www.synstar.com
Synstar plc
Synstar House
1 Bracknell Beeches
Old Bracknell Lane West
Bracknell
Berkshire
RG12 7QX
Tel: +44 (0)1344 662700
Fax: +44 (0)1344 459940
Focus Innovation DeliveryValue
Synstar plc
Annual Report & Accounts for the year ended
30 September 2003
Synstar plc Annual Report & Accounts for the year ended 30 September 2003
Synstar’s Vision:
To be a world class IT services provider Innovation and Leadership
Across Europe Synstar Plc helps hard-pressed IT professionals minimise business risks and
maximise corporate potential. We provide services that are geared to deliver just one thing; the
availability of your business, round-the-clock, round-the-calendar from desktop configuration,
installation and management to the design and detailed implementation of an IT risk
management strategy. From simple software support for a confused end-user to restoring an
entire crisis-struck organisation at one of our dedicated Business Recovery Centres, from a printer
lead to a complex, state-of-the-art, integrated voice and data network. What ever our customers
need to optimise their IT effectiveness and maximise their business availability, Synstar can
deliver it.
By combining our key services, we can now offer customers a flexible Managed Services
solution. This allows companies to selectively outsource the running of their IT infrastructures,
and to focus on the day-to-day running of their business, safe in the knowledge that Synstar is
ensuring business availability, both today and in the future.
European Presence
Our pan-European network of offices and
Business Recovery Centres are staffed by
some of the world’s finest IT specialists. Our
vendor-independence and certified quality
systems let us put customer priorities at the
very heart of everything we do. Our rapid
growth and a client list of the bluest chips are
the hallmarks of an organisation confidently in
tune with the real needs of its customers.
Minimising
Business Risk
Maximising
Business
Availability
Synstar plc Company Overview
Managed Services Networking Services Computer Services Business Continuity Data Management
Responding to strong customer interest, Synstar
has created a new Centre of Excellence, devoted
to developing bespoke Managed Service solutions
that will meet the very particular needs of
individual customers.
The new team draws on the industry-leading
technical expertise and resources already available
through Synstar’s other Centres of Excellence,
bringing them together to create solutions that are
rooted in a broad-based and detailed knowledge of
the client organisation, its operations and IT
infrastructure, and which delivers exceptional
strategic fit at sensible cost.
Synstar is a vendor independent network integrator
providing specialist knowledge in IP telephony,
security solutions, wireless networking, remote
network management, network integration,
maintenance and support. Synstar supplies,
manages, supports and monitors its customers’
networks, as well as having the capacity to design,
install and support large local- and wide-area
networks. Synstar uses its expertise to ensure traffic
is routed in the most efficient way around a network,
ensuring it is never too busy or blocked. Remote
monitoring means a business can be alerted before
it even knows there is a problem.
Our Computer Services offers independent hardware
and software support services from mainframe to
servers, including desktop management services 
and computer repair. Our VIDA lifecycle management
service offers on-site and mobile engineers,
consultants and planners to deliver every imaginable
desktop support service. Synstar can directly support
over 13,000 hardware product types, from a wide
range of manufacturers. It offers companies support
for standard software packages, as well as bespoke
applications. Synstar’ s onsite or remote service desk
facility ensures problems are tracked and controlled
from receipt to the point of resolution.
Synstar offers comprehensive Business Continuity
consultancy, services and solutions to ensure that,
should a disaster occur, operations will not be
disrupted for a second longer than is necessary. 
This includes the design and support of effective
plans, plan testing and training. Synstar also
provides Business Recovery Centres and Mobile
Services. If a disaster forces a company from its
premises, Synstar has a pan-European network
of secure Business Recovery Centres with all the
systems and support needed to maintain a business.
Mobile support units can also be on a customer site
within hours, providing state-of-the-art IT and end
user facilities.
Synstar provides companies with all the elements
that protect data throughout its life – from back up
and network storage to archiving and retrieval
solutions. The services that Synstar delivers cover the
complete lifecycle of the solution, from design and
implementation to maintenance. Effective Data
Management is particularly important in industries
that produce vast amounts of data such as the
automotive, chemical, broadcasting, education and
pharmaceutical sectors. Synstar is already providing
Data Management solutions to many companies in
these sectors.
➞ ➞ Office Locations
UNITED KINGDOM
Synstar plc
Synstar House
1 Bracknell Beeches
Old Bracknell Lane West
Bracknell, Berkshire
RG12 7QX
Tel: +44 (0) 1344 662700
Fax: +44 (0) 1344 662743
Cumberland House
Old Bracknell Lane West
Bracknell, Berkshire
RG12 7QU
Tel: +44 (0) 1344 662700
Fax: +44 (0) 1344 459940
29 Valepits Road
Garretts Green
Birmingham
B33 0TD
Tel: +44 (0) 121 784 7445
Fax: +44 (0) 121 783 4015
Concorde Road
Patchway, Bristol
BS34 5TB
Tel: +44 (0) 117 900 7500
Fax: +44 (0) 117 900 7501
Wilkinson House
Stafford Court, Stafford Park 1
Telford
TF3 3BD
Tel: +44 (0) 1952 290488
Fax: +44 (0) 1952 290489
The Mount Business Centre
2 Woodstock Link
Belfast
BT6 8DD
Tel: +44 (0) 28 9073 0170
Fax: +44 (0) 28 9073 0172
3 Dunlop Square
Deans Southwest Industrial Estate
Livingston
EH54 8SB
Scotland
Tel: +44 (0) 1506 419111
Fax: +44 (0) 1506 460135
For all UK enquiries e-mail:
enquiries@synstar.com
BELGIUM / BELGIQUE / BELGIË
Hoge Wei 16
B-1930 Zaventem
Belgique / België
Tel: +32 (0) 2 715 6700
Fax: +32 (0) 2 715 6765
E-mail: contact.info@synstar.be
Tollaan 63-65
1932 St.-Stevens-Woluwe
Belgique / België
Tel: +32 (0) 2 713 6811
Fax: +32 (0) 2 713 6822
E-mail: info@synstar.be
FRANCE
86-108 Avenue Louis Roche BP82
92233 Gennevilliers Cedex
France
Tel: +33 (0) 1 4685 9797
Fax: +33 (0) 1 4685 9799
10 Avenue du Québec
Bâtiment E3, BP 507
91946 Courtaboeuf Cedex
France
Tel: +33 (0) 1 6929 8820
Fax: +33 (0) 1 6907 9774
For all French enquiries e-mail: 
infos@synstar.fr
GERMANY / DEUTSCHLAND
Pallaswiesenstr. 174-182
64293 Darmstadt
Deutschland
Tel: +49 (0) 6151 9890
Fax: +49 (0) 6151 891772
E-mail: info@synstar.de
NETHERLANDS / NEDERLAND
Burg. Verderlaan 9
3544 AD Utrecht
Nederland
Tel: +31 (0) 30 6692211
Fax: +31 (0) 30 6692395
E-mail: info@synstar.nl
LUXEMBOURG
211, rue des Romains
L-8041 Bertrange, Luxembourg
Tel: +352 (0) 31 98 60
Fax: +352 (0) 31 98 72
26 rue de Strasbourg
L-2560 Luxembourg
Tel: +352 (0) 49 50 40 20
Fax: +352 (0) 49 50 40 53
For all Luxembourg enquires e-mail:
contact.info@synstar.lu
SPAIN / ESPAÑA
San Severo 30 – Barajas Park
28042 Madrid
España
Tel: +34 (0) 91 329 0237
Fax: +34 (0) 91 329 3098
E-mail: ventas@synstar.es
REPUBLIC OF IRELAND
Unit 1
Swords Business Campus
Balheary Road, Swords
County Dublin
Eire
Tel: +353 (0) 1 449 2000
Fax: +353 (0) 1 449 2001
E-mail: enquiries@synstar.com £200m
01
Synstar plc Annual Report and Accounts 2003
➞ Total operating profit up 6% to £8.5 million (2002: £8.0 million) 
➞ Net cash inflow before financing is up 17% to £9.8 million (2002: £8.4 million)
➞ Dividend payments initiated at 0.5p per share
➞ Mixed performance in Continental Europe counterbalanced by strong
performance in core UK business where operating profits were up 44%
to £13.7 million (2002: £9.5 million)
➞ New Managed Services customers including Cognotec, Atomic Weapons
Establishment, Dutch Ministry of Defence (DTO) and the Spanish Department 
of Health (CAM)
➞ Largest ever contract signed with Fujitsu in September 2003 worth
approximately £200 million
➞ Phase 4 initiated to accelerate strategic programme to address expected
Maintenance margin decline 
Contents
Synstar plc Company Overview
01 Key Highlights
02 Chairman’s Statement
04 Chief Executive’s Review
14 Financial Review
18 Board of Directors
20 Directors & Advisers and Shareholder Information
21 Financial Contents
22 Report of the Directors
25 Report of Remuneration Committee
32 Environmental Policy Statement
33 Corporate Governance
37 Audit Committee Report
39 Independent Auditors’ Report
40 Consolidated Profit and Loss Account
41 Consolidated Statement of Total Recognised 
Gains and Losses
42 Consolidated Balance Sheet
43 Company Balance Sheet
44 Consolidated Cash Flow Statement
45 Statement of Accounting Policies
47 Notes to the Accounts
68 Five Year Summary
69 Office Locations
17%
Net Cash inflow before financing 
is up by 17%.
Contract signed with Fujitsu 
worth £200m.
Key Highlights Chairman’s Statement
John Leighfield CBE 02
Synstar plc Annual Report and Accounts 2003
The most intractable problem we have faced
recently has been with our operations in
France, where a combination of lack of critical
mass and the inherent inflexibility of the
French business environment has defied all
attempts to bring the operation into profit.
We are therefore pleased to be at an
advanced stage of negotiations for the
disposal of this business.
As we come to the conclusion of the third
phase of the strategy, we need to gear up for
the next phase of the Group’s development.
The Board believes strongly that action is
needed in the face of the inexorable pressure
of reducing margins in our Maintenance
business. Building on the foundations of
what we have already put in place, we
need to invest to accelerate our strategy.
This will allow us to exploit more fully our
competence in winning larger and more highly
differentiated contracts. The winning of the
AWE and Fujitsu contracts are examples of
what we can now achieve. Synstar’s track
record of delivering once the course of action
has been set gives us the confidence to build
the value of the Group in this way through a
fourth phase.
It is our intention to pay our maiden dividend
of 0.5p per share following shareholder
approval at the Annual General Meeting in
March 2004. We believe that this makes a
statement about the quality of the business.
It is set at a level that makes us confident
that the dividend will be sustainable, and will
improve over time.
At the Interims I also said that the Board 
was in the process of recruiting an additional
independent Non-Executive Director. We were
delighted when Jo Connell agreed to join the
Board. Jo was previously Managing Director
of Xansa plc and she brings a wealth of
experience of the type of higher value added
service that will be crucial as we develop
Phase 4 of the strategy. 
John Leighfield 
Chairman
1 December 2003
29 September 2003
Two new contract wins in Spain 
worth 4m Euros
Synstar has won two new public sector
deals in Spain. The contracts are with the
Spanish Traffic Department (DGT) and the
Health Department CAM (Comunidad
Autonoma de Madrid).
19 August 2003
2003
Our year in review
Overall Synstar performed strongly in 2003. We 
have consistently said that our over-riding principle 
is to manage the business for profit and cash. This
remained true in 2003. Year on year operating profit
has risen by 6% from £8.0 million to £8.5 million; net
cash inflow before financing has increased by 17%
from £8.4 million to £9.8 million.
Synstar signs £200m seven-year
contract with Fujitsu Services
Synstar will be providing Fujitsu Services
with a logistics service to support the
Maintenance contracts of Fujitsu’s
operations in the UK and mainland Europe.
The arrangement encompasses the delivery
of computer parts, and the associated
capital purchases, strategic planning, bid
support, warehousing and distribution. 03
Synstar plc Annual Report and Accounts 2003
Synstar achieves Gold Certification
from Cisco Systems
Synstar has achieved Gold Certification from
Cisco Systems, Inc. The Cisco partner
certification program provides Synstar with the
resources to develop an expertise in selling,
implementing and supporting Cisco network
solutions. By achieving Gold Certification
status, Synstar can assure customers it has
obtained the highest Cisco standard for
network expertise and support capabilities.
14 May 2003
Cognotec appoints Synstar for
Managed Services
Synstar has been awarded a Managed
Services contract by Cognotec, the world's
leading provider of automated trading
technology for financial institutions across
the globe. Synstar will manage services for
Cognotec to ensure continuous network
uptime and IT infrastructure availability to
provide the 24/7 service Cognotec delivers 
to its clients.
28 May 2003
Synstar wins new £15m contract 
with AWE
Synstar has signed a new £14.96m, seven-
year contract with the Atomics Weapons
Establishment (AWE). The contract will see
AWE using four out of Synstar’ s five service
lines; Managed Services, Hardware
Maintenance, Data Management and
Networking Services.
3 May 2003 Chief Executive’s Review
Steve Vaughan 04
Synstar plc Annual Report and Accounts 2003
Synstar has shown itself able to build upon a
heritage of service based on Maintenance to build 
a strong capability for Business Continuity, and now
for Managed Services. The time is right to take the
opportunity for that growth in Managed Services 
to develop Synstar at a faster rate. We will pursue
that growth with the same vigour that produced the
considerable progress over the past three years.
Introduction
In January 2001, Synstar embarked upon a
programme of immense change. My three
year strategy was designed to make the most
of customer relationships and build an
integrated IT services business. We have
invested much time, effort and money during
those three years. The results – financial,
commercial and technical – are encouraging. 
2003 has been another year of profit growth
for Synstar, with adjusted earnings per share
up 6% to 3.6 pence. Sales of larger contracts
and more long term relationships have
increased the order book by 56% in the past
year. We have also exceeded expectations for
cash generation, ending the year with £26.9m
of net cash. The balance sheet has never been
stronger and supports our maiden dividend.
During the year, we were troubled by the
performance of our businesses in France.
This makes our negotiations for the disposal
of this business all the more important. 
Excluding France, operating profit from our
business was up 30% at £11.8m (2002:
£9.1m). If completed, our disposal of this 
business will represent a firm resolution of a
difficult problem and leave in place a partner
with whom we can continue to develop our
international customer relationships.
The successful outcome of our strategy has
opened the door to an opportunity. We have
developed a capability to win and deliver
Managed Services. The market for this type of
business is expanding, and our track record
has developed well. We can develop this into
a major new profit stream. At the same time,
we have become concerned at the rate of
margin erosion and price pressure in other
parts of our business. We have to take this
opportunity quickly to keep our profits secure
in the long term. The actions we need to take
will necessarily have a detrimental effect on
the coming financial year, particularly in the
first half, but the expected long term benefits
are considerable. Our strategy has to continue
into the future, and this review explains how. 
Phase 3 of the strategic plan 
is drawing to a close. The key 
elements of the strategy were:
➞ to have a much-increased focus
on the identification and closure
of larger more joined up deals
with our key customers
➞ to rollout our standard service
lines across the whole of the
Company – to enable us to deliver
full infrastructure Managed
Services consistently across 
the whole of Europe
➞ to increase upon staff development,
careers and communication, as our
business becomes increasingly
dependent upon quality of people
rather than quantity of assets 05
Synstar plc Annual Report and Accounts 2003
€4m
Synstar Spain wins two public sector
deals worth 4m Euros.
“By combining our German and UK businesses
into one pan-European unit we are able to
quickly capitalise on their strengths. Despite
challenging economic conditions in Germany,
it has achieved the highest customer
satisfaction scores in the Group. This is a
sound foundation on which we can transfer
our UK Managed Services success to this
market and accelerate our revenue growth.”
Mike Ettling, Managing Director,
UK & Germany
2003 review
The key feature of the year has been the
growth of our ability to win larger and more
complex contracts. We have improved the key
capabilities required for these transactions.
We are better able to understand the needs
of our customers, and to explain more
complex propositions to our customers. We
have become better at combining several
parts of our offering to produce a better,
lower cost solution. New Managed Services
customer wins during the year have included
Cognotec (in Ireland), the UK Atomic Weapons
Establishment (AWE), the Dutch Ministry of
Defence (DTO), a large UK private healthcare
provider and the Spanish Department of
Health (CAM).
A Managed Services business must deliver
excellent service as well. We must deliver
change programmes to make improvements to
the way customer infrastructure operate. 
At AWE we have implemented a
fundamentally new way of managing 
the network so that service levels can be
proactively managed. We need to be able to
take on staff from the customer and integrate
them with our own resources so that the new
combination can be more effective. Our recent
survey from Investors in People has specially
praised our skills in staff transfer. We need to
work effectively with partners, and Synstar
has always been well known for this – our
business with CSC has expanded by 23%
during the year. For all these reasons, we are
becoming an important force in the provision
of Managed Services.
