annual report  
financial statements
for year ended 31 may 2010
system c  annual report and financial statements for year ended 31 may 2010
annual report   
financial statements
for year ended 31 may 2010
system c healthcare plc 
brenchley house 
week street 
maidstone 
kent me14 1rf
01622 691616 
wwwsystemccom 
infosystemccom
© system c healthcare plc 2010 
information correct at time of going to press september 2010  system c  annual report and financial statements 2010
8 go online to access the 
2010 annual report and  
financial statements  
wwwsystemccomannualreport2010
content s
02
system c  annual report and financial statements 2010
annual report
3 mission and goals
4 financial highlights of the year
5 operating highlights of the year
6 chairman’s report
8 chief executive officer’s review
12 financial review
14 corporate responsibility statement
16 board of directors
18 directors’ report
22 corporate governance statement
26 directors’ remuneration report
32 independent auditors‘ report
financial report
34 group statement of comprehensive 
 income
35 group balance sheet
36 group statement of changes in 
 shareholders’ equity
37 group cash flow statement
38 company balance sheet
39 company statement of changes 
 in shareholders’ equity
40 company cash flow statement
41 notes to the financial statements
80 company information system c healthcare plc “system c” a leading supplier of health and 
social care solutions announces its results for the year ended 31 may 2010
celebrating its 27th year in 2010 system c specialises in the provision 
of health and social care information systems implementation services 
and consulting
o ur aim is to help improve care through the effective use of it solutions and 
innovative consulting services
mission and goals
system c aims to be a leader in supporting the evolving health and social 
care agenda by developing world class software delivering effective it 
deployment services and employing innovative consulting solutions
o ur vision is to use the expertise gained over many years to help care 
providers transform the delivery of health and social care within and outside 
the uk
o ur goal is to provide longterm value for all our major stakeholders including 
health and social care providers their patients and clients and our staff 
and shareholders t his means
who we are
03
annual report and financial statements 2010  system c
providing premium 
highvalue and leading 
edge healthcare and 
social service it solutions
providing teams 
of highly trained 
staff to help clients 
deploy and maintain 
all types of healthcare 
computer systems 
from every major 
supplier
helping our clients 
to maximise their 
efficiency and enhance 
their service to patients 
through our healthcare 
improvement and 
benefits management 
services
remaining an 
employer of choice 
in health and 
social care
o perating a 
financially stable 
and successful 
company major investment in nextgeneration 
medway products rewarded with key 
strategic contract wins
profit before taxation up 
32 to £54m 
2009 £41m
eps up 9 at 407 
pence 2009 372p
acquisition of liquidlogic limited in 
july 2009 for a total consideration 
of £102m giving system c entry 
into the social care it market
strong cash generation with a net cash 
position as at 31 may 2010 of £186m 
2009 £147m
04
fin an cial highlight s o f t he ye ar
revenues increased by 75 to £383m 
2009 £219m revenues excluding those 
from current year acquisitions increased 
by 44 to £315m 2009 £219m
acquisition of conscia enterprise systems limited in october 
2009 for a total consideration of £08m strengthening the 
group’s expertise in webbased technologies
total dividend increased by 14 to 075p for 
the full year 200910 was another good year across the system c group
op erat in g highlight s o f t he ye ar
05
annual report and financial statements 2010  system c
•	 our 	major	investment 	in	nextgenerat ion 	medway	
pr oducts 	is 	being	 r ewar ded	the 	gr oup	now	has	a 	
rich	suite	of 	heal t h 	and	social	car e	pr oducts 	which	
is	at tract ing	significant 	customer	inter est	and 	key	
strategic	contract	wins	gr oup	pr oduct	r evenues 	
incr eased	by 	215	over	t he	year	to	£206m	of	which 	
£139m	 was	at tributable	to	 or ganic	gr owt h		
•	 our 	r eputat ion 	for 	deploying	systems	–	bot h	our	
own	and	systems 	fr om	t hir d	part ies	–	on	t ime	and 	to	
budget	led 	to	str ong	demand	for	our	services 	work	
fr om	exist ing 	and	new	cl ients		 services	r evenues	
incr eased	by 	16 	over	t he	year	to	£178m	of	which	
£176m	 was	at tributable	to	 or ganic	gr owt h		
•	 the	 gr oup’ s 	r eputat ion	 for	advanced	technology	and	
successful 	 deployments	 was	 furt her	 enhanced 	 when 	 it	
was 	 named 	 worldwide 	 winner	 of	 t he	 pr est igious 	 2010	
micr osoft	 partner	 of	t he	 y ear 	awar d 	in	t he	 category	
‘publ ic	sector	heal t h 	 partner’	system	c 	won	 t he	
awar d	 for	its	 cl inical 	 dashboar d	 pr oducts	developed	
and	implemented	over 	t he	 course	of 	t he	 year	 in 	 over	
a	dozen	 nhs	t rusts		
•	 in 	 july 	 2009 	 system 	 c 	 acquir ed 	 liquid logic 	 limited	
to 	 cr eate 	 t he 	 uk’ s 	 first 	 major 	 heal t h 	 and 	 social 	 services	
suppl ier  	 the 	 two 	 companies 	 have 	 started 	 integrat ing	
pr oducts 	 and 	 have 	 pr oduced 	 t he 	 uk’ s 	 first 	 heal t h 	 and	
social 	 car e 	 l ink 	 under 	 t he 	 nhs 	 connect ing 	 for 	 heal t h’ s	
new 	 standar ds 	 for 	 systems 	 integrat ion 	 since 	 t he 	 year 
end 	 t he 	 new 	 government 	 has 	 announced 	 t hat 	 it 	 wil l	
be 	 going 	 out 	 to 	 consul tat ion 	 on 	 how 	 best 	 to 	 integrate	
heal t h 	 and 	 social 	 car e 	 system 	 c 	 is 	 uniquely 	 placed 	 t o	
meet 	 t his 	 nat ional 	 drive 	 for 	 high 	 qual ity 	 integrated 	 car e 06
chairman’ s repo rt
system c  annual report and financial statements 2010
introduction and highlights 
system c has once again achieved strong financial growth 
in the context of a very difficult economic environment 
revenues increased by 75 to £383m from organic 
growth as well as from acquisition an operating profit 
margin of 13 was achieved and the group closed 
the year with £186m cash an increase of £39m on 
20089 this includes cash balances from the acquisitions 
of liquidlogic limited and conscia enterprise systems 
limited during the year 
t his last year has been something of a milestone for the 
company in its strategy of growing the product side of its 
business o ur fiveyear investment in the next generation 
medway product suite has begun to bear fruit and at a time 
when the n hs it market is opening up to a much broader 
range of suppliers t he implementation of the medway 
clinical information system at aintree university hospital 
n hs foundation t rust has progressed well and according to 
expectations providing an important reference site for our 
electronic patient record system equally important is the 
news that system c has been selected by t he royal devon 
 exeter n hs foundation t rust to supply its medway order 
communications and electronicprescribing software t his 
represents a significant strategic win in one of the first major 
procurements outside the government’ s n ational programme 
for it
o ver the course of the year we have also significantly enhanced 
our social care product offering through the acquisition of 
liquidlogic t he acquisition of web specialist conscia in o ctober 
2009 gave us a strategic stronghold in the portal market   
product revenues increased by 215 from last year 113 
organic growth and now account for 54 of total revenues 
2009 30
o n the services side the company continues to deploy 
a wide range of third party systems for n hs t rusts across 
the uk we have remained heavily involved in deploying 
products from isoft and cerner under the n ational 
programme for it with n hs t rusts cfh and local service 
providers as clients o ur healthcare improvement team 
continues to deliver results with a number of contract wins at 
n hs t rusts in england and in n orthern ireland 
in the independent healthcare sector contracts with leading 
providers such as circle health and care uk continue to 
perform well
acquisitions
in july 2009 we acquired liquidlogic limited an established 
provider of it solutions to the social care market in the uk 
for a final total consideration of £102m in cash t hrough this 
acquisition we have created the first health and social care 
it company of significant scale in the uk t he liquidlogic 
products are a good complement for medway and have 
already been integrated with and sold alongside our existing 
product range since the year end the government has made 
clear in its white paper for the n hs that it would be consulting 
widely on the seamless integration of health and social care 
which it regards as ‘essential for patient outcomes’
in conjunction with the liquidlogic acquisition system c 
successfully raised £120m through a placing of ordinary 
shares in the company in order to fund further expansion 
t he placing was undertaken at a small discount to the mid 
market price and we are very pleased to have received 
continued and enthusiastic support for our strategy from 
both our existing shareholder base and from a number of 
new institutional investors
“
we are beginning to reap the rewards of our  
major strategic investment in the next  
generation of our medway product range
jim horsburgh
 
“ chairman’ s repo rt
07
annual report and financial statements 2010  system c
in o ctober 2009 we acquired conscia enterprise systems 
limited for £08m in cash conscia is a web solutions company 
based in glasgow specialising in providing premium web 
applications including ecommerce and mobile solutions to 
both the private and public sectors clients include n hs24 
n hs n ational services scotland n hs education for scotland 
the scottish government health department and a number 
of regional health boards
conscia is the fifth acquisition system c has completed in 
the last three years we will consider further acquisitions 
where they bring complementary products new clients for 
the wider group’s products and services and people who 
share our commitment to health and social care 
people and the board
t he board would like to take this opportunity to thank 
system c’s employees for the commitment and hard work 
that made the year such a success we are primarily a 
people business o ur reputation as a firstrate delivery 
organisation is built on the dedication and professionalism 
of our employees 
we take our responsibilities to our staff extremely seriously 
and we are proud that system c has been named one of the 
top 100 companies to work for in the uk winning a place 
in the 2010 sunday t imes best 100 companies to work for 
survey our 3rd such award 
in january 2010 our n onexecutive director t homas 
chambers steppedin as acting finance director following 
the departure of andrew coll o n 12 july 2010 we 
welcomed hedley mayor as our new finance director 
system c is committed to high standards of corporate 
governance as an aimlisted group we are not bound 
by the uk corporate governance code formerly “the 
combined code 2008” but have voluntarily adopted 
many of its provisions
dividends
t he board is recommending a final dividend of 050p 2009 
044p giving a total dividend of 075p 2009 066p for the 
year t his represents an increase of 14 on 2009 and reflects 
the strong financial performance and cash generation of the 
business  if approved by the shareholders at the annual 
general meeting on 10 n ovember 2010 the final dividend 
will be paid on 15 n ovember 2010 to those shareholders on 
the register on 15 o ctober 2010
current trading and outlook
t he structural changes proposed for the n hs in the 
government’s white paper equality and excellence 
liberating the nhs are extensive and likely to impact most 
areas of healthcare provision and associated services health 
minister simon burns has since made clear that all acute 
t rusts will be free to manage their own it projects on the 
principle of connected systems and interoperability with a 
plural system of suppliers t he details of the government’s 
strategy will become clearer again over the coming months   
t he market for it products in the n hs is already opening 
up to a wider range of suppliers t he company is currently 
experiencing a significant increase in interest for its 
hospital products and is active in a number of pasepr 
procurements as we made clear in our trading update 
in september negotiation periods for these large scale 
contracts are inevitably protracted and revenues from sales 
of the new hospitalwide system are expected to come 
on stream in the second half of the current financial year 
and beyond t he opening up of it procurements following 
changes in the n ational programme for it is a significant 
opportunity for the group and we intend to take a long term 
view to maximise our position in such a market 
t he directors recognise that in the short term government 
spending cuts present a risk to revenues particularly 
services revenues t he timing of n hs procurements 
and deployments will have a significant impact on the 
company’s performance during the current year as system c 
continues its transition into a productled company during 
this period the company will be focused in particular on 
cost management to ensure that costs remain in line with 
the revenue streams as at 31 may 2010 the company had 
net cash balances of approximately £186 million
t he board considers there to be significant product 
opportunities in the medium term which will lead to greater 
prominence of product revenues improved margins and 
increased predictability in services utilisation  
jim horsburgh
chairman
24 september 2010 system c  annual report and financial statements 2010
08
chief execut ive o fficer’s review
introduction
i was very pleased with the performance of the group 
across the board this year as we made significant 
progress in all areas this is very much a time of 
transition for system c as we adjust to the slowdown 
in national programme deployment activity and the 
corresponding rise in large system procurements by 
individual nhs trusts there is no doubt that the next 18 
months will be a key time in the group’s development
as i have explained in previous annual reports the group 
has been investing heavily in product development over the 
last five years we have been working to a detailed strategy 
to broaden the capability of the group through a long
term investment programme aimed at delivering sustained 
profitable growth at the core of this strategy was the need 
to drive organic growth through the development of new 
products enhanced by our services capability and capacity 
and supported by an ongoing programme of acquisitions 
i am excited to see our next generation medway product 
suite come to the market and secure early contract wins at a 
time when the market is opening up 
products – new technologies for changing markets
t he product division has performed very well in the year 
with revenues of £206m 2009 £65m it now accounts for 
approximately 54 of total group revenues 2009 30 
we are pleased with this progress and expect to see an 
increasing percentage of our revenues coming from our own 
products in the coming years 
we are delighted with the market response to our next
generation medway software demonstrations of the software 
have been wellreceived and we achieved a significant strategic 
win with the royal devon  exeter n hs foundation t rust to 
supply our medway order communications and electronic
prescribing software a first step in the implementation of a 
complete epr system 
o ne of medway’s key selling points is that it is very advanced 
technically and this was recognised by microsoft in july 
when system c was named worldwide winner of the 
prestigious 2010 microsoft partner of the year award in the 
category ‘public sector health partner’ t he award recognises 
outstanding innovation and solutions which deliver real 
benefits to a customer’s business and system c was chosen 
from nearly 3000 entries drawn from all around the world 
t he entire medway product range – which also includes pas 
epr and numerous departmental systems including ae and 
maternity – is based on the latest microsoft technologies
“
t he opportunities for our new product 
deployments are very exciting
 
dr ian denley
“
2010 microsoft worldwide partner conference chief execut ive o fficer’s review
09
annual report and financial statements 2010  system c
conscia acquired in o ctober last year successfully 
developed a new health portal for n hs scotland which 
offers health and social care professionals online access 
to a vast knowledgebase of clinical guidelines evidence 
materials training and professional development resources 
launched by n icola sturgeon scottish cabinet secretary 
for health and wellbeing the portal is also aimed at 
patients and members of the public giving them the latest 
information about a condition for example symptoms 
and treatment in addition to providing access to over 
12 million resources the portal offers a range of 
collaborative features such as social bookmarking shared 
interests and tag clouds
another landmark was the collaboration with gp software 
supplier emis which has resulted in university hospital 
aintree in merseyside being able to seamlessly link patient 
information from 100 gp practices representing 450000 
patients to clinicians working across all of its urgent care 
services t he project – the first in the uk to link two different 
primary and secondary care it systems on this scale – is 
designed to improve patient care and deliver significant 
efficiencies by providing vital patient information at the 
point of need
in 2008 we were successful in our bid to be awarded 
framework contracts in 16 categories in the uk government’s 
additional services capability and capacity ascc 
procurement t his was an important win for the company 
because only companies included in the framework contract 
catalogue are eligible to bid in ascc procurements
system c has won a number of high value ascc contracts 
since that time most notably last year’ s dashboard contract for 
n hs connecting for health ascc procurements particularly 
for t rusts looking to replace pas epr and clinical systems in 
a streamlined procurement process have been slower off the 
ground than anticipated however in recent months the pace 
has picked up considerably n hs connecting for health is now 
running its own ascc procurement for community ambulance 
and acute systems on behalf of a large number of t rusts in the 
south of england in addition many individual trusts are also 
running or planning ascc procurements

t he year also marked our 17th year of partnership with 
aintree university hospitals n hs foundation t rust building a 
fullyintegrated pasepr solution across one of the country’s 
largest acute t rusts t he partnership has already delivered 
many millions of pounds of benefits to aintree and the t rust 
is now looking to realise a further £5m over the lifetime of 
the next generation of medway software t he close working 
relationship with aintree has enabled system c to engage in 
continuous development and enhancement of its medway 
pasepr products to meet the n hs’s evolving needs and to 
capitalise on opportunities offered by new technology 
o ver the course of the year we celebrated our 50th medway 
deployment when mid cheshire hospitals n hs foundation 
t rust went live with a medway maternity information system
o ther recent product installations have included multiple 
deployments of the company’s clinical dashboard web 
portal maternity accident and emergency and other 
departmental modules t he latter stages of the deployment 
of a wide range of health and social care systems on behalf 
of the isle of man government have also gone to plan 
and it is expected that the final elements of this largescale 
programme will be completed successfully by the end of 
calendar year 2010
liquidlogic has begun integrating its product and marketing 
efforts with system c’s healthcare ranges and has made 
its first sale of a medway dashboard to a social care client  
system c and liquidlogic have also produced the uk’s 
first health and social care link under n hs connecting for 
health’s new standards for systems integration spending 
constraints present a challenge in the social care market but 
the procurement pipeline for social care systems is strong  system c  annual report and financial statements 2010
chief execut ive o fficer’s review

