Vous êtes sur la page 1sur 50

Northgate Information

Solutions Limited
Peoplebuilding 2
Peoplebuilding Estate
Maylands Avenue
Hemel Hempstead
HP2 4NW
01442 232424
Northgate Information Solutions Limited Summary Annual Report and Accounts 2012/2013

www.northgate-is.com

Northgate Information Solutions Limited


Summary Annual Report and Accounts 2012/2013

Directors and Advisers

Public and private organisations need to


partner with service providers who offer
the right combination of industry knowledge,
technical expertise and flexible services.
This combination is required to evolve
their business processes and, ultimately,
provide better services while transforming
their operations for greater efficiency
and effectiveness.
Northgate Information Solutions is a leader
in helping clients transform business-critical
operations to deliver more efficient and
effective people-critical services.
Through our two business divisions
NGA Human Resources and Northgate
Public Services (NPS) we provide
software solutions and technology services
for human resources management and for
organisations across the public sector.

Directors
Adel Al-Saleh Group Chief Executive
Brian Carroll Chairman
William L. Cornog Non-Executive Director
John R. Stier Group Finance Director
Edouard Pillot Non-Executive Director
Special Adviser to the Board
Sir Roger Carr
Registered Office
Peoplebuilding 2
Peoplebuilding Estate
Maylands Avenue
Hemel Hempstead
HP2 4NW
Registered Number
6442582
Auditors
KPMG Audit Plc
15 Canada Square
London E14 5GL
Bankers
Barclays Bank Plc
28 George Street
Luton LU1 2AE

The Northgate Advantage


What sets our businesses apart is The Northgate Advantage the critical
combination of deep market experience and insight, advanced technology
platforms and applications, and unparalleled, flexible service delivery. By
combining these three capabilities we help set the benchmark for services
that enable organisations to improve processes and reduce costs.
While NGA Human Resources and Northgate Public Services apply their
market experience, technical expertise and service delivery capabilities in
unique ways, both are focused on one goal: improving critical processes
and creating business efficiencies while at the same time improving the
services delivered to their clients.

Deep Market
Experience
and Insight

Flexible
Service
Delivery
Options

Advanced
Technology
Platforms and
Applications

Northgate Information Solutions Limited

__01

Deep Market Experience and Insight


NGA Human Resources

Our many years of experience with HR systems and processes benefit our clients in
different ways. Globally, we understand the business of HR and the role it plays within
an organisation. It is this understanding, combined with our technology expertise and
superior service delivery, that ensures we deliver the greatest impact for our clients.
At the same time, our local presence around the world ensures that our clients and their
employees are served by people who not only know what it means to live and work in
a region, but who have deep knowledge of local laws and compliance requirements.
Our knowledge and experience span more than 100 countries, thereby allowing us to
develop solutions which are unmatched by even our largest competitors.
Global experience and best practices combined with local knowledge and service
delivery and the flexibility to capitalise on both is how NGAs experience and
insight make a measurable difference for our clients.

We demonstrate to
clients how global best
practices can help
solve their toughest
business challenges,
while at the same
time giving them the
flexibility to maintain
existing processes
those that best suit
their business and
culture.
Anita Lettink
Vice President, Northern Europe
NGA Human Resources

02__Summary Annual Report and Accounts 2012/2013

The Know-How to Turn Three Teams into One


NGA recently signed a seven year contract with Selex ES,
AugustaWestland and Finmeccanica, to integrate its Human
Resources Payroll solutions, which is expected to save the
Group significantly in administration and professional time.
An international leader in electronic and information
technologies for defence systems, aerospace, data,
infrastructures, land security and protection, and sustainable
smart solutions, Finmeccanica and its companies employ
nearly 8,000 people.
Working on extremely short timelines, all three companies
wanted to consolidate services for HRO and payroll on a
single platform. While the Group had previously used a variety
of HR systems, NGA was able to present those options that
accommodated the existing delivery models and worked
with the Group to create a solution with the flexibility and
scalability to evolve with its business. NGA is migrating the
Groups current services to our fully integrated HR and payroll
solution, ResourceLink Aurora, which will be managed from
our Birmingham Centre of Excellence.

Its rewarding when


clients appreciate
the quality and
consistency of our
global capabilities,
and then experience
the same value in
our local services.
Thats when they
ask, Whats next?
What more can you
do for us? then
we know were doing
something right.

A Universal Solution to Empower Employees


NBCUniversal is a global media company with geographically
dispersed team members across the US, UK, Europe,
Asia and Latin America. Employing approximately 25,000
employees, the companys HR technology landscape is
centred across a diverse portfolio of SAP, euHReka and
third party systems. NBCUniversal leverages the complete
functionality of SAP HCM and delivers the employee
experience for all HR processes via NGAs euHReka solution.
NBCUniversals extensive range of HR technologies is
clearly aligned to the long term NBCU business strategy and
matches the companys direction for a unified, simplified and
scalable user experience maintaining lowest TCO.

Keith Strodtman
President, North America Region
NGA Human Resources

With the help of NGA, NBCUniversal has embarked on a


journey to further expand business functionality, optimise
key HR processes and further enhance the overall HR
technology landscape in view of the companys global focus.
NBCUniversal is also assessing the options for mobile access
to HR business solutions for key users.
The response from employees and managers has been
overwhelmingly positive, resulting in significant improvements
in day to day HR operations and transactions. Going forward,
NBCUniversal plans on further improving its HR technology
landscape by enhancing the user experience and upgrading
systems performance. NBCUniversal will also be assessing
harmonisation options with its parent company Comcast, to
ensure systems alignment and reuse of systems, applications
and processes for increased efficiency and effectiveness.

Northgate Information Solutions Limited

54.5%

88%

Percentage of more than


1,100 respondents in NGAs
bi-yearly HR survey who
believe that, over the next
three years, securing the
right people at the right
place and time will be
critical in delivering their
organisations vision.

Percentage of Eurozone
employees holding the lowest
expectations for pay raises
across NGAs 2012 Global
Pay Optimism Index study.
With pay raises still difficult
for companies to deliver,
business leaders need to
find other ways to make their
employees feel valued. For
example, after pay, relatively
low-cost initiatives such as
flexible work schedules are
hugely valued by employees.

__03

Deep Market Experience and Insight


Northgate Public Services

Northgate Public Services (NPS) expertise


and insight into public sector processes has
been developed through decades of close
working relationships with public authorities
in the UK, Australia, New Zealand and North
America. In the UK specifically, we work
with every local authority and every police
force, and our systems are used in every
public hospital.
Our effectiveness in the public sector is
a result of staying continually abreast of
changes in public authority regulations and
compliance requirements at the local level.
With that knowledge, we then work closely
with our clients to design and deploy the
most effective solutions for each authority,
in each locality.

1.2m
Number of joint
replacement
procedures
registered by
Northgate

13m

With our experience


in welfare reform
issues such as
council tax, housing
benefits and social
fund, we are called
to consult with
legislators who must
determine paths
for improvement,
as well as the
authorities charged
with implementing
these changes. Its
rewarding to play
such a central role
in helping to define
and deliver these
critical services.
Nigel Blair
Head of Product
Management and Innovation
Northgate Public Services

Number of council
tax bills generated

16bn

Value of those tax bills

04__Summary Annual Report and Accounts 2012/2013

Measuring Performance to
Protect Public Safety
The National Joint Registry (NJR), delivered by
Northgate since 2006 on behalf of Healthcare
Quality Improvement Partnership (HQIP), is the
biggest registry of its kind in the world.
To date, the NJR has collected information on
more than 1.2 million procedures, providing an
invaluable resource on the safety, effectiveness
and performance of implant joints.
As a result of the register, the governments
Medicines and Healthcare products Regulatory
Agency has withdrawn certain types of hip
replacement devices, while other products have
been voluntarily withdrawn from the UK market.
Each hospital can be immediately contacted
to alert clinicians and patients in order to take
remedial action where required a process that
was not possible previously, but can now be
achieved within 48 hours.

I am very proud
of how we supported
the UK welfare
reform initiatives.
We quickly combined
our solutions
with new provider
partnerships to
deliver critical, fully
managed services
to those in our
society who need
our help most.
Sue Holloway
Director, Services Strategy
Northgate Public Services

Understanding How to Drive Change for Welfare Reform


The UK governments welfare reform programme has called for major changes in the administration
of welfare services. Changes have been mandated for rapid implementation, posing challenges for
authorities to create and deploy new processes by the service delivery deadlines.
NPS initially secured nine managed service contracts with local authorities supporting in the delivery of
the Local Welfare Provision (in England) and the Scottish Welfare Fund. We successfully delivered entirely
new solutions, on time, by staying close to the changing regulations; communicating even more closely
with the authorities working to implement the changes; and applying our best-practice experience and
proven software solutions. We tailored our own solutions and combined them with new service delivery
partnerships, to deliver a fully managed service (Business Process as a Service, or BPaaS) to English
and Scottish authorities.
NPS has also contracted an additional 55 clients for their SaaS (Software as a Service) offering. This
provides a full system for assessing and managing claims as well as enabling local authorities to provide
a public website for citizens to check their eligibility and make applications.

Replicating Success Across Geographies


Leveraging the same core technologies and knowledge of welfare reform, NPS has also been awarded a
contract by the Welsh Government to deliver the Welsh Discretionary Assistance Fund (DAF) for two years
from April 2013.
The Welsh DAF is entirely grant-based and addresses the wider needs of applicants, in particular those
who are vulnerable and financially excluded. NPS administers the programme nationally on behalf of the
government, in partnership with Family Fund Trading Ltd. and Wrexham County Borough Council, ensuring
it is accessible to anyone wishing to apply.

Northgate Information Solutions Limited

__05

Advanced Technology Platforms and Applications


NGA Human Resources

NGA has a long history of delivering market-leading technology for HR process


support. Today, the company provides clients with the flexibility to deploy NGAs
flagship platforms, such as euHReka, Preceda and ResourceLink Aurora, or to
use other leading technology solutions such as those from SAP, SuccessFactors,
Oracle and Workday.
Whichever platforms the clients prefer, and regardless of whether they want to
run their programme on premise, in the cloud, or through an outsourced solution,
NGA stands alone in its ability to plan, deploy and provide fully managed services
delivered locally, around the world.

We integrate our own technology with that of other HR platforms,


on premise or in the cloud, which we then operate locally all
around the world. No one else can deliver this combination of global
HR process know-how and deep technical capabilities to enable
integrated HR solutions.
Johan Bosschaerts
Senior Vice President, Products
and Offerings Development
NGA Human Resources

1,000

Number of new client wins in the


first year for Moorepayhr, a cloudbased HR and payroll solution
from NGAs Moorepay division.
The solution closes the gap for
small and medium businesses
(with 5 to 1,000 employees) that
want the same HR functionality
and self-service access afforded
larger organisations.

06__Summary Annual Report and Accounts 2012/2013

8 of 8
Number of leading HR
technology platforms
on which NGA can
deploy, manage and
provide comprehensive
HR services, including
Workday, SAP, Oracle
Fusion, PeopleSoft,
SuccessFactors,
euHReka, Preceda
and ResourceLink.

Migrating to a Better Connected Solution


Prysmian Group is a world leader in the energy and telecom cables
and systems industry. The companys strong growth and acquisition of
one of its main competitors (the Dutch company Draka) led to a new
HR challenge: Systems migration, automation and global support
all of which had to be based on first-class technology.
It sought the expertise of an HR services provider that could not only
manage the data migration and replication but, at the same time,
advise on elements like automation, usage on mobile platforms and
HR services delivery that are best in class, generating additional
efficiencies and cost savings.
The solution involved Prysmian migrating SAP payroll and HR data
while adding NGA employee and manager self-service functionality
(ESS and MSS) on top of the existing system to automate timeconsuming processes. The new system supports use on mobile
devices, which makes data even easier for managers to access.
As a result, Prysmian reduced its payroll costs and HR services system
by approximately 20%, resulting in the companys future flexibility,
allowing for the expansion of NGAs technology and services globally,
including multicountry HR services.

An Australian
client with
100,000+
employees told
me that they
have used our
technology to
run weekly
payroll for more
than 20 years,
and theyve never
missed a pay
date. That tells
me why clients
place their trust
in NGA.
Sam Xydias
Vice President, Product Engineering
NGA Human Resources

Northgate Information Solutions Limited

__07

Advanced Technology Platforms and Applications


Northgate Public Services

NPS advanced technology solutions for the public sector are increasingly being used
by providers around the world.
What makes our technology applications different are our deeply specialised
solutions, developed to address local public service issues and challenges. We are
more frequently offering our applications through the cloud, providing our clients with
a more standardised and cost-effective means of delivering world-class solutions
without the higher costs and risks of traditional systems. Our collaborative policing
and social housing management solutions are a great example of this.

