Annual Report & Accounts 2003/2004 CONTENTS
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* Operating profit is stated before exceptional items and goodwill amortisation
11 Financial Highlights
12 Chairman’s Statement 
14 Chief Executive’s Review 
18 Group Finance Director’s Review 
11 Company Profile
12 Board of Directors
13 Corporate Governance 
16 Directors’ Remuneration Report 
24 Environmental Policy 
24 Equal Opportunities Policy 
25 Statement of Directors’
Responsibilities
26 Independent Auditors’ Report 
27 Group Profit and Loss Account
28 Group Statement of Total 
Recognised Gains and Losses 
28 Reconciliations of Movements in 
Shareholders’ Funds 
29 Balance Sheets 
30 Group Statement of Cash Flows 
30 Reconciliation of Net Cash Flow 
to Movement in Net (Debt)/Funds 
31 Notes to the Accounts 
61 Directors’ Report 
63 Directors and Advisers 
64 Financial Calendar 
64 Investor Information 
Northgate Information Solutions is a major supplier of software applications and
outsourcing solutions to the public sector, human resources and corporate markets and
one of the leading suppliers of HR software in the UK. The company works closely with all
of the UK’s regional police forces, 30% of UK local authorities and with many corporate
organisations including more than 50% of FTSE 100 companies.
NORTHGATE INFORMATION SOLUTIONS AT A GLANCE
NORTHGATE INFORMATION SOLUTIONS PLC FINANCIAL HIGHLIGHTS 1
NORTHGATE INFORMATION SOLUTIONS PLC
Y ear ended Year ended %
30 April 2004 30 April 2003 increase
Revenue: £136.5m £85.2m +60%
Operating profit:
From continuing operations,
before exceptional items and goodwill amortisation £11.6m £4.5m +158%
Discontinued operations, exceptional items and goodwill amortisation £(20.1)m £(5.7)m
Group operating loss £(8.5)m £(1.2)m
Adjusted basic earnings per share: 2.81p 1.83p +54%
Basic (loss)/earnings per share: (2.96)p 10.45p
Adjusted basic earnings per share up 54%
Acquisitions successfully integrated
Continued improvement of the business mix:
- Public Services turnover* up 47%
- Public Services profit* up 92%
- Human Resources Systems turnover* up 173%
- Human Resources Systems profit* up 157%
- Strong cash generation: £13.7m cash generated from £11.6m EBITA
* for continuing operations, including acquisitions, before exceptional items and goodwill amortisation NORTHGATE INFORMATION SOLUTIONS PLC
CHAIRMAN’S STATEMENT 2
This has been a
transformational year
for Northgate and we
are now a leader in our
chosen markets Strong financial performance
This has been a transformational year for Northgate
Information Solutions, during which it has achieved very
strong results. Since the acquisition of RebusHR in January,
Northgate has improved its competitive position and is now
a leader in all its chosen markets. Turnover from continuing
operations has increased by 64% to £136.5 million (2003:
£83.3 million) and trading has been and continues to be
strong across the Group.
Operating profit from continuing operations before
exceptional items and goodwill amortisation has more than
doubled to £11.6 million (2003: £4.5 million) including
organic profit of £7.1 million (2003: £4.5 million) and a
pleasing first contribution of £4.5 million from the businesses
acquired during the year. Removing the effect of exceptional
items, profit before tax in 2004 was £4.1 million (2003:
£5.7 million). After exceptional items of £14.2 million, net
interest charges of £1.7 million and amortisation of goodwill
of £5.9 million (2003: £0.3 million), Northgate reported a
loss before tax, in line with expectations, of £10.1 million.
The prior year profit before tax of £28.1 million was
supported by an exceptional profit of £28.5 million relating
to the sale of the health business in July 2002.
Net debt has been reduced since the completion of the
RebusHR deal from £64.0 million to £57.1 million. This is
due to strong trading across the Group and focused working
capital management. Exceptional items of £14.2 million
include £5.0 million of Employee Share Option
Scheme charges and £11.2 million of restructuring costs.
The restructuring costs mainly arose through redundancy
programmes to integrate acquired businesses into the
Group, and the associated rationalisation of the Group’s
property portfolio.
Strategic transformation 
During the year, Northgate has made several successful
acquisitions, in line with its strategy to become a significant
player in each of its chosen markets, most recently with the
acquisition of RebusHR in January. In the first half of the year,
the Group acquired Carapeople, blue8 and Hays CSG, and in
November PWA was added. These businesses have now been
successfully integrated and have significantly strengthened
Northgate’s capabilities in the small to medium enterprise
(SME) payroll and public safety markets. This combination of
products gives the Group an impressive competitive position
in its chosen markets. The acquisition of RebusHR has
transformed the Human Resources division: the customer
base is strengthened and the business has increased in scale.
The integration of RebusHR is ahead of schedule and largely
complete; the business has also performed better during the
integration period than was originally forecast, making a
welcome profit contribution before exceptional items and
goodwill amortisation of £1.7 million to this financial year.
Employees
This strong set of results is a reflection of the commitment
and hard work of all our employees. Their performance has
been particularly impressive, given the change the Group has
undergone during the year. I would like to thank all our
employees personally for their ongoing dedication to the
business.
At the Board level, we have been delighted to welcome five
new Directors this year: Sir Stephen Lander, Nick Starritt and
David Hodgson have joined the Group as Non-Executive
Directors; David Meaden and Malcolm Aldis, the current
Managing Directors of our Public Services and Human
Resources Systems (HRS) divisions, have been appointed to
the Board as Executive Directors. I know their experience will
be invaluable to Northgate as the business goes forward.
Outlook
The Group has been focused on ensuring that RebusHR
integrates smoothly and this has now been largely
completed. As a result, we are now well positioned to deliver
on the targets we set ourselves at the time of the acquisition.
In addition to this, as the Board continues to seek
opportunities to create value for shareholders, it will
consider further bolt-on acquisitions when they arise and on
a case by case basis. Your Board remains confident that there
are significant growth opportunities available to the
company in its chosen markets.
The utilisation of resources in the implementation of this
growth strategy will deliver substantial shareholder value
and, accordingly, the Directors have decided that the
payment of a dividend is not appropriate at this time.
Nick Irens 
Chairman
28 June 2004
CHAIRMAN’S STATEMENT 3
NORTHGATE INFORMATION SOLUTIONS PLC NORTHGATE INFORMATION SOLUTIONS PLC
CHIEF EXECUTIVE’S REVIEW 4
Northgate can
now compete for, 
and win, far broader
contracts CHIEF EXECUTIVE’S REVIEW 5
NORTHGATE INFORMATION SOLUTIONS PLC
Overview
This year has marked a real step change for the Group and has seen Northgate Information Solutions take a
significant step toward realising its strategy to become the leading player in providing software and IT
services to the human resources, local government and public safety markets. Northgate has successfully
completed its integration of Carapeople, blue8, Hays CSG and PWA, and the integration of RebusHR is well
ahead of the Group’s original expectations. The Group has now achieved market-leading positions in each of
its chosen growth markets.
The increased scale of the business as a whole brings the Group greater visibility. Northgate can now compete
for, and win, far broader contracts and it has become the strategic partner of choice for many of its customers.
Its enlarged suite of software products brings greater opportunities for delivering value to customers and
strengthening its relationship with them. These key partner relationships are particularly important as they
give greater insight into future product development opportunities. One example of this is Northgate’s work
in the emerging area of complex data integration solutions for public sector agencies.
Public Services
Northgate’s Public Services division has shown significant
growth throughout the year, with revenues up 47%
from £40.8 million to £60.0 million, which includes a 13%
increase in turnover at an organic level. Operating
profit from existing operations before exceptional items
and amortisation of goodwill was £5.1 million (2003:
£3.4 million). This represents organic growth of 47%.
Our Front Office solutions product has been a significant
growth driver, with 30 new clients won during the year,
bringing the total number of Front Office customers to 37.
Front Office is a product which Northgate developed: the
company identified the market opportunity and made a
significant investment to design and build this product. Last
year, Northgate won more than 50% of all the contract
opportunities in the market, demonstrating the success of its
development strategy. Looking ahead, there is a healthy
pipeline of contracts for which Northgate is bidding and the
outlook for Front Office is excellent. Since the year end, we
have achieved preferred supplier status with eight further
Local Authorities. The Group is positive about the
opportunities for similar progress with the new Assert
product which addresses the market need for simplified
benefits assessment.
The blue8 and Hays CSG businesses continue to enhance
Northgate’s leadership position in the criminal justice and
public safety sectors, as the product range available positions
the Group as a key strategic partner and gives Northgate
better traction in maintaining its customer relationships.
Northgate has made excellent progress in combining the
technologies acquired with blue8 and Hays CSG, which were
primarily targeted at the criminal justice sector prior to
acquisition, to create improved solutions for its enlarged
customer base. This progress is exemplified by recent wins in
the area of complex data management for local authorities.
The Home Office’s Penalty Notice for Disorder scheme has
now been successfully rolled out and implemented with 42
police forces. The strength of the Northgate brand has also
increased the number of customers for the NMIS product.
Under Hays’ ownership, 20 forces committed to using the
product over a five-year period. Since Northgate acquired it
last August, it has increased the number of contracts to 38. Human Resources 
Northgate is now the market leader in the UK HR software
sector. Total revenue increased by 173% from £18.9 million
to £51.5 million, with revenues growing organically by 19%
to £22.5 million (2003: £18.9 million) and the businesses
acquired over the past year contributing an additional
£29.0 million of turnover. Operating profit before
exceptional items and amortisation of goodwill was £6.7
million; of this, underlying organic growth increased by
43% from £2.6 million in 2003 to £3.7 million and
Northgate’s acquisitions over the period contributed an extra
£3.0 million of profit.
The acquisition of RebusHR has transformed the HR division
into a business of substantial scale in human resources
services and has nearly doubled its total number of
customers. It can now compete with global suppliers of
enterprise software to even the largest application customers
and is well placed to take advantage of opportunities to offer
its HR applications and outsourcing services across
international markets where the opportunities arise. A
number of Northgate’s UK-based customers with
international operations have asked the Group to provide
software into their other markets. In addition, the newly
acquired PWA business has a European distributor network to
which the Group now has access. Northgate has the most
comprehensive range of software and service offerings of any
HR focused vendor and is able to address the needs of the
smallest up to the largest company, employing from 5 to over
300,000 employees.
Northgate’s ResourceLink product continues to consolidate
its position as a leading integrated payroll, personnel and
pensions administration software product in the UK, winning
over 33 new clients over the past year. RebusHR’s established
product range continues to perform well and ahead of the
expectations set for the business at the time of acquisition.
The Group won a recent three-year payroll outsourcing
contract with Customs & Excise, worth £3.0 million.
This contract combined RebusHR’s payroll processing
capability with the ResourceLink product, demonstrating the
combined strength of the enlarged HR business.
Corporate Sector
Following the completion of our planned withdrawal from
low-margin hardware reselling, and the consequent reduction
in revenues over the previous two years, our corporate sector
division has achieved better than expected revenue growth of
6% during the year. New name business has included a
contract to provide Sun support for Cable & Wireless, as a
partner with Hewlett Packard.
The division has also continued to reduce costs and to
improve profitability, with operating profit before
exceptional items and amortisation of goodwill growing by
20% to £1.4 million (2003: £1.2 million). Whilst it is a small
player in this market, the business remains profitable and
cash generative, and Northgate continues to manage this
business to maintain its profitability. In particular, this
business continues to add value to the other Northgate
divisions through the outsourcing expertise that corporate
brings to non-corporate clients, in addition to the corporate
sector’s stand alone business.
The Future
I would like to thank our shareholders and customers for their
support during a period of change. I would also like to thank
all our employees for their dedication and professionalism –
this is a very good set of results and they should be proud of
what they have achieved.
Northgate developed market-leading positions in its chosen
markets in line with its stated strategy. Its acquisition
programme has delivered the opportunity to create
sustained growth. With strong recurring revenues from
the high quality and growing customer list, an exceptionally
high client retention rate and generally improving IT
market conditions, the Group is well positioned to build the
next phase of Northgate’s future. Consequently, I am
confident that the company will achieve another excellent
result in 2005.
The outlook for Northgate is very positive as the Group
continues to deliver value to its customers and to create
value for its shareholders. Strong levels of growth, both
organic and acquisitive, are expected to continue as the
Group leverages its leading UK positions in the human
resources and public safety markets.
Chris Stone
Chief Executive
28 June 2004
CHIEF EXECUTIVE’S REVIEW 6
NORTHGATE INFORMATION SOLUTIONS PLC
The corporate sector division, in addition to
its stand alone business, continues to add
value to other Northgate divisions through
the outsourcing expertise it brings to them  CHIEF EXECUTIVE’S REVIEW 7
The Home Office’ s
Penalty Notice for Disorder
scheme has now been
successfully rolled out  
and implemented with 
42 police forces 
NORTHGATE INFORMATION SOLUTIONS PLC Our Front Office
solutions product has
been a significant
growth driver, with
30 new clients won
during the year
NORTHGATE INFORMATION SOLUTIONS PLC
GROUP FINANCE DIRECTOR’S REVIEW 8 GROUP FINANCE DIRECTOR’S REVIEW 9
NORTHGATE INFORMATION SOLUTIONS PLC
Overview
The year to 30 April 2004 has been a period of
transformation and growth for Northgate Information
Solutions. During the year we completed 5 acquisitions and
continued to enjoy strong growth from the local government,
emergency services and human resources markets.
Cash flow has been strong, with the Group generating £13.7
million of cash from an operating profit before exceptional
items and amortisation of goodwill of £11.6 million. This has
helped to support our acquisition programme.
We have continued to increase the work carried out under
long-term contracts, helping to underpin future earnings.
Operating Results
Group turnover of £136.5 million (2003: £85.2 million)
increased by £51.3 million, driven by strong organic growth
and acquisitions. Turnover from existing operations grew by
£10.3 million to £93.6 million (2003: £83.3 million) through
strong demand for our Front Office, Penalty Notice for
Disorder and ResourceLink products. Acquisitions contributed
a further £42.9 million.
Group operating profit, before exceptional items and
goodwill amortisation, of £11.6 million grew by 129% (2003:
£5.1 million). Organic revenue growth increased operating
profit before exceptional items and goodwill amortisation by
56% to £7.1 million (2003: £4.5 million) whilst acquisitions
contributed £4.5 million. 2003 trading was supported by a
£0.5 million contribution from our health business which was
sold in July 2002. After goodwill amortisation of £5.9 million
(2003: £0.3 million) and exceptional items of £14.2 million
(2003: £6.0 million), the Group recorded an operating loss of
£8.5 million (2003: £1.2 million).
Our order book grew substantially during the year to
£185.8 million (2003: £101.5 million). It grew organically by
7.3% to £108.9 million and was boosted by our acquisition
programme. At any point in time, our contracted and run rate
revenue now underpins over 60% of the Group’s income for
the following 12 months.
Results by market sector (including acquisitions) were:
• Public Services turnover of £60.0 million (2003:
£40.8 million) grew 47%, with an accompanying increase
in operating profit before exceptional items and goodwill
amortisation of £3.2 million to £6.6 million (2003:
£3.4 million). Organic growth accounted for £5.4 million of
the turnover increase and £1.6 million of the profit
increase, primarily driven by demand for our Front Office
application and the national roll out of our Penalty Notice
for Disorder software to the UK police forces.
There were two acquisitions in the year: Hays CSG was
acquired on 8 August 2003 and blue8 was acquired on
16 July 2003 for a total net consideration of £16.0 million.
These contributed £13.8 million of turnover and
£1.5 million of operating profit before exceptional
items and goodwill amortisation.
• Human Resources also enjoyed strong organic growth
whilst gaining a market leading position from our
acquisition programme. Turnover of £51.5 million
increased by £32.6 million (2003: £18.9 million) whilst
operating profit before exceptional items and goodwill
amortisation grew £4.1 million to £6.7 million (2003:
£2.6 million).
Organic revenue growth was 19%, increasing turnover to
£22.5 million. This increased operating profit before
exceptional items and goodwill amortisation by 43% to
£3.7 million.
During the year we acquired Carapeople, PWA and
RebusHR for a total consideration of £193.2 million. This
has allowed the business to develop critical mass and a
strong product offering, positioning it well for further
growth. HR acquisitions generated £29.0 million of
turnover and an operating profit before exceptional items
and goodwill amortisation of £3.0 million.
• Corporate Sector sales of £25.8 million increased by 6%
(2003: £24.3 million), leading to a higher operating profit
before exceptional items and goodwill amortisation of
£1.4 million (2003: £1.2 million), an increase of 20%. This
was generated through demand for IT outsourcing,
supported by firm cost management.
Exceptional Items
An exceptional charge of £14.2 million (2003: £6.0 million)
was recorded in the year, predominantly through
restructuring businesses acquired (2004: £11.2 million, 2003:
£1.2 million). A £5.0 million charge (2003: credit of
£0.2 million) was also recorded for our employee share
option scheme and reflects a significant change in our share
price. This rose by 196% to 68 pence during the year. GROUP FINANCE DIRECTOR’S REVIEW 10
NORTHGATE INFORMATION SOLUTIONS PLC
Finally, a £2.0 million vacant space provision was released.
This was recorded in 2003 with our head office at Hemel
Hempstead being under utilised. In September 2003 we
acquired the property, reducing ongoing rental costs by
£2.0 million per annum. We have also substantially improved
the Group’s occupancy of this property as we have grown.
Cash and Financing
During the year, the Group experienced strong cash flow from
operations, generating £13.7 million. This has been used
along with debt facilities and the issue of shares
(£122.3 million) to fund our acquisition programme.
