Patsystems Plc
Annual report and accounts 2009 
Offices and addresses
Europe
London
Riverside House
2A Southwark Bridge Road
SE1 9HA
Tel +44 (0)20 7940 0490 
Fax +44 (0)20 7803 1619
USA
Chicago 
175 W. Jackson Blvd 
Suite #2260 
Chicago, IL 60604 
Tel +1 312 922 7600 
Fax +1 312 922 7625 
New York
80 Broad Street
5th Floor, Suite #507
NY, NY 10004
Tel +1 212 837 7843
Fax +1 212 837 7792
Asia Pacific
Singapore 
137 Telok Ayer Street
#07-07
Singapore 068602
Tel +65 6216 0452
Fax +65 6536 4167
Tokyo 
2nd Floor, Kakigara-Cho Bldg
10-7, Nihon-bashi Kakigara-Cho 
1-chome
Chuo-Ku
Tokyo  103-0014  
Tel +81 (0) 3 3668 9372
Fax +81 (0) 3 3668 9393
Sydney 
Level 6
Underwood House
37 Pitt Street
Sydney NSW 2000
Tel +61 (0) 2 8987 9600
Fax +61 (0) 2 8252 7640
Hong Kong 
32 Hollywood Road
Unit 2004
Kinwick Centre
Sheung Wan
Hong Kong 
Tel +852 3180 9512
Fax +852 3180 9399
Patsystems Plc was established in  
1994 as one of the original independent 
software vendors to provide a complete 
suite of modular products to support the 
electronic trading of futures and options.
Today we enable over 10,000 traders to 
transact in the global derivatives market 
every month with extensive market 
connectivity spanning from Latin 
America to Japan.
Contents
Overview 
Highlights 01
At a Glance 02
Our Achievements 03
Chairman’s Statement 04
 
Business Review
Chief Executive’s Report 06
Finance Director’s Review 10
Our Board 14
 
Governance 
Directors’ Report 16
Statement of Corporate Governance 19
Report of the Board on Directors’  
Remuneration and on  
Group Remuneration Policy 21
 
Financial Statements 
Independent Auditors’ Report to the  
Members of Patsystems Plc 25
Consolidated Income Statement 26
Consolidated Statement of  
Comprehensive Income 26
Consolidated Balance Sheet 27
Consolidated Statement of Changes  
in Equity 28
Consolidated Cash Flow Statement 29
Notes to the Financial Statements 30
Independent Auditors’ Report to the  
Members of Patsystems Plc 53
Company Balance Sheet 54
Notes to the Financial Statements 55
Directors and Advisers 61
Patsystems Plc  Annual report and accounts 2009  Patsystems Plc
Annual report and accounts 2009 
Offices and addresses
Europe
London
Riverside House
2A Southwark Bridge Road
SE1 9HA
Tel +44 (0)20 7940 0490 
Fax +44 (0)20 7803 1619
USA
Chicago 
175 W. Jackson Blvd 
Suite #2260 
Chicago, IL 60604 
Tel +1 312 922 7600 
Fax +1 312 922 7625 
New York
80 Broad Street
5th Floor, Suite #507
NY, NY 10004
Tel +1 212 837 7843
Fax +1 212 837 7792
Asia Pacific
Singapore 
137 Telok Ayer Street
#07-07
Singapore 068602
Tel +65 6216 0452
Fax +65 6536 4167
Tokyo 
2nd Floor, Kakigara-Cho Bldg
10-7, Nihon-bashi Kakigara-Cho 
1-chome
Chuo-Ku
Tokyo  103-0014  
Tel +81 (0) 3 3668 9372
Fax +81 (0) 3 3668 9393
Sydney 
Level 6
Underwood House
37 Pitt Street
Sydney NSW 2000
Tel +61 (0) 2 8987 9600
Fax +61 (0) 2 8252 7640
Hong Kong 
32 Hollywood Road
Unit 2004
Kinwick Centre
Sheung Wan
Hong Kong 
Tel +852 3180 9512
Fax +852 3180 9399
Patsystems Plc was established in  
1994 as one of the original independent 
software vendors to provide a complete 
suite of modular products to support the 
electronic trading of futures and options.
Today we enable over 10,000 traders to 
transact in the global derivatives market 
every month with extensive market 
connectivity spanning from Latin 
America to Japan.
Contents
Overview 
Highlights 01
At a Glance 02
Our Achievements 03
Chairman’s Statement 04
 
Business Review
Chief Executive’s Report 06
Finance Director’s Review 10
Our Board 14
 
Governance 
Directors’ Report 16
Statement of Corporate Governance 19
Report of the Board on Directors’  
Remuneration and on  
Group Remuneration Policy 21
 
Financial Statements 
Independent Auditors’ Report to the  
Members of Patsystems Plc 25
Consolidated Income Statement 26
Consolidated Statement of  
Comprehensive Income 26
Consolidated Balance Sheet 27
Consolidated Statement of Changes  
in Equity 28
Consolidated Cash Flow Statement 29
Notes to the Financial Statements 30
Independent Auditors’ Report to the  
Members of Patsystems Plc 53
Company Balance Sheet 54
Notes to the Financial Statements 55
Directors and Advisers 61
Patsystems Plc  Annual report and accounts 2009  Patsystems Plc
Providing high-performance 
electronic trading solutions 
with global market connectivity , 
complete end-to-end exchange 
solutions and comprehensive  
risk management tools. Patsystems Plc
Providing high-performance 
electronic trading solutions 
with global market connectivity , 
complete end-to-end exchange 
solutions and comprehensive  
risk management tools. Patsystems Plc
Annual report and accounts 2009 01
Overview
Overview
09
Highlights
Financial Highlights
•	 Revenue	incr eased	by	13%	to	£22.1	million		
(2008:	£19.6	million)
•	 Adjusted	pr e-tax	pr ofit	gr ew	by	7%	to	£3.9	million		
(2008:	£3.7	million)*
•	 Cash	flow	fr om	operating	activities	of	£4.3	million		
(2008:	£3.6	million)
•	 Cash	balances	at	the	year	end	of	£8.9	million	(2008:	£5.9	million)
•	 Pr oposed	full	year	dividend	incr eased	by	17%	to	0.425p	per	shar e	
(2008:	0.363p	per	shar e)
*	 Adjusted	for	shar e	option	costs,	marking	to	market	of	derivatives	used	to	hedge	cash	flows	and	amortisation	of	
intangibles	other	than	inter nally	developed	softwar e.
Operational Highlights
•	 T rading	systems	most	successful	year	to	date	despite	collapse	of	
Lehman	Br others	Inc
•	 Billable	Pr o-Mark	trading	scr een	user	numbers	incr eased	to	723	
(2008:	571)
•	 Major	installations	for	Indonesian	Commodity	and	Derivatives	
Exchange	and	T urkDEX
Richard Last, Chairman, of Patsystems, commented:
“2009	has	underlined	the	str ength	and	r obust	natur e	of	the	Patsystems	
of fering	and	business	model.	In	a	year	dominated	by	economic	
uncertainty	and	in	the	wake	of	the	collapse	of	a	major	client,	the	
Company	has	deliver ed	double	digit	tur nover	gr owth,	str ong	pr ofit	
impr ovement	and	outstanding	cash	generation.
The	Company	begins	the	curr ent	year	with	a	str ong	sales	pipeline,	a	
number	of	well	qualified	and	well	pr ogr essed	sales	pr ospects	to	new	
customers	and	the	opportunity	for	continued	gr owth	fr om	our	existing	
customer	base.
The	management	team	deserve	gr eat	cr edit	for	the	stewar dship	of	the	
Company	in	such	turbulent	times	and	the	pr oposed	incr ease	in	dividend	
is	in	r ecognition	of	an	excellent	trading	performance	and	of	our	
confidence	in	the	futur e.” Patsystems Plc
Annual report and accounts 2009 02
Overview Our Solutions
2
3
At a Glance
We deliver tailored solutions, built from modular 
components, to enhance derivatives trading performance 
and trade processing. Our solutions range from plug-and-
play modules that address specific issues, to complete 
high-performance trading systems with extensive global 
access to derivatives exchanges and clearers. We work 
in partnership with our customers to deliver robust 
systems that align with their business strategies – and 
have done since our foundation in 1994. Leading banks, 
trading houses, hedge funds and professional traders in 
the futures industry rely on us to exploit the benefits of 
electronic trading in derivatives, FX, energy and other 
asset classes.
Trading solutions
F r o n t - e n d	s y s t e ms	a n d	F I X
c o n n e c t i v i t y	t o	e n a b l e	t r a d i ng	
a c r o s s	a l l	t h e	m a j o r	f u t u r e s	
e x c h a ng e s	a n d	l i qu i d i t y	p o o l s .
Customers:
•	 4 3	c u s t o m e r s	g l o b a l l y
•	 C u s t o m e r s	i n c l u d e	s o m e	o f	
t h e	l a r g e s t	g l o b a l	f u t u r e s	
c l e a r i ng	m e r c h a n t s	s u c h	a s	
M o r g a n	S t a n l e y ,	C i t i g r o u p ,	
N e w e d g e ,	a n d	M F	G l o b a l .
Products:
P ro - M ar k
J - Trader
IQ - Trader
T r a d i ng	A P I
Products:
R i sk	I n f o r m e r
R i sk	A l e r t
Products:
P a t s y s t e ms	
M a t c h i ng	E ng i n e
J - Clear
Risk solutions
P l a t f o r m	i n d e p e n d e n t		
p r e -	a n d	p o s t - t r a d e	r i sk	
m a n a g e m e n t	a c r o s s	a l l		
a s s e t	c l a s s e s	i n	r e a l - t i m e .
Customers:
•	 1 1	c u s t o m e r s	g l o b a l l y
•	 J P	M o r g a n	a n d	D e u t s c h e	
B a n k	w i t h	g l o b a l	l i c e n c e s .
Exchange solutions
E n d - t o - e n d	e x c h a ng e	s y s t e m	
a u t o m a t e s	a l l	s t e p s	i n	t h e		
t r a d e	c y c l e ,	f r o m	f r o n t	t o		
b a c k	o f fi c e .
Customers:
•	 7	c u s t o m e r s	g l o b a l l y
•	 T u r k i sh	D e r i v a t i v e s	E x c h a ng e	
( T u r k D E X )	a n d	I n d o n e si a n	
C o mm o d i t y	an d	D e r i v a t i v e s	
E x c h a ng e	( I C D X )	si g n e d		
i n	2 0 0 9 .
1 Patsystems Plc
Annual report and accounts 2009 03
Overview
Patsystems founded 
in London by a team 
of derivatives trading 
professionals
Patsystems Chicago 
office opens serving one 
of the world’s largest 
futures markets
Patsystems Plc floated  
on the London Stock 
Exchange
Patsystems acquires 
Tamesis Limited, 
extending  
its offerings to  
include risk  
solutions
Patsystems Plc 
transfers to 
the London 
Stock Exchange 
Alternative 
Investment Market 
(‘AIM’)
Patsystems 
establishes its Asian 
operations with an 
office in Singapore
Our Achievements
1994 1999 2000 2000 2003 2005
Our markets
USA
29% of revenue 
Europe
34% of 
revenue 
Asia
37% of 
revenue Overview
04
Patsystems Plc
Annual report and accounts 2009
Chairman’s  
Statement
Strong foundations &     global reach
During 2009 Patsystems demonstrated 
the inherent strength of its business 
model despite it being a tough year 
for the global financial business 
community. The robustness of the 
Patsystems revenue model, the spread 
of revenue across a breadth of 
complimentary product offerings and 
the exposure to opportunities across 
the globe meant Patsystems’ business 
was resilient during a difficult market 
period. With turnover growth of 13% 
and adjusted profit growth of 7% the 
business has performed well during 
2009 and is well placed for further 
growth in 2010. I am particularly 
pleased by the increase in turnover  
of our Asia Pacific business of 47%  
to £7.6 million.
Cash	flows	fr om	operating	activities	
amounted	to	£4.3	million	compar ed	to	
£3.6	million	in	2008,	an	incr ease	of	21%	
and	we	expect	this	level	of	cash	
generation	to	continue	in	the	forthcoming	
year .	The	year	end	cash	balance	stood	at	
£8.9	million	(2008:	£5.9	million)	and	the	
business	r emains	debt	fr ee.
Financial Results
Adjusted	pr e-tax	pr ofit	(being	pr ofit	befor e	
tax	after	adjusting	for	shar e	option	costs,	
marking	to	market	of	derivatives	used	to	
hedge	cash	flows	and	amortisation	of	
intangibles	other	than	inter nally	developed	
softwar e)	for	the	full	year	ended	31	
December	2009	incr eased	to	£3.9	million	
compar ed	to	£3.7	million	in	2008.	
Adjusted	pr e-tax	pr ofit	is	the	definition	of	
pr ofit	used	by	most	analysts	to	measur e	
the	performance	of	the	Company .
Diluted	Ear nings	Per	Shar e	(‘EPS’)	on	this	
basis,	and	excluding	the	impact	of	
deferr ed	tax,	gr ew	to	2.0p	per	shar e	fr om	
1.9p	per	shar e	last	year .	Details	of	these	
calculations	ar e	set	out	in	the	Ear nings	per	
Shar e	section	of	the	Finance	Dir ector’ s	
Review	on	page	11.
Pr e-tax	pr ofit	for	the	full	year	ended		
31	December	2009	was	£4.5	million	
compar ed	to	£2.1	million	in	2008.		
Fully	diluted	EPS	was	1.8p	per	shar e	
(2008:	0.3p).
T ur nover	for	the	year	amounted	to	£22.1	
million	(2008:	£19.6	million)	of	which	
£13.2	million	(2008:	£12.9	million)	is	an	
annuity	r evenue	flow	that	derives	fr om	a	
combination	of	the	pr ovision	of	trading	
scr eens	and	market	access	on	a	‘softwar e-
as-a-service’	(‘Saas’)	r ental	model.	When	
combined	with	r evenue	fr om	the	support	
and	maintenance	of	our	or der	r outing	
technology ,	this	means	82%	of	the	
tur nover	is	on	a	r ecurring	annual	basis	
(2008:	87%).
Geographical	diversity	of	our	business	
pr ovides	significant	r esilience	as	well	as	
access	to	gr eater	gr owth	opportunities.	
Revenues	fr om	the	Asia	Pacific	r egion	have	
gr own	r obustly	in	2009	amounting	to	
£7.6	million.
Dividend
The	continued	payment	and	gr owth	in	the	
level	of	the	dividend	is	an	important	goal	
of	the	business.
Following	the	dividend	of	0.237p	per	
shar e,	appr oved	by	shar eholders	at	the	
Annual	General	Meeting	on	28	April	
2009,	r elating	to	the	r esults	for	2008,		
the	Boar d	declar ed	an	interim	dividend		
of	0.145p,	payable	in	September	2009,	
based	on	the	interim	r esults	for	the	year . Patsystems Plc
Annual report and accounts 2009 05
Overview
“In a year dominated by economic 
uncertainty and in the wake of the 
collapse of a major client, the Company 
has delivered double digit turnover 
growth.”
Strong foundations &     global reach
P a t s y s t e m s 	 h a s 	 d e m o n s t r a t e d 	 e x c e l l e n t	
c a s h 	 g e n e r a t i o n 	 a n d 	 p r o fi t s 	 r e s i l i e n c e 	 a n d	
w e 	 e x p e c t 	 t h i s 	 t o 	 c o n t i n u e 	 i n 	 2 0 1 0 	 a n d	
b e y o n d . 	 A s 	 a 	 r e s u l t 	 o f 	 t h i s , 	 t o g e t h e r 	 w i t h	
o u r 	 s t r o n g 	 y e a r 	 e n d 	 c a s h 	 p o s i t i o n , 	 t h e	
B o a r d 	 i s 	 d e c l a r i n g 	 t h e 	 p a y m e n t 	 o f 	 a 	 s e c o n d	
i n t e r i m 	 d i v i d e n d 	 o f 	 0 . 2 8 p 	 b a s e d 	 o n 	 t h e	
r e s u l t s 	 f o r 	 2 0 0 9 	 a s 	 a 	 w h o l e , 	 b r i n g i n g 	 t h e	
t o t a l 	 d i v i d e n d 	 f o r 	 t h e 	 y e a r 	 t o 	 0 . 4 2 5 p 	 p e r	
shar e, 	 compar ed 	 to 	 a 	 total 	 of 	 0.363p 	 for	
2 0 0 8 . 	 T h i s 	 g i v e s 	 a 	 y e a r 	 o n 	 y e a r 	 g r o w t h 	 o f	
17% 	 in 	 our 	 dividend 	 and 	 the 	 dividend	
cover 	 r emains 	 str ong 	 at 	 four 	 times.
The	second	interim	dividend	will	be	paid	
on	19	Mar ch	2010	to	shar eholders	on	the	
r egister	as	at	19	February	2010.	
Board, Management and Staff
On	behalf	of	the	Non-Executive	Dir ectors	
I	would	like	to	thank	the	Executive	
Dir ectors,	the	senior	management	team	
and	all	the	Patsystems	staf f	for	all	their	
har d	work	and	dedication	during	a	
challenging	year .	
On	behalf	of	the	Boar d	I	would	like	to	
congratulate	Sean	Barry	on	his	
appointment	as	Head	of	North	America		
in	October	2009,	r eplacing	Patrick	Kenny	
who	served	the	business	admirably		
over	many	years.	Sean	has	str engthened	
the	North	American	sales	team	and	
r einvigorated	the	sales	pipeline	in	a	
challenging	North	American	market		
as	well	as	developing	opportunities	in	
South	America.
On	a	personal	note	I	should	also	like	to	
thank	Steve	Sparke	and	John	Priestley	for	
their	support	during	the	year .	Their	
commitment	and	dedication	to	the	
business	has	been	gr eatly	appr eciated.	
Customers and Shareholders
I	am	also	grateful	for	the	ongoing	support	
of	our	customers.	Many	of	our	customer	
r elationships	have	str engthened	over	the	
r ecent	years	with	our	r esponsibilities	
extending	to	include	new	solutions	that	
ultimately	help	their	business	succeed.	
I	would	also	like	to	thank	our	shar eholders	
for	their	continued	support	during	what	
have	been	testing	economic	and	market	
conditions.
Future
In	2010	Patsystems	is	expecting	that	the	
sales	focus	in	the	USA	and	Eur ope	will	be	
on	the	implementation	of	risk	systems	and	
the	pr ovision	of	hosted	services.
In	the	Asian	and	emerging	market	ar eas	
our	focus	will	be	on	trading	system	
implementations,	extending	market	
connectivity	and	the	pr ovision	of	end-to-
end	solutions	for	commodity	futur es	
exchanges.	W ith	of fices	in	Singapor e,	
Hong	Kong,	T okyo	and	Sydney ,	a	softwar e	
development	centr e	established	in	Beijing	
during	summer	2009	and	an	investment		
in	our	communications	technology	acr oss	
Asia	in	2009;	the	infrastructur e	is	in		
place	to	support	our	gr owth	plans	in	the	
Asia	r egion.
Opportunities	have	alr eady	been	
developed	in	Indonesia,	Malaysia	and	
Kor ea	and	further	exciting	pr ospects	ar e	
expected	in	2010.	Additionally ,	Patsystems	
has	been	developing	opportunities	in	
Brazil	and	Malaysia,	which	will	contribute	
to	our	expected	gr owth	in	2010.	
Patsystems	commences	2010	with	a	
str ong	sales	pipeline,	a	number	of	well	
qualified	and	well	pr ogr essed	sales	
pr ospects	to	new	customers	and	the	
opportunity	for	continued	gr owth	fr om	
our	existing	customer	base.
Richard Last
Chairman,	Non-Executive	Dir ector
8	February	2010 Patsystems Plc
Annual report and accounts 2009 06
Business Review
Chief Executive’ s  
Report 
The sales opportunities that had been 
progressing during the closing  
months of 2008 were converted into 
contracted sales in 2009. I am 
particularly delighted by the exchange 
system sales to the Indonesian 
Commodity and Derivatives Exchange 
and also the Turkish Derivatives 
Exchange, the first trading system 
sales in Brazil, Malaysia and Korea  
and the risk system sales to JP Morgan 
and Prudential Bache.
W e	have	seen	sales	success	for	all	of	our	
pr oduct	of ferings,	and	in	many	cases	the	
sales	success	has	been	for	a	combination	
of	our	pr oducts	to	deliver	an	end-to-end	
solution	to	support	our	customers’	
business	gr owth	plans.
Trading Systems and Market 
Connectivity
The	trading	systems	business	deliver ed	8%	
gr owth	in	r evenues	over	2008	and	was	
the	most	successful	year	to	date	with	
annual	sales	of	£17.6	million.	This	success	
was	despite	the	collapse	of	Lehman	
Br others	Inc	and	the	r esulting	loss	of	£0.8	
million	r evenue	contribution	that	we	
would	have	expected	fr om	this	customer	
in	2009.
During	the	year	new	and	existing	
customers	installed	trading	systems	in	
Brazil,	Kor ea,	Malaysia,	Singapor e	and	
T okyo.
One	of	Patsystems’	key	dif fer entiators	
fr om	our	competitors	is	the	br eadth	of	
market	connectivity	we	of fer .	In	2009	
BM&F	(Brazil),	Bursa	Malaysia,	EDX	
(London),	SAFEX	(South	Africa),	SICOM	
(Singapor e),	SMX	(Singapor e)	and	T aiwan	
Futur es	Exchange	wer e	all	added	as	
market	connections.
Patsystems’	trading	system	continues	to	
dif fer entiate	itself	in	the	market	place	in	
thr ee	key	ar eas:
The	ability	to	distribute	the	J-T rader	 •	
trading	 scr een	 pr oduct	 easily	 and	 at	 low	
cost	acr oss	the	inter net;
The	capability	of	Patsystems’	published	 •	
connection	pr otocol	which	means	that	
thir d	 parties	 can	 write	 to	 the	 Patsystems	
trading	system	once,	but	be	connected	
to	all	of	our	available	market	
connectivity;
The	depth	of	functionality	within	the	 •	
Pr o-Mark	pr ofessional	trading	tool		
and	its	market	leading	spr eading	
functionality .
Pr o-Mark	has	continued	its	successful	
gr owth	in	2009	with	the	number	of	
billable	users	rising	fr om	571	at	the		
start	of	the	year	to	723	at	the	end	of	
December	2009.
Our	r eplacement	or der	management	
system,	Global	T rading,	has	been	subject	
to	extensive	validation	in	2009	with		
its	performance	and	capabilities	tested	
extensively	acr oss	our	full	range	of	
exchanges,	pr oducts	and	volumes.		
The	pr oduct	has	been	deliver ed	into	a	
customer	for	testing	and	will	be	deployed	
into	our	hosted	envir onment	and	initial	
customer	sites	in	2010.
Exchange Systems
2009	has	seen	the	r esurgence	of	sales	in	
our	exchange	systems	business.	It	is	our	
opinion	that	Patsystems	has	a	unique	
pr oposition	in	the	global	market	place	
with	our	ability	to	pr ovide	exchange	
matching,	clearing,	trading	and	risk	
capability	as	an	integrated	package	and	
this	year’ s	success	r eflects	that.
W e	believe	that	ther e	ar e	opportunities	
acr oss	the	globe	for	smaller	or	newly	
established	commodity	or	financial	futur es	
exchanges	that	want	a	complete	end-to-
end	technology	solution	and	wish	to	
sour ce	this	fr om	a	single	supplier .
The	Indonesian	Commodity	and	
Derivatives	Exchange	has	adopted	the	
Patsystems	trading	system	and	exchange	
matching	pr oducts	to	fulfil	its	vision	of	
enabling	market	participants	to	trade	
r egional	commodity	pr oducts	such	as	
crude	palm	oil,	coal,	natural	gas,	cocoa,	
cof fee	and	tin	within	the	Asian	time	zone.	
The	market	will	be	fully	operational	early	
in	2010	in	a	pr oject	that	commenced	in	
summer	2009.
The	T urkish	Derivatives	Exchange	
(‘T urkDEX’)	has	contracted	to	install	the	
complete	suite	of	Patsystems’	pr oducts	
and	will	be	allowing	T akasbank,	their	
clearing	house	access	to	the	Risk	Informer	
pr oduct	to	benefit	their	clearing	services.	
T urkDEX	has	experienced	substantial	
business	gr owth	over	the	last	five	years	
and	in	2009	was	ranked	the	world’ s	22nd	
largest	futur es	exchange	by	volume,	with	
ambitions	for	further	gr owth.	T urkDEX	
selected	Patsystems	after	an	extensive	
global	selection	pr ocess	because	they	wer e	
confident	that	Patsystems’	technology	
would	ensur e	the	exchange	achieves	its	
futur e	gr owth	plans.	
billable users of Pro-Mark
723 Business Review
07
Patsystems Plc
Annual report and accounts 2009
Growth Strategy
•	 Incr ease 	 the 	 level 	 of 	 technology 	 spend 	 at 	 existing 	 and 	 new	
customer sites
• 	 C o n t i n u e 	 t o 	 e x t e n d 	 t h e 	 b r e a d t h 	 o f 	 c o m m o d i t y 	 t y p e s 	 a n d	
markets supported by the trading systems 
•	 Extend 	 geographical 	 coverage 	 to 	 emerging 	 gr owth 	 markets
• 	 C o n t i n u e 	 t o 	 d e v e l o p 	 t e c h n o l o g y 	 s o l u t i o n s 	 b o t h 	 a s	
components and single solutions
The	T urkDEX	pr oject	commenced	in	
autumn	2009	and	the	exchange	will	go	
live	with	the	complete	pr oduct	suite	late		
in	2010.
The	only	disappointment	in	2009	was	the	
news	that	the	T okyo	Grain	Exchange	
would	be	curtailing	its	business	activities	
due	to	adverse	trading	conditions	in	Japan	
and	the	impact	of	legislative	changes.		
This	r educed	our	anticipated	r evenue	fr om	
the	T okyo	Grain	Exchange	by	£0.1	million	
in	2009	and	with	a	r esulting	impact	in	
futur e	years.
Revenue	fr om	the	exchange	systems	
business	was	£3.0	million	for	the	year	
compar ed	to	£1.5	million	in	2008.
Risk Systems
Risk	Informer	is	our	market	leading	risk	
pr oduct	for	pr oviding	r eal-time	risk	margin	
information	on	client,	exchange	or	
pr oduct	positions	r egar dless	of	asset	class.
The	portfolio	of	blue	chip	customers	using	
the	Risk	Informer	pr oduct	has	gr own	in	
2009	with	both	JP	Morgan	and	Prudential	
Bache	pur chasing	the	pr oduct.	Risk	
Informer	was	licensed	as	part	of	the	
T urkDEX	pr oject	but	the	pr oduct	will		
not	be	installed	until	2010	which	is	
consequently	when	that	r evenue	will		
be	r ecognised. Patsystems Plc
Annual report and accounts 2009 08
Business Review
Chief Executive’ s  
Report continued
growth in business with existing clients in Asia
+
26%
Robust solutions  &    regional expertise
Risk	Informer	has	consistently	been	
selected	ahead	of	other	competitors’	
pr oducts	because	of	its	pr oven	scalability ,	
ease	of	integration	and	powerful		
analytical	tools.
W e	have	concluded	that	the	pr e-trade	risk	
capabilities	within	our	r ecently	developed	
pr oduct,	Risk	Alert,	would	be	mor e	
valuable	if	they	wer e	integrated	into	a	
single	risk	of fering	spanning	pr e-	and	
post-trade	activity .	This	pr oject	will	be	
pr ogr essed	in	2010.
Revenue	fr om	our	risk	systems	was	£1.5	
million	compar ed	to	£1.7	million	in	2008.	
(This	does	not	include	the	contribution	
fr om	the	T urkDEX	sale	which	will	be	
r ecognised	in	2010.)
Geographical Review
Asia Pacific
The	Asia	Pacific	r egion	has	had	an	
excellent	year ,	both	in	terms	of	gr owing	
business	with	existing	clients	and	winning	
new	business.	Business	with	existing	
clients	gr ew	by	26%	and	new	wins	in	the	
r egion	included	the	sale	of	our	Exchange	
and	T rading	System	to	the	Indonesian	
Commodity	and	Derivatives	Exchange	and	
sales	 of	 T rading	 Systems	 in	 Kor ea,	 Malaysia	
and	T okyo.	Sales	in	Asia	Pacific	account	for	
37%	(2008:	27%)	of	Gr oup	r evenues.
Europe
The	Eur opean	r egion	has	continued	to	
gr ow	during	2009	despite	the	pr evailing	
economic	climate.	Revenues	fr om	existing	
clients	gr ew	by	5%	and	new	wins	included	
the	sale	of	our	Exchange,	T rading	and	Risk	
Systems	to	T urkDEX	and	our	Risk	System	to	
JP	Morgan.	Sales	in	Eur ope	account	for	
34%	(2008:	35%)	of	Gr oup	r evenues.
North America
The	North	America	r egion	has	performed	
well	against	the	backdr op	of	the	pr evailing	
economic	climate	and	the	loss	of	one	of		
its	major	customers	–	Lehman	Br others	
Inc.	In	2008	Lehman	Br others	contributed	
r evenue	of	£0.8	million	against	almost	
nothing	in	2009.	Revenue	fr om	existing	
clients	was	br oadly	neutral	compar ed	to	
2008.	New	wins	in	the	r egion	included		
the	sale	and	installation	of	Risk	Informer	
to	Prudential	Bache.	Sales	in	North	
America	account	for	29%	(2008:	38%)		
of	Gr oup	r evenues.
Staff
Overall	staf f	numbers	have	marginally	
incr eased	with	162	employees	at	31	
December	2009	compar ed	to	156	on		
1	January	2009.
During	the	year	five	staf f	have	taken	the	
opportunity	to	seek	personal	development	
by	way	of	secondment	or	permanent	
transfers	between	our	of fices.
During	2009	we	moved	some	of	our	
support	operations	fr om	our	of fice	in	
Singapor e	to	Sydney	to	take	advantage	of	
a	gr eater	availability	of	multi-lingual	staf f.	
T o	support	our	continued	and	anticipated	
gr owth	in	Asia	we	have	established	a	
development	centr e	in	Beijing.	Ther e	ar e	
now	19	staf f	working	in	Beijing,	primarily	
developing	market	connectivity	for	the	
Asia	r egion	and	pr oviding	additional	
r esour ces	whilst	staf f	in	London	work	on	
major	pr ojects	such	as	that	for	the	T urkish	
Derivatives	Exchange.
Business Strategy
Patsystems’	business	objective	is	to	be	the	
exter nal	partner	of	choice	for	investment	
banks,	futur es	clearing	mer chants,	and	
exchanges	for	the	pr ovision	of	electr onic	
trading,	trade	matching	and	risk	
management	technology . Patsystems Plc
Annual report and accounts 2009 09
Business Review
Indonesian Commodity and 
Derivatives Exchange (‘ICDX’) 
After	an	extensive	global	selection	pr ocess,	
the	 Indonesian	 Commodity	 and	 Derivatives	
Exchange	(‘ICDX’)	selected	Patsystems	to	
pr ovide	an	integrated	exchange,	trading	
and	risk	management	solution.	The	
solution	will	consist	of	a	complete	
exchange	system	with	straight	thr ough	
pr ocessing,	matching,	clearing	and	
settlement	capabilities,	supported	by	the	
Patsystems	Matching	Engine.	The	solution	
will	also	include	Patsystems’	trading	
softwar e	with	inter net-deployable	
fr ont-end	platforms,	J-T rader	and	
Pr o-Mark,	along	with	Patsystems’	
pr e-trade	risk	management.	The	selection	
by	ICDX	illustrates	the	br eadth	of	
Patsystems’	capabilities,	with	flexible	
solutions	that	can	be	used	independently ,	
or	in	this	case,	integrated	into	one	
compr ehensive	Straight-Thr ough-
Pr ocessing	System.
Robust solutions  &    regional expertise
1
The	organic	gr owth	strategy	of	the	
business	has	four	components:
Incr ease	the	level	of	technology	spend	 •	
at	existing	and	new	customers	fr om	the	
existing	Patsystems	pr oducts
Continue	to	extend	the	br eadth	of	 •	
commodity	types	and	markets	
supported	by	the	trading	systems	by	
both	building	connectivity	and	
pr oviding	matching	technology	dir ectly	
to	exchanges
Extend	geographical	coverage	to	 •	
emerging	gr owth	markets
Continue	to	develop	technology	 •	
solutions	both	as	components	and	
single	solutions
Patsystems	has	demonstrated	pr ogr ess		
in	all	ar eas	of	the	gr owth	strategy		
during	2009.
The	acquisition	strategy	is	to	identify	and	
acquir e	businesses	that	pr ovide	
complimentary	technology	and	wher e	
shar eholder	value	can	be	cr eated	by	selling	
that	technology	thr ough	the	Patsystems	
global	sales	organisation.
Business Objectives and Outlook
Our	key	objectives	for	2010	ar e	as	follows:
Solidify	our	position	as	the	pr emier	 •	
pr ovider	of	risk	margin	systems	within	
the	world’ s	top	global	banks
Extend	our	sales	penetration	in	new	 •	
countries	with	additional	sales	in	
Malaysia,	Indonesia	and	Brazil
Deliver	hosted	services	to	new	and	 •	
existing	 customers	 within	 all	 the	 r egions	
we	operate
Continue	the	2009	sales	success	for	our	 •	
exchange	system	of fering
T rading	subsequent	to	the	year	end	has	
pr ogr essed	in	line	with	our	expectations	
and	we	r emain	confident	of	fulfilling		
our	gr owth	aspirations	acr oss	all	ar eas		
of	the	business.
David Webber
Chief	Executive	
8	February	2010 10
Patsystems Plc
Annual report and accounts 2009
Business Review
Finance Director’s 
Review
As Richard and David have already 
reported this has been another 
successful year both in terms of the 
level of adjusted profit and the 
amount of cash generated.
 
