2 | annual report 2007
Annual Report and Financial Statements for the year
ended 31 May 2007
System C Healthcare PLC (“System C”) is an independent British business specialising in the
provision of information systems and services to the healthcare sector.
System C works right across the healthcare sector and offers a range of patient management
software applications including the MedWay Patient Administration System (“PAS”) and
Electronic Patient Record (“EPR”) as well as the HealthData Management Suite. System C
also has one of the UK’s largest dedicated teams of healthcare IT domain experts who have
implemented most kinds of clinical and administrative IT systems in all healthcare settings.
3 Mission and Goals
3 Highlights of the Year
4 Chairman’s Statement
7 Chief Executive Officer’s
Review
13 Financial Review
16 Corporate Responsibility
Statement
18 Board of Directors
20 Directors’ Report
23 Corporate Governance
Statement
27 Directors’ Remuneration
Report
32 Statement of Directors’
Responsibilities
33 Independent Auditors’
Report
35 Income Statement
36 Balance Sheet
37 Statement of Changes in
Shareholders’ Equity
38 Cash Flow Statement
40 Notes to the Financial
Statements
75 Company Information
 contents annual report 2007 | 3
Financial highlights
Year ended 31 May 2007 2006
£m £m
Turnover 13.5 16.1
Profit from operations 0.6 0.1
Profit before tax 1.3 0.7
Cash generated from operations 2.1 0.5
Basic earnings per share 1.09p 1.27p
Operating highlights
■ Annual revenues of £13.5m (2006: £16.1m) 
■ Withdrawal of Accenture from the National Programme for IT impacted on Services
Division revenue in the year (£10m compared to £12.6m in prior year)
■ Expansion and diversification of customer base with tight management of our costs
increased our profit from operations to £0.6m (2006: £0.1m) and our profit before tax to
£1.3m (2006: £0.7m)
■ Strong cash generation with net cash generated from operations of £2.1m (2006: £0.5m)
■ Net cash at bank of £10m (2006: £8m)
■ Successful operational delivery of our major contracts. We now have contracts with four
out of the five Local Service Provider partners (“LSPs”) in the National Programme for IT
(“NPfIT” or “National Programme”) 
■ Cost base reduced by over £2.5m (annualised savings) during the year
■ Recent contract wins include Isle of Man Government, NHS Connecting for Health,
Diagnostic Treatment Centres and NHS Trusts with a total contract value for System C of
over £13m over 5 years. These form the bedrock for future growth.
mission and goals
 highlights of the year
 System C aims to be the UK’s leading healthcare IT solutions provider, improving patient
care via the effective application of IT products and services.
Our vision is to use our expertise in the application of healthcare IT to contribute towards the
evolution in public health and social care taking place both within and outside the UK.
Our goal is to provide long-term value for all our major stakeholders. This means:
■ Providing premium and high-value products and services
■ Focusing on what we do best – healthcare IT – whilst adapting our solutions to the
needs of the market 
■ Continued growth and financial success
■ Remaining an employer of choice in healthcare IT 4 | annual report 2007
Introduction and highlights
System C has accomplished a great deal
this year including: broadening its client
base, securing new contract wins in excess
of £13m over 5 years and enhancing its
product range through a product
development partnership with Microsoft.
Subsequent to the year end the Company
also completed the acquisition of 
IQ Systems Services Ltd (“IQ Systems”). 
This acquisition extends our ability to 
secure work in the independent sector
healthcare market.
Although we achieved much, there were
marked differences between the two halves of
our financial year. In the first six months the
slowdown in the National Programme for IT as
a result of the withdrawal of Accenture from
the North East and Eastern regions led to a
scaling back of our Service Division
deployments, which impacted the results for
the six months ended 30 November 2006.
Despite these challenging market conditions,
we worked extremely hard to deliver effectively
against our other contracts, whilst controlling
our costs, tendering for new opportunities and
reviewing acquisition targets which would
enhance our earnings in the future. I am
pleased to say that these efforts began to
produce results in the second half of the year,
giving us a solid platform from which to realise
our strategic objectives going forward.
People and the Board
System C is principally a people business
and I would like to thank all of our staff for
their part in delivering a hands-on, practical
and high quality service to our customers. 
It is primarily their efforts that helped us to
deliver our results. I would also like to
welcome the new colleagues that joined us
through our acquisition of IQ Systems. 
I believe that there are great cultural
synergies between our two companies and
we are delighted to welcome them into the
System C team.
We recently announced that I have become
Non-Executive Chairman of System C as my
tenure as Executive Chairman came to an
end. The requirement for the role of
Executive Chairman has diminished in the
last year, and this is a logical next step in the
evolution of the business. In addition we
announced the appointment of Dr John
Forrest as the Deputy Chairman, and John
remains our Senior Independent Director.
Both John and I look forward to working
with the Board to achieve further expansion
of the System C Group.
Dividends
The Board is recommending a final dividend
of 0.24p per share, which if approved by
shareholders at the Annual General Meeting
on 7 November 2007, will be paid on 
9 November 2007 to those shareholders on
the register at 5 October 2007. The total
dividend of 0.36p per share represents an
increase of 9% compared to the 
previous year.
Corporate governance
System C is committed to high standards of
Corporate Governance. Although as an AIM
listed company we are not required to
comply with the Combined Code, we seek
to adopt the provisions of the Combined
Code in order to meet best practice. Further
details of how the principles of the
Combined Code have been applied is given
in the Corporate Governance Statement on
pages 23 to 26 and in respect of Directors’
remuneration, in the relevant section of the
Directors’ Remuneration report on pages
27 to 31.
chairman’s statement
 System C has a range of
clinical and administrative
computer systems and tools
designed exclusively for use
in the healthcare market. 6 | annual report 2007
chairman’s statement continued  Strategy
System C’s strategy remains unchanged: to
be the UK’s leading healthcare IT solutions
provider, improving patient care via the
effective application of IT products and
services. Our vision is to use our expertise in
the application of healthcare IT to contribute
towards the evolution in public health and
social care taking place both within and
outside the UK.
Outlook
System C is recognised as an organisation
of highly experienced IT professionals and
also as one of the few solely dedicated to
the healthcare sector. This gives us a distinct
competitive advantage in a market with
significant barriers to entry, and also
considerable opportunity given the ongoing
requirement for healthcare IT to support
modernisation of healthcare services and the
scale of healthcare spend in the UK 
and overseas.
Our healthcare focus also gives rise to
potential risk as we are exposed to changes
within the healthcare IT procurement model
and any downturn in healthcare IT spend.
We believe that we have demonstrated our
effectiveness at managing this risk and at
adapting to the constant market changes.
We have achieved this by focusing on
delivery capability, broadening our client
base, investing in product development and
diversifying into the private sector.
Although our market remains challenging
and we are still only in the first quarter of our
financial year, the Board is comfortable with
the current level of market expectations.
Jim Horsburgh
Chairman
11 September 2007 annual report 2007 | 7
chief executive officer’s review
 Chief Executive Officer’s Review
System C generated revenues of £13.5m
(2006: £16.1m) and a profit from operations
of £0.6m (2006: £0.1m). Revenues fell by
£2.6m compared with the prior year,
primarily as a result of the withdrawal of one
of our major clients, Accenture, from the
National Programme for IT. Accenture
withdrew officially from the National
Programme in the North East and Eastern
regions in January 2007, when CSC was
awarded the contract to replace it. However,
our revenue stream from Accenture had
declined over the previous quarter and its
departure had a major impact on System C
as it was our largest client representing
annual revenues of approximately £7m. 
However, through expansion and
diversification of our customer base (detailed
below), we sought to replace the loss of this
client with new revenues. This combined
with the tight management of our cost base,
enabled us to increase our profit from
operations by £0.5m compared to the prior
year, and deliver a profit before tax of £1.3m
(2006: £0.7m).
Our cash generation continued to be strong
with cash generated from operations of
£2.1m and with net cash increasing by £2m
to £10m.
Repositioning for growth
Over the last year we have taken a number of
actions to build long term value in our
business. We made a commitment to the
continued development of our Products and
Services, particularly against a backdrop of
changes within the National Programme for IT.
We have achieved a number of key successes
which have significantly repositioned the
business for growth going forward. These
successes are discussed below.
Securing the Isle of Man contract
In March 2007 the Company and its
products and services were chosen by the
Isle of Man Government Department of
Health & Social Security (“DHSS”) to provide
an island-wide healthcare IT system and
related services. System C will be installing
software solutions at the Noble's hospital in
Douglas and also throughout the Island's
community services to provide a fully
integrated Clinical Care Support Service
serving all care settings.
The contract is the first Electronic Patient
Record procurement for some considerable
time and we are delighted to have won
against a large and competitive field. 
System C has an excellent delivery record
for these types of systems and we look
forward to bringing real benefits to patients,
clinicians and all health service users on 
the Island.
The contract with the DHSS is a three phase
framework contract with an estimated value
of £7.5m over seven years. 
Securing a contract with NHS Connecting
for Health (“CfH”) 
In May 2007 we signed a major new contract
to provide experienced healthcare IT
deployment specialists to the Government's
NHS Connecting for Health agency. 
Under a framework contract System C
provides specialist support to CfH’s Central
Deployment Support Team. This team is
responsible for helping NHS Trusts
implement the National Programme for IT
and for transferring knowledge and skills to
Trust staff.  8 | annual report 2007
chief executive officer’s review continued  A key factor in winning the contract was
System C's experience working directly for
NHS Trusts and with other suppliers across
the country. The new contract is a flexible
and cost effective performance-based
framework agreement which allows CfH to
draw on our breadth of skills and specialist
expertise to support the go-live process
within the National Programme as and 
when required.
Securing a contract for IT Services for
Diagnostic Treatment Centres
During the year System C has provided
professional services to the InHealth Netcare
joint venture, which has recently been
awarded a contract by the Government to
provide diagnostic services in and around
London. These services will be provided
both in private healthcare units where there
is identified spare capacity and in GP
surgeries. In addition, mobile units will bring
diagnostics to patients at private hospitals,
NHS hospitals and other sites such as
supermarkets. The aim is to give patients
greater choice and faster access to
diagnostic services, including X-Rays, MRI
and ultrasound scans, endoscopy,
phlebotomy and echocardiography.
System C was responsible for deploying the
IT systems (patient management, radiology,
PACS and call centre management)
underpinning these diagnostic services. 
We supplied a range of services including
programme management, design
consultancy, configuration and testing,
reporting support and training. The contract
marked System C’s entry into the private
healthcare market.
Acquisition of IQ Systems
In July 2007, we announced another
significant strategic step into the private
healthcare market with the acquisition of 
IQ Systems.
IQ Systems is a leading supplier of patient
management and clinical software solutions
for private treatment centres and hospitals.
Its IQUtopia product is highly regarded in the
private healthcare marketplace and has been
deployed at a number of the most
prestigious private sector treatment centres
in the country including Sussex Orthopaedic
NHS Treatment Centre, Will Adams NHS
Treatment Centre (Gillingham), St Mary's
NHS Treatment Centre (Portsmouth),
Midlands NHS Treatment Centre (Burton)
and Eccleshill NHS Treatment Centre
(Bradford) amongst others. IQUtopia
complements System C's MedWay Patient
Administration and Electronic Patient Record
(“EPR”) software, which is typically deployed
into larger NHS Acute hospitals.
The acquisition of IQ Systems subsequent to
the year end accelerates System C's
expansion into the private healthcare market
as well as strengthening its product portfolio.
It has a number of major private healthcare
customers including Mercury Healthcare
(now part of Care UK), Centres of Clinical
Excellence (“CCE”) and Nations Healthcare
(recently acquired by CCE). annual report 2007 | 9
Product development 
We invested significantly in developing our
software products in the last year,
concentrating development resource and
investment on the upgrade of our MedWay
product suite to the Microsoft .NET platform.
This initiative is part of a long term
investment plan to ensure that a modern,
functionally rich and interoperable PAS/EPR
system will be ready to go to market by the
time new opportunities such as the
Additional Supply Capability and Capacity
initiative (see below) mature in 2008/9. We
believe that opportunities to sell this product
exist both within the UK and in other
geographical territories. We are seeking
partners to assist in our efforts to penetrate
overseas markets.
Continual change within our markets
Healthcare provision in the UK is undergoing
continued modernisation and change. 
Our main customers include NHS Trusts,
Local Service Providers under the National
Programme for IT, NHS Connecting for
Health and more recently private sector
providers to the health market.
The year has seen considerable change
within the National Programme for IT,
commencing with the withdrawal of
Accenture from the North East and Eastern
clusters, and the appointment of CSC to
those clusters. Other recent developments
include the creation of the National Local
Ownership Programme (“NLOP”) which
moves responsibility for implementing 
the National Programme to Strategic 
Health Authorities.
A major new initiative from the National
Programme has been the creation of the
Additional Supply Capability and Capacity
(“ASCC”) Framework Agreement.  The
framework will cover an array of different
systems and services, with an estimated
value of £100m over a period of up to four
years, and is likely to commence early in
2008. We consider ourselves to be well
placed to benefit from the additional product
and service opportunities that the framework
agreement will provide. 
System C has the products, skills and
expertise which will allow us to exploit the
opportunities arising from these changes
and we will remain focused on the provision
of practical, hands-on delivery of IT products
and services to the healthcare sector.
Our competitive strengths
Our main competitive strengths include our
flexibility and adaptability to changing market
conditions, our ability to secure new
business, the expertise, dedication and
experience of our people and our focus on
the delivery of high quality IT products and
services to the healthcare market.
These competitive strengths form a
substantial barrier to entry which we aim to
capitalise on further in the coming year.  10 | annual report 2007
Key performance indicators (“KPIs”)
The following KPIs are used by the Board to
monitor and assess the business:
Year ended 31 May 2007 2006
Average revenue 
per head £85,816 £82,042
Gross margin 47% 49%
Margin on profit from 
operations 4% 1%
■ Average revenue per head is defined as
the total revenue in the year divided by the
average monthly number of employees.
■ Gross margin is defined as gross profit
divided by total revenue.
■ Margin on profit from operations is
defined as the profit from operations
divided by total revenue.
The Company focuses heavily on utilisation
of staff within the business to maximise the
average revenue per head. Although total
revenue has declined, the average revenue
per head increased by approximately 5%
reflecting increased efficiencies across 
the Company.
Gross margin has only slightly reduced to
47% despite pricing pressures in the
Services Division due to an improvement in
margins in the Products Division.
As detailed in the Financial Review, tight cost
containment led to an increase in the margin
on profit from operations from less than
1% to over 4%.
Business risks
The Board continually identifies, reviews and
where possible mitigates the risks that may
impact our business, prospects, people,
financial results and share price. The key,
high level risks to our business are described
in the following sections.
Public sector spending/political changes
There has been recent speculation that a
tightening of public spending will lead to a
reduction in UK Government investment in
consulting and IT projects. In addition the
appointment of a new Labour leader has
resulted in speculation that the spending on
large scale IT projects will be reduced. It is
probably too early to identify with any
certainty what the impact may be at this
stage. However we firmly believe that
technology is an essential enabler of more
effective patient care. Investment in IT
products, services and infrastructure is
paramount in helping the NHS to achieve 
its strategic objectives as well as the 
detailed targets against which it is 
constantly monitored.
Market procurement
The National Programme for IT remains the
Government’s main vehicle for the delivery of
transformational IT to the healthcare sector.
The Programme has undergone significant
change since its inception, and there
remains speculation as to whether this
current procurement model will be subject to
change in the future.
We remain committed to the success of the
National Programme, and work closely with
the LSPs, NHS Connecting for Health, NHS
Trusts and Strategic Health Authorities to
achieve its objectives. 
chief executive officer’s review continued  annual report 2007 | 11
One potential change to the current
procurement model could be the opening up
of the market to greater competition to
augment the National Programme as
indicated in the tender for the ASCC
catalogue. The ASCC Memorandum of
Understanding, published in April 2007,
states that ASCC will provide the NHS with
“access to a broader based supply
community” which will “complement and
support the work already underway under
the NPfIT”. We believe that we are well
positioned given our reputation and delivery
capability to benefit significantly in the
medium to long term from a broadening of
direct suppliers to the NHS.
Ability to secure new business
The key to growth is the ability to secure
new business. We recognise that in the past
we have been reliant on several core
customers and in 2005/6 we set out to
expand our customer base. We have
achieved success in broadening our client
base as illustrated above and we will
continue to focus on securing new business
within the NHS as well as through the
expansion of the private sector,
strengthening the capabilities and experience
of our senior team in order to achieve this.
Staff retention
Over the past year we have noted increased
competition to attract the best people with
the relevant IT healthcare experience. We are
addressing these risks to the business by
offering a wide range of remuneration
benefits, investment in training and
development combined with a focus on the
individual and their career development.
These efforts contributed towards the
Company’s reaccreditation to the highly
regarded Investors in People scheme in 
May 2007.
