p per share, listed on  
the Alternative Investment Market of the London Stock Exchange. Of these, 
17 ,761,651 shares were held jointly by the Employee Benefit Trust and Vin 
Murria. The Company has one class of ordinary shares which carry no right to 
fixed income. Each share carries the right to one vote at general meetings of 
the Company. The Trustee of the Employee Benefit Trust and Vin Murria have 
agreed to abstain from voting at any general meeting in respect of the jointly 
owned shares.
There are no specific restrictions on the size of holding nor on the transfer of 
shares which are both governed by the general provisions of the Articles of 
Association and prevailing legislation. The Directors are not aware of any 
agreements between holders of the Company’s shares than may result in 
restrictions on the transfer of securities or voting rights. Advanced Computer Software plc
Annual Report 2010
20
Governance
No person has any special rights of control over the Company’s share capital 
and all issued shares are fully paid.
Details of employee share schemes are set out in note 25 to the financial 
statements.
Significant agreements
There are a number of agreements that take effect, alter or terminate upon  
a change of control such as commercial contracts, bank loan agreement  
and employee share plans. The only one of these which is considered to be 
significant in terms of likely impact on the business of the Group as a whole,  
is the bank facility (as described in note 20 to the financial statements) which 
requires majority lender consent for any change on control. Should such 
consent not be forthcoming, a change of control would trigger a mandatory 
repayment of the entire facility.
The directors are not aware of any agreements between the Company and its 
directors or staff that provide for compensation for loss of office or employment 
that occurs because of a change of control.
Purchase of own shares
The Company was authorised by shareholders at the 2009 Annual General 
Meeting to purchase up to 10% of its own ordinary shares in the market. This 
authority was not utilised during the year.
Supplier payment policy
The Group recognises the importance of good relationships with its suppliers 
and subcontractors. Although the Group does not follow any particular code  
or standard on payment practice, its established payment policy is to agree 
payment terms in advance of any commitment being entered into and to 
ensure that payments are made in accordance with agreed terms.
Trade creditor days for the Group for the 12 months ended 28 February 2010 
were 48 (2009: 28).
Auditors
The Directors confirm that, as at the date this report was approved, and so far 
as each Director is aware, there is no relevant audit information of which the 
Group’s auditors are unaware and that each Director has taken all the steps 
that he ought to have taken as a Director in order to make himself aware of 
any relevant audit information and to establish that the Group’s auditors are 
aware of that information.
BDO LLP have expressed their willingness to continue in office as auditors and 
a resolution to appoint them and authorise the Directors to determine their 
remuneration for the ensuing year will be proposed at the forthcoming Annual 
General Meeting.
Annual General Meeting
The Annual General Meeting will be held at Munro House, Portsmouth Road, 
Cobham, Surrey KT11 1TF on 2 September 2010 at 3pm. Details of the 
resolutions to be proposed are contained in the Notice of Annual General 
Meeting sent to shareholders with this annual report.
By order of the Board
Barbara Firth
Director
30 July 2010
Directors’ report continued Advanced Computer Software plc
Annual Report 2010
21
Overview Business review Governance Financials
The Board is committed to the principles of good corporate governance set  
out in the Financial Reporting Council Combined Code (‘Combined Code’) 
and complies so far as is appropriate for an AIM-listed company of its size. 
This statement, together with the statement of Directors’ responsibilities on  
page 24 and the Directors’ remuneration report, indicates how the Company 
has applied the principles of the Combined Code.
The role of the Board
The Board’s principal responsibility is to deliver shareholder value and provide 
the overall vision and leadership for the Company. It determines corporate 
strategy, reviews the Group’s operating and financial performance to ensure  
it is effectively controlled, and is the primary decision-maker for all matters 
considered to be significant to the Group as a whole.
There is a formal schedule of matters reserved for approval by the Board 
including the approval of acquisitions and divestments, budgets and business 
plans, commercial strategy, major capital expenditure, treasury policy, 
corporate governance, risk control and the appointment of new directors.
Board composition and balance
The Board, chaired by Michael Jackson, comprises two Executive Directors  
and two Non-Executive Directors. Collectively, the Directors have a wide range 
of relevant business and financial experience and knowledge which  
is vital to the success of the Group.
The Chairman and Chief Executive have clearly defined and distinct roles 
which are reviewed annually by the Board. The Chairman is responsible  
for corporate governance, shareholder communications and the efficient 
operation of the Board. The Chief Executive is responsible for the day-to-day 
operation of the Group and leads the communication programme with 
analysts and potential investors.
The Board annually reviews its performance and considers that it has the 
correct balance of Executive and Non-Executive Directors for a company  
of its size and stage of growth. Mark Watts is the Senior Independent Director 
and is responsible for the appraisal of the Chairman’s performance.
Board process
The Board carries out its duties with the assistance of the Board committees.
The Board meets regularly during the year and additional meetings are 
arranged as necessary for specific purposes. Full and timely information is 
provided to the Board to enable it to function effectively and to allow Directors 
to discharge their responsibilities. 
The table below shows the number of monthly meetings individual Directors 
could have attended during the year (taking account of eligibility, 
appointment and retirement dates) and their actual attendance.
 No. of meetings  Meetings attended
Michael Jackson 11 10
Vin Murria 11 11
Barbara Firth (appointed 1 September 2009) 6 6
Mark Watts 11 11
Karen Bach (resigned 14 August 2009) 5 5
The Board has procedures in place to deal with potential conflicts of interest 
and confirms that the procedures have operated effectively during the year 
under review.
Corporate governance Advanced Computer Software plc
Annual Report 2010
22
Governance
There is an agreed procedure for Directors to take independent professional 
advice if necessary and at the Company’s expense; this is in addition to the 
access that every Director has to the advice and services of a Company 
Secretary, who is responsible to the Board for ensuring that the Board 
procedures are followed and that applicable rules and regulations are 
complied with.
Internal control and risk management
The Directors have overall responsibility for ensuring that the Group maintains  
a system of internal control to provide them with reasonable assurance 
regarding effective and efficient operations, internal financial control and 
compliance with laws and regulations. The risk management process and 
system of internal control are designed to manage rather than eliminate risk 
and the Board recognises that this system of internal control can only provide 
reasonable and not absolute assurance against material mis-statement or loss.
The Group has a clearly defined organisational structure. Managers assume 
responsibility for running day-to-day operational activities and employees are 
required to follow procedures and policies appropriate to their position within 
the business.
The Board is responsible for identifying, evaluating and managing all major 
business risks facing the Group. To facilitate the assessment of risks, monthly 
reports on non-financial matters are compiled by all business units covering 
such matters as sales performance, project progress, compliance, health and 
safety, environment, product quality, customer support metrics and human 
resource issues.
The Group has a comprehensive system for reporting financial results to the 
Board. Monthly accounts for each business unit, with a financial commentary 
comparing current year performance with budget and forecast, together  
with key performance metrics, are prepared in accordance with the Group 
accounting policies and principles for Board consideration and the 
identification of any action necessary.
The Board monitors the Group’s funding requirements, treasury function and 
banking and facilities and approves capital and significant investment 
expenditure.
The Directors have considered the need for an internal audit function but have 
concluded that the size and complexity of the Group does not yet justify the 
expense. The requirement for an internal audit function will continue to be 
reviewed periodically.
Election and re-election of Directors
Directors are initially appointed until the following Annual General Meeting 
when, under the Company’s Articles of Association, it is required that they  
be elected by shareholders. The Company’s Articles of Association require  
that Directors retire and stand for re-election at least once every three years.
Directors’ indemnity and insurance
In accordance with the Articles of Association, the Company has provided 
indemnities to the Directors (to the extent permitted by the Companies Act) in 
respect of liabilities incurred as a result of their office. The Company has taken 
out an insurance policy in respect of those liabilities for which Directors may 
not be indemnified. Neither the indemnity nor insurance provides cover in the 
event that the Director is proved to have acted dishonestly or fraudulently.
Corporate governance continued Advanced Computer Software plc
Annual Report 2010
23
Overview Business review Governance Financials
Audit Committee
The Audit Committee assists the Board to discharge its responsibilities for 
ensuring the integrity of the Company’s external reporting, the assessment  
of the adequacy and effectiveness of internal financial control, and monitoring 
the Group’s accounting policies and compliance with accounting standards. 
The members of the Audit Committee consider that they have the requisite 
skills and experience to fulfil the responsibilities of the Audit Committee.
The Audit Committee is chaired by Michael Jackson and meets on at least  
two occasions each year. The Group’s auditors have direct access to the Audit 
Committee at any time to raise any matters of concern or for discussion.
The table below shows the number of meetings individual Directors could 
have attended during the year (taking account of eligibility, appointment  
and retirement dates) and their actual attendance.
 No. of meetings Meetings attended
Michael Jackson 2 2
Mark Watts 2 2
Remuneration Committee
The report of the Remuneration Committee can be found on page 25.  
The Committee is chaired by Mark Watts and meets at least once a year.  
The table below shows the number of meetings individual Directors could 
have attended during the year (taking account of eligibility, appointment and 
retirement) and their actual attendance.
 No. of meetings Meetings attended
Mark Watts 3 3
Michael Jackson 3 3
Nomination Committee
There is no separate Nominations Committee and the appointment of new 
Directors is considered by the Board as a whole.
Relations with shareholders
The Board attaches great importance to maintaining good relationships with 
its institutional shareholders. Following the announcement of the half-year  
and year-end results, a series of formal meetings with institutional shareholders 
is undertaken which allows the Executive Directors to form relationships with 
the investors and for the shareholders to raise any concerns. The Company’s 
brokers and financial PR advisers provide feedback from investor and analyst 
meetings which are presented to the Board. 
The Annual General Meeting provides a welcome opportunity for the Board  
to communicate directly with shareholders. 
The Company maintains a website which contains information on 
the Group, regulatory announcements and financial statements:  
www.advancedcomputersoftware.com. Advanced Computer Software plc
Annual Report 2010
24
Governance
The Directors are responsible for preparing the annual report, The Directors’ 
remuneration report and the Group and Parent Company financial statements 
in accordance with applicable laws and regulations.
Company law requires the Directors to prepare Group and Parent  
Company financial statements for each financial year. Under that law  
they are required to prepare Group financial statements in accordance  
with International Financial Reporting Standards (IFRS) as adopted by the 
European Union (EU), and have elected to prepare the Parent Company 
financial statements in accordance with United Kingdom Generally Accepted 
Accounting Practice (United Kingdom Accounting Standards  
and applicable law).
Under Company law, the Directors must not approve the financial statements 
unless they are satisfied that they give a true and fair view of the state of 
affairs of the Group and the Parent Company and of the profit or loss of the 
Group for that period. The Directors are also required to prepare financial 
statements in accordance with the rules of the London Stock exchange  
for companies trading securities on the Alternative Investment Market.
In preparing these financial statement, the Directors are required to:
•  select suitable accounting policies and then apply them consistently;
•  make judgements and estimates that are reasonable and prudent; 
•  state whether IFRS as adopted by the EU, and applicable United Kingdom 
Accounting Standards have been followed, subject to any material 
departures disclosed and explained in the Group and Parent Company 
financial statements respectively; and
•  prepare the financial statements on the going concern basis unless it is 
inappropriate to presume that the Group will continue in business. 
The Directors are responsible for keeping adequate accounting records that are 
sufficient to show and explain the Group and Parent Company’s transactions 
and disclose with reasonably accuracy at any time the financial position of 
the Group and the Parent Company and to enable them to ensure that the 
financial statements comply with the Companies Act 2006. They are also 
responsible for safeguarding the assets of the Company and the Group and 
hence for taking reasonable steps for the prevention and detection of fraud 
and other irregularities. 
The Directors are responsible for ensuring the annual report and financial 
statements are made available on the Company’s website in accordance  
with legislation in the United Kingdom governing the preparation and 
dissemination of financial statements, which may vary from legislation  
in other jurisdictions. The maintenance and integrity of the Company’s website 
is the responsibility of the Directors. The Directors’ responsibility also extends  
to the ongoing integrity of the financial statements contained therein.
Statement of Directors’ responsibilities Advanced Computer Software plc
Annual Report 2010
25
Overview Business review Governance Financials
As Chairman of the Remuneration Committee, I am pleased to present the 
Remuneration Committee’s report on Directors’ remuneration for the year 
ended 28 February 2010.
Our policy is to remunerate Directors appropriately given the size and stage  
of growth of the Group and to continue to focus on performance-related 
remuneration.
Executive Directors
The remuneration package for Executive Directors comprises both fixed and 
variable elements and includes:
• basic salary
•  discretionary bonus (though none was paid in the year  
to 28 February 2010)
• defined contribution to personal pension plans
• other benefits such as car allowance and life assurance.
In 2008 and 2010, the Group granted Management Participation Shares (MPS) 
to certain Directors to align their interests with shareholders. The details of the 
MPS scheme are summarised in note 25 to the financial statements.
During the year Vinodka Murria and Barbara Firth both agreed to contribute 
£250 per month into the Company’s Save As You Earn Scheme and therefore 
were granted an option over the following shares.
 SAYE 
 Number of shares granted  
 over the period to February 2010
Vinodka Murria 4,167
Barbara Firth 4,167
Non-Executive Directors
The Board determines the remuneration of the Non-Executive Directors. 
Michael Jackson is remunerated through payroll and the fees for Mark Watts’ 
services are invoiced by Marwyn Capital LLP.
Service contracts
The service contracts and letters of appointment of the Directors include the 
following terms:
 Date of appointment Notice period
Executive Directors  
Vinodka Murria 27 August 2008 12 months
Barbara Firth 1 September 2009 6 months
Non-Executive Directors  
Michael Jackson 27 August 2008 12 months
Mark Watts 27 August 2008 3 months
The Executives are on rolling contracts and offer themselves for re-election by 
rotation in accordance with the Company’s Articles of Association.
Directors’ remuneration report Advanced Computer Software plc
Annual Report 2010
26
Governance
Directors’ remuneration for the year to 28 February 2010
       February February
       2010 2009
      Consult- Total Total
  Salary    ancy remun- remun-
 Salary waived Bonus Benefits Pension fees eration eration
 £000 £000 £000 £000 £000 £000 £000 £000
Executive Directors
Vinodka Murria
1
 16 193 – 9 – – 218 106
Barbara Firth
2
 74 – – – 5 – 79 –
Karen Bach
3
 65 – – – 4 – 69 75
Non-Executive  
Directors
Michael Jackson 25 – – – – – 25 13
Mark Watts – – – – – 15 15 9
 180 193 – 9 9 15 406 203
1  Vinodka Murria waived her right to the full salary, car allowance and pension due under her employment 
contract and elected until January 2010 to receive £15,000 gross salary per annum and from February 2010 
£24,000 gross salary per annum. The difference in salary, plus the value of the Employers’ National Insurance 
Contributions saved by the Company was paid to the charity of Vinodka’s choice.
2 Barbara Firth was appointed on 1 September 2009.
3 Karen Bach resigned on 14 August 2009.
Michael Jackson
Chair of the Remuneration Committee
Directors’ remuneration report continued Advanced Computer Software plc
Annual Report 2010
27
Overview Business review Governance Financials
We have audited the financial statements of Advanced Computer Software 
plc for the year ended 28 February 2010 which comprise the consolidated 
income statement, the consolidated statement of comprehensive income,  
the consolidated balance sheet, the consolidated cash flow statement, the 
consolidated statement of changes in equity, the Company balance sheet 
and the related notes. The financial reporting framework that has been 
applied in the preparation of the Group financial statements is applicable  
law and International Financial Reporting Standards (IFRSs) as adopted  
by the European Union. The financial reporting framework that has been 
applied in preparation of the Parent Company financial statements is 
applicable law and 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. To the fullest extent permitted by law, we do not accept or 
assume responsibility to anyone other than the Company and the Company’s 
members as a body, for our audit work, for this report, or for the opinions we 
have formed.
Respective responsibilities of directors and auditors
As explained more fully in the statement of directors’ responsibilities, 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 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
An audit involves obtaining evidence about the amounts and disclosures  
in the financial statements sufficient to give reasonable assurance that the 
financial statements are free from material misstatement, whether caused  
by fraud or error. This includes an assessment of: whether the accounting 
policies are appropriate to the Group’s and the Parent Company’s 
circumstances and have been consistently applied and adequately  
disclosed; the reasonableness of significant accounting estimates made  
by the directors; and the overall presentation of the financial statements. 
Opinion on financial statements
In our opinion: 
•  the financial statements give a true and fair view of the state of the  
Group’s and the Parent Company’s affairs as at 28 February 2010 and  
of the Group’s profit for the year then ended;
•  the Group financial statements have been properly prepared in 
accordance with IFRSs as adopted by the European Union;
•  the Parent Company’s 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.
Independent auditor’s report to the members 
of Advanced Computer Software plc  Advanced Computer Software plc
Annual Report 2010
28
Governance
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the Directors’ report for the financial 
year for which the financial statements are prepared is consistent with the 
financial statements. 
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.
James Roberts 
(Senior statutory auditor)
For and on behalf of BDO LLP, statutory auditor
30 July 2010
BDO LLP is a limited liability partnership registered in England and Wales (with 
registered number OC305127).
Independent auditor’s report to the members 
of Advanced Computer Software plc continued Advanced Computer Software plc
Annual Report 2010
29
Overview Business review Governance Financials
Consolidated income statement 
for the 12 months ended 28 February 2010
   2010 2009
  Notes £000 £000
Revenue  4 30,191 7 ,327
Cost of sales   (7,356) (1,244)
Gross profit   22,835 6,083
   
