annualreportandaccounts2008
wwwsagecom
go online to access the sage group plc
2008 annual report and forpdfdownloads
www investorssagecom
wwwsagecom
the sage group plc
north park
newcastle upon tyne
ne13 9aa
annual report
and accounts 2008
wwwinvestorssagecom 2007 24 2007 13 2007 7
44 board of directors and advisers
46 directors’ report
49 corporate governance statement
54 remuneration report
66 financial statements – group
69 notes to the accounts – group
106 independent auditors’ report – group
107 financial statements – company
108 notes to the accounts – company
111 independent auditors’ report– company
112 additional information
112 shareholder information
www investorssagecom
contents
financial statements
governance
business review
about sage
the sage group plc
annual report and accounts 2008
sage is one ofthe leading global suppliers of
business management software and services to
small and mediumsized enterprises “smes”
operating in 26 countriesworldwidewe help
ourcustomers manage theirbusinesses more
eﬃcientlythrough the provision of locally
tailored products and qualitycustomersupport
designed and produced by radley yeldar wwwrycom
board photography by andy wilson
printed in england by ctd
this report is printed on take 2 silk which is fsc certified and contains
75 recycled and deinked pulp from post consumer waste and 25 ecf
elemental chlorine free virgin pulp this report was printed by an fsc and
iso 14001 certified printer using vegetable oil and soya based inks
fsc – forest stewardship council this ensures that there is an audited
chain of custody from the tree in the wellmanaged forest through to the
finished document in the printing factory
iso 14001 – a pattern of control for an environmental management system
against which an organisation can be credited by a third party
the co2 emissions from the production and distribution of this report
have been neutralised through investment in the sichuan province hydro
power project in western china the project displaces electricity generated by
fossilfuel power plants and will generate emission reductions of an estimated
360000 tco2 equivalent between 2006 and 2012 verified and certified to the
voluntary carbon standard
for more information about this year’s
kpis go to page 28
adjusted eps growth ebita
†
margin organic revenue growth
excluding sage healthcare division
cash generation from operations renewal rates on maintenance
and support contracts
keyperformance indicators “kpis”
3 23
114
2007 112
81
2007 81
6

01 financial highlights 02 chairman’s welcome
04 group overview
06 group strategy and performance
10 our business and markets
10 what we do who we are how we work
12 marketplace overview
16 business structure
18 customer experience
20 distribution channels
22 acquisition strategy
24 corporate responsibility
28 key performance indicators
30 regional review
30 uk  ireland
32 mainland europe
34 north america
36 rest of world
38 financial review
42 risk annualreportandaccounts2008
wwwsagecom
go online to access the sage group plc
2008 annual report and forpdfdownloads
www investorssagecom
wwwsagecom
the sage group plc
north park
newcastle upon tyne
ne13 9aa
annual report
and accounts 2008
wwwinvestorssagecom 2007 24 2007 13 2007 7
44 board of directors and advisers
46 directors’ report
49 corporate governance statement
54 remuneration report
66 financial statements – group
69 notes to the accounts – group
106 independent auditors’ report – group
107 financial statements – company
108 notes to the accounts – company
111 independent auditors’ report– company
112 additional information
112 shareholder information
www investorssagecom
contents
financial statements
governance
business review
about sage
the sage group plc
annual report and accounts 2008
sage is one ofthe leading global suppliers of
business management software and services to
small and mediumsized enterprises “smes”
operating in 26 countriesworldwidewe help
ourcustomers manage theirbusinesses more
eﬃcientlythrough the provision of locally
tailored products and qualitycustomersupport
designed and produced by radley yeldar wwwrycom
board photography by andy wilson
printed in england by ctd
this report is printed on take 2 silk which is fsc certified and contains
75 recycled and deinked pulp from post consumer waste and 25 ecf
elemental chlorine free virgin pulp this report was printed by an fsc and
iso 14001 certified printer using vegetable oil and soya based inks
fsc – forest stewardship council this ensures that there is an audited
chain of custody from the tree in the wellmanaged forest through to the
finished document in the printing factory
iso 14001 – a pattern of control for an environmental management system
against which an organisation can be credited by a third party
the co2 emissions from the production and distribution of this report
have been neutralised through investment in the sichuan province hydro
power project in western china the project displaces electricity generated by
fossilfuel power plants and will generate emission reductions of an estimated
360000 tco2 equivalent between 2006 and 2012 verified and certified to the
voluntary carbon standard
for more information about this year’s
kpis go to page 28
adjusted eps growth ebita
†
margin organic revenue growth
excluding sage healthcare division
cash generation from operations renewal rates on maintenance
and support contracts
keyperformance indicators “kpis”
3 23
114
2007 112
81
2007 81
6

01 financial highlights 02 chairman’s welcome
04 group overview
06 group strategy and performance
10 our business and markets
10 what we do who we are how we work
12 marketplace overview
16 business structure
18 customer experience
20 distribution channels
22 acquisition strategy
24 corporate responsibility
28 key performance indicators
30 regional review
30 uk  ireland
32 mainland europe
34 north america
36 rest of world
38 financial review
42 risk 01
business review
governance
financial statements
about sage
01 –05
06–43
44–65
66–112
£1 2950m
revenue
financial highlights
7

2007 £12141m
total dividend
2007 700p
7 21
p
 foreign currency results for the year ended 30 september 2007 have been retranslated based on the average
exchange rates for the year ended 30 september 2008 of 197£1 andb131£1 to facilitate the comparison
of results
†
earnings before interest tax and amortisation of intangible fixed assets “ebita”
 pretax profit and earnings per share figures stated prior to amortisation of intangible fixed assets and after
neutralisation of foreign exchange movements
3
£2734m
adjusted pretax profit
3
2007 £2651m
ebita
†
2007 £2970m
£2998m
for a five year comparison of these financial highlights go to page 06
for a five year comparison of the total dividend go to page 02
1
 02
total dividend
3
721p
0000 1442 2884 4326 5768 7210
2008 721
2007
2006
2005
2004
700
359
288
233
pence
“our large and international customer base the
ﬂexibilityof our business model and our consistently
strong cash ﬂows position us favourablyto manage
the current market conditions”
“the ukand north america recorded
respectable growth and ourbusinesses
in mainland europe and rest of world
reported another yearofstrong growth”
to see tony’s biography please go to page 44 03
this has been a challenging year with volatile and difficult
market conditions after a resilient performance in the first
half of the year the group saw softening customer
demand in the second half most notably in software
and softwarerelated services
despite these market conditions the group reported a
solid performance for the year the uk and north america
recorded respectable growth and our businesses in
mainland europe and rest of world reported another
year of strong growth
subscription revenues including combined software
support contracts performed strongly in all our markets
driving growth in established markets such as the uk
france south africa and australia as well as in our newer
markets of poland spain china and malaysia software
and softwarerelated services reported modest growth
affected by both the macroeconomic conditions and the
trend for customers increasingly to purchase combined
softwaresupport contracts
financial strength
the group remains highly cash generative and our balance
sheet is strong in addition we have committed facilities of
£850m of which £750m is committed until 2011 in these
market conditions this positions the group very well
this financial year saw major movements in foreign
exchange rates and a major weakening of sterling which
continued after the year end more than 70 of the
group’s profits are earned outside the uk and recent
exchange rate trends will have a favourable effect on
our reported earnings going forward
dividend
the board is strongly committed to enhancing shareholder
value we believe that our consistently strong cash flows
robust balance sheet and recurring revenue streams
provide a sustainable basis for a progressive dividend
policy whilst ensuring that the board can continue
to maintain the appropriate levels of organic and
acquisitionled investment
as a result we are increasing the full year dividend by
3 to 721p per share 2007 700p per share with a
proposed final dividend of 478p per share 2007 573p
per share following the rebasing of our dividend policy
which was reflected in our final dividend in the second
half of the prior year
management changes
david clayton joined the board on 1 october 2007 as
group strategy and mergers and acquisitions director
on 1 november 2007 ian mason chief executive of
electrocomponents plc joined the board as a non
executive director mark rolfe formerly finance director of
gallaher group plc joined the board on 1 december 2007
and became chair of the audit committee on 1 april 2008
we were also very pleased to welcome sue swenson to
the group as ceo north america sue joined us in march
2008 and brings a formidable record of achievements to
our north american business
people
we now employ over 14500 people 2007 13900
and our employees are at the heart of our strategy
continuously to improve our customers’ experience
as markets become more challenging over the coming
year we rely on our employees to enhance our competitive
advantage in all our markets our loyal dedicated and
customerfocused employees have greatly contributed to
our results in this challenging year and we thank them for
their continuing efforts
outlook
we will continue to strive to create value for our
shareholders by focusing on tight cost control improved
operational efficiency and leveraging our strong geographic
market positions it is uncertain as to how long these
difficult market conditions will continue and therefore we
remain cautious in our outlook however our large and
international customer base the flexibility of our business
model and our consistently strong cash flows position us
favourably to manage the current market conditions
tony hobson
chairman
dearshareholder
awards
sage prides itself on providing high quality
software and customer support tailored to a
customer’s country and industry we constantly
strive to provide outstanding customer service
and this year we have won many awards in
recognition of this
uk  ireland
business software supplier of the year
at computing magazine’s awards for
excellence 2008
payroll software provider of the year
for medium to large companies at the irish
payroll association awards
payroll software provider of the year
at pay magazine’s annual pay awards
mainland europe
customer service golden laurel and
the golden bit award for best hr software
in poland
preferred vendor 2008 award from channel
partner magazine and erp system of the
year from the centre of enterprise research
in germany
golden customer relation centre award
in spain
north america
product of the year award for act by sage
2008 from communication solutions magazine
product of the year award for sage saleslogix
v72 at the searchcrmcom awards
smb software suites channel champion
at crn channel champion awards
gold and silver medals for best contact centre
agent and best contact centre respectively
at the world contact centre awards
rest of world
best customer service award in the business
process enabling south africa awards
for further details on our awards please visit
wwwsagecomourbusinessnewsroom 
uk  ireland 19 1
1
2
3
4
mainland europe 35 2
north america 39 3
rest of world 7 4
t otal 100
revenue by region

accounting 55 a
a
b
c
d
e
industryspecific 25 b
hr and payroll 11 c
customer relationship management “crm” 5
payment processing 4
d
e
t otal 100
revenue by sector
sage is a global company with 58 million customers over 14500
employees and more than 25 years’ experience working with small and
mediumsized businesses we have direct operations in 26 countries
and a presence in many more countries through our indirect network
of 30000 business partners and 40000 accountancy practices
despite our global reach we have built our success on understanding
and meeting the needs of customers in their local markets
we are the third largest provider of business management solutions
in the world with a 7 market share
1
 software and softwarerelated
services revenues account for 39 of our total revenues subscription
revenues account for 61 of our total revenues and include recurring
revenues arising from combined softwaresupport contracts
maintenance and support hosted products and other recurring
services revenues
to capitalise on our local expertise we operate through a decentralised
business structure whereby each country has substantial autonomy in
terms of local business strategy
our local management teams report into the ceo of their region –
uk  ireland mainland europe north america and rest of world
for more information about our regional businesses and our business structure
please go to page 17
globalpresence
04
direct presence
1
source gartner august 2007 worldwide erp
licence and maintenance revenue by vendor 0000000 49139999 98279999 147419998 196559998 245699997
revenue
10
£2457m
£m
2008 2457
2007 2241
0000000 91459998 182919995 274379993 365839990 457299988
revenue
1 5

£4573m
£m
2008 4573
2007 3959
0000000 103119995 206239990 309359985 412479980 515599976
revenue
3

£5009m
£
£m
2008 5009
2007 5156
0000000 18220000 36439999 54659999 72879999 91099998
revenue
16

£911m

£m
2008 911
2007 785
0000000 17700001 35400002 53100002 70800003
ebita
†
ebita
†
margin 36
£885m
£m
2008 885
2007 826
0000000 20040001 40080002 60120003 80160004
ebita
†
ebita
†
margin 22
£1002m
£
£m
2008 1002
2007 915
0000000 20439999 40879999 61319998 81759998 102199997
ebita
†
£877m
£m
2008 877
2007 1022
ebita
†
margin 18
000 468 936 1404 1872 2340
ebita
†
£234m
£
£m
2008 234
2007 207
ebita
†
margin 26
sage is committed to acting as a responsible
corporate citizen we have chosen to focus our
corporate responsibility efforts on four areas that
are meaningful to our organisation’s strategy and
where we believe we can make a difference
these are our people the environment
supporting industry and working with our local
communities and charities we aim to achieve
best practice in the local context of every country
in which we operate with standards established by
local legislation applying as a minimum we also
aim to share best practice across the group so
that we implement continuous improvement
for more information on our corporate
responsibility please go to page 24
brand leadership
we have built our business around our market
leading brands which are widely recognised and
trusted in their local markets combined with the
global sage brand our local brands give us a key
point of competitive differentiation
for more information on our brand leadership
please go to page 12
customer experience
we set ourselves apart through the superior
experience we deliver to customers we help
them run their businesses more efficiently through
the provision of high quality software services
and support this has enabled us to build a
large loyal and diverse customer base many of
our customers have support contracts through
which we provide not only advice on how to get
the most from their software but also guidance
on business critical topics
for more information on our customer experience
please go to page 18
business structure
our decentralised business means sage has an
unrivalled understanding of local customer needs
provides a choice of locally developed and locally
supported solutions and the agility to respond
quickly to changes in local market conditions
for more information on our business structure
please go to page 16
distribution channels
sage has strong routes to market including retail
stores web retailers direct from sage or indirect
through our worldwide network of over 40000
accountants and 30000 business partners who
provide additional support implementation
customisation and specialist sector knowledge
for more information on our distribution channels
please go to page 20
corporate responsibility ourstrengths
mainland europe north america rest of world uk ireland
ourregional businesses
for more information on the uk 
ireland region please go to page 30
for more information on the north
america region please go to page 34
for more information on the rest of
world region please go to page 36
including united kingdom and
republic of ireland
including austria belgium france
including subsidiaries in brazil and
morocco germany poland portugal
spain and switzerland
including canada and united states including australia bahrain botswana
china dubai india malaysia namibia
saudi arabia south africa singapore
and thailand
for more information on the mainland
europe region please go to page 32
sectors
• accounting
• industryspecific
• hr and payroll
• crm
• payment processing
sectors
• accounting
• industryspecific
• hr and payroll
• crm
sectors
• accounting
• industryspecific
• hr and payroll
• crm
• payment processing
sectors
• accounting
• industryspecific
• hr and payroll
• crm
 foreign currency results for the year ended 30 september 2007 have been retranslated based on the average exchange rates for the year ended 30 september 2008 of 197£1 andb131£1 to facilitate
the comparison of results
†
earnings before interest tax and amortisation of intangible fixed assets “ebita”
05 06
“innovation is at the heart ofourstrategy
we continue to adapt and evolve ourproducts
and services oﬀering to meet the changing
needs ofour 58 million customers”
“the continued growth in subscription revenues
underpinsouroverallgrowthandcompensatedforthe
morechallengingmarketconditionsweexperiencedin
software and softwarerelated services”
to see paul’s biography please go to page 44
0 259 518 777 1036 1295
7

£12950m
2008 12950
2007
2006
2005
2004
11576
9356
7596
6876
revenue
£m
0000000 54679999 109359998 164039996 218719995 273399994
3

£2734m
2008 2734
2007
2006
2005
2004
2513
2347
1964
1811
adjusted pretax profit
£m
0000000 59959998 119919995 179879993 239839990 299799988
1

£2998m
2008 2998
2007
2006
2005
2004
2832
2493
2021
1856
ebita
†
£m
note figures included in the graphs above for 2004 are reported under uk gaap and the results of all comparative years have not been retranslated to current year exchange rates 07
overview of group results
this has been a challenging year with volatile market
conditions in two of our key geographic regions after
a good performance in the first half of the year the group
saw softening customer demand in the uk and north
america although mainland europe and rest of world
continued to perform strongly this resulted in organic
revenue growth excluding sage healthcare division for
the group of 6 3 organic revenue growth overall
subscription revenues representing the 61 of our
revenues which are recurring in nature grew by 10
and were less affected by market conditions in the uk
and north america the continued growth in subscription
revenues compensated for the more challenging market
conditions we experienced in software and software
related services combined softwaresupport contracts
the largest component of subscription revenues
represented 39 of our total revenues and grew by 14
over the year this demonstrates the resilience of our
business model with our customers continuing to use
our products and services to increase their operational
efficiency in difficult markets software and software
related services revenues grew by 2 reflecting
the market slowdown in north america and the uk
beginning in the second half of the year
product and service strategy
innovation is at the heart of our strategy we continue
to adapt and evolve our products and services offering
to meet the changing needs of our 58 million customers
with an increasing range of customer support contracts
as well as tiered subscription offerings tailored to the
varying requirements of our customer base our integrated
product suites launched last year have been well received
by our customers and business partners and are beginning
to contribute to organic growth software as a service
“saas” and hosted products such as sage 50 accounts
professional online sagecrmcom sage accpac erp
and billing boss continue to show strong demand
although they remain a modest contributor to group
revenues overall
over the year we successfully extended our support
offerings with sage accountants’ club priority link
in the uk contrat platine for ciel customers in france
and the premier and avanzado support contracts
in spain customer support continues to drive growth
in spain south africa poland and portugal while our
newer markets in china india malaysia and singapore
successfully leveraged their existing solutions adapting
best practice solutions from our more established regions
the growth in customer demand for quality support
confirms that customers want to improve their business
performance through the innovative and welldesigned
products and services that sage offers
we are also seeing a growing trend for larger companies
in the sme sector to extend their businesses beyond their
home territories our midmarket customers increasingly
need solutions that are robust enough to cope with
multiple government legislation multiple currencies and
multiple languages yet can offer rapid integration and
local customisation our international products such as
crm act saleslogix sagecrm sage erp x3 and
sage accpac erp broaden our portfolio of localised
solutions and are growing well in our emerging markets
helping us expand into new territories we anticipate that
the trends in the sme sector will increasingly facilitate the
development of new products and services aimed at the
emerging international sme sector that will complement
our current portfolio of locally focused solutions with
our long experience with smes we understand these
emerging challenges and are developing solutions that
meet the international demands of mediumsized
companies yet still offer the flexibility and localisation
that is our competitive advantage
subscription revenue s
10

£7857m
£m
2008 7857
2007 7143

software and softwarerelated
services revenue
 2

£5093m
£m
2008 5093
2007 4998
 foreign currency results for the year ended 30 september 2007 have been retranslated based on the average exchange rates for the
year ended 30 september 2008 of 197£1 andb131£1 to facilitate the comparison of results
†
earnings before interest tax and amortisation of intangible fixed assets “ebita”

pretax profit stated prior to amortisation of intangible fixed assets 08
acquisition strategy
relative to previous years this has been a quiet year
for acquisitions we continue to evaluate a number of
opportunities in both new and existing markets although
in many cases vendor price expectations have not as yet
adjusted to current market conditions during the year
we completed three principal acquisitions for an enterprise
value of £512m kcs a leading supplier of hr and
payroll services in the uk was completed in october
2007 for an enterprise value of £202m tekton a supplier
of construction solutions for uk midmarket companies
was completed in march 2008 for an enterprise value of
£198m eurowin acquired in july 2008 for an enterprise
value of £112m strengthened our market position at the
entrylevel in spain these acquisitions were all strategic
investments in broadening our product offering
we remain committed to our acquisition strategy of
expanding our product and service offering to smes in
both new and existing territories as we expand the scope
of our businesses worldwide we are increasingly focused
on leveraging our scale and exploiting global synergies
between our businesses our strong balance sheet and
cash conversion put us in an advantageous position to
pursue opportunities when asset prices fall however
our acquisition methodology remains robust and highly
disciplined in determining valuation parameters
distribution strength
our distribution strength remains one of our key
competitive advantages with over 30000 business
partners and 40000 accountancy practices
recommending and marketing sage products worldwide
the role of our business partners in promoting our
products and services and providing local expertise
continues to evolve as customers demand increasing
levels of tailored products and specialised services our
business partners are a key component in building and
maintaining ongoing relationships with our customers
customer base
over the year we added 341000 new customers
37000 resulting from acquisitions made this year
new customers are an important component in our
longterm growth strategy as customers tend to remain
loyal to their original software supplier as they grow
purchasing upgrades and additional products and driving
future organic revenue growth
north america management team
this has been a transitional year for our north american
business and a period of organisational change in march
2008 we appointed sue swenson as president and
ceo to lead our north american business she was
joined in june 2008 by marc loupé as chief financial
officer of north america lindy benton who brings
extensive experience in healthcare industry management
joined in september 2008 as chief operating officer
of sage healthcare division greg hammermaster joined
in november 2008 after the end of the financial year as
president of sage payment solutions division greg has
longterm experience of the payments industry the new
executive management team is focusing on driving
operational improvements and earnings growth
environment
we are aware of the current debate around climate
change and our corporate policy is to minimise our
carbon footprint where possible this year our focus
has been on developing a globally consistent template
for measuring our carbon emissions and waste generation
across our businesses in all our major locations as an initial
step in our strategy to reduce our longterm impact on the
global environment we encourage our employees to think
and act in an environmentally positive manner to help us
realise this strategy
outlook
the strength and flexibility of our business model
has helped us achieve solid results in difficult market
conditions as markets weakened in the uk and north
america we were rapidly able to adapt to the changing
markets and proactively refocus our businesses in
these regions our businesses in mainland europe
and rest of world recorded strong results through a
combination of favourable market conditions and good
commercial execution
we anticipate that the broader economic climate will
remain uncertain for the near future however our
business model together with consistently strong cash
flows robust balance sheet and high level of recurring
revenue streams provides a solid foundation for our
operations our large and geographically diverse
customer base of over 5 million customers also provides
many opportunities to meet future demand for business
critical solutions designed to help smes run their
businesses more efficiently in difficult market conditions
whilst we are still early in our new financial year growth
in subscription revenues has continued to offset weakness
in software revenues although we remain cautious in our
outlook we expect demand for our customer support to
continue which combined with tight cost control and our
strong geographic market positions will allow us to
weather these turbulent times
paul walker
chief executive 09
corporate strategy
while we are locally focused in serving our customers we work
together as one organisation towards one future our strategy sets
out a clear vision supported by a set of goals towards which all of
our operating companies around the world are working
our vision is to be the most admired and respected software provider
in the world our business will grow as we help our customers
manage their businesses more efficiently our products will be easy
to install customise and maintain the services and support provided
by our people and our partners will help to take the complexity out of
managing business processes our business model and the way in
which we operate will make it easy to deal with sage
• be a key leader in all markets of
the world
• supply business management
software and services that help
our customers run their businesses
more efficiently
• leading market positions enhanced
in several key markets in all our
major markets
• develop products and services which
are the most compelling fit with a
customer’s country and industry
• maintain high levels of quality
service support that feed back into
the product and services
development cycle
• contract renewal rates maintained
at 81
• have the most trusted brands • invest in a strong brand identity
consistent with our corporate values
• global brand development project
to identify and apply sage’s core
corporate values across our
businesses
• have the most satisfied and active
customers in our industry
• focus on product innovation
• focus on valueadded services
• fulfilment of the changing needs
of our customers
• migration revenue increased by 9
• combined softwaresupport contract
revenue increased by 14
• new integrated product suites
well received
• experience superior organic revenue
growth versus our peer group
• anticipate market developments and
develop products and services to
meet changing customer needs
• subscription revenue grew
by 10 driven by combined
softwaresupport contracts
• be recognised as one of the most
admired employers
• build organisational leadership
to drive business performance
• continued investment in talent
management succession planning
people development and hr
processes
objective strategy progress “our principles of simplicity trust
integrity innovation and agility drive
everything we do – howwe think how
we plan how we make decisions”
10 sage provides a choice of high quality business software
services and support to small and mediumsized
businesses whilst our heritage is in the small business
market and most of our customers employ less than
500 employees we also have the experience and
expertise to meet the needs of specific industries
and larger organisations
the majority of our products and services are developed
sold and supported locally to meet local customer needs
and comply with local legislation and regulations this
ensures our products and services are relevant to our
customers and makes it easier for them to manage their
business processes whether it is our financial software
enabling better cash flow management our crm software
helping to build profitable customer relationships or our
hr and payroll offerings being used to improve employee
performance and ensure legislative compliance our
software and services equip our customers to run their
businesses more effectively and manage the challenges
of today’s business environment
what makes sage different is our people our dedication to
doing the right thing by the customer and our commitment
to support them to the very best of our ability
at sage we nurture a unique culture and regardless of
where we are in the world our people are guided by five
key principles of simplicity trust integrity innovation and
agility these attributes will enable us to serve all our
customers well and continue to deliver our success
our corporate principles underpin everything we do – how
we think how we plan and how we make decisions
• whether it is software which is easy to use or support
that is easy to access simplicity is a key driver in
our business
• our customers place important confidential information
in our hands so it is imperative they fully trust us to deliver
• whether providing reliable high quality products or giving
advice on business critical topics integrity is critical to
us when building longterm customer relationships
• we need to think ahead to anticipate our customers’
needs and be creative in how we develop our software
and services continually innovating to improve the
customer experience we deliver
• we have to be responsive to customer needs and
market changes and ensure we are agile enough to
adapt our products and services to meet these demands
whatwe dowhowe are how wework
simplicity trust integrity innovation agility
11 business review  our business and markets
marketplace overview
market leading brands
brand leadership
sage is one of the leading global suppliers of business
management software and services for smes we are
the third largest provider of business management
solutions in the world with a 7 market share
1

we have built our marketleading position around our
decentralised business model the customer experience
we provide the strength of our distribution channels and
our local brands these brands such as ciel in france
contaplus sp in spain sage 50 in the uk softline pastel
in south africa or simply in canada are widely recognised
and trusted in their local markets
above and beyond the strength of our local brands
sage is an internationally recognised brand in its own
right the sage brand is much more than our logo
it represents our energy and commitment to doing what’s
right for our customers going the extra mile and exceeding
expectations to capitalise on our brand position we have
made a substantial investment in a global initiative to
leverage the strengths of the sage brand more consistently
and effectively alongside those of our local brands
this combination of our global and local brands provides
us with a key point of differentiation
products and services
we provide a choice of high quality products and
services which are relevant to our customers use the most
appropriate technology and deployment methods and are
supported by local experts the mix of products and
services we deliver in each of our regions is tailored
according to the needs of our customers in that market
these products and services are broadly classified into
the following groups
• accounting
• financial forecasting
• job costing
• business intelligence
• taxation and other products for accountants
• business stationery
• development platforms
• ebusiness
• enterprise resource planning “erp”
• payroll
• human resources
• crm
• payment processing

sap 275 a
a
b
c
d
e
f
oracle 139 b
sage 70 c
infor 64
microsoft 41
d
e
others 411 f
business management
solutions providers
1
1
source gartner august 2007 worldwide erp
licence and maintenance revenue by vendor
competitive profile
key
1 sap
2 oracle
3 microsoft
4 salesforcecom
5 intuit
local market solutions
product
driven