Delivery
Over many years System C has built a
strong reputation for the successful delivery
of IT products and services to the healthcare
sector. Our products and services operate in
intense, life-critical environments and any
failure to meet contracted commitments
and/or client expectations could damage our
reputation and impact on our financial
results/position.
To mitigate this risk, we monitor our
performance continuously against
contracted commitments and expectations,
and deploy a wide range of experienced
technical specialists and Programme
Directors to evaluate performance. We
appoint a Project Board for any high risk
projects with a combination of resources as
appropriate from technical, delivery, finance
and commercial expertise.
Client concentration
A large proportion of our revenue has
historically been generated from our top five
clients, and the loss of a major client such as
Accenture last year can have a negative
impact on revenue. As demonstrated this
year we focused substantial efforts on
winning new clients and diversifying our
customer base in order to mitigate this risk
going forward.
Accreditation
Much of our work relies on maintaining
accreditations to international standards
such as the ISO9001/TickIT Quality
Assurance standard. System C employs a
full-time Quality Manager to ensure
adherence to Quality Standards, to monitor
progress against improvement initiatives 
and to monitor customer satisfaction. 
The Company has been ISO accredited
since 1999 and was recertificated in
December 2006. 12 | annual report 2007
Acquisitions
We recognise that selected acquisitions will
play a key role in future growth of the
business, as illustrated by the recent
acquisition of IQ Systems. There are inherent
risks in acquiring businesses and we have
appointed an Integration Director from within
the business to ensure that IQ Systems is
successfully integrated with System C and
that its strategic objectives and targets 
are achieved.
The future
We are always keen to improve performance
each year. Whilst this year’s results were
below the expectations we had at the start of
the year, we recognise that this was against a
backdrop of considerable uncertainty.
We remained focused throughout,
responding to rapidly changing market
conditions, managing costs whilst seeking to
grow the business by securing new
contracts, investing in new products and
identifying appropriate acquisition targets.
As a result System C has a strong platform
to build future growth and we remain
positive that there will be a healthy demand
for our products and services in the future.
Dr Ian Denley
Chief Executive Officer
11 September 2007
chief executive officer’s review continued  annual report 2007 | 13
financial review
 Year ended 31 May 2007 2006
£m £m
Products 3.5 3.5
Services 10.0 12.6
Total revenue 13.5 16.1
Gross profit 6.4 7.9
Operating costs (5.8) (7.8)
Profit from operations 0.6 0.1
Net financial income 0.7 0.6
Profit before tax 1.3 0.7
Tax (0.4) 0.4
Profit after tax 0.9 1.1
Basic EPS 1.09p 1.27p
The Company has prepared these financial
statements under International Financial
Reporting Standards (“IFRS”), a year earlier
than required by the AIM Rules.
System C is ideally structured to address
two separate areas of market demand:
■ Products Division – where the Company
contracts directly to provide products
and associated deliverables directly to
NHS hospitals and Trusts.
■ Services Division – where the Company
delivers to either LSP customers or on
behalf of other organisations whose end
customer is either the NHS or other
clinical organisations.
Both are supported by a central
development and support capability, which
provides our people with both logistical and
technical support. 
Revenue
The majority of revenues continued to be
generated by our Services Division with
revenue in the year ended 31 May 2007 of
£10m. The loss of business from the
withdrawal by Accenture from the National
Programme had a major impact as
previously it represented over 40% of our
annual revenue. We rapidly diversified to
secure work with new clients in order to
successfully mitigate a proportion of this loss
of revenue, and consequently Services
revenues increased to £5.3m in the second
half of the year compared to £4.7m in the
first six months.
Although our Product revenues were flat
year on year, this principally related to the
timing of product deployments. We have
secured a major new contract for the
deployment of our MedWay EPR system to
the Isle of Man and anticipate further growth
in our Product revenues in future years and
envisage these to represent an increasing
proportion of total revenues.
Gross margins
Gross profit margins were slightly reduced to
47% (2006: 49%) due to downward price
pressures in the Services Division.
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xxxx xxxxxxxx. financial review continued  14 | annual report 2007
Operating costs
Year ended 31 May 2007 2006
£m £m
Selling and marketing 
costs 0.5 0.7
Research and 
development costs 1.0 1.0
Administration and 
general overheads 4.3 6.1
Total operating costs 5.8 7.8
Administration and general overhead costs in
the year of £4.3m (2006: £6.1m) included
£0.1m (2006: £0.2m) in respect of costs
expensed as a result of redundancies. 
Overall, total operating costs in the year
decreased by £2.0m in comparison to the
prior year. This significant cost reduction
enabled us to achieve higher profit from
operations of £0.6m (2006: £0.1m) despite
reduced revenues. The cost containment
principally related to non fee-earning
headcount reduction and the removal of 
non-core expenditure.
Net financial income
Year ended 31 May 2007 2006
£m £m
Interest receivable on 
customer contracts 0.3 0.3
Interest payable on 
financing loans taken out 
to fund fixed assets on 
customer contracts (0.1) (0.1)
Net interest on customer 
contract assets 0.2 0.2
Net bank interest 0.5 0.4
Net financial income 0.7 0.6
Interest receivable on customer contracts
relates mainly to our long-term contracts
where an element of the charge includes a
recovery for finance costs. Offsetting this
income is the interest on financing loans
taken out to fund the contract assets.
Net bank interest has increased by £0.1m
principally due to interest generated by our
cash balance.
Taxation
In the year ended 31 May 2006 a tax credit
£0.4m was recognised principally due to the
availability of schedule 23 tax credits. 
No such credit was available in the current
year and thus a tax charge of £0.4m has
been incurred.
At the end of the year the Company had
£0.9m of tax value losses recognised on the
balance sheet as a deferred tax asset to
offset against future Corporation Tax liabilities
(2006: £1.2m). Further analysis in respect 
of taxation is given in Note 7 to the 
financial statements.
Dividends
Interim dividends of 0.12p per share were
declared and paid during the year. The Board
proposes a final dividend of 0.24p per share
bringing the total for the year to 0.36p 
per share.
Earnings per share
Year ended 31 May 2007 2006
Basic earnings per share 1.09p 1.27p
Diluted earnings per share 1.08p 1.25p
Although profit before tax grew year on year
by £0.6m, the basic earnings per share
declined compared to 2006 as in the prior
year System C benefited from a net tax
credit of £0.4m due to the availability of
research and development tax credits and
Schedule 23 tax credits.  annual report 2007 | 15
Cash flow
Year ended 31 May 2007 2006
£m £m
Cash generated from 
operations 2.1 0.5
Net financial income 0.7 0.6
Capital expenditure (0.5) (0.2)
Net cash inflow before 
financing activities 2.3 0.9
Financing
1
(1.3) 7.4
Net cash inflow 1.0 8.3
Note 1: Net float proceeds of £7.4m received in 2006.
The Company has continued to generate 
strong cash flow with high cash conversion
ratios being maintained. 
Balance sheet
As at 31 May 2007 2006
£m £m
Non-current assets 
excluding long term 
portion of accrued income 1.9 2.4
Trade receivables – net 2.9 2.6
Accrued income – 
Current and non-current 4.0 4.4
Other receivables 0.3 0.4
Cash 10.69.6
Liabilities (excluding 
borrowings and provisions) (3.2) (2.5)
Borrowings and provisions (0.6) (1.6)
Net assets 15.9 15.3
Note: The balance sheet above is simplified for the
purposes of highlighting key areas. Please refer to the
financial statements for a full analysis.
The Company has a strong balance sheet
with net assets of over £15.9m including a
cash balance of £10.6m. 
Trade receivables increased as activities
began to accelerate in the latter part of the
year. The balance sheet includes total
accrued income of £4.0m which represents
a mixture of Services income in May (which
is invoiced after the year end) and accrued
revenue in respect of long-term contracts.
Revenue accrued reflects the value of work
delivered by the Company and is then
invoiced as a monthly payment over the life
of the contract in accordance with pre-
agreed terms.
Liabilities (excluding borrowings and
provisions) increased marginally due
principally to an increase in the tax and VAT
liability (as revenues increased in the latter
months of the year), as well as a rise in
deferred income. 
Borrowings and provisions decreased
principally as a result of the capital loan
repayments made in the year.
Andrew Coll
Finance Director
11 September 2007 16 | annual report 2007
corporate responsibility statement
 People
System C is a business based on people,
from the teams that design and deliver our
products and services to the patients that
ultimately benefit from them. We place a very
high priority on the impact that we have as a
company on our staff and on the healthcare
customers and communities that we serve,
both directly and indirectly.
Employee recruitment and retention 
We recognise that our success is founded
upon the commitment, dedication and
expertise of our employees. 
Our employment policy focuses on recruiting
and retaining high-calibre candidates who
have the appropriate skills to complement
our organisational culture and values. It is
essential for all our staff to have a real affinity
with the requirements of the modern NHS.
We understand that to achieve the most
from our employees they must receive the
best support, encouragement and
supportive environment possible. Personal
development and employee well-being are of
paramount importance to the Company.
System C operates a comprehensive system
of staff development and appraisal and this
process is intended to benefit both the
individual and the organisation. This ensures
that employee contributions and
performance are measured, recognised and
followed up with appropriate development
and career advancement. 
We have implemented a dedicated training
and development strategy to benefit all our
staff. In addition, we have a number of 
‘well-being’ and knowledge sharing initiatives
amongst teams and companys from across
the organisation to facilitate well motivated
and well informed teams of people and a
supportive environment. This year System C
was accredited once again under the
Investors in People (“IiP”) scheme, providing
external recognition for our commitment to
training and development. On presenting his
report, the IiP auditor commented “in all
honesty when I meet a team of people who
are as loyal and interesting as those I met
and talked to at System C over the past two
days, my job becomes easy and fun.”
Equal opportunities
We are committed to providing equal
opportunities for all employees and
applicants for employment, and to promote
an employment environment that is free from
discrimination and harassment. 
Employee equity participation
We believe in the principle of employee
equity participation, subject to the relevant
share dealing guidelines and rules. A number
of employees have shareholdings in 
System C, either directly or indirectly through
share options and, since the flotation,
through the Sharesave Scheme. 
Employee communication and
consultation
We are committed to providing timely,
appropriate and accurate communications to
our staff on an equitable basis. Several
initiatives are in place to facilitate information
sharing and communication including
internal events, newsletters and bulletins and
employee satisfaction surveys. annual report 2007 | 17
Health and safety
We are committed to ensuring the highest
standards of health and safety for all our
employees. The Company recognises its
duty to comply with the Health and Safety at
Work Act 1974 and the Management of
Health and Safety at Work Regulations
1999. Employees are made aware of their
responsibilities in terms of Health and Safety
and we work together to ensure a safe and
productive environment is available to
employees, whether based in one of 
System C’s offices, travelling between sites,
working at customer locations or elsewhere.
Quality Management System
At the heart of our business is a commitment to
quality in every aspect of our operations. We
work to fully certified quality standards, including
standards for software design and development,
documentation, project management,
implementation, training and support. The
working processes surrounding these standards
are fully documented and published on the
Company intranet and a full-time Quality
Manager ensures our adherence to Quality
Standards. The Company has enterprise-wide
accreditation to ISO 9001 and TickIT standards
and System C’ s Training Academy holds the
Institute of IT Trainers accreditation.
Environmental 
Whilst our activities have a low impact on
the environment, we believe that operating in
a socially and environmentally conscious
manner is an important part of the way we
do business. 
In order to conserve resources and reduce
the impact of the Company’s operations on
its surroundings, System C adheres to an
environmental policy which is regularly
updated and communicated to all
employees during the induction process.
Key areas of this policy are:
■ To store waste safely and securely and
ensure it is handled by an authorised agent.
■ To recycle resources where possible and
ensure that recycling facilities are made
available to all office-based staff. Indeed,
a key product that we provide is the
introduction of paperless records in
hospitals, a feature which of course
lessens the need for recycling.
■ To seek to meet and exceed the
requirements of ISO 14001.
Social and ethical
We have always encouraged an ethos of
giving, not least since we operate in an
industry dedicated to caring, and we employ
people who embrace this philosophy. Many
individuals within the organisation undertake
and participate in charity events for a range
of worthwhile causes, often encouraged and
supported financially by System C.
Investors 
Following the admission to AIM in June
2005, we have continued to implement
procedures that assist in the adoption of
best practice in terms of reporting and
communication. Our website has been
enhanced to include a section devoted to
investors and this will be continually
updated. The Company also adopted IFRS a
year earlier than required to facilitate a
greater comparability of our results.
Suppliers
Our work often involves a great degree of
interaction with other suppliers and partners
and we value a positive working relationship.
Our policy is to pay suppliers promptly and to
seek to foster constructive, transparent and
preferably long-term commercial relationships.
Dr Ian Denley Jane Conner
Chief Executive Officer Company Secretary
11 September 2007 11 September 2007 18 | annual report 2007
board of directors
 Jim Horsburgh
Non-Executive Chairman
Aged 55
Jim has been with System C since
2000. He was previously Senior Vice
President of Visio Corporation which
was listed on NASDAQ and he
played a key role in its sale to
Microsoft for approximately $1.5
billion in 2000. Prior to joining Visio,
Jim was Managing Director at the
European start up Central Point
Software, which was sold to
Symantec in 1993. Before that he
was responsible for International
Marketing and Business
Development at Lotus Development.
Jim is responsible for leading the
Board and ensuring its effectiveness
and moved to the role of 
Non-Executive Chairman on 
1 September 2007.
Dr Ian Denley
Chief Executive Officer
Aged 43
Ian has been with System C since
1997. Prior to taking on his current
role as Chief Executive Officer, Ian
worked as Director of Development,
where he was responsible for the
strategic direction of the MedWay
product range, and latterly as
Director of Operations where he was
responsible for the Company’s
implementation and customer
support services. Ian was appointed
Chief Executive Officer in 2003, and
since then has overseen the
Company’s expansion into the
professional services market, its
listing on AIM, and its continued
investment in healthcare IT products.
Ian is now leading the Company’s
M&A strategy. He is a member of the
Intellect Healthcare Council, and has
a PhD in Human Computer
Interaction. Ian is responsible for the
strategic and operational
management of the business.
Markus Bolton
Sales and Strategy Director
Aged 50
Markus is one of the UK's leading
specialists in the development and
delivery of clinically focused,
enterprise-wide patient management
systems for the NHS. He is the
original architect of the MedWay
Electronic Patient Record system,
has published numerous papers and
articles on healthcare informatics
and has advised Government on
NHS IT issues. Markus founded
System C in 1983 and it has
become a UK leader in the
development and implementation of
healthcare IT solutions.
At System C, Markus is responsible
for sales strategy and for developing
healthcare market opportunities. annual report 2007 | 19
Andrew Coll
Finance Director
Aged 37
Andrew qualified as a 
chartered accountant with
PricewaterhouseCoopers in 1996
before moving into a senior finance
position in Cable & Wireless PLC in
the UK. He was seconded to
undertake overseas strategic finance
projects in Hong Kong and Australia.
Immediately prior to joining System C
he was the Chief Operating Officer of
the Education T echnology Division of
Enterprise PLC, where he held
responsibility for commercial and
financial matters. Andrew joined
System C as Finance Director in
February 2006. Since then he has led
on a number of projects including the
transition from UK GAAP to reporting
under IFRS, the realignment of the
Company’ s cost base, as well as on
a range of commercial negotiations.
Andrew works closely with Ian and
the Board in determining the M&A
strategy and led the execution of the
IQ Systems acquisition. 
Thomas Chambers 
Non-Executive Director N A R
Aged 46
Thomas joined System C as a 
Non-Executive Director in February
2005. He is Chief Financial Officer for
Symbian Limited (provider of operating
systems for advanced mobile phones)
and up to February 2007, was
Chairman of Swedish based UIQ
T echnology AB. Prior to Symbian,
Thomas was the Chief Financial
Officer of First T elecom Group PLC,
arranging its sale to Atlantic T elecom
Group PLC in 2000. Thomas was the
Chief Financial Officer of Robert
Walters PLC through its listing on the
London Stock Exchange in 1996 and
its acquisition in 1998 by the US
NASDAQ listed StaffMark Inc. and
spent six years in the Corporate
Finance Department of Dresdner
Kleinwort Benson Limited. He is a
Fellow of the Institute of Chartered
Accountants and an Associate of The
Association of Corporate Treasurers.
Dr Christopher McLaren
Non-Executive Director N A R
Aged 73
Christopher has been on the Board of
System C since 1988. Christopher
served as Deputy Chairman 
of the Board of System C until 
1 September 2007, when our Senior
Independent Director John Forrest
was appointed to the role. He has an
MA from Cambridge University with
first class honours in Mechanical
Sciences and is a barrister at law. He
was a business consultant for many
years and has wide commercial
experience. He was Chairman of the
Board of Southbank University during
its formative years of 1989 - 1999,
Chancellor from 1992 - 1999, and
was Treasurer of the English-Speaking
Union from 1996 - 2002. 