I see our impact


when Im told by a
client, it took us
15 years to build
a system to meet
our needs. You did
it in a matter of
months.
Sharon Jackson
International Sector Manager, Housing
Northgate Public Services

08__Summary Annual Report and Accounts 2012/2013

Improving Services for Housing Tenants


NPS completed the latest stage of its transformation
partnership with Housing New Zealand Corporation in
August 2012, bringing significant service improvements
to the corporations 200,000 tenants.
Its Kotahi system is powered by Northgates specialised
housing solution, allowing staff to accurately assess and
match the tenants needs with the housing stock available,
taking into account factors such as the number of bedrooms,
proximity to schools and availability of disabled access.
The result has been shorter vacancy periods for properties as
well as improved outcomes for tenants and a more consistent
and transparent national process for housing allocation. A
single view of the clients and properties is new for the users,
and is helping them to give tenants a better service and
taxpayers a better return on investment in housing.

Technology That Puts Our Clients Customers First


CityHousing Hamilton, a public housing provider in
Ontario, Canada, began using NPS advanced property
management solution its first software implementation
of this magnitude in September 2012. NPS technology
has helped to streamline back-office processes and put
customers at the centre of service delivery strategy.
CityHousing Hamilton can now conduct a more cohesive
analysis of the changing needs of its tenants, staff and
assets. It has enabled optimisation of contracted services
and improved cost recovery for billable services.
With the enhanced record keeping within the NPS software,
workflows have been improved and lifecycle and recidivism
of tenancies in housing tracked. Fingertip access to accurate
reporting allows for improved property management and
tracking of key performance indicators.

This goes far


beyond a new
computer system
it will enable the
corporation to give
tenants better service
and taxpayers a
better return on our
$15 billion housing
investment.
The Honourable Phil Heatley
Former New Zealand Housing Minister

Athena Supports Law and Justice Across the UK


Athena is reshaping police collaboration, bringing local UK
forces together to connect information, align processes and
share costs. Athena is the largest ever collaborative police
ICT project outside of a national programme.
Athena forces will manage and share information in four
key areas: intelligence, investigation management (including
crime, public protection and antisocial behaviour), managing
defendants in custody and all types of case file preparation
for court. As well as sharing information more easily across
force boundaries, Athena will enable police forces to
significantly streamline the way which data is recorded
within the force.
Currently, information on suspects, defendants, witnesses
and missing people is often stored in different databases,
all of which have to be updated separately. The financial
savings and improved efficiencies that will result from using
one shared ICT system are hugely important.

3m

The number of properties


we support worldwide,
through more than 100
housing providers

Northgate Information Solutions Limited

35%
The percentage of the
UKs social housing
stock supported by
Northgate solutions

__09

Flexible Service Delivery Options


NGA Human Resources

What sets NGA apart from all other HR service providers is not only its unique ability
to deliver HR services globally, but to do so with local-market service delivery in more
than 100 countries around the world.
NGA has three Premium Service Centres which do the heavy lifting involved in global
data collection, processing and management. Our nine Strategic Delivery Centres in key
locations around the world coordinate global and regional services, and 19 Local Support
Offices provide local-market consulting, compliance training and service delivery.
This global consistency and efficiency, combined with in-depth local knowledge and
service delivery, is unique among global HR and payroll services firms. Additionally,
we are able to give clients a single point of contact for a global relationship
streamlining everything from managing business agreements to addressing service
needs anywhere around the world.

NGA offers the highest


level of global HR
capabilities, combined
with experts in localmarket payroll and
regulatory issues. We
continually refresh
this local knowledge
to provide the latest
training and support
for our clients.
Monica Luzon
Vice President, Global
Operations, Delivery Centre
NGA Human Resources

19

Number of Local Support Offices


around the world, through which we
offer unmatched levels of local-market
knowledge and service delivery

100+
Countries in which we
deliver services through
our local centres

Number of Strategic
Delivery Centres
that manage and
coordinate localmarket HR and
payroll services

10__Summary Annual Report and Accounts 2012/2013

MK Dons Score with Moorepay


Moorepay, NGAs division for small and medium businesses,
was founded in 1966 and is one of the UKs leading providers
of outsourced payroll and HR solutions, supporting more than
10,000 clients and processing more than one million payslips each
month. In the past year, 1,000 clients signed up for Moorepays
innovative cloud-based HR offering, including Milton Keynes
Dons Football Club (MK Dons).
Based in Buckinghamshire, England, MK Dons has more than
600 employees and, until recently, had been working with a
manual payroll system.
Working together with MK Dons, Moorepay developed a cloudbased solution, giving its employees access to the information,
as and when it is required, while at the same time allowing them
to focus on those activities that add value to the business.

Our clients often


struggle with the
question of whether
to enjoy the benefits
of local HR service
delivery, or to opt for
the efficiency of a
global capability. With
us, theres no need to
choose we can
give them both.
Jodi Hayes-Roth
Vice President, Service Delivery Operations
NGA Human Resources

Improving HR Health with a Global Remedy


Hospira, Inc. is the worlds leading provider of injectable drugs and infusion
technologies, and offers one of the broadest portfolios of generic acutecare and oncology injectables, as well as integrated infusion therapy and
medication management solutions. Headquartered north of Chicago in Lake
Forest, Illinois, Hospira has approximately 16,000 employees worldwide and
generated approximately $4.1 billion in net sales in 2012.
Hospira has been an NGA client since 2004 with a scope of work that
includes comprehensive payroll, benefits administration, ESS/MSS and
applications maintenance of its SAP system. In February 2013, it expanded
the partnership to include deployment of NGAs global euHReka system
for core HR, with employee and manager self-service as well as call-center
support, and it is currently implementing the solution for all 16,000 Hospira
employees in 41 countries globally.
By deploying euHReka globally, Hospira will have a single HR system of record
that will provide consistent data on all employees and contractors worldwide.
The company will be able to run HR reports at the global level, by region, and
individual country, and because NGA will host the system, Hospira can reduce
its support and resource costs.

Northgate Information Solutions Limited

20%

of Fortune 500
companies are
clients of NGA.

__11

Flexible Service Delivery Options


Northgate Public Services

NPS has a long track record


of outstanding service delivery
for clients, based on a deep
understanding of the complex,
evolving and often challenging
issues which surround the
delivery of services to the public.
Much of our recent success has
been based on expanding into
areas where our technology
can underpin significant
performance improvement
in service delivery.

Weve come
a long way in
10 years, from
being an ICT
organisation to
now leveraging
our knowledge
and technology
to provide
services like
infant screening
in Ireland and
elsewhere. Its
truly remarkable
and incredibly
rewarding.
Alan Campbell
Head of Screening Services
Northgate Public Services

Delivering Services in the First Hours of Life


One of the most dramatic examples of critical service delivery is NPS
hearing screening service for newborn babies across the Republic of
Ireland, on behalf of Irish Health Service Executive (HSE).
The service, which was piloted at Cork University Maternity Hospital in
Ireland before being rolled out nationally, delivers hearing tests for babies
by trained NPS hearing screeners. The tests are carried out hours after
birth, usually at the mothers bedside. Babies who do not have a
clear response in one or both ears after the initial test will be seen for
a full assessment shortly after they are discharged from the hospital.
With our on-line screening information solution, we have been able
to quickly and effectively introduce newborn hearing screening to
Ireland and help to improve the lives of infants through early intervention.
Through the service, the average time to detect, diagnose and intervene
for hearing-impaired children has been reduced from 36 months to
less than three months. This can have a dramatic impact in helping
children surmount their initial challenges and develop at the same rate
as their peers.

12__Summary Annual Report and Accounts 2012/2013

What impresses
me about working
for Northgate
is the companys
willingness to
develop new
capabilities
that can make
a difference in
peoples lives.
Thats a fantastic
thing to be able
to do.
Alan Campbell
Head of Screening Services
Northgate Public Services

Achieving Better Quality of Life


The transformation of Adults Social Services in the UK is at a critical
point. The need to support an aging population in the face of diminishing
budgets presents a difficult challenge to local authorities. The requirement
is for a model of care that helps people to live better and longer lives
whilst maintaining their independence.
NPS believes that delaying long-term dependent care through
business intelligence and interventions is vital for the future of adult
social care. In support of this, we recognise the significance of
personalisation, prevention, re-ablement and multi-agency cooperation
across health and social care.
We provide a flexible suite of solutions to support these priorities. For
example, the NPS Personalisation solution has been designed to be
highly configurable in order to meet the varying needs of our client base
and to accommodate future change. The assessment, support planning,
resource allocation and risk management methodologies that drive our
multi-channel solution are all within the control of the local authority,
allowing a streamlined, joined-up multi-agency approach at a reduced
cost of ownership.

Northgate Information Solutions Limited

74,000
Number of newborns
screened in Ireland
in 2012
__13

Financial Highlights

To clarify for the reader of the accounts, we have adjusted the continuing operating
profit and EBITDA* for continuing operations for years ending 30 April 2012 and
30 April 2013, to account for one-off items, property provisions and amortisation
of acquired intangibles.
2012

2013

Revenue
Adjusted operating profit before significant
restructuring, one-off items, property provisions,
amortisation of intangibles, depreciation and
impairment of fixed assets (EBITDA)
Adjusted operating profit before significant
restructuring, one-off items, property
provisions, amortisation of acquired
intangibles and impairment of fixed assets
Significant restructuring, one-off items
and property provisions
Impairment of intangible fixed assets
Impairment of tangible fixed assets
Profit on sale of pensions business
Loss on sale of managed services business
Amortisation of acquired intangibles
Group operating (loss)/profit

Total

Continuing
operations

Discontinued
operations

Total

Total
change
(% yty)

110.1m

802.0m

709.4m

141.6m

851.0m

(6)%

140.4m

14.0m

154.4m

130.6m

14.6m

145.2m

6%

107.5m

8.4m

115.9m

94.4m

6.7m

101.1m

15%

(53.6)m
(7.3)m
(1.2)m

(52.6)m

(1.8)m

(37. 5)m
(0.3)m

(55.4)m
(7.3)m
(1.2)m

(37.5)m
(52.9)m

(41.9)m

5.0m

(56.1)m

(1.8)m

(1.7)m

(43.7)m

5.0m

(57.8)m

(27)%
(100)%
(100)%
(100)%
(100)%
8%

(7.2)m

(31.2)m

(38.4)m

1.4m

3.2m

4.6m

(934)%

Continuing
operations

Discontinued
operations

691.9m

Continuing and Discontinuing Activities


Group
*EBITDA (m)

Revenue (m)
2013

802.0

2013

154.4

2012

851.0

2012

145.2

2011

816.2

2011

127.5

Operating Cash Flow (m)

Order Book (m)

2013

74.1

2013

1,402.0

2012

96.6

2012

1,597.0

2011

84.2

2011

1,584.5

Continuing Activities
NGA Human Resources (NGA)
Revenue (m)

*EBITDA (m)

2013

523.0

2013

104.4

2012

549.8

2012

98.2

2011

514.9

2011

80.2

Northgate Public Services (NPS)


Revenue (m)

*EBITDA (m)

2013

168.9

2013

39.3

2012

159.6

2012

37.3

2011

170.4

2011

36.5

14__Summary Annual Report and Accounts 2012/2013

Group Chief Executives Review

which is particularly important as we accelerate our growth


and leadership in markets around the world.
The end result of all of this has been solid financial
performance and significant progress in meeting our
strategic agenda.
Overall Performance
As a group we delivered 7.5% adjusted EBITDA growth
on continuing operations year-on-year 1.9 points of
margin improvement on a 2.5% revenue decline (excluding
Managed Services).
Adel Al-Saleh
Group Chief Executive

Transforming Ourselves
and Our Clients
To Our Stakeholders:
Its been a productive year for the Northgate companies.
Weve delivered a solid performance while transforming our
businesses in several ways not only refining our strategy
but sharpening our ability to execute more powerfully, and
in more markets, around the world. We have truly become
a global, technology-based services company, delivering
business-critical organisational change to drive peoplecritical results. At the same time, we translated our strategy
into several key programmes and initiatives that allowed our
teams to play a more active role in support of our strategy.
Programme eNergISe is the overarching programme for
all these initiatives across the business, which focuses the
whole organisation on ways to drive innovation, accelerate
growth, improve operational excellence and, most importantly,
get our employees energised and excited about the future
of our company.
In terms of our business mix, while our Northgate Managed
Services (NMS) division was operating strongly, it was
not scaled to support our strategy for delivering integrated,
global value and growth. As a result, we sold NMS to Capita
in February 2013. We then moved forward better able to
align our capital and resources behind our two strategic
businesses in human resources and public sector services.
As we continued to execute against our strategy, we also
restructured the NGA division, streamlining management and
evolving the Go To Market model, while continuing to scale
our delivery capabilities and changing the name of the unit from
NorthgateArinso to NGA Human Resources. While the new
name maintains a connection to the Groups heritage, it does
two important things for us moving forward: It capitalises
on the NGA acronym which is widely used by customers,
and it provides a clearer understanding of our role in HR,

Northgate Information Solutions Limited

Northgate Public Services (NPS) delivered a solid 5.8%


year-on-year revenue growth, demonstrating our success
in driving our growth agenda in Policing, Local Government
Solutions, Business Process Outsourcing and Healthcare.
NGA Human Resources revenue performance of -4.9%
was influenced by our deliberate strategy to transform
NGAs consulting and systems integration business from a
country-based model to a global practice. Revenue growth
was also impacted by the change in how clients purchase
our software solutions moving from licence fees to
SaaS and BPaaS models.
Across both divisions, our operations and delivery teams
continued to drive impressive productivity improvement,
achieving outstanding profits which led to continuous
margin improvement in the year, delivering 1.9 points of margin
improvement from continuing activities year-on-year.
Performance Across Our Divisions
Northgate Public Services (NPS)
The NPS business division delivered a strong performance
in the year, with overall revenue growth of 5.8% and 5.3%
EBITDA growth.
Under Dave Meadens leadership, an emphasis on innovation
and on expanding our replicable solutions across international
markets has helped fuel our growth, and the team has
solidified our leading positions in the Government, Housing,
Police and Healthcare markets.
Growth drivers included the repurposing of our core
technology platforms and applications to support multiple
new projects in local government, such as welfare reform
initiatives in the UK and Scotland.
International housing solutions continued to make strides
in the UK, Australia and New Zealand, including Housing New
Zealand Corporation. In Canada, we are the market leader in
public housing applications, including CityHousing Hamilton.
The Athena programme in policing (Police ERP) continued to
gain momentum, with increased collaboration with the police
forces to provide case management ERP solutions. We now
have seven forces in the programme, with an increasing
interest from several dozen forces to join the programme.

