• minimising businessrisk •
m axim ising businessavailability
synstar plc
annual report and accounts 2002
shining
bright synstar’s
vision
to be a world class it services provider
contents
1 financial highlights
2 chairman’s statement
4 chief executive’s review
17 indicators
18 finance director’s review
22 board of directors
25 report of the directors
27 remuneration report
28 environmental policy statement
29 corporate governance
31 independent auditors’ report
32 consolidated profit and loss account
33 consolidated statement of total 
recognised gains and losses
34 consolidated balance sheet
35 company balance sheet
36 statement of accounting policies
38 notes to the accounts
58 fiveyear summary
59 directors and advisors
60 addresses financial highlights
•
revenue £2219m
•
operating profit before goodwill and exceptional items £80m
•
cash flow before financing £84m
•
adjusted eps 34p p age 2
john leighfield cbe
chairman p age 3
am pleased to report that the financial
results for the group have fully
reflected the hopes and plans of last
year despite one of the most difficult
marketplaces in recent times synstar has
delivered increased profit and generated
cash turnover for the period was
£2219m 2001 £2382m and total
operating profit before goodwill and
exceptional items was £80m 2001
£46m adjusted earnings per share were
34p 2001 11p the group generated
cash before financing during the year of
£84m 2001 £18m and has traded with
a positive net cash balance in every
month of the year these results reflect
the rewards of the difficult decisions and
strong action taken by steve vaughan
since he became ceo and bode well for
the future
the year has been characterised by
strong and steady improvement in the
health of the company whereas 2001
was a year of major management action
restructuring and the rollout of a new
strategy 2002 has seen the rigorous
implementation of that strategy focus on
our customers investment in our
services development of a strong
management team and the elimination of
remaining problem areas have been the
four points of focus that have produced a
successful overall outcome
our customers and our professional and
longterm relationships with them have
always been the company’s principal
asset synstar remains at the top of the
league for customer satisfaction we now
have the right organisation and strategy
to capitalise upon that positive state of
affairs retention of customers is vital and
synstar has always been good at that we
are now becoming much more adept at
developing those relationships to sell
further services and expand our role in
the provision of services this is a real
change in the way the company deals
with the marketplace
our service lines have also developed in
a most encouraging way synstar’s stock
intrade is to deliver the sort of it service
that customers will always need our staff
excel in keeping critical systems going
as information technology becomes
more and more crucial to business life so
the demand for our services expands
this has remained true even in the
current economic climate because of the
nature of our services we are less
exposed to shortterm slowdowns in the
buying of either products or new
projects this is reflected in our results
above all else this year has seen
considerable development of a
management team with strength in depth
a combination of new managers and
extensive training and development of
existing managers has produced a
reliable resourceful and realistic team
who understand the business and how to
take it forward this is now a major
strength of the organisation and a crucial
factor for the future a strong board
complements this team and i would like
to take this opportunity to thank my
colleagues on the board who have
continued to provide good timely advice
and a robust framework for corporate
governance
above all i am particularly proud of our
staff and their continuing commitment to
the quality of service to our customers 
a service organisation is only as good as
the people it can deploy on the ground
excellence takes time to develop and
once achieved is a valuable asset 
our staff display that excellence in what
they do day after day and it is the
bedrock of our success
the plan that we put in place at the start
of 2001 is now delivering impressive
results it has set the group on an exciting
path and the marketplace though
difficult presents good opportunities for a
business like synstar i look forward to
the strong performance that can come
from this situation in the future
john leighfield cbe
chairman
i
chairman’s statement steve vaughan
chief executive p age 5
introduction
t has been a difficult time to be an it
company recently against a backdrop
of disappointing news throughout the
sector i am extremely pleased to be able
to report that synstar remains on track
with its plans and has delivered better
results than the market expected 
our success comes from the strong
foundation built during the past 18 months
we made difficult decisions and ambitious
plans during 2001 and have followed
through on these decisions and plans
during 2002 this puts the company in an
enviable position when compared to the
majority of its peers – we are profitable
cash generative debt free and growing
we have benefited more than i had hoped
from the restructuring activities of last year
the first half financial performance gave
us the foundation for the growth that was
the aim of our restructuring programme
we exploited this in the second half our
business delivered second half operating
profits of £49m generated £74m of cash
and ends the period with net cash of
£164m our revenues from longterm
business have also grown and our order
book has grown by 46 to £319m the
second half also brought some notable
contract wins such as csc westland
helicopters and avecia taken together i
believe all this demonstrates a company
in good shape and one that can step up
to the challenge of growth
it is to this challenge that we must now
devote our energy phase 1 of our plan
gave us the basis for a new and stronger
sales force with relationship managers
focused on existing customers and
salesmen on new names our investment
in the training and support of these
people has produced a sales force that
can take on the best and win they are
selling our new standard service lines
developed and packaged during phase 2
to match our customer requirements 
we have many new services to bring to
market over the coming months to add
fuel to grow our sales during phase 3 as
the final key to successful sales growth
we must convert the perception of
synstar from niche maintenance and
disaster recovery provider to trusted
partner for delivery of integrated
managed services there is plenty of
evidence that this change in our
customers’ perception is well underway
achieving this is the eventual definition of
the success of our strategy
progress with our strategy
i have long held that a company operates
best when it is following a clear plan and
has the right focus on its objectives at
the start of 2001 our strategic review
created that plan it was very clear about
the objectives – focus on profit and cash
crosssell services into our excellent
customer base build a stable foundation
upon which the company could grow at 
i
chief executive’s review
increasingly
seen as a
trusted
managed services
provider
uk and ireland
depending on which research house you subscribe to either the uki or
germany has the largest it market in western europe either way uki
is an enormous market full of opportunity and combining leadingedge
technologies with stillimportant legacy architectures even though
budgets have been frozen or cut efficiency and productivity must still
improve and it is this ‘more for less’ attitude which has driven the it
market in the direction of outsourcing and total managed service this
year we have won some mammoth deals signing contracts of a type and
size which a few years ago would not even have existed virus alerts
uninvited visitors to the corporate network and disgruntled employees are
all potential hazards which have the power to take a business to the wall
we have recently launched services to assist customers in understanding
these hazards and minimising their risk and we will continue to develop
them as we move through the coming months
the irish business continues to grow and generate a strong contribution
in 2002 margin growth was on budget outperforming most competitors in
a tough trading year the adoption of new service lines has seen an
increase in professional services revenue particularly in business 
continuity and network security in the public and banking sectors we
have also seen two significant vida projects undertaken the first of many
in fact synstar recently managed its first major irish contract invocation
for a banking client with synstar supporting all processes infrastructure
logistics and staff delivered to plan and the customer suffered no
business interruption
to meet the needs of the substantial irish call centre market synstar has
introduced a packaged business continuity product 

contact continuity
tm

the product which has been enthusiastically received by the industry
balances the focus on it and work areas with a unique approach to the
vital telephony technology which is the heart of the contact business
two major call centres are already signed up and have tested
successfully the business availability ba concept is vital to many uki
industries and synstar is proving that ba thinking is not only a great idea
but a reality too
mike ettling managing director for the uk and ireland track record
our clients trust us to keep on performing
because we know that tomorrow’s 
opportunities grow out of 
today’s hard work p age 7
above the market rate and aim to become
a world class it services provider 
our plan is split into three phases and at
the half year i reported that phase 2 was
nearing a successful conclusion i can
now report that we did indeed achieve
the objectives of phase 2 – ‘stabilise
improve and invest’ stability is clear
from the financial results and the absence
of volatility improvement shows in the
resolution of several operational and
managerial issues such as the disposal of
our swiss business and improvements in
logistics and networking business
investment is clearly yielding benefits in
the development of our service lines as i
will outline below above all we
managed a period devoid of major
upheavals which gave our new
organisation and strategy the time to take
root this is the basis of longterm
change and success
of course it is unrealistic to expect any
plan to run faultlessly our french
business remains problematic despite
the target that we could complete this
year with a breakeven run rate the
percentages of revenue in france which
depend upon shortterm projects which
have to be continuously bid and won
and mobile engineering which is much
lower margin is higher than elsewhere 
it takes longer to change the shape of a
business like this we have more to do but
remain sure that this part of our business
the only lossmaking element of the
group will be returned to profit
during the second half we saw a strong
start to phase 3 in particular we fully
outlined the actions required during the
period to the end of 2003 to drive the
growth that we seek we made a good
start on these actions and have begun to
see some results we split these actions
into a number of ‘streams’ concentrating
our efforts on developing our service
lines improving our internal processes
investing in the skills and careers of our
staff and stepping up the synstar sales
performance i will review the plans and
progress of each of these in turn
rollout of our service lines
our service lines are the building blocks
of our growth strategy we have the
customers selling more services to them
is the plan for growth today our service
lines are well matched revolving as they
do around the support and development
of high availability computer
infrastructure however we are not yet
able to deliver all of our services in each
of the territories in which we operate
the rollout of our existing services is one
key element of our phase 3 plan in
addition the development of services to
meet new technical demands and higher
levels of business availability is receiving
attention
chief executive’s review
continued
foundations laid
for strong
and lasting
growth
germany
the market in germany was heavily influenced by the general economic
situation market growth in 2002 was only 05 against a forecast level of
24 accordingly this had an important impact on the it sector with many it
infrastructure projects either frozen or postponed despite this difficult situation
synstar was able to keep the installed base at the same level as last year
whilst also winning a very large and important computer services customer in
the automotive sector since this new project began the business has
expanded continuously this particular customer win is also a good example of
our crossselling activities business continuity is becoming more important to
our german operations and since september 11 interest in our various
business continuity services has grown steadily resulting in our first bc
contract with a global financial services business taking approximately 100
seats in our new frankfurt business recovery centre 
peter rembert business service manager for germany in the last two years we have stamped our commitment
on everything we do building financial technical and
commercial strength for the long haul
achievement p age 9
business continuity
the performance of our business continuity
service offering during the year has been
excellent our focus on return on capital
employed roce – sweating the assets
rather than the urge to build ever more
capacity – has produced very strong results
roce is now above 70 and operating
profits from this business have increased
by 22 achieving this level of return we
can now consider opportunities to expand
our infrastructure recently we invested in a
new business recovery centre in frankfurt
a market that has not been accessible to
us in the past we have already signed up
a global financial services business for
this new facility we will continue to look for
relatively smallscale opportunities to
expand our capabilities in both geography
and technology coverage while always
keeping our main attention on the return
on the investment
networking
our networking business is now focused
on longterm contracts and high value
consulting rather than being dominated
by low margin product sales the
network operating centre we established
in newbury in early 2002 is now a
flagship for our service offering in
networking solutions and projects
remain a key part of what we do and our
efforts to build better relations with key
partners in this area have been rewarded
in addition to our existing capabilities in
the uk and france we have now
developed a networking revenue stream
in holland and spain belgium and germany
will be added in the first half of the 20023
financial year security is an essential part
of any network business we now have a
thriving business in network security
consultancy to 22 of our customers as
well as delivering the projects and
services derived from our advice
data management
data management is currently the most
geographically restricted business we
are strong in germany and france and it
is clear that many of our customers in
other areas would buy storage solutions
from us this offering will become
increasingly important for high availability
service solutions it is a key requirement
during phase 3 to expand our ability to
sell and deliver data management
solutions to all our countries
maintenance
maintenance still forms the backbone 
of our business there is a high level of
recurring business and it represents an
excellent door opener to high profile
clients we will continue to invest to
develop maintenance solutions for new
products particularly for larger machines
such as the sun e10000 servers where
customers require high availability the
number of customers engaging us to
maintain their entire data centres has
increased significantly 
chief executive’s review
continued
breaking
the mould
of
synstar
sales
france
france is synstar’s third largest it services market in terms of value we
have traditionally sold all four service lines in this market but have found it
more difficult to harness crossselling opportunities within our installed
customer base however the culture is changing slowly as the realisation of
total cost of ownership and the value of outsourcing gain acceptance more
and more of our customers are asking us for managed service offerings
covering our full service range a large portion of our business is in the public
sector and we have recently seen the thawing of it budgets frozen over the
past 18 months demand for business continuity services has been slow to
grow but is now gaining pace rapidly recently prompting us to refurbish and
relaunch our paris business recovery centre
gerard lugat sales manager for france multiservice
our centres of excellence individually deliver everything they
promise and together they support our uniquely powerful
integrated business availability offering p age 11
managed services 
managed services is our fastest growing
service area seventeen of our largest 50
customers now buy managed services
from us up from 13 last year our
successes during the year have shown
that there is a considerable market for the
provision of desktop services help desks
and data centre management many of
our relationship managers find our
offerings in this area are a good next step
from maintenance when developing a
customer relationship we have invested
during the year to bring our vida desktop
managed service offering to maturity we
now have over 100000 desktop users
under contract across europe and a
pipeline many times that figure the
efficiency improvements produced when
our managed services are blended with
an onsite maintenance operation makes