Adjusted profit increased to £3.9 
million from £3.7 million in 2008 and 
operating cash flow also improved by 
21% to £4.3 million from £3.6 million 
in the prior year. As a result of the net 
cash increase of £3.0 million the Group 
ended the year with a cash balance of 
£8.9 million. 
Adjusted	pr ofit	is	a	measur e	used	by	the	
analysts	that	cover	the	Gr oup.	Adjusted	
pr ofit	r emoves	volatile	non-cash	items	to	
show	an	underlying	level	of	pr ofitability	
that	enables	the	r esults	for	the	business	to	
be	compar ed	on	a	consistent	basis	for	
each	accounting	period.	
The	adjustments	made	to	the	r eported	
pr e-tax	pr ofit	on	or dinary	activities	ar e	to	
add	back	the	charge	or	cr edit	for;	(i)	shar e	
option	costs;	(ii)	the	marking-to-market	of	
derivatives	that	ar e	used	to	hedge	
overseas	for eign	curr ency	cash	flows;	and	
(iii)	amortisation	of	intangibles	other	than	
those	charges	for	inter nally	developed	
softwar e.	The	table	in	the	Ear nings	per	
Shar e	section	below	details	the	
adjustments	made	to	operating	pr ofit	in	
both	this	and	the	prior	year .
Revenue
T otal	Gr oup	r evenue	gr ew	by	£2.5	million	
(13%)	to	£22.1	million	fr om	£19.6	million	
last	year .
Trading Systems
T rading	systems	r evenue	gr ew	fr om	£16.4	
million	in	2008	to	£17.6	million	in	2009;	
an	incr ease	of	8%.
Exchange Systems
Exchange	systems	r evenue	doubled	to	
£3.0	million	fr om	£1.5	million	in	2008.
Risk Systems
Revenue	fr om	the	Risk	Systems	business	
was	£1.5	million	compar ed	to	£1.7	million	
in	2008.	As	discussed	in	the	Chief	
Executive’ s	r eport	this	excludes	the	
T urkDEX	Risk	Informer	sale,	which	will	be	
deliver ed	and	r ecognised	in	2010.	
Operating Expenses
Operating	expenses	wer e	in	line	with	2008	
at	£17.2	million.	Included	within	operating	
expenses	is	a	net	for eign	exchange	cr edit	
of	£0.6	million	in	2009	and	a	net	charge	
of	£0.2	million	in	2008.	Ther efor e	the	
underlying	incr ease	in	operating	expenses	
is	£0.8	million.
Staf f	costs	incr eased	by	£0.9	million	as	a	
r esult	of	the	addition	of	new	staf f,	less	
time	being	capitalised	into	development	
pr ojects	and	the	costs	of	establishing	a	
new	Chinese	Development	Centr e	in	the	
second	half	of	the	year .
At	31	December	2009	the	Gr oup	had	162	
permanent	staf f	(2008:	156),	3	contractors	
(2008:	3)	and	17	staf f	in	the	Chinese	
Development	Centr e.
In	addition	to	the	incr ease	in	staf f	costs,	
pr operty	costs	incr eased	by	£0.2	million	
primarily	due	to	the	r elocation	and	
associated	costs	of	moving	the	London	
of fice	fr om	the	Cottons	Centr e	to	
Riverside	House.	
The	above	cost	incr eases	wer e	of fset	by	a	
r eduction	in	the	amortisation	of	capitalised	
development	costs	and	of	intangibles	of	
£0.3	million.
Profit on Ordinary Activities  
Before Taxation
The	pr ofit	on	or dinary	activities	befor e	
taxation	was	£4.5	million	(2008:		
£2.1	million). Patsystems Plc
Annual report and accounts 2009 11
Business Review
Taxation
The	Gr oup	has	tax	losses	carried	forwar d	
of	£18.0	million	and	will	not	be	paying	tax	
on	its	pr ofits	in	most	taxation	jurisdictions	
for	a	number	of	years.	Small	amounts	of	
withholding	tax	may	or	may	not	arise		
fr om	time	to	time	depending	on	the	
geographical	locations	of	customers	with	
whom	the	Gr oup	does	business.	
The	curr ent	tax	charge	shown	on	the	face	
of	the	income	statement	of	£0.25	million	
comprises	a	corporation	tax	charge	in	
Japan	of	£0.22	million,	a	minimum	tax	
payment	in	the	US	of	£0.02	million	and	
withholding	tax	of	£0.01	million.	The	
deferr ed	taxation	charge	of	£0.87	million	
arises	largely	in	r espect	of	the	use	of	
trading	losses	in	the	year .
Retained Profit for the Year
Retained	pr ofit	for	the	year	r ose	to		
£3.4	million	(2008:	£0.6	million).	
Earnings Per Share
Basic	EPS	has	risen	to	1.9p	fr om	0.3p	and	
diluted	EPS	has	risen	to	1.8p	fr om	0.3p	
last	year .
The	Boar d	monitors	the	Company’ s	EPS	
performance	by	r efer ence	to	adjusted	
pr e-tax	pr ofit	less	curr ent	tax.	Deferr ed	tax	
is	excluded	fr om	this	measur e	because	of	
its	potential	volatility .	The	adjusted	EPS	
calculations	on	this	basis	ar e	as	follows:	
 2009 2008
P r o fi t	f o r	t h e	y e a r	a t t r i b u t a b l e	t o		
	 e qu i t y	h o l d e r s	o f	t h e	C o m p a n y	 £3,362,000	 £616,000
T a x a t i o n	 £1,124,000	 £1,450,000
P r o fi t	o n	o r d i n a r y	a c t i v i t i e s	b e f o r e	t a x a t i o n		 £4,486,000	 £2,066,000
Sh a r e	o p t i o n	c o s t s	 £261,000	 £329,000
M o v e m e n t	i n	f a i r	v a l u e	o f	h e d g i ng	i n s t r u m e n t s	 (£1,029,000)	 £883,000
A m o r t i s a t i o n	o f	i n t a ng i b l e s	 £203,000	 £391,000
		
P r e - t a x	a d j u s t e d	p r o fi t	o n	o r d i n a r y	a c t i v i t i e s	 £3,921,000	 £3,669,000
C u r r e n t	T a x a t i o n	 (£249,000)	 (£152,000)
P o s t - t a x	A d j u s t e d	P r o fi t	 £3,672,000	 £3,517,000
		