__15

Group Chief Executives Review (contd)

Business Process Outsourcing wins were also key


contributors to NPS growth, including contracts with the
Welsh Government, Information Commissioners Office
and Cambridge City Council.
Our innovation has also led to the delivery of such peoplecritical services as the Healthcare Quality Improvement
Programme (HQIP), Northgates Screening Management and
Reporting Tool (SmaRT), and Newborn Hearing outsourcing
services which are expanding throughout Europe.
NGA Human Resources
NGA Human Resources had a more challenging year. Whilst
overall EBITDA growth was 6.3%, the business declined
in revenue to 523.0 million, mainly driven by two factors:
1. Deliberate transformation of our consulting and systems
integration business from a country-based practice to
a global practice becoming tip of the arrow for our
annuity business.
2. Change in how our clients buy and implement software
solutions, from a licence-based model to SaaS and
BPaaS models.
Through these changes, NGA continued to evolve its
business model to a technology-based global service
provider. Becoming a leader in global HR services with
truly local-market knowledge and delivery capabilities
makes NGA unique in the industry.

Northgate companies are leaders


in combining all the key requirements
for true business transformation
deep industry knowledge, the ability
to leverage and integrate diverse
technologies, and integrated global
delivery capabilities complemented
by local knowledge.
As the business evolves, we see payroll and workforce
administration as central to our growth in global customer
relationships. Uniquely, NGA can flexibly deploy a combination
of our own BPaaS platforms (euHReka, Preceda and
ResourceLink), as well as support our partners platforms.
In the year, NGA Human Resources continued to develop
and grow key strategic partnerships and integrated solutions
with Oracle, SAP, SuccessFactors and Workday.
As a result of this transformation, our outlook is promising.
NGA delivered 627m in contract signings during the year,
36% year-to-year growth. We secured several key renewals
in the year and won significant new clients, including Aer
Lingus, Pirelli, Whole Foods, Swarowski, DSM and Orica.

16__Summary Annual Report and Accounts 2012/2013

The investment in NGAs sales engine and the launch of


our new Go To Market model helped grow NGAs order book
well in excess of 1bn. As we boosted our presence in Asia
with the opening of an office in Japan and the expansion of
our Chinese operations, the global HR operations and delivery
teams delivered impressive revenue and profit growth.
NGA Human Resources is evolving, and I am confident we
are on the right track to get back to top-line growth by end
of FY14.
FY13/14 Outlook
Our plans for this coming year include a focus on continued
customer satisfaction and quality improvements, creating
platforms for sustainable growth, driving operational
efficiencies and investing in the development of our 11,000
employees around the world.
From a broader perspective, I am often asked, Why do we
win in the marketplace? People want to know what makes
Northgate different. The answer is what we describe as The
Northgate Advantage, which helps us to set our business
apart from competitors.
The message is that Northgate companies are leaders
in combining all the key requirements for true business
transformation deep industry knowledge, the ability to
leverage and integrate diverse technologies, and integrated
global delivery capabilities complemented by local knowledge
and service expertise. Combining these capabilities is
what sets a new industry benchmark for services that can
improve business processes and reduce costs. This is the
Northgate Advantage.
Along with this fundamental message, we have refreshed
our visual identity to enhance our communications to all our
stakeholders across NIS, NGA and NPS. Our new look
is clean, modern and refined, with updated use of colour,
photography, graphics and typography. This will help to
distinguish our communications, as we continue to demonstrate
our value and uniqueness in the marketplace.
In closing, I would like to take the opportunity to thank all
of our clients for their continued loyalty and trust in our ability
to deliver. I would also like to thank our most critical asset,
each and every one of our employees, for their continued
dedication and commitment to ensure the client remains
at the centre of everything we do.

Adel Al-Saleh
Group Chief Executive
29 August 2013

Business Review

China. NGA Africa a joint venture


with South-African IT provider Business
Connexion will allow us to deliver HR
solutions across sub-Saharan Africa.

NGA Human Resources (NGA)


2013

2012

%
Change

Turnover
523.0m
Divisional operating
profit before
depreciation
and amortisation
(adjusted EBITDA) 104.4m
Divisional operating
margins
20.0%
Order book
1,110m

549.8m

-4.9%

98.2m

6.3%

17.9%
991m

11.8%
12.0%

Capitalising on Our Advantage


During FY13, we continued to evolve
and enhance our capabilities with the
focus on sharpening and delivering on
the NGA Advantage in the marketplace.
We have addressed a number of
components of our business model,
transforming our HR consulting
practice, refocusing our Go To Market
efforts, streamlining our service
delivery network, and driving customer
centricity and satisfaction as enterprisewide priorities.
Over the year, EBITDA grew by 6.3%
to 104.4m. The business model
changes have repositioned the
company, resulting in an increase in
Total Contract Value (TCV) signed of
36% year to year to achieve 627m,
passing the previous years total sales,
which bodes well for next fiscal year.
Our order book has grown to 1.1bn
and our sales pipeline has exceeded
the 1bn mark.
On the sales side, we have energised
our Go To Market, creating a globally
aligned sales force targeting the
enterprise segment. Building on the
sales success of the past year, we will
continue to fine tune our sales engine,
focusing on annuity-based revenue
models such as BPO and BPaaS.
Going forward, we will increasingly
focus on large global employers,
and on mid-market and SME market
segments in the UK, Ireland, Australia
and New Zealand.

Northgate Information Solutions Limited

We have increased
Total Contract Value
(TCV) signed of 36%
year to year to achieve
627m, passing the
previous years total
sales, which bodes well
for next fiscal year.
Adel Al-Saleh
Chief Executive,
NGA Human Resources
As the consulting market continues
to contract following the fast adoption
of cloud-based systems, NGA
has transformed its HR consulting
practice. Our Service Readiness and
HR Consulting activities have been
combined under the umbrella of
CTS Cloud Transformation Services.
The focus of CTS is to be the tip of
the arrow for our annuity business,
helping clients transform processes and
transition to new operating models.
On the service delivery side, NGA
has seen solid profit overachievement
and continuous margin improvement.
Our teams have delivered a significant
shift in our operating model as we
scaled our global delivery centres
and implemented a customer-centric
coverage model. We have introduced
a range of initiatives to drive quality and
customer satisfaction, by standardising
and automating processes across
our centres.

NGAs Intellectual Property (IP) remains


a key differentiator, as well as the
foundation for our HR services offering.
Our HR platforms have been refocused
to deliver a comprehensive range of
services across the employee lifecycle
and our service delivery tools have seen
a steady stream of innovation.
NGA has also further expanded its
relationships with key technology
providers. We have delivered a set
of standardised connectors, allowing
SaaS platforms such as Workday and
SuccessFactors to seamlessly connect
with NGAs global payroll solutions.
Also, we have expanded the platforms
on which we deliver HR outsourcing
services to include Workday and
SuccessFactors, in addition to our
long-established BPO capabilities
around SAP and Oracle.
As part of our continuing transformation,
NorthgateArinso has formally adopted
a new name, symbolising our new,
differentiated value proposition.
NGA Human Resources connects
the company to our heritage and
underlines our commitment to HR.
Our renewed brand also introduces
The NGA Advantage, which
represents the combination of NGAs
deep HR experience and insight,
advanced technology platforms and
applications, and a global portfolio of
flexible service delivery options. This
combination this advantage
allows our customers to focus on
making HR work better, and developing
HR into a valued business partner
that contributes strategically to
corporate success.

Global growth remains key to NGAs


business model, and in the past year
weve boosted our presence in Asia,
establishing a dedicated presence in
Japan, and expanding our footprint in

__17

Business Review (contd)

Northgate Public
Services (NPS)
2013

2012

%
Change

Turnover
168.9m
Divisional operating
profit before
depreciation
and amortisation
(adjusted EBITDA) 39.3m
Divisional operating
margins
23.3%
Order book
292m

159.6m

5.8%

37.3m

5.3%

23.4%
303m

%
-3.6%

A Successful Year
Northgate Public Services (NPS) is
an integrated software and outsourcing
services business. Our solutions
are used extensively in the areas of
Government, Housing, Police and
Healthcare where we have marketleading positions. I am pleased to
announce that our strong performance
in the second half of FY11/12 has
continued with FY12/13 producing
overall revenue growth of 5.8% with
EBITDA growth of 5.3%.
We have focused on the expansion of
our commercial offerings to meet client
requirements, specifically leading the
way in the delivery of Software as a
Service (SaaS) and Business Process
Outsourcing (BPO) propositions that
improve performance outcomes.
We have secured significant strategic
contracts in all of our chosen markets
and have now secured over 60m
of SaaS contracts. This, combined
with investment in targeted growth
initiatives, provides us with a secure
foundation for continued success.
Change
Many of the worlds leading economies
continue to wrestle with the dual
challenge of low economic growth and
high levels of sovereign debt. In the
UK this means the landscape for the
provision of government services has
changed dramatically and irrevocably.
NPS is right at the heart of this
revolution. Above all we value our ability
to innovate and to couple this with
real insight into the needs of our clients.

We have also extended our Newborn


Hearing Screening outsourcing
service across the whole of the
Republic of Ireland, and expanded
the National Joint Registry service to
include Northern Ireland;

We have continued
to deliver a strong
performance in the
provision of public
sector services, both
in the UK and abroad.
David Meaden
Chief Executive
Northgate Public Services
I am immensely proud of our people
and the way we have understood
the challenges in our markets. The
future will be demanding and exciting
in equal measure but I am confident
of our ability to work alongside our
clients to deliver improved services and
better outcomes at lower cost for all
stakeholders.
Success during the year has included:
New contracts with the Welsh
Government to deliver new welfare
services. As part of our commitment
to Wales and the Welsh people, we
have launched the Wales Advisory
Board Bard Ymgynhorol Cymru.
Our new Advisory Board will work
with us to establish a credible
platform to further demonstrate
our capabilities;
A contract with the Information
Commissioners Office to provide
managed ICT services;
The Healthcare Quality Improvement
Programme (HQIP) to support a new
bloodspot screening service for newborn babies;
The roll-out of Northgates Screening
Management and Reporting Tool
(SmaRT) for The Newborn Infant
Physical Examination Programme
(NIPE) in England;

18__Summary Annual Report and Accounts 2012/2013

Further police forces have also


become members of the Athena
collaboration, for which we are
providing the ICT solution.
In 2012, as part of our ongoing
commitment to deliver exceptional
customer services to our clients and
their citizens, the NPS Customer
Service Centre (CSC) based in
Wycombe was awarded the Gold
Standard in service provision.
NPS was also pleased to win the IT
Project Team of the Year at the BCS &
Computing UK IT Industry Awards 2012
for its work delivering the Blue Badge
Improvement Service, which supports the
governments disabled parking scheme.
Our continued focus on innovation
presents opportunities to expand into
new growth areas. Our expertise within
medical device registries is opening
up opportunities to commercialise
healthcare data, while we are taking our
Housing Management solution into new
countries based on our international
success.
Finally, I would like to acknowledge the
dedication and commitment of NPS
colleagues over the last 12 months. In
what has been another tough year for
our clients, our people have continued
to go the extra mile to support those
clients in positively impacting the lives
of millions of people.

