europe
london
cottons centre 
hays lane
london se1 2qp 
tel 44 020 7940 0490 
fax 44 020 7940 0499 
usa
chicago 
175 west jackson boulevard 
suite 2260 
chicago il 60604 
tel 1 312 922 7600 
fax 1 312 922 7625 
new york
80 broad street
5th floor suite 507
new york ny 10004
tel 1 212 837 7843
fax 1 212 837 7792
asia pacific
singapore 
137 telok a yer street
0707
singapore 068602
tel 65 6216 0452
fax 65 6536 4167
tokyo 
2nd floor kakigaracho bldg
107 nihonbashi kakigaracho 1chome
chuoku
tokyo 1030014 
tel 81 0 3 3668 9372
fax 81 0 3 2664 7594 
sydney 
level 6
underwood house
37 pitt street
sydney nsw 2000
tel 61 0 2 8987 9600
fax 61 0 2 8252 7640
hong kong 
unit 2004 kinwick centre 
no 32 hollywood road central
hong kong sar
tel 852 3180 9512 
fax 852 3180 9399
global growth
solid returns
annual report  accounts 2008
patsystems plc  annual report  accounts 2008 patsystems plc i annual report  accounts 2008
patsystems was established in 1994 
as one of the original independent 
software vendors to provide a 
complete suite of modular products  
to support the electronic trading  
of futures and options
today we enable over 10000 traders 
to transact in the global derivatives 
market every month with extensive 
market connectivity spanning from 
latin a merica to japan 
the comp any
01 business profile
02  who we are
04  what we do
06  where we operate
highlights
08 highlights
the year in review 10 chairman’s statement
14 chief executive’s report
20 finance director’s review
governance
26 our board
28 directors’ report
31 statement of corporate 
governance
33 r eport of the board on 
directors’ r emuneration and  
on group remuneration policy
financial statements
37 independent auditors’ report
39 consolidated income 
statement
40 consolidated balance sheet
41  consolidated cash flow 
statement
42 notes to the financial 
statements
75 independent auditors’ report
76 company balance sheet 
77 notes to the financial 
statements
84 directors and advisors hig hlig hts th e year in r eview g overnan ce finan cial state ments
tvv
1
highlights t he company the year in review governance financial statements
patsystems plc i annual report  accounts 2008
business profile
in 2008 87 of patsystems annual turnover was recurring rising from 86 
in 2007 and 84 in 2006 t he predictability of our revenue has allowed the 
business to invest significant sums in new product development in 2008 r isk 
monitor our low latency pretrade risk management tool was launched to 
complement r isk informer our posttrade risk offering
revenue
£37m 0363p £196m
adjusted pretax profit proposed fullyear dividend tvv
who we are
2 patsystems plc i annual report  accounts 2008
our foundation 
patsystems was founded in 1994 
by a team of derivatives traders 
and it experts who recognised 
that the derivatives industry 
was moving towards electronic 
trading and built systems that 
would lead the way as traders 
migrated away from open  
outcry trading
since then patsystems has 
continued to innovate and 
lead the market in electronic 
trading of derivatives by 
developing a range of scalable 
and versatile trading modules 
risk management systems and 
exchange systems 
product history 
patsystems’ first trading 
frontend jtrader is now 
a well recognised name in 
the derivatives industry with 
extensive global distribution  
to complement jtrader  
promark and iqtrader have 
been launched in recent years 
to provide an advanced and 
featurerich suite of trading 
tools a longside these well
established frontends patsystems 
offers both proprietary and fix 
apis which are currently used  
by thousands of developers 
o ur trading solutions are 
complemented by our 
extensive network of exchange 
connectivity patsystems offers 
direct market access to over 
50 exchanges along with 
indirect access through our 
unique xlink network xlink 
allows patsystems’ customers to 
leverage one another’s exchange 
memberships in 2008 patsystems 
launched an extension to 
our capability to support the 
broadest possible range of 
products and trading styles with 
an extension to our existing 
synthetic o rder management 
system syoms  t his extension 
is called algoserver and enables 
customers to develop customised 
algorithms and trade non
exchange supported order types 
in addition to trading platforms 
patsystems offers an exchange 
solution that includes matching 
clearing and settlement t he 
exchange system is built around 
the patsystems matching engine 
pme t he pme was acquired 
from exchange network systems 
in 2000 and supports a number of 
exchanges across asia including 
the tokyo grain exchange kansai 
commodities exchange the 
agricultural futures exchange 
of thailand and the national 
commodity exchange l imited  
in pakistan
in august of 2005 patsystems 
acquired the entire issued share 
capital of tamesis l imited 
t he acquisition extended our 
trading and exchange offerings 
to include risk solutions with 
the r isk informer product r isk 
informer enables the realtime 
quantitative analysis of risk 
across multiple asset classes  
in 2008 patsystems developed  
a multiasset class pretrade  
risk offering risk monitor
corporate history 
t he company floated on  
the london stock exchange 
in march 2000 and transferred 
to the alternative investment 
market aim in february 
2003 patsystems plc is an aim 
listed company incorporated in 
england and w ales registered 
under company number 
4498002 with its registered 
office at cotton centre  
hays lane london se1 2qp 
patsystems enables  
over 10000 traders  
to transact in the  
global derivatives  
market every month tvv
3 patsystems plc i annual report  accounts 2008
hig hlig hts t he company the y ear in re vi ew gove rnan ce finan cial stat ements
identify potential 
acquisition targets 
where our global sales 
and support capability 
combined with our 
strong working capital 
and cash generation 
can leverage longterm 
growth and value
consolidate our position 
within our existing 
customer base and 
leverage the opportunity 
from their potential 
rationalisation of their 
technology platforms  
to extend our position  
as their key supplier
explore opportunities  
for further expansion  
in south america 
greater china and  
the indonesia  
singapore region
generate new revenue 
streams from our 
range of new product 
offerings global 
trading risk monitor 
and algoserver
strategy mission business objectives
to be the external partner of choice for investment banks and futures clearing merchants for  
the provision of electronic trading trade matching and risk management technology
identifying complementary 
products for partnership 
or acquisition
increasing revenue 
contribution from new 
products to existing and 
new customers
extending patsystems’ 
coverage beyond the 
geographical centres  
we currently serve
continuing to develop and 
deploy new and existing 
technology investments 
both as components and 
single solutions
increasing revenue 
contribution from new 
products to existing and 
new customers
extending patsystems’ 
coverage beyond the 
geographical centres  
we currently serve
continuing to develop and 
deploy new and existing 
technology investments 
both as components and 
single solutions
case study
the client
newedge
the challenge
manage risk and set position 
limits across multiple vendor 
platforms
the solution
a platformindependent  
system that could aggregate 
trades across the entire 
business portfolio in realtime 
with the ability to monitor 
limits and trigger alerts 
the result
with the risk informer 
installation in chicago 
newedge has the capability 
to riskmanage its clients 
worldwide on a realtime 
posttrade basis t his enables 
the firm to expand by offering 
clearing services to a wider 
range of clients
case study
revenue
£37m 0363p £196m
adjusted pretax profit proposed fullyear dividend tvv
4 patsystems plc i annual report  accounts 2008
what we do
we deliver tailored solutions 
built from modular components 
to enhance derivatives trading 
performance and trade 
processing o ur solutions range 
from plugandplay modules  
that address specific issues  
to complete highperformance 
trading systems with extensive 
global access to derivatives 
exchanges and clearers
w e work in partnership with 
our customers to deliver robust 
systems that align with their 
business strategies – and have 
done since our foundation in 
1994 l eading banks trading 
houses hedge funds and 
professional traders in the 
futures industry rely on us to 
exploit the benefits of electronic 
trading in derivatives fx  
energy and other asset classes
tech nology p ro duct 
o f t he ye ar 
promark named 
“technology product of 
the year” at the futures 
 o ptions w eekly fow  
2008 awards ceremony
the client
banca imi
the challenge
banca imi was faced with 
customers requesting access  
to a growing list of exchanges 
around the world w hile 
providing an expanded service 
is crucial to retaining these 
customers purchasing new 
exchange memberships is not 
always an economical way to 
keep pace with demand
the solution
xlink a powerful software 
tool that enables multiple 
patsystems users to interconnect 
and utilize each other’s 
exchange memberships
the result
banca imi customers can  
access the markets they want 
to trade and banca imi has a 
costeffective way to broaden 
their service offerings
case study tvv
5 patsystems plc i annual report  accounts 2008
hig hlig hts t he company the y ear in re vi ew gove rnan ce finan cial stat ements
trading solutions 
frontend systems and fix 
connectivity to enable trading 
across all the major futures 
exchanges and liquidity pools
customers 
45 customers globally •	
customers include some of the •	
largest global futures clearing 
merchants such as morgan 
stanley citigroup newedge 
and mf global
risk solutions
platform independent pre and 
posttrade risk management across 
all asset classes in realtime 
customers 
9 customers globally •	
newedge and mf global  •	
with global licenses 
exchange solutions
endtoend exchange system 
automates all steps in the trade 
cycle from front to back office
customers 
tokyo grain exchange •	
agricultural futures exchange 
of t hailand the national 
commodity exchange l imited 
in pakistan and the kansai 
commodities exchange
our solutions
products
promark
jtrader
iqtrader
algoserver
trading api
products
risk informer
risk monitor
products
patsystems matching engine
jclear
revenue
£37m 0363p £196m
adjusted pretax profit proposed fullyear dividend patsystems plc i annual report  accounts 2008
tvv
6
a s patsystems strives to be the 
partner of choice for investment 
banks and futures clearing 
merchants around the globe 
we continue to develop cutting 
edge technology and expand 
our global reach through our 
xlink network and dedicated 
exchange gateways patsystems 
covers all major global markets 
and liquidity pools 
patsystems operates seven 
offices around the globe to 
serve our customer base 
with headquarters in london 
regional hubs are located in 
chicago singapore and tokyo 
chicago usa
38 of patsystems 
revenue is generated in 
the usa with chicago 
serving as the birthplace 
of futures trading and 
home to the largest 
derivatives exchange in 
the world 
new york usa
the new york office 
is responsible for the 
ongoing support of 
large global clients such 
as citigroup and  
morgan stanley
where we operate 7 patsystems plc i annual report  accounts 2008
hig hlig hts t he company the y ear in re vi ew gove rnan ce finan cial stat ements
tvv
london uk
headquartered  
in london 35  
of patsystems revenue  
is generated from  
the uk and europe 
hong kong
the hong k ong o ffice 
opened in 2007 and is 
responsible for winning 
3 new clients in 2008 – 
ascot financial services 
guotai junan futures 
and the hong k ong 
mercantile exchange
singapore
patsystems has 
experienced over 50 
growth rate in recurring 
revenue year on year 
for the last 4 years in 
singapore and we see 
this trend continuing
sydney australia
patsystems sydney office 
has been established 
for 8 years and supports 
large global clients such 
as macquarie bank and 
mf global 
tokyo japan
patsystems tokyo office 
provides full support for 
our exchange business 
as well as support for 
our j apanese language 
frontends 
revenue
£37m 0363p £196m
adjusted pretax profit proposed fullyear dividend dividend per share p
adjusted pret ax profit £m
finan cial hig hlig hts 
revenue increased by 15 to £196 million 2007 £170 million 
adjusted pretax profit increased by 23 to £37 million 2007 £30 million 
cash flow from operating activities of £36 million 2007 £26 million 
cash balances at the year end of £59 million 2007 £32 million 
proposed full year dividend of 0363p per share 2007 033p 
operational highlights
billable promark trading screen user numbers increased to 571 2007 375 
promark awarded ‘technology product of the year’ by futures  options w eek 
increased adoption of risk informer 
highlights
035
030
025
020
015
010
005
0
0
‘05 ‘06 ‘07 ‘08
‘05 ‘06 ‘07 ‘08
profit before tax after adjusting for share option costs markingtomarket of derivatives used 
to hedge cash flows and amortisation of intangibles other than internally developed software
a strong set of results 
which demonstrates the 
fundamental strength  
of both our business  
and business model
net cash flows from  
operating activities £m
40
35
30
25
20
15
10
05
0
35
30
25
20
15
10
05
0
‘05 ‘06 ‘07 ‘08
8 patsystems plc i annual report  accounts 2008 patsystems plc i annual report  accounts 2008
hig hl ig hts t he com pany the y ear in r ev iew gover nan ce finan cial st at ements hig hl ig hts t he com pany the y ear in r ev iew gover nan ce finan cial st at ements
9
“given the challenges currently facing the financial 
sector i am delighted to be able to report another very 
successful year for patsystems at the half year stage 
we stated that despite a slow first half we remained 
confident of meeting expectations for the full year and 
it is testament to the management team and the quality 
of our offering that we have in fact exceeded them”
“trading subsequent to the year end has progressed  
in line with our expectations and our sales pipeline  
is already delivering exciting opportunities for 
2009 w e remain confident of fulfilling our growth 
aspirations despite the tough economic climate”
“o perating cash flows improved by 38 to £36m 
from £26m in the prior year as a result the group 
ended the year with a cash balance of £59m”
chairman’s st atement
chief executive’s repor t
finance director’s review
page 10
page 14
page 20
revenue
£37m 0363p £196m
t his has been  
a very successful year 
both in terms of the level 
of adjusted profit and 
more importantly in the 
current economic climate 
the amount of cash 
generated
adjusted pretax profit proposed fullyear dividend 10 patsystems plc i annual report  accounts 2008
i am delighted to report a 
strong set of results for the 2008 
financial year which have been 
achieved against a backdrop of 
significant change in our markets 
and the overall economic turmoil 
i believe this demonstrates the 
fundamental strength of both 
our business and business model
at the half year results  
i commented that sales wins 
expected in the first half of  
the year had crystallised later 
than expected i am pleased  
to confirm that the confidence 
i expressed in our sales pipeline 
was well founded and that 
market expectations have  
been fully achieved
t he recurring nature of a 
substantial proportion of 
our trading systems revenue 
combined with continued growth 
in demand for our posttrade 
risk product risk informer has 
delivered both revenue growth 
and a robust cash position for 
the business we have continued 
to add new customers as well 
as developing further our 
relationships with existing clients
cash flows from operating activities 
amounted to £36 million compared 
to £26 million in 2007 we expect  
this level of cash generation to 
continue in the forthcoming 
year the year end cash balance 
stood at £59 million 2007  
£32 million and the business 
remains debt free
financial results
adjusted pretax profit being 
profit before tax after adjusting 
for share option costs marking 
to market of derivatives used 
to hedge cash flows and 
amortisation of intangibles 
other than internally developed 
software for the full year ended 
31 december 2008 increased  
to £37 million compared to  
£30 million in 2007 adjusted 
pretax profit is the definition 
of profit used by analysts to 
measure the performance 
of the company
adjusted diluted eps on this 
basis and excluding the impact 
of deferred tax grew to 19p per 
share from 17p per share last 
year details of these calculations 
are set out in the earnings per 
share section of the finance 
director’s review
pretax profit for the full year 
ended 31 december 2008 was 
£207 million compared to 
£219 million in 2007 diluted 
eps was 03p per share 2007 10p
increase in cash flow from 2007
38
year on year growth of dividend
10
chairman’s statement
increase in adjusted pretax profit
23
“i am pleased to  
confirm that confidence 
in our sales pipeline 
was well founded 
and that market 
expectations have  
been fully achieved”
richard last 
chairman 11 patsystems plc i annual report  accounts 2008
hig hl ig hts t he com pany the y ear in r ev iew gover nan ce finan cial st at ements
87 of revenue in 2008 was  
of a recurrent nature compared 
to 83 in 2007 demonstrating 
the inherent strength of the 
patsystems business model t his 
provides an excellent basis up 
on which to develop and plan 
the growth of the business 
dividend
following the dividend of 
021p per share approved by 
shareholders at the annual 
general meeting on 17 april 
2008 relating to the results 
for 2007 the board declared 
an interim dividend of 0126p 
payable in september 2008 
based on the interim results 
for the year
patsystems is expected to 
continue to generate resilient 
positive operating cash flow in 
2009 and beyond in light of 
this and combined with our 
strong year end cash position 
the board is recommending the 
payment of a final dividend of 
0237p based on the results for 
2008 as a whole bringing the 
total dividend for the year to 
0363p per share compared to 
a total of 033p for 2007 this 
gives a year on year growth 
of 10 in our dividend
news
hong kong mercantile
the newly formed hong kong 
mercantile exchange has 
selected patsystems to provide 
trading and risk management 
technology 12 patsystems plc i annual report  accounts 2008
subject to confirmation at the 
annual general meeting the 
final dividend will be paid on 
29 may 2009 to shareholders on 
the register as at 1 may 2009 the 
shares are expected to be quoted 
ex dividend on 29 april 2009 
management and st aff
o n behalf of the nonexecutive 
directors i would like to 
congratulate david w ebber 
martin thorneycroft and the 
senior patsystems management 
team for their stewardship of 
the company during one of the 
most challenging periods since 
its foundation t he operational 
structure developed over the 
time since david’s appointment 
has contributed significantly to 
the growth of the business and 
will i am sure provide a solid 
foundation during what is likely 
to be a challenging 2009 
o n behalf of the board  
i would like to congratulate 
kieron o ’toole on his 
appointment as o perations 
director in september 2008 
kieron has now added the 
product development and 
quality assurance functions  
to his existing remit of customer 
support and implementations 
kieron is looking to strengthen 
further the management of 
the product and development 
functions during 2009 as well  
as pursuing opportunities  
for efficiency gains
board
as he set out in last year’s annual 
report stewart millman stood 
down as chairman and retired 
from the board of patsystems at the 
annual general meeting last year 
i should like to thank stewart on 
behalf of the board and personally 
for his substantial contribution to 
the growth and development of 
patsystems he left the business 
profitable cash generative and 
wellplaced to take advantage of 
the many business opportunities 
available i greatly respect stewart’s 
advice and guidance and wish 
him every success with the many 
other ventures i know he intends 
to be involving himself with
i should also like to thank steve 
sparke and john priestley for 
their support during my first 
period as chairman of patsystems 
their business experience and 
wise counsel has been particularly 
beneficial during a challenging 
business period
v isibilty
chairman’s statement continued
strong sales pipeline for 2009
positive
“despite the general 
economic outlook  
we expect business  
to grow in 2009”
richard last 
chairman
recurring revenue base 13 patsystems plc i annual report  accounts 2008
hig hl ig hts t he com pany the y ear in r ev iew gover nan ce finan cial st at ements
customers and shareholders
t he ongoing support of our 
customers is fundamental to the 
success and growth of the business 
i am delighted that in addition 
to existing customers extending 
their use of patsystems’ products 
and services during the year 
we have also added a breadth 
of new customers across all the 
markets in which we operate 
i would also like to thank our 
shareholders for their continued 
support particularly when equity 
valuations have been subject to 
the vagaries of volatile market 
sentiment i believe the result 
for 2008 and the prospects for 
the business in 2009 justify their 
confidence and support  
in patsystems
future
patsystems enters 2009 with 
a strong sales pipeline with 
a number of major business 
opportunities that are expected 
to be signed during the first half 
of 2009 and will benefit the result 
for this current financial year
with the high visibility that 
results from our recurring 
revenue base combined with 
a strong well qualified sales 
pipeline we remain positive 
that despite the general 
economic outlook we expect 
the business to continue to 
grow in 2009 
the business is also expected 
to continue to be strongly 
cash generative during 2009 
and the board believes we are 
well positioned to weather the 
present economic uncertainties
richard last
chairman nonexecutive director
9 february 2009
news
increased adoption  
of risk informer
considerable success for the 
risk informer product with 
new sales at gh financials  
and royal bank of canada 
capital markets 14 patsystems plc i annual report  accounts 2008
revenue has risen 15 to  
£196 million compared to  
£170 million in 2007 with 
improved contributions from  
all three product segments
earlier in the year it was necessary 
to advise shareholders that the 
business had experienced a delay 
in the closure of new business 
opportunities and the result for 
the first half of the financial year 
would be impacted by those 
delays i am delighted to report 
that as was forecast at the time 
of the announcement those 
delayed sales have been 
concluded during the second 
half of the year
the conclusion of those sales 
opportunities has meant that the 
second half performance of the 
business was substantially ahead 
of the first half t he adjusted 
profit for the second half of the 
year was £33 million compared 
to £04 million in the first half
operating expenses were 186 
higher at £172 million when 
compared to £145 million in 2007
t here are three significant 
components to this increase in 
costs £2 million due to planned 
increased staff costs compared 
to 2007 £035 million due to 
the increase in amortisation of 
intangible assets and a net foreign 
exchange loss of £02 million
during the year the number of 
third party contractors has been 
reduced from a peak of 15 in the 
first half to 3 at the end of the year 
o verall operating costs in 2009 are 
planned to be broadly in line with 
2008 so that anticipated increases 
in revenue will benefit the overall 
profitability should there be 
an unanticipated contraction in 
revenue then contingency plans 
exist to reduce the cost base
trading systems and  
market connectivity
trading systems revenue increased 
by 15 to £164 million for the 
year compared to £143 million 
in 2007
during the year there have been 
new customer wins with the 
hong kong mercantile exchange 
advantage futures in north 
america gk goh financial services 
in singapore and ascot financial 
services and guotai junan futures 
both in hong kong
t he performance of the hong 
kong office in its first full year  
of operation has been particularly 
pleasing and we look forward 
rise in revenue
15
billable users of promark
571
chief executive’s report
“revenue has risen 15 to 
£196 million compared 
to £170 million in 
2007 with improved 
contributions from all 