customer
led
sage
1
2
3
5
4
global consistency

12 in addition to this broad range of solutions we also
recognise that businesses in different industries have
specialised needs consistent with our approach of
staying close to our customers and delivering relevant
solutions many of our operating companies have
alongside our worldwide community of software
developers developed solutions for specific industries
in regions where the market for business software is more
established such as in the uk  ireland mainland europe
and north america much of our growth is driven by the
demand for valueadded support as well as integrated
suites of software these suites integrate front and back
office business processes and simplify workflow across
an entire company we have also developed tiered levels
of support contracts to meet differing customer needs
these include softwaresupport contracts which combine
software annual upgrades support and services such
as electronic backup access to training resources and
compliance services
in emerging markets such as africa and asia growth
is driven by demand for support contracts payroll
solutions upgrades and migrations as well as our
international product offerings
industryspecific and specialised solutions
uk  mainland north rest of
ireland europe america world
healthcare •
hr and payroll •• • •
constructionreal estate•• • •
transportdistribution •• •
payment processing••
accountancy •• • •
notforprofit ••
manufacturing •• • •
retail •• • •
13 business review  our business and markets 14
technology developments
technology continues to move at a fast pace with the
growth of saas as well as the emerging influence of web
20 technologies these developments present exciting
opportunities to enhance further the value we provide to
customers particularly in the areas of collaboration
integration and mobility we take a pragmatic impartial
approach harnessing the most appropriate technologies
for the benefits they can bring to our customers
whilst the market for saas is growing we anticipate
that adoption will be gradual and will vary widely between
markets we believe that customers will gradually
incorporate new technologies into their existing solutions
and adopt a “hybrid” approach to their business software
and services our focus is on making the integration
process easier for our customers integrating desktop
software with supplementary business services delivered
as saas applications as a group we continue to
introduce saas applications where appropriate for our
customers these include billing boss a saas invoicing
service in canada sage 50 accounts professional online
software integrated with online payment processing
services in the uk and sage douane delta a saas
application which enables french customers to file
their tax returns online
in crm we are creating new interoperability among
our crm solutions act sagecrm and saleslogix
we are incorporating open web standards to enable
integration between the front and back office
our crm strategy also embraces saas capabilities and
web 20 technologies which will provide users such as
mobile salespeople with an interactive experience from
a wide range of devices whether mobile ondemand
or onpremise our crm solutions will provide sales
teams with a more complete picture of their customers
and enabling them to work more efficiently
international solutions
we are seeing growing demand from existing and potential
customers who increasingly operate internationally
and need a solution that works in all of their locations
these solutions must be robust enough to cope with
multiple government legislation currencies and languages
yet be flexible lean and offer local customisation as a
global business with extensive experience of working
with growing smes we understand these challenges
and have developed erp and crm solutions that
meet the demands international businesses generate
the provision of these international solutions demonstrates
our commitment to offer our customers a choice of high
quality relevant flexible and scalable solutions which meet
their evolving needs 15
cross company collaboration
even though we take a predominantly local approach
we also place a great emphasis on collaboration across
our businesses we work to leverage our accumulated
knowledge innovation technologies and resources which
enables us to continually improve the products and services
we deliver to our customers this collaboration is ongoing
and this year has included
• sharing innovation around our premium support models
for example the sage accountants’ club priority link
in the uk which provides priority access and dedicated
account management for its customers benefited
from collaboration with our french and spanish
businesses which also have experience of offering
premium support contracts
• the introduction of sage erp x3 acquired through
our french business in 2005 into the product portfolios
of our german and south african businesses
• the rollout of our global crm strategy and its
interoperability platform across multiple geographies
• the leveraging of the knowledge gained by our uk
business when they developed the sage 50 and sage
200 suites by our north american business to launch
the sage accpac erp and sage mas extended
enterprise suites
“we take a pragmatic impartial approach
harnessing the most appropriate technologies
for the beneﬁts they can bring to our customers”
sage douane delta is a saas application developed
by sage in france to assist customers with online
filing of their tax returns it has processed one million
returns since its launch in march 2007 the application
enables importexport businesses in france to ease
their transactions with french customs douanes
françaises by giving them the ability to complete
their customs returns online without generating
further paperwork or having to invest in sizeable it
infrastructure customers are billed per transaction
with no licence or maintenance fee making sage
doaune delta a cost effective solution
sage douane delta 16
an example of the benefits of our decentralised
business structure was demonstrated in spain
where new financial legislation aimed at improving
the standard of accounting procedures within smes
came into effect on 1 january 2008
more than 98 of businesses in spain are smes
therefore the legislation affected a large majority of the
country’s business population and sage customers
research showed that 75 of employers were not
aware of the effects of this legislation on their
businesses consequently sage spain along with
other key sme technology providers conducted
a road show across the country designed to help
spanish smes understand more about how the
new legislation impacts their businesses
more than 31000 people attended the road shows in
40 cities to find out not only about the legislation but
also how using software can improve their business
processes and help run their business more effectively
entrepreneurship in action 17
we have built our success on understanding and meeting
the needs of customers in their local markets to capitalise
on our local expertise we operate through a decentralised
business structure whereby each country has substantial
autonomy in terms of local business strategy and operational
activities such as sales marketing support and research
and development
our decentralised business model provides local focus
alongside our global scale this approach has a number
of benefits including
• an excellent understanding and accumulated knowledge
of local business environments and customer needs
• the provision of local support which provides added value
for our customers helps them run their businesses more
effectively and provides us with valuable feedback to
develop and improve our products and services
• the ability to offer a choice of relevant flexible and
scalable solutions including those for specific industries
incorporating local fiscal legal and regulatory requirements
• the agility to respond quickly to local market changes
• a global scale and collaborative culture which enables
us to leverage and share knowledge innovation
technologies and resources across the group
• devolved accountability and decisionmaking which
maintains an environment in which entrepreneurship
is encouraged and
• experience of working with growing smes across many
regions which means we understand the challenges
faced by larger businesses and can develop solutions
to meet their needs
our local management teams report into the ceo of their
region – uk  ireland mainland europe north america
and rest of world the executive committee oversees
the management of all sage operations and comprises
the regional ceos and other senior leaders from across
the group
the executive committee is responsible for the
development and implementation of strategy operational
plans policies procedures and budgets the monitoring
of operating and financial performance the assessment
and control of risk the prioritisation and allocation of
resources and the monitoring of competitive forces in
each area of operation it is supported by a group team
which plays a key role in facilitating collaboration and the
leveraging of knowledge innovation technologies and
resources across the business
executive committee
karen geary
group director of
human resources
and corporate
communications
paul harrison
group finance
director
david clayton
group strategy
and mergers and
acquisitions director
paul stobart
ceo uk  ireland
guy berruyer
ceo mainland europe
and asia
sue swenson
ceo north america
ivan epstein
ceo south africa
and australia
michael robinson
company secretary
and group legal
director
klausmichael
vogelberg
group chief
technology officer
paul walker
group chief
executive
business structure business review  our business and markets 18
we differentiate ourselves through the superior experience
we deliver to our customers customers and their needs
and expectations lead our strategy we aim to provide
our customers with an outstanding experience at every
level and in all their dealings with sage understanding
their needs and the provision of specific and relevant
solutions are two key factors in providing a positive
customer experience building secure customer
relationships for the longterm is absolutely essential
for us to provide this outstanding experience
we develop these relationships by providing customers
not only with support and advice on how to get the most
out of their software to enable better business
performance but also with guidance on business critical
topics many of our customers have limited sources
of advice and very often limited it support as such
we believe we are not just a software supplier but a partner
in our customers’ businesses helping them to manage
their businesses more effectively
our partnerships are built on the ongoing dialogue we
have with our customers the provision of high quality
support and advice and the loyalty and trust that results
from it we have 17 million support contracts with average
renewal rates of over 80 our emphasis on support is
reinforced by the resources we put behind it more than
40 of our people work in technical support customer
service or customer training roles and we receive over
36000 calls a day from customers working in all sizes
and types of business
we will continue to provide support locally because we
believe that outstanding service has to be provided by
highly trained individuals who understand their customers
their products the local legislation and other local market
issues that affect them by supporting connecting and
building relationships with our customers in this way
we aim to deliver an extraordinary experience which
is unmatched in our industry
“our emphasis on support is reinforced by the
resources we put behind it across the business
as a whole more than 40 of our people work
in technical support customer service or
customer training roles”
customerexperience 19 “our distribution channels include retail stores web
retailers direct from sage or indirect through our
worldwide network of over 40000 accountants and
30000 business partners and resellers”
20 distribution channels
sage has strong routes to market which are tailored to
match customer needs our distribution channels include
retail stores web retailers direct from sage or indirect
through our worldwide network of over 40000
accountants and 30000 business partners and resellers
we constantly seek innovative ways to reach our
customers and as a result have also developed
partnerships with leading banks to package our software
and services as part of their wider offerings to smes
although retail sales account for a small part of our total
revenues it is an important component in acquiring new
customers as these new businesses grow they upgrade
and extend their software solutions leading to future
revenue streams
many of our products and services are sold direct by our
telesales teams through new customer contact and
customer enquiry followup especially at the entrylevel
where product implementation is relatively straightforward
for our larger midmarket customers who require a greater
degree of customisation our business partners play a
valuable role in our sales process
our business partners are very much an extension
of the sage ecosystem and provide additional local
expertise implementation training and support as
well as customisation and specialist sector knowledge
our leading position in the small business market also
provides our partners with a strong source of leads
and migration opportunities
sage’s network of accountants and small business
advisors also play an important role as recommenders
and resellers of sage products
this diversity of distribution channels is one of our key
business strengths reflecting our understanding of the
sme marketplace
21
sage asia’s annual business
partner conference 22 business review  our business and markets
acquisition strategy
acquisitions have always been an important component
in our growth strategy and are an effective method of
entering new geographic markets through an established
customer base and proven product distribution we have
successfully entered many new geographic territories over
time including north america in 1991 mainland europe in
1992 south africa and australia in 2004 and the far east
in 2006
in markets where we have established businesses we
look for acquisitions that add new products and services
to our portfolio that we can offer our customers this
includes industryspecific solutions such as our acquisitions
of timberline in north america and tekton in the uk which
offered solutions for construction companies and xrt
in europe which complemented our existing solution in
treasury management the acquisition of verus sage
payment solutions division in the us and protx in the
uk brought us new capability in payment processing to
offer smes as they increasingly sell to remote customers
through the internet and telesales we also use acquisitions
to enter new industry segments such as healthcare which
we entered in 2006 with emdeon sage healthcare division
we integrate new acquisitions into our corporate structure
at a local level under the supervision of our regional
management teams this allows us to preserve local
market expertise whilst overlaying the synergies of a larger
global company early on we apply the sage business
model by developing effective migration strategies from
entrylevel solutions to midmarket and industryspecific
solutions and from legacy systems to more efficient
integrated solutions
an important step in improving margins and driving
revenue growth in new acquisitions is to develop the
sage customer support concept which offers high quality
business support to our customers we also share best
practice from around our global businesses which we
apply as appropriate such as combined softwaresupport
contracts which are growing well in most of our markets
acquisitions will remain an important part of our corporate
strategy particularly in the newer economies of china
india eastern europe and south america where large
numbers of smes are beginning to automate their
business processes our acquisition valuation model is
financially robust based on conservative assumptions and
a discounted cash flow model we remain committed to
financial prudence in our acquisitions over the past year
this has led to a decline in the number of acquisitions we
have completed as asset prices have remained inflated
we remain active in evaluating potential acquisitions and
are well placed to benefit from future opportunities when
asset prices approach realistic valuations
the common denominator linking all our acquisitions
is our focus on the sme market where our corporate
expertise lies
softline south africa acquired
in 2004 opens new oﬃces in
johannesburg in 2008 23
year company industry specialism country value
2007 xrt treasury france £53m
2006 emdeon healthcare vertical us £315m
verus payment processing us £174m
adonix accounting midmarket france £98m
elit transport and food distribution vertical france £31m
ubs accounting entrylevel new territory malaysia £12m
2005 logic control accounting midmarket spain £56m
symfonia accounting entrylevel new territory poland £10m
2004 softline accounting entrylevel new territory south africa
£53m
payroll accountants vertical new territory australia
grupo sp accounting entrylevel new territory spain £55m
accpac accounting crm midmarket us  canada £76m
2003 timberline construction vertical us £54m
2001 interact crm us £227m
2000 best fixed asset payroll hr us £270m
1999 peachtree accounting entrylevel us £88m
tetra accounting midmarket uk £81m
sesam accounting midmarket new territory switzerland £11m
1998 state of the art accounting midmarket us £131m
1997 khk accounting midmarket new territory germany £46m
19941995 saari  sybel accounting midmarket becoming sage france france £46m
1992 ciel accounting entrylevel new territory france £5m
1991 daceasy accounting entrylevel new territory us £15m
 acquisitions of a value more than £25m other than the entry into a new territory
significant acquisition history
 business review  our business and markets
sage is committed to acting as a responsible corporate
citizen we take a pragmatic approach to cr which
enables us to focus our commitment on areas that are the
most relevant to sage our people and where we believe
we can make a difference
we aim to measure our progress and whilst any standards
established by local legislation will apply as a minimum we
intend to achieve best practice in the local context of every
country in which we operate and to share this across the
group for continuous improvement our approach also
builds in flexibility for our businesses to enable them to
focus on the areas of strategic importance to them locally
this is the basis for a new policy which we have embedded
throughout the business during the financial year the policy
has four areas of focus – our people the environment
supporting industry and working with our local communities
and charities
people
our strategic goal is to be an admired employer
this means that people will want to join sage as
a place of choice achievement and opportunity and
one where they can be genuinely successful and fulfilled
in their careers people who work with us will recognise
that the environment we create maximises their potential
and is a place where innovation and creativity can
flourish all of our operating companies are working
towards these aims
we continue to adopt a consultative approach with our
employees through many means including focus groups
employee committees and employee surveys this work
is locallyled to ensure it is meaningful and relevant to
our people
in terms of furthering our people agenda this year we have
encouraged our businesses to focus on talent equity and
engagement targets for improvement are set locally and
approved at group level
corporate responsibility“cr”
sage uk employees travelled to t anzania to
help renovate a nursery and build playground
facilities for children in the village of mahida
24 leaders who inspire an
extraordinary customer experience
sage aspires to be the most admired and respected
business software and services provider in the world
and we have to deliver this in an environment of
increasing customer expectations and strong
competition as we continue to shape our strategy
and look to our future needs the time is right to focus
on leadership in sage and define the leadership
qualities we need to be successful in the future
over the course of 2008 a team of global leaders has
developed an aspirational leadership standard against
which all of our current leaders and emerging talent will
be benchmarked the new standard sets out our vision
for what successful leadership will be in sage and
defines the behavioural and cultural attributes we need
and expect rollout and integration at a local level has
begun and will continue into 2009 with the launch of a
global educational programme for senior leaders
talent
as talent is critical to the future growth and success of
sage we have worked at a global level to introduce new
processes to identify and nurture emerging talent during
the year this process includes a review of talent at both a
regional and a global level as well as succession planning
for senior roles
equity
diversity and fairness has always been a part of the way
sage does business this year we introduced a global
“code of ethics” into the business as part of our
compliance framework this sets out the standards
which all operating companies are expected to meet
regarding diversity and fairness amongst other things and
communicates to employees our stance our operating
companies have been working on embedding this into
their businesses
engagement
one of our strategic goals is to be an employer of choice
many of our operating companies chose to focus on
employee engagement levels and how to improve
employee satisfaction and thus improve the customer
experience and ultimately business performance
25 26 business review  our business and markets
emissions co2 by category

air conditioning 1 a
a
b
c
d
e
f
waste 1 b
gas 11 c
business travel 18
commuting 20
d
e
t otal 100
electricity 49 f
waste in tonnes to landfill
tonnes
london protx 45 a
a
b
c
d
e
winnersh 315 b
manchester 158 c
newcastle  
benton park 251
newcastle  
north park 1362
d
e
t otal 2131
environment
sage is an officebased organisation and as such our
environmental impacts are less than those of some
industries our role in automating business processes
helps organisations reduce their environmental impacts
for example through reduced use of paper an example
of this is shown in commercial context on page 15
sage douane delta a tool for electronic filing of tax
returns our businesses are reducing the inclusion
of paper documentation with software and maximising
electronic downloads
we are introducing carbon emissions reporting and waste
measurement across our businesses our goal is to reduce
our impacts however first we must understand what
these are this year we have put in place a process to
begin measuring the carbon impact of our major offices
our aim has been to
• understand better our impact in terms of carbon
emissions and waste
• create a benchmark set of data for our business
• require operating companies to begin measurement
• build awareness inside the organisation of environmental
impact and
• identify opportunities for reduction and costsavings
data
data collection took place over a six month period in order
to get a benchmark set of data we have based our
calculations on uk defra conversion factors or local
government published carbon conversion factors where
these were available within that country
the data collected was for a six month period
from 1 august 2008 we will collect on an annual cycle
total carbon
emissions from
operating energy
company tonnes
uk  ireland 2965
france 3771
spain 866
germany 621
poland 99
north america 5433
south africa 1270
china 12
wholly owned or wholly leased buildings for which energy data
is available
energy awareness
our operating companies are encouraged to seek ways
to minimise impact through employee education and
awareness this year one of the principal means of doing
this was through sage day our annual event which enables
our employees to spend time connecting with one another
and with their local community in meaningful ways our
theme this year was “being green” and our offices took
part in a variety of local activities to educate and enthuse
people about making changes at work and at home
uk carbon footprint
reflecting our focus on better understanding our impact
in terms of carbon and waste during 2008 our uk
business undertook a carbon footprint estimation
exercise this included emissions produced as a result of
• energy consumption gas and electricity
• air conditioning use
• business travel including hotel stays
and fleet vehicles
• commuting and
• waste
the exercise included all five main office locations in
the uk he overall footprint for the uk business for the
12 months from april 2007 to march 2008 was 9874
tonnes of co2 the sources of co2 were broken down
as follows 27
supporting industry
our role in supporting commerce and industry is easy to
underestimate with products and services that enable
businesses to manage their processes what we do every
day enables businesses to make decisions grow and
operate more effectively our goal is to be a partner with
our customers delivering an outstanding experience which
enables them to achieve their business ambitions this can
be evidenced through our programmes to improve the
customer experience and encourage entrepreneurship
and startups operating companies can take a proactive
stance and develop their approach according to what is
relevant in their local markets and supports the sage brand
examples of sage getting closer to its customers
and supporting entrepreneurs
• creation of an online act community enabling
customers to collaborate with each other and with
sage helping them get the most from their software
• a joint working initiative with the portuguese government
to make it easier for sage customers to submit accurate
tax returns and decrease tax avoidance
• work to reduce software piracy in spain
• support of the development of the notforprofit sector
in north america through an association with techsoup
an organisation which provides free business software
to eligible charitable entities
• sage in south africa softline cosponsored with a major
radio station an awards programme for small startups
and entrepreneurs which enables customers to nominate
smes for high quality customer service
• sage switzerland sponsored startup initiatives
• sage in north america launched a “family owned and
operated support programme” which offers free software
to family owned and operated businesses that may be
struggling in the current volatile economic climate
community and charity
our people have a long history of actively supporting a
wide range of charities and community organisations that
are most meaningful to them activities like fundraising
sponsorship and volunteering are very common in sage
offices around the globe these are entirely locallyled with
each business setting its own direction on community and
charity activity as a result the support we give is extremely
diverse and manifests itself in numerous ways many of
which cannot be valued in monetary terms
in addition to these efforts sage donated £285000
to charitable causes 2007 £220000 in the year
examples of community and charity work we do are featured
in each of our regional reviews on pages 30 to 37
“our role in supporting commerce and industry
is easy to underestimate with products and
services that enable businesses to manage
their processes what we do every day enables
businesses to make decisions grow and operate
more eﬀectively”
as part of the sage day celebrations
in portugal children of sage employees
came to the oﬃce to take part in the
community activities 28
kpis
as summarised on page 9 our corporate strategy
is focused on creating value and building a strong
sustainable business with high levels of customer
satisfaction we monitor our performance against
a number of different benchmarks which allow us
to measure the value we are creating for both our
customers and our shareholders
in selecting these kpis we have incorporated our
strategic goals set out on page 9
consistent and sustainable earnings growth organic
revenue growth and strong cash generation from our
businesses are kpis over the year we performed well
against these financial benchmarks and in line with our
forecasts at the beginning of the financial year
we also closely monitor the degree of customer
satisfaction relating to our products and services
we take over 9 million calls a year or over 36000 calls a
day from all over the world this customer feedback helps
us improve our products and services as well as providing
a rich source of input on customer satisfaction levels
a kpi of customer satisfaction is the level of renewal rates
on our service support contracts customers who choose
to renew their service contracts upgrade their software or
migrate to new sage products by definition must have a
high degree of satisfaction with sage our renewal rates
historically have been over 80 and in 2008 we again
achieved this high rate of customer renewal 29
adjusted eps growth
pence
ebita margin
 
organic revenue growth
excluding sage healthcare division 
3 23 6
0000 2888 5776 8664 11552 00 54 108 162 216 00 14 28 42 56 70
2008
2007
2006
2005
1407
1236
1053
2008
2007
2006
2005
24
26
27
2008 6
2007
2006
2005
7
7
6
1444 23
00 238 476 714 952 1190 0000000 16200001 32400002 48600002 64800003
cash generation from operations

renewal rate on maintenance  
and support contracts

114
2008 114
2007 112
2005 119
81
2008 81
2007 81
2005 78
2006 107 2006 80
adjusted eps represents income for the
financial year prior to the amortisation of
intangible assets divided by the weighted
average number of ordinary shares in issue
during the year all figures provided above are
restated to reflect the neutralisation of foreign
exchange movements
ebita is defined as earnings before interest
tax and amortisation this measure excludes
the effects of amortisation of acquired
intangible assets and the net amortisation
or capitalisation of software development
expenditure the ebita margin represents
ebita divided by revenue for the year
organic revenues are derived from our core
business operations excluding the contribution
from acquisitions and disposals made in the
current and prior year along with noncore
products current year revenue is compared to
the prior financial year translated on consistent
exchange rates to eliminate distortions due to
fluctuations in exchange rates
cash flows from operating activities divided
by ebita provide a measure of the ability of the
group to yield cash from its ongoing business
to reinvest and fund liabilities the group aims
to maintain positive cash generation from
operations
customer retention is an important measure
of competitiveness in the market renewal rates
are calculated as the number of maintenance
and support contracts which were renewed in
the period divided by the number of contracts
which were potentially renewable in the period 30
00 322 644 966 1288 1610 0 17 34 51 68 85
00 1544 3088 4632 6176 7720 00 726 1452 2178 2904 3630
revenue ebita
†
subscription revenue software and softwarerelated
services revenue
customers contracts
10 £m
2008 2457
2241
ebita
†
margin36
£885m
£m ’000 ’000
2008 885
2007 827
13
£1605m
£m
2008 161
2007 142
4
£852m
£m
2008 85
2007 82
31000
772000
2008 772
2007 741
363000
2008 363
2007 363

accounting 52 a
a
b
industryspecific 9 b
hr and payroll 30 c
crm 6
payment processing 3
d
e
t otal 100
revenue by sector
0000000 49139999 98279999 147419998 196559998 245699997
0 17 34 51 68 85
00 726 1452 2178 2904 3630
£m
2008 2457
2241
2008 885
2007 826
£m
2008 1605
2007 1423
2008 852
2007 818
2008 772
2007 741
2008 363
2007 363
c
d
e
£2457m
2007
“the uk business delivered solid revenue growth for the year total
revenues grew by 10 overall to £2457m 2007 £2241m with
organic revenue growth of 3 for the year sage 50 our ﬂagship uk
product grew by 8 despite a diﬃcult market our fully integrated
product suite solutions sage 200 and sage 1000 launched last
year continue to be well received by our customers and business
partners alike”
uk ireland
including united kingdom and republic of ireland
ceo paul stobart
performance
†
earnings before interest tax and amortisation of intangible fixed assets “ebita” 31
sage in the community
our people in sage’s newcastle office donated
their time and energy by volunteering for sport
relief a uk wide initiative to raise money for
charity through encouraging people to participate
in sport
part of the north park headquarters became
a charity call centre for the evening of the
14 march 2008 and over 100 volunteers from
sage gave up their time to receive telephone
donations from members of the public on behalf
of sport relief sport relief took place over the
whole weekend starting with a live televised
entertainment show on the friday night and
culminating in a series of charity runs across
the country on the sunday
regional results
total uk  ireland revenues grew by 10 to £2457m
2007 £2241m organic revenue growth was 3 for
the year as the deteriorating macroeconomic environment
in the second half of the year affected growth in software
and softwarerelated services sage 50 our flagship
uk product grew by 8 driven by our combined
softwaresupport contract sagecover extra our fully
integrated product suite solutions sage 200 and sage
1000 launched last year continue to be well received by
our customers and business partners alike sage 200
performed strongly over the year although sage 1000
in the upper midmarket was more affected by the
challenging market conditions protx the payment
services solution also performed strongly hr and
payroll reported modest growth in the absence
of legislative stimulus
the ebita
†
margin decreased to 36 2007 37
due to the dilutive effects of acquisitions
acquisitions
two acquisitions were made in the uk over the year kcs
a leading supplier of hr and payroll services in the uk
was completed in october 2007 for an enterprise value
of £202m kcs extended our payroll offering into the
midmarket and complemented our prior year acquisition
in this area snowdrop the acquisition of tekton a leading
supplier to midmarket construction companies was
completed in march 2008 for an enterprise value of
£198m tekton complements our existing construction
solution sage 50 cis which targets smaller construction
companies both acquisitions are important strategic steps
in broadening our uk product offering
marketplace
the uk  ireland are our original markets where sage was
founded in 1981 we have over time established a strong
market position to become one of the leading suppliers of
software solutions in the uk and the sage brand enjoys
high customer awareness
we sell over two thirds of our products and services direct
to our customers through our own telesales and direct
marketing teams we also have a strong distribution
network of business partners who resell our products
and services along with banks and accountancy practices
recommending our products and services to midmarket
customers our business partners offer additional services
such as integration training and specialist industry
knowledge helping us build a longterm relationship with
our customers our customer support model also fosters
strong customer loyalty which is one of our key
competitive advantages
our business
over the past year we added 31000 new customers in
the uk  ireland an increase of 4 over the prior year
sage 50 remains the market leading product since its
launch in 1986 and it remains our uk  ireland business’s
most popular product over the years we have expanded
our product offering to include crm hr and payroll
business intelligence payment solutions and industry
specific solutions for construction manufacturing and retail
industries our product offering has also extended into
solutions for startup businesses such as tas and
instant and solutions for larger enterprise customers
including sage 200 and sage 1000
our product development has more recently been focused
on helping our customers run their businesses more
efficiently through easier integration and implementation
of new product modules sage 200 and sage 1000
launched in spring 2007 are the uk  ireland’s first fully
integrated product suites offering financial accounting
crm payroll and business intelligence all in one package
customers can choose which modules they wish to
integrate allowing them a fully customised solution with
minimal integration obstacles this year we have also
launched tailored solutions for specific business functions
such as financial controller and human resources which
include specialist modules these packaged solutions
have proven to be very popular with our customers
we continue to innovate our products and improve the
quality of our customers’ experience combined software
support contracts which offer customers an update to
their software each year as part of their support contract
remain one of our most popular packages demand for
high quality support continues to grow and we have
extended and broadened our range of support offerings
from basic support to new services such as hr and
payroll and sage accountants’ club priority link
a combined softwaresupport contract designed for
multiseat professional practices
we also offer various tiers of support for each product so
that customers can select the level of support they need
our objective is to offer our customers an exceptional
customer experience and to become a true partner in
running their businesses more efficiently 32
“our businesses in mainland europe had a good year total revenues
grew by 15 overall to £4573m 2007 £3959m with strong
organic revenue growth of 9 france reported 7 organic revenue
growth for the full year germany as forecast recovered in the second
half of the year and spain recorded another year of excellent organic
revenue growth of 25 with growth across most of its product
range stimulated by changes in accounting legislation poland
enjoyed strong organic revenue growth of 18 driven by its mid
market solutions and the continued extension of customer support”
0000000 91459998 182919995 274379993 365839990 457299988 0000000 20039999 40079999 60119998 80159998 100199997 00 3258 6516 9774 13032 16290 00 1256 2512 3768 5024 6280
revenue ebita
†
customers contracts
15
£4573m
£m
2008 4573
2007 3959
ebita
†
margin 22
£1002m
£m
2008 1002
2007 915
127000
1629000
’000
2008 1629
2007 1502
59000
628000
’000
2008 628
2007 569
£

79
17
2
2
100 00 474 948 1422 1896 2370 0000000 43960001 87920001 131880002 175840002 219800003
subscription revenue software and softwarerelated 
services revenue
19
£2375m
£m
2008 2375
2007 1987
12
£2198m
£m
2008 2198
2007 1972
accounting a
a
b
c
d
industryspecific b
hr and payroll c
crm d
t otal
revenue by sector
mainland europe
including austria belgium france including subsidiaries in brazil
and morocco germany poland portugal spain and switzerland
ceo guy berruyer
performance
 foreign currency results for the year ended 30 september 2007 have been retranslated
based on the average exchange rates for the year ended 30 september 2008 of 197£1
andb131£1 to facilitate the comparison of results
†
earnings before interest tax and amortisation of intangible fixed assets “ebita” 33
regional results
our businesses in mainland europe experienced strong
growth throughout the year total revenues in mainland
europe grew by 15 overall to £4573m 2007
£3959m with strong organic revenue growth of 9
france reported 7 organic revenue growth for the full
year excellent performances from our entrylevel business
ciel and midmarket solutions contributed to france’s
strong growth germany as forecast recovered in the
second half of the year although a muted performance in
switzerland held back combined organic revenue growth
in germanyswitzerland to 1 office line crm and
midmarket solutions all performed well spain recorded
another year of excellent organic revenue growth of 25
with growth across most of its product range stimulated
by changes in accounting legislation poland enjoyed
strong organic revenue growth of 18 driven by its
midmarket solutions and the continued extension of
customer support
the ebita
†
margin reduced to 22 2007 23 primarily
as a result of restructuring charges associated with our
french logistics business and the integration of a lower
margin swiss acquisition completed in the prior year
acquisitions
in spain this year we acquired eurowin for an enterprise
value of £112m eurowin supplies software to spanish
small businesses through a dedicated partner channel
the acquisition extends our leading market position at the
entrylevel and adds to our business partner distribution
network in spain
marketplace
we entered the european market in 1992 and are now
one of the leading suppliers of business software to
smes in mainland europe in france our ciel brand is a
wellestablished market leader at the entrylevel sage 100
and industryspecific solutions for manufacturing services
and financial institutions also lead their respective markets
in france for medium and larger enterprises our french
business has also been a fastgrowing division supplying
sage products and services to frenchspeaking african
countries where small businesses are rapidly automating
their business processes
in germany we enjoy a strong position with our entrylevel
and midmarket solutions office line as well as baürer
and sage erp x3 supplying the upper midmarket
spain has enjoyed rapid growth and established a market
leading position through application of the sage business
model including customer support and migration
strategies from sp products at the entrylevel to logic
class in the midmarket
poland portugal and belgium are smaller markets which
also enjoyed good growth as smes automate their
business processes
in mainland europe direct sales to our customers account
for 71 of our revenues retail sales primarily at the entry
level account for 1 of total sales business partners
who provide installation and integration of our midmarket
solutions account for 28 of sales
our business
our businesses in mainland europe cover a wide range of
markets from established sme markets in germany and
france to the dynamic newer markets of spain poland
and portugal where smes are rapidly using technology
to enhance business efficiency all have grown steadily
through the application of the sage business model to
our various markets including strong migration strategies
good distribution coverage and extension of our customer
support concept we continue to develop our customer
support model in all our markets in mainland europe
adding new tiers of support and added features as in the
uk customer demand for high quality customer support
remains strong and is driving growth across our markets
over the year we added 127000 new customers in
mainland europe 37000 through acquisitions an
increase of 8
we are also expanding our portfolio of products and
services into newer areas such as crm hr and payroll
and customer support we have also developed industry
specific solutions in treasury management distribution
and logistics in france and spain and international
products in france spain and germany and for smes
working across national borders but still demanding
the local customisation and flexibility of traditional
sage solutions
sage in the community
at sage france the team invited customers
to participate in a survey about their business
and for each completed survey sage made a
donation to ashoka a charity which supports
social entrepreneurship more than 5000
surveys were completed generating in excess
of 50000 euros for the charity sage’s donation
will be used to help the organisation “signes
de sens” a social enterprise which works on
awareness of inclusiveness for the hardof
hearingnonhearing in france signes de
sens is also a sage customer so sage offered
them an updated version of their software
along with support and strategic advice to
aid business planning 34
“this has been a transitional year for our north american business
and a period of organisational change in march 2008 we appointed
sue swenson as president and ceo to lead our north american
business over the year she has assembled a strong and experienced
executive management team and is focusing on driving operational
improvements and earnings growth”
0000000 103119995 206239990 309359985 412479980 515599976 0000000 20439999 40879999 61319998 81759998 102199997 0 599 1198 1797 2396 2995 00 1202 2404 3606 4808 6010
revenue ebita
†
customers contracts
0000000 70259998 140519995 210779993 281039990 351299988 0000000 34660001 69320001 103980002 138640002 173300003
subscription revenue software and softwarerelated 
services revenue
3
£3513m
£m
2008 3513
2007 3423
14
£1496m
£m
2008 1496
2007 1733

accounting 37 a
a
b
c
d
e
industryspecific 41 b
hr and payroll 4 c
crm 9
payment processing 9
d
e
t otal 100
revenue by sector
3
£5009m
£m
2008 5009
2007 5156
ebita
†
margin18
£877m
£m
2008 877
2007 1022
124000
2995000
’000
2008 2995
2007 2871
3000
601000
’000
2008 601
2007 598
£
north america
including canada and united states
ceo sue swenson
performance
 foreign currency results for the year ended 30 september 2007 have been retranslated
based on the average exchange rates for the year ended 30 september 2008 of 197£1
andb131£1 to facilitate the comparison of results
†
earnings before interest tax and amortisation of intangible fixed assets “ebita” 35
regional results
this has been a transitional year for our north american
business and a period of organisational change in march
2008 we appointed sue swenson as president and ceo
to lead our north american business she was joined in
june 2008 by marc loupé as chief financial officer of
north america lindy benton who brings extensive
experience in healthcare industry management joined
in september 2008 as chief operating officer of sage
healthcare division greg hammermaster joined in
november 2008 after the end of the financial year as
president of sage payment solutions division greg has
longterm experience of the payments industry the new
executive management team is focusing on driving
operational improvements and earnings growth
excluding sage healthcare division total revenues in
north america grew by 1 to £3618m 2007 £3589m
which also represented organic revenue growth of 1
including sage healthcare division organic revenues
contracted by 3 the business management division
“bmd” reported flat revenues for the year as did its key
products peachtree and the mas range simply the
market leader in canada recorded good growth as did
specialist solutions such as fas and the accountants’
club organic revenue growth in the industry  specialised
solutions division “issd” was 3 sage timberline
officemaster builder reported modest growth despite
challenging conditions in the us construction industry
non profit solutions continued to show good growth
sage payment solutions division “psd” grew by 5
for the full year reflecting the slowing us economy and
turmoil in the credit markets towards the end of the year
revenues at sage healthcare division contracted 11
as over the course of the year management concentrated
on improving operational efficiency within the business and
increasing margins after a significant restructuring of the
business good progress is being made in stabilising the
support operations and network services
similar to the uk our north american business
experienced an economic slowdown as the year
progressed this affected the second half performance
of psd whilst bmd and issd both saw softening late
in the second half of the year
the ebita
†
margin decreased in line with our guidance
last year to 18 2007 20 as a result of investment
made in our support operations in bmd
marketplace
north america is our largest business with over 70 of
our solutions sold direct to our customers 2 of revenues
through retail and 28 through our large network of
business partners we entered the american market in
1991 and over time have established a strong market
position in both the united states and canada we are the
market leader in canada with our simply brand and in the
united states our peachtree brand is the second largest
brand at the entrylevel our midmarket products
mas 90200500 and accpac products are amongst
some of the most popular solutions for companies
requiring deeper functionality and customisation to
manage their business processes north america has
always been our largest market for crm solutions
we have three crm solutions in our product portfolio
act sagecrm and saleslogix which all enjoy high
market awareness and strong customer satisfaction
our business
over the year we added 124000 new customers an
increase of 4 our strong portfolio of products and
services offers our customers a wide range of solutions
to meet their specific requirements such as peachtree
and peachtree quantum which offer flexibility and good
functionality to smaller and mediumsized businesses
mas 90200500 are our midmarket products offering
larger companies a high degree of customisation and
deeper functionality we also have a number of specialised
solutions to manage fixed asset registers fas and human
resources functions abra as well as products for
specialised industries including notforprofit construction
and real estate timberlinemaster builder and doctors
practices sage healthcare division sage payment
solutions is one of our newer services which is being
integrated into our peachtree and mas product ranges to
offer our customers a payment system that feeds directly
into the sales and finance functions
north america is also collaborating with our uk and
mainland europe businesses on introducing a number
of best practice initiatives combined softwaresupport
contracts were introduced last year as peachtree business
care and simply care and have experienced strong
customer demand these programmes will gradually
be extended and are expected to drive future growth
north america has also adopted the integrated product
suite concept called extended enterprise suites
both peachtree and mas can now be fully integrated
with crm fas and payment solutions in extended
enterprise suites
sage in the community
our north american employees have always
strongly supported charitable activities at a
local level this year they introduced payroll
giving with a matching employer contribution
initiated a charitable volunteer day allowing
employees a paid day off to volunteer at a
charity and volunteered in local health centres
as part of a weeklong focus on community
health as part of “sage day 2008” in which
over 50 charities benefited our people
distributed environmentally friendly shopping
bags promoted car pool programmes
planted trees and removed waste from
parks and beaches 36
0000000 18220001 36440003 54660004 72880006
00 73 146 219 292 365
0000000 4680000 9360000 14039999 18719999 23399999 00 1002 2004 3006 4008 5010 00 308 616 924 1232 1540
revenue ebita
†
customers contracts
0000000 10920000 21839999 32759999 43679999 54599998
subscription revenue software and softwarerelated
services revenue
2
19
£365m
£m
2008 365
2007 308
15
£546m
£m
2008 546
2007 477

