patsystems plc
annual report  accounts 2010
offices and addresses
europe
london
riverside house
2a southwark bridge road
se1 9ha
tel 44 020 7940 0490 
fax 44 020 7803 1619
usa
chicago 
175 w jackson blvd 
suite 2260 
chicago il 60604 
tel 1 312 922 7600 
fax 1 312 922 7625 
new york
245 park ave
24th floor
new york ny 10167
tel 1 212 837 7841
fax 1 212 792 4001
asia pacific
singapore 
137 telok ayer street
0707
singapore 068602
tel 65 6216 0452
fax 65 6536 4167
tokyo 
10th floor
nihonbashi duplex b’s
9 17 nihonbashi kobunacho
chuoku tokyo 1030024
tel 81 0 3 3668 9372
fax 81 0 3 3668 9393
sydney 
level 6
underwood house
37 pitt street
sydney nsw 2000
tel 61 0 2 8987 9600
fax 61 0 2 8252 7640
hong kong 
32 hollywood road
unit 2004
kinwick centre
sheung wan
hong kong 
tel 852 3180 9512
fax 852 3180 9399
patsystems plc  annual report  accounts 2010 01 about patsystems
01 highlights
02 global opportunities
04 product range
06 chairman’s statement
08 chief executive’s report
12 finance director’s review
15 key performance indicators
16 our board
17 directors’ report
19 statement of corporate governance
21  report of the board on directors’ 
remuneration and on group 
remuneration policy
24  independent auditors’ report to the  
members of patsystems plc
25 consolidated income statement
25  consolidated statement of 
comprehensive income
26  consolidated balance sheet
27  consolidated statement of  
changes in equity
28 consolidated cash flow statement
29 notes to the financial statements
53  independent auditors’ report to the 
members of patsystems plc
54 company balance sheet
55 notes to the financial statements
60 directors and advisers
overview
business review
governance financial statements overview
patsystems plc
annual report  accounts 2010 01
overview
about patsystems
highlights
financial highlights
  total revenue £221 million  
2009 £22 1 million
  adjusted pretax profit at £38 million  
2009 £39 million
  cash and cash equivalents increased to  
£93 million 2009 £89 million
  proposed full year dividend increased 29  
to 055p per share 2009 0425p per share
 adjusted for share option costs marking to market of derivatives used to hedge 
cash flows and amortisation of intangibles other than internally developed software
operational highlights
  continued expansion into new growth markets 
with sales success for exchange offering in 
argentina and vietnam
  hosting centres established in chicago hong 
kong tokyo singapore and sydney to deliver  
a fullymanaged application service provider 
‘asp’ to existing and new customers
  business’ global asp offering promoted as 
patsystems xconnect making anticipated contribution 
to trading systems revenue growth in 20 1 1
  bursa malaysia derivatives selected patsystems as 
the provider of its new order management system
patsystems delivers tailored solutions built from  
modular components to enhance derivatives trading 
performance and trade processing our solutions include 
realtime risk management tools comprehensive 
exchange systems and robust trading systems with 
extensive market connectivity  
we work in partnership with our customers to deliver 
robust systems that align with their business strategies 
– and have done since our foundation in 1994 
the world’ s leading banks trading houses hedge 
funds and professional traders rely on patsystems to 
facilitate the electronic trading of derivatives fx 
energy and other asset classes overview
patsystems plc
annual report  accounts 2010 02
patsystems plc
annual report  accounts 2010
global opportunities
patsystems operates from a global network  
of offices covering all major derivatives  
trading centres
with connectivity to over 60 exchanges  
and a network of more than 50 customers 
throughout europe the middle east the 
americas and asia pacific patsystems enables 
over 10000 traders to transact in the global 
derivatives market every month 
exchange connectivity overview 
north america
with strategically located offices in chicago and new york 
patsystems provides lowlatency access to some of the world’s 
largest futures exchanges
central and south america
patsystems provides access to latin america with connectivity  
to exchanges such as the mexican derivatives exchange and 
bmfbovespa
europe
from london to paris brussels to madrid patsystems  
offers connectivity to numerous leading futures exchanges  
throughout europe
africa and the middle east
patsystems provides access to some of the leading exchanges  
in africa and the middle east including the turkish derivatives 
exchange ‘turkdex’ and the south african futures exchange
asia pacific
patsystems’ leading position within asia pacific is the result of 
over 10 years’ investment in the region and extensive connectivity 
to futures exchanges in australia hong kong indonesia japan 
korea malaysia singapore taiwan and vietnam
key customers
as our customers expand into new and emerging markets  
they naturally look to patsystems as a key partner with our  
global presence easily deployable software and extensive 
exchange connectivity
hong kong
8 customers
london
16 customers patsystems plc
annual report  accounts 2010
overview
patsystems plc
annual report  accounts 2010 03
customers
patsystems xconnect hubs – existing
patsystems xconnect hubs – in development
offices
singapore
11 customers
sydney
2 customers
tokyo
7 customers
chicago
15 customers
new y ork
2 customers overview
patsystems plc
annual report  accounts 2010 04
patsystems plc
annual report  accounts 2010
product range
futures and options 
brokers exchanges and 
other intermediaries 
deploy our technology 
to thousands of end 
users who range from 
independent traders 
to global financial 
institutions
trading systems
patsystems’ robust and scalable trading 
solutions range from plugandplay 
modules that address a specific issue  
to complete high performance trading 
systems with extensive global access  
to derivatives exchanges and clearers 
every day the world’s leading banks 
futures commission merchants ‘fcms’ 
trading houses and professional traders 
rely on patsystems’ trading solutions for 
electronic trading and trade processing 
of futures and options
frontend trading tools
patsystems offers a choice of two 
proprietary frontend trading 
applications jtrader and promark 
jtrader is easytouse and widely 
distributed making it the ideal frontend 
trading application promark is 
patsystems’ premium frontend for 
professional traders promark is ideal  
for complex highvolume trading with  
a wide range of advanced functionality 
both frontends can be easily deployed 
over the internet 
for traders who wish to develop their 
own frontend trading application 
patsystems offers our fix trading 
gateway and proprietary application 
programming interface ‘api’ both the 
fix and proprietary api allow users to 
benefit from our powerful order routing 
engine and market connectivity 
market connectivity 
patsystems’ extensive market connectivity 
delivers a major advantage to our 
customers connecting to over 60 
exchanges globally patsystems provides 
access to a broad range of derivatives 
products giving customers the choices 
they want 
customers can access the exchanges 
directly or through patsystems’ xlink 
capability xlink is patsystems’ unique 
software solution that enables customers 
to leverage one another’s exchange 
memberships 
system architecture 
the foundation of patsystems’ trading 
solution is a powerful order management 
system which facilitates highspeed 
order routing and robust throughput 
with lowlatency impact the core 
system is highly scalable with the ability 
to support any number of users the 
trading system is managed centrally  
with patsystems’ userfriendly risk 
management and administration tool 
traditionally our trading systems have 
been installed at each client site  
with each client managing its own 
infrastructure however patsystems  
now offers a fullymanaged application 
service provider ‘asp’ model 
patsystems xconnect patsystems 
usp market connectivity  
scalable architecture ease and cost 
of deployment patsystems plc
annual report  accounts 2010
overview
patsystems plc
annual report  accounts 2010 05
xconnect provides the full benefits of 
the patsystems trading environment 
without the requirement for clients  
to invest in a technology infrastructure  
or technical support resources
risk systems
patsystems provides a standalone 
multiasset class risk management 
system that calculates margin and profit 
and loss in realtime this realtime risk 
system risk informer is currently in use 
at 10 financial institutions 
business benefits
risk informer integrates seamlessly  
with diverse data sources and can be 
extended to support all asset classes 
within the institution’s portfolio
benefits include
realtime margin calculation for •	
exchangetraded futures and options 
equities cfds and fx using official 
methods sourced from the relevant 
organisations
ability to integrate standalone •	
analytical modules
ability to monitor intraday risk for •	
direct market access clients 
seamless integration with multiple •	
data sources including trading 
systems and market price feeds 
exchange feeds and client back  
office systems 
‘slice and dice’ analysis of trading data •	
realtime processing and analysis of •	
new data 
flexible ‘what if’ scenarios to analyse •	
the impact of specific events on a 
client’s risk profile such as proposed 
trades or anticipated price changes
eventdriven alert function against •	
administrator defined margin limits 
generating predefined messages 
depending on the severity of the alert 
alerts can be generated in email and 
text format
exchange systems
patsystems’ exchange and back office 
solutions are built on proven technology 
with a track record for performance and 
reliability the applications are highly 
customisable as well as easy and cost 
effective to support 
patsystems’ exchange technology is built 
around the patsystems matching engine 
it has been implemented across seven 
exchanges globally including turkdex 
and the indonesian commodity and 
derivatives exchange banks and 
brokerage firms use patsystems’ back 
office technology to facilitate back office 
reporting and clearing requirements 
a comprehensive offering 
patsystems presents a truly unique 
offering because of our marketleading 
position within the trading and risk 
management industry when combined 
with patsystems’ trading and risk 
management modules patsystems can 
provide a comprehensive endtoend 
exchange solution that automates all 
steps in the trade cycle from front to 
back office
usp realtime multiasset class 
platformindependent
usp comprehensive endtoend 
solution from a single vendor   overview
patsystems plc
annual report  accounts 2010 06
patsystems plc
annual report  accounts 2010
“ 2010 was a year with a mixed performance across the 
business we saw some notable sales successes such as the 
new customers for our exchange system offering tempered 
against deferred sales opportunities for our risk product and 
marginal growth within our trading systems business  
 
the group continues to demonstrate continued cash 
generation and profit resilience and we expect this to 
continue in 201 1 and beyond the continued payment and 
growth in the level of the dividend is an important statement 
by the board of our continued confidence in the growth 
prospects for the business 
 
patsystems commences 201 1 with an encouraging sales 
pipeline that will provide opportunity to expand our 
geographical presence and grow the revenues for each  
of our product offerings ”
chairman’s statement
positioned for future growth
2010 was a year with a mixed 
performance across the business we 
saw some notable sales successes such 
as the new customers for our exchange 
system offering tempered against 
deferred sales opportunities for our risk 
product and marginal growth within our 
trading systems business i am pleased 
that the business has continued to 
expand into new growth markets with 
sales success for our exchange offering  
in argentina and vietnam
in 2010 patsystems established hosting 
centres in chicago hong kong tokyo 
singapore and sydney in order to deliver 
a fullymanaged application service 
provider ‘asp’ offering to both existing 
and new customers further investment 
will be made in 2011 in establishing 
hosting centres in london and são paulo 
and implementing a global widearea 
network between the centres
the business’ global asp offering is 
being promoted as patsystems xconnect 
and is expected to be an important 
contributor to trading systems revenue 
growth in 2011
financial results
adjusted pretax profit being profit 
before tax after adjusting for share 
option costs marking to market of 
derivatives used to hedge cash flows and 
amortisation of intangibles other than 
internally developed software for the full 
year ended 31 december 2010 was £38 
million compared to £39 million in 2009 
adjusted pretax profit is the definition 
of profit used by analysts to measure the 
performance of the group
diluted earnings per share ‘eps’ on this 
basis was 2p per share the same as last 
year details of these calculations are set 
out in the earnings per share section of 
the finance director’s review on pages 
12 to 13
profit before income tax for the full year 
ended 31 december 2010 was £32 
million compared to £45 million in 2009 
diluted eps was 14p per share 
200918p
turnover for the year amounted to £221 
million 2009 £221 million of which 
£137 million 2009 £132 million is 
annuity revenue that derives from a 
combination of the provision of trading  patsystems plc
annual report  accounts 2010
overview
patsystems plc
annual report  accounts 2010 07
screens and market access on a 
‘softwareasaservice’ rental model 
when combined with revenue from 
contracted support and maintenance of 
our order routing technology this means 
77 of the turnover is on a recurring 
annual basis 2009 82
geographical review
asia pacific
the asia pacific region had a positive 
year with several significant new sales 
wins the patsystems’ exchange and 
trading system was adopted by the 
newly launched vietnamese commodity 
exchange ‘vnx’ in ho chi minh city 
and bursa malaysia derivatives selected 
patsystems as the provider of its new 
order management system in addition 
newedge a major existing customer  
and a number of new customers across 
the region adopted the patsystems  
xconnect asp solution sales in asia 
pacific account for 39 2009 37  
of group revenues
europe
in europe we continued to grow the 
business during the year despite the 
increasingly long sales cycles the 
longterm project to replace the 
exchange risk and trading systems for 
turkdex continued throughout 2010 and 
is progressing to plan macquarie bank 
limited in europe selected patsystems’ 
post trade risk system risk informer for 
their exchange traded derivatives 
business sales in europe account for 
35 2009 34 of group revenues
americas
the americas region had a challenging 
year with the revenue contribution from 
existing clients failing to recover from 
2008 levels and the loss of £08 million 
revenue from lehman brothers inc  
the sales campaign into south america 
was rewarded by mercado a término  
de buenos aires ‘matba’ selecting 
patsystems as its key technology provider 
as it prepares to extend electronic trading 
capability to its existing open outcry 
operations sales in the americas 
account for 26 2009 29 of  
group revenues
dividend
patsystems has demonstrated continued 
cash generation and profit resilience and 
we expect this to continue in 2011 and 
beyond as a result of this together with 
our strong year end cash position the 
board is recommending the payment of 
a second interim dividend of 035p based 
on the results for 2010 as a whole 
bringing the total dividend for the year to 
055p per share compared to a total of 
0425p for 2009 this gives a year on 
year growth of 29 in our dividend and 
the dividend remains well covered at 4 
times the continued payment and 
growth in the level of the dividend is an 
important statement by the board of our 
continued confidence in the growth 
prospects for the business
the second interim dividend will be paid 
on 8 april 2011 to shareholders on the 
register as at 4 march 2011 
board management and staff
on behalf of the nonexecutive 
directors i would like to thank the 
executive directors the senior 
management team and all the 
patsystems’ staff for all their hard  
work and dedication during the year 
steve sparke resigned from the board 
during the year due to increasing time 
commitments from his other executive 
business interests and on behalf of the 
board i would like to thank steve for his 
support and contribution since he joined 
the board in 2006 
i am delighted to welcome stewart 
douglasmann back to the board 
stewart retired from the board in 2007 
but has been operating as a consultant 
to the board for the intervening period 
on a personal note i should also like to 
thank john priestley for his support 
during the year his commitment and 
dedication to the business has been 
greatly appreciated 
customers and shareholders
many of our customers have endured 
significant market and business change 
during 2009 and 2010 and as such i am 
grateful for their ongoing support and 
for providing opportunities that enabled 
patsystems to continue develop and 
grow its product and service propositions 
i would also like to thank our shareholders 
for their continued support during 2010
future
in 2011 patsystems expects that the 
significant investment in our global asp 
offering patsystems xconnect will 
stimulate recurring revenue growth 
within our trading systems business we 
expect to see further opportunities to 
grow our exchange systems business 
across the globe with the additional 
functionality we developed as part of the 
project with turkdex a number of 
opportunities exist to sell our risk product 
into major global banks but as was 
experienced in 2010 a degree of caution 
must be exercised due to the long 
decision timescales and the change of 
strategic priorities that can take place 
within global banks during the product 
procurement process
with offices in singapore hong kong 
sydney and tokyo patsystems is well 
placed in the asian and emerging market 
areas to provide endtoend solutions for 
commodity futures exchanges and 
promoting the patsystems xconnect 
offering for trading system adoption 
within established markets promotion of 
our posttrade risk offering will continue 
and offering our trading solutions by way 
of patsystems xconnect
patsystems commences 2011 with  
an encouraging sales pipeline that  
will provide opportunity to expand  
our geographical presence and grow  
the revenues for each of our  
product offerings
richard last
chairman nonexecutive director
7 february 2011 patsystems plc
annual report  accounts 2010 08
patsystems plc
annual report  accounts 2010
business review
chief executive’ s report
developing new and  
existing markets
i am particularly delighted by the 
exchange system sales to both  
matba and vnx demonstrating the 
transformation of our exchange  
systems business from being materially 
dependent on small japanese exchanges 
to a business with global appeal with 
the integration of our matching engine 
risk offerings and trading solution  
i believe there will be significant 
opportunities for exchange solution  
sales in 2011 and beyond
it was disappointing that a material  
risk informer opportunity that was 
significantly progressed through the 
procurement process did not conclude  
in 2010 and as such risk system sales did 
not achieve the level we had targeted 
however we continue to have a number 
of exciting sales opportunities for the 
product and a range of new addon 
modules to sell in 2011
though it was detrimental to the 2010 
results i believe it is the correct strategy 
for revenue from exchange system sales 
to include a volume related charge rather 
than a sole upfront perpetual licence 
thereby allowing patsystems to share  
in the benefits of the exchange’s future 
growth if new and developing electronic 
trading exchanges enjoy the growth  
that established exchanges have enjoyed 
in recent years then this judgement will 
be vindicated by an anticipated increase 
to patsystems’ recurring revenues in  
2012 onwards
2010 business objectives
at the start of 2010 we set four 
objectives for the business and overall  
i am satisfied with our progress against 
these objectives these are reported on 
as follows
solidify our position as the premier 
provider of risk margin systems within 
the world’s top global banks
in 2010 we partially achieved this 
objective with macquarie bank limited 
adopting the product and j p morgan 
extending its use of the product as 
previously reported a well progressed 
opportunity with a third global bank did 
not progress to the detriment of our 
2010 results
“we saw continued success for sales of our exchange 
systems business in 2010 and it is our opinion that 
patsystems currently has a unique proposition in the 
global marketplace with our ability to provide exchange 
matching clearing trading and risk capability as an 
integrated package ” patsystems plc
annual report  accounts 2010
patsystems plc
annual report  accounts 2010 09
business review
increasing
shareholder
value 
01
reduce the business’ 
reliance on oneoff 
project and 
licence sales
02
provide matching 
technology directly 
to exchanges to 
extend the breadth of 
patsystems global 
connectivity
03
continue the extension 
of geographical coverage 
to growth markets
04
identify complimentary 
addon acquisitions to 
leverage the existing 
sales and support 
infrastructure 
investment
extend our sales penetration in new 
countries with additional sales in 
malaysia indonesia and brazil
the business had sales success in 
malaysia to bursa malaysia derivatives 
and also in vietnam and argentina the 
indonesian commodity and derivative 
exchange which adopted the patsystems 
exchange solution in 2009 has enjoyed a 
successful first period of trading in 2010 
with traded volumes growing steadily 
we expect that the anticipated success  
in brazil will be achieved once our 
patsystems xconnect hub is deployed  
in são paulo
deliver hosted services to new and 
existing customers within all regions that 
we operate
patsystems xconnect hubs in tokyo and 
hong kong are live with a total of 6 
customers patsystems xconnect hubs in 
singapore and chicago went live in the 
autumn of 2010 with newedge one of 
our existing major customers 
continue the 2009 sales success for our 
exchange systems offering
the exchange system sales to matba 
and vnx during 2010 continue to 
demonstrate the global potential of our 
exchange systems offering 
revenue streams
the group operates in one product line 
that of the supply of software to financial 
institutions and consists of the following 
revenue streams
trading systems 
the investment in patsystems xconnect 
is a key strategy in supporting the 
growth plan for increasing revenues from 
our trading systems business patsystems 
xconnect will leverage patsystems xlink 
technology which allows for seamless 
exchange connectivity and order routing 
between patsystems xconnect hubs or 
client sites
the patsystems xconnect hubs planned 
for deployment in 2010 were all 
implemented on schedule apart from 
são paulo where local procurement 
challenges have deferred this to 2011
our strategy for growth
to support the deployment of patsystems 
xconnect in north america patsystems 
has selected interactive data 7ticks to 
provide ultralow latency networking 
services and exchange connectivity a 
selection process is under way to identify 
a partner to provide global wan 
infrastructure connectivity
it is expected that capital investment in 
excess of £05 million will be made in 
2011 to support patsystems xconnect 
deployment globally 
our replacement order management 
system global trading and risk alert 
has been deployed to a number of 
customers it is expected that further 
deployments of our new core trading 
system global trading will take place 
throughout 2011 commencing with the 
patsystems xconnect hub in london
exchange systems
as previously stated we saw continued 
success for sales of our exchange systems 
business in 2010 and it is our opinion 
that patsystems currently has a unique 
proposition in the global marketplace 
with our ability to provide exchange 
matching clearing trading and risk 
capability as an integrated package
we believe that there are opportunities 
across the globe for smaller or newly 
established commodity or financial 
futures exchanges that want a complete 
endtoend technology solution and wish 
to source this from a single supplier
based in buenos aires matba is  
a futures and options commodity 
exchange specialising in wheat corn  
and soya while the exchange has 
experienced steady demand over the  patsystems plc
annual report  accounts 2010 10
patsystems plc
annual report  accounts 2010
business review
chief executive’s report continued
matba leverages patsystems’ technology to 
achieve its future growth plans 
after an extensive global selection process the mercado a término de  
buenos aires ‘matba’ has selected patsystems as its key technology  
provider as it prepares to add electronic trading capability to its existing  
open outcry operations 
based in buenos aires matba is a futures and options commodity exchange 
specialising in wheat corn and soya while the exchange has experienced 
steady demand over the past few years matba acknowledges that they  
could experience increased volume with an electronic offering 
patsystems will provide matba with a complete exchange system that includes 
straight through processing and matching supported by the patsystems 
matching engine the patsystems matching engine is readily scalable and  
can fully accommodate the anticipated future growth of matba 
matba will also utilise patsystems pretrade risk management module and 
frontend trading applications promark and jtrader patsystems’ frontends 
are userfriendly featurerich applications that can be easily deployed to 
matba participants over the internet wan lan or leased lines ease of 
deployment was a key consideration for matba as they aim to make their 
market more accessible to local and international participants
past few years matba recognise the 
exchange could experience increased 
volume by extending electronic trading 
to its current open outcry offering 
in addition to the patsystems matching 
engine matba will also utilise patsystems’ 
jtrader which will be deployed to 
matba participants over the internet
vnx was officially introduced at a 
ceremony in ho chi minh city on 20 
october 2010 by the sme securities  
joint stock co and by trieu phong gold 
international joint stock co vnx will 
initially trade in steel rubber and coffee 
which are some of vietnam’s biggest 
exports it will also provide an additional 
financial tool for producers and traders 
to protect themselves against price 
fluctuation risks 
patsystems’ exchange solution will 
facilitate the integration of electronic 
trading between domestic producers  
and traders and provide access to 
international customers interested  
in vietnam’s commodity markets
our project with turkdex continued 
during 2010 and phase 1 is expected  
to go live in the first half of 2011 a 
subsequent phase 2 will be deployed  
later in 2011 or early in 2012 during the 
year the indonesian commodity and 
derivatives exchange successfully 
launched their second product a crude 
palm oil contract which will act as a 
reference point for indonesia’s local 
commodity producers indonesia is one  
of the world’s largest producers of crude 
palm oil
risk systems
during 2010 prudential bache j p 
morgan and macquarie bank limited 
deployed patsystems’ posttrade risk 
margining product risk informer risk 
informer is also a key component of a 
featurerich clearing and risk solution 
that will be implemented at turkdex’s 
clearing bank in turkey as part of the 
overall project with turkdex
in 2011 we expect to sell risk informer 
services and license new modules to 
existing customers as well as sell new 
risk informer licences to other global  
and local financial institutions 
the new modules that will be promoted 
in 2011 include scenario analysis with the 
capability to simulate possible market or 
price shocking conditions as well as new 
options risk capability that will provide  
a view of option positions prices and 
greeks based upon the movement of  
the underlying contract 
staff and operating structure
overall staff numbers have remained 
broadly similar to 2009 with 161 
employees at the 31 december 2010 
compared to 162 on 1 january 2010 
during the first quarter of 2011 the 
operating structure of patsystems will be 
completely reviewed with the objective 
of removing hierarchy improving 
information dissemination and increasing 
operating margins
as a first part of this process the 
management structure of the operations 
functions has been revised and the 
revised team will now review the 
remainder of the operations department
the objective for the business is to 
improve operating margin by 2 based 
on our 2010 results
business strategy
patsystems’ business objective is to  
be the external partner of choice  
for investment banks futures  
clearing merchants and exchanges  
for the provision of electronic  
trading trade matching and risk  
management technology patsystems plc
annual report  accounts 2010
patsystems plc
annual report  accounts 2010 11
business review
patsystems selected by the 
vietnam commodity exchange
the newly established vietnam commodity exchange 
‘vnx’ was officially introduced at a ceremony in  
ho chi minh city on 20 october 2010 one of the  
key objectives of the exchange is to create a marketplace 
for vietnam’s popular commodity products steel rubber  
and coffee – some of vietnam’s biggest exports it will 
also provide an additional financial tool for producers  
and traders to protect themselves against price  
fluctuation risks 
vnx will utilise patsystems’ complete exchange solution 
this will include patsystems’ trade matching engine 
clearing and settlement platform pretrade risk 
management module and the frontend execution 
platform patsystems’ exchange solution will facilitate  
the integration of electronic trading between domestic 
producers and traders and provide access to international 
customers interested in vietnam’s commodity markets
the growth strategy of the business 
has four components
reduce the business’ reliance on •	
oneoff project and licence sales
provide matching technology directly •	
to exchanges to extend the breadth 
patsystems global connectivity
continue the extension of •	
geographical coverage to growth 
markets
identify complimentary addon •	
acquisitions to leverage the existing 
sales and support infrastructure 
investment
the acquisition strategy is to identify  
and acquire businesses that provide 
complimentary technology and where 
shareholder value can be created by 
selling that technology through the 
patsystems global sales organisation
a number of appropriate targets were 
identified in 2010 but an appropriate 
acquisition price could not be agreed 
that would have created value for 
patsystems’ shareholders
business objectives and outlook
our key objectives for 2011 are as 
follows
grow the recurring revenue base by •	
growth of the patsystems xconnect 
asp offering
extend the risk informer customer •	
base and licence the new modules  
to existing customers
continue the 2010 sales success for •	
our futures exchange system product 
in all markets
revise our internal structure to •	
increase the operating margin
trading subsequent to the year end has 
progressed in line with our expectations 
and we remain confident of fulfilling  
our growth aspirations across all areas  
of the business
david webber
chief executive 
7 february 2011 patsystems plc
annual report  accounts 2010 1 2
patsystems plc
annual report  accounts 2010
business review
finance director’s review
sustaining shareholder returns
 2010 2009 
 £’000 £’000
profit for the year attributable to equity holders of the company 2551 3362
income tax expense 687 1124
profit before income tax 3238 4486
share option costs 60 261
movement in fair value of hedging instruments 338 1029
amortisation of intangibles 117 203
  
