05
global in reach scale and solutions
systems union group plc
systems union house 
1 lakeside road 
aerospace centre 
farnborough 
hampshire gu14 6xp 
united kingdom
telephone 44 01252 556000  
website wwwsystemsunioncom
sug anr 006
systems union group plc 
annual report and accounts
systems union group plc annual report and accounts t he d esign p or tfolio
a member of the flathill communications group plc
wwwflathillplccom
designed  produced by
corporate statement
systems union group plc is the worlds leading provider and 
distributor of first class financial and performance management 
solutions to the midmarket 
the group is committed to designing and deploying solutions that equip 
its expanding global user community with the tools needed to understand 
manage and improve financial and wider business performance  
systems union has an international team of management staff and 
partners through which it delivers and supports its sunsystems mis 
vision pegasus redtechnology and ncsoft solutions
systems union – a truly global company
45 offices in 20 countries
in excess of 50000 global customer sites in 194 countries
over 500 partners around the world systems union group plc annual report and accounts 2005 01
corporate statement
1 highlights
2 chairman’s statement
4 chief executive officer’s review
12 directors and advisers
13 directors’ report 
15 statement of directors’ responsibilities
16 remuneration report
17 corporate governance
19 independent auditor’s report
20 consolidated profit and loss account
21 consolidated balance sheet
22 company balance sheet
23 consolidated cash flow statement
24 consolidated statement of total
recognised gains  losses
24 reconciliation of movement in
shareholders’ funds
25 notes to the accounts
38 notice of annual general meeting
39 form of proxy
revenue rose by 
9 to £1134m
ebitda ongoing activities 
rose by 16 to £165m
operating cash flow rose by 
11 to £135m
adjusted diluted eps rose by 
11 to 122p
05 £165m
04 £142m
03 £104m
05 £135m
04 £121m
03 £79m
05 122p
04 110p
0 3 93p
highlights
contents
 revenue increased by 9 6 organic to £1134 million
 h2 revenue was £597 million 2004 £532 million compared
to h1 £537 million 2004 £510 million representing growth
of 12 8 organic in h2 and 5 3 organic in h1 
 ebitda from ongoing activities increased by 16 to £165
million ebitda to revenue margin increased to 16 in h2
from 13 in h1
 profit before taxation increased by 77 to £82 million
 strong operating cash flow of £135 million 
2004 £121 million
 basic eps increased by 73 to 69p
 adjusted earnings increased by 14 to £127 million
 adjusted diluted eps increased by 11 to 122p
 final dividend of 175p proposed resulting in a total dividend
for the year of 25p 2004 20p
 eleventh consecutive half year in line with or ahead of 
market expectations 
 major new contracts across the entire product portfolio
including a large european retailer major insurance companies
in the usa sweden and south america multinational oil and
gas companies many global hotel chains several government
departments in the uk and central europe a leading international
fleet management operator leading real estate companies in
the usa and australia and one of the world’s largest accounting
practices in asia pacific
05 £1134m
04 £1042m
03 £784m 02 systems union group plc annual report and accounts 2005
review
i am pleased to report that the group
had a very successful year we achieved
our principal financial operational and
strategic objectives delivering organic
revenue growth and increased profitability
we invested further in our personnel
reseller channel research and development
and marketing to further strengthen our
core product offering and expand our global
footprint operationally the focus was on
the further integration of the key strategic
acquisitions made in 2003 and 2004 we
have consolidated our competitive position
and built on our commercial and financial
success through the continued investment
in the development of a technology
framework through which we enhance
and extend our suite of financial and
performance management solutions 
the acquisition programme commenced in
the final quarter of 2003 with the purchase
of mis ag a leading business intelligence
software company and foundation systems
limited a leading reseller of sunsystems
and other third party software this was
followed in 2004 with the acquisitions of
the vision suite of software from lasata
pty the ncsoft brand of business software
and a leading accounting and business
chairman’s statement
bob morton
chairman
summary of 
chairman’s statement
 delivered organic revenue growth
 financial success through continued investment
 the group is financially strong
 dividend increased by 25
 the board is optimistic for a successful 2006 systems union group plc annual report and accounts 2005 03
software distributor in ireland subsequently
renamed systems union ireland limited
i am pleased to report that all of these
businesses have been successfully
rationalised and incorporated into the
group from a technical commercial and
organisational perspective during 2005
we bought mis spain sl and acquired
a reseller business operating in several
countries in the far east
the dimension and dynamics of the business
have changed significantly notably with
the acquisition of mis ag which i am now
pleased to report is 100 per cent owned by
the group this enables us to aggressively
expand and develop our solution portfolio
operating in a more diverse and enlarged
market space we are ideally positioned to
take full advantage of the significant growth
in the business intelligence software market
and expect that 2006 will be another year 
of growth 
the group is financially strong with
£24 million in cash £9 million net cash
balances after deduction of £15 million
mediumterm acquisition finance this
together with the increase in the group’s
capital value has significantly increased 
our ability to make further acquisitions
results
revenues have increased by 9 per cent 
to £1134 million 2004 £1042 million and
ebitda margins widened from 136 per
cent to 146 per cent
earnings before interest tax depreciation
and amortisation grew by 16 per cent to
£165 million 2004 £142 million and adjusted
diluted earnings per share improved to 122p
2004 110p the underlying strength is
demonstrated by our positive operating cash
flow with £135 million 2004 £121 million
being generated during the year
dividend
the board is recommending a final dividend
of 175p per share resulting in a total dividend
for the year of 25p per share 2004 20p per
share an increase of 25 per cent the final
dividend will be paid on 23 may 2006 to
shareholders on the register at the close
of business on 21 april 2006
staff
a global software business recognises
the changing needs of customers adapts
to technology changes and delivers the
benefits of these changes to its customers
our management and staff continued to do
this in 2005 and the directors recognise
and thank them for their efforts
outlook
in view of the strong financial performance
improved sales pipeline and enhanced
solution portfolio the board is optimistic 
for a successful 2006 
bob morton
chairman
27 february 2006
“the group had a very successful year we achieved our
principal financial operational and strategic objectives
delivering organic revenue growth and increased profitability
we invested further in our personnel reseller channel research
and development and marketing to further strengthen our core
product offering and expand our global footprint” 04 systems union group plc annual report and accounts 2005
2005 represented a year of significant
progress with systems union group
delivering record results and our eleventh
consecutive half year in line with or ahead
of market expectations we improved all
key performance indicators across all
operations in addition we invested further
in staff our infrastructure and in our
unrivalled and global portfolio of financial
and performance management solutions 
revenues grew to £1134 million a 9 per cent
increase on last year and we delivered 8 per
cent organic revenue growth in h2 and 3 per
cent in h1 ebitda grew by 16 per cent to
£165 million and adjusted earnings grew 
by 14 per cent to £127 million
global in reach scale 
and solutions
the group is committed to designing and
delivering solutions that help global users
to understand manage and improve
business performance and profitability
rd successfully delivered significant
enhancements to our core sunsystems and
pegasus financial management solutions
to mis our worldclass performance
management and business intelligence
suite and to our vision portfolio of 
chief executive officer’s review
paul coleman
chief executive officer
summary of chief
executive officer’s review
 2005 has been a year of record results for
the group
 we have exceeded market expectations in
terms of revenue growth and profitability
 operationally our solution portfolio has
been enhanced with the addition of new
‘valueadd’ functionality
 we have invested further in our staff our
partner communities our global infrastructure
and our service and support network
 systems union is a truly global company
with an enviable and comprehensive
solution portfolio and world wide
distribution network 
 we have a clear and achievable agenda
which is already proving itself 
 we enter 2006 stronger than ever before
with continued optimism for the future systems union group plc annual report and accounts 2005 05
panapplication reporting and analytical
products 2005 saw the launch of
sunsystems procurement vision serduct
studio pegasus xrl for competitive
products mis decisionware 511 and
the development of mis consolidation
and vision reporting services
we increased our staff numbers by 10 per
cent and recruited 22 new channel partners
around the world a total of 44 training
courses improved the sales skills of our
staff and partners we have also devised
a new classification system for partners
gold certified certified and registered
which provides recognition for partner
achievement and competency 
in terms of the reach and scale of our
operations we made a number of
acquisitions in asia pacific ireland and
spain we opened new offices in chicago
and los angeles and plan to open offices
in kuala lumpur malaysia and guangzhou
china in addition we gained recognition
as a microsoft global independent software
vendor this enables us to build our
commercial relationship with microsoft and
undertake joint go to market activity as well
as strengthen our rd relationship across
the product portfolio 
our financial technical and commercial
progress has been recognised by several
independent global awards programmes
the highlights include the appearance of
systems union solutions in the highly
influential gartner cpm magic quadrant a
ranking in the deloitte technology fast 50
for london and the south east europe’s
top 500 and in mis asia magazine’s top
100 technology companies
financial review
group revenue grew by 9 per cent to
£1134 million licence revenues at 
£315 million increased by 10 per cent
maintenance revenue at £486 million
increased by 7 per cent and services revenue
at £333 million increased by 10 per cent 
total operating expenses increased by
£56 million up 6 per cent to £1049 million
most of this increase was attributable to
the increased investment in personnel
the total number of personnel increased
by 126 to 1442 and was primarily in sales
marketing and consulting largely in the
americas and asia pacific regions 
ebitda increased by 16 per cent to 
£165 million from £142 million in 2004 and
the ebitda margin increased to 146 per
cent from 136 per cent the growth in
group profit before tax was 77 per cent and
25 per cent adjusted for the £19 million of
nonrecurring charges in 2004 the group’s
tax rate benefits from the utilisation of
corporate tax losses brought forward
from previous years and rd tax credits
gross cash balances at 31 december 2005
were £240 million 2004 £165 million after
the deduction of £15 million mediumterm
acquisition finance the net cash balances
were £90 million 2004 £15 million cash
flow from operating activities increased by
11 per cent to £135 million during 2005
the group spent £24 million on acquisitions
net of cash in acquired businesses 
dividends paid during 2005 amounted
to £23 million representing 15p per share
in may and 075p in october the directors
are proposing a final dividend for 2005 
of 175p per share which makes 25p 
per share for the year which will absorb
approximately £18 million in cash
payable in may 2006
operational review 
the group operates through four geographic
regions uk and ireland uki central and
eastern europe middle east and africa
ceemea asia pacific and the americas
the growth and profitability generated in
all regions is due to the team’s commercial
and technical understanding of prevailing
“systems union is a global company with an enviable and
comprehensive solution portfolio and world wide distribution
network we have a clear and achievable agenda which is
already proving itself and enter 2006 stronger than ever before”
the group’s comprehensive solutions
help global users to understand
manage and improve business
performance and profitability
worldclass financial management
from sunsystems exceptional analysis
and reporting capabilities from the
vision suite and enterprisewide
performance management delivered 
by the mis portfolio 06 systems union group plc annual report and accounts 2005
chief executive officer’s review
local national and international market
dynamics and specific customer needs 
uki
revenue grew by 5 per cent to £44 million
and represents 39 per cent of global
revenue this region combines systems
union uk and ireland together with
pegasus foundation and redtechnology 
in systems union the operations of the
previously standalone acquisitions and
existing businesses were fully integrated 
in 2005 with a view to ensuring that all
product offerings and business solutions
were marketed and sold cohesively
significant successes were recorded
across the entire product portfolio with
notable wins including a development
agency in scotland a central government
department in london a uk financial
institution a global oil and gas provider
a construction firm a specialist travel agent
an elite car manufacturer a chemical
science organisation a food retailer
a property management organisation
and a leading employment specialist
2005 was a year of further progress for
