Sherwood International Plc
Annual Report and Accounts 2002
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 2 Copy to go here
“Being customer-focused is at the core of everything Sherwood 
strives to achieve, and stands for as a solutions provider.”
Mike Shinya, Chief Executive Officer
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 3 Contents
Sherwood International Plc
Annual Report and Accounts 2002
Contents
Sherwood at a Glance 1
Chairman’s Statement 3
CEO Commentary 7
Finance Review 13
Directors, Officers, and Advisers 17
Directors’ Report 21
Directors’ Statement of Responsibility 26
Independent Auditors’ Report 27
Corporate Governance Report 29
Remuneration Report 33
Consolidated Profit and Loss Account 42
Consolidated Statement of Total Recognised Gains and Losses 42
Consolidated and Company Balance Sheet 43
Consolidated Cash Flow Statement 44
Reconciliation of Net Cash Flow to Movement in Net Funds 44
Notes to the Financial Statements 45
Notice of Annual General Meeting 65
© Sherwood International 2003, all rights reserved. 
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 4 1 1 Sherwood at a Glance
Sherwood International Plc Annual Report and Accounts 2002
Sherwood at a Glance
Sherwood International Plc (LSE - UK:SHC)
Established: 1970
Headquarters: Chertsey, UK
Employees: More than 400 in four countries
Turnover (2002): £52.2m
Key Customers:
Industries: Insurance and Government
Website: www.sherwoodinternational.com
• Aviva
• AXA Insurance
• BRIT Insurance Holdings
• Britannia Life
• Capita
• CNA Re
• Department for
Environment, Food and
Rural Affairs (Defra)
• Groupama
• GMAC RE
• The Hartford
• Heritage Group 
• Liberata
• Nationwide Building Society
• New York Life International, Inc.
• New York Life Insurance Co.
• Northwestern Mutual Life
• Reliance Standard Life (RSL)
• Sage Life
• Scottish Equitable International
• Transguard
• Zurich Financial Services
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 1 2 Sherwood at a Glance
“Sherwood is ‘The Insurance Technology Expert’.”
Insurance
Sherwood is ‘The Insurance Technology Expert’. We have
over thirty years’ experience working with some of the
world’s premier insurance companies. As a leading provider
to the insurance industry, we are the only software vendor to
deliver a full range of solutions across all lines of business.
Sherwood’s expertise across a multitude of geographies
means we are uniquely placed to help today’s insurance
organisations achieve their business goals and deliver a rapid
impact to their bottom line.
Government
The Sherwood Government division has over fifteen
years experience working with UK Government Departments
and Agencies. We deliver proven cost effective solutions that
guarantee business continuity for mission critical systems.
Sherwood’s specialist knowledge and rules-based workflow
approach help organisations to meet the real challenges 
of modernising Government through business process
automation whilst ensuring the usability and scalability that
deliver true customer efficiencies.
Introduction
Sherwood International Plc is one of the world’s leading suppliers of software and services 
to the Global Insurance industry and UK Government. Sherwood designs and delivers
exceptional technology solutions that drive business value and increase operational agility in
a rapidly evolving global market.
Key Products and Services:
Amarta
™
LIFE Amarta
™
LIFE
FAST START
Amarta
™
LINES
ProGen2
™
FrontTier
™
ProCede
™
Insurance
Sherwood
™
Enterprise 
Framework for Life and Pensions
Sherwood
™
Enterprise Framework
for Property and Casualty (P&C)
Sherwood
™
Enterprise Framework for
Wholesale Insurance and Reinsurance
Amarta
™
RISK
Senator
™
ProCede
™
Sherwood Global Professional Services
Government
Sherwood
™
Enterprise Framework for Government
æos
™
Sherwood Global Professional Services
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 2 3 Chairman’s Statement 3
Chairman’s Statement 
Sherwood International Plc has rich and unique credentials as a global software
solutions provider. Since its establishment in 1970, Sherwood has focused its
expertise on the insurance industry and since 1985, on government sectors.
Sherwood offers a broad range of products and talent gained through thirty
years of solution provision to its customers worldwide.
The year 2002 has been a particularly turbulent and unpredictable year for Sherwood’s constituent
industries of IT and insurance. However, against a backdrop of uncertain market conditions, the Group has
maintained steady progress and is pleased to announce a balanced set of results, in line with expectations.
Consolidation of a new Executive team under the leadership of Mike Shinya as Chief Executive Officer
occured this year. The prime focus for the Executives over the past year has been to drive through a
programme of operational excellence in order to ensure Sherwood is in a strong position to compete
effectively in the face of what continue to be challenging market conditions.
In line with Sherwood’s overall objective of achieving solution excellence, the primary research and
development focus for 2002 was to leverage the Group’s existing intellectual properties and round out the
product suite in order to meet requirements of key customers; it also helped to underline the Group’s clear
competitive advantage as the only software vendor able to deliver a full range of solutions across all lines
of business in the global insurance industry. 
The Company launched an administration product based on FrontTier
™
in the North American market, and
has already established its first reference client. Investment was also made on a new claims management
solution that will be launched in the first quarter of 2003. Sherwood plans to deliver a new agency and
commissions (ICM) product in 2003, focusing on the North American life marketplace.
Sherwood broadened its mid-range solutions in response to an increased market demand for phased 
or modular implementation of IT projects. Amarta
™
LIFE FAST START was launched in June and leverages
the Company’s insurance expertise in order to pre-populate Amarta
™
with templates, whilst providing a
framework for more bespoke development in the longer term. This enables Sherwood to transition from
selling big project solutions to also offering a more modular approach.
Sherwood International Plc Annual Report and Accounts 2002
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 3 4 Chairman’s Statement 
“Sherwood has developed products and services capable of winning an 
outstanding number of licence sales even in a tough economic climate.”
The year saw a record number of licence contracts won
(twenty-seven in total). In part this is reflective of the
increasing trend toward modular or phased approaches 
to solution procurement, and also of the fact that Sherwood
has deployed products and services capable of winning an
outstanding number of licence sales even in a tough
economic climate.
Sherwood has made great progress in strengthening
relationships with strategic partners. During 2002 the
Company increased its presence with outsourcing partners
Liberata and Capita, and Sherwood’s efforts to extend
geographic coverage through strong strategic partnerships
were also well rewarded with particular success in both
AsiaPac and South Africa. In September the Group announced
a partnership agreement with Hewlett-Packard (HP) to 
co-develop solutions for the Chinese insurance market.
Sherwood also recently signed a global joint sales agreement
with IBM that will serve to expand and increase the velocity
of business scope and penetration, and continues to work
closely with Deloitte Consulting at the strategic and
customer engagement levels.
In the long term, the effective use of research and
development investment is a key strategy for Sherwood and
a critical review this year has set out a clear technology vision
for the Group. Sherwood has grown by acquisition, and each
purchase brought a new set of technologies. Sherwood is
now concentrating its intelligence on a programme to
aggregate its technology set, planning in 2003 to achieve
significant milestones in development coalescence for the
Sherwood
™
Enterprise Framework.
Results in Brief
The Group returned to profitability in 2002. Pre-tax profits
before exceptional items and amortisation of intangibles
grew by 137% to £5.7m (2001: £2.4 million). Profit before tax
was £0.1m (2001: loss £11 million). Basic earnings per share
before exceptional items and amortisation of intangibles and
with a normalised tax charge grew 232% to 12.6p (2001:
3.8p), while diluted earnings per share on the same basis
grew 213% to 11.9p (2001: 3.8p). Basic earnings per share
were 0.3p (2001: loss 25.6p). Diluted earnings per share were
0.3p (2001: loss 25.6p). Turnover was impacted by the
challenging economic climate, and decreased in the year by
8% to £52.2m (2001: £56.5m). 
Exceptional items totalling £4.6m were deducted in 2002,
principally related to redundancies and property costs incurred
as part of restructuring activities offset by £2m of exceptional
income relating to the settlement reached with various parties
in respect of the Court judgement against the Company in
2001, as previously reported.
Sherwood’s balance sheet remains exceptionally strong 
with cash of £11.4m, up £5.4m on the previous year end. 
Dividend
In 2001, the Company cancelled the final dividend and
indicated that it would review the situation in 2002, taking
into account the performance of the business and best
practice within the IT sector. Accordingly, and in the light 
of modest but satisfactory trading results and positive cash,
the Directors have proposed a 2002 dividend of 1p per share,
which will be paid on 6 May 2003 to shareholders on the
register as at 4 April 2003. 
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 4 5 Chairman’s Statement 
Business Review
The results in 2002 were achieved through a disciplined 
and focused approach to reducing operational inefficiency
within the Group. Significant progress has been made 
in implementing programmes aimed at streamlining
operations, rationalising functions, and controlling costs. 
The Group added a number of new blue chip clients to its
insurance customer base including Aviva, the UK’s largest
insurer and one of the top five Life Insurance companies in
Europe, and TransGuard Insurance in America. Sherwood also
extended contracts with major existing customers such as
New York Life and AXA.
As mentioned earlier, Sherwood strengthened its geographic
coverage and strategic alliances during 2002, increasing its
presence with outsourcing partners and offering the
technology backbone Amarta
™
to a number of high-profile
end-users as a result of these relationships. 
Sherwood’s success is in large part founded on its ability 
to deliver products, solutions, and services that are driven 
by customers’ requirements. Over the last two years, 
the Company has seen a high demand from customers 
for solutions that enable the devolution of large-scale 
IT projects into more manageable pieces that can 
be implemented faster and impart a speedier return 
on investment. 
Sherwood has identified key market entry and expansion
points during 2002 and has moved swiftly to deliver products
to take full advantage of these opportunities. During the first
half of 2003 Sherwood will introduce a claims management
system, which has already been validated by strategic
customers, together with roll-out of the new group
administration system in North America, which already has its
first customer. In the second half of this year Sherwood plans
to introduce an agency and commissions product to further
expand market prospects, for both this solution and other
Sherwood products.
The Executive Team
Under the leadership of CEO Mike Shinya, the Group 
has made considerable progress in delivering upon its stated
aim of achieving organisational excellence. 
During the year two non-executive Directors, John Barton
and John Sacher, retired from the Board. On behalf of both
our shareholders and the board as a whole, I would like to
thank both of them for their contributions to the Company.
In September 2002 Sherwood announced the appointment
of three high calibre non-executive Directors. Sherwood’s
Senior non-executive Director Stuart Drew is a Director of
Deloitte Consulting with responsibility for the insurance
industry, further endorsing the Group’s expertise in that
arena. Philip Crawford joins as non-executive Director and
formerly was President of i2 Technologies EMEA, CEO of
InterX, and held a number of key executive posts at Oracle
including Senior Vice President. Non-executive Director
Robert Youngjohns is Executive Vice President of Global Sales
Operations for Sun Microsystems and brings a broad
international knowledge of the IT sector.
Chairman’s Statement (continued)
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 5 6 Chairman’s Statement 
Staff
Sherwood’s business is fiercely client-focused, aiming to
build on and maintain long term customer relationships. As
such, management and staff are critical to Sherwood’s
services’ and products’ excellence. The Group’s employees
have demonstrated the skills, depth of experience, and
dedication so important in providing the very best solutions
available in the industry today; I extend my thanks to them all.
The Group implemented a necessary reduction in the
workforce at the start of the year, which I am pleased to 
say has avoided the need for any further major cutbacks.
Sherwood moves into 2003 with a significantly flatter
structure and fewer headcount overall, tactically deployed to
drive the business forward, always with the clients’ 
needs in mind.
Outlook
The year 2002 was one of transition for Sherwood that 
will serve as a foundation for further progress in 2003.
Sherwood is now in a strengthened position to capitalise 
on opportunities as they emerge. I firmly believe that the
Group’s performance over 2002, with no debt, a positive cash
flow, and delivering operational profits, distinguishes
Sherwood manifestly from its peers in the enterprise
software sector. 
The Group is in a leading position given its customer base,
workforce alignment and array of product sets. Sherwood
has strong, long term, and recurring revenue streams and
continues to aggressively and strategically invest in product
research and development. 
During 2003 Sherwood plans to introduce new products 
to address specific needs within the insurance sector. 
These include group administration, claims management,
agency and commissions, and a business process modelling
tool that can be used in conjunction with Sherwood’s
product suite.
The strategy and focus for 2003 is to generate profitable
business growth via a combination of operational excellence,
product leadership, and by building new relationships to
address developing market areas. 
I look forward to and welcome the occasion to update
shareholders at the forthcoming Annual General Meeting.
Ken Andrew
Independent Non-Executive Chairman
3 March 2003
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 6 7 CEO Commentary
CEO Commentary
Despite a challenging environment, Sherwood has gained a decidedly
creditable result for the year, adding new customers, partners, and products.
Many of our customers have faced very tough times as the equity markets have continued to decline,
new regulations come into force, and market conditions intensified competition. It is a sobering
reflection that many of our comparators who were once held as sector leaders have suffered heavily as
a result. It is in this context that, I am pleased to say, Sherwood has gained clear traction in 2002 in all 
its markets. 
At the start of 2002 we embarked upon an intensive programme to integrate our various acquisitions
into one global business. The streamlining of our company and the resultant synergies are at the heart
of our encouraging earnings performance, which is in line with market expectations (£6.6m of EBITDA
before exceptional items, £5.7m of pre-tax profits before amortisation and exceptional items, and profit
before tax of £0.1m).
Given this creditable result, which is differentiated from many of our comparators, many stakeholders
have expressed disappointment with the performance of our stock price. It may well be the case that,
in the current suppressed market conditions, medium-sized technology companies will struggle to gain
valuation justice in the stock markets despite good performance. This clearly presents Sherwood with a
further set of challenges and food for thought going forward. The Executive team remains wholly
committed to providing first-class operational performance and seeking the best strategy to maximise
shareholder value. 
The Executive team
remains wholly
committed to
providing first-class
operational
performance and
seeking the best
strategy to maximise
shareholder value.
Sherwood International Plc Annual Report and Accounts 2002
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 7 8 CEO Commentary
“Our modular software allows customers to implement in phases, 
delivering a faster return on investment.”
This volatile environment has been characterised by a
cautious and assiduous approach to all IT investment. 
There has been a general unwillingness to commit to spend
on large scale, long term projects. Companies are favouring
phased, modular implementations with lower up-front costs
and rapid execution, which result in a speedier return 
on their investment. In such an uncertain climate, many
companies also continue to defer purchasing decisions, 
so that sales cycles continue to lengthen, resulting in higher
cost of sale and lower contract values for each transaction.
We have responded pragmatically to this environment 
with an intensive “modularity drive”. This spans both the
nature of our product offering and the terms of our
commercial proposition. Now, our modular software allows
customers to implement in phases, delivering a faster return
on investment.
The goals based on operational excellence stated 
at the beginning of the year were dependent on 
significant transformations. In a year of profound transition 
for Sherwood, we implemented major organisational
adjustments, which we believe have reshaped the company
and established a firm base from which to build a sustainable
and profitable global business model. In all of this, we have
made it a priority to manage change very carefully, so that the
business could and did perform at the same time. 
Some of these changes have been cultural: the introduction
of a new Executive team meant more than just new people.
It established a new ethos and company outlook that reflects
the ambitions of what is now a unitary global organisation.
Some of these changes have been structural; at the start of
2002 the Group had just finished a two year period of
significant merger and acquisition activity. This laid the
foundation for the innovation of Sherwood International
from an insurance services management company, to a
software sales and follow-on-services business model.
Furthermore, it required decisive action to defend our cash
position, bringing costs under control and extracting a
better return for shareholders from our existing assets.
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 8 9 CEO Commentary
Early 2002 actions and subsequent close management 
by the new Board and Executive team allow me to report 
a firm performance in line with expectations. In terms 
of overall revenues, there was an 8% reduction to £52.2m,
this decrease being largely attributable to the closing down
of our loss-making Mattodia business in the US and to the
reporting effect of a weakening dollar. We start 2003 
with a well-qualified and healthy pipeline. In the calendar 
year 2002 the Company signed twenty-seven licence
contracts, which is a record for Sherwood and reflects 
the changing dynamics of a lower average selling price,
shorter engagements, and modular or phased project
implementation. As mentioned above, pre-tax profits before
amortisation and exceptional items were £5.7m (profit
before tax £0.1m), meeting consensus goals. In addition, the
Company has no long term debt and a net cash position 
of £11.4m, a very significant improvement over financial
year 2001.
These results have been achieved through strong
stewardship and by responding aggressively in the face of
difficult market conditions. The team took clear and decisive
action early in the year to make a necessary 17% reduction to
the workforce so as to avoid the knock-on damage caused
by gradual incremental cuts. Despite this, we have continued
to invest in augmenting our expertise in areas of particular
strategic importance to the Group. We believe that this is
essential if we are to deliver on our commitment to be
recognised as a world-class provider of technology solutions
and services to the markets that we serve. This includes the
appointment of a Chief Technology Officer who has 
been tasked with leveraging Sherwood’s research and
development operations, integrating the product assets
from previous acquisitions and delivering on our vision for
the future of our solution sets. 
Alongside this, the sales and professional services operations
have been streamlined and the global structure reduced to
just three tiers. As such, a sales or support person is usually
only one line manager away from a Plc Board Director, thus
providing fast, timely, and effective decision making and
customer support.
A clear and focused marketing programme has also helped
us to build goodwill in the Sherwood brand and outperform
a number of our most significant competitors. As a result, we
have achieved a much greater visibility and prominence
within the marketplace. 
In October 2002, Sherwood was rated by CMP as the twelfth
most favourably reported technology company in the UK.