We invested £210.2 million in acquisitions in the year,
the most substantial being RebusHR (£176.1 million). This left
the Group with £57.1 million of net debt at 30 April 2004
(2003: net funds £39.3 million).
In December 2003, Northgate put in place an £88.0 million
five-year syndicated loan facility. This, combined with our
strong cash flow, will provide funds for further growth.
Accounting Policies
The Group has applied accounting principles in the year to
30 April 2004 consistent with the prior year. No new
accounting standards have been adopted.
Northgate will adopt International Financial Reporting
Standards (IFRS) with effect from 1 May 2005. The
implementation of IFRS is a major change process for which
we have established a project team and to which we are
dedicating a considerable resource.We expect that the Group
will be fully prepared for the transition in 2005, though the
implementation plan is dependent upon the completion of
the standard-setting process by the International Accounting
Standards Board (IASB) and the endorsement of such
standards by the Council of the European Union.
The impact of the transition to IFRS on our reported results
is being assessed. As we move to the new standards, we will
ensure that we maintain transparency in our reporting so
that our underlying performance remains visible.
T axation (FRS19)
The Group has £33.7 million of UK trading and £52.1 million
of UK non-trading losses at 30 April 2004 which will help to
support our strong cash flow over the next few years.
The non-trading tax losses arose from the acquisition of
RebusHR. A deferred tax asset of £7.1 million (2003:
£4.7 million) has been recognised in line with FRS19.
Pensions
The Group has two defined benefit pension schemes, one of
which originates from the RebusHR business acquired in
January 2004. Both are now closed to new members.
The Northgate pension scheme had a SSAP24 funding review
carried out at 31 March 2002 which showed a deficit of £3.2
million. The RebusHR pension scheme had a SSAP24 funding
review carried out during November 2003 which showed a
funding shortfall of £18.0 million. The Group is contributing
approximately £2.1 million per annum to these deficits.
Applying FRS17 rules to these schemes shows a deficit of
£40.3 million after tax at 30 April 2004 (2003: £52.3 million,
including the RebusHR scheme as at 23 January 2004). This
has declined by 23% during the year through investment
performance and Northgate’s funding programme. The
funding of both schemes is currently deemed reasonable but
will remain under review along with the Group’s overall
pension provision to its employees.
Risk Management 
We have continued to identify and evaluate operational and
other risks faced by the Group, implementing changes where
required to reduce risk to manageable levels. We believe that
this, together with our culture of financial control, underpins
the quality of earnings.
Earnings per Share
Adjusted basic earnings per share, which is calculated on
profit before exceptional items, discontinued activities and
deferred tax, is 2.81 pence, up 53.6% on the prior year
(2003: 1.83 pence). Basic earnings per share, which includes
goodwill amortisation and exceptional costs, showed a loss
of 2.96 pence. This compares to a profit of 10.45 pence in
2003. 2003 was supported by an exceptional profit of
£28.5 million from the disposal of our health business.
Dividend Policy
The Board has reviewed its dividend policy. The Board does
not feel that a dividend would be appropriate at this time.
Shareholders’ Funds
Shareholders’ Funds, at 30 April 2004, of £162.1 million show
a significant increase over the funds of £46.1 million at
30 April 2003, driven by strong trading and the issue of
£122.3 million of shares to fund our acquisition programme.
John Stier
Group Finance Director 
28 June 2004  COMPANY PROFILE 11
NORTHGATE INFORMATION SOLUTIONS PLC
Overview
Northgate Information Solutions is a major supplier of
software applications and outsourcing solutions to the public
sector, human resources and corporate markets and one
of the leading suppliers of HR software in the UK.
The company works closely with all of the UK’s regional
police forces, 30% of UK local authorities and with many
corporate organisations including  more than 50% of FTSE
100 companies.
The company was originally founded in 1969. Today
Northgate employs approximately 2,200 staff and has 2,500
large/medium customers and almost 5,000 small/medium
customers across the UK and Ireland. Headquartered in Hemel
Hempstead, Northgate has 21 major offices across the
UK with six further international offices. Northgate
Information Solutions has three divisions focused on the
company’s core business areas: Human Resources Systems
(HRS), Public Services (encompassing both the Local
Government and Criminal Justice/Public Safety markets), and
Corporate Services.
Northgate's customer centric approach is based on fully
understanding application-specific business processes. This
enables organisations in both the public and private sectors
to increase their business process efficiency when deploying
Northgate applications and their associated services or when
utilising the company’s wide range of high quality IT services.
Furthermore, Northgate manages many customers' key
systems, providing a broad range of flexible and cost-
effective outsourced solutions available either at client sites
or hosted at its own BS7799 accredited data centre.
Market Leading Applications
• Within HRS, Northgate’s ResourceLink is a highly scaleable,
flexible and web-enabled integrated suite of HR, payroll
and pension modules. Including business intelligence and
workflow functions, it is designed to increase
administration efficiencies, improve management
information and reduce the total operating costs in HR
departments. Our EmpowerHR suite provides an
integrated solution for the management of personnel,
recruitment and training; whilst its web-based Internet
recruitment and Intranet solutions offer advanced
e-HR capabilities. When integrated with Easipay,
EmpowerHR provides HR professionals with the accurate
information required to fully develop value enhancing
people strategies.
Overview
• Through the use of innovative IT in local government,
Northgate is helping local authorities to transform the
delivery of public services with Front Office, our market
leading and award winning citizen relationship
management system and Assert, our new and innovative
benefit assessment tool. In criminal justice and public
safety, Northgate is also delivering public sector value
through our Notice Enforcement Systems and National
Management Information System (NMIS) solutions. The
London Congestion Charging scheme uses Northgate
software to track offenders, as do the majority of police
speed cameras across the UK.
• Northgate’s ProIV product, a rapid application
development tool and Reality, our multi-value database,
are proven software solutions that enable Northgate’s
customers to develop fast, robust, future-proof and cost-
effective business applications.
Outsourcing
Using a wide range of IT skills, Northgate can create a flexible
service offering that enables companies to benefit from
performance improvements whilst still maintaining or
reducing running costs. Northgate is a long-standing supplier
of outsourced IT solutions enabling organisations in both the
public and private sectors to hand over confidently all or part
of their IT requirement to Northgate.
Northgate manages major IT outsourcing contracts with
local government, police and corporate clients. We provide
hosted applications from our state of the art data centre and
manage clients’ IT infrastructure and desktop services on site.
For clients in the HR market, Northgate is a leading supplier
of payroll outsourcing services which range from a fully
managed service to hosting the application. Our client base
ranges from FTSE 100 companies right through to SMEs. BOARD OF DIRECTORS 12
NORTHGATE INFORMATION SOLUTIONS PLC
1. Nick Irens, aged 57,
Non-Executive Chairman *
Mr Irens joined the Board as Non-Executive
Chairman on 7 January 2000. He was
previously Chairman of Cannons Group plc.
He is a Non-Executive Director of Urbium plc
and the Evolution Group plc, and a Director
of a number of other unlisted companies.
4. Malcolm Aldis, aged 50,
Divisional Managing Director,
Human Resources Systems Division
Mr Aldis was promoted to the Board on 27
May 2004. He has been Managing Director of
Northgate’s Human Resources Systems
(HRS) division since 1998 and has overseen
the rapid growth of this division and the
integration of RebusHR into the Group.
7. David Hodgson, aged 47,
Non-Executive Director
Mr Hodgson was appointed a Non-Executive
Director on 27 May 2004. He is a Partner at
General Atlantic Partners, the IT investment
firm which has an approximately 14% stake
in Northgate. He serves as a Director of a
number of public and private information
technology companies.
2. Chris Stone, aged 41,
Chief Executive
Mr Stone was appointed a Director and Chief
Executive on 31 October 1999. He was
formerly with Accenture where he was an
associate partner. He previously held senior
management positions with Digital
Equipment Corporation UK and EDS.
5. David Meaden, aged 42,
Divisional Managing Director,
Public Services Division
Mr Meaden was promoted to the Board on 27
May 2004. He has been Managing Director of
Northgate’s Public Services division since
May 2001, with overall responsibility for
Northgate’s development in the local
government, criminal justice and public
safety markets.
8. Sir Stephen Lander, aged 56,
Non-Executive Director *
Sir Stephen was appointed a Non-Executive
Director on 29 January 2004. He was
previously Director-General of the Security
Service from 1996 until 2002. He also sits on
the Board of HM Customs & Excise, and is an
adviser to Detica Limited and De La Rue
Limited.
3. John Stier, aged 38,
Group Finance Director and Company
Secretary
Mr Stier was promoted to Group Finance
Director on 15 May 2003. Prior to joining
Northgate, he held senior financial positions
with Thames Water plc and Shanks plc.
6. Jack Fryer, aged 65,
Non-Executive Director *
Mr Fryer was appointed a Non-Executive
Director on 15 December 1999. He was
previously with Marconi, Lucas Industries,
Rank Xerox and Rolls Royce. He is also
Chairman of Celoxica Limited.
9. Nick Starritt, aged 50,
Non-Executive Director **
Mr Starritt was appointed a Non-Executive
Director on 27 May 2004. His experience
includes four years as the Group Vice-
President of Human Resources for BP plc; he
was also a Non-Executive Director of
RebusHR before its acquisition by Northgate.
He is European Managing Director of Sirota
Consulting Limited.
* Member of the Audit Committee, Remuneration Committee and Nomination Committee. ** Member of the Remuneration Committee and Nomination Committee
12 3
45 6
78 9 Introduction
In July 2003, revisions to the Combined Code were published to consolidate guidance issued by Higgs and Smith. The new code will
take effect for Northgate Information Solutions’ 2004/2005 financial year, although Northgate has already identified the main issues
which need to be addressed and has taken appropriate steps towards compliance where required.
Corporate Governance – Statement of Compliance with the Provisions of the Combined Code
Non-Executive Directors are required, under their terms of employment, to give six months notice of their intent to step down from
the Board; this allows Northgate to plan for orderly succession.At the end of the AGM on 25 September 2003, a Non-Executive Director
of Northgate, Dr. Duncan Hine, stepped down as a replacement Non-Executive had been identified, accepted by the Nomination
Committee and the Board and had been offered the post. Due to unforeseen circumstances, the replacement Non-Executive was unable
to join the Northgate Board and therefore excluding the Chairman, the Audit Committee meeting and Board meeting that followed the
AGM comprised of only one independent Non-Executive Director rendering Northgate temporarily non-compliant with the Combined
Code. Dr. Hine therefore agreed to re-join the Board as a Non-Executive Director until a replacement was appointed.
It is of the utmost importance to Northgate that Non-Executive Directors have the necessary background and skills to fulfil the
requirements of such a position and Sir Stephen Lander was appointed to the Board as a Non-Executive Director in January 2004 when
Dr. Hine stepped down.
Northgate is committed to high standards of corporate governance and for the remainder of the year has applied the Combined Code
principles by retaining 100% Non-Executive membership of the principal Corporate Governance Committees (Audit, Remuneration and
Nomination).
This Corporate Governance statement is intended to highlight the most important ways in which the principles have been applied.
The Board of Directors
As at 30 April 2004, the Board comprised five Directors, three of whom were Non-Executive, totally independent, have no day-to-day
management responsibilities within the Group and are free from any conflicts of interest. Since the year end, another four Directors
have been appointed, two of whom are Non-Executive.
The Board leads and maintains effective control over Northgate’s activities. The Directors’ biographies appear on page 12 and the se
demonstrate that the Board has within it the necessary range of backgrounds, qualities and experience to lead the Company. Northgate
has separate posts of Chairman and Chief Executive to differentiate the running of the Board from the executive responsibility for the
running of the Company’s businesses. In addition to the Non-Executive Chairman and the Chief Executive, the Board consists of three
other Executive Directors and four other Non-Executive Directors.
New Board appointments are selected through the Group’s Nomination Committee and approved by the Board. On appointment, new
Board members are familiarised with the business and, on an ongoing basis, managers of the business present to the Board to explain
the initiatives they are undertaking or planning and certain key internal projects report to sub-committees of the Board. In addition,
suitable training is provided to new Board members as required.
All Directors are subject to election by shareholders at the first opportunity after their appointment by the Board and to re-election at
general meetings at least every three years. Attendance is expected at all Board meetings by all Directors except in special
circumstances. The Board is supplied with appropriate information to enable it to discharge its duties.
Members of the Board meet at least twelve times a year, with twelve formal Board meetings. The Board has a schedule of matters
specifically reserved to it for decision, including strategy, financial policy and major acquisitions and disposals. There is a cl ear division
of roles and responsibilities between the Chairman and Chief Executive. The Board considers that the Non-Executive Directors as a
group are of a sufficient calibre and number to bring strength of independence to the Board and has nominated J R Fryer as the most
senior independent Director other than the Chairman.
All the Directors have access to the advice and services of the Company Secretary and the Board has, by means of the Audit Committee,
established a procedure for any Director, if necessary, to take independent professional advice at the Group’s expense. The Compan y
Secretary ensures that Board procedures are followed and that applicable rules and regulations are complied with.
CORPORATE GOVERNANCE 13
NORTHGATE INFORMATION SOLUTIONS PLC CORPORATE GOVERNANCE 14
NORTHGATE INFORMATION SOLUTIONS PLC
The Board believes that progressive organisations appreciate the challenge of operating in today’s business environment and par ticularly
the requirement for more transparency in determining Board memberships and assessing the performance of Directors. Therefore, dur ing
the year, Northgate completed self-assessment performance evaluations of the Board, its Committees and its individual Directors.
Principal Board committees
Audit Committee
This Committee assists the Board in fulfilling its overview responsibilities, primarily reviewing the reporting of financial and non-financial
information to shareholders, the systems of internal control and risk management and the audit process. It comprises N J Irens, Sir
Stephen Lander and J R Fryer, and is chaired by Sir Stephen Lander. The Committee meets at least four times a year. Normally the C hief
Executive Officer, Group Finance Director and Group Audit Manager attend the meetings. However, the Committee is empowered to
meet without Executive Board members present.
Northgate has an Internal Audit function that provides the Audit Committee with independent, objective assurance regarding internal
controls and risk management processes. Northgate has also implemented a formal whistleblowing policy and process that allows staff
to raise concerns, in confidence, regarding possible improprieties.
In addition to their statutory audit responsibilities, the Group will typically use the auditors for other work that they are well placed to
undertake. This includes work in respect of acquisitions and disposals, pension scheme and other ancillary audit work and tax
compliance. In such circumstances, due consideration is given to the impact of the assignment on the independence of the Auditors
and to their qualifications to carry out the role. Having given consideration to the extra work undertaken by the Auditors and after
careful discussion with the responsible partners and the Executive Directors, the Audit Committee is satisfied as to the independence
of the statutory Auditors.
Remuneration Committee
This Committee ensures the Executive Directors and senior management are appropriately rewarded, giving due regard to the financ ial
and commercial health of the Group. It comprises N J Irens, Sir Stephen Lander, J R Fryer and N Starritt, and is chaired by J R Fryer. The
Committee meets at least twice a year. When necessary, the Remuneration Committee is independently advised by remuneration
consultants. The Directors’ Remuneration Report is given on page 16.
Nomination Committee
This Committee keeps under review the Board structure, size and composition. It selects and proposes to the Board suitable candid ates
for appointment as Directors of the Group and considers Board succession plans. It comprises N J Irens, Sir Stephen Lander, J R Fryer
and N Starritt, and is chaired by N J Irens. The Committee meets as required. In line with best practice, Northgate does not consid er
internal candidates or employees that have left the company within the last five years, for appointment as Non-Executive Directors of
the Board.
Shareholder Relations
The Group is committed to ongoing regular communication with shareholders. This is achieved principally through regular financia l
reports and the AGM, and information is regularly published on the Group’s website at www.northgate-is.com
Regular dialogue and presentations take place throughout the year with institutional investors. At the AGM, all shareholders attending
have the opportunity to ask questions of the full Board including the Chairmen of the Audit, Remuneration and Nomination
Committees.
Responsibility for risk and internal control
The Group’s overriding objective is to maximise long-term shareholder value whilst exceeding the needs of customers, employees a nd
partners. In doing so, the Directors recognise that creating value is the reward for taking and accepting risk.
The Board has overall responsibility for the Group’s approach to assessing risk and the systems of internal control, and for mon itoring
their effectiveness in providing shareholders with a return that is consistent with a responsible assessment and mitigation of risks. This
includes reviewing financial, operational and compliance controls and risk management procedures. The role of executive managemen t
is to implement the Board’s policies on risk and control and present assurance on compliance with these policies. Further independent
assurance is provided by an internal audit function which operates across the Group, and the external auditors. All employees are
accountable for operating within these policies. Because of the limitations that are inherent in any system of internal control, this system is designed to manage, rather than eliminate,
the risk of failure to achieve corporate objectives.Accordingly, it can only provide reasonable but not absolute assurance against material
misstatement or loss.
Risk assessment
The Board has established an ongoing process for identifying, evaluating and managing the significant risks faced by the Group. A s an
integral part of planning and review, management from each business area identify their risks, the probability of those risks occurring,
the impact if they do occur and the actions/strategy being taken to manage those risks to the desired level. This information is
communicated upwards on a filter basis, culminating in a discussion of the Group Risk Profile by the Board.
This process has operated for the year under review and will continue going forward. It has been reviewed by the Board and accor ds
with the Internal Control Guidance for Directors in the Combined Code.
Internal Control
Whilst the Board maintains full control and direction over appropriate strategic, financial, organisational and compliance issues,it has
delegated to executive management the implementation of the systems of internal control within an established framework.
