Allocate Software plc Annual Report and Accounts 2014
Allocate  
Software
Delivering results today.
Developing solutions for the future.
Annual Report and 
Accounts 2014 Contents
Welcome to Allocate
Allocate is a leading software and services business that enables people-based organisations to 
better deploy and manage their most important and often expensive resource, their people. 
Operating in the Healthcare, Defence and other commercial sectors, we have over recent years 
built a much broader product and services portfolio, with particular emphasis on the Healthcare 
sector which underpins our strategy for growth. 
Allocate’s objective is to increase shareholder value by developing a robust, profitable and 
cash-generative organisation through a combination of organic growth and carefully targeted 
acquisitions. Continued organic growth will come from developing innovative new applications 
to meet our existing customers’ growing requirements and identifying new markets for existing 
products and services. 
Our applications and services enable greater insight into sub-optimal workforce resourcing, 
enabling significant cost reductions and improved efficiencies. Customers can precisely identify 
and reduce waste, while managing and monitoring process, governance, risk and compliance 
issues to ensure that operational front-line delivery is maintained and frequently improved. We 
understand the complex environments our customers operate in, which is why they choose 
Allocate – unrivalled market expertise underpinned by proven technology.
Overview
 1 2014 highlights
Strategic report
 2 Allocate at a glance
 4 Chairman’s statement
 6 Chief Executive Officer’s 
report and business review
12 Chief Financial Officer’s 
 review
14 Risk management
Governance
15 Board of Directors
16 Directors’ report
19 Remuneration report
22 Corporate governance report
Financial statements
23 Independent auditor’s report
24 Consolidated income statement
24 Consolidated statement of 
 comprehensive income
25 Consolidated statement of 
financial position
26 Company statement of 
financial position
Financial statements continued
27 Consolidated statement of 
changes in equity
28 Company statement of 
changes in equity
29 Consolidated cash flow 
 statement
30 Company cash flow 
 statement
31 Notes to the financial 
 statements
Company information
60 Directors and advisers Allocate Software plc
Annual Report and Accounts 2014
Overview
Strategic Report
Governance
Financial Statements
Company Information
1
2014 2013 2012 2011 2010
Revenue 
£40.0m
EBITDA
£6.9m
Cash Generated 
from Operations
£5.9m
Recurring Revenue
£18.8m
22.0
30.1
36.6
37.1
40.0
3.7
6.4
4.8
5.8
6.9
6.9
11.5
15.6
17.6
18.8
4.9
5.9
5.4
8.7
5.9
2014 2013 2012 2011 2010 2014 2013 2012 2011 2010 2014 2013 2012 2011 2010
2014 highlights
Financial highlights
• Total revenue increased organically by 8% to £40.0m  
(2013: £37.1m).
• Recurring revenue increased by 7% to £18.8m representing 47% 
of total revenue (2013: 47%).
• Healthcare revenue increased organically by 18% to £34.7m 
(2013: £29.3m).
• Healthcare bookings* were £41.2m, £6.5m greater than 
Healthcare revenue. 
• Adjusted EBITDA** rose 44% to £6.9m and 17% of revenue 
(2013: £4.8m and 13%).
• Diluted adjusted EPS*** was 9.0p (2013: 5.6p).
• Net cash balance was £13.7m (2013: £9.1m). 
• Proposed dividend up 10% to 1.45p (2013: 1.32p) per share.
• Statutory profit before tax rose to £2.9m (2013: loss £2.4m.)
*  Bookings are defined as the total value of contracts received in the period.
** Adjusted EBITDA refers to earnings before interest, tax, depreciation, amortisation, 
impairment, share-based payments and non-recurring costs.
*** Diluted adjusted EPS excludes amortisation of intangible assets, acquisition costs, 
non-recurring costs, impairment charges and share-based payments, adjusted for 
taxation. 
Business highlights
• 147 agreements for major products across the applications 
portfolio in the UK led to UK Healthcare revenue growth of 19% 
over 2013, exceeding management expectations. 
• 16 customers selected HealthRoster, all on a term licence basis. 
• The HealthRoster win rate increased to 90% (2013: 88%) with the 
16 new agreements including six competitive displacements.
• 36 NHS Trusts renewed HealthRoster contracts in 2014, 32 on a 
term licence basis. This continues the 100% success rate and is a 
clear demonstration of the value the application is delivering, 
now reinforced by the NHS Safe Staffing agenda. 
• 39 customers selected the Allocate Cloud, bringing the total 
number of customers for the Cloud service to 63, which is 37% 
of the HealthRoster installed base. 
• 33 new SafeCare agreements secured, bringing the total to 
date to 37 .
• 12 NHS Trusts selected the HealthMedics applications for the 
first time. There were 23 transactions for the HealthMedics 
products. The total number of NHS Trusts using the 
HealthMedics applications is now 155.
• 59 customers are now live on HealthRoster V10, including 21 
customers who have migrated from HealthRoster V9 to 
HealthRoster V10. In addition a further 37 customers are 
contracted to migrate. 
• The Nordics operations performed very well and the Australia 
Healthcare business performed in line with expectations, 
driving increases in both revenue and profit.  2
2013 2012 2011
 Healthcare
 Other Commercial
87%
13%
 UK Revenue
 International Revenue
59%
41%
Recurring revenue £m Revenue split by territory Revenue by market sector
11.5m
15.6m
17.6m
2013 2012 2011
 Healthcare
 Other Commercial
87%
13%
 UK Revenue
 International Revenue
59%
41%
Recurring revenue £m Revenue split by territory Revenue by market sector
11.5m
15.6m
17.6m
2014
2013
2012
2011
2010
Repeatable Revenue*
£26.5m
Recurring Revenue 
£18.8m
6.9
11.5
15.6
17.6
18.8 2014
2013
2012
2011
2010 11.3
14.0
17.1
22.8
26.5
2014
2013
2012
2011
2010
Repeatable Revenue*
£26.5m
Recurring Revenue 
£18.8m
6.9
11.5
15.6
17.6
18.8 2014
2013
2012
2011
2010 11.3
14.0
17.1
22.8
26.5
2013 2012 2011
 Healthcare
 Other Commercial
87%
13%
 UK Revenue
 International Revenue
59%
41%
Recurring revenue £m Revenue split by territory Revenue by market sector
11.5m
15.6m
17.6m
2013 2012 2011
 Healthcare
 Other Commercial
87%
13%
 UK Revenue
 International Revenue
59%
41%
Recurring revenue £m Revenue split by territory Revenue by market sector
11.5m
15.6m
17.6m
Allocate at a glance
As the leading provider of specialist workforce optimisation, and 
assurance software and services we are enabling our customers  
to manage and optimise large, multi-skilled workforces in complex, 
fast changing environments. Our competitive advantage lies in our 
specialist expertise combined with extensive market experience 
all underpinned by tried and tested technology deployed in 12 
countries across both public and private sector organisations. 
Healthcare continues to underpin growth
At Allocate we continue to innovate, deliver greater value 
to our customers while ensuring our efficiency is continually 
improving. This year we’ve seen a significant increase in the 
number of renewing customers taking advantage of the 
Allocate Cloud service. In addition to making HealthRoster 
V10 easy to run, the service makes it easy for customers 
to make the migration from their current version, allowing 
Allocate to take responsibility for the majority of the 
planning, implementation and deployment processes 
thereby significantly reducing transition timescales and 
costs. The service delivers more speed, more simplicity, 
easier access and predictability of costs into the future, 
thereby improving financial transparency. 
During the year Allocate commenced deployment of our 
new safe staffing solution enabling care staff to dynamically 
assess the level and skill set of staffing required to meet 
patients’ actual needs using mobile devices – SafeCare. 
SafeCare supports organisations in meeting their own safe 
staffing ambitions, while at the same time enabling them to 
better meet national requirements. It is a unique end-to-end 
software solution that captures and reports on safe staffing 
to support every stage of healthcare workforce planning 
and delivery process.
SafeCare is not only architected to be delivered from the 
Allocate Cloud, it will be sold on an annual licencing basis. 
This helps customers by enabling them to plan more 
efficiently for the software and services their organisations 
are so reliant upon. The benefit for Allocate is an increase 
in the predictability of our recurring revenue over future 
periods.
* Repeatable revenue is defined as recurring 
revenue plus term licence revenue  Allocate Software plc
Annual Report and Accounts 2014
3
Overview
Strategic Report
Governance
Financial Statements
Company Information
2013
2012
2011
2010
2014
2013
2012
2011
2010
2014
2013
2012
2011
2010
2.7
2.9
2.1
2.8
Revenue
£34.7m
+18%
Revenue
£3.6m
-28%
Revenue
£2.8m
+33%
4.5
4.1
7.6
5.0
3.6
14.8
23.1
26.7
29.3
34.7
2013
2012
2011
2010
2014
2013
2012
2011
2010
2014
2013
2012
2011
2010
2.7
2.9
2.1
2.8
Revenue
£34.7m
+18%
Revenue
£3.6m
-28%
Revenue
£2.8m
+33%
4.5
4.1
7.6
5.0
3.6
14.8
23.1
26.7
29.3
34.7
Healthcare
Allocate’ s largest and fastest growing sector, 
with over 360 healthcare customers across 
11 countries, is where we witness first hand 
the effects of changing operational models, 
evolving legislation, increasing demands on 
staff and financial pressure.
HealthSuite enables organisations to address 
these issues by optimising people, processes, 
performance and assurance, freeing time for 
healthcare professionals to focus on improved 
outcomes for their patients. 
Defence
Allocate’s industry leading DefenceSuite 
is designed to meet the complex and 
changing requirements of modern defence 
forces. With the ability to plan, cost and 
deploy complex forces scenarios across 
changing theatres of engagement, 
DefenceSuite has now been deployed in 
numerous defence organisations including: 
the British Army, the Royal Fleet Auxiliary, 
NATO, the Royal Australian Navy, the 
Australian Army and the Royal Australian  
Air Force.
Other commercial
Allocate continues to derive revenue from 
sectors which are required to manage 
workforces with complex shift and 
capability requirements. Historically this 
mainly consisted of Maritime and Offshore 
engineering customers, however, the 
acquisition of Time Care and RosterOn have 
brought a broader customer base including, 
security services, transport, mining, retail, 
education and government. 4
Terry Osborne Chairman
“I am very proud of what 
Allocate and the team have 
achieved and am confident in 
their ability to continue to grow 
in the future.”
I am pleased to report that our 2014 financial year 
exceeded City expectations for revenue, EBITDA and cash. 
Our response to the safe staffing agenda of the NHS has 
been met very enthusiastically, we more than doubled 
the number of Cloud customers and we grew recurring 
revenues significantly as we continued to drive the 
evolution of the Company’ s business model.
The strength of Allocate can be seen in the Statement of 
Financial Position which shows this year’ s repayment of all 
of the Company’ s debt, the continuing increase in deferred 
revenue, well-managed working capital and the record 
cash balance of £13.7m.
I was delighted to welcome to the Board Dr Graham 
Rich who joined us in December 2013. Dr Rich is an 
experienced former chief executive of NHS hospitals 
including a Foundation Trust and a primary care trust  
(PCT) as well as formerly holding a position as Director  
of Commissioning. He has also previously worked on 
national policy formulation and implementation at the 
Department of Health. He has particular interest in  
patient empowerment, the use of IT in healthcare, 
improved transparency of outcomes and patient 
satisfaction to drive performance improvement.
In February, Chris Gale, our Chief Financial Officer, 
announced his intention to step down from his post to 
pursue other interests. On behalf of the Board, I want to 
thank Chris for his considerable contribution to Allocate’ s 
growth and success over the last four and a half years. 
During his tenure as CFO the Company has made 
Chairman’s statement
significant changes which greatly strengthened its business 
model and much improved its business systems and IT 
infrastructure. Chris leaves behind him a very competent 
team and the Board is in advanced discussions with several 
candidates to fill the CFO role. Allocate’ s excellent financial 
health owes much to Chris and we all wish him well for  
the future.
This will also be my last Chairman’ s Statement as, given  
my impending retirement, I will be stepping down from  
the Board later in 2014. I joined as the Company’ s 
Chairman in October 2005 and in that near 10-year 
period have seen the transformation of Allocate from 
a loss-making company focused on the Maritime and 
Defence sectors with revenues of £4 million to a profitable, 
international business which has also successfully 
developed a market-leading position in the Healthcare 
industry. I am very proud of what Allocate and the team 
have achieved and am confident in their ability to continue 
to grow in the future.
I would like once more to thank Allocate’ s customers 
for their partnership and business. Finally, I would like 
to recognise and thank all of the Company’ s employees 
throughout the world for another year of hard work and 
commitment in support of the Company’ s success.
As an indication of our confidence in the business, the 
Directors are pleased to propose a dividend in respect  
of the full financial year of 1.45 pence per share. 
We remain confident of our prospects for the  
2015 financial year, and of the fundamental strength  
of the business.
Terry Osborne
Chairman
18 July 2014 Allocate Software plc
Annual Report and Accounts 2014
5
Overview
Strategic Report
Governance
Financial Statements
Company Information
Company position and strengths
Understanding why using the Allocate Cloud for HealthRoster 
has made both business sense and user sense
Leading provider of Healthcare rostering 
software to the UK, Australian and 
Nordic markets
 – Comprehensive and complementary product suite
 – Strong existing customer base around HealthRoster
Positive market dynamics – Growing patient demand in healthcare sector 
drives need for improved operational efficiency
 – Technology change driving demand for cloud 
based solution
Powerful franchise in workforce 
optimisation
 – Strong market position with the NHS with track 
record of displacing competition
 – High level of customer retention
Continuous product innovation driving 
growth
 – Leveraging position as trusted advisor to upsell 
additional product (SafeCare, HealthMedics, 
HealthAssure and Patient Flow)
 – Improved delivery platforms (Allocate V10;  
the Allocate Cloud)
Management team with experience and 
ability to scale the business
 – Significant software and healthcare experience
 – Proven track record of driving growth, both organic 
and through acquisition
Robust financial profile – Improving recurring revenue profile and operating 
margin expansion
 – R&D and acquisition investment in place to support 
future growth
Sheffield Teaching Hospital NHS 
Foundation Trust took the decision 
to move its e-Rostering software, 
HealthRoster to the Allocate Cloud 
allowing them to avoid new IT 
infrastructure costs. The following 
case study outlines the rationale for 
the decision and the benefits twelve 
months on.
The trust did a complete options 
appraisal, reviewing external hosting 
via a third party hosting provider as 
well as the Allocate Cloud. 
There was a straightforward cost 
benefit in selecting the Allocate 
Cloud but in addition to the cost 
benefit, the appraisal uncovered 
additional advantages of running 
HealthRoster V10 on the Allocate 
Cloud including having a single point 
of accountability for service delivery 
across both the software and the 
infrastructure. 
Benefits
• More cost effective than in-house 
(Circa £200k) or outsource hosting 
(+£35k)
• Smooth migration from V9.5 to V10
• Single supplier for all aspects of 
service 
• Exceptional resilience and disaster 
recovery included
• Future-proofed infrastructure
• Easy home access, unleashing the 
power of HealthRoster for users
• Hassle-free upgrades to software – 
very fast and regular
“One year on the benefits of 
running HealthRoster V10 on 
the Allocate Cloud have been 
greater than those articulated 
in the Cloud business case, for 
example, the Cloud support is 
excellent and the speed at which 
Allocate can upgrade our system 
with new functionality has made 
a real impact, particularly when 
they released a update with a new 
report format to help Trusts meet 
the national safe staffing report 
requirements, without additional 
effort from us Allocate were able to 
update our system and make this 
available to us within 24 hours of 
release.” 
Says Rachel Bird, e-Rostering project 
manager. 6
“We have delivered a very  
strong performance in 2014 with 
growth in our core product areas 
and in all major geographies.”
Overview
2014 was another very successful year for Allocate in which 
we grew worldwide revenue by 8% to £40.0m organically. 
Healthcare revenue grew by 18% to £34.7m, again 
organically, contributing 87% of total revenue. EBITDA 
rose to £6.9m (2013: £4.8m). Profit before tax rose to £2.9m 
(2013: loss £2.4m).
Our business model continues to evolve with recurring 
revenue at 47% of total revenue and repeatable revenue 
this year reaching 66% of total revenue. Repeatable 
revenue is defined as recurring revenue plus term licence 
revenue. This high level of repeatability significantly 
enhances the Company’ s visibility and predictability of 
future revenue. 
Allocate’ s offering is closely aligned with the needs of the 
NHS and the broader healthcare community. As has been 
widely reported and outlined in the Government’ s Quality, 
Innovation, Productivity and Performance initiative (QIPP), 
the rising demand for care, flat or reducing budgets and 
the ongoing upward pressure on costs has meant that the 
NHS in England has been tasked with finding large year-
on-year efficiency savings. The savings target that has been 
identified equates to every Trust making 4% per annum 
efficiency gains, which is part of the c. £30 billion funding 
gap, whilst at the same time improving care. Allocate has 
many success stories where its products have enabled 
Trusts to make significant savings.
For the second year running, in June 2014, Allocate was 
a key supporter of the NHS Confederation’ s Annual 
Conference and Exhibition (CONFED). This event is the 
largest and most influential meeting of healthcare leaders, 
decision-makers, partners and stakeholders. This year as 
well as supporting the event, Allocate provided speakers, 
with subject matter expertise and hosted the workshop 
‘Delivering safe and sustainable services 24×7 by aligning 
the workforce to patient need and activity’.
Our suite of products is designed to help all Healthcare 
providers to deliver effective care whilst ensuring the 
optimal use of resources. In particular NHS Trusts who are 
our largest community of customers. The high levels of 
engagement that we receive at key industry conferences 
like CONFED and the Foundation Trust Conference 
suggests that Allocate’ s healthcare offerings are well 
positioned to support further growth in our domestic and 
overseas markets.
 
Healthcare - UK
• UK Healthcare revenue up 19% to £22.5 million
• Repeatable revenue 81% of UK Health revenue
• Further improved competitive position with new 
HealthRoster contracts win rate over 90%
• Record number of new and renewal HealthRoster 
agreements signed, 92% on a term-licence basis
• Launch of SafeCare, our new safe staffing application 
matching patient demand to available staff skills
Recurring revenue rose to £10.5m and repeatable revenue 
rose to £18.3m which is 81% of UK Health revenue (2013: 
£14.9m and 73%). T otal UK Healthcare bookings were 
£30.0m, exceeding revenue of £22.5m by £7.5m. These 
bookings demonstrate the strength of Allocate’ s depth 
of customer engagement and provide increased levels of 
forward visibility. 
Ian Bowles Chief Executive Officer
Chief Executive Officer’s report and  
business review Allocate Software plc
Annual Report and Accounts 2014
7
Overview
Strategic Report
Governance
Financial Statements
Company Information
Delivering Safe Staffing levels using SafeCare;  
the next step for e-Rostering in Healthcare
Northern Devon Healthcare NHS Trust has used HealthRoster for 8 years to plan and 
roster staff across their sites, benefiting from visibility and control of the workforce. 
However, until recently they have not been able to link that workforce information to the 
actual patient numbers and needs on a shift. 
 
This is not an uncommon problem across all publically funded healthcare globally; the 
result can be shifts with too few or too many staff resulting in missed care, increased 
temporary staff use and in worst case scenarios actual patient harm. The NHS in England 
is changing this by focusing on safe staffing levels and introducing new guidelines that 
ask organisations to plan their workforce levels around the needs of the patients.
Northern Devon Healthcare NHS Trust are one of a number of Trusts leading the way 
by implementing Allocate Software’s SafeCare and SafeCare Mobile software alongside 
their existing HealthRoster solution.
