Systems Union Group plc
Systems Union House
1 Lakeside Road
Aerospace Centre
Farnborough
Hampshire GU14 6XP
United Kingdom
T: +44 (0)1252 556000
Investor website: www.systemsunion.com
SUG ANR 003
Systems Union Group plc Annual Report and Accounts 2002
Systems Union Group plc Annual Report and Accounts 2002 01 Financial Highlights
Corporate Statement 
02 Systems Union Group at a glance
04 Chairman’s Statement
06 Chief Executive Officer’s Review 
16 Directors and Advisers
17 Directors’ Report
19 Statement of Directors’ Responsibilities
20 Remuneration Report
21 Corporate Governance
23 Auditor’s Report
24 Consolidated Profit & Loss Account
25 Consolidated Balance Sheet
26 Company Balance Sheet
27 Consolidated Cash Flow Statement
28 Consolidated Statement of Total Recognised Gains and Losses
Reconciliation of Movements in Shareholders’ Funds
29 Notes to the Accounts
43 Notice of Annual General Meeting
Contents Systems Union Group plc is a leading global IT company, quoted
on the Alternative Investment Market (AIM) of the London Stock
Exchange. In December 2002, the Company was the 18th largest
on AIM, ranked by market capitalisation.
➁ By revenue, we are one of the top 25 software houses in Europe
and the 8th largest in the UK.
➂ Operating globally, we work with
numerous well-known organisations ensuring they achieve their
business objectives. We provide a range of services from real-time
financial management software for companies, large and small,
to web-systems to improve internal efficiency.
The Company has a very clear, realistic and achievable agenda and
is committed to strategic growth. We have the financial resources,
global infrastructure and management team to meet these objectives.
➀ on a fully diluted basis – adjusted to exclude amortisation of goodwill and profit on disposal of properties in 2001
➁ Source: Shares magazine, 12 December 2002
➂ Source: The European Software Top 50, Infoconomist September 2002 which lists organisations that generate “more than
50 per cent of [their] revenue from licence sales and directly-related services”.
Corporate
Statement
■ Earnings per share
➀➀ up 87 per cent
■ EBITDA up 68 per cent
■ Profit before tax up 97 per cent
■ EBITDA margin up 77 per cent
■ Cash and investments of £25m
Financial 
Highlights
Systems Union Group plc Annual Report and Accounts 2002 01 02 Systems Union Group plc Annual Report and Accounts 2002
Systems Union Group plc 
SunSystems Pegasus Software
The Group is a global union of systems companies that are focused on providing solutions to meet
the business needs of their customers. As a result of significant investment in research & development,
the Group has a comprehensive range of leading products and services.
Accounts for 89 per cent of Group revenues.
Leading real-time, multi-GAAP, multi-currency,
multi-lingual financial & business management
software solutions based on a dynamic single
ledger structure for international and domestic
organisations. Distributed through 22 offices
and 200 channel partners giving a presence
in 76 countries, and used at 18,000 customer
sites and by 186,000 users in 194 countries.
SunSystems uniquely combines the 3 advantages
of low total-cost-of-ownership, low risk solution
for customers and global reach of its support
infrastructure.
Accounts for 10 per cent of Group revenues.
Provides financial & accountancy software for
small and medium-sized enterprises (SMEs).
A leader in payroll and modular accounting
systems with 90,000 licensed users.
REDtechnology.com
Accounts for 1 per cent of Group revenues.
Web development and hosting company,
operating in the United Kingdom.
Systems Union
Group at a glance SunSystems in EMEA
(Europe, Middle East
and Africa)
Office locations
Farnborough, Paris, Frankfurt,
Madrid, Milan and Dubai
Channel partners
Belgium, Botswana, Bulgaria,
Croatia, Cyprus, Czech Republic,
Egypt, France, Germany, Ghana,
Greece, Hungary, Iran, Ireland,
Ivory Coast, Kazakhstan, Kenya,
Kuwait, Latvia, Lithuania,
Luxembourg, Malawi, Malta,
Mauritius, Monaco, Netherlands,
Nigeria, Oman, Poland, Portugal,
Romania, Russia, Slovak Republic,
South Africa, Switzerland,
Turkey, UAE, Uganda, Ukraine,
United Kingdom, Zambia
and Zimbabwe
Systems Union Group plc Annual Report and Accounts 2002 03
Location of SunSystems offices
Country in which one 
(or more) SunSystems 
channel partner(s) operates
Other Systems Union 
Group offices
Key
Global Reach
SunSystems
in The Americas
Miami, Los Angeles, Houston,
New York, Ottawa, Toronto,
Buenos Aires, Mexico City
and Sao Paulo
Argentina, Bermuda, Brazil,
Canada, Chile, Columbia,
Dominican Republic, Ecuador,
El Salvador, Mexico, Peru,
Trinidad & Tobago, Uruguay,
USA and Venezuela
SunSystems 
in Asia-Pacific
Hong Kong, Sydney, Canberra,
Melbourne, Singapore, Tokyo
and Shanghai
Australia, Cambodia, China, Fiji,
India, Indonesia, Japan, Malaysia,
Myanmar, New Zealand,
Pakistan, Philippines, Singapore,
Sri Lanka, South Korea, Taiwan,
Thailand and Vietnam
Pegasus Software
REDtechnology.com
Other offices
Kettering
Oxford
Primarily United Kingdom
and Ireland
United Kingdom I am very pleased to report continued progress in the performance of the Group, despite difficult
global trading conditions. We significantly increased our profits during 2002, and ended the year with
cash balances of £18.9 million. All areas of the business showed an improved profit, despite slightly
lower revenues, through greater efficiency and a continued focus on new technology.
SunSystems 5 and Pegasus Opera II have been extremely well received since they were launched
in 2001 and continued progress is anticipated for these products during 2003. This success reflects
our on-going investment in research & development.
Results
Earnings before interest, tax, depreciation and amortisation of intangibles (EBITDA) grew by 68 per cent
to £8.7 million (2001: £5.1 million) representing strong profits growth from the Group’s two primary
businesses of SunSystems and Pegasus. This result was particularly pleasing in view of the small decline
in turnover because of the demanding market conditions to £74.6 million (2001: £78.4 million) and
is evidence of further improved productivity.
Net profit after tax was £3.9 million compared to £2.0 million in the previous year, an increase
of 95 per cent. Adjusted earnings per share increased by 87 per cent to 7.1 pence.
The balance sheet is strong and debt free. The cash position improved by £3.6 million and net current
assets rose by £7.9 million.
Whilst the Board is unable to recommend a dividend for 2002, due to the lack of distributable reserves
in the Company, I am pleased to report that following High Court approval of our capital reduction
proposals, the deficit on the Company’s distributable reserves has been eliminated, allowing the
Company to pay dividends from future profits.
The Board
I am delighted to welcome Tony Sweet to the Board. He was appointed chief financial officer upon
joining the Company on 1 December 2002. Tony has extensive experience in private practice including
work on mergers & acquisitions and is a valuable addition to our executive management team.
Outlook
We are focused on growing the Group and to further improve profitability. We remain positive in our
expectations for the outcome of 2003.
Bob Morton
Chairman
04 Systems Union Group plc Annual Report and Accounts 2002
Chairman’s
Statement
Bob Morton
Chairman Systems Union Group plc Annual Report and Accounts 2002 05
The UK-based Save the Children charity is part of the International Save the Children Alliance, a group of 30 like-minded but
separately managed organisations working in over 120 countries. They champion the right of every child to have a secure and happy
childhood and the right to be protected from violence, abuse and exploitation.
Save the Children (UK) operates through 7 regional offices around the world. Outside the United Kingdom, all financial management
is handled on SunSystems.
The level of detail and traceability is vital. Save the Children (UK) has an annual income in excess of £110 million, of which roughly
half is restricted funds. These are donated either with a specific usage in mind or as grants for defined purposes. The ability to account
for every penny of restricted funds is essential since full reporting back to donors is required. Future funds are more likely to be
secured if previous donations are shown to have been wisely spent.
“The time and money we have saved through improved administration processes by using SunSystems is considerable,” said
Angela Connolly, head of the finance systems development unit. “For donations with particular uses in mind, our reports
must be very detailed to demonstrate value. Providing this information, cost effectively, is vital. And that means more of our funds
can be spent on saving children.”
Case Study
Aid agencies –
Save the Children
(UK)
SunSystems is used by aid agencies
in 141 countries 2002 was undoubtedly a difficult year for the IT industry and the global economy in general. For Systems
Union, this was reflected in overall revenue being 5 per cent less than the previous year. Nevertheless,
we believe that our revenue performance is better than much of the global IT sector.
With this backdrop, I am delighted to be able to announce significantly improved results for the Group.
Highlights for the year included:
■ Adjusted earnings per share grew by 87 per cent to 7.1p (2001: 3.8p)
■ Basic earnings per share rose by 90 per cent to 3.8p (2001: 2.0p)
■ EBITDA grew by 68 per cent to £8.7 million (2001: £5.1 million)
■ Profit before tax increased by 97 per cent to £4.3 million (2001: £2.2 million)
■ Fifth consecutive half-yearly increase in profitability
■ EBITDA per employee increased by 71 per cent to £11,300 (2001: £6,600)
■ Cash and investments of £25 million and no debt
■ The Company will pay dividends from future profits
These achievements reflect the considerable efforts and resolve of the management team and staff
members. This has ensured that the Group’s financial well-being has been strengthened. At the same
time as maintaining our significant investment in research & development (R&D), we have continued
to improve profitability in an environment where many companies have reported steep falls in earnings. 
Growth strategy
Far more important than the past is what are we going to do for the future. Systems Union Group plc
now has a proven track record of improving financial performance; it is apparent, however, that
2003 will undoubtedly present fresh challenges. Despite this, we are encouraged by the start to the
current year.
The Group is now financially strong, the cost base is lower and the business opportunity has improved.
We believe that we are now in a position to capitalise on this financial strength to derive significant
synergistic benefits from acquisitions and to achieve further growth. Accordingly, we are more optimistic
than we were this time last year.
Even though we have reported improved profitability for 2002, our revenues declined slightly. It is therefore
a key essential that the Group focuses on growth in 2003 and our plans are to return to and improve
on income levels of 2001.
We will continue to focus on improving margin on sales above the 12 per cent achieved in 2002.