10
services – worldclass delivery capability and capacity
services revenue at £178m is 16 higher than last year 
2009 £154m we continue to have a wellearned 
reputation for providing successful deployments both on 
time and on budget across our own products and across 
a range of third party systems system c staff have been 
involved with many of the major acute system golives 
during the year including lorenzo and cerner millennium 
deployments t his breadth makes us unique in our market
in recent months we have seen a slowing down of new 
services enquiries and of ongoing work from existing clients 
as public sector budgets come under further review we 
have taken steps to control our cost base in the short term 
while keeping the ability to expand our services capability 
as the economy recovers however our services capacity 
and capability is also a key selling advantage for our product 
sales team and we are expecting substantial increases 
in medwayrelated services activity with the first wave of 
procurements
key performance indicators kpis
t he directors believe that the kpis of the business are 
revenues average revenue per head gross margins 
operating profit margins earnings per share and cash 
generation t his information is summarised below
 year ended 31 may 2010 2009
 revenue £383m £219m
 average revenue per head
1
 £112668 £106311
 gross margin
2
 57 56
 margin on profit from operations
3
 13 16
 basic eps 407p 372p
 cash generated from operations £76m £38m
n ote 1  average revenue per head is defined as the total revenue in the 
year divided by the average monthly number of employees
n ote 2  gross margin is defined as gross profit divided by total revenue
n ote 3  margin on profit from operations is defined as the profit from 
operations divided by total revenue
t he board sets target measures and monitors progress 
against these measures and other operational measures on 
a regular basis 11
annual report and financial statements 2010  system c
chief execut ive o fficer’s review
future strategy 
o ur mediumterm strategy remains an ongoing transition 
from a servicesled to a productbased company in order to 
continue improving the quality of our earnings and ensure 
profitable growth over the coming years since the year end 
the government has published its white paper for the n hs 
equality and excellence liberating the nhs
we are currently waiting for the promised consultation 
exercises and primary legislation but we believe the white 
paper points to significant opportunities for system c both 
in product and service terms it makes clear its commitment 
to giving n hs t rusts greater freedom and autonomy and 
to encouraging all n hs t rusts to benefit from the greater 
power and independence conferred by foundation status 
• o n the service side we envisage opportunities for 
system c’s healthcare improvement services t he white 
paper is clear that over the next five years the n hs ‘will 
only be able to increase quality through implementing 
best practice and increasing productivity’
• o n products it talks about an information revolution 
we anticipate a substantial requirement for new it 
systems to deliver information to patients about hospital 
and clinical team performance and about conditions 
and treatment to provide clinical teams with the means 
to measure their promised new outcome targets to 
assist gps in their proposed new role as commissioners 
of services 
• we also welcome the very clear commitment to 
integrating health and social care t he white paper 
states “it is essential for patient outcomes that health 
and social care are better integrated at all levels of the 
system”  it was our belief in the truth of this statement 
that drove our acquisition of liquidlogic last year we 
intend to play a full part in the forthcoming consultation 
process on achieving this 
• finally we welcome the commitment to plurality of 
systems which we expect will ensure that the current 
increase in procurement levels continues
health and social care budgets in the public and private 
sectors are inevitably under intense review in addition the 
infrastructure changes proposed in the white paper are 
extremely wide reaching and will lead to extensive change
however we remain confident of the significant opportunites 
for the company in the medium term and beyond  
specifically we have seen a big increase in the number of 
individual hospital trusts looking to purchase pas epr and 
clinical systems t he surge in activity has been created by a 
combination of factors many acute trusts are using systems 
that are 20 years old or more in many cases the new systems 
are critical to generating the efficiency benefits that the n hs 
now has to deliver and many t rusts had been released from 
their central obligations to deploy systems from the n ational 
programme for it  since the year end the government has 
made it clear that all t rusts will be free to make their own it 
purchasing decisions
o ur product sales pipeline has never been healthier 
uncertainty surrounding the timing of these opportunities 
means that we need to remain flexible and adaptable and 
continue delivering innovative and creative solutions to clients
system c’s products have been designed in order to help 
manage change and introduce efficiency in health and 
social care provision we believe that the drive towards 
high quality services within tightening budgets offers both 
product and consulting opportunities for the group
dr ian denley
chief executive o fficer
24 september 2010
equity and excellence 
liberating the 
nhs  system c  annual report and financial statements 2010
fin an cial review
12
 year ended 31 may  2010 2009
 system c products £206m £65m
 system c services £178m £154m
 total group revenue £383m  £219m
 gross profit £220m £122m
 profit from operations £51m £34m
 n et financial income £03m £07m
 profit before tax £54m £41m
 tax £11m £09m
 profit after tax £43m £32m
 basic eps  407p 372p
system c group has achieved another strong year of 
growth particularly in its product division where we 
have seen the impact of acquisitions and the initial 
deployments of the new medway product suite group 
revenue was up by 75 to £383m 2009 £219m profit 
from operations rose by 50 to £51m 2009 £34m 
and earnings per share grew by 035p to 407p per share 
2009 372p
revenue
t he group revenues of £383m increased by £164m year on 
year t his was driven by organic growth principally from the 
product division and from the recent product acquisitions 
liquidlogic and conscia product revenue now accounts 
for 54 of total revenues compared with 30 of total group 
revenues last year future growth is likely to be focused on 
product revenues as we deploy the next generation of the 
medway product suite 
we continued to focus on expansion of our client base 
within the public and private sectors during the year we 
delivered core phases of the aintree contract completed 
deployments under the isle of man contract and delivered 
key development work for the n hs under the gateway and 
dashboard initiatives t he services division has continued 
to deliver directly to n hs t rusts as well as working for the 
department of health and local service providers under the 
n ational programme for it 
gross margin
gross margin was circa 57 broadly in line with the prior 
year of 56
profit from operations
profit from operations was £51m a 50 increase on 2009 
£34m t he increase in revenues and gross margins combined 
with an increase in operating costs led to a decrease in the 
margin on profit from operations to 13 from 16 in 2009
t he growth in overall research and development expenses 
which includes £16m 2009 £12m of capitalised costs and 
£39m 2009 £19m of expenses reflects the acceleration in 
investment in the medway product range
amortisation of acquired intangible assets has increased 
by £07m during the year as a result of the acquisitions of 
bluestar uk group limited and liquidlogic limited
t he growth in overall administrative expenses includes 
£03m in respect of amortisation of intangibles as well as 
the impact of the acquisition of bluestar uk group limited 
liquidlogic limited and conscia enterprise systems limited 
t he group continues to focus on ensuring that the core cost 
base is maintained at an appropriate level particularly in 
the current economic environment to this end the group 
conducted a cost rationalisation programme in july 2010 
which will reduce annual operating costs by £12m costs will 
continue to be closely monitored
“
product revenue has grown to 54 of revenues 
up from 30 last year
 
 
thomas chambers
“ 13
annual report and financial statements 2010  system c
fin an cial review
net financial income 
interest receivable on customer contracts relates to our long 
term contracts where an element of the charge includes a 
recovery for finance costs interest receivable also includes 
interest generated on our cash balances 
despite year end cash balances of £186m interest 
receivable on cash balances continued to be low in the year 
due to low interest rates on deposits
taxation
t he taxation charge for 200910 was £11m equating to 
20 of pbt continuing to reflect the benefit of research and 
development tax credits
earnings per share
basic earnings per share increased to 407p 2009 372p 
t he weighted average number of shares during the 
period used for the eps calculation was 105294484 2009 
87289846 including the placing of shares in august 2009
dividends
an interim dividend of 025p 2009 022p was declared and 
paid during the year t he board proposes a final dividend of 
050p 2009 044p per share bringing the total for the year 
to 075p per share 2009 066p
cash and treasury
t he group continued to generate strong cashflow with net cash 
generated from operating activities of £63m 2009 £38m
o n 15 july 2009 the group acquired liquidlogic limited for 
an initial cash consideration of £102m t he acquired net asset 
fair value of £47m included £19m of cash n o further deferred 
consideration is payable for the period ended 30 june 2010 as 
specific performance criteria have not been met
o n 7 o ctober 2009 the group acquired conscia enterprise 
systems limited for a total cash consideration of £08m 
t he acquired net asset fair value of £98k included £38k of cash 
t here was no deferred consideration on this acquisition
in conjunction with the liquidlogic acquisition the group 
undertook a placing in which £12m was raised through the issue 
of a further 25 million ordinary shares in system c healthcare plc 
at 48p a loan of £153m from the placing proceeds was used 
to fund the purchase of 31m ordinary 1p shares by the system 
c healthcare plc employee benefit t rust placing costs of 
£07m resulted in a net cash inflow of £97m t his was approved 
by shareholders on monday 3 august 2009 and the formal 
admission to the aim market took place on 5 august 2009 
a further £235000 was raised as a result of share options 
exercised in the year see n ote 17 of financial statements
cash flow forecasts are regularly prepared and reviewed by 
management to ensure liabilities can be met as they fall due
 year ended 31 may  2010  2009
 n et cash generated from operations £63m £38m
 n et financial income £03m £08m
 acquisition of subsidiaries £99m £05m
 capital expenditure  £20m £13m
 net cash inflow before
 financing activities £53m £28m
 financing activities £92m £05m
 net cash inflow £39m £23m
“
we continue to focus on expansion of 
our client base within the public 
and private sectors
 
hedley mayor
“ system c  annual report and financial statements 2010
co rpo rate respon sibilty st ate ment
14
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 
business on our staff and on the health and social care 
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 
o ur employment policy focuses on recruiting and retaining 
highcalibre 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 n hs
we understand that to achieve the most from our 
employees they must receive the best support and 
encouragement possible in a supportive environment  
personal development and employee wellbeing are of 
paramount importance to the group system c operates a 
comprehensive system of staff development and appraisal 
and this process is intended to benefit both the individual 
and the group t his 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 ‘wellbeing’ and knowledge sharing initiatives amongst 
teams and groups from across the organisation 
system c is accredited under the investors in people 
“iip” scheme providing external recognition of 
our commitment to training and development 
equal opportunities
we are committed to providing equal opportunities for 
all employees and applicants for employment and to 
promoting 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 an interest in the shares of 
system c either directly or indirectly through share options 
and through the sharesave schemes  in march 2010 we 
introduced a further sharesave scheme in which over 150 
employees participated including two executive directors 
markus bolton and ian denley
 
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
“
personal development and employee 
wellbeing are of paramount importance 
to the group
 
jane conner
“ 15
annual report and financial statements 2010  system c
co rpo rate respon sibilty st ate ment
health and safety
we are committed to ensuring the highest standards 
of health and safety for all our employees t he group 
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 they are based in one 
of system c’s offices travelling between sites working at 
customer locations or elsewhere
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 group’s operations on its surroundings 
system c adheres to an environmental policy which is 
regularly updated and communicated to all employees 
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 officebased 
staff a key product 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 
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 t he 
working processes surrounding these standards are fully 
documented and published on the group intranet and a 
fulltime quality and data security manager ensures our 
adherence to both quality and security standards system c 
has enterprisewide accreditation to iso 27001 iso 9001 
and t ickit standards and its t raining academy holds the 
institute of it t rainers accreditation
social and ethical
we have always encouraged an ethos of giving not least 
because we operate in an industry dedicated to caring and 
we employ people who embrace this philosophy 
system c itself donates every year under its own programme 
of annual donations in addition 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
we have continued to implement procedures that assist 
in the adoption of best practice in terms of reporting and 
communication o ur website has been enhanced to include a 
section devoted to investors and this will be continually updated
suppliers
o ur work often involves a great degree of interaction with 
other suppliers and partners and we value a positive working 
relationship o ur policy is to pay suppliers promptly and to 
seek to foster constructive transparent and preferably long
term commercial relationships
dr ian denley
chief executive o fficer
24 september 2010
jane conner
company secretary
24 september 2010 system c  annual report and financial statements 2010
1 markus bolton
2 hedley mayor
3 dr ian denley
4 t homas chambers
5 jane conner
6 jim horsburgh
7 dr christopher mclaren
8 dr john forrest
1
6
2
7
3
8
4
bo ard o f directo rs
16
5
markus bolton
sales and strategy director
aged 53
markus is one of the uk’s leading 
specialists in the development and 
delivery of clinically focused enterprise
wide patient management systems for 
the n hs 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 n hs 
it issues markus founded system 
c in 1983 and it has since 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 market opportunities
hedley mayor
finance director
appointed 12 july 2010
aged 46
hedley joined system c as finance 
director in july 2010 he was previously 
with o ctopus investments where he 
was the director of finance over a 
period of very fast growth prior to 
o ctopus hedley spent eleven years 
with baring private equity partners 
initially as the partner for finance 
and planning where the group grew 
from two offices in europe to over 
thirty globally then as an investment 
partner on the baring english growth 
fund – a uk focused private equity 
fund investing in smes hedley is a 
chartered accountant and trained with 
horwath clark whitehill
dr ian denley
chief executive o fficer
aged 46
ian has been with system c since 1997 
prior to taking on his current role as 
chief executive o fficer ian worked as 
director of development where he was 
responsible for the strategic direction 
of the medway product range and 
latterly as director of o perations where 
he was responsible for the group’ s 
implementation and customer support 
services ian was appointed chief 
executive o fficer in 2003 and since then 
has overseen the group’ s expansion 
into the professional services market 
its listing on aim and its continued 
investment in health and social care 
it products ian is responsible for the 
group’ s strategic operations as well as 
leading the group’ s ma strategy he 
is a member of the intellect healthcare 
council and has a phd in human 
computer interaction 17
annual report and financial statements 2010  system c
bo ard o f directo rs
thomas chambers
n onexecutive director n a r 
also acting finance director 
4 january 2010 to 12 july 2010
aged 49
t homas joined system c as a 
n onexecutive director in february 
2005 and is chairman of our audit 
committee until april 2009 he was 
chief financial o fficer for symbian 
limited provider of operating systems 
for advanced mobile phones having 
held other roles at symbian including 
head of software engineering he 
arranged the sale of symbian to n okia 
o yj in june 2008 prior to symbian 
t homas was the chief financial o fficer 
of first telecom group plc arranging 
its 1bn sale to atlantic t elecom group 
plc in 2000 t homas was the chief 
financial o fficer of robert walters plc 
through its listing on the london stock 
exchange in 1996 and arranged its sale 
to us n asdaq listed staffmark inc in 
1998 he spent six years in ma and 
corporate finance roles with dresdner 
kleinwort benson limited t homas 
has previously held a number of non
executive and consulting roles and he 
is currently a member of council and 
finance committee of the university 
of surrey and a n onexecutive director 
of spark vct 2 plc he is a fellow of 
the institute of chartered accountants 
having qualified with price waterhouse 
and is an associate of t he association 
of corporate t reasurers
jane conner
company secretary and director of 
human and corporate resources
aged 47
jane joined system c in 1985 she 
is responsible for developing and 
implementing the group’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 system c healthcare plc
jim horsburgh
n onexecutive chairman
aged 58
jim has been with system c since 
2000 he was previously senior vice 
president of visio corporation which 
was listed on n asdaq and he played 
a key role in its sale to microsoft 
for approximately 15 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
dr christopher mclaren
n onexecutive director n a r
aged 76
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 current 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 t reasurer of the 
english speaking union from 19962002 
and from 2008 and honorary secretary 
from 2005 he is chairman of the samuel 
courtauld t rust
dr john forrest
n onexecutive director n a r
aged 67
john joined system c as a n on
executive director in february 2005 he 
graduated with an ma from cambridge 
university and a dphil from o xford 
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 
nt l becoming its first chief executive 
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 
o mniglobe n etworks ltd canada as 
well as prochancellor 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
note
n  n omination committee
a  audit committee
r  remuneration committee system c  annual report and financial statements 2010
directo rs’ repo rt
18
the directors have pleasure in presenting their annual 
report and the audited financial statements of the group 
for the year ended 31 may 2010 system c healthcare 
plc the “company” is a public 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 the group consists 
of system c healthcare plc and its wholly owned 
subsidiaries liquidlogic limited and conscia enterprise 
systems limited these financial statements are presented 
in sterling the functional currency of the group
principal activities review of business and 
future developments
t he group’s sole activity during the year was the design 
development and implementation of computer hardware 
and software in the healthcare and social care sectors
t he chairman’s report the chief executive o fficer’s review 
and the financial review give further information regarding 
the performance of the group during the year ended 
31 may 2010 and the future prospects of the business
acquisitions
during the year the company purchased the entire issued 
share capital of liquidlogic limited which is engaged in 
the provision of it solutions to the social care sector and 
conscia enterprise systems limited which is engaged in 
the provision of webbased solutions primarily to the 
healthcare sector further details of the acquisitions are 
given in n ote 21
dividends
an interim dividend of 025p per ordinary share was declared 
and paid in the year 2009 022p per ordinary share 
t he directors have recommended a final dividend of 050p 
per ordinary share 2009 044p per ordinary share t he 
group’s accounting policy for dividends is set out in n ote 1
directors and their interests
t he directors of the group who served during the year 
ended 31 may 2010 are listed below  all except andrew coll 
have been directors for the whole of the year ended on that 
date
• jim horsburgh
• dr ian denley
• markus bolton
• andrew coll resigned 31 december 2009 
• dr christopher mclaren
• dr john forrest
• t homas chambers
o n 12 july 2010 hedley mayor was appointed as the group 
finance director
details of the directors’ interests in the share capital and 
share options of system c healthcare plc are given in the 
directors’ remuneration report
research and development
t he board considers that the group’s research and 
development activity plays an important role in the 
operational and financial success of the business
t he group continues to commit resources to researching 
potential improvements in electronic patient record systems 
o ngoing 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 n ote 1o to the 
financial statements and the amounts incurred are disclosed 
in n otes 5 and 9 to the financial statements
creditor payment policy
t he group has agreed a variety of payment terms with its 
suppliers it is and will remain the policy of the group 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
t he average creditor payment period for the company during 
the year ended 31 may 2010 was 31 days 2009 30 days 19
annual report and financial statements 2010  system c
directo rs’ repo rt
financial risk management and financial instruments
t he group’s policies and strategies in relation to financial 
risk and financial instruments are explained in n ote 16 to the 
financial statements 
accounting policies in respect of financial instruments are 
detailed in n ote 1u to the financial statements
business risk factors
t he business is influenced by a number of key risks and 
the financial and operating performance of the business 
can be adversely affected by these risks and other risks not 
mentioned that may be beyond the control of the company
t he board continually reviews risk through its own systems 
and controls and where possible mitigates the risks that 
may impact our business prospects people financial results 
and share price t he principal risks are described below
public sector spendingpolitical changes 
t he scale of public spending cuts ahead will not be clear 
until the comprehensive spending review is published 
in o ctober 2010 we firmly believe that technology is 
an essential enabler of more effective patient care and 
can lead to considerable economic efficiency savings 
investment in it products services and infrastructure is key 
in helping the health and social care markets to achieve 
strategic objectives as well as the detailed targets against 
which they are constantly monitored
n evertheless we acknowledge that economic constraints 
remain a risk and in order to mitigate against this we have 
further broadened the scope of services activities that we 
undertake invested in new product ranges to address 
different needs within the markets as well as expanding our 
client base which includes central government local trust 
providers social services departments as well as private 
healthcare providers
timing of product sales
a significant number of t rusts have started procurement activity 
in order to replace their pas and epr systems and the company 
is well placed to win these procurements we are already seeing 
significant interest for our nextgeneration medway products 
however  it should be noted that large procurements take many 
months to run and there is a risk around the timing of revenues 
associated with new contract wins 
staff retention
despite recent economic uncertainty we recognise that 
there is demand from other participants in the market to 
attract the best people with the relevant it healthcare 
experience we are addressing the potential associated risks 
to the business by offering a wide range of remuneration 
benefits by investing in training and development and 
combining this with a focus on the individual and their 
career development t hese efforts contributed towards the 
group’s reaccreditation to the investors in people scheme in 
march 2010
delivery
o ver many years system c has built a strong reputation for the 
successful delivery of it products and services to the healthcare 
sector o ur products and services operate in intense lifecritical 
environments and any failure to meet contracted commitments 
andor client expectations could damage our reputation and 
impact on our financial 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 can have a negative impact on revenue we are 
focusing substantial efforts on broadening our client base 
as well as broadening our product range and consultancy 
offerings t his is being done in order to mitigate this risk 
going forward
accreditation
much of our work relies on maintaining accreditations to 
international standards such as the iso 9001t ickit quality 
assurance standard system c employs a fulltime quality 
manager to ensure adherence to quality standards to 
monitor progress against improvement initiatives and to 
monitor customer satisfaction t he group has been 
iso accredited since 1999 and was recertified in the 
current year
 system c  annual report and financial statements 2010