pegasus revenue grew by 6 per cent with
significant licence sales generated from its
flagship opera ii solution in addition there
was an improvement in operating margins
foundation embraced the enlarged
portfolio and generated an encouraging 
6 per cent organic revenue growth
redtechnology recorded a 33 per cent
increase in revenue
ceemea 
revenue from ongoing activities grew by
7 per cent to £373 million and represents
33 per cent of global revenue this region
now combines the previous operations of
systems union and mis
underscoring this performance was
the securing of significant deals across
the region from a major swiss retail group
an engineering company in germany
an international courier service a german
airport services organisation a french
business and security services company 
a substantial swedish insurance company
a leading rubber manufacturer an austrian
government department a leading
automotive distribution company a large
energy provider and a german financial
services provider 
the americas
revenue grew by 23 per cent to £131 million
and represents 11 per cent of global
revenue this region now combines the
previous operations of systems union 
mis and lasata
systems union is a global company
with an expanding partner community
around the world 
over 500 channel partners actively 
sell and support the systems union
solution portfolio with 22 new partners
recruited during 2005
partnering with our resellers
case study 1
sunsystems mis and vision
jmb realty
chicago based jmb realty corporation
owns develops and manages a variety
of large commercial real estate properties
throughout the world 
industry
commercial property management
the solutions selected
sunsystems financial management 
mis performance management solutions
and vision panapplication reporting 
and analytics
a brief overview of what was
delivered and the benefits
jmb’s primary goal was to move from an
accounting system to a complete business
solution it needed faster more accurate
reporting capabilities and a solution
capable of performing budgeting and
forecasting tasks in addition the company
needed high data availability and reliability
along with tools to improve enterprisewide
business intelligence jmb selected
sunsystems vision and mis solutions
“systems union definitely lives
up to its claim of being a leading
software vendor we anticipate
that the integrated range of
financial reporting and business
intelligence solutions will serve
our organisation’s performance
management requirements for
the long term”
ron godsey
senior vice president and controller 
at jmb realty systems union group plc annual report and accounts 2005 07
2005 saw growth in excess of 40 per cent
in services revenue 8 per cent in licences
and 18 per cent in maintenance additionally
there were new and significant business
wins with a us based global insurance
provider a financial services provider 
a major canadian airport leading global
hoteliers a leading energy provider a
commercial real estate specialist several 
oil and gas companies an international
media company and a large commodities
trading house
there has been considerable investment in
this region to drive future growth with a view
to reflecting the global importance of this
region we extended our footprint by
opening offices in los angeles and chicago 
asia pacific
revenue grew by 23 per cent to £190 million
and represents 17 per cent of global revenue
this region now combines the previous
operations of systems union mis lasata
and eclipse asia
the region achieved an increase of 56 per
cent in its consulting revenues 21 per cent
in licences and 14 per cent in maintenance
the asia pacific team secured contracts
with a tokyo based manufacturer a leading
accountancy practice a hong kong based
freight services organisation an educational
services provider and a consumer goods
provider both based in australia a global
coffee retailer and leading financial services
organisations in china and japan the team
has achieved a high rate of profitability and
is exploring new opportunities in the rapidly
expanding markets within the region we
will also be opening new offices throughout
the region in 2006
global solutions
the group owns all of the intellectual
property rights ipr for its financial and
performance management solution
portfolio we are committed to the
continual development delivery and
support of a portfolio of first class financial
and performance management solutions
which enable our clients to manage
understand and improve their businesses
there were many enhancements made to
products during the course of the year which
were launched in 2005 and early 2006 
robust financial management systems will
always be critical to the integrity of an
organisation additionally the growth in the
business intelligence bi marketplace is
being driven by the ever more complex
regulatory environment the increasingly
global nature of business transactions the
requirement to reduce risk and respond
earlier to negative events the need for
“the group operates in four geographic regions uki ceemea
asia pacific and the americas the growth and profitability in
these regions is due to the team’s commercial and technical
understanding of prevailing local national and international
market dynamics and specific customer needs”
significant successes generated across
the uki region including a government
department a global oil and gas
provider a food retailer and a
construction firm 
case study 2
sunsystems and vision 
noble trading 
noble group limited sgx nobl is 
a market leader in managing the global
supply chain of agricultural industrial 
and energy products the group has over
70 offices in 42 countries serving more 
than 3500 customers  
industry
financial services
the solutions selected
sunsystems and vision for robust financial
management financial reporting and
business analytics 
a brief overview of what was
delivered and the benefits
noble trading became a systems union
customer in 2005 it purchased more than 60
sunsystems licenses as well as the vision
reporting solution for deployment in the 
us asia pacific and europe noble needs
deployment in multiple countries works
with multiple currencies and languages and
has robust financial reporting and business
analytics requirements
“systems union is a vendor we
know and trust the sunsystems
solution has proven to be robust
and reliable our us deployment
has gone live and the product’s
flexible and reliability has already
been proven as we continue the
rollout into other regions we see
sunsystems’ multicurrency
flexibility and analytic functions
as strong differentiators from
other vendors further systems
union continues to offers us a
great product with great service
and support”
steven bader
chief finance officer 
at noble group americas
44 structured training courses ensure
that staff and partners deliver service
and solution excellence to users
around the world 08 systems union group plc annual report and accounts 2005
chief executive officer’s review
new business wins across the americas region
including a global insurance provider a major
canadian airport leading global hoteliers and 
an international media company
in 2005 the group was rebranded on the global
stage as the market leader in the provision of 
worldclass financial and performance management
solutions to the midmarket
partnering with our staff
greater transparency and availability 
of uptotheminute enterprisewide
information and the need to plan budget
and forecast more effectively for the future
spreadsheets are no longer adequate and
organisations are looking for bi solutions
that offer database integrity business rules
access rules and audit trails as well as a
common operating platform and secure
enterprisewide access to data systems
union is widely recognised as a leading
provider of a range of marketleading and
proven solutions for the midmarket
financial management
sunsystems is a leading transactional
processing solution enabling the 
generation of mission critical reliable and
comprehensive financial information its rich
functionality was recognised in july 2005
when sunsystems 5 was certified by kpmg
in germany as offering compliance with
sarbanesoxley and ifrs 
there has been a substantial increase 
in sales of sunsystems exfm which
remains a unique proposition in the
marketplace this solution integrates
elements from across the portfolio into a
single solution combining core financials
with advanced reporting budgeting and
forecasting capabilities along with a 
portal framework 
sunsystems’ core functionality was
enhanced with the release of sunsystems
procurement and productivity time
expense and resource designed to help
organisations streamline and rationalise
purchasing expense and time management
processes in addition in early 2006
sunsystems 522 a major release was
launched incorporating new reporting 
and query management functionality 
pegasus launched innovative and
competitive products including opera ii
enterprise sql and pegasus xrl for third
party software it also launched pegasus
cis for the construction industry which
will aid regulatory compliance 
performance management 
mis solutions enjoyed notable successes
during 2005 we launched a series of
enhancements to the portfolio including
mis balanced scorecard which was
developed to help customers communicate
strategy set goals and measure and
monitor business performance in a
more efficient manner
in addition mis solutions received
significant independent endorsements
including the influential olap online
application processing survey 5 which
reviewed 2100 software implementations
16
ebitda from ongoing activities increased 
to £165 million
11
adjusted diluted eps increased to 122p
case study 3
sunsystems and vision
51job
51job nasdaqjobs is a leading human
resource solutions provider in china
offering a broad array of services in the
areas of recruitment solutions training
and assessment and hr tools and
outsourcing services
industry
human resource solutions
the solutions selected
sunsystems financial management
and vision panapplication reporting
and analytics
a brief overview of what was
delivered and the benefits
as the first chinese human resource solutions
company listed in the us nasdaq 51job
needed a financial management solution that
could help the company produce financial
reports compliant with international financial
reporting standards and statutory regulations
it needed the capability to centrally manage
offices over china with online access to
financial information in addition the
company needed a solution that is flexible
and scalable and empowers users to run
multidimensional analysis and produce ad
hoc reports when and where needed 51job
selected sunsystems and vision solutions
“sunsystems and vision from
systems union provided 51job 
with a solution that is integrated
comprehensive effective and
highly intelligent satisfying our
need for group and international
management with these flexible
solutions and the international
support network of systems union
we are confident that our future
development will be supported”
rick yan
chief executive officer 
at 51job systems union group plc annual report and accounts 2005 09
in 71 countries and recognised mis
solutions for high levels of user satisfaction
excellent goal achievement rates and fast
implementation times in addition a new
release of decisionware was launched
in early 2006 together with a new version
of enterprise planning delivering new 
multilingual capabilities 
the group formed strategic partnerships
to further extend the portfolio and market
reach of mis solutions germany’s leading
midmarket financer the sparkassen
financial syndicate has released software
based on mis technology while a
partnership with a global telecoms giant
delivered a mobile reporting solution 
reporting
vision is a powerful panapplication
reporting and analytics suite among
our significant rd achievements for 2005
was the development of vision reporting
services which is based on microsoftnet
technology by developing this solution we
have removed our utilisation of third party
reporting solutions
vision’s extensive reporting on realtime
data and drill down across multiple products
was enhanced with the launch of serduct
studio in june this offering enables
organisations to build serducts vision’s data
mapping technology which in turn enables
reporting applications to deliver live reporting
and analysis across multiple data sources
including competitive products 
marketing
during 2005 the global marketing team has
successfully rebranded and relaunched
systems union’s corporate positioning 
as a market leader in the provision of 
worldclass financial and performance
management solutions to the midmarket
this new positioning is designed to reflect
the breadth and depth of systems union’s
solution portfolio and to recognise the
changing needs of cfos who continue 
to demand excellence in financial
transactional processing but who 
also now require proactive business 
intelligence tools to drive improved
business performance
a globally coordinated marketing
programme has been executed to launch
the new systems union corporate identity
and promote the group’s unique market
proposition this has resulted in improved
coverage of systems union’s solutions by
market leading industry analysts such as
gartner and the olap survey the winning
of a number of industry awards and a
significant improvement to the sales
pipeline year on year
the ceemea region generated notable successes
including a major swiss retail group an international
courier service an austrian government department
and a german financial services provider
10
we have increased our staff numbers 
to 1442 
45 offices
global reach with offices across four
geographic regions
63 new releases
the group owns all the ipr for its financial
and performance management portfolio
case study 4
mis and vision
ames
adult multicultural education services
ames employs around 865 people 
and delivers educational and wider
support services to over 49000 people 
in australia 
industry
notforprofit
the solutions selected
vision panapplication reporting and mis
performance management solutions
a brief overview of what was
delivered and the benefits
in selecting the vision and mis portfolio
ames can easily consolidate corporate
information drawing data from disparate
systems into a single centralised system
that provides a unified view of all data in
a consistent format 
the solutions are functionally rich highly