Prudent cost management remains a priority. We shall, however, continue our investment in marketing
to drive top-line growth, and in R&D to develop our new generation of products. This includes
SunSystems and Pegasus R&D facilities working on shared core architecture.
Systems Union and its operating businesses, SunSystems, Pegasus and REDtechnology, are very much
in proactive mode and we believe that the overall strategy will bring considerable shareholder value for
the future. 
The single-ledger, real-time, multi-currency, multi-lingual, multi-GAAP, open platform architecture,
low risk and low total-cost-of-ownership approach will continue to give enormous strength for
SunSystems and its extensive worldwide customer base.
In the medium-term it is our intention to increase our volume of business considerably on a profitable
basis as we pursue our goal to become the leading mid-tier global financial and business management
solutions provider. To achieve this strategy we will pursue the following actions:
■ Increase our global footprint. The existing network is considerable with directly owned offices and
channel partners across 76 countries, including new offices in Shanghai and Dubai. We will consider
opening additional offices and recruit new channel partners.
■ Extend our worldwide vertical markets, initially focusing on hotels, insurance, aid agencies and oil & gas.
■ Expand our global network of vertical software partners (VSPs) with SunSystems embedded as the
financial engine in third party applications.
■ Maintain the pre-eminence of our core financial products as the key ingredients of our global
solutions offerings.
06 Systems Union Group plc Annual Report and Accounts 2002
Chief Executive
Officer’s Review 
Paul Coleman
Chief Executive Officer Systems Union Group plc Annual Report and Accounts 2002 07
Broadwater is a respected brand name within the hospitality industry and is well known for its prime locations, unique architectural
styles and luxury furniture and fittings. Its hotels, resorts and apartments are located in Perth and elsewhere in Western Australia
and, by the end of 2004, it will have 8 high-quality properties in its portfolio.
Since the company has significant growth plans, its financial & business management system had to be flexible and scalable to meet
future needs. The implementation of a centralised system was specified to handle each site uniquely but still provide standardised
reporting. The company previously used a number of different front-of-house systems – which would be retained – and various
back-of-house modules, none of which provided the reporting and analysis needed.
Prior to the installation of SunSystems by Eclipse Computing Australia, the production of monthly owners’ statements was a whole
day affair, involving re-keying large quantities of data with the very real possibility of errors.
Alex Farrell, Broadwater’s Group financial controller, said: “With the power of SunSystems, this process now takes no time at all.
It’s a huge benefit and has really improved month-end morale. Instead of the business forcing the processing methodology, SunSystems
handles the workings of the individual businesses on a day-to-day basis and gives the accounting team exposure to all parts of our
businesses instead of just specialising in one.”
Case Study
Hotels –
Broadwater
1,000 hotels worldwide use SunSystems Growth strategy (continued)
■ Deliver additional complementary products to satisfy the needs of our customers’ directors
around the boardroom table. In 2002, we delivered SunSystems Analytics (world-class reporting
and information delivery solutions), SunSystems PSA (extended project accounting), SunSystems
i2i Purchase Requisitioning (web-enabled), SunSystems Collect (cash management) and
SunSystems Payroll.
■ Establish the office in Shanghai with R&D and sales capabilities. R&D will be based on 2 pivots
to cover our global requirements. This new office in China will enable the Group to defray and
reduce some of its cost, whilst also providing improved localised products for the Asia-Pacific region.
This is particularly exciting, not only in terms of R&D, but also with the market opportunities opening
up through China’s recent membership of the World Trade Organization (WTO), the Beijing
Olympics 2008 and Expo 2010. Shanghai is the commercial capital of China and one of the largest
cities in the world (with 17 million people). With over 2,000 SunSystems sites in China already,
we are well placed to take advantage of this major market opportunity.
■ Roll out Pegasus software globally under the SunSystems branding, including local language versions.
■ Retain platform independence in our R&D strategy. We have already embarked upon a new
technology framework based on Java II Enterprise Edition (J2EE).
■ Enhance our communication systems globally, to allow our 2 SunSystems R&D centres, Farnborough
and Shanghai, to provide support and services for the rest of the Group, our customers and the
distribution network.
■ Pursue acquisition opportunities for customer base, for product and services (bringing them into our
R&D framework), and for advanced technology.
■ Support our channel partners by providing enriched product offerings to enable greater growth.
Financial review
The £3.5 million (68 per cent) improvement in EBITDA reflects the success of management’s focus
on operational efficiency even though total revenues declined. In short, cost reductions significantly
outweighed a decrease in income.
Group turnover of £74.6 million was 4.8 per cent lower than 2001. Licence revenues declined by
£4.9 million and professional services by £3.1 million, reductions of 16 per cent. Recurring maintenance
revenue, however, improved by £4.2 million, an increase of 15 per cent. This improvement reflects
the increase to maintenance charges introduced in January 2002. As a result, recurring maintenance
income represented 42.5 per cent of revenue, compared to 35.1 per cent previously. Whilst we were
not immune from the downward pressures on global software licence and professional service income,
we believe that we outperformed much of the IT sector.
Total costs reduced by 10 per cent to £66.0 million. These improvements in efficiency and a focus on cost
control and profitability per head resulted in the EBITDA margin on sales increasing to 12 per cent for the
year from 7 per cent in 2001. We expect this performance measure to show further improvement in 2003.
The Group’s low tax rate reflects the benefit of corporate tax losses brought forward. We implemented
FRS 19 with effect from the beginning of 2002 and the accounts include a prior year adjustment to
restate the opening position on the new basis under that standard.
Cash balances at 31 December 2002 were £18.9 million. Cash flow from operating activities improved
by 48 per cent to £5.1 million, which reflects our focus on cash collections. Days’ sales outstanding
(DSOs) for the Group are 57 days. Our strong cash position allowed us to renegotiate an outstanding
commitment at a substantial early settlement discount. In addition, £1.3 million was paid in January
2002 to acquire the global exclusivity rights for SunSystems Vision, our analytics tool, together with
existing maintenance contracts. The Group remains debt-free with net current assets of £24.9 million,
an improvement of £7.9 million over last year. In addition, the Group continues to hold an investment
in 9 million of its own shares, which are carried at £6.3 million.
In October 2002, the High Court approved the capital reduction proposals that had been passed
by shareholders at the Extraordinary General Meeting on 23 September 2002. The deficit on the
Company’s profit & loss account has been eradicated thereby enabling the payment of dividends
from future profits.
08 Systems Union Group plc Annual Report and Accounts 2002
Chief Executive
Officer’s Review  Systems Union Group plc Annual Report and Accounts 2002 09
CitiStreet currently has over 3,500 employees and is one of the largest global benefits services firms in the world, providing an array
of products and services for the retirement and employee benefit plans of corporate, government, healthcare and non-profit organisations.
CitiStreet is owned and operated as a joint partnership between New York-based Citigroup and Boston-based State Street Corp.
CitiStreet has 3 geographically dispersed offices within the US, with each office providing a specific ‘level of specialisation’ in retirement
products and services. As a result, the financial management challenges facing CitiStreet stemmed from its need to manage the business
data from each office collectively, while still maintaining a certain degree of autonomy and flexibility for each division.
CitiStreet selected and deployed SunSystems to address this need for a number of reasons, including: SunSystems’ ability to operate
in a centralised environment, SunSystems’ extensive reporting capabilities, consolidation capabilities and the low risk factor associated
with the solution.
“All in all I think we came in on time and on budget … their people laid it out straight from the very beginning of the project.
We knew exactly who needed to do what and when they needed to do it. SunSystems have been very responsible and
very supportive as an organisation,” said Bill Madden, assistant vice president of CitiStreet.
Case Study
Insurance –
CitiStreet
400 insurance company sites
in 62 countries use SunSystems Operational review
SunSystems
The company competes with, and regularly beats, large enterprise resource planning (ERP) vendors,
a reflection that many customers prefer best-of-breed solutions to all-embracing systems. This preference
for collaborative business, domain-focused expertise and web-enabled architecture matches SunSystems’
product strategy and the ERPII model defined by leading industry analyst, Gartner Group.
Central to the company’s ambitions is our goal to become the leading mid-market ERPII vendor
in our chosen markets. We will continue to deliver world-class products to our customers and their
associated companies. Enhanced ‘solution selling’ training, both internally and for channel partners,
has focused the team on identifying and satisfying customer needs.
During the year, several significant successes demonstrated the merits of our strategy. Willis Group,
a leading global insurance broker, signed a £6 million deal in April greatly extending its existing
SunSystems usage. A partnership with Micros Systems Inc, world-leader in front-office systems for hotels,
was announced in August and covers the development and distribution of MICROS-Fidelio Financials
powered by SunSystems.
A partnership with Brazilian-based ITG (Informação Tecnologia e Gerência s/c) strengthened the
company’s market leadership position for insurance industry solutions in major parts of Latin America
and Asia-Pacific. Other customers include AGF (Allianz), Axis Specialty, Canada Life, CitiStreet, MAPFRE,
MetLife and Mutual Risk Management (MRM).
In other sectors, new SunSystems users include Octopus Cards, operator of an electronic payment
system in Hong Kong; 21ViaNet China, the largest professional internet data centre in China; Air BP,
a significant global business unit of the BP Group; Standard Chartered, the world’s leading emerging
markets bank; and Pfizer Inc, one of the world’s largest pharmaceutical companies which will use
SunSystems at 60 locations worldwide.
10 Systems Union Group plc Annual Report and Accounts 2002
Chief Executive
Officer’s Review
Financial review (continued)
Summary of results
2002 2001
£000 £000
Turnover by type
Licence 26,690 31,581 
Maintenance 31,716 27,487 
Services 16,225 19,317 
Total 74,631 78,385 
Turnover by location
– EMEA 37,428 37,417
– The Americas 12,993 16,173
– Asia-Pacific 16,072 16,482
SunSystems 66,493 70,072
Pegasus Software 7,254 7,481
REDtechnology 884 832
Total 74,631 78,385
EBITDA before R&D 19,211 17,201
R&D (10,544) (12,052)
EBITDA 8,667 5,149
Profit on disposal of properties — 1,586
Depreciation (983) (1,385)
Amortisation (3,924) (3,590)
Operating profit 3,760 1,760
Net interest receivable 556 429
Profit on ordinary activities before tax 4,316 2,189
Taxation on ordinary activities (383) (146)
Profit for the financial year 3,933 2,043
Earnings per share (note 8)
– basic 3.8p 2.0p
– diluted 3.7p 1.9p
Adjusted earnings per share (note 8)
– basic 7.2p 3.9p
– diluted 7.1p 3.8p Systems Union Group plc Annual Report and Accounts 2002 11
Voluntary Services Overseas (VSO) is an international development charity that works through a network of over 29,000 global
volunteers, enabling people to share their skills, knowledge and experience to improve the lives of local communities in 71 of the
world’s poorest countries.
