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Dillistone Group Plc Annual Report and Accounts for the year ended 31 December 2016
Annual Report 
for the year ended 31 December 2016
Stock code: DSG
Empowering 
recruitment globally 
through technology
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Commenting on the results and prospects, 
Mike Love, Non-Executive Chairman, said:
“Product development continues to be a priority with 
a number of upgrades and new product launches 
successfully achieved in 2016. The year delivered 
a record level of revenues, and equally importantly, 
recurring revenues.
“Overall, despite what we consider to be short term 
economic turbulence, the Group believes that 
it is in a strong position in its core markets and 
is confident of future progress. As a result, we 
are delighted to propose an increase in our final 
dividend of 1.8% to 2.8p.”
Dr Mike Love 
Non-Executive Chairman
Look out for the following 
definitions throughout this report:
1. Adjusted operating profit is statutory operating 
profit before acquisition costs, related intangible 
amortisation, movements in contingent consideration 
and other one–off costs. See note 2.
2. Adjusted EBITDA is adjusted operating profit with 
depreciation and amortisation added back. 
3. Net cash funds are cash and cash equivalents held 
less bank borrowings. 
4. Adjusted basic EPS is computed from statutory profits 
after tax adjusted to exclude the post-tax effect of 
acquisition costs, related intangible amortisation, 
movements in contingent consideration and other 
one–off costs.
We provide software and services to recruitment firms and recruiting teams within major 
corporations. Across our subsidiaries, we work with over 2,000 firms in over 60 countries.
Our two divisions are Dillistone Systems and Voyager Software. Dillistone Systems specialises in 
the supply of software and services into executive level recruitment teams. Voyager Software’s 
clientele are primarily involved in contingent recruitment, including permanent placement, contract 
placement and the provision of temporary staff.
Welcome to the
Dillistone Annual Report 2016
Dillistone Group Plc is a global 
leader in the supply of technology 
solutions and services to the 
recruitment industry worldwide.
Read further within the report...
Look out for the following  
icons throughout this report:
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Contents
Overview
··········································································
Highlights 1
Timeline 2
Strategic Report
··········································································
Dillistone Group at a Glance 4
Chairman’s Statement 6
CEO’s Review 8
Financial Review 13
Governance
··········································································
Board of Directors 16
Corporate Governance Report 18
Report to the Shareholders  
on Directors’ Remuneration 20
Directors’ Report 22
Financial Statements
··········································································
Independent Auditor’s Report to the 
members of Dillistone Group Plc 24
Consolidated Statement  
of Comprehensive Income 25
Consolidated Statement  
of Changes in Equity 26
Company Statement  
of Changes in Equity 27
Consolidated and Company Statements 
of Financial Position 28
Consolidated Cash Flow Statement 29
Company Cash Flow Statement 30
Notes to the Financial Statements 31
Directors and Advisers 57
 ❯ Revenues up 6% from 2015 to £9.963m.
 ❯ Record level of recurring revenues of £7.027m, up 6% from 2015.
 ❯ Recurring revenues, representing 71% of Group revenue, cover approximately  
all of administrative expenses before acquisition related and one–off costs.
 ❯ Adjusted operating profit for the year up 3% to £1.463m.
 ❯ Profit after tax for the year is £0.526m after a pre-tax one–off amortisation adjustment  
of £0.720m. 
 ❯ Adjusted basic EPS fell slightly to 7.10p (2015: 7.26p).
 ❯ Basic EPS fell to 2.68p (2015: 6.20p) reflecting the amortisation adjustment.
 ❯ Final dividend of 2.8p per share recommended (2015: 2.75p).
 ❯ Net cash funds of £1.379m (2015: £1.270m).
 ❯ Dillistone Systems division reports strong turnaround in new business wins with over  
100 new client firms signing up in period with a total contract value of over £1.000m.  
Revenue up 5% to £4.858m.
 ❯ Voyager Software division saw an 18% increase in new business wins in 2016; launched  
ISV Online, and the first of a suite of mobile apps. Revenues grew 6% to £5.105m.
£7.03m
£6.61m
£5.93m
£5.27m
£4.53m
2014
2015
2016
2013
2012
Investor relations website
Visit our investor relations website at  
www.dillistonegroup.com for further  
information about Dillistone Group Plc.
Read more on Group Performance 
on pages 8 to 14
Adjusted profit before tax
3%
Recurring revenues
6%
£1.46m
£1.42m
£1.82m
£1.80m
£1.68m
2014
2015
2016
2013
2012
Strategic Report Governance Financial Statements
www.dillistonegroup.com 1
Highlights
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Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
2
Timeline
1983
The original FileFinder software was 
developed by David Dillistone, himself a 
retained search consultant. While it was 
initially created for in-house use, David soon 
realised that there was a market for it beyond 
his own firm, and so he created David 
Dillistone Systems. 
By the late 1990s, David had retired and 
the business – now renamed as Dillistone 
Systems – was owned by Custom Business 
Systems (CBS). CBS invested heavily in the 
firm and, by the end of the decade, offices 
had been established on three continents. 
2003
2006
2014
2015 2016
2008
2013
2011
2012
1990
In 2003, the current management team 
took part in a management buyout of 
the business. The dawn of the internet 
meant that it became far easier to sell 
the FileFinder system internationally, 
and, as a result, Dillistone Systems  
grew rapidly. 
In March 2011, FileFinder 10 was 
released after over two years of 
development. In September 2011, 
the Group made its first acquisition: 
Voyager Software. 
In 2008, a decision was taken to significantly 
increase R&D expenditure, and the 
development of the next generation of 
FileFinder began. 
In 2006, the Group floated on the AIM 
market of the London Stock Exchange 
(DSG. L). 
In September 2012, Voyager Infinity 
was launched after three years of 
development. 
In July 2013, the Group made its second 
acquisition: FCP Internet. 
In October 2014, the Group acquired 
ISV Software. 2014 saw the release of 
FileFinder Anywhere, a market leading 
product suited to mobile working. 
Voyager software division launched ISV 
Online and the first of a suite of mobile apps.
Voyager Software division – launch of 
cloud hosted version of Infinity; launch of 
integration of ISV FastPath and Infinity; and 
launch of version 6 of Evolve. 
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Strategic Report
Dillistone Group at a Glance 4
Chairman’s Statement 6
CEO’s Review 8
Financial Review 13
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Dillistone Systems division
Dillistone Systems is a leading global supplier 
of technology and services to executive search 
firms and to in-house search teams at major 
corporations and not-for-profit organisations. 
The Division’s principal product is the FileFinder 
Anywhere suite, which is typically delivered from 
the cloud via a range of Apps. The Division is 
headquartered in the UK, but has offices in the 
United States, Australia and Germany and serves 
clients in more than 60 countries, generating 
more revenue from outside the UK than from its 
home market. It employs around 60 people. 
Dillistone Systems is widely acknowledged to 
work with more executive search firms than any 
comparable supplier, and is also considered 
to be a thought leader in this space. As a 
result, the Division has also moved beyond 
the supply of software, and provides additional 
services including training in executive search 
techniques, marketing and advertising services, 
and also runs regular events which are open to 
both client and non-client firms. 
Dillistone Systems  
division Products
FileFinder is designed specifically for the 
executive recruiting market with FileFinder 
Anywhere being the latest generation of the 
suite. FileFinder Anywhere is available in two 
forms: Essentials and Premium. 
FileFinder is an executive search database,  
CRM system, research tool, report writer and 
project management solution all rolled into one. 
It is designed to support every element of the 
search process. 
The product is unique in its market, in that it 
is available to purchase or to rent, and can be 
accessed via a Desktop App, a full Browser 
App, a Mobile App or through Microsoft Outlook 
(desktop or web versions).
Dillistone Group Plc is a 
global leader in the supply 
of technology solutions and 
services to the recruitment 
industry. Operating across 
60 countries, working with 
over 2,000 firms, we are  
made up of two divisions.
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
4
Dillistone Group at a Glance
For the year ended 31 December 2016
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Voyager Software division
Voyager Software itself became a part of the 
Dillistone Group in September 2011. It has 
always provided end-to-end recruitment 
solutions to the recruitment sector, typically those 
working on a contingency basis, and continues 
to do so to this day. In September 2012, Voyager 
Software launched its latest generation of 
recruitment solutions with its Infinity product. 
Infinity is designed to improve the performance 
and efficiency of recruitment businesses 
specialising in permanent, contract and 
temporary roles. With automation at its heart, it 
meets the demands of flexibility and functionality 
required by these recruitment firms. Alongside 
Voyager Software’s VDQ product, for pure fast 
paced temporary agencies, and Mid-Office, 
the pay-and-bill solution for the back office, 
the business covers the whole contingency 
recruitment space. In 2013, the Group acquired 
FCP Internet, suppliers of the evolve™ SaaS 
product, and this has subsequently been 
integrated into the Voyager Software Division. 
In October 2014, a further acquisition, ISV 
Software – a supplier of skills testing and training 
services, was also incorporated into the Division. 
Today, the Voyager Software Division’s products 
are used in over 20 different countries by many 
thousands of users in different-sized recruitment 
businesses. The Division has offices in the UK 
and Australia and employs around 60 people. 
Voyager Software 
division Products
Voyager front office:
Voyager Infinity 
manages the work 
of recruiters working 
to fill permanent and longer-term contract/
temporary vacancies delivering measurable 
performance efficiencies and audit trails. 
Voyager Infinity SaaS has all 
of the great features of Infinity 
available as a managed service 
on the Azure Cloud with 
affordable set-up and affordable monthly cost. 
Voyager Infinity Connect Mobile App 
is the new super easy-to-use mobile 
app for Recruiters on the go. The 
app, available in both iOS (Apple) 
and Android (Google) stores, allows 
the user to quickly and easily look up contacts 
from their Voyager Infinity SaaS database and all 
communication is logged against the database 
in real time. 
Voyager VDQ! is designed for 
fast-paced blue and white 
collar temporary placement 
agencies that have to quickly 
assemble transient or ad hoc teams to serve 
highly volatile and urgent labour requirements. 
Voyager mid  
and back office:
Voyager Mid-Office Voyager’s flexible 
Pay & Bill solution, automates the 
processing of large volumes of 
timesheets and payments to numerous clients 
and candidates. 
Voyager Bureau enables bureaus to subcontract 
back-office operations for multiple client 
recruitment companies on a single platform. 
Evolve
Through FCP Internet, the 
division also provides its 
evolve
TM
 Solution. evolve™ has been designed to 
deliver an effective workflow solution for all sizes 
and types of recruitment business. It is delivered 
only as a SaaS product. 
ISV
ISV delivers pre-employment 
skills testing and training tools 
to recruitment businesses 
and corporates. In late 2016, ISV launched ISV 
Online, incorporating all the best elements from 
its original testing platform, FastPath. 
Strategic Report Governance Financial Statements
www.dillistonegroup.com 5
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“ The business 
is committed to 
maintaining its policy 
of investing in its 
products and services 
whilst rewarding its 
shareholders.”
Dr Mike Love 
Non-Executive Chairman
71% Recurring
24%
5%
Non recurring
3rd Party
Revenue analysis  
2016
Product development 
continues to be a priority 
with a number of upgrades 
and new product launches 
successfully achieved  
in 2016. The Group delivered 
its best ever revenue 
performance with revenue 
up 6% to £9.963m.
This performance was impacted by the Brexit 
vote in the UK, which reduced demand in  
our home markets while weakening Sterling  
and, therefore, increasing the value of our 
overseas sales. 
Underlying profit before tax, acquisition costs 
and one–off adjustments rose 3% to £1.458m. 
As mentioned in our pre close statement, the 
Group has undertaken a review of its accounting 
judgements in respect of the amortisation of 
platform development costs and subsequently 
decided to write these costs off over a period 
of five years, rather than a period of five to 
ten years, resulting in a one–off adjustment of 
£0.720m. Accordingly, operating profit fell to 
£0.412m with reported profit after tax falling 
to £0.526m. This is a non-cash accounting 
adjustment and brings our accounting treatment 
into line with industry practice. The resulting 
basic EPS for the period was 2.68p. 
Dividends
The Board was pleased to increase the interim 
dividend payment in September 2016 to 1.375p 
per share (2015: 1.35p) and has recommended 
an increased final dividend of 2.8p per share 
(2015: 2.75p), subject to shareholder approval, 
payable on 27 June 2017 to holders on the 
register on 2 June 2017. Shares will trade ex 
dividend from 1 June 2017. This takes the total 
dividend based on the 2016 results to 4.175p 
(2015: 4.10p), and gives a yield of 4.9% on a 
share price of 84.5p. 
This represents our fifth successive year on year 
increase in the dividend, in line with our policy 
of progressing dividend payments, subject to 
the cash needs of the business. The business is 
committed to maintaining its policy of investing 
in its products and services whilst rewarding its 
shareholders. 
Staff
Our staff are fundamental to our success. 
It is through their efforts, commitment and 
determination that we continue to be a leading 
technology provider in the sectors we serve. 
On behalf of the Board I would like to take this 
opportunity to thank all of our staff. 
Outlook
We are pleased to note that total revenue in 
Q1 2017 is ahead of the same period in 2016 
despite turbulent markets for many of our 
recruitment clients. 
Although the Group derives revenue from clients 
around the Globe, 72% of our revenues in 2016 
were derived from the UK recruitment market 
and the decision of the UK to “Brexit”, taken in 
June 2016, has had an impact on this sector. In 
turn, this has impacted our new business sales: 
while incoming orders in the first quarter of 2016 
benefited from a confident UK economy, this has 
not been the case in the second half of 2016 and 
the first quarter of 2017. 
While new business orders may have been 
impacted by economic turbulence, our recurring 
revenue base has reached record levels. This is 
true for both of our divisions and these long term 
recurring revenues are expected to cover the 
majority of our administrative costs and thereby 
giving us confidence in the future of the Group. 
Furthermore, we are anticipating an 
improvement in orders in the latter months of 
2017 and the early part of 2018 as the incoming 
General Data Protection Regulation (“GDPR”) 
rules, which come into effect on 25 May 2018 
and which will require recruitment firms to 
take steps in the run up, are likely to have a 
significant impact on the recruitment technology 
space. We believe that this impact will be positive 
for the Group. 
Technological innovation is key to our long term 
success. In addition to the ongoing development 
of our existing product range, the Group is 
investing in the creation of an exciting new 
product. While development of this product has 
begun, it will not generate significant revenue 
prior to 2018, and although the majority of 
development costs are expected to be capitalised 
other costs will be expensed in 2017. Despite 
the increased expenditure, we believe that this 
product will have a significant positive impact 
in the future. We are currently appraising debt 
funding arrangements for the completion and 
launch of this new product. 
Overall, despite what we consider to be short 
term economic turbulence, the Group believes 
that it is in a strong position in its core markets 
and is confident of future progress. As a result, 
we are delighted to propose an increase in our 
final dividend of 1.8% to 2.8p (2015: 2.75p). 
Dr Mike Love
Non-Executive Chairman
25 April 2017
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
6
Chairman’s Statement
For the year ended 31 December 2016
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Case Study
In each annual report we highlight how one of our solutions 
is helping a client to generate real business efficiencies. Last 
year our case study looked at how White Knight Recruitment is 
taking advantage of two of our products – Infinity and FastPath. 
This year we are looking at Damhurst & Co.  
Damhurst & Co is a retained executive search company 
established in 2016, focusing on mid-senior appointments  
in the insurance and reinsurance sector.
After using a competitive product for 
years at his previous firm, company 
director James Cooper reviewed 
other executive search software 
options, and decided that FileFinder 
Anywhere was the solution best 
meeting his requirements. 
Six months after going live, James 
shares what affected his decision 
and his initial impressions as a 
FileFinder user. 
Dillistone Systems: Why did you 
decide to invest in specialised 
executive search software?
James Cooper: I believe that executive 
search and recruitment are very 
different, therefore they have different 
requirements when it comes to 
technology. As a research-driven 
business, data is paramount for 
us – so we needed to find the best 
system, tools and people to help us 
collect and use data for our search 
assignments. After reviewing the 
market, FileFinder Anywhere and  
the Dillistone team seemed to tick  
all the boxes!
Dillistone Systems: How was the 
implementation process?
James Cooper: Implementing 
FileFinder Anywhere was a very 
easy and enjoyable process, mostly 
because of the people we have had 
to deal with at Dillistone Systems – 
in particular, I want to thank your 
projects and training teams for their 
efforts, and for being very helpful 
during the whole transition period. 
Dillistone Systems: Six months 
in, what are your impressions of 
FileFinder Anywhere?
James Cooper: FileFinder Anywhere 
is a sophisticated piece of software. 