adjusted pretax profit 3753 3921
current taxation 99 249
adjusted posttax profit 3654 3672
  
 number number
weighted average number of shares 186146310 180628990
effect of dilutive share options 1170581 1628191
 187316891 182257181
adjusted eps 20p 20p
adjusted diluted eps 20p 20p
adjusted profit at £38 million is 
consistent with that achieved in 2009 
and operating cash flow reduced to £28 
million from £43 million in 2009 cash 
at bank stood at £93 million on 31 
december compared to £89 million  
the previous year 
adjusted profit removes volatile or 
potentially volatile noncash items to 
show an underlying level of profitability 
that enables the results for the business 
to be compared on a consistent basis for 
each accounting period the most 
volatile and material item over the past 
three years has been the adjustment in 
respect of the marking to market of 
derivatives that are used to hedge 
overseas foreign currency cash flows 
this year the adjustment is a credit to the 
profit and loss account of £03 million 
whilst in 2009 the adjustment was a 
reduction of £10 million a change 
between the years of £13 million 
the other adjustments made to the 
reported pretax profit on ordinary 
activities are to add back the charge or 
credit for i share option costs and ii 
amortisation of intangibles other than 
those charges for internally developed 
software the table in the earnings per 
share section below details the 
adjustments made to operating profit in 
both this and the prior year
revenue
total revenue was £221 million 2009 
£221 million
regional analysis
asia pacific
revenue in this region grew by 4 from 
the prior year to £85 million underlying 
revenue growth in this region remains 
strong at 25 after adjusting for the 
revenue lost as a result of the tokyo 
grain exchange winding down
europe
revenue in europe grew by 4 to £78 
million from £75 million in the prior year
americas
revenue declined in the americas by 9 
to £58 million from £64 million in the 
prior year patsystems plc
annual report  accounts 2010
patsystems plc
annual report  accounts 2010 1 3
business review
revenue stream analysis
trading systems
trading systems revenue was consistent 
with that achieved in 2009 at £175 
million compared to £176 million
exchange systems
exchange systems revenue was also 
consistent with the 2009 performance at 
£29 million compared to £30 million
risk systems
revenue from the risk systems business 
at £17 million was up £02 million from 
£15 million last year
operating expenses
reported operating expenses of £184 
million were £12 million more than in 
2009 however included in operating 
costs for 2009 and as noted above was 
a gain in the mark to market value of the 
derivatives used to hedge the group’s 
cash flow of £1 million compared to a 
charge of £03 million this year 
underlying total costs therefore reduced 
by £01 million the movement between 
2009 and 2010 for the significant cost 
categories are detailed below
staff costs decreased by £06 million as a 
result of a reduction in our london head 
count and no bonus payments being 
made to the group’s senior management 
the reduction in direct staff costs was 
somewhat offset by an increase of £414k 
in the costs of our chinese development 
centre as the number of contractors 
working for us there has grown over the 
year from 17 to 30
at 31 december 2010 the group had 
161 permanent staff 2009 162 4 
contractors 2009 3 and 30 staff in the 
chinese development centre 2009 17
property costs decreased by £01 million 
primarily because the 2009 costs included 
the costs associated with the relocation 
of the london office from the cottons 
centre to riverside house 
depreciation and amortisation costs 
increased by £015 million comprising of 
an increase of £015 million in amortisation 
of capitalised software and an increase of 
£01 million in the depreciation of tangible 
assets offset somewhat by a reduction in 
the amortisation of other intangibles of 
£01 million
profit before income tax
profit before income tax was £32 million 
2009 £45 million
taxation
the group has tax losses carried forward 
of £166 million and will not be paying 
tax on its uk profits for a number of 
years small amounts of withholding tax 
may or may not arise from time to time 
depending on the geographical locations 
of customers with whom the group 
does business 
the current tax charge shown on the 
face of the income statement of £010 
million comprises a corporation tax 
charge in japan of £002 million 2009 
£022 million a minimum tax payment 
in the us of £002 million 2009 £002 
million and withholding tax of £006 
million 2009 £001 million the 
deferred taxation charge of £059 million 
2009 £088 million arises largely in 
respect of the use of trading losses in 
the year net of research and 
development ‘rd‘ tax credits relating 
to prior years recognised as deferred tax 
assets this year
retained profit for the year
retained profit for the year was £26 
million 2009 £34 million 
earnings per share
basic eps has fallen to 14p from 19p 
and diluted eps has fallen to 14p from 
18p last year
the board monitors the group’s eps 
performance by reference to adjusted 
pretax profit less current tax deferred 
tax is excluded from this measure 
because of its potential volatility the 
adjusted eps calculations on this basis are 
shown opposite
77 of patsystems’ 
revenue is recurring  
in nature and in  
stark contrast to  
many technology 
companies this gives  
a level of guarantee  
for a minimum level  
of operating profit  
for the business on  
an annual basis patsystems plc
annual report  accounts 2010 14
patsystems plc
annual report  accounts 2010
business review
finance director’s review continued
financial assetsliabilities – 
derivative financial instruments
financial assets represent the ‘marked to 
market’ value of derivatives used to 
hedge the group currency exposures 
the derivatives used are forward 
contracts and currency options these 
derivatives are marked to market 
monthly and the resulting ‘profit or loss’ 
is taken to the income statement in the 
current year a total cost of £03 million 
was charged to the income statement 
2009 £10 million credit
current liabilities
current liabilities at £30 million 
compared to £32 million in the prior 
year are broadly similar
cash and treasury 
cash and cash equivalents increased to 
£93 million from £89 million in 2009
the group generated net cash inflows 
from operating activities of £28 million 
2009 £43 million £17 million 2009 
£13 million was invested in intangible 
and tangible assets with dividends of 
£09 million 2009 £07 million being 
paid during the year 
the group is exposed to foreign currency 
risk on sales purchases and cash 
balances that are denominated in a 
currency other than sterling the 
principal currency giving rise to this risk  
is the us dollar in order to smooth the 
impact of significant movements in 
exchange rates the group has a policy  
to carry forward cover for 75 of us£ 
net anticipated exposure for 12 months 
forward that level of cover is in place 
and is comprised of a mixture of forward 
contracts and options the average 
us£ exchange rate used in the 2010 
income statement was 154 2009 157 
the average rate of the hedges in place 
for 2011 is 158 the year end us£ 
exchange rate was 155 2009 159
business risks
the principal business risks remain the 
same as in the prior year and these are 
detailed below
competition
the group operates in a growing but 
competitive market there are three 
major software suppliers in the global 
electronic trading systems market for 
futures and options of which patsystems 
is one there are many smaller 
companies who supply screens but not 
market connectivity in such a market 
there is always a risk that customers 
could move to other competitors and 
there is always downward pressure on 
margins patsystems mitigates this risk by 
supporting its brands with appropriate 
marketing activity and by consistently 
extending its market connectivity as well 
as improving its software customer 
support and customer care
bad debts
the deterioration of the global economic 
climate that began in 2008 continued in 
2009 and abated somewhat in 2010 has 
continued to affect the financial services 
sector as the majority of our clients are 
financial services organisations the group 
considers there is a risk that a client could 
experience financial difficulties and not 
be able to pay its debts as they fall due 
in order to mitigate this risk patsystems 
reviews all client accounts on a monthly 
basis and takes appropriate action to 
keep accounts within payment terms 
intangible and tangible fixed assets
goodwill
goodwill remains unchanged from  
2009 at £33 million the majority of  
this balance £30 million relates to  
the acquisition of tamesis in 2005  
as previously discussed risk systems 
continue to be a key element of  
our business 
intangible assets
during the year the group expended 
£08 million on intangible assets 2009 
£07 million this spend included £06 
million of capitalised development costs 
in respect of new products that will 
generate revenues in future years these 
costs will be amortised over three to five 
years from the date of completion the 
amortisation period reflects the expected 
life of the particular asset capitalised
property plant and equipment
during the year the group purchased 
fixed assets totalling £09 million 2009 
£06 million the additions comprised 
mainly of computer equipment for  
the establishment of our asp offerings  
in singapore hong kong sydney  
and chicago
current assets
trade receivables
trade receivables have increased 
marginally by £03 million to £29 million 
from £26 million during the year the 
group has not suffered any significant 
bad debt writeoffs
prepayments and accrued income have 
grown by £14 million to £37 million 
mainly as a result of the turkdex project 
where revenue is recognised on the 
basis of percentage completion of the 
project and two new contracts that 
were entered into in the last quarter  
of the year patsystems plc
annual report  accounts 2010
patsystems plc
annual report  accounts 2010 15
business review
key performance indicators
 2008 2009 2010
 2008 2009 2010
 2008 2009 2010
 2008 2009 2010
 2008 2009 2010
 2008 2009 2010
 2008 2009 2010
 2008 2009 2010
 2008 2009 2010
revenue – £m adjusted profit – percentage of sales adjusted pretax profit – £m
196
187 37
221 1 77
39
221
170
38
diluted adjusted eps – p
promark screens deployed at year 
end – number
average active users during the year – 
number
19
571
6852
20
723 7062
20
547
7471
operating profit – £m operating cash flow – £m diluted eps – p
19
36
03
43 43
18
31
28
14
customer consolidation
consolidation within the financial 
services industry has occurred over the 
past few years and further consolidation 
remains a risk where consolidation takes 
place the risk to the group’s business is 
typically to the revenues associated with 
market connectivity and support and 
maintenance we mitigate this risk by 
actively adding new customers products 
and asset categories to our portfolio 
revenue profile
77 of patsystems’ revenue is recurring 
in nature and in stark contrast to many 
technology companies this gives a level 
of guarantee for a minimum level of 
operating profit for the business on an 
annual basis
however with products such as our risk 
offerings and our exchange systems 
playing an integral role in the group’s 
future growth expectations and the 
significant revenues from these 
opportunities being nonrecurring in 
nature the propensity for organisations 
to defer technology investments during 
tougher economic climates is a risk to  
our business 
martin thorneycroft
finance director
7 february 2011 patsystems plc
annual report  accounts 2010 16
business review
our board
richard last
chairman nonexecutive director
age 53 
richard is chairman of arcontech group 
a provider of it solutions for the financial 
services sector of parseq plc a provider 
software and bpo solutions both are 
listed on aim and the british smaller 
technology companies vct 2 plc a fully 
listed venture capital trust in addition 
richard is chairman of cse global uk 
limited the uk subsidiary of the 
singapore stock exchange listed it 
communications and controls systems 
group cse group limited richard  
also sits on the boards of corero plc  
an aim listed it solutions provider and 
lighthouse group plc an aim listed 
financial services group as well as a 
number of private businesses richard  
a fellow of the institute of chartered 
accountants holds a ba hons from 
sheffield university
david webber
chief executive
age 45 
david was appointed chief executive of 
patsystems in january 2006 he was 
formerly chief executive of attentiv 
systems group where his business 
leadership saw the company through 
significant expansion by both organic 
growth and acquisition he led the 
management buyout subsequent aim 
flotation of the business and was 
retained as chief executive when 
attentiv systems group plc was acquired 
by tietoenator in may 2005 david a 
member of the institute of chartered 
accountants since 1989 holds a bsc 
economics from the london school  
of economics
martin thorneycroft
finance director
age 49 
martin joined patsystems as finance 
director in july 2004 he was previously 
finance director of profile media group 
plc martin a member of the institute of 
chartered accountants having qualified 
with ernst and young in 1986 holds a  
b com from birmingham university
john priestley
nonexecutive director chairman  
of the audit committee
age 61 
john has over 30 years’ experience in the 
software and services sector and in 2003 
concluded a 13 year career with british 
telecommunications as director of 
business development for syntegra 
previously he was a director of kapiti 
and a divisional director with hoskyns 
stewart douglasmann
nonexecutive director chairman  
of the remuneration committee  
and nomination committee
age 73 
stewart was a partner of a city law firm 
before moving into investment banking 
in 1972 prior to his retirement in 2003 
he was a senior director of corporate 
finance at investec bank stewart has 
held senior positions at charterhouse 
bank and hoare govett and was a 
managing director of the london stock 
exchange stewart has also been a 
nonexecutive director of a number  
of listed companies stewart holds  
a ba oxon
1 stewart douglasmann 2 david webber 3 richard last 4 martin thorneycroft and 5 john priestley
1 2 3 4 5 governance
patsystems plc
annual report  accounts 2010 17
governance
directors’ report
the directors present their report for patsystems plc  
and the audited financial statements for the year ended  
31 december 2010
principal activities
the principal activities of the group are the development 
distribution and support of software enabling
the electronic trading of financial products on global trading •	
exchanges
real time trade capture valuation and risk management for •	
the structured finance market
results and dividends
the profit on ordinary activities attributable to shareholders after 
taxation amounted to £2551000 2009 £3362000 
the proposed dividend for the year is detailed in the chairman’ s 
statement on page 7
review of business and future developments
the directors are pleased with the group’ s performance during 
the year and its position at 31 december 2010 the directors are 
confident that performance will continue to improve in 2011 
and beyond 
the review section of this report contains a detailed assessment 
of the business and future projects 
reviews of the risks faced by the business are detailed in the 
chief executive’s report and the finance director’s review the 
finance director’s review also details the key performance 
indicators ‘kpis’ for the year
proceeds from shares issues during the year
£161000 was received in proceeds from the exercise of share 
options during the year ended 31 december 2010 2009 
£682000
substantial shareholdings
on 2 february 2011 the following holdings of 3 or more of 
the issued share capital of patsystems plc were known to the 
company 
beneficial owner as notified to the company number of shares 
ion trading ireland limited 55051191 2949
brewin dolphin limited 15714675 842
herald investment management limited 13000000 696
cazenove capital management limited 12176615 652
wells fargo advisors 11562500 619
kabouter management llc 8649000 463
ignis asset management limited 6177544 331
directors
the directors of the company together with those who served 
during the year are as follows
executive directors  nonexecutive directors 
d webber r last 
m thorneycroft  j priestley
  s douglasmann – appointed  
10 may 2010
 s sparke – resigned 10 may 2010
directors and their interests
 2 february 31 december 31 december
ordinary shares of 1p each in patsystems plc 2011 2010 2009
d webber 875000 875000 875000
m thorneycroft 68000 68000 68000
r last 786886 786886 786886
j priestley 168684 168684 91017
s douglasmann 180000 180000 100000
details of the directors who have an interest in share options are 
disclosed in the remuneration report
save as disclosed in this report and note 28 there were  
no other contracts subsisting during or at the end of the 
financial year in which a director of the company is or was 
materially interested
employee involvement
the directors recognise the importance of employee 
involvement established by good communications and working 
relationships the decentralised nature of the group’ s activities 
necessitates that the practical application of this policy is the 
responsibility of local management in a manner appropriate to 
their circumstances
employment policies
the group is committed to the terms of the codes of practice 
for the elimination of all or any discrimination and to the 
promotion of equality of opportunities in employment
it is group policy to afford equal opportunities to all employees 
and job applicants no employee or job applicant is less 
favourably treated than another on the grounds of their sex 
sexual orientation age marital status religion race nationality 
ethnic or national origin colour or disability and all 
appointments and promotions are determined solely by merit
it is also group policy to encourage and assist in the 
employment training retraining and career development of 
disabled persons where possible having regard to their suitability 
for a particular vacancy and the nature of the group’ s activities 
in the event that employees become disabled during 
employment the group will where possible continue their 
employment and arrange appropriate training
responsibility for monitoring the effective working of these 
policies is vested in martin thorneycroft the finance director
financial instruments and financial risk management
the group’s activities expose it to a variety of financial risks and 