When VSO was looking for an accounting solution, it sought one that would enable it to consolidate its business and financial information
more efficiently at month-end. It was also essential that the solution was easy to use, could be rapidly implemented across the many
regions in which VSO operates and could manage the multi-currency requirements of the organisation with minimal support.
SunSystems with its uniform, integrated ledger, multi-currency capabilities and real-time analytics proved to be the ideal solution for VSO.
The solution has been deployed across 38 remote locations throughout Africa and Asia with the central office in the UK retaining control
and having real-time access to business and financial information generated by all the local offices.
John Merchant, director of resources at VSO, commented: “SunSystems was chosen after consultation with Tate Bramald because
it handles multi-currency effectively and because we had a positive experience of using it at our London headquarters. SunSystems has
improved VSO’s handling of accounts worldwide and the lack of complaints or difficulties gives us confidence that the roll out
has been very successful for all staff concerned.”
Case Study
Aid agencies –
Voluntary Services
Overseas
SunSystems is used in 194 countries Operational review (continued)
SunSystems (continued)
A series of launches during the year of complementary products, modules and alliances underscores
the continuing enhancement by the company of its solutions offerings. For example, SunSystems Academy
produces and administers computer-based training (CBT) programmes that provide flexible, cost effective
means for users to update and maintain their skills. In October 2002, the organisation of scheduled
classroom-based training courses was contracted to Numerica Group plc, a long-term user of SunSystems.
Within EMEA, sales revenues are split evenly between direct sales from the in-house account team and
indirect sales through channel partners. In Asia-Pacific, the greater proportion is through indirect sales,
whereas in The Americas, direct sales predominate.
The opening of a new office in Dubai is a major step forward. The second largest emirate has doubled
its overseas trade since 1989, and its tourist and hotel market is expected to show considerable growth
in the near-term. This makes the area ideal for SunSystems’ hospitality experience.
Research & development
We have continued to make investment in R&D a priority to maintain the flow of state-of-the-art
products. The 175 strong team at Farnborough has consistently met deadlines with a range of new
offerings and enhancements.
The multi-lingual capability of our products is a major reason why customers choose our software,
with SunSystems 4 now available in 30 languages. In 2002, Brazilian-Portuguese and Italian were
launched for SunSystems 5, together with the double-byte languages of Japanese and simplified
Chinese. In keeping with our open platform policy, SunSystems 5 became available on Oracle NT.
In August, the release of SunSystems 5.1.4 added various significant enhancements, including order
fulfilment, bank interface, new Report Server functionality and improved user interfaces.
SunSystems i2i Purchase Requisitioning was released during the year. This fully web-enabled, J2EE product
uses either the Internet or intranets for speed of operation and deployment. The same basic product
set can be used with either SunSystems 4 or SunSystems 5.
The continuing investment in SunSystems 4 has yielded enhanced user interfaces as well as withholding
tax and payment preview additions, which are important in certain GAAP systems. The product
is extremely stable and continues to be an important part of the SunSystems range.
Over 50 people are planned to be employed by the end of 2003 at the Shanghai R&D centre which,
together with a dozen employees for sales, marketing and operations, will make the location the second
largest SunSystems office after Farnborough. The centre will focus on developing products using the
latest technology such as XML, Java, J2EE and Enterprise Java Beans (EJB) to ensure that we maintain
our leading position.
In addition, a major programme of development, known as ‘Evolution’, is now underway. This framework
is central to the future product strategy of the company, and will mean that SunSystems retains its
place as a leading-edge software solution. The programme will use the latest technology and techniques
and provide maximum agility to meet the company’s development needs.
Support & services
During the year, the company extensively enhanced its help-desk support, particularly in EMEA and
The Americas with English-language calls being handled at Farnborough. This has given improved and
consistent levels of service with customer feedback revealing a high degree of satisfaction.
Plans have been formulated to deliver more extensive global support coverage for contracted
customers, including other languages and other geographic areas, with automated routing of phone
calls from customers. As a first step, a global customer database is being rolled out to unite sales &
marketing activities, help-desk support and customer administration.
SunSystems PSA, the project accounting offering, is now fully used by our professional services teams
to record time and billing of the consultants who install and configure SunSystems at customer premises.
This product, which will continue to be rolled out across the world, has significantly improved billing
and cash collection, thereby reducing DSOs.
Pegasus Software
Pegasus made excellent progress during the year with Opera II sales up 85 per cent on the previous year
and now firmly established as the flagship product for the company. During the year, significant
improvements were incorporated within the product enabling it to maintain the market leadership position
previously held by Opera I. Reseller channel activities substantially increased with over 2,000 Opera II
sites installed during the last 2 years. Additional channel partners were recruited in the UK, and notably
the first channel partner appointed in New Zealand has already made some significant sales.
The product offering during the year was substantially improved by the introduction of Opera XRL
reporting module. Pegasus Payroll continued to be an important part of the business with over 16,000
sites in the UK. Pegasus was the first company to achieve Inland Revenue recognition for the Internet
Service PAYE end of year submission of P14 and P35 forms.
12 Systems Union Group plc Annual Report and Accounts 2002
Chief Executive
Officer’s Review  Systems Union Group plc Annual Report and Accounts 2002 13
Pegasus was the first company
to achieve UK Inland Revenue
eSubmission approval
Founded in 1980, Corinthian Television (CTV) began as a mobile editing company and was formerly part of the Carlton
Communications Group. It has now grown into an award-winning television facilities company, with studios, transmission, multi-media
and post-production, based in London. CTV is owned by its management and JFP Limited (the investment arm of the Telstar Group). 
Sean Radcliffe, financial controller at CTV, commented: “As our business has expanded, we recognised a need for a comprehensive
business and financial solution that would enable our staff to access vital management information from any of our locations at any
time. In association with the value-added-reseller Intsys UK, we found the solution to our needs in Opera II from Pegasus.”
CTV is at the forefront of technology and runs Opera II remotely across servers in its different locations using an ADSL (asymmetric
digital subscriber line) connection. As a result, CTV staff not only benefit from the rapid delivery of business critical information
wherever they are based, but also from enterprise-wide access to core financial, sales and purchasing management functionality.
Opera II also delivers strong reporting and analytical functionality, which enables timely reporting and enhanced decision-making,
ensuring CTV sustains its competitive advantage.
Case Study
Pegasus Software –
Corinthian
Television Operational review (continued)
Pegasus Software (continued)
During the year, Pegasus launched Capital Community, which has resulted in over 2,500 downloads
from the Internet to obtain free software. The Capital product is aimed at smaller businesses and
increasing exposure is part of our longer-term strategy to grow our customer base.
Significant improvements have been made with the introduction of new technology and procedures,
which greatly improve efficiency and the quality of services in our support services centre. Resellers
have been invited to participate in a new service level agreement (SLA) scheme. This enables the
company to focus its support activities more accurately, improve the quality of support to its resellers,
and has greatly reduced support call volumes. This initiative has been reinforced by the investment in
a web-enabled call logging system and those resellers that are part of the SLA scheme are able to post
requests for support directly through a secure and private extranet connection. This initiative is being
extended to other parts of the Pegasus services department.
The company has also re-focused its R&D and quality control resources into 2 separate business units:
new product development and the maintenance of existing products. A direct result of this has positively
impacted on the ability of the company to respond to technical support queries from its resellers and
customers and to improve greatly its ability to service its reseller network. The combination of the
improved product performance and initiatives introduced within the support and development
environment enabled the company to enhance its service commitments and overall profitability.
Pegasus is now a much transformed business and an important member of the Systems Union group
of companies.
REDtechnology.com
A strong recurring revenue stream underpinned an improved performance in 2002 from REDtechnology,
previously know as Systems Union eBusiness Solutions. The business combines technical expertise with
creativity in a variety of Internet, intranet and extranet projects for its customers.
REDtechnology also works with Systems Union sister companies. Developments include the creation
of TradeIT, an integrated web-trading system for Pegasus Opera users, and extensive upgrades
of SunSystems’ own websites.
REDtechnology is a profitable dot.com business.
Staff
The single greatest strength of the Group is the continuing unity of thought and commitment of all
our people. Every office has long-serving, loyal and dedicated personnel. They are each a vital member
of the Systems Union HomeTeam. 
Staff members have a vested interest in the prosperity of the Group through membership of a share
option scheme, which covers 75 per cent of staff, and performance-related incentives that reward
achievement. If we continue to deliver our agenda I would hope to see staff benefit from an uplift
in the share price and therefore the value of their options.
I should like to take this opportunity to thank all members of the HomeTeam for their hard work
and contribution. 
The future
In a very difficult trading environment, the Group has significantly increased its EBITDA, PBT and EPS.
We have a very clear, achievable agenda and are committed to growth, organically and through
strategic acquisition. Change will continue at Systems Union and we intend taking our opportunities,
proactively and with purpose. We look forward, with refreshed vigour and enthusiasm, to the
challenges ahead. 
Paul Coleman
Chief Executive Officer
14 Systems Union Group plc Annual Report and Accounts 2002
Chief Executive
Officer’s Review  Systems Union Group plc Annual Report and Accounts 2002 15
80,000 users of Pegasus Opera
and Opera II
BoysStuff was founded in 1997 as a specialist provider of innovative gadgets and gifts. Although the company had had notable
successes using traditional catalogue marketing, it recognised the need for a compelling website and an effective e-business solution
that would enable customers to make purchases and payments online. It sought a specialist partner and, following extensive
evaluation, REDtechnology was selected to design and develop this e-business solution. 
The team at REDtechnology and BoysStuff worked closely together to integrate complex front and back-end systems. The result
has been the development of a unique solution that enables customers to search effectively for a product, obtain stock and delivery
availability and place orders online.
REDtechnology monitors and manages the web system from its resilient and secure data centre in London, leaving BoysStuff to focus
on its business and customers.