Previously, I used a well-known 
competitive product, and enjoyed 
using it very much – however, now 
that I am using FileFinder Anywhere, 
I would not swap back for love or 
money! You have to invest some time 
in learning how to use the product but 
it is all worthwhile in the end – and 
again, the training team is there to 
help and they are doing a superb job. 
Dillistone Systems: How do you rate 
our support service?
James Cooper: The technical support 
service is anything but formulaic. 
The support team really does listen 
to you, they take time to understand 
what the issue is, and after a couple 
of conversations, we have been able 
to match our processes to FileFinder. 
I can now run reports showing the 
entire scope of my projects, which  
is very helpful. 
Dillistone Systems: Was your decision 
to invest in FileFinder Anywhere the 
right one for your business?
James Cooper: 100% yes! It has 
definitely impacted our productivity 
and our ability to serve our clients 
better. 
Dillistone Systems: Would you 
recommend FileFinder Anywhere to 
other executive search firms?
James Cooper: Yes, I would… but only 
if they are not operating in our sector!
07
Q&A with James Cooper
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“ This strategy  
is made possible 
through our 
commitment 
to product 
development.”
Jason Starr 
Chief Executive
49% Dillistone
51% Voyager
Divisional revenue analysis  
2016
Dillistone Group Plc is a 
global leader in the supply 
of technology solutions and 
services to the recruitment 
sector worldwide.
Strategy and objectives
The Group’s strategy is to grow the business both 
organically and through acquisition. This strategy 
is made possible through our commitment to 
product development, which ensures that the 
business continues to command a leading role in 
all of the markets in which it operates. 
Our acquisition strategy typically entails 
consideration of businesses offering:
• products that would further increase market 
share in the Group’s core markets; 
• legacy applications, where clients could be 
transferred to our modern suite of products; or
• complementary applications, which may be 
cross-sold to clients of the Group.
The Group’s objectives are principally to:
• ensure our products meet the needs of 
the recruitment sector through continual 
investment and development;
• be a leading player in all of the markets we 
serve;
• develop our staff delivering progressive career 
development;
• increase our profitability and deliver increased 
shareholder value year on year in conjunction 
with a progressive dividend policy.
Key Performance Indicators (KPIs)
The Board and management use absolute figures to monitor the performance of the business in the 
following financial KPIs:
FY 2015 
£’000
FY 2016
£’000 measure used by management
Met/Not
met
Total revenues 9,437 9,963 year on year growth met
Recurring revenues 6,606 7,027 year on year growth met
Non recurring revenues 2,333 2,370 year on year growth met
Adjusted profit before tax 1,416 1,458 year on year growth met
Cash less borrowings 1,270 1,379 sufficient cash resources maintained met
Adjusted profit before tax is statutory profit before acquisition costs, related intangible amortisation, movements in 
contingent consideration and other one–off costs. See note 2 and note 5. 
In addition, the Board monitors order levels and employee numbers as well as performance  
against budget. 
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
8
Chief Executive Officer’s Review
For the year ended 31 December 2016
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Our business model
The business is split into two divisions, Dillistone 
Systems and Voyager Software. Dillistone Systems 
specialises in the supply of software and services 
into executive-level recruitment teams. Voyager 
Software’s clientele are primarily involved in 
contingent recruitment, including permanent 
placement, contract placement and the provision 
of temporary staff. Across our subsidiaries, we 
work with over 2,000 firms in approximately 60 
countries. Further details of the products we 
supply are given in the ‘At a Glance’ section. 
The majority of our products are delivered 
through one or more of the following:
1. an upfront licence fee plus a recurring 
support fee;
2. Software as a Service (SaaS) subscription 
basis; or
3. a hybrid model incorporating an upfront 
payment and recurring support and Cloud 
hosting fees.
There is a continuing move towards our Cloud 
delivery services. 
The business operates out of four countries: the 
UK, Germany, the US and Australia. As well as 
supplying and supporting our software we also 
host the software for a proportion of our clients. 
This is done through data centres in Europe, the 
Americas, Singapore and Australia. 
In 2000+ ﬁrms across 60 countries, our clients are situated  
across the entire recruitment landscape.
They say that we provide them with:
Stability, ﬂexibility and functionality
Easy access to their data 
Rapid deployment
Ongoing development ensures upgrade path for clients
Our large client base means that we do not depend on a  
small number of clients.
We generate revenue typically through three pricing mechanisms:
Upfront licence fee plus recurring support fee
Software as a Service (SaaS) subscription basis
Hybrid model incorporating upfront payment and recurring support 
and hosting fees
Short and long term value 
for our clients
Short and long term value for 
our shareholders
THAT PROVIDE
Global thought leaders
Ofﬁces in UK, Germany, USA, and Australia
 Data centres in Europe, USA, Brazil, Singapore, and Australia
Around 120 staff
  Our suite of innovative recruitment software is packaged with  
an end-to-end service
 Additional services include training, data translation, support 
services and running conferences
 Our data centres enable us to offer optional hosting
Our IP, human and physical capabilities Products and services
WE UTILISE TO DELIVER
Further details of the products we supply are given  
in the ‘At a Glance’ section on pages 4 and 5
Strategic Report Governance Financial Statements
www.dillistonegroup.com 9
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Group review  
of the business
2016 saw recurring revenues grow 6%  
to £7.027m (2015: £6.606m) reflecting,  
in part, a foreign currency impact from  
Sterling weakening in 2016 (impact 3%).  
Non-recurring revenues increased 2% to 
£2.370m (2015: £2.333m). As a result, 
overall revenues increased by 6% to £9.963m 
(2015: £9.437m) with recurring revenues 
representing 71% of Group revenues 
(2015: 70%). Overheads have increased across 
the business mainly as a result of the one–off 
adjustment in respect of the amortisation of 
platform development costs, referred to below, 
with an adverse impact on results of £0.720m. 
Clearly, this adjustment is an accounting change 
in an estimate and is cash neutral. Adjusted 
EBITDA saw a 6% increase to £2.433m 
(2015: £2.285m). Operating profit before 
acquisition related items and one–off adjustments 
increased by 3% to £1.463m (2015: £1.424m) 
and pre-tax profits before acquisition related 
items and one–off adjustments also increased 
by 3% to £1.458m (2015: £1.416m). 
Operating profit for the year was £0.412m 
(2015: £1.108m) and profit for the year was 
£0.526m (2015: £1.212m). 
Divisional Reviews
Dillistone Systems
The Dillistone Systems division is primarily 
focused on providing technology solutions to 
the executive search market via our range of 
“FileFinder” applications. This client group is 
made up of both executive search firms and 
executive search teams in major organisations. 
Dillistone Systems’ head office is in London and 
it has offices in the US, Germany and Australia. 
The Division accounts for 49% (2015: 49%) of 
the Group’s revenue and it saw revenue grow 5% 
to £4.858m (2015: £4.620m). 
The Division had a difficult time in 2015 and 
we are delighted to see it return to growth in 
2016. Our investment in product development 
led to a number of key new contract wins. We 
are delighted to report that – to the best of our 
knowledge – the largest single implementation 
on an Executive Search technology platform in 
the US in 2016 was our FileFinder Anywhere 
product. This implementation was by an existing 
client who chose to upgrade to our latest 
suite. Furthermore, we believe that the largest 
single implementation of an Executive Search 
technology platform in Europe in 2016 was also 
our FileFinder Anywhere product which was 
implemented by a firm which replaced a legacy 
tool with our technology, choosing to become a 
client for the first time. 
The business signed up over 100 new clients 
in the period, with clients switching from direct 
competitors including Bullhorn, Cluen and 
Invenias, and we believe that our product has 
now returned to a position of market leadership. 
Unfortunately, while our new business 
performance was good, the economy impacted 
on licence revenues from our existing client base, 
a large proportion of which are UK based. We 
typically enjoy additional sales from these firms 
as they grow, but in 2016 a larger proportion of 
those firms reduced licences rather than taking 
on additional seats. 
Earnings before interest, tax, depreciation and 
amortisation (EBITDA) increased by 1% to 
£1.434m (2015: £1.425m). As discussed above, 
the Group reviewed its amortisation policy for 
capitalised development costs to bring it more 
into line with industry practice by writing off all 
such costs over five years rather than a range 
of five to ten years. The impact of this on the 
Dillistone division was £0.600m, increasing 
the total depreciation and amortisation charge 
to £1.229m (2015: £0.534m). Accordingly, 
operating profit fell 77% to £0.205m 
(2015: £0.891m). 
We continue to invest in the FileFinder Anywhere 
product suite, which has included the release of 
a client portal, improved reporting functionality, 
improvements in our mobile offering and 
architectural enhancements to improve both 
performance and scalability. 
Voyager Software
Voyager Software is a provider of technology 
products targeted at the entire recruitment 
landscape, from front office to back office 
and bureaus, and includes both recruitment 
management systems and pre-employment skills 
testing technology. 
In 2016, the Voyager Software division accounted 
for 51% (2015: 51%) of Group revenues. The 
Division’s revenues increased by 6% to £5.105m 
(2015: £4.831m). Segmental operating profit 
before amortisation and depreciation increased 
by 14% to £1.093m (2015: £0.956m). The 
impact of the change in amortisation policy 
for capitalised development was £0.120m, 
increasing the total depreciation and amortisation 
charge to £0.461m (2015: £0.327m). Divisional 
operating profit remained broadly unchanged at 
£0.632m (2015: £0.629m). 
2016 saw some major developments in the 
Division including:
• Development of Infinity Connect – A new 
mobile companion app for the popular Infinity 
SaaS solution, available for both iOS and 
Android devices.
• Additional functionality release in Infinity (inc. 
Infinity SaaS) for the temporary recruitment 
sector.
• Further enhanced scalability of Evolve through 
deployment on Amazon Web Services and 
implementation of Elastic Searching.
• Launch of ISV.Online - our new candidate 
skills testing platform.
The Board is confident that both Divisions have 
strong futures. 
Financial risk management
The Group’s operations expose it to a number of 
risks that include the effect of changes in interest 
rates, credit, foreign currency exchange rates and 
liquidity. The Group does not trade in financial 
instruments. Further details in relation to these 
risks are shown in note 25. 
Interest rate risk
The Group is exposed to interest rate risk 
through its floating rate borrowings and through 
its management of retained cash. The Group 
monitors its exposure to interest rate risk when 
borrowing and investing its cash resources. 
Credit risk
The Group has a large customer base in excess 
of 2,000 customers and is not dependent on a 
small number of customers. Accordingly, the 
Group does not believe it is exposed to significant 
credit risk. In addition, it only places money with 
banks with strong credit ratings. 
Exchange risk
The Group is exposed to translation and 
transaction foreign exchange risk. The Group’s 
foreign operations primarily trade in their own 
currencies, reducing the transaction risk. As a 
result the main foreign exchange transactional 
exposure arises when repatriating profits. The 
Group only seeks to remit cash when required 
in the UK and it usually has some flexibility on 
timing of such appropriations to minimise any 
exchange losses. The Group is, however, exposed 
to translation risks on net assets held. 
Liquidity risk
Although the Group has some borrowings, it 
maintains positive cash resources and has 
sufficient available funds for its operations and 
planned expansion of its existing activities. 
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
10
Chief Executive Officer’s Review continued
For the year ended 31 December 2016
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Principal risks and uncertainties
There are a number of risks and uncertainties which could have an impact on the Group’s long term performance and cause actual results to differ 
materially from expected and historical results. The Directors seek to identify material risks and put in place policies and procedures to mitigate any 
exposure. The table of risks that follows gives details of the principal risks and the approach being taken to manage them. 
Risk Potential adverse impact Mitigation
Economic risk The recruitment industry has a reputation for being 
vulnerable to the cyclical nature of the economy. This can 
impact significantly on non-recurring revenue and to a 
lesser extent recurring revenue.
The Company operates globally and so is not reliant on 
one economy. It enjoys a high % of recurring revenues. 
Acquisitions have increased the exposure to the UK 
economy. Future acquisitions may be overseas.
In a downturn there may be a reduction in new permanent 
hires which may be replaced by temporary hires. The 
temporary recruitment market is potentially anti-cyclical. 
The Group’s products support both permanent and 
temporary hires.
New product risk All technology suppliers need to develop new products and 
applications and there is always a risk that new products 
may lead to issues. This could damage the Group’s 
reputation and result in loss of new orders and therefore 
reduce revenue growth. It could also result in claims 
against the company.
The cost and time frame for developing and releasing new 
products could be a bigger drain on resource than built into 
budgets and forecasts.
Products are tested pre-launch, and launch and 
implementation strategies developed to minimise risks. 
The Development plan is regularly reviewed by 
management and the Board.
Attrition of 
customer base
Failure to attract new customers, or the loss of existing 
customers, may have a detrimental effect on the Group’s 
ability to generate revenues.
Actively manage existing customer relationships through 
account management structures and promptly dealing with 
issues. 
The Group continues to invest in new products with new 
features being added. 
Competitor activity The market for recruitment software is extremely 
fragmented with a large number of small suppliers 
operating in all of the Group’s geographical markets. 
Very few of these suppliers have the necessary financial, 
technical and marketing resources to be able to develop 
their competitive position. However, the competition may 
intensify through consolidation or new entrants to the 
market.
Some competitors offer a broader product range enabling 
them to compete across the whole of the sector.
The businesses can easily lose market share if its products 
are not well regarded either from being “out of date” or 
“buggy”.
Some firms may try to compete on price, particularly if the 
market deteriorates. 
The Group has strong customer relationships and uses 
account management to keep in touch with clients.
The Group continues to invest in its product development 
and 2016 saw the addition of temp functionality to Infinity 
and the launch of a stand-alone browser version of FF.  
ISV Online was also launched. The Group continues to 
innovate and provide solutions to client needs.
There is a focus on fixing bugs and issues as they arise to 
ensure the user experience is good.
Pricing strategies are reviewed on a regular basis. 
The Group continues to look into developing new products 
and additional features to more readily compete. 
Strategic Report Governance Financial Statements
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Risk Potential adverse impact Mitigation
Business continuity 
risks associated 
with information 
systems, 
operational failure, 
data security and 
cyber security risks
A failure of systems or failure of hosting facilities leading 
to loss of customer confidence in the Group being able to 
deliver their requirements.
Loss or corruption of data held on behalf of customers 
which could have a detrimental effect on their confidence 
in data security processes and could cause financial loss.
External attacks on servers could result in lost or corrupted 
data and loss of reputation.
Each division is reliant on data centres. Work ongoing  
to move data centres to the cloud through Amazon  
and Azure. 
Plans are regularly reviewed on how to improve data centre 
management as the business grows worldwide. 
Data backups occur daily and the necessary test carried 
out on a regular basis to ensure data can be restored. 
Penetration testing helps minimise the risk of attacks. 
Employee 
engagement and 
retention
Capability to meet the demands of the markets in which 
the Group operates and competes effectively with other IT 
suppliers is largely dependent on the skills, experience and 
performance of staff.
Failure to attract or retain high calibre employees could 
seriously impede future growth and present performance. 
Reliability on small group of people especially in parts of 
the business.
To retain staff the Group operates competitive remuneration 
packages.
Appraisals are carried out which also consider individual’s 
personal development.
Cross training being carried out where possible.
Ability to finance 
acquisitions and 
new development
The Group wants to grow either by acquisition or through 
development of its own products. This requires that it will 
have the ability to fund such expansion either via borrowing 
or placement, or through the availability of its own  
cash resources.
Ongoing discussions with investors and potential investors 
to build a following in Dillistone. 
Management 
capacity
Size of business means that management tends to be 
stretched and under resourced. As the business grows 
there may be insufficient support to ensure that the growth 
is effectively managed and integrated.
Investment in additional management in 2016 at Voyager 
and additional finance resource. In 2017 we anticipate a 
further strengthening of product development management 
capability.
FX The Group has substantial operations in both the UK and 
overseas. Profits are exposed to variations in exchange 
rates thereby impacting on reported profits. 
There is usually some element of natural hedge in the 
currencies, although if Sterling strengthens against all 
currencies it can have a negative impact on results.
Brexit Potential economic uncertainty could lead to a reduction in 
orders in the short to medium term, impacting adversely on 
the Group’s results.
Clearly, any changes brought about by Brexit are likely to 
be implemented over the next 2 years now that Article 50 
has been invoked, which might introduce changes to the 
UK-EU trading arrangements.
This may impact where recruiting individuals with 
European languages requirement. It may increase the time 
and difficulty in recruiting skilled employees.
‘Brexit’ has had an impact on exchange rates, which are 
already a significant risk. 
Clients usually choose best in class and already buy from 
global firms. The Group continues to monitor implications 
and is continually reviewing its products and pricing to 
ensure it stays competitive.
We deal with visa requirements for some staff already. 