The Board has put in place an organisational structure with formally defined lines of responsibility and delegation of authorit y. There
are also established procedures for planning, capital expenditure, information and reporting systems and for monitoring the Group’s
businesses and their performances. These include:
• review of divisional operating plans with the relevant Executive Directors prior to submission to the Board for approval;
• regular consideration by the Board of year-end forecasts;
• monthly comparison of each operating division’s actual financial performance with budget;
• operating policies and procedures;
• regular reporting of accounting and legal developments to the Board.
Assurance
On behalf of the Board, the Audit Committee examines the effectiveness of the Group’s:
• assessment of risk by reviewing evidence of risk assessment activity and a report from internal audit on the risk assessment process.
• systems of internal control primarily through agreeing the scope of the internal audit programme and reviewing its findings, reviews
of the annual and interim financial statements and a review of the nature and scope of the external audit.
Any significant findings or identified risks are closely examined so that appropriate action can be taken. The work of the inter nal audit
department is focused on areas of priority as identified by the risk analysis and in accordance with the annual audit plan approved by
the Audit Committee and the Board. External auditors are engaged to express an opinion on the financial statements. They review a nd
test the systems of internal financial control and the data contained in the financial statements to the extent necessary to express their
audit opinion. They discuss with management the reporting of operational results and the financial position of the Group and pre sent
their findings to the Audit Committee.
The Directors, through the Audit Committee, have reviewed the effectiveness of the Group’s systems of internal control.
Compliance with the Combined Code
The Directors confirm that, for the year ended 30 April 2004, the Group complied with all the Code provisions, with the exception of
the matter disclosed above.
Going Concern
After making appropriate enquiries, the Directors believe it is reasonable to expect that the Group has adequate resources to continue
in operation for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the accounts.
By order of the Board
J R Stier 
Secretary
28 June 2004
CORPORATE GOVERNANCE 15
NORTHGATE INFORMATION SOLUTIONS PLC Introduction
This report is made by the Board on the recommendation of the Remuneration Committee, to whom the Board has formally delegated
its authority to establish policy in respect of all terms of employment for the Executive Directors and in accordance with Sch.7(A) of
the Companies Act 1985 as amended by the Directors’ Remuneration Report Regulations 2002. The first part of the report provides
details of Northgate’s remuneration policy. The second part provides details of the remuneration and share interests of the Dire ctors
for the year ended 30 April 2004.
The Remuneration Committee, which is chaired by J R Fryer, comprises J R Fryer, N J Irens, N Starritt and Sir Stephen Lander, who ar e
all independent Non-Executive Directors. It is responsible, on behalf of the Board as a whole, for determining the contract terms,
remuneration and other benefits, including performance-related bonus schemes and share option schemes, for the Executive Directors.
D Knight, Human Resources Director, provides advice and information to the Committee when required. In addition, Messrs. Linklaters
provided advice during the year in respect of performance criteria for share options, having been appointed by the Board.
The remuneration of Non-Executive Directors is fixed by the Board. Directors do not participate in decisions regarding their
own remuneration.
The Remuneration Committee is consulted in accordance with Section B2 of the Combined Code published by the Hampel Committee.
The Remuneration Committee met four times during the year.
Remuneration policy
Objectives
The objectives of the remuneration policy for Executive Directors are:
• the total remuneration package should be competitive to attract, motivate and retain Directors of a high calibre;
• remuneration should use a combination of performance driven cash and equity-based rewards in addition to base salary and
benefits; and
• the performance driven rewards should potentially form a significant portion of total rewards, to motivate the highest performance
and align the interests of the Executives with those of the shareholders.
The remuneration of Executive Directors is set by reference to the market after giving full consideration to Section B of the C ombined
Code. The overall remuneration package can consist of a base salary, annual bonus, pension rights, share options and car, medical an d
life assurance benefits. It is the policy of the Committee to review the remuneration package offered to the Directors on an ongoing
basis and make recommendations for changes where it is considered appropriate. Performance-related pay represents a significant
proportion of the total remuneration package. The fees of the Non-Executive Directors are set in line with market rates.
Base Salary
In setting the base salary for the Executive Directors, the Remuneration Committee reviews relevant market data and considers the
Director’s experience, performance and responsibilities, both internally and in comparison to similar companies in the IT sector. Each of
the Director’s base salary is generally reviewed on an annual basis or following a significant change in responsibilities.
Annual Bonus
Bonuses are determined by reference to base salary, the achievement of the annual operating plan agreed by the full Board each year
and the successful completion of specific corporate objectives. It is the policy of the Committee to keep under review the objectives
set and the proportions of base salary payable.
Bonuses are not pensionable. The Non-Executive Directors are not entitled to a cash bonus.
Pension and other benefits
The Executive Directors of Northgate Information Solutions plc are entitled to become members of the Group’s pension scheme, det ails
of which are set out in note 29, or to have comparable pension contributions made to a personal pension scheme on their behalf. No
pension contributions are made on behalf of the Non-Executive Directors.
Other benefits provided consist of a car or allowance towards vehicle running costs and medical/life assurance benefits. Pension and
other benefits provided are subject to regular review by the Company to ensure that they remain attractive and competitive.
DIRECTORS’ REMUNERATION REPORT 16
NORTHGATE INFORMATION SOLUTIONS PLC Share Options
Share options are granted on the recommendation of the Committee and are ratified by the Board on a discretionary basis. Under the
terms of the 1999 Executive Share Option Scheme, options are awarded to Executive Directors, based on the market price at the time
of grant. These options can normally be exercised between the third and tenth anniversaries of the date of grant, subject to the
achievement of certain performance conditions.
It is the policy of the Remuneration Committee to consider and approve performance conditions for each eligible employee on an
individual basis, taking into account the employee’s specific job responsibilities and objectives, together with market and other conditions
at the time the award is made. Consistent with Shareholder Approval given on 23 November 1999, exercise of a proportion of the options
awarded to eligible employees is not necessarily subject to share price performance conditions. Exercise of the remaining proportion of
the options is generally subject to stepped performance conditions, increasing potential reward in line with performance.
In line with best practice and guidelines, the Remuneration Committee agreed that, as from 15 December 2003, all options issued will
have performance criteria set. After detailed benchmarking and consultation with the Company’s advisers, these are currently being set
at total shareholder return of RPI plus 8% p.a. over a three-year vesting period. If shareholders get a return less than this over the period
then options will lapse. The Group views this as challenging criteria to help align employee and shareholder interests.
ABI guidelines and best practice suggests that a company should be able to issue options up to 10% of its share capital. The Nor thgate
scheme was put in place in 1999 when the Group was in serious financial difficulties and needed to attract high quality management.
With the approval of shareholders at the time, the Group secured the services of C M R Stone, the current Chief Executive. Mr Stone
was awarded approximately 17 million options at a time when the option scheme did not require performance criteria to be set for all
options. This issue in turn led the Company to acquire shareholder approval to issue options up to 15% of its share capital, ther eby
permitting a number of other senior managers to be incentivised over the medium term. This is seen as being integral to the subs tantial
growth in profitability and share price since 1999.
The mechanics of the option scheme are such that, when options are exercised, the Company issues shares to the value of any gain made
rather than issue the number of shares over which options are held. This reduces any dilution of earnings to well below 15%. For example,
if 1,000 options are granted at 35p and subsequently exercised at a share price of 70p, 500 shares would be issued rather than 1,000,
as below:
(35p x 1,000) this equates to only 50% of the options issued.
70p
The Directors have calculated that, if all of the 51,346,244 options in issue at 30 April 2004 were capable of exercise, and had been
exercised at that date when the Company’s share price was 68 pence, a total of 29,929,947 shares would have been issued as a result.
This would mean that the Company’s issued share capital at that date would have been increased by 4.4 per cent.
All of the Executive Directors may participate in the Savings Related Share Option Scheme. This scheme is an all-employee scheme ,for
which performance conditions do not apply.
Service Contracts 
For Executive Directors, it is the policy of the Company that service contracts do not have notice periods by the Company in excess of
one year, and by the Executive Director in excess of six months. The contracts are ongoing with no fixed termination date. On earl y
termination, the Company is entitled to make payments to the Executive Director of sums equal to the value of his salary and other
benefits in lieu of the required period of notice.
DIRECTORS’ REMUNERATION REPORT 17
NORTHGATE INFORMATION SOLUTIONS PLC A summary of the service contract details relating to each Executive Director who served during the year is as follows:
Date of contract Unexpired term Notice period Provision for compensation
C M R Stone 29 October 1999 Rolling contract 12 months Refer to note (a) below
G J Bicknell (note (b)) 15 May 2000 Rolling contract 12 months Refer to note (a) below
J R Stier (note (b)) 12 May 2003 Rolling contract 12 months Refer to note (a) below
Notes:
(a) The service contracts of C M R Stone and J R Stier continue until terminated by the Company giving not less than twelve mon ths
or the Executive Director giving not less than six months notice in writing. In the event of early termination by the Company, an
Executive Director is entitled to receive his basic salary, benefits and any bonus that may be accrued during the notice period.
(b) G J Bicknell stepped down from the Board on 15 May 2003. He continues to provide an advisory service to the Company. J R Stier
was appointed to the Board on 15 May 2003.
A summary of the letters of appointment relating to each Non-Executive Director who served during the year is as follows:
Date of letter Unexpired period
of appointment of current three year Provision for
appointment Notice period compensation 
N J Irens 21 December 1999 1 year, 6 months 6 months Refer to note (a) below
(note (b))
J R Fryer 23 November 1999 1 year, 5 months 6 months Refer to note (a) below
Dr D Hine (note (c)) 29 August 1996 Refer to note (c) below 6 months Refer to note (a) below
Sir Stephen J Lander 27 November 2003 2 years, 8 months 6 months Refer to note (a) below
(note (b))
Notes:
(a) The letters of appointment for the Non-Executive Directors do not have notice periods exceeding six months by either party. They
are normally for an initial term of three years, and are renewable for three year periods thereafter. The letters of appointment do
not contain provisions in relation to payments on early termination.
(b) Effective start date of Mr Irens was 7 January 2000; that of Sir Stephen Lander on 2 February 2004.
(c) Dr Hine stepped down from the Board on 25 September 2003. He temporarily rejoined on 9 December 2003, stepping down again
on 29 January 2004.
All Directors are subject to re-election every three years.
DIRECTORS’ REMUNERATION REPORT 18
NORTHGATE INFORMATION SOLUTIONS PLC Total Shareholder Return
This graph demonstrates Northgate’s Total Shareholder Return ("TSR") in relation to the FTSE Small Cap index. TSR performance is being
measured against the FTSE Small Cap index as the Company considers that this group represents the most appropriate peer group against
which to measure the Company’s performance. The appropriateness of this comparison will be reviewed on a regular basis.
T Th he e  r re em ma ai in nd de er r  o of f  t th hi is s  r re ep po or rt t  p pr ro ov vi id de es s  d de et ta ai il ls s  o of f  t th he e  r re em mu un ne er ra at ti io on n  a an nd d  s sh ha ar re e  i in nt te er re es st ts s  o of f  t th he e  D Di ir re ec ct to or rs s  f fo or r  t th he e  y ye ea ar r  e en nd de ed d  3 30 0  A Ap pr ri il l
2 20 00 04 4  a an nd d  i is s  a au ud di it te ed d  i in nf fo or rm ma at ti io on n. .
DIRECTORS’ REMUNERATION REPORT 19
NORTHGATE INFORMATION SOLUTIONS PLC
Northgate Information Solutions FTSE Small Cap
50
150
200
250
£
30/4/99 30/4/00 30/4/01 30/4/02 30/4/03 30/4/04
100 Directors’ Remuneration
The remuneration of the Directors for the year ended 30 April 2004 is analysed as follows:
Base salary Annual Compensation in Y Ye ea ar r  e en nd de ed d Year ended 
or fees bonuses Benefits lieu of notice 3 30 0  A Ap pr ri il l  2 20 00 04 4 30 April 2003
££££ £ £ £
Executive 
C M R Stone 338,661 200,000 80,436 - 6 61 19 9, ,0 09 97 7 402,178
G J Bicknell 10,542 20,000 653 - 3 31 1, ,1 19 95 5 390,084
J R Stier 106,629 107,000 10,299 - 2 22 23 3, ,9 92 28 8 -
Non-Executive
N J Irens 73,292 - - - 7 73 3, ,2 29 92 2 66,820
Dr D Hine 14,083 - - 18,000 3 32 2, ,0 08 83 3 23,130
J R Fryer 24,125 - - - 2 24 4, ,1 12 25 5 23,130
Sir Stephen Lander 9,000 - - - 9 9, ,0 00 00 0 -
2004 Total 576,332 327,000 91,388 18,000 1 1, ,0 01 12 2, ,7 72 20 0
2003 Total 577,238 45,000 97,446 185,658 - - 905,342
Benefits include a car or an allowance towards vehicle running costs and medical/life assurance benefits.
G J Bicknell stepped down from the Board on 15 May 2003. Under the terms of his service contract, the Company made payments to
him in lieu totalling £185,658 during the year ended 30 April 2003.
Pensions
The Executive Directors of Northgate Information Solutions plc are entitled to become members of the Group’s pension scheme.
C M R Stone is not a member of the Group pension scheme and the Company has therefore made payments totalling £19,261
(2003: £19,080) into a personal pension scheme on his behalf in lieu of contributions to the Group scheme.
Details of the pensions earned by the Executive Directors are shown below:
Gross increase Increase in Total accrued Value of net Total change Value of accrued Value of accrued
in accrued accrued pension pension at increase in accrual in value pension at pension at
pension net of inflation 30 April 2004 over period during period 30 April 2004 30 April 2003
(A) (B) (C) (D) (E) (F) (G)
G J Bicknell £333 £153 £6,756 £1,623 £9,395 £92,128 £82,275
J R Stier £2,582 £2,490 £5,858 £2,194 £3,898 £25,116 £12,736
Notes:
(a) Pension accruals shown are the amounts which would be paid annually on retirement based on service to the end of the year. Th e
total accrued pension (C) for G J Bicknell is the pension accrued to the date he ceased to be a Director (15 May 2003), plus the
revaluation from that date up to 30 April 2004. This revaluation will not be formally credited until 15 May 2004.
(b) Transfer values (F) and (G) have been calculated in accordance with version 8.1 of guidance note GN11 issued by the actuaria l profession.
(c) The value of net increase (D) represents the incremental value to the Director of his service during the year, calculated on the
assumption service terminated at the year end for J R Stier, and as at 15 May 2003 for G J Bicknell. It is based on the accrued pension
increase (B) after deducting the Director’s contributions.
(d) The change in the transfer value (E) includes the effect of fluctuations in the transfer value due to factors beyond the con trol of the
Company and Directors, such as stock market movements. It is calculated after deducting the Director's contribution.
(e) Voluntary contributions paid by Directors and resulting benefits are not shown.
(f) The Directors’ benefits are based on uncapped Pensionable Salary figures, as the Company has agreed to augment their benefits.
DIRECTORS’ REMUNERATION REPORT 20
NORTHGATE INFORMATION SOLUTIONS PLC Directors’ Shareholdings
The interests of the Directors at 30 April 2004 in the share capital of the Company, all of which were beneficially owned, were a s follows:
3 30 0  A Ap pr ri il l  2 20 00 04 4 30 April 2003
O Or rd di in na ar ry y  S Sh ha ar re es s Ordinary Shares
o of f  1 10 0p p  e ea ac ch h of 10p each
N J Irens 2 25 54 4, ,2 20 00 0 100,000
C M R Stone 5 54 45 5, ,9 92 26 6 366,726
J R Stier 5 55 5, ,9 90 00 0 -
J R Fryer 3 30 08 8, ,0 00 00 0 128,800
Sir Stephen Lander --
Beneficial shareholdings include those of the Directors and their spouses. There have been no changes in the Directors’ share int erests
during the period from 1 May 2004 to the date of this report.
Interests in Share Options
The following Directors, at 30 April 2004, have options to subscribe for Ordinary Shares of 10p each in the Company:
At 
1 May 2003 
or date of At Exercise Date first
appointment Granted 30 April 2004 price exercisable Expiry date
C M R Stone 17,008,691 - 17,008,691 20.87p 23.11.02 23.11.09
2,590* - 2,590 26.40p 01.04.05 01.10.05
- 1,666,667 1,666,667 50.90p 17.12.06 17.12.13
- 1,666,667 1,666,667 67.87p 29.01.07 29.01.14
J R Stier 90,000 - 90,000 69.00p 26.02.04 26.02.11
10,000 - 10,000 44.75p 28.06.04 28.06.11
2,590* - 2,590 26.40p 01.04.05 01.10.05
100,000 - 100,000 29.00p 25.07.05 25.07.12
- 500,000 500,000 28.17p 27.06.06 27.06.13
- 520,833 520,833 50.90p 17.12.06 17.12.13
- 520,833 520,833 67.87p 29.01.07 29.01.14
* Options granted under the Savings Related Share Option Scheme
DIRECTORS’ REMUNERATION REPORT 21
NORTHGATE INFORMATION SOLUTIONS PLC DIRECTORS’ REMUNERATION REPORT 22
NORTHGATE INFORMATION SOLUTIONS PLC
Interests in Share Options (continued)
In respect of share options granted to the Directors, entitlements to exercise the options are subject to achievement of certain
performance conditions as described in detail below:
D Da at te e  o of f  G Gr ra an nt t N No ot te e C C  M M  R R  S St to on ne e J J  R R  S St ti ie er r M M  S S  A Al ld di is s D D  J J  M Me ea ad de en n
31 January 1996 (a) - - 13,043 7,826
4 September 1997 (a) - - 39,130 13,043
20 March 1998 (a) - - 20,870 -
18 September 1998 (a) - - 35,083 20,870
22 March 1999 (a) - - - 36,522
23 November 1999 (b) 17,008,691 - - -
9 December 1999 (b) - - 521,739 521,739
21 December 2000 (c) - - 50,000 -
26 February 2001 (d) - 90,000 - -
28 June 2001 (d) - 10,000 178,261 278,261
13 December 2001 (e) - - 100,000 -
25 July 2002 (f) - - 400,000 200,000
25 July 2002 (g) - 100,000 - -
27 June 2003 (h) - - 150,000 250,000
27 June 2003 (i) - 500,000 - -
17 December 2003 (j) 1,666,667 520,833 652,864 583,333
29 January 2004 (j) 1,666,667 520,833 652,864 583,333
P Pe er rf fo or rm ma an nc ce e  C Co on nd di it ti io on ns s
(a) Exercise of the options is dependent on their being an increase in earnings of at least 10% per annum compound over any period
of three consecutive financial years, starting with the financial year in which the date of grant falls or any other subsequent financial
year starting on or after the date of grant and ending before the date on which the option is exercised. The compounding takes a s a
base notional earnings of £6.54m for the year to December 1997.