Mav Perivolaris, IT director at BoysStuff, commented: “REDtechnology’s expertise ensures that our web system is available and performing
to peak efficiency and effectiveness 24 x 7. Our business depends on this level of service assurance from REDtechnology and we continue
to be delighted with its commitment to service and experience in fine-tuning our systems to deliver optimum performance.”
Case Study
REDtechnology – 
BoysStuff.co.uk Directors A L R Morton Non-executive Chairman
P J Coleman Chief Executive Officer
A C S Sweet Chief Financial Officer
J L Pemberton Non-executive Director
Company Secretary P G Larking 
Registered Office Systems Union House
1 Lakeside Road
Aerospace Centre
Farnborough
Hampshire GU14 6XP
Registered in England and Wales Number 2735281
Nominated adviser and WestLB Panmure Limited
joint nominated broker Woolgate Exchange
25 Basinghall Street
London EC2V 5HA
Joint nominated broker KBC Peel Hunt Limited
4th Floor
111 Old Broad Street
London EC2N 1PH
Auditor KPMG Audit Plc
Arlington Business Park
Theale
Reading RG7 4SD
Solicitors Allen & Overy
One New Change
London EC4M 9QQ
Bankers Barclays Bank plc
54 Lombard Street
London EC3V 9EX
Registrars Capita Registrars
The Registry
34 Beckenham Road 
Beckenham
Kent BR3 4TU
16 Systems Union Group plc Annual Report and Accounts 2002
Directors
and Advisers The directors present their Annual Report together with the audited Consolidated Financial Statements
for the year ended 31 December 2002.
Principal activities and business review
The Group’s principal activity is the design, development, production and distribution of financial and
business software, sold under the SunSystems and Pegasus brands to international and domestic
markets. E-commerce, Internet hosting and support services are sold through REDtechnology.com.
A review of the Group’s operations is included within the Chief Executive Officer’s Review on
pages 6 to 14.
Financial results and dividends
Details of the results for the year ended 31 December 2002 are set out on pages 24 to 42 of the report
and further details are contained in the Chairman’s Statement and the Chief Executive Officer’s Review.
Turnover for the year was £74,631,000 (2001: £78,385,000) and profit after taxation was £3,933,000
(2001: £2,043,000).
No interim dividend has been paid and the directors recommend that no final dividend be paid for the
year (2001: nil).
Capital reduction
On 23 September 2002, at an Extraordinary General Meeting of the Company, a Resolution was
passed to reduce the share premium account by £26,540,198 subject to approval by the High Court.
Following the presentation of a Petition, approval was given by the Court on 16 October 2002.
The effect of this capital reduction is to enable the directors to recommend payment of dividends from
future profits at a significantly earlier date than would otherwise have been the case.
Product development
Expenditure on research & development was £10,544,000 (2001: £12,052,000). The Company continues
to attach considerable importance to the updating of its products, either by internal development
or the purchase of external software products where this is more appropriate.
Directors and their interests
The directors who have served during the year are:
A L R Morton
P J Coleman
A C S Sweet (appointed 1 December 2002)
J L Pemberton
Bob Morton (61) has been non-executive chairman since 1995, when he first invested in the Company.
Mr Morton is the chairman of a number of companies in the IT sector including Harrier Group plc,
BSoftB plc, Clarity Commerce Solutions plc and InterClubNet plc. He is also chairman of Vislink plc,
MacLellan Group plc and Armour Group plc.
Paul Coleman (51) has over 30 years experience with wide ranging knowledge of a number of industries
both in the UK and internationally. Prior to joining the Systems Union Group in 2000, he was the group
finance director and investment analyst at the Carlisle Group plc and European finance director at the
international security company ADT Group plc.
Tony Sweet (48) was appointed as a director upon joining the Company on 1 December 2002.
Up to the time of his appointment, Tony Sweet was a partner at PricewaterhouseCoopers.
He has experience as an audit partner and on mergers & acquisitions in the UK and Europe.
John Pemberton (54) was the founder and major shareholder of Systems Union Group Limited, prior
to its incorporation into the enlarged Group. He was the architect of the SunSystems business and
financial management software, which forms the cornerstone of the business interests of the Group.
He is a graduate of the London School of Economics.
Systems Union Group plc Annual Report and Accounts 2002 17
Directors’ 
Report Directors and their interests (continued)
The beneficial and family interests of the directors in the share capital of the Company as recorded in
the register maintained by the Company in accordance with the provisions of the Companies Act 1985
were as follows:
At 31 December 2002 At 1 January 2002
5p ordinary shares 5p ordinary shares
A L R Morton 10,860,520 8,835,520 
P J Coleman 150,000 100,000
A C S Sweet 10,000 Nil
J L Pemberton 4,846,308 4,846,308
A C S Sweet and J L Pemberton retire from the Board in accordance with the Company’s Articles
of Association and offer themselves for re-election.
Substantial shareholdings
Save for the interests of A L R Morton and J L Pemberton, which are noted above, the directors are aware
of the following who are interested directly or indirectly in 3 per cent or more of the Company’s shares.
Number Percentage of
of shares share capital
Artemis Unit Trust Management Limited 12,900,000 12.41
M & G Investment Management Limited 10,303,382 9.91
ISIS Asset Management Limited 6,529,768 6.28
Henderson Global Investors Limited 6,381,383 6.14
Jupiter Asset Management Limited 5,820,840 5.60
Framlington Investment Management Limited 3,222,829 3.10
The Company has an interest in 9 million shares which are held in trust for the benefit of the Group.
This holding represents 8.66 per cent of the current issued share capital of the Company. 
Employees
Every effort is made to keep all staff informed and involved in the operations and progress of the Group.
This is achieved through the use of electronic communications, staff briefings and newsletters. It is the
Group’s aim that recruitment and development of staff should be determined solely on ability and other
relevant requirements of the job. Disabled persons and those who become disabled are given the same
consideration as others and, depending on their skills, will enjoy the same prospects as other staff.
The Group’s policies on Health & Safety are continually under review, ensuring that current practices
comply with the laws applicable in the countries in which we operate.
Payment of suppliers
The Company agrees appropriate terms & conditions individually with its suppliers. It seeks to abide
by these agreed terms provided that the supplier has also complied with them. The number of creditors
days at 31 December 2002 was 39 (31 December 2001: 45 days).
Donations
There were no political donations during the year. Donations of a charitable nature amounted to £3,753
(2001: £2,922).
Directors’ and officers’ insurance
The Company maintains an insurance policy for all directors and officers of the Company against
liabilities which may be incurred by them while acting as directors and officers.
18 Systems Union Group plc Annual Report and Accounts 2002
Directors’ 
Report Annual General Meeting
The Annual General Meeting of the Company will be held at the Registered Office at 12:30pm on
30 April 2003. The notice of the meeting, detailing the Ordinary and Special Business to be conducted
is set out on pages 43 to 44 to this report.
Auditor
A Resolution to re-appoint KPMG Audit Plc as auditor to the Company, at a level of remuneration
to be agreed by the directors, will be put to the shareholders at the Annual General Meeting.
By Order of the Board
P G Larking
Secretary
24 March 2003
Systems Union Group plc Annual Report and Accounts 2002 19
Company law requires the directors to prepare Financial Statements for each financial year, which give
a true and fair view of the state of affairs of the Company and Group and of the profit or loss for that
period. In preparing those Financial Statements, the directors are required to:
■ select suitable accounting policies and then apply them consistently;
■ make judgements and estimates that are reasonable and prudent;
■ state whether applicable accounting standards have been followed, subject to any material departures
disclosed and explained in the Financial Statements;
■ prepare the Financial Statements 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 to enable them to ensure that the
Financial Statements comply with the Companies Act 1985. They have general responsibility for taking
such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and
detect fraud and other irregularities.
Statement
of Directors’
Responsibilities 20 Systems Union Group plc Annual Report and Accounts 2002
Policy on remuneration of directors and senior management
Remuneration of the executive directors is agreed by the Remuneration Committee. Terms of appointment
of senior management are approved by the chief executive officer. Policies are designed to attract,
motivate and retain high calibre individuals and to reward them for enhancing value to shareholders. 
Salary and other benefits
Salaries are reviewed periodically and have regard to remuneration packages of similar public companies
operating in the computer services industry. Policies concerning other employment benefits are reviewed
on a regular basis.
Bonus
At the outset of each financial year, the Remuneration Committee agrees an annual bonus target for
the executive directors. Certain other senior staff have bonus arrangements, which are dependent
on the performance of the Group and the individual.
Share options
The Company operates an Inland Revenue Approved share option scheme, which includes the grant
of Unapproved and Super options. Details of the options outstanding for directors are detailed in this
report. The Company has a policy of granting share options to staff at all levels and details of the
options outstanding are set out in note 17 of the Financial Statements.
The Remuneration Committee, at their meeting on 20 March 2003, determined that the vesting criteria
for Super options, based on share price performance, were beyond the direct control of the executive
directors and senior management. They further determined that the future vesting criteria for Super options
should be based upon the improvement to adjusted earnings per share of 10 per cent each year.
The Committee determined that to acknowledge the achievements of the Super option holders, the
financial years 2001 and 2002 are regarded as years in which the required performance levels had been
achieved. As a consequence of this decision, a proportion of existing options vested on 20 March 2003.
Super options are capable of exercise at the rate of 25 per cent of those options that have vested,
in 6 monthly intervals, commencing 3 years after the date of grant.
Pensions
The Company makes a contribution of 10 per cent of the basic salary to a personal pension scheme on behalf
of the executive directors. Defined contributions are made to personal pension plans for other staff within the
Group. In some Group companies, these are dependent upon participating staff making a personal contribution.
Directors’ remuneration
Salary Performance Benefits Pension 
and fees bonus in kind contributions 2002 2001
£ £ £ £ £ £
A L R Morton
*
30,000 Nil Nil Nil 30,000 30,000
P J Coleman 200,000 150,000 26,828 20,000 396,828 452,025
A C S Sweet
**
10,000 Nil 1,000 Nil 11,000 Nil
J L Pemberton
*
35,333 Nil Nil Nil 35,333 71,356
J G Glicker
***
Nil Nil Nil Nil Nil 9,000
275,333 150,000 27,828 20,000 473,161 562,381
* Non-executive and member of the Audit and Remuneration Committees
** Appointed 1 December 2002
*** Resigned 6 September 2001
Directors’ service agreements
A L R Morton, P J Coleman, A C S Sweet and J L Pemberton each has an agreement with the Company
capable of termination on 6, 12, 6 and 3 months’ notice, respectively.
