Lombard Risk Regulatory Compliance Solutions Interim Report

Managing collateralised trading.
Enabling regulatory compliance.
Lombard Risk Management plc Interim report 2014

For over 25 years, Lombard Risk
has delivered industry‑leading
risk management and regulatory
compliance solutions to the financial
services industry and large corporations
around the world.
More recently, Lombard Risk has expanded its portfolio
of technology solutions to include collateral optimisation,
compliance monitoring and advanced XBRL functionality.
Our strategy
1 What makes
us different
Innovation
Industry-leading products provide
risk and regulatory solutions for
global financial services operations
Scalability
Ability for solutions to be attractive to
organisations of any size; significant
data processing is not an issue
Agility
Adaptable and flexible business model
to suit our clients’ requirements (e.g.
term licence or annual subscription)
Expertise
Significant pool of business
practitioners and experienced
implementation consultants
2 Delivered through
our product and
services cycle
3 To a global market
Our model is to provide high quality
technology solutions, either directly
or through our partners; implement
solutions, usually alongside the
customer; provide on-going support;
and maintain the product to a high
technical specification and, where
applicable, to satisfy up-to-date
regulatory requirements.
All stages have opportunities
for revenue growth:
New and detailed regulations
continue to surface,
e.g. FINREP, Asset Encumbrance
New products and modules
to current products
Convergence of risk and regulation
– increased value added from
industry practitioners
Further revenue visibility backlog
and recurring revenues continue
Lombard Risk delivers industry-leading
risk management and regulatory
compliance solutions to the financial
services industry and large corporations
around the world.
Our proven global solutions reduce
the risk inherent in collateralised
trading operations, enable firms
to measure and manage liquidity
and meet the demands of
global regulators.
Our 300+ clients include over
30 of the world’s “Top 50” banks,
nearly half of the banks operating
in the UK (where our corporate
headquarters is located), as well as
industry‑leading banking businesses,
investment firms, asset managers,
hedge funds, fund administrators
and large corporations worldwide.
Our strategy has allowed us to create award-winning global solutions.

01
Current trading and outlook
Lombard Risk Management plc www.lombardrisk.com
Overview Financial statements
Highlights
Revenue of £9.3m (2013: £7.3m) up 27.7%, supported by an order book
of contracted revenue at £5.1m (2013: £5.4m)
121 COREP contracts now signed, with 62 being for new names
EBITDA of £0.8m (2013 restated: loss of £0.02m) following revenue growth
partially offset by increased staffing levels to deliver additional contracts
Profit before tax of £0.01m (2013 restated: loss of £0.5m)
Cash at period end of £2.2m (2013: £1.8m) with reduction in debt
to £0.3m (2013: £1.0m)
Continued investment in European Banking Authority regulatory initiatives
including COREP and FINREP, the COLLINE® Optimisation module, and the
next generation of REPORTER
Interim dividend of 0.035p (2013: 0.03p) per Ordinary Share
European Banking Authority’s Asset Encumbrance and Liquidity Coverage Ratio
regulations create further opportunities in H2 and into the following financial year
Good pipeline adds to revenue visibility from contracted or recurring revenue
In this report
Overview
01 Highlights
02 Chief Executive Officer’s statement
Financial statements
08 Consolidated unaudited interim statement of comprehensive income
09 Consolidated unaudited interim statement of financial position
10 Consolidated unaudited interim statement of changes in equity
12 Consolidated unaudited interim statement of cash flow
13 Notes to the interim report
20 Company information

Overview 02
Chief Executive Officer’s statement
Recognised revenues achieved in
the six months were our highest
ever for the first half, up 27.7%
on the same period last year.”
John Wisbey
Chief Executive Officer
Summary
In the previous two financial years we achieved
45.6% and 35.6% respectively of our total annual
revenues in the first half of the financial year.
We stated at the AGM, earlier this year, that
we again expected revenues to be weighted
to the second half.
I am pleased to report that recognised
revenues achieved in the six months ended
30 September 2014 were our highest ever
for the first half at £9.3m, up 27.7% on the
same period last year. Looking further back it
is useful to note that revenues in the 12 months
to 30 September 2014 were also our highest
ever at £22.4m against £16.4m in the 12 months
to 30 September 2013, a year-on-year gain
of 36.9%.
We have continued to maintain careful control
over our costs, resulting in a profit before tax
(“PBT”) of £13k (2013 restated: loss of £523k)
and EBITDA of £781k (2013 restated: loss of £22k).
Looking at the trend over the last year, PBT for
the 12 months to 30 September 2014 was £5.0m
and EBITDA was £6.7m. The business has been
cash generative over the last 12 months with net
cash at 30 September 2014 of £1.8m (2013: £0.8m).
There has been a small net cash outflow since
31 March 2014 year end (net cash £2.3m), but
this is to be expected from the second half
weighting of revenues.
Our regulatory programme for the European
Banking Authority’s COREP exceeded management
expectations, with 121 clients now signed up for
COREP. Almost all our clients were able to successfully
transmit on the initial regulatory date with our XBRL
software, although work is ongoing to automate
the process fully for all clients and keep up with
further changes to regulatory XBRL taxonomies.
While the Company does not make revenue
forecasts we have good visibility, based on
business won or awarded to date, of a significant
proportion of the full-year revenue forecasts in the
market. In addition, we have a good pipeline of
business for both the risk and regulatory side of the
business including a significant pipeline for another
European Banking Authority regulation called
Asset Encumbrance. We therefore approach
the second half of the year with confidence.
The outlook for revenue growth remains promising,
with a market environment continuing to favour
the Company’s product positioning in regulation,
compliance and risk management despite a tough
budgetary environment in the financial sector.
In addition, the investment we have made
in the last year can be expected to stand
us in good stead in the years to come.