our proposition costeffective we see a
considerable growth in customers looking
to us for a service that is often currently
delivered with fragmented inhouse
resources
progress with phase 3
our services 
service line development during phase 2
concentrated on exploiting offerings that
we have been supplying to some
customers for a while we took those that
represented the best potential and made
them generally available during phase 3
we have begun to develop entirely new
services particularly ones that join up our
main areas of service for example we
can sell networking and business
continuity in a single packaged offering
new services of this type will be launched
in the coming months and help to develop
customer relationships based on several
different services at once at the same
time these new services can yield a higher
margin than much of our existing
business
internal processes
while the effort to expand our service
offering capability is a key element of our
growth strategy cost control must remain
an imperative there remains some scope
for further efficiency and cost savings
accordingly we will be running a series
of projects to streamline processes and
systems to achieve these benefits during
the year this is an important part of
delivering our strategy – keeping the
machine working ever more effectively as
we grow and develop the business
staff development
as we develop more complex services
the picture would not be complete
without developing our staff expanding
technical skill is one thing and this has
been part of our investment for many
years however if we are serious about
world class performance then a more
systematic approach to career
development is essential – developing
staff with world class skills and careers
chief executive’s review
continued
rolling out new
services with
stronger
margins
belgium
although small belgium’s it services market potential is healthy at
nearly 12 its forecast compound annual growth rate cagr to 2005 is
among the highest in western europe the presence of the european
commission in brussels has created a true multinational culture that attracts
companies from around the globe nonetheless although in synstar’s
markets there are a large number of niche service providers very few are
able to provide anything like our total business availability solutions the value
of which has been amply demonstrated by recent wins at fortis ag and
novartis according to recent research the key business drivers for belgian
customers are software migration and security these are both areas of
particular synstar expertise which will become points of focus as we drive
the business forward but we have already completed some major platform
migrations for belgacom mobile and tessenderlo chemie
dirk cammermans business service manager for belgium flexibility
customers can construct whatever strategic
it support they need from synstar’s
comprehensive service offering  p age 13
chief executive’s review
continued
to address this important issue we have
begun a programme to create a new
career planning and development
framework that draws from best practice
in use all around the world this
framework will be fully in place by march
2003 giving our staff much better
ownership of their own personal
development and give the company a
sound basis upon which to develop the
skills and experience essential for our
expanding business and services
breaking the mould of synstar sales
performance
by any standards the second half of
20012 was an eventful period for synstar
sales we have increased our forward
order book from £230m at 31 march 2002
to £319m in september we signed our
biggest ever contract a fiveyear £120m
maintenance and managed service
agreement with csc we also signed our
first ‘total customer’ – westland
helicopters now buys every service line
that we sell under a £21m sixyear
agreement we now provide virtually all
its infrastructure support
for the first time synstar has a sales
force with the range of support it needs
to take on leading competitors and win
at westland we were on the shortlist
against ibm and eds the customer
stated that we were selected because of
our “proven track record innovative and
flexible approach to resolving business
issues and expertise for delivering high
value business availability services” at
avecia which also signed a multiyear
multiservice line contract with us in
september the customer declared
“synstar demonstrated considerable
flexibility in the provision of a
comprehensive range of it services
which is key to our requirements we
were also impressed by its wide breadth
of coverage and ability to provide the
services we require directly rather than
engaging third parties” this is a major
and very welcome change in perception
i have believed since i arrived that the
major obstacle to achieving this change
in sales performance was the company’s
own belief in itself after 30 years as a
maintenance company the mindset
necessarily takes a while to change but i
can now see widespread evidence of that
change it is matched by the start of a
change in our customers’ view of us
through a range of introductory service
offerings we are expanding our
customers’ view of our competences
demonstrating the full range of our
capabilities building our presence
during the second half of 2002 this
began to bear fruit in actual sales our
current sales pipeline gives me every
confidence that this will continue
how do we beat the competition we can
do this in many ways each important for
different reasons to each customer 
innovative
and
flexible
approach
netherlands
dutch industry is probably one of the most diversified in europe providing the
it community with both niche and broadbased opportunities like its fellow
members of the european union the netherlands has seen the number of it
related projects fall a trend that has even extended to hardware
maintenance this decline has prompted changes in the market’s structure
with consolidation of service providers leaving fewer smallscale niche
operators synstar itself has been active in this area developing a new
partnership with atos origin and taking over service activities from comparex
as a subcontractor with the larger service providers taking the cream of
outsourcing contracts something of a void has opened up in the middle
ground synstar is best placed to fill this with a mix of skills and resources
that caters for single service contracts and complete managed service
arrangements alike both well demonstrated by our excellent wins at the
dutch police and psa peugeotcitroen 
frank hoekstra business service manager for the netherlands stability
debtfree cash generating and with profits growing
strongly synstar is as solid as a rock in a turbulent world we have a culture of service – the longterm
delivery of daytoday quality we are
close to the customer – understanding
their needs onsite when we are needed
flexible and quick to respond to new
requirements or a crisis this is in contrast to
many of our competitors who are trying to
do things increasingly remotely and as we
deliver a higher service level we are well
placed to bid for management of critical
systems these factors combined with a
growing range of wellmatched services
give us a strong competitive position
a foundation for growth
there are good reasons for the progress
made since the start of last year we have
been building the foundation for a strategy
that is now wellplaced to turn to growth
our business has the potential to benefit
from operational gearing – we seek to grow
the top line at around 7 keep the gross
margin constant or better by selling higher
value services and keep the overhead
costs under control taken together this
yields the benefits from operational
gearing to produce operating margin
improvement and longterm sustainable
shareholder value benefits to date have
come from better control and focus
benefits in the future must depend
ultimately on driving the top line
synstar’s sales performance this year
shows that a strategy based upon growth
can be achieved even in the current
climate we have the customer
relationships and we are now developing
the longterm higher value services to
match our existing business retains all the
stability longterm contracts account for
over 70 of our revenue now we can
capitalise upon that position with a strong
growth agenda it is a plan that draws
sensibly on both strong base business and
good prospects for a growing top line that
is the best defence in the current market
summary
we have continued to make excellent
progress with our recovery plan and new
strategy our financial results show this
more clearly than anything else but in
addition to those results there are many
indicators within the behaviour of the
business which show that we have
achieved a major change of direction – the
development of our services the success of
crossselling the quality of our management
team and our ability to win large contracts
in the face of determined competition
this is success by any definition
i have said in my previous reviews that
our longterm aim should be world class
performance at the half year i said that i
could for the first time see clearly the
way to achieve it i can now say that we
are demonstrating the evidence that
synstar is on the way to being a world
class it service provider
steve vaughan
chief executive
chief executive’s review
continued
p age 15
world class
it service
provider
spain
although the spanish it services market is only about onesixth as big as the
uk’s it’s forecast to grow twice as quickly most major it activity is split
between madrid and catalonia the two provinces with the highest
concentration of large companies and public sector agencies spain has
always been a user of traditional services and has tended to shy away from
the larger outsourcing deals distributed computing desktopunix is
growing and this will in turn generate demand for ancillary services such as
hardware support applications support and networking all areas in which
synstar excels as can be seen in the recent contract renewals of two of our
most important customers in spain renault and the state social security
system although the requirement for distributed computing is strong spain
is also waking up to the need for business continuity services especially bc
consultancy naturally synstar is seen as a leading light in this area with
some great success stories to tell and we will continue to develop this
market as we move into the future 
antonio pastors business service manager for spain performance
synstar’s lifesigns point to a healthy dynamic future p age 17
order book
350
300
250
200
150
100
£m
sept mar sept mar sept mar sept
’99 ’00 ’00 ’01 ’01 ’02 ’02
25
20
15
10
5
0
mar01 sept01 mar02 sept02
group roce before tax
revenue  by product line
69 computer services
5
data
management
5
networking
6
other
6
product
sales
9
business
continuity
228 231
209
232
219
230
319
all figures exclude discontinued operations italy and switzerland
indicators stephen gleadle
group finance director finance director’s review
introduction
he results for the 12 months to 
30 september 2002 demonstrate
the benefits from the changes
implemented following our 2001 strategic
review 
overall revenue fell £163m to £2219m
2001 £2382m reflecting the withdrawal
from unprofitable geographies
continuing operations grew 1 and
operating profit before goodwill and
exceptionals has increased 74 to £80m
2001 £46m the net interest charge of
£06m in 2001 has been reduced to £nil
and the tax rate has been reduced by 6
to 32 cash generation before financing
has increased by £66m to £84m
to better explain these results i have
separately identified below the effect of
disposing of the italian and swiss
businesses from the continuing business
accordingly operating profit before
goodwill and exceptionals may be
analysed as in the table below
thus £22m of the operating profit
increase is attributable to the disposal of
the two lossmaking businesses 2001
loss £23m 2002 loss £01m in addition
to avoiding future cash outflows the two
disposals together generated a net cash
inflow of some £18m
the commentary below explains the
performance of the continuing business
revenue
revenues from the continuing business
increased by £17m to £2202m 
within this our maintenance and desktop
services offerings have been growing
strongly offset by reductions in pure
product sales and the product elements
within our networking and data
management service lines
the higher margin contractual revenue
was £1685m up by £170m or 11 
and the percentage of total revenue
represented by such longterm contracts
improved to 76 2001 69
gross margin
the calculation of gross margin has been
adjusted slightly this year to reflect the
way the business is now organised as
such all relationship manager costs are
now charged against gross margin which
has had the effect of adjusting cost of
sales up in 2001 by £26m with an equal
reduction to overhead costs sales costs
included under the sales and marketing
heading now relate either to the costs of
generating new sales with new customers
or relate to the general sales support
functions included in our new centres of
excellence
gross margin for the continuing business
has increased 05 to 262 this
reflects margin improvements arising
from a reduced percentage of low margin
product sales in our mix and also cost
savings from the restructuring
programme partially offset by the margin
impact of cost inflation and pricing
pressure on major contract renewals
p age 19
2001 2001 2001 2002 2002 2002 
published italycontinuing published continuing 
results switzerland business results switzerland business
revenue 2382 197 2185 2219 17 2202
cost of sales 1789 165 1624 1636 11 1625
gross margin 593 32 561 583 06 577
sales and 
marketing 146 17 129 122 01 121
administration 
costs 401 38 363 381 06 375
operating profit 46 23 69 80 01 81
t
adjusted eps
more than
trebled 
to3

4p p age 20
finance director’s review
continued
it should also be noted that during the
year the renewal of two substantial
contracts included upfront discounts 
on the basis that these discounts secured
longterm contracts they have been
capitalised and are being writtenoff over
the life of each contract at 30 september
2002 the balance of unamortised discount
was £21m 30 september 2001 £06m
of which £15m is shown in debtors due
after more than one year 
operating expenses
operating expenses of £496m have
benefited from tight cost control which
has limited the increase to £04m 08 
within this increase the business has
made extra investments in training
marketing management and the systems
infrastructure and seen the benefits of the
restructuring programme
operating profit
operating profit increased by £12m
15 to £81m with margins up from 32
to 37
this increase can be attributed to
computer services £07m 9 and
business continuity £04m 22 with 
the balance a £01m improvement in
central costs 
in terms of the geographical split the uk
improved by £20m 27 partially offset
by a decline in continental europe of
£09m reflecting pricing pressures in
belgium and a difficult data management
market in germany as noted above the
balance was an improvement of £01m in
central costs
loss on disposal of discontinued
operations
the loss on disposal of discontinued
operations shown in the profit and loss
account relates to the disposal of the
contracts in the swiss business which
took place on 1 march 2002 
under the terms of the sale itris
maintenance ag acquired the contracts
held by synstar computer services ag
the stocks of maintenance equipment
and reemployed 41 of its staff the
consideration for the sale was a cash
payment of £04m the exceptional item
of £15m relates to the loss on the sale of
the business and associated costs  
interest
as a consequence of the stronger focus
on the generation and management of
cash the net interest cost has fallen from
£06m in 2001 to £nil in 2002 
taxation
similarly a more active focus on tax
management alongside the disposals
programme has reduced the tax rate to
32 for 2002 compared to an underlying
rate of 38 in 2001 and 44 in 2000
it is currently expected that a rate 
around 33 can be held for the next one
to two years after which the rate should
trend upwards towards a longterm
average for a paneuropean business 
of approximately 35 to 36 
earnings per share
earnings per share have thus benefited
from the combined impact of increasing 
operating 
profit increased by
74 to
£8m p age 21
finance director’s review
continued
operating profit and reduced interest and
tax payments
before exceptional items and the
amortisation of goodwill eps has trebled
from 11p in 2001 to 34p this year  
cash flow and net funds
cash flow from the business remains
strong with £84m of cash generated
before financing during the year 
this inflow has been driven by the dual
impact of increased profit and capital
expenditure requirements of £115m
being £28m less than depreciation this
lower requirement for capital expenditure
has arisen from the business making better
use of the current asset base particularly
in the areas of business continuityrelated
equipment and repairable spares to support
our maintenance contracts capital
expenditure is likely to rise towards
depreciation in future years
the business was ungeared at 
30 september 2002 with net cash balances
of £164m 30 september 2001 £80m
as previously reported our cash balance
at both 31 march and 30 september is
heavily influenced by the timing of
receipts from some large customers the
net £nil interest charge indicates that on
average across the 12 months the
business had a small cash surplus
return on capital employed
the increase in profitability has driven up
the posttax return on capital employed
from about 5 in 2001 to 15 in 2002
with a weighted average cost of capital
wacc around 8 the group is now
value generating
share premium account
on 26 april 2002 the cancellation of the
£94578000 share premium account was
registered at companies house the effect