SafeCare brings the patient numbers and need data together with the staffing data in 
HealthRoster allowing the trusts to match patient demand with staff availability.
The solution is now live across ten wards and already Northern Devon is benefiting from 
a far greater insight using mobile devices on wards that is allowing them to facilitate 
redeployment of staff. They are in the process of replacing paper-based processes used 
to capture patient need information and now have a live view of the number of staff 
available versus the patient need on each ward.
Caroline Raby, e-Roster Operational Lead says, “SafeCare is the natural next step for 
HealthRoster customers. It means it will be easier to meet a national safe staffing 
requirement which is important but it also means organisations will be able to move 
to more dynamic rosters, less paper and they will have a better understanding of 
the activity and resource required to deliver care. The matrons and ward managers 
really love it and ultimately it will help us ensure and demonstrate that we are 
getting staffing levels right for patients.”
This year has seen a major focus on safe 
staffing throughout the NHS as a result of the 
Francis Report and subsequent initiatives by 
the Department of Health and NHS England 
to provide transparent staffing data.
HealthRoster, Allocate’ s flagship solution, 
remains the UK’ s most widely-used e-rostering 
solution and in 2014 we improved further 
HeathRoster’ s competitive position. In 
addition to securing agreements with 16 new 
customers, the Company’ s win rate was over 
90%, which is higher than in prior years. 
The continued adoption of HealthRoster by 
NHS Trusts in both England and Scotland 
positions Allocate strongly to introduce other 
applications to customers in the future.
The number of NHS Trusts utilising 
HealthRoster has now reached 165 (out 
of 170 total UK HealthRoster customers), 
representing 61% of the 272 Trusts at the 
year-end. The Company secured its first 
HealthRoster customer in Scotland. This 
agreement was signed under a new 
framework agreement which will enable the 
other 11 Scottish Health Boards to contract 
with Allocate under the same framework, 
terms and conditions.
Significantly, six Trusts moved away from 
competitive solutions to HealthRoster, leaving 
41 Trusts with competitive products. There are 
still 61 Trusts that do not use any electronic 
rostering system. 
The Company also secured 36 HealthRoster 
renewals in 2014 bringing the total number 
renewed to date to 69, continuing the 
previously reported 100% success rate. Of 
the 36 renewals, 32 were contracted on an 
average four to five-year-term licence basis. 
All were renewed at average values consistent 
with those of the original agreements. 
In 2014 therefore, the Company secured a 
total of 52 new and renewal HealthRoster 
agreements, a record performance. Of these, 
48 or 92% were secured on a term licence 
basis, versus an average of 70% in the past, 
which significantly improves the Company’ s 
visibility of future, repeatable revenue streams.  8
Chief Executive Officer’s report and  
business review continued
During the year we released the first product in our 
SafeCare application which is a significant development 
for our customers and ultimately patients. The application 
focuses on meeting the safe staffing challenge post 
the Francis Report by matching patient demand to the 
available staff. In 2014, we secured 33 contracts (37 to 
date) for SafeCare Ward, the first product to be shipped 
within our SafeCare application, significantly exceeding 
management expectations. SafeCare Ward will continue 
to be shipped in 2015 but it will be supplemented by the 
recently announced SafeCare Live and SafeCare Assure, 
the Cloud delivered service that will enable Trusts to 
match patient demand against staffing resources in real 
time, by using a wide range of hand-held devices within a 
Trust, ensuring staff are correctly deployed to meet patient 
needs. The level of customer engagement with SafeCare at 
the close of 2014 was significant.
The performance of the Allocate Cloud exceeded 
management expectations in 2014 with 39 new contracts 
closed, bringing the cumulative number to 63. Nine of 
the 16 new HealthRoster agreements secured in 2014 also 
included an agreement for Cloud. Of the 39 new contracts 
closed, nine were contracted with new HealthRoster 
customers and 16 with HealthRoster renewals. The Annual 
Contract Value (ACV) of Cloud contracts rose over 2013, 
driven by average contract size. The Cloud pipeline on 
closing the year stood at over 70 prospects with a bookings 
value close to £10.0m.
The performance of our Medics application met overall 
management expectations in 2014, with 12 new customers 
secured. The ACV of these agreements remains at a level 
consistent with 2013.
HealthAssure sales this year remain short of expectations 
but nevertheless eight new agreements were secured. 
Sales of the Patient Flow and Emergency Department 
product lines, which were acquired with Real Time, remain 
slower than expected and the Company has not yet 
secured a new customer with these applications since 
the acquisition. Whilst we have seen and continue to see 
interest in the functionality of the products, we have found 
that decision making cycles for clinical decision support 
applications are considerably longer than originally 
anticipated. 
 
Healthcare – Nordic & Australia
Allocate’s international operations continue to 
strengthen, providing a solid growth platform  
for the future.
The Nordics business has grown revenue and profits for the 
fourth year in succession and has secured contracts with a 
significant number of new customers for both Time Care 
Pool and Time Care Planning.
Average order values have risen slightly in the period due 
to transaction size. The average value per services day has 
also risen slightly, contributing not only to the excellent 
Nordics performance but also to the improved services 
performance Company wide. In 2015, Allocate will deploy 
its V10 platform into the Nordics and we are confident that 
this will support continuing strong growth in the geography.
The Australian Healthcare revenue has increased by 41% 
over 2013, principally as a result of better integration of 
the acquired RosterOn organisation which has led to 
improved execution of both licence and services contracts. 
In addition, as we closed 2014, we were negotiating an 
agreement with our major customer in Australia for a large, 
multi-year services engagement to provide enhancements 
to their HealthRoster deployment. As part of this 
agreement, we will make an incremental investment in our 
R&D team located in Australia.
Defence and other commercial markets
Allocate’ s main division and primary growth driver is 
Healthcare. The Company has strong credentials and 
continues to maintain a position in the Defence and 
Maritime sectors. Both of these divisions are profitable and 
cash-generative.
The Defence environment remains very challenging with 
western nations looking for reductions in government 
spending. As a consequence, we have not been successful 
in securing new licence agreements this year. However, 
we retain a significant customer base in Australia, the 
UK and Europe for whom we continue to provide both 
services and support at levels that contribute positively 
to the Company’ s financial position. Post period end we 
secured a significant commitment from the Australian 
Defence Forces for a multi-year support agreement which 
underlines the commitment to the Allocate Defence Suite.
For offshore oil and gas organisations around the globe, 
the task of finding, deploying and managing highly skilled 
workforces in the marine environment is increasingly 
complex. Whilst we have not been successful in closing 
any new licence contracts this year, several customers 
have extended their use of our products. McDermott has 
gone live globally and has rolled out Allocate Onboard for 
their barges and vessels. Subsea 7 has extended the use 
of the system to cover activity time capture and skills. As 
noted with Defence, the Maritime business continues to 
maintain strong services and support relationships with our 
clients and the business remains a positive contributor to 
Allocate’ s financial position. Allocate Software plc
Annual Report and Accounts 2014
9
Overview
Strategic Report
Governance
Financial Statements
Company Information
The Dudley Group NHS Foundation Trust 
A swift and successful roll-out of HealthRoster across 50 wards 
results in more engaged staff with quick and easy access to up-
to-date staffing information, better management information 
for trust managers and the ability to respond to national staffing 
requirements.
The Dudley Group NHS Foundation Trust is the main provider 
of hospital and adult community services and a wide range of 
medical, surgical and rehabilitation services to around 400,000 
people. The organisation has been focused on making changes 
to ensure it has the right systems to ensure quality and safe 
staffing levels are delivered in an efficient manner. As part of this 
programme they replaced a legacy e-rostering system and moved 
to Allocate Software’s HealthRoster. 
Using HealthRoster V10 the trust has been able to benefit from a 
tool that is a lot faster saving administration time, more accessible 
for staff allowing them to use their mobile devices to access 
rosters and request leave and functionally rich. “We can now 
produce roster reports within minutes, whereas before it was 
taking up to 24hrs.” says Justin Willetts, project manager, Dudley 
Group NHS Foundation Trust.
Benefits
• The transition process from the legacy system was smooth and 
a range of users were able to see the benefits quickly
• Staff are more engaged in the e-rostering process. They have 
quick and easy access to the e-rostering system through 
Employee Online across a range of devices (including iphone 
and ipad) and ward information is up-to-date and accurate
• The trust can monitor staffing metrics from a safety and 
efficiency perspective across all its wards by using in-depth 
management information to benchmark staffing from one ward 
to another 
Services
As planned in 2014, we reorganised the Services team. The focus has 
been on right-sizing capacity, improving the utilisation of the delivery 
teams and meeting customer quality standards. Our objective is to 
develop a sustainable world-class services organisation, delivering high 
quality outcomes in projects delivered to customer requirements with 
improved margins. In the UK the team has been enhanced through 
the recruitment of a number of experienced individuals including key 
director roles. The new team has made significant progress and has 
established an improved implementation methodology for the delivery 
of the core HealthRoster application. This has both reduced the cost 
and improved the quality of project outcomes. 
In addition to delivering increasing new-business-driven services, the 
team has delivered a considerable amount of post-sale services for 
benefits realisation.
In the UK there has been a surge in demand from customers seeking 
support in migrating from HealthRoster V9 to V10. T o satisfy this 
demand a dedicated team was created and the migration process 
reengineered to reduce lead time and increase project throughput, 
thereby improving customer satisfaction. The team is now staffed, 
trained and in a position to migrate the balance of the V9 installed 
base to V10 in 2015. 
The focus in Australia is very much the same as the UK with recruitment 
improving the capability of the team. Project results have improved 
and service revenues have improved significantly over 2013.
In the Nordics, the services team continue to build on the success of 
their Planning Academy Consulting proposition. The success of this 
programme has resulted in non-product-related services revenue 
rising to a material proportion of Nordics services revenue and is a 
key contributor to the fourth consecutive year of Nordics revenue and 
profit growth.
There is now positive momentum in our services business and we are 
confident that 2015 will bring further improvements in revenue, delivery 
and margins.
Products
Product strategy is focused on strengthening our key differentiators 
and enabling easier adoption of additional applications.
Allocate’ s current portfolio of Healthcare products has been designed 
and developed specifically to enable healthcare organisations to make 
significant real-time efficiency gains whilst at the same time ensuring 
the appropriate level of care is provided to patients. The market’ s 
appetite and confidence in our products is demonstrated by the 90% 
competitive win rate for HealthRoster over the year and 100% renewal 
rates. Allocate’ s reputation in the UK has positioned the Company well 
for further international growth and following the strong adoption of 
HealthRoster V10 in the UK, in 2014, the Company is deploying V10 
into the Swedish market. 
A majority of Allocate’ s customers initially enter into a contract with 
the Company for one of our four core products. The development 
of the Allocate Cloud has enabled our customers to benefit from 
additional solutions and applications. Future services to be offered to 
Cloud customers could address customer needs in the area of data 
management.
Chief Executive Officer’s report and  
business review continued 10
Our Balance Sheet and cash generation are again very 
strong and this gives us the confidence as well as the 
capacity to invest further in a strategy that is proving 
successful.
I would like to add my personal thanks to two of my 
colleagues who plan to leave the Company during our next 
financial year.
Chris Gale, our CFO, is leaving us after four and a half years.
His contribution to the evolution of the business model has 
been significant and he leaves behind a strong team that 
will carry the business through the next stage of our growth. 
I wish him every continued success for the future.
T erry Osborne, who plans to retire later this year, has been 
Chairman for nine years and has had a very significant 
impact on the business. He has provided constructive 
challenge to the executives, run a very effective board and, 
at the same time, he has been a great personal member.
On behalf of the Board and the broader team, I thank them 
both for thier contributions to our success.
Whilst I remain confident about the prospects for Allocate 
in 2015 there are challenges that we will continue to face 
as we drive the business forward. I remain confident that 
as a team we can face up to both the challenges and 
opportunities presented and look forward to another 
successful year.
Our success is predicated on the collaborative 
relationships we develop with our customers and would 
not be possible without the support of our partners and 
the outstanding international team at Allocate. Thank you 
all for the ongoing support and commitment, which we 
never take for granted.
Ian Bowles
Chief Executive Officer
18 July 2014
Strategic priorities for 2015
• Drive success of the Allocate Cloud and SafeCare
• Secure 100% HealthRoster licence renewals
• Maintain growth trajectory in Nordics and Australia
• Upgrade 85% of the HealthRoster installed base to HealthRoster V10
• Drive operating margin expansion through operating efficiencies and improved return on investments
Allocate is committed to investing in R&D to maintain 
and extend its market position. Mobile applications 
utilising tablet and mobile devices across our core 
applications is now a key focus. During the period, the 
Company launched SafeCare Mobile which is changing 
the way healthcare organisations manage the day to 
day requirements of complex staff deployment in their 
organisations, enabling staff to record information and 
review data in real time at the point of care. 
Organisation
The number of employees at the end of the year was 296 
(2013: 305). This slight fall in headcount is a reflection of 
the Company’ s increased focus on productivity and margin 
improvement.
Outlook and future developments
2015 will be another significant year for Allocate. 
The priority is to drive further growth in the Healthcare 
business, principally by accelerating both Cloud and 
SafeCare adoption to support our customers and 
prospects as they respond to the NHS safe staffing agenda.
The demand for Allocate’ s products is clear and evidenced 
by the fact that we closed 2014 with very high levels 
of customer interest and engagement in all of the 
applications in HealthSuite.
Our V10 migrations were capacity constrained in 2014, but 
we have now overcome these challenges and we have the 
resources in place required to migrate at least 85% of our 
customer base to V10 in 2015.
Our overseas businesses continue to grow and they remain 
strong. We look forward to another positive year in these 
territories.
Operating margin expansion in 2015 is an important 
priority. We have expanded margins in 2014 by four 
percentage points and we are confident that we will see 
a further, albeit smaller, improvement in 2015, driven 
principally by improved services margins and by improved 
efficiency in R&D.
Chief Executive Officer’s report and  
business review continued Allocate Software plc
Annual Report and Accounts 2014
11
Overview
Strategic Report
Governance
Financial Statements
Company Information
Capability
At Allocate we are focused on developing market-leading 
solutions for complex workforce management. We are 
highly successful and continue to develop in our chosen 
markets. However, the base for our future growth has been 
firmly established in our nurse rostering portfolio in the UK, 
Australia and the Nordics.
We are now focusing on the next stage of the strategy to 
bring greater operational efficiency, reduced avoidable costs 
and help improve patient outcomes through the automation 
of people centred systems and processes to our extensive 
healthcare customer base. 
We are already seeing significant uptake of SafeCare, our 
safe staffing mobile application which is enabling care 
staff to dynamically assess the level and skill set of staffing 
required to meet patients actual needs using mobile devices. 
While medics make less than 30% of a healthcare workforce 
they account for more than 50% of the salary bill. With 
the success of HeathRoster for nursing and allied health 
professionals, customers are now looking for similar 
efficiencies to be realised for the medical workforce. We 
already see good sales volumes from our HealthMedics 
portfolio and anticipate continued growth across our 
installed base and the wider market. 
Fundamental to the evolution of our products is the 
extensive collaboration that we have with our customer 
base. We apply our approach to software development 
and supporting services design to deliver the best-in-class 
solution that enables operational efficiency and therefore 
financial savings for our customers.
Geography
We are the market leader in three key territories, UK, 
Australia and the Nordics with our nurse roster product 
portfolios. 2014 saw significant shift in focus for rostering 
in the NHS. While cost control remains imperative for all 
healthcare economies there is now increased regulatory 
pressure to ensure staff levels are appropriate to ensure 
required patient care. Allocate have been able to work 
with the market and regulators to understand the system 
and reporting requirements and respond with a solution 
“SafeCare” to support our customers fulfilling the centrally 
mandated requirement. 
We are also seeing similar opportunities to innovate in 
Australia and the Nordics using HealthRoster V10 in the 
existing base and new accounts driven by a need to identify 
efficiencies and manage the growing cost of healthcare more 
effectively. HealthRoster has also been translated into the first 
non-English language, Swedish, and we are working with our 
first Swedish customer to implement the software. 
Development strategy
Our development strategy delivers complementary 
applications that build on the success and performance 
of the existing portfolio. Our philosophy is to ensure we 
develop best-in-class solutions that enable greater efficiency 
and assurance to be realised by our customers. The journey 
is towards an integrated suite of products and applications 
that draws data and information from across the suite 
delivering unparalleled insight and operational efficiency to 
our customers.
Acquisition strategy
Our acquisition strategy continues to focus on four key 
priorities: Complementary applications that enable us to 
extend our differentiation and deliver enhanced value to 
our customers; Organisations that enable international 
expansion though existing market presence in new 
geographical locations; Cross selling opportunities of our 
current portfolio into new markets; and Recurring revenue 
products that enhance the quality of our earnings. 
Strategic priorities for 2015 include:
• Accelerate HealthRoster V10 adoption in Australia and 
the Nordics
• Maintain growth trajectory of Cloud and Medics
• Secure 100% HealthRoster licence renewals
• Maintain growth trajectory in Nordics
• Upgrade identified HealthRoster V9 installed base to 
HealthRoster V10
• Drive margin expansion through operating efficiencies 
and improved return on investments
Chief Executive Officer’s report and  
business review continued
Our strategy for growth
At the NHS Confederation’s Annual Conference and Exhibition 
(CONFED) the Rt Hon Jeremy Hunt MP , Secretary of State for Health, 
pictured with Ian Bowles, Chief Executive Officer, and other members 
of the Allocate team. 12
“UK Healthcare revenues have 
grown 19% over 2013 driven 
principally by increases in 
revenue from the Cloud and 
from HealthRoster renewals.”
Financial report 
Revenue in the financial year was £40.0m (2013: £37.1m), 
an increase over the prior year of 8%, all organic. EBITDA 
was £6.9m and 17% of revenue (2013: £4.8m and 13% of 
revenue) an increase in value of 44% and four percentage 
points in margin over the prior year. 
Diluted adjusted EPS (excluding amortisation of 
intangibles, impairment, share-based payments, 
acquisition costs and non recurring costs, adjusted for tax) 
was 9.0p (2013: 5.6p) a 61% increase over the prior year. 
The growth in EPS reflects a tax credit to this year’ s income 
statement, driven by the tax benefits of significant R&D tax 
credits as well as the exercise of stock options.
Recurring revenue increased by £1.2m or 7% to £18.8m 
and 47% of total revenue (2013: £17.6m and 47%). Within 
recurring revenue, subscription revenue grew by 13% 
to £7.1m (2013: £6.3m) and support and maintenance 
increased by 3% to £11.6m (2013: £11.3m).
 
Healthcare revenue in the period increased by 18% to 
£34.7m, all organic, (2013: £29.3m), driven largely by the 
growth of repeatable revenues and by growth in Nordics. 
Defence revenues were £3.6m (2013: £5.0m). Maritime 
revenue was £1.7m (2013: £2.8m). 
UK Healthcare revenues have grown 19% over 2013 driven 
principally by increases in revenue from the Cloud and 
from HealthRoster renewals.
T otal costs in 2014 were £33.1m (2013: £32.2m) an increase 
of 3% or £0.9m.This is the smallest increase in costs for 
several years and has been achieved in spite of increases 
in elements of variable costs such as Cloud hosting and 
services. 
 
EBITDA margins were 17% (2013: 13%), growth of four 
percentage points driven principally by improvements 
in the core UK Healthcare market. Gross margin has 
improved by one percentage point and total operating 
expenses as a percentage of revenue have improved  
by three percentage points. Profit before tax rose to £2.9m 
(2013: loss £2.4m).
Cash generated from operations was £5.9m (2013: £8.7m). 