three product segments”
david w ebber  
chief executive 15 patsystems plc i annual report  accounts 2008
hig hl ig hts t he com pany the y ear in r ev iew gover nan ce finan cial st at ements
to further opportunities in hong 
kong mainland china and taiwan
i am delighted to report a further 
and ongoing increase in the 
number of users for the promark 
professional trading tool at the 
end of the financial year there 
were 571 billable users compared 
to 375 at the start of the year 
adoption of the promark 
tool at mf global morgan 
stanley and newedge has been 
particularly strong during the 
year two of our major customers 
have forward purchased their 
2009 trading screen requirement 
which is a clear demonstration of 
their commitment to both their 
businesses and patsystems this 
revenue will be recognised  
during 2009
as a recognition of the 
significant product investment 
we have made in the promark 
product in 2008 it was awarded 
the “technology product of the 
year” by futures and o ptions 
w eek magazine
promark 50 was released 
in july 2008 and this release 
contained a host of new 
functionality as well as an 
improved logon capability 
improving download speeds  
for the start of the day’s  
trading by over 60
o ther functional improvements 
included an enhanced microsoft 
excel plugin capability to enable 
a broader population to use 
the functionality and promark 
control which enables an 
appropriately mandated super 
user or administrator to monitor 
or intervene on any order or 
trade account
t he existing core system was 
improved by the release of 
version 40 for the software in 
september 2008 the release 
included a substantial extension 
to the data capacity of the 
order routing capability and 
further improvements to 
the transaction handling to 
ensure the product’s operating 
performance remains ahead of 
our customers’ requirements
xlink is patsystems’ 
proprietary network that 
enables patsystems users 
to leverage both exchange 
memberships and operations 
within territories where they 
are not present by way of 
utilising the installations and 
exchange memberships of other 
customers xl ink adoption 
continued to grow in 2008
deployment of global trading 
our new core offering was 
delayed during the year due 
to integration issues and as 
was reported at the half year 
is not expected to contribute 
to revenue materially until the 
second half of 2009
t he latest version of global 
trading version 11 is functionally 
equivalent to the current core of 
the existing system and is fully 
compatible with the current 
trading screen versions of jtrader 
and promark as well as all of our 
existing exchange connectivity
promark billable users news
promark growth 
the number of billable  
promark users grew to  
571 compared to 375 at  
the start of the year
600
500
400
300
200
100
0
‘05 ‘06 ‘07 ‘08 16 patsystems plc i annual report  accounts 2008
deployments of global trading 
are scheduled with existing 
customers during 2009 and 
macquarie bank l imited and 
morgan stanley have contracts 
for its deployment in place
t here have been continued 
extensions to our market 
connectivity in 2008 with 
connectivity to the indian 
national stock exchange and the 
bombay stock exchange with mf 
global the turkish derivative 
exchange turkdex  the tokyo 
stock exchange and the major 
connectivity project in 2008 
the upgrade to the fix fast 
communication protocol for the 
cme group replacing their long 
standing market data protocol
connectivity to exchanges in 
brazil and malaysia is under 
development with planned 
release in the first half of 2009
risk systems
revenue from our risk systems 
business grew by 21 to £17 
million from £14 million in 2007 
and £07 million in 2006 
during the year there was 
considerable success for the risk 
informer product with new sales 
of the product to gh financials 
and royal bank of canada 
capital markets to support the 
management of their post
trade risk on exchange traded 
derivatives business
there were further sales of 
extension licences to newedge 
and mf global during the year to 
support their additional business 
use of risk informer and a 
significant risk informer sale to a 
major investment bank to manage 
the trading of their clients for 
exchange traded derivatives
it is firmly our belief that risk 
informer is the market leading 
product for the management 
and control of posttrade risk for 
exchange traded derivatives and its 
proven capability to risk other asset 
classes’ means that we continue to 
have great optimism for the growth 
in opportunities from this product
i am pleased to announce 
that we have just concluded a 
successful beta of our new pre
trade product risk monitor 
as i stated last year risk monitor 
is a low latency pretrade risk 
management tool designed to 
monitor trades ahead of them 
being traded on an exchange t his 
provides the customer with the 
opportunity to be alerted or even 
to intervene before a trade occurs 
w e have had considerable 
interest within our customer 
base for this type of capability 
and we expect risk monitor to 
commence generating licence 
revenue in 2009
exchange systems
revenue from the exchange 
systems business was £15 million 
for the year compared to 
£13 million in 2007 and was 
primarily from the provision 
of support maintenance and 
associated consultancy services
o n 4 january 2008 tokyo grain 
exchange successfully launched 
three futures products namely 
arabica and robusta bean coffee 
contracts and raw sugar on the 
new continuous exchange system 
provided by patsystems
o n the 5 january 2009 tokyo 
grain exchange launched a non
gmo soybean contract on the 
continuous exchange system
in contrast to previous years 
there have been a number of 
sales opportunities to provide 
our matching engine capability 
in conjunction with our trading 
and risk offerings though as yet 
none of these opportunities have 
materialised in sales 
chief executive’s report continued
“revenue from our risk 
systems business grew 
by 21 to £17 million 
from £14 million in 
2007 and £07 million  
in 2006”
david w ebber  
chief executive 17 patsystems plc i annual report  accounts 2008
hig hl ig hts t he com pany the y ear in r ev iew gover nan ce finan cial st at ements
the availability of the matching 
engine capability within our product 
portfolio continues to open up sales 
opportunities for the rest of our 
product range with the chinese 
futures exchange trading system 
and the hong kong mercantile 
exchange being prime examples 
of this these opportunities may 
not have been available without 
the dialogue about the matching 
and clearing product set as a first 
basis for engagement
though we remain optimistic about 
the opportunity to successfully sell 
our exchange solution we have 
not factored any contribution from 
matching engine sales within our 
business plan for 2009
brand and marketing
w e continuously challenge  
and scrutinise the value that 
we get from our marketing 
expenditure and in 2008 we 
invested £02 million i am 
very satisfied as to how well 
established the key brand 
message we introduced in 2008 
has become “powers trades 
builds exchanges manages 
risk” neatly epitomises our 
core proposition and has been 
consistently reinforced in our 
marketing activities in 2008
in 2008 we decided to withdraw 
from a number of trade shows 
that we felt had not delivered 
value by way of foot fall 
senior prospect or customer 
engagement and have invested 
more extensively in the shows 
that we believe enable us to 
communicate our message  
most effectively
in late 2008 we tested the use 
of an online marketing 
approach rather than the 
mixture of trade press adverts 
and advertorial we have used 
in the past t his was highly 
successful and delivered 
a measurable return on 
investment for 2009 we have 
appointed a us agency to 
support our head of marketing 
based in chicago in extending 
the online marketing strategy
stra tegy and  
product development
o ur strategy remains unchanged 
in that we aspire to be the 
trusted technology partner of 
choice for our customers and 
prospects within our area of 
domain expertise electronic 
trading systems exchange 
systems and risk
o ur internal product investment 
and continued ongoing search 
for potential targets for 
acquisition is focused at present 
on complementing the existing 
product capability and strategy
as i reported above we have 
continued to invest across the 
existing product range as well 
as continuing the development 
of new product offerings such 
as risk monitor
revenue
trading systems revenue risk systems revenue exchange systems revenue 
£164m £17m £15m
trading systems – 837
risk systems – 76
exchange systems – 87 18 patsystems plc i annual report  accounts 2008
within 2008 we launched an 
extension to our capability to 
support the broadest possible 
range of products and trading 
styles with an extension module 
to our existing syoms system
syoms is a patsystems tool 
that enables traders to execute 
products that do not exist on an 
exchange such as a stop time 
triggered or limit orders by 
simulating their existence
the new extension module to 
syoms is called algoserver and 
enables syoms to support a range 
of algorithms t he first release has 
a selection of algorithms provided 
by patsystems but subsequent 
versions will enable users to 
introduce their own algorithms  
by way of our proprietary api
in 2009 our focus will be 
to conclude the first live 
deployments of both global 
trading and risk monitor and 
to commence the first beta 
deployment of algoserver to one 
of our existing syoms customers
t he other significant investment 
that we will be making in 
2009 is the establishment of a 
technical framework to reduce 
the ongoing development 
and support costs of exchange 
connectivity for the future 
we have recruited a new product 
head for the connectivity team 
and removed the fragmentation 
that existed with our connectivity 
team members being based in 
both london and chicago
the instigation of new processes 
and the change in individuals 
within the team will mean 
there will be a lower level 
of productivity within the 
connectivity team in the first half 
of 2009 but we expect to see the 
return on improved productivity 
and shorter development lead  
times in future periods
executive management 
committee
the executive management team 
of patsystems is comprised of the 
two executive directors martin 
t horneycroft and i barry w hite 
and patrick kenny heads of asia 
and north america respectively 
graeme neilly head of european 
sales lorna blane head of human 
resources and kieron o’t oole 
operations director
in september 2008 
kieron o’t oole extended his 
responsibility from support 
and implementations across 
all areas of o perations for the 
patsystems business globally
pat and barry have continued 
to develop their regions during 
the year and graeme has further 
developed his european sales and 
account management team
in march 2008 jon regan left 
patsystems to join a customer 
and in september 2008 andy 
edwards left the business after 
many years’ service as head of 
development i would like to 
thank andy and jon for their 
contribution to the business 
during my tenure as ceo 
i would like to thank all my 
executive management team 
members for their support and 
efforts during the last year
business evolution 
and st aff
though the compliment of staff has 
changed during the year overall 
staff numbers are broadly the same 
as the start of the year at 156
headcount increases within the 
singapore support and technical 
analyst teams have been 
compensated for by efficiencies 
and head count reductions 
elsewhere in the business we have 
continued our policy of offering the 
opportunity for our staff to develop 
their careers within the business 
with the option to relocate to other 
countries during the year we have 
had two staff from london relocate 
“i am delighted to  
report a further and 
ongoing increase in the 
number of users for the 
promark professional 
trading tool”
david w ebber  
chief executive
chief executive’s report continued 19 patsystems plc i annual report  accounts 2008
hig hl ig hts t he com pany the y ear in r ev iew gover nan ce finan cial st at ements
to singapore and one member  
of staff relocate to chicago 
i would also like to particularly 
congratulate the l ondon technical 
and support staff for their 
handling of a disaster recovery 
event in april 2008 t he building 
in which patsystems operates 
in london lost all electrical 
power for 48 hours when the 
local electricity substation was 
flooded our disaster recovery 
plans were instigated and not 
only did no customers suffer any 
service interruption but none 
of our customers were even 
aware that key support and 
development services had moved 
to our disaster recovery site
i would like to thank all of our 
staff for their hard work during 
2008 and they can feel justifiably 
proud of their performance and 
our results for the year
business objectives  
and outlook
our key objectives for 2009 
are as follows
• 	 c o n s o l i d a t e 	 o u r 	 p o s i t i o n 	 w i t h i n	
our existing customer base and 
leverage the opportunity from 
their potential rationalisation 
of their technology platforms 
to extend our position as their 
key supplier
• 	 generate	new	revenue	streams	
from our range of new product 
offerings global t rading risk 
monitor and algoserver
•	 identify 	 potential 	 acquisition	
targets where our global 
sales and support capability 
combined with our strong 
working capital and cash 
generation can leverage long
term growth and value
• 	 e x p l o r e 	 o p p o r t u n i t i e s 	 f o r	
further expansion in south 
america greater china and the 
indonesia  singapore region
trading subsequent to the year 
end has progressed in line with 
our expectations and our sales 
pipeline is already delivering 
exciting opportunities for 2009 
w e remain confident of fulfilling 
our growth aspirations despite 
the tough economic climate
david webber
chief executive 
9 february 2009 20 patsystems plc i annual report  accounts 2008
as both richard and david have 
already reported this has been 
a very successful year both in 
terms of the level of adjusted 
profit and more importantly in 
the current economic climate the 
amount of cash generated
adjusted profit increased 23 
to £37 million from £30 million 
in 2007 and operating cash 
flow also improved by 38 to 
£36 million from £26 million in 
the prior year as a result of the 
net cash increase of £27 million 
the group ended the year with 
a cash balance of £59 million 
adjusted profit is a measure 
used by the analysts that 
cover the group including the 
analyst from our house broker 
seymour pierce adjusted profit 
removes volatile noncash items 
to show an underlying level of 
profitability that enables the 
results for the business to be 
compared on a consistent basis 
for each accounting period 
the adjustments made to the 
reported pretax profit on 
ordinary activities are to add 
back the charge or credit for 
i share option costs ii the 
markingtomarket of derivatives 
that are used to hedge overseas 
foreign currency cash flows and 
iii amortisation of intangibles 
other than those charges for 
internally developed software 
t he table in the earnings 
per share section details the 
adjustments made to operating 
profit in both this current and 
the prior year
during 2008 the group has seen 
sterling fall to levels against 
both the us dollar and the 
japanese yen that have not 
been experienced previously by 
patsystems the average rates 
used to translate the dollar and 
yen currencies in our profit and 
loss account in 2008 were 184 and 
19076 respectively against rates 
of 201 and 23550 in 2007 t he 
weakness of sterling is even starker 
when the rates used to translate 
our year end balance sheet are 
compared the 2008 year end rates 
for the dollar and yen were 144 
and 13086 compared to 200 and 
22400 in 2007
the group revenues for 2008 
have benefited by approximately 
£1 million as a result of the 
exchange rate movements 
conversely operating costs that 
are denominated in dollars and 
yen namely salaries and property 
costs have also increased this 
exchange rate movement has 
resulted in an additional cost of 
approximately £400k and hence 
“cash and cash 
equivalents increased 
to £59m from £32m 
last year”
m artin thorneycroft  
finance director
finance director’s review
operating cash flow £36m
38
23
adjusted profit £37m 21 patsystems plc i annual report  accounts 2008
hig hl ig hts t he com pany the y ear in r ev iew gover nan ce finan cial st at ements
the net contribution to adjusted 
profit is approximately £600k 
other foreign exchange gains 
and losses are shown in note 5  
to the accounts
the group’s balance sheet 
has also benefited from the 
movement in exchange rates with 
opening net assets denominated 
in foreign currencies benefiting 
from the significant movements 
in year end rates the year end 
cash balance benefited by £700k 
as a result of the exchange  
rate movements
revenue
total group revenue grew by 
£26 million to £196 million 
from £170 million last year 
adjusting for the effect of the 
movements in foreign exchange 
the underlying growth in total 
group revenue was 10
trading systems
trading systems revenue grew 
from £143 million in 2007 to 
£164 million in 2008 an  
increase of 15
exchange systems
exchange systems revenue 
increased by £02 million to  
£15 million from £13 million  
in 2007
risk systems
revenues from the risk  
systems business grew by 21  
to £17 million from £14 million 
in 2007
operating expenses
o perating expenses increased 
by £27 million to £172 million 
from £145 million in 2007 
approximately £04 million 
of this increase was due to 
the weakening of sterling 
against the dollar and yen
t he majority of the increase 
in overheads is attributable 
to staff costs which increased 
by £20 million as a result of a 
combination of salary increases 
in january 2008 new recruits 
less time being capitalised into 
development projects and an 
increased level of contracted 
resource during the first half  
of 2008 the number of 
contractors peaked at 15 in 
february 2008 and was reduced 
to 3 by the end of 2008 t his 
number is expected to remain 
the same during 2009
at 31 december 2008 the group 
had 156 permanent staff 2007 
150 and 3 contractors 2007 12
in addition to the increase in staff 
costs amortisation of capitalised 
development costs increased by 
£044 million to £062 million 
and the marktomarket charge 
for future years dollar forward 
contracts purchased to hedge 
future cash flows increased to 
£088 million from £010 million 
in 2007
adjusted eps pence
20
15
10
05
0
‘05 ‘06 ‘07 ‘08 22 patsystems plc i annual report  accounts 2008
the above cost increases were 
offset to some extent by an 
increase in other exchange gains 
of £059 million to £068 million 
comprised of realised gains of 
£059 million and unrealised gains 
of £009 million and a reduction 
in expenditure on marketing 
travel and entertaining costs  
of £015 million
profit on ordinar y  
activities before t axation
the profit on ordinary activities 
before taxation was £21 million 
2007 £22 million
taxation
t he group has tax losses carried 
forward of £21 million and will 
not be paying tax on its profits 
in most taxation jurisdictions 
for a number of years small 
amounts of withholding tax 
may or may not arise from 
timetotime depending on 
the geographical locations of 
customers with whom the group 
does business 
t he current tax charge shown on 
the face of the income statement 
of £015 million comprises of a 
corporation tax charge in japan 
of £014 million and withholding 
tax of £001 million t he 
deferred taxation charge of  
£13 million arises largely in 
respect of the usage of trading 
losses in the year and the impact 
of the movement in exchange 
rates on the us and japanese 
deferred tax assets
profit for the year
profit for the year fell to 
£06 million 2007 £18 million 
after adjusting for the deferred 
tax charge profit for the year 
decreased to £19 million from 
£21 million in 2007
earnings per share
basic eps has fallen to 03p from 
11p and diluted eps has fallen 
to 03p from 10p last year
the board monitors the 
company’s eps performance  
by reference to adjusted pretax 
profit less current tax deferred 
tax is excluded from this measure 
because of its potential volatility 
the adjusted eps calculations on 
this basis are shown opposite 
int angible and  
tangible fixed assets
goodwill
goodwill at the year end 
amounts to £325m t his 
incorporates an increase  
in the year of £14k in  
relation to the difference 
between the estimated 
contingent consideration  
at 31 december 2007 and  
the final settlement made  
in the year
£3 million of the goodwill 
balance relates to the acquisition 
of tamesis in 2005 as previously 
commented the risk systems 
element of our business continues 
to see strong growth
intangible assets
during the year the group 
expended £086 million on 
intangible assets 2007  
£180 million t his spend 
included £081 million of 
capitalised development costs in 
respect of new products that will 
generate revenues in future years 
t hese costs will be amortised over 
three to five years from the date 
of completion t he amortisation 
period reflects the expected life  
of the particular asset capitalised
tangible assets
during the year the group 
purchased fixed assets totalling 
£013 million 2007 £042 
million t he majority of this 
consisted of computer hardware
finance director’s review continued
“adjusted fully diluted 
eps has grown by 12 
to 19p from 17p in 
2007”
m artin thorneycroft  
finance director 23 patsystems plc i annual report  accounts 2008
hig hl ig hts t he com pany the y ear in r ev iew gover nan ce finan cial st at ements
current assets
trade receivables
trade receivables have increased 
by £17 million to £44 million 
from £27 million in 2007 the 
strengthening of the us dollar 
and japanese yen against sterling 
accounted for £525k of the 
increase the remainder of the 
increase is due to the increase in 
sales in the final quarter of  
the year during the year the 
group has not suffered any 
significant bad debt writeoffs
prepayments and accrued income 
have increased by £055 million 
£03 million of this is due to the 
increase in the accrued income  
on the risk informer sales
financial assetsl iabilities – 
derivative financial instruments
financial assets represent the 
“markedtomarket“ value of 
derivatives used to hedge the 
group currency exposures the 
derivatives used are forward 
contracts and currency options 
t hese derivatives are marked 
to market monthly and the 
resulting “profit or loss” is taken 
to the income statement
adjusted earnings per share calcula tions
2008
£’000
2007
£’000
profit for the year attributable to equity holders of the company 616000 1844000
taxation 1450000 344000
profit on ordinary activities before taxation 2066000 2188000
share option costs 329000 210000
movement in fair value of hedging instruments 883000 97000
amortisation of intangibles 391000 483000
pretax adjusted profit on ordinary activities 3669000 2978000
current taxation 152000 36000
posttax adjusted profit 3517000 2942000
weighted average number of shares 178982340 168090000
effect of dilutive share options 4462772 6529743
effect of contingent share consideration – 1092000
183445112 175711743
adjusted eps 20p 18p
adjusted diluted eps 19p 17p 24 patsystems plc i annual report  accounts 2008
current liabilities
trade payables have fallen 
slightly to £029 million from 
£032 million in 2007 other tax 
and social security has increased by 
£037 million as a result of vat and 
sales tax due on the higher level 
of sales made in the final quarter 
of 2008 accruals have grown to 
£16 million from £11 million in 
the previous year mainly as a result 
of an increase in sales commission 
pertaining to the final quarter sales 
deferred income has increased 
by £089 million as a result of the 
growth in the level of block licenses 
purchased by clients the revenue 
from these block licences will be 
released to the income statement 
on a monthly basis during 2009
business risks
t he principal business risks remain 
the same as in previous years 
however in the current economic 
climate the group has added a 
further business risk which in previous 
years the group did not consider 
significant namely bad debts
competition
t he group operates in a growing 
but competitive market there are 
three major software suppliers 
in the global electronic trading 
systems market for futures and 
options of which patsystems is one 