At the same time, our existing services have
prospered. Our many customers who depend
on us for Maintenance and Business
Continuity remain the major part of our
revenue. Growth of these relationships has
continued through the year. It is particularly
pleasing when these relationships are
renewed or expanded in a major way. We
have agreed global contracts to provide
Maintenance to Shell and Reuters, both
already significant customers.
The financial report shows that these plans
have borne the most fruit in the UK. But this
is not solely a UK-centric success story.
As an example, our business in Spain has
benefited in the last few months from a
greater focus on fewer, larger opportunities.
Wins with the Health Service and Traffic
Department have brought new business worth
about €4m per annum to the business and
leads us to expect improvement in Spanish
profits during 2004. 
Unfortunately not all our operations have 
had such a good year. The performance 
of our French business has been very poor,
especially in the second half of the year. 
The reasons for this are covered in more
detail later. In Belgium our margin has
declined because our largest customers 
have reduced their IT budgets and the rate 
of project work has fallen off. Renewals 
have been achieved, but at lower margin. 
In Germany, economic conditions have been
very difficult. A lack of new name sales and
too much dependence on a weak product
solutions market have depressed the revenue.
Our German business needs more attention on
cost reduction and management strengthening
to improve the profits and drive some growth.
Some steps have already been taken, and we
are investigating opportunities to make more
radical improvements.
continued on page 6 2003 review continued 
Business Continuity has delivered another
good performance. The revenue remains
strong, our margins remain high, and
customers regard this service with growing
interest. We have expanded our capabilities
with some careful investment during the year.
We have introduced the service to Germany
with the opening of our new Business
Recovery Centre near Frankfurt. 
We have improved our capability in other
centres. Despite this investment, we have
continued to increase our ROCE in this
business. For the future, we have new service
offerings, expanding Business Continuity into
a fully-fledged high availability computing
capability – continuous computing whatever
goes wrong. This solution has been tried
successfully with several customers, and is
now being launched to existing customers as
a major expansion in service.
The year was rounded off with the signing of
our largest ever contract (£200m) – to provide
Fujitsu Computer Services with Maintenance
logistics services. From April 2005 we will
deliver the right spares at the right time to
Fujitsu engineers all over Europe. Our solution
uses our own logistics organisation, which
will treble in size as a result. This contract is
a form of Business Process Outsourcing – a
new departure for Synstar. Most importantly,
it shows us able to construct this type of
complex, leveraged, value based proposition.
Review of the marketplace
Synstar’s services proposition is founded upon
the three facts that we can:
a) Deliver it better than our customers
can do it themselves;
b) Provide a range of matched services
covering the whole infrastructure –
more than a niche provider; and,
c) Leave the customer in control of the part
of the IT spend that really adds to his
competitive advantage – the applications.
In recent years, changes in the marketplace
have made these features more attractive to
customers. Customers want fewer suppliers;
those that remain must be able to deliver a
range of services. Life is getting harder for
the niche players. Customers want variable
pricing – paying more when demand is high,
less in slack periods. Contracts are not won
just by being cheap. 
Customers are more wary of long term
commitments involving large scale 
outsourcing. It is harder for the big outsourcers
to sell their huge, generic propositions.
There is an emerging space in the market for a
range of services of good quality in an offering
that provides a clear return for the customer.
This is where Synstar is positioned. 
Although there is a space opening for us 
in the market, we are not immune to market
pressures. As we renew our long term
contracts, we are seeing a real squeeze of
margins. Sometimes we can resist this pressure
by offering more services or finding new ways
to reduce cost. Sometimes, but not always.
Nowhere has this squeeze been more felt than
in our Maintenance business. Small scale
maintenance of PCs and printers is already at
such a low price it is hard to make a profit. This
state of affairs will spread to other areas of
maintenance that have been a major source of
our profit. We must expect that other parts of
our service offering will go the same way –
product-based solutions and network cabling
for example.
continued on page 9
Chief Executive’s Review
continued 06
Synstar plc  Annual Report and Accounts 2003
21%
Business Continuity operating profit 
up 21%.
“Synstar currently provides logistics
services to its own network of UK and
European operations and both Synstar 
and Fujitsu Services have established that
there are clear benefits in combining the
investment and sharing economies of scale
involved in this activity. The agreement will
see Fujitsu Services enhancing its logistics
capability significantly.”
Steve Hill, Services Director 07
Synstar plc Annual Report and Accounts 2003
£200m contract signed with Fujitsu
Synstar has signed a £200m contract to provide Fujitsu Services with
a logistics service to support Maintenance contracts of Fujitsu’s
operations in the UK and mainland Europe. The deal encompasses 
the delivery of computer parts, and the associated capital purchases,
strategic planning, bid support, warehousing and distribution. 
CASE STUDY FUJITSU
“We have been piloting Synstar’s service
since January 2003 and have been
impressed by the dynamic and flexible
service delivery that we have received.
This, coupled with the innovative nature 
of the commercial deal, made the Synstar
offer compelling.”
Andy MacNaughton, Group Commercial Director,
Fujitsu Services Chief Executive’s Review
continued 08
Synstar plc Annual Report and Accounts 2003
“In the past three years, under the leadership of Steve
Vaughan, Synstar has enjoyed notable successes in
developing best practice in the UK. My newly created
role is to instil that best practice through operations in
Ireland, Belgium, The Netherlands, Luxembourg and
the UK Public Sector, developing new business and
enhancing service delivery to our customers. I’m
particularly excited about the work we are doing in 
bringing together the public sector expertise we have
built up in recent years, identifying synergies
throughout Europe and further streamlining our
services into this market.”
Ruth Kirby, Managing Director, 
Belgium, The Netherlands, Luxembourg, 
Ireland and UK Public Sector 09
Synstar plc Annual Report and Accounts 2003
Review of the marketplace continued
Our strategy’s first three phases were designed
to develop Managed Services as a replacement.
This is developing, but we are concerned that
the Maintenance margin will decline faster than
the Managed Services margin will increase.
Action is needed to accelerate.
To successfully respond to the evolving
market we must address two fundamental
issues – our European business, and our
ability to win Managed Services. I will cover
our plans for each of these in turn. Together,
they represent the next stage in strategy for
Synstar – ‘Phase 4’.
The European question
The multi-national dimension of Synstar’s
service offering has been a key feature of our
business in recent years. Infrastructure service
providers with a European reach appear to have
an advantage over more local players. Some of
our large, multinational customers buy from us
partly because we can deliver a standard
service in many different places. But this
geographic reach comes with a cost. Our
business is quite complex, and the management
controls needed are costly. We have sub
locations that are sub-critical. There is a trade-
off between the benefits of a wide reach and
the cost of achieving it, and the balance point
of this trade-off must be re-evaluated.
In addressing those parts of the Group that
are under-performing, we have tried different
solutions, with differing success.
One solution is to make an investment in
focus and business development. Our Spanish
business has benefited from this approach.
A new sales force, development of some new
services, and focusing of our sales resources
on fewer, larger opportunities have produced a
major improvement in the business. In 2004,
this business will move from break even to a
profit on the back of a series of contract wins.
Our Dutch and Irish businesses have responded
in the same way to a similar approach.
Elsewhere, we have used a model of
presence in a country for delivery only.
Denmark is an example, where we deliver 
to a small range of customers without the
overhead of direct management, sales force
or legal entity. In some situations, this can 
be effective and low cost, while preserving
the benefits of service quality that
membership of a large group can provide.
Despite our best efforts, we have been unable
to be successful in some parts of Europe. In
past years I have taken the difficult decision to
sell our businesses in Italy and Switzerland.
In each case, we have retained them as our
appointed subcontractors in those countries,
and thus have been able to provide a seamless
and consistent service to our customers.
We are now in advanced negotiations to sell
our business in France. We expect to complete
these negotiations, and the necessary works
council consultations, in the near future. To
explain the reasons for this development, it 
is worth explaining how our French business
has performed recently. It is a long term loss
making business. The revenue streams depend
on project and product revenue for over 50%
of the revenue, areas that market conditions
have hit hard. We have a less well focused
customer base in France, and the fixed cost 
of covering the whole country with mobile
engineers is onerous.
continued on page 10
56
%
Order book has increased by 56%.
“Strategic Accounts was formed after listening to
feedback from our major pan-European customers.
They commented that ‘major customers need
significant commitment’ from their chosen providers,
‘more of a partnership working together to meet 
joint business objectives’. Today, Strategic 
Accounts includes CSC, Galileo and major users 
of infrastructure support services across Europe,
providing high levels of support to major customers.
The Spanish business is showing great promise with 
two significant wins in the fourth quarter, worth a total
of €4m. Both contracts are with Spanish government
agencies and are contracted for infrastructure support
services and underpin our strategy with a broad
mixture of new services delivered directly by Synstar.”
Keith Headland, Managing Director 
for Strategic Accounts and Spain Chief Executive’s Review
continued 10
Synstar plc Annual Report and Accounts 2003
44%
UK operating profit up 44%.
“Many organisations have recognised that outsourcing the entire IT
function (including IT strategy) is too risky. Yet keeping all elements
of IT in-house can prove costly and inefficient. The launch of our
Managed Services division means that companies can on-source
particular elements of their IT and associated processes to Synstar
and in doing so strip out inefficiencies and gain industry leading
processes. And through working with Synstar’s Managed Services
team, they can maintain total control of their business. I believe that
there is a massive opportunity for this type of proposition to be
successful in our markets and I’m excited about the role I’ll be
playing in making it work.”
Russell Flower, Managed Services Director
The European question continued
The cost reduction measures to address
these issues are very difficult to carry out
successfully in France, and experience shows
it is even harder to do this when the business
is part of an international group. All these
reasons suggest that a smaller scale, locally
managed solution represents a better future
for the business.
The disposal would follow a similar pattern
to the two preceding transactions. We will
achieve the benefits of a clean break exit
from a difficult business making losses. At
the same time have retained a local delivery
partner that uses our processes and is tightly
bound into our delivery infrastructure. Synstar
France will continue as a close partner, an
important component of our service offering,
but an independent one.
These disposals – in Italy, Switzerland and
potentially France – have produced a new sort
of delivery capability in Europe. This ‘Synstar
Business Network’ represents a standardised
delivery solution with wide geographic reach,
while avoiding some of the costs inherent in
multinational organisations. I hope to be able
to expand this model in the coming years, to
provide the same level of integrated solutions
to the widening requirements of our customers.
Phase 4 and beyond
We have made good progress over the last
three years, and earned ourselves an
opportunity. From a background of business
dominated by Hardware Maintenance, we
have built a genuine multi-service-line,
Managed Services provider. The opportunity 
is to continue to do so with a much higher
level of commitment and volume. We need to
turn a series of exciting, different
relationships currently representing 
a minor part of our profit into the core of 
the business. 
We also face a pressing need to accelerate
this transition. We have seen a big increase in
price pressure in our core Maintenance market.
We must respond by ensuring that we outpace
this pressure by accelerating the rate of
progress of our Managed Services business. At
the same time, we must continue to exit from
elements of our core Maintenance offering
when margins fall below an acceptable level.
Synstar has faced this type of challenge
successfully in the past. Business Continuity
was developed as a new revenue stream
during the mid-nineties. This has become a
key part of our offering, delivering around half
of our profit. It replaced the profit stream
derived from business that is now very low
margin – product fulfilment, the sale of
consumables, etc. We have exited these
businesses over the past two years.
We have now put together a compelling track
record in the core elements of the Managed
Services offering – delivery to demanding
service levels; transfer of staff under TUPE;
skills in network management and call handling;
delivery of upgrade projects to improve
customer IT processes. We must accelerate
our capabilities in all of these areas to speed
up the development of this profit stream. 
We shall invest in our technical and project
management skills to deliver transition
projects and complex service delivery
requirements together with the sales and
sales support skills needed to create these
solutions for customers. 
continued on page 12 11
Synstar plc Annual Report and Accounts 2003
Synstar wins new £15m contract with AWE 
In May 2003, Synstar began its £15m seven-year contract with the
Atomic Weapons Establishment (AWE). The partnership sees AWE
using four out of Synstar’s five service lines: Managed Services,
Hardware Maintenance, Data Management and Networking Services.
The contract is another example of Synstar’s strategy to provide 
larger customers with innovative multi-service offerings under 
long term contracts. 
CASE STUDY AWE
“We were determined to find a partner who
was experienced in providing end-to-end
services, able to demonstrate innovative
approaches to our business and technology
requirements, and to do so in a cost effective
manner. Following extensive competition
and evaluation phases, we chose Synstar
to be that partner.”
Chris Locke, Head of IT Business Systems at AWE Chief Executive’s Review
continued 12
Synstar plc Annual Report and Accounts 2003
Phase 4 and beyond continued
We shall invest in the senior management
team needed to sponsor these high-level
customer relationships and manage the rate of
change in the organisation. Clearly, as we exit
some parts of our Maintenance offering, a part
of the investment will be to reduce the cost
of delivery in those areas by retraining,
redeployment and in some cases the reduction
of spend in those areas. As a result, we
expect an operating exceptional charge of
approximately £5m.
A three-part view of our business will emerge
from the change. Firstly, Managed Services and
related large scale customer relationships will
become the key engine of growth for the
Company. We will develop this area with
innovation, good customer management and
sales effort. Secondly, Business Continuity will
remain as a key element of our profit, and
needs to be protected. This business will be
managed to keep margins high and customers
satisfied – stability will be the key requirement. 
Thirdly, the elements of our business with
a more limited future will be separated out
and managed carefully to ensure that costs
are driven down and business is exited where
the margins are too low. There will be three
parts of the business with three different
business objectives.
It is never an easy decision to make an
exceptional charge. The window to exploit this
opportunity is short. To delay – and delay
would be required if this investment were to
be funded only from run-rate spending – would
be to risk failure to exploit our opportunity
while we can. We believe that the return on
investment from this charge, represented by a
better long term profit stream, is worthwhile.
Summary
I joined Synstar nearly three years ago, and
since then have seen many changes in the
Company. Some aspects of our strategy have
gone well, and others less well. In retrospect,
however, I think it would have been very
ambitious to predict at the start that by now
Synstar would have signed one contract worth
£200m (with Fujitsu) and another worth over
£100m (with CSC). Our order book during this
year has increased by 56%. We have shown
our ability to compete for Managed Services
business with the most demanding customers
against major competitors. We have won this
sort of business, delivered it successfully, and
made a profit doing so. This is progress of
the best sort.
As our strategy matures, so we must now
grasp the opportunity provided by our
successes in Managed Services, and 
“We’re proud that Business Continuity has once again
‘delivered the goods’ as part of Synstar’s service
portfolio. Customers’ confidence in our capabilities
has helped increase revenues; improve profit
contribution; achieve an even better return on 
our investments; and, all the while, maintaining 
our track-record of successfully supporting those
customers at times of most need.
During the year, we initiated a merge with Synstar’s
Data Management activities. This exciting
development goes a long way towards meeting 
our customers’ increasing needs of ensuring higher
availability and agility of their data, business
workspace and IT infrastructure.”
Dennis Thomas, Business Continuity and Data
Management Director considerably accelerate this part of our
business. This means redeploying skills,
investment, assets and people to develop this
side of our business, and progressively reduce
the emphasis on the parts of our business with
a limited lifespan. We don’t have long to do
this, so our exceptional charge in the coming
year is warranted to be sure we exploit the
opportunity to the full.
The heritage of any organisation is always a
major factor determining its future. Synstar has
shown itself able to build upon a heritage of
service based on Maintenance to build a strong
capability for Business Continuity, and now for
Managed Services. The time is right to take
the opportunity of that growth in Managed
Services to develop Synstar at a faster rate.
We will pursue that growth with the same
vigour that produced the considerable progress
over the past three years. I look forward to the
next three years expecting no less progress.
Steve Vaughan
Chief Executive
1 December 2003
13
Synstar plc Annual Report and Accounts 2003
Successful Invocation at AIB
When fire broke out at one of AIB’s offices in late 2002, they tested 
their meticulously prepared business recovery plan for very first time.
Synstar’s Dublin Business Recovery Centre was opened overnight and
prepared for staff using the centre the next day.
The AIB team has declared results of the invocation a great success.
Every staff member was able to perform his or her role perfectly using
the Synstar facilities, just as they would have done in their own
corporate office environment. And, most importantly, customers
remained completely unaffected by the crisis, even though the
temporary arrangements lasted a fortnight.
CASE STUDY ALLIED IRISH BANK (AIB GROUP)
AIB Invocation Timetable
18.45 Fire discovered
19.25 Fire extinguished
Midnight Configuration and test of 80 AIB positions 
of Synstar’s Dublin Business Recovery
Centre (BRC) begins
02.00 Majority of preparation work at BRC
completed
09.00 Business as usual Financial Review
Stephen Gleadle 14
Synstar plc Annual Report and Accounts 2003
£8.5m
Total operating profit has increased 
by 6% to £8.5m.