directo rs’ repo rt
20
acquisitions
we recognise that selected acquisitions will play a key 
role in future growth of the business as illustrated by the 
acquisitions during the year of liquidlogic and conscia 
t here are inherent risks in acquiring businesses and we 
are in the process of integrating both companies into 
the system c group in order to ensure that our strategic 
objectives and targets are achieved  
share capital and share issues
details of share capital and shares issued during the year are 
given in n ote 17 to the financial statements
employees health safety and environment
t hese areas are discussed in detail in the corporate 
responsibility statement
political and charitable donations
t he group made no political donations during the year 
2009 £nil charitable donations amounting to £13545 were 
made during the year 2009 £6790 charitable donations 
have been made to a variety of organisations but mainly 
focused in the area of healthcare
post balance sheet events
details of post balance sheet events are given in n ote 24 to 
the financial statements
substantial interests in shares
as at 31 august 2010 the company had been notified of the 
following holdings of 3 per cent or more in its ordinary shares 21
annual report and financial statements 2010  system c
directo rs’ repo rt
directors’ third party indemnity
t he company has provided an indemnity for its directors 
and the secretary which is a qualifying t hird party indemnity 
for the purpose of the companies act 2006
going concern
after making appropriate enquiries the directors believe 
that the group and the company has adequate resources to 
continue in operational existence for the foreseeable future 
consequently the directors believe that it is appropriate 
for the consolidated and parent company’s financial 
statements to continue to be prepared on the going 
concern basis
annual general meeting
t he notice convening the annual general meeting to be 
held at brenchley house week street maidstone kent 
me14 1rf at 1pm on 10 n ovember 2010 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 o rder of the board
jane conner
company secretary
24 september 2010
   no shares at  issued
   3182010 capital
1 blackrock investment management uk ltd 6797884 585
2 artemis investment management ltd 6778298 583
3 o ctopus investments limited 6571806 566
4 m  g investment management ltd 6442976 554
5 liontrust asset management plc 6203082 534
6 gartmore investment management limited 5935284 511
7 system c healthcare employee ss 5387741 464
8 legal  general investment management ltd uk 4491667 387
9 schroder investment management ltd sim 4451298 383
10 markus bolton director 4174324 359
11 credit suisse asset management fund service 3908333 336
12 abrir capital advisors ag 3905437 336
13 investec asset management ltd 3750000 323
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 system c  annual report and financial statements 2010
co rpo rate go vern an ce st ate ment
22
principles of good governance
as an entity quoted on aim system c is not required to 
comply with the uk corporate governance code formerly 
“the combined code 2008” the “code” however 
following the admission of its shares to aim in 2005 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
further details of the uk corporate governance code 
formerly “the combined code 2008” can be obtained 
from the financial reporting council website
the board
t he board has ultimate responsibility and accountability 
for the group’s operations during the year the board 
comprised the chairman the chief executive o fficer the 
sales and strategy director the finance director and three 
nonexecutive directors 
during the year 11 board meetings two audit committee 
meetings and five remuneration committee meetings were 
held t here was one meeting of the n ominations committee 
held in this financial year t he directors attended these 
meetings as follows
t he specific responsibilities reserved to the board include 
but are not limited to 
• setting strategy and approving an annual budget and 
mediumterm projections 
• reviewing operational and financial performance 
• approving any acquisitions divestments and material 
capital expenditure 
• reviewing the group’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 group 
• 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
 director board audit remuneration nominations
  meetings committee committee committee
 jim horsburgh 10  2 3 
 dr ian denley 11     
 markus bolton 11   
 andrew coll resigned 31 december 2009 4 1   
 dr christopher mclaren 11 2 5 1
 dr john forrest 10 1 5 1
 t homas chambers 10 2 4  23
annual report and financial statements 2010  system c
co rpo rate go vern an ce st ate ment
t he board believes its current structure is appropriate for 
the scale of the business and enables the group to be 
managed efficiently
t he 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
t he directors also have access to the advice and services 
of the company secretary t he company secretary is 
responsible for ensuring that board procedures are followed 
and that applicable rules and regulations are complied with
t he group 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 
nonexecutive directors
different individuals hold the posts of chairman and 
chief executive o fficer and there is a clear division of 
responsibilities
t he chairman is responsible for leading the board and 
ensuring its effectiveness t he chief executive o fficer 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
t he board is balanced by an appropriate n onexecutive 
element all of the n onexecutive 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 judgment  
during the period  4 january 2010 to 12 july 2010 t homas 
chambers took the role of acting finance director  during 
this period of time t homas chambers was an executive 
director of the company
professional development
t he chairman is responsible for processes to ensure that 
directors keep their skills and knowledge up to date and 
to encourage their professional development t he group 
ensures that adequate time and financial resources are 
available for directors to attend appropriate training n ew 
directors are encouraged to participate in the group’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 group through a variety of means 
including the intranet newsletters site visits business 
events and attendance at appropriate stakeholder meetings
relations with shareholders
t he chairman chief executive o fficer and finance director 
including t homas chambers for the period 4 january 2010 to 
12 july 2010 are the principal points of contact for investors 
analysts fund managers media and other interested 
parties access is available to the n onexecutive directors 
if this is required meetings with analysts and institutional 
investors are held following the interim and preliminary 
results announcements t he board is kept appraised about 
shareholder relations and has full access to reports from the 
company’s nominated adviser charles stanley and financial 
public relations advisors maitland consultancy
board committees
t he 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 t hey 
are the audit committee a remuneration committee and a 
n ominations committee 
a majority of the members of the committees are 
independent n onexecutive directors 
 system c  annual report and financial statements 2010

co rpo rate go vern an ce st ate ment
24
audit committee
t he audit committee is chaired by t homas chambers 
during the period 4 january 2010 to 12 july 2010 whilst 
t homas was acting finance director dr john forrest took 
the role as acting chairman of the audit committee and 
also comprises dr christopher mclaren and dr john forrest
n o members of the committee have any links with system c’ s 
external auditors t he audit committee formally meets 
two times per year and otherwise as required t he audit 
committee considers all matters relating to financial controls 
and reporting 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 t he ultimate responsibility 
for reviewing and approving the annual report and financial 
statements and interim statements remains with the board 
t he chairman chief executive o fficer other directors and 
representatives from the finance function may attend and 
speak at meetings of the audit committee
pricewaterhousecoopers llp have been the company’s 
auditors for many years t he audit committee considers that 
the relationship with the auditors is working well and remains 
satisfied with their effectiveness accordingly it has not 
considered it necessary to date to require the firm to tender 
for the audit work t he external auditors are required to rotate 
the audit partners responsible for the group and subsidiary 
audits every five years t here are no contractual obligations 
restricting the company’s choice of external auditor
details of the amounts paid to the external auditors during 
the year for audit and other services are set out in n ote 5 to 
the financial statements
remuneration committee
t he remuneration committee is chaired by dr christopher 
mclaren and also comprises t homas chambers except 
for the period 4 january 2010 to 12 july 2010 and 
dr john forrest since the role of chairman moved 
to a non executive position jim horsburgh normally 
attends meetings of the remuneration committee t he 
remuneration committee meets formally at least twice each 
year and otherwise as required
t he role of the remuneration committee is set out in 
the directors’ remuneration report t he 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 code n o 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 25
annual report and financial statements 2010  system c
co rpo rate go vern an ce st ate ment
t he directors have reviewed the effectiveness of the group’s 
system of financial and nonfinancial controls during the 
year including operational and compliance controls risk 
management and the group’s high level internal control 
arrangements t hese reviews included an assessment 
of internal controls and in particular internal financial 
controls t he 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 
t hese business risks which may be strategic operational 
reputational financial or environmental should be 
understood and visible
t he board approves the group’s annual budget which is 
prepared in the context of the board approved business 
plan t he board receives monthly financial reports which 
assess performance in comparison with the annual budget 
and in relation to periodic reforecasts 
key performance indicators are regularly reviewed at board 
level and by senior managers responsible for key areas of 
the business t he group has implemented a whistle blowing 
policy as part of its ongoing review of its risk policies t he 
group does not currently have an internal audit function 
however the board will consider the need to create one as 
the business grows 
nominations committee
t he n ominations committee is chaired by dr john forrest 
and also comprises dr christopher mclaren and t homas 
chambers except for the period 4 january 2010 to 
12 july 2010 t he n ominations committee 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 t he n ominations committee meets 
formally as required
potential candidates to the board are interviewed either by 
the n ominations 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 t urnbull committee 
the board accepts responsibility for the group’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 system c  annual report and financial statements 2010
as an entity 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 section
remuneration policy
t he 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 t his 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
t his report sets out the group’s policy on executive 
remuneration t he 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 t he policy should also allow for any special 
arrangements which may be necessary in the future in order 
to recruit a director of appropriate calibre 
t he principal elements of the executive remuneration 
package are detailed here
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 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 
75 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
t he group operates a number of share option schemes 
subject to performance related vesting conditions 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 group will attract and 
retain directors and other executives of the highest calibre
further information on the above plans is given in n ote 18 
to the financial statements
directo rs’ remune rat ion repo rt
26
“
t he group will attract and retain directors and 
other executives of the highest calibre
jim horsburgh
 
“ 27
annual report and financial statements 2010  system c
hedley mayor 
hedley mayor is employed under a service agreement dated 
12 july 2010 under the terms of the service agreement 
hedley mayor’s employment is terminable by either party 
giving to the other not less than six months’ prior written 
notice t he service agreement provides system c with the 
right to place hedley mayor 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 hedley 
mayor’s annual salary as at his date of employment was 
£135000
t he 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 £7200 and £9000 per annum
• pension contributions up to 10 per cent of eligible salary
• membership of any share option scheme the group 
operates
• phi life assurance and private individualfamily medical 
insurance and
• annual or discretionary bonuses as determined by the 
remuneration committee

directo rs’ remune rat ion repo rt
pensions
t he group provides access to a stakeholder pension 
scheme all staff are eligible to join the scheme upon 
commencing employment and the group makes matching 
contributions of up to 4 per cent of pensionable pay in 
relation to certain of the executive directors the group 
makes an equivalent maximum 10 per cent contribution into 
their private pension schemes
directors’ service contracts
a executive directors
t he 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
dr ian denley
dr ian denley is employed under a service agreement 
dated 20 o ctober 2003 although his period of continuous 
employment with system c 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 t he 
service agreement provides system c 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 2010 was £230000
markus bolton
markus bolton is employed under a service agreement 
dated 17 o ctober 2001 although his period of continuous 
employment with system c 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 six months’ prior written notice t he 
service agreement provides system c 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 2010 was £210000 system c  annual report and financial statements 2010

directo rs’ remune rat ion repo rt
28
b n onexecutive directors
t he following n onexecutive directors’ term of employment 
terminated on 16 june 2010 namely
• dr christopher mclaren
• dr john forrest senior independent n onexecutive director
• t homas chambers
all of the n onexecutive directors have been reappointed 
to the company for a further 12 month period under letters 
of appointment which are in a similar format and are dated 
16 june 2010 for t homas chambers dr christopher mclaren 
and john forrest jim horsburgh is under the same terms 
dated 1 september 2010 t he letters which are based on the 
‘sample letter of nonexecutive director appointment’ set out 
in the code provide in each case that the n onexecutive 
directors’ time commitment to the business is approximately 
one day per month although in practice more time than 
that is spent further each of the n onexecutive directors’ 
appointments is terminable by either party giving to the 
other not less than one month’s prior written notice subject 
to system c 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
t he fees paid to these n onexecutive 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 group’s affairs and reflect the time 
demands of their board duties dr christopher mclaren 
is entitled to receive fees of £22949 per annum whereas 
t homas chambers and dr john forrest are each entitled to 
receive fees of £34423 per annum  
in addition following the resignation of andrew coll as 
finance director t homas chambers took the role of acting 
finance director between 4 january 2010 and 12 july 2010 
following which he has remained as a n onexecutive 
director  t he board considers that this period as acting 
cfo has not had any affect on his independence as a 
n onexecutive director
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 below and forms 
part of these financial statements 29
annual report and financial statements 2010  system c
directo rs’ remune rat ion repo rt
t he following directors had an interest in share options over the ordinary shares of system c during the financial year 
ended 31 may 2010

