Advanced Computer Software Group plc Annual report 2013

Directors’ reportPrincipal activitiesAdvanced is a leading provider of software andIT services for organisations in the public, privateand not for profit sectors delivered through its threedivisions: Health & Care, Business Solutions and365 Managed Services.Its principal subsidiary undertakings are listed innote 23 to the financial statements on page 64.Business reviewThe Company is required to produce a business reviewwhich complies with section 417 of the Companies Act2006. A detailed review of the Group’s activities, its keyperformance indicators and a description of the principalrisks and uncertainties which it faces, can be found inthe business review section on pages 8 to 19.Corporate governance statementThe corporate governance statement, which formspart of this directors’ report, is set out on pages 26 to 28.Results and dividendsThe results for the year are set out in the consolidatedincome statement on page 35. Continuing Group profitfor the year after provision for taxation was £9.1m(2012: £5.9m).The Board’s dividend policy is to consider paymentof a dividend in light of the Group’s working capitalrequirements, the ongoing needs of the business andits merger and acquisition activities. Accordingly,the directors recommend the payment of a maidendividend of 0.4p per share (2012: £nil). If approved atthe annual general meeting, the dividend will be paidon 8 October 2013 to shareholders on the register at theclose of business on 13 September 2013.AcquisitionsDuring the year, the Group made a number ofacquisitions, details of which are set out in the businessreview and note 11 to the financial statements.Post balance sheet eventsOn 7 March 2013, Advanced acquired the entire issuedshare capital of Computer Software Holdings for net cashconsideration of £107.0m.Further details are set out in the Chairman’s statementand Chief Executive’s review and in note 26 to thefinancial statements.Research and developmentDuring the year, the Group capitalised £2.1m (2012:£1.8m) of development costs relating to internal softwaredevelopment in accordance with IAS38. Other researchand development costs not meeting the criteria forcapitalisation were written off during the year.Financial instrumentsThe Group uses financial instruments to manage certaintypes of risks including those relating to credit, market,interest rates, currency exchange and liquidity. Detailsof the objectives and management of these instrumentsand an indication of the exposure of the Group to suchrisks are contained in note 20 to the financial statements.Political and charitable donationsThe Group made charitable donations in 2013 of£24,000 (2012: £0.3m) including a donation of £15,000to The Prince’s Trust for membership of its TechnologyLeadership Group.In accordance with Board policy, no political donationswere made during the year (2012: £nil).Directors and their interestsThe table below sets out the beneficial interests in theCompany’s shares of those persons who were directorsat the end of the financial year:2013Number ofordinary shares2012Number ofordinary sharesVin Murria,Chief Executive Officer 36,550,867 36,050,867Barbara Firth, COO,Acquisitions andIntegration 250,000 250,000Paul Gibson, COO,Operations (appointed19 November 2012) Nil N/aGuy Millward,Chief Financial Officer(appointed19 November 2012) Nil N/aMichael Jackson,Non-Executive Chairman 736,149 1,681,525Mike McGoun,Non-ExecutiveDirector (appointed19 November 2012) Nil N/aOn 14 March 2013, Vin Murria and Barbara Firth eachacquired 30,250 ordinary shares of 10p each in theCompany, following the exercise of SAYE optionsat a price of 30p per share. Since the year end, bothVin Murria and Michael Jackson have transferred partof their shareholdings into self-invested personal pensionarrangements. No other changes have taken place in theabove interests of the directors between 28 February 2013and 21 June 2013, being the latest practicable date priorto publication of this report.The biographical details of the persons currently servingas directors appear on page 21.Overview Business review Governance FinancialsAdvanced Computer Software Group plcAnnual Report 201323