Financial Highlights:
➞ Revenue £223.0m
➞ T otal operating profit increased
by 6% to £8.5m
➞ Cash flow from the business
remains strong with net cash
inflow before financing at £9.8m
➞ Basic EPS 3.6p
Introduction
The results for the 12 months to 30 September
2003 continue to demonstrate improvement.
Although revenue has remained broadly flat
year on year, operating profit has increased 
6% to £8.5m (2002: £8.0m). The Group is 
now generating interest income of £0.2m
(2002: £nil) and the tax rate has been held 
at 32% (2002: 32%). 
Net cash inflow before financing has increased
17% to £9.8m (2002: £8.4m) and the business
completed the year with £26.9m of net cash
balances (2002: £16.4m).
Thus the Group is now in a robust financial
position, one which provides a solid foundation
on which to continue developing its strategy.
As explained in Steve Vaughan’s commentary
Synstar is in advanced negotiations to dispose
of our French business. This follows the
disposal of our Swiss business in 2002. To
provide better insight into what this means 
in terms of our existing business excluding
France, I have separated the results of these
operations from the published numbers.
Additionally, following a year on year 8%
appreciation of the average Euro exchange rate
compared with Sterling, I have then translated
the 2002 continuing business results at the
same rate of exchange between Sterling and
the Euro as has been used for the 2003 results.
This provides an overall better ‘like for like’
comparison of the results. 
The following commentary is now focused on
explaining the changes in the existing business
excluding France at constant exchange rates. 15
Synstar plc Annual Report and Accounts 2003
Thus the results may be analysed as follows:
2002 2002 2003 
Existing Existing 2003 Existing 
business business Published business
exc. France exc. France results exc. France
2002 2002 2002 2003 2003 2003
Published France/ exchange exchange exchange 2003 exchange
results Switzerland rates rates rates France rates
£’m £’m £’m £’m £’m £’m £’m
Revenue 221.9 18.8 203.1 208.2 223.0 16.4 206.6
Cost of Sales (163.6) (14.5) (149.1) 152.8 (163.4) (14.6) (148.8)
Gross Margin 58.3 4.3 54.0 55.4 59.6 1.8 57.8
% 26.3% 26.6% 26.6% 26.8% 28.0%
Selling and Marketing costs (12.2) (1.8) (10.4) (10.7) (12.2) (1.8) (10.4)
Administration expenses (38.1) (3.6) (34.5) (35.4) (38.9) (3.3) (35.6)
Operating profit /(loss) 8.0 (1.1) 9.1 9.3 8.5 (3.3) 11.8
%3.6% 4.5%4.5% 3.8% 5.7%
Revenue
Revenues have decreased very slightly, by
£1.6m to £206.6m. 
This has been driven by reductions primarily in
project related Data Management revenues in
Germany, which have then been partially offset
by increasing Business Continuity revenues. 
Overall the percentage of total revenues
represented by long term contracts has
increased from 76% in 2002 to 78% in 2003.
Gross margin
Gross margin has increased by 5% from 26.6%
to 28.0% reflecting both the benefit of rising
Business Continuity revenues, which attract
relatively high margins (being offset by lower
margin Data Management revenues) and the
impact of an increased concentration within
the business on cost control, in particular staff
and sub-contract costs.
Operating expenses
Overall operating expenses (being Selling &
Marketing costs and Administration expenses)
have remained essentially flat, with
inflationary pressures being offset by
headcount and other cost controls.
Operating profit
Arising from the above, operating profit 
before exceptional items has increased by
£2.5m to £11.8m, an improvement of 26%. 
Operating margin on the same basis has
increased very significantly, up by 27%
from 4.5% to 5.7%. Financial Review
continued 16
Synstar plc Annual Report and Accounts 2003
Loss on disposal of discontinued operations
The loss on disposal of discontinued operations
shown in the 2002 profit and loss relates to the
disposal of the contracts in the Swiss business,
which took place on 1 March 2002. 
Under the terms of the sale, Itris Maintenance
AG acquired the contracts held by Synstar
Computer Services AG, the stocks of
maintenance equipment, and re-employed 41
of its staff. The consideration for the sale was
a cash payment of £0.3m. The exceptional item
of £1.5m relates to the loss on the sale of the
business and associated costs.
The details of the impact of the expected
disposal of our three French trading entities,
SCS France SA, Atelsi SA and SBC SARL will
be disclosed as and when final agreement has
been reached. 
Interest
As the underlying cash position continues to
strengthen, the Group has now moved into an
interest generating position receiving £0.2m
in the full year (2002: £nil). 
Taxation
Following the significant reductions in tax rate
in 2001 and 2002 the tax rate has been held at
32% for 2003 with the adverse impact from the
French loss position being offset by benefits
arising from the successful resolution of past
tax issues. 
In terms of geography our operating profit can also be analysed as follows:
2002 2002 2003
2003 Exchange 2003 Exchange
rates rates
£’m £’m £’m
UK 9.5 9.5 13.7
Germany 1.4 1.5 (0.3)
Belgium 2.4 2.5 1.5
Holland 0.5 0.5 0.8
Spain 0.2 0.2 0.1
Central support costs (2.0) (2.0) (1.1)
Continental Europe 2.5 2.7 1.0
Central costs (2.9) (2.9) (2.9)
Existing Business exc. France 9.1 9.3 11.8
France (0.9) (1.0) (3.3)
Switzerland (0.1) (0.1) –
Total Operating Profit 8.1 8.2 8.5
The overall picture is of a strong UK performance up by 44% to £13.7m (driven by revenue growth 
of 4% and improved cost control) partly offset by a generally weak performance in the Continental
European businesses, mainly driven by revenue declines. Holland’ s profit increased by 60% to £0.8m
and central support costs reduced by £0.9m to £1.1m. 17
Synstar plc Annual Report and Accounts 2003
In the event our French business is disposed of,
a rate of around 33% on continuing operations
is expected for 2004. In the event it is not, then
the rate will be significantly higher.
Earnings per share (EPS)
Earnings per share has benefited from the
combined impact of increasing operating profit
and the generation of interest income. 
Adjusted EPS has increased 6% from 3.4p to
3.6p this year. Basic EPS has increased 50%
from 2.4p to 3.6p.
Proposed dividend 
The Board proposes a final dividend for the
year of 0.5p per share (£812,500) (2002: nil p)
which, subject to shareholder approval at 
the Annual General Meeting, will be paid on 
20 April 2004 to those shareholders on the
register as at 26 March 2004.
Cash flow and net funds
Cash flow from the business remains strong
with £9.8m being generated (2002: £8.4m).
With the 8% strengthening of the Euro from
1.6057 €/£ at 30 September 2002 to 1.4758
€/£ at 30 September 2003 our Euro cash 
balances have also increased in value when
translated into Sterling. This has generated a
further £0.7m.
The higher cash generation is driven by the
increasing profits and an improved working
capital position. 
The business remained ungeared at 30
September 2003 with net cash balances of
£26.9m (2002: £16.4m). As previously reported,
the timing of payments from some large
customers heavily influences the cash balance
at 31 March and 30 September. However, the
£0.2m interest income indicates that the
Group has maintained a net cash balance
across the year.
Return on capital employed
Pre-tax return on capital employed has fallen
slightly to 20% (circa 14% post tax) driven by
relatively low returns being earned on the
increasing cash in the Balance Sheet. 
With a Weighted Average Cost of Capital
(WACC) of around 10% the Group is
comfortably value generating.
Summary
Despite essentially static revenue, Group profit
has been increased driven by both an emphasis
on cost control and focus on higher margin
revenue streams.
The Group is now well positioned to continue
the development of its strategy.
Stephen Gleadle
Finance Director
1 December 2003
0.5p
The Board proposes a final dividend of
0.5p per share. Board of Directors
18
Synstar plc Annual Report and Accounts 2003
01 Steve Vaughan
02 John Leighfield CBE
03 Stephen Gleadle
04 Mike Ettling
05 Jo Connell
06 Ric Piper
07 Tony Osbaldiston
01 02
03 04 05
06 07 Synstar plc Annual Report and Accounts 2003
19
01 Steve Vaughan (age 43)
Chief Executive Officer D
Steve Vaughan joined the Group on 2 January
2001. Previously he was Managing Director of
the industry and commerce division of EDS
UK. He held a number of Senior Management
roles at EDS having joined the company in
1986. Prior to EDS he worked for Honeywell
Information Systems.
02 John Leighfield CBE (age 65) 
Non-Executive Chairman B, C, F, H
John Leighfield has pursued a career in
information technology with the Ford Motor
Company, Plessey and British Leyland. In
1987, he led an employee buy-out of ISTEL
Ltd, which he established from its origins in
British Leyland and which was acquired by
AT&T in 1989.
John is Chairman of RM plc. He is a member
of the Board of Intellect, the technology
industry Trade Association and is Pro
Chancellor of the University of Warwick.
He was awarded the CBE in the 1998 Queen’s
Birthday Honours List.
03 Stephen Gleadle (age 44)
Group Finance Director 
Stephen Gleadle joined the Group in
January 2000 as Group Finance Director.
He qualified as a Chartered Accountant with
PriceWaterhouse and subsequently spent
11 years with Mars Group in various senior
positions. In 1996 he joined NFC plc as
Director of Financial Analysis and Planning
and in 1998 moved to Tarmac plc as Group
Financial Controller.
04 Mike Ettling (age 39)
Managing Director UK & Germany
Mike Ettling joined the Group on 1 June 2002.
He joined Synstar from EDS, where he spent
five years. He held a number of senior
positions, and for the last three years was
Regional Vice President responsible for
business process outsourcing in central
Europe and Africa. His earlier career was as
Managing Director for National Circulation
Services, a direct marketing services
company, and Studentwise Marketing and
Publishing, a media and recruitment company.
Mike qualified as a Chartered Accountant in
1986 and started his career with KPMG in
South Africa.
05 Josephine Connell (age 55)
Non-Executive Director B, D, F, H
Jo Connell was appointed as Non-Executive
Director of the Group in September 2003.
Jo spent 25 years with Xansa plc. She was
latterly Group Managing Director and was 
a member of Xansa’s Board until she left the
business in March 2003. She also holds 
Non-Executive Directorships with Thus Plc
and London Bridge Software Plc, is a
Governor of the University of Hertfordshire
and a Trustee of Help the Aged.
06 Richard John Piper (age 51)
Non-Executive Director A, D, F, G, H
Ric Piper was appointed as a Non-Executive
Director of the Group in 1999. He qualified as
a Chartered Accountant with Deloitte Haskin
& Sells and has held financial management
positions with ICI, Citicorp and Logica. From
1993 to 2002 he was Group Finance Director
of WS Atkins. He is a member of the Urgent 
Issues Task Force of the Accounting Standards
Board and provides independent financial
advice to a number of businesses in the
Information Technology and Support Services
sectors in the UK and internationally. Ric is
an Adviser to Independent Audit Limited,
specialist Auditors and Advisers on
governance and performance reporting.
07 John Anthony Osbaldiston (age 51)
Non-Executive Director B, D, E, H
Tony Osbaldiston was appointed as a Non-
Executive Director of the Group in 1999.
Having obtained an MSc in management
sciences at Durham University he qualified
as a Chartered Accountant with Coopers &
Lybrand. Between 1989 and 1993, he was the
Finance Director of Volvo Cars UK Ltd. Until
30 November 2001, Tony was an Executive
Director of FirstGroup plc and between 1994
and 2001 was the Group Finance Director and
Deputy Chief Executive. He was also
President of FirstGroup America from 1999 
to 2001. Tony received the Scottish Finance
Director of the year award in 1999.
Key
AChairman of Audit Committee
BMember of Audit Committee
CChairman of Nominations Committee
DMember of Nominations Committee
EChairman of Remuneration Committee
FMember of Remuneration Committee
GSenior Independent Non-Executive Director
HIndependent Director Directors & Advisers and Shareholder Information
20
Synstar plc Annual Report and Accounts 2003
Directors and Advisers
Chairman (Non-Executive) J P Leighfield CBE
Chief Executive S W Vaughan
Group Finance Director S D Gleadle
UK and Germany Managing Director M E Ettling
Non-Executive Directors R J Piper
J A Osbaldiston
J Connell
Registered Office: Synstar House, 1 Bracknell Beeches, Old Bracknell Lane West, 
Bracknell, Berkshire, RG12 7QX
Registered Number: 3416147
Company Secretary: S D Gleadle
Auditors: Deloitte & Touche
Four Brindleyplace, Birmingham B1 2HZ
Principal Bankers: Barclays Bank Plc
54 Lombard Street, London EC3V 9EX 
Registrars: IRG plc
Bourne House, 34 Beckenham Road, Beckenham, Kent, BR3 4TU
Financial Advisers & Stockbroker: Arbuthnot, 
2 Lambeth Hill, London, EC4V 4GG
Solicitors: Clifford Chance
200 Aldersgate Street, London, EC1A 4JJ
Nabarro Nathanson
Lacon House, Theobald’s Road, London, WC1X 8RW
Financial Public Relations: Financial Dynamics, 
Holborn Gate, 26 Southampton Buildings, London, WC2A 1PB
Shareholder Information
Annual General Meeting 4 March 2004
Announcement of 2003/2004 interim results May 2004
Announcement of 2003/2004 final results November 2004
Information about the Group’s activities is available on the corporate web site at www.synstar.com Financial Contents
21
Synstar plc Annual Report and Accounts 2003
21
Synstar plc Annual Report and Accounts 2003
22 Report of the Directors
25 Report of the Remuneration Committee
32 Environmental Policy Statement
33 Corporate Governance
37 Audit Committee Report
39 Independent Auditors’ Report
40 Consolidated Profit and Loss Account
41 Consolidated Statement of Total Recognised 
Gains and Losses
42 Consolidated Balance Sheet
43 Company Balance Sheet
44 Consolidated Cash Flow Statement
45 Statement of Accounting Policies
47 Notes to the Accounts
68 Five Year Summary Report of the Directors
22
Synstar plc Annual Report and Accounts 2003
The Directors present their Annual Report together with the audited financial statements of the Group and the Company for the year ended
30 September 2003. These will be presented to the shareholders at the Annual General Meeting on 4 March 2004.
Business
The Group is a leading independent provider of IT and business availability services to a broad range of customers in the UK and most Western
European countries. It provides services that are tailored to meet a customer’s IT services requirements and critical needs. By using its many years
of experience and its highly qualiﬁed professional staff, the Group is able to deliver high quality, cost efficient solutions to its customers. As at
30 September 2003, it employed 2,957 staff.
The Chairman’s Statement, Chief Executive’s Review and Finance Director’s Review report on the Group’s performance during the past year and on future
prospects. The list of principal subsidiary undertakings and the countries in which they operate are set out in Note 11 to the ﬁnancial statements.
Dividends
The Directors propose a final dividend for the year of 0.5p per equity share (£812,500) (2002: nil p) being payable on 20 April 2004 to those shareholders
on the register as at 26 March 2004.
Disposals
As reported last year, on 1 March 2002, the Group disposed of its Swiss operations to ITRIS Maintenance AG. Under the terms of the sale, ITRIS
acquired the contracts held by Synstar Computer Services AG, the stocks of maintenance equipment, and re-employed 41 of its staff. The sales and
losses associated with these operations are disclosed as discontinued activities. The loss on disposal of £1.5m was treated as an exceptional item
and is reported in more detail in Note 2 to the ﬁnancial statements.
Directors
The Directors of the Company at the date of this report are shown on pages 18 to 20.
The Executive Directors who served during the year and subsequently are as follows:
Mike Ettling 
Stephen Gleadle
Steve Vaughan 
The Non-Executive Directors who served during the year and subsequently are as follows:
Jo Connell (appointed 9 September 2003)
Jonathan Feuer (resigned 6 March 2003)
John Leighﬁeld (Chairman)
Tony Osbaldiston 
Ric Piper 
The number of meetings of the Board, Nomination, Audit and Remuneration Committees is detailed in the table below, together with the individual
attendance of the Directors (excluding Jonathan Feuer, who resigned during the year):
Nomination Audit Remuneration
PLC Board Committee Committee Committee
No. of meetings 12 1 4 2
Attendance: Executive Directors
Mike Ettling 12
Stephen Gleadle 12
Steve Vaughan 12 1
Attendance: Non-Executive Directors
Jo Connell 1110
John Leighfield 12 1 4 2
Tony Osbaldiston 11 1 4 2
Ric Piper 10 1 4 2 23
Synstar plc Annual Report and Accounts 2003
Jo Connell was appointed to the Board on 9 September 2003 to fill the vacancy following the resignation of Jonathan Feuer. With her wealth of
experience in the UK IT industry it is considered that she will be invaluable in the continuing development of the business. Her appointment will
maintain an appropriate balance of skills and experience within the Board. The terms and conditions of the appointment of Jo Connell are available for
inspection at the Company’s registered office. 
