• MINIMISING BUSINESSRISK •
M AXIM ISING BUSINESSAVAILABILITY
Synstar plc
Annual Report and Accounts 2002
Shining
bright Synstar’s
vision
To be a world class IT services provider
Contents
1 Financial Highlights
2 Chairman’s Statement
4 Chief Executive’s Review
17 Indicators
18 Finance Director’s Review
22 Board of Directors
25 Report of the Directors
27 Remuneration Report
28 Environmental Policy Statement
29 Corporate Governance
31 Independent Auditors’ Report
32 Consolidated Profit and Loss Account
33 Consolidated Statement of Total 
Recognised Gains and Losses
34 Consolidated Balance Sheet
35 Company Balance Sheet
36 Statement of Accounting Policies
38 Notes to the Accounts
58 Five-Year Summary
59 Directors and Advisors
60 Addresses Financial Highlights:
•
Revenue £221.9m
•
Operating profit before goodwill and exceptional items £8.0m
•
Cash flow before financing £8.4m
•
Adjusted EPS 3.4p P AGE 2
John Leighfield CBE
Chairman P AGE 3
am pleased to report that the financial
results for the group have fully
reflected the hopes and plans of last
year. Despite one of the most difficult
marketplaces in recent times, Synstar has
delivered increased profit and generated
cash. Turnover for the period was
£221.9m (2001: £238.2m) and total
operating profit before goodwill and
exceptional items was £8.0m (2001:
£4.6m). Adjusted earnings per share were
3.4p (2001: 1.1p). The group generated
cash before financing during the year of
£8.4m (2001: £1.8m), and has traded with
a positive net cash balance in every
month of the year. These results reflect
the rewards of the difficult decisions and
strong action taken by Steve Vaughan
since he became CEO, and bode well for
the future.
The year has been characterised by
strong and steady improvement in the
health of the Company. Whereas 2001
was a year of major management action,
restructuring and the rollout of a new
strategy, 2002 has seen the rigorous
implementation of that strategy. Focus on
our customers, investment in our
services, development of a strong
management team and the elimination of
remaining problem areas have been the
four points of focus that have produced a
successful overall outcome.
Our customers and our professional and
long-term relationships with them have
always been the Company’s principal
asset. Synstar remains at the top of the
league for customer satisfaction. We now
have the right organisation and strategy
to capitalise upon that positive state of
affairs. Retention of customers is vital and
Synstar has always been good at that. We
are now becoming much more adept at
developing those relationships to sell
further services and expand our role in
the provision of services. This is a real
change in the way the Company deals
with the marketplace.
Our service lines have also developed in
a most encouraging way. Synstar’s stock-
in-trade is to deliver the sort of IT service
that customers will always need. Our staff
excel in keeping critical systems going.
As information technology becomes
more and more crucial to business life, so
the demand for our services expands.
This has remained true even in the
current economic climate. Because of the
nature of our services, we are less
exposed to short-term slowdowns in the
buying of either products or new
projects. This is reflected in our results.
Above all else, this year has seen
considerable development of a
management team with strength in depth.
A combination of new managers and
extensive training and development of
existing managers has produced a
reliable, resourceful and realistic team
who understand the business and how to
take it forward. This is now a major
strength of the organisation and a crucial
factor for the future. A strong board
complements this team, and I would like
to take this opportunity to thank my
colleagues on the Board, who have
continued to provide good, timely advice
and a robust framework for corporate
governance.
Above all, I am particularly proud of our
staff and their continuing commitment to
the quality of service to our customers. 
A service organisation is only as good as
the people it can deploy on the ground.
Excellence takes time to develop, and
once achieved is a valuable asset. 
Our staff display that excellence in what
they do, day after day, and it is the
bedrock of our success.
The plan that we put in place at the start
of 2001 is now delivering impressive
results. It has set the group on an exciting
path, and the marketplace, though
difficult, presents good opportunities for a
business like Synstar. I look forward to
the strong performance that can come
from this situation in the future.
John Leighfield CBE
Chairman
I
Chairman’s Statement Steve Vaughan
Chief Executive P AGE 5
Introduction
t has been a difficult time to be an IT
company recently. Against a backdrop
of disappointing news throughout the
sector, I am extremely pleased to be able
to report that Synstar remains on track
with its plans, and has delivered better
results than the market expected. 
Our success comes from the strong
foundation built during the past 18 months.
We made difficult decisions and ambitious
plans during 2001, and have followed
through on these decisions and plans
during 2002. This puts the company in an
enviable position when compared to the
majority of its peers – we are profitable,
cash generative, debt free and growing.
We have benefited more than I had hoped
from the restructuring activities of last year.
The first half financial performance gave
us the foundation for the growth that was
the aim of our restructuring programme.
We exploited this in the second half. Our
business delivered second half operating
profits of £4.9m, generated £7.4m of cash
and ends the period with net cash of
£16.4m. Our revenues from long-term
business have also grown and our order
book has grown by 46% to £319m. The
second half also brought some notable
contract wins, such as CSC, Westland
Helicopters and Avecia. Taken together, I
believe all this demonstrates a company
in good shape, and one that can step up
to the challenge of growth.
It is to this challenge that we must now
devote our energy. Phase 1 of our plan
gave us the basis for a new and stronger
sales force, with relationship managers
focused on existing customers and
salesmen on new names. Our investment
in the training and support of these
people has produced a sales force that
can take on the best and win. They are
selling our new standard service lines,
developed and packaged during Phase 2
to match our customer requirements. 
We have many new services to bring to
market over the coming months to add
fuel to grow our sales. During Phase 3, as
the final key to successful sales growth,
we must convert the perception of
Synstar from niche maintenance and
disaster recovery provider to trusted
partner for delivery of integrated
managed services. There is plenty of
evidence that this change in our
customers’ perception is well underway.
Achieving this is the eventual definition of
the success of our strategy.
Progress with our strategy
I have long held that a company operates
best when it is following a clear plan and
has the right focus on its objectives. At
the start of 2001, our strategic review
created that plan. It was very clear about
the objectives – focus on profit and cash;
cross-sell services into our excellent
customer base; build a stable foundation
upon which the company could grow at 
I
Chief Executive’s Review
Increasingly
seen as a
trusted
managed services
provider
UK and Ireland
Depending on which research house you subscribe to, either the UK&I or
Germany has the largest IT market in Western Europe. Either way, UK&I
is an enormous market full of opportunity and combining leading-edge
technologies with still-important legacy architectures. Even though
budgets have been frozen or cut, efficiency and productivity must still
improve and it is this ‘more for less’ attitude which has driven the IT
market in the direction of outsourcing and total managed service. This
year we have won some mammoth deals, signing contracts of a type and
size which a few years ago would not even have existed. Virus alerts,
uninvited visitors to the corporate network and disgruntled employees are
all potential hazards which have the power to take a business to the wall.
We have recently launched services to assist customers in understanding
these hazards and minimising their risk, and we will continue to develop
them as we move through the coming months.
The Irish business continues to grow and generate a strong contribution.
In 2002 margin growth was on budget outperforming most competitors in
a tough trading year. The adoption of new service lines has seen an
increase in professional services revenue particularly in business 
continuity and network security in the public and banking sectors. We
have also seen two significant VIDA projects undertaken; the first of many.
In fact Synstar recently managed its first major Irish contract invocation
for a banking client; with Synstar supporting all processes, infrastructure,
logistics and staff delivered to plan and the customer suffered no
business interruption.
To meet the needs of the substantial Irish call centre market Synstar has
introduced a packaged business continuity product 
_
Contact Continuity
TM
.
The product, which has been enthusiastically received by the industry,
balances the focus on IT and work areas with a unique approach to the
vital telephony technology which is the heart of the contact business.
Two major call centres are already signed up and have tested
successfully. The business availability (BA) concept is vital to many UK&I
industries, and Synstar is proving that BA thinking is not only a great idea
but a reality too.
Mike Ettling, Managing Director for the UK and Ireland track record
Our clients trust us to keep on performing
because we know that tomorrow’s 
opportunities grow out of 
today’s hard work P AGE 7
above the market rate; and aim to become
a world class IT services provider. 
Our plan is split into three phases, and at
the half year I reported that Phase 2 was
nearing a successful conclusion. I can
now report that we did indeed achieve
the objectives of Phase 2 – ‘Stabilise,
Improve and Invest’. Stability is clear
from the financial results and the absence
of volatility. Improvement shows in the
resolution of several operational and
managerial issues such as the disposal of
our Swiss business and improvements in
logistics and networking business.
Investment is clearly yielding benefits in
the development of our service lines, as I
will outline below. Above all, we
managed a period devoid of major
upheavals, which gave our new
organisation and strategy the time to take
root. This is the basis of long-term
change and success.
Of course, it is unrealistic to expect any
plan to run faultlessly. Our French
business remains problematic, despite
the target that we could complete this
year with a break-even run rate. The
percentages of revenue in France which
depend upon short-term projects (which
have to be continuously bid and won)
and mobile engineering (which is much
lower margin) is higher than elsewhere. 
It takes longer to change the shape of a
business like this. We have more to do, but
remain sure that this part of our business,
the only loss-making element of the
Group, will be returned to profit.
During the second half we saw a strong
start to Phase 3. In particular, we fully
outlined the actions required during the
period to the end of 2003 to drive the
growth that we seek. We made a good
start on these actions and have begun to
see some results. We split these actions
into a number of ‘streams’, concentrating
our efforts on developing our service
lines, improving our internal processes,
investing in the skills and careers of our
staff, and stepping up the Synstar sales
performance. I will review the plans and
progress of each of these in turn.
Rollout of our service lines
Our service lines are the building blocks
of our growth strategy. We have the
customers; selling more services to them
is the plan for growth. Today, our service
lines are well matched, revolving as they
do around the support and development
of high availability computer
infrastructure. However, we are not yet
able to deliver all of our services in each
of the territories in which we operate.
The rollout of our existing services is one
key element of our Phase 3 plan. In
addition, the development of services to
meet new technical demands and higher
levels of business availability is receiving
attention.
Chief Executive’s Review
Continued
Foundations laid
for strong
and lasting
growth
Germany
The market in Germany was heavily influenced by the general economic
situation. Market growth in 2002 was only 0.5% against a forecast level of
2.4%. Accordingly this had an important impact on the IT sector with many IT
infrastructure projects either frozen or postponed. Despite this difficult situation
Synstar was able to keep the installed base at the same level as last year,
whilst also winning a very large and important computer services customer in
the automotive sector. Since this new project began the business has
expanded continuously. This particular customer win is also a good example of
our cross-selling activities. Business continuity is becoming more important to
our German operations, and since September 11 interest in our various
business continuity services has grown steadily resulting in our first BC
contract with a global financial services business taking approximately 100
seats in our new Frankfurt business recovery centre. 