Administrative costs   (18,966) (5,349)
   
Adjusted EBITDA    7,200 2,061
Reorganisation/transaction costs post acquisition   (65) (321)
Share based payments (IFRS2)   (572) (244)
Depreciation  13 (698) (107)
Amortisation of intangible assets (IFRS3)  12 (1,996) (436)
Aborted transaction costs    – (219)
   
Profit from operations  6 3,869 734
  
Finance income  7 410 365
Finance costs  7 (110) (6)
   
Profit before taxation   4,169 1,093
   
Taxation  9 (1,000) (302)
   
Profit for the period   3,169 791
Earnings per share   
Basic (pence)  10 1.1 0.8
Diluted (pence)  10 1.0 0.8
The notes on pages 34 to 59 form part of these financial statements. Advanced Computer Software plc
Annual Report 2010
30
Financials
Consolidated statement of comprehensive income 
for the 12 months ended 28 February 2010
   2010 2009
   £000 £000
Foreign exchange translation differences   27 –
Net income recognised directly in equity   27 –
   
Profit for the year   3,169 791
   
Total comprehensive income for the year   3,196 791
The notes on pages 34 to 59 form part of these financial statements. Advanced Computer Software plc
Annual Report 2010
31
Overview Business review Governance Financials
Consolidated balance sheet 
as at 28 February 2010
   2010 2009
  Notes £000 £000
Non-current assets  
Intangible assets  12 158,862  12,433 
Property, plant and equipment  13 3,781  432 
Total non-current assets   162,643  12,865 
  
Current assets  
Inventories  14 629  239 
Trade and other receivables  15 22,208  1,867 
Cash and cash equivalents  16 10,279  14,656 
Total current assets   33,116  16,762 
  
Total assets   195,759  29,627 
  
Current liabilities  
Trade and other payables  17 (42,155) (2,584)
Corporation tax   (879) (390) 
Loans and borrowings  20 (34,144)  – 
Total current liabilities   (77,178) (2,974)
  
Non-current liabilities  
Deferred tax  18 (23,032) (1,093)
Provisions  19 (1,130) (118)
Loans and borrowings  20 (15,873)  – 
Total non-current liabilities   (40,035) (1,211)
   
Total liabilities   (117,213) (4,185)
   
Net assets   78,546  25,442 
  
Equity  
Share capital  24 35,488  19,092 
Share premium  24 33,361  5,426 
Merger reserve  24 7,826  2,821 
Foreign exchange reserve  24 27  –
Share trust reserve  24 (1,954) (1,954)
Retained earnings  24 3,798  57 
Total equity attributable to equity holders of the Company  78,546 25,442 
The notes on pages 34 to 59 form part of these financial statements.
These financial statements were approved by the board of directors and authorised for 
issue on 30 July 2010 and were signed on its behalf by:
Barbara Firth
Director Advanced Computer Software plc
Annual Report 2010
32
Financials
Consolidated cash flow statement 
for the 12 months ended 28 February 2010
   12 months 14 months
   ended ended 
   28 February 28 February
   2010 2009
  Notes £000 £000
Cash flows from operating activities  
Profit for the period   3,169 791
Adjustments for  
Depreciation  13 698 107
Amortisation of intangible assets  12 1,996 436
Share based payment – IFRS 2  25 572 244
Net finance income  7 (300) (364)
Income tax expenses  9 1,000 302
 
Operating cash flows before movement in working capital  7,135 1,516
  
Increase/(decrease) in trade and other payables   996 (893)
Increase in trade and other receivables   (3,120) (521)
Decrease in stock   200 408
  
Cash generated in the operations   5,211 510
 
Corporation tax paid   (359) (879)
   
Net cash in/(out) flows from operating activities   4,852 (369)
  
Cash flows from investing activities  
Acquisition of subsidiaries (net of cash acquired)  11 (101,287) (3,594)
Net finance income   300 364
Development expenditure   (340) (135)
Acquisition of PPE   (277) (20)
  
Cash outflow from investing activities   (101,604) (3,385)
  
Cash flows from financing activities  
Proceeds from issue of new shares   43,575 14,635
Cost of issue of shares   (1,199) (474)
Proceed from new loan   25,000 –
Borrowing fees   (1,265) – 
  
Cash from financing activities   66,111 14,161
  
Change in cash and cash equivalents   (30,641) 10,407
Cash and cash equivalents at start of previous period  14,656 4,249
  