At each Annual General Meeting, any Director who has been appointed by the Board since the previous general meeting shall retire from office. In
addition, one-third of the other Directors who are subject to retirement by rotation shall retire together with any Director who has not been appointed
or re-appointed within the last three years. All retiring Directors will be eligible for re-appointment.
At the forthcoming Annual General Meeting, Jo Connell, John Leighfield and Steve Vaughan retire in accordance with the Articles of Association and
offer themselves for re-election. Details of Directors of the Company, their remuneration and shareholdings are detailed in the Remuneration Report on
pages 25 to 31. The Combined Code on Corporate Governance appended to the Listing Rules of the UK Listing Authority recommends that each year
the Board should consider whether shareholders should be invited to approve the Directors’ remuneration policy at the Annual General Meeting. The
Board has decided that it is appropriate for shareholders to be given such an opportunity at the forthcoming Annual General Meeting.
Substantial shareholdings
As at 1 December 2003, the following shareholders were interested in 3.0% or more of the issued share capital of the Company.
Number of Percentage of 
ordinary issued share
Name shares capital
Aberforth Partners 20,525,295 12.63%
Fidelity International Ltd 15,610,993 9.61%
Framlington Investment Management 10,502,852 6.46%
AEGON Asset Management 6,300,000 3.88%
Chase Nominees Ltd 5,987,167 3.68%
BNY (OCS) Nominees Ltd 5,816,938 3.58%
Insight Investments Ltd 5,856,237 3.60%
Nutraco Nominees Ltd 5,626,252 3.46%
Legal & General Group plc 5,289,316 3.25%
Except as noted above, the Directors are not aware of any person as at 1 December 2003 who was interested in 3.0% or more of the issued share
capital of the Company or could directly or indirectly exercise control over the Company.
Employment policies
As a progressive service organisation, employees at every level are critical to the Company and its future, and management, professional and technical
expertise are the Group’s major assets. Investment in developing and retaining such skills is ongoing and well established, and is supported by
extensive use of in-house and external training programmes.
The Board recognises the value of effective communication and consultation with all employees and informing them of the progress and policies of the
Group. This is achieved through formal and informal meetings, briefing groups and internal newsletters. The UK business has achieved Investor in
People (IIP) recognition.
It is the Group’s policy to encourage the recruitment, training and development of disabled persons on the basis of their aptitude and ability, and the
retention and retraining of employees who become disabled. 
Consistent with the Group’s human resources policies, the Board encourages staff to identify with the ﬁnancial success of the business through the
opportunity to acquire ordinary shares. Staff can participate in the ﬁnancial prosperity of the Group through share ownership. Employee incentive
arrangements include an executive share option scheme, and a Sharesave scheme.
Payments to suppliers
The Group’s operating companies determine terms and conditions of payment for the supply of capital and revenue items by agreement with suppliers.
Payment is then made to these terms, subject to the terms and conditions being met by the suppliers. As at 30 September 2003, trade creditors of the
Group were equivalent to 44 days (2002: 38 days) and in the Company nil (2002: nil). Report of the Directors
continued 24
Synstar plc Annual Report and Accounts 2003
Charitable and political donations
The Group made charitable donations of approximately £2,000 (2002: £7,000) during the year. 
There were no political contributions. The Group has no intention of making any political donations or incurring such expenditure in the future.
However, the Political Parties, Elections and Referendum Act (the PPER Act) came into effect during 2001 and defines ‘EU Political Organisation’
widely. There is some uncertainty over which bodies are covered by the definition and what will be classified as a ‘Donation’. The Board will
therefore seek authority at the forthcoming Annual General Meeting to make political expenditure up to £100,000 in order to prevent inadvertent
breach of the PPER Act.
European monetary union
The Group’s local systems have been appropriately amended for the impact of the introduction of the Euro in the relevant countries.
It is not possible to predict whether the UK will adopt the Euro in the future, at what exchange rate it might be adopted or whether any impact on
Synstar would be significant. The Group neither anticipates changing its reporting currency nor denominating its share capital in Euros, unless the
UK decides to join the European Monetary Union.
Tax status
The close Company provisions of the Income and Corporation Taxes Act 1988 do not apply to the Company.
Annual General Meeting
The Annual General Meeting will be held on 4 March 2004 at 12.00 hours at Synstar House, 1 Bracknell Beeches, Old Bracknell Lane West,
Bracknell, Berkshire RG12 7QX.
Auditors
Following the conversion of Deloitte & Touche to a Limited Liability Partnership (LLP) from 1 August 2003, Deloitte & Touche resigned and the
Directors appointed its successor, Deloitte & Touche LLP , as Auditors. A resolution to reappoint Deloitte & Touche LLP as Auditors to the Group will
be proposed at the forthcoming Annual General Meeting.
Directors’ responsibilities
The Directors are required by UK company law to prepare for each accounting period financial statements, which give a true and fair view of the
state of affairs of the Group and the Company as at the end of the accounting period and of the profit and loss of the Group for that period. In
preparing the financial statements the Directors are required to select and apply consistently suitable accounting policies framed by reference to
reasonable and prudent judgements and estimates. Applicable accounting standards also have to be followed and a statement made to that effect in
the financial statements, subject to any material departure being disclosed and explained in the notes to the financial statements. The Directors are
required to prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Group will continue in business.
The Directors are responsible for ensuring proper accounting records are kept which disclose with reasonable accuracy at any time the financial
position of the Company and the Group and to enable them to ensure that the financial statements comply with the Companies Act 1985. 
They are also responsible for taking reasonable steps to safeguard the assets of the Group and for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the Group’s website. Financial information published on the website is based on
legislation in the United Kingdom governing the preparation and dissemination of financial statements that may differ from legislation in other jurisdictions.
Going concern
The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future
and therefore continue to adopt the going concern basis in preparing the accounts.
By order of the Board Registered Office
Synstar House
S D Gleadle 1 Bracknell Beeches
Secretary Old Bracknell Lane West
Bracknell, Berkshire RG12 7QX Report of the Remuneration Committee
25
Synstar plc Annual Report and Accounts 2003
Introduction
This report has been prepared in accordance with the Report of Remuneration Committee Regulations 2002 (the Regulations), which introduced new
statutory requirements for the disclosure of Directors’ remuneration in respect of accounting periods ending on or after 31 December 2002. The
report also meets the relevant requirements of the Listing Rules of the Financial Services Authority, and describes how the Board has applied the
Principles of Good Governance relating to Directors’ remuneration. 
As required by the Regulations, a resolution to approve the Remuneration Report will be proposed at the Annual General Meeting at which the
financial statements of the Group will be presented for approval.
The Regulations require the external Auditors to report to the Company’s members on the ‘auditable part’ of the Remuneration Report and to state
whether in their opinion that part of the report has been properly prepared in accordance with the Companies Act 1985 (as amended by the
Regulations). The report has therefore been divided into separate sections for unaudited and audited information.
Unaudited information
Remuneration committee
The Remuneration Committee is constituted in accordance with the recommendations of the Combined Code. The members of the Committee are
John Leighfield (the Chairman of Synstar plc), Jo Connell, Tony Osbaldiston and Ric Piper the latter three of whom are all independent Non-Executive
Directors. It is chaired by Tony Osbaldiston. In addition, until his resignation, Jonathan Feuer was also a member of the Committee when it was
considering Directors’ remuneration for 2003.
None of the Remuneration Committee has any personal financial interest (other than as shareholders and Non-Executive Directors), conflicts of
interests arising from cross-directorships or day-to-day involvement in running the business. The Committee makes recommendations to the Board.
No Director plays a part in any discussion about his or her own remuneration.
The Remuneration Committee’s purpose is to review, on behalf of the Board, the remuneration policy for Executive Directors and to determine the
level of remuneration, incentives and other benefits, compensation payments and terms of employment for each Executive Director. It also seeks to
provide a remuneration package that aligns the interests of Executive Directors with those of shareholders. The Committee also reviews the salaries
and benefits for senior staff reporting to the Chief Executive. 
The Committee has appointed Watson Wyatt LLP to provide advice on structuring Directors’ remuneration packages. Clifford Chance LLP has
provided legal advice on the incentive schemes and other employment matters. These Advisers are independent of the Company.
The Chief Executive attends the meetings by invitation and is consulted about the Committee’s proposals, except when his own remuneration is
under consideration.
The Committee meets at least twice a year. For the year ended 30 September 2003 the Committee met twice. 
Remuneration policy
The objectives of the Group’s remuneration policy are to prudently design packages to attract, motivate and retain Directors of the high calibre
needed to maintain the Group’s position as a market leader and to reward them for performance and for enhancing value to shareholders. The
performance measurement of the Executive Directors and key members of senior management and the determination of their annual remuneration
package are undertaken by the Remuneration Committee. 
There are four main elements of the remuneration package for Executive Directors and senior management:
➞ Basic annual salary (including Directors’ fees) and benefits;
➞ Annual bonus payments, which are in line with market standards for the position and responsibilities held and none of which may exceed 
50% of basic salary;
➞ Share option incentives; and
➞ Pension arrangements.
The Group’s policy is that a substantial proportion of the remuneration of the Executive Directors should be performance related. As described later,
Executive Directors may earn annual incentive payments (depending on their position and performance of up to 50% of their basic salary) together
with the benefits of participation in share option schemes. Report of the Remuneration Committee
continued 26
Synstar plc Annual Report and Accounts 2003
Basic salary
An Executive Director’s basic salary is determined by the Remuneration Committee early within each year and when an individual changes position
or responsibility. In deciding appropriate levels, the Committee considers the Group as a whole and relies on objective research, which gives
information on salaries for comparable roles. During the year the basic salaries of two of the Executive Directors were reviewed in November 2002
and were increased by between 9% and 12% with effect from 1 January 2003. At a subsequent review, an increase of 9% was awarded to the
remaining Executive Director from 1 June 2003. A further review has been performed in November 2003 and salaries of the Executive Directors will
not be increased prior to 1 October 2004. Executive Director’s contracts of service, which include details of remuneration, will be available for
inspection at the Annual General Meeting.
In addition to basic salary, the Executive Directors receive certain benefits-in-kind, principally a car (or equivalent allowance) and private 
medical insurance.
Annual bonus payments
Executive Directors and senior management participate in an annual bonus scheme, the terms of which are agreed in advance by the Remuneration
Committee. The Committee establishes the objectives that must be met for each financial year if a cash bonus is to be paid. The performance
bonuses are paid for achieving or exceeding business targets set at the start of the year and are capped for the Executive Directors. The targets
include revenue, profit, cash flow, adjusted earnings per share and other business criteria. The Committee considers the targets to be relevant and
stretching and believes that the results-driven approach is in the best interest of shareholders. All bonuses are non-pensionable.
Account is also taken of the relative success of the different areas of the business for which the Executive Directors are responsible and the extent
to which the strategic objectives set by the Board are being met. The maximum performance related bonus that can be paid is between 40% and
50% of basic annual salary, depending on the position held and performance. Incentive payments to the Executive Directors shown in the following
emoluments table for the year ended 30 September 2003 varied between 17% and 24% of annual salary. 
Share option and incentive schemes
The Remuneration Committee is also responsible for ensuring proper formulation and operation of the Group’s incentive schemes. 
The Company operates an Inland Revenue approved executive share option scheme; a non Inland Revenue approved executive share option scheme, a
UK (savings related) Sharesave scheme that has been approved by the Inland Revenue and an international Sharesave scheme for non-UK employees.
Executive share option scheme
Under the rules of the Synstar 1999 executive share option scheme, which was adopted by the Board on the 10 February 1999 and approved by the
Inland Revenue on the 5 March 1999, the Board may grant options to selected members of staff who satisfy particular conditions which the Board
may establish. Conditions include seniority, performance and length of service.
All options are granted at market value and are exercisable only after they have been held for three years and are subject to a range of
performance criteria. No option may be granted to an individual under the approved scheme if, immediately following such grant, the aggregate
option price of all shares over which he/she currently holds options under any Inland Revenue approved scheme (except for savings related share
option schemes) exceeds the statutory limit, which is currently £30,000.
Under the rules of the unapproved share option scheme no option may be granted to an individual if, immediately following such a grant, the
aggregate amount of the option price of all shares over which he/she holds options granted under all Company share plans (except savings related
share option schemes) exceeds four times his annual remuneration.
Options granted prior to 2001 are subject to performance criteria. Exercise of these options is dependent on the Group’s Earnings Per Share
increasing on an annual basis over any three-year period between the grant and exercise of an option by 13% above the rate of UK inflation, 
as measured by the Retail Price Index. This was considered to be an appropriate measure at the time of grant. 27
Synstar plc Annual Report and Accounts 2003
Executive share option scheme continued
Exceptionally, three individual grants of share options amounting in total to options over 2,060,000 shares were made during 2001 and 2002
without performance criteria. These options may only be exercised in accordance with the following timescales, namely 60% after three years,
20% after four years and 20% after five years.
Long Term Incentive Plan
During the year ended 30 September 2003, the Company established a Long Term Incentive Plan (‘LTIP’). The aim of the new scheme was to align 
the interests of the Group’s key staff with its shareholders, and to enable them to benefit from increasing the Group’s share price. The Remuneration
Committee has responsibility for supervising the plan, the grant of bonus awards, which deliver benefits in cash, and the performance criteria
applicable to the bonus awards for that period. 
The Committee believes that a key priority for the forthcoming three-year period is to deliver an attractive return to our shareholders. The performance
criterion that must be met measures the return to our shareholders against the return on the shares of several of our key competitors (FT software and
services index) using a recognised measure called Total Shareholder Return. A key component to this is increasing the Group’s share price, both
absolutely and relative to the FT software and services index. 
No Director of the Company can participate before the adoption of the ‘LTIP’ by shareholders, in accordance with the Company’s Articles of
Association, in general meeting. Approval to enable the future participation of the Directors in the Plan will be sought at the Annual General
Meeting to be held on 4 March 2004. Full details of LTIP are included in the Notice of Annual General Meeting.
UK Sharesave scheme
The Synstar 1999 Sharesave scheme was adopted by the Board on the 10 February 1999 and approved by the Inland Revenue on 5 March 1999.
The offer made in February 2001 (the latest offer under this scheme) was made at an option price of 50.4 pence, this being the average middle
market quotation of ordinary shares over the five days preceding the invitation date. The option price was not discounted. The Board authorised the
allocation of 800,000 shares for this purpose. No performance criteria are attached to these options.
International Sharesave scheme
The Synstar 1999 International Sharesave scheme was adopted by the Board on the 10 February 1999. The offer made in February 2001 (the 
latest offer under this scheme) was made at an option price of 50.4 pence, this being the average middle market quotation of ordinary shares over
the five days preceding the invitation date. The option price was not discounted. The Board authorised the allocation of 400,000 shares for this
purpose. No performance criteria are attached to these options.
The Company does not operate any long term incentive schemes other than the ‘LTIP’ and share option schemes described above. No significant
amendments are proposed to be made to the terms and conditions of any entitlement of a Director to share options.
The options outstanding as at 30 September 2003 are detailed in Note 17 to the Accounts. 
Pension arrangements
Two Executive Directors are members of the Company money purchase pension scheme. Their dependants are eligible for dependants’ pensions
and the payment of a lump sum in the event of death in service. 
Steve Vaughan does not participate in the Company pension scheme and the Company has agreed instead to make a contribution equivalent to
25% of his basic salary into his private pension scheme. 
To the extent that a Director’s benefits from the Company scheme are restricted by Inland Revenue limits, payments are made to a funded
unapproved retirement benefit scheme. There are no unfunded pension promises or similar arrangements for Directors. Report of the Remuneration Committee
continued 28
Synstar plc Annual Report and Accounts 2003
Performance graph 
In accordance with the Directors Remuneration Report Regulations 2002 the following performance graph compares the Group’s Total Shareholder
Return (TSR) since Listing on the London Stock Exchange on 5 March 1999 compared with the performance of the FT software and services index
also measured by Total Shareholder Return (TSR). The Remuneration Committee consider this is the most appropriate index against which to
measure performance; in addition it is the index for the measurement of payments under the Long Term Incentive Plan.
5 Year return index for FT Software and Services Index:
TSR is defined as the return shareholders would receive if they held a notional number of shares and received dividends on those shares over a
period of time. Assuming that the dividends are re-invested into the Group’s shares, it measures the percentage growth in the Group’s share price
together with the value of any dividends paid.
Executive Directors’ contracts
The Executive Directors have service contracts that can be terminated as detailed in the following table. The service contracts do not contain any
onerous termination or compensation terms. Each service contract will terminate when the Director reaches the age of 60.
Steve Vaughan who is proposed for re-election at the next Annual General Meeting has a service contract that provides for a notice period of one
year on the part of the Company and six months on the part of the Director. 