Group Finance Directors Review

We will continue to
invest going forward but
the level of investment
has declined to more
historic levels.
Operating Results
Group revenue from continuing
operations declined overall by 2.5%
to 691.9m (2012: 709.4m) in
challenging markets. The PS division
revenue grew organically by 5.8% to
168.9m (2012: 159.6m) and has
made excellent progress focusing on
growth areas of its markets to return
the business to strong growth. NGA
revenues declined by 4.9% to 523.0m
(2012: 549.8m) as the division adjusted
to shifts in the marketplace, particularly
with less perpetual licence fees being
available and lower consultancy.
Group operating profit from continuing
operations before one-off items,
depreciation and amortisation of
intangibles (EBITDA) of 140.4m grew
by 7.5%, driven by PS growth and
efficiency initiatives (2012: 130.6m).
The operating results of the Northgate
Managed Services business are
disclosed as discontinued operations
and are included for the 10 months
prior to disposal with the business
being sold on 13 February 2013.
After one-off restructuring and property
costs of 55.4m (2012: 43.7m),
amortisation of acquired intangibles of
52.9m (2012: 57.8m) and loss on
disposal of the Northgate Managed
Services business of 37.5m (2012:
profit on disposal of pension business
5.0m), the Group recorded an
operating loss of 38.4m (2012: profit
4.6m). Net financing costs decreased
to 82.8m (2012: 84.8m). Loss on
ordinary activities before tax was
121.2m (2012: 80.2m).

Northgate Information Solutions Limited

John R. Stier
Group Finance Director
One-off Items
During the year the Group recorded
net one-off costs of 55.4m (2012:
43.7m) as the Group continued its cost
reduction programme, including the off
shoring of operational and back-office
functions and the impact of product
strategy review, resulting in some
legacy investments being written off.
Sale of Northgate Managed
Services Business
During the year the Group disposed
of the Northgate Managed Services
business for a value of 70.1m
reflecting a valuation of 10 times EBIT
(see note 1 of the financial statements).
Cash and Financing
During the year the Group experienced
strong cash flow from operations after
one-off items, generating 74.1m
(2012: 96.6m) of net cash from
operating activities. 23.1m was
generated from the sale of noncore assets (2012: 35.6m) and the
Group continued to invest (55.1m) in
software development and fixed assets
(2012: 69.5m) to support further
growth. We will continue to invest going
forward but the level of investment
declined to more historic levels as
we completed the integration of the
Convergys HRM business.
The Group had net debt of 854.7m
at 30 April 2013 (2012: 844.3m) and
cash headroom of 101.6m under their
banking facilities (2012: 108.9m).

Pensions
During the year the Group made deficit
payments of 6.5m (2012: 8.5m)
toward the Groups pension scheme
liabilities.
The Group pension schemes showed
an IAS19 (adjusted for IFRIC14) deficit
of 46.2m at the balance sheet date
(2012: 43.3m).
Going Concern
Post the year end the Group has
secured additional funding from its
funders including shareholders and an
agreement for capital maturity dates
to extend beyond 2017. This secures
the Groups funding requirements for
a number of years with only minimal
amounts of debt being repayable
before September 2017. The Groups
forecasts and projections, taking
account of reasonably possible
changes in trading performance show
the Group will be able to operate
within the level and conditions of
this funding. The directors have a
reasonable expectation that the
Group has adequate resources to
continue in operational existence for
the foreseeable future. Accordingly,
the Group continues to adopt the
going concern basis in preparing its
consolidated financial statements.
Total Equity
Total equity at 30 April 2013 was
65.6m (2012: 189.4m).

John R. Stier
Group Finance Director
29 August 2013

Taxation
The Group continues to benefit from
significant trading and non-trading
losses. Tax paid in the year was 3.7m
(2012: 4.2m).

__19

Our Commitment

Corporate Responsibility
The Northgate Information Solutions
Group is committed to sustainable
growth while promoting social,
economic and environmental
improvement. We recognise that
we all have a positive role to play
in developing a society that meets
the needs of the present, without
compromising the ability of future
generations to meet their needs.
We aim to conduct our business
in a socially responsible manner,
contributing to the communities in
which we operate, while minimising
our impact on the environment.
Governance
Each of our businesses faces different
challenges, and pursues its own
corporate responsibility agenda within
the overall framework set by the
Corporate Responsibility Group (CRG).
Sponsored by Adel Al-Saleh and
including representation from across
the organisation, the CRG advises
the Group Board on CR policy and
practices and is responsible for driving
these initiatives within the business.
Sustainable Services
Combating climate change is integral
to developing sustainable services
for Northgates customers in all
sectors. Environmental sustainability
is fully embedded into service delivery
methodology, with a focus on reducing
the number of assets required and
the environmental impact of the
procurement of such assets, as well
as favouring energy-efficient energy
consumption models. Assets are
reused wherever possible and where
they are beyond economical repair,
they are recycled in accordance with
the Waste Electrical and Electronic
Equipment Directive (WEEE).
We also help our customers to reduce
their emissions through the introduction
of mobile technologies and flexible
working.

Sustainable Procurement
Sustainability considerations are
integrated into our entire procurement
process: in the identification of needs,
evaluation of options, evaluation
of tenders and in post-contract
management. This approach is applied
globally to all new and existing major
suppliers.
Global Compact
NGA Human Resources is a proud
member of the UN Global Compact
and integrates its 10 corporate
responsibility principles into our
business operations and strategies;
including human rights, labour, the
environment and anticorruption.
ActNow
Through Northgates ActNow
programme, every employee can
do something to help deliver value,
and build sustainable and healthy
communities, while embracing
sustainability, community involvement
and engagement. Some examples of
the employee initiatives include:
Through an initiative called Share and
Care, our Mumbai team helped support
the India National Association for the
Blind (NAB), by collecting donations
and raising money to purchase items
for the local NAB rehabilitation centre,
which works to improve the skills and
place visually impaired people into
employment.

to help motivate them to continue down


their current path of success.
In our St. Johns, Newfoundland
location in Canada, employees recently
ran a campaign that generated
$10,000 in donations for the only
childrens hospital in their community. In
addition to their donations, many also
volunteered for the hospitals annual
telethon to help manage the phone
calls and collection of funds.
Throughout all regions, employees
found ways to give back to their
communities, including mentoring,
reading, and donations to their favourite
charities.
Employees Are
Northgates Key Asset
Northgate has continued to support
the Young Apprentice scheme in the
UK, with the last year seeing 43 Young
Apprentices working across a range
of services and clients, while gaining
accreditations in ICT, Customer Service
or Business Administration. Six of these
young people have gone on to become
permanent employees of the company
and several others have used the
skills and experience they have gained
to obtain permanent jobs with other
organisations.
Across our operations, Northgate hired
in excess of 180 trainees, graduates
and apprentices in a variety of roles.

UK offices participated in fund raising


activities for Red Nose Day in support
of the national Comic Relief charity
which helps disadvantaged people
throughout the world.

By enhancing employability through


these schemes, Northgate is
addressing shortages of skilled staff,
gender issues and supply chain issues,
creating a skilled future workforce
which will benefit IT sector growth.

Employees at our Jacksonville, Florida


location host annual charitable giving
campaigns for their local United Way, a
non-profit organisation that disperses
funds in the most impactful ways to
improve education, health and income
in the community. In addition to
raising thousands of dollars each year,
many employees volunteer for local
United Way agencies. Most recently,
hundreds of employees wrote letters of
encouragement for graduating students

Through our Flexible Benefits scheme


our people are able to choose benefits
that best support their lifestyle. In
the UK, 91 charities benefit from
employees using payroll giving; the
carbon offsetting programme supports
four separate projects in Africa, China,
India and Thailand; employees can
participate in the cycle to work scheme,
and in total there are in 134 tonnes of
carbon offset credits.

20__Summary Annual Report and Accounts 2012/2013

Directors Report

Report of the Directors


The Directors present their report and financial statements for the period ended 30 April 2013.
Directors
The Board of Directors consists of the following members who possess the necessary range of backgrounds, qualities and
experience to lead and maintain effective control over Northgates activities. On 27 November 2012 Edouard Pillot was
appointed to the Board as an additional non-executive director. On 18 January 2013 Mateusz Szeszkowski resigned from the
Audit Committee and the Board.
Adel Al-Saleh (Executive) was appointed Group Chief Executive and Director of Northgate Information Solutions Limited on 1
December 2011. He was formerly with IMS Health, where he held several senior positions including President of EMEA, senior
Vice President (VP) Global Pharma Solutions, and President of US. Prior to this, Adel spent 19 years at IBM in several senior
positions, including General Manager of Sales and Industries in the Group's European region, General Manager Global Wireless
Business Unit and General Manager Telco, Utilities and Media and Entertainment Industries Americas region.
Brian Carroll (Non-Executive Chairman and Member of Audit Committee) joined KKR in 1995 and currently heads the Consumer
and Retail teams in Europe. He is also a member of the European Investment Committee and currently a member of the board
of directors of Rockwood Holdings, Laureate Education, Harman International and Pets at Home.
John R Stier (Executive) was promoted to Group Finance Director of Northgate Information Solutions plc (now Northgate
Information Solutions Holdings Limited) on 15 May 2003 and subsequently to Northgate Information Solutions Limited upon the
acquisition by KKR. He is a Fellow of the Institute of Chartered Accountants in England and Wales.
Edouard Pillot (Non-Executive and Chairman of Audit Committee) joined KKR in 2006 and is a member of the Services industry
team within KKR's Private Equity platform. He is also involved in the investment in Maxeda and KION.
William L. Cornog (Non-Executive) joined KKR Capstone in 2002. He currently serves as Head of KKR Capstone Europe and is
a member of KKRs Portfolio Management Committee. Mr Cornog was appointed to the Board of Northgate Information
Solutions Limited on 5 April 2011.
In addition to the Directors, Sir Roger Carr, was appointed as a Special Adviser to the Board from the beginning of February
2011.
Sir Roger Carr is Chairman of Centrica plc, Deputy Chairman of the Court of the Bank of England and is President of the
Confederation of British Industry and a member of the UK Prime Ministers Business Advisory Group. He is also a senior advisor
to KKR. He has previously held a number of senior appointments including Chairman of Cadbury plc, Chairman of Chubb plc,
Chairman of Thames Water plc and Chief Executive of Williams plc.
The Board discharges its responsibilities by providing leadership of the Northgate Group within a framework of prudent and
effective controls, which enables risk to be assessed and managed. It sets Northgates strategic aims, ensures that the
necessary financial and human resources are in place for the Group to meet its objectives and reviews management
performance.
Risk assessment
The Board has overall responsibility for the Groups approach to assessing risk and the systems of internal control, and for
monitoring their effectiveness in providing its ultimate stakeholders, being certain funds advised by KKR, with a return that is
consistent with a responsible assessment and mitigation of risks. This includes reviewing financial, operational and compliance
controls and risk management procedures, which themselves include the security and controls around its customers and inhouse data. The Board has established ongoing processes for identifying, evaluating and managing the significant risks faced
by the Group which accord with the Internal Control Guidance for Directors in the Combined Code (which only applies to UK
listed companies but is used for best practice). Further independent assurance is provided by an internal audit function,
operating across the Group, and the Groups auditors. All employees are accountable for operating within these policies.

Northgate Information Solutions Limited

__21

Directors Report (continued)

Internal Control
Whilst the Board maintains full control and direction over appropriate strategic, financial, organisational and compliance issues, it
has delegated to executive management the implementation of the systems of internal control within an established framework.
The Board has put in place an organisational structure which formally defines lines of responsibility and delegation of authority.
There are also established procedures for planning, capital expenditure, information and reporting systems and for monitoring
the Groups businesses and their performances.
Assurance
On behalf of the Board the Audit Committee examines the effectiveness of the Groups:
assessment of risk by reviewing evidence of risk assessment activity and a report from internal audit on the risk assessment

process; and
systems of internal control primarily through agreeing the scope of the internal audit programme and reviewing its findings,

reviews of the annual financial statements and a review of the nature and scope of the external audit.
Any significant findings or identified risks are closely examined so that appropriate action can be taken. The work of the internal
audit department is focused on areas of priority as identified by the risk analysis and in accordance with the annual audit plan
approved by the Audit Committee and the Board. External auditors are engaged to express an opinion on the financial
statements. They review and test the systems of internal financial control and the data contained in the financial statements to
the extent necessary to express their audit opinion. They discuss with management the reporting of operational results and the
financial position of the Group and present their findings to the Audit Committee.
Audit Committee
The Committee assists the Board in fulfilling its overview responsibilities, primarily reviewing the reporting of financial and nonfinancial information, the systems of internal control and risk management, and the audit process. It comprises Edouard Pillot
(chairman) and Brian Carroll. The Committee intends to meet at least three times a year and the Group Chief Executive, the
Group Finance Director, the Group Internal Audit Director and our Auditors, KPMG Audit Plc, will attend the meetings by
invitation.
The terms of reference of the Audit Committee, including its role and the authority delegated to it by the Board, are available
from the Group Company Secretary.
Auditors
Our auditors, KPMG Audit Plc has instigated an orderly wind down of business. The Board has decided to put KPMG LLP
forward to be appointed as auditors and resolution concerning their appointment will be put to the forthcoming AGM of the
company.
Dividend policy
The Board reviews the dividend policy in conjunction with a policy of retaining significant funds for future growth. No dividends
were declared during the year under review.
Employees
We actively promote an internal recruitment process encouraging internal succession planning and career development.
All UK employees have the opportunity to elect members to an Employee Consultation Group (ECG). The ECG meets formally
with Northgates management on a quarterly basis to discuss issues of importance. The Group also has a number of works
councils and employee groups in place across the globe to ensure effective communication takes place with all employees.