W e i g h t e d	a v e r a g e	n u m b e r	o f	sh a r e s	 180,628,990	 178,982,340
E f f e c t	o f	d i l u t i v e	sh a r e	o p t i o n s	 1,628,191	 4,462,772
	 182,257,181	 183,445,112
		
A d j u s t e d	E P S	 2.03p	 1.96p
	 +3.6%	
		
A d j u s t e d	d i l u t e d	E P S	 2.01p	 1.92p
	 +4.7%	
Intangible and Tangible Fixed Assets
Goodwill
Goodwill	r emains	unchanged	fr om	2008	
at	£3.3	million.	The	majority	of	this	
balance	(£3.0	million)	r elates	to	the	
acquisition	of	T amesis	in	2005.	As	
pr eviously	discussed	Risk	Systems	continue	
to	be	a	key	element	of	our	business.	
Intangible Assets
During	the	year	the	Gr oup	expended	£0.7	
million	on	intangible	assets	(2008:	£0.9	
million).	This	spend	included	£0.6	million	
of	capitalised	development	costs	in	r espect	
of	new	pr oducts	that	will	generate	
r evenues	in	futur e	years.	These	costs	will	
be	amortised	over	thr ee	to	five	years	fr om	
the	date	of	completion.	The	amortisation	
period	r eflects	the	expected	life	of	the	
particular	asset	capitalised.
Property Plant and Equipment
During	the	year	the	Gr oup	pur chased		
fixed	assets	totalling	£0.6	million	(2008:	
£0.13	million).	Of	the	total	additions	
appr oximately	£0.2	million	was	in	
connection	with	the	move	of	our	London	
of fice	and	£0.15	million	for	computer	
equipment	in	connection	with	establishing	
a	hosted	service	in	Japan.
Current Assets
Trade Receivables
T rade	r eceivables	have	decr eased	by	£1.8	
million	to	£2.6	million	fr om	£4.4	million,	
which	is	mainly	due	to	the	timing	of	large	
sales	ar ound	the	prior	year	end.	During	
the	year	the	Gr oup	has	not	suf fer ed	any	
significant	bad	debt	write-of fs. Patsystems Plc
Annual report and accounts 2009 12
Business Review
Finance Director’s 
Review continued
Pr epayments	and	accrued	income	have	
r emained	r elatively	constant	compar ed	
to	the	prior	year	at	£2.3	million.	(2008:	
£2.2	million).
Financial Assets/Liabilities – Derivative 
Financial Instruments
Financial	assets	r epr esent	the	“marked-to-
market“	value	of	derivatives	used	to	
hedge	the	Gr oup	curr ency	exposur es.	The	
derivatives	used	ar e	forwar d	contracts	and	
curr ency	options.	These	derivatives	ar e	
marked-to-market	monthly	and	the	
r esulting	“pr ofit	or	loss”	is	taken	to	the	
income	statement.	In	the	curr ent	year	a	
total	cr edit	of	£1.0	million	was	cr edited		
to	the	income	statement.	(2008:	£0.9	
million	charge).
Current Liabilities
The	key	movement	within	curr ent	liabilities	
r elates	to	a	decr ease	in	deferr ed	income		
of	£2.0	million.	This	is	primarily	due	to	the	
change	in	timing	of	billing	of	two	large	
customers	fr om	annually	in	advance	to	
monthly	and	quarterly	billing.
Other	elements	of	curr ent	liabilities	have	
fluctuated	only	slightly	compar ed	to	2008,	
with	year	end	balance	of	trade	payables	at	
£0.4	million	(2008:	£0.3	million),	other	tax	
and	social	security	of	£0.6	million	(2008:	
£0.7	million)	and	accruals	£1.5	million	
(2008:	£1.5	million).
Cash and Treasury 
Cash	and	cash	equivalents	incr eased	to	
£8.9	million	fr om	£5.9	million	in	2008.
The	Gr oup	generated	net	cash	inflows	
fr om	operating	activities	of	£4.3	million	
(2008:	£3.6	million).	£1.3	million	(2008:	
£1.0	million)	was	invested	in	intangible	
and	tangible	assets,	with	dividends	of		
£0.7	million	(2008:	£0.6	million)	being	
paid	during	the	year .	
The	Gr oup	is	exposed	to	for eign	curr ency	
risk	on	sales,	pur chases	and	cash	balances	
that	ar e	denominated	in	a	curr ency	other	
than	Sterling.	The	principal	curr ency	giving	
rise	to	this	risk	is	the	US	Dollar .	In	or der	to	
smooth	the	impact	of	significant	
movements	in	exchange	rates	the	Gr oup	
has	a	policy	to	carry	forwar d	cover	for	
75%	of	US$/£	net	anticipated	exposur e	
for	12	months	forwar d.	That	level	of	cover	
is	in	place	and	is	comprised	of	a	mixtur e		
of	forwar d	contracts	and	options.	The	
average	US$/£	exchange	rate	used	in	the	
2009	income	statement	was	1.57	(2008:	
1.84).	The	average	rate	of	the	hedges	in	
place	for	2010	is	1.60.	The	year	end	US$/£	
exchange	rate	was	1.59	(2008:	1.44).
Business Risks
The	principal	business	risks	r emain	the	
same	as	in	the	prior	year	and	these	ar e	
detailed	below .
Competition
T h e 	 G r o u p 	 o p e r a t e s 	 i n 	 a 	 g r o w i n g 	 b u t	
c o m p e t i t i v e 	 m a r k e t . 	 T h e r e 	 a r e 	 t h r e e 	 m a j o r	
s o f t w a r e 	 s u p p l i e r s 	 i n 	 t h e 	 g l o b a l 	 e l e c t r o n i c	
t r a d i n g 	 s y s t e m s 	 m a r k e t 	 f o r 	 f u t u r e s 	 a n d	
o p t i o n s , 	 o f 	 w h i c h 	 P a t s y s t e m s 	 i s 	 o n e . 	 T h e r e	
a r e 	 m a n y 	 s m a l l e r 	 c o m p a n i e s 	 w h o 	 s u p p l y	
s c r e e n s 	 b u t 	 n o t 	 m a r k e t 	 c o n n e c t i v i t y . 	 I n	 	
s u c h 	 a 	 m a r k e t 	 t h e r e 	 i s 	 a l w a y s 	 a 	 r i s k 	 t h a t	
c u s t o m e r s 	 c o u l d 	 m o v e 	 t o 	 o t h e r 	 c o m p e t i t o r s	
a n d 	 t h e r e 	 i s 	 a l w a y s 	 d o w n w a r d 	 p r e s s u r e	 	
o n 	 m a r g i n s . 	 P a t s y s t e m s 	 m i t i g a t e s 	 t h i s 	 r i s k	
b y 	 s u p p o r t i n g 	 i t s 	 b r a n d s 	 w i t h 	 a p p r o p r i a t e	
m a r k e t i n g 	 a c t i v i t y 	 a n d 	 b y 	 c o n s i s t e n t l y	
extending 	 its 	 market 	 connectivity 	 as 	 well 	 as	
impr oving 	 its 	 softwar e, 	 customer 	 support	
and 	 customer 	 car e.
Bad Debts
The	deterioration	of	the	global	economic	
climate	that	began	in	2008	has	continued	
into	2009,	albeit	at	a	lesser	pace.	This	has	
seen	the	financial	services	sector	suf fer	a	
particularly	dif ficult	time.	As	the	majority	
of	our	clients	ar e	financial	services	
organisations	the	Gr oup	considers	ther e	is	
a	risk	that	a	client	could	experience	
financial	dif ficulties	and	not	to	be	able	to	
pay	its	debts	as	they	fall	due.	In	or der	to	
mitigate	this	risk	Patsystems	r eviews	all	
client	accounts	on	a	monthly	basis	and	
takes	appr opriate	action	to	keep	accounts	
within	payment	terms.	
“Patsystems continues to be highly cash 
generative with an operating cash flow 
increase of 21%.” Patsystems Plc
Annual report and accounts 2009 13
Business Review
Customer Consolidation
Consolidation	within	the	financial	services	
industry	has	occurr ed	over	the	past	few	
years	and	further	consolidation	r emains	a	
risk.	Wher e	consolidation	takes	place	the	
risk	to	the	Gr oup’ s	business	is	typically	to	
the	r evenues	associated	with	market	
connectivity	and	support	and	
maintenance.	W e	mitigate	this	risk	by	
actively	adding	new	customers,	pr oducts	
and	asset	categories	to	our	portfolio.	
Revenue Profile
82%	of	Patsystems’	r evenue	is	r ecurring		
in	natur e	and,	in	stark	contrast	to	many	
technology	companies,	this	gives	a	level		
of	guarantee	for	a	minimum	level	of	
operating	pr ofit	for	the	business	on	an	
annual	basis.
2009
1.8
2008
0.3
2007
1.0
2009
2.0
2008
1.9
2007
1.7
2009
723
2008
571
2007
375
2009
7,062
2008
6,852
2007
7,026
Diluted EPS (pence)
Diluted adjusted EPS (pence)
Pro-Mark Screens deployed at year end
Average number of active users during the year
Adjusted pre-tax profit (£m)
Operating profit
Operating profit as a percentage of sales
Revenue (£m)
2009
22.1
2008
19.6
2007
17.0
2009
19.7
2008
9.9
2007
12.3
2009
3.9
2008
3.7
2007
3.0
2009
4.3
2008
1.9
2007
2.1
2009
4.3
2008
3.6
2007
2.6
Operating cash flow (£m)
Key Performance Indicators
However ,	with	pr oducts	such	as	our	Risk	
of ferings	and	our	Exchange	Systems	
playing	an	integral	r ole	in	the	Gr oup’ s	
futur e	gr owth	expectations	and	the	
significant	r evenues	fr om	these	
opportunities	being	non-r ecurring	in	
natur e,	the	pr opensity	for	organisations	to	
defer	technology	investments	during	
tougher	economic	climates	is	a	risk	to		
our	business.	
It	is	curr ently	too	early	for	us	to	assess	to	
what	extent,	or	if	at	all,	the	economic	
conditions	will	impr ove	into	2010	and	
how	this	will	impact	client	pur chasing	
decisions.	W e	however	enter	2010	with	a	
str ong	sales	pipeline	acr oss	all	r egions	of	
our	business	and	ar e	hopeful	of	converting	
these	into	2010	r evenue.
Martin Thorneycroft
Finance 	 Dir ector
8 	 February 	 2010 Patsystems Plc
Annual report and accounts 2009 14
Business Review
1 2
4 5
3
Our Board Patsystems Plc
Annual report and accounts 2009 15
Business Review
1. Richard Last – Chairman,  
Non-Executive Director
Age	52
Richar d	is	Chairman	and	Non-Executive	
Dir ector	of	AIM	listed	Knowledge	
T echnology	Solutions	plc,	a	financial	
softwar e	business	and	a	Non-Executive	
Dir ector	of	The	British	Smaller	Companies	
OCT	plc,	The	British	Smaller	T echnology	
Companies	VCT	2	plc,	wher e	he	is	also	
Chairman,	both	of	which	ar e	listed	on	the	
London	Stock	Exchange.	He	is	also	a	
Non-Executive	Dir ector	of	AIM	listed	
companies	Lighthouse	Gr oup	plc	and	
Cor er o	plc	and	Dir ector	of	a	number	of	
private	companies	including	Sphinx	CST	
Limited,	APD	Communications	and	CSE	
Global	UK	Limited;	both	IT	companies.	
Richar d,	a	Fellow	of	the	Institute	of	
Charter ed	Accountants,	holds	a	BA	(Hons)	
fr om	Shef field	University .
2. David Webber – Chief Executive
Age	44
David	was	appointed	Chief	Executive	of	
Patsystems	in	January	2006.	He	was	
formerly	Chief	Executive	of	AttentiV	
Systems	Gr oup,	wher e	his	business	
leadership	saw	the	Company	thr ough	
significant	expansion	by	both	organic	
gr owth	and	acquisition.	He	led	the	
management	buyout,	subsequent	AIM	
flotation	of	the	business	and	was	r etained	
as	Chief	Executive	when	AttentiV	Systems	
Gr oup	plc	was	acquir ed	by	T ietoEnator	in	
May	2005.	David,	a	member	of	the	
Institute	of	Charter ed	Accountants	since	
1989,	holds	a	BSc	(Economics)	fr om	the	
London	School	of	Economics.
3. Martin Thorneycroft – Finance 
Director
Age	48
Martin	joined	Patsystems	as	Finance	
Dir ector	in	July	2004.	He	was	pr eviously	
Finance	Dir ector	of	Pr ofile	Media	Gr oup	
plc.	Martin,	a	member	of	the	Institute	of	
Charter ed	Accountants	having	qualified	
with	Er nst	and	Y oung	in	1986,	holds	a	B.	
Com.	fr om	Birmingham	University .
4. John Priestley – Non-Executive 
Director, Chairman Of The Audit 
Committee
Age	60
John	has	over	30	years’	experience	in	the	
softwar e	and	services	sector	and	in	2003	
concluded	a	13	year	car eer	with	British	
T elecommunications	as	Dir ector	of	
Business	Development	for	Syntegra.	
Pr eviously ,	he	was	a	Dir ector	of	Kapiti	and	
a	Divisional	Dir ector	with	Hoskyns.	
5. Steve Sparke – Non-Executive 
Director, Chairman Of The 
Remuneration And Nomination 
Committee
Age	51
Steve	has	had	a	29	year	car eer	in	the	City	
spanning	inter est	rate	trading	and	futur es	
and	options	br oking	and	is	curr ently	
Chairman	of	the	Futur es	and	Options	
Association.	He	was	Global	Head	of	UBS	
Exchange	T raded	Derivatives	business	until	
April	2006	and	has	driven	a	number	of	the	
technology-led	changes	within	the	FCM	
industry .	Steve	was	a	Non-Executive	
Dir ector	of	Eur onext.Lif fe	and	chair ed	the	
Exchange’ s	 Audit	 and	 Risk	 Committee	 until	
November	2007.	Curr ently	Steve	holds		
the	position	of	Gr oup	Chief	Operating	
Of ficer	of	Mar ex	Financial	Limited.	Steve	
graduated	with	a	law	degr ee	fr om	
Nottingham	University	in	1979. Patsystems Plc
Annual report and accounts 2009 16
Governance
The Directors present their report for Patsystems Plc and the audited financial statements for the year ended 31 December 2009.
Principal Activities
The principal activities of the Group are the development, distribution and support of software enabling:
the electronic trading of financial products on global trading exchanges •	
real time trade capture, valuation and risk management for the structured finance market •	
Results and Dividends
The profit on ordinary activities attributable to shareholders after taxation amounted to £3,362,000. (2008: £616,000). 
The proposed dividend for the year is detailed in the Chairman’s Statement on page 5.
Review of Business and Future Developments
The Directors are pleased with the Group’s performance during the year and its position at 31 December 2009. The Directors are 
confident that performance will continue to improve in 2010 and beyond. 
The review section of this report contains a detailed assessment of the business and future projects. 
Reviews of the risks faced by the business are detailed in the Chief Executive’s Report and the Finance Director’s Review. The Finance 
Director’s Review also details the Key Performance Indicators (‘KPIs’) for the year.
Proceeds from Share Issues During the Year
£682,000 was received in proceeds from the exercise of share options during the year ended 31 December 2009 (2008: £86,000).
Substantial Shareholdings
On 3 February 2010, the following holdings of 3% or more of the issued share capital of Patsystems Plc were known to  
the Company: 
Beneficial owner, as notified to the Company Number of shares %
ION Trading UK Limited  52,851,191 28.52
Brewin Dolphin Limited  14,170,175 7.65
First Clearing L.L.C.  12,687,500 6.85
Herald Investment Management Ltd  12,000,000 6.47
Sedaf Holdings SA  10,389,600 5.61
Cazenove Capital Management Limited  6,333,416 3.42
Directors
The Directors of the Company, together with those who served during the year, are as follows:
Executive Directors  Non-Executive Directors 
D Webber R Last 
M Thorneycroft  J Priestley
 S Sparke
Directors and their interests
Ordinary shares of 1p each in      3 February 31 December 31 December
Patsystems Plc      2010 2009 2008
D Webber      875,000 875,000 825,000
M Thorneycroft      68,000 68,000 40,000
R Last      786,886 786,886 786,886
J Priestley      91,017 91,017 91,017
S Sparke      250,000 250,000 250,000
Directors’ Report Patsystems Plc
Annual report and accounts 2009 17
Governance
Details of the Directors who have an interest in share options are 
disclosed in the Remuneration report.
Save as disclosed in this report and note 28, there were no other 
contracts subsisting during or at the end of the financial year in 
which a Director of the Company is or was materially interested.
Employee Involvement
The Directors recognise the importance of employee involvement 
established by good communications and working relationships. 
The decentralised nature of the Group’s activities necessitates that 
the practical application of this policy is the responsibility of local 
management in a manner appropriate to their circumstances.
Employment Policies
The Group is committed to the terms of the Codes of Practice for 
the elimination of all or any discrimination and to the promotion 
of equality of opportunities in employment.
It is Group policy to afford equal opportunities to all employees 
and job applicants. No employee or job applicant is less 
favourably treated than another on the grounds of their sex, 
sexual orientation, age, marital status, religion, race, nationality, 
ethnic or national origin, colour or disability and all appointments 
and promotions are determined solely by merit.
It is also Group policy to encourage and assist in the 
employment, training, re-training and career development of 
disabled persons where possible, having regard to their suitability 
for a particular vacancy and the nature of the Group’s activities. 
In the event that employees become disabled during 
employment the Group will where possible continue their 
employment and arrange appropriate training.
Responsibility for monitoring the effective working of these 
policies is vested in Martin Thorneycroft, the Finance Director.
Financial Instruments and Financial Risk Management
The Group’s activities expose it to a variety of financial risks and  
it has developed and operates an overall risk management 
programme that recognises the unpredictability of financial 
markets and seeks to minimise potential adverse effects on the 
Group’s financial performance. 
Financial risk management is under the control of the Finance 
Director and is carried out centrally for the Group in compliance 
with policies approved and monitored by the full Board. The 
Board regularly reviews the effectiveness of these policies 
examining specific areas including foreign exchange risk, interest 
rate risk, credit risk and the extent to which financial instruments 
are being used to hedge certain risk exposures. 
Details of the Group’s exposures to market, credit and liquidity 
risks are set out in note 3 to the financial statements.
Research and Development
During the year the Company continued to invest in research and 
development (‘R&D’). All expenditure, whether incurred through 
internal staff costs or through third party suppliers, relating to 
R&D that satisfies the criteria for capitalisation under IAS 38, 
‘Intangible assets’, is capitalised. Otherwise it is written off to the 
income statement in the period incurred.
Creditor Payment Policy
Given the international nature of the Group’s operations, there is 
no standard code for the Group in respect of payments to 
suppliers. Operating subsidiaries are responsible for agreeing 
terms and conditions for their business transactions when orders 
for goods and services are placed, ensuring that suppliers are 
aware of the terms of payment and including the relevant terms 
in contracts where appropriate. These arrangements are adhered 
to provided that suppliers meet their contractual commitments.
Creditor days have not been calculated for the Company as it is 
an investment holding company.
Charitable and Political Donations
The Group made charitable contributions of £2,409 during the 
year (2008: £500). The current year donations were made to 
Alzheimers Association, The Manna Society, East Anglian Air 
Ambulance, The Tiltas Trust and St Raphael’s Hospice. No political 
donations were made in 2009 or 2008.
Disclosure of Information to Auditors
For each of the persons who were Directors at the time this 
report was prepared, the following applies:
So far as the Directors are aware, there is no relevant •	
information of which the Company’s auditors are unaware; 
and
The Directors have taken all the steps that they ought to have •	
taken as Directors in order to make themselves aware of any 
relevant audit information and to establish that the 
Company’s auditors are aware of that information.
Disclosure and Transparency Rules (‘DTR’)
The Company has complied with the DTR so far as they are 
applicable to AIM listed companies.
Annual General Meeting
The Notice convening the Annual General Meeting (‘AGM’) 
together with the proposed resolutions is being sent to 
shareholders. The AGM will be held on 27 April 2010.
Directors’ Report 
continued Patsystems Plc
Annual report and accounts 2009 18
Governance
Statement of Directors’ Responsibilities
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 the Group, as at 
the end of the year, and of the profit or loss of the Group for the 
year. In preparing those financial statements, the Directors are 
required to:
1. Select suitable accounting policies and then apply  
them consistently;
2. Make judgements and estimates that are reasonable  
and prudent;
3. State whether applicable accounting standards have been 
followed, subject to any material departures disclosed and 
explained in the financial statements;
4. Prepare the financial statements on the going concern basis 
unless it is inappropriate to presume that the Group will 
continue in business.
The Directors confirm that the financial statements comply with 
the above requirements.
The Directors are responsible for the maintenance and integrity 
of the Patsystems website. Information published on the internet 
is accessible in many countries with different legal requirements. 
Legislation in the United Kingdom governing the preparation and 
dissemination of financial statements may differ from legislation 
in other jurisdictions.
The Directors are responsible for maintaining proper accounting 
records which disclose with reasonable accuracy at any time the 
financial position of the Company and the Group and enable 
them to ensure that the financial statements comply with the 
Companies Act 2006 (as amended from time to time). The 
Directors are also responsible for safeguarding the assets of the 
Company and the Group and hence for taking reasonable steps 
for the prevention and detection of fraud and other irregularities.
For and on behalf of the Board of Patsystems Plc.
Martin Thorneycroft
Company Secretary 
8 February 2010
Registered office: Riverside House, 2A Southwark Bridge Road, 
London SE1 9HA
Directors’ Report 
continued Patsystems Plc
Annual report and accounts 2009 19
Governance
The following statement of corporate governance reflects the 
position of the Group as at 31 December 2009.
The Board is responsible for the Group’s corporate governance 
policy and recognises the importance of high standards of 
integrity, and consistently seeks to apply the principles set out in 
the Combined Code on Corporate Governance (the ‘Code’) to 
the extent that they are appropriate for, and applicable to, a 
company of Patsystems’ size quoted on the Alternative 
Investment Market (‘AIM’).
Directors
Details of the dates of appointment and resignation of Directors 
within the year are shown in the Directors’ Report. All Directors 
are subject to re-election within a three-year period. The roles of 
the Chairman and Chief Executive are separate and have been so 
throughout the year.
The Non-Executive Directors are considered to be ‘independent’ 
within the definition contained in the Code. 
The Non-Executive Directors meet, without the presence of the 
Executive Directors, whenever it is appropriate for them to do so.
All the Directors have access to the advice of the Company 
Secretary and may, in furtherance of their duties, take 
independent legal and financial advice at the Company’s 
expense. They also have access to the minutes of the Board, in 
which any concerns expressed by them regarding matters 
pertaining to the Group are recorded.
While there is no formal process, the performance and 
effectiveness of each Director, including the Non-Executive 
Directors, is assessed on an on-going basis by the other  
members of the Board.
Board Meetings
The Board generally meets monthly and at such other times as 
required, and receives regular reports on a wide range of key 
issues including operational performance, risk management and 
corporate strategy.
The Board’s accountability is demonstrated by the adoption of a 
formal schedule of matters specifically reserved to the Board for 
its decision concerning all key areas across the Group’s activities, 
thereby ensuring that all major decisions affecting the Group are 
taken at Board level. All the Directors are free to bring any matter 
to the attention of the Board, at any time.
Committees
The Audit Committee and the combined Remuneration and 
Nominations Committee meet at least twice a year.
Audit Committee
The Audit Committee is chaired by John Priestley and comprises 
all the Non-Executive Directors. The external auditors, together 
with the Finance Director and other financial staff are invited to 
attend these meetings as and when required.
In accordance with its terms of reference the principal function 
of this committee is to determine the appropriateness of 
accounting policies to be used in the Group’s annual results. In 
addition the Committee is responsible for monitoring the 
independence of the Group auditors, assessing the Group’s audit 
arrangements and the Group’s system of internal controls, and 
reviewing the half-yearly and annual results before publication.
Remuneration and Nominations Committee
The Remuneration and Nominations Committee comprises all the 
Non-Executive Directors and is chaired by Steve Sparke. 
In accordance with its terms of reference the Committee 
determines the level and make-up of remuneration (including 
bonuses and options) of the Executive Directors and certain 
senior management. This also includes formulation of 
remuneration policy throughout the Group, embracing both 
share options and bonuses.
The Committee also evaluates the balance of skills, knowledge 
and experience on the Board and considers all new Board 
appointments and re-appointments against this evaluation.
The Report of the Board on Directors’ Remuneration and on 
Group Remuneration Policy giving details of Company policy and 
individual Directors’ remuneration is set out on pages 21 to 23. 
The remuneration arrangements of the Non-Executive Directors 
are determined by the Board as a whole.
The notice period provisions contained in the Directors’ service 
agreements are summarised on page 22 of these accounts.
Executive Management Committee
The Executive Management Committee (the ‘EMC’), under the 
Chairmanship of the Chief Executive, or in his absence the 
Finance Director, meets monthly and is responsible for the 
day-to-day running of the Group. The members of the EMC are 
the two Executive Directors of the Company, together with the 
five key business heads who are not Directors.
Relations with Shareholders
The Board welcomes the views of shareholders.
The AGM is used as an opportunity to communicate with 
shareholders. All shareholders are encouraged to attend the 
Company’s AGM, in order to take advantage of the opportunity 
to ask questions of the Directors.
Shareholders may also contact the Company in writing or via its 
website, which is regularly updated. Additional information is 
supplied through the circulation of the Interim Report and the 
Annual Report and Accounts. During the year the Company 
issued a series of announcements to the Stock Exchange. The 
Chief Executive, Finance Director and the Chairman from time to 
time meet individual and institutional shareholders and provide 
such information as is permissible in order to facilitate a better 
understanding of the Group’s business and operations.
Statement of Corporate Governance Patsystems Plc
Annual report and accounts 2009 20
Governance
Internal Control
The Board of Directors has overall responsibility both for the 
Group’s system of internal controls, which includes internal 
financial controls and for reviewing their effectiveness. The 
Directors recognise that no system of internal control can provide 
absolute assurance. The Group’s systems are designed to manage 
the risk of failure to achieve business objectives and therefore 
can only provide the Directors with reasonable assurance against 
material misstatement or loss.
The key elements of the Group’s internal control system, which 
have been operational for the whole of the financial year, are  
as follows:
Management Structure •	
 The Board has overall responsibility for the Group and there is 
a formal schedule of matters specifically reserved for decision 
by the Board. Each Executive Director has been given 
responsibility for specific aspects of the Group’s affairs. 
Reporting to the Chief Executive, is the EMC which is 
responsible for the day to day running of the Group’s affairs.
Monitoring Systems used by the Board •	
 The Board receives regular reports on the financial and 
business performance of the Group. The Board is regularly 
advised through these reports on the working capital position 
and financial performance relative to the Group’s approved 
budget.
Internal Audit •	
 The Board reviews from time to time the need for an Internal 
Audit function and remains of the opinion that the systems of 
internal financial control are appropriate to the Group’s 
present activities and that such a function is unnecessary.
Going Concern
The Directors have reasonable expectation that the Company 
and the Group have adequate resources to continue in 
operational existence for the foreseeable future. For this reason 
they continue to adopt the going concern basis in preparing the 
financial statements.
Compliance Statement
Corporate Governance procedures are subject to regular review 
by the Board. Throughout the year the Directors believe that the 
Group has complied with the provisions as set out in Section 1 of 
the Code, to the extent that they are appropriate for, and 
applicable to, a company of Patsystems’ size quoted on AIM.
For and on behalf of the Board of Patsystems Plc.
Martin Thorneycroft
Company Secretary
8 February 2010
Statement of Corporate Governance
continued Patsystems Plc
Annual report and accounts 2009 21
Governance
Report of the Board on Directors’ Remuneration and on  
Group Remuneration Policy
Remuneration Committee
The Remuneration Committee, which comprises all of, and only, 
Non-Executive Directors, determines Group remuneration policy 
and the remuneration (including bonuses and options) of 
Executive Directors and certain other senior management.
Policy on Group Remuneration
The Company’s policy is to set the remuneration of senior 
executives (including Executive Directors) at a level to attract and 
retain executives of appropriate ability and experience to manage 
the affairs of the Company. This approach contains costs, 
improves employee benefits and increases the Company’s 
competitiveness in the market for scarce skills. In formulating its 
remuneration policy, the Remuneration Committee is mindful of 
the competitive pressures inherent in a sector that straddles both 
the software and financial services industries. It is the Company’s 
policy that a significant element of total remuneration is related 
to the financial performance of the Company. Remuneration is 
reviewed annually.
The Remuneration Package
The remuneration package comprises base salary and benefits, 
pension contributions, annual bonus and long term incentive 
arrangements.  All senior employees of the Group (including  
the Executive Directors) are remunerated using the policy 
described below.
Base Salary and Benefits
Base salary takes into account the performance of the individual 
and information from independent sources on market levels of 
remuneration. The Executive Directors’ basic salaries are reviewed 
by the Committee prior to the beginning of each year.  The 
Executive Directors are also entitled to private medical, death in 
service, critical illness and permanent health insurance and 
subsidised health club membership.
Pension Contributions
The Group operates a defined contribution pension scheme for 
eligible UK employees.  Neither of the Executive Directors are 
members of this scheme; the Executive Directors receive a 
Company contribution to their individual pension arrangements.
Annual Bonuses
Bonus scheme arrangements are in place for all members of 
staff, including the Executive Directors.  Bonuses for the 
Executive Directors are linked to the performance of the Group 
and staff bonuses are based on individual performance
Long-term Incentives
Share Options
The Group operates two share option plans – an Enterprise 
Management Incentive Share Option Scheme (‘EMI’) and a 
standard unapproved share option scheme.  All senior staff, 
including the Executive Directors participate in both schemes.
Options awarded under the first of three main grants vested in 
full in 2006. 76% of the options awarded under the second and 
third grants have currently vested and the remaining 24% of 
these options will vest on 8 February 2010.
The Company has also made a number of special awards under 
both schemes to Directors and senior employees which will vest 
in between one and three years from the date of grant subject to 
certain performance conditions. 
Cash-Based Long-Term Incentive Scheme
During 2007 the Group introduced a new cash-based long-term 
incentive scheme (‘the Cash Scheme’). The maximum conditional 
award allowable under the three year Cash Scheme is 100% of 
salary with each award vesting no earlier than the third 
anniversary from date of grant and vesting being subject to 
achievement of performance conditions and continued 
employment (‘the Awards’). When the Awards to the Directors 
vest, they will be expected to use 50% of the net of tax amount 
to purchase the Company’s shares in the open market until such 
time as a total personal shareholding has been achieved which is 
equivalent to 100% of base salary. In the event of a change of 
control (eg a takeover) the Awards will vest provided the 
Remuneration Committee is satisfied that it is fair and reasonable 
for them to do so (eg. that the terms of a takeover implicitly 
reflect prospective performance on a scale that would have 
resulted in full vesting).
 