there are many smaller companies 
who supply screens but not market 
connectivity in such a market there 
is always a risk that customers could 
move to other competitors and 
there is always downward pressure 
on margins patsystems mitigates 
this risk by supporting its brands 
with appropriate marketing activity 
and by consistently extending its 
market connectivity as well as 
improving its software customer 
support and customer care
bad debts
as has been seen by the demise 
of many well known financial 
institutions over the last 9 months 
the deterioration in the global 
economic climate has been 
particularly painful in the financial 
services sector as the majority of 
our clients are financial services 
organisations the group considers 
that the potential for a client to 
get into financial difficulties and 
not to be able to pay its debts has 
increased in order to mitigate this 
risk patsystems reviews all client 
accounts on a monthly basis and 
takes appropriate action to keep 
accounts within payment terms
during the year l ehman brothers 
a client for many years entered 
into chapter 11 in the us and was 
subsequently sold all debts due 
from lehman were recovered in full
customer consolidation
consolidation within the financial 
services industry has occurred 
over the past few years and 
further consolidation remains 
a risk where consolidation 
takes place the risk to the 
group’s business is typically to 
the revenues associated with 
market connectivity and support 
and maintenance we mitigate 
this risk by actively adding new 
customers products and asset 
categories to our portfolio 
revenue profile
87 of patsystems revenue is 
recurring in nature and in stark 
contrast to many technology 
companies this gives a level 
of guarantee for a minimum 
level of operating profit for the 
business on an annual basis
however with products such as 
risk informer playing an integral 
role in the group’s future growth 
expectations and the significant 
revenues from these opportunities 
being nonrecurring in nature the 
propensity for organisations such 
as the investment banks to defer 
finance director’s review continued
“87 of patsystems 
revenue is recurring 
in nature and in 
stark contrast to 
many technology 
companies this gives 
a level of guarantee 
for a minimum level of 
operating profit” 25 patsystems plc i annual report  accounts 2008
hig hl ig hts t he com pany the y ear in r ev iew gover nan ce finan cial st at ements
technology investments during 
tougher economic climates is a 
risk to our business it remains too 
early for us to assess what impact 
the credit crisis will have on 2009 
purchasing decisions but our strong 
wellqualified sales pipeline 
leads us to be optimistic 
cash and treasur y 
the group generated net 
cash inflows from operating 
activities of £36 million 2007 
£26 million and £099 million 
2007 £222 million was invested 
in intangible and tangible assets 
dividends of £06 million 2007 
£07 million were paid during the 
year cash and cash equivalents 
increased to £59 million from 
£32 million last year
t he group is exposed to foreign 
currency risk on sales purchases 
and cash balances that are 
denominated in a currency 
other than sterling t he principal 
currency giving rise to this risk is 
the us dollar group policy is to 
carry forward cover for 75 of 
us £ net anticipated exposure for 
12 months forward that level of 
cover is in place and is comprised 
of a mixture of forward contracts 
and options t he average us £ 
exchange rate used in the 2008 
income statement was 184 t he 
average rate of the hedges in 
place for 2009 is 177
key performance indica tors
2008 2007 2006
revenue £196m £170m £153m
operating profit as a percentage of sales 99 123 103
adjusted pretax profit £37m £30m £21m
operating profit £19m £21m £16m
operating cash flow £36m £26m £27m
diluted eps 03p 10p 41p
diluted adjusted eps 19p 17p 11p
promark screens deployed at year end 571 375 129
average number of professional jtrader screens 
deployed during the year 1163 1360 1462
martin thorneycroft
finance director
9 february 2009  26 patsystems plc i annual report  accounts 2008
richard last
chairman nonexecutive director age 51
richard is chairman and nonexecutive director of aim listed  
knowledge technology solutions plc a financial software business  
and a nonexecutive director of the british smaller companies oct plc 
t he british smaller technology companies v ct 2 plc where he is also 
chairman both of which are listed on the london stock exchange  
he is also a nonexecutive director of aim listed companies lighthouse 
group plc and corero plc and director of a number of private companies 
including sphinx cst limited apd communications and cse global 
uk limited both it companies richard a fellow of the institute of 
chartered accountants holds a ba hons from sheffield university
david webber 
chief executive age 43
david was appointed chief executive of patsystems in january 2006  
he was formerly chief executive of attentiv systems group where  
his business leadership saw the company through significant expansion 
by both organic growth and acquisition he led the management buyout 
subsequent aim flotation of the business and was retained as chief 
executive when attentiv systems group plc was acquired by t ietoenator in 
may 2005 david a member of the institute of chartered accountants since 
1989 holds a bsc economics from the london school of economics
martin thorneycroft
finance director age 47
martin joined patsystems as finance director in july 2004  
he was previously finance director of profile media group plc  
martin a member of the institute of chartered accountants having 
qualified with ernst and young in 1986 holds a b com from 
birmingham university
our board
“t he operational 
structure has 
contributed 
significantly to the 
growth of the business 
and will provide a solid 
foundation during 
what is likely to be  
a challenging 2009” hig hl ig hts t he com pany the y ear in r ev iew gover nan ce finan cial st at ements
27 patsystems plc i annual report  accounts 2008
john priestley
nonexecutive director chairman of the audit committee 
age 59
john has over 30 years experience in the software and  
services sector and in 2003 concluded a 13 year career with  
british telecommunications as director of business development  
for syntegra previously he was a director of kapiti and a divisional 
director with hoskyns 
 
steve sparke
nonexecutive director chairman of the remunera tion 
and nomina tion committee age 50
steve has had a 28 year career in the city spanning interest rate  
trading and futures and options broking and is currently chairman  
of the futures and options association he was global head of ubs 
exchange traded derivatives business until april 2006 and has driven 
a number of the technologyled changes within the fcm industry 
steve was a nonexecutive director of euronextliffe and chaired the 
exchange’s audit and risk committee until november 2007 currently 
steve holds the position of group coo of marex financial limited steve 
graduated with a law degree from nottingham university in 1979 28 patsystems plc i annual report  accounts 2008
the directors present their report for patsystems plc and the audited financial statements for the year ended  
31 december 2008
principal activities
the principal activities of the group are the development distribution and support of software enabling
the electronic trading of financial products on global trading exchanges 
real time trade capture valuation and risk management for the structured finance market 
results and dividends
the profit on ordinary activities attributable to shareholders after taxation amounted to £616000 2007 £1844000 
the proposed dividend for the year is detailed in the chairman’s statement on page 11
review of business and future developments
the directors are pleased with the group’s performance during the year and its position at 31 december 2008  
the directors are confident that performance will continue to improve in 2009 and beyond 
the review section of this report contains a detailed assessment of the business and future projects 
reviews of the risks faced by the business are detailed in the chief executive’s report and the finance director’s 
review the finance director’s review also details the key performance indicators kpis for the year
proceeds from shares issued during the year
£86000 was received in proceeds from the exercise of share options during the year ended 31 december 2008 
2007 £112000
substantial shareholdings
on 4 february 2009 the following holdings of 3 or more of the issued share capital of patsystems plc were 
known company 
beneficial owner as notified to the company number of shares 
ion trading uk limited 52851191 2944
brandes investment partners lp 13687500 762
brewin dolphin limited 12982122 723
sedaf holdings sa 10064600 561
herald investment management limited 6900000 384
rathbone investment management limited 5375000 300
directors
the directors of the company together with those who served during the year are as follows
executive directors  nonexecutive directors 
d webber  r last 
m thorneycroft   j priestley
   s sparke 
   s millman resigned 17 april 2008
directors’ report highlights the company the year in review governance financial statements
29 patsystems plc i annual report  accounts 2008
directors and their interests
ordinary shares of 1p each in patsystems plc 4 february 2009 31 december 2008 31 december 2007
d webber 825000 825000 600000
m thorneycroft 40000 40000 40000
r last 786886 786886 786886
j priestley 91017 91017 91017
s sparke 250000 250000 250000
s millman resigned 17 april 2008 192282 192282 1192282
details of the directors who have an interest in share options are disclosed in the remuneration report
save as disclosed in this report and note 28 there were no other contracts subsisting during or at the end of the 
financial year in which a director of the company is or was materially interested
employee involvement
the directors recognise the importance of employee involvement established by good communications and working 
relationships the decentralised nature of the group’s activities necessitates that the practical application of this 
policy is the responsibility of local management in a manner appropriate to their circumstances
employment policies
the group is committed to the terms of the codes of practice for the elimination of all or any discrimination and to 
the promotion of equality of opportunities in employment 
it is group policy to afford equal opportunities to all employees and job applicants no employee or job applicant 
is less favourably treated than another on the grounds of their sex sexual orientation age marital status religion 
race nationality ethnic or national origin colour or disability and all appointments and promotions are determined 
solely by merit
it is also group policy to encourage and assist in the employment training retraining and career development  
of disabled persons where possible having regard to their suitability for a particular vacancy and the nature of  
the group’s activities in the event that employees become disabled during employment the group will where 
possible continue their employment and arrange appropriate training
responsibility for monitoring the effective working of these policies is vested in martin thorneycroft  
the finance director
financial instruments and financial risk management
the group’s activities expose it to a variety of financial risks and it has developed and operates an overall risk 
management programme that recognises the unpredictability of financial markets and seeks to minimise potential 
adverse effects on the group’s financial performance 
financial risk management is under the control of the finance director and is carried out centrally for the group  
in compliance with policies approved and monitored by the full board the board regularly reviews the effectiveness 
of these policies examining specific areas including foreign exchange risk interest rate risk credit risk and the 
extent to which financial instruments are being used to hedge certain risk exposures 
details of the group’s exposures to market credit and liquidity risks are set out in note 3 to the financial statements
research and development
during the year the company continued to invest in research and development rd all expenditure whether incurred 
through internal staff costs or through third party suppliers relating to rd that satisfies the criteria for capitalisation 
under ias 38 ‘intangible assets’ is capitalised otherwise it is written off to the income statement in the period incurred
creditor payment policy
given the international nature of the group’s operations there is no standard code for the group in respect 
of payments to suppliers operating subsidiaries are responsible for agreeing terms and conditions for their 
business transactions when orders for goods and services are placed ensuring that suppliers are aware of the 
terms of payment and including the relevant terms in contracts where appropriate these arrangements are 
adhered to provided that suppliers meet their contractual commitments 30 patsystems plc i annual report  accounts 2008
creditor days have not been calculated for the company as it is an investment holding company
charitable and political donations
the group made charitable contributions of £500 during the year 2007 £500 the donations were  
made to macmillan cancer support no political donations were made in 2008 or 2007
disclosure of information to auditors
for each of the persons who were directors at the time this report was prepared the following applies
so far as the directors are aware there is no relevant information of which the company’s auditors are unaware and 
the directors have taken all the steps that they ought to have taken as directors in order to make themselves aware  
of any relevant audit information and to establish that the company’s auditors are aware of that information
disclosure and transparency rules dtr
the company has complied with the dtr so far as they are applicable to aim listed companies
annual general meeting
the notice convening the annual general meeting agm together with the proposed resolutions is being sent 
to shareholders the agm will be held on 28 april 2009
statement of directors’ responsibilities
company law requires the directors to prepare financial statements for each financial year which give a true  
and fair view of the state of affairs of the company and the group as at the end of the year and of the profit  
or loss of the group for the year in preparing those financial statements the directors are required to
select suitable accounting policies and then apply them consistently 1 
make judgements and estimates that are reasonable and prudent 2 
state whether applicable accounting standards have been followed subject to any material departures disclosed 3 
and explained in the financial statements
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group 4 
will continue in business
the directors confirm that the financial statements comply with the above requirements
the directors are responsible for the maintenance and integrity of the patsystems website information published 
on the internet is accessible in many countries with different legal requirements legislation in the united kingdom 
governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions
the directors are responsible for maintaining proper accounting records which 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 1985 as amended from time to time the directors 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
for and on behalf of the board of patsystems plc
martin thorneycroft  registered office 
company secretary   cottons centre 
    hays lane
9 february 2009   london se1 2qp
continued
directors’ report highlights the company the year in review governance financial statements
31 patsystems plc i annual report  accounts 2008
the following statement of corporate governance reflects the position of the group as at 31 december 2008
the board is responsible for the group’s corporate governance policy and recognises the importance of high 
standards of integrity and consistently seeks to apply the principles set out in the combined code on corporate 
governance the “code” to the extent that they are appropriate for and applicable to a company of patsystems’ 
size quoted on the alternative investment market “aim”
directors
details of the dates of appointment and resignation of directors within the year are shown in the directors’ report 
all directors are subject to reelection within a threeyear period the roles of the chairman and chief executive are 
separate and have been so throughout the year
the nonexecutive directors are considered to be ‘independent’ within the definition contained in the code the non
executive directors meet without the presence of the executive directors whenever it is appropriate for them to do so
all the directors have access to the advice of the company secretary and may in furtherance of their duties take 
independent legal and financial advice at the company’s expense they also have access to the minutes of the 
board in which any concerns expressed by them regarding matters pertaining to the group are recorded
while there is no formal process the performance and effectiveness of each director including the nonexecutive 
directors is assessed on an ongoing basis by the other members of the board
board meetings
the board generally meets monthly and at such other times as required and receives regular reports on a wide 
range of key issues including operational performance risk management and corporate strategy
the board’s accountability is demonstrated by the adoption of a formal schedule of matters specifically reserved 
to the board for its decision concerning all key areas across the group’s activities thereby ensuring that all major 
decisions affecting the group are taken at board level all the directors are free to bring any matter to the 
attention of the board at any time
committees
the audit committee and the combined remuneration and nominations committee meet at least twice a year
audit committee
the audit committee is chaired by john priestley and comprises all the nonexecutive directors prior to 
17 april 2008 the audit committee was chaired by richard last the external auditors together with the  
finance director and other financial staff are invited to attend these meetings as and when required
in accordance with its terms of reference the principal function of this committee is to determine the 
appropriateness of accounting policies to be used in the group’s annual results in addition the committee  
is responsible for monitoring the independence of the group auditors assessing the group’s audit arrangements 
and the group’s system of internal controls and reviewing the halfyearly and annual results before publication
remuneration and nominations committee
the remuneration and nominations committee comprises all the nonexecutive directors and is chaired by  
steve sparke prior to 17 april 2008 the committee was chaired by john priestley
in accordance with its terms of reference the committee determines the level and makeup of remuneration 
including bonuses and options of the executive directors and certain senior management this also includes 
formulation of remuneration policy throughout the group embracing both share options and bonuses
the committee also evaluates the balance of skills knowledge and experience on the board and considers all  
new board appointments and reappointments against this evaluation
the report of the board on directors’ remuneration and on group remuneration policy giving details of company 
policy and individual directors’ remuneration is set out on pages 33 to 36 the remuneration arrangements of the 
nonexecutive directors are determined by the board as a whole
the notice period provisions contained in the directors’ service agreements are summarised on page 35 of these accounts
statement of corporate governance 32 patsystems plc i annual report  accounts 2008
executive management committee
the executive management committee the “emc” under the chairmanship of the chief executive or in his 
absence the finance director meets monthly and is responsible for the daytoday running of the group the 
members of the emc are the two executive directors of the company together with the five key business heads 
who are not directors
relations with shareholders
the board welcomes the views of shareholders
the annual general meeting agm is used as an opportunity to communicate with shareholders all shareholders are 
encouraged to attend the company’s agm in order to take advantage of the opportunity to ask questions of the directors
shareholders may also contact the company in writing or via its website which is regularly updated additional 
information is supplied through the circulation of the interim report and the annual report and accounts during 
the year the company issued a series of announcements to the stock exchange the chief executive finance 
director and the chairman from time to time meet individual and institutional shareholders and provide such 
information as is permissible in order to facilitate a better understanding of the group’s business and operations
internal control
the board of directors has overall responsibility both for the group’s system of internal controls which includes 
internal financial controls and for reviewing their effectiveness the directors recognise that no system of internal 
control can provide absolute assurance the group’s systems are designed to manage the risk of failure to achieve 
business objectives and therefore can only provide the directors with reasonable assurance against material 
misstatement or loss
the key elements of the group’s internal control system which have been operational for the whole of the financial 
year are as follows
management structure 
the board has overall responsibility for the group and there is a formal schedule of matters specifically reserved for 
decision by the board each executive director has been given responsibility for specific aspects of the group’s affairs 
reporting to the chief executive is the emc which is responsible for the day to day running of the group’s affairs
 monitoring systems used by the board 
the board receives regular reports on the financial and business performance of the group the board is 
regularly advised through these reports on the working capital position and financial performance relative to the 
group’s approved budget
internal audit 
the board reviews from time to time the need for an internal audit function and remains of the opinion that the systems 
of internal financial control are appropriate to the group’s present activities and that such a function is unnecessary
going concern
the directors have reasonable expectation that the company and the group have adequate resources to continue  
in operational existence for the foreseeable future for this reason they continue to adopt the going concern basis 
in preparing the financial statements
compliance statement
corporate governance procedures are subject to regular review by the board throughout the year the directors 
believe that the group has complied with the provisions as set out in section 1 of the code to the extent that  
they are appropriate for and applicable to a company of patsystems’ size quoted on aim
for and on behalf of the board of patsystems plc
martin thorneycroft
company secretary
9 february 2009
continued
statement of corporate governance highlights the company the year in review governance financial statements
33 patsystems plc i annual report  accounts 2008
remuneration committee
the remuneration committee which comprises all of and only nonexecutive directors determines group 
remuneration policy and the remuneration including bonuses and options of executive directors and certain 
other senior management
policy on group remuneration
the company’s policy is to set the remuneration of senior executives including executive directors at a level to 
attract and retain executives of appropriate ability and experience to manage the affairs of the company this 
approach contains costs improves employee benefits and increases the company’s competitiveness in the market 
for scarce skills in formulating its remuneration policy the remuneration committee is mindful of the competitive 
pressures inherent in a sector that straddles both the software and financial services industries it is the company’s 
