Systems Union Group plc
Annual Report and Accounts 2004 £8,667
£10,369
02
03
£5,073
£7,894
02
03
£14,212 04
£74,631
£78,427
£104,230
02
03
04
7.8p
9.3p
11.0p
02
03
04 £12,141 04
Major Highlights of 2004
> Adjusted Earnings increased to £11.1 million from £9.0 million, up 23%
> Adjusted EPS of 11.0p, up 18%
> Revenue of £104.2 million, up 33%
> EBITDA from ongoing activities of £14.2 million, up 37%
> Cash generation strong: operating cash flow for the year of £12.1 million, up 54%
> Final dividend of 1.5p proposed, giving a total of 2.0p for the year (2003: 1.0p)
> Acquisition of Lasata Pty Ltd, ncSoft Limited and Quantum Accounting Limited
Revenue increased by 
33% to £104.2m
EBITDA rose by 
37% to £14.2m
Cash Generation rose by 
54% to £12.1m
EPS rose by 
18% to 11.0p
Corporate Statement
Systems Union Group plc provides a comprehensive global portfolio of Financial and
Performance Management solutions.
The Company, which is listed on the Alternative Investment Market (AIM) of the London
Stock Exchange, is committed to growth and to the continual development of solutions 
that improve an organisation’s ability to produce, consolidate, analyse and report financial 
and wider management information. In addition, its solutions enable today’s organisations 
to adopt a proactive approach to budgeting, planning and forecasting processes, crucial for 
the future success of any business.
The Group’s objective to remain the world’s leading mid-market provider of financial and
performance management solutions is supported by its expanding portfolio of truly global
products, its global scale and its global reach. This is combined with an international team
of staff and management and the financial resources necessary to further drive the business 
and its success. Areas of Operation
As one of the UK’s leading developers
of web sites and e-commerce systems,
REDtechnology.com offers a number
of complementary services including
24x7 hosting, online marketing and
reporting capabilities to small and
medium sized companies. The
company has around 400 customers
across a diverse range of markets
including the retail, publishing, media
and technology sectors.
Systems Union Offices
Partners Offices
Founded 20 years ago, Foundation
Systems specialises in the supply,
implementation and support of
integrated financial and business
management solutions based around
SunSystems software. Over 500
mid-market organisations, in both the
private and public sectors benefit
from Foundation’s proven track
record in the design, delivery and
support of functionally rich solutions
that address the needs of today’s
business rapidly, reliably and
cost effectively. 
Over 100,000 end users throughout
the UK benefit from Pegasus accounting
and business software solutions. Opera II,
Pegasus Payroll, XRL, Capital Gold and
Pegasus Instant Messenger are delivered
to small and medium sized businesses
through a network of over 130 Pegasus
Certified Partners and through Systems
Union offices around the world.
ncSoft is the author of a range
of web-based applications for
e-procurement, employee expenses
and time recording and resource
management. It has customers across
a wide range of sectors including
professional services, finance, banking,
public sector, pharmaceuticals, utilities
and manufacturing.  
Systems Union at a Glance
Today Systems Union Group plc comprises SunSystems, Vision,
MIS, Pegasus, ncSoft, REDtechnology.com and Foundation
Systems. The Group delivers its financial and performance
management solutions to over 50,000 customer sites in 194
countries around the world via its network of 46 corporate
offices in 19 countries and 500 reseller partners in 73 countries.
SunSystems is a flexible financial and
performance management software
solution used by a quarter of the
Fortune 500 and 75 of the FTSE100.
The SunSystems solution is available in
30 languages and it has the depth and
breadth of functionality to effectively
manage operations both locally and
globally. During the last 20 years
SunSystems has been implemented
in over 18,000 sites with in excess
of 100,000 end users.
SunSystems offers a unique
combination of flexible transactional
processing, powerful real-time
reporting and analysis capabilities
together with integrated business
analytics including planning, budgeting
and forecasting.
The SunSystems proposition comprises
a globally deployable solution with
rapid implementation, flexibility,
scalability and a low total cost of
ownership and it has become a leading
offering for mid market organisations
across the world.
The Vision Suite is a unique suite
of management reporting, analytical
processing, scheduling and alerting.
With over 100,000 end users in
158 countries the Vision suite enables
users to rapidly and cost effectively
generate reports and analyse data
from financial and other operational
systems in real-time.
MIS is a suite of business intelligence
and performance management
solutions that help companies exploit
data locked in their financial and
operational systems. Over 30,000 end
users globally use MIS solutions to help
plan, budget, forecast, consolidate and
manage their enterprise wide reporting
and analysis needs.
The MIS proposition is based on a
rapid implementation capability and
underpinned by the flexibility to extend
the solution to address a wide range of
business requirements, all based on the
same underlying framework.
_Cover.qxd  09/03/2005  17:00  Page 2 Systems Union Group plc Annual Report and Accounts 2004 1
IFC Corporate Statement
IFC Major Highlights of 2004
IFC Systems Union Group at a Glance
IFC Areas of Operation
2 Chairman’s Statement
3 Chief Executive Officer’s Review
12 Global Solutions, Operations and Infrastructure
16 Directors and Advisers
17 Directors’ Report 
19 Statement of Directors’ Responsibilities
20 Remuneration Report
21 Corporate Governance
23 Independent Auditors Report
24 Consolidated Profit & Loss Account
25 Consolidated Balance Sheet
26 Company Balance Sheet
27 Consolidated Cash Flow Statement
28 Consolidated Statement of Total Recognised 
Gains & Losses
28 Reconciliation of Movement in Shareholders’ Funds
29 Notes to the Accounts
44 Notice of Annual General Meeting
Contents
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Chairman’s Statement
Review
The enlarged Group has significantly
increased its modus operandi from the
original business model with revenue
of £0.6 million in 1999 to £104.2 million
in 2004. This corporate growth is the
direct result of the change in senior
management in 2000 and the transition
away from the original business model
that was listed on the Alternative
Investment Market of the London Stock
Exchange in December 1999. The
subsequent growth and considerable
improvement to both cash generation
and profitability has been achieved by
strategic acquisition and a clear focus
on all operations.
Today we are the proud owners and
operators of some of the best branded
products on the global stage with a
very powerful business in financial and
performance management. We can now
sell, distribute and implement high quality
software solutions in three prime activities
of financial management, reporting and
performance management that can be used
on a stand alone basis, or in conjunction
with other software applications.
Following three years of consolidation
of our financial management businesses
and our entry in December 2003 to
the business analysis and performance
management software markets with the
purchase of MIS AG, we entered 2004
with optimism. The Group further
strengthened its intellectual property
portfolio with the acquisition of Lasata
Software and ncSoft during the year,
which added dynamic reporting and
analysis, together with a range of
business management solutions.
The combination of these businesses and
the adoption of our open environment
are of considerable future value. The
benefits of the wider business focus
of the Group are already apparent and
will continue to benefit all stakeholders
as the synergies within the product
brands in the Systems Union portfolio
are promoted and realised. Spending
on a cohesive research and development
agenda and global support infrastructure
continues to underline the importance
the Company places on maintaining its
position as the leading global vendor of
Financial and Performance Management
solutions in its chosen market place.
Results
The Group has continued to grow and
improve its operations and profitability
by acquisition and by investing in its
existing businesses. 
Group revenues grew by 33 per cent
from £78.4 million in 2003 to £104.2
million in 2004. Earnings before interest,
tax, depreciation and amortisation of
intangibles for ongoing activities grew
by 37 per cent to £14.2 million from
£10.4 million. 
Adjusted earnings (as defined in the notes
to the financial statements) increased
by 23 per cent to £11.1 million from
£9.0 million in 2003. Similarly adjusted
earnings per share increased by 18 per
cent to 11.0p compared to 9.3p in 2003.
Dividend
As a result of the Group’s ongoing success
the Board is delighted to announce that it
is proposing an increase in overall dividends
for the year to 2.0p (2003: 1.0p). A final
dividend of 1.5p is proposed in addition
to the interim dividend of 0.5p
already paid. Payment will be made
on 26 May 2005 to shareholders on
the register on 22 April 2005.
Senior personnel
Tony Sweet, the chief financial officer,
will be leaving the Group with effect
from 30 June 2005 to pursue other
opportunities. A new finance director will
be appointed in due course. We would
like to thank Tony for his contribution to
the Company for the past two years and
wish him every success for the future.
Outlook
The Group now has an extensive global
presence and product profile. We remain
committed to growth, both organically
and by acquisition, and to the continued
enhancement of shareholder value.
Bob Morton
Chairman
28 February 2005
After a period of consolidation and strategic investment
in new businesses, Systems Union now has an unrivalled
portfolio of Financial and Performance Management solutions,
making it one of the leading global mid-market business
software vendors. The Group is well positioned to meet
the challenges of 2005 and beyond.
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£’000 £’000
Adjusted earnings 11,095 9,027
Amortisation – goodwill (5,224) (3,855)
Restructuring and similar charges (1,946) —
Profit on sale of fixed asset investment — 500
Unadjusted earnings 3,925 5,672
Systems Union Group plc Annual Report and Accounts 2004 3
Chief Executive Officer’s Review
Systems Union is committed to growth. With its comprehensive
portfolio of Financial and Performance Management solutions,
an extensive network of 46 offices in 19 countries, 500 reseller
partners in 73 countries and over 50,000 customer sites in 194
countries, the Group has extensive global reach, global scale
and global solutions.
We have continued our strategy of
making acquisitions to complement and
expand the Group’s product portfolio.
In June we acquired Lasata, an Australian
based provider of real-time reporting
and analysis software solutions. In that
month we also acquired ncSoft in the
UK, a specialist author and provider of
web-based applications for procurement,
time management and expenses
automation. In December 2004 the
Group acquired Quantum Accounting
in Ireland, which has now undergone
Major highlights of 2004:
 Adjusted Earnings increased to £11.1 million (unadjusted £3.9 million) from
£9.0 million (unadjusted £5.7 million), up 23%
 Adjusted EPS of 11.0p (unadjusted 3.9p) from 9.3p (unadjusted 5.8p), up 18%
 Revenue of £104.2 million, up 33%
 EBITDA from ongoing activities of £14.2 million, up 37%
 Cash generation strong: operating cash flow for the year of £12.1 million,
up 54%
 Final dividend of 1.5p proposed, giving a total of 2.0p for the year (2003: 1.0p)
 Acquisition of Lasata Pty Ltd, ncSoft Limited and Quantum Accounting Limited
The results for 2004 demonstrate the
success of the Company’s strategy of
combining cost control and improved
efficiency with strategically important
acquisitions. EBITDA before restructuring
charges increased by 37 per cent thus
outstripping the 33 per cent increase in
revenues and resulting in another year
of improved profitability for the Group. 
In 2004 the Company built on its
strengths as a global provider of financial
management, reporting and performance
management solutions. We invested
extensively in the development, sales
and marketing of an integrated portfolio
of solutions that meet the complex
information needs of organisations today.
We believe that this portfolio is unrivalled
in the mid-market and offers users a
combination of rich functionality and low
total cost of ownership combined with
ease of use, deployment and customisation.
The Group is already benefiting from
the success of this integration of our
products into one solution suite in an
open environment. We have recorded
significant wins in a diverse range of
industry sectors around the world
including not-for-profit, oil and gas,
insurance, retail, housing associations,
manufacturing, hospitality and leisure
and financial services. 
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a change of name to Systems Union
Ireland and will sell the full Systems
Union portfolio of financial and
performance management solutions.
Our entry into new and emerging
markets was strengthened with the
opening of our first regional office in
Bangkok, Thailand. We already have over
150 customer sites in Thailand and by
establishing a direct operation in the
country we will be able to better support
our customers while taking advantage
of the rapidly growing economy and
commercial opportunities that are
emerging in this important region
of Asia Pacific. 
In the past Systems Union has been
primarily a provider of financial
management systems – SunSystems and
Pegasus; the acquisitions of MIS and
Lasata have enabled the Group to offer
a much wider range of reporting and
performance management products.
It will now focus on selling its full range
of products irrespective of whether its
customer currently uses Pegasus or
SunSystems. In future, other than in
exceptional circumstances such as for
Pegasus in the UK and MIS in Germanic
regions, all sales operations will trade
as Systems Union, supplying all of the
financial and performance management
solutions owned by the Group. The
product brands of the software author
companies within the Group will be
retained. Consistent with this approach,
the Group has now been restructured into
four regions globally and each region is
focussed on selling and implementing the
full range of the Group’s global solutions.