The performance conditions attached to the Awards require 
adjusted fully diluted pre-deferred tax EPS growth from the  
2006 financial year to the 2009 financial year of between  
10% compound per annum to 30% compound per annum  
for between 30% and 100% of the Award to vest. The Awards 
vest on a straight line basis between minimum and maximum 
thresholds. The scheme is expected to vest in full during the first 
half of 2010.
Share-Based Long-Term Incentive Scheme
It is the Remuneration Committee’s intention to introduce a new 
scheme from 1 January 2010. The Scheme will be open to the 
Executive Directors and senior staff.
An annual award of shares will be made to participants on an 
individual basis up to a maximum award of 50% of basic salary. 
The actual level of award will be determined on the growth in 
EPS in the previous year. No award will be made if EPS (calculated 
on an adjusted profit basis as detailed in the Finance Director’s 
review) growth is less than 5%. The maximum award will be 
granted if EPS growth reaches 20%, with a pro rata award being 
granted between 5% and 20%. Once granted the shares will 
vest four years from date of grant provided the individual is still 
employed by the Company, and compound annual EPS growth 
over the relevant period is at least 10%. If the compound annual 
EPS growth is less than 10% then the award will lapse. Patsystems Plc
Annual report and accounts 2009 22
Governance
DIRECToRS’ EMoluMENTS
       Benefits in Total Total
    Salary/fees Bonus kind 2009  2008
    £ £ £ £ £
Executive Directors     
D Webber    250,000 150,000 5,039 405,039 467,077
M Thorneycroft    158,000 94,800 3,899 256,699 293,912
     
Non-Executive Directors     
R Last    45,000 – – 45,000 40,842
J Priestley    30,000 – – 30,000 30,000
S Sparke    30,900 – – 30,900 30,900
S Millman*    – – – – 24,590
          513,900 244,800 8,938 767,638 887,321
* S Millman resigned on 17 April 2008
Pensions
The Group operates a defined contribution pension scheme for eligible UK employees. The Executive Directors that served during the 
year were not members of this scheme. The following contributions to their private pensions were charged to the income statement:
       2009 2008
       £ £
D Webber       25,960 24,600
M Thorneycroft       16,407 15,509
       42,367 40,109
Directors’ contractual terms
  D Webber M Thorneycroft R Last J Priestley S Sparke
Date appointed    03-Jan-06 05-Jul-04 17-Feb-03 01-Jan-07 29-Sept-06
Service contract*    Yes Yes No No No
Notice period     
– by Company    12 months 6 months 3 months 3 months 3 months
– by Director    12 months 6 months 3 months 3 months 3 months
Benefits    Death in service Death in service – – –
Pension    10% 10% – – –
* All the Non-Executive Directors are engaged under ‘letters of appointment’.
In the event that an offer for the entire issued share capital of Patsystems Plc becomes wholly unconditional, the Executive and 
Non-Executive Directors are entitled to 12 months notice.
Directors’ share options
    Outstanding  Outstanding
    options at Exercised options at  
  Scheme Exercise 31 December during 31 December Exercise Expiry
  type price 2008 the year 2009 date date
D Webber  EMI 13.75p 727,272 (727,272) – Note 1 14–Feb–16
  Unapproved 13.75p 3,272,728 (3,272,728) – Note 2 14–Feb–16
  Unapproved 29.00p 1,000,000 – 1,000,000 Note 3 19–Apr–17
    5,000,000 (4,000,000) 1,000,000  
       
M Thorneycroft  EMI 15.25p 655,737 – 655,737 Note 4 30–Jul–14
  Unapproved 15.25p 344,263 – 344,263 Note 5 30–Jul–14
  Unapproved 18.00p 500,000 – 500,000 Note 5 17–Mar–15
    1,500,000 – 1,500,000  
Report of the Board on Directors’ Remuneration and on  
Group Remuneration Policy continued Patsystems Plc
Annual report and accounts 2009 23
Governance
The IFRS 2 charge to the income statement in relation to these options was £69,000.
Note 1: These options were granted under a special award of the Enterprise Management Incentive (‘EMI’) Scheme. These options 
were exercised on the 22 December 2009. The aggregate on the gain made on these options was £52,727. 
Note 2: These options were granted under special awards of Part B (Inland Revenue Unapproved) of the Patsystems Plc 2003 Share 
Option Scheme. These options were exercised on the 22 December 2009. The aggregate on the gain made on these options was 
£237,273.
Note 3: These options were granted under special awards of Part B (Inland Revenue Unapproved) of the Patsystems Plc 2003 Share 
Option Scheme. These options can be exercised after a period of three years after the date of grant but subject to the Group 
achieving growth in adjusted fully diluted pre-deferred tax EPS from the 2006 financial year to the 2009 financial year of 10% 
compound per annum.
Note 4: Options were granted under the second and third awards of the EMI Scheme. 76% of the options awarded under the 
second and third grants have currently vested and the remaining 24% of these options will vest on 8 February 2010.
Note 5: These options were granted under the second and third awards of Part B (Inland Revenue Unapproved) of the Patsystems Plc 
2003 Share Option Scheme.  These options all vested in 2008.
The mid-market price of the Company’s shares at the end of the financial year was 22p, and the range of market prices during the 
year was 13p to 26p.
Directors’ Awards under the Cash-Based long-Term Incentive Scheme
      Maximum
    Date of  of Award  Vesting
    Award  £  date
D Webber    19.04.07  130,000  31.03.10
M Thorneycroft    19.04.07  85,000  31.03.10
The performance conditions attached to the Awards require adjusted fully diluted pre-deferred tax EPS growth from the 2006 
financial year to the 2009 financial year of between 10% compound per annum to 30% compound per annum for between 30% 
and 100% of the Award to vest. The Awards vest on a straight line basis between minimum and maximum thresholds.  Further 
details on the Awards are given on page 21.
The charge to the income statement for the year ended 31 December 2009 in relation to these Awards was £92,000.
Steve Sparke
Chairman, Remuneration Committee
8 February 2010 Patsystems Plc
Annual report and accounts 2009 24
Financial Statements
In this section
Independent Auditors’ Report  
to the Members of Patsystems Plc 25
Consolidated Income Statement 26
Consolidated Statement of  
Comprehensive Income 26
Consolidated Balance Sheet 27
Consolidated Statement of  
Changes in Equity 28
Consolidated Cash Flow Statement 29
Notes to the Financial Statements 30
Independent Auditors’ Report to the  
Members of Patsystems Plc 53
Company Balance Sheet 54
Notes to the Financial Statements 55
Directors and Advisers 61 Patsystems Plc
Annual report and accounts 2009 25
Financial Statements
Independent Auditors’ Report to the Members of Patsystems Plc  
We have audited the Group financial statements of Patsystems 
Plc for the year ended 31 December 2009 which comprise the 
primary financial statements such as the Consolidated Income 
Statement, the Consolidated Statement of Comprehensive 
Income, the Consolidated Balance Sheet, the Consolidated 
Statement of Changes in Equity, the Consolidated Cash Flow 
Statement and the accounting policies and the related notes.  
The financial reporting framework that has been applied in  
their preparation is applicable law and International Financial 
Reporting Standards (‘IFRSs’) as adopted by the European Union.
Respective Responsibilities of Directors and Auditors
As explained more fully in the Directors’ Responsibilities 
Statement set out on page 18, the Directors are responsible for 
the preparation of the financial statements and for being 
satisfied that they give a true and fair view. Our responsibility is 
to audit the financial statements in accordance with applicable 
law and International Standards on Auditing (UK and Ireland). 
Those standards require us to comply with the Auditing Practices 
Board’s Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and 
only for the Company’s members as a body in accordance with 
Sections 495 and 496 of the Companies Act 2006 and for no 
other purpose.  We do not, in giving these opinions, accept  
or assume responsibility for any other purpose or to any other 
person to whom this report is shown or into whose hands it  
may come save where expressly agreed by our prior consent  
in writing.
Scope of the Audit of the Financial Statements
An audit involves obtaining evidence about the amounts  
and disclosures in the financial statements sufficient to give 
reasonable assurance that the financial statements are free  
from material misstatement, whether caused by fraud or error. 
This includes an assessment of: whether the accounting policies 
are appropriate to the Group’s circumstances and have  
been consistently applied and adequately disclosed; the 
reasonableness of significant accounting estimates made  
by the directors; and the overall presentation of the financial 
statements.
Opinion on Financial Statements 
In our opinion the Group financial statements: 
give a true and fair view of the state of the Group’s affairs as •	
at 31 December 2009 and of its profit and cash flows for the 
year then ended;
have been properly prepared in accordance with IFRSs as •	
adopted by the European Union; and 
have been prepared in accordance with the requirements of •	
the Companies Act 2006.
Opinion on Other Matter Prescribed by the  
Companies Act 2006
In our opinion the information given in the Directors’ Report for 
the financial year for which the Group financial statements are 
prepared is consistent with the Group financial statements.
Matters on Which we are Required to Report by Exception
We have nothing to report in respect of the following matters 
where the Companies Act 2006 requires us to report to you if, in 
our opinion: 
certain disclosures of Directors’ remuneration specified by law •	
are not made; or 
we have not received all the information and explanations we •	
require for our audit. 
Other Matter 
We have reported separately on the Parent Company financial 
statements of Patsystems Plc for the year ended 31 December 
2009. 
Nigel Reynolds 
(Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors London 
8 February 2010 Patsystems Plc
Annual report and accounts 2009 26
Financial Statements
Consolidated Income Statement 
for the year ended 31 December 2009 
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2009 
       2009 2008
      Notes £’000 £’000
Revenue      4 22,097 19,627
Cost of sales         (555) (485)
Gross profit        21,542 19,142
Operating expenses         (17,196) (17,203)
Operating profit       5 4,346 1,939
Finance income       7 140 127
Profit on ordinary activities before taxation         4,486 2,066
Current taxation charge        (249) (152)
Deferred taxation charge        (875) (1,298)
Taxation – total      8 (1,124) (1,450)
   