it has developed and operates an overall risk management 
programme that recognises the unpredictability of financial 
markets and seeks to minimise potential adverse effects on the 
group’ s financial performance 
financial risk management is under the control of the finance 
director and is carried out centrally for the group in compliance 
with policies approved and monitored by the full board the 
board regularly reviews the effectiveness of these policies 
examining specific areas including foreign exchange risk interest  patsystems plc
annual report  accounts 2010 18
patsystems plc
annual report  accounts 2010
governance
directors’ report continued
rate risk credit risk and the extent to which financial 
instruments are being used to hedge certain risk exposures 
details of the group’ s exposures to market credit and liquidity 
risks are set out in note 3 to the financial statements
research and development
during the year the group continued to invest in rd all 
expenditure whether incurred through internal staff costs or 
through third party suppliers relating to rd that satisfies the 
criteria for capitalisation under ias 38 ‘intangible assets’ is 
capitalised otherwise it is written off to the income statement 
in the period incurred
creditor payment policy
given the international nature of the group’s operations there 
is no standard code for the group in respect of payments to 
suppliers operating subsidiaries are responsible for agreeing 
terms and conditions for their business transactions when 
orders for goods and services are placed ensuring that  
suppliers are aware of the terms of payment and including  
the relevant terms in contracts where appropriate these 
arrangements are adhered to provided that suppliers meet  
their contractual commitments
creditor days for the company are 30 days
charitable and political donations
the group made charitable contributions of £3950 during the 
year 2009 £2409 the current year donations were made to 
the backup trust world challenge and sparks no political 
donations were made in 2010 or 2009
disclosure of information to auditors
for each of the persons who were directors at the time this 
report was prepared the following applies
so far as the directors are aware there is no relevant •	
information of which the company’ s auditors are unaware 
and
the directors have taken all the steps that they ought to •	
have taken as directors in order to make themselves aware 
of any relevant audit information and to establish that the 
company’ s auditors are aware of that information
disclosure and transparency rules ‘dtr’
the group has complied with the dtr so far as they are 
applicable to aim listed companies
annual general meeting
the notice convening the annual general meeting ‘agm’ 
together with the proposed resolutions is being sent to 
shareholders the agm will be held on 19 april 2011
statement of directors’ responsibilities
company law requires the directors to prepare financial 
statements for each financial year which give a true and fair 
view of the state of affairs of the company and the group as 
at the end of the year and of the profit or loss of the group for 
the year in preparing those financial statements the directors 
are required to
1 select suitable accounting policies and then apply them 
consistently
2 make judgements and estimates that are reasonable  
and prudent
3 state whether applicable accounting standards have been 
followed subject to any material departures disclosed and 
explained in the financial statements
4 prepare the financial statements on the going concern basis 
unless it is inappropriate to presume that the group will 
continue in business
the directors confirm that the financial statements comply with 
the above requirements
the directors are responsible for the maintenance and integrity 
of the patsystems website information published on the 
internet is accessible in many countries with different legal 
requirements legislation in the united kingdom governing the 
preparation and dissemination of financial statements may 
differ from legislation in other jurisdictions
the directors are responsible for maintaining proper accounting 
records which disclose with reasonable accuracy at any time the 
financial position of the company and the group and enable 
them to ensure that the financial statements comply with  
the companies act 2006 as amended from time to time  
the directors are also responsible for safeguarding the assets of  
the company and the group and hence for taking reasonable 
steps for the prevention and detection of fraud and other 
irregularities
for and on behalf of the board of patsystems plc
martin thorneycroft
company secretary 
7 february 2011
registered office riverside house  
2a southwark bridge road london se1 9ha patsystems plc
annual report  accounts 2010
governance
patsystems plc
annual report  accounts 2010 19
statement of corporate governance
the following statement of corporate governance reflects the 
position of the group as at 31 december 2010
the board is responsible for the group’s corporate governance 
policy and recognises the importance of high standards of 
integrity and consistently seeks to apply the principles set out in 
the combined code on corporate governance the ‘code’ to 
the extent that they are appropriate for and applicable to a 
company of patsystems’ size quoted on the alternative 
investment market ‘aim’
directors
details of the dates of appointment and resignation of directors 
within the year are shown in the directors’ report all directors 
are subject to reelection within a threeyear period the roles of 
the chairman and chief executive are separate and have been 
so throughout the year
the nonexecutive directors are considered to be ‘independent’ 
within the definition contained in the code the nonexecutive 
directors meet without the presence of the executive directors 
whenever it is appropriate for them to do so
all the directors have access to the advice of the company 
secretary and may in furtherance of their duties take 
independent legal and financial advice at the company’ s 
expense they also have access to the minutes of the board in 
which any concerns expressed by them regarding matters 
pertaining to the group are recorded
while there is no formal process the performance and 
effectiveness of each director including the nonexecutive 
directors is assessed on an ongoing basis by the other 
members of the board
board meetings
the board generally meets monthly and at such other times as 
required and receives regular reports on a wide range of key 
issues including operational performance risk management and 
corporate strategy
the board’ s accountability is demonstrated by the adoption of a 
formal schedule of matters specifically reserved to the board for 
its decision concerning all key areas across the group’ s activities 
thereby ensuring that all major decisions affecting the group 
are taken at board level all the directors are free to bring any 
matter to the attention of the board at any time
committees
the audit committee and the combined remuneration and 
nominations committee meet at least twice a year
audit committee
the audit committee is chaired by john priestley and comprises 
all the nonexecutive directors the external auditors together 
with the finance director and other financial staff are invited to 
attend these meetings as and when required
in accordance with its terms of reference the principal function 
of this committee is to determine the appropriateness of 
accounting policies to be used in the group’ s annual results  
in addition the committee is responsible for monitoring the 
independence of the group auditors assessing the group’ s 
audit arrangements and the group’s system of internal  
controls and reviewing the halfyearly and annual results  
before publication
remuneration and nominations committee
the remuneration and nominations committee comprises  
all the nonexecutive directors and is chaired by stewart 
douglasmann 
in accordance with its terms of reference the committee 
determines the level and makeup of remuneration including 
bonuses and options of the executive directors and certain 
senior management this also includes formulation of 
remuneration policy throughout the group embracing both 
share options and bonuses
the committee also evaluates the balance of skills knowledge 
and experience on the board and considers all new board 
appointments and reappointments against this evaluation
the report of the board on directors’ remuneration and on 
group remuneration policy giving details of company policy 
and individual directors’ remuneration is set out on pages 21  
to 23 the remuneration arrangements of the nonexecutive 
directors are determined by the board as a whole
the notice period provisions contained in the directors’ service 
agreements are summarised on page 22 of these accounts
executive management committee
the executive management committee the ‘emc’ under  
the chairmanship of the chief executive or in his absence  
the finance director meets monthly and is responsible for the 
daytoday running of the group the members of the emc  
are the two executive directors of the company together with 
the five key business heads who are not directors
relations with shareholders
the board welcomes the views of shareholders
the agm is used as an opportunity to communicate with 
shareholders all shareholders are encouraged to attend the 
company’ s agm in order to take advantage of the opportunity 
to ask questions of the directors
shareholders may also contact the company in writing or via its 
website which is regularly updated additional information is 
supplied through the circulation of the interim report and the 
annual report and accounts during the year the company 
issued a series of announcements to the stock exchange the 
chief executive finance director and the chairman from time 
to time meet individual and institutional shareholders and 
provide such information as is permissible in order to facilitate a 
better understanding of the group’ s business and operations governance
patsystems plc
annual report  accounts 2010 20
patsystems plc
annual report  accounts 2010
statement of corporate governance continued
internal control
the board of directors has overall responsibility both for the 
group’ s system of internal controls which includes internal 
financial controls and for reviewing their effectiveness the 
directors recognise that no system of internal control can 
provide absolute assurance the group’ s systems are designed 
to manage the risk of failure to achieve business objectives and 
therefore can only provide the directors with reasonable 
assurance against material misstatement or loss
the key elements of the group’s internal control system which 
have been operational for the whole of the financial year  
are as follows
management structure •	
the board has overall responsibility for the group and there 
is a formal schedule of matters specifically reserved for 
decision by the board each executive director has been 
given responsibility for specific aspects of the group’ s affairs 
reporting to the chief executive is the emc which is 
responsible for the day to day running of the group’ s affairs
monitoring systems used by the board •	
the board receives regular reports on the financial and 
business performance of the group the board is regularly 
advised through these reports on the working capital 
position and financial performance relative to the group’ s 
approved budget
internal audit •	 
the board reviews from time to time the need for an internal 
audit function and remains of the opinion that the systems 
of internal financial control are appropriate to the group’ s 
present activities and that such a function is unnecessary
going concern
the directors have reasonable expectation that the company 
and the group have adequate resources to continue in 
operational existence for the foreseeable future for this reason 
they continue to adopt the going concern basis in preparing the 
financial statements
compliance statement
corporate governance procedures are subject to regular review 
by the board throughout the year the directors believe that the 
group has complied with the provisions as set out in section 1 
of the code to the extent that they are appropriate for and 
applicable to a company of patsystems’ size quoted on aim
for and on behalf of the board of patsystems plc
martin thorneycroft
company secretary
7 february 2011 patsystems plc
annual report  accounts 2010
governance
patsystems plc
annual report  accounts 2010 21
report of the board on directors’ remuneration and  
on group remuneration policy
remuneration committee
the remuneration committee which comprises all of and  
only nonexecutive directors determines group remuneration 
policy and the remuneration including annual bonuses and 
longterm incentives of executive directors and certain other 
senior management
policy on group remuneration
the company’ s policy is to set the remuneration of senior 
executives including executive directors at a level to attract 
and retain executives of appropriate ability and experience to 
manage the affairs of the company this approach contains 
costs improves employee benefits and increases the company’ s 
competitiveness in the market for scarce skills in formulating its 
remuneration policy the remuneration committee is mindful of 
the competitive pressures inherent in a sector that straddles 
both the software and financial services industries it is the 
company’s policy that a significant element of total 
remuneration is related to the financial performance of the 
company remuneration is reviewed annually
the remuneration package
the remuneration package comprises base salary and benefits 
pension contributions annual bonus and longterm incentive 
arrangements all senior employees of the group including 
the executive directors are remunerated using the policy 
described below
base salary and benefits
base salary takes into account the performance of the individual 
and information from independent sources on market levels of 
remuneration the executive directors’ basic salaries are 
reviewed by the committee prior to the beginning of each year 
the executive directors are also entitled to private medical 
death in service critical illness and permanent health insurance 
and subsidised health club membership
pension contributions
the group operates a defined contribution pension scheme for 
eligible uk employees neither of the executive directors are 
members of this scheme the executive directors receive a 
company contribution to their individual pension arrangements
annual bonuses
bonus scheme arrangements are in place for all members of staff 
including the executive directors bonuses for the executive 
directors are linked to the financial performance of the group 
and staff bonuses are based on individual performance
longterm incentives
share options
the group operates two share option plans – an enterprise 
management incentive share option scheme ‘emi’ and a 
standard unapproved share option scheme all senior staff 
including the executive directors participate in both schemes
options awarded under the three main grants as detailed 
below are now 100 exercisable as they have vested
the company has also made a number of special awards under 
both schemes to directors and senior employees which vested 
in between one and three years from the date of grant subject 
to certain performance conditions these awards as detailed 
below are now 100 exercisable as they have vested
2007 cashbased longterm incentive scheme
during 2007 the group introduced a new cashbased long
term incentive scheme ‘the 2007 cash scheme’ as disclosed 
in the company’ s report and accounts for 2009 all awards 
under the 2007 cash scheme fully vested in march 2010 the 
maximum conditional award allowable under the three year 
2007 cash scheme was 100 of salary with each award 
vesting no earlier than the third anniversary from date of grant 
and vesting being subject to achievement of performance 
conditions and continued employment ‘the awards’ when 
the awards to the directors vest they will be expected to use 
50 of the net of tax amount to purchase the company’ s 
shares in the open market until such time as a total personal 
shareholding has been achieved which is equivalent to 100 of 
base salary in the event of a change of control eg a takeover 
the awards will vest provided the remuneration committee is 
satisfied that it is fair and reasonable for them to do so eg that 
the terms of a takeover implicitly reflect prospective 
performance on a scale that would have resulted in full vesting
 
payments to the directors under the 2007 cash scheme are 
detailed in the emoluments table overleaf no further awards 
will be made under the 2007 cash scheme as it is being 
replaced by the sharebased longterm incentive scheme 
detailed below
new sharebased longterm incentive scheme
the remuneration committee was unable for reasons beyond 
its control to introduce the scheme referred to in last year’ s 
report it intends to introduce a modified version of that scheme 
early in 2011 the new scheme will be open to the executive 
directors and certain other key senior staff 
an annual award of shares will be made to participants on an 
individual basis up to a maximum award of 100 of basic 
salary no award will vest if eps calculated on an adjusted profit 
basis as detailed in the finance director’ s review growth over 
the preceding year is less than 75 the maximum level of 
vesting will occur only if eps growth reaches 20 with a 
pro rata award vesting between 75 and 20 once granted 
the shares will only vest unconditionally three years from date of 
conditional vesting provided the individual is still employed by 
the company 
if at the date of vesting unconditionally the compound annual 
eps growth over the previous 3 year period is greater than 10 
then an additional award a ‘matching share award’ will be 
made on a sliding scale between 5 for compound growth of 
10 and 100 for compound growth of 20 or better of 
the original value of the annual award matching share awards 
will vest unconditionally only if the individual is still employed by 
the company 12 months after the grant of such award in the 
event of a change of control the scheme provides for 
accelerated vesting governance
patsystems plc
annual report  accounts 2010 22
patsystems plc
annual report  accounts 2010
report of the board on directors’ remuneration and  
on group remuneration policy continued
directors’ emoluments
      benefits total t otal
   salaryfees bonus ltip in kind 2010 2009
   £ £ £ £ £ £
executive directors      
d webber   255000 – 130000 5608 390608 405039
m thorneycroft   161160 – 85000 3981 250141 256699
      