Jane Conner
Company Secretary and Director of
Human and Corporate Resources*
Aged 44
Jane joined System C in 1985. She
is responsible for developing and
implementing the Company’s human
resources strategy. She oversees all
employee relations, including
recruitment and retention. She is also
responsible for Health and Safety,
office management and oversees the
General Administration Department.
She has held the post of Company
Secretary since 1992.
*Jane is not a statutory board
director of the Company.
Note:
N = Nominations Committee
A = Audit Committee
R = Remuneration Committee
Dr John Forrest
Non-Executive Director N A R
Aged 64
John joined System C as a 
Non-Executive Director in February
2005. He graduated with an MA
from Cambridge University and a
DPhil from Oxford University. In 1984
he joined Marconi Defence Systems
as Technical Director and later
became Director of Engineering at
the Independent Broadcasting
Authority. He led the privatisation to
create the communications company
NTL, becoming its first Chief
Executive Officer. In 1996 he joined
the venture capital company, 3i PLC, 
and served on the board and its
associated committees until 2004.
John is Deputy Chairman of Surrey
Satellite Technology Ltd and
Omniglobe Networks Ltd (Canada)
as well as Pro-Chancellor of the
University of Surrey. John is our
Senior Independent Director, and
was appointed to the role of 
Deputy Chairman to the Board on 
1 September 2007.
3
2
7
5
1 8
4
6
1 Thomas Chambers
2 Andrew Coll
3 Jim Horsburgh
4 Markus Bolton
5 Dr Christopher McLaren
6 Jane Conner
7 Dr John Forrest
8 Dr Ian Denley 20 | annual report 2007
directors’ report
 The Directors have pleasure in presenting their Annual Report and the audited financial statements of the Company for the
year ended 31 May 2007. 
System C Healthcare PLC is a company incorporated and registered in England and Wales, whose shares are listed on AIM, 
a market of that name operated by the London Stock Exchange PLC. 
These financial statements are presented in Sterling, the functional currency of the Company.
Principal activities, review of business and future developments
The Company’s sole activity during the year was the design, development and implementation of computer hardware and
software. There has been no change in the principal activity of the Company since the year end.
The Chairman’s Statement, the Chief Executive Officer’s Review and the Financial Review give further information regarding the
performance of the Company during the year ended 31 May 2007 and the future prospects of the business.
International Financial Reporting Standards
The Company has adopted International Financial Reporting Standards (“IFRS”) for the first time in these financial statements.
The comparatives for the year ended 31 May 2006 which were previously reported under UK Generally Accepted Accounting
Practice (“UK GAAP”) have been restated under IFRS. Reconciliations of the results for the year ended 31 May 2006 and the
net assets as at 31 May 2006 are given in Note 24. The adoption of IFRS has resulted in a number of adjustments to the
previously reported results and net assets and further details of these are also set out in Note 24.
Dividends
Interim dividends of 0.12p per ordinary share were declared and paid in the year (2006: 0.11p per ordinary share). 
The Directors have recommended a final dividend of 0.24p per ordinary share (2006: 0.22p per ordinary share). The Company’s
accounting policy for dividends is given in Note 1(n).
Directors and their interests
The Directors of the Company who served during the year ended 31 May 2007, all of whom have been Directors for the whole
of the year ended on that date unless otherwise stated, are listed below:
Jim Horsburgh
Dr Ian Denley
Markus Bolton
Andrew Coll 
Dr Christopher McLaren
Dr John Forrest
Thomas Chambers
Details of the Directors’ interests in the share capital and share options of the Company are given in the Directors’
Remuneration Report. annual report 2007 | 21
Research and development
The Board considers that the Company’s research and development activity plays an important role in the operational and
financial success of the business.
The Company continues to commit resources to researching potential improvements in Electronic Patient Record systems.
Ongoing work includes improvements to patient tracking, paperless procedures and practices, and patient safety.
System C has invested in the ongoing development of its MedWay software, utilising the skills of qualified clinicians and software
developers. Expenditure on research and development is accounted for as stated in Note 1(k) to the financial statements. 
The amounts incurred on research and development expenditure are disclosed in Note 6 to the financial statements.
Creditor payment policy
The Company has agreed a variety of payment terms with its suppliers. It is, and will remain, the policy of the Company that
payments to a supplier are made in accordance with the general conditions of purchase agreed with the supplier, provided the
supplier complies materially with all relevant terms and conditions and presents invoices on a timely basis.
The average creditor payment period for the Company during the year ended 31 May 2007 was 39 days (2006: 38 days).
Financial risk management and financial instruments
The Company’s policies and strategies in relation to financial risk and financial instruments are explained in Note 16 to the
financial statements. 
Accounting policies in respect of financial instruments are detailed in Note 1(o) to the financial statements.
Share capital and share issues
Details of the share capital of the Company and shares issued during the year are given in Note 17 to the financial statements.
Employees, health, safety and environment
These areas are discussed in detail in the Corporate Responsibility Statement.
Political and charitable donations
The Company made no political donations during the year (2006: £nil). 
Charitable donations amounting to £8,128 were made during the year (2006: £7,011).
Post balance sheet events
The Company acquired the entire issued share capital of IQ Systems after the balance sheet date. Details of this and other
post balance sheet events are given in Note 23 to the financial statements. 22 | annual report 2007
directors’ report continued  Substantial interests in shares
As at 31 August 2007, the Company had been notified of the following holdings of 3 per cent or more in its ordinary shares in
accordance with sections 198 to 208 of the Companies Act 1985:
Name of shareholder Percentage of Issue Share Capital
BlackRock Investment Management 8.52
Guy Hands
1
8.46
Liontrust Asset Management PLC 6.98
AXA Framlington Investment Management Ltd 6.15
Schroder Investment Management 5.90
Banque Privée Edmond de Rothschild SA 5.37
Markus Bolton
2
4.62
Artemis Investment Management Ltd 4.11
Polar Capital Partners Ltd 3.79
Gartmore Investment Management PLC 3.55
New Star Asset Management Limited 3.26
Note 1 : includes 3,248,334 shares held by spouse
Note 2 : includes 321,557 shares held by spouse
As at the date referred to above, the Company is not aware of any person or entity that, directly or indirectly, jointly or severally,
will or could exercise control of the Company.
Going concern
After making appropriate enquiries, the Directors believe that the Company has adequate resources to continue in operational
existence for the foreseeable future. Consequently the Directors believe that it is appropriate for the Company’s financial
statements to continue to be prepared on the going concern basis.
Annual General Meeting
The notice convening the Annual General Meeting to be held at Brenchley House, Week Street, Maidstone, Kent, ME14 1RF at
11:00am on 7 November 2007, together with an explanation of the resolutions to be proposed at the meeting, is contained in
a separate circular to shareholders.
Auditors
A resolution to reappoint PricewaterhouseCoopers LLP as auditors will be proposed at the Annual General Meeting.
By Order of the Board
Jane Conner
Company Secretary
11 September 2007 annual report 2007 | 23
corporate governance statement
 Principles of good governance
As a company quoted on AIM, System C is not required to comply with the Combined Code on Corporate Governance 
(the “Code”). However, following the admission of its shares to AIM, the Company has adopted many of the best practice
provisions contained in the Code and continues to make considerable progress in improving its procedures in this respect.
The Board strongly believes in providing a framework for establishing good corporate governance and accountability and has
identified the policies and procedures described below to support this approach.
The Board
The Board has ultimate responsibility and accountability for the Company’s operations.
During the year the Board comprised the Chairman, the Chief Executive Officer, the Sales and Strategy Director, the Finance
Director and three Non-Executive Directors. 
During the year 14 Board meetings, 2 Audit Committee meetings, 3 Remuneration Committee meetings and 2 Nomination
Committee meetings were held. The Directors attended these meetings as follows:
Board Audit Remuneration Nomination
Director meetings Committee Committee Committee
Jim Horsburgh 14 - - -
Dr Ian Denley 14 - - -
Markus Bolton 11 - - -
Andrew Coll 13 - - -
Dr Christopher McLaren 14 2 3 2
Dr John Forrest 13 2 3 2
Thomas Chambers 11 2 3 2
The Board believes its current structure is appropriate for the scale of the business and enables the Company to be 
managed efficiently.
The specific responsibilities reserved to the Board include, but are not limited to: 
■ Setting strategy and approving an annual budget and medium-term projections; 
■ Reviewing operational and financial performance; 
■ Approving any acquisitions, divestments and material capital expenditure; 
■ Reviewing the Company’s systems of financial control and risk management; 
■ Ensuring that appropriate management development and succession plans are in place; 
■ Reviewing the environmental, health and safety performance of the Company; 
■ Approving appointments to the Board and the Company Secretary; 
■ Approving policies relating to Directors’ remuneration and the severance of director’s contracts; and 
■ Ensuring that an appropriate and constructive dialogue takes place with shareholders.
The Board has a procedure through which the Directors are able to take independent advice at the Company’s expense in the
furtherance of their responsibilities. 24 | annual report 2007
The Directors also have access to the advice and services of the Company Secretary. The Company Secretary is responsible
for ensuring that Board procedures are followed and that applicable rules and regulations are complied with.
The Company has adopted a share dealing code for Directors and senior employees on the same terms as the Model Code
appended to the Listing Rules of the UK Listing Authority.
Chairman, Chief Executive Officer and independent Non-Executive Directors
Different individuals hold the posts of Chairman and Chief Executive Officer and there is a clear division of responsibilities.
The Chairman is responsible for leading the Board and ensuring its effectiveness.
The Chief Executive Officer is responsible for running the business and for ensuring that accurate, timely and clear information
is presented at the Board meetings or when otherwise appropriate.
The role of Chairman was an executive role throughout the year ended 31 May 2007 and up until 31 August 2007, which was
a departure from the Code in terms of the independence criteria outlined. As mentioned in the annual reports of previous years
the role of an executive chairman was deemed appropriate for a period following the admission of the Company’s ordinary
shares to AIM. The requirement for this role is no longer considered necessary and following recommendations from the
Nominations Committee Jim Horsburgh assumed the role of a non-executive Chairman on 1 September 2007.
The Board is balanced by an appropriate non-executive element. All of the Non-Executive Directors, save for Dr Christopher
McLaren by virtue of his significant interest in the ordinary shares and his longstanding involvement with the Company, are
considered by the Board to be independent and have no relationships interfering with their independent judgement. 
The share options held by Jim Horsburgh and the additional performance related fees in relation to Dr John Forrest and
Thomas Chambers referred to on page 29 are not in the Board’s view of a nature or scale to impact their independence.
Professional development
The Chairman is responsible for the process to ensure that Directors keep their skills and knowledge up to date and to
encourage their professional development. The Company ensures that adequate time and financial resources are available for
Directors to attend appropriate training. New Directors are encouraged to participate in the Company’s induction programme
and to meet senior managers and staff. In addition, all Directors are encouraged to attend Company events and take a
proactive role in informing themselves about the Company through a variety of means, including the intranet, newsletters, 
site visits, company events and attendance at appropriate stakeholder meetings.
Relations with shareholders
The Chairman, Chief Executive Officer and Finance Director are the principal points of contact for investors, analysts, fund
managers, media and other interested parties. Access is available to the Non-Executive Directors if this is required. 
Meetings with analysts and institutional investors are held following the interim and preliminary results announcements.
The Board are kept appraised about shareholder relations and have full access to reports from the Company’s nominated
advisor, Collins Stewart, and financial public relations advisors, Maitland Consultancy.
corporate governance statement continued  annual report 2007 | 25
Board Committees
The Board has established three committees to deal with matters in accordance with written terms of reference which are
available on request from the Company Secretary. They are the Audit Committee, a Remuneration Committee and a
Nomination Committee. 
A majority of the members of the Committees are independent Non-Executive Directors.
Audit Committee
The Audit Committee is chaired by Thomas Chambers and also comprises Dr Christopher McLaren and Dr John Forrest.
No members of the Committee have any links with System C’s external auditors.
The Audit Committee formally meets two times per year and otherwise as required. The Audit Committee considers all matters
relating to financial controls and reporting, internal and external audits, the scope and results of the audits, the independence
and objectivity of the auditors and also keeps under review the effectiveness of the Company’s controls and risk management.
The ultimate responsibility for reviewing and approving the annual report and financial statements and interim statements
remains with the Board. The Chairman, Chief Executive Officer, other Directors and representatives from the finance function
may attend and speak at meetings of the Audit Committee.
Details of the amounts paid to the external auditors during the year for audit and other services are set out in Note 6 to the
financial statements.
Remuneration Committee
The Remuneration Committee is chaired by Dr Christopher McLaren and also comprises Thomas Chambers and Dr John Forrest.
The Remuneration Committee meets formally at least twice each year and otherwise as required.
The Remuneration Committee considers all material elements of remuneration policy, remuneration and incentives of executive
Directors and senior management with reference to independent remuneration research and professional advice in accordance
with the Combined Code.
The Remuneration Committee is responsible for setting any performance criteria in relation to the exercise of options granted
to the Executive Directors as referred to in the Directors’ Remuneration Report.
No Director is permitted to participate in discussions or decisions concerning his own remuneration, and the remuneration 
of members of the Remuneration Committee shall be determined in accordance with good practice by the remaining 
Board members.
Details of Directors' service contracts are provided in the Directors’ Remuneration Report. 26 | annual report 2007
Nomination Committee
The Nomination Committee is chaired by Dr John Forrest and also comprises Dr Christopher McLaren and Thomas Chambers.
The Nomination Committee meets formally twice a year and otherwise as required. It has responsibility for considering the size,
structure and composition of the Board, the retirement and appointment of Directors and will make appropriate
recommendations to the Board in relation to these matters.
Potential candidates to the Board are interviewed either by the Nomination Committee or a panel appointed by that
Committee. An appointment requires final approval by the Board prior to an offer being forwarded.
Internal control
In accordance with the guidance of the Turnbull Committee the Board accepts responsibility for the Company’s system of
internal control; sets appropriate policies on internal control; seeks regular assurance that enables it to satisfy itself that the
system is functioning effectively; and ensures that the system of internal control is effective in managing risks in the manner
which it has approved.
The Directors continue to review the effectiveness of the Company’s system of financial and non-financial controls, including
operational and compliance controls, risk management and the Company’s high level internal control arrangements. These
reviews include an assessment of internal controls and, in particular, internal financial controls.
The Board views the careful management of risk as a key management activity. Managing business risk to deliver opportunities
is a key element of all activities. These business risks, which may be strategic, operational, reputational, financial or
environmental, should be understood and visible.
The Board approves the Company’s annual budget which is prepared in the context of the Board approved business plan. 
The Board receives monthly financial reports which assess performance in comparison with the annual budget and in relation
to periodic re-forecasts. Key performance indicators are regularly reviewed at Board level and by senior managers responsible
for key areas of the business.
The Company does not currently have an internal audit function however the Board will consider the need to create one as the
business grows. 
corporate governance statement continued  annual report 2007 | 27
directors’ remuneration report
 As a Company quoted on AIM, System C is not required to comply with the Directors’ Remuneration Report Regulations 2002.
Notwithstanding this fact, the Board has adopted many of the best practice provisions set out in the Regulations and
accordingly has established a number of the policies and procedures referred to in this report.
Remuneration policy
The Remuneration Committee makes recommendations to the Board on the executive remuneration policy and determines
specific remuneration packages for each of the Executive Directors with the objective of providing total remuneration packages
that attract, retain and motivate Executive Directors of the appropriate calibre. This policy intends to reward excellent
performance, be commercially competitive and also aims to align the interests of the executives with those of shareholders to
create value.
This report sets out the Company’s policy on executive remuneration. The policy may change in future years as it is important
that it should retain flexibility in view of possible changes in the business environment and in remuneration practice. The policy
should also allow for any special arrangements which may be necessary in the future in order to recruit a director of
appropriate calibre. Any changes in the remuneration policy in the future will be described in subsequent annual reports and
will be subject to shareholder approval.
The principal elements of the executive remuneration package are detailed below:
Basic salary and benefits
Basic salaries and benefits are, with the help of external consultants where appropriate, based on an estimate of an
appropriate market level for similar levels of responsibility and achievement in comparable companies. Salaries and benefits are
reviewed annually at the start of each financial year or, if earlier, when an individual changes position or responsibility.
Performance related bonus arrangements
Bonus arrangements are determined by the Remuneration Committee. Bonus entitlements are currently a maximum of 50 per
cent of basic salary for Executive Directors and are payable on the basis of a sliding scale towards achievement of defined
financial targets. Targets are set on the basis of advancing total shareholder value.
In addition, the Committee has the discretion to make ad hoc bonus payments to reflect special circumstances or 
exceptional performance.
The Company operates a number of share option schemes established to provide a continuing incentive for Executive
Directors and employees, to align their interests with those of the shareholders, and to ensure that the Company will attract
and retain Directors and other executives of the highest calibre.