Profit for the year attributable to equity holders of the Company       3,362 616
Earnings per ordinary share       10  
– basic       1.9p 0.3p
– diluted       1.8p 0.3p
The income statement has been prepared on the basis that all operations are continuing operations.
       2009 2008
       £’000 £’000
Profit for the year       3,362 616
Other comprehensive income:   
Foreign exchange adjustment on foreign currency net investments     (162) 628
Total comprehensive income for the year        3,200 1,244 Patsystems Plc
Annual report and accounts 2009 27
Financial Statements
Consolidated Balance Sheet
at 31 December 2009 
       2009 2008
      Notes £’000 £’000
ASSETS   
Non-current assets   
Goodwill      12 3,251 3,251
Intangible assets      13 3,426 3,527
Property, plant and equipment      14 689 516
Deferred tax assets      15 4,945 5,877
Trade and other receivables      17 326 519
         12,637 13,690
Current assets   
Inventories      16 1 3
Trade and other receivables      17 5,006 6,476
Financial assets – derivative financial instruments      27 176 –
Income tax       8 3
Cash and cash equivalents      18 8,896 5,929
         14,087 12,411
LIABILITIES   
Current liabilities   
Trade and other payables      19 (2,793) (4,923)
Financial liabilities – derivative financial instruments      27 – (853)
Current income tax liabilities       (98) –
Provisions      20 (317) (82)
         (3,208) (5,858)
Net current assets        10,879 6,553
Non-current liabilities   
Trade and other payables      19 – (50)
Provisions      20 (8) (139)
         (8) (189)
Net assets        23,508 20,054
EQUITY   
Capital and reserves attributable to equity holders of the Company
Share capital      22 1,853  1,795
Share premium account      24   4,493  3,869
Other reserves      24   20,862  20,862
Retained earnings      24 (3,700) (6,472)
Total equity      25   23,508  20,054
The financial statements on pages 26 to 52 were approved by the Board of Directors on 8 February 2010.
David Webber Martin Thorneycroft
Chief Executive Officer Finance Director Patsystems Plc
Annual report and accounts 2009 28
Financial Statements
Consolidated Statement of Changes in Equity 
for the year ended 31 December 2009
     Share
    Share Premium Other Retained
    Capital Account Reserves Earnings
    £’000 £’000 £’000 £’000 £’000
At 1 January 2009    1,795 3,869 20,862 (6,472) 20,054
Profit for the year    – – – 3,362 3,362
Other comprehensive income:     
 – Foreign exchange movement    – – – (162) (162)
Total comprehensive income for the period     – – – 3,200 3,200
Shares issued in the year    58 624 – – 682
Dividends paid    – – – (689) (689)
Share compensation expense    – – – 261 261
At 31 December 2009    1,853 4,493 20,862 (3,700) 23,508
Of the other reserve at 31 December 2009 £20,812,000 relates to a merger reserve.
     Share
    Share Premium Other Retained
    Capital Account Reserves Earnings
    £’000 £’000 £’000 £’000 £’000
At 1 January 2008    1,775 3,792 20,570 (7,443) 18,694
Profit for the year    – – – 616 616
Other comprehensive income:     
 – Foreign exchange movement    – – – 628 628
Total comprehensive income for the period     – – – 1,244 1,244
Shares issued in the year    20 77 292 – 389
Dividends paid    – – – (602) (602)
Share compensation expense    – – – 329 329
At 31 December 2008    1,795 3,869 20,862 (6,472) 20,054
Of the other reserve at 31 December 2008 £20,812,000 relates to a merger reserve. Patsystems Plc
Annual report and accounts 2009 29
Financial Statements
Consolidated Cash Flow Statement 
for the year ended 31 December 2009 
       2009 2008
       £’000 £’000
Cash flows from operating activities  
Cash flows from operations       4,292 3,556
Interest received       140 127
Tax paid       (149) (135)
Net cash flows from operating activities       4,283 3,548
Cash from investing activities  
Purchase of intangible assets       (653) (864)
Purchase of property, plant and equipment       (596) (126)
Net cash flows used in investing activities        (1,249) (990)
Cash flows from financing activities  
Net proceeds from issue of ordinary share capital        682 86
Dividends paid to Company’s shareholders       (689) (602)
Net cash flows used in financing activities       (7) (516)
Net increase in cash and cash equivalents       3,027 2,042
Cash and cash equivalents at beginning of the period       5,929 3,191
Effect of exchange rates on cash and cash equivalents      (60) 696
Cash and cash equivalents at end of the period       8,896 5,929
Reconciliation of net profit to net cash flows from operating activities
       2009 2008
       £’000 £’000
Net profit       3,362 616
Tax        1,124 1,450
Depreciation of property, plant and equipment         419 409
Amortisation of intangible assets        753 1,014
Share compensation expense        261 329
Finance income       (140) (127)
Decrease in inventories        2 9
Decrease/(increase) in trade and other receivables         1,123 (1,487)
(Increase)/decrease in financial assets and liabilities        (1,029) 883
(Decrease)/increase in trade and other payables        (1,687) 368
Increase in provisions         104 92
Cash flows from operating activities        4,292 3,556 Patsystems Plc
Annual report and accounts 2009 30
Financial Statements
Notes to the Financial Statements
1. Accounting Policies
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These 
policies have been consistently applied to all the years presented, unless otherwise stated.
1.1 Accounting Convention and Basis of Preparation
These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRIC 
interpretations endorsed by the European Union (EU) and with those parts of the Companies Act 1985/2006 applicable to 
companies reporting under IFRS. 
The results and net assets of subsidiary undertakings acquired are included in the consolidated income statement and consolidated 
balance sheet using the acquisition method of accounting from the effective date of acquisition.
These consolidated financial statements have been prepared under the historical cost convention, with the exception of financial 
instruments which are stated in accordance with IAS 39 Financial Instruments: Recognition and Measurement.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also 
requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a 
high degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial 
statements, are disclosed in note 2.
Standards, Amendments and Interpretations Effective in 2009
IFRS 7 ‘Financial instruments – Disclosures’ (amendment) – effective 1 January 2009. The amendment requires enhanced •	
disclosures about fair value measurement and liquidity risk. 
IAS 1 (revised). ‘Presentation of financial statements’ – effective 1 January 2009. The revised standard prohibits the presentation •	
of items of income and expenses (that is, ‘non-owner changes in equity’) in the statement of changes in equity, requiring 
‘non-owner changes in equity’ to be presented separately from owner changes in equity in a statement of comprehensive 
income. 
IFRS 2 (amendment), ‘Share-based payment’ (effective 1 January 2009) deals with vesting conditions and cancellations. It clarifies •	
that vesting conditions are service conditions and performance conditions only. Other features of a share-based payment are not 
vesting conditions. 
The above amendments do not have a material impact on the Group or Company’s financial statements.
Standards, Amendments and Interpretations to Existing Standards that are not yet Effective and have not been  
Adopted Early by the Group
The following standards, amendments and interpretations to existing standards have been published and are mandatory for the 
Group’s accounting periods beginning on or after 1 January 2010 or later periods, but the Group has not early adopted them:
 
IFRS 3 (revised), ‘Business combinations’ (effective from 1 July 2009). The revised standard continues to apply the acquisition •	
method to business combinations, with some significant changes. For example, all payments to purchase a business are to be 
recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently re-measured through the 
income statement. There is a choice on an acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree 
either at fair vale or at the non-controlling interest’s proportionate share of the acquiree’s net assets. All acquisition-related costs 
should be expensed. The Group will apply IFRS 3 (revised) prospectively to all business combinations from 1 January 2010.
The following amendments are not expected to have a material impact on the Group or Company’s financial statements:
IFRS 2 (amendments), ‘Group cash-settled share-based payment transaction (effective from 1 January 2010’. In addition to •	
incorporating IFRIC 8, ‘Scope of IFRS 2’, and IFRIC 11, ‘IFRS 2 - Group and treasury share transactions’, the amendments expand 
on the guidance in IFRIC 11 to address the classification of group arrangements that were not covered by that interpretation. 
IFRS 5 (amendment), ‘Non-current assets held for sale and discontinued operations’. The amendment provides clarification that •	
IFRS 5 specifies the disclosures required in respect of non-current assets (or disposal groups) classified as held for sale or 
discontinued operations. The Group and Company will apply IFRS 5 (amendment) from 1 January 2010. 
IFRIC 17, ‘Distribution of non-cash assets to owners’ (effective on or after 1 July 2009). This interpretation provides guidance on •	
accounting for arrangements whereby an entity distributes non-cash assets to shareholders either as a distribution of reserves or 
as dividends. 
IAS 27 (revised), ‘Consolidated and separate financial statements’, (effective from 1 July 2009). •	 Patsystems Plc
Annual report and accounts 2009 31
Financial Statements
IAS 38 (amendment), ‘Intangible Assets’. The amendment clarifies guidance in measuring the fair value of an intangible asset •	
acquired in a business combination and it permits the grouping of intangible assets as a single asset if each asset has similar 
useful economic lives. 
IAS 1 (amendment), ‘Presentation of financial statements’. The amendment provides clarification that the potential settlement of •	
a liability by the issue of equity is not relevant to its classification as current or non current. By amending the definition of current 
liability, the amendment permits a liability to be classified as non-current (provided that the entity has an unconditional right to 
defer settlement by transfer of cash or other assets for at least 12 months after the accounting period) notwithstanding the fact 
that the entity could be required by the counterparty to settle in shares at any time. The Group and Company will apply IAS 1 
(amendment) from 1 January 2010. 
1.2 Foreign Currency Translation
Functional and Presentation Currency
Items included in the financial statements of each of the Group entities are measured using the currency of the primary economic 
environment in which the entity operates (the ‘functional currency’). The consolidated financial statements are presented in Pounds 
Sterling, which is the parent Company’s functional and presentation currency.
Transactions and Balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the 
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year 
end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.
Group Companies
The results and financial position of all Group entities (none of which has the currency of a hyper-inflationary economy) that have a 
functional currency different from the presentation currency are translated into the presentation currency as follows:
assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet; •	
income and expenses for each income statement are translated at average exchange rates; and •	
all resulting exchange differences are recognised in reserves. •	
1.3 Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of the 
acquired subsidiary at the date of acquisition. Goodwill is tested annually for impairment and carried at cost less accumulated 
impairment losses. The carrying value of capitalised goodwill is also reviewed if events or changes in circumstances indicate a potential 
impairment. Any impairment is charged to the income statement. Gains and losses on the disposal of an entity include the carrying 
amount of goodwill relating to the entity sold. Goodwill is allocated to cash-generating units for the purpose of impairment testing.
1.4 Intangible Assets 
Computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. The 
software acquired in the Tamesis acquisition was capitalised at fair value. These costs are amortised over their estimated useful lives 
(three years). Costs associated with maintaining computer software programmes are recognised as an expense as incurred.
1.5 Impairment of Assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment and whenever 
events or changes in circumstance indicate that the carrying value may not be recoverable. Assets that are subject to amortisation 
are tested for impairment whenever events or changes in circumstance indicate that the carrying value may not be recoverable. An 
impairment loss is recognised for the amount by which the assets carrying value exceeds its recoverable amount. The recoverable 
amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are 
grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units).
1.6 Research and Development
Research expenditure is recognised as an expense as incurred. Costs directly attributable to development are capitalised as 
intangible assets when it is probable that the development will provide economic benefits, considering its commercial and technical 
feasibility, resources are available for the development and costs can be measured reliably. Other development expenditures are 
recognised as costs when incurred. Capitalised product development is amortised from completion of development over periods of 
between three and five years.
1.7 Property, Plant and Equipment
Property, plant and equipment is shown at cost less subsequent depreciation. Cost includes expenditure that is directly attributable 
to the acquisition of the items. Patsystems Plc
Annual report and accounts 2009 32
Financial Statements
1. Accounting Policies continued
1.7 Property, Plant and Equipment continued
Depreciation on assets is calculated using the straight-line method to reduce the cost of each asset to its estimated residual value 
over its estimated useful life, as follows:
Leasehold improvements – over the period of the lease
Plant and equipment – over 3 years
Office furniture, fixtures and fittings – over 4 years
1.8 Current and Deferred Income Taxes
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date 
in the countries in which the Company and its subsidiaries operate and generate taxable income. Management periodically 
evaluates positions taken in tax returns with respect to situations in which applicable tax regulations are subject to interpretation 
and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets 
and liabilities and their carrying amounts in the consolidated financial statements. The deferred income tax is not accounted for on 
the initial recognition of an asset or liability in a transaction, other than a business combination, that at the time of the transaction 
affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been 
enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is 
realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profits will be available against which 
the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries except where the timing of the 
reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in 
the foreseeable future.
Deferred income tax balances are not discounted.
1.9 Inventories
Inventories are stated at the lower of cost and net realisable value. 
1.10 Financial Assets
The Group classifies its financial assets between ‘assets at fair value through profit or loss’ and ‘loans and receivables’. The 
classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its 
financial assets at initial recognition. 
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if 
acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless they are 
designated as hedges. Assets in this category are classified as current assets.
 
Purchases and sales of financial assets are recognised on the trade-date – the date on which the Group commits to purchase or sell 
the asset. Financial assets are initially recognised at fair value and transaction costs are expensed in the income statement. Financial 
assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the 
Group has transferred substantially all risks and rewards of ownership. 
Gains or losses arising from changes in the fair value of the financial assets are presented in the income statement in the period in 
which they arise. 
The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a Group of financial 
assets is impaired. Impairment testing of trade receivables is described in note 1.12.
1.11 Accounting for Derivative Financial Instruments and Hedging Activities
The Group enters into forward currency contracts and options in order to hedge against the cash flow risk of foreign currency 
exchange rate movements. Derivatives are initially recognised at fair value on the date the contract is entered into and subsequently 
re-measured in future periods at their fair value. The movement in fair values is taken to the income statement.
Notes to the Financial Statements
continued Patsystems Plc
Annual report and accounts 2009 33
Financial Statements
The fair value of forward contracts is determined using forward exchange market rates at the balance sheet date.
1.12 Trade Receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest 
method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective 
evidence that the Group will not be able to collect all amounts due under the original terms of the receivables. Significant financial 
difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation and default or delinquency in 
payments are considered indicators that the trade receivable may be impaired. The amount of the provision is the difference 
between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective 
interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is 
recognised in the income statement within ‘operating expenses’. When a trade receivable is uncollectible, it is written off against 
the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against ‘operating 
expenses’ in the income statement. 
1.13 Cash and Cash Equivalents
Cash and cash equivalents includes cash in hand, cash in transit, deposits held at call with banks, other short term highly liquid 
investments with original maturities of three months or less, and bank overdrafts.
Cash in transit represents the net amount of monies due to Group companies that have been paid to independent clearing agents 
and are pending release by overseas withholding tax authorities.
1.14 Trade Payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective  
interest method.
1.15 Leases
Costs in respect of operating leases are charged to the income statement on a straight line basis over the lease term. 
1.16 Provisions
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax 
rate that reflects current market assessments of the time value of money and the risks specific to the obligation. This relates to 
provisions including dilapidations and long term share incentive schemes.
1.17 Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. 
The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating 
segments, has been identified as the Board of Directors.
1.18 Revenue Recognition
Revenue comprises the fair value of the sale of goods and services, net of value added tax. Revenue is recognised as follows:
Non-refundable installation income, consultancy and software development projects: revenue is taken to the income statement •	
in line with the performance of the work. 
Monthly end user or lot charges, monthly maintenance and income on any rentals – these are credited to the income statement •	
in the period in which the service is provided.
Income from perpetual licences – this is recognised in the income statement when the Company has fulfilled all of its obligations •	
in accordance with the terms for acceptance set out in the customer contracts and the Company has reasonable assurance over 
the collectability of the debt.
Revenue relating to development projects is recognised using the percentage of completion method, based primarily on contract •	
costs incurred to date, compared to estimated overall contract costs. 
1.19 Employee Benefits
Pension Obligations
The Group operates a defined contribution scheme which is open to UK and US employees.
The Group pays contributions to publicly or privately administered pension insurance schemes on a mandatory, contractual or 
voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are 
recognised as employee benefit expense when they are due. Patsystems Plc
Annual report and accounts 2009 34
Financial Statements
1. Accounting Policies continued
1.19 Employee Benefits continued
Termination Benefits
Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts 
voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably 
committed to either: terminating the employment of current employees according to a detailed formal plan without possibility of 
withdrawal; or providing termination benefits as a result of an offer made to encourage voluntary redundancy.
Share-Based Benefits
The Group operates two share options schemes; the Enterprise Management Incentive Scheme and the 2003 Share Option Scheme 
(Inland Revenue unapproved). 
The fair value of options is recognised as an employee benefit expense with a corresponding increase in reserves over the vesting 
period. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and 
share premium when the options are exercised. A detailed explanation of how the fair values have been derived can be seen in  
note 23.
Cash-Based Long-Term Incentive Benefits
The Group has introduced a cash-based long-term incentive scheme (‘the Cash Scheme’) in 2007 and awards were granted to the 
Executive Directors and to certain senior and key employees. These awards are conditional upon the rate of growth in fully diluted 
pre-deferred tax EPS over the period from 31 December 2006 to 31 December 2009. The cost of these awards has been estimated 
based on projected EPS growth and is recognised as an employee benefit expense on a straight line basis over the period from grant 
to March 2010.
Other Benefits
UK employees are also entitled to private medical, death in service insurance, critical illness and long term sickness insurance and 
subsidised health club membership. The costs of providing these benefits are recognised as employee benefit expense as they  
fall due.
This year the Group has introduced a flexible benefits scheme that enables employees to tailor their total remuneration packages to 
meet their own individual lifestyle and family requirements. 
1.20 Dividend Distributions 
Final dividend distributions to the Company’s shareholders are recognised as liabilities in the Group’s financial statements in the 
period in which the dividends are approved by the Company’s shareholders. Interim dividend distributions to the Company’s 
shareholders are recognised as liabilities in the Group’s financial statements when paid.
2. Critical Accounting Estimates and Judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations 
of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom 
equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the 
carrying amounts of assets and liabilities within the next financial year are addressed below:
IRFS 2 share based payment charge and the provision for the cash-based long term incentive scheme, where judgement has been •	
applied as to the number of awards expected to vest.
Capitalisation of research and development costs. •	
Impairment reviews for intangible assets. •	
Development projects, where the percentage completion method is used. This requires the Group to estimate the development •	
performed to date as a proportion of the total development to be performed. Another uncertainty is the expected total profit.
Deferred tax, see note 15. •	
Notes to the Financial Statements
continued Patsystems Plc
Annual report and accounts 2009 35
Financial Statements
3. Financial risk management
The Group’s activities expose it to a variety of financial risks and it has developed and operates an overall risk management 
programme that recognises the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s 
financial performance. 
Financial risk management is under the control of the Finance Director and is carried out centrally for the Group in compliance with 
policies approved and monitored by the full Board. The Board regularly reviews the effectiveness of these policies examining specific 
areas including foreign exchange risk, interest rate risk, credit risk and the extent to which financial instruments are being used to 
hedge certain risk exposures. 
3.1 Market Risk 
The principal market risk to which the the Group is exposed is foreign currency risk on sales, purchases and cash balances that are 
denominated in a currency other than Sterling. The principal currency giving rise to this risk is the US Dollar. Patsystems’ policy is to 
carry forward cover for 75% of US$/£ net anticipated exposure for 12 months forward. Forward cover is achieved through a mixture 
of forward contracts and options. This policy has remained unchanged throughout both 2009 and 2008 although the level of cover 
and the exposure to risks on other foreign currencies are kept under regular review.
The average US$/£ exchange rate used in the 2009 income statement was 1.57 (2008: 1.84). The average rate of the hedges in 
place at 31 December 2009 for 2010 was 1.60 (2008 for 2009: 1.77). The fair value of these hedges is recognised as a financial 
asset of £176,000 (2008: liability £853,000) on the Group balance sheet at the year end.
The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk. This 
exposure is minimised by a Group policy requiring individual subsidiaries to remit any surplus funds to the Parent Company to 
facilitate central management as set out above and to enable each individual subsidiary to match remaining assets and liabilities 
denominated in their specific functional currencies.
During the year ended 31 December 2009 the US$/£ exchange rate fluctuated between 1.42 and 1.65 (2008 between 1.45 and 
1.99). At 31 December 2009, if the US$ had weakened/strengthened by 20% against the £ with all other variables held constant, 
post tax profit for the year would have been £630,000 (2008: £647,000) lower/higher, mainly as a result of foreign exchange  
gains/losses on translation of US$ denominated trade receivables.
The Group is also exposed to interest rate risks on the fair values of the hedging instruments that it holds and on the cash flows 
arising from any interest bearing cash deposits. These assets are regularly realised to settle trade and other payables as part of the 
Group’s management of its liquidity risks. The Group has no material borrowings and accordingly, exposures to interest rate risks are 
not regarded as significant.
3.2 Credit Risk 
Credit risk arises from cash and cash equivalents and from credit exposures to the Group’s customers, including outstanding 
receivables and committed transactions. Credit risk is managed centrally with regular reports of exposures reviewed by the Board. 
The Group does not set individual credit limits but will seek to ensure that counterparties enter into legally enforceable contracts 
that include settlement terms that demonstrate the counterparties’ commitment to the transaction and minimise this risk exposure. 
The Board does not assess the credit quality of financial assets by reference to external credit ratings, but will regularly examine the 
ageing of financial assets and individual counterparty historic default rates. An aged analysis of trade receivables at 31 December 
2009 is set out in note 17. 
3.3 Liquidity Risk 
The Group has no borrowings or committed credit lines and its liquidity management policy is carried out at a local level and 
involves projecting cash flows in major currencies and considering the levels of liquid assets necessary to meet these. Requirements 
are overseen by the Board with Group levels of cash and cash equivalents reviewed on a monthly basis. A maturity analysis of trade 
and other payables is shown in note 19.
3.4 Capital Risk Management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to 
provide returns for shareholders and benefits for other stakeholders. Consistent with others in the industry and of its size, the  
Group believes that an optimum capital structure is currently achieved entirely through equity and with no net debt. Total equity  
at 31 December 2009 was £23,508,000 (2008: £20,054,000).
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return 
capital to shareholders, issue new shares or raise future funds through debt. Patsystems Plc
Annual report and accounts 2009 36
Financial Statements
4. Segmental Analysis
The Chief Operating Decision Maker is the Board of Directors. The Board reviews the Company’s internal reporting in order to assess 
performance of the business. Management has determined the operating segments based on the reports reviewed by the Board. 
The Board considers the business from a geographic perspective, monitoring performance by Europe, America and Asia Pacific.
The Group operates in one product line, that of the supply of software to financial institutions.
The Board assesses the performance of the business based on a measure of adjusted profit. Adjusted profit is defined as ‘profit 
before tax after adjusting for share option costs, marking-to-market of derivatives used to hedge cash flows and amortisation of 
intangibles other than internally developed software.’ A reconciliation of adjusted profit to profit before tax is detailed below:
      North Asia
     Europe America Pacific Total
 2009     £’000 £’000 £’000 £’000
Revenue from external customers     7,788 6,745 7,564 22,097
Revenue by destination     7,518 6,353 8,226 22,097
Adjusted profit     2,515 391 1,015 3,921
Depreciation and amortisation     1,065 31 76 1,172
Finance income     130 7 3 140
Taxation expense     829 16 279 1,124
Total assets     21,953 1,569 3,202 26,724
Total liabilities     (2,035) (211) (970) (3,216)
      North Asia
     Europe America Pacific Total
 2008     £’000 £’000 £’000 £’000
Revenue from external customers     6,873 7,591 5,163 19,627
Revenue by destination     6,932 7,301 5,394 19,627
Adjusted profit      2,499 872 298 3,669
Depreciation and amortisation     1,349 27 47 1,423
Finance income     97 18 12 127
Taxation expense     413 496 541 1,450
Total assets     19,488 4,202 2,411 26,101
Total liabilities     (3,666) (1,727) (654) (6,047)
A reconciliation of adjusted profit to profit on ordinary activities before tax is provided as follows: 
    
