EuropE
London
Cottons Centre 
Hays Lane
SE1 2QP 
Tel +44 (0)20 7940 0490 
Fax +44 (0)20 7940 0499 
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
ASi A pA cific Singa Por E 
137 Telok a yer Street
#07-07
Singapore 068602
Tel +65 6216 0452
Fax +65 6536 4167
TokY o 
2nd Floor, k akigara-Cho Bldg
10-7, n ihon-bashi k akigara-Cho 1-chome
Chuo-k u
Tokyo 103-0014 
Tel +81 (0) 3 3668 9372
Fax +81 (0) 3 2664 7594 
SYdn EY 
Level 6
Underwood House
37 Pitt Street
Sydney n SW 2000
Tel +61 (0) 2 8987 9600
Fax +61 (0) 2 8252 7640
Hong k ong 
15th Floor
100 Queen’s r oad
Central Hong kong
Tel +852 31809512
Fax +852 31809399
Annual Report 2007
Annual Report 2007 Patsystems    |    Annual Report 2007
Directors and Advisers
DIRECTORS
Stewart Millman Chairman and Non-executive Director
David Webber Chief Executive
Martin orneycro Finance Director 
Richard Last Non-executive Director, Chairman of the Audit Commiee 
Steve Sparke Non-executive Director
John Priestley Non-executive Director, Chairman of the combined Remuneration  
 and Nominations Commiee
COMPANY SECRETARY
Daljit Kaur-Khela
ADVISERS
Broker and Nominated adviser Seymour Pierce Limited
Lawyers DLA Pipers
 Vedder, Price, Kaufman & Kammholz
Registered auditors PricewaterhouseCoopers LLP 
Principal bankers Barclays Bank plc
Registrars Computershare Services plc
 PO Box 82
 e Pavillions
 Bridgewater Road
 Bristol
 BS99 7NH
CORPORATE DETAILS
Registered oce: Coons Centre, Hays Lane, London SE1 2QP
Company number: 4498002
Country of incorporation: England and Wales
Website: www.patsystems.com
Stock Exchange symbol: pts
PS2234 - AR07 (Back) AW06.indd   69 10/3/08   13:00:38
Highlights 01
Patsystems’ 2007  nancial and 
operational results at a glance. 
Business Pro le 02
A concise overview of Patsystems’ 
history, products and services.
 
Chairman’s Statement 04
Stewart Millman’s review of the 
company and its results for 2007.
Chief Executive’s Report 08
David Webber’s report on business 
in 2007 and the company objectives 
for 2008.
Finance Director’s Review 14
Martin  orneycro ’s summary 
of the 2007 results.
Our Board 18
Biographies of the Board members 
who served through 2007.
Directors’ Report 20
Statement of Corporate Governance 23
Report of the Board on 
Directors’ Remuneration and on 
Group Remuneration Policy 25
Independent Auditors’ Report 29 
Consolidated Income Statement 30
Consolidated Balance Sheet 31
Consolidated Cash Flow Statement 32
Reconciliation of Net Pro t to Net 
Cash Flows from Operating Activities 33
Notes to the Financial Statements 34
Independent Auditors’ Report 61
Company Balance Sheet 62
Notes to the Financial Statements 63
Directors and Advisers IBC
We’ll never try to push a one-size- ts-all trading 
system onto you. We’ll work with you to deliver 
tailored solutions, built from modular components, 
that maximise the investment you’ve already made 
and align with your business strategies.
From a single plug-and-play module to address a 
speci c issue, to complete high performance trading 
systems with global market access, our solutions 
are designed to enhance derivatives trading 
performance and trade processing.
We call it FlexAbility.
Contents 
Patsystems    |    Annual Report 2007
PS2234 - AR07 (Front) AW05.indd   1 10/3/08   14:37:02 Highlights
PROFIt/(LOSS)  
BEFORE t Ax (£ M)
Financial Highlights 
Revenue up 11% to £17 million (2006 – £15.3 million) 
Operating profit as a percentage of sales up to 12.3%  
(2006 – 10.3%)
Adjusted Pre-t ax Profit up 43% to £3 million (2006 –  
£2.1 million)*
Proposed full year dividend of 0.33p (2006 – 0.30p)  ‘03 ‘04 ‘05 ‘06 ‘07
3000
2000
1000
0
-1000
-2000
-3000
* 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.
Operational Highlights
375 Pro-Mark screens deployed (2006 – 129) 
Significant customer wins: 
R J O’Brien & Associates – one of the largest independent  »
futures brokerages in the US
The Macquarie Group – the international provider of banking,  »
financial, advisory and investment services (first adopter of 
Global t rading)
Pro-Mark version 4.0 launched with functionality specifically  
designed for energy traders
1 Patsystems    |    Annual Report 2007 Patsystems    |    Annual Report 2007
Business Profile
02
Patsystems: our business 
Patsystems’ long-standing reputation has been established through both 
outstanding customer partnerships and proven technology. Patsystems was 
established in 1994 as one of the original independent software vendors 
(ISVs) to develop electronic trading solutions. t oday, we are one of the world’s 
leading software providers for professional, technical and retail traders. 
Patsystems sets the standard for technology solution partnerships within 
the exchange-traded derivatives sector. With our extensive global market 
connectivity, exceptional customer support, scalable trading solutions and 
market leading risk technology, we continue to set a benchmark for other ISVs 
to attain. 
build it your way 
We offer solutions at every step in the trading cycle. Our experienced 
development team delivers excellence in both performance and innovation: 
A choice of three market leading front-end trading screens provide  
flexible functionality to cater for all traders’ needs: whether professional, 
technical or retail. 
A proven core system provides high speed order routing and straight  
through processing. 
Sophisticated pre- and post-trade risk management, across multiple assets  
in real-time. Our post-trade risk solutions are selected by global financial 
institutions looking for a highly-capable, reliable and efficient solution, 
and our pre-trade risk solutions have been adopted by the major futures 
clearing merchants. 
Our exchange-matching engine has been adopted by six exchanges  
worldwide and is fully integrated to our trading and risk solutions.
Patsystems complements this superior risk and trading technology by providing 
extensive access to global liquidity. This access spans across multiple asset 
classes and exchanges in over 20 countries. 
At Patsystems, our customers’ needs are at the core of our business success and 
future growth.
We have moved quickly to benefit from the growth in derivatives 
trading. Global exchange numbers vs. global traded volume show that 
exchange volumes are growing rapidly.
tO t AL NUMBER OF  
FUt URES CONt RACt S  
t RADED GLOBALLy (M IL.)
3,600
3,100
4,200
5,800
‘03 ‘04 ‘05 ‘06
PAt Sy St EMS Ex CHANGE 
CONNECt IVIty
30
24
36
49
‘07 ‘06 ‘05 ‘04 Patsystems    |    Annual Report 2007
Case studies: Newedge takes Risk iN fo Rme R 
Newedge is a global brokerage and clearing firm providing institutional clients 
with efficient access to financial and commodity markets around the world. With 
memberships on the major worldwide futures and options exchanges, it consistently 
ranks among the largest in customer volume.
By implementing Patsystems’ Risk Informer, Newedge has introduced real time post-
trade risk management, giving it the capability to take on additional clients with a range 
of risk profiles and complex trading styles.
the Challenge
Newedge was using a number of ISV-specific pre-trade risk management applications 
to monitor its clients’ trading activity. This approach had several major limitations: 
first, it offered no way to risk manage clients with direct market access; second, it 
often meant maintaining multiple pre-trade risk filters for a single client; third, setting 
position limits for options traders was a labour intensive task and yielded a flawed 
picture of their true risk profile. 
the s olution
Newedge identified the need for a more intelligent, across the board, margin 
calculation. A review of available systems was conducted, in which Risk Informer was 
evaluated alongside offerings from established back-office vendors. Risk Informer was 
selected on the basis that it was more capable, more flexible and simpler to deploy 
than the competition. 
While other systems use batch processing, in some cases assessing data only once 
every fifteen minutes, Risk Informer’s event-driven architecture triggers a new margin 
calculation after every trade. “We needed a system capable of monitoring high volume, 
high velocity traders, ” said Leslie Sutphen, Newedge’s Global Head of eSolutions. 
“When you consider how many trades an algorithmic black box can generate in 
fifteen minutes, it is clear that a batch processing system would provide inadequate 
protection, potentially triggering alerts only after it was too late to act. With Risk 
Informer’s real time monitoring we can step in the moment a limit is breached. ”
Newedge signed the deal with Patsystems in March 2006, and by August client 
simulations were running for trades on numerous global exchanges, and the system has 
been in full production mode since January 2007. Coverage has since been expanded 
to include Asian exchanges.
“Patsystems worked hard to deliver a smooth and timely installation and ensure all 
of our objectives were met, ” said Sutphen. “On-going production support from their 
highly responsive team has also been excellent. ” Impressed with the flexibility of Risk 
Informer and its ability to handle multiple asset classes, Newedge has also selected the 
system for its foreign exchange business.
business benefits
With the Risk Informer installation in Chicago, Newedge now has the capability to risk 
manage its clients worldwide on a real time, post-trade basis. As well as effecting a 
major improvement in the risk management of existing business, this has enabled the 
firm to expand by offering clearing services to a wider range of clients.
“Risk Informer has given us the scalability to continue growing our business, ” 
commented Sutphen. “The system is currently being used to risk manage ten major 
clients with combined daily margins of well over $200m, and we’re signing up new 
clients all the time. By enabling us to monitor much more effectively DMA traders and 
options traders, Risk Informer gives us the opportunity to fully service clients that, 
because of high volume electronic trading, are essentially a new class of risk profile. ”
t RadiN g solutioN s t rader’s tools and front-ends
Pro-Mark
J-t rader
IQ-t rader
t rading a Pi
Patsystems API
FIx t rading Gateway
Risk solutio Ns Risk Informer
Risk Monitor
e x ChaN ge solutio Ns Exchange Solutions
Patsystems Matching Engine
Clearing System Patsystems    |    Annual Report 2007
Chairman’s Statement
shareholders may recollect that the 2006 a nnual r eport had 
the theme “soaring to new heights” . hopefully, the outcome for 
Patsystems in 2007 has justified the high level of confidence which 
we showed a year ago.
The strong financial results summarised below have been achieved while we 
have had to contend with an unforeseen level of trauma in some sectors of the 
global financial markets and adverse exchange-rate movements against sterling. 
The decline in the average US dollar and yen exchange rates have together 
reduced pre-tax profit by an estimated £390,000.
As David’s report describes in detail, while achieving these results, 2007 has 
seen us move our trading systems product range to demonstrable market 
leadership, with our professional front-end Pro-Mark and a new core platform, 
Global t rading, which will be state-of-the art for many years to come. Risk 
Informer is achieving growing sales success, as the current more risk-averse 
external environment motivates our customers to make a more sophisticated 
analysis of their immediate and potential market exposures.
We have continued to add significant new customers such as global investment 
bank The Macquarie Group, as the first adopter of Global t rading, and 
R  J O’Brien & Associates, one of the largest independent futures brokerages 
in the United States. In addition, we have continued to extend the products 
and services we provide to our existing customer base via the adoption of Risk 
Informer, and new trading installations within the Asia region.
f inan Cial r esults
Pre-tax profit for the full year ended 31 December 2007 was £2.19 million 
compared to £1.63 million in 2006 and £0.36 million in 2005. Fully diluted EPS, 
excluding the impact of deferred tax, grew to 1.2p per share from 0.8p per 
share last year. 
02
stewart millman 
CHAIRMAN,  
NON-Ex ECUt IVE DIRECt OR Patsystems    |    Annual Report 2007 05
Adjusted pre-tax profit (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) for the full year ended 
31 December 2007 was £3.0 million compared to £2.1 million in 2006. Fully diluted 
EPS on this basis and excluding the impact of deferred tax grew to 1.6p per share 
from 1.1p per share last year. Details of these calculations are set out in the Earnings 
Per Share section of the Finance Director’s Review on page 15.
Cash flows from operating activities have remained steady at £2.65 million 
(2006: £2.69 million). 
With 83% of revenue in 2007 of a recurrent nature the business has an excellent 
financial foundation for 2008, and the stability of revenues in turn assists us to plan 
the business with a high degree of comfort.
The initial tamesis earn out period concluded on 31 July 2007 and 12.159 million 
ordinary shares were issued as consideration to the vendors of t amesis in 
September 2007. Under the Sale and Purchase Agreement a further and final issue 
of approximately 1.092 million shares will be issued in February 2008.
dividend
Following the dividend of 0.3p per share, approved by shareholders at the Annual 
General Meeting on 19 April 2007, relating to the results for 2006, the Board 
declared an interim dividend of 0.12p, payable in September 2007, based on the 
interim results for the year.
As a continued tangible expression of our confidence the Board is recommending 
the payment of a final dividend of 0.21p based on the results for 2007 as a whole, 
bringing the total dividend for the year to 0.33p per share, compared to a total of 
0.3p for 2006. 
Subject to confirmation at the Annual General Meeting the final dividend will be 
paid on 23 May 2008 to shareholders on the register as at 25 April 2008. The 
shares are expected to be quoted ex-dividend on 23 April 2008.
management and s taff
I must start this section commending David and his team on their achievements 
during 2007. During the last two years, Patsystems has emerged as a company that 
is achieving consistent, forecastable profits and cash-flow, whilst delivering  
a significantly broader range of services and products to its target market place.
Under David Webber and Martin Thorneycroft’s leadership, the business has 
continued to evolve to the benefit of customers, shareholders and staff while 
reinforcing the important attributes of the Patsystems style and approach that 
differentiate it from its competitors. The operational structure which they have 
built is aimed at being robust enough to withstand the vicissitudes that the world 
financial markets seem destined to throw at us. 
One member of the Executive Management Committee (EMC) left during the 
year when Barry White was promoted to Head of Asia Region, replacing Kazuaki 
t akabatake. The Chief Executive’s report details the EMC and their respective 
responsibilities. The stability of our senior management team is a benefit to our 
customers and contributes to the excellent collegiate spirit within the whole firm, 
led by the EMC, and is a vital asset in serving a global industry.
2007 has seen us move our 
trading systems product 
range to demonstrable 
market leadership, with 
our professional front-end 
Pro-mark and a new core 
platform, global t rading.
Patsystems has emerged as 
a company that is achieving 
consistent, forecastable 
profits and cash-flow, whilst 
delivering a significantly 
broader range of services 
and products to its target 
market place. Patsystems    |    Annual Report 2007 06
Chairman’s Statement
The Board regularly engages with as many of the senior 
management team as possibe, including travelling to our 
major locations outside London. On behalf of the Board I can 
say that we continue to be impressed by the commitment, 
professionalism and enthusiasm of all Patsystems’ people.