of this is to increase the distributable
reserves by the same amount
summary
shareholders are now starting to see the
benefits of the previously announced
initiatives
 operating profit has increased driven by
selling higher margin services and disposing
of our two noncore lossmaking
subsidiaries
 the improved focus on cash generation
caused the group to be debt free month by
month and removed the interest charge
 the disposal programme and a more
active approach to managing our tax
affairs has reduced the tax rate
future earnings and margin growth
should now flow from the operational
gearing of our business as we benefit
from crossselling our service offerings
into our bluechip customer base and
continue to focus on efficiency savings
this will be underpinned by phase 3 of
the strategic review
stephen gleadle
group finance director
cash flow from the
business
remains
strong the board of directors p age 23
1 steve vaughan age 42 
chief executive officer
steve vaughan joined the group on 
2 january 2001 previously he was
managing director of the industry and
commerce division of eds uk he held a
number of senior management roles at
eds having joined the company in 1986
prior to eds he worked for honeywell
information systems
d
2 john leighfield cbe age 64 
nonexecutive chairman
john leighfield has pursued a career in
information technology with the ford
motor company plessey and british
leyland in 1987 he led an employee buy
out of istel ltd which he had established
from its origins in british leyland and
which was subsequently acquired by
att in 1989
john is currently chairman of rm plc and
is a director of minerva computer
systems ltd
he was awarded the cbe in the 1998
queen’s birthday honours list
b c f  h
3 stephen gleadle age 44 
group finance director
stephen gleadle joined the group in
january 2000 as group finance director
he qualified as a chartered accountant
with price waterhouse and subsequently
spent 11 years with mars group in
various senior financial positions in 1996
he joined nfc plc as director of financial
analysis and planning and in 1998 moved
to tarmac plc as group financial
controller
4 mike ettling age 38 
managing director uk  ireland
mike ettling joined the group on 1 june
2002 he joined synstar from eds where
he spent five years he held a number of
senior positions and for the last three
years was regional vice president
responsible for business process
outsourcing in central europe and africa
his earlier career was as managing
director for national circulation services
a direct marketing services company and
studentwise marketing  publishing a
media and recruitment company mike
ettling qualified as a chartered
accountant in 1986 and started his career
with kpmg in south africa
5 richard john piper age 50 
nonexecutive director
ric piper was appointed as a non
executive director of the group in 1999
he qualified as a chartered accountant
with deloitte haskin  sells and has held
financial management positions with ici
citicorp and logica from 1993 to 2002
he was the finance director of ws atkins
he is a member of the urgent issues task
force of the accounting standards board
a d f  g h
6 jonathan feuer age 40 
nonexecutive director
jonathan feuer joined the board of
synstar in 1997 he is an executive
director of cvc capital partners in his
role as a private equity investor he has
held a number of nonexecutive
directorships and is the chairman of
halfords he joined cvc capital partners
ltd in 1988 having previously worked for
baring brothers  co ltd in the corporate
finance department and ernst  whinney
where he qualified as a chartered
accountant
b d f
7 john anthony osbaldiston age 50
nonexecutive director
tony osbaldiston was appointed as a
nonexecutive director of the group in
1999 having obtained an msc in
management sciences at durham
university he qualified as a chartered
accountant with coopers  lybrand
between 1989 and 1993 he was the
finance director of volvo car uk ltd until
30 november 2001 tony was an
executive director of firstgroup plc and
between 1994 and 1999 was the group
finance director and deputy chief
executive he was also president of
firstgroup america in 1999 tony
received the scottish finance director of
the year award in 1999
b d e h
key
a chairman of audit committee
b member of audit committee
c chairman of nominations committee
d member of nominations committee
e chairman of remuneration committee
f member of remuneration committee
g senior independent nonexecutive
director
h independent director
board of directors 
executive and nonexecutive members
1
2
3
6
7
4
5  p age 25
report of the directors
the directors present their annual report
together with the financial statements of
the group and the company for the year
ended 30 september 2002 these will be
presented to the shareholders at the
annual general meeting
business
the company is a leading independent
provider of it and business availability
services to a broad range of customers in
the uk and most western european
countries the group provides services
that are tailored to meet a customer’s it
services requirements and critical needs
by using its many years of experience
and its highly qualiﬁed professionals the
group is able to deliver high quality cost
efficient solutions to its customers as at
30 september 2002 it employed 2927
staff
the chairman’s statement chief executive’s
review and ﬁnance director’s review
report on the company’s performance
during the past year and on future
prospects 
the list of principal subsidiary
undertakings and the countries in which
they operate are set out in note 13 to the
ﬁnancial statements
dividends
consistent with the intentions described
in the listing particulars the directors are
not recommending the payment of a
dividend
disposals
on 1 march 2002 the group disposed of
its swiss operations to itris maintenance
ag under the terms of the sale itris
acquired the contracts held by synstar
computer services ag the stocks of
maintenance equipment and re
employed 41 of its staff the sales and
losses associated with these operations
are disclosed as discontinued activities
the loss on disposal of £15m has been
treated as an exceptional item and is
reported in more detail in note 2 to the
ﬁnancial statements
as reported last year on 8 may 2001 the
group disposed of the share capital of
synstar computer services spa and its
other italian subsidiaries to gruppo atr srl
of brescia italy the sales and losses
associated with these operations are
disclosed as discontinued activities the loss
on disposal of £45m has been treated as
an exceptional item and is reported in more
detail in note 2 to the ﬁnancial statements
directors
the directors of the company at the date
of this report are shown on page 23
the executive directors who served
during the year and subsequently are as
follows
a coles resigned 7 march 2002
m e ettling appointed 5 june 2002
s d gleadle
s w vaughan 
the nonexecutive directors who served
during the year and subsequently are as
follows
j p feuer
j p leighﬁeld chairman
j a osbaldiston 
r j piper 
at each annual general meeting any
director who has been appointed by the
board since the previous general meeting
shall retire from office in addition one
third of the other directors who are subject
to retirement by rotation shall retire
together with any director who has not
been appointed or reappointed within
the last three years all retiring directors
will be eligible for reappointment
at the forthcoming annual general meeting
messrs m e ettling and s d gleadle retire
in accordance with the articles of
association and offer themselves for re
election mr j p feuer retires but does not
offer himself up for reelection
details of directors of the company their
remuneration and shareholdings are detailed
in note 5 to the ﬁnancial statements
substantial shareholdings
as at 26 october 2002 the following
shareholders were interested in 30 or
more of the issued share capital of the
company
except as noted below the directors are
not aware of any person as at 26 october
2002 who was interested in 30 or more
of the issued share capital of the
company or could directly or indirectly
exercise control over the company
employment policies
as a progressive service organisation
employees at every level are critical to
the company and its future
management professional and technical
expertise are the group’s major assets
investment in developing and retaining
such skills is ongoing and well
established and is supported by
extensive use of inhouse and external
training programmes
the company recognises the value of
effective communication and consultation
with all employees and informing them of
the progress and policies of the group this
is achieved through formal and informal
meetings briefing groups and internal
newsletters the uk business has achieved
investor in people iip recognition
it is the group’s policy to encourage the
recruitment training and development of
disabled persons on the basis of their
aptitude and ability and the retention and
retraining of employees who become
disabled
consistent with the company’s human
resources policies the board encourages
staff to identify with the ﬁnancial success
of the business through the opportunity
to acquire ordinary shares staff can
participate in the ﬁnancial prosperity of
the group through share ownership
name number percentage
of ordinary of issued
shares share
capital
cvc capital 
partners ltd 50133250 3085
aberforth
partners 11318270 696
fidelity 
international ltd 11083093 682
jo hambro capital
management 8800000 542
chase nominees
limited 5010763 308
bny sg
nominees 4912000 302 p age 26
report of the directors
continued
employee incentive arrangements include
an executive share option scheme and a
sharesave scheme
payments to suppliers
the company’s operating companies
determine terms and conditions of
payment for the supply of capital and
revenue items by agreement with suppliers
payment is then made to these terms
subject to the terms and conditions being
met by the suppliers as at 30 september
2002 trade creditors of the group were
equivalent to 38 days 2001 34 days and
in the company nil 2001 nil
charitable and political donations
the group made charitable donations of
approximately £7000 2001 £5000
during the year
there were no political contributions
annual general meeting
the annual general meeting will be held
on 6 march 2003 at synstar house 
1 bracknell beeches old bracknell lane
west bracknell berkshire rg12 7qx
auditors
having received the formal notice of
resignation of arthur andersen as
auditors to the company on 31 july 2002
the board resolved that deloitte  touche
be appointed to fill the casual vacancy so
created to serve as auditors until the
annual general meeting deloitte 
touche have expressed their willingness
to continue as the company’s auditors
and the directors will place a resolution
for the auditors’ appointment at the
forthcoming annual general meeting
directors’ remuneration policy
the combined code on corporate
governance appended to the listing
rules of the uk listing authority
recommends that each year the board
should consider whether shareholders
should be invited to approve the
directors’ remuneration policy at the
annual general meeting the board has
decided that it is appropriate for
shareholders to be given such an
opportunity at the forthcoming annual
general meeting the company’s
remuneration policy is detailed in the
report of the board’s remuneration
committee set out in the remuneration
report on pages 2728
statement of directors’ responsibilities
company law requires the directors to
prepare accounts for each ﬁnancial
period which give a true and fair view of
the state of affairs of the company and
the group at the end of the financial year
and of the proﬁt or loss for that year in
preparing those accounts the directors
are required to
•
select suitable accounting policies and 
then apply them consistently
•
make judgements and estimates that 
are reasonable and prudent
•
state whether applicable accounting 
standards have been followed subject 
to any material departures disclosed 
and explained in the accounts and
•
prepare the accounts on the going 
concern basis unless it is inappropriate 
to presume that the group will continue
in business
the directors are responsible for keeping
proper accounting records which disclose
with reasonable accuracy at any time the
ﬁnancial position of the company and
group and to enable them to ensure that
the accounts comply with the companies
act 1985 they are also responsible for
safeguarding the assets of the company
and group and hence for taking
reasonable steps for the prevention and
detection of fraud and other irregularities
by order of the board 
s d gleadle
secretary
registered ofﬁce
synstar house
1 bracknell beeches
old bracknell lane west
bracknell
berkshire rg12 7qx p age 27
as well as complying with the provisions
of the code as disclosed in the
company’s corporate governance
statements the board has applied the
provisions of good governance relating
to the directors’ remuneration as
described below
introduction
the remuneration committee makes
recommendations to the board on
executive remuneration within written
terms of reference
the remuneration committee is
composed entirely of nonexecutive
directors – j p leighfield j p feuer 
j a osbaldiston and r j piper – and is
chaired by j a osbaldiston the
committee determines the overall
remuneration package for executive
directors and senior management taking
into account independent research
information and advice in order to attract
motivate and retain high quality
executives capable of achieving the
company’s objectives and to reward
them for enhancing value to
shareholders in determining the group’s
remuneration policy the remuneration
committee has given full consideration to
the combined code
full details of the remuneration for the
year ended 30 september 2002 are set
out in note 5 to the financial statements
salary and other benefits
salaries for the executive directors and
senior management are reviewed
annually policies concerning other
benefits such as performance bonuses
and other terms and conditions of
employment are also reviewed annually
annual bonus
executive directors and senior
management participate in an annual
bonus scheme the terms of which are
agreed in advance by the remuneration
committee the performance bonuses are
paid for achieving or exceeding business
targets set at the start of the year and are
capped for the executive directors the
targets include revenue profit cash flow
eps and other business criteria the
committee considers the targets to be
relevant and stretching and believes that
the resultsdriven approach is in the best
interest of shareholders all bonuses are
nonpensionable
pensions
the group’s pension arrangements are
described in detail in note 26
all payments by the group are to a
defined contribution pension scheme or
to an executive plan other than as
detailed in note 26
service contracts
the executive directors have service
contracts that can be terminated by the
company with a notice period of 
12 months and by the director with a
notice period of six months the service
contracts do not contain any onerous
termination or compensation terms each
service contract will terminate when the
director reaches the age of 60
remuneration of nonexecutive
directors
nonexecutive directors’ fees are
determined by the board on the basis of
independent advice on current levels in
similar businesses each nonexecutive
director withdraws from the remuneration
committee in respect of matters relating
to his own position nonexecutive
directors are not eligible for pensions
incentives or any similar payments other
than outofpocket expenses in connection
with the performance of their duties
share schemes
the remuneration committee is also
responsible for ensuring proper formulation
and operation of any share schemes
the company operates an inland revenue
approved executive share option scheme
a noninland revenue approved
executive share option scheme a uk
savings related sharesave scheme that
has been approved by the inland
revenue and an international sharesave
scheme for nonuk employees
executive share option scheme
under the rules of the synstar 1999
executive share option scheme which was
adopted by the board on the 10 february
1999 and approved by the inland revenue
on the 5 march 1999 the board may grant
options to selected members of staff who
satisfy particular conditions which the
board may establish conditions include
seniority performance and length of
service
all options are granted at market value
and are normally exercisable only after
they have been held for three years and if
challenging eps performance criteria are
achieved no option may be granted to
an individual under the approved scheme
if immediately following such grant the
aggregate option price of all shares over
which he currently holds options under
any inland revenue approved scheme
except for savings related share option
schemes exceeds the statutory limit
which is currently £30000
under the rules of the unapproved share
option scheme no option may be granted
to an individual if immediately following
such a grant the aggregate amount of
the option price of all shares over which
he holds options granted under all
company share plans except savings
related share option schemes exceeds
four times his annual remuneration
upon his appointment as managing
director – uk and ireland mike ettling
was granted options on 500000 ordinary
shares at an exercise price of 510 pence
being the market value at the date of
grant 4 july 2002 stephen gleadle was
granted options on 200000 ordinary
shares at an exercise price of 490 pence
being the market value at the date of
grant 16 september 2002 the options
are not subject to performance criteria
but can only vest after a three to five
year period at the earliest
uk sharesave scheme
the synstar 1999 sharesave scheme was
adopted by the board on 10 february 1999
and approved by the inland revenue on 