The growth and success of the Group
has been recognised with some prestigious
awards. Most notably the Deloitte
Technology rankings listed Systems Union
in third place in its Fast 50 for London &
South East England and fifth in its Fast
500 for Europe, the Middle East and
Africa. These rankings are based on
percentage growth over a five-year
period, from 1999–2003. 
Financial review
Group turnover of £104.2 million
was 32.9 per cent higher than in 2003
reflecting the increase in the scale of the
Group’s operations as a result of the
acquisition strategy that commenced in
the fourth quarter of 2003. Acquisitions in
2004 contributed £2.6 million to revenues
for the year. Group revenues were
impacted by adverse currency fluctuations
in the year – at 2003 rates of exchange
revenues would have been approximately
£2 million higher than reported.
Licence revenues at £29.1 million
increased by 21.3 per cent over the
previous year and maintenance revenues
of £45.1 million were 26.3 per cent
higher. The most significant increase was
in services revenues, which increased by
60.2 per cent, reflecting not only the
strength of MIS and Foundation Systems
in this aspect of our business but also an
improved performance in our consulting
business in the Americas and Asia Pacific.
During 2004 the Group has continued
its policy of closely monitoring costs and
efficiency in all its businesses. As a result,
following completion of the post
acquisition review of MIS, the Group’s
2004 results include a restructuring charge
of £1.9 million to lower the cost base in
that business. This charge also includes
the costs of closing Chorus, a loss making
non-core subsidiary of MIS, as well as the
costs of merging certain of the continental
European operations of SunSystems with
MIS operations to reduce infrastructure
and administration costs.
Group EBITDA before restructuring
charges increased by 37.1 per cent over
2003 to £14.2 million. As a result of
continued strict cost control in all areas,
as well as the restructuring measures,
2004 saw a further improvement in the
Group’s EBITDA margin, which for the
ongoing business improved to 13.8 per
cent of revenues compared to 13.2 per
cent in 2003.
The net interest charge for the year
of £0.3 million (against net interest
receivable last year of £0.6 million)
reflects the impact of the £15.0 million
medium-term loan for a full year,
together with a continuation of the
Group’s acquisition policy in 2004. 
The underlying growth in Group profit
before tax, excluding non-recurring
items, was 16.6 per cent. However the
effect of non-recurring items resulted in
Group profit before tax of £4.6 million.
Chief Executive Officer’s Review continued
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The Group’s low tax rate reflects
the benefit of corporate tax losses
brought forward.
Cash balances at 31 December 2004
were £16.5 million (2003: £19.6 million).
Cash flow from operating activities
increased by 53.8 per cent to £12.1
million. During 2004 the Group spent
£12.3 million on acquisitions, net of cash
in the acquired businesses. The Group
held an interest in 7.8 million of its
own shares at 31 December 2004
(2003: 9.4 million). As part consideration
for the acquisition of Lasata Pty Ltd, the
Group transferred 1.5 million of those
shares. The Group also transferred
0.1 million of these shares to satisfy
share option exercises.
Dividends paid during 2004 amounted to
£1.5 million. In addition, the directors are
proposing a final dividend of 1.5p per share,
which will absorb cash of £1.5 million.
Operational review
The ever-changing competitive, regulatory
and commercial landscape is placing
challenging demands on organisations
around the world. The increasing need
to provide comprehensive, transparent,
accurate and timely financial and
performance management information to
stakeholders is becoming paramount. The
successful strategic vision, direction and
development of a business, and ultimately
its profitability, hinges on an organisation’s
ability to record and analyse historic
performance while being able to plan,
budget and forecast for the future.
Businesses are recognising the
importance of data held in disparate
business applications and are increasingly
demanding integrated systems that will
consolidate data into a single unified
view, deliver information in a consistent
format and offer extensive analysis,
planning and reporting capabilities.
Systems Union understands this changing
landscape. We have recognised that
finance executives need to move away
from purely transactional processing on
a reactive basis to utilising both financial
and operational information to drive
their businesses forward proactively. We
have responded with the formation of a
comprehensive financial and performance
management solution portfolio resulting
from our acquisition strategy that will
meet these needs and help organisations
to more effectively collect, organise,
understand, plot, plan, communicate
and act on key management information
from around the business. 
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Chief Executive Officer’s Review continued
Leveraging our global infrastructure, our
commercial and technical expertise, our
understanding of market dynamics and
our clear focus on sales and marketing,
solutions from all Group companies
have now been brought together as an
integrated suite of applications. These
solutions are successfully being delivered
to users around the world through the
Group’s direct and indirect sales channels,
and via our network of strategic
alliance partners. 
To maximise these opportunities
from our integrated solutions suite, our
organisational focus will now be on four
geographic regions rather than product
families or legal structure. In addition,
processes have been reorganised and
new senior appointments made to align
the Group’s infrastructure and support
functions to a new unified structure,
in particular to ensure that customer
support and research and development
have a single point of focus for the entire
Group to deliver the road map on a
global basis. 
Support & services
Systems Union remains committed to
the provision of the highest possible
standards of support and services to its
expanding user base around the world.
Our global support network consists
of the Support Supercentre – at our
headquarters in Farnborough, UK –
and the Regional Support Centre based
in Shanghai, China, as well as local
helpdesks in offices around the world. 
2004 saw further developments in the
level of global support we can offer to
our partners and customers. A global
IP telephony system routes calls from
customers around the world to the best
available consultant who speaks their
local language. Utilising skills-based
routing technology, the system allows
each call to a helpdesk to be routed to
the most appropriately skilled consultant
available regardless of location. Call details
are recorded in a centralised database
to ensure that support consultants have
access to comprehensive and up-to-date
status reports on all customer calls and
can therefore address user needs
promptly and accurately. In addition, the
Group offers a ‘follow the sun’ support
service that diverts calls placed out of
office hours to the nearest open
support desk. 
These support systems ensure that
customers always receive a highly
efficient, personal and timely level of
support from Systems Union irrespective
of the time of day their call is placed, or
the location from which they call.
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SunSystems
2004 saw Systems Union invest in the
further enhancement of its core financial
management solution SunSystems, as
well as its integration with solutions
from other Group companies. Most
significantly the launch of SunSystems
exfm demonstrated the technical and
commercial expertise of the Group
companies. Four Group businesses
contributed to this fully integrated suite
of software applications that was
launched in September 2004. SunSystems
exfm consists of SunSystems Financials,
SunSystems Budgeting & Forecasting
(based on MIS technology), SunSystems
Vision (created by Lasata) and a portal
(produced by REDtechnology.com).
The first sale for a successful event
management company was secured in
October 2004. Additional successes have
been secured within the financial services
sector, manufacturing, mining and
automobile industries. 
With over 400 insurance companies
around the world benefiting from its
financial management solutions, Systems
Union further consolidated its position
as a leading supplier of software for the
insurance sector in June 2004 when it
launched a unique insurance accounting
solution, which includes pay-as-paid
transaction management, principal-to-
principal accounting functionality and the
ability to operate and report with a fourth
variable transaction currency. Furthermore,
SunSystems is able to produce
consolidated accounts automatically
without the need to gather spreadsheets
and consolidate data from disparate
systems. Such comprehensive and unique
functionality will further strengthen the
existing SunSystems insurance proposition,
which is already the solution of choice
for insurance providers such as Sino Life,
M&G, MetLife and AXIS Specialty.
The hospitality sector remains a core
focus for the Group and the launch
of SunSystems Hospitality Performance
Management (HPM) in July provided an
integrated, front-and-back office, analytics
solution for the sector. HPM has the
capability to deliver planning and reporting
functionality, automating the budgeting
and planning operations of any hospitality
company by combining the financial
planning process with other relevant data
sources. Finance teams can derive prompt
cost and productivity benefits from its
ability to centralise control of all budgeting
and planning cycles. Hilton International
Americas is the first company to initiate
deployment of the product across all of
its hotels in the Americas.
In addition to our sales successes the
strength of our solution portfolio was
recognised in some of the leading award
schemes around the world. Most notably
we achieved finalist status for our
SunSystems exfm solution in the
Enterprise Software Package of the Year
in the 2004 Accountancy Age awards in
the UK. We were also ranked number 6
in the Softwaremag.com list of global ERP
vendors with a US presence. The success
of our financial management solution was
also recognised in the Americas when we
were among the top 50 in the influential
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Chief Executive Officer’s Review continued
DM Review Top 100 survey along
with other industry giants. 
MIS 
MIS has maintained its position as one
of the leading providers of business
intelligence (BI) solutions with particular
strength in the Germanic region. Indeed
market analyst Meta Group named MIS
as the most well known BI vendor in
Germany. It has enjoyed notable sales
successes with some leading companies
including BP Shipping, Australian Red
Cross, Skye Pharma and German rail
company, Deutsche Bahn. 
From a technical perspective MIS has
continued to develop its performance
management portfolio and during the
year has enhanced its functionality with
the launch of DecisionWare 5. This new
version offers increased scalability and full
integration capabilities, while MIS Zeus
has been enhanced with an inter-company
matching service, which will automate
workflow processes between subsidiaries
and improves operational efficiencies
promoting faster consolidation and closing
of accounts. Another key milestone for
the Group was the launch of the first
Chinese version of MIS products. 
One of the most exciting and significant
endorsements of MIS and its solutions
came from the OLAP (On-Line Analytical
Processing) Survey 4. This survey, which
was conducted by an independent
analyst and reviewed 971 OLAP and
BI implementations in 51 countries,
concluded that MIS solutions were among
the most successful in the world. MIS
Alea, a real-time, multi-dimensional OLAP
database with seamless integration into
Microsoft Excel was one of 40 products
evaluated in the survey and was ranked
number one for performance and rapid
proof of concept, which according to the
survey have the strongest impact on the
success of an implementation. In addition,
the functional richness, rapid query and
calculation performance and the ease of
use offered by the solution also scored
extremely highly. Indeed, MIS customers
reported fewer than average technical
problems and were also the least likely to
encounter barriers to wider deployment
of their applications.
Vision
With over 100,000 end users around
the world, Vision offers extensive
reporting on real-time data and live
drill-down across multiple software
products including SunSystems and
Pegasus, together with a number of
competing financial management
products including ACCPAC, Microsoft
Business Solutions and SAP Business One.
This ability to integrate with multiple
authors and business applications
strengthens its market position and
opens up new opportunities to extend
the solution offering into previously
untargeted markets.
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Another key achievement has been the
successful sales and marketing of its F9
solution across North America. This
simple but highly effective report writing
tool has significant brand equity, a large
user base and long standing relationships
with major financial systems vendors
in North America. Aimed at smaller
enterprises the development and support
of this product will continue with the
product being integrated with other
complementary products from within
the Systems Union portfolio.
Vision’s unique Serduct technology, which
enables organisations to interface the rich
pan application reporting and analytical
capabilities of the Vision suite with other
related line of business applications, is
being extensively developed and is
delivering quantifiable business benefits
to users around the world. 
Pegasus
Today Pegasus is one of the UK’s leading
providers of accounting and payroll
solutions to small and medium sized
businesses. Indeed, in association with its
130 Certified Partners, Pegasus delivers
solutions to over 100,000 end users
spread across the UK and Ireland.
The company has continued to
consolidate its position in its core market
place and will further enhance this
through the forthcoming launch of a
Microsoft SQL Server version of Opera II.
In February 2004 Pegasus enhanced the
reporting and analysis capabilities of
Opera II with the launch of Version 3,
making accounting, payroll and business
information more accessible to a wider
audience. This development was
supported by the launch of an enterprise
version and a small business version in
June 2004. In addition, the Inland
Revenue accredited Pegasus Payroll in
February 2004. This certification enables
users to be confident that their chosen
payroll solution complies with increasingly
stringent legislative requirements and that
it has the necessary functionality required
for complex payroll transactions. 
Underpinning the solution excellence of
the Pegasus suite is the award winning
support and training services that Pegasus
delivers to its partners and customers.