They should all feel justifiably proud of the business they 
have built.
board
Alongside my thanks to David and Martin, I must thank 
Richard Last, Steve Sparke and John Priestley both for their 
effort and the quality of their wise counsel during 2007.
Richard’s long involvement with a broad range of technology 
businesses, Steve’s 18 years of experience at UBS and John’s 
experience as a Director of Syntegra together provide a range 
of expertise and knowledge highly relevant to the Board’s 
deliberations, as well as being of direct support on various 
matters to the executive directors. I have personally enjoyed 
working with them enormously.
However, all good things must come to an end. I was 
appointed to the Patsystems Board as Chairman in February 
2003. I hope and believe that Patsystems is demonstrably a 
very much better and stronger company now than then. In 
this positive condition I am happy to hand over the Chair to 
Richard Last after the forthcoming Annual General Meeting, 
when I will also retire from the Board. Having known Richard 
for many years and worked professionally with him for most 
of them, I can commend him highly to you. 
f uture
t rading from 1 January 2008 and prospects for 2008 are in 
line with business plans and hence we remain comfortable 
with current market expectations for 2008.
In 2008 we expect to see continued success in promoting 
both existing products and the new products that we have 
developed and to identify further complementary businesses 
or technologies that can be acquired and developed by our 
existing management team. 
The acquisition of tamesis in 2005, and the subsequent 
business success that the Risk Informer product has enjoyed, 
demonstrates the value that can be created by promoting, 
and supporting, a new product through the Patsystems 
global infrastructure.
We believe the fundamental strength of our balance sheet, 
strong cash generation and resilient share price are to our 
benefit when looking for potential acquisitions during a 
period of market and economic turbulence.
As a result, we believe that the long term opportunities 
for our business are outstanding. Despite the uncertainty 
of the economic climate, we view the prospects for the 
Company with continued optimism.
Customers and shareholders
I would like to thank all of our customers for their support 
during 2007. The adoption of our new products and 
services by an increasingly wide group of customers is 
testament to the trust they are putting in us to deliver future 
joint business success.
The Board continues to believe that the transparency of both 
operational plans and financial figures afforded by having a 
key technology partner that is a quoted company is valued by 
both our existing and prospective customers and serves as a 
differentiator from our main competitors.
I would like to thank our shareholders for their continued 
support and we look forward to their involvement 
as Patsystems’ business continues to go from strength 
to strength.
stewart millman 
CHAIRMAN,  
NON-Ex ECUt IVE DIRECt OR
8 February 2008
continued t Radi Ng solutio Ns e x Cha Nge solutio Ns Risk solutio Ns Case studies: Ra Nd f i Na NCial s e Rvi Ces Rand Financial Services executes and clears futures and options on behalf of the world’s 
premier banks, institutional clients, hedge funds, Ct As and non-clearing FCMs.
Founded in 1993 as a wholly owned subsidiary of the Bermuda-based t ewksbury 
Investment Fund Ltd. Rand is a member of all major futures exchanges with its principal 
office located in Chicago.
By implementing Patsystems’ J-t rader front end, Rand can provide its clients with 
electronic access to a growing range of exchanges around the world. Over a period of 
years, Patsystems has time and again delivered the solutions Rand requires to maintain 
a leading position in the evolving market environment. Patsystems remains Rand’s sole 
trading system provider.
a solid deC ision
The advent of electronic trading allowed FCMs to offer their clients access to exchanges 
without the need for a presence on the floor, but in order to do this, the firms needed 
to invest in systems that could deliver that access in a reliable and cost-effective way.
When Rand first decided to provide electronic access via a third-party systems 
provider, it hired an independent consultant to evaluate the available vendors, 
and Patsystems was selected based on that evaluation. By providing a reliable and 
responsive service that has kept pace with the rapidly changing market landscape, 
Patsystems has never given Rand cause to regret its initial decision or to consider 
systems from other vendors.
aCC ess all areas
One of the key services Patsystems has enabled Rand to deliver to its clients is 
connectivity to an ever-widening range of markets.
“We have many hedge fund and Ct A clients who are always interested in expanding 
into new markets – striving to stay ahead of the curve” explains Mike Manning, 
President and CEO of Rand Financial Services. “Consequently there is a regular 
requirement from them for connectivity to new exchanges. We have to be responsive 
to that because if we don’t provide that connectivity, the competition will. Working 
with Patsystems, we have been able to keep pace with that demand and satisfy our 
clients’ voracious appetite for new trading opportunities. ”
Rand currently offers access to sixteen marketplaces via Patsystems. As well as the “big 
four” the list includes IDEM in Italy, MEFF in Spain and, most recently, Dubai Mercantile 
Exchange. Patsystems even offers electronic order routing to the remaining open outcry 
trading venues, enabling Rand clients to trade all markets from the same screen. 
t RadiN g solutioN s t rader’s tools and front-ends
Pro-Mark
J-t rader
IQ-t rader
t rading a Pi
Patsystems API
FIx t rading Gateway
Risk solutio Ns Risk Informer
Risk Monitor
e x ChaN ge solutio Ns Exchange Solutions
Patsystems Matching Engine
Clearing System minibh eu feugiat aliquisi 
eliscid uissecte dolorerilit 
la commodo lortincidunt 
ut am adipis doluptat alis 
ad ea faccumsan enim 
etum in eniatet ut nonullan 
ulputetue delenis at, volesto 
core euguer sed sed sed 
dolorperit dolorper in hent ni
f eugiat aliquisi eliscid 
uissecte dolorerilit la 
commodo lortincidunt ut 
am adipis doluptat alis ad ea 
faccumsan
Patsystems    |    Annual Report 2007 04
Chief Executive’s Report
i am delighted to be able to report on a further year of successful 
business development for Patsystems.
In my report for 2006, I stated our ambition to become a key technology 
provider to the electronic trading industry and the results for the financial year 
ended 31 December 2007 demonstrate the success that we have achieved in 
fulfilling that ambition.
Our performance for the year has continued the trend established in 2006 for 
profit growth, with an operating profit of £2.1 million, a 32% growth over last 
year’s £1.6 million.
Revenue has also risen 11% to £17.0 million compared to £15.3 million.
We have continued to contain increases in our cost base, despite significant 
pressure on salary costs in all our key areas of operation, with operating 
expenses being only 9% higher at £14.5 million when compared to 
£13.3 million in 2006.
A fuller analysis of the changes in the cost base is included within the Finance 
Director’s review but the main contributing factors were the planned 
headcount increases. 
trading systems and market Conne Ctivity
t rading systems revenue increased by 7.5% to £14.3 million for the year 
compared to £13.3 million in 2006.
During the year we achieved new customer wins with R J O’Brien & Associates, 
one of the largest independent futures brokerages in the United States 
of America, and The Macquarie Group, the Australian head-quartered 
international provider of banking, financial, advisory and investment services. 
david w ebber 
CHIEF ExECU t IVE Patsystems    |    Annual Report 2007
The addition of Macquarie as a customer was particularly pleasing given that 
our new Global t rading product played an important part in their decision to 
select Patsystems with Macquarie having identified the benefits that its global 
order book and continuous trading provides.
Macquarie represents the first installation of our new Global t rading core and, 
following an initial deployment in Europe, will roll out the systems capabilities 
within their operations in the United States of America, Australia and Asia. 
We will deliver the Global t rading software, and all the other associated 
software services, to Macquarie offices and clients globally by way of a fully 
hosted service.
As part of our commitment to provide customers with further choice of how 
they receive our software services, we have announced the provision of our 
Application Service Provider (“ASP”) solution and the first customer is now live 
on this service.
During the year, our existing customers have added four further installations, 
in Sydney, Singapore and two in Hong Kong, underlining the importance of 
Asia as an area of growth for the business going forward.
In 2008, we expect the main opportunities for further trading systems 
installations and additional screen deployment to be in the emerging market 
economies of South America, the Middle East and Asia, particularly Hong 
Kong, Malaysia and Indonesia.
In July 2007, Pro-Mark version 4.0 was launched with functionality specifically 
designed for energy traders which enables them to access multiple energy 
markets. Version 4.0 followed on from the successful release of version 3.9 
earlier in the year, which provided support for option strategies, best execution 
and advanced charting.
At the start of 2007, the Pro-Mark billable user numbers were 129 and, as  
at 31 December 2007, this has risen to 375. The majority of these users  
are either converts from our major competitors or traders new to  
electronic trading.
During the year the ability to trade foreign exchange in partnership with  
Gain Capital was added to the J-t rader product and charting capability  
was added. 
Patsystems’ global connectivity has been extended with the Chicago Climate 
Futures Exchange, Dubai Mercantile Exchange, Hong Kong Exchanges and 
Clearing and the United States Futures Exchange all being added in 2007. 
There have also been changes to our existing exchange connectivity. All trading 
system customers are now supported through significant upgrades for the 
major exchanges, as well as additional capability, such as the support of carry 
trades on the London Metal Exchange and an extended product set on the 
Chicago Board of Options Futures Exchange.
09
4000
3000
2000
1000
0
t otal exchange volume  
(adv = a verage daily volume)
liffe derivatives 
market – histori Cal 
annual & monthly data
‘05
2955
‘04
3030
‘06
2864
‘07
3722
tHE FOLLOWING GRAPH 
INDICAt ES t HE CONt INUED 
GROWt H AND Ex PANDING 
BUSINESS DEVELOPMENt WIt HIN 
t HE DERIVAt IVES INDUSt Ry Patsystems    |    Annual Report 2007
Chief Executive’s Report
r isk systems
Revenue from our risk systems business grew by 100% 
to £1.4 million from £0.7 million in 2006. There has been 
continued success for our post trade risk margining product 
Risk Informer during the year with MF Global implementing 
the product in their London operation across all asset classes 
as the initial phase of a global roll out. In addition, Calyon 
Financial, now Newedge after their merger with Fimat, are 
completing a project to extend Risk Informer to risk margin 
spot and forward Fx and F x options trading.
As anticipated, there has been a significant level of 
interest in the product from investment banks and brokers 
of all sizes and the volatility in the markets during the 
summer highlighted the relevance of effective real time 
risk management.
We remain confident in the opportunities for Risk Informer 
and anticipate further customer wins in 2008.
As we announced in our interim results in the summer we 
launched the beta version of our pre-trade risk product, 
Risk Monitor. Risk Monitor is a low latency tool designed to 
monitor proposed trades across a range of markets ahead of 
the exchange and, if necessary, prevent, restrict or provide 
alerts in respect of individual electronic trades.
With the increasing volumes of trades being executed either 
by black box trading systems or by systems that are trading 
directly into an exchange without an intervening broker, 
the need for real time, but very high performance, risk 
management is expected to grow.
ex Change systems
On 4 January 2008, t okyo Grain Exchange successfully 
launched three futures products, Arabica and Robusta 
bean coffee contracts and raw sugar, on the new continuous 
exchange system provided by Patsystems.
The tokyo Grain Exchange continues to offer markets in a 
broad range of contracts on their existing session-based 
trading system that is also provided by Patsystems but further 
contracts are anticipated to be launched or migrated to the 
new platform during 2008.
During the year, National Commodity Exchange Limited in 
Pakistan successfully commenced electronic trading with the 
launch of their gold futures contract.
We believe that our ability to provide a straight through 
processing solution from the trader through to matching and 
clearing the transaction at an exchange, with dynamic real 
time risk management throughout, is a differentiated offering 
in the market place. 
We continue to identify potential opportunities in Asia, 
particularly in China, where we have Chinese character set 
versions of our trading screens, but these opportunities arise 
infrequently and the decision processes can be very lengthy 
with significant political hurdles.
brand and marketing
One of our non-financial objectives in 2007 was to establish the 
Patsystems FlexAbility brand within our target market place of 
the investment banks, brokers and futures clearing merchants.
Independent commissioned research has confirmed that 
our objective for Patsystems to be acknowledged as a key 
technology supplier to our customers and prospects, rather 
than just a vendor of trading screens, has been achieved.
As well as reinforcing our key brand message, we have also 
changed the strap line beneath our logo so that it reflects 
exactly what we deliver as a business.
“powers trades. builds exchanges. manages risk. ”
strategy and Produ Ct develo Pment
The first sale of Global t rading to a new customer, the 
success of Risk Informer sales and the development of Risk 
Monitor are all successful steps in fulfilling our strategy to be 
the preferred supplier of technology solutions to our target 
market place.
During 2007, we have demonstrated our ability to sell hosted 
technology solutions to major customers with the signing 
of a contract to provide Global t rading to Macquarie. The 
launch of our Application Service Provider (ASP) solution has 
ensured that we can provide new customers with a full choice 
of means of technology deployment, depending on their 
business requirements.
In addition to continued investment in developing the Risk 
Monitor and Risk Informer products, along with supporting 
the roll out of the Global t rading solution, there are a 
number of key product investments planned for 2008.
10
continued Patsystems    |    Annual Report 2007
These include the delivery of further capability within our algorithmic server, 
a new higher performance version of our trading API that allows third parties 
to use the Patsystems order processing engine and market connectivity, and 
extended charting and best execution capability for the trading screens.
Our strategy of developing all new product components in accordance with 
the Financial Information exchange (FI x ) Protocol, a messaging standard 
developed specifically for the real-time electronic exchange of securities 
transactions, will ensure that those organisations that have adopted a best 
of breed approach to technology are able to purchase just those system 
components they require from Patsystems.
We continue to view the support of asset classes outside of exchange 
traded derivatives as important to our business evolution and with 
J-t rader’s extension to support trading of currency pairs we have made 
some progress towards this objective.
We will continue to explore in 2008, either by partnership or acquisition, the 
solution to further extend the support by our trading systems of multiple 
product classes.
exe Cutive management Committee
Kieron O’t oole joined Patsystems at the start of 2007 as Client Services 
Director with responsibility for software support, software releases and trading 
and risk system installations.
With Kieron’s appointment Andy Edwards, product and Development Director, 
took responsibility for product strategy in addition to his existing responsibility 
for product development. Andy has been key in defining the product road 
map for 2007 and 2008 and will be instrumental in identifying technology 
acquisitions that the business may require to fulfil our strategy.
Patrick Kenny has continued his leadership of our North American operations 
with additional marketing, sales and support resources added during the year 
as detailed below.
Graeme Neilly, as Director of European sales and global accounts, has grown 
his department and continues to work closely with Jon Regan, Head of new 
business sales Europe.
I am delighted to announce that Lorna Blane, who joined Patsystems in April 
2007 as Global Head of Human Resources, joined the Executive Management 
Committee in the summer.