Further information on the above plans is given in Note 18 to the financial statements.
Pensions
The Company provides access to a stakeholder pension scheme. All staff are eligible to join the scheme upon commencing
employment and the Company makes matching contributions of up to 6 per cent of pensionable pay. In relation to certain of the
Executive Directors, the Company makes an equivalent maximum 6 per cent contribution into their private pension schemes. 28 | annual report 2007
directors’ remuneration report continued  Directors’ service contracts
(a) Executive Directors
The Executive Directors have entered into service agreements under which they are to remain employed on an ongoing basis,
summaries of which are set out below:
Jim Horsburgh
Until 1 September 2007, Jim Horsburgh was employed by the Company as Executive Chairman on a part-time basis 
(three days per week) under a service agreement dated 17 October 2001, as amended by a deed of variation dated 
3 November 2004. The service agreement provides the Company with the right to place Jim Horsburgh on garden leave, to
pay him basic salary in lieu of notice and to summarily dismiss him in a number of circumstances (e.g. persistent breach of the
service agreement, bankruptcy, gross misconduct etc). Jim Horsburgh’s annual salary as at 31 May 2007 was £103,500. 
As recently announced, from 1 September 2007, Jim moved into the role of Non-Executive Chairman under a Service
Agreement dated 1 September 2007 which stipulates a minimum notice period of three months.
Dr Ian Denley
Dr Ian Denley is employed by the Company under a service agreement dated 20 October 2003, although his period of
continuous employment with the Company began on 2 January 1997. Under the terms of the service agreement, 
Dr Ian Denley’s employment is terminable by either party giving to the other not less than six months’ prior written notice. The
service agreement provides the Company with the right to place Dr Ian Denley on garden leave, to pay him basic salary in lieu
of notice and to summarily dismiss him in a number of circumstances as mentioned above. Dr Ian Denley’s annual salary as at
31 May 2007 was £134,500.
Markus Bolton
Markus Bolton is employed by the Company under a service agreement dated 17 October 2001, although his period of
continuous employment with the Company began on 1 September 1983. Under the terms of the service agreement,
Markus Bolton’s employment is terminable by either party giving to the other not less than 6 months’ prior written notice.
The service agreement provides the Company with the right to place Markus Bolton on garden leave, to pay him basic salary
in lieu of notice and to summarily dismiss him in a number of circumstances as mentioned above. Markus Bolton’s annual
salary as at 31 May 2007 was £134,500.
Andrew Coll
Andrew Coll is employed by the Company under a service agreement dated 6 February 2006. Under the terms of the service
agreement, Andrew Coll’s employment is terminable by either party giving to the other not less than 6 months’ prior written
notice. The service agreement provides the Company with the right to place Andrew on garden leave, to pay him basic salary
in lieu of notice and to summarily dismiss him in a number of circumstances as mentioned above. 
Andrew Coll’s annual salary as at 31 May 2007 was £114,000. annual report 2007 | 29
The service agreements of the Executive Directors also stipulate an automatic retirement age of 65 and provide for the
following additional benefits:
■ 25 or 30 days holiday;
■ Car allowance of between £7,200 and £9,000 per annum;
■ Company pension contributions of 6 per cent of eligible salary;
■ Membership of any share option scheme the Company operates;
■ PHI, life assurance and private individual/family medical insurance; and
■ Annual or discretionary bonuses as determined by the Remuneration Committee.
(b) Non-Executive Directors
The Non-Executive Directors have been appointed to the Company under letters of appointment which are in a similar format
and are dated 21 June 2005. Prior to this date the Non-Executive Directors did not serve the Company under the terms of a
formal written service agreement.
The letters, which are based on the ‘sample letter of non-executive director appointment’ set out in the Combined Code,
provide, in each case, that the Non-Executive Director’s time commitment to the Company is approximately one day per
month, although in practice more time than that is spent. Further, each of the Non-Executive Directors’ appointments is
terminable by either party giving to the other not less than three months’ prior written notice (subject to the Company having
the right to terminate the appointment in a range of circumstances, such as the material or persistent breach of the terms of
their appointment).
The fees paid to Non-Executive Directors are set at a level which will attract and retain individuals with the necessary
experience and ability to make a significant contribution to the Company’s affairs, and reflect the time demands of their 
Board duties.
Dr Christopher McLaren is entitled to receive fees of £20,700 per annum, whereas Thomas Chambers and Dr John Forrest are
each entitled to receive fees of £31,050 per annum. Further, Thomas Chambers and Dr John Forrest are entitled to additional
fees payable annually depending upon their performance and that of the Company for each of the three financial years ending
31 May 2008 up to a cumulative maximum for this three year period of three times their respective annual fee. 30 | annual report 2007
Directors’ interest in share options
Only the following Directors had an interest in share options over the ordinary shares of the Company during the financial year
ended 31 May 2007:
Granted
1 June during 31 May Exercise
2006 year 2007 Exercise period Price
Jim Horsburgh 540,000 - 540,000 23 Jun 2008 - 23 Jun 2015 54p
- 250,000 250,000 20 Sep 2009 - 19 Sep 2019 24.5p
540,000 250,000 790,000
Dr Ian Denley 410,000 - 410,000 23 Jun 2008 - 23 Jun 2015 54p
- 300,000 300,000 20 Sep 2009 - 19 Sep 2019 24.5p
410,000 300,000 710,000
Markus Bolton 360,000 - 360,000 23 Jun 2008 - 23 Jun 2015 54p
- 300,000 300,000 20 Sep 2009 -19 Sep 2019 24.5p
360,000 300,000 660,000
Andrew Coll 300,000 - 300,000 23 May 2009 - 23 May 2016 23.5p
- 100,000 100,000 20 Sep 2009 - 19 Sep 2019 24.5p
300,000 100,000 400,000
Total 1,610,000 950,000 2,560,000
There were no exercises or lapses of unexercised share options during the year ended 31 May 2007. 
There have been no changes in the interests of the Directors in the shares or the shares options of the Company since 
31 May 2007.
directors’ remuneration report continued  annual report 2007 | 31
Directors’ interests in shares
The Directors’ beneficial interest in the share capital of the Company at any point during the year ended 31 May 2007 was 
as follows:
1 June 2006 and 
Interest in ordinary shares 31 May 2007
Jim Horsburgh 300,000
Dr Ian Denley 435,626
Markus Bolton
1
4,130,994
Dr Christopher McLaren 2,116,387
Dr John Forrest 22,223
Thomas Chambers 22,223
7,027,453
Note 1: Beneficial interests include 321,557 ordinary shares held by spouse throughout the year
The following part of the Directors’ Remuneration Report contains audited information:
Directors’ emoluments
Year ended 31 May 2007 Year ended 31 May 2006
Salary Benefits 
and fees in kind Subtotal Pension Total Subtotal
1
Pension Total
Executive:
Jim Horsburgh 103,208 10,448 113,656 6,193 119,849 108,564 5,635 114,199
Dr Ian Denley 134,125 8,286 142,411 8,048 150,459 286,596 7,616 294,212
Markus Bolton 134,125 11,241 145,366 8,048 153,414 141,471 6,600 148,071
Andrew Coll 113,667 7,875 121,542 8,902 130,444 36,963 2,200 39,163
485,125 37,850 522,975 31,191 554,166 573,594 22,051 595,645
Non-Executive:
Dr Christopher McLaren 20,467 - 20,467 - 20,467 20,056 - 20,056
Dr John Forrest
2
30,963 - 30,963 - 30,963 30,000 - 30,000
Thomas Chambers 30,963 - 30,963 - 30,963 30,000 - 30,000
567,518 37,850 605,368 31,191 636,559 653,650 22,051 675,701
Note 1: Includes salary, fees, bonus and benefits in kind
Note 2: Fees are paid to Leparin Ltd, a company controlled by Dr John Forrest
No director waived any emoluments in respect of the year ended 31 May 2007 (2006: £nil).
At the year end there were four Directors to whom retirement benefits are accruing under defined contribution pension
schemes (2006: four). 32 | annual report 2007
statement of directors’ responsibilities in respect
 of the annual report and the financial statements
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law
and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have
prepared the financial statements in accordance with International Financial Reporting Standards (“IFRS”) as adopted by the
European Union. The financial statements are required by law to give a true and fair view of the state of affairs of the Company
and of its profit or loss for that period.
In preparing those financial statements, the Directors are required to:
■ select suitable accounting policies and then apply them consistently;
■ make judgements and estimates that are reasonable and prudent;
■ state that the financial statements comply with IFRS as adopted by the European Union; and
■ prepare the financial statements on the going concern basis, unless it is inappropriate to presume that the company will
continue in business. 
The Directors confirm that they have complied with the above requirements in preparing the financial statements.
The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the
financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act
1985. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
So far as each Director is aware, there is no relevant audit information of which the Company’s auditors are unaware. 
Each Director has taken all the steps that they ought to have taken as a Director in order to make themselves aware of any
relevant audit information and to establish that the Company’s auditors are aware of that information.
The Directors are responsible for the maintenance and integrity of the Company’s website and legislation in the United
Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
By Order of the Board
Jane Conner
Company Secretary
11 September 2007 annual report 2007 | 33
independent auditors’ report to the members
 of System C Healthcare PLC
We have audited the financial statements of System C Healthcare PLC for the year ended 31 May 2007 which comprise the
Income Statement, the Balance Sheet, the Statement of Changes in Shareholders’ Equity, the Cash Flow Statement and the
related notes. These financial statements have been prepared under the accounting policies set out therein.
Respective responsibilities of Directors and auditors
The Directors’ responsibilities for preparing the Annual Report and the financial statements in accordance with applicable law
and International Financial Reporting Standards (“IFRS”) as adopted by the European Union are set out in the Statement of
Directors’ Responsibilities.
Our responsibility is to audit the financial statements and the part of the Directors’ Remuneration Report marked as audited in
accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). 
This report, including the opinion, has been prepared for and only for the Company’s members as a body in accordance with
Section 235 of the Companies Act 1985 and for no other purpose. We do not, in giving this opinion, accept or assume
responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come
save where expressly agreed by our prior consent in writing.
We report to you our opinion as to whether the financial statements give a true and fair view and have been properly prepared
in accordance with the Companies Act 1985. We also report to you whether in our opinion the information given in the
Directors' Report is consistent with the financial statements. 
In addition we report to you if, in our opinion, the Company has not kept proper accounting records, if we have not received all
the information and explanations we require for our audit, or if information specified by law regarding directors’ remuneration
and other transactions is not disclosed.
We read other information contained in the Annual Report and consider whether it is consistent with the audited financial
statements. The other information comprises the Chairman’s Statement, the Chief Executive Officer’s Review, the Financial
Review, the Corporate Responsibility Statement, the Director’s Report, the Corporate Governance Statement and the unaudited
part of the Directors’ Remuneration Report. We consider the implications for our report if we become aware of any apparent
misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other
information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing
Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the
financial statements. It also includes an assessment of the significant estimates and judgements made by the Directors in the
preparation of the financial statements, and of whether the accounting policies are appropriate to Company’s circumstances,
consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in
order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material
misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall
adequacy of the presentation of information in the financial statements. 34 | annual report 2007
independent auditors’ report to the members
 of System C Healthcare PLC continued
Opinion
In our opinion:
■ the financial statements give a true and fair view, in accordance with IFRS as adopted by the European Union, of the state
of the Company’s affairs as at 31 May 2007 and of its profit and cash flows for the year then ended;
■ the financial statements have been properly prepared in accordance with the Companies Act 1985; and
■ the information given in the Directors' Report is consistent with the financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants and Registered Auditors
Gatwick
11 September 2007 annual report 2007 | 35
income statement
 Year Ended Year Ended
31 May 31 May
2007 2006
Note £ £
Revenue 1,2 13,473,135 16,080,264
Cost of sales (7,060,643) (8,145,932)
Gross proﬁt 6,412,492 7,934,332
Selling and marketing costs (486,898) (708,592)
Research and development costs (1,045,009) (1,000,378)
Administration and general overheads (4,257,437) (6,096,520)
Proﬁt from operations (Note 2) 623,148 128,842
Financial income 4 802,792 713,348
Financial expense 5 (92,401) (181,166)
Proﬁt before taxation 2,6 1,333,539 661,024
Taxation 7 (384,056) 411,262
Proﬁt for the financial year 949,483 1,072,286
Earnings per ordinary share Pence Pence
– Basic 8 1.09 1.27
– Diluted 8 1.08 1.25
The results above relate entirely to continuing operations. 36 | annual report 2007
balance sheet
 At 31 May At 31 May
2007 2006
Note £ £
ASSETS – Non-current assets
Property, plant and equipment 9 673,446 1,021,429
Intangible assets 10 350,549 161,332
Deferred tax asset 7 926,964 1,205,163
Trade and other receivables 11 773,502 1,503,328
2,724,461 3,891,252
Current assets
Trade and other receivables 11 6,491,741 5,952,038
Cash and cash equivalents 12 10,574,133 9,547,985
17,065,874 15,500,023
TOTAL ASSETS 19,790,335 19,391,275
LIABILITIES – Current liabilities
Trade and other payables 13 (3,153,151) (2,516,434)
Current tax liability 7 (92,209) -
Borrowings 14 (528,122) (992,366)
(3,773,482) (3,508,800)
Non-current liabilities
Borrowings 14 - (528,122)
Provisions 15 (102,340) (81,407)
(102,340) (609,529)
TOTAL LIABILITIES (3,875,822) (4,118,329)
NET ASSETS 15,914,513 15,272,946
SHAREHOLDERS' EQUITY
Share capital 17 894,810 892,765
Share premium account 9,757,163 9,731,885
Capital redemption reserve 19 3,127,023 3,127,023
Own shares held in trust 19 (1,235,381) (1,235,381)
Retained earnings 3,370,898 2,756,654
TOTAL EQUITY 15,914,513 15,272,946
The financial statements which comprise of the income statement, the balance sheet, the cashflow statement and related notes
were approved by the Board of Directors on 11 September 2007 and signed on its behalf by:
Dr Ian Denley
Chief Executive Officer annual report 2007 | 37
Attributable to equity shareholders’
Own
Share Capital shares
Share premium redemption held in Special Retained Total
capital account reserve trust reserve earnings equity
£££££££
As at 1 June 2005 414,684 - 134 - 1,308,496 511,624 2,234,938
Profit for the financial year ----- 1,072,286 1,072,286
Share-based payments charge ----- 74,667 74,667
Deferred tax ----- (114,954) (114,954)
Issue of new shares 478,081 ----- 478,081
Premium on 1p ordinary shares issued - 10,906,750 ---- 10,906,750
Issue costs - (1,354,461) ---- (1,354,461)
Conversion of £1 convertible 
participating preference shares - - 3,126,889 - - - 3,126,889
Premium arising on settlement of 
accrued dividend - 179,596 ---- 179,596
Employee benefits trust - - - (1,235,381) - - (1,235,381)
Release of special reserve ---- (1,308,496) 1,308,496 -
Dividends ----- (95,465) (95,465)
As at 31 May 2006 892,765 9,731,885 3,127,023 (1,235,381) - 2,756,654 15,272,946
Profit for the financial year ----- 949,483 949,483
Share-based payments credit ----- (52,580) (52,580)
Deferred tax ----- 13,648 13,648
Issue of new shares 2,045 ----- 2,045
Premium on issue of new shares - 25,278 ---- 25,278
Dividends ----- (296,307) (296,307)
As at 31 May 2007 894,810 9,757,163 3,127,023 (1,235,381) - 3,370,898 15,914,513
Further details in respect of share capital and reserves are given in Notes 17 and 19 to the financial statements.
statement of changes in shareholders’ equity
 38 | annual report 2007
Year ended Year ended
31 May 31 May
2007 2006
££
Cash ﬂows from operating activities
Cash generated from operations (see over page) 2,109,886 461,853
Financial expense (92,401) (169,046)
Income tax paid - (1,357)
Net cash generated by operating activities 2,017,485 291,450
Cash ﬂows from investing activities
Purchases of property, plant and equipment (227,116) (54,299)
Capitalised development costs (299,353) (102,011)
Financial income 796,482 716,010
Net cash generated from investing activities 270,013 559,700
Cash ﬂows from ﬁnancing activities
Repayment of borrowings (992,366) (933,163)
Issue of equity share capital 27,323 11,175,825
Issue costs - (1,354,461)
Payments to acquire own shares held in - (1,235,381)
Redemption of preference shares - (71,000)
Dividends paid (296,307) (95,465)
Net cash (used in)/generated from ﬁnancing activities (1,261,350) 7,486,355
Net increase in cash and cash equivalents 1,026,148 8,337,505
Cash and cash equivalents at beginning of year 9,547,985 1,210,480
Cash and cash equivalents at end of year 10,574,133 9,547,985
cash flow statement
 annual report 2007 | 39
Notes to the cash flow statement
Cash flows from operating activities
Year ended Year ended
31 May 31 May
2007 2006
££
Profit for the financial year 949,483 1,072,286
Taxation 384,056 (411,262)
Financial income (802,792) (713,348)
Financial expense 92,401 181,166
Profit from operations 623,148 128,842 
Share-based payments (credit)/charge (52,580) 74,667 
Depreciation of property plant and equipment 575,099 920,882 
Amortisation of intangible assets 110,136 115,242 
Loss on disposal of property plant and equipment - 854 
Decrease in trade and other receivables 196,433 38,424 
Increase/(decrease) in trade and other payables 636,717 (664,570)
Net movement on provisions 20,936 (152,488)
Cash generated from operations 2,109,886 461,853 40 | annual report 2007
notes to the financial statements
 1 Principal accounting policies
The principal accounting policies adopted in the preparation of these financial statements are set out below. Unless otherwise
stated, these policies have been applied to all years presented.