Central to this achievement has been our ability to
differentiate Sherwood within the industry as an organisation
that firmly delivers on its commitments. 
CEO Commentary (continued)
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 9 10 CEO Commentary
As an integral aspect of this differentiation, Sherwood’s
Research and Development (R&D) goal for 2002 was to
maximise existing intellectual properties and product
offerings to best address customer requirements, giving the
Company a tangible competitive lead in the insurance
industry worldwide. We have already successfully established
our first reference client with the introduction of a
FrontTier
™
based group administration product in North
America, and in 2003 a new claims management solution will
also be launched. Sherwood plans to focus on the life
marketplace as well, and deliver a dedicated new agency and
commissions (ICM) product in 2003.
To react to an increased market demand for phased 
or modular implementation of IT projects, Sherwood 
has expanded its solution set accordingly. In June the
Company introduced Amarta
™
LIFE FAST START, transforming
our offering from large-scale project solutions to the
addition of a modular methodology. I am pleased to
announce that our first licence and implementation contract
for Amarta
™
LIFE FAST START was agreed with a leading South
African insurance organisation in December 2002, and a
further pilot is also currently underway in China. 
In the long term, the effective use of our R&D investment 
is a key strategy for Sherwood and we have undertaken 
a critical review to set out a clear technology vision.
Sherwood has grown by acquisition, each purchase bringing
a distinct technology. We are now focused on a programme
to aggregate our technology sets and 2003 will see us
achieve some significant milestones in development
coalescence for the Sherwood
™
Enterprise Framework.
Let us turn now to look at the Group’s performance in 
its two main business areas of insurance and government 
in more detail.
“ In the calendar year 2002 the
Company signed twenty-seven
licence contracts, which is a
record for Sherwood
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 10 11 CEO Commentary
Insurance
As the financial services industry gradually transforms to 
a lower operating cost model, legacy system management
continues to be a critical issue for most organisations.
However, few are prepared to commit to the large-scale
bespoke projects required to deal with this in the current
climate. Sherwood has responded vigorously by offering 
a modular approach in both project implementation and
commercial proposition. Sherwood has also adopted 
a pragmatic view to systems development, where 
new projects are constructed alongside the existing 
legacy infrastructure.
North America represents significant opportunities for 
the Group as it is the biggest single market for insurance
provision. The continued downward pressure on business
and the unknown effect of possible conflict in the Middle
East, have resulted in a sustained atmosphere of caution and
business deferral. Notwithstanding, FrontTier
™
in particular
began to gain significant traction in the P&C marketplace.
This is a trend that is continuing into 2003. Amarta
™
LIFE FAST
START has gained early acceptance in international life
markets and our renewed focus on the North American life
market will produce similar results in 2003, building from
Sherwood’s already strong presence.
The robust emphasis Sherwood placed on partnership
alliances in 2002 in order to strengthen it’s global go-to-
market strategy saw some notable successes. One of the
most significant of these is our partnership agreement with
Hewlett-Packard (HP), announced in September, to develop
software and services that address the unique needs of the
Chinese insurance market. This has already resulted in
Sherwood’s first contract with China Pacific Insurance
Corporation to pilot Sherwood’s flagship Amarta
™
LIFE FAST
START solution, aimed at augmenting the core business
administration system for its life division. The Group has also
increased its presence with outsourcing partners Liberata
and Capita. Amarta
™
LIFE will provide Liberata’s technology
backbone for a number of high profile customers including
Barclays Life and Woolwich Life.
Sherwood has also made significant progress in
strengthening its technology partnerships. In 2002 we 
were appointed as one of only twelve Oracle Executive
partners in Europe, and Sherwood has recently signed a
global sales agreement with IBM.
General insurance was a sector that gave rise to a 
strong pipeline throughout 2002. In September, Aviva
purchased a new five-year licence for ProCede
™
, including
implementation services, annual support, and maintenance.
ProCede
™
will enable Aviva to enhance its already strong
governance around reinsurance counterparty exposure.
Government
UK Government is a strategically important part of
Sherwood’s business and is responsible for fully a third  of
the Group’s turnover. Especially in the current uncertain
economic climate, Government business remains robust and
its investment in IT counter-cyclical to the general trend 
in private enterprise; 2002 was another successful year for
the Sherwood Government division. 
We have enjoyed a long association with Defra and were
pleased to be awarded Sherwood's largest ever multi-year
contract with the Department in November 2002. The
Government customer base was expanded with new
business secured in the Ministry of Defence, National 
Health Service, and the Home Office. 
As we move forward into 2003, Sherwood is a major
supporter of the UK Government’s E-GIF specifications and is
working closely with both Java J2EE and Microsoft’s .NET
product definitions, which are central technical aspects of
Government IT.
CEO Commentary (continued)
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 11 12 CEO Commentary
Outlook
The general outlook remains challenging and Sherwood’s
current view of the marketplace indicates no significant
upturn in trading conditions in 2003. Additionally, concern
over the situation in the Middle East will contribute to the
deferral of the return of economic confidence. Whilst
Sherwood has a healthy pipeline for 2003, we are sensitive to
the prevailing caution in client IT investment. We therefore
anticipate that conversion ratios from pipeline to contract
will be suppressed. 
Sherwood is already fully engaged with its 2003 business
goals and will deploy its solutions and resources to exploit
areas of the market where expenditure will continue. This is
predicted as modular phased projects, particularly in the new
solution areas such as claims, group administration, and
agency and commissions. 
As mentioned in brief earlier, over the last two years there
has been demand from customers for solutions that enable
them to break down large-scale IT projects into more
manageable pieces that can be implemented faster and
deliver speedier return on investment. In 2002 Sherwood
launched Amarta
™
LIFE FAST START, its new modular version
of the Amarta
™
technology with pre-populated templates
aimed at meeting this need. With its speed of deployment
and faster return on investment, Amarta
™
LIFE FAST START is
an exceptionally attractive product for this current uncertain
economic climate.
Sherwood has also identified key market entry and expansion
points during 2002 and has moved very quickly to deliver
products to take advantage. During the first half of 2003,
Sherwood will introduce a claims management system that
has already been validated by strategic customers, together
with roll-out of a new group administration system in North
America that already has its first customer. In the second half
of the year, Sherwood will introduce an agency and
commissions product with alliance entity Datawise to further
expand sales prospects, for both this solution and other
Sherwood products.
The results for 2003 are expected to be weighted more
heavily towards the second half due to the phasing of cost
benefits from the office consolidation and increased service
revenues from existing contracts. Cash flow for 2003 is also
expected to exceed operational profits due to continued
improvements in working capital and the benefits of
improved business practice.
Sherwood will continue to exercise prudent cost control and
the priority remains to defend and grow existing profitability
levels, maintaining a sustainable business model for the
future. Sherwood will aim to expand its business into
emerging marketplaces through strategic partnerships that
will provide greater leverage, and mitigate the cost of
bringing solutions to market. We will selectively examine
acquisitions when they compliment our strategy to further
our penetration of target markets.
“Government business remains robust and
its investment in IT counter-cyclical to the
general trend in private enterprise; 2002
was another successful year for the
Sherwood Government division.”
Mike Shinya
Chief Executive Officer
3 March 2003
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 12 13 Finance Review
Finance Review
The following Finance Review is based on the Group’s consolidated financial
statement, and should be read in conjunction with the Chairman’s Statements
and CEO’s Commentary on pages 3 to 12. The financial statements have been
prepared in accordance with UK GAAP.
The financial results for 2002 were strong despite continuing difficult market conditions, with the Group
returning to profitability in the year. This was achieved through determined cost control, reductions in the
workforce, and restructuring of operations. 
During the year, Sherwood significantly changed the way in which it engages and contracts with customers
to align with best industry sector practice. In particular, standard contracts have been entirely revised around
the separation of deliverables relating to software licences from those relating to services, and greater
emphasis has been placed around cash collection in the shorter term. As a result of this change in practice,
the Directors have taken the opportunity to update the Group’s accounting policies to more accurately reflect
the way in which it carries out business (see note 1 to the financial statements).
With diligent management of working capital the Group’s balance sheet at the year end was much
strengthened, with a significant increase in its cash position and strong reductions in longer term debtors. 
Earnings before interest, tax, depreciation, amortisation, and before exceptional charges, improved by 103%
to £6.6m (2001: £3.2m). Pre-tax profits before amortisation and exceptional charges were £5.7m (2001:
£2.4m). Exceptional items in the year were £4.6m and the profit before tax was £0.1m (2001: loss of £11m). 
Turnover
Reflecting difficult market conditions, turnover decreased in 2002 by 8% to £52.2m (2001: £56.5m). Despite
a record number of new licence contracts signed in the year, overall licence revenue decreased by 12%
to £10.9m (2001: £12.4m). Service revenue also decreased by 6% to £41.3m (2001 £44.1m).
The geographical split of turnover reflected particularly difficult trading conditions in North America, 
where turnover decreased by 22% in the year. This was in large part due to the closure of the loss-making
Mattodia business, which had accounted for 13.8% of revenue in the region in 2001. The North American
markets now represent 30% of the Group’s overall turnover (2001: 36%). A further 8% of total turnover in the
year was generated outside of the UK, primarily in Europe (2001: 7%). Taking the insurance business only (i.e.,
excluding Government revenues), North America represented approximately 42% of Group revenues versus
46% from the UK and 12% from the rest of the world.
Sherwood International Plc Annual Report and Accounts 2002
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 13 14 Finance Review
“A major achievement during the year was the substantial realisation 
of the Company’s office consolidation strategy.”
Sherwood remains focused as a product-led applications
software business with revenues from software licences,
services, and outsourcing. The mix of revenue by type in 2002
was almost unchanged from the previous year, with licence
fees accounting for 21% of total turnover (2001: 22%).
Analysis of turnover by sector reflects the difficulties in 
the P&C and wholesale insurance sectors, where turnover
decreased in the year by 21% and 20% on the previous year
respectively. As a proportion of total Group turnover, P&C
accounted for 18% of turnover (2001: 22%) and wholesale
17% of turnover (2001: 19%). More encouraging was the
performance of the life and pensions sector, where revenue
increased slightly to £19m (2001: £18.9m) being 36% of
Group turnover (2001: 33%). The Government sector
remained a significant and stable sector of turnover with
revenue increasing by 2% to £14.9m, representing 29% of
Group turnover (2001: 26%). The future outlook of this sector
was significantly strengthened in the year with the securing
by Sherwood of a two-year extension to its contract to
supply applications development services to Defra. 
Operating Charges
Operating charges before exceptional items decreased in the
period by 5% to £23m. (2001: £24.2m). This reduction was
achieved through restructuring and effective cost control, in
particular with regards to office and administration costs. 
Office Consolidation
A major achievement during the year was the substantial
realisation of the Group’s office consolidation strategy.
Sherwood had acquired a substantial number of leased
properties over a number of years, many of which related to
acquired companies. Unoccupied offices had been 
sub-leased where possible but still represented a liability to the
company. During the year, Sherwood completed the
acquisition of a new Global Headquarters in Chertsey, Surrey,
UK, on highly favourable terms, and announced the closure 
of its UK offices in Romford, Woking, London, and 
Haywards Heath.
The overall financial result has been to reduce the 
ongoing rental and related operational costs, and to reduce 
future liabilities.
Staff Costs
With challenging and uncertain global market conditions
experienced throughout the year, the Group was forced 
to undertake a significant restructuring of the business,
leading to a reduction in average workforce of 17% to 416
(2001: 500). As a result, total staff costs before exceptional
items fell significantly in the year by 22% to £22.7m 
(2001: £29.1m). 
Research and Development (R&D)
Sherwood reduced spending on R&D in the year by just 2%
to £4.9m (2001: £5.0). At 9.3% of turnover (2001: 8.8%), this
is above our medium term target range of between 4% 
and 8% of turnover and reflects the Group’s continuing
commitment to product development. 
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 14 15 Finance Review
Amortisation
Amortisation was reduced by £0.9m to £1m. This reduction on
2001 was mainly achieved through the significant exceptional
write-down of the balance of goodwill at the end of 2001.
Interest
Net interest income was £0.1m compared with £0.5m 
in 2001. This resulted from lower average cash balances
through the year (average £6.2m) compared to 2001 (average
£11m) and lower interest rates generally. 
Exceptional Items
Exceptional items totalling £4.6m were deducted in 2002,
principally related to redundancies and property costs incurred
as part of restructuring activities offset by £2m of exceptional
income relating to the settlement reached with various parties
in respect of the Court judgement against the Company in
2001 as previously reported.
£’000
Settlement of court judgement & associated costs (2,008)
Redundancy and other staff related costs 4,944
Property related costs 1,685 
(4,621)
Taxation
The tax charge on profits earned in the year was £0.4m 
(2001: £0.1m). However, this charge was offset by favourable
adjustments to charges from previous years. 
Earnings per share
Earnings per share before exceptional items and amortisation
of intangibles and with a normalised tax charge grew 232% to
12.6p (2001: 3.8p), while diluted earnings per share on 
the same basis grew 213% to 11.9p (2001: 3.8p), as set out 
in note 10 to the financial statements. Basic earnings per share
was 0.3p (2001: Loss of 25.6p) and diluted earnings per share
was 0.3p (2001: Loss of 25.6p).
Cash flow and Net Funds
The Group had total net funds at 31 December of £11.4m, an
increase of £5.4m in the year . This was a key objective achieved
in 2002. 
The change in the Group’s business practices enforced both
strong cash collections and reductions of accrued revenue
balances on new licence deals. In addition, accrued revenue
balances from 2001 were successfully converted to cash,
leading to an overall reduction in trade debtors, prepayments
and accrued income of 28% to £18.2m (2001: 25.4m). 
Dividend
For 2001, Sherwood suspended its final dividend and indicated
that it would review the situation in 2002 taking into account
the performance of the business and best practice within the
technology sector. Accordingly, and in the light of the
satisfactory trading result and the positive cash result, the
Directors have proposed a 2002 dividend of 1p per share. This
dividend will be paid on 6 May 2003 to shareholders on the
Register as at 4 April 2003.
Summary
Despite difficult economic conditions encountered
throughout 2001 and 2002, the Group has been able to meet
market expectations for profitability. Sherwood did this largely
by defending a solid recurring revenue stream coupled with
tough cost controls across the businesses. Tight and proactive
management of working capital has resulted in strong cash
generation during the year, which has enabled the Company
to re-instate the dividend suspended in 2001. This approach to
cost control and working capital management continues in
2003.
Finance Review (continued)
Mark Williams
Chief Financial Officer
3 March 2003
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 15 16 Finance Review
1998        
1999        
2000
46
%
37
%
0
%
17
%
100%
47
%
34
%
0
%
19
%
100%
55
%
27
%
1
%
17
%
100%
2001
2002
33
%
19
%
22
%
26
%
100%
36
%
17
%
18
%
29
%
99.9%
Business Segment           
Life and Pensions 
Wholesale Insurance and Reinsurance  
Property and Casualty
Government 
1998        
1999        
2000
2001
2002
13
%
83
%
4
%
100%
20
%
72
%
8
%
100%
21
%
75
%
4
%
100%
15
%
81
%
4
%
100%
22
%
75
%
3
%
100%
Revenue Type      
Licence  
Services
Third Party
Turnover Destination        
UK  
North America
Rest of World
Continential Europe
1998        
1999        
2000
2001
2002
45
%
43
%
2
% 
10
%
100%
57
%
36
%
                  1
%
6
%
100%
62
%
30
%
                2
%
6
%
100%
69
%
23
%
 3
%
5
%
100%
65
%
27
%
1
%
7
%
100%
Segmental Analysis
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 16 17 Directors, Officers, and Advisers
Directors, Officers, and Advisers
Directors: Executives
Martyn Lambert – Chief Marketing Officer
Martyn, aged 48, was appointed a Director of Sherwood International Plc in January 2002 and is
responsible for development, partner business, marketing, and corporate communications at
Sherwood. Martyn has twenty-five years’ experience in marketing, sales, and program management
functions in the global IT industry gained with major players such as HP , Siemens, Sun Microsystems, and
Dell, in Europe and North America. At HP Martyn was awarded the CEO 'STAR' award for software
innovation, and he still holds the global record ($2.8m USD) for a software sale in HP. Martyn was a
member of the worldwide marketing council for Sun and helped introduce Sun Java products to the
European marketplace, and he managed the UK's largest internet business at Dell’s corporate internet
business. Martyn is a Fellow of the Chartered Institute of Marketing (FCIM), and is an advisory board
member to the School of Management of the University of Reading where he lectures on a variety of
technology and other topics. Martyn is a founder and non-executive Director of Beta Brands Limited.
Barney Quinn – Global Sales Director
Barney, aged 50, joined the Company in 1985 and has been a Director of Sherwood International Plc for
twelve years. Barney is currently Director of Sherwood International Plc’s Global Sales Operations,
including the Global Professional Services division. Prior to joining Sherwood in 1985, Barney spent
eleven years with Burroughs Corporation in a variety of sales and marketing management roles. Barney
has been involved in the majority of strategic moves that Sherwood has made over the last fifteen years,
including starting the North American business, and developing and implementing the acquisition
strategies undertaken by the Company, including the acquisition of the Government division.