          2009 2008
          £’000 £’000
Adjusted profit for reportable segments       3,921 3,669
Share compensation expense       (261) (329)
Movement in fair value of hedging instruments       1,029 (883)
Amortisation of intangibles       (203) (391)
Finance income         (140) (127)
Operating profit       4,346 1,939
Finance income          140 127
Profit on ordinary activities before tax         4,486 2,066
The amounts provided to management with respect to total assets and total liabilities are measured in a manner consistent with 
that of the financial statements. The assets are allocated based on the operations of the segment and the physical location of the 
asset and the liabilities are allocated based on the operations of the segment.
The total of non-current assets other than deferred tax assets located in Europe is £7,428,000 (2008: £7,654,000), and the total of 
these non-current assets located in other regions is £264,000 (2008: £159,000).
Revenue from two customers accounts for more than 10% of total revenue, with revenue of £3,574,000 and £2,560,000 
respectively (2008: £3,601,000 and £3,758,000). These revenues are attributable to all segments.
Notes to the Financial Statements
continued Patsystems Plc
Annual report and accounts 2009 37
Financial Statements
5. Operating Profit 
 
       2009 2008
 Operating profit is stated after charging/(crediting):       £’000 £’000
Staff costs       12,310 11,518
Share compensation expense       261 329
Total staff costs       12,571 11,847
Less: wages and salaries capitalised in accordance with IAS 38      (377) (587)
        12,194 11,260
Depreciation:  
 – owned tangible assets       419 409
Amortisation:  
 – capitalised development costs       550 623
 – other intangible assets       203 391
 – total intangible assets       753 1,014
Operating lease costs:  
 – plant and machinery       32 39
 – other       540 438
 – total operating lease costs       572 477
Foreign exchange (gain)/loss:  
 – movement in fair value of hedging instruments       (1,029) 883
 – other exchange gains and losses       455 (678)
 – total foreign exchange (gain)/loss        (574) 205
Services provided by the Group’s auditor and network firms
       2009 2008 
        £’000  £’000 
Fees payable to the Group’s auditor for the audit of the Group’s annual accounts     35   33 
Fees payable to the Group’s auditor and its associates for other services:  
 – the audit of the Group’s subsidiaries pursuant to legislation       51   55 
 – tax services         41   60 
 – human resource services        –   6 
All other services        33   8 
        160   162 
6. Staff Costs
Staff costs (including Directors’ emoluments) during the year amounted to:
       2009  2008 
        £’000   £’000 
Wages and salaries        10,458 9,898
Share compensation expense        261 329
Social security costs        1,146 928
Pension costs        706 692
       12,571 11,847
Included in the above wages and salaries is £377,000 (2008: £587,000) in relation to development costs that were capitalised in 
accordance with IAS 38. Patsystems Plc
Annual report and accounts 2009 38
Financial Statements
6. Staff Costs continued
The average monthly number of persons (including Directors) employed by the Group during the year, in full time equivalents, was:
       2009  2008 
        number   number 
Sales, account management and marketing        21 21
Customer operations, testing and technical        73 70
Development and product development        48 44
Finance, administration and board        20 18
       162 153
Details of the emoluments of the Directors are contained in the Report of the Board on Directors’ Remuneration and Group 
Remuneration Policy on page 22, under the heading ‘Directors’ Emoluments’.
Details of key management remuneration are shown in note 28.
7. Finance income 
       2009  2008 
        £’000   £’000 
Bank interest receivable       78 95
Interest receivable on the fair value of long term receivables      37 32
Other interest       25 –
       140 127
Other interest relates to the interest received on the return of a rental deposit from the Cottons Centre premises, occupied until 
September 2009 and interest on an office rental deposit in the United States.
8. Tax on profit on ordinary activities
  
       2009  2008 
        £’000   £’000 
United Kingdom   
Withholding tax       12 12
Foreign tax  
Corporation Tax – current year       177 46
Corporation Tax – in relation to prior year       60 94
Total current tax       249 152
Deferred tax 
Movement in deferred tax (note 15)       875 1,298
Taxation charge       1,124 1,450
Notes to the Financial Statements
continued Patsystems Plc
Annual report and accounts 2009 39
Financial Statements
8. Tax on Profit on Ordinary Activities continued
The tax for the year is different from that which would result from applying the standard rate of Corporation Tax in the UK (28%) 
(2008: 28.5%). The differences are explained below:
       2009  2008 
        £’000   £’000 
Profit on ordinary activities before tax       4,486 2,066
Profit on ordinary activities multiplied by standard rate of  
 Corporation Tax in the UK of 28% (2008: 28.5%)       1,256 589 
Effects of:  
Expenses not deductible for tax purposes       (77) 15
Amortisation of intangibles not deductible       – 50
Effect of differing tax rates on overseas earnings       (88) 111
Withholding tax       12 12
Adjustments in respect of prior years – Corporation Tax      60 94
Adjustments in respect of prior years – deferred tax       (46) 752
Recognition of deferred tax assets       – (233)
Tax losses for which no deferred tax asset has been recognised      7 64
Remeasurement of deferred tax on change of UK rate      –  (4)
Taxation charge        1,124 1,450
From 1 April 2008 the UK Corporation Tax rate changed from 30% to 28%. 
Factors that May Affect Future Tax Charges
The Group has unrelieved tax losses of £18,128,000 (2008: £21,230,000) that are available for offset against future taxable profits 
in their respective territories. A deferred tax asset amounting to £155,831 (2008: £165,000) has not been recognised in respect of 
these losses as their future recovery is uncertain.
9. Parent Company Accounts 
The Parent Company accounts are set out in pages 53 to 60.
10. Earnings Per Ordinary Share
In accordance with IAS 33, the calculation of earnings per ordinary share is based upon:
  
(a) Basic Earnings Per Share  
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number 
of ordinary shares in issue during the year:
      2009  2008
Profit for the year attributable to equity holders of the Company     £3,362,000  £616,000
Weighted average number of shares      180,628,990  178,982,340
Basic earnings per share      1.9p  0.3p
(b) Diluted Earnings Per Share
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume 
conversions of all dilutive potential ordinary shares. 
The Group has one category of dilutive potential ordinary shares: share options.
For share options a calculation is performed to determine the number of shares that could have been acquired at fair value 
(determined as the average annual market price of the Group’s shares) based on the monetary value of the subscription rights 
attached to the outstanding options. 
The number of shares calculated above is compared with the number of shares that would have been issued assuming the exercise 
of the share options. Patsystems Plc
Annual report and accounts 2009 40
Financial Statements
10. Earnings Per Ordinary Share continued
      2009  2008
Profit for the year attributable to equity holders of the Company     £3,362,000  £616,000
Weighted average number of shares      180,628,990  178,982,340
Effect of dilutive share options      1,628,191  4,462,772
      182,257,181  183,445,112
Diluted earnings per share      1.8p  0.3p
11. Principal Subsidiaries  
The principal investments in subsidiary undertakings held by the Parent Company are as follows:
1. A 100% investment in respect of voting rights and nominal value in Patsystems Holdings Limited, a company incorporated in 
England and Wales.
 The historical cost of the investment in the shares of Patsystems Holdings Limited is £11,180,000. Under the Scheme of 
Arrangement the subsidiary undertaking returned capital to the Company amounting to £9,865,000, and the cost of the 
investment has been reduced accordingly to reflect this.
 The following subsidiary undertakings are wholly owned by Patsystems Holdings Limited in respect of voting rights and nominal 
value of issued shares and perform the sale and support of electronic trading systems:
 Patsystems (UK) Ltd  – incorporated in England and Wales
 Patsystems (NA) LLC  – incorporated in United States
 Patsystems Pte Ltd  – incorporated in Singapore
 Patsystems Pty Ltd  – incorporated in Australia
 Patsystems GmbH  – incorporated in Germany
 The following subsidiary is wholly owned by Patsystems Holdings Limited in respect of voting rights and nominal value of issued 
shares and acts as a holding company:
 Professional Automated Trading Systems BV (incorporated in The Netherlands).
 Professional Automated Trading Systems BV owns 100% of voting rights and nominal value of issued shares in Patsystems (Japan) 
KK (incorporated in Japan), which performs the sale and support of electronic trading systems. 
 Patsystems (Japan) KK owns 100% of voting rights and nominal value of issued shares in Patsystems (Ireland) Ltd (incorporated in 
the Republic of Ireland), which acts as a holding company.   
2. A 100% investment in Tamesis Limited, a company incorporated in England and Wales that develops, distributes and supports 
software enabling real time trade capture, valuation and risk management for the structured finance market. 
 All subsidiaries are included in the consolidation.
12. Goodwill
       2009  2008 
        £’000   £’000 
Cost and net book value  
At 1 January       3,251 3,237
Additions       – 14
At 31 December       3,251 3,251
The goodwill is all held in Europe.
Notes to the Financial Statements
continued Patsystems Plc
Annual report and accounts 2009 41
Financial Statements
Impairment Review
The recoverable amount for the cash generating unit has been measured based on a value in use calculation. The calculations use 
pre-tax profits based on budgets approved by management for the year 2010. Cash flows beyond this are based on a growth rate 
of 2.25%. A pre-tax discount rate of 10% has been applied to the calculations.
As the value in use is greater than the carrying value there is no impairment in the period and the carrying value of goodwill 
represents the excess of the cost of acquisition over the fair value of the Group’s share of the net identifiable assets of the acquired 
subsidiary at the date of acquisition.
13. Intangible Assets
     Software Acquired Capitalised
      licences software development Total
 2009     £’000 £’000 £’000 £’000
Cost    
At 1 January 2009     678 898 4,294 5,870
Additions     43 – 610 653
Disposals     (144) – – (144)
Foreign exchange      (5) – – (5)
At 31 December 2009     572 898 4,904 6,374
Amortisation     
At 1 January 2009     (408) (898) (1,037) (2,343)
Charge for the year      (203) – (550) (753)
Disposals     144 – – 144
Foreign exchange      4 – – 4
At 31 December 2009     (463) (898) (1,587) (2,948)
Net book value     
At 31 December 2009     109 – 3,317 3,426
At 31 December 2008     270 – 3,257 3,527
     Software Acquired Capitalised
      licences software development Total
 2008     £’000 £’000 £’000 £’000
Cost    
At 1 January 2008     1,273 898 3,483 5,654
Additions     53 – 811 864
Disposals     (674) – – (674)
Foreign exchange      26 – – 26
At 31 December 2008     678 898 4,294 5,870
Amortisation     
At 1 January 2008     (843) (723) (414) (1,980)
Charge for the year      (216) (175) (623) (1,014)
Disposals     674 – – 674
Foreign exchange      (23) – – (23)
At 31 December 2008     (408) (898) (1,037) (2,343)
Net book value     
At 31 December 2008     270  –  3,257 3,527
At 31 December 2007     430 175 3,069 3,674 Patsystems Plc
Annual report and accounts 2009 42
Financial Statements
14. Property, Plant and Equipment
       Offi ce
       furniture 
     Leasehold Plant and fixtures and 
     improvements equipment fittings Total
 2009     £’000 £’000 £’000 £’000
Cost    
At 1 January 2009     564 1,301 111 1,976
Additions     110 455 31 596
Disposals     (509) (667) (11) (1,187)
Foreign exchange      (7) (35) (3) (45)
At 31 December 2009     158 1,054 128 1,340
Depreciation    
At 1 January 2009     (451) (956) (53) (1,460)
Charge for the year     (110) (265) (44) (419)
Disposals     509 667 11 1,187
Foreign exchange      6 35 – 41
At 31 December 2009     (46) (519) (86) (651)
Net book value    
At 31 December 2009     112 535 42 689
At 31 December 2008     113 345 58 516
       Offi ce
       furniture 
     Leasehold Plant and fixtures and 
     improvements equipment fittings Total
 2008     £’000 £’000 £’000 £’000
Cost    
At 1 January 2008     539 3,135 495 4,169
Additions     – 109 17 126
Disposals     – (2,222) (459) (2,681)
Foreign exchange      25 279 58 362
At 31 December 2008     564 1,301 111 1,976
Depreciation    
At 1 January 2008     (332) (2,644) (441) (3,417)
Charge for the year     (101) (285) (23) (409)
Disposals     – 2,222 459 2,681
Foreign exchange      (18) (249) (48) (315)
At 31 December 2008     (451) (956) (53) (1,460)
Net book value    
At 31 December 2008     113 345 58 516
At 31 December 2007     207 491 54 752
Notes to the Financial Statements
continued Patsystems Plc
Annual report and accounts 2009 43
Financial Statements
15. Deferred Tax Assets
       Other
    Trading Capital Share timing
    losses  allowances options differences Total
 2009    £’000 £’000 £’000 £’000 £’000
At 1 January 2009    5,706 (171) 41 301 5,877
Utilisation of losses against current year profits    (762) – – – (762)
Adjustments in respect of prior years    46 – – – 46
Credits/(charges) arising in the year     – 71 29 (259) (159)
(Charged)/credited to income statement    (716) 71 29 (259) (875)
Foreign exchange    (57) – – – (57)
At 31 December 2009    4,933 (100) 70 42 4,945
       Other
    Trading Capital Share timing
    losses  allowances options differences Total
 2008    £’000 £’000 £’000 £’000 £’000
At 1 January 2008    6,665 (169) 123 54 6,673
Additional deferred tax assets in respect of  
 Group companies that have become profitable     233 – – – 233
Utilisation of losses against current year profits    (942) – – – (942)
Adjustments in respect of prior years    (752) – – – (752)
(Charges)/credits arising in the year     – (2) (82) 247 163
(Charged)/credited to income statement    (1,461) (2) (82) 247 (1,298)
Foreign exchange    502 – – – 502
At 31 December 2008    5,706 (171) 41 301 5,877
Deferred tax assets in respect of Group companies’ unrelieved trading losses are recognised when the specific Company’s business 
has become profitable and to the extent that it is probable there will be future trading profits to utilise such losses. 
16. Inventories
       2009  2008 
        £’000   £’000 
Goods for resale       1 3
   
17. Trade and Other Receivables
       2009  2008 
        £’000   £’000 
Trade receivables       2,737 4,538
Less: provision for impairment of receivables       (107) (134)
Trade receivables – net       2,630 4,404
Other receivables       392 351
Prepayments and accrued income       2,310 2,240
       5,332 6,995
Less non-current portion – accrued income       (326) (519)
Current portion       5,006 6,476 Patsystems Plc
Annual report and accounts 2009 44
Financial Statements
17. Trade and Other Receivables continued
Non-current receivables are due as follows:
       2009  2008 
        £’000   £’000 
Within between one and two years       84 193
Within between two and five years       225 239
After more than five but less than ten years        17 87
Non–current receivables       326 519
The carrying values less impairment provisions of trade and other receivables approximate their fair values.
The effective interest rates on non-current receivables were between the range of 1–6% (2008: 3–6%).
The ageing of trade receivables is as follows:
    Not Up to 3 to Over
    past due 3 months 6 months 6 months Total
 2009    £’000 £’000 £’000 £’000 £’000
Fully performing     1,870 – – – 1,870
Past due but not impaired     – 737 22 1 760
Impaired and provided for     – 11 52 44 107
     1,870 748 74 45 2,737
Percentage    68% 27% 3% 2% 100%
           