Directors’ share options
The executive directors have options granted under the Systems Union Group Employee Share Option
Scheme (1999). The conditions and status of the option grants are as follows:
Mr Coleman was granted 2,000,000 Super options on 13 December 2000 at 61.5 pence. 1,333,334
of those options vested on 20 March 2003. The remaining 666,666 Super options are capable of vesting
in March 2004. In addition, Mr Coleman has 500,000 Ordinary options, granted on 18 March 2002
at 90.5 pence. These options are capable of exercise between 18 March 2005 and 18 March 2012.
Mr Sweet was granted 400,000 Super options on 5 December 2002 at 70.0 pence. These options
are capable of vesting from March 2004. In addition, Mr Sweet has 100,000 Ordinary options granted
on 5 December 2002 at 70.0 pence. These options are capable of exercise between 5 December
2005 and 5 December 2012.
Remuneration
Report The directors are responsible for the Company’s system of corporate governance. The Company
supports the Principles of Good Governance and the Code of Best Practice (‘the Combined Code’).
Whilst the Company is not required to comply with the provisions of the Combined Code, it has
chosen to make the following voluntary disclosures.
Board and management reporting
The Board currently comprises the chief executive officer, the chief financial officer, the non-executive
chairman and one other non-executive director and meets regularly throughout the year. The Board
has adopted a schedule of matters to be specifically reserved for its decision, in accordance with the
provisions of the Combined Code.
Each operating company and business unit produces comprehensive management reports each month.
A summary of these reports is presented to the Board at its monthly meeting. Such information
includes details of the key features of the Group’s performance and an analysis against budget of
revenue and expenditure.
Directors’ remuneration
The Board has established a Remuneration Committee comprising the chairman and non-executive
director. Details of the Company’s remuneration policy are contained in the Remuneration Report
on page 20. The Committee makes its decisions following consultation with the chief executive officer
and has access to external professional advice if required.
Accountability and audit
The Board seeks to ensure that its Annual Report and Financial Statements provide a balanced and
concise assessment of the Company’s position. The Board has established an Audit Committee
comprising the chairman and non-executive director. This Committee meets as necessary and provides
a forum for the non-executive directors to meet with the external auditor.
Internal control
The directors are responsible for the systems of internal control. Although no system of internal control
can provide absolute assurance against material misstatement or loss, the Group’s systems are designed
to provide the directors with reasonable assurance that problems are identified on a timely basis and
dealt with appropriately. The key elements of the Group’s system of internal control are as follows:
Financial management
Detailed annual budgets are prepared for the Group and each operating company. These budgets are
reviewed and agreed by the Board and actual performance is reported against these budgets on a
regular basis. The Company has in place documented authority levels for approving purchase orders,
invoices and all bank transactions. Further information concerning financial risk management is detailed
in note 16 of the Financial Statements.
Company management
The chief executive officer chairs a global management board for the Group comprising the regional
chief executives, certain subsidiary company directors and other senior executives with global
responsibilities for sales, marketing, service support, technology, product development and finance.
Additionally, there are regular meetings of a product strategy forum where the future direction of the
Group’s product offerings and routes to market are considered. There are also regular Board meetings
of all subsidiary companies in the UK and overseas.
Quality management
The Company’s businesses are focused on meeting the highest levels of customer satisfaction. Quality
procedures for the development of the products, services and maintenance support are documented
and kept under constant review. Systems Union Holdings Limited’s management systems are certified
ISO9001:2000 and TickIT.
Corporate
Governance
Systems Union Group plc Annual Report and Accounts 2002 21 Internal control (continued)
Business risks and computer systems
The Company has established controls and procedures over the security of the data held on its
computer systems. Such arrangements are tested regularly and reviewed. The Company has in place
business continuity plans and off-site emergency facilities are available. Appropriate insurance policies
are in place.
Internal audit
The Company has an internal audit function whose role is to provide independent verification to the
Board and to management of the organisation’s day-to-day activities and results. The audit plan used
to control the scope and frequency of audits is risk-based. Where any problems or opportunities are
identified as the result of audits, they are logged formally and followed through to completion. The internal
audit function may also carry out ad-hoc reporting and investigations for the Board, or for individual
directors and managers.
Dialogue with institutional shareholders
The directors of the Company, together with their advisers, hold regular meetings with the key
institutional shareholders, thereby helping to ensure that there is a mutual understanding of objectives.
Going concern
After making due and careful enquiry, the directors have formed a judgement at the time of approving
the Financial Statements that there is a reasonable expectation that the Company has adequate resources
to continue in operational existence for the foreseeable future. For this reason, the directors continue
to adopt a ‘Going Concern’ basis in preparing the Financial Statements.
22 Systems Union Group plc Annual Report and Accounts 2002
Corporate
Governance Independent Auditor’s Report to the members of Systems Union Group plc
We have audited the Financial Statements on pages 24 to 42.
This report is made solely to the Company’s members, as a body, in accordance with Section 235 of
the Companies Act 1985. Our audit work has been undertaken so that we might state to the Company’s
members those matters we are required to state to them in an Auditor’s Report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the Company and the Company’s members, as a body, for our audit work, for this report
or for the opinions we have formed.
Respective responsibilities of directors and auditor
The directors are responsible for preparing the Directors’ Report and, as described on page 19,
the Financial Statements in accordance with applicable United Kingdom law and accounting standards.
Our responsibilities, as independent auditor, are established in the United Kingdom by statute, the Auditing
Practices Board and by our profession’s ethical guidance. 
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 to you if, in our opinion,
the Directors’ Report is not consistent with the Financial Statements, if the Company has not kept proper
accounting records, if we have not received all the information and explanations we require for our audit,
or if information specified by law regarding directors’ remuneration and transactions with the Group
is not disclosed.
We read the other information accompanying the Financial Statements and consider whether it is
consistent with those statements. We 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 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 Group’s circumstances, 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 31 December 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.
KPMG Audit Plc
Chartered Accountants
Registered Auditor
Reading
24 March 2003
Auditor’s 
Report
Systems Union Group plc Annual Report and Accounts 2002 23 2002 2001
Note £000 £000
Turnover 1,2 74,631 78,385 
Cost of operations 1 (55,420) (61,184) 
Research & development 1 (10,544) (12,052) 
EBITDA 8,667 5,149 
Profit on disposal of properties — 1,586
Depreciation (983) (1,385) 
Amortisation of intangibles (3,924) (3,590) 
Operating profit 3,760 1,760
Net interest receivable 3 556 429 
Profit on ordinary activities before taxation 4 4,316 2,189 
Taxation on profit on ordinary activities 7 (383) (146) 
Profit for the financial year 3,933 2,043 
Earnings per share 8
– basic 3.8p 2.0p 
– diluted 3.7p 1.9p 
Adjusted earnings per share 8
– basic 7.2p 3.9p 
– diluted 7.1p 3.8p 
All results relate to continuing operations.
There is no difference between the retained profit for the year stated above and its historical cost equivalent.
24 Systems Union Group plc Annual Report and Accounts 2002
Consolidated Profit & Loss Account
for the year ended 31 December 2002 restated
2002 2001
Note £000 £000
Fixed assets
Intangible assets 9 62,842 65,653 
Tangible assets 10 4,105 4,469 
Investments 11 6,300 6,300 
73,247 76,422 
Current assets
Debtors 12 18,840 19,448 
Cash at bank and in hand 18,874 15,293 
37,714 34,741 
Creditors: amounts falling due within 1 year 13 (12,820) (17,745) 
Net current assets 24,894 16,996 
Total assets less current liabilities 98,141 93,418
Creditors: amounts falling due after more than 1 year 14 — (826) 
Provisions for liabilities and charges 15(c) (1,310) (2,204) 
Deferred income (15,907) (13,178) 
Net assets 80,924 77,210 
Capital and reserves
Called up share capital 17 5,196 5,172 
Share premium account 18 9,478 35,963 
Merger reserve 18 50,582 54,118 
Warrant reserve 18 1,340 1,476 
Profit & loss account 18 14,328 (19,519) 
Equity shareholders' funds 80,924 77,210 
These financial statements were approved by the Board of Directors on 24 March 2003 and were signed on its behalf by:
P J Coleman
Chief Executive Officer
Consolidated Balance Sheet
as at 31 December 2002
Systems Union Group plc Annual Report and Accounts 2002 25 26 Systems Union Group plc Annual Report and Accounts 2002
Company Balance Sheet
as at 31 December 2002
2002 2001
Note £000 £000
Fixed assets
Intangible assets 9 937 —
Tangible assets 10 373 390 
Investments 11 61,616 60,752
62,926 61,142 
Current assets
Debtors 12 6,908 10,452 
Cash at bank and in hand 16,156 13,463 
23,064 23,915 
Creditors: amounts falling due within 1 year 13 (12,006) (11,144) 
Net current assets 11,058 12,771 
Net assets 73,984 73,913 
Capital and reserves
Called up share capital 17 5,196 5,172 
Share premium account 18 9,478 35,963 
Merger reserve 18 57,662 57,662 
Warrant reserve 18 1,340 1,476 
Profit & loss account 18 308 (26,360)
Equity shareholders' funds 73,984 73,913 
These financial statements were approved by the Board of Directors on 24 March 2003 and were signed on its behalf by:
P J Coleman
Chief Executive Officer Systems Union Group plc Annual Report and Accounts 2002 27
Consolidated Cash Flow Statement
for the year ended 31 December 2002
2002 2001
Note £000 £000
Operating profit 3,760 1,760
Amortisation 3,924 3,590
Depreciation 983 1,385
(Profit)/loss on sale of fixed assets (21) 34
(Profit) on sale of properties — (1,586)
8,646 5,183
Movement in working capital 20 (3,573) (1,748)
Cash inflow from operating activities 5,073 3,435
Returns on investments and servicing of finance 21 556 429 
Taxation (78) 27 
Purchase of tangible fixed assets (799) (1,172) 
Purchase of investments — (80)
Purchase of licences (1,250) (150)
Disposal of properties held for sale — 8,888 
Cash inflow before management of liquid resources and financing 3,502 11,377 
Management of liquid resources — 4,000 
Financing 21 79 (5,219) 
Increase in cash in the year 3,581 10,158 
Cash flow from change in debt — 5,300 
Cash inflow from decrease in liquid resources — (4,000) 
Movement in net funds 3,581 11,458 
Net funds at 1 January 2002 15,293 3,835 
Net funds at 31 December 2002 18,874 15,293 28 Systems Union Group plc Annual Report and Accounts 2002
Consolidated Statement of Total Recognised Gains and Losses
for the year ended 31 December 2002
2002 2001
£000 £000
Profit for the financial year 3,933 2,043 
Exchange adjustments (162) (336) 
Total recognised gains and losses relating to the financial year 3,771 1,707 
Prior year adjustment (Note 1(b)) 867 —
Total recognised gains and losses since last Annual Report 4,638 1,707
Reconciliation of Movements in Shareholders’ Funds
for the year ended 31 December 2002
2002 2001
£000 £000
Profit for the financial year 3,933 2,043 
Other recognised gains and losses relating to the year (162) (336) 
New share capital subscribed 79 81 
Movement in warrant reserve (136) (193) 
Net addition to equity shareholders' funds 3,714 1,595 
Equity shareholders' funds at 1 January 2002 77,210 74,748 
Prior year adjustment (Note 1(b)) — 867
Equity shareholders' funds at 31 December 2002 80,924 77,210  1 Accounting policies
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the
Group’s financial statements.