22__Summary Annual Report and Accounts 2012/2013

Directors Report (continued)

Equal Opportunities and Diversity


Northgate aims to be an employer of choice for people from different backgrounds and through our policy and mandatory
diversity training (completed annually) we promote respect for the individual and equality of opportunity for employment,
development and promotion. Opportunities also exist for employees of the Group who become disabled to continue their
employment or to be trained for other positions in the Group. An Equality Survey is conducted regularly.
Health and Safety
Northgate has an established health and safety policy that focuses on the ability to measure performance and to pursue
continuous improvement in managing health and safety. The policy is reviewed regularly by the Health and Safety Manager.
Financial
Northgate has access to sources of capital that are sufficient to develop the business. Its funds are provided by a syndicate of
leading banks and under the current agreements Northgate can call on up to 101.6m of unused facilities at 30 April 2013 (30
April 2012: 108.9m). These arrangements and the recurring nature of much of Northgates businesses give confidence over
Northgates financial strength, and provide the basis on which future investment decisions can be taken. The Board continually
reviews the performance of its divisions and regularly reviews its divestment versus investment strategy in each case.
Donations
During the period the Group made no charitable or political donations.
Relationships with key stakeholders
Northgate manages its relationships with its key stakeholder groups as follows:
Customers
Northgates customers have a nominated individual through which all customer contact is managed. Larger customers have
dedicated account managers, or teams that focus directly on customer needs. A number of active user groups are in place
where customers can provide feedback on product performance, future requirements and issues of strategic significance.
Suppliers and partners
Northgate performs reviews of its key suppliers and partners on a regular basis to ensure that maximum performance and value
are being obtained, and that risk and reward are equitably shared. Northgate negotiates clear agreements within which the
Group and its suppliers operate.
Significant events since the period end
As noted in the Group Finance Directors review on page 19, post the year-end the Group has secured additional funding and an
agreement for capital maturity dates to extend beyond 2017.
Except for any matters referred to elsewhere in this Report and Accounts, there have been no other significant events affecting
Northgate or any of its subsidiary undertakings since the end of the financial period.

Northgate Information Solutions Limited

__23

Directors Report (continued)

Disclosure of information to auditors


The directors who held office at the date of approval of this directors report confirm that, so far as they are each aware, there is
no relevant audit information of which the Groups auditors are unaware; and each director has taken all the steps he ought to
have taken as a director to make himself aware of any relevant audit information and to establish that the Groups auditors are
aware of that information.

John D Richardson
Group Company Secretary
29 August 2013

24__Summary Annual Report and Accounts 2012/2013

Statement of Directors Responsibilities in Respect of the


Annual Report and the Financial Statements

The directors are responsible for preparing the Annual Report and the group and parent company financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare group and parent company financial statements for each financial year. Under
that law they have elected to prepare the group financial statements in accordance with IFRSs as adopted by the EU and
applicable law and have elected to prepare the parent company financial statements in accordance with UK Accounting
Standards and applicable law (UK Generally Accepted Accounting Practice).
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and
fair view of the state of affairs of the group and parent company and of their profit or loss for that period. In preparing each of the
group and parent company financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
for the group financial statements, state whether they have been prepared in accordance with IFRSs as adopted by the EU;
for the parent company financial statements, state whether applicable UK Accounting Standards have been followed, subject

to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and the

parent company will continue in business.


The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the parent
companys transactions and disclose with reasonable accuracy at any time the financial position of the parent company and
enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for
taking such steps as are reasonably open to them to safeguard the assets of the group and to prevent and detect fraud and
other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial information included on the
companys website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from
legislation in other jurisdictions.

Northgate Information Solutions Limited

__25

Independent Auditors Statement to the Members of


Northgate Information Solutions Limited

We have examined the summary financial statement for the year ended 30 April 2013 which comprises the Summary
consolidated income statement, Summary statement of financial position, Summary consolidated statement of changes in
equity, Statement of recognised income and expense, Summary consolidated cash flow statement and related notes set out on
pages 27 to 46.
This statement is made solely to the companys members, as a body, in accordance with section 427 of the Companies Act
2006. Our work has been undertaken so that we might state to the companys members those matters we are required to state
to them in such a statement 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 companys members as a body, for our work, for this statement, or for
the opinions we have formed.
Respective responsibilities of directors and auditors
The directors are responsible for preparing the summarised annual report in accordance with applicable United Kingdom law.
Our responsibility is to report to you our opinion on the consistency of the summary financial statement within the summarised
annual report with the full annual financial statements, the Directors Report and its compliance with the relevant requirements of
section 427 of the Companies Act 2006 and the regulations made thereunder.
We also read the other information contained in the summarised annual report and consider the implications for our report if we
become aware of any apparent misstatements or material inconsistencies with the summary financial statement.
Basis of opinion
We conducted our work in accordance with Bulletin 2008/3 The auditors statement on the summary financial statement in the
United Kingdom issued by the Auditing Practices Board. Our report on the groups full annual financial statements describes the
basis of our audit opinions on those financial statements and the Directors Report.
Opinion
In our opinion the summary financial statement is consistent with the full annual financial statements and the Directors Report of
Northgate Information Solutions Limited for the year ended 30 April 2013 and complies with the applicable requirements of
section 427 of the Companies Act 2006 and the regulations made thereunder.
We have not considered the effects of any events between the date on which we signed our report on the full annual financial
statements 29 August 2013 and the date of this statement.
Paul Gresham (Senior Statutory Auditor)
For and on behalf of
KPMG Audit Plc (Statutory Auditor)
Chartered Accountants
15 Canada Square
London
E14 5GL
29 August 2013

26__Summary Annual Report and Accounts 2012/2013

Group Income Statement


for the year ended 30 April 2013

Notes

Continuing Discontinuing Year ended


Operations
Operations 30 April 2013
(note 1)
Total
m
m
m

Continuing DiscontinuingYear ended 30


Operations
Operations
April 2012
(note 1)
Total
m
m
m

691.9

110.1

802.0

709.4

141.6

851.0

(699.1)

(141.3)

(840.4)

(709.7)

(136.7)

(846.4)

(7.2)

(31.2)

(38.4)

(0.3)

4.9

4.6

Operating profit before significant


restructuring, one-off items,
property provisions, amortisation of
intangibles, depreciation and
impairment of fixed assets

140.4

14.0

154.4

130.6

14.6

145.2

Amortisation of other intangible fixed


assets

(15.5)

(0.4)

(15.9)

(24.4)

(0.3)

(24.7)

Depreciation of tangible fixed assets

(17.4)

(5.2)

(22.6)

(16.0)

(7.6)

(23.6)

4.2

4.2

107.5

8.4

115.9

94.4

6.7

101.1

(53.6)

(1.8)

(55.4)

(41.9)

(1.8)

(43.7)

Impairment of intangible fixed assets

(7.3)

(7.3)

Impairment of tangible fixed assets

(1.2)

(1.2)

Revenue
Operating costs

Group operating (loss)/profit

Profit on disposal of fixed assets

Operating profit before significant


restructuring, one-off items, property
provisions, amortisation of acquired
intangibles and impairment of fixed
assets
Significant restructuring, one-off items
and property provisions

Profit on disposal of pensions business

5.0

5.0

Loss on disposal of managed services


business

(37.5)

(37.5)

(52.6)

(0.3)

(52.9)

(56.1)

(1.7)

(57.8)

(7.2)

(31.2)

(38.4)

1.4

3.2

4.6

5.4

5.4

10.5

0.3

10.8

Financial expenses

(86.8)

(1.4)

(88.2)

(95.3)

(0.3)

(95.6)

Net financing costs

(81.4)

(1.4)

(82.8)

(84.8)

(84.8)

Loss before tax

(88.6)

(32.6)

(121.2)

(83.4)

3.2

(80.2)

9.1

(7.3)

1.8

18.6

(2.3)

16.3

(Loss)/profit for the year from


continuing/discontinuing operations

(79.5)

(39.9)

(119.4)

(64.8)

0.9

(63.9)

(Loss)/profit for the year from


discontinued operations

(39.9)

0.9

(119.4)

(63.9)

Amortisation of acquired intangibles


Group operating (loss)/profit
Financial income

Tax credit/(charge)

Attributable to:
Equity holders of the parent

The notes on pages 32 to 46 are an integral part of these consolidated financial statements.

Northgate Information Solutions Limited

__27

Group Statement of Comprehensive Income


for the year ended 30 April 2013

Notes

Year ended
30 April 2013
m

Year ended
30 April 2012
m

6
6

(119.4)
11.6
4.4
(25.1)

(63.9)
(2.3)
3.2
(14.9)

Deferred tax IFRIC14 movement


Deferred tax on actuarial (losses) on defined benefit pension schemes

(128.5)
(1.1)
5.8

(77.9)
(0.9)
4.2

Total recognised income and expense for the year

(123.8)

(74.6)

Attributable to:
Equity holders of the parent

(123.8)

(74.6)

Loss for the year


Foreign exchange translation differences
IFRIC14 Movement in pension deficit
Actuarial (losses) on defined benefit pension schemes

The notes on pages 32 to 46 are an integral part of these consolidated financial statements.

28__Summary Annual Report and Accounts 2012/2013

Group Statement of Financial Position


as at 30 April 2013

2013
m

2012
m

771.3
329.2

822.7
381.5

Total intangible assets


Property, plant and equipment
Other receivables

1,100.5
36.9
9.0

1,204.2
63.2
9.8

Total non-current assets

Notes

Non-current assets
Goodwill
Acquired and other intangible assets

1,146.4

1,277.2

Current assets
Inventories goods for resale
Trade and other receivables
Cash and cash equivalents

0.3
204.5
93.7

3.2
239.1
34.8

Total current assets

298.5

277.1

1,444.9

1,554.3

911.5
46.2
3.6
34.0
12.4

844.3
43.3
11.6
33.1
4.6

1,007.7

936.9

28.6
6.5
9.5
320.6
6.4

24.9
7.8
10.4
364.9
20.0

Total assets
Non-current liabilities
Interest-bearing loans and borrowings
Employee benefits
Provisions
Deferred tax liabilities
Other financial liabilities

5
6
7
9(f)

Total non-current liabilities


Current liabilities
Interest-bearing loans and borrowings
Provisions
Taxation
Trade and other payables
Other Financial liabilities
Total current liabilities
Total liabilities
Net assets
Issued share capital
Share premium account
Capital contribution
Retained earnings
Shareholders funds

5
7

9(f)

371.6

428.0

1,379.3

1,364.9

65.6

189.4

108.2
0.6
442.4
(485.6)

108.2
0.6
442.4
(361.8)

65.6

189.4

The notes on pages 32 to 46 are an integral part of these consolidated financial statements.

Approved by the Board of Directors on 29 August 2013 and signed on its behalf by:
John R Stier
Group Finance Director
29 August 2013

Northgate Information Solutions Limited

__29

Group Statement of Changes in Equity


as at 30 April 2013

Balance at 30 April 2011


Loss for the period
Other comprehensive income for the year:
IFRIC14 Movement in pension deficit
Actuarial losses on defined benefit pension
schemes
Deferred tax IFRIC14 movement
Deferred tax on actuarial losses on defined benefit
pension schemes
Foreign exchange translation differences
Transactions with owners:
Issue of share capital
Balance at 30 April 2012
Loss for the period
Other comprehensive income for the year:
IFRIC14 Movement in pension deficit
Actuarial losses on defined benefit pension
schemes
Deferred tax IFRIC14 movement
Deferred tax on actuarial losses on defined benefit
pension schemes
Foreign exchange translation differences
Balance at 30 April 2013

Share
capital
m

Share
premium
m

Capital
contribution
m

Retained
earnings
m

Equity shareholders
funds
m

108.2

442.4

(287.2)

263.4

(63.9)

(63.9)

3.2

3.2

(14.9)
(0.9)

(14.9)
(0.9)

4.2
(2.3)

4.2
(2.3)

0.6

0.6

108.2

0.6

442.4

(361.8)

189.4

(119.4)

(119.4)

4.4

4.4

(25.1)
(1.1)

(25.1)
(1.1)

5.8
11.6

5.8
11.6

108.2

0.6

442.4

(485.6)

65.6

The notes on pages 32 to 46 are an integral part of these consolidated financial statements.