11
All major product lines up over 20% 
annually for two constructive years
Cagr 27% – from 2001 to 2006
adv up 65% – Jan 2008 vs. Jan 2007
Contracts in millions
2007
Interest Rates +23%
Equities +47%
Fx +26%
Comm./Alt. Investments +20%
CME Products
CBOT Products
Annual Growth Rates
tHE FOLLOWING GRAPH 
INDICAt ES t HE CONt INUED 
GROWt H AND Ex PANDING 
BUSINESS DEVELOPMENt WIt HIN 
t HE DERIVAt IVES INDUSt Ry
6.8
8.6
‘06 ‘05
11.0
‘07
14.3
‘08
ytD
25% 28%
15
10
5
0
Consistent a nnual volume g rowth  
(Cme group adv by year) Patsystems    |    Annual Report 2007
In May 2007 Barry White replaced Kazuaki t akabatake as 
Head of Asia. Barry joined Patsystems in 2006 as Managing 
Director of Australia and brings 17 years of exchange and 
exchange-traded derivatives experience to the business.
t o take full advantage of the opportunities for growth within 
the Asia region, and to be better placed to take advantage 
of nascent opportunities in China, Barry has relocated to 
Singapore and made the Singapore office of Patsystems the 
regional headquarters. Barry has also opened an office in Hong 
Kong and instigated representation on the ground in Shanghai. 
business evolution and staff
As I announced at the start of the year we have, during 2007, 
extended our capability in every region that we operate 
so that Patsystems staff are available to provide support to 
customers, wherever in the world they are trading.
We have also invested in additional resources in North 
America and Asia to support the sale and promotion of our 
extended product set. These investments have meant that our 
overall headcount at the start of 2008 is 150 compared to 
132 at the start of 2007.
We are comfortable that these increases in headcount are 
necessary to both support our planned sales effort and also 
to improve customer service delivery to both our current and 
future customers.
I would like to take the opportunity to thank all of our staff 
for their efforts in 2007. They have built a business with a 
track record for delivery of complex technology solutions and 
have been credited in the third party research we undertook 
with our customers this year as “going the extra mile” when 
compared to our peers.
business obje Ctives and outlook
Our key objectives for 2008 are as follows:
Grow the Pro-Mark installed base and encourage  
investment bank customers to convert their J-t rader 
professional user base to Pro-Mark.
Build on the success of Risk Informer being selected and  
rolled out by MF Global by identifying opportunities 
within the investment banks and other major Future 
Clearing Merchants, as well as selling a “productised” 
version of the offering to smaller organisations.
Leverage the success of the first sale of Global t rading  
to Macquarie by converting the opportunities within the 
current customer base.
Initiate the all important breakthrough in sales for Risk  
Monitor, our pre-trade risk product.
t o extend the capability of J-t rader to support  
additional assets classes so that our customers can extend 
their retail trading user base.
t rading subsequent to the year-end has progressed in line 
with our expectations and we are confident that our business 
is well positioned to take advantage of market conditions.
david w ebber 
CHIEF ExECU t IVE 
8 February 2008
12
Chief Executive’s Report
continued Case studies: Caboto Caboto is the securities arm of Banca Intesa, Italy’s second largest banking group. 
Since 2000, Caboto’s London office has been home to the group’s consolidated listed 
derivatives business. Its clients include European Banks, Financial Institutions and 
Online Brokers.
Using Patsystems J-t rader and x Link products, Caboto has been able to expand 
the customer base of its futures and options operation by offering easy, low cost 
access to a broad range of exchanges. t hanks to the scalability of the technology, 
Caboto has leveraged its local expertise to become the dominant Italian broker in 
the futures market.
Partnershi Ps for mutual growth
Caboto has been faced with customers requesting access to a growing list of 
exchanges around the world. While providing an expanded service is crucial to 
retaining these customers, purchasing new exchange memberships is not always 
an economical way to keep pace with demand. The solution is x Link, a powerful 
software tool that enables multiple Patsystems users to interconnect and utilise each 
other’s exchange memberships.
Caboto has memberships to six futures exchanges, and by using x Link to establish 
partnerships with other banks around the world, it is able to offer access to a further 
five exchanges, with another three in the pipeline. In return, Caboto’s partner banks are 
able to provide their customers with access to Borsa Italiana’s IDEM market. All without 
any additional strain on the end users, who simply see the additional markets on their 
familiar trading screens.
“Using x Link we see benefits in two directions, ” Caboto says. “We provide our 
customers with a single access point to the expanding range of markets they want to 
trade without the need for additional memberships. At the same time, we leverage the 
memberships we do have to attract flow from around the world. ”
s ystem of Choi Ce
The vast majority of Caboto’s futures business is routed via the Patsystems J- t rader. 
Caboto conducts regular reviews of its vendor relationships and J-t rader has 
consistently come out on top when compared to the other futures trading systems on 
the market. 
“The critical factors for our customers are ease of use and ease of installation, and 
on these criteria Patsystems wins hands down, ” Caboto states. “We can have J-t rader 
installed via the internet a matter of hours after signing a new customer, and the 
interface is so simple to use we can offer them training over the telephone. ”
business benefits
Through its xLink connection to other members of the Patsystems user community, 
Caboto has developed a cost effective way to broaden their service offering. It is thus 
able to combine global exchange access with local expertise and relationships – a 
compelling proposition that enables Caboto to compete with much larger institutions 
and even outperform them in its home market.
“J-t rader and x Link have enabled us to build out our remote connectivity while 
keeping the organisation lean” Caboto reports. “In a climate of narrowing margins and 
increasing competition, we have not only held our own against the larger players but 
aggressively grown our business. The scalability, capabilities and ease of deployment of 
Patsystems technology have been integral to that growth. ”
t RadiN g solutioN s t rader’s tools and front-ends
Pro-Mark
J-t rader
IQ-t rader
t rading a Pi
Patsystems API
FIx t rading Gateway
Risk solutio Ns Risk Informer
Risk Monitor
e x ChaN ge solutio Ns Exchange Solutions
Patsystems Matching Engine
Clearing System minibh eu feugiat aliquisi 
eliscid uissecte dolorerilit 
la commodo lortincidunt 
ut am adipis doluptat alis 
ad ea faccumsan enim 
etum in eniatet ut nonullan 
ulputetue delenis at, volesto 
core euguer sed sed sed 
dolorperit dolorper in hent ni
f eugiat aliquisi eliscid 
uissecte dolorerilit la 
commodo lortincidunt ut 
am adipis doluptat alis ad ea 
faccumsan
Patsystems    |    Annual Report 2007
Finance Director’s Review
04
i am delighted to report significant improvements across most of 
our financial key performance indicators:
Revenue up 11% to £17 million 
Operating profit as a percentage of sales up to 12.3% (2006 – 10.3%) 
Profit Before t axation (PBt ) up 35% to £2.2 million 
Fully diluted EPS 1.0p (2006 – 4.1p) 
Fully diluted EPS adjusted for deferred tax 1.2p (2006 – 0.8p) 
Net cash flow from Operating Activities £2.65 million   
(2006 – £2.69 million)
375 Pro-Mark screens deployed (2006 – 129) 
1,360 Professional J-t rader screens deployed on average during 2007  
(2006 – 1,462)
r evenue
t otal Group revenue grew by £1.7 million (11%) to £16.96 million from 
£15.26 million last year. The underlying performance of the business was even 
more impressive after taking into account the impact of the strength of sterling 
against the US dollar and the Japanese yen. If the 2006 average exchange rate 
for both the US dollar and the Japanese yen had been used to translate the 
2007 revenues then they would have been £0.70 million higher.
trading s ystems
t rading systems revenue grew from £13.3 million in 2006 to £14.3 million in 
2007 – an increase of 7.5 %.
ex Change s ystems
Exchange systems revenue was unchanged at £1.3 million.
r isk s ystems
Revenues from our Risk Systems business grew by 100% to £1.4 million from 
£0.7 million last year.
martin thorney Croft 
FINANCE DIRECt OR  Patsystems    |    Annual Report 2007
oP erating ex Penses
Operating expenses increased by £1.2 million to £14.5 million from £13.3 million 
in 2006. The majority of this increase is attributable to staff costs which increased 
by £0.8 million as a result of salary increases, new recruits and less time being 
capitalised into development projects.
We ended the year with150 permanent staff (2006 – 132) and 12 contractors 
(2006 – 12).
All other cost categories were broadly consistent with the previous year.
The strength of sterling against the dollar and the yen has reduced our reported costs 
in these regions. If these costs had been translated at last years average rate then costs 
would have been £0.31 million higher in 2007.
Profit on ordinary a Ctivities before taxation
The profit on ordinary activities before taxation increased to £2.2 million from 
£1.6 million in 2006.
t axation
The Group has tax losses carried forward of £24.4 million and will not be in 
a corporation tax paying position for a number of years. Small amounts of 
withholding tax may or may not arise from time to time depending on the 
geographical locations of customers with whom the Group does business. 
The tax charge shown on the face of the income statement of £0.3 million 
comprises of a deferred tax charge of £0.3 million mainly in respect of the usage of 
trading losses in the year, withholding tax of £76,000 and a foreign corporation tax 
credit of £40,000. Last year’s large deferred tax credit was the result of the Group 
being able to recognise deferred tax assets in respect of accumulated unrelieved 
losses for the first time as subsidiary companies achieved profitability.
Profit for the year
Profit for the year fell to £1.8 million (2006 – £7.9 million). After adjusting for the 
current year’s deferred tax charge and the prior year’s deferred tax credit, profit for 
the year increased to £2.2 million from £1.5 million in 2006.
earnings P er share
As a result of the large deferred tax credit last year and the likelihood of other 
smaller deferred tax assets being recognised over the next few years (as loss making 
subsidiaries become profitable) combined with a deferred tax charge as prior year 
losses are utilised (in profitable subsidiaries) the standard basic and fully diluted 
EPS calculations will show a high level of volatility. 
Excluding deferred tax, basic EPS has grown by 44% to 1.3p from 0.9p and fully 
diluted EPS has grown 50% to 1.2p from 0.8p last year.
Including deferred tax, basic EPS is 1.1p (2006 – 4.9p) and fully diluted EPS is 1.0p 
(2006 – 4.1p). 
The Board also monitors the Company’s performance by reference to pre-tax profit 
adjusted for share option costs, marking to market of derivatives used to hedge cash 
flows and amortisation of intangibles other than internally developed software. 
15
t rading systems revenue 
grew from £13.3 million in 
2006 to  £14.3 million in 
2007. r evenues from our 
risk s ystems business grew 
by 100% to £1.4 million. Patsystems    |    Annual Report 2007
Finance Director’s Review
Adjusted pre-tax profit and EPS on this basis were as follows: 
2007 2006
Profit for the year attributable to equity holders of the company £1,844,000 £7,906,000
t axation £344,000 £(6,280,000)
Profit on ordinary activities before taxation £2,188,000 £1,626,000
Share option costs £210,000 £230,000
Movement in fair value of hedging instruments £97,000 £(170,000)
Amortisation of intangibles £483,000 £449,000
Adjusted profit on ordinary activities £2,978,000 £2,135,000
Weighted average number of shares 168,090,000 162,794,000
Effect of dilutive share options 16,062,000 15,020,000
Effect of contingent share consideration 1,092,000 14,267,000
185,244,000 192,081,000
Adjusted EPS 1.8p 1.3p
Adjusted diluted EPS 1.6p 1.1p
intangible and tangible fixed assets
goodwill
Goodwill has increased by £1.49 million. This increase relates 
solely to goodwill generated on the t amesis acquisition. The 
earnout period has now finished and the final number of 
shares to be issued as consideration for the acquisition has 
been calculated and agreed. In 2006 we anticipated that 
14,267,000 Patsystems plc shares would be issued at a market 
price of 15p each. The final earnout consisted of 12,159,000 
shares at a market price of 27.5p (these shares having been 
issued) and a final deferred payment of 1,092,240 shares at 
an estimated market price of 26.5p. 
The final value of the tamesis consideration has been estimated 
but is dependent on the Company’s share price at the time of 
issue of the consideration shares. The increase in goodwill is the 
difference between the anticipated value of final consideration 
provided for in the 2006 accounts and the revised estimate 
based on the actual number of shares to be issued.
intangible assets
During the year the Group spent £1.8 million on intangible 
assets. This total includes £1.4 million of capitalised 
development costs in respect of new products that 
will generate revenues in future years. These costs will 
be amortised over three to five years from the date of 
completion reflecting the expected lives of the assets.
t angible assets
During the year the Group purchased fixed assets totalling 
£0.4 million. The majority of this consisted of computer hardware.
Current assets
t rade debtors
t rade debtors have increased slightly to £2.7 million from 
£2.6 million in 2006. The average number of days sales 
outstanding in debtors throughout the year was 43 (2006 – 38).
f inancial assets – derivative financial instruments
Financial assets represent the “marked to market“ value of 
derivatives used to hedge our currency exposures. The 
derivatives used are forward contracts and currency options. 
These derivatives are marked to market monthly and the 
resulting “profit or loss” is taken to the income statement.
Current liabilities
The only significant movement between the years is in 
contingent consideration which has fallen from £2.1 million 
in 2006 to £0.3 million in 2007. This is as a result of the final 
determination of the number of shares to be issued in respect 
of the t amesis earnout. 
business risks
The principal business risks remain the same as in previous years:
Competition
The Group operates in a growing but competitive market. 
There are three major software suppliers in the global 
electronic trading systems market for futures and options, of 
which Patsystems is one. There are many smaller companies 
who supply screens, but not market connectivity. In such a 
market there is always a risk that customers could move to 
16
continued Patsystems    |    Annual Report 2007
other competitors and there is always downwards pressure on margins. Patsystems 
mitigates this risk by supporting its brands with appropriate marketing activity and 
by consistently extending its market connectivity as well as improving its software, 
customer support and customer care.
Customer consolidation
Consolidation within the financial services industry has occurred over the past few 
years and further consolidation remains a risk. Where consolidation takes place the 
risk to our business is typically to the revenues associated with market connectivity 
and support and maintenance. Patsystems mitigates this risk by actively adding new 
customers, products and asset categories to our portfolio. 
As a case in point in August 2007, Calyon and Fimat announced the merger of 
their brokerage businesses globally to form a new business called Newedge. The 
combination of their business activities concluded formally on 2 January 2008 
and their operational functions are expected to be rationalised during 2008. The 
combination of these two existing customers will have an impact on our anticipated 
revenues in 2008 but this has been factored into our business plans for the year.
r evenue profile
83% of Patsystems revenue is recurring in nature and, in stark contrast to many 
technology companies, this gives a level of guarantee for a minimum level of 
operating profit for the business on an annual basis.