During 2004 a record number of channel
professionals were trained in Opera II
bringing the total to over 450 in the
UK. Customer demand for web-based
technical support has been met with
the provision of an online support
service available around the clock and
a programme of webinars ensures that
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Chief Executive Officer’s Review continued
technical updates are communicated to
the Pegasus community around the world,
keeping partners up to date with key
developments within the Pegasus portfolio.
REDtechnology.com
2004 saw REDtechnology.com invest
further in the development of ConductIT,
its flagship content management solution.
Indeed RED’s ConductIT portal has been
integrated with, and forms an integral
component of, the SunSystems exfm
proposition. ConductIT and its portal
capabilities enhance the efficiency with
which organisations can upload, maintain,
update and distribute website information
for use by internal and external
stakeholders. The comprehensive
functionality, ease of use, low risk and
low total cost of ownership offered by
REDtechnology.com combine to make
it the solution provider of choice for a
variety of companies across a diverse
range of industries and sectors. RED’s
ongoing success has been demonstrated
through a number of contract wins
achieved directly and via the company’s
OEM partner network. These wins
include The Gift Gourmet Company,
Bridisco and Tie Rack.
Foundation Systems
Since becoming part of Systems
Union, Foundation Systems has further
strengthened its position in the market
place and is today a leading specialist in
the supply, implementation and support
of integrated financial and business
management solutions based around
SunSystems software. Notable contract
wins were secured with The National
Theatre, Pembroke College, Cambridge
and Regent Exhibitions, which
represented the first global sale
of SunSystems exfm. 
2004 saw the company extend
its portfolio with the formation of
partnerships with vertical solution
providers including Causeway, a
provider of software solutions into the
construction industry. Foundation has
added Causeway’s market leading Project
Accounting to its proposition, further
extending the functionality of SunSystems
for construction firms.
In addition, Foundation is expanding
its expertise in the not-for-profit sector
through its partnership with ProTech,
who provides specialist subscription
management software solutions for
recording relationship, fundraising and
marketing requirements. 
ncSoft
Acquired by the Group in June 2004,
ncSoft is the author of a range of
web-based applications for e-procurement,
employee expenses and time recording
and resource management. The portfolio’s
open architecture ensures that all ncSoft
applications integrate with multiple
enterprise resource planning and
accounting packages. In November ncSoft
launched its e-Business Suite 4.1, which
has been designed for the mid-market
and provides authorised personnel with
the ability to access a range of employee
self-service applications through a single
web browser interface. Such capabilities
improve not only the efficiency of
procurement and workforce management
but also the way in which the information
generated can be assimilated, analysed
and reported. 
The strengths of ncSoft’s portfolio were
ably demonstrated by notable contract
wins with its procurement solution
with Wandle Housing Association,
Sanctuary Housing Association and
The National Theatre.
Staff
It was with great sadness that, in
October, we heard of the tragic death
of Peter Raue, founder and chief
executive officer of MIS. He made a
major contribution to the integration
of business intelligence software products
into Systems Union and his intelligence,
professionalism and good nature will be
greatly missed.
During 2004 we have not only
successfully integrated and expanded
_0_SYS_ARF.04.qxd  09/03/2005  16:56  Page 10 Systems Union Group plc Annual Report and Accounts 2004 11
our solutions portfolio but also our
management and staff, leveraging the
technical and commercial expertise of
our teams around the world. In addition
to expanding and integrating our sales
and marketing teams globally, we have
ensured that the infrastructure they need
to succeed is in place. Considerable
operational synergies are expected to
result from the new structure as well as
providing challenging opportunities for
our people. 
I would like to thank our management
and staff for their dedication, hard work
and professionalism and I look forward
to working with them all to continue our
growth in the coming year and beyond.
The future
The combination of our two divisions
into one business has already resulted
in an encouraging number of initial sales
of the newly introduced SunSystems
exfm product, further sales of business
intelligence solutions into the global
customer base and an improvement to
sales pipeline when compared to last
year. We are investing in additional sales,
marketing and consulting personnel
consistent with our growth strategy.
Our powerful Financial and Performance
Management portfolio is unequalled in
the global mid-market. This is reinforced
by the fact that the Group owns all of
the intellectual property across the whole
application suite and enables today’s
organisations to more effectively record,
consolidate, report and analyse financial
and operational information. We believe
these attributes combine to give us a
competitive edge and we look forward
to 2005 with confidence and enthusiasm.
Paul Coleman
Chief Executive Officer
28 February 2005
_0_SYS_ARF.04.qxd  09/03/2005  16:56  Page 11 12 Systems Union Group plc Annual Report and Accounts 2004
Global Solutions, Operations and Infrastructure
Our reputation has been built on
the strength of our core financial
management software, SunSystems
and Pegasus, upon which thousands of
companies rely to record, process and
report historical financial data. However,
we recognised that financial managers are
now demanding broader solutions that
enable them to be much more proactive
whilst at the same time retaining
efficiency in transactional processing
and reporting. They need to be able to
plan and forecast effectively and make
sure they adhere to the ever increasing
legislative requirements in terms of
transparency and auditability.
In order to meet this need we
acquired MIS and Lasata, which provide
a much wider range of reporting and
performance management products
for the Group. Lasata brought products
that report on real-time data across
multi-disciplined software and MIS
brought a range of performance
management solutions including
budgeting, forecasting, consolidation,
subsidiary and risk management.
We believe that no other mid-market
software company in the world has this
balance of financial and performance
management solutions under one roof.
A global perspective: Systems Union’s chief executive officer Paul Coleman focuses on the
integration of the Group – its world-class software solutions, its operations and its infrastructure.
Systems Union is going for growth: 2004 saw the Group invest
in the integration of its core financial management portfolio
with its business intelligence and pan application reporting
capabilities. The culmination of this effort is an integrated
financial and performance management portfolio that meets
the more sophisticated needs of today’s financial executives.
_0_SYS_ARF.04.qxd  09/03/2005  16:57  Page 12 Systems Union Group plc Annual Report and Accounts 2004 13
We believe that the integration of
our global operations, solutions and
infrastructure gives us greater synergies
between the global brands within
Systems Union. We own the intellectual
property of the SunSystems, MIS, Vision,
Pegasus, ncSoft and REDtechnology.com
solutions. They comprise our core value
proposition and our team of consultants
and support staff is equipped with the
technical skills necessary to support the
entire portfolio. This places us in a strong
competitive position in the mid-market
and we are building on this position by
sharing and extending the research and
development, support knowledge and
expertise we possess as a Group. 
The global management and cohesion
of our product roadmaps is bringing
many benefits and strategic developments
including a common framework for all
new applications and the use of the latest
web based architectures. Not only will
our users benefit from innovation and
flexibility in the selection of their Systems
Union solution, but we will also achieve
greater operational efficiency as
an author.
The Group remains committed to
developing world-class solutions and
is also focussed on backing it up with
a world-class support network. This is
crucial if we are to further strengthen
our position in the global market and we
have invested considerably in these areas
of our operations. Through our network
of local, national and international 
support help desks, our investment in
a state of the art global IP telephony
system and our skills based call routing
process, our partners and users are
able to access professional, timely and
comprehensive support at any time,
in any language and from any location
around the world. 
Technical innovation and world-class support for customers:
We continuously invest in our R&D and support infrastructure
to ensure our customers gain maximum benefit from our
solutions. We have to ensure that our solutions remain
innovative in order to maintain our competitive edge and
that we always offer the best levels of support to our
customers – whenever and wherever they want it.
_0_SYS_ARF.04.qxd  09/03/2005  16:57  Page 13 14 Systems Union Group plc Annual Report and Accounts 2004
Global Solutions, Operations and Infrastructure continued
One of the key strengths of our delivery
model is our ability to work so successfully
with our global network of partners,
whether they are value added resellers,
strategic alliances or OEM partners.
We have built and retained a profitable
and productive network of partners,
which successfully co-exists with and
complements our direct sales teams. 
The underlying driver for such successful
partnering and collaboration is to achieve
together what neither can do nor should
do apart. At the heart of our success lies
the common motivation and commitment
of all our partners to the delivery of
highly flexible and extensible solutions
to users around the world. With our
partners we appreciate the cumulative
benefits of working as a global team
to extend our global footprint and this,
combined with the technical strengths of
our solutions, engenders a determination
to sell to, support and maintain a market
leading user base. 
Our OEM, channel and alliance partners
operate in distinctly separate markets.
Each offers a blend of comprehensive
market presence, unrivalled brand
expertise, extensive technical skills,
the ability to manage and implement
complex sales into specialist markets and
that all important global reach. These
attributes complement the Group’s direct
route to market and ensure the ongoing
success and profitability of both our
direct business and that of our partners. 
Extending the Systems Union proposition: Systems Union
is more than just the Company, its products and employees.
We have over 500 reseller partners in 73 countries, a large
number of alliance partners and an unrivalled global coverage
in the mid-market. 
_0_SYS_ARF.04.qxd  09/03/2005  16:58  Page 14 Global scale, global reach, global solutions: Think Systems
Union, think global. Our comprehensive range of complementary
products is available in many languages and currencies,
is multi GAAP and meets national and international regulatory
requirements irrespective of location. Offices, partners and
alliances in all parts of the world support this effort. 
With our enhanced solution portfolio
and by working with our strategic and
OEM partners we have developed a
strong proposition to take to the diverse
market and industry sectors across the
world. For example we have compelling
insurance, construction, manufacturing
and public sector financial and
performance management solutions
that are delivering a rapid return on
investment to a growing number of users.
In addition, we understand the pressures
of legislation such as Sarbanes Oxley and
International Financial Reporting Standards
(IFRS) and have responded accordingly.
We are able to offer an IFRS compliant
view of core finance and management data
that will help organisations address the
need to provide highly transparent and
accurate information to internal and
external stakeholders.
We are still focussed on expanding
our operations into new and emerging
markets and 2004 saw us make
considerable progress in key regions.
The entry of many Eastern European
countries into the European Union has
resulted in businesses throughout the
region looking to update their existing
financial and performance management
software. We are increasing our
investment in this region to take
advantage of the new opportunities
arising from this development. 
The rapid economic growth in Dubai
represents another important market for
our vertical solutions such as SunSystems
Hospitality Performance Management.
With the considerable investment in the
region, for example the Palm Island and
World developments, we have a significant
opportunity to build on our success
throughout the area.
Systems Union Group plc Annual Report and Accounts 2004 15
Our multi-language, multi-currency
capabilities, combined with a scalable
and fully integrated solution, have further
extended our success across Asia Pacific.
For example, China remains a key area of
focus for us and we are investing heavily
in the strengthening of the sales, pre-sales
and support services we offer from our
office in Shanghai. Our local language
versions and extensive support services
are opening up new opportunities for
us across China and the surrounding
regions. We also opened a new direct
operation in Thailand in 2004 and we
are already seeing an upturn in business
in this territory. 
_0_SYS_ARF.04.qxd  09/03/2005  16:58  Page 15 16 Systems Union Group plc Annual Report and Accounts 2004
Directors and Advisers
Directors A L R Morton (Non-executive Chairman)
P J Coleman (Chief Executive Officer)
A C S Sweet (Chief Financial Officer)
J L Pemberton (Non-executive director)
Company Secretary P G Larking
Registered Office Systems Union House
1 Lakeside Road
Aerospace Centre
Farnborough
Hampshire GU14 6XP
Registered No: 2735281
Nominated Adviser WestLB AG
Woolgate Exchange
25 Basinghall Street
London EC2V 5HA
Joint Nominated Broker Panmure Gordon
(a division of Lazard & Co. Limited)
50 Stratton Street
London W1J 8LL
Joint Nominated Broker KBC Peel Hunt Ltd
111 Old Broad Street
London EC2N 1PH
Auditors KPMG Audit Plc
Arlington Business Park
Theale, Reading RG7 4SD
Solicitors Allen & Overy
One New Change
London EC4M 9QQ
Burges Salmon
Narrow Quay House
Narrow Quay
Bristol BS1 4AH
Bankers Barclays Bank plc
54 Lombard Street
London EC3V 9EX
Registrars Capita Registrars
The Registry
34 Beckenham Road
Beckenham, Kent BR3 4TU
_0_SYS_ARF.04.qxd  09/03/2005  16:58  Page 16 Systems Union Group plc Annual Report and Accounts 2004 17
Directors’ Report
The directors present their Annual Report together with the audited consolidated financial statements for the year ended
31 December 2004. 
Principal activities and business review
The principal activity of the Group is the design, development, production and distribution of Financial and Performance
Management software, sold under the SunSystems, MIS, Vision, ncSoft and Pegasus brands to international and domestic markets.