Mike Shinya – Chief Executive Officer
Prior to joining Sherwood International Plc, Mike, aged 45, had spent a twenty-two year career in a
number of global software and technology companies. He served in a variety of senior management
positions, including Executive Vice President for Worldwide Sales at the Baan Company, where he was
also a member of their Management Board. Mike held this position with Baan for their last year as an
independent company, and was part of the Executive team responsible for the sale of Baan to Invensys
Plc. Prior to Baan, Mike worked at Oracle Corporation where he held positions as Vice President and UK
Sales Director, as well as serving as Sales Operations Director for Europe, Middle East, and Africa. Mike 
also worked at the SAS Institute, the world’s largest privately owned software company, where he was
their UK Sales Director. Prior to these senior management positions, Mike had a ten-year career at IBM,
mainly in sales and marketing, becoming the Regional Director for London and the South East for IBM’s
External Channels. 
Sherwood International Plc Annual Report and Accounts 2002
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 17 18 Directors, Officers, and Advisers
Graham Twaddle – Technical Director
Graham, aged 41, has been Technical Director of Sherwood International Plc for eight years. He is primarily
responsible for the research and development of architectures, methodologies, products, and toolsets
across the Group, with particular responsibility for Amarta
™
and æos
™
products. Graham has led the
Amarta
™
development team since the early 1990’s with the participation of more than a dozen insurance
companies around the world. Launched in November 1999, æos
™
was also developed by the same
technical team under Graham’s direction. He is co-author, with M. Jackson, of the Business Process
Implementation book. Prior to joining Sherwood, Graham was responsible for many large-scale, mission-
critical systems as Technical Director of Beta Computers Europe Ltd. Graham founded Beta Computers in
1988 to advise on downsizing IT systems, particularly in the insurance market, building on his experience
as a Senior Database Designer at SYSCORP Ltd.
Mark Williams – Chief Financial Officer
Mark, aged 38, was appointed a Director of Sherwood International in January 2002. His responsibilities
cover all aspects of the Sherwood Group’s finance and administration, and Mark also has joint
responsibility for investor relations. Prior to joining Sherwood, Mark was Vice President Finance and
acting CFO for Converge, a company formed by an industry consortium of fifteen founders led by HP
and Compaq. Mark qualified as a Chartered Accountant with Robson Rhodes and subsequently gained a
wide range of corporate experience in senior financial positions with Sun Microsystems, Attachmate
Corporation, and Baan Company.
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 18 19 Directors, Officers, and Advisers
Directors: Non-Executives
All independent non-executive Directors are members of the Audit, Remuneration, and Nomination
Committees. Stuart Drew is Senior independent non-executive Director and Chairman of the Audit
Committee, Robert Youngjohns is Chairman of the Remuneration Committee, and Ken Andrew is
Chairman of the Board and of the Nomination Committee.
Ken Andrew – Independent Non-Executive Director, Chairman of the Board, and of
the Nomination Committee
Ken, aged 58, has been a Director of Sherwood International Plc for five years, having joined the Board
on 1 December 1997, and is non-executive Chairman. Ken chairs Board meetings, is Chairman of the
Nominations Committee, and currently spends approximately one day per week on Group activities. Ken
has served many companies in the financial services sector over the past thirty years, either as Director
or Chairman, including Chase Manhattan in Europe, N & P Building Society, AssureSoft, DBS Management
plc, and Aetna International Investment, and was an Executive manager of National Westminster Bank
plc. Ken is currently Chairman and joint owner of St. James Business Centre.
Philip Crawford – Independent Non-Executive Director
Philip, aged 51, joined the Board of Sherwood International Plc in August 2002. He was formerly
President of Europe, the Middle East, and Africa at i2 Technologies. Philip has held a variety of key
Executive posts, including Senior Vice President of Oracle Corporation, President of EDS International,
Senior Executive at Bull, and CEO at InterX.
Stuart Drew – Senior Independent Non-Executive Director and Chairman of 
the Audit Committee
Stuart, aged 52, joined the Board of Sherwood International Plc in August 2002. Stuart is a Director of
Deloitte Consulting with responsibility for the insurance sector. Prior to this Stuart was on the retail
Board of Prudential UK. He has also served as Chairman of LIMRA UK, the worldwide financial services
trade association, and the European Strategic Issues Group, and is a Central Committee member of the
English Speaking Union.
Directors, Officers, and Advisers (continued)
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 19 20 Directors, Officers, and Advisers
Robert Youngjohns – Independent Non-Executive Director and Chairman 
of the Remuneration Committee
Robert, aged 51, joined the Board of Sherwood International Plc in September 2002. Robert is Executive
Vice President of Global Sales Operations for Sun Microsystems where he has also held the positions of
Vice President Europe, Middle East and Africa, and of the UK operation. Prior to joining 
Sun in 1995, Robert served at IBM for a period of seventeen years, building an extensive portfolio of sales
and management experience.
Company Secretary
Angela Randolph – Company Secretary and Global Head of Legal/Group 
General Counsel 
Angela Randolph joined Sherwood International Plc in September 2002 as Global Head of Legal/Group
General Counsel, and was appointed to the Board as Company Secretary on 4 November 2002. Prior to
joining Sherwood International Plc, Angela held senior management and General Counsel positions at
Verbena Networks, Inc., and Orchestream Holdings plc in London, and served as Corporate Counsel and
Commercial Manager for British Telecommunications plc in London and New York. Angela began her
legal career as a prosecutor in Boston, worked at a number of law firms and the Ministre de la Justice in
Paris, spent two years as a management consultant based out of New York primarily advising on
international transactional law and performance engineering, and was Legal Counsel for British American
Bank Note Technologies Corporation before joining BT. Angela has published legal treatises in English
and French, is a member of the American and Massachusetts Bar Associations, and is completing her
qualification as a UK solicitor this year.
Bank
National Westminster Bank Plc
City of London Office
P.O. Box 12258
1 Princes Street 
London EC2R 8PA UK
Auditors
KPMG Audit Plc
8 Salisbury Square
London EC4Y 8BB UK
Solicitors
Olswang
90 High Holborn
London WC1V 6XX UK
ADVISERS
Registered Office
Sherwood House
Eastworth Road
Chertsey, Surrey KT16 8DF UK
Registered No. 1812127
Registrars
Northern Registrars Limited
Northern House
Woodsome Park
Fenay Bridge
Huddersfield HD8 0LA UK
Merchant Bank
Close Brothers Limited
10 Crown Place
Clifton Street
London EC2A 4FT UK
Stockbrokers
Hoare Govett
Corporate Finance Limited
250 Bishopsgate 
London EC2M 4AA UK
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 20 21 Directors’ Report
Directors’ Report
The Directors present their annual report for Sherwood International Plc
(also referred to throughout as “Sherwood”) together with the audited
financial statements for the year ended 31 December 2002.
Principal Activities
The principal activity of the Group is the provision of technological solutions.
Review of the Year
A review of the business, its results, and future direction is included in the Chairman’s Statement 
on pages 3 to 6, the CEO Commentary on pages 7 to 12, and the Finance Review on 
pages 13 to 16.
Dividend
A final dividend of 1p per Ordinary Share is being proposed for the year ended 31 December 2002. No
interim dividend was paid, thus this equates to 1p as the total dividend for this year (2001: 0.85p). 
Directors
Directors during the year and subsequently:
• Ken Andrew (independent non-executive), Chairman 
• Mike Shinya, Chief Executive Officer
• Barney Quinn, Global Sales Director
• Graham Twaddle, Technical Director
• Martyn Lambert, Chief Marketing Officer (appointed 3 January 2002)
• Mark Williams, Chief Financial Officer (appointed 7 January 2002)
• Richard Brooman (resigned 7 January 2002)
• John Barton (independent non-executive) (resigned 5 August 2002)
• John Sacher (independent non-executive) (resigned 5 August 2002)
• Philip Crawford (independent non-executive) (appointed 5 August 2002)
• Stuart Drew (independent non-executive) (appointed 5 August 2002)
• Robert Youngjohns (independent non-executive) (appointed 4 September 2002)
Directors’ Interests
Details of the Directors’ interests in the share capital and share options of the Company are shown on
pages 40 and 41.
Sherwood International Plc Annual Report and Accounts 2002
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 21 22 Directors’ Report
Corporate Governance
Details of corporate governance and the Company’s
compliance with the Combined Code are given in the
Corporate Governance Report on pages 29 to 32.
Substantial Shareholdings
As at 3 March 2003 the Company had been notified 
of the following interests in 3% or more of the Ordinary
Share capital:
Beneficial Holder Holding %
Fidelity International Limited 6,865,269 14.81
Aberforth Partners 5,720,000 12.34
Throgmorton Trust PLC 1,500,000 3.24
Creditors Payment Policy
The Group agrees terms and conditions for its business
transactions with suppliers. Payment is then made on these
terms, subject to the terms and conditions being met by the
supplier. Trade creditor days averaged 36 days (2001: 44 days)
for the Group based on aggregate amounts invoiced by
suppliers during the year . The Company has no trade creditors.
Financial Instruments
The Group uses derivative financial instruments to manage
its exposures to fluctuations in foreign currency exchange
rates. Derivative instruments utilised by the Group 
are forward currency contracts. Forward currency contracts 
are accounted for as hedges, with the instrument’s impact
on profit deferred until the underlying transaction 
is recognised in the Profit and Loss Account. The Group’s
operations are funded by shareholders’ funds; the Group 
has no debt.
Interest Rate Risk
Given that the Group has net funds, the Group policy is to
minimise interest expense.
Liquidity Risk
Liquidity risk management is strongly influenced by the
Group’s cash position.
Currency Risk
Material foreign currency transactions are selectively hedged
by the use of forward contracts where and as appropriate. All
such contracts are negotiated centrally and are approved by
the Chief Financial Officer. The table in note 23 shows the
Group’s currency exposures after hedging that give rise to
net currency gains and losses recognised in the Profit and
Loss Account. Such exposures comprise the net monetary
assets and liabilities of the Group that are not denominated
in the functional currency of the operating unit involved, and
principally consist of cash deposits and trade debtors.
Research and Development
Expenditure for the year on research and development 
was £4,863,000 (2001: £4,990,000). Details of research and
development expenditure are provided in the CEO
Commentary on pages 7 to 12 and the Finance Review is on 
pages 13 to 16.
Employment Policy
The employment policies of the Group embody the principle
of equal opportunity for all employees, regardless of
gender, age, religion, marital status, or ethnicity. It is the
Group’s policy to give full and fair consideration to
applications for employment from people who are disabled,
to continue wherever possible the employment of
employees who become disabled, and to provide equal
opportunities for career development of disabled
employees. There are regular events to disseminate Group
information to staff and to facilitate their involvement in the
business. Employees are encouraged to participate directly
in the success of the business through the Group’s 
Share Option Schemes including the Savings Related Share
Option Scheme.
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 22 23 Directors’ Report
Environmental Policy
Sherwood is committed to achieving environmental best
practice consistently within its business activities wherever this
is practicable. Sherwood’s environmental management
process is based upon continuous improvement. 
Sherwood believes that sound environmental practice 
is a key ingredient of effective corporate management. 
It is therefore Sherwood’s policy to:
• seek to educate and train employees to act in an
environmentally responsible manner
• comply as a minimum with all legislative requirements
• provide safe working conditions for employees
• add environmental risks to risk assessment and
management checklists
• conduct internal environmental reviews and 
publish results.
Sherwood continues to work with external consultants to
ensure that its environmental policy is implemented and
continually monitored throughout the Group.
Health and Safety Policy 
Sherwood has an official health and safety policy
promulgated as follows: “the Company offers software
solutions and services to the global insurance industry and
Government. In delivering these services the Company
recognises that it has responsibilities for the health, safety,
and welfare of its employees, and for those who work with
the Company or who otherwise are affected by their work
activities.” The Company health and safety policy is made
available to employees of the Company on the intranet and
copies of the policy are also available upon request.
Resolutions to be proposed at the Annual
General Meeting
The Listing Rules published by the Financial Services Authority
require the Company to explain the nature and effect of
certain of the proposals for consideration at the forthcoming
Annual General Meeting. In addition, the Combined Code
recommends that the Company gives you biographical details
of the Directors standing for election or re-election to enable
you to take an informed voting decision.  This section is
intended to satisfy those requirements and recommendations
and should help you decide whether and, if so, how you
should vote on certain of the resolutions set out in the notice
of the meeting. Resolutions 1 to 9 inclusive, which are
proposed as ordinary resolutions, constitute Ordinary Business
and Resolutions 10, 11 and 12 constitute Special Business.
Resolution 10 is proposed as an ordinary resolution and
Resolution 11 and 12 are proposed as special resolutions.
Approval of the Remuneration Report –
Resolution 2
Resolution 2 set out in the notice of the meeting, if passed,
will approve the Directors' Remuneration Report. Companies
listed on the London Stock Exchange with financial years
ending on or after 31 December 2002 are now required to
prepare a detailed Directors' Remuneration Report and seek
shareholder approval of the report following the
implementation, in August 2002, of the Directors’
Remuneration Report Regulations 2002 ("Regulations"). The
Regulations partly replicate the existing requirements of the
Listing Rules which are set out in paragraph 12.43A and in the
Combined Code but, in addition, expand on the current
disclosure requirements. The Directors' Remuneration
Report can be found on pages 33 to 41.
Directors’ Report (continued)
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 23 24 Directors’ Report
Re-election of Ken Andrew – Resolution 4
Please see biography on page 19.
Re-election of Martyn Lambert – Resolution 5
Please see biography on page 17.
The election of Philip Crawford – Resolution 6
Please see biography on page 19.
The election of Stuart Drew – Resolution 7
Please see biography on page 19.
The election of Robert Youngjohns – Resolution 8
Please see biography on page 20.
The re-appointment of Auditors – Resolution 9
A resolution will be proposed at the Annual General Meeting
for the re-appointment of KPMG Audit Plc as auditors of 
the Company.
Authority to allot shares – Resolution 10
Resolution 10 set out in the notice of the meeting, if passed,
will confer authority on the Board pursuant to Section 80 of
the Companies Act 1985 (the “Act”) to allot unissued shares
up to an aggregate nominal amount of £386,236.46
representing 33.3% of the Company’s current issued
Ordinary Share capital.  The Board does not have any present
intention of exercising the powers conferred by this
resolution but considers it desirable that there should be
flexibility to issue shares from time to time to enable the
Company to take advantage of business opportunities as
they arise.  The authority will lapse 15 months after the date
of the resolution or (if earlier) at the conclusion of the
Company’s next Annual General Meeting after the 2003
Annual General Meeting.
Authority to allot shares disregarding 
pre-emption rights – Resolution 11
Resolution 11 set out in the notice of the meeting, if passed,
will confer authority on the Board to allot unissued shares
without regard to statutory pre-emption rights set out in
Section 89 of the Act. However, this power is limited in two
respects as follows.  Firstly, the power to disregard Section 89
of the Act may be exercised in connection with a rights issue
but the Board is still required in such circumstances to make
a pre-emptive offer in accordance with the requirements of
the Listing Rules. This disapplication of Section 89 of the Act
would, however, allow the Board to extend the pre-emptive
offer to persons other than members of the Company with
rights referable to the Company’s equity securities, and to
disregard when conducting a rights issue entitlements to
fractions and entitlements which the Board deems it
expedient to ignore, for example because of overseas legal
and regulatory difficulties.  Secondly, the power to ignore the
statutory pre-emption rights set out in Section 89 of the Act
is limited to the making of allotments for cash up to an
aggregate nominal amount of £57,935.47 representing 5%
of the Company’s current issued Ordinary Share capital. The
authority will lapse 15 months after the date of the
resolution or (if earlier) at the conclusion of the Company’s
next Annual General Meeting after the 2003 Annual 
General Meeting.
Authority to repurchase shares – Resolution 12
The Act permits a company to purchase its own shares if it is
authorised to do so by shareholders in a general meeting.
Resolution 12 set out in the notice of the meeting, if passed,
will authorise the Company to make purchases of up to
4,634,838 Ordinary Shares of 2.5p each in the capital of the
Company representing 10% of the Company’s issued
Ordinary Shares as at 3 March 2003.
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 24 The price per share to be paid on a repurchase of an Ordinary
Share by the Company must be no lower than the nominal
value of a share and no higher than an amount equal to
105% of the average of the middle market quotations for an
Ordinary Share as derived from the London Stock Exchange
Daily Official List for the five business days immediately
preceding the day on which the shares are contracted to be
purchased. Any shares purchased in this way will be cancelled
and the number of shares in issue reduced accordingly.
As at 3 March 2003, a total of 4,403,696 options to subscribe
for Ordinary Shares in the Company were outstanding
pursuant to the Company’s Employee Share Schemes (details
of these can be found on pages 34 to 37). Such options
represent 9.5% of the existing issued share capital of the
Company and would represent 10.6% of the Company’s
issued share capital if the proposed authority to purchase
the Company’s own shares were exercised in full.
The Board has no present intention of exercising this
authority and will only exercise it at price levels and in
circumstances which it considers to be in the best interests
of shareholders, after taking account of the overall financial
position of the Group, and which, in particular, would lead to
a beneficial impact on earnings per share of the Company.
The authority, if granted, will lapse 15 months after the date
of the resolution or (if earlier) at the conclusion of the
Company’s Annual General Meeting following the 2003 Annual
General Meeting.
Documents available for inspection
Copies of the service contracts of the Directors of the
Company will be available for inspection at the registered
office of the Company at Sherwood House, Eastworth Road,
Chertsey, Surrey, KT16 8DF, UK from today until 1 May 2003
during usual business hours (daily from 9.00 am to 5.00 pm,
excluding Saturdays, Sundays and Bank Holidays) and will also
be available for inspection at the venue for the meeting from
11.15 am on 1 May 2003 until the end of the meeting.