Cash and cash equivalents at the end of the period   (15,985) 14,656
The notes on pages 34 to 59 form part of these financial statements. Advanced Computer Software plc
Annual Report 2010
33
Overview Business review Governance Financials
Consolidated statement of changes in equity
 Ordinary    Share Foreign 
 share  Share Merger trust exchange Retained  
 capital premium reserve reserve reserve earnings Total 
 £000 £000 £000 £000 £000 £000 £000
Balance at  
28 February 2009 19,092 5,426 2,821 (1,954) – 57 25,442
Issue of share capital
For cash 14,525 29,050 – – – – 43,575
In respect of  
acquisition of  
subsidiaries 1,871 – 5,005 – – – 6,876
Costs of issuing  
share capital – (1,115) – – – – (1,115)
Share based  
payments – – – – – 572 572
Total comprehensive  
income for the period – – – – 27 3,169 3,196
Balance at  
28 February 2010 35,488 33,361 7,826 (1,954) 27 3,798 78,546
 Ordinary    Share Foreign 
 share  Share Merger trust exchange Retained  
 capital premium reserve reserve reserve earnings Total 
 £000 £000 £000 £000 £000 £000 £000
Balance at  
1 January 2008 4,500  – – – – (978) 3,522 
Issue of share capital
For cash 8,609  6,026  – – – – 14,635 
To Employee  
Benefit Trust 1,954  – – (1,954) – – –
In respect of  
acquisition of  
subsidiary 4,029  – 2,821  – – – 6,850 
Costs of issuing  
share capital – (600) – – – – (600)
Share based payment – – – – – 244  244 
Total comprehensive 
income for the period – – – – – 791  791 
Balance at  
28 February 2009 19,092  5,426  2,821  (1,954) – 57  25,442 
The notes on pages 34 to 59 form part of these financial statements. Advanced Computer Software plc
Annual Report 2010
34
Financials
Notes to the consolidated financial statements
1 General information
Advanced Computer Software plc (AIM: ASW, ‘Advanced’, or ‘the Company’), a leading 
provider of software and IT services to the primary care sector, is a limited liability 
company and is listed on AIM (a market of the London Stock Exchange). The Company’s 
registered address is Munro House, Portsmouth Road, Cobham, Surrey KT11 1TF and the 
Company’s registration number is 5965280.
The Group financial statements consolidate those of the Company and its subsidiaries 
(together referred to as the ‘Group’). The Parent Company financial statements present 
information about the Company as a separate entity and not about its Group.
The consolidated financial statements have been prepared in accordance with 
International Financial Reporting Standards (IFRSs) as adopted by the European Union. 
The Company has elected to prepare its Parent Company financial statements in 
accordance with UK GAAP. The Company’s subsidiaries are prepared in compliance 
with UK GAAP. The principal accounting policies used in preparing the financial results 
are detailed in note 3.
2 Basis of preparation
Measurement convention
The financial statements are prepared on the historical cost basis.
Subsidiary basis of consolidation
Subsidiaries are entities controlled by the Group. Control exists when the Group has the 
power, directly or indirectly, to govern the financial and operating policies of an entity so 
as to obtain benefits from its activities. In assessing control, potential voting rights that are 
currently exercisable or convertible are taken into account. The financial statements of 
subsidiaries are included in the consolidated financial statements from the date that 
control commences until the date that control ceases.
Functional and presentation currency
The financial information is presented in sterling, which is the functional currency  
of the Group. All financial information presented in sterling has been rounded to the 
nearest thousand.
3 Significant accounting policies 
Changes in accounting policies
Certain new standards, amendments and interpretations to existing standards have 
been published that are mandatory for the Group’s accounting periods beginning on  
or after 1 March 2009, have been adopted in the financial statements. None of these 
standards have had an impact on the current or prior year results or net assets of the 
group, therefore no further disclosure is given.
IAS 1 Presentation of Financial Statements (Revised) includes the requirement to present 
a Statement of Changes in Equity as a primary statement and introduces the possibility 
of either a single Statement of Comprehensive (combining the Income Statement and  
a Statement of Comprehensive Income) or to retain the Income Statement with a 
supplementary Statement of Comprehensive Income. The second option has been 
adopted by the Group in the preparation of these financial statements. As this standard 
is concerned with presentation only it does not have any impact on the results or net 
assets of the Group.
IFRS 8 Operating Segments (Issued 30 November 2006). As this is a disclosure standard, 
it has not had any impact on the results or net assets of the Group.
Going concern
The Group’s business activities, together with the factors likely to affect its future 
development, performance and position are set out in the business review on pages  
8 to 11. The financial position of the Group, its cash flows, liquidity position and borrowing 
facilities are described in the financial review on pages 12 to 14. The Directors’ report on 
pages 18 to 20 provides additional information on the future developments of the Group. Advanced Computer Software plc
Annual Report 2010
35
Overview Business review Governance Financials
3 Significant accounting policies continued
The Group is obliged to comply with certain covenants under term loan facilities which 
provide external financing to the Group. Accordingly the Directors have reviewed the 
Group’s forecasts and projections, taking into account reasonable sensitivities and their 
impact. The review indicates the debt facility agreement terms will be met. In addition, 
the Directors have considered risks around financial resources, as set out in note 20.
The Group has a strong underlying business and customer base, with a range of 
customers across divisions. As such the Directors believe the Group is well placed to 
manage it’s business risks successfully.
The Directors have a reasonable expectation that the Group has adequate resources to 
continue in operational existence for the foreseeable future. Thus they continue to adopt 
the going concern basis of accounting in preparing the annual financial statements.
The significant accounting policies adopted by the Group are set out below.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and 
impairment losses. Where parts of an item of property, plant and equipment have 
different useful lives, they are accounted for as separate items of property, plant  
and equipment.
Depreciation
Depreciation is charged to the income statement on a straight-line basis over the 
estimated useful lives of each part of an item of property, plant and equipment.  
The depreciation policies for each class of asset are as follows:
Leasehold improvements – over the period of the lease
Office equipment and furniture – 20% to 331⁄3% straight-line
Computer equipment – 20% to 25% straight-line
Land & buildings – 2% straight-line
Depreciation methods, useful lives and residual values are reviewed at each  
reporting date.
Intangibles
Goodwill
Goodwill is recognised on the acquisition of a subsidiary and is the difference between 
the cost of the acquisition (including related fees) and the fair value of tangible and 
intangible assets acquired. The carrying value of goodwill is reviewed at each reporting 
date, with any impairment required charged to the income statement.
Research and development
Development activities involve a plan or design for the production of new or substantially 
improved computer software. Development expenditure is capitalised only if 
development costs can be measured reliably, the software program is technically and 
commercially feasible, future economic benefits are probable, and the Group has 
sufficient resources available to complete development and to use, lease or sell the asset. 
The expenditure capitalised includes only the cost of gross direct labour costs that are 
directly attributable to preparing the asset for its intended use or third party costs 
incurred directly on the development activities above.
Capitalised development expenditure is measured at cost less accumulated amortisation 
and accumulated impairment losses. Other research and development expenditure not 
meeting the above criteria is recognised in the income statement as incurred. 
Acquired intangibles
Following the acquisitions in the period (see note 11) the assets acquired were classified 
into tangible and intangible assets and fair values applied using the principles of  
IFRS 3. This led to the creation of intangible assets recognised on the consolidated 
balance sheet which will be amortised over their estimated useful lives. The assets 
recognised were:
1. Brand name
2. Customer contracts and relationships
3. Technology assets
4.  In-process research and development Advanced Computer Software plc
Annual Report 2010
36
Financials
Notes to the consolidated financial statements 
continued
3 Significant accounting policies continued
Amortisation
Amortisation is recognised in the income statement within administrative costs on  
a straight line basis over the estimated useful lives of intangible assets, other than 
goodwill, from the date they are available for use. The estimated useful lives for the 
current period are different depending on the profile of the acquisition. The amortisation 
policies for each class of intangible asset are as follows:
•  capitalised development costs are amortised over the period from the date it 
generates revenue. This period is estimated by management as between five  
and eight years.
•  the brand names recognised as a result acquisitions are amortised over a period  
of four to five years.
•  technology assets recognised on the acquisitions will be amortised over four years.
•  customer contracts and relationships recognised on the acquisitions over a period  
of one to 10 years, based on the useful life of the contract or relationship. Customer 
pipelines and backlog are amortised over one year.
Impairment of intangibles and property, plant and equipment
The carrying amounts of the Group’s assets are reviewed at each balance sheet date to 
determine whether there is any indication of impairment. If any such indication exists, 
the assets’ recoverable amount is estimated.
An impairment loss is recognised whenever the carrying amount of an asset, or its 
cash-generating unit, exceeds the asset’s recoverable amount. Impairment losses are 
recognised in the income statement.
Calculation of recoverable amount
The recoverable amount of assets is the greater of their net selling price and value  
in use. In assessing value in use, the estimated future cash flows are discounted to their 
present value using a pre-tax discount rate that reflects current market assessments  
of the time value of money and the risks specific to the asset. For an asset that does  
not generate largely independent cash inflows, the recoverable amount is determined  
for the cash-generating unit to which the asset belongs. Impairments of goodwill are 
never reversed.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is based on the 
first-in first-out principle and includes expenditure incurred in acquiring the inventories 
and bringing them to their existing location and condition.
Net realisable value is the estimated selling price in the ordinary course of business,  
less the estimated costs of completion and selling expenses.
Financial instruments
The Group’s financial instruments comprise cash and various items such as trade 
receivables and trade payables that arise directly from its operations. Finance payments 
associated with financial liabilities are dealt with as part of finance expenses. 
a) Financial assets
The Group’s financial assets are loans and receivables. These assets are non-derivative 
financial assets with fixed or determinable payments that are not quoted in an active 
market. They arise principally through the provision of services to customers (trade 
receivables), but also incorporate other types of contractual monetary asset such as 
deposits on rental property and prepayments, which are contractually recoverable.  
They are initially recognised, at fair value and subsequently carried at amortised cost. 
Unless otherwise indicated, the carrying amounts of the Group’s financial assets are  
a reasonable approximation of their fair values. Advanced Computer Software plc
Annual Report 2010
37
Overview Business review Governance Financials
3 Significant accounting policies continued
b) Financial liabilities
The Group’s financial liabilities are trade payables and other financial liabilities. These 
liabilities are initially recognised at fair value and subsequently measured at amortised 
cost using the effective interest rate method. Unless otherwise indicated, the carrying 
amounts of the Group’s financial liabilities are a reasonable approximation of their  
fair values.
c) Share capital
Financial instruments issued by the Group are treated as equity only to the extent that 
they do not meet the definition of a financial liability. The Group’s ordinary shares are 
classified as equity instruments.
Further information on the Group’s financial instruments can be found in note 20.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances, call deposits and cash on short-
term, fixed-rate deposits for less than three months. Bank overdrafts are repayable on 
demand and form an integral part of the Group’s cash management strategy.
Leased assets
Leases where the Group assumes substantially all the risks and rewards of ownership  
are classified as finance leases. Upon initial recognition, the leased asset is measured  
at an amount equal to the lower of its fair value and the present value of the minimum 
lease payments. Subsequent to initial recognition, the asset is accounted for in 
accordance with the accounting policy applicable to that asset. Other leases are 
operating leases.
Operating lease payments
Payments made under operating leases are recognised in the income statement on a 
straight-line basis over the term of the lease. Lease incentives received are recognised  
in the income statement as an integral part of the total lease expense.
Foreign currency transactions
Transactions in foreign currencies are translated at the foreign exchange rate ruling  
at the date of the transaction. Monetary assets and liabilities denominated in foreign 
currencies at the balance sheet date are translated at the foreign exchange rate ruling 
at that date. Foreign exchange differences arising on translation are recognised in the 
income statement. Non-monetary assets and liabilities that are measured in terms of 
historical cost in a foreign currency are translated using the exchange rate at the date  
of the transaction. 
The assets and liabilities of foreign operations, including goodwill and fair value 
adjustments arising on consolidation, are translated to the Group’s presentational 