Data Protection 
legislation
Ensure that all group products comply with international 
Data protection legislation and demonstrate to clients that 
they do.
Work being carried out to ensure data is secure and 
protected at appropriate levels.
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
12
Chief Executive Officer’s Review continued
For the year ended 31 December 2016
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“ The Group finished 
the year with cash 
funds of £1.537m 
(2015: £1.595m)  
and bank borrowings 
of £0.158m  
(2015: £0.325m).”
Julie Pomeroy 
Finance Director
Total revenues increased 
by 6% to £9.963m (2015: 
£9.437m) with recurring 
revenues increasing by 6% 
to £7.027m (2015: £6.606m) 
while non-recurring 
revenues saw a 2% increase 
to £2.370m (2015: £2.333m). 
Third party revenue amounted to £0.566m in the 
period (2015: £0.498m). Revenue has benefitted 
from the weakening value of Sterling. Using 2015 
exchange rates, revenues in 2016 would have 
been £9.651m. 
Cost of sales increased by 13% to £1.478m 
(2015: £1.313m), mainly due to investment in 
cloud based hosting facilities through Azure  
and Amazon. 
Administrative costs, excluding acquisition 
related items, depreciation and amortisation, 
rose 4% to £6.052m (2015: £5.839m). The 
Group has reviewed its amortisation policy for 
capitalised development costs to bring it more 
into line with industry practice by writing off all 
such costs over five years rather than a range of 
five to ten years. This has resulted in a one–off 
adjustment of £0.720m in the year, where the 
main impact was in the Dillistone division. Total 
depreciation and amortisation, including the  
one–off adjustment, increased to £1.690m  
(2015: £0.861m). 
Acquisition related administrative costs totalled 
£0.331m (2015: £0.316m), and were in respect 
of the amortisation of intangibles arising on 
the Voyager, FCP and ISV acquisitions and 
movement in the estimation of contingent 
consideration. Finance cost includes £0.015m 
(2015: £0.028m) relating to the unwinding 
of the discount in respect of the contingent 
consideration. 
Recurring revenues covered 100% of 
administrative expenses before acquisition 
related and one–off costs (2015: 99%). 
Excluding depreciation and amortisation of our 
own internal development, the administrative 
costs are covered 116% (2015: 113%) by 
recurring revenues. 
There is a tax credit in 2016 of £0.134m  
(2015: credit £0.140m). The 2016 credit reflects 
the significant R&D tax credits available to 
both Dillistone Systems and Voyager Software 
divisions, the change in deferred tax rate from 
18% to 17%, as well as the impact of the 
one–off adjustment in respect of amortisation of 
development costs and adjustments to prior year 
computations. These benefits are partially offset 
by the higher rates of corporation tax that are 
payable overseas. The acquisition related items 
tax credit reflects the reduction in deferred tax 
that arises as amortisation is charged in the profit 
and loss account. 
Profits for the year before acquisition related 
and other one–off items fell 2% to £1.395m 
(2015: £1.419m) as 2015 adjusted profits 
benefitted from a tax credit of £0.003m  
(2016: tax charge of £0.063m). Profits for the 
year after acquisition related and other one–off 
items fell 57% to £0.526m (2015: £1.212m). 
Basic earnings per share (EPS) fell to 2.68p 
(2015: 6.20p). Fully diluted EPS fell to 2.62p 
(2015: 6.00p). Adjusted basic EPS fell 2% to 
7.10p (2015: 7.26p). 
Capital expenditure
The Group invested £1.126m in property, plant 
and equipment and product development during 
the year (2015: £1.045m). This expenditure 
included £1.056m (2015: £0.961m) spent on 
intangible related costs. 
£0.52m
£1.21m
£1.15m
£1.23m
£1.24m
2014
2015
2016
2013
2012
Profit after tax
2016
Strategic Report Governance Financial Statements
www.dillistonegroup.com 13
Financial Review
For the year ended 31 December 2016
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Trade and other payables
As with previous years, the trade and other 
payables include income which has been 
billed in advance but is not recognised as 
income at that time. This principally relates 
to support, SaaS and cloud hosting renewals, 
which are billed in 2016 but that are in 
respect of services to be delivered in 2017. 
Contractual income of this type is recognised 
monthly over the period to which it relates. 
It also includes deposits taken for work 
which has not yet been completed, as such 
income is only recognised when the work is 
substantially complete or the client software 
goes ‘live’. Also included in trade and other 
payables is £0.375m (2015: £0.620m) 
in respect of contingent consideration. At 
the end of 2016, there are two tranches of 
contingent consideration payable in respect 
of ISV and these are dependent on the level 
of revenue achieved in 2016 and the nine 
month period to 30 September 2017. 
Cash
The Group finished the year with cash funds 
of £1.537m (2015: £1.595m) and bank 
borrowings of £0.158m (2015: £0.325m). 
This is after capital expenditure of £1.126m, 
the payment to the vendors of ISV of £0.212m 
and dividend payments of £0.811m. 
On behalf of the Board
Julie Pomeroy
Finance Director
25 April 2017
The Strategic Report is signed on  
behalf of the Board by
Jason Starr
Chief Executive
25 April 2017
£2.43m
£2.29m
£2.40m
£2.24m
£2.00m
2014
2015
2016
2013
2012
Adjusted EBITDA 
2016
7.10p
7.26p
8.56p
7.99p
7.20p
2014
2015
2016
2013
2012
Adjusted basic EPS 
2016
2.68p
6.20p
6.18p
6.76p
6.79p
2014
2015
2016
2013
2012
Basic EPS 
2016
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
14
Financial Review continued
For the year ended 31 December 2016
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Governance
Board of Directors 16
Corporate Governance Report 18
Report to the Shareholders  
on Directors’ Remuneration 20
Directors’ Report 22
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Mike Love, aged 68, 
Non-Executive Chairman 
Mike Love has a PhD in theoretical physics and over 40 years’ experience 
in the software industry. He is currently non-executive chairman of SciSys 
plc, also an AIM quoted company, and director and chairman at Redcliffe 
Precision Ltd. He was group managing director of SciSys from 1986 to 
2003 during which time he led a management buy-out of the business and 
floated it on AIM in 1997. He is a previous member of the AIM Advisory 
Group of the London Stock Exchange. 
Jason Starr, aged 45, 
Chief Executive
Jason Starr joined Dillistone Systems in 1994. He became Marketing 
Manager in 1996 before becoming Managing Director of the UK business 
in 1998. Following the MBO, Jason became Managing Director of Dillistone 
Systems Ltd and subsequently became Group Chief Executive Officer. 
Jason is well known in the industry and has spoken at events in Asia, the 
US and Europe. Jason was appointed a non-executive director of AIM listed 
PCI-PAL PLC from 1 January 2016. 
Jason has a BA (Honours) business studies degree from the London 
Guildhall University. 
Jason is the Group Chief Executive of Dillistone Group Plc and Managing 
Director of Dillistone Systems. 
Rory Howard, aged 49, 
Operations Director 
Rory Howard has a BA (Honours) in Business Administration and is a 
PRINCE2 practitioner. Rory started his career with the Dixons Stores 
Group and from 1991 to 1994 he worked in the systems and control 
department as a technical support analyst working on their EPOS systems, 
data reporting and security. He then joined JATO Dynamics Ltd, a software 
company specialising in the automotive research market, as a database 
analyst, developing databases for pricing models for the large automotive 
manufacturers. In 1998 he joined Dillistone Systems Limited as a project 
manager, and the following year became the Global Projects Manager, 
tasked with restructuring all implementations and data migrations 
procedures and operations. In 2003 Rory became Operations Director of 
Dillistone Systems Limited and a member of the Board. 
Alex James, aged 44, 
Product Development Director
Alex graduated from Swansea University in 1995 with a degree in 
Psychology. In 1995 Alex joined Mallinckrodt Veterinary, working in quality 
control. In 1997 he moved to Responseability, a company that manages 
aspects of the recruitment process for clients, starting in administration 
before progressing into an account management role. Alex started at 
Dillistone in 1999 in a training/consultancy position prior to becoming the 
UK and then Global Projects Manager, being ultimately responsible for 
the implementation of all products and services to both new and existing 
clients. Alex joined the Board of Dillistone Systems Limited in January 2005 
and the Group Board in February 2006. 
Alex is the Product Development Director for Dillistone Systems; 
departments under his responsibility are software development and 
technical integration. 
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
16
Board of Directors
For the year ended 31 December 2016
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Strategic Report Governance Financial Statements
Julie Pomeroy, aged 61, 
Finance Director
Julie is an experienced finance director of quoted and private companies. 
She graduated with an honours degree in Physics from Birmingham 
University and is a Chartered Accountant and Chartered Director. She also 
holds tax and treasury qualifications. Julie was group finance director of 
Carter & Carter Group plc until October 2005, having joined in 2002 to 
help grow and float the business. She had previously been chief financial 
officer of Weston Medical Group plc and prior to this Julie worked at East 
Midlands Electricity plc as director of corporate finance. She was finance 
director of AIM quoted Biofutures International plc until July 2010. Julie is 
also a non-executive director of Nottingham University Hospitals NHS Trust. 
Alistair Milne, aged 41, 
Director of Support Services 
Alistair started his career at Richmond Theatre in 1994, working in both 
the marketing department and box office. In 1997 he joined The Football 
Association, initially in a ticketing administration role, before progressing 
to a management role. Alistair then began working at the Shaw Theatre 
as Box Office Manager. He joined Dillistone Systems in 2003. He was 
initially appointed to the UK and then Global Support Manager role with 
responsibility for all aspects of support services. He was promoted to the 
Dillistone Systems Limited Board in 2006 and joined the Group Board in 
January 2011. 
Alistair is the Director of Support Services; he oversees all Dillistone IT 
infrastructure and support services globally. 
Giles Fearnley, aged 62, 
Non-Executive Director
A career in the passenger transport industry saw Giles lead an MBO in 
1991, forming Blazefield Holdings Limited, a business operating bus 
networks principally across Yorkshire and Lancashire. This company was 
sold to Transdev in 2006. 
In 1997 he was appointed chief executive of Prism Rail PLC, having been 
one of that company’s founders, and held that position until its sale to 
National Express in 2000. Prism Rail operated four of the UK’s passenger 
rail franchises with a turnover of £500 million per annum. 
Giles is currently managing director of Bus, UK and Ireland for First 
Group Plc. Giles served as chairman of the Association of Train Operating 
Companies in 1999/2000 and as chairman of The Confederation of 
Passenger Transport UK. 
Audit Committee
Remuneration Committee
Committee icons
www.dillistonegroup.com 17
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Corporate governance
Dillistone Group Plc (the “Company”) is 
committed to maintaining high standards of 
corporate governance. The Company does not 
comply with the provisions of the UK Corporate 
Governance Code (the “Code”) in its entirety 
and it is not required to do so. However, the 
Board recognises the importance of sound 
corporate governance and will take appropriate 
measures to ensure that the Company complies 
with the main provision of the Code as far as 
practicable and to the extent appropriate given 
the Company’s size, assets, liabilities and other 
relevant information. The summary below  
further describes the company’s approach  
to corporate governance. 
Leadership
The Board comprises a Non-Executive 
Chairman, one Independent Non-Executive 
Director and five Executive Directors. All 
Directors are obliged to submit themselves 
for re-election at least every three years. The 
Chairman and Non-Executive Director are 
considered to be independent of management 
and free from any business or other relationship 
which could materially interfere with the exercise 
of their independent judgement. Giles Fearnley 
is the current Senior Independent Director  
and his shareholding of approximately 2.3%  
is not considered by the Board to change  
his independence. 
Effectiveness
To enable the Board to discharge its duties, 
all Directors have full and timely access to all 
relevant information. They are also able to take 
independent professional advice as appropriate. 
The Board has two committees:
Audit Committee
The Audit Committee comprises the Chairman 
and the Non-Executive Director and usually 
meets twice during the year. 
The Finance Director, Group Chief Executive 
Officer (CEO) and external Auditor attend 
by invitation. The Audit Committee makes 
recommendations to the Board on issues 
surrounding the appointment, resignation or 
removal of auditors and their remuneration. It 
discusses and agrees the scope of the audit with 
the external Auditor before the audit. 
The Audit Committee reviews external audit 
activities, monitors compliance with statutory 
requirements for financial reporting and reviews 
the half-year and annual accounts before they 
are presented to the Board for approval. It is 
also required to review the effectiveness of the 
Group’s internal control systems, to review the 
Group’s statement on internal control systems 
prior to endorsement by the Board and to 
consider, from time to time, the need for  
a risk assessment of the Group’s internal  
control systems. 
Remuneration Committee
The Remuneration Committee comprises the 
Chairman, the Non-Executive Director and, by 
invitation, the Group CEO and the Company 
Secretary. It is responsible for recommending to 
the Board the contract terms, remuneration and 
other benefits for Executive Directors, including 
the performance-related bonus scheme and 
participation in the Group’s long term share 
option schemes. 
The Board has not delegated a Nomination 
Committee; the whole Board is involved in the 
appointment of any new director. 
The Board does not currently undertake an 
evaluation of its own performance or that  
of its committees. 
Accountability
The Board meets at least four times each 
year and has adopted a formal schedule of 
matters specifically reserved for decision by 
it, thus ensuring that it exercises control over 
appropriate strategic, financial, operational and 
compliance issues. At these meetings the Board 
reviews trading performance, ensures adequate 
financing, sets and monitors strategy, examines 
investment and acquisition opportunities and 
discusses reports to shareholders. 
Internal controls
The Board has overall responsibility for the 
Group’s system of internal controls. However, 
such a system is designed to manage rather 
than eliminate the risk of failure to achieve 
business objectives, and can only provide 
reasonable and not absolute assurance against 
material misstatement. In order to discharge 
that responsibility in a manner which ensures 
compliance with laws and regulations and 
promotes effective and efficient operations, 
the Directors have established an organisation 
structure with clear operating procedures, lines 
of responsibility and delegated authority. There is 
an established framework of internal controls set 
out and approved by the executive management. 
The more important elements of this framework 
are as follows:
• Management structure 
The Board has overall responsibility for the 
Group and each Executive Director has been 
given responsibility for specific aspects of the 
Group’s affairs.
• Corporate accounting and procedures  
Responsibility levels are communicated 
throughout the Group as part of the corporate 
communication procedure. Accounting, 
delegation of authority and authorisation 
levels, segregation of duties and other 
control procedures, together with the 
general ethos of the Group are included in 
these communications, and standardised 
accounting policies are in place reflecting 
this policy.
• Quality and integrity of personnel 
The integrity and competence of personnel is 
ensured through high recruitment standards 
and subsequent training courses. Quality 
personnel are seen as an essential part of 
the control environment and the ethical 
standards expected are communicated 
through senior members of staff.
• Budgetary process  
Each year the Board approves the annual 
budget, which includes an assessment of 
key assumptions underlying it. Performance 
is monitored and relevant action taken 
throughout the year by monthly reporting to 
the Board of updated forecasts together with 
information on key risk areas.
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
18
Corporate Governance Report
For the year ended 31 December 2016
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Strategic Report Governance Financial Statements
• Internal monitoring 
The Audit Committee considers and 
determines relevant action in respect of any 
control issues raised by the Auditor. Given the 
size of the Group and the close day-to-day 
control exercised by the Executive Directors 
and senior management, no formal financial 
internal audit department is considered 
necessary. The Operations Director is 
responsible for maintaining registrations and 
quality related certifications and defining 
and agreeing the procedures, standards and 
practices to be followed in all non-financial 
aspects of the Group’s business.
• Risk management 
The Board formally reviews the risk register at 
least annually and the consideration of risks 
and in particular the identification of new risks 
are an agenda item at each Board meeting.
• Relationship with Company Auditor 
The Auditor has ready access to the chairman 
of the Audit Committee and the Audit 
Committee meets at least annually with the 
Auditor without any member of the executive 
being present.
Remuneration
The objective of the Group’s remuneration policy 
is to attract, motivate, and retain high quality 
individuals who will contribute significantly to 
shareholder value. The Remuneration Committee 
decides on the remuneration of the Directors 
and other senior management, which comprises 
a basic salary, benefits, bonus scheme, share 
options and longer term incentive plan. 
No Director is involved in deciding his or  
her own remuneration. 
Relations with shareholders 
The Group seeks to maintain good 
communications with shareholders. The 
Executive Directors make presentations to 
institutional shareholders covering the interim 
and full year results. The Group despatches 
the notice of Annual General Meetings (AGM), 
with an explanatory circular describing items 
of special business, at least 21 working days 
before the meeting. All shareholders have the 
opportunity formally or informally to ask questions 
at the Company’s AGM and the Chairman 
typically makes a statement on current trading 
conditions at that meeting. The Chairman of the 
Audit and Remuneration Committees attends 
the AGM and will answer questions that may be 
relevant to the remit of those committees. At each 
AGM the Chairman advises shareholders of the 
proxy voting details on each of the resolutions, 
which are dealt with on a show of hands. In 
addition, webinars are made following certain 
announcements as well as ad hoc meetings, 
giving shareholders and other interested parties 
the opportunity to interact with members of  
the Board. 