Recommendation
The Directors believe that the proposals referred to above
are in the best interests of the Company and its shareholders
and recommend shareholders to vote in favour of the
resolutions to be proposed at the Annual General Meeting, as
they propose to do in respect of their own shares,
amounting to 879,118 Ordinary Shares representing 1.90% of
the Company’s issued Ordinary Share capital.
Annual General Meeting 
The Annual General Meeting will be held at The Great Eastern
Hotel, 40 Liverpool Street, London, EC2M 7QN, UK, on 1 May
2003. Shareholders will find notice of the Annual General
Meeting on pages 65 to 66 of this report. In accordance with
the Companies Act 1985 and the Combined Code
requirements, shareholders will have received at least
twenty-one days’ notice and twenty working days’ notice,
respectively, of the Annual General Meeting.
Shareholders will find enclosed a form of proxy for use at
the Annual General Meeting. Shareholders are asked to
complete and return it to Northern Registrars Limited,
Northern House, Woodsome Park, Fenay Bridge,
Huddersfield, HD8 0JQ, UK, so as to arrive not less than 48
hours before the time appointed for the meeting.
Completion of a form of proxy will not preclude
shareholders from attending and voting in person if they
wish to do so.
25 Directors’ Report
Directors’ Report (continued)
By order of the Board
Angela P. Randolph
Company Secretary
3 March 2003
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 25 26 Directors’ Statement of Responsibilities
Directors’ Statement of Responsibilities
Company law requires Directors to prepare financial statements for each financial year which give a true
and fair view of the state of affairs of the Company and Group and of the profit or loss for that period.
In preparing those financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently
• make judgments and estimates that are reasonable and prudent
• state whether applicable accounting standards have been followed, subject to any material
departures disclosed and explained in the financial statements
• prepare financial statements on the going concern basis unless it is inappropriate to presume that
the Group will continue in business.
The Directors are responsible for keeping proper accounting records which disclose with reasonable
accuracy at any time the financial position of the Company and enable them to ensure that financial
statements comply with the Companies Act 1985. They have general responsibility for taking such steps
as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud
and other irregularities.
Sherwood International Plc Annual Report and Accounts 2002
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 26 27 Independent Auditors’ Report
Independent Auditors’ Report to the Members of Sherwood International Plc
We have audited the financial statements on pages 42 to 64.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 audit work has been undertaken so that we might state to the Company’s
members those matters we are required to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the
Company and the Company’s members as a body, for our audit work, for this report, or for the opinions
we have formed. 
Respective Responsibilities of Directors and Auditors
The Directors are responsible for preparing the Annual Report and the Directors’ remuneration report. 
As described on page 26, this includes responsibility for preparing the financial statements in accordance
with applicable United Kingdom law and accounting standards. Our responsibilities, as independent
auditors, are established in the United Kingdom by statute, the Auditing Practices Board, 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 financial statements give a true and fair view and whether
the financial statements 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 financial statements, if the Company has not kept proper
accounting records, if we have not received all the information and explanations we require for our audit,
or if information specified by law regarding Directors’ remuneration and transactions with the Group is 
not disclosed. 
We review whether the statement on pages 29 to 32 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 financial statements. We consider the implications for our report if we become
aware of any apparent misstatements or material inconsistencies with the financial statements. 
Independent Auditors’ Report
Sherwood International Plc Annual Report and Accounts 2002
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 27 28 Auditors’ Report
Basis of Audit Opinion 
We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. An
audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the
financial statements 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
financial statements, and of whether the accounting policies are appropriate to the Group’s circumstances,
consistently applied, and adequately disclosed. 
We planned and performed our audit so as to obtain all the information and explanations which we
considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the
financial statements 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 financial statements and the
part of the Directors’ remuneration report to be audited.
Opinion
In our opinion:
• the financial statements give a true and fair view of the state of affairs of the Company and the Group
as at 31 December 2002 and of the profit of the Group for the year then ended; and 
• the financial statements 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
3 March 2003
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 28 29 Corporate Governance Report
Corporate Governance Report
Introduction 
Following the publication of the Combined Code in June 1998 and the addition of Rule 12.43A to the
Listing Rules, Directors are required to make their statement concerning corporate governance in two
parts. Firstly, a statement setting out how the Company has applied the principles set out in Section 1
of the Combined Code, and secondly, a statement as to whether the Company has complied
throughout its accounting period with provisions set out in Section 1 of the Combined Code. References
are to paragraphs of the Combined Code.
The Board read with interest the recommendations of Derek Higgs in his ‘Review of the role and
effectiveness of non-executive Directors’ issued on 20 January 2003 and stands ready to follow best
practice in respect of the matters dealt with in that Review in due course.
Principles of the Combined Code 
The Board of Directors is accountable to the Company’s shareholders for good corporate governance
and this statement describes how the Company applies the principles of the Combined Code.
Board of Directors (Principles A.1 – A.6) 
Board meetings are scheduled to take place most months, and last year ten meetings were held. All the
meetings were attended by the relevant Directors. There is a schedule of specific items which are
reserved for the Board to deal with, and this document is available to all members of the Board. These
specific items include acquisitions and disposals, treasury, major capital expenditure, the risk register,
and approval of annual budgets. Some matters may be delegated to a Committee of the Board that will
consist of a minimum of two Directors. 
Directors are entitled to take independent legal advice and, if the Board is informed in advance, the cost
of such advice is to be reimbursed by the Company. This year none of the Directors requested access to
independent legal advice. 
The Company Secretary’s services are available to all members of the Board. The appointment and
removal of the Company Secretary is a decision for the Board as a whole. 
When a Director is appointed to the Board, they are given every opportunity to request information
concerning their duties as a Director. They are also given an information pack setting out the
responsibilities of Directors and, where appropriate, further training is available.
The Board comprises the independent non-executive Chairman, the Chief Executive, a further three
independent non-executive Directors, and four further Executive Directors. The Company does not
combine the role of Chairman and Chief Executive. Stuart Drew is the Company’s Senior independent
non-executive Director, this role was previously held by John Sacher until his resignation on 5 August
2002. The Directors’ biographies can be found on pages 17 to 20 of this report. The Company considers
its non-executive Directors to be independent on a variety of grounds. These include that none of them
has been employed by the Company in an Executive capacity, and each was selected via a formal process
involving every member of the Board.
Sherwood International Plc Annual Report and Accounts 2002
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 29 30 Corporate Governance Report
All Directors are subject to election by shareholders at 
the first opportunity following their appointment by the
Board. Subsequently they must seek re-election no less than
every three years. The non-executive Directors’ letters of
appointment are for a three year term and have a maximum
notice period of three months. When a Director is put forward
for re-election, the Director’s biographical details are offered
to shareholders so that they are able to make an informed
decision concerning their re-appointment. Fees for
independent non-executive Directors are set by the Board.
An agenda of Board items is circulated to all Board members
two weeks prior to the agreed date for each Board meeting.
The Board is normally provided with relevant Board papers one
week prior to each Board meeting. Further information about
any agenda item is available on request. The Chairman receives
Board papers at the same time as all other members of the
Board. If he, or any Director, believes that the information 
is not sent in sufficient time he will raise the matter at the
Board meeting.
Each of the non-executive Directors sit on the Remuneration,
Audit, and Nominations Committees. All three Committees
have written terms of reference. Following their
appointments as Directors of the Company, Stuart Drew and
Philip Crawford joined each Committee in August 2002, and
Robert Youngjohns joined in September 2002.
Remuneration Committee
Robert Youngjohns is the Chairman of the Remuneration
Committee which is responsible for the terms and conditions
and remuneration of both the Executive Directors and senior
management. The Committee may consult external agencies
when ascertaining market rates for salaries within the IT
industry.
Audit Committee
Stuart Drew is Chairman of the Audit Committee. The
Committee meets quarterly and is responsible for, among
other matters, the appointment of the Company’s Auditors,
reviewing the audited accounts before they are put to the
Board, reviewing the Group’s systems of internal control, and
reviewing the Group’s operating, financial, and accounting
policies and practices. The Executive Directors are typically
invited to attend the meetings. The Company’s auditors also
attend by invitation and have access to the committee for
independent discussion.
Nomination Committee
Ken Andrew is the Chairman of the Nomination Committee.
This Committee is responsible for considering any
appointment or reappointment of Executive Directors to the
Board. The Committee provides advice and recommendations
to the Board for any such appointment. 
Directors Remuneration (Principles B.1 – B.3) 
Details of the Company’s Policy on Director’s Remuneration
are contained in the Remuneration Report on pages 33 to 41.
Relations with Shareholders (Principles C.1 – C.2)  
Sherwood gives high priority to its communication with
shareholders by means of an active investor relations
programme. The Company responds to all letters from
individual shareholders on a range of issues. Sherwood holds
an open day annually at which institutional shareholders are
updated on the business of the Company. Sherwood also
hosts several private client stockbroker update events 
and attends various investor shows in an effort to ensure 
both private and institutional shareholders are kept 
well-informed. The Company’s financial results and 
business presentations, together with extensive corporate
information, are made available on the Company’s web site
(www.sherwoodinternational.com). Sherwood’s Interim and
Annual Reports are available from the Company’s Global HQ or
via the Financial Times Annual Report Service free of charge,
and are also available on the Company’s web site. Although
there is no specific requirement to do so, the Company
normally provides a trading update at the Annual General
Meeting and on its open day. A business presentation is
offered at the Annual General Meeting where shareholders are
given the opportunity to question all members of the Board.
Notice of the Annual General Meeting is sent to shareholders
at least twenty working days before the Annual 
General Meeting.
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 30 31 Corporate Governance Report
Internal Controls (Principles D.1 – D.3)
The Board is ultimately responsible for the Group’s system of
internal control and for reviewing its effectiveness. However,
such a system is designed to manage rather than eliminate
the risk of failure to achieve business objectives, and can
provide only reasonable and not absolute assurances against
material misstatement or loss.
The Combined Code introduced a requirement that Directors
review the effectiveness of the Group’s system of internal
control. This extends the existing requirement in respect of
internal financial controls to cover all controls including
financial, operational, compliance, and risk management.
The Board has an on-going process for identifying,
evaluating, and managing the Group’s significant risks, which
has been in place for the year ended 31 December 2002 and
up to the date of approval of the Annual Report and
Accounts. The risk register is regularly reviewed by 
the Board. 
During the year the Internal Auditor left the Company. 
The Board has considered the need for replacing the Internal
Auditor, and after taking into account the current size of the
organisation and the level of internal control procedures for
identifying, evaluating and managing the Group’s significant
risks, has concluded that at this stage there is no
requirement. The on-going monitoring of key business risks
and reporting on them to the Audit Committee has been
taken on by the Group’s Financial Controller who, in this role,
has a direct reporting line to the Chairman of the Audit
Committee. The Audit Committee receives reports on a
regular basis and directs the areas of internal audit focus. At
present, the Board feels that the current arrangement is
satisfactory, but in line with current best practice, it will
review the situation at least annually.
The Audit Committee has reviewed key business risks facing
Sherwood and the adequacy of internal controls. Where
appropriate, the Audit Committee will refer issues to the
attention of the Board. The Audit Committee meets
quarterly and, in accordance with its terms of reference,
monitors the adequacy of the Group’s system of internal
financial controls and provides the opportunity for the both
internal and external auditors to communicate directly with
independent non-executive Directors. 
The roles and responsibilities of the Group’s business leaders
are clearly defined and a planning and budgeting process
operates throughout the Group. This process includes
monthly reporting to the Board of results against plans. 
The Group has a number of established procedures in place
that are designed to address the requirement of guidance
given by the Turnbull Committee. Key elements of the
Group’s present system of internal controls are as follows.
Control Environment
The Group is committed to the highest standards of business
conduct and seeks to maintain these standards across all of
its operations globally. The Group has a code of business
conduct contained within its corporate Understanding
People Policies document (“UPP”) which is accessible to all
employees and provides practical guidance for staff on
Sherwood’s values and accepted business practices. Group
policies and employee procedures for the reporting and
resolution of suspected unauthorised activities are also in
place. The Group has an appropriate organisational structure
for planning, executing, controlling, and monitoring
business operations in order to achieve Group objectives.
Lines of responsibility and delegations of authority 
are documented.
Corporate Governance Report (continued)
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 31 32 Corporate Governance Report
Risk Identification
Group managers are responsible for the identification and
evaluation of key risks applicable to their areas of business.
These risks are assessed on a continual basis and may be
associated with a variety of internal or external sources. 
All employees have the opportunity to bring new risks to the
attention of the Group’s management in the course 
of regular team meetings at which the relevant sections of
Sherwood’s risk register are routinely reviewed. Continual
review of the Company’s risk management process is 
on-going and is aimed to result in further and regular
improvements to the risk management process.
Information and Communication 
Group businesses participate in periodic strategic reviews
which include consideration of long term financial projections
and the evaluation of business alternatives. Operating units
prepare annual budgets and have contributed to the
development of a five-year strategic plan; performance
against plan is actively monitored at Board and departmental
levels and is supported by regular forecasts. Forecasts and
results are consolidated and presented to the Board on a
regular basis. There is now significant reporting on working
capital, and particularly cash management, supplemented by
forecasts and variance analysis. Through these mechanisms,
Sherwood’s performance is regularly monitored, risks
identified in a timely manner, their financial implications
assessed, control procedures re-evaluated, and corrective
actions agreed and implemented.
Control Procedures 
The Group and its operating units have implemented control
procedures designed to ensure complete and accurate
accounting for financial transactions and to limit the potential
exposure to loss of assets or fraud. Measures taken include
physical controls, segregation of duties, and regular reviews 
by management.
Documented procedures exist for the control, 
self-assessment, and reporting of risks. These documented
and auditable procedures are relevant across Group operations
and provide for assurances to be given at increasingly higher
levels of management and ultimately, to the Board. 
Going Concern
After reviewing current performance and plans, and making
further enquiries as considered appropriate, the Directors are
satisfied that at the time of approving the Financial
Statements adequate resources are available to the Group to
enable it to continue in business for the foreseeable future.
For this reason, the Directors believe it is appropriate to
continue to adopt the going concern basis in preparing the
financial statements.
Provisions of the Combined Code 
As stated in the introduction to this section of the Report, the
Company is required to report on compliance with the
detailed requirements of the Combined Code throughout the
year ended 31 December 2002.
Other than the provisions of the Code mentioned below, the
Company has complied with the Combined Code throughout
the year ended 31 December 2002.
Directors’ Remuneration
As is stated in the Remuneration Report , restricted share
awards have been made to certain newly recruited executives
under the rules of the LTIP, which was approved by
shareholders at last year’s Annual General Meeting. These
awards are not subject to performance conditions.
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 32 33 Remuneration Report
Remuneration Report
The remuneration policy is set by the Board and is described below. Individual
remuneration packages are determined by the Remuneration Committee within
the framework of this policy . Directors who were members of the Remuneration
Committee during the year were Robert Youngjohns, Philip Crawford, Stuart
Drew, Ken Andrew, John Sacher, and John Barton.
The information contained in this Remuneration Report is not subject to audit, except where indicated. 
The Remuneration Committee has access to independent advice where it considers appropriate and, if
the Board is informed in advance, the cost of such advice is to be reimbursed by Sherwood. This year,
none of the members of the Remuneration Committee requested access to such independent advice.
Remuneration Policy
The policy in respect of Director’s remuneration in respect of the forthcoming year is as follows:
Sherwood aims to provide remuneration packages which attract, retain, and motivate Executive
Directors. The total remuneration package for Executives comprises a bonus and share scheme awards
in addition to basic salary and car allowance. The bonus schemes for all the Executive Directors are
performance related and are targeted to provide a bonus of up to 100% of basic salary, although in
certain circumstances higher bonuses may be payable, as described below. Details of the performance
criteria relating to share scheme awards for each of the Executive Directors, and any such awards that
are not performance related, are also detailed in this report. Other employment-related benefits,
principally life insurance, private medical health insurance, and a money purchase pension plan for those
who wish to join, are provided to senior staff, including Executive Directors. Company contributions are
based upon age and length of service. 
Salaries of existing Executive Directors are determined after a review of the performance of the
individual. In the case of new recruits, the Remuneration Committee takes account of the general trend
in salaries for Executives in broadly similar sized companies within the information technology industry. 
Sherwood International Plc Annual Report and Accounts 2002
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 33 34 Remuneration Report
In order to ensure the Company’s continued ability to attract
new recruits of the highest calibre, and to retain existing
executives, the Remuneration Committee considered it
appropriate to review the basis upon which bonuses are
payable. Following this review, it has been agreed that senior
Executives who are directly responsible for revenue
generation will move to a bonus arrangement (targeted at
delivering 100% of salary) which is directly related to the
delivery of profit and revenue required in order for
Sherwood to achieve its goals. The remainder 
of the Executive team will be eligible for a bonus that is
dependent upon both the performance of the Group, 
and upon the individual contribution of each Executive (as
determined by the Remuneration Committee). If these
revenue and profit targets are exceeded, an additional
amount of bonus will be payable. The additional amount 
is linear with the level of profit achieved, for example, if 105%
of target is achieved then 105% of bonus is paid. 
All bonuses are non-pensionable.
Executive Directors’ remuneration is aligned with
shareholder interests to the extent that parts of bonuses are
driven by the overall profitability of the Group (Profit Before
Tax), and the remainder on either revenue or personal Key
Performance Indicators. Additionally, the exercise of options
under the Executive Share Schemes (1994 Executive Share
Option Scheme, Millennium Share Option Scheme and
Executive Share Option Scheme) is dependent upon the
satisfaction of earnings per share growth criteria.