Peter Rembert, Business Service Manager for Germany In the last two years we have stamped our commitment
on everything we do, building financial, technical and
commercial strength for the long haul
achievement P AGE 9
Business continuity
The performance of our business continuity
service offering during the year has been
excellent. Our focus on return on capital
employed (ROCE) – sweating the assets,
rather than the urge to build ever more
capacity – has produced very strong results.
ROCE is now above 70%, and operating
profits from this business have increased
by 22%. Achieving this level of return, we
can now consider opportunities to expand
our infrastructure. Recently, we invested in a
new Business Recovery Centre in Frankfurt,
a market that has not been accessible to
us in the past. We have already signed up
a global financial services business for
this new facility. We will continue to look for
relatively small-scale opportunities to
expand our capabilities, in both geography
and technology coverage, while always
keeping our main attention on the return
on the investment.
Networking
Our networking business is now focused
on long-term contracts and high value
consulting, rather than being dominated
by low margin product sales. The
Network Operating Centre we established
in Newbury in early 2002 is now a
flagship for our service offering in
networking. Solutions and projects
remain a key part of what we do, and our
efforts to build better relations with key
partners in this area have been rewarded.
In addition to our existing capabilities in
the UK and France, we have now
developed a networking revenue stream
in Holland and Spain. Belgium and Germany
will be added in the first half of the 2002/3
financial year. Security is an essential part
of any network business. We now have a
thriving business in network security
consultancy to 22 of our customers, as
well as delivering the projects and
services derived from our advice.
Data management
Data management is currently the most
geographically restricted business. We
are strong in Germany and France, and it
is clear that many of our customers in
other areas would buy storage solutions
from us. This offering will become
increasingly important for high availability
service solutions. It is a key requirement,
during Phase 3, to expand our ability to
sell and deliver data management
solutions to all our countries.
Maintenance
Maintenance still forms the backbone 
of our business. There is a high level of
recurring business, and it represents an
excellent door opener to high profile
clients. We will continue to invest to
develop maintenance solutions for new
products, particularly for larger machines,
such as the Sun E10000 servers, where
customers require high availability. The
number of customers engaging us to
maintain their entire data centres has
increased significantly. 
Chief Executive’s Review
Continued
Breaking
the mould
of
Synstar
sales
France
France is Synstar’s third largest IT services market in terms of value. We
have traditionally sold all four service lines in this market, but have found it
more difficult to harness cross-selling opportunities within our installed
customer base. However, the culture is changing slowly as the realisation of
total cost of ownership and the value of outsourcing gain acceptance. More
and more of our customers are asking us for managed service offerings
covering our full service range. A large portion of our business is in the public
sector and we have recently seen the thawing of IT budgets frozen over the
past 18 months. Demand for business continuity services has been slow to
grow but is now gaining pace rapidly, recently prompting us to refurbish and
re-launch our Paris Business Recovery Centre.
Gerard Lugat, Sales Manager for France multi-service
Our centres of excellence individually deliver everything they
promise; and together they support our uniquely powerful
integrated business availability offering P AGE 11
Managed services 
Managed services is our fastest growing
service area. Seventeen of our largest 50
customers now buy managed services
from us (up from 13 last year). Our
successes during the year have shown
that there is a considerable market for the
provision of desktop services, help desks
and data centre management. Many of
our relationship managers find our
offerings in this area are a good next step
from maintenance when developing a
customer relationship. We have invested
during the year to bring our VIDA desktop
managed service offering to maturity. We
now have over 100,000 desktop users
under contract across Europe, and a
pipeline many times that figure. The
efficiency improvements produced when
our managed services are blended with
an on-site maintenance operation makes
our proposition cost-effective. We see a
considerable growth in customers looking
to us for a service that is often currently
delivered with fragmented in-house
resources.
Progress with Phase 3
Our services 
Service line development during Phase 2
concentrated on exploiting offerings that
we have been supplying to some
customers for a while. We took those that
represented the best potential, and made
them generally available. During Phase 3,
we have begun to develop entirely new
services, particularly ones that join up our
main areas of service. For example, we
can sell networking and business
continuity in a single packaged offering.
New services of this type will be launched
in the coming months, and help to develop
customer relationships based on several
different services at once. At the same
time these new services can yield a higher
margin than much of our existing
business.
Internal processes
While the effort to expand our service
offering capability is a key element of our
growth strategy, cost control must remain
an imperative. There remains some scope
for further efficiency and cost savings.
Accordingly, we will be running a series
of projects to streamline processes and
systems to achieve these benefits during
the year. This is an important part of
delivering our strategy – keeping the
machine working ever more effectively as
we grow and develop the business.
Staff development
As we develop more complex services,
the picture would not be complete
without developing our staff. Expanding
technical skill is one thing, and this has
been part of our investment for many
years. However if we are serious about
world class performance, then a more
systematic approach to career
development is essential – developing
staff with world class skills and careers.
Chief Executive’s Review
Continued
Rolling out new
services with
stronger
margins
Belgium
Although small, Belgium’s IT services market potential is healthy; at
nearly 12% its forecast compound annual growth rate (CAGR) to 2005 is
among the highest in Western Europe. The presence of the European
Commission in Brussels has created a true multi-national culture that attracts
companies from around the globe. Nonetheless, although in Synstar’s
markets there are a large number of niche service providers, very few are
able to provide anything like our total business availability solutions the value
of which has been amply demonstrated by recent wins at Fortis AG and
Novartis. According to recent research the key business drivers for Belgian
customers are software migration and security: these are both areas of
particular Synstar expertise which will become points of focus as we drive
the business forward, but we have already completed some major platform
migrations for Belgacom Mobile and Tessenderlo Chemie.
Dirk Cammermans, Business Service Manager for Belgium flexibility
Customers can construct whatever strategic
IT support they need from Synstar’s
comprehensive service offering  P AGE 13
Chief Executive’s Review
Continued
To address this important issue, we have
begun a programme to create a new
career planning and development
framework that draws from best practice
in use all around the world. This
framework will be fully in place by March
2003, giving our staff much better
ownership of their own personal
development, and give the company a
sound basis upon which to develop the
skills and experience essential for our
expanding business and services.
Breaking the mould of Synstar sales
performance
By any standards, the second half of
2001/2 was an eventful period for Synstar
sales. We have increased our forward
order book from £230m at 31 March 2002
to £319m. In September we signed our
biggest ever contract, a five-year, £120m
maintenance and managed service
agreement with CSC. We also signed our
first ‘total customer’ – Westland
Helicopters now buys every service line
that we sell, under a £21m, six-year
agreement. We now provide virtually all
its infrastructure support.
For the first time, Synstar has a sales
force with the range of support it needs
to take on leading competitors and win.
At Westland, we were on the shortlist
against IBM and EDS. The customer
stated that we were selected because of
our “proven track record, innovative and
flexible approach to resolving business
issues and expertise for delivering high
value business availability services”. At
Avecia, which also signed a multi-year,
multi-service line contract with us in
September, the customer declared,
“Synstar demonstrated considerable
flexibility in the provision of a
comprehensive range of IT services,
which is key to our requirements. We
were also impressed by its wide breadth
of coverage and ability to provide the
services we require directly rather than
engaging third parties”. This is a major
and very welcome change in perception.
I have believed since I arrived that the
major obstacle to achieving this change
in sales performance was the company’s
own belief in itself. After 30 years as a
maintenance company, the mindset
necessarily takes a while to change, but I
can now see widespread evidence of that
change. It is matched by the start of a
change in our customers’ view of us.
Through a range of introductory service
offerings, we are expanding our
customers’ view of our competences;
demonstrating the full range of our
capabilities; building our presence.
During the second half of 2002, this
began to bear fruit in actual sales. Our
current sales pipeline gives me every
confidence that this will continue.
How do we beat the competition? We can
do this in many ways, each important for
different reasons to each customer. 
innovative
and
flexible
approach
Netherlands
Dutch industry is probably one of the most diversified in Europe, providing the
IT community with both niche and broad-based opportunities. Like its fellow
members of the European Union the Netherlands has seen the number of IT-
related projects fall, a trend that has even extended to hardware
maintenance. This decline has prompted changes in the market’s structure
with consolidation of service providers leaving fewer small-scale niche
operators. Synstar itself has been active in this area, developing a new
partnership with Atos Origin and taking over service activities from Comparex
as a subcontractor. With the larger service providers taking the cream of
outsourcing contracts something of a void has opened up in the middle
ground: Synstar is best placed to fill this with a mix of skills and resources
that caters for single service contracts and complete managed service
arrangements alike, both well demonstrated by our excellent wins at the
Dutch police and PSA (Peugeot/Citroen). 
Frank Hoekstra, Business Service Manager for The Netherlands stability
Debt-free, cash generating and with profits growing
strongly, Synstar is as solid as a rock in a turbulent world We have a culture of service – the long-term
delivery of day-to-day quality. We are
close to the customer – understanding
their needs, on-site when we are needed,
flexible and quick to respond to new
requirements or a crisis. This is in contrast to
many of our competitors who are trying to
do things increasingly remotely. And as we
deliver a higher service level, we are well-
placed to bid for management of critical
systems. These factors, combined with a
growing range of well-matched services,
give us a strong competitive position.
A foundation for growth
There are good reasons for the progress
made since the start of last year. We have
been building the foundation for a strategy
that is now well-placed to turn to growth.
Our business has the potential to benefit
from operational gearing – we seek to grow
the top line at around 7%, keep the gross
margin constant (or better) by selling higher
value services, and keep the overhead
costs under control. Taken together, this
yields the benefits from operational
gearing to produce operating margin
improvement and long-term, sustainable
shareholder value. Benefits to date have
come from better control and focus.
Benefits in the future must depend
ultimately on driving the top line.
Synstar’s sales performance this year
shows that a strategy based upon growth
can be achieved, even in the current
climate. We have the customer
relationships, and we are now developing
the long-term higher value services to
match. Our existing business retains all the
stability. Long-term contracts account for
over 70% of our revenue. Now we can
capitalise upon that position with a strong
growth agenda. It is a plan that draws
sensibly on both strong base business and
good prospects for a growing top line. That
is the best defence in the current market.