0
50
100
150
200
250
300
350
30/09/98 30/03/99 30/09/99 30/03/01 30/09/01 30/03/02 30/09/02 30/03/03 30/09/03
Synstar Plc
FT Software and Services Index
30/09/00 30/03/00 29
Synstar plc Annual Report and Accounts 2003
Executive Directors’ contracts continued
The details of the Executive Directors’ contracts are summarised in the table below:
Unexpired
Notice Notice term at
Date of period: period: 30 September 
contract Company Director 2003
Mike Ettling 5 June 2002 12 months 6 months 20 years 11 months
Stephen Gleadle 3 November 1999 12 months 12 months 15 years 5 months
Steve Vaughan 1 January 2001 12 months 6 months 16 years 11 months
In the event of early termination, the Directors’ contracts provide for compensation up to a maximum of basic salary and other benefits for the notice
period. With effect from 2003, the Committee will include a provision in new service contracts to allow for severance payments to be phased where
appropriate to do so. It will also consider mitigation to reduce compensation to a departing Director.
Policy on external appointments
The Company acknowledges that its Executive Directors may be invited to become Non-Executive Directors of other companies. The Committee
believes that these non-executive duties can broaden the Executive Directors’ knowledge and experience to the benefit of the Company. Executive
Directors are, therefore, with the Board’s permission, allowed to accept these appointments as long as there is no conflict of interest and to retain
any fees.
Non-Executive Directors
The Non-Executive Directors of the Group have letters of appointment stating their annual fee. The remuneration of the Non-Executive Directors is
determined by the Board within the limits set out in the Articles of Association and on the basis of independent advice and the level of fees paid to 
Non-Executive Directors of comparator companies. The annual fees are specific to each Director reflecting their individual commitments to the Board and
various Board committees. The basic annual fee paid to each Non-Executive Director in the year was £25,000. The Chairman’s annual fee was £49,000. 
Non-Executive Directors are not eligible for pensions, share incentives, annual bonus or any similar payments other than out-of-pocket expenses in
connection with the performance of their duties. Each Non-Executive Director withdraws from the Remuneration Committee in respect of matters
relating to their own position.
John Leighfield and Jo Connell, who are proposed for re-election, being Non-Executive Directors, do not have a service contract. 
Audited information
Aggregate Directors’ remuneration
The total amounts for Directors’ remuneration were as follows:
2003 2002
£’000 £’000
Emoluments 927 901
Money purchase pension contributions 126 106
1,053 1,007 Report of the Remuneration Committee
continued 30
Synstar plc Annual Report and Accounts 2003
Emoluments 
The aggregate emoluments in respect of their roles as Directors of the Company who served during the year were as follows:
Name of Director Salary/fees Other benefits Annual bonuses 2003 total 2002 total
£’000 £’000 £’000 £’000 £’000
Executive Directors
Alan Coles (to 7 March 2002) – – – – 135
Mike Ettling (from 5 June 2002) 182 2 43 227 68
Stephen Gleadle 190 4 33 227 218
Steve Vaughan 289 4 70 363 371
Total Executive Directors 661 10 146 817 792
Non-Executive Directors
Jo Connell (from 9 September 2003) 2 – – 2 –
Jonathan Feuer (to 6 March 2003) 9 – – 9 20
John Leighfield 49 – – 49 45
Tony Osbaldiston 25 – – 25 22
Ric Piper 25 – – 25 22
Total Non-Executive Directors 110 – – 110 109
Aggregate emoluments 771 10 146 927 901
Other Benefits include such items as company cars, fuel and medical insurance.
In addition to the above, Stephen Gleadle received, on 28 February 2002, 25,000 shares in Synstar Plc. The market value of the shares at this date
was £0.62.
Directors’ pension entitlements
No Directors are members of a Synstar Company defined benefit pension scheme. 
As detailed above, two Executive Directors are members of the Synstar money purchase scheme. In addition, the Company makes a contribution to
the private pension scheme of S W Vaughan. Contributions paid by the Group in respect of such Directors were as follows:
Name of Director 2003 2002
£’000 £’000
Alan Coles (to 7 March 2002) – 16
Mike Ettling (from 5 June 2002) 36 6
Stephen Gleadle 18 17
Steve Vaughan 72 67
126 106 31
Synstar plc Annual Report and Accounts 2003
Directors’ share options
Aggregate emoluments disclosed previously do not include any amounts for the value of options to acquire ordinary shares in the Company granted
to or held by the Directors. No options were exercised during the year.
Details of options for Directors who served during the year are as follows:
Date from
Name of Director 1 October 30 September Exercise which
2002 Granted Exercised 2003 price exercisable Expiry date
Subject to performance criteria
Stephen Gleadle 100,000 – – 100,000 £2.275 07/01/2003 06/01/2010
Stephen Gleadle 100,000 – – 100,000 £0.735 18/07/2003 17/07/2010
Subtotal 200,000 – – 200,000
Not subject to performance criteria
Mike Ettling 500,000 – – 500,000 £0.510 04/07/2005 03/07/2012
Stephen Gleadle 200,000 – – 200,000 £0.490 16/09/2005 15/09/2012
Steve Vaughan 1,360,000 – – 1,360,000 £0.485 03/01/2004 02/01/2011
Subtotal 2,060,000 – – 2,060,000
Total 2,260,000 – – 2,260,000
There have been no variations to the terms and conditions or performance criteria for share options during the financial year.
Options granted prior to 2001 are subject to performance criteria, as detailed on page 26. Exceptionally, three individual grants of share options
amounting in total to options over 2,060,000 shares were made during 2001 and 2002 without performance criteria. These options are subject to the
3-10 year timing rules and, specifically, may only be exercised in accordance with the following timescales, namely 60% after three years, 20% after
four years and 20% after five years.
The market price of the ordinary shares at 30 September 2003 was £0.675 and the range during the year was £0.48 to £0.815. 
Directors’ interests 
As at 30 September 2003, the Directors had interests in the share capital of the Company as follows:
Name of Director 2003 2002
No. No.
Stephen Gleadle 85,000 85,000
John Leighfield 375,000 375,000
Tony Osbaldiston 7,000 7,000
Steve Vaughan 49,180 –
516,180 467,000
There have been no movements in Directors’ interests since the year-end.
On behalf of the Board
J A Osbaldiston
Chairman of the Remuneration Committee Environmental Policy Statement
32
Synstar plc Annual Report and Accounts 2003
Synstar plc continues to recognise its environmental responsibilities and the implications of its business activities upon the environment. Environmental
issues are always given a high business priority.
The Group demonstrates its ongoing commitment to this policy in the procedure for disposal of redundant IT hardware. This is in accordance with
current legislation and also achieves the following:
➞ Protection from data security breaches;
➞ Processing in an environmentally-friendly fashion; and,
➞ Re-distribution of equipment to charitable organisations, where appropriate.
As a further example, the Group uses a procedure, which tests used hard-disk drives, and re-uses them within the business whenever appropriate.
This policy statement is approved by the Board and is facilitated by an environmental steering group. The steering group works with environmental
specialists to establish standards, set objectives and ensure effective implementation of this policy.
Environmental policies are kept under regular review and are communicated to employees and other interested parties on a frequent basis.
The guiding principles of the policy are:
➞ Monitor the Group’s environmental performance and set targets for improvement and prevention of pollution;
➞ Contract-in specialist organisations, where necessary;
➞ Be committed to comply with legal requirements relating to the Group’s activities;
➞ Assess in advance the environmental impact of any significant new legislation or process;
➞ Promote the Group’s services to increase levels of waste recycling;
➞ Provide interested parties with the Group’s Environmental Policy upon request;
➞ Provide adequate level of environmental awareness training for staff;
➞ Monitor and control hazardous materials used or generated by our activities;
➞ Monitor and improve the efficiency of consumption of resources; and,
➞ Monitor our performance against the objectives and targets set and review these on a continual basis.
In accordance with the recent WEEE (Waste, Electronic & Electric Equipment) directive, Synstar engages a specialist organisation to process our
redundant IT assets and accessories in a manner that maximises re-use (through resale) and recycling and minimises landfill via an ISO 14001 process. Corporate Governance
33
Synstar plc Annual Report and Accounts 2003
Synstar plc is committed to high standards of Corporate Governance. The Board is accountable to the shareholders for good corporate governance,
and this statement sets out how the principles of governance are applied to the Group’s activities.
Statement of compliance with the Code of Best Practice
Throughout the year the Company has been in compliance with the provisions set out in the present Combined Code appended to the Listing Rules 
of the London Stock Exchange. 
Revisions to the Combined Code
The revised Combined Code applies to reporting years beginning on or after 1 November 2003. The Board has reviewed the extent to which it
complies already, and is taking the small number of steps necessary to ensure full compliance over the coming months. 
Statement about applying the principles of Good Governance
The Company has applied the principles of Good Governance as set out in section 1 of the Combined Code by complying with the Code of Best
Practice as reported above. A more comprehensive explanation of how the principles have been applied is set out below. 
Further information can be found in the Reports of the Remuneration Committee and the Audit Committee on pages 25 to 31 and 37 to 38.
Board and committee structure
The Board of Synstar plc is the body responsible for Corporate Governance, for establishing policies and objectives and for the stewardship of the
Group’s resources. All Directors are equally accountable under the law for the proper stewardship of the Company’s affairs and the Board of
Directors take all of the actions they deem necessary to meet the Company’s objectives. 
It is the Board’s policy that the roles of Chairman and Chief Executive are separate. 
Currently there are three Executive Directors and four Non-Executive Directors. Their profiles are given on page 19.
It is the opinion of the Board that the Non-Executive Directors are independent of management and have no business or other relationship that could
interfere materially with the exercise of their judgment. Ric Piper is the senior independent Non-Executive Director for the requirements of provision
A.2.1 of the Combined Code.
All Directors have access to the advice and services of the Company Secretary, who is responsible for ensuring that Board procedures and applicable
rules and regulations are observed. There is an agreed procedure for Directors to obtain independent professional advice. Board members receive
appropriate guidance to strengthen their understanding of the business and their legal obligations.
In accordance with the Group’s Articles of Association, one third of the Board is required to retire by rotation each year. In addition, all those appointed
during the year will stand for re-election at the next general meeting, ensuring that each Board member faces re-election at regular intervals.
The Board meets each month to review results to date, and to expedite the Group’s business. It met 12 times during the year. It has a formal
schedule of matters for its regular consideration, including:
➞ Approval of the annual budget;
➞ Resolution of significant variations from budget;
➞ Examination of strategies in the long term interests of shareholders; and,
➞ Ensuring that strategies also take proper account of the interests of employees, customers & suppliers. 
The Board delegates certain other responsibilities to a series of Committees, each of which has formal written Terms of Reference, which are
reviewed by the Board at regular intervals. Details of the number of meetings of each of the Committees, their composition, and the attendance 
of each of the individual members of these Committees are set out in the Directors’ Report. Corporate Governance
continued 34
Synstar plc Annual Report and Accounts 2003
Group organisation
The Board itself focuses mainly on strategic issues, whereas the Group Operating Board concentrates on the formulation of strategic proposals to
the Board, and operational decision-making. 
Group operations board
The Operations Board is responsible for the management of the business. Meeting monthly, it is chaired by the Chief Executive, and comprises the
Finance Director, the four Managing Directors, and the Heads of the four ‘Centres of Excellence’. 
Nominations Committee
The Nominations Committee comprises the Chairman, the Chief Executive and the Non-Executive Directors. It meets at least once each year.
The main areas of responsibility delegated to the Nominations Committee by the Board are as follows:
➞ Nomination for Board approval of candidates for Board appointment;
➞ Evaluation of the balance of skills, knowledge and experience on the Board;
➞ Preparation of a description of the role and capabilities required for a particular appointment; and,
➞ For the appointment of Chairman, preparation of a job specification, including an assessment of the time commitment expected.
Detailed Terms of Reference are available on request to the Company Secretary.
The terms & conditions of appointment of the Non-Executive Directors are also available for inspection on request.
Professional development and performance evaluation
Executive Directors are subject to the Company-wide performance review process. The Board has in place a formal process for evaluation of the 
Non-Executive Directors, and for the Board as a whole.
Internal control
The Combined Code requires that the Board reviews the effectiveness of the Group’s system of internal controls, including operational, compliance
and risk management, as well as financial. Such controls are designed to meet the Group’s particular needs and aim to safeguard the Group’s assets
and ensure proper accounting records are maintained and that the financial information used within the business and for publication is reliable. 
Any system of internal control can only provide reasonable, but not absolute, assurance against material misstatement and loss.
The Directors confirm their responsibility for review of the system of internal control, and that they have reviewed its effectiveness during the year.
The Board has modified existing risk management and internal control processes necessary to comply fully with the ‘Turnbull guidance’.
The processes to identify and manage the key risks to the success of the Group are an integral part of the internal control environment. These
processes, which are reviewed and improved as necessary, include strategic planning, the appointment of senior managers, the regular monitoring
of performance, control over capital expenditure and investments, reviews of ‘top customers’, major prospects, and the provision of accurate and
timely management information. 
The risk management process has been embedded in the Group’s operational framework, and generates a series of ’risk registers’, which are
reviewed by management, the Audit Committee and the Board on a regular basis.
This ongoing process for evaluating significant risks was in place throughout the year, and to the date of the annual report. 35
Synstar plc Annual Report and Accounts 2003
Internal control continued
The key features of the Group’s internal control systems are as follows:
Group culture and corporate social responsibility
The Board emphasises a culture of integrity, competence, fairness and responsibility. 
Synstar plc is particularly proud to be listed on the FTSE4Good Index, in respect of ’ethical investments’. This has been achieved through a policy of
corporate social responsibility across the UK and overseas, taking into account such considerations as fairness and responsibility towards the
welfare & safety of:
➞ Our employees;
➞ Our suppliers and their employees; and,
➞ The communities and environments in which we conduct our business. 
Delegation of Authority
The Board approves the terms of any authorisations given to Directors and senior managers of the Company, which cover new business, purchase
order and invoice values, conditions of employment, staff recruitment, banking transactions, Company secretarial issues, and development of the
business as a whole.
Financial reporting
There is a comprehensive financial planning system, including an annual budget for individual businesses and the Group approved by the Board. The
financial performance of individual businesses is reported regularly and compared to annual budgets. Forecasts for the Group are prepared and reviewed
by the Board regularly. The Group reports to shareholders on a half-yearly basis. 
Going concern
The Directors have reviewed the Group’s budgets, forecasts and plans, and have a reasonable expectation that the Company and the Group have
adequate resources to continue in operational existence for the foreseeable future. As a consequence, the Company continues to adopt the going
concern basis in preparing the financial statements. 
Controls over contract bids
In order to meet its growth targets it is essential that the Group continue to renew existing contracts and win new contracts. Procedures seek to
ensure that risks are identified through the lifecycle from bidding to completion. Regular review procedures are in place to ensure that major
opportunities and issues are reported to the Board appropriately. Commercial procedures have been strengthened during the year for all significant
bid opportunities and where significant investment decisions have to be taken.
Operating procedures
All managers are provided with copies of the various policies and procedures manuals, covering operating procedures, security, health and safety,
and personnel procedures. Furthermore, these documents are also available on the Synstar ’intranet’. Compliance with these policies and procedures
is monitored on a regular basis. 
Control over treasury
The Group employs a treasury and tax manager, to make optimal use of the funds and borrowing opportunities at the Group’s disposal. The Group
does not have any complex derivatives or foreign exchange contracts. The Group’s policy has been to partially hedge currency exposures arising from
investment overseas, by borrowing in the currency of the overseas country, as and when required, in order to manage the risk of fluctuating rates of
exchange. Furthermore, the Group also operates a ‘Euro cash pool’ in order to optimise the management of non-Sterling cash. Corporate Governance
continued 36
Synstar plc Annual Report and Accounts 2003
Internal audit
The Head of Risk Management visits each business unit in accordance with a modular ’rolling plan’ of internal audit work. Following each review, a
draft report is prepared, setting out the results of the work. The comments of the relevant management team are then incorporated, and the report is
then published in final form. There is a formal review to confirm that agreed actions have been implemented.
There is also a provision giving the Head of Risk Management unrestricted access to the Audit Committee. 
In addition, the Head of Risk Management facilitates and reviews the risk management process, and administers the Group insurance programme. 
Relations with shareholders
The Board gives a high priority to communications with shareholders. There are regular meetings with individual institutional shareholders as well as
general presentations after the interim and preliminary results. Copies of the interim and final accounts are sent to every shareholder, and Company
information is published regularly via its website (www.synstar.com). There is also an opportunity for individual shareholders to meet and to question
the Board, including the Non-Executive Directors, at the Annual General Meeting, and the Company responds to numerous enquiries from individual
shareholders and interest groups throughout the year.
Approved by the Board of Directors and signed on its behalf
Stephen Gleadle
Company Secretary
1 December 2003 Audit Committee Report
37
Synstar plc Annual Report and Accounts 2003
Membership and meetings
The Audit Committee currently comprises all the Non-Executive Directors. It is chaired by Ric Piper. Jonathan Feuer was a member until his resignation.