However, with products such as Risk Informer key to our future growth expectations, 
and the significant revenues from these opportunities being non-recurring in nature, 
the propensity for organisations such as the investment banks to defer technology 
investments during tougher economic climates is a risk to our business. It remains 
too early for us to assess what impact the sub prime credit crisis will have on 2008 
purchasing decisions. 
Cash and treasury 
The Group generated net cash inflows from operating activities of £2.65 million 
(2006 – £2.69 million) and £2.2 million was invested in intangible and tangible 
assets. Dividends of £0.7 million were paid during the year. Cash and cash 
equivalents remained at £3.2 million.
The Group is exposed to 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. That level 
of cover is in place and is comprised of a mixture of forward contracts and options. 
The average US$/£ exchange rate used in the 2007 income statement was 2.01. The 
average rate of the hedges in place for 2008 is 1.99.
martin thorney Croft 
FINANCE DIRECt OR 
8 February 2008
17
t otal group revenue grew 
by £1.7 million (11%) 
to £16.96 million from 
£15.26 million last year.
83% of Patsystems revenue is 
recurring in nature and this 
gives a level of guarantee 
for a minimum level of 
operating profit for the 
business on an annual basis. 18
1.
3.
5.
2.
4.
6.
Our Board
Patsystems    |    Annual Report 2007 1.  stewart millman
Chairman, non-executive d irector, a ge 59
Stewart has over 30 years’ experience in investment 
management and corporate finance. He was part of the 
senior management of BZW, NatWest Markets and HSBC 
Investment Bank. In 2002, he became self-employed and 
since then he has acted as a consultant to various companies 
in the UK and abroad. Stewart is also Non-executive 
Chairman of a publicly traded company providing network 
related services to the global telecommunications industry 
and a Non-executive Director of other companies. He 
has broad experience with technology and financial 
sector companies. Stewart, a Fellow of the Securities and 
Investment Institute, holds a M.A. (Oxon).
3.  martin thorney Croft
f inance director, a ge 46
Martin joined Patsystems as Finance Director in July 2004. 
He was previously Finance Director of Profile Media 
Group plc. Martin, a member of the Institute of Chartered 
Accountants having qualified with Ernst and young in 1986, 
holds a B. Com. from Birmingham University.
5.  steve sParke
non-executive d irector, a ge 49
Steve has had a 28 year career in the City spanning interest 
rate trading and futures and options broking and is 
currently chairman of the Futures 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 Director of Euronext.Liffe and chaired 
the Exchange’s Audit and Risk Committee until November 
2007. Steve graduated with a law degree from Nottingham 
University in 1979.
2.  david w ebber
Chief executive, a ge 42
David was appointed Chief Executive of Patsystems in 
January 2006. He was formerly Chief Executive of AttentiV 
Systems Group, where his business leadership saw the 
company through significant expansion by both organic 
growth and acquisition. He led the management buyout, 
subsequent AIM flotation of the business and was retained 
as Chief Executive when AttentiV Systems Group plc was 
acquired by t ietoEnator in May 2005. David, a member of 
the Institute of Chartered Accountants since 1989, holds a 
BSc (Economics) from the London School of Economics.
4.  r iChard l ast
non-executive d irector, Chairman of the audit 
Committee, a ge 50
Richard is Chairman and Non-executive Director of x pertise 
Group plc, an It training company, and Knowledge 
t echnology Solutions plc, a financial software business, 
both listed on AIM and Chairman and Non-executive 
Director of The British Smaller technology Companies VCt 
2 plc, which is listed on the London Stock Exchange. He 
is also a Non-executive Director of AIM listed companies 
Financial Payments Systems Limited and Lighthouse 
Group plc and Director of a number of private companies 
including Sphinx CSt Limited and APD Communications 
Limited, both It companies. Richard, a Fellow of the 
Institute of Chartered Accountants, holds a BA (Hons) from 
Sheffield University.
6.  john Priestley
non-executive d irector, Chairman of the r emuneration 
and nomination Committee, a ge 58
John has over 30 years experience in the software and 
services sector and in 2003 concluded a 13 year career 
with British t elecommunications as Director of Business 
Development for Syntegra. Previously, he was a Director 
of Kapiti and a Divisional Director with Hoskyns. He is 
currently Managing Director of Fitzmaine Limited.
19 Patsystems    |    Annual Report 2007 20 Patsystems    |    Annual Report 2007
Directors’ Report
The Directors present their report for Patsystems plc and the audited financial statements for the year ended 31 December 2007.
Princi Pal 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. 
r esults and dividends
The profit on ordinary activities attributable to shareholders after taxation amounted to £1,844,000 (2006: £7,906,000). 
The proposed dividend for the year is detailed in the Chairman’s Statement on page 4.
r eview of business and future develo Pments
The Directors are pleased with the Group’s performance during the year and its position at 31 December 2007. The Directors are 
confident that performance will continue to improve in 2008 and beyond. 
The review section of this report contains a detailed assessment of the business and future projects. 
Detailed 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 shares issues during the year
£112,000 was received in proceeds from the exercise of share options during the year ended 31 December 2007.
In addition, shares with a market value of £3,345,000 were issued during the year in part settlement of the deferred consideration 
for the 2005 acquisition of T amesis Limited.
substantial shareholdings
On 5 February 2008, 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 c ompany Number of shares %
ION Trading UK Limited 47,976,191 27.03
Brandes Investment Partners LP 13,687,500 7.71
Sedaf Holdings SA 10,389,600 5.85
Brewin Dolphin Securities Limited 10,230,334 5.76
Resolution Asset Management 7,455,200 4.20
Herald Investment Management Limited 6,400,000 3.61
Credit Agricole Indosuez (Suisse) SA 6,321,922 3.56
Rathbone Investment Management Limited 6,000,000 3.38
directors
The Directors of the Company, together with those who served during the year, are as follows:
executive directors Non-executive Directors 
D Webber S Millman
M Thorneycroft R Last 
S Sparke
J Priestley (appointed 1 January 2007)
S Douglas-Mann (resigned 19 April 2007) continued
21 Patsystems    |    Annual Report 2007
Directors’ Report
d irectors and their interests
o rdinary shares of 1p each in Patsystems plc 5 February 2008 31 December 2007 31 December 2006*
D Webber 600,000 600,000 420,000
M Thorneycroft 40,000 40,000 40,000
S Millman 1,192,282 1,192,282 1,192,282
R Last 786,886 786,886 786,886
S Sparke 250,000 250,000 150,000
J Priestley 91,017 91,017 91,017
S Douglas-Mann (resigned 19 April 2007) 829,597 829,597 863,097
* or at date of appointment
Save as disclosed in this report and note 29, 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 P olicies
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.
f inancial 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.
r esearch and develo Pment
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. continued
22 Patsystems    |    Annual Report 2007
Directors’ Report
c reditor P ayment P olicy
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.
c haritable and Political donations
The Group made charitable contributions of £500 during the year (2006: £550). The donations were made to Children of St. Mary’s 
Intensive Care. No political donations were made in 2007 or 2006.
d isclosure 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.
d isclosure and trans Parency rules ( dtr )
The Company has complied with the DTR so far as they are applicable to AIM listed companies.
a nnual g eneral 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 17 April 2008.
statement of d irectors’ res Ponsibilities
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: 
Select suitable accounting policies and then apply them consistently; 1. 
Make judgements and estimates that are reasonable and prudent; 2. 
State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained 3. 
in the financial statements;
Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will 4. 
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 1985 (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
daljit k aur-k hela 
COMPANY SECRETARY 
8 February 2008
r egistered office: 
Cottons Centre,  
Hays Lane,  
London SE1 2QP 23 Patsystems    |    Annual Report 2007
Statement of Corporate Governance
The following statement of corporate governance reflects the position of the Company as at 31 December 2007.
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.
c ommittees
The Audit Committee and the combined Remuneration and Nominations Committee meet at least twice a year.
audit committee
The Audit Committee is chaired by Richard Last 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.
r emuneration and nominations committee
The Remuneration and Nominations Committee comprises all the Non-executive Directors and is chaired by John Priestley. Prior to  
19 April 2007 the Committee was chaired by Stewart Douglas-Mann.
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 25 to 28. 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 27 of these accounts. continued
24 Patsystems    |    Annual Report 2007
Statement of Corporate Governance
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 seven key business heads who are not Directors.
r elations with shareholders
The Board welcomes the views of shareholders.
The Annual General Meeting (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 quarterly trading updates, 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.
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.
g oing 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.
c om Pliance statement
Corporate Governance procedures are subject to regular review by the Board. Throughout the year 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
daljit k aur-k hela
COMPANY SECRETARY
8 February 2008 25 Patsystems    |    Annual Report 2007
Report of the Board on Directors’ Remuneration  
and on Group Remuneration Policy
r emuneration 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 g rou P r emuneration
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. In this respect I would like to congratulate 
the management team on the introduction of a flexible benefits scheme that allows employees to chose from a range of benefits to 
suit their circumstances. 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.
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.
a nnual bonuses
Bonus scheme arrangements are in place for all members of staff, including the Executive Directors. Bonuses are linked to the financial 
performance of the Group. Bonuses are calculated based on individual and Group performance targets which are set at the start of 
the financial year.
l ong-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. An aggregate total of 20% of the options awarded 
under the second and third grants of both schemes vested on 14 February 2007 and a further 16% of these awards will vest on 
11 February 2008. The remaining 64% of the options will be carried forward into future years and the Remuneration Committee will 
determine what performance conditions to attach to them in 2008.
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. 
The Board is currently reviewing the ongoing effectiveness of its incentive schemes and is considering the introduction of a Restricted 
Stock Unit Scheme. continued
26 Patsystems    |    Annual Report 2007
Report of the Board on Directors’ Remuneration  
and on Group Remuneration Policy
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 in purchasing 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 take-over) 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 take-over 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. 
d irectors’ emoluments
salary/fees 
£
bonus
£
benefits in kind
£
t otal 
2007
£
Total
 2006
£
Executive Directors
D Webber 230,000 60,000 2,072 292,072 291,889
M Thorneycroft 145,000 40,000 480 185,480 180,168
Non-executive Directors
S Millman 45,000 – – 45,000 45,000
R Last 30,000 – – 30,000 27,500
S Sparke* 30,000 – – 30,000 6,346
J Priestley* 29,167 – – 29,167 –
S Douglas Mann** 14,167 – – 14,167 27,500
A Aggarwal** – – – – 25,000
523,334 100,000 2,552 625,886 603,403
* S Sparke was appointed on 29 September 2006. J Priestley was appointed on 1 January 2007.
** S Douglas Mann resigned on 19 April 2007. A Aggarwal resigned on 31 December 2006.
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:
2007
£
2006
£
D Webber 23,000 21,000
M Thorneycroft 14,500 13,000
37,500 34,000 continued
27 Patsystems    |    Annual Report 2007
Report of the Board on Directors’ Remuneration  
and on Group Remuneration Policy
d irectors’ contractual terms
d w ebber m Thorneycroft s m illman r l ast s s parke j Priestley
Date appointed 03-Jan-06 05-Jul-04 17-Feb-03 17-Feb-03 29-Sep-06 01-Jan-07
Service Contract * Yes Yes No No No No
Notice period
– by company 12 months 6 months 3 months 3 months 3 months 3 months
– by director 12 months 6 months 3 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.
d irectors’ share o Ptions
scheme type exercise price o utstanding 
options at 
31 december 2007
exercise date expiry date
D Webber EMI 13.75p 727,272 Note 1 14.02.16
Unapproved 13.75p 3,272,728 Note 2 14.02.16
Unapproved 29.00p 1,000,000 Note 2 19.04.17
5,000,000
M Thorneycroft EMI 15.25p 655,737 Note 3 30.07.14
Unapproved 15.25p 344,263 Note 4 30.07.14
Unapproved 18.00p 500,000 Note 4 17.03.15
1,500,000
D Webber’s options include 1,000,000 that were granted during the year. All other directors’ share options were outstanding at 
31 December 2006.
The IFRS 2 charge to the income statement in relation to these options was £127,000. continued
28 Patsystems    |    Annual Report 2007
Report of the Board on Directors’ Remuneration  
and on Group Remuneration Policy
Note 1: These options were granted under a special award of the Enterprise Management Incentive (EMI) Scheme. One third of 
these options can be exercised after a period of three years after the date of the grant. Two thirds of these options can be 
exercised after a period of three years after the date of the grant but subject to the Group achieving growth in adjusted fully 
diluted pre-deferred tax EPS from the 2005 financial year to the 2008 financial year of 10% compound per annum.
Note 2: These options were granted under special awards of Part B (Inland Revenue Unapproved) of the Patsystems plc 2003 Share 
Option Scheme, exercise conditions are as per note 1.
Note 3: Options were granted under the second and third awards of the Enterprise Management Incentive (EMI) Scheme. 20% of 
these options vested on 14 February 2007 and 16% will vest on 11 February 2008.
Note 4: 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 3.
The mid-market price of the Company’s shares at the end of the financial year was 26.5p, and the range of market prices during the 
year was 17p to 32.75p.
d irectors’ awards under the cash-based long-term incentive scheme
date of award maximum amount 
of a ward
£
vesting date
D Webber 19.04.07 130,000 19.04.10
M Thorneycroft 19.04.07 85,000 19.04.10
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. 
When the Awards to the Directors vest, they will be expected, to use 50% of the net of tax amount in purchasing 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 take-over) 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 take-over implicitly reflect prospective performance on a scale 
that would have resulted in full vesting).
The charge to the income statement for the year ended 31 December 2007 in relation to these Awards was £25,000.
john Priestley
CHAIRMAN, REMUNERA TION COMMITTEE
8 February 2008 29 Patsystems    |    Annual Report 2007
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 2007 which comprise the 
Consolidated Income Statement, the Consolidated Balance Sheet, the Consolidated Cash Flow Statement, the Consolidated 
Statement of Recognised Income and Expense and the related notes. These group financial statements have been prepared 
under the accounting policies set out therein.
We have reported separately on the Parent Company financial statements of Patsystems plc for the year ended 31 December 2007.
r esPective res Ponsibilities of directors and auditors
The directors’ responsibilities for preparing the Annual Report and the Group financial statements in accordance with applicable 
law and International Financial Reporting Standards (IFRSs) as adopted by the European Union are set out in the Statement of 
Directors’ Responsibilities.
Our responsibility is to audit the Group financial statements in accordance with relevant legal and regulatory requirements and 
International Standards on Auditing (UK and Ireland). This report, including the opinion, has been prepared for and only for the 
company’s members as a body in accordance with Section 235 of the Companies Act 1985 and for no other purpose. We do not,  
in giving this opinion, 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.