5 march 1999 the offer made in february
2001 was made at an option price of 
504 pence this being the average middle
market quotation of ordinary shares over
the five days preceding the invitation date
the option price was not discounted 
the board authorised the allocation of
remuneration report p age 28
remuneration report
continued
800000 shares for this purpose no
performance criteria are attached to these
options
no executive directors have participated
in the uk sharesave scheme
international sharesave scheme
the synstar 1999 international sharesave
scheme was adopted by the board on the
10 february 1999 the offer made in
february 2001 was made at an option
price of 504 pence this being the
average middle market quotation of
ordinary shares over the five days
preceding the invitation date the option
price was not discounted the board
authorised the allocation of 400000
shares for this purpose no performance
criteria are attached to these options
no executive directors have participated
in the international sharesave scheme
j a osbaldiston
chairman
remuneration committee
synstar plc continues to recognise its
environmental responsibilities and the
implications of its business activities
upon the environment environmental
issues are always given a high business
priority
the group demonstrates its ongoing
commitment to this policy in the procedure
for disposal of redundant it hardware
this is in accordance with current legislation
and also achieves the following
•
protection from data security breaches
•
processing in an environmentally
friendly fashion and
•
redistribution of equipment to 
charitable organisations where
appropriate
this policy statement is approved by the
board and is facilitated by an
environmental steering group the
steering group works with environmental
specialists to establish standards set
objectives and ensure effective
implementation of this policy
environmental policies are kept under
regular review and are communicated to
employees and other interested parties
on a frequent basis
the guiding principles of the policy are
•
monitor the groups environmental 
performance and set targets for 
improvement and prevention of 
pollution
•
contractin specialist organisations 
where necessary
•
be committed to comply with legal 
requirements relating to the groups 
activities
•
assess in advance the environmental 
impact of any significant new legislation
or process
•
promote the groups services to 
increase levels of waste recycling
•
provide interested parties with the 
groups environmental policy upon 
request
•
provide adequate level of environmental
awareness training for staff
•
monitor and control hazardous materials
used or generated by our activities
•
monitor and improve the efficiency of 
consumption of resources
•
monitor our performance against the 
objectives and targets set and review 
these on a continual basis
in anticipation of the forthcoming weee
waste electronic  electric equipment
directive synstar has contracted a
specialist organization to process its
redundant it assets and accessories in a
manner that maximises reuse through
resale and recycling and minimises
landfill via an iso 14001 process
environmental policy statement p age 29
synstar plc is committed to high
standards of corporate governance the
board is accountable to the shareholders
for good corporate governance and this
statement sets out how the principles of
governance are applied to the company
statement of compliance with the code
of best practice
throughout the year the company has
been in compliance with the provisions
set out in the combined code appended
to the listing rules of the financial
services authority
statement about applying the principles
of good governance
the company has applied the principles of
good governance as set out in section 1
of the combined code by complying with
the code of best practice as reported
above a more comprehensive explanation
of how the principles have been applied
is set out below with reference to
directors’ remuneration further details
can be found in the remuneration report
committees of the board
board of directors
the company is managed by the board
of directors which comprises three
executive directors and four non
executive directors r j piper is the senior
nonexecutive director for the requirements
of provision a21 of the combined code
all directors are equally accountable
under the law for the proper stewardship
of the companys affairs and the board of
directors take all of the actions they
deem necessary to meet the companys
objectives this includes reviewing long
term plans business performance and
other corporate matters the board of
directors approves the groups annual
budget and any significant variations
from that budget are discussed and
appropriate action taken the non
executive directors have a particular
responsibility to ensure that strategies
proposed by the executive directors are
discussed and examined fully not only
against the longterm interests of
shareholders but also to ensure that they
take proper account of the interests of
employees customers and suppliers
there is an agreed procedure for directors
to obtain independent professional advice
the board meets each month to review
results to date and to expedite the groups
business it has a formal schedule of
matters for its regular consideration and
it delegates certain other responsibilities
to the following committees
group operations board
the operations board is responsible for the
management of the business it is chaired
by the chief executive and comprises the
other executive directors the strategy
director strategic accounts director
human resources director the managing
director of mainland europe and the
heads of the five ‘centres of excellence’ 
audit committee
the audit committee is responsible for
the following matters
•
making recommendations to the board
on the appointment and remuneration 
of the external auditors 
•
reviewing the conduct and control of 
the annual audit and overseeing the 
operation of proper internal controls
•
receiving and reviewing regular reports
from the risk management department
•
reviewing the measurement and 
reporting of the financial performance of
the group 
•
reviewing the financial statements 
before recommendation to the board 
the audit committee is chaired by 
r j piper and comprises the four non
executive directors it meets four times
per year there is a provision for non
executive directors to meet with the
auditors without the executives present
nominations committee
the nominations committee comprises
the chairman the chief executive and the
nonexecutive directors it is responsible
for the nomination for board approval of
candidates for board appointment
remuneration committee
see pages 2728
internal control
the combined code requires that
directors review the effectiveness of the
groups system of internal controls this
requirement extends the directors review
to cover all controls including operational
compliance and risk management as well
as financial 
the directors confirm their responsibility
for review of the system of internal
control and that they have reviewed its
effectiveness during the year
the system of internal control is designed
to provide reasonable but not absolute
assurance
the board has modified existing risk
management and internal control
processes necessary to comply fully with
the turnbull guidance
the processes to identify and manage the
key risks to the success of the group are
an integral part of the internal control
environment these processes which are
reviewed and improved as necessary
include strategic planning the appointment
of senior managers the regular
monitoring of performance control over
capital expenditure and investments
reviews of top customers and major
prospects and the provision of accurate
and timely management information 
the risk management process has been
embedded in the groups operational
framework and generates a series of 
‘risk registers’ which are reviewed by
management on a regular basis
this ongoing process for evaluating
significant risks was in place throughout the
year and to the date of the annual report
the key features of the groups internal
control systems are as follows
•
group culture and corporate social 
responsibility
the board emphasises a culture of
integrity competence fairness and
responsibility synstar plc is particularly
proud to be listed on the 
ftse4good index in respect of 
‘ethical investments’ this has been
achieved through a policy of corporate
corporate governance p age 30
corporate governance
continued
social responsibility across the uk and
overseas taking into account such
considerations as fairness and
responsibility towards the welfare and
safety of
•
our employees
•
our suppliers and their employees and
•
the communities and environments in 
which we conduct our business 
group organisation
the board itself focuses mainly on
strategic issues whereas the group
operating board concentrates on the
formulation of strategic proposals to the
board and operational decisionmaking 
delegation of authority
the board approves the terms of any
authorisations given to directors and
senior managers of the company which
cover new business purchase order and
invoice values conditions of employment
staff recruitment banking transactions
company secretarial issues and
development of the business as a whole
financial reporting
there is a comprehensive financial
planning system including an annual
budget approved by the board the
business is broken down into component
parts and the results of these are
reported monthly and compared to the
budget forecast updates are prepared
monthly with full rolling 12month
forecasts prepared every quarter 
the company reports to shareholders on
a halfyearly basis
going concern
the directors have reviewed the groups
budgets forecasts and plans and have a
reasonable expectation that the company
and the group have adequate resources
to continue in operational existence for
the foreseeable future as a consequence
the company continues to adopt the
going concern basis in preparing the
financial statements 
controls over contract bids
in order to meet its growth targets it is
essential that the group continue to renew
existing contracts and win new contracts
changes in the value of net contract
business is a principal performance
indicator monitored by the board 
operating procedures
all managers are provided with copies of
the various policies and procedures
manuals covering operating procedures
security health and safety and personnel
procedures furthermore these
documents are also available on the
company ‘intranet’ compliance with
these policies and procedures is
monitored on a regular basis 
control over treasury
the group employs a tax and treasury
manager to make optimal use of the
funds and borrowing opportunities at the
groups disposal the group does not
have any complex derivatives or foreign
exchange contracts the group policy
has been to partially hedge currency
exposures arising from investment
overseas by borrowing in the currency of
the overseas country as and when
required in order to manage the risk of
fluctuating rates of exchange
furthermore the group has recently set
up a eurocash pool in order to optimise
the management of nonsterling cash
internal audit
the head of risk management visits each
business unit in accordance with a
modular ‘rolling plan’ of internal audit
work following each review a draft
report is prepared setting out the results
of the work the comments of the
relevant management team are then
incorporated and the report is then
published in final form
the head of risk management submits a
quarterly report to the audit committee
summarising work completed within the
period he presents his findings to the
audit committee together with the areas
on which he will focus in the forthcoming
months copies of the reports are
circulated to all senior managers 
there is also a provision giving the head
of risk management unrestricted access 
to the nonexecutive directors should
this be deemed necessary 
in addition the head of risk management
facilitates and reviews the risk
management process and administers
the group insurance programme 
relations with shareholders
the board gives a high priority to
communications with shareholders 
there are regular meetings with
individual institutional shareholders as
well as general presentations after the
interim and preliminary results copies of
the interim and final accounts are sent to
every shareholder and company
information is published regularly via its
website wwwsynstarcom there is also
an opportunity for individual shareholders
to question the board at the annual
general meeting and the company
responds to numerous enquiries from
individual shareholders throughout 
the year p age 31
independent auditors’ report 
to the members of synstar plc
we have audited the financial statements
of synstar plc for the year ended 
30 september 2002 which comprise the
consolidated profit and loss account 
the balance sheets the consolidated cash
flow statement the statement of total
recognised gains and losses the
statement of accounting policies and the
related notes 1 to 27 these financial
statements have been prepared under the
accounting policies set out therein
respective responsibilities of directors
and auditors
as described in the statement of
directors’ responsibilities the company’s
directors are responsible for the preparation
of the financial statements in accordance
with applicable united kingdom law and
accounting standards our responsibility
is to audit the financial statements in
accordance with relevant united kingdom
legal and regulatory requirements
auditing standards and the listing rules
of the financial services authority
we report to you our opinion as to
whether the financial statements give a
true and fair view and are properly
prepared in accordance with the
companies act 1985 we also report if in
our opinion the directors’ report is not
consistent with the financial statements if
the company has not kept proper
accounting records if we have not received
all the information and explanations we
require for our audit or if information
specified by law or the listing rules
regarding directors’ remuneration and
transactions with the company and other
members of the group is not disclosed
we review whether the corporate
governance statement reflects the
companys compliance with the seven
provisions of the combined code specified
for our review by the listing rules and
we report if it does not we are not
required to consider whether the boards
statements on internal control cover all
risks and controls or form an opinion on
the effectiveness of the groups corporate
governance procedures or its risk and
control procedures
we read the directors’ report and the
other information contained in the annual
report for the above year as described in
the contents section and consider the
implications for our report if we become
aware of any apparent misstatements or
material inconsistencies with the financial
statements
basis of audit opinion
we conducted our audit in accordance
with united kingdom auditing standards
issued by the auditing practices board
an audit includes examination on a test
basis of evidence relevant to the amounts
and disclosures in the financial statements
it also includes an assessment of the
significant estimates and judgements made
by the directors in the preparation of the
financial statements and of whether the
accounting policies are appropriate to the
circumstances of the company and the
group consistently applied and
adequately disclosed
we planned and performed our audit so 
as to obtain all the information and
explanations which we considered
necessary in order to provide us with
sufficient evidence to give reasonable
assurance that the financial statements
are free from material misstatement
whether caused by fraud or other
irregularity or error in forming our
opinion we also evaluated the overall
adequacy of the presentation of
information in the financial statements
opinion
in our opinion the financial statements
give a true and fair view of the state of
affairs of the company and the group as
at 30 september 2002 and of the profit of
the group for the year then ended and
have been properly prepared in
accordance with the companies act 1985
an audit does not provide assurance on
the maintenance and integrity of the
website including controls used to
achieve this and in particular on whether
any changes may have occurred to the
financial statements since first published
these matters are the responsibility of
the directors but no control procedures
can provide absolute assurance in this
area legislation in the united kingdom
governing the preparation and
dissemination of financial statements
differs from legislation in other
jurisdictions
deloitte  touche
chartered accountants and 
registered auditors
birmingham
26 november 2002 consolidated profit and loss account
for the year ended 30 september 2002
before exceptional before exceptional
exceptional items exceptional items reclassified
items note 2 total items note 2 note 10
2002 2002 2002 2001 2001 2001
notes £’000 £’000 £’000 £’000 £’000 £’000
turnover
continuing operations 220150 – 220150 218463 – 218463
discontinued operations 1720 – 1720 19735 – 19735
total turnover 1 221870 – 221870 238198 – 238198
cost of sales 163558 – 163558 178874 2533 181407
gross profit 58312 – 58312 59324 2533 56791
selling and marketing costs 12188 – 12188 14595 – 14595
administration expenses 38116 – 38116 40484 17898 58382
operating profit loss before goodwill
continuing operations 8148 – 8148 6877 8117 1240
discontinued operations 140 – 140 2272 421 2693
operating profit loss before goodwill amortisation 8008 – 8008 4605 8538 3933
goodwill amortisation – – – 360 – 360
goodwill impairment – – – – 11893 11893
operating profit loss
continuing operations 8148 – 8148 6577 18972 12395 
discontinued operations 140 – 140 2332 1459 3791