Auditor
A resolution authorising the Directors to set 
the remuneration of the Auditor will be put to 
shareholders at the forthcoming AGM. 
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Remuneration report
Service contracts
The Board’s policy is that service contracts of 
Executive Directors should provide for termination 
by the Group on one year’s notice. The service 
contracts of each of the current Executive 
Directors provide for such a period of notice. 
The independent Non-Executive Directors have 
letters of appointment providing fixed three-year 
service periods, which may be terminated by 
giving six months’ notice. 
Non-Executive  
Directors’ remuneration
The fees for the Chairman and independent Non-
Executive Director are determined by the Board. 
The Chairman and the Non-Executive Director 
are not involved in any discussions or decisions 
about their own remuneration. 
The Chairman and independent Non-Executive 
Director do not receive bonuses or pension 
contributions and are not entitled to participate 
in any of the Group’s share schemes. They 
are entitled to be reimbursed the reasonable 
expenses incurred by them in carrying out their 
duties as Directors of the Company. 
Executive Directors’ 
remuneration
The remuneration package of the Executive 
Directors includes the following elements:
Basic salary 
Salaries are normally reviewed annually taking 
into account inflation and salaries paid to 
directors of comparable companies. Pay reviews 
also take into account Group and personal 
performance. The Board as a whole decides the 
remuneration of the Chairman and the Non-
Executive Director. 
Performance related pay scheme
There are two performance related pay schemes 
for Executive Directors. The first is an annual 
bonus scheme which is based upon the 
achievement of certain profit and commercial 
targets for the Group, as appropriate. The 
Executive Directors’ bonus charged in the 2016 
financial year is £35,000 (2015: £nil). 
The second scheme is a long term incentive 
plan linked to growth in earnings per share 
over a three year period. At the discretion of the 
Remuneration committee, Executive Directors are 
either granted share options at the ruling mid-
market price at the time of the grant or a pure 
cash bonus fixed as a percentage of salary. The 
awards are subject to meeting challenging EPS 
growth targets. Annual awards are made under 
this scheme. Where options are awarded, the 
value of the award is calculated using a Black-
Scholes model (see note 23 for further details). 
The awards made in the period are included in 
the LTIP tables below. 
Directors’ remuneration 
Details of the remuneration of the Directors for the financial year are set out below:
Salary*
and fees
 £’000
Annual Bonus
 £’000
 Pension
payments**
 £’000
Benefits
 £’000
 2016
 £’000
2015 
£’000
Executive Directors 
J S Starr 99 9 29 – 137 124
R Howard 44 5 31 – 80 73
A D James 91 7 7 1 106 96
J P Pomeroy 87 7 11 – 105 95
A Milne 92 7 5 1 105 87
Non-Executive Directors 
M D Love 34 – – – 34 33
G R Fearnley 13 – – – 13 12
460 35 83 2 580 520
* Salary is calculated are deducting Salary sacrifice payments. 
** Includes salary sacrifice payments. 
Long Term incentive payments made in the period are not included in the above figures but are detailed below. 
LTIP award – % of salary arrangement
Maximum payout awarded in 
period 
£’000
Paid in the Year including 
Employer’s NI
£’000
Total value of salary based 
LTIP awards carried at  
31 December 2016*
£’000
Total value of all salary based 
LTIP awards carried at  
31 December 2015*
£’000
J S Starr 54 5 10 14
R Howard 31 – 5 5
85 5 15 19
* Awards accrued over the period that they relate to and the valuation takes into account the likelihood of performance conditions being met. 
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
20
Report to the Shareholders  
on Directors’ Remuneration
For the year ended 31 December 2016
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Strategic Report Governance Financial Statements
LTIP Award – share options
Number of options granted 
under LTIP scheme in year
Total number of options 
granted under LTIP scheme 
at 31 December 2016
Total number of options 
granted under LTIP scheme at  
31 December 2015 
A D James 94,471 160,830 66,359
J P Pomeroy 94,063 160,134 66,071
A Milne 94,471 157,659 63,188
283,005 478,623 195,618
The Options granted in the year were at a price of 78.5p and carry the same performance conditions as the LTIP cash bonus awards. No options were 
exercised in the year. In 2015, 73,975 options were exercised at a grant price of 73p. 
Directors’ interests
The interests of the Directors (including family interests) in the share capital of the Company at the year end are set out below:
Ordinary shares of 5 pence each
At 31 December 2016 At 31 December 2015
J S Starr 3,577,591 3,577,591
R Howard 3,300,000 3,300,000
A D James 112,744 112,744
M D Love 989,754 929,754
G R Fearnley 453,435 453,435
A Milne 59,109 59,109
J P Pomeroy 63,733 63,733
In addition, the following Directors had total share options including the options granted under the LTIP scheme above and options granted under the 
sharesave scheme:
Options over ordinary shares of 5 pence each
At 31 December 2016 At 31 December 2015
A D James 160,830 66,359
J P Pomeroy 164,761 66,071
A Milne 162,286 63,188
487,877 195,618
In 2015, Julie Pomeroy and Alex James exercised 37,263 and 36,712 options respectively at an exercise price of 73p. The mid-market share price at the 
date of exercise was 108.5p. Accordingly gains made by Julie Pomeroy and Alex James were £13,000 each. 
www.dillistonegroup.com 21
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The Directors present their report and financial 
statements for the year ended 31 December 
2016. 
Results and dividends
The consolidated statement of comprehensive 
income for the year is set out on page 25. 
An interim dividend of 1.375p per share was 
paid in June 2016. A final dividend of 2.8p 
per share will be paid, subject to shareholder 
approval, on 27 June 2016. 
Directors
The following Directors have held office since 
1 January 2016:
M D Love - Non-Executive Chairman 
J S Starr 
R Howard 
A D James 
J P Pomeroy
G R Fearnley - Non-Executive Director
A Milne 
The interests of the Directors (including family 
interests) in the share capital of the Company are 
listed on page 21. 
Rory Howard and Alistair Milne are proposed for 
re-election at the forthcoming AGM. Both have 
a service contract with a one year notice period. 
Mike Love has been a Non-Executive Director for 
over nine years and therefore will offer himself for 
re-election annually. 
Financial risk management
Details of the Group’s financial risk management 
are set out in the Strategic Report section. 
Directors’ and  
officers’ insurance
The Group maintains insurance cover for all 
Directors and officers of Group companies 
against liabilities which may be incurred by them 
while acting as Directors and officers. 
Future Developments
The Directors consider that the continued 
investment in product and market development 
will allow the business to grow organically in its 
core markets. The combination of organic growth 
along with strategic acquisitions will support the 
expected growth as outlined in the Chairman’s 
Statement and the Strategic Report. 
Research and  
Development Activities
The Group continues its development 
programme of software for the recruitment 
market including the research and development 
of new products and enhancement to existing 
products. The Directors consider the investment 
in research and development to be fundamental 
to the success of the business in the future. 
Post balance sheet events
There are no post balance sheet events to report. 
Overseas branch operations
The Group has a branch operating in Germany. 
Details of all subsidiaries and their locations are 
detailed in note 15. 
Annual General Meeting
The Company’s Annual General Meeting will 
be held at 50 Leman St, London, E1 8HQ 
on 7 June 2017 at 10:30 am. The Notice 
convening the Annual General Meeting and 
an explanation of the business to be put to the 
meeting is contained in the separate document 
to shareholders which accompanies this report. 
Auditor
Grant Thornton LLP resigned as Group and 
Company Auditor during the year and BDO LLP 
was appointed as Auditor for the year ended 31 
December 2016. A resolution proposing their 
reappointment as Auditor to the Group and 
Company will be put to the forthcoming Annual 
General Meeting. 
Directors’ responsibilities
The Directors are responsible for preparing the 
Directors’ Report and the financial statements in 
accordance with applicable law and regulations. 
Company law requires the Directors to prepare 
financial statements for each financial year. The 
Directors are also required to prepare financial 
statements in accordance with the rules of the 
London Stock Exchange for companies trading 
on the Alternative Investment Market. The 
Directors have elected under Company law to 
prepare the Group and Company’s financial 
statements in accordance with International 
Financial Reporting Standards as adopted by 
the European Union (IFRSs). Under company 
law the Directors must not approve the financial 
statements unless they are satisfied that they 
give a true and fair view of the state of affairs  
and profit or loss of the Group and Company  
for that period. 
In preparing the Group and Company financial 
statements, the Directors are required to:
• select suitable accounting policies and then 
apply them consistently;
• make judgements and accounting estimates 
that are reasonable and prudent;
• state whether they have been prepared in 
accordance with IFRSs adopted by the EU;
• prepare the financial statements on the going 
concern basis unless it is inappropriate to 
presume that the Group and the Company 
will continue in business.
The Directors are responsible for keeping 
adequate accounting records that are sufficient 
to show and explain the Company’s transactions 
and disclose with reasonable accuracy at any 
time the financial position of the Company 
and enable them to ensure that the financial 
statements comply with the Companies Act 
2006. They are also responsible for safeguarding 
the assets of the Company and hence for 
taking reasonable steps for the prevention and 
detection of fraud and other irregularities. 
Website publication
The directors are responsible for ensuring the 
annual report and the financial statements 
are made available on a website. Financial 
statements are published 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. 
The Directors confirm that so far as each 
Director is aware:
• there is no relevant audit information of which 
the Company’s Auditor is unaware; and
• the Directors have taken all steps that they 
ought to have taken as directors to make 
themselves aware of any relevant audit 
information and to establish that the Auditor 
is aware of that information.
On behalf of the Board
J P Pomeroy
Company Secretary
25 April 2017
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
22
Directors’ Report
For the year ended 31 December 2016
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Financial 
Statements
Independent Auditor’s Report to the 
members of Dillistone Group Plc 24
Consolidated Statement  
of Comprehensive Income 25
Consolidated Statement  
of Changes in Equity 26
Company Statement  
of Changes in Equity 27
Consolidated and Company Statements 
of Financial Position 28
Consolidated Cash Flow Statement 29
Company Cash Flow Statement 30
Notes to the Financial Statements 31
Directors and Advisers 57
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We have audited the financial statements of Dillistone Group Plc for the year ended 31 December 2016 which comprise the consolidated statement of 
comprehensive income, the consolidated statement of changes in equity, the company statement of changes in equity, the consolidated and company 
statements of financial position, the consolidated cash flow statement, the company cash flow statement and the related notes. The financial reporting 
framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the 
European Union and, as regards the parent company financial statements, as applied in accordance with the provisions of the Companies Act 2006. 
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has 
been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s report and for no other 
purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members 
as a body, for our audit work, for this report, or for the opinions we have formed. 
Respective responsibilities of directors and 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 and express an opinion on the financial statements in accordance with 
applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Financial Reporting Council’s 
(FRC’s) Ethical Standards for Auditors. 
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the FRC’s website at www.frc.org.uk/auditscopeukprivate. 
Opinion on financial statements
In our opinion: 
• the financial statements give a true and fair view of the state of the group’s and the parent company’s affairs as at 31 December 2016 and of the 
group’s profit for the year then ended;
• the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
• the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as applied in 
accordance with the provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and directors’ report for the financial year for which the financial statements are prepared is consistent with 
the financial statements; and
• the strategic report and directors’ report have been prepared in accordance with applicable legal requirements. 
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have 
not identified material misstatements in the strategic report or the directors’ report. 
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.
David Butcher (Senior Statutory Auditor)
For and on behalf of BDO LLP , statutory auditor
London 
25 April 2017
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127). 
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
24
Independent Auditor’s Report 
to the members of Dillistone Group Plc  
For the year ended 31 December 2016
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Strategic Report Governance Financial Statements Governance Financial Statements Strategic Report
Note
2016
 £’000 
2015
 £’000 
Revenue 3 9,963 9,437
Cost of sales (1,478) (1,313)
Gross profit 8,485 8,124
Administrative expenses (8,073) (7,016)
Operating profit 6 412 1,108
Adjusted operating profit before acquisition related and one–off items 2 1,463 1,424
Acquisition related and one–off items 5 (1,051) (316)
Operating profit 412 1,108
Financial income 8 3 5
Financial cost 8 (23) (41)
Profit before tax 392 1,072
Tax income 9 134 140
Profit for the year 526 1,212
Other comprehensive income 
Items that will be reclassified subsequently to profit and loss:
Currency translation differences 16 (27)
Total comprehensive income for the year 542 1,185
Earnings per share
Basic 10 2.68p 6.20p
Diluted 10 2.62p 6.00p
The notes on pages 31 to 56 are an integral part of these consolidated financial statements. 
www.dillistonegroup.com 25
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2016
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 Share 
 capital 
 £’000 
 Share 
 premium 
 £’000 
 Merger 
 reserve 
 £’000 
 Retained 
 earnings 
 £’000 
 Share 
 option 
 £’000 
 Foreign 
exchange 
 £’000 
 Total 
 £’000 
Balance at 31 December 2014 969 1,432 365 3,514 118 128 6,526 
Comprehensive income
Profit for the year ended 31 Dec 2015 – – – 1,212 – – 1,212
Other comprehensive income
Exchange differences on translation of 
overseas operations – – – – – (27) (27)
Total comprehensive income – – – 1,212 – (27) 1,185
Transactions with owners
Issue of share capital 14 199 – – – – 213
Share option charge – – – 75 (47) – 28 
Dividends paid – – – (793) – – (793) 
Total transactions with owners 14 199 – (718) (47) – (552)
Balance at 31 December 2015 983 1,631 365 4,008 71 101 7,159
Comprehensive income
Profit for the year ended 31 Dec 2016 – – – 526 – – 526
Other comprehensive income
Exchange differences on translation of 
overseas operations – – – – – 16 16
Total comprehensive income – – – 526 – 16 542
Transactions with owners
Share option charges – – – 2 14 – 16 
Dividends paid – – – (811) – – (811) 
Total transactions with owners – – – (809) 14 – (795)
Balance at 31 December 2016 983 1,631 365 3,725 85 117 6,906
The notes on pages 31 to 56 are an integral part of these consolidated financial statements. 
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
26
Consolidated Statement of Changes in Equity
For the year ended 31 December 2016
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Strategic Report Governance Financial Statements Governance Financial Statements Strategic Report
 Share 
 capital 
 £’000 
 Share 
 premium 
 £’000 
 Merger 
 reserve 
 £’000 
 Retained 
 earnings 
 £’000 
 Share 
 option 
 £’000 
 Total 
 £’000 
Balance at 31 December 2014 969 1,432 365 1,363 118 4,247
Comprehensive income
Total comprehensive income for the year ended  
31 December 2015 - – – 932 – 932 
Transactions with owners
Issue of share capital 14 199 – – – 213
Share option charge – – – 75 (47) 28 
Dividends paid – – – (793) – (793) 
Total transactions with owners 14 199 – (718) (47) (552)
Balance at 31 December 2015 983 1,631 365 1,577 71 4,627
Comprehensive income
Total comprehensive income for the year ended  
31 December 2016 – – – 1,057 – 1,057
Transactions with owners
Share option charge – – – 2 14 16 
Dividends paid – – – (811) – (811) 
Total transactions with owners – – – (809) 14 (795)
Balance at 31 December 2016 983 1,631 365 1,825 85 4,889
The notes on pages 31 to 56 are an integral part of these consolidated financial statements. 
www.dillistonegroup.com 27
Company Statement of Changes in Equity
For the year ended 31 December 2016
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Group Company
Note
2016
 £’000 
2015
 £’000 
2016
 £’000 
2015
 £’000 
ASSETS
Non-current assets
Goodwill 12 3,415 3,415 – –
Other intangible assets 13 5,263 6,163 – –
Property, plant and equipment 14 215 257 – –
Investments 15 – – 7,601 7,599
8,893 9,835 7,601 7,599
Current assets
Inventories 16 5 16 – –
Trade and other receivables 17 2,196 1,736 349 345
Cash and cash equivalents 19 1,537 1,595 43 59
3,738 3,347 392 404
Total assets 12,631 13,182 7,993 8,003
EQUITY AND LIABILITIES 
Equity attributable to owners of the parent
Share capital 21 983 983 983 983
Share premium 1,631 1,631 1,631 1,631
Merger reserve 365 365 365 365
Retained earnings 3,725 4,008 1,825 1,577
Share option reserve 23 85 71 85 71
Translation reserve 117 101 – –
Total equity 6,906 7,159 4,889 4,627
Liabilities
Non–current liabilities
Trade and other payables 18 15 428 15 428
Borrowings 20 – 158 – 158
Deferred tax liability 9 784 1,006 – –
Current liabilities
Trade and other payables 18 4,599 4,193 2,931 2,623
Borrowings 20 158 167 158 167
Current tax payable 169 71 – –
Total liabilities 5,725 6,023 3,104 3,376
Total liabilities and equity 12,631 13,182 7,993 8,003
The profit for the financial year for the parent company was £1,057,000 (2015: £932,000). 