03
Clients and business won
We have continued to make significant progress
in the UK on the regulatory side with 121 customers
now won for the European Banking Authority’s
COREP. Delivering a programme of this scale
with everyone having the same regulatory deadline
was a notable achievement by our Development
and Professional Services teams. They were under
substantial pressure from regulatory teams in banks,
all of whom had very tight delivery objectives
of their own to meet. Almost all 121 clients were
able to meet the initial regulatory COREP deadline
with our XBRL utility, and those that were not
were mainly firms that experienced particularly
difficult data preparation issues.
We have also been working on the European
Banking Authority’s FINREP and, more recently,
Asset Encumbrance and Liquidity Coverage Ratio
regulations. Both of these represent significant
opportunities for the Company in the next
12 months. Fifty of the 121 COREP clients
were on the Company’s fully functional model,
and the remaining 71 used our new technology
for XBRL transmission only. While the latter
contract wins were of comparatively lower value,
most of the clients were completely new names
for us for regulatory reporting and we expect that
some of these new clients gained in this land-grab
should become more valuable over time. Over the
life of the programme, we gained 62 new names
for COREP, and 16 of these were direct gains
from our traditional competitors. This has
been a very successful programme.
We also won regulatory contracts for other
reporting functionality in the UK, North America
and Asia. Our new regulatory technology was
instrumental in gaining us contracts for XBRL
in Asia.
Our collateral market product for COLLINE®
has continued to make headway with a number
of deals won in Europe and Japan and several
other deals being worked. We expect to see the
benefit of our alliances strategy come through
this year for COLLINE®. Part of our investment in
regulatory products is to ensure that we can meet
the regulatory requirements of the very largest
banks at head office or regional head office level
as well as at branch level. This has involved work
on EMIR and IOSCO requirements just as in the
previous year there was work for Dodd-Frank.
We still expect the regulatory impact on the
collateral management market to be a significant
growth driver for the Company.
We continue to maintain a healthy revenue
backlog / order book of contracted revenue,
and again enter the second half with a strong
order book. The contractual backlog / order
book was £5.1m at the period end, down
from £5.4m a year previously, but deals in
early October have already added to this.
We regard our client base of around 300 financial
institutions, including 30 of the top 50 banks in
the world, as one of our most valuable assets,
and in many cases we are seen as a trusted provider
rather than merely as a vendor. Our client retention
Total revenue
£9.3m
(2013: £7.3m)
COREP contracts signed
121
(62 being new names)

Overview 04
Chief Executive Officer’s statement continued
EBITDA
£0.8m
(2013 restated: loss £0.02m)
rate for all products remains very high at over 95%
with any attrition mostly caused by bank branch
closures outside our control.
Finance review
Recognised revenue rose by 27.7% against the
comparable half year to £9.3m (2013: £7.3m).
Annually recurring revenues for the half year
totalled £4.3m (2013: £4.2m), being 47%
(2013: 58%) of total revenues.
Operating profit before depreciation and
amortisation (EBITDA) was £0.8m (2013 restated:
loss of £22k). Cash at the end of the period was
£2.2m (2013: £1.8m) with £0.3m debt (2013: £1.0m).
Net cash was £1.8m (2013: £0.8m). The Company
raised no money in the period either through issuing
equity or through the exercise of share options,
and used £0.3m (2013: £0.7m) to service and repay
debt. A dividend of £0.1m (2013: £0.1m) was paid.
Capitalised development costs in the period
totalled £2.0m (2013: £2.3m), representing 56%
(2013: 68%) of total technology and support costs.
The decrease represents continued investment
in new products but also the requirement under
accounting standards to cease capitalising
development spend when a product has become
capable of operating in the manner intended
by management. Our main development spend
continued to be on solutions for executing the
European Banking Authority’s Common Reporting
Interim dividend
0.035p
(2013: 0.03p)
(COREP) and Financial Reporting (FINREP), finishing
a new collateral optimisation product and multiple
regulatory enhancements for collateral, and a
next generation regulatory product.
Attention is drawn to notes 4 and 5 in respect
of accounting adjustments to the treatment of
development costs and amortisation thereof in
the financial years 2012 and 2013, made following
discussions with the Financial Reporting Council.
In the audited financial statements for those
years we had started amortisation of capitalised
development expenditure too soon but had also
continued to capitalise new expenditure on some
projects for too long. There is no material impact
on the income statement or balance sheet for the
current period or for those of the full year ended
31 March 2014 but in earlier periods back to 2012
this error made a difference to the split between
cash flows from operating activities and cash
flows from investing activities. The detail is
covered in notes 4 and 5.
Investment in software product development
During the period we have continued to invest
heavily in the development of our software products,
primarily in the areas driven by regulation and by
regulatory and market initiatives around derivatives
reform. This meant gearing ourselves up for the
European Banking Authority’s COREP and FINREP
regulations. While COREP has been developed as
a new module of the existing REPORTER product,