currency, sterling, at foreign exchange rates ruling at the balance sheet date. The 
revenues and expenses of foreign operations are translated at an average rate for the 
year, where this rate approximates to the foreign exchange rates ruling at the dates of 
the transactions.
Exchange differences arising from this translation of foreign operations are taken directly 
to the translation reserve and are released into the income statement upon disposal of 
the foreign operation in due course.
Revenue
The Group derives revenue from the sale of software licences, hardware, support and 
installation, project management and other services. These revenue components are 
often entered into as part of a single transaction, however, each element of the contract  
is separable and the fair value associated with each element can be reliably measured.
Revenue is recognised as follows:
•  licence revenue is recognised on invoicing which is when the software and licence 
key have been delivered;
•  infrastructure revenue is invoiced and recognised on delivery to the customer;
•  services and training are invoiced and recognised as and when performed;
•  project revenue is recognised based on the proportion of the total contract completed, 
if the final outcome can be assessed with reasonable certainty. The proportion is 
calculated as costs incurred over total expected costs, applied to total contract  
value; and 
•  support and maintenance are recognised straight-line over the period of cover to 
which they relate.
Amounts billed in excess of revenue recognised are recorded as deferred revenue and 
are included within current liabilities. Advanced Computer Software plc
Annual Report 2010
38
Financials
3 Significant accounting policies continued
Employee Benefit Trust
As the Company is deemed to have some control of the Employee Benefit Trust,  
it is treated as a subsidiary undertaking. The assets (other than investments in the 
Company’s shares), liabilities, income and expenses are included on a line by line  
basis in the consolidated financial statements. The investment in the Company’s shares  
is shown in the share trust reserve and is treated as a deduction from equity in the 
consolidated balance sheet.
Corporation tax
Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised 
in the income statement except to the extent that it relates to items recognised directly in 
equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax 
rates enacted, or substantively enacted, at the balance sheet date and any adjustment 
to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts of 
assets and liabilities for financial reporting purposes and the amounts used for taxation 
purposes. The following temporary differences are not provided for: the initial recognition 
of goodwill; the initial recognition of assets or liabilities that affect neither accounting  
nor taxable profit other than in a business combination, and differences relating to 
investments in subsidiaries to the extent that they will probably not reverse in the 
foreseeable future. The amount of deferred tax provided is based on the expected 
manner of realisation or settlement of the carrying amount of assets and liabilities,  
using tax rates enacted, or substantively enacted, at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable 
profits will be available against which the asset can be utilised.
Employee benefits
Defined contribution plans
Obligations for contributions to defined contribution pension plans are recognised  
as an expense in the income statement as incurred.
Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are 
expensed as the related service is provided. A provision is recognised for the amount 
expected to be paid under short-term cash bonus or profit-sharing plans if the Group has 
a present legal or constructive obligation to pay this amount as a result of past service 
provided by the employee and the obligation can be estimated reliably.
Share-based payment transactions
Share-based payment arrangements in which the Group receives goods or services as 
consideration for it’s own equity instruments are accounted for as equity-settled share-
based payment transactions.
The grant date fair value of options granted to employees is recognised as an  
employee expense, with a corresponding increase in equity, over the period in which the 
employees become unconditionally entitled to the options. The fair value of the options 
granted is measured using an option valuation model, taking into account the terms 
and conditions upon which the options were granted. The amount recognised as an 
expense is adjusted to reflect the actual number of share options that vest except where 
forfeiture is due only to share prices not achieving the threshold for vesting.
Critical accounting estimates and judgements
Impairment of goodwill
The Group is required to test goodwill for potential impairment on an annual basis.  
The recoverable amount is determined based on value in use calculations which 
requires the estimation of future cash flows and the selection of a discount rate in order  
to calculate the present value of the cash flows. Actual outcomes of this calculation may 
vary. Further information including the carrying value is given in note 12. 
Notes to the consolidated financial statements 
continued Advanced Computer Software plc
Annual Report 2010
39
Overview Business review Governance Financials
3 Significant accounting policies continued
Intangible assets
On acquisition of a business, the Group is required to value the assets acquired and 
recognise intangible assets on the balance sheet. The valuation of these assets relies on 
various assumptions, including future revenues and costs derived from those assets and 
the selection of an appropriate discount rate in order to calculate the present value of 
those cashflows. Further information including the carrying value is given in note 12.
Useful lives of intangible assets and property, plant and equipment
Intangible assets, property, plant and equipment are amortised or depreciated over their 
useful lives. These useful lives are based on management’s estimates of the period that 
the assets will generate revenue. These estimates are periodically reviewed for continued 
appropriateness. Changes to estimates can result in significant variations in the carrying 
value and amounts charged to the Consolidated Income Statement in specific periods. 
Inventories
The trading subsidiaries within the Group review the net realisable value of, and 
demand for, their inventory on a regular basis to provide assurance that it is stated at the 
lower of cost and net realisable value. Factors that could impact estimated demand and 
selling prices include the timing and success of future technological innovations, 
competitor activities, supplier prices and economic trends.
Share-based payments
The fair value of share-based payments is estimated using the binominal valuation 
model as at the date of grant and using certain assumptions. These assumptions are 
disclosed in note 25.
Provisions
A provision is recognised in the balance sheet when the group has a present legal or 
constructive obligation as a result of a past event, that can be reliably measured and it is 
probable that an outflow of economic benefits will be required to settle the obligation. In 
arriving at estimates for provisions, estimates and judgements are made, in particular 
with regard to timing and amount. Calculations are based on anticipated future cash 
flows relating to the relevant event, which are estimated by management and where 
appropriate supported by the use of external advisers.
Taxation
The Group is subject to United Kingdom corporate taxation and judgement is required in 
determining the provision for income and deferred taxation. The Group recognises 
taxation assets and liabilities based upon estimates and assessments of many factors 
including past experience, advice received on the relevant taxation legislation and 
judgements about the outcome of future events. To the extent that the final outcome of 
these matters is different from the amounts recorded, such differences will impact on the 
taxation charge made in the Consolidated Income Statement in the period in which such 
determination is made.
Standards, amendments and interpretations to existing standards not yet effective
Certain new standards, amendments and interpretations to existing standards have 
been published that are mandatory for the Group’s accounting periods beginning on  
or after 1 March 2010 and which Advanced has decided not to adopt early. These are:
Standards for accounting periods on or after 1 July 2010:
•  revised IFRS 3 Business Combinations (Issued 10 January 2008). Revised  
IFRS 3 must be adopted at the same time as the Amendment to IAS 27.
•  amendments to IAS 27 Consolidated and Separate Financial Statements (Issued  
10 January 2008). The Amendment to IAS 27 must be adopted at the same time  
as IFRS 3 Revised.
•  amendments to IAS 38 Intangible assets – Additional consequential amendments 
arising for revised IFRS 3.
•  IFRS 2Share-based payment – Scope of IFRS 2 and revised IFRS 3 Business 
combinations.
•  IAS 7 Statement of Cash Flows – Classification of expenditures on unrecognised assets.
•  Group Cash-settled Share-based Payment Transactions (amendments to IFRS 2).
•  amendment to IAS 32 Classification of Rights Issues.
Management is currently assessing the impact of revisions and amendments  
on the financial statements.
Other new endorsed standards, amendments and interpretations to existing standards 
have been published, that management believes will not impact the Group’s financial 
statements going forward.  Advanced Computer Software plc
Annual Report 2010
40
Financials
4 Revenue 
Revenue for the Group was generated from subsidiaries and almost all of the revenue  
is from customers based in the United Kingdom. Revenue can be split into recurring 
(software and hardware support contracts) and non-recurring (services and sale of 
software licenses and hardware). The split of revenues for the 12 months to 28 February 
2010 is shown below.
   12 months  14 months
   ended ended 
   28 February  28 February
   2010 2009
   £000  £000
Recurring revenues   18,483  4,043 
Non-recurring revenues   11,708  3,284 
   30,191 7 ,327
5 Segments
During the period the Group had two reportable segments as described below, which 
were the Group’s divisions. The divisions offered differing solutions and were managed 
separately as they required different resources and strategies. For each of the divisions, 
the Group’s Board reviewed internal management reports on a monthly basis, which 
showed the profit and loss performance of each division. The following summary 
describes the operations of each division:
•  Health & Care: The products of the division are clinical software solutions, including 
medical event management, data distribution and clinical support software to 
urgent and unscheduled ‘operational hub’ healthcare providers.
•  Managed Services: The business of the division is the hosting of IT systems, including 
design, deployment and operation of IT solutions for small and medium sized 
businesses.
The Health & Care division was the only reportable segment for the prior period which 
included six months post acquisition revenue from Adastra. In the year under review,  
the full year Adastra income combined with the acquisitions of Healthy software and 
StaffPlan consolidated for a period of four months and nine months respectively, has 
increased the size of the segment.
The Managed Services division was established during the period following the 
acquisition of BSG, therefore comparative information is not available for the  
prior period. 
Other divisions, such as Business Solutions, which provide a more universal software 
offering, were considered by the board following the acquisition of COA. However,  
as COA was owned by the Group for only 17 days in the period, the division did  
not meet the quantitative thresholds for determining reportable segments.
The remaining operations of the company, including those provided by Oak Labs 
acquired in September, also fall outside of separable reportable segments on a 
quantitative basis and are included in the ‘Other’ segment as disclosed.
‘Unallocated items’ represents the elimination of the inter-segment sales and shows  
the non-segmental Group expenses incurred during the period.
Information regarding the result of each reportable segment is included below which  
is consistent with the content the Board has access to on a monthly basis. 
Notes to the consolidated financial statements 
continued Advanced Computer Software plc
Annual Report 2010
41
Overview Business review Governance Financials
5 Segments continued
Other information reported to the board is on a group wide basis and therefore not 
associated with segments.
  Managed  Unallocated
 Health & Care Services Other items Total
 12  14 12  14 12  14 12  14 12  14
 months  months months  months months  months months  months months  months
 ended  ended ended  ended ended  ended ended  ended ended  ended
 28 Feb  28 Feb 28 Feb  28 Feb 28 Feb 28 Feb 28 Feb 28 Feb 28 Feb 28 Feb
 2010 2009 2010 2009 2010 2009 2010 2009 2010 2009
 £000 £000 £000 £000 £000 £000 £000 £000 £000 £000
External  
revenue  15,722  7 ,327  11,796  –  2,673   –  – – 30,191  7 ,327 
Recurring  9,646  4,043  7,350   –  1,487   –  – – 18,483  4,043 
Non-recurring  6,072  3,284  4,446   –  1,186   –  – – 11,708  3,284 
Inter-segment  
revenue  (10) – 14  – (38)  –  34  –  –   – 
EBITDA   5,997  2,274  1,482  –  512   –  (1,428) (997) 6,563  1,277 
Share based  
payments  92  13  22  –  4  – 454  231  572  244 
Reorganisation/  
aborted 
transaction 
costs  – 321  65  – – – – 219 65  540 
Adjusted  
EBITDA   6,089  2,608 1,568  – 517   –  (974) (547) 7,200  2,061 
Depreciation   –   –   –   –   –   –  698  107  698  107 
Amortisation   –   –   –  –  –   –  1,996  436  1,996  436 
Net finance  
income  – – – – – – (300) (359) (300) (359)
Tax  – – – – – – 1,000  302  1,000  302 
Product information
Revenues from products and services of the Group were as follows in the period:
Product    Revenue
Support and maintenance    12,367
Software licences     2,288
Services     2,992
Managed services    11,796
Other revenue     748
    30,191
Geographic information
The separately reported segments of the Group are located in the United Kingdom and 
all material sales are made to customers inside the United Kingdom.
Major customer
No single customer accounted for more than 10% of the Group’s revenues in the period.
Net assets:
Assets and liabilities are not reported internally by segments. Advanced Computer Software plc
Annual Report 2010
42
Financials
6 Profits from operations
   12 months  14 months
   ended ended 
   28 February  28 February
   2010 2009
   £000  £000
Profit from operations is stated after charging/(crediting):
Loss on disposal of fixed assets   57 19 
Depreciation of tangible fixed assets
Owned assets   667  106 
Leased assets   31  1 
   