accounting 41 a
a
b
c
d
industryspecific 10 b
hr and payroll 44 c
crm 5 d
t otal 100
revenue by sector
16
£911m
£m
2008 911
2007 785
ebita
†
margin26
£234m
£m
2008 234
2007 207
59000
501000
’000
2008 501
2007 442
35000
154000
’000
2008 154
2007 119
£
“our businesses in rest of world enjoyed another excellent
year with total revenues growing by 16 to £911m 2007
£785m and organic revenue growth of 14 our businesses
in rest of world cover a diverse geographic area with diﬀering
market conditions”
ceo asia guy berruyer pictured left including bahrain
china dubai india malaysia saudi arabia singapore
and thailand
ceo southern hemisphere ivan epstein pictured right
including australia botswana namibia and south africa
performance
rest of world – asia
and southern hemisphere
 foreign currency results for the year ended 30 september 2007 have been retranslated
based on the average exchange rates for the year ended 30 september 2008 of 197£1
andb131£1 to facilitate the comparison of results
†
earnings before interest tax and amortisation of intangible fixed assets “ebita” 37
regional results
total revenues in rest of world grew by 16 to £911m
2007 £785m organic revenue growth was 14
south africa had another impressive year with a strong
finish to the year and excellent growth in support
payroll and international products australia experienced
good revenue growth in the first half with only a slight
moderation to growth in the second half india china
and the middle east all grew strongly successfully
leveraging our existing solutions such as sage erp x3
crm products and sage accpac erp to build their
market positions
the ebita
†
margin was maintained at 26 2007 26
marketplace
our businesses in rest of world cover a diverse
geographic area with differing market conditions
south africa is one of our fastest growing businesses
driven by the rapid development of the sme community
automating their business processes and implementing
pastel accounting the market leader in south africa
through south africa we are expanding into other
businesses in african countries
in australia we are the leading supplier of payroll solutions
to smes we also have a strong position in the far east
where we are the market leader in malaysia and
singapore and have small rapidly growing businesses
in china india and the middle east which are supplying
the emerging sme community
many of our solutions in rest of world are midmarket
products and services consequently 34 of our sales are
through our business partner network direct sales through
our own sales teams comprise 64 and retail contributes 2
our business
over the year we added 59000 new customers an
increase of 13 south africa’s pastel accounting and
vip payroll continues to expand through migration and
strong customer support offerings through innovation
and a close customer relationship australia has
maintained its market leadership and developed new
solutions in construction we have wellestablished and
fastgrowing businesses in newer markets such as china
india malaysia singapore dubai and saudi arabia
smes in these emerging markets are increasingly
automating their business process using financial
accounting software our products and services are
particularly well suited to these types of markets with
large numbers of emerging smes
the market for crm solutions is less developed in
emerging markets our crm products are enjoying
rapid growth off a still nascent base providing a platform
for future growth
“india china malaysia singapore
and the middle east all successfully
leveraging our existing solutions
such as sage erp x3 crm products
and sage accpac erp to build their
market positions”
guy berruyer
“south africa hadanother impressiveyear
with strong growth in support payroll and
international products australiaexperienced
good revenue growth”
ivan epstein
sage in the community
the pastel schools programme aims to
introduce computerised accounting to every
grade 10 11 and 12 pupil in south africa to
better educate young people in financial
management skills that can increase job
opportunities and benefit industry and
commerce as more financially skilled young
people enter the workforce the programme
requires an investment of r1m per year to
support the 200 educators and 100 schools
involved across the country pastel developed
a computerised training programme which fits
with the schooling curriculum and is approved
by the south african government 38
proﬁt measures
ebita
†
to ebita
†
to
operating operating pretax pretax
profit profit profit profit eps eps
2008 2007 growth 2008 2007 growth 2008 2007 growth
£m £m  £m £m  pence pence 
disclosed measure 2998 2970 1 2734 2651 3 1444 1407 3
impact of movements in foreign
currency exchange rates – 138 – 138 – 073
2998 2832 6 2734 2513 9 1444 1334 8
amortisation of acquired intangible
assets and net development 324 280 324 280 171 149
statutory measure 2674 2552 5 2410 2233 8 1273 1185 7
“the group remains highly cash generativewith
operating cash ﬂowof £3420m representing
114 ofebit a
†
2007 112”
to see paul’s biography please go to page 44 39
overview
in the year ended 30 september 2008 revenue increased
by 12 to £12950m 2007 £11576m operating profit
increased by 5 to £2674m 2007 £2552m profit
before taxation increased by 8 to £2410m 2007
£2233m eps increased 7 to 1273p 2007 1185p
in order to assess likeforlike performance regional and
group growth trends are shown on a foreign currency
neutral basis where indicated the impact of foreign
exchange movements on profit is shown on page 38
it is sage’s policy to hedge currency exposure to cash
flows by broadly aligning the currency denominations of
our debt with the currency of the cash flows arising from
our trading activities we do not hedge pure translational
exposure resulting from conversion for accounting
purposes of overseas companies’ results into sterling
over the year we saw significant movement in foreign
currency exchange rates the average rate for the euro
strengthened 13 from £1 a148 to £1 a131 which
had a favourable translational impact on our financial
results the us dollar to sterling average rate for the year
remained broadly unchanged at £1  197 2007 198
however the us dollar appreciated rapidly near the end
of our financial year closing at 178 an appreciation of
13 against the prior year end rate this affected various
balance sheet items including valuation of our net debt
a substantial proportion of which is denominated in us
dollars and euros at 30 september 2008 net debt stood
at £5410m 2007 £5097m
revenue analysis
revenues increased 7 to £12950m 2007 £12141m
organic revenue growth for the year excluding sage
healthcare division was 6 3 including sage
healthcare division organic revenue growth in the
first half of the year was 8 excluding sage healthcare
division and was 5 including sage healthcare division
in the second half organic revenue growth was 4
excluding sage healthcare division and was 2
including sage healthcare division organic revenue
growth excludes the contributions of current year and
prior year acquisitions together 5 of total revenues
and noncore products 2 of total revenues
total revenues for software and softwarerelated services
were £5093m 2007 £4998m with organic revenue
growth of 2 excluding sage healthcare division
total subscription revenues grew by 10 to £7857m
2007 £7143m benefiting from strong organic revenue
growth in combined softwaresupport contracts
following the reclassification of our revenue categories
last year software and softwarerelated services include
standalone software licence sales including new licences
upgrades and migrations and professional services
hardware and business forms
subscription revenues are recurring in nature and include
maintenance and support 13 of total revenues
combined softwaresupport contracts 39 of total
revenues hosted products 1 of total revenues
and transaction services 8 of total revenues
ebita
†
ebita
†
increased 1 to £2998m 2007 £2970m
the group’s ebita
†
margin was reduced by 1 to
23 2007 24 due to the dilutive effects of recent
acquisitions and the announced investment in our
north america business over the year
finance expenses
net finance expenses of £264m 2007 £319m were
lower than the prior year the average interest rate on
borrowings during the year was 45 2007 48
the 2007 interest was greater due to a higher level
of average borrowings during the year following the
acquisitions made during 2006 and higher average
interest rates interest cover was in excess of ten
times increasing from eight times in the prior year
profit before taxation
statutory profit before taxation increased by 8 to £2410m
2007 £2233m and was impacted by amortisation of
acquired intangible assets and net development expenditure
of £324m 2007 £280m adjusted pretax profit rose
3 to £2734m 2007 £2651m
taxation
the tax charge of £747m 2007 £692m was greater
than the prior year reflecting the additional profits and
gives an effective rate of 31 2007 31
eps
basic earnings after amortisation per share for the year
ended 30 september 2008 increased by 7 to 1273p
2007 1185p diluted earnings per share increased by
8 to 1269p 2007 1179p adjusted earnings per
share grew 3 to 1444p 2007 1407p
dividend
our full year dividend is increased by 3 to 721p per
share 2007 700p per share with a proposed final
dividend of 478p per share 2007 573p per share
following the rebasing of our dividend policy which
was reflected in our final dividend in the second half
of the prior year
the final dividend will be payable on 6 march 2009
to shareholders on the register at close of business
on 6 february 2009
 foreign currency results for the year ended 30 september 2007 have been retranslated based on the average exchange rates for the year
ended 30 september 2008 of 197£1 andb131£1 to facilitate the comparison of results
† earnings before interest tax and amortisation of intangible fixed assets “ebita”
 pretax profit and earnings per share figures stated prior to amortisation of intangible fixed assets and after neutralisation of foreign exchange movements 40
rd and capex
the group spent £1397m in the year ended
30 september 2008 on research and development
2007 £1114m no expenditure was capitalised and
£06m was amortised to the income statement relating
to prior years’ expenditure which had been capitalised
capital expenditure in the year ended 30 september 2008
including the purchase of thirdparty software systems for
internal use was £404m 2007 £380m the majority of
this expenditure relates to it infrastructure both in new
and replacement systems
capital structure
our balance sheet at 30 september 2008 is summarised
as set out in the table below
net assets increased by 19 to £12470m 2007
£10508m and net assets per share by 17 to 95p
2007 81p the main movements in the balance sheet
items were in goodwill and intangible fixed assets
relating mainly to investment in acquisitions and the
impact of foreign currency retranslation and the
associated change in net debt see further “net debt”
and “cash flow” below
debt and facilities
net debt
the group has net debt of £5410m at 30 september
2008 2007 £5097m the balance sheet remains strong
with net debt to ebita of 18 times there has been
a significant change in the closing exchange rates used
to translate the debt at 30 september 2008 compared
to 30 september 2007 which has resulted in a foreign
exchange translation movement of £719m on the
debt drawings
the group continues to be able to borrow at competitive
rates and currently deems this to be the most effective
means of raising finance cash outflows to fund
acquisitions of £811m have therefore been funded
by debt financing
cash flow
the group remains highly cash generative with operating
cash flow of £3420m representing 114 of ebita
2007 112 after interest tax and net capital
expenditure free cash flow was £2155m the net cost
of acquisitions completed in the period was £811m
after dividends of £1062m and other movements of
£595m including exchange movements net debt stood
at £5410m at 30 september 2008 30 september 2007
£5097m
facilities cash management and gearing
the group’s acquisition programme is funded through
multicurrency revolving credit facilities totalling £850m
£200m of these facilities expire by 13 january 2011
with £100m amortising a year earlier and £650m expire
on 4 august 2011 at 30 september 2008 £5754m
had been drawn under these facilities leaving £2746m
undrawn group cash balances are invested with
institutions and in instruments with high credit ratings
treasury and risk management
the group’s treasury function seeks to reduce exposures
to interest rate foreign exchange and other financial risks
to ensure liquidity is available to meet the foreseeable
needs of the group and to invest cash assets safely and
profitably the group does not engage in speculative
trading in financial instruments and transacts only in
relation to underlying business requirements the group’s
treasury policies and procedures are periodically reviewed
and approved by the audit committee and are subject to
regular group internal audit review
the group’s exposure to and management of capital
liquidity credit interest rate and foreign currency risk are
summarised below further detail can be found in note 16
of the accounts
capital risk
the group’s objectives when managing capital defined
as net debt plus equity are to safeguard the group’s ability
to continue as a going concern in order to provide returns
to shareholders and benefits for other stakeholders while
optimising return to shareholders through an appropriate
balance of debt and equity funding the group manages
its capital structure and makes adjustments with respect
to changes in economic conditions and the strategic
objectives of the group
capital structure
assets liabilities net assets
£m £m £m
goodwill and intangible assets 20492 – 20492
property plant and equipment 1405 – 1405
current assets and liabilities 2723 64853762
retirement benefit obligations – 39 39
deferred tax 52 268 216
total before net debt 24672 6792 17880
net debt 708 6118 5410
total as at 30 september 2008 25380 12910 12470
total as at 30 september 2007 22078 11570 10508 41
liquidity risk
the group manages its exposure to liquidity risk by
reviewing the cash resources required to meet its business
objectives through both short and longterm cash flow
forecasts the group has committed bank facilities which
are available to be drawn for general corporate purposes
including working capital
the group’s treasury function has a policy of reducing the
level of cash in the businesses in order to minimise external
borrowings
credit risk
the group’s credit risk primarily arises from trade and
other receivables the group has a very low credit risk due
to the transactions being principally of a high volume low
value and short maturity the group has no significant
concentration of credit risk with the exposure spread over
a large number of counterparties and customers
the credit risk on liquid funds is considered to be low
as the audit committee approved group treasury policy
limits the value that can be invested with each approved
counterparty to minimise the risk of loss
interest rate risk
the group is exposed to cash flow interest rate risk on
floating rate bank loans and overdrafts at 30 september
2008 the group had drawn down £5754m 2007
£5623m from its committed revolving credit facility
the group regularly reviews the interest rates to mitigate
this risk which are rebased on a monthly basis and seeks
to fix interest rates on a portion of its debt when market
conditions make this desirable at 30 september 2008
all outstanding debt was held at variable rates
foreign currency risk
although a substantial proportion of the group’s revenue
and profit is earned outside the uk subsidiaries generally
only trade in their own currency the group is therefore not
subject to any significant foreign exchange transactional
exposure the group’s principal exposure to foreign
currency therefore lies in the translation of overseas
profits into sterling
this exposure is hedged to the extent that these profits
are offset by interest charges in the same currency arising
from the financing of the investment cost of overseas
acquisitions by borrowings in the same currency in light
of this limited exposure to foreign exchange risk the group
does not hold any derivative financial instruments
foreign exchange rate risk is the risk that the fair value
of future cash flows will fluctuate because of the changes
in foreign exchange rates the group’s foreign currency
exposures are principally to the us dollar and euro
the group has us dollar euro and swiss franc
denominated borrowings which it has designated as a
hedge of the net investment in its subsidiaries in the us
france spain germany and switzerland the foreign
exchange on translation of the borrowings into sterling
has been recognised in exchange reserves
the group’s other currency exposures comprise only
those exposures that give rise to net currency gains
and losses to be recognised in the income statement
such exposures reflect the monetary assets and liabilities
of the group that are not denominated in the operating
or “functional” currency of the operating unit involved
at 30 september 2008 and 30 september 2007
these exposures were immaterial to the group
going concern
based on normal business planning and control
procedures the directors have a reasonable expectation
that the company and the group have adequate
resources to continue in operational existence for
the foreseeable future for this reason the directors
continue to adopt the going concern basis in preparing
the accounts
paul harrison
finance director
analysis of borrowings bymaturityand currency
2008 2007
£m £m
due within one year
sterling 84 –
euro 53 02
other 02 01
139 03
due within one and two years
euro 02 01
due in more than two years but not more than five years
sterling 669 –
euro 2034 2359
us dollar 2906 3142
swiss franc 139 118
other 02 –
5750 5619
total 5891 5623 highlighted are some of the risks that
we face particularly focusing on those
that are considered to be speciﬁc to the
provision of business management
software and services
group risk factors
as with all businesses sage is affected by certain risks
not wholly within our control which could have a material
impact on our longterm performance and could cause
actual results to differ materially from forecast and historic
results risks also impact on nonfinancial aspects of
sage such as reputation employees and security
many of the risk factors affecting sage are considered to
be business risks which can be effectively mitigated by
ensuring appropriate controls are in place however some
of the risk factors affecting sage are inherent risks based
on our location type of business and other external factors
predominately beyond our control noted below are the
principal inherent risks that we face this section of the
report should be read in conjunction with the internal
control and risk management section of the report found
on pages 51 and 52
international factors
as an international company we face potential challenges
from economic political legal accounting and business
factors across the globe in the current economic
environment this situation has intensified we have
operations in many international markets which leads
to various risks inherent in administering the complexities
of a global business a variety of international regulatory
requirements and unexpected changes to economic
and market conditions are examples of specific risks
associated with managing an international business
any failure to maintain compliance with foreign laws or
changes in local regulations or any failure to adapt to
international market changes or local business conditions
could have a material adverse impact on our business
in current economic conditions our defensive business
model and the significant percentage of our revenue which
is recurring give comfort and support against economic
exposure as we grow through acquisitions and expand
our geographical coverage we continually review all
relevant requirements to ensure appropriate policies and
controls are developed by acquiring businesses which
are well established in their own region we rely on the
experience of local management to understand the local
regulatory environment in addition our groupwide
compliance programme seeks to ensure that local
operating companies continually manage and review
local rules and regulations
42 43
competitive environment
the market for business management solutions is
highly competitive this competition continues to grow
particularly in the sme market where barriers to entry are
relatively low attracting more companies to enter the
market many companies with which we compete or
which may enter into competition with us have greater
financial marketing and technical resources than we do
through the provision of outstanding customer support
we continue to build strong customer relationships
our strategy to develop our product and service offering
to meet local customer needs further strengthens
customer loyalty
systems and networks
our business operations rely significantly on systems
and networks any external and malicious incident on
the systems and networks could lead to misappropriation
of or damage to our proprietary information or could cause
disruption to the delivery of our products and services
critical information used in our business operations such
as customer orders customer support and accounts
receivable and payable could be disabled our reliance
on systems and networks includes internally managed
and externally provided systems and networks
we continue to invest in our internal systems and networks
and build and develop relevant recovery plans we also
continue to review our security system and network
infrastructure to ensure that wherever possible these
risks are kept to an acceptable level any externally
provided systems and networks are subject to intensive
contract negotiations and performance ability reviews to
ensure that an appropriate level of service will be
continually maintained
technology changes
technology in the software industry is constantly changing
in order to be successful within the software sector
companies must be able to adapt to changing
technologies this ability to adapt is vital in maintaining
current products attracting new customers and retaining
existing customers changing technology places demands
on employees particularly research and development
teams to stay up to date with technology changes and
customer demands continued success in developing new
products and services anticipating and reacting to
customer needs and satisfying market demand depends
on sage’s ability to adapt to changing technologies
we continue to build strong customer relationships to
develop and expand our product and service offering to
meet customer needs and to seek organic and acquisitive
growth opportunities to mitigate this ever present risk
we also seek to develop appropriate strategic direction
and maintain a knowledge of industry developments to
ensure where possible a proactive response to changing
customer requirements
intellectual property
we rely on intellectual property laws including laws
on copyright patents trade secrets and trademarks
to protect our products however despite laws and
regulations being in place unauthorised copies of software
still exist in addition the internet increases and provides
new methods for illegal copying of the technology used
in our products and services
while relying as other companies do on the laws
and regulations in existence we continually police the
unauthorised use of our products we also ensure secure
storage of our source code throughout the group
foreign exchange and treasury
although a substantial proportion of sage’s revenue and
profit is earned outside the uk subsidiaries generally only
trade in their own currency sage is not subject to any
significant foreign exchange transactional exposure
sage’s principal exposure to foreign currency therefore
lies in the translation of overseas profits into sterling
this exposure is hedged to the extent that these profits
are offset by interest charges in the same currency arising
from the financing of the investment cost of overseas
acquisitions by borrowing in the same currency in light
of this limited exposure to foreign exchange risk sage
does not hold any derivative financial instruments
sage has some exposure to interest rate volatility and
seeks to fix interest rates on a proportion of its debt when
market conditions make this desirable all outstanding
debt is currently held at variable interest rates 44
tony hobson 61
chairman nonexecutive director
tony is the chairman of northern foods plc and a non
executive director of glas cymru and hbos plc he was
previously group finance director of legal and general
group plc for 14 years retiring in 2001 he is a graduate
of the darden graduate school of business university
of virginia he joined the board in june 2004 becoming
chairman in may 2007
paul walker 51
chief executive
paul joined sage as company accountant in 1984 having
previously trained as a chartered accountant with arthur
young he was appointed finance director in 1987 and
became chief executive in 1994 in may 2002 paul was
appointed to the board of diageo plc as a nonexecutive
director
paul harrison 44
finance director
a chartered accountant paul joined sage from price
waterhouse where he was a senior manager responsible
for the provision of audit and advisory services to larger
private and public companies to become group financial
controller in 1997 he joined the board as group finance
director in april 2000 in may 2007 paul was appointed
to the board of hays plc as a nonexecutive director
paul stobart 51
ceo uk  ireland
after qualifying as a chartered accountant with price
waterhouse paul spent five years in corporate finance
with hill samuel before joining interbrand an international
marketing services consultancy in 1988 he joined
sage in 1996 as business development director
becoming managing director of uk  ireland in june
2003 in july 2003 paul was appointed to the board
of capital  regional plc as a nonexecutive director
tamara ingram
paul walker tim ingram
tony hobson
paul harrison ruth markland
paul stobart ian mason
mark rolfe guy berruyer
david clayton 45
guy berruyer 57
ceo mainland europe and asia
guy was a director of bull and claris before joining
intuit as country manager and then european director
he joined sage in 1997 to run its french business and
was appointed to the board in january 2000 as well
as mainland europe guy is also responsible for our
operations in asia
david clayton 51
group strategy and mergers
and acquisitions director
after a career in senior executive roles at a number of
international technology companies david joined bzw
in 1995 where after its merger with csfb in 1997
he was managing director and head of european
technology research until 2004 he joined the board
in june 2004 as a nonexecutive director before taking
up his current executive role on 1 october 2007
tamara ingram 48
independent nonexecutive director
tamara who joined the board in december 2004 is
responsible for wpp plc’s procter  gamble business
worldwide she is also executive vice president executive
managing director of grey global chairman of visit
london and sits on the development board for the royal
court theatre prior to grey tamara was president of the
henley centre and marketing insights company added
value previously tamara worked at saatchi and saatchi
for 15 years rising to the role of chairman and chief
executive officer of saatchi and saatchi uk
tim ingram 61
independent nonexecutive director
tim is chief executive of caledonia investments plc
he was formerly managing director of business
to business banking at abbey national plc he is a
nonexecutive director of savills plc and of anz bank
europe ltd and was appointed to the group board
in march 2002 becoming senior independent director
on 25 july 2007
ruth markland 55
independent nonexecutive director
ruth is a nonexecutive director of standard chartered plc
and chairman of the board of trustees of wrvs she was
formerly managing partner asia for the international law
firm freshfields bruckhaus deringer and was appointed to
the group board in september 2006
ian mason 46
independent nonexecutive director
ian joined the board on 1 november 2007 after working
with mckinsey  co and boston consulting group he
joined electrocomponents plc in 1995 as director of
business development becoming group chief executive
in july 2001 he holds an mba from insead
mark rolfe 50
independent nonexecutive director
after qualifying as a chartered accountant with coopers
and lybrand mark joined gallaher group plc in 1986
where he was finance director for seven years before
retiring in 2007 he is also a nonexecutive director of
hornby plc and barratt developments plc and joined
the board on 1 december 2007
advisers
registered office
north park newcastle upon tyne
ne13 9aa
the sage group plc
registered number 2231246
wwwsagecom
contact details
financial advisers
deutsche bank
1 great winchester street london ec2n 2eq
corporate brokers
deutsche bank
1 great winchester street london ec2n 2eq
regional brokers
brewin dolphin securities limited
commercial union house 39 pilgrim street
newcastle upon tyne ne1 6rq
solicitors
allen  overy llp
one bishops square london e1 6ad
principal bankers
lloyds tsb bank plc
corporate banking 1st floor
3132 park row leeds ls1 5jt
independent chartered accountants
and registered auditors
pricewaterhousecoopers llp
89 sandyford road
newcastle upon tyne ne1 8hw
registrars
equiniti
the causeway worthing
west sussex bn99 6da  
directors’ report 
for the year ended 30 september 2008 
46 
the directors present their report and the audited financial statements for 
the year ended 30 september 2008 
principal activities 
the group’s principal activities during the year continued to be the 
development distribution and support of business management  
software and related products and services for mediumsized and  
smaller businesses 
business review 
the group achieved a profit before taxation of £2410m on revenue  
of £12950m 
the business review including key performance indicators can be found 
on pages 6 to 43 and is incorporated in this directors’ report by reference 
disclaimer 
the purpose of this annual report is to provide information to the 
members of the company this annual report has been prepared for 
and only for the members of the company as a body and no other 
persons the company its directors and employees agents or advisers 
do not accept or assume responsibility to any other person to whom this 
document is shown or into whose hands it may come and any such 
responsibility or liability is expressly disclaimed the annual report 
contains certain forwardlooking statements with respect to the 
operations performance and financial condition of the group by their 
nature these statements involve uncertainty since future events and 
circumstances can cause results and developments to differ materially 
from those anticipated the forwardlooking statements reflect knowledge 
and information available at the date of preparation of this annual report 
and the company undertakes no obligation to update these forward
looking statements nothing in this annual report should be construed  
as a profit forecast 
results and dividends 
the results for the year and the amount transferred to reserves are set  
out on page 66 dividends paid and proposed are set out on page 78  
the board proposes a final dividend of 478p per share 2007 573p  
per share taking the proposed full year dividend to 721p per share  
2007 700p per share 
research and development 
during the year the group invested £1397m 2007 £1114m in 
research and development this has resulted in the release of a number 
of new and updated products and features as referred to in the business 
review on pages 6 to 43 
charitable contributions and political donations 
during the year within the uk charitable contributions totalling  
£148000 were made which included £60000 to the tyne and wear 
community foundation £20000 to the community foundation for 
greater manchester £20000 to the berkshire community foundation 
and a total of £48000 smaller contributions to numerous charities  
the rest of the group made charitable contributions totalling £137000 
no political donations were made in the year 
directors and their interests 
a list of directors their interests in the ordinary share capital of the 
company and details of their options over the ordinary share capital of  
the company are given in the remuneration report on pages 54 to 65  
no director had a material interest in any significant contract other than  
a service contract or contract for services with the company or any  
of its subsidiaries at any time during the year 
as at the date of this report indemnities are in place under which the 
company has agreed to indemnify the directors of the company and  
the former directors of the company who held office during the year 
ended 30 september 2008 to the extent permitted by law and by the 
company’s articles of association in respect of all liabilities incurred in 
connection with the performance of their duties as a director of the 
company or its subsidiaries copies of these indemnities are available  
for review at the registered office of the company 
employment policy 
the group continues to give full and fair consideration to applications for 
employment made by disabled persons having regard to their respective 
aptitudes and abilities the policy includes where practicable the 
continued employment of those who may become disabled during their 
employment and the provision of training and career development and 
promotion where appropriate the group has continued its policy of 
employee involvement by making information available to employees on 
matters of concern to them many employees are stakeholders in the 
business through participation in share option schemes further details  
of employment policies are given on pages 24 and 25 
creditor payment policy 
given the international nature of its operations the group does  
not operate a standard code in respect of payments to suppliers 
subsidiary operating companies are responsible for agreeing the terms 
and conditions under which business transactions with their suppliers are 
conducted including the terms of payment it is the group’s policy that 
payments to suppliers are made promptly in accordance with these 
terms creditor days for the group have been calculated at 40 days 
2007 40 days 
substantial shareholdings 
at 17 december 2008 the company had been notified in accordance 
with the disclosure and transparency rules of the following interests in 
the ordinary share capital of the company 
name 
direct
shares 
indirect  
shares 
total
shares 
invesco plc – – 129837372 992 129837372 992
baillie  
gifford  co – – 124221242 952 124221242 952
aviva plc 65471319 500 25990149 198 91461468 698
   
47
future developments 
the group’s future developments are described in the business review  
on pages 6 to 43 
additional information for shareholders 
following the implementation of the eu takeover directive into uk  
law the following description provides the required information for 
shareholders where not already provided elsewhere in this report  
this summary is based on the company’s current articles of association 
the “current articles” but please note that it is proposed that the 
company will adopt new articles of association the “new articles” with 
effect from the conclusion of the annual general meeting on tuesday  
3 march 2009 brief details of which are set out in the circular containing 
the notice of annual general meeting 
share capital 
the company has a single class of share capital which is divided into 
ordinary shares of 1p each 
rights and obligations attaching to shares 
voting in a general meeting of the company subject to the provisions of 
the current articles and to any special rights or restrictions as to voting 
attached to any class of shares in the company of which there are none 
• on a show of hands a qualifying person being an individual who  
is a member of the company a person authorised to act as the 
representative of a corporation or a person appointed as a proxy  
of a member shall have one vote and 
• on a poll every member who is present in person or by proxy shall 
have one vote for every share of which he or she is the holder 
no member shall be entitled to vote at any general meeting or class 
meeting in respect of any shares held by him or her if any call or other 
sum then payable by him or her in respect of that share remains unpaid 
currently all issued shares are fully paid  
deadlines for voting rights full details of the deadlines for exercising 
voting rights in respect of the resolutions to be considered at the annual 
general meeting to be held on 3 march 2009 are set out in the notice of 
annual general meeting 
dividends and distributions subject to the provisions of the 
companies act 1985 and the companies act 2006 the “companies 
acts” the company may by ordinary resolution declare a dividend  
to be paid to the members but no dividend shall exceed the amount 
recommended by the board  
the board may pay interim dividends and also any fixed rate dividend 
whenever the financial position of the company in the opinion of the 
board justifies its payment all dividends shall be apportioned and paid 
pro rata according to the amounts paid up on the shares 
liquidation if the company is in liquidation the liquidator may with the 
authority of a special resolution of the company and any other authority 
required by the statutes as defined in the current articles 
• divide among the members in specie the whole or any part of the 
assets of the company or 
• vest the whole or any part of the assets in trustees upon such trusts 
for the benefit of members as the liquidator with the like authority  
shall think fit 
transfer of shares 
subject to the current articles any member may transfer all or any of  
his or her certificated shares by an instrument of transfer in any usual  
form or in any other form which the board may approve the board may 
in its absolute discretion decline to register any instrument of transfer  
of a certificated share which is not a fully paid share or on which the 
company has a lien the board may also decline to register a transfer of  
a certificated share unless the instrument of transfer is i left at the office 
or at such other place as the board may decide for registration and  
ii accompanied by the certificate for the shares to be transferred and 
such other evidence if any as the board may reasonably require to prove 
the title of the intending transferor or his or her right to transfer the shares 
the board may permit any class of shares in the company to be  
held in uncertificated form and subject to the current articles title to 
uncertificated shares to be transferred by means of a relevant system  
and may revoke any such permission registration of a transfer of an 
uncertificated share may be refused where permitted by the statutes  
as defined in the current articles 
repurchase of shares 
the company obtained shareholder authority at the last annual general 
meeting held on 28 february 2008 to buyback up to 130416015 
ordinary shares which remains outstanding until the conclusion of the 
next annual general meeting on 3 march 2009 the minimum price  
which must be paid for such shares is 1p and the maximum price 
payable is the higher of 5 above the average of the midmarket price  
of the ordinary shares of the company as derived from the london  
stock exchange daily official list for the five business days immediately 
before the purchase is made and the amount stipulated by article 51  
of the buyback and stabilisation regulation 2003 in each case exclusive 
of expenses 
amendment of the company’s articles of association 
any amendments to the company’s articles of association may be made 
in accordance with the provisions of the companies act 1985 by way of 
special resolution 
appointment and replacement of directors 
directors shall be no less than two and no more than 15 in number 
directors may be appointed by the company by ordinary resolution or by 
the board a director appointed by the board holds office only until the 
next following annual general meeting and is then eligible for election by 
the shareholders the board may from time to time appoint one or more 
directors to hold employment or executive office for such period subject 
to the companies acts and on such terms as they may determine and 
may revoke or terminate any such appointment 
at every annual general meeting of the company any director in office 
who a has been appointed by the board since the previous annual 
general meeting or b at the start of business on the date which is  
30 clear days prior to the date of the notice convening the annual general 
meeting had held office for more than 30 months since he or she was 
elected or last reelected shall in either case retire from office but shall be 
eligible for election or reelection by the shareholders the company may 
by special resolution or by ordinary resolution of which special notice has 
been given remove and the board by unanimous decision may remove 
any director before the expiration of his term of office the office of 
director shall be vacated if i he or she resigns ii he or she is or may  
be suffering from a mental disorder iii he or she is absent without 
permission of the board from meetings of the board for six consecutive 
months and the board resolves that his or her office is vacated iv he or 
she becomes bankrupt or compounds with his or her creditors generally 
v he or she is prohibited by law from being a director or vi he or she is 
removed from office pursuant to the current articles   
 
48 
powers of the directors 
the business of the company will be managed by the board who  
may exercise all the powers of the company subject to the provisions  
of the company’s memorandum of association the current articles  
the companies acts and any ordinary resolution of the company  
shares held in the employee benefit trust 
the trustee of the sage group plc employee benefit trust “ebt” has 
agreed not to vote any shares held in the ebt at any general meeting  
if any offer is made to shareholders to acquire their shares the trustee will 
not be obliged to accept or reject the offer in respect of any shares which 
are at that time subject to subsisting awards but will have regard to the 
interests of the award holders and will have power to consult them to 
obtain their views on the offer subject to the above the trustee may take 
the action with respect to the offer it thinks fair 
significant agreements 
the following significant agreements contain provisions entitling the 
counterparties to exercise termination or other rights in the event of  
a change of control of the company 
• under a £200000000 bilateral credit facility agreement dated  
18 january 2006 between amongst others the company and lloyds 
tsb bank plc as facility agent on a change of control if the majority 
lenders so require and after having consulted with the company in 
good faith for not less than 30 days following the change of control  
the facility agent shall by not less than 10 business days notice to  
the company cancel the facility and declare all outstanding loans 
together with accrued interest and all other amounts accrued under 
the finance documents immediately due and payable and 
• under a £650000000 multicurrency revolving credit facility 
agreement dated 4 august 2006 between amongst others the 
company and lloyds tsb bank plc as facility agent on a change  
of control if the majority lenders so require and after having consulted 
with the company in good faith for not less than 20 days following the 
change of control the facility agent shall by not less than 10 business 
days notice to the company cancel the facility and declare all 
outstanding loans together with the accrued interest and all other 
amounts accrued under the finance documents immediately due  
and payable 
under the terms of both credit facility agreements a “change of control” 
occurs if any person or group of persons acting in concert gains control  
of the company 
the business review does not contain any information about persons with 
whom the company has contractual or other arrangements which are 
essential to the business of the company as in the directors view there 
are no such arrangements 
by order of the board  
m j robinson  
secretary  
17 december 2008   
corporate governance statement 
 
49
the company and the group are committed to high standards of 
corporate governance and the board is accountable to the company’s 
shareholders for good corporate governance this statement describes 
how the relevant principles of corporate governance are applied by the 
company throughout the year the company has been in compliance 
with the provisions set out in the revised combined code 2006 on 
corporate governance issued by the financial reporting council the 
“combined code” other than a32 relating to the composition of the 
board and c31 relating to the composition of the audit committee  
of the board 
rule a32 requires at least half the board not counting the chairman  
to comprise nonexecutive directors determined by the board to be 
independent for the period from the resignation of sir julian hornsmith 
and the appointment of mr a j hobson to the role of acting chairman  
of the board on 27 april 2007 to the appointment to the board of  
mr m e rolfe on 1 december 2007 this ratio was not maintained  
there were a number of changes to the board during the year which 
made compliance difficult to achieve for a short period however the 
board took steps to mitigate this noncompliance by immediately 
appointing executive search consultants to identify new nonexecutive 
candidates with the appointment of mr rolfe on 1 december 2007 the 
company was again fully compliant with the rule 
rule c31 requires the audit committee of the board to comprise  
all independent nonexecutive directors from his appointment on  
27 april 2007 to the role of acting chairman of the board mr a j hobson 
who was chairman of the audit committee at that time ceased to be 
independent for the purposes of that rule and the company therefore 
ceased to comply during this period the company considered it 
appropriate for mr hobson to continue to chair the committee whilst the 
search for a successor was undertaken mr m e rolfe was appointed  
to the board on 1 december 2007 and joined its audit committee  
mr rolfe whose biography appears on page 45 took over the role of 
chair of the audit committee on 1 april 2008 and mr hobson retired  
from the committee at that time the company therefore is again fully 
compliant with rule c31 
the workings of the board and its committees  
the board 
the board currently comprises the nonexecutive chairman the chief 
executive four other executive directors and five other independent non
executive directors the roles of the chairman and the chief executive  
are quite distinct from one another and are clearly defined in written  
terms of reference for each role adopted by the board and available to 
shareholders on request to the secretary at the registered office and on 
the company’s website at wwwsagecom 
the directors’ biographies appear on pages 44 and 45 these 
demonstrate that the directors have a range of experience and are of 
sufficient calibre to bring independent judgement on issues of strategy 
performance resources and standards of conduct which is vital to the 
success of the group all directors are subject to reelection at least every 
three years  
the board is responsible to shareholders for the proper management of 
the group where it is considered appropriate training is made available 
to directors and training needs are assessed as part of the evaluation 
procedure of the board referred to below a statement of the directors’ 
responsibilities in respect of the accounts is set out on pages 52 and 53  
the board has formally adopted a schedule of matters specifically 
reserved to it for decision which is available to shareholders on request to 
the secretary at the registered office and which is also available on the 
company’s website at wwwsagecom all directors have access to the 
advice and services of the secretary who is responsible to the board for 
ensuring that board procedures are followed and that applicable rules 
and regulations are complied with the secretary ensures that the 
directors take independent professional advice as required at the expense 
of the company when it is judged necessary to discharge their 
responsibilities as directors the appointment and removal of the 
secretary is a matter for the board as a whole  
the board meets formally not less than six times a year reviewing  
trading performance ensuring adequate funding setting and monitoring 
strategy examining major acquisition opportunities and reviewing regular 
reports to shareholders in the year under review the board met on ten 
occasions six such meetings being formal board meetings with a further 
four meetings of the board called at short notice and held by telephone 
all directors in office at the time attended all of these board meetings 
other than ms r markland who was unable to attend one meeting and 
each of messrs stobart and walker and ms ingram and markland who 
were unable to attend meetings called on short notice on one occasion 
the nonexecutive directors have a particular responsibility to ensure that 
the strategies proposed by the executive directors are fully considered  
to enable the board to discharge its duties all directors receive 
appropriate and timely information briefing papers are distributed by the 
secretary to all directors in advance of board meetings the members of 
the board have evaluated the performance of the board its committees 
and individual members at meetings and also through the completion  
of detailed questionnaires these are reviewed and considered by the 
chairman and by the board as a whole in the year under review the 
questionnaires indicated no areas of concern 
the current board complies with the main principle in paragraph a3  
of the combined code in that it includes a balance of executive and  
nonexecutive directors so that no individual or small group of individuals 
can dominate the board’s decision taking 
new members of the board undergo a full formal and tailored induction  
to the board mr i mason and mr m e rolfe who were appointed to the 
board on 1 november 2007 and 1 december 2007 respectively have 
undertaken such an induction process 
the chairman 
the terms of reference for the chairman of the board ensure that this role 
is quite distinct from that of the chief executive and are set out on the 
company’s website at wwwsagecom 
the chairman of the board has held meetings with the nonexecutive 
directors without the executive directors in addition the nonexecutive 
directors have met without the chairman present to appraise the 
chairman’s performance the chairman also ensures that shareholder 
communication and responses are discussed at each meeting of the 
board and that all shareholders have access to the nonexecutive 
directors through a request to the chairman or the secretary 
the senior independent director 
the board has appointed mr t c w ingram to the role of senior 
independent director this role provides a point of contact for those 
shareholders who wish to raise issues with the board other than through 
the chairman he is available to consult with shareholders and also chairs 
meetings of the nonexecutive directors without the chairman present 
committees of the board 
committees of the board deal with certain specific aspects of the  
group’s affairs these committees are the remuneration committee  
the audit committee and the nomination committee details of all these 
committees are set out below whilst the board notes that a number of 
independent nonexecutive directors are members of more than one 
board committee it is considered that membership is appropriate in light 
of the board’s policy that all independent nonexecutive directors are 
given the opportunity to take part in the discussions of those committees   
 