intuitive and readily customisable and the
data generated is available in realtime 
“fundamentally we were looking
for an integrated solution
approach across our financial and
wider management systems that
was also cost effective to operate”
tony harding
it manager 
for ames
the group’s financial technical and
commercial progress was recognised
by independent analysts and awards
programmes including the gartner
cpm magic quadrant the deloitte
technology fast 50 olap survey 5
and mis asia magazine’s top 100
technology companies  10 systems union group plc annual report and accounts 2005
portfolio and the result has been that our
solutions enable finance professionals to
take advantage of enterprise wide financial
and performance information the result
is that focus can now be placed on
added value activities such as evaluating
strategies assessing how to drive top line
growth improve the bottom line and use
assets more effectively all of which
contribute to delivering improved overall
business performance 
further investment has been made in our
new net based technology framework
which enables us to achieve even faster
and even more efficient development in
the future it provides us with a robust
architecture on which we extend the
breadth of our solutions and offer
quantifiable benefits to our customers 
we have also implemented a zero defects
strategy to deliver even higher levels of
product quality 
support and services
the group’s support network comprises
two supercentres a network of regional
support centres on four continents as well
as an international team of highly skilled
consultants professional services presales
and solution experts we continue to invest
in our ability to provide timely professional
the second phase of this rebranding
has also now been executed with the 
rebranding of the three global systems
union solutions of sunsystems vision
and mis the logos for these solutions have
now been conformed to the same look and
feel to reflect the cohesive nature of the
integrated financial and performance
management suite in addition a new
corporate positioning message of ‘manage
understand improve’ has been launched
to reinforce the respective value
propositions of the global solutions –
sunsystems helping organisations manage
their businesses more efficiently through
best of breed transactional processing
vision helping companies improve their
understanding of financial and operational
activities via powerful realtime reporting
and analysis and mis driving business
improvement with a comprehensive portfolio
of performance management tools
research and development
the information needs of users have
changed and the demand for business
financial and wider management
information to be available in a unified and
consistent format is increasing we have
responded with further investment in our
cohesive rd road map our global rd
teams work collaboratively to ensure
maximum productivity across the entire
chief executive officer’s review
over 50000 global customer sites around the world
benefit from systems union’s worldclass portfolio of
financial and performance management solutions
and support services
systems union’s staff and management are
committed to the ongoing success and profitability
of the company 
partnering with our clients
case study 5
mis
db regio
db regio provides rail services linking
cities and rural areas throughout germany 
industry
transportation and logistics
the solutions selected
mis performance management solutions
a brief overview of what was
delivered and the benefits
using a custom built mis solution db
regio has improved the productivity of its
personnel shift patterns are entered via the
web and the information generated is used
to understand productivity levels enabling
benchmarked key performance indicators
to be introduced db regio is now able to
effectively plan schedule and analyse over
260000 individual shifts per month and this
information is used to ensure that the entire
train service runs smoothly 
“the entire concept a relational
and multidimensional database
with webbased reporting on top
is so simple for our users and
it works 
our work environment has
drastically improved on account
of the added transparency in the
planning process i know that the
system is in high demand based
on the growing user lists”
frank wundrich
project manager and director 
of process optimisation 
for db regio northeast systems union group plc annual report and accounts 2005 11
and highly responsive service and support
standards for our partners and users around
the world 
our support consultants are closely
involved with our customers from early
in the sales cycle and work closely with
the professional services and presales
teams this ensures teamwide understanding
of specific installations and ensures that
customers receive ongoing expert and
personalised support
we offer a comprehensive customer
support system with a global ip telephony
system routing customer calls from around
the world to the best available consultant
who speaks their local language the ‘follow
the sun’ support initiative diverts calls placed
out of office hours to the nearest open
support desk we offer multilingual support
on a 24 hour 5 day a week basis 
staff
systems union’s staff and management 
are committed to the ongoing success and
profitability of our company we possess a
capable and experienced team who ensure
we deliver service and solution excellence
to our customers around the world 
i am proud to be the chief executive officer
of systems union and would like to thank
every member of the team for their hard
work support and dedication 
2006 and beyond
2005 has been a year of record results
for the group we have exceeded market
expectations in terms of revenue growth
and profitability operationally our solution
portfolio has been enhanced with the
addition of new ‘valueadd’ functionality and
we have invested further in our staff our
partner communities our global infrastructure
and our service and support network 
systems union is a truly global company
with an enviable and comprehensive solution
portfolio and world wide distribution network
we have a clear and achievable agenda
which is already proving itself we enter 2006
stronger than ever before with continued
optimism for future growth
paul coleman
chief executive officer
27 february 2006
“2005 has been a record year for the group we have
exceeded market expectations in terms of revenue growth
and profitability operationally our solution portfolio has been
enhanced and we have invested further in our staff partners
global infrastructure and service and support network”
the asia pacific team secured contracts with
a leading accountancy practice an educational
services provider in australia and leading financial
services organisations in china and japan 
case study 6
pegasus
scotmin nutrition
founded in 1979 scotmin nutrition part
of the buccleuch group develops and
manufactures animal feed supplements 
industry
agriculture
the solutions selected
pegasus opera ii and operations ii
a brief overview of what was
delivered and the benefits
scotmin nutrition evaluated a number of
leading market solutions before upgrading
its existing pegasus portfolio to opera ii
and operations ii in addition scotmin
selected tsg scotland a pegasus gold
partner as its partner in the delivery and
support of the project the company now
benefits from access to the new
functionality comprehensive financial
information rapid reporting and ease of
use delivered by the pegasus portfolio 
“it was important to us that we
selected solutions and a partner
with a proven track record we
found both with pegasus and tsg
we are particularly impressed with
the superb gross margin reporting
capabilities offered by pegasus
solutions having access to such
comprehensive financial information
enables us to understand and
manage our business more
effectively and efficiently”
alan runciman ca 
financial controller 
at scotmin nutrition 12 systems union group plc annual report and accounts 2005
directors and advisers
directors
a l r morton nonexecutive chairman
p j coleman chief executive officer
j l pemberton nonexecutive director
company secretary 
p g larking
registered office 
systems union house
1 lakeside road
aerospace centre
farnborough
hampshire gu14 6xp
registered number 2735281
registrars
capita registrars
the registry
34 beckenham road
beckenham kent br3 4tu
nominated adviser 
ing corporate finance
60 london wall
london ec2m 5tq
joint nominated broker
panmure gordon uk ltd
moorgate hall
155 moorgate
london ec2m 6xe
joint nominated broker
kbc peel hunt ltd
111 old broad street
london ec2n 1ph
auditors
kpmg audit plc
arlington business park
theale reading rg7 4sd
solicitors 
allen  overy
one new change
london ec4m 9qq
burges salmon
narrow quay house
narrow quay
bristol bs1 4ah
bankers 
barclays bank plc
barclays technology  telecom team
level 26
1 churchill place
london e14 5hp systems union group plc annual report and accounts 2005 13
directors’ report
the directors present their annual report together with the audited consolidated financial statements for the year ended 31 december 2005
principal activities and business review
the principal activity of the group is the design development production and distribution of financial and performance management
software sold under the sunsystems mis vision ncsoft and pegasus brands to international and domestic markets ecommerce
internet hosting and support services are sold through redtechnology
a review of the group’s operations is included within the chief executive officer’s review on pages 4 to 11 the chairman comments
on the results in his statement on pages 2 and 3
financial results and dividends
details of the results for the year ended 31 december 2005 are set out on pages 20 to 37 of the report and further details are contained
in the chairman’s statement and the chief executive officer’s review
turnover for the year was £113354000 2004 £104230000 and profit after taxation was £6945000 2004 £3925000
an interim dividend of 075 pence per share 2004 05 pence was paid to shareholders on 11 october 2005 the directors are proposing
a final dividend of 175 pence per share 2004 15 pence payable on 23 may 2006 to shareholders on the register on 21 april 2006
product development
expenditure on research and development was £14172000 2004 £14243000 the company continues to attach considerable importance
to the updating of its products either by internal development or the purchase of external software products where this is more appropriate
directors and their interests
the directors who have served during the year are
a l r morton
p j coleman
j l pemberton
a c s sweet resigned 15 june 2005
bob morton 64 has been nonexecutive chairman since 1995 when he first invested in the company mr morton is the chairman
of a number of companies including harrier group plc vislink plc maclellan group plc and armour group plc
paul coleman 54 has over 35 years’ experience with wide ranging knowledge of a number of industries both in the uk and internationally
prior to joining the systems union group in 2000 he was the group finance director and investment analyst at carlisle group plc and
european finance director at the international security company adt group plc
john pemberton 57 was the founder and major shareholder of systems union group limited prior to its incorporation into the enlarged
group he was the architect of the sunsystems financial and business management software which forms a key component of the group
he is a graduate of the london school of economics
the beneficial and family interests of the directors in the share capital of the company as recorded in the register maintained
by the company in accordance with the provisions of the companies act 1985 were as follows
at at
31 december 1 january 
2005 2005
5 pence 5 pence
ordinary shares ordinary shares
a l r morton 6994270 10860520
p j coleman 175000 175000
j l pemberton 4846308 4846308
during the course of 2005 mr morton’s nonbeneficial interest in shares held by southwind limited and seraffina holdings limited holding
1866250 and 2000000 shares respectively held beneficially for two of his sons expired upon them reaching the age of maturity
mr pemberton retires from the board in accordance with the company’s articles of association and offers himself for reelection 14 systems union group plc annual report and accounts 2005
directors’ report
substantial shareholdings
save for the interests of a l r morton and j l pemberton which are noted above the directors are aware of the following who are
interested directly or indirectly in 3 or more of the company’s shares
number percentage of
of shares share capital
m  g investment management limited 11038382 1004
jupiter asset management limited 9271274 844
unicorn asset management limited 7771893 707
morley fund management limited 7097529 646
framlington investment management limited 4573750 416
hermes administration services limited 4185000 380
the company has an interest in 77 million shares which are held in trust for the benefit of the group this holding represents 7
of the current issued share capital of the company
acquisitions and disposals
on 27 june 2005 systems union iberica sl acquired the 95 of the shares in mis spain sl not already owned by mis ag the total
consideration including acquisition costs of £281000 was paid in cash
on 5 august 2005 the company acquired via its local subsidiaries the entire issued share capital of eclipse computing japan limited
and the sunsystems customer bases of the eclipse group subsidiaries in hong kong thailand malaysia and singapore the total
consideration will be determined by completion accounts for the acquired company and assets those accounts are in the process
of being finalised the total consideration including acquisition costs will not exceed £1400000
on 3 february 2006 the company acquired the remaining 473 minority stake in mis ag thereby bringing its holding to 100
the total consideration for these shares including costs was £1715000
annual general meeting
the annual general meeting of the company will be held at the registered office of the company at 1230 pm on 27 april 2006
the notice of meeting detailing the ordinary and special business to be conducted is set out on page 38 to this report shareholders
will be asked to approve resolutions 5 to 8 as special business resolutions 5 6 and 7 have become routine business at the annual