(b) Exercise of 40% of the options is not subject to specific performance conditions. Dependent on the mid-market price of the
Company’s shares averaging between at least 35 pence and 55 pence over a six month period prior to exercise, proportions of the
remaining options are exercisable up to a maximum of 60%.
(c) Exercise of the options is dependent on the average mid-market price of the Company’s shares over a six month period prior to
exercise exceeding 75 pence, and whether certain business unit growth targets for the 2001/2002 financial year compared to the
preceding financial year were achieved.
(d) Exercise of the options is dependent on the mid-market price of the Company’s shares averaging at least 75 pence over a six month
period prior to exercise.
(e) Exercise of 40% of the options is dependent on the mid-market price of the Company’s shares over a six month period prior to
exercise exceeding 55 pence. Exercise of 20% of the options is dependent on the mid-market price of the Company’s shares over a six
month period prior to exercise exceeding 65 pence. Exercise of 40% of the options is dependent on the mid-market price of the
Company’s shares over a six month period prior to exercise exceeding 75 pence. All exercises are further dependent on whether certain
business unit profit targets for the 2001/2002 financial year were achieved.
(f) Exercise of 40% of the options is dependent on whether certain business unit contribution targets for 2002/2003 were achieved.
Exercise of proportions of the remaining 60% of the options is further dependent on the mid-market price of the Company’s shares
over a six month period prior to exercise averaging between at least 55 pence and 75 pence. (g) Exercise of 40% of the options is dependent on the adjusted EPS of the Group as calculated in the 2001/2002 accounts growing at
a compound rate greater than 15% per annum by the date that the options become exercisable. Exercise of proportions of the
remaining options are further dependent on the mid-market price of the Company’s shares averaging between at least 55 pence and
75 pence over a six month period prior to exercise.
(h) Exercise of 40% of the options is dependent on exceeding certain business unit performance measures compared to budget for
2003/2004. Exercise of proportions of the remaining 60% of the options is further dependent on the mid-market price of the
Company’s shares over a six month period prior to exercise averaging between at least 40 pence and 60 pence.
(i) Exercise of 40% of the options is not subject to specific performance conditions. Dependent on the mid-market price of the
Company’s shares averaging between at least 40 pence and 60 pence over a six month period prior to exercise, proportions of the
remaining options are exercisable up to a maximum of 60%.
(j) Exercise of the options is dependent on the Company’s shares showing a Cumulative Total Shareholder Return of at least 8% p lus
RPI per year within three years of the date of Grant, using the Option Price as the starting point. For the purposes of this condition,
"Cumulative Total Shareholder Return" can be the increase in Share Price, the value of the dividend(s) per share paid or a combi nation
of the two.Whether this condition is met will be determined by taking the highest consecutive 90 day average mid-market closing share
price over the three years and adding any dividend per share paid in the same period.
The interests in share options detailed above include those of the Director and his immediate family.
These performance conditions are considered appropriate because they provide challenging but achievable targets in order to inc entivise the
holder to work towards and achieve Company/shareholder expectations. In assessing whether the performance conditions have been met, the
Remuneration Committee considers whether the criteria for successful completion of each individual condition have been achieved or exceeded.
These methods of assessment were chosen because they provide a clearly defined process for the Remuneration Committee to determ ine
successful completion of each condition and are consistent with other performance monitoring procedures used within the Company as a whole.
No options were exercised by the Directors during the year ended 30 April 2004 (2003: none).
The market price of the Company’s shares at 30 April 2004 was 68.00p and the range during the year ended 30 April 2004 was 23.0 0p to 72.25p.
The Register of Directors’ Interests contains full details of Directors’ shareholdings and options to subscribe for shares and is available
for inspection at the Registered Office of the Company.
This report was approved by the Board of Directors on 28 June 2004 and has been signed on its behalf by:
J R Stier
Secretary
28 June 2004
DIRECTORS’ REMUNERATION REPORT 23
NORTHGATE INFORMATION SOLUTIONS PLC The Group is an Information Technology service provider and, as such, the Group’s operations are of minimal environmental impact.
However, the Group recognises that its activities will nevertheless have an influence on the environment and has adopted the following
environmental policy:
• meet the statutory requirements placed upon us
• recycle as much of the Group’s waste products as is economically practicable
• encourage reduction in the use of non-renewable resources
• dispose of those items that cannot be recycled in an environmentally friendly manner
• reflect the environmental concerns and statutory obligations of customers in the solutions we provide
The Group is an equal opportunities employer. This means that the Group is committed to a policy of treating all its employees, w orkers
and job applicants equally. The Group does not discriminate against any employee, worker or job applicant on grounds of their col our,
nationality, national or ethnic origin (together referred to in this policy as "race"), gender, marital status, sexual orientation, religion,
hours of work, age or disability.
ENVIRONMENTAL POLICY 24
EQUAL OPPORTUNITIES POLICY
NORTHGATE INFORMATION SOLUTIONS PLC The following statement should be read in conjunction with the Independent Auditors’ Report set out on page 26.
Company law requires the Directors to prepare accounts for each financial period which give a true and fair view of the state of affairs
of the Company and Group and of the profit or loss for that period. In preparing these accounts, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in
the accounts; and
• prepare the accounts on the going concern basis unless it is inappropriate to presume that the Company and the Group will
continue in business.
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the fin ancial
position of the Company and which enable them to ensure that the accounts comply with the Companies Act 1985. They also 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 25
NORTHGATE INFORMATION SOLUTIONS PLC We have audited the accounts on pages 27 to 60. We have also audited the information in the Directors’ Remuneration Report that is
described as having been audited.
This report is made solely to the Company’s members, as a body, in accordance with Section 235 of the Companies Act 1985. Our audi t
work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to a nyone
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 and the Directors’ Remuneration Report. As described on page 25 thi s
includes responsibility for preparing the accounts 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, the Listing
Rules of the Financial Services Authority, and by our profession’s ethical guidance.
We report to you our opinion as to whether the accounts give a true and fair view and whether the accounts and the part of the
Directors’ Remuneration Report to be audited have been 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 accounts, 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 review whether the statement on pages 13 to 15 reflects the Company’s compliance with the seven provisions of the Combined
Code specified for our review by the Listing Rules, and we report if it does not. We are not required to consider whether the Board’s
statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the Group’s corporate governance
procedures or its risk and control procedures.
We read the other information contained in the Annual Report, including the Corporate Governance statement and the unaudited part
of the Directors’ Remuneration Report, and consider whether it is consistent with the audited accounts. We consider the implications
for our report if we become aware of any apparent misstatements or material inconsistencies with the accounts.
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 accounts and the part of the Directors’ Remuneration Report to be
audited. It also includes an assessment of the significant estimates and judgements made by the Directors in the preparation of the accounts,
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 accounts and the part of the Directors’ Remuneration Report to be audited
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 accounts and the part of the Directors’ Remuneration Report to be audited.
Opinion
In our opinion:
- the accounts give a true and fair view of the state of affairs of the Company and the Group as at 30 April 2004 and of the loss of the
Group for the year then ended;
- the accounts and the part of the Directors’ Remuneration Report to be audited have been properly prepared in accordance with the
Companies Act 1985.
KPMG Audit Plc
Chartered Accountants
Registered Auditor
London
28 June 2004
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF NORTHGATE
INFORMATION SOLUTIONS PLC
26
NORTHGATE INFORMATION SOLUTIONS PLC Year ended Year ended
30 April 2004 30 April 2003
Notes £’000 £’000
Turnover
Existing operations 93,611 83,297
Acquisitions 42,853 -
Continuing operations 136,464 83,297
Discontinued operations - 1,918
Group turnover 2 136,464 85,215
Operating costs 3 (144,953) (86,456)
Operating profit before exceptional items and amortisation of goodwill:
Continuing operations 2 11,593 4,525
Discontinued operations 2 - 542
11,593 5,067
Exceptional items 3 (14,166) (5,995)
Amortisation of goodwill 2 (5,916) (313)
Group Operating Loss (8,489) (1,241)
Existing operations (after goodwill amortisation and exceptional items of £3,972,000 (2003: £6,308,000)) 3,106 (1,783)
Acquisitions (after goodwill amortisation and exceptional items of £16,110,000) (11,595) -
Continuing operations (8,489) (1,783)
Discontinued operations - 542
Operating loss (8,489) (1,241)
Share of operating profit of associates 59 -
Group operating loss, including associates (8,430) (1,241)
Profit on sale or termination of operations
- Discontinued operations 5 - 28,451
(Loss)/Profit on ordinary activities before interest (8,430) 27,210
Interest receivable 6 295 1,227
Interest payable and similar charges 7 (1,951) (328)
(Loss)/Profit on ordinary activities before taxation (10,086) 28,109
Taxation (charge)/credit on profit on ordinary activities 9 (7) 1,637
Retained (loss)/profit for the financial year 25 (10,093) 29,746
(LOSS)/EARNINGS PER ORDINARY SHARE
Basic 11 (2.96)p 10.45p
Diluted 11 (2.86)p 10.33p
Adjusted basic 11 2.81p 1.83p
Adjusted diluted 11 2.71p 1.81p
GROUP PROFIT AND LOSS ACCOUNT
for the year ended 30 April 2004
27
NORTHGATE INFORMATION SOLUTIONS PLC Year ended Year ended
30 April 2004 30 April 2003
£’000 £’000 
(Loss)/Profit for the financial year (10,093) 29,746
Currency translation differences on foreign currency net investments 195 245
Total recognised (losses) and gains for the year (9,898) 29,991
RECONCILIATIONS OF MOVEMENTS IN SHAREHOLDERS’ FUNDS
for the year ended 30 April 2004
Group Company
Year ended Year ended Year ended Year ended
30 April 2004 30 April 2003 30 April 2004 30 April 2003
Notes £’000 £’000 £’000 £’000
(Loss)/Profit for the financial year (10,093) 29,746 (14,315) 791
Other recognised gains for the year 195 245 - -
Adjustment to deferred purchase consideration - (200) - (200)
Credit/(charge) in respect of share related awards 25 3,598 (236) - -
New share capital issued (net of expenses) 24 122,296 169 122,296 169
Increase in shareholders’ funds 115,996 29,724 107,981 760
Opening shareholders’ funds 46,076 16,352 105,729 104,969
Closing shareholders’ funds 162,072 46,076 213,710 105,729
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the year ended 30 April 2004
28
NORTHGATE INFORMATION SOLUTIONS PLC Group Group Company Company
30 April 2004 30 April 2003 30 April 2004 30 April 2003
Notes £’000 £’000 £’000 £’000
Fixed assets
Intangible assets 12 231,727 6,788 - -
Tangible assets 13 29,446 5,032 - -
Investments in associate 14 1,093 - - -
Other investments 14 1,020 1,098 245,665 78,626
263,286 12,918 245,665 78,626
Current assets
Stocks - goods for resale 353 424 - -
Debtors – due within one year 15 51,835 22,212 34,569 30,940
Debtors – due after one year 15 16,711 11,880 - -
Cash at bank and in hand 2,447 39,377 - 1,063
71,346 73,893 34,569 32,003
Creditors: amounts falling due within one year 16 (68,160) (11,077) (51,629) (4,887)
Net current assets/(liabilities) 3,186 62,816 (17,060) 27,116
Total assets less current liabilities 266,472 75,734 228,605 105,742
Creditors: amounts falling due after more than one year 17 (14,183) (48) (14,067) -
Provisions for liabilities and charges 21 (29,923) (6,792) - -
Accruals and deferred income 22 (60,294) (22,818) (828) (13)
Net assets 162,072 46,076 213,710 105,729
Capital and reserves
Called up share capital 24 49,507 28,713 49,507 28,713
Share premium account 25 71,386 38,123 71,386 38,123
Merger reserve 25 68,401 162 68,401 162
Profit and loss account 25 (27,222) (20,922) 24,416 38,731
Shareholders’ funds – equity 162,072 46,076 213,710 105,729
Approved by the Board of Directors on 28 June 2004 and signed on its behalf by
C M R Stone 
Director
J R Stier
Director
BALANCE SHEETS
as at 30 April 2004 
29
NORTHGATE INFORMATION SOLUTIONS PLC Year ended Year ended
30 April 2004 30 April 2003
Notes £'000 £'000
Net Cash Inflow from Operating Activities 26(b) 13,730 4,131
Returns on investments and servicing of finance 26(a) (583) 1,181
Taxation 26(a) (351) (737)
Capital expenditure 26(a) (20,982) (2,707)
Acquisitions and disposals 26(a) (96,889) 26,058
Net (outflow)/inflow before financing (105,075) 27,926
Financing 26(a) 65,087 (417)
(Decrease)/Increase in cash in the year 26(c) (39,988) 27,509
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET (DEBT )/FUNDS
for the year ended 30 April 2004
Year ended Year ended
30 April 2004 30 April 2003
Notes £'000 £'000
(Decrease)/Increase in cash in the year 26(c) (39,988) 27,509
(Increase)/Decrease in borrowings (55,972) 451
Repayment of capital element of finance lease rentals 192 44
Change in net (debt)/funds resulting from cash flows (95,768) 28,004
Exchange differences - (19)
Finance leases acquired with subsidiary undertakings (630) (163)
Movement in net (debt)/funds (96,398) 27,822
Net funds at start of year 39,258 11,436
Net (debt)/funds at end of year 26(c) (57,140) 39,258
GROUP STATEMENT OF CASH FLOWS
for the year ended 30 April 2004 
30
NORTHGATE INFORMATION SOLUTIONS PLC 1. ACCOUNTING POLICIES
Accounting convention
The accounts are prepared under the historical cost convention and in
accordance with applicable accounting standards. The Group has followed
the transitional arrangements of FRS17 ‘Retirement Benefits’ in these
accounts. The Balance Sheet presentation has been changed to reclassify
accruals and deferred income as a separate item on the Balance Sheet.
The effect is to reduce the balances at 30 April 2003 for ‘Creditors:
amounts falling due within one year’ and ‘Creditors: amounts falling due
after more than one year’ by £22,622,000 (Company: £13,000) and
£196,000 (Company: £nil) respectively, with a corresponding increase in
the amount disclosed as ‘Accruals and deferred income’ at that date.
Basis of consolidation
The consolidated accounts incorporate the accounts of the Company and
each of its subsidiary undertakings for the year ended 30 April 2004.
Unless otherwise stated, the acquisition method of accounting has been
adopted. Under this method, the results of subsidiary undertakings
acquired or disposed of during the year are included from the date of
acquisition or up to the effective date of disposal. Under Section 230(4)
of the Companies Act 1985 the Company is exempt from the requirement
to present its own profit and loss account.
Goodwill
For acquisitions completed after 1 January 1998 purchased goodwill,
representing the excess of the fair value of the purchase consideration
over the fair value of the identifiable assets and liabilities acquired, is
included within intangible fixed assets and is amortised over the
estimated life for each separate acquisition. Goodwill arising on
acquisitions prior to 1 January 1998 remains eliminated against reserves.
This goodwill is recycled and charged or credited in the profit and loss
account on the subsequent disposal of the business to which it relates.
Investments
In the Company’s accounts, investments in subsidiary and associate
undertakings are stated at cost unless, in the opinion of the Directors,
there has been an impairment to their value in which case they are
immediately written down to their estimated recoverable amount.
In the consolidated accounts, shares in associated undertakings are
accounted for using the equity method. Goodwill arising on the acquisition
of an associate is capitalised as part of the carrying amount in the
consolidated balance sheet and amortised over its estimated useful life.
Other fixed asset investments are shown at cost less any provision for
impairment.
Recognition of revenue
Revenue on the outright sale of equipment and standard software, where
no significant vendor obligations exist, is recognised on despatch.
Revenue on non-standard software or where significant vendor
obligations exist, is recognised on customer acceptance.
Revenue from professional services (project management, implementation
and training) is recognised as the services are performed. Revenue from
software support and hardware maintenance agreements is recognised
rateably over the term of the agreement.
On contracts involving a combination of products and services, revenue is
recognised separately on each deliverable in accordance with the above
policy, unless all deliverables are considered to be interdependent when
revenue is recognised on final acceptance.
On major contracts extending over more than one accounting period,
revenue is taken based on the stage of completion when the outcome of
the contract can be foreseen with reasonable certainty and after allowing
for costs to completion.
Where equipment and software licences are sold on deferred payment
terms that include a financing element, the present value of the amounts
receivable, after calculating a deduction for maintenance, is recognised in
revenue. Interest income arising, which represents the turnover from this
financing operation, is included in revenue.
Where equipment in an equipment lease or the interest in a software
licence is sold to a finance company which then leases the equipment or
licences the software to a customer, revenue is taken on the sales value
after deferral of income for future maintenance, where applicable.