50 
the terms of reference of the remuneration nomination and audit 
committees are reviewed annually and are available on request from the 
secretary at the registered office of the company or on the company’s 
website at wwwsagecom 
remuneration committee 
the group’s remuneration committee is chaired by mr t c w ingram 
and its other members are the chairman of the board mr a j hobson 
and the other independent nonexecutive directors ms t ingram  
ms r markland mr i mason who joined the committee on 1 november 
2007 and mr m e rolfe who joined the committee on 1 december 
2007 under its terms of reference the committee meets at least twice a 
year in the year under review five meetings of the committee were held 
on full notice with a further meeting held at short notice all members  
in office at the time attended all the meetings other than ms markland  
who was unable to attend one meeting held on short notice the chief 
executive may by invitation of the committee attend meetings except 
when his own performance and remuneration are under review but he  
is not a member of the committee the committee is responsible for 
making recommendations to the board within agreed terms of reference 
on the company’s framework of executive remuneration and its cost  
the committee determines the contract terms remuneration and other 
benefits for each of the executive directors including share options 
performance share awards performancerelated bonus schemes 
pension rights and compensation payments remuneration consultants 
advise the committee the committee also monitors remuneration for 
those senior executives below board level  
the board itself determines the remuneration of the nonexecutive 
directors the secretary acts as secretary to the committee 
details of the company’s policies on directors’ remuneration are given in 
the remuneration report on pages 54 to 65 together with further details 
of the remuneration committee 
audit committee 
the audit committee was chaired by mr a j hobson until 1 april 2008 
when mr m e rolfe who joined the committee on 1 december 2007 
became its chair and mr hobson retired from the committee its other 
members are independent nonexecutive directors mr t c w ingram  
ms r markland and mr i mason who joined the committee on  
1 november 2007 ms t ingram joined the committee on 1 october 
2008 mr hobson and mr rolfe are both fellows of the institute of 
chartered accountants in england and wales and are considered by the 
board to have the recent and relevant financial experience required for the 
provisions of the combined code the other members of the committee 
have a wide range of business experience which is evidenced in their 
biographies on pages 44 and 45 the board makes appointments to  
the committee and the company secretary acts as secretary to the 
committee full induction training is provided for new members and 
additional training is provided as and when required 
the main duties of the committee set out in its terms of reference are to  
• make recommendations on the appointment and remuneration of 
external auditors and to monitor their performance and independence 
• approve and monitor the policy for nonaudit services provided by the 
external auditors to ensure that the independence of the auditors is  
not compromised 
• review and advise the board on the company’s interim and annual 
financial statements its accounting policies and on the control and 
mitigation of its financial and business risks 
• review the nature and scope of the work to be performed by the 
external and internal auditors the results of their audit work and of the 
response of management and 
• review and advise the board on the effectiveness of the company’s 
internal control environment including its “whistleblowing” procedures 
meetings 
the committee invites executive directors management external and 
internal auditors to attend meetings as it considers appropriate for the 
matters being discussed 
work of the committee 
in the financial year the audit committee met on four occasions with  
all members present on each occasion and reported its conclusions to  
the board it met privately with the internal and external auditors without 
executives present it also met with executive management and  
executive directors  
the committee discharged its obligations in respect of the financial year 
as follows 
• financial reporting during the year the committee reviewed the 
interim and annual financial statements the committee received  
a report from the external auditors setting out the accounting or 
judgemental issues which required its attention the auditors’ reports 
were based on a full audit annual report and a high level review 
interim report respectively  
• internal controls and risk management the committee considers 
reports from internal audit on the operation of and issues arising from 
the group’s internal control procedures together with observations 
from the external auditors the committee monitors the effectiveness 
of the group’s risk management process which considers the key 
risks both financial and nonfinancial facing the group and the 
effectiveness of the group’s controls to manage and reduce the 
impact of those risks 
• internal audit internal audit activities and responsibilities are provided 
by kpmg under an outsourcing agreement the group’s risk 
director provides oversight and coordination of internal audit but 
internal audit has a direct reporting line to the audit committee and  
its chairman this ensures its independence an internal audit charter 
is also in place which outlines the objectives authority scope and 
responsibilities of internal audit performance against this charter is 
reviewed on an ongoing basis 
it is the role of internal audit to advise management and the board  
on the extent to which systems of internal control are effective  
the internal audit plan which covers the scope authority and 
resources of the function is determined through a structured  
process of risk assessment and is approved by the audit committee 
the nature and scope of the work of the internal audit team was 
reviewed and approved the reports of results received and the 
responses of management considered the plan set out at the 
beginning of the year was achieved and the outcome of the work  
was in line with expectations 
• external audit the audit committee is responsible for the 
development implementation and monitoring of the group’s policy  
on external audit  
the policy assigns oversight responsibility for monitoring the 
independence objectivity and compliance with ethical and regulatory 
requirements to the audit committee and day to day responsibility to 
the group finance director 
to assess the effectiveness of the external auditors the audit 
committee reviewed 
– the external auditors’ fulfilment of the agreed audit plan and any 
variations 
– the robustness and perceptiveness of the auditors in their handling 
of key accounting and audit judgements and 
– the content of the external auditors’ internal control report   
51
the current external auditors were appointed to that role in 1988  
the committee has determined that formal consideration of a tender 
process will be undertaken every five years with the next such review 
taking place in the financial year ending in september 2009 there are  
no contractual restrictions on the choice of the committee as to external 
audit and having considered the services provided by the current  
external auditors their independence and knowledge of the group  
the committee has determined to recommend to the board the 
reappointment of the auditors at the annual general meeting in  
march 2009 in reaching this decision the committee also had  
regard to the likelihood of a withdrawal of the auditor from the market  
the scope fee performance and independence of the external auditor  
is considered annually by the audit committee  
the committee is confident that the objectivity and independence of  
the auditors is not impaired in any way by reason of their nonaudit  
work and has adopted controls to ensure that this independence is not 
compromised these controls include the continued monitoring of the 
independence and effectiveness of the audit process  
audit partners are rotated every five years and a formal statement  
of independence from the external auditors is received each year  
in addition the audit committee has adopted a specific policy on auditor 
independence drawing together the various existing group policies in this 
area this policy requires that there is full consideration of independence 
issues before any appointment of an employee or former employee of the 
auditor to a position with the group it expressly states that the group will 
not engage the auditors to undertake any work that could threaten the 
independence of the auditors and prohibits the group from engaging the 
auditors to undertake certain types of service such as amongst others 
human resources services legal and actuarial services 
the committee believes that the company receives particular benefit  
from tax advice provided by its auditors given their wide and detailed 
knowledge of the group and its very international nature executive 
management has the discretion subject to certain financial limitations  
to obtain taxation services from the auditors without prior reference to the 
audit committee subject to regularly appraising the audit committee of 
the amount and nature of fees for such services where these financial 
limitations are exceeded the approval of the audit committee is required 
for such appointment the group also receives taxation advice from other 
large accountancy practices as and when appropriate  
nonaudit services other than in relation to taxation may be undertaken 
by the external auditors subject to the rules referred to above and all 
projects expected to cost in excess of an amount set by the audit 
committee being approved in advance either by the chairman of the 
audit committee or by the full audit committee depending on the 
expected cost of the project the chairman of the audit committee may 
require that such projects are put out to tender to a number of firms  
it is the policy of the committee to require that acquisition due diligence  
be undertaken by firms other than the auditors unless conflicts of interest 
for comparable firms make this impractical  
at each meeting the committee receives a report from the external 
auditors providing an update on the fees for nonaudit services incurred 
since the previous meeting where the cumulative nonaudit fees 
excluding tax in the year exceeds a certain sum the prior approval of the 
audit committee is required before the external auditor undertakes any 
nonaudit work other than in relation to tax 
in the year to 30 september 2008 the audit fee was £1651000  
the company’s auditors pricewaterhousecoopers llp also perform 
nonaudit services for the group principally tax advice over and above  
the external audit the fees in relation to these services were £2025000 
of which £1819000 was attributable to tax services and tax compliance 
work and £206000 to other nontax compliance services further details 
of fees paid to auditors are set out on page 77 
the audit committee has recommended to the board that the external 
auditors are reappointed 
nomination committee 
the nomination committee is chaired by the chairman of the board  
mr a j hobson and consists of the chairman and five independent  
nonexecutive directors mr t c w ingram ms t ingram ms r markland 
mr i mason who joined the committee on 1 november 2007 and  
mr m e rolfe who joined the committee on 1 december 2007 in the 
absence of the chairman of the board the committee is chaired by the 
senior independent director the nomination committee meets not less 
than once a year four meetings of the committee took place in the year 
under review at which all the members of the committee in office at the 
time were present other than on one occasion when ms markland was 
unable to attend 
the nomination committee is responsible for a number of matters  
relating to the composition of the board and its committees including 
proposing candidates for appointment to the board having regard to its 
balance and structure and considering issues of succession recruitment 
consultants are used to assist in the process the nomination committee 
is also responsible for an annual review of the membership of the board 
evaluating the balance of skills knowledge and experience on the board 
and advising the board on any areas where further recruitment may be 
appropriate it also considers the succession planning of the group for  
key executive personnel at board level and below the secretary acts  
as secretary to the committee 
relations with shareholders 
communication with shareholders is given high priority the chairman’s 
welcome and business review on pages 2 to 43 include a detailed review 
of the business and future developments in relation to it a full annual 
report and accounts is sent to all shareholders who so wish the 
company also has a website wwwsagecom which contains up to date 
information on group activities and published financial results there is 
regular dialogue with individual institutional shareholders and there are 
presentations to analysts after the company’s announcement of the year
end and halfyear results at each board meeting the board receives an 
update on presentations to investors and any communication from 
shareholders to ensure that directors both executive and nonexecutive 
have an understanding of their views 
the board uses the annual general meeting to communicate with private 
and institutional investors and welcomes their participation 
internal control and risk management 
the board is responsible for the operation and effectiveness of the 
group’s system of internal controls and risk management there is an 
ongoing process for identifying evaluating and managing the significant 
risks faced by the group this process has been in place for the year 
under review and up to the date of approval of this report it is regularly 
reviewed by the board and complies fully with the turnbull guidance  
the internal control systems are designed to meet the group’s particular 
needs and the risks to which it is exposed and by their nature can only 
provide reasonable but not absolute assurance against misstatement or 
loss the effectiveness of this process has been reviewed by the audit 
committee which reports its findings to the board    
 
52 
the processes used by the audit committee to review the effectiveness  
of the system of internal control include discussions with management  
on significant risk areas identified and the review of plans for and results 
from internal and external audits  
the audit committee reports the results of its review of the risk 
assessment process to the board the board then draws its collective 
conclusion as to the effectiveness of the system of internal control  
the key procedures which the directors have established with a view  
to providing effective internal control are as follows 
indication of business risks 
the processes to identify and manage the key risks to the success  
of the group are an integral part of the internal control environment  
such processes which are reviewed and improved as necessary  
include strategic planning the appointment of senior managers the 
regular monitoring of performance and control over capital expenditure 
and acquisitions the company has formed a risk committee consisting  
of the chief executive group finance director the group risk director 
the secretary and certain other members of the executive committee  
the committee reviews all business activities and strategic plans to 
identify the nature and extent of the significant risks facing the group 
including those risks arising from social environmental and ethical  
issues and undertakes risk review audits in identifying significant risks to 
which the group is exposed it reviews the results of any relevant internal 
audit reviews and agrees mitigating actions when possible the risk 
committee reports to the audit committee through the work of the audit 
and risk committees the board is provided with a balanced assessment 
of the significant risks associated with the group’s operations and the 
effectiveness of the system of internal controls 
a “whistleblowing” telephone hotline service has been introduced in many 
operating companies in the group including all those in the uk and us 
allowing employees to raise issues of concern in relation to dishonesty  
or malpractice on an entirely confidential basis the audit committee 
receives regular reports on any matters raised through this service and 
monitors its use throughout the group processes for the confidential 
reporting of concerns have been introduced in france and germany and 
the group is considering the introduction of further telephone hotlines 
where local legislation permits 
quality and integrity of personnel 
the integrity and competence of personnel is ensured through high 
recruitment standards and subsequent training courses high quality 
personnel are seen as an essential part of the control environment  
management structure 
the board has overall responsibility for the group each executive director 
has been given responsibility for specific aspects of the group’s affairs  
a clearly defined organisation structure exists within which individual 
responsibilities are identified and can be monitored the management  
of the group as a whole is delegated to the chief executive and the 
executive directors the conduct of sage’s individual businesses is 
delegated to the local executive management teams these teams are 
accountable for the conduct and performance of their businesses within 
the agreed business strategy they have full authority to act subject to  
the reserved powers and sanctioning limits laid down by the board and  
to group policies and guidelines 
internal audit 
the group utilises internal audit resource supplied by kpmg to review 
compliance with procedures and assess the integrity of the control 
environment internal audit acts as a service to the businesses by 
assisting with the continuous improvement of controls and procedures 
actions are agreed in response to its recommendations and these are 
followed up by the audit committee to ensure that satisfactory control  
is maintained 
budgetary process 
a comprehensive budgeting system is in place with annual budgets for  
all operating subsidiaries being approved by respective subsidiary boards 
subsequently the combined budget is subject to consideration and 
approval by the board management information systems provide  
the directors with relevant and timely information required to monitor 
financial performance 
investment appraisal including acquisitions 
budgetary approval and defined authorisation levels regulate  
capital expenditure as part of the budgetary process the board 
considers proposals for research and development programmes 
acquisition activity is subject to internal guidelines governing investment 
appraisal criteria financial targets negotiation execution and post
acquisition management 
statement by the directors on compliance with the provisions of 
the combined code 
other than as referred to at page 49 above the company has been in  
full compliance with the provisions set out in section 1 of the combined 
code throughout the year 
going concern 
the following statement has been included in accordance with the listing 
rules based on normal business planning and control procedures the 
directors have a reasonable expectation that the company and the group 
have adequate resources to continue in operational existence for the 
foreseeable future for this reason the directors continue to adopt the 
going concern basis in preparing the accounts 
statement of directors’ responsibilities 
the directors are responsible for preparing the annual report the 
remuneration report and the group and parent company financial 
statements in accordance with applicable law and regulations  
company law requires the directors to prepare financial statements for 
each financial year under that law the directors have prepared the group 
financial statements in accordance with international financial reporting 
standards “ifrss” as adopted by the european union and the parent 
company financial statements in accordance with applicable law and 
united kingdom accounting standards uk gaap in preparing the 
group financial statements the directors have also elected to comply with 
ifrss issued by the international accounting standards board “iasb” 
the group and parent company financial statements are required by law 
to give a true and fair view of the state of affairs of the company and the 
group and of the profit or loss of the group for that period   
53
in preparing those financial statements the directors are required to 
• select suitable accounting policies and then apply them consistently 
• make judgements and estimates that are reasonable and prudent 
• state that the group financial statements comply with ifrss as 
adopted by the european union and ifrss issued by the iasb  
and with regard to the parent company financial statements that 
applicable uk accounting standards have been followed subject  
to any material departures disclosed and explained in the financial 
statements 
• prepare the group and parent company financial statements on  
the going concern basis unless it is inappropriate to presume that  
the group will continue in business in which case there should be 
supporting assumptions or qualifications as necessary 
the directors are responsible for keeping proper accounting records  
that disclose with reasonable accuracy at any time the financial position  
of the company and the group and to enable them to ensure that the 
financial statements and the directors’ remuneration report comply with 
the companies act 1985 and as regards the group financial statements 
article 4 of the ias regulation they are also responsible for safeguarding 
the assets of the company and the group and hence for taking 
reasonable steps for the prevention and detection of fraud and  
other irregularities 
each of the directors whose names and functions are listed in the board 
of directors and advisers section on pages 44 and 45 confirms that  
to the best of their knowledge 
• the group financial statements which have been prepared in 
accordance with ifrss as adopted by the eu give a true and fair view 
of the assets liabilities financial position and profit of the group and 
• the directors’ report includes a fair review of the development and 
performance of the business and the position of the group together 
with a description of the principal risks and uncertainties that it faces 
each of the persons who is a director at the time of this report  
confirms that 
• so far as the director is aware there is no relevant audit information  
of which the company’s auditors are unaware and 
• the director has taken all the steps that he or she ought to have taken 
as a director in order to make himselfherself aware of any relevant 
audit information and to establish that the company’s auditors are 
aware of that information 
this confirmation is given and should be interpreted in accordance with 
the provisions of section 234za of the companies act 1985 
by order of the board 
m j robinson 
secretary  
17 december 2008 
 
 
   
remuneration report 
 
54 
this report sets out the remuneration policy and remuneration  
details of the executive and nonexecutive directors of the company 
remuneration policy for the executive directors and the chairman of the 
board of the company is determined by the remuneration committee  
of the board of directors the “remuneration committee” and approved 
by the board remuneration policy for the nonexecutive directors  
is determined by the board excluding the nonexecutive directors  
the report has been prepared in accordance with the companies act 
1985 and also meets the requirements of the listing rules of the  
uk listing authority 
1 the remuneration committee 
11 composition of the remuneration committee 
the remuneration committee consists of nonexecutive directors 
considered by the board to be independent and the chairman of  
the board who was independent on appointment to the board  
it works within detailed terms of reference copies of which are available 
on request from the secretary and on the company’s website at 
wwwsagecom its role includes making recommendations to the board 
on remuneration policy for executive directors and the chairman who 
does not participate in discussions relating to his own remuneration 
defining the remuneration packages of executive directors and the 
chairman together with any compensation payments to them and 
approving the remuneration report the committee also considers the 
remuneration policy of the company for senior executives of the group 
other than members of the board and seeks to maintain consistency  
in the approach to remuneration policy the current members of  
the remuneration committee are mr t c w ingram chairman  
mr a j hobson ms t ingram ms r markland mr i mason and  
mr m e rolfe 
all the members of the committee have been members of the committee 
throughout the year other than mr i mason who joined the committee  
on 1 november 2007 and mr m e rolfe who joined the committee on  
1 december 2007  
12 advisers to the remuneration committee 
the remuneration committee keeps itself fully informed of developments 
and best practice in the field of remuneration and it seeks advice from 
external advisers when it considers it appropriate in order to be aware  
of market trends in remuneration and current best practice the 
remuneration committee considers market data for comparable 
businesses the remuneration committee has received advice from 
deloitte and hewitt new bridge street consultants llp “hnbsc”  
both independent firms of remuneration consultants appointed after 
consultation with the board the terms of engagement of deloitte  
and hnbsc are available on request from the secretary deloitte and 
hnbsc were appointed by the committee and provide no services to the 
group other than advice on executive remuneration to the remuneration 
committee and in the case of deloitte advice to the group’s north 
american business on a software implementation programme and advice 
in relation to the audit of its polish subsidiary ms k geary director of 
human resources and corporate communications ms r fyffe director 
of performance and reward and mr m j robinson secretary have 
provided advice or services to the remuneration committee that 
materially assisted it in its consideration of matters relating to directors’ 
remuneration for the financial year the chief executive ms k geary  
ms r fyffe and mr m j robinson have following the invitation of the 
committee attended certain of its meetings however they were not 
present at any meeting when any matter relating directly to their own 
remuneration was discussed nor did they advise in any way in relation  
to their own remuneration 
2 remuneration policy 
21 general remuneration policy 
the remuneration committee in setting remuneration policy recognises 
the need to be competitive in an international market the committee’s 
policy is to set remuneration levels which ensure that the executive 
directors are fairly and responsibly rewarded in return for high levels of 
performance remuneration policy is designed to support key business 
strategies and to create a strong performanceorientated environment  
at the same time the policy must attract motivate and retain talent 
accordingly executive directors receive base salaries comparable  
with companies of a similar size and international scope and have  
the opportunity to earn enhanced total remuneration for meeting the 
performance targets set by the committee in setting remuneration  
levels for the executive directors the committee takes account of the 
remuneration policy and practice applicable to other group employees 
the components of remuneration for executive directors are base salary  
a fixed sum payable monthly which is reviewed annually benefits 
including car allowance and noncontributory health insurance an annual 
bonus with a deferred element to encourage director shareholdings 
longterm incentives comprising performance share plan awards and 
pension contributions 
the remuneration committee considers that a successful remuneration 
policy must ensure that a significant part of the remuneration package is 
linked to the achievement of stretching corporate performance targets 
performancerelated elements for the year ended 30 september 2008 
comprise performance share plan awards share options and annual 
bonus the policy adopted by the committee ensures that a significant 
proportion of the remuneration of executives is aligned with corporate 
performance generating a strong alignment of interest with shareholders 
as a result significantly over half of the executive directors’ potential 
remuneration package is performancerelated policy on performance
based incentives for the forthcoming year is discussed below 
22 policy on salary of executive directors 
it is the policy of the committee to pay base salaries to the executive 
directors at broadly market rates compared with those of executives of 
companies of a similar size and international scope in particular those 
within the ftse 50–150 with more than 50 of revenue derived from 
overseas whilst also taking into account the executive directors’ 
individual performance and the performance of the group in the year 
ending 30 september 2009 salaries of executive directors have been 
increased by between 4 and 5 from those disclosed in this report  
in line with comparator information from the time of the review  
23 policy on fees of nonexecutive directors 
the fees of the nonexecutive directors are reviewed every two years  
for the two financial years ending on 30 september 2008 the basic  
fee for directors was £40000 an additional fee of £5000 and £7000 
was paid for membership of the remuneration and audit committees 
respectively and further payments were made to the chair of each of 
these committees £6000 and £8000 for chairing the remuneration  
and audit committees respectively a further payment of £4000 was 
made each year to the senior independent director  
for the two financial years ending 30 september 2010 the basic fee  
has been increased to £55000 but committee membership fees will  
no longer be paid the chairmanship fees will be increased to £13000 
and £17000 for the remuneration and audit committees respectively 
the payment to the senior independent director will be increased  
to £10000   
55
in relation to the chairman of the board it is the policy of the board  
for remuneration to be comparable to that of the median fees for  
nonexecutive chairs of companies of a comparable size and complexity  
the chairman’s remuneration will next be reviewed in 2010  
nonexecutive directors are not entitled to participate in any bonus  
longterm incentive or pension schemes 
24 policy on bonus 
the bonus in the case of executive directors and indeed all employees  
is designed to reward outstanding performance 
bonus is linked to demanding strategic targets for the group and for the 
individual operating companies the meeting or outperformance of which 
is a significant achievement the committee considers the targets each 
year and selects those which it considers to be drivers of shareholder 
value bonus payable to executive directors for ontarget performance  
is 75 of salary with maximum bonus potential of 125 of salary 
bonuses above ontarget level represent superior performance against 
one or more measures at the end of each year the remuneration 
committee assesses the degree to which the targets have been met 
the requirement to defer bonus into shares applies only to those 
executive directors who have not yet met the shareholding policy of the 
board see paragraph 27 below 
for the financial year to 30 september 2008 the cash multiplier which 
had previously applied was removed and individual strategic objectives 
were introduced  
for the financial year to 30 september 2009 executive directors with no 
specific divisional responsibility will have 75 of their bonus based on 
group profit before tax and amortisation this replaces eps as the main 
earnings measure now that eps growth will be the primary measure in 
the longterm incentives see paragraph 25 below the remaining 25 
will be based on individual strategic objectives for regional ceos 25  
of bonus is based on group profit before tax and amortisation 50  
on ebita of the relevant operating company or companies and the 
remaining 25 on individual objectives 
in respect of any bonus awarded in excess of 75 of salary 25 of  
that excess is to be satisfied in deferred shares and 75 in cash if the 
executive director has not yet achieved the target holding of shares 
equivalent to 150 of annual salary referred to below if this shareholding 
target has been achieved the bonus will be paid entirely in cash  
these shares awarded in respect of bonus which will be market 
purchased ordinary shares in the capital of the company will only be 
released after three years to the relevant executive director and will be 
generally at risk of forfeiture if the executive director leaves within the 
deferral period awards over deferred shares were made to executive 
directors as set out in the directors’ remuneration table in paragraph 5 
below 
25 policy on longterm incentives  
the committee has undertaken a widereaching review of longterm 
incentives to establish a motivational and performanceorientated 
structure that focuses on the creation of shareholder value it consulted 
with major investors and representative bodies regarding the proposed 
changes and had a constructive and positive dialogue with them  
under the new arrangements for the financial year ending 30 september 
2009 executive share options will not be granted under the 1999 
executive share option scheme “esos”  
the performance share plan “psp” will be the main longterm incentive 
vehicle for the financial year to 30 september 2009 currently psp 
awards vest depending on the company’s total shareholder return 
“tsr” performance compared with a selected group of comparator 
companies over a threeyear period however to best recognise the 
strengths of the performance conditions which have previously applied to 
the esos and psp future psp awards will vest on the following basis  
as has been the case with executive share options to date a sliding scale 
based on eps will be used 25 of the award will vest at the end of the 
period if the increase in eps exceeds rpi by 9 an average of 3 per 
year 100 of the award will vest at that time only if rpi is exceeded in 
that period by 27 an average of 9 per year between those targets 
awards will vest on a straightline basis and if those targets are not met 
there is no opportunity for retesting  
awards will then be subject to a tsr ‘multiplier’ whereby the level of 
vesting based on eps achievement will be adjusted according to tsr 
performance over the same threeyear period compared with a group of 
international software and computer services companies listed below 
• if sage’s tsr is ranked at lower quartile in the group the multiplier  
is 075  
• if sage’s tsr is ranked at median in the group the multiplier is 1 and  
• if sage’s tsr is ranked at upper quartile in the group then the 
multiplier is 15  
straightline prorating applies between 075 and 1 and between 1 and 
15 but the multiplier cannot be higher or lower than these figures 
the minimum eps growth performance required has been set at rpi3 
in light of business strategy and market expectations the committee 
considers that this level of eps growth would represent robust 
performance in the market the proportion of award that will vest for this 
level of eps growth is 25 previously 30 in the esos before tsr 
performance is considered 
the remuneration committee considers that this matrix approach to 
performance conditions is appropriately demanding at this time and 
provides the best incentive for the generation of shareholder value  
eps growth has been chosen because it requires executives to produce 
sustained improvement in the underlying performance of the group tsr 
has been chosen as it helps to align the interests of award holders with 
shareholders and complements the focus on group financial results in the 
eps condition and the annual bonus plan   
 
56 
wherever used in this remuneration report eps refers to earnings  
per share before amortisation or impairment of intangible assets 
exceptional items amounts written off investments and is on a foreign 
currency neutral basis this measure has been selected since the timing 
of acquisitions can be unpredictable with the result that the amortisation 
charge in respect of intangible assets is inherently difficult to budget  
the neutralised foreign currency basis has been selected as the board 
considers this to be consistent with the presentation and assessment of 
results by shareholders 
the comparator group for awards to be made in the year to  
30 september 2009 for tsr purposes will comprise the  
following companies  
� adobe systems � logicacmg 
� arm holdings � micro focus international 
� autonomy  � microsoft  
� blackbaud  � misys 
� cap gemini � myob 
� cegid � oracle 
� dassault systemes  � salesforcecom 
� exact  � sap 
� intuit � software ag 
� lawson software  
the committee will keep under review the comparator group to ensure 
that it remains appropriate 
for comparator companies listed overseas the tsr is calculated in  
local currency since this is considered to give a better reflection of  
the underlying performance of the comparator companies over the 
performance period the committee will continue to review whether  
this treatment is appropriate 
 
grant policy under longterm incentive plans 
the grant of awards under the psp is currently limited to shares worth up 
to 150 of base salary however shareholder approval is being sought  
at the annual general meeting in march 2009 to amend the rules of the 
psp to increase this limit to 300 of salary the reason for the increase  
is to reflect the fact that going forward longterm share incentives will be 
granted under the psp only and not under the esos it will therefore be 
necessary to have an increased individual limit under the psp although 
300 would be the permitted maximum in practice awards would be 
granted below this level 
for instance to recognise the loss of share options in the overall package 
and the need to reward superior performance with commensurate 
reward psp awards to executive directors for the year to 30 september 
2009 will have a maximum value on award of 210 of salary  
this represents a “core” award to the value of 140 of salary which if 
maximum eps growth is attained and tsr performance is ranked  
upper quartile against the comparator group could rise to 210 of salary 
ignoring share price movements subject to shareholder approval to the 
psp rule amendment the remuneration committee considers that this 
grant level is appropriate taking account of the interaction of the 
challenging performance criteria and recognising the increased 
competition for senior executives if in due course it were to become 
appropriate routinely to make awards higher than the 210 of salary 
maximum currently planned then the company will consult with its major 
investors accordingly and prior to making such awards there are 
currently no plans to increase the 210 award level 
awards under the psp will normally be made to executive directors and 
senior executives across the group after the preliminary declaration of the 
annual results for the financial year to 30 september 2009 they will be 
made following the agm in march 2009 
for the year to 30 september 2009 and onwards there are no intentions 
to grant options to executive directors under the esos which ceases in 
december 2009  
in the financial year to 30 september 2008 market value options were 
granted under the esos to senior executives and managers across  
the group as well as to other staff with high potential or to recognise 
significant achievement or local market practice grants to executive 
directors were limited to shares under option worth 100 of base salary   
57
the performance targets governing the vesting of options are based on 
stretching eps growth measured over a fixed three year period from the 
start of the financial year in which the grant is made 30 of options will 
vest at the end of the period if the increase in eps exceeds rpi by 15 
an average of 5 per year and 100 of those options will vest at that 
time only if rpi is exceeded in that period by 27 an average of 9  
per year between those targets options will vest on a straightline basis  
if those targets are not met at the end of the three year period then no 
further retesting of the performance criteria will be undertaken and the 
options will lapse  
allemployee share schemes 
uk based executive directors are entitled to participate in the sage  
group savingsrelated share option plan the “saye scheme”  
mr g s berruyer currently holds units granted under the sage plan 
d’epargne d’entreprise “pee” which is an allemployee plan designed  
to enable french employees to acquire shares in the company at a 
discounted price under terms comparable to those offered to uk 
employees under the saye scheme there are no performance 
conditions under either the saye scheme or the pee since these 
generally do not apply to allemployee share plans such as these 
26 policy on pensions 
all the executive directors’ pension arrangements are defined contribution 
the sage executive pension scheme is the main pension fund for sage 
executives in the uk it is a defined contribution plan where the standard 
contribution rate is 25 of base salary subject where appropriate to 
limits set by hmrc no components of remuneration other than base 
salary are pensionable 
27 policy on directors’ shareholdings 
the committee believes that all executive directors should hold a 
substantial number of shares in the company it is therefore its policy 
that all executive directors over time hold shares equivalent in value  
to 150 of their annual salary until the required holding is achieved 
executive directors will be expected to retain net of any shares sold  
to meet the tax liability in respect of them at least 50 of 
• shares received as deferred bonus 
• shares resulting net of exercise costs from the exercise of share 
options granted from december 2004 onwards and 
• performance shares received under the psp 
in assessing whether the target of 150 of salary is met vested but 
unexercised options under the share option schemes of the company  
will be deemed to have a value equal to the net value after exercise costs 
and taxation of those options as if exercised on the relevant date 
28 policy on service contracts 
in relation to contracts with executive directors the remuneration 
committee aims to set notice or contract periods at one year if it is 
necessary to offer longer notice or contract periods to new directors 
recruited from outside the group it is the company’s policy to reduce 
these as soon as contractually possible after the initial period to a notice 
period of one year  
both executive and nonexecutive directors are subject to election  
by shareholders at the first annual general meeting following their 
appointment and thereafter require reelection at least once every three 
years the appointment of a nonexecutive director may be terminated 
without compensation if that director is not reelected by shareholders  
or otherwise in accordance with the company’s articles of association 
the appointment of the nonexecutives is for a fixed term of one or three 
years during which period the appointment may be terminated by the 
board on notice ranging from six to 12 months in the case of the 
chairman of the board there are no provisions on payment for early 
termination in their letters of appointment the remuneration committee 
reviews the contracts of executives on an annual basis to ensure they  
are in line with policy and market practice 
executive directors are permitted where appropriate and with board 
approval to take nonexecutive directorships with other organisations in 
order to broaden their knowledge and experience in other markets and 
countries mr p a walker is currently a nonexecutive director of diageo 
plc mr p l stobart is a nonexecutive director of capital  regional plc 
mr p s harrison is a nonexecutive director of hays plc fees received  
in their capacity as directors of these companies are retained by each  
of them reflecting the personal responsibility they undertake in these  
roles in the year under review these fees were £70000 in the case of  
mr p a walker £42000 in the case of mr p l stobart and £57000 in  
the case of mr p s harrison 
the board recognises the significant demands that are made on 
executive and nonexecutive directors and has therefore adopted a policy 
that no executive director should hold more than two directorships of 
other listed companies the board encourages executive directors to limit 
other directorships to one listed company and in no case should more 
than one directorship of another ftse 100 company be taken where an 
executive director holds nonexecutive positions at more than one listed 
company only the fees from one such company will be retained by the 
director no formal limit on other board appointments applies to non
executive directors under the policy but prior approval from the chairman 
on behalf of the board is required in the case of any new appointment  
in the case of the chairman prior approval of the senior independent 
director is required on behalf of the board 
the service contracts of executive directors and the letters of appointment 
of nonexecutive directors prohibit the disclosure of confidential 
information relating to the group both during the term of the contract and 
after its termination the letters of appointment of nonexecutive directors 
and service contracts of executive directors are available for inspection at 
the company’s registered office during normal business hours and will be 
available at the annual general meeting   
 