number of ordinary shares of 1p each
executive 
director
date of 
grant period of exercise
exercise 
price in 
pence
 at 31 
may 09 exercised granted lapsed
at 31 
may 10 scheme
andrew coll 23 may 06 25 may 2008  24 may 2015 235 300000 300000    cso p
18 o ct 07 18 o ct 2010  17 o ct 2017 28 444857   444857  cso p
29 jan 08 29 jan 2011  28 jan 2018 295 236949   236949  emi
29 jan 08 29 jan 2011  28 jan 2018 295 185288   185288  cso p
10 sep 08 10 sep 2011  9 sep 2018 43 290698   290698  cso p
17 jul 09 17 jul 2012  16 jul 2019 49   850000 850000  cso p
ian denley 20 sep 06 20 sep 2010  19 sep 2019 245 300000   300000  cso p
18 o ct 07 18 o ct 2010  17 o ct 2017 28 521000    521000 cso p
29 jan 08 29 jan 2011  28 jan 2018 295 237966    237966 emi
29 jan 08 29 jan 2011  28 jan 2018 295 256542    256542 cso p
10 sep 08 10 sep 2011  9 sep 2018 43 372093    372093 cso p
17 jul 09 17 jul 2012  16 jul 2019 49   1200000  1200000 cso p
30 n ov 09 30 n ov 2012  29 n ov 2019 605   1200000  1200000 cso p
markus bolton 20 sep 06 20 sep 2010  19 sep 2019 245 300000   300000 
          
cso p
20 sep 06 20 sep 2010  19 sep 2019 245 100000   100000 
          
cso p
18 o ct 07 18 o ct 2010  17 o ct 2017 28 521000    521000 cso p
29 jan 08 29 jan 2011  28 jan 2018 295 338664    338664 emi
29 jan 08 29 jan 2011  28 jan 2018 295 155864    155864 cso p
10 sep 08 10 sep 2011  9 sep 2018 43 339535    339535 cso p
17 jul 09 17 jul 2012  16 jul 2019 49   1050000  1050000 cso p
30 n ov 09 30 n ov 2012  29 n ov 2019 605   1050000  1050000 cso p
4900456 300000 5350000 2707792 7242664  system c  annual report and financial statements 2010
directo rs’ remune rat ion repo rt
30
year ended 31 may 2010 year ended 31 may 2009
 
salary 
 fees bonus
benefits 
in kind subtotal pension total subtotal pension total
chairman 
jim horsburgh 61375   61375 300 61675 59583  3575 63158 
executive   
markus bolton 174492 61179 14114 249785 18931 268716 242422 15537 257959
dr ian denley 191167 67025 10188 268380 20193 288573 260877 16908 277785 
andrew coll resigned 
31 december 2009
77917 20000 4906 102823 7792 110615 204568 13466 218034
t homas chambers
amounts for acting cfo  
4 january 2010 to 12 july
116343 50000  166343  166343   
non executive 
dr christopher mclaren 22902   22902  22902 22337     22337 
dr john forrest 34920   34920  34920 33973     33973 
t homas chambers 20011   20011  20011 33506  33506
 699127 198204 29208 926539 47216 973755 857266 49486 906752
in addition under his employment agreement dated 12 july 2010 hedley mayor is eligible to receive the grant of 300000 
options over ordinary shares upon the announcement of these accounts at the then prevailing market price of the company’s 
shares  o ther than this obligation to grant share options there have been no changes in the interests of the directors in the 
shares or the share options since 31 may 2010
t he following part of the remuneration report contains audited information
benefits in kind include provision of car allowance and healthcare insurance 
directors’ interests in shares
t he directors’ beneficial interest in the share capital of the company at 31 may 2010 was as follows
 interest in ordinary shares 1 june 2009 and 31 may 2010
 markus bolton
1
  4174324
 dr ian denley
2
  480026
 jim horsburgh 300000
 dr christopher mclaren
3
  2135987
 dr john forrest 22223
 t homas chambers 22223
 andrew coll 
 total 7134783

1
beneficial interests includes 321557 ordinary shares held by spouse throughout the year
2
beneficial interests includes 435626 ordinary shares held by spouse throughout the year
3
beneficial interests includes 19600 ordinary shares held by spouse throughout the year 31
annual report and financial statements 2010  system c
directo rs’ remune rat ion repo rt
statement of directors’ responsibilities in respect of the 
annual report and the financial statements 
t he 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 elected to prepare the group and parent 
company financial statements in accordance with 
international financial reporting standards ifrss as 
adopted by the european union under company law the 
directors must not approve the financial statements unless 
they are satisfied that they give a true and fair view of the 
state of affairs of the group and the company and of the 
profit or loss of the group for that period
in preparing these financial statements the directors are 
required to
• select suitable accounting policies and then apply 
them consistently
• make judgements and accounting estimates that are 
reasonable and prudent
• state whether applicable ifrss as adopted by the 
european union have been applied 
t he directors are responsible for keeping adequate accounting 
records that are sufficient to show and explain the company’ s 
transactions and disclose with reasonable accuracy at any time 
the financial position of the company and the group and 
enable them to ensure that the financial statements comply 
with the companies act 2006 t hey are also responsible for 
safeguarding the assets of the company and the group and 
hence for taking reasonable steps for the prevention and 
detection of fraud and other irregularities
so far as the directors are aware there is no relevant audit 
information of which the company’ s auditors are unaware  
each director has taken all the steps that he ought to have 
taken as a director in order to make himself aware of any 
relevant audit information and to establish that the company’ s 
auditors are aware of that information
t he directors are responsible for the maintenance and integrity 
of the company’ s website legislation in the united kingdom 
governing the preparation and dissemination of financial 
statements may differ from legislation in other jurisdictions 
by o rder of the board
jane conner
company secretary
24 september 2010 system c  annual report and financial statements 2010
in depen dent audito rs’ repo rt
32
independent auditors’ report to the members of 
system c healthcare plc
we have audited the group and parent company financial 
statements ‘the financial statements’ of system c 
healthcare plc for the year ended 31 may 2010 which 
comprise the group statement of comprehensive income 
the group and parent company balance sheets the group 
and parent company statements of changes in equity 
the group and parent company cash flow statements 
and the related notes t he financial reporting framework 
that has been applied in their preparation is applicable law 
and international financial reporting standards ifrss as 
adopted by the european union and as regards the parent 
company financial statements as applied in accordance 
with the provisions of the companies act 2006
respective responsibilities of directors and auditors
as explained more fully in the directors’ responsibilities 
statement the directors are responsible for the preparation 
of the financial statements and for being satisfied that they 
give a true and fair view o ur responsibility is to audit the 
financial statements in accordance with applicable law and 
international standards on auditing uk and ireland t hose 
standards require us to comply with the auditing practices 
board’s ethical standards for auditors
t his report including the opinions has been prepared 
for and only for the company’s members as a body in 
accordance with chapter 3 of part 16 of the companies act 
2006 and for no other purpose we do not in giving these 
opinions 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
scope of the audit of the financial statements
an audit involves obtaining evidence about the amounts 
and disclosures in the financial statements sufficient to 
give reasonable assurance that the financial statements 
are free from material misstatement whether caused by 
fraud or error t his includes an assessment of whether the 
accounting policies are appropriate to the group’s and 
parent company’s circumstances and have been consistently 
applied and adequately disclosed the reasonableness of 
significant accounting estimates made by the directors and 
the overall presentation of the financial statements
opinion on financial statements 
in our opinion 
• the financial statements give a true and fair view of the 
state of the group’s and of the parent company’s affairs 
as at 31 may 2010 and of the group’s profit and the 
group’s and parent company’s cash flows for the year 
then ended
• the group financial statements have been properly 
prepared in accordance with ifrss as adopted by the 
european union 
• the parent company financial statements have been 
properly prepared in accordance with ifrss as adopted 
by the european union and as applied in accordance with 
the provisions of the companies act 2006 and
• the financial statements have been prepared in 
accordance with the requirements of the companies 
act 2006  33
annual report and financial statements 2010  system c
in depen dent audito rs’ repo rt
opinion on other matter prescribed by the 
companies act 2006
in our opinion the information given in the directors’ report 
for the financial year for which the financial statements are 
prepared is consistent with the financial statements
matters on which we are required to report 
by exception
we have nothing to report in respect of the following 
matters where the companies act 2006 requires us to report 
to you if in our opinion 
•	 adequate accounting records have not been kept by the 
parent company or returns adequate for our audit have 
not been received from branches not visited by us or 
• the parent company financial statements are not in 
agreement with the accounting records and returns or 
• certain disclosures of directors’ remuneration specified by 
law are not made or 
• we have not received all the information and explanations 
we require for our audit 
rosemary shapland
senior statutory auditor
for and on behalf of pricewaterhousecoopers llp
chartered accountants and statutory auditors
gatwick
24 september 2010 34
group statement o f compre hens ive in come
system c  annual report and financial statements 2010
year ended
31 may
2010
year ended
31 may
2009
note £000 £000
r evenue 12 38307 21887
cost of sales 16311 9657
gross proﬁt 21996 12230
r esearch and development costs 3912 1880
a mortisation of acquired intangible assets 945 259
share based payments 228 105
a dministrative expenses 11813 6565
proﬁt from operations before the amortisation  
of acquired intangibles and share based payments 6271 3785
proﬁt from operations 5098 3421
finance income 4 267 692
finance costs 4 4 11
proﬁt before taxation 5 5361 4102
t axation 6 1072 857
proﬁt for the year 4289 3245
 
total comprehensive income is equal to the ‘profit for the year’ as there is no other comprehensive income for the year
earnings per ordinary share
basic 7 407 372
diluted 7 396 366 group b a lan ce s heet
35
annual report and financial statements 2010  system c
note
at 31 may
2010
£000
at 31 may
2009
£000
assets
noncurrent assets
goodwill 8 8436 2306
o ther intangible assets 9 6117 3020
property plant and equipment 10 665 380
deferred tax assets 6 432                    373
t rade and other receivables 12 176                       213
15826 6292
current assets
t rade and other receivables 12 11234 7435
cash and cash equivalents 13 18596 14703
29830 22138
total assets 45656 28430
liabilities
current liabilities
t rade and other payables 14 8742 4872
deferred consideration 21  326
current tax liability 6 476 792
9218 5990
noncurrent liabilities
deferred consideration 21  598
deferred tax liability 6 1674 818
provisions 15 140 141
1814 1557
total liabilities 11032 7547
net assets 34624 20883
shareholders equity
s hare capital 17 1161 898
share premium account 19 21151 9804
capital redemption reserve 19 3127 3127
o wn shares held in trust 19 2768 1235
r etained earnings 19 11953 8289
total equity 34624 20883
t he financial statements on pages 34 to 79 were approved by the board of directors on 24 september 2010 and signed on its 
behalf by
 
 
dr ian denley 
chief executive o fficer
system c healthcare plc 2010
r eg in england no 1754990 36
group statement o f chan ges in s hare ho lders ’ equ it y
system c  annual report and financial statements 2010
attributable to equity holders of the company
 
share 
capital
£000
share 
premium
account
£000
capital 
redemption 
reserve
£000
own shares 
held in trust
£000
retained 
earnings
£000
total 
equity
£000
balance at 31 may 2008 895 9766 3127 1235 5323 17876
profit for the year     3245 3245
share based payments charge         105 105
deferred tax       122 122
issue of new shares 3  38        41
dividends     506 506
balance at 31 may 2009 898 9804 3127 1235 8289 20883
profit for the year     4289 4289
share based payments charge     228 228
deferred tax     59 59 
issue of new shares 263 11347  1533  10077
dividends     794 794
balance at 31 may 2010 1161 21151 3127 2768 11953 34624
further details in respect of share capital and own shares held and reserves are given in n otes 17 and 19 to the 
financial statements group c as h flo w statement
37
annual report and financial statements 2010  system c
notes to the cash flow statement cash flows from operating activities
year ended
31 may 2010
£000
year ended
31 may 2009
£000
profit for the financial year 4289 3245
taxation 1072 857 
finance income 267 692
finance costs 4 11 
proﬁt from operations 5098 3421 
increase in trade and other receivables 1431 208
increasedecrease in trade and other payables 1711 537
n et movement on provisions 1 37 
share based payments charge 228 105 
depreciation of property plant and equipment 299 282
a mortisation of intangible assets 1694 716
cash generated from operations 7598 3816 
year ended
31 may 2010
£000
year ended
31 may 2009
£000
cash flows from operating activities
cash generated from operations 7598 3816
finance costs paid 4 1
income tax paid 1250 52
n et cash generated by operating activities 6344 3763
cash flows from investing activities
a cquisition of subsidiaries net of cash acquired 9874 458
purchases of property plant and equipment 457 225
purchase of intangible assets  10
capitalised development costs 1570 1174
finance income 268 845
n et cash used in investing activities 11633 1022
cash flows from ﬁnancing activities
issue of share capital 9976 41
dividends paid 794 506
n et cash generatedused financing activities 9182 465
net increase in cash and cash equivalents 3893 2276
cash and cash equivalents at beginning of year 14703 12427
cash and cash equivalents at end of year 18596 14703 38
system c  annual report and financial statements 2010
compan y ba lan ce s heet
note
at 31 may 2010
£000
at 31 may 2009
£000
assets
noncurrent assets
goodwill 8 1983 
property plant and equipment 10 504 353
investments 11 11419 3776
intangible assets 9 3514 1504
deferred tax assets 6 281 336
t rade and other receivables 12 176 213
17877 6182
current assets
t rade and other receivables 12 9055 6673
cash and cash equivalents 13 14248 14443
23303 21116
total assets 41180 27298
liabilities
current liabilities
t rade and other payables 14 5290 4065
current tax liability 6 321 728
a mounts due to group undertakings  391 
deferred consideration 21  326
6002 5119
noncurrent liabilities
deferred consideration 21  598
deferred tax liability 6 645 394
provisions and other liabilities 15 140 141
785 1133
total liabilities 6787 6252
net assets 34393 21046
shareholders equity
s hare capital 17 1161 898
s hare premium account 19 21151 9804
capital redemption reserve 19 3127 3127
o wn shares held in trust 19 2768 1235
r etained earnings 19 11722 8452
total equity 34393 21046
t he financial statements on pages 34 to 79 were approved by the board of directors on 24 september 2010 and signed on its 
behalf by
 
 
dr ian denley 
chief executive o fficer
system c healthcare plc 2010
r eg in england no 1754990 39
annual report and financial statements 2010  system c
compan y statement o f chan ges in s hare ho lders ’ equ it y
 