Amortisation of intangible fixed assets
Capitalised development costs   155  61 
Other intangible assets   1,841  375 
   
Operating lease – lease payments   
Hire of plant and machinery – operating leases   15  15 
Hire of other assets – operating leases   461  472 
   
Net foreign currency translation gain   (25) (25)
   
Audit services   
Fees payable to the company’s auditors for the audit  
of the company and consolidated financial statements  22  14 
    
Fees payable to the Company’s Auditors and its associates  
for other services:
Audit of the Company’s subsidiaries   39  27 
Other services pursuant to legislation   8  5 
Taxation services   23  3 
Other services   –  13 
7 Finance income and costs
   12 months  14 months
   ended ended 
   28 February  28 February
   2010 2009
   £000  £000
Bank interest receivable   410  365 
Total financial income   410  365 
Bank interest payable   (105) (1)
Interest charge related to dilapidation provision   (5) (4)
Interest payable on finance leases    – (1)
Total financial costs   (110) (6)
Notes to the consolidated financial statements 
continued Advanced Computer Software plc
Annual Report 2010
43
Overview Business review Governance Financials
8 Employee expenses
   12 months  14 months
   ended ended 
   28 February  28 February
   2010 2009
   £000  £000
Wages, salaries and fees   10,431  2,327 
Social security costs   1,148  296 
Pension costs   439  139 
    12,018  2,762 
Share based payments   572  244 
   12,590 3,006
The average monthly number of employees of the Group  
(including Directors) during the period was:
Development and operations   176  51 
Sales and marketing   36 7
Administration   23 4
Central   5 4
   240 66
Remuneration of the Directors and key management personnel of the Group was  
as follows:
   12 months  14 months
   ended ended 
   28 February  28 February
   2010 2009
   £000  £000
Emoluments   397  264 
Contributions to defined contribution pension schemes  9  4 
Share based payments   329   175 
Total   735  443 
    
Highest paid director    
Gross salary   16 8
Car and other benefits in kind   9 2 
Waived salary to charity   193 97
Contributions to defined contribution pension schemes  – –
   218 107
In the 12 months to 28 February 2010, four Directors were paid as employees through 
payroll and one Director was paid via a consultancy fee from Marwyn Capital LLP  
(fee included in the table above).
Vinodka Murria waived the right to her full salary and benefits (under her employment 
contract) and elected to receive £0.02m gross salary per annum plus the provision of  
a company car. The difference in salary, plus other benefits and national insurance 
saved by the Company was paid to the charity of Vinodka’s choice.
At 28 February 2010, one Director accrued benefits under a defined contribution pension 
scheme. Details of Directors’ interests are provided in the Directors’ remuneration report.
The Directors believe that the key management personnel are the Executive and  
Non-Executive Directors only. Advanced Computer Software plc
Annual Report 2010
44
Financials
9 Taxation
   12 months  14 months
   ended ended 
   28 February  28 February
   2010 2009
   £000  £000
UK corporation tax    1,507  390 
UK deferred tax   (507)  (88) 
Tax charge for the year   1,000   302 
The tax charge for the 12 month period is lower than the standard rate of 28% 
corporation tax in the United Kingdom as explained below:
   12 months  14 months
   ended ended 
   28 February  28 February
   2010 2009
   £000  £000
Tax reconciliation:    
Profit on ordinary activities before tax   4,169  1,093 
UK corporation tax at 28%   1,167  306 
Effects of:    
Items not deductible/taxable for tax purposes   378  142 
Additional deduction for R&D expenditure   – (80) 
Utilisation of previously unrecognised tax losses   (555) (66)
Loss carried forward to future periods   10  –
Tax charge for the year   1,000   302 
10 Earnings per share
The basic earnings per share has been calculated by dividing the net profit attributable 
to ordinary shareholders by the weighted average number of shares in issue during the 
relevant period.
Earnings per share
   12 months  14 months
   ended ended 
   28 February  28 February
   2010 2009
   £000  £000
Net earnings attributable to ordinary shareholders (£)  3,169 791 
Weighted average number of ordinary shares in issue  296,726,112  99,906,575 
Basic earnings per share   1.1p 0.8p
Notes to the consolidated financial statements 
continued Advanced Computer Software plc
Annual Report 2010
45
Overview Business review Governance Financials
10 Earnings per share continued
Diluted earnings per share
   12 months  14 months
   ended ended 
   28 February  28 February
   2010 2009
   £000  £000
Weighted average number of ordinary shares in issue  296,726,112  99,906,575 
Adjustment for share schemes   32,332,586  270,91 1 
Weighted average number of potential ordinary shares  
in issue   329,058,698  100,177 ,486 
Diluted basic earnings per share   1.0p 0.8p
The diluted profit per share has been calculated by dividing the net profit attributable  
to ordinary shareholders by the weighted average number of shares in issue during the 
period, adjusted for potentially dilutive shares that are not anti-dilutive. 
In accordance with IAS 33, the shares held by the Employee Benefit Trust are excluded 
from the weighted average calculation as are options that are still contingently issuable.
11 Acquisitions
Business Systems Group Holdings Plc
On 12 June 2009, the Group acquired all of the ordinary shares in Business Systems 
Group Holdings Plc (BSG) for a total consideration net of cash acquired with the business 
of £8.2m, satisfied in cash and shares. BSG provides hosting and IT outsourcing services, 
which has enabled Advanced to extend effective hosting, managed services and 
outsourcing capabilities to it’s customers across the NHS primary care sector. In the eight 
and a half months from acquisition to 28 February 2010, BSG contributed net profit of 
£1.0m to the consolidated net profit for the year. If the acquisition had occurred on 
1 March 2009, Group revenue would have increased by £3.9m and net profit, before 
exceptionals would have increased by £0.5m, less the items allocated to goodwill in 
transaction costs. In determining these amounts, management has assumed that the fair 
value adjustments that arose on the date of acquisition would have been the same if the 
acquisition occurred on 1 March 2010.
  Book  Fair value at  
  value Adjustment acquisition 
  £000 £000 £000
Property plant and equipment  1,019 – 1,019
Inventories  92 – 92
Trade and other receivables  5,654 – 5,654
Cash and cash equivalents  10,180 – 10,180
Trade and other payables  (3,060) – (3,060)
Other creditors  (3,529) – (3,529)
Provisions  (592) – (592)
Customer relationships  – 2,841 2,841
Deferred tax (liability)/asset  1,238 (795) 443
  11,002 2,046 13,048
   
Goodwill on acquisition    5,356
Consideration paid    18,404
   
Issue of 14,000,000 shares    (5,180)
Exercise price of options acquired    (841)
Cash acquired    (10,180)
Net cash outflow (including expenses of £0.4m)    2,203
The fair value of shares issued was determined by reference to their quoted market price 
of 37p per share at the date of the acquisition.  Advanced Computer Software plc
Annual Report 2010
46
Financials
11 Acquisitions continued
On the acquisition of BSG, all assets were measured at fair value and appropriate 
intangible assets recognised following the principles of IFRS 3. Management identified 
only one separately identifiable intangible asset – customer relationships. A deferred tax 
liability relating to the intangible assets was also recognised.
Customer relationships
The customer relationships were valued on an income basis, having taken account of 
the use of other resources (such as working capital, fixed assets and return on workforce) 
and corporation tax. The value of these future contracts was then discounted at the 
pre-tax internal rate of return. Management believe that these customer relationships 
have a useful economic life of at least five years and therefore the intangible asset 
recognised will be recognised over this period.
Assumptions
The assumptions used for valuing the intangibles included the internal rate of return 
(12.73% post-tax) and assumptions around levels of new and lost revenue and around  
the costs needed to generate those revenues. 
Redac Holdings Limited (COA)
On 11 February 2010, the Group acquired all of the ordinary shares in Redac Holdings 
Limited (RHL) for a total cash outflow of £98.3m, including consideration paid, transaction 
costs and the assumption of various shareholder loans. RHL provides software products  
for accounting and budgeting, data analysis, business intelligence (including patient 
pathways), compliance, billing, executive dashboard, HR, payroll, procurement, 
document management and business process outsourcing (BPO) service. In the two 
weeks to 28 February 2010 the subsidiary contributed net profit of £0.4m to the 
consolidated net profit for the year. If the acquisition had occurred on 1 March 2009, 
Group revenue would have increased by £58.1m and the net profit would have 
decreased by £0.9m. In determining these amounts, management has assumed  
that the fair value adjustments that arose on the date of acquisition would have been 
the same if the acquisition occurred on 1 March 2009.
  Book  Fair value at  
  value Adjustment acquisition 
  £000 £000 £000
Property plant and equipment  2,535 – 2,535
Previously capitalised intangibles  106 – 106
Investments  2 – 2
Inventories  498 – 498
Trade and other receivables  11,352 – 11,352
Cash and cash equivalents  4,442 – 4,442
Loans and borrowings  (61,680) – (61,680)
Trade and other payables  (29,458) – (29,458)
Provisions  (586) – (586)
Customer contracts and relationships  – 61,596 61,596
Technology & RD value  – 20,136 20,136
Brand value  – 3,590 3,590
Deferred tax (liability)/asset  1,020 (23,890) (22,870)
  (71,769) 61,432 (10,337)
   
Goodwill on acquisition    51,335
Consideration paid    40,998
   
Cash acquired    (3,314)
Loans and borrowings acquired    61,680
Amounts owing at period end    (1,038)
Net cash outflow     98,326
Notes to the consolidated financial statements 
continued Advanced Computer Software plc
Annual Report 2010
47
Overview Business review Governance Financials
11 Acquisitions continued
On acquisition of COA, all assets were fairly valued and appropriate intangible assets 
recognised following the principles of IFRS 3. Management identified four separately 
identifiable intangible assets: 
• customer contracts and relationships
• technology
• brand
A deferred tax liability relating to these intangible assets was also recognised. 
Customer contracts & relationships
The customer contracts were valued on an income basis, taking into account the  
value of customer relationships and that most contracts have a three month termination 
notice. Management assume a short term income from contracts for the purpose of 
valuing intangibles and assign longer term income values to customer relationships.  
As such, most amounts assigned to the valuation of contracts is receivable within the 
next period, the income stream has not been discounted and the useful economic life  
is one year. The amount recognised includes valuations for customer backlogs and 
pipelines, which are also amortised over the same period.
The customer relationships were valued on an income basis, having taken account  
of the use of other resources (such as working capital and technology and brand and 
corporation tax. The value of these future relationships was then discounted at the 
post-tax internal rate of return. Management believe that these customer relationships 
have a useful economic life of at least ten years and therefore the intangible asset 
recognised will be recognised over this period.
Technology 
R&D Early stage
R&D early stage has been valued on a historical cost basis, as management consider 
there to be very little additional value at this stage. Total cost associated with 
development activities are £5.5m. As this is expected to be commercially exploited  
in the forthcoming period, it has not been discounted. R&D which is carried out by the 
group which does not met the criteria of IAS 38 is included in Technology valuation.
Technology
COA technology has been valued on an income basis, A theoretical royalty payment of 
40% of future estimated license revenue (being the amount charged on an arm’s length 
basis to subsidiaries) minus corporation tax was calculated and then discounted at the 
weighted average cost of capital to identify the fair value of the technology at 
acquisition. Management believe COA’s technology will have a useful life of four years 
and therefore the intangible asset recognised will be amortised over this period.
Brand
The COA brand has been valued on an income basis. A theoretical royalty payment  
of 1.5% of future estimated revenues (based on revenues acquired on existing customer 
relationships) minus corporation tax was calculated then discounted at weighted 
average cost of capital to identify the fair value of the brand at acquisition. 
Management believe that the brand has a useful economic life of four years and 
therefore the intangible asset recognised will be amortised over this period.
Assumptions
The assumptions used for valuing the intangibles included the internal rate of return 
(12.73% post-tax), assumptions around levels of new and lost revenue and around the 
costs needed to generate those revenues.  Advanced Computer Software plc
Annual Report 2010
48
Financials
11 Acquisitions continued
Acquisition of smaller entities
The Group acquired all of the ordinary shares of certain other smaller entities during  
the period. There were:
• StaffPlan Limited (acquired 12 July 2009) 
• Oak Labs India Private Limited (acquired 28 September 2009)
• Healthy Software Limited (acquired 12 November 2009)
These acquisitions further strengthen the Group’s offering to the Health & Care sector.  
The companies were acquired for a total consideration of £2.8m, of which £1.1m related 
to seperable intangibles and £1.7m to acquired goodwill. In the period post acquisition 
the companies have contributed net profit of £0.1m.
Adastra
In the prior period, on 29 August 2008, the Group acquired 100% of Adastra Software Ltd 
(Adastra), a UK-focused business providing software and hardware to primary care 
providers for a consideration of £13.2m with a net cash outflow of £3.6m. During the  
12 month period to 28 February 2010 the company has contributed net profit of £3.9m, 
before consolidation adjustments.
The comparative disclosure for Adastra is as shown in the table below:
  Book  Fair value at  
  value Adjustment acquisition 
  £000 £000 £000
Property plant and equipment  1,097 3 1,100
Inventories  674 (31) 643
Trade and other receivables  1,317 – 1,317
Cash and cash equivalents  2,697 – 2,697
Trade and other payables  (3,367) – (3,367)
Other creditors  (316) 17 (299)
Brand value  – 375 375
Technology & RD value  – 375 375
Customer contracts and relationships  – 2,805 2,805
Deferred tax asset  – (995) (995)
  2,102 2,549 4,651
   