    Not Up to 3 to Over
    past due 3 months 6 months 6 months Total
 2008    £’000 £’000 £’000 £’000 £’000
Fully performing     3,522 – – – 3,522
Past due but not impaired     – 659 223 – 882
Impaired and provided for     – – 10 124 134
     3,522 659 233 124 4,538
Percentage    78% 14% 5% 3% 100%
Trade receivables that are less that three months past due are not considered impaired. As of 31 December 2009, trade receivables 
of £760,000 (2008: £882,000) were past due but not impaired. These relate to a number of independent customers for whom 
there is no indication of financial difficulties or recent history of default. The Group is in contact with these customers and obtained 
assurances from which it believes that the amounts receivable will be collected in full with no additional cost to the Group.
Provisions for the portion of individually impaired trade receivables assessed to be irrecoverable at 31 December 2009 totalled 
£107,000 (2008: £134,000). These relate to customers where there are indications of financial difficulties or disputes that are 
unlikely to be resolved without further costs to the Group.
The carrying amounts of the Group’s trade and other receivables are denominated in the following currencies:
       2009  2008 
        £’000   £’000 
UK Pound       2,080 2,118
US Dollar       2,470 4,116
Singapore Dollar       363 300
Japanese Yen       334 272
Australian Dollar       46 130
Other currencies       39 59
Total       5,332 6,995
Notes to the Financial Statements
continued Patsystems Plc
Annual report and accounts 2009 45
Financial Statements
Movements on the Group provision for impairment of trade receivables are as follows: 
 
       2009  2008 
        £’000   £’000 
At 1 January       134 83
Provision for receivables impairment       60 60
Receivables written off during the year as uncollectible      (17) (19)
Unused amounts reversed       (67) –
Foreign exchange       (3) 10
At 31 December       107 134
The creation and release of provisions for impaired receivables has been included in ‘operating expenses’ in the income statement. 
Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash.
The other classes within trade and other receivables do not contain impaired assets.
The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentioned above. The Group 
does not hold any collateral as security.
18. Cash and Cash Equivalents
       2009  2008 
        £’000   £’000 
Cash at bank and on hand       3,294 4,649
Short-term deposits       5,602 1,280
       8,896 5,929
The credit quality of the Group’s financial assets represented by cash and cash equivalents is not assessed by reference to external 
credit ratings but is regularly reviewed by the Board. Monies are held with international banking organisations and, where appropriate, 
with well established local bankers that are able to provide the levels of security, accessibility and service to meet local needs.
The interest rates on interest bearing short-term deposits are floating rates. All financial assets represented by cash and cash 
equivalents mature within one year.
The carrying values of cash and cash equivalents approximate their fair values.
The carrying amounts of the Group’s cash and cash equivalents are denominated in the following currencies:
       2009  2008 
        £’000   £’000 
UK Pound       6,879 3,762
US Dollar       1,215 1,230
Singapore Dollar       233 200
Japanese Yen       367 248
Australian Dollar       116 389
Other currencies       86 100
Total       8,896 5,929
Subsequent to the year end the Group put in place a guarantee of the value of $800,000 in respect of one of its ongoing contracts. Patsystems Plc
Annual report and accounts 2009 46
Financial Statements
19. Trade and Other Payables
       2009  2008 
        £’000   £’000 
Current liabilities  
Trade payables       418 290
Other tax and social security       562 721
Other creditors       15 58
Accruals        1,535 1,573
Deferred income       263 2,281
       2,793 4,923
Non-current liabilities  
Deferred income       – 50
       2,793 4,973
  
None of the payables are secured. 
All trade and other payables mature within one year.
The carrying amounts of the Group’s trade and other payables are denominated in the following currencies:
       2009  2008 
        £’000   £’000 
UK Pound       1,652 2,326
US Dollar       534 2,112
Singapore Dollar       281 247
Japanese Yen       233 224
Australian Dollar       38 35
Other currencies       55 29
Total       2,793 4,973
The carrying amounts of the Group’s trade and other payables approximate their fair values.
The Group’s intercompany receivables and payables, which are eliminated on consolidation, are recorded in the books of the local 
entities in the following currencies:
     2009 2009 2008 2008
     £’000 £’000 £’000 £’000
     Receivables Payables Receivables Payables
UK Pound     21,278 (38,229) 23,316 (38,829)
US Dollar     – (3,834) – (5,181)
Singapore Dollar      1,307 (2,613) 502 (1,967)
Japanese Yen     1,712 (1,807) 1,056 (937)
Australian Dollar     224 (576) – (683)
Other currencies     171 (2,109) 185 (1,938)
     24,692 (49,168) 25,059 (49,535)
The difference between the intercompany receivables and payable of £24,476,000 relates to provision made against intercompany 
receivables in prior years.
Notes to the Financial Statements
continued Patsystems Plc
Annual report and accounts 2009 47
Financial Statements
20. Provisions 
     At   At
     1 January Utilised Movement 31 December
     2009 in year in year 2009
     £’000 £’000 £’000 £’000
No later than one year    
Cash-based long term incentive scheme     139 – 178 317
Later than one year and no later than five years    
Dilapidations provision     82 (104) 30 8
     221 (104) 208 325
The dilapidations provision is in respect of work to be carried out at the end of the lease on property. The provision in respect of the 
Cotton’s Centre was discharged in September 2009 (£104,000) at the end of the lease, and a new provision for Riverside House 
(£8,000) was established and this is due to expire in 2014.
The cash-based long term incentive scheme is described in the Remuneration Report. It is due to expire in 2010.
21. Commitments Under Operating Leases
The Group leases various offices and plant and machinery under non-cancellable operating lease arrangements. The leases have 
varying terms, escalation clauses and renewal rights. 
The lease expenditure charged to the income statement during the year is disclosed in note 5.
The future minimum lease payments under non-cancellable operating leases are as follows:
 Land and Buildings Plant and Machinery Total
   2009 2008 2009 2008 2009 2008
No later than one year   368 452 30 34 398 486
Later than one year and no later than five years   1,269 351 55 87 1,324 438
Later than five years   – – – 15 – 15
   1,637 803 85 136 1,722 939
22. Called Up Equity Share Capital 
       2009 2008
        £’000 £’000
Authorised
Ordinary shares of 1p each   
At 1 January and 31 December – 250,000,000 shares       2,500 2,500
Deferred shares of 1p each  
At 1 January and 31 December – 2 shares        – –
Redeemable preference shares of £1 each   
At 1 January and 31 December – 49,998 shares        50 50
Allotted, called up and fully paid   
Ordinary shares of 1p each   
At 1 January – 179,537,301 shares        1,795 1,775
Allotted as consideration for acquisition of Tamesis Limited       – 11
Allotted under share option schemes – 5,793,392       58 9
At 31 December – 185,330,693 shares        1,853 1,795
  
The 1p ordinary shares are listed on the AIM market. They have one voting right per share. 
  
Deferred shares of 1p each 
At 1 January and 31 December – 2 shares        – – Patsystems Plc
Annual report and accounts 2009 48
Financial Statements
23. Share Option Schemes
The following options to purchase 1p Ordinary shares in Patsystems Plc were granted, exercised, lapsed and outstanding  
during the year:
 Exercise Outstanding    Outstanding Exercisable
 price in at 1 January Granted Exercised Lapsed at 31 December at 31 December Effective
 pence 2009 in year in year in year 2009 2009 dates
 5.08p 1,185,500  –  (582,500) (45,000) 558,000 558,000 Note a
 9.50p 97,500  –  (7,500)  –  90,000 90,000 Note a
 13.75p 727,272  –  (727,272)  –   –   –  Note e
 14.25p 497,153  –  (82,800) (10,800) 403,553 403,553 Note b
 14.50p 496,951  –   –   –  496,951 496,951 Note b
 15.25p 775,737  –   –   –  775,737 775,737 Note b
 15.58p 1,346,900  –  (437,400) (239,100) 670,400 670,400 Note b
 17.50p 90,000  –  (45,600) (14,400) 30,000 30,000 Note b
 27.75p 250,000  –   –   –  250,000 – Note g
 29.00p 444,827  –   –   –  444,827 – Note g
  5,911,840  –  (1,883,072) (309,300) 3,719,468 3,024,641 
       
 1.00p 582,525  –  (582,525)  –   –   –  Note i
 13.75p 3,272,728  –  (3,272,728)  –   –   –  Note f
 14.25p 254,494  –  (40,667) (34,684) 179,143 179,143 Note c
 14.50p 83,089  –   –   –  83,089 83,089 Note c
 15.25p 404,263  –   –  (60,000) 344,263 344,263 Note d
 15.58p 670,400  –  (14,400) (60,300) 595,700 595,700 Note c
 18.00p 500,000  –   –   –  500,000 500,000 Note d
 27.75p 1,000,000  –   –   –  1,000,000 – Note h
 29.00p 1,655,173  –   –   –  1,655,173 – Note h
  8,422,672  –  (3,910,320) (154,984) 4,357,368 1,702,195 
Total all 
schemes 14,334,512  –  (5,793,392) (464,284) 8,076,836 4,726,836 
             
Note a: These options were granted under the initial award of the Enterprise Management Incentive (‘EMI’) Scheme. These options 
are now 100% exercisable.
Note b: Options were granted under the second and third awards of the EMI Scheme. 76% of the options awarded under the 
second and third grants have currently vested and the remaining 24% of these options will vest on  
8 February 2010.
Note c: These options were granted under the second and third awards of Part B (Inland Revenue Unapproved) of the  
Patsystems Plc 2003 Share Option Scheme. The vesting status is the same as note b, with the exception of 34,540 unapproved 
options with an exercisable price of 14.50p which all vested in 2008.
Note d: These options were granted under the second and third awards of Part B (Inland Revenue Unapproved) of the  
Patsystems Plc 2003 Share Option Scheme. 844,263 of these options became fully vested in 2008 following approval from  
the Remuneration Committee, the remaining options are subject to the same vesting status as note b.
Note e: These options were granted under a special award of the EMI Scheme. These options were exercised on the 22 December 
2009. The aggregate on the gain made on these options was £52,727.
Note f: These options were granted under a special award of Part B (Inland Revenue Unapproved) of the Patsystems Plc 2003 Share Option 
Scheme. These options were exercised on the 22 December 2009. The aggregate on the gain made on these options was £237 ,273.
Note g: These options were granted under a special award of the EMI Scheme. These options can be exercised after a period of 
three years after the date of the grant but subject to achieving Company performance targets.
Note h: These options were granted under a special award of Part B (Inland Revenue Unapproved) of the Patsystems Plc 2003 Share 
Option Scheme, exercise conditions are as per note g.
Notes to the Financial Statements
continued Patsystems Plc
Annual report and accounts 2009 49
Financial Statements
Note i: These options were granted under a special award of Part B (Inland Revenue Unapproved) of the Patsystems Plc 2003 Share 
Option Scheme. These options were exercised on 17 March 2009.
The weighted average fair value per share at the measurement date of options granted during the year was nil p (2008: nil p).
The weighted average share price at the date of grant of options granted during the year was nil p (2008: nil p). 
For the options that were exercised during the year, the weighted average share price at the date of exercise was 21p (2008: 23p).
The weighted average remaining contractual life of options outstanding at the year end is 5.7 years (2008: 6.7 years).
The total fair value that was charged to the income statement in relation to the share options was £261,000 (2008: £329,000), all of 
which related to equity settled share based payment transactions.
The fair values of the options have been calculated using the Binomial Model. The model takes into account the following factors in 
determining the fair value of an option:
(a) Share Price and Exercise Price 
Share prices are closing share prices as at the date of grant. Exercise prices are listed in the above schedule.
(b) Expected Term of the Options
It is assumed that the expected life of the options under consideration is five years. 
(c) Volatility
Volatility of the Company’s share price has been calculated as the annualised standard deviation of daily continuously compounded 
returns on the Company’s stock, derived from the Company’s historical share prices, adjusted for splits, over five years back from 
each date of grant.
(d) Risk-Free Interest Rate
The risk-free rates of interest are assumed to be the yield to maturity on a UK Gilt Strip with the term to maturity equal to the 
expected life of the option. 
(e) Dividends
The valuations take account of the expected future dividend yield at the date of each grant.
The table below sets out the volatilities, risk-free interest rates and dividend yields applied in each valuation:
      Risk-free  
     Volatility  interest rate  Dividend yield
 Date of grant     (%)   (%)   (%)
24–Feb–03    77.8009%  4.6922%  0.00%
13–Mar–03    78.3590%  4.7175%  0.00%
30–Jun–03    78.4194%  4.6412%  0.00%
27–Oct–03    79.8321%  5.7891%  0.00%
01–Jan–04    78.6748%  5.4125%  0.00%
30–Jul–04    73.6821%  5.8602%  0.00%
27–Aug–04    71.7764%  5.6660%  0.00%
16–Nov–04    58.9201%  5.2789%  0.00%
04–Feb–05    56.6301%  5.1507%  0.00%
17–Mar–05    52.4971%  5.4148%  0.00%
06–Oct–05    54.9819%  4.7689%  2.00%
23–Nov–05    49.8819%  4.8322%  2.00%
14–Dec–05    50.0097%  4.8764%  2.00%
14–Feb–06    50.1501%  4.7515%  2.00%
19–Apr–07    48.4035%  5.2980%  1.00%
7–Dec–07    30.0527%  4.5550%  1.00%
31–Dec–07    30.9369%  5.6204%  1.00% Patsystems Plc
Annual report and accounts 2009 50
Financial Statements
24. Share Capital and Reserves
  At Shares Earnings  Foreign Share At
  1 January issued in for the Dividends exchange compensation 31 December
  2009 the year year paid movement expense 2009
  £’000 £’000 £’000 £’000 £’000 £’000 £’000
Paid up share capital   1,795 58 – – – – 1,853
Share premium   3,869 624 – – – – 4,493
Other reserves   20,862 – – – – – 20,862
Retained earnings   (6,472) – 3,362 (689) (162) 261 (3,700)
  20,054 682 3,362 (689) (162) 261 23,508
Of the other reserve at 31 December 2009 £20,812,000 relates to a merger reserve.
  At Shares Earnings  Foreign Share At
  1 January issued in for the Dividends exchange compensation 31 December
  2008 the year year paid movement expense 2008
  £’000 £’000 £’000 £’000 £’000 £’000 £’000
Paid up share capital   1,775 20 – – – – 1,795
Share premium   3,792 77 – – – – 3,869
Other reserves   20,570 292 – – – – 20,862
Retained earnings   (7,443) – 616 (602) 628 329 (6,472)
  18,694 389 616 (602) 628 329 20,054
Of the other reserve at 31 December 2008 £20,812,000 relates to a merger reserve.
 
Investments in Own Shares 
The Group has an investment in own shares of 71,856 shares (2008: 71,856 shares) as a result of employees leaving the All 
Employee Share Scheme. The nominal value of these shares is £719 (2008: £719). The market value at 31 December 2009 is 
£16,000 (2008: £11,000). 
25. Statement of Changes in Shareholders’ Equity 
       2009 2008
       £’000 £’000
Profit on ordinary activities after taxation       3,362 616
Dividends paid       (689) (602)
Foreign exchange adjustment       (162) 628
Share compensation expense       261 329
Shares issued in part settlement of the deferred  
 consideration for the 2005 acquisition of Tamesis Limited      – 303
Proceeds from the issue of ordinary share capital       682 86
       3,454 1,360
Shareholders’ funds at 1 January       20,054 18,694
Shareholders’ funds at 31 December        23,508 20,054
26. Dividends 
The dividends paid in the year were as follows:
       2009 2008
       £’000 £’000
Final dividend in respect of the year ended 31 December 2008 at 0.237p per share (2008: 0.21p)   427 376
Interim dividend at 0.145p per share (2008: 0.126p)       262 226
       689 602
A second interim dividend in respect of the year ended 31 December 2009 of 0.28p per share amounting to a total dividend of 
£519,000, is to be paid on 19 March 2010. These financial statements do not reflect this dividend payable. 
Notes to the Financial Statements
continued Patsystems Plc
Annual report and accounts 2009 51
Financial Statements
27. Financial Instruments
27.1 Financial Risk Management
The Group’s financial instruments comprise cash and liquid resources, trade and other debtors and creditors arising directly from the 
operations of the Group and forward exchange contracts. The main risks arising from the Group’s financial instruments are interest 
rate risk and foreign currency risk. The Board reviews and agrees policies for managing each of these risks and they are summarised 
in note 3 above. 
27.2 Accounting Policies
The Group’s accounting policies for financial instruments are detailed in note 1 above and have been applied to the line items 
below.
       Assets at
       fair value
       through
      Loans and the profit
      receivables and loss Total
 2009      £’000 £’000 £’000
Assets as per balance sheet  
Trade and other receivables       5,332 – 5,332
Derivative financial instruments       – 176 176
Income tax      8 – 8
Cash and cash equivalents       8,896 – 8,896
      14,236 176 14,412
      Liabilities at
      fair value Other
      through the financial
      profit and loss liabilities Total
 2009      £’000 £’000 £’000
Liabilities as per balance sheet
Trade and other payables       2,793 – 2,793
Income tax       – 98 98
Provisions      325 – 325
      3,118 98 3,216
       Assets at
       fair value
       through
      Loans and the profit
      receivables and loss Total
 2008      £’000 £’000 £’000
Assets as per balance sheet
Trade and other receivables       6,995 – 6,995
Income tax       3 – 3
Cash and cash equivalents       5,929 – 5,929
      12,927 – 12,927
      Liabilities at
      fair value Other
      through the financial
      profit and loss liabilities Total
 2008      £’000 £’000 £’000
Liabilities as per balance sheet
Trade and other payables       4,973 – 4,973
Derivative financial instruments      853 – 853
Provisions      221 – 221
      6,047 – 6,047
The Group had no borrowings as at 31 December 2009 or 31 December 2008.   Patsystems Plc
Annual report and accounts 2009 52
Financial Statements
27. Financial Instruments continued
27.3 Foreign Currency Exposure 
The Group’s principal exposure to exchange rate fluctuations arises on the translation of overseas net assets and profits into Sterling 
for accounting purposes. 
Analyses of the Group’s financial assets and liabilities denominated in foreign currencies are given in notes 17, 18 and 19. 
  