The notes on pages 31 to 56 are an integral part of these consolidated financial statements. 
The financial statements were approved by the Board of Directors and authorised for issue on 25 April 2017. They were signed on its behalf by
J P Pomeroy
Director
Company Registration No. 4578125
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
28
Consolidated and Company Statements of 
Financial Position
As at 31 December 2016
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Strategic Report Governance Financial Statements Governance Financial Statements Strategic Report
2016
 £’000 
2016
 £’000 
2015
 £’000 
2015
 £’000 
Operating activities
Profit before tax 392 1,072
Adjustment for:
 Financial income (3) (5)
 Financial cost 23 41
 Depreciation and amortisation 2,069 1,240
 Share option expense 16 28
 Foreign exchange adjustments arising from operations 31 (16)
Operating cash flows before movement in working capital 2,528 2,360
(Increase)/decrease in receivables (487) 278
Decrease in inventories 11 25
Increase/(decrease) in payables 62 (307)
Taxation refunded/(paid) 24 (219)
Net cash generated from operating activities 2,138 2,137
Investing activities
Interest received 3 5
Financial cost (8) (13)
Purchases of property, plant and 
equipment (70) (84)
Investment in development costs (1,056) (961)
Contingent consideration paid (212) (666)
Net cash used in investing activities (1,343) (1,719)
Financing activities
Net proceeds from issue of share capital – 213
Bank loan repayments made (167) (162)
Dividends paid (811) (793)
Net cash used in financing activities (978) (742)
Net decrease in cash and cash equivalents (183) (324)
Cash and cash equivalents at 1,595 1,929
beginning of year
Effect of foreign exchange rate changes 125 (10)
Cash and cash equivalents at end of year 1,537 1,595
The notes on pages 31 to 56 are an integral part of these consolidated financial statements. 
www.dillistonegroup.com 29
Consolidated Cash Flow Statement
As at 31 December 2016
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2016
 £’000 
2016
 £’000 
2015
 £’000 
2015
 £’000 
Operating activities
Profit before tax 1,057 932
Adjustment for:
 Financial cost 23 41
 Share option expense 16 28
Operating cash flows before 1,096 1,001
movements in working capital
Increase in receivables (4) (14)
Increase in payables 90 106
Net cash generated from operating activities 1,182 1,093
Investing activities
Financial cost (8) (13)
Contingent consideration paid (212) (666)
Net cash used in investing activities (220) (679)
Financing activities
Net proceeds from issue of share capital – 213
Bank loan repayments made (167) (162)
Dividends paid (811) (793)
Net cash used in financing activities (978) (742)
Net decrease in cash and cash equivalents (16) (328)
Cash and cash equivalents at beginning of year 59 387
Cash and cash equivalents at end of year 43 59
The notes on pages 31 to 56 are an integral part of these consolidated financial statements. 
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
30
Company Cash Flow Statement
As at 31 December 2016
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Strategic Report Governance Financial Statements Governance Financial Statements Strategic Report
Dillistone Group Plc (the ‘Company’) is a company incorporated in England and Wales. The financial statements are presented in thousand Pounds 
Sterling. 
The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as the ‘Group’). The parent company financial 
statements present information about the Company as a separate entity and not about its Group. 
Both the Group financial statements and the Company financial statements have been prepared and approved by the Directors in accordance with 
International Financial Reporting Standards (’IFRS’) as adopted by the European Union (’EU’), IFRIC Interpretations and the Companies Act 2006 
applicable to companies reporting under IFRS. In publishing the Company financial statements here together with the Group financial statements, the 
Company has taken advantage of the exemption in s408 of the Companies Act 2006 not to present its individual income statement and related notes in 
these financial statements. 
1. Accounting policies
1.1 Basis of accounting
The consolidated financial statements have been prepared using the significant accounting policies and measurement bases summarised below: 
Significant estimates
In the application of the Group’s accounting policies the Directors are required to make estimates and assumptions about the carrying amounts of assets 
and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other 
factors that are considered to be relevant. Actual results may differ from these estimates. 
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the 
estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future 
periods. The key areas are summarised below:
Capitalisation of internal development expenditure
Management exercises judgement in establishing both the technical feasibility of completing an intangible asset which can be used internally or sold 
and the degree of certainty that a market exists for the asset, or its output, for the generation of future economic benefits. In addition, amortisation rates 
are based on estimates of the useful economic lives and residual values of the assets involved. The assessment of these useful economic lives is made 
by projecting the economic lifecycle of the asset which is subject to alteration as a result of product development and innovation. Amortisation rates are 
changed where economic lives are re-assessed and technically obsolete items written off where necessary. The carrying value of capitalised development 
is reviewed for impairment at each accounting period end. See Note 13. In addition management use a best estimate to determine the amount of 
directors’ costs that are capitalised. 
Impairment of goodwill and other intangible assets
There are a number of assumptions management have considered in performing impairment reviews of goodwill and intangible assets which include an 
estimate of the future cash flows expected to arise from the cash generating unit and a suitable discount rate in order to calculate the recoverable amount. 
See notes 12 and 13. 
Contingent consideration
Where contingent consideration is payable in cash and discounting would have a material effect, management uses an appropriate discount rate. As the 
contingent consideration is dependent upon future trading performance, an estimate of the present value of the likely consideration payable is made at 
each reporting date based on forecasts for that business. See note 24. 
Judgements in applying the Group’s accounting policies
In the process of applying the Group’s accounting policies, management make various judgements that can significantly affect the amounts recognised in 
the financial statements. The critical judgements are considered to be the following:
Customers’ practical acceptance of licence software
As detailed in note 1.4, perpetual licence fee revenues are recognised on practical acceptance of the software. The Group uses the ‘live’” date as the 
basis of determining the timing of customer practical acceptance, thereby reducing the judgement required to ascertain the timing of licence revenue 
recognition. 
www.dillistonegroup.com 31
Notes to the Financial Statements
For the year ended 31 December 2016
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1. Accounting policies (continued)
Valuation of assets and liabilities
Management has made a number of assumptions with regards to the models used to value assets and liabilities at the statement of financial position 
date. Valuation techniques commonly used by market practitioners are applied. In respect of the provision for bad and doubtful receivables and credit 
note provisions, management has made relevant judgements based on discussions with the account managers as regards the recoverability of trade 
receivables. See note 17. 
Valuation of separately identifiable intangible assets
As detailed in note 1.8, separately identifiable intangible assets are identified and amortised over a defined period. The Directors use acknowledged 
approaches e.g.: relief from royalty method, capital asset pricing model, excess earnings valuation method but these are reliant upon certain judgements 
and assumptions which they determine are reasonable by reference to companies in similar industries. 
Valuation of share-based payments
The estimation of share-based payment costs requires the selection of an appropriate valuation model and consideration as to the inputs necessary for the 
valuation model chosen. The Group has made estimates as to the volatility of its own shares, the probable life of options granted, leaver rates and the time 
of exercise of those options. The model used by the Group is a Black-Scholes valuation model. Further details are shown in note 23. 
The accounting policies set out below have, unless otherwise stated, been applied consistently by the Group to all periods presented in these financial 
statements. 
1.2 Going concern
The Group’s business activities and financial position, together with the factors likely to affect its future development, performance and position, are set out 
in the CEO’s Review and Financial Review on pages 8 to 14. In addition, note 25 to the financial statements includes the Company’s objectives, policies 
and processes for managing its capital; its financial risk management objectives; details of its financial instruments; and its exposures to credit risk and 
liquidity risk. The Group prepare budgets and cashflow forecasts to ensure that the Group can meet its liabilities as they fall due. 
The Group has considerable financial resources together with well established relationships with a number of customers and suppliers across different 
geographic areas. In addition a substantial proportion of its revenue is recurring. 
As a consequence, the Directors believe that the Company is well placed to manage its business risks successfully despite the current uncertain  
economic outlook. 
The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. 
Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements. 
1.3 Basis of consolidation
The Group financial statements consolidate those of the parent company and all of its subsidiaries as of 31 December 2016. The parent controls a 
subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its 
power over the subsidiary. All subsidiaries have a reporting date of 31 December. 
All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains and losses on transactions between 
Group companies. Where unrealised losses on intra-group asset sales are reversed on consolidation, the underlying asset is also tested for impairment 
from a group perspective. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with 
the accounting policies adopted by the Group. 
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the effective date of acquisition, 
or up to the effective date of disposal, as applicable. 
1.4 Revenue 
General
Revenue to be recognised is the fair value of the total amount receivable by the Group for supplies of licenses and services. VAT or similar local taxes and 
trade discounts are excluded. 
Licensing (excluding software as a service “SaaS”)
The Group licenses software under licence agreements. Perpetual licence fee revenues are recognised on practical acceptance of the software, when all 
obligations have been substantially completed. This is when the customer has accepted the product i.e. the “live” date, the risks and rewards of ownership 
have been transferred, it is probable that the economic benefits of the transaction will flow to the Group, all costs and revenue in relation to the transaction 
can reliably be measured and the Group has no further managerial involvement over the goods to the degree usually associated with ownership. To the 
extent that payments have been received in advance for licences, where practical acceptance has not yet been reached, these amounts are recognised as 
deferred income. 
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
32
Notes to the Financial Statements continued
For the year ended 31 December 2016
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1. Accounting policies (continued)
Professional services
The Group provides professional services which include installation, consulting, data translation and training. Such revenues are recognised as the 
services are completed or, where they are part of the sale and installation of software, they are typically recognised when the obligations under the contract 
are complete. To the extent that payments have been received in advance for such services these amounts are recognised as deferred income. 
Product support, hosting and SaaS
Revenues from support, hosting or SaaS agreements are recognised over the period to which they relate but only after practical acceptance of the 
software, as defined above, has been received. The contractual arrangements normally separate out and apportion a value to each deliverable and this 
value is an approximation of the fair value of the deliverable. Where revenue is invoiced in advance for such services, the amount in advance is included in 
deferred revenue and released over the period to which the service relates. 
Third party revenues
The Group sells, predominantly as principal, software developed by other organisations together with services that are bought in from third parties. Sales of 
third party software are recognised in the period in which the sale occurs. Services are recognised in the period in which they are provided. 
Tokens
The Group sells tokens to access certain services within the business. Tokens are normally bought in bundles and can be used over time. Tokens have a 
fixed expiry period after which the customer has no legally enforceable right to claim on the tokens, and hence all risks & rewards have been transferred 
and performance obligations have been fulfilled. Revenue is recognised on use or on expiry of the tokens. 
1.5 Share based payments
The Company operates a share based payment scheme. 
It is an equity settled share-based compensation plan (share options) for remuneration of its employees. 
All employee services received in exchange for the grant of any share-based compensation are measured at their fair values. These are determined by 
reference to the share option awarded. Their value is appraised at the grant date and excludes the impact of any non-market vesting conditions  
(e.g. profitability or sales growth targets). 
All equity-settled share-based compensation is ultimately recognised as an expense in the profit or loss with a corresponding credit to share based 
payment reserve, net of deferred tax where applicable. If vesting periods or other vesting conditions apply, the expense is allocated over the vesting period, 
based on the best available estimate of the number of shares options expected to vest. Non market vesting conditions are included in assumptions about 
the number of options that are expected to become exercisable. Estimates are subsequently revised if there is any indication that the number of share 
options expected to vest differs from previous estimates. No adjustment to expenses recognised in prior periods is made if fewer share options ultimately 
are exercised than originally estimated. 
Upon exercise of share options, the proceeds received, net of any directly attributable transaction costs, up to the nominal value of the shares issued are 
reallocated to share capital with any excess being recorded as additional share premium. 
1.6 Long term incentive plan (“LTIP”) – capped cash bonus
The LTIP awards can be share based or cash based. The cash awards are based on a capped cash bonus with performance conditions related to the 
growth in earnings per share of the Group. These awards automatically mature following the publication of the Annual Report of the Company, three years 
after the period to which the grant relates. The liability is accrued and recognised through the income statement. 
1.7 Long term incentive plan (“LTIP”) – share option based award
The LTIP awards can be share based or cash based. The number of share option granted under these awards are based on a percentage of salary with 
performance conditions related to the growth in earnings per share of the Group. These awards can be exercised between three and ten years after the 
date of the grant. The liability is accrued and recognised through the income statement. 
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1. Accounting policies (continued)
1.8 Business combinations
The Group applies the acquisition method in accounting for business combinations. The consideration transferred by the Group to obtain control of a 
subsidiary is calculated as the sum of the acquisition-date fair values of assets transferred, liabilities incurred and the equity interests issued by the Group, 
which includes the fair value of any asset or liability arising from a contingent consideration arrangement. Acquisition costs are expensed as incurred. 
The Group recognises identifiable assets acquired and liabilities assumed in a business combination regardless of whether they have been previously 
recognised in the acquiree’s financial statements prior to the acquisition. Assets acquired and liabilities assumed are generally measured at their 
acquisition-date fair values. Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum of:
a) fair value of consideration transferred, 
b) the recognised amount of any non-controlling interest in the acquiree and 
c) acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of identifiable net assets. If the fair 
values of identifiable net assets exceed the sum calculated above, the excess amount (i.e. gain on a bargain purchase) is recognised in profit or loss 
immediately. 
Where contingent consideration relates to the results spread over different accounting periods, the fair value of such consideration is recalculated at each 
year end and any adjustment is recognised in profit or loss immediately. 
1.9 Adjusted operating profit
Adjusted operating profit excludes acquisition costs and related intangible amortisation and movements in contingent consideration and other one–off 
costs which can include, as an example, the additional amortisation charge required in estimating the useful economic life of an intangible asset. 
1.10 Impairment testing of goodwill, other intangible assets and property, plant and equipment
For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash generating units). 
As a result, some assets are tested individually for impairment and some are tested at cash generating unit level. Goodwill is allocated to those  
cash generating units that are expected to benefit from synergies of the related business combination and represent the lowest level within the Group  
at which management monitors goodwill. Cash generating units to which goodwill has been allocated are tested for impairment at least annually. All  
other individual assets or cash generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying  
amount may not be recoverable. 
An impairment loss is recognised for the amount by which the asset’s or cash generating unit’s carrying amount exceeds its recoverable amount, which 
is the higher of fair value less costs to sell and value-in-use. To determine the value-in-use, management estimates expected future cash flows from each 
cash generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. The data used for impairment 
testing procedures are directly linked to the Group’s latest approved budget, adjusted as necessary to exclude the effects of future reorganisations and 
asset enhancements. Discount factors are determined individually for each cash generating unit and reflect management’s assessment of respective 
risk profiles, such as market and asset-specific risks factors. Impairment losses for cash generating units reduce first the carrying amount of any 
goodwill allocated to that cash generating unit. Any remaining impairment loss is charged pro–rata to the other assets in the cash generating unit. With 
the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognised may no longer exist. An 
impairment charge is reversed if the cash generating unit’s recoverable amount exceeds its carrying amount. 
1.11 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief  
operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as  
the Board of Directors. 
1.12 Intangible assets
Internal development costs
Costs incurred on product development relating to the design and development of new or enhanced products are capitalised as intangible assets when 
it is reasonably certain that the development will provide economic benefits, considering its commercial and technological feasibility and the resources 
available for the completion and marketing of the development, and where the costs can be measured reliably. The expenditures capitalised are the direct 
labour costs and subcontracted costs, which are managed and controlled centrally. Product development costs previously recognised as an expense are 
not recognised as an asset in a subsequent period. 
Capitalised product development expenditure for non-platform technology is amortised over its useful life of five years, with amortisation commencing in 
the month of costs being incurred. Maintenance costs are expensed. 
Capitalised product development expenditure for the Group’s FileFinder version 10, the Browser version of FileFinder and Infinity up to their launch are 
considered to be platform technology and had previously been amortised over their useful life of 10 years or to 30 June 2021, whichever is the shorter 
period. The Group has reviewed its amortisation policy for such capitalised development costs to bring it more into line with industry practice and reflect a 
revised useful economic life by amortising all such costs over five years. See note 13. 