Summary
We have continued to make excellent
progress with our recovery plan and new
strategy. Our financial results show this
more clearly than anything else. But in
addition to those results there are many
indicators within the behaviour of the
business which show that we have
achieved a major change of direction – the
development of our services, the success of
cross-selling, the quality of our management
team and our ability to win large contracts
in the face of determined competition.
This is success by any definition.
I have said in my previous reviews that
our long-term aim should be world class
performance. At the half year, I said that I
could, for the first time, see clearly the
way to achieve it. I can now say that we
are demonstrating the evidence that
Synstar is on the way to being a world
class IT service provider.
Steve Vaughan
Chief Executive
Chief Executive’s Review
Continued
P AGE 15
world class
IT service
provider
Spain
Although the Spanish IT services market is only about one-sixth as big as the
UK’s, it’s forecast to grow twice as quickly. Most major IT activity is split
between Madrid and Catalonia, the two provinces with the highest
concentration of large companies and public sector agencies. Spain has
always been a user of traditional services and has tended to shy away from
the larger outsourcing deals. Distributed computing (desktop/Unix) is
growing, and this will in turn generate demand for ancillary services such as
hardware support, applications support and networking: all areas in which
Synstar excels as can be seen in the recent contract renewals of two of our
most important customers in Spain; Renault and the state Social Security
system. Although the requirement for distributed computing is strong, Spain
is also waking up to the need for business continuity services, especially BC
consultancy. Naturally, Synstar is seen as a leading light in this area with
some great success stories to tell and we will continue to develop this
market as we move into the future. 
Antonio Pastors, Business Service Manager for Spain performance
Synstar’s life-signs point to a healthy, dynamic future P AGE 17
Order book
350
300
250
200
150
100
£m
Sept Mar Sept Mar Sept Mar Sept
’99 ’00 ’00 ’01 ’01 ’02 ’02
25%
20%
15%
10%
5%
0%
Mar-01 Sept-01 Mar-02 Sept-02
Group ROCE (before tax)
Revenue % by product line
69% Computer Services
5%
Data
Management
5%
Networking
6%
Other
6%
Product
Sales
9%
Business
Continuity
228 231
209
232
219
230
319
All figures exclude discontinued operations (Italy and Switzerland)
Indicators Stephen Gleadle
Group Finance Director Finance Director’s Review
Introduction
he results for the 12 months to 
30 September 2002 demonstrate
the benefits from the changes
implemented following our 2001 strategic
review. 
Overall, revenue fell £16.3m to £221.9m
(2001: £238.2m) reflecting the withdrawal
from unprofitable geographies
(continuing operations grew 1%) and
operating profit before goodwill and
exceptionals has increased 74% to £8.0m
(2001: £4.6m). The net interest charge of
£0.6m in 2001 has been reduced to £nil
and the tax rate has been reduced by 6%
to 32%. Cash generation before financing
has increased by £6.6m to £8.4m.
To better explain these results I have
separately identified below the effect of
disposing of the Italian and Swiss
businesses from the continuing business.
Accordingly, operating profit before
goodwill and exceptionals may be
analysed as in the table below.
Thus £2.2m of the operating profit
increase is attributable to the disposal of
the two loss-making businesses (2001:
loss £2.3m; 2002: loss £0.1m). In addition
to avoiding future cash outflows, the two
disposals together generated a net cash
inflow of some £1.8m.
The commentary below explains the
performance of the continuing business.
Revenue
Revenues from the continuing business
increased by £1.7m to £220.2m. 
Within this our maintenance and desktop
services offerings have been growing
strongly offset by reductions in pure
product sales and the product elements
within our networking and data
management service lines.
The higher margin contractual revenue
was £168.5m (up by £17.0m or 11%) 
and the percentage of total revenue
represented by such long-term contracts
improved to 76% (2001: 69%).
Gross margin
The calculation of gross margin has been
adjusted slightly this year to reflect the
way the business is now organised. As
such, all relationship manager costs are
now charged against gross margin, which
has had the effect of adjusting cost of
sales up in 2001 by £2.6m with an equal
reduction to overhead costs. Sales costs
included under the sales and marketing
heading now relate either to the costs of
generating new sales with new customers
or relate to the general sales support
functions included in our new Centres of
Excellence.
Gross margin for the continuing business
has increased 0.5% to 26.2%. This
reflects margin improvements arising
from a reduced percentage of low margin
product sales in our mix and also cost
savings from the restructuring
programme partially offset by the margin
impact of cost inflation and pricing
pressure on major contract renewals.
P AGE 19
2001 2001 2001 2002 2002 2002 
Published Italy/Continuing Published Continuing 
results Switzerland business results Switzerland business
Revenue 238.2 19.7 218.5 221.9 1.7 220.2
Cost of sales (178.9) (16.5) (162.4) (163.6) (1.1) (162.5)
Gross margin 59.3 3.2 56.1 58.3 0.6 57.7
Sales and 
marketing (14.6) (1.7) (12.9) (12.2) (0.1) (12.1)
Administration 
costs (40.1) (3.8) (36.3) (38.1) (0.6) (37.5)
Operating profit 4.6 (2.3) 6.9 8.0 (0.1) 8.1
T
Adjusted EPS
more than
trebled 
to3
.
4p P AGE 20
Finance Director’s Review
Continued
It should also be noted that during the
year, the renewal of two substantial
contracts included up-front discounts. 
On the basis that these discounts secured
long-term contracts they have been
capitalised and are being written-off over
the life of each contract. At 30 September
2002 the balance of unamortised discount
was £2.1m (30 September 2001: £0.6m),
of which £1.5m is shown in debtors due
after more than one year. 
Operating expenses
Operating expenses of £49.6m have
benefited from tight cost control which
has limited the increase to £0.4m (0.8%). 
Within this increase the business has
made extra investments in training,
marketing, management and the systems
infrastructure and seen the benefits of the
restructuring programme.
Operating profit
Operating profit increased by £1.2m
(15%) to £8.1m, with margins up from 3.2%
to 3.7%.
This increase can be attributed to
computer services £0.7m (9%) and
business continuity £0.4m (22%) with 
the balance a £0.1m improvement in
central costs. 
In terms of the geographical split the UK
improved by £2.0m (27%), partially offset
by a decline in continental Europe of
£0.9m reflecting pricing pressures in
Belgium and a difficult data management
market in Germany. As noted above the
balance was an improvement of £0.1m in
central costs.
Loss on disposal of discontinued
operations
The loss on disposal of discontinued
operations shown in the profit and loss
account 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 £0.4m. The exceptional item
of £1.5m relates to the loss on the sale of
the business and associated costs.  
Interest
As a consequence of the stronger focus
on the generation and management of
cash the net interest cost has fallen from
£0.6m in 2001 to £nil in 2002. 
Taxation
Similarly a more active focus on tax
management alongside the disposals
programme has reduced the tax rate to
32% for 2002 compared to an underlying
rate of 38% in 2001 and 44% in 2000.
It is currently expected that a rate 
around 33% can be held for the next one
to two years, after which the rate should
trend upwards towards a long-term
average for a pan-European business 
of approximately 35% to 36%. 
Earnings per share
Earnings per share have thus benefited
from the combined impact of increasing 
Operating 
profit increased by
74% to
£8m P AGE 21
Finance Director’s Review
Continued
operating profit and reduced interest and
tax payments.
Before exceptional items and the
amortisation of goodwill, EPS has trebled
from 1.1p in 2001 to 3.4p this year.  
Cash flow and net funds
Cash flow from the business remains
strong with £8.4m of cash generated
(before financing) during the year. 
This inflow has been driven by the dual
impact of increased profit and capital
expenditure requirements of £11.5m
being £2.8m less than depreciation. This
lower requirement for capital expenditure
has arisen from the business making better
use of the current asset base, particularly
in the areas of business continuity-related
equipment and repairable spares to support
our maintenance contracts. Capital
expenditure is likely to rise towards
depreciation in future years.
The business was ungeared at 
30 September 2002 with net cash balances
of £16.4m (30 September 2001: £8.0m).
As previously reported, our cash balance
at both 31 March and 30 September is
heavily influenced by the timing of
receipts from some large customers. The
net £nil interest charge indicates that on
average across the 12 months the
business had a small cash surplus.
Return on capital employed
The increase in profitability has driven up
the post-tax return on capital employed
from about 5% in 2001 to 15% in 2002.
With a weighted average cost of capital
(WACC) around 8% the Group is now
value generating.
Share premium account
On 26 April 2002 the cancellation of the
£94,578,000 share premium account was
registered at Companies House. The effect
of this is to increase the distributable
reserves by the same amount.
Summary
Shareholders are now starting to see the
benefits of the previously announced
initiatives:
- operating profit has increased, driven by
selling higher margin services and disposing
of our two non-core loss-making
subsidiaries.
- the improved focus on cash generation
caused the Group to be debt free month by
month and removed the interest charge.
- the disposal programme and a more
active approach to managing our tax
affairs has reduced the tax rate.
Future earnings and margin growth
should now flow from the operational
gearing of our business as we benefit
from cross-selling our service offerings
into our blue-chip customer base and
continue to focus on efficiency savings.
This will be underpinned by Phase 3 of
the strategic review.
Stephen Gleadle
Group Finance Director
Cash flow from the
business
remains
strong The Board of Directors P AGE 23
1. Steve Vaughan (age 42), 
Chief Executive Officer
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.
D
2. John Leighfield CBE (age 64), 
Non-Executive Chairman
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 had established
from its origins in British Leyland and
which was subsequently acquired by
AT&T in 1989.
John is currently chairman of RM plc and
is a director of Minerva Computer
Systems Ltd.
He was awarded the CBE in the 1998
Queen’s Birthday Honours List.
B, C, F , H
3. 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 Price Waterhouse and subsequently
spent 11 years with Mars Group in
various senior financial 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.
4. Mike Ettling (age 38), 
Managing Director UK & Ireland
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 & Publishing, a
media and recruitment company. Mike
Ettling qualified as a chartered
accountant in 1986 and started his career
with KPMG in South Africa.
5. Richard John Piper (age 50), 
Non-Executive Director
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 the finance director of WS Atkins.
He is a member of the urgent issues task
force of the Accounting Standards Board.