 
58 
3 directors’ contracts and compensation 
all executive directors have service contracts which may be terminated by the company for breach by the executive or by giving 12 months notice 
there are no predetermined special provisions for directors with regard to compensation in the event of loss of office with compensation based on 
what would be earned by way of salary pension entitlement and other benefits over the notice period in the event that a contract is to be terminated 
payments to the executive director may be staged over the notice period or in the case of executive directors other than mr g s berruyer the contract 
terminated and payments made in lieu of notice at the same time as salary would have been paid throughout the 12 months notice period there is no 
automatic entitlement to annual bonus or outstanding awards under share incentive plans nonexecutive directors’ appointments may be terminated 
without compensation other than in respect of fees during the notice period 
the service agreement with mr r verni was terminated on 11 october 2007 mr verni received payments in lieu of 12 months notice under the contract 
at the times when salary would have been paid under his service agreement against these payments was set off the remuneration which mr verni 
received from third parties during that time all payments ceased on 11 october 2008 the tables relating to executive share options and the 
performance share plan on page 61 onwards set out the treatment of his share awards 
details of the contract of service or contract for services of each person who has served as a director of the company at any time during the financial 
year are set out below 
director  date of contract 
unexpired term 
of contract on
30 september 2008 notice period under contract 
executive directors 
g s berruyer 30 september 2004 12 months 12 months from the company andor 6 months 
from individual
d h clayton 25 july 2007 age 60 or 12 months 12 months from the company andor individual
p s harrison 1 april 2000 age 60 or 12 months 12 months from the company andor individual
p l stobart  26 september 2003 age 60 or 12 months 12 months from the company andor individual
p a walker  26 september 2003 age 60 or 12 months 12 months from the company andor individual
nonexecutive directors 
a j hobson  24 may 2007 1 year 8 months 12 months from the company andor individual 
t ingram 23 november 2007 2 years 3 months 6 months from the company andor 1 month 
from individual
t c w ingram 14 march 2008 6 months 6 months from the company andor 1 month 
from individual
r markland 15 august 2006 1 year 6 months from the company andor 1 month 
from individual
i mason 31 october 2007 2 years 1 month 6 months from the company andor 1 month 
from individual
m e rolfe 23 november 2007 2 years 2 months 6 months from the company andor 1 month 
from individual
the following director ceased to be a director during the course of the financial year 
r verni  8 july 2003 nil terminated on 
11 october 2007
12 months from the company andor individual
notes 
� there are no other benefits in the contracts relevant to termination payment 
   
59
4 performance graph 
total shareholder return “tsr” against ftse 100 
the company is required to include a graph indicating its tsr performance that is share price assuming reinvestment of any dividends over the  
last five years relative to a recognised equity index accordingly the graph below shows the company’s performance relative to the ftse 100 
 
 
this graph shows the value by 30 september 2008 of £100 invested in the sage group plc on 30 september 2003 compared with the value of £100 
invested in the ftse 100 index the other points plotted are the values at intervening financial year ends 
the ftse 100 index is in the opinion of the directors the most appropriate index against which the tsr of the company should be measured 
because of the comparable size of the companies which comprise that index 
tsr performance to 30 september 2008 for psp awards made to date was as follows 
� 2006 awards – tsr ranking of 913 out of 11 comparators 
� 2007 awards – tsr ranking of 1017 out of 13 comparators 
� 2008 awards – tsr ranking of 1042 out of 19 comparators 
   
 
60 
5 directors’ remuneration  
the information set out in sections 51 to 54 below has been subject to audit as required by part 3 of schedule 7a of the companies act 1985 
51 directors’ emoluments and compensation audited information 
the total salaries fees and benefits paid to or receivable by each person who served as a director at any time during the year appear below  
these include all payments for services as a director of the company its subsidiaries or otherwise in connection with the management of the group 
and any other directorship he or she holds because of the company’s nomination the other elements of directors remuneration are referred to under 
the heading “general remuneration policy” above 
director 
salary  
and fees 
’000 
bonus
’000
bonus 
deferred 
into shares
5
’000 
benefits 
in kind
6
’000 
2008
total
’000
2007 
total 
’000 
2008  
pension 
contributions
7
’000 
2007
pension
contributions
’000 
executive directors   
g s berruyer  c625 c546 c26 c7 c1204 a1216 – –
d h clayton £335 £251 – £17 £603 £42 £84 –
p s harrison  £335 £251 – £18 £604 £676 £84 £48
p l stobart  £425 £191 – £18 £634 £793 £106 £60
r verni
1
 632 – – – 632 933 – 6
p a walker  £735 £551 – £21 £1307 £1459 £184 £105
nonexecutive directors       
a j hobson £250 – – – £250 £127 – –
j m hornsmith
2
 – – – – – £454 – –
t ingram  £45 – – – £45 £45 – –
t c w ingram  £62 – – – £62 £59 – –
r markland £52 – – – £52 £52 – –
i mason
3
 £48 – – – £48 – – –
m e rolfe
4
 £47 – – – £47 – – –
notes 
1 ceased to be a member of the board and contract terminated on 11 october 2007 therefore the figure above represents the fees paid to him whilst a director 23356 and the 
payment in lieu of notice due to him 608875 
2 ceased to be a member of the board on 26 april 2007 
3 appointed 1 november 2007 
4 appointed 1 december 2007 
5 an element of bonus has been deferred by the company as an award under the sage group deferred bonus plan awards under that plan which were made on 10 december 2008 
over such number of shares whose market value is as close as possible to but no greater than the deferred bonus will vest on the third anniversary of the date of grant in the event  
that a director ceases to be an employee of the group for reasons other than death retirement redundancy injury illhealth or disability before the third anniversary of the date of grant 
then the award will lapse unless the remuneration committee recommends otherwise the directors have no entitlement to the bonus deferred into an award of shares until it vests  
full details of the award will be contained in the report for the year ending 30 september 2009 
6 benefits in kind include the provision of car allowance and insurance 
7 retirement benefits were accruing to four directors 2007 four all pension contributions accrued under money purchase schemes 
� apart from the payment in lieu of notice to mr r verni referred to in note 1 above no payments for compensation for loss of office or otherwise relating to termination of office or 
employment were made during the year 
� total directors’ emoluments were £4893000 2007 £5001000 
� no other payments including noncash benefits were made to third parties in respect of the services of a person who served as a director of the company at any time during the 
financial year 
� including gains on share options the total emoluments of the highest paid director were £1307000 2007 £1459000 
� in the table above exchange rates of 197£1 and a131£1 have been adopted 
52 directors’ share options audited information 
there are limits on the number of newly issued shares that can be used to satisfy awards under the group’s employee share schemes in any  
ten year period the limits and the group’s current position against those limits as at 17 december 2008 the last practicable date prior to printing  
this document are set out below 
limit  current position
75 of group’s share capital can be used for discretionary share schemes 54 used
10 of group’s share capital can be used for all share schemes 59 used
the company currently intends to satisfy awards under the performance share plan through the market purchase of shares   
61
executive share options 
the group’s only current executive share option scheme is the esos where in the year under review executive directors received grants worth 100 
of their base salary at the then relevant exchange rates where applicable the outstanding executive share options granted to each director of the 
company under the executive share option schemes including the esos are as follows 
director 
exercise  
price per  
share 
shares under  
option at 
1 october 
2007  
number 
granted
during 
the year 
number
exercised
during 
the year 
number
lapsed 
during 
the year 
number
shares under 
option at
30 september
2008 
number date exercisable
g s berruyer 13600p 350000 – 350000 – – 16 december 2001 – 16 december 2008
 32975p 121304 – – – 121304 17 january 2004 – 17 january 2011
 17100p 175438 – – – 175438 24 december 2006 – 24 december 2013
 19800p 189082 – – – 189082 6 january 2008 – 6 january 2015
 25850p 147748 – – – 147748 10 january 2009 – 10 january 2016
 27000p 147639 – – – 147639 10 january 2010 – 10 january 2017
 21400p – 218545 – – 218545 10 january 2011 – 10 january 2018
  1131211 218545 350000 – 999756
d h clayton 21400p – 156542 – – 156542 10 january 2011 – 10 january 2018
  – 156542 – – 156542
p s harrison  13600p 60000 – 60000 – – 16 december 2001 – 16 december 2008
 72100p 30000 – – – 30000 23 february 2003 – 23 february 2010
 32975p 65595 – – – 65595 17 january 2004 – 17 january 2011
 13400p 186567 – – – 186567 31 december 2005 – 31 december 2012
 17100p 128654 – – – 128654 24 december 2006 – 24 december 2013
 19800p 133838 – – – 133838 6 january 2008 – 6 january 2015
 25850p 116054 – – – 116054 10 january 2009 – 10 january 2016
 27000p 118519 – – – 118519 10 january 2010 – 10 january 2017
 21400p – 156542 – – 156542 10 january 2011 – 10 january 2018
  839227 156542 60000 – 935769
p l stobart 32975p 121304 – – – 121304 17 january 2004 – 17 january 2011
 13400p 223880 – – – 223880 31 december 2005 – 31 december 2012
 17100p 175438 – – – 175438 24 december 2006 – 24 december 2013
 19800p 181818 – – – 181818 6 january 2008 – 6 january 2015
 25850p 146228 – – – 146228 10 january 2009 – 10 january 2016
 27000p 148889 – – – 148889 10 january 2010 – 10 january 2017
 21400p – 198598 – – 198598 10 january 2011 – 10 january 2018
  997557 198598 – – 1196155
r verni  20450p 150000 – 150000 – – 7 june 2002 – 7 june 2009
  32975p 121304 – – 121304 – 17 january 2004 – 17 january 2011
 22850p 89031 – –89031 – 2 january 2005 – 2 january 2012
 13400p 298507 –298507 – – 31 december 2005 – 31 december 2012
 17100p 182158 –182158 – – 24 december 2006 – 24 december 2013
 19800p 178062 –178062 – – 6 january 2008 – 6 january 2015
 25850p 151975 – –151975 – 10 january 2009 – 10 january 2016
 27000p 140846 – –140846 – 10 january 2010 – 10 january 2017
  1311883 – 808727 503156 –
   
 
62 
executive share options continued 
 
director 
exercise  
price per  
share 
shares under  
option at 
1 october 
2007  
number 
granted
during 
the year 
number
exercised
during 
the year 
number
lapsed 
during 
the year 
number
shares under 
option at
30 september
2008 
number date exercisable
p a walker 13600p 440000 – – – 440000 16 december 2001 – 16 december 2008
 32975p 151630 – – – 151630 17 january 2004 – 17 january 2011
 13400p 313432 – – – 313432 31 december 2005 – 31 december 2012
 17100p 280701 – – – 280701 24 december 2006 – 24 december 2013
 19800p 315656 – – – 315656 6 january 2008 – 6 january 2015
 25850p 253771 – – – 253771 10 january 2009 – 10 january 2016
 27000p 258889 – – – 258889 10 january 2010 – 10 january 2017
 21400p – 343457 – – 343457 10 january 2011 – 10 january 2018
  2014079 343457 – – 2357536
total  6293957 10736841218727 503156 5645758
notes 
� no options were varied during the year 
� options granted to all directors of the company and its operating subsidiaries throughout the group under the esos that are exercisable on or after 23 february 2003 but before  
6 january 2008 will normally be exercisable only if the percentage increase in the company’s eps has exceeded the rpi by at least 3 each year in the three year period since grant  
ie by a total of 9 if that target is not met at the end of the three year period then those options will only be exercisable if eps growth exceeds rpi by 12 over the four year period 
following the date of grant in respect of options exercisable on or after 6 january 2008 the performance criteria for exercise are set out in paragraph 25 above in respect of any share 
options exercisable prior to 23 february 2003 no performance conditions apply as such conditions were not deemed appropriate by the remuneration committee at that time 
� for the options exercised in the year the market price of the exercised shares at the date of exercise was as follows 
– g s berruyer – 1 september 2008 was 20864p 
– p s harrison – 22 september 2008 was 21491p 
– r verni – 25 january 2008 was 21575p option price 13400p 
– r verni – 1 february 2008 was 23050p option price 13400p 
– r verni – 9 may 2008 was 21475p option prices 13400p 17100p 19800p and 20450p 
� the market price of a share of the company at 30 september 2008 was 19530p and the lowest and highest market price during the year was 18710p and 25175p respectively 
� total gains on the exercise of share options were £684275 2007 £1736952 including £684275 2007 £1736952 on executive share options  
� the table above does not show exercises of options after 30 september 2008 which are referred to in the notes to the table in paragraph 55 below 
� on termination of his contract on 11 october 2007 the committee permitted mr r verni to exercise any vested share options for a period of six months following the termination date 
� options which vested during the 12 months following the termination date of mr r verni where the performance period for those options had ended prior to the termination date were 
permitted to be exercised within six months of their vesting date 
allemployee share scheme 
in relation to the saye scheme the outstanding options granted to each director of the company are as follows 
director 
exercise  
price per  
share 
shares under  
option at 
1 october 
2007  
number 
granted
during 
the year 
number
exercised
during 
the year 
number
lapsed 
during 
the year 
number
shares under 
option at
30 september
2008 
number date exercisable
p s harrison 18400p 5081 – – – 5081 1 august 2009 – 31 january 2010
p l stobart 18400p 5081 – – – 5081 1 august 2009 – 31 january 2010
total   10162 – – – 10162
notes 
� these options are not subject to performance conditions since these do not apply to this type of allemployee share scheme 
� under the pee mr g s berruyer holds units in a french mutual fund which holds shares in the company the units must be held for no less than five years on 30 september 2007 
148018 units were held by mr g s berruyer at a price of a389 per share on 30 september 2008 1656638 units were held at a price of a2668 per share units are valued on a 
weekly basis   
63
53 performance share plan audited information 
the outstanding awards granted to each director of the company under the performance share plan are as follows 
director  
awarded  
1 october  
2007 
 number  
awarded 
during 
the year 
number
vested 
during 
the year 
number
lapsed 
during 
the year 
number
awarded 
30 september 
2008  
number vesting date
g s berruyer  178903 – 77956 100947 – 18 march 2008
 147748 ––– 147748 10 january 2009
 147639 ––– 147639 10 january 2010
 – 361647–– 361647 3 march 2011
 474290 361647 77956 100947 657034 
d h clayton – 253787 – – 253787 3 march 2011
 – 253787 – – 253787 
p s harrison  128329 – 55918 72411 – 18 march 2008
 116054 ––– 116054 10 january 2009
 118519 ––– 118519 10 january 2010
 – 253787–– 253787 3 march 2011
 362902 253787 55918 72411 488360 
p l stobart  174334 – 75965 98369 – 18 march 2008
 146228 ––– 146228 10 january 2009
 148889 ––– 148889 10 january 2010
 – 321969–– 321969 3 march 2011
 469451 321969 75965 98369 617086 
r verni  166118 – 72386 93732 – 18 march 2008
 151975 ––151975 – 10 january 2009
 140846 ––140846 – 10 january 2010
 458939 – 72386386553 – 
p a walker  302663 – 131885 170778 – 18 march 2008
 253771 ––– 253771 10 january 2009
 258889 ––– 258889 10 january 2010
 – 556818–– 556818 3 march 2011
 815323 556818 131885 170778 1069478 
total  2580905 1748008 414110 829058 3085745 
notes 
� no variations were made in the terms of the awards in the year 
� the market price of a share on 3 march 2008 the date of the awards made in the year ended 30 september 2008 was 19800p 
� for awards which vested in the year ended 30 september 2008 the market price on the date of award 18 march 2005 was 20650p the market price of a share on 18 march 2008 
the vesting date of these awards was 19290p 
� the vesting of shares awarded under the performance share plan is subject to performance conditions measuring the group’s total shareholder return “tsr” against a comparator 
group 30 of shares vest other than for awards in march 2008 where 25 vest for median tsr performance as compared to that group whilst all shares vest for upper quintile  
top 20 tsr performance between those points shares will vest on a straightline basis for awards made in 2005 tsr performance was such that 407 of shares originally 
awarded vested to executive directors 
� in respect of the awards vesting in 2008 and 2009 the comparator group for tsr comprised blackbaud business objects cap gemini cegid exact geac intuit isoft microsoft 
misys myob northgate information solutions oracle salesforcecom sap and systems union for those vesting in 2010 the group comprised blackbaud business objects cap 
gemini cegid exact intuit isoft lawson software logicacmg microsoft misys myob northgate information solutions oracle salesforcecom and sap for those vesting in 2011 
the group comprised adobe systems arm holdings autonomy blackbaud cap gemini cegid dassault systemes exact intuit lawson software logicacmg micro focus 
international microsoft misys myob oracle salesforcecom sap and software ag 
� the committee permitted only the 2005 psp award to vest to ron verni following the termination of his contract on 11 october 2007 as the vesting would have occurred during the  
12 months following termination and the performance period relevant to the award was complete his award was subject to the same performance criteria as all other psp awards 
made to executive directors   
 
64 
54 deferred shares audited information 
the outstanding awards granted to directors of the company under the sage group deferred bonus plan are as follows 
director 
shares at  
30 september  
2007 
number 
shares 
awarded
during the year 
number
shares 
vested 
during the year 
number
shares 
lapsed
during the year 
number
shares at  
30 september  
2008 
number vesting date
g s berruyer 11736 – – – 11736 10 january 2009
 10815 –– – 10815 10 january 2010
 – 14714– – 14714 10 january 2011
 22551 14714
–
– 37265 
p s harrison 8418 – – – 8418 10 january 2009
 10187 –– – 10187 10 january 2010
 – 11495– – 11495 10 january 2011
 18605 11495 – – 30100 
p l stobart 3524 – – – 3524 10 january 2009
 3878 –– – 3878 10 january 2010
 – 8401– – 8401 10 january 2011
 7402 8401 – – 15803 
r verni 17693 – 17693 – – 10 january 2009
 10715 –– 10715 – 10 january 2010
 28408 – 17693 10715 – 
p a walker 19853 – – – 19853 10 january 2009
 22275 –– – 22275 10 january 2010
 – 25111– – 25111 10 january 2011
 42128 25111 – – 67239 
total 119094 59721 17693 10715 150407 
notes 
� following the termination of mr r verni’s contract on 11 october 2007 the committee permitted the vesting of the 2006 deferred shares award only 
� awards of shares will vest on the third anniversary of the date of grant in the event that a director ceases to be an employee of the group for reasons other than death  
retirement redundancy injury illhealth or disability before the third anniversary of the date of grant then the rights to the award will lapse unless the remuneration committee 
recommend otherwise  
� awards are not subject to further performance conditions once granted 
� no variations were made in the terms of the awards in the year 
� the market price of a share on 10 january 2008 the date of the award was 21400p   
65
55 interests in shares 
the interests of each person who was a director of the company as at 30 september 2008 together with interests held by his or her connected 
persons were 
director 
ordinary 
shares at
30 september 
2008 
number
ordinary 
shares at
30 september 
2007 
number
g s berruyer  301836 223880
d h clayton  31000 31000
p s harrison  41065 8437
a j hobson  24126 24126
t ingram  3600 3600
t c w ingram  33552 33552
r markland  5000 5000
i mason 10000 –
m e rolfe 10000 –
p l stobart  67803 23477
p a walker  6201657 6069772
total  6729639 6422844
notes 
� there have been no changes in the directors’ holdings in the share capital of the company between 30 september 2008 and 17 december 2008 other than those referred to in the 
note below 
– on 10 december 2008 mr p a walker exercised options under the terms of the sage group no 2 executive share option scheme over 440000 ordinary shares at an option price  
of 13600p per share he subsequently sold on that day 440000 ordinary shares at an average price of 17990p per share  
56 significant awards to past directors 
no significant awards were made to any person who was not a director at the time the award was made but who was previously a director 
approved by the board of directors and signed on its behalf 
t c w ingram 
chairman of the remuneration committee 
17 december 2008   
consolidated income statement 
for the year ended 30 september 2008 
66 
note  
2008
£m
2007
£m
  
revenue  1  12950 11576
cost of sales   940 1037
gross profit   12010 10539
selling and administrative expenses   9336 7987
operating profit  13  2674 2552
finance income  2  38 36
finance expenses  2  302 355
net finance expenses  2  264 319
profit before taxation   2410 2233
taxation  4  747 692
profit for the year – attributable to equity shareholders 2223  1663 1541
  
ebita  1  2998 2832
  
earnings per share pence   
 – basic  6  1273p 1185p
 – diluted  6  1269p 1179p
 
 
consolidated statement of recognised income  
and expense 
for the year ended 30 september 2008 
 
 
note  
2008
£m
2007 
£m
profit for the year 2223 1663 1541
  
net exchange adjustments offset in reserves 2123 1171 516
equity movement of deferred tax 172223 02 33
actuarial gainloss on employment benefits 2223 31 12
net gainslosses not recognised in income statement  1200 561
  
total recognised income for the year – attributable to equity shareholders  2863 980
ebita measure earnings before interest tax and amortisation excludes the effects of 
� amortisation of acquired intangible assets and 
� net amortisation or capitalisation of software development expenditure 
  consolidated balance sheet 
as at 30 september 2008 
67
note 
2008
£m
2007
restated
£m
noncurrent assets   
goodwill  7  18255 15670
other intangible assets  8  2237 2006
property plant and equipment  9  1405 1305
deferred tax assets  17  52 83
  21949 19064
current assets   
 
inventories  10  54 55
trade and other receivables  11  2676 2303
cash and cash equivalents  12  701 656
  3431 3014
  
total assets   25380 22078
 
current liabilities   
trade and other payables  13  2472 2102
current tax liabilities   692 563
financial liabilities   
– borrowings  15  139 03
deferred consideration   26 85
deferred income  14 3522 3002
  6851 5755
noncurrent liabilities   
financial liabilities   
– borrowings  15  5752 5620
retirement benefit obligations  28  39 53
deferred tax liabilities  17  268 142
  6059 5815
  
total liabilities   12910 11570
net assets   12470 10508
 
equity   
share capital  18  131 130
share premium account  20  4866 4782
other reserves  21  1092 79
retained earnings  22  6381 5675
total equity 23  12470 10508
the consolidated financial statements on pages 66 to 105 were approved by the board of directors on 17 december 2008 and are signed on their  
behalf by  
p a walker   p s harrison 
director    director   
consolidated cash flow statement 
for the year ended 30 september 2008 
68 
note 
2008
£m
2007
£m
cash flows from operating activities   
cash generated from continuing operations  25  3420 3171
interest received  2  38 36
interest paid  2 292 344
tax paid   625 661
net cash generated from operating activities   2541 2202
 
cash flows from investing activities   
acquisitions of subsidiaries net of cash acquired  26g  811 962
disposal of subsidiaries   – 09
purchase of intangible assets  8  154 159
purchase of property plant and equipment  9  250 221
proceeds from sale of property plant and equipment   18 02
net cash used in investing activities   1197 1331
 
cash flows from financing activities   
net proceeds from issue of ordinary share capital   85 150
finance lease principal payments  25  01 02
issue costs on loans  25  03 02
repayment of borrowings  25  2335 1890
new borrowings  25  1939 1222
dividends paid to shareholders  5  1062 490
net cash used in financing activities   1377 1012
 
net decrease in cash and cash equivalents before exchange rate changes   33 141
effects of exchange rate changes  25 78 23
net increasedecrease in cash and cash equivalents   45 164
cash and cash equivalents at 1 october   656 820
cash and cash equivalents at 30 september  12  701 656
  notes to the accounts – group 
for the year ended 30 september 2008 
69
group accounting policies  
general information 
the sage group plc “the company” and its subsidiaries together  
“the group” is one of the leading global suppliers of business 
management software and services to small and mediumsized 
enterprises operating in 26 countries worldwide in the uk  ireland 
mainland europe north america southern hemisphere and asia 
the company is a limited liability company incorporated and domiciled in 
the uk the address of its registered office is north park newcastle upon 
tyne ne13 9aa 
the company is listed on the london stock exchange 
the group consolidated financial statements were authorised for issue  
by the board of directors on 17 december 2008 
a basis of preparation 
as an eu listed company the sage group plc is required to prepare  
its group accounts using international financial reporting standards 
“ifrs” as adopted by the european union with effect from  
1 october 2005  
the accounts are also prepared in accordance with ifric interpretations 
as endorsed by the eu and with those parts of the companies act 1985 
that are applicable to companies reporting under ifrs 
the financial statements are prepared on the historical cost convention 
except where adopted ifrs require an alternative treatment the principal 
variations from the historical cost convention relates to ias 19 “employee 
benefits” and ifrs 2 “sharebased payment” 
balance sheet restatement 
when the accounting for acquisitions is provisional at a year end date  
and is then finalised within 12 months the carrying amount of the assets 
and associated goodwill is accounted for at the revised level from the 
original acquisition date comparative information presented for the 
periods before the accounting is complete is presented as if the initial 
accounting had been complete from the acquisition date as a result the 
consolidated balance sheet as at 30 september 2007 has been restated 
to reflect the final accounting the impact of the restatement has been  
to reduce goodwill by £51m and increase other intangible assets by 
£51m there is no impact on the consolidated income statement for  
the year ended 30 september 2007 
standards amendment and interpretations effective in 2008 
ifrs 7 “financial instruments disclosures” and the complementary 
amendment to ias 1 “presentation of financial statements – capital 
disclosures” introduces new disclosures relating to financial instruments 
and does not have any impact on the classification and valuation of the 
group financial instruments or the disclosures relating to taxation 
the principal ifrs accounting policies of the group are set out below 
b basis of consolidation 
the financial statements of the group comprise the financial statements  
of the company and entities controlled by the company its subsidiaries 
prepared at the balance sheet date control is achieved where the 
company has the power to govern the financial and operating policies  
of an entity so as to benefit from its activities 
the results of subsidiaries acquired during the year are included in  
the consolidated income statement consolidated statement of 
recognised income and expense and consolidated cash flow statement 
from the date of control they are deconsolidated from the date that 
control ceases 
all intragroup transactions balances income and expenses are 
eliminated on consolidation 
minority interests in the net assets of consolidated subsidiaries are 
identified separately from the group’s equity therein minority interests 
consist of the amount of those interests at the date of the original 
business combination and the minorities’ share of changes in equity  
since the date of the combination  
c business combinations 
the acquisition of subsidiaries is accounted for using the purchase 
method the cost of the acquisition is measured at the aggregate of the 
fair values at the date of exchange of assets given liabilities incurred or 
assumed and equity instruments issued by the group in exchange for 
control of the acquiree plus any costs directly attributable to the business 
combination the acquiree’s identifiable assets liabilities and contingent 
liabilities that meet the conditions for recognition under ifrs 3 “business 
combinations” are recognised at their fair values at the acquisition date 
goodwill arising on acquisition is recognised as an asset and initially 
measured at cost being the excess of the cost of the business 
combination over the group’s interest in the net fair value of the  
identifiable assets liabilities and contingent liabilities recognised if after 
reassessment the group’s interest in the net fair value of the acquiree’s 
identifiable assets liabilities and contingent liabilities exceeds the cost of 
the business combination the excess is recognised immediately in the 
income statement 
the interest of minority shareholders in the acquiree is initially measured  
at the minority’s proportion of the net fair value of the assets liabilities and 
contingent liabilities recognised 
d revenue recognition 
revenue is measured at the fair value of the consideration received or 
receivable and represents amounts receivable for goods and services 
provided in the normal course of business net of discounts vat and 
other sales related taxes 
the group reports revenue under two revenue categories  
• subscription revenues which are recurring in nature and include 
combined softwaresupport contracts maintenance and support 
transaction revenues payment and health insurance claims 
processing and hosted products and 
• software and softwarerelated services revenue which includes 
software licences sale of professional services business forms 
hardware and training 
subscriptions – revenue is recognised on a straightline basis over  
the term of the subscription contract revenue not recognised in the 
income statement under this policy is classified as deferred income in  
the balance sheet 
software licences – the group recognises the revenue allocable to 
software licences and upgrades when all the following conditions have 
been satisfied 
• the group has transferred to the buyer the significant risks and 
rewards of ownership of the licence 
• the group retains neither continuing managerial involvement to the 
degree usually associated with ownership nor effective control over  
the goods sold 
• the amount of revenue can be measured reliably 
• it is probable that the economic benefits associated with the 
transaction will flow and 
• the costs incurred or to be incurred in respect of the transaction can 
be measured reliably 
   
 
70 
group accounting policies continued 
d revenue recognition continued 
where appropriate the group provides a reserve for estimated returns 
under the standard acceptance terms at the time the revenue is recorded 
where software is sold with aftersales service the consideration is 
allocated between the different elements on fair value the revenue 
allocated to each element is recognised as outlined above 
other products which includes business forms and hardware – revenue 
is recognised as the products are shipped 
other services which includes the sale of professional services and 
training – revenue associated with the transaction is recognised by 
reference to the stage of completion of the transaction at the balance 
sheet date the outcome of a transaction can be estimated reliably when 
all the following conditions are satisfied 
• the amount of revenue can be measured reliably 
• it is probable that the economic benefits associated with the 
transaction will flow to the group 
• the state of completion of the transaction at the balance sheet date 
can be measured reliably and 
• the costs incurred for the transaction and the costs to complete the 
transaction can be measured reliably 
e goodwill 
goodwill represents the excess of the cost of acquisition over the fair 
value of the group’s interest in the identifiable assets liabilities and 
contingent liabilities acquired in a business combination goodwill is 
carried at cost less accumulated impairment losses goodwill previously 
writtenoff directly to reserves under uk gaap prior to 1 october 1998 
has not been reinstated and is not recycled to the income statement  
on the disposal of the business to which it relates gains and losses  
on disposal of the entity includes the carrying amount of the foreign 
exchange on the goodwill relating to the entity sold except for goodwill 
taken to reserves prior to the transition to ifrs on 1 october 2004 
f impairment of assets 
goodwill is allocated to cashgenerating units for the purposes of 
impairment testing the recoverable amount of the cashgenerating unit  
to which the goodwill relates is tested annually for impairment or when 
events or changes in circumstances indicate that it might be impaired  
the carrying values of property plant and equipment investments 
measured using a cost basis and intangible assets other than goodwill  
are reviewed for impairment only when events indicate the carrying value 
may be impaired 
in an impairment test the recoverable amount of the cashgenerating  
unit or asset is estimated to determine the extent of any impairment loss 
the recoverable amount is the higher of fair value less costs to sell and 
the valueinuse in the group an impairment loss is recognised to the 
extent that the carrying value exceeds the recoverable amount 
in determining a cashgenerating unit’s or asset’s valueinuse estimated 
future cash flows are discounted to their present value using a pretax 
discount rate that reflects current market assessments of the time value  
of money and risks specific to the cashgenerating unit or asset that have 
not already been included in the estimate of future cash flows 
g intangible assets – arising on business combinations 
intangible assets are recognised when brands technology andor 
customer related contractual cash flows exist along with any other 
intangibles acquired on a business combination and their fair value  
can therefore be measured reliably  
amortisation of intangible assets is charged to the income statement on a 
straightline basis over the estimated useful lives of each intangible asset 
intangible assets are amortised from the date they are available for use 
the estimated useful lives are as follows 
• brand names  – 3 to 20 years  
• technologyin process rd iprd – 3 to 7 years 
• customer relationships – 4 to 15 years 
h intangible assets – other 
other intangible assets that are acquired by the group are stated at cost 
less accumulated amortisation and impairment losses software assets 
are amortised over their estimated useful lives which do not exceed  
seven years 
i internally generated intangible assets – research and 
development expenditure 
expenditure on research activities is recognised as an expense in the 
period in which it is incurred 
an internally generated intangible asset arising from the development  
of software is recognised only if all of the following conditions are met 
• it is probable that the asset will create future economic benefits 
• the development costs can be measured reliably 
• technical feasibility of completing the intangible asset can  
be demonstrated 
• there is the intention to complete the asset and use or sell it 
• there is the ability to use or sell the asset and 
• adequate technical financial and other resources to complete  
the development and to use or sell the asset are available 
internally generated intangible assets are amortised over their estimated 
useful lives which is between three to six years where no internally 
generated intangible asset can be recognised development expenditure 
is charged to the income statement in the period in which it is incurred 
j property plant and equipment 
property plant and equipment are stated at cost less accumulated 
depreciation and impairment losses if applicable depreciation on 
property plant and equipment is provided down to an asset’s residual 
value over its useful economic life as follows 
• freehold buildings  – 50 years 
• long leasehold buildings and improvements  – over period  
   of lease 
• plant and equipment  – 2 to 7 years 
• motor vehicles  – 4 years 
• office equipment  – 5 to 7 years 
freehold land is not depreciated 
residual values and useful lives are reviewed and adjusted if appropriate 
at each balance sheet date   
71
k inventories 
inventories are stated at the lower of cost and net realisable value  
cost includes expenditure incurred in acquiring the inventories and 
bringing them to their existing location and condition 
l cash and cash equivalents 
for the purpose of preparation of the cash flow statement cash and cash 
equivalents include cash at bank and in hand and shortterm deposits 
with an original maturity period of three months or less bank overdrafts 
that are an integral part of a subsidiary’s cash management are included 
in cash and cash equivalents where they have a legal right of setoff  
and there is an intention to settle net against positive cash balances 
otherwise bank overdrafts are classified as borrowings 
m financial assets 
the group classifies its financial assets in the category loans and 
receivables this classification is due to the purpose for which the financial 
assets were acquired management determines the classification of its 
financial assets at initial recognition 
loans and receivables 
loans and receivables are nonderivative financial assets with fixed or 
determinable payments that are not quoted in an active market they are 
included in current assets except for maturities greater than 12 months 
after the balance sheet date these are classified as noncurrent assets 
the group’s loans and receivables comprise trade and other receivables 
excluding prepayments and accrued income and cash and cash 
equivalents in the balance sheet note n 
n trade receivables and trade payables 
trade receivables are recognised initially at fair value and subsequently 
measured at amortised cost using the effective interest method less 
provision for impairment 
a provision for impairment of trade receivables is established when there  
is objective evidence that the group will not be able to collect all amounts 
due according to the original terms of the receivables significant financial 
difficulties of the debtor probability that the debtor will enter bankruptcy  
or financial reorganisation and default or delinquency in payments are 
considered indicators that the trade receivable is impaired the amount  
of the provision is the difference between the asset’s carrying amount  
and the present value of estimated future cash flows discounted at the 
original effective interest rate the carrying amount of the asset is reduced 
through the use of an allowance account and the amount of the loss  
is recognised in the income statement within selling and administrative 
expenses when a trade receivable is uncollectible it is writtenoff against 
the allowance account for trade receivables subsequent recoveries  
of amounts previously writtenoff are credited against selling and 
administrative expenses in the income statement 
trade payables are recognised initially at fair value and subsequently 
measured at amortised cost using the effective interest method 
o taxation 
income tax expense represents the sum of the tax currently payable and 
deferred tax 
the tax currently payable is based on taxable profit for the year  
taxable profit differs from profit as reported in the income statement 
because it excludes items of income or expense that are taxable or 
deductible in other years and it further excludes items that are never 
taxable or deductible the group’s liability for current tax is calculated 
using tax rates that have been enacted or substantively enacted at the 
balance sheet date 
 
 
deferred tax is recognised on differences between the carrying amounts 
of assets and liabilities in the financial statements and the corresponding 
tax bases used in the computation of taxable profit and is accounted  
for using the balance sheet liability method deferred tax liabilities are 
generally recognised for all taxable temporary differences and deferred tax 
assets are recognised to the extent that it is probable that taxable profits 
will be available against which deductible temporary differences can be 
utilised such assets and liabilities are not recognised if the temporary 
difference arises from goodwill or from the initial recognition other than in 
a business combination of other assets and liabilities in a transaction that 
affects neither the taxable profit nor the accounting profit 
deferred tax liabilities are recognised for taxable temporary differences 
arising on investments in subsidiaries except where the group is able to 
control the reversal of the temporary difference and it is probable that the 
temporary difference will not reverse in the foreseeable future 
the carrying amount of deferred tax assets is reviewed at each balance 
sheet date and reduced to the extent that it is no longer probable that 
sufficient taxable profits will be available to allow all or part of the asset  
to be recovered 
deferred tax is calculated at the tax rates that are expected to apply in the 
period when the liability is settled or the asset realised based on tax rates 
that have been enacted or substantively enacted at the balance sheet 
date deferred tax and current tax are charged or credited to profit or loss 
except when it relates to items charged or credited directly to equity in 
which case the deferred tax is also dealt with in equity 
tax assets and liabilities are offset when there is a legally enforceable right 
to set off current tax assets against current tax liabilities and when they 
relate to income taxes levied by the same taxation authority and the 
group intends to settle its current tax assets and liabilities on a net basis 
in recognising income tax assets and liabilities management makes 
estimates of the likely outcome of decisions by tax authorities on 
transactions and events whose treatment for tax purposes is uncertain 
where the final outcome of such matters is different or expected to be 
different from previous assessments made by management a change  
to the carrying value of income tax assets and liabilities will be recorded  
in the period in which such a determination is made the carrying values 
of income tax assets and liabilities are disclosed separately in the 
consolidated balance sheet 
p financial instruments and hedge accounting  
financial assets and liabilities are recognised in the group’s balance sheet 
when the group becomes a party to the contractual provision of the 
instrument trade payables are noninterestbearing and are stated at 
their nominal value 
in accordance with its treasury policy the group does not hold or issue 
derivative financial instruments for hedging or trading purposes 
the only hedging undertaken by the group are net investment hedges 
using foreign currency borrowings the portion of the gain or loss on an 
instrument used to hedge a net investment in a foreign operation that  
is determined to be an effective hedge is recognised directly in equity  
the ineffective portion is recognised immediately in profit or loss 
the group has certain investments in foreign operations whose  
net assets are exposed to foreign currency translation risk  
currency exposure arising from the net assets of the group’s foreign 
operations is managed primarily through borrowings denominated in  
the relevant foreign currencies   
 