Provision for maintenance on equipment or software licences sold to finance
companies as described above is released to revenue over the period of the
contract. The related interest is charged to profit over the same period and
represents a constant proportion of the balance outstanding.
Stocks
Stocks are valued at the lower of cost and estimated net realisable value
after making due allowance for any obsolete or slow moving items.
Depreciation and amortisation
Depreciation/amortisation is provided on all intangible and tangible fixed
assets, other than land, at rates calculated to write off the cost less
estimated residual value of each asset evenly over its estimated useful life
in years as follows:
Goodwill 5-20 years
Freehold buildings 50 years
Fixtures & fittings 2-10 years
Purchased software 2-5 years
Short leasehold improvements Life of the lease
Plant and office equipment 2-10 years
Motor vehicles 4 years
Equipment held for leasing 4 years
For eign cur r encies
Assets, liabilities, revenues and costs denominated in foreign currencies are recorded
at the rates of exchange ruling at the dates of the transactions. Monetary assets and
liabilities are retranslated at the rates of exchange ruling at the balance sheet date.
Exchange differences thus arising are reported as part of the result for the year.
On consolidation, the results of overseas subsidiaries are translated at the average
rates ruling during the year.The assets and liabilities are translated at rates ruling at
the balance sheet date. Differences arising on translation of the opening net assets
and profits of overseas subsidiaries to the rates ruling at the balance sheet date are
taken to reserves.
NOTES TO THE ACCOUNTS 31
NORTHGATE INFORMATION SOLUTIONS PLC 2. TURNOVER AND SEGMENTAL ANALYSIS
Turnover represents the amounts derived from the provision of goods and services to third party customers stated net of value a dded tax and includes
interest arising on sales of equipment and software licenses on deferred payment terms.
(a) Turnover and operating profit 
By market sector: Year ended Year ended
30 April 2004 30 April 2003
Operating Operating
T urnover profit/(loss)* T urnover profit/(loss)*
£'000 £'000 £'000 £'000
Existing operations:
Public Services 46,193 5,057 40,816 3,445
Human Resources 22,468 3,707 18,889 2,597
Corporate Sector 25,801 1,401 24,310 1,170
Acquisitions:
Public Services 13,809 1,544 --
Human Resources 29,044 2,971 --
Less: intersegment turnover (851) - (718) -
Administration costs - (3,087) - (2,687)
Continuing operations 136,464 11,593 83,297 4,525
Discontinued operations -- 1,918 542
136,464 11,593 85,215 5,067
* Operating profit/(loss) is stated before exceptional items and goodwill amortisation.
NOTES TO THE ACCOUNTS 32
NORTHGATE INFORMATION SOLUTIONS PLC
1. ACCOUNTING POLICIES (continued)
Deferred taxation
Deferred tax is recognised, without discounting, in respect of all timing differences
between the treatment of certain items for taxation and accounting purposes which
have arisen but not reversed by the balance sheet date, except as otherwise required
by FRS19.
Research and development
Expenditure on research and development is written off in the year in which it is
incurred.
Pensions
The Group operates various defined contribution pension schemes.The assets of the
schemes are held separately from those of the Group in independently administered
funds. The amounts charged to the profit and loss account represent the
contributions payable to the schemes in respect of the accounting period.
The Group also operates two defined benefit pension schemes.Associated costs are
charged to the profit and loss account so as to spread the cost of pensions over the
employees' working lives within the Group.The regular cost is attributed to individual
years using the projected unit method.V ariations in pension cost which are identified
as a result of actuarial valuations are amortised over the expected remaining working
lives of employees. Differences between the amounts charged to the profit and loss 
account and the amounts funded are treated as either provisions or prepayments in
the balance sheet.
1. ACCOUNTING POLICIES (continued)
Defer r ed taxation
Under the revised terms of FRS17, the Company is required to adopt alternative
accounting for its defined benefit scheme by the year ending 30 April 2006. In
accordance with the transitional arrangements under FRS17, note 29 includes
additional balance sheet disclosures.
Leases
Assets acquired under finance leases are capitalised and the outstanding future lease
obligations are shown in creditors. Operating lease rentals are charged to the profit
and loss account on a straight line basis over the period of the lease.
Financial instruments
Derivative instruments utilised by the Group are interest rate collars.The Group does
not enter into speculative derivative contracts. All such instruments are used for
hedging purposes to alter the risk profile of an existing underlying exposure of the
Group in line with the Group’s risk management policies.
Tr ansactions denominated in foreign currencies are recor ded at the r ate of exchange
at the date of the transaction. At the balance sheet date, monetary assets and
liabilities denominated in foreign currencies are translated at the rate of exchange
ruling at that date. 2. TURNOVER AND SEGMENTAL ANALYSIS (continued)
Year ended Year ended
30 April 2004 30 April 2003
Profit/(Loss) Profit/(Loss)
£’000 £’000
Amortisation of goodwill
Existing operations:
Human Resources (583) (296)
Corporate Sector (69) (17)
Acquisitions:
Human Resources (3,927) -
Public Services (1,337) -
(5,916) (313)
Operating exceptional items
Existing operations:
Administration Share Option Scheme (4,993) 246
Abortive contract costs - (450)
Property and other provisions 1,971 (4,610)
Reorganisation costs (298) (1,181)
Acquisitions:
Public Services Reorganisation costs (794) -
Human Resources Reorganisation costs (7,222) -
Property and other provisions (2,830) -
(14,166) (5,995)
Profit on sale or termination of operations
Discontinued operations Sale of health business - 28,451
By geographic origin: Year ended Year ended
30 April 2004 30 April 2003
Operating Operating
T urnover profit/(loss)* T urnover profit/(loss)*
£'000 £'000 £'000 £'000
Continuing operations (including acquisitions):
United Kingdom 130,532 9,693 80,153 3,687
Rest of Europe 2,772 579 --
North America 2,629 1,333 3,144 838
Other 531 (12) --
136,464 11,593 83,297 4,525
Discontinued operations United Kingdom -- 1,918 542
136,464 11,593 85,215 5,067
* The geographic analysis of operating profit is shown before exceptional items and goodwill amortisation.
Turnover analysed by geographic destination is not materially different from that analysed by geographic origin.
NOTES TO THE ACCOUNTS 33
NORTHGATE INFORMATION SOLUTIONS PLC 2. TURNOVER AND SEGMENTAL ANALYSIS (continued)
Year ended Year ended
30 April 2004 30 April 2003
Profit/(Loss) Profit/(Loss)
£’000 £’000
Amortisation of goodwill
Continuing operations (including acquisitions)
United Kingdom (5,360) (313)
Rest of Europe (556) -
(5,916) (313)
Operating exceptional items
Continuing operations (including acquisitions)
United Kingdom (13,625) (5,976)
Rest of Europe (334) -
North America (207) (19)
(14,166) (5,995)
Profit on sale or termination of operations
Discontinued operations United Kingdom - 28,451
(b) Net assets
By geographic origin: As at As at 
30 April 2004 30 April 2003
£'000 £'000
Continuing operations (including acquisitions):
United Kingdom 160,904 45,584
Rest of Europe 687 -
North America 58 (569)
Rest of the World 423 (2)
162,072 45,013
Unallocated net assets - 1,063
Net assets 162,072 46,076
Other unallocated net assets represent the Group's central financing, provisions, cash at bank and in hand, and bank overdrafts.
Net assets can only be analysed by market sector with an arbitrary allocation and therefore is not a meaningful analysis.
NOTES TO THE ACCOUNTS 34
NORTHGATE INFORMATION SOLUTIONS PLC 3. OPERATING COSTS
Year ended Year ended
30 April 2004 30 April 2003
Existing Acquisitions Continuing Discontinued
£’000 £’000 £’000 £’000
Change in stocks of goods for resale, finished goods and work in progress 71 - 329 2
Purchase of goods for resale, raw materials and consumables 10,973 3,054 10,203 71
Other external charges 4,091 5,342 3,539 99
Staff costs
- wages and salaries 42,736 21,902 37,339 653
- social security costs 5,761 2,305 3,700 59
- other pension costs 2,552 1,348 2,067 40
Depreciation of owned assets 2,136 735 1,772 7
Depreciation of assets held under finance leases 421324 -
Amounts written off intangible fixed assets and investments 1,371 5,391 1,276 34
Other operating charges 20,772 14,358 24,831 411
90,505 54,448 85,080 1,376
Acquisitions 54,448 -
Discontinued operations - 1,376
144,953 86,456
Exceptional (charges)/income recognised in operating costs comprise the following:
Year ended Year ended
30 April 2004 30 April 2003
£'000 £'000
Continuing operations:
Other operating charges
- reorganisation costs (8,314) (1,181)
- abortive contract costs - (450)
- property and other costs (859) (4,610)
Wages and salaries
- provision for NI contribution on unapproved share option scheme (1,266) 34
- UITF17 provision for discount on share options (3,727) 212
(14,166) (5,995)
The tax effect of the exceptional items primarily augments the Group’s available tax losses, which will be relieved in subsequen t periods.
During the year, the Group granted a number of share options under the Executive Share Option Scheme 1999 to certain employees at the market value
of the Company’s shares at the date of grant. These shares are exercisable between three and ten years from the date of the gran t. Exercise of a
proportion of these shares is subject to share price performance criteria.
Discounts on options granted under the Group’s Savings Related Share Option Scheme do not attract a profit and loss charge as permitted by UITF17.
The Group has provided for the expected National Insurance liability arising on its unapproved 1999 Scheme. It is estimated that if the share price were
to increase by 10%, this would lead to a £204,000 increase, being £200,000 in relation to the increase in share price and £4,000 due to additional share
options becoming eligible for exercise. Similarly, if the share price were to decrease by 10% this would lead to a £200,000 reduction in the provision,
being £200,000 in relation to the decrease in the share price and £nil due to share options becoming no longer eligible for exercise.
NOTES TO THE ACCOUNTS 35
NORTHGATE INFORMATION SOLUTIONS PLC 4. GROUP OPERATING LOSS
Group operating loss is stated after charging/(crediting): Year ended Year ended
30 April 2004 30 April 2003
£'000 £'000
Research and development expenditure 7,630 6,889
Operating lease rentals - plant and machinery 1,995 1,588
- other 3,901 3,753
- exceptional rental (income)/costs relating to property (180) 3,861
Auditors' remuneration - Group 226 98
- Company 10 10
- other fees - tax advice 59 67
- assurance services & other 73 114
Loss on sale of tangible fixed assets 3 205
In addition to the Auditors’ remuneration disclosed above, further costs of £1,209,000 relating to non audit services provided by KPMG in respect of the
acquisitions during the year have been capitalised. These primarily relate to reporting accountant and due diligence work.
5. PROFIT ON SALE OR TERMINATION OF OPERATIONS
Year ended Year ended
30 April 2004 30 April 2003
£'000 £'000
Discontinued businesses - Sale of health business - 28,451
- 28,451
6. INTEREST RECEIVABLE AND SIMILAR INCOME
Year ended Year ended
30 April 2004 30 April 2003
£'000 £'000
Bank and other interest receivable 295 1,227
7. INTEREST PAYABLE
Year ended Year ended
30 April 2004 30 April 2003
£'000 £'000
Bank loans and overdrafts 1,552 -
Amortisation of issue costs on bank loan 145 -
Other interest payable - 42
Foreign exchange loss 241 282
Finance charges payable under finance leases 13 4
1,951 328
NOTES TO THE ACCOUNTS 36
NORTHGATE INFORMATION SOLUTIONS PLC 8. STAFF NUMBERS
The average number of persons employed by the Group, including Executive Directors, during the year was as follows:
Year ended Year ended
30 April 2004 30 April 2003
Number Number
Sales and marketing 164 111
Customer services 842 514
Applications software support and research and development 771 304
Accounting and administration 111 92
1,888 1,021
9. TAXATION ON (LOSS)/PROFIT ON ORDINARY ACTIVITIES
The charge/(credit) for the year comprises:
Year ended Year ended
30 April 2004 30 April 2003
£'000 £'000
Current taxation:
UK Corporation Tax at 30% (2003: 30%) 38 3,105
Adjustments relating to earlier years - Corporation Tax 139 (18)
- Overseas taxation 38 -
Share of associate 3 -
218 3,087
Deferred taxation:
Group (211) (4,724)
(211) (4,724)
Total tax charge/(credit) on (loss)/profit on ordinary activities 7 (1,637)
The current tax charge for the year differs from that calculated by applying the standard rate of Corporation Tax in the UK to (loss)/profit before taxation.
The differences are as follows:
Year ended Year ended
30 April 2004 30 April 2003
£'000 £'000
(Loss)/Profit before taxation (10,086) 28,109
Tax on (loss)/profit, at UK rate of 30% (3,026) 8,433
Accelerated capital allowances (739) (458)
Tax effected amounts not in the profit and loss account (463) 297
Expenses not tax effected 3,894 277
Adjustments in respect of prior periods 177 (18)
Effect of different rates for overseas taxation (13) -
Augmentation/(Utilisation) of tax losses and ACT 388 (5,444)
Current tax charge for the year 218 3,087
NOTES TO THE ACCOUNTS 37
NORTHGATE INFORMATION SOLUTIONS PLC 10. (LOSS)/PROFIT FOR THE FINANCIAL YEAR
The loss for the financial year in the accounts of the parent company was £(14,315,000) (2003: profit £791,000).
11. EARNINGS PER ORDINARY SHARE
Basic earnings per share for the year ended 30 April 2004 has been calculated on the loss for the financial year of £(10,093,000) (2003: profit
£29,746,000) and by reference to 340,461,198 (2003: 284,517,324) Ordinary Shares being the weighted average number of Ordinary Shares in issue
and ranking for dividend during the year, after excluding shares owned by the Northgate Information Solutions Employee Share Ownership Plan (note
14).
Diluted earnings per share has been calculated on the loss of £(10,093,000) (2003: profit £29,746,000) and after including the effect of all dilutive
potential Ordinary Shares, which increases the average number of Ordinary Shares to 352,839,618 (2003: 288,036,064).
The adjusted earnings per share figure has been calculated using the following adjusted earnings figures:
Year ended Year ended
30 April 2004 30 April 2003
£'000 £'000
(Loss)/Profit for the financial year (10,093) 29,746
Profit on sale or termination of operations, net of attributable taxation - (25,346)
Exceptional items, net of attributable taxation 13,926 5,755
Discontinued activities before exceptional items - (542)
Amortisation of goodwill 5,938 313
Deferred taxation credit (211) (4,724)
Adjusted profit for the financial year 9,560 5,202
An adjusted earnings per share has been calculated in order to reflect the underlying performance of the Group.
12. INTANGIBLE FIXED ASSETS
Purchased
Goodwill software Total
Group £’000 £'000 £'000
Cost:
At 1 May 2003 6,207 2,367 8,574
Exchange adjustments - (19) (19)
Acquisitions (note 27) 230,625 256 230,881
Additions - 721 721
At 30 April 2004 236,832 3,325 240,157
Amortisation:
At 1 May 2003 517 1,269 1,786
Exchange adjustments - (18) (18)
Charge for the year 5,916 746 6,662
At 30 April 2004 6,433 1,997 8,430
Net book value:
At 30 April 2004 230,399 1,328 231,727
At 30 April 2003 5,690 1,098 6,788
NOTES TO THE ACCOUNTS 38
NORTHGATE INFORMATION SOLUTIONS PLC 13. TANGIBLE FIXED ASSETS
Plant,
Freehold Short equipment
land and Fixtures and leasehold and motor
buildings fittings improvements vehicles Total
Group £'000 £’000 £'000 £'000 £'000
Cost:
At 1 May 2003 - - 1,508 8,910 10,418
Exchange adjustments - - (12) (31) (43)
Acquisitions 3,730 - 493 2,869 7,092
Additions 16,700 1,557 483 1,694 20,434
Reclassification - 1,131 (1,131) - -
Disposals - - (1) (1,230) (1,231)
At 30 April 2004 20,430 2,688 1,340 12,212 36,670
Depreciation:
At 1 May 2003 - - 654 4,732 5,386
Exchange adjustments - - (6) (27) (33)
Charge for the year 99 48 339 2,440 2,926
Reclassification - 540 (540) - -
Disposals - - - (1,055) (1,055)
At 30 April 2004 99 588 447 6,090 7,224
Net book value:
At 30 April 2004 20,331 2,100 893 6,122 29,446
At 30 April 2003 - - 854 4,178 5,032
The net book value of plant, equipment and motor vehicles includes £224,000 (2003: £107,000) in respect of assets held under fina nce leases.
Depreciation on these assets during the year was £55,000 (2003: £24,000).
14. FIXED ASSET INVESTMENTS
Group – Share of associated undertakings
Share of 
Goodwill net assets Total
£’000 £’000 £’000
Cost:
At 1 May 2003 -- -
Additions in year (note 27) 495 542 1,037
Profits retained for the year -78 78
Amortisation for the year (22) - (22)
At 30 April 2004 473 620 1,093
A 34.79% share of Rave Technologies India (Private) Limited was purchased on 13 November 2003. The resulting goodwill has been c apitalised and will
be written off over a period of 10 years in line with the Directors’ estimate of its useful economic life.
NOTES TO THE ACCOUNTS 39
NORTHGATE INFORMATION SOLUTIONS PLC 14. FIXED ASSET INVESTMENTS (continued)
Group – Investment in own shares
Own 
shares
£’000
Cost:
At 1 May 2003 and 30 April 2004 1,156
Provisions:
At 1 May 2003 58
Charge for the year 78
At 30 April 2004 136
Net book value:
At 30 April 2004 1,020
At 30 April 2003 1,098
The investment in own shares comprises 2,399,502 (2003: 2,400,000) Ordinary Shares with a nominal value of 10p each, acquired at an average price
of 48.18p (2003: 48.18p) by the Northgate Information Solutions Employee Share Ownership Plan, a trust established in Guernsey. Dividends on the
shares owned by the trust, the purchase of which was funded by an interest free loan to the trust from Northgate Information Solutions plc, are waived.