general meeting of most public companies including systems union group plc and are fully detailed in the notice of meeting
resolution 8 proposes to adopt new articles of association of the company in place of its existing articles which were adopted at the
time of the company’s flotation on aim in 1999 the main purpose is to update the articles to take account of recent legislation as well
as to update them more generally the changes proposed include updates as a result of the following legislation
a the companies act 1985 electronic communications order 2000
b the uncertificated securities regulations 2001 crest
c the companies acquisition of own shares treasury shares regulations 2003 and
d the companies audit investigations and community enterprise act 2004
other changes have been made to the articles to reflect changes in best practice as a result of updated corporate governance guidelines
however importantly the board considers that each of these changes is in the best interests both of the company and of its shareholders  
finally following consultation with the company’s nomad and brokers and with a view to the adoption of ifrs by the company on
1 january 2007 the board have decided to remove the restriction on the company’s borrowing powers currently contained in article 120
while the board has no current plans to increase the level of company’s borrowings this article is no longer considered necessary or
appropriate given both the size of the company and the other financial controls which are in place
a copy of the proposed new articles will be available for inspection during normal business hours on any weekday at the registered office
of the company from 3 april 2006 until the close of the agm and at the agm itself for at least 15 minutes prior to and during the meeting systems union group plc annual report and accounts 2005 15
statement of directors’ responsibilities 
employees
every effort is made to keep all staff informed and involved in the operations and progress of the group this is achieved through
the use of electronic communications staff briefings and newsletters it is the group’s aim that recruitment and development of staff
should be determined solely on ability and other relevant requirements of the job disabled persons and those who become disabled
are given the same consideration as others and depending on their skills will enjoy the same prospects as other staff
the group’s policies on health and safety are continually under review ensuring that current practices comply with the laws applicable
in the countries in which we operate
payment of suppliers
the group agrees appropriate terms and conditions individually with its suppliers it seeks to abide by these agreed terms provided that
the supplier has also complied with them the number of creditors days for the group at 31 december 2005 was 47 31 december 2004
45 days the number of creditor days for the company at 31 december 2005 was 25 2004 35 days
donations
there were no political donations during the year donations of a charitable nature amounted to £27413 2004 £18558
auditors
a resolution to reappoint kpmg audit plc as auditors to the company at a level of remuneration to be agreed by the directors
will be put to shareholders at the annual general meeting
by order of the board
p g larking
secretary
27 february 2006
the directors are responsible for preparing the directors’ report and the financial statements in accordance with applicable law
and regulations
company law requires the directors to prepare financial statements for each financial year under that law the directors have elected
to prepare the group and parent company financial statements in accordance with uk accounting standards
the group and parent company financial statements are required by law to give a true and fair view of the state of affairs of the group
and the parent company and of the profit or loss for that period
in preparing these financial statements the directors are required to
 select suitable accounting policies and then apply them consistently
 make judgments and estimates that are reasonable and prudent
 state whether applicable accounting standards have been followed subject to any material departures disclosed and explained
in the financial statements and
 prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and the parent
company will continue in business
the directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position
of the parent company and enable them to ensure that its financial statements comply with the companies act 1985 they have general
responsibility for taking such steps as are reasonably open to them to safeguard the assets of the group and to prevent and detect
fraud and other irregularities
the directors are responsible for the maintenance and integrity of the corporate and financial information included on the company’s website
legislation in the uk governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions
in respect of the directors’ report and the financial statements 16 systems union group plc annual report and accounts 2005
remuneration report
policy on remuneration of directors and senior management
the remuneration of the chief executive officer and some senior managers is agreed by the remuneration committee terms of appointment
of senior management are approved by the chief executive officer policies are designed to attract motivate and retain high calibre
individuals and to reward them for enhancing value to shareholders
salary and other benefits
salaries are reviewed periodically and have regard to remuneration packages of similar public companies operating in the computer
services industry policies concerning other employment benefits are reviewed on a regular basis
bonus
at the outset of each financial year the remuneration committee agrees an annual bonus target for the chief executive officer and some
senior managers certain other senior staff have bonus arrangements which are agreed by the chief executive officer and are dependent
on the performance of the group and the individual
share options
the company operates an inland revenue approved share option scheme from which the grants of approved unapproved and super
options are made the company has granted share options to staff at all levels and details of the options outstanding are set out
in note 18 of the financial statements details of the options outstanding for directors are given in this report
options are granted and exercised pursuant to the rules of the scheme and in accordance with the instructions of the remuneration
committee the scheme is administered by the company secretary
approved and unapproved options are termed ordinary options and are exercisable over a seven year period three years after the date
of grant
super options vest in proportions of one third of each grant on an annual basis over a three year period subject to meeting performance
criteria set by the remuneration committee in the event the vesting criteria are not met they will be capable of vesting in a future period
the vesting criteria are set annually by the remuneration committee these options are capable of exercise over a seven year period
three years after the date of grant in tranches of 25 of the cumulative number of vested options exercises may only take place at six
monthly intervals until 100 of options are capable of exercise once 100 are available for exercise they can be exercised in undefined
proportions up until ten years from the date of grant
pensions
the company makes a defined contribution on behalf of the chief executive officer to an executive pension plan of his choice such
contributions represent 10 of his basic salary defined contributions are made to personal pension plans for other staff within the group
in some group companies the company contribution is dependent upon participating staff making a personal contribution
directors’ remuneration
salary performance benefits pension
and fees bonus in kind contributions 2005 2004
£ £ £ £ £ £
a l r morton 10000——— 10000 40000
p j coleman 287500 200000 27228 28750 543478 467228
j l pemberton 25000——— 25000 25000
a c s sweet 98750 — 6922 6876 112548 204242
421250 200000 34150 35626 691026 736470
mr morton has waived his entitlement to any further remuneration with effect from 1 april 2005 during the year the company entered
into an agreement with hawk consulting limited for mr morton to supply consultancy services to the company mr morton is the owner
of hawk consulting limited and payments totalling £33750 were made to hawk consulting limited in 2005 for services rendered
the amount of £98750 paid to mr sweet includes a severance payment of £30000
mr morton and mr pemberton are nonexecutive directors and members of the audit and remuneration committees
directors’ service agreements
mr coleman and mr pemberton each has an agreement with the company capable of termination on twelve and three months’ notice respectively
in the event of a takeover of the company mr coleman’s notice period is increased to 24 months additionally he will be entitled
to a payment based on the capital appreciation of 5000000 ordinary shares above a base point of 90 pence per share
directors’ share options
the chief executive officer has options granted under the systems union group plc employee share option scheme 1999 the conditions
and status of the option grants are as follows
mr coleman was granted 2000000 super options on 13 december 2000 at 615 pence these options have all vested and are capable
of exercise in accordance with the “share options” note above in addition mr coleman has 500000 ordinary options granted on
18 march 2002 at 905 pence these options are capable of exercise between 18 march 2005 and 18 march 2012 systems union group plc annual report and accounts 2005 17
corporate governance
the directors are responsible for the company’s policy on corporate governance the company supports the principles of good governance
set out in the combined code on corporate governance
whilst the company is not required to comply with the provisions of the combined code it has chosen to make the following
voluntary disclosures
board and management reporting
the board currently comprises the chief executive officer the nonexecutive chairman and one other nonexecutive director and meets
regularly throughout the year the board has adopted a schedule of matters to be specifically reserved for its decision in accordance
with the provisions of the combined code
each operating company holds regular board of management meetings at which it considers its performance measured against
predetermined budgets the management continually update operating forecasts and analyse key performance indicators the board
carefully reviews a summary of these reports together with group consolidations and cash flows at its monthly meetings
directors’ remuneration
the board has established a remuneration committee comprising the chairman and the nonexecutive director details of the company’s
remuneration policy are contained in the remuneration report on page 16 the committee makes its decisions following consultation
with the chief executive officer and has access to external professional advice if required
accountability and audit
the board seeks to ensure that its annual report and financial statements provide a balanced and concise assessment of the group’s
position the board has established an audit committee comprising the chairman and the nonexecutive director this committee meets
as necessary and provides a forum for the nonexecutive directors to meet with the external auditor
internal control
the directors are responsible for the systems of internal control although no system of internal control can provide absolute assurance
against material misstatement or loss the group’s systems are designed to provide the directors with reasonable assurance that problems
are identified on a timely basis and dealt with appropriately effective management of risk across the whole group remains a priority
for the board the key elements of the group’s system of internal control are as follows
financial management
detailed annual budgets are prepared for the group and each operating company by the business managers these budgets are reviewed
and agreed by the board and actual performance is reported against these budgets on a regular basis the company has in place
documented authority levels for approving purchase orders invoices and all bank transactions further information concerning financial
risk management is detailed in note 17 of the financial statements
company management
the chief executive officer chairs a global management board for the group comprising the regional chief executives certain subsidiary
company directors and other group executives with global responsibilities for sales marketing services support product development
and finance additionally there are regular meetings of a product strategy forum where the future direction of the group’s product offerings
and routes to market are considered
quality management and accreditations
the group’s businesses are focused on meeting the highest levels of customer satisfaction quality procedures for the development
of the products services and maintenance support are documented and kept under constant review
systems union holdings limited’s management systems are certified bs en iso 90012000 and tickit for marketing and sale
of sunsystems application packages designed developed maintained and supported globally on open and proprietary computer
platforms in various national language versions and the provision of associated consulting and training
mis gmbh is a microsoft gold certified partner for business intelligence
pegasus software limited is a microsoft certified partner for software products
business risks and computer systems
the company has established controls and procedures over the security of the data held on its computer systems such arrangements
are tested regularly and reviewed the company has in place business continuity plans at key locations offsite emergency facilities
and appropriate insurance policies are in place
internal audit
the company has an internal audit function whose role is to provide independent verification to the board and to the management 
of the organisation’s daytoday compliance activities the audit plan used to control the scope and frequency of audits is riskbased
where any problems or opportunities for improvement are identified as the result of audits they are logged formally and followed