policy that a significant element of total remuneration is related to the financial performance of the company 
remuneration is reviewed annually
the remuneration package
the remuneration package comprises base salary and benefits pension contributions annual bonus and longterm 
incentive arrangements all senior employees of the group including the executive directors are remunerated 
using the policy described below
base salary and benefits
base salary takes into account the performance of the individual and information from independent sources on 
market levels of remuneration the executive directors basic salaries are reviewed by the committee prior to the 
beginning of each year the executive directors are also entitled to private medical death in service critical illness 
permanent health insurance and subsidised health club membership
pension contributions
the group operates a defined contribution pension scheme for eligible uk employees neither of the executive 
directors are members of this scheme the executive directors receive a company contribution to their individual 
pension arrangements
annual bonuses
bonus scheme arrangements are in place for all members of staff including the executive directors bonuses for the 
executive directors are linked to the performance of the group and staff bonuses are based on individual performance
longterm incentives
share options
the group operates two share option plans – an enterprise management incentive share option scheme emi and a 
standard unapproved share option scheme all senior staff including the executive directors participate in both schemes
options awarded under the first of three main grants vested in full in 2006 an aggregate total of 20 of the options 
awarded under the second and third grants of both schemes vested on 14 february 2007 and 16 vested on 11 february 2008 
unless these options have been subject to separate vesting criteria agreed by the remuneration committee during the 
year a further 40 will vest on 9 february 2009 the remaining 24 of the options will be carried forward into 
future years and the remuneration committee will determine what performance conditions to attach to them in 2009
the company has also made a number of special awards under both schemes to directors and senior employees 
which will vest in between one and three years from the date of grant subject to certain performance conditions 
the board is currently reviewing the ongoing effectiveness of its incentive schemes
cashbased longterm incentive scheme
during 2007 the group introduced a new cashbased longterm incentive scheme “the cash scheme” the 
maximum conditional award allowable under the three year cash scheme is 100 of salary with each award  
vesting no earlier than the third anniversary from date of grant and vesting being subject to achievement of 
performance conditions and continued employment “the awards” when the awards to the directors vest they 
will be expected to use 50 of the net of tax amount to purchase the company’s shares in the open market until 
such time as a total personal shareholding has been achieved which is equivalent to 100 of base salary 
report of the board on directors’ remuneration 
and on group remuneration policy 34 patsystems plc i annual report  accounts 2008
in the event of a change of control eg a takeover the awards will vest provided the remuneration committee 
is satisfied that it is fair and reasonable for them to do so eg that the terms of a takeover implicitly reflect 
prospective performance on a scale that would have resulted in full vesting
the performance conditions attached to the awards require adjusted fully diluted predeferred tax earnings per 
share eps growth from the 2006 financial year to the 2009 financial year of between 10 compound per annum 
to 30 compound per annum for between 30 and 100 of the award to vest the awards vest on a straight line 
basis between minimum and maximum thresholds 
directors’ emoluments
salaryfees
 
£
bonus
£
benefits in kind
£
total 
2008
£
total 
2007
£
executive directors
d webber 236900 225414 4763 467077 292072
m thorneycroft 149750 141586 2576 293912 185480
nonexecutive directors
r last 40842 – – 40842 30000
j priestley 30000 – – 30000 29167
s sparke 30900 – – 30900 30000
s millman 24590 – – 24590 45000
s douglas mann – – – – 14167
512982 367000 7339 887321 625886
 s millman resigned on 17 april 2008
 s douglasmann resigned on 19 april 2007
the increase in the bonuses paid in the year is as a result of i the improvement in the group’s adjusted profit and 
ii the waiver of part of the 2007 bonus entitlement
pensions
the group operates a defined contribution pension scheme for eligible uk employees the executive directors that 
served during the year were not members of this scheme the following contributions to their private pensions 
were charged to the income statement
 
2008
£
 
2007
£
d webber 24600 23000
m thorneycroft 15509 14500
40109 37500
continued
report of the board on directors’ remuneration 
and on group remuneration policy highlights the company the year in review governance financial statements
35 patsystems plc i annual report  accounts 2008
directors’ contractual terms
d webber m thorneycroft r last j priestley s sparke
date appointed 03jan06 05jul04 17feb03 01jan07 29sept06
service contract  yes yes no no no
notice period
– by company 12 months 6 months 3 months 3 months 3 months
– by director 12 months 6 months 3 months 3 months 3 months
benefits death in service death in service – – –
pension 10 10 – – –
 all the nonexecutive directors are engaged under “letters of appointment”
in the event that an offer for the entire issued share capital of patsystems plc becomes wholly unconditional  
the executive and nonexecutive directors are entitled to 12 months notice
directors’ share options
scheme type exercise price
outstanding 
options at  
31 december 2008 
and 2007 exercise date expiry date
d webber emi 1375p 727272 note 1 140216
unapproved 1375p 3272728 note 2 140216
unapproved 2900p 1000000 note 3 190417
5000000
m thorneycroft emi 1525p 655737 note 4 300714
unapproved 1525p 344263 note 5 300714
unapproved 1800p 500000 note 5 170315
1500000
the ifrs 2 charge to the income statement in relation to these options was £171000
note 1 these options were granted under a special award of the enterprise management incentive emi scheme 
these options can be exercised after a period of three years after the date of the grant two thirds of these 
options can be exercised after a period of three years after the date of the grant but subject to the group 
achieving growth in adjusted fully diluted predeferred tax eps from the 2005 financial year to the 2008 
financial year of 10 compound per annum
note 2 these options were granted under special awards of part b inland revenue unapproved of the patsystems 
plc 2003 share option scheme exercise conditions are as per note 1
note 3 these options were granted under special awards of part b inland revenue unapproved of the patsystems 
plc 2003 share option scheme these options can be exercised after a period of three years after the date 
of grant but subject to the group achieving growth in adjusted fully diluted predeferred tax eps from the 
2006 financial year to the 2009 financial year of 10 compound per annum 36 patsystems plc i annual report  accounts 2008
note 4 options were granted under the second and third awards of the enterprise management incentive emi 
scheme 20 of these options awarded under the second and third grants of both schemes vested on  
14 february 2007 and 16 vested on 11 february 2008 a further 40 will vest on 9 february 2009  
 the remaining 24 of the options will be carried forward into future years and the remuneration 
committee will determine what performance conditions to attach to them in 2009
note 5 these options were granted under the second and third awards of part b inland revenue unapproved  
of the patsystems plc 2003 share option scheme these options have all vested in 2008
the midmarket price of the company’s shares at the end of the financial year was 15p and the range of market 
prices during the year was 12p to 29p
directors’ awards under the cashbased longterm incentive scheme
date of award maximum amount 
of award
£
vesting date
d webber 190407 130000 190410
m thorneycroft 190407 85000 190410
the performance conditions attached to the awards require adjusted fully diluted predeferred tax eps growth 
from the 2006 financial year to the 2009 financial year of between 10 compound per annum to 30 compound 
per annum for between 30 and 100 of the award to vest the awards vest on a straight line basis between 
minimum and maximum thresholds 
when the awards to the directors vest they will be expected to use 50 of the net of tax amount to purchase 
the company’s shares in the open market until such time as a total personal shareholding has been achieved which 
is equivalent to 100 of base salary in the event of a change of control eg a takeover the awards will vest 
provided the remuneration committee is satisfied that it is fair and reasonable for them to do so eg that the 
terms of a takeover implicitly reflect prospective performance on a scale that would have resulted in full vesting
the charge to the income statement for the year ended 31 december 2008 in relation to these awards was £36000
steve sparke
chairman remuneration committee
9 february 2009
continued
report of the board on directors’ remuneration 
and on group remuneration policy highlights the company the year in review governance financial statements
37 patsystems plc i annual report  accounts 2008
we have audited the group financial statements of patsystems plc for the year ended 31 december 2008 which 
comprise the consolidated income statement the consolidated balance sheet the consolidated cash flow 
statement the consolidated statement of recognised income and expense and the related notes these group 
financial statements have been prepared under the accounting policies set out therein
we have reported separately on the parent company financial statements of patsystems plc for the year ended 
31 december 2008
respective responsibilities of directors and auditors
the directors’ responsibilities for preparing the annual report and the group financial statements in accordance 
with applicable law and international financial reporting standards ifrss as adopted by the european union are 
set out in the statement of directors’ responsibilities
our responsibility is to audit the group financial statements in accordance with relevant legal and regulatory requirements 
and international standards on auditing uk and ireland this report including the opinion has been prepared for and 
only for the company’s members as a body in accordance with section 235 of the companies act 1985 and for no other 
purpose we do not in giving this opinion accept or assume responsibility for any other purpose or to any other person to 
whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing
we report to you our opinion as to whether the group financial statements give a true and fair view and whether 
the group financial statements have been properly prepared in accordance with the companies act 1985 we also report to 
you whether in our opinion the information given in the directors’ report is consistent with the group financial statements 
in addition we report to you if in our opinion the company has not kept proper accounting records if we have not 
received all the information and explanations we require for our audit or if information specified by law regarding 
directors’ remuneration and other transactions is not disclosed
we also report to you whether in our opinion the information given in the directors’ report is consistent with the 
audited group financial statements the information given in the directors’ report includes that specific information 
presented in the chairman’s statement chief executive’s report and finance director’s review that is cross referred 
from the review of business section of the directors’ report
we read other information contained in the annual report and consider whether it is consistent with the audited 
group financial statements the other information comprises only the directors’ report the chairman’s statement 
the chief executive’s report the finance director’s review the statement of corporate governance and the report 
of the board on directors’ remuneration and on group remuneration policy we consider the implications for our 
report if we become aware of any apparent misstatements or material inconsistencies with the group financial 
statements our responsibilities do not extend to any other information
basis of audit opinion
we conducted our audit in accordance with international standards on auditing uk and ireland issued by the 
auditing practices board an audit includes examination on a test basis of evidence relevant to the amounts 
and disclosures in the group financial statements it also includes an assessment of the significant estimates 
and judgments made by the directors in the preparation of the group financial statements and of whether the 
accounting policies are appropriate to the group’s circumstances consistently applied and adequately disclosed
we planned and performed our audit so as to obtain all the information and explanations which we considered 
necessary in order to provide us with sufficient evidence to give reasonable assurance that the group financial 
statements are free from material misstatement whether caused by fraud or other irregularity or error in forming our 
opinion we also evaluated the overall adequacy of the presentation of information in the group financial statements
independent auditors’ report to the members of patsystems plc 38 patsystems plc i annual report  accounts 2008
independent auditors’ report to the members of patsystems plc
opinion
in our opinion
the group financial statements give a true and fair view in accordance with ifrss as adopted by the european union  
of the state of the group’s affairs as at 31 december 2008 and of its profit and cash flows for the year then ended
the group financial statements have been properly prepared in accordance with the companies act 1985 and 
the information given in the directors’ report is consistent with the group financial statements 
pricewaterhousecoopers llp
chartered accountants and registered auditors
london
9 february 2009
continued highlights the company the year in review governance financial statements
39 patsystems plc i annual report  accounts 2008
notes 2008
£’000
2007
£’000
revenue 4 19627 16962
cost of sales  485 336
gross profit 19142 16626
operating expenses  17203 14539
operating profit 5 1939 2087
finance income 7 127 101
profit on ordinary activities before taxation 2066 2188
current taxation charge 152 36
deferred taxation charge 1298 308
taxation – total 8 1450 344
profit for the year attributable to equity holders of the company  616 1844
earnings per ordinary share 10
 – basic 03p 11p
 – diluted 03p 10p
the income statement has been prepared on the basis that all operations are continuing operations 
consolidated income statement 
for the year ended 31 december 2008 
consolidated income statement 
for the year ended 31 december 2008 
2008
£’000
2007
£’000
profit for the year 616 1844
foreign exchange adjustment on foreign currency net investments 628 144
total recognised income for the year 1244 1988 40 patsystems plc i annual report  accounts 2008
consolidated balance sheet
notes
2008
£’000
2007 
restated
£’000
assets
noncurrent assets
goodwill 12 3251 3237
intangible assets 13 3527 3674
property plant and equipment 14 516 752
deferred tax assets 15 5877 6673
trade and other receivables 17 519 371
  13690 14707
current assets
inventories 16 3 12
trade and other receivables 17 6476 4366
financial assets – derivative financial instruments 27 – 30
income tax 3 40
cash and cash equivalents 18 5929 3191
  12411 7639
liabilities
current liabilities
trade and other payables 19 4923 3169
financial liabilities – derivative financial instruments 27 853 –
current income tax liabilities – 20
contingent consideration – 290
provisions 20 82 –
  5858 3479
net current assets 6553 4160
noncurrent liabilities
trade and other payables 19 50 44
provisions 20 139 129
  189 173
net assets 20054 18694
equity
capital and reserves attributable to equity holders of the company
share capital 22    1795 1775
share premium account 24    3869 3792
other reserves 24    20862 20570
retained earnings 24 6472 7443
total equity 25    20054 18694
 see note 1
the financial statements on pages 39 to 74 were approved by the board of directors on 9 february 2009
david webber    martin thorneycroft
chief executive officer   finance director
at 31 december 2008  highlights the company the year in review governance financial statements
41 patsystems plc i annual report  accounts 2008
2008
£’000
2007
£’000
cash flows from operating activities
cash flows from operations 3556 2647
interest received 127 101
tax paid 135 157
net cash flows from operating activities 3548 2591
cash from investing activities
purchase of intangible assets 864 1792
purchase of property plant and equipment 126 423
net cash flows used in investing activities 990 2215
cash flows from financing activities
net proceeds from issue of ordinary share capital 86 112
dividends paid to company’s shareholders 602 693
net cash flows used in financing activities 516 581
net increasedecrease in cash and cash equivalents 2042 205
cash and cash equivalents at beginning of the year 3191 3251
exchange gains on cash and cash equivalents 696 145
cash and cash equivalents at end of the year 5929 3191
2008
£’000
2007
£’000
net profit 616 1844
tax 1450 344
depreciation of property plant and equipment 409 425
amortisation of intangible assets 1014 668
share compensation expense 329 210
finance income 127 101
decrease in inventories 9 176
increase in trade and other receivables 1487 716
decrease in financial assets and liabilities 883 97
increasedecrease in trade and other payables 368 395
increase in provisions 92 95
cash flows from operating activities 3556 2647
material noncash transactions
during the year the group issued 1092240 ordinary shares of 1p each with a market value of £303100 in final 
settlement of the consideration for the acquisition of tamesis limited a subsidiary purchased in 2005 these 
transactions do not have an effect on the cash flows of the group
consolidated cash flow statement
for the year ended 31 december 2008 
reconciliation of net profit to net cash flows  
from operating activities notes to the financial statements
42 patsystems plc i annual report  accounts 2008
1 accounting policies
the principal accounting policies applied in the preparation of these consolidated financial statements are set 
out below these policies have been consistently applied to all the years presented unless otherwise stated
restatements
the 2007 comparatives have been restated as the group has now taken advantage of merger relief  
as a result the premium on the shares of £3222000 issued in respect of the acquisition of tamesis in  
2007 have now been included in the other reserve rather than the share premium account as previously 
disclosed this has resulted in the restatement as detailed below
share premium £’000
at 31 december 2007 – as previously reported 7014
adjustment 3222
at 31 december 2007 – as restated 3792
other reserve £’000
at 31 december 2007 – as previously reported 17348
adjustment 3222
at 31 december 2007 – as restated 20570
in addition £71000 relating to the cashbased longterm incentive scheme has been reclassified from ‘trade and 
other payables’ to ‘provisions’ in the 2007 comparatives to more accurately reflect the nature of this balance
11 accounting convention and basis of preparation
these financial statements have been prepared in accordance with international financial reporting 
standards ifrs and ifric interpretations endorsed by the european union eu and with those parts of the 
companies act 19852006 applicable to companies reporting under ifrs 
the results and net assets of subsidiary undertakings acquired are included in the consolidated income 
statement and consolidated balance sheet using the acquisition method of accounting from the effective 
date of acquisition
these consolidated financial statements have been prepared under the historical cost convention with 
the exception of financial instruments which are stated in accordance with ias 39 financial instruments 
recognition and measurement
the preparation of financial statements in conformity with ifrs requires the use of certain critical accounting 
estimates it also requires management to exercise its judgement in the process of applying the group’s 
accounting policies the areas involving a high degree of judgement or complexity or areas where 
assumptions and estimates are significant to the consolidated financial statements are disclosed in note 2
standards amendments and interpretations effective in 2008
ifric 11 ‘ifrs 2 – group and treasury share transactions’ provides guidance on whether sharebased  
transactions involving treasury shares or involving group entities for example options over a parent’s 
shares should be accounted for as equitysettled or cashsettled sharebased payment transactions in the 
standalone accounts of the parent and group companies this interpretation does not have an impact 
on the group’s financial statements the company’s accounting policy for sharebased compensation 
arrangements is already in compliance with the interpretation  highlights the company the year in review governance financial statements
43 patsystems plc i annual report  accounts 2008
11 accounting convention and basis of preparation continued standards amendments and interpretations effective in 2008 but not relevant for the  
group’s operations
the following standards amendments and interpretations to published standards are mandatory for 
accounting periods beginning on or after 1 january 2008 but they are not relevant to the group’s operations
ifric 12 ‘service concession arrangements’  
ifric 13 ‘customer loyalty programmes and 
ifric 14 ‘ias 19 – the limit on a defined benefit asset minimum funding requirements and  
their interaction’
standards amendments and interpretations to existing standards that are not yet effective and have 
not been adopted early by the group
the following standards amendments and interpretations to existing standards have been published and are 
mandatory for the group’s accounting periods beginning on or after 1 january 2009 or later periods but the 
group has not early adopted them
ifrs 8 ‘operating segments’ is effective for accounting periods commencing on or after 1 january 2009  
and introduces new requirements for determining quantifying and disclosing information relating to the 
business segments in which group companies operate a segmental analysis of the group’s operations 
is given in note 4 to these financial statements in accordance with the requirements of ias 14 ifrs 8 
will replace ias 14 the group will apply ifrs 8 from 1 january 2009 the expected impact is still being 
assessed in detail by management but it appears likely that the number of reportable segments as well 
as the manner in which the segments are reported will change to be consistent with the group’s internal 
management reporting 
 ias 1 revised ‘presentation of financial statements’ effective from 1 january 2009 the standard  
is still subject to endorsement by the eu the group and company will apply ias 1 revised from 
1 january 2009 subject to endorsement by the eu it is likely that both the income statement and 
statement of comprehensive income will be presented as performance statements
 ifrs 3 revised ‘business combinations’ effective from 1 july 2009 the group will apply ifrs 3 revised  
prospectively to all business combinations from 1 january 2010 subject to endorsement by the eu
 ifrs 5 amendment ‘noncurrent assets heldforsale and discontinued operations’ and consequential  
amendment to ifrs 1 ‘firsttime adoption’ effective from 1 july 2009 the group will apply the ifrs 5 
amendment prospectively to all partial disposals of subsidiaries from 1 january 2010 subject  
to endorsement by the eu
 ias 36 amendment ‘impairment of assets’ effective from 1 january 2009 the group and company will  
apply the ias 36 amendment and provide the required disclosure where applicable for impairment tests 
from 1 january 2009 subject to endorsement by the eu
 ias 38 amendment ‘intangible assets’ effective from 1 january 2009 the group will apply the ias 38  
amendment from 1 january 2009 subject to endorsement by the eu
the following amendments are not expected to have a material impact on the group’s financial statements