05
the collateral initiatives have been developed
through our COLLINE® product which has required
appreciable expenditure. In addition, we have
continued to invest in R&D for other products.
For example for COLLINE® we have continued to
develop our offering for Clearing and have invested
in ensuring that COLLINE® is compliant with new
Dodd-Frank and EMIR regulations. We have
also enhanced COLLINE® by delivering a superior
module for Repos and ETFs, and we have invested
in COLLINE’s Optimisation module to allow
optimal inventory management of collateral.
We have struck a prudent balance between
innovation and other investment required to take
advantage of opportunities in our core regulatory
and collateral businesses. We have approximately
150 staff engaged in software development and
testing, mostly based in our development and
testing centre in Shanghai. Having this capability
has allowed us to take on much more work than
we could have done a few years ago. Much of
our R&D is driven by client requirements and
is often client funded rather than speculative.
Expansion of intangible assets
Intellectual property
The Company has always focussed on
developing its own software products
rather than selling the products of third
parties. With significant investment over time
in our products like REPORTER, REG-Reporter®,
COLLINE® and OBERON®, and more recently in
REFORM®, ReporterMIS, ComplianceASSESSOR™
and other software for our future regulatory
products, we have a valuable foundation of
IP from which to build. Moreover, our modern
products are being designed with reusable
common libraries of software or web services,
meaning that we should be able to achieve
quicker time to market and leverage our
development effort more efficiently.
Brands
Our main brands at present are:
REPORTER – Regulatory reporting in multiple
jurisdictions. REPORTER is the biggest market
brand for Bank of England and now European
Banking Authority regulatory reporting in the
UK, and an important brand in various Asian
and European countries as well as the USA.
REG-Reporter® – Regulatory Reporting in the US,
Canada and other jurisdictions. REG-Reporter®
is the biggest brand used by foreign banks in the
US, with more clients than all our international
competitors’ products combined.
COLLINE® – Collateral Management for OTC and
Cleared Derivatives, Repos, Securities Lending, ETFs
and Listed Derivatives, and Collateral Optimisation
around the resulting collateral inventory. COLLINE®
is one of the top brands in these markets.

Overview 06
Chief Executive Officer’s statement
continued
Cash at period end
£2.2m
(2013: £1.8m)
REFORM® – Pre and post-trade solutions
and transactional reporting for the derivatives
reform initiatives such as Dodd-Frank and EMIR.
Other modules of the REFORM® engine provide
connectivity and message transformation, for
example enabling COLLINE® to connect to
exchanges and to messaging systems.
OBERON® – Financial instrument valuation and
related risk reporting. OBERON® has been a very
durable system over many years.
ComplianceASSESSOR™ – Managing regulatory
compliance risk through mapping of regulations
and internal policies against the actual actions
taken by firms to ensure their compliance with
such regulations and internal policies.
ReporterMIS – Flexible web-based reporting
tool allowing reporting to be produced from,
for example, COLLINE® in conjunction with
another third-party system.
Partnership programme
Our investment in developing alliance partners
is starting to bear fruit. We believe this will add
an appreciable level of scalability to the Company
over and above the level of profit growth achievable
only through a direct sales force. We have announced
alliances including Broadridge and NTT Data; we
have won deals in conjunction with partners in
Japan; and we are working on multiple other
partner relationships and opportunities. Some
Reduction in debt to
£0.3m
(2013: £1.0m)
are revenue enhancing, while others allow
us to scale up implementation more easily
owing to enhanced professional service
delivery capability.
Market assessment
The regulatory market background remains
net favourable to the Company. We are about
halfway through an increase in the depth and
breadth of regulation that banks and financial
institutions face worldwide. Complying with these
regulations has been a driver of our sales and a
good chance to gain market share. However we
expect that there will be a further increased wave
of expenditure as banks review the enormous
ongoing cost of regulation and look to achieve
greater efficiency in how they spend that money.
We believe our products will be seen as part of
the solution to greater efficiency rather than as
part of the problem. The collateral market also
has considerable opportunities, with collateral
optimisation turning this industry into one that
helps the front office make money rather than
simply helping operations departments work
more efficiently. In addition, the renewed focus
by regulators such as the Financial Conduct
Authority on conduct and the initiative to put
personal liability for compliance failures onto
senior managers should mean that financial
institutions will spend appreciably to reduce
their risks to such failures.