(a) Basis of preparation
The financial information for the year ended 31 May 2007 has been prepared in accordance with International Accounting
Standards (“IAS”) and International Financial Reporting Standards (“IFRS”) as adopted by the European Union (“EU”) and also
as issued by the International Accounting Standards Board, International Financial Reporting Interpretations Committee
(“IFRIC”) interpretations and with those parts of the Companies Act 1985 applicable to companies reporting under IFRS.
System C Healthcare PLC’s financial statements were prepared in accordance with UK Generally Accepted Accounting
Principles (“UK GAAP”) until 31 May 2006. In preparing the Company’s financial statements for the year ended 31 May 2007,
management has amended certain accounting and valuation methods previously applied in the UK GAAP financial statements
to comply with IFRS. The comparative figures in respect of the year ended 31 May 2006 have been restated to reflect these
adjustments, except as described in the accounting policies. Exemptions taken under IFRS 1 “First Time Adoption of
International Financial Reporting Standards” are set out in Note 24.
Reconciliations and descriptions of the effect of the transition from UK GAAP to IFRS on shareholders’ equity and the
Company’s income and cash flows are provided in Note 24.
The preparation of financial statements in conformity with generally accepted accounting principles requires the use of
estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on
management’s best knowledge of the amount, events or actions, the actual results ultimately may differ from those estimates.
(b) Standards, amendments and interpretations published by date of approval of these financial statements which
may be relevant but are not yet effective and have not been early adopted by the Company
IFRS 7 “Financial instruments: Disclosures”
(Effective for annual periods beginning on or after 1 January 2007)
IFRS 7 introduces new disclosures in respect of financial instruments. It requires the disclosure of information about exposure
to risks arising from financial instruments, including specified minimum disclosures about credit risk, liquidity risk and market
risk, including sensitivity to market risk. IFRS 7 replaces the disclosure requirements of IAS 32 and the Company is in the
process of assessing the impact of this standard.
IFRS 8 “Operating segments”
(Effective for annual periods beginning on or after 1 January 2009)
IFRS 8 requires identification and reporting of operating segments on the basis of internal reports that are regularly reviewed by
the Board in order to allocate resources to the segment and assess its performance. The impact of this new standard on the
Company is not expected to be material. annual report 2007 | 41
Amendment to IAS 1 “Presentation of financial statements capital disclosures”
(Effective for annual periods beginning on or after 1 January 2007)
This amendment to IAS 1 introduces new disclosures about the level of an entity’s capital and how it manages that capital. 
The Company is in the process of assessing the impact of this standard.
Amendment to IAS 23 “Borrowing costs”
(Effective for annual periods beginning on or after 1 January 2009)
This amendment removes the option in the existing standard relating to the option of immediately recognising as an expense
borrowing costs that relate to assets that take a substantial period of time to get ready for use or sale. Entities are therefore
required to capitalise such borrowing costs as part of the costs of such assets. The impact of this amendment is not expected
to be material to the Company.
IFRIC 10 “Interim financial reporting and impairment”
(Effective for annual periods beginning on or after 10 November 2006)
IFRIC 10 prohibits the impairment losses recognised in an interim period on goodwill and investments in equity instruments
and financial assets carried at cost to be reversed at a subsequent balance sheet date. The Company is currently assessing
the impact of this requirement.
IFRIC 11 “Company and treasury share transactions”
(Effective for annual periods beginning on or after 1 March 2007)
IFRIC 11 provides clarification in respect of share-based payment arrangements where an entity receives goods and services
as consideration for its own equity instruments. It also gives guidance on how to account for share-based payment
arrangements in a subsidiary that has an obligation to provide its employees with parent equity instruments for services it
receives from its employees. The Company is currently assessing the impact of this requirement.
(c) Revenue recognition
Revenue is measured at the fair value of consideration received or receivable and represents amounts receivable for goods and
services provided to third parties in the normal course of business during the period, net of value added tax and discounts and
results from the principal activity of the Company. 
Each element of revenue (described below) is recognised only when:
■ Delivery of goods or provision of services has occurred;
■ There are no significant vendor obligations remaining; and
■ Collection of the amount due from the customer is reasonably assured.
Revenue from the sale of software licences is recognised in the income statement as the system modules are installed.
Typically the sale will match the project implementation timescale in accordance with specified contract milestones.
Revenue from the related implementation is recognised in the income statement proportionally over the implementation period
as those services are provided.
Revenue from maintenance, support and other services is recognised over the contracted term of supply. 42 | annual report 2007
notes to the financial statements continued  Hardware revenue is recognised in line with, and approximates to, the depreciation charge on such assets, as capitalised
within property, plant and equipment and disclosed as contract assets.
Revenue from healthcare consultancy services is recognised when the service is delivered and approved by the client.
Revenue which has been recognised by the Company but has not been invoiced as at the period end is included within
accrued income.
Invoices raised in advance of the provision of goods/services to customers are recorded in the balance sheet as deferred
income and included within trade receivables. Such amounts are recognised in the income statement as those goods/services
are provided to the customer.
(d) Interest receivable on contracts
An element of the amounts invoiced to certain customers in respect of contracts to supply Electronic Patient Records (“EPR”)
systems and other ancillary items is disclosed within financial income. Such amounts are based on the Company’s net
investment in the contracts taking into account payments received from the customer to date.
(e) Employee benefits
Pension obligations
The Company operates a stakeholder pension scheme and the assets of the scheme are held separately from those of the
Company in an independently administered fund. In addition to this the Company contributes to the personal pension plans of
certain employees. The Company has no further obligations once the contributions have been paid.
The pension cost charge for the period is reflected in the income statement and represents contributions payable to the
defined contribution pension scheme plus amounts payable by the Company to the personal pension plans of certain
employees based on a percentage of basic salary.
Any shortfall or excess in the contributions payable by the Company in relation to the pension cost charge for the year are
included in accruals or prepayments as appropriate.
Profit sharing and bonus plans
The Company recognises a liability and an expense for bonuses/profit sharing only where there is a contractual obligation or
where there is a constructive obligation arising from past practice or other events that existed at the balance sheet date.
Termination benefits
Termination benefits are payable when employment is terminated by the Company before an individual’s normal retirement
date, or whenever an employee accepts voluntary redundancy in exchange for those benefits. The Company recognises
termination benefits when it is demonstrably committed to either: terminating the employment of current employees according
to a detailed formal plan without possibility for withdrawal; or providing termination benefits as a result of an offer made to
encourage voluntary redundancy. Benefits falling due more than one year after the balance sheet date are discounted to their
present value. annual report 2007 | 43
Share-based payments
The Company operates both equity settled and cash settled share option schemes.
For equity settled share options, the services received from employees are measured by reference to the fair value of the share
options. The fair value is calculated at grant date and recognised in the income statement, together with a corresponding increase
in shareholders’ equity, on a straight line basis over the vesting period, based on an estimate of the number of options that will
eventually vest. Vesting conditions, other than market conditions, are not taken into account when estimating the fair value. 
For cash settled arrangements, the services received from employees are measured at the fair value of the liability and
recognised in the income statement on a straight line basis over the vesting period. The fair value of the liability is measured at
each balance sheet date and at the date of settlement with changes in fair value recognised in the income statement. 
IFRS 2 “Share-based payment” has been applied to equity settled share-based payment arrangements granted after 
7 November 2002 that had not unconditionally vested with employees by the date of the Company’s transition to IFRS and to
all cash settled awards.
The proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share
premium when the options are exercised.
(f) Own shares held in trust
The Company’s shares owned by The System C Healthcare PLC Employee Benefits Trust are presented as a reduction of
shareholders’ equity.
(g) Cash and cash equivalents 
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments
with original maturities of three months or less, and bank overdrafts. 
Bank overdrafts or loans where there is no right of set-off are shown within borrowings in current or non-current liabilities on
the balance sheet as appropriate.
(h) Property, plant and equipment 
All property, plant and equipment (“PPE”) is shown at original cost less accumulated depreciation and any accumulated
impairment losses. 
Cost includes expenditure that is directly attributable to the acquisition of the items. 
Depreciation on assets is calculated using the straight-line method to allocate the cost of each asset less its residual value, if
any, over its estimated useful life, as follows: 
■ Leasehold improvements Over the term of lease 
■ Fixtures and fittings 15 per cent straight-line
■ Plant and equipment 25 per cent straight-line 
■ Computer equipment 25 per cent straight-line
■ Contract assets 25 per cent straight-line (included in cost of sales)
Assets utilised in arrangements similar to Private Finance Initiatives and similar contracts are included within property, plant and
equipment as the Company primarily bears the risks and rewards of any variation in profit/losses arising from such assets. 44 | annual report 2007
(i) Leases
Leases of property, plant and equipment where the Company has substantially all the risks and rewards of ownership are
classified as finance leases. Finance leases are capitalised at the lease’s inception at the lower of the fair value of the leased
asset and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance
expenses so as to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of
finance expenses, are included within borrowings. Property, plant and equipment acquired under finance leases is depreciated
over the shorter of the asset’s useful life and the lease term.
Leases where the lessor retains substantially all the risks and rewards of ownership are classified as operating leases.
Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement
on a straight-line basis over the period of the lease.
(j) Impairment of non-current assets
In accordance with IAS 36 “Impairment of assets” a review for impairment of non-current assets is carried out if events or
changes in circumstances indicate that the carrying amount of such an asset may not be recoverable. Impairment reviews
comprise a comparison of the carrying amount of the asset with its recoverable amount (the higher of net realisable value and
value in use). To the extent that the carrying amount exceeds the recoverable amount, the asset is impaired and an impairment
loss is recognised in the income statement.
(k) Intangible assets 
The Company accounts for its intangible assets in accordance with IAS 38 “Intangible assets”.
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring into use the
specific software. These costs are amortised over their estimated useful lives which typically do not exceed four years.
Costs associated with developing and maintaining computer software programmes are recognised as an expense in the
income statement as incurred.
Research expenditure is recognised as an expense in the income statement in the period in which it is incurred. 
Costs incurred on development projects (relating to the design and testing of new or improved software products) are
recognised as intangible assets from the point it is probable that the project will be a success, considering its commercial and
technological feasibility, and costs can be measured reliably. Software development costs primarily comprise employee costs
and are amortised over the expected period over which the Company is expected to benefit from the capitalised asset and
typically range between three and five years.
Development costs that have initially been recognised as an expense in the income statement (as IAS 38 criteria are not met),
but where subsequently the IAS 38 criteria are deemed to have been satisfied, are not then recognised as an asset in a
subsequent period.
notes to the financial statements continued  annual report 2007 | 45
(l) Taxation including deferred tax 
Corporation tax, where payable, is provided on taxable profits at the current rate.
Deferred tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities
and their carrying amounts for financial reporting purposes.
Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax
losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences,
and the carry-forward of unused tax assets and unused tax losses can be utilised. The carrying amount of deferred income tax
assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable
profit will be available to allow all or part of the deferred income tax asset to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
balance sheet date. Tax relating to items recognised directly in equity is recognised in equity and not in the income statement.
Deferred tax balances are not subject to discounting.
(m) Provisions
In accordance with IAS 37 “Provisions, contingent liabilities and contingent assets”, provisions for liabilities are recognised
when the Company has a present legal or constructive obligation as a result of past events, and it is considered more likely
than not that an outflow of resources will be required to settle that obligation, and the amount can be reliably estimated. 
The expense relating to any provision is presented in the income statement net of any reimbursement.
Provisions are measured at the present value of the directors’ best estimate of the expenditure required to settle the present
obligation at the balance sheet date and discounted where the effect is considered material.
(n) Dividend distributions
Interim dividends in respect of equity shares are recognised in the financial statements in the period in which they are paid.
Final dividends in respect of equity shares are recognised in the financial statements in the period that the dividends are
formally approved by the Company’s members.
In accordance with IAS 32 “Financial instruments: Presentation” dividends on non-equity shares are disclosed within financial
expense in the income statement. 46 | annual report 2007
(o) Financial instruments
Borrowings and borrowing costs
All borrowings are initially stated at the fair value of the consideration received after deduction of issue costs. Issue costs
together with other finance costs such as premiums on redemption are charged to the income statement over the term of the
borrowings and represent a constant proportion of the balance of capital repayments outstanding. Accrued finance costs
attributable to borrowings are included in accrued charges within current liabilities, unless the finance cost is only repayable on
redemption in which case the accrued finance costs are included within the carrying value of borrowings.
Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest
method less provision for impairment. A provision for impairment is established when there is objective evidence that the
Company will not be able to collect all amounts due according to the original terms of the receivables. Any changes in the
amount of the provision is recognised in the income statement during the year.
Trade payables
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective 
interest method.
(p) Share capital and share premium
Ordinary shares issued are shown as share capital at nominal value. The premium received on the issue of shares in excess of
the nominal value is credited to the share premium account and included within shareholders’ equity.
(q) Segmental reporting
A business segment is considered to be a group of assets and operations engaged in providing products or services that are
subject to risks and returns that are different to those of other business segments. A geographical segment is engaged in
providing products or services within a particular economic environment that is subject to risks and returns that are different to
that in other economic environments.
(r) Key areas of judgement
The Company makes estimates and assumptions concerning the future.  The resulting accounting estimates will by definition,
seldom equal the related actual results. The estimates and assumptions that may have an element of risk causing an
adjustment to the carrying amounts of assets and liabilities within the next year include those that relate to the capitalisation of
development costs and the components of the Company’s calculation for share-based payments.
notes to the financial statements continued  annual report 2007 | 47
2 Segmental information
The Company’s primary format for segmental reporting is business segment. As the business only operates in the UK the
Company does not have a secondary reporting format.
The Company’s sole activity is the design, development and implementation of computer hardware and software. The directors
consider it appropriate to analyse the results and financial position of the Company in three distinct segments as this reflects
how the business is managed:
■ The Products segment relates to business where the Company contracts directly with local NHS Trusts and other clinical
organisations;
■ The Services segment relates to the business where the Company is subcontracted to perform work on behalf of other
organisations where the end customer is also either the NHS or other clinical organisations;
■ Development and Shared Services relates to the Company’s central research and development activities and support
services provided to the Products and Services segments.
The profit/(loss) before taxation of each segment includes any revenue and expenses directly attributable to or able to be
allocated to each such segment on a reasonable basis. 
Segment assets and liabilities are those assets and liabilities directly attributable or which can be allocated to each such
segment on a reasonable basis.
Year ended 31 May 2007
Development
and shared
Products Services services Total
££££
Revenue 3,487,502 9,985,633 - 13,473,135
Profit/(loss) from operations 1,359,097 4,124,834 (4,860,783) 623,148
Net interest 229,902 - 480,489 710,391
Profit/(loss) before taxation 1,588,999 4,124,834 (4,380,294) 1,333,539
Total assets 4,442,408 3,023,969 12,323,958 19,790,335
Total liabilities (1,694,066) (269,046) (1,912,710) (3,875,822)
Net assets 2,748,342 2,754,923 10,411,248 15,914,513
Other segmental disclosures:
Capital expenditure – PPE 224,185 - 2,931 227,116
Capital expenditure – Intangible assets 60,611 - 238,742 299,353
Depreciation of tangible assets 373,377 - 201,722 575,099
Amortisation of intangible assets 86,928 - 23,208 110,136
Impairment of trade receivables (12,983) - - (12,983)
Share-based payments credit - - (52,580) (52,580) 48 | annual report 2007
Year ended 31 May 2006
Development
and shared
Products Services services Total
££££
Revenue 3,470,423 12,609,841 - 16,080,264
Proft/(loss) from operations 486,947 4,742,420 (5,100,525) 128,842
Net interest 147,731 - 384,451 532,182
Profit before taxation 634,678 4,742,420 (4,716,074) 661,024
Total assets 5,073,885 2,061,488 12,255,902 19,391,275
Total liabilities (2,304,608) (63,143) (1,750,578) (4,118,329)
Net assets 2,769,277 1,998,345 10,505,324 15,272,946
Other segmental disclosures:
Capital expenditure – PPE 15,952 - 38,347 54,299
Capital expenditure – Intangible assets 102,011 - - 102,011
Depreciation of tangible assets 729,981 - 190,901 920,882
Amortisation of intangible assets 87,350 - 27,892 115,242
Impairment of trade receivables 13,478 - - 13,478
Share-based payments charge - - 74,667 74,667
3 Employee and director costs
Staff numbers
The average monthly number of people (including Executive Directors) employed by the Company during the year is as follows:
Year ended Year ended
31 May 31 May
2007 2006
££
Products 31 53
Services 95 99
Development and shared services 31 44
157 196
notes to the financial statements continued  annual report 2007 | 49
Staff costs
Staff costs for the above persons during the year have been as follows:
Year ended Year ended
31 May 31 May
2007 2006
££
Wages and salaries 7,386,485 7,902,117
Social security costs 841,009 1,005,882
Other pension costs (see below) 190,820 112,789
Redundancy costs 105,452 191,013
Staff costs excluding share-based payment charge 8,523,766 9,211,801
Share-based payment (credit)/charge (Note 18) (52,580) 74,667
Total staff costs 8,471,186 9,268,468
Key management compensation
Staff costs (excluding the share-based payment (credit)/charge) in relation to senior management and Executive Directors are
as follows:
Year ended Year ended
31 May 31 May
2007 2006
££
Senior management 403,601 425,702
Executive Directors 554,166 595,645
957,767 1,021,347
Senior management refers to those employees who are not directors of the Company, but who have an influence on the
operational and strategic direction of the business. Fees in respect of Non-Executive Directors are disclosed in the Directors’
Remuneration Report.