All expenses incurred by the trust are settled directly by Northgate Information Solutions UK Limited and are charged to the accounts as incurred.
In accordance with UITF13, the difference between the book value and the option exercise price of shares appropriated by the trust for issue to
employees under the Savings Related Share Option Scheme is being charged as an operating cost over the period of service of the employees. The charge
for the period amounted to £78,000 (2003: £58,000).
The market value of investments listed on the London Stock Exchange at 30 April 2004, which comprises shares held by the trust, w as £1,632,000
(2003: £552,000).
Subsidiary Own
undertakings shares Total
Company £’000 £’000 £’000
Cost:
At 1 May 2003 92,782 1,156 93,938
Additions 167,117 - 167,117
At 30 April 2004 259,899 1,156 261,055
Provisions:
At 1 May 2003 15,254 58 15,312
Charge for the year -78 78
At 30 April 2004 15,254 136 15,390
Net book value:
At 30 April 2004 244,645 1,020 245,665
At 30 April 2003 77,528 1,098 78,626
During the year the trade and net assets of one of the Company’s subsidiary undertakings were transferred to another subsidiary undertaking at their book
value which was less than their fair value. The cost of the Company's investment in the transferor subsidiary reflected the unde rlying fair value of its net
assets and goodwill at the time of acquisition. As a result of this transfer, the value of the Company's investment in the transferor subsidiary fell below the
amount at which it was stated in the Company's accounting records. Schedule 4 to the Companies Act 1985 requires that the investment be written down
accordingly and that the amount be charged as a loss in the Company's profit and loss account. However, as the fall in value of the investment in the
transferor subsidiary undertaking was offset by an increase in the value of the investment in the transferee subsidiary, the Directors consider that, as there
has been no overall loss to the Company, it would fail to give a true and fair view to charge that diminution to the Company's profit and loss account for
the year. The effect of this departure is to increase the Company's profit for the financial year by £2,425,000 and to increase the value of investments in
subsidiary undertakings in the holding company's balance sheet by the same amount. The Group accounts are not affected by this t ransfer.
NOTES TO THE ACCOUNTS 40
NORTHGATE INFORMATION SOLUTIONS PLC 14. FIXED ASSET INVESTMENTS (continued)
The principal subsidiary undertakings at 30 April 2004, the nature of whose business is the development and supply of software a nd related services
(except as noted) and which are all wholly owned were:
Country of incorporation
Name and operation
Northgate Information Solutions UK Limited * Great Britain
Northgate Information Solutions Inc (holding company) USA 
PRO IV Technology Inc * USA
Northgate CSG Limited * Great Britain
blue8 Technologies Limited * Great Britain
Cara Payroll Group Limited * Republic of Ireland
Cara Information Technology Limited * Great Britain
Boundary Way One Limited (holding company) Great Britain
Boundary Way Two Limited * (property ownership company) Great Britain
Northgate PWA Empower Limited Great Britain
Northgate HR Limited (formerly Rebus HR Limited) * Great Britain
Moorepay Limited * Great Britain
* held indirectly
All shares held are Ordinary Shares.
The market value of the investment in the Company’s own shares at 30 April 2004 was £1,632,000 (2003: £552,000). The shares are h eld by the
Northgate Information Solutions Employee Share Ownership Plan (see above for details). No other investments are listed.
In accordance with UITF13, the difference between the book value and the option exercise price of shares appropriated by the trust for issue to
employees under the Savings Related Share Option Scheme is being charged as an operating cost over the period of service of the employees. The charge
for the period amounted to £78,000 (2003: £58,000).
15. DEBTORS
Group Group Company Company
30 April 2004 30 April 2003 30 April 2004 30 April 2003
£'000 £'000 £'000 £'000
Due within one year:
Trade debtors 43,096 18,581 - -
Amounts owed by subsidiary undertakings - - 34,569 30,940
Other debtors and prepayments 8,739 3,631 - -
51,835 22,212 34,569 30,940
Due after one year:
Trade debtors 9,577 7,156 - -
Deferred tax recoverable (note 23) 7,134 4,724 - -
16,711 11,880 - -
Total debtors 68,546 34,092 34,569 30,940
NOTES TO THE ACCOUNTS 41
NORTHGATE INFORMATION SOLUTIONS PLC 16. CREDITORS: amounts falling due within one year
Group Group Company Company
30 April 2004 30 April 2003 30 April 2004 30 April 2003
£'000 £'000 £'000 £'000
Bank loans and overdrafts (note 19) 11,910 - 8,852 -
Loan notes (below, and note 19) 33,053 - - -
Obligations under finance leases and hire purchase contracts (note 19) 441 71 - -
Amounts owed to subsidiary undertakings - - 42,777 4,887
Trade creditors 11,974 5,526 - -
UK Corporation Tax 2,940 2,589 - -
Overseas taxation 488 268 - -
Social security and other taxation 7,151 2,584 - -
Other creditors 203 39 - -
68,160 11,077 51,629 4,887
As stated in note 31, the Group has in place an £88.0 million 5 year borrowing facility. This will provide funds to repay the loa n notes as they fall due
in February 2005.
17. CREDITORS: amounts falling due after more than one year
Group Group Company Company
30 April 2004 30 April 2003 30 April 2004 30 April 2003
£'000 £'000 £'000 £'000
Bank loans and overdrafts (note 20) 14,067 - 14,067 -
Obligations under finance leases and hire purchase contracts (note 20) 116 48 - -
14,183 48 14,067 -
18. OBLIGATIONS UNDER FINANCE LEASES AND HIRE PURCHASE CONTRACTS
Group Group Company Company
30 April 2004 30 April 2003 30 April 2004 30 April 2003
£'000 £'000 £'000 £'000
Amounts falling due:
Within one year 441 71 - -
Between two and five years 116 48 - -
557 119 - -
NOTES TO THE ACCOUNTS 42
NORTHGATE INFORMATION SOLUTIONS PLC 19. BANK AND OTHER BORROWINGS DUE WITHIN ONE YEAR
Group Group Company Company
30 April 2004 30 April 2003 30 April 2004 30 April 2003
£'000 £'000 £'000 £'000
Bank loans and overdrafts 11,910 - 8,852 -
Loan notes 33,053 - - -
Finance lease obligations 441 71 - -
45,404 71 8,852 -
At 30 April 2004, the Group’s bank loan and overdraft facilities were secured by a cross guarantee and a fixed and floating charge over the assets of the
Company and its material subsidiaries including certain of the acquisitions completed in the year. The loan notes are secured by a bank guarantee.
20. BANK AND OTHER BORROWINGS DUE AFTER MORE THAN ONE YEAR
Group Group Company Company
30 April 2004 30 April 2003 30 April 2004 30 April 2003
£'000 £'000 £'000 £'000
Bank loans and overdrafts 14,067 - 14,067 -
Finance lease obligations 116 48 - -
14,183 48 14,067 -
At 30 April 2004, the Group’s bank loan and overdraft facilities were secured by a cross guarantee and a fixed and floating charge over the assets of the
Company and its material subsidiaries including certain of the acquisitions completed in the year.
Group and company bank loans are stated net of unamortised issue costs of £1,295,000 (2003: £nil). The company incurred total iss ue costs of
£1,441,000 in respect of the committed multi-option facility entered into in December 2003 under which amounts have been drawn down to fund
acquisitions. These costs together with the interest expenses are allocated to the profit and loss account at a constant rate on the carrying amount.
NOTES TO THE ACCOUNTS 43
NORTHGATE INFORMATION SOLUTIONS PLC 21. PROVISIONS FOR LIABILITIES AND CHARGES
Pensions Provisions
and similar Property Restructuring on share
obligations provisions provisions schemes Total 
£’000 £’000 £’000 £’000 £’000
Group
At 1 May 2003 - 6,571 202 19 6,792
Acquisitions 18,000 512 - - 18,512
Profit and loss account - 859 8,531 1,266 10,656
Utilised in period (187) (789) (5,046) (15) (6,037)
At 30 April 200417,8137,1533,6871,27029,923
The Group has recognised a net property provision of £859,000 during the year to 30 April 2004 (2003: £4,361,000), primarily in r elation to net lease
payments that the Group is committed to make over remaining lease terms in relation to certain properties no longer fully occupied by the Group.With
the acquisitions completed in the year, the Group has inherited a number of vacant and partly sub-let leasehold properties. Provision has been made for
the residual lease commitment, together with other outgoings, after taking into account existing sub-tenant arrangements.
The Group has, in accordance with FRS7, recognised a provision of £18,000,000 representing the deficit in the Northgate HR Limite d pension scheme
as a fair value adjustment on acquisition. This provision is expected to unwind over the average remaining service lives of the members of the scheme.
In addition, the Group has made provision for the expected costs of rationalisation of the Group’s operations following the acquisitions made during the
year. These costs are expected to be payable in the forthcoming year.
22. ACCRUALS AND DEFERRED INCOME
Group Group Company Company
30 April 2004 30 April 2003 30 April 2004 30 April 2003
£'000 £'000 £'000 £'000
Due within one year:
Deferred income 38,214 17,103 - -
Accruals 21,659 5,519 828 13
59,873 22,622 828 13
Due after one year:
Deferred income 80 196 - -
Accruals 341 - - -
421 196 - -
Total 60,294 22,818 828 13
NOTES TO THE ACCOUNTS 44
NORTHGATE INFORMATION SOLUTIONS PLC 23. DEFERRED TAXATION
The Group’s deferred taxation assets are as follows:
Group Group
provided provided
30 April 2004 30 April 2003
£’000 £’000
Difference between accumulated depreciation and capital allowances 3,072 2,235
Other timing differences 369 (3,646)
Tax losses carried forward 3,693 6,135
Undiscounted deferred tax assets 7,134 4,724
The movement on the deferred taxation assets is as follows:
£’000
Balance at 1 May 2003 4,724
Acquisitions 2,199
Profit & Loss account 211
Balance at 30 April 2004 7,134
The Group has gross unutilised UK trading losses and excess management expenses carried forward of £33.7 million (2003: £26.3 mi llion) and gross
unutilised UK non-trading losses carried forward of approximately £52.1 million. A net amount of £7,134,000 has been recognised as a deferred tax
asset and is included in debtors (note 15).
24. CALLED UP SHARE CAPITAL 
The share capital of the Company is as follows:
30 April 2004 30 April 2003
£’000 £’000
Authorised:
700,000,000 (2003: 375,000,000) Ordinary Shares of 10p each 70,000 37,500
Allotted, called up and fully paid:
495,073,649 (2003: 287,132,292) Ordinary Shares of 10p each 49,507 28,713
During the year, the Company issued 281,357 (2003: 410,999) Ordinary Shares of 10p each as a result of the exercise of share options by employees,
for which a total consideration of £10,000 (2003: £78,000) was received. The shares issued include 259,314 shares issued under th e 1999 Executive
Share Option Scheme for which no consideration was received. On 12 January 2004, the authorised share capital of the Company was increased to
£70,000,000 by the creation of 325,000,000 new Ordinary Shares of 10p each, ranking pari passu in all respects with the existing ordinary share
capital of the Company. On 23 January 2004, 92,000,000 Ordinary Shares were issued for a cash consideration of £42,352,000 (net of expenses),
giving rise to a premium of £33,152,000. In addition, 115,660,000 Ordinary Shares were issued on that date under the terms of the Rebus HR Group
Limited acquisition agreement as part of the consideration for the acquisition. The premium of £68,239,000 arising on this issue of shares has been
credited to merger reserves.
NOTES TO THE ACCOUNTS 45
NORTHGATE INFORMATION SOLUTIONS PLC 24. CALLED UP SHARE CAPITAL (continued)
The Company has granted options to subscribe for the Company’s Ordinary Shares under separate schemes as follows:
Savings Related Executive Share
Share Option Scheme Option Schemes Total
Number Number Number
At 1 May 2003 835,565 32,801,859 33,637,424
Issued - 21,173,445 21,173,445
Exercised (7,823) (1,105,434) (1,113,257)
Lapsed (50,596) (2,300,772) (2,351,368)
At 30 April 2004 777,146 50,569,098 51,346,244
The options over the Company’s Ordinary Shares outstanding at 30 April 2004 are exercisable as follows:
Savings Related Share Option Scheme
Number of options Exercise dates Exercise price
777,146 1 April 2005 to 1 October 2005 26.40p
Total 777,146
Executive Share Option Schemes
Number of options Exercise dates Exercise price
62,609 31 January 1999 to 30 January 2006 50.79p
366,484 4 September 2000 to 3 September 2007 37.37p
70,435 20 March 2001 to 19 March 2008 57.50p
63,758 18 September 2001 to 17 September 2008 56.54p
33,934 18 September 2001 to 17 September 2008 58.93p
104,348 7 December 2001 to 6 December 2008 45.04p
36,522 22 March 2002 to 21 March 2009 37.85p
31,304 28 July 2002 to 27 July 2009 22.04p
17,008,691 23 November 2002 to 22 November 2009 20.87p
1,460,869 9 December 2002 to 8 December 2009 25.20p
1,043,477 17 December 2002 to 16 December 2009 28.73p
1,500,000 1 June 2003 to 31 May 2010 37.83p
1,208,000 3 August 2003 to 2 August 2010 47.08p
517,000 25 September 2003 to 24 September 2010 69.50p
164,200 9 October 2003 to 8 October 2010 75.90p
220,000 21 December 2003 to 20 December 2010 65.25p
30,000 2 January 2004 to 1 January 2011 68.33p
125,000 23 January 2004 to 22 January 2011 71.73p
90,000 26 February 2004 to 25 February 2011 69.00p
2,275,522 28 June 2004 to 27 June 2011 44.75p
931,000 13 December 2004 to 12 December 2011 36.50p
1,960,000 25 July 2005 to 24 July 2012 29.00p
117,500 11 December 2005 to 10 December 2012 30.50p
2,760,000 27 June 2006 to 26 June 2013 28.17p
780,000 25 September 2006 to 24 September 2013 39.75p
6,591,910 17 December 2006 to 16 December 2013 50.90p
10,816,535 27 January 2007 to 26 January 2014 67.88p
200,000 26 February 2007 to 25 February 2014 64.50p
Total 50,569,098
NOTES TO THE ACCOUNTS 46
NORTHGATE INFORMATION SOLUTIONS PLC 25. RESERVES
Share Share premium Merger Profit and
capital account reserve Loss account
£'000 £'000 £'000 £’000
Group
At 1 May 2003 28,713 38,123 162 (20,922)
Retained loss for the year - - - (10,093)
Foreign exchange - - - 195
Arising on issue of shares 20,794 33,263 68,239 -
Credit in respect of share related awards - - - 3,598
At 30 April 2004 49,507 71,386 68,401 (27,222)
Share Share premium Merger Profit and
capital account reserve Loss account
£'000 £'000 £'000 £’000
Company
At 1 May 2003 28,713 38,123 162 38,731
Retained loss for the year - - - (14,315)
Arising on issue of shares 20,794 33,263 68,239 -
At 30 April 2004 49,507 71,386 68,401 24,416
The credit to reserves in respect of the share related awards, and the corresponding charge in the profit and loss account for t he year, has been made in
accordance with UITF17.
The cumulative total of goodwill eliminated against Group profit and loss account reserves in respect of acquisitions prior to 1 January 1998 when FRS10:
"Goodwill and Intangible Assets" was adopted amounts to £46,770,000 (2003: £46,770,000).
NOTES TO THE ACCOUNTS 47
NORTHGATE INFORMATION SOLUTIONS PLC 26. NOTES TO THE CASH FLOW STATEMENT 
(a) Analysis of cash flows: Year ended Year ended
30 April 2004 30 April 2003
£'000 £'000
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest paid (865) (42)
Interest received 295 1,227
Interest element of finance lease rentals (13) (4)
Net cash (outflow)/inflow (583) 1,181
TAXATION
Corporation Tax paid (314) (810)
Overseas tax (paid)/recovered (37) 73
Net cash outflow (351) (737)
CAPITAL EXPENDITURE 
Payments to acquire intangible fixed assets (721) (848)
Payments to acquire tangible fixed assets (20,306) (1,859)
Sale of tangible fixed assets 45 -
Net cash outflow (20,982) (2,707)
ACQUISITIONS AND DISPOSALS
Acquisition of subsidiaries and businesses in the period (108,250) (5,102)
Net cash/(overdraft) acquired with subsidiaries 11,361 (74)
Deferred consideration on business acquired in earlier period - (200)
Disposal of businesses in the period, net of expenses - 31,434
Net cash (outflow)/inflow (96,889) 26,058
FINANCING
Issue of ordinary share capital 44,170 78
Expenses of share issue (1,808) -
Net increase/(decrease) in borrowings 22,917 (451)
Capital element of finance lease rentals (192) (44)
Net cash inflow/(outflow) 65,087 (417)
(b) Reconciliation of Group operating profit to net cash inflow from operating activities:
Year ended Year ended
30 April 2004 30 April 2003
£'000 £'000
Group operating loss (8,489) (1,241)
Depreciation and amortisation 9,588 3,055
Provision against fixed asset investments 78 58
Loss on disposal of tangible fixed assets 3 205
Non-cash exceptional operating items 4,993 (246)
Increase in provisions 3,368 3,203
(Decrease)/Increase in debtors (4,717) 801
Decrease in stocks 94 350
Increase/(Decrease) in creditors 8,812 (2,054)
Net cash inflow from operating activities 13,730 4,131
The cash flow from operating activities is stated after cash payments of £5,046,000 (2003: £1,155,000) in relation to the except ional reorganisation
charge for the year.