Non-executive Director’s continue to receive fees which are
in line with market norms but are not eligible for pensions,
incentives, or similar payments other than out-of-pocket
expenses. Remuneration of the non-executive Directors is
decided by the Board.
Long Term Incentives
Options are offered pursuant to the rules of the Sherwood
International Executive Share Option Scheme (“Exec Plan”) 
at the mid-market price on the date of grant as approved by
shareholders at the 2001 Annual General Meeting. It is the
policy of the Remuneration Committee that annual awards
should be made pursuant to the Exec Plan. Where possible,
these awards are made immediately following 
the announcement of the Company’s year end results. 
The rules of the Exec Plan mandate that, in normal
circumstances, awards made pursuant to the Exec Plan may
not vest until three years after the date of grant. Vesting of
options is dependent upon achievement of annual growth in
modified Diluted Earnings per Share (“modified DEPS”) (which
must be at 25% or greater in order for 100% of the options
to vest) over the three year period commencing in the year
in which the option is granted. The Remuneration
Committee reserves the right to increase the modified DEPS
target by an appropriate amount if the UK Retail Price Index
shows inflation above five per cent at any time. Shareholders
will be asked to approve any alternative to the existing
performance condition.
The performance criteria for the Exec Plan were designed
after seeking advice from remuneration consultants and
looking at comparative schemes. The criteria were designed
to be appropriate for the type of company Sherwood was at
the time of implementation. Executives had previously been
incentivised by the Millennium Scheme and the Company
wished to continue to incentivise its senior Executives.
Institutional shareholders were consulted and the scheme
was amended following their comments. The Exec Plan 
was approved by a majority vote at the 2001 Annual 
General Meeting. 
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 34 35 Remuneration Report
For the purpose of the Share Option Schemes only, modified
DEPS is defined by taking profit for the financial year
attributable to shareholders, adding back the amortisation
charge for the year in respect of goodwill and other
intangible fixed assets and exceptional items, and excluding
the share scheme tax effect, before dividing by the weighted
average number of shares in issue.
A restricted share award may be made to senior employees
upon joining, and to existing staff at Sherwood’s descretion,
pursuant to the rules of the Sherwood International Plc Long
Term Incentive Plan (“LTIP”) which were approved by
shareholders at the 2001 Annual General Meeting. In
accordance with the rules of the LTIP, awards made to new
employees will normally vest three years after the award
date. There are no performance criteria attached to LTIP
awards that have been granted so far, as these awards have
been used in limited circumstances as a recruitment
incentive to new senior employees, including Executive
Directors, as compensation for any loss of rights elsewhere.
Awards were not made to Directors who held office at the
time of implementation.
All employees, including Executive Directors, are eligible to
participate in the Save As You Earn Scheme (“SAYE”) and the
All Employee Share Ownership Plan (“AESOP”) as approved 
by shareholders at the 2001 Annual General Meeting. No
awards have yet been made pursuant to AESOP . A discount is
offered under the SAYE scheme in accordance with Inland
Revenue rules.
The 1994 Scheme
The Company operates an Inland Revenue Approved
Executive Share Option Scheme (the “1994 Scheme”) and has
granted options which are exercisable after three years
provided earnings per share have increased by a percentage
of no less than the greater of the increase in the Retail Price
Index and 10% per annum, subject to a minimum starting
point for earnings per share of 2.5p per share. Options have
not been granted under this Scheme since 1995.
Millennium Share Option Scheme (“Millennium”)
In 1996, following shareholder approval at the Annual General
Meeting, the Company introduced the Millennium Share
Option Scheme (the “Scheme”). Participation in the Scheme
is at the discretion of the Remuneration Committee. The
Remuneration Committee may award options up to a
maximum of six times the participant’s remuneration.
Options are exercisable in full if the Company’s fully diluted
earnings per share calculated in accordance with FRS14
increase over a minimum three year period at a rate
equivalent to an annual compound percentage rate of no
less than 25% and no less than 20% for half of the options to
be exercisable. Before the expiry of this Scheme in May 2001
the Company made awards to certain key employees of
Concise Technologies Inc. No further awards may be made
pursuant to this scheme.
The Sherwood International Plc Executive Share
Option Plan (“Exec Plan”)
The Executive Plan was adopted by the Company following
shareholder approval at its 2001 Annual General Meeting.
Options will be granted subject to a performance condition.
The condition for the exercise of the first grant of share
Options under the Executive Plan is a measure of growth in
modified Diluted Earnings per Share ("modified DEPS") over
the three year period commencing in the year in which the
Option is granted: 100% of Options become exercisable if, at
the end of the performance period, annualised modified
DEPS growth is at 25% or greater; 50% of the Options will
become exercisable if, at the end of the performance period,
annualised modified DEPS growth is at or above 20% but less
than 25%; and 25% of the Options become exercisable if, at
the end of the performance period, annualised modified
DEPS growth is at or above 15% but less than 20%. 
Remuneration Report (continued)
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 35 36 Remuneration Report
The Sherwood International Plc Long Term
Incentive Plan (“LTIP”)
The LTIP was adopted by the Company following shareholder
approval at its 2001 Annual General Meeting. Performance
conditions will normally attach to awards, except those
awards granted on recruitment. Awards are subject to a
restricted period of not less than three years. During the
restricted period, the shares do not carry dividend or 
voting rights. In cases where a performance condition is
appropriate, the performance condition is the measurement
of the Company’s total shareholder return (“TSR”) assessed
against a peer group of comparator companies. TSR is the
return shareholders would receive if they had a notional
number of shares, and received dividends on those shares
over a period of time. It measures percentage growth in the
Company’s share price (against a comparator group of
companies) together with the value of any dividends paid by
re-investing the dividends into the Company’s shares.
Where performance conditions attach, the comparator
group against which Sherwood’s performance will be
measured initially comprises of the following companies: 
AIT Group plc, Diagonal plc, Guardian IT plc, Kewill Systems plc,
London Bridge Software Holdings plc, MMT plc, Morse plc,
NSB Retail Systems plc, Protagona Plc, Royal Blue Group plc,
Sema Limited, and Capita Group plc. Sherwood’s TSR
performance will be measured over the three year restricted
period and awards will vest under the LTIP plan in the
following manner: 100% of the award will vest where TSR
performance of the Company is at or above the upper
quartile in relation to the comparator group; 50% of the
award will vest and the remainder lapse where the TSR
performance of the Company is at or above the median
position, but below the upper quartile position in relation to
the comparator group. All of the award will lapse where the
Sherwood’s TSR performance is below median in relation to
the comparator group. The TSR performance condition will
be tested once at the end of the restricted period. There 
is no re-testing at a later date if the condition has 
not been satisfied.
Sherwood International Deferred Bonus 
Scheme (“DBS”)
In 1998, following shareholder approval at the Annual General
Meeting, the Company introduced the Sherwood
International Deferred Bonus Scheme (the “DBS Scheme”).
The DBS Scheme is available to Executive Directors and senior
employees. In previous years the Company has invited
certain employees to elect to use a percentage of their
annual bonus to acquire shares. This scheme was not offered
to Executives/senior employees in 2002. The shares that are
acquired during the first year of participation in 
the DBS Scheme must be held on trust for a minimum period
of three  years. In subsequent years, the minimum period is
two years. At the end of the minimum period, if the
participant is still an employee, the Company will match the
shares on a one-for-one basis.
Sherwood Recruitment Incentive Plan (“RIP”)
In November 2000, the Board adopted the Sherwood
Recruitment Incentive Plan (the “RIP”). The RIP is
administered by Ogier Trustee Limited and awards are
satisfied by shares purchased from the market and held 
on trust for a restricted period. Awards may be made subject
to the achievement of if the performance criteria; at the 
end of the restricted period (and subject to meeting
performance criteria where appropriate), shares are
transferred to participants.
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 36 37 Remuneration Report
Sherwood Employee Share Plan (“ESP”)
In 1998, following shareholder approval at the Annual General
Meeting, the Company introduced the Sherwood Employee
Share Plan (the “Plan”). The Plan is available to every
employee (excluding Executive Directors and participants in
the Millennium Share Option Scheme) and was established in
order to recruit and retain employees in an increasingly
competitive recruitment market.
Savings Related Share Option Scheme (“SAYE”)
The Company operates an Inland Revenue Approved Savings
Related Share Option Scheme which is available to all
employees who are employed at the date of invitation.
Options were last granted under the Savings Related Share
Option Scheme in June 1999.
Sherwood International Plc all Employee Share
Ownership Plan (“AESOP”)
This Plan was also adopted by the Company following
shareholder approval at its 2001 Annual General Meeting.
However, to date, no awards have been made pursuant to
this Plan. The AESOP is constituted by a Trust Deed and Rules
and will be administered by a body of Trustees resident in the
UK The AESOP provides for several different ways of awarding
shares: (i) Free Shares to a maximum value of £3,000; (ii)
Partnership Shares which are purchased by participants by
way of deductions from salary of up to £125 per month; (iii)
Matching Shares which may be awarded to participants who
save for Partnership Shares subject to a ratio of two
Matching Shares for every Partnership Share; and (iv)
Dividend Shares which are acquired by re-investing the
dividends earned by the shares in the AESOP in additional
shares up to a maximum of £1,500 per annum. 
Birza Limited 2001 Share Option Plan (“BIRZA”)
The Birza Plan was adopted by the Company following
shareholder approval at its 2001 Annual General Meeting.
However, following the decision not to continue the
operations of e2-one, no awards have been or will be made
pursuant to this scheme.
Service Contracts
It is the Company’s policy that contracts for the employment
or for the services of Directors provide for periods of notice
or termination of twelve months or less. All Directors’
contracts now comply with this policy. The Remuneration
Committee has considered the payment of compensation in
the event of early termination of Directors’ contracts of
service, and the general policy regarding compensation for
loss of office. In relation to existing contracts of service, the
Remuneration Committee has resolved that it is not
appropriate to deal expressly with payments arising on loss of
office in such contracts of service, with the exception of the
Chief Executive, Mike Shinya. Mike’s contract provides that,
should the Company terminate his employment without
cause, Sherwood will make a payment in lieu of any applicable
remaining period of notice of an amount in cash (calculated
pro rata) equivalent to his basic salary and pension allowance,
car allowance, P11D benefits, and bonus payment, which 
would have been paid for the year of termination if actual
performance up to the date of termination were to continue
for the remaining unexpired period, calculated pro rata, and a
further sum representing bonus for 100% on target
performance, which under the present bonus scheme is an
amount equal to his annual salary as at the date of
termination. During the year, Richard Brooman was paid
compensation for loss of office. The amount was determined,
following negotiation, based on his notice period and salary
and other entitlements.
Remuneration Report (continued)
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 37 38 Remuneration Report
Total Shareholder Return
The following graph charts the total
cumulative shareholder return since
January 1997; the comparative index
selected was the Techmark – FTSE 
All Share as it was considered to 
be appropriate for the size of the
Company and the industry sector.
Date of Contract Unexpired term Notice period
M. S. Shinya 20 September 2001 - 12 months
M. P. Williams 7 January 2002 - 12 months
B. P. Quinn 7 May 1985 - 12 months
M. Lambert 3 January 2002 - 6 months
G. K. Twaddle 1 March 1995 - 3 months
K. Andrew 1 December 1997 Until December 2003 3 months
P. Crawford 5 August 2002 Until April 2005 1 month
S. Drew 5 August 2002 Until April 2005 1 month
R. Youngjohns 12 August 2002 Until April 2005 1 month
Sherwood versus Techmark
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
Dec 02
Oct 02
Jul 02
Apr 02
Jan 02
Oct 01
Jul 01
Apr 01
Jan 01
Oct 00
Apr 00
Jan 00
Oct 99
Jul 99
Apr 99
Jan 99
Oct 98
Jul 98
Apr 98
Jan 98
Sherwood
Techmark
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 38 39 Remuneration Report
Details of Individual Emoluments and Compensation (this section has been subject to audit)
The emoluments in respect of qualifying services and compensation of each person who served as a Director during the 
year was as follows:
£ Compensation £ Compensation
2002 for loss 2001 for loss
Salary Benefits Bonus of Office Total Pension Salary Benefits Bonus of Office Total Pension
Executive
M.S. Shinya 300,000 13,452 144,150 – 457,602 36,900 86,538 3,635 87,500 – 177,673 –
M.P . Williams 188,051 29,605 78,632 – 296,288 12,925 –– – – –
B.P . Quinn 150,000 13,698 96,100 – 259,798 37,262 115,629 72,519 –– 188,148 28,906
M.J Lambert 129,667 12,365 37,519 – 179,551 12,080 –– – – – –
G.K. Twaddle 48,500 4,500 8,284 – 61,284 10,068 63,851 6,384 –– 70,235 11,954
R.J. Brooman
(Resigned 7 January 2002) 50,000 39,638 – 112,569 202,207 14,264 147,500 14,537 –– 162,037 14,004
S.G. Bellamy
(Resigned 1 August 2001) –– – – – – 87,500 16,392 –– 103,892 11,000
G.B. Matthews
(Retired 30 September 2001) –– – – – – 175,001 16,748 –– 191,749 42,135
N. Schapert
(Resigned 19 January 2001) –– – – – – 10,209 – 100,418 110,627 –
Independent non-executive
K. Andrew 100,000 –– – 100,000 – 60,000 –– – 60,000 –
J. Barton
(resigned 5 August 2002) 13,333 –– – 13,333 – 19,670 –– – 19,670 –
J. Sacher
(resigned 5 August 2002) 23,336 –– – 23,336 – 20,000 –– – 20,000 –
S. Drew 16,665 –– – 16,665 – –– – – – –. 
R. Youngjohns 12,888 –– – 12,888 – –– – – – –
P . Crawford 18,145 –– – 18,145 – –– – – – –
1,050,585 113,258 364,685 112,569 1,641,097 123,499 785,898 130,215 87,500 100,418 1,104,031 107,999
Remuneration Report (continued)
The pension figures shown above are the Group’s contributions
to the defined contribution pension scheme in respect of the
Directors. For the year ended 31 December 2002 Executives who
were employed throughout the year participated in a
performance-related bonus scheme which was designed to
deliver a bonus related to basic salary and linked to 
business achievement.
On joining the Company, Mike Shinya received an LTIP award to
the value of 100% of his  base salary . He was also granted options
to the value of 200% of his base salary in accordance with the
rules of the Exec Plan and a further award of an equivalent value
was made in March 2002. The vesting of the options under the
Exec Plan is dependent upon the achievement of annualised
growth in modified Diluted Earnings per Share. At the discretion
of the Remuneration Committee, a further award of an
equivalent value will be made to Mike Shinya pursuant to the
rules of the Exec Plan on 31 March 2003. Mike also received a
contractually committed bonus of £87,500 in February 2002
(equivalent to 100% of his salary pro-rata to the period during
which he was employed in 2001), which was accrued for in 2001.
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 39 40 Remuneration Report
Directors’ Interests in Share Capital 
The interests of Directors who held office at the end of the financial year were:
At
1 January 2002 
or date of 
At appointment
31 December 2002 If later,
Ordinary Shares Ordinary Shares
Ken Andrew 47,565 47,565
Mike Shinya 70,000 40,000
Barney Quinn 140,276 130,276
Graham Twaddle 583,068 573,068
Martyn Lambert 18,209 –
Mark Williams 20,000 –
Philip Crawford ––
Stuart Drew ––
Robert Youngjohns ––
There have been no movements in any of the Directors’ interests in the share capital of the Company between 1 January
2003 and 3 March 2003.
Benefits receivable consist primarily of car allowance, life
insurance, private medical health insurance, fuel allowance,
and Permanent Health Insurance.
George Matthews retired as CEO on 30 September 2001 
and was thereafter employed as a consultant by Sherwood
on a salary of £60,000 plus £1,783 in benefits. His period of
consultancy expired in April 2002. 
A commitment was also made to Mark Williams on joining
pursuant to which he received a restricted share award over
76,000 shares in the Company under the terms of the LTIP
together with a grant of options to the value of 150% of 
his base salary in accordance with the rules of the Exec Plan.
The vesting of these options will be dependent upon the
achievement of annualised growth in modified Diluted
Earnings per Share.
A further commitment was made to Martyn Lambert on
joining pursuant to which he received a restricted share
award over 48,000 shares in the Company under the terms
of the LTIP together with a grant of options to the value of
140% of his base salary in accordance with the rules of the
Exec Plan. The vesting of these options will be dependent
upon the achievement of annualised growth in modified
Diluted Earnings per Share.
During the year a grant of options to the value of 200% of his
base salary was made to Barney Quinn in accordance with the
rules of the Exec Plan.  The vesting of these options will be
dependant upon the achievement of annualised growth in
modified Diluted Earnings per share. Barney Quinn and
Graham Twaddle have previously been granted options
under the 1994 and Millenium share schemes.  The vesting of
these options will be dependent upon the achievement of
performance criteria relating to growth in earnings per
share, as set out above. Graham Twaddle also has options
under the SAYE share scheme which are not subject to
performance criteria. 