nonexecutive directors      
r last   45000 – – – 45000 45000
j priestley   30000 – – – 30000 30000
s sparke   10894 – – – 10894 30900
s douglasmann   19194 – – – 19194 –
   521248 – 215000 9589 745837 767638
s sparke resigned on 10 may 2010 and s douglasmann was appointed on 10 may 2010
pensions
the group operates a defined contribution pension scheme for eligible uk employees the executive directors that served  
during the year were not members of this scheme the following contributions to their private pensions were charged to  
the income statement
       2010 2009
       £ £
d webber       26479 25960
m thorneycroft       16735 16407
       43214 42367
directors’ contractual terms
    d webber m thorneycroft r last j priestley s douglasmann
date appointed    03jan06 05jul04 17feb03 01jan07 10may10
service contract    yes yes no no no
notice period     
– by company    12 months 6 months 3 months 3 months 3 months
– by director    12 months 6 months 3 months 3 months 3 months
benefits    death in service death in service – – –
pension    10 10 – – –
 all the nonexecutive directors are engaged under ‘letters of appointment’
in the event that an offer for the entire issued share capital of patsystems plc becomes wholly unconditional the executive and 
nonexecutive directors are entitled to 12 months’ notice patsystems plc
annual report  accounts 2010
governance
patsystems plc
annual report  accounts 2010 23
directors’ share options
    outstanding  outstanding  
    options at exercised options at  
  scheme exercise 31 december during 31 december exercise expiry
  type price 2009 the year 2010 date date
d webber  unapproved 2900p 1000000 – 1000000 note 1 190417
    1000000 – 1000000  
       
  emi 1525p 655737 – 655737 note 2 300714
  unapproved 1525p 344263 – 344263 note 3 300714
m thorneycroft  unapproved 1800p 500000 – 500000 note 3 170315
    1500000 – 1500000
the ifrs 2 charge to the income statement in relation to these options was £12522
note 1 these options were granted under special awards of part b inland revenue unapproved of the patsystems plc 2003 share 
option scheme these options are now 100 exercisable
note 2 options were granted under the second and third awards of the enterprise management incentive ‘emi’ scheme these 
options are now 100 exercisable 
note 3 these options were granted under the second and third awards of part b inland revenue unapproved of the patsystems 
plc 2003 share option scheme these options are 100 exercisable
the midmarket price of the company’s shares at the end of the financial year was 25p and the range of market prices during the 
year was 21p to 31p
directors’ awards under the cashbased longterm incentive scheme
the cashbased longterm incentive scheme is described above the awards vested in full in march 2010 and payments to the 
directors are detailed in the emoluments table on page 22
stewart douglasmann
chairman remuneration committee
7 february 2011 patsystems plc
annual report  accounts 2010 24
financial statements
independent auditors’ report to the members  
of patsystems plc
we have audited the group financial statements of patsystems 
plc for the year ended 31 december 2010 which comprise the 
consolidated income statement consolidated statement of 
comprehensive income consolidated balance sheet 
consolidated statement of changes in equity consolidated 
cash flow statement and the related notes the financial 
reporting framework that has been applied in their preparation 
is applicable law and international financial reporting standards 
ifrss as adopted by the european union
respective responsibilities of directors and auditors
as explained more fully in the directors’ responsibilities 
statement set out on page 18 the directors are responsible for 
the preparation of the financial statements and for being 
satisfied that they give a true and fair view our responsibility  
is to audit and express an opinion on the financial statements  
in accordance with applicable law and international standards 
on auditing uk and ireland those standards require us to 
comply with the auditing practices board’ s ethical standards  
for auditors
this report including the opinions has been prepared for and 
only for the company’s members as a body in accordance with 
chapter 3 of part 16 of the companies act 2006 and for no 
other purpose we do not in giving these opinions accept or 
assume responsibility for any other purpose or to any other 
person to whom this report is shown or into whose hands it 
may come save where expressly agreed by our prior consent  
in writing
scope of the audit of the financial statements
an audit involves obtaining evidence about the amounts  
and disclosures in the financial statements sufficient to give 
reasonable assurance that the financial statements are free  
from material misstatement whether caused by fraud or  
error this includes an assessment of whether the accounting  
policies are appropriate to the group’s circumstances and  
have been consistently applied and adequately disclosed  
the reasonableness of significant accounting estimates  
made by the directors and the overall presentation of the 
financial statements
opinion on financial statements 
in our opinion the group financial statements 
give a true and fair view of the state of the group’ s affairs as •	
at 31 december 2010 and of its profit and cash flows for the 
year then ended
have been properly prepared in accordance with ifrss as •	
adopted by the european union and 
have been prepared in accordance with the requirements of •	
the companies act 2006
opinion on other matter prescribed by the  
companies act 2006
in our opinion the information given in the directors’ report for 
the financial year for which the group financial statements are 
prepared is consistent with the group financial statements
matters on which we are required to report by exception
we have nothing to report in respect of the following matters 
where the companies act 2006 requires us to report to you if 
in our opinion 
certain disclosures of directors’ remuneration specified by •	
law are not made or 
we have not received all the information and explanations •	
we require for our audit 
other matter 
we have reported separately on the parent company financial 
statements of patsystems plc for the year ended 31 december 
2010
nigel reynolds 
senior statutory auditor
for and on behalf of pricewaterhousecoopers llp
chartered accountants and statutory auditors
london
7 february 2011 financial statements
patsystems plc
annual report  accounts 2010 25
consolidated income statement
for the year ended 31 december 2010
       2010 2009
      notes £’000 £’000
revenue      4 22111 22097
cost of sales         628 555
gross profit        21483 21542
operating expenses         18390 17196
operating profit       5 3093 4346
finance income       7 145 140
profit before income tax       3238 4486
current tax charge        99 249
deferred tax charge        588 875
t axation – total      8 687 1124
profit for the year attributable to equity holders of the company       2551 3362
earnings per ordinary share       10  
– basic       14p 19p
– diluted        14p 18p
the income statement has been prepared on the basis that all operations are continuing operations 
consolidated statement of comprehensive income
for the year ended 31 december 2010
       2010 2009
       £’000 £’000
profit for the year       2551 3362
other comprehensive income   
foreign exchange adjustment on foreign currency net investments     267 162
total comprehensive income for the year        2818 3200 financial statements
patsystems plc
annual report  accounts 2010 26
patsystems plc
annual report  accounts 2010
consolidated balance sheet
at 31 december 2010
       2010 2009
      notes £’000 £’000
assets   
noncurrent assets   
goodwill      12 3251 3251
intangible assets      13 3403 3426
property plant and equipment      14 1148 689
deferred tax assets      15 4467 4945
trade and other receivables      17 427 326
         12696 12637
current assets   
inventories      16 – 1
trade and other receivables      17 6632 5006
financial assets – derivative financial instruments      27 46 176
income tax       – 8
cash and cash equivalents      18 9344 8896
         16022 14087
liabilities   
current liabilities   
trade and other payables      19 3023 2793
current income tax liabilities       8 98
provisions      20 – 317
         3031 3208
net current assets        12991 10879
noncurrent liabilities   
provisions      20 32 8
         32 8
net assets        25655 23508
equity   
capital and reserves attributable to equity holders of the company
share capital      22 1866  1853
share premium account      24 4641  4493
other reserves      24 20862  20862
retained earnings      24 1714 3700
total equity      25 25655  23508
the financial statements on pages 25 to 52 were approved by the board of directors on 7 february 2011
david webber martin thorneycroft
chief executive officer finance director
patsystems plc company number 4498002 patsystems plc
annual report  accounts 2010
financial statements
patsystems plc
annual report  accounts 2010 27
consolidated statement of changes in equity 
for the year ended 31 december 2010
     share
    share premium other retained 
    capital account reserves earnings 
    £’000 £’000 £’000 £’000 £’000
at 1 january 2010    1853 4493 20862 3700 23508
profit for the year    – – – 2551 2551
other comprehensive income     
– foreign exchange movement    – – – 267 267
t otal comprehensive income for the period     – – – 2818 2818
shares issued in the year    13 148 – – 161
dividends paid    – – – 892 892
share compensation expense    – – – 60 60
at 31 december 2010    1866 4641 20862 1714 25655
of the other reserve at 31 december 2010 £20812000 relates to a merger reserve
     share
    share premium other retained 
    capital account reserves earnings 
    £’000 £’000 £’000 £’000 £’000
at 1 january 2009    1795 3869 20862 6472 20054
profit for the year    – – – 3362 3362
other comprehensive income     
– foreign exchange movement    – – – 162 162
t otal comprehensive income for the period     – – – 3200 3200
shares issued in the year    58 624 – – 682
dividends paid    – – – 689 689
share compensation expense    – – – 261 261
at 31 december 2009    1853 4493 20862 3700 23508
of the other reserve at 31 december 2009 £20812000 relates to a merger reserve financial statements
patsystems plc
annual report  accounts 2010 28
patsystems plc
annual report  accounts 2010
consolidated cash flow statement
for the year ended 31 december 2010
       2010 2009
       £’000 £’000
cash flows from operating activities  
cash flows from operations       2843 4292
interest received       145 140
t ax paid       186 149
net cash flows from operating activities       2802 4283
cash from investing activities  
purchase of intangible assets       812 653
purchase of property plant and equipment       932 596
net cash flows used in investing activities        1744 1249
cash flows from financing activities  
net proceeds from issue of ordinary share capital        161 682
dividends paid to company’ s shareholders       892 689
net cash flows used in financing activities       731 7
net increase in cash and cash equivalents       327 3027
cash and cash equivalents at beginning of the period       8896 5929
effect of exchange rates on cash and cash equivalents      121 60
cash and cash equivalents at end of the period       9344 8896
reconciliation of net profit to net cash flows from operating activities
       2010 2009
       £’000 £’000
net profit       2551 3362
tax        687 1124
depreciation of property plant and equipment        508 419
amortisation of intangible assets        807 753
write off of intangible assets       29 –
share compensation expense        60 261
finance income       145 140
decrease in inventories        1 2
increasedecrease in trade and other receivables        1605 1123
decreaseincrease in financial assets        130 1029
increasedecrease in trade and other payables        113 1687
decreaseincrease in provisions        293 104
cash flows from operating activities        2843 4292 patsystems plc
annual report  accounts 2010
financial statements
patsystems plc
annual report  accounts 2010 29
notes to the financial statements
1 accounting policies
the principal accounting policies applied in the preparation of these consolidated financial statements are set out below these 
policies have been consistently applied to all the years presented unless otherwise stated
11 accounting convention and basis of preparation
these financial statements have been prepared in accordance with international financial reporting standards ‘ifrs’ and ifric 
interpretations endorsed by the european union ‘eu’ and with those parts of the companies act 19852006 applicable to 
companies reporting under ifrs 
the results and net assets of subsidiary undertakings acquired are included in the consolidated income statement and consolidated 
balance sheet using the acquisition method of accounting from the effective date of acquisition
these consolidated financial statements have been prepared under the historical cost convention with the exception of financial 
instruments which are stated in accordance with ias 39 financial instruments recognition and measurement
the preparation of financial statements in conformity with ifrs requires the use of certain critical accounting estimates it also 
requires management to exercise its judgement in the process of applying the group’s accounting policies the areas involving a 
high degree of judgement or complexity or areas where assumptions and estimates are significant to the consolidated financial 
statements are disclosed in note 2
new and amended standards adopted by the group
the following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 
january 2010
ifrs 3 revised ‘business combinations’ and consequential amendments to ias 27 ‘consolidated and separate financial •	
statements’ ias 28 ‘investments in associates’ and ias 31 ‘interests in joint ventures’ are effective prospectively to business 
combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or 
after 1 july 2009 the revised standard continues to apply the acquisition method to business combinations but with some 
significant changes compared with ifrs 3 for example all payments to purchase a business are recorded at fair value at the 
acquisition date with contingent payments classified as debt subsequently remeasured through the statement of 
comprehensive income there is a choice on an acquisitionbyacquisition basis to measure the noncontrolling interest in the 
acquiree either at fair value or at the noncontrolling interest’ s proportionate share of the acquiree’ s net assets all acquisition
related costs are expensed
new and amended standards and interpretations mandatory for the first time for the financial year beginning 
1 january 2010 but not currently relevant to the group
the following standards and amendments to existing standards have been published and are mandatory for the group’ s 
accounting periods beginning on or after 1 january 2010 or later periods but the group has not early adopted them
ias 27 revised requires the effects of all transactions with noncontrolling interests to be recorded in equity if there is no •	
change in control and these transactions will no longer result in goodwill or gains and losses the standard also specifies the 
accounting when control is lost any remaining interest in the entity is remeasured to fair value and a gain or loss is recognised 
in profit or loss ias 27 revised has had no impact on the current period as none of the noncontrolling interests have a deficit 
balance there have been no transactions whereby an interest in an entity is retained after the loss of control of that entity and 
there have been no transactions with noncontrolling interests
ifric 17 ‘distribution of noncash assets to owners’ effective on or after 1 july 2009 the interpretation was published in •	
november 2008 this interpretation provides guidance on accounting for arrangements whereby an entity distributes noncash 
assets to shareholders either as a distribution of reserves or as dividends ifrs 5 has also been amended to require that assets 
are classified as held for distribution only when they are available for distribution in their present condition and the distribution 
is highly probable
ifric 18 ‘transfers of assets from customers’ effective for transfer of assets received on or after 1 july 2009 this interpretation •	
clarifies the requirements of ifrss for agreements in which an entity receives from a customer an item of property plant and 
equipment that the entity must then use either to connect the customer to a network or to provide the customer with ongoing 
access to a supply of goods or services in some cases the entity receives cash from a customer that must be used only to 
acquire or construct the item of property plant and equipment in order to connect the customer to a network or provide the 
customer with ongoing access to a supply of goods or services or to do both
ifric 9 ‘reassessment of embedded derivatives and ias 39 financial instruments recognition and measurement’ effective 1 july •	
2009 this amendment to ifric 9 requires an entity to assess whether an embedded derivative should be separated from a host 
contract when the entity reclassifies a hybrid financial asset out of the ‘fair value through profit or loss’ category this assessment is 
to be made based on circumstances that existed on the later of the date the entity first became a party to the contract and the 
date of any contract amendments that significantly change the cash flows of the contract if the entity is unable to make this 
assessment the hybrid instrument must remain classified as at fair value through profit or loss in its entirety financial statements
patsystems plc
annual report  accounts 2010 30
patsystems plc
annual report  accounts 2010
notes to the financial statements continued
1 accounting policies continued
ifric 16 ‘hedges of a net investment in a foreign operation’ effective 1 july 2009 •	
this amendment states that in a hedge of a net investment in a foreign operation qualifying hedging instruments may be held 
by any entity or entities within the group including the foreign operation itself as long as the designation documentation and 
effectiveness requirements of ias 39 that relate to a net investment hedge are satisfied in particular the group should clearly 
document its hedging strategy because of the possibility of different designations at different levels of the group 
ias 1 amendment ‘presentation of financial statements’ the amendment clarifies that the potential settlement of a liability by •	
the issue of equity is not relevant to its classification as current or non current by amending the definition of current liability the 
amendment permits a liability to be classified as noncurrent provided that the entity has an unconditional right to defer 
settlement by transfer of cash or other assets for at least 12 months after the accounting period notwithstanding the fact that 
the entity could be required by the counterparty to settle in shares at any time
ias 36 amendment ‘impairment of assets’ effective 1 january 2010 the amendment clarifies that the largest cashgenerating •	
unit or group of units to which goodwill should be allocated for the purposes of impairment testing is an operating segment as 
defined by paragraph 5 of ifrs 8 ‘operating segments’
ifrs 2 amendments ‘group cashsettled sharebased payment transactions’ effective from 1 january 2010 in addition to •	
incorporating ifric 8 ‘scope of ifrs 2’ and ifric 11 ‘ifrs 2 – group and treasury share transactions’ the amendments expand 
on the guidance in ifric 11 to address the classification of group arrangements that were not covered by that interpretation
ifrs 5 amendment ‘noncurrent assets held for sale and discontinued operations’ the amendment clarifies that ifrs 5 •	
specifies the disclosure required in respect of noncurrent assets or disposal groups classified as held for sale or discontinued 
operations it also clarifies that the general requirement of ias 1 still apply in particular paragraph 15 to achieve a fair 
presentation and paragraph 125 sources of estimation uncertainty of ias 1
new standards amendments and interpretations issued but not effective for the financial year beginning 1 january 
2010 and not early adopted 
ifrs 9 ‘financial instruments’ issued in november 2009 this standard is the first step in the process to replace ias 39 ‘financial •	
instruments recognition and measurement’ ifrs 9 introduces new requirements for classifying and measuring financial assets 
and is likely to affect the group’ s accounting for its financial assets the standard is not applicable until 1 january 2013 but is 
available for early adoption however the standard has not yet been endorsed by the eu
classification of rights issues amendment to ias 32 issued in october 2009 the amendment applies to annual periods beginning •	
on or after 1 february 2010 earlier application is permitted the amendment addresses the accounting for rights issues that are 
denominated in a currency other than the functional currency of the issuer provided certain conditions are met such rights issues 
are now classified as equity regardless of the currency in which the exercise price is denominated previously these issues had to be 
accounted for as derivative liabilities the amendment applies retrospectively in accordance with ias 8 ‘accounting policies changes 
in accounting estimates and errors’ the group will apply the amended standard from 1 january 2011
ifric 19 ‘extinguishing financial liabilities with equity instruments’ effective 1 july 2010 the interpretation clarifies the •	
accounting by an entity when the terms of a financial liability are renegotiated and result in the entity issuing equity instruments 
to a creditor of the entity to extinguish all or part of the financial liability debt for equity swap it requires a gain or loss to be 
recognised in profit or loss which is measured as the difference between the carrying amount of the financial liability and the fair 
value of the equity instruments issued if the fair value of the equity instruments issued cannot be reliably measured the equity 
instruments should be measured to reflect the fair value of the financial liability extinguished the group will apply the 
interpretation from 1 january 2011 subject to endorsement by the eu 
‘prepayments of a minimum funding requirement’ amendments to ifric 14 the amendments correct an unintended •	
consequence of ifric 14 ‘ias 19 – the limit on a defined benefit asset minimum funding requirements and their interaction’ 
without the amendments entities are not permitted to recognise as an asset some voluntary prepayments for minimum funding 
contributions this was not intended when ifric 14 was issued and the amendments correct this the amendments are effective 
for annual periods beginning 1 january 2011 earlier application is permitted the amendments should be applied retrospectively 
to the earliest comparative period presented the group will apply these amendments for the financial reporting period 
commencing on 1 january 2011
the above amendments are not expected to have a material impact on the group or company’ s financial statements
revised ias 24 revised ‘related party disclosures’ issued in november 2009 it supersedes ias 24 ‘related party disclosures’ •	
issued in 2003 ias 24 revised is mandatory for periods beginning on or after 1 january 2011 earlier application in whole or in 
part is permitted however the standard has not yet been endorsed by the eu the revised standard clarifies and simplifies the 
definition of a related party and removes the requirement for governmentrelated entities to disclose details of all transactions 
with the government and other governmentrelated entities the group will apply the revised standard from 1 january 2011 
when the revised standard is applied the group will need to disclose any transactions between its subsidiaries the group is 
currently assessing the impact of this standard patsystems plc
annual report  accounts 2010
financial statements
patsystems plc
annual report  accounts 2010 31
12 foreign currency translation
functional and presentation currency
items included in the financial statements of each of the group entities are measured using the currency of the primary economic 
environment in which the entity operates the ‘functional currency’ the consolidated financial statements are presented in pounds 
sterling which is the parent company’ s functional and presentation currency
transactions and balances
foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of  
the transactions foreign exchange gains and losses resulting from the settlement of such transactions and from the translation  
at yearend exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the  
income statement
group companies
the results and financial position of all group entities none of which has the currency of a hyperinflationary economy that have  
a functional currency different from the presentation currency are translated into the presentation currency as follows
assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet •	
income and expenses for each income statement are translated at average exchange rates and •	
all resulting exchange differences are recognised in reserves •	
13 goodwill
goodwill represents the excess of the cost of an acquisition over the fair value of the group’ s share of the net identifiable assets of 
the acquired subsidiary at the date of acquisition goodwill is tested annually for impairment and carried at cost less accumulated 
impairment losses the carrying value of capitalised goodwill is also reviewed if events or changes in circumstances indicate a 
potential impairment any impairment is charged to the income statement gains and losses on the disposal of an entity include  
the carrying amount of goodwill relating to the entity sold goodwill is allocated to cashgenerating units for the purpose of 
impairment testing
14 intangible assets 
computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software the 
software acquired in the t amesis acquisition was capitalised at fair value these costs are amortised over their estimated useful lives 
three years costs associated with maintaining computer software programmes are recognised as an expense as incurred
15 impairment of assets
assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment and whenever 
events or changes in circumstance indicate that the carrying value may not be recoverable assets that are subject to amortisation 
are tested for impairment whenever events or changes in circumstance indicate that the carrying value may not be recoverable an 
impairment loss is recognised for the amount by which the assets carrying value exceeds its recoverable amount the recoverable 
amount is the higher of an asset’s fair value less costs to sell and value in use for the purposes of assessing impairment assets are 
grouped at the lowest levels for which there are separately identifiable cash flows cash generating units
16 research and development
research expenditure is recognised as an expense as incurred costs directly attributable to development are capitalised as intangible 
assets when it is probable that the development will provide economic benefits considering its commercial and technical feasibility 
resources are available for the development and costs can be measured reliably other development expenditures are recognised as 
costs when incurred capitalised product development is amortised from completion of development over periods of between 3 
and 5 years
17 property plant and equipment
property plant and equipment is shown at cost less subsequent depreciation cost includes expenditure that is directly attributable 
to the acquisition of the items
depreciation on assets is calculated using the straightline method to reduce the cost of each asset to its estimated residual value 
over its estimated useful life as follows
leasehold improvements – over the period of the lease
plant and equipment – over 3 years
office furniture fixtures and fittings – over 4 years
18 current and deferred income taxes
the current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date 
in the countries in which the company and its subsidiaries operate and generate taxable income management periodically 
evaluates positions taken in tax returns with respect to situations in which applicable tax regulations are subject to interpretation 
and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities financial statements
patsystems plc
annual report  accounts 2010 32
patsystems plc
annual report  accounts 2010
notes to the financial statements continued
1 accounting policies continued
deferred income tax is provided in full using the liability method on temporary differences arising between the tax bases of assets 
and liabilities and their carrying amounts in the consolidated financial statements the deferred income tax is not accounted for on 
the initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction 
affects neither accounting nor taxable profit or loss deferred income tax is determined using tax rates and laws that have been 
enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset  
is realised or the deferred income tax liability is settled
deferred income tax assets are recognised to the extent that it is probable that future taxable profits will be available against which 
the temporary differences can be utilised
deferred income tax is provided on temporary differences arising on investments in subsidiaries except where the timing of the 
reversal of the temporary difference is controlled by the group and it is probable that the temporary difference will not reverse in 
the foreseeable future
deferred income tax balances are not discounted
19 inventories
inventories are stated at the lower of cost and net realisable value 
110 financial assets
the group classifies its financial assets between ‘assets at fair value through profit or loss’ and ‘loans and receivables’ the 
classification depends on the purpose for which the financial assets were acquired management determines the classification  
of its financial assets at initial recognition 
financial assets at fair value through profit or loss are financial assets held for trading a financial asset is classified in this category  
if acquired principally for the purpose of selling in the short term derivatives are also categorised as held for trading unless they are 
designated as hedges assets in this category are classified as current assets
 