 ifrs 2 amendment ‘sharebased payment’  
 ifrs 1 amendment ‘first time adoption of ifrs’ and ias 27 ‘consolidated and separate   
financial statements’ 
 ias 19 amendment ‘employee benefits’ effective from 1 january 2009 the amendment is part of the  
iasb’s annual improvements project published in may 2008 
 ias 39 amendment ‘financial instruments recognition and measurement’ effective from 1 january 2009   notes to the financial statements
44 patsystems plc i annual report  accounts 2008
1 accounting policies continued 11 accounting convention and basis of preparation continued ias 1 amendment ‘presentation of financial statements’ effective from 1 january 2009 the  
amendment is part of the iasb’s annual improvements project published in may 2008 
ifric 16 ‘hedges of a net investment in a foreign operation’ effective from 1 october 2008  
 there are a number of further minor amendments to ifrs 7 ‘financial instruments disclosures’ ias 8  
‘accounting policies changes in accounting estimates and errors’ ias 10 ‘events after the reporting 
period’ ias 18 ‘revenue’ and ias 34 ‘interim financial reporting’ which are part of the iasb’s annual 
improvements project published in may 2008 not addressed above the amendments are unlikely to 
have an impact on the group’s accounts and have therefore not been analysed in detail
interpretations to existing standards that are not yet effective and not relevant for the  
group’s operations 
the following interpretations and amendments to existing standards have been published and are 
mandatory for the group’s accounting periods beginning on or after 1 january 2009 or later periods but are 
not relevant for the group’s operation
ias 23 amendment ‘borrowing costs’ effective from 1 january 2009  
ias 27 revised ‘consolidated and separate financial statements’ effective from 1 july 2009 
 ias 28 amendment ‘investments in associates’ and consequential amendments to ias 32 ‘financial  
instruments presentation’ and ifrs 7 ‘financial instruments disclosures’ effective from 1 january 2009 
 ias 32 amendment ‘financial instruments presentation’ and ias 1 amendment ‘presentation of  
financial statements’ – ‘puttable financial instruments and obligations arising on liquidation’ effective 
from 1 january 2009 
 ifric 13 ‘customer loyalty programmes’ effective from1 july 2008  
 ias 16 amendment ‘property plant and equipment’ and consequential amendment to ias 7  
‘statement of cash flows’ effective from 1 january 2009 
 ias 28 amendment ‘investments in associates’ and consequential amendments to ias 32 ‘financial  
instruments presentation’ and ifrs 7 ‘financial instruments disclosures’ effective from 1 january 2009 
 ias 29 amendment ‘financial reporting in hyperinflationary economies’ effective from 1 january 2009  
 ias 31 amendment ‘interests in joint ventures’ and consequential amendments to ias 32 and ifrs 7  
effective from 1 january 2009 
 ias 38 amendment ‘intangible assets’ effective from 1 january 2009  
 ias 40 amendment ‘investment property’ and consequential amendments to ias 16 effective from  
1 january 2009
 ias 41 amendment ‘agriculture’ effective from 1 january 2009  
 ias 20 amendment ‘accounting for government grants and disclosure of government assistance’  
effective from 1 january 2009 
 ifric 15 ‘agreements for construction of real estates’ effective from 1 january 2009 
 minor amendments to ias 20 ‘accounting for government grants and disclosure of government  
assistance’ and ias 29 ‘financial reporting in hyperinflationary economies’ ias 40 ‘investment property’ 
and ias 41 ‘agriculture’
continued highlights the company the year in review governance financial statements
45 patsystems plc i annual report  accounts 2008
12 foreign currency translation
functional and presentation currency
items included in the financial statements of each of the group entities are measured using the currency of 
the primary economic environment in which the entity operates the ‘functional currency’ the consolidated 
financial statements are presented in pounds sterling which is the parent company’s functional and 
presentation currency
transactions and balances
foreign currency transactions are translated into the functional currency using the exchange rates prevailing 
at the dates of the transactions foreign exchange gains and losses resulting from the settlement of 
such transactions and from the translation at yearend exchange rates of monetary assets and liabilities 
denominated in foreign currencies are recognised in the income statement
group companies
the results and financial position of all group entities none of which has the currency of a hyper
inflationary economy that have a functional currency different from the presentation currency are 
translated into the presentation currency as follows
assets and liabilities for each balance sheet presented are translated at the closing rate at the date   
of that balance sheet
income and expenses for each income statement are translated at average exchange rates and 
all resulting exchange differences are recognised in reserves 
13 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 goodwill is tested annually 
for impairment and carried at cost less accumulated impairment losses the carrying value of capitalised 
goodwill is also reviewed if events or changes in circumstances indicate a potential impairment any 
impairment is charged to the income statement 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
14 intangible assets 
computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the 
specific software the software acquired in the tamesis acquisition was capitalised at fair value these costs 
are amortised over their estimated useful lives three years costs associated with maintaining computer 
software programmes are recognised as an expense as incurred
15 impairment of assets
assets that have an indefinite useful life are not subject to amortisation and are tested annually for 
impairment and whenever events or changes in circumstance indicate that the carrying value may not be 
recoverable assets that are subject to amortisation are tested for impairment whenever events or changes 
in circumstance indicate that the carrying value may not be recoverable an impairment loss is recognised for 
the amount by which the assets carrying value exceeds its recoverable amount the recoverable amount is the 
higher of an asset’s fair value less costs to sell and value in use for the purposes of assessing impairment assets 
are grouped at the lowest levels for which there are separately identifiable cash flows cash generating units
16 research and development
research expenditure is recognised as an expense as incurred costs directly attributable to development are 
capitalised as intangible assets when it is probable that the development will provide economic benefits 
considering its commercial and technical feasibility resources are available for the development and costs can 
be measured reliably other development expenditures are recognised as costs when incurred capitalised 
product development is amortised from completion of development over periods of between 3 and 5 years notes to the financial statements
46 patsystems plc i annual report  accounts 2008
17 property plant and equipment
property plant and equipment is shown at cost less subsequent depreciation cost includes expenditure that 
is directly attributable to the acquisition of the items
depreciation on assets is calculated using the straightline method to reduce the cost of each asset to its 
estimated residual value over its estimated useful life as follows
leasehold improvements – over the period of the lease 
plant and equipment – over 3 years 
office furniture fixtures and fittings – over 4 years 
18 current and deferred income taxes
the current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted 
at the balance sheet date in the countries in which the company and its subsidiaries operate and generate 
taxable income management periodically evaluates positions taken in tax returns with respect to 
situations in which applicable tax regulations are subject to interpretation and establishes provisions where 
appropriate on the basis of amounts expected to be paid to the tax authorities
deferred income tax is provided in full using the liability method on temporary differences arising between 
the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements the 
deferred income tax is not accounted for on the initial recognition of an asset or liability in a transaction 
other than a business combination that at the time of the transaction affects neither accounting nor taxable 
profit or loss deferred income tax is determined using tax rates and laws that have been enacted or 
substantially enacted by the balance sheet date and are expected to apply when the related deferred income 
tax asset is realised or the deferred income tax liability is settled
deferred income tax assets are recognised to the extent that it is probable that future taxable profits will be 
available against which the temporary differences can be utilised
deferred income tax is provided on temporary differences arising on investments in subsidiaries except 
where the timing of the reversal of the temporary difference is controlled by the group and it is probable 
that the temporary difference will not reverse in the foreseeable future
deferred income tax balances are not discounted
19 inventories
inventories are stated at the lower of cost and net realisable value 
110 financial assets
the group classifies its financial assets between “assets at fair value through profit or loss” and “loans 
and receivables” the classification depends on the purpose for which the financial assets were acquired 
management determines the classification of its financial assets at initial recognition 
financial assets at fair value through profit or loss are financial assets held for trading a financial asset 
is classified in this category if acquired principally for the purpose of selling in the short term derivatives 
are also categorised as held for trading unless they are designated as hedges assets in this category are 
classified as current assets
purchases and sales of financial assets are recognised on the tradedate – the date on which the group 
commits to purchase or sell the asset financial assets are initially recognised at fair value and transaction 
costs are expensed in the income statement financial assets are derecognised when the rights to receive 
cash flows from the investments have expired or have been transferred and the group has transferred 
substantially all risks and rewards of ownership 
gains or losses arising from changes in the fair value of the financial assets are presented in the income 
statement in the period in which they arise 
the group assesses at each balance sheet date whether there is objective evidence that a financial asset or a 
group of financial assets is impaired impairment testing of trade receivables is described in note 112
continued highlights the company the year in review governance financial statements
47 patsystems plc i annual report  accounts 2008
111 accounting for derivative financial instruments and hedging activities
the group enters into forward currency contracts and options in order to hedge against the cash flow  
risk of foreign currency exchange rate movements derivatives are initially recognised at fair value on  
the date the contract is entered into and subsequently remeasured in future periods at their fair value  
the movement in fair values is taken to the income statement
the fair value of forward contracts is determined using forward exchange market rates at the balance sheet date
112 trade receivables
trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the 
effective interest method less provision for impairment a provision for impairment of trade receivables is 
established when there is objective evidence that the group will not be able to collect all amounts due under 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 may be impaired the 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 the carrying amount of the asset is reduced through the use of an allowance account and the 
amount of the loss is recognised in the income statement within “operating expenses” 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 against “operating expenses” in the income statement 
113 cash and cash equivalents
cash and cash equivalents includes cash in hand cash in transit deposits held at call with banks other short 
term highly liquid investments with original maturities of three months or less and bank overdrafts
cash in transit represents the net amount of monies due to group companies that have been paid to 
independent clearing agents and are pending release by overseas withholding tax authorities
114 trade payables
trade payables are recognised initially at fair value and subsequently measured at amortised cost using the 
effective interest method
115 leases
costs in respect of operating leases are charged to the income statement on a straight line basis over 
the lease term 
116 provisions
provisions are measured at the present value of the expenditures expected to be required to settle the 
obligation using a pretax rate that reflects current market assessments of the time value of money and the 
risks specific to the obligation 
117 segment reporting
a business segment is a group of assets and operations engaged in providing products or services that 
are subject to risks and returns that are different from those of other business segments a geographical 
segment is engaged in providing products or services within a particular economic environment that are 
subject to risks and returns that are different from those of other economic environments
all direct costs of a segment are included in that segment’s result  notes to the financial statements
48 patsystems plc i annual report  accounts 2008
118 revenue recognition
revenue comprises the fair value of the sale of goods and services net of value added tax
revenue is recognised as follows
nonrefundable installation income consultancy and software development projects revenue is taken   
to the income statement in line with the performance of the work 
monthly end user or lot charges monthly maintenance and income on any rentals – these are credited   
to the income statement in the period in which the service is provided
income from perpetual licences – this is recognised in the income statement when the company has  
fulfilled all of its obligations in accordance with the terms for acceptance set out in the customer 
contracts and the company has reasonable assurance over the collectability of the debt
119 employee benefits
pension obligations
the group operates a defined contribution scheme which is open to uk and us employees
the group pays contributions to publicly or privately administered pension insurance schemes on a mandatory 
contractual or voluntary basis the group has no further payment obligations once the contributions have 
been paid the contributions are recognised as employee benefit expense when they are due
termination benefits
termination benefits are payable when employment is terminated before the normal retirement date  
or when an employee accepts voluntary redundancy in exchange for these benefits the 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 of withdrawal or providing termination 
benefits as a result of an offer made to encourage voluntary redundancy
sharebased benefits
the group operates two share options schemes the enterprise management incentive scheme and the 2003 
share option scheme inland revenue unapproved 
the fair value of options is recognised as an employee benefit expense with a corresponding increase in 
reserves over the vesting period the proceeds received net of any directly attributable transaction costs are 
credited to share capital nominal value and share premium when the options are exercised a detailed 
explanation of how the fair values have been derived can be seen in note 23
cashbased longterm incentive benefits
the group has introduced a cashbased longterm incentive scheme “the cash scheme” in 2007 and 
awards were granted to the executive directors and to certain senior and key employees these awards 
are conditional upon the rate of growth in fully diluted predeferred tax eps over the period from 
31 december 2006 to 31 december 2009 the cost of these awards has been estimated based on projected  
eps growth and is recognised as an employee benefit expense on a straight line basis over the period from 
grant to 31 december 2009
other benefits
uk employees are also entitled to private medical death in service insurance critical illness and  
longterm sickness insurance and subsidised health club membership the costs of providing these  
benefits are recognised as employee benefit expense as they fall due
this year the group has introduced a flexible benefits scheme that enables employees to tailor their total 
remuneration packages to meet their own individual lifestyle and family requirements 
120 dividend distributions 
final dividend distributions to the company’s shareholders are recognised as liabilities in the group’s 
financial statements in the period in which the dividends are approved by the company’s shareholders 
interim dividend distributions to the company’s shareholders are recognised as liabilities in the group’s 
financial statements when paid
continued highlights the company the year in review governance financial statements
49 patsystems plc i annual report  accounts 2008
2 critical accounting estimates and judgements
estimates and judgements are continually evaluated and are based on historical experience and other 
factors including expectations of future events that are believed to be reasonable under the circumstances
the group makes estimates and assumptions regarding the future the resulting accounting estimates will 
by definition seldom equal the related actual results the estimates and assumptions that have a significant 
risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next 
financial year are the assumptions used for recognising the deferred tax asset detailed in note 15
the group has also applied judgement in assessing the following areas
irfs 2 share based payment charge and the provision for the cashbased longterm incentive scheme  
where judgement has been applied as to the number of awards expected to vest
capitalisation of research and development costs 
impairment reviews for intangible assets 
3 financial risk management
the group’s activities expose it to a variety of financial risks and it has developed and operates an overall 
risk management programme that recognises the unpredictability of financial markets and seeks to minimise 
potential adverse effects on the group’s financial performance 
financial risk management is under the control of the finance director and is carried out centrally for the 
group in compliance with policies approved and monitored by the full board the board regularly reviews 
the effectiveness of these policies examining specific areas including foreign exchange risk interest rate risk 
credit risk and the extent to which financial instruments are being used to hedge certain risk exposures 
31 market risk 
the principal market risk to which the the group is exposed is foreign currency risk on sales purchases and 
cash balances that are denominated in a currency other than sterling the principal currency giving rise 
to this risk is the us dollar patsystems’ policy is to carry forward cover for 75 of us£ net anticipated 
exposure for 12 months forward forward cover is achieved through a mixture of forward contracts and 
options this policy has remained unchanged throughout both 2008 and 2007 although the level of cover 
and the exposure to risks on other foreign currencies are kept under regular review
the average usuk£ exchange rate used in the 2008 income statement was 184 2007 201 the average 
rate of the hedges in place at 31 december 2008 for 2009 was 177 2007 for 2008 199 the fair value of 
these hedges is recognised as a financial liability of £853000 2007 asset £30000 on the group balance 
sheet at the year end
the group has certain investments in foreign operations whose net assets are exposed to foreign currency 
translation risk this exposure is minimised by a group policy requiring individual subsidiaries to remit any surplus 
funds to the parent company to facilitate central management as set out above and to enable each individual 
subsidiary to match remaining assets and liabilities denominated in their specific functional currencies
during the year ended 31 december 2008 the usuk£ exchange rate fluctuated between 145 and 199 
2007 between 196 and 207 at 31 december 2008 if the us had weakenedstrengthened by 20 against 
the uk£ with all other variables held constant post tax profit for the year would have been £647000 
2007 £571000 lowerhigher mainly as a result of foreign exchange gainslosses on translation of us 
denominated trade receivables
the group is also exposed to interest rate risks on the fair values of the hedging instruments that it holds 
and on the cash flows arising from any interest bearing cash deposits these assets are regularly realised to 
settle trade and other payables as part of the group’s management of its liquidity risks the group has no 
material borrowings and accordingly exposures to interest rate risks are not regarded as significant notes to the financial statements
50 patsystems plc i annual report  accounts 2008
32  credit risk 
credit risk arises from cash and cash equivalents and from credit exposures to the group’s customers 
including outstanding receivables and committed transactions credit risk is managed centrally with regular 
reports of exposures reviewed by the board the group does not set individual credit limits but will seek 
to ensure that counterparties enter into legally enforceable contracts that include settlement terms that 
demonstrate the counterparties’ commitment to the transaction and minimise this risk exposure 
the board does not assess the credit quality of financial assets by reference to external credit ratings but will 
regularly examine the ageing of financial assets and individual counterparty historic default rates an aged 
analysis of trade receivables at 31 december 2008 is set out in note 17 
33  liquidity risk 
the group has no borrowings or committed credit lines and its liquidity management policy is carried out 
at a local level and involves projecting cash flows in major currencies and considering the levels of liquid 
assets necessary to meet these requirements are overseen by the board with group levels of cash and cash 
equivalents reviewed on a monthly basis a maturity analysis of trade and other payables is shown in note 19
34  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 provide returns for shareholders and benefits for other stakeholders consistent with others 
in the industry and of its size the group believes that an optimum capital structure is currently achieved entirely 
through equity and with no net debt total equity at 31 december 2008 was £20054000 2007 £18694000
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 raise future funds through debt
continued highlights the company the year in review governance financial statements
51 patsystems plc i annual report  accounts 2008
4 segmental analysis
the group operates in one business segment that of the supply of software to financial institutions the 
operations are monitored by the geographical regions of europe north america and asia pacific
2008
europe
£’000
north america
£’000
asia pacific
£’000
total
£’000
revenue by origin 6873 7591 5163 19627
revenue by destination 6932 7301 5394 19627
depreciation and amortisation 1349 27 47 1423
operating profit 806 851 282 1939
finance income 97 18 12 127
profit before tax 903 869 294 2066
capital expenditure on property plant 
and equipment 87 17 22 126
capital expenditure on intangible assets 863 1 – 864
total assets 19488 4202 2411 26101
total liabilities 3666 1727 654 6047
2007
europe
£’000
north america
£’000
asia pacific
£’000
total
£’000
revenue by origin 7524 6219 3219 16962
revenue by destination 6822 6219 3921 16962
depreciation and amortisation 1011 33 49 1093
operating profit 1980 16 91 2087
finance income – net 25 69 7 101
profit before tax 2006 84 98 2188
capital expenditure on property plant 
and equipment 361 12 50 423
capital expenditure on intangible assets 1801 5 – 1806
total assets 16942 3460 1944 22346
total liabilities 2601 840 211 3652 notes to the financial statements