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 40 41 Remuneration Report
Directors’ Interests in Share Options (this section has been subject to audit)
Options over Options over
OrdinaryAwarded Lapsed Ordinary Option Period
Directors’ share options Scheme 2.5p Shares in year in year 2.5p Shares Price Exerciseable
B. P. Quinn 1994 40,000 –– 40,000 £0.295 1998-2005
Exec Plan – 256,997 – 256,997 £1.325 2005-2012
SAYE 527 – (527) – ––
Millennium 60,000 –– 60,000 £3.65 2004-2008
Millennium 10,000 –– 10,000 £9.20 2003–2007
Millennium 30,000 –– 30,000 £4.875 2002–2006
M. S. Shinya Exec Plan – 513,994 – 513,994 £1.325 2005-2012
Exec Plan 685,714 –– 685,714 £0.875 2004-2011
LTIP 342,857 –– 342,857 £0.00 2004
G. K. Twaddle SAYE 4,598 –– 4,598 £3.670 2004
Millennium 60,000 –– 60,000 £3.65 2004-2008
Millennium 10,000 –– 10,000 £9.20 2003-2007
Millennium 30,000 –– 30,000 £4.875 2002-2006
M. Lambert (appointed 3 January 2002) Exec Plan – 155,911 – 155,911 £1.325 2005-2012
LTIP – 48,000 – 48,000 £0.00 2005
M. Williams (appointed 7 January 2002) Exec Plan – 244,147 – 244,147 £1.325 2005-2012
LTIP – 76,000 – 76,000 £0.00 2005
S. Bellamy (see below) 1994 40,000 –– 40,000 £0.295 1998-2005
R. Brooman (resigned 7 January 2002) Millennium 60,000 – (60,000) – ––
Millennium 27,174 – (27,174) – ––
No share options were exercised by any of the Directors during the year
Remuneration Report (continued)
At 1 January  
2002 or date of At 
appointment 31 December 
if later 2002
Details of the performance criteria are given above.
The share price at 31 December 2002 was 80p and during 2002
it moved between 37.5p and 152.5p.
Steve Bellamy’s employment with Sherwood terminated in
June 2002. He has twelve months after this time in which to
exercise his options pursuant to the 1994 scheme.
By order of the Board
Angela P . Randolph – Company Secretary
3 March 2003
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 41 42 Consolidated Profit and Loss account
Sherwood International Plc Annual Report and Accounts 2002
Consolidated Profit and Loss account
For the year ended 31 December 2002
2002 2002 2001 2001 
Pre-exceptional Exceptional Pre-exceptional Exceptional 
continuing items 2002 continuing items 2001
operations (note 3) Total operations (note 3) Total
Note £'000 £'000 £'000 £'000 £'000 £'000
Group Turnover 2 52,231 – 52,231 56,513 – 56,513 
Operating charges (22,984) (858) (23,842) (24,183) (5,376) (29,559)
Staff costs 6 (22,675) (3,603) (26,278) (29,094) (314) (29,408)
Earnings/(loss) before interest, tax, 
depreciation and amortisation (“EBITDA”) 6,572 (4,461) 2,111 3,236 (5,690) (2,454)
Amortisation of goodwill and other intangible assets 11 (952) – (952) (1,868) (5,145) (7,013)
Depreciation and other amounts written off
tangible fixed assets 12 (1,034) (160) (1,194) (1,125) – (1,125)
Group operating profit/(loss) 4,586 (4,621) (35) 243 (10,835) (10,592)
Share of operating loss in associate
(including goodwill amortisation) 13 – – – (256) (671) (927)
Profit/(loss) before interest 4,586 (4,621) (35) (13) (11,506) (11,519)
Interest receivable and similar income 133 527
Interest payable and similar charges 7 (4) (20)
Profit/(loss) on ordinary activities before taxation 4 94 (11,012)
Tax credit/(charge) on profit/(loss) on ordinary activities 8 36 (282)
Profit/(loss) on ordinary activities after taxation 130 (11,294)
Equity dividends paid and proposed 9 (453) (384)
Retained loss for the financial year 19,20 (323) (11,678)
Basic earnings/(loss) per share 10 0.3p (25.6)p
Basic earnings per share (excluding exceptional items,
share scheme tax effect and amortisation) 10 12.6p 3.8p
Diluted earnings/(loss) per share 10 0.3p (25.6)p
Diluted earnings per share (excluding exceptional
items, share scheme tax effect and amortisation) 10 11.9p 3.8p
A note on historic cost profits and losses has not been prepared as part of these financial statements as the results as disclosed in the profit and loss
account are prepared on an unmodified historical cost basis.
The current and previous periods’ results all arise from continuing operations.
Consolidated Statement of Total Recognised Gains and Losses
For the year ended 31 December 2002
2002 2001
£'000 £'000
Profit/(loss) on ordinary activities after taxation 130 (11,294)
Exchange difference on retranslation of net assets of subidiary undertakings (681) (280)
Total recognised losses for the financial year for the Group (551) (11,574)
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 42 Consolidated and Company Balance Sheet 43
Consolidated and Company Balance Sheet
As at 31 December 2002
2002 2001 2002 2001
Group Group Company Company
Note £'000 £'000 £'000 £'000
Fixed assets
Intangible 11 15,255 16,661 – –
Tangible 12 1,381 2,495 – –
Investments 13 913 741 15,314 15,573 
Total fixed assets 17,549 19,897 15,314 15,573
Current assets
Debtors: amounts receivable within one year 14 16,071 21,444 35,758 32,902 
Debtors: amounts receivable after more than one year 14 2,834 4,685 126 126 
18,905 26,129 35,884 33,028 
Cash at bank and in hand 11,405 6,019 – 2
30,310 32,148 35,884 33,030
Creditors: amounts falling due within one year 15 (12,848) (14,809) (652) (297)
Net current assets 17,462 17,339 35,232 32,733
Total assets less current liabilities 35,011 37,236 50,546 48,306
Provision for liabilities and charges 16 (885) (475) – –
Net assets 34,126 36,761 50,546 48,306
Capital and reserves
Called up share capital 18 1,158 1,129 1,158 1,129
Share premium account 19 39,724 38,484 39,724 38,484 
Revaluation reserve 19 – – 2,951 2,951
Merger reserve 19 2,597 2,597 3,941 3,941 
Shares to be issued reserve 19 – 1,193 – 1,193
Profit and loss account 19 (9,353) (6,642) 2,772 608
Equity shareholders' funds 20 34,126 36,761 50,546 48,306
These financial statements were approved by the Board of Directors on 3 March 2003, and were signed on its behalf by:
Mike Shinya Mark Williams
Chief Executive Officer Chief Financial Officer
The notes on pages 45 to 64 form part of these financial statements.
Sherwood International Plc Annual Report and Accounts 2002
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 43 44 Consolidated Cash Flow Statement
Consolidated Cash Flow Statement
For the year ended 31 December 2002
2002 2001
Notes £'000 £'000
Reconciliation of operating loss to net cash inflow/(outflow) from operating activities
Operating loss (35) (10,592)
Depreciation and other amounts written off tangible and intangible fixed assets 11,12 2,146 8,138 
Loss on disposal of fixed assets 124 –
Provision for liabilities and charges 410 322
Reversal of (credit)/charge in relation to share related awards (270) 534 
Decrease/(increase) in debtors 7,224 (3,396)
(Decrease)/increase in creditors (3,512) 2,359 
Net cash inflow/(outflow) from operating activities 6,087 (2,635)
Cash flow statement
Net cash inflow/(outflow) from operating activities 6,087 (2,635)
Returns on investments and servicing of finance 21 129 507 
Taxation 221 (1,279)
Capital expenditure and financial investment 21 (956) (1,264)
Acquisitions and disposals 21 – (6,746)
5,481 (11,417)
Equity dividends paid – (1,048)
Cash inflow/(outflow) before use of liquid resources and financing 5,481 (12,465)
Management of liquid resources 21 (604) 1,463
Financing 21 76 (10)
Increase/(decrease) in cash in the year 4,953 (11,012)
Reconciliation of Net Cash Flow to Movement in Net Funds
2002 2001
Notes £'000 £'000
Increase/(decrease) in cash in the year 4,953 (11,012)
Cash inflow/(outflow) from increase in liquid resources 604 (1,463)
Cash outflow from debt and lease finance – 65
Change in net funds resulting from cashflows 5,557 (12,410)
Foreign exchange difference (171) (112)
Movement in net funds in the year 5,386 (12,522)
Net funds at 1 January 22 6,019 18,541
Net funds at 31 December 22 11,405 6,019
Included in cashflows from operating activities are (receipts)/payments relating to exceptional items:
2002 2001
Notes £'000 £'000
Settlement of court judgement and associated costs (1,293) 3,385
Redundancy and other staff related costs 4,309 314
Property related costs 749 –
Aborted acquisition costs – 783
3,765 4,482
Sherwood International Plc Annual Report and Accounts 2002
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 44 Notes to the Financial Statements 45
Notes to the Financial Statements
Period of Basis of
Subsidiary undertaking amortisation amortisation
Sherwood International Inc. 20 years Straight Line
Sherwood International Group LLC 20 years Straight Line
Sherwood Outsourcing Limited 5 years Matched against profits
Sherwood International Promark Limited 20 years Straight Line
Sherwood International Incorporated 20 years Straight Line
Negative goodwill arising on consolidation in respect of acquisitions
subsequent to 1 January 1999 is included within fixed assets and
released to the profit and loss account in the periods in which the
fair values of the non-monetary assets purchased on the same
acquisition are recovered, whether through depreciation or sale.
1. Accounting Policies
(a) Basis of Preparation
The financial statements have been prepared under the
historical cost convention, except for the revaluation of
investments in the Company balance sheet, and in accordance
with applicable accounting standards. 
The following principal accounting policies have been applied
consistently, except as noted below, in dealing with items 
which are considered material in relation to the Group’s
financial statements.
Two new accounting standards have become effective during
the year. The Group has adopted FRS19: ‘Deferred Tax’, which
has not had any significant impact on the results or net assets
of the Group and has followed the transitional arrangements
of FRS17: ‘Retirement Benefits’ in these financial statements.
(b) Basis of Consolidation
The consolidated financial statements include the financial
statements of the Company and its subsidiary undertakings
made up to 31 December 2002.
The acquisition method of accounting has been adopted.
Under this method, the results of subsidiary undertakings
acquired or disposed of in the year are included in the
consolidated profit and loss account from the date 
of acquisition or up to the date of disposal.
An associate is an undertaking in which the Group has long
term interest, usually from 20% to 50% of the equity voting
rights, and over which it exercises significant influence. The
Group’s share of the profits less losses of associates is included
in the consolidated profit and loss account and its interest in
their net assets is included in investments in the consolidated
balance sheet.
(c) Intangible Fixed Assets
Purchased software rights: amortised in equal annual
installments over their estimated useful life, twenty years.
Goodwill: purchased goodwill (both positive and negative,
representing the excess of the fair value of the consideration
and associated costs given over the fair value of the
identifiable net assets acquired) arising on consolidation in
respect of acquisitions before 1 January 1999, when FRS10:
‘Goodwill and Intangible Assets’ was adopted, was written off
to reserves in the year of acquisition. When a subsequent
disposal occurs, any related goodwill previously charged
directly to reserves is included in determining the profit or loss
on disposal.
Purchased goodwill (representing the excess of the fair value
of the consideration and associated costs given over the 
fair value of the identifiable net assets acquired) arising on
consolidation in respect of acquisitions since 1 January 1999 
is capitalised. Positive goodwill is amortised to £nil by annual
installments over its estimated useful life, as noted below.
The Directors consider each acquisition separately for 
the purpose of determining the amortisation method and
period of any goodwill that arises.
Sherwood International Plc Annual Report and Accounts 2002
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 45 46 Notes to the Financial Statements
Sherwood International Plc Annual Report and Accounts 2002
Notes to the Financial Statements
(d) Tangible Fixed Assets
Fixed assets are stated at cost less accumulated depreciation.
Depreciation is provided from the month of acquisition on 
a straight-line basis so as to write-down the assets to their
estimated residual values over their expected useful lives over
the following periods:
Leasehold improvements 7 years 
(or length of lease if shorter)
Equipment and vehicles 4 years
(e) Investments in Subsidiary Undertakings
Investments are stated at cost or valuation less provision for
any impairment in value.
(f) Turnover
Turnover represents the amounts earned on work done and
services rendered, excluding value added tax and intra-group
sales, in the ordinary course of business. The amount by which
recorded turnover is in excess of amounts invoiced 
is included in debtors as accrued income and any amounts
invoiced in excess of recorded turnover are included 
in creditors.
With effect from 1 January 2002 software licence fees are
recognised as revenue once the software is complete and
available to the customer, the Group has no further significant
obligations with regard to the software, a binding contract has
been signed, all payments are receivable within twelve months
and payment is considered probable. In previous periods, 
due to the manner in which business was conducted at that
time, software licence fees were recognised 80% (licence fees
of less than £100,000, 100%) on commitment and 20% 
on acceptance.
Implementation services are normally provided on a time and
materials basis, in which case revenue is recognised as earned
over the period of the contract. 
Revenue in respect of software maintenance fees is
recognised on a straight-line basis over the period of the
maintenance agreement.
For sales arrangements that include multiple components
which are not considered separable licences or services, or
where the Group retains further significant obligations in
respect of the licenced software, or where the Group enters
into a fixed price contract for implementation services, the
total contracted revenue (including licence fees) is recognised
on a percentage completion basis and no profit is recognised
until the outcome can be foreseen with reasonable certainty.
This assessment is made on a contract by contract basis. Any
estimated future losses on contracts are recognised in full at
the time they are anticipated
The Directors believe that the changes made to the basis on
which licence fees are now dealt with more accurately reflect
the nature of the Group's business, following the changes in
its business practices, referred to in the Finance Review on
page 13 and have not had a material effect on the results for
the year.
(g) Research and Development
Research and development expenditure is written off in 
the year in which it is incurred, except to the extent that it 
is recoverable under client contracts.
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 46 Notes to the Financial Statements 47
Notes to the Financial Statements
(h) Deferred Taxation
The Group adopted FRS19: ‘Deferred Tax’ during the year.
Deferred tax is recognised in respect of all timing differences
that have originated but not reversed at the balance sheet date
where transactions or events that result in an obligation to pay
more tax in future or a right to pay less tax in future have
occurred at the balance sheet date. A net deferred tax asset is
regarded as recoverable and therefore recognised only when,
on the basis of all available evidence, it can be regarded as more
likely than not that there will be suitable taxable profits from
which the future reversal of the underlying timing differences
can be deducted.
(i) Leasing and Hire Purchase Commitments
Assets acquired under hire purchase and finance lease contracts
are capitalised in the balance sheet and are depreciated over the
shorter of their estimated useful lives or lease term.
The interest element of the rental obligation is charged to 
the profit and loss account so as to produce an estimated
constant periodic rate of charge on the remaining balance 
of the obligation for each accounting period.
Rentals paid under operating lease contracts are charged to the
profit and loss account evenly over the primary period of 
the contract.
(j) Pensions
The regular cost of providing benefits under defined benefit
schemes is charged to operating profit over the expected
remaining service lives of the members of the scheme so as 
to achieve a constant percentage of pensionable pay. Variations
from the regular cost arising from periodic actuarial variations of
the principal defined benefit schemes are allocated to operating
profit over the expected remaining service lives of 
the members.
The cost of providing benefits under defined contribution
schemes is charged as it becomes payable.
(k) Foreign Currency
Transactions in foreign currencies are recorded using the 
rate of exchange ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies are
translated using the rate of exchange ruling at the balance sheet
date. The gains or losses on translation are recorded in the profit
and loss account.
The assets and liabilities of overseas subsidiary undertakings are
translated at the closing exchange rates. Profit and loss
accounts of such undertakings are consolidated at the average
rates of exchange during the year. Gains and losses arising on
these translations are taken to reserves.
(l) Employee Share Schemes
The cost of awards to employees that take the form of shares or
rights to shares are recognised over the period of the
employee's related performance in accordance with UITF
Abstract 17: ‘Employee Share Schemes’. 
Interests in own shares held by the Employee Benefit Trust 
are disclosed as a fixed asset investment at cost less permanent
impairment in value in accordance with UITF Abstract 13:
‘Accounting for ESOP Trusts’.
(m) Cash and Liquid Resources
Cash, for the purpose of the cash flow statement, comprises
cash in hand and deposits repayable on demand. Liquid
resources are short term investments which are disposable
without curtailing or disrupting the business and are either
readily convertible into known amounts of cash at or close 
to their carrying value.
Sherwood International Plc Annual Report and Accounts 2002
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 47 48 Notes to the Financial Statements
Notes to the Financial Statements
2. Segmental Analysis
All of the Group’s activities arose from the provision of technological solutions and from continuing operations.
(a) Geographical Analysis by Destination
2002 2001
Group Group
Group Turnover: £'000 £’000
UK 32,089 32,149
Continental Europe 3,192 3,241
North America 15,828 20,232
Rest of World 1,122 891
52,231 56,513
(b) Geographical Analysis by Country of Origin
Group Turnover:
UK 38,553 39,262
North America 13,678 17,251
52,231 56,513 
Operating Profit/(Loss): before Interest and Tax:
UK 320 (6,697)
North America (355) (3,895)
Rest of the world – (927)
(35) (11,519)
Net Assets:
UK 34,533 30,652
North America (407) 6,109
34,126 36,761
Sherwood International Plc Annual Report and Accounts 2002
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 48 Notes to the Financial Statements 49
Notes to the Financial Statements
3. Exceptional Items
2002 2001
£’000 £’000
Settlement of court judgement and associated costs (a) (2,008) 4,100
Property related costs (b) 1,685 401
Redundancy and other staff related costs (c) 4,944 314
Aborted acquisiton fees – 875
Impairment on goodwill in an associate – 671
Impairment on goodwill in subsidiary – 5,145
4,621 11,506
(a) In July 2002 the Group reached a negotiated settlement with several parties which resulted in a £2,008,000 payment to the Company. This has been
treated as an exceptional credit in the 2002 financial statements. Settlement of the original court judgement comprising the damages awarded, legal
costs and interest was treated as an exceptional charge in the 2001 financial statements.