We report to you our opinion as to whether the Group financial statements give a true and fair view and whether the Group financial 
statements have been properly prepared in accordance with the Companies Act 1985. We also report to you whether in our 
opinion the information given in the Directors’ Report is consistent with the Group financial statements. 
In addition we report to you if, in our opinion, we have not received all the information and explanations we require for our audit,  
or if information specified by law regarding directors’ remuneration and other transactions is not disclosed.
We read other information contained in the Annual Report and consider whether it is consistent with the audited group financial 
statements. The other information comprises only the Directors’ Report, the Chairman’s Statement, the Chief Executive’s Report, the 
Finance Director’s Review, the Statement of Corporate Governance and the Report of the Board on Directors’ Remuneration and  
on Group Remuneration Policy. We consider the implications for our report if we become aware of any apparent misstatements  
or material inconsistencies with the Group financial statements. Our responsibilities do not extend to any other information.
basis of audit o Pinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices 
Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the Group financial 
statements. It also includes an assessment of the significant estimates and judgments made by the directors in the preparation of 
the Group financial statements, and of whether the accounting policies are appropriate to the Group’s circumstances, consistently 
applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order 
to provide us with sufficient evidence to give reasonable assurance that the Group financial statements are free from material 
misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy 
of the presentation of information in the Group financial statements.
oP inion
In our opinion:
the Group financial statements give a true and fair view, in accordance with IFRSs as adopted by the European Union, of the state  
of the Group’s affairs as at 31 December 2007 and of its profit and cash flows for the year then ended;
the Group financial statements have been properly prepared in accordance with the Companies Act 1985; and  
the information given in the Directors’ Report is consistent with the Group financial statements. 
Pricewaterhouse c oo Pers ll P
CHARTERED ACCOUNTANTS AND REGISTERED AUDITORS
London
8 February 2008 30 Patsystems    |    Annual Report 2007
Consolidated Income Statement
for the year ended 31 December 2007
Notes
2007
£’000
2006
£’000
Revenue 4 16,962 15,255
Cost of sales (336) (387)
Gross profit 16,626 14,868
Operating expenses (14,539) (13,292)
Operating profit 5 2,087 1,576
Finance income 101 54
Finance costs – (4)
Finance income – net 7 101 50
Profit on ordinary activities before taxation 2,188 1,626
T axation 8 (344) 6,280
Profit for the year attributable to equity holders of the Company 1,844 7,906
Earnings per ordinary share 10
 – basic 1.1p 4.9p
 – diluted 1.0p 4.1p
Adjusted earnings per ordinary share* 10
 – basic 1.3p 0.9p
 – diluted 1.2p 0.8p
* EPS has been adjusted for deferred tax – see note 10 for a detailed explanation.
The income statement has been prepared on the basis that all operations are continuing operations.
2007 
£’000
2006 
£’000
Profit for the year 1,844 7,906
Foreign exchange adjustment on foreign currency net investments 144 (144)
T otal recognised income for the year 1,988 7,762
Consolidated Statement of Recognised Income and Expense
for the year ended 31 December 2007 31 Patsystems    |    Annual Report 2007
Consolidated Balance Sheet
at 31 December 2007
Notes
2007 
£’000
2006 
£’000
ASSETS
Non-current assets
Goodwill 12 3,237 1,745
Intangible assets 13 3,674 2,536
Property, plant and equipment 14 752 754
Deferred tax assets 15 6,673 6,979
Trade and other receivables 17 371 –
14,707 12,014
Current assets
Inventories 16 12 188
Trade and other receivables 17 4,366 4,021
Financial assets – derivative financial instruments 28 30 127
Income tax 40 –
Cash and cash equivalents 18 3,191 3,251
7,639 7,587
LIABILITIES
Current liabilities
Trade and other payables 19 (3,240) (3,594)
Current income tax liabilities (20) (101)
Contingent consideration 20 (290) (2,140)
(3,550) (5,835)
Net current assets 4,089 1,752
Non-current liabilities
Trade and other payables 19 (44) –
Provisions 21 (58) (34)
(102) (34)
Net assets 18,694 13,732
EQUITY
Capital and reserves attributable to equity holders of the Company
Share capital 23 1,775 1,641
Share premium account 25 7,014 3,691
Other reserves 25 17,348 17,348
Retained earnings 25 (7,443) (8,948)
T otal equity 26 18,694 13,732
The financial statements on pages 30 to 60 were approved by the Board of Directors on 8 February 2008.
david w ebber    martin thorneycroft
CHIEF EXECUTIVE OFFICER   FINANCE DIRECTOR 32 Patsystems    |    Annual Report 2007
Consolidated Cash Flow Statement
for the year ended 31 December 2007
2007
£’000
2006
£’000
Cash flows from operating activities
Cash flows from operations 2,647 2,694
 Interest received 101 54
 Interest paid – (4)
 T ax paid (157) (51)
Net cash flows from operating activities 2,591 2,693
Cash from investing activities
Purchase of intangible assets (1,792) (1,689)
Purchase of property, plant and equipment (423) (344)
Acquisition of subsidiaries (net of bank overdraft acquired) – (10)
Net cash flows used in investing activities (2,215) (2,043)
Cash flows from financing activities
Net proceeds from issue of ordinary share capital 112 164
Finance lease principal payments – (40)
Dividends paid to company’s shareholders (693) –
Net cash (used in)/from financing activities (581) 124
Net (decrease)/increase in cash and cash equivalents (205) 774
Cash and cash equivalents at beginning of the year 3,251 2,604
Effect of exchange rates 145 (127)
Cash and cash equivalents at end of the year 3,191 3,251 33 Patsystems    |    Annual Report 2007
Reconciliation of Net Profit to Net Cash Flows from Operating Activities
2007
£’000
2006
£’000
Net profit 1,844 7,906
Tax 344 (6,280)
Depreciation of property, plant and equipment 425 475
Amortisation of intangible assets 668 632
Share compensation expense 210 230
Shares issued in lieu of payment – 53
Interest income (101) (54)
Interest expense – 4
Decrease in inventories 176 106
Increase in trade and other receivables (716) (808)
Decrease/(increase) in financial assets and liabilities 97 (170)
(Decrease)/increase in trade and other payables (324) 836
Increase/(decrease) in provisions 24 (236)
Cash flows from operating activities 2,647 2,694
material non cash transactions
During the year the estimated contingent consideration for the acquisition of T amesis Limited increased to £3,633,000 
(2006: £2,140,000) and the Company issued 12,159,000 ordinary shares of 1p each in part settlement of this liability. These 
transactions do not have an effect on the cash flows of the Group. Please see note 20 for details. 34 Patsystems    |    Annual Report 2007
Notes to the Financial Statements
1. a ccounting Policies
A summary of the more important Group accounting policies is given 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 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.
standards, amendments and interpretations effective in 2007
IFRS 7, Financial Instruments: Disclosures, and the complementary amendment to IAS 1, Presentation of financial statements – 
capital disclosures, introduces new disclosures relating to financial instruments and does not have any impact on the 
classification and valuation of the Group’s financial instruments.
IFRIC 8 Scope of IFRS 2, requires consideration of transactions involving the issue of equity instruments, where the 
identifiable consideration received is less than the fair value of the equity instruments issued in order to determine whether 
or not they fall within the scope of IFRS 2. This interpretation does not have any impact on the Group’s financial statements.
IFRIC 10 Interim financial reporting and impairment, prohibits the reversal of impairment losses recognised in an interim 
period on goodwill and investments in equity instruments and in financial assets carried at cost at a subsequent balance 
sheet date. This interpretation does not have any impact on the Group’s financial statements.
standards, amendments and interpretations effective in 2007 but not relevant for the group’s operations
The following standards, amendments and interpretations to published standards are mandatory for accounting periods 
beginning on or after 1 January 2007 but they are not relevant to the Group’s operations:
IFRS 4, Insurance contracts
IFRIC 7, Applying the restatement approach under IAS 29, Financial reporting in hyper-inflationary economies, and
IFRIC 9, Re-assessment of embedded derivatives.  
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 2008 or later periods, but the Group has not early 
adopted them:
IFRS 8, ‘Operating Segments’ is effective for accounting periods commencing on or after 1 January 2009 and introduces 
new requirements for determining, quantifying and disclosing information relating to the business segments in which 
group companies operate. A segmental analysis of the Group’s operations is given in Note 4 to these financial statements in 
accordance with the requirements of IAS 14. IFRS 8 will replace IAS 14. The Group will apply IFRS 8 from 1 January 2009. 
The expected impact is still being assessed in detail by management, but it appears likely that the number of reportable 
segments, as well as the manner in which the segments are reported, will change to be consistent with the Group’s internal 
management reporting. 
IAS 23 (Amendment), Borrowing costs is effective from 1 January 2009. The amendment to the standard is still subject 
to endorsement by the European Union. It requires an entity to capitalise borrowing costs directly attributable to the 
acquisition, construction or production of a qualifying asset (one that takes a substantial period of time to get ready for use 
or sale) as part of the cost of that asset. The option of immediately expensing those borrowing costs will be removed. The 
Group currently has no directly attributable borrowings and it expected that IAS 23 (Amendment) will not apply. 
  35 Patsystems    |    Annual Report 2007
continued
Notes to the Financial Statements
1.1 ACCOUNTING CONVENTION AND BASIS OF PREPARATION (continued)
interpretations to existing standards that are not yet effective and not relevant for the group’s operations 
The following  interpretations to existing standards have been published that are mandatory for the Group’s accounting 
periods beginning on or after 1 January 2007 or later periods but are not relevant for the Group’s operations:
IFRIC 11, IFRS 2 Group and Treasury Share Transactions.
As none of the Group entities or their shareholders have entered into share based payment transactions that require the 
purchase of treasury shares, IFRIC 11 is not relevant to the Group’s operations.
IFRIC 12, Service Concession Arrangements. 
As none of the Group entities have entered into share public to private service concession arrangements, IFRIC 12 is not 
relevant to the Group’s operations.
IFRIC 13, Customer Loyalty Programmes.
The nature of the Group’s operations is such that it is not appropriate to include the grant of loyalty award credits within 
the terms of the contracts entered into by group entities with their customers. IFRIC 13 is therefore not relevant to the 
Group’s operations.
IFRIC 14, IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction. 
The Group’s employee benefits policies are disclosed in Note 1.20 and none of the Group entities operates a defined benefit 
post retirement or other long term incentive scheme. Accordingly, IFRIC 14 is not applicable to the Group’s operations.
1.2 FOREIGN CURRENCY TRANSLATION
f unctional 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 Company’s functional and presentation currency.
t ransactions 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 INVESTMENTS
Investments in subsidiaries are stated at cost less any provision for impairment.
1.4 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 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. Notes to the Financial Statements
continued
36 Patsystems    |    Annual Report 2007
1.5 INTANGIBLE ASSETS 
Acquired computer software licences and software acquired in the T amesis acquisition are capitalised on the basis of the 
costs incurred to acquire and bring to use the specific software. These costs are amortised over their estimated useful lives 
(three years). Costs associated with maintaining computer software programs are recognised as an expense as incurred.
1.6 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).
1.7 RESEARCH AND DEVELOPMENT
Research expenditure is recognised as an expense as incurred. Costs incurred on product 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 3 and 5 years.
1.8 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.
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
1.9 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.
1.10 INVENTORIES
Inventories are stated at the lower of cost and net realisable value.  Notes to the Financial Statements
continued
37 Patsystems    |    Annual Report 2007
1.11 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 1.13.
1.12 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.
The fair value of forward contracts is determined using forward exchange market rates at the balance sheet date.
1.13 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. 
1.14 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.
1.15 TRADE PAYABLES
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective 
interest method.
1.16 LEASES
Costs in respect of operating leases are charged to the income statement on a straight line basis over the lease term. 
Assets purchased under finance leases are recorded as tangible fixed assets in the Balance Sheet. The obligations to pay 
future capital instalments are shown in creditors and are analysed between amounts falling due within one year and amounts 
after more than one year. The asset value is calculated at the inception of the contract as the purchase price of the asset, and 
the finance charge is allocated to accounting periods on the sum of the digits basis. Notes to the Financial Statements
continued
38 Patsystems    |    Annual Report 2007
1.17  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. 
1.18 SEGMENT REPORTING
A business segment is a group of assets and operations engaged in providing products or services that are subject to risks 
and returns that are different from those of other business segments. A geographical segment is engaged in providing 
products or services within a particular economic environment that are subject to risks and returns that are different from 
those of other economic environments.
All direct costs of a segment are included in that segment’s result. 
1.19 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: this is invoiced in advance of installation work and 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 consultancy, software development projects and perpetual licences – this is recognised in the income  
statement when and to the extent that the Company obtains the right to consideration in exchange for its performance  
in accordance with the terms for acceptance set out in the customer contracts.
1.20 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.
t ermination 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 24. Notes to the Financial Statements
continued
39 Patsystems    |    Annual Report 2007
1.20 EMPLOYEE BENEFITS (continued)
c ash-based long-term incentive benefits
The Group has introduced a new cash-based long-term incentive scheme (“the Cash Scheme”) and on 19 April 2007 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 31 December 2009.
other benefits
UK employees are also entitled to private medical and death in service insurance and subsidised health club membership. 
The costs of providing these benefits are recognised as employee benefit expense as they fall due.
During the year the Company has carried out a review of UK employee benefits and in 2008 core benefits are being 
extended to include critical illness and long term sickness insurance. The Company is also introducing a flexible benefits 
scheme that enables employees to tailor their total remuneration packages to meet their own individual lifestyle and 
family requirements.
1.21 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. c ritical 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 regarding 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 the assumptions used in 
calculating the contingent consideration for the purchase of T amesis Limited detailed in note 20 and the assumptions used 
for recognising the deferred tax asset detailed in note 15.
3. f inancial 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.  Notes to the Financial Statements
continued
40 Patsystems    |    Annual Report 2007
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 2007 and 2006 although the level of cover and the exposure to risks on other foreign currencies are kept under 
regular review.
The average US$/UK£ exchange rate used in the 2007 income statement was 2.01 (2006: 1.85). The average rate of the 
hedges in place at 31 December 2007 for 2008 was 1.99 (2006 for 2007: 1.83). The fair value of these hedges is recognised 
as a financial asset of £30,000 (2006: £127,000) on the Group balance sheet at the year end.
The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation 
risk. This exposure is minimised by a group policy requiring individual subsidiaries to remit any surplus funds to the Parent 
Company to facilitate central management as set out above and to enable each individual subsidiary to match remaining 
assets and liabilities denominated in their specific functional currencies.