purchases and sales of financial assets are recognised on the tradedate – the date on which the group commits to purchase or sell 
the asset financial assets are initially recognised at fair value and transaction costs are expensed in the income statement financial 
assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the 
group has transferred substantially all risks and rewards of ownership 
gains or losses arising from changes in the fair value of the financial assets are presented in the income statement in the period in 
which they arise 
the group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial 
assets is impaired impairment testing of trade receivables is described in note 112
111 accounting for derivative financial instruments and hedging activities
the group enters into forward currency contracts and options in order to hedge against the cash flow risk of foreign currency 
exchange rate movements derivatives are initially recognised at fair value on the date the contract is entered into and subsequently 
remeasured in future periods at their fair value the movement in fair values is taken to the income statement
the fair value of forward contracts is determined using forward exchange market rates at the balance sheet date
112 trade receivables
trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest 
method less provision for impairment a provision for impairment of trade receivables is established when there is objective 
evidence that the group will not be able to collect all amounts due under the original terms of the receivables significant financial 
difficulties of the debtor probability that the debtor will enter bankruptcy or financial reorganisation and default or delinquency in 
payments are considered indicators that the trade receivable may be impaired the amount of the provision is the difference 
between the asset’s carrying amount and the present value of estimated future cash flows discounted at the original effective 
interest rate the carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is 
recognised in the income statement within ‘operating expenses’ when a trade receivable is uncollectible it is written off against 
the allowance account for trade receivables subsequent recoveries of amounts previously written off are credited against ‘operating 
expenses’ in the income statement 
113 cash and cash equivalents
cash and cash equivalents includes cash in hand cash in transit deposits held at call with banks other short term highly liquid 
investments with original maturities of three months or less and bank overdrafts patsystems plc
annual report  accounts 2010
financial statements
patsystems plc
annual report  accounts 2010 33
cash in transit represents the net amount of monies due to group companies that have been paid to independent clearing agents 
and are pending release by overseas withholding tax authorities
114 trade payables
trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method
115 leases
costs in respect of operating leases are charged to the income statement on a straight line basis over the lease term 
116 provisions
provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pretax rate 
that reflects current market assessments of the time value of money and the risks specific to the obligation this relates to provisions 
including dilapidations and longterm share incentive schemes
117 segment reporting
operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decisionmaker 
the chief operating decisionmaker who is responsible for allocating resources and assessing performance of the operating 
segments has been identified as the board of directors
118 revenue recognition
revenue comprises the fair value of the sale of goods and services net of value added tax revenue is recognised as follows
nonrefundable installation income consultancy and software development projects revenue is taken to the income statement •	
in line with the performance of the work 
monthly end user or lot charges monthly maintenance and income on any rentals – these are credited to the income statement •	
in the period in which the service is provided
income from perpetual licences – this is recognised in the income statement when the group has fulfilled all of its obligations in •	
accordance with the terms for acceptance set out in the customer contracts and it is probable that economic benefits associated 
with the transaction will flow to the group
revenue relating to development projects is recognised using the percentage of completion method based primarily on contract •	
costs incurred to date compared to estimated overall contract costs 
119 employee benefits
pension obligations
the group operates a defined contribution scheme which is open to uk and us employees
the group pays contributions to publicly or privately administered pension insurance schemes on a mandatory contractual or 
voluntary basis the group has no further payment obligations once the contributions have been paid the contributions are 
recognised as employee benefit expense when they are due
termination benefits
termination benefits are payable when employment is terminated before the normal retirement date or when an employee  
accepts voluntary redundancy in exchange for these benefits the group recognises termination benefits when it is demonstrably 
committed to either terminating the employment of current employees according to a detailed formal plan without possibility  
of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy
sharebased benefits
the group operates two share options schemes the enterprise management incentive scheme and the 2003 share option scheme 
inland revenue unapproved 
the fair value of options is recognised as an employee benefit expense with a corresponding increase in reserves over the vesting 
period the proceeds received net of any directly attributable transaction costs are credited to share capital nominal value and 
share premium when the options are exercised a detailed explanation of how the fair values have been derived can be seen  
in note 23
cashbased longterm incentive benefits
the group introduced a cashbased longterm incentive scheme the ‘2007 cash scheme’ in 2007 and awards were granted to the 
executive directors and to certain senior and key employees these awards were conditional upon the rate of growth in fully diluted 
predeferred tax eps over the period from 31 december 2006 to 31 december 2009 the cost of these awards was estimated 
based on projected eps growth and is recognised as an employee benefit expense on a straight line basis over the period from grant 
to march 2010 when the awards fully vested financial statements
patsystems plc
annual report  accounts 2010 34
patsystems plc
annual report  accounts 2010
notes to the financial statements continued
1 accounting policies continued
other benefits
uk employees are also entitled to private medical death in service insurance critical illness and longterm sickness insurance and 
subsidised health club membership the costs of providing these benefits are recognised as employee benefit expense as they fall due
this year the group has a flexible benefits scheme that enables employees to tailor their total remuneration packages to meet their 
own individual lifestyle and family requirements 
120 dividend distributions 
final dividend distributions to the company’s shareholders are recognised as liabilities in the group’s financial statements in the 
period in which the dividends are approved by the company’ s shareholders interim dividend distributions to the company’ s 
shareholders are recognised as liabilities in the group’ s financial statements when paid
2 critical accounting estimates and judgements
estimates and judgements are continually evaluated and are based on historical experience and other factors including expectations 
of future events that are believed to be reasonable under the circumstances
the group makes estimates and assumptions concerning the future the resulting accounting estimates will by definition seldom 
equal the related actual results the estimates and assumptions that have a significant risk of causing a material adjustment to the 
carrying amounts of assets and liabilities within the next financial year are addressed below
capitalisation of research and development costs •	
impairment reviews for intangible assets •	
development projects where the percentage completion method is used this requires the group to estimate the development •	
performed to date as a proportion of the total development to be performed another uncertainty is the expected total profit
in applying the group’ s revenue recognition policy management undertake judgements in relation to the recoverability of current •	
and future billings these amounts are disclosed within trade receivables and accrued income
deferred tax see note 15 •	
irfs 2 sharebased payment charge and the provision for the cashbased longterm incentive scheme where judgement has •	
been applied as to the number of awards expected to vest
3 financial risk management
the group’ s activities expose it to a variety of financial risks and it has developed and operates an overall risk management 
programme that recognises the unpredictability of financial markets and seeks to minimise potential adverse effects on the group’ s 
financial performance 
financial risk management is under the control of the finance director and is carried out centrally for the group in compliance with 
policies approved and monitored by the full board the board regularly reviews the effectiveness of these policies examining specific 
areas including foreign exchange risk interest rate risk credit risk and the extent to which financial instruments are being used to 
hedge certain risk exposures 
31 market risk 
the principal market risk to which the the group is exposed is foreign currency risk on sales purchases and cash balances that are 
denominated in a currency other than sterling the principal currency giving rise to this risk is the us dollar patsystems’ policy is to 
carry forward cover for 75 of us£ net anticipated exposure for 12 months forward forward cover is achieved through a 
mixture of forward contracts and options this policy has remained unchanged throughout both 2010 and 2009 although the level 
of cover and the exposure to risks on other foreign currencies are kept under regular review
the average us£ exchange rate used in the 2010 income statement was 154 2009 157 the average rate of the hedges in 
place at 31 december 2010 for 2011 was 158 2009 for 2010 160 the fair value of these hedges is recognised as a financial 
asset of £46000 2009 asset of £176000 on the group balance sheet at the year end
the group has certain investments in foreign operations whose net assets are exposed to foreign currency translation risk this 
exposure is minimised by a group policy requiring individual subsidiaries to remit any surplus funds to the parent company to 
facilitate central management as set out above and to enable each individual subsidiary to match remaining assets and liabilities 
denominated in their specific functional currencies
during the year ended 31 december 2010 the us£ exchange rate fluctuated between 144 and 160 2009 between 142  
and 165 at 31 december 2010 if the us had weakenedstrengthened by 20 against the £ with all other variables held 
constant post tax profit for the year would have been £915000 2009 £630000 lowerhigher mainly as a result of foreign 
exchange gainslosses on translation of us denominated trade receivables
the group is also exposed to interest rate risks on the fair values of the hedging instruments that it holds and on the cash flows 
arising from any interest bearing cash deposits these assets are regularly realised to settle trade and other payables as part of the  patsystems plc
annual report  accounts 2010
financial statements
patsystems plc
annual report  accounts 2010 35
group’ s management of its liquidity risks the group has no material borrowings and accordingly exposures to interest rate risks are 
not regarded as significant
32 credit risk 
credit risk arises from cash and cash equivalents and from credit exposures to the group’ s customers including outstanding 
receivables and committed transactions credit risk is managed centrally with regular reports of exposures reviewed by the board 
the group does not set individual credit limits but will seek to ensure that counterparties enter into legally enforceable contracts 
that include settlement terms that demonstrate the counterparties’ commitment to the transaction and minimise this risk exposure 
the board does not assess the credit quality of financial assets by reference to external credit ratings but will regularly examine the 
ageing of financial assets and individual counterparty historic default rates an aged analysis of trade receivables at 31 december 
2010 is set out in note 17 
33 liquidity risk 
the group has no borrowings or committed credit lines and its liquidity management policy is carried out at a local level and 
involves projecting cash flows in major currencies and considering the levels of liquid assets necessary to meet these requirements 
are overseen by the board with group levels of cash and cash equivalents reviewed on a monthly basis a maturity analysis of trade 
and other payables is shown in note 19
34 capital risk management
the group’ s objectives when managing capital are to safeguard the group’ s ability to continue as a going concern in order to 
provide returns for shareholders and benefits for other stakeholders consistent with others in the industry and of its size the 
group believes that an optimum capital structure is currently achieved entirely through equity and with no net debt t otal equity at 
31 december 2010 was £25655000 2009 £23508000
in order to maintain or adjust the capital structure the group may adjust the amount of dividends paid to shareholders return 
capital to shareholders issue new shares or raise future funds through debt financial statements
patsystems plc
annual report  accounts 2010 36
patsystems plc
annual report  accounts 2010
notes to the financial statements continued
4 segmental analysis
the chief operating decision maker is the board of directors the board reviews the company’ s internal reporting in order to assess 
performance of the business management has determined the operating segments based on the reports reviewed by the board 
the board considers the business from a geographic perspective monitoring performance by europe the americas and asia pacific
the group operates in one product line that of the supply of software to financial institutions
the board assesses the performance of the business based on a measure of adjusted profit adjusted profit is defined as ‘profit 
before tax after adjusting for share option costs markingtomarket of derivatives used to hedge cash flows and amortisation of 
intangibles other than internally developed software’ a reconciliation of adjusted profit to profit before tax is detailed below
       asia
     europe americas pacific total
 2010     £’000 £’000 £’000 £’000
revenue from external customers     8325 6056 7730 22111
revenue by destination     7773 5800 8538 22111
adjusted profit      2966 121 666 3753
depreciation and amortisation     1037 60 218 1315
finance income     139 3 3 145
income tax expense     358 155 174 687
t otal assets     22531 2274 3913 28718
t otal liabilities     1791 430 842 3063
       asia
     europe americas pacific t otal
 2009     £’000 £’000 £’000 £’000
revenue from external customers     7788 6745 7564 22097
revenue by destination     7518 6353 8226 22097
adjusted profit      2515 391 1015 3921
depreciation and amortisation     1065 31 76 1172
finance income     130 7 3 140
t axation expense     829 16 279 1124
t otal assets     21953 1569 3202 26724
t otal liabilities     2035 211 970 3216
a reconciliation of adjusted profit to profit before tax is provided as follows
       2010 2009
       £’000 £’000
adjusted profit for reportable segments       3753 3921
share compensation expense       60 261
movement in fair value of hedging instruments       338 1029
amortisation of intangibles       117 203
finance income         145 140
operating profit       3093 4346
finance income          145 140
profit before income tax         3238 4486
the amounts provided to management with respect to total assets and total liabilities are measured in a manner consistent with 
that of the financial statements the assets are allocated based on the operations of the segment and the physical location of the 
asset and the liabilities are allocated based on the operations of the segment
the total of noncurrent assets other than deferred tax assets located in europe is £7201000 2009 £7428000 and the total of 
these noncurrent assets located in other regions is £1028000 2009 £264000
revenue from one customer 2009 two customers accounts for more than 10 of total revenue with revenue of £3232000 
2009 £3574000 and £2560000 these revenues are attributable to all segments patsystems plc
annual report  accounts 2010
financial statements
patsystems plc
annual report  accounts 2010 37
5 operating profit 
       2010 2009
operating profit is stated after chargingcrediting       £’000 £’000
staff costs       11900 12310
share compensation expense       60 261
t otal staff costs       11960 12571
less wages and salaries capitalised in accordance with ias 38      339 377
        11621 12194
depreciation  
 – owned tangible assets       508 419
 – total tangible assets       508 419
amortisation  
 – capitalised development costs       689 550
 – other intangible assets       118 203
 – total intangible assets       807 753
write off of intangible assets       29 –
operating lease costs  
 – plant and machinery       31 32
 – other       520 540
 – total operating lease costs       551 572
foreign exchange gainloss  
 – movement in fair value of hedging instruments       338 1029
 – other exchange gains and losses       64 455
 – total foreign exchange lossgain       274 574
services provided by the group’ s auditor and network firms
  