72 
group accounting policies continued 
q foreign currency translation 
the individual financial statements of each group entity are presented in 
the currency of the primary economic environment in which the entity 
operates its functional currency for the purpose of the consolidated 
financial statements the results and financial position of each entity  
are expressed in sterling which is the functional currency of the  
parent company and the presentation currency for the consolidated 
financial statements 
in preparing the financial statements of the individual entities  
transactions in currencies other than the entity’s functional currency 
“foreign currencies” are recorded at the rates of exchange prevailing on 
the dates of the transactions at each balance sheet date monetary items 
denominated in foreign currencies are retranslated at the rates prevailing 
on the balance sheet date nonmonetary items carried at fair value  
that are denominated in foreign currencies are retranslated at the rates 
prevailing on the date when the fair value was determined nonmonetary 
items that are measured in terms of historical cost in a foreign currency  
are not retranslated 
exchange differences arising on the settlement of monetary items and on 
the retranslation of monetary items are included in profit or loss for the 
period exchange differences arising on the retranslation of nonmonetary 
items carried at fair value are included in profit or loss for the period  
except for differences arising on the retranslation of nonmonetary items  
in respect of which gains and losses are recognised directly in equity  
for such nonmonetary items any exchange component of that gain or 
loss is also recognised directly in equity 
for the purpose of presenting consolidated financial statements  
the assets and liabilities of the group’s foreign operations including 
comparatives are expressed in pounds sterling using exchange rates 
prevailing on the balance sheet date income and expense items 
including comparatives are translated at the average exchange rates  
for the period unless exchange rates fluctuated significantly during that 
period in which case the exchange rates at the dates of the transactions 
are used exchange differences arising if any are classified as equity and 
transferred to the group’s translation reserve 
goodwill and fair value adjustments arising on the acquisition of a foreign 
operation are treated as assets and liabilities of the foreign operation and 
translated at the closing rate 
when a foreign operation is partially disposed of or sold exchange 
differences that were recorded in equity are recognised in the income 
statement as part of the gain or loss on sale with the exception of 
exchange differences recorded in equity prior to the transition to ifrs  
on 1 october 2004 in accordance with ifrs 1 “firsttime adoption  
of international financial reporting” 
r borrowing 
interestbearing borrowings are recognised initially at fair value less 
attributable transaction costs subsequent to initial recognition interest
bearing borrowings are stated at amortised cost with any difference 
between cost and redemption value being recognised in the income 
statement over the period of borrowing on an effective interest basis 
s leasing 
assets held under finance leases are initially recognised as assets of the 
group at their fair value or if lower at the present value of the minimum 
lease payments each determined at the inception of the lease  
the corresponding liability to the lessor is included in the balance sheet  
as a finance lease obligation lease payments are apportioned between 
finance charges and reduction of the lease obligation so as to achieve  
a constant rate of interest on the remaining balance of the liability  
finance charges are charged directly as finance costs to the  
income statement 
rentals payable under operating leases are charged to income on a 
straightline basis over the term of the relevant lease benefits received 
and receivable as an incentive to enter into an operating lease are also 
spread on a straightline basis over the lease term 
t retirement benefit costs 
the group operates money purchase pension schemes defined 
contribution schemes for certain of its employees the contributions are 
charged to the income statement as incurred 
there are two small defined benefit schemes operating within the group 
the assets of the defined benefit schemes are held separately from the 
assets of the group the costs of providing benefits under these schemes 
are determined using the projected unit credit actuarial valuation method 
the current service cost and gains and losses on settlements and 
curtailments are included in selling and administrative expenses in the 
consolidated income statement past service costs are similarly included 
where the benefits have vested otherwise they are amortised on a 
straightline basis over the vesting period the expected return on assets 
of funded defined benefit pension schemes and the imputed interest on 
pension plan liabilities comprise the pension element of the net finance 
expenseincome in the income statement 
differences between the actual and expected return on assets changes  
in the retirement benefit obligation due to experience and changes in 
actuarial assumptions are included in the statement of recognised income 
and expense in full in the period in which they arise 
the liability recognised in the balance sheet in respect of the defined 
benefit pension scheme is the present value of the defined benefit 
obligation and unrecognised past service cost and future administration 
costs at the balance sheet date less the fair value of plan assets  
the defined benefit obligation is calculated annually by independent 
actuaries the present value of the defined benefit obligation is 
determined by discounting the estimated future cash outflows using 
interest rates of highquality corporate bonds that are denominated  
in the currency in which the benefits will be paid and that have terms  
to maturity approximate to the terms of the related pension liability 
the calculation of the defined benefit obligation of a defined benefit plan 
requires estimation of future events for example salary and pension 
increases inflation and mortality rates in the event that future experience 
does not bear out the estimates made in previous years an adjustment 
will be made to the plan’s defined benefit obligation in future periods 
which could have a material effect on the group the carrying amounts of 
assets and liabilities relating to defined benefit plans together with the key 
assumptions used in the calculation of the defined benefit obligations 
relating to those plans are disclosed in note 28 
u sharebased payments 
the group issues equitysettled sharebased payments to certain 
employees equitysettled sharebased payments are measured at fair 
value excluding the effect of nonmarketbased vesting conditions  
at the date of grant the fair value determined at the grant date of the 
equitysettled sharebased payments is expensed on a straightline basis 
over the vesting period based on the group’s estimate of the shares  
that will eventually vest allowing for the effect of nonmarketbased  
vesting conditions 
fair value is measured using the blackscholes or the monte carlo pricing 
models the expected life used in the model has been adjusted based 
on management’s best estimate for the effects of nontransferability 
exercise restrictions and behavioural considerations   
73
the group also provides certain employees with the ability to purchase 
the group’s ordinary shares at a discount to the current market value  
at the date of the grant the group records an expense based on its 
estimate of the discount related to shares expected to vest on a straight
line basis over the vesting period 
at each balance sheet date the entity revises its estimates for the number 
of options expected to vest it recognises the impact of the revision to 
original estimates if any in the income statement with a corresponding 
adjustment to equity 
the proceeds received net of any directly attributable transaction costs 
are credited to share capital nominal value and share premium when the 
options are exercised 
v dividends 
dividends on ordinary shares are recognised as a liability in the period in 
which they are approved by the company’s shareholders 
w provisions 
a provision is recognised in the balance sheet when the group has  
a present legal or constructive obligation as a result of a past event and  
it is probable that an outflow of economic benefits will be required to  
settle the obligation if the effect is material provisions are determined by 
discounting the expected future cash flows at a pretax rate that reflects 
current market assessments of the time value of money and where 
appropriate the risks specific to the liability 
x segment reporting 
the group is organised into geographical businesses the geographic 
regions are the group’s primary reporting format for segment information 
as they represent the dominant source and nature of the group’s  
risks and returns the group’s secondary reporting format is business 
sector accounting industryspecific hr and payroll crm and  
payment processing 
segment assets include all intangible assets property plant and 
equipment inventories trade and other receivables cash and cash 
equivalents and tax assets segment liabilities comprise mainly trade and 
other payables retirement benefit obligations tax liabilities and certain 
borrowings that can be attributed to the segment but exclude borrowings 
that are for general corporate purposes capital expenditure comprises 
additions to property plant and equipment and intangible assets 
y adoption of new and revised international financial  
reporting standards 
at the date of approval of these financial statements the following 
standards interpretations and amendments were issued but not  
yet mandatory effective for the group and early adoption has not  
been applied 
international financial reporting standards “ifrs” 
• ifrs 8 “operating segments” this has been adopted by the eu 
• ifrs 3 revised “business combinations” 
• ias 1 revised “presentation of financial statements” 
• ias 27 revised “consolidated and separate financial statements” 
international financial reporting interpretations committee 
“ifric” interpretations 
• ifric 12 “service concession arrangements” 
• ifric 13 “customer loyalty programmes” 
• ifric 14 “ias 19 – the limit of a defined benefit asset minimum 
funding requirements and their interaction” 
• ifric 15 “agreements for construction of real estates” 
• ifric 16 “hedges of a net investment in a foreign operation” 
amendments to existing standards 
• amendment to ias 23 – “borrowing costs” 
• amendment to ias 32 – “financial instruments presentation – 
amendments relating to puttable financial instruments and 
obligations arising on liquidation” 
• amendment to ifrs 1 and ias 27 – “cost of an investment  
in a subsidiary jointly controlled entity or an associate” 
• amendment to ias 39 and ifrs 7 – “reclassification of  
financial assets” 
• amendment to ias 39 – “eligible hedged items” 
• amendment to ifrs 2 – “vesting conditions and cancellations” 
• ifrs annual improvements 
all the ifrss ifric interpretations and amendments to existing standards 
are yet to be endorsed by the eu at the date of approval of these 
consolidated financial statements with the exception of ifrs 8 and the 
amendment to ias 39 and ifrs 7  
the directors anticipate that the future adoption of those standards 
interpretations and amendments listed above will not have a material 
impact on the consolidated financial statements  
z critical accounting estimates and judgements 
in preparing the consolidated financial statements management has to 
make judgements on how to apply the group’s accounting policies and 
make estimates about the future the critical judgements that have been 
made in arriving at the amounts recognised in the consolidated financial 
statements and the key sources of estimation uncertainty that have a 
significant risk of causing a material adjustment to the carrying value of 
assets and liabilities in the next financial year are discussed below 
� acquisitions  
when acquiring a business we have to make judgements and best 
estimates about the fair value allocation of the purchase price we seek 
appropriate competent and professional advice before making any  
such allocations we test the valuation of goodwill on an annual basis  
and whenever events or changes in circumstances indicate that the 
carrying amounts may not be recoverable these tests require the use  
of estimates note 7 
� impairment reviews 
the group tests annually whether goodwill has suffered any impairment 
in accordance with the accounting policy stated above the recoverable 
amounts of cashgenerating units have been determined based on value
inuse calculations these calculations require the use of estimates  
note 7 
� income taxes 
the group is subject to income taxes in numerous jurisdictions 
significant judgement is required in determining the worldwide provision 
for income taxes there are transactions and calculations for which the 
ultimate tax determination is uncertain during the ordinary course of 
business the group recognises liabilities for anticipated tax audit issues 
based on estimates of whether additional taxes will be due where the 
final tax outcome of these matters is different from the amounts that were 
recorded such differences will impact the income tax and deferred tax 
provisions in the period in which such determination is made 
   
 
 
74 
1 segmental reporting  
primary reporting format – geographical segments 
the group manages its business segments on a global basis the operations are based in four main geographical areas the uk is the home country 
of the parent the main operations in the principal territories are as follows 
• uk  ireland 
• mainland europe 
• north america 
• rest of world 
the rest of world segment operations are mainly based in south africa australia singapore malaysia uae china and india the sales analysis in the 
table below is based on the location of the customer which is not materially different from the location where the order is received and where the assets 
are located 
year ended 30 september 2008 note
uk  ireland
£m
mainland
europe
£m
north 
america 
£m 
rest of 
world
£m
group
£m
the primary segment results were as follows   
continuing operations  
revenue  2457 4573 5009 911 12950
segment operating profit  3 845 878 719 232 2674
finance income  2 38
finance expenses  2 302
profit before taxation   2410
taxation  4 747
profit for the year from continuing operations   1663
 
the primary segment assets and liabilities were as follows 
segment assets  4190 6557 13470 1163 25380
segment liabilities  1837 2691 2218 415 7161
segment net assets  2353 3866 11252 748 18219
unallocated liabilities   
– corporate borrowings   5749
total net assets   12470
 
other segmental information in respect of the  
primary segments was as follows 
capital expenditure – property plant and equipment  9 78 74 78 20 250
capital expenditure – intangible fixed assets  8 01 32 121 – 154
depreciation  9 72 45 51 17 185
amortisation of intangible assets  8 42 136 187 02 367
other noncash expenses – sharebased payments  19 28 22 21 05 76
   
75
 
year ended 30 september 2007 note
uk  ireland
£m
mainland
europe
£m
north  
america 
£m 
rest of 
world
£m
group
£m
the primary segment results were as follows   
continuing operations  
revenue  2241 3491 5081 763 11576
segment operating profit  3 808 712 834 198 2552
finance income  2 36
finance expenses  2 355
profit before taxation   2233
taxation  4 692
profit for the year from continuing operations   1541
 
the primary segment assets and liabilities were as follows 
segment assets  3691 5411 11906 1070 22078
segment liabilities  1470 2157 1964 366 5957
segment net assets  2221 3254 9942 704 16121
unallocated liabilities   
– corporate borrowings   5613
total net assets   10508
 
other segmental information in respect of the  
primary segments was as follows 
capital expenditure – property plant and equipment 9 64 37 79 41 221
capital expenditure – intangible fixed assets  8 01 34 123 01 159
depreciation  9 69 36 46 11 162
amortisation of intangible assets  8 20 117 195 03 335
other noncash expenses – sharebased payments  19 28 20 35 05 88
segment assets include all intangible assets property plant and equipment inventories trade and other receivables cash and cash equivalents and  
tax assets segment liabilities comprise mainly trade and other payables retirement benefit obligations tax liabilities and certain borrowings that can be 
attributed to the segment but exclude borrowings that are for general corporate purposes capital expenditure comprises additions to property plant 
and equipment and intangible assets 
reconciliation of operating profit to ebita non gaap measure 
2008
£m
2007
£m
operating profit  2674 2552
amortisation of acquired intangible assets  318 272
net amortisation of software development expenditure  06 08
ebita  2998 2832
ebita measure earnings before interest tax and amortisation excludes the effects of 
� amortisation of acquired intangible assets and 
� net amortisation or capitalisation of software development expenditure   
 
76 
1 segmental reporting continued 
secondary reporting format – business segment 
the business segments identified are accounting industryspecific hr and payroll crm and payment processing  
 
2008
£m
revenue 
2007 
£m
2008 
£m
segment  
assets  
2007  
£m 
2008 
£m
capital 
expenditure 
2007 
£m
continuing operations  
accounting 7137 5617 13987 10713 223 184
industryspecific 3146 3425 6166 6532 98 112
hr and payroll 1452 1394 2846 2659 45 46
crm 687 664 1346 1266 21 22
payment processing 528 476 1035 908 17 16
 12950 11576 25380 22078 404 380
 
analysis of revenue 
2008 
£m
revenue 
2007 
£m
software and softwarerelated services  5093 4766
subscription 7857 6810
 12950 11576
2 net finance expenses  
 
2008 
£m
2007 
£m
finance income – interest income on shortterm deposits 38 36
 
finance expenses 
finance costs on bank borrowings 292 344
amortisation of issue costs  10 11
 302 355
 
net finance expenses 264 319
3 operating profit  
the following items have been included in arriving at operating profit  note  
2008 
£m
2007 
£m
staff costs  27  5955 5115
inventories  
– cost of inventories recognised as an expense included in cost of sales  10  399 359
depreciation of property plant and equipment  
– owned assets  9  183 161
– under finance leases  9 02 01
amortisation of intangible assets excluding amortisation of development expenditure  8  361 327
amortisation of development expenditure 8 06 08
loss on disposal of property plant and equipment   – 13
loss on disposal of intangible assets  – 05
other operating lease rentals payable  
– plant and machinery   07 34
– property   275 176
repairs and maintenance expenditure on property plant and equipment   56 30
research and development expenditure   1397 1114
   
77
services provided by the group’s auditor and network firms 
during the year the group including its overseas subsidiaries obtained the following services from the group’s auditor at costs as detailed below 
 
2008
£m
2007
£m
audit services 
– fees payable to the company auditor for the audit of parent company and consolidated accounts  15 13
 
nonaudit services 
fees payable to the company auditor and its associates for other services 
– the audit of the company’s subsidiaries pursuant to legislation  02 02
– other nontax compliance services 02 02
– tax services and tax compliance work  18 13
 37 30
the total audit fee for the group including the audit of overseas subsidiaries was £17m 2007 £15m other services include interim review costs and 
are therefore closely associated with the audit 
the board’s policy in respect of the procurement of nonaudit services for the group’s auditor is set out on pages 50 and 51 
4 taxation 
analysis of charge in the year  
2008
£m
2007
£m
current tax  
– current year  749 603
– adjustment in respect of prior year  05 13
 754 590
 
deferred tax note 17 07 102
 
taxation  747 692
 
tax on items creditedcharged to equity 
2008
£m
2007
£m
deferred tax charge on share options  02 33
current tax credit on exchange adjustments  46 –
total tax on items creditedcharged to equity  44 33
 
the tax for the year is higher 2007 higher than the standard rate of corporation tax in the uk 29  
2007 30 the differences are explained below 
2008
£m
2007
£m
profit on ordinary activities before taxation  2410 2233
profit on ordinary activities multiplied by rate of corporation tax in the uk of 29 2007 30  699 670
 
effects of 
adjustment in respect of prior year 05 13
adjustment in respect of foreign tax rates  58 71
expenses not deductible for tax purposes and other permanent differences  04 42
other  11 06
total taxation  747 692
   
 
78 
5 dividends 
 
2008 
£m
2007 
£m
final dividend paid for the year ended 30 september 2007 of 573p per share  745 –
2007 final dividend paid for the year ended 30 september 2006 of 251p per share – 324
 
interim dividend paid for the year ended 30 september 2008 of 243p per share  317 –
2007 interim dividend paid for the year ended 30 september 2007 of 127p per share – 166
 1062 490
in addition the directors are proposing a final dividend in respect of the financial year ended 30 september 2008 of 478p per share which will absorb  
an estimated £626m of shareholders’ funds it will be paid on 6 march 2009 to shareholders who are on the register of members on 6 february 2009 
these financial statements do not reflect this dividend payable 
6 earnings per share 
basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares 
outstanding during the year excluding those held in the employee share trust note 22 which are treated as cancelled 
for diluted earnings per share the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential 
ordinary shares the group has two classes of dilutive potential ordinary shares those share options granted to employees where the exercise price  
is less than the average market price of the company’s ordinary shares during the year and the contingently issuable shares under the group’s  
longterm incentive plan at 30 september 2008 the performance criteria for the vesting of the awards under the incentive scheme had not been  
met and consequently the shares in question are excluded from the diluted eps calculation 
reconciliations of the earnings and weighted average number of shares used in the calculations are set out below 
 2008 2007
 
earnings 
£m
weighted 
average 
number of 
shares 
millions
per share 
amount 
pence
earnings  
£m 
weighted 
average 
number of 
shares 
millions
per share 
amount 
pence
basic eps   
earnings attributable to ordinary shareholders  1663 13065 1273 1541 12999 1185
  
effect of dilutive securities   
options – 38 004 – 71 006
  
diluted eps  1663 13103 1269 1541 13070 1179
   
79
adjusted eps – non gaap measure 
 2008 2007
 
earnings 
£m
weighted 
average 
number of 
shares 
millions
per share 
amount 
pence
earnings  
£m 
weighted 
average 
number of 
shares 
millions
per share 
amount 
pence
basic eps  
earnings attributable to ordinary shareholders  1663 13065 1273 1541 12999 1185
  
non gaap items   
intangible asset amortisation excluding  
amortisation of computer software  324 280 
taxation  100 87 
net adjustments  224 171193 149
  
adjusted basic eps  1887 13065 1444 1734 12999 1334
  
exchange adjustments   
exchange adjustments 138 
taxation 43 
net exchange adjustments 95 073
       
adjusted basic eps  
after exchange adjustments 
 
1887 13065 1444 1829 12999 1407
       
effect of dilutive securities   
options 38 004 71 008
  
adjusted diluted eps  
after exchange adjustments 1887 13103 1440 1829 13070 1399
exchange adjustments relate to the retranslation of prior year results to current year exchange rates as shown in the table on page 38 within the  
financial review 
7 goodwill 
note 
2008
£m
2007
restated
£m
cost   
at 1 october   15670 15619
additions  26h  672 903
disposals    – 09
exchange adjustments   1913 792
at 30 september – as reported  18255 15721
prior period restatement   – 51
at 30 september – as restated  18255 15670
  
aggregate impairment at 1 october and 30 september   – –
  
net book amount at 30 september – as reported   18255 15721
prior period restatement  – 51
net book amount at 30 september – as restated  18255 15670  
 
80 
7 goodwill continued 
details of acquisitions in the year are shown in note 26 during the year goodwill was reviewed for impairment in accordance with ias 36 for the 
purposes of this impairment review goodwill has been valued on the basis of discounted future cash flows arising in each relevant cashgenerating unit 
details of the restatement are included in the group accounting policies on page 69 
goodwill impairment tests 
goodwill acquired in a business combination is allocated to one or more cashgenerating units “cgus” cgus represent the operations of a country 
or in more material operations divisions within a country 
the following table shows the allocation of the carrying value of goodwill at the balance sheet date  
by geographic area  
2008 
£m
2007
restated 
£m
uk  ireland 2132 1811
france  2519 1981
germany  248 220
switzerland  321 269
poland  80 64
spain  1161 945
north america  11037 9694
south africa  341 313
australia  247 227
asia  169 146
 18255 15670
the group conducts annual impairment tests on the carrying value of goodwill based on the recoverable amount of cgus to which goodwill has been 
allocated the recoverable amounts of cgus are determined from valueinuse calculations the key assumptions in the valueinuse calculations are 
the discount rate applied the longterm operating margin and the longterm growth rate of net operating cash flows in all cases the approved budget 
for the following financial year formed the basis for the cash flow projections for a cgu the approved cash flow projections in the four financial years 
following the budget year reflected management’s expectations of the mediumterm operating performance of the cgu and growth prospects in the 
cgu’s market 
• the discount rate applied to a cgu represents a pretax rate that reflects the market assessment of the time value of money at the balance sheet 
date and the risks specific to the cgu the discount rate applied to cgus were in the range of 59 2007 64 to 114 2007 105 
• the longterm operating margin assumed for a cgu’s operations is primarily based on past performance for some cgus those for which 
management has strong reason to believe that past operating margins are not indicative of future operating margins expected future improvements 
from sustainable operating cost savings are also included in management’s assessment of the longterm operating margin the longterm operating 
margin applied to cgus was in the range of 8 2007 18 to 47 2007 45 
• longterm growth rates of net operating cash flows are assumed equal to the longterm growth rate in the gross domestic product of the country in 
which the cgu’s operations are undertaken and were in the range of 10 2007 10 to 50 2007 50 
goodwill impairment tests were conducted separately for each cgu   
81
8 other intangible assets 
 
brands 
£m 
technology
£m
acquired 
iprd
£m
internal 
iprd
£m
computer  
software  
£m 
customer 
relationships
£m
total
£m
cost    
at 1 october 2007  340 707 03 47 382 1125 2604
additions  – – – – 148 06 154
acquisitions –  
through business combinations 15 89 – – 02 88 194
transfers – – – – 01 – 01
disposals  – – – – 04 – 04
exchange adjustments  49 92 – 04 75 146 366
at 30 september 2008 404 888 03 51 604 1365 3315
aggregate amortisation   
at 1 october 2007 45 161 01 32 142 217 598
charge for the year 28 119 01 06 43 170 367
acquisitions – – – – 02 – 02
disposals – – – – 04 – 04
exchange adjustments 09 29 01 03 32 43 115
at 30 september 2008  82 309 01 41 215 430 1078
net book amount at  
30 september 2008 322 579 02 10 389 935 2237
 
restated 
brands 
£m 
technology
£m
acquired 
iprd
£m
internal 
iprd
£m
computer  
software  
£m 
customer 
relationships
£m
total
£m
cost    
at 1 october 2006  335 604 03 47 195 963 2147
additions  – – – – 159 – 159
acquisitions –  
through business combinations 10 130 – – 18 148 306
transfers – – – – 64 – 64
disposals  – – – – 36 – 36
exchange adjustments  05 05 – – 18 59 87
at 30 september 2007 –  
as reported 340 729 03 47 382 1052 2553
prior period restatement – 22 – – – 73 51
at 30 september 2007 –  
as restated 340 707 03 47 382 1125 2604
aggregate amortisation   
at 1 october 2006 20 69 01 23 109 69 291
charge for the year 25 94 01 08 55 152 335
acquisitions – – – – 18 – 18
disposals – –––31 –31
exchange adjustments – 02 01 01 09 04 15
at 30 september 2007 45 161 01 32 142 217 598
net book amount at  
30 september 2007 – as reported 295 568 02 15 240 835 1955
prior period restatement – 22 – – – 73 51
net book amount at  
30 september 2007 – as restated 295 546 02 15 240 908 2006
all amortisation charges in the year have been charged through selling and administrative expenses intangible assets apart from internally generated 
iprd and computer software relate to identifiable assets purchased as part of the group’s business combinations intangible assets are amortised  
on a straightline basis over their expected useful economic life details of the restatement are included in the group accounting policies on page 69   
 
82 
9 property plant and equipment 
land and 
buildings
£m
plant and 
equipment 
£m 
motor 
vehicles 
and office 
equipment
£m
total
£m
cost  
at 1 october 2007  918 1154 394 2466
additions at cost  01 199 50 250
acquisitions  04 18 10 32
disposals 12 46 15 73
transfers – 01 – 01
exchange adjustments 22 101 34 157
at 30 september 2008 933 1425 473 2831
  
accumulated depreciation   
at 1 october 2007  59 827 275 1161
charge for the year  10 137 38 185
acquisitions  02 16 08 26
disposals  – 44 11 55
exchange adjustments  04 80 25 109
at 30 september 2008  75 1016 335 1426
  
net book amount at 30 september 2008  858 409 138 1405
 
land and 
buildings
£m
plant and 
equipment 
£m 
motor 
vehicles 
and office 
equipment
£m
total
£m
cost  
at 1 october 2006  922 1156  383 2461
additions at cost  03 181 37 221
acquisitions  12 07 08 27
disposals 10 101 29 140
transfers – 64 – 64
exchange adjustments 09 25 05 39
at 30 september 2007 918 1154 394 2466
  
accumulated depreciation   
at 1 october 2006  49 808  266 1123
charge for the year  10 121 31 162
acquisitions  05 06 06 17
disposals  04 97 24 125
exchange adjustments  01 11 04 16
at 30 september 2007  59 827 275 1161
  
net book amount at 30 september 2007  859 327 119 1305
depreciation expense of £185m 2007 £162m have been charged through selling and administrative expenses note 3 
lease rentals amounting to £07m 2007 £34m and £275m 2007 £176m relating to the lease of plant and machinery and property respectively  
are included in the income statement note 3 
   
83
assets held under finance leases have the following net book amount 
2008
£m
 2007 
£m
cost  13 06
accumulated depreciation 05 03
net book amount  08 03
included in assets held under finance leases are plant and equipment with a net book amount of £05m 2007 £03m and vehicles £03m 2007 £nil 
10 inventories 
 
2008
£m
 2007 
£m
materials  12 18
finished goods  42 37
 54 55
the group consumed £399m 2007 £359m of inventories included in cost of sales during the year there was no material write down of inventories 
during the current or prior year 
11 trade and other receivables 
amounts falling due within one year 
2008 
£m
2007 
£m
trade receivables 2550 2265
less provision for impairment of receivables  280 258
trade receivables – net  2270 2007
other receivables 232 155
prepayments and accrued income  174 141
 2676 2303
the group’s credit risk on trade and other receivables is primarily attributable to trade receivables the group has no significant concentrations of credit 
risk since the risk is spread over a large number of unrelated counterparties the directors estimate that the carrying value of financial assets within trade 
and other receivables approximated their fair value 
the group considers the credit quality of trade and other receivables by geographical location the group consider that the carrying value of the  
trade and other receivables that is disclosed below gives a fair presentation of the credit quality of the assets this is considered to be the case as  
there is a low risk of default due to the high number of recurring customers and credit control policies thus the carrying value is expected to be the  
final value received 
trade and other receivables by geographical location 
2008
£m
 2007
£m
uk  ireland 770 767
mainland europe  968 694
north america 620 578
rest of world 144 123
 2502 2162
 
movements on the group provision for impairment of trade receivables were as follows 
2008
£m
 2007
£m
at 1 october 258 230
acquisition of subsidiaries 04 03
increase in provision for receivables impairment 77 77
receivables writtenoff during the year as uncollectible 45 43
unused amounts reversed 44 13
exchange adjustments 30 04
at 30 september 280 258
   
 
84 
11 trade and other receivables continued 
in determining the recoverability of a trade receivable the group considers the ageing of each receivable and any change in the circumstances of the 
individual receivables the directors believe that there is no further provision required in excess of the allowance for doubtful debts 
the creation and release of provision for impaired receivables have been included in selling and administrative expenses in the income statement 
amounts charged to the allowance account are generally writtenoff when there is no expectation of recovering additional cash 
at 30 september 2008 trade receivables of £525m 2007 £389m were either partially or fully impaired  
the ageing of these receivables was as follows 
2008
£m
 2007
£m
not due 75 78
less than six months past due 250 142
more than six months past due  200 169
 525 389
trade receivables which were past their due date but not impaired at 30 september 2008 were £654m 2007 £538m  
the ageing of these receivables was as follows 
2008
£m
 2007
£m
less than six months past due 608 494
more than six months past due  46 44
 654 538
the maximum exposure to credit risk at the reporting date is the fair value of each class of receivables mentioned above the group held no collateral  
as security the directors estimate that the carrying value of trade receivables approximated their fair value 
12 cash and cash equivalents 
cash and cash equivalents in the cash flow statement comprise 
2008
£m
 2007
£m
cash at bank and in hand  698 643
shortterm bank deposits  03 13
 701 656
the effective interest rate on shortterm deposits was 32 2007 50 and these deposits have an average maturity of 30 days 2007 44 days 
group’s credit risk on cash and cash equivalents is limited because the counterparties are well established banks with high credit ratings 
13 trade and other payables – current 
 
2008 
£m
2007
£m
trade payables  665 549
other tax and social security payable  716 607
accruals  1091 946
 2472 2102
14 deferred income 
 
2008 
£m
2007 
£m
deferred income 3522 3002
revenue not recognised in the income statement under the group accounting policy for revenue recognition is classified as deferred income in the 
balance sheet to be recognised in future periods   
85
15 financial liabilities – borrowings 
current 
2008 
£m
2007 
£m
bank loans due within one year of demand  
unsecured  136 02
 136 02
finance lease obligations  03 01
 139 03
 
noncurrent 
2008 
£m
2007 
£m
bank loans  
secured a – 06
unsecured  5750 5613
 5750 5619
finance lease obligations  02 01
 5752 5620
a the bank loans were secured by a fixed charge over the property the acquisition of which the loan funded 
bank loans are denominated in a number of currencies and bear interest based on libor or foreign equivalents appropriate to the country in which  
the borrowing is incurred 
included in loans above is £5750m 2007 £5615m of unsecured loans after unamortised issue costs taken out in connection with acquisitions 
this is drawn down under £8500m multicurrency revolving credit facilities £6500m expiring on 4 august 2011 and £2000m expiring by 13 january 
2011 with £1000m amortising a year earlier 
in the table above loans are stated net of unamortised issue costs of £05m 2007 £10m the group has incurred total issue costs of £76m  
2007 £73m in respect of these facilities these costs are allocated to the income statement over the term of the facility using the effective  
interest method 
unsecured borrowings were drawn in the following currencies sterling £753m 2007 £nil us dollar £2906m 2007 £3142m euro £2088m  
2007 £2359m and swiss franc £139m 2007 £114m and bear interest at a rate of 045 2007 045 above libor 
16 financial instruments 
numerical financial instruments disclosures are set out below and also in note 25 
fair values of financial instruments 
for the following financial assets and liabilities longterm borrowings shortterm borrowings trade and other payables excluding other tax and  
social security trade and other receivables excluding prepayments shortterm bank deposits and cash at bank and in hand the carrying amount 
approximates the fair value of the instrument due to the instrument bearing interest at market rates andor the shortterm nature of the instrument 
2008 2007
note
book value
£m
fair value 
£m 
book value 
£m
fair value 
£m
longterm borrowings  15 5752 5752 5620 5620
  
fair value of other financial assets and financial liabilities   
primary financial instruments held or issued to finance the  
group’s operations   
shortterm borrowings  15 139 139 03 03
trade and other payables excluding other tax and social security  13 1756 1756 1495 1495
trade and other receivables excluding prepayments 11 2502 2502 2162 2162
shortterm bank deposits  12 03 03 13 13
cash at bank and in hand  12 698 698 643 643
   