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
34
Notes to the Financial Statements continued
For the year ended 31 December 2016
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1. Accounting policies (continued)
Capitalised product development expenditure is subject to regular impairment reviews and is stated at cost less any accumulated impairment losses. Any 
impairment taken during the year is shown under administrative expenses on the statement of comprehensive income. Development costs that do not 
meet the requirements for capitalisation are written off to profit and loss as incurred. In accordance with IAS 38, no research costs are capitalised to the 
balance sheet, but are expensed as incurred. 
Purchased Software
Software acquired externally is capitalised when it is expected to have ongoing use within the business. Capitalised expenditure includes both the 
purchase price and any costs directly associated with bringing the software into use. Amortisation is charged over the useful economic life of the software, 
typically 3 to 5 years, beginning when it is capable of being used by the business. 
Acquired as part of a business combination
In accordance with IFRS 3 Business Combinations, an intangible asset acquired in a business combination is deemed to have a cost to the Group of its 
fair value at the acquisition date. The fair value of the intangible asset reflects market expectations about the probability that the future economic benefits 
embodied in the asset will flow to the Group. Where an intangible asset might be separable, but only together with a related tangible or intangible asset, 
the Group of assets is recognised as a single asset separately from goodwill where the individual fair values of the assets in the Group are not reliably 
measurable. Where the individual fair values of the complementary assets are reliably measurable, the Group recognises them as a single asset provided 
the individual assets have similar useful lives. 
Subsequent to initial recognition, intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses. Amortisation is 
provided to write off the cost of each intangible asset over its useful economic life as follows:
Estimated life
Intangible assets:
Brand and IP 15 years
Developed technology 6–11.25 years
Contractual customer relationships 1.25 years
Non-contractual customer relationships 10–10.25 years
1.13 Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation on these assets is provided at rates estimated to write off the 
cost, less estimated residual value, of each asset over its expected useful life as follows:
Leasehold land and buildings the lower of 5 years or the remaining lease period
Office and computer equipment 3–5 years straight line
Fixtures, fittings and equipment 4 years straight line
1.14 Financial assets
The Group classifies its financial assets under the definitions provided in International Accounting Standard 39 (IAS 39) Financial Instruments: 
Recognition and measurement, depending on the purpose for which the financial assets were acquired. Management determines the classification of its 
financial assets at initial recognition. Management considers that the Group’s financial assets fall under the ‘loans and receivables’ category. 
Loans and receivables are non-derivative financial assets with fixed or determined payments that are not quoted in an active market. They are included  
in current assets, except for maturities greater than 12 months after the statement of financial position date, which are classified as non-current assets. 
The Group’s loans and receivables comprise trade receivables, intercompany trading balances (in relation to Company accounts), and cash and  
cash equivalents. 
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method, less any 
provision for impairment. Receivables are considered for impairment when they are past due or when other objective evidence is received that a specific 
counterparty may default. Receivables that are not considered to be individually impaired are reviewed for impairment in groups. The impairment loss 
estimate is then based on recent historical counterparty default rates and current economic conditions. 
Derecognition of financial assets occurs when the rights to receive cash flows from the investments expire or are transferred and substantially all of the 
risks and rewards of ownership have been transferred. An assessment for impairment is undertaken at least at each statement of financial position date 
whether or not there is objective evidence that a financial asset or a group of financial assets is impaired. 
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1. Accounting policies (continued)
1.15 Financial liabilities
The Group classifies its financial liabilities under the definitions provided in IAS 39, either as financial liabilities at fair value through profit or loss, or 
financial liabilities measured at amortised cost. Management considers that the Group’s financial liabilities fall under the ‘financial liabilities measured 
at amortised cost’ category other than contingent consideration which is measured at fair value and movements in fair value are recognised in the profit 
or loss. The Group’s ‘financial liabilities measured at amortised cost’ comprise trade payables, intercompany trading balances (in relation to Company 
accounts), bank loans and accruals. 
Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. 
1.16 Investments
Investments in subsidiary companies are included at cost in the accounts of the Company less any amount written off in respect of any impairment  
in value. 
1.17 Leases
Leases taken by the Group are assessed individually as to whether they are finance leases or operating leases. Leases are classified as finance  
leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as  
operating leases. 
Operating lease rental payments are recognised as an expense in the income statement on a straight-line basis over the lease term. The benefit of lease 
incentives is spread over the term of the lease. 
1.18 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost includes all directly attributable expenses. Costs of ordinarily interchangeable 
items are assigned using the first in, first out cost formula. Net realisable value is the estimated selling price in the ordinary course of business less any 
applicable selling expenses. 
1.19 Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of 
three months or less and which are subject to an insignificant risk of changes in value. 
1.20 Equity
Equity comprises the following:
• ‘Share capital’ represents the nominal value of equity shares.
• ‘Share premium’ represents the excess over nominal value of the fair value of consideration received for equity shares, net of expenses of the share 
issue.
• ‘Merger reserve’ is used where more than 90% of the shares in a subsidiary are acquired and the consideration includes the issue of new shares by the 
Company, thereby attracting merger relief under the Companies Act 2006.
• ‘Share option reserve’ represents equity-settled share-based employee and non-employee remuneration until such share options are exercised.
• ‘Retained earnings’ represents retained profits and losses.
• ‘Translation reserve’ represents translation differences arising on the consolidation of investments in overseas subsidiaries.
1.21 Foreign currency translation
The consolidated financial statements are presented in Sterling, which is also the functional currency of the parent company. 
Monetary assets and liabilities denominated in foreign currencies are translated into functional currency at the rates of exchange ruling at the statement 
of financial position date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to profit 
and loss. 
On consolidation, the assets and liabilities of the Group’s overseas subsidiaries are translated from their functional currency to Sterling at exchange rates 
prevailing on the statement of financial position date. Income and expenses have been translated from their functional currency into Sterling at the average 
rate for each month over the reporting period. Exchange differences are charged/credited to other comprehensive income and recognised in the currency 
translation reserve in equity. 
On disposal of a foreign entity, the deferred cumulative amount is recognised in equity relating to that particular foreign operation is recognised in the 
income statement. 
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
36
Notes to the Financial Statements continued
For the year ended 31 December 2016
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1. Accounting policies (continued)
1.22 Income taxes
Current income tax assets and liabilities comprise those obligations to fiscal authorities in the countries in which the Group carries out its operations. They 
are calculated according to the tax rates and tax laws applicable to the fiscal period and the country to which they relate. Tax expense recognised in profit 
or loss comprises the sum of deferred tax and current tax not recognised in other comprehensive income or directly in equity. 
Deferred income taxes are calculated using the liability method on temporary differences. This involves the comparison of the carrying amount of assets 
and liabilities in the consolidated financial statements with their respective tax bases. However, deferred tax is not provided on the initial recognition of 
goodwill, or on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit. 
Deferred tax on temporary differences associated with investments in subsidiaries is not provided if reversal of these temporary differences can be 
controlled by the Group and it is probable that reversal will not occur in the foreseeable future. 
Deferred tax liabilities are always provided for in full. Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be 
available against which the temporary differences can be utilised. Deferred tax assets and liabilities are calculated at tax rates that are expected to apply to 
their respective period of realisation, provided they are enacted or substantively enacted at the statement of financial position date. Tax expense recognised 
in profit or loss comprises the sum of deferred tax and current tax not recognised in other comprehensive income or directly in equity. 
1.23 Defined contribution pension scheme
The pension costs charged in profit or loss represent the contributions payable by the Group during the year. 
1.24 New accounting standards to update
No new standards, amendments or interpretations, effective for the first time for the financial year beginning on or after 1 January 2016 have had a 
material impact on the Group or Parent Company. 
The following standards have been issued by the IASB and have been adopted by the EU:
Standard Key requirements Effective date as adopted by the EU 
IFRS 9 Financial Instruments 1 January 2018
IFRS 15 Revenue from contracts with customers 1 January 2018
IFRS 15 is based on the principle that revenue is recognised when control of a good or service transfers to a customer, so the notion of control replaces 
the existing notion of risk and reward. Dillistone is currently reviewing the revenue in relation to its contracts with customers to determine which, if any, will 
be impacted by IFRS 15. It is not yet in a position to conclude whether the implementation will have a material impact on its revenues. The introduction of 
IFRS 15 is likely to result in some internal process changes across the Group. 
The Directors anticipate that the adoption of IFRS 9 in future periods will not have material impact on the financial statements of the Group or 
Parent Company. 
The following standards have been issued by the IASB and have not yet been adopted by the EU:
Standard Key requirements
IFRS 16 Leases
The adoption of IFRS 16 is likely to result in an increase in both assets and liabilities in the balance sheet, and an increase in operating profit and finance 
expenses in the income statement. 
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2. Reconciliation of adjusted operating profits to consolidated statement of comprehensive 
income
Note 
Adjusted
operating
profits
2016
 £’000 
Acquisition
related
items
2016*
 £’000 
2016
 £’000 
Adjusted
operating
profits
2015
 £’000 
Acquisition
related
items
2015*
 £’000 
2015
 £’000 
Revenue 9,963 – 9,963 9,437 – 9,437
Cost of sales (1,478) – (1,478) (1,313) – (1,313)
Gross profit 8,485 – 8,485 8,124 – 8,124
Administrative expenses (7,022) (1,051) (8,073) (6,700) (316) (7,016)
Operating profit 1,463 (1,051) 412 1,424 (316) 1,108
Financial income 3 – 3 5 – 5
Financial cost (8) (15) (23) (13) (28) (41)
Profit before tax 1,458 (1,066) 392 1,416 (344) 1,072
Tax income/(expense) (63) 197 134 3 137 140
Profit for the year 1,395 (869) 526 1,419 (207) 1,212
Other comprehensive income net of tax:
Currency translation differences 16 – 16 (27) – (27)
Total comprehensive income for the year net 
of tax 1,411 (869) 542 1,392 (207) 1,185
Earnings per share
Basic 10 7.10p 2.68p 7.26p 6.20p
Diluted 10 6.95p 2.62p 7.02p 6.00p
* See accounts note 5.
3. Segment reporting
The Board principally monitors the Group’s operations in terms of results of the two divisions, Dillistone Systems and Voyager Software. Segment results 
reflect management charges made or received. 
Divisional segments
For the year ended 31 December 2016
Dillistone
£’000
Voyager
£’000
Central
£’000
Total
£’000
Segment revenue 4,858 5,105 – 9,963
Segment EBITDA 1,434 1,093 (94) 2,433
Depreciation and amortisation expense (1,229) (461) – (1,690)
Segment result 205 632 (94) 743
Acquisition related amortisation – – (379) (379)
Acquisition related income – – 48 48
Operating profit/(loss) 205 632 (425) 412
Financial income 3 – – 3
Loan interest – – (8) (8)
Acquisition related interest expenses – – (15) (15)
Profit before tax 392
Income tax income 134
Profit after tax 526
Additions of non-current assets 600 527 – 1,127
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
38
Notes to the Financial Statements continued
For the year ended 31 December 2016
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3. Segment reporting (continued)
For the year ended 31 December 2015
Dillistone
£’000
Voyager
£’000
Inter-divisional 
revenue
£’000
Central
£’000
Total
£’000
Segment revenue 4,620 4,831 (14) – 9,437
Segment EBITDA 1,425 956 (96) 2,285
Depreciation and amortisation expense (534) (327) – (861)
Segment result 891 629 (96) 1,424
Acquisition related amortisation – – (379) (379)
Acquisition related income – – 63 63
Operating profit/(loss) 891 629 (412) 1,108
Financial income 4 1 – 5
Loan interest – – (13) (13)
Acquisition related interest expenses – – (28) (28)
Profit before tax 1,072
Income tax income 140
Profit after tax 1,212
Additions of non-current assets 556 489 – 1,045
Products and services
The following table provides an analysis of the Group’s revenue by products and services:
Revenue
2016
 £’000 
2015
 £’000 
Recurring income 7,027 6,606
Non-recurring income 2,370 2,333
Third party revenues 566 498
9,963 9,437
Recurring income includes all support services, SaaS and hosting income. Non-recurring income includes sales of new licenses, and income derived from 
installing those licenses including training, installation, and data translation. Third party revenues arise from the sale of third party software. 
It is not possible to allocate assets and additions between recurring, non-recurring income and third party revenue. 
No customer represented more than 10% of revenue of the Group. 
4. Geographical analysis
The following table provides an analysis of the Group’s revenue by geographic market. 
The Board does not review the business from a geographical performance viewpoint and this analysis is provided for information only. 
Revenue
2016
 £’000 
2015
 £’000 
UK 7,142 6,778
Europe 1,047 864
US 1,388 1,381
Australia 386 414
9,963 9,437
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4. Geographical analysis (continued)
Non-current assets by geographical location
2016
 £’000 
2015
 £’000 
UK 8,886 9,829
US 6 4
Australia 1 2
8,893 9,835
5. Acquisition related and other one–off items
2016
 £’000 
2015
 £’000 
Included within administrative expenses:
 Estimated change in fair value of contingent consideration (note 24) (48) (63)
 Amortisation of acquisition intangibles 379 379
 Additional amortisation on change of estimated useful life of platform technology (note 13) 720 –
1,051 316
Included within finance cost:
 Unwinding of discount on contingent consideration (note 8) 15 28
1,066 344
6. Operating profit
2016
 £’000 
2015
 £’000 
Operating profit is stated after charging:
 Depreciation 113 126
 Amortisation 1,956 1,115
 Realised net (gain)/loss on foreign exchange transactions (10) 5
 Operating lease rentals – land and buildings 288 293
 Money purchase pension contributions 301 265
Fees receivable by the Group auditors:
 Audit of financial statements 18 43
Other services:
 Audit of accounts of subsidiary of the Company 56 50
 Taxation compliance services 18 30
 All other services – 25
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
40
Notes to the Financial Statements continued
For the year ended 31 December 2016
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7. Employees
The average number of employees was:
2016 2015 
Operations 112 111
Management 13 9
Employee numbers 125 120
Their aggregate remuneration including Directors’ remuneration comprised:
2016
 £’000 
2015
 £’000 
Wages and salaries 5,004 4,656
Social security costs 527 496
Pension costs 301 265
Share based payments 16 15
LTIP share based – 44
LTIP non share based (1) 15
5,847 5,491
The aggregate remuneration includes salary cost totalling £1,045,000 (2015: £924,000) that have been capitalised in intangible assets. 
Key management of the Group are the Directors and the divisional directors of Dillistone Systems and Voyager Software. Remuneration of key 
management was as follows:
2016
 £’000 
2015
 £’000 
Wages and salaries 898 681
Social security costs 101 88
Pension costs 108 89
Share based payments charged 2 1
LTIP share based – 44
LTIP non share based (1) 15
1,108 918
The Company’s only employees are the Directors. Details of Directors’ emoluments, share options and pension entitlements are given in the Report to the 
Shareholders on Directors’ Remuneration on pages 20 and 21. 
8. Financial income and cost
2016
 £’000 
2015
 £’000 
Interest receivable 3 5
Finance cost on bank loan (8) (13)
Unwinding of discount on contingent consideration (15) (28)
(20) (36)
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9. Tax (income)/expense 
2016
 £’000 
2015
 £’000 
Current tax 178 191
Prior year adjustment – current tax (91) (185)
Deferred tax (100) 22
Prior year adjustment – deferred tax (50) (31)
Deferred tax re acquisition intangibles (68) (68)
Prior year adjustment – deferred tax re acquisition intangibles (3) (69)
Tax (income)/expense for the year (134) (140)
Factors affecting the tax charge for the year
Profit before tax 392 1,072
UK rate of taxation 20% 20.25%
Profit before tax multiplied by the UK rate of taxation 78 217
Effects of:
 Overseas tax rates 31 46
 Impact of deferred tax not provided 13 (7)
 Enhanced R&D relief (169) (131)
 Disallowed expenses 31 14
 Rate differences re current tax and deferred tax 26 6
 Prior year adjustments (144) (285)
Tax (income)/expense (134) (140)
Deferred tax provided in the financial statements is as follows:
Group Company
2016
 £’000 
Movement
 £’000 
2015
 £’000 
2016
 £’000 
2015
 £’000 
Internally generated intangible and fixed assets 315 (152) 467 – –
Provisions (9) 1 (10) – –
Acquisition intangibles 478 (71) 549 – –
784 (222) 1,006 – –
Group Company
2015
 £’000 
Movement
 £’000 
2014
 £’000 
2015
 £’000 
2014
 £’000 
Internally generated intangible and fixed assets 467 (6) 473 – –
Provisions (10) 3 (7) – –
Acquisition intangibles 549 (137) 686 – –
1,006 (146) 1,152 – –
The UK corporation tax rate throughout the year was 20%. Deferred tax is provided in relation to the UK at rates of between 17% to 19% depending on 
when reversals are expected to occur. The tax credit is impacted by the higher rates of corporation tax payable in the US and Australia offset by the R&D 
tax credits available to both Dillistone Systems division and Voyager Software division and the reduction in the long term rate of corporation tax to 17% 
which has been used in the calculation of deferred tax. The release of prior year provisions relate in part to the agreement of the prior years’ tax positions 
of UK companies and the utilisation of tax losses not previously recognised. The Group has gross tax losses and temporary timing differences of £369,000 
(2015: £492,000) for which no deferred tax asset has been recognised as the timing of their utilisation is uncertain. 