07
Business improvement and our people
We are pleased to welcome Nigel Gurney
as Chief Financial Officer and Board member
as of 1 September 2014. Together with our
appointment of John Groetch as Managing
Director, Americas, this completes most of
our senior level hiring. We are looking to fill
a new position of Chief Operating Officer
to lead the revenue and client-facing side
of the business, and this process is ongoing.
We will be moving to new offices in London
in early 2015 as our lease on Ludgate House
will come to an end in March and the building
is scheduled for redevelopment. We are at an
advanced stage of securing new premises.
Dividend
The Company will pay an interim dividend
of 0.035p per share on 14 November 2014
to those shareholders on the register on
31 October 2014.
Outlook
For all the reasons mentioned earlier, the Board
is optimistic about the second half of the year owing
to the good level of contractual backlog / order
book as at 30 September 2014; the likelihood
of continued new business from the European
Banking Authority’s FINREP, Asset Encumbrance
and Liquidity Coverage Ratio regulations following
on from COREP and other selections made of our
software. We have good recurring revenues and
further predictable revenues from fixed-term
licence renewals and contractual backlog as
well as a healthy pipeline. The Board remains
cautiously optimistic about the prospects for
the Company in the medium term, especially
given the macro effect of a continuing level
of regulatory change all over the world and
investment in collateral management combined
with the likelihood of additional revenue streams
resulting from our product strategy, our partnering
strategy and our investment in both of these
areas. Risks remain, however, not only from
competition but also from global political
developments, including the sanctions regime
with Russia causing a slowdown in European
economies and the effect this could have on
European banks. As always a postponement
of European regulatory deadlines could affect
the timing of the Company’s revenues, but
we do not expect this to impact FINREP or
Asset Encumbrance.
I would like personally to thank the many staff
in London, Shanghai and our other offices who
have gone the extra mile for us in the last few
months. I would single out those who have
worked incredibly hard to ensure that the COREP
programme has been successful. This is much
appreciated as is the excellent support of our
shareholders, bankers and advisers.
John Wisbey
15 October 2014

Financial statements 08
Notes to the interim report
For the six months ended 30 September 2014
Consolidated unaudited interim statement of comprehensive income
Note
Unaudited
Six months
ended
30 September
2014
£000
Unaudited
Six months
ended
30 September
2013
restated
£000
Audited
Year ended
31 March
2014
£000
Continuing operations
Revenue 9,269 7,256 20,395
Cost of sales (114) (64) (164)
Gross profit 9,155 7,192 20,231
Administrative expenses (8,374) (7,214) (14,260)
EBITDA 781 (22) 5,971
Depreciation, amortisation and impairment (759) (475) (1,510)
Net finance expense (9) (26) (42)
Profit / (loss) before taxation 13 (523) 4,419
Taxation (charge) / credit 3 (24) (124) 735
Profit / (loss) for the period from continuing operations (11) (647) 5,154
Profit / (loss) for the period from continuing operations
attributable to:
Owners of the Parent 4 (633) 5,199
Non-controlling interest (15) (14) (45)
(11) (647) 5,154
Other comprehensive income
Exchange differences on translating foreign operations 2 (109) (185)
Total comprehensive income for the period (9) (756) 4,969
Total comprehensive income attributable to:
Owners of the Parent 6 (742) 5,014
(9) (756) 4,969
Earnings / (loss) per share
Basic (pence) 2 0.00 (0.26) 2.07
Diluted (pence) 2 0.00 (0.26) 2.04

09
Consolidated unaudited interim statement of financial position
As at 30 September 2014
Note
Unaudited
Six months
ended
30 September
2014
£000
Unaudited
Six months
ended
30 September
2013
restated
£000
Audited
Year ended
31 March
2014
£000
Non-current assets
Property, plant and equipment 196 237 206
Goodwill 4 5,769 5,792 5,751
Other intangible assets 4 12,433 8,984 11,044
Deferred tax asset 982 377 997
19,380 15,390 17,998
Current assets
Trade and other receivables 5,272 3,256 5,767
Cash and cash equivalents 2,167 1,753 2,929
7,439 5,009 8,696
Total assets 26,819 20,399 26,694
Current liabilities
Borrowings (333) (667) (667)
Trade and other payables (2,573) (2,076) (2,695)
Deferred income (5,788) (5,036) (5,171)
(8,694) (7,779) (8,533)
Long-term liabilities
Borrowings — (333) —
— (333) —
Total liabilities (8,694) (8,112) (8,533)
Net assets 18,125 12,287 18,161
Equity
Share capital 1,747 1,736 1,747
Share premium account 9,375 9,261 9,375
Foreign exchange reserves (279) (205) (281)
Other reserves 1,622 1,521 1,537
Retained profit 5,757 25 5,865
Equity attributable to owners of the Parent 18,222 12,338 18,243
Total equity 18,125 12,287 18,161