       2010 2009
       £’000 £’000
fees payable to the group’ s auditor for the audit of the group’ s annual accounts      36   35 
fees payable to the group’ s auditor and its associates for other services  
– the audit of the group’ s subsidiaries pursuant to legislation        53   51 
– tax services          39   41 
– human resource services        10   – 
all other services         33   33 
         171   160  financial statements
patsystems plc
annual report  accounts 2010 38
patsystems plc
annual report  accounts 2010
notes to the financial statements continued
6 staff costs
       2010 2009
       £’000 £’000
staff costs including directors’ emoluments during the year amounted to
wages and salaries        10101 10458
share compensation expense        60 261
social security costs        1099 1146
pension costs        700 706
       11960 12571
  
included in the above wages and salaries is £339000 2009 £377000 in relation to development costs that were capitalised in 
accordance with ias 38
the average monthly number of persons including directors employed by the group during the year in full time equivalents was
       2010 2009
       number number
sales account management and marketing        23 21
customer operations testing and technical        77 73
development and product development        45 48
finance administration and board        21 20
       166 162
details of the emoluments of the directors are contained in the report of the board on directors’ remuneration and group 
remuneration policy on page 22 under the heading ‘directors’ emoluments’
details of key management remuneration are shown in note 28
7 finance income 
       2010 2009
       £’000 £’000
bank interest receivable       113 78
interest receivable on the fair value of longterm receivables      29 37
other interest       3 25
       145 140
other interest relates to the interest received on an office rental deposit in the united states 2009 interest on the return of a rental 
deposit from the cottons centre premises and interest on the office rental deposit in the united states patsystems plc
annual report  accounts 2010
financial statements
patsystems plc
annual report  accounts 2010 39
8 tax on profit on ordinary activities
       2010 2009
       £’000 £’000
united kingdom   
withholding tax       9 12
foreign tax  
corporation tax – current year       72 177
corporation tax – in relation to prior year       30 60
withholding tax       48 –
total current tax       99 249
deferred tax 
movement in deferred tax note 15       588 875
taxation charge       687 1124
the tax for the year is different from that which would result from applying the standard rate of corporation t ax in the uk 28 
the differences are explained below
       2010 2009
       £’000 £’000
profit on ordinary activities before tax       3238 4486
profit on ordinary activities multiplied by standard rate of  
 corporation t ax in the uk of 28 2009 28       907 1256
effects of  
expenses not deductible for tax purposes       221 77
effect of differing tax rates on overseas earnings       18 87
withholding tax       57 11
adjustments in respect of prior years – corporation tax      30 60
adjustments in respect of prior years – deferred tax       101 46
rd tax losses       517 –
t ax losses for which no deferred tax asset has been recognised      17 7
remeasurement of deferred tax on change of uk rate      151 –
taxation charge        687 1124
from 1 april 2011 the uk corporation tax rate will change from 28 to 27 deferred tax assets have been remeasured at the 
rate of 27 
future tax balances will be affected by the proposed changes in the corporation t ax rates from 1 april 2012 26 1 april 2013 
25 and 1 april 2014 24
the group made successful claims for rd tax credits in relation to 2007 and 2008 which has resulted in additional tax losses being 
available in patsystems uk limited 
factors that may affect future tax charges
the group has unrelieved tax losses of £16640000 2009 £18128000 that are available for offset against future taxable profits 
in their respective territories a deferred tax asset amounting to £145000 2009 £156000 has not been recognised in respect of 
these losses as their future recovery is uncertain
9 parent company accounts 
the parent company accounts are set out in pages 53 to 59
10 earnings per ordinary share
in accordance with ias 33 the calculation of earnings per ordinary share is based upon
  
a basic earnings per share  
basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average 
number of ordinary shares in issue during the year financial statements
patsystems plc
annual report  accounts 2010 40
patsystems plc
annual report  accounts 2010
notes to the financial statements continued
10 earnings per ordinary share continued
      2010  2009
profit for the year attributable to equity holders of the company      £2551000 £3362000
weighted average number of shares      186146310 180628990
basic earnings per share      14p 19p
b diluted earnings per share  
diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume 
conversions of all dilutive potential ordinary shares 
the group has one category of dilutive potential ordinary shares share options
for share options a calculation is performed to determine the number of shares that could have been acquired at fair value 
determined as the average annual market price of the group’ s shares based on the monetary value of the subscription rights 
attached to the outstanding options 
the number of shares calculated above is compared with the number of shares that would have been issued assuming the exercise 
of the share options
      2010  2009
profit for the year attributable to equity holders of the company   £2551000 £3362000
weighted average number of shares      186146310 180628990
effect of dilutive share options      1170581 1628191
      187316891 182257181
diluted earnings per share      14p 18p
11 principal subsidiaries 
the principal investments in subsidiary undertakings held by the parent company are as follows
1 a 100 investment in respect of voting rights and nominal value in patsystems holdings limited a company incorporated in 
england and wales 
 
the historical cost of the investment in the shares of patsystems holdings limited is £11180000 under the scheme of 
arrangement the subsidiary undertaking returned capital to the company amounting to £9865000 and the cost of the 
investment has been reduced accordingly to reflect this 
 
the following subsidiary undertakings are wholly owned by patsystems holdings limited in respect of voting rights and nominal 
value of issued shares and perform the sale and support of electronic trading systems 
 
patsystems uk ltd  – incorporated in england and wales 
patsystems na llc  – incorporated in united states of america 
patsystems pte ltd  – incorporated in singapore 
patsystems pty ltd  – incorporated in australia 
patsystems gmbh  – incorporated in germany 
patsystems hong kong limited – incorporated in hong kong 
 
the following subsidiary is wholly owned by patsystems holdings limited in respect of voting rights and nominal value of issued 
shares and acts as a holding company 
 
professional automated trading systems bv incorporated in the netherlands 
 
professional automated trading systems bv owns 100 of voting rights and nominal value of issued shares in patsystems 
japan kk incorporated in japan which performs the sale and support of electronic trading systems  
 
patsystems japan kk owns 100 of voting rights and nominal value of issued shares in patsystems ireland ltd incorporated 
in the republic of ireland which acts as a holding company
2 during the year patsystems plc transferred all of the assets and liabilities of t amesis limited to patsystems uk limited  
 
all subsidiaries are included in the consolidation patsystems plc
annual report  accounts 2010
financial statements
patsystems plc
annual report  accounts 2010 41
12 goodwill
       2010 2009
       £’000 £’000
cost and net book value  
at 1 january       3251 3251
additions        –  –
at 31 december       3251 3251
the goodwill is all held in europe
impairment review
the recoverable amount for the cash generating unit has been measured based on a value in use calculation the calculations use 
pretax profits based on budgets approved by management for the year 2011 cash flows beyond this are based on a growth rate 
of 225 a pretax discount rate of 15 has been applied to the calculations
as the value in use is greater than the carrying value there is no impairment in the period and the carrying value of goodwill 
represents the excess of the cost of acquisition over the fair value of the group’ s share of the net identifiable assets of the acquired 
subsidiary at the date of acquisition
13 intangible assets
     software acquired capitalised
      licences software development total
 2010     £’000 £’000 £’000 £’000
cost    
at 1 january 2010     572 898 4904 6374
additions     195 – 617 812
disposals     437 – 62 499
foreign exchange      2 – – 2
at 31 december 2010     332 898 5459 6689
amortisation     
at 1 january 2010     463 898 1587 2948
charge for the year      118 – 689 807
disposals     437 – 33 470
foreign exchange      1 – – 1
at 31 december 2010     145 898 2243 3286
net book value     
at 31 december 2010     187 – 3216 3403
at 31 december 2009     109 – 3317 3426
     software acquired capitalised
      licences software development t otal
 2009     £’000 £’000 £’000 £’000
cost    
at 1 january 2009     678 898 4294 5870
additions     43 – 610 653
disposals     144 – – 144
foreign exchange      5 – – 5
at 31 december 2009     572 898 4904 6374
amortisation     
at 1 january 2009     408 898 1037 2343
charge for the year      203 – 550 753
disposals     144 – – 144
foreign exchange      4 – – 4
at 31 december 2009     463 898 1587 2948
net book value     
at 31 december 2009     109 – 3317 3426
at 31 december 2008     270 – 3257 3527 financial statements
patsystems plc
annual report  accounts 2010 42
patsystems plc
annual report  accounts 2010
notes to the financial statements continued
14 property plant and equipment
       offi ce
       furniture 
     leasehold plant and fixtures and 
     improvements equipment fittings total
 2010     £’000 £’000 £’000 £’000
cost    
at 1 january 2010     158 1054 128 1340
additions     4 928 – 932
disposals     48 277 32 357
foreign exchange       – 58 3 61
at 31 december 2010     114 1763 99 1976
depreciation    
at 1 january 2010     46 519 86 651
charge for the year     32 455 21 508
disposals     48 277 32 357
foreign exchange      –  24 2 26
at 31 december 2010     30 721 77 828
net book value
at 31 december 2010     84 1042 22 1148
at 31 december 2009     112 535 42 689
       offi ce
       furniture 
     leasehold plant and fixtures and 
     improvements equipment fittings t otal
 2009     £’000 £’000 £’000 £’000
cost    
at 1 january 2009     564 1301 111 1976
additions     110 455 31 596
disposals     509 667 11 1187
foreign exchange      7 35 3 45
at 31 december 2009     158 1054 128 1340
depreciation    
at 1 january 2009     451 956 53 1460
charge for the year     110 265 44 419
disposals     509 667 11 1187
foreign exchange      6 35 – 41
at 31 december 2009     46 519 86 651
net book value    
at 31 december 2009     112 535 42 689
at 31 december 2008     113 345 58 516 patsystems plc
annual report  accounts 2010
financial statements
patsystems plc
annual report  accounts 2010 43
15 deferred tax assets
       other
    trading capital share timing
    losses  allowances options differences total
 2010    £’000 £’000 £’000 £’000 £’000
at 1 january 2010    4933 100 70 42 4945
utilisation of losses against current year profits    1133 – – – 1133
adjustments in respect of prior years    101 – – – 101
impact of change in corporation tax rate    151 – – – 151
rd tax losses     517 – – – 517
creditscharges arising in the year     – 119 11 30 78
chargedcredited to income statement    666 119 11 30 588
foreign exchange    36 – – – 36
future tax value of withholding tax payable    74 – – – 74
at 31 december 2010    4377 19 59 12 4467
       other
    trading capital share timing
    losses  allowances options differences t otal
 2009    £’000 £’000 £’000 £’000 £’000
at 1 january 2009    5706 171 41 301 5877
utilisation of losses against current year profits    762 – – – 762
adjustments in respect of prior years    46 – – – 46
chargescredits arising in the year     – 71 29 259 159
chargedcredited to income statement    716 71 29 259 875
foreign exchange    57 – – – 57
at 31 december 2009    4933 100 70 42 4945
deferred tax assets in respect of group companies’ unrelieved trading losses are recognised when the specific company’ s business 
has become profitable and to the extent that it is probable there will be future trading profits to utilise such losses
from 1 april 2011 the uk corporation tax rate will change from 28 to 27 deferred tax assets have been remeasured at the 
rate of 27
16 inventories
       2010 2009
       £’000 £’000
goods for resale       – 1 financial statements
patsystems plc
annual report  accounts 2010 44
patsystems plc
annual report  accounts 2010
notes to the financial statements continued
17 trade and other receivables  
       2010 2009
       £’000 £’000
trade receivables       2996 2737
less provision for impairment of receivables       120 107
trade receivables – net       2876 2630
other receivables       438 392
prepayments and accrued income       3745 2310
       7059 5332
less noncurrent portion – accrued income       427 326
current portion       6632 5006
noncurrent receivables are due as follows
       2010 2009
       £’000 £’000
within between one and two years       142 84
within between two and five years       285 225
after more than five but less than ten years        – 17
noncurrent receivables       427 326
the carrying values less impairment provisions of trade and other receivables approximate their fair values
the effective interest rates on noncurrent receivables were between the range of 1 – 6 2009 1 – 6
the ageing of trade receivables is as follows
    not up to 3 to over
    past due 3 months 6 months 6 months total
 2010    £’000 £’000 £’000 £’000 £’000
fully performing     2070 – – – 2070
past due but not impaired     – 806 – – 806
impaired and provided for     – 10 66 44 120
    2070 816 66 44 2996
percentage    69 27 2 2 100
    not up to 3 to over
    past due 3 months 6 months 6 months t otal
 2009    £’000 £’000 £’000 £’000 £’000
fully performing     1870 – – – 1870
past due but not impaired     – 737 22 1 760
impaired and provided for     – 11 52 44 107
     1870 748 74 45 2737
percentage    68 27 3 2 100
trade receivables that are less that three months past due are not considered impaired as of 31 december 2010 trade receivables 
of £806000 2009 £760000 were past due but not impaired these relate to a number of independent customers for whom 
there is no indication of financial difficulties or recent history of default the group is in contact with these customers and obtained 
assurances from which it believes that the amounts receivable will be collected in full with no additional cost to the group
provisions for the portion of individually impaired trade receivables assessed to be irrecoverable at 31 december 2010 totalled 
£120000 2009 £107000 these relate to customers where there are indications of financial difficulties or disputes that are 
unlikely to be resolved without further costs to the group patsystems plc
annual report  accounts 2010
financial statements
patsystems plc
annual report  accounts 2010 45
the carrying amounts of the group’ s trade and other receivables are denominated in the following currencies
       2010 2009
       £’000 £’000
uk pound       2452 2080
us dollar       3826 2470
singapore dollar       239 363
japanese yen       179 334
australian dollar       126 46
other currencies       237 39
total       7059 5332
movements on the group provision for impairment of trade receivables are as follows 
 
       2010 2009
       £’000 £’000
at 1 january       107 134
provision for receivables impairment       60 60
receivables written off during the year as uncollectible      24 17
unused amounts reversed       26 67
foreign exchange       3 3
at 31 december       120 107
the creation and release of provisions for impaired receivables has been included in ‘operating expenses’ in the income statement 
amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash
the other classes within trade and other receivables do not contain impaired assets
the maximum exposure to credit risk at the reporting date is the fair value of each class of receivable mentioned above the group 
does not hold any collateral as security
18 cash and cash equivalents
       2010 2009
       £’000 £’000
cash at bank and on hand       4011 3294
shortterm deposits       5333 5602
       9344 8896
the credit quality of the group’ s financial assets represented by cash and cash equivalents is not assessed by reference to external 
credit ratings but is regularly reviewed by the board monies are held with international banking organisations and where 
appropriate with well established local bankers that are able to provide the levels of security accessibility and service to meet  
local needs
the interest rates on interest bearing shortterm deposits are floating rates all financial assets represented by cash and cash 
equivalents mature within one year
the carrying values of cash and cash equivalents approximate their fair values
the carrying amounts of the group’ s cash and cash equivalents are denominated in the following currencies
       2010 2009
       £’000 £’000
uk pound       7087 6879
us dollar       1380 1215
singapore dollar       280 233
japanese yen       358 367
australian dollar       117 116
other currencies       122 86
total       9344 8896 financial statements
patsystems plc
annual report  accounts 2010 46
patsystems plc
annual report  accounts 2010
notes to the financial statements continued
18 cash and cash equivalents continued
in the year ended 31 december 2009 the group put in place a guarantee of the value of 800000 in respect of one of its ongoing 
contracts this guarantee remains in place at 31 december 2010
19 trade and other payables 
       2010 2009
       £’000 £’000
current liabilities  
trade payables       779 418
other tax and social security       509 562
other creditors       2 15
accruals        1477 1535
deferred income       256 263
       3023 2793
  
none of the payables are secured 
all trade and other payables mature within one year
the carrying amounts of the group’ s trade and other payables are denominated in the following currencies
       2010 2009
       £’000 £’000
uk pound       1729 1652
us dollar       628 534
singapore dollar       370 281
japanese yen       98 233
australian dollar       58 38
other currencies       140 55
total       3023 2793
the carrying amounts of the group’ s trade and other payables approximate their fair values
the group’ s intercompany receivables and payables which are eliminated on consolidation are recorded in the books of the local 
entities in the following currencies
     2010 2010 2009 2009
     £’000 £’000 £’000 £’000
     receivables payables receivables payables
uk pound     21681 37867 21278 38229
us dollar     – 4624 – 3834
singapore dollar     1895 3432 1307 2613
japanese yen     1592 1493 1712 1807
australian dollar     263 619 224 576
other currencies     190 2062 171 2109
     25621 50097 24692 49168
the difference between the intercompany receivables and payable of £24476000 relates to provision made against intercompany 
receivables in prior years patsystems plc
annual report  accounts 2010
financial statements
patsystems plc
annual report  accounts 2010 47
20 provisions 
     at   at
     1 january utilised movement 31 december
     2010 in year in year 2010
     £’000 £’000 £’000 £’000
no later than one year    
cash–based long term incentive scheme     317 383 66 –
later than one year and no later than five years    
dilapidations provision     8 – 24 32
     325 383 90 32
the cashbased long term incentive scheme is described in the remuneration report this expired in march 2010
the dilapidations provision is in respect of work to be carried out at the end of the lease on property at riverside house this is due 
to expire in 2014 
21 commitments under operating leases
the group leases various offices and plant and machinery under noncancellable operating lease arrangements the leases have 
varying terms escalation clauses and renewal rights 
the lease expenditure charged to the income statement during the year is disclosed in note 5
the future minimum lease payments under noncancellable operating leases are as follows
 land and buildings plant and machinery total
   2010 2009 2010 2009 2010 2009
   £’000 £’000 £’000 £’000 £’000 £’000
no later than one year   575 368 29 30 604 398
later than one year and no later than five years   1116 1269 40 55 1156 1324
later than five years   – – – – – –
   1691 1637 69 85 1760 1722
22 share capital 
   