 
86 
16 financial instruments continued 
risk management 
the group’s treasury function seeks to reduce exposures to interest rate foreign exchange and other financial risks to ensure liquidity is available to 
meet the foreseeable needs of the group and to invest cash assets safely and profitably the group does not engage in speculative trading in financial 
instruments and transacts only in relation to underlying business requirements the group’s treasury policies and procedures are periodically reviewed 
and approved by the audit committee and are subject to regular group internal audit review 
capital risk 
the group’s objectives when managing capital defined as net debt note 25 plus equity are to safeguard the group’s ability to continue as a going 
concern in order to provide returns to shareholders and benefits for other stakeholders while optimising return to shareholders through an appropriate 
balance of debt and equity funding the group manages its capital structure and makes adjustments to it with respect to changes in economic 
conditions and the strategic objectives of the group 
liquidity risk 
the group manages its exposure to liquidity risk by reviewing the cash resources required to meet its business objectives through both short and long
term cash flow forecasts the group has committed facilities which are available to be drawn for general corporate purposes including working capital 
see below 
the group’s treasury function has a policy of reducing the level of cash in the business in order to minimise external borrowings 
maturity of financial liabilities 
the maturity profile of the undiscounted contractual amount of the group’s financial liabilities at 30 september was as follows 
 2008 2007
 
borrowings
£m
trade and 
other 
payables
£m
total
£m
borrowings 
£m 
trade and 
other
 payables 
£m
total
£m
in less than one year  139 2472 2611 03 2102 2105
in more than one year but not more than two years  02 – 02 01 – 01
in more than two years but not more than five years  6399 – 6399 6662 – 6662
 6540 2472 9012 6666 2102 8768
borrowing facilities  
the group has the following undrawn committed borrowing facilities available at 30 september in respect of which all conditions precedent had been 
met at that date  
 
2008
total 
£m
2007
total
£m
expiring within one year  – –
expiring between one and two years  – –
expiring in more than two years  2746 2877
 2746 2877
the facilities have been arranged to help finance the proposed expansion of the group’s activities all these facilities incur commitment fees at  
market rates 
credit risk 
credit risk is the risk that a counterparty may default on their obligation to the group in relation to lending settlement and other financial activities 
the group’s principal financial assets are trade and other receivables and bank balances and cash  
the group’s credit risk primarily arises from trade and other receivables the amounts included in the balance sheet are net of allowances for doubtful 
receivables an allowance for impairment is made where there is an identified loss event which based on previous experience is evidence of a 
reduction in the recoverability of cash flows the group has a very low credit risk due to the transactions being principally of a high volume low  
value and short maturity the group has no significant concentration of credit risk with the exposure spread over a large number of counterparties  
and customers 
the credit risk on liquid funds is considered to be low as the audit committee approved group treasury policy limits the value that can be invested 
with each approved counterparty to minimise the risk of loss the carrying amount of financial assets recorded in the financial statements represents  
the group’s maximum exposure to credit risk the group does not hold collateral over any of these financial assets   
87
interest rate risk 
the group is exposed to cash flow interest rate risk on floating rate bank loans and overdrafts at 30 september 2008 the group had drawn down 
£5754m 2007 £5623m from its committed revolving credit facility the group regularly reviews the interest rates to mitigate this risk which are 
rebased on a monthly basis and seeks to fix interest rates on a portion of its debt when market conditions make this desirable at 30 september 2008 
all outstanding debt was held at variable rates  
foreign currency risk 
foreign exchange rate risk is the risk that the fair value of future cash flows will fluctuate because of the changes in foreign exchange rates the group’s 
foreign currency exposures are principally to the us dollar and euro 
the group has us dollar euro and swiss franc denominated borrowings which it has designated as a hedge of the net investment in its subsidiaries  
in the us france spain germany and switzerland the fair value of the us dollar borrowings at 30 september 2008 was £2906m 2007 £3142m 
the euro borrowings £2035m 2007 £2359m and swiss franc borrowings £139m 2007 £114m the foreign exchange loss of £717m 2007 
gain of £338m on translation of the borrowings into sterling has been recognised in exchange reserves 
the group’s other currency exposures comprise only those exposures that give rise to net currency gains and losses to be recognised in the income 
statement such exposures reflect the monetary assets and liabilities of the group that are not denominated in the operating or “functional” currency  
of the operating unit involved at 30 september 2008 and 30 september 2007 these exposures were immaterial to the group 
sensitivity analysis as at 30 september 2008 
financial instruments affected by market risks include borrowings and deposits 
the following analysis required by ifrs 7 “financial instruments disclosures” is intended to illustrate the sensitivity to changes in market variables 
being uk us dollar and euro interest rates and us dollarsterling and eurosterling exchange rates 
the sensitivity analysis assumes reasonable movements in foreign exchange and interest rates before the effect of tax the group considers a 
reasonable interest rate movement in libor to be 1 based on interest rate history similarly sensitivity to movements in us dollarsterling and 
eurosterling exchange rates of 10 are shown reflecting changes of reasonable proportion in the context of movement in those currency pairs  
over the last year 
using the above assumptions the following table shows the illustrative effect on the consolidated income statement and equity 
2008 2007
income
gainslosses
£m
equity  
gainslosses 
£m 
income
gainslosses 
£m
equity
gainslosses 
£m
libor rate interest rates 1 increase  60 60 61 61
libor rate interest rates 1 decrease 60 60 61 61
us dollarsterling exchange rates 10 increase  82 782 92 637
eurosterling exchange rates 10 increase 92 183 70 146
us dollarsterling exchange rates 10 decrease 89 860 102 700
eurosterling exchange rates 10 decrease 101 201 77 161
 
the minimum lease payments under finance leases fall due as follows  
2008
total 
£m
2007
total
£m
not later than one year  03 01
later than one year but not more than five years 02 01
 05 02
future finance charges on finance leases  – –
present value of finance lease liabilities  05 02
   
 
88 
17 deferred tax 
deferred tax has been calculated at 28 2007 28 in respect of uk companies being the prevailing corporation tax rate and at the prevailing rates 
for the overseas subsidiaries 
the movement on the deferred tax account is as shown below 
2008 
£m
2007
£m
at 1 october  59 163
acquisition of subsidiary  62 85
transfer to current tax liabilities 82 –
income statement credit  07 102
exchange differences  18 02
share options  02 33
at 30 september  216 59
deferred tax assets have been recognised in respect of all tax losses and other temporary differences giving rise to deferred tax assets because it is 
probable that these assets will be recovered 
no deferred tax is recognised on the unremitted earnings of overseas subsidiaries as the earnings are continually reinvested by the group no tax is 
expected to be payable on them in the foreseeable future 
the movements in deferred tax assets and liabilities prior to the offsetting of balances within the same jurisdiction as permitted by ias 12“income 
taxes” during the year are shown below 
deferred tax assets and liabilities are only offset where there is a legally enforceable right of offset and there is an intention to settle the balances net 
deferred tax  
assets 
intangible  
assets  
£m 
other 
£m
total 
£m
at 1 october 2007 66 17 83
income statement credit  – 10 10
reclassification fromto deferred tax liability 69 30 39
exchange differences  – 02 02
at 30 september 2008  03 55 52
  
liabilities  
at 1 october 2007 235 93 142
income statement chargecredit 59 56 03
deferred tax on intangible assets 74 – 74
reclassification fromto deferred tax asset 69 30 39
acquisition of subsidiary – 12 12
exchange differences 32 16 16
share options – 02 02
transfer to current tax – 82 82
at 30 september 2008 331 63 268
  
net deferred tax liabilityasset  
at 30 september 2008  334 118 216
at 30 september 2007 169 110 59
the deferred tax liability due after more than one year is £331m 2007 £235m   
89
18 share capital 
authorised  
2008 
£m
2007 
£m
1860000000 2007 1860000000 ordinary shares of 1p each 186 186
 
issued and fully paid  
2008 
shares
2008  
£m 
2007 
shares
2007 
£m
at 1 october  1304160154 130 1294280944 129
allotted under share option schemes  5397403 01 9879210 01
at 30 september  1309557557 131 1304160154 130
potential issues of ordinary shares 
certain senior executives hold options to subscribe for shares in the company at prices ranging from 13400p to 72100p under the share option 
schemes approved by shareholders 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 
date of grant 
exercise price 
pence exercise period 
2008
number
2007
number
17 december 1997  8110p 17 december 2000 – 17 december 2007 – 15000
20 january 1998  9875p 20 january 2001 – 20 january 2008 – 150000
15 may 1998  14000p 15 may 2001 – 15 may 2008 – 588480
16 december 1998  13600p 16 december 2001 – 16 december 2008 614370 1290475
7 june 1999  20450p 7 june 2002 – 7 june 2009 766500 1059500
11 february 2000  27550p–46760p 11 february 2000 – 6 january 2010 62987 119137
23 february 2000  72100p 23 february 2003 – 23 february 2010 31250 31250
24 may 2000  54250p 24 may 2003 – 24 may 2010 19037 19037
10 january 2001  30100p 10 january 2004 – 10 january 2011 2220944 2713403
17 january 2001  32975p 17 january 2004 – 17 january 2011 459833 581137
16 may 2001  26400p 16 may 2004 – 16 may 2011 1588503 1795696
2 january 2002  22850p 2 january 2005 – 2 january 2012 3191187 3758614
31 december 2002  13400p 31 december 2005 – 31 december 2012 2293237 2933693
12 may 2003  14700p 12 may 2006 – 12 may 2013 772578 1365985
24 december 2003  17100p 24 december 2006 – 24 december 2013 6701339 8083316
24 may 2004  17200p 24 may 2007 – 24 may 2014 252051 269493
6 january 2005  19800p 6 january 2008 – 6 january 2015 3769565 4544001
12 may 2005  20600p 12 may 2008 – 12 may 2015 1830784 1983695
10 january 2006  25850p 10 january 2009 – 10 january 2016 5047073 5894597
10 january 2007 27000p 10 january 2010 – 10 january 2017 6986236 8119550
20 june 2007 24800p 20 june 2010 – 20 june 2017 195530 247220
10 january 2008 21400p 10 january 2011 – 10 january 2018 9668002 –
17 june 2008 21925p 17 june 2011 – 17 june 2018 246209 –
  46717215 45563279
under the above scheme 4955415 1p ordinary shares were issued during the year for aggregate proceeds of £7822691   
 
90 
18 share capital continued 
under the group’s longterm incentive plan for certain senior executives approved by shareholders on 3 march 2005 the following awards have  
been made 
date of award  vesting date  
2008
number
2007
number
18 march 2005  18 march 2008  – 1808170
12 may 2005  12 may 2008  – 210588
10 january 2006  10 january 2009  1989958 2348990
10 january 2007 10 january 2010 2347292 2793003
20 june 2007 20 june 2010 33000 33000
3 march 2008 3 march 2011 5107983 –
17 june 2008 17 june 2011 333148 –
  9811381 7193751
in addition options were granted under the terms of the sage group plc 1996 savingsrelated share option scheme approved by members on  
7 february 1996 up to 2005 and thereafter under the new scheme approved by the members at the annual general meeting on 2 march 2006  
as follows 
date of grant  
exercise price 
pence exercise period  
2008
number
2007 
number
1 march 2001  24000p 1 march 2008 – 31 august 2008 – 1531
1 march 2002  18040p 1 march 2009 – 31 august 2009 6575 6575
1 march 2003  11200p 1 march 2008 – 31 august 2008 – 132064
1 march 2003 11200p 1 march 2010 – 31 august 2010 13312 14579
1 march 2004  14000p 1 march 2009 – 31 august 2009 101937 104954
1 march 2004  14000p 1 march 2011 – 31 august 2011 34744 34744
1 march 2005  15700p 1 march 2008 – 31 august 2008 965 331306
1 march 2005  15700p 1 march 2010 – 31 august 2010 102970 121915
1 march 2005  15700p 1 march 2012 – 31 august 2012 18284 19422
1 august 2006  18400p 1 august 2009 – 31 january 2010 769091 930309
1 august 2006  18400p 1 august 2011 – 31 january 2012 201098 241173
1 august 2006  18400p 1 august 2013 – 31 january 2014 33450 35308
1 august 2007 20300p 1 august 2010 – 31 january 2011 446269 671566
1 august 2007 20300p 1 august 2012 – 31 january 2013 126097 168521
1 august 2007 20300p 1 august 2014 – 31 january 2015 33588 35319
1 august 2008 17700p 1 august 2011 – 31 january 2012 785306 –
1 august 2008 17700p 1 august 2013 – 31 january 2014 339268 –
1 august 2008 17700p 1 august 2015 – 31 january 2016 15571 –
  3028525 2849286
under the above scheme 441988 1p ordinary shares were issued during the year for aggregate proceeds of £636238 
the market price of the shares of the company at 30 september 2008 was 19530p and the highest and lowest prices during the year were 25175p 
and 18710p respectively   
91
19 sharebased payments 
the total charge for the year relating to employee sharebased payment plans was £76m 2007 £88m all of which related to equitysettled share
based payment transactions after deferred tax the total charge was £52m 2007 £61m a reconciliation of share movements for options granted 
after 7 november 2002 to which ifrs 2 is applicable is shown below 
esos 
under the 1999 executive share option scheme “esos” grants are made at an exercise price which approximates to the share price at the date  
of the grant and are made to senior executives and managers across the group as well as to other staff with high potential or to recognise significant 
achievement or local market practice the annual grant is normally made after the preliminary declaration of the annual results under the rules of  
the esos as amended at the annual general meeting in 2005 the annual grant of options to an individual is limited to shares worth up to 300  
of base salary in practice annual grants to executive directors are limited to shares under option worth 100 of base salary except in exceptional 
circumstances such as a promotion or recruitment or to reflect local market practice 
the performance targets governing the vesting of options are based on stretching eps growth measured over a fixed three year period from the start of 
the financial year in which the grant is made 30 of options will vest at the end of the period if the increase in eps exceeds retail prices index “rpi”  
by 15 an average of 5 per year and 100 of those options will vest at that time only if rpi is exceeded in that period by 27 an average of 9  
per year between those targets options will vest on a straightline basis if those targets are not met at the end of the three year period then no further 
retesting of the performance criteria will be undertaken and the options will lapse 
options were valued using the blackscholes optionpricing model performance conditions were included in the fair value calculations the fair value 
per option granted and the assumptions used in the calculation are as follows 
grant date  
december 
2003  
may  
2004 
january 
2005
may 
2005
january 
2006
january 
2007
june  
2007 
january 
2008
june 
2008
share price at  
grant date £175  £172  £190 £207 £253 £272 £249 £213 £221
exercise price  £171 £172 £198 £206 £259 £270 £248 £214 £219
number of employees  449 21 139 134 411 600 14 462 2
shares under option  6701339 252051 3769565 1830784 5047073 6986236 195530 9668002 246209
vesting period years  3 3 33 333 33
expected volatility  62 57 52 48 40 30 25 24 26
option life years  10 10 10 10 10 10 10 10 10
expected life years  4 4 4 4 4 4 4 4 4
risk free rate  45 51 44 43 41 50 57 42 53
expected dividends 
expressed as a 
dividend yield 09 10 16 16 16 14 30 30 30
fair value per option  £0855 £0794 £0802 £0777 £0799 £0762 £0539 £0390 £0475
the expected volatility is based on historical volatility over the last four years the expected life is the average expected period to exercise the risk free 
rate of return is the yield on zerocoupon uk government bonds of a term consistent with the assumed option life a reconciliation of option movements 
over the year is shown below 
number
’000s
2008 
weighted  
average  
exercise 
price 
£ 
number
’000s
2007
weighted 
average 
exercise 
price
£
outstanding at 1 october  33442 213 32218 188
granted  10376 214 8958 269
forfeited  2920 246 2093 227
exercised  3135 164 5641 159
outstanding at 30 september  37763 214 33442 213
exercisable at 30 september  16543 183 12580 162
   
 
92 
19 sharebased payments continued 
 
2008
weighted average 
remaining life years
2007
weighted average 
remaining life years
range of  
exercise prices 
weighted  
average 
exercise 
price 
£ 
number  
of shares expected contractual
weighted 
average 
exercise 
price
£
number  
of shares expected contractual
134 – 270  214 37763 08 73 213 33442 08 75
the weighted average share price during the period for options exercised over the year was 21102p 2007 26121p 
the sage group psp 
the performance share plan the “plan” was approved by shareholders at the annual general meeting in 2005 annual grants of performance shares 
will normally be made to executive directors and senior executives across the group after the preliminary declaration of the annual results this plan is 
currently operated in conjunction with the esos 
annual awards under the plan are limited to shares worth up to 150 of base salary in practice annual grants to executive directors are limited to 
shares worth 100 of base salary except in exceptional circumstances such as a promotion or recruitment or to reflect local market practice 
the performance shares are subject to performance conditions measuring the group’s total shareholder return “tsr” against a comparator group  
of international software and computer services companies tsr has been chosen as the performance condition because it helps to align the interests 
of award holders with shareholders and complements the focus on group financial results that arises from using eps under the esos and annual 
bonus plan 
the comparator group for awards made in 2008 comprised the following companies 
� adobe systems � cegid  � logicacmg  � oracle 
� arm holdings  � dassault systemes  � micro focus international  � salesforcecom 
� autonomy � exact � microsoft  � sap 
� blackbaud  � intuit  � misys � software ag 
� cap gemini � lawson software � myob  
25 of shares vest for median tsr performance as compared to the comparator group whilst all shares vest for upper quintile top 20 tsr 
performance between those two points shares will vest on a straightline basis tsr will be measured over a single three year period from the start  
of the financial year in which the grant is made to establish whether the criteria have been met and if these criteria are not met on the third anniversary  
of grant the performance shares will lapse 
awards were valued using the monte carlo optionpricing model performance conditions were included in the fair value calculations the fair value  
per award granted and the assumptions used in the calculation are as follows 
grant date  
january 
2006
january 
2007
june  
2007 
march 
2008
june 
2008
share price at grant date  £259 £272 £249 £200 £221
exercise price  £000 £000 £000 £000 £000
number of employees  81 94 2 118 2
shares under award  1989958 2347292 33000 5107983 333148
vesting period years  333 33
expected volatility  32 24 22 25 27
award life years  333 33
expected life years  3 3 3 3 3
risk free rate  42 51 57 40 53
expected dividends expressed as a dividend yield  00 00 00 00 00
fair value per award  £1401 £1478 £1041 £1088 £1254
   
93
the expected volatility is based on historical volatility over the last three years the expected life is the average expected period to exercise the risk free 
rate of return is the yield on zerocoupon uk government bonds of a term consistent with the assumed award life a reconciliation of award movements 
over the year is shown below 
number 
’000s
2008  
weighted 
average 
exercise  
price  
£ 
number 
’000s
2007 
weighted
average
exercise 
price 
£
outstanding at 1 october  7194 – 4554 –
awarded  5568 – 3028 –
forfeited  1862 – 388 –
exercised  1089 – ––
outstanding at 30 september  9811 – 7194 –
exercisable at 30 september  – – ––
 
2008
weighted average 
remaining life years
2007
weighted average 
remaining life years
range of  
exercise prices 
weighted  
average 
exercise 
price 
£ 
number  
of shares expected contractual
weighted 
average 
exercise 
price
£
number  
of shares expected contractual
na  – 9811 17 17 – 7194 15 15
the sage group savingsrelated share option plan the “saye plan” 
in february 1996 the company introduced an inland revenue approved savingsrelated share option scheme allowing all uk employees to apply  
for an option to acquire ordinary shares in the company “shares” at a price per share which was not less than 80 of the market value of those 
shares when invitations for options were made the acquisition of the shares was funded by the proceeds of a savings account with a bank or building 
society the original scheme adopted in 1996 continued in accordance with its terms for ten years and expired in february 2006 a new scheme was 
approved by the members at the annual general meeting held on 2 march 2006 
eligibility 
all uk employees including executive directors of the company and its participating subsidiaries who have completed at least one year’s continuous 
service and are assessable to employment income tax are eligible to participate in the saye plan the directors may offer participation to other 
employees and may alter the length of service required to qualify to a different period not exceeding five years 
employee contributions 
an employee who wishes to participate in the saye plan will enter into a contract the “saye contract” with a savings body designated by the 
directors for the purpose of the saye plan to make monthly contributions by deduction from their pay of not more than the maximum contribution 
permitted from time to time by hmrc currently £250 
a taxfree bonus currently equivalent to 14x or 44x the monthly contribution will be paid on completion of 36 or 60 monthly savings contributions 
respectively and another taxfree bonus currently 84x the monthly contribution including the payment at the end of 60 months will be paid after  
a further two years if the savings plus the initial bonus are not withdrawn prior to that date 
exercise price 
an employee who applies for the grant of an option to acquire shares will do so at a price the “exercise price” which is determined by the directors  
but which is not less than the greater of 
• 80 of the middle market quotation of a share on the dealing day prior to the date of invitation as derived from the london stock exchange daily 
official list or if the directors so decide 80 of the average of the middle market quotations over the three dealing days prior to the date of the 
invitation or 80 of the middle market quotations at such other time or times agreed in advance with hmrc and 
• in the case of an option over unissued shares the nominal value of a share 
grant of options 
each option is granted over a number of shares which when multiplied by the exercise price does not exceed the total monthly contributions plus the 
bonus payable on the maturity of the saye contract there will be no payment for the grant of an option invitations to apply for options must be made 
within a period of 42 days after 
• approval of the saye plan by hmrc or 
• the publication by the company of its interim or final results each year or 
• the day after the company’s annual general meeting or 
• any day on which any change to the savingsrelated share option schemes legislation is announced or made or 
• if the directors resolve that exceptional circumstances exist which justify the operation of the saye plan   
 
94 
19 sharebased payments continued 
exercise of options 
in normal circumstances an option may be exercised at any time within six months following maturity of the saye contract using the proceeds of the 
saye contract and the applicable bonus 
options were valued using the blackscholes optionpricing model performance conditions were not included in the fair value calculations the fair 
value per option granted and the assumptions used in the calculation are as follows 
grant date   
march 
2003 
march 
2004 
march 
2004
march 
2005 
march  
2005  
march 
2005 
august 
2006 
share price at grant date   £134 £193 £193 £206 £206  £206 £228 
exercise price   £112 £140 £140 £157 £157  £157 £184 
number of employees   1 35 10 1 32 6 372
shares under option   13312 101937 34744 965 102970 18284 769091
vesting period years   7 5 7 3 5  7 3 
expected volatility   52 59 54 44 55  54 26 
option life years   7 5 7 3 5  7 3 
expected life years   7 5 7 3 5  7 3 
risk free rate   40 46 47 47 47  47 47 
expected dividends expressed as a 
dividend yield   11 09 09 16 16  16 16 
fair value per option   £0746 £1135 £1192 £0847 £1092 £1176 £0706
 
grant date  
august  
2006  
august 
2006 
august 
2007 
august 
2007 
august 
2007 
august  
2008  
august 
2008 
august 
2008 
share price at grant date  £228  £228 £228 £228 £228 £198 £198 £198
exercise price  £184  £184 £203 £203 £203 £177 £177 £177
number of employees  71 13 346 58 9 461 95 10
shares under option  201098 33450 446269 126097 33588 785306 339268 15571
vesting period years  5  7 3 5 7 3  5 7
expected volatility  42  51 22 34 45 28 27 39
option life years  5  7 3 5 7 3  5 7
expected life years  5  7 3 5 7 3  5 7
risk free rate  47  46 54 53 52 48 48 48
expected dividends expressed as a 
dividend yield  16  16 30 30 30 30 30 30
fair value per option £1028 £1255 £0503 £0750 £0965 £0476 £0543 £0746
the expected volatility is based on historical volatility over the last three five or seven years consistent with the option life the expected life is the 
average expected period to exercise the risk free rate of return is the yield on zerocoupon uk government bonds of a term consistent with the 
assumed option life a reconciliation of option movements over the year is shown below 
number 
’000s
2008  
weighted  
average  
price 
£ 
number 
’000s
2007 
weighted 
average 
price
£
outstanding at 1 october  2841 179 2552 165
awarded  1182 177 914 203
forfeited  175 184 90 171
surrendered 384 193 180 181
exercised  442 144 355 140
outstanding at 30 september  3022 182 2841 179
exercisable at 30 september  1 157 ––
   
95
2008
weighted average 
remaining life years
2007
weighted average 
remaining life years
range of  
exercise prices 
weighted  
average 
exercise 
price 
£ 
number  
of shares expected contractual
weighted 
average 
exercise 
price
£
number  
of shares expected contractual
112 – 203 182 3022 24 24 179 2841 24 24
20 share premium account 
£m
at 1 october 2006  4628
premium on shares issued during the year under share option schemes  154
at 1 october 2007  4782
premium on shares issued during the year under share option schemes  84
at 30 september 2008  4866
21 other reserves 
translation  
reserve  
£m 
other 
reserve 
£m
total other 
reserves 
£m
at 1 october 2006  174 611 437
exchange adjustments net of tax  516 – 516
at 30 september 2007 690 611 79
exchange adjustments net of tax  1171 – 1171
at 30 september 2008  481 611 1092
translation reserve 
the translation reserve represents the accumulated exchange differences arising since the transition to ifrs from the following sources 
• the impact of the translation of subsidiaries with a functional currency other than sterling and 
• exchange differences arising on hedging instruments that are designated hedges of a net investment in foreign operations net of tax  
where applicable 
exchange differences arising prior to the ifrs transition were offset against retained earnings 
other reserve 
other reserves brought forward relate to the merger reserve which was present under uk gaap and frozen on transition to ifrs  
22 retained earnings 
 
2008 
£m
2007 
£m
at 1 october  5675 4581
profit for the year  1663 1541
sharebased payments  76 88
dividends paid  1062 490
actuarial gainloss on employment benefits 31 12
equity movement of deferred tax  02 33
at 30 september  6381 5675
the actuarial gain of £31m 2007 loss £12m is made up of net gains of £28m 2007 loss £18m on postemployment benefits note 28 and  
a gain of £03m 2007 gain £06m on other longterm employee benefits  
cumulative goodwill relating to acquisitions made prior to 1998 which has been eliminated against reserves amounts to £2674m 2007 £2364m    
 
96 
22 retained earnings continued 
treasury shares 
the group holds treasury shares in a trust which was set up for the benefit of group employees the trust purchases the company’s shares in  
the market for use in connection with the group’s sharebased payments arrangements the trust holds 3648697 ordinary shares in the company 
2007 4755602 at a cost of £10218347 2007 £13272933 and a nominal value of £36487 2007 £47556 the trust originally purchased  
the shares in february 2006 with the cost being deducted from retained earnings  
these shares were originally acquired by the trust in the open market using funds provided by the company to meet obligations under the 
performance share plan during the year 1106905 shares were utilised to meet these obligations the costs of funding and administering the scheme 
are charged to the profit and loss account of the company in the period to which they relate the market value of the shares at 30 september 2008 
was £71m 2007 £118m 
23 shareholders’ funds and reconciliation of changes in shareholders’ equity 
 
share 
capital
note 18 
£m
share 
premium
note 20 
£m
retained 
earnings
note 22 
£m
other 
reserves 
note 21 
£m
equity  
funds  
£m 
minority 
interest
note 24 
£m
total 
equity 
£m
at 1 october 2006 129 4628 4581 437 9775 01 9776
exchange adjustments  – – – 516 516 – 516
new shares issued 01 – – – 01 – 01
purchase of minority interest – – – – – 01 01
profit for the year  – – 1541 – 1541 – 1541
equity movement of deferred tax  – – 33 – 33 – 33
share options   
– proceeds from shares issued  – 154 – – 154 – 154
– value of employee services  – – 88 – 88 – 88
actuarial loss on employment benefits – – 12 – 12 – 12
dividends  – – 490 – 490 – 490
at 30 september 2007  130 4782 5675 79 10508 – 10508
exchange adjustments  – – – 1171 1171 – 1171
new shares issued  01 – – – 01 – 01
profit for the year  – – 1663 – 1663 – 1663
equity movement of deferred tax  – – 02 – 02 – 02
share options   
– proceeds from shares issued  – 84 – – 84 – 84
– value of employee services  – – 76 – 76 – 76
actuarial gain on employment benefits – – 31 – 31 – 31
dividends  – – 1062 – 1062 – 1062
at 30 september 2008 131 4866 6381 1092 12470 – 12470
24 minority interest 
 
2008 
£m
2007 
£m
at 1 october  – 01
purchase of minority interest  – 01
at 30 september  – –
   
97
25 cash flow and net debt 
reconciliation of profit for the year to cash generated from continuing operations  
2008 
£m
2007 
£m
profit for the year  1663 1541
adjustments for  
taxation  747 692
finance income  38 36
finance expenses  302 355
amortisation of intangible assets  367 335
depreciation of property plant and equipment  185 162
loss on disposal of property plant and equipment  – 13
loss on disposal of intangible assets – 05
equitysettled sharebased transactions  76 88
exchange movements  23 18
changes in working capital excluding effects of acquisitions and disposals of subsidiaries 
� decreaseincrease in inventories  11 01
� increase in trade and other receivables  139 99
� increasedecrease in payables  35 30
� increase in deferred income  188 164
cash generated from continuing operations  3420 3171
 
reconciliation of net cash flow to movement in net debt inclusive of finance leases  
2008 
£m
2007 
£m
decrease in cash in the year preexchange movements  33 141
cash outflow from decrease in loans finance leases and cash collected from customers  400 672
change in net debt resulting from cash flows  367 531
loans acquired with subsidiaries 09 05
noncash movements  10 03
exchange movements  661 310
movement in net debt in the year  313 839
net debt at 1 october  5097 5936
net debt at 30 september 5410 5097
 
analysis of change in net debt  
inclusive of finance leases 
at 
1 october 
2007 
£m
cash flow 
£m
acquisitions 
£m
other  
£m 
exchange 
movements 
£m
at 
30 september 
2008 
£m
net cash at bank and in hand  656 33 – – 78 701
loans due within one year  02 127 07 – – 136
finance leases due within one year 01 01 – – 03 03
loans due after more than one year 5611 595 – 10 717 5743
finance leases due after more than one year 01 – 02 – 01 02
cash collected from customers  138 69 – – 20 227
total  5097 367 09 10 661 5410
included in cash above is £227m 2007 £138m relating to cash collected from customers which the group is contracted to pay onto another party  
a liability for the same amount is included in trade and other payables on the balance sheet and is classified within net debt above   
 
98 
26 acquisitions and disposals  
a acquisition of kcs global holdings limited 
on 26 october 2007 the group completed the acquisition of kcs global holdings limited “kcs” for a consideration of £204m inclusive of £03m 
related costs total goodwill arising on the acquisition is £162m  
in the purchase 100 of the voting shares were acquired from the date of the acquisition to 30 september 2008 the acquisition contributed £56m  
to revenue and £11m to profit 
all intangible assets were recognised at their respective fair values the residual excess over the net assets acquired is recognised as goodwill  
details of net assets acquired and goodwill are as follows 
£m
purchase consideration  
– cash paid 199
– direct costs relating to the acquisition 03
– deferred consideration 02
total purchase consideration 204
– fair value of net identifiable assets see below 42
goodwill 162
the value of goodwill represents anticipated synergies expected to result from integration of operations into our existing uk business and a previous 
acquisition in this sector this acquisition will enhance our existing product and services portfolio and add scale to our hr and payroll operations  
in the uk goodwill also includes the value of the acquired workforce 
kcs acquisition 
carrying values 
preacquisition 
£m
fair value 
£m
intangible fixed assets  73 78
property plant and equipment  02 02
receivables  13 13
payables  12 12
deferred income  16 16
taxation – current 02 02
taxation – deferred – 23
cash and cash equivalents  02 02
net assets acquired  60 42
goodwill  162
consideration  204
consideration satisfied by  
cash  202
deferred consideration  02
consideration 204
the outflow of cash and cash equivalents on the acquisition of kcs is calculated as follows  
£m
cash consideration  202
cash acquired  02
net cash outflow 200
the intangible assets acquired as part of the acquisition of kcs can be analysed as follows 
£m
brands  05
customer relationships  45
technology  28
 78
further details of these are given in note 8   
99
b acquisition of hallco 1390 ltd trading as tekton group ltd 
on 29 march 2008 the group completed the acquisition of hallco 1390 ltd which trades under the name of tekton group ltd “tekton” for a 
consideration of £211m inclusive of £04m related costs total goodwill arising on the acquisition is £164m the fair values of net assets acquired  
are based on provisional assessments pending final determination of certain assets and liabilities 
in the purchase 100 of the voting shares were acquired from the date of the acquisition to 30 september 2008 the acquisition contributed £37m  
to revenue and loss of £01m details of net assets acquired and goodwill are as follows 
£m
purchase consideration  
– cash paid 197
– direct costs relating to the acquisition 04
– deferred consideration 10
total purchase consideration 211
– fair value of net identifiable assets see below 47
goodwill 164
goodwill recognised represents the value of the assembled workforce at the time of acquisition with specific knowledge and expertise in the specialised 
field of development implementation and support services related to construction software the value of goodwill also represents prospective future 
economic benefits that are anticipated will be derived from enhancing the portfolio of products and services to our existing customer base with those 
offered by tekton  
the fair value adjustments contain some provisional amounts which will be finalised in the 2009 accounts 
tekton acquisition 
carrying values 
preacquisition 
£m
provisional 
fair value 
£m
intangible fixed assets  122 71
property plant and equipment  03 02
receivables  23 21
payables  14 14
borrowings 09 09
deferred income  17 17
taxation – current 01 01
taxation – deferred – 21
cash and cash equivalents  13 13
net assets acquired  122 47
goodwill  164
consideration  211
consideration satisfied by  
cash  201
deferred consideration  10
consideration 211
all intangible assets were recognised at their respective fair values the residual excess over the net assets acquired is recognised as goodwill  
the outflow of cash and cash equivalents on the acquisition of tekton is calculated as follows  
£m
cash consideration  201
cash acquired  13
net cash outflow 188
the intangible assets acquired as part of the acquisition of tekton can be analysed as follows 
£m
customer relationships  30
technology 41
 71
further details of these are given in note 8   
 