The Committee currently has two members possessing recent and relevant financial experience. The Chairman, Ric Piper, is a Chartered Accountant,
a member of the Urgent Issues Task Force of the Accounting Standards Board and was Group Finance Director of W S Atkins plc from 1993 to 2002.
Tony Osbaldiston is a Chartered Accountant and was Group Finance Director of First Group plc from 1994 to 1999. The other members of the Audit
Committee bring it a wide range of business experience.
There is a provision for Non-Executive Directors to meet with the external and internal Auditors without the executives present.
The Audit Committee met four times during the year. 
Responsibilities
The Audit Committee is responsible for:
➞ Selecting and appointing the external Auditors, approving their terms of reference and fees, and determining with the external Auditors the nature
and scope of the audit work;
➞ Reviewing each year the performance, independence and objectivity of the external Auditors and ensuring appropriate rotation of audit partner.
The Committee makes appropriate enquiries of management and internal audit;
➞ Monitoring and reviewing the resources and effectiveness of internal audit (including approving the appointment or removal of the Head of Internal
Audit) and agreeing the internal audit programme for the forthcoming year;
➞ Reviewing the procedures for handling allegations from ’whistle blowers’. Procedures are set out on the Synstar intranet for staff to raise such
concerns, in confidence, with Head of Risk Management and subsequently the Chairman of the Audit Committee. Similar concerns from external
parties should be raised in a similar way, via the Synstar Registered Office;
➞ Reviewing management’s and internal audit’s reports on the effectiveness of systems of internal control, financial reporting and risk. This includes
considering all internal audit reports, management’s response to any recommendations, and monitoring the progress of any required actions. The
Head of Risk Management presents a quarterly report to the Audit Committee, summarising work completed within the period and the findings,
together with the areas of focus in the forthcoming period; and,
➞ Reviewing, prior to formal submission to the Board, the Group’s interim and annual financial statements, in particular: any significant issues arising
from the external audit; the accounting policies; any issues requiring a significant element of judgement; the clarity of disclosures; compliance with
applicable accounting and legal standards; and the statements on internal control systems and business risk assessments.
The detailed ’Terms of Reference’ of the Audit Committee are available on application to the Company Secretary.
Independence and objectivity of the External Auditors
The Audit Committee reviews the independence and objectivity of the external Auditors, including: 
➞ Seeking confirmation that the external Auditors are, in their professional judgement, independent of the Group;
➞ Obtaining from the external Auditors an account of all relationships between the Auditors and the Group;
➞ Monitoring the number of former employees of the external Auditors currently employed in senior positions in the Group and assessing whether
these appointments impair, or appear to impair, the Auditors’ judgement or independence;
➞ Considering whether, taken as whole, the various relationships between the Group and the external Auditors impair, or appear to impair, the
Auditors’ judgement or independence;
➞ Considering whether the compensation of individuals employed by the external Auditors who are performing the audit is tied to the provision of
non audit services and if so, consider whether this impairs, or appears to impair, the external Auditors’ judgement or independence; and,
➞ Reviewing the economic importance of the Group to the external Auditors and assessing whether that importance impairs, or appears to impair, the
external Auditors’ judgement or independence.
The external Auditors continue to operate procedures to safeguard against the possibility that the Auditors’ objectivity and independence could be
compromised. This includes the use of independent concurring partners, use of a technical review board (where appropriate) and annual independence
confirmations by all staff. The external Auditors report to the Audit Committee on matters including independence and non audit fees on an annual
basis. In addition, the role of the audit partner is rotated on a periodic basis. Audit Committee Report
continued 38
Synstar plc Annual Report and Accounts 2003
Provision of Services by the External Auditors
The Board has instituted the following policies in relation to the performance by the external Auditors of services for the Group:
Audit-related services (including reporting on regulatory accounts, covenant and other borrowing related matters and Stock Exchange circulars):
➞ Subject to conflict of interest or other pertinent issues impacting delivery of the services, the external Auditors are used to perform such
work on behalf of the Group; and,
➞ The Audit Committee has recently specifically addressed the longevity of appointment of the Auditors but has decided not to take any action
for the time being.
Tax compliance and tax advisory services:
➞ Given their knowledge of the Group, subject to conflict of interest of other pertinent issues impacting delivery of the services, the external
Auditors are used to undertake tax compliance and general advisory services. Specific projects are assessed on a case by case basis,
depending on who is best suited to perform the work.
Internal audit services:
➞ The Group has its own internally resourced internal audit resource with a direct and independent reporting line to the Audit Committee. It is
the intention that no such services should be provided by the external Auditors, except on rare occasions in relation to standalone projects
where specialist skills are required and then only with the express, prior authorisation of the Audit Committee Chairman.
Transaction related services:
➞ Historically the external Auditors have generally been used for such work. Given their knowledge of the Group, it has been decided to
continue with this for individual transactions with fees payable of up to £100,000. Above this level there will be a competitive process; and,
➞ This policy will be reviewed during 2005.
Other advisory services (excludes services in the above four categories):
➞ Each project is assessed on a case by case basis, depending on who is best suited to perform the work. Any material project (fees in excess
of £50,000) for ’other advisory services’ where the external Auditors were being considered for the provision of the service would be the
subject of a competitive process. Further, the Audit Committee Chairman must approve any projects for ’other advisory services’ where the
fees payable to the external Auditors exceed £25,000.
The level of non audit-related services provided by the external Auditors and the associated fees is considered annually by the Audit Committee in the
context of the external Auditors’ independence as part of the Audit Committee’s review of the adequacy and objectivity of the external audit process.
On behalf of the Board
R J Piper
Chairman of the Audit Committee Independent Auditors’ Report to the Members of Synstar Plc
39
Synstar plc Annual Report and Accounts 2003
We have audited the financial statements of Synstar plc for the year ended 30 September 2003, which comprise the Profit and Loss Account, the
Balance Sheets, the Cash Flow Statement, the Statement of Total Recognised Gains and Losses, the Statement of Accounting Policies and the
related Notes 1 to 26. These financial statements have been prepared under the accounting policies set out therein. We have also audited the
information in the part of the Report of Remuneration Committee that is described as having been audited.
This report is made solely to the Company’s members, as a body, in accordance with section 235 of the Companies Act 1985. Our audit work has
been undertaken so that we might state to the Company’s members those matters we are required to state to them in an Auditors’ Report and for 
no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the
Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and Auditors
As described in the statement of Directors’ responsibilities, the Company’s Directors are responsible for the preparation of the financial statements
in accordance with applicable United Kingdom law and accounting standards. They are also responsible for the preparation of the other information
contained in the Annual Report including the Report of Remuneration Committee. Our responsibility is to audit the financial statements and the part
of the Report of Remuneration Committee described as having been audited in accordance with relevant United Kingdom legal and regulatory
requirements and auditing standards.
We report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements and the part
of the Report of Remuneration Committee described as having been audited have been properly prepared in accordance with the Companies Act
1985. We also report to you if, in our opinion, the Directors’ report is not consistent with the financial statements, if the Company has not kept
proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law
regarding Directors’ remuneration and transactions with the Company and other members of the Group is not disclosed.
We review whether the Corporate Governance Statement reflects the Company’s compliance with the seven provisions of the Combined Code
specified for our review by the Listing Rules of the Financial Services Authority, and we report if it does not. We are not required to consider
whether the Board’s statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the Group’s corporate
governance procedures or its risk and control procedures. We read the Directors’ report and the other information contained in the Annual Report for
the above year as described in the contents section including the unaudited part of the Report of Remuneration Committee and consider the
implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements.
Basis of audit opinion
We conducted our audit in accordance with United Kingdom auditing standards issued by the Auditing Practices Board. An audit includes examination,
on a test basis, of evidence relevant to the amounts and disclosures in the financial statements and the part of the Report of Remuneration Committee
described as having been audited. It also includes an assessment of the significant estimates and judgements made by the Directors in the
preparation of the financial statements and of whether the accounting policies are appropriate to the circumstances of the Company and the Group,
consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the financial statements and the part of the Report of Remuneration Committee described as
having been audited are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion, we also
evaluated the overall adequacy of the presentation of information in the financial statements and the part of the Report of Remuneration Committee
described as having been audited.
Opinion
In our opinion: 
➞ The financial statements give a true and fair view of the state of affairs of the Company and the Group as at 30 September 2003 and of the profit of
the Group for the year then ended; and
➞ The financial statements and part of the Report of Remuneration Committee described as having been audited have been properly prepared in
accordance with the Companies Act 1985.
Deloitte & Touche LLP 1 December 2003
Chartered Accountants and Registered Auditors
Birmingham Consolidated Profit and Loss Account
for the year ended 30 September 2003 40
Synstar plc Annual Report and Accounts 2003
2003 2002
Notes £’000 £’000
Turnover
Continuing operations 222,978 220,150 
Discontinued operations – 1,720 
Total turnover 1 222,978 221,870 
Cost of sales (163,432) (163,558)
Gross profit 59,546 58,312 
Selling and marketing costs (12,237) (12,188)
Administration expenses (38,793) (38,116)
Operating profit 1
Continuing operations 8,516 8,148 
Discontinued operations – (140)
Total operating profit 8,516 8,008 
Loss on disposal of discontinued operations 2 – (1,493)
Profit on ordinary activities before interest and taxation 8,516 6,515 
Interest receivable and similar income 5 343 235 
Interest payable and similar charges 6 (143) (218)
Profit on ordinary activities before taxation 3 8,716 6,532 
Tax on profit on ordinary activities 7 (2,818) (2,563)
Profit on ordinary activities after taxation and for the year 5,898 3,969 
Dividends 8 (813) – 
Retained profit for the year 18 5,085 3,969 
Earnings per share 9
Basic 3.6p 2.4p
Diluted 3.6p 2.4p
Adjusted basic (before exceptional items) 3.6p 3.4p
The accompanying notes and statement of accounting policies are an integral part of this consolidated profit and loss account.
Synstar plc Annual Report and Accounts 2003 Consolidated Statement of Total Recognised Gains and Losses
for the year ended 30 September 2003 41
Synstar plc Annual Report and Accounts 2003 Synstar plc Annual Report and Accounts 2003
2003 2002
£’000 £’000
Profit for the financial year 5,898 3,969 
Currency translation differences on foreign
currency net investments 1,416 (81)
Total recognised profits relating to the year and since the
last annual report and accounts 7,314 3,888 
The accompanying notes and statement of accounting policies are an integral part of this consolidated statement of total recognised 
gains and losses. Consolidated Balance Sheet
30 September 2003 42
Synstar plc Annual Report and Accounts 2003
2003 2002
Notes £’000 £’000
Fixed assets
Tangible assets 10 33,167 33,646 
33,167 33,646 
Current assets
Stocks 12 2,440 1,950 
Debtors – amounts falling due within one year 13 49,777 51,432 
Debtors – amounts falling due after one year 13 2,658 1,973 
Cash at bank and in hand 26,922 17,431 
81,797 72,786 
Creditors: amounts falling due within one year 14 (69,317) (67,745)
Net current assets 12,480 5,041 
Total assets less current liabilities 45,647 38,687 
Creditors: amounts falling due after more than one year 15 (459) – 
Net assets 45,188 38,687 
Capital and reserves
Called-up share capital 17 1,625 1,625 
Profit and loss account 18 43,563 37,062 
Total shareholders’ funds – all equity 19 45,188 38,687 
The accounts were approved by the Board of Directors on 1 December 2003 and signed on its behalf by:
S W Vaughan Chief Executive
S D Gleadle Group Finance Director
The accompanying notes and statement of accounting policies are an integral part of this consolidated balance sheet. Company Balance Sheet
30 September 2003 43
Synstar plc Annual Report and Accounts 2003
2003 2002
Notes £’000 £’000
Fixed assets
Investments 11 – – 
Current assets
Debtors 13 32,770 32,770 
Creditors: amounts falling due within one year 14 (813) – 
Net assets 31,957 32,770 
Capital and reserves
Called-up share capital 17 1,625 1,625 
Profit and loss account 18 30,332 31,145 
Total shareholders’ funds – all equity 31,957 32,770 
The accounts were approved by the Board of Directors on 1 December 2003 and signed on its behalf by:
S W Vaughan Chief Executive
S D Gleadle Group Finance Director
The accompanying notes and statement of accounting policies are an integral part of this Company balance sheet. Consolidated Cash Flow Statement
for the year ended 30 September 2003 44
Synstar plc Annual Report and Accounts 2003
2003 2002
Notes £’000 £’000
Net cash inflow from operating activities 20 24,959 21,441 
Returns on investments and servicing of finance 21 200 17 
Taxation 21 (1,637) (977)
Capital expenditure 21 (13,711) (11,511)
Disposals 21 – (546)
Net cash inflow before financing 9,811 8,424 
Financing 21 (814) (954)
Increase in cash in the year 23 8,997 7,470 
The accompanying notes are an integral part of this consolidated cash flow statement. Statement of Accounting Policies
for the year ended 30 September 2003 45
Synstar plc Annual Report and Accounts 2003
The principal accounting policies, all of which have been applied consistently throughout the year and the preceding year are set out below.
In accordance with the requirements of FRS18, regular reviews have been performed of all accounting policies to ensure that they remain
appropriate for the purposes of giving a true and fair view.
a) Basis of preparation
The accounts have been prepared under the historical cost convention and in accordance with applicable United Kingdom accounting standards.
b) Basis of consolidation
The Group accounts consolidate the accounts of Synstar plc, and its subsidiary undertakings drawn up to 30 September 2003.
As provided by Section 230 of the Companies Act 1985, no profit and loss account is presented in respect of the Company. The profit in the year
dealt within the accounts of the Company was £nil (2002: loss £70,000,000). The loss in the prior year related to the write off of irrecoverable
intercompany balances.
c) Turnover and revenue recognition
Turnover represents the value of goods supplied and services provided to third parties during the year, net of discounts and exclusive of value added
tax. Revenue from contracts for Maintenance, Business Support and Managed Services is recognised on a pro-rata basis over the contract period. Any
revenue covering future periods is deferred and credited to the profit and loss account over the period to which it relates. Revenue from product sales
is recognised on delivery. Revenue from projects, consultancy, installation and other services is recognised when the service has been provided.
d) Pension costs
For defined contribution schemes the amount charged to the profit and loss account in respect of pension costs is the contributions payable in the
year. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the
balance sheet.
For defined benefit schemes the amount charged to the profit and loss account in respect of pension costs is the estimated regular cost of providing
the benefits accrued in the year, adjusted to reflect variations from that cost. Differences between amounts charged to the profit and loss account
and amounts funded are shown as either accruals or prepayments in the balance sheet.
e) Leases
Assets held under finance leases are capitalised as tangible fixed assets and are depreciated over the shorter of the lease term and their useful
lives. The capital elements of future lease obligations are recorded as liabilities, while the interest elements are charged to the profit and loss
account over the period of the lease to produce a constant rate of charge on the balance of capital prepayments outstanding.
The capital elements of future amounts due on finance leases are recorded as assets, while the interest elements are credited to the profit and loss
account over the period of the lease to produce a constant rate of credit on the balance of capital repayments still due.
Operating lease rentals are charged to the profit and loss account, on a straight-line basis over the lease term.
f) Intangible assets – goodwill
Goodwill arising on the acquisition of subsidiary undertakings and businesses, representing any excess of the fair value of the consideration given
over the fair value of the identifiable assets and liabilities acquired, is capitalised and written off on a straight-line basis over its useful economic
life. Provision is made for any impairment.
Prior to 1998, goodwill arising on acquisitions was written off to reserves, as a matter of accounting policy and would be reinstated as part of the
profit and loss on any subsequent disposal of businesses to which it relates. Following the introduction of FRS10 ’Goodwill and intangible assets’
the goodwill previously written off to reserves has not been reinstated in the balance sheet. The amount of this goodwill is £39,836,000 
(2002: £39,836,000). Statement of Accounting Policies continued
for the year ended 30 September 2003 46
Synstar plc Annual Report and Accounts 2003
g) Tangible fixed assets and depreciation
Tangible fixed assets are shown at cost and are depreciated on a straight-line basis to their estimated residual values over their estimated lives
as follows:
Short leasehold land and buildings: over the period from initial occupation to the first rent review. 
Equipment, fixtures and fittings: 20% – 33.3%.
Repairable computer spares purchased, which are used in the servicing of the maintenance contracts of the business are capitalised as fixed assets
and depreciation is provided at a rate which will write off the cost of these spares over their estimated useful life of 50 months.
h) Stocks
Stocks are stated at the lower of average purchase cost and net realisable value. Net realisable value is based on estimated selling price less all
costs to be incurred prior to completion and sale. Provision is made for obsolete and slow moving items.
i) Taxation
Current tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the tax rates and laws that
have been enacted or substantially enacted by the balance sheet date.
Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where
transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurred at the balance
sheet date. Timing differences are differences between the Group’s taxable profits and its results as stated in the financial statements that arise
from the inclusion of gains and losses in tax assessments in periods different from those in which they are recognised in the financial statements.
A net deferred tax asset is regarded as recoverable and therefore only recognised when, on the basis of all available evidence, it can be regarded as
more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.
Deferred tax is not recognised when fixed assets are revalued unless by the balance sheet date there is a binding agreement to sell the revalued
assets and the gain or loss expected to arise on sale has been recognised in the financial statements. Neither is deferred tax recognised when fixed
assets are sold and it is more likely than not that the taxable gain will be rolled over, being charged to tax only if and when the replacement assets
are sold.
Deferred tax is recognised in respect of the retained earnings of overseas subsidiaries only to the extent that, at the balance sheet date, dividends
have been accrued as receivable or a binding agreement to distribute past earnings in future has been entered into by the subsidiary.
Deferred tax is measured at average tax rates that are expected to apply in the periods in which the timing differences are expected to reverse,
based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is measured on a 
non-discounted basis.
j) Foreign currency
Assets and liabilities in foreign currencies are expressed in sterling at the rates of exchange ruling at the balance sheet date.
The trading results of overseas subsidiaries are translated at the average exchange rate ruling during the year, with the adjustment between average
rates and the rate ruling at the balance sheet date being taken to reserve. The differences arising on the restatement of the opening net investment,
including goodwill, of overseas subsidiary undertakings are also dealt with as adjustments to reserves.
Other exchange differences are dealt with in the profit and loss account. Notes to the Accounts
for the year ended 30 September 2003 47
Synstar plc Annual Report and Accounts 2003
1. Segmental analysis
All turnover, operating profit and net assets were attributable to the Group’s principal activities and to Group companies
located, and operating, within Europe. 
2003 2002 2002 2002
£'000 £'000 £'000 £'000
total continuing discontinued total
1a Turnover by destination
UK and Republic of Ireland 146,735 141,453 – 141,453
France 16,940 16,967 – 16,967
Germany 23,952 26,744 – 26,744
Rest of Europe 35,351 34,986 1,720 36,706
222,978 220,150 1,720 221,870
1b Class of business
Turnover
Computer Services 202,061 200,564 1,720 202,284
Business Continuity 20,917 19,586 – 19,586
222,978 220,150 1,720 221,870
Operating profit
Computer Services 8,485 8,627 (140) 8,487
Business Continuity 2,947 2,441 – 2,441
Central expenditure (2,916) (2,920) – (2,920)
8,516 8,148 (140) 8,008
Net assets
Computer Services 23,163 24,973
Business Continuity 1,904 2,919
Unallocated 20,121 10,795
45,188 38,687 Notes to the Accounts continued
for the year ended 30 September 2003 48
Synstar plc Annual Report and Accounts 2003
1. Segmental analysis continued
2003 2002 2002 2002
£'000 £'000 £'000 £'000
total continuing discontinued total
1c Geographical segment
Turnover
UK and Republic of Ireland 148,762 142,467 – 142,467
France 16,383 17,051 – 17,051
Rest of Europe 57,833 60,632 1,720 62,352
222,978 220,150 1,720 221,870
Operating profit
UK and Republic of Ireland 13,761 9,490 – 9,490
France (3,327) (920) – (920)
Rest of Europe 998 2,498 (140) 2,358
Central Expenditure (2,916) (2,920) – (2,920)
8,516 8,148 (140) 8,008
Net assets
UK 19,034 20,698
Rest of Europe 6,033 7,194
Unallocated 20,121 10,795
45,188 38,687
Unallocated net assets consist of cash, tax payable, and other centrally held or managed assets and liabilities.
In relation to the discontinued operations in Switzerland, the profit and loss comparatives for the year ended 30 September 2002 include cost of
sales £1,160,000, gross profit of £560,000, selling and marketing costs of £149,000 and administration expenses of £551,000.
2. Exceptional items
On 1 March 2002, the Group disposed of its Swiss operations to ITRIS Maintenance AG. Under the terms of the sale, ITRIS acquired the contracts
held by Synstar Computer Services AG, the stocks of maintenance equipment, and re-employed 41 of its staff. The consideration for the sale was a
cash payment of £0.3m. The exceptional item of £1.5m in the prior year relates to the loss on the sale of the business and associated costs. The tax
effect was £nil.
The results of Switzerland in 2002 are disclosed as discontinued activities. 49
Synstar plc Annual Report and Accounts 2003
3. Profit on ordinary activities before taxation
Profit on ordinary activities before taxation is stated after charging:
2003 2002
£’000 £’000
Depreciation of owned tangible fixed assets 14,090 14,302 
Provision for impairment of fixed assets 200 – 
Operating lease rentals 
– land and buildings 5,031 3,952 
– other 4,009 6,439 
Auditors’ remuneration for audit services
– Deloitte & Touche LLP 221 – 
– Deloitte & Touche 25 193 
– Arthur Andersen – 34 
Amounts payable to the Auditors in respect of non audit services were as follows:
2003 2002
£’000 £’000
– Deloitte & Touche LLP 62 – 
– Deloitte & Touche 310 119 
– Arthur Andersen – 183 
A more detailed analysis of Auditors’ remuneration on a worldwide basis is provided below:
2003 2002
£’000 £’000
Auditors’ remuneration 
Statutory audit services 246 227 
Tax services
– Compliance 164 57 
– Advisory 83 75 
Other non audit services 125 170
Other non audit services relate to services provided with regard to employment issues. Notes to the Accounts continued
for the year ended 30 September 2003 50
Synstar plc Annual Report and Accounts 2003
4. Staff costs
The average monthly number of employees (including Executive Directors) was:
2003 2002
Number Number
Computer Services 2,944 2,856 
Business Continuity 102 105 
Central 55 37 
3,101 2,998
Their aggregate remuneration comprised:
2003 2002
£’000 £’000
Wages and salaries 82,946 79,583 
Social security costs 13,663 12,048 
Pension costs (Note 25) 2,214 2,294 
Other staff costs 1,905 1,820 
100,728 95,745 
The Directors’ remuneration, interests and transactions are detailed in the Report of Remuneration Committee, which is disclosed on pages 25 to 31.
5. Interest receivable and similar income
2003 2002
£’000 £’000
Bank interest 343 235 
6. Interest payable and similar charges
2003 2002
£’000 £’000
Bank loans and overdrafts 33 183 
Other loans 110 35 
143 218  51
Synstar plc Annual Report and Accounts 2003
7. Tax on profit on ordinary activities
The tax charge is based on the profit for the year and comprises:
2003 2002
£’000 £’000
UK corporation tax at 30% (2002: 30%)
– Current taxation 3,393 1,853 
– Adjustment to tax charge in respect of previous periods (880) – 
Overseas taxation
– Current taxation 467 1,236 
– Adjustment in respect of prior year – Overseas taxation (continuing operations) (292) (24)
Total current tax 2,688 3,065 
Deferred taxation (See Note 13) 130 (502)
Tax on profit on ordinary activities 2,818 2,563 
Deferred taxation not recognised is as follows:
2003 2002
£’000 £’000
Other timing differences (4,200) (2,980)
Unprovided deferred tax assets relate to tax losses in overseas subsidiaries. If and when taxable profits were to be made in these countries then the
losses could then be utilised.
The differences between the total current tax shown above and the amount calculated by applying the standard rate of UK corporation tax to the
profit before tax is as follows:
2003 2002
£’000 £’000
Group profit on ordinary activities before tax 8,716 6,532 
Tax on Group profit on ordinary activities at standard UK
corporation tax rate of 30% (2002: 30%) 2,615 1,960 
Effects of:
Expenses not deductible for tax purposes 1,259 302 
Depreciation in excess of capital allowances 175 502 
Other timing differences (305) – 
Higher tax rates on overseas earnings 116 325 
Adjustments to tax charge in respect of previous periods (1,172) (24)
Group current tax charge for year 2,688 3,065  Notes to the Accounts continued
for the year ended 30 September 2003 52
Synstar plc Annual Report and Accounts 2003
7. Tax on profit on ordinary activities continued 
The expenses not deductible for tax purposes principally consist of the losses in one particular country, which cannot be relieved for tax purposes.
The tax charge in future periods may be affected by the mix in profits between the UK and overseas.
The Group earns its profits primarily in the UK, therefore the tax rate used for tax on profit on ordinary activities is the standard rate for UK
corporation tax, currently 30%. The Group’s overseas tax rates are higher than those in the UK, primarily because the profits earned in Belgium are
taxed at a higher rate.
8. Dividends
The Directors recommend the payment of a dividend of 0.5p per equity share (2002: nil p) representing a charge of £812,500.
9. Earnings per share
Basic earnings per share are calculated in accordance with FRS14 Earnings per Share, based on profit after tax of £5,898,000 (2002: £3,969,000) and
162,500,000 (2002: 162,500,000) ordinary shares, being the weighted average in issue during the year.
Diluted earnings per share is the basic earnings per share after allowing for the dilutive effect of options in issue. The number of shares used for the
fully diluted calculation is 163,080,000 (2002: 162,977,000).
The adjusted basic earnings per share information has been calculated before exceptional costs, net of taxation and goodwill. The Directors believe
this additional measure provides a better indication of the underlying trends in the business.
The calculations of the adjusted earnings per share are based on the following profits:
2003 2002
£’000 £’000
Profit for the year for basic earnings per share 5,898 3,969 
Exceptional items – 1,493 
Profit for the year for adjusted basic earnings per share 5,898 5,462 
Weighted average number of shares in issue:
2003 2002
Number Number
’000 ’000
For basic earnings per share 162,500 162,500 
Exercise of options 580 477 
For diluted earnings per share 163,080 162,977  53
Synstar plc Annual Report and Accounts 2003
9. Earnings per share continued 
Reconciliation of basic earnings per share to adjusted earnings per share
2003 2002
Adjusted basic earnings per share (before exceptional items) 3.6p 3.4p
Basic earnings (loss) per share on exceptional items – (1.0p) 
Basic earnings per share 3.6p 2.4p
Diluted earnings per share 3.6p 2.4p 
10. Tangible fixed assets
Short
leasehold Repairable Equipment,
land and computer fixtures and
buildings spares fittings Total
£’000 £’000 £’000 £’000
Group
Cost
At 1 October 2002 2,072 53,415 37,930 93,417 
Additions – 9,054 4,633 13,687
Disposals – (6,293) (254) (6,547)
Transfers – (331) – (331)
Translation differences 70 1,375 1,641 3,086
At 30 September 2003 2,142 57,220 43,950 103,312
Depreciation
At 1 October 2002 1,510 31,478 26,783 59,771
Charge for year 50 9,579 4,461 14,090
Disposals – (6,134) (203) (6,337)
Impairment – 200 – 200
Transfers – (18) – (18)
Translation differences 18 1,011 1,410 2,439
At 30 September 2003 1,578 36,116 32,451 70,145
Net book value
At 30 September 2003 564 21,104 11,499 33,167
At 30 September 2002 562 21,937 11,147 33,646
The above relate to the assets held by subsidiary undertakings. The Company holds no tangible fixed assets. Notes to the Accounts continued
for the year ended 30 September 2003 54
Synstar plc Annual Report and Accounts 2003
11. Investment in subsidiary undertakings
2003 2002
£ £
Company
Cost at beginning and end of year 1 1
The Company’s investment comprises 100% of the ordinary share capital of Synstar Holdings Limited. 
The Group headed by the Company has 100% investments in the following subsidiary undertakings, all of which have been consolidated into the
Group accounts. To avoid a statement of excessive length, details concerning investments, which are not significant have been omitted. A full list of
all subsidiaries will be included in the next annual return.
Country of incorporation Principal
or registration activity
Synstar Holdings Limited* England and Wales Holding Company
Synstar International Limited England and Wales Holding Company
Synstar Computer Services (UK) Limited England and Wales Computer Services
Synstar Business Continuity Limited England and Wales Business Continuity
Synstar (Netherlands) BV Netherlands Computer Services
Synstar Computer Services Holdings GmbH Germany Holding Company
Synstar Computer Services GmbH Germany Computer Services
Synstar Data Management GmbH Germany Computer Services
Synstar Computer Services Europe SA France Holding Company
Synstar Computer Services SA France Computer Services
Synstar Business Continuity SARL France Business Continuity
Synstar (Belgium) SA Belgium Computer Services
Synstar Computer Services S.A. Spain Computer Services
* Held directly by Synstar Plc
12. Stocks
2003 2002
£’000 £’000
Group:
Goods held for resale 504 736 
Consumable spares 1,936 1,214 
2,440 1,950 
There is no material difference between the balance sheet value of stocks and their replacement cost.
The Company had no stocks at either year-end. 55
Synstar plc Annual Report and Accounts 2003
13. Debtors
2003 2002
£’000 £’000
Group
Amounts falling due within one year:
Trade debtors 44,478 46,183 
Other debtors 3,531 3,787 
Prepayments 1,474 1,462 
Amounts due under finance leases 294 – 
49,777 51,432 
Amounts falling due after one year:
Deferred taxation 372 502 
Other debtors 1,731 1,471 
Amounts due under finance leases 555 – 
2,658 1,973 
Company
Amounts falling due after one year:
Amounts owed by Group undertakings 32,770 32,770 
Group
Deferred taxation is recognised as follows:
2003 2002
£’000 £’000
Deferred taxation – accelerated depreciation (197) (502)
Deferred taxation – other timing differences (175) – 
Undiscounted deferred taxation asset (372) (502)
Deferred taxation asset
£’000
As at 1 October 2002 502
Charged to Profit and Loss Account (See Note 7) (130)
As at 30 September 2003 372 Notes to the Accounts continued
for the year ended 30 September 2003 56
Synstar plc Annual Report and Accounts 2003
14. Creditors: Amounts falling due within one year
2003 2002
£’000 £’000
Group
Bank loans and overdrafts (unsecured) – 992 
Obligations under finance leases 244 – 
Trade creditors 13,605 12,678 
Corporation tax 3,727 3,112 
Other creditors 11,619 12,794 
Taxation and social security 5,066 4,615 
Accruals and deferred income 34,243 33,554 
Proposed dividend 813 – 
69,317 67,745 
Company
Amounts falling due within one year
Proposed dividend 813 – 
Group
Borrowings are repayable as follows:
2003 2002
£’000 £’000
Bank loans: Amounts falling due within one year – 814 
Overdrafts – 178 
Finance leases 244 – 
Total borrowings 244 992 
15. Creditors: Amounts falling due after more than one year
2003 2002
£’000 £’000
Group
Finance leases
Between one and two years 179 – 
Between two and five years 280 – 
459 –  57
Synstar plc Annual Report and Accounts 2003
16. Derivatives and other financial instruments
The numerical disclosures in this note deal with financial assets and financial liabilities as defined in Financial Reporting Standard 13 ‘Derivatives
and other financial instruments: Disclosures’ (FRS13). Certain financial assets such as investments in subsidiary undertakings are excluded from the
scope of these disclosures. Further details on the Group’s controls over treasury are detailed in the Statement of Corporate Governance on page 34. 
As permitted by FRS13, short term debtors and creditors have been excluded from the disclosures, other than the currency disclosures.
Financial assets
The Group’s financial assets consist of cash and deposits which are placed on money markets at overnight, seven day and monthly rates, and finance
leases. The currency profile on these assets is as follows: 
2003
Euro Swiss
Sterling currencies Francs Total
£’000 £’000 £'000 £’000
Cash and deposits 22,295 4,609 18 26,922 
Finance leases 849 – – 849 
23,144 4,609 18 27,771 
2002
Euro Swiss
Sterling currencies francs Total
£’000 £’000 £'000 £’000
Cash and deposits 10,905 6,478 48 17,431 
Financial liabilities
The Group had no financial liabilities as at 30 September 2003, other than obligations under finance leases detailed in Notes 14 and 15.
The interest rate profile of the Group’s financial liabilities at 30 September 2002 for comparison purposes was as follows:
Euro
currencies
£’000
Bank loans and overdrafts 992 
Floating rate 992 
The floating rate financial liabilities bear interest at rates fixed in advance for periods ranging from one day to six months by reference to LIBOR. Notes to the Accounts continued
for the year ended 30 September 2003 58
Synstar plc Annual Report and Accounts 2003
16. Derivatives and other financial instruments continued
Currency exposures
The Group does not actively hedge currency exposures arising from its net investments overseas. However, if and when funding is required by an
overseas subsidiary, the Group borrows in the currency of the relevant country. Gains and losses arising from these structural currency exposures
are recognised in the statement of total recognised gains and losses.
The Group has only monetary assets and monetary liabilities that are denominated in the operating currency of the operating unit involved, except
for certain non-sterling borrowings treated as hedges of net investments in overseas operations.