       2010 2009
       £’000 £’000
authorised
ordinary shares of 1p each   
at 1 january and 31 december – 250000000 shares       2500 2500
deferred shares of 1p each  
at 1 january and 31 december – 2 shares        – –
redeemable preference shares of £1 each   
at 1 january and 31 december – 49998 shares        50 50
allotted called up and fully paid   
ordinary shares of 1p each   
at 1 january – 185330693 shares        1853 1795
allotted under share option schemes – 1332601       13 58
at 31 december – 186663294 shares        1866 1853
the 1p ordinary shares are listed on the aim market they have one voting right per share 
deferred shares of 1p each   
at 1 january and 31 december – 2 shares        – –
  
the deferred 1p shares are not listed they have no voting rights and no access to dividends  financial statements
patsystems plc
annual report  accounts 2010 48
patsystems plc
annual report  accounts 2010
notes to the financial statements continued
23 share option schemes
the following options to purchase 1p ordinary shares in patsystems plc were granted exercised lapsed and outstanding during  
the year
 exercise outstanding    outstanding exercisable
 price in at 1 january granted exercised lapsed at 31 december at 31 december effective
 pence 2010 in year in year in year 2010 2010 dates
 508p 558000  –  378000 – 180000 180000 note a
 950p 90000  –  45000  –  45000 45000 note a
1425p 403553  –  197453 44400 161700 161700 note a
1450p 496951  –   –   –  496951 496951 note a
1525p 775737  –  60000  –  715737 715737 note a
1558p 670400  –  275600 30000 364800 364800 note a
1750p 30000  –  – – 30000 30000 note a
2775p 250000  –  – – 250000 250000 note c
2900p 444827  –  – – 444827 444827 note c
  3719468  –  956053 74400 2689015 2689015 
1425p 179143  –  56168 89375 33600 33600 note b
1450p 83089  –   –   –  83089 83089 note b
1525p 344263  –   –  – 344263 344263 note b
1558p 595700  –  320380 258520 16800 16800 note b
1800p 500000  –  –  –  500000 500000 note b
2775p 1000000  –  –  –  1000000 1000000 note d
2900p 1655173  –  –  –  1655173 1655173 note d
  4357368  –  376548 347895 3632925 3632925 
total all 
schemes 8076836  –  1332601 422295 6321940 6321940 
note a these options were granted under the first second and third awards of the enterprise management incentive ‘emi’ 
scheme these options are now 100 exercisable
note b these options were granted under the second and third awards of part b inland revenue unapproved of the patsystems 
plc 2003 share option scheme these options are now 100 exercisable
note c these options were granted under a special award of the emi scheme these options are now 100 exercisable
note d these options were granted under a special award of part b inland revenue unapproved of the patsystems plc 2003 
share option scheme these options are now 100 exercisable
no share options were granted in the year 2009 nil 
 
for the options that were exercised during the year the weighted average share price at the date of exercise was 24p 2009 21p
the weighted average remaining contractual life of options outstanding at the year end is 52 years 2009 57 years
the total fair value that was charged to the income statement in relation to the share options was £60000 2009 £261000 all of 
which related to equity settled sharebased payment transactions
the fair values of the options have been calculated using the binomial model the model takes into account the following factors in 
determining the fair value of an option
a share price and exercise price 
share prices are closing share prices as at the date of grant exercise prices are listed in the above schedule
b expected term of the options
it is assumed that the expected life of the options under consideration is 5 years 
c volatility
volatility of the company’ s share price has been calculated as the annualised standard deviation of daily continuously compounded 
returns on the company’ s stock derived from the company’ s historical share prices adjusted for splits over 5 years back from each 
date of grant patsystems plc
annual report  accounts 2010
financial statements
patsystems plc
annual report  accounts 2010 49
d riskfree interest rate
the riskfree rates of interest are assumed to be the yield to maturity on a uk gilt strip with the term to maturity equal to the 
expected life of the option 
e dividends
the valuations take account of the expected future dividend yield at the date of each grant
the table below sets out the volatilities riskfree interest rates and dividend yields applied in each valuation
      riskfree  
     volatility  interest rate  dividend yield
 date of grant           
24 february 2003    778009  46922  000
13 march 2003    783590  47175  000
30 june 2003    784194  46412  000
27 october 2003    798321  57891  000
01 january 2004    786748  54125  000
30 july 2004    736821  58602  000
27 august 2004    717764  56660  000
16 november 2004    589201  52789  000
04 february 2005    566301  51507  000
17 march 2005    524971  54148  000
06 october 2005    549819  47689  200
23 november 2005    498819  48322  200
14 december 2005    500097  48764  200
14 february 2006    501501  47515  200
19 april 2007    484035  52980  100
7 december 2007    300527  45550  100
31 december 2007    309369  56204  100
24 share capital and reserves
  at shares earnings  foreign share at
  1 january issued in for the dividends exchange compensation 31 december
  2010 the year year paid movement expense 2010
  £’000 £’000 £’000 £’000 £’000 £’000 £’000
paid up share capital   1853 13 – – – – 1866
share premium   4493 148 – – – – 4641
other reserves   20862 – – – – – 20862
retained earnings   3700 – 2551 892 267 60 1714
  23508 161 2551 892 267 60 25655
of the other reserve at 31 december 2010 £20812000 relates to a merger reserve
  at shares earnings  foreign share at
  1 january issued in for the dividends exchange compensation 31 december
  2009 the year year paid movement expense 2009
  £’000 £’000 £’000 £’000 £’000 £’000 £’000
paid up share capital   1795 58 – – – – 1853
share premium   3869 624 – – – – 4493
other reserves   20862 – – – – – 20862
retained earnings   6472 – 3362 689 162 261 3700
  20054 682 3362 689 162 261 23508
of the other reserve at 31 december 2009 £20812000 relates to a merger reserve
investments in own shares 
the group has an investment in own shares of 71856 shares 2009 71856 shares as a result of employees leaving the all 
employee share scheme the nominal value of these shares is £719 2009 £719 the market value at 31 december 2010 is 
£18000 2009 £16000  financial statements
patsystems plc
annual report  accounts 2010 50
patsystems plc
annual report  accounts 2010
notes to the financial statements continued
25 statement of changes in shareholders’ equity 
statement of changes in equity  
       2010 2009
       £’000 £’000
profit on ordinary activities after taxation       2551 3362
dividends paid       892 689
foreign exchange adjustment       267 162
share compensation expense       60 261
proceeds from the issue of ordinary share capital       161 682
       2147 3454
shareholders’ funds at 1 january       23508 20054
shareholders’ funds at 31 december        25655 23508
26 dividends 
the dividends paid in the year were as follows
       2010 2009
       £’000 £’000
second interim dividend in respect of the year ended 31 december 2009  
 at 028p per share 2009 0237p       519 427
interim dividend at 02p per share 2009 0145p       373 262
       892 689
a second interim dividend in respect of the year ended 31 december 2010 of 035p per share amounting to a total dividend of 
£653000 is to be paid on 8 april 2011 these financial statements do not reflect this dividend payable 
27 financial instruments
271 financial risk management
the group’s financial instruments comprise cash and liquid resources trade and other debtors and creditors arising directly from the 
operations of the group and forward exchange contracts the main risks arising from the group’ s financial instruments are interest 
rate risk and foreign currency risk the board reviews and agrees policies for managing each of these risks and they are summarised 
in note 3 above 
note 31 includes an analysis of the sensitivities of the movement in the usuk£ exchange rate and the impact on the  
financial statements
272 accounting policies
the group’ s accounting policies for financial instruments are detailed in note 1 above and have been applied to the line  
items below
       assets at
       fair value
       through
      loans and the profit
      receivables and loss total
 2010      £’000 £’000 £’000
assets as per balance sheet 
trade and other receivables       7059 – 7059
derivative financial instruments       – 46 46
cash and cash equivalents       9344 – 9344
      16403 46 16449 patsystems plc
annual report  accounts 2010
financial statements
patsystems plc
annual report  accounts 2010 51
      liabilities at 
      fair value 
      through other
      the profit financial
      and loss liabilities total
 2010      £’000 £’000 £’000
liabilities as per balance sheet
trade and other payables       3023 – 3023
income tax       – 8 8
provisions      32 – 32
      3055 8 3063
       assets at
       fair value
       through
      loans and the profit
      receivables and loss t otal
 2009      £’000 £’000 £’000
assets as per balance sheet
trade and other receivables       5332 – 5332
derivative financial instruments       – 176 176
income tax      8 – 8
cash and cash equivalents       8896 – 8896
      14236 176 14412
      liabilities at 
      fair value 
      through other
      the profit financial
      and loss liabilities t otal
 2009      £’000 £’000 £’000
liabilities as per balance sheet
trade and other payables       2793 – 2793
income tax       – 98 98
provisions      325 – 325
      3118 98 3216
the group had no borrowings as at 31 december 2010 or 31 december 2009  
273 foreign currency exposure 
the group’ s principal exposure to exchange rate fluctuations arises on the translation of overseas net assets and profits into sterling 
for accounting purposes 
analyses of the group’ s financial assets and liabilities denominated in foreign currencies are given in notes 17 18 and 19 
  
the group has a net earnings exposure to the us dollar together with an exposure to the translation of the balance sheet of its us 
subsidiary during the year the board authorised the hedging of us dollar exposures at 31 december 2010 the company has the 
following hedges in place financial statements
patsystems plc
annual report  accounts 2010 52
patsystems plc
annual report  accounts 2010
notes to the financial statements continued
27 financial instruments continued
currency options
forward contract value       maturity date  effective forward rate 
300000      27jan11  15500
300000      24feb11  15500
300000      29mar11  15500
300000      27apr11  15500
300000      26may11  15500
300000      28jun11  15500
300000      27jul11  16000
300000      26aug11  16000
400000      28sep11  16000
450000      27oct11  16000
450000      28nov11  16000
at the year end the fair value of the above contracts is an asset of £46000 2009 asset £176000 the movement in fair values of 
£338000 2009 £1029000 has been debited 2009 credited to the income statement in the year
28 related party transactions
revenue includes £393000 2009 £428000 in respect of banca caboto spa london branch a member of a group of 
companies which include cai suisse a shareholder of the company at 31 december 2009 the amount owing to group 
companies by banca caboto spa london branch was £nil 2009 £78870
revenue also includes £483000 2009 £350000 in respect of marex trading services a company of which one of the non
executive directors in the year steve sparke is also a director at 31 december 2010 the amount owing to group companies by 
marex trading services was £nil 2009 £43341
key management remuneration
details of the remuneration of key management are detailed below
       2010 2009
       £’000 £’000
salaries and shortterm employee benefits        1618 1705
sharebased payments        58 124
       1676 1829 patsystems plc
annual report  accounts 2010
financial statements
patsystems plc
annual report  accounts 2010 53
independent auditors’ report to the members  
of patsystems plc
we have audited the parent company financial statements of 
patsystems plc for the year ended 31 december 2010 which 
comprise the balance sheet and the related notes the financial 
reporting framework that has been applied in their preparation 
is applicable law and united kingdom accounting standards 
united kingdom generally accepted accounting practice
respective responsibilities of directors and auditors
as explained more fully in the directors’ responsibilities 
statement set out on page 18 the directors are responsible for 
the preparation of the parent company financial statements 
and for being satisfied that they give a true and fair view our 
responsibility is to audit and express an opinion on the parent 
company financial statements in accordance with applicable 
law and international standards on auditing uk and ireland 
those standards require us to comply with the auditing 
practices board’ s ethical standards for auditors
this report including the opinions has been prepared for and 
only for the company’s members as a body in accordance with 
chapter 3 of part 16 of the companies act 2006 and for no 
other purpose we do not in giving these opinions accept or 
assume responsibility for any other purpose or to any other 
person to whom this report is shown or into whose hands it 
may come save where expressly agreed by our prior consent  
in writing
scope of the audit of the financial statements
an audit involves obtaining evidence about the amounts and 
disclosures in the financial statements sufficient to give 
reasonable assurance that the financial statements are free from 
material misstatement whether caused by fraud or error this 
includes an assessment of whether the accounting policies  
are appropriate to the parent company’s circumstances and 
have been consistently applied and adequately disclosed the 
reasonableness of significant accounting estimates made by the 
directors and the overall presentation of the financial statements
opinion on financial statements 
in our opinion the parent company financial statements 
give a true and fair view of the state of the company’ s affairs •	
as at 31 december 2010
have been properly prepared in accordance with united •	
kingdom generally accepted accounting practice and 
have been prepared in accordance with the requirements of •	
the companies act 2006
opinion on other matter prescribed by the companies 
act 2006
in our opinion the information given in the directors’ report  
for the financial year for which the parent company financial 
statements are prepared is consistent with the parent company 
financial statements
matters on which we are required to report by exception
we have nothing to report in respect of the following matters 
where the companies act 2006 requires us to report to you if 
in our opinion 
adequate accounting records have not been kept by the •	
parent company or returns adequate for our audit have  
not been received from branches not visited by us or 
the parent company financial statements are not in •	
agreement with the accounting records and returns or 
certain disclosures of directors’ remuneration specified by •	
law are not made or 
we have not received all the information and explanations •	
we require for our audit
other matter 
we have reported separately on the group financial statements 
of patsystems plc for the year ended 31 december 2010
nigel reynolds 
senior statutory auditor
for and on behalf of pricewaterhousecoopers llp
chartered accountants and statutory auditors
london
7 february 2011 financial statements
patsystems plc
annual report  accounts 2010 54
patsystems plc
annual report  accounts 2010
       2010 2009
      notes £’000 £’000
fixed assets   
investments      4 1315 1605
current assets   
debtors      5 8552 6932
cash at bank and in hand        4 28
         8556 6960
creditors amounts falling due within one year     6 70 65
net current assets        8486 6895
net assets        9801 8500
capital and reserves   
share capital      7 1866  1853
share premium account      9 4641  4493
other reserves      9 50  50
retained earnings      9 3244  2104
total equity      9 9801  8500
the financial statements on pages 54 to 59 were approved by the board of directors on 7 february 2011
david webber martin thorneycroft
chief executive officer finance director
patsystems plc company number 4498002
company balance sheet
at 31 december 2010 patsystems plc
annual report  accounts 2010
financial statements
patsystems plc
annual report  accounts 2010 55
notes to the financial statements
1 accounting policies
the financial statements have been prepared on the historical cost basis of accounting and in accordance with applicable 
accounting standards in the united kingdom 
the principal accounting policies applied in the preparation of these financial statements are set out below these policies have been 
consistently applied to all the years presented unless otherwise stated
11 investments 
investments in subsidiaries are stated at cost less any provision for impairment where an acquisition satisfies the provisions of 
sections 611 to 616 of the companies act 2006 merger relief is available and the investment is stated at nominal value of shares 
issued plus the value of any other consideration
12 operating leases
costs in respect of operating leases are charged to the profit and loss account on a straight line basis over the lease term 
13 current and deferred income taxes
the current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet  
date management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulations 
are subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the  
tax authorities
deferred taxation is recognised in respect of timing differences that have originated but not reversed at the balance sheet date 
where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have 
occurred at the balance sheet date
a net deferred tax asset is regarded as recoverable and therefore recognised only when on the basis of all available evidence it can 
be regarded as more likely than not that there will be sufficient taxable profits to utilise carried forward tax losses and against which 
the reversal of underlying timing differences can be deducted
deferred tax is measured at the average tax rates that are expected to apply in the periods in which the timing differences are 
expected to reverse based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date 
deferred tax is measured on a nondiscounted basis
14 related party transactions
financial reporting standard frs 8 ‘related party transactions’ requires the disclosure of the details of material transactions 
between the reporting entity and related parties the company has taken advantage of exemptions under frs 8 not to disclose 
transactions between group companies
15 sharebased payments
the group operates two share options schemes the enterprise management incentive scheme and the 2003 share option scheme 
inland revenue unapproved 
the fair value of options is recognised as an employee benefit expense with a corresponding increase in reserves over the vesting 
period the proceeds received net of any directly attributable transaction costs are credited to share capital nominal value and 
share premium when the options are exercised 
16 cash flow statement 
the company is the parent company of the patsystems plc group and is included in the consolidated financial statements of 
patsystems plc consequently the company has taken advantage of the exemption from preparing a cash flow statement under 
the terms of financial reporting standard 1 revised 1996
17 dividend distributions
final dividend distributions to the company’ s shareholders are recognised as liabilities in the company’ s financial statements in  
the period in which the dividends are approved by the company’ s shareholders interim dividend distributions to the company’ s 
shareholders are recognised as liabilities in the company’ s financial statements when paid
2 directors and employees
the parent company does not employ any directors or employees financial statements
patsystems plc
annual report  accounts 2010 56
patsystems plc
annual report  accounts 2010
notes to the financial statements continued
3 profit and loss account 
the profit for the year dealt with in the accounts of the company was £1972000 2009 £799000
the directors have taken advantage of the exemption available under section 408 of the companies act 2006 and have not 
presented a profit and loss account for the company alone 
4 investments  
  
        £’000
investment in subsidiary undertaking  
at 1 january 2010        1605
disposals        290
at 31 december 2010        1315
during the year patsystems plc transferred all of the assets and liabilities of tamesis limited to patsystems uk limited the above 
reduction of £290000 relates to the investment in t amesis limited 
the investment in subsidiary undertakings represents
1 a 100 investment in respect of voting rights and nominal value in patsystems holdings limited a company incorporated in 
england and wales 
 
the historical cost of the investment in the shares of patsystems holdings limited is £11180000 under the scheme of 
arrangement the subsidiary undertaking returned capital to the company amounting to £9865000 and the cost of the 
investment has been reduced accordingly to reflect this 
 
the following subsidiary undertakings were wholly owned by patsystems holdings limited in respect of voting rights and 
nominal value of issued shares and perform the sale and support of electronic trading systems 
 
patsystems uk ltd  – incorporated in england and wales 
patsystems na llc  – incorporated in united states of america 
patsystems pte ltd  – incorporated in singapore 
patsystems pty ltd  – incorporated in australia 
patsystems gmbh  – incorporated in germany 
patsystems hong kong limited – incorporated in hong kong 
the following subsidiary is wholly owned by patsystems holdings limited in respect of voting rights and nominal value of issued 
shares and acted as a holding company
professional automated trading systems bv incorporated in the netherlands
 
professional automated trading systems bv owns 100 of voting rights and nominal value of issued shares in patsystems japan 
kk incorporated in japan which performs the sale and support of electronic trading systems 
patsystems japan kk owns 100 of voting rights and nominal value of issued shares in patsystems ireland ltd incorporated in 
the republic of ireland which acts as a holding company 
5 debtors
  