through to completion the internal audit function may also carry out adhoc reporting and investigations for the board or for individual
directors and managers 18 systems union group plc annual report and accounts 2005
corporate governance
corporate social responsibility
the company upholds ethical business practices while fostering a culture of openness and transparency both internally and externally
it has set up and has disseminated across the group policies and codes of conduct whose aim is to ensure compliance with law
and regulation it aims to avoid conflicts of interest maintain confidentiality and offer equal opportunities through fair employment policies
staff training and favourable working conditions
the company promotes employee sports and social activities including assisting with sponsorship of employee recommended events
in addition the company is a valued sponsor of a uk charity supporting disadvantaged children and young people
the company believes that environmentally friendly practices are an integral part of daytoday business operations it has an
environmental policy which is guided by the iso 14000 family of standards and by the united nations global compact all group
companies seek to maximise energy saving and recycling opportunities and to minimise waste and are committed to complying with 
the relevant environmental laws and regulations in each country in which they operate 
dialogue with institutional shareholders
the directors of the company together with their advisers hold regular meetings with the key institutional shareholders thereby helping
to ensure that there is a mutual understanding of objectives
going concern
after making due and careful enquiry the directors have formed a judgement at the time of approving the financial statements that there
is a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future
for this reason the directors continue to adopt a ‘going concern’ basis in preparing the financial statements systems union group plc annual report and accounts 2005 19
independent auditor’s report 
we have audited the group and parent company financial statements the ‘financial statements’ of systems union group plc for the year
ended 31 december 2005 which comprise the consolidated profit and loss account the consolidated and company balance sheets
the consolidated cash flow statement the consolidated statement of total recognised gains and losses and the reconciliation
of movements in shareholders’ funds and the related notes these financial statements have been prepared under the accounting
policies set out therein
this report is made solely to the company’s members as a body in accordance with section 235 of the companies act 1985 our audit
work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor’s
report and for no other purpose to the fullest extent permitted by law we do not accept or assume responsibility to anyone other than
the company and the company’s members as a body for our audit work for this report or for the opinions we have formed
respective responsibilities of directors and auditors
the directors’ responsibilities for preparing the annual report and accounts and the financial statements in accordance with applicable
law and uk accounting standards uk generally accepted accounting practice are set out in the statement of directors’ responsibilities
on page 15
our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and international
standards on auditing uk and ireland
we report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance
with the companies act 1985 we also report to you if in our opinion the directors’ report is not consistent with the financial statements
if the company has not kept proper accounting records if we have not received all the information and explanations we require for our
audit or if information specified by law regarding directors’ remuneration and other transactions is not disclosed
we read other information contained in the annual report and accounts and consider whether it is consistent with the audited financial
statements we consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies
with the financial statements our responsibilities do not extend to any other information
basis of audit opinion
we conducted our audit in accordance with international standards on auditing uk and ireland issued by the auditing practices board
an audit includes examination on a test basis of evidence relevant to the amounts and disclosures in the financial statements it also
includes an assessment of the significant estimates and judgments made by the directors in the preparation of the financial statements
and of whether the accounting policies are appropriate to the group’s and company’s circumstances consistently applied and
adequately disclosed
we planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order
to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement
whether caused by fraud or other irregularity or error in forming our opinion we also evaluated the overall adequacy of the presentation
of information in the financial statements
opinion
in our opinion the financial statements
 give a true and fair view in accordance with uk generally accepted accounting practice of the state of the group’s and the parent
company’s affairs as at 31 december 2005 and of the group’s profit for the year then ended and
 have been properly prepared in accordance with the companies act 1985
kpmg audit plc
chartered accountants
registered auditor
reading
27 february 2006
to the members of systems union group plc 20 systems union group plc annual report and accounts 2005
consolidated profit and loss account
restated
2005 2004
note £000 £000
turnover 1 2 113354 104230
total operating expenses 3 104924 99343
ebitda from ongoing activities 16525 14212
restructuring and similar charges — 1946
ebitda 16525 12266
depreciation 2376 2097
amortisation – licences — 58
– goodwill 5719 5224
operating profit 8430 4887
net interest 6 241 273
profit on ordinary activities before taxation 8189 4614
taxation on profit on ordinary activities 7 1244 689
profit on ordinary activities after taxation 6945 3925
dividends 8 2260 1457
retained profit for the financial year 4685 2468
earnings per share 9
– basic 69p 40p
– diluted 67p 39p
adjusted earnings 9 12664 11095
adjusted earnings per share 9
– basic 126p 114p
– diluted 122p 110p
all results relate to continuing operations in the current and previous year
there is no material difference between the retained profit for the year stated above and its historical cost equivalent
the restatement of the prior year results relates to the new accounting treatment for dividends as required by financial reporting
standard no 21
for the year ended 31 december 2005 systems union group plc annual report and accounts 2005 21
consolidated balance sheet 
restated
2005 2004
note £000 £000
fixed assets
intangible assets 10 90210 93682
tangible assets 11 7650 6447
97860 100129
current assets
debtors 13 36553 29413
cash at bank and in hand 24033 16469
60586 45882
creditors amounts falling due within one year 14 20693 20867
net current assets 39893 25015
total assets less current liabilities 137753 125144
creditors amounts falling due after more than one year 15 15000 15000
provisions for liabilities and charges 16 2096 2470
deferred income 27657 22202
net assets 93000 85472
capital and reserves
called up share capital 18 5489 5368
share premium 19 12973 11378
interest in own shares 19 5502 5546
merger reserve 19 40627 44163
warrant reserve 19 265 1218
revaluation reserve 19 1245 —
profit and loss account 19 37903 28891
shareholders’ funds 93000 85472
these financial statements were approved by the board of directors on 27 february 2006 and were signed on its behalf by
p j coleman
chief executive officer
as at 31 december 2005 22 systems union group plc annual report and accounts 2005
company balance sheet 
restated
2005 2004
note £000 £000
fixed assets
intangible assets 10 586 703
tangible assets 11 471 333
investments 12 82174 81710
83231 82746
current assets
debtors 13 5938 12648
cash at bank and in hand 14225 7195
20163 19843
creditors amounts falling due within one year 14 10069 6789
net current assets 10094 13054
total assets less current liabilities 93325 95800
creditors amounts falling due after more than one year 15 15000 15000
net assets 78325 80800
capital and reserves
called up share capital 18 5489 5368
share premium 19 12973 11378
interest in own shares 19 5250 5250
merger reserve 19 58315 58315
warrant reserve 19 265 1218
revaluation reserve 19 130 —
profit and loss account 19 6403 9771
shareholders’ funds 78325 80800
these financial statements were approved by the board of directors on 27 february 2006 and were signed on its behalf by
p j coleman
chief executive officer
as at 31 december 2005 systems union group plc annual report and accounts 2005 23
consolidated cash flow statement 
2005 2004
note £000 £000
operating profit 8430 4887
amortisation – licences — 58
– goodwill 5719 5224
depreciation 2376 2097
loss on sale of fixed assets 68 328
16593 12594
movement in working capital 22 3126 453
cash inflow from operating activities 13467 12141
returns on investments and servicing of finance 23 241 246
taxation 354 289
purchase of tangible fixed assets 2463 2520
sale of tangible fixed assets 89 —
acquisitions 23 2427 12304
dividends paid 2260 1457
cash inflowoutflow before financing 5811 4675
financing 23 1753 1498
increasedecrease in cash in the year 7564 3177
cash at 1 january 2005 16469 19646
cash at 31 december 2005 24033 16469
for the year ended 31 december 2005 24 systems union group plc annual report and accounts 2005
consolidated statement of total recognised gains  losses 
2005 2004
£000 £000
profit for the financial year 6945 3925
gain on revaluation of properties 1245 —
exchange adjustments 155 242
total recognised gains and losses relating to the financial year 8035 3683
restated
2005 2004
£000 £000
profit for the financial year 6945 3925
dividends 2260 1457
retained profit for the financial year 4685 2468
other recognised gains and losses relating to the year 1090 242
new share capital subscribed 1716 1485
transfer of ownership in interest in own shares 37 1792
net addition to shareholders’ funds 7528 5503
shareholders’ funds at 1 january 2005 originally £83972000 before prior year adjustment 
of £1500000 as described in note 19 85472 79969
shareholders’ funds at 31 december 2005 93000 85472
for the year ended 31 december 2005
reconciliation of movements in shareholders’ funds 
for the year ended 31 december 2005 systems union group plc annual report and accounts 2005 25
notes to the accounts
1 accounting policies
the following accounting policies have been applied consistently in dealing with items which are considered material in relation
to the group’s financial statements
a basis of preparation
the financial statements have been prepared in accordance with generally accepted accounting principles in the united kingdom
uk gaap and under the historical cost convention with the exception of the revaluation of certain tangible fixed assets
b changes in accounting policies
in these financial statements the group has adopted frs 21 ‘events after the balance sheet date’ frs 22 ‘earnings per share’
the presentation requirements of frs 25 ‘financial instruments presentation and disclosure’ and frs 28 ‘corresponding amounts’
the adoption of each of these standards represents a change in accounting policy and the comparative figures have been restated
accordingly frs 28 ‘corresponding amounts’ has had no material effect as it imposes the same requirements for comparatives
as hitherto required by the companies act 1985
the accounting policies under these new standards are set out below together with an indication of the effects of their adoption note 8
c basis of consolidation
the consolidated financial statements include the financial statements of the company and its subsidiary undertakings made up to
31 december 2005 the acquisition method of accounting has been adopted
under this method the results of subsidiary undertakings acquired or disposed of in the year are included in the consolidated profit
and loss account from the date of acquisition or up to the date of disposal
under section 2304 of the companies act 1985 the company is exempt from the requirement to present its own profit and loss account
d goodwill and intangible assets
intangible assets are stated at cost to the extent that the carrying value exceeds the recoverable amount an impairment loss is recognised
in the profit and loss account
purchased goodwill representing the excess of the fair value of the consideration given and associated costs over the fair value
of the separable net assets acquired arising on consolidation of acquisitions is reviewed on a case by case basis and is capitalised
and amortised to nil by equal annual instalments over its estimated useful life
licences are included at cost and amortised in equal annual instalments over their licence terms
e investments
in the company’s financial statements investments in subsidiary undertakings are stated at cost to the extent that the carrying value
exceeds the recoverable amount an impairment loss is recognised in the profit and loss account
f tangible fixed assets and depreciation
office equipment leasehold improvements and motor vehicles are stated at historic cost less accumulated depreciation and any recognised
impairment losses
land and buildings are stated at revalued cost less any subsequent accumulated depreciation and subsequent accumulated impairment
losses the revalued cost is the fair value at the date of revaluation determined from marketbased evidence by appraisal undertaken
by professional valuers
any revaluation increase arising on the revaluation of land and buildings is credited to the property revaluation reserve except to the
extent it reverses a revaluation decrease for the same asset previously recognised as an expense in which case the increase is credited
to the profit and loss account to the extent of the decrease previously charged a decrease in carrying amount arising on the revaluation
of such land and buildings is charged as an expense to the extent that it exceeds the balance if any held in the properties revaluation
reserve relating to a previous revaluation of that asset
to the extent that the revised depreciation charge exceeds the historic cost charge the additional cost taken to the profit and loss account