This result has been principally driven by £1.6m increase 
(2013: £1.6m reduction) in trade and other receivables, 
reflecting increased revenues notwithstanding a reduction 
in Days Sales Outstanding to 60 days (2013: 64 days) driven 
not only by tight management but also influenced by high 
levels of customer satisfaction.
The total acquisition-related cash spending was nil (2013: 
£1.9m), dividend paid in the year was £0.7m (2013: £0.7m), 
shares purchased for the LTRP were £0.1m (2013: £0.6m), 
capital expenditure was £1.3m driven by the office moves 
and by Cloud (2013: £0.5m) and cash proceeds from 
exercise of stock options was £2.2m.
T axes paid were £1.0m (2013: £0.7m), the increase arising 
in Sweden and Australia. We paid no taxes in the UK as a 
result of losses brought forward, R&D tax credits and the 
tax offset benefit of the stock option exercises. The overall 
corporate tax rate this year is a tax credit. In future years 
the Company anticipates that its overall tax rate will be in 
the range of 15%-20%.
Deferred income was £14.8m an increase of £0.2m (2013: 
£14.6m). This modest increase masks an increase of £1.5m 
in the current year deferred revenue for UK Healthcare 
subscriptions which is offset by lower long-term deferred 
revenue from lower non-current subscription billings.
In summary, after taking into account the above, closing 
net cash on the Statement Of Financial Position was 
£13.7m (2013: £9.1m). 
As previously stated, we propose to pay a dividend in 
respect of the full financial year of 1.45 pence per share 
(2013: 1.32 pence). 
Chris Gale 
Chief Financial Officer 
18 July 2014
Chief Financial Officer’s review
Chris Gale Chief Financial Officer Allocate Software plc
Annual Report and Accounts 2014
13
Overview
Strategic Report
Governance
Financial Statements
Company Information
2014
2013
2012
2011
2010
2014
2013
2012
2011
2010
2014
2013
2012
2011
2010
2014
2013
2012
2011
2010
2013
2012
2011
2010
2014
2013
2012
2011
2010
2014
2013
2012
2011
2010
2014
2013
2012
2011
2010
Total Revenue £m
Recurring Revenue £m
Licence and Subscription Revenue £m
EBITDA £m EBITDA % of Revenue
Healthcare Revenue £m
Cash Generated from Operations £m
22.0
30.1
36.6
37.1
40.0
16.8
19.3
17.5
12.9
17.3
6.9
11.5
15.6
17.6
18.8
14.8
23.1
29.3
34.7
26.7
9.3
13.3
15.8
16.0
4.9
5.9
5.4
8.7
5.9
3.7
5.8
6.4
4.8
6.9
Repeatable Revenue £m
11.3
14.0
17.1
22.8
26.5
Key performance indicators
The following financial and non-financial KPI’s are used by the board and management to monitor the performance of the business:
Financial KPIs
Non-financial KPIs
Major Product Volumes
Year ended 
31 May 2014
Year ended 
31 May 2013
HealthRoster (New Customers) 16 16
HealthRoster (Renewal Customers) 36 19
HealthMedics 23 37
Allocate Cloud 39 24
SafeCare 33 4
All of the non-financial indicators above met or exceeded management expectations.  14
Risk: Mitigation:
Customer retention and competition
The risk is the loss of customers to competitors. The Company has a sales team appropriately staffed and structured to maintain 
good customer relationships. In addition, senior managers of the Company, 
including Executives, have frequent customer contact, not only through personal 
visits, but also at events, both Allocate customer centred and also industry wide.  
The Company has invested and continues to invest considerable resource in 
research and development in order to keep its products competitive with or ahead 
of others in the market. The Company also invests in customer support and closely 
monitors customer support satisfaction metrics on a regular basis.
Product quality and services delivery
The risk is a fall in product quality or level of customer service  
leading to a fall in customer satisfaction.
The Company frequently monitors customer-level product feedback at meetings 
of its senior management team. Should a significant product quality or customer 
service problem arise, a senior manager leads a process with the customer and the 
appropriate resources within the Company to resolve the matter in a timely and 
satisfactory way.
Product development and intellectual property
The risk is infringement of the Company’ s IPR, or the Company  
could inadvertently infringe the IPR of a third party.
The Company’ s sales and marketing teams are constantly monitoring the products 
offered by the Company’ s competitors. Should a competitor offer a product that 
could have infringed the Company’ s IPR, management and, if appropriate, the 
Board would be alerted to the situation and appropriate actions to remediate 
would then be discussed and put in place. 
Senior management in R&D closely monitor code used in the development 
of the Company’ s products and ensure that the Company is not inadvertently 
incorporating code that would run the risk of infringing the IPR of a third party.
Forecast and pipeline 
The risk is a lowering of the forecast as a result of a fall in  
the pipeline.
The Board regularly and senior management frequently, review the sales pipeline 
from all territories and markets and closely monitor any changes. Should significant 
changes in the pipeline and forecast occur, senior management would then put 
in place appropriate changes to operating plans to take account of the forecast 
change.
Cost management
The risk is that costs exceed expected levels. The Board and senior management regularly review the forecast of all costs within 
the Company, by function and territory with particular focus on headcount levels 
and their impact on margins.
Business systems 
The risk is a failure in either customer facing or internal business  
systems that impairs the Company’ s ability to transact business.
The Company has invested in centralised IT and business systems resource as 
well as Finance resource. These groups closely monitor the performance of the 
systems. In addition, the Company has in place agreements with reputable third 
parties for the back-up of the systems, should a catastrophic failure occur.
ESR Contract 
The risk is brought about by the re-tendering of this contract. The 
Electronic Staffing Record (ESR) system is the central staffing record 
and payroll system of the NHS. The system has been managed for  
a number of years by McKesson International. This year the contract 
for the management of the system is being retendered. McKesson 
will not be renewing their management of the system so therefore 
ESR will be managed by a new vendor from calendar year 2015. 
Allocate’ s HealthRoster system integrates with ESR. This integration  
is an important part of the functionality of HealthRoster. 
Whilst the Board do not anticipate any change to ESR as a result of the contractual 
change, the possibility exists that some additional engineering work may be 
required for HealthRoster to integrate with ESR in the future.
The information on pages 2 to 14 represents the Strategic report and has been approved by the Board.
I J Bowles
Chief Executive Officer
18 July 2014
Risk management Allocate Software plc
Annual Report and Accounts 2014
15
Overview
Strategic Report
Governance
Financial Statements
Company Information
Board of Directors
Terry Osborne
Chairman
T erry joined as the Company’ s Chairman 
in October 2005. He enjoyed a 
distinguished career with IBM over the 
period 1961 to 1987, where he held 
vice president positions in Europe 
and the USA. He was also a Director 
of IBM UK. In 1987, he founded SSA 
Ltd, a technology company, and was 
President of SSA Inc for the period 
1994 to 1996. Mr Osborne has served 
on the boards of several technology 
companies in both the USA and Europe, 
including Chairman of Dr Solomon’ s 
Group plc, Prime Response Inc and 
Eyretel plc. He was also a Director of 
Mapics Inc, Dendrite International Inc 
and Witness Inc, and spent seven years 
as a Special Advisor to General Atlantic 
Partners LLC.
Ian Bowles
Chief Executive Officer
Ian joined as Chief Executive Officer 
in May 2007. Previously he was Chief 
Operating Officer at Clearswift Limited, 
a leading e-mail content security 
company, where he was responsible 
for Worldwide Operations including 
sales and marketing in the UK, Europe, 
USA, Japan and Asia Pacific, as well as 
the company’ s Professional Services, 
Customer Support and worldwide IT 
infrastructure. Prior to this he held senior 
positions at Interwoven Inc as Vice 
President EMEA, Chordiant Inc as Vice 
President International and Oracle UK as 
General Manager.
Chris Gale
Chief Financial Officer
Chris joined as Chief Financial Officer 
(CFO) in February 2010 and has held 
senior financial roles in international 
public companies within the IT industry 
including: Apple Inc (in USA & European 
HQ), Cooper and Chyan T echnology Inc 
(USA), Cadence Design Systems (USA 
& Europe), Interwoven and Clearswift 
(UK). In his most recent corporate role, 
Chris was CFO and acting CEO of GFI, 
a global software and hosted solutions 
company. Chris is also Treasurer on the 
Board of Trustees of Picker Institute 
Europe, a healthcare charitable 
institution, whose goal is improvements 
in patient care.
Allen Swann
Business Development Director 
Allen joined as Business Development 
Director in June 2008, having previously 
acted as an adviser to the Company. 
Prior to his appointment, Allen served 
as International President for Chordiant 
Software Inc, International President of 
Prime Response Inc and was a founder 
member of Oracle UK, where he served 
as Sales Director both direct and non-
direct for 12 years. Since 2008 Allen has 
served as a NED of Solid T echnology 
Inc, which was sold to IBM, Chairman 
of CopperEye Limited, and NED of 
Chordiant Software Inc, which was sold to 
Pega Software Inc.
Andrew Pringle
Non-Executive Director
Andrew joined as a Non-Executive 
Director in March 2004. Previously, 
he was Chief of Staff at the UK’ s 
Permanent Joint Headquarters 
(“PJHQ”), responsible for the direction of 
all UK military operations jointly carried 
out by the three armed services (Army, 
Navy, Air Force). He retired in 2001 with 
the rank of Major General. Previously, 
Andrew had been commissioned 
into The Royal Green Jackets and 
commanded military operations at every 
level from Platoon to Division, both 
for the UK Army and for multi-national 
forces overseas. Andrew has served in 
the Ministry of Defence, the Assessments 
Staff of the Joint Intelligence Committee 
and, while at PJHQ, three years at the 
heart of the planning and conduct of UK 
operations worldwide, including Bosnia, 
Kosovo, Albania, Macedonia, Iraq, East 
Timor and Sierra Leone.
Dr. Graham Rich
Non-Executive Director
Graham joined as a Non-Executive 
Director in December 2013. He is 
currently Director of Health Services 
at the Boston Consulting Group 
and is a co-founder of CareT echnica 
Ltd, a company focusing on the 
commercialisation of medical 
technology. Graham was previously Chief 
Executive at University Hospitals Bristol 
NHS Foundation Trust and has also been 
Chief Executive of a PCT . He has also 
previously worked on national policy 
formulation and implementation at the 
Department of Health. His international 
experience includes health policy 
formulation and management consulting 
in the USA.
Richard King
Non-Executive Director
Richard joined as a Non-Executive 
Director in January 2011 following his 
retirement, after 35 years, from Ernst & 
Young where he was Deputy Managing 
Partner of UK & Ireland and a member 
of the EMEIA Board. During his career 
with Ernst & Young Richard specialised  
in advising fast growth businesses or 
those going  through periods of rapid  
change.  Richard is currently Chairman 
of The Willow Foundation, Corac 
plc and The Grass Roots Group plc. 
He is also a member of the advisory 
Board for Frogmore Property Group 
and an advisory partner for Rockpool 
Investments LLP .
Dr Lynn Drummond
Non-Executive Director
Lynn joined as a Non-Executive  
Director in October 2012. She is the  
Non-Executive Chair at Venture Life 
Plc and InFirst Healthcare Limited, 
both of which are consumer healthcare 
companies. In addition, she is a Non-
Executive Director at Shield Holdings 
AG a speciality mineral medicines 
pharmaceutical company. Lynn is a  
Non-Executive Director and a member of 
the Audit and Nomination Committees 
at the healthcare company, Consort 
Medical Plc.  16
The Directors present their annual report on the affairs of Allocate Software plc and its subsidiaries (the Group), together with the 
audited accounts and auditor’s report for the year ended 31 May 2014.
Certain information required by the Companies Act 2006 relating to the information to be provided in the Directors’ report is set  
out in the Strategic report and includes: principal activity, future developments, events after the reporting period and principal risks  
and uncertainties.
RESULTS AND DIVIDENDS
As an indication of their confidence in the business, the Directors are pleased to propose a dividend in respect of the full financial year 
of 1.45 pence per share.
The audited accounts for the year ended 31 May 2014, which comprise the consolidated income statement, the consolidated statement 
of comprehensive income, the statements of financial position, the statements of changes in equity, the cash flow statements and the 
related notes, are set out on pages 24 to 59. The Group profit for the year after tax amounted to £3,440,000 (2013: £1,433,000 loss). 
DIRECTORS
T H Osborne (Executive Chairman)
1
I J Bowles (Chief Executive Officer) 
C D Gale (Chief Financial Officer) 
A A Swann (Business Development Director) 
J I Lang (Non-Executive Director)
2
 (Resigned 26 November 2013)
A R D Pringle (Non-Executive Director)
3
R W King (Non-Executive Director)
3 
L Drummond (Non-Executive Director)
2
G F Rich (Non-Executive Director) (Appointed 1 December 2013)
1  Member of the Nomination Committee only
2  Member of the Audit Committee and Remuneration Committee
3  Member of the Audit Committee, Remuneration Committee and Nomination Committee
Terry Osborne has informed the Board of his intention to step down from his post at a date to be confirmed later in 2014. 
In February, Chris Gale announced his intention to step down from his post after the release of the 2014 year end results in July 2014. 
DIRECTORS AND THEIR SHAREHOLDINGS
The Directors who served during the year and their interests in the shares of the Company, held directly or indirectly on behalf of the 
Directors, as recorded in the register of Directors’ interests were as follows:
5p ordinary shares
At 31 May 
2014
At 1 June
 2013
T H Osborne 403,517 50,000
I J Bowles 802,730 348,500
C D Gale 65,429 13,000
A A Swann 276,118 1,119,000
J I Lang n/a 566,437
A R D Pringle 7,190 7,102
R W King 50,000 50,000
L Drummond – –
G F Rich – n/a
Details of Directors’ interests in options to acquire shares of the Company are set out in remuneration section of this report.
The Board has resolved to comply with the provisions of the UK Corporate Governance Code concerning the annual election of 
Directors. Accordingly, all Directors intend to seek re-election at this year’s Annual General Meeting with the exception of Chris Gale, 
Chief Financial Officer who is retiring.
Directors’ report Allocate Software plc
Annual Report and Accounts 2014
17
Overview
Strategic Report
Governance
Financial Statements
Company Information
SUBSTANTIAL SHAREHOLDINGS
At 30 June 2014 notification had been received of the following interests that exceed a 3% interest in the issued share capital of the 
Company, in addition to those of the Directors referred to above.
Name of holder Number
% of issued 
share capital
Herald Investment Management 10,536,477 15.43
Artemis Fund Managers 8,917,530 13.06
Kabouter Management LLC 7,690,108 11.26
Hargreave Hale 6,686,712 9.79
GVO Investment Management 5,691,535 8.33
BlackRock Investment Management (UK) 4,283,235 6.27
Fidelity Worldwide Investment 4,269,465 6.25
Jupiter Asset Management 2,804,104 4.11
Henderson Global Investors 2,339,295 3.43
RELATIONS WITH SHAREHOLDERS
The Company encourages two-way communications with both institutional and private investors and responds promptly to queries 
received. All shareholders have at least 21 working days’ notice of the Annual General Meeting. The Directors and Committee Chairs are 
introduced and are available for questions at the Annual General Meeting. Every shareholder receives a full annual report each year-
end. The preliminary and interim results are published by the Regulatory News Service and on the Company’s web site.
Care is exercised to ensure that any price sensitive information is released to all shareholders, institutional and private, at the same time 
in accordance with the Financial Services Authority’s requirements.
GOING CONCERN BASIS
After review of the 2014 financial statements as well as the approved business plan for 2015 and cash flow forecasts for 2015, the 
Directors have formed the view, at the time of approving the accounts, that there is a reasonable expectation that the Group has 
adequate resources to continue in operational existence for the foreseeable future. For this reason the Directors continue to adopt the 
going concern basis in preparing the accounts.
EMPLOYEES
During the year, the Group has continued to provide employees with relevant information and to seek their views on matters of common 
concern. Priority is given to ensuring that employees are aware of significant matters affecting the Group’s trading position and 
organisational changes, subject to Stock Exchange and other disclosure requirements.
It is the policy of the Group to support the employment of disabled employees where possible, both in recruitment and by retention of 
employees who become disabled while in the employment of the Group.
FINANCIAL RISK MANAGEMENT
The Company uses various financial instruments, which include loans, cash and other items such as trade debtors and trade creditors 
that arise directly from its operations. The main purpose of these financial instruments is to raise finance for the Company’s operations.
The existence of these financial instruments exposes the Company to a number of financial risks. These are currency risk, liquidity risk, 
interest rate risk and credit risk. The Directors review and agree policies for managing each of these risks and they are summarised 
below. These policies have remained unchanged from previous years.
CURRENCY RISK
The Company is exposed to translation and transaction foreign exchange risk. In relation to translation risk, so far as possible, the assets 
held in the foreign currency are matched to an appropriate level of borrowings or liabilities in the same currency. 
Approximately 41% (2013: 45%) of the Group’s sales are to customers overseas and in currencies other than UK sterling. The Company’s 
policy is to try to match the timing of all foreign currency transactions to eliminate, so far as possible, currency exposures. Foreign 
exchange differences on transactions relating to foreign currency assets and liabilities are taken to the income statement of the Group. 
The table below shows the net amount of foreign currency assets and liabilities, which expose the Group to foreign exchange risk. 
Swedish
Krona
Australian
Dollars
US 
Dollars Other
£’000 £’000 £’000 £’000
2014 535 1,124 890 525
2013 1,299 470 2,054 687 18
Directors’ report continued
LIQUIDITY
The Company seeks to manage financial risk by ensuring sufficient liquidity is available to meet foreseeable needs and to invest cash 
assets safely and profitably. During the year the Company fully repaid its borrowings of £4m. As such, the Company now has no bank 
facilities in place.
A cash forecast is updated regularly and provided to the Board quarterly in order to monitor the Group’s medium term cash position 
and to identify funding requirements as appropriate.
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Strategic report, the Directors’ report and the financial statements in accordance with 
applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to 
prepare the financial statements in accordance with International Financial Reporting Standards as adopted by the European Union 
(IFRSs). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and 
fair view of the state of affairs and profit or loss of the Company and Group for that period. In preparing these financial statements, the 
Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgments and accounting estimates that are reasonable and prudent; and
• state whether applicable IFRSs have been followed, subject to any material departures disclosed and explained in the financial 
statements. 
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s 
transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that 
the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company 
and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors confirm that: 
• so far as each Director is aware, there is no relevant audit information of which the Company’s auditor is unaware; and
• the Directors have taken all the steps that they ought to have taken as Directors in order to make themselves aware of any relevant 
audit information and to establish that the auditors are aware of that information.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s 
website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from 
legislation in other jurisdictions. 
AUDITOR
Grant Thornton UK LLP has offered to be reappointed as auditor in accordance with section 489 of the Companies Act 2006.
BY ORDER OF THE BOARD
C D Gale
Company Secretary
18 July 2014 Allocate Software plc
Annual Report and Accounts 2014
19
Overview
Strategic Report
Governance
Financial Statements
Company Information
REMUNERATION POLICY
The policy of the Group is to provide levels of remuneration that attract, motivate and retain Executive Directors of the high calibre 
required to achieve the Group’s demanding profitability and growth objectives and to reward them for enhancing shareholder value. 
The main elements of the remuneration package for Executive Directors and senior management are:
• Basic annual salary;
• Annual performance-related bonus;
• Pension contribution and benefits in kind;
• Share option awards; and 
• A Long-Term Retention Plan for the CEO
DIRECTORS’ REMUNERATION
Basic annual salary
Salaries and bonuses are reviewed annually at the start of each financial year. Salaries are paid as a fixed cash sum monthly. They are 
designed to be competitive with salaries for similar levels of responsibility and achievement in comparable companies. 