A, D, F , G, H
6. Jonathan Feuer (age 40), 
Non-Executive Director
Jonathan Feuer joined the Board of
Synstar in 1997. He is an executive
director of CVC Capital Partners. In his
role as a private equity investor he has
held a number of non-executive
directorships and is the chairman of
Halfords. He joined CVC Capital Partners
Ltd in 1988 having previously worked for
Baring Brothers & Co. Ltd in the corporate
finance department and Ernst & Whinney
where he qualified as a chartered
accountant.
B, D, F
7. John Anthony Osbaldiston (age 50),
Non-Executive Director
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 Car UK Ltd. Until
30 November 2001, Tony was an
executive director of FirstGroup plc and
between 1994 and 1999 was the group
finance director and deputy chief
executive. He was also president of
FirstGroup America in 1999. Tony
received the Scottish finance director of
the year award in 1999.
B, D, E, H
Key
A Chairman of Audit Committee
B Member of Audit Committee
C Chairman of Nominations Committee
D Member of Nominations Committee
E Chairman of Remuneration Committee
F Member of Remuneration Committee
G Senior Independent Non-Executive
Director
H Independent Director
Board of Directors 
Executive and Non-Executive Members
1
2
3
6
7
4
5  P AGE 25
Report of the Directors
The directors present their annual report
together with the financial statements of
the Group and the Company for the year
ended 30 September 2002. These will be
presented to the shareholders at the
annual general meeting.
Business
The Company 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. The Group 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 professionals, the
Group is able to deliver high quality, cost
efficient solutions to its customers. As at
30 September 2002, it employed 2,927
staff.
The chairman’s statement, chief executive’s
review and ﬁnance director’s review
report on the Company’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 13 to the
ﬁnancial statements.
Dividends
Consistent with the intentions described
in the listing particulars, the directors are
not recommending the payment of a
dividend.
Disposals
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 has been
treated as an exceptional item and is
reported in more detail in Note 2 to the
ﬁnancial statements.
As reported last year, on 8 May 2001, the
Group disposed of the share capital of
Synstar Computer Services SpA and its
other Italian subsidiaries to Gruppo ATR Srl
of Brescia, Italy. The sales and losses
associated with these operations are
disclosed as discontinued activities. The loss
on disposal of £4.5m has been 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 page 23.
The executive directors who served
during the year and subsequently are as
follows:
A Coles (resigned 7 March 2002)
M E Ettling (appointed 5 June 2002)
S D Gleadle
S W Vaughan 
The non-executive directors who served
during the year and subsequently are as
follows:
J P Feuer
J P Leighﬁeld (Chairman)
J A Osbaldiston 
R J Piper 
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,
Messrs. M E Ettling and S D Gleadle retire
in accordance with the Articles of
Association and offer themselves for re-
election. Mr J P Feuer retires but does not
offer himself up for re-election.
Details of directors of the Company, their
remuneration and shareholdings are detailed
in Note 5 to the ﬁnancial statements.
Substantial Shareholdings
As at 26 October 2002, the following
shareholders were interested in 3.0% or
more of the issued share capital of the
Company.
Except as noted below, the directors are
not aware of any person as at 26 October
2002 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.
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 Company 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 Company’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.
Name Number Percentage
of Ordinary of Issued
Shares Share
Capital
CVC Capital 
Partners Ltd. 50,133,250 30.85
Aberforth
Partners 11,318,270 6.96
Fidelity 
International Ltd. 11,083,093 6.82
JO Hambro Capital
Management 8,800,000 5.42
Chase Nominees
Limited 5,010,763 3.08
BNY SG
Nominees 4,912,000 3.02 P AGE 26
Report of the Directors
Continued
Employee incentive arrangements include
an executive share option scheme, and a
Sharesave scheme.
Payments to Suppliers
The Company’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
2002, trade creditors of the Group were
equivalent to 38 days (2001: 34 days) and
in the Company nil (2001: nil).
Charitable and Political Donations
The Group made charitable donations of
approximately £7,000 (2001: £5,000)
during the year.
There were no political contributions.
Annual General Meeting
The annual general meeting will be held
on 6 March 2003 at Synstar House, 
1 Bracknell Beeches, Old Bracknell Lane
West, Bracknell, Berkshire RG12 7QX.
Auditors
Having received the formal notice of
resignation of Arthur Andersen as
auditors to the Company on 31 July 2002,
the Board resolved that Deloitte & Touche
be appointed to fill the casual vacancy so
created to serve as auditors until the
annual general meeting. Deloitte &
Touche have expressed their willingness
to continue as the Company’s auditors
and the directors will place a resolution
for the auditors’ appointment at the
forthcoming annual general meeting.
Directors’ Remuneration Policy
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. The Company’s
remuneration policy is detailed in the
report of the Board’s remuneration
committee set out in the remuneration
report on pages 27-28.
Statement of Directors’ Responsibilities
Company law requires the directors to
prepare accounts for each ﬁnancial
period, which give a true and fair view of
the state of affairs of the Company and
the Group at the end of the financial year
and of the proﬁt, or loss for that year. In
preparing those accounts, the directors
are required to:
•
Select suitable accounting policies and 
then apply them consistently;
•
Make judgements and estimates that 
are reasonable and prudent;
•
State whether applicable accounting 
standards have been followed, subject 
to any material departures disclosed 
and explained in the accounts; and,
•
Prepare the accounts on the going 
concern basis unless it is inappropriate 
to presume that the Group will continue
in business.
The directors are responsible for keeping
proper accounting records which disclose
with reasonable accuracy at any time the
ﬁnancial position of the Company and
Group and to enable them to ensure that
the accounts comply with the Companies
Act 1985. They are also responsible for
safeguarding the assets of the Company
and Group and hence for taking
reasonable steps for the prevention and
detection of fraud and other irregularities.
By order of the Board 
S D Gleadle
Secretary
Registered Ofﬁce
Synstar House
1 Bracknell Beeches
Old Bracknell Lane West
Bracknell
Berkshire RG12 7QX P AGE 27
As well as complying with the provisions
of the Code as disclosed in the
Company’s corporate governance
statements, the Board has applied the
Provisions of Good Governance relating
to the directors’ remuneration as
described below.
Introduction
The remuneration committee makes
recommendations to the Board on
executive remuneration within written
terms of reference.
The remuneration committee is
composed entirely of non-executive
directors – J P Leighfield, J P Feuer, 
J A Osbaldiston and R J Piper – and is
chaired by J A Osbaldiston. The
Committee determines the overall
remuneration package for executive
directors and senior management taking
into account independent research
information and advice in order to attract,
motivate and retain high quality
executives capable of achieving the
Company’s objectives and to reward
them for enhancing value to
shareholders. In determining the Group’s
remuneration policy, the remuneration
committee has given full consideration to
the Combined Code.
Full details of the remuneration for the
year ended 30 September 2002 are set
out in Note 5 to the financial statements.
Salary and Other Benefits
Salaries for the executive directors and
senior management are reviewed
annually. Policies concerning other
benefits such as performance bonuses
and other terms and conditions of
employment are also reviewed annually.
Annual Bonus
Executive directors and senior
management participate in an annual
bonus scheme, the terms of which are
agreed in advance by the remuneration
committee. 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,
EPS 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.
Pensions
The Group’s pension arrangements are
described in detail in Note 26.
All payments by the Group are to a
defined contribution pension scheme or
to an executive plan, other than as
detailed in Note 26.
Service Contracts
The executive directors have service
contracts that can be terminated by the
Company with a notice period of 
12 months and by the director with a
notice period of six months. 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.
Remuneration of Non-Executive
Directors
Non-executive directors’ fees are
determined by the Board on the basis of
independent advice on current levels in
similar businesses. Each non-executive
director withdraws from the remuneration
committee in respect of matters relating
to his own position. Non-executive
directors are not eligible for pensions,
incentives or any similar payments other
than out-of-pocket expenses in connection
with the performance of their duties.
Share Schemes
The remuneration committee is also
responsible for ensuring proper formulation
and operation of any share 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 normally exercisable only after
they have been held for three years and if
challenging EPS performance criteria are
achieved. 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 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 holds options granted under all
company share plans (except savings
related share option schemes) exceeds
four times his annual remuneration.
Upon his appointment as Managing
Director – UK and Ireland, Mike Ettling
was granted options on 500,000 ordinary
shares at an exercise price of 51.0 pence,
being the market value at the date of
grant, 4 July 2002. Stephen Gleadle was
granted options on 200,000 ordinary
shares at an exercise price of 49.0 pence,
being the market value at the date of
grant, 16 September 2002. The options
are not subject to performance criteria,
but can only vest after a three- to five-
year period, at the earliest.
UK Sharesave Scheme
The Synstar 1999 Sharesave scheme was
adopted by the Board on 10 February 1999
and approved by the Inland Revenue on 
5 March 1999. The offer made in February
2001 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
Remuneration Report P AGE 28
Remuneration Report
Continued
800,000 shares for this purpose. No
performance criteria are attached to these
options.
No executive directors have participated
in the UK Sharesave scheme.
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 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.
No executive directors have participated
in the international Sharesave scheme.
J A Osbaldiston
Chairman
Remuneration Committee
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.
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.
•
Monitor our performance against the 
objectives and targets set and review 
these on a continual basis.
In anticipation of the forthcoming WEEE
(Waste, Electronic & Electric Equipment)
directive, Synstar has contracted a
specialist organization to process its
redundant IT assets and accessories in a
manner that maximises re-use (through
re-sale) and recycling and minimises
landfill via an ISO 14001 process.
Environmental Policy Statement P AGE 29
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 Company.
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 Combined Code appended
to the Listing Rules of the Financial
Services Authority.
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. With reference to
directors’ remuneration, further details
can be found in the remuneration report.
COMMITTEES OF THE BOARD
Board of Directors
The Company is managed by the Board
of Directors, which comprises three
executive directors and four non-
executive directors. R J Piper is the senior
non-executive director for the requirements
of provision A.2.1 of the Combined Code.
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. This includes reviewing long-
term plans, business performance and
other corporate matters. The Board of
Directors approves the Group's annual
budget, and any significant variations
from that budget are discussed and
appropriate action taken. The non-
executive directors have a particular
responsibility to ensure that strategies
proposed by the executive directors are
discussed and examined fully, not only
against the long-term interests of
shareholders, but also to ensure that they
take proper account of the interests of
employees, customers and suppliers.
There is an agreed procedure for directors
to obtain independent professional advice.
The Board meets each month to review
results to date, and to expedite the Group's
business. It has a formal schedule of
matters for its regular consideration, and
it delegates certain other responsibilities
to the following committees:
Group Operations Board
The Operations Board is responsible for the
management of the business. It is chaired
by the chief executive, and comprises the
other executive directors, the strategy
director, strategic accounts director,
human resources director, the managing
director of mainland Europe, and the
heads of the five ‘Centres of Excellence’. 