total operating profit loss 1 8008 – 8008 4245 20431 16186
loss on disposal of discontinued operations 2 – 1493 1493 – 4514 4514
profit loss on ordinary activities before interest 8008 1493 6515 4245 24945 20700
interest receivable and similar income 6 235 – 235 225 – 225
interest payable and similar charges 7 218 – 218 821 – 821
profit loss on ordinary activities before taxation 3 8025 1493 6532 3649 24945 21296
tax on profit on ordinary activities 8 2563 2563 2272 1193 1079
profit loss for the financial year 19 5462 1493 3969 1377 23752 22375
earnings loss per share 9
adjusted basic 34p 11p 
basic 24p 138p
diluted 24p 138p
adjusted basic earnings per share has been calculated before exceptional items net of taxation and goodwill amortisation
the accompanying notes and statement of accounting policies are an integral part of this consolidated profit and loss account
p age 32 consolidated statement of total recognised gains and losses
for the year ended 30 september 2002
2002 2001
£’000 £’000
profit loss for the financial year 3969 22375
currency translation differences on foreign
currency net investments 81 221
total recognised profits losses relating to the year and since the
last annual report and accounts 3888 22596
the accompanying notes and statement of accounting policies are an integral part of this consolidated statement of total recognised
gains and losses
p age 33 consolidated balance sheet
30 september 2002
2002 2001
notes £’000 £’000
fixed assets
intangible assets 11 – –
tangible assets 12 33646 36910
33646 36910
current assets
stocks 14 1950 2988
debtors  amounts falling due within one year 15 51432 48158
debtors  amounts falling due after one year 15 1973 –
cash at bank and in hand 24 17431 12993
72786 64139
creditors amounts falling due within one year 16 67745 66250
net current assets liabilities 5041 2111
total assets less current liabilities 38687 34799
net assets 38687 34799
capital and reserves
calledup share capital 18 1625 1625
share premium account 19 – 94578
profit and loss account 19 37062 61404
total shareholders’ funds – all equity 20 38687 34799
the accounts were approved by the board of directors on 26 november 2002 and signed on its behalf by
s w vaughan chief executive
s d gleadle group finance director
the accompanying notes and statement of accounting policies are an integral part of this consolidated balance sheet
p age 34 2002 2001
notes £’000 £’000
fixed assets
investments 13 – –
current assets
debtors  15 32770 102770
net assets 32770 102770
capital and reserves
calledup share capital 18 1625 1625
share premium account 19 – 94578
profit and loss account 19 31145 6567
total shareholders’ funds  all equity 32770 102770
the accounts were approved by the board of directors on 26 november 2002 and signed on its behalf by
s w vaughan chief executive
s d gleadle group finance director
the accompanying notes and statement of accounting polices are an integral part of this company balance sheet
2002 2001
notes £’000 £’000
net cash inflow from operating activities 21 21441 14711
returns on investments and servicing of finance 22 17 596
taxation 22 977 3233
capital expenditure 22 11511 11459
disposals 22 546 2338
net cash inflow before financing 8424 1761
financing 22 954 1368
increase in cash in the year 24 7470 393
the accompanying notes are an integral part of this consolidated cash flow statement
company balance sheet
30 september 2002
consolidated cash flow statement
for the year ended 30 september 2002
p age 35 statement of accounting policies
30 september 2002
the principal accounting policies all of which have been applied consistently throughout the year and the preceding year are set out
below in accordance with the requirements of frs18 regular reviews have been performed of all accounting policies to ensure that
they remain appropriate for the purposes of giving a true and fair view
a basis of preparation
the accounts have been prepared under the historical cost convention and in accordance with applicable united kingdom accounting
standards
b basis of consolidation
the group accounts consolidate the accounts of synstar plc and its subsidiary undertakings drawn up to 30 september 2002
as provided by section 230 of the companies act 1985 no profit and loss account is presented in respect of the company the loss
in the year dealt with in the accounts of the company was £70000000 2001  profit £883000 the loss in the year related to the
write off of irrecoverable intercompany balances
c turnover and revenue recognition
turnover represents the value of goods supplied and services provided to third parties during the year net of discounts and exclusive
of value added tax revenue from contracts for maintenance business support and managed services is recognised on a prorata
basis over the contract period any revenue covering future periods is deferred and credited to the profit and loss account over the
period to which it relates revenue from product sales is recognised on delivery revenue from projects consultancy installation and
other services is recognised when the service has been provided
d pension costs
for defined contribution schemes the amount charged to the profit and loss account in respect of pension costs is the contributions
payable in the year differences between contributions payable in the year and contributions actually paid are shown as either
accruals or prepayments in the balance sheet 
for defined benefit schemes the amount charged to the profit and loss account in respect of pension costs is the estimated regular
cost of providing the benefits accrued in the year adjusted to reflect variations from that cost differences between amounts charged
to the profit and loss account and amounts funded are shown as either accruals or prepayments in the balance sheet
e leases
operating lease rentals are charged to the profit and loss account on a straightline basis over the lease term
f intangible assets  goodwill
goodwill arising on the acquisition of subsidiary undertakings and businesses representing any excess of the fair value of the
consideration given over the fair value of the identifiable assets and liabilities acquired is capitalised and written off on a straightline
basis over its useful economic life provision is made for any impairment
prior to 1998 goodwill arising on acquisitions was written off to reserves as a matter of accounting policy and would be reinstated 
as part of the profit and loss on any subsequent disposal of businesses to which it relates following the introduction of frs10
goodwill and intangible assets the goodwill previously written off to reserves has not been reinstated in the balance sheet the
amount of this goodwill is £39836000 2001 £39836000
g tangible fixed assets and depreciation
tangible fixed assets are shown at cost and are depreciated on a straightline basis to their estimated residual values over their
estimated lives as follows
short leasehold land and buildings  over the period from initial occupation to the first rent review 
equipment fixtures and fittings 

20333
repairable computer spares purchased which are used in the servicing of the maintenance contracts of the business are capitalised
as fixed assets and depreciation is provided at a rate which will write off the cost of these spares over their estimated useful life of 
50 months
p age 36 statement of accounting policies
30 september 2002
h stocks
stocks are stated at the lower of average purchase cost and net realisable value net realisable value is based on estimated selling
price less all costs to be incurred prior to completion and sale provision is made for obsolete and slow moving items
i taxation
current tax including uk corporation tax and foreign tax is provided at amounts expected to be paid or recovered using the tax
rates and laws that have been enacted or substantially enacted by the balance sheet date
deferred taxation is recognised in respect of all 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 timing differences are differences between the groups taxable profits and its results as stated in
the financial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in which
they are recognised in the financial statements
a net deferred tax asset is regarded as recoverable and therefore only recognised when on the basis of all available evidence it can
be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing
differences can be deducted
deferred tax is not recognised when fixed assets are revalued unless by the balance sheet date there is a binding agreement to sell
the revalued assets and the gain or loss expected to arise on sale has been recognised in the financial statements neither is deferred
tax recognised when fixed assets are sold and it is more likely than not that the taxable gain will be rolled over being charged to tax
only if and when the replacement assets are sold
deferred tax is recognised in respect of the retained earnings of overseas subsidiaries only to the extent that at the balance sheet
date dividends have been accrued as receivable or a binding agreement to distribute past earnings in future has been entered into by
the subsidiary
deferred tax is measured at 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
j foreign currency
assets and liabilities in foreign currencies are expressed in sterling at the rates of exchange ruling at the balance sheet date
the trading results of overseas subsidiaries are translated at the average exchange rate ruling during the year with the adjustment
between average rates and the rate ruling at the balance sheet date being taken to reserves the difference arising on the restatement
of the opening net investment including goodwill of overseas subsidiary undertakings are also dealt with as adjustments to reserves
other exchange differences are dealt with in the profit and loss account
p age 37 notes to the accounts
30 september 2002
1 segmental analysis
all turnover operating profit and net assets were attributable to the group’s principal activities and to group companies located and
operating within europe
continuing discontinued exceptional total continuing discontinued exceptional total
2002 2002 2002 2002 2001 2001 2001 2001
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
1a turnover by destination
uk 142659 – – 142659 141284 – – 141284
france 16967–– 16967 16377 – – 16377
germany 26744–– 26744 27400 – – 27400
switzerland –1720– 1720 – 5988 – 5988
italy –––– –13747–13747
rest of europe 33780 – – 33780 33402 – – 33402
220150 1720 – 221870 218463 19735 – 238198
1b class of business
turnover
computer services 200564 1720 – 202284 199199 19735 – 218934
business continuity 19586 – – 19586 19264 – – 19264
220150 1720 – 221870 218463 19735 – 238198
operating profit
computer services 8627 140 – 8487 7572 2332 6610 1370
business continuity 2441 – – 2441 2005 – 697 1308
central expenditure 2920 – – 2920 3000 – 13124 16124
8148 140 – 8008 6557 2332 20431 16186
net assets
computer services 24973 26986
business continuity 2919 3966
unallocated 10795 3847
38687 34799
1c geographical segment
turnover
uk 142467 – – 142467 141179 – – 141179
rest of europe 77683 1720 – 79403 77284 19735 – 97019
220150 1720 – 221870 218463 19735 – 238198
operating profit
uk 9490 – – 9490 7119 – 1519 5600
rest of europe 1578 140 – 1438 2458 2332 5788 5662
central expenditure 2920 – – 2920 3000 – 13124 16124
8148 140 – 8008 6577 2332 20431 16186
p age 38 notes to the accounts
30 september 2002
1 segmental analysis continued
total total
2002 2001
£’000 £’000
net assets
uk 20698 21392
rest of europe 7194 9560
unallocated 10795 3847
38687 34799
unallocated net assets consist of cash tax payable and other centrally held or managed assets and liabilities
in relation to the discontinued operations in switzerland the profit and loss includes cost of sales of £1160000 year ended 
30 september 2001 – £4649000 gross profit of £560000 year ended 30 september 2001 – £1339000 sales and marketing costs
of £149000 year ended 30 september 2001 – £632000 and administration expenses of £551000 year ended 30 september 2001 –
£3263000 including goodwill of £1065000 and exceptional items of £421000
in relation to the discontinued operations in italy the profit and loss comparatives include cost of sales in the year ended 
30 september 2001 of £11889000 gross profit of £1858000 sales and marketing costs of £1121000 and administration expenses
of £1972000
2 exceptional items
2002 2001
£’000 £’000
restructuring – 2533
total operating items charged to cost of sales – 2533
restructuring – 6005
impairment of goodwill – 11893
total operating items charged to administration expenses – 17898
total operating exceptional items – 20431
loss on disposal of discontinued operations 1493 4514
total exceptional items before tax 1493 24945
on 1 march 2002 the group disposed of its swiss operations to itris maintenance ag under the terms of the sale itris acquired the
contracts held by synstar computer services ag the stocks of maintenance equipment and reemployed 41 of its staff the consideration
for the sale was a cash payment of £03m the exceptional item of £15m relates to the loss on the sale of the business and associated
costs the results of the swiss subsidiary have been disclosed as discontinued activities the tax effect is £nil
in 2001 the group undertook a strategic review which led to a restructuring programme to enable the group to respond faster and more
creatively to the needs of customers this restructuring programme involved both a redundancy and new hiring programme resulting
in a charge for the year of £85m which was considered exceptional to the groups main activities the tax effect of the restructuring
charge was a credit of £12m
during 2001 an impairment review was conducted of the carrying value of goodwill within the group consequently there was an
exceptional write down in goodwill of £104m held in relation to the lancare subsidiary in addition due to the trading performance in
switzerland and luxemburg a full write down of the £1m goodwill on ct consulting ag and £05m on tecsys was also made
therefore the total exceptional write down of goodwill in the period was £119m the tax effect was £nil
p age 39 notes to the accounts
30 september 2002
2 exceptional items continued
on 8 may 2001 the group disposed of the share capital of synstar computer services spa scs spa and its other italian
subsidiaries to gruppo atr srl of brescia italy this resulted in an exceptional loss on disposal of £45m the results of the italian
subsidiaries have been disclosed as discontinued activities the tax effect was £nil
3 profit loss on ordinary activities before taxation
profit loss on ordinary activities before taxation is stated after charging
2002 2001
£’000 £’000
depreciation of owned tangible fixed assets 14302 15104
amortisation of goodwill – 360
impairment of goodwill – 11893
operating lease rentals
– land and buildings 3952 3649
– other 6439 5831
auditors’ remuneration
– audit services arthur andersen 34 244
– audit services deloitte  touche 193 –
– nonaudit services arthur andersen 183 243
– nonaudit services deloitte  touche 119 –
4 staff costs
the average monthly number of employees including executive directors was
2002 2001
number number
computer services 2856 2981
business continuity 105 83
central 37 16
2998 3080
their aggregate remuneration comprised
2002 2001
£’000 £’000
wages and salaries 76583 76506
social security costs 12048 12168
pension costs 2294 2139
other staff costs 1820 1180
92745 91993
p age 40 notes to the accounts
30 september 2002
5 directors’ remuneration interests and transactions
aggregate remuneration of the directors was as follows
2002 2001
£’000 £’000
emoluments 901 916
company contributions to money purchase pension schemes 106 102
1007 1018
directors’ emoluments 
basic benefits annual total total
salaryfees in kind bonuses 2002 2001 
£’000 £’000 £’000 £’000 £’000 
executive directors
s k bolton to 21 november 2000 – – – – 24
a coles to 7 march 2002 127 8 – 135 131
m e ettling from 5 june 2002 58 – 10 68 –
r w ferré to 30 september 2001 – – – – 226
s d gleadle 174 4 40 218 189
s w vaughan 272 4 95 371 239
nonexecutive directors
j p feuer 20 – – 20 20
j p leighfield 45 – – 45 43
j a osbaldiston 22 – – 22 22
r piper 22 – – 22 22
740 16 145 901 916
in addition to the above s d gleadle received on 28 february 2002 25000 shares in synstar plc the market value of the shares at
this date was £062 
directors’ pension entitlements
four directors are members of money purchase schemes 2001  five
contributions paid by the company in respect of directors were as follows  
2002 2001
£’000 £’000
s k bolton to 21 november 2000 – 5  
a coles to 7 march 2002 16 17
m e ettling from 5 june 2002 6 – 
r w ferré to 30 september 2001 – 22 
s d gleadle 17 17  
s w vaughan 67 41
106 102 
p age 41 notes to the accounts
30 september 2002
5 directors’ remuneration interests and transactions continued
directors’ share options
aggregate emoluments disclosed above do not include any amounts for the value of options to acquire ordinary shares in the
company granted to or held by the directors details of options held by directors are as follows
date number number exercise
granted 2002 2001 price exercise period 
m e ettling 040702 500000 – £0510 04072005 to 03072012
s d gleadle 070100 100000 100000 £2275 07012003 to 06012010
s d gleadle 180700 100000 100000 £0735 18072003 to 17072010
s d gleadle 160902 200000 – £0490 16092005 to 15092012
s w vaughan 030101 1360000 1360000 £0485 03012004 to 02012011
no options were exercised during the year
exercise of options granted prior to 2001 is subject to the company’s eps increasing on an annual basis over any threeyear 
period between the grant and exercise of an option by 13 above the rate of inflation the market price of the ordinary shares at
30 september 2002 was £058 and the range during the year was £0435 to £079
directors’ interests
as at 30 september 2002 the directors had interests in the share capital of the company as follows