A 3% increase in basic salary was awarded in 2014. A 3% increase for the Executive Directors is planned for 2015.
Annual performance-related bonus
The Company’s policy is that a substantial proportion of the remuneration of Executive Directors should be performance related. The 
total bonus pool is related to the total planned profit for the year.
The bonus elements are dependent on the Executive Directors achieving performance criteria set out by the Remuneration Committee. 
In 2014 the bonus was dependent on meeting demanding half yearly revenue and profit plans. 
For 2015 the bonus will be dependent on meeting demanding half yearly revenue and profit plans.
Pension contribution and benefits in kind
I J Bowles and A A Swann receive a pension contribution of 10% of basic salary. I J Bowles, A A Swann and C D Gale receive benefits in 
kind of car allowance, private medical cover and life cover. The value of the pension contributions and benefits in kind is shown in the 
table of Directors’ remuneration on page 20 and 21.
SHARE OPTIONS
Share Option Plans
During the year ended 31 May 2014 there were five option schemes in operation: the Manpower Software plc Unapproved Executive 
Share Option Scheme; the Manpower Software plc Enterprise Management Scheme (an EMI scheme); the Allocate Software 2010 
Executive Share Option Scheme (a CSOP scheme); the Allocate Software 2010 Unapproved Share Option Scheme; and the Allocate 
Software plc 2014 Bonus Option Scheme. With the exception of the Allocate Software 2014 Bonus Option Scheme, the options vest 
three years after award conditional on meeting earnings per share (“EPS”) targets. The options in the Allocate Software 2014 Bonus 
Option Scheme vest one year after award and are not conditional on earnings per share targets.
During the year ended 31 May 2014, the Board decided to revise the EPS targets for options granted after 1 January 2011. The targets 
have been reduced to reflect the transition of the business model to one where a greater proportion of revenues are recurring resulting 
in a slower growth in earnings per share. Please see further details in Note 18 of the Financial Statements on page 51.
During 2012, the Company announced that the Board had, following consultation with the Company’s major shareholders, established a 
new long-term incentive and retention plan (“LTRP”) for its CEO, I J Bowles (the Allocate Software plc 2011 Long-Term Retention Plan). 
Remuneration report 20
Remuneration report continued
Under this plan, I J Bowles was awarded 1,000,000 nil-price options over Ordinary Shares in the Company which will vest between 
September 2014 and September 2016 subject to (a) the Company’s earnings per share increasing at or above a 15% annual compound 
growth rate and (b) a demanding absolute total shareholder return target against which options will vest on a sliding scale. 20% of the 
options will vest at a 15% annual compound total shareholder return (TSR) and the options will vest in full at or above a 25% annual 
compound TSR. Subject to the meeting of the performance criteria and to continuing employment, 600,000 options will vest in 
September 2014 and a further 200,000 in each of September 2015 and September 2016. No consideration was paid for the grant of the 
options. The Company will continue to operate within its 15% rolling dilution limit. The plan entails the use of a trust so that existing 
issued shares can be purchased by the trustee in the market to satisfy any exercise of options.
During 2014 the Remuneration Committee made changes to the EPS and TSR growth targets of the LTRP to better reflect the impact on 
profit growth of the Company’s higher than anticipated increase in subscription revenue, triggered by the accelerating transition to 
recurring revenue, something that was not entirely anticipated when the LTRP was first put in place. Further details are set out in note 18 
of the Financial Statements on page 52.
The current holdings by Directors of options are shown in the table below:
At 1 June 
2013
Granted 
in the year
Exercised in 
the year
Lapsed 
in the year
At 31 May 
2014
T H Osborne 550,000 – (550,000) – –
I J Bowles 2,600,000 150,000 (1,600,000) – 1,150,000
C D Gale 700,000 – (500,000) – 200,000
A A Swann 700,000 100,000 (500,000) – 300,000
A R D Pringle 50,000 – – (50,000) –
4,600,000 250,000 (3,150,000) (50,000) 1,650,000
DIRECTORS’ DETAILED EMOLUMENTS AND REMUNERATION PACKAGES (AUDITED)
The remuneration of the directors was as follows: 
For the year ended 31 May 2014
Salary/Fees
£’000
Bonus
£’000
Benefits
£’000
Total
£’000
Pension
£’000
Gain on 
exercise of 
options
£’000
Executive Directors
I J Bowles 285 200 1 486 27 921
C D Gale 176 106 1 283 – 154
T H Osborne 45 33 – 78 – 396
A A Swann 196 190 1 387 20 336
Non-Executive Directors
J I Lang 15 – – 15 – –
A R D Pringle 25 – – 25 – –
R W King 33 – – 33 – –
L Drummond 33 – – 33 – –
G F Rich 15 – – 15 – –
823 529 3 1,355 47 1,807 Allocate Software plc
Annual Report and Accounts 2014
21
Overview
Strategic Report
Governance
Financial Statements
Company Information
For the year ended 31 May 2013
Salary/Fees
£’000
Bonus
£’000
Benefits
£’000
Total
£’000
Pension
£’000
Gain on 
exercise of 
options
£’000
Executive Directors
I J Bowles 278 115 1 394 26 –
C D Gale 169 61 1 231 3 –
T H Osborne 45 19 – 64 – –
A A Swann 158 105 1 264 17 –
Non-Executive Directors
J I Lang 30 – – 30 – –
M J S Loveland 4 – – 4 – –
A R D Pringle 25 – – 25 – –
R W King 30 – – 30 – –
L Drummond 18 – – 18 – –
757 300 3 1,060 46 –
DIRECTORS’ SERVICE CONTRACTS
Executive Directors Contract date Unexpired term Notice period
I J Bowles 01 May 2007 Rolling 12 months
C D Gale 15 Feb 2010 Rolling 6 months
A A Swann 01 Jul 2008 Rolling 3 months
OTHER MATTERS
I J Bowles has a service agreement which is terminable upon 12 months notice. All other Directors have service contracts which are 
terminable upon six months notice except for A A Swann on three months notice. There is no contractual provision for compensation for 
early termination of any of the Directors’ contracts.
Chris Gale will not be seeking re-election at this year’s Annual General Meeting.
T H Osborne (Executive Chairman), A R D Pringle, R W King, L Drummond and G F Rich (Non-Executive Directors) monitor the actions of 
management and the Group’s performance. Other than their shareholdings, options and remuneration they have no other relationship 
with the Company or its subsidiaries. Together, they bring a complementary set of skills and experience to the Board.
Communication with shareholders on remuneration matters is largely undertaken by way of this report.
Executive Directors are permitted to accept external directorships only with the Company’s prior permission and provided their ability 
to act in the best interest of the Group is not impaired. 22
As an AIM listed company, there is no requirement to comply with the UK Corporate Governance Code or the Turnbull Guidance.
In applying the principle that the Board should maintain a sound system of internal control to safeguard shareholders’ investments and 
the Group’s assets, the Directors recognise that they have overall responsibility for ensuring that the Group maintains proper accounting 
records and a system of internal control to provide them with reasonable assurance regarding effective and efficient operations, internal 
financial control and compliance with laws and regulations. However, there are inherent limitations in any system of internal control and, 
accordingly, even the most effective system can provide only reasonable, and not absolute, assurance particularly against misstatement 
or loss.
BOARD RESPONSIBILITIES
The Board has adopted a formal schedule which sets out the various matters for which it is responsible and that are reserved to it. The 
Board meets regularly during the year and it met formally on five occasions, plus held six telephone meetings (principally for operational 
matters), during the period from 1 June 2013 to 31 May 2014.
The Board is responsible for the overall strategy and direction of the Group and for approving acquisitions and disposals, management 
performance, major capital and development expenditure and significant financial matters. It monitors exposure to key business risks 
and reviews the strategic direction of the Company and its subsidiaries, their annual budgets, their progress against those budgets and 
their development programmes. The Board also considers employee issues and key appointments.
The Board has established an Audit Committee, a Nomination Committee and a Remuneration Committee. Each Committee operates 
within defined terms of reference. 
The Audit Committee comprises R W King, A R D Pringle and L Drummond, Non-Executive Directors. 
The Nomination Committee comprises T H Osborne (Executive Chairman), A R D Pringle and R W King, Non-Executive Directors. 
The Remuneration Committee comprises R W King, A R D Pringle and L Drummond, Non-Executive Directors.
The Audit Committee is chaired by R W King, the Nomination Committee is chaired by T H Osborne and the Remuneration Committee 
is chaired by L Drummond. 
The Audit Committee is required to meet at least twice a year and its primary responsibilities include monitoring internal controls, 
approving the Group’s accounting policies and reviewing the interim and annual reports. 
Board meeting attendance has been as follows in 2014:
Board 
Meetings
Board
Calls~
Audit 
Committee
Meetings
Remuneration 
Committee
Meetings
Nomination 
Committee
Meetings
T H Osborne
1
4/5 6/6 2/2
I J Bowles 5/5 6/6
C D Gale 5/5 6/6
A A Swann 3/5 6/6
J I Lang
2#
2/3 4/5 1/1 2/2
A R D Pringle
3
2/5 6/6 1/4 4/6 2/2
R W King
3
5/5 6/6 4/4 6/6 2/2
L Drummond
2
 3/5 6/6 3/3 6/6
G F Rich* 2/2 1/1
1  Member of the nomination committee only
2  Member of the audit and remuneration committees
3  Member of the audit, remuneration and nomination committees
#  Resigned 26 November 2013
*  Appointed 1 December 2013
~  Six telephone meetings were held in the year, principally for operational matters
Clear management responsibilities have been determined for each subsidiary and division with authorisation limits and segregation of 
duties established for the operating functions of the Group. Financial reports are reported regularly to the Board with a comparison 
against budget in addition to quarterly income statement and cash forecasts. Towards the end of each financial year, the annual 
business plan, as well as appropriately detailed functional and business unit budgets for the following year, are reviewed by the Board.
REMUNERATION COMMITTEE 
The members of the Committee are Non-Executive Directors. The Company Chairman also attends on a regular basis.
During the year, the Committee has met formally on six occasions to review and agree Executive Directors’ basic salaries, annual 
bonuses and performance conditions, quarterly performance, award of bonuses and award of options.
The remuneration of the Non-Executive Directors is determined by the Board as a whole within limits set out in the Articles of Association.
Corporate governance report Allocate Software plc
Annual Report and Accounts 2014
23
Overview
Strategic Report
Governance
Financial Statements
Company Information
We have audited the financial statements of Allocate Software plc for the year ended 31 May 2014 which comprise the consolidated 
income statement, the consolidated statement of comprehensive income, the consolidated and company statements of financial 
position, the consolidated and company statements of changes in equity, the consolidated and company cash flow statements and the 
related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial 
Reporting Standards (IFRSs) as adopted by the European Union and, as regards the parent company financial statements,  
as applied in accordance with the provisions of the Companies Act 2006.
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. 
Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to  
them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility 
to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we  
have formed.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITOR
As explained more fully in the Directors’ Responsibilities Statement set out on page 18, the Directors are responsible for the preparation 
of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion 
on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards 
require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTS
A description of the scope of an audit of financial statements is provided on the Financial Reporting Council’s website at  
www.frc.org.uk/apb/scope/private.cfm.
OPINION ON FINANCIAL STATEMENTS
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at 31 May 2014  
and of the Group’s profit for the year then ended;
• the 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.
SEPARATE OPINION IN RELATION TO IFRSs AS ISSUED BY THE IASB
As explained in Note 1 to the group financial statements, the Group in addition to complying with its legal obligation to apply IFRSs  
as adopted by the European Union, has also applied IFRSs as issued by the International Accounting Standards Board (IASB).
In our opinion the Group financial statements comply with IFRSs as issued by the IASB.
OPINION ON OTHER MATTER PRESCRIBED BY THE COMPANIES ACT 2006
In our opinion the information given in the Strategic Report and Governance Report for the financial year for which the financial 
statements are prepared is consistent with the financial statements.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our 
opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received 
from branches not visited by us; or
• the Parent Company financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
David Miller
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
18 July 2014
Independent auditor’s report 
to the members of Allocate Software plc 24
Consolidated income statement
For the year ended 31 May 2014
Note
2014
 £’000
2013 
£’000
Support revenue 11,615 11,274
Subscription revenue 7,141 6,304
Total recurring revenue 2 18,756 17,578
Licence revenue 11,799 9,707
Service revenue 9,398 9,676
Other revenue 69 111
Total revenue 2 40,022 37,072
Costs of goods sold (11,374) (11,005)
Research and development (8,327) (7,482)
Sales, general and administration (13,405) (13,747)
Total costs before non-recurring,  acquisition, share-based payments, depreciation, amortisation, 
impairment, finance and tax costs (33,106) (32,234)
 EBITDA before non-recurring, acquisition, share-based payments, depreciation, amortisation, 
impairment, finance and tax costs 6,916 4,838
Non-recurring costs 4 (526) –
Acquisition costs 4 – (524)
Share-based payments 18 (506) (417)
Depreciation 10 (476) (431)
Amortisation 12 (2,407) (4,439)
Impairment 13 – (1,277)
Total costs (37,021) (39,322)
Operating profit/(loss) 3, 4 3,001 (2,250)
Finance income 32 49
Foreign exchange losses 4 (118) (69)
Finance charges (22) (115)
Net finance expense (108) (135)
Profit/(loss) for the year before taxation 3 2,893 (2,385)
Tax on profit/(loss) for the year 6 547 952
Profit/(loss) for the year 3,440 (1,433)
Earnings/(loss) per share
Basic (pence per share) 9 5.18p (2.26p)
Diluted (pence per share) 9 5.09p (2.26p)
Consolidated statement of  
comprehensive income
For the year ended 31 May 2014
2014
 £’000
2013 
£’000
Profit/(loss) per the income statement 3,440 (1,433)
Items that may be subsequently reclassified through profit or loss:
Exchange differences on translation of foreign operations (620) 678
Total comprehensive income/(loss) attributable to the owners of the Company 2,820 (755) Allocate Software plc
Annual Report and Accounts 2014
25
Overview
Strategic Report
Governance
Financial Statements
Company Information
Consolidated statement of financial position
As at 31 May 2014
Note
2014
 £’000
2013 
£’000
Assets
Non-current assets
Property, plant and equipment 10 1,572 868
Goodwill 11 6,928 7,280
Intangible assets 12 3,588 5,949
Deferred tax asset 15 1,423 861
Trade and other receivables 16 1,082 615
Total non-current assets 14,593 15,573
Current assets
Corporation tax receivable 166 93
Trade and other receivables 16 14,090 12,887
Cash and cash equivalents 13,659 13,134
Total current assets 27,915 26,114
Total assets 42,508 41,687
Equity and liabilities
Equity
Share capital 17 3,415 3,210
Share premium account 17 10,148 8,030
Own shares held 17 (720) (600)
Share-based payment reserve 18 1,958 1,452
Foreign exchange reserve 425 1,045
Retained earnings 3,628 1,062
Total equity 18,854 14,199
Non-current liabilities
Trade and other payables 21 2,396 2,817
Deferred tax liability 15 787 1,449
Total non-current liabilities 3,183 4,266
Current liabilities
Trade and other payables 21 20,184 18,832
Borrowings 19 – 4,000
Corporation tax 287 390
Total current liabilities 20,471 23,222
Total liabilities 23,654 27,488
Total equity and liabilities 42,508 41,687
The financial statements were approved by the board of Directors on 18 July 2014.
I J Bowles C D Gale
Director Director
Company no. 2814942 26
Company statement of financial position
As at 31 May 2014
Note
2014
 £’000
2013 
£’000
Assets
Non-current assets
Property, plant and equipment 10 1,045 393
Goodwill 11 9,176 9,176
Intangible assets 12 295 355
Investments 14 15,900 16,169
Deferred tax asset 15 1,291 691
Trade and other receivables 16 771 615
Total non-current assets 28,478 27,399
Current assets
Trade and other receivables 16 13,792 11,379
Cash and cash equivalents 8,510 9,049
Total current assets 22,302 20,428
Total assets 50,780 47,827
Equity and liabilities
Equity
Share capital 17 3,415 3,210
Share premium account 17 10,148 8,030
Own shares held 17 (720) (600)
Share-based payment reserve 18 1,958 1,452
Retained earnings 17,123 13,776
Total equity attributable to the owners of the Company 31,924 25,868
Non-current liabilities
Trade and other payables 21 2,396 2,721
Total non-current liabilities 2,396 2,721
Current liabilities
Trade and other payables 21 16,460 15,238
Borrowings 19 – 4,000
Total current liabilities 16,460 19,238
Total liabilities 18,856 21,959
Total equity and liabilities 50,780 47,827
The financial statements were approved by the board of Directors on 18 July 2014.