Directors’ emoluments
A detailed numerical analysis of Directors’ remuneration and share options, showing the highest paid director and the number
of directors accruing benefits under defined contribution pension schemes is included in the audited part of the Directors’
Remuneration Report and forms part of these financial statements.
Pensions
The Company operates a stakeholder pension scheme in which all employees are eligible to participate from the
commencement of their employment. The funds are invested with Friends Provident and are separately held and administered.
In addition to this arrangement the Company also contributes to the personal pension schemes of certain employees.
Employee contributions to the stakeholder pension scheme/personal pension schemes of employees are matched by the
Company to a maximum of 4% (or 6% in the case of certain senior executives and directors) of eligible salary costs. There are
no other post retirement benefit arrangements for employees of the Company. 50 | annual report 2007
4 Financial income Year ended Year ended
31 May 31 May
2007 2006
££
Interest receivable on bank and short term deposits 485,313 398,560
Other interest 317,479 314,788
802,792 713,348
5 Financial expense Year ended Year ended
31 May 31 May
2007 2006
££
Interest payable on bank loans and overdrafts 4,824 1,989
Interest payable on financing loans (Note 14) 87,577 167,057
Dividend on £1 convertible preference shares - 12,120
92,401 181,166
The dividend on the £1 convertible participating preference shares was settled by the conversion of these shares into ordinary
shares in connection with the admission of the Company’s ordinary shares to AIM in June 2005.
6 Profit before taxation
The following items have been included in arriving at profit before taxation:
Year ended Year ended
31 May 31 May
2007 2006
££
Staff costs excluding share-based payments (Note 3) 8,523,766 9,211,801
Share-based payments (credit)/charge (Note 18) (52,580) 74,667
Research and development expenditure 1,045,009 1,000,378
Depreciation of property, plant and equipment:
– Contract assets 373,377 702,113
– Other assets 201,722 218,769
Loss on disposal of property, plant and equipment - 854
Amortisation of intangible assets:
– Development costs 79,686 59,482
– Software 30,450 55,760
Operating lease rentals:
– Land and buildings 190,300 168,423
– Motor vehicles and other leases 77,730 87,894
In addition to the research and development expenditure disclosed above, £299,353 was capitalised in respect of software
development in accordance with IAS 38 (2006: £102,011).
notes to the financial statements continued  annual report 2007 | 51
Services provided by the Company’s auditor
During the year the Company obtained the following services from its auditor at cost as detailed below:
Year ended Year ended
31 May 31 May
2007 2006
££
Audit services
Fees payable to the Company’s auditor for the audit of the financial statements 55,000 33,500
Non-audit services
Fees payable for services relating to taxation 7,000 6,000
Fees payable for other regulatory reporting 12,500 9,500
Fees payable for other services - 9,000
Non-audit fees paid to the auditors for the year ended 31 May 2006 relate to advice in respect of the impact of the adoption of
International Financial Reporting Standards.
In addition to the above, during the year ended 31 May 2006, non-audit fees were paid to the auditors in respect of
professional services provided in connection with the admission of the Company’s shares to AIM. An amount of £315,264 was
set off against the share premium account in this respect.
7 Taxation
(a) Analysis of tax charge/(credit) in the year
Year ended Year ended
31 May 31 May
2007 2006
££
Current tax:
United Kingdom corporation tax at 30% 92,209 -
Adjustments in respect of previous years - (3,439)
Total current tax charge/(credit) (Note 7(c)) 92,209 (3,439)
Deferred tax:
Current year 300,518 (162,131)
Adjustments in respect of previous years (8,671) (245,692)
Total deferred tax charge/(credit) (Note 7(d)) 291,847 (407,823)
Total tax charge/(credit) to the income statement 384,056 (411,262)
Tax on items credited/(charged) to equity:
Deferred tax (credit)/debit on share-based payments (13,648) 114,954 52 | annual report 2007
(b) Factors affecting the current tax charge for the year
The total tax charge/(credit) for the year differs from the standard rate of UK Corporation Tax of 30% (2006: 30%) as 
explained below:
Year ended Year ended
31 May 31 May
2007 2006
££
Profit before tax 1,333,539 661,024
Profit before tax multiplied by standard rate of UK Corporation Tax of 30% 400,062 198,307
Effects of:
– Permanent differences 71,184 65,415
– Rate differences on current tax (53,385) -
– Tax benefit of research and development expenditure - (60,051)
– Tax difference arising on treatment of share options (25,134) (365,802)
– Adjustments in respect of previous years - Current tax - (3,439)
– Adjustments in respect of prior years - Deferred tax (8,671) (245,692)
Total tax charge/(credit) (Note 7(a)) 384,056 (411,262)
(c) Current tax liability
Year ended Year ended
31 May 31 May
2007 2006
££
UK Corporation Tax liability
At 1 June - 4,796
Charged/(credited) to income statement during the year 92,209 (3,439)
Paid during the year - (1,357)
At 31 May 92,209 -
(d) Deferred tax asset
Year ended Year ended
31 May 31 May
2007 2006
££
At 1 June 1,205,163 912,294
(Charged)/credited to the income statement (291,847) 407,823
Credited/(debited) to shareholders’ equity 13,648 (114,954)
At 31 May 926,964 1,205,163
notes to the financial statements continued  annual report 2007 | 53
(e) Analysis of deferred tax asset
Year ended Year ended
31 May 31 May
2007 2006
££
Deferred tax recognised comprises:
Accelerated capital allowances 106,209 51,456
Unutilised losses 883,589 1,168,964
Short term timing differences (62,834) (15,257)
926,964 1,205,163
Deferred tax assets have been recognised in respect of all tax losses and other temporary differences giving rise to deferred tax
assets because it is probable that those assets will be recovered. 
Deferred tax assets and liabilities are only offset where there is a legally enforceable right of offset and there is an intention to
settle the balances net.
8 Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the year, excluding those that are held in the employee share trust, which are
treated as cancelled.
For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of 
all dilutive potential ordinary shares that have satisfied the appropriate criteria as at 31 May 2007.
A reconciliation between the weighted average number of shares used in the calculations of basic and diluted earnings per
share is set out below:
Year ended 31 May 2007 Year ended 31 May 2006
Weighted Weighted
average Per average Per
number of share number of share
Earnings shares amount Earnings shares amount
£ Number Pence £ Number Pence
Basic EPS
Earnings attributable to ordinary shareholders 949,483 87,148,360 1.09 1,072,286 84,408,217 1.27
Effect of dilutive shares 451,949 1,474,710
Diluted EPS 949,483 87,600,309 1.08 1,072,286 85,882,927 1.25 54 | annual report 2007
9 Property, plant and equipment
Short Fixtures
leasehold and Plant and Computer Contract
improvement fittings equipment equipment assets Total
££££££
Cost
At 1 June 2006 181,186 164,427 53,556 706,516 2,959,263 4,064,948
Additions at cost - - 1,580 1,351 224,185 227,116
Disposals - - - (16,361) - (16,361)
At 31 May 2007 181,186 164,427 55,136 691,506 3,183,448 4,275,703
Depreciation
At 1 June 2006 98,523 99,799 41,233 431,192 2,372,772 3,043,519
Charged in the year 37,660 19,490 4,324 140,248 373,377 575,099
Disposals - - - (16,361) - (16,361)
At 31 May 2007 136,183 119,289 45,557 555,079 2,746,149 3,602,257
Carrying value
At 31 May 2007 45,003 45,138 9,579 136,427 437,299 673,446
At 31 May 2006 82,663 64,628 12,323 275,324 586,491 1,021,429
Short Fixtures
leasehold and Plant and Computer Contract
improvement fittings equipment equipment assets Total
££££££
Cost
At 1 June 2005 179,650 163,906 43,293 687,842 2,943,311 4,018,002
Additions at cost 1,536 521 10,263 26,027 15,952 54,299
Disposals - - - (7,353) - (7,353)
At 31 May 2006 181,186 164,427 53,556 706,516 2,959,263 4,064,948
Depreciation
At 1 June 2005 61,373 77,999 37,868 275,826 1,670,659 2,123,725
Charged in the year 37,150 21,800 3,365 156,454 702,113 920,882
Disposals - - - (1,088) - (1,088)
At 31 May 2006 98,523 99,799 41,233 431,192 2,372,772 3,043,519
Carrying value
At 31 May 2006 82,663 64,628 12,323 275,324 586,491 1,021,429
At 31 May 2005 118,277 85,907 5,425 412,016 1,272,652 1,894,277
notes to the financial statements continued  annual report 2007 | 55
Depreciation is charged to the following lines in the income statement:
Year ended Year ended
31 May 31 May
2007 2006
Company ££
Cost of sales 373,377 702,113
Administration and general overheads 201,722 218,769
575,099 920,882
10 Intangible assets
Software
development Own Contract
costs software software Total
££££
Cost
At 1 June 2006 508,884 120,418 143,177 772,479
Additions 299,353 - - 299,353
At 31 May 2007 808,237 120,418 143,177 1,071,832
Amortisation
At 1 June 2006 415,398 64,475 131,274 611,147
Charged in the year 79,686 23,208 7,242 110,136
At 31 May 2007 495,084 87,683 138,516 721,283
Carrying value
At 31 May 2007 313,153 32,735 4,661 350,549
At 31 May 2006 93,486 55,943 11,903 161,332
Software
development Own Contract
costs software software Total
££££
Cost
At 1 June 2005 406,873 120,418 143,177 670,468
Additions 102,011 - - 102,011
At 31 May 2006 508,884 120,418 143,177 772,479
Amortisation
At 1 June 2005 355,916 36,583 103,406 495,905
Charged in the year 59,482 27,892 27,868 115,242
At 31 May 2006 415,398 64,475 131,274 611,147
Carrying value
At 31 May 2006 93,486 55,943 11,903 161,332
At 31 May 2005 50,957 83,835 39,771 174,563 56 | annual report 2007
Amortisation has been charged to the following lines in the income statement:
Year ended Year ended
31 May 31 May
2007 2006
££
Cost of sales 86,928 87,350
Administration and general overheads 23,208 27,892
110,136 115,242
11 Trade and other receivables
Year ended Year ended
31 May 31 May
2007 2006
CURRENT ££
Trade receivables 2,961,188 2,685,340
Less: provision for impairment (24,109) (37,092)
Trade receivables – net 2,937,079 2,648,248
Other receivables 18,370 17,693
Prepayments 333,117 398,792
Accrued income 3,203,175 2,887,305
TOTAL CURRENT 6,491,741 5,952,038
NON-CURRENT
Accrued income 773,502 1,503,328
12 Cash and cash equivalents
Year ended Year ended
31 May 31 May
2007 2006
££
Cash at bank and in hand 1,551,943 954,228
Cash on short term deposit 9,022,190 8,593,557
10,574,133 9,547,985
notes to the financial statements continued  annual report 2007 | 57
13 Trade and other payables
Year ended Year ended
31 May 31 May
2007 2006
CURRENT ££
Trade payables 439,255 360,007
Other taxation and social security 947,323 790,318
Accruals 927,415 853,773
Deferred income 839,158 512,336
3,153,151 2,516,434
14 Borrowings
Year ended Year ended
31 May 31 May
2007 2006
££
Financing loans repayable in less than one year 528,122 992,366
Financing loans repayable between one and two years - 528,122
528,122 1,520,488
The financing loans represent gross borrowings of £4.5m obtained in order to finance certain of the Company’s contracts.
£1m of such financing loans is repayable in 60 equal monthly instalments commencing 29 May 2002 and carries interest at a
fixed rate of 8%. The remaining £3.5m was obtained in a number of tranches each of which is repayable in 60 equal monthly
instalments. The first repayment began in August 2003 and each tranche also carries a fixed interest rate of 8%. The financing
loans are secured over the contract assets and contract software as disclosed in Notes 9 and 10 respectively.
15 Provisions
National
Insurance
provisions for
Property share-based
dilapidations payments Total
£££
At 1 June 2006 72,525 8,882 81,407
Charged during the year 10,145 13,984 24,129
Utilised in year - (3,196) (3,196)
At 31 May 2007 82,670 19,670 102,340
Dilapidations provisions are being built up over the period to the next break clauses within the relevant leases. The National
Insurance provision is expected to be utilised as employees exercise share options. 58 | annual report 2007
16 Financial Instruments
The Company’s accounting policies in respect of financial instruments is given in Note 1(o).
The Company’s financial liabilities comprise borrowings and trade and other payables. The main purpose of these financial
instruments is to provide finance for the Company’s operations. The Company also has other financial liabilities which are
disclosed as provisions in Note 15 and relate to amounts provided for leasehold property dilapidations and National Insurance
charges relating to share-based payment incentives. These provisions are considered to be financial liabilities on which no
interest is paid. This is because, in establishing these provisions, the cash flows were not discounted.
The Company’s financial assets comprise cash and cash equivalents (amounts on short term deposit which are repayable
within three months without penalty), trade receivables and other receivables which arise directly from its operations.
The Company does not enter into derivative transactions (such as interest rate swaps and forward contracts), and it is, and
has been throughout the year under review, the Company’s policy that no trading in financial instruments shall be undertaken.
The Company has not engaged in any foreign currency transactions during the year and accordingly all information in respect
of financial instruments relates to items denominated entirely in Sterling.
The main risks arising from the Company’s financial instruments are interest rate risk and liquidity risk. The Board reviews and
agrees policies for managing each of these risks as summarised below:
Interest rate risk
The Company finances its operations through a mixture of bank borrowings and other borrowings. The Company borrows at
both fixed and floating rates of interest in order to generate the desired interest rate profile. At the year end the Company’s only
borrowings comprise financing loans.
Liquidity risk
The Company’s policy is to achieve continuity of funding by ensuring that adequate loan facilities are in place appropriate to
meet its forecast requirements. Where possible the Company seeks to put committed facilities in place.
Credit Risk
Management believe there is no further credit risk provision required in excess of the normal provision for doubtful receivables.
Borrowing facilities
The Company had no undrawn committed borrowing facilities during the year (2006: £nil).
Fair values of non-derivative financial assets and liabilities
Where market values are not available, fair values have been calculated by discounting expected cash flows at 
appropriate rates of interest. Set out below the table over page is a summary of methods and assumptions used for each
category of financial instruments.
notes to the financial statements continued  annual report 2007 | 59
Year ended 31 May 2007 Year ended 31 May 2006
Book value Fair value Book value Fair value
££££
Primary financial instruments held or issued to 
finance the Company’s operations:
Long term borrowings - - 528,122 (489,002)
Short term borrowings 528,122 528,122 (992,266) (992,266)
Trade and other payables (current) (3,153,151) (3,153,151) (2,516,434) (2,516,434)
Trade and other receivables (non-current) 773,502 716,206 1,503,328 1,388,291
Trade and other receivables (current) 6,491,741 6,491,741 5,952,038 5,952,038
Cash and cash equivalents 10,574,133 10,574,133 9,547,985 9,547,985
Summary of methods and assumptions
(a) Short term borrowings
Short term borrowings comprise the current portion of financing loans which bear interest at a fixed rate of 8%. The fair value
approximates to the carrying amount because they have a short maturity and bear commercial rates of interest.
The fair value of any accrued finance costs is also considered to approximate to the carrying value.
(b) Long term borrowings
Long term borrowings relate to the non current portion of financing loans and also carry interest at 8%. As at 31 May 2006,
such long term borrowings were repayable between one to two years.