During the year ended 31 December 2007 the US$/UK£ exchange rate fluctuated between 1.96 and 2.07 (2006 between 
1.72 and 1.96). At 31 December 2007, if the US$ had weakened / strengthened by 5% against the UK£ with all other 
variables held constant, post tax profit for the year would have been £143,000 (2006: £114,000) 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 2007 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. 
T otal equity at 31 December 2007 was £18,694,000 (2006: £13,732,000).
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. Notes to the Financial Statements
continued
41 Patsystems    |    Annual Report 2007
4. s egmental analysis
The Group operates in one business segment; that of the supply of software to financial institutions. The operations are 
monitored by the geographical regions of Europe, North America and Asia Pacific.
2007 europe
£’000
north a merica
£’000
a sia Pacific
£’000
t otal
£’000
Revenue by origin 7,524 6,219 3,219 16,962
Revenue by destination 6,822 6,219 3,921 16,962
Depreciation and amortisation 1,011 33 49 1,093
Operating profit 1,980 16 91 2,087
Finance income – net 25 69 7 101
Profit before tax 2,006 84 98 2,188
Capital expenditure on property,  
plant and equipment 361 12 50 423
Capital expenditure on intangible assets 1,801 5 – 1,806
T otal assets 16,942 3,460 1,944 22,346
T otal liabilities (2,601) (840) (211) (3,652)
2006 Europe
£’000
North America
£’000
Asia Pacific
£’000
Total
£’000
Revenue by origin 6,722 5,555 2,978 15,255
Revenue by destination 5,543 5,555 4,157 15,255
Depreciation and amortisation 1,007 31 69 1,107
Operating profit 1,249 675 (348) 1,576
Finance income – net 27 22 1 50
Profit before tax 1,276 697 (347) 1,626
Capital expenditure on property,  
plant and equipment 234 64 46 344
Capital expenditure on intangible assets 1,679 2 8 1,689
T otal assets 15,216 2,481 1,904 19,601
T otal liabilities (4,944) (691) (234) (5,869) Notes to the Financial Statements
continued
42 Patsystems    |    Annual Report 2007
5. oP erating Profit before interest and taxation
2007
£’000
2006
 £’000
Operating profit is stated after charging/(crediting):
Staff costs 10,004 9,322
Share compensation expense 210 230
T otal staff costs 10,214 9,552
Less: wages and salaries capitalised in accordance with IAS 38 (936) (1,115)
9,278 8,437
Depreciation – owned tangible assets 401 450
– under finance leases 24 25
– total tangible assets 425 475
Amortisation – capitalised development costs 185 183
– other intangible assets 483 449
– total intangible assets 668 632
Operating lease costs – plant and machinery 24 23
– other 357 380
– total operating lease costs 381 403
Foreign exchange (gain)/loss – movement in fair value  
 of hedging instruments 97 (170)
– other exchange gains and losses (87) 49
– total foreign exchange loss/(gain) 10 (121)
Services provided by the Group’s auditor and network firms
During the year the Group (including its overseas subsidiaries) obtained the  
following services from the Group’s auditor as detailed below:
Audit services – statutory audit (Group) 76 82
– statutory audit (Company) 8 6
Non audit services – the audit of Company’s subsidiaries 
pursuant to legislation 5 6
– tax compliance, tax advice and transfer 
pricing review services 46 53
– other 10 6
Operating expenses are all of an administrative nature. Notes to the Financial Statements
continued
43 Patsystems    |    Annual Report 2007
6. staff costs
2007
£’000
2006
 £’000
Staff costs (including directors’ emoluments) during the year amounted to:
Wages and salaries 8,734 8,200
Share compensation expense 210 230
Social security costs 914 820
Pension costs 356 302
10,214 9,552
Included in the above wages and salaries is £936,000 (2006: £1,115,000) in relation to development costs that were 
capitalised in accordance with IAS 38.
The average monthly number of persons (included directors) employed by the Group during the year, in full time 
equivalents, was:
2007
n umber
2006
Number
Sales, account management and marketing 19 15
Customer operations, testing and technical 64 64
Development and product development 39 38
Finance, administration and board 19 19
141 136
Details of the emoluments of the Directors are contained in the Report of the Board on Directors’ Remuneration and Group 
Remuneration Policy on page 26, under the heading “Directors’ Emoluments” .
7. f inance income – net
2007
£’000
2006
 £’000
Interest receivable: bank interest receivable 101 54
Interest payable and similar charges:
On finance leases – (3)
Other interest payable – (1)
– (4)
Finance income – net 101 50 Notes to the Financial Statements
continued
44 Patsystems    |    Annual Report 2007
8. t ax on Profit on ordinary activities
2007
£’000
2006
 £’000
United Kingdom 
Withholding tax 76 111
Foreign tax
Corporation tax (40) 41
T otal current tax 36 152
Deferred tax
Movement in deferred tax (note 15) 308 (6,432)
T axation charge/(credit) 344 (6,280)
The tax for the year is different from that which would result from applying the standard rate of Corporation T ax in the UK 
(30%). The differences are explained below:
2007
£’000
2006
 £’000
Profit on ordinary activities before tax 2,188 1,626
Profit on ordinary activities multiplied by standard rate  
of Corporation T ax in the UK of 30% 656 488
Effects of:
Expenses not deductible for tax purposes 14 101
Depreciation (less than)/in excess of capital allowances – 142
Amortisation of intangibles not deductible 90 147
Effect of differing tax rates on overseas earnings 168 16
Withholding tax 76 111
Relief claimed on withholding tax (23) (33)
US taxes overpaid in earlier years (40) –
Recognition of deferred tax assets in respect of losses,  
capital allowances and share options (1,048) (6,432)
T ax losses for which no deferred tax asset has been recognised 48 –
Remeasurement of deferred tax on change of UK rate 403 –
T ax losses utilised – (820)
T axation charge/(credit) 344 (6,280)
During the year, as a result of the change in UK Corporation T ax rates which will be effective from 1 April 2008, deferred 
tax balances have been remeasured. UK deferred tax relating to temporary differences which are expected to reverse 
prior to 1 April 2008 is measured at 30% and UK deferred tax relating to temporary differences expected to reverse after 
1 April 2008 is measured at the tax rate of 28% as these are the tax rates that will apply on reversal.  
factors that may affect future tax charges
The Group has unrelieved tax losses of £24,397,000 (2006: £23,378,000) that are available for offset against future 
taxable profits in their respective territories. A deferred tax asset amounting to £288,000 (2006: £240,000) has not been 
recognised in respect of these losses as their future recovery is uncertain. Notes to the Financial Statements
continued
45 Patsystems    |    Annual Report 2007
9. Parent com Pany accounts 
The Parent Company accounts are set out in pages 61 to 68.
10. earnings Per ordinary share
In accordance with IAS 33, the calculation of earnings per ordinary share is based upon:
(a) basic and adjusted basic ePs
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:
2007 2006
Profit for the year attributable to equity holders of the Company £1,844,000 £7,906,000
Deferred tax movement (note 8) £308,000 (£6,432,000)
Adjusted profit on ordinary activities* £2,152,000 £1,474,000
Weighted average number of shares 168,090,000 162,794,000
Basic EPS 1.1p 4.9p
Adjusted basic EPS 1.3p 0.9p
(b) diluted and adjusted diluted ePs
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 two categories of dilutive potential ordinary shares: share options and contingent shares (note 20).
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.
2007 2006
Profit for the year attributable to equity holders of the Company £1,844,000 £7,906,000
Deferred tax movement (note 8) £308,000 £(6,432,000)
Adjusted profit on ordinary activities* £2,152,000 £1,474,000
Weighted average number of shares 168,090,000 162,794,000
Effect of dilutive share options 16,062,000 15,020,000
Effect of contingent share consideration 1,092,000 14,267,000
185,244,000 192,081,000
Diluted EPS 1.0p 4.1p
Adjusted diluted EPS 1.2p 0.8p
* due to the material size of the deferred tax movement in 2006 and the significant effect it has on the reported EPS  
 figure, the Directors consider that it is more appropriate to give adjusted EPS calculations that exclude the effect of  
 deferred tax. Notes to the Financial Statements
continued
46 Patsystems    |    Annual Report 2007
11. Princi Pal subsidiaries
The principal investments in subsidiary undertakings held by the Parent Company are as follows:
A 100% investment in respect of voting rights and nominal value in Patsystems Holdings Limited, a company incorporated 1. 
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 of America
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.      
A 100% investment in T amesis Limited, a company incorporated in England and Wales that develops, distributes and 2. 
supports software enabling real time trade capture, valuation and risk management for the structured finance market. 
All subsidiaries are included in the consolidation.
12. g oodwill
2007
£’000
2006
£’000
Cost and net book value
At 1 January 2007 1,745 1,552
Additions 1,492 193
At 31 December 2007 3,237 1,745
The additions in the year are in relation to the 2005 acquisition of T amesis Limited and represent an increase in the 
estimated contingent consideration (note 20).
The goodwill is all held in Europe.
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 2008. 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. Notes to the Financial Statements
continued
47 Patsystems    |    Annual Report 2007
13. intangible assets
2007 software licences
£’000
a cquired software
£’000
c apitalised 
development
£’000
t otal
£’000
Cost
At 1 January 2007 1,123 898 2,127 4,148
Additions 450 – 1,356 1,806
Disposals (300) – – (300)
Foreign exchange – – – –
At 31 December 2007 1,273 898 3,483 5,654
Amortisation
At 1 January 2007 (959) (424) (229) (1,612)
Charge for the year (184) (299) (185) (668)
Disposals 300 – – 300
Foreign exchange – – – –
At 31 December 2007 (843) (723) (414) (1,980)
Net book value
At 31 December 2007 430 175 3,069 3,674
At 31 December 2006 164 474 1,898 2,536
The acquired software is in relation to the Risk Informer software purchased as part of the T amesis Limited acquisition in 2005. 
2006 Software licences
£’000
Acquired software
£’000
Capitalised 
development
£’000
Total
£’000
Cost
At 1 January 2006 992 898 577 2,467
Additions 139 – 1,550 1,689
Foreign exchange (8) – – (8)
At 31 December 2006 1,123 898 2,127 4,148
Amortisation
At 1 January 2006 (817) (125) (46) (988)
Charge for the year (150) (299) (183) (632)
Foreign exchange 8 – – 8
At 31 December 2006 (959) (424) (229) (1,612)
Net book value
At 31 December 2006 164 474 1,898 2,536
At 31 December 2005 175 773 531 1,479 Notes to the Financial Statements
continued
48 Patsystems    |    Annual Report 2007
14. Pro Perty, Plant and equi Pment
2007 l easehold 
improvements
£’000
Plant and 
equipment
£’000
o ffice furniture, 
fixtures and 
fittings
£’000
t otal
£’000
Cost
At 1 January 2007 540 2,766 452 3,758
Additions – 378 45 423
Disposals – (14) – (14)
Foreign exchange (1) 5 (2) 2
31 December 2007 539 3,135 495 4,169
Depreciation
At 1 January 2007 (233) (2,351) (420) (3,004)
Charge for the year (100) (302) (23) (425)
Disposals – 14 – 14
Foreign exchange 1 (5) 2 (2)
At 31 December 2007 (332) (2,644) (441) (3,417)
Net book value
At 31 December 2007 207 491 54 752
At 31 December 2006 307 415 32 754
Included in plant and equipment are assets held under finance leases at a net book value of £Nil (2006: £24,000).  
The depreciation charge on these assets was £24,000 (2006: £25,000).
2006 Leasehold 
improvements 
£’000
Plant and 
equipment
£’000
Office furniture, 
fixtures and fittings
£’000
Total
£’000
Cost
At 1 January 2006 506 2,599 463 3,568
Additions 41 290 13 344
Disposals (3) (39) – (42)
Foreign exchange (4) (84) (24) (112)
31 December 2006 540 2,766 452 3,758
Depreciation
At 1 January 2006 (145) (2,099) (422) (2,666)
Charge for the year (93) (362) (20) (475)
Disposals 3 39 – 42
Foreign exchange 2 71 22 95
At 31 December 2006 (233) (2,351) (420) (3,004)
Net book value
At 31 December 2006 307 415 32 754
At 31 December 2005 361 500 41 902 Notes to the Financial Statements
continued
49 Patsystems    |    Annual Report 2007
15. d eferred tax assets
2007 t rading losses
£’000
c apital 
allowances
£’000
share options
£’000
other timing 
differences
t otal
£’000
At 1 January 2007 6,747 200 32 – 6,979
Additional deferred tax assets in  
respect of Group companies that  
have become profitable 984 – – – 984
Adjustments in respect of prior years – 42 22 – 64
Utilisation of losses against current  
year profits (657) – – – (657)
(Charges) / credits arising in the year – (424) 78 50 (296)
Remeasurement on change of UK rate (411) 13 (9) 4 (403)
(Charged) / credited to income statement (84) (369) 91 54 (308)
Foreign exchange 2 – – – 2
At 31 December 2007 6,665 (169) 123 54 6,673
2006 Trading losses
£’000
Capital 
allowances
£’000
Share options
£’000
Other timing 
differences
Total
£’000
At 1 January 2006 – – – – –
Fair value adjustment in respect of tax 
losses in T amesis at date of acquisition 547 – – – 547
Credited to income statement 6,200 200 32 – 6,432
At 31 December 2006 6,747 200 32 – 6,979
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
2007
£’000
2006
£’000
Goods for resale 12 188
£12,000 (2006: £14,000) of inventory was recognised in cost of sales during the year. 
£Nil (2006: £96,000) of inventory was expensed to cost of sales in the year to write down stock to its net realisable value.  Notes to the Financial Statements
continued
50 Patsystems    |    Annual Report 2007
17. trade and other receivables
2007
£’000
2006
£’000
Trade receivables 2,798 2,622
Less: provision for impairment of receivables (83) (50)
Trade receivables – net 2,715 2,572
Other receivables 327 329
Prepayments and accrued income 1,695 1,120
4,737 4,021
Less non-current portion – accrued income (371) –
Current Portion 4,366 4,021
Non-current receivables are due as follows:
2007
£’000
2006
£’000
Within between one and two years 71 –
Within between two and five years 190 –
After more than five but less than ten years 110 –
Non-current receivables 371 –
The carrying values less impairment provisions of trade and other receivables approximate their fair values.
The effective interest rates on non-current receivables were 6% (2006: nil).