52 patsystems plc i annual report  accounts 2008
5 operating profit  
operating profit is stated after chargingcrediting
2008
£’000
2007
£’000
staff costs 11518 10004
share compensation expense 329 210
total staff costs 11847 10214
less wages and salaries capitalised in accordance with ias 38 587 936
 11260 9278
depreciation – owned tangible assets 409 401
 – under finance lease – 24
 – total tangible assets 409 425
amortisation – capitalised development costs 623 185
 – other intangible assets 391 483
 – total intangible assets 1014 668
operating lease costs – plant and machinery 39 24
 – other 438 357
 – total operating lease costs 477 381
foreign exchange  
lossgain
 – movement in fair value of hedging  
    instruments 883 97
 – other exchange gains and losses 678 87
 – total foreign exchange loss 205 10
 services provided by the group’s auditor and network firms  
2008
£’000
2007
£’000
fees payable to the group’s auditor for the audit of the group’s annual 
accounts
33   30 
fees payable to the group’s auditor and its associates for other services
– the audit of the group’s subsidiaries pursuant to legislation   55    50 
– tax services    60    46 
– human resource services   6 – 
all other services   8    7 
  162   133 
continued highlights the company the year in review governance financial statements
53 patsystems plc i annual report  accounts 2008
6 staff costs
2008
£’000
2007
£’000
staff costs including directors’ emoluments during the year amounted to
wages and salaries 9898 8734
share compensation expense 329 210
social security costs 928 914
pension costs 692 356
11847 10214
included in the above wages and salaries is £587000 2007 £936000 in relation to development costs that 
were capitalised in accordance with ias 38
the average monthly number of persons including directors employed by the group during the year in full 
time equivalents was
2008
number
2007
number
sales account management and marketing 21 19
customer operations testing and technical 70 64
development and product development 44 39
finance administration and board 18 19
153 141
details of the emoluments of the directors are contained in the report of the board on directors’ 
remuneration and group remuneration policy on page 34 under the heading “directors’ emoluments”
details of key management remuneration are shown in note 28
7 finance income 
2008
£’000
2007
£’000
bank interest receivable 95 101
interest receivable on the fair value of longterm receivables 32 –
127 101 notes to the financial statements
54 patsystems plc i annual report  accounts 2008
8 tax on profit on ordinary activities  
2008
£’000
2007
£’000
united kingdom 
withholding tax 12 76
foreign tax
corporation tax – current year 46 40
corporation tax – in relation to prior year 94 –
total current tax 152 36
deferred tax
movement in deferred tax note 15 1298 308
taxation charge 1450 344
the tax for the year is different from that which would result from applying the standard rate of 
corporation tax in the uk 285 2007 30 the differences are explained below
2008
£’000
2007
£’000
profit on ordinary activities before tax 2066 2188
profit on ordinary activities multiplied by standard  
rate of corporation tax in the uk of 285 2007 30 589 656
effects of 
expenses not deductible for tax purposes 15 14
amortisation of intangibles not deductible 50 90
effect of differing tax rates on overseas earnings 111 168
withholding tax 12 76
relief claimed on withholding tax – 23
adjustments in respect of prior years – corporation tax 94 40
adjustments in respect of prior years – deferred tax 752 –
recognition of deferred tax assets 233 1048
tax losses for which no deferred tax asset has been recognised 64 48
remeasurement of deferred tax on change of uk rate 4 403
taxation charge 1450 344
from 1 april 2008 the uk corporation tax rate changed from 30 to 28 
factors that may affect future tax charges
the group has unrelieved tax losses of £21230000 2007 £24492000 that are available for offset  
against future taxable profits in their respective territories a deferred tax asset amounting to £165000 
2007 £288000 has not been recognised in respect of these losses as their future recovery is uncertain
continued highlights the company the year in review governance financial statements
55 patsystems plc i annual report  accounts 2008
9 parent company accounts 
the parent company accounts are set out in pages 75 to 83
10 earnings per ordinary share
in accordance with ias 33 the calculation of earnings per ordinary share is based upon
a basic 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 in issue during the year
2008 2007
profit for the year attributable to equity holders of the company £616000 £1844000
weighted average number of shares 178982340 168090000
basic earnings per share 03p 11p
b diluted earnings per share  
diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares 
outstanding to assume conversions of all dilutive potential ordinary shares 
the group has one category of dilutive potential ordinary shares share options
for share options a calculation is performed to determine the number of shares that could have been 
acquired at fair value determined as the average annual market price of the group’s shares based  
on the monetary value of the subscription rights attached to the outstanding options 
the number of shares calculated above is compared with the number of shares that would have been issued 
assuming the exercise of the share options
2008 2007
profit for the year attributable to equity holders of the company £616000 £1844000
weighted average number of shares 178982340 168090000
effect of dilutive share options 4462772 6529743
effect of contingent share consideration – 1092000
183445112 175711743
diluted earnings per share 03p 10p notes to the financial statements
56 patsystems plc i annual report  accounts 2008
11 principal subsidiaries  
the principal investments in subsidiary undertakings held by the parent company are as follows
a 100 investment in respect of voting rights and nominal value in patsystems holdings limited  1 
a company incorporated in england and wales
the historical cost of the investment in the shares of patsystems holdings limited is £11180000 under 
the scheme of arrangement the subsidiary undertaking returned capital to the company amounting  
to £9865000 and the cost of the investment has been reduced accordingly to reflect this
the following subsidiary undertakings are wholly owned by patsystems holdings limited in respect 
of voting rights and nominal value of issued shares and perform the sale and support of electronic 
trading systems
patsystems uk ltd  – incorporated in england and wales
patsystems na llc – incorporated in united states of america
patsystems pte ltd  – incorporated in singapore
patsystems pty ltd  – incorporated in australia
patsystems gmbh  – incorporated in germany
the following subsidiary is wholly owned by patsystems holdings limited in respect of voting rights and 
nominal value of issued shares and acts as a holding company
professional automated trading systems bv incorporated in the netherlands
professional automated trading systems bv owns 100 of voting rights and nominal value of issued 
shares in patsystems japan kk incorporated in japan which performs the sale and support of electronic 
trading systems 
patsystems japan kk owns 100 of voting rights and nominal value of issued shares in patsystems 
ireland ltd incorporated in the republic of ireland which acts as a holding company    
a 100 investment in tamesis limited a company incorporated in england and wales that develops 2 
distributes and supports software enabling real time trade capture valuation and risk management for 
the structured finance market 
all subsidiaries are included in the consolidation
continued highlights the company the year in review governance financial statements
57 patsystems plc i annual report  accounts 2008
12 goodwill
2008
£’000
2007
£’000
cost and net book value
at 1 january 2008 3237 1745
additions 14 1492
at 31 december 2008 3251 3237
the increase in goodwill in the year is in relation to the 2005 acquisition of tamesis and represents the 
difference between the estimated contingent consideration at 31 december 2007 and the final settlement 
made in the year
the goodwill is all held in europe
impairment review
the recoverable amount for the cash generating unit has been measured based on a value in use calculation 
the calculations use pretax profits based on budgets approved by management for the year 2009 cash 
flows beyond this are based on a growth rate of 225 a pretax discount rate of 10 has been applied to 
the calculations
as the value in use is greater than the carrying value there is no impairment in the period and the carrying 
value of goodwill represents the excess of the cost of 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 the financial statements
58 patsystems plc i annual report  accounts 2008
13 intangible assets
2008
software 
licences
£’000 
acquired 
software
£’000
capitalised
 development
£’000
total
£’000
cost
at 1 january 2008 1273 898 3483 5654
additions 53 – 811 864
disposals 674 – – 674
foreign exchange 26 – – 26
at 31 december 2008 678 898 4294 5870
amortisation 
at 1 january 2008 843 723 414 1980
charge for the year 216 175 623 1014
disposals 674 – – 674
foreign exchange 23 – – 23
at 31 december 2008 408 898 1037 2343
net book value 
at 31 december 2008 270 – 3257 3527
at 31 december 2007 430 175 3069 3674
2007
software 
licences
£’000 
acquired 
software
£’000
capitalised
 development
£’000
total
£’000
cost
at 1 january 2007 1123 898 2127 4148
additions 450 – 1356 1806
disposals 300 – – 300
at 31 december 2007 1273 898 3483 5654
amortisation
at 1 january 2007 959 424 229 1612
charge for the year 184 299 185 668
disposals 300 – – 300
at 31 december 2007 843 723 414 1980
net book value
at 31 december 2007 430 175 3069 3674
at 31 december 2006 164 474 1898 2536
continued highlights the company the year in review governance financial statements
59 patsystems plc i annual report  accounts 2008
14 property plant and equipment
2008
leasehold
 improvements
£’000
plant and
 equipment
£’000
office furniture
 fixtures and 
fittings
£’000
total
£’000
cost
at 1 january 2008 539 3135 495 4169
additions – 109 17 126
disposals – 2222 459 2681
foreign exchange 25 279 58 362
at 31 december 2008 564 1301 111 1976
depreciation
at 1 january 2008 332 2644 441 3417
charge for the year 101 285 23 409
disposals – 2222 459 2681
foreign exchange 18 249 48 315
at 31 december 2008 451 956 53 1460
net book value
at 31 december 2008 113 345 58 516
at 31 december 2007 207 491 54 752
2007
leasehold
 improvements
£’000
plant and
 equipment
£’000
office furniture
 fixtures and 
fittings
£’000
total
£’000
cost
at 1 january 2007 540 2766 452 3758
additions – 378 45 423
disposals – 14 – 14
foreign exchange 1 5 2 2
31 december 2007 539 3135 495 4169
depreciation
at 1 january 2007 233 2351 420 3004
charge for the year 100 302 23 425
disposals – 14 – 14
foreign exchange 1 5 2 2
at 31 december 2007 332 2644 441 3417
net book value
at 31 december 2007 207 491 54 752
at 31 december 2006 307 415 32 754 notes to the financial statements
60 patsystems plc i annual report  accounts 2008
15 deferred tax assets
2008
trading 
losses
£’000
capital 
allowances
£’000
share 
options
£’000
other timing
differences
£’000
total
£’000
at 1 january 2008 6665 169 123 54 6673
additional deferred tax assets in 
respect of group companies that 
have become profitable 233 – – – 233
utilisation of losses against current 
year profits 942 – – – 942
adjustments in respect of prior years 752 – – – 752
chargescredits arising in the year – 2 82 247 163
chargedcredited to income 
statement 1461 2 82 247 1298
foreign exchange 502 – – – 502
at 31 december 2008 5706 171 41 301 5877
2007
trading 
losses
£’000
capital 
allowances
£’000
share 
options
£’000
other timing
differences
£’000
total
£’000
at 1 january 2007 6747 200 32 – 6979
additional deferred tax assets in 
respect of group companies that 
have become profitable 984 – – – 984
adjustments in respect of prior years – 42 22 – 64
utilisation of losses against current 
year profits 657 – – – 657
chargescredits arising in the year – 424 78 50 296
remeasurement on change  
of uk rate 411 13 9 4 403
chargedcredited to income 
statement 84 369 91 54 308
foreign exchange 2 – – – 2
at 31 december 2007 6665 169 123 54 6673
deferred tax assets in respect of group companies’ unrelieved trading losses are recognised when the 
specific company’s business has become profitable and to the extent that it is probable there will be future 
trading profits to utilise such losses 
16 inventories
2008
£’000
2007
£’000
goods for resale 3 12
continued highlights the company the year in review governance financial statements
61 patsystems plc i annual report  accounts 2008
17 trade and other receivables  
2008
£’000
2007
£’000
trade receivables 4538 2798
less provision for impairment of receivables 134 83
trade receivables – net 4404 2715
other receivables 351 327
prepayments and accrued income 2240 1695
6995 4737
less noncurrent portion – accrued income 519 371
current receivables 6476 4366
noncurrent receivables are due as follows
within between one and two years 193 71
within between two and five years 239 190
after more than five but less than ten years 87 110
noncurrent receivables 519 371
the carrying values less impairment provisions of trade and other receivables approximate their fair values
the effective interest rates on noncurrent receivables were between the range of 3 – 6 2007 6
the ageing of trade receivables is as follows
2008
not past due
£’000
up to 3 months
£’000
3 to 6 months
£’000
over 6 months
£’000
total
£’000
fully performing 3522 – – – 3522
past due but not 
impaired – 659 223 – 882
impaired and 
provided for – – 10 124 134
 3522 659 233 124 4538 
percentage 78 14 5 3 100
2007
not past due
£’000
up to 3 months
£’000
3 to 6 months
£’000
over 6 months
£’000
total
£’000
fully performing 1909 – – – 1909
past due but not 
impaired – 649 89 68 806
impaired and 
provided for – – – 83 83
 1909 649 89 151 2798
percentage 68 23 3 6 100 notes to the financial statements
62 patsystems plc i annual report  accounts 2008
17 trade and other receivables continued trade receivables that are less that three months past due are not considered impaired as of 31 december 2008 
trade receivables of £882000 2007 £806000 were past due but not impaired these relate to a number 
of independent customers for whom there is no indication of financial difficulties or recent history of 
default the group is in contact with these customers and obtained assurances from which it believes  
that the amounts receivable will be collected in full with no additional cost to the group
provisions for the portion of individually impaired trade receivables assessed to be irrecoverable at  
31 december 2008 totaled £134000 2007 £83000 these relate to customers where there are indications 
of financial difficulties or disputes that are unlikely to be resolved without further costs to the group
the carrying amounts of the group’s trade and other receivables are denominated in the following currencies
2008
£’000
2007
£’000
uk pound 2118 2215
us dollar 4116 1967
singapore dollar 300 204
japanese yen 272 144
australian dollar 130 114
other currencies 59 93
total 6995 4737
movements on the group provision for impairment of trade receivables are as follows 
2008
£’000
2007
£’000
at 1 january 83 50
provision for receivables impairment 60 83
receivables written off during the year as uncollectible 19 26
unused amounts reversed – 24
foreign exchange 10 –
at 31 december 134 83
the creation and release of provisions for impaired receivables has been included in “operating expenses”  
in the income statement amounts charged to the allowance account are generally written off when there  
is no expectation of recovering additional cash
the other classes within trade and other receivables do not contain impaired assets
the maximum exposure to credit risk at the reporting date is the fair value of each class of receivable 
mentioned above the group does not hold any collateral as security
continued highlights the company the year in review governance financial statements
63 patsystems plc i annual report  accounts 2008
18 cash and cash equivalents 
2008
£’000
2007
£’000
cash at bank and on hand 4649 1758
shortterm deposits 1280 1433
5929 3191
the credit quality of the group’s financial assets represented by cash and cash equivalents is not assessed by 
reference to external credit ratings but is regularly reviewed by the board monies are held with international 
banking organisations and where appropriate with well established local bankers that are able to provide the 
levels of security accessibility and service to meet local needs
the interest rates on interest bearing shortterm deposits are floating rates all financial assets represented 
by cash and cash equivalents mature within one year
the carrying values of cash and cash equivalents approximate their fair values
the carrying amounts of the group’s cash and cash equivalents are denominated in the following currencies
2008
£’000
2007
£’000
uk pound 3762 307
us dollar 1230 1749
singapore dollar 200 276
japanese yen 248 699
australian dollar 389 131
other currencies 100 29
total 5929 3191 notes to the financial statements
64 patsystems plc i annual report  accounts 2008
19 trade and other payables 
2008
£’000
2007
restated
£’000
current liabilities
trade payables 290 316
other tax and social security 721 350
other creditors 58 –
accruals 1573 1116
deferred income 2281 1387
4923 3169
noncurrent liabilities
deferred income 50 44
4973 3213
 see note 1
none of the payables are secured 
noncurrent liabilities mature within between one and two years all other trade and other payables mature 
within one year
the carrying amounts of the group’s trade and other payables are denominated in the following currencies
2008
£’000
2007
£’000
uk pound 2326 2183
us dollar 2112 863
singapore dollar 247 13
japanese yen 224 100
australian dollar 35 30
other currencies 29 24
total 4973 3213
the carrying amounts of the group’s trade and other payables approximate their fair values
the group’s intercompany receivables and payables which are eliminated on consolidation are recorded in 
the books of the local entities in the following currencies
2008
£’000
receivables
2008
£’000
payables
2007
£’000
receivables
2007
£’000
payables
uk pound 23316 38829 19857 39726
us dollar – 5181 – 993
singapore dollar 502 1967 164 1336
japanese yen 1056 937 725 1253
australian dollar – 683 – 378
other currencies 185 1938 139 1675
25059 49535 20885 45361
the difference between the intercompany receivables and payable of £24476000 relates to provision made 
against intercompany receivables in prior years
continued highlights the company the year in review governance financial statements
65 patsystems plc i annual report  accounts 2008
20 provisions 
at 1 january 
2008 
restated
£’000
utilised 
in year
£’000
movement 
in year
£’000
at 31 december 
2008
£’000
no later than one year
dilapidations provision 58 – 24 82
later than one year and no later than 
five years
cashbased longterm incentive scheme 71 – 68 139
129 – 92 221
 see note 1
the dilapidations provision is in respect of work to be carried out at the end of the lease on property  
it is due to expire in 2009
the cashbased longterm incentive scheme is described in the remuneration report it is due to expire in 2010
21 commitments under operating leases
the group leases various offices and plant and machinery under noncancellable operating lease 
arrangements the leases have varying terms escalation clauses and renewal rights 
the lease expenditure charged to the income statement during the year is disclosed in note 5
the future minimum lease payments under noncancellable operating leases are as follows
land and buildings plant and machinery total
2008 2007 2008 2007 2008 2007
no later than one year 452 390 34 21 486 411
later than one year and 
no later than five years
351 528 87 18 438 546
later than five years – – 15 – 15 –
803 918 136 39   939 957 notes to the financial statements
66 patsystems plc i annual report  accounts 2008
22 called up equity share capital 
authorised
2008
£’000
2007
£’000
ordinary shares of 1p each 
at 1 january and 31 december – 250000000 shares 2500 2500
deferred shares of 1p each
at 1 january and 31 december – 2 shares – –
redeemable preference shares of £1 each 
at 1 january and 31 december – 49998 shares 50 50
allotted called up and fully paid 
ordinary shares of 1p each 
at 1 january – 177496511 shares 1775 1641
allotted as consideration for acquisition  
of tamesis limited – 1092240 shares 11 122
allotted under share option schemes – 948550 shares 9 12
at 31 december – 179537301 shares 1795 1775
the 1p ordinary shares are listed on the aim market they have one voting right per share 
deferred shares of 1p each 
at 1 january and 31 december – 2 shares – –
the deferred 1p shares are not listed they have no voting rights and no access to dividends 
continued highlights the company the year in review governance financial statements
67 patsystems plc i annual report  accounts 2008
23 share option schemes
the following options to purchase 1p ordinary shares in patsystems plc were granted exercised lapsed and 
outstanding during the year
exercise price
in pence
outstanding at 
1 january 
2008
granted 
in year
exercised
in year
lapsed 
in year
outstanding at 
31 december 
2008
exercisable at 
31 december 
2008
effective 
dates
508p 1735500 – 550000 – 1185500 1185500 note a
950p 97500 – – – 97500 97500 note a
1350p 72000 – 14400 57600 – – note b
1375p 727272 – – – 727272 – note e
1425p 581623 – 37705 46765 497153 377836 note b
1450p 1186606 – 248276 441379 496951 377683 note b
1525p 775737 – – – 775737 589560 note b
1558p 1416500 – 50400 19200 1346900 1023644 note b
1750p 90000 – – – 90000 68400 note b
2775p 250000 – – – 250000 – note g
2900p 444827 – – – 444827 – note g
7377565 – 900781 564944 5911840 3720123
100p 582525 – – – 582525 582525 note i
1375p 3272728 – – – 3272728 – note f
1425p 344245 – 26769 62982 254494 193415 note c
1450p 144494 – – 61405 83089 71437 note c
1525p 404263 – – – 404263 389863 note d
1558p 780500 – 21000 89100 670400 509504 note c
1800p 500000 – – – 500000 500000 note d
2775p 1000000 – – – 1000000 – note h
2900p 1655173 – – – 1655173 – note h
8683928 – 47769 213487 8422672 2246745
total all
schemes 16061493 – 948550 778431 14334512 5966868
note a these options were granted under the initial award of the enterprise management incentive emi 
scheme these options are now 100 exercisable
note b options were granted under the second and third awards of the enterprise management incentive 
emi scheme 20 of these options awarded under the second and third grants of both schemes 
vested on 14 february 2007 and 16 vested on 11 february 2008 a further 40 will vest on 
9 february 2009 the remaining 24 of the options will be carried forward into future years and the 
remuneration committee will determine what performance conditions to attach to them in 2009
note c these options were granted under the second and third awards of part b inland revenue unapproved 
of the patsystems plc 2003 share option scheme the vesting status is the same as note b with the 
exception of 34540 unapproved options with an exercise price of 1450p which all vested in 2008
note d these options were granted under the second and third awards of part b inland revenue 
unapproved of the patsystems plc 2003 share option scheme 844263 of these options became 
fully vested in 2008 following approval from the remuneration committee the remaining options 
are subject to the same vesting status as note b notes to the financial statements
68 patsystems plc i annual report  accounts 2008
23 share option schemes continued 
note e these options were granted under a special award of the enterprise management incentive emi 
scheme one third of these options can be exercised after a period of three years after the date of 
the grant two thirds of these options can be exercised after a period of three years after the date 
of the grant but subject to achieving company performance targets
note f these options were granted under a special award of part b inland revenue unapproved of the 
patsystems plc 2003 share option scheme exercise conditions are as per note e
note g these options were granted under a special award of the enterprise management incentive emi 
scheme these options can be exercised after a period of three years after the date of the grant but 
subject to achieving company performance targets
note h these options were granted under a special award of part b inland revenue unapproved of the 