Goodwill on acquisition  
(reduced by the acquisition fees refunded)    8,522
Consideration paid    13,173
   
Issue of 40,294,119 shares    (6,850)
Cash acquired    (2,697)
Net cash outflow (including expenses of 0.4m)    3,626
The fair value of shares issued was determined by reference to their quoted market price 
of 17p per share at the date of the acquisition.
Notes to the consolidated financial statements 
continued Advanced Computer Software plc
Annual Report 2010
49
Overview Business review Governance Financials
12 Intangible assets
12 months ended 28 February 2010
 Customer  
 contracts and  
 relationships Brand Technology Goodwill R&D Total 
 £000 £000 £000 £000 £000 £000
Cost
At beginning  
of year 2,805  375  375  8,616  910  13,081 
Acquisitions  
through business  
combinations 64,728  3,590  21,298  58,382  87  148,085 
Other acquisition  
– internally  
developed – – – – 340  340 
At end of year 67,533  3,965  21,673  66,998  1,337  161,506 
Amortisation
At beginning  
of year (281) (47) (47) – (273) (648)
Charged in year (1,276) (136) (429) – (155) (1,996)
At end of year (1,557) (183) (476) – (428) (2,644)
      
Net book value
At 28 February 2010 65,976  3,782  21,197  66,998  909  158,862 
      
Net book value
At 28 February 2009 2,524  328  328  8,616  637  12,433 
14 months ended 28 February 2009
 Customer  
 contracts and  
 relationships Brand Technology Goodwill R&D Total 
 £000 £000 £000 £000 £000 £000
Cost
At beginning  
of year – – – – – –
Acquisitions  
through business  
combinations 2,805  375  375  8,616  775  12,946 
Other acquisition  
– internally  
developed – – – – 135  135 
At end of year 2,805  375  375  8,616  910  13,081 
Amortisation      
At beginning of year – – – – – –
Additions in period – – – – (212) (212)
Charged in year (281) (47) (47) – (61) (436)
At end of year (281) (47) (47) – (273) (648)
Net book value
At 28 February 2009 2,524  328  328  8,616  637  12,433 
Net book value      
At 28 February 2008 – – – – – – Advanced Computer Software plc
Annual Report 2010
50
Financials
12 Intangible assets continued
Impairment tests for cash-generating units containing goodwill
The goodwill on the balance sheet relates to the acquisitions in the current and prior 
period (Acquisition note 11) and is calculated as: the total consideration paid (including 
fees) less the fair value of the net assets acquired.
This goodwill has then been tested for impairment as at 28 February 2010 following  
IAS 36 criteria.
To confirm that no impairment of the goodwill is necessary, management compared  
the carrying value to the value in use. The value in use was calculated using the 
subsidiary’s 2010-11 budget ending 28 February 2011 as approved by the Board and 
forecasts, with a zero growth assumption, for the following five years. The expected ACS 
central costs were allocated. Terminal values were calculated, based on the perpetuity 
of cash generated. Forecasts and terminal values were discounted using the following 
discount rates:
• BSG  20.8%
• COA  12.7%
• Adastra 12.45%
The above discount rates are based on beta values of similar companies in the same 
industry adjusted to reflect management’s assessment of specific risks related to the 
subsidiary. The discount rates are also consistent with those used in the valuation of 
intangible assets acquired under IFRS3.
No impairment is deemed necessary as a result of the testing performed as shown in the 
table below:
 Carrying Recoverable   Discount 
 value value Excess rate 
Cash Generating Units £000 £000 £000 Sensitivity
BSG     
Infrastructure  1,736 2,724 988 29.2%
Managed services  2,324 5,832 3,508 39.1%
Solutions  296 1,719 1,423 58.9%
IT services – breakfix  368 708 340 33.3%
IT services – subcontract  632 1,903 1,271 43.3%
  5,356 12,886 7,530 
COA 
Licence fees  3,294 7 ,184 3,890 24.2%
Maintenance fees  42,918 85,573 42,655 22.6%
Services  4,326 8,210 3,884 21.8%
Managed services and database fees  576 776 200 16.5%
Other  221 388 167 20.5%
  51,335 102,131 50,796
Adastra  8,522 42,004 33,482 40.69%
The above discount rate sensitivity shows the discount rate required for the recoverable 
amount to equal the carrying value.
The key assumptions used and the approach to determining their value are:
Assumption How determined
Operating margins  These have been based on historic results and future 
expectations.
Discounted future cashflows and  These have been based on the Board approved 
Terminal value beyond 2010/11  budget for 2011 and contain no growth, which the 
Board believe is very conservative.
Notes to the consolidated financial statements 
continued Advanced Computer Software plc
Annual Report 2010
51
Overview Business review Governance Financials
13 Property, plant and equipment
12 months ended 28 February 2010
   Office 
  Leasehold  equipment Computer 
  property  and furniture equipment Total 
  £000 £000 £000 £000
Cost     
Balance at 28 February 2009  120 516 924 1,560
Assets acquired as part of business  
combinations  2,819 4,967 9,058 16,844
Additions in the period  2 41 234 277
Disposals – (84) (16) (100)
At 28 February 2010  2,941 5,440 10,200 18,581
  