I J Bowles C D Gale
Director Director
Company no. 2814942 Allocate Software plc
Annual Report and Accounts 2014
27
Overview
Strategic Report
Governance
Financial Statements
Company Information
Consolidated statement of changes in equity
For the year ended 31 May 2014
Share 
capital 
£’000
Share 
premium 
account 
£’000
Own 
shares 
held 
£’000
Share-based 
payment 
reserve 
£’000
Foreign 
exchange 
reserve 
£’000
Retained 
earnings 
£’000
Total 
equity 
£’000
At 1 June 2012 3,192 7,908 – 1,035 367 3,258 15,760
Equity-settled share options 13 46 – 417 – – 476
Dividend 5 76 – – – (763) (682)
Purchase of own shares by EBT – – (600) – – – (600)
Total transactions with owners 18 122 (600) 417 – (763) (806)
Loss for the year – – – – – (1,433) (1,433)
Other comprehensive loss – – – – 678 – 678
Total comprehensive loss – – – – 678 (1,433) (755)
At 31 May 2013 3,210 8,030 (600) 1,452 1,045 1,062 14,199
Equity-settled share options 198 1,990 – 506 – – 2,694
Dividend 7 128 – – – (874) (739)
Purchase of own shares by EBT – – (120) – – – (120)
Total transactions with owners 205 2,118 (120) 506 – (874) 1,835
Profit for the year – – – – – 3,440 3,440
Other comprehensive income – – – – (620) – (620)
Total comprehensive income – – – – (620) 3,440 2,820
At 31 May 2014 3,415 10,148 (720) 1,958 425 3,628 18,854 28
Company statement of changes in equity
For the year ended 31 May 2014
Share 
capital 
£’000
Share 
premium 
account 
£’000
Own 
shares 
held 
£’000
Share-based 
payment 
reserve 
£’000
Retained 
earnings 
£’000
 Total 
equity 
£’000
At 1 June 2012 3,192 7,908 – 1,035 12,726 24,861
Equity-settled share options 13 46 – 417 – 476
Dividend 5 76 – – (763) (682)
Purchase of own shares by the EBT – – (600) – – (600)
Total transactions with owners 18 122 (600) 417 (763) (806)
Profit and total comprehensive income for the year – – – – 1,813 1,813
At 31 May 2013 3,210 8,030 (600) 1,452 13,776 25,868
Equity-settled share options 198 1,990 – 506 – 2,694
Dividend 7 128 – – (874) (739)
Purchase of own shares by the EBT – – (120) – – (120)
Total transactions with owners 205 2,118 (120) 506 (874) 1,835
Profit and total comprehensive income for the year – – – – 4,221 4,221
At 31 May 2014 3,415 10,148 (720) 1,958 17,123 31,924 Allocate Software plc
Annual Report and Accounts 2014
29
Overview
Strategic Report
Governance
Financial Statements
Company Information
Consolidated cash flow statement
For the year ended 31 May 2014
2014 
£’000
2013 
£’000
Cash flow from operating activities
Profit/(loss) for the year 3,440 (1,433)
Adjustments for:
Net finance (income)/charge (10) 66
Foreign exchange 118 69
Income tax (547) (952)
Loss on disposal of intangible assets – 9
Depreciation 476 431
Acquisition and related costs – 524
Amortisation 2,407 4,439
Impairment of intangibles and goodwill – 1,277
Share-based payment 506 417
(Increase)/decrease in trade and other receivables (1,613) 1,618
Increase in trade and other payables 1,119 2,278
Net cash generated from operations before acquisition and related costs 5,896 8,743
Acquisition and related costs – (703)
Net cash generated from operations after acquisition and related costs 5,896 8,040
Interest expense (22) (115)
Income tax (969) (721)
Net cash generated from operating activities 4,905 7,204
Cash flows from investing activities
Interest received 32 49
Investment to acquire subsidiaries – (1,162)
Cash acquired with subsidiaries – 85
Proceeds from disposal of intangible assets 50 92
Payments to acquire intangible assets (129) (178)
Payments for property, plant and equipment (1,180) (353)
Net cash used in investing activities (1,227) (1,467)
Cash flows from financing activities
Purchase of shares by EBT (120) (600)
Dividend (739) (682)
Repayment of loan (4,000) –
Proceeds from the issue of equity shares 2,188 59
Net cash used in financing activities (2,671) (1,223)
Net increase in cash and cash equivalents 1,007 4,514
Foreign exchange differences (482) 282
Cash and cash equivalents at the start of the year 13,134 8,338
Cash and cash equivalents at the end of the year 13,659 13,134 30
Company cash flow statement
For the year ended 31 May 2014
2014 
£’000
2013 
£’000
Cash flow from operating activities
Profit for the year 4,221 1,813
Adjustments for:
Net finance income (91) (37)
Foreign exchange 442 32
Income tax (597) (219)
Depreciation 360 328
Amortisation 189 595
Impairment of investment – 1,503
Share-based payment 506 417
(Increase)/decrease in trade and other receivables (2,619) 497
Increase in trade and other payables 758 2,512
Net cash generated from operations 3,169 7,441
Interest expense (60) (99)
Income tax (3) (8)
Net cash generated from operating activities 3,106 7,334
Cash flows from investing activities
Interest received 151 136
Investment to acquire subsidiary – (1,651)
Proceeds from disposal of intangible assets 50 92
Payments to acquire intangible assets (129) (167)
Payments for property, plant and equipment (1,012) (194)
Net cash used in investing activities (940) (1,784)
Cash flows from financing activities
Purchase of shares by EBT (120) (600)
Dividend (739) (682)
Repayment of loan (4,000) –
Proceeds from the issue of equity shares 2,188 59
Net cash used in financing activities (2,671) (1,223)
Net (decrease)/increase in cash and cash equivalents (505) 4,327
Foreign exchange differences (34) (4)
Cash and cash equivalents at the start of the year 9,049 4,726
Cash and cash equivalents at the end of the year 8,510 9,049 Allocate Software plc
Annual Report and Accounts 2014
31
Overview
Strategic Report
Governance
Financial Statements
Company Information
1  PRINCIPAL ACCOUNTING POLICIES
Basis of preparation
The Group financial statements are for the year ended 31 May 2014. They have been prepared in compliance with International  
Financial Reporting Standards (IFRS) and IFRS Interpretations Committee (IFRIC) interpretations as adopted by the European Union  
as at 31 May 2014.
Allocate Software plc, is a public limited company, incorporated and domiciled in the United Kingdom and is listed on the AIM market  
of the London Stock Exchange. The address of the registered office is 1 Church Road, Richmond, TW9 2QE.
Standards, amendments and interpretations effective in 2014
(i) New and amended standards adopted by the Group
A number of new standards and amendments to standards and interpretations are effective for the annual period beginning on  
1 June 2013 and have been applied in preparing these financial statements.
Amendment to IAS 1, ‘Financial statement presentation’ regarding items of other comprehensive income became effective during the 
period. Items in the consolidated statement of comprehensive income that may be reclassified to profit or loss in subsequently periods 
are now presented separately from items that will not be reclassified to profit or loss in subsequent periods.
IFRS 13, ‘Fair value measurement’ became effective during the period. The standard defines fair value and provides a framework for fair 
value measurement. In addition the standard requires specific disclosures on fair values, some of which replace existing disclosure 
requirements in IFRS 7, ‘Financial instruments: Disclosures’. The fair values of cash and cash equivalents, trade and other receivables and 
trade and other payables approximate to their book values due to the short maturity periods of these financial instruments.
(ii) New and amended standards and interpretations issued but not yet effective for the financial year beginning 1 June 2013 and  
not early adopted
A number of new standards and amendments to standards and interpretations are not yet effective for annual periods beginning after  
1 June 2013, and have not been applied in preparing these consolidated financial statements. None of these are expected to have a 
significant effect on the consolidated financial statements of the Group, except the following set out below:
• IFRS 9 ‘Financial Instruments’ – effective date pending
 IFRS 9, ‘Financial instruments’, addresses the classification, measurement and recognition of financial assets and financial liabilities. 
IFRS 9 was issued in November 2009, October 2010 and November 2013. It replaces the parts of IAS 39 that relate to the classification 
and measurement of financial instruments. IFRS 9 requires financial assets to be classified into two measurement categories: those 
measured as at fair value and those measured at amortised cost. The determination is made at initial recognition. The classification 
depends on the entity’s business model for managing its financial instruments and the contractual cash flow characteristics of the 
instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. The main change is that, in cases where the 
fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in other 
comprehensive income rather than the income statement, unless this creates an accounting mismatch. The Group is yet to assess 
IFRS 9’s full impact. The Group will also consider the impact of the remaining phases of IFRS 9 when completed by the International 
Accountings Standards Board.
• IAS 27, ‘Separate Financial Statements’, replaces the current version of IAS 27, ‘Consolidated and Separate Financial Statements’ as  
a result of the issue of IFRS 10. The revised standard includes the requirements relating to separate financial statements. The revised 
standard becomes effective for annual periods beginning on or after 1 June 2014.
• IAS 28, ‘Investments in Associates and Joint Ventures’, replaces the current version of IAS 28,’Investments in Associates’, as a result  
of the issue of IFRS 11. The revised standard includes the requirements for associates and joint ventures that have to be equity 
accounted following the issue of IFRS 11. The Group is yet to assess full impact of the revised standard and will adopt IAS 28 (revised) 
no later than the accounting period beginning on or after 1 June 2014.
• IFRS 10, ‘Consolidated financial statements’, builds on existing principles by identifying the concept of control as the determining 
factor in whether an entity should be included within the consolidated financial statements of the parent company. The standard 
provides additional guidance to assist in the determination of control where this is difficult to assess. The Group is yet to assess IFRS 
10’s full impact and will adopt IFRS 10 no later than the accounting period beginning on or after 1 June 2014.
• IFRS 12, ‘Disclosures of interests in other entities’, includes the disclosure requirements for all forms of interests in entities, including 
joint arrangements, associates, special purpose vehicles and other off Statement of Financial Position vehicles. The Group is yet to 
assess IFRS 12’s full impact and will adopt IFRS 12 no later than the accounting period beginning on or after 1 June 2014.
There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on  
the Group.
Notes to the financial statements 32
Notes to the financial statements continued
1  PRINCIPAL ACCOUNTING POLICIES continued
The principal accounting policies adopted by the Group in conformity with IFRS in force at 31 May 2014 are set out below:
Consolidation
(i) Subsidiaries
Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies generally accompanying a 
shareholding of over one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or 
convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date 
on which control is transferred to the Group. They are deconsolidated on the date control ceases.
The Group uses the purchase method of accounting for the acquisition of a subsidiary. The cost of an acquisition is measured by the fair 
value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. Costs directly 
attributable to the acquisition are expensed in the period in which they are incurred. Where the purchase price includes amounts 
payable contingent on key staff retentions this is treated as remuneration and not consideration in line with the requirements of IFRS 3 
‘Business Combinations’. This does not form part of the cost of acquisition and the amount expected to be paid is instead expensed to 
the Income Statement on a straight-line basis over the period of the intended staff retentions as defined in the purchase agreement. 
This charge is included within the ‘Acquisitions & related costs’ line of the Income Statement. Consideration that is contingent on certain 
targets being met are analysed by management and are recorded based on the probability of occurrence.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair 
values at the acquisition date irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value 
of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of the acquisition is less than the fair value 
of the net assets of the subsidiary acquired the difference is recognised directly in profit or loss.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those 
used by other members of the Group.
Inter-company transactions, balances and unrealised gains and losses on transactions between Group companies are eliminated.
(ii) Employee Benefit Trust
The Company has formed a trust with Ogier Employee Benefit Trustee Limited as trustee to operate in connection with Group’s Long-Term 
Retention Plan (LTRP). This trust is consolidated, as the substance of the relationship is that the trust is controlled by the Group.
Shares held by the Employee Benefit Trust are deducted from contributed equity.
Investments
Investments held in the Company only statement of financial position, as non-current assets comprise investments in subsidiary 
undertakings and are stated at cost less any provision for any impairment.
Revenue recognition
General
Revenue is measured at the fair value of the consideration received or receivable from the sales of software and professional services 
(including installation), net of any sales taxes. The Group recognises revenue when the amount of revenue can be reliably measured, it is 
probable that future economic benefits will flow to the entity and specific criteria have been met for each of the Group’s activities as 
described below.
Licencing Models
Where the contract includes multiple elements, the fair value of those elements is based on the relative stand-alone selling prices.
The Group operates two principal software licencing models – (a) a traditional licence and support & maintenance model; (b) a 
subscription model.
(a) Licenced Products
 The majority of Allocate’s products are licenced and either installed on the customer’s own equipment or hosted by Allocate or a 
third party. This includes all Defence and Maritime products, virtually all Australian and Swedish products and a significant number of 
UK Healthcare products.
 In addition to a licence fee, the Group charges annual support and maintenance fees to cover office hours support or out of hours 
support (via Allocate’s online support portal, email or telephone), bug fixes, and free version upgrades. The fee charged depends on 
the level of support service contracted. Allocate Software plc
Annual Report and Accounts 2014
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Strategic Report
Governance
Financial Statements
Company Information
1  PRINCIPAL ACCOUNTING POLICIES continued
 The elements for a software order typically include licenced products, post contract services (implementation), post contract support 
& maintenance and should a customer select it, the Allocate Cloud (refer below). The individual elements whilst part of an overall 
order are charged for and recognised separately. Revenue is recognised as described below.
(b) Subscriptions
(i)  Subscription Products
 Certain Healthcare products are only hosted by Allocate, and in this case the software (and licence) are not delivered to the 
customers, instead customers access the product over the internet. These products are delivered to the customer as a service 
over time (“Software as a Service” or “SaaS”).
 The elements of an order typically include the software subscription and post contract services (implementation) including 
collecting data, cleansing it, loading and configuring the system. This is charged for and recognised separately. No support and 
maintenance is charged as the single subscription fee covers this. Revenue is recognised as described below.
(ii) Cloud Subscriptions
Allocate Cloud is a secure and scaleable private cloud infrastructure run by Allocate and designed specifically to deliver Allocate’s 
licenced products over the Internet or the NHS N3 network.
Some customers may choose to have their licenced products hosted using Allocate’s hosting service, the Allocate Cloud. This only 
applies to Licenced Products, and in this situation the customer is required to separately purchase a licence for the products being 
hosted in the Allocate Cloud.
As the Cloud is not software, there is no post contract services or support. Revenue is recognised as described below.
Revenue Recognition by Revenue Type
(i)  Revenue from Software – Licences and Support & Maintenance
Licences
The Group licences software under non-cancellable licence agreements on either a term basis (typically 3 to 5 years) or on a perpetual 
basis. Licence revenues from our standard products are recognised when a non-cancellable licence agreement has been signed and the 
software has been made available to the customer, except for where there are uncertainties surrounding product acceptance or there 
are significant vendor obligations. 
For the majority of contracts, this results in licence revenues being recognised in full at the start of the contract. Occasionally, there are 
uncertainties around product acceptance or significant post sale obligations. When this arises revenue recognition is deferred until all 
material obligations are satisfied.
Support & Maintenance
Revenue from support agreements is recognised rateably over the period of the support agreement.
(ii) Revenue from Software – Subscriptions
Customers enter into agreements for Subscription Products or the Allocate Cloud generally on an annual or multi-year basis (typically  
3 to 5 years). Revenue is recognised rateably over the length of the contract.
(iii) Revenue from Services
Revenue from services (which includes software implementation, training and consultancy services) is recognised in the accounting 
period in which the services are rendered. For fixed-price contracts, revenue is recognised based on the actual service provided to  
the end of the reporting period as a proportion of the total services to be provided (percentage of completion method). Percentage 
completion is estimated based on the total number of hours performed on the project compared to the total number of hours expected 
to complete the project.
Estimates of revenue, costs or extent of progress toward completion are revised if circumstances change.
Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker 
(“CODM”). The CODM is the person or group that allocates resources to and assesses the performance of the operating segments of 
an entity. The Group has determined that its CODM is the Board of Directors of the Group.
The measurement policies the Group uses for segment reporting under IFRS 8 are the same as those used in its financial statements. 34
Notes to the financial statements continued
1  PRINCIPAL ACCOUNTING POLICIES continued
Foreign currency translation
a) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic 
environment in which the entity operates (the functional currency). The Company’s functional currency is Sterling. The Company’s and 
the Group’s presentation currency is Sterling.
b)  Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the 
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at reporting 
period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss, except 
where the gains and losses are attributable to part of the net investment in a foreign operation. Where gains and losses are attributable 
to part of the net investment in a foreign operation, these gains and losses are recognised through other comprehensive income.
c) Group companies
The results and financial position of all Group entities that have a functional currency different from the presentation currency are 
translated into the presentation currency as follows:
• assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of the statement 
of financial position;
• income and expenses for each income statement are translated at actual rates, the average exchange rate is used as an acceptable 
approximation where there are no significant rate fluctuations during the period; and
• on consolidation, exchange differences arising from the translation of the net investment in foreign entities is recognised in other 
comprehensive income and accumulated in the foreign exchange reserve.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign 
operation and translated at the closing rate.
Intangible assets
Internally generated intangibles
An internally generated intangible asset arising from the development of software is recognised only if all of the following conditions  
are met:
• it is probable that the asset will create future economic benefits;
• the development costs can be measured reliably;
• the technical feasibility of completing the intangible asset can be demonstrated;
• there is the intention to complete the asset and use or sell it;
• there is the ability to use or sell the asset; and
• adequate technical, financial and other resources to complete the development and to use or sell the asset are available.
Where no intangible asset can be recognised, development expenditure is charged to the income statement in the period in which  
it is incurred.
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, which is between 3 to 5 years.
Research expenditure is recognised as an expense in the period in which it is incurred.
Intangibles 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, which is between 3 to 8 years.
Goodwill
Goodwill arising from business combinations is the difference between the fair value of the consideration transferred and the fair value 
of the assets acquired and liabilities and contingent liabilities assumed. It is recognised initially as an intangible asset at cost and is 
subject to impairment testing on an annual basis or more frequently if circumstances indicate that the asset may have been impaired. 
Details of impairment testing are described in the accounting policies. Allocate Software plc
Annual Report and Accounts 2014
35
Overview
Strategic Report
Governance
Financial Statements
Company Information
1  PRINCIPAL ACCOUNTING POLICIES continued
Where the Company acquires the trade, assets and liabilities of its subsidiaries, goodwill is recognised on the excess of the carrying 
value of the Company’s investment in the subsidiary over the carrying value of the assets and liabilities acquired. This excess amount  
is recognised as goodwill rather than a diminution in the carrying value of the Company’s investment in the subsidiary because there  
is no change in the value of the trade and assets of the Company and its subsidiary as a whole, only a movement of trade and assets to 
the Company from its subsidiary.
Property, plant and equipment
Property, plant and equipment are recorded at cost net of accumulated depreciation and any provision for impairment. Depreciation is 
provided using the straight-line method to write off the cost of the asset less any residual value over its useful economic life as follows:
Equipment   33%
Leasehold improvements   25%
Long leasehold property (999 years) nil
Impairment
The Group’s goodwill, other intangible assets and property, plant and equipment are subject to impairment testing.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows 
(cash generating units). 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 controls the related cash flows.
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 assets or cash generating unit’s carrying amount exceeds its recoverable 
amount. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell and value in use, based on an 
internal discounted cash flow evaluation. Impairment losses recognised for cash generating units, to which goodwill has been allocated, 
are credited initially to the carrying amount of goodwill. 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.
Leases
All leases are regarded as operating leases and payments made under operating leases are charged to profit or loss on a straight-line 
basis over the period of the lease. The Group does not act as a lessor.
Financial assets
Financial assets comprise loans and receivables and are assigned to the appropriate category by management on initial recognition, 
depending on the contractual arrangements. Loans and receivables are non derivative financial assets which are recognised when the 
Group becomes a party to the contractual provisions of the instrument and measured at fair value plus transaction costs. Trade and 
other receivables are classified as loans and receivables. Subsequent to initial recognition, loans and receivables are measured at 
amortised cost using the effective interest method less any provision for impairment. Any change in value resulting from impairment or 
the reversal of impairment is recognised in profit or loss.
Provision against trade receivables is made when there is objective evidence that the Group will not be able to collect all amounts due 
to it in accordance with the original terms of those receivables. The amount by which they are written down is determined as the 
difference between the receivables carrying amount and the present value of the estimated future cash flows discounted at the original 
effective interest rate.
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.
Financial liabilities
The Group’s financial liabilities include bank loans and overdrafts, trade and other payables.
Financial liabilities are obligations to pay cash or other financial assets and are recognised when the Group becomes a party to the 
contractual provisions of the instrument. All financial liabilities are recorded initially at fair value, net of direct issue costs and 
subsequently measured at amortised cost using the effective interest method, less settlement payments. Interest related charges are 
recognised as an expense in finance costs in the income statement. 36
Notes to the financial statements continued
1  PRINCIPAL ACCOUNTING POLICIES continued
Finance charges, including premiums payable on settlement or redemption and direct issue costs are charged to the income statement 
on an accruals basis using the effective interest method. They are added to the carrying amount of the instrument to the extent that 
they are not settled in the period in which they arise.
A financial liability is derecognised only when the obligation is discharged, cancelled or expires.
Dividend distributions to shareholders are included in ‘Other short-term financial liabilities’ when the dividends are approved by the 
shareholders meeting.
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. All changes to current tax liabilities are recognised as a component of tax expense in the income statement.
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.
The deferred tax asset relating to share-based payment awards reflects the estimated value of tax relief available on the vesting of the 
awards at the statement of financial position date.
Cash and cash equivalents
Cash and cash equivalents include cash at bank and in hand as well as short-term bank deposits.
Share-based employee compensation
The Group operates equity-settled share-based compensation plans (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 
indirectly determined by reference to the share option awarded. Their value is appraised at the grant date and excludes the impact of 
any non-market vesting conditions (e.g. profitability or sales growth targets) but includes the impact of market conditions.
All share-based compensation is ultimately recognised as an expense in the income statement 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 
during the vesting period.
Where non-market vesting conditions are amended the change to the conditions is reflected in the number of options expected to vest 
and therefore the charge in the income statement.
Where market vesting conditions are amended the fair value of the options is re-measured immediately before and after the 
amendment. If the fair value after the amendment of the conditions is higher than the fair value immediately prior to the amendment, 
then the incremental increase in fair value (as adjusted by the number of options expected to vest) is taken to the income statement  
over the remaining vesting period of the options. If the fair value after the amendment of the conditions is lower than the fair value 
immediately prior to the amendment then the options continue to be accounted for using the original fair value at the date the options 
were originally granted.