E-commerce, Internet hosting and support services are sold through REDtechnology.com. 
A review of the Group’s operations is included within the Chief Executive Officer’s Review on pages 3 to 11. The Chairman
comments on the results in his statement on page 2.
Financial results and dividends
Details of the results for the year ended 31 December 2004 are set out on pages 24 to 43 of the report and further details are
contained in the Chairman’s Statement and the Chief Executive Officer’s Review.
Turnover for the year was £104,230,000 (2003: £78,427,000) and profit after taxation and restructuring charges of £1,946,000 was
£3,925,000 (2003: £5,672,000).
An interim dividend of 0.5 pence per share (2003: nil) was paid to shareholders on 12 October 2004. The directors are proposing
a final dividend of 1.5 pence per share (2003: 1.0 pence) payable on 26 May 2005 to shareholders on the register on 22 April 2005. 
Product development
Expenditure on research & development was £14,888,000 (2003: £10,924,000). The Company continues to attach considerable
importance to the updating of its products, either by internal development or the purchase of external software products where
this is more appropriate.
Directors and their interests
The directors who have served during the year are:
A L R Morton
P J Coleman
A C S Sweet
J L Pemberton
Bob Morton (63) has been non-executive chairman since 1995, when he first invested in the Company. Mr Morton is the chairman
of a number of companies including Harrier Group plc, Clarity Commerce Solutions plc, Vislink plc, MacLellan Group plc and
Armour Group plc.
Paul Coleman (53) has over 35 years experience with wide ranging knowledge of a number of industries both in the UK and
internationally. Prior to joining the Systems Union Group in 2000, he was the group finance director and investment analyst at the
Carlisle Group plc and European finance director at the international security company ADT Group plc.
Tony Sweet (50) was a partner at PricewaterhouseCoopers. He has experience as an audit partner and on mergers & acquisitions
in the UK and Europe. 
John Pemberton (56) was the founder and major shareholder of Systems Union Group Limited prior to its incorporation into the
enlarged Group. He was the architect of the SunSystems financial & business management software, which forms the cornerstone
of the business interests of the Group. He is a graduate of the London School of Economics.
The beneficial and family interests of the directors in the share capital of the Company, as recorded in the register maintained by
the Company in accordance with the provisions of the Companies Act 1985, were as follows:
At At
31 December 2004 1 January 2004
5 pence 5 pence
ordinary shares ordinary shares
A L R Morton 10,860,520 10,860,520
P J Coleman 175,000 150,000
A C S Sweet 10,000 10,000
J L Pemberton 4,846,308 4,846,308
P J Coleman retires from the Board in accordance with the Company’s Articles of Association and offers himself for re-election. 18 Systems Union Group plc Annual Report and Accounts 2004
Substantial shareholdings
Save for the interests of A L R Morton and J L Pemberton, which are noted above, the directors are aware of the following who
are interested directly or indirectly in 3% or more of the Company’s shares.
Number Percentage of
of shares share capital
M & G Investment Management Limited 10,303,382 9.58
Jupiter Asset Management Limited 8,549,114 7.95
F & C Asset Management plc 5,910,074 5.50
Artemis Investment Management Limited 5,585,000 5.20
Unicorn Asset Management Limited 5,350,577 4.98
Hermes Administration Services Limited 3,975,000 3.70
Henderson Global Investors Limited 3,510,918 3.27
The Company has an interest in 7.8 million shares, which are held in trust for the benefit of the Group. This holding represents
7.2% of the current issued share capital of the Company. 
Acquisitions and disposals
On 5 February 2004 MIS AG sold its 49% interest in the loss-making business of MIS Asia Co Limited, based in Seoul, South Korea
to local management (the majority shareholder) for nil consideration. The Group’s carrying value of this investment was nil.
On 2 March 2004 Systems Union Pty Limited acquired MIS AG Australia Pty Limited, which is located in Sydney and was previously
an independent partner. The consideration, including acquisition costs, was £174,000 paid in cash. 
On 25 March 2004 MIS AG acquired the remaining 49.5% of MIS AG Italia Srl for a consideration of €1. On the same date MIS
AG disposed of its 50.5% interest in Auron Management Consultants Srl for a consideration of €1.
On 31 May 2004 Systems Union Inc acquired certain assets and liabilities of MIS AG Inc for a nominal consideration. On that date
MIS AG Inc sold the 49% interest it held to its joint venture partner for US$1.
On 10 June 2004 the Company acquired the customer base, assets and intellectual property rights of ncSoft Limited, based in
London. ncSoft is an author and provider of business and financial systems. The consideration, including acquisition costs and the
assumption of liabilities, was £778,000 of which £340,000 was paid in cash.
On 18 June 2004 MIS AG disposed of its 49% interest in MIS Brazil for 1 Real.
On 30 June 2004 the Company acquired Lasata Pty Ltd, a leading provider of business intelligence software and long standing
provider of reporting and analytical tools to the Group. The consideration, including acquisition costs, comprised a payment in cash
of £8,993,000 and the transfer of 1.5 million of the Company’s own shares, valued at £1,703,000, together with an option over
1 million shares in the Company which are capable of exercise at benchmarked prices between 30 June 2006 and 30 June 2014.
Alternatively the option may be surrendered for cash of £350,000 or for 318,182 shares in July 2005.
On 10 December 2004 the loss-making business of Chorus Gesellschaft fur Informations – und – Kommunikationstechnologie mbH
ceased and all operations were terminated.
On 22 December 2004 the Company acquired Quantum Solutions Holding Company Limited, a value added reseller of Pegasus
and SunSystems software, based in Dublin. The consideration, including acquisition costs, was £1,479,000 payable in cash of which
£398,000 is payable on agreement of completion accounts, anticipated to be in March 2005.
Employees
Every effort is made to keep all staff informed and involved in the operations and progress of the Group. This is achieved through
the use of electronic communications, staff briefings and newsletters. It is the Group’s aim that recruitment and development of staff
should be determined solely on ability and other relevant requirements of the job. Disabled persons and those who become
disabled are given the same consideration as others and, depending on their skills, will enjoy the same prospects as other staff.
The Group’s policies on Health & Safety are continually under review, ensuring that current practices comply with the laws
applicable in the countries in which we operate.
Payment of suppliers
The Group agrees appropriate terms & conditions individually with its suppliers. It seeks to abide by these agreed terms provided that
the supplier has also complied with them. The number of creditors days at 31 December 2004 was 45 (31 December 2003: 42 days).
Directors’ Report continued Systems Union Group plc Annual Report and Accounts 2004 19
Donations
There were no political donations during the year. Donations of a charitable nature amounted to £18,558 (2003: £5,010).
Annual General Meeting
The Annual General Meeting of the Company will be held at the Registered Office at 12.30 pm on 14 April 2005. The Notice
of Meeting, detailing the Ordinary and Special Business to be conducted is set out on page 44 to this report. Shareholders will be
asked to approve resolutions 5 to 7 as Special Business. These resolutions have become routine business at the Annual General
Meeting of most public companies, including Systems Union Group plc, and are fully detailed in the Notice of Meeting.
Auditors
A resolution to re-appoint KPMG Audit Plc as auditors to the Company, at a level of remuneration to be agreed by the directors,
will be put to shareholders at the Annual General Meeting.
By Order of the Board
P G Larking
Secretary
28 February 2005
Company law requires the directors to prepare financial statements for each financial year, which give a true and fair view of the
state of affairs of the Company and Group and of the profit or loss for that period. In preparing those financial statements, the
directors are required to:
 select suitable accounting policies and then apply them consistently;
 make judgements and estimates that are reasonable and prudent;
 state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained
in the financial statements;
 prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue
in business.
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the
financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 1985.
They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to
prevent and detect fraud and other irregularities.
Statement of Directors’ Responsibilities 20 Systems Union Group plc Annual Report and Accounts 2004
Policy on remuneration of directors and senior management
Remuneration of the executive directors is agreed by the Remuneration Committee. Terms of appointment of senior management
are approved by the chief executive officer. Policies are designed to attract, motivate and retain high calibre individuals and to
reward them for enhancing value to shareholders. 
Salary and other benefits
Salaries are reviewed periodically and have regard to remuneration packages of similar public companies operating in the computer
services industry. Policies concerning other employment benefits are reviewed on a regular basis.
Bonus
At the outset of each financial year, the Remuneration Committee agrees an annual bonus target for the executive directors.
Certain other senior staff have bonus arrangements, which are dependent on the performance of the Group and the individual.
Share options
The Company operates an Inland Revenue Approved share option scheme, from which the grants of Approved, Unapproved and
Super options are made. The Company has granted share options to staff at all levels and details of the options outstanding are set
out in note 18 of the financial statements. Details of the options outstanding for directors are given in this report.
Options are granted and exercised pursuant to the Rules of the scheme and in accordance with the instructions of the
Remuneration Committee. The scheme is administered by the company secretary.
Approved and Unapproved options are termed Ordinary options and are exercisable over a seven year period, three years after
date of grant. 
Super options vest in proportions of one third of each grant on an annual basis over a three year period, subject to meeting
performance criteria set by the Remuneration Committee. In the event the vesting criteria are not met they will be capable of
vesting in a future period. The vesting criteria are set annually by the Remuneration Committee. These options are capable of
exercise over a seven year period, three years after the date of grant, in tranches of 25% of the cumulative number of vested
options. Exercises may only take place at six monthly intervals until 100% of options are capable of exercise. Once 100% are
available for exercise they can be exercised in undefined proportions up until ten years from the date of grant.
Pensions
The Company makes a contribution on behalf of the executive directors to a personal pension scheme of their choice. Such
contributions represent 10% of their basic salary. Defined contributions are made to personal pension plans for other staff
within the Group. In some Group companies, the company contribution is dependent upon participating staff making a
personal contribution.
Directors’ remuneration
Salary Performance Benefits Pension 
and fees bonus in kind contributions 2004 2003
£ £ £ £ £ £
A L R Morton* 40,000 — — — 40,000 30,000
P J Coleman 275,000 137,500 27,228 27,500 467,228 488,729
A C S Sweet 137,500 40,000 12,992 13,750 204,242 234,912
J L Pemberton* 25,000 — — — 25,000 20,000
477,500 177,500 40,220 41,250 736,470 773,641
* Non-executive and member of the Audit and Remuneration Committees
Directors’ service agreements
A L R Morton, P J Coleman, A C S Sweet and J L Pemberton each has an agreement with the Company capable of termination
on 6, 12, 6 and 3 months’ notice, respectively. 
In the event of a takeover of the Company, Mr Coleman’s notice period is increased to 24 months. Additionally he will be entitled
to a payment based on the capital appreciation of 5,000,000 ordinary shares above a base point of 90 pence per share. 
Remuneration Report Directors’ share options
The executive directors have options granted under the Systems Union Group plc Employee Share Option Scheme (1999). The
conditions and status of the option grants are as follows:
Mr Coleman was granted 2,000,000 Super options on 13 December 2000 at 61.5 pence. These options have all vested as at the
date of this report and are capable of exercise in accordance with the “Share options” note above. In addition, Mr Coleman has
500,000 Ordinary options, granted on 18 March 2002 at 90.5 pence. These options are capable of exercise between 18 March 2005
and 18 March 2012.
Mr Sweet was granted 400,000 Super options on 5 December 2002 at 70.0 pence. 266,667 of these options have vested as at the
date of this report. In addition, Mr Sweet has 100,000 Ordinary options granted on 5 December 2002 at 70.0 pence. A proportion
of these options, together with all vested Super options are capable of exercise within six months of Mr Sweet leaving the Company.
The directors are responsible for the Company’s policy on Corporate Governance. The Company supports the Principles of Good
Governance and the Code of Best Practice (“the Combined Code”).
Whilst the Company is not required to comply with the provisions of the Combined Code, it has chosen to make the following
voluntary disclosures.