100 
26 acquisitions and disposals continued 
c acquisition of eurowin millor soft sl millor soft consulting sl millor soft imatge sl and millor soft internet sl 
on 14 july 2008 the group completed the acquisition of eurowin which comprises millor soft sl millor soft consulting sl millor soft imatge  
sl and millor soft internet sl for a consideration of £119m inclusive of £01m related costs total goodwill arising on the acquisition is £90m  
the fair values of net assets acquired are based on provisional assessments pending final determination of certain assets and liabilities 
in the purchase 100 of the voting shares were acquired from the date of the acquisition to 30 september 2008 the acquisition contributed £18m  
to revenue and £nil to profit 
details of net assets acquired and goodwill are as follows 
£m
purchase consideration  
– cash paid 118
– direct costs relating to the acquisition 01
total purchase consideration 119
– fair value of net identifiable assets see below 29
goodwill 90
goodwill represents the value of the potential synergies workforce in place and anticipated future benefits from strengthening our market position in the 
entrylevel market space in spain the value of goodwill also represents benefit that is anticipated will be derived from enhancing the product portfolio 
offered by eurowin to their existing customer base  
the fair value adjustments contain some provisional amounts which will be finalised in the 2009 accounts 
eurowin acquisition 
carrying values 
preacquisition 
£m
provisional 
fair value 
£m
intangible fixed assets  – 43
property plant and equipment  02 02
inventories 04 04
receivables  08 08
payables  17 17
deferred income  08 08
taxation – deferred 03 10
cash and cash equivalents  07 07
net assets acquired  01 29
goodwill  90
consideration satisfied by cash 119
all intangible assets were recognised at their respective fair values the residual excess over the net assets acquired is recognised as goodwill  
the outflow of cash and cash equivalents on the acquisition of eurowin is calculated as follows  
£m
cash consideration  119
cash acquired  07
net cash outflow 112
the intangible assets acquired as part of the acquisition of eurowin can be analysed as follows 
£m
brands 10
customer relationships  13
technology 20
 43
further details of these are given in note 8 
   
101
d other acquisitions made in the year 
the following acquisitions each of the entire share capital of the relevant company were made during the year 
• eig maroc sarl was acquired on 7 november 2007 for a cash consideration of £10m including costs the fair value of assets acquired was 
£01m resulting in goodwill of £11m  
• dcs automative ibérica sl was acquired on 7 july 2008 for a cash consideration of £03m including costs the fair value of assets acquired  
was £01m resulting in goodwill of £04m 
• européenne alliance technologie sas api was acquired on 10 september 2008 for a cash consideration of £120m including costs the fair 
value of assets acquired was £21m resulting in goodwill of £99m 
other acquisitions 
carrying values
preacquisition 
£m
provisional 
fair value 
£m
intangible fixed assets  10 –
inventories 01 01
receivables 03 03
payables 17 16
taxation – current 01 –
cash and cash equivalents 32 32
deferred income 01 01
net assets acquired  29 19
goodwill  114
consideration satisfied by cash 133
the fair value adjustments contain some provisional amounts which will be finalised in the 2009 accounts 
goodwill represents a combination of the acquired workforce potential synergies and other probable future economic benefits that it is anticipated will 
be derived from these acquisitions 
the outflow of cash and cash equivalents on the acquisition of the other acquisitions is calculated as follows 
£m
cash consideration  133
cash acquired  32
net cash outflow 101
 
e contribution of acquisitions 
the contribution to group revenue and net profit had the acquisitions occurred at the beginning of the year has not been disclosed as it would be 
impracticable to determine these amounts due to the following reasons 
• certain of the acquisitions had a different year end to the group 
• certain of the acquisitions accounted under a different gaap to the group making accounting information not comparable to the rest of the group 
and 
• in certain instances accounting information is not sufficient to determine accurately the fair value adjustments that would have been made to the 
balance sheets one year ago 
f other 
during the year ended 30 september 2008 adjustments were made in respect of goodwill on prior year acquisitions of £142m due to additional cash 
acquisition payments of £162m reduction in deferred consideration of £33m and decrease in net assets of £13m following the reappraisal of the fair 
value of assets and liabilities   
 
102 
26 acquisitions and disposals continued 
g analysis of net outflow of cash in respect of acquisitions 
the outflow of cash and cash equivalents on the acquisitions is calculated as follows 
 note £m
kcs 26a 200
tekton 26b 188
eurowin 26c 112
other acquisitions  26d 101
payments in relation to previous years’ acquisitions  26f 162
payment of deferred consideration  48
net cash outflow in respect of acquisitions  811
h analysis of goodwill  
the total additions to goodwill are calculated as follows  
 note £m
kcs 26a 162
tekton 26b 164
eurowin 26c 90
other acquisitions  26d 114
adjustments in relation to previous years’ acquisitions  26f 142
net movement in goodwill on acquisitions  672
27 employees and directors 
average number of people employed  
2008 
number
2007 
number
by territory 
uk  ireland  2695 2200
mainland europe  5653 4703
north america  4939 5158
rest of world  1752 1470
 15039 13531
 
staff costs note 
2008 
£m
2007 
£m
wages and salaries   4926 4257
social security costs   865 690
sharebased payments  19 76 88
other pension costs  28 88 80
  5955 5115
 
key management compensation  
2008 
£m 
2007 
£m
salaries and shortterm employee benefits  63 57
postemployment benefits  06 02
sharebased payments  21 16
 90 75
the key management figures given above include directors   
103
28 pension commitments 
the group has established a number of pension schemes around the world covering many of its employees all of these schemes are defined 
contribution schemes with the exception of two small schemes in switzerland  
defined contribution schemes  
pension costs for defined contribution schemes are as follows note 
2008 
£m
2007 
£m
defined contribution schemes  27 74 74
defined benefit plan  
the most recent actuarial valuations of the swiss pension plans were performed by expertisa ag in october 2008  
the principal assumptions made by the actuaries were 
2008 

2007 

rate of increase in pensionable salaries  200 200
rate of increase in pensions in payment and deferred pensions  050 050
mortality assumption  100 100
discount rate  350 300
inflation assumption  150 100
expected return on plan assets  400 400
pensions and other postemployment obligations  
the amounts recognised in the balance sheet are determined as follows 
2008 
£m
2007 
£m
present value of funded obligations  200 179
fair value of plan assets  161 126
net liability recognised in the balance sheet  39 53
the expected return on plan assets is based on market expectation at the beginning of the period for returns over the entire life of the benefit obligation 
the major categories of plan assets as a percentage of total plan assets  
are as follows £m
2008  
 £m
2007 

bonds 76 472 36 285
equities  15 93 15 119
property  10 62 06 48
other  60 373 69 548
 161 1000 126 1000
the expected return on plan assets is determined by considering the expected returns available on the assets underlying the current investment policy 
expected yields on fixed interest investments are based on gross redemption yields as at the balance sheet date expected returns on equity and 
property investments reflect longterm real rates of return experienced in the respective markets 
expected contributions to postemployment benefit plans for the year ending 30 september 2009 are £11m 
the amounts recognised in the income statement are as follows  note 
2008 
£m
2007 
£m
interest cost   06 05
expected return on plan assets   06 06
current service cost   14 07
total included within staff costs  27 14 06
the entire cost is included within selling and administrative expenses    
 
104 
28 pension commitments continued 
changes in the present value of the defined benefit obligation are as follows  
2008 
£m
2007 
£m
present value of obligation – 1 october  179 117
exchange movement  36 03
business combinations  – 53
service cost  14 07
plan participant contributions 07 05
interest cost  06 05
benefits paid  07 53
actuarial gain on benefit obligation  35 58
present value of obligation – 30 september  200 179
 
changes in the fair value of plan assets are as follows 
2008 
£m
2007 
£m
fair value of plan assets – 1 october  126 96
exchange movement  25 03
business combinations  – 39
expected return on plan assets  06 06
employer’s contributions  11 05
employee’s contributions  07 06
benefits paid  07 53
actuarial loss on plan assets  07 76
fair value of plan assets – 30 september  161 126
 
analysis of the movement in the balance sheet liability 
2008 
£m
2007 
£m
at 1 october  53 21
exchange movement  11 –
business combinations  – 14
total expense as recognised in the income statement 14 06
contributions paid  11 06
actuarial gainloss 28 18
at 30 september  39 53
the actual return on plan assets was £01m 2007 £70m  
history of experience gains and losses  
2008 
£m
2007  
£m 
2006 
£m
2005 
£m
present value of defined benefit obligation  200 179 117 112 
fair value of plan assets  161 126 96 88 
deficit  39 53 21 24 
experience adjustments on plan liabilities  35 58 01 01 
change in assumptions adjustment on plan assets – – – 03
experience adjustments on plan assets  07 76 01 01 
total actuarial gainloss  28 18 – 01
 
cumulative actuarial gains and losses recognised in equity 
2008 
£m
2007 
£m
at 1 october 19 01
actuarial gainslosses recognised in the year before tax 28 18
at 30 september 09 19
   
105
29 operating lease commitments – minimum lease payments 
total future commitments under noncancellable operating leases expiring
property 
£m
2008  
vehicles  
plant and  
equipment  
£m 
property 
£m
2007 
vehicles 
plant and 
equipment 
£m
within one year  67 07 53 07
later than one year and less than five years  622 37 402 40
after five years  937 – 1053 –
 1626 44 1508 47
the group leases various offices and warehouses under noncancellable operating lease agreements these leases have various terms escalation 
clauses and renewal rights the group also leases vehicles plant and equipment under noncancellable operating lease agreements 
30 contingent liabilities 
the group had no contingent liabilities at 30 september 2008 2007 none 
31 related party transactions 
the group has taken advantage of the exemption available under ias 24 “related party disclosures” not to disclose details of transactions with  
its subsidiary undertakings there are no other external related parties 
32 principal subsidiaries 
detailed below is a list of those subsidiaries which in the opinion of the directors principally affect the amount of the profit or the amount of the assets  
of the group the group percentage of equity capital and voting rights is 100 and all of these subsidiaries are wholly owned and are engaged in the 
development distribution and support of business management software and related products and services for small and mediumsized businesses 
incorporated subsidiaries 
name  country of incorporation
sage uk limited  uk
sage hibernia limited  ireland
sage software inc  us
sage payment solutions inc  us
sage software healthcare inc  us
sage software canada ltd  canada
ciel sas  france
sage sas  france
adonix sas  france
sage holding france sas france
xrt sas france
sage software gmbh germany
sage bäurer gmbh  germany
sage schweiz ag  switzerland
sage simultan ag  switzerland
sage proconcept sa switzerland
sage sp sa  spain
sage logic control sl  spain
sage symfonia sp zoo  poland
micropay pty ltd  australia
handisoft software pty ltd  australia
sage business solutions pty ltd  australia
softline pty ltd  south africa
sage software asia pte ltd singapore
ubs corporation sdn bhd  malaysia
sage software shanghai co ltd  china
   
independent auditors’ report to  
the members of the sage group plc 
 
106 
we have audited the group financial statements of the sage group plc 
for the year ended 30 september 2008 which comprise the consolidated 
income statement the consolidated statement of recognised income and 
expense the consolidated balance sheet the consolidated cash flow 
statement and the related notes these group financial statements have 
been prepared under the accounting policies set out therein 
we have reported separately on the parent company financial statements 
of the sage group plc for the year ended 30 september 2008 and on  
the information in the remuneration report that is described as having 
been audited 
respective responsibilities of directors and auditors 
the directors’ responsibilities for preparing the annual report and the 
group financial statements in accordance with applicable law and 
international financial reporting standards “ifrss” as adopted by the 
european union are set out in the statement of directors’ responsibilities 
our responsibility is to audit the group financial statements in accordance 
with relevant legal and regulatory requirements and international 
standards on auditing uk and ireland this report including the opinion 
has been prepared for and only for the company’s members as a body  
in accordance with section 235 of the companies act 1985 and for no 
other purpose we do not in giving this opinion accept or assume 
responsibility for any other purpose or to any other person to whom this 
report is shown or into whose hands it may come save where expressly 
agreed by our prior consent in writing 
we report to you our opinion as to whether the group financial 
statements give a true and fair view and whether the group financial 
statements have been properly prepared in accordance with the 
companies act 1985 and article 4 of the ias regulation we also report 
to you whether in our opinion the information given in the directors’ report 
is consistent with the group financial statements the information given  
in the directors’ report includes that specific information presented in the 
business review that is cross referred from the business review section  
of the directors’ report 
in addition we report to you if in our opinion we have not received all the 
information and explanations we require for our audit or if information 
specified by law regarding directors’ remuneration and other transactions 
is not disclosed 
we review whether the corporate governance statement reflects the 
company’s compliance with the nine provisions of the combined code 
2006 specified for our review by the listing rules of the financial 
services authority and we report if it does not we are not required to 
consider whether the board’s statements on internal control cover all  
risks and controls or form an opinion on the effectiveness of the group’s 
corporate governance procedures or its risk and control procedures 
we read other information contained in the annual report and consider 
whether it is consistent with the audited group financial statements  
the other information comprises only the chairman’s welcome the 
business review the directors’ report the corporate governance 
statement the nonaudited information in the remuneration report and  
all of the other information listed on the contents page we consider  
the implications for our report if we become aware of any apparent 
misstatements or material inconsistencies with the group financial 
statements our responsibilities do not extend to any other information 
basis of audit opinion 
we conducted our audit in accordance with international standards  
on auditing uk and ireland issued by the auditing practices board  
an audit includes examination on a test basis of evidence relevant to  
the amounts and disclosures in the group financial statements it also 
includes an assessment of the significant estimates and judgements 
made by the directors in the preparation of the group financial 
statements and of whether the accounting policies are appropriate to the 
group’s circumstances consistently applied and adequately disclosed 
we planned and performed our audit so as to obtain all the information 
and explanations which we considered necessary in order to provide  
us with sufficient evidence to give reasonable assurance that the group 
financial statements are free from material misstatement whether caused 
by fraud or other irregularity or error in forming our opinion we also 
evaluated the overall adequacy of the presentation of information  
in the group financial statements 
opinion 
in our opinion 
• the group financial statements give a true and fair view in 
accordance with ifrss as adopted by the european union of the 
state of the group’s affairs as at 30 september 2008 and of its profit 
and cash flows for the year then ended 
• the group financial statements have been properly prepared in 
accordance with the companies act 1985 and article 4 of the  
ias regulation and 
• the information given in the directors’ report is consistent with the 
group financial statements 
 
 
pricewaterhousecoopers llp 
chartered accountants and registered auditors 
newcastle upon tyne  
17 december 2008  company balance sheet 
at 30 september 2008 
prepared using uk generally accepted accounting practice “uk gaap” 
107
note 
2008 
£m
 2007 
£m
fixed assets   
investments  2 15441 15440
  15441 15440
current assets   
debtors  3 2577 8995
cash at bank and in hand   03 –
    2580 8995
  
creditors amounts falling due within one year  4  4991 9824
  
net current liabilities  2411 829
  
total assets less current liabilities   13030 14611
  
creditors amounts falling due in more than one year  5  5749 5613
  
net assets   7281 8998
  
capital and reserves   
called up share capital  6 131 130
share premium account 7 4866 4782
treasury shares  7 102 133
merger reserve  7 611 611
profit and loss account  7 1775 3608
total shareholders’ funds   7281 8998
the financial statements on pages 107 to 110 were approved by the board of directors on 17 december 2008 and are signed on their behalf by 
p a walker   p s harrison 
director    director 
   
notes to the accounts – company 
for the year ended 30 september 2008 
108 
parent company accounting policies  
a basis of accounting 
these financial statements have been prepared under the historical cost convention with the exception of sharebased payments which are measured 
at fair value at the date of grant and in accordance with the companies act 1985 and applicable accounting standards in the united kingdom  
a summary of the more important company accounting policies which have been consistently applied is set out below 
b foreign currency translation 
foreign currency assets and liabilities are translated into sterling at rates of exchange ruling at the yearend differences arising on the retranslation of 
the net investments and the results for the year are taken directly to reserves together with differences on foreign currency borrowings to the extent that 
they are used to finance or provide a hedge against equity investments in foreign enterprises all other exchange differences are dealt with in the profit 
and loss account 
c deferred tax 
deferred tax is accounted for under frs 19 “deferred tax” which requires a form of full provision for accounting for deferred tax called the 
incremental liability approach deferred tax is provided on timing differences where the company has an obligation to pay more tax in the future  
as a result of those timing differences deferred tax assets are only recognised if it is considered more likely than not that there will be suitable profits 
from which the future reversal of the underlying timing differences can be deducted 
as permitted by frs 19 the company has adopted a policy of not discounting deferred tax assets and liabilities 
d investments 
fixed asset investments are stated at cost less provision for any diminution in value 
e parent company profit and loss account and cash flow statement 
the amount of loss for the financial year before dividends within the accounts of the parent company is £795m 2007 £524m there is no material 
difference between the profits and losses as reported above and historical cost profits and losses and there are no other gains or losses in the year 
no profit and loss account or cash flow statement is presented for the company as permitted by section 230 of the companies act 1985 
f sharebased payments 
the company issues equitysettled sharebased payments to certain employees equitysettled sharebased payments are measured at fair value 
excluding the effect of non marketbased vesting conditions at the date of grant the fair value determined at the grant date of the equitysettled  
sharebased payments is expensed on a straightline basis over the vesting period based on the company’s estimate of the shares that will eventually 
vest allowing for the effect of non marketbased vesting conditions 
fair value is measured using the blackscholes or the monte carlo pricing models the expected life used in the model has been adjusted based on 
management’s best estimate for the effects of nontransferability exercise restrictions and behavioural considerations 
the company also provides certain employees with the ability to purchase the company’s ordinary shares at a discount to the current market value  
at the date of the grant the company records an expense based on its estimate of the discount related to shares expected to vest on a straightline 
basis over the vesting period 
at each balance sheet date the entity revises its estimates for the number of options expected to vest it recognises the impact of the revision to 
original estimates if any in the profit and loss account with a corresponding adjustment to equity 
the proceeds received net of any directly attributable transaction costs are credited to share capital nominal value and share premium when the 
options are exercised 
1 dividends 
 
2008 
£m
2007 
£m
final dividend paid for the year ended 30 september 2007 of 573p per share  745 –
2007 final dividend paid for the year ended 30 september 2006 of 251p per share – 324
 
interim dividend paid for the year ended 30 september 2008 of 243p per share  317 –
2007 interim dividend paid for the year ended 30 september 2007 of 127p per share – 166
 1062 490
in addition the directors are proposing a final dividend in respect of the financial year ended 30 september 2008 of 478p per share which will absorb  
an estimated £626m of shareholders’ funds it will be paid on 6 march 2009 to shareholders who are on the register of members on 6 february 2009 
these financial statements do not reflect this dividend payable   
109
2 investments 
equity interests in subsidiary undertakings are as follows 
£m
cost 
at 1 october 2007  15440
additions in year  01
at 30 september 2008  15441
provision for diminution in value at 30 september 2007 and 2008  –
net book value  
at 30 september 2008  15441
at 30 september 2007 15440
the additions in the year represent investments in existing subsidiary undertakings the directors believe that the carrying value of the investments  
is supported by their underlying net assets 
principal trading subsidiary undertakings included in the group accounts at 30 september 2008 are shown in note 32 of the group financial 
statements all of these subsidiary undertakings are wholly owned and are engaged in the development distribution and support of business 
management software and related products and services for small and mediumsized businesses 
3 debtors 
 
2008 
£m
2007 
£m
amounts owed by group undertakings  2568 8932
other debtors  09 11
taxation recoverable  – 52
 2577 8995
4 creditors amounts falling due within one year 
 
2008 
£m
2007 
£m
bank overdraft – 13
amounts owed to group undertakings  4983 9802
accruals  08 09
 4991 9824
5 creditors amounts falling due in more than one year  
loans  
amounts falling due 
2008 
£m
2007 
£m
in more than two years but not more than five years  5749 5613
 5749 5613
bank loans are denominated in a number of currencies and bear interest based on libor or foreign equivalents appropriate to the country in which the 
borrowing is incurred included in loans above is £5750m 2007 £5615m of unsecured loans after unamortised issue costs taken out in connection 
with acquisitions this is drawn down under £8500m multicurrency revolving credit facilities £6500m expiring on 4 august 2011 and £2000m 
expiring by 13 january 2011 with £1000m amortising a year earlier in the table above loans are stated net of unamortised issue costs of £05m 
2007 £10m the company has incurred total issue costs of £76m 2007 £73m in respect of these facilities these costs are allocated to the 
income statement over the term of the facility using the effective interest method 
6 called up share capital 
authorised  
2008 
£m
2007 
£m
1860000000 2007 1860000000 ordinary shares of 1p each 186 186
 
issued and fully paid  
2008 
shares
2008  
£m 
2007 
shares
2007 
£m
at 1 october  1304160154 130 1294280944 129
allotted under share option schemes  5397403 01 9879210 01
at 30 september  1309557557 131 1304160154 130  
 
110 
6 called up share capital continued 
potential issues of ordinary shares 
certain senior executives hold options to subscribe for shares in the company at prices ranging from 13400p to 72100p under the share option 
schemes approved by shareholders details of 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 in note 18 of the group financial statements 
sharebased payments 
the grants and related accounting treatment adopted by the company under frs 20 “sharebased payment” are identical to that adopted by the 
group under ifrs 2 “sharebased payment” for details please refer to note 19 in the group financial statements 
7 reserves  
share 
premium 
account 
£m
treasury 
shares 
£m
merger  
reserve  
£m 
profit and 
loss account 
£m
total 
£m
at 1 october 2007  4782 133 611 3608 8868
new shares issued  84 – – – 84
utilisation of treasury shares – 31 – 31 –
retained loss for the year  – – – 795 795
dividends  – – – 1062 1062
equitysettled transactions  – – – 55 55
at 30 september 2008 4866 102 611 1775 7150
treasury shares 
the company holds treasury shares in a trust which was set up for the benefit of group employees the trust purchases the company’s shares in  
the market for use in connection with the group’s sharebased payments arrangements the trust holds 3648697 ordinary shares in the company 
2007 4755602 at a cost of £10218347 2007 £13272933 and a nominal value of £36487 2007 £47556 the trust originally purchased the 
shares in february 2006 with the cost being reflected in the treasury shares reserve  
the amounts shown in the treasury shares reserve at 30 september each year would be deducted from the profit and loss account reserve  
in determining the distributable profits of the company at that date 
these shares were originally acquired by the trust in the open market using funds provided by the company to meet obligations under the performance 
share plan during the year 1106905 shares were utilised to meet these obligations the costs of funding and administering the scheme are charged  
to the profit and loss account of the company in the period to which they relate the market value of the shares at 30 september 2008 was £71m  
2007 £118m 
8 operating lease commitments – minimum lease payments 
the company had no operating lease commitments during the year 2007 £nil 
9 capital commitments and contingent liabilities 
the company had no capital commitments or contingent liabilities at 30 september 2008 2007 none 
10 related party transactions 
the company has taken advantage of the exemption available under frs 8 “related party disclosures” not to disclose details of transactions with  
its subsidiary undertakings there are no other external related parties   independent auditors’ report to  
the members of the sage group plc 
111
we have audited the parent company financial statements of the sage 
group plc for the year ended 30 september 2008 which comprise the 
company balance sheet and the related notes these parent company 
financial statements have been prepared under the accounting policies  
set out therein we have also audited the information in the remuneration 
report that is described as having been audited 
we have reported separately on the group financial statements of  
the sage group plc for the year ended 30 september 2008 
respective responsibilities of directors and auditors 
the directors’ responsibilities for preparing the annual report the 
remuneration report and the parent company financial statements  
in accordance with applicable law and united kingdom accounting 
standards united kingdom generally accepted accounting practice  
are set out in the statement of directors’ responsibilities 
our responsibility is to audit the parent company financial statements  
and the part of the remuneration report to be audited in accordance with 
relevant legal and regulatory requirements and international standards  
on auditing uk and ireland this report including the opinion has  
been prepared for and only for the company’s members as a body in 
accordance with section 235 of the companies act 1985 and for  
no other purpose we do not in giving this opinion accept or assume 
responsibility for any other purpose or to any other person to whom this 
report is shown or into whose hands it may come save where expressly 
agreed by our prior consent in writing 
we report to you our opinion as to whether the parent company financial 
statements give a true and fair view and whether the parent company 
financial statements and the part of the remuneration report to be 
audited have been properly prepared in accordance with the companies 
act 1985 we also report to you whether in our opinion the information 
given in the directors’ report is consistent with the parent company 
financial statements the information given in the directors’ report 
includes that specific information presented in the business review that is 
cross referred from the business review section of the directors’ report  
in addition we report to you if in our opinion the company has not kept 
proper accounting records if we have not received all the information and 
explanations we require for our audit or if information specified by law 
regarding directors’ remuneration and other transactions is not disclosed 
we read other information contained in the annual report and consider 
whether it is consistent with the audited parent company financial 
statements the other information comprises only the chairman’s 
welcome the business review the directors’ report the corporate 
governance statement the nonaudited information in the remuneration 
report and all of the other information listed on the contents page  
we consider the implications for our report if we become aware of any 
apparent misstatements or material inconsistencies with the parent 
company financial statements our responsibilities do not extend to  
any other information 
basis of audit opinion 
we conducted our audit in accordance with international standards  
on auditing uk and ireland issued by the auditing practices board  
an audit includes examination on a test basis of evidence relevant to the 
amounts and disclosures in the parent company financial statements  
and the part of the remuneration report to be audited it also includes an 
assessment of the significant estimates and judgements made by the 
directors in the preparation of the parent company financial statements 
and of whether the accounting policies are appropriate to the company’s 
circumstances consistently applied and adequately disclosed 
we planned and performed our audit so as to obtain all the information 
and explanations which we considered necessary in order to provide  
us with sufficient evidence to give reasonable assurance that the parent 
company financial statements and the part of the remuneration report to 
be audited are free from material misstatement whether caused by fraud 
or other irregularity or error in forming our opinion we also evaluated  
the overall adequacy of the presentation of information in the parent  
company financial statements and the part of the remuneration report  
to be audited 
opinion 
in our opinion 
• the parent company financial statements give a true and fair  
view in accordance with united kingdom generally accepted 
accounting practice of the state of the company’s affairs as at  
30 september 2008 
• the parent company financial statements and the part of the 
remuneration report to be audited have been properly prepared  
in accordance with the companies act 1985 and 
• the information given in the directors’ report is consistent with the 
parent company financial statements 
 
 
pricewaterhousecoopers llp 
chartered accountants and registered auditors 
newcastle upon tyne  
17 december 2008 
   
shareholder information 
 
112 
financial calendar 
annual general meeting  3 march 2009
dividend payments 
final payable – year ended 30 september 2008  6 march 2009
interim payable – period ending 31 march 2009 june 2009
results announcements 
interim results – period ending 31 march 2009 6 may 2009
final results – year ending 30 september 2009  25 november 2009
shareholder information online 
the sage group plc’s registrars are able to notify shareholders by email of the availability of an electronic version of shareholder information  
whenever new shareholder information becomes available such as the sage group plc’s interim and full year results equiniti will notify you by  
email and you will be able to access read and print documents at your own convenience 
to take advantage of this service for future communications please go to wwwshareviewcouk and select “shareholder centre” where full details  
of the shareholder portfolio service are provided when registering for this service you will need to have your eleven character shareholder reference 
number to hand which is shown on your dividend tax voucher share certificate or form of proxy 
should you change your mind at a later date you may amend your request to receive electronic communication by entering your shareview portfolio 
online and amending your preferred method of communication from “email” to “post” if you wish to continue receiving shareholder information in the 
current format there is no need to take any action 
registrars 
equiniti 
aspect house 
spencer road 
lancing 
west sussex  
bn99 6da 
wwwshareviewcouk 
tel 0871 384 2859 
from outside the uk 44 0121 415 7047 
fax 0871 384 2125 
from outside the uk 44 0121 415 7057 
information for investors 
information for investors is provided on the internet as part of the group’s website which can be found at wwwsagecominvestors 
investor enquiries 
enquiries can be directed via our website or by contacting our investor relations department 
cynthia alers 
director of investor relations 
tel  44 0 191 294 3000 
fax  44 0 191 294 0002 
the sage group plc 
registered office 
north park 
newcastle upon tyne 
ne13 9aa 
registered in england number 2231246  2007 24 2007 13 2007 7
44 board of directors and advisers
46 directors’ report
49 corporate governance statement
54 remuneration report
66 financial statements – group
69 notes to the accounts – group
106 independent auditors’ report – group
107 financial statements – company
108 notes to the accounts – company
111 independent auditors’ report– company
112 additional information
112 shareholder information
www investorssagecom
contents
financial statements
governance
business review
about sage
the sage group plc
annual report and accounts 2008
sage is one ofthe leading global suppliers of
business management software and services to
small and mediumsized enterprises “smes”
operating in 26 countriesworldwidewe help
ourcustomers manage theirbusinesses more
eﬃcientlythrough the provision of locally
tailored products and qualitycustomersupport
designed and produced by radley yeldar wwwrycom
board photography by andy wilson
printed in england by ctd
this report is printed on take 2 silk which is fsc certified and contains
75 recycled and deinked pulp from post consumer waste and 25 ecf
elemental chlorine free virgin pulp this report was printed by an fsc and
iso 14001 certified printer using vegetable oil and soya based inks
fsc – forest stewardship council this ensures that there is an audited
chain of custody from the tree in the wellmanaged forest through to the
finished document in the printing factory
iso 14001 – a pattern of control for an environmental management system
against which an organisation can be credited by a third party
the co2 emissions from the production and distribution of this report
have been neutralised through investment in the sichuan province hydro
power project in western china the project displaces electricity generated by
fossilfuel power plants and will generate emission reductions of an estimated
360000 tco2 equivalent between 2006 and 2012 verified and certified to the
voluntary carbon standard
for more information about this year’s
kpis go to page 28
adjusted eps growth ebita
†
margin organic revenue growth
excluding sage healthcare division
cash generation from operations renewal rates on maintenance
and support contracts
keyperformance indicators “kpis”
3 23
114
2007 112
81
2007 81
6

01 financial highlights 02 chairman’s welcome
04 group overview
06 group strategy and performance
10 our business and markets
10 what we do who we are how we work
12 marketplace overview
16 business structure
18 customer experience
20 distribution channels
22 acquisition strategy
24 corporate responsibility
28 key performance indicators
30 regional review
30 uk  ireland
32 mainland europe
34 north america
36 rest of world
38 financial review
42 risk annualreportandaccounts2008
wwwsagecom
go online to access the sage group plc
2008 annual report and forpdfdownloads
www investorssagecom
wwwsagecom
the sage group plc
north park
newcastle upon tyne
ne13 9aa
annual report
and accounts 2008
wwwinvestorssagecom


Summary:
 02
total dividend
3
721p
0000 1442 2884 4326 5768 7210
2008 721
2007
2006
2005
2004
700
359
288
233
pence
“our large and international customer base the
ﬂexibilityof our business model and our consistently
strong cash ﬂows position us favourablyto manage
the current market conditions”
“the ukand north america recorded
respectable growth and ourbusinesses
in mainland europe and rest of world
reported another yearofstrong growth”
to see tony’s biography please go to page 44 03
this has been a challenging year with volatile and difficult
market conditions after a resilient performance in the first
half of the year the group saw softening customer
demand in the second half most notably in software
and softwarerelated services
despite these market conditions the group reported a
solid performance for the year the uk and north america
recorded respectable growth and our businesses in
mainland europe and rest of world reported another
year of strong growth
subscription revenues including combined software
support contracts performed strongly in all our markets
driving growth in established markets such as the uk
france south africa and australia as well as in our newer
markets of poland spain china and malaysia software
and softwarerelated services reported modest growth
affected by both the macroeconomic conditions and the
trend for customers increasingly to purchase combined
softwaresupport contracts
financial strength
the group remains highly cash generative and our balance
sheet is strong in addition we have committed facilities of
£850m of which £750m is committed until 2011 in these
market conditions this positions the group very well
this financial year saw major movements in foreign
exchange rates and a major weakening of sterling which
continued after the year end more than 70 of the
group’s profits are earned outside the uk and recent
exchange rate trends will have a favourable effect on
our reported earnings going forward
dividend
the board is strongly committed to enhancing shareholder
value we believe that our consistently strong cash flows
robust balance sheet and recurring revenue streams
provide a sustainable basis for a progressive dividend
policy whilst ensuring that the board can continue
to maintain the appropriate levels of organic and
acquisitionled investment
as a result we are increasing the full year dividend by
3 to 721p per share 2007 700p per share with a
proposed final dividend of 478p per share 2007 573p
per share following the rebasing of our dividend policy
which was reflected in our final dividend in the second
half of the prior year
management changes
david clayton joined the board on 1 october 2007 as
group strategy and mergers and acquisitions director
on 1 november 2007 ian mason chief executive of
electrocomponents plc joined the board as a non
executive director mark rolfe formerly finance director of
gallaher group plc joined the board on 1 december 2007
and became chair of the audit committee on 1 april 2008
we were also very pleased to welcome sue swenson to
the group as ceo north america sue joined us in march
2008 and brings a formidable record of achievements to
our north american business
people
we now employ over 14500 people 2007 13900
and our employees are at the heart of our strategy
continuously to improve our customers’ experience
as markets become more challenging over the coming
year we rely on our employees to enhance our competitive
advantage in all our markets our loyal dedicated and
customerfocused employees have greatly contributed to
our results in this challenging year and we thank them for
their continuing efforts
outlook
we will continue to strive to create value for our
shareholders by focusing on tight cost control improved
operational efficiency and leveraging our strong geographic
market positions it is uncertain as to how long these
difficult market conditions will continue and therefore we
remain cautious in our outlook however our large and
international customer base the flexibility of our business
model and our consistently strong cash flows position us
favourably to manage the current market conditions
tony hobson
chairman
dearshareholder
awards
sage prides itself on providing high quality
software and customer support tailored to a
customer’s country and industry we constantly
strive to provide outstanding customer service
and this year we have won many awards in
recognition of this
uk  ireland
business software supplier of the year
at computing magazine’s awards for
excellence 2008
payroll software provider of the year
for medium to large companies at the irish
payroll association awards
payroll software provider of the year
at pay magazine’s annual pay awards
mainland europe
customer service golden laurel and
the golden bit award for best hr software
in poland
preferred vendor 2008 award from channel
partner magazine and erp system of the
year from the centre of enterprise research
in germany
golden customer relation centre award
in spain
north america
product of the year award for act by sage
2008 from communication solutions magazine
product of the year award for sage saleslogix
v72 at the searchcrmcom awards
smb software suites channel champion
at crn channel champion awards
gold and silver medals for best contact centre
agent and best contact centre respectively
at the world contact centre awards
rest of world
best customer service award in the business
process enabling south africa awards
for further details on our awards please visit
wwwsagecomourbusinessnewsroom