2002 2001
number number
j p feuer 415000 415000
s d gleadle 85000 60000 
j p leighfield 375000 375000
j a osbaldiston 7000 7000
882000 857000
there have been no movements in directors’ interests since the yearend
6 interest receivable and similar income
2002 2001
£’000 £’000
bank interest 235 225
7 interest payable and similar charges
2002 2001
£’000 £’000
bank loans and overdrafts 183 627
other loans 35 194
218 821
p age 42 notes to the accounts
30 september 2002
8 tax on profit loss on ordinary activities
the tax charge is based on the profit loss for the year and comprises
2002 2001
£’000 £’000
uk corporation tax at 30 2001 – 30
– continuing operations 1853 –
overseas taxation
– continuing operations 1236 1187
– discontinued operations – 162
adjustment in respect of prior year – overseas taxation continuing operations 24 270
group current tax charge for year 3065 1079
deferred taxation 502 –
2563 1079
the tax charge for 2001 includes a tax credit in respect of exceptional items of £1193000
deferred taxation recognised as follows
2002 2001
£’000 £’000
deferred tax  accelerated depreciation 502 –
deferred taxation not recognised is as follows
2002 2001
£’000 £’000
other timing differences 2980 3770
a substantial part of the above balance relates to tax losses in countries which have not made taxable profits in recent years
the differences between the total current tax shown above and the amount calculated by applying the standard rate of uk corporation
tax to the profit before tax is as follows
2002 2001
£’000 £’000
group profit loss on ordinary activities before tax 6532 21296
t ax on group profit loss on ordinary activities at standard uk corporation tax rate of 30 2001 – 30 1960 6389
effects of
expenses not deductible for tax purposes 302 7160
depreciation in excess of capital allowances  502 263
higher tax rates on overseas earnings 325 315
adjustments to tax charge in respect of previous periods 24 270
group current tax charge for year 3065 1079
the expenses not deductible for tax purposes principally consist of the loss on disposal of discontinued operations 
the tax charge in future periods may be affected by the mix in profits between the uk and overseas
the group earns its profits primarily in the uk therefore the tax rate used for tax on profit on ordinary activities is the standard rate
for uk corporation tax currently 30
the group’s overseas tax rates are higher than those in the uk primarily because the profits earned in belgium and germany are
taxed at a higher rate
p age 43 notes to the accounts
30 september 2002
9 earnings loss per share
basic earnings profit loss per share is calculated in accordance with frs14 earnings per share based on profits after tax of
£3969000 2001 – £22375000 loss and 162500000 2001 – 162500000 ordinary shares being the weighted average in issue
during the year
fully diluted earnings profit loss per share is the basic earnings per share after allowing for the dilutive effect of options in issue 
the number of shares used for the fully diluted calculation is 162977000 2001 – 162500000
the adjusted basic earnings per share information has been calculated before exceptional costs net of taxation and goodwill
the directors believe this additional measure provides a better indication of the underlying trends in the business
the calculations of the adjusted earnings per share are based on the following profits
2002 2001
£’000 £’000
profit loss for the year for basic earnings per share 3969 22375
exceptional items 1493 24945
tax credit on exceptional items  – 1193
amortisation of goodwill – 360
profit for the year for adjusted basic earnings per share 5462 1737
weighted average number of shares in issue
2002 2001
number number
’000 ’000
for basic earnings per share 162500 162500
exercise of options 477 –
for fully diluted earnings per share 162977 162500
10 reclassification of prior year costs
the directors have reviewed the classification of costs between costs of sales and operating expenses in connection with the
restructuring of the group carried out in 2001 the comparative figues have been reclassified to ensure consistent presentation 
the impact of this restatement is to reclassify £2625000 of costs from overheads to cost of sales for the period to 30 september 2001
p age 44 notes to the accounts
30 september 2002
11 intangible fixed assets – goodwill
£’000
group
cost
at 1 october 2001 and 30 september 2002 12922
amortisation
at 1 october 2001 and 30 september 2002 12992
net book value
at 1 october 2001 and 30 september 2002 –
12 tangible fixed assets short 
leasehold repairable equipment
land and computer fixtures and
buildings spares fittings total
£’000 £’000 £’000 £’000
group
cost
at 1 october 2001 2061 67742 37735 107538
additions – 9696 2007 11703
disposals – 25380 757 26137
transfers –10641064 –
translation differences 11 293 9 313
at 30 september 2002 2072 53415 37930 93417
depreciation
at 1 october 2001 1403 45032 24193 70628
charge for year 105 10348 3849 14302
disposals –24859594 25453
transfers –709709 –
translation differences 2 248 44 294
at 30 september 2002 1510 31478 26783 59771
net book value
at 1 october 2001 658 22710 13542 36910
at 30 september 2002 562 21937 11147 33646
the above relate to the assets held by subsidiary undertakings the company holds no tangible fixed assets
p age 45 notes to the accounts
30 september 2002
13 investment in subsidiary undertakings
2002 2001
£ £
company
cost at beginning and end of year 1 1
the company’s investment comprises 100 of the ordinary share capital of synstar holdings limited
the group headed by the company has 100 investments in the following subsidiary undertakings all of which have been
consolidated into the group accounts to avoid a statement of excessive length details concerning investments which are not
significant have been omitted a full list of all subsidiaries will be included in the next annual return
country of incorporation principal
or registration activity
synstar holdings limited england and wales holding company
synstar international limited england and wales holding company
synstar computer services holdings limited england and wales holding company
synstar computer services uk limited england and wales computer services
synstar business continuity limited england and wales business continuity
dpce nederland bv netherlands computer services
synstar computer services bv netherlands computer services
synstar computer services holdings gmbh germany holding company
synstar computer services gmbh germany computer services
synstar data management gmbh germany computer services
synstar computer services europe sa france holding company
synstar computer services sa france computer services
synstar business continuity sarl france business continuity
synstar computer services nv belgium computer services
synstar computer services sa spain computer services
held directly by synstar plc
14 stocks
2002 2001
£’000 £’000
group
goods held for resale 736 1343
consumable spares 1214 1645
1950 2988
there is no material difference between the balance sheet value of stocks and their replacement cost
the company had no stocks at either yearend
p age 46 notes to the accounts
30 september 2002
15 debtors
2002 2001
£’000 £’000
group
amounts falling due within one year
trade debtors 46183 43415
other debtors 3787 3216
prepayments 1462 1527
51432 48158
amounts falling due within one year
deferred tax 502 –
other debtors 1471 –
1973 –
company
amounts falling due within one year
other debtors – 883
amounts falling due after one year
amounts owed by group undertakings 32770 101887
16 creditors amounts falling due within one year
2002 2001
£’000 £’000
group
bank loans and overdrafts unsecured 992 4975
trade creditors 12678 13012
corporation tax 3112 1034
other creditors 12794 13334
taxation and social security 4615 4336
accruals and deferred income 33554 29559
67745 66250
borrowings are repayable as follows
2002 2001
£’000 £’000
bank loans amounts falling due within one year 814 1738
overdrafts 178 3237
total borrowings 992 4975
details of loans are disclosed in note 18
p age 47 notes to the accounts
30 september 2002
17 derivatives and other financial instruments
the numerical disclosures in this note deal with financial assets and financial liabilities as defined in financial reporting standard 13
“derivatives and other financial instruments disclosures” frs13 certain financial assets such as investments in subsidiary
undertakings are excluded from the scope of these disclosures
as permitted by frs13 shortterm debtors and creditors have been excluded from the disclosures other than the currency disclosures
financial assets
the group’s financial assets consist of cash and deposits which are placed on money markets at overnight seven day and monthly
rates the currency profile on these assets is as follows
2002 euro swiss
sterling currencies francs total
£’000 £’000 £’000 £’000
cash and deposits 10905 6478 48 17431
2001 euro swiss
sterling currencies francs total
£’000 £’000 £’000 £’000
cash and deposits 8422 4363 208 12993
financial liabilities
the interest rate profile of the group’s financial liabilities at 30 september 2002 was
euro swiss
sterling currencies francs total
£’000 £’000 £’000 £’000
bank loans and overdrafts – 992 – 992
floating rate – 992 – 992 
the floating rate financial liabilities bear interest at rates fixed in advance for periods ranging from one day to six months by reference
to libor
the interest rate profile at 30 september 2001 for comparison purposes was as follows
euro swiss
sterling currencies francs total
£’000 £’000 £’000 £’000
bank loans and overdrafts 356 3449 1170 4975
floating rate 356 3449 1170 4975
the floating rate financial liabilities bear interest at rates fixed in advance for periods ranging from one day to six months by reference
to libor
p age 48 notes to the accounts
30 september 2002
17 derivatives and other financial instruments continued
currency exposures
the group does not actively hedge currency exposures arising from its net investments overseas however if and when funding is
required by an overseas subsidiary the group borrows in the currency of the relevant country gains and losses arising from these
structural currency exposures are recognised in the statement of total recognised gains and losses
the group has only monetary assets and monetary liabilities that are denominated in the operating currency of the operating unit
involved except for certain nonsterling borrowings treated as hedges of net investments in overseas operations
maturity of financial liabilities
the maturity of the group’s financial liabilities other than shortterm creditors such as trade creditors and accruals at 30 september 2002
was as follows
2002 2001
£’000 £’000
in one year or less 992 4975
borrowing facilities
the group had undrawn committed borrowing facilities at 30 september 2002 in respect of which all conditions precedent had been met
as follows
2002 2001
£’000 £’000
expiring in more than two years but not more than 5 years 14186 10446
the group has a £15000000 2001  euro 25000000 bilateral multicurrency facility with barclays bank which so long as contractual
conditions are satisfied has a final repayment date of 29 april 2005 the interest rate on this facility is 125pa above libor 
at 30 september 2002 £813927 2001 – £1762678 was being utilised for shortterm loans none of the facility was being utilised for
bank overdraft and performance guarantees 2001 – £3254213
fair values of financial instruments
there is no material difference between the book value and fair value of the group’s financial assets and liabilities at each period end
the group does not trade in financial instruments
p age 49 notes to the accounts
30 september 2002
18 calledup share capital
2002 2001
£’000 £’000
authorised
216666666 ordinary shares of 1p each 2001 – 216666666 2167 2167
allotted calledup and fully paid
162500000 ordinary shares of 1p each 2001 – 162500000 1625 1625
certain employees of the group hold options to subscribe for shares in the company at the market price at the date of grant
the number of shares subject to options the periods in which they were granted and the periods in which they may be exercised
are given below
exercise exercise 2002 2001
year of grant price period numbers numbers
1999 1285 p 20022009 1340000 1340000
1999 1036 p na 1000000 1000000
2000 2275 p 20032010 100000 100000
2000 735 p 20032010 280000 280000
2000 1930 p na 501190 501190
2001 485 p  20042011 1360000 1360000
2001 504 p na 1200000 1200000
2002 51p 20052012 500000 –
2002 49p 20052012 200000 –
19 reserves 
share
premium profit and 
account loss account total
group £’000 £’000 £’000
at 1 october 2001 94578 61404 33174
profit for the year – 3969 3969
cancellation of share premium account 94578 94578 –
exchange differences –81 81
at 30 september 2002 – 37062 37062
share premium profit and loss
account account total
company £’000 £’000 £’000
at 1 october 2001 94578 6567  101145
loss for the year – 70000 70000
cancellation of share premium account 94578 94578 –
at 30 september 2002 – 31145 31145
on 26 april 2002 the cancellation of the £94578000 share premium account was registered at companies house the effect of this
was to credit the pl distributable reserves with the full amount of the cancellation
p age 50 notes to the accounts
30 september 2002
19 reserves continued
pension reserves  group
total
£’000
profit and loss reserve excluding pension asset liability 37062
amount relating to defined benefit pension schemes asset
net of related deferred tax 633
profit and loss reserve 36429
20 reconciliation of movements in group shareholders’ funds
2002 2001
£’000 £’000
profit loss for the financial year 3969 22375
currency translation differences 81 221
net addition reduction to shareholders’ funds 3888 22596
opening group shareholders’ funds 34799 57395
closing group shareholders’ funds 38687 34799
21 reconciliation of operating profit loss to net cash inflow from operating activities
2002 2001
£’000 £’000
operating profit loss 8008 16186
depreciation charges 14302 15104
goodwill amortisation and impairment – 12253
decrease in stocks 919 982
increase decrease in debtors 4343 1629
increase in creditors 2555 929
21441 14711
22 analysis of cash flows
2002 2001
£’000 £’000
returns on investments and servicing of finance
interest paid 218 821
interest received 235 225
net cash outflow from returns on investments and servicing of finance 17 596
taxation
net tax paid 977 3233
capital expenditure
purchase of tangible fixed assets 11703 11459
sale of tangible fixed assets 192 –
11511 11459
p age 51 notes to the accounts
30 september 2002
22 analysis of cash flows continued
2002 2001
£’000 £’000
disposals
net debt balances disposed – 2192
disposal consideration 324 256
disposal costs paid 870 110
546 2338
financing
repayment of loans 954 1368
23 analysis of net funds
cash at
bank overdraft loans total
£’000 £’000 £’000 £’000
balance at 1 october 2001 12993 3237 1738 8018
cash flows during year 4411 3059 954 8424
foreign exchange 27 – 30 3
balance at 30 september 2002 17431 178 814 16439
24 reconciliation of net cash flow to movement in net funds
2002 2001
£’000 £’000
net increase in cash during the year 7470 393
cash outflow from decrease in debt 954 1368
foreign currency and other changes 3 119
movement in net funds in year 8421 1880
net funds at beginning of year 8018 6138
net funds at end of year 16439 8018
p age 52 notes to the accounts
30 september 2002
25 guarantees and other financial commitments
a capital commitments
at the end of the year capital commitments were
2002 2001
£’000 £’000
group
contracted but not provided for 316 990
b operating leases
annual commitments under noncancellable operating leases are as follows
land and other land and other
buildings equipment buildings equipment
2002 2002 2001 2001
£’000 £’000 £’000 £’000
group
expiry date
– within one year 166 1605 657 2030
– between two and five years 1423 4220 1182 4315
– after five years 2182 – 1902 –
3771 5825 3741 6345
c guarantees
the group gives performancebased guarantees on certain large contracts with customers in the normal course of business
as at 30 september 2002 guarantees outstanding amounted to £1130000 2001 – £1844000
26 pensions 
the group contributes to a defined contribution pension scheme for employees in the uk known as the synstar uk pension scheme
the “synstar scheme” benefits other than the lump sum payable on death in service are not defined but depend on the
contributions paid by and in respect of employees to the pension scheme and their investments return
the group makes contributions in respect of all members at the rate of 3 of the member’s basic salary in addition where a member
elects to make contributions the group match the member’s contributions on a pound for pound basis up to a maximum of a further
5 of basic salary ie the groups contributions range from 3 to 8 of basic salary in respect of certain members of staff the
group makes enhanced contributions over and above those outlined for other members the outstanding liability relating to the
scheme at 30 september 2002 was £204645 2001 – £190544
the group operates a defined contribution pension scheme in belgium for certain employees in that country the employer is obliged
to contribute at a rate of 2 of pensionable salary
the group operates a defined contribution scheme for certain employees in the netherlands contributions of 5 of pensionable
salary are paid by both employees and the group with enhanced contributions for certain members
the charge to the profit and loss account of £2294000 comprises a charge of £2044000 on defined contribution schemes and
£250000 on defined benefit schemes
p age 53 notes to the accounts
30 september 2002
26 pensions continued
the group operates a funded defined benefit pension scheme for certain employees in the republic of ireland the latest actuarial
valuation of the scheme as at 1 october 1999 showed that on the basis and assumptions used in the valuation the assets of the