will be offset by a transfer from the revaluation reserve to the profit and loss reserve
on the subsequent sale of revalued land and buildings the attributable revaluation surplus remaining in reserves is transferred directly
to accumulated profits
depreciation is provided to write off the cost less the estimated residual value of tangible fixed assets by equal annual instalments over
their estimated useful economic lives as follows
freehold buildings – 50 years
leasehold improvements – period of lease
office equipment – two to four years
motor vehicles – four years
no depreciation is provided on freehold land 26 systems union group plc annual report and accounts 2005
notes to the accounts
1 accounting policies continued
g foreign currencies
transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction monetary assets and liabilities
denominated in foreign currencies are translated using the rate of exchange ruling at the balance sheet date and the gains or losses
on translation are included in the profit and loss account
the assets and liabilities of overseas subsidiary undertakings are translated at the closing exchange rates profit and loss accounts of such
undertakings are consolidated at the average rates of exchange during the year gains and losses arising on these translations are taken
to reserves
h leases
assets acquired under finance leases are capitalised and the outstanding future lease obligations are included in liabilities operating lease
rentals are charged to the profit and loss account on a straightline basis over the period of the lease
i cash and liquid resources
cash and liquid resources for the purposes of the cash flow statement comprise cash in hand and deposits repayable on demand
j pension costs
the group operates a number of defined contribution pension schemes the assets of the schemes are held separately from those
of the group in independently administered funds the amount charged to the profit and loss account represents the contributions
payable to the schemes in respect of the accounting period
k turnover
turnover represents the amounts excluding value added tax derived from the provision of goods and services to third party customers
revenue from licence fees is recognised on the later of delivery or contract provided no significant future obligation exists income from
maintenance services is recognised on a straightline basis over the period to which the maintenance agreement relates revenue not
recognised in the profit and loss account under this policy is classified as deferred income in the balance sheet revenue from professional
services is recognised as the work is performed
l research and development expenditure
expenditure on research and development is charged to the profit and loss account in the year in which it is incurred
m taxation
deferred tax is accounted for under frs 19 which requires a form of full provision for accounting for deferred tax called the incremental
liability approach deferred tax is provided on all timing differences where the group has an obligation to pay more tax in the future
as a result of those timing differences deferred tax assets are only recognised if it is considered more likely than not that there
will be suitable profits from which the future reversal of the underlying timing differences can be deducted
n employee share schemes
the cost of awards to employees that take the form of shares or rights to shares is recognised over the period of the employee’s related
performance the cost represents the difference between the option exercise price and the market value of the shares at the date of
the grant of the option where there are no performance criteria the cost is recognised when the employee becomes unconditionally
entitled to the shares no provision is made for employer’s nic associated with any gains on vested share options on the basis that this
expense is recoverable from the employee
2 segmental analysis
the directors consider there to be only one class of business being the development and distribution of business software
a the geographical analysis of turnover is given below
2005 2004
£000 £000
uk and ireland 43999 42116
central and eastern europe middle east and africa 37321 36050
europe middle east and africa 81320 78166
the americas 13075 10671
asia pacific 18959 15393
113354 104230
b an analysis by turnover type is given below
2005 2004
£000 £000
licence 31501 28746
maintenance 48594 45383
services 33259 30101
113354 104230
the geographical analysis of turnover is presented on the basis of the destination of the sales this follows the group’s management
structure and reporting the 2004 comparatives have been restated accordingly systems union group plc annual report and accounts 2005 27
3 total operating expenses
2005 2004
£000 £000
staff costs note 5 61153 56506
depreciation 2376 2097
amortisation of intangible fixed assets 5719 5282
other operating expenses 35676 35458
104924 99343
included in total operating expenses is expenditure on research and development of £14172000 2004 £14243000
2005 2004
£000 £000
other operating expenses include
auditors remuneration – group audit 301 316
– company audit 30 30
– other fees paid to the auditors 112 77
exchange gains net 8 195
operating lease rentals land and buildings 4670 4607
operating lease rentals other assets 1034 1610
4 directors’ remuneration and shareholdings
information covering directors’ remuneration including pension entitlements interest in shares and share options is included in the directors’
report on pages 13 to 15 and the remuneration report on page 16
5 staff numbers and costs
the average number of persons employed by the group including directors during the year analysed by category was as follows
number of employees
2005 2004
sales 574 523
support 172 139
research and development 339 333
management and administration 303 257
1388 1252
the aggregate payroll costs of these persons were as follows
2005 2004
£000 £000
wages and salaries 53475 47838
social security costs 6145 7185
other pension costs 1533 1483
61153 56506
6 net interest payable
2005 2004
£000 £000
bank interest receivable 596 494
bank interest payable 837 767
241 273 28 systems union group plc annual report and accounts 2005
notes to the accounts
7 taxation
a analysis of charge
2005 2004
£000 £000
current tax
uk corporation tax
current tax on income for the year 325 —
double taxation relief 189 —
uk corporation tax charge 136 —
foreign tax
current tax on income for the year 1565 533
adjustments in respect of prior years 46 —
foreign tax charge 1611 533
total current tax charge 1747 533
deferred tax
origination and reversal of timing differences 503 156
total tax charge 1244 689
b factors affecting tax charge
the current tax charge for the year is lower 2004 lower than the standard rate of corporation tax in the uk of 30 2004 30
the differences are explained below
2005 2004
£000 £000
profit on ordinary activities before taxation 8189 4614
profit on ordinary activities multiplied by standard rate of corporation tax in the uk of 30 2004 30 2457 1384
effect of
charges not deductible for tax purposes 1624 1352
capital allowances in excess of depreciation 80 184
utilisation of tax losses 1950 1967
lower tax rates on overseas earnings 350 52
prior period adjustments 46 —
current tax charge for the year 1747 533
primarily amortisation of goodwill
certain united kingdom subsidiaries have trading losses which as at 31 december 2005 amounted to £14 million 2004 £40 million
which are available for offset against future trading income there are further losses available to certain overseas subsidiaries amounting
to £248 million 2004 £286 million deferred tax assets of £1242000 2004 £739000 have been recognised in respect of the timing
differences arising from trading losses based on the directors’ assessment of suitable profits arising in the relevant statutory companies
in the future
8 dividends
the aggregate amount of dividends comprises
restated
2005 2004
£000 £000
final dividend of 15 pence per share paid in respect of prior year but not recognised 
as a liability in that year 2004 10 pence 1499 965
interim dividend of 075 pence per share paid in respect of the current year 2004 05 pence 761 492
aggregate amount of dividends paid in the financial year 2260 1457
the aggregate amount of dividends proposed and recognised as liabilities as at the year end is £nil 2004 £nil
the directors are proposing a final dividend in respect of the financial year ending 31 december 2005 of 175 pence per share
2004 15 pence per share which will absorb an estimated £18 million of shareholders’ funds it will be paid on 23 may 2006
to shareholders on the register on 21 april 2006
the group has adopted frs 21 ‘events after the balance sheet date’ in these financial statements dividends are recognised when
they have been paid or approved at the annual general meeting dividends declared after the balance sheet date are not recognised
as a liability at the balance sheet date this represents a change in accounting policy and the comparative figures have been restated
accordingly the impact of this adjustment is to increase shareholders’ funds at 31 december 2004 by £1500000 systems union group plc annual report and accounts 2005 29
9 earnings per share
the calculation of the basic earnings per share is based on the profit on ordinary activities after taxation divided by the weighted average
number of shares in issue during the year
a adjusted earnings is calculated as follows
2005 2004
£000 £000
profit on ordinary activities after taxation 6945 3925
amortisation of goodwill 5719 5224
restructuring and similar charges — 1946
adjusted earnings for the financial year 12664 11095
b number of shares in thousands
2005 2004
weighted average number of shares – used to calculate basic earnings per share 100585 97533
effect of dilutive share options 3143 3390
number of shares used to calculate diluted earnings per share 103728 100923
the weighted average number of shares used in the earnings per share calculation exclude the 77 million shares in which the company
has an interest 2004 78 million
adjusted earnings per share has been disclosed on the profit and loss account as the directors consider it to be the appropriate
reflection of the underlying earnings of the group
10 intangible fixed assets
licences goodwill total
group £000 £000 £000
cost
at 1 january 2005 1335 125118 126453
additions — 2077 2077
adjustments — 183 183
at 31 december 2005 1335 127378 128713
amortisation and impairment
at 1 january 2005 1335 31436 32771
charge for the year — 5719 5719
adjustment —1313
at 31 december 2005 1335 37168 38503
net book value
at 1 january 2005 — 93682 93682
at 31 december 2005 — 90210 90210
during 2005 the company has reviewed the fair value adjustments relating to acquisitions made in 2004 the result is an increase in goodwill
of £170000
goodwill is amortised over 20 years
licences
company £000
cost
at 1 january 2005 and 31 december 2005 1250
amortisation
at 1 january 2005 547
charge for the year 117
at 31 december 2005 664
net book value
at 1 january 2005 703
at 31 december 2005 586 30 systems union group plc annual report and accounts 2005
notes to the accounts
11 tangible fixed assets
land and leasehold motor office
buildings improvements vehicles equipment total
group £000 £000 £000 £000 £000
cost
at 1 january 2005 2471 1240 171 13442 17324
additions —101223602463
subsidiary undertakings acquired — — — 44 44
other adjustments — — — 54 54
revaluations 780——— 780
disposals —17123619759
exchange differences 1 27 4 150 180
at 31 december 2005 3250 1351 54 15323 19978
depreciation
at 1 january 2005 409 605 33 9830 10877
charge for the year 60 138 18 2160 2376
disposals —1727558602
revaluations 465 — — — 465
exchange differences — 26 — 116 142
at 31 december 2005 4 752 24 11548 12328
net book value
at 1 january 2005 2062 635 138 3612 6447
at 31 december 2005 3246 599 30 3775 7650
land and office
buildings equipment total
company £000 £000 £000
cost
at 1 january 2005 361 49 410
additions —2121
revaluations 89 — 89
at 31 december 2005 450 70 520
depreciation
at 1 january 2005 28 49 77
charge for the year 13 — 13
revaluations 41 — 41
at 31 december 2005 —4949
net book value
at 1 january 2005 333 — 333
at 31 december 2005 450 21 471
the net book value of land and buildings comprises
group company
2005 2004 2005 2004
£000 £000 £000 £000
freehold 3246 2062 450 333
the property situated at orion house kettering northants and occupied by pegasus software limited was revalued on 23 august 2005
by stephen edwards frics of barnes noble edwards limited property consultants the valuation on an existing use basis is £2800000
the property situated at oakfield industrial estate eynsham oxford and occupied by red technology services limited was revalued
on 25 november 2005 by andrew lockhart frics of venables sherrott lockhart and partners commercial property consultants
the market valuation was £450000
the gains on revaluation of the land and buildings have been taken to the revaluation reserve in shareholders’ funds see note 19 systems union group plc annual report and accounts 2005 31
12 fixed asset investments
shares in subsidiary undertakings
company £000
cost
at 1 january 2005 105922
additions 464
at 31 december 2005 106386
amounts written off at 1 january 2005 and 31 december 2005 24212
net book value
at 1 january 2005 81710
at 31 december 2005 82174
the additions during the year represent the costs associated with the acquisition of minority shares in mis ag
the principal whollyowned subsidiary undertakings of systems union group plc at 31 december 2005 were as follows
country of incorporationregistration
systems union holdings limited england and wales
pegasus group plc england and wales
fns group limited england and wales
the shares in the following whollyowned subsidiary undertakings were held indirectly by systems union group plc at 31 december 2005
country of incorporationregistration
systems union sa argentina 
lasata pty ltd australia
systems union pty limited australia 
mis ag australia pty limited australia
systems union ltda brazil 
systems union shanghai limited china
foundation systems limited england and wales
pegasus software limited england and wales
red technology services limited england and wales 
ncsoft limited england and wales
systems union limited england and wales 
mis uk limited england and wales
systems union sarl france 
systems union gmbh germany 