The Group has a net earnings exposure to the US Dollar together with an exposure to the translation of the balance sheet of its US 
subsidiary. During the year, the Board authorised the hedging of US Dollar exposures. At 31 December 2009 the Company has the 
following hedges in place:
Forward contracts  
  
 Forward contract value       Maturity date  Effective forward rate 
$500,000      29-Jan-10  1.4780
$500,000      26-Feb-10  1.4255
$350,000      31-Mar-10  1.3862
$500,000      30-Apr-10  1.5093
  
Currency options  
  
 Forward contract value       Maturity date  Effective forward rate 
$750,000      28-Jun-10  1.7000
$500,000      28-Jul-10  1.7000
$600,000      26-Aug-10  1.7000
$800,000      28-Sep-10  1.7000
$550,000      26-Oct-10  1.7000
At the year end the fair value of the above contracts is an asset of £176,000 (2008: liability £853,000). The movement in fair values 
of £1,029,000 (2008: £883,000) has been credited (2008: charged) to the income statement in the year.
28. Related Party Transactions
Revenue includes £428,000 (2008: £425,000) in respect of Banca Caboto Spa (London Branch), a member of a group of companies 
which include CAI (Suisse), a shareholder of the Company. At 31 December 2009 the amount owing to Group companies by Banca 
Caboto Spa (London Branch) was £78,870 (2008: £ nil).
Revenue also includes £350,000 (2008: £271,000) in respect of Marex Trading Services, a company of which one of the Non-
Executive Directors, Steve Sparke, is also a Director. At 31 December 2009 the amount owing to Group companies by Marex Trading 
Services was £43,341 (2008: £26,000).
Key Management Remuneration
Details of the remuneration of key management are detailed below:
       2009 2008
       £’000 £’000
Salaries and short term employee benefits        1,460 1,660
Share based payments        124 264
       1,584 1,924
  
Notes to the Financial Statements
continued Patsystems Plc
Annual report and accounts 2009 53
Financial Statements
Independent Auditors’ Report to the Members of Patsystems Plc 
We have audited the financial statements of Patsystems Plc for 
the year ended 31 December 2009 which comprise the primary 
statements such as the Balance sheet, the Accounting Policies 
and the related notes. The financial reporting framework that 
has been applied in their preparation is applicable law and 
United Kingdom Accounting Standards (United Kingdom 
Generally Accepted Accounting Practice). 
Respective responsibilities of directors and auditors 
As explained more fully in the Directors’ Responsibilities 
Statement set out on page 18 the Directors are responsible for 
the preparation of the financial statements and for being 
satisfied that they give a true and fair view. Our responsibility is 
to audit the financial statements in accordance with applicable 
law and International Standards on Auditing (UK and Ireland). 
Those standards require us to comply with the Auditing Practices 
Board’s Ethical Standards for Auditors. 
This report, including the opinions, has been prepared for and 
only for the Company’s members as a body in accordance with 
Sections 495 and 496 of the Companies Act 2006 and for no 
other purpose.  We do not, in giving these opinions, accept  
or assume responsibility for any other purpose or to any other 
person to whom this report is shown or into whose hands it  
may come save where expressly agreed by our prior consent  
in writing.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and 
disclosures in the financial statements sufficient to give reasonable 
assurance that the financial statements are free from material 
misstatement, whether caused by fraud or error. This includes an 
assessment of: whether the accounting policies are appropriate to 
the Company’s circumstances and have been consistently applied 
and adequately disclosed; the reasonableness of significant 
accounting estimates made by the Directors; and the overall 
presentation of the financial statements.
Opinion on Financial Statements 
In our opinion the financial statements: 
give a true and fair view of the state of the Company’s affairs •	
as at 31 December 2009; 
have been properly prepared in accordance with United •	
Kingdom Generally Accepted Accounting Practice; and 
have been prepared in accordance with the requirements of •	
the Companies Act 2006. 
Opinion on Other Matter Prescribed by the Companies  
Act 2006 
In our opinion the information given in the Directors’ Report for 
the financial year for which the financial statements are prepared 
is consistent with the financial statements. 
Matters on Which we Are Required To Report By Exception 
We have nothing to report in respect of the following matters 
where the Companies Act 2006 requires us to report to you if,  
in our opinion: 
adequate accounting records have not been kept, or returns •	
adequate for our audit have not been received from branches 
not visited by us; or 
the financial statements are not in agreement with the •	
accounting records and returns; or 
certain disclosures of Directors’ remuneration specified by law •	
are not made; or 
we have not received all the information and explanations we •	
require for our audit. 
Nigel Reynolds 
(Senior Statutory Auditor)
For and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London 
8 February 2010 Patsystems Plc
Annual report and accounts 2009 54
Financial Statements
Company Balance Sheet
at 31 December 2009 
       2009 2008
      Notes £’000 £’000
FIXED ASSETS   
Investments      4 1,605 1,605
CURRENT ASSETS   
Debtors      5 6,932 5,918
Cash at bank and in hand        28 5
         6,960 5,923
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR     6 (65) (81)
Net current assets        6,895 5,842
Net assets        8,500 7,447
CAPITAL AND RESERVES   
Share capital      7  1,853  1,795
Share premium account      9  4,493  3,869
Other reserves      9 50 50
Retained earnings      9  2,104  1,733
Total equity      9  8,500  7,447
The financial statements on pages 54 to 60 were approved by the Board of Directors on 8 February 2010.
David Webber Martin Thorneycroft
Chief Executive Officer Finance Director Patsystems Plc
Annual report and accounts 2009 55
Financial Statements
Notes to the Financial Statements
1. Accounting Policies
The financial statements have been prepared on the historical cost basis of accounting and in accordance with applicable accounting 
standards in the United Kingdom. 
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been 
consistently applied to all the years presented, unless otherwise stated.
1.1 Investments 
Investments in subsidiaries are stated at cost less any provision for impairment. Where an acquisition satisfies the provisions of 
sections 611 to 616 of the Companies Act 2006, merger relief is available and the investment is stated at nominal value of shares 
issued plus the value of any other consideration.
1.2 Operating Leases
Costs in respect of operating leases are charged to the Profit and Loss Account on a straight line basis over the lease term. 
1.3 Current and Deferred Income Taxes
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the Balance Sheet date. 
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulations are 
subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax 
authorities.
Deferred taxation is recognised in respect of timing differences that have originated but not reversed at the Balance Sheet date, 
where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have 
occurred at the Balance Sheet date.
A net deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can 
be regarded as more likely than not that there will be sufficient taxable profits to utilise carried forward tax losses and against which 
the reversal of underlying timing differences can be deducted.
Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the timing differences are 
expected to reverse based on tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date. 
Deferred tax is measured on a non-discounted basis.
1.4 Related Party Transactions
Financial Reporting Standard (‘FRS’) 8, ‘Related Party Transactions’, requires the disclosure of the details of material transactions 
between the reporting entity and related parties. The Company has taken advantage of exemptions under FRS 8 not to disclose 
transactions between Group companies.
1.5 Share Based Payments
The Group operates two share options schemes; the Enterprise Management Incentive Scheme and the 2003 Share Option Scheme 
(Inland Revenue unapproved). 
The fair value of options is recognised as an employee benefit expense with a corresponding increase in reserves over the vesting 
period. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and 
share premium when the options are exercised. 
1.6 Cash Flow Statement 
The Company is the Parent Company of the Patsystems Plc Group and is included in the consolidated financial statements of 
Patsystems Plc. Consequently, the Company has taken advantage of the exemption from preparing a cash flow statement under the 
terms of Financial Reporting Standard 1 (revised 1996).
1.7 Dividend Distributions
Final dividend distributions to the Company’s shareholders are recognised as liabilities in the Company’s financial statements in the 
period in which the dividends are approved by the Company’s shareholders. Interim dividend distributions to the Company’s 
shareholders are recognised as liabilities in the Company’s financial statements when paid. Patsystems Plc
Annual report and accounts 2009 56
Financial Statements
2. Directors and Employees
The Parent Company does not employ any Directors or employees.
3. Profit and Loss Account 
The profit for the year dealt with in the accounts of the Company was £799,000 (2008: £1,196,000).
The Directors have taken advantage of the exemption available under section 408 of the Companies Act 2006, and have not 
presented a Profit and Loss Account for the Company alone. 
4. Investments  
        £’000
Investment in subsidiary undertaking 
At 1 January 2009 and 31 December 2009        1,605
The investment in subsidiary undertakings represents:
1. A 100% investment in respect of voting rights and nominal value in Patsystems Holdings Limited, a company incorporated in 
England and Wales.
 The historical cost of the investment in the shares of Patsystems Holdings Limited is £11,180,000. Under the Scheme of 
Arrangement the subsidiary undertaking returned capital to the Company amounting to £9,865,000, and the cost of the 
investment has been reduced accordingly to reflect this.
 The following subsidiary undertakings were wholly owned by Patsystems Holdings Limited in respect of voting rights and 
nominal value of issued shares and perform the sale and support of electronic trading systems:
 Patsystems (UK) Ltd  – incorporated in England and Wales
 Patsystems (NA) LLC  – incorporated in United States
 Patsystems Pte Ltd  – incorporated in Singapore
 Patsystems Pty Ltd  – incorporated in Australia
 Patsystems GmbH  – incorporated in Germany
 The following subsidiary is wholly owned by Patsystems Holdings Limited in respect of voting rights and nominal value of issued 
shares and acted as a holding company:
 Professional Automated Trading Systems BV (incorporated in The Netherlands).
 
 Professional Automated Trading Systems BV owns 100% of voting rights and nominal value of issued shares in Patsystems (Japan) 
KK (incorporated in Japan), which performs the sale and support of electronic trading systems. 
 Patsystems (Japan) KK owns 100% of voting rights and nominal value of issued shares in Patsystems (Ireland) Ltd (incorporated in 
the Republic of Ireland), which acts as a holding company. 
         
2. A 100% investment in Tamesis Limited, a company incorporated in England and Wales that develops, distributes and supports 
software enabling real time trade capture, valuation and risk management for the structured finance market.
5. Debtors
  
       2009 2008
       £’000 £’000
Amounts owed by Group undertakings       6,909 5,913
Other debtors       16 2
Prepayments and accrued income       7 3
       6,932 5,918
Notes to the Financial Statements
continued Patsystems Plc
Annual report and accounts 2009 57
Financial Statements
6. Creditors: Amounts Falling Due Within One Year 
       2009 2008
       £’000 £’000
Trade creditors       1 19
Accruals and deferred income       64 62
       65 81
  
None of the creditors are secured. 
7. Called Up Equity Share Capital  
   
       2009 2008
       £’000 £’000
Authorised
Ordinary shares of 1p each   
At 1 January and 31 December – 250,000,000 shares       2,500 2,500
Deferred shares of 1p each  
At 1 January and 31 December – 2 shares        – –
Redeemable preference shares of £1 each   
At 1 January and 31 December – 49,998 shares        50 50
Allotted, called up and fully paid    
Ordinary shares of 1p each   
At 1 January – 179,537,301 shares        1,795 1,775
Allotted as consideration for acquisition of Tamesis Limited       – 11
Allotted under share option schemes – 5,793,392       58 9
At 31 December – 185,330,693 shares        1,853 1,795
  
The 1p ordinary shares are listed on the AIM market. They have one voting right per share. 
  
Deferred shares of 1p each   
At 1 January and 31 December – 2 shares        – – Patsystems Plc
Annual report and accounts 2009 58
Financial Statements
8. Share Option Schemes
The following options to purchase 1p Ordinary shares in Patsystems Plc were granted, exercised, lapsed and outstanding during  
the year:
 Exercise Outstanding    Outstanding Exercisable
 price in at 1 January Granted Exercised Lapsed at 31 December at 31 December Effective
 pence 2009 in year in year in year 2009 2009 dates
 5.08p 1,185,500  –  (582,500) (45,000) 558,000 558,000 Note a
 9.50p 97,500  –  (7,500)  –  90,000 90,000 Note a
 13.75p 727,272  –  (727,272)  –   –   –  Note e
 14.25p 497,153  –  (82,800) (10,800) 403,553 403,553 Note b
 14.50p 496,951  –   –   –  496,951 496,951 Note b
 15.25p 775,737  –   –   –  775,737 775,737 Note b
 15.58p 1,346,900  –  (437,400) (239,100) 670,400 670,400 Note b
 17.50p 90,000  –  (45,600) (14,400) 30,000 30,000 Note b
 27.75p 250,000  –   –   –  250,000 – Note g
 29.00p 444,827  –   –   –  444,827 – Note g
  5,911,840  –  (1,883,072) (309,300) 3,719,468 3,024,641 
       
 1.00p 582,525  –  (582,525)  –   –   –  Note i
 13.75p 3,272,728  –  (3,272,728)  –   –   –  Note f
 14.25p 254,494  –  (40,667) (34,684) 179,143 179,143 Note c
 14.50p 83,089  –   –   –  83,089 83,089 Note c
 15.25p 404,263  –   –  (60,000) 344,263 344,263 Note d
 15.58p 670,400  –  (14,400) (60,300) 595,700 595,700 Note c
 18.00p 500,000  –   –   –  500,000 500,000 Note d
 27.75p 1,000,000  –   –   –  1,000,000 – Note h
 29.00p 1,655,173  –   –   –  1,655,173 – Note h
  8,422,672  –  (3,910,320) (154,984) 4,357,368 1,702,195 
Total all 
 schemes 14,334,512  –  (5,793,392) (464,284) 8,076,836 4,726,836 
  
Note a: These options were granted under the initial award of the Enterprise Management Incentive (‘EMI’) Scheme. These options 
are now 100% exercisable.
Note b: Options were granted under the second and third awards of the EMI Scheme. 76% of the options awarded under the 
second and third grants have currently vested and the remaining 24% of these options will vest on  
8 February 2010.
Note c: These options were granted under the second and third awards of Part B (Inland Revenue Unapproved) of the Patsystems 
Plc 2003 Share Option Scheme.  The vesting status is the same as note b, with the exception of 34,540 unapproved options with an 
exercisable price of 14.50p which all vested in 2008.
Note d: These options were granted under the second and third awards of Part B (Inland Revenue Unapproved) of the Patsystems 
Plc 2003 Share Option Scheme.  844,263 of these options became fully vested in 2008 following approval from the Remuneration 
Committee, the remaining options are subject to the same vesting status as note b.
Note e: These options were granted under a special award of the EMI Scheme. These options were exercised on the 22 December 
2009. The aggregate on the gain made on these options was £52,727.
Note f: These options were granted under a special award of Part B (Inland Revenue Unapproved) of the Patsystems Plc 2003 Share 
Option Scheme. These options were exercised on the 22 December 2009. The aggregate on the gain made on these options  
was £237,273.
Note g: These options were granted under a special award of the EMI Scheme. These options can be exercised after a period of 
three years after the date of the grant but subject to achieving Company performance targets.
Note h: These options were granted under a special award of Part B (Inland Revenue Unapproved) of the Patsystems Plc 2003 Share 
Option Scheme, exercise conditions are as per note g.
Notes to the Financial Statements
continued Patsystems Plc
Annual report and accounts 2009 59
Financial Statements
Note i: These options were granted under a special award of Part B (Inland Revenue Unapproved) of the Patsystems Plc 2003 Share 
Option Scheme. These options were exercised on 17 March 2009.
The weighted average fair value per share at the measurement date of options granted during the year was nil p (2008: nil p).
The weighted average share price at the date of grant of options granted during the year was nil p (2008: nil p). 
For the options that were exercised during the year, the weighted average share price at the date of exercise was 21p (2008: 23p).
The weighted average remaining contractual life of options outstanding at the year end is 5.7 years (2008: 6.7 years)
The total fair value that was charged to the income statement in relation to the share options was £261,000 (2008: £329,000), all of 
which related to equity settled share based payment transactions.
The fair values of the options have been calculated using the Binomial Model. The model takes into account the following factors in 
determining the fair value of an option:
(a) Share Price and Exercise Price 
Share prices are closing share prices as at the date of grant. Exercise prices are listed in the above schedule.
(b) Expected Term of the Options
It is assumed that the expected life of the options under consideration is five years. 
(c) Volatility
Volatility of the Company’s share price has been calculated as the annualised standard deviation of daily continuously compounded 
returns on the Company’s stock, derived from the Company’s historical share prices, adjusted for splits, over five years back from 
each date of grant.
(d) Risk-Free Interest Rate
The risk-free rates of interest are assumed to be the yield to maturity on a UK Gilt Strip with the term to maturity equal to the 
expected life of the option. 
(e) Dividends
The valuations take account of the expected future dividend yield at the date of each grant.
The table below sets out the volatilities, risk-free interest rates and dividend yields applied in each valuation:
      Risk-free  
     Volatility  interest rate  Dividend yield
 Date of grant     (%)   (%)   (%)
24–Feb–03    77.8009%  4.6922%  0.00%
13–Mar–03    78.3590%  4.7175%  0.00%
30–Jun–03    78.4194%  4.6412%  0.00%
27–Oct–03    79.8321%  5.7891%  0.00%
01–Jan–04    78.6748%  5.4125%  0.00%
30–Jul–04    73.6821%  5.8602%  0.00%
27–Aug–04    71.7764%  5.6660%  0.00%
16–Nov–04    58.9201%  5.2789%  0.00%
04–Feb–05    56.6301%  5.1507%  0.00%
17–Mar–05    52.4971%  5.4148%  0.00%
06–Oct–05    54.9819%  4.7689%  2.00%
23–Nov–05    49.8819%  4.8322%  2.00%
14–Dec–05    50.0097%  4.8764%  2.00%
14–Feb–06    50.1501%  4.7515%  2.00%
19–Apr–07    48.4035%  5.2980%  1.00%
7–Dec–07    30.0527%  4.5550%  1.00%
31–Dec–07    30.9369%  5.6204%  1.00% Patsystems Plc
Annual report and accounts 2009 60
Financial Statements
9. Share Capital and Reserves
   At Shares Earnings  Share At
   1 January issued in for the Dividends compensation 31 December
   2009 the year year paid expense 2009
   £’000 £’000 £’000 £’000 £’000 £’000
Paid up share capital    1,795 58 – – – 1,853
Share premium    3,869 624 – – – 4,493
Other reserves   50 – – – – 50
Retained earnings    1,733 – 799 (689) 261 2,104
   7,447 682 799 (689) 261 8,500
10. Dividends  
The dividends paid in the year were as follows:
       2009 2008
       £’000 £’000
Final dividend in respect of the year ended  
 31 December 2008 at 0.237p per share (2008: 0.21p)      427 376
Interim dividend at 0.145p per share (2008: 0.126p)       262 226
       689 602
A second interim dividend in respect of the year ended 31 December 2009 of 0.28p per share amounting to a total dividend of 
£519,000, is to be paid on 19 March 2010. These financial statements do not reflect this dividend payable.  
Notes to the Financial Statements
continued Patsystems Plc
Annual report and accounts 2009 61
Financial Statements
Directors and Advisers 
Directors
Richard Last Chairman and Non-Executive Director
David Webber Chief Executive
Martin Thorneycroft Finance Director 
John Priestley Non-Executive Director, Chairman of the Audit Committee 
Steve Sparke Non-Executive Director, Chairman of the combined Remuneration and Nominations Committee
Company Secretary  
Martin Thorneycroft
Advisers
Broker and nominated adviser Numis Securities
Lawyers DLA Pipers
 Vedder Price, Kaufman & Kammholz
Registered auditors PricewaterhouseCoopers LLP 
Principal bankers Barclays Bank plc
    
Registrars Computershare Services plc
 PO Box 82
 The Pavillions
 Bridgewater Road
 Bristol
 BS99 7NH
Corporate Details
Registered office: Riverside House, 2A Southwark Bridge Road, London SE1 9HA
Company number: 4498002
Country of incorporation: England and Wales
Website: www.patsystems.com
Stock Exchange symbol: pts Patsystems Plc
Annual report and accounts 2009 62
Financial Statements
Notes Patsystems Plc
Annual report and accounts 2009 63
Financial Statements Patsystems Plc
Annual report and accounts 2009 64
Financial Statements
Notes Patsystems Plc
Providing high-performance 
electronic trading solutions 
with global market connectivity , 
complete end-to-end exchange 
solutions and comprehensive  
risk management tools. Patsystems Plc
Annual report and accounts 2009 
Offices and addresses
Europe
London
Riverside House
2A Southwark Bridge Road
SE1 9HA
Tel +44 (0)20 7940 0490 
Fax +44 (0)20 7803 1619
USA
Chicago 
175 W. Jackson Blvd 
Suite #2260 
Chicago, IL 60604 
Tel +1 312 922 7600 
Fax +1 312 922 7625 
New York
80 Broad Street
5th Floor, Suite #507
NY, NY 10004
Tel +1 212 837 7843
Fax +1 212 837 7792
Asia Pacific
Singapore 
137 Telok Ayer Street
#07-07
Singapore 068602
Tel +65 6216 0452
Fax +65 6536 4167
Tokyo 
2nd Floor, Kakigara-Cho Bldg
10-7, Nihon-bashi Kakigara-Cho 
1-chome
Chuo-Ku
Tokyo  103-0014  
Tel +81 (0) 3 3668 9372
Fax +81 (0) 3 3668 9393
Sydney 
Level 6
Underwood House
37 Pitt Street
Sydney NSW 2000
Tel +61 (0) 2 8987 9600
Fax +61 (0) 2 8252 7640
Hong Kong 
32 Hollywood Road
Unit 2004
Kinwick Centre
Sheung Wan
Hong Kong 
Tel +852 3180 9512
Fax +852 3180 9399
Patsystems Plc was established in  
1994 as one of the original independent 
software vendors to provide a complete 
suite of modular products to support the 
electronic trading of futures and options.
Today we enable over 10,000 traders to 
transact in the global derivatives market 
every month with extensive market 
connectivity spanning from Latin 
America to Japan.
Contents
Overview 
Highlights 01
At a Glance 02
Our Achievements 03
Chairman’s Statement 04
 
Business Review
Chief Executive’s Report 06
Finance Director’s Review 10
Our Board 14
 
Governance 
Directors’ Report 16
Statement of Corporate Governance 19
Report of the Board on Directors’  
Remuneration and on  
Group Remuneration Policy 21
 
Financial Statements 
Independent Auditors’ Report to the  
Members of Patsystems Plc 25
Consolidated Income Statement 26
Consolidated Statement of  
Comprehensive Income 26
Consolidated Balance Sheet 27
Consolidated Statement of Changes  
in Equity 28
Consolidated Cash Flow Statement 29
Notes to the Financial Statements 30
Independent Auditors’ Report to the  
Members of Patsystems Plc 53
Company Balance Sheet 54
Notes to the Financial Statements 55
Directors and Advisers 61
Patsystems Plc  Annual report and accounts 2009