scheme were sufficient to cover the benefits which had accrued the longterm funding rate was estimated to be 104 of total
pensionable salary the employees contribute 5 of their pensionable salary with the group meeting the balance of the costs of
providing the schemes benefits at 1 october 1999 the scheme was 111 funded
the major assumptions used for the actuarial valuation were

rate of increase in salaries 60
discount rate 60
inflation assumption 40
additional disclosures regarding this defined benefit pension scheme are required under the transitional provisions of frs 17
“retirement benefits” and these are set out below the disclosures relate to the second year of the transitional provisions they
provide information which will be necessary for full implementation of frs 17
the actuarial valuation described above has been updated at 30 september 2002 by a qualified actuary using revised assumptions
that are consistent with the requirements of frs 17 investments have been valued for this purpose at fair value
the major assumptions used for the actuarial valuation were
2002 2001
 
rate of increase in salaries 30 40
rate of increase in pensions in payment 30 30
discount rate 55 60
inflation assumption 23 23
the fair value of the assets in the scheme the present value of the liabilities in the scheme and the expected rate of return at the
balance sheet date were
2002 2002 2001 2001
 £’000 £’000
equities 80 654 85 823
bonds 50 257 55 279
other 65 116 70 156
total fair value of assets 1027 1258
present value of scheme liabilities 647 560
surplus in the scheme 380 698
related deferred tax liability 114 209
net pension asset 266 489
the contribution rate for 2001 and 2002 was 104 of pensionable earnings and the agreed contribution rate for the next year is
104 of pensionable earnings
p age 54 notes to the accounts
30 september 2002
26 pensions continued
analysis of the amount that would have been charged to operating profit under frs 17
2002
£’000
current service cost 52
past service cost –
gain loss on settlements and curtailments –
52
analysis of the amount that would have been credited to net finance income under frs 17
2002
£’000
expected return on pension scheme assets 100
interest on pension scheme liabilities 32
68
analysis of the actuarial gain that would have been recognised in the statement of total recognised gains and losses
2002
£’000
actual return less expected return on pension scheme assets 441
experience gains and losses arising on the scheme liabilities 4
changes in assumptions underlying the present value of the scheme liabilities 103
334
history of experience gains and losses
difference between the expected and actual return on scheme assets
2002
amount £’000 441
percentage of scheme assets 429
experience gains and losses on scheme liabilities
amount £’000 4
percentage of the present value of scheme liabilities 06
total actuarial gain recognised in the statement of total recognised gains and losses
amount £’000 334
percentage of the present value of scheme liabilities 517
p age 55 notes to the accounts
30 september 2002
26 pensions continued
the group operates a defined benefit scheme for certain employees in germany the outstanding liability relating to the scheme at 
30 september 2002 was £1487000 2001 – £1318000 which is classified within other creditors in the group balance sheet the
liability was valued on an actuarial basis using the attained age method assuming an interest rate of 60 with no inflationary
increase in salaries and pension payments at 30 september 2002 the scheme is fully funded
additional disclosures regarding this defined benefit pension scheme are required under the transitional provisions of frs 17
“retirement benefits” and these are set out below the disclosures relate to the second year of the transitional provisions they provide
information which will be necessary for full implementation of frs 17
the actuarial valuation described above has been updated at 30 september 2002 by a qualified actuary using revised assumptions
that are consistent with the requirements of frs 17 investments have been valued for this purpose at fair value using the projected
unit credit valuation method
the major assumptions used for the actuarial valuation were
2002 2001
 
rate of increase in salaries 30 30
rate of increase in pensions in payment 23 23
discount rate 63 63
inflation assumption 23 23
the fair value of the assets in the scheme the present value of the liabilities in the scheme and the expected rate of return at the
balance sheet date were
2002 2002 2001 2001
 £’000 £’000
insured fund 73 104 62 80
total fair value of assets 104 80
present value of scheme liabilities 2637 2281
shortfall in the scheme 2533 2201
related deferred tax asset 314 265
net pension liability 2219 1936
net reserve provided 1634 1496
net liability under frs 17 585 440
the scheme is a closed scheme and the schemes membership has an age profile that is rising and therefore under the projected unit
method the current service cost is expected to increase as the members of the scheme approach retirement
the plan is operationally funded and therefore the only assets that are disclosed above relate to paidup policies from the issued fund
to meet the pension liability the company builds up a reserve in order to fund the present value of pension obligations calculated on
the assumptions detailed above as at 30 september 2002 the net reserve was £1634000 2001 £149600
p age 56 p age 57
notes to the accounts
30 september 2002
26 pensions continued
analysis of the amount that would have been charged to operating profit under frs 17
2002
£’000
current service cost 49
past service cost –
gain loss on settlements and curtailments –
49
analysis of the amount that would have been credited to net finance income under frs 17
2002
£’000
expected return on pension scheme assets 5
interest on pension scheme liabilities 162
157
analysis of the actuarial gain that would have been recognised in the statement of total recognised gains and losses
2002
£’000
actual return less expected return on pension scheme assets –
experience gains and losses arising on the scheme liabilities 127
changes in assumptions underlying the present value of the scheme liabilities –
127
history of experience gains and losses
difference between the expected and actual return on scheme assets
2002
amount £’000 –
percentage of scheme assets 00
experience gains and losses on scheme liabilities
amount £’000 127
percentage of the present value of scheme liabilities 48
total actuarial gain recognised in the statement of total recognised gains and losses
amount £’000 127
percentage of the present value of scheme liabilities 48
27 contingent liabilities
the group has given indemnities in respect of overseas overdrafts property lease payments and import duty guarantees but excluding
performance guarantees issued on its behalf the amount outstanding at 30 september 2002 was £281000 2001 – £281000 the
indemnities which arose in the ordinary course of business are not expected to result in any material loss
the retirement indemnity liability in the group’s french subsidiaries at 30 september 2002 was £303000 2001 – £336000 this relates
to statutory amounts based on length of service payable to employees of french companies at the point of their retirement since these
payments are conditional upon the employees being employed by the group at retirement age the amount is treated as a contingent
liability in accordance with generally accepted accounting practice fiveyear summary
30 september 2002
fiveyear summary
results
restated
1998 1999 2000 2001 2002
£’000s unless otherwise stated
turnover 164425 214289 235911 238198 221870
operating profit before goodwill amortisation and
exceptional items 9423 12886 9861 4605 8008
operating profit loss 9423 12850 5693 16186 8008
profit loss for the financial year 1733 5135 940 22375 3969
assets employed
fixed assets 38821 51717 58020 36910 33646
net current assets 475 7186 195 2111 5041
creditors amounts falling due after more than one year 79874 863 820 – –
net liabilities assets 40578 58040 57395 34799 38687
key statistics
closing share price na 144p 76p 4350p 48p
adjusted basic earnings per share 17p 46p 31p 11p 34p
diluted earnings per share 17p 37p 06p 138p 24p
capital expenditure 15536 15765 20461 11459 11703
cash inflow from operating activities 21238 25002 23362 14711 21441
average number of employees 2112 2522 3045 3080 2995
net debt funds 77095 11378 6138 8018 16439
operating profit before goodwill amortisation and exceptional
items as a percentage of turnover 57 60 42 19 36
p age 58 directors and advisors
chairman nonexecutive j p leighfield cbe
chief executive s w vaughan
group finance director s d gleadle
uk  ireland managing director m e ettling
nonexecutive directors j p feuer
r j piper
j a osbaldiston
registered office synstar house
1 bracknell beeches old bracknell lane west
bracknell berkshire rg12 7qx
registered number 3416147
company secretary s d gleadle
auditors deloitte  touche
four brindleyplace birmingham b1 2hz
principal bankers barclays bank plc
54 lombard street london ec3v 9ex
registrars irg plc
bourne house 34 beckenham road beckenham kent br3 4tu
financial advisors  stockbroker old mutual securities
old mutual place 2 lambeth hill london ec4v 4gg
solicitors clifford chance
200 aldersgate street london ec1a 4jj
nabarro nathanson
lacon house theobald’s road london wc1x 8rw
shareholder information
annual general meeting 6 march 2003
announcement of 20022003 interim results may 2003
announcement of 20022003 preliminary results november 2003
information about the group’s activities is available on the corporate web site at wwwsynstarcom
p age 59 addresses
united kingdom
synstar plc
synstar house
1 bracknell beeches
old bracknell lane west 
bracknell berkshire 
rg12 7qx
tel 44 1344 662700
fax 44 1344 662743
synstar computer services uk ltd
cumberland house
old bracknell lane west
bracknell berkshire 
rg12 7qu
tel 44 1344 662700
fax 44 1344 459940
synstar business continuity ltd
29 valepits road 
garretts green 
birmingham 
b33 0td
tel 44 121 784 7445
fax 44 121 783 4015
synstar networking
concorde road
patchway bristol
bs34 5tb
tel 44 117 900 7500
fax 44 117 900 7501
synstar computer services uk ltd
3 dunlop square
deans southwest industrial estate
livingston
eh54 8sb
scotland
tel 44 1506 419111
fax 44 1506 460135
for all uk enquiries email
enquiriessynstarcom
belgiquebelgië
synstar computer services nvsa
hoge wei 16
b1930 zaventem 
belgiquebelgië
tel 32 2 715 6700
fax 32 2 715 6765
email contactinfosynstarbe
synstar business continuity
tollaan 6365
1932 ststevenswoluwe
belgiquebelgië
tel 32 2 713 6811
fax 32 2 713 6822
email infosynstarbcbe
france
synstar computer services sa
86108 avenue louis roche bp82
92233 gennevilliers cedex
france
tel 33 1 4685 9797
fax 33 1 4685 9799
email infossynstarfr 
synstar business continuity sarl
tel 33 1 6929 8820
fax 33 1 6907 9774
deutschland
synstar computer services
holding gmbh
pallaswiesenstr 174182
64293 darmstadt
deutschland
tel 49 6151 9890
fax 49 6151 891772
email infosynstarde
nederland
synstar computer services bv
burg verderlaan 9
3544 ad utrecht
nederland
tel 31 30 6692211
fax 31 30 6692395
email infosynstarnl
luxembourg
synstar computer services
211 rue des romains
l8041 bertrange
luxembourg 
tel 352 31 98 60
fax 352 31 98 72
synstar business continuity
tel 352 49 50 40 20
fax 352 49 50 40 53
email contactinfosynstarlu
españa
synstar computer services sa
san severo 30  barajas park
28042 madrid
españa
tel 34 91 329 0237
fax 34 91 329 3098
email ventassynstares
ireland
synstar computer services
unit 1
swords business campus
balheary road
swords 
county dublin
ireland
tel 353 1 449 2000
fax 353 1 449 2001
email enquiriessynstarcom
p age 60 wwwsynstarcom synstar plc
synstar house
1 bracknell beeches
old bracknell lane west 
bracknell
berkshire 
rg12 7qx
tel 44 1344 662700
fax 44 1344 662743
wwwsynstarcom


Summary:
 steve vaughan
chief executive p age 5
introduction
t has been a difficult time to be an it
company recently against a backdrop
of disappointing news throughout the
sector i am extremely pleased to be able
to report that synstar remains on track
with its plans and has delivered better
results than the market expected 
our success comes from the strong
foundation built during the past 18 months
we made difficult decisions and ambitious
plans during 2001 and have followed
through on these decisions and plans
during 2002 this puts the company in an
enviable position when compared to the
majority of its peers – we are profitable
cash generative debt free and growing
we have benefited more than i had hoped
from the restructuring activities of last year
the first half financial performance gave
us the foundation for the growth that was
the aim of our restructuring programme
we exploited this in the second half our
business delivered second half operating
profits of £49m generated £74m of cash
and ends the period with net cash of
£164m our revenues from longterm
business have also grown and our order
book has grown by 46 to £319m the
second half also brought some notable
contract wins such as csc westland
helicopters and avecia taken together i
believe all this demonstrates a company
in good shape and one that can step up
to the challenge of growth
it is to this challenge that we must now
devote our energy phase 1 of our plan
gave us the basis for a new and stronger
sales force with relationship managers
focused on existing customers and
salesmen on new names our investment
in the training and support of these
people has produced a sales force that
can take on the best and win they are
selling our new standard service lines
developed and packaged during phase 2
to match our customer requirements 
we have many new services to bring to
market over the coming months to add
fuel to grow our sales during phase 3 as
the final key to successful sales growth
we must convert the perception of
synstar from niche maintenance and
disaster recovery provider to trusted
partner for delivery of integrated
managed services there is plenty of
evidence that this change in our
customers’ perception is well underway
achieving this is the eventual definition of
the success of our strategy
progress with our strategy
i have long held that a company operates
best when it is following a clear plan and
has the right focus on its objectives at
the start of 2001 our strategic review
created that plan it was very clear about
the objectives – focus on profit and cash
crosssell services into our excellent
customer base build a stable foundation
upon which the company could grow at 
i
chief executive’s review
increasingly
seen as a
trusted
managed services
provider
uk and ireland
depending on which research house you subscribe to either the uki or
germany has the largest it market in western europe either way uki
is an enormous market full of opportunity and combining leadingedge
technologies with stillimportant legacy architectures even though
budgets have been frozen or cut efficiency and productivity must still
improve and it is this ‘more for less’ attitude which has driven the it
market in the direction of outsourcing and total managed service this
year we have won some mammoth deals signing contracts of a type and
size which a few years ago would not even have existed virus alerts
uninvited visitors to the corporate network and disgruntled employees are
all potential hazards which have the power to take a business to the wall
we have recently launched services to assist customers in understanding
these hazards and minimising their risk and we will continue to develop
them as we move through the coming months
the irish business continues to grow and generate a strong contribution
in 2002 margin growth was on budget outperforming most competitors in
a tough trading year the adoption of new service lines has seen an
increase in professional services revenue particularly in business 
continuity and network security in the public and banking sectors we
have also seen two significant vida projects undertaken the first of many
in fact synstar recently managed its first major irish contract invocation
for a banking client with synstar supporting all processes infrastructure
logistics and staff delivered to plan and the customer suffered no
business interruption
to meet the needs of the substantial irish call centre market synstar has
introduced a packaged business continuity product 

contact continuity
tm

the product which has been enthusiastically received by the industry
balances the focus on it and work areas with a unique approach to the
vital telephony technology which is the heart of the contact business
two major call centres are already signed up and have tested
successfully the business availability ba concept is vital to many uki
industries and synstar is proving that ba thinking is not only a great idea
but a reality too
mike ettling managing director for the uk and ireland track record
our clients trust us to keep on performing
because we know that tomorrow’s 
opportunities grow out of 
today’s hard work p age 7
above the market rate and aim to become
a world class it services provider 
our plan is split into three phases and at
the half year i reported that phase 2 was
nearing a successful conclusion i can
now report that we did indeed achieve
the objectives of phase 2 – ‘stabilise
improve and invest’ stability is clear
from the financial results and the absence
of volatility improvement shows in the
resolution of several operational and
managerial issues such as the disposal of
our swiss business and improvements in
logistics and networking business
investment is clearly yielding benefits in
the development of our service lines as i
will outline below above all we
managed a period devoid of major
upheavals which gave our new
organisation and strategy the time to take
root this is the basis of longterm
change and success
of course it is unrealistic to expect any