Financial statements
Notes to the interim report continued
10
Consolidated unaudited interim statement of changes in equity
Share
capital
£000
Share
premium
account
£000
Foreign
exchange
reserves
£000
Other
reserves
£000
Profit
and loss
account
£000
Total
attributable
to the
owners
of the
Company
£000
Non-controlling
interest
£000
Total
equity
£000
Balance at 1 April 2013 1,592 6,622 (96) 1,687 751 10,556 (37) 10,519
Issue of share capital 144 2,732 — — — 2,876 — 2,876
Share issue costs — (93) — — — (93) — (93)
Share-based payment credit — — — (36) — (36) — (36)
Share options modification expense — — — (130) — (130) — (130)
Dividends — — — — (93) (93) — (93)
Transaction with owners
directly in equity 144 2,639 — (166) (93) 2,524 — 2,524
Loss for the period as previously reported — — — — (1,044) (1,044) (14) (1,058)
Loss for the period restated — — — — (633) (633) (14) (647)
Exchange differences on translating
foreign operations — — (109) — — (109) — (109)
Total comprehensive income for
the period as previously reported — — (109) — (1,044) (1,153) (14) (1,167)
Total comprehensive income for
the period restated — — (109) — (633) (742) (14) (756)
Balance at 30 September 2013
as previously reported 1,736 9,261 (205) 1,521 (386) 11,927 (51) 11,876
Balance at 30 September 2013 restated 1,736 9,261 (205) 1,521 25 12,338 (51) 12,287

11
Share
capital
£000
Share
premium
account
£000
Foreign
exchange
reserves
£000
Other
reserves
£000
Profit
and loss
account
£000
Total
attributable
to the
owners
of the
Company
£000
Non-controlling
interest
£000
Total
equity
£000
Balance at 1 October 2013 1,736 9,261 (205) 1,521 25 12,338 (51) 12,287
Issue of share capital 11 114 — — — 125 — 125
Share-based payment charge — — — 103 — 103 — 103
Share option lapsed or exercised — — — (87) 87 — — —
Dividends — — — — (79) (79) — (79)
Transaction with owners
directly in equity 11 114 — 16 8 149 — 149
Profit for the period — — — — 5,832 5,832 (31) 5,801
foreign operations — — (76) — — (76) — (76)
Total comprehensive income
for the period — — (76) — 5,832 5,756 (31) 5,725
Balance at 31 March 2014 1,747 9,375 (281) 1,537 5,865 18,243 (82) 18,161
Share
capital
£000
Share
premium
account
£000
Foreign
exchange
reserves
£000
Other
reserves
£000
Profit
and loss
account
£000
Total
attributable
to the
owners
of the
Company
£000
Non-controlling
interest
£000
Total
equity
£000
Balance at 1 April 2014 1,747 9,375 (281) 1,537 5,865 18,243 (82) 18,161
Share-based payment charge — — — 92 — 92 — 92
Share option lapsed or exercised — — — (7) 7 — — —
Dividends — — — — (119) (119) — (119)
Transaction with owners directly
in equity — — — 85 (112) (27) — (27)
Profit for the period — — — — 4 4 (15) (11)
foreign operations — — 2 — — 2 — 2
Total comprehensive income
for the period — — 2 — 4 6 (15) (9)
Balance at 30 September 2014 1,747 9,375 (279) 1,622 5,757 18,222 (97) 18,125