The fair value has been calculated by discounting expected cash flows at the 8%, being the inherent interest rate of the loan.
The maturity profile of borrowings is given in Note 14.
(c) Trade and other receivables/payables and cash and cash equivalents
The fair value of the current portion of such amounts is deemed to equate to the book value as such items can be realised or
fall due for payment in less than one year. Cash and cash equivalents are deposited with banks or similar institutions and
attract a variable rate of interest based on market rates.
The fair value of the non-current portion of trade and other receivables has been calculated by discounting the balance by 8%.
17 Share capital
31 May 2007 31 May 2006
Authorised: Number £ Number £
1p ordinary shares 405,000,000 405,000,000 405,000,000 405,000,000
£1 convertible participating preference shares ----
£1 redeemable preference shares ----
405,000,000 405,000,000 60 | annual report 2007
31 May 2007 31 May 2006
Allotted, called up and fully paid: Number £ Number £
1p ordinary shares
– At beginning of year 89,276,464 892,765 41,468,333 414,684
– Allotments 204,500 2,045 47,808,131 478,081
– At end of year 89,480,964 894,810 89,276,464 892,765
£1 convertible participating preference shares
– At beginning of year - - 3,335,999 3,335,999
– Conversion prior to admission to AIM - - (3,335,999) (3,335,999)
– At end of year ----
£1 redeemable preference shares
– At beginning of year - - 71,000 71,000
– Redemption following admission to AIM - - (71,000) (71,000)
– At end of year ----
894,810 892,765
204,500 ordinary shares were issued during the year as a result of the exercise of share options as disclosed in Note 18. 
The total cash consideration received on the exercise of such options was £27,323 which resulted in a credit of £2,045 to the
share capital account and £25,278 to the share premium account.
Changes to share capital in connection with the admission to AIM
Immediately prior to the admission of the Company’s ordinary shares to AIM on 28 June 2005 each convertible participating
preference share converted into 6.27 1p ordinary shares and 93.73 1p non-voting deferred shares. The cumulative unpaid
dividend of £179,596 on the Company’s convertible participating preference shares at that time was also settled through this
conversion mechanism and the corresponding entry has been credited to the share premium account.
Immediately following the conversion the Company repurchased the non-voting deferred shares for £nil consideration, cancelled
them and re-designated the unissued non-voting deferred shares as additional 1p ordinary shares.
The redeemable preference shares were redeemed at par three business days after the admission of the Company’s ordinary
shares to AIM.
Description of shares
The respective rights, privileges and conditions attaching to the ordinary shares, the convertible participating preference shares
and the preference shares of the Company are as follows:
notes to the financial statements continued  annual report 2007 | 61
(a) Voting rights
Ordinary shares
Right to vote at general meetings of the Company. Each ordinary share shareholder has one vote per share.
Convertible participating preference shares
Voting rights equal to those of ordinary shareholders as if conversion had taken place (see below).
Redeemable preference shares
No right to vote other than on matters affecting the rights and privileges of preference shareholders. In such instances, each
shareholder had one vote per share.
(b) Rights to dividends
Ordinary shares
No rights to dividends other than those recommended by the Directors.
Convertible participating preference shares
The holders of convertible participating preference shares were not entitled to a dividend for each year to 31 May 2004, and
then became entitled to a fixed preferential cumulative dividend of 5 per cent (accrued on a daily basis) for each financial year
starting from 1 June 2004. The payment of a dividend to these shareholders took priority over all other classes of share. 
The holders of the convertible participating preference shares were entitled to an additional dividend of 5 per cent (calculated
annually on a compound basis) at the end of each period on any cumulative unpaid dividends.
Redeemable preference shares
Each redeemable preference share bore the right to a fixed cumulative dividend of 0.01p per share per annum. 
(c) Priority and the amounts receivable on a winding up
Convertible participating preference shares
In the event of winding up, the convertible participating preference shares ranked above all other classes of share, and would
have been repaid at par plus a liquidation preference as if the shares had been converted together with any accrued dividends
outstanding at that date.
Redeemable preference shares
In the event of winding up, these shares ranked ahead of the ordinary shares and would have been repaid at par.
Ordinary shares
Balance of all remaining assets to be distributed.
(d) Conversion rights
Convertible participating preference shares
The convertible participating preference shares could have been converted at any time at a price of 25p per share, subject to
adjustment if additional shares were issued, or if the existing number of ordinary shares were consolidated.
In the event of a sale or flotation of the Company the convertible participating preference shares would convert at a price
which would have given an equivalent return as that on a winding up of the Company. 62 | annual report 2007
(e) Redemption rights
Convertible participating preference shares
The convertible participating preference shares could have been redeemed (subject to the provisions for redemption under the
Companies Act 1985) on a date three business days after the date on which an election made by the holders of 60 per cent of
the outstanding number of such shares to redeem all or any of the convertible participating preference shares then in issue. 
In the absence of any material breach by the Company of the subscription agreement in respect of the convertible participating
preference shares, such shares would have only been redeemable from 7 September 2008.
Upon redemption the Company would pay in respect of each such share an amount in cash equal to the higher of:
■ The amount determined by an Independent Expert to be the fair price of one ordinary share at that time (subject to certain
other conditions); or
■ The original subscription price of the convertible participating preference shares plus any accrued dividends thereon.
Redeemable preference shares
The redeemable preference shares would have been redeemed for cash at par plus any accrued dividend (subject to the
provisions for redemption under the Companies Act 1985) on a date three business days after occurrence of a trigger event
(broadly a sale or flotation of the Company).
18 Share-based payment
Share-based payment incentives have been granted to certain employees and shareholders to acquire ordinary shares of 
1p each under The System C Healthcare PLC Employee Share Option Scheme, The System C Healthcare PLC Employee
Management Incentive, the System C Healthcare PLC Company Share Option Plan, The System C Healthcare PLC Sharesave
Plans and various stand alone option agreements.
(a) The System C Healthcare PLC Employee Share Option Scheme (“ESOS”)
This scheme provides for the grant of unapproved options to acquire ordinary shares in the Company to employees and
executive directors of the Company.
Options were granted with an exercise price equal to the market value of the shares at the time of grant and in relation to
options to subscribe for shares, the exercise price could not be less than the nominal value of the shares. 
Under the rules of the Unapproved Scheme the Unapproved Options become exercisable between the third and tenth
anniversary of the relevant date of grant (unless otherwise stated in the relevant Option Certificate). As a condition of exercise,
the Unapproved Option Holders must make a payment to the Company of the aggregate exercise price due. Income tax and
employee National Insurance Contributions will be due on exercise of the Unapproved Options which must be recovered from
the Option Holders. Employer’s National Insurance contributions will be payable by the Company on the exercise of such
options by an employee. 
notes to the financial statements continued  annual report 2007 | 63
(b) The System C Healthcare PLC Employee Management Incentive Scheme (“EMI”)
The Company entered into agreements for the grant of Enterprise Management Incentive options to certain of its key
executives and employees subject to the EMI legislation over ordinary shares in the Company.
Such options were only exercisable at the time of the admission of the Company’s ordinary shares to AIM in June 2005.
As a condition of exercise the EMI option holders must make a payment to the Company of the aggregate exercise price due,
together with a payment (or evidence satisfactory to the Board of arrangements for the payment) of any tax and employee
National Insurance liability due on exercise of the EMI Options.
(c) The System C Healthcare PLC Company Share Option Plan (“CSOP”)
The CSOP was adopted on 2 June 2005 and is split into two parts:
Part 1
Part 1 of the CSOP has been approved by HMRC under Schedule 4 to the Income Tax (Earnings and Pensions) Act 2003 and
provides for the grant of approved options. This scheme is open to all employees of the Company and those executive
directors that are required to work not less than 25 hours per week.
The conditions of the CSOP provide that options may be granted on terms that their exercise will be subject to the satisfaction
of performance criteria following admission to AIM that earnings per share increases (on average) over three years by 4% per
annum above the growth in the Retail Price Index. Options may be granted on terms that their exercise will be subject to the
option holder paying any Employer’s National Insurance liability arising pursuant to the exercise. Additionally, options may be
granted by the trustees of the Company’s employee benefit trust.
The price at which an option holder may acquire ordinary shares on the exercise of an option is determined by the Board, but
shall be not less than the greater of the market value of an ordinary share at the time of grant and its nominal value.
No option may be granted to an eligible employee under Part I which would result in the aggregate exercise prices of ordinary
shares comprised in all outstanding options granted to him/her under the CSOP when aggregated with outstanding options
held under any HMRC approved executive share option scheme established by the Company exceeding the HMRC limit
(currently £30,000). In addition, (both under Part I and Part II) the aggregate exercise price of options granted to an individual
under any discretionary share option scheme operated by the Company in any calendar year shall not exceed one times
his/her annual salary for that year (ignoring, where relevant, options to rights to acquire shares granted before or on admission
of the Company’s ordinary shares to AIM).
Options will normally only be exercisable by an option holder who is still an eligible employee of the Company after the third
anniversary of its date of grant and before the tenth anniversary of its date of grant.
Earlier exercise is permitted if the option holder dies or leaves the Company through injury, disability, redundancy or retirement on
or after reaching the age of 55. In such circumstances options can be exercised notwithstanding the fact that fewer than three
years have passed since the date of grant. Additionally, early exercise may be allowed at the discretion of the Board in other
circumstances. Early exercise is also permitted in the event of a takeover, reconstruction or voluntary winding up of the Company.
In the event of an early exercise the Remuneration Committee shall determine whether, and the extent to which, options may
be exercised, taking account of the Company’s performance up to that time. 64 | annual report 2007
If the performance conditions attaching to an option have not been satisfied at the end of a performance period then the
option will lapse two months after that date, or if earlier, on the date the Board (subject to guidance from the Remuneration
Committee) determines that the performance conditions have not been satisfied.
The terms of the CSOP may be amended by the Board in any way, subject to certain conditions and prior approval from HMRC.
Part II
Part II of the CSOP provides for the grant of unapproved share options. This enables options to be granted under the same
terms as Part I of the CSOP but without complying with the particular requirements of the legislation applicable to HMRC
approved company share option plans. The provisions of the CSOP that do not apply under Part II include the £30,000 limit,
the requirements for executive directors to work not less than 25 hours per week and the need to seek approval from HMRC
for the scheme and any subsequent amendments to it.
(d) The System C Healthcare PLC Sharesave Plan 1 (“SSP1”)
The System C Healthcare PLC Sharesave Plan 1 was established on 2 June 2005. The rules of this plan have been approved by
HMRC under Schedule 3 to the Income Tax (Earnings and Pensions) Act 2003 and provide for the grant of approved share options.
All employees and full-time directors of the Company, who have been in continuous service for such period of time (not exceeding
five years) as may be determined by the Board prior to the relevant date of grant of an option and who are liable to UK income
tax, will be eligible to participate in this plan. Participation may also be offered, at the discretion of the Board, to other employees
or directors who otherwise do not satisfy all of the above criteria, although non-executive directors are not eligible to participate.
The price at which an option holder may acquire ordinary shares on the exercise of an option shall be determined by the Board
but shall not be less than the greater of 80% of the market value of an ordinary share at the time of grant and its nominal value.
Under the terms of this plan, options may be granted by the Board or the trustee of an employee benefit trust. Upon applying
for an option, the participant is required to enter into an approved Sharesave contract with a savings institution nominated by
the Company which lasts for a period of either three, five or seven years. Participants will be required to make contributions to
the plan of a minimum of £5 per month and a maximum of £250 per month. The total exercise price of the ordinary shares
over which the option is granted may not exceed the aggregate of the monthly contributions and the bonus payable at the end
of the participant’s related Sharesave contract.
Options will normally be exercisable during a period of six months following the allocation of a bonus under the related Sharesave
contract and will normally lapse on cessation of employment. Earlier exercise is, however, permitted if the participant dies or leaves
employment through injury, disability, redundancy or retirement, or in the event of a takeover or voluntary winding up of the Company.
The number of ordinary shares over which options may be granted under the Plan on any date of grant shall be limited so that
the total number of ordinary shares issued or capable of being issued in any ten year period under all the Company’s employee
share schemes is restricted to 10% of the Company’s issued ordinary shares calculated at the relevant time. Any options or
rights to acquire shares granted before or on admission of the Company’s ordinary shares to AIM are excluded from this limit.
The terms of the Plan may be amended by the Board in any way, subject to certain conditions and prior approval from HMRC.
notes to the financial statements continued  annual report 2007 | 65
(e) The System C Healthcare PLC Sharesave Plan 2 (“SSP2”)
The System C Healthcare PLC Sharesave Plan 2 was established on 16 February 2007 and operates in a manner that is
substantially similar to that of The System C Healthcare PLC Sharesave Plan 1.
(f) Share-based payment incentives for non-executive directors
In addition to the schemes above, the Company has established a share-based payment incentive for two of its non-executive
directors, Thomas Chambers and Dr John Forrest.
Under the terms of this arrangement the two individuals will be entitled to a cash payment based on the increase in the share
price of the Company at the end of each of the three financial years ended on 31 May 2008, subject to a minimum share price
of 54p (being the market price of the ordinary shares on the admission to AIM) and a maximum cash payment not to exceed
the total fees payable to these individuals for their services as non-executive directors over the same 3 year period. Other than
this scheme, which is a cash settled share-based payment transaction in accordance with IFRS 2 “Share-based payment”, all
other share-based payment incentives are deemed to be equity settled.
Further details of all the share options granted by the Company under its various schemes and standalone arrangements are
given in the tables below.
Number of ordinary shares of 1p each
Exercise
Date of price in At 31 May At 31 May
grant Period of exercise pence 2006 Exercised Granted Lapsed 2007
1 Jun 1998 Before 31 May 2007 1 10,500 (10,500) - - -
25 May 1999 1 Apr 2002 - 31 Mar 2009 14.031 168,000 (38,000) - - 130,000
2 Jul 1999 1 Mar 2003 - 27 Feb 2010 14.031 160,000 - - - 160,000
16 Jul 1999 Before 15 Jul 2006 14.031 150,000 (150,000) - - -
10 Aug 2001 No time limit imposed 33 50,000 - - - 50,000
10 Aug 2001 No time limit imposed 33 50,000 - - - 50,000
1 Oct 2001 4 Oct 2004 - 3 Oct 2011 14 109,000 - - - 109,000
1 Jul 2002 1 Jul 2005 - 30 Jun 2012 14 34,000 (5,000) - - 29,000
1 Dec 2002 1 Dec 2005 - 30 Nov 2012 14 1,000 (1,000) - - -
6 May 2003 6 May 2006 - 5 May 2013 14 16,666 - - - 16,666
6 May 2003 6 May 2007 - 5 May 2014 14 16,667 - - - 16,667
6 May 2003 6 May 2008 - 5 May 2015 14 16,667 - - - 16,667
1 Jul 2004 1 Jul 2007 - 30 Jun 2014 14 10,000 - - - 10,000
24 Nov 2004 Before 24 Nov 2014 14 50,000 - - - 50,000
2 Jun 2005 1 Sep 2009 44 584,838 - - (502,155) 82,683
22 Jun 2005 22 Jun 2008 - 21 Jun 2015 54 2,335,000 - - (75,000) 2,260,000
25 May 2006 25 May 2008 - 24 May 2015 23.5 300,000 - - - 300,000
20 Sep 2006 20 Sep 2010 - 19 Sep 2019 24.5 - - 950,000 - 950,000
16 Feb 2007 1 Apr 2010 20 - - 1,237,950 (141,750) 1,096,200
4,062,338 (204,500) 2,187,950 (718,905) 5,326,883
The total number of share options outstanding as at 31 May 2007 represent approximately 5.95% of the issued share capital
of the Parent Company (2006: 4.55%). 66 | annual report 2007
The Company’s share-based payment incentive plans are subject to continued employment and employee share options generally
lapse 1 year after an individual’s employment with the Company has ceased unless a different arrangement has been mutually
agreed. The lapses disclosed in the table above include voluntary withdrawals by employees from the Company’s Sharesave Plans.
To the extent that shares in such plans are to be purchased by employees below fair value, a charge calculated in accordance
with IFRS 2 “Share-based payment” is included within administration and general overheads in the income statement, with the
corresponding entry being to provisions (in the case of cash-settled arrangements) or a credit to retained earnings (in the case
of equity-settled arrangements). A credit to the income statement of £52,580 arose for the year ended 31 May 2007 
(2006: charge of £74,667) and relates entirely to equity-settled arrangements. 
In calculating the amounts above the Company has taken advantage of the exemption allowed under IFRS 2 “Share-based
payment” and only applied this standard to equity-settled awards made since 7 November 2002 but that have not vested by
1 June 2005, the date of its transition to IFRS.
Share options were exercised by employees at various times during the year. The weighted average share price at the time of
the exercise of the options was 27p (2006: 51p).