systems union limited hong kong
systems union ireland limited ireland
systems union srl italy
mis ag italia srl italy
systems union limited japan 
eclipse computing japan limited japan
systems union mexico sa de cv mexico 
servicios systems union mexico sa de cv mexico
systems union inc nwt canada 
systems union inc ontario canada
systems union software pte limited singapore 
systems union iberica sl spain 
mis spain sl spain
systems union software thailand limited thailand
systems union inc usa 
systems union group plc owned 9527 of the equity share capital of mis ag at 31 december 2005
the principal whollyowned subsidiaries of mis ag at 31 december 2005 were as follows
country of incorporationregistration
mis austria gmbh austria
mis ag sro czech republic
mis gmbh germany
mis schweiz ag switzerland
the above companies operated principally in their countries of incorporationregistration
the principal activity of the trading subsidiary undertakings is the development and distribution of financial and performance management
software solutions and associated services 32 systems union group plc annual report and accounts 2005
notes to the accounts
13 debtors
group company
2005 2004 2005 2004
£000 £000 £000 £000
trade debtors 28224 22247 — —
amounts owed by group undertakings — — 5405 12288
other debtors 2164 3224 100 272
prepayments and accrued income 4923 3203 433 88
deferred tax asset note 16a 1242 739 — —
36553 29413 5938 12648
all debtors are due within one year
14 creditors amounts falling due within one year
group company
restated restated
2005 2004 2005 2004
£000 £000 £000 £000
trade creditors 4958 4511 105 187
amounts owed to group undertakings — — 9212 5911
corporate taxation 1436 833 — —
other tax and social security 3961 3224 42 38
other creditors 2337 5475 163 189
accruals 8001 6824 547 464
20693 20867 10069 6789
15 creditors amounts falling due after more than one year
group company
2005 2004 2005 2004
£000 £000 £000 £000
bank loans falling due
in more than one year but less than two years 15000 15000 15000 15000
the bank loan comprises a £150 million multicurrency facility with barclays bank plc which is repayable in october 2007 previously
october 2006 the facility is fully drawn down and attracts interest at libor plus a variable margin set by reference to a gearing ratio
the margin currently being charged is 60 basis points the facility is secured by fixed and floating charges on the assets of the principal
uk trading companies
16 provisions for liabilities and charges
a the deferred tax asset provided in the accounts comprises
2005 2004
group £000 £000
tax losses carried forward 1204 631
other timing differences 38 108
1242 739
b analysis of movement in the year
group
£000
deferred tax asset at 1 january 2005 739
deferred tax credit for the year note 7a 503
deferred tax asset at 31 december 2005 1242 systems union group plc annual report and accounts 2005 33
16 provisions for liabilities and charges continued
c other provisions
other
restructuring taxation provisions total
group £000 £000 £000 £000
at 1 january 2005 869 977 624 2470
utilised during year 669 — 147 816
other movements 54 25 7 36
charge for year — 478 — 478
at 31 december 2005 146 1480 470 2096
17 financial instruments and risk management
financial instruments
the group’s financial instruments comprise cash and liquid resources bank loans and an interest in own shares together with various
items such as trade debtors and trade creditors that arise directly from its operations the main purpose of these financial instruments
is to fund the group’s operations as well as to manage working capital and liquidity
the main risks arising from the group’s financial instruments are liquidity risk foreign currency risk interest rate risk and market price risk
the group monitors these risks through a central treasury management function which invests surplus funds and manages borrowings
liquidity risk
the group finances its operations through a combination of retained profits new equity and intercompany loans the group started
the year with £165 million 2004 £196 million in cash and liquid resources at 31 december the group’s cash and liquid resources
were £240 million 2004 £165 million the group continues to monitor its liquidity position through detailed cash forecasting
foreign currency risk
the group’s principal exposure to foreign currency risk arises on the translation of overseas net assets and profits or losses into sterling
for group accounting purposes the exposure is reviewed periodically to minimise the risk of any exchange movements having a material
impact on operating profit the balance sheet exposure is not significant to the overall consolidated net asset position but the position
is monitored with a view to matching nonsterling assets and borrowings
interest rate risk
the group’s borrowings at 31 december 2005 comprise the £150 million mediumterm loan which attracts interest at libor plus a margin
note 15 the interest rate at 31 december 2005 was 52 2004 55 the average interest rate for 2005 was 55 2004 51
market price risk
in addition to interest rate and foreign currency risks the group is exposed to market price risk relating to its interest in its own shares note 19
financial assets
there were no fixed rate deposits at 31 december 2005 or 31 december 2004
surplus cash is invested by group treasury in institutional liquidity funds which achieve above average market rates of return without
compromising capital protection the funds are readily accessible
the average interest rate earned during 2005 was 47 2004 45 the fair value of the financial assets approximates to their book values
financial liabilities
the group’s financial liabilities other than trade and other creditors and accruals at 31 december 2005 comprise the mediumterm
£150 million multicurrency facility which is described in note 15 34 systems union group plc annual report and accounts 2005
notes to the accounts
18 share capital
2005 2005 2004 2004
number £000 number £000
authorised
equity ordinary shares of 5 pence each 200000000 10000 200000000 10000
allotted called up and fully paid
equity ordinary shares of 5 pence each 109772928 5489 107365416 5368
during the year 2407512 ordinary shares were issued at an aggregate nominal value of £121000 and at a premium of £1595000
as a result of exercise of share options
share option schemes
at 31 december 2005 the following options over ordinary shares of the company granted to employees were outstanding
systems union group plc employee share option scheme 1999
ordinary options
date of grant number of shares exercise period exercise price pence
27 june 2000 168500 27 june 2003 – 27 june 2010 630
26 october 2000 1210400 26 october 2003 – 26 october 2010 515
7 november 2000 80000 7 november 2003 – 7 november 2010 530
20 december 2000 253000 20 december 2003 – 20 december 2010 705
3 january 2001 75000 3 january 2004 – 3 january 2011 675
6 april 2001 575000 6 april 2004 – 6 april 2011 635
26 june 2001 63500 26 june 2004 – 26 june 2011 625
28 november 2001 306000 28 november 2004 – 28 november 2011 825
18 march 2002 550500 18 march 2005 – 18 march 2012 905
18 december 2003 809834 18 december 2006 – 18 december 2013 1000
25 august 2004 50000 25 august 2007 – 25 august 2014 875
25 november 2004 50000 25 november 2007 – 25 november 2014 1095
22 december 2004 50000 22 december 2007 – 22 december 2014 1155
9 march 2005 175000 9 march 2008 – 9 march 2015 1155
4416734
super options
date of grant number of shares options vested exercise price pence
13 december 2000 2000000 2000000 615
18 may 2001 685884 685884 770
28 november 2001 93750 93750 825
18 march 2002 150000 150000 905
18 december 2003 250000 166665 1000
25 august 2004 50000 16666 875
25 november 2004 50000 16665 1095
22 december 2004 50000 16665 1155
3329634 3146295
the vesting and exercise criteria for super options are noted in the remuneration report on page 16 of the report the number of options
vested as detailed above are correct as at the date of this report
systems union group limited employee share scheme
date of grant number of shares exercise period exercise price pence
7 may 1999 125355 3 may 2000 – 7 may 2009 1080
1 april 2000 105515 3 may 2000 – 1 april 2010 1080
230870
total of options outstanding 
to employees and exemployees 
including directors 7977238
other share options
in addition there are 500000 options outstanding which were issued pursuant to the acquisition of lasata pty ltd the options are
exercisable at a price of £110 between 31 december 2006 and 30 june 2014 the option holder has to elect by 8 december 2006
whether to retain the options or surrender them for £175000 in cash or 159091 shares systems union group plc annual report and accounts 2005 35
19 share premium and reserves
share 
premium interest in merger warrant revaluation profit and 
account own shares reserve reserve reserve loss account
group £000 £000 £000 £000 £000 £000
at 1 january 2005 11378 5546 44163 1218 — 27391
prior year adjustment ————— 1500
at 1 january 2005 restated 11378 5546 44163 1218 — 28891
retained profit for the financial year ————— 4685
premium on share issues 1595—————
transfers ——3536953—4489
transfer of ownership in interest in own shares — 44——— 7
revaluation on land and buildings ———— 1245 —
exchange adjustments ————— 155
at 31 december 2005 12973 5502 40627 265 1245 37903
share 
premium interest in merger warrant revaluation profit and 
account own shares reserve reserve reserve loss account
company £000 £000 £000 £000 £000 £000
at 1 january 2005 11378 5250 58315 1218 — 8271
prior year adjustment ————— 1500
at 1 january 2005 restated 11378 5250 58315 1218 — 9771
retained profit for the year ————— 4321
transfers — — — 953 — 953
revaluation on land and buildings ———— 130 —
premium on share issues 1595—————
at 31 december 2005 12973 5250 58315 265 130 6403
interest in own shares
the group has an interest in 77 million 2004 78 million of its own shares which is carried at £5502000 2004 £5546000 the market
value of this interest at 31 december 2005 at 1315 pence per share 2004 1155 pence per share was £10170000 2004 £8979000
the company has an interest in 75 million 2004 75 million of its own shares which is carried at £53 million 2004 £53 million
the market value of this interest at 31 december was £9863000 2004 £8663000
prior year adjustment
the adoption of frs 21 has resulted in an increase in shareholders’ funds of £1500000 at 31 december 2004 due to the writeback
of the dividend proposed at 31 december 2004
revaluation reserve
the movement on the revaluation reserve results from the revaluation of land and buildings as detailed in note 11 36 systems union group plc annual report and accounts 2005
notes to the accounts
20 commitments
a the group and company have no contracted capital commitments at 31 december 2005
b annual commitments under noncancellable operating leases are as follows
2005 2004
land and land and
buildings other buildings other
group £000 £000 £000 £000
operating leases which expire
within one year 1023 97 749 137
in the second to fifth years inclusive 1497 744 1917 503
after five years 2264 — 2244 8
total annual amount payable 4784 841 4910 648
2005 2004
land and land and
buildings other buildings other
company £000 £000 £000 £000
operating leases which expire
within one year —7 —25
in the second to fifth years inclusive —11 —45
total annual amount payable —18 —70
21 acquisitions
purchase of subsidiary undertakings
eclipse
computing 
mis spain sl japan limited total
£000 £000 £000
provisional fair values of consideration given
cash 270 305 575
deferred cash consideration — 830 830
acquisition costs 11 83 94
281 1218 1499
provisional fair value of net liabilities acquired
net cashbank loans acquired 47 21 26
other net liabilitiesassets acquired 54 2 52
goodwill 288 1237 1525
mis spain sl
on 27 june 2005 the group completed the acquisition of mis spain sl for a consideration of £270000 and incurred other acquisition
costs of £11000 the total goodwill arising on acquisition was £288000
eclipse computing japan limited
on 5 august 2005 the group completed the acquisition of eclipse computing japan limited and the sunsystems customer bases
of the eclipse group subsidiaries in hong kong thailand malaysia and singapore the total goodwill arising on acquisition was £1237000
mis ag
following the acquisition of the 473 minority interest the group owns 100 of the equity share capital in mis ag the minority interest
at 31 december 2005 and 2004 is in the opinion of the directors not material and has been presented under other creditors within
creditors amounts falling due within one year
22 movement in working capital
2005 2004
£000 £000
increasedecrease in debtors 5890 394
decrease in creditors 1109 3146
increase in deferred income 4750 1347
decreaseincrease in provisions 877 952
movement in working capital 3126 453 systems union group plc annual report and accounts 2005 37
23 analysis of cash flows
2005 2004
£000 £000
returns on investment and servicing of finance
interest received 589 494
interest paid 830 740
net cash outflow from returns on investment and servicing of finance 241 246
financing
issue of ordinary share capital 1716 1485
transfer of ownership of interest in own shares 37 89
repayment of bank loans — 76
net cash inflow from financing 1753 1498
acquisitions
purchase of subsidiary undertakings 2453 13003
net cash acquired with subsidiary undertakings 26 699
net cash outflow from acquisitions 2427 12304
the total cash outflow on the purchase of subsidiary undertakings of £2453000 comprises the cash consideration on 2005 acquisitions
of £669000 and the payment of deferred consideration and legal costs on 2004 acquisitions of £1784000
24 analysis of changes in net cash
1 january exchange 31 december 
2005 acquisitions cash flows movements 2005
£000 £000 £000 £000 £000
net cash 16469 160 7424 20 24033
bank debt 15000 134 134 — 15000
total net cash 1469 26 7558 20 9033
25 reconciliation of increasedecrease in cash to movement in net funds
2005 2004
£000 £000
increasedecrease in cash 7564 3177
cash flow from change in debt 134 76
change in net funds resulting from cash flows 7698 3101
loans acquired with subsidiary undertakings 134 —
movement in net funds 7564 3101
net funds at 1 january 1469 4570
net funds at 31 december 9033 1469
26 pension scheme
the group operates a number of defined contribution pension schemes the pension cost charge for the year represents contributions