(i) Share option plans
The Group operates five share option schemes: one HMRC-Approved Scheme, three schemes which have not been approved by HMRC 
and an Enterprise Management Incentive Scheme. Allocate Software plc
Annual Report and Accounts 2014
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Overview
Strategic Report
Governance
Financial Statements
Company Information
1  PRINCIPAL ACCOUNTING POLICIES continued
The Company issues shares when these options are exercised. 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.
(ii) Long-term retention plan
In addition to the share option plans above, the Group has established the LTRP. The LTRP operates in conjunction with the Allocate 
Software plc Employee Benefit Trust (Trust). The trustees of the Trust acquire shares in the Company over time to meet the exercise 
requirements of the LTRP. Options are granted to participants by the Company, and when exercised the trustee of the Trust transfers the 
appropriate amount of shares to the employee. The proceeds received net of any transaction costs are credited directly to equity.
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.
• “Share-based payment reserve” represents equity-settled share-based employee and non-employee remuneration until such share 
options are exercised.
• “Group Owned shares” are shares in Allocate Software plc that are held by the Allocate Software plc Employee Benefit Trust (Trust) 
to meet the exercise requirements of the LTRP
• “Retained earnings” represents retained profits and losses.
• “Foreign exchange reserve” represents translation differences arsing on the consolidation of investments in overseas subsidiaries.
Use of accounting estimates and judgements
Many of the amounts included in the financial statements involve the use of judgement and/or estimation. These judgements and 
estimates are based on management’s best knowledge of the relevant facts and circumstances, having regard to prior experience, but 
actual results may differ from the amounts included in the financial statements. Information about such judgements and estimation is 
contained in the accounting policies and/or the notes to the financial statements and the key areas are summarised below.
Judgements in applying accounting policies:
Management make judgements as to which costs incurred meet the requirements of IAS 38 ‘Intangible Assets’ and are therefore 
capitalised as internally generated intangible assets.
Sources of estimation uncertainty:
Depreciation & Amortisation:
Depreciation and 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. Depreciation and amortisation 
rates are changed where economic lives are re-assessed and technically obsolete items written off where necessary. Refer to notes 10 
and 12.
Impairment:
In assessing impairment, Management estimates the recoverable amount of each asset or cash generating units based on future cash 
flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions about future operating results and the 
determination of a suitable discount rate. Full details are shown in note 13.
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 and the time of exercise of those options. The models used by the Group are the Black-Scholes and Monte Carlo 
valuation models. Full details are shown in note 18.
Business Combinations:
Management uses valuation techniques in determining the fair values of the various elements of a business combination.
On initial recognition, the assets and liabilities of the acquired business are included in the consolidated statement of financial position 
at their provisional fair values. In measuring fair value, management uses estimates about future cash flows and discount rates, however, 
actual results may vary. 38
Notes to the financial statements continued
2 REVENUE
Year ended 31 May 2014 Year ended 31 May 2013
Non-
recurring 
£’000
Recurring 
£’000
Total 
£’000
Non-
recurring 
£’000
Recurring 
£’000
Total 
£’000
Licence 11,799 – 11,799 9,707 – 9,707
Subscriptions – 7,141 7,141 – 6,304 6,304
11,799 7,141 18,940 9,707 6,304 16,011
Support – 11,615 11,615 – 11,274 11,274
Services 9,398 – 9,398 9,676 – 9,676
Other 69 – 69 111 – 111
21,266 18,756 40,022 19,494 17,578 37,072
Recurring revenue as a % of total revenue 47% 47%
Recurring revenue is defined as revenue which recurs on a regular basis. This comprises revenue from subscription contracts (including 
the Allocate Cloud) and revenue from support & maintenance contracts. In both cases revenue is recognised rateably over the term of 
the contract.
3 SEGMENTAL REPORTING
Management has determined the operating segments based on the revenue streams within the reports reviewed by the strategic 
decision maker comprising the Board of Directors. These segments are consistent with how the business is structured, managed and its 
resources are deployed by the Board.
Licence revenue represents revenue from the sale of non-cancellable software licence agreements. Subscription revenue is derived from 
the sale of Software as a Service products, Allocate Cloud and hosting revenues. Support and service revenue represents revenue from 
the provision of installation, consulting, training and product support.
2014
Support 
£’000
Subscriptions 
£’000
Licence 
£’000
Services 
£’000
Other 
£’000
Total 
£’000
Revenue 11,615 7,141 11,799 9,398 69 40,022
Costs of goods sold (1,908) (1,372) (52) (8,005) (37) (11,374)
9,707 5,769 11,747 1,393 32 28,648
Research and development costs (8,327)
Sales, general and administration (*) (17,320)
Operating profit 3,001
Finance income 32
Foreign exchange losses (118)
Finance charges (22)
Profit before tax 2,893
2013
Support 
£’000
Subscriptions 
£’000
Licence
 £’000
Services 
£’000
Other 
£’000
Total 
£’000
Revenue 11,274 6,304 9,707 9,676 111 37,072
Costs of goods sold (2,094) (1,038) (210) (7,650) (13) (11,005)
9,180 5,266 9,497 2,026 98 26,067
Research and development costs (7,482)
Sales, general and administration (*) (20,835)
Operating loss (2,250)
Finance income 49
Foreign exchange losses (69)
Finance charges (115)
Loss before tax (2,385)
(*) includes non-recurring costs, acquisition costs, amortisation, impairment of intangible assets and share-based payment charges.
Under IFRS 8 there is a requirement to show operating profit and total assets for the operating segments, however, attributable 
expenses and total assets cannot be allocated on a reasonable basis and, as a result, the analysis is limited to the Group revenue less 
costs of goods sold which is then reconciled to the profit before tax. Allocate Software plc
Annual Report and Accounts 2014
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Overview
Strategic Report
Governance
Financial Statements
Company Information
3 SEGMENTAL REPORTING continued
There are no material inter-segment revenues.
Revenues from external customers in the Group’s domicile, the United Kingdom, as well as its major markets, the European Union, 
Australia and the USA, have been identified on the basis of the customer’s geographical location. Non-current assets are allocated 
based on their physical location.
Revenue arises from customers in the following locations:
2014 
£’000
2013 
£’000
UK 23,625 20,525
Europe 8,933 8,712
USA 1,048 1,794
Australia 6,281 5,887
Rest of World 135 154
40,022 37,072
In addition to the requirements of IFRS 8, the Directors present a schedule of revenue analysed by vertical business sector:
2014 
£’000
2013 
£’000
Healthcare 34,716 29,279
Defence 3,559 4,999
Maritime 1,747 2,794
40,022 37,072
There were no customers (2013: nil) who contributed in excess of 10% of total revenues.
The internal reporting of the Group’s performance does not require that statement of financial position information is gathered on the 
basis of the business streams ‘Licences’, ‘Subscriptions’, ‘Support’, ‘Services’ and ‘Other’ reported above. This information is therefore 
not accessible and, as a result, the segmental analysis does not include statement of financial position details. However, the Group 
operates within discrete geographical markets and the non-current assets of the Group are split between these locations:
Non-current assets by location 2014
UK
£’000
Europe
£’000
USA
£’000
Australia
£’000
R o W
£’000
Total
£’000
Intangible assets 3,218 – – 370 – 3,588
Goodwill 4,010 2,188 – 730 – 6,928
Property, plant and equipment 1,330 174 5 63 – 1,572
Trade and other receivables 771 – – 311 – 1,082
Deferred tax assets 1,374 – – 49 – 1,423
Total non-current assets 10,703 2,362 5 1,523 – 14,593
Non-current assets by location 2013
UK
£’000
Europe
£’000
USA
£’000
Australia
£’000
R o W
£’000
Total
£’000
Intangible assets 4,258 1,064 – 627 – 5,949
Goodwill 4,010 2,434 – 836 – 7,280
Property, plant and equipment 678 108 6 75 1 868
Trade and other receivables 615 – – – – 615
Deferred tax assets 791 – – 70 – 861
Total non-current assets 10,352 3,606 6 1,608 1 15,573 40
Notes to the financial statements continued
4 OPERATING PROFIT/(LOSS)
2014
 £’000
2013 
£’000
Operating profit/(loss) has been arrived at after charging:
Foreign exchange losses (included in the following line items):
– Costs of goods sold – 26
– 26
In addition to the above there are foreign exchange losses disclosed on the face of the Consolidated income statement of £118,000 
(2013: £69,000 loss), giving a total foreign exchange loss of £118,000 (2013: £95,000 loss).
Acquisition costs
RosterOn
– Transaction costs – 10
– Consideration treated as remuneration – 101
RealTime Health (note 20)
– Transaction costs – 413
– 524
Loss on disposal of intangible assets – 9
Depreciation of property, plant and equipment 476 431
Amortisation of intangible assets (note 12) 2,407 4,439
Impairment of intangibles and goodwill (notes 11, 12 and 13) – 1,277
Employee costs (note 5) 23,388 22,532
Land and buildings held under operating leases 970 860
Other operating leases 113 126
Audit and non-audit services:
Fees payable to the Company’s auditor for the audit of Parent Company and consolidated financial statements. 71 71
Fees payable to the Company’s auditor and its associates for other services:
The audit of the Company’s subsidiaries pursuant to legislation 30 30
Other services 9 9
During the year ended 31 May 2014 the Group incurred non-recurring costs of £526,000, associated principally with the Head Office relocation.
5 EMPLOYEES
Group
2014 
£’000
2013 
£’000
Employee costs (including Directors):
Wages and salaries 19,186 18,659
Social security costs 2,721 2,509
Share-based payment 506 417
Payments into defined contribution pension schemes 975 947
23,388 22,532
2014 
Number
2013
Number 
The average number of employees (including Directors) during the year was made up as follows:
Sales and services 161 163
Development 97 99
Administration 35 35
Executive Directors 4 4
Non-Executive Directors 3 4
300 305
For accounting purposes, IFRS3 ‘Business Combinations’ requires elements of the deferred consideration associated with the 
acquisitions of RealTime and RosterOn to be treated as remuneration and not consideration. The amount of this deferred consideration 
expected to be paid is expensed to the Income Statement. Therefore in addition to the costs above, there are remuneration costs 
included in the acquisition costs line of the income statement. Further details are provided in note 4.
For details of Directors’ remuneration, refer to the Remuneration report on pages 19 to 21. Allocate Software plc
Annual Report and Accounts 2014
41
Overview
Strategic Report
Governance
Financial Statements
Company Information
6 INCOME TAX
2014 
£’000
2013 
£’000
Current tax: 
Corporation tax on profit/(loss) for the year – –
Prior period adjustments 2 –
Overseas tax 631 429
Total current tax 633 429
Deferred tax: 
Origination and reversal of temporary differences :
Current period (1,169) (1,295)
Prior period adjustments (117) 27
Rate change adjustment 106 (113)
Total deferred tax (1,180) (1,381)
Tax credit on profit/(loss) for the year (547) (952)
Amounts recognised directly in equity
Aggregate current and deferred tax arising in the reporting period and not recognised in net profit or loss or other comprehensive 
income but directly debited or credited to equity:
2014
 £’000
2013 
£’000
Net deferred tax – (credited)/charged to equity (24) –
(24) –
The tax assessed for the year differs from the standard rate of corporation tax as applied in the respective trading domains where the 
Group operates. The differences are explained below:
2014
 £’000
2013 
£’000
Profit/(loss) for the year before tax 2,893 (2,385)
Profit/(loss) for year multiplied by the respective standard rate of corporation tax applicable in each domain 
22.67% (2013: 23.83%). 656 (568)
Effects of: 
Tax rate change adjustment 106 (113)
Adjustment to tax in respect of prior periods (117) 27
Difference in overseas tax rates (32) (302)
Movement on deferred tax not recognised 34 71
Research and development enhanced relief (758) (584)
Share-based payments (364) 62
Sundry items (84) 5
Expenses not deductible for tax purposes
– Acquisition costs – 125
– Impairment of goodwill – 304
– Other 12 21
Tax credit on profit/(loss) for the year (547) (952)
7 PROFIT ATTRIBUTABLE TO ALLOCATE SOFTWARE PLC
The profit for the financial year of the Parent Company, Allocate Software plc, was £4,221,000 (2013: profit of £1,813,000). As permitted by 
section 408 of the Companies Act 2006, no separate income statement is presented in respect of the Parent Company. 42
Notes to the financial statements continued
8 DIVIDENDS
(a) Dividends paid during the reporting period
2014 
£’000
2013 
£’000
Final dividend for the year ended 31 May 2013 of 1.32p (2012: 1.2p) per fully paid share 874 763
874 763
Dividends paid in cash or satisfied by the issue of shares under the Company’s scrip dividend scheme were as follows:
Cash 739 682
Shares 135 81
874 763
(b) Dividends not recognised at the end of the reporting period
Since the year end the Directors have proposed the payment of a dividend in respect of the full financial year of 1.45p per fully paid 
Ordinary Share (2013: 1.32p). The aggregate amount of the proposed dividend expected to be paid out of retained earnings at 31 May 
2014, but not recognised as a liability at the year end is £990,000 (2013: £848,000).
9 EARNINGS/(LOSS) PER ORDINARY SHARE
31 May
2014 
£’000
31 May
2013 
£’000
Earnings/(loss) for the year attributable to shareholders 3,440 (1,433)
Earnings/(loss) per share
Basic (pence per share) 5.18p (2.26p)
Diluted (pence per share) 5.09p (2.26p)
Weighted average number of shares
Number of 
shares
Number of 
shares
Shares in issue at opening 64,205,528 63,841,253
Shares issued during the year 4,088,011 364,275
Shares in issue at closing 68,293,539 64,205,528
Weighted average shares for basic earnings per share 66,360,120 63,559,952
Effect of dilutive potential Ordinary Shares 1,229,824 1,311,580
Weighted average shares for diluted earnings per share 67,589,944 64,871,532
Adjusted earnings per ordinary share
An adjusted earnings per share has been calculated in addition to the post tax earnings per share which eliminates the effects of 
share-based payments, impairment and amortisation of intangibles, non-recurring costs, acquisition costs and is adjusted for tax. It has 
been calculated to allow shareholders to gain a clearer understanding of the trading performance of the Group. The basis of the 
calculation of the basic and diluted adjusted earnings per share is set out below:
2014 
£’000
2013 
£’000
Profit/(loss) for the year attributable to shareholders 3,440 (1,433)
Amortisation of intangibles 2,407 4,439
Impairment charge – 1,277
Share-based payments 506 417
Acquisition costs – 524
Non-recurring costs 526 –
Tax on amortisation, impairment, share-based payment, acquisition costs and non-recurring costs (791) (1,586)
Adjusted profit for the year attributable to shareholders 6,088 3,638
Basic adjusted earnings per share 9.17p 5.72p
Diluted adjusted earnings per share 9.01p 5.60p Allocate Software plc
Annual Report and Accounts 2014
43
Overview
Strategic Report
Governance
Financial Statements
Company Information
10 PROPERTY, PLANT AND EQUIPMENT
Group
Long 
leasehold 
property 
£’000
Leasehold 
improvements 
£’000
Equipment 
£’000
Total 
£’000
Cost
At 1 June 2012 285 240 2,105 2,630
Additions – – 353 353
Acquisition of RealTime – – 31 31
Disposals – – (78) (78)
Foreign exchange rate movement – – 42 42
At 31 May 2013 285 240 2,453 2,978
Additions – 546 666 1,212
Disposals – (240) (155) (395)
Foreign exchange rate movement – (1) (57) (58)
At 31 May 2014 285 545 2,907 3,737
Depreciation
At 1 June 2012 – 239 1,483 1,722
Acquisition of RealTime – – 8 8
Provided in the year – 1 430 431
Disposals – – (78) (78)
Foreign exchange rate movement – – 27 27
At 31 May 2013 – 240 1,870 2,110
Provided in the year – 69 407 476
Disposals – (240) (150) (390)
Foreign exchange rate movement – (1) (30) (31)
At 31 May 2014 – 68 2,097 2,165
Net book value at 31 May 2014 285 477 810 1,572
Net book value at 31 May 2013 285 – 583 868
Net book value at 31 May 2012 285 1 622 908
Netted off the cost of property plant and equipment are accumulated landlord capital contributions amounting to £96,000 (2013: 
£304,000) at the year end. Of this amount £10,000 (2013: £248,000) had been taken to the income statement by way of a reduction to 
accumulated depreciation.
Certain assets of the Group were considered the security for the revolving loan facility which was paid off during the year. 44
Notes to the financial statements continued
10 PROPERTY, PLANT AND EQUIPMENT continued
Company
Leasehold 
improvements 
£’000
Equipment 
£’000
Total 
£’000
Cost
At 1 June 2012 240 1,685 1,925
Additions – 194 194
Transfer from subsidiary – 43 43
At 31 May 2013 240 1,922 2,162
Additions 535 477 1,012
Disposals (240) – (240)
At 31 May 2014 535 2,399 2,934
Depreciation
At 1 June 2012 239 1,193 1,432
Provided in the year 1 327 328
Transfer from subsidiary – 9 9
At 31 May 2013 240 1,529 1,769
Provided in the year 66 294 360
Disposals (240) – (240)
At 31 May 2014 66 1,823 1,889
Net book value at 31 May 2014 469 576 1,045
Net book value at 31 May 2013 – 393 393
Net book value at 31 May 2012 1 492 493
Netted off the cost of property plant and equipment are accumulated landlord capital contributions amounting to £40,000 (2013: 
£304,000) at the year end. Of this amount £5,000 (2013: £248,000) had been taken to the income statement by way of a reduction to 
accumulated depreciation.
Certain assets of the Group were considered the security for the revolving loan facility which was paid off during the year.
11 GOODWILL
Group
Total 
£’000
Cost
At 1 June 2012 7,479
Acquisition of RealTime 64
Foreign exchange rate movement 277
At 31 May 2013 7,820
Foreign exchange rate movement (352)
At 31 May 2014 7,468
Accumulated impairment
At 1 June 2012 and 31 May 2013 540
At 31 May 2014 540
Net book value at 31 May 2014 6,928
Net book value at 31 May 2013 7,280
Net book value at 31 May 2012 6,939
The details of annual impairment testing of goodwill are set out in note 13. Allocate Software plc
Annual Report and Accounts 2014
45
Overview
Strategic Report
Governance
Financial Statements
Company Information
11 GOODWILL continued
Company
Total 
£’000
Cost
At 1 June 2012 9,148
Transfer from investments 1,531
At 31 May 2013 10,679
Transfer from investments –
At 31 May 2014 10,679
Accumulated impairment
At 1 June 2012 –
Impairment of goodwill 1,503
At 31 May 2013 1,503
At 31 May 2014 1,503
Net book value at 31 May 2014 9,176
Net book value at 31 May 2013 9,176
Net book value at 31 May 2012 9,148
On 1 November 2012 the Company acquired the trade and assets of its subsidiary RealTime Health Limited.
The assets were transferred at their book value. The excess of the carrying value of the Company’s investment in the Company over the 
book value of the assets acquired has been reclassified as goodwill.