patsystems plc 2003 share option scheme exercise conditions are as per note g
note i these options were granted under a special award of part b inland revenue unapproved of the 
patsystems plc 2003 share option scheme these options became exercisable on 31 december 2008
the weighted average fair value per share at the measurement date of options granted during the year was 
nil p 2007140p
the weighted average share price at the date of grant of options granted during the year was nil p 2007 281p 
for the options that were exercised during the year the weighted average share price at the date of exercise 
was 23p 2007 26p
the weighted average remaining contractual life of options outstanding at the year end is 67 years  
2007 76 years
the total fair value that was charged to the income statement in relation to the share options was £329000 
2007 £210000 all of which related to equity settled sharebased payment transactions
the fair values of the options have been calculated using the binomial model the model takes into account 
the following factors in determining the fair value of an option
a share price and exercise price 
share prices are closing share prices as at the date of grant exercise prices are listed in the above schedule
b expected term of the options
it is assumed that the expected life of the options under consideration is 5 years 
c volatility
volatility of the company’s share price has been calculated as the annualised standard deviation of daily 
continuously compounded returns on the company’s stock derived from the company’s historical share 
prices adjusted for splits over 5 years back from each date of grant
d riskfree interest rate
the riskfree rates of interest are assumed to be the yield to maturity on a uk gilt strip with the term to 
maturity equal to the expected life of the option 
e dividends
the valuations take account of the expected future dividend yield at the date of each grant
continued highlights the company the year in review governance financial statements
69 patsystems plc i annual report  accounts 2008
the table below sets out the volatilities riskfree interest rates and dividend yields applied in each valuation
date of grant volatility
 
riskfree interest rate 

dividend yield 

24 february 2003 778009 46922 000
13 march 2003 783590 47175 000
30 june 2003 784194 46412 000
27 october 2003 798321 57891 000
01 january 2004 786748 54125 000
30 july 2004 736821 58602 000
27 august 2004 717764 56660 000
16 november 2004 589201 52789 000
04 february 2005 566301 51507 000
17 march 2005 524971 54148 000
06 october 2005 549819 47689 200
23 november 2005 498819 48322 200
14 december 2005 500097 48764 200
14 february 2006 501501 47515 200
19 april 2007 484035 52980 100
07 december 2007 300527 45550 100
31 december 2007 309369 56204 100 notes to the financial statements
70 patsystems plc i annual report  accounts 2008
24 share capital and reserves
at 
1 january 2008 
restated
£’000
shares issued 
in the year
£’000
earnings for 
the year
£’000
dividends 
paid
£’000
foreign 
exchange 
movement
£’000
share
compensation 
expense 
£’000
at 
31 december 
2008
£’000
paid up share 
capital 1775 20 – – – – 1795
share premium 3792 77 – – – – 3869
other reserves 20570 292 – – – – 20862
retained 
earnings 7443 – 616 602 628 329 6472
18694 389 616 602 628 329 20054
 see note 1
of the other reserve at 31 december 2008 £20812000 relates to a merger reserve
at 
1 january 2007 
£’000
shares issued 
in the year
£’000
earnings for 
the year
£’000
dividends 
paid
£’000
foreign 
exchange 
movement
£’000
share
compensation 
expense 
£’000
at 
31 december 
2007 
restated
£’000
paid up share 
capital 1641 134 – – – – 1775
share premium 3691 101 – – – – 3792
other reserves 17348 3222 – – – – 20570
retained 
earnings 8948 – 1844 693 144 210 7443
13732 3457 1844 693 144 210 18684
 see note 1
of the other reserve at 31 december 2007 £20520000 relates to a merger reserve
 investments in own shares 
the group has an investment in own shares of 71856 shares 2007 71856 shares as a result of employees 
leaving the all employee share scheme the nominal value of these shares is £719 2007 £719 the market 
value at 31 december 2008 is £11000 2007 £19000 
continued highlights the company the year in review governance financial statements
71 patsystems plc i annual report  accounts 2008
25 statement of changes in shareholders’ equity 
2008
£’0000
2007
£’0000
profit on ordinary activities after taxation 616 1844
dividends paid 602 693
foreign exchange adjustment 628 144
share compensation expense 329 210
shares issued in part settlement of the deferred consideration 
for the 2005 acquisition of tamesis limited 303 3345
proceeds from the issue of ordinary share capital 86 112
1360 4962
shareholders’ funds at 1 january 18694 13732
shareholders’ funds at 31 december 20054 18694
26 dividends 
the dividends paid in the year were as follows
 
2008
£’0000
2007
£’0000
final dividend in respect of the year ended 31 december 2007  
at 021p per share 376 495
interim dividend at 0126p per share 226 198
602 693
a final dividend in respect of the year ended 31 december 2008 of 0237p per share amounting to a total 
dividend of £425000 is to be proposed at the annual general meeting on 28 april 2009 these financial 
statements do not reflect this dividend payable  notes to the financial statements
72 patsystems plc i annual report  accounts 2008
27 financial instruments
271 financial risk management
the group’s financial instruments comprise cash and liquid resources trade and other debtors and creditors 
arising directly from the operations of the group and forward exchange contracts the main risks arising 
from the group’s financial instruments are interest rate risk and foreign currency risk the board reviews and 
agrees policies for managing each of these risks and they are summarised in note 3 above 
272 accounting policies
the group’s accounting policies for financial instruments are detailed in note 1 above and have been applied 
to the line items below
2008
loans and 
receivables
£’000
assets at fair 
 value through the 
profit and loss
£’000
total
£’000
assets as per balance sheet 
trade and other receivables 6995 – 6995
income tax 3 – 3
cash and cash equivalents 5929 – 5929
12927 – 12927
2008
liabilities at fair 
value through the 
profit and loss
£’000
other 
financial 
liabilities
£’000
total
£’000
liabilities as per balance sheet 
trade and other payables 4973 – 4973
derivative financial instruments 853 – 853
provisions 221 – 221
6047 – 6047
2007
loans and 
receivables
£’000
assets at fair  
value through the 
profit and loss
£’000
total
£’000
assets as per balance sheet 
trade and other receivables 4737 – 4737
derivative financial instruments – 30 30
income tax 40 – 40
cash and cash equivalents 3191 – 3191
7968 30 7998
continued highlights the company the year in review governance financial statements
73 patsystems plc i annual report  accounts 2008
272 accounting policies continued 2007
liabilities at fair 
value through the 
profit and loss
£’000
other 
financial 
liabilities
£’000
total
£’000
liabilities as per balance sheet 
trade and other payables 3213 – 3213
current income tax liabilities – 20 20
contingent consideration – 290 290
provisions 129 – 129
3342 310 3652
the group had no borrowings as at 31 december 2008 or 31 december 2007  
273 foreign currency exposure 
the group’s principal exposure to exchange rate fluctuations arises on the translation of overseas net assets 
and profits into sterling for accounting purposes 
analyses of the group’s financial assets and liabilities denominated in foreign currencies are given in notes 
17 18 and 19
the group has a net earnings exposure to the us dollar together with an exposure to the translation of the 
balance sheet of its us subsidiary during the year the board authorised the hedging of us dollar exposures 
at 31 december 2008 the company has the following hedges in place
forward contracts
forward contract value maturity date effective forward rate 
350000 29jan09 19290
500000 26feb09 19268
350000 31mar09 19348
500000 30apr09 19462
1000000 29may09 19060
350000 30jun09 19494
650000 31jul09 19381
600000 28aug09 17693
800000 30sep09 17665
500000 29oct09 15525
500000 27nov09 15522
500000 29dec09 15528
500000 29jan10 14780
at the year end the fair value of the above contracts is a liability of £853000 2007 asset £30000 the 
movement in fair values of £883000 2007 £97000 has been charged to the income statement in the year 74 patsystems plc i annual report  accounts 2008
notes to the financial statements
28 related party transactions
revenue includes £425000 2007 £358000 in respect of banca caboto spa london branch a member  
of a group of companies which include cai suisse a shareholder of the company at 31 december 2008 the 
amount owing to group companies by banca caboto spa london branch was £nil 2007 £68000
revenue also includes £271000 2007 £313000 in respect of marex trading services a company of which 
one of the nonexecutive directors steve sparke is also a director at 31 december 2008 the amount owing 
to group companies by marex trading services was £26000 2007 £54000
 key management remuneration
details of the remuneration of key management are detailed below
2008
£’0000
2007
£’0000
salaries and shortterm employee benefits 1660 1648
sharebased payments 264 174
1924 1822
continued highlights the company the year in review governance financial statements
75 patsystems plc i annual report  accounts 2008
independent auditors’ report to the members of patsystems plc
we have audited the parent company financial statements of patsystems plc for the year ended 31 december 2008 
which comprise the balance sheet and the related notes these parent company financial statements have been 
prepared under the accounting policies set out therein 
we have reported separately on the group financial statements of patsystems plc for the year ended 31 december 2008
respective responsibilities of directors and auditors
the directors’ responsibilities for preparing the annual report and the parent company financial statements in 
accordance with applicable law and united kingdom accounting standards united kingdom generally accepted 
accounting practice are set out in the statement of directors’ responsibilities
our responsibility is to audit the parent company financial statements in accordance with relevant legal and 
regulatory requirements and international standards on auditing uk and ireland this report including the 
opinion has been prepared for and only for the company’s members as a body in accordance with section 235 of 
the companies act 1985 and for no other purpose we do not in giving this opinion accept or assume responsibility 
for any other purpose or to any other person to whom this report is shown or into whose hands it may come save 
where expressly agreed by our prior consent in writing
we report to you our opinion as to whether the parent company financial statements give a true and fair view and 
whether the parent company financial statements have been properly prepared in accordance with the companies 
act 1985 we report to you whether in our opinion the information given in the directors’ report is consistent with 
the parent company financial statements 
in addition we report to you if in our opinion the company has not kept proper accounting records if we have not 
received all the information and explanations we require for our audit or if information specified by law regarding 
directors’ remuneration and other transactions is not disclosed
we read other information contained in the annual report and consider whether it is consistent with the audited 
parent company financial statements the other information comprises only the directors’ report we consider the 
implications for our report if we become aware of any apparent misstatements or material inconsistencies with the 
parent company financial statements our responsibilities do not extend to any other information
basis of audit opinion 
we conducted our audit in accordance with international standards on auditing uk and ireland issued by the 
auditing practices board an audit includes examination on a test basis of evidence relevant to the amounts and 
disclosures in the parent company financial statements it also includes an assessment of the significant estimates and 
judgments made by the directors in the preparation of the parent company financial statements and of whether the 
accounting policies are appropriate to the company’s circumstances consistently applied and adequately disclosed
we planned and performed our audit so as to obtain all the information and explanations which we considered necessary 
in order to provide us with sufficient evidence to give reasonable assurance that the parent company financial statements 
are free from material misstatement whether caused by fraud or other irregularity or error in forming our opinion we  
also evaluated the overall adequacy of the presentation of information in the parent company financial statements
opinion
in our opinion
the parent company financial statements give a true and fair view in accordance with united kingdom  
generally accepted accounting practice of the state of the company’s affairs as at 31 december 2008
the parent company financial statements have been properly prepared in accordance with the companies act 1985 and 
the information given in the directors’ report is consistent with the parent company financial statements 
pricewaterhousecoopers llp
chartered accountants and registered auditors
london
9 february 2009 76 patsystems plc i annual report  accounts 2008
company balance sheet
notes
2008
£’000
2007
restated
£’000
fixed assets
investments 4 1605 1605
current assets
debtors 5 5918 4880
cash at bank and in hand 5 4
  5923 4884
creditors amounts falling due within one year 6 81 62
net current assets 5842 4822
net assets 7447 6427
capital and reserves
share capital 7 1795 1775
share premium account 9 3869 3792
other reserves 9 50 50
retained earnings 9 1733 810
total equity 9 7447 6427
 see note 1
the financial statements on pages 76 to 83 were approved by the board of directors on 9 february 2009
david webber    martin thorneycroft
chief executive officer   finance director
at 31 december 2008  highlights the company the year in review governance financial statements
77 patsystems plc i annual report  accounts 2008
1 accounting policies
the financial statements have been prepared on the historical cost basis of accounting and in accordance 
with applicable accounting standards in the united kingdom 
the principal accounting policies applied in the preparation of these financial statements are set out below 
these policies have been consistently applied to all the years presented unless otherwise stated
restatement
the 2007 comparatives have been restated as the company has now taken advantage of merger relief as a 
result the shares issued in respect of the acquisition of tamesis in 2007 have now been included at nominal 
value rather than incorporating the share premium this has resulted in the restatement of the investment 
contingent consideration and share premium account as detailed below
investments £’000
at 31 december 2007 – as previously reported 5106
adjustment 3501
at 31 december 2007 – as restated 1605
contingent consideration £’000
at 31 december 2007 – as previously reported 290
adjustment 279
at 31 december 2007 – as restated 11
share premium £’000
at 31 december 2007 – as previously reported 7014
adjustment 3222
at 31 december 2007 – as restated 3792
11 investments 
investments in subsidiaries are stated at cost less any provision for impairment where an acquisition 
satisfies the provisions of sections 131 to 134 of the companies act 1985 merger relief is available and the 
investment is stated at nominal value of shares issued plus the value of any other consideration
12 operating leases
costs in respect of operating leases are charged to the profit and loss account on a straight line basis over 
the lease term 
13 current and deferred income taxes
the current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at 
the balance sheet date management periodically evaluates positions taken in tax returns with respect to 
situations in which applicable tax regulations are subject to interpretation and establishes provisions where 
appropriate on the basis of amounts expected to be paid to the tax authorities
deferred taxation is recognised in respect of timing differences that have originated but not reversed at the 
balance sheet date where transactions or events that result in an obligation to pay more tax in the future or 
a right to pay less tax in the future have occurred at the balance sheet date
a net deferred tax asset is regarded as recoverable and therefore recognised only when on the basis of all 
available evidence it can be regarded as more likely than not that there will be sufficient taxable profits to utilise 
carried forward tax losses and against which the reversal of underlying timing differences can be deducted
deferred tax is measured at the average tax rates that are expected to apply in the periods in which 
the timing differences are expected to reverse based on tax rates and laws that have been enacted or 
substantively enacted by the balance sheet date deferred tax is measured on a nondiscounted basis
notes to the financial statements notes to the financial statements
78 patsystems plc i annual report  accounts 2008
1 accounting policies continued
14 related party transactions
financial reporting standard frs 8 “related party transactions” requires the disclosure of the details of 
material transactions between the reporting entity and related parties the company has taken advantage 
of exemptions under frs 8 not to disclose transactions between group companies
15 sharebased payments
the group operates two share options schemes the enterprise management incentive scheme and the 2003 
share option scheme inland revenue unapproved 
the fair value of options is recognised as an employee benefit expense with a corresponding increase in 
reserves over the vesting period the proceeds received net of any directly attributable transaction costs are 
credited to share capital nominal value and share premium when the options are exercised 
16 cash flow statement 
the company is the parent company of the patsystems plc group and is included in the consolidated 
financial statements of patsystems plc consequently the company has taken advantage of the exemption 
from preparing a cash flow statement under the terms of financial reporting standard 1 revised 1996
17 dividend distributions
final dividend distributions to the company’s shareholders are recognised as liabilities in the company’s 
financial statements in the period in which the dividends are approved by the company’s shareholders 
interim dividend distributions to the company’s shareholders are recognised as liabilities in the company’s 
financial statements when paid
2 directors and employees
the parent company does not employ any directors or employees
3 profit and loss account 
the profit for the year dealt with in the accounts of the company was £1196000 2007 £656000
the directors have taken advantage of the exemption available under section 2304 of the companies act 
1985 and have not presented a profit and loss account for the company alone 
4 investments  
investment in subsidiary undertaking £’000
at 1 january 2008 and 31 december 2008 1605
the balance at 1 january 2008 has been restated as detailed in note 1
continued highlights the company the year in review governance financial statements
79 patsystems plc i annual report  accounts 2008
the investment in subsidiary undertakings represents
a 100 investment in respect of voting rights and nominal value in patsystems holdings limited  1 
a company incorporated in england and wales
the historical cost of the investment in the shares of patsystems holdings limited is £11180000 under 
the scheme of arrangement the subsidiary undertaking returned capital to the company amounting to 
£9865000 and the cost of the investment has been reduced accordingly to reflect this
the following subsidiary undertakings were wholly owned by patsystems holdings limited in respect of voting 
rights and nominal value of issued shares and perform the sale and support of electronic trading systems
patsystems uk ltd  –  incorporated in england and wales
patsystems na llc  –  incorporated in united states of america
patsystems pte ltd  –  incorporated in singapore
patsystems pty ltd  –  incorporated in australia
patsystems gmbh  –  incorporated in germany
the following subsidiary is wholly owned by patsystems holdings limited in respect of voting rights and 
nominal value of issued shares and acted as a holding company
professional automated trading systems bv incorporated in the netherlands
professional automated trading systems bv owns 100 of voting rights and nominal value of issued 
shares in patsystems japan kk incorporated in japan which performs the sale and support of electronic 
trading systems 
patsystems japan kk owns 100 of voting rights and nominal value of issued shares in patsystems 
ireland ltd incorporated in the republic of ireland which acts as a holding company    
a 100 investment in tamesis limited a company incorporated in england and wales that develops 2 
distributes and supports software enabling real time trade capture valuation and risk management for 
the structured finance market
5 debtors
2008
£’0000
2007
£’0000
amounts owed by group undertakings 5913 4877
other debtors 2 1
prepayments and accrued income 3 2
5918 4880
6 creditors amounts falling due within one year 
2008
£’0000
2007
restated
£’0000
trade creditors 19 1
contingent consideration – 11
other creditors – 2
accruals and deferred income 62 48
81 62
 see note 1
none of the creditors are secured  notes to the financial statements
80 patsystems plc i annual report  accounts 2008
7 called up equity share capital     
2008
£’0000
2007
£’0000
authorised 
ordinary shares of 1p each 
at 1 january and 31 december – 250000000 shares 2500 2500
deferred shares of 1p each
at 1 january and 31 december – 2 shares – –
redeemable preference shares of £1 each 
at 1 january and 31 december – 49998 shares 50 50
allotted called up and fully paid 
ordinary shares of 1p each 
at 1 january – 177496511 shares 1775 1641
allotted as consideration for acquisition  
of tamesis limited – 1092240 shares 11 122
allotted under share option schemes – 948550 shares 9 12
at 31 december – 179537301 shares 1795 1775
the 1p ordinary shares are listed on the aim market they have one voting right per share 
deferred shares of 1p each 
at 1 january and 31 december – 2 shares – –
the deferred 1p shares are not listed they have no voting rights and no access to dividends 
continued highlights the company the year in review governance financial statements
81 patsystems plc i annual report  accounts 2008
8 share option schemes
the following options to purchase 1p ordinary shares in patsystems plc were granted exercised lapsed and 
outstanding during the year
exercise price  
in pence
outstanding 
at 1 january 
2008
granted in 
year
exercised 
in year
lapsed 
in year
outstanding at 
31 december 
2008
exercisable at 
31 december 
2008
effective 
dates
508p 1735500 – 550000 – 1185500 1185500 note a
950p 97500 – – – 97500 97500 note a
1350p 72000 – 14400 57600 – – note b
1375p 727272 – – – 727272 – note e
1425p 581623 – 37705 46765 497153 377836 note b
1450p 1186606 – 248276 441379 496951 377683 note b
1525p 775737 – – – 775737 589560 note b
1558p 1416500 – 50400 19200 1346900 1023644 note b
1750p 90000 – – – 90000 68400 note b
2775p 250000 – – – 250000 – note g
2900p 444827 – – – 444827 – note g
7377565 – 900781 564944 5911840 3720123
100p 582525 – – – 582525 582525 note i
1375p 3272728 – – – 3272728 – note f
1425p 344245 – 26769 62982 254494 193415 note c
1450p 144494 – – 61405 83089 71437 note c
1525p 404263 – – – 404263 389863 note d
1558p 780500 – 21000 89100 670400 509504 note c
1800p 500000 – – – 500000 500000 note d
2775p 1000000 – – – 1000000 – note h
2900p 1655173 – – – 1655173 – note h
8683928 – 47769 213487 8422672 2246745
total all  
schemes 16061493 – 948550 778431 14334512 5966868
note a these options were granted under the initial award of the enterprise management incentive emi 
scheme these options are now 100 exercisable
note b  options were granted under the second and third awards of the enterprise management incentive 
emi scheme 20 of these options awarded under the second and third grants of both schemes 
vested on 14 february 2007 and 16 vested on 11 february 2008 a further 40 will vest on 