Board and management reporting
The Board currently comprises the chief executive officer, the chief financial officer, the non-executive chairman and one other
non-executive director and meets regularly throughout the year. The Board has adopted a schedule of matters to be specifically
reserved for its decision, in accordance with the provisions of the Combined Code.
Each operating company holds regular board of management meetings at which it considers its performance measured against
predetermined budgets. The management continually update operating forecasts and analyse key performance indicators. The
Group Board carefully reviews a summary of these reports, together with Group consolidations and cash flows at its monthly
meetings.
Directors’ remuneration
The Board has established a Remuneration Committee comprising the chairman and the non-executive director. Details of the
Company’s remuneration policy are contained in the Remuneration Report on pages 20 to 21. The Committee makes its decisions
following consultation with the chief executive officer and has access to external professional advice if required.
Accountability and audit
The Board seeks to ensure that its Annual Report and financial statements provide a balanced and concise assessment of the
Company’s position. The Board has established an Audit Committee comprising the chairman and the non-executive director.
This Committee meets as necessary and provides a forum for the non-executive directors to meet with the external auditor.
Internal control
The directors are responsible for the systems of internal control. Although no system of internal control can provide absolute
assurance against material misstatement or loss, the Group’s systems are designed to provide the directors with reasonable
assurance that problems are identified on a timely basis and dealt with appropriately. During the year progress has been made
rolling out effective controls in existing and newly acquired subsidiaries. Effective management of risk remains a priority for the
Board. The key elements of the Group’s system of internal control are as follows:
Financial management
Detailed annual budgets are prepared for the Group and each operating company. These budgets are reviewed and agreed by
the Board and actual performance is reported against these budgets on a regular basis. The Company has in place documented
authority levels for approving purchase orders, invoices and all bank transactions. Further information concerning financial risk
management is detailed in note 17 of the financial statements.
Systems Union Group plc Annual Report and Accounts 2004 21
Corporate Governance 22 Systems Union Group plc Annual Report and Accounts 2004
Internal control (continued)
Company management
The chief executive officer chairs a global management board for the Group comprising the regional chief executives, certain
subsidiary company directors and other Group executives with global responsibilities for sales, marketing, service support, product
development and finance. Additionally, there are regular meetings of a product strategy forum where the future direction of the
Group’s product offerings and routes to market are considered. 
Quality management and accreditations
The Company’s businesses are focussed on meeting the highest levels of customer satisfaction. Quality procedures for the
development of the products, services and maintenance support are documented and kept under constant review. 
Systems Union Holdings Limited’s management systems are certified BS EN ISO 9001:2000 and TickIT for marketing and sale
of SunSystems application packages, designed, developed, maintained and supported globally on open and proprietary computer
platforms in various national language versions, and the provision of associated consultancy and training.
MIS GmbH is a Microsoft Gold Certified Partner for Business Intelligence.
MIS and Pegasus Software Limited are Microsoft Gold Certified Partners for Software Products.
Business risks and computer systems
The Company has established controls and procedures over the security of the data held on its computer systems. Such
arrangements are tested regularly and reviewed. The Company has in place business continuity plans, off-site emergency facilities
and appropriate insurance policies.
Internal audit
The Company has an internal audit function whose role is to provide independent verification to the Board and to management
of the organisation’s day-to-day compliance activities. The audit plan used to control the scope and frequency of audits is risk-based.
Where any problems or opportunities for improvement are identified as the result of audits, they are logged formally and followed
through to completion. The internal audit function may also carry out ad-hoc reporting and investigations for the Board or for
individual directors and managers.
Environment and Corporate Social Responsibility 
The Company believes that environmental management is an integral part of normal operating practice. All Group companies seek
opportunities to maximise efficiency and to minimise waste and are committed to complying with the relevant environmental laws
and regulations in each country in which we operate. We have an Environmental Policy which is guided by the ISO 14000 family
of standards and by the United Nations Global Compact.
Dialogue with institutional shareholders
The directors of the Company, together with their advisers, hold regular meetings with the key institutional shareholders, thereby
helping to ensure that there is a mutual understanding of objectives.
Going concern
After making due and careful enquiry, the directors have formed a judgement at the time of approving the financial statements
that there is a reasonable expectation that the Company has adequate resources to continue in operational existence for the
foreseeable future. For this reason, the directors continue to adopt a “Going Concern” basis in preparing the financial statements.
Corporate Governance continued Systems Union Group plc Annual Report and Accounts 2004 23
Independent Auditors Report
Report of the independent auditors to the members of Systems Union Group plc
We have audited the financial statements on pages 24 to 43.
This report is made solely to the Company’s members, as a body, in accordance with section 235 of the Companies Act 1985.
Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state
to them in an auditors report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s members, as a body, for our audit work, for this report, 
or for the opinions we have formed.
Respective responsibilities of directors and auditors
The directors are responsible for preparing the Annual Report. As described on page 19, this includes the responsibility for
preparing the financial statements in accordance with applicable United Kingdom law and accounting standards. Our responsibilities,
as independent auditors, are established in the United Kingdom by statute, the Auditing Practices Board and by our profession’s
ethical guidance. 
We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in
accordance with the Companies Act 1985. We also report to you if, in our opinion, the Directors’ Report is not consistent with
the financial statements, if the Company has not kept proper accounting records, if we have not received all the information and
explanations we require for our audit, or if information specified by law regarding directors’ remuneration and transactions with
the Group is not disclosed. 
We read the other information accompanying the financial statements and consider whether it is consistent with those statements.
We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with
the financial statements.
Basis of audit opinion
We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an
assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and
of whether the accounting policies are appropriate to the Group’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order
to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement,
whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the
presentation of information in the financial statements. 
Opinion
In our opinion the financial statements give a true and fair view of the state of affairs of the Company and the Group as at
31 December 2004 and of the profit of the Group for the year then ended and have been properly prepared in accordance
with the Companies Act 1985.
KPMG Audit Plc
Chartered Accountants
Registered Auditor
Reading
28 February 2005  24 Systems Union Group plc Annual Report and Accounts 2004
2004 2003
Note £000 £000
Turnover
Existing operations 101,603 78,427
Acquisitions 2,627 —
Turnover 1,2 104,230 78,427
Total operating expenses 3 (99,343) (73,365)
EBITDA from ongoing activities 14,212 10,369
Restructuring and similar charges (1,946) —
EBITDA 12,266 10,369
Depreciation (2,097) (1,304)
Amortisation: Licences (58) (148)
Goodwill (5,224) (3,855)
Operating profit
Existing operations 4,062 5,062
Acquisitions 825 —
Operating profit 4,887 5,062
Net interest 6 (273) 562
Profit on sale of fixed asset investment — 500
Profit on ordinary activities before taxation 4,614 6,124
Taxation on profit on ordinary activities 7 (689) (452)
Profit on ordinary activities after taxation 3,925 5,672
Dividends 8 (1,911) (1,054)
Retained profit for the financial year 2,014 4,618
Adjusted earnings 9 11,095 9,027
Earnings per share 9
– basic 4.0p 6.0p
– diluted 3.9p 5.8p
Adjusted earnings per share 9
– basic 11.4p 9.5p
– diluted 11.0p 9.3p
All results relate to continuing operations in the current and previous year.
There is no difference between the retained profit for the year stated above and its historical cost equivalent.
The 2003 earnings per share figures have been restated (Note 9).
Consolidated Profit & Loss Account for the year ended 31 December 2004 Systems Union Group plc Annual Report and Accounts 2004 25
Consolidated Balance Sheet as at 31 December 2004
Restated
2004 2003
Note £000 £000
Fixed assets
Intangible assets 10 93,682 86,356
Tangible assets 11 6,447 5,979
100,129 92,335
Current assets
Debtors 13 29,413 26,529
Cash at bank and in hand 16,469 19,646
45,882 46,175
Creditors: amounts falling due within one year 14 (22,115) (22,828)
Net current assets 23,767 23,347
Total assets less current liabilities 123,896 115,682
Creditors: amounts falling due after more than one year 15 (15,000) (15,000)
Provisions for liabilities and charges 16 (2,470) (1,601)
Deferred income (22,202) (19,761)
Net assets 84,224 79,320
Capital and reserves
Called up share capital 18 5,368 5,248
Share premium 19 11,378 10,013
Interest in own shares 19 (5,546) (6,719)
Merger reserve 19 44,163 47,046
Warrant reserve 19 1,218 1,239
Profit & loss account 19 27,391 22,096
Equity shareholders’ funds 83,972 78,923
Equity minority interest 252 397
Capital employed 84,224 79,320
These financial statements were approved by the Board of directors on 28 February 2005 and were signed on its behalf by:
P J Coleman
Chief Executive Officer  26 Systems Union Group plc Annual Report and Accounts 2004
2004 2003
Note £000 £000
Fixed assets
Intangible assets 10 703 820
Tangible assets 11 333 348
Investments 12 81,710 79,054
82,746 80,222
Current assets
Debtors 13 12,648 5,123
Cash at bank and in hand 7,195 14,208
19,843 19,331
Creditors: amounts falling due within one year 14 (8,289) (14,561)
Net current assets 11,554 4,770
Total assets less current liabilities 94,300 84,992
Creditors: amounts falling due after more than one year 15 (15,000) (15,000)
Net assets 79,300 69,992
Capital and reserves
Called up share capital 18 5,368 5,248
Share premium 19 11,378 10,013
Interest in own shares 19 (5,250) (6,300)
Merger reserve 19 58,315 57,662
Warrant reserve 19 1,218 1,239
Profit & loss account 19 8,271 2,130
Equity shareholders’ funds 79,300 69,992
These financial statements were approved by the Board of directors on 28 February 2005 and were signed on its behalf by:
P J Coleman
Chief Executive Officer 
Company Balance Sheet as at 31 December 2004 Systems Union Group plc Annual Report and Accounts 2004 27
Consolidated Cash Flow Statement for the year ended 31 December 2004
2004 2003
Note £000 £000
Operating profit 4,887 5,062
Amortisation: Licences 58 148
Goodwill 5,224 3,855
Depreciation 2,097 1,304
Loss on sale of fixed assets 328 5
12,594 10,374
Movement in working capital 22 (453) (2,480)
Cash inflow from operating activities 12,141 7,894
Returns on investments and servicing of finance 23 (246) 562
Taxation (289) (185)
Purchase of tangible fixed assets (2,520) (1,965)
Sale of fixed asset investment — 500
Acquisitions 23 (12,304) (21,090)
Equity dividends paid to shareholders (1,457) —
Cash outflow before financing (4,675) (14,284)
Financing 23 1,498 15,056
(Decrease)/increase in cash in the year (3,177) 772
Cash at 1 January 2004 19,646 18,874
Cash at 31 December 2004 16,469 19,646 28 Systems Union Group plc Annual Report and Accounts 2004
2004 2003
£000 £000
Profit for the financial year 3,925 5,672
Exchange adjustments (242) (487)
Total recognised gains & losses relating to the financial year 3,683 5,185
Restated
2004 2003 
£000 £000 
Profit for the financial year 3,925 5,672
Dividends (1,911) (1,054)
Retained profit for the financial year 2,014 4,618
Other recognised gains & losses relating to the year (242) (487)
New share capital subscribed 1,485 587
Transfer of ownership in Interest in own shares 1,792 —
Net addition to equity shareholders’ funds 5,049 4,718
Equity shareholders’ funds at 1 January 2004 78,923 74,624
Interest in own shares (note 1(n)) — (419)
Equity shareholders’ funds at 31 December 2004 83,972 78,923
Consolidated Statement of Total Recognised Gains & Losses 
for the year ended 31 December 2004
Reconciliation of Movements in Shareholders’ Funds 
for the year ended 31 December 2004 Systems Union Group plc Annual Report and Accounts 2004 29
Notes to the Accounts
1 Accounting policies
The following accounting policies have been applied consistently in dealing with items which are considered material in relation
to the Group’s financial statements.
a) Basis of preparation
The financial statements have been prepared in accordance with Generally Accepted Accounting Principles in the United Kingdom
(UK GAAP) and under the historical cost convention.
b) Basis of consolidation
The consolidated financial statements include the financial statements of the Company and its subsidiary undertakings made up to
31 December 2004. The acquisition method of accounting has been adopted. 
Under this method, the results of subsidiary undertakings acquired or disposed of in the year are included in the consolidated profit
& loss account from the date of acquisition or up to the date of disposal.