Audit Committee
The Audit Committee is responsible for
the following matters:
•
Making recommendations to the Board
on the appointment and remuneration 
of the external auditors. 
•
Reviewing the conduct and control of 
the annual audit and overseeing the 
operation of proper internal controls.
•
Receiving and reviewing regular reports
from the risk management department.
•
Reviewing the measurement and 
reporting of the financial performance of
the Group. 
•
Reviewing the financial statements 
before recommendation to the Board. 
The Audit Committee is chaired by 
R J Piper, and comprises the four non-
executive directors. It meets four times
per year. There is a provision for non-
executive directors to meet with the
auditors without the executives present.
Nominations Committee
The Nominations Committee comprises
the chairman, the chief executive and the
non-executive directors. It is responsible
for the nomination for Board approval of
candidates for Board appointment.
Remuneration Committee
See pages 27-28.
Internal Control
The Combined Code requires that
directors review the effectiveness of the
Group's system of internal controls. This
requirement extends the directors' review
to cover all controls including operational,
compliance and risk management, as well
as financial. 
The directors confirm their responsibility
for review of the system of internal
control, and that they have reviewed its
effectiveness during the year.
The system of internal control is designed
to provide reasonable but not absolute
assurance.
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 and 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 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.
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
Corporate Governance P AGE 30
Corporate Governance
Continued
social responsibility across the UK and
overseas, taking into account such
considerations as fairness and
responsibility towards the welfare and
safety of:
•
our employees;
•
our suppliers and their employees; and,
•
the communities and environments in 
which we conduct our business. 
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. 
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 approved by the Board. The
business is broken down into component
parts and the results of these are
reported monthly and compared to the
budget. Forecast updates are prepared
monthly, with full rolling 12-month
forecasts prepared every quarter. 
The Company 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.
Changes in the value of net contract
business is a principal performance
indicator monitored by the Board. 
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
Company ‘intranet’. Compliance with
these policies and procedures is
monitored on a regular basis. 
Control over Treasury
The Group employs a tax and treasury
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 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 has recently set
up a "Euro-cash pool" in order to optimise
the management of non-sterling cash.
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.
The head of risk management submits a
quarterly report to the Audit Committee,
summarising work completed within the
period. He presents his findings to the
Audit Committee, together with the areas
on which he will focus in the forthcoming
months. Copies of the reports are
circulated to all senior managers. 
There is also a provision giving the head
of risk management unrestricted access 
to the non-executive directors, should
this be deemed necessary. 
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 question the Board at the annual
general meeting, and the Company
responds to numerous enquiries from
individual shareholders throughout 
the year. P AGE 31
Independent Auditors’ Report 
to the Members of Synstar plc
We have audited the financial statements
of Synstar plc for the year ended 
30 September 2002 which comprise the
consolidated profit and loss account, 
the balance sheets, the consolidated cash
flow statement, the statement of total
recognised gains and losses, the
statement of accounting policies and the
related notes 1 to 27. These financial
statements have been prepared under the
accounting policies set out therein.
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. Our responsibility
is to audit the financial statements in
accordance with relevant United Kingdom
legal and regulatory requirements,
auditing standards, and the Listing Rules
of the Financial Services Authority.
We report to you our opinion as to
whether the financial statements give a
true and fair view and are properly
prepared in accordance with the
Companies Act 1985. We also report 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 or the Listing Rules
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 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 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.
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
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.
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 2002 and of the profit of
the Group for the year then ended and
have been properly prepared in
accordance with the Companies Act 1985.
An audit does not provide assurance on
the maintenance and integrity of the
website, including controls used to
achieve this, and in particular on whether
any changes may have occurred to the
financial statements since first published.
These matters are the responsibility of
the directors but no control procedures
can provide absolute assurance in this
area. Legislation in the United Kingdom
governing the preparation and
dissemination of financial statements
differs from legislation in other
jurisdictions.
Deloitte & Touche
Chartered Accountants and 
Registered Auditors
Birmingham
26 November 2002 Consolidated Profit and Loss Account
For the year ended 30 September 2002
Before Exceptional Before Exceptional
exceptional items exceptional items Reclassified
items (Note 2) Total items (Note 2) (Note 10)
2002 2002 2002 2001 2001 2001
Notes £’000 £’000 £’000 £’000 £’000 £’000
Turnover
Continuing operations 220,150 – 220,150 218,463 – 218,463
Discontinued operations 1,720 – 1,720 19,735 – 19,735
Total turnover 1 221,870 – 221,870 238,198 – 238,198
Cost of sales (163,558) – (163,558) (178,874) (2,533) (181,407)
Gross profit 58,312 – 58,312 59,324 (2,533) 56,791
Selling and marketing costs (12,188) – (12,188) (14,595) – (14,595)
Administration expenses (38,116) – (38,116) (40,484) (17,898) (58,382)
Operating profit (loss) before goodwill
Continuing operations 8,148 – 8,148 6,877 (8,117) (1,240)
Discontinued operations (140) – (140) (2,272) (421) (2,693)
Operating profit (loss) before goodwill amortisation 8,008 – 8,008 4,605 (8,538) (3,933)
Goodwill amortisation – – – (360) – (360)
Goodwill impairment – – – – (11,893) (11,893)
Operating profit (loss)
Continuing operations 8,148 – 8,148 6,577 (18,972) (12,395) 
Discontinued operations (140) – (140) (2,332) (1,459) (3,791)
Total operating profit (loss) 1 8,008 – 8,008 4,245 (20,431) (16,186)
Loss on disposal of discontinued operations 2 – (1,493) (1,493) – (4,514) (4,514)
Profit (loss) on ordinary activities before interest 8,008 (1,493) 6,515 4,245 (24,945) (20,700)
Interest receivable and similar income 6 235 – 235 225 – 225
Interest payable and similar charges 7 (218) – (218) (821) – (821)
Profit (loss) on ordinary activities before taxation 3 8,025 (1,493) 6,532 3,649 (24,945) (21,296)
Tax on profit on ordinary activities 8 (2,563) (2,563) (2,272) 1,193 (1,079)
Profit (loss) for the financial year 19 5,462 (1,493) 3,969 1,377 (23,752) (22,375)
Earnings (loss) per share 9
Adjusted basic 3.4p 1.1p 
Basic 2.4p (13.8p)
Diluted 2.4p (13.8p)
Adjusted basic earnings per share has been calculated before exceptional items, net of taxation and goodwill amortisation.
The accompanying notes and statement of accounting policies are an integral part of this consolidated profit and loss account.
P AGE 32 Consolidated Statement of Total Recognised Gains and Losses
For the year ended 30 September 2002
2002 2001
£’000 £’000
Profit (loss) for the financial year 3,969 (22,375)
Currency translation differences on foreign
currency net investments (81) (221)
Total recognised profits (losses) relating to the year and since the
last annual report and accounts 3,888 (22,596)
The accompanying notes and statement of accounting policies are an integral part of this consolidated statement of total recognised
gains and losses.
P AGE 33 Consolidated Balance Sheet
30 September 2002
2002 2001
Notes £’000 £’000
Fixed assets
Intangible assets 11 – –
Tangible assets 12 33,646 36,910
33,646 36,910
Current assets
Stocks 14 1,950 2,988
Debtors - amounts falling due within one year 15 51,432 48,158
Debtors - amounts falling due after one year 15 1,973 –
Cash at bank and in hand 24 17,431 12,993
72,786 64,139
Creditors: Amounts falling due within one year 16 (67,745) (66,250)
Net current assets (liabilities) 5,041 (2,111)
Total assets less current liabilities 38,687 34,799
Net assets 38,687 34,799
Capital and reserves
Called-up share capital 18 1,625 1,625
Share premium account 19 – 94,578
Profit and loss account 19 37,062 (61,404)
Total shareholders’ funds – all equity 20 38,687 34,799
The accounts were approved by the board of directors on 26 November 2002 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.
P AGE 34 2002 2001
Notes £’000 £’000
Fixed assets
Investments 13 – –
Current assets
Debtors  15 32,770 102,770
Net assets 32,770 102,770
Capital and reserves
Called-up share capital 18 1,625 1,625
Share premium account 19 – 94,578
Profit and loss account 19 31,145 6,567
Total shareholders’ funds - all equity 32,770 102,770
The accounts were approved by the board of directors on 26 November 2002 and signed on its behalf by:
S W Vaughan Chief Executive
S D Gleadle Group Finance Director
The accompanying notes and statement of accounting polices are an integral part of this Company balance sheet.
2002 2001
Notes £’000 £’000
Net cash inflow from operating activities 21 21,441 14,711
Returns on investments and servicing of finance 22 17 (596)
Taxation 22 (977) (3,233)
Capital expenditure 22 (11,511) (11,459)
Disposals 22 (546) 2,338
Net cash inflow before financing 8,424 1,761
Financing 22 (954) (1,368)
Increase in cash in the year 24 7,470 393
The accompanying notes are an integral part of this consolidated cash flow statement.
Company Balance Sheet
30 September 2002
Consolidated Cash Flow Statement
For the year ended 30 September 2002
P AGE 35 Statement of Accounting Policies
30 September 2002
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 2002.
As provided by Section 230 of the Companies Act 1985, no profit and loss account is presented in respect of the Company. The loss
in the year dealt with in the accounts of the Company was £70,000,000 (2001 - profit £883,000). The loss in the 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
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 (2001; £39,836,000).
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.
P AGE 36 Statement of Accounting Policies
30 September 2002
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 reserves. The difference 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.
P AGE 37 Notes to the Accounts
30 September 2002
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.