a) Basis of preparation
The financial statements have been prepared in accordance with Generally Accepted Accounting Principles in the United Kingdom (UK GAAP)
and under the historical cost convention.
b) Changes in accounting policies
The Group has adopted FRS 19 ‘Deferred Tax’ in these financial statements. The adoption of this standard represents a change in accounting
policy and the comparative figures have been restated accordingly. Details of the effect of adopting FRS 19 is given in note (n) below.
c) Basis of consolidation
The consolidated financial statements include the financial statements of the Company and its subsidiary undertakings made up to
31 December 2002. The acquisition method of accounting has been adopted. Under this method, the results of subsidiary undertakings
acquired or disposed of in the year are included in the consolidated profit & loss account from the date of acquisition or up to the date
of disposal.
Under section 230(4) of the Companies Act 1985 the Company is exempt from the requirement to present its own profit & loss account.
d) Goodwill and intangible assets
Intangible assets are stated at cost. To the extent that the carrying value exceeds the recoverable amount, an impairment loss is
recognised in the profit & loss account. 
Purchased goodwill (representing the excess of the fair value of the consideration given over the fair value of the separable net assets
acquired) arising on consolidation of acquisitions is capitalised and amortised to nil by equal annual instalments over its estimated useful life
of 20 years.
Licences are included at cost and amortised in equal annual instalments over their estimated useful economic lives.
e) Investments
In the Company’s financial statements, investments in subsidiary undertakings are stated at cost. To the extent that the carrying value
exceeds the recoverable amount, an impairment loss is recognised in the profit & loss account.
f) Tangible fixed assets and depreciation
Depreciation is provided to write off the cost less the estimated residual value of tangible fixed assets by equal annual instalments over
their estimated useful economic lives as follows:
Freehold buildings – 50 years
Leasehold land and buildings – period of lease
Office equipment – 2 to 4 years
Motor vehicles – 4 years
No depreciation is provided on freehold land.
g) Foreign currencies
Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are translated using the rate of exchange ruling at the balance sheet date and the gains or
losses on translation are included in the profit & loss account.
The assets and liabilities of overseas subsidiary undertakings are translated at the closing exchange rates. Profit & loss accounts of such
undertakings are consolidated at the average rates of exchange during the year. Gains and losses arising on these translations are taken
to reserves.
h) Leases
Assets acquired under finance leases are capitalised and the outstanding future lease obligations are included in liabilities. Operating lease
rentals are charged to the profit & loss account on a straight-line basis over the period of the lease.
Notes to the Accounts
Systems Union Group plc Annual Report and Accounts 2002 29 1 Accounting policies (continued)
i) Cash and liquid resources
Cash and liquid resources for the purposes of the cash flow statement comprise cash in hand and deposits repayable on demand.
j) Pension costs
The Group operates a number of defined contribution pension schemes. The assets of the schemes are held separately from those of the
Group in independently administered funds. The amount charged to the profit & loss account represents the contributions payable to the
schemes in respect of the accounting period.
k) Turnover
Turnover represents the amounts (excluding value added tax) derived from the provision of goods and services to third party customers.
Revenue from licence fees is recognised on the later of delivery or contract provided no significant future obligation exists. Income from
maintenance services is recognised on a straight-line basis over the period to which the maintenance agreement relates. Revenue not
recognised in the profit & loss account under this policy is classified as deferred income in the balance sheet. Revenue from professional
services is recognised as the work is performed.
l) Cost of operations
Having regard to the nature of the Group’s business, the analysis of operating costs as prescribed by the Companies Act 1985 is not
meaningful. In the circumstances, as prescribed by paragraph C3(3) of Schedule 4 of the Companies Act 1985, the directors have adapted
the prescribed format to the requirements of the Group’s business. 
m) Research & development expenditure
Expenditure on research & development is charged to the profit & loss account in the year in which it is incurred.
n) Taxation
With effect from 1 January 2002, the Group changed its accounting policy with respect to deferred tax upon the adoption of Financial
Reporting Standard No. 19 ‘Deferred Tax’ (‘FRS 19’). FRS 19 introduces a form of full provision for accounting for deferred tax, called the
incremental liability approach, which replaces the partial provision approach previously followed under SSAP 15.
Deferred tax is now provided on timing differences where the Group has an obligation to pay more tax in the future as a result of those
timing differences. Deferred tax assets are only recognised if it is considered more likely than not that there will be suitable profits from
which the future reversal of the underlying timing differences can be deducted.
Previously, deferred tax was provided on timing differences to the extent that they were expected to reverse in the foreseeable future.
Deferred tax unprovided as at 31 December 2001, and which is now required to be provided for under FRS 19, has been provided for
and shown as a prior year adjustment. The impact on the profit & loss account for the year ended 31 December 2002 is a charge of
£65,000. There was no impact on the profit & loss account for the year ended 31 December 2001. Shareholders’ funds at 31 December
2001 have been increased by £867,000.
o) Employee share schemes
The cost of awards to employees that take the form of shares or rights to shares is recognised over the period of the employee’s related
performance. The cost represents the difference between the option exercise price and the market value of the shares at the date of the
grant of the option. Where there are no performance criteria, the cost is recognised when the employee becomes unconditionally entitled
to the shares. No provision is made for employer’s NIC associated with any gains on vested share options on the basis that this expense
is recoverable from the employee.
30 Systems Union Group plc Annual Report and Accounts 2002
Notes to the Accounts 2 Segmental analysis
The directors consider there to be only 1 class of business being the development and distribution of business software.
a) The geographical analysis of turnover is given below:
2002 2001
£000 £000
Europe, Middle East & Africa 45,566 45,730 
The Americas 12,993 16,173 
Asia-Pacific 16,072 16,482 
74,631 78,385 
b) An analysis by revenue type is given below:
2002 2001
£000 £000
Licence  26,690 31,581 
Maintenance  31,716 27,487 
Services 16,225 19,317 
74,631 78,385 
3 Net interest receivable
2002 2001
£000 £000
Bank interest receivable 556 510 
Interest payable:
– On bank loans and overdrafts — (28) 
– On all other loans — (53)
556 429 
4 Profit on ordinary activities before taxation
2002 2001
£000 £000
Profit on ordinary activities before taxation is stated after charging/(crediting):
Auditor’s remuneration – Group audit 135 130 
– Company audit 30 30 
– other fees paid to the auditor 49 90 
Depreciation 983 1,385 
Amortisation of intangible fixed assets 3,924 3,590 
Exchange gains (net) (444) (165) 
Operating lease rentals: land and buildings 3,353 3,320 
Operating lease rentals: other assets 1,792 1,371 
Systems Union Group plc Annual Report and Accounts 2002 31 5 Directors’ remuneration and shareholdings
Information covering directors’ remuneration (including pension entitlements), interest in shares and share options is included in the
Directors’ Report pages 17 to 19 and the Remuneration Report on page 20.
6 Staff numbers and costs
The average number of persons employed by the Group (including directors) during the year, analysed by category, was as follows:
Number of employees
2002 2001
Selling 184 195 
Research and technical 368 355 
Management and administration 217 230 
769 780 
The aggregate payroll costs of these persons were as follows:
2002 2001
£000 £000
Wages and salaries 32,269 33,258
Social security costs 3,466 3,383
Other pension costs 1,083 1,325
36,818 37,966
7 Taxation
a) Analysis of charge
2002 2001
£000 £000
Current tax
UK corporation tax — — 
Overseas tax 318 146
Deferred tax
Origination and reversal of timing differences 65 —
Total tax charge 383 146
32 Systems Union Group plc Annual Report and Accounts 2002
Notes to the Accounts 7 Taxation (continued)
b) Factors affecting tax charge
The current tax charge for the year is lower (2001: lower) than the standard rate of corporation tax in the UK of 30 per cent (2001: 30 per cent).
The differences are explained below:
2002 2001
£000 £000
Profit on ordinary activities before taxation 4,316 2,189
Profit on ordinary activities multiplied by standard rate of corporation tax in the UK 
of 30 per cent (2001: 30 per cent) 1,295 657
Effect of:
Charges not deductible for tax purposes* 1,065 1,716
Capital allowances in excess of depreciation (10) (272)
Utilisation of tax losses (2,000) (1,870)
Lower tax rates on overseas earnings (32) (85)
Current tax charge for the year 318 146
* Primarily amortisation of goodwill
Certain United Kingdom subsidiaries have trading losses which as at 31 December 2002 amounted to £6.0 million which are available for
offset against future trading income. There are further losses available to certain overseas subsidiaries amounting to £11.1 million. No deferred
tax assets have been recognised in respect of these timing differences as the ability of the Group to obtain tax relief is dependent upon
suitable profits arising in the relevant statutory companies in the future which are either not currently foreseen or cannot be estimated
with sufficient certainty.