(b) The charge in 2002 covers rental and dilapidation payments and other costs relating to the consolidation of the Group's offices in the UK and US
carried out as part of the restructuring programme in the first half of the year and the move to the new Corporate International HQ in Chertsey at
the end of the year.  Included in these figures are excess property provisions of £1,067,000 (2001: £401,000).
(c) The charge in 2002 reflects the reduction in force actioned in the first half of the year and also redundancy, recruitment and other personnel related
costs brought about by the move to the new Corporate International HQ in Chertsey.
The exceptional items have no effect on the tax charge for 2002 (2001: £nil).
4. Profit/(Loss) on Ordinary Activities before Taxation
2002 2001
£’000 £’000
This is stated after charging/(crediting):
Auditors’ remuneration
• audit 207 212
• other fees paid to the auditors and their associates 20 382
Rentals under operating leases
• equipment 221 194
• other 1,658 1,691
Depreciation of tangible fixed assets
• owned 1,194 1,121
• held under finance leases – 4
Amortisation and other amounts written off intangible fixed assets 952 7,013
Provision against investments 524 297
Foreign exchange gains 133 301
Research and development 4,863 4,990
The auditors’ remuneration for the 2002 audit of the Company is £25,000 (2001: £25,000). Fees for other services provided by the auditors which were
capitalised totalled £nil (2001: £25,629). 
Sherwood International Plc Annual Report and Accounts 2002
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Notes to the Financial Statements
Sherwood International Plc Annual Report and Accounts 2002
5. Directors’ Remuneration
2002 2001
£’000 £’000
Emoluments 1,528 1,004
Pension scheme contributions 123 108
Compensation for loss of office 113 100
1,764 1,212
Details of Directors’ emoluments, pension contributions and interests in share options are disclosed on pages 39 to 41
The highest paid Director during the year received emoluments of £457,602 and pension contributions of £36,900 (2001: £191,749 and £42,135 respectively).
6. Employees
2002 2002 2001 2001
Pre-exceptional Exceptional 2002 Pre-exceptional Exceptional 2001
Items Items Total Items Items Total
£'000 £'000 £'000 £'000 £'000 £’000
Salaries 20,135 _20,135 25,758 –  25,758
Social security costs 1,576 – 1,576 2,403 –  2,403
Pension costs (note 25) 964 – 964 933 –  933
Redundancy costs – 3,603 3,603 – 314 314 
22,675 3,603 26,278 29,094 314 29,408
Number Number
The average number of employees including Directors during the year was: 416 500
7. Interest Payable and Similar Charges
2002 2001
£’000 £’000
Interest payable 4 20
4 20
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Notes to the Financial Statements
8. Taxation on Profit/(Loss) on Ordinary Activities
2002 2001
£’000 £’000
Based on the profit/(loss) for the year:
UK Corporation tax at 30% (2001: 30%) 328 –
Overseas taxation 84 112
Corporation tax (over)/under provided in previous years (448) 170
(36) 282 
The current tax (credit)/charge for the period is lower than the standard rate of corporation tax in the UK, 30%. (2001 30%). The differences are
explained below:
2002 2001
£’000 £’000
Profit/(loss) on ordinary activities before tax: 94 (11,012)
Tax calculated at current rate of 30% (2001: 30%) 28 (3,304
Effects of :
Expenses not deductible for tax purposes 26 2,428 
Capital allowances for period in excess of depreciation (144) (378)
Utilisation of tax losses 418 1,254
Higher tax rates on overseas earnings 84 112
Adjustments to tax charge in respect of previous periods (448) 170 
Total current tax (credit)/charge (see above): (36) 282
9. Dividends
2002 2001
£’000 £’000
Ordinary Shares of 2.5p each:
• Interim paid of 0.00p per share (2001: 0.85p) – 384
• Final proposed of 1.00p per share (2001: 0.00p) 453 –
Total dividend 1.00p (2001: 0.85p) 453 384
Dividends amounting to £10,727 (2001: £1,423) in respect of the Company’s shares held by the Employee Benefit Trust have been deducted in arriving
at the aggregate of dividends proposed.
Sherwood International Plc Annual Report and Accounts 2002
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Notes to the Financial Statements
10. Earnings/(Loss) per Share
2002 2001
Earnings Earnings
£’000 £’000
Profit/(loss) for the financial year attributable to shareholders 130 (11,294)
Amortisation of goodwill and other intangible assets (excluding exceptional amounts) 952 1,868
Exceptional items 4,621 11,506
Share scheme tax effect (54) (405)
Profit before share scheme tax effect, amortisation, and exceptional items 5,649 1,675
2002 2001
Shares Shares
£000’s £000’s
Weighted average number of shares in issue 45,037 44,164
Dilutive effect of share options 2,685 –
Diluted weighted average number of shares 47,722 44,164
The weighted average number of shares in issue excludes those held in the Employee Benefit Trust, which are treated as cancelled.
Under the principles of FRS14: ‘Earnings Per Share’ there was no dilutive effect in 2001 due to the basic loss per share.
2002 2002 2001 2001
EPS DEPS EPS DEPS
pence pence pence pence
Basic Earnings/Diluted Earnings per Ordinary Share ("EPS"/"DEPS") 0.3 0.3 (25.6) (25.6)
EPS/DEPS on amortisation 2.1 2.0 4.2 4.2
EPS/DEPS on exceptional items 10.3 9.7 26.1 26.1
EPS/DEPS on share scheme tax effect (0.1) (0.1) (0.9) (0.9)
EPS/DEPS before share scheme tax effect, amortisation, and exceptional items 12.6 11.9 3.8 3.8
Basic and diluted earnings/(loss) per ordinary share are based on the profit/(loss) for the year attributable to shareholders. Basic earnings/(loss) per
Ordinary Share before exceptional items, amortisation and the share scheme tax effect is based on the weighted average number of shares in issue and
has been provided in order that the effects of exceptional items, the amortisation of goodwill and other intangiable assets and the share scheme tax
effect on reported earnings can be fully understood.
Sherwood International Plc Annual Report and Accounts 2002
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Notes to the Financial Statements
11. Intangible Fixed Assets
Software
rights Goodwill Total
£’000 £’000 £’000
Group
Cost:
At 1 January 2002 7,814 17,810 25,624
Disposals – (7,177) (7,177)
Exchange differences – (525) (525)
At 31 December 2002 7,814 10,108 17,922
Amortisation:
At 1 January 2001 751 8,212 8,963
Charge for the year 376 576 952
Disposals – (7,177) (7,177)
Exchange differences – (71) (71)
At 31 December 2002 1,127 1,540 2,667
Net Book Value:
At 31 December 2002 6,687 8,568 15,255
At 31 December 2001 7,063 9,598 16,661
During the year Mattodia Associates Inc. was dissolved. 
The Company has no intangible fixed assets.
12. Tangible Fixed Assets Short leasehold 
property and Equipment
improvements and vehicles Total
£’000 £’000 £’000
Group
Cost:
At 1 January 2002 919 6,112 7,031
Additions 27 233 260
Disposals (304) (66) (370)
Exchanges differences (14) (185) (199)
At 31 December 2002 628 6,094 6,722
Depreciation:
At 1 January 2002 506 4,030 4,536 
Charge for the year 202 992 1,194 
Disposals (194) (52) (246)
Exchanges differences (5) (138) (143)
At 31 December 2002 509 4,832 5,341 
Net book value:
At 31 December 2002 119 1,262 1,381 
At 31 December 2001 413 2,082 2,495 
There were no assets held under finance leases or similar hire purchase contracts at 31 December 2002 (2001: £nil).
The Company has no tangible fixed assets.
Sherwood International Plc Annual Report and Accounts 2002
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Notes to the Financial Statements
13. Investments
Shares Loans to 
in Group Group Shares Own Company
undertakings undertakings in associate shares total
£’000 £’000 £’000 £’000 £’000
Company
Cost or valuation:
At 1 January 2002 10,677 11,870 1,304 1,038 24,889
Additions –– – 696 696
Disposals – (7,173) (1,304) – (8,477)
Exchange differences – (431) –– (431)
At 31 December 2002 10,677 4,266 – 1,734 16,677
Provisions:
At 1 January 2002 542 7,173 1,304 297 9,316
Charge for the year –– – 524 524
Disposals – (7,173) (1,304) – (8,477)
At 31 December 2002 542 –– 821 1,363
Net book value:
At 31 December 2002 10,135 4,266 – 913 15,314
At 31 December 2001 10,135 4,697 – 741 15,573
Investment Own Group
in associate shares total
£’000 £’000 £’000
Group
Cost or valuation:
At 1 January 2002 (153) 1,038 885
Additions – 696 696
Disposal 153 – 153
At 31 December 2002 – 1,734 1,734
Provisions:
At 1 January 2002 – 297 297
Charge for the year – 524 524
At 31 December 2002 – 821 821
Goodwill:
At 1 January 2002 153 – 153 
Disposals (153) – (153)
At 31 December 2002 –– –
Net book value:
At 31 December 2002 – 913 913
At 31 December 2001 – 741 741
Sherwood International Plc Annual Report and Accounts 2002
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Notes to the Financial Statements
13. Investments (continued)
The original cost of the Company’s investments was £13,994,000 (2001: £21,021,000). In 1985 and 1988 the principal trading subsidiaries of the Group
were revalued to the Directors’ valuations. These valuations totalled £224,000 in 1985 and £2,727,000 in 1988. All additions subsequent to the 1988
valuation are included at cost.
Interests in own shares held represent the cost of shares in the Company held by the trustees of the Employee Benefit Trust and are disclosed as a fixed
asset investment in accordance with the UITF Abstract 13: ‘Accounting for ESOP Trusts’. As at 31 December 2002 the Trust held 1,072,691 shares with a
nominal value of £26,817 and a market value of £858,153. All of the above shares are held under option. None of the above shares have been conditionally
gifted to employees of the Group.
All subsidiary undertakings are consolidated in the Group accounts.
The following are the principal subsidiary undertakings of Sherwood International Plc:
Country of Ordinary
Subsidiary undertaking incorporation Principal activity Share capital
Sherwood International Group Limited UK Technological solutions provider 100%
Sherwood Outsourcing Limited UK Technological solutions provider 100%
Sherwood International Promark Limited UK Technological solutions provider 100%
Sherwood US Holdings Limited UK Holding Company 100%
Sherwood International Inc. USA Technological solutions provider 100%
Sherwood International Holdings Inc. USA Holding Company 100%
Sherwood International Incorporated Canada Technological solutions provider 100%
(formerly Concise Technologies Inc.)
Sherwood International Canada Inc. Canada Holding Company 100%
(formerly Sherwood International Holdings (Canada) Inc.)
e2-one UK Limited UK Technological products vendor 100%
A full list of the Group companies will be included in the Company’s annual return.
14. Debtors
2002 2001 2002 2001
Group Group Company Company
£’000 £’000 £’000 £’000
Trade debtors 9,084 7,532 – –
Amounts owed by subsidiary undertakings –  – 35,758 32,902
Advance corporation tax recoverable 126 126 126 126
Other debtors 554 556 – –
Prepayments and accrued income 9,141 17,915 – –
18,905 26,129 35,884 33,028
Included in debtors are amounts due after one year:
Advance corporation tax recoverable 126 126 126 126 
Prepayments and accrued income 2,708 4,559 – –
2,834 4,685 126 126
Sherwood International Plc Annual Report and Accounts 2002
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Notes to the Financial Statements
15. Creditors: Amounts Falling Due within One Year
2002 2001 2002 2001
Group Group Company Company
£’000 £’000 £’000 £’000
Trade creditors 2,033 2,938 – –
Corporation tax 221 36 – 297
Other taxes and social security costs 1,846 1,533 – –
Other creditors 477 281 – –
Accruals and deferred income 7,818 10,021 199 –
Proposed dividends 453 – 453 –
12,848 14,809 652 297
16. Provisions for Liabilities and Charges
Total
£’000
Group
At 1 January 2002 475
Added during the year 1,067
Utilised during the year (657)
At 31 December 2002 885
As a result of its changing requirements, Sherwood holds a number of excess properties. The Group will continue to bear rental and other costs relating
to these properties and has provided for estimated future costs. The provision is expected to be utilised within eight years.
The Company has no provisions.
17. Deferred Tax
The new accounting standard FRS19: ‘Deferred Tax’, has become effective in the period and has been adopted by the group from 1st January 2002.
The components of deferred tax are as follows:
2002 2001 2002 2001
Group Group Company Company
£’000 £’000 £’000 £’000
Difference between accumulated depreciation and capital allowances (260) (372) – –
Corporation Tax losses carried forward 260 372 – –
– – – –
As at 31st December 2002, the Group had additional tax losses to carry forward of approximately £10,906,000 (2001: £2,325,000) for which no deferred
tax asset has been recognised. There is no charge or credit for deferred tax in the profit and loss account in either 2002 or 2001.
Sherwood International Plc Annual Report and Accounts 2002
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Notes to the Financial Statements
18. Share Capital
2002 2001
Company Company
£’000 £’000
Authorised:
90,000,000 Ordinary shares of 2.5p each (2001: 90,000,000) 2,250 2,250
Allotted, Called Up, and Fully Paid:
46,310,184 Ordinary Shares of 2.5p each (2001: 45,143,425) 1,158 1,129
The Company allotted 1,166,759 Ordinary 2.5p shares during the year.
The Company allotted 1,024,361 shares in respect of cash due to the former shareholders of Sherwood International Inc. (formerly ISS Re Systems Inc.).
The impact of this is to release the Group from a cash outflow in 2002 of £1,193,000.
Options were exercised for 142,398 Ordinary 2.5p shares for a cash consideration of £76,388.
No. of
Ordinary Exercise Period
Share Options Shares price exercisable
Options over Ordinary 2.5p Shares granted under the 1994 
Executive Share Option Scheme at 31 December 2002 were: 40,000 £0.30 1998–2005
Options over Ordinary 2.5p Shares granted under the 
Millennium Share Option Scheme at 31 December 2002 were: 100,000 £0.84 1999–2003
100,000 £1.31 2000–2004
97,500 £4.88 2002–2006
17,500 £5.23 2002–2006
37,914 £12.15 2002–2006
10,800 £14.65 2003–2007
41,000 £9.20 2003–2007
410,268 £3.65 2004-2008
47,203 £3.35 2004-2008
Options over Ordinary 2.5p Shares granted under the Savings Related 
Share Option Scheme at 31 December 2002 were: 149,867 £0.70 2002
2,639 £3.67 2002
46,522 £3.67 2004
Options over Ordinary 2.5p Shares granted under the Employees 
Share Plan at 31 December 2002 were: 280,269 Nil 2003
33,478 Nil 2004
723,107 Nil 2005
Options over Ordinary 2.5p Shares granted under the Executive Share 685,714 £0.88 2004-2011
Option Plan at 31 December 2002 were: 384,549 £0.76 2005-2012
161,706 £1.29 2005-2012
1,541,440 £1.33 2005-2012
Options over Ordinary 2.5p Shares granted under the Long Term
Incentive Plan (LTIP) at 31 December 2002 were: 342,857 Nil 2004
260,250 Nil 2005
Sherwood International Plc Annual Report and Accounts 2002
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Notes to the Financial Statements
19. Reserves
Share Shares to Profit 
premium Revaluation Merger be issued and loss
account reserve reserve reserve account
£’000 £’000 £’000 £’000 £’000
Group
At 1 January 2002 38,484 – 2,597 1,193 (6,642)
Retained loss for the year –––– (323)
Release of shares to be issued reserve ––– (1,193) –
Movement in relation to share related awards –––– (1,707)
Currency translation differences –––– (681)
Share gift and options exercised 73 ––––
Shares allotted 1,167 ––––
At 31 December 2002 39,724 – 2,597 – (9,353)
Company
At 1 January 2002 38,484 2,951 3,941 1,193 608
Retained profit for the year –––– 2,595
Release of shares to be issued reserve ––– (1,193) –
Currency translation differences –––– (431)
Shares allotted 1,240 ––––
At 31 December 2002 39,724 2,951 3,941 – 2,772
During the year the shares to be issued reserve was released through the issue of 1,024,361 shares to the former shareholders of Sherwood International
Inc. (formerly ISS Re Systems Inc.)
The Company has not presented its own profit and loss account as permitted by Section 230 of the Act 1985. The Company made a profit after tax of
£3,048,000 (2001: loss of £3,355,000).
The cumulative goodwill from acquisitions made prior to January 1998 written off against reserves is £6,484,000.