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
42
Notes to the Financial Statements continued
For the year ended 31 December 2016
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10. Earnings per share
2016
 Using adjusted 
operating 
profit 2016 
2015
 Using adjusted 
operating
profit 2015 
Profit attributable to ordinary shareholders £1,395,000 £526,0000 £1,419,000 £1,212,000
Weighted average number of shares 19,668,021 19,668,021 19,547,754 19,547,754
Basic earnings per share 7.10 pence 2.68 pence 7.26 pence 6.20 pence
Weighted average number of shares after dilution 20,082,096 20,082,096 20,209,339 20,209,339
Fully diluted earnings per share 6.95 pence 2.62 pence 7.02 pence 6.00 pence
Reconciliation of basic to diluted average number of shares 2016 2015
Weighted average number of shares (basic) 19,668,021 19,547,754
Effect of dilutive potential ordinary shares – employee share plans 414,075 661,585
Weighted average number of shares after dilution 20,082,096 20,209,339
There are 638,257 (2015: 353,257) share options not included in the above calculations
11. Profit for the financial year
As permitted by section 408 of the Companies Act 2006, the parent company’s profit and loss account has not been included in these financial 
statements. The profit for the financial year for the parent company was £1,057,000 (2015: £932,000) and has been approved by the Directors. This is 
stated after charging:
2016
 £’000 
2015
 £’000 
Fees paid to the company’s auditors
Audit of financial statements 18 43
Other services relating to taxation 3 5
Other services – 20
12. Goodwill
Group
Goodwill
 £’000 
Cost
At 1 January 2015 3,415
Additions –
At 31 December 2015 3,415
Additions –
At 31 December 2016 3,415
Carrying amount
At 31 December 2016 3,415
At 31 December 2015 3,415
At the year end date an impairment test has been undertaken by comparing the carrying values of goodwill with the recoverable amount of the cash 
generating unit (CGU) to which the goodwill has been allocated. The recoverable amount of the cash generating unit is based on value-in-use calculations. 
These calculations use cash flow projections covering a three year period based on financial budgets and a calculation of the terminal value, for the period 
following these formal projections. 
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12. Goodwill (continued)
The key assumptions used for value-in-use calculations are those regarding growth rates, increases in costs and discount rates. The discount rate is 
reviewed annually to take into account the current market assessment of the time value of money and the risks specific to the cash generating units and 
rates used by comparable companies. The pre-tax discount rate used to calculate value-in-use is in a range of 12% to 19.4% (2015: 12% to 19.4%). 
Growth rates for forecasts take into account historic experience and current market trends. Costs are reviewed and increased for inflation and other cost 
pressures. The long term growth rate used for the terminal value calculation was 1.75% (2015: 2%) for all CGUs. The allocation of goodwill across the 
CGUs is as follows:
Opening
£’000
Addition
£’000
Impairment
£’000
Closing
£’000
Dillistone Division 494 – – 494
Voyager and FCP consolidated 2,251 – – 2,251
ISV 670 – – 670
3,415 – – 3,415
Sensitivities
To reduce the headroom in the impairment calculation of goodwill to £nil for the Voyager and FCP consolidated and also for ISV would require a reduction 
of terminal growth rate to 0% and an increase in the discount rate to over 50%. Alternatively, cash flows would need to fall by over 60%. Cashflows in 
respect of Dillistone goodwill would need to reduce by over 95% to reduce the headroom to £nil. 
13. Other intangible assets
Group
Development 
costs
£’000
Purchased 
software
£’000
Acquisition 
intangibles
£’000
Total
£’000
Cost
At 1 January 2015 4,629 – 4,172 8,801
Additions 936 25 – 961
At 31 December 2015 5,565 25 4,172 9,762
Additions 1,047 9 – 1,056
At 31 December 2016 6,612 34 4,172 10,818
Amortisation
At 1 January 2015 1,742 – 742 2,484
Charge for the year 736 – 379 1,115
At 31 December 2015 2,478 – 1,121 3,599
Charge for the year 1,576 1 379 1,956
At 31 December 2016 4,054 1 1,500 5,555
Carrying amount
At 31 December 2016 2,558 33 2,672 5,263
At 31 December 2015 3,087 25 3,051 6,163
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
44
Notes to the Financial Statements continued
For the year ended 31 December 2016
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13. Other intangible assets (continued)
Acquisition intangibles can be summarised as follows
Brand
£’000
Developed 
technology
£’000
Brand 
and IP
£’000
Contractual 
and non-
contractual 
relationship
£’000
Total
£’000
NBV
At 1 January 2016 139 282 563 2,067 3,051
Amortisation (13) (53) (41) (272) (379)
At 31 December 2016 126 229 522 1,795 2,672
Following the change in the estimate of the useful economic life of platform technology detailed in note 1, the amortisation charge for the year includes a 
one–off increase of £720,000. In accordance with IAS 8 the charge has not been applied retrospectively as it relates to a change in estimate. 
Intangible assets under development are reviewed each reporting period for impairment prior to amortisation. Forecasts of future revenue are prepared 
and these are discounted and compared to the carrying value. Sensitivities are carried out including applying differing growth and attrition rates as well as 
alternative discounts rates. 
Purchased software is reviewed for impairment based on its continued use within the business. 
The Company has no intangible assets. 
14. Property, plant and equipment
Group
Land and 
buildings
£’000
Office and 
computer 
equipment
£’000
Fixtures 
and fittings
£’000
Motor 
vehicles
£’000
Total
£’000
Cost
At 1 January 2015 185 675 150 2 1,012
Currency impact – 1 1 – 2
Additions 1 82 1 – 84
Disposals – – – (2) (2)
At 31 December 2015 186 758 152 – 1,096
Currency impact – 16 3 – 19
Additions – 57 13 – 70
Disposals – (1) – – (1)
At 31 December 2016 186 830 168 – 1,184
Depreciation
At 1 January 2015 6 569 137 1 713
Currency impact – 1 1 – 2
Charge for the year 38 82 5 1 126
Eliminated on disposal – – – (2) (2)
At 31 December 2015 44 652 143 – 839
Currency impact – 15 3 – 18
Charge for year 38 71 4 – 113
Eliminated on disposal – (1) – – (1)
At 31 December 2016 82 737 150 – 969
Carrying amount
At 31 December 2016 104 93 18 – 215
At 31 December 2015 142 106 9 – 257
The Company has no property, plant and equipment. 
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15. Non-current asset investments
Company
Cost
Investments 
in subsidiaries 
£’000
At 1 January 2015 7,599
Additions –
At 31 December 2015 7,599
Additions 2
At 31 December 2016 7,601
The addition in the year related to the transfer of FCP internet Limited from FCP Internet Holdings Limited to Dillistone Group Plc.
The Company has the following subsidiary undertakings:
Name Principal activity
Holding of 
ordinary shares Registered
Dillistone Systems Limited Sale of computer software and 
related support services
100% England & Wales
Dillistone Systems (Australia) Pty Limited Sale of computer software and 
related support services
100% 
(indirect)
Australia
Dillistone Systems (US) Inc Sale of computer software and 
related support services
100% USA
FCP Internet Limited Provision of software services and 
related consultancy services
100% England & Wales
FCP Internet Holdings Limited Dormant holding company 100% England & Wales
ISV Software Limited Provision of software services and  
related consultancy services
100% England & Wales
Woodcote Software Limited Dormant company 100% England & Wales
Voyager Software Limited Sale of computer software and 
related support services
100% England & Wales
Voyager Software (Australia) Pty Limited Sale of computer software and 
related support services
100%
(indirect)
Australia
The registered addresses of related undertakings are as follows: 
Company Registered Address
Dillistone Group Plc 50 Leman St, London E1 8HQ
Dillistone Systems Limited 50 Leman St, London E1 8HQ
Dillistone Systems (Australia) Pty Limited 56 Berry Street, North Sydney NSW, 2060, Australia
Dillistone Systems (US) Inc 50 Harrison Street, Suite 201A, Hoboken, NJ 07030, USA
FCP Internet Limited 50 Leman St, London E1 8HQ
FCP InternetHoldings Limited 50 Leman St, London E1 8HQ
ISV Software Limited 50 Leman St, London E1 8HQ
Woodcote Software Limited 50 Leman St, London E1 8HQ
Voyager Software Limited 12 Cedarwood, Crockford Lane, Chineham Business Park, Basingstoke, RG24 8WD
Voyager Software (Australia) Pty Limited 56 Berry Street, North Sydney NSW, 2060, Australia
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
46
Notes to the Financial Statements continued
For the year ended 31 December 2016
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16. Inventories
Group Company
2016
 £’000 
2015
 £’000 
2016
 £’000 
2015
 £’000 
Licences for resale 5 16 –  – 
17. Trade and other receivables
Group Company
2016
 £’000 
2015
 £’000 
2016
 £’000 
2015
 £’000 
Trade receivables – net 1,787 1,512 – –
Group receivables – – 329 333
Other current assets 37 37 – –
Prepayments and accrued income 372 187 20 13
2,196 1,736 349 345
The carrying value of trade receivables is considered a reasonable approximation of fair value. All of the receivables have been reviewed for indicators of 
impairment. The movement in the provision for bad debt is shown below:
2016
 £’000 
2015
 £’000 
At start of year 88 63
Movement in the year 9 25
At the year end 97 88
The ageing profile of trade receivables as at the year end is as follows: 
2016
 £’000 
2015
 £’000 
Current
Past due date: 1,491 1,284
 31–60 days overdue 121 82
 More than 60 days overdue 175 146
Total 1,787 1,512
The bad debt provision is in respect of debt more than over 60 days overdue. 
The Company has no bad debt provision against intercompany receivables. 
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18. Trade and other payables
Group Company
2016
 £’000 
2015
 £’000 
2016
 £’000 
2015
 £’000 
Current liabilities
Trade payables 685 665 56 64
Group payables – – 2,376 2,231
Deferred income 2,850 2,670 – –
Accruals 689 651 124 121
Contingent consideration 375 207 375 207
4,599 4,193 2,931 2,623
Non-current liabilities
Contingent consideration – 413 – 413
Cash settled LTIP 15 15 15 15
15 428 15 428
Contingent consideration is valued at fair value. The total amounts included are as follows:
Group Company
2016
 £’000 
2015
 £’000 
2016
 £’000 
2015
 £’000 
In current liabilities 375 207 375 207
In non-current liabilities – 413 – 413
375 620 375 620
Further details of the contingent consideration are given in note 24. 
19. Cash and cash equivalents
Group Company
2016
 £’000 
2015
 £’000 
2016
 £’000 
2015
 £’000 
Cash balances available on demand 1,537 1,595 43 59
20. Borrowings
Borrowings at amortised cost
Group Company
2016
 £’000 
2015
 £’000 
2016
 £’000 
2015
 £’000 
Current bank borrowings 158 167 158 167
Non current bank borrowings – 158 – 158
Total bank borrowings 158 325 158 325
The Directors consider that the fair value of borrowings approximates to the carrying value. 
The borrowings consist of a bank loan repayable over 3 years from HSBC Bank plc secured by a fixed and floating charge over the assets of the Group and 
is supported by a cross guarantee between the Company and the Group’s principal subsidiaries. The loan was to provide part funding for the acquisition of 
ISV. The loan carries interest at 2.75% over UK base rate. 
The loan includes an option for early repayment at any time during the 3 year period. An early repayment fee of 1% of the amount prepaid must be 
made if the option is exercised. Management have reviewed the term of the prepayment option and deemed it to be closely related to the underlying debt 
instrument and hence it has not been separated from the host instrument. 
The carrying amount of the bank borrowings is considered to be a reasonable approximation of the fair value of the debt. 
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
48
Notes to the Financial Statements continued
For the year ended 31 December 2016
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21. Share capital
2016
 £’000 
2015
 £’000 
Allotted, called up and fully paid
Ordinary shares of 5 pence each 983 983
No share options were exercised in the period (2015: 280,475). 
Shares issued and fully paid 
2016 2015
Beginning of the year 19,668,021 19,387,546
Shares issued on exercise of options – 280,475
Shares issued and fully paid 19,668,021 19,668,021
22. Operating lease arrangements
The Group leases offices under non-cancellable operating lease agreements. 
At 31 December 2016, the Group had future total commitments under non-cancellable operating leases as follows:
2016
 £’000 
2015
 £’000 
Commitments payable: 559 731
 Within one year 262 233
 Between two and five years 296 498
23. Share options
Share based payments
There are three share option schemes in operation: an Enterprise Management Incentive Scheme (the ‘EMI Scheme’) which complies with the 
requirements of HMRC, a scheme which has not been approved by HMRC (the ‘Unapproved Scheme’) and a Share Save Scheme (“SAYE Scheme”). The 
terms and conditions of the EMI and Unapproved schemes are the same. If the options remain unexercised after a period of 10 years from the date of 
grant, the options expire. Options are normally forfeited if the employee leaves the Company before the options become available to exercise, which would 
normally be three years after grant. Performance conditions are associated with the options granted on 14 July 2015 and 29 June 2016. The company 
launched its first SAYE scheme in 2016. Under this scheme discounts of up to 20% can be offered. The scheme has a linked savings contract of 3 years. 
There were two grants of options in 2016. The weighted average share price of all grants in 2016 was 78.34p. The fair values of the services received in 
exchange for share based payments were calculated using a Black-Scholes pricing model. The inputs into the model were as follows:
Date of grant
Number 
granted
Share 
price on 
issue date
Exercise 
price
Expected 
volatility
Vesting 
period
Leaver rate 
over vesting 
period
Risk-free 
rate
Expected 
dividend 
yield
29 June 2016 441,500 78.50p 78.50p 30% 3.3 years 0% 1.00% 5.0%
14 Oct 2016 127,094 86.50p 77.80p 30% 3.3 years 10% 1.00% 5.0%
Expected volatility takes into account historic volatility of the share price and its current trend. 
There were two grants of options in 2015. The weighted average share price of all grants in 2015 was 105.61p. The fair values of the services received in 
exchange for share based payments were calculated using a Black-Scholes pricing model. The inputs into the model were as follows:
Date of grant
Number 
granted
Share 
price on 
issue date
Exercise 
price
Expected 
volatility
Vesting 
period
Leaver rate 
over vesting 
period
Risk-free 
rate
Expected 
dividend 
yield
3 Feb 2015 58,500 90.50p 90.50p 30% 3.3 years 10% 1.00% 4.0%
14 July 2015 306,257 108.50p 108.50p 30% 3.3 years 0% 1.00% 4.0%
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23. Share options (continued)
Details of the number of share options and the weighted average exercise price (WAEP) outstanding during the year are as follows:
2016 2015
No of 
options* WAEP*
No of 
options* WAEP*
Outstanding at beginning of year 832,496 93.86 930,561 80.41
Granted during year 568,594 78.34 364,757 105.61
Exercised during year – – (280,475) 75.95
Forfeited during year (36,739) 28.69 (182,347) 76.33
Outstanding at the end of the year 1,364,351 89.15 832,496 93.86
Exercisable at the year end 204,500 81.11 197,239 67.49
* Adjusted for the 2 for 1 bonus issue where appropriate
The Company’s mid-market share price on 31 December 2016 was 96.0p. The average mid- market share price in 2016 was 83.82p
The fair value of all options granted is shown as an employee expense with a corresponding increase in equity. The employee expense is recognised 
equally over the time from grant until vesting of the option. The expense charged takes into account the likelihood of performance targets being met. The 
employee expense for the year was £16,000 (2015: £28,000). 
Share options remaining in the schemes are as follows:
Scheme type
Date of 
grant
Exercise 
from
Lapse 
date
Options 
remaining
Exercise 
price (p)
EMI 14/09/2007 14/09/2010 13/09/2017 27,000 99.17 
Unapproved 14/01/2011 14/01/2014 13/01/2021 30,000 58.33 
EMI 21/09/2011 21/09/2014 20/09/2021 94,500 77.00 
Unapproved 21/09/2011 21/09/2014 20/09/2021 16,000 77.00 
EMI 08/07/2013 08/07/2016 07/07/2023 17,000 79.50
EMI 25/11/2013 25/11/2016 24/11/2023 20,000 115.00
Unapproved 08/12/2014 08/12/2017 07/12/2024 10,000 97.00
EMI 08/12/2014 08/12/2017 07/12/2024 216,500 97.00
EMI 03/02/2015 03/02/2018 02/02/2025 58,500 90.50
EMI 14/07/2015 14/07/2018 13/07/2025 306,257 108.5
EMI 29/06/2016 29/06/2019 28/06/2026 441,500 78.50
Sharesave 14/10/2016 1/11/2019 30/04/2020 127,094 77.80
1,364,351
The weighted average remaining contractual life of options at 31 December 2016 was 7.6 years (2015: 8.0 years). 