8 Earnings per share
The calculation of the basic earnings per share is based on the profit for the financial year divided by the weighted average number of shares
in issue during the year.
a) Adjusted earnings is calculated as follows:
2002 2001
£000 £000
Profit for the financial year 3,933 2,043 
Amortisation of goodwill 3,536 3,590 
Profit on disposal of properties — (1,586) 
Adjusted earnings for the financial year 7,469 4,047 
b) Number of shares (in thousands)
2002 2001
Weighted average number of shares – used to calculate basic earnings per share 103,760 103,310 
Effect of dilutive share options 1,993 2,399 
Number of shares used to calculate diluted earnings per share 105,753 105,709 
Systems Union Group plc Annual Report and Accounts 2002 33 9 Intangible fixed assets
Licences Goodwill Total
Group £000 £000 £000
Cost
At 1 January 2002 1,335 84,368 85,703
Adjustments —(137)(137)
Additions 1,250—1,250
At 31 December 2002 2,585 84,231 86,816
Amortisation and impairment
At 1 January 2002 1,229 18,821 20,050
Charge for the year 388 3,536 3,924
At 31 December 2002 1,617 22,357 23,974
Net book value
At 1 January 2002 106 65,547 65,653
At 31 December 2002 968 61,874 62,842
Licences
Company £000
Cost
At 1 January 2002 —
Additions 1,250
At 31 December 2002 1,250
Amortisation
At 1 January 2002 —
Charge for the year 313
At 31 December 2002 313
Net book value
At 1 January 2002 —
At 31 December 2002 937
34 Systems Union Group plc Annual Report and Accounts 2002
Notes to the Accounts 10 Tangible fixed assets
Land and Office
buildings equipment Total
Group £000 £000 £000
Cost
At 1 January 2002 3,643 3,672 7,315
Additions 28798826
Transfer to current assets (167) — (167)
Disposals —(307)(307)
Exchange differences (32) (3) (35)
At 31 December 2002 3,472 4,160 7,632
Depreciation
At 1 January 2002 483 2,363 2,846
Charge for the year 152 831 983
On disposals — (302) (302)
At 31 December 2002 635 2,892 3,527
Net book value:
At 1 January 2002 3,160 1,309 4,469
At 31 December 2002 2,837 1,268 4,105
Land and Office
buildings equipment Total
Company £000 £000 £000
Cost
At 1 January 2002 and at 31 December 2002 361 49 410
Depreciation
At 1 January 2002 6 14 20
Charge for the year 7 10 17
At 31 December 2002 13 24 37
Net book value:
At 1 January 2002 355 35 390
At 31 December 2002 348 25 373
The net book value of land and buildings comprises:
Group Company
2002 2001 2002 2001
£000 £000 £000 £000
Freehold 2,167 2,388 348 355 
Long leasehold 670 772 — — 
2,837 3,160 348 355 
Systems Union Group plc Annual Report and Accounts 2002 35 11 Fixed asset investments
Interest in 
own shares
Group £000
Cost and net book value 
at 1 January 2002 and 31 December 2002 6,300
The market value of the Interest in own shares at 31 December 2002 was £6,525,000 (2001: £7,515,000).
Interest in Shares in subsidiary
own shares undertakings Total
Company £000 £000 £000
Cost
At 1 January 2002 6,300 78,664 84,964
Adjustments — (136) (136)
Additions —1,0001,000
At 31 December 2002 6,300 79,528 85,828
Amounts written off 
at 1 January 2002 and 31 December 2002 — 24,212 24,212
Net book value:
At 1 January 2002 6,300 54,452 60,752
At 31 December 2002 6,300 55,316 61,616
The principal wholly-owned subsidiary undertakings of Systems Union Group plc at 31 December 2002 were as follows:
Country of incorporation/registration 
Systems Union Holdings Limited England and Wales 
Pegasus Group plc England and Wales 
Red Technology Services Limited England and Wales 
The shares in the following wholly-owned subsidiary undertakings were held indirectly by Systems Union Group plc at 31 December 2002:
Country of incorporation/registration 
Pegasus Software Limited England and Wales
Systems Union SA Argentina 
Systems Union Pty Limited Australia 
Systems Union Ltda Brazil 
Systems Union Inc Canada 
Systems Union Limited England and Wales 
Systems Union Sarl France 
Systems Union GmbH Germany 
Systems Union Limited Hong Kong
Systems Union Limited Japan 
Systems Union Mexico SA de CV Mexico 
Systems Union Software Pte Limited Singapore 
SunSystems Iberica Spa Spain 
Systems Union Inc USA 
The above companies operated principally in their countries of incorporation/registration.
The principal activity of the trading subsidiary undertakings is the development and distribution of financial and business management
software solutions and associated services.
36 Systems Union Group plc Annual Report and Accounts 2002
Notes to the Accounts 12 Debtors
Group Company
restated
2002 2001 2002 2001
£000 £000 £000 £000
Trade debtors 13,601 14,974 — — 
Amounts owed by Group undertakings — — 6,881 10,395 
Other debtors 1,451 1,392 24 54 
Prepayments and accrued income 2,986 2,215 3 3 
Deferred tax asset (Note 15(a)) 802 867 — —
18,840 19,448 6,908 10,452 
13 Creditors: amounts falling due within 1 year
Group Company
2002 2001 2002 2001
£000 £000 £000 £000
Trade creditors 4,142 6,642 49 — 
Amounts owed to Group undertakings — — 11,351 10,306 
Corporate taxation 341 272 — — 
Other tax and social security 1,126 1,268 22 20
Other creditors 1,767 3,701 33 63 
Accruals 5,444 5,862 551 755 
12,820 17,745 12,006 11,144 
14 Creditors: amounts falling due after more than 1 year
Group
2002 2001
£000 £000
Other creditors — 826 
Systems Union Group plc Annual Report and Accounts 2002 37 15 Provisions for liabilities and charges
a) Deferred tax asset provided in the accounts comprise:
restated
2002 2001
Group £000 £000
Tax losses carried forward 802 867
b) Analysis of movement in the year
Group
£000
Deferred tax provision/(asset) at 1 January 2002 —
Prior year adjustment (note 1(b)) (867)
As restated at 1 January 2002 (867)
Deferred tax charge for the year (note 7(a)) 65
Deferred tax provision/(asset) at 31 December 2002 (802)
c) Other provisions
Other
Taxation provisions Total
Group £000 £000 £000
At 1 January 2002 1,629 575 2,204
Utilised during year (500) (307) (807)
Exchange differences (87) — (87)
At 31 December 2002 1,042 268 1,310
38 Systems Union Group plc Annual Report and Accounts 2002
Notes to the Accounts 16 Financial instruments and risk management
Financial instruments
The Group’s financial instruments comprise cash and liquid resources and an Interest in own shares, together with various items such as
trade debtors and trade creditors that arise directly from its operations. The main purpose of these financial instruments is to fund the
Group’s operations as well as to manage working capital and liquidity.
The main risks arising from the Group’s financial instruments are liquidity risk, foreign currency risk, interest rate risk and market price risk.
The Group monitors these risks through a central treasury management function, which invests surplus funds and manages borrowings.
Liquidity risk
The Group finances its operations through a combination of retained profits, new equity and intercompany loans. The Group started
the year with £15.3 million in cash and liquid resources. At 31 December the Group’s cash and liquid resources were at £18.9 million.
The Group continues to monitor its liquidity position through detailed cash forecasting.
Foreign currency risk
The Group’s principal exposure to foreign currency risk arises on the translation of overseas net assets and profits or losses into sterling
for Group accounting purposes. The exposure is reviewed periodically to minimise the risk of any exchange movements having a material
impact on operating profit. The balance sheet exposure is not significant to the overall consolidated net asset position but the position is
monitored with a view to matching non-sterling assets and borrowings.
Market price risk
In addition to interest rate and foreign currency risks, the Group is exposed to market price risk relating to its Interest in own shares.
The carrying value of this asset is £6.3 million. As at 31 December 2002 the market value was approximately £6.5 million (2001: £7.5 million).
Financial assets
There were no fixed rate deposits at 31 December 2002 or 31 December 2001.
Surplus cash is invested by Group treasury in institutional liquidity funds which achieve above average market rates of returns without
compromising capital protection. The funds are readily accessible. 
The average interest rate earned during 2002 was 3.9 per cent. (2001: 5.1 per cent). Other than the Interest in own shares (note 11),
the fair value of the financial assets approximates to their book values.
Financial liabilities
The Group had no financial liabilities as at 31 December 2002, other than trade and other creditors and accruals. 
17 Share capital
2002 2002 2001 2001
Number £000 Number £000
Authorised:
Equity: ordinary shares of 5p each 200,000,000 10,000 200,000,000 10,000 
Allotted, called up and fully paid:
Equity: ordinary shares of 5p each 103,927,689 5,196 103,430,326 5,172 
During the year, 497,363 ordinary shares were issued at an aggregate nominal value of £24,868 and at a premium of £55,011 as a result
of exercise of share options.
Systems Union Group plc Annual Report and Accounts 2002 39 17 Share capital (continued)
Share option schemes
At 31 December 2002 the following options over ordinary shares of the Company granted to employees were outstanding:
Systems Union Group plc Employee Share Option Scheme (1999)
Ordinary options 
Date of Grant Number of shares Exercise Period Exercise Price (pence)
28 February 2000 3,987 15 June 2000 – 28 August 2003 352.5
27 June 2000 657,197 27 June 2003 – 27 June 2010 63.0
9 October 2000 150,000 9 October 2003 – 9 October 2010 55.0
26 October 2000 3,436,394 26 October 2003 – 26 October 2010 51.5
7 November 2000 100,000 7 November 2003 – 7 November 2010 53.0
20 December 2000 572,827 20 December 2003 – 20 December 2010 70.5
3 January 2001 75,000 3 January 2004 – 3 January 2011 67.5
13 February 2001 75,000 13 February 2004 – 13 February 2011 85.5
6 April 2001 1,237,778 6 April 2004 – 6 April 2011 63.5
26 June 2001 301,692 26 June 2004 – 26 June 2011 62.5
28 November 2001 693,253 28 November 2004 – 28 November 2011 82.5
18 March 2002 713,000 18 March 2005 – 18 March 2012 90.5
5 December 2002 100,000 5 December 2005 – 5 December 2012 70.0
8,116,128
Super options 
Date of grant Number of shares Options vested Exercise price (pence)
13 December 2000 2,000,000 1,333,334 61.5
18 May 2001 1,250,000 833,334 77.0
26 June 2001 200,000 133,334 62.5
28 November 2001 125,000 41,667 82.5
18 March 2002 600,000 200,000 90.5
5 December 2002 400,000 Nil 70.0
4,575,000 2,541,669
Options are capable of exercise, at the rate of 25 per cent of those 
options that have vested, in 6 monthly intervals, commencing 3 years 
after the date of grant.