12 INTANGIBLE ASSETS
Group
Software 
£’000
Customer 
lists & brands 
£’000
Total 
£’000
Cost
At 1 June 2012 6,820 17,167 23,987
Additions 178 – 178
Acquisition of RealTime (note 20) 1,533 – 1,533
Disposals (9) – (9)
Foreign exchange rate movement – 1,120 1,120
At 31 May 2013 8,522 18,287 26,809
Additions 129 – 129
Foreign exchange rate movement – (1,155) (1,155)
At 31 May 2014 8,651 17,132 25,783
Amortisation
At 1 June 2012 4,868 9,458 14,326
Charge for the year 644 3,795 4,439
Impairment 1,277 – 1,277
Foreign exchange rate movement – 818 818
At 31 May 2013 6,789 14,071 20,860
Charge for the year 380 2,027 2,407
Foreign exchange rate movement – (1,072) (1,072)
At 31 May 2014 7,169 15,026 22,195
Net book value at 31 May 2014 1,482 2,106 3,588
Net book value at 31 May 2013 1,733 4,216 5,949
Net book value at 31 May 2012 1,952 7,709 9,661
Intangible assets comprise both assets arising from third party costs incurred to develop internal business systems, and intangibles 
acquired through a business combination. Intangible assets are amortised over periods of 3 to 8 years. The Group has not capitalised 
any software research and development costs as these have not met the requirements of IAS 38 ‘Intangible Assets’.
The details of any impairment testing of intangible assets are set out in note 13. 46
Notes to the financial statements continued
12 INTANGIBLE ASSETS continued
Company
Software 
£’000
Customer 
lists 
£’000
Total 
£’000
Cost
At 1 June 2012 593 1,715 2,308
Additions 167 – 167
At 31 May 2013 760 1,715 2,475
Additions 129 – 129
At 31 May 2014 889 1,715 2,604
Amortisation
At 1 June 2012 178 1,347 1,525
Charge for the year 227 368 595
At 31 May 2013 405 1,715 2,120
Charge for the year 189 – 189
At 31 May 2014 594 1,715 2,309
Net book value at 31 May 2014 295 – 295
Net book value at 31 May 2013 355 – 355
Net book value at 31 May 2012 415 368 783
Intangible assets comprise both assets arising from third party costs incurred to develop internal business systems, and intangibles 
acquired through a business combination. The Company’s intangible assets are amortised over periods of 3 to 6 years. The Company 
has not capitalised any software research and development costs as these have not met the requirements of IAS 38 ‘Intangible Assets’.
13 IMPAIRMENT
(a) Impairment testing of goodwill
For the purpose of annual impairment testing, the carrying value of goodwill acquired through business combinations is allocated to the 
following cash-generating units (CGU):
2014 
£’000
2013 
£’000
Zircadian 3,946 3,946
RosterOn 731 837
RealTime 64 64
Time Care 2,187 2,433
6,928 7,280
These represent the lowest level within the Group at which goodwill is monitored for internal management purposes.
(b) Key assumptions in value in use calculations
The recoverable amount of all CGU’s has been determined based on value-in-use calculations. With the exception of RealTime (refer 
below), these calculations use cash flow projections based on financial budgets approved by management covering a one-year period 
followed by an extrapolation of expected cash flows for a further four year-period. Cash flows beyond the five-year period are 
extrapolated using the estimated growth rates appropriate to the industry. This growth rate does not exceed the long-term average 
growth rate for the industry in which the CGU operates. The discount rates reflect appropriate adjustments relating to market risk and 
specific risk factors of each segment.
The key assumptions for the value-in-use calculations are as follows:
2014 2013
Growth
rate*
Discount 
rate
Growth 
rate*
Discount 
rate
Zircadian 10% 13.0% 10% 12.0%
RosterOn 10% 13.0% 10% 12.0%
RealTime
#
13.0% 50% 12.0%
Time Care 15% 13.0% 15% 12.0%
* Weighted average growth rate used to extrapolate cash flows for the four years after the budget period. As noted cash flows beyond the five year period are extrapolated 
using the long term average growth rate for the industry in which the CGU operates.
# See RealTime section below. Allocate Software plc
Annual Report and Accounts 2014
47
Overview
Strategic Report
Governance
Financial Statements
Company Information
13 IMPAIRMENT continued
The projected performance of each business is driven by the acquisition of new customers, cross-sell and up-sell of products into 
complementary customer bases and also maintenance of existing customer renewals. The cross-sell and up-sell opportunities will 
increase more gradually for Time Care AB and RosterOn Pty Limited as compared to the UK businesses.
Management has determined the key assumptions based on their significant experience of the customer base in the UK, and for Sweden 
and Australia the historical performance of these businesses. The growth-rates are based on a combination of historical performance 
and management’s judgements on the cross-selling opportunities afforded by long-standing customer relationships in addition to a 
go-to-market model of proven endurance.
RealTime
A 5-year model, approved by Management, has been used in the calculations. This model has compound annual revenue growth of 
75%, which reflects the fact that it is the early stages of growth for RealTime from a small customer base (seven customers) relative to 
other products. A higher rate of growth than the other CGUs (which contain mature products) is consistent with that achieved by other 
products in the early stages of their lifecycle. The compound annual cost growth is 25%.
If the assumptions over new customer acquisition are reduced resulting in a compound annual revenue growth of 60% and compound 
annual cost growth of 20%, then the recoverable amount would approximate the carrying value of the CGU.
(c) Impairment of intangible assets
No impairment of intangible assets or goodwill has been recorded by either the Group or the Company during the year ended 
31 May 2014.
Management performed an impairment review at 31 May 2013 on the intangible assets recognised with respect to the Dynamic 
Change acquisition. This resulted in an impairment charge of £1,277,000 which has been separately disclosed on the face of the 
income statement.
During the year ended 31 May 2013, an impairment charge of £1,503,000 was also recorded in the Company accounts against the 
goodwill relating to Dynamic Change.
14 INVESTMENTS
Group
There are no non-current asset investments held by the Group.
Company
Investments in subsidiaries:
Investments 
£’000
Loan
£’000
Total 
£’000
Cost
At 1 June 2012 13,923 2,095 16,018
Acquisition of RealTime Health 1,651 – 1,651
Foreign exchange – 31 31
Transfer to goodwill (1,531) – (1,531)
At 31 May 2013 14,043 2,126 16,169
Foreign exchange – (269) (269)
At 31 May 2014 14,043 1,857 15,900
Net book value at 31 May 2014 14,043 1,857 15,900
Net book value at 31 May 2013 14,043 2,126 16,169
Net book value at 31 May 2012 13,923 2,095 16,018
The details of the acquisitions are set out in note 20. The details of any impairment testing are set out in note 13. The details of the 
transfer to goodwill are set out in note 11. 48
Notes to the financial statements continued
14 INVESTMENTS continued
Principal investments
The Company holds investments either directly or indirectly in the equity share capital of the following:
Subsidiary
Country of registration and 
operation Class of share
Percentage 
held Nature of business
Time Care AB Sweden Ordinary SEK 1 100% Sales of software
Time Care Sverige AB Sweden Ordinary SEK 1,000 100% Sales of software
Calistrum AB Sweden Ordinary SEK 1,000 100% Dormant
Time Care UK Limited England and Wales Ordinary £1 100% Dormant
Dynamic Change Limited England and Wales Ordinary 1p 100% Dormant
Allocate Software Worldwide Limited England and Wales Ordinary £1 100% Dormant
Allocate Software Inc USA Common Stock US$0.01 100% USA sales and support
Allocate Software Pte Limited Singapore Common Stock Singapore $1 100% Dormant
Allocate Software PTY Limited Australia Ordinary Aus $1 100% Sales of software
MSW Technology Limited England and Wales Ordinary £1 100% Dormant
Allocate Software Technology 
Systems Limited England and Wales Ordinary £1 100% Dormant
Allocate Software Sendrian Berhad Malaysia Ordinary MYR1 100% Sales of software
Allocate Sendrian Berhad Malaysia Ordinary MYR1 100% Dormant
Manpower Software Limited England and Wales Ordinary £1 100% Dormant
Allocate Limited England and Wales Ordinary £1 100% Dormant
Zircadian Holdings Limited England and Wales Ordinary £1 100% Dormant
Zircadian Limited England and Wales Ordinary £1 100% Dormant
RosterOn Pty Limited Australia Ordinary Aus $1 100% Dormant
RealTime Health Limited England and Wales Ordinary 1p 100% Dormant
15 DEFERRED TAX
Deferred tax asset
Group
Tax 
losses 
£’000
Decelerated 
capital 
allowances 
£’000
Other timing 
differences 
£’000
Total 
£’000
At 1 June 2012 240 78 243 561
Net creation 135 19 21 175
Prior year adjustment 47 30 19 96
Tax rate change adjustment (18) (6) (11) (35)
Acquisition of RealTime 46 – – 46
Foreign exchange 18 – – 18
At 31 May 2013 468 121 272 861
Net creation/utilisation 568 (39) 129 658
Prior year adjustment 160 (38) (5) 117
Tax rate change adjustment (142) (8) (47) (197)
Foreign exchange (17) – 1 (16)
At 31 May 2014 1,037 36 350 1,423
Deferred tax assets are only recognised for tax losses arising in Group companies where it is probable future taxable profits will  
be available against which to use these losses. Tax losses for which a deferred tax asset has been recognised total £5,165,000  
(2013: £2,154,000). In addition the Group has tax losses totalling £494,000 (2013: £458,000) for which a deferred tax asset has not  
been recognised. Allocate Software plc
Annual Report and Accounts 2014
49
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Governance
Financial Statements
Company Information
15 DEFERRED TAX continued
Company
Tax 
losses 
£’000
Decelerated 
capital 
allowances 
£’000
Other timing 
differences 
£’000
Total 
£’000
At 1 June 2012 148 77 247 472
Net creation 124 19 10 153
Prior year adjustment 47 30 19 96
Tax rate change adjustment (14) (5) (11) (30)
At 31 May 2013 305 121 265 691
Net creation/utilisation 581 (26) 110 665
Prior year adjustment 160 (37) (5) 118
Tax rate change adjustment (129) (8) (46) (183)
At 31 May 2014 917 50 324 1,291
Tax losses carried forward in the Company total £4,588,000 (2013: £1,508,000). A deferred tax asset has been recognised in respect of 
these losses.
Deferred tax liability
Group
Intangible 
assets 
£’000
Other timing 
differences 
£’000
Total 
£’000
At 1 June 2012 2,129 – 2,129
Prior year adjustment 123 – 123
Tax rate change adjustment (138) (10) (148)
Acquisition of RealTime 368 2 370
Foreign exchange 77 – 77
Net creation/utilisation (1,237) 135 (1,102)
At 31 May 2013 1,322 127 1,449
Tax rate change adjustment (91) – (91)
Foreign exchange (49) (13) (62)
Net creation/utilisation (509) – (509)
At 31 May 2014 673 114 787
16  TRADE AND OTHER RECEIVABLES
2014 2013
Group
Current 
£’000
Non-current 
£’000
Total 
£’000
Current 
£’000
Non-current 
£’000
Total
 £’000
Trade receivables 9,701 – 9,701 9,425 – 9,425
Accrued income 3,596 1,082 4,678 2,449 615 3,064
Prepayments and other receivables 793 – 793 1,013 – 1,013
14,090 1,082 15,172 12,887 615 13,502
Credit quality of receivables
Trade receivables are derived from the supply of licences and services to clients who are substantial and creditworthy organisations. 
These clients include government health and defence departments, major listed companies and significant private companies.
The following financial assets are overdue for receipt. The fair value of receivables is not materially different from the carrying value 
shown. The receivables are overdue by:
2014 
£’000
2013 
£’000
Trade receivables
Not more than 3 months 1,780 2,244
More than 3 months but not more than 6 months 32 261
More than 6 months 60 169
1,872 2,674 50
Notes to the financial statements continued
16  TRADE AND OTHER RECEIVABLES continued
There are no receivables which have been impaired.
Trade and other receivables are due in the following currencies:
2014 
£’000
2013 
£’000
Australian Dollars 1,356 1,957
Swedish Krona 747 845
US Dollars 115 918
Euros 73 168
Malaysian Ringgits 31 10
2,322 3,898
2014 2013
Company
Current 
£’000
Non-current 
£’000
Total 
£’000
Current 
£’000
Non-current 
£’000
Total
 £’000
Trade receivables 7,462 – 7,462 6,383 – 6,383
Amounts owed by subsidiary companies 2,874 – 2,874 2,424 – 2,424
Accrued income 2,947 771 3,718 1,789 615 2,404
Prepayments and other receivables 509 – 509 783 – 783
13,792 771 14,563 11,379 615 11,994
Amounts owed by subsidiary companies are payable on demand.
The following financial assets are overdue for receipt. The fair value of receivables is not materially different from the carrying value 
shown. The receivables are overdue by:
2014 
£’000
2013 
£’000
Trade receivables
Not more than 3 months 1,432 1,775
More than 3 months but not more than 6 months 3 76
More than 6 months – 169
1,435 2,020
There are no receivables which have been impaired.
Trade receivables are due in the following currencies:
2014 
£’000
2013 
£’000
US Dollars 10 710
Euros 73 142
83 852
The Group’s and Company’s receivables are unsecured.
17 SHARE CAPITAL
Equity
2014 
£’000
2013 
£’000
Ordinary Shares of 5p each
Authorised
100 million (2013: 100 million) 5,000 5,000
Allotted, called up and fully paid
68,293,539 (2013: 64,205,528) 3,415 3,210 Allocate Software plc
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17 SHARE CAPITAL continued
Equity: allotted, called up and fully paid
 Number
 of shares 
£’000
Share 
capital
 £’000
Share 
premium 
£’000
Total
 £’000
At 1 June 2012 63,841,253 3,192 7,908 11,100
Dividend (note 8) 99,275 5 76 81
Issue of shares on exercise of options 265,000 13 46 59
At 31 May 2013 64,205,528 3,210 8,030 11,240
Dividend (note 8) 126,011 7 128 135
Issue of shares on exercise of options 3,962,000 198 1,990 2,188
At 31 May 2014 68,293,539 3,415 10,148 13,563
The mid-market price of the Ordinary Shares at 30 May 2014 was 111.00p and the range during the year was 65.00p to 119.00p.
Own shares held
The Group owned shares are shares in Allocate Software plc that are held by the Allocate Software plc Employee Benefit Trust (EBT) to 
meet the exercise requirements of the LTRP. During the year, the EBT made the following purchases:-
Shares held by the EBT
 Number of 
shares held £’000
At 1 June 2013 784,530 600
Purchase of shares by the EBT 107,569 120
At 31 May 2014 892,099 720
18 RESERVES
(i) Nature and purpose of reserves
Retained earnings – comprises the accumulated retained profits from current and prior periods.
Share-based payments – the share-based payments reserve is used to recognise the grant date fair value of options issued to 
employees but not exercised.
Foreign exchange – exchange differences arising on the translation of overseas subsidiaries are recognised in other comprehensive 
income as described in note 1, and accumulated in a separate reserve within equity.
(ii) Share-Based payments
There are five share option schemes in operation: an HMRC Approved Scheme (“the Approved Scheme”), two schemes which have not 
been approved by HMRC (“the Unapproved Schemes”), a further scheme which has not been approved by HMRC (“the Bonus Scheme”) 
and an Enterprise Management Incentive Scheme (“the EMI Scheme”), which complies with the requirements of HMRC. In addition 
there is a Long-Term Retention Plan (“LTRP”) in operation.
The Approved Scheme, the Unapproved Schemes & the EMI Scheme (“the Option Plans”)
Options in the Option Plans vest subject to demanding earnings per share (“EPS”) targets being achieved over specified performance 
periods (generally three years). Options vest at the end of the performance period and can be exercised over the period between 
vesting date and expiry date. Options expire 10 years from the date of grant. Options are forfeited if the employee leaves the Company 
before the options become available for exercise.
The fair values of the services received in exchange for share-based payments were calculated using a Black Scholes pricing model that 
takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and the expected price 
volatility of the underlying share, the expected dividend yield and the risk free interest rate for term of the option. No account is taken of 
any services and performance conditions in the calculation of the fair value.
The expected price volatility is based on historic volatility.
During the year ended 31 May 2014, the Board decided to revise the EPS for options which were granted after 1 January 2011. As before 
EPS targets are set for each year within the specified performance period (3 years), but these have been reduced to reflect the transition 
of the business model to one where a greater proportion of revenues are recurring resulting in a slower growth in earnings per share. 
Options continue to vest over three years, with annual EPS targets set. For each year an annual target is met, one third of the options 
granted will vest at the end of the three-year vesting period. Each annual EPS target has two thresholds – a lower threshold, at which 
point 70% of the options in relation to that year will vest, and a higher threshold at which point 100% of the options in relation to that 
year will vest. Options vest on a sliding scale between 70% and 100% if performance lies between the two thresholds.
As the EPS targets are non-market conditions, this change has no impact on the fair value of options granted. The charge to the profit 
and loss account has been adjusted to reflect the best available estimate of the number of share options expected to vest as a result of 
this change. 52
Notes to the financial statements continued
18 RESERVES continued
The Bonus Scheme
During the year ended 31 May 2014 a further scheme (which has not been approved by HMRC) was established.
Options in this scheme vest after 1 year and can be exercised over the period between vesting date and expiry date. Options expire 10 
years from the date of grant. Options are forfeited if the employee leaves the Company before the options become available for exercise.
The fair value of these options is calculated using the approach described for the Option Plans above.
LTRP
Options in the LTRP vest subject to both earnings per share (“EPS”) targets being achieved over a specified performance period and a 
total absolute shareholder return (“TSR”) target against which options will vest on a sliding scale.
The fair values of the services received in exchange for share-based payments were calculated using a Monte Carlo simulation, which 
takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and the expected price 
volatility of the underlying share, the expected dividend yield and the risk free interest rate for term of the option. No account is taken of 
any services and performance conditions in the calculation of the fair value other than the performance conditions linked to the share 
price in the Company (ie TSR conditions).
During the year the targets were revised in view of the transition of the Group’s business model to one where a greater proportion of revenues 
are recurring. Options vest subject to the Company’s earnings per share increasing at or above a revised target of a 5% annual compound 
growth rate. Under the revised TSR targets, 70% of the options will vest at a 7 .5% annual compound total shareholder return and the options 
will vest in full at or above a 15% annual compound TSR. Subject to the meeting of the performance criteria and to continuing employment, 
600,000 options will vest in September 2014 and a further 200,000 in each of September 2015 and September 2016.
As a result of this change the fair value of the options was re-measured. The resulting incremental increase in fair value will be expensed 
to the Income Statement over the remaining vesting period of the options.
Fair Value of Options Granted
The table below lists the inputs to the option pricing models for options granted and where a change in vesting conditions has required 
the fair value to be re-measured.
Date of issue
Number 
granted
Share price 
on issue date
Exercise 
price
Expected 
volatility
Expiry
 period
Vesting 
period
Risk 
free rate
Expected 
dividend 
yield
% Years % %
2014
Option Plans
23 July 2013 390,000 84.0p 84.0p 21 10 3 1.31 nil
23 Sept 2013 50,000 101.0p 101.0p 20 10 3 1.67 nil
21 Jan 2014 680,000 109.0p 109.0p 19 10 3 1.73 nil
17 Mar 2014 273,334 116.5p 116.5p 16 10 3 1.89 nil
Bonus Scheme
17 Mar 2014 200,000 116.5p 116.5p 16 10 1 1.89 nil
LTRP revaluation
1 Dec 2011 600,000 99.5p* 0.0p 21 6 3 0.64 1.45
1 Dec 2011 200,000 99.5p* 0.0p 20 6 4 1.01 1.45
1 Dec 2011 200,000 99.5p* 0.0p 20 6 5 1.20 1.45
2013
Option Plans
15 Aug 2012 1,015,000 71.5p 71.5p 32 10 3 0.63 nil
* Share price on modification date Allocate Software plc
Annual Report and Accounts 2014
53
Overview
Strategic Report
Governance
Financial Statements
Company Information
18 RESERVES continued
Details of the number of share options and the weighted average exercise price (WAEP) outstanding during the year are as follows:
2014 2013
No. of 
options
WAEP No. of 
options
WAEP 
Outstanding at the beginning of the year 7,184,000 54.53p 6,464,000 49.18p
Granted during the year 1,593,334 104.86p 1,015,000 71.50p
Exercised during the year (3,962,000) 55.22p (265,000) 22.42p
Forfeited during the year (283,334) 76.24p (30,000) 71.50p
Expired during the year (1,000) 45.00p – –
Outstanding at the end of the year 4,531,000 53.23p 7,184,000 53.23p
Exercisable at the year end 522,666 54.53p 4,099,000 54.53p
The total cost of the share option schemes charged to the Consolidated Income Statement is £506,000 (2013: £417,000). The weighted 
average share price at the date of exercise of options was 108.77p (2013: 72.05p).