Continuing Discontinued Exceptional Total Continuing Discontinued Exceptional Total
2002 2002 2002 2002 2001 2001 2001 2001
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
1a) Turnover by Destination
UK 142,659 – – 142,659 141,284 – – 141,284
France 16,967–– 16,967 16,377 – – 16,377
Germany 26,744–– 26,744 27,400 – – 27,400
Switzerland –1,720– 1,720 – 5,988 – 5,988
Italy –––– –13,747–13,747
Rest of Europe 33,780 – – 33,780 33,402 – – 33,402
220,150 1,720 – 221,870 218,463 19,735 – 238,198
1b) Class of business
Turnover
Computer Services 200,564 1,720 – 202,284 199,199 19,735 – 218,934
Business Continuity 19,586 – – 19,586 19,264 – – 19,264
220,150 1,720 – 221,870 218,463 19,735 – 238,198
Operating Profit
Computer Services 8,627 (140) – 8,487 7,572 (2,332) (6,610) (1,370)
Business Continuity 2,441 – – 2,441 2,005 – (697) 1,308
Central Expenditure (2,920) – – (2,920) (3,000) – (13,124) (16,124)
8,148 (140) – 8,008 6,557 (2,332) (20,431) (16,186)
Net Assets
Computer Services 24,973 26,986
Business Continuity 2,919 3,966
Unallocated 10,795 3,847
38,687 34,799
1c) Geographical segment
Turnover
UK 142,467 – – 142,467 141,179 – – 141,179
Rest of Europe 77,683 1,720 – 79,403 77,284 19,735 – 97,019
220,150 1,720 – 221,870 218,463 19,735 – 238,198
Operating Profit
UK 9,490 – – 9,490 7,119 – (1,519) 5,600
Rest of Europe 1,578 (140) – 1,438 2,458 (2,332) (5,788) (5,662)
Central Expenditure (2,920) – – (2,920) (3,000) – (13,124) (16,124)
8,148 (140) – 8,008 6,577 (2,332) (20,431) (16,186)
P AGE 38 Notes to the Accounts
30 September 2002
1. Segmental analysis (continued)
Total Total
2002 2001
£’000 £’000
Net Assets
UK 20,698 21,392
Rest of Europe 7,194 9,560
Unallocated 10,795 3,847
38,687 34,799
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 includes cost of sales of £1,160,000 (year ended 
30 September 2001 – £4,649,000), gross profit of £560,000 (year ended 30 September 2001 – £1,339,000), sales and marketing costs
of £149,000 (year ended 30 September 2001 – £632,000) and administration expenses of £551,000 (year ended 30 September 2001 –
£3,263,000 (including goodwill of £1,065,000, and exceptional items of £421,000)).
In relation to the discontinued operations in Italy, the profit and loss comparatives include cost of sales in the year ended 
30 September 2001 of £11,889,000, gross profit of £1,858,000, sales and marketing costs of £1,121,000 and administration expenses
of £1,972,000.
2. Exceptional items
2002 2001
£’000 £’000
Restructuring – 2,533
Total operating items charged to cost of sales – 2,533
Restructuring – 6,005
Impairment of goodwill – 11,893
Total operating items charged to administration expenses – 17,898
Total operating exceptional items – 20,431
Loss on disposal of discontinued operations 1,493 4,514
Total exceptional items before tax 1,493 24,945
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 relates to the loss on the sale of the business and associated
costs. The results of the Swiss subsidiary have been disclosed as discontinued activities. The tax effect is £nil.
In 2001, the group undertook a strategic review, which led to a restructuring programme to enable the group to respond faster and more
creatively to the needs of customers. This restructuring programme involved both a redundancy and new hiring programme, resulting
in a charge for the year of £8.5m, which was considered exceptional to the Group's main activities. The tax effect of the restructuring
charge was a credit of £1.2m.
During 2001, an impairment review was conducted of the carrying value of goodwill within the Group. Consequently there was an
exceptional write down in goodwill of £10.4m held in relation to the Lancare subsidiary. In addition, due to the trading performance in
Switzerland and Luxemburg a full write down of the £1m goodwill on CT Consulting AG and £0.5m on Tecsys was also made.
Therefore the total exceptional write down of goodwill in the period was £11.9m. The tax effect was £nil.
P AGE 39 Notes to the Accounts
30 September 2002
2. Exceptional items (continued)
On 8 May 2001, the Group disposed of the share capital of Synstar Computer Services SpA (SCS SpA) and its other Italian
subsidiaries to Gruppo ATR Srl of Brescia, Italy. This resulted in an exceptional loss on disposal of £4.5m. The results of the Italian
subsidiaries have been disclosed as discontinued activities. The tax effect was £nil.
3. Profit (loss) on ordinary activities before taxation
Profit (loss) on ordinary activities before taxation is stated after charging:
2002 2001
£’000 £’000
Depreciation of owned tangible fixed assets 14,302 15,104
Amortisation of goodwill – 360
Impairment of goodwill – 11,893
Operating lease rentals
– land and buildings 3,952 3,649
– other 6,439 5,831
Auditors’ remuneration
– audit services (Arthur Andersen) 34 244
– audit services (Deloitte & Touche) 193 –
– non-audit services (Arthur Andersen) 183 243
– non-audit services (Deloitte & Touche) 119 –
4. Staff costs
The average monthly number of employees (including executive directors) was:
2002 2001
Number Number
Computer Services 2,856 2,981
Business Continuity 105 83
Central 37 16
2,998 3,080
Their aggregate remuneration comprised:
2002 2001
£’000 £’000
Wages and salaries 76,583 76,506
Social security costs 12,048 12,168
Pension costs 2,294 2,139
Other staff costs 1,820 1,180
92,745 91,993
P AGE 40 Notes to the Accounts
30 September 2002
5. Directors’ remuneration, interests and transactions
Aggregate remuneration of the directors was as follows:
2002 2001
£’000 £’000
Emoluments 901 916
Company contributions to money purchase pension schemes 106 102
1,007 1,018
Directors’ emoluments: 
Basic Benefits Annual Total Total
salary/fees in kind bonuses 2002 2001 
£’000 £’000 £’000 £’000 £’000 
Executive directors
S K Bolton (to 21 November 2000) – – – – 24
A Coles (to 7 March 2002) 127 8 – 135 131
M E Ettling (from 5 June 2002) 58 – 10 68 –
R W Ferré (to 30 September 2001) – – – – 226
S D Gleadle 174 4 40 218 189
S W Vaughan 272 4 95 371 239
Non-executive directors
J P Feuer 20 – – 20 20
J P Leighfield 45 – – 45 43
J A Osbaldiston 22 – – 22 22
R Piper 22 – – 22 22
740 16 145 901 916
In addition to the above, S D 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
Four directors are members of money purchase schemes (2001 - five).
Contributions paid by the company in respect of directors were as follows:  
2002 2001
£’000 £’000
S K Bolton (to 21 November 2000) – 5  
A Coles (to 7 March 2002) 16 17
M E Ettling (from 5 June 2002) 6 – 
R W Ferré (to 30 September 2001) – 22 
S D Gleadle 17 17  
S W Vaughan 67 41
106 102 
P AGE 41 Notes to the Accounts
30 September 2002
5. Directors’ remuneration, interests and transactions (continued)
Directors’ share options
Aggregate emoluments disclosed above do not include any amounts for the value of options to acquire ordinary shares in the
company granted to or held by the directors. Details of options held by directors are as follows:
Date Number Number Exercise
granted 2002 2001 price Exercise period 
M E Ettling 04/07/02 500,000 – £0.510 04/07/2005 to 03/07/2012
S D Gleadle 07/01/00 100,000 100,000 £2.275 07/01/2003 to 06/01/2010
S D Gleadle 18/07/00 100,000 100,000 £0.735 18/07/2003 to 17/07/2010
S D Gleadle 16/09/02 200,000 – £0.490 16/09/2005 to 15/09/2012
S W Vaughan 03/01/01 1,360,000 1,360,000 £0.485 03/01/2004 to 02/01/2011
No options were exercised during the year.
Exercise of options, granted prior to 2001, is subject to the company’s EPS increasing on an annual basis over any three-year 
period between the grant and exercise of an option by 13% above the rate of inflation. The market price of the ordinary shares at
30 September 2002 was £0.58 and the range during the year was £0.435 to £0.79.
Directors’ interests
As at 30 September 2002 the directors had interests in the share capital of the Company as follows:
2002 2001
Number Number
J P Feuer 415,000 415,000
S D Gleadle 85,000 60,000 
J P Leighfield 375,000 375,000
J A Osbaldiston 7,000 7,000
882,000 857,000
There have been no movements in Directors’ interests since the year-end.
6. Interest receivable and similar income
2002 2001
£’000 £’000
Bank interest 235 225
7. Interest payable and similar charges
2002 2001
£’000 £’000
Bank loans and overdrafts 183 627
Other loans 35 194
218 821
P AGE 42 Notes to the Accounts
30 September 2002
8. Tax on profit (loss) on ordinary activities
The tax charge is based on the profit (loss) for the year and comprises:
2002 2001
£’000 £’000
UK corporation tax at 30% (2001 – 30%)
– Continuing operations 1,853 –
Overseas taxation
– Continuing operations 1,236 1,187
– Discontinued operations – 162
Adjustment in respect of prior year – overseas taxation (continuing operations) (24) (270)
Group current tax charge for year 3,065 1,079
Deferred Taxation (502) –
2,563 1,079
The tax charge for 2001 includes a tax credit in respect of exceptional items of £1,193,000.
Deferred taxation recognised as follows:
2002 2001
£’000 £’000
Deferred Tax - accelerated depreciation (502) –
Deferred taxation not recognised is as follows:
2002 2001
£’000 £’000
Other timing differences (2,980) (3,770)
A substantial part of the above balance relates to tax losses in countries which have not made taxable profits in recent years.
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:
2002 2001
£’000 £’000
Group profit (loss) on ordinary activities before tax 6,532 (21,296)
T ax on Group profit (loss) on ordinary activities at standard UK corporation tax rate of 30% (2001 – 30%) 1,960 (6,389)
Effects of:
Expenses not deductible for tax purposes 302 7,160
Depreciation in excess of capital allowances  502 263
Higher tax rates on overseas earnings 325 315
Adjustments to tax charge in respect of previous periods (24) (270)
Group current tax charge for year 3,065 1,079
The expenses not deductible for tax purposes principally consist of the loss on disposal of discontinued operations. 
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 and Germany are
taxed at a higher rate.
P AGE 43 Notes to the Accounts
30 September 2002
9. Earnings (loss) per share
Basic earnings profit (loss) per share is calculated in accordance with FRS14 Earnings per Share, based on profits after tax of
£3,969,000 (2001 – £22,375,000 loss) and 162,500,000 (2001 – 162,500,000) ordinary shares, being the weighted average in issue
during the year.
Fully diluted earnings profit (loss) 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 162,977,000 (2001 – 162,500,000).