Pegasus Group plc Employee Sharesave Scheme
Date of grant Number of shares Exercise period Exercise price (pence)
1 October 1998 11,273 1 November 2003 – 30 April 2004 104.0
Oneview.net Approved/Unapproved Share Option Scheme
Date of Grant Number of shares Exercise period Exercise price (pence)
22 September 1999 560,000 24 May 2000 – 22 September 2009 61.0
Systems Union Group Limited Employee Share Scheme
Date of Grant Number of shares Exercise period Exercise price (pence)
7 May 1999 204,700 3 May 2000 – 7 May 2009 108.0
1 April 2000 153,593 3 May 2000 – 1 April 2010 108.0
358,293
Total of options outstanding to employees 
and ex-employees (including directors) 13,620,694
40 Systems Union Group plc Annual Report and Accounts 2002
Notes to the Accounts 18 Share premium and reserves
Share premium Merger Warrant Profit & loss 
account reserve reserve account
Group £000 £000 £000 £000
At 1 January 2002 (as previously reported) 35,963 54,118 1,476 (20,386)
Prior year adjustment – (note 1(b)) — — — 867
At 1 January 2002 (as restated) 35,963 54,118 1,476 (19,519)
Profit for the financial year — — — 3,933
Premium on share issues 55———
Transfers —(3,536)—3,536
Other movements — — (136) —
Capital reduction (26,540) — — 26,540
Exchange adjustments — — — (162)
At 31 December 2002 9,478 50,582 1,340 14,328
Share premium Merger Warrant Profit & loss 
account reserve reserve account
Company £000 £000 £000 £000
At 1 January 2002 35,963 57,662 1,476 (26,360)
Retained profit for the year — — — 128
Premium on share issues 55———
Capital reduction (26,540) — — 26,540
Other movements — — (136) —
At 31 December 2002 9,478 57,662 1,340 308
On 16 October 2002, following approval by shareholders of a Special Resolution, the High Court confirmed that the share premium could
be reduced by £26,540,198. This has been reflected as a transfer to the profit & loss account.
19 Commitments
(a) The Group and Company have no contracted capital commitments at 31 December 2002.
(b) Annual commitments under non-cancellable operating leases are as follows:
2002 2001
Land and Land and 
buildings Other buildings Other
Group £000 £000 £000 £000
Operating leases which expire:
Within 1 year 287 663 546 451 
In the 2nd to 5th years inclusive 1,160 947 980 1,229 
After 5 years 1,974 2 2,111 14 
3,421 1,612 3,637 1,694 
2002 2001
Land and Land and 
buildings Other buildings Other
Company £000 £000 £000 £000
Operating leases which expire:
Within 1 year —— — 29 
In the 2nd to 5th years inclusive —60 — 9 
—60 — 38 
Systems Union Group plc Annual Report and Accounts 2002 41 20 Movement in working capital
2002 2001
£000 £000
Decrease in debtors 1,209 556 
Decrease in creditors (6,260) (4,199) 
Increase in deferred income 2,397 2,622 
Decrease in provisions (919) (727)
Movement in working capital (3,573) (1,748) 
21 Analysis of cash flows
2002 2001
£000 £000
Returns on investment and servicing of finance
Interest received 556 510 
Interest paid — (81) 
Net cash inflow from returns on investment and servicing of finance 556 429
Financing
Issue of ordinary share capital 79 81 
Repayment of bank loans — (5,300) 
Net cash inflow/(outflow) from financing 79 (5,219)
22 Analysis of changes in net cash
£000
At 1 January 2002 15,293
Net cash movement 3,645
Exchange differences (64)
At 31 December 2002 18,874
23 Pension scheme
The Group operates a number of defined contribution pension schemes. The pension cost charge for the year represents contributions
payable by the Group to the schemes and amounted to £915,640 (2001: £1,186,000).
Contributions amounting to £91,337 (2001: £99,000) were payable to the schemes at 31 December and are included in creditors.
42 Systems Union Group plc Annual Report and Accounts 2002
Notes to the Accounts NOTICE IS HEREBY GIVEN that the Annual General Meeting of Systems Union Group plc (‘the Company’) will be held at the Registered
Office of the Company at Systems Union House, 1 Lakeside Road, Aerospace Centre, Farnborough, Hampshire GU14 6XP on 30 April 2003
at 12:30pm to transact the following business:
Ordinary business
1. To receive and consider the report of the directors and audited accounts of the Company for the year ended 31 December 2002
together with the Auditor’s Report.
2. To re-elect Antony Charles Samuel Sweet who has been appointed since the last Annual General Meeting and who retires pursuant
to Article 87.1 of the Company’s Articles of Association and who, being eligible, offers himself for re-election, as a director.
3. To re-elect John Leyland Pemberton who retires by rotation pursuant to Article 92.1 of the Company’s Articles of Association and who,
being eligible, offers himself for re-election, as a director.
4. To re-appoint KPMG Audit Plc as auditor and to authorise the directors to fix their remuneration.
Special business
To consider and, if thought fit, to pass the following Resolution numbered 5 as an Ordinary Resolution:
5. That the directors be and they are hereby authorised, in substitution for any other authority previously conferred upon them, generally
and unconditionally pursuant to Section 80 of the Companies Act 1985 (‘the Act’) to exercise all the powers of the Company to allot
relevant securities (as defined in Section 80(2) of the Act) up to an aggregate nominal amount of £1,732,128 (being 33.3 per cent
of the total nominal value of the shares in issue at the date of this notice) provided that:
(i) this authority shall expire fifteen months from the date of this Resolution or at the Annual General Meeting of the Company
to be held in 2004 if earlier (unless previously revoked or varied by the Company in general meeting); or
(ii) the Company may, before such expiry, make an offer, agreement or arrangement which would or might require relevant securities
to be allotted after such expiry and the directors may allot relevant securities pursuant to any such offer, agreement or other
arrangement as if the authority hereby conferred had not expired.
To consider and, if thought fit, to pass the following Resolutions numbered 6 and 7 as Special Resolutions:
6. That subject to the passing of Ordinary Resolution number 5 above, the directors be and are hereby empowered pursuant to Section
95(1) of the Act and in substitution for all existing powers, to allot equity securities (as defined in Section 94 of the Act), pursuant to
the authority conferred by Ordinary Resolution number 5 above as if Section 89(1) of the Act did not apply to any such allotment
provided that:
(i) the allotment of equity securities in connection with any offer whether by way of rights, open offer (or otherwise) as securities,
open for acceptance for a period fixed by the directors to the holders of ordinary shares and such other equity securities of the
Company as the directors may determine on the register on a fixed record date in proportion (as nearly as may be) to their
respective holdings of such securities or in accordance with the rights attached thereto subject to such exclusions or other
arrangements as the directors may deem necessary or expedient to deal with fractional entitlements that would otherwise arise
or with legal or practical problems under the laws, or the requirement of any recognised regulatory body or any stock exchange,
in any territory; or 
(ii) any other allotment of equity securities up to an aggregate nominal value of £259,819 (being 5 per cent of the total nominal
value of the Company’s shares in issue as at the date of this notice).
Notice of Annual General Meeting
Systems Union Group plc Annual Report and Accounts 2002 43 7. That the Company be and is hereby generally and unconditionally authorised to make one or more market purchases (within the
meaning of Section 163 of the Act) on the London Stock Exchange of ordinary shares of 5p each in the capital of the Company
provided that:
(i) the maximum number of ordinary shares, which are authorised to be purchased, shall be 10,400,000 representing approximately
10 per cent of the Company’s issued ordinary share capital;
(ii) the minimum price which may be paid for such shares is 5p per share (exclusive of expenses);
(iii) the maximum price (exclusive of expenses) which may be paid for an ordinary share shall not be more than 5 per cent above
the average of such share’s middle market quotation as derived from the Alternative Investment Market of the London Stock
Exchange (AIM) for the five business days immediately preceding the day on which the contract is entered into, being days
on which AIM is open for the transaction of business.
The authority hereby conferred shall expire at the conclusion of the Annual General Meeting of the Company to be held in 2004 or, if earlier,
15 months after the date of passing of this Resolution, unless such authority is renewed, varied or revoked prior to such time; and the
Company may make a contract to purchase ordinary shares under the authority hereby conferred prior to the expiry of such authority
which will or may be executed wholly or partly after the expiration of such authority and may make a purchase of ordinary shares
pursuant to any such contract.
By Order of the Board
P G Larking
Secretary
24 March 2003
Notes
1. A member entitled to attend and vote is entitled to appoint a proxy or proxies to attend and, on a poll, vote instead of him/her.
A proxy need not be a member of the Company.
2. A form of proxy is enclosed. The appointment of a proxy will not prevent a shareholder from subsequently attending and voting
at the meeting in person.
3. To be effective the instrument appointing a proxy, and the power of attorney or other authority (if any) under which it is signed,
or a copy of such authority certified notarially or in some other way approved by the Board, shall be deposited at the offices of the
Company’s registrars, Capita Registrars, Proxy Department, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU not less
than 48 hours before the time of the holding of the meeting. 
4. Copies of all contracts of service under which directors are employed by the Company or any of its subsidiaries are available for inspection
at the Company’s Registered Office during business hours on any weekday (Saturdays and public holidays excluded) from the date
of this notice until the conclusion of the Annual General Meeting and will also be available for inspection at the place of the meeting
from 15 minutes before it is held until its conclusion.
44 Systems Union Group plc Annual Report and Accounts 2002
Notice of Annual General Meeting
Registered Office
Systems Union House
1 Lakeside Road
Aerospace Centre
Farnborough
Hampshire GU14 6XP T HE D ESIGN P ORTFOLIO
a member of the flathill communications group plc
www.flathillplc.com
designed & produced by Systems Union Group plc
Systems Union House
1 Lakeside Road
Aerospace Centre
Farnborough
Hampshire GU14 6XP
United Kingdom
T: +44 (0)1252 556000
Investor website: www.systemsunion.com
SUG ANR 003
Systems Union Group plc Annual Report and Accounts 2002
Systems Union Group plc Annual Report and Accounts 2002