The weighted average fair value of options granted during the year was 30.50p per option (2013: 29.61p).
Share options remaining in the schemes are as follows:
Grant date Exercise from Lapse date
Options 
remaining Ex price
Time to expiry
Scheme Yrs Mths
EMI 27/03/2006 27/03/2009 26/03/2016 3,500 25.50 1 9
Unapproved 27/03/2006 27/03/2009 26/03/2016 2,500 25.50 1 9
EMI 02/05/2008 02/05/2011 01/05/2018 10,000 53.00 3 11
EMI 14/04/2010 14/04/2013 13/04/2020 260,000 71.50 5 10
Unapproved 04/02/2011 04/02/2014 03/02/2021 246,666 85.50 6 8
Approved 14/09/2011 14/09/2014 13/09/2021 82,758 72.50 7 4
Unapproved 14/09/2011 14/09/2014 13/09/2021 317,242 72.50 7 4
LTRP 01/12/2011 1/09/2014 30/11/2017 600,000 0.00 3 6
LTRP 01/12/2011 1/09/2015 30/11/2017 200,000 0.00 3 6
LTRP 01/12/2011 1/09/2016 30/11/2017 200,000 0.00 3 6
Approved 15/08/2012 15/08/2015 14/08/2022 266,748 71.50 8 2
Unapproved 15/08/2012 15/08/2015 14/08/2022 748,252 71.50 8 2
Approved 23/07/2013 23/07/2016 22/07/2023 88,660 84.00 9 1
Unapproved 23/07/2013 23/07/2016 22/07/2023 301,340 84.00 9 1
Unapproved 23/09/2013 23/09/2019 22/09/2023 50,000 101.00 9 3
Approved 21/01/2014 21/01/2017 20/01/2024 46,926 109.00 9 7
Unapproved 21/01/2014 21/01/2017 20/01/2024 633,074 109.00 9 7
Bonus 17/03/2014 17/03/2017 16/03/2024 200,000 116.50 9 9
Unapproved 17/03/2014 17/03/2017 16/03/2024 273,334 116.50 9 9
4,531,000
19 BORROWINGS
The Company repaid the two-year revolving facility of £4,000,000 on 12 August 2013. 54
Notes to the financial statements continued
20 BUSINESS COMBINATIONS
Acquisitions have been accounted for by the purchase method of accounting. The goodwill arising on these acquisitions is subject to 
annual impairment reviews.
There were no acquisitions during the year ended 31 May 2014.
RealTime Health Limited
During the year ended 31 May 2013 the Group acquired 100% of the share capital of RealTime Health Limited. The maximum 
consideration, of up to £7,162,000 was structured as an initial payment of £1,162,000 and an earn-out of up to £6,000,000 in tranches. The 
initial consideration of £1,162,000 was paid in cash during the year ended 31 May 2013. Deferred consideration of up to £6,000,000, 
payable in cash, is contingent upon the meeting of conditions, including achieving a number of demanding billings targets and key staff 
retentions, during the 24 months following acquisition.
The initial accounting for the acquisition was completed during the year ended 31 May 2013, resulting in the recognition of goodwill of 
£64,000 and an intangible asset of £1,533,000 in relation to the software product acquired. The useful life of the intangible asset has 
been assessed as 8 years and this asset will therefore be amortised over 8 years
For accounting purposes IFRS3 ‘Business Combinations’ required the £6,000,000 deferred consideration to be treated as remuneration 
and not consideration. Consequently an expense of the expected amount of consideration would be taken to the Income Statement on 
a straight-line basis over the 24-month period. The targets triggering the payment of contingent consideration have not been met and 
are not expected to be met and so no charge has been recognised in the Income Statement.
21 TRADE AND OTHER PAYABLES
2014 2013
Group
Current 
£’000
Non-current 
£’000
Total 
£’000
Current 
£’000
Non-current 
£’000
Total 
£’000
Trade payables 422 – 422 810 – 810
Other taxation and social security 3,281 – 3,281 3,345 – 3,345
Accruals 4,074 – 4,074 2,912 – 2,912
Deferred income 12,407 2,396 14,803 11,765 2,817 14,582
20,184 2,396 22,580 18,832 2,817 21,649
2014 2013
Company
Current 
£’000
Non-current 
£’000
Total 
£’000
Current 
£’000
Non-current 
£’000
Total 
£’000
Trade payables 236 – 236 639 – 639
Amounts owed to subsidiary companies 1,113 – 1,113 1,838 – 1,838
Other taxation and social security 2,411 – 2,411 2,336 – 2,336
Accruals 2,788 – 2,788 1,725 – 1,725
Deferred income 9,912 2,396 12,308 8,700 2,721 11,421
16,460 2,396 18,856 15,238 2,721 17,959
The Group’s and Company’s payables are unsecured and approximate to fair value.
22 FINANCIAL INSTRUMENTS
Group
The Group’s financial instruments comprise cash and liquid resources, receivables, borrowings and payables. These all arise directly 
from the Group’s operations.
It is, and has been throughout the period under review, the Group’s policy that no other trading in financial instruments shall be undertaken. Allocate Software plc
Annual Report and Accounts 2014
55
Overview
Strategic Report
Governance
Financial Statements
Company Information
22 FINANCIAL INSTRUMENTS continued
Financial instruments by category
2014 
£’000
2013 
£’000
Financial assets:
Non-current
Trade and other receivables – loans and receivables 1,082 615
Current
Trade and other receivables – loans and receivables 13,297 11,874
Trade and other receivables – non-financial assets 793 1,013
Total 14,090 12,887
Cash and cash equivalents – loans and receivables 13,659 13,134
Financial liabilities:
Non-current
Trade and other payables – non financial liabilities 2,396 2,817
Current
Borrowings – other financial liabilities – 4,000
Trade and other payables – other financial liabilities 4,496 3,722
Trade and other payables – non financial liabilities 15,688 15,110
Total 20,184 22,832
There is no material difference between the book value and the fair value of these financial assets and financial liabilities.
The main risks arising from the Group’s financial instruments are interest rate risk, liquidity risk and foreign currency risk. The board 
reviews and agrees policies for managing each of these risks and they are summarised below. These policies were fully reviewed by the 
board during the year and no significant changes were required.
Market risk
Foreign exchange risk
The Group undertakes transactions in foreign currencies and as a result is exposed to foreign exchange risk. These consist of the 
monetary assets and liabilities of Group companies that are not denominated in the functional currency of the respective Group 
company. The resulting exposures are summarised below:
Euro
£’000
Swedish 
Krona
 £’000
Australian 
Dollars 
£’000
US Dollars 
£’000
Malaysian 
Ringgits 
£’000
2014 72 535 1,124 890 453
2013 143 1,299 470 2,054 544
The figures above are based on the following exchange rates:
2014 2013
Euro 1.2295 1.1676
Swedish Krona 11.1515 10.0236
Australian Dollars 1.7984 1.5708
US Dollars 1.6742 1.5164
Malaysian Ringgits 5.3807 4.6560
For a movement of plus or minus 5% in the above exchange rates, the carrying values would be changed as set out below. Profit and 
equity would be impacted by these amounts.
Resulting change
2014 
£’000
2013 
£’000
Euro 3 7
Swedish Krona 25 62
Australian Dollars 54 22
US Dollars 42 98
Malaysian Ringgits 22 26 56
Notes to the financial statements continued
22 FINANCIAL INSTRUMENTS continued
The Group’s approach to managing foreign currency risk is set out in the Directors’ report.
Interest rate risk
The Group finances itself through a combination of equity and debt. The Group’s policy is to borrow on a floating rate basis and, if 
appropriate, it will enter into arrangements to fix the cost of borrowings. The Group has not used interest rate derivatives in the year.
At 31 May 2014 the Group’s financial assets, other than receivables, amounted to cash and cash deposits totalling £13,659,000  
(2013: £13,134,000).
At 31 May 2014 the Group had a £nil (2013: £4,000,000) loan facility. The interest rate was 2% above HSBC bank base rate.
The Directors do not intend to use swap arrangements to mitigate the risk of interest rate movements as any likely movement in the 
interest rate of this will not be significant. A movement of plus or minus 1% in the interest rate charged on borrowings would have 
resulted in a reduction or increase in profit and equity of £nil (2013: plus or minus £40,000).
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. In order 
to minimise this risk the Group endeavours only to deal with companies and public sector bodies which are demonstrably creditworthy 
and this, together with the aggregate financial exposure, is continuously monitored. The maximum exposure to credit risk is the value of 
the outstanding amount of the Group’s financial assets £28,038,000 (2013: £25,623,000).
The majority of the Group’s trade receivables are from government health, defence, education and local authorities. The Group has 
trade receivables resulting from sales of products and services, which management consider to be of low risk, other receivables consist 
predominantly of deposits and prepayments. Management does not consider there is any concentration of risk within either trade or 
other receivables.
As at 31 May 2014 there were 2 customers who individually accounted for 5% or more of total outstanding trade receivables (2013: 3 
customers). These 2 customers comprised 40% of trade receivables (2013: 3 customers 39%), all of whom are highly rated government 
bodies or companies with a strong payment history.
Deposits of cash are placed only with financial institutions whose credit rating is high.
Liquidity risk
Deposits with the Group’s bankers are placed when cash is available surplus to immediate requirements. The Group repaid its loan 
facility of £4,000,000 during the year.
The provision of cash for the payment of day-to-day business commitments is carefully monitored and forecasts are made of future cash 
requirements. There are no significant single amounts due for payment in the foreseeable future other than those arising in the normal 
course of business. The loan facility was repaid on 12 August 2013.
Financial liabilities mature according to the following schedule:
2014
Within 
one year 
£’000
One to 
two years 
£’000
Two to 
five years 
£’000
Over 
five years 
£’000
Trade and other payables 4,496 – – –
2013
Within 
one year 
£’000
One to 
two years 
£’000
Two to 
five years 
£’000
Over
 five years
 £’000
Trade and other payables 3,722 – – –
Borrowings 4,025 – – –
Capital risk management
The Group’s capital management objectives are to ensure its ability to continue as a going concern and to provide an adequate return 
to shareholders. The Group will also seek to minimise the cost of capital and attempt to optimise the capital structure which currently 
comprises equity raised through the AIM market of the London Stock Exchange. The details of the Group’s issued share capital and any 
share issues are disclosed in note 17.
The Group monitors cash balances and prepares regular forecasts which are reviewed by the board. Since the year end the Directors 
have proposed the payment of a dividend. In order to adjust or maintain the capital structure the Group may adjust the amount of 
dividends paid to shareholders, return capital to shareholders issue shares or sell assets to reduce debt. Allocate Software plc
Annual Report and Accounts 2014
57
Overview
Strategic Report
Governance
Financial Statements
Company Information
22 FINANCIAL INSTRUMENTS continued
Company
The Company’s financial instruments comprise cash and liquid resources, receivables, borrowings and payables. These all arise directly 
from the Company’s operations.
It is, and has been throughout the period under review, the Company’s policy that no other trading in financial instruments shall be 
undertaken.
The main risks arising from the Company’s financial instruments are interest rate, liquidity risk and foreign currency risk. The board 
reviews and agrees policies for managing each of these risks and they are summarised below. These policies were fully reviewed by the 
board during the year and no significant changes were required.
Financial instruments by category
2014 
£’000
2013 
£’000
Financial assets :
Non-current
Trade and other receivables – loans and receivables 771 615
Current
Trade and other receivables – loans and receivables 13,283 10,596
Trade and other receivables – non-financial assets 509 783
Total 13,792 11,379
Cash and cash equivalents – loans and receivables 8,510 9,049
Financial liabilities :
Non-current
Trade and other payables – non financial liabilities 2,396 2,721
Current 
Borrowings – other financial liabilities – 4,000
Trade and other payables – other financial liabilities 4,137 4,202
Trade and other payables – non financial liabilities 12,323 11,036
Total 16,460 19,238
There is no material difference between the book value and the fair value of these financial assets and financial liabilities.
Market risk
Foreign exchange risk
The Company’s exposure to foreign exchange risk has decreased during the year.
The table below shows the Company’s currency exposures. These consist of the monetary assets and liabilities of the Company that are 
not denominated in the Company’s reporting currency, which is UK sterling.
Euro
£’000
Swedish 
Krona
 £’000
Australian 
Dollars 
£’000
US Dollars 
£’000
Malaysian 
Ringgits 
£’000
2014 72 535 1,124 890 453
2013 143 1,299 470 2,054 544
Foreign exchange positions are regularly monitored and managed, through mitigating (where possible) the Company’s foreign currency 
assets and liabilities to appropriate levels. The Company’s approach to foreign currency risk management is set out in the Directors’ report.
For a movement of plus or minus 5% in the above exchange rates, the carrying values would be changed as set out below. Profit and 
equity would be impacted by these amounts.
Resulting change
2014 
£’000
2013 
£’000
Euro 3 7
Swedish Krona 25 62
Australian Dollars 54 22
US Dollars 42 98
Malaysian Ringgits 22 26 58
Notes to the financial statements continued
22 FINANCIAL INSTRUMENTS continued
Interest rate risk
The Company finances itself through a combination of equity and debt. The Company’s policy is to borrow on a floating rate basis and, 
if appropriate, it will enter into arrangements to fix the cost of borrowings. The Company has not used interest rate derivatives in the 
year. During the year ended 31 May 2014, the Company had a revolving loan facility which is at floating rates based on HSBC Bank’s 
sterling base rate plus 2.0%. This loan was repaid in full on 12 August 2013.
The Directors do not intend to use swap arrangements to mitigate the risk of interest rate movements as any likely movement in the 
interest rate of this will not be significant. A movement of plus or minus 1% in the interest rate charged on borrowings will result in a 
reduction or increase in profit and equity of £nil (2013: plus or minus £40,000).
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. In 
order to minimise this risk the Company endeavours only to deal with companies and public sector bodies which are demonstrably 
creditworthy and this, together with the aggregate financial exposure, is continuously monitored. The maximum exposure to credit risk 
is the value of the outstanding amount of the Company’s financial assets £22,564,000 (2013: £20,260,000).
The Company has trade receivables resulting from sales of products and services, which the management consider to be of low risk, 
other receivables consist predominantly of deposits and prepayments. A substantial majority of trade receivables are due from national 
or local government bodies in the health and defence sectors. The management do not consider that there is any concentration of risk 
within either trade or other receivables.
Deposits of cash are placed only with financial institutions whose credit rating is high.
Liquidity risk
Deposits with the Company’s bankers are placed when cash is available surplus to immediate requirements. The Group repaid its loan 
facility of £4,000,000 on 12 August 2013. At the statement of financial position date the amount drawn down was £nil.
The provision of cash for the payment of day to day business commitments is carefully monitored and forecasts are made of future cash 
requirements. There are no significant single amounts due for payment in the foreseeable future other than those arising in the normal 
course of business.
Fair value
The fair values of all financial assets and liabilities at 31 May 2014 and 31 May 2013 were not materially different from their book values.
23 OPERATING LEASE COMMITMENTS
The table shows the total of future minimum lease payments under non-cancellable operating leases for each of the following periods:
Group
2014 
£’000
2013 
£’000
Land and buildings:
Within one year 748 488
Two to five years 1,959 88
2,707 576
Equipment:
Within one year 151 14
Two to five years 181 17
332 31
Company
2014 
£’000
2013 
£’000
Land and buildings:
Within one year 494 376
Two to five years 1,470 18
1,964 394
Equipment:
Within one year 1 1
Two to five years 2 2
3 3 Allocate Software plc
Annual Report and Accounts 2014
59
Overview
Strategic Report
Governance
Financial Statements
Company Information
24  RELATED PARTY TRANSACTIONS
(i) Remuneration of Key Management Personnel
Group and Company
2014 
£’000
2013 
£’000
Short-term employee benefits 1,352 1,057
Post-employment benefits 47 46
Remuneration benefits 3 3
Share-based payments 293 162
1,695 1,268
The Group and Company consider that the Directors are their key management personnel and further detail of their remuneration is 
disclosed in the Remuneration report.
Dividends of £20,000 were paid to key management personnel in the year (2013: £26,000).
(ii) Intercompany transactions
The Company had the following intercompany transactions:
2014 
£’000
2013 
£’000
Intercompany sales 1,723 1,899
Intercompany purchases (41) (433)
Intercompany dividend income 1,154 1,064
Intercompany interest expense (32) (26)
Intercompany interest income 139 159
2,943 2,663
At the year end the Company had the following balances with subsidiaries:
2014 
£’000
2013 
£’000
Allocate Software Inc. 874 973
Allocate Software Technology Systems Limited (21) 4
Allocate Software Sendrian Berhad 453 554
Allocate Software Pty Ltd 1,123 469
Dynamic Change Limited (401) (396)
Time Care AB (535) (1,299)
RealTime Health Limited (121) (116)
Zircadian Holdings Limited 424 424
Zircadian Limited (35) (27)
1,761 586
In addition, as part of the net investment in note 14, an amount of £1,857,000 (2013: £2,126,000) is a long term loan from the Company to 
Allocate Software Pty Ltd and this long term loan, as well as the long term loan from Time Care AB to the Company included above, is 
interest-bearing.
All other intercompany balances are non-interest bearing and are repayable on demand.
25 TRANSFERS OF TRADE AND ASSETS
On 1 November 2012 the trade and assets of RealTime Health Limited were transferred to Allocate Software plc with consideration 
equal to the net assets value transferred.
26 CONTINGENT LIABILITIES
Neither the Group nor the Company had any contingent liabilities at either 31 May 2014 or 31 May 2013.
27 CAPITAL COMMITMENTS
Neither the Group nor the Company had any capital commitments at either 31 May 2014 or 31 May 2013.
28 EVENTS AFTER THE STATEMENT OF FINANCIAL POSITION DATE
There were no events after the statement of financial position date which require disclosure as at the date the financial statements were 
signed 18 July 2014. 60
Directors and advisers
Company registration number: 2814942
Registered office: 1 Church Road
Richmond
TW9 2QE
Directors: I J Bowles
J I Lang (Resigned Nov 2013)
T H Osborne
A R D Pringle
A A Swann
R W King
C D Gale
L Drummond
G F Rich (Appointed Dec 2013)
Secretary: C D Gale 
Nominated adviser and broker: Numis Securities Limited
10 Paternoster Square
London
EC4M 7LT
Bankers: HSBC Bank plc
65 Packhorse Road
Gerrards Cross
Buckinghamshire
SL9 8PH
Solicitors: Taylor Wessing LLP
5 New Street Square 
London 
EC4A 3TW
Auditor: Grant Thornton UK LLP
Registered Auditors
Chartered Accountants
Grant Thornton House
Melton Street
Euston Square
London
NW1 2EP
Website: www.allocatesoftware.com   Allocate Software plc Annual Report and Accounts 2014
Allocate Software plc
1 Church Road
Richmond
TW9 2QE
Tel: +44 (0)20 7355 5555
Fax: +44 (0)20 7355 5588
www.allocatesoftware.com