LTIP
LTIP awards under the long term incentive plan take the form of a cash bonus of up to one-third annual salary or the grant of share options, with 
appropriate performance conditions in place. 
In 2016, there is no charge in respect of the LTIP schemes which are share based and require separate disclosure under IFRS 2. 
24. Contingent consideration payable in respect of acquisitions
In September 2014 the Group acquired the entire share capital of ISV. As part of the acquisition, the vendors are entitled to contingent consideration 
based on revenue over the period to 30 September 2017. A payment of £212,000 was made in 2016. In the 2016 financial statements, the amount 
payable under the contingent consideration was decreased by £48,000 and this has been credited to the profit and loss. This contingent consideration has 
been discounted at 3.48% and the discount charged to profit and loss in 2016 totalled £15,000 (2015: £28,000). 
At the year end the Group had a liability for contingent consideration made up as follows:
• 30% of net revenues in the year to 31 December 2016 less £15,000 (calculated at £220,000 undiscounted)
• 30% of net revenues in the nine month period to 30 September 2017 less £25,000 (estimated at £161,000 undiscounted). A 10% increase in profits 
would result in an increased liability of £19,000 undiscounted. 
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
50
Notes to the Financial Statements continued
For the year ended 31 December 2016
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25. Financial instruments
The Group uses various financial instruments; these include cash, bank deposits, bank loans and various items such as trade receivables and trade 
payables that arise directly from its operations. The main purpose of these financial instruments is to provide finance for the Group’s operations. 
The Group’s finance department maintains liquidity, manages relations with the Group’s bankers, identifies and manages foreign exchange risk and 
controls Group treasury operations. Treasury dealings such as investments and foreign exchange are conducted only to support underlying business 
transactions. Consequently, the Group does not undertake speculative foreign exchange dealings for which there is no underlying exposure. 
The Group’s policies for management of the financial risks to which it is exposed are outlined below. 
(i) Interest rate risk
The Group is exposed to interest rate risk on its floating rate borrowings and its financial assets. The interest rate profile of the Group’s financial assets 
at 31 December 2016 was: 
At 31 December 2016
Group Company
Non interest 
bearing 
financial 
assets 
£’000
Floating 
rate 
financial 
assets
£’000
Non interest 
bearing 
financial 
assets
£’000
Floating 
rate 
financial 
assets
£’000
Trade and other receivables (current assets) 1,824 – 329 –
Cash and cash equivalents – 1,537 – 42
Total 1,824 1,537 329 42
The interest rate profile of the Group’s financial assets at 31 December 2015 was: 
At 31 December 2015
Group Company
Non interest 
bearing 
financial 
assets 
£’000
Floating 
rate 
financial 
assets
£’000
Non interest 
bearing 
financial 
assets
£’000
Floating 
rate 
financial 
assets
£’000
Trade and other receivables (current assets) 1,549 – 333 –
Cash and cash equivalents – 1,595 – 59
Total 1,549 1,595 333 59
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25. Financial instruments (continued)
The table below shows the Group’s financial liabilities split by those bearing interest at floating rates and those that are non interest bearing. 
At 31 December 2016
Group Company
Non interest 
bearing 
financial 
assets 
£’000
Floating 
rate 
financial 
assets
£’000
Non interest 
bearing 
financial 
assets
£’000
Floating 
rate 
financial 
assets
£’000
Trade and other payables (current liabilities) 4,224 – 2,556 –
Trade and other payables (non-current liabilities) 15 – 15 –
Bank borrowings – 158 – 158
Contingent consideration (current liabilities) 375 – 375 –
4,614 158 2,944 158
At 31 December 2015
Group Company
Non interest 
bearing 
financial 
assets 
£’000
Floating 
rate 
financial 
assets
£’000
Non interest 
bearing 
financial 
assets
£’000
Floating 
rate 
financial 
assets
£’000
Trade and other payables (current liabilities) 3,986 – 2,416 –
Trade and other payables (non-current liabilities) 15 – 15 –
Bank borrowings – 325 – 325
Contingent consideration (current liabilities) 207 – 207 –
Contingent consideration (non-current liabilities) 413 – 413 –
4,621 325 3,051 325
The bench marks for interest rates on floating rate financial assets and financial liabilities are bank base rates for the currencies in which the assets 
are held. Sensitivities of movements in interest rates have been considered by Directors and reasonably possible movements in interest rates are not 
considered to have a material impact on future Group profits or equity. 
(ii) Credit risk
The Group’s principal financial assets are cash and cash equivalents and trade and other receivables. 
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises 
principally from the Group’s receivables from customers and monies on deposit with financial institutions. 
Historically, the cash collection profile has been very good. Debt aging and collections are monitored on a regular basis and for new customers deposits 
are usually required. Some of the unimpaired trade receivables are past due as at the reporting date. Information on financial assets past due but not 
impaired are included in note 17. 
The credit risk on liquid funds is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies. 
The Group has no significant concentration of credit risk. 
The Group’s maximum exposure to credit risk at the reporting date is represented by the carrying value of financial assets, as follows:
Group Company
2016
 £’000 
2015
 £’000 
2016
 £’000 
2015
 £’000 
Trade and other receivables (current assets) 1,824 1,549 329 333
Cash and cash equivalents 1,537 1,595 42 59
Total 3,361 3,144 371 392
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
52
Notes to the Financial Statements continued
For the year ended 31 December 2016
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25. Financial instruments (continued)
(iii) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity is to 
ensure it has sufficient liquidity to meet its liabilities when due. 
As at 31 December 2016, the Group and Company’s financial liabilities (being trade and other payables and deferred income, payroll taxes, VAT or similar 
taxes and bank borrowings) have contractual cashflows as summarised below:
Group
31 December 2016
Carrying 
amount
£’000
< 1 year 
£’000
1–2 years
£’000
2–5 years
£’000
Trade and other payables (current liabilities) 4,224 4,224 – –
Contingent consideration (current liabilities 375 375 – –
Trade and other payables (non-current liabilities) 15 – – 15
Bank borrowings 158 158 – –
4,772 4,757 – 15
31 December 2015
Carrying 
amount
£’000
< 1 year 
£’000
1–2 years
£’000
2–5 years
£’000
Trade and other payables (current liabilities) 3,986 3,986 – –
Contingent consideration (current liabilities 207 207 – –
Trade and other payables (non-current liabilities) 15 – – 15
Contingent consideration (non-current liabilities) 413 – 413 –
Bank borrowings 325 167 158 –
4,946 4,360 571 15
Company
31 December 2016 
Carrying 
amount
£’000
< 1 year 
£’000
1–2 years
£’000
2–5 years
£’000
Trade and other payables (current liabilities) 2,556 2,556 – –
Contingent consideration (current liabilities) 375 375 – –
Trade and other payables (non-current liabilities) 15 – – 15
Bank borrowings 158 158 – –
3,104 3,089 – 15
31 December 2015
Carrying 
amount
£’000
< 1 year 
£’000
1–2 years
£’000
2–5 years
£’000
Trade and other payables (current liabilities) 2,416 2,416 – –
Contingent consideration (current liabilities 207 207 – –
Trade and other payables (non-current liabilities) 15 – – 15
Contingent consideration (non-current liabilities) 413 – 413 –
Bank borrowings 325 167 158 –
3,376 2,790 571 15
The Group would normally expect that sufficient cash is generated in the operating cycle to meet contractual cash flows as disclosed above. In addition the 
Group has significant cash balances as at the year end to minimise any liquidity risk. 
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25. Financial instruments (continued)
(iv) Foreign currency risk
The Group is exposed to foreign currency risk on sales and purchases which are denominated in a currency other than Sterling. Exposures to currency 
exchange rates are primarily denominated in US Dollars ($), Australian Dollars (AUD) and Euros (€). The Group does not use derivatives to hedge 
translation exposures arising on the consolidation of its overseas operations. 
At the year end, the Group had assets totalling £1,307,000 and liabilities totalling £547,000 denominated in Euros (2015: assets totalling £1,004,000 and 
liabilities totalling £640,000), assets totalling £1,729,000 and liabilities totalling £1,119,000 denominated in US Dollars (2015: assets totalling £1, 501,000 
and liabilities totalling £992,000) and assets totalling £445,000 and liabilities totalling £403,000 denominated in Australian Dollars (2015: assets totalling 
£376,000 and liabilities totalling £324,000). 
If each of the exchange rates strengthened by 5%, the impact on the income statement would as follows:
Group
2016
 £’000 
2015
 £’000 
Euros 20 7
US Dollars 7 7
Australian Dollars (1) 1
26 15
At the year end, the Company had liabilities totalling £115,000 denominated in Euros (2015: liabilities totalling £156,000), assets totalling £281,000 
denominated in US Dollars (2015: assets totalling £234,000) and assets totalling £27,000 denominated in Australian Dollars (2015: assets totalling 
£78,000). 
For the company a 5% increase in the value of each of the above currencies would have result in an impact on the income statement as follows:
Company
2016
 £’000 
2015
 £’000 
Euros (6) (8)
US Dollars 15 12
Australian Dollars 1 4
10 8
Capital risk management
The Group’s objectives when managing capital are to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns 
for shareholders and benefits for other stakeholders. 
The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes adjustments to it in the light of changes 
in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the 
amount of dividends paid to shareholders, return capital to shareholders, issue new shares, sell assets or take on bank debt. The decision to take on some 
element of debt gives the Group additional flexibility in its capital structure and enables it to lower its cost of capital. 
The Group considers its capital to include share capital, share premium, merger reserve, translation reserve, share option reserve and retained earnings. 
Net cash comprises borrowings less cash and cash equivalents. 
Note
2016
 £’000 
2015
 £’000 
Total borrowings 20 158 325
Less cash or cash equivalents (1,537) (1,595)
Net cash (1,379) (1,270)
Total equity 6,906 7,159
Total capital gearing ratio 0% 0%
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
54
Notes to the Financial Statements continued
For the year ended 31 December 2016
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Strategic Report Governance Financial Statements Governance Financial Statements Strategic Report
25. Financial instruments (continued)
Summary of financial assets and liabilities by category
The carrying amounts of the financial assets and liabilities as recognised at the statement of financial position date of the years under review may also be 
categorised as follows:
Group Company
2016
 £’000 
2015
 £’000 
2016
 £’000 
2015
 £’000 
Loans and receivables
Cash and cash equivalents 1,537 1,595 42 59 
Trade and other receivables 1,824 1,549 329 333 
3,361 3,144 371 392 
Financial liabilities held at amortised cost
Trade and other payables 4,239 4,001 2,600 2,431
Borrowings 158 325 158 325
Financial liabilities held at fair value
Contingent consideration 375 620 375 620
4,772 4,946 3,133 3,376
26. Fair value measurement of financial instruments 
Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped into three Levels of a fair value hierarchy. 
The three Levels are defined based on the observability of significant inputs to the measurement, as follows:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
• Level 3: unobservable inputs for the asset or liability.
The following table shows the Levels within the hierarchy of financial assets and liabilities measured at fair value on a recurring basis at 31 December 2016 
and 31 December 2015:
2016
 £’000 
Level 3
2015
 £’000 
Level 3
Contingent consideration 375 620
The Group’s finance team performs valuations of financial items for financial reporting purposes, including Level 3 fair values, in consultation with third 
party valuation specialists for complex valuations. Valuation techniques are selected based on the characteristics of each instrument, with the overall 
objective of maximising the use of market-based information. The finance team reports directly to the Group Finance Director and to the audit committee. 
The valuation techniques used for instruments categorised in Level 3 are described below:
Contingent consideration (Level 3) 
The fair value of contingent consideration relates to the acquisition of ISV Software and is estimated using a present value technique. The contingent 
consideration of £375,000 is included at fair value which is mainly based on actual, budget or forecast revenues prepared by the finance team. The 
contingent consideration is discounted. 
The discount rate used to discount the contingent consideration at 31 December 2016 is 3.48% and is based on an after tax estimated of the Group’s 
current borrowing rate. 
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26. Fair value measurement of financial instruments (continued)
The reconciliation of the carrying amounts of financial instruments classified within Level 3 is as follows:
2016
 £’000 
2015
 £’000 
At start of year (620) (1,173)
Paid in year 212 516
Movement in fair value recognised in profit or loss under finance costs (15) (26)
Movement in fair value recognised in profit or loss under administrative expenses 48 63
At the year end (375) (620)
27. Control
No individual shareholder, or shareholders acting in concert, hold more than 50% of voting shares, and accordingly there is not considered to be an 
‘ultimate controlling party’. 
28. Related party transactions
Group
The Directors received dividends paid by the Company of £353,000 (2015: £335,000). 
During the year, Mike Love bought 60,000 shares at 69.5p per share. 
Details of earnings of key management is included in Note 7. Such remuneration includes a divisional director’s spouse who is employed as a software 
engineer and no amounts were outstanding at year end. The amounts outstanding at the year end due to key management was £40,000 and related to 
estimated bonus payments payable in relation to 2016. In addition Dr Love’s fees of £33,000 are paid to Pond Associates LLP a business owned by him. 
The balance outstanding payable to Dr Love at the year end was £9,000. 
Company
The Company has a related party relationship with its subsidiaries, its Directors, and other employees of the Company with management responsibility. 
During the year the Company received a management charge of £56,000 (2015: £102,000) and a dividend of £81,000 from its subsidiary company 
Dillistone Systems (US) Inc (2015: £nil). At the year end, Dillistone Systems (US) Inc owed £281,000 (2015: owed £234,000) to the Company. 
During the current year Dillistone Systems Limited paid a dividend of £1,000,000 (2015: £1,000,000) to Dillistone Group Plc and a management charge 
of £296,000 (2015: £204,000). At the year end Dillistone Systems Limited was owed £458,000 (2015: £836,000). 
The Company received a management charge during the year from Dillistone Systems (Australia) Pty Limited of £17,000 (2015: £34,000) and at the year 
end was owed £27,000 (2015: £78,000). 
Voyager Software paid a management charge of £144,000 (2015: £144,000) and owed the Company £201,000 at the year end (2015: £201,000). 
Woodcote Software owed the Company £13,000 at the year end (2015: £13,000). 
FCP Internet Limited paid a management charge of £84,000 (2015: £84,000) and was owed by the Company £1,293,000 at the year end (2015: owed by 
the Company £724,000). 
A management charge of £60,000 (2015: £60,000) was received from ISV Software and at the year end owed the Company owed ISV £414,000 
(2015: £314,000). 
FCP Internet Holdings Limited was owed by the Company £2,000 at the year end (2015: owed by the Company £nil). 
Management charges payable by Group members to Dillistone Group Plc relate to management support provided directly to them. 
29. Dividends
The dividends paid in 2016 and 2015 were £811,000 (4.125p per share) and £793,000 (4.05p per share). A final dividend in respect of the year ended 
31 December 2016 of 2.8p per share will be paid on 27 June 2017. These financial statements do not reflect this dividend. 
Dillistone Group Plc  |  Annual Report & Accounts 2016
stock code: DSG
56
Notes to the Financial Statements continued
For the year ended 31 December 2016 
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Directors M D Love – Non-Executive Chairman
G R Fearnley – Non-Executive Director
J S Starr – Chief Executive 
R Howard – Operations Director
A D James – Product Development Director
J P Pomeroy – Group Finance Director
A F Milne – Director of Support Services
Secretary J P Pomeroy
Company number 4578125
Registered office 50 Leman St
London
E1 8HQ
Independent auditors BDO LLP
55 Baker Street
London
W1U 7EU
Principal bankers HSBC Bank Plc
Basingstoke Commercial Centre
8 London Street 
Basingstoke 
RG21 7NU
Solicitors Ashfords LLP
Tower Wharf
Cheese Lane 
Bristol BS2 0JJ
Nominated adviser WH Ireland Limited
24 Martin Lane
London
EC4R 0DR
Broker WH Ireland Limited
24 Martin Lane
London
EC4R 0DR
Registrars Capita Registrars 
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
www.dillistonegroup.com 57
Directors and Advisers
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50 Leman Street 
London 
E1 8HQ 
T: +44 (0)20 7749 6100
www.dillistonegroup.com
Dillistone Group Plc Annual Report and Accounts for the year ended 31 December 2016
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