share 
capital
£000
share 
premium 
account
£000
capital 
redemption 
reserve
£000
own
shares held 
in trust
£000
retained 
earnings
£000
total
equity
£000
as at 31 may 2008 895 9766 3127 1235 5506 18059
profit for the year        3225 3225
s hare based payments charge      105 105
deferred tax     122 122
issue of new shares 3   38           41 
dividends     506 506
as at 31 may 2009 898 9804 3127 1235 8452 21046
profit for the year     3718 3718
hiveup     177 177
share based payments charge     228 228
deferred tax     59 59
issue of new shares 263  11347    1533  10077
dividends     794 794
as at 31 may 2010 1161 21151 3127 2768 11722 34393
further details in respect of share capital and own shares held and reserves are given in n otes 17 and 19 to the 
financial statements 40
system c  annual report and financial statements 2010
compan y cas h flo w statement
year ended
31 may 2010
£000
year ended
31 may 2009
£000
cash flows from operating activities
cash generated from operations 4857 3872
finance costs  
income tax paid 1157 132
n et cash generated by operating activities 3700 3740
cash flows from investing activities
purchase of subsidiary undertakings 11814 490
purchases of property plant and equipment 343 222
purchase of intangible assets  10
capitalised development costs 1551 1174
t ransfer of cash from subsidiaries 366 
finance income 265 845
n et cash used in investing activities 13077 1051
cash flows from ﬁnancing activities
issue of equity share capital 9976 41
dividends paid 794 506
n et cash generatedused in financing activities 9182 465
net decreaseincrease in cash and cash equivalents 195 2224
cash and cash equivalents at beginning of year 14443 12219
cash and cash equivalents at end of year 14248 14443
notes to the cash flow statement cash flows from operating activities
year ended
31 may 2010
£000
year ended
31 may 2009
£000
profit for the financial year 3718 3225 
taxation 923 930 
finance income 264 691
finance costs  10 
profit from operations 4377 3474 
increasedecrease in trade and other receivables 1995 56 
increasedecrease in trade and other payables 1046 530
n et movement on provisions 1 37 
s hare based payments charge 228 105 
depreciation of property plant and equipment 207 278 
a mortisation of intangible assets 995 452 
cash generated from operations 4857 3872  41
annual report and financial statements 2010  system c
1 principal accounting policies 
t he company is a public limited company which is listed 
on the a lternative investment market ‘a im’ of the london 
s tock exchange and is incorporated and domiciled in the 
united kingdom 
t he 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 
t he financial information for the year ended 31 may 2010 
has been prepared in accordance with international financial 
r eporting standards “ifrs ” as adopted by the european 
union “eu ” international financial r eporting interpretations 
committee “ifr ic” interpretations and with those parts of the 
companies a ct 2006 applicable to companies reporting under 
ifrs  t he financial statements have been prepared under the 
historical cost convention
a s permitted by section 408 of the companies a ct 2006 
no separate statement of comprehensive income has been 
presented in respect of the parent company  t he profit for the 
year dealt with in the financial statements of the company was 
£3718000 2009 £3225000
t he preparation of financial statements in conformity with ifrs 
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 a lthough 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 basis of consolidation 
t hese financial statements consolidate the financial statements 
of the company and all its subsidiary undertakings as at 31 may 
each year and are prepared under ifrs as adopted by the eu 
using consistent accounting policies 
subsidiaries are all entities including special purpose entities 
over which the group has the power to govern the financial 
and operating policies generally accompanying a shareholding 
of more than one half of the voting rights t he existence and 
effect of potential voting rights that are currently exercisable or 
convertible are considered when assessing whether the group 
controls another entity 
subsidiaries are fully consolidated from the date on which 
control is transferred to the group t hey are deconsolidated 
from the date that control ceases
t he purchase method of accounting is used to account for 
the acquisition of subsidiaries by the group t he cost of an 
acquisition is measured as the fair value of the assets given 
equity instruments issued and liabilities incurred or assumed 
at the date of exchange plus costs directly attributable to 
the acquisition identifiable assets acquired and liabilities and 
contingent liabilities assumed in a business combination are 
measured initially at their fair values at the acquisition date 
irrespective of the extent of any minority interest t he excess of 
the cost of acquisition over the fair value of the group’ s share 
of the identifiable net assets acquired is recorded as goodwill 
if the cost of acquisition is less than the fair value of the net 
assets of the subsidiary acquired the difference is recognised 
directly in the statement of comprehensive income
intercompany transactions balances and unrealised gains 
on transactions between group companies are eliminated 
unrealised losses are also eliminated but considered an 
impairment indicator of the asset transferred a ccounting 
policies of subsidiaries have been changed where necessary to 
ensure consistency with the policies adopted by the group
c adoption of new and revised standards 
t he following new standards and amendments to standards 
are mandatory for accounting periods beginning on or after 
1 june 2009
ias 1 revised ‘presentation of financial statements’ t he revised 
standard prohibits the presentation of items of income and 
expenses that is ‘nonowner changes in equity’ in the statement 
of changes in equity  requiring nonowner changes in equity to 
be presented separately from owner changes in equity 
a ll nonowner changes in equity are required to be shown in a 
performance statement 
entities can choose whether to present one performance 
statement the statement of comprehensive income or two 
statements the income statement and the statement of 
comprehensive income
t he group has elected to present one statement a statement 
of comprehensive income 
ifrs 8 ‘o perating segments’ ifrs 8 replaces ias 14 
‘segmental reporting’  it requires a ‘management approach’ 
under which segment information is presented on the same 
basis as that used for internal reporting purposes  t his has not 
resulted in any changes to the reportable segments presented
segments are reported in a manner consistent with the internal 
reporting provided to the chief operating decisionmaker 
notes to t he finan cia l statement s 42
system c  annual report and financial statements 2010
t he chief operating decisionmaker has been identified as the 
board that makes strategic decisions
ifrs 2 amendment ‘sharebased payment’ t his revision 
of an existing standard deals with vesting conditions and 
cancellations it clarifies that vesting conditions are service 
conditions and performance conditions only o ther features 
of a sharebased payment are not vesting conditions t his has 
resulted in no change to the sharebased payments charge for 
the period
a mendment to ifrs 7 ‘financial instruments disclosures’ – 
t he amendment increases the disclosure requirements about 
fair value measurement and reinforces existing principles for 
disclosure about liquidity risk t he amendment introduces a 
threelevel hierarchy for fair value measurement disclosure and 
requires some specific quantitative disclosures for financial 
instruments in the lowest level of the hierarchy in addition the 
amendment clarifies and enhances existing requirements for 
the disclosure of liquidity risk primarily requiring a separate 
liquidity risk analysis for derivative and nonderivative 
financial liabilities t his has not resulted in any changes to the 
disclosures in these financial statements
t he following interpretations to published standards are 
mandatory for accounting periods beginning on or after 1 june 
2009 but are not relevant to the group’ s operations
ifr ic 9 ‘embedded derivatives’
ifr ic 13  ‘customer loyalty programmes’
ifr ic 15 ‘a greements for the construction of real estate’
ias 1 ‘presentation of financial statements’
ias 23  ‘borrowing costs’
ias 32 ‘financial instruments’  
d 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 group
ifrs 3  r evised business combinations
ias 38  a mendment intangible assets
ias 39   a mendment financial instruments r ecognition and 
measurement
t he directors anticipate that the adoption of these standards 
and interpretations in future periods will have no material 
impact on the financial statements of the group in the 
coming year
e revenue recognition
r evenue 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 activities of the group 
each element of revenue described below is recognised 
only when
•	 delivery 	 of 	 goods 	 or 	 pr ovision 	 of 	 services 	 has 	 occurr ed
•	 the 	 consideration 	 r eceivable 	 is 	 fixed 	 or 	 determinable
•	 ther e 	 ar e 	 no 	 significant 	 vendor 	 obligations 	 r emaining 	 and
•	 collection 	 of 	 the 	 amount 	 due 	 fr om 	 the 	 customer 	 is 	 	 	
 reasonably assured
r evenue from the sale of software licences is recognised 
in the statement of comprehensive income as the system 
modules are installed typically the sale will match the project 
implementation timescale in accordance with specified 
contract milestones
r evenue from the related implementation is recognised in the 
statement of comprehensive income proportionally over the 
implementation period as those services are provided
r evenue from maintenance support and other services is 
recognised over the contracted term of supply on a straight 
line basis
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 
r evenue from healthcare consultancy services is recognised 
when the service is delivered and approved by the client
r evenue from social care products is recognised on the basis 
of work completed to the end of the accounting period and 
estimated work outstanding to complete the project 
r evenue which has been recognised by the group but has 
not been invoiced as at the period end is included within 
accrued income
invoices raised in advance of the provision of goodsservices 
to customers are recorded in the balance sheet as deferred 
income and included within trade payables such amounts 
are recognised in the statement of comprehensive income as 
those goodsservices are provided to the customer
notes to t he finan cia l statement s 43
annual report and financial statements 2010  system c
f interest receivable on contracts 
a n element of the amounts invoiced to certain customers 
in respect of contracts to supply electronic patient r ecords 
“epr ” systems and other ancillary items is disclosed within 
financial income as other interest such amounts are based on 
the group’ s net investment in the contracts taking into account 
payments received from the customer to date
g employee beneﬁts
pension obligations
t he group operates several stakeholder pension schemes and 
the assets of the schemes are held separately from those of the 
group in independently administered funds in addition to this 
the group contributes to the personal pension plans of certain 
employees  t he group has no further obligations once the 
contributions have been paid
t he pension cost charge for the period is reflected in 
the statement of comprehensive income and represents 
contributions payable to the defined contribution pension 
schemes plus amounts payable by the group to the personal 
pension plans of certain employees based on a percentage of 
basic salary
a ny shortfall or excess in the contributions payable by the 
group in relation to the pension cost charge for the year are 
included in accruals or prepayments as appropriate
profit sharing and bonus plans
t he group 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
t ermination benefits
termination benefits are payable when employment is 
terminated by the group before an individual’ s normal 
retirement date or whenever an employee accepts voluntary 
redundancy in exchange for those benefits  t he group 
recognises termination benefits when it is demonstrably 
committed to either terminating the employment of current 
employees according to a detailed formal plan without 
possibility 	 for 	 withdrawal 	 or 	 pr oviding 	 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 where material
sharebased payments
t he group 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 granted
t he fair value is calculated at grant date and recognised in 
the statement of comprehensive income 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 a t each balance sheet date the 
entity revises its estimates of the number of options that are 
expected to vest it recognises the impact of the revision to 
original estimates if any in the statement of comprehensive 
income with a corresponding adjustment to equity
for cash settled arrangements the services received from 
employees are measured at the fair value of the liability and 
recognised in the statement of comprehensive income on a 
straight line basis over the vesting period t he 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 
statement of comprehensive income
t he proceeds received net of any directly attributable 
transaction costs are credited to share capital nominal value 
and share premium when the options are exercised
h own shares held in trust 
t he company’ s shares owned by t he system c healthcare 
plc employee benefits t rust are presented as a reduction of 
shareholders’ equity see n ote 19
i cash and cash equivalents
cash and cash equivalents include cash in hand and deposits 
held at call with banks
j business combinations
goodwill arising on a business combination is not amortised 
but tested for impairment on an annual basis t he carrying 
value of goodwill is reduced by any impairment amount 
recorded
intangible assets arising on a business combination are 
separately identified and valued and subject to amortisation 
over their estimated economic lives
k goodwill
goodwill represents the excess of the cost of an acquisition 
over the fair value of the group’ s share of the net identifiable 
assets of the acquired subsidiary at the date of acquisition 
notes to t he finan cia l statement s 44
system c  annual report and financial statements 2010
goodwill on acquisitions of subsidiaries is included in 
‘intangible assets’ goodwill is tested annually for impairment 
and carried at cost less accumulated impairment losses 
impairment losses on goodwill are not reversed gains and 
losses on the disposal of an entity include the carrying amount 
of goodwill relating to the entity sold
goodwill is allocated to cashgenerating units for the purpose 
of impairment testing t he allocation is made to those cash
generating units or groups of cashgenerating units that are 
expected to benefit from the business combination in which 
the goodwill arose identified according to operating segment
l property plant and equipment 
a ll property plant and equipment “ppe” is shown at 
original cost less accumulated depreciation and any 
accumulated impairment losses t he residual values and 
useful lives are reviewed and adjusted if appropriate at 
each balance sheet date 
cost includes expenditure that is directly attributable to the 
acquisition of the items
depreciation on assets is calculated using the straightline 
method to allocate the cost of each asset less its residual value 
if any over its estimated useful life as follows
•	 leasehold 	 impr ovements	 over 	 the 	 term 	 of 	 lease 
•	 fixtur es 	 and 	 fittings	 3 	 to 	 5 	 years 
•	 plant 	 and 	 equipment	 3 	 to 	 4 	 years	 
•	 computer 	 equipment	 2 	 to 	 4 	 years 
•	 contract 	 assets	 4 	 years 	 included 	 in 	 cost 	 of 	 sales
m leases 
leases of property plant and equipment where the group 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 t he 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 statement of 
comprehensive income on a straightline basis over the period 
of the lease
n impairment of noncurrent assets
in accordance with ias 36 “impairment of assets” a review 
for impairment of noncurrent 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 statement of 
comprehensive income
o intangible assets 
customer contracts
existing customer contracts are capitalised at fair value as at 
the date of acquisition using the multi period excess earnings 
approach t hey are carried at their fair value less accumulated 
amortisation and any accumulated impairment losses 
a mortisation is calculated using the straightline method 
to allocate the fair value of customer contracts over their 
estimated economic life of four to five years
software
software relates to the fair value of software acquired by the 
group on purchase of subsidiary undertakings and the cost of 
internally developed software
software acquired as part of a business combination is 
capitalised at fair value at the date of acquisition using the 
relief from royalty approach such software is then carried at 
fair value less accumulated amortisation and any accumulated 
impairment losses a mortisation is calculated using the 
straightline method to allocate the fair value of the software 
over their estimated economic life of up to seven years
costs 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 group is expected to benefit 
from the capitalised asset and typically range between three 
and five years 
notes to t he finan cia l statement s 45
annual report and financial statements 2010  system c
development costs that have initially been recognised as an 
expense in the statement of comprehensive income 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
r esearch expenditure on software is recognised as an expense 
in the statement of comprehensive income in the period in 
which it is incurred
own software
o wn software relates to computer licences which have 
been purchased by the group purely for use internally for 
operational purposes
a cquired computer software licences purchased by the group 
are capitalised on the basis of the costs incurred to acquire and 
bring into use the specific software t hese 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 statement of comprehensive income as incurred
contract software 
contract software relates to computer licences which are 
purchased by the group and the software is installed and used 
externally by a third party at a client’ s site
contract software licences purchased by the group are 
capitalised on the basis of the costs incurred to acquire 
and bring into use the specific software t hese costs are 
amortised over their estimated useful lives which typically do 
not exceed four years costs associated with developing and 
maintaining contracted computer software programmes are 
recognised as an expense in the statement of comprehensive 
income as incurred
p investments 
in the company’ s financial statements investments in subsidiary 
undertakings are stated at cost less any impairment losses
q 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 carryforward 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 carryforward of unused tax assets and 
unused tax losses can be utilised t he 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 statement of 
comprehensive income 
r deferred consideration
deferred consideration is based on management’ s estimate 
of the deferred consideration payable in respect of any 
businesses acquired by the group t his is reviewed at the 
end of each accounting period to reflect any changes in the 
potential payments due
s provisions
in accordance with ias 37 “provisions contingent liabilities 
and contingent assets” provisions for liabilities are recognised 
when the group 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 t he 
expense relating to any provision is presented in the statement 
of comprehensive income 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
t 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
u financial instruments
financial assets and financial liabilities are recognised in the 
group’ s balance sheet when the group becomes a party to the 
contractual provisions of the instrument
notes to t he finan cia l statement s 46
system c  annual report and financial statements 2010
borrowings and borrowing costs
a ll 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 statement of comprehensive 
income over the term of the borrowings and represent a 
constant proportion of the balance of capital repayments 
outstanding
a ccrued 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
t rade receivables are recognised initially at fair value and 
subsequently measured at amortised cost using the effective 
interest method less provision for impairment a provision 
for impairment of trade receivables is established when 
there is objective evidence that the group will not be able 
to collect all amounts due according to the original terms of 
the receivables significant financial difficulties of the debtor 
probability that the debtor will enter bankruptcy or financial 
reorganisation and default or delinquency in payments are 
considered indicators that the trade receivable is impaired 
t he amount of the provision is the difference between the 
asset’s carrying amount and the present value of estimated 
future cash flows discounted at the original effective interest 
rate t he carrying amount of the asset is reduced through the 
use of an allowance account and the amount of the loss is 
recognised in the statement of comprehensive income when 
a trade receivable is uncollectible it is written off against 
the allowance account for trade receivables subsequent 
recoveries of amounts previously written off are credited in 
the statement of comprehensive income
trade payables
t rade payables are recognised initially at fair value and 
subsequently measured at amortised cost using the effective 
interest method
v share capital and share premium
o rdinary shares issued are shown as share capital at nominal 
value t he 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
w operating segments
o perating segments are reported in a manner consistent with 
the internal reporting provided to the chief operating decision
maker t he chief operating decisionmaker who is responsible 
for allocating resources and assessing performance of the 
operating segments has been identified as the board of the 
group that makes strategic decisions
o perating profit of each reporting segment includes revenue 
and expenses directly attributable or able to be allocated on 
a reasonable basis segment assets and liabilities are those 
operating assets and liabilities directly attributable to or that 
can be allocated on a reasonable basis
x finance income and costs
a ll finance income and costs are recognised by the group on 
the accruals basis and credited or charged to the statement of 
comprehensive income in the period to which it relates
y key areas of judgement
t he group makes estimates and assumptions concerning 
the future t he resulting accounting estimates will by 
definition seldom equal the related actual results t he 
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 deferred consideration  
impairments of current and non current assets and the 
components of the group’s calculation for sharebased 
payments
r evenue recognition for social care products as noted under 
revenue recognition n ote 1e is a key area of judgement 
for management as it requires estimates of the degree of 
completion of a project
notes to t he finan cia l statement s 47
annual report and financial statements 2010  system c
2 segmental information
management has determined the operating segments based on the reports reviewed by the board chief operating decision
maker that are used to make strategic decisions
t he group’s sole activity is the design development and implementation of computer hardware and software a ll operations 
are undertaken in the uk 
t he directors consider it appropriate to analyse the results and financial position of the group in three distinct segments as 
this reflects how the business is managed
•	 	 the	pr oducts 	segment 	r elates 	to	 the	business 	wher e	the 	gr oup 	contracts	 dir ectly 	 with 	 local	nhs	 t rusts 	 and 	 other	clinical 	
or ganisations
•	 	 the	services 	segment 	r elates 	to	the 	business 	wher e	the 	gr oup 	is	subcontracted	to 	perform	work	 on	behalf	of	other 	
or ganisations	wher e 	the	end	customer	 is	also	either 	the	 nhs	or	other 	clinical	 or ganisations
•	 	 development	and	shar ed	services	r elates 	 to	the	gr oup’ s 	 central	r esear ch 	 and 	 development 	 activities	 and 	 support	services 	
provided to the products and services segments
t he profitloss before taxation of each segment includes any external revenue and expenses directly attributable to or able 
to be allocated to each such segment on a reasonable basis
notes to t he finan cia l statement s
year ended 31 may 2010
products
£000
services
£000
development and 
shared services
£000
total
£000
revenue 20551 17756  38307
proﬁtloss from operations 8011 8375 11288 5098
finance income 211  56 267
finance expense   4 4
proﬁtloss before taxation 8222 8375 11236 5361
taxation chargecredit 2302 2345 3575 1072
profitloss for the year 5920 6030 7661 4289
total assets 6264 4937 34025 45226
total liabilities 4519 888 3475 8882
other segmentental disclosures
capital expenditure  ppe 80  377 457
capital expenditure  intangible assets   1570 1570
depreciation of tangible assets 92  207 299
a mortisation of intangible assets 1363 72 259 1694
share based payment charge   228 228
s egment assets and liabilities are those assets and liabilities directly attributable or which can be allocated to each of the 
aforementioned segments 48
system c  annual report and financial statements 2010
notes to t he finan cia l statement s
year ended 31 may 2009
products
£’000
services
£’000
development and 
shared services
£’000
total
£’000
revenue 6531 15356   21887
proﬁtloss from operations 3135 7002 6716 3421
finance income 264   428 692
finance expense    11 11
proﬁtloss before taxation 3399 7002 6299 4102
taxation chargecredit 952 1961 2056 857
profitloss for the year 2447 5041 4243 3245
total assets 3267 4222 20568 28057
total liabilities 1328 833 3776 5937
other segmental disclosures
capital expenditure – property plant and equipment 85  140 225
capital expenditure  intangible assets    1184 1184
depreciation of tangible assets 173   109 282
a mortisation of intangible assets 445    271 716
sharebased payment credit      105 105
r eportable assets are reconciled to total assets as follows 
 