The ageing of trade receivables is as follows:
2007 not past due
£’000
up to 3 months
£’000
3 to 6 months
£’000
o ver 6 months
£’000
t otal
£’000
Fully performing 1,909 – – – 1,909
Past due but not impaired – 649 89 68 806
Impaired and provided for – – – 83 83
1,909 649 89 151 2,798
2006 Not past due
£’000
Up to 3 months
£’000
3 to 6 months
£’000
Over 6 months
£’000
Total
£’000
Fully performing 2,186 – – – 2,186
Past due but not impaired – 252 51 83 386
Impaired and provided for – – – 50 50
2,186 252 51 133 2,622
Trade receivables that are less that three months past due are not considered impaired. As of 31 December 2007, trade 
receivables of £806,000 (2006: £386,000) 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 2007 
totalled £83,000 (2006: £50,000). 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. Notes to the Financial Statements
continued
51 Patsystems    |    Annual Report 2007
17. trade and other receivables (continued)
The carrying amounts of the Group’s trade and other receivables are denominated in the following currencies:
2007
£’000
2006
£’000
UK Pound 2,215 1,765
US Dollar 1,967 1,888
Singapore Dollar 204 137
Japanese Y en 144 158
Australian Dollar 114 62
Other currencies 93 11
Total 4,737 4,021
Movements on the Group provision for impairment of trade receivables are as follows: 
2007
£’000
2006
£’000
At 1 January 50 120
Provision for receivables impairment 83 50
Receivables written off during the year as uncollectible (26) (43)
Unused amounts reversed (24) (77)
At 31 December 83 50
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. c ash and cash equivalents 
2007
£’000
2006
£’000
Cash at bank and on hand 1,758 2,263
Short-term deposits 1,433 988
3,191 3,251
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. Notes to the Financial Statements
continued
52 Patsystems    |    Annual Report 2007
18. c ash and cash equivalents (continued)
The carrying amounts of the Group’s cash and cash equivalents are denominated in the following currencies:
2007
£’000
2006
£’000
UK Pound 307 823
US Dollar 1,749 1,082
Singapore Dollar 276 168
Japanese Y en 699 1,034
Australian Dollar 131 86
Other currencies 29 58
Total 3,191 3,251
19. trade and other Payables
2007
£’000
2006
£’000
Current liabilities
Trade payables 316 635
Other tax and social security 350 423
Accruals 1,187 1,119
Deferred income 1,387 1,417
3,240 3,594
Non-current liabilities
Deferred income 44 –
3,284 3,594
None of the payables are secured. 
Non-current liabilities mature within between one and two years. All other 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:
2007
£’000
2006
£’000
UK Pound 2,254 2,621
US Dollar 863 692
Singapore Dollar 13 7
Japanese Y en 100 219
Australian Dollar 30 22
Other currencies 24 33
Total 3,284 3,594
The carrying amounts of the Group’s trade and other payables approximate their fair values. Notes to the Financial Statements
continued
53 Patsystems    |    Annual Report 2007
20. c ontingent consideration
The contingent share consideration is in relation to the acquisition of T amesis Limited which is payable entirely in 
Patsystems plc ordinary shares. During the year the Company issued 12,159,000 ordinary shares of 1p each at a price of 
27.5p per share in part settlement of this liability. The balance of the consideration is due to be settled by the issue of a 
further 1,092,240 ordinary shares of 1p each in February 2008.
21. Provisions 
At 1 January 2007
£’000
u tilised  
in year
£’000
movement  
in year
£’000
a t  
31 december 2007
£’000
Due between one and two years
Dilapidations provision 34 – 24 58
The dilapidations provision is in respect of work to be carried out at the end of the lease on property. It is due to expire  
in the second half of 2009.
22. c ommitments under o Perating leases
The Group leases various offices 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:
2007
£’000
2006
£’000
Land and buildings
No later than one year 390 295
Later than one year and less than five years 528 678
After five years – 13
918 986 Notes to the Financial Statements
continued
54 Patsystems    |    Annual Report 2007
23. c alled u P equity share ca Pital
Authorised
2007
£’000
2006
£’000
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 – 164,154,850 shares 1,641 1,605
Allotted as consideration for acquisition of T amesis Limited 122 –
Allotted under share option schemes 12 32
Allotted in lieu of payment – 4
At 31 December – 177,496,511 shares 1,775 1,641
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 – –
The deferred 1p shares are not listed. They have no voting rights and no access to dividends. Notes to the Financial Statements
continued
55 Patsystems    |    Annual Report 2007
24. s hare o Ption schemes
The following options to purchase 1p Ordinary shares in Patsystems plc were granted, exercised, lapsed and outstanding 
during the year:
exercise price 
in pence
o utstanding at  
1 january 2007
g ranted  
in year
exercised  
in year
l apsed  
in year
o utstanding at  
31 december 2007
exercisable at  
31 december 2007
effective 
dates
Enterprise Management Incentive Scheme 
5.08p 2,162,500 – (408,250) (18,750) 1,735,500 1,735,500 Note a
9.50p 97,500 – – – 97,500 97,500 Note a
13.50p 90,000 – (18,000) – 72,000 14,400 Note b
13.75p 727,272 – – – 727,272 – Note d
14.25p 669,211 – (16,500) (71,088) 581,623 110,325 Note b
14.50p 1,186,606 – – – 1,186,606 237,321 Note b
15.25p 775,737 – – – 775,737 155,147 Note b
15.58p 2,976,500 – (331,200) (1,228,800) 1,416,500 264,100 Note b
17.50p 90,000 – – – 90,000 18,000 Note b
27.75p – 250,000 – – 250,000 – Note d
29.00p – 444,827 – – 444,827 – Note d
8,775,326 694,827 (773,950) (1,318,638) 7,377,565 2,632,293
2003 Share Option Scheme
1.00p – 776,700 (194,175) – 582,525 – Note f
13.75p 3,272,728 – – – 3,272,728 – Note e
14.25p 432,851 – (60,536) (28,070) 344,245 26,035 Note c
14.50p 144,494 – – – 144,494 28,899 Note c
15.25p 464,263 – (12,000) (48,000) 404,263 80,853 Note c
15.58p 985,500 – (53,000) (152,000) 780,500 144,100 Note c
16.00p 445,000 – (89,000) (356,000) – – Note c
18.00p 500,000 – – – 500,000 100,000 Note c
27.75p – 1,000,000 – – 1,000,000 – Note e
29.00p – 1,655,173 – – 1,655,173 – Note e
6,244,836 3,431,873 (408,711) (584,070) 8,683,928 379,887
T otal all 
schemes 15,020,162 4,126,700 (1,182,661) (1,902,708) 16,061,493 3,012,180
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 Enterprise Management Incentive (EMI) Scheme. 
20% of these options vested on 14 February 2007 and 16% will vest on 11 February 2008. The remaining 64% 
of the options will be carried forward into future years and the Remuneration Committee will determine what 
performance conditions to attach to them in 2008.
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. Notes to the Financial Statements
continued
56 Patsystems    |    Annual Report 2007
24. s hare o Ption schemes (continued)
Note d: These options were granted under a special award of the Enterprise Management Incentive (EMI) Scheme. One 
third of these options can be exercised after a period of three years after the date of the grant. Two thirds of 
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 e: 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 d.
Note f: These options were granted under a special award of Part B (Inland Revenue Unapproved) of the Patsystems plc 
2003 Share Option Scheme. 25% of these options became exercisable on 31 December 2007 with the remaining 
75% exercisable one year thereafter.
The weighted average fair value per share at the measurement date of options granted during the year was 14.0p 
(2006: 5.9p).
The weighted average share price at the date of grant of options granted during the year was 28.1p (2006: 13.5p). 
For the options that were exercised during the year, the weighted average share price at the date of exercise was 26p 
(2006: 14p).
The weighted average remaining contractual life of options outstanding at the year end is 8 years (2006: 8 years).
The total fair value that was charged to the income statement in relation to the share options was £210,000 
(2006: £230,000), 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:
Share Price and Exercise Price  a. 
Share prices are closing share prices as at the date of grant. Exercise prices are listed in the above schedule.
Expected T erm of the Options b. 
It is assumed that the expected life of the options under consideration is 5 years. 
Volatility c. 
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 5 years back from each date of grant.
Risk-Free interest rate d. 
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. 
Dividends e. 
The valuations take account of the expected future dividend yield at the date of each grant. Notes to the Financial Statements
continued
57 Patsystems    |    Annual Report 2007
24. s hare o Ption schemes (continued)
The table below sets out the volatilities, risk-free interest rates and dividend yields applied in each valuation:
date of grant
volatility 
(%)
risk-free interest rate 
(%)
dividend yield 
(%)
24 February 2003 77.8009% 4.6922% 0.00%
13 March 2003 78.3590% 4.7175% 0.00%
30 June 2003 78.4194% 4.6412% 0.00%
27 October 2003 79.8321% 5.7891% 0.00%
01 January 2004 78.6748% 5.4125% 0.00%
30 July 2004 73.6821% 5.8602% 0.00%
27 August 2004 71.7764% 5.6660% 0.00%
16 November 2004 58.9201% 5.2789% 0.00%
04 February 2005 56.6301% 5.1507% 0.00%
17 March 2005 52.4971% 5.4148% 0.00%
06 October 2005 54.9819% 4.7689% 2.00%
23 November 2005 49.8819% 4.8322% 2.00%
14 December 2005 50.0097% 4.8764% 2.00%
14 February 2006 50.1501% 4.7515% 2.00%
19 April 2007 48.4035% 5.2980% 1.00%
7 December 2007 30.0527% 4.5550% 1.00%
31 December 2007 30.9369% 5.6204% 1.00%
25. s hare ca Pital and reserves
a t 
1 january 2007
£’000
shares issued 
in the year
£’000
earnings for 
the year
£’000
dividends 
paid
£’000
foreign 
exchange 
movement
£’000
share 
compensation 
expense
£’000
a t 
31 december 2007
£’000
Paid up share 
capital 1,641 134 – – – – 1,775
Share premium 3,691 3,323 – – – – 7,014
Other reserves 17,348 – – – – – 17,348
Retained earnings (8,948) – 1,844 (693) 144 210 (7,443)
13,732 3,457 1,844 (693) 144 210 18,694
At 
1 January 2006
£’000
Shares issued 
in the year
£’000
Earnings for 
the year
£’000
Dividends 
paid
£’000
Foreign 
exchange 
movement
£’000
Share 
compensation 
expense
£’000
At 
31 December 2006
£’000
Paid up share 
capital 1,605 36 – – – – 1,641
Share premium 3,510 181 – – – – 3,691
Other reserves 17,348 – – – – – 17,348
Retained earnings (16,940) – 7,906 – (144) 230 (8,948)
5,523 217 7,906 – (144) 230 13,732 Notes to the Financial Statements
continued
58 Patsystems    |    Annual Report 2007
25. s hare ca Pital and reserves (CONTINUED)
investments in own shares 
The Group has an investment in own shares of 71,856 shares (2006: 71,856 shares) as a result of employees leaving the All 
Employee Share Scheme. The nominal value of these shares is £719 (2006: £719). The market value at 31 December 2007  
is £19,000 (2006: £12,000). 
26. statement of changes in shareholders’ equity 
2007
£’000
2006
£’000
Profit on ordinary activities after taxation 1,844 7,906
Dividends paid (693) –
Foreign exchange adjustment 144 (144)
Share compensation expense 210 230
Shares issued in part settlement of the deferred  
consideration for the 2005 acquisition of T amesis Limited 3,345 –
Proceeds from the issue of ordinary share capital 112 217
4,962 8,209
Shareholders’ funds at 1 January 13,732 5,523
Shareholders’ funds at 31 December 18,694 13,732
27. d ividends Per share 
The dividends paid in the year were as follows:
2007
£’000
2006
£’000
Final dividend in respect of the year ended 31 December 2006 at 0.3p per share 495 –
Interim dividend at 0.12p per share 198 –
693 –
A final dividend in respect of the year ended 31 December 2007 of 0.21p per share amounting to a total dividend of 
£375,000, is to be proposed at the annual general meeting on 17 April 2008. These financial statements do not reflect this 
dividend payable. 
28. f inancial instruments
28.1 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.  Notes to the Financial Statements
continued
59 Patsystems    |    Annual Report 2007
28.2 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.
2007
a ssets as per balance sheet
l oans and 
receivables
£’000
a ssets at fair  
value through the 
profit and loss
£’000
t otal
£’000
Trade and other receivables 4,737 – 4,737
Derivative financial instruments – 30 30
Income tax 40 – 40
Cash and cash equivalents 3,191 – 3,191
7,968 30 7,998
2007
liabilities as per balance sheet
l iabilities at fair 
value through the 
profit and loss
£’000
other financial 
liabilities
£’000
t otal
£’000
Trade and other payables 3,284 – 3,284
Current income tax liabilities – 20 20
Contingent consideration – 290 290
3,284 310 3,594
2006
Assets as per balance sheet
Loans and 
receivables
£’000
Assets at fair  
value through the 
profit and loss
£’000
Total
£’000
Trade and other receivables 4,021 – 4,021
Derivative financial instruments – 127 127
Cash and cash equivalents 3,251 – 3,251
7,272 127 7,399
2006
Liabilities as per balance sheet
Liabilities at fair 
value through the 
profit and loss
£’000
Other financial 
liabilities
£’000
Total
£’000
Trade and other payables 3,594 – 3,594
Current income tax liabilities 101 – 101
Contingent consideration – 2,140 2,140
3,695 2,140 5,835
The Group had no borrowings as at 31 December 2007 or 31 December 2006.   Notes to the Financial Statements
continued
60 Patsystems    |    Annual Report 2007
28.3 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 2007 the 
Company has the following hedges in place:
f orward contracts
forward contract value maturity date effective forward rate
$150,000 31 January 2008 1.954
$350,000 29 February 2008 1.918
$300,000 30 September 2008 2.028
$600,000 31 October 2008 2.024
$500,000 28 November 2008 2.022
$900,000 31 December 2008 1.984
c urrency options
forward contract value maturity date effective forward rate
$550,000 27 March 2008 2.000
$600,000 28 April 2008 2.000
$500,000 28 May 2008 1.990
$500,000 28 May 2008 1.970
$650,000 29 July 2008 2.010
$620,000 27 August 2008 1.990
At the year end the fair value of the above contracts is an asset of £30,000 (2006: £127,000). The movement in fair values  
of £97,000 has been charged to the income statement in the year.
29. r elated Party transactions
Revenue includes £358,000 (2006: £366,000) 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 2007 the amount owing to group 
companies by Banca Caboto Spa (London Branch) was £68,000 (2006: £Nil).
key management remuneration
Details of the remuneration of key management are detailed below:
2007
£’000
2006
£’000
Salaries and short term employee benefits 1,648 1,394
Share based payments 174 180
1,822 1,574 61 Patsystems    |    Annual Report 2007
Independent Auditors’ Report to the Members of Patsystems plc
We have audited the Parent Company financial statements of Patsystems plc for the year ended 31 December 2007 which comprise 
the Balance Sheet and the related notes. These Parent Company financial statements have been prepared under the accounting 
policies set out therein. 