30__Summary Annual Report and Accounts 2012/2013

Group Statement of Cash Flows


for the year ended 30 April 2013

Year ended
30 April 2013
m

Year ended
30 April 2012
m

(119.4)

(63.9)

52.9
15.9
7.3
22.6
1.2
37.5
82.8
(1.8)

57.8
24.7
23.6
(5.0)
(4.2)
84.8
(16.3)

99.0
5.2
1.6
0.5
(11.7)
(14.0)
(6.5)
74.1

101.5
(7.4)
2.5
2.3
12.2
(6.0)
(8.5)
96.6

23.1

26.5
-

(24.9)
(30.2)
(32.0)
42.1

9.1
(0.5)
(34.6)
(34.9)
(34.4)
62.2

(3.7)

(4.2)

38.4

58.0

1.2
(48.5)
(0.5)

69.0
(20.0)
40.2
(20.9)
20.5

2.4
(67.6)

0.6
1.0
(14.5)
(12.3)
26.6
(7.6)
(71.4)

Cash and cash equivalents at 1 May

34.8

48.2

Net increase/(decrease) in cash and cash equivalents excluding effect of foreign


exchange rate movements on cash held
Effect of foreign exchange rate movements on cash held
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at 30 April

58.6
0.3
58.9
93.7

(13.2)
(0.2)
(13.4)
34.8

Cash flows from operating activities


Loss for the period
Adjustments for:
Amortisation of acquired intangibles
Amortisation of other intangibles
Impairment of other intangibles
Depreciation
Impairment of property, plant and equipment
Loss/(Profit) on disposal of business (note 1)
(Profit) on sale of fixtures and fittings, property, equipment and intangibles
Net financing costs
Tax credit
Net cash from operating activities before changes in
working capital and provisions
Foreign exchange movements
Change in trade and other receivables
Change in inventories
Change in trade and other payables
Change in provisions and employee benefits
Additional pension deficit contributions
Net cash from operating activities before taxes paid
Cash flows from investing activities
Proceeds for sale of pensions business (note 1)
Proceeds for sale of managed service business (note 1)
Proceeds from sale of property, fixtures and fittings, equipment
and intangibles
Acquisition of subsidiary, net of cash acquired
Acquisition of intangible assets
Acquisition of property, plant and equipment
Net cash used in investing activities
Net cash from operations after investing activities
Taxes paid
Net cash from operations after investing activities and before
financing activities
Cash flows from financing activities
Interest received
Interest paid
Cash flows treated as finance costs loan arrangement fees
Issue of shares
Loan to immediate parent undertaking
Movement in borrowings
Repayment of borrowings
Increase in finance lease liabilities
Payment of finance lease liabilities
Net cash from financing activities

The notes on pages 32 to 46 are an integral part of these consolidated financial statements.

Northgate Information Solutions Limited

__31

Notes to the Consolidated Accounts


for the year ended 30 April 2013

1. ACQUISITION AND DISPOSAL OF SUBSIDIARIES


Year ended 30 April 2013
Disposal of Northgate Managed Services Limited Discontinued Operations
On 13 February 2013, the Group disposed of its investment in Northgate Managed Services Limited for a cash consideration of
23.1m and a loss on disposal of 37.5m.
Enterprise value
m

Consideration
Finance lease liabilities
Defined benefit pension liabilities estimated actuarial valuation

23.1
24.0
23.0

Total enterprise value*

70.1

*Enterprise value is defined as the underlying value of the MS divisions trade before adjustments for the pension scheme and
finance lease liabilities. Based on an annual EBIT of 7.0m the sale generated a multiple of 10 times EBIT.
Goodwill of 62.5m and acquired intangibles of 1.6m were disposed of on the sale. As part of the disposal, hire purchase
liabilities of 24.0m and defined benefit pension scheme liabilities (estimated actuarial valuation) of 23.0m were also disposed
of.
Loss on disposal
m

Consideration
Fees
Disposal of goodwill
Disposal of acquired intangibles
Disposal of net assets

23.1
(0.8)
(62.5)
(1.6)
4.3

Loss on disposal

(37.5)

The loss for the year from discontinuing operations is shown on the Group Income Statement on page 27.
Year ended 30 April 2012
Acquisitions
During the year the Group purchased the remaining share in Rave India (Private) Limited for 0.5m taking its
ownership to 100%.
Disposals
On 21 July 2011, the Group disposed of its investment in Northgate HR Pensions Limited for a cash consideration of 26.5m
and a profit on disposal of 5.0m. Goodwill of 7.4m and acquired intangibles of 7.2m were disposed of on the sale.

32__Summary Annual Report and Accounts 2012/2013

Notes to the Consolidated Accounts (continued)


for the year ended 30 April 2013

2. OPERATING COSTS
Year ended
30 April 2013
m

Year ended
30 April 2012
m

0.5

2.3

107.3

143.7

84.4

111.7

- wages and salaries

378.3

365.5

- social security costs

66.8

69.7

- other pension costs defined contribution

7.8

10.2

- other pension costs defined benefit current year service cost

2.5

2.7

17.4

19.7

Depreciation of assets held under finance leases

5.2

3.9

Impairment of tangible fixed assets

1.2

15.9

24.7

Impairment of intangible fixed assets

7.3

Amortisation of acquired intangibles

52.9

57.8

Loss on sale of managed services business (note 1)

37.5

(Profit) on disposal of pensions business (note 1)

(5.0)

(Profit)/Loss on sale of fixed assets

(4.2)

785.0

802.7

31.1

18.7

Business integration, development and business transformation

7.0

12.5

Contract termination costs

9.8

5.0

Property provisions

2.7

1.9

Non recurring fees and other

4.8

5.6

55.4

43.7

840.4

846.4

Change in inventories of goods for resale, excluding impact of disposals


Purchase of goods for resale, raw materials and consumables
Other external operating charges
Staff costs

Depreciation of owned assets

Amortisation of development costs and purchased software

Severance and restructuring

Significant restructuring and property provisions

Total operating costs

These one off costs principally relate to the businesss ongoing cost reduction programme, including offshoring of operational
and back office functions and the impact of product strategy review.

Northgate Information Solutions Limited

__33

Notes to the Consolidated Accounts (continued)


for the year ended 30 April 2013

3. DIRECTORS EMOLUMENTS

Directors emoluments
Company contributions to money purchase pension plans

Year ended
30 April 2013
m

Year ended
30 April 2012
m

2.4
0.1

2.9

2.5

2.9

The aggregate emoluments of the highest paid director were 1,768,000 (2012: 1,108,000) including 45,000 (2012: 15,000)
paid into a money puchase pension plan. At 30 April 2013 and at 30 April 2012, one director had benefits accruing under a
defined benefit pension scheme and one director had benefits accruing under a money puchase pension plan.

4. STAFF NUMBERS
The average number of persons employed by the Group, including Executive Directors, during the year was as follows:
Year ended
30 April 2013
Number

Year ended
30 April 2012
Number

Sales

510

519

Business Transformation

461

252

Operations

5,713

5,440

Product Support

1,334

1,214

HR Consulting

1,351

1,747

814

892

10,183

10,064

2013
m

2012
m

894.7

822.4

16.8

21.9

911.5

844.3

Secured bank loans

16.9

15.3

Finance lease liabilities

11.7

9.6

28.6

24.9

Support Functions

5. INTEREST-BEARING LOANS AND BORROWINGS

Non-current liabilities
Secured bank loans
Finance lease liabilities

Current liabilities

The Groups net bank loans are secured by a cross guarantee and a fixed and floating charge over the assets of the Company
and its material subsidiaries. The interest rate applicable to the Sterling denominated bank loans is LIBOR plus a margin which
varies between 1.75% and 8.5%, depending on the business ratio of debt to EBITDA.

34__Summary Annual Report and Accounts 2012/2013

Notes to the Consolidated Accounts (continued)


for the year ended 30 April 2013

5. INTEREST-BEARING LOANS AND BORROWINGS (continued)


The interest rate applicable to the Euro denominated bank loans is EURIBOR plus a margin which varies between 1.75% and
4.25%, depending on the business ratio of debt to EBITDA. All bank loans at the period end are due in Sterling, Euros or
Australian dollars. Details of the repayment profile are shown in note 9(d). The Groups loan notes are secured by a bank
guarantee.
Group bank loans are stated net of unamortised issue costs of 10.2m (2012: 16.4m). Issue costs, together with the interest
expenses, are allocated to the income statement at a constant rate on the carrying amount. Group bank loans are subject to the
following covenant restrictions:
Ratio of consolidated net borrowings to consolidated EBITDA
Ratio of cash flow to consolidated debt service (interest plus mandated repayments)
Ratio of consolidated EBITA to consolidated net interest
Value of Capital Expenditure in each Financial Year

All covenants are based on International Financial Reporting Standards (IFRS). Failure to meet the covenant restrictions results
in all amounts outstanding, becoming immediately due and payable. There have been no breaches in covenants in the year or
since the inception of the loans.
As noted in the Group Finance Directors review on page 19, post the year-end the Group has secured additional funding and an
agreement for capital maturity dates to extend beyond 2017.
Finance lease liabilities
Finance lease liabilities are payable:

Less than one year


Between one and five years

Minimum
lease
payments
2013
m

Interest
2013
m

15.0
20.2
35.2

Principal
2013
m

Minimum
lease
payments
2012
m

Interest
2012
m

Principal
2012
m

3.3
3.4

11.7
16.8

12.4
25.1

2.8
3.2

9.6
21.9

6.7

28.5

37.5

6.0

31.5

Under the terms of the lease arrangements, no contingent rents are payable.

6. EMPLOYEE BENEFITS
The Group operated four defined benefit pension schemes for its employees, the Northgate Public Services Pension Scheme,
the Northgate Managed Services Pension Scheme, the Northgate HR Pension Scheme (the Northgate Schemes) and the
Rebus Group Pension Scheme (the Rebus Scheme) in the year ending 30 April 2013. During this accounting period, the group
sold Northgate Managed Services Limited and the Group no longer operates the Northgate Managed Services Pension Scheme
as at 30 April 2013. Benefits are related to salary close to retirement or leaving service (if earlier) and also to years of
pensionable service. Assets are held in separate, trustee administered funds. Employer contributions to the schemes are
determined on the basis of regular valuations undertaken by independent, qualified actuaries. The schemes are closed to new
employees, who are instead eligible to join another defined contribution scheme. As the schemes are closed to new entrants for
pension accrual, under the method used to calculate pension costs in accordance with IAS19, the cost as a percentage of
covered pensionable payroll will tend to increase as the average age of the membership increases.