2010
£000
2009
£000
s egmental assets for reportable segments 45226 28057
unallocated 
deferred tax assets 430 373
total assets per balance sheet 45656 28430
r eportable liabilities are reconciled to total liabilities as follows 
 
2010
£000
2009
£000
s egmental liabilities  for reportable segments 8882 5937
unallocated 
current tax liabilities 476 792
deferred tax liabilities 1674 818
total liabilities per balance sheet 11032 7547
information about major customers
t he following information relates to single external customers whose transactions during the period amount to 10 or more 
of the group’s revenues
r evenues of one customer of the product segment represents approximately £6296000 1644 in 200910 of the group’s 
total revenue
r evenues of one customer of the service segment represents approximately £10249000 2675 in 200910 of the group’s 
total revenue 49
annual report and financial statements 2010  system c
notes to t he finan cia l statement s
group company
y ear ended
31 may 2010 
number
y ear ended
31 may 2009 
number
y ear ended 
31 may 2010 
number
y ear ended 
31 may 2009 
number
products 117 76 85 55
services 174 103 131 102
development and shared services 49 27 35 26
340 206 251 183
staff costs 
staff costs for the above persons during the year have been as follows
group company
year ended 
31 may 2010 
£’000
year ended 
31 may 2009 
£’000
year ended 
31 may 2010 
£’000
year ended 
31 may 2009 
£’000
wages and salaries 17210 10341 12232 9370
s ocial security costs 1914 1217 1368 1113
o ther pension costs see below 909 554 741 515
staff costs excluding sharebased payment charge 20033 12112 14341 10998
sharebased payment charge n ote 18 228 105 228 105
total staff costs 20261 12217 14569 11103
3 employee and director costs
staff numbers
t he average monthly number of people including executive directors employed during the year is as follows 50
system c  annual report and financial statements 2010
4 finance income and costs
key management compensation
key management comprises those individuals involved in major strategic decision making and includes all directors of 
the parent company as well as senior management which refers to those employees who are not directors of the parent 
company but who have an influence on the operational and strategic direction of the business 
notes to t he finan cia l statement s
group and company year ended
31 may 2010
£’000
year ended
31 may 2009
£’000
s alaries and shortterm benefits 1446 1359
post retirement benefits 70 69
s hare based payment 141 65
1657 1493
                                                                                                                                     group
year ended
31 may 2010
£’000
year ended
31 may 2009
£’000
interest receivable on bank and short term deposits 56 428
o ther interest 211 264
finance income 267 692
interest payable on bank loans and overdrafts 4 1
unwinding of discount on deferred consideration  10
finance costs 4 11
net finance income 263 681
pensions 
t he group operates stakeholder pension schemes in which all employees are eligible to participate from the commencement 
of their employment t he funds are invested with friends provident and are separately held and administered in addition to 
this arrangement the group also contributes to the personal pension schemes of certain employees
employee contributions to the stakeholder pension schemepersonal pension schemes of employees are matched by the 
group to a maximum of 4 or up to 10 in the case of certain senior executives and directors of eligible salary costs t here 
are no other post retirement benefit arrangements for employees of the group
share options 
o nly one executive director exercised share options during the year and the aggregate amount of the gains was £82500
t he highest paid executive director dr ian denley did not exercise any share options during this period 51
annual report and financial statements 2010  system c
5 proﬁt before taxation
t he following items have been included in arriving at profit before taxation
in addition to the research and development expenditure disclosed above £1570000 was capitalised in respect of software 
development in accordance with ias 38 2009 £1174000
notes to t he finan cia l statement s
                                                                                                                                       group
year ended
31 may 2010
£’000
year ended
31 may 2009
£’000
s taff costs excluding sharebased payments note 3 20033 12112
s harebased payments charge note 3 228 105
r esearch and development expenditure 3912 1880
depreciation of property plant and equipment
 contract assets 92 173
 o ther assets 207 109
a mortisation of intangible assets 1694 733
o perating lease rentals
 land and buildings 461 221
 motor vehicles and other leases 60 50
      group
year ended
31 may 2010
£’000
year ended
31 may 2009
£’000
audit services
fees payable to the group’s auditor for the audit of the group and parent 
company financial statements 82 69
fees payable to the group’s auditor for the audit of the financial statements of 
the subsidiaries 23 25
nonaudit services
fees payable for services relating to taxation  24
fees payable for other regulatory reporting  58
fees payable for services relating to acquisitions 76 
services provided by the company’s auditors
during the year the group obtained the following services from its auditor at cost as detailed below system c  annual report and financial statements 2010
52
b factors affecting the tax charge for the year
the total tax charge for the year differs from the standard rate of uk corporation tax of 28 2009 28 
as explained below
notes to the financial statements
6 taxation
a analysis of tax charge in the year
      group
year ended
31 may 2010
£’000
year ended
31 may 2009
£’000
current tax
uk corporation tax on profits for the year at 28 1056 790
adjustments in respect of prior years 188 25
868 765
deferred tax
origination and reversal of temporary differences 196 245
adjustment in respect of prior years 8 153
204 92
total tax charge in the statement of comprehensive income 1072 857
tax on items creditedcharged to equity
deferred tax on sharebased payment 59 122
    group
year ended
31 may 2010
£’000
year ended
31 may 2009
£’000
profit before taxation 5361 4102
profit before taxation multiplied by the standard rate 
of corporation tax in the uk of 28 2009 28
1502 1149
permanent differences 70 64
additional deduction for research and development expenditure 298 154
tax relief for share option exercises 19 22                    
adjustments in respect of prior years  current tax 188 25
adjustments in respect of prior years  deferred tax 8 153
rate differences on current tax 3 2
total tax charge per accounts 1072 857 annual report and financial statements 2010  system c
53
c current tax liability
notes to the financial statements
group company          
year ended
31 may 2010
 £’000
year ended
31 may 2009
£’000
year ended
31 may 2010
    £’000
year ended
31 may 2009
£’000
uk corporation tax liability
at 1 june 792 162 728 133
arising on acquisitions 66 8          82 
charged to statement of comprehensive income 
during the year
868      765 668 727
paid during the year 1250 143 1157        132
at 31 may 476 792 321 728
d deferred tax reconciliation
   group   company
year ended
31 may 2010
£’000
year ended
31 may 2009
£’000
year ended
31 may 2010
£’000
year ended
31 may 2009
 £000
net liabilityasset at 1 june 445 391 58 23
deferred tax arising on acquisitions 895 84 7 
deferred tax assets of acquisitions 361   
charged to statement of comprehensive 
income during the year
204 92 255 203
debitedcredited to shareholders equity 59 122 59 122
at 31 may 1242 445 365 58 system c  annual report and financial statements 2010
54
e analyses of deferred tax balances in the balance sheet
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
of the £432000 of deferred tax assets recognised within the group as at 31 may 2010 £164000 is due to be recovered within 
the next 12 months and the remaining £268000 is due to be recovered after more than 12 months
the total of deferred tax assets recognised within the company as at 31 may 2010 is £281000 of which £19000 is due to be 
recovered within the next 12 months and the remaining £262000 is due to be recovered after more than 12 months
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
notes to the financial statements
        group     company
year ended
31 may 2010
£’000
year ended
31 may 2009
£’000
year ended
31 may 2010
£’000
year ended
31 may 2009
£’000
deferred tax asset
depreciation in excess of accelerated 
capital allowances
112 136 105 134
unutilised losses 140 36  
share options 157 201 157 202
short term timing differences 23  19 9
432 373 281 345
deferred tax liability
short term timing differences 645 436 645 394
intangible assets 1029 382  
1674 818 645 394
net deferred tax 1242 445 364 49 annual report and financial statements 2010  system c
55
7 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 2010
a reconciliation between the weighted average number of shares used in the calculations of basic and diluted earnings per 
share is set out below
notes to the financial statements
year ended 31 may 2010 year ended 31 may 2009
earnings
£’000
weighted 
average 
number of 
shares
number
per share 
amount
pence
earnings
£’000
weighted 
average 
number of 
shares
number
per share 
amount
pence
basic eps
total number of shares 110682225 89577587
less shares in employee 
benefit trust
5387741 2287741
earnings attributable to 
ordinary shareholders
4289 105294484 407 3245 87289846 372
effect of dilutive shares 3104035 011 1395956 006
diluted eps 4289 108398519 396 3245 88685802 366 system c  annual report and financial statements 2010
56
notes to the financial statements
8 goodwill
business combinations have had their intangible assets separately identified and any remaining goodwill has been capitalised 
separately in accordance with ifrs 3 “business combinations”  goodwill is tested annually for impairment
on 15 july 2009 system c healthcare plc purchased liquidlogic limited which created goodwill of £5693000
on 7 october 2009 system c healthcare plc purchased conscia enterprise systems limited which created goodwill of £760000 
the adjustment to cost relates to a reduction in the deferred consideration payable to bluestar uk group limited of £299000 
and £24000 in respect of an increase in the fair value of intangibles resulting from the finalising of the acquisition accounting for 
bluestar uk group limited
the hiveup of care records limited iq systems services limited and bluestar uk group limited during the year resulted in the 
creation of goodwill in system c company of £1983000
impairment tests for goodwill
an impairment review of the goodwill above has not identified any impairment of goodwill
the goodwill has been allocated in its entirety to the system c group as it is not separately identifiable due to the integrated nature of 
the products and resources the goodwill has been allocated based on synergies each segment is expected to gain from the business 
combinations as well as the benefits of an integrated product range based on the microsoft technology platform
the recoverable amounts were based on value in use the key assumptions in the value in use calculations are those 
regarding the discount and growth rates the discount rate assumed is 15 using pretax rates that reflect the current market 
assessments of the time value of money and the risks specific in the business using budgets approved by the management 
for the financial year 200910 and forecasts for two years beyond that cash flows beyond three years are based on a 
growth rate of between 5 and 10 the key assumptions apply for bluestar uk group limited care records limited iq systems 
services limited conscia enterprise systems limited and liquidlogic limited as their risk profiles are considered to be similar 
management do not foresee any reasonably possible change in key assumptions which would make an impairment necessary
as the value in use is greater than the carrying value there is no impairment in the year and the carrying value of goodwill 
represents the excess of consideration over the fair value of the group’ s share of the net identifiable assets of the acquired 
subsidiaries at the date of acquisition
group £’000
cost and net book amount
at 1 june 2009 2306
additions arising from acquisitions in the year note 21 6453
revisions arising from acquisitions in prior years note 21 323
at 31 may 2010 8436
group £’000
cost and net book amount
at 1 june 2008 1884
additions arising from acquisitions in the year note 21 812
revisions arising from acquisitions in prior years note 21 390
at 31 may 2009 2306 annual report and financial statements 2010  system c
57
notes to the financial statements
9 intangible assets
group
customer
contracts
£’000
software
£’000
own
software
£’000
contract
software
£’000
total
£’000
cost
at 1 june 2009 238 3967 128 146 4479
additions at cost  1570   1570
acquisitions see note 21 1836 1384 1  3221
disposals   5 5 10
at 31 may 2010 2074 6921 124 141 9260
accumulated amortisation
at 1 june 2009 97 1096 122 144 1459
charged in the year 449 1242 3  1694
disposals   5 5 10
at 31 may 2010 546 2338 120 139 3143
net book value
at 31 may 2010 1528 4583 4 2 6117
at 31 may 2009 141 2871 6 2 3020
company
customer
contracts
£’000
software
£’000
own
software
£’000
contract
software
£’000
total
£’000
cost
at 1 june 2009  2243 128 146 2517
additions at cost  1551   1551
asset transfer 172 1339   1511
disposals   5 5 10
at 31 may 2010 172 5133 123 141 5569
accumulated amortisation
at 1 june 2009  747 122 144 1013
charged in the year  993 2  995
asset transfer 48 9   57
disposals   5 5 10
at 31 may 2010 48 1749 119 139 2055
net book value
at 31 may 2010 124 3384 4 2 3514
at 31 may 2009  1496 6 2 1504
software relates to the cost of internally developed software and the fair value of software acquired by the group on the 
purchase of subsidiary undertakings 
the asset transfer relates to the hiveup of subsidiaries as referred to in note 11 system c  annual report and financial statements 2010
58
notes to the financial statements
group
customer
contracts
£’000
software
£’000
own
software
£’000
contract
software
£’000
total
£’000
net book value
internally generated assets  1496   1496
other intangible assets 141 1375 6 2 1524
at 31 may 2009 141 2871 6 2 3020
internally generated assets  823   823
other intangible assets 1387 889 2  2274
at 31 may 2010 1528 4583 4 2 6117
material intangible assets
the development costs that have been capitalised for work undertaken on the medway software are considered to be 
material to the financial statements and the group policy is to amortise these costs over a period of five years 
as at 31 may 2010 the total carrying amount for this asset is £2166038 of which £401436 has twoandahalf years of 
amortisation remaining £640644 has three years remaining and £1123958 will be amortised over the next four years
the net book value of the intangible assets can be classified as follows  annual report and financial statements 2010  system c
59
notes to the financial statements
amortisation is charged to the following lines in the statement of comprehensive income
               group
year ended
31 may 2010
£’000
year ended
31 may 2009
£’000
cost of sales 748 442
administration and general overheads 946 274
1694 716
group
customer
contracts
£’000
software
£’000
own
software
£’000
contract
software
£’000
total
£’000
cost
at 1 june 2008 212 2517 120 144 2993
additions at cost  1174 8 2 1184
acquisitions see note 21 26 276   302
at 31 may 2009 238 3967 128 146 4479
accumulated amortisation
at 1 june 2008 45 446 110 142 743
charged in the year 52 650 12 2 716
at 31 may 2009 97 1096 122 144 1459
net book value
at 31 may 2009 141 2871 6 2 3020
at 31 may 2008 167 2071 10 2 2250
company
software
£
own
software
£
contract
software
£
total
£
cost
at 1 june 2008 1069 120 144 1333
additions at cost 1174 8 2 1184
at 31 may 2009 2243 128 146 2517
accumulated amortisation
at 1 june 2008 309 110 142 561
charged in the year 438 12 2 452
at 31 may 2009 747 122 144 1013
net book value
at 31 may 2009 1496 6 2 1504
at 31 may 2008 760 10 2 772 system c  annual report and financial statements 2010
60
notes to the financial statements
10 property plant and equipment
group
leasehold
improvements
£000
fixtures 
fittings
£000
plant 
equipment
£000
computer
equipment
£000
contract
assets
£000
total
£000
cost
at 1 june 2009 181 170 99 599 3314 4363
additions 39 21 4 313 80 457
acquisitions  31  96  127
disposals  4 44 266 289 603
at 31 may 2010 220 218 59 742 3105 4344
accumulated depreciation
at 1 june 2009 181 156 65 450 3131 3983
charge for the year 4 25 21 158 91 299
disposals  4 44 266 289 603
at 31 may 2010 185 177 42 342 2933 3679
net book amount
at 31 may 2010 35 41 17 400 172 665
at 31 may 2009  14 34 149 183 380
company
leasehold
improvements
£000
fixtures  
fittings
£000
plant  
equipment
£000
computer 
equipment
£000
contract 
assets
£000
total
£000
cost
at 1 june 2009 181 164 69 597 3314 4325
additions  2  261 80 343
asset transfer  8 76   84
disposals  4 44 266 289 603
at 31 may 2010 181 170 101 592 3105 4149
accumulated depreciation
at 1 june 2009 181 154 56 450 3131 3972
charge for the year  12 7 97 91 207
asset transfer  4 65   69
disposals  4 44 266 289 603
at 31 may 2010 181 166 84 281 2933 3645
net book amount
at 31 may 2010  4 17 311 172 504
at 31 may 2009  10 13 147 183 353 annual report and financial statements 2010  system c
61
notes to the financial statements
     group
year ended
31 may 2010
£’000
year ended
31 may 2009
£’000
cost of sales 92 173
administration and general overheads 207 109
299 282
group
leasehold
improvements
£000
fixtures  
fittings
£000
plant  
equipment
£000
computer 
equipment
£000
contract 
assets
£000
total
£000
cost
at 1 june 2008 181 166 73 467 3229 4116
additions  3 5 132 85 225
acquisitions  1 21   22
at 31 may 2009 181 170 99 599 3314 4363
accumulated depreciation
at 1 june 2008 173 138 53 379 2958 3701
charge for the year 8 18 12 71 173 282
at 31 may 2009 181 156 65 450 3131 3983
net book amount
at 31 may 2009  14 34 149 183 380
at 31 may 2008 8 28 20 88 271 415
company
leasehold
improvements
£000
fixtures 
fittings
£000
plant 
equipment
£000
computer 
equipment
£000
contract
assets
£000
total
£000
cost
at 1 june 2008 181 164 64 465 3229 4103
additions   5 132 85 222
at 31 may 2009 181 164 69 597 3314 4325
accumulated depreciation
at 1 june 2008 173 137 47 379 2958 3694
charge for the year 8 17 9 71 173 278
at 31 may 2009 181 154 56 450 3131 3972
net book amount
at 31 may 2009  10 13 147 183 353
at 31 may 2008 8 27 17 86 271 409
depreciation is charged to the following lines in the statement of comprehensive income system c  annual report and financial statements 2010
62
  