Depreciation     
Balance at 28 Feb 2009  52 363 713 1,128
Assets acquired as part of business  
combinations  1,289 4,021 7 ,707 13,017
Depreciation charge for the year  112 202 384 698
Disposals – (7) (36) (43)
At 28 February 2010  1,453 4,579 8,768 14,800
Net book value    
At 28 February 2010  1,488 861 1,432 3,781
Net book value
At 28 February 2009  68 153 211 432
14 months ended 28 February 2009
   Office 
  Leasehold  equipment Computer 
  property  and furniture equipment Total 
  £000 £000 £000 £000
Cost     
Balance at 1 January 2008  – – – –
Assets acquired as part of business  
combinations  114 546 918 1,578
Additions in the period  6  8  6  20
Disposals  – (38) – (38)
At 28 February 2009  120  516  924  1,560 
Depreciation
Balance at 1 January 2008  – – – –
Assets acquired as part of business  
combinations  46 342 652 1,040
Depreciation charge for the year  6  40  61  107 
Disposals – (19) – (19)
At 28 February 2009  52  363  713  1,128 
Net book value    
At 28 February 2009  68  153  211  432 
Net book value
At 1 January 2008  – – – – Advanced Computer Software plc
Annual Report 2010
52
Financials
14 Inventories
   28 February  28 February
   2010 2009
   £000  £000
Finished goods and goods held for resale   629 239
15 Trade and other receivables
   28 February  28 February
   2010 2009
   £000  £000
Trade receivables   17,895  1,438 
Other receivables   357  2 
Prepayments and accrued income   3,956  427 
   22,208  1,867 
16 Cash and cash equivalents
   28 February  28 February
   2010 2009
   £000  £000
Cash at bank   10,193  2,602 
Bank short term deposits   86  12,054 
   10,279  14,656 
17 Trade and other payables: current
   28 February  28 February
   2010 2009
   £000  £000
Trade payables   3,812 891
Taxation and social security   3,435 539
Accruals and deferred income   34,454 793
Other payables   454 361
   42,155 2,584
18 Deferred tax liability
Deferred taxation is calculated in full on temporary differences under the liability 
method using the taxation rate 28% (2009: 28%). Deferred taxation assets have been 
recognised on temporary differences where the Directors believe that it is probably that 
these assets will be recovered.
 28 February 2010 28 February 2009
  (Charged)/  (Charged)/
 Asset/  credited to Asset/ credited to
 (liability) profit or loss (liability) profit or loss
 £000 £000 £000 £000
Accelerated capital allowances 1,602 93 (42) 10
Short term temporary differences (1,000) 40 (1,051) 78
Business combination (24,548) 515 –   – 
Taxation losses 914 (141) –  – 
 23,032 507 1,093 88
Subject to agreement with the Inland Revenue, the Group has tax losses of 
approximately £914,000 at 28 February 2010 available to relieve future trading profits  
in the United Kingdom. 
Notes to the consolidated financial statements 
continued Advanced Computer Software plc
Annual Report 2010
53
Overview Business review Governance Financials
19 Provisions: non-current
The non current provision relates to dilapidations and onerous leases in respect of 
buildings leased by the Group.
  Onerous lease Leasehold  
  provision dilapidation Total 
  £000 £000 £000
At 28 February 2009  – 118 118
On acquisition  718 598 1,316
Utilised in the year  (296) – (296)
Released in year  – (14) (14)
Unwinding of discount  – 6 6
At 28 February 2010  422 708 1,130 
20 Financial instruments
The maturity analysis of the Group’s financial liabilities for the year ended 28 February 
2010 is as follows:
 Within  Within Within two Total 
 the next  one to to three and financial 
 12 months two years a half years liabilities 
 £000 £000 £000 £000
Loans and borrowings
Revolving facility 26,265  – – 26,265
Term loan 8,236  6,764 10,000 25,000 
 34,501 6,764  10,000 51,265 
Unamortised loan issue costs (357)  (357) (534) (1,248)
 34,144  6,407  9,466  50,017 
Future interest payments 1,820 595  533  2,948 
 35,964  7 ,002  9,999  52,965 
Other financial liabilities 12,781 – – 12,781
 48,745  7,002 9,999  65,746 
For the period ended 28 February 2009 the Group’s total financial liabilities of £1.5m were 
all due within one year.
The revolving facility has a term of three years six months but is repayable on demand.
The term loan and revolving facility are secured by way of unlimited cross guarantees 
and full and fixed floating charges over the assets of all Group companies, subject to 
material company provisions; first legal mortgages over all United Kingdom freehold  
and long leasehold premises; first fixed charges over all shares in United Kingdom 
subsidiaries; the assignment of rights and interests under the Sale and Purchase 
Agreement for the acquisition of Redac Holdings Limited; any hedging agreements  
and key contracts; and the assignment of keyman insurance policies.
The Group’s financial assets
   2010 2009
   £000 £000
Cash and receivables
Trade and other receivables   20,218 1,467
Cash and cash equivalents   10,279  14,656 
   30,497 16,123
The above balance represents the Group’s maximum exposure to credit risk.
The fair value of the financial instruments is equal to the carrying value. In the normal 
course of the Group’s business and in common with other businesses, the Group 
encounters risks that arise from financial instruments. This note describes the Group’s 
objectives, policies and processes in managing these risks and the methods used to 
measure them. Advanced Computer Software plc
Annual Report 2010
54
Financials
20 Financial instruments continued
Credit risk
Credit risk is the risk that a counter party to a transaction with the Group fails to 
discharge its obligations in respect of the instrument. The Group’s credit risk arises on 
(i) transactions with customers following delivery of goods and/or services or on (ii) cash 
and cash equivalents placed with banks and financial institutions.
Customers
The Group provides services to Government-backed organisations (for example, NHS 
Primary Care Trusts) and commercial businesses. A small proportion of revenue is 
generated outside of the United Kingdom.
Management focuses strongly on working capital management and the collection  
of due invoices. Regular reports of overdue invoices are circulated amongst senior 
management and the Group Board reviews debtor days each month as part of the 
monthly reporting cycle. The risk with any one customer is limited by constant review  
of debtor balances and action to resolve any issues preventing discharge of obligations.
The table below shows the ageing of trade debtors that are past due invoice date and 
not impaired as at 28 February 2010.
Ageing of trade receivables 2010:
  < 3 months 3-6 months > 6 months 
  £000 £000 £000
Trade receivables  17 ,054 730 111
Ageing of trade receivables 2009:
  < 3 months 3-6 months > 6 months 
  £000 £000 £000
Trade receivables  1,644 18 2
At the balance sheet date there were no significant concentrations of credit risk. The 
maximum exposure to credit risk is represented by the carrying amount of the trade  
and other receivables in the balance sheet.
Cash and cash equivalents
The Group places cash and cash equivalents with banks to earn interest. Due to the 
uncertainty within the financial sector over recent months, the cash has been placed 
with seven banks to reduce the concentration of cash and/or deposits with any one 
institution. During the year, all the cash was placed with UK banks and no one bank 
held more than £10m of the total amount invested.
Market risk
Market risk is the risk that the fair value or cash flows of a financial instrument will 
fluctuate due to changes in market prices. In managing interest rate and currency risks, 
the Group aims to reduce the impact of short term fluctuations on the Group’s earnings. 
Over the longer term, however, permanent changes in interest rates and foreign 
exchange would have an impact on consolidated earnings.
Interest rate risk
The Group holds loans and other borrowings including a term loan repayable in equal 
instalments until 2013 and a revolving credit facility, which expires in 2013. Both facilities 
are denominated in Sterling and incur interest at LIBOR plus 3%.
The revolving credit facility is repayable at the Group’s discretion on a quarterly basis 
with the interest accrued, or on demand. The Group is obliged to comply with certain 
covenants, as detailed in the going concern disclosures.
In April 2010, the Group entered into a contract to hedge two thirds of the term loan with 
a cap at 3.3% on LIBOR. The Directors believe this hedge limits the Group’s exposure to 
interest rate charges to a manageable level.
Notes to the consolidated financial statements 
continued Advanced Computer Software plc
Annual Report 2010
55
Overview Business review Governance Financials
20 Financial instruments continued
   28 February  28 February
   2010 2009
Weighted average interest rates receivable   1.18% 1.87%
Weighted average interest rates payable   3.71% –
Currency risk
The Group earns small very levels of revenue from outside the UK. The value of recurring 
revenues is converted at each invoice date from a fixed Sterling value to a varied euro 
value and thereby minimising the currency risk to the Group. It is not Group policy to 
enter into hedging arrangements to mitigate currency risk due to the disproportionate 
cost versus risk.
All cash and cash equivalents at 28 February 2010 were denominated in sterling.
Liquidity risk
Liquidity risk is the risk that the Group cannot meet financial liabilities when they fall 
due. The Group’s policy for managing liquidity risk is to ensure that the business has 
enough financial resource to meet its day-to-day activities at any point in time. 
Management believes that the cash resources on hand, together with the profits of  
the business more than cover the resources needed to meet the financial liabilities  
of the Group.
Capital management
The Group manages its capital structure to safeguard the going concern of the Group 
and provide returns for shareholders and benefits for other stakeholders. The capital 
structure of the Group consists of equity (including share capital, retained earnings  
and other reserves).
The Group may maintain or adjust capital structure by issuing new shares, returning 
capital to shareholder or by paying dividends.
21 Commitments
Operating leases
Future minimum lease payments under non-cancellable operating leases are  
as follows: 
 28 February 2010 28 February 2009
 Land and  Land and 
 buildings Others buildings Others
 £000 £000 £000 £000
Within one year 1,374 417  171 315 
In two to five years 1,597 201  684 232 
In more than five years 286 2  158 32 
 3,257  620  1,013  579 
Pension Commitments
The Group has no defined-benefit pension schemes in place. The Group pays defined 
contributions into a Group Personal Pension Plan and individual pension plans. The 
assets of each of these plans are held separately from those of the Group in 
independently administered funds.
The pension charge represents contributions payable by the Group and amounted to 
£0.4m (2009: £0.1m).  Advanced Computer Software plc
Annual Report 2010
56
Financials
22 Related parties
Mark Watts is a partner in Marwyn Capital LLP, Marwyn Management Partners LP and 
Marwyn Investment Management Limited.
Marwyn Neptune Fund, a substantial shareholder in the Company, is managed on an 
arm’s length basis by Marwyn Investment Management Limited. At 28 February 2010, 
Marwyn Neptune Fund held 41,000,000 shares via its nominee, Vidacos Nominees 
Limited representing 21% of the issued equity of the Company.
During the period ending 28 February 2010, the Company paid fees of £0.1m for 
corporate finance advisory services to Marwyn Capital.
Marwyn Management Partners LLP has been issued options to subscribe for ordinary 
shares and details of these options are shown in note 25 of the financial statements.
23 Group entities
Control of the Group
The Company believes there is no overall controlling party of Advanced Computer 
Software plc.
Significant subsidiaries
 Country of   Percentage 
 Incorporation Principal activity Class of share held held
Drury Lane (Jersey) Ltd* Jersey Holding Company Ordinary shares 100% 
Adastra Software Ltd** England Trading entity Ordinary shares 100%
Business Systems Group  
Holdings Ltd** England Holding Company Ordinary shares 100%
Redac Holdings Limited** England Holding Company Ordinary shares 100%
 * Owned directly by Advanced Computer Software plc.
** Owned indirectly by Advanced Computer Software plc.
24 Share capital
 2010  2009
 Number £000 Number £000
Authorised for issue
Ordinary shares of £0.10 each 1,000,000,000 100,000 500,000,000  50,000
Allotted, called up and fully paid
Ordinary shares of £0.10 each 354,880,592 35,488 190,920,170  19,092
During the period to 28 February 2010, the Company issued the following new  
equity shares:
   Number of shares £000
Shares in issue at 1 January 2008  45,000,000  4,500
Shares issued for cash  86,088,235 8,609
Shares issued as consideration for acquisitions   40,294,119 4,029
Shares issued to Employee Benefit Trust   19,537 ,816  1,954
Shares in issue at 28 February 2009   190,920,170  19,092 
Issue of share capital
Shares issued for cash   145,250,000  14,525 
Shares issued as consideration for acquisitions   18,710,422  1,871 
Balance at 28 February 2010   354,880,592  35,488 
Notes to the consolidated financial statements 
continued Advanced Computer Software plc
Annual Report 2010
57
Overview Business review Governance Financials
24 Share capital continued
Share premium reserve
This represents the amounts subscribed for share capital in excess of the nominal value 
of those shares.
Merger reserve
The merger reserve represents the difference between the fair value and nominal value 
of the 59,004,541 Ordinary shares allotted to the vendors of the new business acquired 
since August 2008.
Share trust reserve
The Company allotted 19,537 ,816 Ordinary shares of £0.10 to the Employee Benefit Trust 
(’EBT’). The trust reserve represents the amount owing for those shares from the EBT.
Profit and loss account
Cumulative net gains and losses recognised in the consolidated income statement.
Foreign exchange reserve
Gains or losses arising on translation of the net assets of overseas operations into sterling.
25 Share options and management incentives 
Share option schemes
The Company implemented two new share-based schemes in the 12 months to 
28 February 2010, a Company Share Option Plan (CSOP) and a Save as you Earn 
scheme (‘SAYE’). Options issued under both schemes were valued under IFRS2, and  
have resulted in an additional share-based charge in the income statement. 
During the year, further unapproved options were granted to certain employees under 
the existing Enterprise Management Incentive/unapproved share option scheme.
The Group recognised a total expense of £0.6m for all share-based schemes in place 
during the year to February 2010. The following information is relevant in the 
determination of the fair value of options granted in the year.
   2010 2009
   Binomial Binomial
Option model used   valuation valuation
Weighted average contractual life (years)   5.30 10.00 
Weighted average exercise price (pence)   8.19 10.00 
Expected dividend yield (%)   – – 
Risk free interest rate (%)   4.4% 4.37%
Weighted average share price at grant (pence)   20.56 14.38 
The volatility assumption is based upon past trading and  
comparable businesses (%)   26% 26%
 Weighted average  Weighted average
 exercise price exercise price
 Pence No. Pence No.
Summary of options granted during the period: 2010 2010 2009 2009
Outstanding options at the beginning  
of the period 10.00 1,600,000 – –
Granted during the period 8.11 26,498,795 10.00 1,600,000
Options expired during the period – – – –
Outstanding options at the end of  
the period 8.19  38,362,995 10.00 1,600,000
At the year end, no options were exercisable. Advanced Computer Software plc
Annual Report 2010
58
Financials
25 Share options and management incentives continued
    Exercise price 
Option scheme  Date of grant Number  (Pence)
MPO*  23.07.08 7,507,278 10.0
MPS*  30.07.08 22,521,834 –
EMI  14.10.08 1,500,000 10.0
EMI  19.01.10 100,000 10.0
EMI  04.06.09 921,500 10.0
EMI  08.06.09 320,000 10.0
SAYE  21.09.09 2,132,383 38.5
EMI (unapproved)  06.01.10 1,688,312 38.5
EMI (unapproved)  06.01.10 172,078 34.0
CSOP  06.01.10 1,499,610 38.5
   38,362,995
 
*  The options under the MPO and MPS scheme have been calculated by assuming that the vesting and growth conditions had 
been met at 28 February 2010.
Enterprise Management Incentive (EMI)/unapproved share option scheme
The EMI scheme is approved by HM Revenue and Customs for share options granted 
that fall within the EMI rules. Options granted that do not fall within the EMI rules are 
deemed to be unapproved share options. Under the terms of this scheme all employees 
and Directors of the Group are eligible to participate. The options entitle the recipient to 
acquire ordinary shares in the Company at an exercise price determined at grant.
Management Participation Option (MPO)
The MPO is an option over the Company’s shares held by Marwyn Management 
Partners LLP (‘Marwyn’). Subject to growth and vesting conditions, the MPO may be 
exercised to subscribe for a number of ordinary shares at an exercise price of 10p per 
share. The number of the shares that may be subscribed for is such number as will give 
Marwyn a gain (calculated after deducting the exercise price) equivalent to 5% of the 
increase in ‘shareholder value’. Shareholder value for this purpose is broadly defined as 
the difference between the market capitalisation of the Company at the date of exercise, 
and the sum of (i) the market capitalisation of the Company on 29 August 2008 and 
(ii) the aggregate subscription price of all ordinary share in the capital of the Company 
issued up to the relevant date of exercise, adjusted for dividends and capital returns to 
shareholders. 
The growth condition to be met is that the compound annual growth of the Company’s 
share price must be at least 11% per annum measured at the end of the vesting period. 
The vesting period ends 28 August 2011, however if the growth condition has not been 
met at that date then the vesting period will be extended to 28 August 2013. The vesting 
period will also end on a sale or change of control. If the growth condition has not been 
met at the end of the extended vesting period then the option will lapse for  
no consideration.
The MPO was granted in July 2008 and no further grants can be made under  
the scheme.
Notes to the consolidated financial statements 
continued Advanced Computer Software plc
Annual Report 2010
59
Overview Business review Governance Financials
25 Share options and management incentives continued
Management Participation Shares (MPS)
The key executives of the Group have subscribed for Management Participation Shares 
in Drury Lane (Jersey) Limited, a subsidiary of the Company. Subject to growth, vesting 
and good leaver/bad leaver conditions, the Management Participation Shares can  
be sold, for cash or for the issue of new ordinary shares at the Company’s discretion,  
to the Company for an aggregate value equivalent to 15% of the increase in ‘shareholder 
value’. Shareholder value for this purpose is broadly defined as the difference between 
the market capitalisation of the Company at the date of exercise, and the sum of (i) the 
market capitalisation of the Company on 29 August 2008 and (ii) the aggregate 
subscription price of all ordinary share in the capital of the Company issued up to the 
relevant date of exercise, adjusted for dividends and capital returns  
to shareholders. 
The growth condition to be met is that the compound annual growth of the Company’s 
share price must be at least 11% per annum measured at the end of the vesting period. 
The vesting period ends 28 August 2011, however if the growth condition has not been 
met at that date then the vesting period will be extended to 28 August 2013. The vesting 
period will also end on a sale or change of control. If the growth condition has not been 
met at the end of the extended vesting period then the Management Participation 
Shares must be sold to the Company for a nominal sum.
Save As You Earn (SAYE)
The Save as you Earn scheme was set up in August 2009. Participation in the scheme 
was open to all employees employed at the date of commencement of the three year 
scheme. All participants agreed to save a set amount monthly into the scheme and in 
return received an option to purchase shares in the capital of the Company at the share 
price at the date of entry into the scheme less a discount of approximately 10%.
Company Share Option Plan (CSOP) 
CSOP share options are awarded to senior Group employees to incentivise them to 
positively impact the Group. Senior Group employees performance over the medium 
term. The options are awarded with an exercise price equal to fair market value and 
shares typically cannot be exercised until three years after the date on which the option 
was granted. Options granted to an employee who leaves before the exercise date will 
usually lapse.
26 Subsequent events
Acquisition of Cerrus
On the 2 March 2010, Advanced announced the acquisition of 100% of the issued share 
capital of Cerrus Limited (‘Cerrus’) for £0.4m in cash. 
 