Northgate Information Solutions Limited

__35

Notes to the Consolidated Accounts (continued)


for the year ended 30 April 2013

6. EMPLOYEE BENEFITS (continued)


The Group has adopted the revisions to IAS19 which were published in December 2004. As permitted by the revised standard,
actuarial gains and losses are recognised immediately in the period in which they occur outside the Income Statement through
Other Comprehensive Income.
Northgate
Schemes
2013
m

Rebus
Scheme
2013
m

Total
2013
m

Northgate
Schemes
2012
m

Rebus
Scheme
2012
m

Total
2012
m

171.4
(143.5)

114.6
(96.3)

286.0
(239.8)

245.7
(216.9)

96.0
(85.9)
4.4

341.7
(302.8)
4.4

27.9

18.3

46.2

28.8

14.5

43.3

Northgate
Schemes
2013
m

Rebus
Scheme
2013
m

Total
2013
m

Northgate
Schemes
2012
m

Rebus
Scheme
2012
m

Total
2012
m

245.7
2.0
(4.4)
11.5
(104.3)
26.0
(5.1)

96.0
0.5

4.8

15.0
(1.7)

341.7
2.5
(4.4)
16.3
(104.3)
41.0
(6.8)

225.3
2.2
0.1
12.0

10.9
(4.8)

87.6
0.5
(1.7)
4.8

6.5
(1.7)

312.9
2.7
(1.6)
16.8

17.4
(6.5)

171.4

114.6

286.0

245.7

96.0

341.7

Northgate
Schemes
2013
m

Rebus
Scheme
2013
m

Total
2013
m

Northgate
Schemes
2012
m

Rebus
Scheme
2012
m

Total
2012
m

At 1 May
Expected return on plan assets
Actuarial gains
Contributions by employer
Benefits paid
Curtailment/settlement

216.9
10.2
11.4
7.2
(5.0)
(97.2)

85.9
4.3
4.5
3.3
(1.7)

302.8
14.5
15.9
10.5
(6.7)
(97.2)

201.3
10.7
1.6
8.2
(4.9)

79.2
4.2
0.9
3.3
(1.7)

280.5
14.9
2.5
11.5
(6.6)

At 30 April

143.5

96.3

239.8

216.9

85.9

302.8

21.5

8.8

30.3

12.4

5.1

17.5

Present value of defined benefit obligations


Fair value of plan assets
IFRIC 14 adjustment
Recognised liability for defined
benefit obligation

Movements in the present value of defined benefit obligations

At 1 May
Current service cost
Past service cost
Interest cost
Curtailment/settlement
Actuarial losses
Benefits paid
At 30 April

Movements in the fair value of plan assets

Actual return on assets

36__Summary Annual Report and Accounts 2012/2013

Notes to the Consolidated Accounts (continued)


for the year ended 30 April 2013

6. EMPLOYEE BENEFITS (continued)


Expense recognised in the consolidated income statement
Northgate
Schemes
2013
m

Rebus
Scheme
2013
m

Total
2013
m

Northgate
Schemes
2012
m

Rebus
Scheme
2012
m

Total
2012
m

2.0
(4.4)
11.5
(10.2)
(7.1)

0.5

4.8
(4.3)

2.5
(4.4)
16.3
(14.5)
(7.1)

2.2
0.1
12.0
(10.7)

0.5
(1.7)
4.8
(4.2)

2.7
(1.6)
16.8
(14.9)

(8.2)

1.0

(7.2)

3.6

(0.6)

3.0

(9.5)

0.5

(9.0)

2.2

(1.2)

1.0

1.3

0.5

1.8

1.4

0.6

2.0

(8.2)

1.0

(7.2)

3.6

(0.6)

3.0

Actuarial losses
IFRIC14 adjustment

14.6

10.5
(4.4)

25.1
(4.4)

9.3

5.6
(3.2)

14.9
(3.2)

Total

14.6

6.1

20.7

9.3

2.4

11.7

Northgate
Schemes
2013

Rebus
Scheme
2013

Northgate
Schemes
2012

Rebus
Scheme
2012

4.4%
n/a
1.0%
3.3%
2.2%
2.2%
3.2%

4.4%
n/a
1.0%
3.4%
2.3%
1.9%
2.3%

5.0%
5.0%
1.0%
3.2%
2.0%
2.2%
3.1%

5.0%
5.0%
1.0%
3.3%
2.1%
1.8%
2.1%

Current service costs


Past service costs
Interest on obligation
Expected return on plan assets
(Gains) on curtailment/settlement
Classified within the income statement:
Operating (gains)/costs
Financial expenses (net pension finance
expense)
Classified within the income statement:

Expense recognised in equity

Liability for defined benefit obligations


The principal actuarial assumptions at the balance sheet date were:

Discount rate
Expected return on plan assets
Future salary increases
Retail price inflation
Consumer price inflation
Future pension increases (2.5% LPI)
Future pension increases (5.0% LPI)

The post-retirement mortality assumptions allow for future improvements in mortality. The assumed life expectancy for a male
active member reaching age 65 at the accounting date is 22.6 years (30 April 2012: 22.5 years). Allowance has been made for
further improvements to mortality, whereby the assumed life expectancy of a male member on reaching age 65 in 20 years time
is 25.6 years (30 April 2012: 25.4 years).
The expected rate of return on pension plan assets is determined as the Company's best estimate of the long term return of the
major asset classes - equities, bonds, LDI, and diversified growth funds - weighted by the current strategic allocation at the
measurement date less expenses.

Northgate Information Solutions Limited

__37

Notes to the Consolidated Accounts (continued)


for the year ended 30 April 2013

6. EMPLOYEE BENEFITS (continued)


Fair value of plan assets

Equities
Bonds
Secured loans
Diversified growth funds
Cash
At 30 April

Northgate
Schemes
2013
m

Rebus
Scheme
2013
m

Total
2013
m

Northgate
Schemes
2012
m

Rebus
Scheme
2012
m

Total
2012
m

29.9
53.1
12.5
46.3
1.7

19.4
36.7
8.4
31.0
0.8

49.3
89.8
20.9
77.3
2.5

41.6
81.0
19.7
70.4
4.2

16.2
33.2
7.9
26.9
1.7

57.8
114.2
27.6
97.3
5.9

143.5

96.3

239.8

216.9

85.9

302.8

Over the next year, the Company will pay estimated contributions of 6.7m (2012: 8.1m) - to the UK defined benefit schemes.
This includes the additional contributions aimed at removing the deficit of the Schemes. Contributions to the defined
contribution schemes are in addition to the contributions to the UK defined benefit schemes.
Scheme History
2013
m

2012
m

2011
m

2010
m

2009
m

286.0
(239.8)

341.7
(302.8)
4.4

312.9
(280.5)
7.6

310.6
(254.5)

247.7
(217.1)
7.3

46.2

43.3

40.0

56.1

37.9

Experience loss/(gain) on plan liabilities


Increase/(decrease) in scheme liabilities due to change in assumptions
Actuarial (gains)/losses in scheme assets

41.0
(15.9)

4.1
13.3
(2.5)

(2.6)
9.7
(6.2)

6.9
(59.3)
25.4

(43.6)
44.8

Actuarial losses recognised in the statement of comprehensive income

25.1

14.9

0.9

27.0

1.2

Cumulative actuarial losses recognised in the statement of


comprehensive income

77.9

52.8

37.9

37.0

10.0

Present value of defined benefit obligations


Fair value of plan assets
IFRIC 14 adjustment
Total scheme deficit

Defined contribution arrangements


The Group also operates various defined contribution arrangements for its UK and overseas employees. The contributions paid
to defined contribution schemes amounted to 8.0m (2012: 10.2m). The amount recognised as an expense was 7.8m (2012:
10.2m). The amount paid into pension schemes for overseas employees was 5.3m (2012: 4.5m). Amounts payable in
respect of defined contribution arrangements at 30 April 2013 were 0.1m (2012: 0.3m).

38__Summary Annual Report and Accounts 2012/2013

Notes to the Consolidated Accounts (continued)


for the year ended 30 April 2013

7. PROVISIONS
Property
provisions
m

Restructuring and
other provisions
m

Total
m

5.8

(0.2)
2.7
(3.5)
(0.4)

13.6
0.5
0.2
4.5
(12.8)
(0.3)

19.4
0.5

7.2
(16.3)
(0.7)

At 30 April 2013

4.4

5.7

10.1

Current
Non-current

2.9
1.5

3.6
2.1

6.5
3.6

At 30 April 2013

4.4

5.7

10.1

Current
Non-current

2.5
3.3

5.3
8.3

7.8
11.6

At 30 April 2012

5.8

13.6

19.4

At 1 May 2012
Foreign exchange differences
Reclassifications
Recognised in the income statement
Utilised in the period
Disposal of managed services business

Property provisions
The provision relates to Group properties that have either been sublet or are vacant. It consists of the discounted value of the
differential between future liabilities on the property less any expected future sublet receipts extrapolated to the earliest break
point in the contract. In addition there is a dilapidations provision to make the property good at the end of the lease. This is
made for all leased properties expiring within the next three years.
Restructuring and other provisions
The Group has provided in full for the anticipated costs of restructuring certain divisions and is managements best estimate of
this cost.

8. NET DEBT
Net debt includes cash and cash equivalents, secured bank loans and loan notes and finance lease liabilities.

Cash and cash equivalents


Secured bank loans and loan notes current
Secured bank loans and loan notes non-current
Finance lease liabilities current
Finance lease liabilities non-current
Other financial liabilities current
Other financial liabilities non-current

Notes

2013
m

2012
m

5
5
5
5
9(f)
9(f)

93.7
(16.9)
(894.7)
(11.7)
(16.8)
(4.0)
(4.3)

34.8
(15.3)
(822.4)
(9.6)
(21.9)
(5.3)
(4.6)
(844.3)

(854.7)

Northgate Information Solutions Limited

__39

Notes to the Consolidated Accounts (continued)


for the year ended 30 April 2013

8. NET DEBT (continued)


Set out below is a reconciliation in cash and cash equivalents to the increase in net borrowings at 30 April 2013.
2013
m

2012
m

Net (increase)/decrease in cash and cash equivalents


Effect of foreign exchange rate movements on cash held
Cash and cash equivalents net inflow from increase in debt and debt financing
Movement in net borrowings resulting from cash flows
Amortisation of loan arrangement fees
Capitalised finance costs
Non cash mezzanine bank loan interest added to loan
Currency translation differences

(58.6)
(0.3)
43.8
(15.1)
6.7
(0.5)
8.3
11.0

13.2
0.2
(5.6)
7.8
6.6

13.4
(28.0)

Movement in net debt in the year


Net debt at 1 May

10.4
844.3

(0.2)
844.5

Net debt at 30 April

854.7

844.3

9. FINANCIAL INSTRUMENTS
The Groups financial assets and liabilities mainly comprise bank borrowings, cash, liquid resources and various items, such as
trade and other receivables and trade and other payables that arise directly from operations.
The main financial market risks arising from the Groups operations are credit risk, interest rate risk, foreign exchange risk and
liquidity risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below.
The main purpose of the financial instruments is to provide a hedge against the interest rate risk for the Groups financial
liabilities.
(a) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations and arises principally from the Groups trade and other receivables from customers.
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are
performed on all customers requiring credit over a certain amount. The Group does not require collateral in respect of financial
assets.
At the balance sheet date, there were no significant concentrations of credit risk. The maximum exposure to credit risk is
represented by the carrying amount of each financial asset in the balance sheet, principally trade and other receivables. The
Group provides credit to customers in the normal course of business and the amount that appears in the balance sheet is net of
a provision for impairment of 2.8m (2012: 2.3m). The provision for impairment is calculated in accordance with the Groups
policy based on the age of the financial asset at each period end and specific doubtful debts. Past history suggests that no
provision for impairment is required for trade and other receivables not past due.

40__Summary Annual Report and Accounts 2012/2013

Notes to the Consolidated Accounts (continued)


for the year ended 30 April 2013

9. FINANCIAL INSTRUMENTS (continued)


(a) Credit risk (continued)
The ageing of trade receivables at the year end was:

Not past due


Past due 030 days
Past due 3160 days
Past due 6190 days
Past due 90 days and above

2013
Gross
m

2012
Gross
m

92.0
18.0
5.7
2.4
5.4

118.9
18.2
5.7
2.5
4.7

123.5

150.0

In addition to the above at 30 April 2013 there were also other receivables (long term debtors) of 9.0m (2012: 9.8m). An
allowance for impairment of 2.8m (30 April 2012: 2.3m) has been added back to debtors past due 90 days and above in
arriving at these figures. The movement in the allowance for impairment in respect of trade and other receivables during the
period was as follows:

At 1 May
Additional bad debt provision
Utilised in the period

2013
m

2012
m

2.3
1.0
(0.5)

1.6
0.9
(0.2)

2.8

2.3

(b) Interest rate risk


Interest rate risk is the risk of increased net financing costs due to increases in market interest rates. The Group finances its
operations and acquisitions through a mixture of retained profits, bank borrowings and equity; the Groups main interest rate risk
therefore comes from its bank borrowings, which the Group borrows principally in Sterling and Euros.
The Group policy is to undertake interest rate hedging to protect itself against adverse movements in interest rates (see note
9(g)). Any surplus cash is invested in short-term bank deposits at the prevailing rates of interest in order to achieve the market
rate of return.
At 30 April 2013, the Group had interest rate hedges in place to reduce its exposure to changes in interest rates. For 2013/14
the exposure is reduced to approximately 88% of the interest cost and in 2014/15 to 65%. The need for further interest rate
hedges is reviewed by the Board of Directors annually. This is set out in detail in note 9(g). Due to the interest rate hedges in
place the remaining interest rate risk is not materially sensitive to changes in interest rates.
At the period end the interest rate profile of the Groups interest-bearing financial instruments was:
Variable rate instruments
Secured bank loans

2013
m

2012
m

911.6

837.7

As noted above, interest rate hedges are in place to manage the risk from changing interest rates affecting the cost of these
bank loans.
Fixed rate instruments
Finance lease liabilities

Northgate Information Solutions Limited

2013
m

2012
m

28.5

31.5

__41

Notes to the Consolidated Accounts (continued)


for the year ended 30 April 2013

9. FINANCIAL INSTRUMENTS (continued)


(c) Foreign exchange risk
The Group operates internationally and is exposed to foreign currency risk on transactions denominated in a currency other than
the functional currency and on the translation of the balance sheet and income statement of foreign operations into sterling. The
currencies giving rise to this risk are primarily US dollars and Euros. The Group has both cash inflows and outflows in these
currencies that create a natural hedge.
In managing currency risks the Group aims to reduce the impact of short-term fluctuations on the Groups cash inflows and
outflows in a foreign currency. The Group also hedges any material foreign currency transaction exposure. The Group has
treated 360m of the long term funding of a subsidiary as a net investment hedge. At 30 April 2013 exchange rates the long
term funding was 304.4m (2012: 293.0m) and the net investment shown in goodwill was 304.4m (2012: 293.0m).
Over the longer term permanent changes in foreign exchange could have an impact on consolidation of foreign subsidiaries
earnings. It is estimated that a general increase of one percentage point in the value of sterling against other currencies would
have reduced the Groups loss before tax by approximately 0.2m (2012: (reduced) 0.3m).
(d) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial commitments as they fall due.
The Groups objective is to ensure that adequate facilities are available through use of bank loans and finance leases. The Group
manages liquidity risk through regular cash flow forecasting and monitoring of cash flows, management review and regular
review of working capital and costs.
The Group regularly monitors its available headroom under its borrowing facilities. At 30 April 2013, 101.6m (2012: 108.9m) of
undrawn facilities was available (see note 9(e)).
In respect of the Groups financial liabilities including estimated interest where applicable, the table below includes details (at the
balance sheet date) of the periods in which they mature.