Consolidated unaudited interim statement of cash flow
Unaudited
Six months
ended
30 September
2014
£000
Unaudited
Six months
ended
30 September
2013
restated
£000
Audited
Year ended
31 March
2014
£000
Cash flows from operating activities
(Loss) / profit for the period (11) (647) 5,154
Tax charge 24 124 (735)
Net finance expense 9 26 42
Operating profit / (loss) 22 (497) 4,461
Adjustments for:
Depreciation 98 94 284
Amortisation and impairment 661 381 1,226
Share-based payment charge / (credit) 92 (36) 67
Decrease / (increase) in trade and other receivables 495 128 (2,383)
(Decrease) / increase in trade and other payables (122) (147) 574
Increase in deferred income 617 760 895
Foreign exchange difference (34) (29) (17)
Cash generated by operations 1,829 654 5,107
Tax (paid) / credit received (7) (5) 125
Net cash generated by operating activities 1,822 649 5,232
Cash flows from investing activities
Interest received — — 2
Purchase of property, plant and equipment and computer software (116) (330) (395)
Capitalisation of development expenditure (2,005) (2,294) (5,333)
Net cash used in investing activities (2,121) (2,624) (5,726)
Cash flows from financing activities
Shares issued, net of issue costs — 2,783 2,908
Share option modification expense payment — (130) (130)
Repayment of loans (334) (680) (1,013)
Interest paid (10) (26) (44)
Dividends paid (119) (93) (172)
Net cash flow generated by financing activities (463) 1,854 1,549
Net (decrease) / increase in cash and cash equivalents (762) (121) 1,055
Cash and cash equivalents at beginning of period 2,929 1,874 1,874
Cash and cash equivalents at end of period 2,167 1,753 2,929

13
Notes to the interim report
1. Basis of preparation
This interim report was approved by the Board on 15 October 2014.
These consolidated financial statements are for the six months ended 30 September 2014. They have
been prepared in accordance with International Financial Reporting Standards (“IFRS”) and International
Financial Reporting Interpretation Committee (“IFRIC”) interpretations as at 30 September 2014, as
adopted by the European Union. They do not include any of the information required for full annual
financial statements and should be read in conjunction with the consolidated financial statements
of the Group for the year ended 31 March 2014.
The preparation of financial statements under IFRS requires the Board to make judgements, estimates
and assumptions that affect the application of accounting policies, the reported amounts of statement
of financial position items at the period end and the reported amount of revenue and expense during
the reporting period. The estimates and associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the circumstances, the results of which
form the basis of making judgements that are not readily apparent from other sources. However,
the actual results may differ from these estimates. The estimates and underlying assumptions
are reviewed on an ongoing basis.
The Company’s financial statements for the year ended 31 March 2013 have been subject to a review
by the Conduct Committee of the Financial Reporting Council (“FRC”). This review identified errors
with the Company’s accounting policies for capitalising and amortising product development costs.
The Company acknowledges that accounting errors were made in the 2012 and 2013 financial
statements, further details of which are set out in note 5 to these interim financial statements.
This condensed consolidated financial information does not comprise statutory accounts within
the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the year ended
31 March 2014 were approved on 12 May 2014. These accounts, which contain an unqualified
audit report under Section 495 of the Companies Act 2006 and which did not make any statements
under Section 498 of the Companies Act 2006, have been delivered to the registrar of companies
in accordance with Section 441 of the Companies Act 2006.

2. Earnings per share
Basic earnings per share has been calculated by dividing the profit on ordinary activities after taxation
attributable to the owners of the parent by the weighted average number of Ordinary Shares in issue
during each period.
Diluted earnings per share is calculated by adjusting the weighted average number of Ordinary Shares
in issue on the assumption of conversion of all dilutive potential Ordinary Shares. The Group has only
one category of dilutive potential Ordinary Shares, being share options granted under the Enterprise
Management Incentive Plan and Unapproved Scheme.
Unaudited
Six months ended
30 September
2014
Unaudited
Six months ended
30 September
2013
restated
Audited
Year ended
31 March
2014
Profit / (loss) for the period and basic and diluted earnings
attributable to Ordinary Shareholders (£000) 4 (633) 5,199
Weighted average number of Ordinary Shares 263,366,260 243,500,627 251,717,005
Earnings / (loss) per share (pence) 0.00 (0.26) 2.07
Effect of dilutive share options
Adjusted weighted average number of Ordinary Shares 266,477,120 244,947,633 254,768,319
Diluted earnings / (loss) per share (pence) 0.00 (0.26) 2.04
3. Taxation
The taxation charge is based on the effective tax rate expected to apply for the full year, taking into
account the anticipated benefit of brought forward tax losses. The effective tax rate is lower than the
standard tax rate, principally as a result of prior years’ tax losses brought forward which are available
within the Group. In addition, the charge for this interim period includes £7,000 of current tax paid
by overseas subsidiaries.