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:
2002 2001
£’000 £’000
Profit (loss) for the year for basic earnings per share 3,969 (22,375)
Exceptional items 1,493 24,945
Tax credit on exceptional items  – (1,193)
Amortisation of goodwill – 360
Profit for the year for adjusted basic earnings per share 5,462 1,737
Weighted average number of shares in issue:
2002 2001
Number Number
’000 ’000
For basic earnings per share 162,500 162,500
Exercise of options 477 –
For fully diluted earnings per share 162,977 162,500
10. Reclassification of prior year costs
The directors have reviewed the classification of costs between costs of sales and operating expenses in connection with the
restructuring of the Group carried out in 2001. The comparative figues have been reclassified to ensure consistent presentation. 
The impact of this restatement is to reclassify £2,625,000 of costs from overheads to cost of sales for the period to 30 September 2001.
P AGE 44 Notes to the Accounts
30 September 2002
11. Intangible fixed assets – goodwill
£’000
Group
Cost
At 1 October 2001 and 30 September 2002 12,922
Amortisation
At 1 October 2001 and 30 September 2002 12,992
Net book value
At 1 October 2001 and 30 September 2002 –
12. 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 2001 2,061 67,742 37,735 107,538
Additions – 9,696 2,007 11,703
Disposals – (25,380) (757) (26,137)
Transfers –1,064(1,064) –
Translation differences 11 293 9 313
At 30 September 2002 2,072 53,415 37,930 93,417
Depreciation
At 1 October 2001 1,403 45,032 24,193 70,628
Charge for year 105 10,348 3,849 14,302
Disposals –(24,859)(594) (25,453)
Transfers –709(709) –
Translation differences 2 248 44 294
At 30 September 2002 1,510 31,478 26,783 59,771
Net book value
At 1 October 2001 658 22,710 13,542 36,910
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.
P AGE 45 Notes to the Accounts
30 September 2002
13. Investment in subsidiary undertakings
2002 2001
£ £
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 Holdings 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
DPCE (Nederland) BV Netherlands Computer services
Synstar Computer Services 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 Computer Services NV Belgium Computer services
Synstar Computer Services SA Spain Computer services
*Held directly by Synstar plc
14. Stocks
2002 2001
£’000 £’000
Group
Goods held for resale 736 1,343
Consumable spares 1,214 1,645
1,950 2,988
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.
P AGE 46 Notes to the Accounts
30 September 2002
15. Debtors
2002 2001
£’000 £’000
Group
Amounts falling due within one year:
Trade debtors 46,183 43,415
Other debtors 3,787 3,216
Prepayments 1,462 1,527
51,432 48,158
Amounts falling due within one year:
Deferred tax 502 –
Other debtors 1,471 –
1,973 –
Company
Amounts falling due within one year:
Other debtors – 883
Amounts falling due after one year:
Amounts owed by Group undertakings 32,770 101,887
16. Creditors: Amounts falling due within one year
2002 2001
£’000 £’000
Group
Bank loans and overdrafts (unsecured) 992 4,975
Trade creditors 12,678 13,012
Corporation tax 3,112 1,034
Other creditors 12,794 13,334
Taxation and social security 4,615 4,336
Accruals and deferred income 33,554 29,559
67,745 66,250
Borrowings are repayable as follows:
2002 2001
£’000 £’000
Bank loans: Amounts falling due within one year 814 1,738
Overdrafts 178 3,237
Total borrowings 992 4,975
Details of loans are disclosed in Note 18.
P AGE 47 Notes to the Accounts
30 September 2002
17. 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.
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. The currency profile on these assets is as follows:
2002 Euro Swiss
Sterling currencies francs Total
£’000 £’000 £’000 £’000
Cash and deposits 10,905 6,478 48 17,431
2001 Euro Swiss
Sterling currencies francs Total
£’000 £’000 £’000 £’000
Cash and deposits 8,422 4,363 208 12,993
Financial liabilities
The interest rate profile of the Group’s financial liabilities at 30 September 2002 was:
Euro Swiss
Sterling currencies francs Total
£’000 £’000 £’000 £’000
Bank loans and overdrafts – 992 – 992
Floating rate – 992 – 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.
The interest rate profile at 30 September 2001 for comparison purposes was as follows:
Euro Swiss
Sterling currencies francs Total
£’000 £’000 £’000 £’000
Bank loans and overdrafts 356 3,449 1,170 4,975
Floating rate 356 3,449 1,170 4,975
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.
P AGE 48 Notes to the Accounts
30 September 2002
17. 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 2002,
was as follows:
2002 2001
£’000 £’000
In one year or less 992 4,975
Borrowing facilities
The Group had undrawn committed borrowing facilities at 30 September 2002, in respect of which all conditions precedent had been met,
as follows:
2002 2001
£’000 £’000
Expiring in more than two years but not more than 5 years 14,186 10,446
The Group has a £15,000,000 (2001 - Euro 25,000,000) 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 2002, £813,927 (2001 – £1,762,678) was being utilised for short-term loans. None of the facility was being utilised for
bank overdraft and performance guarantees (2001 – £3,254,213).
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.
P AGE 49 Notes to the Accounts
30 September 2002
18. Called-up share capital
2002 2001
£’000 £’000
Authorised
216,666,666 ordinary shares of 1p each (2001 – 216,666,666) 2,167 2,167
Allotted, called-up and fully paid
162,500,000 ordinary shares of 1p each (2001 – 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 2002 2001
Year of grant price period Numbers Numbers
1999 128.5 p 2002-2009 1,340,000 1,340,000
1999 103.6 p n/a 1,000,000 1,000,000
2000 227.5 p 2003-2010 100,000 100,000
2000 73.5 p 2003-2010 280,000 280,000
2000 193.0 p n/a 501,190 501,190
2001 48.5 p  2004-2011 1,360,000 1,360,000
2001 50.4 p n/a 1,200,000 1,200,000
2002 51p 2005-2012 500,000 –
2002 49p 2005-2012 200,000 –
19. Reserves 
Share
premium Profit and 
account loss account Total
Group £’000 £’000 £’000
At 1 October 2001 94,578 (61,404) 33,174
Profit for the year – 3,969 3,969
Cancellation of Share Premium Account (94,578) 94,578 –
Exchange differences –(81) (81)
At 30 September 2002 – 37,062 37,062
Share premium Profit and loss
account account Total
Company £’000 £’000 £’000
At 1 October 2001 94,578 6,567  101,145
Loss for the year – (70,000) (70,000)
Cancellation of Share Premium Account (94,578) 94,578 –
At 30 September 2002 – 31,145 31,145
On 26 April 2002, the cancellation of the £94,578,000 share premium account was registered at Companies House. The effect of this
was to credit the P&L distributable reserves with the full amount of the cancellation.
P AGE 50 Notes to the Accounts
30 September 2002
19. Reserves (continued)
Pension Reserves - Group
Total
£’000
Profit and loss reserve excluding pension asset (liability) 37,062
Amount relating to defined benefit pension schemes asset,
net of related deferred tax (633)
Profit and loss reserve 36,429
20. Reconciliation of movements in Group shareholders’ funds
2002 2001
£’000 £’000
Profit (loss) for the financial year 3,969 (22,375)
Currency translation differences (81) (221)
Net addition (reduction) to shareholders’ funds 3,888 (22,596)
Opening Group shareholders’ funds 34,799 57,395
Closing Group shareholders’ funds 38,687 34,799
21. Reconciliation of operating profit (loss) to net cash inflow from operating activities
2002 2001
£’000 £’000
Operating profit (loss) 8,008 (16,186)
Depreciation charges 14,302 15,104
Goodwill amortisation and impairment – 12,253
Decrease in stocks 919 982
(Increase) decrease in debtors (4,343) 1,629
Increase in creditors 2,555 929
21,441 14,711
22. Analysis of cash flows
2002 2001
£’000 £’000
Returns on investments and servicing of finance
Interest paid (218) (821)
Interest received 235 225
Net cash outflow from returns on investments and servicing of finance 17 (596)
Taxation
Net tax paid (977) (3,233)
Capital expenditure
Purchase of tangible fixed assets (11,703) (11,459)
Sale of tangible fixed assets 192 –
(11,511) (11,459)
P AGE 51 Notes to the Accounts
30 September 2002
22. Analysis of cash flows (continued)
2002 2001
£’000 £’000
Disposals
Net debt balances disposed – 2,192
Disposal consideration 324 256
Disposal costs paid (870) (110)
(546) 2,338
Financing
Repayment of loans (954) (1,368)
23. Analysis of net funds
Cash at
bank Overdraft Loans Total
£’000 £’000 £’000 £’000
Balance at 1 October 2001 12,993 (3,237) (1,738) 8,018
Cash flows during year 4,411 3,059 954 8,424
Foreign exchange 27 – (30) (3)
Balance at 30 September 2002 17,431 (178) (814) 16,439
24. Reconciliation of net cash flow to movement in net funds
2002 2001
£’000 £’000
Net increase in cash during the year 7,470 393
Cash outflow from decrease in debt 954 1,368
Foreign currency and other changes (3) 119
Movement in net funds in year 8,421 1,880
Net funds at beginning of year 8,018 6,138
Net funds at end of year 16,439 8,018
P AGE 52 Notes to the Accounts
30 September 2002
25. Guarantees and other financial commitments
a) Capital commitments
At the end of the year capital commitments were:
2002 2001
£’000 £’000
Group
Contracted but not provided for 316 990
b) Operating leases
Annual commitments under non-cancellable operating leases are as follows:
Land and Other Land and Other
buildings equipment buildings equipment
2002 2002 2001 2001
£’000 £’000 £’000 £’000
Group
Expiry date
– within one year 166 1,605 657 2,030
– between two and five years 1,423 4,220 1,182 4,315
– after five years 2,182 – 1,902 –
3,771 5,825 3,741 6,345
c) Guarantees
The Group gives performance-based guarantees on certain large contracts with customers in the normal course of business.
As at 30 September 2002, guarantees outstanding amounted to £1,130,000 (2001 – £1,844,000).
26. 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 match 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 2002 was £204,645 (2001 – £190,544).
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 £2,294,000 comprises a charge of £2,044,000 on defined contribution schemes and
£250,000 on defined benefit schemes.
P AGE 53 Notes to the Accounts
30 September 2002
26. Pensions (continued)
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 1999 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-term funding rate was estimated to be 10.4% 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 1999 the scheme was 111% funded.
The major assumptions used for the actuarial valuation were:
%
Rate of increase in salaries 6.0
Discount rate 6.0
Inflation assumption 4.0
Additional disclosures regarding this defined benefit pension scheme are required under the transitional provisions of FRS 17
“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 FRS 17.