NOTES TO THE ACCOUNTS 48
NORTHGATE INFORMATION SOLUTIONS PLC 26. NOTES TO THE CASH FLOW STATEMENT (continued)
(c) Reconciliation to movement in net debt
At 1 May Other non-cash At 30 April
2003 Cash flow Acquisitions changes 2004
£'000 £'000 £'000 £'000 £'000
Cash at bank and in hand 39,377 (39,988) - 3,058 2,447
Overdrafts - - - (3,058) (3,058)
Debt due within one year - (8,850) (32,910) (145) (41,905)
Debt due after one year - (14,067) - - (14,067)
Finance leases due within one year (71) 192 (630) 68 (441)
Finance leases due after year (48) - - (68) (116)
39,258 (62,713) (33,540) (145) (57,140)
Non-cash charges comprise amortisation of issue costs relating to debt issues and transfers between categories.
27. PURCHASE OF SUBSIDIARY UNDERTAKINGS AND BUSINESSES
The Group purchased 5 companies during the year and made an investment in an associated company for a total consideration (incl uding debt and cash
acquired) of £210,234,000 of which £176,067,000 was in respect of the Rebus HR Group Limited. The total adjustments required to the book values of
the assets and liabilities of the companies acquired in order to present the net assets of those companies at fair values in accordance with Group
accounting principles were £(108,390,000), of which £(88,541,000) related to Rebus HR Group Limited, details of which are set out on pages 49 to 52,
together with the resultant amount of goodwill arising. All of the purchases have been accounted for as acquisitions.
The companies acquired during the year contributed £4,133,000 to the Group’s net operating cash flows, paid £25,000 in respect o f net returns on
investments and servicing of finance, received £43,000 in respect of taxation and utilised £364,000 for capital expenditure.
Rebus HR Group Limited
In its last financial year to 31 March 2003, Rebus HR Group Limited made a loss after tax of £10,700,000. For the period since that date to the date of
acquisition, Rebus HR Group Limited management accounts show:
Operating Non-operating Total
£’000 £’000 £’000
Turnover 59,478 - 59,478
Operating profit 4,602 50,181 54,783
(Loss)/Profit before taxation (8,288) 50,181 41,893
Taxation 262 - 262
(Loss)/Profit attributable to shareholders (8,026) 50,181 42,155
Exchange adjustments (14) - (14)
Total recognised (losses)/gains for the period (8,040) 50,181 42,141
The non-operating profit of £50,181,000 primarily relates to the waiver of intercompany debt prior to acquisition.
NOTES TO THE ACCOUNTS 49
NORTHGATE INFORMATION SOLUTIONS PLC 27. PURCHASE OF SUBSIDIARY UNDERTAKINGS AND BUSINESSES (continued)
Consistency
Book Fair value of  accounting Provisional
value adjustments policy fair value
£'000 £'000 £'000 £'000
Net liabilities acquired
Intangible fixed assets 70,017 (70,017) - -
Tangible fixed assets 7,886 (377) (2,038) 5,471
Stocks 276 - (276) -
Debtors 14,617 (558) - 14,059
Cash at bank and in hand 8,681 - - 8,681
Creditors (24,562) (2,391) 3,896 (23,057)
Provisions (2) (18,160) - (18,162)
Taxation 634 806 574 2,014
Loans and finance leases (33,437) - - (33,437)
Net liabilities acquired 44,110 (90,697) 2,156 (44,431)
Goodwill 195,742
Consideration (net of debt and cash acquired) 151,311
Satisfied by:
Shares issued 79,805
Cash 71,506
Consideration (net of debt and cash acquired) 151,311
Loans and finance leases acquired 33,437
Cash at bank and in hand acquired (8,681)
Total consideration 176,067
The shares issued as part consideration for the acquisition have been valued at a price of 69 pence per share, being the mid-mar ket closing price of the
Company’s Ordinary Shares on 23 January 2004, the date of completion (i.e. the date on which the transaction became unconditional).
In the circular to shareholders dated 17 December 2003, seeking shareholder approval for this transaction, the total consideration was estimated at
£156.1 million, based on the mid-market closing price of the Company’s Ordinary Shares on 10 December 2003 (the date on which the Company’s
Ordinary Shares were temporarily suspended from dealings).
The book value of the assets and liabilities have been taken from the management accounts of Rebus HR Group Limited at 23 Janua ry 2004 (the date
of acquisition). Fair value adjustments made were as follows: Tangible and Intangible assets – carrying value of goodwill and oth er assets in the balance
sheet of the acquired business has been revalued on acquisition; Debtors – fair value revisions to amounts shown as prepayments, and additional bad
debt provisions; Creditors – additional accruals relating to amounts not included in the management accounts; Provisions – inclusion of a provision in
respect of the estimated defined benefit pension scheme deficit; Taxation – additional provision for deferred taxation assets. T h e resulting goodwill has
been capitalised and will be written off over a period of 20 years in line with the Directors’ estimate of its useful economic life.
NOTES TO THE ACCOUNTS 50
NORTHGATE INFORMATION SOLUTIONS PLC 27. PURCHASE OF SUBSIDIARY UNDERTAKINGS AND BUSINESSES (continued)
Cara Payroll Group Limited
In its last financial year to 31 December 2002, Cara Payroll Group Limited made a loss after tax of euro (2,681,236). For the period since that date to
the date of acquisition, Cara Payroll Group Limited management accounts show, in Sterling:
£’000
Turnover 4,052
Operating profit 1,368
Profit before taxation 251
Taxation and minority interest (179)
Profit attributable to shareholders 72
Exchange adjustments (195)
Total recognised loss for the period (123)
Book Fair value Provisional
value adjustments fair value
£'000 £'000 £'000
Net assets acquired
Intangible fixed assets 11,421 (11,355) 66
Tangible fixed assets 230 (32) 198
Stocks 23 - 23
Debtors 1,827 290 2,117
Cash at bank and in hand 828 - 828
Creditors (1,095) (237) (1,332)
Taxation (112) (290) (402)
Net assets acquired 13,122 (11,624) 1,498
Goodwill 13,809
Consideration (net of cash acquired) 15,307
Satisfied by:
Cash 15,307
Consideration (net of cash acquired) 15,307
Cash at bank and in hand acquired (828)
Total consideration 14,479
The book value of the assets and liabilities have been taken from the management accounts of Cara Payroll Group Ltd at 5 June 2 003 (the date of
acquisition). Fair value adjustments made were as follows: Tangible and Intangible assets – carrying value of goodwill and other assets in the balance
sheet of the acquired business has been revalued on acquisition; Debtors – additional prepayments not included in management accounts; Creditors –
additional accruals relating to amounts not included in the management accounts; Taxation – additional provision required. T he re sulting goodwill has
been capitalised and will be written off over a period of 10 years in line with the Directors’ estimate of its useful economic life.
Other acquisitions
During the year, the Group completed the acquisition of the following subsidiaries:
Consideration
£’000
PWA Group Limited 3,148
Hays Consulting & Solutions Group 6,417
blue8 Technologies Limited 10,835
Consideration 20,400
NOTES TO THE ACCOUNTS 51
NORTHGATE INFORMATION SOLUTIONS PLC 27. PURCHASE OF SUBSIDIARY UNDERTAKINGS AND BUSINESSES (continued)
The following table sets out the book value and the fair value of the net assets of these acquisitions:
Book Fair value Provisional
value adjustments fair value
£'000 £'000 £'000
Net liabilities acquired
Intangible fixed assets 3,682 (3,492) 190
Tangible fixed assets 1,423 - 1,423
Debtors 9,419 1,737 11,156
Deferred tax - 185 185
Cash at bank and in hand 1,852 - 1,852
Creditors (8,072) (6,655) (14,727)
Current taxation (300) - (300)
Provisions (350) - (350)
Loans (103) - (103)
Net liabilities acquired 7,551 (8,225) (674)
Goodwill 21,074
Consideration (net of debt and cash acquired) 20,400
Satisfied by:
Cash 20,034
Loan notes issued 366
Consideration (net of debt and cash acquired) 20,400
Loans and finance leases acquired 103
Cash at bank and in hand acquired (1,852)
Total consideration 18,651
PWA Group Limited was acquired on 4 November 2003. Fair value adjustments of £(143,000) were made to align accounting policies and include
additional cost provisions. The resulting goodwill has been capitalised and will be written off over a period of 10 years in lin e with the Directors’ estimate
of its useful economic life.
Hays Consulting & Solutions Group was acquired by Northgate Information Solutions UK Limited on 8 August 2003. Fair value adjustments of
£(4,722,000) were made to align accounting policies and include additional cost provisions, and a deferred tax asset of £185,000 was recognised. The
resulting goodwill has been capitalised and will be written off over a period of 10 years in line with the Directors’ estimate of its useful economic life.
blue8 Technologies Limited was acquired by Northgate Information Solutions UK Limited on 16 July 2003. Fair value adjustments of £(3,545,000) were
made to eliminate goodwill on the balance sheet of the acquired business, align accounting policies and include additional cost provisions. The resulting
goodwill has been capitalised and will be written off over a period of 10 years in line with the Directors’ estimate of its useful economic life.
In addition, 34.79% of the share capital of Rave Technologies India (Private) Limited, a company incorporated in India, was purcha sed on 13 November
2003 for a consideration of £1,037,000. The company is involved in the development of computer software. The resulting goodwill h as been capitalised
and will be written off over a period of 10 years in line with the Directors’ estimate of its useful economic life (note 14).
NOTES TO THE ACCOUNTS 52
NORTHGATE INFORMATION SOLUTIONS PLC 28. THE GROUP FINANCIAL COMMITMENTS
Capital commitments at 30 April 2004 amounted to £nil (2003: £nil).
At 30 April 2004, the Group had annual commitments under non-cancellable operating leases as follows:
30 April 2004 30 April 2003 
Land and Land and
buildings Other buildings Other
£'000 £'000 £'000 £'000
Leases expiring:
Within one year 498 548 60 121
Within two to five years 796 1,760 592 1,296
Thereafter 4,481 - 2,968 -
5,775 2,308 3,620 1,417
The Company had no capital or operating lease commitments at 30 April 2004 (2003: £nil).
29. PENSION COMMITMENTS
The Group operates two defined benefit pension schemes, one of which was inherited through the acquisition of Rebus HR Group Lim ited. Both are now
closed to new members.
The Group’s principal UK operating company, Northgate Information Solutions UK Limited, operates a defined benefit scheme for its employees whose
benefits are related to salary close to retirement or leaving service (if earlier) and also to years of pensionable service, with the assets held in a separate,
trustee administered fund. The contributions to the scheme are determined on the basis of regular valuations undertaken by indep endent, qualified
actuaries.
The most recent actuarial valuation of the scheme was conducted as at 31 March 2002 using the projected unit method. As at that date, the market
value of the assets was £90.4 million and on the valuation assumptions, these assets were sufficient to cover 97% of the liabilities. The key valuation
assumptions relate to the rates of return on investments and rates of increase in salaries and pensions.
The pension cost in the accounts includes the regular cost plus a variation in cost and, for the purposes of producing Company a ccounting information,
calculations were produced as at 30 April 2002 and the following assumptions were used:
% p.a.
Investment return before retirement 6.25
Salary increases 3.00
Pension increases for service from April 1997 2.70
Pension increases in excess of GMPs, for service up to April 1997 2.50
The total pension cost of this defined benefit scheme charged to the profit and loss account for the year to 30 April 2004 was £2,266,000
(2003: £1,801,000) which includes an addition for the amortisation of the experience deficit of £1,599,000 (2003: £907,000).
Following a review in 2002 of the Group’s pension arrangements, the Group closed this defined benefit pension scheme to new members, replacing it
with a defined contribution scheme. Existing members were given the option to stay in the scheme but future benefits will accrue at 1/70th of final
salary for each year of service against the prior rate of 1/60th of final salary. Employee contributions increased from 5% to 8% of pensionable salary
going forward.
The Group also operates various defined contribution schemes for its other UK and overseas employees.
NOTES TO THE ACCOUNTS 53
NORTHGATE INFORMATION SOLUTIONS PLC 29. PENSION COMMITMENTS (continued)
The pension cost figures used in these accounts comply with the current pension cost accounting standard SSAP24. A new pension c ost accounting
standard, IAS19, must be used for the figures that will be shown in the accounts at 30 April 2006 and subsequent years. Under transitional arrangements,
the Company is required to disclose the following information about the scheme and the figures that would have been shown under the UK standard
FRS17 in the current balance sheet.
Employer contributions to the defined benefit part of the scheme during the year amounted to £2,266,000. This represents broadly 13.6% of members’
Pensionable Salaries. The contributions paid to the defined contribution section of the scheme amounted to £271,000.
The major assumptions used by the actuary in respect of the FRS17 calculations were as follows:
At 30 April 2004 At 30 April 2003 At 30 April 2002
% p.a % p.a. % p.a.
Discount rate 5.70 5.40 5.90
Rate of increase in salaries 3.00 3.00 3.75
Rate of increase in pensions in payment 2.80 2.60 2.75
Inflation assumption 2.80 2.60 2.75
The assumptions used by the actuary are the best estimates chosen from a range of possible actuarial assumptions which, due to t he timescale covered,
may not necessarily be borne out in practice.
The fair value of the scheme’s assets, which are not intended to be realised in the short term and may be subject to significant change before they are
realised, and the present value of the scheme’s liabilities which are derived from cash flow projections over long periods and thus inherently uncertain,
were:
Long term Long term Long term 
rate of return rate of return rate of return
expected at V alue at expected at Value at expected at Value at
30 April 2004 30 April 2004 30 April 2003 30 April 2003 30 April 2002 30 April 2002
(%) (£’000) (%) (£’000) (%) (£’000)
Equities 7.5 69,438 6.8 56,363 6.9 70,530
Gilts 5.0 9,288 4.3 14,542 4.7 11,797
Bonds 5.7 9,459 --- -
Other 4.0 741 4.3 4,193 4.7 6,155
Total market value of assets 88,926 75,098 88,482
Present value of scheme liabilities (124,574) (123,874) (107,321)
Deficit in the scheme (35,648) (48,776) (18,839)
Related deferred tax asset 10,694 14,633 5,652
Net pension liability (24,954) (34,143) (13,187)
Analysis of movement in the scheme deficit during the year:
At 30 April 2004 At 30 April 2003
£’000 £’000
Deficit in scheme at start of year (48,776) (18,839)
Current service cost (749) (1,009)
Contributions 2,266 2,228 
Finance expense (2,005) (580)
Actuarial gains/(losses) 13,616 (30,576)
Deficit in scheme at end of year (35,648) (48,776)
NOTES TO THE ACCOUNTS 54
NORTHGATE INFORMATION SOLUTIONS PLC 29. PENSION COMMITMENTS (continued)
Amounts included within operating profit:
Year ended Year ended
30 April 2004 30 April 2003
£’000 £’000
Current service cost 749 1,009
749 1,009
Amounts included within other finance income/(expense):
Year ended Year ended
30 April 2004 30 April 2003
£’000 £’000
Expected return on scheme assets 4,679 5,774
Interest on scheme liabilities (6,684) (6,354)
Net finance return (2,005) (580)
Amounts included within the statement of total recognised gains and losses:
Year ended Year ended
30 April 2004 30 April 2003
£’000 % £’000 %
Actual return less expected return on scheme assets 7,839 (21,128)
Percentage of year end scheme assets 9 (28)
Experience gains and losses arising on scheme liabilities - (1,134)
Percentage of present value of year end scheme liabilities - (1)
Changes in assumptions underlying the present value of scheme liabilities 5,777 (8,314)
Percentage of present value of year end scheme liabilities 5 (7)
Actuarial gain/(loss) recognised in statement of total recognised gains and losses 13,616 (30,576)
Percentage of present value of year end scheme liabilities 11 (25)
The Group operating company, Northgate HR Limited (acquired on 23rd January 2004) also operates a defined benefit scheme (the Re bus HR Group
Pension Scheme) for its employees whose benefits are related to salary close to retirement or leaving service (if earlier) and also to years of pensionable
service, with the assets held in a separate, trustee administered fund. The contributions to the scheme are determined on the basi s of regular valuations
undertaken by independent, qualified actuaries.
The most recent actuarial valuation of the scheme was conducted as at 1st April 2002 using the projected unit method. As at that date, the market value
of the assets was £58.3 million and, on the valuation assumptions, these assets were sufficient to cover 77% of the liabilities. The key valuation
assumptions relate to the rates of return on investments and rates of increase in salaries and pensions. Currently, Company contributions to the scheme
are 18.2% of pensionable salaries (plus the cost of life assurance and less members’ standard contributions) plus £0.5 million per annum.
In accordance with FRS7 (fair values in acquisition accounting), a provision of £18,000,000 representing the deficit in the scheme was adopted as at
23 January 2004. A related deferred tax asset of £450,000 has been included in these accounts.
The pension cost in the accounts includes the regular cost plus a variation in cost and, for the purposes of producing Company a ccounting information,
the following assumptions were used:
% p.a
Investment return before retirement 6.25
Rate of increase in salaries 3.00
Pension increases 2.70
NOTES TO THE ACCOUNTS 55
NORTHGATE INFORMATION SOLUTIONS PLC 29. PENSION COMMITMENTS (continued)
The total pension cost of the defined benefit scheme charged to the profit and loss account for the period 23 January 2004 to 3 0 April 2004 was £743,000
which includes an addition for the amortisation of the experience deficit of £136,000. Provisions for liabilities and charges include £17,813,000 at 30 April
2004 in respect of pension costs representing the cumulative difference between pension costs charged to the profit and loss account and the amounts funded.