notes to the financial statements
11 investments
company
interests in subsidiary undertakings
£’000
cost and net book amount at 1 june 2009 3776
transfer of trade and assets 3647
additions 11290
cost and net book amount at 31 may 2010 11419
cost and net book amount at 1 june 2008 2992
additions 784
cost and net book amount at 31 may 2009 3776
the deduction from investments represents the trade and assets that were transferred to system c healthcare plc during the period 
these were as follows
£719000 of trade and assets were transferred to the company on 1 june 2009 this represents the ‘hiveup’ of care records limited  
£1805000 of trade and assets were transferred to the company on 1 july 2009 this represents the ‘hiveup’ of iq systems 
services limited
£1123000 of trade and assets were transferred to the company on 31 may 2010 this represents the ‘hiveup’ of bluestar uk 
group limited
this has created goodwill of £1983000 in the company balance sheet and has no effect on the group balance sheet
the additions comprise of £10433611 in respect of liquidlogic limited £856000 in respect of conscia enterprise 
systems limited
the additions comprise of £1124000 in respect of bluestar uk group limited and a reduction of £340000 in the deferred 
consideration paid to iq systems services limited annual report and financial statements 2010  system c
63
notes to the financial statements
country of
incorporation
description of
shares held
proportion of nominal value 
of shares held
group company
 
conscia enterprise systems limited great britain ordinary 100 100
liquidlogic limited great britain ordinary 100 100
liquidlogic limited provides software and related services to the social care sector whilst conscia enterprise systems limited specialises 
in providing premium web applications including ecommerce and mobile solutions to both the private and public sectors
principal subsidiary undertakings 
details of the principal subsidiary undertakings of the company which are included in these consolidated financial statements are 
set out below system c  annual report and financial statements 2010
64
notes to the financial statements
12 trade and other receivables
group company
year ended
31 may 2010
£’000
year ended
31 may 2009
£’000
year ended
31 may 2010
£’000
year ended
31 may 2009
£’000
current
trade receivables 5861 3348 4149 2229
other receivables 36 49 36 481
prepayments 605 508 401 465
accrued income 4732 3530 4469 3498
total current 11234 7435 9055 6673
31 may 2010 31 may 2009 31 may 2010 31 may 2009
£’000 £’000 £’000 £’000
noncurrent
accrued income 176 213 176 213
total noncurrent 176 213 176 213
all the trade and other receivables in the year were paid in pound sterling
the maximum exposure to credit risk at the reporting date is the carrying value of the accounts receivable disclosed above 
the group does not hold any collateral as security
group company
year ended
31 may 2010
£’000
year ended
31 may 2009
£’000
year ended
31 may 2010
£’000
year ended
31 may 2009
£’000
gross trade receivables can be 
analysed as follows
fully performing 4417 1728 3475 1294
past due 1444 1620 674 935
5861 3348 4149 2229
ageing of past due and not
impaired receivables
1 to 90 days 1347 1601 641 929
over 90 days 97 19 33 6
1444 1620 674 935
of the £13m group receivables aged between 1 to 90 days £259000 remains outstanding post yearend only £2000 of the 
receivables over 90 days remains outstanding post yearend annual report and financial statements 2010  system c
65
notes to the financial statements
13 cash and cash equivalents
14 trade and other payables
15 provisions
        group        company
year ended
31 may 2010
£’000
year ended
31 may 2009
£’000
year ended
31 may 2010
£’000
year ended
31 may 2009
£’000
cash at bank and in hand 18596 14703 14248 14443
18596 14703 14248 14443
        group        company
year ended
31 may 2010
£’000
year ended
31 may 2009
£’000
year ended
31 may 2010
£’000
year ended
31 may 2009
£’000
current
trade payables 1392 557 681 468
taxation and social security 2160 1357 1856          1094
accruals 2437 2042 1781 1840
deferred income 2750 916 972 663
other creditors 3   
8742 4872 5290 4065
group and company
property
dilapidations
£’000
national insurance
provision for 
sharebased payments
£’000
total
£’000
at 1 june 2009 91 50 141
charged during the year 20  20
utilised in year  21 21
at 31 may 2010 111 29 140
a dilapidations provision is recognised for the present value of costs to be incurred to return the leasehold properties to their 
original form this is being built up over the period to the next break clauses within the relevant lease
the leases relate to the properties in warrington maidstone and wrotham heath the lease for warrington is due to expire on 
30 november 2010 and the current provision for this is £50558 the lease on the maidstone premises expires in 2014 however 
there was a review dated september 2009 and negotiations regarding this are still ongoing the current provision for this is £50494  
the lease at wrotham heath is for a period of 5 years from 1 december 2008 with a 3 year break option the provision for this 
property is currently £10242
the national insurance provision is expected to be utilised as employees exercise share options
all the trade and other payables in the year were paid in pound sterling system c  annual report and financial statements 2010
66
notes to the financial statements
16 financial instruments
the group’s accounting policies in respect of financial 
instruments is given in note 1u
the group’s financial liabilities comprise trade and other 
payables
the group’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 group 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 group’s 
policy that no trading in financial instruments shall be 
undertaken
the group 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 group’ s financial instruments are 
interest rates on financial assets risk and credit risk the board 
reviews and agrees policies for managing each of these risks as 
summarised below
interest rate risk on financial assets and liabilities 
the group’s interest rate risk arises from bank deposits 
or borrowings where necessary it is the group’s policy to 
maintain a mixture of variable and fixed interest rates in order 
to mitigate any potential exposure
credit risk 
the group’s primary credit risk is attributable to its trade 
receivables it has policies in place to ensure sales are made 
to customers with appropriate credit histories
credit risk is further minimised within the group by 
depositing cash across numerous institutions thereby 
reducing the possibility that funds will not be returned to the 
depositor due to insolvency
borrowing facilities 
the group had no undrawn committed borrowing facilities 
during the year 2009 £nil
fair values of nonderivative 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 is a summary 
of methods and assumptions used for each category of 
financial instruments
   group company
31 may 2010 31 may 2009 31 may 2010 31 may 2009
book  
value 
£’000
fair 
value 
£’000
book 
value 
£’000
fair 
value 
£’000
book 
value  
£’000
fair 
value 
£’000
book 
value 
£’000
fair 
value 
£’000
primary financial instruments 
held or issued to finance the 
company’s operations
trade and other payables current 1392 1392 557 557 681 681 468 468
deferred consideration current   326 326   326 326
deferred consideration
noncurrent
  598 598   598 598
trade and other receivables 
current
5861 5861 3348 3348 4149 4149 2229 2229
amounts due from subsidiary 
undertakings current
    129 129 465 465
cash and cash equivalents 18596 18596 14703 14703 14248 14248 14443 14443 annual report and financial statements 2010  system c
67
notes to the financial statements
summary of methods and assumptions 
trade and other receivablespayables 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 is deemed to equate 
to the cash values deposited
the fair value of the noncurrent portion of trade and other 
receivables has been calculated by discounting the balance 
by 8 
capital risk management 
the group’s objectives when managing capital are to 
safeguard the group’s ability to continue as a going concern 
in order to generate returns for shareholders and benefits 
for other stakeholders and to maintain an optimum capital 
structure for investment
in order to maintain or adjust the capital structure the 
group may adjust the amount of dividends paid to 
shareholders return capital to shareholders issue new 
shares or sell assets to reduce net debt or increase net cash
17 share capital
the increase in share capital is mainly represented by an issue of 25000000 ordinary 1p shares from an institutional placing the 
placing raised proceeds of £11273409 net of placing costs of £726591 which resulted in a credit of £250000 to the share capital 
account and £11023409 to the share premium account a loan of £1533018 from the placing proceeds was used to fund the 
purchase of 3100000 ordinary 1p shares by the system c healthcare plc employee benefit trust resulting in a net cash flow of 
£9740391 to the group these shares were admitted to aim on 5 august 2009
166667 ordinary 1p shares were issued in part settlement of the earnout payment of bluestar uk group limited note 21 this 
resulted in a credit of £1667 to the share capital account and £99166 to the share premium account these shares were admitted 
to aim on 15 october 2009
the remaining 1124069 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 £235308 which resulted in a credit of £11240 
to the share capital account and £224068 to the share premium account
group and company
authorised
31 may 2010 31 may 2009
number £’000 number £’000
1p ordinary shares 405000000 4050 405000000 4050
31 may 2010 31 may 2009
allotted called up and fully paid number £’000 number £’000
1p ordinary shares
 at beginning of year 89838464 898 89548464 895
 allotments 26290736 263 290000 3
 at end of year 116129200 1161 89838464 898 system c  annual report and financial statements 2010
68
notes to the financial statements
18 sharebased payment
sharebased payment incentives have been granted to certain 
employees  to acquire ordinary shares of 1p each under the 
system c healthcare plc employee share option scheme 
the system c healthcare plc enterprise management 
incentive scheme 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 group
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 group on the 
exercise of such options by an employee
b the system c healthcare plc enterprise 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 the emi plan rules were 
adopted by the company on 16 january 2008
in january 2008 options were granted under the emi scheme 
to the executive directors subject to the emi legislation over 
ordinary shares in the company 
the price at which the options were granted was based on 
average market value on the date of grant this method was 
approved by hmrc
the conditions of the emi provide that the options be granted 
on terms that their exercise will be subject to the satisfaction 
of performance criteria the board will be required to be 
satisfied that over a period of three years commencing on the 
date of grant of the option there has been an increase in the 
company’ s earnings per share after inflation rpi of 4 
the emi option holders must make a payment to the company 
of 295 pence to exercise the options 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 “csopa” 
the csop was adopted on 2 june 2005 and is split into two 
parts
part i 
part i 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 group 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 
a number of share options granted throughout the period 
were subject to a performance criterion of a sliding scale of 
increase in eps after inflation starting at 4 pa from the start 
to the end of the 3 years and finishing at 8 pa options may 
be granted on terms that their exercise will be subject to the 
option holder paying any employee’ s national insurance 
liability arising pursuant to the exercise  additionally options 
may be granted by the trustees of the group’ 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 annual report and financial statements 2010  system c
69
notes to the financial statements
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 himher under the csop when aggregated with outstanding 
options held under any hmrc approved executive share 
option scheme established by the group exceeding the 
hmrc limit currently £30000  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 group in any calendar year shall not exceed 
one times hisher 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 group 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 group 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 group’ s performance up to 
that time
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 £30000 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
a number of share options granted throughout the period 
were subject to a performance criterion of a sliding scale of 
increase in eps after inflation starting at 4 pa from the start 
to the end of the three years and finishing at 8 pa
c the system c healthcare plc company share option 
plan “csopb” revised 2009 rules 
the csop was adopted on 17 july 2009 and approved by 
hrmc on 24 february 2010 and is split into two parts
part i 
no share options were granted during the period under part i 
of the revised plan
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 £30000 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 
the csop rules were amended in july 2009 in line with current 
changes to legislation  a total of 2658188 were granted 
under these rules on 17 july 2009 and a further 2743228 were 
granted on 30 november 2009
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 t ax 
earnings and pensions act 2003 and provide for the grant of 
approved share options system c  annual report and financial statements 2010
70
notes to the financial statements
all employees and fulltime directors of the group 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 nonexecutive 
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 group 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 
this scheme is now closed and no share options were 
exercised as participants opted for the savings from 
this scheme
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 this plan matured in april 2010 participants 
have until 30 september 2010 to exercise their options the 
majority of participants have taken up the right to exercise 
these options during the period
f the system c healthcare plc sharesave plan 3 “ssp3” 
the system c healthcare plc sharesave plan 2 was 
established on 23 october 2008 and operates in a manner that 
is substantially similar to that of the system c healthcare plc 
sharesave plans 1 and 2
g the system c healthcare plc sharesave plan 4 “ssp4” 
the system c healthcare plc sharesave plan 2 was 
established on 22 march 2010 and operates in a manner that 
is substantially similar to that of the system c healthcare plc 
sharesave plans 1 2 and 3 annual report and financial statements 2010  system c
71
notes to the financial statements
further details of all the share options granted by the company as at 31 may 2010 under its various schemes and standalone 
arrangements are given in the tables below
number of ordinary shares of 1p each
date of
grant period of exercise
exercise price
 in pence
at 1 june 
2009 exercised granted lapsed
at 31 may 
2010 scheme
10 aug 2001 no time limit imposed 33 50000    50000 
10 aug 2001 no time limit imposed 33 50000    50000 
1 oct 2001 4 oct 2004  3 oct 2011 14 109000    109000 esos
1 jul 2002 1 jul 2005  30 jun 2012 14 29000    29000 esos
24 nov 2004 before 24 nov 2014 14 50000    50000 esos
25 may 2006 25 may 2008  24 may 2015 235 300000 300000    csopa
20 sep 2006 20 sep 2010  19 sep 2019 245 700000   700000  csopa
16 feb 2007 1 apr 2010 20 1096200 818370  9450 268380 ssp2
6 jul 2007 6 jul 2010  5 jul 2017 34 450000    450000 csopa
18 oct 2007 18 oct 2010  17 oct 2017 28 1486857   444857 1042000 csopa
29 jan 2008 29 jan 2011  28 jan 2018 295 813559   236949 576610 emi
29 jan 2008 29 jan 2011  28 jan 2018 295 597694   185288 412406 csopa
10 sep 2008 10 sep 2011  9 sep 2018 43 1002326   290698 711628 csopa
23 oct 2008 1 jan 2011 26 1309259   50952 1258307 ssp3
17 jul 2009 17 jul 2012  16 jul 2019 49   3508188 850000 2658188 csopb
17 jul 2009 17 jul 2012  16 jul 2019 49   691812  691812 csopa
30 nov 2009 30 nov 2012  29 nov 2019 605   306772  306772 csopa
30 nov 2009 30 nov 2012  29 nov 2019 605   2743228  2743228 csopb
28 jan 2010 28 jan 2013  27 jan 2020 51   105000  105000 csopa
22 mar 2010 01 may 2013 37   1926785  1926785 ssp4
8043895 1118370 9281785 2768194 13439116 system c  annual report and financial statements 2010
72
notes to the financial statements
the total number of share options outstanding as at 
31 may 2010 represent approximately 116 of the issued 
share capital of the parent company 2009 90
the company’s sharebased payment incentive plans are 
subject to continued employment and employee share 
options generally lapse one year after an individual’s 
employment with the group 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 “sharebased payment” is 
included within administration and general overheads 
in the statement of comprehensive income with the 
corresponding entry being to provisions in the case of 
cashsettled arrangements or a credit to retained earnings 
in the case of equitysettled arrangements a charge to 
the statement of comprehensive income of £228000 arose 
for the year ended 31 may 2010 2009 £105000 and relates 
entirely to equitysettled arrangements
in calculating the amounts above the group 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  that had  not 
vested by 1 june 2005 the date of its transition to ifrs
 