15
4. Intangible assets
Group
Goodwill
£000
Capitalised
development
costs as
previously
stated
£000
Other
intangible
assets
£000
Total as
previously
stated
£000
Capitalised
development
costs restated
£000
Total
restated
£000
Cost
At 1 April 2013 5,848 7,596 1,047 14,491 7,028 13,923
Additions — 2,435 221 2,656 2,294 2,515
Foreign exchange effect (56) — (32) (88) — (88)
At 30 September 2013 5,792 10,031 1,236 17,059 9,322 16,350
At 1 October 2013 5,792 10,031 1,236 17,059 9,322 16,350
Additions — 2,898 (5) 2,893 3,039 3,034
Foreign exchange effect (41) — (25) (66) — (66)
At 31 March 2014 5,751 12,929 1,206 19,886 12,361 19,318
At 1 April 2014 5,751 12,929 1,206 19,886 12,361 19,318
Additions — 2,005 30 2,035 2,005 2,035
Foreign exchange effect 18 — 11 29 — 29
At 30 September 2014 5,769 14,934 1,247 21,950 14,366 21,382
Amortisation
At 1 April 2013 — 1,315 460 1,775 738 1,198
Provided in the period — 863 70 933 311 381
Foreign exchange effect — — (5) (5) — (5)
At 30 September 2013 — 2,178 525 2,703 1,049 1,574
At 1 October 2013 — 2,178 525 2,703 1,049 1,574
Foreign exchange effect — — (4) (4) — (4)
At 31 March 2014 — 2,480 611 3,091 1,903 2,514
At 1 April 2014 — 2,480 611 3,091 1,903 2,514
Foreign exchange effect — — 5 5 — 5
At 30 September 2014 — 3,050 707 3,757 2,473 3,180
Net book value
At 30 September 2014 5,769 11,884 540 18,193 11,893 18,202
At 31 March 2014 5,751 10,449 595 16,795 10,458 16,804
At 30 September 2013 5,792 7,853 711 14,356 8,273 14,776

4. Intangible assets continued
During the year ended 31 March 2014, one of the Risk Management products was identified as impaired
following a review of the carrying value of capitalised development costs. The product forms part of
the Group’s Risk Management and Trading software operating segment. The net carrying value of the
product was therefore written down to £300,000, resulting in an impairment charge of £424,000 which
was included in the Administrative expenses line of the statement of comprehensive income. The review
was carried out as part of the annual review of the carrying value of all intangible assets. This review
involved a consideration of the recoverable amount of the asset, being the higher of fair value, reflecting
market conditions less costs to sell, and value in use based on an internal discounted cash flow evaluation.
Where the recoverable amount was considered to be lower than the net carrying value, an impairment
charge has been applied. The result of the review identified that future cash flows anticipated from the
aforementioned asset are lower than had previously been expected and hence the asset has been written
down to its recoverable amount by reference to value-in-use calculations. These calculations were based
on discounted cash flows using a discount rate of 10%.
5. Accounting adjustments following review by the Conduct Committee
of the Financial Reporting Council
The review performed by the FRC identified that the Company’s accounting policy for the amortisation
of product development costs was not in compliance with IAS 38: “Intangible assets” in that development
costs meeting the criteria for capitalisation were previously amortised in equal instalments from the end
of the month in which the costs were incurred. By contrast, paragraph 97 of IAS38 requires amortisation
to begin when the asset is available for use.
In conjunction with the review performed by the FRC, the Board also identified that errors had arisen
in the application of the Company’s accounting policy for the capitalisation and amortisation of product
development costs in the years ended 31 March 2012 and 31 March 2013.
The errors identified by the FRC and the Board are summarised as follows:
−−Certain product development costs had been capitalised subsequent to the associated products
becoming capable of operating in the manner intended by management. As such, these costs should
have been expensed as incurred. The effect of this error is to overstate the cost of capitalised product
development costs and understate expenditure by £112,000 and £456,000 in the years ended
31 March 2012 and 31 March 2013 respectively.
−−The Company had commenced amortisation of a number of products before they had become capable
of operating in the manner intended by management. In addition, as noted above, certain product
development costs have been capitalised in error and these incorrectly capitalised costs were themselves
subject to amortisation which was hence charged in error. The effect of these errors is to overstate the
amortisation charge and understate the net book value of capitalised product development costs by
£124,000 and £453,000 in the years ended 31 March 2012 and 31 March 2013 respectively.

17
of the Financial Reporting Council continued
The net impact of these errors was to understate the net result by £12,000 in the year ended 31 March 2012
and to overstate the net result by £3,000 in the year ended 31 March 2013. Notwithstanding the fact
that these amounts are not significant to the consolidated balance sheet, the consolidated statement
of comprehensive income and the consolidated statement of changes in equity, the Company acknowledges
that this error affected both the cash flow statement and the note disclosing movements in capitalised
product development costs published in the financial statements for those two years.
The aforementioned errors were identified in the year ended 31 March 2014 and, as such, the unaudited
comparative information to these interim unaudited financial statements has also required restatement.
The effect of this restatement is to increase staff costs by £141,000 and reduce amortisation charges
by approximately £552,000. Net cash inflows from operating activities have decreased by £141,000 with
a corresponding decrease in net cash outflows from investing activities for the unaudited comparative
interim financial statements for the six month period ended 30 September 2013. These adjustments
have been reflected in the comparative primary statements of these interim unaudited financial
statements and the earnings per share figure has likewise been restated.