We have reported separately on the Group financial statements of Patsystems plc for the year ended 31 December 2007.
r esPective res Ponsibilities of directors and auditors
The directors’ responsibilities for preparing the Annual Report and the Parent Company financial statements in accordance with 
applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out in 
the Statement of Directors’ Responsibilities.
Our responsibility is to audit the Parent Company financial statements in accordance with relevant legal and regulatory requirements 
and International Standards on Auditing (UK and Ireland). This report, including the opinion, has been prepared for and only for the 
Company’s members as a body in accordance with Section 235 of the Companies Act 1985 and for no other purpose. We do not, 
in giving this opinion, 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.
We report to you our opinion as to whether the Parent Company financial statements give a true and fair view and whether the 
Parent Company financial statements have been properly prepared in accordance with the Companies Act 1985. We report to you 
whether in our opinion the information given in the Directors’ Report is consistent with the Parent Company financial statements. 
In addition we report to you if, in our opinion, the Company has not kept proper accounting records, if we have not received all the 
information and explanations we require for our audit, or if information specified by law regarding directors’ remuneration and other 
transactions is not disclosed.
We read other information contained in the Annual Report and consider whether it is consistent with the audited Parent Company 
financial statements. The other information comprises only the Directors’ Report. We consider the implications for our report if 
we become aware of any apparent misstatements or material inconsistencies with the Parent Company financial statements. Our 
responsibilities do not extend to any other information.
basis of audit o Pinion 
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices 
Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the Parent Company 
financial statements. It also includes an assessment of the significant estimates and judgments made by the directors in the 
preparation of the Parent Company financial statements, and of whether the accounting policies are appropriate to the Company’s 
circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order 
to provide us with sufficient evidence to give reasonable assurance that the Parent Company financial statements are free from 
material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall 
adequacy of the presentation of information in the Parent Company financial statements.
oP inion
In our opinion:
the Parent Company financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted  
Accounting Practice, of the state of the Company’s affairs as at 31 December 2007;
the Parent Company financial statements have been properly prepared in accordance with the Companies Act 1985; and 
the information given in the Directors’ Report is consistent with the Parent Company financial statements. 
Pricewaterhouse c oo Pers ll P
CHARTERED ACCOUNTANTS AND REGISTERED AUDITORS
London
8 February 2008 62 Patsystems    |    Annual Report 2007
Company Balance Sheet
at 31 December 2007
Notes
2007
£’000
2006
£’000
FIXED ASSETS
Investments 4 5,106 3,614
CURRENT ASSETS
Debtors 5 4,880 4,575
Cash at bank and in hand 4 5
4,884 4,580
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR 7 (341) (2,175)
Net current assets 4,543 2,405
Net assets 9,649 6,019
CAPITAL AND RESERVES
Share capital 9 1,775 1,641
Share premium account 11 7,014 3,691
Other reserves 11 50 50
Retained earnings 11 810 637
Equity shareholders’ funds 11 9,649 6,019
The financial statements on pages 62 to 68 were approved by the Board of Directors on 8 February 2008.
david w ebber    martin thorneycroft
CHIEF EXECUTIVE OFFICER   FINANCE DIRECTOR Notes to the Financial Statements
63 Patsystems    |    Annual Report 2007
1 a ccounting Policies
The financial statements have been prepared under the historical cost basis of accounting and in accordance with applicable 
accounting standards in the United Kingdom. 
A summary of the more important accounting policies is given 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 131 to 134 of the Companies Act 1985, merger relief is available and the investment is stated at nominal value  
of shares issued plus the value of any other consideration.
1.2 HIRE PURCHASE OBLIGATIONS, FINANCE LEASES AND 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. 
Assets purchased under hire purchase contracts and finance leases are recorded as tangible fixed assets in the Balance Sheet. 
The obligations to pay future capital installments are shown in creditors and are analysed between amounts falling due 
within one year and amounts after more than one year. The asset value is calculated at the inception of the contract as the 
purchase price of the asset, and the finance charge is allocated to accounting periods on the sum of the digits basis.
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.
2. d irectors and em Ployees
The Parent Company does not employ any directors or employees. Notes to the Financial Statements
continued
64 Patsystems    |    Annual Report 2007
3. Profit and loss account 
The profit for the year dealt with in the accounts of the Company was £656,000 (2006: £287,000).
The Directors have taken advantage of the exemption available under section 230(4) of the Companies Act 1985, and have 
not presented a Profit and Loss Account for the Company alone. 
4. investments  
investment in subsidiary undertaking
£’000
At 1 January 2007 3,614
Additions 1,492
At 31 December 2007 5,106
The additions in the year are an increase in the estimated contingent consideration in respect of the 2005 acquisition of 
T amesis Limited (see note 8).
The investment in subsidiary undertakings represents:
A 100% investment in respect of voting rights and nominal value in Patsystems Holdings Limited, a company incorporated 1. 
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 of America
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.      
A 100% investment in T amesis Limited, a company incorporated in England and Wales that develops, distributes and 2. 
supports software enabling real time trade capture, valuation and risk management for the structured finance market.
5. d ebtors
 
2007
£’000
2006
£’000
Amounts owed by group undertakings 4,877 4,538
Deferred tax asset – 32
Other debtors 1 3
Prepayments and accrued income 2 2
4,880 4,575 Notes to the Financial Statements
continued
65 Patsystems    |    Annual Report 2007
6. d eferred tax asset
The deferred tax asset relates to future tax deductions in relation to the share option expense. The amount charged to the 
income statement in the year was £32,000 (2006: credit £32,000). 
7. c reditors: amounts falling due within one year 
2007
£’000
2006
£’000
Trade creditors 1 3
Contingent consideration 290 2,140
Other creditors 2 2
Accruals and deferred income 48 30
341 2,175
None of the creditors are secured. 
8. c ontingent consideration
The contingent share consideration is in relation to the acquisition of T amesis Limited which is payable entirely in 
Patsystems plc ordinary shares. During the year the Company issued 12,159,000 ordinary shares of 1p each at a price of 
27.5p per share in part settlement of this liability. The balance of the consideration is due to be settled by the issue of a 
further 1,092,240 ordinary shares of 1p each in February 2008.
9. c alled u P equity share ca Pital
Authorised
2007
£’000
2006
£’000
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 – 164,154,850 shares 1,641 1,605
Allotted in consideration for the acquisition of T amesis Limited 122 –
Allotted under share option schemes 12 32
Allotted in lieu of payment – 4
At 31 December – 177,496,511 shares 1,775 1,641
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 – –
The deferred 1p shares are not listed. They have no voting rights and no access to dividends. Notes to the Financial Statements
continued
66 Patsystems    |    Annual Report 2007
10. s hare o Ption schemes
The following options to purchase 1p Ordinary shares in Patsystems plc were granted, exercised, lapsed and outstanding 
during the year:
exercise price 
in pence
o utstanding at
 1 january 2007
g ranted 
in year
exercised 
in year
l apsed 
in year
o utstanding at 
31 december 2007
exercisable at
31 december 2007
effective 
dates
Enterprise Management Incentive Scheme 
5.08p 2,162,500 – (408,250) (18,750) 1,735,500 1,735,500 Note a
9.50p 97,500 – – – 97,500 97,500 Note a
13.50p 90,000 – (18,000) – 72,000 14,400 Note b
13.75p 727,272 – – – 727,272 – Note d
14.25p 669,211 – (16,500) (71,088) 581,623 110,325 Note b
14.50p 1,186,606 – – – 1,186,606 237,321 Note b
15.25p 775,737 – – – 775,737 155,147 Note b
15.58p 2,976,500 – (331,200) (1,228,800) 1,416,500 264,100 Note b
17.50p 90,000 – – – 90,000 18,000 Note b
27.75p – 250,000 – – 250,000 – Note d
29.00p – 444,827 – – 444,827 – Note d
8,775,326 694,827 (773,950) (1,318,638) 7,377,565 2,632,293
2003 Share Option Scheme
1.00p – 776,700 (194,175) – 582,525 – Note f
13.75p 3,272,728 – – – 3,272,728 – Note e
14.25p 432,851 – (60,536) (28,070) 344,245 26,035 Note c
14.50p 144,494 – – – 144,494 28,899 Note c
15.25p 464,263 – (12,000) (48,000) 404,263 80,853 Note c
15.58p 985,500 – (53,000) (152,000) 780,500 144,100 Note c
16.00p 445,000 – (89,000) (356,000) – – Note c
18.00p 500,000 – – – 500,000 100,000 Note c
27.75p – 1,000,000 – – 1,000,000 – Note e
29.00p – 1,655,173 – – 1,655,173 – Note e
6,244,836 3,431,873 (408,711) (584,070) 8,683,928 379,887
T otal all 
schemes 15,020,162 4,126,700 (1,182,661) (1,902,708) 16,061,493 3,012,180
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 Enterprise Management Incentive (EMI) Scheme. 
20% of these options vested on 14 February 2007 and 16% will vest on 11 February 2008. The remaining 64% 
of the options will be carried forward into future years and the Remuneration Committee will determine what 
performance conditions to attach to them in 2008. Notes to the Financial Statements
continued
67 Patsystems    |    Annual Report 2007
10. s hare o Ption schemes (CONTINUED)
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.
Note d: These options were granted under a special award of the Enterprise Management Incentive (EMI) Scheme. One  
third of these options can be exercised after a period of three years after the date of the grant. Two thirds of 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 e: 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 d.
Note f: These options were granted under a special award of Part B (Inland Revenue Unapproved) of the Patsystems plc 
2003 Share Option Scheme. 25% of these options became exercisable on 31 December 2007 with the remaining 
75% exercisable one year thereafter.
The weighted average fair value per share at the measurement date of options granted during the year was 14.0p (2006:  5.9p).
The weighted average share price at the date of grant of options granted during the year was 28.1p (2006: 13.5p). 
For the options that were exercised during the year, the weighted average share price at the date of exercise was 26p 
(2006: 14p).
The weighted average remaining contractual life of options outstanding at the year end is 8 years (2006: 8 years).
The total fair value that was charged to the income statement in relation to the share options was £210,000 
(2006: £230,000), 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:
Share Price and Exercise Price  a. 
Share prices are closing share prices as at the date of grant. Exercise prices are listed in the above schedule.
Expected T erm of the Options b. 
It is assumed that the expected life of the options under consideration is 5 years. 
Volatility c. 
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 5 years back from each date of grant.
Risk-Free interest rate d. 
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. 
Dividends e. 
The valuations take account of the expected future dividend yield at the date of each grant. Notes to the Financial Statements
continued
68 Patsystems    |    Annual Report 2007
10. s hare o Ption schemes (CONTINUED)
The table below sets out the volatilities, risk-free interest rates and dividend yields applied in each valuation:
date of grant
volatility 
(%)
risk-free interest rate 
(%)
dividend yield 
(%)
24 February 2003 77.8009% 4.6922% 0.00%
13 March 2003 78.3590% 4.7175% 0.00%
30 June 2003 78.4194% 4.6412% 0.00%
27 October 2003 79.8321% 5.7891% 0.00%
01 January 2004 78.6748% 5.4125% 0.00%
30 July 2004 73.6821% 5.8602% 0.00%
27 August 2004 71.7764% 5.6660% 0.00%
16 November 2004 58.9201% 5.2789% 0.00%
04 February 2005 56.6301% 5.1507% 0.00%
17 March 2005 52.4971% 5.4148% 0.00%
06 October 2005 54.9819% 4.7689% 2.00%
23 November 2005 49.8819% 4.8322% 2.00%
14 December 2005 50.0097% 4.8764% 2.00%
14 February 2006 50.1501% 4.7515% 2.00%
19 April 2007 48.4035% 5.2980% 1.00%
7 December 2007 30.0527% 4.5550% 1.00%
31 December 2007 30.9369% 5.6204% 1.00%
11. s hare ca Pital and reserves
a t 1 january 
2007
£’000
shares issued 
in the year
£’000
Profit for 
the year
£’000
dividends 
paid
£’000
share compensation 
expense
£’000
a t 
31 december 2007
£’000
Paid up share capital 1,641 134 – – – 1,775
Share premium 3,691 3,323 – – – 7,014
Other reserves 50 – – – – 50
Retained earnings 637 – 656 (693) 210 810
6,019 3,457 656 (693) 210 9,649
12. d ividends Per share 
The dividends paid in the year were as follows:
2007
£’000
2006
£’000
Final dividend in respect of the year ended 31 December 2006 at 0.3p per share 495 –
Interim dividend at 0.12p per share 198 –
693 –
A final dividend in respect of the year ended 31 December 2007 of 0.21p per share amounting to a total dividend of 
£375,000, is to be proposed at the annual general meeting on 17 April 2008. These financial statements do not reflect this 
dividend payable.  Patsystems    |    Annual Report 2007
Directors and Advisers
directors
Stewart Millman Chairman and Non-executive Director
David Webber Chief Executive
Martin Thorneycroft Finance Director 
Richard Last Non-executive Director, Chairman of the Audit Committee 
Steve Sparke Non-executive Director
John Priestley Non-executive Director, Chairman of the combined Remuneration  
 and Nominations Committee
c om Pany s ecretary
Daljit Kaur-Khela
a dvisers
Broker and Nominated adviser Seymour Pierce Limited
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
c or Porate d etails
Registered office: Cottons Centre, Hays Lane, London SE1 2QP
Company number: 4498002
Country of incorporation: England and Wales
Website: www.patsystems.com
Stock Exchange symbol: pts EuropE
London
Cottons Centre 
Hays Lane
SE1 2QP 
Tel +44 (0)20 7940 0490 
Fax +44 (0)20 7940 0499 
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
ASi A pA cific Singa Por E 
137 Telok a yer Street
#07-07
Singapore 068602
Tel +65 6216 0452
Fax +65 6536 4167
TokY o 
2nd Floor, k akigara-Cho Bldg
10-7, n ihon-bashi k akigara-Cho 1-chome
Chuo-k u
Tokyo 103-0014 
Tel +81 (0) 3 3668 9372
Fax +81 (0) 3 2664 7594 
SYdn EY 
Level 6
Underwood House
37 Pitt Street
Sydney n SW 2000
Tel +61 (0) 2 8987 9600
Fax +61 (0) 2 8252 7640
Hong k ong 
15th Floor
100 Queen’s r oad
Central Hong kong
Tel +852 31809512
Fax +852 31809399
Annual Report 2007
Annual Report 2007