       2010 2009
       £’000 £’000
amounts owed by group undertakings       8531 6909
other debtors       13 16
prepayments and accrued income       8 7
       8552 6932 patsystems plc
annual report  accounts 2010
financial statements
patsystems plc
annual report  accounts 2010 57
6 creditors amounts falling due within one year 
       2010 2009
       £’000 £’000
trade creditors       10 1
accruals and deferred income       60 64
       70 65
  
none of the creditors are secured 
7 share capital  
   
       2010 2009
       £’000 £’000
authorised
ordinary shares of 1p each   
at 1 january and 31 december – 250000000 shares       2500 2500
deferred shares of 1p each  
at 1 january and 31 december – 2 shares        – –
redeemable preference shares of £1 each   
at 1 january and 31 december – 49998 shares        50 50
allotted called up and fully paid   
ordinary shares of 1p each   
at 1 january – 185330693 shares        1853 1795
allotted under share option schemes – 1332601       13 58
at 31 december – 186663294 shares        1866 1853
  
the 1p ordinary shares are listed on the aim market they have one voting right per share 
  
deferred shares of 1p each   
at 1 january and 31 december – 2 shares        – –
8 share option schemes
the following options to purchase 1p ordinary shares in patsystems plc were granted exercised lapsed and outstanding during  
the year
 exercise outstanding    outstanding exercisable
 price in at 1 january granted exercised lapsed at 31 december at 31 december effective
 pence 2010 in year in year in year 2010 2010 dates
 508p 558000  –  378000 – 180000 180000 note a
 950p 90000  –  45000  –  45000 45000 note a
1425p 403553  –  197453 44400 161700 161700 note a
1450p 496951  –   –   –  496951 496951 note a
1525p 775737  –  60000  –  715737 715737 note a
1558p 670400  –  275600 30000 364800 364800 note a
1750p 30000  –  – – 30000 30000 note a
2775p 250000  –   –   –  250000 250000 note c
2900p 444827  –   –   –  444827 444827 note c
  3719468  –  956053 74400 2689015 2689015 
1425p 179143  –  56168 89375 33600 33600 note b
1450p 83089  –   –   –  83089 83089 note b
1525p 344263  –   –  – 344263 344263 note b
1558p 595700  –  320380 258520 16800 16800 note b
1800p 500000  –   –   –  500000 500000 note b
2775p 1000000  –   –   –  1000000 1000000 note d
2900p 1655173  –   –   –  1655173 1655173 note d
  4357368  –  376548 347895 3632925 3632925 
total all 
schemes 8076836  –  1332601 422295 6321940 6321940 
              financial statements
patsystems plc
annual report  accounts 2010 58
patsystems plc
annual report  accounts 2010
notes to the financial statements continued
8 share option schemes continued
note a these options were granted under the first second and third awards of the enterprise management incentive emi 
scheme these options are now 100 exercisable
note b these options were granted under the second and third awards of part b inland revenue unapproved of the patsystems 
plc 2003 share option scheme these options are now 100 exercisable
note c these options were granted under a special award of the emi scheme these options are now 100 exercisable
note d these options were granted under a special award of part b inland revenue unapproved of the patsystems plc 2003 
share option scheme these options are now 100 exercisable
no share options were granted in the year 2009 nil 
for the options that were exercised during the year the weighted average share price at the date of exercise was 24p 2009 21p
the weighted average remaining contractual life of options outstanding at the year end is 52 years 2009 57 years
the total fair value that was charged to the income statement in relation to the share options was £60000 2009 £261000 all of 
which related to equity settled sharebased payment transactions
the fair values of the options have been calculated using the binomial model the model takes into account the following factors in 
determining the fair value of an option
a share price and exercise price 
share prices are closing share prices as at the date of grant exercise prices are listed in the above schedule
b expected term of the options
it is assumed that the expected life of the options under consideration is 5 years 
c volatility
volatility of the company’ s share price has been calculated as the annualised standard deviation of daily continuously compounded 
returns on the company’ s stock derived from the company’ s historical share prices adjusted for splits over 5 years back from each 
date of grant
d riskfree interest rate
the riskfree rates of interest are assumed to be the yield to maturity on a uk gilt strip with the term to maturity equal to the 
expected life of the option 
e dividends
the valuations take account of the expected future dividend yield at the date of each grant
the table below sets out the volatilities riskfree interest rates and dividend yields applied in each valuation
      riskfree  
     volatility  interest rate  dividend yield
 date of grant           
24 february 2003    778009  46922  000
13 march 2003    783590  47175  000
30 june 2003    784194  46412  000
27 october 2003    798321  57891  000
01 january 2004    786748  54125  000
30 july 2004    736821  58602  000
27 august 2004    717764  56660  000
16 november 2004    589201  52789  000
04 february 2005    566301  51507  000
17 march 2005    524971  54148  000
06 october 2005    549819  47689  200
23 november 2005    498819  48322  200
14 december 2005    500097  48764  200
14 february 2006    501501  47515  200
19 april 2007    484035  52980  100
7 december 2007    300527  45550  100
31 december 2007    309369  56204  100 patsystems plc
annual report  accounts 2010
financial statements
patsystems plc
annual report  accounts 2010 59
9 share capital and reserves
   at shares earnings  share at
   1 january issued in for the dividends compensation 31 december
   2010 the year year paid expense 2010
   £’000 £’000 £’000 £’000 £’000 £’000
paid up share capital    1853 13 – – – 1866
share premium    4493 148 – – – 4641
other reserves   50 – – – – 50
retained earnings    2104  – 1972 892 60 3244
   8500 161 1972 892 60 9801
10 dividends  
the dividends paid in the year were as follows
       2010 2009
       £’000 £’000
second interim dividend in respect of the year ended  
 31 december 2009 at 028p per share 2009 0237p      519 427
interim dividend at 02p per share 2009 0145p       373 262
       892 689
a second interim dividend in respect of the year ended 31 december 2010 of 035p per share amounting to a total dividend of 
£653000 is to be paid on 8 april 2011 these financial statements do not reflect this dividend payable  financial statements
patsystems plc
annual report  accounts 2010 60
directors and advisers
directors
richard last chairman and nonexecutive director
david webber chief executive
martin thorneycroft finance director 
john priestley nonexecutive director chairman of the audit committee 
stewart douglasmann  nonexecutive director chairman of the combined remuneration  
and nominations committee
company secretary  
martin thorneycroft
advisers
broker and nominated adviser numis securities
lawyers dla pipers
 vedder price kaufman  kammholz
registered auditors pricewaterhousecoopers llp 
principal bankers barclays bank plc
    
registrars computershare services plc
 po box 82
 the pavillions
 bridgewater road
 bristol
 bs99 7nh
corporate details
registered office riverside house 2a southwark bridge road london se1 9ha
company number 4498002
country of incorporation england and wales
website wwwpatsystemscom
stock exchange symbol pts 01 about patsystems
01 highlights
02 global opportunities
04 product range
06 chairman’s statement
08 chief executive’s report
12 finance director’s review
15 key performance indicators
16 our board
17 directors’ report
19 statement of corporate governance
21  report of the board on directors’ 
remuneration and on group 
remuneration policy
24  independent auditors’ report to the  
members of patsystems plc
25 consolidated income statement
25  consolidated statement of 
comprehensive income
26  consolidated balance sheet
27  consolidated statement of  
changes in equity
28 consolidated cash flow statement
29 notes to the financial statements
53  independent auditors’ report to the 
members of patsystems plc
54 company balance sheet
55 notes to the financial statements
60 directors and advisers
overview
business review
governance financial statements patsystems plc
annual report  accounts 2010
offices and addresses
europe
london
riverside house
2a southwark bridge road
se1 9ha
tel 44 020 7940 0490 
fax 44 020 7803 1619
usa
chicago 
175 w jackson blvd 
suite 2260 
chicago il 60604 
tel 1 312 922 7600 
fax 1 312 922 7625 
new york
245 park ave
24th floor
new york ny 10167
tel 1 212 837 7841
fax 1 212 792 4001
asia pacific
singapore 
137 telok ayer street
0707
singapore 068602
tel 65 6216 0452
fax 65 6536 4167
tokyo 
10th floor
nihonbashi duplex b’s
917 nihonbashi kobunacho
chuoku tokyo 1030024
tel 81 0 3 3668 9372
fax 81 0 3 3668 9393
sydney 
level 6
underwood house
37 pitt street
sydney nsw 2000
tel 61 0 2 8987 9600
fax 61 0 2 8252 7640
hong kong 
32 hollywood road
unit 2004
kinwick centre
sheung wan
hong kong 
tel 852 3180 9512
fax 852 3180 9399
patsystems plc  annual report  accounts 2010


Summary:
 patsystems plc
annual report  accounts 2010 08
patsystems plc
annual report  accounts 2010
business review
chief executive’ s report
developing new and  
existing markets
i am particularly delighted by the 
exchange system sales to both  
matba and vnx demonstrating the 
transformation of our exchange  
systems business from being materially 
dependent on small japanese exchanges 
to a business with global appeal with 
the integration of our matching engine 
risk offerings and trading solution  
i believe there will be significant 
opportunities for exchange solution  
sales in 2011 and beyond
it was disappointing that a material  
risk informer opportunity that was 
significantly progressed through the 
procurement process did not conclude  
in 2010 and as such risk system sales did 
not achieve the level we had targeted 
however we continue to have a number 
of exciting sales opportunities for the 
product and a range of new addon 
modules to sell in 2011
though it was detrimental to the 2010 
results i believe it is the correct strategy 
for revenue from exchange system sales 
to include a volume related charge rather 
than a sole upfront perpetual licence 
thereby allowing patsystems to share  
in the benefits of the exchange’s future 
growth if new and developing electronic 
trading exchanges enjoy the growth  
that established exchanges have enjoyed 
in recent years then this judgement will 
be vindicated by an anticipated increase 
to patsystems’ recurring revenues in  
2012 onwards
2010 business objectives
at the start of 2010 we set four 
objectives for the business and overall  
i am satisfied with our progress against 
these objectives these are reported on 
as follows
solidify our position as the premier 
provider of risk margin systems within 
the world’s top global banks
in 2010 we partially achieved this 
objective with macquarie bank limited 
adopting the product and j p morgan 
extending its use of the product as 
previously reported a well progressed 
opportunity with a third global bank did 
not progress to the detriment of our 
2010 results
“we saw continued success for sales of our exchange 
systems business in 2010 and it is our opinion that 
patsystems currently has a unique proposition in the 
global marketplace with our ability to provide exchange 
matching clearing trading and risk capability as an 
integrated package ” patsystems plc
annual report  accounts 2010
patsystems plc
annual report  accounts 2010 09
business review
increasing
shareholder
value 
01
reduce the business’ 
reliance on oneoff 
project and 
licence sales
02
provide matching 
technology directly 
to exchanges to 
extend the breadth of 
patsystems global 
connectivity
03
continue the extension 
of geographical coverage 
to growth markets
04
identify complimentary 
addon acquisitions to 
leverage the existing 
sales and support 
infrastructure 
investment
extend our sales penetration in new 
countries with additional sales in 
malaysia indonesia and brazil
the business had sales success in 
malaysia to bursa malaysia derivatives 
and also in vietnam and argentina the 
indonesian commodity and derivative 
exchange which adopted the patsystems 
exchange solution in 2009 has enjoyed a 
successful first period of trading in 2010 
with traded volumes growing steadily 
we expect that the anticipated success  
in brazil will be achieved once our 
patsystems xconnect hub is deployed  
in são paulo
deliver hosted services to new and 
existing customers within all regions that 
we operate
patsystems xconnect hubs in tokyo and 
hong kong are live with a total of 6 
customers patsystems xconnect hubs in 
singapore and chicago went live in the 
autumn of 2010 with newedge one of 
our existing major customers 
continue the 2009 sales success for our 
exchange systems offering
the exchange system sales to matba 
and vnx during 2010 continue to 
demonstrate the global potential of our 
exchange systems offering 
revenue streams
the group operates in one product line 
that of the supply of software to financial 
institutions and consists of the following 
revenue streams
trading systems 
the investment in patsystems xconnect 
is a key strategy in supporting the 
growth plan for increasing revenues from 
our trading systems business patsystems 
xconnect will leverage patsystems xlink 
technology which allows for seamless 
exchange connectivity and order routing 
between patsystems xconnect hubs or 
client sites
the patsystems xconnect hubs planned 
for deployment in 2010 were all 
implemented on schedule apart from 
são paulo where local procurement 
challenges have deferred this to 2011
our strategy for growth
to support the deployment of patsystems 
xconnect in north america patsystems 
has selected interactive data 7ticks to 
provide ultralow latency networking 
services and exchange connectivity a 
selection process is under way to identify 
a partner to provide global wan 
infrastructure connectivity
it is expected that capital investment in 
excess of £05 million will be made in 
2011 to support patsystems xconnect 
deployment globally 
our replacement order management 
system global trading and risk alert 
has been deployed to a number of 
customers it is expected that further 
deployments of our new core trading 
system global trading will take place 
throughout 2011 commencing with the 
patsystems xconnect hub in london
exchange systems
as previously stated we saw continued 
success for sales of our exchange systems 
business in 2010 and it is our opinion 
that patsystems currently has a unique 
proposition in the global marketplace 
with our ability to provide exchange 
matching clearing trading and risk 
capability as an integrated package
we believe that there are opportunities 
across the globe for smaller or newly 
established commodity or financial 
futures exchanges that want a complete 
endtoend technology solution and wish 
to source this from a single supplier
based in buenos aires matba is  
a futures and options commodity 
exchange specialising in wheat corn  
and soya while the exchange has 
experienced steady demand over the  patsystems plc
annual report  accounts 2010 10
patsystems plc
annual report  accounts 2010
business review
chief executive’s report continued
matba leverages patsystems’ technology to 
achieve its future growth plans 
after an extensive global selection process the mercado a término de  
buenos aires ‘matba’ has selected patsystems as its key technology  
provider as it prepares to add electronic trading capability to its existing  
open outcry operations 
based in buenos aires matba is a futures and options commodity exchange 
specialising in wheat corn and soya while the exchange has experienced 
steady demand over the past few years matba acknowledges that they  
could experience increased volume with an electronic offering 
patsystems will provide matba with a complete exchange system that includes 
straight through processing and matching supported by the patsystems 
matching engine the patsystems matching engine is readily scalable and  
can fully accommodate the anticipated future growth of matba 
matba will also utilise patsystems pretrade risk management module and 
frontend trading applications promark and jtrader patsystems’ frontends 
are userfriendly featurerich applications that can be easily deployed to 
matba participants over the internet wan lan or leased lines ease of 
deployment was a key consideration for matba as they aim to make their 
market more accessible to local and international participants
past few years matba recognise the 
exchange could experience increased 
volume by extending electronic trading 
to its current open outcry offering 
in addition to the patsystems matching 
engine matba will also utilise patsystems’ 
jtrader which will be deployed to 
matba participants over the internet
vnx was officially introduced at a 
ceremony in ho chi minh city on 20 
october 2010 by the sme securities  
joint stock co and by trieu phong gold 
international joint stock co vnx will 
initially trade in steel rubber and coffee 
which are some of vietnam’s biggest 
exports it will also provide an additional 
financial tool for producers and traders 
to protect themselves against price 
fluctuation risks 
patsystems’ exchange solution will 
facilitate the integration of electronic 
trading between domestic producers  
and traders and provide access to 
international customers interested  
in vietnam’s commodity markets
our project with turkdex continued 
during 2010 and phase 1 is expected  
to go live in the first half of 2011 a 
subsequent phase 2 will be deployed  
later in 2011 or early in 2012 during the 
year the indonesian commodity and 
derivatives exchange successfully 
launched their second product a crude 
palm oil contract which will act as a 
reference point for indonesia’s local 
commodity producers indonesia is one  
of the world’s largest producers of crude 
palm oil
risk systems
during 2010 prudential bache j p 
morgan and macquarie bank limited 
deployed patsystems’ posttrade risk 
margining product risk informer risk 
informer is also a key component of a 
featurerich clearing and risk solution 
that will be implemented at turkdex’s 
clearing bank in turkey as part of the 
overall project with turkdex
in 2011 we expect to sell risk informer 
services and license new modules to 
existing customers as well as sell new 
risk informer licences to other global  
and local financial institutions 
the new modules that will be promoted 
in 2011 include scenario analysis with the 
capability to simulate possible market or 
price shocking conditions as well as new 
options risk capability that will provide  
a view of option positions prices and 
greeks based upon the movement of  
the underlying contract 
staff and operating structure
overall staff numbers have remained 
broadly similar to 2009 with 161 
employees at the 31 december 2010 
compared to 162 on 1 january 2010 
during the first quarter of 2011 the 
operating structure of patsystems will be 
completely reviewed with the objective 
of removing hierarchy improving 
information dissemination and increasing 
operating margins
as a first part of this process the 
management structure of the operations 
functions has been revised and the 
revised team will now review the 
remainder of the operations department
the objective for the business is to 
improve operating margin by 2 based 
on our 2010 results
business strategy
patsystems’ business objective is to  
be the external partner of choice  
for investment banks futures  
clearing merchants and exchanges  
for the provision of electronic  
trading trade matching and risk  
management technology patsystems plc
annual report  accounts 2010
patsystems plc
annual report  accounts 2010 11
business review
patsystems selected by the 
vietnam commodity exchange
the newly established vietnam commodity exchange 
‘vnx’ was officially introduced at a ceremony in  
ho chi minh city on 20 october 2010 one of the  
key objectives of the exchange is to create a marketplace 
for vietnam’s popular commodity products steel rubber  
and coffee – some of vietnam’s biggest exports it will 
also provide an additional financial tool for producers  
and traders to protect themselves against price  
fluctuation risks 
vnx will utilise patsystems’ complete exchange solution 
this will include patsystems’ trade matching engine 
clearing and settlement platform pretrade risk 
management module and the frontend execution 
platform patsystems’ exchange solution will facilitate  
the integration of electronic trading between domestic 
producers and traders and provide access to international 
customers interested in vietnam’s commodity markets
the growth strategy of the business 
has four components
reduce the business’ reliance on •	
oneoff project and licence sales
provide matching technology directly •	
to exchanges to extend the breadth 
patsystems global connectivity
continue the extension of •	
geographical coverage to growth 
markets
identify complimentary addon •	
acquisitions to leverage the existing 
sales and support infrastructure 
investment
the acquisition strategy is to identify  
and acquire businesses that provide 
complimentary technology and where 
shareholder value can be created by 
selling that technology through the 
patsystems global sales organisation
a number of appropriate targets were 
identified in 2010 but an appropriate 
acquisition price could not be agreed 
that would have created value for 
patsystems’ shareholders
business objectives and outlook
our key objectives for 2011 are as 
follows
grow the recurring revenue base by •	
growth of the patsystems xconnect 
asp offering
extend the risk informer customer •	
base and licence the new modules  
to existing customers
continue the 2010 sales success for •	
our futures exchange system product 
in all markets
revise our internal structure to •	
increase the operating margin
trading subsequent to the year end has 
progressed in line with our expectations 
and we remain confident of fulfilling  
our growth aspirations across all areas  
of the business
david webber
chief executive 
7 february 2011