With respect to product development costs, the table below sets out the correct information for both
years and also includes the information which was previously presented, in order to aid comparison.
Intangible assets
Group
Goodwill
and other
intangible
assets
£000
Capitalised
development
costs as
previously
stated
£000
Total as
previously
stated
£000
Capitalised
development
costs restated
£000
Total
restated
£000
Cost
At 1 April 2011 3,910 — 3,910 — 3,910
Additions 2,830 3,318 6,148 3,206 6,036
Foreign exchange effect 36 — 36 — 36
At 31 March 2012 6,776 3,318 10,094 3,206 9,982
At 1 April 2012 6,776 3,318 10,094 3,206 9,982
Additions 39 4,278 4,317 3,822 3,861
At 31 March 2013 6,895 7,596 14,491 7,028 13,923
Amortisation
At 1 April 2011 266 — 266 — 266
Provided in the year 73 287 360 163 236
At 31 March 2012 339 287 626 163 502
At 1 April 2012 339 287 626 163 502
Provided in the year 114 1,028 1,142 575 689
At 31 March 2013 460 1,315 1,775 738 1,198
Net book value
At 31 March 2013 6,435 6,281 12,716 6,290 12,725
At 31 March 2012 6,437 3,031 9,468 3,043 9,480
Whilst the above errors had no impact on the net cash position of the Company in either year, they
resulted in errors in the cash flow statement as operating and investing activities were misstated due
to the aforementioned incorrect amortisation and capitalisation of costs respectively. Restated cash flow
statements for both years are set out below.

19
Consolidated cash flow statement
For the year ended 31 March 2013
Year ended
31 March 2012
as previously
stated
£000
Year ended
31 March 2012
restated
£000
Year ended
31 March 2013
as previously
stated
£000
Year ended
31 March 2013
restated
£000
Cash flows from operating activities
Profit for the period 2,505 2,517 3,714 3,711
Tax charge / (credit) (18) (18) 182 182
Finance income (2) (2) — —
Finance expense 32 32 86 86
Operating profit 2,517 2,529 3,982 3,979
Adjustments for:
Depreciation 122 122 140 140
Amortisation 360 236 1,142 689
Share-based payment charge 21 21 2 2
Decrease / (increase) in trade and other receivables (2,504) (2,504) 825 825
(Decrease) / increase in trade and other payables 315 315 (114) (114)
(Decrease) / increase in deferred income 1,018 1,018 (173) (173)
Foreign exchange gains (84) (84) (49) (49)
Other non-cash credit — — (51) (51)
Cash generated in operations 1,765 1,653 5,704 5,248
Tax credit received 18 18 53 53
Net cash inflow from operating activities 1,783 1,671 5,757 5,301
Cash flows from investing activities
Interest received 2 2 — —
Purchase of property, plant and equipment
and computer software (195) (195) (209) (209)
Purchase of business (1,963) (1,963) (470) (470)
Capitalisation of research and development costs (3,318) (3,206) (4,278) (3,822)
Net cash used in investing activities (5,474) (5,362) (4,957) (4,501)
Cash flows from financing activities
Interest paid — — (86) (86)
Loans from bank 2,000 2,000 329 329
Loans and other consideration paid — — (667) (667)
Shares issued, net of issue costs 140 140 1,509 1,509
Dividend paid (103) (103) (139) (139)
Net cash generated by financing activities 2,037 2,037 946 946
Net increase / (decrease) in cash and cash equivalents (1,654) (1,654) 1,746 1,746
Cash and cash equivalents at beginning of period 1,782 1,782 128 128
Cash and cash equivalents at end of period 128 128 1,874 1,874

Company information
Company registration number
3224870
Directors
Philip Crawford
Chairman
John Wisbey
Nigel Gurney
Chief Financial Officer
Nick Davies
Chief Technology Officer
John McCormick
Senior Non-executive Director
Steve Rogers
Non-executive Director
Company Secretary
Lisa Tan
Registered office
7th Floor
Ludgate House
245 Blackfriars Road
London SE1 9UF
Nominated adviser and broker
Charles Stanley Securities
131 Finsbury Pavement
London EC2A 1NT
Auditor
Grant Thornton UK LLP
Grant Thornton House
Melton Street
Euston Square
London NW1 2EP
Corporate solicitors
Memery Crystal
44 Southampton Buildings
London WC2A 1AP
Registrars
Computershare Investor Services PLC
PO Box 859
The Pavilions
Bridgwater Road
Bristol BS99 1XZ

Lombard Risk Management plc
7th Floor
Ludgate House
245 Blackfriars Road
London SE1 9UF
UK
tel: +44 (0)20 7593 6700
fax: +44 (0)20 7593 6780
e: investorrelations@lombardrisk.com
www.lombardrisk.com

Lombard Risk Regulatory Compliance Solutions Interim Report

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