Under section 230(4) of the Companies Act 1985 the Company is exempt from the requirement to present its own profit &
loss account.
c) Goodwill and intangible assets
Intangible assets are stated at cost. To the extent that the carrying value exceeds the recoverable amount, an impairment loss
is recognised in the profit & loss account. 
Purchased goodwill (representing the excess of the fair value of the consideration given and associated costs over the fair value of
the separable net assets acquired) arising on consolidation of acquisitions is reviewed on a case by case basis and is capitalised and
amortised to nil by equal annual instalments over its estimated useful life.
Licences are included at cost and amortised in equal annual instalments over their licence terms.
d) Investments
In the Company’s financial statements, investments in subsidiary undertakings are stated at cost. To the extent that the carrying
value exceeds the recoverable amount, an impairment loss is recognised in the profit & loss account.
e) Tangible fixed assets and depreciation
Depreciation is provided to write off the cost less the estimated residual value of tangible fixed assets by equal annual instalments
over their estimated useful economic lives as follows:
Freehold buildings – 50 years
Leasehold land and buildings – period of lease
Office equipment – two to four years
Motor vehicles – four years
No depreciation is provided on freehold land.
f) Foreign currencies
Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are translated using the rate of exchange ruling at the balance sheet date and the gains
or losses on translation are included in the profit & loss account.
The assets and liabilities of overseas subsidiary undertakings are translated at the closing exchange rates. Profit & loss accounts of
such undertakings are consolidated at the average rates of exchange during the year. Gains and losses arising on these translations
are taken to reserves.
g) Leases
Assets acquired under finance leases are capitalised and the outstanding future lease obligations are included in liabilities. Operating
lease rentals are charged to the profit & loss account on a straight-line basis over the period of the lease.
h) Cash and liquid resources
Cash and liquid resources for the purposes of the cash flow statement comprise cash in hand and deposits repayable on demand.
i) Pension costs
The Group operates a number of defined contribution pension schemes. The assets of the schemes are held separately from those
of the Group in independently administered funds. The amount charged to the profit & loss account represents the contributions
payable to the schemes in respect of the accounting period. 30 Systems Union Group plc Annual Report and Accounts 2004
1 Accounting policies (continued)
j) Turnover
Turnover represents the amounts (excluding value added tax) derived from the provision of goods and services to third party
customers. Revenue from licence fees is recognised on the later of delivery or contract provided no significant future obligation
exists. Income from maintenance services is recognised on a straight-line basis over the period to which the maintenance agreement
relates. Revenue not recognised in the profit & loss account under this policy is classified as deferred income in the balance sheet.
Revenue from professional services is recognised as the work is performed.
k) Research & development expenditure
Expenditure on research & development is charged to the profit & loss account in the year in which it is incurred.
l) Taxation
Deferred tax is accounted for under FRS19 which requires a form of full provision for accounting for deferred tax called the
incremental liability approach. Deferred tax is provided on all timing differences where the Group has an obligation to pay more
tax in the future as a result of those timing differences. Deferred tax assets are only recognised if it is considered more likely than
not that there will be suitable profits from which the future reversal of the underlying timing differences can be deducted.
m) Employee share schemes
The cost of awards to employees that take the form of shares or rights to shares is recognised over the period of the employee’s
related performance. The cost represents the difference between the option exercise price and the market value of the shares at
the date of the grant of the option. Where there are no performance criteria, the cost is recognised when the employee becomes
unconditionally entitled to the shares. No provision is made for employer’s NIC associated with any gains on vested share options
on the basis that this expense is recoverable from the employee.
n) Interest in own shares
In accordance with UITF Abstract 38, the Group’s interest in own shares held in an Employee Benefit Trust is presented as a deduction
from equity. The balance sheet at 31 December 2003 has been restated accordingly. There is no impact on the profit and loss account
for the year ended 31 December 2003. Net assets at 31 December 2003 have decreased by £419,000 as a result of this adjustment.
2 Segmental analysis
The directors consider there to be only one class of business being the development and distribution of business software.
a) The geographical analysis of turnover is given below:
2004 2003
£000 £000
UK & Ireland 46,567 41,162
Central & Eastern Europe, Middle East & Africa 31,599 13,068
Europe, Middle East & Africa 78,166 54,230
The Americas 10,671 9,882
Asia Pacific 15,393 14,315
104,230 78,427
b) An analysis by revenue type is given below:
2004 2003
£000 £000
Licence 29,055 23,956
Maintenance 45,074 35,681
Services 30,101 18,790
104,230 78,427
Notes to the Accounts continued Systems Union Group plc Annual Report and Accounts 2004 31
3 Total operating expenses
Existing
operations Acquisitions Total
2004 2004 2004 2003
£000 £000 £000 £000
Staff costs (note 5) 54,650 1,856 56,506 39,506
Depreciation 2,039 58 2,097 1,304
Amortisation of intangible fixed assets 4,974 308 5,282 4,003
Other operating expenses 35,878 (420) 35,458 28,552
97,541 1,802 99,343 73,365
Included in total operating expenses is expenditure on Research & Development of £14,888,000 (2003: £10,924,000).
2004 2003
£000 £000
Other operating expenses include:
Auditors remuneration – Group audit 316 197
– Company audit 30 30
– other fees paid to the auditors 77 175
Exchange gains (net) (195) (333)
Operating lease rentals: land and buildings 4,607 3,340
Operating lease rentals: other assets 1,610 1,143
4 Directors’ remuneration and shareholdings
Information covering directors’ remuneration (including pension entitlements), interest in shares and share options is included in the
Directors’ Report on pages 17 to 19 and the Remuneration Report on pages 20 to 21.
5 Staff numbers and costs
The average number of persons employed by the Group (including directors) during the year, analysed by category, was as follows:
Number of employees
2004 2003
Sales 523 311
Support 139 116
Research & development 333 224
Management and administration 257 199
1,252 850
The aggregate payroll costs of these persons were as follows:
2004 2003
£000 £000
Wages and salaries 47,838 34,095
Social security costs 7,185 4,294
Other pension costs 1,483 1,117
56,506 39,506
6 Net interest (payable)/receivable
2004 2003
£000 £000
Bank interest receivable 494 733
Bank interest payable (767) (171)
(273) 562 32 Systems Union Group plc Annual Report and Accounts 2004
7 Taxation
a) Analysis of charge
2004 2003
£000 £000
Current tax
UK corporation tax — —
Overseas tax 533 545
Deferred tax
Origination and reversal of timing differences 156 (93)
Total tax charge 689 452
b) Factors affecting tax charge
The current tax charge for the year is lower (2003: lower) than the standard rate of corporation tax in the UK of 30% (2003: 30%).
The differences are explained below:
2004 2003
£000 £000
Profit on ordinary activities before taxation 4,614 6,124
Profit on ordinary activities multiplied by standard rate of 
corporation tax in the UK of 30% (2003: 30%) 1,384 1,837
Effect of:
Charges not deductible for tax purposes* 1,352 1,010
Capital allowances in excess of depreciation (184) (138)
Utilisation of tax losses (1,967) (2,131)
Lower tax rates on overseas earnings (52) (33)
Current tax charge for the year 533 545
* Primarily amortisation of goodwill
Certain United Kingdom subsidiaries have trading losses which as at 31 December 2004 amounted to £4.0 million which are
available for offset against future trading income. There are further losses available to certain overseas subsidiaries amounting to
£28.6 million. Deferred tax assets of £739,000 have been recognised in respect of the timing differences arising from trading losses
based on the directors’ assessment of suitable profits arising in the relevant statutory companies in the future. 
8 Dividends
2004 2003
£000 £000
Interim dividend 0.5 pence per share (2003: nil) 411 —
Final proposed 1.5 pence per share (2003: 1 pence) 1,500 1,054
1,911 1,054
9 Earnings per share
The calculation of the basic earnings per share is based on the profit on ordinary activities after taxation divided by the weighted
average number of shares in issue during the year.
a) Adjusted earnings is calculated as follows:
2004 2003
£000 £000
Profit on ordinary activities after taxation 3,925 5,672
Amortisation of goodwill 5,224 3,855
Restructuring and similar charges 1,946 —
Profit on sale of fixed asset investment — (500)
Adjusted earnings for the financial year 11,095 9,027
Notes to the Accounts continued Systems Union Group plc Annual Report and Accounts 2004 33
9 Earnings per share (continued)
b) Number of shares (in thousands)
2004 2003
Weighted average number of shares – used to calculate basic earnings per share 97,533 94,740
Effect of dilutive share options 3,390 2,218
Number of shares used to calculate diluted earnings per share 100,923 96,958
The comparative earnings per share have been restated to exclude the Company’s Interest in own shares. This is consistent with
the presentation of Interest in own shares as a deduction from shareholders’ equity in accordance with UITF Abstracts 37 and 38.
10 Intangible fixed assets
Licences Goodwill Total
Group £000 £000 £000
Cost
At 1 January 2004 2,585 111,748 114,333
Additions — 13,546 13,546
Adjustments (1,250) (176) (1,426)
At 31 December 2004 1,335 125,118 126,453
Amortisation and impairment
At 1 January 2004 1,765 26,212 27,977
Charge for the year 58 5,224 5,282
Adjustment (488) — (488)
At 31 December 2004 1,335 31,436 32,771
Net book value
At 1 January 2004 820 85,536 86,356
At 31 December 2004 — 93,682 93,682
The adjustment to licences relates to the elimination of an intangible asset on the acquisition of Lasata Pty Ltd (note 21(c)).
During 2004 the Company has reviewed the fair value adjustments, relating to acquisitions made in 2003. The result is a reduction
in goodwill of £176,000.
Goodwill has been amortised over 20 years.
Licences
Company £000
Cost
At 1 January 2004 and 31 December 2004 1,250
Amortisation
At 1 January 2004 430
Charge for the year 117
At 31 December 2004 547
Net book value
At 1 January 2004 820
At 31 December 2004 703 34 Systems Union Group plc Annual Report and Accounts 2004
11 Tangible fixed assets
Land and Motor Office
buildings vehicles equipment Total
Group £000 £000 £000 £000
Cost
At 1 January 2004 3,689 50 11,344 15,083
Additions 38—2,4822,520
Subsidiary undertakings acquired — 145 274 419
Disposals —(29)(530)(559)
Exchange differences (16) 5 (128) (139)
At 31 December 2004 3,711 171 13,442 17,324
Depreciation
At 1 January 2004 845 30 8,229 9,104
Charge for the year 176 15 1,906 2,097
On disposals — (12) (219) (231)
Exchange differences (7) — (86) (93)
At 31 December 2004 1,014 33 9,830 10,877
Net book value
At 1 January 2004 2,844 20 3,115 5,979
At 31 December 2004 2,697 138 3,612 6,447
Land and Office
buildings equipment Total
Company £000 £000 £000
Cost
At 1 January 2004 and at 31 December 2004 361 49 410
Depreciation
At 1 January 2004 20 42 62
Charge for the year 87 15
At 31 December 2004 28 49 77
Net book value
At 1 January 2004 341 7 348
At 31 December 2004 333 — 333
The net book value of land and buildings comprises:
Group Company
2004 2003 2004 2003
£000 £000 £000 £000
Freehold 2,061 2,114 333 341
Long leasehold 636 730 — —
2,697 2,844 333 341
Notes to the Accounts continued Systems Union Group plc Annual Report and Accounts 2004 35
12 Fixed asset investments
Shares in subsidiary
undertakings
Company £000 
Cost
At 1 January 2004 103,266
Additions 2,656
At 31 December 2004 105,922
Amounts written off at 1 January 2004 and 31 December 2004 24,212
Net book value
At 1 January 2004 79,054
At 31 December 2004 81,710
The additions during the year represent the ongoing purchase of shares (and associated costs) in MIS AG.