Cerrus’ principal product is Saturn, a community care and support management solution 
with more than 35,000 users, which manages the delivery of care, resource management 
and organisational financial requirements for over 60 community health and social care 
providers in the UK and Ireland. This acquisition builds on Advanced earlier acquisition 
of StaffPlan and complements its Connect/Monitor products. The integration of Saturn 
will extend the Group’s solutions in the social and community care market and will 
provide additional benefits for both Cerrus and Advanced customers.
Cerrus has approximately £0.6m of annual recurring revenues. Advanced Computer Software plc
Annual Report 2010
60
Financials
Company balance sheet 
As at 28 February 2010
   2010 2009
  Notes £000 £000
Fixed assets 
Investment in subsidiary undertakings  3 35,007 13,454
Amounts owed by subsidiary undertakings   1,954 1,954
Total fixed assets   36,961 15,408
Current assets 
Debtors – due within one year  4 685 498
Debtors – due after more than one year  4 39,159 9,160
Cash at bank and in hand   594 2,040
Deferred taxation  5 51 16
Total current assets   40,489 11,714
Creditors: amounts falling due within one year  6 (1,049) (323)
Net current assets   39,440 2,231
Total assets less current liabilities   76,401 26,799
Creditors: amounts falling due after more than one year 7 (1,954) (1,954)
Net assets   74,447 24,845
Capital and reserves
Share capital  8,9 35,488 19,092
Share premium  9 33,361 5,426
Merger reserve  9 7,826 2,821
Share trust reserve  9 (1,954) (1,954)
Capital contribution reserve  9 634 187
Retained earnings  9 (908) (727)
Shareholders’ funds  9 74,447 24,845
These financial statements were approved by the board of directors and authorised for 
issue 30 July 2010 and were signed on its behalf by:
Barbara Firth
Director Advanced Computer Software plc
Annual Report 2010
61
Overview Business review Governance Financials
Notes to the financial statements of the company
1 Accounting policies
The following accounting policies have been applied consistently in dealing with items 
which are considered material in relation to the Company’s financial statements. 
Basis of preparation
The financial statements have been prepared in accordance with applicable accounting 
standards generally accepted in the United Kingdom and under the historical cost 
convention. The accounts have been prepared on the going concern basis.
Profit and loss account
Under section 408 of the Companies Act 2006 the Company is exempt from the 
requirement to present its own profit and loss account. The profit for the 12 months ended 
28 February 2010 is disclosed in note 10.
Taxation
Current tax, including UK corporation tax is provided at amounts expected to be paid  
(or recovered) using the tax rates and laws that have been enacted or substantively 
enacted by the balance sheet date. 
Deferred tax is recognised, without discounting, in respect of all timing differences 
between the treatment of certain items for taxation and accounting purposes which 
have arisen but not reversed by the balance sheet date, except as otherwise required  
by Financial Reporting Standard 19: Deferred Tax. Deferred taxation assets are 
recognised to the extent that it is regarded as more likely than not that they will  
be recovered.
Investments in subsidiaries
Investments in subsidiaries are stated at cost less provision of impairment value.
Employee Benefit Trust
As the Company is deemed to have some control of the Employee Benefit Trust,  
it is treated as a subsidiary undertaking. The assets (other than investments in the 
Company’s shares), liabilities, income and expenses are included on a line by line  
basis in the consolidated financial statements. The investment in the Company’s shares  
is shown in the share trust reserve and is treated as a deduction from equity in the 
balance sheet.
Share-based payments
The Company operates equity-settled share based option plans. The fair value of the 
employee services received in exchange for the participation in the plan is recognised 
as an expense in the profit and loss account. In accordance with UITF 44: Group and 
Treasury Transactions, the Company has accounted for options granted to the 
employees of subsidiary undertakings as capital contributions, which have been 
recharged to the intermediate company holding the investment. The corresponding 
credit has been recognised in the capital contribution reserve. 
The fair value of the employee service is based on the fair value of the equity instrument 
granted. This expense is spread over the vesting period of the instrument. The 
corresponding entry is credited to equity. The liability for social security costs arising in 
relation to the awards is measured at each reporting date based upon the share price at 
the reporting date and the elapsed portion of the relevant vesting periods to the extent 
that it is considered that a liability will arise.
Dividends
Dividend distributions to the Company’s shareholders are recognised in the period when 
paid or, if earlier, in which the dividend is approved by the Company’s shareholders. No 
dividends were distributed in the year to 28 February 2010. Advanced Computer Software plc
Annual Report 2010
62
Financials
Notes to the financial statements of the company 
continued
2 Wages and salaries costs
The Company has four directors and incurred costs of £0.01m (2009: £0.01m) from 
Marwyn Capital LLP in respect of the services provided by Mark Watts during the 
period. The costs of the other three directors are borne by a subsidiary company and 
their remuneration details are provided in the Directors’ remuneration report within the 
Group financial statements.
3 Investments in subsidiaries
    £000
As at 28 February 2009    13,454 
Additions    21,553 
As at 28 February 2010    35,007 
The investment is the cost of the Company’s holding in Drury Lane (Jersey) Ltd. 
The undertakings in which the Company’s has an interest at 28 February 2010 of  
more than 20%, either directly or indirectly, are as per note 23 of the Group financial 
statements. 
4 Debtors
   28 February  28 February
   2010 2009
Amounts due within one year:   £000  £000
Other debtors   67  6 
Amounts owed by subsidiary undertakings   618 492
   685 498
Amounts due after more than one year:    
Amounts owed by subsidiary undertakings   39,159 9,160
5 Deferred taxation
   28 February  28 February
   2010 2009
   £000  £000
Short term differences   51 16
   51 16
    
Opening balance   16 –
Movement in the year   35 16
Closing balance   51 16
6 Creditors: amounts falling due within one year
   28 February  28 February
   2010 2009
   £000  £000
Trade payables   435 289
Accruals and deferred income   614 34
Total amounts falling due º on year   1,049 323 Advanced Computer Software plc
Annual Report 2010
63
Overview Business review Governance Financials
7 Creditors: amounts falling due after more than one year
   28 February  28 February
   2010 2009
   £000 £000
Amounts due to Group companies   1,954 1,954
8 Called up share capital
  28 February  28 February
  2010  2009
  No. £000 No. £000
Authorised for issue
Ordinary shares of £0.10 each 1,000,000,000  100,000  500,000,000 50,000 
Allotted, called up and fully paid
Ordinary shares of £0.10 each 354,880,592 35,488 190,920,170 19,092 
Details of the share options and share capital issued by the Company are detailed in 
notes 24 and 25 of the Group financial statements.
9 Reconciliation of movement in shareholders funds
 Ordinary   Capital Share Profit 
 share Share Merger contribution trust and loss 2010 2009
 capital premium reserve reserve reserve account Total Total
 £000 £000 £000 £000 £000 £000 £000 £000
Operating balance  19,092  5,426  2,821  187  (1,954) (727) 24,845  3,522
 
Issue of  
share capital
For cash 14,525  29,050  – – – – 43,575  14,635
In respect of  
acquisition  
of subsidiaries 1,871  – 5,005  – – – 6,876  6,850
Costs of issuing  
share capital – (1,115) – – – – (1,115) (600)
Share based 
payment – – – 447 – 125  572  244
(Loss)/profit 
for the period – – – – – (306) (306) 194
Closing balance  35,488  33,361  7,826  634 (1,954) (908) 74,447  24,845
10 Profit for the period
The loss for the period was £0.3m (2009: profit of £0.2m).
Included in the loss for the period is Auditors’ remuneration of £0.02m in respect of 
audit fees (2009: £0.1m).  Advanced Computer Software plc
Annual Report 2010
64
Company information
Legal form
Public Limited Company
Country of incorporation
United Kingdom
Company number
5965280
Registered address
Munro House
Portsmouth Road
Cobham
Surrey 
KT11 1TF
Nominated advisor and joint broker
Singer Capital Markets Limited
1, Hanover St
London
W15 1YZ
Joint broker
Mirabaud Securities LLP
21, St James’s Square
London
SW1Y 4JP
Bankers
HSBC Bank Plc
8, Canada Square
London
E14 5HQ
Auditors
BDO LLP
2, City Place
Beehive Ring Road
Gatwick
West Sussex
RH16 0PA
Solicitors
CMS Cameron McKenna LLP
Mitre House
160 Aldersgate Street
London
EC1A 4DD This report has been printed in the UK. Our printers are accredited with the FSC  
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Overview
Advanced Computer Software plc
Annual Report 2010
Profile
Advanced Computer Software plc  
is a leading supplier of technology 
solutions to the health, care and 
commercial markets.
The Group comprises three main 
divisions: Business Solutions, Health  
& Care and Managed Services. 
Together, these divisions provide  
a range of software and IT services  
that enable public, private and  
third sector organisations to maintain 
control, improve visibility and gain 
efficiencies through streamlined 
processes.
Advanced has over 7 ,000 customers 
and prides itself on developing long-
term relationships with its customers  
to meet their evolving needs.
The Group is well positioned to  
deliver further growth and value  
by continuing to expand rapidly 
through product innovation,  
selective acquisitions and technical 
collaboration.
Contents
 
Overview 
1 Operational and financial highlights
2 Business at a glance
4 Chairman’s statement
6 Chief Executive’s review
Business review 
8 Operations
12 Financial review
Governance 
15  Corporate social responsibility 
statement
17 Board of Directors
18 Directors’ report
21 Corporate governance
24 Statement of Directors’ responsibilities
25 Directors’ remuneration report
27  Independent auditor’s report to the 
members of Advanced Computer 
Software plc
Financials  
29 Consolidated income statement
30  Consolidated statement of 
comprehensive income
31  Consolidated balance sheet
32  Consolidated cash flow statement
33  Consolidated statement of changes 
in equity
34  Notes to the consolidated 
financial statements
60  Company balance sheet
61  Notes to the financial statements 
of the Company
64  Company information Contact
 
Advanced Computer Software plc 
Munro House, Portsmouth Road, 
Cobham, Surrey KT11 1TF 
 
T: 01932 584 000
F: 01932 584 015 
E:  investor-relations@advcomputersoftware.com 
Advanced Computer Software plc Annual Report 2010
Annual Report 2010
Control 
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