20. Reconciliation of Shareholders’ Funds `
2002 2001 2002 2001
Group Group Company Company
£’000 £’000 £’000 £’000
Retained (loss)/profit for the year (323) (11,678) 2,595 (3,739)
Release of shares to be issued reserve (1,193) 577 (1,193) 577
Movement in relation to share related awards (1,707) 534 – –
Currency translation differences (681) (280) (431) 857
New share capital subscribed 1,269 5,911 1,269 6,367
Net (reduction)/addition to shareholders’ funds (2,635) (4,936) 2,240 4,062
Shareholders’ funds at 1 January 36,761 41,697 48,306 44,244
Shareholders’ funds at 31 December 34,126 36,761 50,546 48,306
Sherwood International Plc Annual Report and Accounts 2002
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Notes to the Financial Statements
21. Gross Cash Flows
2002 2001
Group Group
£’000 £’000
Returns on investments and servicing of finance
Interest received 133 527
Interest paid (4) (20)
Net cash inflow from returns on investments and servicing of finance 129 507
Capital expenditure and financial investments
Payments to acquire tangible fixed assets (260) (962)
Purchase of fixed asset investment (696) (302)
Net cash outflow from capital expenditure (956) (1,264)
Acquisitions and disposals
Purchase of subsidiary undertaking and related obligations – (4,658)
Purchase of an interest in an associated understanding – (1,304)
Net cash acquired with subsidiary – (291)
Payment of deferred consideration on acquisition – (493)
Net cash outflow from acquisitions and disposals – (6,746)
Management of liquid resources
Cash on deposit (604) 1,463
Net cash (inflow)/outflow from management of liquid resources (604) 1,463
Financing
Issue of Ordinary Share capital 76 15 
Total increase in equity financing 76 15
Capital element of finance lease rentals – (25)
Total decrease in debt financing – (25)
Net cash inflow/(outflow) from financing 76 (10)
22. Analysis of Changes in Net Funds
At Foreign At
1 January Exchange 31 December
2002 Cash flows differences 2002
£’000 £’000 £'000 £’000
Cash at bank and in hand 6,019 4,953 (171) 10,801
Cash on deposit – 604 – 604 
Total 6,019 5,557 (171) 11,405 
Sherwood International Plc Annual Report and Accounts 2002
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Notes to the Financial Statements
23. Financial Instruments
a) Financial Assets
The interest rate profile of the Group’s financial assets at 31 December 2002 was:
2002 2002 2002 2001 2001 2001
Total Floating rate No interest Total Floating rate No interest
Currency £’000 £’000 £’000 £’000 £’000 £’000
Sterling 17,669 7,430 10,239 16,827 3,765 13,062
USD 9,834 3,893 5,941 12,303 2,124 10,179
Canadian dollar 699 82 617 544 130 414
28,202 11,405 16,797 29,674 6,019 23,655
The floating rate financial assets comprise:
• Sterling denominated bank deposits that accrue interest at the prevailing rate;
• USD denominated bank deposits that accrue interest at the prevailing rate; and
• Canadian dollar denominated bank deposits that accrue interest at the prevailing rate.
The no interest financial assets comprise:
• debtors and accrued income.
(b) Maturity of Financial Assets
The maturity profile of the Group’s financial assets at 31 December 2002 was as follows:
2002 2001
£’000 £’000
In one year or less 25,494 25,115
In more than one year but not more than two years 1,507 1,399
In more than two years but not more than five years 1,201 3,160
28,202 29,674
The weighted average period until maturity for financial assets on which no interest is paid is 0.66 years (2001: 0.90 years).
(c) Financial Liabilities
The interest rate profile of the Group’s financial liabilities at 31 December 2002 was:
2002 2002 2002 2001 2001 2001
Total Fixed rate No interest Total Fixed rate No interest
Currency £’000 £’000 £’000 £’000 £’000 £’000
Sterling 8,008 – 8,008 6,313 – 6,313
USD 1,172 – 1,172 1,507 – 1,507
Canadian dollar 211 – 211 27 – 27
9,391 – 9,391 7,847 – 7,847
The no interest financial liabilities comprise creditors, accruals and provisions.
Sherwood International Plc Annual Report and Accounts 2002
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Notes to the Financial Statements
23. Financial instruments (continued)
(d) Maturity of financial liabilities
The maturity profile of the Group’s financial liabilities at 31 December 2002 was as follows:
2002 2001
£’000 £’000
In one year or less 8,911 7,683 
In more than one year but not more than two years 145 164
In more than two years but not more than five years 147 –
In more than five years 188 –
9,391 7,847 
The weighted average period until maturity for financial liabilities on which no interest is paid is 0.35 years (2001: 0.18 years).
(e) Currency exposure
The table below shows the Group’s currency exposures. Such exposures comprise the monetary assets and liabilities of the Group that are not
denominated in the functional currency of the operating unit.
Functional Currency of group operation Net foreign currency Net foreign
monetary currency monetary
assets/(liabilities) assets/(liabilities)
USD 2002 USD 2001
£’000 £’000
Sterling 229 150
(f) Gains and Losses on Hedges
To protect against a further strengthening of Sterling against the USD in the year ahead, the Group has purchased a 1.6000 GBP call/USD 
put that expires on 31 December 2003. This gives the Group the option to sell $19,000,000 and buy sterling on 31 December 2003 at the worst-case
rate of 1.6000.
At 31 December 2002 the exchange rate closed at 1.6044.
24. Capital and Other Commitments
(a) Capital commitments
Capital expenditure contracted for at 31 December 2002 was £nil (2001: £nil).
(b) Operating lease commitments
At 31 December 2002 the Group had entered into operating leases expiring:
2002 2001
Land and 2002 2002 Land and 2001 2001
buildings Other Total buildings Other Total
£’000 £’000 £’000 £’000 £’000 £’000
Within one year 271 16 287 331 59 390
Between two and five years 528 57 585 1075 92 1167
After five years 1,317 – 1,317 407 – 407
2,116 73 2,189 1,813 151 1,964
Sherwood International Plc Annual Report and Accounts 2002
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Notes to the Financial Statements
25. Pensions
Throughout the year the Group operated both defined contribution pension schemes and a defined benefit scheme for the Directors and employees
who fulfilled the age and length of service criteria for membership.
2002 2001
Group Group
£’000 £’000
Cost for the year - defined contribution schemes 932 933
Cost for the year - defined benefit scheme 32 –
964 933
Defined Contribution Schemes
The outstanding contributions at the year end are £137,485 (2001:£112,000), relating to the employee and employer contributions for December 2002.
These contributions were paid in January and February 2003.
Defined Benefits Scheme
The group operates a funded defined benefit scheme in the UK. A full actuarial valuation was carried out as at 6 April 2001 and updated to 31 December
2002 by a qualified independent actuary using the projected unit method. The pension cost charge for the period represents contributions payable by
the company to the scheme and amounted to £32,000 (2001: £nil)
Whilst the Group continues to account for pension costs in accordance with SSAP 24: ‘Accounting for Pension Costs’, under FRS17: ‘Retirement Benefits’
the following transitional disclosures are required
As at 31 December 2002 the major assumptions used to value the defined benefits liabilities by the actuary were:
2002 2001
Rate of increase of deferred pensions 2.3% 2.5%
Discount rate 5.6% 5.8%
Inflation assumption 2.3% 2.5%
The assumptions used by the actuary are the best estimates chosen from a range of possible actuarial assumptions which, due to the time scale covered,
may not necessarily be borne out in practice. There are no current employees in the scheme and, it is closed to new members.
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 present value of the scheme's liabilities, which are derived from cash flow projections over long periods and thus inherently uncertain are
included in unallocated units invested in equity-related assets to cover the defined benefit liabilities with the expected return and value below:
2002 2001
31 December 31 December
Long term 2002 Long term 2001
rate of return Value rate of return Value
expected £'000 expected £'000
Market value of assets - equities 8% 650 7.75% 848
Present value of scheme liabilities (908) (889)
Deficit in scheme (258) (41)
Related deferred tax asset 77 12 
Net pension liability (181) (29)
Sherwood International Plc Annual Report and Accounts 2002
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Notes to the Financial Statements
25. Pensions  (continued)
A reconciliation of the deficit in the scheme with the amount recognised in the Group balance sheet is as follows:
Profit and loss
Net assets account
£'000 £'000
As reported in these Group financial statements 34,126 (9,353
Net pension liability under FRS17 excluding any related deferred tax asset (258) (258)
As restated under FRS 17 assumptions 33,868 (9,611)
If FRS17 had been fully adopted in these financial statements the pension costs for the defined benefit schemes would have been:
Movements in deficit during the year 2002
£'000
Deficit in scheme at beginning of the year (41)
Movement in year:
Contributions paid 32
Other finance income 15
Actuarial loss (264)
(258)
Analysis of amounts charged to operating profit 2002
£'000
Current service cost 32   
Total operating charge 32   
Analysis of amounts included in other finance income/(costs)
2002
£'000
Expected return on pension scheme assets 67 
Interest on pension scheme liabilities (52)
Net return 15
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Notes to the Financial Statements
25. Pensions  (continued)
Analysis of amounts that would be recognised in the Statement of Total Recognised Gains and Losses (STRGL)
2002
£'000
Actual return less expected return on pension scheme assets (297)
Experience gains and losses arising on the scheme liabilities 60 
Change in assumptions underlying the underlying present value of the scheme's liabilities (27)
Actuarial loss recognised in STRGL (264)
History of experience gains and losses 2002
£'000
Difference between the expected and actual return on unallocated scheme assets (297)
Percentage of scheme assets (46%)
Experience gains losses on scheme liabilities 60 
Percentage of the present value of the scheme liabilities 7%
Total amount recognised in STRGL (264)
Percentage of the present value of the scheme liabilities (29%)
26. Charges and Guarantees
There were no charges or guarantees as at 31 December 2002.
27. Contingent Liabilities
There were no material contingent liabilities.
28. Related Party Transactions
The Group has taken advantage of the exemption contained in FRS8 ‘Related Parties Transactions’ and has therefore not disclosed transactions or
balances with subsidiaries that form part of the Group.
During the year the Group entered into transactions in the ordinary course of business with other related parties. Transactions entered into during the
year and trading balances outstanding at 31 December were as follows:
2002 
2002 Amounts 2001 2001 
Sales to owed by Sales Amounts
related related to related owed by
party party party related
Related party £'000 £'000 £'000 party £'000
Trading Sports Limited and Interactive Sports (Jersey) Limited
Sub-let of Group office 33 23 16 16
Software sales and services 653 183 711 200
G.K. Twaddle, an Executive Director of Sherwood International Plc, is also a Director of Trading Sports Limited and Interactive Sports (Jersey) Limited.
Sherwood International Plc Annual Report and Accounts 2002
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 64 Notice of Annual General Meeting
Sherwood International Plc Annual Report and Accounts 2002
Sherwood International Plc (“the Company”)
Notice is hereby given that the eighteenth Annual General Meeting of the
Company will be held The Great Eastern Hotel, 40 Liverpool Street, London
EC2M 7QN, UK, on Thursday 1 May 2003 at 11.30 am for the purposes as below.
Ordinary Resolutions
To consider and, if thought fit, pass the following resolutions as ordinary resolutions:
1. To receive, consider, and adopt the Company’s financial statements for the financial year ended 31 December 2002,
and the Directors’ and auditors’ reports thereon. 
2. THAT the Remuneration Report contained within the report and accounts for the financial year ended 31 December
2002 is hereby approved.
3. To declare a final dividend of 1p per share on each Ordinary Share of 2.5p for the year ended 31 December 2002.
4. To re-elect as a Director of the Company Dr. Ken Andrew who retires in accordance with article 82 of the Articles of
Association of the Company and, being eligible, offers himself for re-election.
5. To re-elect as a Director of the Company Mr. Martyn Lambert who retires in accordance with article 82 of the Articles
of Association of the Company and, being eligible, offers himself for re-election.
6. To elect as a Director of the Company Mr. Phillip Crawford who retires in accordance with article 87 of the Articles of
Association of the Company and, being eligible, offers himself for re-election.
7. To elect as a Director of the Company Mr. Stuart Drew who retires in accordance with article 87 of the Articles of
Association of the Company and, being eligible, offers himself for re-election.
8. To elect as a Director of the Company Mr. Robert Youngjohns who retires in accordance with article 87 of the Articles
of Association of the Company and, being eligible, offers himself for re-election.
9. To re-elect KPMG Audit Plc as auditors of the Company to hold office from the conclusion of the Annual General
Meeting until the conclusion of the next Annual General Meeting at which financial statements are laid before the
Company and to authorise the Directors to determine their remuneration.
10. THAT the Directors be and they are hereby generally and unconditionally authorised in accordance with Section 80 of
the Companies Act 1985 (the “Act”) to exercise all the powers of the Company to allot relevant securities (as defined
in Section 80(2) of the Act) up to an aggregate nominal amount of £386,236.46 representing 33.3% of the Company’s
current issued Ordinary Share capital provided that this authority shall expire fifteen months from the date of this
resolution or (if earlier) at the conclusion of the Company’s next Annual General Meeting after the 2003 Annual
General Meeting, save that the Company shall be entitled to make offers or agreements before the expiry of such
authority that would or might require relevant securities to be allotted after such expiry and the Directors shall be
entitled to allot relevant securities pursuant to any such offer or agreement as if this authority had not expired.
65 Notice of Annual General Meeting
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 65 66 Notice of Annual General Meeting
Special Resolutions
To consider and, if thought fit, pass the following resolutions as special resolutions:
11. THAT the Directors be and they are hereby empowered pursuant to Section 95 of the Act to allot equity securities (as
defined in Section 94(2) of the Act) for cash pursuant to the authority conferred by resolution 10 above as if Section
89(1) of the Act did not apply to any such allotment provided that this power shall be limited to:
11.1. The allotment of equity securities in connection with a rights issue in favour of the holders of Ordinary Shares
and any other persons entitled to participate therein where the equity securities respectively attributable to the
interests of the holders of Ordinary Shares are proportionate (as nearly as may be) to the respective numbers
of Ordinary Shares held or deemed to be held by them, subject to such exclusions or other arrangements as
the Directors may deem necessary or expedient to deal with fractional entitlements or legal or practical
problems arising under the laws of any overseas territory or the requirements of any regulatory body or stock
exchange or by virtue of shares being represented by depository receipts or any matter whatever; and
11.2. The allotment (other than pursuant to sub-paragraph 11.1 above) for cash to any person or persons of equity
securities up to an aggregate nominal amount of £57,935.47 representing 5% of the Company’s current issued
Ordinary Share capital, and shall expire fifteen months from the date of this resolution or, if earlier, at the
conclusion of the Company’s next Annual General Meeting after the 2003 Annual General Meeting, save that the
Company shall be entitled to make offers or agreements before the expiry of such power that would or might
require equity securities to be allotted after such expiry and the Directors shall be entitled to allot equity
securities pursuant to any such offer or agreement as if the power conferred hereby had not expired.
12. THAT the Company be and it is hereby generally and unconditionally authorised to make market purchases (within the
meaning of Section 163(3) of the Act) of Ordinary Shares in the capital of the Company provided that:
12.1. The maximum number of Ordinary Shares which may be purchased is 4,634,838, representing 10% of the
Company’s current issued Ordinary Shares
12.2. The maximum price which may be paid for an Ordinary Share is an amount equal to 105% of the average of the
middle market quotations for the Ordinary Shares as derived from the London Stock Exchange Daily Official List
for the five business days immediately preceding the day on which the shares are contracted to be purchased;
12.3. The minimum price which may be paid for each Ordinary Share is the nominal value of the share; and
12.4. This authority shall expire fifteen months from the date of this resolution or (if earlier) at the conclusion of the
next Annual General Meeting of the Company after the 2003 Annual General Meeting, save that a contract of
purchase may be made before such expiry which will or may be executed wholly or partly after the expiry of
this authority and a purchase of shares may be made pursuant to any such contract.
By order of the Board
Angela P. Randolph – Company Secretary
3 March 2003
Registered Office
Sherwood House, Eastworth Road
Chertsey, Surrey KT16 8DF, UK
Registered in England no. 1812127
Notes
1. A member entitled to attend and vote at the above Meeting may appoint one or more proxies to attend and, on a poll, vote in the member’s stead.  A proxy need not be a member of the Company.
2. To be valid the instrument appointing the proxy, together as appropriate with any power of attorney or other authority under which it is signed, or a certified copy of such authority, must be
deposited at the offices of the Company’s registrars at Northern Registrars Limited, Northern House, Woodsome Park, Fenay Bridge, Huddersfield, HD8 0JQ, U.K., not less than forty-eight (48) hours
before the time appointed for the holding of the Annual General Meeting.  A pre-paid form of proxy is enclosed.
3. The appointment of a proxy will not prevent a member from subsequently attending and voting at the Annual General Meeting in person.
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 66 © Sherwood International 2003, all rights reserved. 
Certain statements in Sherwood International Plc's annual report that are neither reported financial results nor other
historical information may be forward-looking statements, including, but not limited to, statements that are
predictions of or indicate future events, trends, plans, or objectives. Undue reliance should not be placed on such
statements because, by their nature, they are subject to known and unknown risks and uncertainties and can be
affected by other factors that could cause actual results and plans and objectives to differ materially from those
expressed or implied in the forward-looking statements (or from past results). Such risks, uncertainties, and factors
include, but are not limited to, adverse changes in the economy, unanticipated economic and political conditions in
international markets, the impact of investments, acquisitions and dispositions (including related financing) and
currency fluctuations. Sherwood undertakes no obligation to publicly update or revise any of these forward-looking
statements, whether to reflect new information or future events or circumstances or otherwise.
Copy to go ere
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 67 Copy to go here
“Sherwood International is dedicated to helping our customers transform 
their businesses through the pragmatic use of technology. Using proven 
methodologies and a wealth of experience, we deliver solutions that really work.”
Martyn Lambert, Chief Marketing Officer
AnnualRep_17.qxd  17/3/03  3:38 pm  Page 68 www.sherwoodinternational.com
UK – Corporate International HQ
Sherwood House, Eastworth Road
Chertsey, Surrey KT16 8DF
Tel: +44 (0)1932 757575
Fax: +44 (0)1932 757501
USA
200 Business Park Drive
Armonk, NY 10504
Tel: +1 914 273 1717
Fax: +1 914 273 7790
Canada
5225 Satellite Drive Mississauga, 
Ontario Canada, L4W 5P9 
Tel: +1 905 275 2299
Fax: +1 905 275 6514
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