The Company has a provision for National Insurance contributions of £19,670 (2006: £8,882) in respect of liabilities arising
from the above share-based payment transactions in respect of its employees.
None of the cash-settled share-based payment incentives had vested by the end of the financial year (2006: none).
The following table summarises the key assumptions used in calculating the share-based payment charge for the year:
Share-based payment incentives
(References are to schemes detailed above)
ESOS EMI
1
CSOP SSP1 SSP2 Other
Black Black Black Black Black Balck
Option pricing model used Scholes Scholes Scholes Scholes Scholes Scholes
Weighted average fair value 5p 4p 19p 13p 6p 4p
Weighted average share price 12p 12p 45p 45p 21p 20p
Weighted average exercise price 14p 14p 54p 44p 20p 25p
Basis of expected volatility 60% 40% 60% 40p 40% 40%
Risk-free rate 4.3% 4.3% 4.3% 4.3% 4.3% 4.3%
Expected option term (years) 5 - 5333
Expected dividends per year 2% 2% 2% 2% 2% 2%
Note 1: EMI options were only exercisable on the admission of the Company’s ordinary shares to AIM. There are no such options outstanding at 31 May 2007.
Assumptions on expected volatility and expected option term have been made on the basis of historical data, wherever
available, for the period corresponding with the vesting period of the option. Best estimates have been used where historical
data is not available in this respect.
notes to the financial statements continued  annual report 2007 | 67
19 Reserves
The movement on individual reserves is set out in the statement of changes shareholders’ equity.
Capital redemption reserve
The balance on the capital redemption reserve primarily arose on the conversion of the Company’s £1 convertible participating
preference shares to 1p ordinary shares in connection with the admission to AIM in June 2005.
Own shares held in trust
The System C Healthcare PLC Employee Benefit Trust (the “Trust”) holds 2,287,741 ordinary shares of 1p each with a cost of
£1,235,381 and a market value as at 31 May 2007 of £817,867 (2006: £537,619). The Trust acquired these shares at 
54p each on the placing and admission of the Company’s ordinary shares to AIM in June 2005.
The Trust used the funds loaned to it by System C Healthcare PLC to meet the obligations under the various share option
schemes that the Company operates. Share options are granted to the employees at the full discretion of the Trustees after
consultation with the Company, although the Trustees are not legally bound to follow the advice arising from such
consultations with the Company. The loan provided to the Trust will be repaid from the proceeds payable by employees to
exercise share options, which are equal to the placing price of 54p.
As at 31 May 2007 1,830,000 (2006: 1,830,000) of the total ordinary shares held by the Trust had been allocated to the
Directors and senior management under the CSOP with a nominal value of 1p each (2006: 1p) and a market value of 54p and
23.5p for those options allotted on 22 June 2005 and 24 May 2006 respectively. None of these shares had unconditionally
vested with the employees as at 31 May 2007. The Trust has waived its right to dividends.
Special reserve
The balance on the special reserve arose from the capital restructuring in connection with the re-registration of the Company
as a public limited company prior to the admission of its ordinary shares to AIM. In accordance with a Court Order obtained on
27 April 2005 the Company was permitted to transfer the amount credited to the special reserve to retained earnings
equivalent to any increase in the Company’s paid-up share capital or share premium arising from new consideration.
Accordingly the Company transferred £1,308,496 from the special reserve to retained earnings following the receipt of
consideration for new shares issued in connection with its admission to AIM.
20 Dividends
Year ended Year ended
31 May 31 May
2007 2006
££
£1 ordinary shares
Final paid 0.22p per share in relation to year ended 31 May 2006 
(2006: £nil in relation to the year ended 31 May 2005) 191,728 -
Interim paid 0.12p per share in relation to the year ended 31 May 2007 
(2006: paid 0.11p per share in relation to the year ended 31 May 2006) 104,579 95,465
296,307 95,465 68 | annual report 2007
In addition, the Directors are proposing a final dividend in respect of the financial year ended 31 May 2007 of 0.24p per share
which will absorb an estimated £210,000 of shareholders’ equity.
If approved it will be paid on 9 November 2007 to those shareholders who are on the register of members on 5 October 2007.
21 Operating lease commitments
The total future minimum lease payments for the Company in respect of non-cancellable leases based on date of expiry are
as follows:
Year ended Year ended
31 May 31 May
2007 2006
££
Land and buildings leases
Within one year 190,300 190,300
Within two to five years 310,863 510,163
501,163 700,463
Motor vehicle and other leases
Within one year 77,730 77,730
Within two to five years 96,151 173,881
173,881 251,611
Total
Within one year 268,030 268,030
Within two to five years 407,014 684,044
675,044 952,074
22 Related party transactions
The following transactions with related parties occurred during the year ended 31 May 2007:
(a) Transactions with shareholders
During the year, professional services were provided to the Company by Medical Information Research Limited of which 
S W Smith, a shareholder of the Parent Company, is a director. Total fees levied by Medical Information Research Limited in the
year amounted to £26,000 (2006: £24,000).
During the year legal services were provided to the Company by a shareholder, L Brooks. Total fees levied by L Brooks in the
year amounted to £50,645 (2006: £114,899).
notes to the financial statements continued  annual report 2007 | 69
During the year, ad hoc services were provided to the Company by a shareholder, T Sackville, a consultant specialising in
healthcare opportunities. Total fees levied by T Sackville in the year amounted to £5,625 (2006: £7,500). 
During the year, professional services were provided to the Company by Brains Direct Limited of which M Kinton, a
shareholder of the Parent Company, is a director. Total fees charged by Brains Direct Limited in the year amounted to
£222,474 (2006: £250,646).
During the year, ad hoc building management services were provided to the Company by a shareholder, N Worlidge. Total fees
levied in the year amounted to £nil (2006: £16,078).
(b) Transactions with directors
During the year professional services were provided to the Company by N Willmore, a consultant specialising in public
relations, and spouse of M S Bolton, a director of the Parent Company. Total fees levied by N Willmore in the year amounted to
£300 (2006: £nil).
There are no other transactions that require disclosure in accordance with the requirements of IAS 24 “Related party disclosures”.
23 Post balance sheet events
On 2 July 2007, the Company acquired an interest in the entire issued share capital of IQ Systems, an entity registered in
England and Wales and engaged in the provision of patient management and clinical software solutions. 
The consideration consisted of £800,000 paid on completion with a maximum potential further consideration £1,360,000
payable if certain performance criteria are met within two years from the date of acquisition. Further details in respect of the 
net assets acquired in connection with the purchase of IQ Systems will be given in the Company’s next financial statements.
Following the 2007 Budget, the Chancellor announced that as of 1 April 2008 the rate of corporation tax would be cut from
30% to 28%. This change was incorporated into the Finance Bill 2007 which was approved on 26 June 2007 and will impact
on the future Corporation Tax charges and the value of deferred tax for the Company.
24 First time adoption of International Financial Reporting Standards (“IFRS”)
(a) Application of IFRS 1 
The Company has applied IFRS 1 “First Time Adoption of International Financial Reporting Standards” for its initial implementation
of IFRS. The Company's date of transition to IFRS is 1 June 2005 and comparative information in the financial statements has
been restated to reflect the Company's adoption of IFRS except where otherwise required or permitted by IFRS 1.
IFRS 1 requires an entity to comply with each IFRS effective at the reporting date for its first financial statements prepared
under IFRS. As a general rule, IFRS 1 requires such standards to be applied retrospectively. However, the standard permits
several optional exemptions from full retrospective application.  70 | annual report 2007
(b) Main impacts of adopting International Financial Reporting Standards
Outlined below are those International Financial Reporting Standards which have an impact on the financial statements of the
Company. Details of the adjustments are set out in the reconciliations between IFRS and UK GAAP as set out further below:
IFRS 2 “Share-based payments”
Under IFRS, equity settled share-based payment transactions are measured at fair value at the grant date and charged to the
income statement over the vesting period of the award with a corresponding increase in equity. In the case of cash settled
share-based payment transactions, the fair value of the award is recognised in the income statement over the vesting period
and is remeasured at each balance sheet date with the corresponding entry being to liabilities.
IAS 12 “Income taxes”
This standard requires entities to provide for deferred taxation based on temporary differences between the carrying amount of
assets and liabilities and their tax base. Accordingly the Company has made additional provision for deferred taxation in
respect of share-based payments and capitalised development costs.
IAS 32 “Financial instruments: Presentation”
Under UK GAAP the Company’s £1 redeemable preference shares and £1 convertible preference shares were disclosed as
part of shareholders’ equity.
IAS 32 requires the classification of financial instruments between equity and liabilities according to their substance rather than
their strict legal form. This standard also requires that interest and dividends on financial instruments be treated in a manner
that is consistent with the treatment adopted for the underlying instrument.
IAS 38 “Intangible assets”
Under UK GAAP , development costs were expensed to the income statement as incurred. 
IAS 38 requires development costs to be capitalised once certain criteria have been met. The Company has recognised
development costs as intangible assets once it is probable that the product will generate future economic benefits, it is technically
feasible and the costs can be measured reliably. All other development costs are expensed to the income statement as incurred.
This standard also requires software to be disclosed as intangible assets rather than as property, plant and equipment as
permitted by UK GAAP .
IAS 1 “Presentation of financial statements”
UK GAAP permitted the non-current portion of assets to be presented within current assets on the face of the balance sheet,
with separate disclosure of the non-current element given in the Notes to the financial statements.
IAS requires that the non-current portion of such assets is disclosed separately on the face of the balance sheet. Accordingly
the Company has reclassified the non-current element of its accrued income balance.
The adoption of IFRS has not impacted on the previously reported net cash flows of the Company.
notes to the financial statements continued  annual report 2007 | 71
(c) Reconciliation of Income Statement: UK GAAP to IFRS
Year ended 31 May 2006
Effect of
UK GAAP IFRS IFRS
£££
Revenue 16,080,264 - 16,080,264
Cost of sales (8,086,450) (59,482) (8,145,932)
Gross proﬁt 7,993,814 (59,482) 7,934,332
Selling and marketing costs (708,592) - (708,592)
Research and development costs (1,102,389) 102,011 (1,000,378)
Administration and general overheads (6,021,853) (74,667) (6,096,520)
Proﬁt from operations 160,980 (32,138) 128,842
Financial income 713,348 - 713,348
Financial expense (169,046) (12,120) (181,166)
Proﬁt before taxation 705,282 (44,258) 661,024
Taxation 422,533 (11,271) 411,262
Proﬁt for the year after taxation 1,127,815 (55,529) 1,072,286
(d) IFRS Income Statement adjustments
Year ended
31 May
2006
£
Profit for the period under UK GAAP 1,127,815
Share-based payments charge (74,667)
Capitalisation of development costs 102,011
Amortisation of development costs (59,482)
Preference dividend reclassified to financial expense (12,120)
Deferred taxation (11,271)
Profit for the period under IFRS 1,072,286 72 | annual report 2007
(e) Reconciliation of Balance Sheet: UK GAAP to IFRS
At 1 June 2005 At 31 May 2006
Effect of Effect of
GAAP IFRS IFRS GAAP IFRS IFRS
££££££
ASSETS – Non-current assets
Property, plant and equipment 2,017,883 (123,606) 1,894,277 1,089,277 (67,848) 1,021,429
Intangible assets - 174,563 174,563 - 161,332 161,332
Deferred tax asset 812,005 100,289 912,294 1,231,099 (25,936) 1,205,163
Trade and other receivables - 1,932,372 1,932,372 - 1,503,328 1,503,328
2,829,888 2,083,618 4,913,506 2,320,376 1,570,876 3,891,252
Current assets
Trade and other receivables 7,506,816 (1,932,372) 5,574,444 7,455,366 (1,503,328) 5,952,038
Cash and cash equivalents 1,223,242 - 1,223,242 9,547,985 - 9,547,985
8,730,058 (1,932,372) 6,797,686 17,003,351 (1,503,328) 15,500,023
LIABILITIES – Current liabilities (3,376,913) - (3,376,913) (2,516,434) - (2,516,434)
Current tax liability (4,796) - (4,796) - - -
Borrowings (933,163) - (933,163) (992,366) - (992,366)
(4,314,872) - (4,314,872) (3,508,800) - (3,508,800)
Non-current liabilities
Borrowings (1,520,488) (3,406,999) (4,927,487) (528,122) - (528,122)
Provisions (233,895) - (233,895) (81,407) - (81,407)
(1,754,383) (3,406,999) (5,161,382) (609,529) - (609,529)
NET ASSETS 5,490,691 (3,255,753) 2,234,938 15,205,398 67,548 15,272,946
SHAREHOLDERS' EQUITY
Share capital 3,821,683 (3,406,999) 414,684 892,765 - 892,765
Share premium account - - - 9,731,885 - 9,731,885
Capital redemption reserve 134 - 134 3,127,023 - 3,127,023
Own shares held in trust - - - (1,235,381) - (1,235,381)
Special reserve 1,308,496 - 1,308,496 - - -
Retained earnings 360,378 151,246 511,624 2,689,106 67,548 2,756,654
TOTAL EQUITY 5,490,691 (3,255,753) 2,234,938 15,205,398 67,548 15,272,946
notes to the financial statements continued  annual report 2007 | 73
(f) IFRS Balance Sheet adjustments
At 1 June At 31 May
2005 2006
££
Property plant and equipment under UK GAAP 2,017,883 1,089,277
Transfer of software to intangible assets (123,606) (67,848)
Property plant and equipment under IFRS 1,894,277 1,021,429
At 1 June At 31 May
2005 2006
££
Intangible assets under UK GAAP - -
Transfer of software from property, plant and equipment 123,606 67,848
Capitalisation of development costs 50,957 93,484
Intangible assets under IFRS 174,563 161,332
At 1 June At 31 May
2005 2006
££
Deferred tax asset under UK GAAP 812,005 1,231,099
Deferred tax on share options 115,576 2,111
Deferred tax on capitalised development costs (15,287) (28,047)
Deferred tax asset under IFRS 912,294 1,205,163
At 1 June At 31 May
2005 2006
££
Transfer of software from property, plant and equipment 123,606 67,848
Capitalisation of development costs 50,957 93,484
Intangible assets under IFRS 174,563 161,332
At 1 June At 31 May
2005 2006
££
Non-current trade and other receivables under UK GAAP - -
Transfer of long term element of accrued income 1,932,372 1,503,328
Non-current trade and other receivables under IFRS 1,932,372 1,503,328 74 | annual report 2007
At 1 June At 31 May
2005 2006
££
Current trade and other receivables under UK GAAP 7,506,816 7,455,366
Transfer of long term element of accrued income (1,932,372) (1,503,328)
Current trade and other receivables under IFRS 5,574,444 5,952,038
At 1 June At 31 May
2005 2006
££
Non-current borrowings under UK GAAP 1,520,488 528,122
Transfer of £1 redeemable preference shares from equity 71,000 -
Transfer of £1 convertible preference shares from equity 3,335,999 -
Non-current borrowings  under IFRS 4,927,487 528,122
At 1 June At 31 May
2005 2006
££
Share capital under UK GAAP 3,821,683 892,765
Transfer of £1 redeemable preference shares to borrowings (71,000) -
Transfer of £1 convertible preference shares to borrowings (3,335,999) -
Share capital  under IFRS 414,684 892,765
At 1 June At 31 May
2005 2006
££
Retained earnings under UK GAAP 360,378 2,689,106
Capitalisation of development costs (after amortisation) 50,957 93,484
Deferred taxation 100,289 (25,936)
Retained earnings  under IFRS 511,624 2,756,654
notes to the financial statements continued  company information
 Directors
Jim Horsburgh
Dr Ian Denley
Markus Bolton
Andrew Coll
Dr Christopher McLaren
Dr John Forrest
Thomas Chambers
Company secretary
Jane Conner
Registered number
01754990
Registered office
Brenchley House
Week Street
Maidstone
Kent ME14 1RF
Tel: 01622 691616
Fax: 01622 691241
E-mail: investors@systemc.com
Registered auditors
PricewaterhouseCoopers LLP
First Point
Buckingham Gate
Gatwick RH6 0PP
Principal bankers
Barclays Bank PLC
Maidstone Corporate Banking Centre
PO Box 427
40-46 High Street
Maidstone
Kent ME14 1TW
Nominated advisor and broker
Collins Stewart Europe Limited
9th Floor
88 Wood Street
London EC2V 7QR
Registrars and transfer office
Computershare Investor Services PLC
PO Box 859
Corporate Actions
The Pavilions
Bridgwater Road
Bristol BS99 1XZ
Share quotation
The Company’s shares are listed on
AIM, a market of that name operated
by the London Stock Exchange PLC.
Solicitors
Travers Smith
10 Snow Hill
London EC1A 2AL
annual report 2007 | 75 System C Healthcare PLC
Brenchley House 
Week Street
Maidstone
Kent ME14 1RF
t: 01622 691616
w: www.systemc.com
e: investors@systemc.com
© System C Healthcare PLC 2007