The principal wholly-owned subsidiary undertakings of Systems Union Group plc at 31 December 2004 were as follows:
Country of incorporation/registration 
Systems Union Holdings Limited England and Wales 
Pegasus Group plc England and Wales 
FSL Group Limited England and Wales
The shares in the following wholly-owned subsidiary undertakings were held indirectly by Systems Union Group plc at
31 December 2004:
Country of incorporation/registration 
Foundation Systems Limited England and Wales
Pegasus Software Limited England and Wales
Red Technology Services Limited England and Wales 
ncSoft Limited England and Wales
Lasata Pty Ltd Australia
Systems Union SA Argentina 
Systems Union Pty Limited Australia 
Systems Union Ltda Brazil 
Systems Union Inc Canada 
Systems Union (Shanghai) Co. Limited China
Systems Union Limited England and Wales 
Systems Union Sarl France 
Systems Union GmbH Germany 
Systems Union Limited Hong Kong
Systems Union (Ireland) Limited Ireland
Systems Union Limited Japan 
Systems Union Mexico SA de CV Mexico 
Systems Union Software Pte Limited Singapore 
SunSystems Iberica Spa Spain 
Systems Union Software (Thailand) Limited Thailand
Systems Union Inc USA 
Systems Union S.r.l. Italy
MIS UK Limited England and Wales
MIS AG Italia S.r.l. Italy
MIS AG Australia Pty Limited Australia 36 Systems Union Group plc Annual Report and Accounts 2004
12 Fixed asset investments (continued)
Systems Union Group plc owned 95.27% of the equity share capital of MIS AG at 31 December 2004.
The principal subsidiaries of MIS AG at 31 December 2004 were as follows:
Country of Incorporation/Registration Equity Held
MIS GmbH Germany 100%
MIS Austria GmbH Austria 100%
MIS Schweiz AG Switzerland 100%
MIS AG. S.r.o. Czech Republic 100%
The above companies operated principally in their countries of incorporation/registration.
The principal activity of the trading subsidiary undertakings is the development and distribution of financial and performance
management software solutions and associated services.
13 Debtors
Group Company
Restated
2004 2003 2004 2003
£000 £000 £000 £000
Trade debtors 22,247 19,455 — —
Amounts owed by Group undertakings — — 12,288 4,951
Other debtors 3,224 1,941 272 169
Prepayments and accrued income 3,203 4,238 88 3
Deferred tax asset (note 16(a)) 739 895 — —
29,413 26,529 12,648 5,123
All debtors are due within one year.
14 Creditors: amounts falling due within one year
Group Company
2004 2003 2004 2003
£000 £000 £000 £000
Trade creditors 4,511 5,242 187 514
Amounts owed to Group undertakings — — 5,911 11,063
Corporate taxation 833 985 — —
Other tax and social security 3,224 3,208 38 35
Other creditors 6,723 5,070 1,689 2,254
Accruals 6,824 8,247 464 695
Bank borrowings — 76 — —
22,115 22,828 8,289 14,561
15 Creditors: amounts falling due after more than one year
Group Company
2004 2003 2004 2003
£000 £000 £000 £000
Bank loans falling due:
In more than one year but less than two years 15,000 — 15,000 —
In more than two years but less than five years — 15,000 — 15,000
The bank loan comprises a £15.0 million multicurrency facility with Barclays Bank plc which is repayable in October 2006. The
facility is fully drawn down and attracts interest at LIBOR plus a variable margin set by reference to a gearing ratio. The margin
currently being charged is 60 basis points. The facility is secured by fixed and floating charges on the assets of the principal UK
trading companies. 
Notes to the Accounts continued Systems Union Group plc Annual Report and Accounts 2004 37
16 Provisions for liabilities and charges
a) The deferred tax asset provided in the accounts comprises:
2004 2003
Group £000 £000
Tax losses carried forward 631 802
Other timing differences 108 93
739 895
b) Analysis of movement in the year
Group
£000
Deferred tax asset at 1 January 2004 (895)
Deferred tax charge for the year (note 7(a)) 156
Deferred tax asset at 31 December 2004 (739)
c) Other provisions
Other
Restructuring Taxation provisions Total
Group £000 £000 £000 £000
At 1 January 2004 — 1,018 583 1,601
Utilised during year (781) — (234) (1,015)
Other movements — (41) 275 234
Charge for year 1,650 — — 1,650
At 31 December 2004 869 977 624 2,470
Other movements comprise primarily adjustments to provisions set up on the acquisition of MIS AG in October 2003.
17 Financial instruments and risk management
Financial instruments
The Group’s financial instruments comprise cash and liquid resources, bank loans and an Interest in own shares, together with
various items such as trade debtors and trade creditors that arise directly from its operations. The main purpose of these financial
instruments is to fund the Group’s operations as well as to manage working capital and liquidity.
The main risks arising from the Group’s financial instruments are liquidity risk, foreign currency risk, interest rate risk and market
price risk. The Group monitors these risks through a central treasury management function, which invests surplus funds and
manages borrowings.
Liquidity risk
The Group finances its operations through a combination of retained profits, new equity and intercompany loans. The Group
started the year with £19.6 million in cash and liquid resources. At 31 December the Group’s cash and liquid resources were
£16.5 million. The Group continues to monitor its liquidity position through detailed cash forecasting.
Foreign currency risk
The Group’s principal exposure to foreign currency risk arises on the translation of overseas net assets and profits or losses into
sterling for Group accounting purposes. The exposure is reviewed periodically to minimise the risk of any exchange movements
having a material impact on operating profit. The balance sheet exposure is not significant to the overall consolidated net asset
position but the position is monitored with a view to matching non-sterling assets and borrowings.
Interest rate risk
The Group’s borrowings at 31 December 2004 comprise the £15 million medium-term loan which attracts interest at LIBOR plus
a margin (note 15). The interest rate at 31 December 2004 was 5.5% (2003: 4.6%). The average interest rate for 2004 was 5.1%
(2003: 4.6%).
Market price risk
In addition to interest rate and foreign currency risks, the Group is exposed to market price risk relating to its Interest in its own
shares (note 19).  38 Systems Union Group plc Annual Report and Accounts 2004
17 Financial instruments and risk management (continued)
Financial assets
There were no fixed rate deposits at 31 December 2004 or 31 December 2003.
Surplus cash is invested by Group treasury in institutional liquidity funds which achieve above average market rates of return
without compromising capital protection. The funds are readily accessible. 
The average interest rate earned during 2004 was 4.5% (2003: 3.7%). The fair value of the financial assets approximates to their
book values.
Financial liabilities
The Group’s financial liabilities, other than trade and other creditors and accruals, at 31 December 2004 comprise the medium-term
£15 million multicurrency facility which is described in note 15. 
18 Share capital
2004 2004 2003 2003
Number £000 Number £000
Authorised:
Equity: ordinary shares of 5p each 200,000,000 10,000 200,000,000 10,000
Allotted, called up and fully paid:
Equity: ordinary shares of 5p each 107,365,416 5,368 104,958,150 5,248
During the year, 2,407,266 ordinary shares were issued at an aggregate nominal value of £120,000 and at a premium of £1,365,000
as a result of exercise of share options.
Share option schemes
At 31 December 2004 the following options over ordinary shares of the Company granted to employees were outstanding:
Systems Union Group plc Employee Share Option Scheme (1999)
Ordinary options 
Date of Grant Number of shares Exercise period Exercise price (pence)
27 June 2000 256,000 27 June 2003 – 27 June 2010 63.0
26 October 2000 1,547,400 26 October 2003 – 26 October 2010 51.5
7 November 2000 80,000 7 November 2003 – 7 November 2010 53.0
20 December 2000 373,000 20 December 2003 – 20 December 2010 70.5
3 January 2001 75,000 3 January 2004 – 3 January 2011 67.5
6 April 2001 738,500 6 April 2004 – 6 April 2011 63.5
26 June 2001 166,526 26 June 2004 – 26 June 2011 62.5
28 November 2001 482,641 28 November 2004 – 28 November 2011 82.5
18 March 2002 642,500 18 March 2005 – 18 March 2012 90.5
5 December 2002 100,000 5 December 2005 – 5 December 2012 70.0
18 December 2003 1,054,615 18 December 2006 – 18 December 2013 100.0
25 August 2004 50,000 25 August 2007 – 25 August 2014 87.5
25 November 2004 50,000 25 November 2007 – 25 November 2014 109.5
22 December 2004 50,000 22 December 2007 – 22 December 2014 115.5
5,666,182
Super options 
Date of Grant Number of shares Options vested Exercise price (pence)
13 December 2000 2,000,000 2,000,000 61.5
18 May 2001 760,884 760,884 77.0
28 November 2001 100,000 100,000 82.5
18 March 2002 316,666 316,666 90.5
5 December 2002 400,000 266,667 70.0
18 December 2003 250,000 83,332 100.0
25 August 2004 50,000 nil 87.5
25 November 2004 50,000 nil 109.5
22 December 2004 50,000 nil 115.5
3,977,550 3,527,549
Notes to the Accounts continued Systems Union Group plc Annual Report and Accounts 2004 39
18 Share capital (continued)
The vesting and exercise criteria for Super options are noted in the Remuneration Report on pages 20 to 21 of the report.
The number of options vested, as detailed above, are correct as at the date of this report.
Oneview.net Unapproved Share Option Scheme
Date of Grant Number of shares Exercise period Exercise price (pence)
22 September 1999 560,000 24 May 2000 – 22 September 2009 61.0
Systems Union Group Limited Employee Share Scheme
Date of Grant Number of shares Exercise period Exercise price (pence)
7 May 1999 155,927 3 May 2000 – 7 May 2009 108.0
1 April 2000 117,781 3 May 2000 – 1 April 2010 108.0
273,708
Total of options outstanding to employees 
and ex-employees (including directors) 10,477,440
19 Share premium and reserves
Share premium Interest in Merger Warrant Profit & loss
account own shares reserve reserve account
Group £000 £000 £000 £000 £000
At 1 January 2004 10,013 (6,300) 47,046 1,239 22,096
Prior year adjustment (note 1(n)) — (419) — — —
At 1 January 2004 restated 10,013 (6,719) 47,046 1,239 22,096
Retained profit for the financial year ———— 2,014
Premium on share issues 1,365————
Transfers ——(3,536)(21)3,557
Transfer of ownership in Interest in own shares — 1,173 653 — (34)
Exchange adjustments ———— (242)
At 31 December 2004 11,378 (5,546) 44,163 1,218 27,391
Share premium Interest in Merger Warrant Profit & loss
account own shares reserve reserve account
Company £000 £000 £000 £000 £000
At 1 January 2004 10,013 (6,300) 57,662 1,239 2,130
Retained profit for the year ———— 6,120
Transfers — — — (21) 21
Transfer of ownership of Interest in own shares — 1,050 653 — —
Premium on share issues 1,365————
At 31 December 2004 11,378 (5,250) 58,315 1,218 8,271
The Group has an interest in 7.8 million (2003: 9.4 million) of its own shares which is carried at £5,546,000 (2003: £6,719,000).
The market value of this interest at 31 December 2004 at £1.155 per share (2003: £1.02 per share) was £8,979,000 (2003: £9,577,000).
The Company has an interest in 7.5 million (2003: 9.0 million) of its own shares which is carried at £5.3 million (2003: £6.3 million).
The market value of this interest at 31 December was £8.7 million (2003: £9.2 million). 40 Systems Union Group plc Annual Report and Accounts 2004
20 Commitments
a) The Group and Company have no contracted capital commitments at 31 December 2004.
b) Annual commitments under non-cancellable operating leases are as follows:
2004 2003
Land and Land and 
buildings Other buildings Other
Group £000 £000 £000 £000
Operating leases which expire:
Within one year 749 137 536 765
In the 2nd to 5th years inclusive 1,917 503 2,010 554
After five years 2,244 8 2,410 9
Total annual amount payable 4,910 648 4,956 1,328
2004 2003
Land and Land and 
buildings Other buildings Other
Company £000 £000 £000 £000
Operating leases which expire:
Within one year —25 —55
In the 2nd to 5th years inclusive —45 —4
Total annual amount payable —70 —59
21 Acquisitions
Purchase of subsidiary undertakings
MIS AG Quantum Solutions 
Australia Pty Ltd ncSoft Lasata Pty Ltd Holding Company Ltd Total
£000 £000 £000 £000 £000
Fair values of consideration given:
Cash 163 340 8,200 1,051 9,754
Deferred cash consideration — — 619 384 1,003
Shares and options — — 2,053 — 2,053
Acquisition costs 11 — 174 44 229
174 340 11,046 1,479 13,039
Net cash acquired (4) — (441) (254) (699)
Other net liabilities acquired 183 438 361 224 1,206
Goodwill 353 778 10,966 1,449 13,546
In respect of acquisitions, the consolidated cash flow statement includes £1,266,000 net operational cash flows, £14,000 in respect
of bank interest received and £83,000 for capital expenditure. 