payable by the group to the schemes and amounted to £1533000 2004 £1483000
contributions amounting to £147441 2004 £174279 were payable to the schemes at 31 december and are included in creditors 38 systems union group plc annual report and accounts 2005
notice of annual general meeting
notice is hereby given that the annual general meeting of systems union group plc “the company” will be held at the registered office
of the company at systems union house 1 lakeside road aerospace centre farnborough hampshire gu14 6xp on 27 april 2006 at 1230 pm
to transact the following business
ordinary business
1 to receive and consider the report of the directors and audited accounts of the company for the year ended 31 december 2005 together
with the independent auditor’s report
2 to declare a final ordinary dividend of 175 pence per share
3 to reelect john leyland pemberton who retires by rotation pursuant to article 921 of the company’s articles of association and who
being eligible offers himself for reelection as a director
4 to reappoint kpmg audit plc as auditors and to authorise the directors to fix their remuneration
special business
to consider and if thought fit to pass resolution 5 as an ordinary resolution
5 that the directors be and they are hereby authorised in substitution for any other authority previously conferred upon them generally
and unconditionally pursuant to section 80 of the companies act 1985 “the act” to exercise all the powers of the company to allot relevant
securities as defined in section 802 of the act up to an aggregate nominal amount of £1831115 being 333 of the total nominal value
of the shares in issue at the date of this notice provided that
i this authority shall expire 15 months from the date of this resolution or at the annual general meeting of the company to be held
in 2007 if earlier unless previously revoked or varied by the company in general meeting or
ii the company may before such expiry make an offer agreement or arrangement which would or might require relevant securities
to be allotted after such expiry and the directors may allot relevant securities pursuant to any such offer agreement or other
arrangement as if the authority hereby conferred had not expired
to consider and if thought fit to pass the following resolutions 6 7 and 8 as special resolutions
6 that subject to the passing of ordinary resolution 5 above the directors be and are hereby empowered pursuant to section 951 of the act
and in substitution for all existing powers to allot equity securities as defined in section 94 of the act pursuant to the authority conferred
by ordinary resolution 5 above as if section 891 of the act did not apply to any such allotment provided that
i the allotment of equity securities in connection with any offer whether by way of rights open offer or otherwise as securities open
for acceptance for a period fixed by the directors to the holders of ordinary shares and such other equity securities of the company
as the directors may determine on the register on a fixed record date in proportion as nearly as may be to their respective holdings
of such securities or in accordance with the rights attached thereto subject to such exclusions or other arrangements as the directors
may deem necessary or expedient to deal with fractional entitlements that would otherwise arise or with legal or practical problems
under the laws or the requirement of any recognised regulatory body or any stock exchange in any territory or
ii any other allotment of equity securities up to an aggregate nominal value of £274667 being 5 of the total nominal value of the company’s
shares in issue as at the date of this notice
7 that the company be and is hereby generally and unconditionally authorised to make one or more market purchases within the meaning
of section 163 of the act on the london stock exchange of ordinary shares of 5 pence each in the capital of the company provided that
i the maximum number of ordinary shares which are authorised to be purchased shall be 11000000 representing approximately 10
of the company’s issued ordinary share capital
ii the minimum price which may be paid for such shares is 5 pence per share exclusive of expenses
iii the maximum price exclusive of expenses which may be paid for an ordinary share shall not be more than 5 above the average of such
share’s middle market quotation as derived from the alternative investment market of the london stock exchange aim for the five
business days immediately preceding the day on which the contract is entered into being days on which aim is open for the transaction
of business
the authority hereby conferred shall expire at the conclusion of the annual general meeting of the company to be held in 2007 or if earlier
15 months after the date of passing this resolution unless such authority is renewed varied or revoked prior to such time and the company
may make a contract to purchase ordinary shares under the authority hereby conferred prior to the expiry of such authority which will or may
be executed wholly or partly after the expiration of such authority and may make a purchase of ordinary shares pursuant to any such contract
8 that the articles of association of the company be adopted as amended and as summarised in the directors’ report on page 14 of the
report and accounts
by order of the board registered office
systems union house
1 lakeside road
aerospace centre
farnborough
p g larking hampshire gu14 6xp
secretary
27 february 2006
notes
1 a member entitled to attend and vote is entitled to appoint a proxy or proxies to attend and on a poll vote instead of himher a proxy need not be a member
of the company
2 a form of proxy is enclosed the appointment of a proxy will not prevent a shareholder from subsequently attending and voting at the meeting in person
3 to be effective the instrument appointing a proxy and the power of attorney or other authority if any under which it is signed or a copy of such authority
certified notarially or in some other way approved by the board shall be deposited at the offices of the company’s registrars capita registrars proxy
department the registry 34 beckenham road beckenham kent br3 4tu not less than 48 hours before the time of the holding of the meeting
4 copies of all contracts of service under which directors are employed by the company or any of its subsidiaries are available for inspection at the company’s
registered office during business hours on any weekday saturdays and public holidays excluded from the date of this notice until the conclusion of the
annual general meeting and will also be available for inspection at the place of the meeting from 15 minutes before it is held until its conclusion systems union group plc annual report and accounts 2005 39
form of proxy
iwe                                                                                                    
full names in block capitals
of                                                                                                      
                                                                                                       
address in block capitals
being members of the above named company hereby appoint the chairman of the meeting or failing him 
                                                                                                       
as myour proxy to vote for meus and on myour behalf at the annual general meeting of the company to be held at the registered
offices of the company at systems union house 1 lakeside road aerospace centre farnborough hants gu14 6xp on thursday
27 april 2006 at 1230 pm
please indicate with an ‘x’ in the space below how you wish your vote to be cast if the form is returned without any indication
as to how the proxy shall vote on any particular matter the proxy will vote as he or she thinks fit or abstain from voting at his
or her discretion
signature                                                         date                             2006
ordinary business for against
1 to receive the report of the directors and audited accounts for the period ended 31 december 2005 together 
with the report of the auditors                                                                 

2 to declare a final dividend of 175p per share                                                     

3 to reelect john leyland pemberton as a director who retires by rotation in accordance with the company’s 
articles of association and who being eligible offers himself for reelection                              

4 to reappoint kpmg audit plc as auditors of the company and to authorise the directors to fix their remuneration    

special business
5 to authorise the company to renew its authority in accordance with resolution 5 in the notice of annual 
general meeting                                                                            

6 that subject to passing resolution 5 to grant authority to the company to allot shares pursuant to section 95 
of the companies act 1985                                                                   

7 to authorise the company to make market purchases of the company’s shares in accordance with the conditions 
in resolution 7 in the notice of annual general meeting                                             

8 to adopt the articles of association of the company as amended and as summarised in the directors’ report 
on page 14 of the report and accounts                                                          

notes
1 if you wish to appoint some other person or persons please insert hishertheir names and addresses initial the insertion
and strike out the words ‘the chairman of the meeting’
2 unless otherwise instructed above the proxy will exercise his or her discretion both as to how he or she votes and as to whether
or not he or she abstains from voting on any resolutions proposed at the meeting
3 the proxy covers all shares held by a member unless the member indicates otherwise on this form if more than one proxy
is appointed the number of shares covered by each proxy must be stated
4 to be valid this form duly signed together with the power of attorney or other authority if any under which it is signed
or a notarially certified copy of such power or authority must be deposited at the offices of the registrars no later than 48 hours
before the time for holding the meeting
5 in the case of a corporation this form must be executed under its common seal or otherwise executed in accordance with
section 36a of the companies act 1985 as amended or it must be signed by an officer or attorney duly authorised in writing
6 any alterations to this form must be initialled
7 in the case of joint holders only one need sign but the names of all joint holders must be stated the vote of the senior holder
who tenders a vote shall be accepted to the exclusion of the votes of the other joint holders for this purpose seniority shall
be determined by the order in which the names stand in the register of members
systems union group plc annual general meeting
 capita registrars
proxy department
the registry
34 beckenham road
beckenham
kent br3 4br 
business reply service
licence no mb122
fold 2
fold 1
fold 3 and tuck in t he d esign p or tfolio
a member of the flathill communications group plc
wwwflathillplccom
designed  produced by
corporate statement
systems union group plc is the worlds leading provider and 
distributor of first class financial and performance management 
solutions to the midmarket 
the group is committed to designing and deploying solutions that equip 
its expanding global user community with the tools needed to understand 
manage and improve financial and wider business performance  
systems union has an international team of management staff and 
partners through which it delivers and supports its sunsystems mis 
vision pegasus redtechnology and ncsoft solutions
systems union – a truly global company
45 offices in 20 countries
in excess of 50000 global customer sites in 194 countries
over 500 partners around the world 05
global in reach scale and solutions
systems union group plc
systems union house 
1 lakeside road 
aerospace centre 
farnborough 
hampshire gu14 6xp 
united kingdom
telephone 44 01252 556000  
website wwwsystemsunioncom
sug anr 006
systems union group plc 
annual report and accounts
systems union group plc annual report and accounts


Summary:
 systems union group plc annual report and accounts 2005 01
corporate statement
1 highlights
2 chairman’s statement
4 chief executive officer’s review
12 directors and advisers
13 directors’ report 
15 statement of directors’ responsibilities
16 remuneration report
17 corporate governance
19 independent auditor’s report
20 consolidated profit and loss account
21 consolidated balance sheet
22 company balance sheet
23 consolidated cash flow statement
24 consolidated statement of total
recognised gains  losses
24 reconciliation of movement in
shareholders’ funds
25 notes to the accounts
38 notice of annual general meeting
39 form of proxy
revenue rose by 
9 to £1134m
ebitda ongoing activities 
rose by 16 to £165m
operating cash flow rose by 
11 to £135m
adjusted diluted eps rose by 
11 to 122p
05 £165m
04 £142m
03 £104m
05 £135m
04 £121m
03 £79m
05 122p
04 110p
0 3 93p
highlights
contents
 revenue increased by 9 6 organic to £1134 million
 h2 revenue was £597 million 2004 £532 million compared
to h1 £537 million 2004 £510 million representing growth
of 12 8 organic in h2 and 5 3 organic in h1 
 ebitda from ongoing activities increased by 16 to £165
million ebitda to revenue margin increased to 16 in h2
from 13 in h1
 profit before taxation increased by 77 to £82 million
 strong operating cash flow of £135 million 
2004 £121 million
 basic eps increased by 73 to 69p
 adjusted earnings increased by 14 to £127 million
 adjusted diluted eps increased by 11 to 122p
 final dividend of 175p proposed resulting in a total dividend
for the year of 25p 2004 20p
 eleventh consecutive half year in line with or ahead of 
market expectations 
 major new contracts across the entire product portfolio
including a large european retailer major insurance companies
in the usa sweden and south america multinational oil and
gas companies many global hotel chains several government
departments in the uk and central europe a leading international
fleet management operator leading real estate companies in
the usa and australia and one of the world’s largest accounting
practices in asia pacific
05 £1134m
04 £1042m
03 £784m