plan to run faultlessly our french
business remains problematic despite
the target that we could complete this
year with a breakeven run rate the
percentages of revenue in france which
depend upon shortterm projects which
have to be continuously bid and won
and mobile engineering which is much
lower margin is higher than elsewhere 
it takes longer to change the shape of a
business like this we have more to do but
remain sure that this part of our business
the only lossmaking element of the
group will be returned to profit
during the second half we saw a strong
start to phase 3 in particular we fully
outlined the actions required during the
period to the end of 2003 to drive the
growth that we seek we made a good
start on these actions and have begun to
see some results we split these actions
into a number of ‘streams’ concentrating
our efforts on developing our service
lines improving our internal processes
investing in the skills and careers of our
staff and stepping up the synstar sales
performance i will review the plans and
progress of each of these in turn
rollout of our service lines
our service lines are the building blocks
of our growth strategy we have the
customers selling more services to them
is the plan for growth today our service
lines are well matched revolving as they
do around the support and development
of high availability computer
infrastructure however we are not yet
able to deliver all of our services in each
of the territories in which we operate
the rollout of our existing services is one
key element of our phase 3 plan in
addition the development of services to
meet new technical demands and higher
levels of business availability is receiving
attention
chief executive’s review
continued
foundations laid
for strong
and lasting
growth
germany
the market in germany was heavily influenced by the general economic
situation market growth in 2002 was only 05 against a forecast level of
24 accordingly this had an important impact on the it sector with many it
infrastructure projects either frozen or postponed despite this difficult situation
synstar was able to keep the installed base at the same level as last year
whilst also winning a very large and important computer services customer in
the automotive sector since this new project began the business has
expanded continuously this particular customer win is also a good example of
our crossselling activities business continuity is becoming more important to
our german operations and since september 11 interest in our various
business continuity services has grown steadily resulting in our first bc
contract with a global financial services business taking approximately 100
seats in our new frankfurt business recovery centre 
peter rembert business service manager for germany in the last two years we have stamped our commitment
on everything we do building financial technical and
commercial strength for the long haul
achievement p age 9
business continuity
the performance of our business continuity
service offering during the year has been
excellent our focus on return on capital
employed roce – sweating the assets
rather than the urge to build ever more
capacity – has produced very strong results
roce is now above 70 and operating
profits from this business have increased
by 22 achieving this level of return we
can now consider opportunities to expand
our infrastructure recently we invested in a
new business recovery centre in frankfurt
a market that has not been accessible to
us in the past we have already signed up
a global financial services business for
this new facility we will continue to look for
relatively smallscale opportunities to
expand our capabilities in both geography
and technology coverage while always
keeping our main attention on the return
on the investment
networking
our networking business is now focused
on longterm contracts and high value
consulting rather than being dominated
by low margin product sales the
network operating centre we established
in newbury in early 2002 is now a
flagship for our service offering in
networking solutions and projects
remain a key part of what we do and our
efforts to build better relations with key
partners in this area have been rewarded
in addition to our existing capabilities in
the uk and france we have now
developed a networking revenue stream
in holland and spain belgium and germany
will be added in the first half of the 20023
financial year security is an essential part
of any network business we now have a
thriving business in network security
consultancy to 22 of our customers as
well as delivering the projects and
services derived from our advice
data management
data management is currently the most
geographically restricted business we
are strong in germany and france and it
is clear that many of our customers in
other areas would buy storage solutions
from us this offering will become
increasingly important for high availability
service solutions it is a key requirement
during phase 3 to expand our ability to
sell and deliver data management
solutions to all our countries
maintenance
maintenance still forms the backbone 
of our business there is a high level of
recurring business and it represents an
excellent door opener to high profile
clients we will continue to invest to
develop maintenance solutions for new
products particularly for larger machines
such as the sun e10000 servers where
customers require high availability the
number of customers engaging us to
maintain their entire data centres has
increased significantly 
chief executive’s review
continued
breaking
the mould
of
synstar
sales
france
france is synstar’s third largest it services market in terms of value we
have traditionally sold all four service lines in this market but have found it
more difficult to harness crossselling opportunities within our installed
customer base however the culture is changing slowly as the realisation of
total cost of ownership and the value of outsourcing gain acceptance more
and more of our customers are asking us for managed service offerings
covering our full service range a large portion of our business is in the public
sector and we have recently seen the thawing of it budgets frozen over the
past 18 months demand for business continuity services has been slow to
grow but is now gaining pace rapidly recently prompting us to refurbish and
relaunch our paris business recovery centre
gerard lugat sales manager for france multiservice
our centres of excellence individually deliver everything they
promise and together they support our uniquely powerful
integrated business availability offering p age 11
managed services 
managed services is our fastest growing
service area seventeen of our largest 50
customers now buy managed services
from us up from 13 last year our
successes during the year have shown
that there is a considerable market for the
provision of desktop services help desks
and data centre management many of
our relationship managers find our
offerings in this area are a good next step
from maintenance when developing a
customer relationship we have invested
during the year to bring our vida desktop
managed service offering to maturity we
now have over 100000 desktop users
under contract across europe and a
pipeline many times that figure the
efficiency improvements produced when
our managed services are blended with
an onsite maintenance operation makes
our proposition costeffective we see a
considerable growth in customers looking
to us for a service that is often currently
delivered with fragmented inhouse
resources
progress with phase 3
our services 
service line development during phase 2
concentrated on exploiting offerings that
we have been supplying to some
customers for a while we took those that
represented the best potential and made
them generally available during phase 3
we have begun to develop entirely new
services particularly ones that join up our
main areas of service for example we
can sell networking and business
continuity in a single packaged offering
new services of this type will be launched
in the coming months and help to develop
customer relationships based on several
different services at once at the same
time these new services can yield a higher
margin than much of our existing
business
internal processes
while the effort to expand our service
offering capability is a key element of our
growth strategy cost control must remain
an imperative there remains some scope
for further efficiency and cost savings
accordingly we will be running a series
of projects to streamline processes and
systems to achieve these benefits during
the year this is an important part of
delivering our strategy – keeping the
machine working ever more effectively as
we grow and develop the business
staff development
as we develop more complex services
the picture would not be complete
without developing our staff expanding
technical skill is one thing and this has
been part of our investment for many
years however if we are serious about
world class performance then a more
systematic approach to career
development is essential – developing
staff with world class skills and careers
chief executive’s review
continued
rolling out new
services with
stronger
margins
belgium
although small belgium’s it services market potential is healthy at
nearly 12 its forecast compound annual growth rate cagr to 2005 is
among the highest in western europe the presence of the european
commission in brussels has created a true multinational culture that attracts
companies from around the globe nonetheless although in synstar’s
markets there are a large number of niche service providers very few are
able to provide anything like our total business availability solutions the value
of which has been amply demonstrated by recent wins at fortis ag and
novartis according to recent research the key business drivers for belgian
customers are software migration and security these are both areas of
particular synstar expertise which will become points of focus as we drive
the business forward but we have already completed some major platform
migrations for belgacom mobile and tessenderlo chemie
dirk cammermans business service manager for belgium flexibility
customers can construct whatever strategic
it support they need from synstar’s
comprehensive service offering  p age 13
chief executive’s review
continued
to address this important issue we have
begun a programme to create a new
career planning and development
framework that draws from best practice
in use all around the world this
framework will be fully in place by march
2003 giving our staff much better
ownership of their own personal
development and give the company a
sound basis upon which to develop the
skills and experience essential for our
expanding business and services
breaking the mould of synstar sales
performance
by any standards the second half of
20012 was an eventful period for synstar
sales we have increased our forward
order book from £230m at 31 march 2002
to £319m in september we signed our
biggest ever contract a fiveyear £120m
maintenance and managed service
agreement with csc we also signed our
first ‘total customer’ – westland
helicopters now buys every service line
that we sell under a £21m sixyear
agreement we now provide virtually all
its infrastructure support
for the first time synstar has a sales
force with the range of support it needs
to take on leading competitors and win
at westland we were on the shortlist
against ibm and eds the customer
stated that we were selected because of
our “proven track record innovative and
flexible approach to resolving business
issues and expertise for delivering high
value business availability services” at
avecia which also signed a multiyear
multiservice line contract with us in
september the customer declared
“synstar demonstrated considerable
flexibility in the provision of a
comprehensive range of it services
which is key to our requirements we
were also impressed by its wide breadth
of coverage and ability to provide the
services we require directly rather than
engaging third parties” this is a major
and very welcome change in perception
i have believed since i arrived that the
major obstacle to achieving this change
in sales performance was the company’s
own belief in itself after 30 years as a
maintenance company the mindset
necessarily takes a while to change but i
can now see widespread evidence of that
change it is matched by the start of a
change in our customers’ view of us
through a range of introductory service
offerings we are expanding our
customers’ view of our competences
demonstrating the full range of our
capabilities building our presence
during the second half of 2002 this
began to bear fruit in actual sales our
current sales pipeline gives me every
confidence that this will continue
how do we beat the competition we can
do this in many ways each important for
different reasons to each customer 
innovative
and
flexible
approach
netherlands
dutch industry is probably one of the most diversified in europe providing the
it community with both niche and broadbased opportunities like its fellow
members of the european union the netherlands has seen the number of it
related projects fall a trend that has even extended to hardware
maintenance this decline has prompted changes in the market’s structure
with consolidation of service providers leaving fewer smallscale niche
operators synstar itself has been active in this area developing a new
partnership with atos origin and taking over service activities from comparex
as a subcontractor with the larger service providers taking the cream of
outsourcing contracts something of a void has opened up in the middle
ground synstar is best placed to fill this with a mix of skills and resources
that caters for single service contracts and complete managed service
arrangements alike both well demonstrated by our excellent wins at the
dutch police and psa peugeotcitroen 
frank hoekstra business service manager for the netherlands stability
debtfree cash generating and with profits growing
strongly synstar is as solid as a rock in a turbulent world we have a culture of service – the longterm
delivery of daytoday quality we are
close to the customer – understanding
their needs onsite when we are needed
flexible and quick to respond to new
requirements or a crisis this is in contrast to
many of our competitors who are trying to
do things increasingly remotely and as we
deliver a higher service level we are well
placed to bid for management of critical
systems these factors combined with a
growing range of wellmatched services
give us a strong competitive position
a foundation for growth
there are good reasons for the progress
made since the start of last year we have
been building the foundation for a strategy
that is now wellplaced to turn to growth
our business has the potential to benefit
from operational gearing – we seek to grow
the top line at around 7 keep the gross
margin constant or better by selling higher
value services and keep the overhead
costs under control taken together this
yields the benefits from operational
gearing to produce operating margin
improvement and longterm sustainable
shareholder value benefits to date have
come from better control and focus
benefits in the future must depend
ultimately on driving the top line
synstar’s sales performance this year
shows that a strategy based upon growth
can be achieved even in the current
climate we have the customer
relationships and we are now developing
the longterm higher value services to
match our existing business retains all the
stability longterm contracts account for
over 70 of our revenue now we can
capitalise upon that position with a strong
growth agenda it is a plan that draws
sensibly on both strong base business and
good prospects for a growing top line that
is the best defence in the current market
summary
we have continued to make excellent
progress with our recovery plan and new
strategy our financial results show this
more clearly than anything else but in
addition to those results there are many
indicators within the behaviour of the
business which show that we have
achieved a major change of direction – the
development of our services the success of
crossselling the quality of our management
team and our ability to win large contracts
in the face of determined competition
this is success by any definition
i have said in my previous reviews that
our longterm aim should be world class
performance at the half year i said that i
could for the first time see clearly the
way to achieve it i can now say that we
are demonstrating the evidence that
synstar is on the way to being a world
class it service provider
steve vaughan
chief executive
chief executive’s review
continued
p age 15
world class
it service
provider
spain
although the spanish it services market is only about onesixth as big as the
uk’s it’s forecast to grow twice as quickly most major it activity is split
between madrid and catalonia the two provinces with the highest
concentration of large companies and public sector agencies spain has
always been a user of traditional services and has tended to shy away from
the larger outsourcing deals distributed computing desktopunix is
growing and this will in turn generate demand for ancillary services such as
hardware support applications support and networking all areas in which
synstar excels as can be seen in the recent contract renewals of two of our
most important customers in spain renault and the state social security
system although the requirement for distributed computing is strong spain
is also waking up to the need for business continuity services especially bc
consultancy naturally synstar is seen as a leading light in this area with
some great success stories to tell and we will continue to develop this
market as we move into the future 
antonio pastors business service manager for spain performance
synstar’s lifesigns point to a healthy dynamic future