Notes to the Accounts continued Systems Union Group plc Annual Report and Accounts 2004 41
21 Acquisitions (continued)
a) MIS AG Australia Pty Limited
On 2 March 2004, the Group completed the acquisition of MIS AG Australia Pty Limited for a consideration of £163,000
and incurred other acquisition costs of £11,000. The total goodwill arising on acquisition was £353,000.
The assets and liabilities of MIS AG Australia Pty Limited at fair value were:
Book value Revaluation Provisional fair value
£000 £000 £000
Tangible fixed assets 5 — 5
Debtors 151 — 151
Creditors (499) 238 (261)
Cash 4— 4
Deferred Income (78) — (78)
Net liabilities acquired (417) 238 (179)
Goodwill arising 353
Purchase consideration and costs of acquisition 174
The book value of the assets and liabilities has been taken from the management accounts of MIS AG Australia Pty Limited at
1 March 2004.
The revaluation adjustment relates to a creditor balance owed to the Group at acquisition which had been provided for at the date
of acquisition.
In its last financial year to 30 June 2003, MIS AG Australia Pty Limited made a profit after tax of £22,000.
For the period from that date to the date of acquisition, MIS AG Australia Pty Limited’s management accounts show turnover
of £291,000 and a loss after taxation of £345,000.
b) ncSoft Limited
On 10 June 2004, the Group acquired the customer base and intellectual property rights of ncSoft Limited (in administration)
for a cash consideration of £340,000. In addition, the Group assumed net liabilities of £438,000.
The total goodwill arising on acquisition was £778,000.
The assets and liabilities acquired at fair value were:
Book value and 
Provisional fair value
£000
Debtors 151
Creditors (360)
Deferred income (229)
Net liabilities acquired (438)
Goodwill arising 778
Purchase consideration 340 42 Systems Union Group plc Annual Report and Accounts 2004
21 Acquisitions (continued)
c) Lasata Pty Ltd
On 30 June 2004, the Group completed the acquisition of Lasata Pty Ltd for a consideration of £10,872,000 and incurred other
acquisition costs of £174,000. The total goodwill arising on acquisition was £10,966,000.
The assets and liabilities of Lasata Pty Ltd at fair value were:
Provisional
Book value Revaluation fair value
£000 £000 £000
Intangible fixed assets 1,769 (1,769) —
Tangible fixed assets 389 — 389
Debtors 1,527 (13) 1,514
Creditors (346) (11) (357)
Deferred taxation 39—39
Cash 441 — 441
Deferred income (1,184) — (1,184)
Net assets acquired 2,635 (1,793) 842
Elimination of Group intangible asset (762)
Adjusted net assets acquired 80
Goodwill arising 10,966
Purchase consideration and costs of acquisition 11,046
The book value of the assets and liabilities has been taken from the audited accounts of Lasata Pty Ltd at 30 June 2004. 
The revaluation adjustments comprise the elimination of goodwill, the write down of debtors and provision for losses on forward
exchange contracts. In addition, as part of the transaction, the Group has eliminated an intangible fixed asset which consisted of a
licence purchased from Lasata Pty Ltd in 2002 (see note 10).
In its last financial year to 30 June 2004, Lasata Pty Ltd made a profit after tax of £750,000 (2003: £1,289,000).
d) Quantum Solutions Holding Company Limited
On 22 December 2004, the Group completed the acquisition of Quantum Solutions Holding Company Limited, the parent
company of Quantum Accounting Limited, for a consideration of £1,435,000 and incurred other acquisitions costs of £44,000.
The total goodwill arising on acquisition was £1,449,000.
The assets and liabilities of Quantum Solutions Holding Company Limited at fair value were:
Book value and 
provisional fair value
£000
Tangible fixed assets 25
Debtors 667
Creditors (664)
Cash 254
Deferred income (252)
Net assets acquired 30
Goodwill arising 1,449
Purchase consideration and costs of acquisition 1,479
The book value of the assets and liabilities has been taken from the management accounts of Quantum Solutions Holding Company
Limited at the date of acquisition.
In the financial year ended 30 September 2003, Quantum Solutions Holding Company Limited made a loss after tax of £9,000.
For the period from that date to the date of acquisition, Quantum Solutions Holding Company Limited’s management accounts
show turnover of £2,551,000 and a loss after taxation of £64,000.
Notes to the Accounts continued Systems Union Group plc Annual Report and Accounts 2004 43
22 Movement in working capital
2004 2003
£000 £000
Decrease in debtors 394 528
Decrease in creditors (3,146) (2,244)
Increase/(decrease) in deferred income 1,347 (381)
Increase/(decrease) in provisions 952 (383)
Movement in working capital (453) (2,480)
23 Analysis of cash flows
2004 2003
£000 £000
Returns on investment and servicing of finance
Interest received 494 733
Interest paid (740) (171)
Net cash (outflow)/inflow from returns on investment and servicing of finance (246) 562
Financing
Issue of ordinary share capital 1,485 587
Transfer of ownership of Interest in own shares 89 —
Repayment of bank loans (76) (531)
New bank loans — 15,000
Net cash inflow from financing 1,498 15,056
Acquisitions
Purchase of subsidiary undertakings (13,003) (25,555)
Net cash acquired with subsidiary undertakings 699 4,465
Net cash outflow from acquisitions (12,304) (21,090)
24 Analysis of changes in net cash
1 January 2004 Acquisitions Cash flows Exchange movements 31 December 2004
£000 £000 £000 £000 £000
Net cash 19,646 699 (3,716) (160) 16,469
Bank debt (15,076) — 76 — (15,000)
Total net cash 4,570 699 (3,640) (160) 1,469
25 Reconciliation of (decrease)/increase in cash to movement in net funds
2004 2003
£000 £000
(Decrease)/increase in cash (3,177) 772
Cash flow from change in debt 76 (14,469)
Change in net funds resulting from cash flows (3,101) (13,697)
Loans acquired with subsidiary undertakings — (607)
Movement in net funds (3,101) (14,304)
Net funds at 1 January 4,570 18,874
Net funds at 31 December 1,469 4,570
26 Pension scheme
The Group operates a number of defined contribution pension schemes. The pension cost charge for the year represents
contributions payable by the Group to the schemes and amounted to £1,483,000 (2003: £1,117,000).
Contributions amounting to £174,279 (2003: £120,252) were payable to the schemes at 31 December and are included in creditors. 44 Systems Union Group plc Annual Report and Accounts 2004
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Systems Union Group plc (“the Company”) will be held at the Registered Office of the
Company at Systems Union House, 1 Lakeside Road, Aerospace Centre, Farnborough, Hampshire GU14 6XP on 14 April 2005 at 12.30 pm to transact
the following business:
Ordinary business
1. To receive and consider the report of the directors and audited accounts of the Company for the year ended 31 December 2004, together with the
Independent Auditors Report.
2. To declare a final ordinary dividend of 1.5 pence per share.
3. To re-elect Paul James Coleman, who retires by rotation pursuant to Article 92.1 of the Company’s Articles of Association and who, being eligible,
offers himself for re-election as a director.
4. To re-appoint KPMG Audit Plc as auditors and to authorise the directors to fix their remuneration.
Special business
To consider and, if thought fit, to pass the Resolution numbered 5 as an Ordinary Resolution:
5. That the directors be and they are hereby authorised, in substitution for any other authority previously conferred upon them, generally and
unconditionally pursuant to Section 80 of the Companies Act 1985 (“the Act”) to exercise all the powers of the Company to allot relevant securities
(as defined in Section 80(2) of the Act) up to an aggregate nominal amount of £1,791,766 (being 33.3% of the total nominal value of the shares in
issue at the date of this notice) provided that:
(i) this authority shall expire fifteen months from the date of this Resolution or at the Annual General Meeting of the Company to be held in 2006
if earlier (unless previously revoked or varied by the Company in general meeting); or
(ii) the Company may, before such expiry, make an offer, agreement or arrangement which would or might require relevant securities to be allotted
after such expiry and the directors may allot relevant securities pursuant to any such offer, agreement or other arrangement as if the authority
hereby conferred had not expired.
To consider and, if thought fit, to pass the following Resolutions numbered 6 and 7 as Special Resolutions:
6. That subject to the passing of Ordinary Resolution number 5 above, the directors be and are hereby empowered pursuant to Section 95(1) of the Act
and in substitution for all existing powers, to allot equity securities (as defined in Section 94 of the Act), pursuant to the authority conferred by
Ordinary Resolution number 5 above as if Section 89(1) of the Act did not apply to any such allotment provided that:
(i) the allotment of equity securities in connection with any offer whether by way of rights, open offer (or otherwise) as securities, open for
acceptance for a period fixed by the directors to the holders of ordinary shares and such other equity securities of the Company as the directors
may determine on the register on a fixed record date in proportion (as nearly as may be) to their respective holdings of such securities or in
accordance with the rights attached thereto subject to such exclusions or other arrangements as the directors may deem necessary or expedient
to deal with fractional entitlements that would otherwise arise or with legal or practical problems under the laws, or the requirement of any
recognised regulatory body or any stock exchange, in any territory; or 
(ii) any other allotment of equity securities up to an aggregate nominal value of £268,765 (being 5% of the total nominal value of the Company’s
shares in issue as at the date of this notice).
7. That the Company be and is hereby generally and unconditionally authorised to make one or more market purchases (within the meaning of Section
163 of the Act) on the London Stock Exchange of ordinary shares of 5 pence each in the capital of the Company provided that:
(i) the maximum number of ordinary shares, which are authorised to be purchased, shall be 10,750,000 representing approximately 10% of the
Company’s issued ordinary share capital;
(ii) the minimum price which may be paid for such shares is 5 pence per share (exclusive of expenses);
(iii) the maximum price (exclusive of expenses) which may be paid for an ordinary share shall not be more than 5% above the average of such share’s
middle market quotation as derived from the Alternative Investment Market of the London Stock Exchange (AIM) for the five business days
immediately preceding the day on which the contract is entered into, being days on which AIM is open for the transaction of business.
The authority hereby conferred shall expire at the conclusion of the Annual General Meeting of the Company to be held in 2006 or, if earlier, 15 months
after the date of passing this Resolution, unless such authority is renewed, varied or revoked prior to such time; and the Company may make a
contract to purchase ordinary shares under the authority hereby conferred prior to the expiry of such authority which will or may be executed
wholly or partly after the expiration of such authority and may make a purchase of ordinary shares pursuant to any such contract.
By Order of the Board
P G Larking Registered Office
Secretary Systems Union House
28 February 2005 1 Lakeside Road
Aerospace Centre
Farnborough
Hampshire GU14 6XP
Notes
1. A member entitled to attend and vote is entitled to appoint a proxy or proxies to attend and, on a poll, vote instead of him/her. A proxy need not be
a member of the Company.
2. A form of proxy is enclosed. The appointment of a proxy will not prevent a shareholder from subsequently attending and voting at the meeting in person.
3. To be effective the instrument appointing a proxy, and the power of attorney or other authority (if any) under which it is signed, or a copy of such
authority certified notarially or in some other way approved by the Board, shall be deposited at the offices of the Company’s registrars, Capita Registrars,
Proxy Department, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU not less than 48 hours before the time of the holding of the meeting.
4. Copies of all contracts of service under which directors are employed by the Company or any of its subsidiaries are available for inspection at the
Company’s Registered Office during business hours on any weekday (Saturdays and public holidays excluded) from the date of this notice until the
conclusion of the Annual General Meeting and will also be available for inspection at the place of the meeting from 15 minutes before it is held until
its conclusion.
Notice of Annual General Meeting T HE D ESIGN P ORTFOLIO
a member of the flathill communications group plc
www.flathillplc.com
designed & produced by 7.8p
9.3p
Systems Union Group plc
Systems Union House 1 Lakeside Road Aerospace Centre Farnborough Hampshire GU14 6XP United Kingdom
Telephone: +44 (0)1252 556000  Website: www.systemsunion.com
SUG ANR 005
Systems Union Group plc Annual Report and Accounts 2004
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