Notes

Book
value
m

Secured bank
loans

(911.6)

(1,212.3)

(67.3)

(87.8)

(295.2)

(295.2)

(466.8)

Finance lease
liabilities*

(28.5)

(28.5)

(11.7)

(9.4)

(4.8)

(2.6)

(36.0)

(36.0)

(36.0)

30 April 2013

Trade and other


payables

Future
cash flows
m

Less than
1 year
m

12 years
m

23 years
m

34 years
m

45 years
m

More than
5 years
m

Interest rate
collars/SWAPS

9(f)

(10.5)

(10.5)

(2.4)

(2.4)

(5.7)

Other financial
liabilities

9(f)

(8.3)

(8.3)

(4.0)

(2.7)

(1.3)

(0.3)

(994.9)

(1,295.6)

(121.4)

(102.3)

(307.0)

(298.1)

(466.8)

*These liabilities bear interest at a fixed rate.

As noted in the Group Finance Directors review on page 19, post the year-end the Group has secured additional funding and an
agreement for capital maturity dates of the secured bank loans to extend beyond 2017.

42__Summary Annual Report and Accounts 2012/2013

Notes to the Consolidated Accounts (continued)


for the year ended 30 April 2013

9. FINANCIAL INSTRUMENTS (continued)


(d) Liquidity risk (continued)

Notes

Book
value
m

Secured bank
loans

(837.7)

(1,345.6)

(90.3)

(90.3)

(110.8)

(318.2)

(318.2)

(417.8)

Finance lease
liabilities*

(31.5)

(31.5)

(9.6)

(10.2)

(7.3)

(3.2)

(1.2)

(75.1)

(75.1)

(75.1)

30 April 2012

Trade and other


payables

Future
cash flows
m

Less than
1 year
m

12 years
m

23 years
m

34 years
m

45 years
m

More than
5 years
m

Interest rate
collars/SWAPS

9(f)

(14.7)

(14.7)

(13.1)

(1.6)

Other financial
liabilities

9(f)

(9.9)

(9.9)

(5.3)

(2.4)

(1.6)

(0.6)

(968.9)

(1,476.8)

(193.4)

(104.5)

(119.7)

(322.0)

(319.4)

(417.8)

*These liabilities bear interest at a fixed rate.

(e) Borrowing facilities


The Group has syndicated Senior and Subordinated facility agreements with a number of banks and investment companies
providing 660 million and 360 million of available funding. Of these facilities, the Group has the following available committed
floating rate borrowing facilities and cash at 30 April 2013 in respect of which all conditions precedent had been met at that
date:
Expiring between 2 and 10 years

2013
m

2012
m

101.6

108.9

In 2012 the Group entered into a facility secured on UK trade receivables, providing up to 27.5m of additional liquidity. These
long-term facilities have been arranged to help finance expansion of the Groups activities in line with the acquisition strategy in
place. Less than 10% of bank facilities need repaying before 2015, giving the Group secured long term funding to support
operations.

Northgate Information Solutions Limited

__43

Notes to the Consolidated Accounts (continued)


for the year ended 30 April 2013

9. FINANCIAL INSTRUMENTS (continued)


(f) Fair values of financial assets and financial liabilities
The fair values, together with the carrying amounts shown in the balance sheet, are as follows:

Notes

Trade and other receivables


Other receivables (long-term trade debtors)
Cash and cash equivalents
Secured bank loans
Finance lease liabilities
Other financial liabilities current
Interest rate collars/SWAPs Liabilities
Other financial liabilities
Other financial liabilities non-current
Other financial liabilities
Interest rate collars/SWAPs Liabilities

5
5

Carrying amount
2013
m

2012
m

Fair value
2013
m

2012
m

120.7
9.0
93.7
(911.6)
(28.5)

147.7
9.8
34.8
(837.7)
(31.5)

120.7
9.0
93.7
(911.6)
(28.5)

147.7
9.8
34.8
(837.7)
(31.5)

(2.4)
(4.0)
(6.4)

(14.7)
(5.3)
(20.0)

(2.4)
(4.0)
(6.4)

(14.7)
(5.3)
(20.0)

(4.3)
(8.1)
(12.4)

(4.6)

(4.6)

(4.3)
(8.1)
(12.4)

(4.6)

(4.6)

(735.5)

(701.5)

(735.5)

(701.5)

Included in other financial liabilities are assets of 8.3m secured by other financial liabilities of 4.0m due under a year and
4.3m due over a year (2012: 9.9m secured by other financial liabilities of 5.3m due under a year and 4.6m due over a year).
Estimation of fair values
The fair values of financial instruments reflect the market value at the balance sheet date. The market value of interest rate collars
is determined from valuations provided by the issuing financial institution adjusted for credit risk. All other financial instruments
are stated at their carrying values which are not materially different to the market value.
(g) Hedging
In respect of our overall borrowings this covers 88% of our interest exposure in 2013/14 and 65% in 2014/15. The average rate
of interest fixed over the period is in the range 1.0% to 2.2% for Sterling and 1.0% to 2.2% for Euros plus margin. Margin is
payable under the Groups loan facilities dependent on the ratio of debt to EBITDA and ranges from 1.75% to 8.5%. The effect
of the arrangement is to limit any detrimental interest rate moves over the period to the amount of debt not covered by these
instruments. These positions are reviewed annually by the Board.
The Group also hedges any material foreign currency transaction exposure. Transaction exposures are reviewed periodically and
hedged.
The Group undertakes interest rate hedging to protect itself against adverse movements in interest rates. Hedging is put in place
when significant amounts of borrowing are incurred. A summary of the Groups interest rate hedging position (including interest
rate hedges taken on as part of the acquired group) is given in note 9(d). The figures quoted represent total interest costs
including funding margin.
Note 9(d) gives details of the carrying value and expected future cash flows associated with the interest rate collars/SWAPS. The
Group has not applied hedge accounting to the interest rate hedges. The fair value of the interest collars and SWAPs is
determined by valuations provided by the issuing financial institution of those instruments and is taken through the income
statement.

44__Summary Annual Report and Accounts 2012/2013

Notes to the Consolidated Accounts (continued)


for the year ended 30 April 2013

9. FINANCIAL INSTRUMENTS (continued)


(h) Capital Management
The Groups objectives when managing capital (retained profits and bank borrowings) are to safeguard the Groups ability to
continue as a going concern, support the growth of the business and to maintain an optimal capital structure to reduce the cost
of borrowing. The Group finances its operations through a combination of retained profits, equity and bank borrowings (see note
5).

10. ACCOUNTING ESTIMATES AND JUDGEMENTS


The following sets out the key assumptions concerning the future and key sources of estimation and uncertainty at the balance
sheet date that may cause material adjustment to the carrying amounts of assets or liabilities within the next financial year.
Revenue recognition
The revenue and profit of fixed price contracts is recognised on a percentage completion basis when the outcome of a
contract can be estimated reliably. Management exercises judgement in determining whether a contracts outcome can be
estimated reliably. Management also make some estimates in the calculation of future contract costs, which are used in
determining the value of amounts recoverable on contracts. Estimates are continually revised based on changes in the facts
relating to each contract.
Pensions
Details of the principal actuarial assumptions used in calculating the recognised liability for the defined benefit plans are given in
note 6. Changes to the discount rate, mortality rates and actual return on plan assets may necessitate material adjustments to
this liability in the future.
Provisions
Provisions are recognised in the period when it becomes probable that there will be a future outflow of funds resulting from
past operations or events which can be reasonably estimated. The timing of recognition requires the application of judgement to
existing facts and circumstances, which can be subject to change. Note 7 to the accounts contain information about the
assumptions made concerning the Groups provisions.
Fair value measurement on a business combination
The measurement of fair values on a business combination requires the recognition and measurement of the identifiable assets,
liabilities and contingent liabilities. The key judgements involved are the identification and valuation of intangible assets which
require the estimation of future cash flows and the selection of a suitable discount rate.
Impairment of intangible assets, including goodwill
Following the acquisition of Northgate Information Solutions plc in 2007/08, the Group has significant carrying values of goodwill
and intangible assets, such as customer relationships, technology based assets and trade names and other marketing related
assets. Goodwill and other intangible assets are tested annually for impairment. The impairment tests involve estimation of future
cash flows and the selection of a suitable discount rate. These require an estimation of the value-in-use of the cash generating
units to which the intangible assets are allocated.

Northgate Information Solutions Limited

__45

Notes to the Consolidated Accounts (continued)


for the year ended 30 April 2013

10. ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)


Recognition of internally generated intangible assets from development
Under IFRS, internally generated intangible assets from the development phase are recognised if certain conditions are met.
These conditions include the technical feasibility, intention to complete, the ability to use or sell the asset under development and
the demonstration how the asset will generate probable future economic benefits. The cost of a recognised internally generated
intangible asset comprises all directly attributable cost necessary to make the asset capable of being used as intended by
management. In contrast, all expenditures arising from the research phase are expensed as incurred.
We believe that the determination whether internally generated intangible assets from development are to be recognised as
intangible assets requires significant judgement, particularly in the following areas:
The determination whether activities should be considered research activities or development activities;
The determination whether the conditions for recognising an intangible asset are met requires assumptions about future

market conditions, customer demand and other developments;


The term technical feasibility is not defined in IFRS, and therefore the determination whether completing an asset is

technically feasible requires a company-specific and necessary judgemental approach;


The determination of the future ability to use or sell the intangible asset arising from the development and the determination of

probability of future benefits from sale or use, and


The determination whether a cost is directly or indirectly attributable to an intangible asset and whether a cost is necessary for

completing a development.
Development Costs
During the year the Group changed the rate of amortisation of development costs from 3 to 5 years resulting in a decrease in
amortisation charge for the year of 7.3m (2012: nil) following a reassessment of the estimated useful lives of these assets.
Taxation
The Group is subject to corporate taxes in numerous jurisdictions. Management is required to exercise significant judgement
in determining the worldwide provision for corporate taxes. Certain transactions require the use of estimates and judgements
to determine the financial effect where the ultimate tax determination is uncertain. When the final outcome of such matters
is different, from previous estimates, such differences will impact on the corporate tax in the period in which the determination
is made.

46__Summary Annual Report and Accounts 2012/2013

Directors and Advisers

Public and private organisations need to


partner with service providers who offer
the right combination of industry knowledge,
technical expertise and flexible services.
This combination is required to evolve
their business processes and, ultimately,
provide better services while transforming
their operations for greater efficiency
and effectiveness.
Northgate Information Solutions is a leader
in helping clients transform business-critical
operations to deliver more efficient and
effective people-critical services.
Through our two business divisions
NGA Human Resources and Northgate
Public Services (NPS) we provide
software solutions and technology services
for human resources management and for
organisations across the public sector.

Directors
Adel Al-Saleh Group Chief Executive
Brian Carroll Chairman
William L. Cornog Non-Executive Director
John R. Stier Group Finance Director
Edouard Pillot Non-Executive Director
Special Adviser to the Board
Sir Roger Carr
Registered Office
Peoplebuilding 2
Peoplebuilding Estate
Maylands Avenue
Hemel Hempstead
HP2 4NW
Registered Number
6442582
Auditors
KPMG Audit Plc
15 Canada Square
London E14 5GL
Bankers
Barclays Bank Plc
28 George Street
Luton LU1 2AE

Northgate Information
Solutions Limited
Peoplebuilding 2
Peoplebuilding Estate
Maylands Avenue
Hemel Hempstead
HP2 4NW
01442 232424
Northgate Information Solutions Limited Summary Annual Report and Accounts 2012/2013

www.northgate-is.com

Northgate Information Solutions Limited


Summary Annual Report and Accounts 2012/2013