The actuarial valuation described above has been updated at 30 September 2002 by a qualified actuary using revised assumptions
that are consistent with the requirements of FRS 17. Investments have been valued, for this purpose, at fair value.
The major assumptions used for the actuarial valuation were:
2002 2001
% %
Rate of increase in salaries 3.0 4.0
Rate of increase in pensions in payment 3.0 3.0
Discount rate 5.5 6.0
Inflation assumption 2.3 2.3
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:
2002 2002 2001 2001
% £’000 %£’000
Equities 8.0 654 8.5 823
Bonds 5.0 257 5.5 279
Other 6.5 116 7.0 156
Total fair value of assets 1,027 1,258
Present value of scheme liabilities (647) (560)
Surplus in the scheme 380 698
Related deferred tax liability (114) (209)
Net pension asset 266 489
The contribution rate for 2001 and 2002 was 10.4% of pensionable earnings and the agreed contribution rate for the next year is
10.4% of pensionable earnings.
P AGE 54 Notes to the Accounts
30 September 2002
26. Pensions (continued)
Analysis of the amount that would have been charged to operating profit under FRS 17
2002
£’000
Current service cost 52
Past service cost –
Gain (loss) on settlements and curtailments –
52
Analysis of the amount that would have been credited to net finance income under FRS 17
2002
£’000
Expected return on pension scheme assets 100
Interest on pension scheme liabilities (32)
68
Analysis of the actuarial gain that would have been recognised in the statement of total recognised gains and losses
2002
£’000
Actual return less expected return on pension scheme assets (441)
Experience gains and losses arising on the scheme liabilities 4
Changes in assumptions underlying the present value of the scheme liabilities 103
(334)
History of experience gains and losses
Difference between the expected and actual return on scheme assets:
2002
Amount (£’000) (441)
Percentage of scheme assets (42.9%)
Experience gains and losses on scheme liabilities:
Amount (£’000) 4
Percentage of the present value of scheme liabilities (0.6%)
Total actuarial gain recognised in the statement of total recognised gains and losses:
Amount (£’000) (334)
Percentage of the present value of scheme liabilities 51.7%
P AGE 55 Notes to the Accounts
30 September 2002
26. Pensions (continued)
The Group operates a defined benefit scheme for certain employees in Germany. The outstanding liability relating to the scheme at 
30 September 2002 was £1,487,000 (2001 – £1,318,000) 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 2002, the scheme is fully funded.
Additional disclosures regarding this defined benefit pension scheme are required under the transitional provisions of FRS 17
“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 FRS 17.
The actuarial valuation described above has been updated at 30 September 2002 by a qualified actuary using revised assumptions
that are consistent with the requirements of FRS 17. 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:
2002 2001
% %
Rate of increase in salaries 3.0 3.0
Rate of increase in pensions in payment 2.3 2.3
Discount rate 6.3 6.3
Inflation assumption 2.3 2.3
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:
2002 2002 2001 2001
% £’000 %£’000
Insured fund 7.3 104 6.2 80
Total fair value of assets 104 80
Present value of scheme liabilities (2,637) (2,281)
Shortfall in the scheme (2,533) (2,201)
Related deferred tax asset 314 265
Net pension liability (2,219) (1,936)
Net reserve provided 1,634 1,496
Net liability under FRS 17 (585) (440)
The scheme is a closed scheme and the scheme's membership has an age profile that is rising and therefore under the projected unit
method the current service cost is expected to increase as the members of the scheme approach retirement.
The plan is operationally funded and therefore the only assets that are disclosed above relate to paid-up policies from the issued fund.
To meet the pension liability the Company builds up a reserve in order to fund the present value of pension obligations, calculated on
the assumptions detailed above. As at 30 September 2002 the net reserve was £1,634,000 (2001: £1,496,00).
P AGE 56 P AGE 57
Notes to the Accounts
30 September 2002
26. Pensions (continued)
Analysis of the amount that would have been charged to operating profit under FRS 17
2002
£’000
Current Service cost 49
Past Service cost –
Gain (loss) on settlements and curtailments –
49
Analysis of the amount that would have been credited to net finance income under FRS 17
2002
£’000
Expected return on pension scheme assets 5
Interest on pension scheme liabilities (162)
(157)
Analysis of the actuarial gain that would have been recognised in the statement of total recognised gains and losses
2002
£’000
Actual return less expected return on pension scheme assets –
Experience gains and losses arising on the scheme liabilities (127)
Changes in assumptions underlying the present value of the scheme liabilities –
(127)
History of experience gains and losses
Difference between the expected and actual return on scheme assets:
2002
Amount (£’000) –
Percentage of scheme assets 0.0%
Experience gains and losses on scheme liabilities:
Amount (£’000) (127)
Percentage of the present value of scheme liabilities 4.8%
Total actuarial gain recognised in the statement of total recognised gains and losses:
Amount (£’000) (127)
Percentage of the present value of scheme liabilities 4.8%
27. 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 2002 was £281,000 (2001 – £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 2002 was £303,000 (2001 – £336,000). 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. Five-Year Summary
30 September 2002
Five-Year Summary
Results
Restated
1998 1999 2000 2001 2002
£’000s (unless otherwise stated)
Turnover 164,425 214,289 235,911 238,198 221,870
Operating profit before goodwill amortisation and
exceptional items 9,423 12,886 9,861 4,605 8,008
Operating profit (loss) 9,423 12,850 5,693 (16,186) 8,008
Profit (loss) for the financial year 1,733 5,135 940 (22,375) 3,969
Assets employed
Fixed assets 38,821 51,717 58,020 36,910 33,646
Net current assets 475 7,186 195 (2,111) 5,041
Creditors: amounts falling due after more than one year (79,874) (863) (820) – –
Net (liabilities) assets (40,578) 58,040 57,395 34,799 38,687
Key statistics
Closing share price n/a 144p 76p 43.50p 48p
Adjusted basic earnings per share 1.7p 4.6p 3.1p 1.1p 3.4p
Diluted earnings per share 1.7p 3.7p 0.6p (13.8p) 2.4p
Capital expenditure 15,536 15,765 20,461 11,459 11,703
Cash inflow from operating activities 21,238 25,002 23,362 14,711 21,441
Average number of employees 2,112 2,522 3,045 3,080 2,995
Net (debt) funds (77,095) 11,378 6,138 8,018 16,439
Operating profit before goodwill amortisation and exceptional
items as a percentage of turnover 5.7% 6.0% 4.2% 1.9% 3.6%
P AGE 58 Directors and Advisors
Chairman (Non-Executive) J P Leighfield CBE
Chief Executive S W Vaughan
Group Finance Director S D Gleadle
UK & Ireland Managing Director M E Ettling
Non-Executive Directors J P Feuer
R J Piper
J A Osbaldiston
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 Advisors & Stockbroker: Old Mutual Securities
Old Mutual Place, 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
Shareholder Information
Annual General Meeting 6 March 2003
Announcement of 2002/2003 Interim Results May 2003
Announcement of 2002/2003 Preliminary Results November 2003
Information about the Group’s activities is available on the corporate web site at www.synstar.com
P AGE 59 Addresses
United Kingdom
Synstar plc
Synstar House
1 Bracknell Beeches
Old Bracknell Lane West 
Bracknell, Berkshire 
RG12 7QX
Tel: (44) 1344 662700
Fax: (44) 1344 662743
Synstar Computer Services (UK) Ltd
Cumberland House
Old Bracknell Lane West
Bracknell, Berkshire 
RG12 7QU
Tel: (44) 1344 662700
Fax: (44) 1344 459940
Synstar Business Continuity Ltd
29 Valepits Road 
Garretts Green 
Birmingham 
B33 0TD
Tel: (44) 121 784 7445
Fax: (44) 121 783 4015
Synstar Networking
Concorde Road
Patchway, Bristol
BS34 5TB
Tel: (44) 117 900 7500
Fax: (44) 117 900 7501
Synstar Computer Services (UK) Ltd
3 Dunlop Square
Deans Southwest Industrial Estate
Livingston
EH54 8SB
Scotland
Tel: (44) 1506 419111
Fax: (44) 1506 460135
For all UK enquiries e-mail:
enquiries@synstar.com
Belgique/België
Synstar Computer Services NV/SA
Hoge Wei 16
B-1930 Zaventem 
Belgique/België
Tel: (32) 2 715 6700
Fax: (32) 2 715 6765
E-mail: contact.info@synstar.be
Synstar Business Continuity
Tollaan 63-65
1932 St.-Stevens-Woluwe
Belgique/België
Tel: (32) 2 713 6811
Fax: (32) 2 713 6822
E-mail: info@synstar-bc.be
France
Synstar Computer Services SA
86-108 Avenue Louis Roche BP82
92233 Gennevilliers Cedex
France
Tel: (33) 1 4685 9797
Fax: (33) 1 4685 9799
E-mail: infos@synstar.fr 
Synstar Business Continuity SARL
Tel: (33) 1 6929 8820
Fax: (33) 1 6907 9774
Deutschland
Synstar Computer Services
(Holding) GmbH
Pallaswiesenstr. 174-182
64293 Darmstadt
Deutschland
Tel: (49) 6151 9890
Fax: (49) 6151 891772
E-mail: info@synstar.de
Nederland
Synstar Computer Services BV
Burg. Verderlaan 9
3544 AD Utrecht
Nederland
Tel: (31) 30 6692211
Fax: (31) 30 6692395
E-mail: info@synstar.nl
Luxembourg
Synstar Computer Services
211, rue des Romains
L-8041 Bertrange
Luxembourg 
Tel: (352) 31 98 60
Fax: (352) 31 98 72
Synstar Business Continuity
Tel: (352) 49 50 40 20
Fax: (352) 49 50 40 53
E-mail: contact.info@synstar.lu
España
Synstar Computer Services SA
San Severo 30 - Barajas Park
28042 Madrid
España
Tel: (34) 91 329 0237
Fax: (34) 91 329 3098
E-mail: ventas@synstar.es
Ireland
Synstar Computer Services
Unit 1
Swords Business Campus
Balheary Road
Swords 
County Dublin
Ireland
Tel: (353) 1 449 2000
Fax: (353) 1 449 2001
E-mail: enquiries@synstar.com
P AGE 60 www.synstar.com Synstar plc
Synstar House
1 Bracknell Beeches
Old Bracknell Lane West 
Bracknell
Berkshire 
RG12 7QX
Tel: (44) 1344 662700
Fax: (44) 1344 662743
www.synstar.com