Maturity of financial liabilities
The maturity of the Group’s financial liabilities other than short term creditors such as trade creditors and accruals, at 30 September 2003, was as follows:
2003 2002
£’000 £’000
In one year or less 244 992 
Between one and two years 179 – 
Between two and five years 280 – 
703 992 
Borrowing facilities
The Group had undrawn committed borrowing facilities at 30 September 2003, in respect of which all conditions precedent had been met, as follows:
2003 2002
£’000 £’000
Expiring in less than two years 15,000 – 
Expiring in more than two years but not more than five years – 14,186 
15,000 14,186 
The Group has a £15,000,000 (2002: £15,000,000) bilateral multi-currency facility with Barclays Bank which so long as contractual conditions are
satisfied, has a final repayment date of 29 April 2005. The interest rate on this facility is 1.25%p.a. above LIBOR. At 30 September 2003, £nil 
(2002: £813,927) was being utilised for short term loans. None of the facility was being utilised for bank overdraft and performance guarantees 
(2002: none).
Fair values of financial instruments
There is no material difference between the book value and fair value of the Group’s financial assets and liabilities at each period end.
The Group does not trade in financial instruments. 59
Synstar plc Annual Report and Accounts 2003
17. Called-up share capital
2003 2002
£’000 £’000
Authorised
216,666,666 ordinary shares of 1p each (2002: 216,666,666) 2,167 2,167 
Allotted, called-up and fully paid
162,500,000 ordinary shares of 1p each (2002: 162,500,000) 1,625 1,625 
Certain employees of the Group hold options to subscribe for shares in the Company at the market price at the date of grant. The number of shares
subject to options, the periods in which they were granted and the periods in which they may be exercised are given below:
Exercise Exercise 2003 2002
price period Numbers Numbers
Year of Grant
1999 128.5p 2002-2009 490,000 1,340,000 
1999 103.6p n/a 184,592 1,000,000 
2000 227.5p 2003-2010 100,000 100,000 
2000 73.5p 2003-2010 200,000 280,000 
2000 193.0p n/a 8,788 501,190 
2001 48.5p 2004-2011 1,360,000 1,360,000 
2001 50.4p n/a 869,307 1,200,000 
2002 51p 2005-2012 500,000 500,000 
2002 49p 2005-2012 200,000 200,000 
18. Reserves
Profit and
loss account
Group £’000
At 1 October 2002 37,062
Retained profit for the year 5,085
Exchange differences 1,416 
At 30 September 2003 43,563 
Profit and
loss account
Company £’000
At 1 October 2002 31,145 
Retained loss for the year (813)
At 30 September 2003 30,332  Notes to the Accounts continued
for the year ended 30 September 2003 60
Synstar plc Annual Report and Accounts 2003
19. Reconciliation of movements in Group shareholders’ funds
2003 2002
£’000 £’000
Profit for the financial year 5,898 3,969 
Currency translation differences 1,416 (81)
7,314 3,888
Dividend proposed (813) – 
Net addition to shareholders’ funds 6,501 3,888 
Opening Group shareholders’ funds 38,687 34,799 
Closing Group shareholders’ funds 45,188 38,687 
20. Reconciliation of operating profit to net cash inflow from operating activities
2003 2002
£’000 £’000
Operating profit 8,516 8,008 
Depreciation charges 14,090 14,302
(Increase) decrease in stocks (66) 919 
Decrease (increase) in debtors 2,604 (4,343)
(Decrease) increase in creditors (185) 2,555 
24,959 21,441  61
Synstar plc Annual Report and Accounts 2003
21. Analysis of cash flows
2003 2002
£’000 £’000
Returns on investments and servicing of finance
Interest paid (143) (218)
Interest received 343 235 
Net cash outflow from returns on investments and servicing of finance 200 17 
Taxation
Net tax paid (1,637) (977)
Capital expenditure
Purchase of tangible fixed assets (13,711) (11,703)
Sale of tangible fixed assets – 192 
(13,711) (11,511)
Disposals
Disposal consideration – 324 
Disposal costs paid – (870)
– (546)
Financing
Repayment of loans (814) (954)
22. Analysis of net funds
Cash at Finance
bank Overdraft Loans leases Total
£’000 £’000 £’000 £’000 £’000
Balance at 1 October 2002 17,431 (178) (814) – 16,439
Cash flows during year 8,819 178 814 – 9,811
Foreign exchange 672 – – – 672
Other non-cash changes – – – 146 146
Balance at 30 September 2003 26,922 – – 146 27,068 Notes to the Accounts continued
for the year ended 30 September 2003 62
Synstar plc Annual Report and Accounts 2003
23. Reconciliation of net cash flow to movement in net funds
2003 2002
£’000 £’000
Net increase in cash during the year 8,997 7,470 
Cash outflow from decrease in debt 814 954 
Foreign currency and other changes 672 (3)
Movement in net funds resulting from cash flows 10,483 8,421 
New finance leases 146 – 
Movement in net funds in year 10,629 8,421 
Net funds at beginning of year 16,439 8,018 
Net funds at end of year 27,068 16,439 
24. Guarantees and other financial commitments
a) Capital commitments
At the end of the year, capital commitments were:
2003 2002
£’000 £’000
Group
Contracted but not provided for 206 316 
b) Operating leases
Annual commitments under non-cancellable operating leases are as follows: 
Land and Other Land and Other
buildings equipment buildings equipment
2003 2003 2002 2002
£’000 £’000 £’000 £’000
Group
Expiry date
– within one year 1,407 885 548 1,223 
– between two and five years 1,631 3,292 2,427 3,216 
– after five years 1,929 – 2,182 – 
4,967 4,177 5,157 4,439 
c) Guarantees
The Group gives performance based guarantees on certain large contracts with customers, in the normal course of business. As at 30 September
2003, guarantees outstanding amounted to £1,185,000 (2002: £1,130,000). 63
Synstar plc Annual Report and Accounts 2003
25. Pensions
The Group contributes to a defined contribution pension scheme for employees in the UK known as the Synstar (UK) Pension Scheme (the ‘Synstar
Scheme’). Benefits, other than the lump sum payable on death in service, are not defined but depend on the contributions paid by and in respect of
employees to the pension scheme and their investments’ return.
The Group makes contributions in respect of all members at the rate of 3% of the member’s basic salary. In addition where a member elects to make
contributions, the Group matches the member’s contributions on a pound for pound basis up to a maximum of a further 5% of basic salary (i.e. the
Group’s contributions range from 3% to 8% of basic salary). In respect of certain members of staff, the Group makes enhanced contributions over
and above those outlined for other members. The outstanding liability relating to the scheme at 30 September 2003 was £211,872 (2002: £204,645).
The Group operates a defined contribution pension scheme in Belgium for certain employees in that country. The employer is obliged to contribute at
a rate of 2% of pensionable salary.
The Group operates a defined contribution scheme for certain employees in the Netherlands. Contributions of 5% of pensionable salary are paid by
both employees and the Group, with enhanced contributions for certain members.
The charge to the profit and loss account of £2,214,000 comprises a charge of £1,986,000 (2002: £2,044,000) on defined contribution schemes and
£228,000 (2002: £250,000) on defined benefit schemes.
The Group operates a funded defined benefit pension scheme for certain employees in the Republic of Ireland. The latest actuarial valuation of the scheme
as at 1 October 2002 showed that on the basis and assumptions used in the valuation the assets of the scheme were sufficient to cover the benefits which
had accrued. The long funding rate was estimated to be 15.4% of total pensionable salary. The employees contribute 5% of their pensionable salary with
the Group meeting the balance of the costs of providing the scheme’s benefits. At 1 October 2002 the scheme was 149% funded.
The major assumptions used for the actuarial valuation were:
%
Rate of increase in salaries 3.5%
Discount rate pre-retirement 6.0%
Discount rate post-retirement 5.5%
Inflation assumption 2.5%
Additional disclosures regarding this defined benefit pension scheme are required under the transitional provisions of FRS17 ‘Retirement benefits’
and these are set out below. The disclosures relate to the second year of the transitional provisions. They provide information which will be
necessary for full implementation of FRS17.
The actuarial valuation described above has been updated at 30 September 2003 by a qualified actuary using revised assumptions that are
consistent with the requirements of FRS17. Investments have been valued, for this purpose, at fair value. The prior year comparatives have been
restated to reflect additional assets omitted from last year’s actuarial report.
The major assumptions used for the actuarial valuation were:
2003 2002
% %
Rate of increase in salaries 3.0% 3.0%
Rate of increase in pensions in payment 3.0% 3.0%
Discount rate 5.0% 5.5%
Inflation assumption 2.0% 2.3% Notes to the Accounts continued
for the year ended 30 September 2003 64
Synstar plc Annual Report and Accounts 2003
25. Pensions continued
The fair value of the assets in the scheme, the present value of the liabilities in the scheme and the expected rate of return at the balance sheet
date were:
2003 2003 2002 2002
% £'000 % £'000
Equities 7.25 1,037 8.0 749
Bonds 4.25 307 5.0 261
Other 6.25 158 6.5 125
Total fair value of assets 1,502 1,135
Present value of scheme liabilities (1,204) (647)
Surplus in the scheme 298 488
Related deferred tax liability (89) (146)
Net pension asset 209 342
The contribution rate for the years ended 30 September 2002 and 2003 was 15.4% of pensionable earnings and the agreed contribution rate for the
next financial year is 15.4% of pensionable earnings. This is made up of employee contributions of 5% and employer contributions of 10.4%.
Analysis of the amount that would have been charged to operating profit under FRS17:
2003 2002
£'000 £'000
Current Service cost 44 52
Analysis of the amount that would have been credited to net finance income under FRS17:
2003 2002
£'000 £'000
Expected return on pension scheme assets 93 100
Interest on pension scheme liabilities (42) (32)
51 68
Analysis of the actuarial gain that would have been recognised in the statement of total recognised gains and losses:
2003 2002
£'000 £'000
Actual return less expected return on pension scheme assets 49 (558)
Experience gains and losses arising on the scheme liabilities (117) 4
Changes in assumptions underlying the present value of the scheme liabilities (253) 103
(321) (451) 65
Synstar plc Annual Report and Accounts 2003
25. Pensions continued
Movement in scheme surplus during the year:
2003 2002
£'000 £'000
Opening balance 488 829
Current service cost (44) (52)
Contributions 91 88
Net finance income 51 68
Currency movements 33 6
Actuarial loss (321) (451)
Closing balance 298 488
History of experience gains and losses:
2003 2002
Difference between the expected and actual return on scheme assets:
Amount (£'000) 49 (558)
Percentage of scheme assets 3.3% (49.2%)
Experience gains and losses on scheme liabilities:
Amount (£'000) (117) 4
Percentage of the present value of scheme liabilities 9.7% (0.6%)
Total actuarial gain recognised in the statement of total recognised gains and losses:
Amount (£'000) (321) (451)
Percentage of the present value of scheme liabilities 26.7% 69.7%
The Group operates a defined benefit scheme for certain employees in Germany. The outstanding liability relating to the scheme at 30 September 2003
was £1,771,000 (2002: £1,634,000) which is classified within other creditors in the Group balance sheet. The liability was valued on an actuarial basis
using the Attained Age Method assuming an interest rate of 6.0%, with no inflationary increase in salaries and pension payments. 
At 30 September 2003, the scheme is fully reserved. The pension plan is closed to new entrants.
Additional disclosures regarding this defined benefit pension scheme are required under the transitional provisions of FRS17 ‘Retirement benefits’ and
these are set out below. The disclosures relate to the second year of the transitional provisions. They provide information which will be necessary for
full implementation of the FRS17.
The actuarial valuation described above has been updated at 30 September 2003 by a qualified actuary using revised assumptions that are consistent
with the requirements of FRS17. Investments have been valued, for this purpose, at fair value, using the projected unit credit valuation method.
The major assumptions used for the actuarial valuation were:
2003 2002
% % 
Rate of increase in salaries 2.2 3.0
Rate of increase in pensions in payment 1.2 2.3
Discount rate 5.2 6.3
Inflation assumption 1.2 2.3 Notes to the Accounts continued
for the year ended 30 September 2003 66
Synstar plc Annual Report and Accounts 2003
25. Pensions continued
The fair value of the assets in the scheme, the present value of the liabilities in the scheme and the expected rate of return at the balance sheet
date were:
2003 2003 2002 2002
%£'000 %£'000
Insured fund 5.2 1,029 7.3 865
Total fair value of assets 1,029 865
Present value of scheme liabilities (3,408) (2,637)
Shortfall in the scheme (2,379) (1,772)
Related deferred tax asset – –
Net pension liability (2,379) (1,772)
Net reserve provided 1,771 1,634
Net unprovided pension liability under FRS17 (608) (138)
The pension plan has one asset, namely an insurance policy. The insurance policy represents a future cash flow that reduces the Company’s net
payments. It is therefore valued using a consistent actuarial basis to that used to value the liabilities.
In addition to the insurance policy, in order to meet the pension requirements, the Company builds up a net reserve on its balance sheet. As at
30 September 2003 net reserve was £1,771,000 (2002: £1,634,000). 
Analysis of the amount that would have been charged to operating profit under FRS17:
2003 2002
£'000 £'000
Current service cost 48 49
Analysis of the amount that would have been credited to net finance income under FRS17:
2003 2002
£'000 £'000
Expected return on pension scheme assets 54 5
Interest on pension scheme liabilities (168) (162)
(114) (157)
Analysis of the actuarial gain that would have been recognised in the statement of total recognised gains and losses:
2003 2002
£'000 £'000
Actual return less expected return on pension scheme assets 49 –
Experience gains and losses arising on the scheme liabilities 5 (127)
Changes in assumptions underlying the present value of the scheme liabilities (323) –
(269) (127) 67
Synstar plc Annual Report and Accounts 2003
25. Pensions continued
Movement in scheme liability during the year:
2003 2002
£'000 £'000
Opening balance (138) 89
Current service cost (48) (49)
Charge to book reserve 137 138
Net finance charge (114) (157)
Currency movements (176) –
Actuarial loss (269) (127)
Closing balance (608) (106)
History of experience gains and losses:
2003 2002
Difference between the expected and actual return on scheme assets:
Amount (£'000) 49 –
Percentage of scheme assets (2.1%) 0.0%
Experience gains and losses on scheme liabilities:
Amount (£'000) 5 (127)
Percentage of the present value of scheme liabilities (0.1%) 4.8%
Total actuarial gain recognised in the statement of total recognised gains and losses:
Amount (£'000) (269) (127)
Percentage of the present value of scheme liabilities 7.9% 4.8%
Pension Reserves – Group:
Total
£’000
Profit and loss reserve excluding pension liability 43,563
Amount relating to defined benefit pension scheme liabilities, net of related deferred tax (399)
Profit and loss reserve 43,164 
26. Contingent liabilities
The Group has given indemnities in respect of overseas overdrafts, property lease payments and import duty guarantees (but excluding performance
guarantees) issued on its behalf. The amount outstanding at 30 September 2003 was £324,000 (2002: £281,000). The indemnities, which arose in the
ordinary course of business, are not expected to result in any material loss.
The retirement indemnity liability in the Group’s French subsidiaries at 30 September 2003 was £973,000. This relates to statutory amounts, based on
length of service, payable to employees of French companies at the point of their retirement. Since these payments are conditional upon the
employees being employed by the Group at retirement age the amount is treated as a contingent liability in accordance with generally accepted
accounting practice. Based on the same methodolgy of calculation the prior year comparison was £565,000. Five Year Summary
30 September 2003 68
Synstar plc Annual Report and Accounts 2003
1999 2000 2001 2002 2003
Results
£'000’s (unless otherwise stated)
Turnover 214,289 235,911 238,198 221,870 222,978 
Operating profit before goodwill amortisation and
exceptional items 12,886 9,861 4,605 8,008 8,516 
Operating profit (loss) 12,850 5,693 (16,186) 8,008 8,516 
Profit (loss) for the financial year 5,135 940 (22,375) 3,969 5,898 
Dividends – – – – (813)
Assets employed
Fixed assets 51,717 58,020 36,910 33,646 33,167 
Net current assets (liabilities) 7,186 195 (2,111) 5,041 12,480 
Creditors: Amounts falling due after more than one year (863) (820) – – (459)
Net assets 58,040 57,395 34,799 38,687 45,188 
Key statistics
Closing share price 144p 76p 43.50p 48p 67.50p
Adjusted basic earnings per share 4.6p 3.1p 1.1p 3.4p 3.6p
Diluted earnings per share 3.7p 0.6p (13.8p) 2.4p 3.6p
Capital expenditure 15,765 20,461 11,459 11,511 13,711
Cash inflow from operating activities 25,002 23,362 14,711 21,441 24,959 
Average number of employees 2,522 3,045 3,080 2,998 3,101 
Net funds 11,378 6,138 8,018 16,439 27,068 
Operating profit before goodwill amortisation and
exceptional items as a percentage of turnover 6.0% 4.2% 1.9% 3.6% 3.8%