9 february 2009 the remaining 24 of the options will be carried forward into future years and the 
remuneration committee will determine what performance conditions to attach to them in 2009
note c  these options were granted under the second and third awards of part b inland revenue unapproved 
of the patsystems plc 2003 share option scheme the vesting status is the same as note b with the 
exception of 34540 unapproved options with an exercise price of 1450p which all vested in 2008
note d  these options were granted under the second and third awards of part b inland revenue 
unapproved of the patsystems plc 2003 share option scheme 844263 of these options became 
fully vested in 2008 following approval from the remuneration committee the remaining 60000 
options are subject to the same vesting status as note b notes to the financial statements
82 patsystems plc i annual report  accounts 2008
8 share option schemes continued note e these options were granted under a special award of the enterprise management incentive emi 
scheme one third of these options can be exercised after a period of three years after the date of 
the grant two thirds of these options can be exercised after a period of three years after the date 
of the grant but subject to achieving company performance targets
note f these options were granted under a special award of part b inland revenue unapproved  
of the patsystems plc 2003 share option scheme exercise conditions are as per note e
note g these options were granted under a special award of the enterprise management incentive emi 
scheme these options can be exercised after a period of three years after the date of the grant but 
subject to achieving company performance targets
note h these options were granted under a special award of part b inland revenue unapproved of the 
patsystems plc 2003 share option scheme exercise conditions are as per note g
note i these options were granted under a special award of part b inland revenue unapproved of the 
patsystems plc 2003 share option scheme these options became exercisable on 31 december 2008
the weighted average fair value per share at the measurement date of options granted during the year was 
nil p 2007140p
the weighted average share price at the date of grant of options granted during the year was nil p 2007 281p 
for the options that were exercised during the year the weighted average share price at the date of exercise 
was 23p 2007 26p
the weighted average remaining contractual life of options outstanding at the year end is 67 years 
2007 76 years
the total fair value that was charged to the income statement in relation to the share options was £329000 
2007 £210000 all of which related to equity settled share based payment transactions
the fair values of the options have been calculated using the binomial model the model takes into account 
the following factors in determining the fair value of an option
a share price and exercise price 
share prices are closing share prices as at the date of grant exercise prices are listed in the above schedule
b expected term of the options
it is assumed that the expected life of the options under consideration is 5 years 
c volatility
volatility of the company’s share price has been calculated as the annualised standard deviation of daily 
continuously compounded returns on the company’s stock derived from the company’s historical share 
prices adjusted for splits over 5 years back from each date of grant
d riskfree interest rate
the riskfree rates of interest are assumed to be the yield to maturity on a uk gilt strip with the term 
to maturity equal to the expected life of the option 
e dividends
the valuations take account of the expected future dividend yield at the date of each grant
 
continued highlights the company the year in review governance financial statements
83 patsystems plc i annual report  accounts 2008
the table below sets out the volatilities riskfree interest rates and dividend yields applied in each valuation
date of grant
volatility 

riskfree interest rate
 
dividend yield 

24 february 2003 778009 46922 000
13 march 2003 783590 47175 000
30 june 2003 784194 46412 000
27 october 2003 798321 57891 000
01 january 2004 786748 54125 000
30 july 2004 736821 58602 000
27 august 2004 717764 56660 000
16 november 2004 589201 52789 000
04 february 2005 566301 51507 000
17 march 2005 524971 54148 000
06 october 2005 549819 47689 200
23 november 2005 498819 48322 200
14 december 2005 500097 48764 200
14 february 2006 501501 47515 200
19 april 2007 484035 52980 100
07 december 2007 300527 45550 100
31 december 2007 309369 56204 100
9 share capital and reserves
at 1 january 
2008
restated
£’000
shares issued 
in the year
£’000
earnings 
for the year
£’000
dividends 
paid
£’000
share 
compensation 
expense
£’000
at 31 december 
2008
£’000
paid up share capital 1775 20 – – – 1795
share premium 3792 77 – – – 3869
other reserves 50 – – – – 50
retained earnings 810 – 1196 602 329 1733
6427 97 1196 602 329 7447
 see note 1
10 dividends  
the dividends paid in the year were as follows
2008
£’000
2007
£’000
final dividend in respect of the year ended 31 december 2007  
at 021p per share 376 495
interim dividend at 0126p per share 226 198
602 693
a final dividend in respect of the year ended 31 december 2008 of 0237p per share amounting to a total 
dividend of £425000 is to be proposed at the annual general meeting on 28 april 2009 these financial 
statements do not reflect this dividend payable  84 patsystems plc i annual report  accounts 2008
directors and advisers
directors
chairman and  
nonexecutive director 
richard last
chief executive 
david webber
finance director  
martin thorneycroft
nonexecutive director  
chairman of the audit committee 
john priestley
nonexecutive director  
chairman of the combined 
remuneration and nominations 
committee 
steve sparke
company secretary 
martin thorneycroft
advisers
broker and nominated adviser 
seymour pierce limited
lawyers 
dla pipers 
vedder price
registered auditors 
pricewaterhousecoopers llp 
principal bankers 
barclays bank plc 
registrars 
computershare services plc 
po box 82 
the pavillions 
bridgewater road 
bristol
bs99 7nh
corporate details
registered office
cottons centre 
hays lane 
london 
se1 2qp
company number 
4498002
country of incorporation 
england and wales
website 
wwwpatsystemscom
stock exchange symbol
pts patsystems plc i annual report  accounts 2008
patsystems was established in 1994 
as one of the original independent 
software vendors to provide a 
complete suite of modular products  
to support the electronic trading  
of futures and options
today we enable over 10000 traders 
to transact in the global derivatives 
market every month with extensive 
market connectivity spanning from 
latin a merica to japan 
the comp any
01 business profile
02  who we are
04  what we do
06  where we operate
highlights
08 highlights
the year in review 10 chairman’s statement
14 chief executive’s report
20 finance director’s review
governance
26 our board
28 directors’ report
31 statement of corporate 
governance
33 r eport of the board on 
directors’ r emuneration and  
on group remuneration policy
financial statements
37 independent auditors’ report
39 consolidated income 
statement
40 consolidated balance sheet
41  consolidated cash flow 
statement
42 notes to the financial 
statements
75 independent auditors’ report
76 company balance sheet 
77 notes to the financial 
statements
84 directors and advisors europe
london
cottons centre 
hays lane
london se1 2qp 
tel 44 020 7940 0490 
fax 44 020 7940 0499 
usa
chicago 
175 west jackson boulevard 
suite 2260 
chicago il 60604 
tel 1 312 922 7600 
fax 1 312 922 7625 
new york
80 broad street
5th floor suite 507
new york ny 10004
tel 1 212 837 7843
fax 1 212 837 7792
asia pacific
singapore 
137 telok a yer street
0707
singapore 068602
tel 65 6216 0452
fax 65 6536 4167
tokyo 
2nd floor kakigaracho bldg
107 nihonbashi kakigaracho 1chome
chuoku
tokyo 1030014 
tel 81 0 3 3668 9372
fax 81 0 3 2664 7594 
sydney 
level 6
underwood house
37 pitt street
sydney nsw 2000
tel 61 0 2 8987 9600
fax 61 0 2 8252 7640
hong kong 
unit 2004 kinwick centre 
no 32 hollywood road central
hong kong sar
tel 852 3180 9512 
fax 852 3180 9399
global growth
solid returns
annual report  accounts 2008
patsystems plc  annual report  accounts 2008


Summary:
 14 patsystems plc i annual report  accounts 2008
revenue has risen 15 to  
£196 million compared to  
£170 million in 2007 with 
improved contributions from  
all three product segments
earlier in the year it was necessary 
to advise shareholders that the 
business had experienced a delay 
in the closure of new business 
opportunities and the result for 
the first half of the financial year 
would be impacted by those 
delays i am delighted to report 
that as was forecast at the time 
of the announcement those 
delayed sales have been 
concluded during the second 
half of the year
the conclusion of those sales 
opportunities has meant that the 
second half performance of the 
business was substantially ahead 
of the first half t he adjusted 
profit for the second half of the 
year was £33 million compared 
to £04 million in the first half
operating expenses were 186 
higher at £172 million when 
compared to £145 million in 2007
t here are three significant 
components to this increase in 
costs £2 million due to planned 
increased staff costs compared 
to 2007 £035 million due to 
the increase in amortisation of 
intangible assets and a net foreign 
exchange loss of £02 million
during the year the number of 
third party contractors has been 
reduced from a peak of 15 in the 
first half to 3 at the end of the year 
o verall operating costs in 2009 are 
planned to be broadly in line with 
2008 so that anticipated increases 
in revenue will benefit the overall 
profitability should there be 
an unanticipated contraction in 
revenue then contingency plans 
exist to reduce the cost base
trading systems and  
market connectivity
trading systems revenue increased 
by 15 to £164 million for the 
year compared to £143 million 
in 2007
during the year there have been 
new customer wins with the 
hong kong mercantile exchange 
advantage futures in north 
america gk goh financial services 
in singapore and ascot financial 
services and guotai junan futures 
both in hong kong
t he performance of the hong 
kong office in its first full year  
of operation has been particularly 
pleasing and we look forward 
rise in revenue
15
billable users of promark
571
chief executive’s report
“revenue has risen 15 to 
£196 million compared 
to £170 million in 
2007 with improved 
contributions from all 
three product segments”
david w ebber  
chief executive 15 patsystems plc i annual report  accounts 2008
hig hl ig hts t he com pany the y ear in r ev iew gover nan ce finan cial st at ements
to further opportunities in hong 
kong mainland china and taiwan
i am delighted to report a further 
and ongoing increase in the 
number of users for the promark 
professional trading tool at the 
end of the financial year there 
were 571 billable users compared 
to 375 at the start of the year 
adoption of the promark 
tool at mf global morgan 
stanley and newedge has been 
particularly strong during the 
year two of our major customers 
have forward purchased their 
2009 trading screen requirement 
which is a clear demonstration of 
their commitment to both their 
businesses and patsystems this 
revenue will be recognised  
during 2009
as a recognition of the 
significant product investment 
we have made in the promark 
product in 2008 it was awarded 
the “technology product of the 
year” by futures and o ptions 
w eek magazine
promark 50 was released 
in july 2008 and this release 
contained a host of new 
functionality as well as an 
improved logon capability 
improving download speeds  
for the start of the day’s  
trading by over 60
o ther functional improvements 
included an enhanced microsoft 
excel plugin capability to enable 
a broader population to use 
the functionality and promark 
control which enables an 
appropriately mandated super 
user or administrator to monitor 
or intervene on any order or 
trade account
t he existing core system was 
improved by the release of 
version 40 for the software in 
september 2008 the release 
included a substantial extension 
to the data capacity of the 
order routing capability and 
further improvements to 
the transaction handling to 
ensure the product’s operating 
performance remains ahead of 
our customers’ requirements
xlink is patsystems’ 
proprietary network that 
enables patsystems users 
to leverage both exchange 
memberships and operations 
within territories where they 
are not present by way of 
utilising the installations and 
exchange memberships of other 
customers xl ink adoption 
continued to grow in 2008
deployment of global trading 
our new core offering was 
delayed during the year due 
to integration issues and as 
was reported at the half year 
is not expected to contribute 
to revenue materially until the 
second half of 2009
t he latest version of global 
trading version 11 is functionally 
equivalent to the current core of 
the existing system and is fully 
compatible with the current 
trading screen versions of jtrader 
and promark as well as all of our 
existing exchange connectivity
promark billable users news
promark growth 
the number of billable  
promark users grew to  
571 compared to 375 at  
the start of the year
600
500
400
300
200
100
0
‘05 ‘06 ‘07 ‘08 16 patsystems plc i annual report  accounts 2008
deployments of global trading 
are scheduled with existing 
customers during 2009 and 
macquarie bank l imited and 
morgan stanley have contracts 
for its deployment in place
t here have been continued 
extensions to our market 
connectivity in 2008 with 
connectivity to the indian 
national stock exchange and the 
bombay stock exchange with mf 
global the turkish derivative 
exchange turkdex  the tokyo 
stock exchange and the major 
connectivity project in 2008 
the upgrade to the fix fast 
communication protocol for the 
cme group replacing their long 
standing market data protocol
connectivity to exchanges in 
brazil and malaysia is under 
development with planned 
release in the first half of 2009
risk systems
revenue from our risk systems 
business grew by 21 to £17 
million from £14 million in 2007 
and £07 million in 2006 
during the year there was 
considerable success for the risk 
informer product with new sales 
of the product to gh financials 
and royal bank of canada 
capital markets to support the 
management of their post
trade risk on exchange traded 
derivatives business
there were further sales of 
extension licences to newedge 
and mf global during the year to 
support their additional business 
use of risk informer and a 
significant risk informer sale to a 
major investment bank to manage 
the trading of their clients for 
exchange traded derivatives
it is firmly our belief that risk 
informer is the market leading 
product for the management 
and control of posttrade risk for 
exchange traded derivatives and its 
proven capability to risk other asset 
classes’ means that we continue to 
have great optimism for the growth 
in opportunities from this product
i am pleased to announce 
that we have just concluded a 
successful beta of our new pre
trade product risk monitor 
as i stated last year risk monitor 
is a low latency pretrade risk 
management tool designed to 
monitor trades ahead of them 
being traded on an exchange t his 
provides the customer with the 
opportunity to be alerted or even 
to intervene before a trade occurs 
w e have had considerable 
interest within our customer 
base for this type of capability 
and we expect risk monitor to 
commence generating licence 
revenue in 2009
exchange systems
revenue from the exchange 
systems business was £15 million 
for the year compared to 
£13 million in 2007 and was 
primarily from the provision 
of support maintenance and 
associated consultancy services
o n 4 january 2008 tokyo grain 
exchange successfully launched 
three futures products namely 
arabica and robusta bean coffee 
contracts and raw sugar on the 
new continuous exchange system 
provided by patsystems
o n the 5 january 2009 tokyo 
grain exchange launched a non
gmo soybean contract on the 
continuous exchange system
in contrast to previous years 
there have been a number of 
sales opportunities to provide 
our matching engine capability 
in conjunction with our trading 
and risk offerings though as yet 
none of these opportunities have 
materialised in sales 
chief executive’s report continued
“revenue from our risk 
systems business grew 
by 21 to £17 million 
from £14 million in 
2007 and £07 million  
in 2006”
david w ebber  
chief executive 17 patsystems plc i annual report  accounts 2008
hig hl ig hts t he com pany the y ear in r ev iew gover nan ce finan cial st at ements
the availability of the matching 
engine capability within our product 
portfolio continues to open up sales 
opportunities for the rest of our 
product range with the chinese 
futures exchange trading system 
and the hong kong mercantile 
exchange being prime examples 
of this these opportunities may 
not have been available without 
the dialogue about the matching 
and clearing product set as a first 
basis for engagement
though we remain optimistic about 
the opportunity to successfully sell 
our exchange solution we have 
not factored any contribution from 
matching engine sales within our 
business plan for 2009
brand and marketing
w e continuously challenge  
and scrutinise the value that 
we get from our marketing 
expenditure and in 2008 we 
invested £02 million i am 
very satisfied as to how well 
established the key brand 
message we introduced in 2008 
has become “powers trades 
builds exchanges manages 
risk” neatly epitomises our 
core proposition and has been 
consistently reinforced in our 
marketing activities in 2008
in 2008 we decided to withdraw 
from a number of trade shows 
that we felt had not delivered 
value by way of foot fall 
senior prospect or customer 
engagement and have invested 
more extensively in the shows 
that we believe enable us to 
communicate our message  
most effectively
in late 2008 we tested the use 
of an online marketing 
approach rather than the 
mixture of trade press adverts 
and advertorial we have used 
in the past t his was highly 
successful and delivered 
a measurable return on 
investment for 2009 we have 
appointed a us agency to 
support our head of marketing 
based in chicago in extending 
the online marketing strategy
stra tegy and  
product development
o ur strategy remains unchanged 
in that we aspire to be the 
trusted technology partner of 
choice for our customers and 
prospects within our area of 
domain expertise electronic 
trading systems exchange 
systems and risk
o ur internal product investment 
and continued ongoing search 
for potential targets for 
acquisition is focused at present 
on complementing the existing 
product capability and strategy
as i reported above we have 
continued to invest across the 
existing product range as well 
as continuing the development 
of new product offerings such 
as risk monitor
revenue
trading systems revenue risk systems revenue exchange systems revenue 
£164m £17m £15m
trading systems – 837
risk systems – 76
exchange systems – 87 18 patsystems plc i annual report  accounts 2008
within 2008 we launched an 
extension to our capability to 
support the broadest possible 
range of products and trading 
styles with an extension module 
to our existing syoms system
syoms is a patsystems tool 
that enables traders to execute 
products that do not exist on an 
exchange such as a stop time 
triggered or limit orders by 
simulating their existence
the new extension module to 
syoms is called algoserver and 
enables syoms to support a range 
of algorithms t he first release has 
a selection of algorithms provided 
by patsystems but subsequent 
versions will enable users to 
introduce their own algorithms  
by way of our proprietary api
in 2009 our focus will be 
to conclude the first live 
deployments of both global 
trading and risk monitor and 
to commence the first beta 
deployment of algoserver to one 
of our existing syoms customers
t he other significant investment 
that we will be making in 
2009 is the establishment of a 
technical framework to reduce 
the ongoing development 
and support costs of exchange 
connectivity for the future 
we have recruited a new product 
head for the connectivity team 
and removed the fragmentation 
that existed with our connectivity 
team members being based in 
both london and chicago
the instigation of new processes 
and the change in individuals 
within the team will mean 
there will be a lower level 
of productivity within the 
connectivity team in the first half 
of 2009 but we expect to see the 
return on improved productivity 
and shorter development lead  
times in future periods
executive management 
committee
the executive management team 
of patsystems is comprised of the 
two executive directors martin 
t horneycroft and i barry w hite 
and patrick kenny heads of asia 
and north america respectively 
graeme neilly head of european 
sales lorna blane head of human 
resources and kieron o’t oole 
operations director
in september 2008 
kieron o’t oole extended his 
responsibility from support 
and implementations across 
all areas of o perations for the 
patsystems business globally
pat and barry have continued 
to develop their regions during 
the year and graeme has further 
developed his european sales and 
account management team
in march 2008 jon regan left 
patsystems to join a customer 
and in september 2008 andy 
edwards left the business after 
many years’ service as head of 
development i would like to 
thank andy and jon for their 
contribution to the business 
during my tenure as ceo 
i would like to thank all my 
executive management team 
members for their support and 
efforts during the last year
business evolution 
and st aff
though the compliment of staff has 
changed during the year overall 
staff numbers are broadly the same 
as the start of the year at 156
headcount increases within the 
singapore support and technical 
analyst teams have been 
compensated for by efficiencies 
and head count reductions 
elsewhere in the business we have 
continued our policy of offering the 
opportunity for our staff to develop 
their careers within the business 
with the option to relocate to other 
countries during the year we have 
had two staff from london relocate 
“i am delighted to  
report a further and 
ongoing increase in the 
number of users for the 
promark professional 
trading tool”
david w ebber  
chief executive
chief executive’s report continued 19 patsystems plc i annual report  accounts 2008
hig hl ig hts t he com pany the y ear in r ev iew gover nan ce finan cial st at ements
to singapore and one member  
of staff relocate to chicago 
i would also like to particularly 
congratulate the l ondon technical 
and support staff for their 
handling of a disaster recovery 
event in april 2008 t he building 
in which patsystems operates 
in london lost all electrical 
power for 48 hours when the 
local electricity substation was 
flooded our disaster recovery 
plans were instigated and not 
only did no customers suffer any 
service interruption but none 
of our customers were even 
aware that key support and 
development services had moved 
to our disaster recovery site
i would like to thank all of our 
staff for their hard work during 
2008 and they can feel justifiably 
proud of their performance and 
our results for the year
business objectives  
and outlook
our key objectives for 2009 
are as follows
• 	 c o n s o l i d a t e 	 o u r 	 p o s i t i o n 	 w i t h i n	
our existing customer base and 
leverage the opportunity from 
their potential rationalisation 
of their technology platforms 
to extend our position as their 
key supplier
• 	 generate	new	revenue	streams	
from our range of new product 
offerings global t rading risk 
monitor and algoserver
•	 identify 	 potential 	 acquisition	
targets where our global 
sales and support capability 
combined with our strong 
working capital and cash 
generation can leverage long
term growth and value
• 	 e x p l o r e 	 o p p o r t u n i t i e s 	 f o r	
further expansion in south 
america greater china and the 
indonesia  singapore region
trading subsequent to the year 
end has progressed in line with 
our expectations and our sales 
pipeline is already delivering 
exciting opportunities for 2009 
w e remain confident of fulfilling 
our growth aspirations despite 
the tough economic climate
david webber
chief executive 
9 february 2009