further details of all the share options granted by the company as at 31 may 2009 under its various schemes and standalone 
arrangements are given in the tables below
date of 
grant period of exercise
exercise price 
in pence
 at 1
june 2008 exercised granted lapsed
at 31
may 2009 scheme
25 may 1999 1 apr 2002  31 mar 2009 14031 130000 130000    esop
2 jul 1999 1 mar 2003  27 feb 2010 14031 160000 160000    esop
10 aug 2001 no time limit imposed 33 50000    50000 
10 aug 2001 no time limit imposed 33 50000    50000 
1 oct 2001 4 oct 2004  3 oct 2011 14 109000    109000 esop
1 jul 2002 1 jul 2005  30 jun 2012 14 29000    29000 esop
24 nov 2004 before 24 nov 2014 14 50000    50000 esop
2 jun 2005 1 sep 2008 44 82683   82683  saye
22 jun 2005 22 jun 2008  21 jun 2015 54 1370000   1370000  csop
25 may 2006 25 may 2008  24 may 2015 235 300000    300000 csop
20 sep 2006 20 sep 2010  19 sep 2019 245 700000    700000  csop
16 feb 2007 1 apr 2010 20 1096200    1096200 ssp2
6 jul 2007 6 jul 2010  5 jul 2017 34 450000    450000 csop
18 oct 2007 18 oct 2010  17 oct 2017 28 1486857    1486857 csop
29 jan 2008 29 jan 2011 28 jan 2018 295 813559    813559 emi
29 jan 2008 29 jan 2011  28 jan 2018 295 597694    597694 csop
10 sep 2008 10 sep 2011  9 sep 2018 43   1002326  1002326 csop
23 oct 2008 1 jan 2011 26   1335842 26583 1309259 ssp3
7474993 290000 2338168 1479266 8043895 annual report and financial statements 2010  system c
73
notes to the financial statements
sharebased payment incentives
references are to schemes detailed above
esos emi csop ssp1 ssp2 ssp3 ssp4 other st1 st2 st3
option pricing model used
black 
scholes
black 
scholes
black 
scholes
black 
scholes
black 
scholes
black 
scholes
black 
scholes
black 
scholes
black 
scholes
black 
scholes
black 
scholes
weighted average fair value 5p 5p 8p 13p 6p 8p 11p 4p 8p 10p 18p
weighted average share price 12p 23p 35p 45p 21p 28p 38p 20p 41p 50p 42p
weighted average exercise price 14p 28p 43p 44p 20p 26p 37p 25p 49p 61p 51p
basis of expected volatility 60 40 40 40 40 40 40 40 40 40 60
riskfree rate 43 5 50 43 43 43 302 43 302 302 302
expected option term years 5  3 3 3 3 3 3 3 3 5
expected dividends per year 2 2 2 2 2 2 2 2 2 2 2
19 reserves
the movement on individual reserves is set out in the 
statement of changes in shareholders’ equity on pages 36 
and 39
own shares held in trust 
the system c healthcare plc employee benefit trus the 
“trust” holds 5387741 ordinary shares of 1p each with a 
cost of £2768000 2009 £1235000 and a market value as 
at 31 may 2010 of £2182000 2009 £1121000 the trust 
acquired 2287741 of these shares at 54p each on the 
placing and admission of the company’s ordinary shares to 
aim in june 2005 a further 3100000 shares were acquired 
from an institutional placing at 49p each and the shares were 
admitted to aim on 5 august 2009
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
as at 31 may 2010 4908188 2009 300000 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 2009 1p none of these shares 
had vested with the employees as at 31 may 2010 the trust 
has waived its right to dividends
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 51p 2009 417p
the group has a provision for national insurance 
contributions of £29000 2009 £50000 in respect of 
liabilities arising from the above sharebased payment 
transactions in respect of its employees
the following table summarises the key assumptions used in 
calculating the sharebased payment charge for the year
assumptions on expected volatility and expected option term have been made on the basis of historical data wherever 
available for the year corresponding with the vesting period of the option best estimates have been used where historical 
data is not available in this respect system c  annual report and financial statements 2010
74
notes to the financial statements
21 acquisitions
211 liquidlogic limited
on 16 july 2009 the company purchased the entire issued share capital of liquidlogic limited for £10434000 in cash 
including acquisition expenses of £288000 no further deferred consideration will be payable as specific performance 
criteria have not been met during the year 
the table below sets out the group’s assessment of the fair values of assets and liabilities acquired and the resulting 
consideration adjustments have been made to separately identify intangible assets acquired
book value per
management accounts
£’000
adjustments to fair 
values
£’000
fair value to the 
group
£’000
intangible assets
 software  intellectual property  1412 1412
 customer contracts  1784 1784
property plant and equipment 101  101
deferred tax asset 361  361
trade and other receivables 2112  2112
cash and cash equivalents 1902  1902
trade and other payables 2036  2036
deferred tax on intangible assets  895 895
net assets acquired 2440 2301 4741
goodwill 5693
consideration including costs of acquisition 10434
group and company
year ended
31 may 2010
£’000
year ended
31 may 2009
£’000
1p ordinary shares
final paid 044p per share in relation to year ended 31 may 2009
2009 036p in relation to the year ended 31 may 2008
506 314
interim paid 025p per share in relation to the year ended 31 may 2010
2009 paid 022p per share in relation to the year ended 31 may 2009
288 192
794 506
in addition the directors are proposing a final dividend in respect of the financial year ended 31 may 2010 of 050p per share 
which will absorb an estimated £550000 of shareholders’ equity
if approved it will be paid on 15 november 2010 to those shareholders who are on the register of members on 15 october 2010
20 dividends
goodwill of £5693000 represents the expected synergies particularly in respect of the ability of system c to access the social 
care market as well as the value of the industry specific knowledgetechnical skills within this market
in its last financial period of 12 months to 31 march 2009 liquidlogic limited made a profit before tax of £252000 after 
charging oneoff nonrecurring preacquisition expenses annual report and financial statements 2010  system c
75
notes to the financial statements
if liquidlogic limited had been included in the group from the start of the financial year it is expected that contribution to 
revenue and profit before tax would have been approximately £67m and £05m respectively
212 conscia enterprise systems limited 
on 8 october 2009 the company purchased the entire issued share capital of conscia enterprise systems limited for 
£856000 in cash including acquisition expenses of £56000
the table below sets out the group’s assessment of the fair values of assets and liabilities acquired and the resulting 
consideration adjustments have been made to separately identify intangible assets acquired
book value per management 
accounts
£’000
fair value to
the group
£’000
property plant and equipment 26 26
trade and other receivables 222 222
cash and cash equivalents 38 38
trade and other payables 190 190
net assets acquired 96 96
goodwill 760
consideration including costs of acquisition 856
goodwill of £760000 represents the expected synergies resulting from strengthening the group’s expertise in webbased 
technologies which enables the group to create new products and pursue new opportunities within the uk healthcare sector 
in its last financial period of 12 months to 30 june 2009 conscia enterprise systems limited made a profit before tax of £162000
between the date of acquisition and 31 may 2010 liquidlogic limited’s results were as follows
£’000
revenue 6458
cost of sales 1730
gross profit 4728
operating expenses 3991
profit from operations 737
financial income 3
financial expense 3
profit before taxation 737
taxation 212
profit for the period after taxation 525 system c  annual report and financial statements 2010
76
notes to the financial statements
if conscia enterprise systems limited had been included in the group from the start of the financial year it is expected that 
contribution to revenue and profit before tax would have been approximately £25m and £05m respectively
if liquidlogic limited and conscia enterprise systems limited had been included in the group from the start of the financial 
year it is expected that the combined revenue and profit before tax for the group including these acquisitions would have been 
approximately £389m and £50m respectively
revenue in relation to these acquisitions excluding intercompany transactions totalled £68m  
213 bluestar uk group limited 
on 8 october 2009 the terms of the earnout arrangements pursuant to the agreement for the acquisition of bluestar uk 
group limited dated 5 may 2009 were revised under the terms of the revised arrangements the earnout was satisfied for a 
total of £335000 of which £234000 was settled in cash and £101000 by the issue of 166667 1p ordinary shares this resulted 
in a reduction of goodwill of £299000
an additional revision was also recognised during the period in respect of an increase in the fair value of intangibles
this is represented by an increase in fair value to the group of £52000 for customer contracts and a decrease of £28000 
regarding software and intellectual property 
fair value to
the group of net 
assets acquired
£’000
at 1 june 2009 312
adjustment 24
at 31 may 2010 336
£’000
revenue 2182
cost of sales 1212
gross profit 970
operating expenses 342
profit from operations 628
financial income 
financial expense 1
profit before taxation 627
taxation 177
profit for the period after taxation 450
between the date of acquisition and 31 may 2010 conscia enterprise systems limited’s results were as follows annual report and financial statements 2010  system c
77
notes to the financial statements
carrying amount
of goodwill
£’000
at 1 june 2009 812
adjustment to fair value 24
decrease in deferred consideration 299
at 31 may 2010 489
the table below shows how the decrease of deferred consideration and adjustments to fair values during the year have 
affected the goodwill balance on acquisition 
214 iq system services limited
during the year deferred consideration of £290000 was paid to iq system services limited
the deferred consideration at the start of the year was £680000 following acquisition and this was reduced by £340000 in the 
year ending may 2009 as specific performance criteria were not met during this period
215 care records limited
in the prior year an adjustment of £50000 was made to reclassify an item that had been recognised as goodwill on 
acquisition to a deferred tax asset
book value per
management accounts
£’000
adjustments to
fair values
£’000
fair value to
the group
£’000
intangible assets
 software  intellectual property 158 90 248
 customer contracts  78 78
property plant and equipment 22  22
trade and other receivables 663  663
cash and cash equivalents 32  32
trade and other payables 623  623
deferred tax on intangible assets 44 40 84
net assets acquired 208 104 336
goodwill note 8 489
consideration 825
the table below sets out the group’s revised assessment of the fair values of assets and liabilities acquired and the resulting 
consideration system c  annual report and financial statements 2010
78
notes to the financial statements
23 related party transactions
the following transactions with relateparties occurred during the year ended 31 may 2010
a transactions with shareholders
during the year professional services were provided to the group by medical information research limited of which s w smith a 
shareholder of the parent company is a director t otal fees levied by medical information research limited in the year amounted 
to £24000 2009 £11000 at the year end the balance due from the group to s w smith amounted to £nil 2009 £11000
during the year legal services were provided to the group by a shareholder l brooks t otal fees levied by l brooks in the year 
amounted to £63000 2009 £11000 at the year end the balance due from the group to l brooks amounted to £5000 2009 £nil
during the year ad hoc services were provided to the company by a shareholder t sackville a consultant specialising in healthcare 
opportunities t otal fees levied by t sackville in the year amounted to £6000 2009 £8000 at the year end the balance due from 
the group to t sackville amounted to £nil 2009 £nil
during the year professional services were provided to the company by endava limited of which m kinton a shareholder of the 
parent company is a director t otal fees charged by endava limited in the year amounted to £337000 2009 £412000 at the year 
end the balance due from the group to endava limited amounted to £32000 2009 £42000
during the year barclays global investors bgi were acquired by the asset management firm blackrock at acquisition the parent 
company had sterling liquidity fund investments in bgi
at year end the company had a cash investment of £2010000 in its largest shareholder blackrock since blackrock completed the 
acquisition of bgi on 1 december 09 the group have received interest from these investments of £6777 
there are no other transactions that require disclosure in accordance with the requirements of ias 24 “related party disclosures”
22 operating lease commitments
the total future minimum lease payments for the company in respect of noncancellable leases based on date of expiry are 
as follows
            group          company
31 may 2010
£’000
31 may 2009
£’000
31 may 2010
£’000
31 may 2009
£’000
land and buildings leases
within one year 473 218 192 189
within two to five years 547 122 107 105
1020 340 299 294
motor vehicle and other leases
within one year 47 50 45 50
within two to five years 35 31 31 31
82 81 76 81
total
within one year 520 268 237 239
within two to five years 582 153 138 136
1102 421 375 375 annual report and financial statements 2010  system c
79
notes to the financial statements
b transactions with subsidiaries
the group has taken advantage of the exemption under ias 24 ‘related party disclosures’ not to disclose transactions and 
balances between group entities that have been eliminated on consolidation
at the year end balances due to subsidiaries from the company amounted to £325000 2009 balances due from subsidiaries 
to the company amounted to £465000 the amounts due from subsidiary undertakings are unsecured interest free and 
repayable on demand
24 post balance sheet events
details of dividends proposed after the balance sheet date are given in note 20
since year end there has been a cost rationalisation programme involving redundancies which will reduce annual operating 
costs by £12m this process has resulted in costs of £214000 being incurred by the company system c  annual report and financial statements 2010
80
directors 
markus bolton 
hedley mayor 
dr ian denley 
jim horsburgh 
thomas chambers 
dr john forrest 
dr christopher mclaren
company secretary 
jane conner
registered number 
01754990
registered office 
brenchley house 
week street 
maidstone 
kent  
me14 1rf 
tel 01622 691616 
fax 01622 691241 
email investorssystemccom
independent auditors 
pricewaterhousecoopers llp 
first point 
buckingham gate 
gatwick 
rh6 0pp
principal bankers 
barclays bank plc 
maidstone corporate banking centre 
po box 427 
4046 high street 
maidstone 
kent  
me14 1tw
nominated advisor and broker 
charles stanley securities  
131 finsbury pavement  
london  
ec2a 1nt
registrars and transfer office 
computershare investor services plc 
po box 859 
corporate actions 
the pavilions 
bridgwater road 
bristol  
bs13 8ae
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
© system c healthcare plc 2010
company information annual report and financial statements 2010  system c
81
notes system c  annual report and financial statements 2010
82
notes annual report and financial statements 2010  system c
83
notes annual report  
financial statements
for year ended 31 may 2010
system c  annual report and financial statements for year ended 31 may 2010
annual report   
financial statements
for year ended 31 may 2010
system c healthcare plc 
brenchley house 
week street 
maidstone 
kent me14 1rf
01622 691616 
wwwsystemccom 
infosystemccom
© system c healthcare plc 2010 
information correct at time of going to press september 2010 


Summary:
 major investment in nextgeneration 
medway products rewarded with key 
strategic contract wins
profit before taxation up 
32 to £54m 
2009 £41m
eps up 9 at 407 
pence 2009 372p
acquisition of liquidlogic limited in 
july 2009 for a total consideration 
of £102m giving system c entry 
into the social care it market
strong cash generation with a net cash 
position as at 31 may 2010 of £186m 
2009 £147m
04
fin an cial highlight s o f t he ye ar
revenues increased by 75 to £383m 
2009 £219m revenues excluding those 
from current year acquisitions increased 
by 44 to £315m 2009 £219m
acquisition of conscia enterprise systems limited in october 
2009 for a total consideration of £08m strengthening the 
group’s expertise in webbased technologies
total dividend increased by 14 to 075p for 
the full year