The company also operates various defined contribution schemes for its other UK and overseas employees.
An estimate of the liabilities of the defined benefit scheme was updated to 23 January 2004 and 30 April 2004, by an independent qualified actuary in
accordance with the transitional arrangements of FRS17. As required by FRS17, the defined benefit liabilities have been measured using the projected
unit method. The scheme is closed to new entrants and, under the method used to calculate pension costs in accordance with FRS17, the cost as a
percentage of payroll will tend to increase as the average age of the membership increases. Over the period 23 January 2004 to 30 April 2004,
contributions by the Company of £743,000 were made to the defined benefit scheme.
The major assumptions used by the actuary in respect of the FRS17 calculations were as follows:
At 30 April At 23 January 
2004 2004
% p.a % p.a.
Discount rate 5.70 5.40
Rate of increase in salaries (limited to RPI ) 2.80 3.00
Rate of increase in pensions in payment 2.80 2.60
Inflation assumption 2.80 2.60
The fair value of the scheme’s assets, which are not intended to be realised in the short term and may be subject to significant change before they are
realised, and the present value of the scheme’s liabilities which are derived from cash flow projections over long periods and thus inherently uncertain, were:
Long term Long term
rate of return rate of return
expected at V alue at expected at Value at
30 April 2004 30 April 2004 23 January 2004 23 January 2004
(%) (£’000) (%) (£’000)
Equities 7.5 26,554 6.8 26,331
Property 6.0 878 6.0 872
Bonds 5.7 2,873 5.4 2,806
Other 4.0 5,403 4.3 4,566
Total market value of assets 35,708 34,575
Present value of scheme liabilities (57,575) (60,547)
Deficit in the scheme (21,867) (25,972)
Related deferred tax asset 6,560 7,792
Net pension liability (15,307) (18,180)
Analysis of movement in the scheme deficit during the period: At 30 April 
2004
£’000
Deficit in scheme at start of period (23 January 2004) (25,972)
Current service cost (384)
Contributions 673
Finance income (282)
Actuarial gains 4,098
Deficit in scheme at end of period (21,867)
NOTES TO THE ACCOUNTS 56
NORTHGATE INFORMATION SOLUTIONS PLC 29. PENSION COMMITMENTS (continued)
Amounts included within operating profit:
Period ended
30 April 2004
£’000
Current service cost 384
384
Amounts included within other finance income:
Period ended
30 April 2004
£’000
Expected return on scheme assets 537
Interest on scheme liabilities (819)
Net finance return (282)
Amounts included within the statement of total recognised gains and losses:
Period ended
30 April 2004
£’000 %
Actual return less expected return on scheme assets 26
Percentage of year end scheme assets -
Experience gains and losses arising on scheme liabilities -
Percentage of present value of year end scheme liabilities -
Changes in assumptions underlying the present value of scheme liabilities 4,072
Percentage of present value of year end scheme liabilities 7
Actuarial gain recognised in statement of total recognised gains and losses 4,098
Percentage of present value of year end scheme liabilities 7
If the above liabilities in respect of both of the above schemes were recognised in the Group’s financial statements, the Group’s net assets and profit
and loss reserve would be as follows:
At 30 April At 30 April At 30 April
2004 2003 2002
£’000 £’000 £’000
Net assets excluding pension liability 162,072 46,076 16,352
Pension liability (22,898) (34,143) (13,187)
Net assets including pension liability 139,174 11,933 3,165
Profit and loss reserve excluding pension reserve (27,222) (20,922) (50,677)
Pension reserve (22,898) (34,143) (13,187)
Profit and loss reserve (50,120) (55,065) (63,864)
30. CONTINGENT LIABILITY
There are no significant contingent liabilities in the Group other than bank guarantees entered into in the normal course of bu siness.
NOTES TO THE ACCOUNTS 57
NORTHGATE INFORMATION SOLUTIONS PLC 31. FINANCIAL INSTRUMENTS
The Group’s financial assets and liabilities mainly comprise bank borrowings, cash, liquid resources and various items such as de btors and creditors that
arise directly from operations. As permitted by FRS13 short-term debtors and creditors have been excluded from the disclosures other than the currency
disclosure below.
The main risks arising from the Group’s financial instruments are interest rate risk, liquidity risk and foreign currency risk. T he Board reviews and agrees
policies for managing each of these risks and they are summarised below.
The main purpose of the financial instruments is to provide finance for the Group’s operations.
The Group may enter into derivative transactions (principally forward foreign currency contracts) in accordance with strict inv estment criteria. The
purpose of such transactions is to manage currency risks arising from the Group’s operations and its sources of finance. It is and has been, throughout
the period under review, the Group’s policy that no trading in financial instruments shall be undertaken.
(a) Interest rate profile
The Group finances its operations and acquisitions through a mixture of retained profits, bank borrowings and equity. The Group b orrows principally in
sterling. Any surplus cash is invested in short-term bank deposits at the prevailing rates of interest in order to achieve the market rate of return.
The interest rate profile of Group’s financial assets at 30 April 2004 was:
Equity Other non-
Floating rate instruments interest
financial (non-interest bearing
Total assets bearing) financial assets
Currency £’000 £’000 £’000 £’000
At 30 April 2004:
Sterling 11,486 889 1,020 9,577
US Dollars 475 475 - -
Euro 472 472 - -
Australian Dollars 152 152 - -
New Zealand Dollars 206 206 - -
HK Dollars 202 202 - -
Singapore Dollars 51 51
Gross Financial Assets 13,044 2,447 1,020 9,577
At 30 April 2003:
Sterling 47,205 38,951 1,098 7,156
US Dollars 426 426 - -
Gross Financial Assets 47,631 39,377 1,098 7,156
Financial assets comprise cash at bank and in hand of £2,447,000 (2003: £39,377,000), fixed asset investments other than associates of £1,020,000
(2003: £1,098,000), and non-tax debtors due after more than one year of £9,577,000 (2003: £7,156,000).
Interest on floating rate bank deposits is based on relevant national LIBOR equivalents.
NOTES TO THE ACCOUNTS 58
NORTHGATE INFORMATION SOLUTIONS PLC 31. FINANCIAL INSTRUMENTS (continued)
The interest rate profile of Group’s financial liabilities at 30 April 2004 was:
Financial
liabilities on
Floating rate Fixed rate which no
financial financial interest
Total liabilities liabilities is paid
Currency £’000 £’000 £’000 £’000
At 30 April 2004:
Sterling 60,008 59,030 557 421
At 30 April 2003:
Sterling 315 - 119 196
All the Group’s creditors falling due within one year (other than bank and other borrowings) are excluded from the above table either due to the
exclusion of short-term items or because they do not meet the definition of a financial liability, such as tax balances. Floating rate financial liabilities
bear interest, based on relevant LIBOR equivalents, which are fixed in advance for periods of up to twelve months, subject to the hedging arrangements
detailed below. The weighted average interest rate on floating rate financial liabilities was 5.8 %.
(b) Maturity profile of financial liabilities
The maturity profile of the carrying amount of the Group’s financial liabilities, other than short-term trade creditors and accr uals, at 30 April was as follows:
At 30 April 2004 At 30 April 2003
Other Other
Finance financial Finance financial
Debt leases liabilities Total Debt lease liabilities Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Within one year
or on demand 44,963 441 - 45,404 -71 - 71
More than one year but
not more than two years 7,602 77 208 7,887 - 33 196 229
More than two years but
not more than five years 6,465 39 213 6,717 -15 - 15
Total 59,030 557 421 60,008 - 119 196 315
NOTES TO THE ACCOUNTS 59
NORTHGATE INFORMATION SOLUTIONS PLC NOTES TO THE ACCOUNTS
31. FINANCIAL INSTRUMENTS (continued)
Borrowing facilities
The Group has a syndicated facility agreement with five banks.The total amount of this facility is £88 million. Of this facility , the Group has the following
available committed floating rate borrowing facilities at 30 April 2004 in respect of which all conditions precedent had been met at that date:
At 30 April At 30 April
2004 2003
£’000 £’000
Expiring within 1 year 4,942 -
Expiring in more than 2 years 55,785 -
60,727 -
These long-term facilities have been arranged to help finance expansion of the Group’s activities in line with the acquisition strategy in place, and to
re-finance debt currently shown as due within one year arising on the acquisition of certain subsidiaries during the year.
(c) Fair values of financial assets and financial liabilities
The carrying amounts of all financial assets and financial liabilities are not materially different from their estimated fair v alues.
(d) Hedging
The effect of the Group’s two interest collar arrangements is to limit the risk to the Group of fluctuating interest rates:
(i) On 26 September 2003, the Group took out a collar arrangement in respect of the funding for the purchase of the freehold of the Group’s
headquarters. The arrangement commenced with a notional principal sum of £12.0 million reducing quarterly over a 10 year period. Interest is payable
on the notional sum at a rate equal to the 3 month LIBOR rate as at each quarterly reset date, and is capped at 6% with a floor of 4.37%. The
arrangement ceases in September 2013. The effect of the arrangement is to limit interest payable on the part of the bank loans e qual to the notional
principal to a range between the cap rate and the floor rate.
(ii) On 3 February 2004, the Group took out a second collar arrangement in respect of borrowings to assist in funding the purchase of Rebus HR Group
Limited and with the Group’s working capital and other requirements. The arrangement commenced with a notional principal sum of £20.0 million,
reducing to £16.0 million on 3 February 2005 and £7.0 million on 3 February 2006. Interest is payable on the notional sum at a rate equal to the
3 month LIBOR rate as at each quarterly reset date on the notional sum, and is capped at 5% with a floor of 4.25%.The arrangemen t ceases in February
2007. The effect of the arrangement is to limit interest payable on the part of the bank borrowings equal to the notional princi pal to a range between
the cap rate and the floor rate.
(e) Foreign currency profile
The Group has some transactional currency exposures. Such exposures mainly arise from sales or purchases in currencies other tha n the Group’s
functional currencies. These exposures represent less than 5% of the turnover of the Group. Based on current levels of exposure, t he Group believes that
this risk is generally manageable without the need for hedging of these transactions.
The Group has the ability where it is considered appropriate on a case by case basis for significant individual transactions to enter into forward foreign
currency contracts. There were no forward foreign currency contracts undertaken in the year (2003: none).
The table below sets out monetary assets and liabilities held in the Group’s non-functional currencies. Foreign exchange differe nces on retranslation of
these assets and liabilities are taken to the profit and loss account of the group companies and the Group.
At 30 April At 30 April
2004 2003
Currency £’000 £’000
US Dollars 153 16
Other
60
NORTHGATE INFORMATION SOLUTIONS PLC The Directors submit their report and the accounts of Northgate Information Solutions plc for the year ended 30 April 2004.
Results and dividends
Results for the year are shown in the Group Profit and Loss Account on page 27.
No interim dividend (2003: £nil) was paid during the year. The Directors do not recommend the payment of a final dividend (2003: £ nil).
Principal activity and review of business developments
The principal activity of the Group is the development and supply of software and related services. This comprises application s oftware including
hardware and associated installation and maintenance services, facilities management and software support, together with the development and supply
of applications development tools.
A review of the operations of the Group is included in the Chairman’s Statement, Chief Executive’s Review and Group Finance Director’s Review on pages
2 to 10.
Directors
The Directors of the Company at the date of this report are those listed on page 12.
G J Bicknell resigned as a Director on 15 May 2003. J R Stier was appointed as a Director on 15 May 2003.
Dr D Hine resigned as a Non-Executive Director on 25 September 2003 and was appointed as a Non-Executive Director on 9 December 2003.
Sir Stephen Lander was appointed as a Non-Executive Director on 29 January 2004. Dr D Hine resigned as a Non-Executive Director on 29 January 2004.
M S Aldis and D J Meaden were appointed as Directors on 27 May 2004. J N Starritt and J Hodgson were appointed as Non-Executive Directors on 27
May 2004.
The service contracts of C M R Stone and J R Stier continue until terminated by the Company giving not less than twelve months notice or the executive
giving not less than six months notice in writing. The service contracts of M S Aldis and D J Meaden continue until terminated b y the Company giving
not less than six months or the executive giving not less than six months notice in writing. The letters of appointment of N J I rens, Sir Stephen Lander,
J R Fryer, J N Starritt and D Hodgson may be terminated by either party giving to the other six months notice in writing.
Directors’ interests
The interests of the Directors who held office at the end of the financial year in the Ordinary Shares and in options to acquir e Ordinary Shares of the
Company and its subsidiary undertakings appear on pages 21 to 23 of the accounts.
Disabled persons
It is the Group’s policy to treat people with disabilities on an equal basis for employment, development and promotion, subject only to their skills and
abilities. Opportunities also exist for employees of the Group who become disabled to continue their employment or to be trained for other positions
in the Group.
Employee involvement
The Group places considerable value on the involvement of its employees and keeps them informed on matters affecting them as em ployees and on
the various factors affecting the performance of the Group. Employees are eligible to obtain share options through the Company’s share schemes.
Research and development
The Group invests significant resources in research and development activity, on product development, enhancement and innovation.
Donations
During the year the Group made no charitable donations (2003: £nil). The Group made no political donations (2003: £nil).
Payments to suppliers
It is the Group’s practice to agree credit terms with suppliers in advance and to pay invoices in line with these agreed terms. The Company has no trade
creditors, creditor payment policies and creditor days outstanding. The Group’s number of days purchases included in trade credit ors at the balance sheet
date was 57 days (2003: 57 days). The main UK trading subsidiary companies’ details are disclosed in their accounts.
DIRECTORS’ REPORT 61
NORTHGATE INFORMATION SOLUTIONS PLC Major shareholdings
At 11 June 2004, the Directors have been notified pursuant to Sections 198 to 202 of the Companies Act 1985, or are otherwise aware, of the following
shareholdings in the Company:
Number of % Issued
Shares Share Capital
Suber Acquisition Limited 115,660,000 23.36
UBS Global Asset Management 22,539,127 4.55
Aberforth Partners 20,161,400 4.07
Herald Investment Management 19,400,000 3.92
M & G Investment Management 18,484,865 3.73
Legal & General Inv. Mgt 17,153,365 3.46
J P Morgan Fleming Asset Management 16,079,630 3.25
ISIS Asset Management (London) 15,070,621 3.04
Auditors
In accordance with Section 384 of the Companies Act 1985, a resolution to reappoint KPMG Audit Plc as auditors of the Company is to be proposed at
the forthcoming Annual General Meeting.
By order of the Board
J R Stier
Secretary
28 June 2004
DIRECTORS’ REPORT 62
NORTHGATE INFORMATION SOLUTIONS PLC DIRECTORS
Nicholas J Irens * 
(Chairman)
Christopher M R Stone 
(Chief Executive)
Geoffrey J Bicknell  
(Resigned 15 May 2003)
John R Stier  
(Appointed 15 May 2003)
Malcolm S Aldis 
(Appointed 27 May 2004)
David J Meaden 
(Appointed 27 May 2004)
Dr Duncan Hine * 
(Resigned 25 September 2003, appointed 9 December
2003, resigned 29 January 2004)
Jack R Fryer *
Sir Stephen J Lander * 
(Appointed 29 January 2004)
J Nicholas Starritt * 
(Appointed 27 May 2004)
David Hodgson * 
(Appointed 27 May 2004)
* Non-Executive
SECRETARY
John R Stier, FCA
REGISTERED OFFICE
Boundary Way
Hemel Hempstead
Hertfordshire HP2 7HU
REGISTERED NUMBER
2762332
AUDITORS
KPMG Audit Plc
8 Salisbury Square
London EC4Y 8BB
BANKERS
Barclays Bank Plc
28 George Street
Luton LU1 2AE
SOLICITORS
Linklaters
One Silk Street
London EC2Y 8HQ
STOCKBROKERS
Hoare Govett Limited
250 Bishopsgate
London EC2M 4AA
FINANCIAL ADVISERS
N.M. Rothschild & Sons Limited
New Court
St Swithin’s Lane
London EC4P 4DU
REGISTRARS AND TRANSFER OFFICE
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 7NH
DIRECTORS AND ADVISERS 63
NORTHGATE INFORMATION SOLUTIONS PLC 30 September 2004Annual General Meeting
31 October 2004Half year end
December 2004Half year results announced
30 April 2005 Financial year end
INVESTOR INFORMATION
REGISTRAR 
Enquiries about the following administrative matters relating to the holding of Northgate Information Solutions plc shares should be addressed to the
Company’s registrars at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 7NH, telephone 0870 702 0 000:
- dividend payment enquiries
- loss of share certificates/dividend warrants/tax vouchers
- notification of change of address
- transfer of shares to another person
AMALGAMATION OF ACCOUNTS
Shareholders who receive duplicate sets of Company mailings as a result of having more than one shareholder account in their name should write to
Computershare Investor Services PLC at the above address to have their accounts amalgamated.
ANNUAL REPORT ON THE INTERNET
The 2003/2004 financial results are available at www.northgate-is.com
SHAREHOLDER INFORMATION ON THE INTERNET
Computershare Investor Services PLC, the Company’s registrars, has introduced a facility where shareholders are able to access details of their shareholding
over the internet subject to passing of an identity check.
You can access this service by selecting the investor relations page on our website at www.northgate-is.com 
The site also includes information on electronic proxy voting and recent trends in the Company’s share price.
FINANCIAL CALENDAR 64
NORTHGATE INFORMATION SOLUTIONS PLC Designed and produced by Design Plus Management Ltd RebusHR
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Northgate Information Solutions plc
Boundary Way
Hemel Hempstead
Hertfordshire HP2 7HU
Tel: +44(0)1442 232424
Fax: +44(0)1442 256454
email: solutions@northgate-is.com
www.northgate-is.com